Trafalgar New Homes PLC Final Results (7301G)

TIDMTRAF

RNS Number : 7301G

Trafalgar New Homes PLC

10 August 2016

10 August 2016

TRAFALGAR NEW HOMES PLC

("Trafalgar", the "Company" or "Group")

Final Results for the year ended 31 March 2016

Trafalgar New Homes plc (AIM: TRAF), the AIM quoted residential property developer operating in South East England, announces its final results for the 12 months ended 31 March 2016. A copy of the annual report and accounts, along with notice of the Company's annual general meeting, to be held at the Company's offices at Chequers Bank, Bough Beech, Edenbridge, Kent TN8 9PD at 11.00 a.m. on 8 September 2016, will be posted to shareholders shortly and made available on the Company's website, www.trafalgar-new-homes.co.uk.

Financial Highlights:

   --     Turnover for the Period was GBP2,235,000 (2015: GBP3,898,250); 
   --     Profit before and after tax of GBP204,877 (2015: Loss GBP619,106); 
   --     EPS of 0.09p (2015: loss per share of 0.26p); and 
   --     Cash on the balance sheet at the end of the year was GBP278,406 (2015: GBP490,770). 

Operational Highlights:

   --     Construction work continues at Tunbridge Wells, Kent for six luxury apartments; 

-- Work commenced at: 1) High Street, Edenbridge, Kent for three terraced houses; 2) Vines Lane, Hildenborough, Kent for two detached houses; and 3) Sheerness, Kent for six terraced houses; and

   --     Completed the purchase of a development site in Speldhurst, Tunbridge Wells, Kent. 

Commenting on today's Results, CEO, Chris Johnson, said:

"I am delighted to report that the Group has returned to profitability. We are confident that the Company has a strong development pipeline and that we are well positioned to improve financial performance for FY2017 and beyond. Despite Brexit, we believe the market fundamentals remain strong and that huge demand still remains for homes as a result of the chronic lack of supply. We remain committed to building new homes in the South East where we believe there is still high demand, to growing the Group's profitability and, in time, rewarding our shareholders through dividend payments. We believe the outlook for the Company is exciting."

Enquiries:

Trafalgar New Homes plc [phone]

Christopher Johnson

   Allenby Capital Ltd - Nominated Adviser and Broker                     [phone] 

Jeremy Porter/James Reeve

Yellow Jersey PR Limited [phone]

Dominic Barretto/Alistair de Kare-Silver

Notes to Editors:

Trafalgar New Homes is the holding company of Combe Bank Homes, a successful residential property developer operating in the southeast of England. The founders of Combe Bank homes have a long track record of developing new and refurbished homes, principally in Kent.

The Company's focus is on the select situation of land for residential property development. The Company outsources all development activities, for example the obtaining of planning permission, design and construction and uses fixed price build contracts. This enables the Company to tightly control its development and overhead costs.

The Company focuses on the regions of Kent, Surrey, Sussex and the M25 ring south of London and targets development sites of up to 20 homes, with sales prices typically ranging from GBP250,000 to GBP1,500,000 per unit.

Trafalgar New Homes Plc

CHAIRMAN'S STATEMENT

for the year ended 31 March 2016

On behalf of the Board, I am pleased to present Trafalgar New Homes' results for the year ended 31 March 2016 which saw the Group return to profitability. The Board is confident that it has a strong development pipeline and that the Company is well positioned to deliver profitability for FY2017 and onwards.

Our driving focus is now on acquiring new sites that should produce increased turnover and a significant improvement in the financial performance for FY2017. In addition, we have been progressing with the preparation of a revised planning application for our Staplehurst site, which, if successful, should make a significant contribution to our bottom line and address the chronic shortage in the area of good quality housing stock.

Financials

The year under review saw Group turnover at GBP2,235,000 (2015: GBP3,898,250), with a profit before and after tax of GBP204,877 (2015: Loss GBP619,106). The cash on the balance sheet at the end of the year was GBP278,406 (2015: GBP490,770) and the Group continues to have sufficient capital for all planned activities.

