Sutton Harbour Grp - Half-year Report

Sutton Harbour

04/12/2019 07:00

RNS Number : 5635V

Sutton Harbour Group PLC

04 December 2019

 

 

                                                                           04 December 2019

 

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 2019.

 

 

Financial Highlights

 

·      Profit before taxation £0.281m  6 months to 30 September 2018: £0.110m)

·      Net assets £46.013m (31 March 2019: £45.732)

·      Net debt £22.861m (31 March 2019: £21.373m)

·      Gearing 49.7% (31 March 2019: 46.7%)

 

Company Highlights

 

·      Finalising pre-construction preparations for consented schemes at Harbour Arch Quay and Sugar Quay

·      Installation of new Plymouth Fisheries fuel and power servery underway and due to be complete by end of 2019

·      Work underway to increase marinas berthing space and accommodation for a greater number of larger leisure vessels

·      Appointment of Corey Beinhaker as Executive Director and Chief Operating Officer

·      New 4 year long facility agreement with existing company bankers, NatWest, put in place

 

 

"With longer term banking facilities in place the Company is advancing confidently with its objective to self-deliver real estate projects and to continue targeted investment into the asset base to achieve medium term returns and value growth to shareholders."

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 2019

 

Results and Financial position

Profit before taxation for the six-month period to 30 September 2019 was £0.281m, up £0.171m from £0.110m for the comparative period to 30 September 2018.

As at 30 September 2019, net assets were £46.013m compared to £45.732m, as last reported as at 31 March 2019. There has been no re-valuation of assets during the reporting period, with the next external independent valuation due to be undertaken early in 2020.

Net debt has increased to £22.861m, up by £1.488m from £21.373m as at 31 March 2019. 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 consented schemes at Harbour Arch Quay and Sugar Quay, infrastructure improvements notably including the new fuel and utility dispensary system at Plymouth Fisheries and works to other premises to facilitate new tenancies and to maintain the quality of the estate. This has resulted in a rise in gearing to 49.7% as at 30 September 2019 from 46.7% as at 31 March 2019.

To ensure continuity of financing the Company has just entered into a new 4 year facility agreement with its incumbent bank on equivalent terms to the previous agreement. Funding for consented projects will be funded by separate development financing.

Board Composition Update

In October 2019 the Company announced Corey Beinhaker's appointment as Chief Operating Officer. This brings the board to a total of five Directors including Executive Chairman, Philip Beinhaker.

Trading Report

The Company's business activities traded successfully during the first half year, with the marinas and car parks both achieving strong revenue growth ahead of price inflation.  Marketing of the marinas for the 2020 season was launched at Southampton Boat Show from our newly designed interactive stand which attracted an encouraging level of interest. Fisheries' trading remained on par with the same period last year and rental incomes from recent lettings added to income of this business sector. Further new lettings are expected to complete in the second half year.

Regeneration

Finalisation of pre-construction preparations for the planning consented residential led developments at Harbour Arch Quay and Sugar Quay, both at Sutton Harbour, has been the priority in recent months. These works have required submission of some amendments to the Local Planning Authority, selection of the construction and sub-contractor teams and finalisation of detailed drawings. It is expected that subject to completion of finance and planning amendments that both the smaller 14 apartment scheme at Harbour Arch Quay and larger 170 apartment building at Sugar Quay will start on site during 2020, along with the marketing of the units.

The planning consented two storey extension to Harbour Car Park has been put back to follow the Mayflower 400 celebrations which take place throughout 2020, to avoid parking disruption during the events season at the largest car park around Sutton Harbour.

Infrastructure improvements

The Company is currently in the process of commissioning a new fuel and utility dispensary system at Plymouth Fisheries. The part grant funded £800,000 project, updates the current 25 year old system with modern fuel and energy delivery technology. It is the latest phase of a 5 year plan to overhaul key fisheries infrastructure which has also included £2m investment in ice making equipment, chilled stores, energy efficient lighting and boilers, hygienic wall cladding, enhanced CCTV and lock barrel walkways.

During the winter months part of the marina at Sutton Harbour will be re-configured to meet requirements of prospective berth-holders for larger berths and new pontoon equipment will be installed to meet the increasing demand for berthing space at King Point Marina. To improve facilities for public participation and entertainment in the harbour, the Company will be investing in new floating 'event-size' pontoons which can be located in various shallow water areas of Sutton Harbour together with an access pontoon.

