REG - Sutton Harbour Grp - Interim Results
14/12/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231214:nRSN6768Wa&default-theme=true
RNS Number : 6768W Sutton Harbour Group PLC 14 December 2023
14 December 2023
Sutton Harbour Group plc
("Sutton Harbour" or the "Company")
Sutton Harbour Group plc, the AIM-quoted marine and waterfront regeneration
specialist, announces its unaudited interim results for the six-month period
to 30 September 2023.
Financial Highlights
· Gross profit £1.620m (6 months to 30 September 2022: gross
profit £1.415m)
· Loss before taxation £0.119m (6 months to 30 September 2022:
profit before tax £0.223m)
· Gross assets £98.859m (31 March 2023: £96.049m)
· Net assets £58.850m (31 March 2023: £56.067m)
· Net asset value per share 41.2p (31 March 2023: 43.1p)
· Net debt £30.468m (31 March 2023: £29.259m)
· Gearing 51.8% (31 March 2023: 52.2%)
Company Highlights
· Completion of Harbour Arch Quay and sale of all 14 apartments
completed by early November 2023
· Full occupancy of the newly refurbished Old Barbican Market
· Marinas' occupancies at near capacity
· North Quay House redevelopment programmed for 2024 delivery
· Debt reduction strategy plan to reduce interest burden to
commence in 2024
Philip Beinhaker, Executive Chairman, commented:
"In the period under review and into recent months, the Company has delivered
the construction work and full occupation of two major projects in Sutton
Harbour, both which have already added to the quality of the local built
environment and are the first significant developments in more than a decade
around Sutton Harbour. The Company is committed to continuing with its
development programme to ensure the future quality and sustainability of the
area and delivery of medium to long term value for investors."
For further information, please contact:
Sutton Harbour Group plc +44 (0) 1752 20 4186 Philip Beinhaker, Executive Chairman
Corey Beinhaker, Chief Operating Officer
Natasha Gadsdon, Finance Director
Strand Hanson Limited +44 (0) 20 7409 3494 James Dance
(Nominated & Financial Adviser and Broker) Richard Johnson
Executive Chairman's Statement
For the six-month period to 30 September 2023
Results and Financial position
Trading during the first six months of the financial year was robust with
gross profit up 14.4% to £1.620m from £1.415m for the comparable period to
30 September 2022 ("H1 2022"). This reflects continued occupancy of the
marinas at near-capacity rates and strength of the car parks and property
rental activities. Bottom line results have been materially affected by
progressive interest rate rises giving rise to the net loss for the period.
The loss before taxation for the six-month period to 30 September 2023 was
£0.119m compared to £0.223m profit before taxation for H1 2022.
As at 30 September 2023, net assets were £58.850m (equal to 41.2 pence per
share), up from £56.067m (equal to 43.1 pence per share) as at 31 March 2023.
The increase in net assets of £2.783m is largely attributable to the issue of
12,994,407 new ordinary shares at 22.5 pence each by way of a subscription by
the Company's major shareholder, raising gross proceeds of £2.9m, in May
2023.
Net Debt has increased to £30.468m, being £1.209m more than the net debt
position as at 31 March 2023 of £29.259m. Notable components of this change
were the £2.9m share subscription cash inflow offset by £1.6m bank loan
repayments and investments into the active development projects. Gearing,
measured as net debt as a percentage of net assets, was broadly unchanged at
51.8% as at 30 September 2023 (31 March 2023: 52.2%).
Trading and Operations Report
During the six-month reporting period, the marinas have been occupied at
levels very close to full capacity. The Company held prices for berthing at
Sutton Harbour at the previous season's rates as consideration to
berth-holders for the disruption of the Environment Agency's planned lock gate
cill replacement works which started after this interim reporting period.