Business Environment and Outlook

The decision to exit the European Union at the end of June 2016 was unprecedented. It led to an immediate drop in the value of sterling and a sell-off in house building stocks. Following the initial market panic the stock market has rebounded in anticipation of improved macro-economic conditions. However, it is too soon to predict the long-term impact of Brexit on the UK homes market.

The market fundamentals remain strong with robust demand for homes as a result of chronic undersupply. A recent report by the Resolution Foundation showed that home ownership in the UK had dropped to its lowest levels in 30 years, with outer London seeing the second biggest drop of 13.5% to just under 58%. Further, the Bank of England's decision on 4th August 2016 to reduce interest rates to a record low of 0.25% should reduce the cost of financing and may also provide potential buyers with cheaper mortgages. Nevertheless, we strongly believe that as long as planning restrictions remain obstructive there will continue to be a considerable shortage of housing supply in the South East.

These fundamentals provide attractive opportunities for house builders with the right strategic focus and access to finance. We are confident that our focus on traditional housing for a wide range of buyers in the South East, along with the price of our current housing stock, will keep sale prices stable and we will continue to attract customers. The recent increases in Stamp Duty Tax are mainly applicable to the luxury end of the market and do not adversely affect our operations. The Group remains committed to building new homes in the South East that are in such high demand.

The Group remains confident about its prospects for FY2017 and beyond. Trafalgar New Homes is in a stronger position now than ever, having returned to profitability and having secured several banking facilities to fund its strong development pipeline. The Executive Directors collectively have many years of residential development experience, which enables the Group to negotiate land and property purchases and construction contracts efficiently and quickly. This, in turn, enables the Group to adapt to changing market conditions and exploit opportunities. We are committed to growing the Group's profitability and to rewarding our shareholders through dividend payments when appropriate. We believe the outlook for the Company is exciting.

James Dubois

Chairman

9 August 2016

Operations review

A summary of the Results for the year is as follows:-

 
                          2016        2015 
                          GBP         GBP 
 Revenue for the year     2,235,000   3,898,250 
 Gross profit/(loss)      476,607     (290,791) 
 Profit after taxation    204,877     (619,106) 
 Earnings per share       0.09p       (0.26)p 
 

Group turnover for the year related to the sale of the final house at Oakhurst Park Gardens, Hildenborough, and the completion and sale of the houses on the sites at The Bell Inn, Ticehurst, East Sussex and the land at Station Road, Borough Green, Kent. The revenue from these sales totalled GBP2,235,000, generating a gross profit of GBP476,607. After deducting overhead costs of GBP279,250 for the year the Company recorded a pre-tax profit of GBP204,877.

As the Company has approved tax losses brought forward of a sum in excess of the profitability, there will be no tax charge and, therefore, the post-tax profit amounts to GBP204,877 and with 238,375,190 shares in issue, (no change from the previous year) the Company achieved earnings per share of 0.09p, which compares favourably to the earnings per share loss of 0.26p recorded for the year ended 31(st) March 2015.

Key performance indicators (KPIs)

Management are closely involved in the day to day operations of the group and are very aware of cashflows and expenditure. However management believe that the key indicators of performance for the group are the revenue and profitability achieved during the period. These measures are disclosed above in the operations review.

Management do not use any non-financial KPIs.

Development Pipeline

Construction work continues on our site at Tunbridge Wells, Kent for six luxury apartments. Work has also commenced on sites at High Street, Edenbridge, Kent for three terraced houses and at Vines Lane, Hildenborough, Kent for two detached houses. Construction work on all three sites is expected to be completed during the current calendar year and most of these eleven units should be sold before 31(st) March 2017, which will contribute to the profitability of the Group for the year ending 31(st) March 2017.