Summary

Our financial year to date has been a productive period in which we have been preparing for major development projects which are now close to the delivery phase. Profitability of the trading businesses is improving following investment in marketing, facilities' presentation and increased use of time saving technologies in each area. The Company is working in partnership with the City Council and other groups to support hosting of events to commemorate the 400th anniversary of the departure of the Pilgrim Fathers to America. Visitors numbers are expected to peak in Summer 2020 centred around the Mayflower Steps located on southern the side of Sutton Harbour

With longer term banking facilities in place the Company is advancing confidently with its objective to self-deliver real estate projects and to continue targeted investment into the asset base to achieve medium term returns and value growth to shareholders.

 

Philip Beinhaker

EXECUTIVE CHAIRMAN

 

 

Consolidated Statement of Comprehensive Income

 

6 months to
30 September
2019
(unaudited)
£000
6 months to
30 September
2018
(unaudited)
£000
Year Ended
31 March
2019
(audited)
£000
Revenue
3,820
3,717
6,893
Cost of Sales
(2,379)
(2,390)
(4,686)
Gross Profit
1,441
1,327
2,207
Fair value adjustment on fixed assets and investment property
(26)
(8)
1,444
Administrative expenses
(672)
(711)
(1,234)
Operating profit from continuing operations
743
608
2,417
Financial income
-
-
1
Financial expense
(462)
(498)
(902)
Net financing costs
(462)
(498)
(901)
Profit before tax from continuing operations
281
110
1,516
Taxation credit on profit from continuing operations
-
-
315
Profit from continuing operations
281
110
1,831
Basic profit/earnings per share
0.02p
0.01p
1.68p
Diluted profit/earnings per share
0.02p
0.01p
1.68p

 

                        

6 months to
30 September
2019
(unaudited)
£000
6 months to
30 September
2018
(unaudited)
£000
Year Ended
31 March
2019
(audited)
£000
Profit from continuing operations
281
110
1,831
Other comprehensive income/(expenses)
Continuing operations:
Revaluation of property, plant and equipment
-
-
1,640
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
-
-
6
Total other comprehensive income
-
-
1,646
Total comprehensive income for the period attributable to equity shareholders
281
110
3,477

 

Consolidated Balance Sheet

 

As at
30 September
2019
(unaudited)
£000
As at
30 September
2018
(unaudited)
£000
As at
31 March
2019
(audited)
£000
Non-current assets
Property, plant and equipment
26,855
23,899
26,632
Investment property
19,571
19,055
19,425
Inventories
12,610
-
12,448
59,036
42,954
58,505
Current assets
Inventories
11,552
22,250
11,119
Trade and other receivables
2,104
2,122
2,283
Cash and cash equivalents
244
1,859
1,296
Tax recoverable
-
-
(5)
13,900
26,231
14,693
Total assets
72,936
69,185
73,198
Current liabilities
Trade and other payables
1,053
1,308
1,496
Finance lease liabilities
65
96
122
Deferred income
936
883
1,398
Provisions
75
69
70
2,129
2,356
3,086
Non-current liabilities
Other interest-bearing loans and borrowings
23,000
25,000
22,500
Finance lease liabilities
40
232
47
Deferred government grants
646
646
646
Deferred tax liabilities
1,023
1,338
1,023
Provisions
85
168
164
24,794
27,384
24,380
Total liabilities
26,923
29,740
27,466
Net assets
46,013
39,445
45,732
Issued capital and reserves attributable to owners of the parent
Share capital
16,266
16,162
16,266
Share premium
10,695
7,872
10,695
Other reserves
11,696
10,055
11,696
Retained earnings
7,356
5,356
7,075
Total equity
46,013
39,445
45,732

 