Berthing rates charged at King Point Marina were increased by inflation and
this marina's results also reflect the new five-year lease with Princess
Yachts on improved terms. Fishing results show a slight improvement to the
comparative period with an increase in the amount of fuel sold. Overall,
contribution from the Marine trading segment was £0.895m in the six-month
period to 30 September 2023 (H1 2022: £0.681m).
The Environment Agency is funding the costs of the lock works. The
intermittent disruption caused by these works started in early October 2023
and will run until mid December 2023. A second 10 week long tranche of these
works will take place in early 2024. The direct financial impact of the lock
works will be accounted in the results for the second half year and will
incorporate the costs of providing alternative landing and temporary berthing
facilities.
Starting in November 2023, selling of marina berths for the 2024/25 season has
begun. Rates for King Point Marina have been increased by inflation, whereas
rates at Sutton Harbour Marina have been increased by only a modest amount,
adjusted to recognise the ongoing lock works disruption. Rates will increase
to market norms from 2025/26. To date, sales are very encouraging showing
strong levels of berth bookings at this stage in the selling season.
During the first half of this financial year, overall results from the Real
Estate segment were slightly up on the comparative period at £0.505m gross
profit (2022: £0.480m gross profit). These results take account of the new
lettings in the newly refurbished Old Barbican Market, countering the loss of
rents from North Quay House, the largely decanted office building now proposed
for redevelopment to a new waterfront residential development. Occupancy of
the Company's retail and industrial business space continues to be resilient.
The Company has now secured its power requirements by way of a capped buying
strategy to avoid future power cost shocks as was acutely experienced in the
second half of the previous financial year. Power costs have now reduced from
the winter 2022/23 peak, but are still considerably higher than pre October
2022.
Development / Regeneration
Harbour Arch Quay
The building was completed in October 2023 with sales completions of all 14
apartments taking place by early November 2023. The development loan of £4.5m
was repaid and the Company has now also repaid £3.2m against the NatWest term
loan. The ground floor offices will be made ready for the Company to occupy in
2024 and letting of the existing offices will then follow.
The Company is pleased to have recommenced active property development after
more than a decade's hiatus and the sales of all units during construction
demonstrates demand for high quality property in the environment of Sutton
Harbour.
Whilst the property sales achieved some of the highest prices recorded for
apartments in Plymouth, the Company expects a construction project result just
below breakeven once all costs are finally accounted. The full accounting
result will show a loss in the second half year after taking into account all
other costs including historical site holding costs, costs of re-design and
time of Company personnel spent on the project. The Company had projected a
profitable result but encountered delays and additional costs due to the
complex ground conditions, resolution of party wall agreements, change in fire
safety regulations necessitating some supplementary works and additional costs
arising from supply chain shortages, materials inflation and labour rate
increases. Nonetheless, the Company has now identified a team of experienced,
reliable professionals and tradespeople most suited to delivering high quality
waterfront property in this area and now has current experience to benefit
improved cost management for the delivery programme of future projects.
Old Barbican Market
After completing the full refurbishment of this listed property early in 2023,
all three units are now occupied with national covenant tenants whose draw to
the Barbican has benefited footfall to the area, thereby supporting other
tenants and businesses, and creating greater appeal to the wider public, both
local people and visitors. This development has demonstrated that targeted
investment can deliver the opportunity for value growth and future
sustainability of the area.
North Quay House
The next development proposed by the Company is the delivery of a high quality
10 apartment building at North Quay House. North Quay House is an, office
building overlooking the harbour, now largely decanted. The proposed
development will incorporate retail space and parking. Subject to planning
consent and financing, this development is programmed for delivery in 2024 and
following on from the success of Harbour Arch Quay, already has interest from
prospective apartment purchasers.
Sugar Quay
Since gaining planning consent for a single building at Sugar Quay, the
Company is working on adapting the design to enable development in phases.
