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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Trust Property | LSE:TPM | London | Ordinary Share | GB00B1NXMT53 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 4062Y
Trust Property Management Group PLC
07 July 2008
Trust Property Management Group plc / Ticker: TPM / Index: AIM / Sector: Property Management
7 July 2008
Trust Property Management Group plc ('Trust' or 'the Group')
Final Results
Growth in Profits and Integration of Acquisitions
Trust, the expanding property management and services group, today announces its unaudited results for the year ended 31 March 2008.
Highlights
* Revenue of £3 million
* Adjusted EBITDA of £600,000 (Note 3)
* Profit from operations of £517,000 before amortisation and share-based payments
* Profit before tax of £322,000
* Basic and diluted EPS of 0.7p
* Achieved rapid growth, establishing position as a leading provider of property management and professional chartered surveying
services
* Acquired niche complementary businesses, expanding geographic reach and service offering
* Grown management portfolio from just over 10,000 units at the time of listing in March 2007 to over 14,000
* Exploited cross selling opportunities across divisions
* Strengthened team both in terms of the Board and management
* Relocated to larger, self-contained office to accommodate expansion
* Embarked on new strategy to increase exposure to the investment community
Commenting on the results, Trust Chief Executive Officer, Benjamin Mire, said, "These results highlight Trust's progress since listing
on AIM. Three successful acquisitions were completed during the year and we have enlarged our management portfolio significantly. We have
also formed new strategic partnerships and with the addition of a stronger team in place, I believe we remain in an excellent position to
continue our aggressive growth strategy in the year to come."
For further information visit www.tpmgroupplc.co.uk or contact:
Julian Finegold, Director Tel: 020 8358 6530
Trust Property Management Group
Plc
Liam Murray, Nominated Adviser Tel: 020 7492 4777
Dowgate Capital Advisors
Limited
David Morgan / David Coffman Tel: 020 7747 7400
IAF Securities Limited
Isabel Crossley / Susie Callear Tel: 020 7236 1177
St Brides Media and Finance Ltd
CHAIRMAN'S STATEMENT
It gives me great pleasure to report the preliminary results of Trust for the year ended 31 March 2008.
This has been a year of rapid growth for Trust as we continue to establish the Group as a leading provider of property management and
professional chartered surveying services. The period under review has seen the successful acquisition of two niche businesses: Nightingale
Chancellors, a complementary property services business based in Richmond, and Dexter Brown, a chartered surveying firm located in Milton
Keynes. These acquisitions represented the first step in our growth strategy, not only providing increased revenue for the Group, but
expanding our geographic reach and enhancing our cross-selling opportunities to clients.
Our management portfolio has continued to grow steadily over the course of the year, from just over 10,000 units at the time of listing
in March 2007 to over 14,000 at the year end. This 40 % increase, whilst partly due to the organic growth of our portfolio, is also the
result of the acquisitions of contracts and management divisions of other companies. In November 2007 we acquired the residential management
division of Paige & Petrook, a Middlesex based company specialising in professional services relating to letting procedures, which added an
additional 445 units and 18 blocks to our portfolio. Importantly, we anticipate that the income generated by these units will increase
considerably over the next year due to rising fees in line with normal market prices. Additionally, after the year end Trust acquired a
contract for a consideration of £100,000, paid in cash, to manage a portfolio of 215 flats in north-west London from Safeland Plc. The
properties, which under the terms of the agreement Trust will manage for an 80 year period, are expected to generate an annual fee income of approximately £70,000.
As part of Trust's continuing growth strategy, the Group has strengthened its team considerably, both in terms of the Board and
management. We were delighted to welcome Larry Lipman to the Board as a Non-Executive Director in September 2007. He is currently Managing
Director of Safeland Plc and has a huge wealth of experience in the property industry. The acquisition of Dexter Brown also provided us with
the invaluable experience and support of its Managing Director, Trevor Brown, who joined us on the Board of Trust as a Non-Executive
Director in October 2007.
