RNS Number:7170K
Bizspace PLC
06 May 2003
BIZSPACE PLC
2003 PRELIMINARY RESULTS
Bizspace plc, the provider of flexible managed workspace for small to medium
sized businesses, announces record results for the year ended 28 February 2003,
a period of consolidation and strong growth.
Financial Highlights:
* Turnover up 57% to #4.7m (2002: #3.0m)
* Acquisitions contributed #727,000 to turnover
* Operating Profits up 75% to #2.33m (2002: #1.33m pre exceptional)*
* Pre-tax profits up 100% to #1.32m (2002: #660,000 pre exceptional)*
* EPS of 2.78p up 88% (2002: 1.48p pre exceptional)*
* Properties re-valued and reclassified as investment properties in
Balance Sheet
* NAV per share increased to 43p, up from 30p*
* Gearing now stands at 108%
* No dividend; funds to be used for future acquisitions to maximize
growth rate of the Company
* Dividend likely to be paid in 2004
* Strong balance sheet: Total Net assets of #16.35m, #1.46m cash at bank
and in hand
( * 2002 Comparisons restated)
Operational Highlights:
* 19 sites nationwide (2002: 13 sites)
* 1.4+m sq ft of flexible workspace
* Over 850 units housing over 700 small businesses
* Core occupancy maintained at over 80%
* Sites in Barnet, Birmingham, Bolton, Brixton, Burgess Hill,
Camberwell, Didcot, Durham, Gateshead, Hartlepool, Hove, Hull, London Colney,
Manchester, Newport, Nottingham, Sheffield, Tottenham and Wimbledon
Regarding prospects, Larry Lipman, Chairman of Bizspace plc, said:
"I am confident that in the months to come we will continue to expand the
portfolio throughout the country thus adding to the net asset value and the
profitability that the attached accounts so clearly demonstrate."
For further information please contact:
Bizspace plc Binns & Co PR Ltd
Paul Davis Paul McManus
Neil Corderey
Tel: 020 8815 1616 Tel: 020 7786 9600
www.biz-space.co.uk Mob: 07980 541893
----------------------
BIZSPACE PLC
CHAIRMAN'S STATEMENT
I am delighted to announce another set of record results after an extremely
successful year for Bizspace Plc, in which we continued to grow and consolidate
our position as one of the leading providers of managed workspace in the UK.
Financials
For the year ended 28 February 2003 pre-tax profits rose by 100% to #1.32m
(2002: #660,000, restated, before exceptional items of #253,000). The
restatement is as a result of adding back depreciation due to the change of
accounting policy concerning the classification of the property portfolio, as
detailed below.
Turnover increased by 57% to #4.7m (2002: #3.0m) with acquisitions contributing
#0.7m to turnover growth. EPS for the year is 2.78p (2002: 1.48p before
exceptional items (restated)).
Dividend
The Company's main objective remains that of continuing expansion of the number
of centres it operates and therefore your board have decided that they will not
be paying a dividend in respect of the year ended 28 February 2003 but have
taken the decision that the Company is likely to commence paying dividends one
year from now.
Revaluation of Assets
This has not only been a highly successful trading year for Bizspace, but as
your board alluded to in the interim statement for the half year ended 31 August
2002, the decision was taken to reclassify the properties under the investment
heading and have them revalued. Because this is a change of accounting policy
there is a requirement to restate the comparatives, and in future the profits
will no longer contain any depreciation on the properties in accordance with
SSAP 19.
This has resulted in a transfer to revaluation reserve of #5.8m and gives an
underlying net asset value of 43p (2002: 30p restated), an increase of 43%. I am
very pleased at this clear demonstration that the policy that Bizspace has
followed of buying properties whose income, occupancy levels, and general
management can be improved in the short to medium term is proving highly
successful. As a further consequence of the revaluation, the gearing ratio now
stands at 108% as at 28 February 2003 (2002: 84% restated).
