We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Wren (See LSE:WREN) | LSE:WHG | London | Ordinary Share | GB0031056459 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 9.25 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
RNS Number:1242K
Wren Homes Group PLC
17 December 2007
For release at 7.00am on 18 December 2007
Wren Homes Group Plc
Preliminary Results for
Year Ended 31 July 2007
Wren Homes Group Plc ("Wren" or "the Group"), the AIM Listed retirement homes
and specialist developer, which has a strategy of specialising in apartment
developments for the 'active' retirement market, with operations around the
southern M25 corridor, announces preliminary results for the year to 31st July
2007. Wren moved to AIM in November 2006, successfully raising £3.0 million
before costs.
Highlights
Financials
* Profit before tax of £759,134 (2006: £1,716,178); this represents a
significant reduction in profits in comparison with the previous year, due
largely to the adverse conditions encountered in the housing market during
the year.
* Revenue for the year amounted to £2,218,000 (2006: £3,349,995)
* Profit after tax is £535,134 (2006: £1,213,048).
* Earnings per Share:
* Basic: 1.42p (2006: 3.94p)
* Diluted: 1.42p (2006: 3.78p)
* The Directors are recommending a final dividend of 0.3 pence per share
Work in Progress
Wren is actively involved in 3 developments:
* Wren Court at Warlingham completed - To date, sale of 13 of the 28
retirement flats has been completed; one is in the process of exchange; with
offers received on a further three. The average selling price of apartments
for this scheme is currently around £325,000.
* Eight wholly owned luxury apartments (non retirement) in Kenley, Surrey
constructed - Average asking price of these units is around £325,000. To
date 3 out of the 8 have been sold.
* Rotherfield Road, Carshalton - construction started on a retirement
development scheme of 20 apartments with completion expected by late autumn
2008. It is anticipated that earlier sales can be achieved off-plan with
this development now that Wren Court is effectively available as a "show
home".
Land Bank
* Currently Wren has options over more than 500 units on 13 Sites, with an
historic success rate of obtaining planning consents of 70% of those applied
for. Wren already holds planning consent on a further 137 units, across 7
sites.
Corporate
* The Company moved to the AIM market of the London Stock Exchange in
November 2006 and raised, by way of a placing, £3.0 million before costs, of
additional working capital.
Paul Treadaway, Chief Executive of Wren Homes Group Plc, commented:
"I am pleased to be able to announce the results for the year ended 31 of July
2007. Although not as good as the directors would have wished, they nevertheless
reflect the current market conditions. It has to be appreciated, that as Wren
moves to develop larger retirement housing schemes, which will tend to be
apartments in substantial blocks, and until it reaches a certain critical mass,
in which it has a number of schemes progressing at any one time, both in build
and ready for selling, its trading results are likely to be "lumpy", and not
following a smooth progressive trend; notwithstanding this, Wren continues to
build shareholder value through the assets growth arising on its units with
planning or in for planning".
"Your directors will continue to work to build sustainable growth, especially in
the South East retirement housing sector as and when market conditions allow and
we look forward to the future with a fair measure of confidence."
Enquiries
Wren Homes Group plc
Peter West, Chairman Tel: 01372 742 244
www.wrenhomesplc.co.uk
JM Finn
Leslie Kent (Sales) Tel: 0207 628 9688
Matthew Robinson/Charles Cunningham (Corporate
Finance)
Adventis Financial PR
Tarquin Edwards Tel: 020 7034 4758 / 07879 458 364
Wren Homes Group Plc
Chairman's statement
Year Ended 31 July 2007
Trading Results
I am pleased to report the results for Wren Homes Group plc, the Home Counties
based retirement homes and residential developer, for the year ended 31 July
2007. The group achieved a profit before tax of £759,134 (2006: £1,716,178);
this represents a significant reduction in profits in comparison with the
previous year, due largely to the adverse conditions encountered in the housing
market during the year. Revenue for the year amounted to £2,218,000 (2006:
£3,349,995) and the profit after tax is £535,134 (2006: £1,213,048).
The results reflect the change in trading conditions during the year for the
group, which has seen the softening of housing prices and the consequent slowing
of unit sales, in the premium retirement homes and mid-range homes and
apartments markets in which it operates.
There has, on the other hand, been progress in other areas with the continued
shift in focus towards premium retirement homes development and the increasing
number of units with planning consent and those in for planning, together with
research into the next generation of retirement housing products and services.
Current and potential developments are in towns and villages in Surrey and
Sussex, such as Warlingham, Carshalton, Ashtead, Purley, Tandridge, Kenley and
Crowborough.
Work in Progress
Wren is actively involved in 3 developments. The construction phase of the
first, Wren Court at Warlingham, has been completed. In this instance, having
sold on the land to this property, Wren acted as developer on behalf of the land
owner and has contractually retained a substantial interest in the profits being
generated from the sale of the apartments. To date, the sale of 13 of the 28
retirement flats has been completed; one is in the process of exchange; with
offers received on a further three. The completed scheme will allow us to use
it as a "reference site" for future retirement development schemes. The average
selling price of apartments for this scheme is currently around £325,000.
A second scheme, wholly owned by Wren, of eight luxury apartments (non
retirement) in Kenley, Surrey has been constructed. This scheme benefits from
having private gardens of approximately one acre and the average asking price of
these units is around £325,000. To date 3 out of the 8 have been sold.
Thirdly, construction has started on a retirement development scheme in
Rotherfield Road, Carshalton of 20 apartments, which are expected to be
completed by late autumn 2008. It is anticipated that earlier sales can be
achieved off-plan with this development now that Wren Court is effectively
available as a "show home".
It had been anticipated that construction of a second development in Tandridge,
of 33 retirement units adjacent to the Wren Court development, would have
commenced during 2007. Again, Wren, having sold its interest in the land, is
acting as developer and, as in the case of Wren Court, has retained a
substantial interest in the profit it believes will be generated. However, Wren
has taken the opportunity of the lull in the current market to re-apply for
planning for 54 units.
Wren Homes Group Plc
Chairman's statement (cont'd)
Year Ended 31 July 2007
Land Bank
We seek to expand the number of potential development sites we hold under option
agreements. Currently Wren has options over more than 500 units on 13 Sites,
with an historic success rate of obtaining planning consents of 70% of those
applied for.
Wren already holds planning consent on a further 137 units, across 7 sites. Your
directors believe that Wren's option approach to developments should enable it
to construct increasing numbers of residential units, especially retirement
homes, over the next few years.
The Retirement Market
The UK has both a growing and an ageing population. One in six of us are now
aged 65 or over and the Government statistics office is projecting that the
percentage of older people is set to continue to rise during the first half of
this century.
Wren concentrates on the upper end of the market in good quality locations,
using the directors' local knowledge to pin-point areas identified as suitable.
Your directors' believe that in these desirable locations there will be greater
demand for Wren retirement homes than in more urban environments.
Further, your directors believe that retirement housing will continue to be one
of the fastest growing sectors of the housing market for the foreseeable future
due to the age shift in the population and one which has currently fewer
competitors by comparison with the rest of the UK housing sector.
However, Wren believes, that as in most market places, change occurs and in the
retirement housing market, it is being driven by socio economic forces and
consumers needs, which Wren is closely following.
Corporate
The Company moved to the AIM market of the London Stock Exchange in November
2006 and raised, by way of a placing, £3.0 million before costs, of additional
working capital. Admission to the AIM Market, apart from increasing the group's
visibility and stature, enables it to contemplate acquisitions of other suitably
geographically located development companies, which if made would accelerate its
growth.
Financials
The Company's audited accounts have been reported on the basis of International
Financial Reporting Standards ("IFRS") and this applies for the year ended July
2007, with the comparable figures for 2006, which were originally prepared under
UK GAAP Standard, being restated in line with IFRS requirements.
Wren Homes Group Plc
Chairman's statement (cont'd)
Year Ended 31 July 2007
Outlook and Future Prospects
I am pleased to be able to announce the results for the year ended 31 of July
2007. Although not as good as the directors would have wished, they nevertheless
reflect the current market conditions. It has to be appreciated, that as Wren
moves to develop larger retirement housing schemes, which will tend to be
apartments in substantial blocks, and until it reaches a certain critical mass,
in which it has a number of schemes progressing at any one time, both in build
and ready for selling, its trading results are likely to be "lumpy", and not
following a smooth progressive trend; notwithstanding this, Wren continues to
build shareholder value through the assets growth arising on its units with
planning or in for planning.
