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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Adl | LSE:AD. | London | Ordinary Share | GB0005739999 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 50.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:2420B
ADL PLC
31 July 2007
ADL plc
Annual Report and Accounts
2007
Chairman's statement
Financial Results
I am pleased to report that turnover for the year ended 31 March 2007 was #5.65
million (2006: #4.92 million) including #0.68 million from Solutions (Yorkshire)
Limited which was acquired in July 2006 and the profit on ordinary activities,
before exceptional costs and tax, was #407,323 (2006: #114,409). We notified
shareholders in a press release on 11 May 2007 that the Group's profits would be
depressed by a number of exceptional items and details of these are set out in
the accounts and have not changed since our statement.
Profit before taxation amounted to #151,717 (2006: #99,309) and after tax
profits #133,717 (2006: #130,309). Earnings per share are marginally reduced to
1.35p (2006 1.38p).
In view of the high level of "one-off" exceptional items the Board does not
consider it prudent to recommend a final dividend for the financial year ended
31 March 2007 having already declared and paid an interim dividend on 20 October
2006 of 1p per Ordinary Share amounting to #98,857 which was announced in the
interim results.
Following the revaluation by Christie & Co. of the Group's freehold properties,
the effect of the profit sharing agreement and the rights to the Newford Limited
dividends, the net asset value of the Group at 31 March 2007 has increased by
24.6% to 101.5p per share (2006: 81.5p).
The Industry
During the year your Board has put in place an upgrading of management systems
to cope with an increasingly challenging regulatory environment. Although we
understand and support the need for proper regulation, the much publicised
actions of CSCI are making it increasingly difficult to encourage and employ the
calibre of managers that we need to deal appropriately and sensitively with an
increasingly ageing population. The knock-on effect of this on the industry
should not be underestimated.
As a result your Board has postponed (at least for the time being) the
implementation of the franchise of our care homes.
Outlook
Although the Company is operating in an increasingly challenging environment it
is the Board's intention to continue to expand the Company by the acquisition of
further care homes in appropriate locations. In parallel we will continue to
upgrade the management systems in our care homes and we will also simplify the
current group corporate structure.
Current trading is satisfactory and if the present trend continues throughout
the financial year we should be able to report a further improvement in trading.
The year has seen the Group face a number of new challenges which have placed a
considerable strain on all those involved in the management of homes. I should
like to take this opportunity to place on record my appreciation of their hard
work and dedication in providing such high quality care to the people for whom
the Company is responsible.
Sir William Wells
Chairman
30 July 2007
For Further Enquiries:
Jeremy Davies 07860 717 458
ADL plc
John Wakefield 0117 933 0020
Blue Oar Securities Plc
Managing Director's review
The Group continues to seek to dispose of land which is surplus to the
requirements of operating the homes, whilst continuing to upgrade our operating
facilities. This includes improving systems to ensure compliance with the
increasingly challenging regulatory inspection regime.
Operations
I am pleased to report that occupancy in the homes under the Group's management
averaged 80% in the year to 31 March 2007 and this has increased to in excess of
84% in the first quarter of the current year. The Company has maintained cost
control, commensurate with the standard of care we provide to our clients.
Properties
On 19 December 2006 the Company sold the Nightingale Nursing Home at the
carrying value in the Company's books for #800,000 for redevelopment.
There are a number of property transactions in various stages of completion -
* Morton Manor - the developer has completed the development of six flats.
The Company is due to receive #249,000 deferred consideration and a profit
share which will be finalised when the last property is sold.
* Morton Manor - negotiations are continuing with Elmley Homes Limited to
develop a care village of 40 to 50 dwellings on an area of unutilised land
adjacent to Morton Manor.
* Newsham House - the offer for Newsham House set out in the interim
statement is still extant and should be completed when planning in relation
to car parking is finalised.
* Allambie - planning consent has been obtained for the extension to the
home and the proposed developer continues negotiation with the Local
Planning Authority for the development of the surplus land.
* The Knoll - the proposed developer continues to negotiate with the Local
Planning Authority relating to the provision of two small blocks of close
care apartments.
Jeremy Davies
Managing Director
30 July 2007
Financial review
Group Profit and Loss Account
Turnover for the year ended 31 March 2007 amounted to #5.65 million (2006: #4.92
million). The 2007 turnover includes #0.68 million for the trading of Solutions
(Yorkshire) Limited since the Company acquired it on 4 July 2006.
