Birkby PLC - Final Results

RNS No 7376u
BIRKBY PLC
1st July 1997


FULL DETAILS

             Preliminary results for the year to 31 March 1997

         Proforma results include a full year's contribution from
                           British Coal Enterprise
                                 KEY POINTS
                               
*      Proforma profit before tax up 20% to # 10.1m (1996: #8.4m)
       including exceptional net  profit of  # 0.7m on sale of Hill Hire
       plc stake & Milbank Foods (Statutory profit before tax: # 9.1m)
     
*      Proforma earnings per share of 15.4p (1996: 13.8p) (Statutory
       earnings per share: 14.0p)

*      Proposed net final dividend of 6.2p, making a total for the year of
       8.5p
     
*      Successful acquisition of British Coal Enterprise ("BCE") in
       January 1997, almost doubling the number of sites in the workspace
       portfolio

*      Significant growth of managed workspace division - IMEX:
       -    BCE swiftly integrated, adding 1.5m sq ft of lettable space
       -    6 further sites acquired in Yorkshire
       -    102 workspace centres with annual licence income of #13.4m 
            (1996: # 8.8m)
       -    IMEX Enterprise (BCE) current cash equivalent occupancy
            rate of 76.4%
       -    cash equivalent occupancy rate of established IMEX
            centres increased to 83.4%
       -    proforma pre-tax profit # 5.5m, representing 59% of Group
            proforma profit (1996: 38%)
          
*      Improvements in quality of managed retailspace portfolio, In Shops:
       -    new centres opened in Cannock and Blackpool
       -    refurbishment programme to enhance occupancy and licence
            income
       -    disposal of four unprofitable centres
       -    tough trading conditions prevail but signs of improvement
            now showing
       -    physical occupancy rate up 2%, achieved through increased
            marketing efforts
       -    two indoor markets in Glasgow acquired after the year end
       -    pre-tax profit of # 2.9m (1996: # 3.1m)

*      Disposal of loss-making discount food retailer, Milbank Foods,
       completed in June 1997
       -    long-term licence arrangement agreed in 15 In Shops
            centres
       -    repayment to Birkby of # 3.2m inter-company loan

*      Increased activity across all divisions in new financial year.
       Confident of further steady progress

Press enquiries:

Birkby plc:
Bill Cran, chief executive
Kim Taylor Smith, deputy chief executive
0171 377 6677

Biddick Associates:
Emma Cameron
0171 377 6677


Announcing Birkby PLC's preliminary results, Bill Cran,  chief
executive, said;

"The  most significant event for Birkby in the year  ended  31
March  1997  was  the successful acquisition of  British  Coal
Enterprise  Ltd  ("BCE").  In one move, Birkby almost  doubled
the   number  of  workspace  centres  managed  by  the  Group,
underlining  our  position  as the UK's  leading  provider  of
managed   commercial  property  to  small  and  medium   sized
businesses.  The acquisition of BCE also marked the completion
of  our programme to reinvest the proceeds of the sale of  our
remaining stake in Hill Hire plc.

"It has also been a year of growth within our existing network
of  centres and we have achieved increases in both income  and
occupancy  levels.   Birkby now operates from  161  locations,
providing  5.4  million square feet of  space  to  over  4,000
licensees  on  'easy-in easy-out' terms.  Annual  licence  fee
income totals over # 32.4 million.

Results

"The results outlined today are evidence that our strategy  to
concentrate on the core activity of space management continues
to  bear  fruit,  leading  to  increases  in  pre-tax  profit,
earnings per share and dividends.

"In  the  presentation of our results for the  year,  we  have
included a proforma profit and loss account, incorporating the
results  of BCE for the period commencing 1 April  1996  to  7
January  1997, the date of the completion of the  acquisition.
We  hope  that this will facilitate a better understanding  of
the performance of BCE under Birkby's management.

"I  am  delighted to announce that, in the year under  review,
the  Group  achieved a proforma profit on ordinary  activities
before  taxation of #10.1m (statutory profit #9.1  million).
This  figure  includes an exceptional  net  profit  of  #0.7
million  on the disposal of the remaining stake in  Hill  Hire
plc  together with an exceptional loss on the sale of  Milbank
Foods,  the  discount  food retailing  subsidiary.   Excluding
exceptional items, the proforma profit before tax  was  #9.4
million (statutory profit #8.4 million), representing  a  15%
increase on the previous year (1996: #8.2 million).