The Directors are recommending a final dividend of 0.3 pence per share, which
together with the interim dividend already paid of 0.25 pence making a total of
0.55 pence per share for the full year, payable on 20 June 2008, to shareholders
on the register on 2 May 2008.
Your directors will continue to work to build sustainable growth, especially in
the South East retirement housing sector as and when market conditions allow and
we look forward to the future with a fair measure of confidence.
I would like to thank my colleagues and staff whose expertise and hard work has
put Wren into what I believe is a strong position in a specialist niche market.
P A Treadaway
Group Chief Executive
17 December 2007
Wren Homes Group Plc
Directors' Report
For the year ended 31 July 2007
The directors present their report, together with the audited financial
statements of the Company and the Group, for the year ended 31 July 2007.
Principal activities and review of the business
The principal activity of the Group is that of residential developers,
specialising in the retirement sector. It operates primarily in the Home
Counties. The Group sources its land by way of option agreements and obtains
planning permission for the most commercially viable development prior to
purchasing the land.
The group's revenue for the year ended 31 July 2007 was £2,218,000 compared with
£3,349,995 for 2006 and profit before tax was £759,134 compared with £1,716,178
for the previous year.
The results reflect the adverse conditions encountered in the housing market
during the year and increased administrative costs incurred as a result of the
Group putting adequate resources and systems in place to manage and control
future growth, further details of which are set out in the Chairman's statement
on pages 3 to 5.
Goodwill has remained at £3,135,203 and the directors do not consider that there
has been any impairment to the value of goodwill.
At 31 July 2007 net assets had increased by £2,913,993 to £8,942,427.
In order to simplify the share structure the Group applied to the high court to
cancel the deferred shares and was granted permission to do so on 18 April 2007.
The total of the share capital and capital reserve accounts increased by
£2,479,935 as a result of the issue of 8,333,333 ordinary shares of 10p each at
a premium of 26p.
Future Developments
The Group continues to seek out and expand the number of development sites. The
Group holds planning consents on 137 units across seven sites, with options over
more than 500 units across 13 sites that are currently in the planning process.
Current sites where sales will be expected in the year ending 31 July 2008 will
be Wren Court in Warlingham, Hermitage Road in Kenley and Rotherfield Road in
Carshalton.
It is expected that planning permission will be achieved on a number of larger
sites.
Further details are set out in the Chairman's statement on pages 3 to 5.
Wren Homes Group Plc
For the year ended 31 July 2007
Directors' report (continued)
Financial Instruments
The principal risks which the Group face are:
Liquidity risk
The group manages its cash and borrowing requirements to maximise interest
income and minimise interest expense, whilst ensuring that the Group has
sufficient resources to meet the operating needs of its business.
Interest rate risk
The principal financial market risk faced by the group is the risk of interest
rate movements.
All borrowings are arranged at floating rates, thus exposing the group to cash
flow interest rate risk. The company does not have any bank loans arranged at
fixed interest rates and therefore the group is not exposed to fair value
interest rate risk.
Interest rate risk is managed by seeking to match financing costs as closely as
possible with revenues generated by its assets.
Credit risk
The group's principal financial assets are bank balances, cash, trade and other
receivables.
The group's credit risk is primarily attributable to trade receivables. An
allowance for impairment is made where there is an identified loss event which,
based on previous experience, is evidence of a reduction in the recoverability
of the cash flows. The amounts presented in the balance sheets are net of these
allowances for doubtful receivables.
The credit risk on liquid funds is limited because the counterparties are banks
with high credit-ratings assigned by international credit-rating agencies.
The group has a significant concentration of credit risk as the majority of the
trade receivables balance is due from a single counterparty, Warlingham
Developments. The directors consider the current balances will be repaid by the
due date of 31 December 2009.
Supplier payment policy
The company's current policy concerning the payment of trade suppliers is to:
* Settle the terms of payment with suppliers when agreeing the terms of each
transaction;
* Ensure that suppliers are made aware of the terms of payment by inclusion
of the relevant terms in contracts; and
* Pay in accordance with the company's contractual and other legal
obligations.
On average, trade suppliers at the year end represented 55 (2006: 59) days'
purchases.
Wren Homes Group Plc
For the year ended 31 July 2007
Directors' report (continued)
Directors
The following directors have held office since 1 August 2006 unless otherwise
stated:
B Nathan
P A Treadaway
P J West
P Self
Directors' interests
The interests of the directors holding office on 31 July 2007 in the shares of
the company were as shown:-
Ordinary shares of 10p each
31 July 2007 31 July 2006
B Nathan 94,364 94,364
P A Treadaway 9,990,013 13,878,902
P J West 9,990,013 13,878,902
P Self - -
Deferred Shares of 0.9p each
31 July 2007 31 July 2006
B Nathan - -
P A Treadaway - -
P J West - -
P Self - -
Directors' responsibilities
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period. In preparing
those financial statements, the directors are required to:
* Select suitable accounting policies and then apply them consistently;
* Make judgements and estimates that are reasonable and prudent;
* State whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements;
* Prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets
of the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Wren Homes Group Plc
For the year ended 31 July 2007
Directors' report (continued)
Dividends
The directors recommended and paid a dividend of 0.25p per ordinary share during
the year.
Environmental and social responsibilities
The Group pays particular attention to environmental and social issues. It
takes great care to ensure that each development fits with the local environment
and strives to ensure best practice in a commercially acceptable way and
compliance with regulatory obligations.
Statement as to disclosure of information to auditors
So far as the directors are aware, there is no relevant audit information
(as defined by section 234ZA of the Companies Act 1985) of which the Company's
auditors are unaware, and each director has taken all the steps that he ought to
have taken as a director in order to make himself aware of any relevant audit
information and to establish that the Company's Auditors are aware of that
information.
Auditors
In accordance with section 385 of the Companies Act 1985, a resolution proposing
that Mazars LLP be reappointed as auditors of the Company will be put to the
Annual General Meeting.
Approved by the board on 17 December 2007 and signed on its behalf by
----------------------------------
P A Treadaway, Director
Independent auditors' report to the members of Wren Homes Group Plc
Unqualified opinion: non quoted company incorporated in Great Britain preparing
accounts under IFRSs as adopted by the European Union (and as issued by the
International Accounting Standards Board) reporting under ISAs
We have audited the financial statements of Wren Homes Group Plc for the year
ended 31 July 2007 which comprise the Consolidated Income Statement, the
Consolidated Balance Sheet, the Statement of Changes in Equity, the Consolidated
Cash Flow Statement, the Company's Income Statement, the Company's Balance
Sheet, the Company's Cash Flow Statement and related notes. These financial
statements have been prepared under the accounting policies set out therein.
This report is made solely to the company's members, as a body, in accordance
with Section 235 of the Companies Act 1985. Our audit work has been undertaken
so that we might state to the company's members those matters we are required to
state to them in an auditors' report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company's members as a body, for our audit work,
for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors' responsibilities for preparing the financial statements in
accordance with applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union are set out in the Statement of
Directors' Responsibilities.
Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and International Standards on
Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true
and fair view, whether the financial statements have been properly prepared in
accordance with the Companies Act 1985. We also report to you whether in our
opinion the information given in the Directors' Report is consistent with the
financial statements.
In addition we report to you if, in our opinion, the company has not kept proper
accounting records, if we have not received all the information and explanations
we require for our audit, or if information specified by law regarding
directors' remuneration and transactions with the company and other members of
the group is not disclosed.
We read the Directors' Report and consider the implications for our report if we
become aware of any apparent misstatement.
We read other information contained in the Annual Report, and consider whether
it is consistent with the audited financial statements. This other information
comprises only the Chairman's Statement. We consider the implications for our
report if we become aware of any apparent misstatement or material
inconsistencies with the financial statements. Our responsibilities do not
extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgements made by the directors in the preparation of
the financial statements, and of whether the accounting policies are appropriate
to the circumstances of the company and the group, consistently applied and
adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
Independent auditors' report to the members of Wren Homes Group Plc (cont'd)
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion
In our opinion:
* the financial statements give a true and fair view, in accordance with
IFRSs as adopted by the European Union, of the state of the company's and the
group's affairs as at 31 July 2007 and of the company's and group's profit for
the year then ended;
* the financial statements have been properly prepared in accordance
with the Companies Act 1985; and
* the information given in the Directors' Report is consistent with the
financial statements.