This approach is more appropriate in the current market and will allow staged
financing and development at a pace to suit absorption of the finished
apartments. Additionally, there are a number of design improvements that will
be incorporated into this proposal including provision of harbour views to
significantly more units and an improved off street unloading and reception
access. The Company expects to submit this updated application to the Local
Planning Authority later in 2024.
Former Airport Site
The planning freeze of the former airport site to protect it against
alternative use expires in March 2024. It is expected that the Company will
submit a masterplan to the Local Planning Authority in the near future.
Financial Structure
With interest rates now expected to persist at or around current levels (5.25%
current Bank of England rate) for the immediately foreseeable future, the
Company recognises that its gearing level is high. The Board is focused on
reducing its debt level significantly within the next year to manage debt
servicing costs down to a more comfortable level. At present the Company has
banking facilities of £21.7m (after having a repaid a further £1.6m
subsequent to this reporting period in addition to a £1.6m repayment during
the first half year period) secured by a property asset portfolio valued at 31
March 2023 of £58.9m. The former airport site is not included in this
security figure.
The Company has therefore begun exploring options to realise the value of some
of its asset portfolio within the next year to reduce bank debt and to provide
some working capital for essential investment into operational assets and for
pre-construction project costs. The Company has identified assets for disposal
which are more easily separable from the Group and have reached their
valuation potential from the Group's perspective. This is in line with the
Group's stated Business Plan in the last published Annual Report. Divestment
of between c.8-12% of the total asset base is under consideration. The Company
will update on divestments as and when agreements for disposals are entered
into. In due course, acquisition and retention of strategic assets, whether
bought or developed, is expected to increase.
The Company is actively working with its current bank, NatWest, other banks
and specialist development funders to support the debt reduction plan and
future funding needs. The current banking facility expires in December 2024.
The related party loans with Beinhaker Design Services Ltd and Rotolok
(Holdings) Limited expire in May 2024 and whilst part of the liability is
expected to be repaid at maturity, the Company is exploring options to extend
and/or convert to equity a portion of the liability.
Summary
In the period under review and into recent months, the Company has delivered
the construction work and full occupation of two major projects in Sutton
Harbour, both of which have already added to the quality of the local built
environment and are the first significant developments in more than a decade
around Sutton Harbour. Economic conditions, changing regulations and supply
side factors have presented challenges to the development process and there
have been points that have been learned in the delivery of both these projects
which will enhance management of future projects. With the benefit of this
current experience, the Company is committed to continuing with its
development programme to ensure the future quality and sustainability of the
area and delivery of medium to long term value for investors.
Philip Beinhaker
EXECUTIVE CHAIRMAN
Consolidated Statement of Comprehensive Income
6 months to 6 months to Year Ended
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Revenue 4,446 4,420 8,161
Cost of Sales (2,826) (3,005) (5,915)
Gross Profit 1,620 1,415 2,246
Fair value adjustment on fixed assets and investment property - - (1,925)
Administrative expenses (817) (729) (1,193)
Operating profit/(loss) from continuing operations 803 686 (872)
Financial income 6 - 1
Financial expense (928) (463) (1,150)
Net financing costs (922) (463) (1,149)
(Loss)/Profit before tax from continuing operations (119) 223 (2,021)
Taxation credit on profit from continuing operations - (15)
(Loss)/Profit from continuing operations (119) 223 (2,036)
Basic loss/earnings per share (0.08p) 0.17p (1.57p)
Diluted loss/earnings per share (0.08p) 0.17p (1.57p)
6 months to 6 months to Year Ended
