RNS Number:5407M
Swan(John) & Sons PLC
25 January 2008
JOHN SWAN & SONS PLC
INTERIM FINANCIAL REPORT
For the half year ended 31 October 2007
CHAIRMAN'S STATEMENT
Our results for the first half of the trading year can be summarised as follows:
31 October 31 October
2007 2006
John Swan Limited (109,261) 138,491
John Swan & Sons PLC (77,609) (63,562)
(Loss)/Profit before taxation £ (186,870) £ 74,929
The results are shown under International Financial Reporting Standards for the
first time and whilst this has had no impact on the actual profit reported, the
presentation of the Interim Financial Report has had to change.
The balance sheet shows a cash position of £1.742m, a decrease of £516,000 since
the last year end, 30 April 2007. This is due to the trading loss for the
period, payment of ongoing property development expenses, payment of a dividend
and the normal seasonal increase in trade debtors.
Progress has been made with regard to our property and land assets. This has
been achieved with the assistance of professional advisers, whose fees will be
set against future gains from disposals.
Further to the announcement by the Company dated 8 November 2006 in connection
with the conditional agreement with Aldi Stores Limited ("Aldi") in respect of
the sale to Aldi of an area of ground of 1.4 acres at Chesser Avenue, Edinburgh,
the Company announced on 14 December 2007 that the planning application
submitted by Aldi to Edinburgh City Council has been refused. The Board of
Directors of the Company is currently considering whether to appeal the decision
and will issue an update in due course.
The Board also announced on 14 December 2007 that the Scottish Borders Council
Planning Committee has resolved to grant planning permission for the
redevelopment of the existing mart at St Boswells for residential use and for
the construction of a new mart at St Boswells on land already owned by the
Company, in each case subject to conditions which will require negotiation
before formal planning permission can be confirmed.
Shareholders are reminded that, as stated in the Chairman's statement included
in the Annual Report 2007, development of the new mart at St Boswells will
require to be separately funded and it is not linked to the redevelopment of the
existing mart site. John Swan & Sons PLC has already announced that it will
assist this project but will not provide funding.
Finally, the Board was able last year to declare an interim dividend. It is
proposed that this dividend policy should continue, for the time being, and the
directors are pleased to declare an interim dividend for the current financial
year of 15p per ordinary share to be paid on 7 March 2008 to shareholders on the
register at 8 February 2008. The ex dividend date will be 6 February 2008.
AJ Ritchie
MANAGING DIRECTOR'S STATEMENT - JOHN SWAN LIMITED
The adverse effect of the foot and mouth outbreak and the movement restrictions
which applied throughout the peak sheep marketing period of August and September
has had an inevitable impact on the UK sheep industry. The autumn sales make a
substantial contribution to an auction market's income and, in the case of John
Swan Limited, the autumn sales provide the peak earning opportunity. These
factors, together with the added costs which were incurred, have resulted in the
livestock business showing a loss of £109,261 for the first six months.
Our estate agency and non agricultural activities continue to be active and make
a valuable addition to our income.
We are pleased to report that, as noted above, the outline planning application
for the rural centre has been recommended for approval by the Scottish Ministers
and at the time of writing final approval is being awaited. Customers will be
informed of ongoing developments.
JC Clark
CONSOLIDATED INCOME STATEMENT
For the half year ended 31 October 2007
31 October 31 October
2007 2006
£ £
Continuing Operations
Revenue 572,254 814,918
Staff costs 472,432 467,196
Depreciation 55,281 47,100
Other operating expenses 355,933 343,618
883,646 857,914
Operating loss (311,392) (42,996)
Share of results of joint venture 97 297
Investment revenues 124,770 118,057
Finance costs (345) (429)
(Loss)/Profit before tax (186,870) 74,929
Tax - -
(Loss)/Profit for the period (186,870) 74,929
Attributable to:
Equity holders of the parent (186,870) 74,929
Earnings per share
From continuing operations
Basic and diluted (30.7)p 12.3p
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
For the half year ended 31 October 2007
31 October 31 October
2007 2006
£ £
Actuarial gains/(losses) on defined benefit
pension scheme - -
Tax on items taken directly to equity - -
Net income recognised directly in equity - -
(Loss)/Profit for the period (186,870) 74,929
Total recognised income and expense
for the period (186,870) 74,929
Attributable to:
Equity holders of the parent (186,870) 74,929
CONSOLIDATED BALANCE SHEET
At 31 October 2007
31 October 30 April 31 October
2007 2007 2006
£ £ £
Non-current assets
Property, plant and motor vehicles 1,788,095 1,836,781 1,832,932
Interest in joint venture 8,309 8,212 5,288
Pension scheme assets 1,192,000 1,192,000 1,013,000
2,988,404 3,036,993 2,851,220
Current assets
Inventories 24,778 35,648 62,615
Trade and other receivables 2,613,590 2,279,396 2,653,401
Cash and cash equivalents 1,742,659 2,258,814 1,948,272
