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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Inland Homes Plc | LSE:INL | London | Ordinary Share | GB00B1TR0310 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 8.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMINL
RNS Number : 6698A
Inland Homes PLC
28 March 2017
28 March 2017
Inland Homes Plc
(the 'Company' or the 'Group')
Interim results for the six months ended 31 December 2016
Positive momentum and strategic repositioning ahead of key completions in second half
Inland Homes Plc (AIM: INL), the leading brownfield regeneration specialist and housebuilder with a focus on the South and South East of England, today announces its results for the six months to 31 December 2016.
Highlights
Delivery of NAV growth and dividend rise reflecting confidence
Hot Features
Premium
31 Dec 31 Dec
2016 2015
EPRA NAV 87.05p 80.64p
Adjusted EPRA NAV 92.03p 84.38p
EPRA performance measures show unrealised value
within the Group's land bank
-- 10.3% increase in net asset value to GBP118 million (2015: GBP107 million)
-- Group revenue for the period of GBP32.6 million (2015: GBP55.1 million) and PBT GBP4.4 million (2015: GBP21.4 million), with the majority of profits due to be realised in the second half of the financial year due to the timing of the construction of Inland's sites and of planned land sales
-- Annualised rental income of GBP2.3 million
-- Transformed net current asset position with 98% (2015: 20%) of debt falling due after more than one year and at substantially lower rates of interest
-- 25% rise in interim dividend to 0.5 pence (2015: 0.4 pence) per share, reflecting the Board's confidence in the expected performance in the second half of the current financial year
Operational and strategic momentum positioning the business for future growth
-- Expansion of land bank to a record 7,151 plots (2015: 5,672), including 2,440 plots with planning consent (2015: 1,146)
-- Development milestones achieved across multiple schemes, setting clear path for the future profit generation:
o Phase one of Meridian Waterside, Southampton, 32 of 54 homes exchanged or reserved, reflecting sales rate of 1.4 units per week at values ahead of budget
o Full planning permission received for 239 homes at Lily's Walk, the major regeneration scheme in High Wycombe town centre with a GDV of GBP75 million
o Resolution to grant consent on 457 residential units and 64,000 sq ft of commercial space at Chapel Riverside in a joint venture with Southampton City Council
-- Sales of homes steady at 101 homes (2015: 105) with forward sales remaining robust with a current forward order book of GBP31.8 million (2015: GBP20.9 million)
-- Sale of 177 residential plots generating a profit of GBP6.3 million (including GBP6.0 million disclosed as a gain on the sale of a subsidiary company in the Group Income Statement) (2015: GBP6.3 million)
-- Gross margin from the sale of private homes at 20.0% (2015: 24.1%), with the previously reported contractor failure and the resulting final cost of homes accounting for the reduction from the same period last year
-- Investment in Group's in-house building operations responsible for delivery of 226 units of the 389 units currently under construction
Housing market remains strong in the areas that the Company operates
-- Demand remains strong from buyers for our homes in South and South East England with sales rates being sustained at good levels
-- Appetite for land with planning consent remains buoyant
-- Government initiatives, including the recent Housing White Paper, are contributing to strengthening confidence among funders and housebuilders to take on higher density projects, and demonstrate the ongoing relevance of Inland's expertise at navigating challenging plots of land through the planning system
Stephen Wicks, Chief Executive at Inland Homes commented:
"These results reflect another period of strategic growth for the business which has seen us meet a number of important operational and development milestones. Our business is in robust shape with demand remaining high for our homes, with forward sales growing substantially on a like for like basis, and for the expertise that the Company offers to joint venture parties, as proven by the recently received resolution to grant planning permission for 457 units at Chapel Riverside in Southampton, our first jv with a local authority. The investment in our in-house building operations is starting to show good results and will ensure certainty of delivery as well improved margins on home sales. This repositioning, combined with key completions due in the second half of the financial year means that we remain positive on the outcome for the full year."
Enquiries:
Inland Homes plc: Tel: +44 (0) 1494 762450
Stephen Wicks, Chief Executive
Nishith Malde, Finance Director
Paul Brett, Land Director
Stifel Nicolaus Europe Limited (Nominated Adviser): Tel: +44 (0) 20 7710
7600
David Arch
FTI Consulting: Tel: +44 (0)20 3727
1000
Dido Laurimore
Claire Turvey
Polly Warrack
Notes to Editors:
Incorporated in the UK in 2005, Inland Homes plc is an AIM listed specialist housebuilder and brownfield developer, dedicated to achieving excellence in sustainability and design.
Inland Homes acquires brownfield land in the South and South-East of England principally for residentially led development schemes. The business then enhances the land value by obtaining planning permission, before building open market and affordable homes or selling surplus consented land to other developers to generate cash.
The Company is committed to extensive public and community consultation in order to ensure that, where possible, local community needs and objectives are met.
Inland's aim is to create sustainable communities and homes which set a benchmark for all future developments in the South of England. The Company is always looking for brownfield sites without planning permission for future development.
For further information, please visit the Inland Homes website at www.inlandhomes.co.uk.
Chairman's statement
I am pleased to provide an overview of the results for the half year ended 31 December 2016 and also to outline how we are well-positioned to continue delivering value for our shareholders.
The residential property market during the second half of 2016 and the start of 2017 has remained buoyant in the lower cost but good quality end of the sector where we have positioned ourselves. The focus for Inland Homes during the half year has been:
-- To grow our in-house construction capabilities as our ambition to increase our housebuilding output continues to take shape
-- To increase the size of our land bank -- To increase the proportion of consented plots within our land bank.
As stated at the time of the full year results, we expect to realise the majority of our profits and revenue in the second half of the year, due to the timing on a number of our construction sites coupled with the completion of planned land sales. Demand for both completed units and consented land has remained robust throughout the period and into the start of 2017 and this, coupled with a strengthened balance sheet, means we remain positive on the outcome for the full year.
The Group's balance sheet has also been strengthened with net current assets having increased substantially due to the majority of our borrowings now falling due after more than one year.
OPERATIONAL HIGHLIGHTS
During the period, sales of new homes remained strong. The Group sold 101 homes (2015: 105) (including 14 for Housing Association equivalent units (2015: 12)) at an average sales price of GBP319,000 per private unit (2015: GBP325,000). Forward sales remain robust, with a current forward order book of GBP31.8 million (2015: GBP20.9 million). The Group also sold 177 residential plots generating a profit of GBP6.3 million (including GBP6.0 million disclosed as a gain on the sale of a subsidiary company in the Group Income Statement) (2015: GBP6.3 million).
A key highlight was the launch of the first phase of Meridian Waterside, one of our major regeneration schemes in Southampton which will deliver a total of 351 homes over the next few years. To date, we have either exchanged or reserved 32 of the 54 units in the first phase, reflecting a healthy sales rate of 1.4 units per week and at values ahead of budget.
As previously announced, Lily's Walk, the major regeneration scheme in High Wycombe town centre with a gross development value of approximately GBP75 million, now has full planning consent for the construction of 239 homes. I am pleased to report that we have reached terms with our partners to enable us to commence the development of this site as part of our housebuilding programme. Construction will commence shortly, with an "off plan" sales launch for the first phase anticipated in July 2017.
A resolution to grant planning consent has also been received for 457 homes together with 64,000 sq ft of commercial space at Chapel Riverside, Southampton, in our joint venture with Southampton City Council.
At Wilton Park, our flagship development of over 100 acres in Beaconsfield, Buckinghamshire, we have completed the first section of the new estate road. Negotiations continue with the local authority on the final details of our planning application, which we expect to submit shortly, for the development of more than 300 homes.
In order to further increase levels of certainty on delivery, whilst simultaneously reducing construction costs, we have invested heavily in our in-house building operations and, of the 389 units across nine sites that the Group currently has under construction, 226 will be delivered by our in-house construction team rather than by using main contractors.
