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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Pacific Global Holdings Plc | LSE:PCH | London | Ordinary Share | GB00BKXP5L71 | 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% | 2.00 | 1.50 | 2.50 | 2.00 | 2.00 | 2.00 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Business Services, Nec | 0 | -102k | -0.0013 | -15.38 | 1.58M |
From Feb 2020 to Feb 2025
TIDMPCH
RNS Number : 3361P
Pochin's PLC
30 September 2011
Pochin's PLC
Preliminary Results for the year ending 31 May 2011
Pochin's PLC ("Pochin" or "the group") the construction and property group announces its preliminary results for the year ending 31 May 2011.
Chairman's statement
The group result for the year ended 31 May 2011 shows a profit on continuing activities before taxation of GBP0.7m (2010 re-presented: GBP13.7m loss). Additionally, there was a loss before taxation on discontinued activities of GBP4.8m (2010: GBP2.9m loss). The directors do not recommend the payment of a final dividend.
It is pleasing to report a return to profit on continuing activities, albeit modest and partly arising from the favourable resolution of previously estimated liabilities.
In assessing the performance of the group during the year, regard has to be given to the economic climate in the region in which the group principally operates, namely North West England, and to the general conditions pertaining to the property and construction industries. With the single exception of the London area, there has been no recovery in commercial property values during the year, and the level of activity in the construction industry has been recently stated by the Office of National Statistics to be at its lowest for 30 years. In the North West, commercial rental values are weak and falling in some areas, notably in retail property. Flagging occupier demand lies behind this trend, and it continues to result in low levels of privately funded development activity. Few schemes can be appraised as profit making, and fewer still can be undertaken speculatively as a result of bank funding being, understandably, available only on the strictest criteria. These restricting influences in the private sector combine with the much publicised retrenchment of publicly funded infrastructure projects to make for tough conditions for the group's principal activities. Deflationary forces continue to stalk the property industry and, with the prevailing moods of anxiety and pessimism, they are unlikely to be successfully resisted without some form of renewed fiscal or monetary stimulus.
It is in this context that the decision was taken during the year to dispose of the group's concrete pumping subsidiary. It has been loss making for many years, and although acknowledgement should be given to the efforts in recent times to bear down on costs and to the successfully increased levels of plant utilisation, the economic conditions described above do not permit its continuation as a core group activity. This gives rise to considerable uncertainty for the 118 employees engaged in this activity and great thanks are due to them for their commitment during the year to improve the division's performance in increasingly competitive market conditions. It is therefore re-assuring to be able to report that discussions with a prospective purchaser of the concrete pumping corporate entity have reached an advanced stage.
For this reason, the results for the division have been treated as a discontinued activity in the accounts, and best estimates of the costs of the proposed disposal have been provided for in the balance sheet at the year end. As a result, the 2010 results have been re-presented.
The decision to dispose of the concrete pumping business will return the group to its original model of combining building and construction with (principally commercial) property investment and development. In the year to 31 May 2011, although construction turnover fell significantly, its contribution to the group's results did not deteriorate markedly thanks to careful estimating and tight cost control. Valuable contracts of acceptable size and margin continue to be won, and current clients include Rolls Royce, Nestle,Liberty Properties and Robinsons Brewery. The group retains its good reputation for quality building and reliable service in the region. It continues to work closely and successfully with an established group of subcontractors and professional advisers who support the in-house team, and all parties have risen to the challenge of winning and successfully completing construction contracts in a fiercely competitive market. These combined efforts are greatly appreciated.
The group's core commercial property investment portfolio continues to perform steadily with few voids and solid rental income. Traditionally this has underpinned a degree of profitable development activity which, as outlined above, current conditions do not permit. Commercial and residential land values have fallen over the last three years, and there will come a point where profitable development becomes viable once again. Meanwhile the group's land bank is largely retained, being valued in the accounts at the lower of cost or net realisable value. It should eventually enable the resumption of the profitable development activity which has served the group well in the past.
In my statement last year, and in subsequent updates, references were made to the financial exposure arising in our joint venture activities. It is of some comfort to be able to report that the principal liabilities, namely those which arose from the group's involvement in the two large refurbished Liverpool office properties, and in an office scheme at Heald Green, Manchester, have now been settled and accounted for as at the year end.
Having now achieved the resolution of the joint venture liabilities, to secure the group's stability and a resumption to overall profitability it remains necessary to complete the proposed disposal of the concrete pumping business. In addition, the disposal of a number of non-core properties is being targeted so that a more appropriate level of gearing may be restored to the balance sheet, which inevitably reflects the exposure to speculative development, largely in joint venture, committed some years ago in buoyant market conditions. It is right here to acknowledge the steadfast support of the group's principal bankers, The Royal Bank of Scotland PLC, who have worked closely with the group while it adjusts to the imperatives of the market in which it operates.