The funding for the sites at Edenbridge and Hildenborough is being provided by Coutts, with RateSetter financing the Tunbridge Wells site. The Company's arrangements with its funders now provide Trafalgar New Homes with 100% of the finance required to build on all three sites, having committed its own funds at the time of the acquisition of the sites and for the initial construction costs.

The Company has also commenced work on the site at Sheerness, Kent, which has been owned by the Group for some time. Trafalgar New Homes has secured funding from Lloyds Bank for the construction of the development on this site, which, after an initial payment by the Group, will result in 100% of the finance required being provided by the Bank.

Since the year-end the Company has completed the purchase of a development site in Speldhurst, Tunbridge Wells, Kent, with the benefit of receiving planning permission for the demolition of the existing house and the erection of a substantial new build detached house. Funding for the acquisition and development is being provided by Lloyds Bank and construction work should commence shortly. It is anticipated that the build work will be completed in the spring of 2017 with a sale hopefully being achieved during the summer of 2017.

Trafalgar New Homes believes that all the funding it has secured for these developments are on competitive commercial terms.

The site at Staplehurst, Kent

The Company has been refused planning permission on its most recent planning application for its site at Staplehurst, Kent. This was received post year-end. Under the guidance of its planning consultants, the Company felt it had addressed the requirements and concerns set out by the authorities to the fullest. The Company is now preparing a further application for planning permission, having received advice from its planning consultants stating that: "In formulating the emerging Local Plan, the Council's planning policy team have clearly concluded (in writing and on public record) that this is a site that is suitable to accommodate residential development. In this context it is impossible to comprehend how an 'in principle' objection to housing development can be justified and maintained".

Outlook

The Company is confident that its current development programme will deliver profits for the Group for the year ended March 2017 and will enable it to meet market expectations. Looking ahead, the Company is negotiating the purchase of other sites in the South East of England, its chosen area of operation, which will contribute to turnover and anticipated profitability for the Group for the year ended 31(st) March 2018 and beyond.

The Board of Trafalgar New Homes remains focused on growing the Group, both through site acquisition and development and corporate acquisition, should any opportunities present themselves. The Company is committed to creating value for its shareholders and although it will not be paying a dividend this year Trafalgar New Homes intends to declare and pay a dividend when circumstances permit.

Christopher Johnson

Director

9th August, 2016

Trafalgar New Homes Plc

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2016

 
                                                       Year         Year 
                                                      ended        ended 
                                                   31 March 
                                                                31 March 
                                          Note         2016         2015 
                                                        GBP          GBP 
 
Revenue                                           2,235,000    3,898,250 
 
Cost of sales                                   (1,758,393)  (4,189,041) 
                                                -----------  ----------- 
 
Gross profit/ (loss)                                476,607    (290,791) 
 
Administrative expenses                           (279,250)    (329,850) 
 
 Operating profit/(loss)                            197,357    (620,641) 
 
 
Profit /(loss) before interest                      197,357    (620,641) 
 
Other interest receivable and similar 
 income                                    2          7,520        1,535 
 Interest payable and similar charges      5              -            - 
 
 
Profit/(loss) before taxation                       204,877    (619,106) 
 
Tax payable on profit/(loss) on 
 ordinary activities                       6              -            - 
 
Profit/(loss) after taxation for 
 the year attributable to equity 
 holders of the parent                              204,877    (619,106) 
                                                ===========  =========== 
 
 
Other comprehensive income attributable 
 to equity 
 holders of the parent                                                 - 
Total comprehensive income for 
 the year                                           204,877    (619,106) 
 
Profit/(loss) attributable to: 
Equity holders of the Parent                        204,877    (619,106) 
                                                ===========  =========== 
 
Total comprehensive income/(loss) 
 for the year attributable to: 
Equity holders of the Parent                        204,877    (619,106) 
 
PROFIT/(LOSS) PER ORDINARY SHARE; 
 Basic/diluted                             7          0.09p      (0.26p) 
                                                ===========  =========== 
 

All results in the current and preceding financial year derive from continuing operations.