"Proforma  earnings  per share, excluding  exceptional  items,
have  increased  by  7.5%  from 13.3p  to  14.3p,  despite  an
increase  in  the  rate of taxation to 25%  from  20%  in  the
previous period (statutory earnings per share: 12.9p).

"In accordance with best practice, we commissioned an external
valuation of the property portfolio this year, which  has  led
to  a  #3.0 million net increase in the revaluation reserve.
As at 31 March 1997, consolidated net assets have increased by
18.6%  to  #64.3 million (1996: #54.2 million),  while  net
borrowings  total  #29.0  million  (1996:  #22.9  million)
including  borrowings associated with Manor Credit  of  #8.1
million.   Net gearing (including cash) remains a  modest  45%
(1996:   42%).   We  are  currently  reviewing   our   banking
arrangements  with the intention of securing additional  lines
of  credit to enable gearing to increase to 70% in the future.
The  Board  considers  that a gearing limit  of  70%  provides
sufficient resources for further complementary acquisitions.

Dividend

"The  Board  is  proposing the payment of an  increased  final
dividend  of  6.2p  net (1996: 5.8p), up 6.9%  on  last  year,
giving a total net dividend for the year under review of  8.5p
(1996:  8.0p).  The total dividend is covered  more  than  1.8
times  by  proforma  earnings per share (1.6  times  statutory
earnings  per share).  It is intended that the final  dividend
will  be  paid  on  10  October 1997 to  shareholders  on  the
register on 5 September 1997.

Board Change

"Over the past year, we have developed separate Boards for the
operating subsidiaries, each with their own managing director.
Following the successful sale of Milbank Foods, Mr Derek  Hine
has resigned as managing director - Operations of Birkby.    I
would  like  to pay tribute to Derek Hine for his contribution
to  the  Group and wish him well in the future.  The  managing
directors  of  the two principal operating subsidiaries,  IMEX
and In Shops, will now report directly to the Board.

OPERATING REVIEW

"The most visible step in the development of our business  was
the  acquisition  of British Coal Enterprise  Ltd  in  January
1997.  However, we have also been busy buying other new sites,
developing  existing  ones and disposing  of  under-performing
centres. There have also been internal changes aimed at making
us  more  efficient and better able to compete in a  demanding
market place.

Managed workspace - IMEX, IMEX Enterprise and Bridge House

"In  aggregate, the division achieved a proforma profit before
tax  of  # 5.5 million for the year (statutory profit:  #4.5
million) (1996: #3.2 million), based on an annual income of                    
#16.9  million (1996: #8.7 million).  IMEX and IMEX Enterprise
(formerly  BCE) contributed #4.0 million and  #1.5  million
respectively and the enlarged workspace division now  accounts
for  more than 58.8% of Group proforma profits.  The workspace
division now manages 102 centres in total, providing over  4.4
million  square feet of licence space across 3,200  units.  We
have in excess of 2,200 licensees, producing an annual licence
income,  excluding  services, of over #13.4  million.   Each
percentage  point  increase in the cash  equivalent  occupancy
rate leads to an extra # 165,000 of Group profit.

"On  a like for like basis, the cash equivalent occupancy rate
for  the established IMEX operation, excluding BCE, was  83.4%
at 31 March 1997 (1996: 82.9%).

"The  most significant acquisition during the period was  that
of  BCE.   This added 1.5 million square feet of high  quality
workspace across 50 centres, expanding our coverage in England
and  extending  our  network into  Scotland  and  Wales.   The
portfolio  will operate as a separate company  under  the  new
name  of  IMEX  Enterprise,  in  the  short  to  medium  term.
Operationally, the portfolio has been swiftly integrated within 
the existing IMEX division through a new, shared management 
structure.  This will enable us to take  advantage of increased 
operating efficiencies and consequently better margins.                
Intensive marketing and letting activity has been our priority               
and has led to a significant increase in the current cash             
equivalent occupancy rate to 76.4%. Continued improvements in          
occupancy have resulted in an uplift in the property valuation                
to #26.4 million, which compares with the valuation of #24.0 
million at the date of the acquisition and the net purchase 
consideration of #16.7 million, including costs.

