REG - Sutton Harbour Grp - Interim Results
17/12/2024 07:00
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RNS Number : 2953Q Sutton Harbour Group PLC 17 December 2024
17 December 2024
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 2024.
Financial Highlights
· Gross profit £1.328m (6 months to 30 September 2023: gross
profit £1.620m)
· Loss before taxation £0.825m (6 months to 30 September 2023:
loss before tax £0.119m)
· Gross assets £87.659m (31 March 2024: £87.340m)
· Net assets £53.266m (31 March 2024: £54.091m)
· Net asset value per share 37.3p (31 March 2024: 37.8p)
· Net debt £27.241m (31 March 2024: £24.805m)
· Gearing 51.1% (31 March 2024: 45.9%)
Company Highlights
· Marina and tenanted property occupancy rates upheld
· Record trading performance by car parking assets
· Fisheries performance undermined by sudden closure of fisheries
based auctioneer and services company
· Three investment properties sold yielding 94% of latest
valuation, before selling costs
· £1.455m loan repayment to Company's bankers in October and
November 2024
Philip Beinhaker, Executive Chairman, commented:
"The Company remains committed to its strategy to continue to invest into the
Sutton Harbour area, redeveloping selected assets and regenerating development
sites to uphold the quality and value of its core harbour asset portfolio. In
the short term, the Company's objective is to reduce debt to a manageable
level which it is making all efforts to achieve in this financial year."
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
Related Party Transaction
On 16 December 2024 the Company extended the existing related party loan
finance, originally announced on 27 April 2022 and updated most recently on 10
September 2024, by £175,000 to provide additional headroom in the Company's
cash facilities, bringing the total shareholder loan facilities to £5.55m.
The unsecured loan facilities are with Beinhaker Design Services Ltd ("BDSL")
(the "Loan"). The Loans carry a fixed 8% gross annual interest rate with the
option, at the discretion of the Company, to capitalise some or all of the
interest at a fixed 10% annual interest rate. The repayment of the Loan,
previously by 31 May 2025, has been amended such that the Loan is now
repayable in equal quarters on each of 31 May 2025, 31 August 2025, 31 May
2026 and 28 February 2026.
The Loan extension and repayment variation constitutes a related party
transaction for the purposes of the AIM Rules, as BDSL represents 56% of the
holdings of FB Investors LLP, which has a 75.38% holding in the Company, and
is controlled by the Beinhaker family. The directors, other than Philip
Beinhaker and Corey Beinhaker, having consulted with the Company's nominated
adviser, Strand Hanson, consider that the terms of Loan extension and
repayment variation are fair and reasonable insofar as shareholders are
concerned.
Interim Results
Executive Chairman's Statement
For the six-month period to 30 September 2024
Results and Financial position
The results for the first six months of the financial year ("H1 2024" or the
"Period") incorporate ongoing challenges faced by the Company that we reported
in the 2024 Annual Report. The underlying trading activities of the business,
with the exception of Plymouth Fisheries, remain strong: occupancy at the
marinas has held up at 94% (30 September 2023: 96%), occupancy of the property
investment portfolio remained stable at 89% throughout the period and the
performance at the car parks continued to improve with revenue up by 10% on
the same period last year.
Despite the stability in the core marina, property rental and car parking
activities, gross profit declined to £1.237m from £1.620m for the comparable
period to 30 September 2023 ("H1 2023"), undermined by the material decline in
fish landings, since the disruptive and short-notice closure of the company
that provided auction operations and landside services to fishers in May 2024.
Additionally, empty building business property rates following the vacating of
the North Quay House building in preparation for redevelopment, have reduced
contributions from real estate activities. Consistent with reporting of year
end results to 31 March 2024, legal costs in connection with the lock
arbitration and for advice with regard the lease of the former airport site
have been recorded as exceptional costs for the Period. Interest costs of
£1.070m for the Period continue to put pressure on the bottom line result (H1
2023: £0.922m). The loss before taxation for the six-month period to 30
September 2024 was £0.825m compared to £0.119m for the comparative period to
H1 2023.
As at 30 September 2024, net assets were £53.266m (equal to 37.3 pence per
share), down from £54.091m (equal to 37.8 pence per share) as at 31 March
2024. The decrease in net assets reflects the loss sustained during the
Period.
Net debt has increased to £27.241m, being £2.436m more than the net debt
position as at 31 March 2024 of £24.805m. Bank debt remained constant at
£21.7m throughout the period under review, although loan repayments of
£1.445m have been made since 1 October 2024, reducing current bank debt to
£20.255m. During the Period, related party loans have increased by £2.237m
(from £3.875m at 31 March 2024 to £6.112m to 30 September 2024),
representing an additional £1.970m to fund ongoing working capital needs and
the accrued interest on these loans. Additionally, £175,000 new related party
loan capital has been advanced by Beinhaker Design Services Limited since the
Period end. Interest payments during the first half year reflect bank base
rate at 5.25% for most of the period and are slightly higher than for the same
period last year. Gearing, measured as net debt as a percentage of net assets,
has increased to 51.1% as at 30 September 2024 from 45.9% as at 31 March 2024.