FINANCIAL HIGHLIGHTS
Revenue for the Group was GBP32.6 million (2015: GBP55.1 million) including GBP27.5 million (2015: GBP30.3 million) from the sale of 87 residential units (2015: 93).
The gross margin from the sale of residential units reduced to 20.0% (2015: 24.1%), reflecting the final cost of homes that had to be completed after a contractor failure. Going forward, the Board is confident that improved margins will be achieved as our in-house building operations continue to gather momentum and produce tangible results.
The EPRA net asset value and the adjusted EPRA net asset value of the Group at 31 December 2016 were 87.05p (2015: 80.64p) and 92.03p (2015: 84.38p) per ordinary share respectively and have been determined as follows:
As at 31 December 2016 As at 31 December 2015
-------------------------- -------------------------------------------- --------------------------------------------
EPRA Adjusted EPRA* EPRA Adjusted EPRA*
-------------------------- --------------------- --------------------- --------------------- ---------------------
Shares in issue (000) 201,972 201,972 201,779 201,779
-------- ----------- -------- ----------- -------- ----------- -------- -----------
Dilutive effect of
options (000) 1,926 - 2,343 -
-------- ----------- -------- ----------- -------- ----------- -------- -----------
Dilutive effect of
deferred bonus shares
(000) 1,627 - 1,027 -
-------- ----------- -------- ----------- -------- ----------- -------- -----------
Dilutive effect of
Growth Shares (000) 8,000 - 6,000 -
-------- ----------- -------- ----------- -------- ----------- -------- -----------
213,525 201,972 211,149 201,779
-------------------------- -------- ----------- -------- ----------- -------- ----------- -------- -----------
Pence Pence Pence Pence
GBP000 per share GBP000 per share GBP000 per share GBP000 per share
-------- ----------- -------- ----------- -------- ----------- -------- -----------
Net asset value 117,989 55.26p 117,989 58.42p 107,066 50.71p 107,066 53.06p
-------- ----------- -------- ----------- -------- ----------- -------- -----------
Unrealised value within
projects 67,091 31.42p 67,091 33.22p 63,200 29.93p 63,200 31.32p
-------- ----------- -------- ----------- -------- ----------- -------- -----------
Reverse deferred tax
liability on investment
property 787 0.37p 787 0.39p - - - -
-------- ----------- -------- ----------- -------- ----------- -------- -----------
EPRA net asset value 185,867 87.05p 185,867 92.03p 170,266 80.64p 170,266 84.38p
-------- ----------- -------- ----------- -------- ----------- -------- -----------
Deferred tax on uplift
at 19% (5.97)p (6.31)p (5.69)p (5.95)p
-------- ----------- -------- ----------- -------- ----------- -------- -----------
EPRA net asset value
after deferred tax 81.08p 85.72p 74.95p 78.43p
-------------------------- -------- ----------- -------- ----------- -------- ----------- -------- -----------
*EPRA NAV adjusted to exclude the dilutive effect of the options, deferred bonus shares and Growth Shares.
Reflecting our confidence in the performance expected in the second half of the current financial year, the Board has increased the interim dividend by 25% to 0.5p (2015: 0.4p) per share. The dividend will be paid on 23 June 2017 to shareholders on the register at the close of business on 2 June 2017. The ex-dividend date is 1 June 2017.
Our investment in skilled and experienced staff continues to grow and remains a priority as we further invest in the Group's housebuilding activities. This has resulted in an increase in overheads to GBP4 million for the six months ended 31 December 2016 (2015: GBP3.6 million). As noted above, we expect that this will enable us to benefit from a higher margin on our housebuilding activities going forward.
The gross rental income from commercial and residential assets increased to GBP1.2 million (2015: GBP0.9 million), of which GBP509,000 was derived from the existing residential portfolio at Wilton Park in Beaconsfield. The Group's rental income is anticipated to increase further, with annualised income currently running at the rate of GBP2.3 million.
The Group's net current assets have been significantly improved with 98% (2015: 20%) of our debt falling due after more than one year. In achieving this transformation, the Group has managed to secure debt at substantially lower rates of interest than previously. During the period we refinanced the Wilton Park site with a five year facility at a significantly lower interest rate.
LAND AND PLANNING
There has been a strong focus on securing further strategic land options during the period. A considerable amount of success has been achieved in this area with a total of 19 sites under option where the potential exists for approximately 2,100 plots. The current land bank remains at an all-time high and is set out below:
Plots with planning
Plots without consent or resolutions
planning to grant planning Total
consent consent plots
--------------------------------------- -------------- ------------------------ -------
Owned under development - 346 346
Owned or contracted 842 829 1,671
Managed or held within joint ventures
under development - 43 43
Managed or held within joint ventures 1,325 1,222 2,547
Managed or held within joint ventures
terms agreed 250 - 250
Land controlled 200 - 200
Strategic land controlled 1,994 - 1,994
Strategic land terms agreed 100 - 100
Total 4,711 2,440 7,151
--------------------------------------- -------------- ------------------------ -------
We currently have planning applications submitted for 866 plots across eight sites, with positive decisions expected on 411 of those by the end of June 2017. We are in pre-application discussions with planning authorities on a further 1,344 plots across five sites where applications for 424 plots will be submitted shortly.
JOINT VENTURES
During the period we entered into a 50/50 joint venture with The Anderson Group to develop 43 homes at Gardiners Park, Basildon, Essex. This is the first phase of potentially a much larger project where Inland already has some freehold and leasehold interests.
On 23 March 2017, the joint venture with land owners on our Garston, Hertfordshire project gained a resolution to grant consent for 100 homes and construction is expected to commence in the new financial year.
As recently announced, a resolution to grant consent has also been achieved for 457 homes together with 64,000 sq ft of commercial space at Chapel Riverside, Southampton, in our joint venture with Southampton City Council, with pre-construction archaeological works already underway. Collaborating with local authorities is a strategic priority for us, enabling the regeneration of brownfield land owned by local authorities to meet the shortage in housing needs.
A masterplan is being prepared for approximately 1,900 homes on 25 acres of which we own 13 acres in our major joint venture with a financial partner on the former Tesco headquarters at Cheshunt, Hertfordshire. Further land is being assembled at this location and our masterplan is being prepared in collaboration with the local authority.
INVESTMENT IN TROY HOMES
At 31 December 2016, our investment in and loans to our associate company, Troy Homes Limited (Troy), amounted to GBP2.0 million (2015: GBP0.8 million) after deducting the Group's share of losses. The Group increased its commitment to invest in the share capital of Troy to GBP1.5 million, of which GBP250,000 has been called up. The Group has also increased its commitment to provide loan notes to GBP3.0 million of which GBP2.0 million was drawn down at 31 December 2016. There was a debtor of GBP2.6 million (2015: GBPnil) outstanding at 31 December 2016 in relation to two sites which were sold to Troy during the year ended 30 June 2016. Troy currently has 28 units under construction across three sites and a further 82 plots across seven sites in its land bank.
OUTLOOK
Against a backdrop of a slowing prime residential market in London, demand remains strong for our lower cost homes in outer London and Home Counties locations, with sales rates being sustained at good levels. The recent housing White Paper demonstrated the Government's commitment to meeting the demand for new homes and Inland is well positioned to be a beneficiary of the proposed new measures, from expedited planning consents through to the commitment for more building on brownfield land and the boost from modular construction.
Furthermore, the difficulty of getting onto the housing ladder remains acute and with around 45% of our private sales during the period utilising the "Help to Buy" scheme, we continue to benefit from the market for homes in our price point.
The demand for land with planning consent in our areas of operation continues to be strong, with an increasing level of activity being seen from Housing Associations in particular.
Our record land bank at the period end of 7,151 plots is a healthy combination of owned and joint ventured consented and unconsented land and we are confident that our specialist and proven planning capabilities will deliver a record number of consented plots during 2017.