Operating profit before exceptional items amounted to #923,581 (2006: #557,014).
The 2007 operating profit includes the contribution of #177,304 made by
Solutions (Yorkshire) Limited in the nine months from 4 July 2006. The
Directors decided to close and sell Nightingale as it was making losses and an
acceptable offer had been received for the home of #800,000 which equated to the
carrying value in the accounts. The operating profit includes other operating
income arising from the Group's profit share from the South Garth Partnership of
#61,704 (2006: #59,658), the full year benefit of dividends from Newford Limited
#108,000 (2006: #24,000 for three months) and further consideration on the sale
of land at Morton net of costs amounting to #32,657.
The exceptional and non-recurring costs of #255,606 were the write off of
unamortised finance costs of #99,924 on 4 July 2006 on the refinancing of the
bank loan facility with IXIS, legal costs of #100,682 incurred in the defence of
the position following the CSCI enquiry at Newsham House and the severance costs
of #55,000 incurred on the departure of a director in February 2007. In 2006
the exceptional costs were #15,100 for the planning permission on the disposal
of land at Morton Close Nursing Home.
Operating profit for the Group after exceptional costs amounted to #667,975
(2006: #541,914).
After net interest costs, the profit before taxation amounted to #151,717 (2006:
#99,309). The Group tax charge for the year is #18,000 (2006: #31,000 tax
credit) leaving a retained profit for the year of #133,717 (2006: #130,309).
Earnings per share amounted to 1.35p (2006: 1.38p).
The Directors declared and paid an interim dividend of 1p per Ordinary Share
amounting to #98,857 (2006: #nil). No final dividend is proposed.
Group Balance Sheet
In July 2006 the Group acquired Solutions (Yorkshire) Limited for #2.1 million
and in December 2006 the Group sold the Nightingale Nursing Home at its book
value of #0.8 million.
On 31 March 2007 the Group's nine freehold properties, together with the profit
sharing agreement with South Garth Residential Care Home Partnership and the
Newford Limited "B" Redeemable Ordinary Share, entitling the Company to a share
of dividends, were re-valued by Christie & Co. at #17.59 million (2006: #14.13
million). The increase in value has resulted in a further addition to
revaluation reserves amounting to #1.94 million (2006: #1.42 million). Net
assets per share at 31 March 2007 were 101.5p (2006: 81.5p).
The Group's freehold care homes were valued, on an existing use basis. In
arriving at the portfolio valuation, Christie & Co. have separately assessed the
market values of the individual care homes and made an adjustment by way of a
portfolio premium equating to around 9.5% (2006: 7.5%).
Bank Facility and Hedging
On 3 May 2006 the Company signed a #25 million loan facility with IXIS Corporate
& Investment Bank S.A. ("IXIS"). The interest rate is 1.25% over LIBOR falling
to 1.125% over LIBOR if interest cover is between 2.5 and 2.75 times EBITDA and
1% over LIBOR if interest cover is over 2.75 times EBITDA. There are no
repayments due on the IXIS loan facility until 30 October 2009.
On 4 July 2006 the Company drew down #9.25 million of the IXIS #25 million loan
facility to repay the Fortis Bank A and B Facilities and the overdraft which had
been in existence since January 2004 and to complete the acquisition of
Solutions (Yorkshire) Limited. Further drawings on the #25 million IXIS
facility is subject to IXIS being satisfied in all respects with the proposed
acquisition to be funded and that the loan does not exceed 70% of the value of
the Group's charged properties. As a result, the balance of the finance costs
of arranging the Fortis facility amounting to #0.1 million at 4 July 2006 was
written off to the profit and loss account.
On 29 December 2006 #0.8 million proceeds from the sale of Nightingale were
applied in reducing the Group's bank loan from #9.25 million to #8.45 million
and the facility from #25 million to #24.2 million.
On 21 April 2004 the Company purchased, through Fortis Bank, an interest rate
cap of a 6% interest rate, in the amount of #5 million from 30 April 2004 to 30
April 2009, at a cost of #87,000.