4,381,027 4,573,858 4,664,288
Total assets 7,369,431 7,610,851 7,515,508
Current liabilities
Trade and other payables 197,664 159,224 195,552
Current tax liabilities 4,500 4,500 10,000
Obligations under finance leases 2,478 2,478 2,478
204,642 166,202 208,030
Net current assets 4,176,385 4,407,656 4,456,258
Non-current liabilities
Deferred tax liabilities 382,890 382,890 304,000
Obligations under finance leases 5,609 6,849 8,088
Deferred income 17,200 17,600 18,000
405,699 407,339 330,088
Total liabilities 610,341 573,541 538,118
Net assets 6,759,090 7,037,310 6,977,390
EQUITY
Share capital 168,000 168,000 168,000
Revenue reserve 70,000 70,000 70,000
Employee Benefit Trust reserve (39,815) (39,815) (39,815)
Retained earnings 6,560,905 6,839,125 6,779,205
Total equity - attributable to equity holders
of the parent 6,759,090 7,037,310 6,977,390
CONSOLIDATED CASH FLOW STATEMENT
For the half year ended 31 October 2007
Notes 31 October 31 October
2007 2006
£ £
Net cash used in operating activities 3 (491,740) (657,839)
Investing activities
Interest received 74,770 68,057
Proceeds on disposal of motor vehicles - 4,785
Purchases of plant and motor vehicles (6,595) (12,500)
Net cash from investing activities 68,175 60,342
Financing activities
Dividends paid 4 (91,350) (91,350)
Repayment of obligations under finance leases (1,240) (1,652)
Net cash used in financing activities (92,590) (93,002)
Net decrease in cash and cash equivalents (516,155) (690,499)
Cash and cash equivalents at beginning of period 2,258,814 2,638,771
Cash and cash equivalents at end of period 1,742,659 1,948,272
NOTES TO THE FINANCIAL STATEMENTS
For the half year ended 31 October 2007
1 General information
The information for the period ended 31 October 2007 does not constitute statutory accounts as defined in
section 240 of the Companies Act 1985. A copy of the statutory accounts for the year ended 30 April 2007
has been delivered to the Registrar of Companies. The auditors' report on those accounts was not
qualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985.
The interim results are unaudited. They should not be taken as a guide to the full year and do not
constitute the statutory accounts.
2 Significant accounting policies
Basis of accounting
The condensed set of financial statements has been prepared using accounting policies consistent with
International Financial Reporting Standards (IFRSs) as adopted for use in the EU and in accordance with
IAS 34 'Interim Financial Reporting'.
The same accounting policies, presentations and methods of computation are followed in the condensed set
of financial statements as will be applied in the Group's next annual audited financial statements.
The financial statements have been prepared on the historical cost basis. The principal accounting
policies adopted are set out below.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company (its subsidiaries) made up to 30 April each year. Control is achieved where
the Company has the power to govern the financial and operating policies of an investee entity so as to
obtain benefits from its activities.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting
policies used into line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Investments in joint ventures
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity
that is subject to joint control. The results and assets and liabilities of the joint venture are
incorporated in the group's financial statements using the equity method of accounting except when
classified for sale. The interest in the jointly controlled entity is initially recorded at cost and
adjusted thereafter for the post-acquisition change in the Group's share of net assets. The profit or
loss of the Group includes the Group's share of the profit or loss of the jointly controlled entity.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts
receivable for goods and services provided in the normal course of business, net of discounts and VAT.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the
effective interest rate applicable.
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.
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 in 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.
Rentals payable under operating leases are charged to income on a straight-line basis over the term of
the relevant lease.
Borrowing costs
All borrowing costs are recognised in profit or loss in the period in which they are incurred.
Government grants
Government grants relating to property are treated as deferred income and released to profit or loss over
the expected useful lives of the assets concerned.
Operating profit
Operating profit is stated before the share of results of the joint venture and before investment income
and finance costs.
Retirement benefit costs
The cost of providing benefits for defined benefit schemes is determined using the Projected Unit Method,
with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are
recognised in full in the period in which they occur. They are recognised outside profit or loss and
presented in the statement of recognised income and expense.
Past service cost is recognised immediately to the extent that the benefits are already vested and
otherwise is amortised on a straight-line basis over the average period until the benefits become vested.