"Notable  successes in raising occupancy levels  include  IMEX
Business  Centre in Durham, where we started with  one  tenant
and  which is now fully let.  The Seaham Grange centre in  Co.
Durham  is  now  also 100% occupied and the Fountain Business
Centre in Scotland has doubled in occupancy from 44% to 88%.
As a specialist provider of small unit space, we have 
sub-divided larger units at centres such Wansbeck. Here, 50% 
of the smaller sized  units have already been let.

"In  addition  to IMEX Enterprise, a number of  other  centres
were  added during the year.  In June 1996, we acquired  Black
Rock Mills in Huddersfield, comprising 220,000 square feet  of
vacant industrial buildings in 15 acres of land. We have
successfully completed the conversion of Black Rock into 
multiple small units and have attracted significant interest 
in the site. To date, over 45% of available space has been let,        
providing an annualised income in excess of # 100,000.

"In  March 1997, we acquired five workspace centres comprising
over  90,000  square feet of licence space, for #1.7  million
from Sheffield City Council.  The Sheffield centres fill a gap
in our Yorkshire portfolio and use the existing management
structure.

"Opportunities for growth within the existing portfolio arise
from the development of surplus land and the conversion of
derelict buildings.  Two examples this year are the four new
units at Brighouse, Yorkshire and the development of unutilized
space at Atlas Business Centre in London, which will provide
a further 12,000 square feet of licence space.

"Included within the workspace division results is a small
serviced office network, which trades as Bridge House.
Operating from six locations and providing 331 units, Bridge House
had a record year.  It has a current cash equivalent 
occupancy rate of 84.0%.

"The  management structure of the workspace division has
been reorganised to take account of the enlarged portfolio.
Mr Bob Chapman has been appointed managing director, having
worked at senior management level within both the retail
and workspace divisions.   Furthermore, we have divided the 
network of centres into  three  regions - Scotland & the 
North East, Yorkshire  & the  North West, and the Midlands, 
Wales & the South - with  a designated Director and central
office for each region.

Managed Retailspace - In Shops

"Demand for retail units remains geographically patchy, with 
improvements in certain areas, notably West Scotland, the
North East and North West.  Whilst there are signs of recovery
within  the general retail economy.  In Shops continues to be
affected  by  a  slow spending recovery in  the  lower  income
sector,  from which our retailers' customer base is  typically
drawn. Through increased marketing efforts, we have been able
to  increase physical occupancy by 2% over the year.  However,
this  has been achieved through discounting licence rates with
the  consequence that the cash equivalent occupancy  rate  was
76.4% (1996: 77%).

"For  the  year under review, the division returned  a  profit
before tax of #2.9 million (1996: #3.1 million) representing
31.8%  of Group proforma profits.  Operational gearing  within
the retailspace division remains high as each percentage point 
increase in the cash equivalent occupancy rate generates an
additional #225,000 profit before tax for the Group.

"We are committed to improving further the quality of the
retail portfolio through the refurbishment of existing centres,
the opening of new centres in locations that offer a return that
meets our investment criteria and the disposal of unprofitable
centres.  In April 1996, we acquired an established indoor market
in Blackpool, comprising 10,000 square feet of net licence space,
across 89 units.  Since its acquisition, we have completed a limited
refurbishment, including the establishment of a cafe - a major
contributor to increasing football.  In August 1996, we opened a
centre within the new Cannock shopping development, where we are
anchor tenants trading alongside Argos.  The 55 unit retail centre
has remained 100% occupied since the date of opening.  During the
year, we have disposed of four unprofitable centres in Carlisle, 
Kirkcaldy, Redcar and Southend.

"The upgrading of existing centres is selectively undertaken,
where we can see the potential of generating our minimum 
return on the capital cost of the project.  In March 1997, we
completed the refurbishment of Northfield, Birmingham which has
previously suffered from a poor occupancy level.  It re-opened
fully occupied and customer count has increased.  The current
refurbishment programme has targeted a further eight retail
centres for upgrade.

"We are still actively seeking new centres where they meet our
minimum  target return. Since the year end, we have  exchanged
contracts for the acquisition of a leasehold interest on two 
established indoor markets within the Clyde Regional Shopping
Centre, Glasgow.  Together they add a further 47,500 square
feet of licence space across 130 units.  The location of the
markets means that they can easily be incorporated within the
existing management sructure, offering savings on operating
efficiencies.