Daniel Francis
Finance Director
30 July 2007
Group profit and loss account
Year ended 31 March 2007
Note Continuing Acquisitions Year to Year to
Activities 31 Mar 07 31 Mar 06
# #
Group turnover 2 4,972,853 675,595 5,648,448 4,916,890
Cost of sales (3,166,031) (409,130) (3,575,161) (3,231,269)
Gross profit 1,806,822 266,465 2,073,287 1,685,621
Administrative (1,262,906) (89,161) (1,352,067) (1,212,265)
expenses
Exceptional costs 3 (255,606) - (255,606) (15,100)
Other operating income 3 202,361 - 202,361 83,658
Operating profit 3 490,671 177,304 667,975 541,914
Interest receivable 11,187 3,067
Interest payable 6 (527,445) (445,672)
Profit on ordinary 151,717 99,309
activities before
taxation
Tax on profit on 7 (18,000) 31,000
ordinary activities
Retained profit for 8 133,717 130,309
the year
Earnings per ordinary 9 1.35p 1.38p
share (pence)
All of the activities of the group are classed as continuing.
Group statement of total recognised gains and losses
Year ended 31 March 2007
Year to Year to
31 Mar 07 31 Mar 06
# #
Profit attributable to the shareholders 133,717 130,309
Unrealised surplus on revaluation of freehold properties 1,943,000 1,032,000
Unrealised surplus on revaluation of the rights to
Newford Limited dividends - 390,000
Total gains recognised since the last annual report 2,076,717 1,552,309
Group balance sheet
31 March 2007
31 Mar 07 31 Mar 06
Note # #
Fixed assets
Intangible assets 10 982,201 981,050
Tangible assets 11 17,031,906 13,506,930
Investments 12 1,600 1,600
Total fixed assets 18,015,707 14,489,580
Current assets
Stocks 13 10,520 10,520
Debtors 14 934,231 816,303
Cash at bank and in hand 340,534 8,313
1,285,285 835,136
Creditors: Amounts falling due within one year 15 (932,626) (1,626,191)
Net current assets / (liabilities) 352,659 (791,055)
Total assets less current liabilities 18,368,366 13,698,525
Creditors: Amounts falling due after more than 16 (8,336,800) (5,644,819)
one year
Net assets 10,031,566 8,053,706
Capital and reserves
Called-up equity share capital 22 1,521,825 1,521,825
Share premium account 23 3,712,396 3,712,396
Revaluation reserve 23 4,613,906 2,750,906
Profit and loss account 23 183,439 68,579
Total equity shareholders' funds 24 10,031,566 8,053,706
Net assets per ordinary share 27 101.5p 81.5p
Group cash flow statement
Year ended 31 March 2007
Year to Year to
31 Mar 07 31 Mar 06
Note # #
Net cash inflow from operating activities 26 1,127,825 351,794
Returns on investments and servicing of finance
Interest paid (527,445) (445,672)
Finance charges paid (127,156) -
Interest received 11,187 3,067
Net cash outflow from returns on investments
and servicing of finance (643,414) (442,605)
Taxation
UK Corporation Tax (paid)/refunded (46,078) 21,087
Capital expenditure and financial investment
Payments to acquire tangible fixed assets - (63,527)
Sale Nightingale Nursing Home/Morton Manor 800,700 499,000
Investment in Newford Limited - (1,600)
Acquisition of Solutions (Yorkshire) Limited 26 (2,469,250) -
Net cash (outflow)/inflow from capital
expenditure and financial investment (1,668,550) 433,873
Dividends (98,857) -
Cash (outflow)/inflow before financing (1,329,074) 364,149
Financing
New secured loans 9,250,000 -
Repayment of amounts borrowed (6,900,000) (300,000)
Net cash inflow/(outflow) from financing 2,350,000 (300,000)
Increase in cash in the year 1,020,926 64,149
Notes to the financial statements
Year ended 31 March 2007
1. Accounting policies
Basis of accounting
The Financial Statements have been prepared under the historical cost
convention, modified to include the revaluation of certain fixed assets, and in
accordance with applicable accounting standards.
In preparing the Financial Statements the Group has included a policy of
impairment review, under FRS 15, of its freehold land and buildings, including
fixtures and fittings, representing the Group's care homes.