Debt Reduction Plan
As previously reported, the Company has agreed with its bankers to reduce debt
to £11.565m during 2025 with loan repayments to be made from the proceeds of
asset sales. During October and November 2024, three properties were sold
achieving 94% of the independent valuation at 31 March 2024, before selling
costs. Loan repayments of £1.445m have followed these sales reducing bank
debt to £20.255m after the period end. Asset derived incomes will decline as
assets are sold which will be offset by savings in interest.
The Company is currently marketing a number of other assets, including King
Point Marina, and has received good interest in all of these assets which it
targets to sell before the financial year end.
Trading and Operations Report
Overall marina revenue was up 2% at 30 September 2024 compared to the same
period last with year with Sutton Harbour Marina income net of discounts
offered to compensate for further anticipated disruption as a result of the
lock works. The season was minimally affected by the necessary lock works to
ensure flood protection undertaken by the Environment Agency, which were
completed earlier than initially expected, but after the time when most
berth-holders had committed to annual licences. Marketing for 2025/26 is
underway with an encouraging level of bookings and full payment already
received for half of the capacity of the marinas. Improvements to Sutton
Harbour Marina, to be ready for the start of the 2025/26 season, include a new
marina reception, lounge and office in a vacant Company owned unit opposite
the marina, a new amenities unit with 6 self-contained wetrooms and further
rollout of smart-app controlled on-pontoon electricity supply.
The loss of fish landings revenue at Plymouth Fisheries has significantly
impacted the profitability of the fishmarket as the absence of an onsite
auctioneer has prompted fishers to land catches at other ports or arrange for
road transport to other auctions. Notwithstanding the reduction in landings,
fuel sales and profits earned thereon have remained on par with the
comparative period. The Company is considering the assessments of a jointly
commissioned study with Plymouth City Council and fisher stakeholders, to
assist with planning for future operations at Plymouth Fisheries. The Company
has continued to make available the fishmarket facilities available to
fishers, including normal manning, ice sales and provision of chiller space.
The Company's car parks traded successfully throughout the period and the
strong results demonstrate popularity of visitation to the harbour, especially
during the busier summer months.
Exceptional items
Consistent with reporting of the year end results to 31 March 2024, costs
incurred in relation to the Arbitration Hearing and legal costs for advice
about the claim made by Plymouth City Council in respect of the long leasehold
of the former airport site, amounting to £230,000 in the first six month
period, have been recorded as exceptional costs. This accounting treatment is
consistent with the year end results at 31 March 2024.
At the present time it is not known what the future implications of these
processes for the Company might be.
There is no update to my report of 19 September 2024 which accompanied the
Annual Report and Accounts for the year ended 31 March 2024 in respect of the
claim made in connection with the long leasehold of the former airport site.
Development / Regeneration
The ground floor office unit in the Harbour Arch Quay development was
completed early in the financial year permitting relocation of the Company's
head office in July 2024.
The Company has slowed pre-construction and planning work on future
development projects whilst it focuses on the debt reduction plan. The Company
has submitted a 'pre-application' and is close to being ready to submit the
full planning application for redevelopment of North Quay House into
apartments and some office/retail space.
Following the submission of a pre-application setting out a proposed
masterplan for the redevelopment of the former airport site, the Company is
actively engaged in meetings with the Local Planning Authority to consider
different aspects of the proposals. As previously reported, the masterplan
proposed a phased redevelopment which would allow preservation of the runway
for a further 5 years for a possible general aviation facility.
Summary
"The Company remains committed to its strategy to continue to invest into the
Sutton Harbour area, redeveloping selected assets and regenerating development
sites to uphold the quality and value of its core harbour asset portfolio. In
the short term, the Company's objective is to reduce debt to a manageable
level which it is making all efforts to achieve in this financial year."
