SUTTON HARBOUR GROUP PLC — Interim / Quarterly Report 2019

Dec 4, 2019

National Storage Mechanism | Additional information

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

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