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Profit from continuing operations (119) 223 (2,036)
Other comprehensive income/(expenses)
Continuing operations:
Revaluation of property, plant and equipment - - 2,435
Deferred taxation on income and expenses recognised directly
in the consolidated statement of comprehensive income
Effective portion of changes in fair value of cash flow hedges - - (543)
Total other comprehensive income - - 1,892
Total comprehensive income for the period attributable to equity shareholders
(119) 223 (144)
Consolidated Balance Sheet
As at As at As at
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Non-current assets
Property, plant and equipment 38,432 36,224 38,540
Investment property 17,333 18,857 17,205
Inventories 13,420 13,249 13,363
69,185 68,330 69,108
Current assets
Inventories 27,005 20,779 23,749
Trade and other receivables 2,139 1,515 2,092
Cash and cash equivalents 530 991 1,095
Tax recoverable - - 5
29,674 23,285 26,941
Total assets 98,859 91,615 96,049
Current liabilities
Bank Loans 1,600 - 3,200
Other Loans 7,676 3,355 5,477
Trade and other payables 3,583 2,361 3,301
Finance lease liabilities 22 40 66
Deferred income 1,232 1,219 2,132
14,113 6,975 14,176
Non-current liabilities
Other interest-bearing loans and borrowings 21,700 24,450 21,600
Finance lease liabilities - 118 10
Deferred government grants 646 646 646
Deferred tax liabilities 3,550 2,992 3,550
25,896 28,206 25,806
Total liabilities 40,009 35,181 39,982
Net assets 58,850 56,434 56,067
Issued capital and reserves attributable to owners of the parent
Share capital 16,536 16,406 16,406
Share premium 16,744 13,972 13,972
Other reserves 24,072 22,180 24,072
Retained earnings 1,498 3,876 1,617
Total equity 58,850 56,434 56,067
Consolidated Statement of Changes in Equity
Share capital Share premium Revaluation reserve Merger reserve Hedging reserve Retained earnings TOTAL
----------Other Reserves----------
£000 £000 £000 £000 £000 £000 £000
Balance at 1 April 2023 16,406 13,972 20,201 3,871 - 1,617 56,067
Comprehensive income/(expense)
Issue of Shares 130 2,772 - - - - 2,902
Loss for the period (119) (119)
Total comprehensive income/(expense) 130 2,772 - - - (119) 2,783
6 month period ended 30 September 2023
Balance at 30 September 2023 16,536 16,744 20,201 3,871 - 1,498 58,850
Balance at 1 April 2022 16,406 13,972 18,309 3,871 - 3,653 56,211
Comprehensive income/(expense)
Issue of Shares - - - - - 223 223
Profit for the period
Total comprehensive income/(expense)
6 month period ended 30 September 2022 - - - - - 223 223
Balance at 30 September 2022 16,406 13,972 18,309 3,871 - 3,876 56,434
Balance at 1 October 2022 16,406 13,972 18,309 3,871 - 3,876 56,434
Comprehensive income/(expense)
Profit for the period - - - - - (2,259) (2,259)
Other comprehensive income/(expense)
Revaluation of property, plant and equipment - - 2,435 - - - 2,435
Deferred tax on revaluation - - (543) - - - (543)
Total comprehensive income/(expense) - - 1,892 - - (2,259) (367)
6 month period ended 31 March 2023
Balance at 31 March 2023 16,406 13,972 20,201 3,871 - 1,617 56,067
Consolidated Cash Flow Statement
6 months to 6 months to Year Ended
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Cash generated from total operating activities (2,989) (1,321) (2,658)
Cash flows from investing activities
Net expenditure on investment property (128) (662) (935)
Expenditure on property, plant and equipment (73) (24) (97)
Net cash used in investing activities
(201) (686) (1,032)
Cash flows from financing activities
Proceeds from sale of shares 2,924 - -
Expenses of share issuance (22) - -
Interest paid (922) (557) (1,009)
Loan drawdowns/(repayment of borrowings) 699 2,667 7,263
Net finance lease (payments)/receipts (54) (82) (2,439)
Net cash generated from financing activities
2,625 2,028 3,815
Net increase/(decrease) in cash and cash equivalents (565) 21 125
Cash and cash equivalents at beginning of period 1,095 970 970
Cash and cash equivalents at end of period 530 991 1,095
Notes to Interim Report
General information
This consolidated interim financial information does not comprise statutory
accounts within the meaning of section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31 March 2023 were approved by the Board
of Directors on 31 July 2023 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified and did not contain
any statement under section 498 of the Companies Act 2006.