In order to co-ordinate the enlarged accounts department we have created the position of Director of Client Accounting and also made
further appointments in the accounts department in response to the growing number of units under management. Furthermore, we have expanded
our sales and marketing teams as we continue to be proactive in increasing our client contact base, raising the profile of our subsidiary
companies and the professional services that they offer and the cross selling opportunities that exist. Other appointments to the Trust team
include two employees who have joined us as part of the Mencap 'WorkRight' placement scheme. We are extremely pleased to be in the position
to offer this opportunity through the scheme, and hope that they will find the placement helpful in their career development.
Due to the increase in employees in the past year and the limited space available at our office at Cavendish House, we decided to move
to a self-contained office in Colindale Business Centre in May 2008. We are pleased to report that this new office has been installed with
energy efficient air conditioning and lighting systems, which exceed all Government targets for efficiency, enabling us to fully adhere to
our own policy of green business operation.
We recently embarked on a new strategy to raise our corporate profile in the City and introduce the Group to potential new investors.
Our first step in the process was the appointment in March 2008 of IAF Securities Ltd as our financial advisor and broker. Post-period-end,
in April 2008 we took the decision to trade our shares through PLUS as well as AIM to enhance investor choice, improve liquidity for
shareholders and provide greater access to investors.
Financial Results
The Group's revenue for the year was £3m reflecting the benefits of continuing organic growth and the acquisitions made in the year.
The Group's adjusted EBITDA (earnings before interest, tax, depreciation, amortisation, and share-based payment charges) was £600,673.
The calculation of adjusted EBITDA is shown in note 3.
The Group's profit for the year before taxation was £322,256. Basic and diluted earnings per share were 0.7p per share (Note 3).
The Group secured £1.3m of medium term debt to assist with the acquisitions of Nightingale Chancellors and Dexter Brown Limited. In
addition an amount of £350,000 was raised in April 2007 via a private placing of 3.5m ordinary shares at 10p per share.
The Group's cash position remains strong with £360,685 in the bank at the year end.
The Directors are not proposing a final dividend. As noted in the Company's admission document dated 7 March 2007, the Directors intend
to commence payment of dividends when it becomes commercially viable to do so, subject to the working capital requirements and expansion
plans of the Group and the availability of distributable profits. For the present, the main focus of the Board is to continue delivering
capital growth for our shareholders through acquisitions.
Outlook
Trust is focused on positioning itself as a leading national player in the property management and professional chartered surveying
services industry. Forging strategic partnerships and acquiring complementary companies in the highly fragmented market in which we operate
have been key devices of our growth strategy so far. We aim to continue this approach in the year to come and to this end have a number of
acquisitions in our sights. At the same time, we remain focused on providing the highest standard of professional services to our clients to
ensure continued strong organic growth. Cross selling opportunities across our three divisions of residential and commercial property
management, surveying services and financial services, will also continue to be exploited.
Finally, I would like to thank the efforts of our dedicated, hard-working and committed staff, without whom our considerable progress
would not have been possible, and our shareholders for their continued support.
David Glass
Chairman
7 July 2008
RESIDENTIAL AND COMMERCIAL PROPERTY MANAGEMENT
Trust Property Management Ltd ('TPM')
TPM undertakes residential property management activities and currently has over 14,000 units under management, up from 10,000 units
last year.
During the year, a number of new portfolios have been integrated into the business, as a result of both organic growth and through
various acquisitions. The industry is in a period of great flux, with a large number of small businesses operating in the sector struggling
to provide good services at cost effective prices. TPM is positioned to win this business and as its performance indicates, its quality
service is at a price the market finds acceptable.
New instructions come through various routes including referrals by satisfied clients. The Freehold Management Division is enjoying a
period of unparalleled growth and is expected to report substantial new instructions in the forthcoming year. TPM has been appointed to
numerous blocks of flats in the West Midlands and South-West. This is proof that the goal of delivering a high standard, efficient, cost
effective but yet personalised UK-wide management service centralised from the new Colindale base, is achievable. To accommodate this
growth, TPM's computer systems and software have been improved to facilitate the high level of reporting its resident appointed management
clients rightly require.