The business has both a strong pipeline of land and a growing development programme, which will only accelerate as our in-house capabilities mature and, as such, we believe we are well placed to deliver shareholder value.
Terry Roydon
Chairman
Group income statement
for the six months ended 31 December 2016
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
-------------------------------------- ----- ------------------------ ---------------------- ----------------
Revenue 32,569 55,148 101,910
Cost of sales (25,707) (40,556) (72,329)
-------------------------------------- ----- ------------------------ ---------------------- ----------------
Gross profit 6 6,862 14,592 29,581
Administrative expenses (4,045) (3,559) (6,297)
Gain on sale of subsidiary 6,021 - -
Profit on sale of PPE - - 9
Provision for doubtful debt - - (1,106)
Revaluation of investment properties (33) 13,969 18,015
-------------------------------------- ----- ------------------------ ---------------------- ----------------
Operating profit 8,805 25,002 40,202
Finance cost - interest expense (4,349) (3,641) (7,425)
Finance income - interest receivable
and similar income 143 96 477
-------------------------------------- ----- ------------------------ ---------------------- ----------------
Profit before tax and share of
profits from associates and joint
ventures 4,599 21,457 33,254
Share of loss of associates (113) - (138)
Share of loss of joint ventures (121) - (232)
-------------------------------------- ----- ------------------------ ---------------------- ----------------
Profit before tax 4,365 21,457 32,884
Income tax 7 (915) (1,486) (3,543)
-------------------------------------- ----- ------------------------ ---------------------- ----------------
Total profit and comprehensive
income for the period 3,450 19,971 29,341
-------------------------------------- ----- ------------------------ ---------------------- ----------------
Attributable to:
- Shareholders of the Company 3,450 20,289 28,742
- Non-controlling interests - (318) 599
-------------------------------------- ----- ------------------------ ---------------------- ----------------
Earnings per share
- basic earnings per share in pence 8 1.71p 10.04p 14.23p
- diluted earnings per share in
pence 8 1.62p 9.59p 13.47p
-------------------------------------- ----- ------------------------ ---------------------- ----------------
Group statement of financial position
at 31 December 2016
As at 31 As at 31 As at 30
December December June
2016 2015 2016
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
--------------------------------- ----- ------------------------------ -------------------------- ----------------
ASSETS
Non-current assets
Investment properties 9 52,076 48,093 51,705
Property, plant and equipment 563 429 480
Investment in associate 10 - 250 113
Loans to associate due in more
than
one year 12 2,027 500 894
Investment in joint ventures 10 1,156 1,722 1,216
Loans to joint ventures due in
more
than one year 12 - 5,580 -
Receivables due in more than one
year 12 55 55 55
Deferred tax 11 620 42 338
--------------------------------- ----- ------------------------------ -------------------------- ----------------
Total non-current assets 56,497 56,671 54,801
--------------------------------- ----- ------------------------------ -------------------------- ----------------
Current assets
Inventories 145,946 129,711 146,825
Trade and other receivables 12 14,695 7,364 6,816
Amounts due from associate 12 2,600 - 3,372
Amounts due from joint ventures 12 18,880 - 10,103
Listed investments carried at
fair
value through profit and loss 1 1 1
Cash and cash equivalents 17,576 16,617 16,723
--------------------------------- ----- ------------------------------ -------------------------- ----------------
Total current assets 199,698 153,693 183,840
--------------------------------- ----- ------------------------------ -------------------------- ----------------
Total assets 256,195 210,364 238,641 --------------------------------- ----- ------------------------------ -------------------------- ---------------- EQUITY Capital and reserves attributable to the Company's equity holders Share capital 13 20,360 20,281 20,281 Share premium account 34,328 34,033 34,033 Employee Benefit Trust (1,067) (713) (713) Special reserve 6,059 6,059 6,059 Retained earnings 58,309 47,406 56,372 Total equity attributable to shareholders of the Company 117,989 107,066 116,032 --------------------------------- ----- ------------------------------ -------------------------- ---------------- Non-controlling interests 14 - (46) - --------------------------------- ----- ------------------------------ -------------------------- ---------------- Total equity 117,989 107,020 116,032 --------------------------------- ----- ------------------------------ -------------------------- ---------------- LIABILITIES Current liabilities Bank loans and overdrafts 1,793 25,900 19,010 Other loans - 31,104 21,135 Trade and other payables 15 15,151 9,394 18,656 Corporation tax 15 5,004 5,607 7,618 Other financial liabilities 16 22,115 4,157 22,369 --------------------------------- ----- ------------------------------ -------------------------- ---------------- Total current liabilities 44,063 76,162 88,788 --------------------------------- ----- ------------------------------ -------------------------- ---------------- Non-current liabilities Zero dividend preference shares 16 16,745 14,163 14,607 Other financial liabilities 16 - 13,019 - Bank loans due in more than one year 60,172 - 16,535 Other loans due in more than one year 17,226 - - Payables due in more than one year 15 - - 2,679 --------------------------------- ----- ------------------------------ -------------------------- ---------------- Total non-current liabilities 94,143 27,182 33,821 --------------------------------- ----- ------------------------------ -------------------------- ---------------- Total equity and liabilities 256,195 210,364 238,641 --------------------------------- ----- ------------------------------ -------------------------- ----------------
Group statement of changes in equity
for the six months ended 31 December 2016
Employee Non-
Share Share benefit Special Retained controlling Total
capital premium trust reserve earnings Total interests Equity
reserve
GBP0 GBP0 GBP0 GBP0 GBP0 GBP0 GBP0 GBP0
----------------- -------------- --------------- --------------- --------------- -------------- -------- -------------- ---------------
At 30 June 2015
(audited) 20,281 34,033 (382) 6,059 28,806 88,797 272 89,069
Share based
payment - - - - 331 331 - 331
Dividend payment - - - - (2,020) (2,020) - (2,020)
Purchase of own
shares
for deferred
bonus
plan - - (331) - - (331) - (331)
----------------- -------------- --------------- --------------- --------------- -------------- -------- -------------- ---------------
Transactions
with
owners - - (331) - (1,689) (2,020) - (2,020)
Total
comprehensive
income - - - - 20,289 20,289 (318) 19,971
----------------- -------------- --------------- --------------- --------------- -------------- -------- -------------- ---------------
Total changes in
equity - - (331) - 18,600 18,269 (318) 17,951
----------------- -------------- --------------- --------------- --------------- -------------- -------- -------------- ---------------
At 31 December
2015
(unaudited) 20,281 34,033 (713) 6,059 47,406 107,066 (46) 107,020
----------------- -------------- --------------- --------------- --------------- -------------- -------- -------------- ---------------
Share-based
payment - - - - 334 334 - 334
Dividend payment - - - - (812) (812) - (812)
Transactions
with
owners - - - - (478) (478) - (478)
Non-controlling
interests
acquired during
the
period - - - - 871 871 (871) -
Surplus arising
on
acquisition of
non-controlling
interests - - - - 120 120 - 120
Total
comprehensive
income - - - - 8,453 8,453 917 9,370
----------------- -------------- --------------- --------------- --------------- -------------- -------- -------------- ---------------
Total changes in
equity - - - - 8,966 8,966 46 9,012
----------------- -------------- --------------- --------------- --------------- -------------- -------- -------------- ---------------
At 30 June 2016
(audited) 20,281 34,033 (713) 6,059 56,372 116,032 - 116,032
----------------- -------------- --------------- --------------- --------------- -------------- -------- -------------- ---------------
Share based
payment - - - - 319 319 - 319
Dividend payment - - - - (1,832) (1,832) - (1,832)
Issue of
ordinary
shares 79 295 - - - 374 - 374
Purchase of own
shares
for deferred
bonus
plan - - (354) - - (354) - (354)
----------------- -------------- --------------- --------------- --------------- -------------- -------- -------------- ---------------
Transactions
with
owners 79 295 (354) - (1,513) (1,493) - (1,493)
Total
comprehensive
income - - - - 3,450 3,450 - 3,450
----------------- -------------- --------------- --------------- --------------- -------------- -------- -------------- ---------------
Total changes in
equity 79 295 (354) - 1,937 1,957 - 1,957
----------------- -------------- --------------- --------------- --------------- -------------- -------- -------------- --------------- At 31 December 2016 (unaudited) 20,360 34,328 (1,067) 6,059 58,309 117,989 - 117,989 ----------------- -------------- --------------- --------------- --------------- -------------- -------- -------------- ---------------
