REG - Mountview Estates. - Preliminary Results for year ended 31 March 2018

Mountview Estates P.L.C.Announcement

14/06/2018 07:05

RNS Number : 3341R
Mountview Estates PLC
14 June 2018
 


MOUNTVIEW ESTATES P.L.C.
 
Preliminary Results for the year ended 31 March 2018
 
CHIEF EXECUTIVE OFFICER'S STATEMENT
 
It is always disappointing to report profits that have fallen but in the present uncertain economic climate I consider that my team have given a very good performance.  In uncertain times transactions usually take longer to complete and so it is that during the year ended 31 March 2018 we completed significantly less sales than in the previous financial year.  This fall in the number of sales has caused the fall in profits to a far greater degree than any perceived fall in prices.
 
Whilst the sales figures have fallen, the cost of the purchases which we have made during this financial year has increased by over 50% compared with the previous year.  It is purchases that are the future of the Company and I am pleased to report that it is not only the quantity of purchases but also the quality of the purchases that has improved.
 
It is now nearly 30 years since regulated tenancies were last created but this asset class continues to exist in sufficient quantities to be the mainstay of our business.  The percentage of vacant possession value that has to be paid for such assets has increased over the years but, given our low gearing, we believe that we continue to be able to produce the best returns that are available within our area of expertise in the property industry.  We have made modest diversification into life tenancies and as leases become shorter where we are the ground landlord there is money to be made in granting lease extensions. Nevertheless these are only supplementary to our main business of buying residential properties that are subject to regulated tenancies and awaiting vacant possession.
 
Whilst regulated tenancies continue to exist for longer than may have been anticipated when the 1988 Rent Act became effective a business as narrowly focused as our does have a finite life.  The business will continue to prosper but it will become increasingly difficult to replace stock as it is sold.  Some shareholders may wish to pursue their own avenues of diversification without selling Mountview shares and so the final dividend payable on 13 August 2018 will be increased to 200 pence per share.  This will make a total of 400 pence per share in respect of the Company's year ended 31 March 2018.
 
Your Board is aware that the taxation of dividend income has changed and, while 400 pence per share is an increase of a third compared with 300 pence per share last year, the 300 pence per share in respect of the Company's year ended 31 March 2016 was worth 333 pence gross in the hands of ordinary rate taxpayers.  Thus your Board are happy to admit that the new total dividend is only an increase of 20% over the total of two years ago.  The new dividend will be nearly twice covered.
 
This Statement does not seek to deny that profits have fallen but the business remains soundly based and financially secure.  When Brexit negotiations and other economic uncertainties are resolved the purchases we are presently able to make will realise good profits and we can look forward to future increased earnings.
 
As has always been the case your Board only increase dividends when they are confident of maintaining that increase and so it is reasonable to expect the increase to 400 pence per share to be maintained in future years.
 
Finally, it is only possible to maintain the Company's high level of performance because of the quality of the personnel in the team that I have around me.  On behalf of all shareholders, I wish to thank all my hard-working and loyal staff and colleagues for the contribution they each make to the continuing well-being of Mountview Estates P.L.C.
 
Duncan Sinclair
14 June 2018
 
 
MOUNTVIEW ESTATES P.L.C.
 
FINANCIAL HIGHLIGHTS
 




 


 


 


 
   2018


 


 
2017


 


 
(Decrease)/Increase




 


 


 


£


 


£


 


%




 


 


 


 


 


 


 


 




Revenue (millions)


 


 


70.3


 


78.2


 


                       (10.1)
 




 


 


 


 


 


 


 


 




Gross Profit (millions)


 


 


43.4


 


52.1


 


                          (16.7)
 




 


 


 


 


 


 


 


 




Profit Before Tax (millions)


 


 


36.9


 


45.0


 


(18.0)




 


 


 


 


 


 


 


 




Profit Before Tax excluding investment properties revaluation (millions)


 


 


37.3


 


46.0


 


                         (18.9)




 


 


 


 


 


 


 


 




Equity Holders' Funds (millions)


 


 


354.5


 


336.3


 


5.4




 


 


 


 


 


 


 


 




Earnings per share (pence)


 


 


766.4


 


929.1


 


(17.5)




 


 


 


 


 


 


 


 




Net assets per share (£)


 


 


90.91


 


86.25


 


5.4




 


 


 


 


 


 


 


 




Dividend per share (pence)


 


 


400


 


300


 


33.3




 


 


 


 


 


 


 


 




 
Mountview Estates P.L.C. advises its shareholders that, following the issue of the final results, the relevant dates in respect of the proposed final dividend payment of 200 pence per share are as follows:
 




Ex-dividend date
 


 5 July 2018




Record date


 6 July 2018
 




Payment date


13 August 2018
 




 
  
MOUNTVIEW ESTATES P.L.C.
 
