MOUNTVIEW ESTATES PLC

Earnings Release • Jun 18, 2020

National Storage Mechanism | Additional information

RNS Number : 2943Q

Mountview Estates PLC

18 June 2020

MOUNTVIEW ESTATES P.L.C.

Preliminary Results for the year ended 31 March 2020

CHIEF EXECUTIVE OFFICER'S STATEMENT

When I wrote this statement last year I drew attention to the fact that the British People voted to leave the European Union on 23 June 2016 but every statement that I had written since then has been conscious of the uncertainties that continue pending the conclusion of our withdrawal.

Happily on 12 December 2019 Boris Johnson was elected with a big majority that enabled us to leave the European Union on 31 January 2020 but the details of the withdrawal will not be certain until 31 December 2020.

Now added to these uncertainties are the Covid-19 constraints the effects of which I will review later in this statement.  The financial year under review ended on 31 March 2020 and the lockdown was not imposed until within ten days of that date.  Given the time-lag on transactions in the property business it is fair to assume that any deal that was to conclude within those few days was already under contract before the constraints were imposed.

I believe that the trading results for the year ended 31 March 2020 were not influenced by the Covid-19 pandemic and that any influence or effects should be considered as post balance sheet events.

The headline figures in respect of our financial performance for the year ended 31 March 2020 are detailed under the heading "Financial Highlights" below.  Whilst Revenue has dropped by a very modest amount all the other performance indicators have shown an upward trend.  Gearing has fallen from 11.3% to 7.2% and thus we are in an even stronger position to make the purchases which are essential to the future of the Company.  Indeed we have made some good purchases in our new financial year.

The final dividend is maintained at 200 pence per share and is payable on 17 August 2020 subject to approval at the Annual General Meeting on 12 August 2020.  This will keep the total annual dividend at 400 pence per share which is slightly more generously covered 1.75 times than it was last year.

And now I inevitably turn to "Stay Home, Protect the N.H.S., Save Lives" or as expressed more recently "Stay Alert, Control the Virus, Save Lives".

Our colleague Andrew Williams is a doctor and it would be wrong not to express our admiration for his unstinting work on the front line.  Well done and thank you, Andrew!

We have had to adapt to new ways of running the office and I think that we have done so quite effectively.  Those of us who can work from home do so and the office is staffed on a rota basis so that we are able to maintain social distancing and still serve our customers appropriately.  Over 80% of our rents are paid directly into the bank and regulated rents are set at a modest level.  Provided tenants pay their rent they have absolute security of tenure and a significant number have help from social services.

Auctions are now all conducted remotely and the auctioneers are becoming more successful at replicating the ballroom atmosphere.  So far this financial year we have been happy in the auction room both in terms of sale prices achieved and the prices at which we have been able to make purchases.  Nobody can pretend that life is normal but our staff are coping very well.

We have not had to furlough any staff or reduce staff numbers in any other way and I remain confident that our years of financial prudence will enable us to continue to conduct the business successfully and to maintain our dividend payments.  Whilst I thank my staff and colleagues for their hard work, loyalty and expertise in producing increased profits for the year ended 31 March 2020 I thank them also for the willingness and good humour with which they are adapting to the strange circumstances in which we are finding ourselves.

I look forward to writing this statement in more normal times next year.

Duncan Sinclair

18 June 2020

MOUNTVIEW ESTATES P.L.C.

FINANCIAL HIGHLIGHTS

			2020		2019		(Decrease)/Increase
			£		£		%
Revenue (millions)			64.9		65.4		(0.8)
Gross Profit (millions)			41.4		40.8		1.5
Profit Before Tax (millions)			34.9		34.6		0.9
Profit Before Tax excluding investment properties revaluation (millions)			35.9		34.3		4.7
Equity Holders' Funds (millions)			379.6		366.9		3.5
Earnings per share (pence)			725.7		718.3		1.0
Net assets per share (£)			97.4		94.1		3.5
Dividend per share (pence)			400		400		-

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	9 July 2020
Record date	10 July 2020
Payment date	17 August 2020