In recent months significant steps have been taken to ensure that the group is best placed to weather the economic storm which continues to gather. In particular, the settling of the main joint venture liabilities and the proposed sale of the concrete pumping business will each help to secure a sound future for the core activities. Inevitably and regrettably, the prevailing conditions make for unsettling times for employees and inadequate returns for shareholders. The continuing loyal support of all stakeholders is greatly appreciated.
Richard Fildes
Chairman
30 September 2011
Business review
Group overview
The construction and property markets in which the group operates have seen little or no improvement during the year. The recent UK Construction Purchasing Managers' Index survey has confirmed the slowing of growth in the construction sector and property values remain subdued, again with limited signs of recovery.
With these factors in mind, the policy of exiting joint ventures to reduce group liabilities has continued. The concrete pumping division has been recognised as no longer core to group activities and negotiations to dispose of the business are well advanced. In a similar way, speculative residential developments are no longer being pursued. The legacy schemes within the residential division are now controlled by the property division.
The continued downturn in the construction sector had an adverse effect on group revenues in the year, with turnover down by 10% to GBP59.3m (2010 re-presented: GBP65.7m). Turnover in the construction division fell by 32% to GBP41.6m (2010: GBP61.0m), however it is reassuring to report that it has a firm order book of GBP53.0m secured at the date of this report. The property division, benefiting from the sale of the Birkenhead site, had a turnover of GBP14.7m (2010: GBP1.2m). Despite the reduced turnover, net profit before tax, excluding the pumping division, was GBP0.7m (2010: re-presented GBP13.7m loss). This was chiefly due to improving margins on current contracts, successful completion of existing projects and a significantly reduced requirement for further impairments.
GBPm Continuing Discontinued Total 2011 2010 ---------------------------- ----------- ------------- ----------- ------- Operating profit/(loss) - own 3.8 (1.2) 2.6 0.6 Operating profit/(loss) - joint ventures 0.7 - 0.7 (1.9) Property revaluations (0.1) - (0.1) 0.5 Impairment of investments (2.7) - (2.7) (11.2) Impairment of inventories (0.8) - (0.8) (3.5) Costs of restructure/remeasurement (0.2) (2.6) (2.8) (0.7) Cost of disposal - (1.0) (1.0) - ---------------------------- ----------- ------------- ----------- ------- Group profit/(loss) before taxation 0.7 (4.8) (4.1) (16.2)
Staff levels have reduced during the year in line with the reduced turnover and the number of employees fell by 15% to 262 at the year end (2010: 308). Despite this reduction, the group has retained its core skills and capabilities to allow it to continue to provide a first class service to its customers. This is evident in the group's strong reputation and the volume of repeat business secured from our loyal clients. The core values of the group remain unchanged and it is these that will provide the platform for a better focused, restructured group in the future. As always, employees remain the key asset to the group and they have shown their continued support to the group in testing times. The group looks forward to being able to repay that support as and when markets recover.
Group outlook
The actions taken in the last year in reducing outstanding liabilities and the proposed disposal of the concrete pumping business will leave the group better placed to control its future. A more streamlined group will be able to focus on the core activities of property (development and investment) and construction, without the distraction of legacy issues and loss making entities. The strong reputation and capabilities of these two businesses will allow the group to leverage opportunities from existing and new clients, with the intention of seeking out further opportunities for growth in other parts of the UK through existing client relationships. The restructured group will allow it to be more flexible, responsive and better able to capitalise on opportunities as the market recovers.
Divisional review
Construction
Following a positive start to the year, the construction division suffered from reduced turnover as contracts secured when the market was more buoyant came to an end and were not replaced. Some previously secured contracts never started on site as customers either withdrew or delayed the start date for various reasons, including lack of funding and constraints on planning. Public sector clients delayed projects before and after last year's government spending review in anticipation of the unknown or as a result of cuts in public spending. The reduction in turnover was therefore due mainly to the reduction in public sector work. However, as a result of the good relationships maintained with private sector clients, approximately 80% of work secured in the current financial year will be from the private sector.
Although total turnover fell to GBP41.6m (2010: GBP61.0m), as a result of good final account negotiations on completed contracts and improved margins on current contracts the division delivered a profit of GBP0.2m before restructuring costs of GBP0.2m. The result also reflected the good mix of clients and lack of dependency on any one particular sector, which also provides for a balanced portfolio moving forward.
As part of the division's growth strategy, work has been tendered and secured out of traditional areas, including a residential redevelopment at Hyde Park, London, industrial premises for Nestle in Buxton and a retail store at Egham, Surrey. Current tendering opportunities also include a project for student accommodation in Edinburgh.
The special projects team has continued to grow and having profitably completed approximately GBP3.5m of work last year, it has in excess of this figure already secured in the current financial year.
Despite difficult trading conditions, the business has maintained its reputation for excellence in performance and this has been acknowledged by a RoSPA Gold Award for safety, a CSS National Site "Considerate Contractor" Silver Award and winning the 2011 Insider Property North West "Contractor of the Year" Award.
Property (including Residential)
Due to continued uncertainty in the property market, there have been no speculative development schemes and a commitment only to limited investment where an end user and exit strategy are in place.