CONSOLIDATED INCOME STATEMENT
 
FOR THE YEAR ENDED 31 MARCH 2018
  




 


          Year


 


Year




 


ended


 


ended




 


31.03.2018


 


31.03.2017




 


£'000


 


£'000




 


 


 


 




REVENUE


  70,272


 


78,232




 


 


 


 




Cost of sales


(26,915)


 


(26,176)




 


 


 


 




GROSS PROFIT


43,357


 


52,056




 


 


 


 




Administrative expenses


(5,507)


 


(5,231)




Gain on sale of investment properties


145


 


0




 


 


 


 




Operating profit before changes in
fair value of investment properties


37,995


 


46,825




 


 


 


 




(Decrease) in fair value of investment  properties


(376)


 


(1,020)




 


 


 


 




PROFIT FROM OPERATIONS


37,619


 


45,805




 


 


 


 




Net finance costs


(714)


 


(819)




 


 


 


 




PROFIT BEFORE TAXATION


36,905


 


44,986




 


 


 


 




Taxation - current


(7,197)


 


(9,234)




Taxation - deferred


173


 


473




 


 


 


 




Taxation


(7,024)


 


(8,761)




 


 


 


 




PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS


29,881


 


36,225




 


 


 


 




Basic and diluted earnings per share (pence)


766.4p


 


929.1p




 
 
 
 
 
MOUNTVIEW ESTATES P.L.C.
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
 
FOR THE YEAR ENDED 31 MARCH 2018
 




 


 


As at


As at




 


 


31.03.2018


31.03.2017




 


 


£'000


£'000




ASSETS


 


 


 




NON-CURRENT ASSETS


 


 


 




Property, plant and equipment


 


  1,771


1,833   




Investment properties


 


27,825


28,741




 


 


 


 




 


 


29,596


30,574




CURRENT ASSETS


 


 


 




Inventories of trading properties


 


376,879


347,380




Trade and other receivables


 


    1,859


    1,613




Cash at bank


 


    5,368


       825




 


 


 


 




 


 


384,106


349,818




 


 


 


 




TOTAL ASSETS


 


413,702


380,392




 


 


 


 




EQUITY AND LIABILITIES


 


 


 




Share capital


 


        195


     195




Capital redemption reserve


 


          55


       55




Capital reserve                                


 


          25


       25




Other reserve


 


          56


       56




 


 


 


 




Retained earnings


 


354,131


335,948




 


 


 


 




 


 


354,462


336,279




NON-CURRENT LIABILITIES


 


 


 




Long-term borrowings


 


  49,900


29,000




Deferred tax


 


    4,696


  4,869




 


 


 


 




 


 


  54,596


33,869




 


 


 


 




CURRENT LIABILITIES


 


 


 




Bank overdrafts and short-term loans


 


      463


3,042




Trade and other payables


 


   1,843


1,951




Current tax payable


 


   2,338


5,251




 


 


 


 




 


 


    4,644


10,244




 


 


 


 




TOTAL LIABILITIES


 


  59,240


44,113




 


 


 


 




TOTAL EQUITY AND LIABILITIES


 


413,702


380,392




 
 
 
 
MOUNTVIEW ESTATES P.L.C.
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
 
FOR THE YEAR ENDED 31 MARCH 2018
 
 
 




 


 


 


Capital


 


 


 




 


Share


Capital


Redemption


Other


Retained


 




 


Capital


Reserve


Reserve


Reserves


Earnings


Total




 


£'000


£'000


£'000


£'000


£'000


£'000




 


 


 


 


 


 


 




 


 


 


 


 


 


 




Balance as at 1 April 2016


195


25


55


56


311,421


311,752




 


 


 


 


 


 


 




Profit for the year


 


 


 


 


36,225


36,225




 


 


 


 


 


 


 




Dividends


 


 


 


 


(11,698)


(11,698)




 


 


 


 


 


 


 




Balance as at 31 March  2017


195


25


55


56


335,948


336,279




 


 


 


 


 


 


 




 
 
 
 
 




 


 


 


Capital


 


 


 




 


Share


Capital


Redemption


Other


Retained


 