Nightingale Chancellors ('Nightingale')
Nightingale, acquired by Trust in June 2007, undertakes professional residential and commercial property management services and
provides chartered surveying services, giving valuations on freehold and leasehold land and buildings. Its strategic acquisition has been a
valuable addition to the Group, expanding its expansion into South West London, an area where Trust previously had limited exposure.
Whilst retaining its trading brand in line with the Group's acquisition ethos, Nightingale's activities have been fully integrated into
the other trading divisions. Survey and valuation work sit comfortably within the ambit of Skylon and residential management within Trust.
This integration has been achieved through intensive training of the branch staff, temporary secondment of Skylon and Trust staff,
improvement in IT systems and the regular attendance at the branch office of members of our senior management team.
Importantly, Nightingale's well known and highly respected former partners were retained as staff within the enlarged group. Their
considerable expertise has enabled the Group to form new relationships as well as further strengthen long-term contacts.
Dexter Brown Ltd ('Dexter Brown')
Dexter Brown, acquired by Trust in October 2007, specialises in the provision of commercial property management services including asset
and property management and investment consultancy. It has an established and loyal client base, including Allianz Insurance plc, Merchant
Investors and Buccleuch Estates. The value of the properties currently managed by Dexter Brown exceeds £600 million.
The bursting of the commercial property investment bubble in mid 2007, coupled with the current financial upheavals and economic
uncertainties, have resulted in property owners increasingly focussing their attention upon the quality of the property management service
they are able to secure. As Dexter Brown moves forward, the effectiveness of routine management and a manager's ability to add asset
management benefits will have a significant impact upon an individual property's performance. These factors have, and will continue to
benefit, niche property managers who are able to offer a high grade service, with Dexter Brown having secured several new significant
management briefs of late. The management is confident of increasing its portfolio under management over the coming months and furthering
strengthening relationships with its established client base.
CHARTERED SURVEYING SERVICES
Skylon Limited (trading as Benjamin Mire Chartered Surveyors) ('Skylon')
Skylon provides a wide range of chartered surveying services to a varied client base including banks, building societies, quoted
companies, charities, private companies, trusts and private individuals. It has acted for approximately 1,600 clients over the past five
years, has achieved ISP 9001 quality management status and is a member firm of RICS.
The management team has continued its efforts to protect Skylon's work flow from the effects of the credit crunch by targeting building
projects where legal requirements and budgetary planning requires works to be undertaken on a recurring basis. Internal reporting procedures
have been improved and the cost monitoring and billing time frames have been shortened. This has flattened out billing cycles thereby
reducing invoicing peaks and troughs. The valuation department has seen a reduction in the number of surveys and valuations undertaken,
primarily due to the slow-down in the property market but Skylon has seen a substantial growth in bank revaluations, leasehold
enfranchisement valuations and commercial rent review instructions. The litigation team has seen a marked increase in expert witness work.
The practice is well set to take advantage of further new instructions in the forthcoming year and has targeted specific areas of
professional work within which to diversify.
FINANCIAL SERVICES
Trust Credit Services Ltd ('TCS')
TCS is licensed to provide credit facilities enabling tenants to spread the costs of ground rent and service charges over the course of
a year. TCS was incorporated in June 2006 and received its Consumer Credit License in January 2007.
The credit crunch offers new opportunities for this division to increase its offering as a tenant liability funding source. The first
full year of trading has been marked by the introduction of a new loan software package, which has been tailored to TCS's requirements. The
success of this operation relies on effective monitoring of client debts and TCS has conducted an increasing number of loans over the period
with great success.
External funding for this division is in place and TCS is now offering the service to all its leaseholders. TCS is able to offer the
funding to freeholders who acquire portfolios of managed premises where service charge arrears exist and this is a useful add-on to the
cross selling of services that are offered to residential-based management clients.