Mazars LLP
Chartered Accountants
and Registered Auditors
Times House
Throwley Way
Sutton
Surrey
SM1 4JQ
Wren Homes Group Plc
Consolidated Income Statement
For the year ended 31 July 2007
Year ended Year ended
31 July 2007 31 July 2006
Note £ £
Revenue 3 2,218,000 3,349,995
Cost of sales (872,312) (1,197,774)
Gross Profit 1,345,688 2,152,221
Administrative expenses (851,502) (410,903)
Profit from operations 4 494,186 1,741,318
Investment Income 5 322,889 29,727
Finance Cost 6 (57,941) (54,867)
Profit before tax 759,134 1,716,178
Income tax charge 8 (224,000) (503,130)
Profit for the year from continuing operations 535,134 1,213,048
All attributable to equity holders of the parent
Earnings per share
Basic 10 1.42p 3.94p
Diluted 10 1.42p 3.78p
The notes on pages 16 to 50 are an integral part of these consolidated financial statements.
Wren Homes Group Plc
Consolidated balance sheet as at 31 July 2007
31 July 2007 31 July 2006
Note £ £
Non-current assets
Goodwill 11 3,135,203 3,135,203
Investment property 13 240,000 240,000
Property plant & equipment 12 75,248 72,230
Trade & other receivables 15 2,675,000 2,150,000
Total non-current assets 6,125,451 5,597,433
Current Assets
Inventories 14 2,435,571 1,232,940
Trade & other receivables 15 2,315,489 1,882,472
Cash & cash equivalents 16 902,665 1,853
Total current assets 5,653,725 3,117,265
Total Assets 11,779,176 8,714,698
Current Liabilities
Trade payables 17 262,507 91,052
Tax liabilities 17 866,393 591,926
Obligations under finance leases 19 53,361 10,535
Other payables 17 77,073 539,640
Bank overdrafts and loans 18 1,577,415 1,399,750
Total current liabilities 2,836,749 2,632,903
Non-current liabilities
Obligations under finance leases 19 - 53,361
Total liabilities 2,836,749 2,686,264
Net assets 8,942,427 6,028,434
Equity
Issued share capital 20 4,042,238 3,306,933
Share premium account 21 3,751,365 2,104,763
Capital redemption reserve 21 98,028 -
Retained earnings 21 1,050,796 616,738
Total equity attributable to equity 8,942,427 6,028,434
holders of the parent
The Financial Statements were approved by the board of directors and authorised
for issue on 17 December 2007. They were signed on its behalf by:
----------------------------------- -------------------------
P A Treadaway - Director P Self - Director
The notes on pages 16 to 50 are an integral part of these consolidated financial
statements.
Wren Homes Group Plc
Consolidated statement of Changes in Equity
For the year ended 31 July 2007
Share Capital Share Premium Capital Retained Total
Redemption Reserves
Reserve
£ £ £ £ £
Balance at 1 August 2006 3,306,933 2,104,763 - 616,738 6,028,434
Profit for the year - - - 535,134 535,134
Issue of shares 833,333 2,166,667 - - 3,000,000
Share costs - (504,999) - - (504,999)
Capital reduction (98,028) - 98,028 - -
Capital reduction cost - (15,066) - - (15,066)
Payment of dividends - - - (101,076) (101,076)
Balance at 31 July 2007 4,042,238 3,751,365 98,028 1,050,796 8,942,427
Wren Homes Group Plc
Consolidated cash flow statement
For the year ended 31 July 2007
2007 2006
Note £ £
Cash flows from operating activities 24(a) (1,343,360) (35,682)
Investing activities
Interest received 322,889 29,727
Interest paid on loans and bank overdrafts (20,357) (22,523)
Interest paid on development loans (44,228) (76,549)
Other interest paid (37,584) (32,344)
Purchase of tangible assets 12 (20,800) (251,294)
Proceeds on disposal of tangible assets - 420,000
Cash flows from investing activities 199,920 67,017
Financing activities
New bank loans 519,985 39,151
Other loans repaid (501,737) 429,384
Bank loans repaid (269,088) (933,682)
Hire purchase repayments (10,535) (7,673)
Share issue 2,479,935 -
Dividends paid (101,076) -
Cash flows from financing activities 2,117,484 (472,820)
Net increase/(decrease) in cash and cash
equivalents
974,044 (441,485)
Cash and cash equivalents brought forward (233,000) 208,485
Cash and cash equivalents carried forward 16 741,044 (233,000)
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
1. General Information
Wren Homes Group Plc is a company incorporated in the United Kingdom under the
Companies Act 1985. The registered address of the company is Suite 4, Oaks
House, 12-22 West Street, Epsom Surrey, KT18 7RG.
The company acts as the holding company for Wren Estates Limited, the principal
activity of which is property development. The other companies in the group are
dormant.
(a) Standards and interpretations in issue not yet adopted
At the date of authorisation of these financial statements, the
following Standards and Interpretations were in issue, but not yet
effective;
IFRS 7 Financial Instruments: Disclosures
IFRS 8 Operating Segments
IAS 1 Amendment to Presentation of Financial
Statements: Comprehensive revision
including requiring a statement of
comprehensive income
IAS 1 Amendment to Presentation of Financial
Statements: Added disclosure about an
entity's capital
IAS 23 Borrowing costs
IFRIC 11 IFRS 2: Group and Treasury Share
Transactions
IFRIC 12 Service Concession Arrangements
IFRIC 13 Customers Loyalty Programmes
IFRIC 14 IAS 19: The limit on a
Defined Benefit Asset, Minimum Funding Requirements and their Interaction
The directors anticipate that all of the above Standards and Interpretations
will be adopted in the Group's financial statements for the period commencing 1
August 2007 and that the adoption of those Standards and Interpretations will
have no material impact on the financial statements of the group in the period
of initial application.
2. Significant accounting policies
The following principal accounting policies have been used consistently in the
preparation of the consolidated financial information of the company. The
consolidated financial information comprises the company and its subsidiaries
(together referred to as "the group").
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
(a) Basis of accounting
The consolidated financial information of Wren Homes Group Plc has been prepared
in accordance with International Financial Reporting Standards (IFRSs) for the
first time. The disclosures required by IFRS 1 concerning the transition from UK
GAAP to IFRS are given in note 25.
The financial information has been prepared under the historical cost
convention, except for the valuation of investment properties and financial
instruments. The principal accounting policies adopted are set out below.
The information has been prepared on a going concern basis. In the opinion of
the directors the group is able to meet its obligations as they fall due for the
foreseeable future.
The financial information comprises the consolidated income statements,
consolidated balance sheets, consolidated statements of cash flows, consolidated
statements of changes in equity and related notes.
(b) Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the company and its subsidiary undertakings, made up to 31 July each year. All
intra-group transactions, balances, income and expenses are eliminated on
consolidation.
(c) Business Combinations
The acquisition of subsidiaries is accounted for using the purchase method. The
cost of acquisition is measured at the aggregate of the fair values, at the date
of exchange, of assets given, liabilities incurred or assumed, and equity
instruments issued by the group in exchange for control of the acquire, plus any
costs directly attributable to the business combination.
Goodwill arising on acquisition is recognised as an asset and initially measured
at cost, being the excess of the cost of the business combination over the
group's interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities recognised. If, after reassessment, the group's
interest in the net fair value of the acquiree's identifiable assets,
liabilities and contingent liabilities exceeds the cost of business combination,
the excess is recognised immediately in the income statement.
(d) Goodwill
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary at the date of acquisition. Goodwill is
initially recognised as an asset at cost and is subsequently measured at cost
less accumulated impairment losses. Goodwill which is recognised as an asset is
reviewed for impairment at least annually. Any impairment is recognised
immediately in profit or loss and is not subsequently reversed.
Goodwill arising on acquisitions before the date of transition to IFRS has been
retained at the previous UK GAAP amounts subject to being tested for impairment
at that date.
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
(e) Revenue recognition
Revenue is measured at the fair value of consideration received or receivable
and represents amounts receivable for developments sold, net of value added tax.
Sale of properties are recognised when contracts for sales are exchanged within
the financial year and the sale is completed within two months of the end of the
financial year.
Sale of options over land are recognised when contracts for sale are exchanged
within the financial year and the title of the option over the land has passed.
Share of profit on development contracts are recognised when contracts are
exchanged on the sale of the units that are subject to the development contract,
providing that completion of the sale takes place within two months of the
financial year end.
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount.
(f) Leasing
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases.