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 MARCH 2020

	Year		Year
	ended		ended
	31.03.2020		31.03.2019
	£'000		£'000
REVENUE	64,873		65,428
Cost of sales	(23,519)		(24,627)
GROSS PROFIT	41,354		40,801
Administrative expenses	(5,630)		(5,442)
Gain on sale of investment properties	1,174		-
Operating profit before changes in fair value of investment properties	36,898		35,359
(Decrease)/Increase in fair value of investment  properties	(969)		287
PROFIT FROM OPERATIONS	35,929		35,646
Net finance costs	(988)		(1,079)
PROFIT BEFORE TAXATION	34,941		34,567
Taxation - current	(7,320)		(6,504)
Taxation - deferred	675		(55)
Taxation	(6,645)		(6,559)
PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS	28,296		28,008
Basic and diluted earnings per share (pence)	725.7p		718.3p

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED 31 MARCH 2020

		As at	As at
		31.03.2020	31.03.2019
		£'000	£'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment		1,670	1,710
Investment properties		24,122	28,112
		25,792	29,822
CURRENT ASSETS
Inventories of trading properties		392,069	392,384
Trade and other receivables		3,676	1,915
Cash at bank		3,553	1,981
		399,298	396,280
TOTAL ASSETS		425,090	426,102
EQUITY AND LIABILITIES
Share capital		195	195
Capital redemption reserve		55	55
Capital reserve		25	25
Other reserve		56	56
Retained earnings		379,243	366,543
		379,574	366,874
NON-CURRENT LIABILITIES
Long-term borrowings		31,100	47,250
Deferred tax		4,076	4,751
		35,176	52,001
CURRENT LIABILITIES
Bank overdrafts and short-term loans		2,060	1,250
Trade and other payables		4,830	2,812
Current tax payable		3,450	3,165
		10,340	7,227
TOTAL LIABILITIES		45,516	59,228
TOTAL EQUITY AND LIABILITIES		425,090	426,102

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2020

			Capital
	Share	Capital	Redemption	Other	Retained
	Capital	Reserve	Reserve	Reserves	Earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 1 April 2018	195	25	55	56	354,131	354,462
Profit for the year					28,008	28,008
Dividends					(15,596)	(15,596)
Balance as at 31 March  2019	195	25	55	56	366,543	366,874

			Capital
	Share	Capital	Redemption	Other	Retained
	Capital	Reserve	Reserve	Reserves	Earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 1 April 2019	195	25	55	56	366,543	366,874
Profit for the year					28,296	28,296
Dividends					(15,596)	(15,596)
Balance as at 31 March 2020	195	25	55	56	379,243	379,574

GROUP CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 MARCH 2020

			Year		Year
			ended		Ended
			31.03.2020		31.03.2019
			£'000		£'000
Cash flow from operating activities
Operating profit			35,929		35,646
Adjustment for:
Depreciation			64		61
(Gain) on disposal of investment properties			(1,174)		-
Decrease/(Increase) in fair value of investment properties			969		(287)
Cash flow from operations before changes in working capital			35,788		35,420
Decrease/(Increase) in inventories			315		(15,505)
(Increase) in receivables			(1,761)		(56)
Increase in payables			2,018		969
Cash generated from operations			36,360		20,828
Interest paid			(988)		(1,079)
Income taxes paid			(7,035)		(5,677)
Net cash inflow from operating activities			28,337		14,072
Investing activities
Proceeds from disposal of investment properties			4,195		-
Purchase of property, plant and equipment			(24)		-
Net cash inflow from investing activities			4,171		-
Cash flow from financing activities
(Repayment) of borrowings			(16,835)		(1,863)
Equity dividend paid			(15,596)		(15,596)
Net cash (outflow) from financing activities			(32,431)		(17,459)
Net Increase/(decrease) in cash and cash equivalents			77		(3,387)
Opening cash and cash equivalents			1,981		5,368
Cash and cash equivalents at the end of the year			2,058		1,981

2020 Annual General Meeting (AGM) 

In light of ongoing restrictions imposed by the UK Government in response to the COVID-19 pandemic, which may continue to prohibit, amongst other things, non-essential travel and certain public gatherings, it is possible that the AGM will be a closed meeting with the minimum necessary quorum of two shareholders present in order to conduct the business of the meeting. 

Shareholders will be updated closer to the AGM on whether or not attendance is permitted. Details of the AGM will be included in the Notice of AGM set out in the 2019/20 Annual Report and Accounts that will be sent to shareholders at a date to be announced in due course.

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 2020 and 31 March 2019, but represents extracts from them.

The statutory accounts for the financial year ended 31 March 2019 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 2020 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 12 August 2020.

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 2020 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 Adviser) www.sparkadvisorypartners.com 

Mark Brady	020 3368 3551

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