Acquisitions
Following the acquisition activity during the year under review Bizspace now
owns and operates 19 sites nationwide with over 1.4m sq ft of flexible managed
workspace, encompassing some 850 individual units. As at 28 February 2002 the
Company was operating from 13 centres and I announced in my Chairman's statement
last year that we had made two further acquisitions in Birmingham and Barnet
(North London), post year-end. In December four more centres were purchased in
Didcot, St Albans, Hove and Burgess Hill, bringing the total that Bizspace
operates to 19 with a combined current annualised gross income of approximately
#5.7m.
Prospects and Outlook
Bizspace continues to enjoy the backing of its professional advisors and its
bankers and I am confident that in the months to come we will continue to expand
the portfolio throughout the country thus adding to the net asset value and the
profitability that the attached accounts so clearly demonstrate.
Larry Lipman
Chairman
6 May 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 28 February 2003
2002
(unaudited)
Restated (see note 2)
Before Exceptional
2003 Exceptional items
(unaudited) Item (note 6) Total
Note #'000 #'000 #'000 #'000
TURNOVER
Continuing operations 3,962 2,994 - 2,994
Acquisitions 727 - - -
------- ------- ------- -------
Total turnover 3 4,689 2,994 - 2,994
Cost of sales 3 (1,765) (1,043) - ( 1,043)
------- ------- ------- -------
GROSS PROFIT 3 2,924 1,951 - 1,951
Administrative 3,6 (597) (617) (253) (870)
expenses
------- ------- ------- -------
OPERATING PROFIT
Continuing operations 1,780 1,334 (253) 1,081
Acquisitions 547 - - -
------- ------- ------- -------
Total operating profit 2,327 1,334 (253) 1,081
Interest receivable and 24 22 - 22
similar income
Interest payable and (1,030) 696) - (696)
similar charges
------- ------- ------- -------
PROFIT ON ORDINARY
ACTIVITIES BEFORE
TAXATION
1,321 660 (253) 407
Tax on profit on (269) (169) - (169)
ordinary activities
------- ------- ------- -------
PROFIT ON ORDINARY
ACTIVITIES AFTER
TAXATION 1,052 491 (253) 238
Non-equity dividend 7 - (1) - (1)
payable
------- ------- ------- -------
RETAINED PROFIT FOR THE
FINANCIAL YEAR 1,052 490 (253) 237
======= ======= ======= =======
BASIC & DILUTED EARNINGS
PER ORDINARY SHARE 4 2.78p 1.48p 0.72p
======= ======= ======= =======
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Year ended 28 February 2003
Year ended Year ended
28 February 28 February
2003 2002
(unaudited) (unaudited)
Restated
(see note 2)
#'000 #'000
Profit on ordinary activities after taxation 1,052 237
Unrealised surplus on revaluation of investment 3,812 1,984
properties
------- -------
Total recognised gains and losses in the year 4,864 2,221
Prior period adjustment (see note 2) 2,182 -
------- -------
Total recognised gains and losses since last 7,046 2,221
annual report
======= =======
CONSOLIDATED BALANCE SHEET
28 February 2003
Note 2003 2002
(unaudited) (unaudited)
Restated
(see note 2)
#'000 #'000
FIXED ASSETS
Investment Properties 34,925 21,465
Other tangible fixed assets 119 47
-------- --------
35,044 21,512
-------- --------
CURRENT ASSETS
Debtors 454 322
Cash 1,457 1,234
-------- --------
1,911 1,556
CREDITORS: amounts falling
due within one year (1,904) (1,098)
-------- --------
NET CURRENT ASSETS 7 458
-------- --------
TOTAL ASSETS LESS CURRENT LIABILITIES 35,051 21,970
CREDITORS: amounts falling
due after more than one year (18,704) (10,527)
PROVISIONS FOR LIABILITIES
AND CHARGES - (10)
-------- --------
NET ASSETS 9 16,347 11,433
======== ========
CAPITAL AND RESERVES
Called up share capital 1,901 1,889
Shares to be issued 336 336
Share premium account 7,529 7,491
Merger reserve (499) (499)
Revaluation Reserve 5,796 1,984
Profit and loss account 1,284 232
-------- --------
TOTAL EQUITY SHAREHOLDERS' FUNDS 9 16,347 11,433
======== ========
CONSOLIDATED CASH FLOW STATEMENT
Year ended 28 February 2003
2003 2002
(unaudited) (audited)
Note #'000 #'000 #'000 #'000
Net cash inflow from operating 8 2,544 1,646