"Today, the retailspace portfolio encompasses 59 centres, providing
one million square feet of licence space across 3,300 units and
generating an annual licence income of #19 million.

Discount Retailing  -  Milbank Foods Limited ('Job Lot')

"In  an  extremely  competitive trading  environment,  Milbank
reported an increased loss before tax in the year under review
of #211,000 (1996: #94,000 loss).  In March, we sold part of
our  investment in Milbank to Dawn Til Dusk Holdings plc, an
existing In Shops licensee. In June 1997, we announced the sale
of our remaining investment and therefore we have fully provided 
for the estimated loss on disposal this year. The overall loss               
has been reported as a discontinued business. Under the terms of  
the sale agreement, the new owner has entered into long term
license arrangements to occupy each of the 15 outlets located 
within the In Shops centres. The proceeds from the repayment of
the inter-company loan of #3.2 million will ultimately be 
reinvested in the retail and workspace divisions.

Instalment Credit - Manor Credit

"Manor Credit has continued to make good progress and reported
a  further year of record profit. At 31 March 1997,  the  loan
book  had  increased  to  #8.7 million, spread across 715
agreements.  For the year under review, Manor Credit reported a 
profit before tax of #434,000 (1996: #400,000) representing 
4.6% of Group proforma profits.  The acquisition of BCE has
provided the opportunity for Manor Credit to offer its services
to BCE tenants, particularly in the Yorkshire area.

Other Developments

"We have implemented a number of changes to the infrastructure
of the Group during the year.  This will enable us to achieve
greater internal efficiencies and postion the Group for its
next stage of growth.

"In January 1997, national sales office was set up, providing
a central point for letting enquiries.  A centralised system
for repairs and maintenance has also been set up within Property,
along with the recruitment of dedicated personnel, which is 
expected to provide further cost efficiencies and improved
service levels.

Current Trading

"With the disposal of Milbank Foods, a loss making peripheral 
business that took up considerable management time, we are
now tightly focused on our core business.  The new financial
year has started well, with increased activity in all 
divisions.  The Management team has reported stronger 
business confidence and we anticipate increased lettings and
fewer departures.

We have ambitious plans to grow the number of workspace and
retail centres throughout the UK and can assimilate extra
centres with little incremental cost, using the nationwide
management infrastructure that we have put in place.  We
have a dedicated team actively seeking properties, focusing
in particular on Scotland and the North East for both
workspace and retailspace, and on London for workspace.  
We are well resourced and have set ourselves the target of
adding a further one million square feet of space during
the current year.  At the same time, we will also continue
to enhance the occupancy levels of our existing portfolios.
We believe that the business offers tremendous potential and
I look forward to the challenges of the current year with
optimism".


Consolidated profit and loss account for the year ended
31 March 1997

                     Note      *Proforma    Statutory    Statutory
                                    1997         1997         1996
                                    #000         #000         #000

Turnover
Existing Operations        36,540     36,540    35,566                      
Acquisitions                4,894      1,706         -
                           ------     ------    ------
Continuing operations      41,434     38,246    35,566
Discontinued operations    19,687     19,687    20,663
                           ------     ------    ------
                           61,121     57,933    56,229
Cost of sales             (37,400)   (36,640)  (38,390)
                           ------     ------    ------
Gross profit               23,721     21,293    17,839

Administration expenses   (12,517)   (11,760)   (9,522)
Other operating income        210        210        52
Income from associated
undertakings                   95         95     1,618
                          ________    _______   ______
Operating profit                                
Existing operations         8,806      8,806     8,538
Acquisitions                2,795      1,124         -
Discontinued operations       (92)       (92)    1,449
                          ________     ______    ______
                           11,509      9,838     9,987

