REG - Sutton Harbour Grp - Interim Results
4 December 2020
Sutton Harbour Group plc (formerly Sutton Harbour Holdings plc)
("The Company", "Sutton Harbour")
Sutton Harbour Group plc, the AIM-listed marine and waterfront regeneration specialist, announces its interim results for the six-month period to 30 September 2020.
Financial Highlights
· Profit before taxation £0.058m (6 months to 30 September 2019: £0.281m)
· Net assets £46.140m (31 March 2020: £46.082)
· Net assets per share 39.8p (31 March 2020: £39.7p)
· Net debt £24.472m (31 March 2020: £23.591m)
· Gearing 53.0% (31 March 2020: 51.1%)
Company Highlights
· Finalising pre-construction preparations for consented schemes at Harbour Arch Quay
· Preliminary planning submission for a new 200+ unit residential led scheme to the east of Sutton Harbour
· Strong trading performance by the Marinas despite Covid crisis disruption
· A further £2.0million borrowing facility through to May 2021 to provide working capital during the Covid pandemic
"The first half year has been used productively to get development projects ready to start and to deliver new homes as the country emerges from the Covid crisis. The Group has remained operational throughout the crisis period with appropriate safety measures put in place to manage infection risk and in accordance with UK Government advice. Inevitably, the restrictions have had an impact on trading revenues but to date our business activities have shown resilience to recover as more normal operations can resume. The Group has intensified its efforts to promote the marinas and lifestyle attributes of Sutton Harbour to increase its profile as a 'staycation' destination and to position the location benefits of the new developments scheduled to go ahead in 2021."
Philip Beinhaker, Executive Chairman
For further information, please contact:
Sutton Harbour Group plc 01752 204186
Philip Beinhaker - Executive Chairman
Corey Beinhaker - Chief Operating Officer
Natasha Gadsdon - Finance Director
Arden Partners 020 7614 5900
Paul Shackleton
Benjamin Cryer
Executive Chairman's Statement
For the six-month period to 30 September 2020
Results and Financial position
Profit before taxation for the six month period to 30 September 2020 was £0.058m, down £0.223m from £0.281m for the comparative period to 30 September 2019.
As at 30 September 2020, net assets were £46.140m compared to £46.082m, as last reported as at 31 March 2020, and this represents a net asset value of 39.8p per share (31 March 2020: 39.7p per share). There has been no re-valuation of assets during the reporting period, with the next external independent valuation due to be undertaken at the financial year end.
Net debt has increased to £24.472m, up by £0.881m from £23.591m at 31 March 2020. This budgeted movement reflects the lower point in the annual cash cycle (as rents and annual berthing fee receipts peak between January and April) and expenditure on pre-construction costs in connection with new development schemes due to be submitted to the local planning authority in the coming weeks and with other previously consented schemes. This has resulted in a rise in gearing to 53.0% as at 30 September 2020 up from 51.1% as at 31 March 2020.
To ensure continuity of financing the Group had already entered into a new 4 year facility agreement in December 2019 and a further £2.0million borrowing facility through to May 2021 to provide working capital during the Covid pandemic. Funding for consented projects will be funded by separate development financing.
Trading Report
The Group's business activities have been affected by the Covid pandemic during the first half year but with impacts varying across the different trading segments. The marinas have performed well with overall results exceeding the comparative period last year arising from an increase in annual berths sales. The car parks were materially affected by the lock-down for the period of April, May and June, and this is the main reason for the fall in group revenue during the first half year; trade bounced back quickly to normal seasonal levels once lockdown restrictions ended. Fisheries' operations continued throughout the lockdown, albeit that fish prices were relatively low and landings were reduced as the export market weakened. The shortfall in fisheries revenues has been partly compensated by the improved lettings of on-site stores and commercial units. The Group has continued to work with tenants, assisting in some cases by agreeing to payment plans. Following the release from lock-down restrictions, the retail activity during the summer months returned to high level of utilisation by the visiting public enjoying the leisure activity. The Group owns a 7,500 sq ft unit currently occupied by Edinburgh Woollen Mill (in administration) and arrears have accumulated since 1 April 2020. We await the outcome of the administration but can report that a number of high quality enquires to rent this iconic waterfront unit have been received. Pre-season marina bookings have started at a high level of retention of existing berth-holders committing to stay for 2021/22. Occupancy of the investment property estate has upheld well throughout the first half year with further new lettings expected to complete before the financial year end.