Philip Beinhaker
EXECUTIVE CHAIRMAN
Consolidated Statement of Comprehensive Income
6 months to 6 months to Year Ended
30 September 30 September 31 March
2024 2023 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
Revenue 4,345 4,446 16,353
Cost of Sales (3,017) (2,826) (16,349)
Gross Profit 1,328 1,620 4
Fair value adjustment on fixed assets and investment property - - (200)
Administrative expenses (853) (817) (1,342)
Exceptional costs (230) - (855)
Operating profit/(loss) from continuing operations 245 803 (2,393)
Financial income 2 6 8
Financial expense (1,072) (928) (2,000)
Net financing costs (1,070) (922) (1,992)
(Loss)/Profit before tax from continuing operations (825) (119) (4,385)
Taxation credit on profit from continuing operations - - 549
(Loss)/Profit from continuing operations (825) (119) (3,836)
Basic loss/earnings per share (0.58p) (0.08p) (2.71p)
Diluted loss/earnings per share (0.58p) (0.08p) (2.71p)
6 months to 6 months to Year Ended
30 September 30 September 31 March
2024 2023 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
Profit from continuing operations (825) (119) (3,836)
Other comprehensive income/(expenses)
Continuing operations:
Revaluation of property, plant and equipment - - (1,404)
Deferred taxation on income and expenses recognised directly - - 362
in the consolidated statement of comprehensive income
Total other comprehensive income - - (1,042)
Total comprehensive income for the period attributable to equity shareholders
(825) (119) (4,878)
Consolidated Balance Sheet
As at As at As at
30 September 30 September 31 March
2024 2023 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
Non-current assets
Property, plant and equipment 36,778 38,432 36,890
Investment property 17,620 17,333 17,542
Inventories 13,653 13,420 13,518
68,051 69,185 67,950
Current assets
Inventories 17,530 27,005 17,295
Trade and other receivables 1,503 2,139 1,310
Cash and cash equivalents 572 530 782
Tax recoverable 3 - 3
19,608 29,674 19,390
Total assets 87,659 98,859 87,340
Current liabilities
Bank Loans 10,135 1,600 21,700
Other Loans 6,112 7,676 3,875
Trade and other payables 2,080 3,583 2,194
Finance lease liabilities 1 22 12
Deferred income 1,215 1,232 2,183
19,543 14,113 29,964
Non-current liabilities
Other interest-bearing loans and borrowings 11,565 21,700 -
Deferred government grants 646 646 646
Deferred tax liabilities 2,639 3,550 2,639
14,850 25,896 3,285
Total liabilities 34,393 40,009 33,249
Net assets 53,266 58,850 54,091
Issued capital and reserves attributable to owners of the parent
Share capital 16,536 16,536 16,536
Share premium 16,744 16,744 16,744
Other reserves 23,030 24,072 23,030
Retained earnings (3,044) 1,498 (2,219)
Total equity 53,266 58,850 54,091
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 2024 16,536 16,744 19,159 3,871 - (2,219) 54,091
Comprehensive income/(expense)
Issue of Shares - - - - - - -
Loss for the period (825) (825)
Total comprehensive income/(expense) - - - - - (825) (825)
6 month period ended 30 September 2024
Balance at 30 September 2024 16,536 16,744 19,159 3,871 - (3,044) 53,266
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
Profit 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 October 2023 16,536 16,744 20,201 3,871 - 1,498 58,850
Comprehensive income/(expense)
Profit for the period - - - - - (3,717) (3,717)
Other comprehensive income/(expense)
Revaluation of property, plant and equipment - - (1,404) - - - (1,404)
Deferred tax on revaluation - - 362 - - - 362
Total comprehensive income/(expense) - - (1,042) - - (3,717) (4,759)
6 month period ended 31 March 2024
Balance at 31 March 2024 16,536 16,744 19,159 3,871 - (2,219) 54,091
Consolidated Cash Flow Statement
6 months to 6 months to Year Ended
30 September 30 September 31 March
2024 2023 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
Cash generated from total operating activities (1,205) (2,989) 4,550
Cash flows from investing activities
Net expenditure on investment property (77) (128) (131)
Expenditure on property, plant and equipment (84) (73) (136)
Proceeds from disposal - - 6
Net cash used in investing activities (161) (201) (261)
Cash flows from financing activities
Proceeds from sale of shares - 2,924 2,901
Expenses of share issuance - (22) -
Interest paid (804) (922) (2,415)
Related party loan 1,970 - 450
Loan drawdowns/(repayment of borrowings) - 699 (3,100)
Development loan drawdowns/(repayment of borrowings)
- - (2,372)
Net finance lease (payments)/receipts (10) (54) (66)
Net cash generated from financing activities 1,156 2,625 (4,602)
Net increase/(decrease) in cash and cash equivalents (210) (565) (313)
Cash and cash equivalents at beginning of period 782 1,095 1,095
Cash and cash equivalents at end of period 572 530 782
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 2024 were approved by the Board
of Directors on 19 September 2024 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, 2a Ground Floor, 2a North East Quay, Sutton Harbour,