Following the sale of the retail scheme at Birkenhead, a number of smaller retail schemes have been secured during the year.
The investment portfolio, consisting of over 40 income generating properties located in the North West and North Wales, was valued at the year end at GBP33.0m (2010: GBP29.1m). The increased value during the year is attributable to acquiring full control of Lincoln House Properties Limited and Manchester House Properties Limited (previously held in joint venture). Investment properties have been valued at the same levels as prior years by the directors having regard to property yields data for the region supported by advice obtained by external professional valuers. The main focus has been on the good management and retention of tenants and it is therefore pleasing to report that occupancy levels have been maintained at 96%.
Throughout the year, assets have been sold in order to continue to reduce debt and, at Ellesmere, sales to McCarthy & Stone, Shropshire County Council and Bloor Homes have become unconditional. Planning permission for Midpoint 18 Phase 3 has been renewed and work continues on securing the Middlewich bypass in order to create development and investment opportunities for the future.
Some progress has been made during the year on residential schemes by completing and selling units at Burslem and Winsford. However, the market continues to be depressed and difficulties with Homes and Communities Agency funding has meant that some affordable housing schemes have been cancelled and land bank sales have been slow. No new speculative work is being undertaken and completion of historical residential schemes is being carried out within the property division (including residential).
Of the joint ventures, Manchester Technopark Limited and Keele Park Developments Limited continue to perform well given current market conditions. Aside from these, other joint venture schemes have struggled financially and therefore the focus has been to extricate group involvement from these schemes. To this end, agreements have been successfully concluded with external funders to settle the guarantee liabilities associated with the schemes at Heald Green, Manchester and Exchange Flags, Liverpool.
Since the year end, the group has acquired full control of UKLP (BrynCegin) Limited, which has allowed the group to take full control of the development of land at Park Bryn Cegin, Bangor. Good progress has also been made at Hawarden Business Park, Deeside, with further lettings achieved to Airbus.
The group's strategy remains to exit joint ventures on acceptable terms wherever possible and to develop and manage new opportunities through the group's own in-house property team.
The property division (including residential) made a net profit before tax of GBP2.5m (2010: GBP13.0m loss).
Concrete Pumping
The continued downturn of the construction market and lack of public sector funded infrastructure and utility projects led to a further fall in revenues during the year, down to GBP8.8m (2010: GBP9.1m). Further cost cutting measures were therefore introduced, reducing the operating loss for the year to GBP1.2m (2010: GBP2.9m loss). This was slightly worse than anticipated due to the severe winter weather, when a loss of GBP0.3m was suffered in the month of December 2010.
Every effort has been made to increase both job price and utilisation and significant progress has been achieved in moving from historic lows. Average job price for the year rose to GBP581 from GBP570 in the previous year and utilisation rose from 72% to 73%. Unfortunately, over capacity in the market has restricted further improvement, although the current financial year is showing better progress as more infrastructure and utility work is commenced.
Despite the considerable efforts made to improve operating performance, the concrete pumping division continues to be a cash drain on the group's limited resources and as it is no longer regarded as being a core business in the future strategy of the group, it is being treated as a discontinued activity and a business held for sale.
Results by division (before taxation)
Hot Features
Premium
GBPm Trading Adjustments* Total 2011 2010
------------------------- -------- ------------- ----------- ----------
Continuing Activities
Construction 0.2 (0.2) 0.0 0.7
Property (including
Residential) 6.2 (3.7) 2.5 (13.1)
Group (1.8) - (1.8) (1.0)
------------------------- -------- ------------ ----------- --------
4.6 (3.9) 0.7 (13.4)
Discontinued Activities
Concrete Pumping (1.2) (3.6) (4.8) (2.9)
------------------------- -------- ------------ ----------- --------
Group profit/(loss)
before taxation 3.4 (7.5) (4.1) (16.2)
*Adjustments represent restructuring costs and impairments
Earnings per share and dividend
Allowing for the result from discontinued operations the total diluted earnings per share was
-16.9p (2010: -76.2p). Diluted earnings per share for continuing operations was 4.6p (2010:
-62.3p).
No final dividend is proposed, consequently the dividend for the full year is nil (2010: nil).
Balance sheet
Following provisions made for the disposal of discontinued operations the net asset value reduced to GBP23.8m (2010: GBP25.9m). This is equivalent to 117p per share (2010: 127p).
Investment property values increased to GBP33.0m (2010: GBP29.1m) largely due to the addition of properties held in the newly acquired subsidiaries of Lincoln House Properties Limited and Manchester House Properties Limited, which had previously been held in joint venture.
Investment in joint ventures and associates decreased by GBP5.8m to GBP5.0m. This was in part due to the transfer out of the above mentioned acquisitions and to further impairments and settlement of outstanding liabilities in remaining joint venture interests.
Inventories reduced by GBP4.1m to GBP17.8m mainly as a result of disposal of housing stock and a reduction in the number of active construction projects.