The group as lessor
Rental income from operating leases is recognised on a straight line basis over
the term of the relevant lease. Initial direct costs incurred in negotiating
and arranging an operating lease are added to the carrying amount of the leased
asset and recognised on a straight line basis over the lease term.
The group as lessee
Assets held under finance leases are recognised as assets of the group at their
fair value or, if lower, at the present value of the minimum lease payments,
each determined at the inception of the lease. The corresponding liability to
the lessor is included on the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance charges and reduction of the
lease obligation so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged directly against income,
unless they are directly attributable to qualifying assets, in which case they
are capitalised in accordance with the group's general policy on borrowing costs
(see note (g)).
Rentals payable under operating leases are charged to income on a straight-line
basis over the term of the relevant lease. Benefits received and receivable as
an incentive to enter into an operating lease are also spread on a straight-line
basis over the lease term.
(g) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that necessarily take a
substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. Investment income earned on
the temporary
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
(g) Borrowing costs (cont'd)
investment of specific borrowings pending their expenditure on qualifying assets
is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in the income statement in the period
in which they are incurred.
(h) Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on the taxable profit for the year. Taxable
profit differed from net profit as reported in the income statement because it
excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The group's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profits, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
difference and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business combination)
of other assets and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
(i) Property, plant and equipment
Property, plant and equipment is stated at cost less depreciation and any
recognised impairment losses. Provision is made for depreciation on all
property, plant and equipment at rates calculated to write off the cost or
valuation less estimated residual value, of each asset over its expected useful
life, as follows:
Fixtures, fittings and equipment 20% per annum on cost
Motor vehicles 33% per annum on cost
Assets held under finance leases are depreciated over their useful economic
lives on the same basis as owned assets or, where shorter, over the term of the
relevant lease.
The gain or loss arising on the disposal or retirement of an asset is determined
as the difference between the sale proceeds and the carrying amount of the asset
and is recognised in income.
(j) Investment property
Investment property, which is property held to earn rentals and/or for capital
appreciation, is stated at its fair value at the balance sheet date. Gains or
losses arising from changes in the fair value of the investment property are
included in profit or loss for the period in which they arise.
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
(k) Impairment of tangible assets
At each balance sheet date, the group reviews the carrying amounts of its
tangible assets to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of
the impairment loss. Where the asset does not generate cash flows that are
independent from other assets, the group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and the value
in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
the current market assessments of the time value of money and the risks specific
to the asset for which estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to
be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been
recognised for the asset (or cash-generating unit) in prior years. The reversal
of an impairment loss is recognised as income immediately.
(l) Inventories and work in progress
Work in progress is valued at the lower of cost and net realisable value. Work
in progress includes all direct expenditure on unsold developments. For
speculative schemes (unless satisfactory planning permission has been obtained)
costs are recognised immediately in the income statement.
Net realisable value represents the estimated selling price less all estimated
costs of completion and costs to be incurred in marketing, selling and
distribution.
(m) Financial instruments
Financial assets and liabilities are recognised on the group's balance sheet
when the group becomes a party to the contractual provisions of the instrument.
Trade receivables
Trade receivables are measured at initial recognition at fair value, and are
subsequently measured at amortised cost using the effective interest rate
method. Appropriate allowances for estimated irrecoverable amounts are
recognised in the income statement when there is objective evidence that the
asset is impaired. The allowance recognised is measured as the difference
between the asset's carrying amount and the present value of estimated future
cash flows discounted at the effective interest rate computed at initial
recognition.
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
(m) Financial instruments (cont'd)
Investments
Investments are recognised and derecognised on a trade date where a purchase or
sale of an investment is under contract whose terms require delivery of the
investment within the timeframe established by the market concerned, and are
initially measured at cost, including transaction costs.
Investments are classified as either held-for-trading or available-for-sale, and
are measured at subsequent reporting dates at fair value. Where securities are
held-for-trading purposes, gains and losses arising from changes in fair value
are included in the net profit or loss for the period. For available-for-sale
investments, gains and losses arising from changes in fair value are recognised
directly in equity, until the security is disposed of or is determined to be
impaired, at which time the cumulative gain or loss previously recognised in
equity is included in the net profit or loss for the period. Impairment losses
recognised in profit or loss for equity investments classified as
available-for-sale are not subsequently reversed through the income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other
short term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument is
any contract that evidences a residual interest in the assets of the group after
deducting all of its liabilities.
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds
received, net of direct issue costs. Finance charges, including premiums
payable on settlement or redemption and direct issue costs, are accounted for on
an accruals basis in the income statement using the effective interest rate
method and are added to the carrying amount of the instrument to the extent that
they are not settled in the period in which they arise.
Convertible loan notes
Convertible loan notes are regarded as compound instruments, consisting of a
liability component and an equity component. At the date of issue, the fair
value of the liability component is estimated using the prevailing market
interest rate of similar non-convertible debt. The difference between the
proceeds of issue of convertible loan notes and the fair value assigned to the
liability component, representing the embedded option to convert the liability
into equity of the group, is included in equity.
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
(m) Financial instruments (cont'd)
Trade payables
Trade payables are initially measured at fair value, and are subsequently
measured at amortised cost, using the effective interest rate method.
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received,
net of direct issue costs.
(n) Financing costs and interest income
Financing costs comprise interest payable on borrowings and finance lease
payments and interest income which is calculated using the effective interest
rate method.
(o) Earnings per share
The group calculates both basic and diluted earnings per share in accordance
with IAS 33 "Earnings per share". Under IAS 33, basic earnings per share is
computed using the weighted average number of shares outstanding during the
period. Diluted earnings per share is computed using the weighted average
number of shares outstanding during the period plus the dilutive effect of
warrants and stock options outstanding during the period.
(p) Segmental Reporting
The directors consider that all revenue is derived in the UK and from one
business segment.
(q) Critical accounting judgements and key sources of estimation
uncertainty
Critical judgements in applying the group's accounting policies
In the process of applying the group's accounting policies, which are described
above, management has made the following judgements that have the most
significant effect on the amounts recognised in the financial statements (apart
from those involving estimations, which are dealt with below).
Revenue recognition
The group generally recognises revenue when contracts for sales are exchanged
within the financial year and the sale is completed within two months of the end
of the financial year. However should management consider that the criteria for
revenue recognition is not met for a transaction, revenue recognition would be
delayed until such time as the transaction becomes fully earned. Payments
received in advance of revenue recognition are recorded as deferred income.
Capitalisation of borrowing costs
Borrowing costs directly attributable to the acquisition, construction or
production of assets that necessarily take a substantial period of time to get
ready for their intended sale, are added to the cost of those assets. However
should management consider the criteria for capitalising borrowing costs is not
met for a transaction, the interest charge would be expensed directly to income
statement.
Wren Homes Group Plc
Notes to the consolidated financial statement
For the year ended 31 July 2007
(q) Critical accounting judgements and key sources of estimation
uncertainty (cont'd)
Critical judgements in applying the group's accounting policies
Goodwill
The group recognises all assets and liabilities acquired in purchase
acquisitions, including goodwill, at fair value. Goodwill is not amortised but
is subject to annual tests for impairment. The initial goodwill and subsequent
impairment analyses require management to make subjective judgements concerning
the fair value of cash-generating units. Estimates of fair value are consistent
with the group's plans and forecasts. As at 31 July 2007 the net carrying value
of goodwill was £3,135,203.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the balance sheet date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below:
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in
use of the cash-generating units to which goodwill has been allocated. The
value in use calculation requires the entity to estimate the future cash flows
expected to arise from the cash-generating unit and a suitable discount rate in
order to calculate present value. The carrying amount of goodwill at the
balance sheet date was £3,135,203 and an impairment loss of £nil was recognised
in the period relating to the financial information.
Wren Homes Group Plc
Notes to the consolidated financial statement
For the year ended 31 July 2007
3 Revenue 2007 2006
£ £
Sale of properties 892,500 1,199,995
Share of profit on development contracts 800,500 -
Sale of options over land 525,000 2,150,000
2,218,000 3,349,995
4 Profit from operations 2007 2006
£ £
Profit from operations has been arrived at after charging/(crediting):
Depreciation of property, plant and equipment
- Owned 3,742 1,393
- Leased 14,040 14,040
Profit on sale of tangible assets - (126,382)
Rents and rates 31,804 6,978
Auditors' remuneration for audit services 16,000 12,750
Bank Charges 22,129 3,071
Amounts payable to Mazars LLP by the company and its subsidiary undertakings in respect of non-audit
services were as follows:
2007 2006
£ £
All other services 8,070 1,000
Costs of £2,609 have been recognised during the year (2006: £2,000) in respect of rectification work
to be carried out on property developments. These costs have been recognised in cost of sales.