 


Capital


Reserve


Reserve


Reserves


Earnings


Total




 


£'000


£'000


£'000


£'000


£'000


£'000




 


 


 


 


 


 


 




 


 


 


 


 


 


 




Balance as at 1 April 2017


195


25


55


56


335,948


336,279




 


 


 


 


 


 


 




Profit for the year


 


 


 


 


   29,881


  29,881




 


 


 


 


 


 


 




Dividends


 


 


 


 


 (11,698)


 (11,698)




 


 


 


 


 


 


 




Balance as at 31 March  2018


195


25


55


56


354,131


354,462




 


 


 


 


 


 


 




 
 
 
MOUNTVIEW ESTATES P.L.C.
 
GROUP CASH FLOW STATEMENT
 
FOR THE YEAR ENDED 31 MARCH 2018
 
 




                                        


 


 


Year


 


 
                                      Year




 


 


 


ended


 


ended




 


 


 


31.03.2018


 


31.03.2017




 


 


 


 


 


£'000




Cash flow from operating activities


 


 


 


 


 




 


 


 


 


 


 




Operating profit  


 


 


37,619


 


45,805




Adjustment for:


 


 


 


 


 




Depreciation


 


 


66


 


79




 


 


 


 


 


 




Gain on disposal of investment properties


 


 


(145)


 


-




Decrease in fair value of investment properties


 


 


376


 


1,020




Cash flow from operations before changes in working capital 


 


 


37,916


 


46,904




 


 


 


 


 


 




(Increase) in inventories


 


 


(29,499)


 


(13,272)




(Increase)Decrease in receivables


 


 


(246)


 


107




(Decrease) in payables


 


 


(108)


 


(1,049)




 


 


 


 


 


 




 


 


 


 


 


 




Cash generated from operations


 


 


8,063


 


32,690




 


 


 


 


 


 




Interest paid


 


 


(714)


 


(819)




Income taxes paid


 


 


(10,110)


 


(9,458)




 


 


 


 


 


 




Net cash (outflow)/ inflow from operating activities


 


 


(2,761)


 


22,413




 


 


 


 


 


 




Investing activities


 


 


 


 


 




Proceeds from disposal of investment properties


 


 


685


 


-




Capital expenditure on investment properties


 


 


-


 


(312)




Purchase of property, plant and equipment


 


 


(4)


 


(1)




 


 


 


 


 


 




Net cash inflow/(outflow) from investing activities


 


 


681


 


(313)




 


 


 


 


 


 




Cash flow from financing activities


 


 


 


 


 




Increase/(Repayment) of borrowings


 


 


20,483


 


(9,820)




Equity dividend paid


 


 


(11,698)


 


(11,698)




 


 


 


 


 


 




Net cash inflow/(outflow) from financing activities


 


 


8,785


 


(21,518)




 


 


 


 


 


 




Net  increase in cash and cash equivalents


 


 


6,705


 


582




 


 


 


 


 


 




 
Opening cash and cash equivalents
 


 


 


 
(1,337)


 


 
(1,919)




Cash and cash equivalents at the end of the year


 


 


5,368


 


(1,337)




 
Notes to the Preliminary Announcement
 
1.   Financial Information
 
The financial information presented within this document does not comprise the statutory accounts for the financial years ended 31 March 2018 and 31 March 2017, but represents extracts from them.
 
The statutory accounts for the financial year ended 31 March 2017 have been filed with the Registrar of Companies.  The auditor reported on those accounts: their report was (i) unqualified, (ii) did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying the reports and (iii) did not contain statements under section 498(2) or (3) of the Companies Act 2006.
 
The statutory accounts for the year ended 31 March 2018 are expected to be finalised and signed following approval by the Board of Directors and delivered to the Registrar of Companies following the Company's Annual General Meeting on 8 August 2018.
 
2.   Basis of Preparation
 
The preliminary announcement has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") but does not contain sufficient information to comply fully with IFRS.  The Financial Statements to be presented to Members at the 2018 AGM are expected to comply fully with IFRS.
 
 ~ Ends ~
 
This announcement contains information which, prior to its disclosure, was inside information for the purposes of the Market Abuse Regulation.
 
  
For further information on the Company, visit: www.mountviewplc.co.uk 
SPARK Advisory Partners Limited (Financial Advisor)   www.sparkadvisorypartners.com 
Miriam Greenwood                                                      0203 368 3553
Mark Brady                                                                  0203 368 3551
 
 




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