Unaudited Consolidated Income Statement
For The Year Ended 31 March 2008
Notes Year 4 months
ended ended
31 March 31 March
2008 2007
£'000 £'000
Continuing operations
Revenue 2 3,068 96
Operating expenses (2,674) (136)
________ ________
Profit/(loss) from operations 394 (40)
Finance income 23 1
Finance costs (95) (3)
________ ________
Profit/(loss) before tax 322 (42)
Income tax expense (85) (2)
________ _________
Profit/(loss) for the year attributable to 237 (44)
equity holders of the parent
Earnings per share
Basic and diluted (pence per share) 3 0.68 (0.76)
Unaudited Consolidated Statement of Changes in Equity
Attributable To Equity Holders of the Parent
Share capital £'000 Share Share option Retained
Reserve Earnings Total
Premi £'000 £'000 £'000
um
£'000
Balance at 29 November 2006 - - - - -
Loss for the period - - (45) (45)
_____ _____ _____ _____ _____
Total recognised income and - - - (45) (45)
expense
_____ _____ _____ _____ _____
Shares issued in year 294 2,128 - - 2,422
Cost of issue of shares - (319) - - (319)
Employee share based payments - - 6 - 6
_____ _____ _____ _____ _____
Balance at 1 April 2007 294 1,809 6 (45) 2,064
_____ _____ _____ _____ _____
Profit for the year - - - 237 237
_____ _____ _____ _____ _____
Total recognised income and - - - 237 237
expense
_____ _____ _____ _____ _____
Shares issued in year 72 978 - - 1,050
Cost of issue of shares - (54) - - (54)
Employee share based payments - - 80 - 80
_____ _____ _____ _____ _____
Balance at 31 March 2008 366 2,733 86 192 3,377
_____ _____ _____ _____ _____
Unaudited Consolidated Balance Sheet
As At 31 March 2008
ASSETS 2008 2007
£'000 £'000
Non-current assets
Property, plant and equipment 202 139
Goodwill 2,388 1,081
Other intangible assets 1,885 562
________ _________
Total non-current assets 4,475 1,782
________ _________
Current assets
Trade and other receivables 1,165 392
Cash and cash equivalents 361 598
________ _________
Total current assets 1,526 990
________ _________
Total assets 6,001 2,772
________ _________
LIABILITIES
Current liabilities
Trade and other payables 647 266
Obligations under finance leases 17 -
Borrowings 283 32
Tax liabilities 135 35
_________ _________
Total current liabilities 1,082 333
Non-current liabilities
Obligations under finance leases 27 -
Borrowings 1,222 315
Deferred tax liabilities 293 60
_________ _________
Total non-current liabilities 1,542 375
_________ _________
Total liabilities 2,624 708
_________ _________
Net assets 3,377 2,064
_________ _________
EQUITY
Share capital 366 294
Share premium 2,733 1,809
Share option reserve 86 6
Retained earnings 192 (45)
_________ _________
Total equity ATTRIBUTABLE TO EQUITY HOLdERS OF THE 3,377 2,064
PARENT
_________ _________
Unaudited Consolidated Cash Flow Statement
For the Year Ended 31 March 2008
Notes 4 months
Year ended ended
31 March 31 March
2008 2007
£'000 £'000
OPERATING ACTIVITIES
Cash generated from/(used in) operations 5 47 (49)
Income taxes paid (34) (7)
Interest paid (58) (1)
________ _________
NET CASH USED IN OPERATING ACTIVITIES (45) (57)
________ _________
INVESTING ACTIVITIES
Purchase of intangible assets (748) -
Payment of deferred consideration (14) -
Purchases of property, plant and equipment (58) (10)
Acquisitions (818) 37
________ _________
NET CASH FROM INVESTING ACTIVITIES (1,638) 27
________ _________
FINANCING ACTIVITIES
Net proceeds from issuance of ordinary 296 628
shares
Increase in bank borrowings 1,300 -
Repayment of borrowings (142) -
Repayment of obligations under finance (8) -
leases
________ _________
NET CASH FROM FINANCING ACTIVITIES 1,446 628
________ _________
NET(DECREASE)/ INCREASE IN CASH AND CASH (237) 598
EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF 598 -
YEAR/PERIOD
________ _________
CASH AND CASH EQUIVALENTS AT END OF
YEAR/PERIOD 361 598
Bank balances and cash
________ _________
This format represents the indirect method of determining operating cash flow.