Trafalgar New Homes Plc

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

For the year ended 31 March 2016

 
                                         31 March     31 March 
                                Note         2016         2015 
                                              GBP          GBP 
Non-current assets 
 
 
Property, plant and equipment      8        2,384          648 
                                      -----------  ----------- 
                                            2,384          648 
 
Current assets 
Inventory                         11    2,275,546    1,884,250 
Trade and other receivables        9      436,604       81,244 
Cash at bank and in hand          10      278,406      490,770 
                                      -----------  ----------- 
                                        2,990,556    2,456,264 
 
Total assets                            2,992,940    2,456,912 
 
Liabilities: amounts falling 
 due within one year 
Trade and other payables          12    (152,149)     (70,777) 
Borrowings                        13    (741,266)    (381,450) 
 
Net current assets                      2,099,525    2,004,685 
 
Non-current liabilities 
Borrowings                        13  (3,221,924)  (3,331,961) 
 
Net liabilities                       (1,122,399)  (1,327,276) 
                                      ===========  =========== 
 
 
 
Capital and reserves 
Called up share capital           14    2,383,752    2,383,752 
Share premium account             15    1,165,463    1,165,463 
Reverse acquisition reserve           (2,817,633)  (2,817,633) 
Profit & loss account                 (1,853,981)  (2,058,858) 
Equity - attributable to the 
 owners of the Parent                 (1,122,399)  (1,327,276) 
                                      ===========  =========== 
 
 

Trafalgar New Homes Plc

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2016

Re

 
                          Share      Share       Reverse     Retained        Total 
                        capital    premium   acquisition      profits       equity 
                                                 reserve    /(losses) 
                            GBP        GBP           GBP          GBP          GBP 
At 1 April 
 2014                 2,283,752  1,075,513   (2,817,633)  (1,439,752)    (898,120) 
Loss for the 
 year                         -          -             -    (619,106)    (619,106) 
Total comprehensive 
 income for 
 the year                     -          -             -    (619,106)    (619,106) 
                      ---------  ---------  ------------  -----------  ----------- 
Issue of shares         100,000    100,000             -            -        200,000 
Share issue 
 costs                        -   (10,050)             -            -     (10,050) 
At 31 March 
 2015                 2,383,752  1,165,463   (2,817,633)  (2,058,858)  (1,327,276) 
                      ---------  ---------  ------------  -----------  ----------- 
 
At 31 March 
 2015                 2,383,752  1,165,463   (2,817,633)  (2,058,858)  (1,327,276) 
Profit for 
 year                         -          -             -      204,877      204,877 
Total comprehensive 
 income for 
 the year                     -          -             -      204,877      204,877 
                      ---------  ---------  ------------  -----------  ----------- 
At 31 March 
 2016                 2,383,752  1,165,463   (2,817,633)  (1,853,981)  (1,122,399) 
                      ---------  ---------  ------------  -----------  ----------- 
 
 

For the purpose of preparing the consolidated financial statement of the Group, the share capital represents the nominal value of the issued share capital of 1p per share. Share premium represents the excess over nominal value of the fair value consideration received for equity shares net of expenses of the share issue.

Trafalgar New Homes Plc

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 March 2016

 
                                             Note       2016         2015 
                                                         GBP          GBP 
 
Cash flow from operating activities 
 
Operating profit/(loss)                              197,357    (620,641) 
Depreciation                                             795          215 
(Increase)/decrease in stocks                      (391,296)    3,186,204 
(Increase)/decrease in debtors                     (355,360)    2,344,241 
Increase/(decrease) in creditors                      81,372    (670,542) 
Interest received                                         60          174 
Interest paid                                        166,869      272,483 
Rental income received                                 7,460        1,361 
 
Net cash (outflow) / inflow from 
 operating activities                              (292,743)    4,513,495 
                                                   ---------  ----------- 
 
Investing activities 
 
Purchase of tangible fixed assets                    (2,531)            - 
 
Net cash used in investing activities                (2,531)            - 

                                                   ---------  ----------- 
 
Taxation                                                   -            - 
                                                   ---------  ----------- 
 