Group statement of cash flows
for the six months ended 31 December 2016
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
------------------------ ----- ---------------------------- -------------------------- ---------------------------
Cash flows from
operating activities
Profit for the period
before tax 4,365 21,457 32,884
Adjustments for:
- depreciation 112 87 179
- profit on disposal of
property,
plant and equipment - - (9)
- share-based
compensation 319 331 665
- revaluation of
investment properties 33 (13,969) (18,015)
- gain on disposal of (6,020) - -
subsidiary
- interest expense 4,349 3,641 7,425
- interest and similar
income (143) (96) (477)
- share of loss of
joint ventures 121 - 232
- share of loss of
associate 113 - 138
- corporation tax
payments (3,869) (1,719) (2,158)
Changes in working
capital:
- increase in
inventories (15, 680) (8,680) (16,797)
- decrease in trade and
other receivables 8,927 731 669
- decrease in trade and
other payables (9,688) (11,450) (2,781)
------------------------ ----- ---------------------------- -------------------------- ---------------------------
Net cash
(outflow)/inflow from
operating activities (17,061) (9,667) 1,955
------------------------ ----- ---------------------------- -------------------------- ---------------------------
Cash flow from
investing activities
Purchases of property,
plant and
equipment (168) (184) (329)
Sale of property, plant
and equipment - - 12
Purchases of investment
property 9 (432) (124) (1,021)
Acquisition of
subsidiaries - - (804)
Loans provided to
associate 12 (1,087) (500) (4,266)
Investment in associate 10 - (250) (251)
Amounts repaid by
associate 12 772 - -
Proceeds from disposal 5,750 - -
of subsidiary
Loans provided to joint
ventures 12 (8,680) (2,334) (5,810)
Investment in joint
ventures 10 (61) (234) (202)
Net cash outflow from
investing
activities (3,906) (3,626) (12,671)
------------------------ ----- ---------------------------- -------------------------- ---------------------------
Cash flow from
financing activities
Interest paid (2,267) (3,614) (5,203)
Repayment of borrowings (8,713) (24,861) (28,417)
New loans 32,780 37,948 42,845
Net proceeds on issue 374 - -
of ordinary
shares
Equity dividends paid
to ordinary
shareholders - (609) (2,832)
Purchase of own shares
for deferred
bonus plan (354) (331) (331)
Net cash inflow from
financing
activities 21,820 8,533 6,062
------------------------ ----- ---------------------------- -------------------------- ---------------------------
Net increase/(decrease)
in cash
and cash equivalents 853 (4,760) (4,654)
Net cash and cash
equivalents at
beginning of period 16,723 21,377 21,377
------------------------ ----- ---------------------------- -------------------------- ---------------------------
Net cash and cash
equivalents at
the end of period 17,576 16,617 16,723
------------------------ ----- ---------------------------- -------------------------- ---------------------------
Notes to the half-yearly financial report
for the six months ended 31 December 2016
1. Nature of operations and general information
The principal activity of the Company and its subsidiaries (together called the Group) is to acquire residential and mixed use sites and seek planning consent for development. The Group also develops a number of plots for private sale.
Inland Homes plc is the Group's ultimate parent company. It is incorporated and domiciled in Great Britain. The address of Inland Homes plc's registered office, which is also its principal place of business, is Decimal Place, Chiltern Avenue, Amersham, Buckinghamshire HP6 5FG.
Inland Homes plc's shares are quoted on AIM, a market operated by the London Stock Exchange. This consolidated half-yearly financial report has been approved for issue by the Board of Directors on 27 March 2017.
The financial information set out in this half-yearly financial report does not constitute statutory accounts as defined in Sections 434(3) and 435(3) of the Companies Act 2006. The Group's statutory financial statements for the year ended 30 June 2016 have been filed with the Registrar of Companies and are available at www.inlandhomes.co.uk. The auditor's report on those financial statements was unqualified and did not contain any statement under Section 498(2) or Section 498(3) of the Companies Act 2006.
2. Basis of preparation
This consolidated half-yearly financial report has been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting.
The consolidated half-yearly financial report should be read in conjunction with the annual financial statements for the year ended 30 June 2016, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.
3. Accounting policies
The accounting policies applied are consistent with those of the annual financial statements for the year ended 30 June 2016.
4. Going concern
The Board has reviewed the performance for the current period and forecasts for the future period together with the available financial resources. It has also considered the risks and uncertainties, including credit risk and liquidity. The Directors have considered the present economic climate, the state of the housing market and the current demand for land with planning consent. The Group has continued to see demand for consented land in the areas in which it operates. The Group has significant forward sales of residential units and is in discussions for the sale of some of the land within its projects and expects to make sufficient disposals in the foreseeable future to ensure it has adequate working capital for its requirements. The Directors are satisfied that the Group will generate sufficient cash to meet its liabilities as and when they fall due for a period of 12 months from signing this half-yearly financial report. The Directors therefore consider it appropriate to prepare the financial statements on the going concern basis.
5. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historic experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below.
(a) Valuation of inventories
In applying the Group's accounting policy for the valuation of inventories the Directors are required to assess the expected selling price and costs to sell each of the plots or units that constitute the Group's land bank and work in progress. Cost includes the cost of acquisition of sites, the cost of infrastructure and construction works, and legal and professional fees incurred during development prior to sale. Estimation of the selling price is subject to significant inherent uncertainties, in particular the prediction of future trends in the market value of land.
Whilst the Directors exercise due care and attention to make reasonable estimates, taking into account all available information in estimating the future selling price, the estimates will, in all likelihood, differ from the actual selling prices achieved in future periods and these differences may, in certain circumstances, be very significant. The critical judgement in respect of receipt of planning consent (see below) further increases the level of estimation uncertainty in this area.
(b) Income taxes
The Group recognises tax/deferred tax assets and liabilities for anticipated tax based on estimates of when the tax/deferred tax will be paid or recovered. When the final outcome of these matters is different from the amounts initially recorded, such differences impact the period in which the determination is made. Critical accounting estimates relate to the profit forecasts used to determine the extent to which deferred tax assets are recognised from available losses and the period over which they are estimated.
(c) Fair value of derivatives and other financial instruments
The fair value of instruments that are not traded in an active market is determined by using valuation techniques. The Group uses its judgement to select a variety of methods and makes assumptions that are mainly based on market conditions existing.
(d) Fair value of investment properties
The fair value of materially completed investment property is determined by the Directors using the open market value of existing use method, subject to current leases and restrictions, as this has been assessed currently as the best use of these assets. Investment properties awaiting construction are valued by the Directors using an appraisal system; critical accounting estimates relate to the forecasts prepared in order to assess the carrying value.
(e) Discounting on deferred consideration of inventories and acquisition of shares
The Group discounts deferred consideration using the discounted cash flow method; the Group considers that the cost of debt capital is the most appropriate discount rate and this is a significant estimate.
Critical judgements in applying the entity's accounting policies
Inventories
The Group values inventories at the lower of cost and net realisable value. The net realisable value is based on the judgement of the probability that planning consent will be granted for each site. The Group believes that, based on the Directors' experience, planning consent will be given. If planning consent was not achieved, then a provision may be required against inventories.