Cash flow and borrowings
Cash generation and debt repayment remained the principal financial focus during the year and although profitable trading was restricted by the difficult market conditions, positive cash flow was enhanced through further reductions in working capital and the sale of non-income producing assets.
An overall reduction in net borrowings was achieved of GBP3.9m (2010: GBP1.4m), with major movements summarised as follows:
GBPm 2011 2010 ------------------------------ ------ ------ Operating activities 6.7 2.6 Joint ventures & investments (1.7) (2.0) Net interest paid (1.0) (0.1) Taxation (0.1) 0.9 ------------------------------ ------ ------ Decrease in net borrowings 3.9 1.4
Going concern
During the year the group successfully concluded negotiations with its principal banker, The Royal Bank of Scotland PLC (RBS), to restructure its borrowing facilities. The aim of the restructure was to ensure that the group is adequately and appropriately funded to meet its forecasted obligations and cash requirements for the foreseeable future. The new facilities at the year end comprised an investment loan of GBP17.9m, asset disposal loans of GBP9.2m and an overdraft/multi option facility of GBP4.1m. These facilities are secured against assets in the business and are in place until March 2012.
Based on the latest forecasts for the restructured group, further negotiations are in progress with RBS to extend its facilities to 30 November 2012 and re-set covenants accordingly. RBS have engaged independent external advisors who have recommended the revised covenants and extended facilities are put to the credit committee for approval; however this advice is subject to reaching satisfactory arrangements in relation to the disposal of the concrete pumping business.
Significant progress has been made by the directors towards disposing of Pochin Concrete Pumping Limited and they are currently in advanced discussions with a prospective purchaser of the corporate entity. Notwithstanding these ongoing discussions, the directors have also received confirmation from RBS of its intention to continue to support the group through their existing funding arrangement, subject to usual review and approval procedures, for a period of 12 months from 30 September 2011.
During the period the group acquired 100% holdings in Manchester House Properties Limited and Lincoln House Properties Limited (previously 50% joint ventures). Loans of GBP1.7m associated with these two companies are now recognised on the group balance sheet and represent outstanding property mortgages with the Nationwide Building Society.
At 31 May 2011 total group borrowings were GBP29.3m (2010: GBP35.2m). Cash held on deposit was GBP6.3m (2010: GBP8.3m), resulting in a net debt position of GBP23.0m (2010: GBP26.9m).
Treasury and financing risk
The group continues to fund its operations through the use of cash, loans and various liquid resources such as debtors and trade creditors. Treasury management is performed by the finance department through implementation of the group's treasury policy, which is the responsibility of the Finance Committee. This remit includes development of relationships with principal funders, management of interest rates and liquidity risk. The Finance Committee is responsible to the main board.
The group has minimal fixed interest rate borrowings and reviews the need to hedge against interest rate movements continually. A three year swap arrangement fixing LIBOR exposure to 4.98% on GBP15m of debt expired in March 2011. This now allows the group to benefit across all of its facilities from the continued low floating rate of LIBOR and in part compensates for the higher commercial rates being charged by the banks.
The group continues to formally operate an effective interest rate hedging policy, which states that the sole purpose of any financial instrument employed by the group to fix interest rates is to protect the group from fluctuations in interest rates charged on its borrowings. As a consequence, any changes in the fair value of such hedging instruments are recognised directly in equity and not, unless deemed to be ineffective, through the income statement. Due to expiry of a number of hedging facilities during the year there was a favourable movement in financial derivatives of GBP0.6m (2010: GBP1.3m). This is shown against hedge reserve in the group balance sheet.
There remains both long term repayment loans and short to medium term development borrowings relating to associated companies and joint venture entities respectively, to which the group has exposure. As a consequence, the group regularly reviews the risk of exposure to interest rate movements with its partners and, where appropriate, hedges against that risk on a project by project basis.
The group continues to have minimal exposure to foreign currency exchange risk and accordingly does not require a policy to hedge such exposure.
Pensions
The group continues to contribute to the recovery plan agreed with the Pensions Regulator for the now closed defined benefit (DB) pension scheme. The next triennial valuation is due in November 2011.
As a result of a potential debt crystallising under section 75 of the Pensions Act 1995 on the sale of the concrete pumping business, it will be necessary to apportion the pension liability relating to
that business across the remaining group employers ahead of any sale. Following consultation between the group and the scheme trustees, the trustees have indicated their willingness in principle to approve such an apportionment. Accordingly, the liability has not been classified as held for sale.
Total contributions paid in the period to the DB scheme were GBP0.1m (2010: GBP0.2m). Payments to the defined contribution scheme were GBP0.4m (2010: GBP0.3m). The DB pension scheme obligations
are shown in the group balance sheet and movement in the period reflected in the income statement and statement of comprehensive income. The actuarial deficit, calculated in accordance with IAS19, is reported as GBP1.0m (2010: GBP2.7m).
Financial reporting
The consolidated financial statements have been produced in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. There have been no changes to the IFRS requirements this year that have a material impact on the group results.