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 2019
16,266
10,695
7,825
3,871
-
7,075
45,732
Comprehensive income/(expense)
Profit for the period
-
-
-
-
-
281
281
Total comprehensive income/(expense)
6 month period ended 30 September 2019
-
-
-
-
-
281
281
Balance at 30 September 2019
16,266
10,695
7,825
3,871
-
7,356
46,013
Balance at 1 April 2018
16,162
7,782
6,183
3,871
(6)
5,246
39,328
Comprehensive income/(expense)
Profit for the period
-
-
-
-
-
110
110
Other comprehensive income/(expense)
Revaluation of property, plant and equipment
-
-
-
-
7
-
7
Effective portion of changes in fair value of cash flow hedges
Total other comprehensive income/(expense) 6 month period ended 30 September 2018
-
-
-
-
7
-
7
Total comprehensive income/(expense)
6 month period ended 30 September 2018
-
-
-
-
7
110
7
Balance at 30 September 2018
16,162
7,782
6,183
3,871
1
5,356
39,445
Balance at 1 October 2018
16,162
7,872
6,183
3,871
1
5,356
39,445
Comprehensive income/(expense)
Profit for the period
-
-
-
-
-
1,719
1,719
Other comprehensive income/(expense)
Revaluation of property, plant and equipment
-
-
1,642
-
-
-
1,642
Effective portion of changes in fair value of cash flow hedges
-
-
-
-
(1)
-
(1)
Total other comprehensive income/(expense) 6 month period ended 31 March 2019
-
-
1,642
-
(1)
-
1,641
Total comprehensive income/(expense)
6 month period ended 31 March 2019
-
-
1,642
-
(1)
1,719
3,360
Transactions with owners of the parent
Issue of shares
104
2,823
-
-
-
-
2,927
Balance at 31 March 2019
16,266
10,695
7,825
3,871
-
7,075
45,732


 

 

Consolidated Cash Flow Statement

 

6 months to
30 September
2019
(unaudited)
£000
6 months to
30 September
2018
(unaudited)
£000
Year Ended
31 March
2019
(audited)
£000
Cash generated from total operating activities
(481)
(916)
(1,181)
Cash flows from investing activities
Net expenditure on investment property
-
-
(60)
Expenditure on property, plant and equipment
(609)
(100)
(243)
Proceeds from sale of plant and equipment
-
-
-
Net cash used in investing activities
(609)
(100)
(303)
Cash flows from financing activities
Proceeds from sale of shares
-
-
3,000
Expenses of share issuance
-
-
(73)
Interest paid
(462)
(498)
(958)
Loan drawdowns/(repayment of borrowings)
500
650
(1,850)
Net finance lease (payments)/receipts
-
(43)
(106)
Net cash generated from financing activities
38
109
13
Net increase/(decrease) in cash and cash equivalents
(1,052)
(907)
(1,471)
Cash and cash equivalents at beginning of period
1,296
2,766
2,767
Cash and cash equivalents at end of period
244
1,859
1,296

 

 

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 2019 were approved by the Board of Directors on 10 July 2019 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 2019, 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 2019, as described in those annual financial statements.

Adoption of new International Financial Reporting Standards

The following new standards, amendments to standards or interpretations have been issued, but are not effective for the financial year beginning 1 April 2018 and have not been adopted early:

 

IFRS 15 Revenue from Contracts with Customers: *1 January 2018

IFRS 9 Financial Instruments: * 1 January 2018

 

* mandatory effective date is periods commencing on or after

 

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 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
269
-
1,440
Segmental Operating Profit before Fair value adjustment and unallocated expenses
637
534
269
-
1,440
Fair value adjustment on fixed assets and investment property assets
-
-
-
-
-
Unallocated:
Administrative expenses
(697)
Operating profit from continuing operations
743
Financial income
Financial expense
(462)
Profit before tax from continuing operations
281
Taxation
-
Profit for the year from continuing operations
281
Depreciation charge
Marine
150
Car Parking
14
Administration
5
169

 

 

 

Segment Information (continued)

 

 

6 months to 30 September 2018
Marine
Real Estate
Car Parking
Regeneration
Total
£000
£000
£000
£000
£000
Revenue
2,665
747
305
-
3,717
Gross profit prior to non-recurring items
629
486
213
(57)
1,271
Segmental Operating Profit before Fair value adjustment and unallocated expenses
629
486
213
(57)
1,271
Fair value adjustment on fixed assets and investment property assets
-
-
-
-
-
Unallocated:
Administrative expenses
(662)
Operating profit from continuing operations
609
Financial income
Financial expense
(499)
Loss before tax from continuing operations
110
Taxation
-
Loss for the year from continuing operations
110
Depreciation charge
Marine
152
Car Parking
16
Administration
7
175

 

 

 

 

Segment Information (continued)

 