Regeneration
Finalisation of pre-construction preparations for the planning consented scheme at Harbour Arch Quay, Sutton Harbour, have continued in recent months. Selection of the construction management team and finalisation of the detailed drawings are in process. It is expected that, subject to completion of finance, this 14 apartment building at will start on site during 2021, with marketing of the units to be launched in the springtime of the New Year. In addition, the Group has submitted the preliminary applications for additional 200+ residential units with retail and live/work space, a public east-west walkway and a new urban square, on a site immediately to the east of the approved Sugar Quay development at Sutton Harbour. Efforts are being made to secure planning consent in the first half of 2021. The Sugar Quay site proposal is being re-submitted to the Planning Authority after changes to the original application have been made to remove the basement parking and to relocate it to the adjacent new development on the site immediately to the east.
Summary
The first half year has been used productively to get development projects ready to start and to deliver new homes as the country emerges from the Covid crisis. The Group has remained operational throughout the crisis period with appropriate safety measures put in place to manage infection risk and in accordance with UK Government advice. Inevitably, the restrictions have had an impact on trading revenues but to date our business activities have shown resilience to recover as more normal operations can resume. The Group has intensified its efforts to promote the marinas and lifestyle attributes of Sutton Harbour to increase its profile as a 'staycation' destination and to position the location benefits of the new developments scheduled to go ahead in 2021.
Philip Beinhaker
EXECUTIVE CHAIRMAN
Consolidated Statement of Comprehensive Income
6 months to
30 September
2020
(unaudited)
£000
6 months to
30 September
2019
(unaudited)
£000
Year Ended
31 March
2020
(audited)
£000
Revenue
2,873
3,820
6,558
Cost of Sales
(1,874)
(2,379)
(4,229)
Gross Profit
999
1,441
2,329
Fair value adjustment on fixed assets and investment property
-
(26)
(977)
Administrative expenses
(547)
(672)
(1,264)
Operating profit from continuing operations
452
743
88
Financial income
-
-
Financial expense
(394)
(462)
(844)
Net financing costs
(394)
(462)
(844)
Profit before tax from continuing operations
58
281
(756)
Taxation credit on profit from continuing operations
-
-
(232)
Profit from continuing operations
58
281
(988)
Basic profit/earnings per share
-
0.02p
(0.85p)
Diluted profit/earnings per share
-
0.02p
(0.85p)
6 months to
30 September
2020
(unaudited)
£000
6 months to
30 September
2019
(unaudited)
£000
Year Ended
31 March
2020
(audited)
£000
Profit from continuing operations
58
281
(988)
Other comprehensive income/(expenses)
Continuing operations:
Revaluation of property, plant and equipment
-
-
1,338
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
-
-
-
Total other comprehensive income
-
-
1,338
Total comprehensive income for the period attributable to equity shareholders
58
281
350
Consolidated Balance Sheet
As at
30 September
2020
(unaudited)
£000
As at
30 September
2019
(unaudited)
£000
As at
31 March
2020
(audited)
£000
Non-current assets
Property, plant and equipment
27,694
26,855
27,958
Investment property
18,989
19,571
18,985
Inventories
12,878
12,610
12,810
59,561
59,036
59,753
Current assets
Inventories
12,748
11,552
12,217
Trade and other receivables
2,363
2,104
2,595
Cash and cash equivalents
177
244
792
Tax recoverable
-
-
5
15,288
13,900
15,609
Total assets
74,849
72,936
75,362
Current liabilities
Trade and other payables
1,098
1,053
1,396
Finance lease liabilities
62
65
63
Deferred income
936
936
1,544
Provisions
63
75
70
2,159
2,129
3,073
Non-current liabilities
Other interest-bearing loans and borrowings
24,250
23,000
24,250
Finance lease liabilities
337
40
10
Deferred government grants
646
646
646
Deferred tax liabilities
1,255
1,023
1,254
Provisions
62
85
29
26,550
24,794
26,207
Total liabilities
28,709
26,923
29,280
Net assets
46,140
46,013
46,082
Issued capital and reserves attributable to owners of the parent
Share capital
16,266
16,266
16,266
Share premium
10,695
10,695
10,695
Other reserves
13,034
11,696
13,034
Retained earnings
6,145
7,356
6,087
Total equity