* GENERAL INFORMATION
The financial information for the years ended 31 March 2008 and 31 March 2007 set out herein does not constitute the Group's statutory
accounts within the meaning of Section 240 of the Companies Act 1985. The comparative financial information is based on the statutory
accounts for the period ended 31 March 2007.
Statutory accounts for the year ended 31 March 2008 will be delivered to the Registrar of Companies and sent to Shareholders shortly.
The Company's auditors have indicated that they intend to issue an unqualified auditor's report, which will not contain any statement under
Section 237(2) or (3) of the Companies Act 1985, on the statutory financial statements for the year ended 31 March 2008.
Statutory accounts for the year ended 31 March 2007 have been filed with the Registrar of Companies. The auditor's report on those
accounts was unqualified and did not contain a statement under section 237 (2) or 237 (3) of the Companies Act 1985.
The figures for the year ended 31 March 2008 use the same accounting policies as for the year ended 31 March 2007.
These financial statements are presented in Sterling and have been prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards as adopted by the EU (IFRS) and those parts of the Companies Act 1985 that remain
applicable to companies reporting under IFRS and on the historical cost basis.
The financial information contained within this announcement was approved and authorised for issue by the Board on 2 July 2008.
The Annual Report and Accounts will be mailed to registered shareholders at their registered addresses shortly and from the date of
release copies of the Annual Report will be made available to the public at the Company's registered office, Trust House, 2 Colindale
Business Centre, 126 Colindale Avenue, London, NW9 5HD.
The Annual General Meeting will be held at Trust House, 2 Colindale Business Centre, 126 Colindale Avenue, London, NW9 5HD on Tuesday 2
September 2008 at 10:00 am.
2 SEGMENTAL ANALYSIS Professional Property Unallocated/ Consolidated
Services Management Corporate £'000
£'000 £'000 £'000
31 March 2008
External revenue 847 2,210 11 3,068
Total revenue 847 2,210 11 3,068
RESULT
Profit/ (loss) from 383 434 (423) 394
operations
Net finance costs (72)
Profit before income 322
tax
Income tax expense (85)
Profit for the year 237
SEGMENTAL ANALYSIS Professional Property Unallocated/ Consolidated
Services Management Corporate £'000
£'000 £'000 £'000
4 months ended 31
March 2007
External revenue 52 44 - 96
Total revenue 52 44 - 96
RESULT
Profit/ (loss) from 9 (9) (40) (40)
operations
Net finance costs (2)
Profit before income (42)
tax
Income tax expense (2)
Profit for the year (44)
The Group's business segments operate in one geographical area which is the Group's home country, United Kingdom.
3 EARNINGS PER SHARE AND ADJUSTED Year 4 months
EBITDA ended ended
31 March 31 March
2008 2007
£'000 £'000
Earnings/(loss) attributable to
equity holders of the parent which 237 (44)
is used in the calculation of basic
and diluted earnings per share
______ ______
Number of shares Year 4 months
ended ended
31 March 31 March
2008 2007
Weighted average number of shares
used in the basic earnings per share 34,639,594 5,919,824
calculation
Effect of dilutive share options 54,328 -
Weighted average number of shares
used in the diluted earnings per 34,693,922 5,919,824
share calculation
______ ______
Basic earnings per share (p) 0.68 (0.76)
Diluted earnings per share (p) 0.68 (0.76)
The calculation of adjusted EBITDA
is as follows:
Year 4 months
ended ended
31 March 31 March
2008 2007
£'000 £'000
Profit/(loss) for the year/period 237 (45)
Income tax expense 85 2
Finance costs 95 3
Finance income (23) (1)
Share-based payment charges 80 6
Amortisation of intangible assets 43 1
Profit from operations before 517 (34)
amortisation and share based
payments
Depreciation of property, plant and 83 4
equipment
Adjusted EBITDA 600 (30)
4 ACQUISITIONS DURING THE YEAR
On 9 June 2007, the Group acquired Nightingale Chancellors, a property services business, for a total consideration of £710,000. The
fair values of the assets acquired are set out in the table below.