John Moss John Edwards
Chief Executive Group Finance Director
30 September 2011
Consolidated income statement
For the year ended 31 May 2011
2010
2011 (re-presented)
GBP'000 GBP'000
Revenue 59,283 65,725
Cost of sales (52,580) (64,617)
--------- ----------------
Gross profit 6,703 1,108
Operating expenses (8,501) (16,273)
Other operating income 2,891 3,242
(Losses)/gains on revaluation
of investment properties (135) 530
--------- ----------------
Operating profit/(loss) 958 (11,393)
Share of profit/(loss) after
taxation in joint ventures 587 (1,948)
Share of profit after taxation
in associates 87 121
Finance income 1,115 2,074
Finance cost (2,103) (2,235)
Profit/(loss) before taxation
from continuing operations 644 (13,381)
Taxation 289 702
--------- ----------------
Profit/(loss) for the year from
continuing operations 933 (12,679)
Discontinued Operations
Loss for the year from discontinued
operations (4,372) (2,829)
Loss for the year (3,439) (15,508)
--------- ----------------
Attributable to:
Equity holders of the company (3,477) (15,545)
Non controlling interests 38 37
--------- ----------------
Loss for the year (3,439) (15,508)
Basic and diluted earnings/(loss)
per share
from continuing operations 4.6p (62.3p)
from discontinued operations (21.5p) (13.9p)
--------- ----------------
Total (16.9p) (76.2p)
--------- ----------------
Consolidated statement of comprehensive income
For the year ended 31 May 2011
Group
2011 2010
GBP'000 GBP'000
Loss for the year (3,439) (15,508)
Other comprehensive income:
Actuarial gains and losses 1,521 (312)
Deferred tax on actuarial gains and
losses (449) 88
Cash flow hedging:
Current period fair value movement 1,662 4,613
Reclassification adjustment-disposal
of cash flow hedge (1,013) (3,322)
Deferred tax on cash flow hedging (350) (204)
Revaluation of property, plant and
equipment - 2,258
Total comprehensive income for the
year (2,068) (12,387)
--------- ---------
Attributable to non controlling interests 38 37
Attributable to equity holders of
the Company (2,106) (12,424)
--------- ---------
(2,068) (12,387)
--------- ---------
Consolidated statement of changes in equity
For the year ended 31 May 2011
Total
attributable
Share Own Revaluation Hedge Retained to owners of Non-controlling
capital shares reserve reserve earnings the parent Interest
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 June 2009 5,200 (745) 75 (2,520) 36,112 38,122 214
-------- -------- ------------ -------- --------- ------------- ----------------
Cost of share based
payments - - - - (5) (5) -
Equity dividend - - - - - - (32)
-------- -------- ------------ -------- --------- ------------- ----------------
Transactions with
owners - - - - (5) (5) (32)
-------- -------- ------------ -------- --------- ------------- ----------------
Loss for the year - - - - (15,545) (15,545) 37
Other comprehensive
income
Actuarial gains &
losses - - - - (312) (312) -
Deferred tax on
pension scheme
deficit - - - - 88 88 -
Realisation of
revaluation reserve
on disposal - - (68) - 68 - -
Revaluation of
property, plant and
equipment - - 2,258 - - 2,258 -
Cash flow hedging:
current period fair
value movements - - - 4,613 - 4,613 -
reclassification
adjustment-disposal
of cash flow hedge - - - (3,322) - (3,322) -
Deferred tax on cash
flow hedging - - - - (204) (204) -
-------- -------- ------------ -------- --------- ------------- ----------------
Total comprehensive
income for the
year - - 2,190 1,291 (15,905) (12,424) 37
-------- -------- ------------ -------- --------- ------------- ----------------
At 31 May 2010 5,200 (745) 2,265 (1,229) 20,202 25,693 219
-------- -------- ------------ -------- --------- ------------- ----------------
Cost of share based
payments - - - - (19) (19) -
Equity dividend - - - - - - (41)
-------- -------- ------------ -------- --------- ------------- ----------------
Transactions with
owners - - - - (19) (19) (41)
-------- -------- ------------ -------- --------- ------------- ----------------
Loss for the year - - - - (3,477) (3,477) 38
Other comprehensive
income
Actuarial gains &
losses - - - - 1,521 1,521 -
Deferred tax on
pension scheme
deficit - - - - (449) (449) -
Cash flow hedging:
current period fair
value movements - - - 1,662 - 1,662 -
reclassification
adjustment-disposal
of cash flow hedge - - - (1,013) - (1,013) -
Deferred tax on cash
flow hedging - - - - (350) (350) -
-------- -------- ------------ -------- --------- ------------- ----------------
Total comprehensive
income for the
year - - - 649 (2,755) (2,106) 38
-------- -------- ------------ -------- --------- ------------- ----------------
At 31 May 2011 5,200 (745) 2,265 (580) 17,428 23,568 216
-------- -------- ------------ -------- --------- ------------- ----------------
Consolidated balance sheet