Financing activities 
 
New loans in year (net)/(loan repayments)            694,816  (4,092,216) 
Issue of shares (net of direct 
 costs)                                                    -      189,950 
Director loan repayments                           (445,037)  (1,064,447) 
Interest paid                                      (166,869)    (272,483) 
                                                   ---------  ----------- 
Net cash inflow/(outflow) from 
 financing                                            82,910  (5,239,196) 
                                                   ---------  ----------- 
 
(Decrease) in cash and cash equivalents 
 in the year                                       (212,364)    (725,701) 
                                                   ---------  ----------- 
 
Cash and cash equivalents at the 
 beginning of the year                               490,770    1,216,471 
 
Cash and cash equivalents at the 
 end of the year                                     278,406      490,770 
                                                   =========  =========== 
 
 

BASIS OF PREPARATION

The financial information set out in this announcement is abridged and does not constitute the Company's statutory financial statements for the year ended 31 March 2016. The financial information has been extracted from the financial statements for the year ended 31 March 2016, which have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations adopted by the European Union ("EU") and as applied in accordance with the provisions of the Companies Act 2006 and were approved by the Board on 9 August 2016 and on which the auditors have reported without qualification.

The statutory financial statements for the year ended 31 March 2016 will be posted to shareholders next week and, once approved, will be delivered to the Registrar of Companies following the Annual General Meeting on 8 September 2016.

Trafalgar New Homes Plc

NOTES TO THE FINAL RESULTS

For the year ended 31 March 2016

   1          SEGMENTAL REPORTING 

For the purpose of IFRS 8, the chief operating decision maker ("CODM") takes the form of the Board of Directors. The Directors' opinion of the business of the Group is as follows.

The principal activity of the Group was property development. All the Group's non-current assets are located in the UK.

Based on the above considerations, there is considered to be one reportable segment. The internal and external reporting is on a consolidated basis with transactions between Group companies eliminated on consolidation. Therefore the financial information of the single segment is the same as that set out in the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement of financial position and cashflows.

Geographical segments

The following tables present revenue regarding the Group's geographical segments for the year ended 31 March 2016.

 
                                  United 
Year ended 31 March 2016         Kingdom      Total 
                                  GBP        GBP 
 
Property development - sales   2,235,000  2,235,000 
                               2,235,000  2,235,000 
                               =========  ========= 
 
 
                                  United 
Year ended 31 March 2015         Kingdom      Total 
                                  GBP        GBP 
 
Property development - sales   3,898,250  3,898,250 
                               3,898,250  3,898,250 
                               =========  ========= 
 
   2          OTHER INTEREST RECEIVABLE AND SIMILAR INCOME 
 
                               2016   2015 
                                GBP    GBP 
 
Bank interest received           60    174 
Rental income & ground rent   7,460  1,361 
                              7,520  1,535 
                              =====  ===== 
 
   3           PROFIT FOR THE YEAR 

The Group's profit for the year is stated after charging the following:

 
                                              2016    2015 
                                               GBP     GBP 
 
Depreciation of tangible fixed assets          795     215 
 
Auditor's remuneration: 
Audit of these financial statements         10,000  10,000 
Amounts receivable by the auditor 
 in respect of the audit of the financial 
 statements of subsidiary undertakings 
 pursuant to legislation                     6,000   5,124 
 

Amounts payable to Crowe Clark Whitehill LLP and its related entities in respect of audit and non-audit services are disclosed in the table above.

