SUTTON HARBOUR GROUP PLC — Interim / Quarterly Report 2020

Dec 4, 2020

National Storage Mechanism | Additional information

RNS Number : 5178H

Sutton Harbour Group PLC

04 December 2020

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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