activities
Returns on investment and
servicing of finance
Interest received 24 22
Interest paid (947) (601)
Preference dividend paid - (1)
------ ------
(923) (580)
Taxation
UK corporation tax paid (187) (48)
Capital expenditure
Payments to acquire fixed (742) (659)
assets
Receipts from sales of fixed 197 190
assets
------- -------
(545) (469)
Acquisitions
Payments to acquire (1,034) -
subsidiary
Payments to acquire (4,920) (3,829)
unincorporated businesses
Net cash acquired with - 1
unincorporated businesses
------- -------
(5,954) (3,828)
------- -------
Cash outflow before (5,065) (3,279)
financing
Financing
Issue of share capital - 3,306
Expenses incurred in issuing - (329)
share capital
Redemption of preference share - (50)
capital
New borrowings 5,734 1,622
Repayment of borrowings (291) (357)
Expenses incurred in arranging (155) (93)
finance
------- -------
Net cash inflow from 5,288 4,099
financing
------- -------
Increase in cash for the 10,11 223 820
year
======= =======
NOTES TO THE STATEMENT
Year ended 28 February 2003
1. BASIS OF PREPARATION
The financial information set out in the announcement does not constitute the
Group's statutory accounts for the year ended 28 February 2003 or the year ended
28 February 2002. With the exception of the restatement as discussed in note 2
below, the financial information for the year ended 28 February 2002 is derived
from the statutory accounts for the that year which have been delivered to the
Registrar of Companies. The auditors reported on those accounts; their report
was unqualified and did not contain a statement under s237(2) or (3) Companies
Act 1985. The statutory accounts for the year ended 28 February 2003 will be
finalised on the basis of the financial information presented by the directors
in this preliminary announcement and will be delivered to the Registrar of
Companies following the Group's annual general meeting.
Copies of this announcement are available from the Company's registered office
at 94-96 Great North Road, London N2 0NL. The Annual Report and Accounts will be
filed at Companies House and sent to shareholders shortly.
These statements have been prepared on the basis of the accounting policies as
stated in the previous year's financial statements with the exception of the
change in accounting policy as detailed in note 2 below.
2. PRIOR YEAR ADJUSTMENT
During the current year the Directors have taken the decision to revise the
accounting policy with regard to properties held under tangible fixed assets.
These properties have now been reclassified under Investment Properties and are
held at market value in accordance with the requirements of SSAP 19. This change
in accounting policy constitutes a prior period adjustment as follows:
Profit and loss Revaluation Shareholders'
account reserve reserve funds
(unaudited)
#'000 (unaudited) (unaudited)
#'000 #'000
28 February 2002 as previously 34 - 9,251
reported
Reversal of depreciation charged in
the period to 28 February 2001 55 - 55
Reversal of depreciation charged in
year to 28 February 2002 143 - 143
Creation of revaluation reserve at
28 February 2002 - 1,984 1,984
------ ------- -------
28 February 2002 restated 232 1,984 11,433
====== ======= =======
As a consequence of this prior period adjustment, restated prior year figures
are presented unaudited.
3. ANALYSIS OF CONTINUING OPERATIONS AND ACQUISITIONS
2003 2002
Continuing Acquisitions Total Continuing
total
(unaudited) (unaudited) (unaudited) (unaudited)
Restated
(see note 2)
#'000
#'000 #'000 #'000
Turnover 3,962 727 4,689 2,994
Cost of sales (1,585) (180) (1,765) (1,043)
------- ------- -------- -------
Gross profit 2,377 547 2,924 1,951
------- ------- -------- -------
Administrative (597) - (597) (617)
expenses
Exceptional items - - - (253)
------- ------- -------- -------
Operating profit 1,780 547 2,327 1,081
======= ======= ======== =======
All administrative expenses are charged centrally, therefore no allocation has
been made between continuing operations and acquisitions.