Basis of consolidation
The consolidated Financial Statements incorporate the Financial Statements of
the Company and all Group undertakings. These are adjusted, where appropriate,
to conform to Group accounting policies. Acquisitions are accounted for under
the acquisition method and goodwill on consolidation is capitalised and written
off over twenty years from the year of acquisition. The results of companies
acquired or disposed of are included in the Group profit and loss account after
or up to the date that control passes respectively. As a consolidated Group
profit and loss account is published, a separate profit and loss account for the
parent company is omitted from the Group Financial Statements by virtue of
section 230 of the Companies Act 1985.
Turnover
The turnover shown in the Group profit and loss account represents the value of
services provided during the year.
Goodwill
Positive purchased goodwill arising on acquisitions is capitalised, classified
as an asset on the balance sheet and amortised over its estimated useful life up
to a maximum of 20 years. This length of time is presumed to be the maximum
useful life of purchased goodwill because it is difficult to make projections
beyond this period. Goodwill is reviewed for impairment at the end of the first
full financial year following each acquisition and subsequently as and when
necessary if circumstances emerge that indicate that the carrying value may not
be recoverable.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its
estimated residual value, over the useful economic life of that asset as
follows:
Goodwill 20 years
Intangible assets 7.75 years and 3.75 years from 31 March 2007
Fixed assets
All fixed assets are initially recorded at cost.
Depreciation
Depreciation is calculated so as to write off the cost of an asset, less its
estimated residual value, over the useful economic life of that asset as
follows:
Motor vehicles 25% straight line
Office equipment 25% straight line
Depreciation is provided on all tangible fixed assets, other than freehold land
and buildings. Included within freehold land and buildings are all fixtures and
fittings in respect of care homes. An impairment review permitted by FRS 15 is
carried out each year to ensure the carrying value of the cost of the care homes
is not overstated. The care homes must be maintained to a standard approved by
the Commission for Social Care Inspection.
Stocks
Stocks are valued at the lower of cost and net realisable value, after making
due allowance for obsolete and slow moving items.
Operating lease agreements
Rentals applicable to operating leases, where substantially all of the benefits
and risks of ownership remain with the lessor, are charged against profits on a
straight line basis over the period of the lease.
Deferred taxation
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events have occurred at that date that will result in an obligation to pay more,
or a right to pay less or to receive more tax, with the following exceptions:
Provision is made for tax on gains arising from the revaluation (and similar
fair value adjustments) of fixed assets, and gains on disposal of fixed assets
that have been rolled over into replacement assets, only to the extent that, at
the balance sheet date, there is a binding agreement to dispose of the assets
concerned. However, no provision is made where, on the basis of all available
evidence at the balance sheet date, it is more likely than not that the taxable
gain will be rolled over into replacement assets and charged to tax only where
the replacement assets are sold; and
Deferred tax assets are recognised only to the extent that the Directors
consider that it is more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing differences can
be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are
expected to apply in the periods in which timing differences reverse, based on
tax rates and laws enacted or substantively enacted at the balance sheet date.
Group Relief
Taxable losses acquired by the Company from another company within the Group are
charged/credited to the profit and loss account at a fair value reflecting the
reduction in corporation tax liability of the Company.
Capital Instruments
Shares are included in shareholders' funds. Other instruments are classified as
liabilities if they contain an obligation to transfer economic benefits and if
they are not included in shareholders' funds. The finance cost recognised in
the profit and loss account in respect of capital instruments other then equity
shares is allocated to periods over the term of the instrument at a constant
rate on the carrying amount.
2. Turnover
The turnover and loss before tax are attributable to the one principal activity
of the Group.
An analysis of turnover is given below:
Year to Year to
31 Mar 07 31 Mar 06
# #
United Kingdom 5,648,448 4,916,890
3. Operating profit
Operating profit includes other operating income:
Year to Year to
31 Mar 07 31 Mar 06
# #
Profit on disposal of land 32,657 -
South Garth profit share 61,704 59,658
Newford Limited dividends 108,000 24,000
Total other operating income 202,361 83,658
Operating profit is stated after charging:
Directors' emoluments 298,958 235,000
Amortisation:- intangible assets 103,578 19,087
Depreciation: - of owned fixed assets 18,024 22,106
Auditors' remuneration:
- as auditors 59,905 36,000
- other services 21,566 22,590
- corporate finance fees 125,829 -
Exceptional costs 255,606 15,100
The exceptional costs comprise the ongoing legal enquiry at Newsham House,
compensation for the loss of office by a director and the write off of remaining
capitalised finance costs relating to previous loan facility.
