SUTTON HARBOUR GROUP PLC — Interim / Quarterly Report 2021

Dec 6, 2021

National Storage Mechanism | Additional information

RNS Number : 7079U

Sutton Harbour Group PLC

06 December 2021

6 December 2021  

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 2021.

Financial Highlights

·      Profit before taxation £0.327m (6 months to 30 September 2020: £0.058m)

·      Net assets £50.835m (31 March 2021: £47.153m)

·      Net assets per share 39.12p (31 March 2021: £40.67p)

·      Net debt £24.905m (31 March 2021: £26.874m)

·      Gearing 49.0% (31 March 2021: 57.0%)

Company Highlights

·      £3.5 million equity raise by way of Open Offer in August 2021

·      Acquisition of further strategic land in September 2021

·      Preliminary site works started on the 14 apartment Harbour Arch Quay, construction to start January 2022

·      19% increase in marina revenue compared to last year

·      Recovery of car parks trading to pre-Covid levels

Philip Beinhaker, Executive Chairman

"With the staged relaxation of UK Government imposed measures to manage the Covid pandemic, the Group has accelerated its efforts to start its first development project around Sutton Harbour in over a decade. During the first half year, the Group has made encouraging progress with its trading business activities and with the pipeline of development projects which it now intends to bring forward in accordance with its strategic vision. The Board was delighted to see the broad base of shareholders who participated in the recent 'Open Offer' equity raise."

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

Elliot Mustoe

Executive Chairman's Statement

For the six-month period to 30 September 2021

Results and Financial position

Profit before taxation for the six month period to 30 September 2021 was £0.327m compared to £0.058m for the comparative period to 30 September 2020 and £0.281m for the period to 30 September 2019. This demonstrates strong recovery by the Company since the disruption caused by three national lockdowns ordered by the UK Government to contain the spread of Covid-19 during our trading year to 31 March 2021.

As at 30 September 2021, net assets were £50.835m (39.1pence per share), up from £47.153m (40.7pence per share) at 31 March 2021. The increase reflects the issuance of 14 million new ordinary shares which raised £3.5m of new equity capital in August 2021. There has been no revaluation of assets during the reporting period, with the next external independent valuation due to be undertaken at the financial year end.

Net Debt has fallen to £24.905m, £1.969m less than the position at 31 March 2021 of £26,874 net debt. Debt reduced following the equity raise in August 2021, however purchase of some strategic land, ongoing costs associated with active development projects and autumn being a lower point in the Group's annual cash cycle (as rents and berthing fee receipts peak between November and April) have utilised some of the funds raised. As at 30 September 2021 gearing stood at 49.0% down from 57.0% as at 31 March 2021.

Trading Report

The Group's trading businesses have proved resilient during the first half year with marina berthing revenues up 19% on the previous year, despite no increase in prices, car park revenues back to 2019 levels and rent incomes restored with agreed deferred payments being honoured. Trading at Plymouth Fisheries has continued to be slow and slightly trailing its pre- Covid level.

The exceptional growth in marina revenues results from the capacity occupation at Sutton Harbour Marina and 95% occupation at King Point Marina. Leisure boating in the UK has experienced a resurgence in popularity since the Covid crisis and the current outlook for this sector remains robust. Some minor alterations will be made to some berths at King Point Marina over the coming winter to accommodate the larger vessels of boat-owners currently on our waiting list.

Trading at the car parks was re-established quickly during the first quarter and continued strongly throughout the second quarter as the area attracted good visitor footfall and local bars, restaurants and other attractions were visibly busy.

Performance of the investment property estate has remained steady, with little vacant space to let. The lease of Old Barbican Market to Edinburgh Woollen Mill expired in May 2021 and the Group recovered vacant possession of the building. Planning consent has now been granted to partition the 7,500 sq ft floorplate into three 2,500 sq ft units, two of which are already reserved to national covenant tenants. The 3rd unit is being actively marketed. Overall, once fully let, the property will achieve c. 50% more rent than under the previous tenancy. During the first half year the Group sold a small investment property, which was not regarded as a part of the core Sutton Harbour estate, at a profit.