4. EARNINGS PER SHARE
Basic earnings per share of 2.78p (2002: 0.72p) is based on the retained profit
for the year of #1,052,000 (2002: #237,000 restated) and on the weighted average
number of ordinary shares in issue during the year of 37,817,825 (2002:
33,059,603).
There are no dilutive shares for the current year. In the prior year, the
diluted earnings per share of 0.72p (restated) is based on the retained profit
for the year of #237,000 (restated) and a weighted average number of ordinary
shares in issue during the year of 33,059,866 after taking account of 263
dilutive share options.
The basic earnings per share before exceptional items of 1.48p (restated) in the
prior year is based on a pre-exceptional item profit of #490,000 (restated) and
on a weighted average number of ordinary shares in issue during the year of
33,059,603.
The diluted earnings per share before exceptional items of 1.48p (restated) in
the prior year is based on a pre-exceptional item profit of #490,000 (restated)
and on a weighted number of ordinary shares in issue during the year 33,059,866
after taking account of 263 dilutive share options.
5. SEGMENTAL INFORMATION
The total turnover, profit before tax and net assets for the year have been
derived from the group's principal activity, the provision of managed workspace,
wholly undertaken in the United Kingdom.
6. EXCEPTIONAL ITEMS
2003 2002
(unaudited) (audited)
#'000 #'000
Charge in respect of share options - 213
Costs incurred on aborted acquisition - 40
------- -------
- 253
======= =======
The exceptional item of #213,000 relates to a charge in respect of directors'
share options which were issued with an exercise price at a discount to the fair
value of the options at the date of their issue and includes the estimated
National Insurance charge thereon. The tax effect of the exceptional item is
that it is disallowable for corporation tax and this increases the effective tax
rate.
7. NON-EQUITY DIVIDEND PAYABLE
2003 2002
(unaudited) (audited)
#'000 #'000
Non-equity preference dividend
#nil per share (2002 2.5p per share) - 1
======= =======
8. RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM
OPERATING ACTIVITIES
2003 2002
(unaudited) (unaudited)
Restated
(see note 2)
#'000 #'000
Operating profit 2,327 1,081
Depreciation charges 24 10
(Profit)/loss on sale of fixed assets (61) 21
Charge in respect of share options - 213
Decrease in debtors 3 36
Increase in creditors 251 285
------- -------
Net cash inflow from operating activities 2,544 1,646
======= =======
9. RECONCILIATION OF MOVEMENTS IN CONSOLIDATED SHAREHOLDERS' FUNDS
2003 2002
(unaudited) (unaudited)
Restated
(see note 2)
#'000 #'000
Profit for the year 1,052 237
Issue of shares (net of expenses) 50 2,977
Redemption of preference shares - (50)
Shares to be issued - 190
Movement in revaluation reserve 3,812 1,984
-------- -------
Net addition to shareholders' funds 4,914 5,338
Opening shareholders' funds 11,433 6,095
-------- -------
Closing shareholders' funds 16,347 11,433
======== =======
10. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2003 2002
(unaudited) (audited)
#'000 #'000
Increase in cash in the year 223 820
New loan (net of repayments) (5,288) (1,172)
Amortisation of capitalised loan costs (83) (29)
-------- --------
Change in net debt from cash flows (5,148) (381)
Loans acquired with subsidiary (3,000) -
-------- --------
Movement in net debt in the year (8,148) (381)
Net debt brought forward (9,471) (9,090)
-------- --------
Net debt carried forward (17,619) (9,471)
======== ========
11. ANALYSIS OF NET DEBT
At Other At
1 March non-cash 28 February
2002 Cash flow Acquisitions changes 2003
(audited) (unaudited) (unaudited) (unaudited) (unaudited)
#'000 #'000 #'000 #'000 #'000
Cash in hand 1,234 223 - - 1,457
and at bank
Debt due (10,527) (5,468) (2,803) 94 (18,704)
after one
year
Debt due (178) 180 (197) (177) (372)
within one
year
--------- --------- -------- -------- ---------
Total debt (9,471) (5,065) (3,000) (83) (17,619)
========= ========= ======== ======== =========
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