5 Investment Income 2007 2006
£ £
Bank interest 47,169 2,818
Rental Income 10,250 2,409
Development interest 265,470 24,500
322,889 29,727
The rental income recognised relates to the investment property held by the group. The cost incurred
by the group in maintaining the property in the year were £26,449 (2006: £5,000)
Wren Homes Group Plc
Notes to the consolidated financial statement
For the year ended 31 July 2007
6 Finance costs 2007 2006
£ £
Included in interest payable is the following amount:
Bank Interest 20,357 22,523
Hire Purchase interest 3,457 6,318
Other interest 34,127 26,026
57,941 54,867
Included in cost of sales
Development loan interest 44,228 76,549
Borrowing costs included in the cost of sales during the year arose on specific borrowings for
individual developments. The interest rates on these borrowings were 1.5% over the base rate.
7 Employees
2007 2006
The average monthly number of employees (including directors) during the
period was:
Office and management 3 3
Property development 4 3
7 6
Employment Cost
Group £ £
Wages and salaries 487,640 324,927
Social security cost 62,211 42,526
549,851 367,453
The group does not operate a pension scheme for the employees and does not make any contributions on
behalf of employees into personal pension schemes. See note 23 for details of the directors'
remuneration.
Wren Homes Group Plc
Notes to the consolidated financial statement
For the year ended 31 July 2007
8 Tax 2007 2006
Recognised in the Income Statement £ £
Current tax expense
-UK corporation tax 224,000 504,125
-Adjustments in respect of previous periods - (995)
Total current tax expense 224,000 503,130
Factors affecting the tax expense for the year
Profit before tax 759,134 1,716,178
Profit before income tax at standard rate of 30% (2006:30%) 227,740 514,853
Effects of:
Non deductible expenses 6,470 11,114
Depreciation in excess of capital allowances not recognised as
deferred tax assets
946 2,705
Rate of Tax (11,156) (16,286)
Indexation - (8,261)
Adjustments in respect of previous periods - (995)
(3,740) (11,723)
Current tax charge - effective rate 29.5% (2006:29.3%) 224,000 503,130
2007 2006
£ £
9 Dividends paid
Amounts recognised as distributions to equity holders
Interim dividend - 0.25p per share 101,076 -
Wren Homes Group Plc
Notes to the consolidated financial statement
For the year ended 31 July 2007
10 Earnings per Share
Basic earnings per share
The calculation of basic earnings per share for the years ended 31 July 2007 and 31 July 2006 have
been determined as the net profit after tax divided by the weighted average number of equity
shares in issue in the year.
2007 2006
Net profit attributable to ordinary shareholders 535,134 1,213,048
Number of ordinary shares
Issued ordinary shares at the beginning of the 32,089,054 29,850,283
year
Issue of shares in the year 8,333,333 2,238,771
Issued ordinary shares at the end of the year 40,422,387 32,089,054
Weighted average number of ordinary shares
Issued ordinary shares at the beginning of the 32,089,054 29,850,283
year
Issue of shares part way through the year 5,570,776 932,310
Weighted average number of ordinary shares during
the year
37,659,830 30,782,593
Basic earnings per share 1.42p 3.94p
Diluted earnings per share 2007 2006
Diluted earnings per share 1.42p 3.78p
Diluted earnings per share is calculated by dividing the profit attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding during the period
adjusted for the effects of all potentially dilutive shares. The only potential dilutive share
issue was the convertible loan note issued on 21 July 2005 and converted on 2 March 2006.
The denominators for the purposes of calculation of both basic and diluted earnings per share
have been adjusted to reflect the capitalisation issue in 2006.
Diluted earnings per share is equal to basic earnings per share at 31 July 2007 as there were no
potentially diluted shares in issue during this period.
Wren Homes Group Plc
Notes to the consolidated financial statement
For the year ended 31 July 2007
11 Goodwill £
Cost
At 1 August 2006 3,420,221
Arising in the period -
At 31 July 2007 3,420,221
Accumulated impairment loss:
At 1 August 2006 285,018
Charge for the period -
At 1 July 2007 285,018
Net book Values
At 31 July 2007 3,135,203
At 31 July 2006 3,135,203
The group tests goodwill annually for impairment, or more frequently if there are indications that
goodwill might be impaired.
The recoverable amounts for the cash-generating units are determined from value in use calculations.
The key assumptions for the value in use calculations are those regarding the discount rates, growth
rates and expected changes to selling prices and direct costs during the period. Management
estimates discount rates using pre-tax rates that reflect the current market assessments of the time
value of money and the risks specific to the cash-generating unit. The growth rates are based on
industry growth forecasts. Changes in selling prices and direct costs are based on past practices
and expectations of future changes in the market.
The group prepares cash flow forecasts derived from the most recent financial budgets approved by
management for the next five years and extrapolates cash flows for the following five years based on
the development of the company's property portfolio. This rate does not exceed the average long term
growth rate for the relevant markets.
Amortisation charge
In accordance with IFRS, the goodwill arising on consolidation has not been amortised since the
opening balance sheet date for IFRS implementation of 1 August 2005.
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
12 Property, plant and equipment
Fixtures, fittings
and equipment
Motor Total
vehicles
£ £ £
Cost or valuation
At 31 July 2006 12,534 92,146 104,680
Additions in period 20,800 - 20,800
At 31 July 2007 33,334 92,146 125,480
Depreciation
At 31 July 2006 12,534 19,916 32,450
Charge for the period 3,742 14,040 17,782
At 31 July 2007 16,276 33,956 50,232
Net book values
At 31 July 2007 17,058 58,190 75,248
At 31 July 2006
- 72,230 72,230
Included above are assets held under finance leases or hire purchase contracts as follows :
Fixtures,
fittings and
equipment Motor
Vehicles Total
£ £ £
Net book values
At 31 July 2007 - 58,190 58,190
At 31 July 2006
- 72,230 72,230
Depreciation charge for
the period
Year to 31 July 2007 - 14,040 14,040
Year to 31 July 2006 - 14,040 14,040
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
13 Investment Property
2007 2006
£ £
Fair value at 31 July 2006 and 2007 240,000 240,000
The fair value of the group's investment property at 31 July 2007 has been arrived at on the basis of
a valuation carried out at that date by P West, a director of the company. The valuation was arrived
at by reference to market evidence of transaction prices for similar properties.
The property rental income earned by the group from its investment property, which is leased out under
an operating lease, amounted to £10,250 (2006: £2,409). Direct operating expenses arising on the
investment property in the period amounted to £26,449 (2006: £5,000).
14 Inventories
2007 2006
£ £
Work in progress 2,435,571 1,232,940
£834,237 (2006: £1,108,741) of work in progress has been recognised in cost of sales during the year.
15 Trade and other receivables
2007 2006
£ £
Current trade receivables within one year 2,267,185 1,817,462
Other receivables 20,717 60,162
Prepayments and accrued income 27,587 4,848
2,315,489 1,882,472
Trade receivables due in greater than one year
2,675,000 2,150,000
4,990,489 4,032,472
Trade receivables from sale of developments will typically be less than 60 days, as a sale is only
recognised in the year if exchange takes place within the year, and completion within two months of
the year end.
Trade receivables due in greater than one year relates to amounts owed for the sale of options over
land and are subject to a development contract requiring the amounts to be repaid by 31 December 2009.
Interest is charged at 5% per annum on the outstanding balance.
The directors consider that the carrying amount of trade and other receivables approximates their fair
value.
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
16 Cash and cash equivalents
2007 2006
£ £
Cash at bank and on hand 31 1,853
Short term bank deposit 902,634 -
Cash and cash equivalents 902,665 1,853
Cash and cash equivalents comprise cash held by the group and short-term bank deposits with
an original maturity of three months or less. The carrying amount of these assets
approximates to their fair value.
Cash, cash equivalents and bank overdrafts include the following for the purpose of the cash
flow statement.
2007 2006
£ £
Cash and 902,665 1,853
cash
equivalents
Bank (161,621) (234,853)
overdraft
(note 18)
741,044 (233,000)
Credit Risk
The group's principal financial assets are bank balances, cash and trade and other receivables.