The retirement benefit obligation recognised in the balance sheet represents the present value of the
defined benefit obligation as adjusted for unrecognised past service cost and as reduced by the fair
value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus
the present value of available refunds and reductions in future contributions to the scheme.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs 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 profit and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences 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.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Property, plant and motor vehicles
Property, plant and motor vehicles are stated at cost less depreciation. Depreciation is charged so as
to write off the cost of assets over their estimated useful lives, on the following bases:
Buildings 2 1/2% to 5% straight line
Plant and machinery 10% and 20% reducing balance and 25% straight line
Motor vehicles 25% straight line
All tangible assets have been depreciated with the exception of land and heritable property in existence
at 30 April 1968, as any depreciation charge in respect of this heritable property would be immaterial.
Assets held under finance leases are depreciated over their expected useful 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 sales proceeds and the carrying amount of the asset and is recognised in income.
Inventories
Inventories are stated at the lower of cost and net realisable value.
Financial instruments
Financial assets and financial liabilities are recognised in 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. Appropriate allowances for
estimated irrecoverable amounts are recognised in profit or loss 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 expected amount recoverable.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and bank deposits.
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
Bank overdrafts are recorded at the proceeds received. Financial charges are accounted for on an
accruals basis in profit or loss.
Trade payables
Trade payables are measured at fair value.
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event and it is
probable that the Group will be required to settle that obligation. Provisions are measured at the
directors' best estimate of the expenditure required to settle the obligation at the balance sheet date.
3 Notes to the cash flow statement
31 October 31 October
2007 2006
£ £
(Loss)/Profit before tax (186,870) 74,929
Adjustments for:
Share of results of joint venture (97) (297)
Investment revenues (124,770) (118,057)
Finance costs 345 429
Pension scheme current service cost 50,000 50,000
Depreciation of property, plant and motor vehicles 55,281 47,100
Gain on sale of motor vehicles - (1,870)
Deferred income released in the year (400) (400)
Operating cash flows before movement in working capital (206,511) 51,834
Decrease/(Increase) in inventories 10,870 (10,034)
(Increase) in receivables (334,194) (610,993)
Increase in payables 38,440 26,783
Cash used in operations (491,395) (542,410)
Income taxes paid - (115,000)
Interest paid (345) (429)
Net cash used in operating activities (491,740) (657,839)
Cash and cash equivalents (which are presented as a single class of assets on the face of the balance
sheet) comprise cash at bank.
4 Dividends
31 October 31 October
2007 2006
£ £
Dividend on ordinary shares paid on 18 September 2007 :
Final 2007 91,350 91,350
5 Explanation of transition to IFRSs
The year from 1 May 2007 to 30 April 2008 is the first year that the company will present 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 30 April 2007
and the date of transition to IFRSs was therefore 1 May 2006.
Reconciliation of equity at 1 May 2006 (date of transition to IFRSs)
Effect of
transition to
Note UK GAAP IFRs IFRSs
£. £ £
Property, plant and motor vehicles 1,858,229 - 1,858,229
Interest in joint venture 4,991 - 4,991
1 Pension scheme assets 709,000 304,000 1,013,000
Total non-current assets 2,572,220 304,000 2,876,220
Inventories 52,581 - 52,581
Trade and other receivables 2,042,408 - 2,042,408
Cash and cash equivalents 2,638,771 - 2,638,771
Total current assets 4,733,760 - 4,733,760
Total assets 7,305,980 304,000 7,609,980
Trade and other payables 168,769 - 168,769
Current tax liabilities 125,000 - 125,000
1 Deferred tax liabilities - 304,000 304,000
Deferred income 18,400 - 18,400
Total liabilities 312,169 304,000 616,169
Total assets less total liabilities 6,993,811 - 6,993,811
Issued capital 168,000 - 168,000
Revenue reserve 70,000 - 70,000
Employee Benefit Trust reserve (39,815) - (39,815)
Retained earnings 6,795,626 - 6,795,626
Total equity 6,993,811 - 6,993,811
Notes to the reconciliation of equity at 1 May 2006
1 The pension scheme asset was presented net of deferred tax under previous GAAP but under IFRSs the
pension scheme asset must be presented gross with any deferred tax consequences recognised
separately.