Plymouth, England, PL4 0BN 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 2024, 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 2024, 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 2024
is as follows:
6 months to 30 September 2024 Marine Real Estate Car Parking Regeneration Total
£000 £000 £000 £000 £000
Revenue 3,075 703 567 - 4,345
Gross profit prior to non-recurring items 681 393 334 (80) 1,328
1,328
Unallocated: (853)
Administrative expenses
Exceptional costs (230)
Operating profit from continuing operations 245
Financial income 2
Financial expense (1,072)
Loss before tax from continuing operations (825)
Taxation -
Loss for the year from continuing operations (825)
Depreciation charge
Marine 188
Car Parking 7
Administration -
195
Segment Information (continued)
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)
Profit before tax from continuing operations (119)
Taxation -
Profit for the year from continuing operations (119)
Depreciation charge
Marine 161
Car Parking 7
Administration 13
181
Segment Information (continued)
Year ended 31 March 2024 Marine Real Estate Car Parking Regeneration Total
£000 £000 £000 £000 £000
Revenue 5,692 1,450 930 8,281 16,353
Segmental Gross Profit before Fair value adjustment and unallocated expenses 1,151 975 507 (2,629) 4
Fair value adjustment on investment properties and fixed assets - (200) - - (200)
1,151 775 507 (2,629) (196)
Segmental Profit
Unallocated:
Administrative expenses (1,342)
Exceptional costs (855)
Operating loss (2,393)
Financial income 8
Financial expense (2,000)
Loss before tax from continuing activities (4,385)
Taxation 549
Loss for the year from continuing operations (3,836)
Depreciation charge
Marine 383
Car Parking 13
Administration 1
397
30 September 2024 30 September 2023 31 March 2024
£000 £000 £000
Segment assets:
Marine 28,656 32,663 29,050
Real estate 18,724 17,864 17,865
Car Parking 8,232 6,829 8,179
Regeneration 31,201 40,646 31,259
Total segment assets 86,813 98,002 86,353
Unallocated assets:
Property, plant and equipment 30 53 32
Trade & other receivables 244 274 172
Cash & cash equivalents 572 530 783
Total assets 87,659 98,859 87,340
Segment Information (continued)
30 September 2024 30 September 2023 31 March 2024
£000 £000 £000
Segment liabilities:
Marine 1,724 1,696 2,520
Real estate 529 425 374
Car Parking 92 110 51
Regeneration 976 2,847 1,474
Total segment liabilities 3,321 5,078 4,419
Unallocated liabilities:
Bank overdraft & borrowings 27,888 30,998 25,587
Trade & other payables 544 382 603
Tax payable 1 1 1
Deferred tax liabilities 2,639 3,550 2,639
Total liabilities 34,393 40,009 33,249
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% (2023: 25%) 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 (2023: nil).
Earnings per share
6 months to 6 months to Year Ended
30 September 30 September 31 March
2024 2023 2024
(unaudited) (unaudited) (audited)
pence pence pence
Continuing operations
Basic (loss)/earnings per share (0.58p) (0.08p) (2.71p)
Diluted (loss)/earnings per share* (0.58p) (0.08p) (2.71p)
Basic Earnings per Share:
Basic earnings per share have been calculated using the loss for the period of
£825,000 (6 months ended 30 September 2023: loss £119,000; year ended 31
March 2024: loss 3,836,000). The average number of ordinary shares in issue,
excluding those options granted under the HMRC approved CSOP scheme, of
142,938,478 (2023: 140,506,216; year ended 31 March 2024: 141,731,347) has
been used in our calculation.
Diluted Earnings per Share:
Diluted earnings per share uses a weighted average number of 143,196,450 (30
September 2024: 140,774,968 ; 31 March 2024: 141,731,347) ordinary shares
after adjusting for the effects of share options in issue: 257,972 ordinary
shares (2024: 257,972; year ended 31 March 2024). 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 2024, 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 2025, as
in previous years.
Cash and cash equivalents
As at As at As at
30 September 2024 30 September 2023 31 March 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
Cash and cash equivalents per balance sheet and cash flow statement 572 530 782
Cash flow statements
6 months to 6 months to Year Ended
30 September 2024 30 September 2023 31 March 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
Cash flows from operating activities
Profit/(loss) for the period (825) (119) (3,836)
Adjustments for:
Taxation - - (549)
Financial income (2) (6) -
Financial expense 1,072 928 1,992
Fair value adjustment on fixed assets and investment property - - 556
- - (357)
Depreciation 195 181 397
Cash generated from operations before changes in working capital and
provisions
440 984 (1,797)
Increase in inventories (370) (3,313) 6,213
(Increase)/decrease in trade and other receivables (193) (42) 864
Increase in trade and other payables (114) 282 (786)
(Decrease) in deferred income (968) (900) 56
Cash generated from operations (1,205) (2,989) 4,550
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