Consolidation of Drayton Garden Village Limited (DGVL)
In December 2008, the Group entered into an Option and Development Services Agreement (the Agreement) with DGVL. This company was consolidated in prior years as the Directors had considered the requirements of IFRS 10 and believed the Group had control over DGVL from the date it entered into this agreement even though it did not own the share capital. During the year ended 30 June 2016, the Group acquired the share capital of DGVL.
Consolidation of Bucks Developments Ltd (BDL) and Wilton Park Developments Ltd (WPDL)
In December 2014, the Group entered into an Option with WPDL. These companies were consolidated in the prior year as the Directors had considered the requirements of IFRS 10 and believed the Group had control over BDL & WPDL from the date it entered into this agreement even though it did not own the share capital. During the year ended 30 June 2016, the Group acquired the share capital of BDL. BDL wholly owns the share capital of WPDL.
Investment in joint ventures
The Group's joint venture investments in Aston Clinton S.A.R.L and Project Helix Holdco Limited (Project Helix) are not in equal share (the Group owns 10% of the share capital of Aston Clinton S.A.R.L. and 20% of the share capital of Project Helix) however the Group has joint control over the activities of the companies with the other parties due to its entitlement to veto any decisions. In addition, the Group and the other parties to the agreements only have rights to the net assets of these companies through the terms of the contractual arrangements. Within Aston Clinton S.A.R.L the Group is entitled to 50% of the net assets and within Project Helix there is a ratchet mechanism which depends on the amount of profit each development contributes to the joint venture. Therefore, these entities are classified as joint ventures and are accounted for using the equity method.
The Group's joint venture investments in Bucknalls Developments Limited (Bucknalls), Gardiners Park LLP (Gardiners Park) and Cheshunt Lakeside Developments Limited (Cheshunt) are 50/50 joint ventures and the Group has joint control over the activities of the companies with the other parties and has an entitlement to veto any decisions. The Group and the other parties to the agreements only have rights to the net assets of these companies through the terms of the contractual arrangements. Within these joint ventures the Group is entitled to 50% of the net assets. Therefore, these entities are classified as joint ventures and are accounted for using the equity method.
Investment in associates
The Group has a 25% investment in Troy Homes Limited. The investment is classified as an associate and is accounted for using the equity method.
6. Income and segmental analysis
The Group generates income by way of land sales. It also generates income from housebuilding, contracting, rental income, hotel income, investments and investment properties. These operating segments are monitored and strategic decisions are made on the basis of segment operating results. The segmental analysis of operations is as follows:
Segmental analysis by activity
Six months
ended 31 Land House Contract Rental Hotel Investment
December 2015 sales building income income income Investments properties Other
(unaudited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Total
--------- --------- --------- ------- -------- ------------- ------------ --------- ---------
Revenue 21,611 30,254 2,220 892 - - - 171 55,148
Cost of sales (15,312) (22,966) (2,115) (163) - - - - (40,556)
---------------- --------- --------- --------- ------- -------- ------------- ------------ --------- ---------
Gross profit 6,299 7,288 105 729 - - - 171 14,592
Administrative
expenses - - - - - - - (3,559) (3,559)
Revaluation of
investment
properties - - - - - - 13,969 - 13,969
---------------- --------- --------- --------- ------- -------- ------------- ------------ --------- ---------
Operating
profit/(loss) 6,299 7,288 105 729 - - 13,969 (3,388) 25,002
Finance
(cost)/income (2,774) (311) - - - - (533) 73 (3,545)
---------------- --------- --------- --------- ------- -------- ------------- ------------ --------- ---------
Profit/(loss)
before
tax and share
of profits
from associate
and joint
ventures 3,525 6,977 105 729 - - 13,436 (3,315) 21,457
Profit/(loss)
before
tax 3,525 6,977 105 729 - - 13,436 (3,315) 21,457
Income tax (731) (1,448) (22) (151) - - - 866 (1,486)
Total
profit/(loss)
for the 6
months 2,794 5,529 83 578 - - 13,436 (2,449) 19,971
---------------- --------- --------- --------- ------- -------- ------------- ------------ --------- ---------
Six months
ended 30 Land House Contract Rental Hotel Investment
June 2016 sales building income income income Investments properties Other
(unaudited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Total
---------------- --------- --------- --------- ------- -------- --------------- ------------ -------- ---------
Revenue 21,700 21,204 716 1,197 1,704 - - 241 46,762
Cost of sales (10,917) (17,237) (1,550) (245) (1,696) - - (128) (31,773)
---------------- --------- --------- --------- ------- -------- --------------- ------------ -------- ---------
Gross profit 10,783 3,967 (834) 952 8 - - 113 14,989
Administrative
expenses - - - - - - - (2,738) (2,738)
Profit on sale
of fixed
assets - - - - - - - 9 9
Provision for
doubtful
debt - - - - - - - (1,106) (1,106)
Revaluation of
investment
properties - - - - - - 4,046 - 4,046
---------------- --------- --------- --------- ------- -------- --------------- ------------ -------- ---------
Operating
profit/(loss) 10,783 3,967 (834) 952 8 - 4,046 (3,722) 15,200
Finance
(cost)/income (1,482) (935) - - - 392 (464) (914) (3,403)
---------------- --------- --------- --------- ------- -------- --------------- ------------ -------- ---------
Profit/(loss)
before
tax and share
of profits
from associate
and
joint ventures 9,301 3,032 (834) 952 8 392 3,582 (4,636) 11,797
Share of loss
of associate - - - - - (138) - - (138)
Share of loss
of joint
ventures - - - - - (232) - - (232)
Profit/(loss)
before
tax 9,301 3,032 (834) 952 8 22 3,582 (4,636) 11,427
Income tax (1,834) (554) 168 (185) (2) (4) (787) 1,141 (2,057)
Total
profit/(loss)
for the 6
months 7,467 2,478 (666) 767 6 18 2,795 (3,495) 9,370
---------------- --------- --------- --------- ------- -------- --------------- ------------ -------- ---------
Total
profit/(loss)
for year ended
30 June
2016 (audited) 10,261 8,007 (583) 1,345 6 18 16,231 (5,944) 29,341
---------------- --------- --------- --------- ------- -------- --------------- ------------ -------- ---------
Six months
ended 31 Land House Contract Rental Hotel Investment
December 2016 sales building income income income Investments properties Other
(unaudited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Total
---------------- --------- --------- --------- ------- -------- --------------- ------------ -------- ---------
Revenue 479 27,484 1,829 1,210 1,509 - - 58 32,569
Cost of sales (239) (21,983) (2,063) (136) (1,280) - - (6) (25,707)
---------------- --------- --------- --------- ------- -------- --------------- ------------ -------- ---------
Gross profit 240 5,501 (234) 1,074 229 - - 52 6,862
Administrative
expenses - - - - - - - (4,045) (4,045)
Gain on sale of
subsidiary 6,021 - - - - - - - 6,021
Revaluation of
investment
properties - - - - - - (33) - (33)
---------------- --------- --------- --------- ------- -------- --------------- ------------ -------- ---------
Operating
profit/(loss) 6,261 5,501 (234) 1,074 229 - (33) (3,993) 8,805
Finance
(cost)/income (2,426) (527) - - - 143 (708) (688) (4,206)
---------------- --------- --------- --------- ------- -------- --------------- ------------ -------- ---------
Profit/(loss)
before
tax and share
of profits
from associate
and
joint ventures 3,835 4,974 (234) 1,074 229 143 (741) (4,681) 4,599
Share of loss
of associate - - - - - (113) - - (113)
Share of loss
of joint
ventures - - - - - (121) - - (121)
Profit/(loss)
before
tax 3,835 4,974 (234) 1,074 229 (91) (741) (4,681) 4,365
Income tax (766) (995) 47 (215) (46) 18 148 894 (915)
Total
profit/(loss)
for the 6
months 3,069 3,979 (187) 859 183 (73) (593) (3,787) 3,450
---------------- --------- --------- --------- ------- -------- --------------- ------------ -------- ---------
House Investment