46,140
46,013
46,082
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 2020
16,266
10,695
9,163
3,871
-
6,087
46,082
Comprehensive income/(expense)
Profit for the period
-
-
-
-
-
58
58
Total comprehensive income/(expense)
6 month period ended 30 September 2020
-
-
-
-
-
58
58
Balance at 30 September 2020
16,266
10,695
9,163
3,871
-
6,145
46,140
Balance at 1 April 2019
16,266
10,695
7,825
3,871
-
7,075
45,732
Comprehensive income/(expense)
Profit for the period
-
-
-
-
-
281
281
Other comprehensive income/(expense)
Revaluation of property, plant and equipment
-
-
-
-
-
-
-
Effective portion of changes in fair value of cash flow hedges
Total other comprehensive income/(expense) 6 month period ended 30 September 2019
-
-
-
-
-
281
281
Total comprehensive income/(expense)
6 month period ended 30 September 2019
-
-
-
-
-
-
-
Balance at 30 September 2019
16,266
10,695
7,825
3,871
-
7,356
46,013
Balance at 1 October 2019
16,266
10,695
7,825
3,871
-
7,356
46,013
Comprehensive income/(expense)
Profit for the period
-
-
-
-
-
(1,269)
(1,269)
Other comprehensive income/(expense)
Revaluation of property, plant and equipment
-
-
1,338
-
-
-
1,338
Effective portion of changes in fair value of cash flow hedges
-
-
-
-
-
-
-
Total other comprehensive income/(expense) 6 month period ended 31 March 2020
-
-
-
-
-
-
-
Total comprehensive income/(expense)
6 month period ended 31 March 2020
-
-
-
-
-
-
-
Transactions with owners of the parent
Issue of shares
-
-
-
-
-
-
-
Balance at 31 March 2020
16,266
10,695
9,163
3,871
-
6,087
46,082
Consolidated Cash Flow Statement
6 months to
30 September
2020
(unaudited)
£000
6 months to
30 September
2019
(unaudited)
£000
Year Ended
31 March
2020
(audited)
£000
Cash generated from total operating activities
(599)
(481)
(455)
Cash flows from investing activities
Net expenditure on investment property
(4)
-
(52)
Expenditure on property, plant and equipment
75
(609)
(823)
Proceeds from sale of plant and equipment
-
-
-
Net cash used in investing activities
71
(609)
(875)
Cash flows from financing activities
Proceeds from sale of shares
-
-
-
Expenses of share issuance
-
-
-
Interest paid
(396)
(462)
(844)
Loan drawdowns/(repayment of borrowings)
309
500
1,750
Net finance lease (payments)/receipts
-
-
(78)
Net cash generated from financing activities
(87)
38
826
Net increase/(decrease) in cash and cash equivalents
(615)
(1,052)
(504)
Cash and cash equivalents at beginning of period
792
1,296
1,296
Cash and cash equivalents at end of period
177
244
792
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 2020 were approved by the Board of Directors on 6 July 2020 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 2020, 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 2020, 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 2019 is as follows:
6 months to 30 September 2020
Marine
Real Estate
Car Parking
Regeneration
Total
£000
£000
£000
£000
£000
Revenue
1,969
676
228
-
2,873
Gross profit prior to non-recurring items
561
448
100
(110)
999
Segmental Operating Profit before Fair value adjustment and unallocated expenses
561
448
100
(110)
999
Fair value adjustment on fixed assets and investment property assets
-
-
-
-
-
Unallocated:
Administrative expenses
(547)
Operating profit from continuing operations
452
Financial income
Financial expense
(394)
Profit before tax from continuing operations
58
Taxation
-
Profit for the year from continuing operations
58
Depreciation charge
Marine
168
Car Parking
11
Administration
11
190
Segment Information (continued)
6 months to 30 September 2019
Marine
Real Estate
Car Parking
Regeneration
Total
£000
£000
£000
£000
£000
Revenue
2,662
762
396
-
3,820
Gross profit prior to non-recurring items
637
534
270
-
1,441
Segmental Operating Profit before Fair value adjustment and unallocated expenses
637
534
270
-
1,441
Fair value adjustment on fixed assets and investment property assets
-
-
-
-
-
Unallocated:
Administrative expenses
(698)
Operating profit from continuing operations
743
Financial income
Financial expense
(462)
Loss before tax from continuing operations
281
Taxation
-
Loss for the year from continuing operations
281
Depreciation charge
Marine
150
Car Parking
14
Administration
5
169
Segment Information (continued)
Year ended 31 March 2020
Marine
Real Estate
Car Parking
Regeneration
Total
£000
£000
£000
£000
£000
Revenue
4,323
1,580
655
-
6,558