The group's credit risk is primarily attributable to its trade receivables. An allowance for
impairment is made where there is an identified loss event which, based on previous experience,
is evidence of a reduction in the recoverability of the cash flows. The amounts presented in
the balance sheets are net of these allowances for doubtful receivables.
The credit risk on liquid funds is limited because the counterparties are banks with high
credit-ratings assigned by international credit-rating agencies.
The group has a significant concentration of credit risk as the majority of the trade
receivables balance is due from a single counterparty, Warlingham Developments. The directors
consider the current balances will be repaid by the due date of 31 December 2009.
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
17 Trade and other payables: Amounts falling due within one year
2007 2006
£ £
Bank loans and 1,577,415 1,399,750
overdrafts
Net obligations 53,361 10,535
under finance
lease and hire
purchase
contracts (note
19)
Trade payables 262,507 91,052
Corporation tax 723,993 499,993
Other taxes and 142,400 91,933
social security
cost
Directors' 289 133
current accounts
Other payables 6,558 506,596
Accruals and 70,226 32,911
deferred income
2,836,749 2,632,903
Trade creditors principally comprise of trade purchase and ongoing cost.
The average credit period taken for trade purchase is 55 days (2006: 59),
The directors consider that the carrying amount of trade and other payables
approximates their fair value.
18 Bank overdrafts and loans
2007 2006
£ £
Current liabilities
Bank overdrafts 161,621 234,853
Bank loans 1,415,794 1,164,897
1,577,415 1,399,750
The borrowings are repayable as follows: 2007 2006
£ £
On demand or within one year 1,577,415 1,399,750
1,577,415 1,399,750
Less: amount due for settlement within 12 months
(shown under liabilities) (1,577,415) (1,399,750)
Amount due for settlement after 12 months - -
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
18 Bank loans and overdrafts (cont'd)
The weighted average interest rates paid were as
follows:
2007 2006
% %
Bank overdraft 6.76 6.51
Bank loans 6.76 6.51
All borrowings are arranged at floating rates, thus exposing the group to cash flow interest rate risk.
The company does not have any bank loans arranged at fixed interest rates and therefore the group is not
exposed to fair value interest rate risk.
The directors estimate the fair value of the group's borrowings as follows:
2007 2006
£ £
Bank overdrafts 161,621 234,853
Bank Loans 1,415,794 1,164,897
The other principal features of the group's borrowings are as follows:
i. The bank overdraft is repayable on demand and is reviewed annually. The total
overdraft has been secured by a fixed and floating charge over the group's assets. The average
effective interest rate on bank overdrafts approximates 6.76% (2006: 6.51%) per annum and are determined
based on 1.5 % plus base rate.
ii. The group has bank loans for each of the major developments, being 1 at 31 July
2007 (2006: 2). The loans are secured on the freehold of the specific site and are repayable out of the
sale proceeds. The loans carry interest rate at 1.5% over the Royal Bank of Scotland base rate.
The exposure of the borrowings of the group to interest rate changes is restricted to changes in the
Royal Bank of Scotland base rate, as all borrowings carry floating interest rates of 1.5 % above the
base rate.
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
18 Bank loans and overdrafts (cont'd)
Financial risk management objectives and policies
The principal financial market risk faced by the group is the risk of interest
rate movements.
The group manages interest rate exposure by seeking to match financing costs as
closely as possible with the revenues generated by its assets.
The group does not enter into interest rate swaps as management believes that
the costs associated in entering into such funding instruments outweighs the
benefits achieved when the risk of interest rate movement is at an acceptable
level.
19 Obligations under finance leases
The group obligation under finance leases are as follows
Minimum lease payments Present value of minimum
lease payments
2007 2006 2007 2006
£ £ £ £
Amounts payable under finance leases:
Within one year
54,076 13,992 53,361 10,535
In the second to fifth years inclusive - 54,076 - 53,361
54,076 68,068 53,361 63,896
Less: future finance charges (715) (4,172)
Present value of lease obligations 53,361 63,896
Less: Amount due for settlement within 12
months (shown under current liabilities)
(53,361) (10,535)
- 53,361
It is the group's policy to lease all motor vehicles under finance leases. The average lease
term is 3 years. For the year ended 31 July 2007, the average effective borrowing rate was 7.53%
(2006: 7.53%). Interest rates are fixed at the contract date. All leases are on a fixed
repayment basis and no arrangements have been entered into for contingent rental payments.
All lease obligations are denominated in sterling.
The fair value of the group's lease obligations approximates to their carrying amount.
The group's obligations under finance leases are secured by the lessors' rights over the leased
assets.
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
20 Share capital 2007 2006
£ £
Authorised
100,000,000 Ordinary shares of 10p each
10,000,000 3,901,972
10,892,000 Deferred shares 0.9p each - 98,028
10,000,000 4,000,000
Allotted, issued and fully paid
40,422,387 Ordinary shares of 10p each
4,042,238 3,208,905
10,892,000 Deferred shares of 0.9p each
- 98,028
4,042,238 3,306,933
During the year 8,333,333 ordinary shares of 10p were issued for cash at a
premium of 26p per share.
On 18 April 2007 the company was granted permission by the High Court of Justice
to cancel the deferred shares.
The deferred shares ranked pari passu with existing ordinary shares after the
holders of ordinary shares have received in return or distribution of £1 million
for each ordinary shares held, as to the right to return or distribution of
capital. They also ranked pari passu with existing ordinary shares after the
holders of ordinary shares have received payment of a dividend in each financial
year of £1 million for each ordinary share held, as to the right to payment of
dividends.
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
21 Share capital and reserves
Group
Share Share Premium Capital Retained Total
Capital Redemption Reserves
Reserve
£ £ £ £ £
Balance at 1 August 2006 3,306,933 2,104,763 - 616,738 6,028,434
Profit for the year - - - 535,134 535,134
Issue of shares 833,333 2,166,667 - - 3,000,000
Share costs - (504,999) - - (504,999)
Capital reduction (98,028) - 98,028 - -
Capital reduction cost - (15,066) - - (15,066)
Payment of dividends - - - (101,076) (101,076)
Balance at 31 July 2007 4,042,238 3,751,365 98,028 1,050,796 8,942,427
The capital redemption reserve relates to the cancellation of the deferred shares (note 20).
22 Operating lease arrangements
The group as a lessee
The total of future minimum lease payments under non-cancellable operating leases are as follows:
Land and Building Other
2007 2006 2007 2006
£ £ £ £
Expiry date:
In the second to fifth years inclusive 132,310 - 4,695 6,260
Operating lease payments in respect of land and building represent rentals payable by the group for
its registered office. The lease expires on 15 October 2011, with 6.5% increases on 15 October 2007
and 15 October 2008.
Other operating lease payments represent rentals payable by the group for office equipment. Leases
are negotiated for an average term of 5 years and rentals are fixed for an average of 5 years.
The group as a lessor
Property rental income earned during the year was £10,250 (2006 £2000). The properties held by the
group are expected to generate rental yields of 4.38% on an ongoing basis. The group only held one
investment property at the balance sheet date. This property has a committed tenant until April
2008, generating future operating lease income of £7,875
Wren Homes Group Plc
Notes to the consolidated financial statements
For the year ended 31 July 2007
23 Related Party Transactions
Transactions between the company and its subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this note.
Control
At 31 July 2007 there is no ultimate controlling party.
At 31 July 2006 the controlling parties of the group were the directors, PA Treadaway and P J
West, by virtue of their ownership of the issued share capital of the company. At 31 July
2006, their ownership represented 86.50% of the company.
Compensation of key management personnel
The remuneration of the directors, who are the key management personnel of the group, is set
out below in aggregate for each of the categories specified in IAS 24 Related Party
Disclosures.
Basic salary Bonus Employee Total
benefits
£ £ £ £
Year ended 31 July 2007
P West 150,000 - 16,000 166,000
P A Treadaway 150,000 - 16,000 166,000
P Self - - - -
B Nathan - - - -
300,000 - 32,000 332,000
Basic salary Bonus Employee Total
benefits
£ £ £ £
Year ended 31 July 2006
P West 92,000 12,000 16,000 120,000
P Treadaway 92,000 12,000 16,000 120,000
P Self - - - -
B Nathan - - - -
184,000 24,000 32,000 240,000
Wren Homes Group Plc
Notes to the consolidated financial statement
For the year ended 31 July 2007
23 Related party transactions (cont'd)
Directors' transactions
Directors' loans
At 31 July 2006, P A Treadaway owed the group £43,017. This amount was repaid in full on
31 August 2006. The maximum outstanding during the year was £43,017. No interest was
charged on this loan.