   4          EMPLOYEES AND DIRECTORS' REMUNERATION 

Staff costs during the year were as follows:

 
                           2016     2015 
                            GBP      GBP 
 
Directors remuneration   15,000   36,250 
Wages and salaries       43,500   66,000 
Social security costs     4,061    8,454 
Other pension costs      18,000   18,000 
                         80,561  128,704 
                         ======  ======= 
 

The average number of employees of the company during the year was:

 
                             2016    2015 
                           Number  Number 
 
Directors and management        4       4 
                           ======  ====== 
 

Key management are the Group's Directors. Remuneration in respect of key management was as follows:

 
                                         2016    2015 
                                          GBP     GBP 
Short-term employee benefits: 
- Emoluments for qualifying services 
 C C Johnson                                -       - 
- Emoluments for qualifying services 
 A Johnson                                  -  10,000 
- Emoluments for qualifying services 
 J Dubois                              15,000  26,250 
 
                                       15,000  36,250 
                                       ======  ====== 
 

There are retirement benefits accruing to Mr C C Johnson for whom a company contribution was paid during the year of GBP18,000 (2015: GBP18,000).

Consultancy fees of GBP 4,994 (2015: GBP8,748) were paid to Mr N Lott during the year.

   5          INTEREST PAYABLE AND SIMILAR CHARGES 

During the year all interest paid on borrowings was capitalised as part of work in progress (GBP166,869) with the interest capitalised on properties sold in the period forming part of cost of sales. All interest was capitalised with the exception of:-

 
                               2016  2015 
                                GBP   GBP 
 
Director's loan interest paid     -     - 
                                  -     - 
                               ====  ==== 
 
   6          TAXATION 
 
             2016  2015 
              GBP   GBP 
 
Current tax     -     - 
 
 
Tax charge      -     - 
             ====  ==== 
 
 
                                           2016          2015 
                                            GBP              GBP 
 
Profit/(loss) on ordinary activities 
 before tax                             204,877  (619,106) 
 
Based on profit/(loss) for the year: 
Tax at 20% (2015: 21%)                   40,975                - 
 
Effect of: 
Losses utilised/group relief claimed   (40,975)                - 
Tax charge for the year                       -                - 
                                       ========  =============== 
 
 

No deferred tax asset has been recognised in respect of historical losses due to the uncertainty in future profits against which to offset these losses. As at the 31 March 2016 the group had cumulative tax losses of GBP1,837,724 (2015: GBP2,056,907) that are available to offset against future taxable profits.

   7          PROFIT/(LOSS) PER ORDINARY SHARE 

The calculation of profit/(loss) per ordinary share is based on the following profits/(losses) and number of shares:

 
                                2016       2015 
                                 GBP        GBP 
 
Profit/(loss) for the year   204,877  (619,106) 
                             =======  ========= 
 
 
 
Weighted average number of shares 
 for basic profit /(loss) per share      238,735,200  236,708,533 
                                         ===========  =========== 
Weighted average number of shares 
 for diluted profit /(loss) per share    238,735,200  236,708,533 
                                         ===========  =========== 
     PROFIT/(LOSS) PER ORDINARY SHARE: 
      Basic                                    0.09p      (0.26p) 
                                         ===========  =========== 
Diluted                                        0.09p      (0.26p) 
                                         ===========  =========== 
 
   8          PROPERTY, PLANT AND EQUIPMENT 
 
Fixtures and fittings      2016   2015 
                            GBP    GBP 
Cost 
At 1 April                2,936  2,936 
Additions                 2,531      - 
At 31 March               5,467  2,936 
                          =====  ===== 
 
 
Depreciation 
At 1 April              2,288  2,073 
Charge for the year       795    215 
At 31 March             3,083  2,288 
                        =====  ===== 
 
 
 
Net book value at 31 
 March 2016 (2015)       2,384  648 
                         -----  --- 
 
 
   9          TRADE AND OTHER RECEIVABLES 
 
                         2016    2015 
                          GBP     GBP 
 
Other receivables     425,515  59,268 
Other taxes             4,786  18,532 
Prepayment              6,303   3,444 
                      436,604  81,244 
                      =======  ====== 
 

There are no receivables that are past due but not impaired at the year-end. There are no provisions for irrecoverable debt included in the balances above.

   10        CASH AND CASH EQUIVALENTS 

All of the Group's cash and cash equivalents at 31 March 2016 are in sterling and held at floating interest rates.