Gross profit prior to non-recurring items
916
1,157
404
(148)
2,329
Segmental Operating Profit before Fair value adjustment and unallocated expenses
916
1,157
404
(148)
2,329
Fair value adjustment on fixed assets and investment property assets
(483)
(494)
-
-
(977)
1,352
Unallocated:
Administrative expenses
(1,264)
Operating profit from continuing operations
88
Financial income
-
Financial expense
(844)
Profit before tax from continuing operations
(756)
Taxation
(232)
Profit for the year from continuing operations
(988)
Depreciation charge
Marine
313
Car Parking
26
Administration
1
340
30 September 2020
30 September 2019
31 March 2020
£000
£000
£000
Segment assets:
Marine
23,304
23,731
23,858
Real estate
19,660
19,815
19,640
Car Parking
5,323
4,423
5,267
Regeneration
25,746
24,267
25,115
Total segment assets
74,033
72,236
73,880
Unallocated assets:
Property, plant and equipment
83
87
80
Trade & other receivables
556
368
610
Cash & cash equivalents
177
245
792
Total assets
74,849
72,936
75,362
Segment Information (continued)
30 September 2020
30 September 2019
31 March 2020
£000
£000
£000
Segment liabilities:
Marine
1,184
1,196
1,960
Real estate
560
417
550
Car Parking
90
72
108
Regeneration
823
951
903
Total segment liabilities
2,657
2,636
3,521
Unallocated liabilities:
Bank overdraft & borrowings
24,649
23,105
24,341
Trade & other payables
148
157
163
Financial Derivatives
-
-
-
Tax payable
-
1
-
Deferred tax liabilities
1,255
1,024
1,255
Total liabilities
28,709
26,923
29,280
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 19% (2019: 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 (2019: nil).
Earnings per share
6 months to
30 September
2020
(unaudited)
pence
6 months to
30 September
2019
(unaudited)
pence
Year Ended
31 March
2020
(audited)
pence
Continuing operations
Basic earnings per share
-
0.02p
(0.85p)
Diluted earnings per share*
-
0.02p
(0.85p)
Basic Earnings per Share:
Basic earnings per share have been calculated using the profit for the period of £58,000 (2019: profit £281,000, year ended 31 March 2020 loss £988,000). The average number of ordinary shares in issue, excluding those options granted under the SAYE scheme, of 115,944,071 (2019: 115,944,071; year ended 31 March 2020: 115,944,071) has been used in our calculation.
Diluted Earnings per Share:
Diluted earnings per share uses an average number of 115,944,071 (2019: 115,944,071; year ended 31 March 2020 115,944,071) ordinary shares in issue, and takes account of the outstanding options under the SAYE scheme in accordance with IAS 33 'Earnings per share'. There are no outstanding options under expire SAYE schemes.
Property valuation
Freehold land and buildings and investment property have been independently valued by Jones Lang LaSalle as at 31 January 2020, 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 2021, as in previous years.
Cash and cash equivalents
As at
30 September 2020
(unaudited)
£000
As at
30 September 2019
(unaudited)
£000
As at
31 March 2020
(audited)
£000
Cash and cash equivalents per balance sheet and cash flow statement
177
244
792
Provisions
Onerous leases
Total
£000
£000
Balance at 1 April 2019
243
243
Provisions utilised
(83)
(83)
Balance at 30 September 2019
160
160
Provisions made
-
-
Provisions utilised
(61)
(101)
Balance at 31 March 2020
99
59
Provisions made
26
66
Provisions utilised
-
-
Balance at 30 September 2020
125
125
Current
63
63
Non-current
62
62
125
125
Cash flow statements
6 months to
30 September 2020
(unaudited)
£000
6 months to
30 September 2019
(unaudited)
£000
Year Ended
31 March 2020
(audited)
£000
Cash flows from operating activities
Profit/(loss) for the period
58
281
(756)
Adjustments for:
Taxation
-
-
-
Financial income
-
-
-
Financial expense
396
442
844
Fair value adjustment on fixed assets and investment property
-
-
977
Depreciation
190
169
340
Amortisation of grants
-
-
-
Profit/loss on sale of property, plant and equipment
-
7
2
Cash generated from operations before changes in working capital and provisions
644
899
1,407
Increase in inventories
(599)
(635)
(1,460)
Decrease/(increase) in trade and other receivables
234
251
(312)
(Decrease)/increase in trade and other payables
(236)
(366)
(100)
Decrease in deferred income
(607)
(556)
145
(Decrease)/increase in provisions
(35)
(74)
(135)
Cash generated from operations
(599)
(481)
(455)
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