RNS Number:3439M
Safeland PLC
16 June 2003
SAFELAND PLC
Preliminary Announcement
31 March 2003
CHAIRMAN'S STATEMENT
I am pleased to be able to write to shareholders with regard to the year ended
31 March 2003 as this has proved to be Safeland's second most successful year in
terms of trading profit, since its flotation in 1989.
Profit before taxation for the year is #3,522,000 (2002: #257,000), with a
resultant earnings per share of. 10.33p (2002: loss per share of 0.81p).
Particularly successful during the year has been our residential property joint
venture, which contributed just under #2.5 million (2002: #570,000) profit
before taxation. Notwithstanding the profits that have been achieved during the
year under review, I must continue to advise shareholders that market conditions
are still proving to be extremely difficult, particularly concerning the
identification of suitable trading stock. The situation remains similar to that
described in my previous two statements.
What is evident, however, is that this stock shortage is prevalent throughout
the marketplace and often means that properties are being sold profitably
shortly after they are acquired.
During the year under review, Safeland undertook 92 transactions compared with
79 in the previous year with an average lot size in excess of #530,000.
Turnover for the current year is #26,101,000 compared to #24,477,000 in the year
ended 31 March 2002. As a result of the profit that has been achieved in the
year, and the continuing policy of purchasing own shares, net asset value has
risen to 91p compared to 74p in March 2002, an increase of 23%.
The continuing purchase of own shares by the company for cancellation has proved
to be successful in two specific areas. Firstly, it has had a positive effect
on net asset value per share, and secondly despite the global stock market falls
that have been endured, Safeland has maintained its share price and stands at
46.5p today compared to 46.5p as at 31 March 2002 and 47p as at 31 March 2001.
This compares highly favourably with the FTSE Fledgling index, which stood at
1542.7 at 31 March 2003, 2042.0 as at 31 March 2002, and 2104.6 at 31 March
2001.
There is, therefore, sufficient evidence to suggest that purchasing own shares
is a policy that Safeland should be continuing, and accordingly, it has been
decided that once again the Board will not be declaring a dividend, but
preferring to utilise available funds both for its trading activities and the
opportunity to purchase shares as the Board feels appropriate.
During the year, we moved to our new head office in Finchley at a cost of just
over #1 million including refurbishment, having realised a substantial profit
against cost on our previous premises.
As part of our wider strategy of diversification and investment, on 27 March
2003, Safeland announced that it had entered into put and call options over a
25% per cent stake in an AIM-listed company called Tecc-IS plc. It has since
exercised its option.
As part of this wider strategy, our Italian self storage joint venture continues
to grow, with our centre in Rome open and operational and two others in Milan
due to open in the not too distant future.
Notwithstanding the market having stayed relatively stagnant for a couple of
years, Safeland has continued to exhibit its expertise in property trading and
is extremely well positioned as always to take advantage of any changes as and
when they occur.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 31 March 2003
Note 2003 2002
#'000 #'000
Unaudited Audited
TURNOVER
Group and share of joint venture 30,521 25,254
Less: share of joint venture (4,420) (777)
Group turnover 2 26,101 24,477
Cost of sales (22,650) (21,350)
GROSS PROFIT 3,451 3,127
Sales and distribution expenses (341) (301)
Administrative expenses (3,411) (2,531)
Other operating income 501 251
Group operating profit 200 546
Share of operating profit of joint ventures 3 2,564 570
TOTAL OPERATING PROFIT 2,764 1,116
Profit on disposal of fixed assets - 302 376
investment properties
Profit (loss) on disposal of investments 72 (98)
Profit on disposal of subsidiary and 6 550 490
associated undertakings
PROFIT ON ORDINARY ACTIVITIES BEFORE 3,688 1,884
INTEREST AND SIMILAR INCOME
Interest receivable and similar income 717 570
Amounts written off investments - (1,195)
Interest payable and similar charges (883) (1,002)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 3,522 257
Tax charge on profit on ordinary activities (1,106) (463)
PROFIT (LOSS) ON ORDINARY ACTIVITIES AFTER 2,416 (206)
TAXATION
Equity dividends paid and proposed 4 - (252)
RETAINED PROFIT (LOSS) FOR THE FINANCIAL YEAR 2,416 (458)