Year ended 31 March 2019
Marine
Real Estate
Car Parking
Regeneration
Total
£000
£000
£000
£000
£000
Revenue
4,896
1,474
523
-
6,893
Gross profit prior to non-recurring items
1,057
941
350
(141)
2,207
Segmental Operating Profit before Fair value adjustment and unallocated expenses
1,057
941
350
(141)
2,207
Fair value adjustment on fixed assets and investment property assets
1,134
310
-
-
1,444)
3,651
Unallocated:
Administrative expenses
(1,234)
Operating profit from continuing operations
2,417
Financial income
1
Financial expense
(902)
Profit before tax from continuing operations
1,516
Taxation
315
Profit for the year from continuing operations
1,831
Depreciation charge
Marine
314
Car Parking
33
Administration
11
358

 

 

30 September 2019
30 September 2018
31 March 2019
£000
£000
£000
Segment assets:
Marine
23,731
20,580
23,514
Real estate
19,815
19,704
19,952
Car Parking
4,423
4,196
4,456
Regeneration
24,267
22,335
23,577
Total segment assets
72,236
66,815
71,499
Unallocated assets:
Property, plant and equipment
87
72
61
Trade & other receivables
368
439
361
Cash & cash equivalents
245
1,859
1,277
Total assets
72,936
69,185
73,198

 

 

 

Segment Information (continued)

 

30 September 2019
30 September 2018
31 March 2019
£000
£000
£000
Segment liabilities:
Marine
1,196
1,134
1,897
Real estate
417
607
575
Car Parking
72
79
130
Regeneration
951
996
1,085
Total segment liabilities
2,636
2,816
3,687
Unallocated liabilities:
Bank overdraft & borrowings
23,105
25,232
22,652
Trade & other payables
157
354
102
Financial Derivatives
-
(2)
-
Tax payable
1
-
1
Deferred tax liabilities
1,024
1,340
1,024
Total liabilities
26,923
29,740
27,466

 

 

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% (2018: 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 (2018: nil).

 

 Earnings per share

 

6 months to
30 September
2019
(unaudited)
pence
6 months to
30 September
2018
(unaudited)
pence
Year Ended
31 March
2019
(audited)
pence
Continuing operations
Basic earnings per share
0.02p
0.01p
1.68p
Diluted earnings per share*
0.02p
0.01p
1.68p


 

Basic Earnings per Share:

Basic earnings per share have been calculated using the profit for the period of £281,000 (2018: profit £110,000, year ended 31 March 2019 profit £1,831,000). The average number of ordinary shares in issue, excluding those options granted under the SAYE scheme, of 115,944,071 (2018: 98,320,272; year ended 31 March 2019: 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 (2018: 98,320,272; year ended 31 March 2019 108,982,966) 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 2019, 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 2020, as in previous years.

 

Cash and cash equivalents

As at
30 September 2019
(unaudited)
£000
As at
30 September 2018
(unaudited)
£000
As at
31 March 2019
(audited)
£000
Cash and cash equivalents per balance sheet and cash flow statement
244
1,859
1,296

 

Provisions

 

 

Onerous leases
Total
£000
£000
Balance at 1 April 2018
239
239
Provisions utilised
(2)
(2)
Balance at 30 September 2018
237
237
Provisions made
-
-
Provisions utilised
(3)
(3)
Balance at 31 March 2019
243
243
Provisions made
Provisions utilised
(83)
(83)
Balance at 30 September 2019
160
160
Current
75
75
Non-current
85
85
160
160

 

 

 

 

Cash flow statements

 

6 months to
30 September 2019
(unaudited)
£000
6 months to
30 September 2018
(unaudited)
£000
Year Ended
31 March 2019
(audited)
£000
Cash flows from operating activities
Profit/(loss) for the period
281
110
1,831
Adjustments for:
Taxation
-
-
(315)
Financial income
-
-
-
Financial expense
442
498
901
Fair value adjustment on fixed assets and investment property
-
-
(1,443)
Depreciation
169
175
358
Amortisation of grants
-
-
-
Profit/loss on sale of property, plant and equipment
7
(16)
-
Cash generated from operations before changes in working capital and provisions
899
767
1,332
Increase in inventories
(635)
(959)
(2,236)
Decrease/(increase) in trade and other receivables
251
57
(113)
(Decrease)/increase in trade and other payables
(366)
(229)
(124)
Decrease in deferred income
(556)
(551)
(35)
(Decrease)/increase in provisions
(74)
(1)
(5)
Cash generated from operations
(481)
(916)
(1,181)

 

 

 

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 or visit www.rns.com.

 

END

 

 

IR LLFFDFALVIIA