At 31 July 2007 the group owed P J West £289 (2006 £133) there is no set repayment date and
no interest is charged on the loan.
Directors' transactions
During the year ended 31 July 2007 £19,600 (2006 £18,000) was paid to Self & Co, of which P
Self is the sole proprietor, for the provision of accounting services. These services are
considered to have been arm's length transactions.
During the year ended 31 July 2007 £6,250 (2006: £375) was paid to B Nathan for his
services as a non-executive director.
24 Cash flow statement
(a) Reconciliation of operating profit to cash flows from operating activities
31 July 2007 31 July 2006
£ £
Profit from operations 494,186 1,741,318
Depreciation of tangible assets 17,782 15,433
Development loan interest included in cost
of sales
44,228 76,549
Profit on disposal of fixed assets - (126,382)
(Increase)/decrease in work in progress (1,202,631) 1,096,868
(Increase) in receivables (958,017) (2,436,257)
Increase/(decrease) in payables 261,092 (166,651)
Net cash (outflow)/inflow from operating activities (1,343,360) 200,878
Income tax paid - (236,560)
Cash flows from operating activities (1,343,360) (35,682)
WREN HOMES GROUP PLC
Notes to the consolidated financial statements
For the year ended 31 July 2007
25 Explanation of Transition to IFRS
This is the first year that the Group has presented its financial statements under IFRS. The
following disclosures are required in the year of transition. The last financial statements under UK
GAAP were for the year ended 31 July 2006 and the date of transition to IFRS was therefore 1 August
2005.
Reconciliation of Profit for the year ended 31 July 2006
Previously IFRS IFRS IFRS Effect of Restated
reported Convertible Revenue Goodwill Transition Under
under loan notes Recognition to IFRS
UK GAAP IFRS
(a) (b) (c)
£ £ £ £ £ £
Revenue 3,349,995 - - - - 3,349,995
Cost of sales (1,197,774) - - - - (1,197,774)
Gross profit 2,152,221 - - - - 2,152,221
Net operating expenses (581,915) - - 171,012 171,012 (410,903)
Profit from operations 1,570,306 - - 171,012 171,012 1,741,318
Net finance cost 16,860 (13,000) (29,000) - (42,000) (25,140)
Profit before tax 1,587,166 (13,000) (29,000) 171,012 129,012 1,716,178
Tax (515,580) 3,900 8,550 - 12,450 (503,130)
Profit after tax 1,071,586 (9,100) (20,450) 171,012 141,462 1,213,048
Earnings per share
Basic 3.48p (0.03)p (0.07)p 0.56p 0.46p 3.94p
Diluted 3.34p (0.03)p (0.06)p 0.53p 0.44p 3.78p
WREN HOMES GROUP PLC
Notes to the consolidated financial statements
For the year ended 31 July 2007
25 Explanation of transition to IFRS (cont'd)
Reconciliation of Equity at 31 July 2006 (date of last UK GAAP financial statements)
Previously Opening IFRS IFRS IFRS Effect of Restated
reported Balance Convertible Revenue Goodwilll Transition Under
under Sheet loan notes Recognition to IFRS
UK GAAP Adjustment IFRS
(a) (b) (c)
£ £ £ £ £ £ £
Assets
Non-current assets
Goodwill 2,622,169 342,023 - - 171,011 513,034 3,135,203
Investment property 240,000 - - - - - 240,000
Property Plant & Equipment 72,230 - - - - - 72,230
Trade & other receivables 2,150,000 - - - - - 2,150.000
Total non current assets 5,084,399 342,023 - - 171,011 513,034 5,597,433
Current assets
Inventories 1,232,940 - - - - - 1,232,940
Trade and other receivables 1,935,972 - - (53,500) - (53,500) 1,882,472
Cash and cash equivalents 1,853 - - - - - 1,853
Total current assets 3,170,765 - - (53,500) - (53,500) 3,117,265
Total assets 8,255,164 342,023 - (53,500) 171,011 459,534 8,714,698
Current liabilities
Trade payables 91,052 - - - - - 91,052
Tax liabilities 622,676 (18,300) (3,900) (8,550) - (30,750) 591,926
Obligations under finance
leases
10,535 - - - - - 10,535
Other payables 537,140 45,000 (18,000) (24,500) - 2,500 539,640
Bank overdraft & loans 1,399,750 - - - - - 1,399,750
Total Current Liabilities 2,661,153 26,700 (21,900) (33,050) - (28,250) 2,632,903
Non- current liabilities
Obligation under finance
leases
53,361 - - - - - 53,361
Total liabilities 2,714,514 26,700 (21,900) (33,050) - (28,250) 2,686,264
Net assets 5,540,650 315,323 21,900 (20,450) 171,011 487,784 6,028,434
Shareholders' equity
Ordinary share capital
issued
3,306,933 - - - - - 3,306,933
Share Premium 2,057,763 - 47,000 - - 47,000 2,104,763
Equity reserve - 16,000 (16,000) - - - -
Retained earnings 175,954 299,323 (9,100) (20,450) 171,011 440,784 616,738
Total shareholders' equity 5,540,650 315,323 21,900 (20,450) 171,011 487,784 6,028,434
WREN HOMES GROUP PLC
Notes to the consolidated financial statements
For the year ended 31 July 2007
25 Explanation of transition to IFRS (cont'd)
Reconciliation of Equity at 1 August 2005 (date of transition to IFRS)
Previously IFRS IFRS IFRS Effect of Restated
reported under Convertible Revenue Goodwilll Transition Under
UK GAAP loan notes Recognition to IFRS
£ (a) (b) (c) IFRS
£ £ £ £ £
Assets
Non-current assets
Goodwill 2,793,180 - - 342,023 342,023 3,135,203
Investment property - - - - - -
Property Plant & Equipment 369,987 - - - - 369,987
Trade & other receivables 1,600,000 - - - - 1,600,000
Total non current assets 4,763,167 - - 342,023 342,023 5,105,190
Current assets
Inventories 2,329,808 - - - - 2,329,808
Trade and other receivables 7,715 - - - - 7,715
Cash and cash equivalents 208,485 - - - - 208,485
Total current assets 2,546,008 - - - - 2,546,008
Total assets 7,309,175 - - 342,023 342,023 7,651,198
Current liabilities
Trade payables 140,163 - - - - 140,163
Tax liabilities 461,912 (10,200) (8,100) - (18,300) 443,612
Obligations under finance
leases 7,674 - - - - 7,674
Other payables 607,040 18,000 27,000 - 45,000 652,040
Bank overdraft & loans 2,059,428 - - - - 2,059,428
Total Current Liabilities 3,276,217 7,800 18,900 - 26,700 3,302,917
Non - current liabilities
Obligation under finance
leases 63,895 - - - - 63,895
Total liabilities 3,340,112 7,800 18,900 - 26,700 3,366,812
Net assets 3,969,063 (7,800) (18,900) 342,023 315,323 4,284,386
Shareholders' equity
Ordinary share capital issued 3,083,056 - - - - 3,083,056
Share Premium 1,781,640 - - - - 1,781,640
Equity reserve - 16,000 - - 16,000 16,000
Retained earnings (895,633) (23,800) (18,900) 342,023 299,323 (596,310)
Total shareholders' equity 3,969,063 (7,800) (18,900) 342,023 315,323 4,284,386
WREN HOMES GROUP PLC
Notes to the consolidated financial statements
For the year ended 31 July 2007
25 Explanation of transition to IFRS (con't)
(a) Convertible loan notes
The convertible loan notes were issued on 31 July 2005. The notes were convertible into
ordinary shares of the company at any time between the date of issue of the notes and the 30th
day of the fourth month following the issue date. On issue, the loan notes were convertible at
2,238,771 Ordinary shares per £500,000 loan note.
Interest of 10% per annum will be paid annually until the settlement date.
The loans have been recognised at fair value, using the market rate for a similar instrument of
7% for the purposes of the valuation. The difference between the nominal value of the loan and
the fair value has been recognised directly in profit or loss as a finance charge.