Basic and diluted earnings (loss) per share 5 10.33p (0.81)p
All results in both the current and the preceding financial year derive from
continuing operations.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Year ended 31 March 2003
2003 2002
#'000 #'000
Unaudited Audited
Profit (loss) for the financial year 2,416 (206)
Unrealised surplus on revaluation of investment 70 545
properties
Total recognised gains and losses for the year 2,486 339
NOTE OF HISTORICAL COST PROFITS AND LOSSES
2003 2002
#'000 #'000
Unaudited Audited
Profit on ordinary activities before taxation 3,522 257
Realisation of property revaluation gains of earlier 1,463 -
years
Historical cost profit on ordinary activities before 4,985 257
taxation
Historical cost profit (loss) retained for the year 3,879 (458)
after taxation and dividends
CONSOLIDATED BALANCE SHEET
31 March 2003
Note 2003 2002
#'000 #'000
Unaudited Audited
FIXED ASSETS
Tangible assets 4,993 2,103
Investment properties 2,808 5,008
Investment in joint venture
Share of gross assets 4,564 2,213
Share of gross liabilities (1,144) (1,295)
3,420 918
Investment in associated undertakings 12 1,000 -
Investments 4,281 4,732
16,502 12,761
CURRENT ASSETS
Stocks 5,965 9,375
Debtors:
Amounts falling due within one year 3,826 1,967
Amounts falling due after more than one - 4,185
year
Cash at bank and in hand 4,783 3,402
14,574 18,929
CREDITORS: amounts falling due (5,122) (3,576)
within one year
NET CURRENT ASSETS 9,452 15,353
TOTAL ASSETS LESS CURRENT LIABILITIES 25,954 28,114
CREDITORS: amounts falling due after more (6,905) (9,395)
than one year
19,049 18,719
CAPITAL AND RESERVES
Called up equity share capital 1,047 1,260
Share premium account 5,304 5,304
Capital redemption reserve 640 427
Investment property revaluation reserve 586 1,979
Profit and loss account 11,472 9,749
EQUITY SHAREHOLDERS' FUNDS 11 19,049 18,719
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 March 2003
Note 2003 2002
#'000 #'000
Unaudited Audited
Net cash inflow from operating activities 7 2,125 238
Returns on investment and servicing of finance 8 (111) (432)
Taxation (720) -
Capital expenditure and financial investment 8 826 (985)
Acquisitions and disposals 8 4,608 7,892
Equity dividends paid - (510)
Cash inflow before financing 6,728 6,203
Financing 8 (5,347) (8,895)
Increase (decrease) in cash 9 1,381 (2,692)
NOTES TO PRELIMINARY ANNOUNCEMENT
Year ended 31 March 2003
1. BASIS OF PREPARATION
The financial information set out in the announcement does not constitute the
company's statutory financial statements within the meaning of section 240 of
the Companies Act 1985, for the years ended 31 March 2003 or 31 March 2002.
The statutory financial statements for the year ended 31 March 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 company's Annual General Meeting. The
results for the year ended 31 March 2002 have been extracted from the full
accounts for that year which have been delivered to the Registrar of
Companies on which the auditors have given an unqualified report and which do
not contain a statement under sections 237(2) or (3) of the Companies Act
1985.
This announcement is prepared on the basis of the accounting policies as
stated in the previous year's financial statements.
This preliminary announcement was approved by the Board of directors on 16
June 2003.
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 sent to shareholders shortly.
2. SEGMENTAL INFORMATION
2003 2002
#'000 #'000
Unaudited Audited
Group turnover by origin and destination
Property trading and refurbishment 25,898 23,785
Investment properties 202 692
Self storage 1 -
26,101 24,477
Profit (loss) on ordinary activities before taxation
Property trading and refurbishment 3,169 871
Investment properties 488 581
Self storage (135) -
Amounts written off investments - (1,195)
3,522 257
Net assets
Property trading and refurbishment 13,835 12,470
Investment properties 2,818 4,861
Self storage 2,396 1,388
19,049 18,719
All turnover, results before taxation and net assets in the current and
preceding financial year are derived from activities carried out in the
United Kingdom, except for the self storage operation, which operates in
Italy, and the results and net assets of the Brackdale joint venture, which
operates in South Africa and contributed #13,000 (2002: #nil) to profit
before taxation in the year and #8,000 (2002: #nil) to net assets. The
Brackdale joint venture is reported within property trading and refurbishment.
3. SHARE OF OPERATING PROFIT OF JOINT VENTURES
Share of operating profit of joint ventures principally relates to our
residential property joint venture.