Copies of the Group's financial statements are available from the Company's
registered office, Sutton Harbour Office, Guy's Quay, Sutton Harbour,
Plymouth, PL4 0ES and on the Company's website www.sutton-harbour.co.uk.
This consolidated interim financial information has not been audited.
Basis of preparation
The consolidated interim financial information should be read in conjunction
with the annual financial statements for the year ended 31 March 2023, which
have been prepared in accordance with International Financial Reporting
Standards (IFRS) and International Financial Reporting Interpretation
Committee (IFRIC) interpretations as endorsed by the European Union, and those
parts of the Companies Acts 2006 as applicable to companies reporting under
IFRS.
Accounting policies
Except as described below, the accounting policies applied are consistent with
those of the annual financial statements for the year ended 31 March 2023, as
described in those annual financial statements.
Accounting estimates and judgements
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making judgements
that are not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised, if the revision affects only that period, or in the
period of the revision and future periods, if the revision affects both
current and future periods.
Segment information
Management has determined the operating segments based on the reports reviewed
by the Board of Directors that are used to make strategic decisions.
The Board of Directors considers the business from an operational perspective
as having only one geographical segment, with all operations being carried out
in the United Kingdom.
The Board of Directors considers the performance of the operating segments
using operating profit. The segment information provided to the Board of
Directors for the reportable segments for the period ended 30 September 2023
is as follows:
6 months to 30 September 2023 Marine Real Estate Car Parking Regeneration Total
£000 £000 £000 £000 £000
Revenue 3,221 714 511 - 4,446
Gross profit prior to non-recurring items 895 505 305 (85) 1,620
1,620
Unallocated:
Administrative expenses (817)
Operating profit from continuing operations 803
Financial income 6
Financial expense (928)
Loss before tax from continuing operations (119)
Taxation -
Loss for the year from continuing operations (119)
Depreciation charge
Marine 161
Car Parking 7
Administration 13
181
Segment Information (continued)
6 months to 30 September 2022 Marine Real Estate Car Parking Regeneration Total
£000 £000 £000 £000 £000
Revenue 3,358 644 418 - 4,420
Gross profit prior to non-recurring items 681 480 254 - 1,415
1,415
Unallocated:
Administrative expenses (729)
Operating profit from continuing operations 686
Financial income -
Financial expense (463)
Profit before tax from continuing operations 223
Taxation -
Profit for the year from continuing operations 223
Depreciation charge
Marine 172
Car Parking 10
Administration 16
198
Segment Information (continued)
Marine Real Estate Car Parking Regeneration Total
Year ended 31 March 2023
£000 £000 £000 £000 £000
Revenue 6,016 1,374 771 - 8,161
Segmental Operating Profit before Fair value adjustment and unallocated 974 965 449 (142) 2,246
expenses
Fair value adjustment on fixed assets and investment property assets - (1,925) - - (1,925)
Unallocated:
Administrative expenses
(1,193)
Operating profit from continuing operations (872)
Financial income 1
Financial expense (1,150)
Loss before tax from continuing operations (2,021)
Taxation (15)
Loss for the year from continuing operations (2,036)
Depreciation charge
Marine 355
Car Parking 19
Administration 16
390
30 September 2023 30 September 2022 31 March 2023
£000 £000 £000
Segment assets:
Marine 32,663 30,747 32,956
Real estate 17,864 19,243 17,656
Car Parking 6,829 6,382 6,843
Regeneration 40,646 33,998 37,272
Total segment assets 98,002 90,370 94,727
Unallocated assets:
Property, plant and equipment 53 44 41
Trade & other receivables 274 210 185
Cash & cash equivalents 530 991 1,096
Total assets 98,859 91,615 96,049
Segment Information (continued)
30 September 2023 30 September 2022 31 March 2023
£000 £000 £000
Segment liabilities:
Marine 1,696 1,710 2,702
Real estate 425 724 415
Car Parking 110 92 100
Regeneration 2,847 1,284 2,298
Total segment liabilities 5,078 3,810 5,515
Unallocated liabilities:
Bank overdraft & borrowings 30,998 27,963 30,354
Trade & other payables 382 415 562
Tax payable 1 1 1
Deferred tax liabilities 3,550 2,992 3,550
Total liabilities 40,009 35,181 39,982
Unallocated assets included in total assets and unallocated liabilities
included in total liabilities are not split between segments as these items
are centrally managed.