In the prior year the exceptional loss relates to the costs of obtaining
planning permission for the development of Morton Manor.
4. Particulars of employees
The average number of staff employed (full time equivalents) by the Group during
the year amounted to:
Year to Year to
31 Mar 07 31 Mar 06
No. No.
Engaged in provision of care 142 126
Catering, domestic and maintenance 44 38
Management and administration 18 19
204 183
Following a review the average number of staff employed in 2006 has been
restated.
The aggregate payroll costs of the above were:
Year to Year to
31 Mar 07 31 Mar 06
# #
Wages and salaries 3,016,823 2,594,145
Social security costs 231,950 233,000
3,248,773 2,827,145
5. Directors' emoluments
The Directors' aggregate emoluments in respect of qualifying services were:
Year to Year to
31 Mar 07 31 Mar 06
# #
Emoluments receivable 243,958 235,000
Compensation for loss of office 55,000 -
The highest paid Director's emoluments amounted to #55,000 (2006: #55,000)
6. Interest payable
Year to Year to
31 Mar 07 31 Mar 06
# #
Interest payable on bank and other loans 527,445 445,672
7. Tax charge/(credit) on profit on ordinary activities
(a) Analysis of charge in the year
Year to Year to
31 Mar 07 31 Mar 06
# #
Current tax: in respect of the year
UK Corporation tax based on the results for the 23,000 20,000
year at 19% (2006: 19%)
Over provision in prior years (12,000) -
Total tax charge 11,000 20,000
Deferred tax:
Deferred tax charge/(credit) 7,000 (51,000)
Tax charge/(credit) on profit on ordinary activities 18,000 (31,000)
(b) Factors affecting current tax charge
The difference between the total current tax shown above and the amount
calculated by applying the effective standard rate of UK corporation tax to the
profit before tax is as follows:
Year to Year to
31 Mar 07 31 Mar 06
# #
Profit on ordinary activities before taxation 151,717 99,309
Profit on ordinary activities by rate of tax 28,826 18,869
Difference between depreciation and capital allowances (5,417) (1,286)
Amortisation 15,600 -
Dividends not taxed (20,520) -
Other differences (7,489) 2,417
Total tax charge (note 7(a)) 11,000 20,000
8. Profit attributable to members of the parent company
The loss dealt with in the accounts of the parent company was #55,051 (2006:
loss #55,168).
9. Earnings per share
Year to Year to
31 Mar 07 31 Mar 06
Pence Pence
Earnings per ordinary share 1.35 1.38
Earnings per share have been calculated on the net basis on the profit on
ordinary activities after taxation of #133,717 (2006: #130,309) using the
weighted average number of ordinary shares in issue during the year of 9,885,694
(2006: 9,414,461).
10. Intangible fixed assets
Intangible
Goodwill Asset Total
# # #
Cost or valuation
At 1 April 2006 381,733 640,000 1,021,733
Additions 104,729 - 104,729
At 31 March 2007 486,462 640,000 1,126,462
Amortisation
At 1 April 2006 40,683 - 40,683
Charge for the year 23,578 80,000 103,578
At 31 March 2007 64,261 80,000 144,261
Net book value
At 31 March 2007 422,201 560,000 982,201
At 31 March 2006 341,050 640,000 981,050
#250,000 of the intangible assets represents Christie & Co (valuers, surveyors
and agents) open market valuation at both 31 March 2006 and 2007 of a profit
sharing agreement with South Garth Residential Care Home Partnership. #310,000
revaluation represents Christie & Co (valuers, surveyors and agents) open market
valuation, at 31 March 2007 of the rights to Newford Limited dividends.
11. Tangible fixed assets
Freehold Motor Fixtures Office
Property Vehicles and Fittings Equipment Total
# # # # #
Cost or valuation
At 1 April 2006 13,487,000 23,600 7,245 99,204 13,617,049
Additions 2,400,000 - - - 2,400,000
Disposals (800,000) (23,600) - - (823,600)
Revaluation 1,943,000 - - - 1,943,000
At 31 March 2007 17,030,000 - 7,245 99,204 17,136,449
Depreciation
At 1 April 2006 - 23,600 3,887 82,632 110,119
Disposals - (23,600) - - (23,600)
Charge for the year - - 2,121 15,903 18,024
At 31 March 2007 - - 6,008 98,535 104,543
Net book value
At 31 March 2007 17,030,000 - 1,237 669 17,031,906
At 31 March 2006 13,487,000 - 3,358 16,572 13,506,930
The freehold properties are held for long term retention and were valued by
Christie & Co (valuers, surveyors and agents) at 31 March 2007 at open market
value for existing use on both portfolio and individual property basis in
accordance with The Appraisal and Valuation Standards published by the Royal
Institution of Chartered Surveyors. The portfolio basis has been used in the
Group valuation.