 
                               2016     2015 
                                GBP      GBP 
 
Cash and cash equivalents   278,406  490,770 
                            =======  ======= 
 

The Directors consider that the carrying amount of cash and cash equivalents approximates to their fair value.

   11        INVENTORY 
 
                     2016       2015 
                        GBP      GBP 
 
Work in progress     2,275,546        1,884,250 
                     =========  =============== 
 
 
   12        TRADE AND OTHER PAYABLES 
 
                      2016    2015 
                       GBP     GBP 
 
Trade payables      93,328  24,579 
Accruals            54,513  20,848 
Tax                  2,050   2,015 
Other payables       2,258  23,335 
                   152,149  70,777 
                   =======  ====== 
 
   13        BORROWINGS 
 
                              2016       2015 
                               GBP        GBP 
 
Director's loans         2,121,924  2,566,961 
Other loans              1,100,000    765,000 
Bank and other loans       741,266    381,450 
                         3,963,190  3,713,411 
                         =========  ========= 
 

Included in other loans is the sum of GBP300,000 (2015: GBP300,000) advanced by the DFM Pension Scheme of which Mr J Dubois is the principal beneficiary. This loan bears interest at 12% per annum (2015: 12% per annum).

C C Johnson is a named guarantor on the loan included within bank loans.

The bank borrowings are repayable as follows:

 
                                 2016     2015 
                                  GBP      GBP 
 
On demand or within 
 one year                     741,266  381,450 
In the second year                  -        - 
In the third to fifth 
 years inclusive                    -        - 
After five years              741,266  381,450 
                              =======  ======= 
 
Less amount due for 
 settlement within 12 
 months (included in 
 current liabilities)         741,266  381,450 
Amount due for settlement 
 after 12 months                    -        - 
                              =======  ======= 
 

The weighted average interest rates paid on the bank loans were as follows:

Bank Loans -5.33% (2015: 4.73%)

All of the Directors' loans are repayable after more than 1 year. All loans are interest bearing and charged accordingly. However Mr C C Johnson has waived his right to interest in the year and as a result interest of GBPNil (2015: GBP Nil) was paid to Mr C C Johnson. The rate of interest on the loan is 5% pa (2015: 5% pa). Interest of GBP36,000 (2015: GBP36,000) was paid to Mr J Dubois at the rate of 12 % pa (2015: 12% pa).

   14        Share capital 

Authorised Share Capital

 
                                    2016      2015 
                                  Number  Number 
 
Ordinary shares of 1p 
 each - 1April 2015          238,375,190  228,375,190 
Additional shares issued 
 for cash in year                      -   10,000,000 
                             238,375,190  238,375,190 
                             ===========  =========== 
 
 

Issued, allotted and fully paid

 
                                  2016       2015 
                                   GBP        GBP 
 
Ordinary shares of 1p each   2,383,752  2,383,752 
                             =========  ========= 
 
   15        Share PREMIUM ACCOUNT 
 
                                 2016       2015 
                                  GBP        GBP 
 
Balance brought forward     1,165,463  1,075,513 
Premium on issue of 
 new shares                         -    100,000 
Share issue costs                   -   (10,050) 
Balance carried forward     1,165,463  1,165,463 
                            =========  ========= 
 
   16        RELATED PARTY TRANSACTIONS 

Mr C C Johnson holds 78.4% (2015: 78.4%) of the total issued share capital of the Group.

The following working capital loans have been provided by the Directors:

 
                                 2016         2015 
                                  GBP          GBP 
 
C C Johnson 
Opening balances            2,566,961    3,631,410 
Loan repayments             (421,255)  (1,000,000) 
Personal drawings            (23,782)     (64,449) 
Interest payable                    -            - 
Balance carried forward     2,121,924    2,566,961 
                            =========  =========== 
 

J Dubois - GBP300,000 GBP300,000

Mr Johnson's Loan bore interest during the year at 5% (2015: 5% pa), but he has chosen to forego the interest in the year. Mr Dubois's Loan, which is from his Pension Fund of which he is the sole beneficiary, was at 12% pa interest (2015: 12% pa).