4. EQUITY DIVIDENDS PAID AND PROPOSED
2003 2002
#'000 #'000
Unaudited Audited
Interim equity dividend paid - #nil (2002: 1p per 5p - 252
ordinary share)
Final dividend proposed - #nil (2002: #nil) - -
- 252
5. EARNINGS (LOSS) PER SHARE
Basic and diluted earnings per share of 10.33p (2002: loss of 0.81p) are
based on the profit (loss) for the financial year of #2,416,000 (2002: loss
of #206,000) and on 23,393,843 ordinary shares (2002: 25,498,569 ordinary
shares) being the weighted average number of shares in issue throughout the
year.
2003 2002
Unaudited Audited
Basic and diluted
Net profit (loss) for the year (#) 2,416,000 (206,000)
Weighted average number of ordinary shares 23,393,843 25,498,569
outstanding
Earnings (loss) per share (p) 10.33p (0.81)p
The calculation of diluted earnings per share uses the same earnings figure
and weighted average number of shares as the basic calculation, as the
exercise value of all share options in issue is higher than the share price
at year end.
6. SALE OF SUBSIDIARY AND ASSOCIATED UNDERTAKINGS
Three wholly-owned subsidiaries of Safeland plc were disposed of during the
year: Olivegate Properties Limited, Woodrose Properties Limited and Dayblue
Limited. None of the subsidiary undertakings disposed of contributed any
operating results to the group in the year (2002: #nil). The profits
recognised on disposal were #300,000, #171,000 and #79,000 respectively. Cash
received in respect of these sales was #4,608,000.
7. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
2003 2002
#'000 #'000
Unaudited Audited
Operating profit 200 546
Depreciation 217 148
Profit on sale of fixed assets (13) (17)
Increase in stocks (648) (713)
Decrease (increase) in debtors 2,949 (299)
(Decrease) increase in creditors (580) 573
Net cash inflow from operating activities 2,125 238
8. ANALYSIS OF CASH FLOWS
2003 2002
#'000 #'000
Unaudited Audited
Returns on investment and servicing of finance
Interest received 558 427
Interest paid (810) (1,002)
Dividends received 141 143
(111) (432)
Capital expenditure and financial investment
Purchase of tangible fixed assets (2,540) (1,780)
Purchase of investment properties (1,091) (657)
Purchase of investments - (391)
Disposal of tangible fixed assets 439 286
Disposal of investment properties 3,495 1,507
Disposal of investments 523 50
826 (985)
Acquisitions and disposals
Net sale of investment in subsidiary and associate 4,608 7,892
Financing
Purchase of own shares (2,156) (259)
Loan repayments (4,691) (8,636)
New borrowings 1,500 -
(5,347) (8,895)
9. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2003 2002
#'000 #'000
Unaudited Audited
Increase (decrease) in cash in the year 1,381 (2,692)
Cash outflow from decrease in debt 3,191 8,636
Change in net debt resulting from cash flows 4,572 5,944
Net debt brought forward (6,356) (12,300)
Net debt carried forward (1,784) (6,356)
10. ANALYSIS OF NET DEBT
At Cash flows At
31 March 2002 #'000 31 March 2003
#'000 Unaudited #'000
Audited Unaudited
Cash at bank and in hand 3,402 1,381 4,783
3,402 1,381 4,783
Debt due within one year (363) (294) (657)
Debt due after one year (9,395) 3,485 (5,910)
(6,356) 4,572 (1,784)
11. RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
2003 2002
#'000 #'000
Unaudited Audited
Profit (loss) for the financial year 2,416 (206)
Dividends - (252)
2,416 (458)
Other recognised gains and losses 70 545
Repurchase of shares (2,156) (259)
Net increase (reduction) in equity shareholders' funds 330 (172)
Opening equity shareholders' funds 18,719 18,891
Closing equity shareholders' funds 19,049 18,719
12. POST BALANCE SHEET EVENTS
Acquisition of participating interest in Tecc-IS
On 27 March 2003, Safeland plc acquired an option to purchase 25% of the
share capital of Tecc-IS plc, an AIM-listed company. On 9 April 2003,
Safeland plc exercised the option and purchased 10,843,250 Tecc-IS shares for
#1 million, representing 25% of the ordinary share capital.
In line with FRS 9, the option to acquire the participating interest was
accounted for as a participating interest and on this basis, Tecc-IS has been
accounted for as an associate at the balance sheet date.
Repayment of Brackdale loan and subsequent guarantee
Subsequent to the balance sheet date, Brackdale has entered into a secured
loan from a Mauritian bank, Investec. Safeland plc has lodged the 8 million
Rand raised in the loan with Investec as security for the loan, which will be
released once the procedures for securing the loan against the property owned
by Brackdale have been completed.
END
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