The historical cost of the Group's freehold properties at 31 March 2007 was
#12,202,518.
12. Investments
The Group investment of #1,600 represents the cost of one Newford Limited
redeemable "B" Share of #1.
On 4 July 2006 the company acquired the whole of the issued share capital of
Solutions (Yorkshire) Limited. Net assets acquired comprises
Book Fair Value Fair
Value adjustment Value
Tangible fixed assets 2,400,000 - 2,400,000
Debtors 224,585 224,585
Cash 298,988 298,988
Trade creditors (13,494) (13,494)
Corporation tax (37,500) (11,648) (49,148)
Other creditors (112,601) (112,601)
Loans (753,007) (753,007)
2,006,971 (11,648) 1,995,323
Cash consideration 1,905,000
Deferred consideration 84,821
Costs 110,231
2,100,052
Goodwill 104,729
For the 3 months up to 30 June 2006, the effective date of acquisition Solutions
(Yorkshire) Limited management accounts show
#'000
Turnover 246,000
Operating profit 61,000
Taxation (11,000)
50,000
13. Stocks
31 Mar 07 31 Mar 06
# #
Stock 10,520 10,520
14. Debtors
31 Mar 07 31 Mar 06
# #
Trade debtors 259,509 365,299
Amounts owed by group undertakings - -
Other debtors 27,323 29,622
Deferred taxation (note 19) 44,000 51,000
Deferred consideration Morton Manor 249,000 249,000
Prepayments and accrued income 354,399 121,382
934,231 816,303
15. Creditors: Amounts falling due within one year
31 Mar 07 31 Mar 06
# #
Bank overdrafts - 688,705
Bank loans - 350,000
Trade creditors 189,383 150,013
Corporation tax 34,379 20,309
PAYE and social security 183,625 129,382
Other creditors 340,229 179,896
Accruals and deferred income 185,010 107,886
932,626 1,626,191
16. Creditors: Amounts falling due after more than one year
31 Mar 07 31 Mar 06
# #
Bank loans 8,450,000 5,750,000
Less finance costs (113,200) (105,181)
8,336,800 5,644,819
The bank loan is secured by way of a legal charge and fixed and floating charges
over all the Company's and the Group's freehold properties and other assets both
present and future. Interest on the bank loan is 1.25% over LIBOR and is
repayable in instalments.
Finance costs incurred in obtaining bank loans are written off over the period
of the loan. The bank loans were refinanced on 4 July 2006 and, as a result,
the balance of the finance costs at 4 July 2006 has been written off to the
profit and loss account.
17. Creditors - capital instruments
Creditors include finance capital which is due for repayment as follows:
31 Mar 07 31 Mar 06
# #
Amounts repayable:
In one year or less or on demand - 350,000
In more than one year but not more
than two years - 400,000
In more than two years but not more
than five years 1,056,250 1,450,000
In more than five years 7,393,750 3,900,000
8,450,000 6,100,000
18. Bank loans and overdrafts
The Group's financial instruments comprise borrowings, some cash and liquid
resources, and various items, such as trade debtors, trade creditors etc that
arise directly from its operations. The main purpose of these financial
instruments is to provide finance for the Group's operations.
The interest rate profile of the financial liabilities was as follows:
31 Mar 07 31 Mar 06
# #
Floating rate:
Bank overdraft - 688,705
Bank loan 8,450,000 6,100,000
Total 8,450,000 6,788,705
The interest rate on floating rate financial liabilities is 1.25% above LIBOR
for the bank loan (2006: 1.5% and 1.75% (overdraft) above LIBOR).
The Group finances its operations through a mixture of retained profits and bank
borrowings.
Short term debtors and creditors have been excluded for the purposes of FRS 13
disclosure requirements.