The slowing trend in landings at Plymouth Fisheries has been consistent for a few years. With the current Fisheries Complex now 27 years old, the Group is working together with Plymouth City Council and other stakeholders on a plan to gain public funding for a modern Fishery Complex better suited to the needs of the industry now and into the future.

Regeneration

The Group is pleased to report that it has started the preliminary site works on the 14 apartment Harbour Arch Quay scheme. The year-long construction programme will commence in January 2022 with marketing of the apartments to start early in the New Year. The building is financed by separate lending secured on the development with part to be funded from the recent equity raise. The Group has submitted variations to the original plans for both the Sugar Quay and Sutton Road East residential schemes, which between them will provide c. 300 new homes, for planning determination in early 2022. Changes to the Sutton Road East design followed the acquisition of an adjoining site in September 2021 which allowed improvements to pedestrian and vehicular access and circulation through the development.

Summary

With the staged relaxation of UK Government imposed measures to manage the Covid pandemic, the Group has accelerated its efforts to start its first development project around Sutton Harbour in over a decade. During the first half year, the Group has made encouraging progress with its trading business activities and with the pipeline of development projects which it now intends to bring forward in accordance with its strategic vision. The Board was delighted to see the broad base of shareholders who participated in the recent 'Open Offer' equity raise.

Philip Beinhaker

EXECUTIVE CHAIRMAN

Consolidated Statement of Comprehensive Income

		6 months to 30 September 2021 (unaudited) £000	6 months to 30 September 2020 (unaudited) £000	Year Ended 31 March 2021 (audited) £000
Revenue		3,845	2,873	5,400
Cost of Sales		(2,436)	(1,874)	(3,638)
Gross Profit		1,409	999	1,762
Fair value adjustment on fixed assets and investment property		-	-	(2,211)
Administrative expenses		(731)	(547)	(1,171)
Operating profit from continuing operations		678	452	(1,620)
Financial income				-
Financial expense		(351)	(394)	(753)
Net financing costs		(351)	(394)	(753)
Profit before tax from continuing operations		327	58	(2,373)
Taxation credit on profit from continuing operations		(62)	-	198
Profit from continuing operations		265	58	(2,175)
Basic profit/earnings per share		0.22p	0.02p	(1.88p)
Diluted profit/earnings per share		0.22p	0.02p	(1.88p)

		6 months to 30 September 2021 (unaudited) £000	6 months to 30 September 2020 (unaudited) £000	Year Ended 31 March 2021 (audited) £000
Profit from continuing operations		265	58	(2,175)
Other comprehensive income/(expenses)
Continuing operations:
Revaluation of property, plant and equipment		-	-	3,245
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		-	-	3,245
Total comprehensive income for the period attributable to equity shareholders		265	58	1,070

Consolidated Balance Sheet

		As at 30 September 2021 (unaudited) £000	As at 30 September 2020 (unaudited) £000	As at 31 March 2021 (audited) £000
Non-current assets
Property, plant and equipment		29,680	27,694	29,766
Investment property		17,622	18,989	17,845
Inventories		13,151	12,878	12,962
		60,453	59,561	60,573
Current assets
Inventories		17,372	12,748	16,359
Trade and other receivables		1,846	2,363	2,396
Cash and cash equivalents		528	177	928
Tax recoverable		-	-	6
		19,746	15,288	19,689
Total assets		80,199	74,849	80,262
Current liabilities
Trade and other payables		1,118	1,098	1,730
Finance lease liabilities		48	62	141
Deferred income		1,111	936	1,819
Provisions		-	63	56
		2,277	2,159	3,746
Non-current liabilities
Other interest-bearing loans and borrowings		25,175	24,250	27,475
Finance lease liabilities		210	337	186
Deferred government grants		646	646	646
Deferred tax liabilities		1,056	1,255	1,057
Provisions		-	62	-
		27,087	26,550	29,363
Total liabilities		29,364	28,709	33,109
Net assets		50,835	46,140	47,153
Issued capital and reserves attributable to owners of the parent
Share capital		16,406	16,266	16,266
Share premium		13,972	10,695	10,695
Other reserves		16,280	13,034	16,280
Retained earnings		4,177	6,145	3,912
Total equity		50,835	46,140	47,153