Fair Value
£'000
Intangible assets - customer relationships 445
Goodwill 290
Total consideration including direct costs 735
________
Satisfied by:
Cash consideration 660
Deferred consideration - cash 50
Costs of acquisition 25
735
The book value of the assets and liabilities acquired was £Nil.
Nightingale Chancellors generated revenue of £463,000 and profit before tax of £97,000 in the post-acquisition period from 9 June 2007
to 31 March 2008. If the acquisition of Nightingale Chancellors had occurred on 1 April 2007, the Group's revenues would have been £128,000
higher and the group profit before tax would have been £32,000 higher.
The goodwill is largely attributable to business reputation, workforce and synergies which have not been recognised as separate
intangible asset on the basis that they are not separately identifiable and their fair value cannot be measured reliably.
The deferred cash consideration is payable in two equal instalments of £25,000 on each of 9 June 2009 and 2010.
4 ACQUISITIONS DURING THE YEAR (continued)
On 1 October 2007, the Group acquired 100 per cent of the issued share capital of Dexter Brown Limited for total consideration of
£1,500,000 comprising cash of £800,000, and 3,684,211 Ordinary Shares of lp each valued at 19p each. This transaction has been accounted for
by the purchase method of accounting.
The book values and fair values of the assets acquired are set out in the table below.
Book Fair
value value
Net assets acquired: 2008 2008
£'000 £'000
Intangible assets - customer - 834
relationships
Property plant and equipment 21 21
Trade and other receivables 85 85
Bank and cash 99 99
Trade and other payables (205) (205)
Deferred tax liabilities - (234)
- 600
Goodwill 1,017
Total consideration including direct 1,617
costs
Satisfied by;
Cash 800
Shares issued to vendors 700
Costs of acquisition 117
1,617
Dexter Brown Ltd customer relationships are being amortised over 20 years. The goodwill has been subject to impairment review and the
directors believe no adjustment is necessary.
Dexter Brown Limited generated revenue of £545,000 and profit before tax of £177,000 in the post-acquisition period from 1 October 2007
to 31 March 2008. If the acquisition of Dexter Brown Limited had occurred on 1 April 2007, the Group's revenues would have been £600,000
higher and the group profit before tax would have been £260,000 higher.
The fair value of the share consideration was based upon the market value of the company's shares on AIM at the time of the transaction.
The goodwill is largely attributable to business reputation, workforce and synergies, which have not been recognised as separate intangible
assets on the basis that they are not separately identifiable and their fair value cannot be measured reliably.
On 13 November 2007 the Group acquired a portfolio of residential property management contracts from Paige & Petrook Limited. The total
consideration of £86,862 including direct costs of acquisition of £6,862 approximates to the fair value of the intangible assets which have
been recognised on acquisition. The consideration was settled by a cash payment of £40,000 on completion with the remaining £40,000 due for
payment within 12 months of completion.
As the portfolio has been incorporated within the Group's property management segment at the date of acquisition, revenue and profit
before tax in the post acquisition period cannot be separately identified.
5 RECONCILIATION OF PROFIT/(LOSS) BEFORE TAX TO Year ended 4 months ended
NET CASH FROM / (USED IN) OPERATING ACTIVITIES 31 March 31 March
GROUP 2008 2007
£ £
Profit/(loss) before tax 322 (42)
Adjustments for:
Depreciation of property, plant & equipment 83 4
Amortisation of intangible assets 43 1
Finance costs 72 3
Share-based payment charge 80 6
________ ________
Operating cash flows before movements in 600 (28)
working capital
Increase in receivables (688) (24)
Increase in payables 135 3
________ ________
Cash generated from/(used in) operations 47 (49)
________ ________
This information is provided by RNS
The company news service from the London Stock Exchange
END
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