It is, and has been throughout the year under review, the Group's policy that no
trading in financial instruments shall be undertaken.
The main risks arising from the Group's financial instruments are interest rate
risk and liquidity risk. The Directors review and agree policies for managing
each of these risks and they are summarised below:
Interest Rate Risk:
At the year end none of the Group's borrowings were at fixed rates (2006: nil).
On 21 April 2004 the Company purchased through a Bank an interest rate cap of a
6% interest rate, on an amount of #5 million from 30 April 2004 to 30 April
2009, at a cost of #87,000. This cost has been capitalised and is being
amortised over the life of the interest rate cap.
Liquidity Risk:
As regards liquidity, the Group's policy has throughout the year been to ensure
continuity of funding. In order that this is achieved, the Group maintains
close control over future cash flows and regularly reviews medium and long-term
finance against those future cash flows.
On 3 May 2006 the Company signed a #25 million loan facility with IXIS Corporate
& Investment Bank S.A.("IXIS"). On 4 July 2006 the Company drew #9.25 million
to repay the Fortis Bank A and B Facilities and the Overdraft and complete the
acquisition of Solutions (Yorkshire) Limited. Following the disposal of the
Nightingale Nursing Home #800,000 was repaid in respect of the loan which
reduced the facility to #24.2 million.
Repayment of Facility: The Company must repay the loan in the following amounts
on the following dates:
Repayment Date Amount #
30 October 2009 #211,250
30 April 2010 #211,250
30 October 2010 #211,250
30 April 2011 #211,250
30 October 2011 #211,250
30 April 2012 #211,250
30 October 2012 #211,250
30 April 2013 #6,971,250
Total #8,450,000
On each of the above repayment dates, the Company must repay the loan in the
amount of 2.5% of the aggregate of all amounts from time to time advanced under
the loan and, on the final repayment date, the Company must repay in full all
amounts outstanding under the loan. Based on #8,450,000 loan drawn at 31 March
2007, #211,250 is repayable on each of the above repayment dates with a final
repayment of #6,971,250 on 30 April 2013.
Further drawings on the #24.2m IXIS facility are subject to IXIS being satisfied
in all respects with the proposed acquisition to be funded and that the loan
does not exceed 70% of the value of the Group's charged properties.
The interest rate is 1.25% over LIBOR falling to 1.125% over LIBOR if net
interest cover is between 2.5 and 2.75 times EBITDA and 1% over LIBOR if net
interest cover is over 2.75 times EBITDA.
There are no further repayments on the IXIS loan facility until 30 October 2009.
19. Deferred taxation
Year to Year to
31 Mar 07 31 Mar 06
# #
At 1 April 2006 51,000 -
(Charge)/credit profit and loss account (7,000) 51,000
At 31 March 2007 44,000 51,000
The deferred taxation asset included in debtors (note 14) represents excess of
capital allowances over depreciation.
The Directors have made no provision in the Financial Statements for deferred
tax on the revaluation of the Group's intangible assets and freehold properties
as these assets are held for continuing use in the business. The amounts
un-provided at the end of each year were as follows:
Year to Year to
31 Mar 07 31 Mar 06
# #
Revaluation of intangible assets and freehold
properties 1,446,000 824,792
20. Contingencies
The Company has agreed to issue a further 250,000 ordinary shares of 5 pence
each at price of 40 pence per share to the shareholders of Newsham House Limited
as deferred consideration if planning permission is granted in respect of
further development.
21. Related party transactions
During the 3 months ended 30 June 2007, Solutions (Yorkshire) Limited, a company
owned by Mrs P L Jackson, a Director, provided goods and services to the Group
for a consideration of #Nil (2006: #10,282).
During the year ended 31 March 2007 the Company paid #12,000 to Mrs P L Jackson,
a Director, for the rent of the Company's head office (2006: #12,000).
During the year ended 31 March 2007, Energy Telecom Limited, a company of which
W J Davies is a director and shareholder and R J Ellert is a director and
shareholder, provided telecommunications services to the Group for a
consideration of #10,360 (2006: #5,645).
On 4 July 2006 the Company acquired all the issued share capital of Solutions
(Yorkshire) Limited owner and operator of a 40 bed nursing home in Leeds from
Mrs P L Jackson, a Director, for #1,989,821. At 31 March 2007 #84,821 was
outstanding in respect of deferred consideration.