As at 31 May 2011
2011 2010
GBP'000 GBP'000
Non current assets
Property, plant and equipment 3,808 4,648
Investment properties 32,980 29,116
Investments
Joint ventures 4,544 8,855
Associates 500 2,033
Available for sale 1,244 2,190
Deferred tax assets 1,939 1,946
--------- ---------
Total non current assets 45,015 48,788
--------- ---------
Current assets
Inventories 17,825 21,891
Trade and other receivables 12,107 12,618
Cash and cash equivalents 6,320 8,328
Corporation tax recoverable 319 305
Total current assets 36,571 43,142
Assets classified as held-for-sale 4,554 -
Total assets 86,140 91,930
--------- ---------
Current liabilities
Trade and other payables 28,960 25,956
Bank loans 9,277 12,904
Bank overdrafts 18,499 22,370
Financial derivatives - 621
Total current liabilities 56,736 61,851
Liabilities classified as held-for-sale 2,071 -
Net current liabilities (17,682) (18,709)
--------- ---------
Non current liabilities
Bank loans 1,565 -
Retirement benefit obligation 1,041 2,709
Other payables 943 1,458
--------- ---------
Total non current liabilities 3,549 4,167
--------- ---------
Total liabilities 62,356 66,018
--------- ---------
Net assets 23,784 25,912
--------- ---------
Equity
Share capital 5,200 5,200
Own shares (745) (745)
Revaluation reserve 2,265 2,265
Hedge reserve (580) (1,229)
Retained earnings 17,428 20,202
--------- ---------
Total shareholders' equity 23,568 25,693
Non-controlling interest 216 219
--------- ---------
Total equity 23,784 25,912
--------- ---------
Consolidated cash flow statement
For the year ended 31 May 2011
2011 2011 2010 2010
Re-presented Re-presented
GBP'000 GBP'000 GBP'000 GBP'000
Net cash from operating
activities
Loss for the year (3,439) (15,508)
Loss for the year from
discontinued operations 4,372 2,829
Income tax (289) (702)
Finance income (1,115) (2,074)
Finance cost 2,103 2,260
Share of profit/(loss) in
joint ventures and
associates (674) 1,827
Cash flow hedge movement
in joint ventures (15) (657)
Depreciation charge 289 160
Release of gain on bargain
purchase (1,175) -
Credit in respect of share
based payments (19) (5)
Profit on sale of
property, plant and
equipment (12) (4)
Profit on sale of
investment properties (57) (655)
Losses/(gains) on
revaluation of investment
properties 135 (530)
Provision against
investments in joint
ventures 1,537 4,215
Provision against
investment in other
investments 1,478 998
Income from joint ventures
and associates 298 53
Operating profit/(loss)
before changes in working
capital 3,417 (7,818)
Decrease in inventories 3,796 7,986
(Increase)/decrease in
receivables (1,997) 12,182
Increase/(decrease) in
payables 11,543 (7,765)
Cash flows used in
operating activities
(discontinued) (5,437) (1,910)
--------- -------------
11,322 2,675
Interest paid (1,036) (902)
Income taxes
(paid)/received (123) 874
Net cash from operating
activities 10,163 2,647
Investing activities
Interest received 26 792
Purchase of investment
properties (3,896) (2,645)
Purchase of property,
plant and equipment (26) (13)
Proceeds from sale of
investment properties 264 4
Proceeds from sale of
property, plant and
equipment 144 144
Purchase of subsidiary
undertakings (50) -
Net movement on disposal
of joint ventures - 649
Decrease/(increase) in
interest in joint
ventures and associates 10 (567)
Increase in interest in
other investments (532) (458)
Cash flows (used in)/from
investing activities
(discontinued) (1,005) 108
-------- -------------
Net cash used in investing
activities (5,065) (1,240)
Financing activities
Repayment of loans (3,915) (2,320)
Cash flows from financing
activities
(discontinued) 858 (58)
--------
Net cash used in financing
activities (3,057) (2,378)
Net increase/(decrease) in
cash and cash
equivalents 2,041 (971)
Cash and cash equivalents
at beginning of year (14,042) (13,071)
Cash and cash equivalents
at end of year (12,001) (14,042)
--------------------------- -------- --------- ------------- -------------
Cash and cash equivalents
at end of year
(continuing) (12,179) (14,195)
Cash and cash equivalents
at end of year
(discontinued) 178 153
Total (12,001) 14,042
--------------------------- -------- --------- ------------- -------------
Notes to the preliminary results
Basis of preparation
The preliminary announcement is prepared in accordance with International Financial Reporting Standards, this announcement does not itself contain sufficient information to comply with IFRS. The accounting policies used in preparation of this preliminary announcement have remained unchanged from those set out in the 2010 annual report. They are also consistent with those in the full financial statements which have yet to be published.
The Board of Directors approved the preliminary announcement on 30 September 2011.