Taxation
The Company has applied an effective tax rate of 25% (2022: 19%) based on
management's best estimate of the tax rate expected for the full financial
year and is reflected in a movement in deferred tax.
Dividends
The Board of Directors do not propose an interim dividend (2022: nil).
Earnings per share
6 months to 6 months to Year Ended
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
pence pence pence
Continuing operations
Basic (loss)/earnings per share (0.08p) 0.17p (1.57p)
Diluted (loss)/earnings per share* (0.08p) 0.17p (1.57p)
Basic Earnings per Share:
Basic earnings per share have been calculated using the loss for the period of
£119,000 (2022: profit £223,000; year ended 31 March 2023: loss
£2,036,000). The average number of ordinary shares in issue, excluding those
options granted under the SAYE scheme, of 140,506,216 (2022: 129,944,071; year
ended 31 March 2023: 129,944,071) has been used in our calculation.
Diluted Earnings per Share:
Diluted earnings per share uses a weighted average number of 140,774,968
(2022: 130,182,220; year ended 31 March 2023) ordinary shares after adjusting
for the effects of share options in issue: 257,972 ordinary shares (2022:
237,972; year ended 31 March 2023). If the inclusion of potentially issuable
shares would decrease loss per share, the potentially issuable shares are
excluded from the weighted average number of shares outstanding used to
calculate diluted earnings per share.
Property valuation
Freehold land and buildings and investment property have been independently
valued by Jones Lang LaSalle as at 31 March 2023, in accordance with the
Practice Statements in the Valuations Standards (The Red Book) published by
the Royal Institution of Chartered Surveyors.
A further valuation will be commissioned for the year ending 31 March 2024, as
in previous years.
Cash and cash equivalents
As at As at As at
30 September 2023 30 September 2022 31 March 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Cash and cash equivalents per balance sheet and cash flow statement 530 991 1,095
Cash flow statements
6 months to 6 months to Year Ended
30 September 2023 30 September 2022 31 March 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Cash flows from operating activities
Profit/(loss) for the period (119) 223 (2,036)
Adjustments for:
Taxation - - 15
Financial income (6) - (1)
Financial expense 928 463 1,150
Fair value adjustment on fixed assets and investment property - - 1,925
Depreciation 181 198 390
Cash generated from operations before changes in working capital and
provisions
984 884 1,443
Increase in inventories (3,313) (1,862) (5,162)
(Increase)/decrease in trade and other receivables (42) 304 (282)
Increase in trade and other payables 282 359 1,421
(Decrease) in deferred income (900) (1,006) (93)
Decrease in provisions - - 15
Cash generated from operations (2,989) (1,321) (2,658)
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FFEFEDEDSEDERecent news on Sutton Harbour
See all newsREG - Sutton Harbour Grp - Former Plymouth City Airport Update
AnnouncementREG - Sutton Harbour Grp - Former Plymouth City Airport Update
AnnouncementREG - Sutton Harbour Grp - Loan Facilities and Related Party Loan
AnnouncementREG - Sutton Harbour Grp - Further re Former Plymouth City Airport
AnnouncementREG - Sutton Harbour Grp - Former Plymouth City Airport Update
Announcement