31 December 2015 Land building Contracting Hotel Investments properties Other
(unaudited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Total
ASSETS
Non-current
assets
Investment
properties - - - - - 48,093 - 48,093
Property, plant
and equipment - - - - - - 429 429
Investment in
associate - - - - 250 - - 250
Loans to
associate due
in more than
one year - - - - 500 - - 500
Investment in
joint ventures - - - - 1,722 - - 1,722
Loans to joint
ventures
due in more
than one year - - - - 5,580 - - 5,580
Receivables due
in more
than one year - 55 - - - - - 55
Deferred tax due
in more
than one year - - - - - - 42 42
Total
non-current
assets - 55 - - 8,052 48,093 471 56,671
----------------- --------- ----------- ------------------ -------- ---------------- ----------------- ------------ --------
Current assets
Inventories 107,218 22,493 - - - - - 129,711
Trade and other
receivables 1,447 254 276 - - 125 5,262 7,364
Listed
investments
carried
at fair value
through profit
and loss - - - - 1 - - 1
Cash and cash
equivalents - - - - - - 16,617 16,617
Total current
assets 108,665 22,747 276 - 1 125 21,879 153,693
----------------- --------- ----------- ------------------ -------- ---------------- ----------------- ------------ --------
Total assets 108,665 22,802 276 - 8,053 48,218 22,350 210,364
----------------- --------- ----------- ------------------ -------- ---------------- ----------------- ------------ --------
EQUITY
Capital and reserves attributable to the
Company's equity holders
Share capital - - - - - - 20,281 20,281
Share premium
account - - - - - - 34,033 34,033
Employee benefit
trust - - - - - - (713) (713)
Special reserve - - - - - - 6,059 6,059
Retained
earnings - - - - - - 47,406 47,406
Total equity
attributable
to shareholders
of the
Company - - - - - - 107,066 107,066
----------------- --------- ----------- ------------------ -------- ---------------- ----------------- ------------ --------
Non-controlling
interests - - - - - - (46) (46)
Total equity - - - - - - 107,020 107,020
----------------- --------- ----------- ------------------ -------- ---------------- ----------------- ------------ --------
LIABILITIES
Current
liabilities
Bank loans and
overdrafts - 9,921 - - - 15,979 - 25,900
Other loans 24,552 6,552 - - - - - 31,104
Trade and other
payables 2,149 2,527 1,116 - - 28 3,574 9,394
Corporation tax - - - - - - 5,607 5,607
Other financial
liabilities 4,157 - - - - - 4,157
Total current
liabilities 30,858 19,000 1,116 - - 16,007 9,181 76,162
----------------- --------- ----------- ------------------ -------- ---------------- ----------------- ------------ --------
Non-current
liabilities
Zero Dividend
Preference
shares - - - - - - 14,163 14,163
Other financial
liabilities 13,019 - - - - - - 13,019
Total
non-current
liabilities 13,019 - - - - - 14,163 27,182
----------------- --------- ----------- ------------------ -------- ---------------- ----------------- ------------ --------
Total equity and
liabilities 43,877 19,000 1,116 - - 16,007 130,364 210,364
----------------- --------- ----------- ------------------ -------- ---------------- ----------------- ------------ --------
House Investment
30 June 2016 Land building Contracting Hotel Investments properties Other
(audited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Total
ASSETS
Non-current
assets
Investment
properties - - - - 51,705 - 51,705
Property, plant
and equipment - - - - - - 480 480
Investment in
associate - - - - 113 - - 113
Loans to
associate due
in more than
one year - - - - 894 - - 894
Investment in
joint ventures - - - - 1,216 - - 1,216
Receivables due
in more
than one year - 55 - - - - - 55
Deferred tax
due in more
than one year 463 21 - 102 (787) 539 338
Total
non-current
assets 463 76 - 2,325 50,918 1,019 54,801
---------------- -------- ---------- -------------- -------- ---------------- -------------- -------- --------
Current assets
Inventories 99,073 47,661 75 16 - - - 146,825
Trade and other
receivables 3,420 162 440 172 402 3 2,217 6,816
Amounts due
from associate - - - - 3,372 - - 3,372
Amounts due
from joint
ventures - - - - 10,103 - - 10,103
Listed
investments
carried
at fair value
through profit
and loss - - - - 1 - - 1
Cash and cash
equivalents - - - - - - 16,723 16,723
Total current
assets 102,493 47,823 515 188 13,878 3 18,940 183,840
---------------- -------- ---------- -------------- -------- ---------------- -------------- -------- --------
Total assets 102,956 47,899 515 188 16,203 50,921 19,959 238,641
---------------- -------- ---------- -------------- -------- ---------------- -------------- -------- --------
EQUITY
Capital and reserves attributable to the
Company's equity holders
Share capital - - - - - - 20,281 20,281
Share premium
account - - - - - - 34,033 34,033
Employee
benefit trust - - - - - - (713) (713)
Special reserve - - - - - - 6,059 6,059
Retained
earnings - - - - - - 56,372 56,372
Total equity
attributable
to
shareholders
of the
Company - - - - - - 116,032 116,032
---------------- -------- ---------- -------------- -------- ---------------- -------------- -------- --------
LIABILITIES
Current
liabilities
Bank loans and
overdrafts 105 - - - - 18,905 - 19,010
Other loans 21,135 - - - - - - 21,135
Trade and other
payables 11,824 3,412 - 508 215 446 2,251 18,656
Corporation tax - - - - - - 7,618 7,618
Other financial
liabilities 22,369 - - - - - - 22,369
Total current
liabilities 55,433 3,412 - 508 215 19,351 9,869 88,788
---------------- -------- ---------- -------------- -------- ---------------- -------------- -------- --------
Non-current
liabilities
Zero Dividend
Preference
shares - - - - - - 14,607 14,607
Bank loans due
in more
than one year 859 15,676 - - - - - 16,535
Payables due in
more than
one year 2,679 - - - - - - 2,679
Total
non-current
liabilities 3,538 15,676 - - - - 14,607 33,821
---------------- -------- ---------- -------------- -------- ---------------- -------------- -------- --------
Total equity
and
liabilities 58,971 19,088 - 508 215 19,351 140,508 238,641
---------------- -------- ---------- -------------- -------- ---------------- -------------- -------- --------
31 December House Investment
2016 Land building Contracting Hotel Investments properties Other
(unaudited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Total
ASSETS
Non-current
assets
Investment
properties - - - - - 52,076 - 52,076
Property,
plant and
equipment - - - - - - 563 563
Loans to
associate
due
in more than
one year - - - - 2,027 - - 2,027 Investment in joint ventures - - - - 1,156 - - 1,156 Receivables due in more than one year - 55 - - - - - 55 Deferred tax due in more than one year 599 14 - - 185 (787) 609 620 Total non-current assets 599 69 - - 3,368 51,289 1,172 56,497 -------------- -------- --------- ------------------ -------- ------------------- -------------- -------- -------- Current assets Inventories 102,551 43,395 - - - - - 145,946 Trade and other receivables 10,625 156 364 185 - 82 3,283 14,695 Amounts due from associate - - - - 2,600 - - 2,600 Amounts due from joint ventures - - - - 18,880 - - 18,880 Listed investments carried at fair value through profit and loss - - - - 1 - - 1 Cash and cash equivalents - - - - - - 17,576 17,576 Total current assets 113,176 43,551 364 185 21,481 82 20,859 199,698 -------------- -------- --------- ------------------ -------- ------------------- -------------- -------- -------- Total assets 113,775 43,620 364 185 24,849 51,371 22,031 256,195 -------------- -------- --------- ------------------ -------- ------------------- -------------- -------- -------- EQUITY Capital and reserves attributable to the Company's equity holders Share capital - - - - - - 20,360 20,360 Share premium account - - - - - - 34,328 34,328 Employee benefit trust - - - - - - (1,067) (1,067) Special reserve - - - - - - 6,059 6,059 Retained earnings - - - - - - 58,309 58,309 Total equity attributable to shareholders of the Company - - - - - - 117,989 117,989 -------------- -------- --------- ------------------ -------- ------------------- -------------- -------- -------- LIABILITIES Current liabilities Bank loans and overdrafts 105 1,688 - - - - - 1,793 Trade and other payables 6,463 3,584 - - 132 314 4,658 15,151 Corporation tax - - - - - - 5,004 5,004 Other financial liabilities 22,115 - - - - - - 22,115 Total current liabilities 28,683 5,272 - - 132 314 9,662 44,063 -------------- -------- --------- ------------------ -------- ------------------- -------------- -------- -------- Non-current liabilities Zero Dividend Preference shares - - - - - - 16,745 16,745 Bank loans due in more than one year 16,816 17,179 - - - 26,177 - 60,172 Other loans due in more than one year 17,226 - - - - - - 17,226 Total non-current liabilities 34,042 17,179 - - - 26,177 16,745 94,143 -------------- -------- --------- ------------------ -------- ------------------- -------------- -------- -------- Total equity and liabilities 62,725 22,451 - - 132 26,491 144,396 256,195 -------------- -------- --------- ------------------ -------- ------------------- -------------- -------- --------