The financial information set out in this preliminary announcement does not constitute the group's financial statements for the years ended 31 May 2011 and 2010. The financial information for the year ended 31 May 2010 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The statutory annual accounts for the year ended 31 May 2011, upon which an unqualified audit opinion has been given and which did not contain a statement under sections 498 (2) and 498 (3) of the Companies Act 2006, will be sent to the Registrar of Companies following the Company's annual general meeting.
Segmental information
Operating segments have been determined based on the reports regularly reviewed by the group board which are used to make strategic and operational decisions. The group board is considered to be the CODM and reviews the segments based on the nature of the services provided.
During the year, the group was organised into three operating business segments based on the different services provided by each division: Construction, Property and Residential. The residential segment has been transferred to the construction division during the period for operational purposes. The concrete pumping segment has been classified as discontinued during the year and comparatives re-presented.
As operations are carried out entirely within the UK, there is no further consideration of information on geographical areas in determining the groups operating segments. The measurements policies used for segment reporting reflect those used for internal reporting and for the group's financial statements. Inter-segmental pricing is done on an arms length open market basis.
Total
Year ended 31 Group continuing Discontinued
May 2011 Construction Property Residential management operations operations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External sales 41,569 14,679 3,035 - 59,283 8,821
Inter-segment
sales 1,006 310 - - 1,316 67
Eliminations (1,006) (310) - - (1,316) (67)
------------ -------- ----------- ---------- ---------- ------------
Total revenue 41,569 14,679 3,035 - 59,283 8,821
Segment result
Operating
profit/(loss) 12 3,129 (403) (1,780) 958 (1,170)
Loss on
remeasurement
and cost of
disposal - - - - - (3,569)
Share of
results of
joint
ventures and
associates - 674 - - 674 -
Net finance
income/(cost) 18 (1,008) - 2 (988) (26)
------------ -------- ----------- ---------- ---------- ------------
Profit/(loss)
before
taxation 30 2,795 (403) (1,778) 644 (4,765)
------------ -------- ----------- ---------- ---------- ------------
Taxation 289 393
---------- ------------
Loss for the
year 933 (4,372)
---------- ------------
Within the construction segment, external sales of GBP18,250,000 arise from three customers that individually account for more than 10 percent of the entity's revenues; these are also considered to be major customers.
Elimination of Total
inter-company continuing Discontinued
Construction Property Residential balances operations operations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Asset and
liabilities
Segment assets 20,932 83,455 2,998 (30,843) 76,542 4,554
Investment in
equity accounted
joint ventures
and associates - 5,044 - - 5,044 -
------------ -------- ----------- --------------- ---------- ------------
Total assets 20,932 88,499 2,998 (30,843) 81,586 4,554
Segment
liabilities 14,781 75,074 1,273 (30,843) 60,285 2,071
Net assets 6,151 13,425 1,725 - 21,301 2,483
------------ -------- ----------- --------------- ---------- ------------
Other information
Capital
expenditure 26 - - - 26 1,149
Depreciation 67 63 - - 130 159
Provision against
investment in
joint ventures,
associates and
other
investments - 3,015 - - 3,015 -
Impairment of
inventories - 393 400 - 793 -
Year ended 31
May 2010
Total
Group continuing Discontinued
Construction Property Residential management operations operations
Re-presented GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External sales 60,999 1,230 3,496 - 65,725 9,094
Inter-segment
sales 554 - - - 554 73
Eliminations (554) - - - (554) (73)
------------ -------- ----------- ---------- ---------- ------------
Total revenue 60,999 1,230 3,496 - 65,725 9,094
Segment result
Operating
profit/(loss) 730 (7,795) (3,298) (1,030) (11,393) (2,826)
Share of
results of
joint
ventures and
associates - (1,827) - - (1,827) -
Net finance
cost (39) (116) - (6) (161) (25)
------------ -------- ----------- ---------- ---------- ------------
Profit/(loss)
before
taxation 691 (9,738) (3,298) (1,036) (13,381) (2,851)
------------ -------- ----------- ---------- ---------- ------------
Taxation 702 22
---------- ------------
Loss for the
year (12,679) (2,829)
---------- ------------
Within the construction segment in 2010, external sales of GBP23,384,000 arise from two contracts that individually account for more than 10 percent of the entity's revenues.