All the above transactions were undertaken on an arms length basis.
22. Share capital
Authorised share capital:
Year to Year to
31 Mar 07 31 Mar 06
# #
15,000,000 Ordinary shares of #0.05 each 750,000 750,000
45,000,000 Deferred non equity shares of #0.05 each 2,250,000 2,250,000
3,000,000 3,000,000
Allotted, called up and fully paid:
31 Mar 07 31 Mar 06
No. # No. #
Ordinary shares of #0.05 each 9,885,694 494,285 9,885,694 494,285
Deferred non equity shares of
#0.05 each 20,550,798 1,027,540 20,550,798 1,027,540
30,436,492 1,521,825 30,436,492 1,521,825
The deferred shares, issued in January 2001, are considered to be non equity
shares since they carry no voting rights, no rights to receive a dividend and
have no value in a winding up unless ordinary share valuation exceeds #1,000 per
share. Whilst they are stated in the financial statements at their nominal
value, they have no commercial value.
23. Reserves
Share
Revaluation Premium Profit and
Reserve Account Loss Account
# # #
At 1 April 2006 2,750,906 3,712,396 68,579
Dividends - - (98,857)
Transfer to profit and loss (80,000) - 80,000
Movement for the year 1,943,000 - 133,717
At 31 March 2007 4,613,906 3,712,396 183,439
24. Reconciliation of movements in shareholders' funds
Year to Year to
31 Mar 07 31 Mar 06
# #
Profit on ordinary activities after taxation 133,717 130,309
Dividends (98,857) -
New equity share capital subscribed - 50,000
Premium on new share capital subscribed - 350,000
Increase in revaluation reserve 1,943,000 1,422,000
Net addition to funds 1,977,860 1,952,309
Opening shareholders' funds 8,053,706 6,101,397
Closing shareholders' funds 10,031,566 8,053,706
Included within shareholders' funds is #1,027,540 (2006: #1,027,540) relating to
non-equity interests.
25. Dividends
Year to Year to
31 Mar 07 31 Mar 06
# #
Interim dividend paid of 1p per ordinary share 98,857 -
26. Notes to statement of cash flows
Reconciliation of operating profit to net cash inflow from operating activities
Year to Year to
31 Mar 07 31 Mar 06
# #
Operating profit 667,975 541,914
Amortisation 103,578 19,087
Depreciation 18,024 22,106
Amortisation finance costs 119,137 -
Profit on sale of fixed assets (700) -
Decrease/(increase) in debtors 99,657 (284,680)
Increase in creditors 120,154 38,267
Exceptional item - loss on sale/revaluation of fixed - 15,100
assets
Net cash inflow from operating activities 1,127,825 351,794
Year to Year to
31 Mar 07 31 Mar 06
# #
Acquisitions
Purchase of subsidiary undertaking (1,905,000) -
Acquisition costs (110,231) -
Cash acquired with subsidiary undertaking 298,988 -
Loans acquired with subsidiary undertaking (753,007) -
(2,469,250) -
Reconciliation of net cash flow to movement in net debt
Year to Year to
31 Mar 07 31 Mar 06
# #
Increase in cash in the period 1,020,926 64,149
New secured loans (2,341,981) -
Repayment of amounts borrowed - 278,972
Change in net debt (1,321,055) 343,121
Net debt at 1 April 2006 (6,675,211) (7,018,332)
Net debt at 31 March 2007 (7,996,266) (6,675,211)
Analysis of changes in net debt
At Cash Flows Other non At
1 Apr 06 cash changes 31 Mar 07
# # # #
Net cash:
Cash in hand and at bank 8,313 332,221 - 340,534
Overdrafts (688,705) 688,705 - -
Debt:
Bank loans due after more (5,644,819) (2,700,000) 8,019 (8,336,800)
than one year
Bank loans due within (350,000) 350,000 - -
one year
Net debt (6,675,211) (1,329,074) 8,019 (7,996,266)
27. Net asset value per share
The calculation of 101.5p (2006: 81.5p) net asset value per share at 31 March
2007 is based on net assets of #10,031,566 (2006: #8,053,706) divided by the
9,885,694 ordinary shares in issue at that date (2006: 9,885,694).
28. Ultimate controlling party
W J Davies, by virtue of his 50.02% shareholding, controls the Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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