Mrs L C Howard (daughter of Mr C C Johnson) has provided a loan to the company at a rate of 10% per annum of GBPnil (2015: GBP100,000).

Mr G Howard (son-in-law of Mr C C Johnson) has provided a loan to the company at a rate of 10% per annum of GBP800,000 (2015: nil).

During the year, the Directors agreed to sell 11 Oakhurst Park Gardens, Hildenborough Kent to Mr C C Johnson for a consideration of GBP 525,000 (2015: GBP nil) being the market value.

   17        SHARE OPTIONS AND WARRANTS 

There are no share options or warrants.

   18        CATEGORIES OF Financial instruments 

The Group's financial assets are divided as cash and cash equivalents. The Group's financial liabilities are divided as Directors loans, bank loans and other loans.

 
                             Loans and receivables        Financial 
                                                          liabilities 
                                                          measured at 
                                                           amortised 
                                                             cost 
                                   2016        2015       2016       2015 
                                    GBP         GBP        GBP        GBP 
Financial assets 
Cash and cash equivalents       278,406     490,770                     - 
Trade receivables               436,604      81,244 
 
 
Financial liabilities 
Trade payables                                         152,149     70,777 
Borrowings - Directors' 
 loans                                -           -  2,121,924  2,566,961 
Borrowings - Bank loan                -           -    741,266    381,450 
Borrowings - Other loans              -           -  1,100,000    765,000 
Total                           715,010     572,014  4,115,339  3,784,188 
                            ===========  ==========  =========  ========= 
 

The Board has overall responsibility for the determination of the Group's risk management objectives and policies and it sets policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:

Capital risk management

The Group considers its capital to comprise its share capital and share premium. The Group's capital management objectives are to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

Significant Accounting Policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in the Company's annual report and accounts for the year ended 31 March 2016.

Foreign currency risk

The Group has minimal exposure to the differing types of foreign currency risk. It has no foreign currency denominated monetary assets or liabilities and does not make sales or purchases from overseas countries.

Interest rate risk

The Group is sensitive to changes in interest rates principally on the loans from banks. GBP 2,000,000 of the loans from Mr Johnson bears interest at 5% pa (2015: 5% pa), although Mr Johnson has waived his right to receive interest in the year. Mr Dubois' loan of GBP300,000 within other loans, from his Pension Fund attracts interest at 12% pa (2015: 12%). Additional loans of GBP800,000 included in other loans attract interest at 10%pa (2015: 10% pa).

The impact of a 100 basis point increase in interest rates would result in additional interest cost for the year of GBP 7,280 (2015: GBP24,325).

Credit risk management

Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in financial loss to the Group.

Liquidity risk management

This is the risk of the Company not being able to continue to operate as a going concern.

The Directors have, after careful consideration of the factors set out above, concluded that it is appropriate to adopt the going concern basis for the preparation of the financial statements and the financial statements do not include any adjustments that would result if the going concern basis was not appropriate.

Mr Johnson confirms that he will continue to support the Group for its anticipated needs for the next two years. As with all business forecasts, the Directors' statement cannot guarantee that the going concern basis will remain appropriate given the inherent uncertainty about the future events.

Derivative financial instruments

The Group does not currently use derivative financial instruments as hedging is not considered necessary. Should the Group identify a requirement for the future use of such financial instruments, a comprehensive set of policies and systems as approved by the Directors will be implemented.

In accordance with IAS 39, "Financial instruments: recognition and measurement", the Group has reviewed all contracts for embedded derivatives that are required to be separately accounted for if they do not meet specific requirements set out in the standard. No material embedded derivatives have been identified.

This information is provided by RNS

The company news service from the London Stock Exchange

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August 10, 2016 02:00 ET (06:00 GMT)