Profit on part disposal of                      
Hill Hire plc               1,723      1,723         -
Loss on investment in                           
Milbank Foods Ltd          (1,000)    (1,000)        -
                           _______    _______   _______
Profit on ordinary                              
activities before interest 12,232     10,561     9,987
Interest receivable and                         
similar income                395        395       315
Interest payable and                            
similar charges            (2,545)    (1,831)   (1,866)
                           _______    _______   _______
Profit on ordinary                              
activities before          10,082      9,125     8,436
taxation                           
Tax on profit on                                
ordinary activities        (2,519)    (2,281)   (1,683)
                           _______    _______  _______
Profit for the                                  
financial year              7,563      6,844     6,753
Dividends            3     (4,187)    (4,187)   (3,919)
                           _______    _______  ________
Profit retained for                             
the year                    3,376      2,657     2,834

Earnings per share:  4
Before exceptional
items                        14.3p      12.9p     13.3p
FRS 3 basis                  15.4p      14.0p     13.8p

*  See note 1

Consolidated balance sheet as at 31 March 1997

                                     1997        1996
                                     #000        #000
Fixed assets                                  
Tangible fixed assets              95,533       66,808
Investments                           163       11,220
                                   ------       ------
                                   95,696       78,028
Current assets                                
Stocks                              5,893        5,909
Debtors: due after more than one
         year                       4,644        3,810
         due within one year        9,201        6,324
Cash at bank and in hand              741          227
                                  ________     _______ 
                                   20,479       16,270

Creditors: amounts falling due    (31,694)     (25,727)
           within one year        --------     -------

Net current liabilities           (11,215)      (9,457)
                                  --------     -------
Total assets less current
liabilities                         84,481      68,571
Creditors: amounts falling due
           after more than one
           year                    (17,429)    (12,555)

Provisions for liabilities and
charges                               (497)       (199)

Accruals and deferred income
Licensees' deposits                 (2,293)     (1,651)      
                                   --------     -------
Net assets                          64,262      54,166
                                   -------      -------

Capital and reserves                
Called up share capital              2,457       2,447
Share premium account               21,943      21,770
Revaluation reserve                  3,686         729
Special capital reserve              2,359       3,581
Merger reserve                      15,333      15,333
Capital reserve                      5,349          50
Profit and loss account             12,740      10,256
                                    ------      ------
Equity shareholders funds           63,867      54,l66
                                   -------      ------
Minority interests                     395           -
                                   -------      ------
                                    64,262      54,166
                                   =======      ======


 Financial Notes


1.   The  proforma figures include the results of British Coal
     Enterprise Ltd from 1 April 1996 rather than the actual 
     date of acquisition, 7 January 1997.

2.  The operating profit from Hill Hire Plc has been shown
    as discontinued following the sale of the Group's remaining
    interest on 25 April 1996.  The operating loss from Milbank
    Foods Ltd has been shown as discontinued following the 
    completion of the sale on 4 June 1997.

3.  The final dividend of 6.2p is payable on 10 October 1997 to
    shareholders on the register on 5 September 1997.

4.  The calculation of earnings per share under FRS 3 is based on
    the proforma profit for the period, after taxation, of
    #7.55m (statutory: #6.84m, 1996: #6.75m) and on the average
    weighted number of ordinary shares in issue during the year
    of 48,978,000 (1996: 48,812,000 ordinary shares).  The
    earnings per share excluding exceptional items is before the
    net profit on the disposal of the remaining stake in Hill
    Hire plc, together with the exceptional loss on the sale of
    Milbank Foods Ltd.

                                            Earnings     Earnings
                                           per share     per share
                                  before exceptional     under
                                               items     FRS 3  

    Year ended 31 March 1997  -  proforma      14.3p      15.4p
    Year ended 31 March 1997  -  statutory     12.9p      14.0p
    Year ended 31 March 1996                   13.3p      13.8p
     
5.   The financial information set out above does not constitute
     the Company's Statutory Accounts for the years ended 31
     March 1996 or 31 March 1997 but is derived from those
     accounts.  Statutory accounts for 1996 have been delivered
     to the Registrar of Companies and those for 1997 will be
     delivered following the Company's Annual General Meeting.
     The Auditors have reported on those accounts; their reports
     were unqualified and did not contain statements under
     Section 237 (2) of (3) of the Companies Act 1985.

6.   Copies  of  the Annual Report and Accounts for  the  year
     ended 31 March 1997 will be dispatched to shareholders in due
     course.  Copies will be available from the Company Secretary,
     Birkby PLC, Warwick House, Spring Road, Hall Green, Birmingham
     B11 3EA and the Company's Registered Office.


END