Elimination
of Total
inter-company continuing Discontinued
Construction Property Residential balances operations operations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment
assets 21,778 59,556 6,036 (10,952) 76,418 4,624
Investment in
equity
accounted
joint
ventures and
associates - 10,888 - - 10,888 -
------------ -------- ----------- ------------- ---------- ------------
Total assets 21,778 70,444 6,036 (10,952) 87,306 4,624
Segment
liabilities 16,085 54,303 3,556 (10,952) 62,992 3,026
Net assets 5,693 16,141 2,480 - 24,314 1,598
------------ -------- ----------- ------------- ---------- ------------
Other
information
Capital
expenditure 13 - - - 13 32
Depreciation 89 71 - - 160 49
Provision
against
investment
in joint
ventures and
other
investments - 5,213 - - 5,213 -
Impairment of
inventories - 691 2,858 - 3,549 -
Disposal group classified as held for sale
Pochin Concrete Pumping Limited has been treated as a discontinued operation as the business is being sold as a going concern and is expected to complete by 30 November 2011. Consequently, the comparatives within the income statement have been re-presented. The results of this operation are summarised below:
2011 2010
GBP'000 GBP'000
Revenue 8,821 9,094
Cost of sales (8,007) (8,699)
--------- ---------
Gross profit 814 395
Operating expenses (1,996) (3,247)
Other operating income 12 26
--------- ---------
Operating loss (1,170) (2,826)
Finance income 192 -
Finance cost (218) (25)
--------- ---------
Loss from discontinued operations
before taxation (1,196) (2,851)
Tax credit 393 22
--------- ---------
Net operating result from discontinued
operations (803) (2,829)
Remeasurement and disposal of
assets held for sale
Loss on remeasurement and cost
of disposal (3,569) -
--------- ---------
Loss for the year from discontinued
operations (4,372) (2,829)
--------- ---------
Net cash flow from discontinued
operations
Net cash flow from operating activities (5,437) (1,910)
Net cash flow from investing activities (1,005) 108
Net cash flow from financing activities 858 (58)
--------- ---------
(5,584) (1,860)
--------- ---------
Net cash flow from discontinued
operating activities
Loss for the year (4,372) (2,829)
Income tax (393) (22)
Finance income (192) -
Finance cost 218 25
Depreciation charge 158 49
Profit on sale of property, plant
and equipment (12) (24)
--------- ---------
Operating cash flow before movement
in working capital (4,593) (2,801)
Decrease/(increase) in inventories 52 (53)
(Increase)/decrease in receivables (55) 383
(Decrease)/increase in payables (811) 571
Interest paid (30) (12)
Income tax received - 2
--------- ---------
(5,437) (1,910)
--------- ---------
Assets of disposal group classified 2011
as held for sale GBP'000
Property, plant and equipment 1,594
Inventories 218
Trade and other receivables 2,564
Cash and cash equivalents 178
---------
4,554
---------
Liabilities of disposal group
classified as held for sale
Trade and other payables 904
Obligations under hire purchase
agreements 962
Deferred tax 205
2,071
---------
Earnings per share
The calculation of earnings per share (basic and diluted) is based on group loss after taxation and non-controlling interest of GBP3,439,000 (2010: GBP15,508,000) and the 20,800,000 ordinary shares of 25p in issue at 31 May 2011 and 31 May 2010. The number of shares used in the calculation has been reduced at 31 May 2011 for the 440,500 (2010: 440,500) shares held in the Employee Share Trust. The assumed conversion of dilutive options has no impact on the number of shares and so diluted earnings per share is equal to basic earnings per share.
2011 2010
Weighted Weighted
average Average
no. of no. of
Earnings shares Per share Earnings shares Per share
Continuing
operations GBP'000 '000 p GBP'000 '000 p
Basic EPS 933 20,360 4.6 (12,679) 20,360 (62.3)
Effect of
share
options - - - - - -
Diluted EPS 933 20,360 4.6 (12,679) 20,360 (62.3)
-------- -------- --------- -------- --------- ---------
2011 2010
Weighted Weighted
average Average
no. of Per no. of
Earnings shares share Earnings shares Per share
Discontinued
operations GBP'000 '000 p GBP'000 '000 p
Basic EPS (4,372) 20,360 (21.5) (2,829) 20,360 (13.9)
Effect of
share
options - - - - - -
Diluted EPS (4,372) 20,360 (21.5) (2,829) 20,360 (13.9)
-------- -------- -------- -------- -------- ---------
2011 2010
Weighted Weighted
average Average
no. of no. of
Earnings shares Per share Earnings shares Per share
Total
operations GBP'000 '000 p GBP'000 '000 p
Basic EPS (3,439) 20,360 (16.9) (15,508) 20,360 (76.2)
Effect of
share
options - - - - - -
Diluted EPS (3,439) 20,360 (16.9) (15,508) 20,360 (76.2)
-------- -------- --------- -------- --------- ---------
Dividends paid in the year
No dividends were paid during the year (2010: nil).
The Directors are not proposing a final dividend in respect of the financial year ending 31 May 2011.
Post balance sheet event
Since the year end the company has increased its shareholding in UKLP (BrynCegin) Limited to 100%.
Annual general meeting
The Annual General Meeting will be held at Mere Golf and County Club, Knutsford, Cheshire at 10.30 a.m. on Thursday 3 November 2011. The full annual report will be posted to shareholders on or before 12 October 2011. Copies will be available from the Company's website (www.pochins.plc.uk).
Enquiries:
Pochin's PLC
John Moss, Chief Executive 01606 833 333
John Edwards, Finance Director
Charles Stanley Securities
Russell Cook/Carl Holmes 020 7149 6476
This information is provided by RNS
The company news service from the London Stock Exchange
END
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