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 2021	16,266	10,695	12,409	3,871	-	3,912	47,153
Comprehensive income/(expense)
Issue of Shares	140	3,277					3,417
Profit for the period	-	-	-	-	-	265	265
Total comprehensive income/(expense) 6 month period ended 30 September 2021	140	3,277	-	-	-	265	3,682
Balance at 30 September 2021	16,406	13,972	12,409	3,871	-	4,177	50,835
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 October 2020	16,266	10,695	9,163	3,871	-	6,145	46,140
Comprehensive income/(expense)
Profit for the period	-	-	-	-	-	(2,233)	(2,233)
Other comprehensive income/(expense)
Revaluation of property, plant and equipment	-	-	3,246	-	-	-	3,246
Total comprehensive income/(expense) 6 month period ended 31 March 2021	-	-	3,246	-	-	(2,233)	1,013
Balance at 31 March 2021	16,266	10,695	12,409	3,871	-	3,912	47,153

Consolidated Cash Flow Statement

		6 months to 30 September 2021 (unaudited) £000	6 months to 30 September 2020 (unaudited) £000	Year Ended 31 March 2021 (audited) £000
Cash generated from total operating activities		(1,237)	(599)	(2,536)
Cash flows from investing activities
Net expenditure on investment property		(12)	(4)	(10)
Expenditure on property, plant and equipment		(109)	75	(161)
Proceeds from sale of plant and equipment		260	-	-
Net cash used in investing activities		139	71	(171)
Cash flows from financing activities
Proceeds from sale of shares		3,500	-	-
Expenses of share issuance		(83)	-	-
Interest paid		(351)	(396)	(754)
Loan drawdowns/(repayment of borrowings)		(2,300)	309	3,225
Net finance lease (payments)/receipts		(69)	-	372
Net cash generated from financing activities		697	(87)	2,843
Net increase/(decrease) in cash and cash equivalents		(401)	(615)	136
Cash and cash equivalents at beginning of period		928	792	792
Cash and cash equivalents at end of period		527	177	928

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 2021 were approved by the Board of Directors on 5 July 2021 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 2021, 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 2021, 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 2021	Marine	Real Estate	Car Parking	Regeneration	Total
	£000	£000	£000	£000	£000
Revenue	2,648	776	421	-	3,845
Gross profit prior to non-recurring items	726	559	235	(111)	1,409
Segmental Operating Profit before Fair value adjustment and unallocated expenses	726	559	235	(111)	1,409
Fair value adjustment on fixed assets and investment property assets	-	-	-	-	-
Unallocated:
Administrative expenses					(731)
Operating profit from continuing operations					678
Financial income
Financial expense					(351)
Profit before tax from continuing operations					327
Taxation					(62)
Profit for the year from continuing operations					265
Depreciation charge
Marine					171
Car Parking					9
Administration					13
					193

Segment Information (continued)

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)
Loss before tax from continuing operations					58
Taxation					-
Loss for the year from continuing operations					58
Depreciation charge
Marine					168
Car Parking					11
Administration					11
					190

Segment Information (continued)

Year ended 31 March 2021	Marine	Real Estate	Car Parking	Regeneration	Total
	£000	£000	£000	£000	£000
Revenue	3,509	1,542	349	-	5,400
Gross profit prior to non-recurring items	770	1,020	110	(138)	1,762
Segmental Operating Profit before Fair value adjustment and unallocated expenses	770	1,020	110	(138)	1,762
Fair value adjustment on fixed assets and investment property assets	(1,061)	(1,150)	-	-	(2,211)
					(449)
Unallocated:
Administrative expenses					(1,171)
Operating profit from continuing operations					(1,620)
Financial income					-
Financial expense					(753)
Profit before tax from continuing operations					(2,373)
Taxation					198
Profit for the year from continuing operations					(2,175)
Depreciation charge
Marine					336
Car Parking					31
Administration					32
					399