7. Income tax
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
--------------------- ------------ ------------ -----------
Current tax charge 1,196 980 3,333
Deferred tax charge (281) 506 210
--------------------- ------------ ------------ -----------
915 1,486 3,543
--------------------- ------------ ------------ -----------
8. Earnings and net asset value per share
Basic and diluted EPS
Basic and diluted earnings per share has been calculated by dividing the earnings attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
-------------------------------------------- ------------ ------------ -----------
Profit attributable to equity holders
of the Company (GBP000) 3,450 20,289 28,742
Net assets attributable to equity holders
of the company (GBP000) 117,989 107,066 116,032
-------------------------------------------- ------------ ------------ -----------
Weighted average number of ordinary shares
in issue (000s) 201,785 202,136 201,957
Dilutive effect of options (000s) 1,926 2,343 2,413
Dilutive effect shares held in EBT (000s) 1,627 1,027 1,027
Dilutive effect of growth shares (000s) 8,000 6,000 8,000
-------------------------------------------- ------------ ------------ -----------
213,338 211,506 213,397
-------------------------------------------- ------------ ------------ -----------
Basic earnings per share in pence 1.71p 10.04p 14.23p
Diluted earnings per share in pence 1.62p 9.59p 13.47p
-------------------------------------------- ------------ ------------ -----------
Shares in issue (000s) 201,972 201,779 201,779
Net asset value per share in pence 58.42p 53.06p 57.50p
Diluted net asset value per share in
pence 55.26p 50.71p 54.42p
-------------------------------------------- ------------ ------------ -----------
On 16 December 2016 the Group's Employee Benefit Trust (EBT) purchased 600,000 shares in Inland Homes plc under the terms of the Long Term Incentive Plan. These shares, along with the 1,027,066 shares purchased by the EBT in prior years have been deducted from the weighted average number of ordinary shares in issue and also from the shares in issue at the period end.
The diluted EPS and net asset value per share for the six months ended 31 December 2015 has been restated due to a change in the assumptions with regards to the contingently issuable shares and the inclusion of the shares held in the EBT. This has resulted in an increase of 0.19p per share for the diluted EPS.
9. Investment properties
Residential Commercial Development
properties Property land
Level 3 Level 3 Level 3 Total
GBP000 GBP000 GBP000 GBP000
-------------------------------- ------------ ----------- ------------ --------
Cost or fair value
At 31 December 2015 40,000 93 8,000 48,093
Additions 136 761 - 897
Transfer from/(to) inventories 1,319 - (2,650) (1,331)
Fair value adjustment 3,935 111 - 4,046
At 30 June 2016 45,390 965 5,350 51,705
Additions 68 336 - 404
Fair value adjustment - (33) - (33)
-------------------------------- ------------ ----------- ------------ --------
At 31 December 2016 45,458 1,268 5,350 52,076
-------------------------------- ------------ ----------- ------------ --------
10. Investments
Joint
ventures Associate Total
GBP000 GBP000 GBP000
---------------------------------------- ---------------------------- ---------- -------
Cost or fair value at 31 December 2015 1,722 250 1,972
Additions - 1 1
Transfer to loans to joint ventures (242) - (242)
Share of loss after tax (264) (138) (402)
At 30 June 2016 1,216 113 1,329
---------------------------------------- ---------------------------- ---------- -------
Additions 61 - 61
Share of loss after tax (121) (113) (234)
At 31 December 2016 1,156 - 1,156
---------------------------------------- ---------------------------- ---------- -------
In November 2014, the Group acquired a 10% interest in Aston Clinton S.A.R.L (Lux) whose purpose is to acquire a site near Aylesbury, Buckinghamshire and obtain planning permission. The site has the potential for 400 residential plots. Under the terms of the joint venture agreement, the Group has an obligation to fund 50% of the costs of the site and is entitled to receive 50% of the net returns. The Group has made a capital investment of GBP1.1 million, which is accounted for as an Investment in Joint Ventures. The Group has also provided loans of GBP2.6 million as at the balance sheet date, and this is accounted for as Amounts due from Joint Ventures within Current Assets in the Group Statement of Financial Position. This investment is accounted for using the equity method and further details of this can be found in Critical Judgements in note 5. Aston Clinton S.A.R.L. is based in Luxembourg and their accounts are prepared under Luxembourg GAAP (Lux GAAP). GBP40,000 (to date: GBP618,000) recognised as an operating expense under Lux GAAP in the Statement of Comprehensive Income has been reclassified as inventories in current assets in order to bring the accounts into line with IFRSs. Similarly, GBP6.8 million held as fixed assets under Lux GAAP has been reclassified as inventories in current assets.
In December 2014, the Group entered into a joint venture with CPC Group Ltd (CPC) to purchase land, obtain planning permission and ultimately sell the land. Under the terms of the joint venture, the Group owns 20% of the share capital and is obliged to fund 20% of the costs of the sites acquired by the joint venture. A 'waterfall' calculation determines the amount of profit to be received by the Group, using performance hurdles. Along with the Group's capital investment of GBPnil, GBP4.8 million of loans have been provided, which is accounted for as Amounts due from Joint Ventures within Current Assets in the Group Statement of Financial Position. This investment is accounted for using the equity method and further details of this can be found in Critical Judgements in note 5. Project Helix Holdco Ltd is based at the Company's registered office.
In December 2015, the Group entered into a joint venture with two individuals to purchase land, obtain planning permission and develop approximately 100 homes in Garston, Hertfordshire. Under the terms of the joint venture, the Group owns 50% of the share capital, is obliged to fund 50% of the costs of the site and is entitled to receive a management fee and 50% of the returns. Along with the Group's capital investment of GBPnil, loans of GBP2.7 million have been provided which are accounted for as Amounts due from Joint Ventures within Current Assets in the Group Statement of Financial Position. This investment is accounted for using the equity method and further details of this can be found in Critical Judgements in note 5. Bucknalls Developments Ltd is based at the Company's registered office.
In June 2016, the Group entered into a joint venture whose purpose is to acquire a site in Cheshunt, Hertfordshire, obtain planning permission and ultimately sell the land. The site has the potential for 1,900 residential plots across 25 acres, of which the joint venture currently owns 13. Under the terms of the joint venture agreement, the Group has an obligation to fund 50% of the costs of the site and is entitled to receive 50% of the net returns. The Group has made a capital investment of GBP33,000 as at 31 December 2016, which is accounted for as an Investment in Joint Ventures. Funds of GBP7.1 million have also been advanced and are accounted for as Amounts due from Joint Ventures on the Group Statement of Financial Position. This investment is accounted for using the equity method and further details of this can be found in Critical Judgements in note 5. Cheshunt Lakeside Developments Ltd is based at the Company's registered office.