Reconciliation of equity at 30 April 2007 (date of last UK GAAP financial statements)
Effect of
transition to
Note UK GAAP IFRs IFRSs
£. £ £
Property, plant and motor vehicles 1,836,781 - 1,836,781
Interest in joint venture 8,212 - 8,212
1 Pension scheme assets 834,000 358,000 1,192,000
Total non-current assets 2,678,993 358,000 3,036,993
Inventories 35,648 - 35,648
Trade and other receivables 2,279,396 - 2,279,396
Cash and cash equivalents 2,258,814 - 2,258,814
Total current assets 4,573,858 - 4,573,858
Total assets 7,252,851 358,000 7,610,851
Trade and other payables 159,224 - 159,224
Current tax liabilities 4,500 - 4,500
1 Deferred tax liabilities 24,890 358,000 382,890
Obligations under finance leases 9,327 - 9,327
Deferred income 17,600 - 17,600
Total liabilities 215,541 358,000 573,541
Total assets less total liabilities 7,037,310 - 7,037,310
Issued capital 168,000 - 168,000
Revenue reserve 70,000 - 70,000
Employee Benefit Trust reserve (39,815) - (39,815)
Retained earnings 6,839,125 - 6,839,125
Total equity 7,037,310 - 7,037,310
Notes to the reconciliation of equity at 30 April 2007
1 The pension scheme asset was presented net of deferred tax under previous GAAP but under IFRSs the
pension scheme asset must be presented gross with any deferred tax consequences recognised
separately.
Reconciliation of equity at 31 October 2006 (comparative period of account)
Effect of
transition to
Note UK GAAP IFRs IFRSs
£. £ £
Property, plant and motor vehicles 1,832,932 - 1,832,932
Interest in joint venture 5,288 - 5,288
1 Pension scheme assets 709,000 304,000 1,013,000
Total non-current assets 2,547,220 304,000 2,851,220
Inventories 62,615 - 62,615
Trade and other receivables 2,653,401 - 2,653,401
Cash and cash equivalents 1,948,272 - 1,948,272
Total current assets 4,664,288 - 4,664,288
Total assets 7,211,508 304,000 7,515,508
Trade and other payables 195,552 - 195,552
Current tax liabilities 10,000 - 10,000
1 Deferred tax liabilities - 304,000 304,000
Obligations under finance leases 10,566 - 10,566
Deferred income 18,000 - 18,000
Total liabilities 234,118 304,000 538,118
Total assets less total liabilities 6,977,390 - 6,977,390
Issued capital 168,000 - 168,000
Revenue reserve 70,000 - 70,000
Employee Benefit Trust reserve (39,815) - (39,815)
Retained earnings 6,779,205 - 6,779,205
Total equity 6,977,390 - 6,977,390
Notes to the reconciliation of equity at 31 October 2006
1 The pension scheme asset was presented net of deferred tax under previous GAAP but under IFRSs the
pension scheme asset must be presented gross with any deferred tax consequences recognised
separately.
Reconciliation of profit for half year ended 31 October 2006 (comparative period of account)
Effect of
transition to
Note UK GAAP IFRs IFRSs
£. £ £
Revenue 814,918 814,918
Staff costs 467,196 467,196
Depreciation 47,100 47,100
Other operating expenses 343,618 343,618
857,914 857,914
Operating loss (42,996) (42,996)
1 Share of results of joint venture (5) 302 297
(43,001) (42,699)
2 Other finance income 50,000 (50,000) -
1 Investment revenues 68,568 (511) 118,057
2 50,000
1 Finance costs (638) 209 (429)
Profit before tax 74,929 74,929
Tax - -
Profit for period 74,929 - 74,929
Notes to the reconciliation of profit for period ended 31 October 2006
1 The components of the Group's share of profit of the joint venture were shown separately under
previous GAAP but under IFRSs the Group's share of profit of the joint venture has been shown as a
single line item.
2 The Group's other finance income, which relates to the pension scheme, was shown as a separate
item under previous GAAP but under IFRSs other finance income has been included in investment
revenues.
Explanation of material adjustments to the cash flow statements for the period ended 31 October 2006 :
Income taxes of £115,000 paid during the period ended 31 October 2006 are classified as operating cash
flows under IFRSs, but were included in a separate category of taxation cash flows under previous GAAP.
Interest of £429 paid during the period ended 31 October 2006 is also classified as operating cash flows
under IFRSs, but was included in returns on investments and servicing of finance under previous GAAP.
There are no other material differences between the cash flow statement presented under IFRSs and the
cash flow statement presented under previous GAAP.
6 Interim results
The interim results were approved by the Board of Directors on 25 January 2008 and were posted out to all
shareholders on that date. The interim results are available to the public for a period of one month
from the date of this announcement from the Secretaries at the Company's registered office.
Registered Office :
Geoghegan & Co
6 St Colme Street
Edinburgh EH3 6AD
Registered in Scotland : No.7893
Enquiries:
John Swan & Sons PLC
Euan Fernie 0131 225 4681
Brewin Dolphin Limited
(Nominated Adviser)
Sandy Fraser 0131 529 0272
This information is provided by RNS
The company news service from the London Stock Exchange
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