The fair value of the convertible loan notes have been split between a liability element and an
equity component, to represent the fair value of the embedded option to convert the liability
into equity of the group, as follows:
£
Nominal value of convertible loan notes issued 536,000
Equity component (16,000)
Liability component at date of issue 520,000
Interest charged 13,000
Liability component at 31 July 2005 533,000
The loan notes were converted into equity of the group during the year ended 31 July 2006
(b) Revenue recognition
Facility fees of £40,000 and £53,500 were payable by Warlingham Developments Limited and
Warlingham Developments Two Limited on the granting of loan notes. Under UK GAAP these were
recognised on the date the loan notes were granted, under IFRS they have been recognised as "
quasi interest" and spread over the life of the loan notes.
(c) Goodwill
Goodwill arose on the acquisition of Wren Homes Plc in 2002 and was being amortised over 20
years. IFRS require goodwill to be assessed for impairment at each year end. It is considered
that this goodwill has not been impaired and the balance of £3,135,203 remains.
(d) Explanation of material adjustments to the cash flow statement for the year ended 31 July 2006
All the adjustments explained above are of a non cash nature and therefore there is no material
difference between the cash flow statement for 2006 under UK GAAP and IFRS.
WREN HOMES GROUP PLC
Company Income Statement
For the year ended 31 July 2007
Note Year ended 31 Year ended 31
July 2007 July 2006
£ £
Continuing Operations
Operating income
- Management Charges 535,000 355,000
- Dividends from subsidiaries 400,000 -
935,000 355,000
Administrative expenses (455,194) (171,830)
Profit from operations 27 479,806 183,170
Investment Income 28 319 34
Finance cost 29 (2,184) (30,353)
Profit before tax 477,941 152,851
Income tax 30 (14,900) (25,217)
Profit for the year from continuing operations 463,041 127,634
All attributable to equity holders of the parent
The notes on pages 16 to 50 are an integral part of these consolidated financial statements.
WREN HOMES GROUP PLC
Company Balance Sheet
At 31 July 2007
Note 31 July 2007 31 July 2006
£ £
Non-Current assets 31 4,000,000 4,000,000
Current assets
Trade and other receivables 32 4,414,865 1,794,568
Cash and cash equivalents 32 - 1,825
Total current assets 4,414,865 1,796,393
Total assets 8,414,865 5,796,393
Current liabilities
Trade payables 33 42,477 16,890
Tax liabilities 33 49,214 42,959
Other payables 33 14,180 14,339
Bank Loan 33 - 255,1111
Total current liabilities 105,871 329,299
Non-current liabilities - -
Total liabilities 105,871 329,299
Net assets 8,308,994 5,467,094
EQUITY
Share capital 34 4,042,238 3,306,933
Share premium account 34 3,751,365 2,104,763
Capital redemption reserve 34 98,028 -
Retained earnings 35 417,363 55,398
Equity attributable to equity holders of the parent 8,308,994 5,467,094
The Financial statements were approved by the board of directors and authorised for issue on 17 December
2007. They were signed on its behalf by:
------------------------------------ -----------------------
P A Treadaway - Director P Self - Director
The notes on pages 16 to 50 are an integral part of these consolidated financial statements.
Wren Homes Group Plc
Company Statement of changes in equity
For the year ended 31 July 2007
Share Capital Share Premium Capital Retained Total
Redemption Reserves
Reserve
£ £
£
£ £
Balance at 1 August 2006 3,306,933 2,104,763 - 55,398 5,467,094
Profit for the year - - - 463,041 463,041
Issue of shares 833,333 2,166,667 - - 3,000,000
Share cost - (504,999) - - (504,999)
Capital reduction (98,028) - 98,028 - -
Capital reduction cost - (15,066) - - (15,066)
Payment of dividends - - - (101,076) (101,076)
Balance at 31 July 2007 4,042,238 3,751,365 98,028 417,363 8,308,994
WREN HOMES GROUP PLC
Company Cash flow statement
For the year ended 31 July 2007
2007 2006
Note £ £
Cash flows from operating activities 37(a) (2,123,708) (888,911)
Investing activities
Interest received 319 34
Interest paid on loans and bank overdrafts (1,634) (17,218)
Other interest paid (550) (13,135)
Purchase of tangible assets - (11,294)
Proceeds on disposal of tangible assets - 420,000
Cash flows from investing activities (1,865) 378,387
Financing activities
New loans - -
Increase in other loans - -
Bank loans repaid (255,111) (18,667)
High purchase repayments - -
Share issue 2,479,935 531,000
Dividends paid (101,076) -
Cash flow from financing activities 2,123,748 512,333
Net increase/(decrease) in cash and cash equivalents (1,825) 1,809
Cash and cash equivalents brought forward 1,825 16
Cash and cash equivalents carried forward 32 - 1,825
WREN HOMES GROUP PLC
Notes to the company financial statements
For the year ended 31 July 2007
26 Significant Accounting Policies
The separate financial statements of the company are presented as required by the Companies Act
1985. As permitted by the Act, the separate financial statements have been prepared in accordance
with International Financing Reporting Standards.
The financial statements have been prepared on the historical cost basis except for the valuation of
certain financial instruments. The principal accounting policies adopted are the same as those set
out in note 2 to the consolidated financial statements except as noted below.
Investments in subsidiaries are stated at cost less, where appropriate, provision for impairment.
27 Profit from operations 2007 2006
Profit from operations has been arrived after charging/(crediting)
Profit on sale of tangible assets - (126,382)
Auditors remuneration for audit services 10,000 6,750
Bank Charges 31 62
Amounts payable to Mazars LLP by the company in respect of non-audit services were as follows:
2007 2006
£ £
All other services 8,070 1,000
28 Investment Income 2007 2006
Bank Interest 319 34
29 Finance costs
2007 2006
Interest on bank loan 1,634 17,218
Other interest 550 13,135
2,184 30,353
WREN HOMES GROUP PLC
Notes to the company financial statements
For the year ended 31 July 2007
30 TAX
Recognised in the income statement 2007 2006
Current tax expense
- UK corporation tax 14,900 25,217
Factors affecting the tax expense for the year Year Ended Year Ended
2007 2006
£ £
Profit before tax 477,941 152,851
Profit before income tax at standard rate of 30% (2006:30%) 143,382 45,855
Effects of:
Non deductible expenses - 4,204
Rate of tax (8,482) (16,581)
Indexation - (8,261)
Dividends from subsidiaries (120,000) -
(124,482) (20,638)
Current Tax change 14,900 25,217
31 Subsidiaries
Details of the company's subsidiaries at 31 July 2007 are as follows:
Subsidiary Principal Place of Proportion of Proportion of
activities incorporation ordinary Shares and ordinary shares and
and operation voting power held by voting power held by
the company subsidiaries
% %
Wren Homes Plc Holding Company England 100 -
Wren Estates Limited Property England - 100
development
Wren Developments Limited Dormant England - 100
Wren Land Developments
Limited Dormant England - 100
WREN HOMES GROUP PLC
Notes to the company financial statements
For the year ended 31 July 2007
32 Financial assets
Trade and other receivables
At the balance sheet date trade and other receivables comprise amounts receivable from fellow Group
companies of £4,409,342 (2006 : £1,375,668).
The directors consider that the carrying amount of trade and other receivables approximates to their
fair value.
Cash and cash equivalents
These comprise cash held by the Company and short - term bank deposits with an original maturity of
three months or less. The carrying amount of these assets approximates their fair value.
33 Financial liabilities
Trade and other payables
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The
average credit period taken for trade purchases is 55 days.
The directors consider that the carrying amount of trade and other payables approximates to their
fair value.
Bank Loans
Details of the bank loans are given in note 18 to the consolidated financial statements.
34 Share capital, share premium account and capital redemption reserve
The movements on these items are disclosed in note 21 to the consolidated financial statements.
35 Retained earnings £
Balance at 1 August 2006 55,398
Net profit for the year 463,041
Dividends paid (101,076)
Balance at 31 July 2007 417,363
WREN HOMES GROUP PLC
Notes to the company financial statements
For the year ended 31 July 2007
36 Related party transactions
For details of related party transactions see note 23
37 Cash flow statement
(a) Reconciliation of operating profit to cash flows from operating activities
31 July 2007 31 July 2006
£ £
Profit from operations 479,806 183,170
Profit on disposal of fixed assets - (126,382)
(Increase) in receivables (2,620,297) (874,295)
Increase/(decrease) in payables 16,783 (63,090)
Net cash (outflow) from operating activities
(2,123,708) (880,597)
Income tax paid - (8,314)
Cash flows from operating activities (2,123,708) (888,911)
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FFDFUWSWSEDE
1 Year Wren (See LSE:WREN) Chart |
1 Month Wren (See LSE:WREN) Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