In November 2016, the Group entered a joint venture with the Anderson Group to develop a site in Basildon, Essex with 30 private and 13 Housing Association units. Under the terms of the joint venture agreement, the Group has an obligation to fund 50% of the costs of the site and is entitled to receive 50% of the net returns. The Group has made a capital investment of GBP32,000 as at 31 December 2016, which is accounted for as an Investment in Joint Ventures. Funds of GBP1.7 million have also been forwarded and are accounted for as Amounts due from Joint Ventures on the Group Statement of Financial Position. This investment is accounted for using the equity method and further details of this can be found in Critical Judgements in note 5. Gardiners Park LLP is based at Springfield Lodge, Colchester Road, Chelmsford, Essex, CM2 5PW.
In October 2015, the Group acquired 25% of Troy Homes Ltd (Troy), a new premium housebuilder, and is entitled to 25% of the net returns. At 31 December 2016, the Group had made a capital investment of GBPnil and had provided loans of GBP2.0 million which are accounted for as Loans to Associate within Non-Current Assets in the Group Statement of Financial Position. The Group has subscribed to a further GBP1 million of loan notes and GBP1.25 million of share capital which are payable when called for by the board of Troy. There is a debtor of GBP2.6 million (including VAT) in relation to land sold on deferred terms in Amounts due from Associate within Current Assets, as disclosed in the accounts for the year ended 30 June 2016. This investment is accounted for using the equity method, further details of which can be found in Critical Judgements in note 5. Troy is based at 10-14 Accommodation Road, London, NW11 8ED.
11. Deferred tax
The net movement on the deferred tax account is as follows:
GBP000
------------------------- -------
At 31 December 2015 42
Income statement credit 296
At 30 June 2016 338
Income statement credit 282
At 31 December 2016 620
------------------------- -------
The movement in deferred tax assets is as follows:
Capital Notional
losses
recognised Share interest
on on
revaluation Revaluation based deferred
gain gain Other compensation consideration Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------ ------------ ------------ ------- ------------- -------------- -------
At 31 December 2015 5,591 (5,591) (789) 472 359 42
(Charged)/credited to income
statement (474) (313) 891 67 125 296
At 30 June 2016 5,117 (5,904) 102 539 484 338
Credited to income statement 7 - 82 64 129 282
------------------------------ ------------ ------------ ------- ------------- -------------- -------
At 31 December 2016 5,124 (5,904) 184 603 613 620 ------------------------------ ------------ ------------ ------- ------------- -------------- -------
Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. The Group has capital losses amounting to GBP10,702,000 (2015: GBP10,814,000) that have not been recognised as the Directors consider the realisation of the losses is not expected to crystallise in the foreseeable future.
12. Trade and other receivables, joint ventures and associates
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
-------------------------------------- ------------ ------------------------------ -----------
Trade receivables 62 204 3,506
Prepayments and accrued income 851 988 895
Amounts due from associate 2,600 - 3,372
Amounts due from joint ventures 18,880 - 10,103
Other receivables falling due within
one year 13,782 6,172 2,415
Loans to associate due in more than
one year 2,027 500 894
Loans to joint ventures due in more - 5,580 -
than one year
Other receivables falling due after
more than one year 55 55 55
-------------------------------------- ------------ ------------------------------ -----------
38,257 13,499 21,240
-------------------------------------- ------------ ------------------------------ -----------
At 31 December 2016 the Group had provided loans of GBP2.6 million to Aston Clinton S.a.r.l (Lux), a company in which it holds a 10% equity interest, as shown in note 10.
At 31 December 2016 the Group had provided loans of GBP4.8 million to its joint venture with CPC, as shown in note 10.
At 31 December 2016 the Group had provided loans of GBP2.7 million to its joint venture in Garston, Hertfordshire, as shown in note 10.
At 31 December 2016 the Group had provided loans of GBP7.1 million to its joint venture in Cheshunt, Hertfordshire, as shown in note 10.
At 31 December 2016 the Group had provided loans of GBP1.7 million to its joint venture in Basildon, Essex, as shown in note 10.
At 31 December 2016 the Group had provided loans of GBP2.0 million and a debtor relating to transactions of GBP2.6 million to Troy, a company in which it holds a 25% equity interest, as shown in note 10.
All of the Group's trade and other receivables have been reviewed for indicators of impairment.
13. Share capital
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
No. No. No.
------------------------------------ ------------ ------------------------- -----------------------
Shares in issue
Shares in issue at start of period 201,772,366 202,156,216 202,156,216
New shares issued 800,000 - -
Shares purchased by EBT (600,000) (377,500) (383,850)
Shares in issue at end of period 201,972,366 201,778,716 201,772,366
------------------------------------ ------------ ------------------------- -----------------------
14. Non-controlling interests (minority interests)
WPDL DGVL Total
GBP000 GBP000 GBP000
---------------------------------------------- ---------------- ---------------- ----------------
At 31 December 2015 982 (936) 46
Non-controlling interests in the net result
of subsidiaries (482) (435) (917)
Purchase of non-controlling interests' share
of subsidiaries (500) 1,371 871
At 30 June 2016 - - -
---------------------------------------------- ---------------- ---------------- ----------------
Non-controlling interests in the net result - - -
of subsidiaries
At 31 December 2016 - - -
---------------------------------------------- ---------------- ---------------- ----------------
15. Trade and other payables and corporation tax
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
------------------------------------------ ------------ ------------ -----------
Trade payables 5,199 2,520 3,871
Other creditors 6,714 3,396 4,687
Social security, other taxes and VAT 566 - 3,770
Corporation tax 5,004 5,607 7,618
Provisions - - 943
Accruals and deferred income 2,672 3,478 5,385
Other creditors falling due in more than
one year - - 2,679
------------------------------------------ ------------ ------------ -----------
20,155 15,001 28,953
------------------------------------------ ------------ ------------ -----------
The carrying value of trade and other payables is considered a reasonable approximation of fair value.
16. Other financial liabilities and zero dividend preference shares
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
----------------------------------------------- ------------ ------------ -----------
Purchase consideration on inventories falling
due within one year 22,115 4,157 22,369
Purchase consideration on inventories falling - 13,019 -
due after more than one year
Zero dividend preference shares falling due
after more than one year 16,745 14,163 14,607
----------------------------------------------- ------------ ------------ -----------
38,860 31,339 36,976
----------------------------------------------- ------------ ------------ -----------
17. Contingencies
During the year ended 30 June 2016, one of the Group's principal contractors ("the contractor") experienced significant financial difficulties and was put into Administration. The Group has made a claim to the contractor's Administrators for GBP7.2m in relation to amounts it believes it is owed by the contractor. A counter proposal for GBP11.6m has been received from the Administrators for various unexplained reasons, based on discussions with the contractor. The Administrators have not provided any evidence to support the contractor's claims and the Group will be vigorously defending any claims from the contractor as it believes that contractually they have no merit. This position remains unchanged since the accounts for the year ended 30 June 2016 were published.
No provisions have been made in these financial statements in respect of this contingent liability.
18. Copies of our half-yearly financial report can be viewed and downloaded from our website at www.inlandhomes.co.uk. Copies are also available on request by writing to the Company Secretary at the Registered Office of Inland Homes plc.
INDEPENDENT REVIEW REPORT TO INLAND HOMES PLC
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2016 which comprises the Group Income Statement, Group Statement of Financial Position, Group Statement of Changes in Equity, Group Statement of Cash Flows and Notes 1 to 18.
We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2016 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.
BDO LLP
Chartered Accountants and Registered Auditors
Location
United Kingdom
27 March 2016
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKODQABKDPNB
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