	30 September 2021	30 September 2020	31 March 2021
	£000	£000	£000
Segment assets:
Marine	25,565	23,304	25,846
Real estate	18,740	19,660	18,715
Car Parking	4,954	5,323	4,861
Regeneration	30,029	25,746	29,343
Total segment assets	79,288	74,033	78,765
Unallocated assets:
Property, plant and equipment	77	83	70
Trade & other receivables	306	556	499
Cash & cash equivalents	528	177	928
Total assets	80,199	74,849	80,262

Segment Information (continued)

	30 September 2021	30 September 2020	31 March 2021
	£000	£000	£000
Segment liabilities:
Marine	1,312	1,184	2,062
Real estate	429	560	689
Car Parking	93	90	19
Regeneration	823	823	1,142
Total segment liabilities	2,657	2,657	3,912
Unallocated liabilities:
Bank overdraft & borrowings	25,433	24,649	27,802
Trade & other payables	154	148	337
Financial Derivatives	-	-	-
Tax payable	62	-	1
Deferred tax liabilities	1,058	1,255	1,256
Total liabilities	29,364	28,709	33,308

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 2021 (unaudited) pence	6 months to 30 September 2020 (unaudited) pence	Year Ended 31 March 2021 (audited) pence
Continuing operations
Basic earnings per share	0.22p	0.02p	(0.85p)
Diluted earnings per share*	0.22p	0.02p	(0.85p)

Basic Earnings per Share:

Basic earnings per share have been calculated using the profit for the period of £265,000 (2020: profit £58,000, year ended 31 March 2020 loss £2,175,000). The average number of ordinary shares in issue, excluding those options granted under the SAYE scheme, of 120,534,234 (2020: 115,944,071; year ended 31 March 2021: 115,944,071) has been used in our calculation.

Diluted Earnings per Share:

Diluted earnings per share uses a weighted average number of 120,765,411 (2020: 116,100,126; year ended 31 March 2021 116,130,728) ordinary shares after adjusting for the effects of share options in issue: 242,063 ordinary shares (2020: 102,273; 31 March 2021: 218,063)

Property valuation

Freehold land and buildings and investment property have been independently valued by Jones Lang LaSalle as at 31 January 2021, 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 2022, as in previous years.

Cash and cash equivalents

	As at 30 September 2021 (unaudited) £000	As at 30 September 2020 (unaudited) £000	As at 31 March 2021 (audited) £000
Cash and cash equivalents per balance sheet and cash flow statement	527	177	928

Provisions

	Onerous leases	Total
	£000	£000
Balance at 1 April 2020	99	99
Provisions made	26	26
Balance at 30 September 2020	125	125
Provisions made	-	-
Provisions utilised	(69)	(69)
Balance at 31 March 2021	56	56
Provisions made	-	-
Provisions utilised	(56)	(56)
Balance at 30 September 2021	-	-

Cash flow statements

	6 months to 30 September 2021 (unaudited) £000	6 months to 30 September 2020 (unaudited) £000	Year Ended 31 March 2021 (audited) £000
Cash flows from operating activities
Profit/(loss) for the period	265	58	(2,373)
Adjustments for:
Taxation	-	-	-
Financial income	-	-	-
Financial expense	351	396	753
Fair value adjustment on fixed assets and investment property	-	-	2,211
Depreciation	193	190	399
Amortisation of grants	-	-	-
Profit/loss on sale of property, plant and equipment	(24)	-	3
Cash generated from operations before changes in working capital and provisions	785	644	933
Increase in inventories	(1,202)	(599)	(4,294)
Decrease/(increase) in trade and other receivables	556	234	199
(Decrease)/increase in trade and other payables	(612)	(236)	334
Decrease in deferred income	(708)	(607)	275
(Decrease)/increase in provisions	(56)	(35)	(43)
Cash generated from operations	(1,237)	(599)	(2,536)

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