RNS Number:4146K
Solitaire Group PLC
28 April 2003
28 April 2003
SOLITAIRE GROUP Plc
Solitaire is a leading national provider of property management services
PRELIMINARY RESULTS FOR THE YEAR
ENDED 31 DECEMBER 2002
"Excellent progress and growth for Solitaire"
Highlights
Change Year ended Year ended
Per Cent 31 Dec 2002 31 Dec 2001
Turnover +16.8 5,911,000 5,062,000
Profit before tax, amortisation, +9.3 1,805,000 1,651,000
exceptional costs & interest
Profit before tax +24.9 1,447,000 1,159,000
Earnings per share +22.7 21.6p 17.6p
Final dividend +8.1 7.3p 6.75p
Total dividend +8.4 10.3p 9.5p
* Solitaire properties under management increased by over 2,000 despite
removing some 900 unprofitable contracts.
* New instructions for property management continue at record levels and
the size of developments is increasing.
* Moss Kaye Pembertons continues trading in line with expectations.
* Successful new office in Leicester has already led to a number of new
management instructions in the Midlands. The Board is also considering the
opening of another branch office on or near the South Coast.
George Brutton, Chairman of Solitaire Group Plc, commented:
"The continuing growth in your company's core residential management business
confirms Solitaire's position as one of the UK 's market leaders in the sector.
"Whilst the current economic climate is uncertain for many companies, the
sustainable revenue stream from our property management business, taken together
with the number of contracts entered into for new development, gives us
confidence for the future. Trading in the current year has started well."
For further information:
Graham Shapiro, Joint Managing Director Tel: 020 8364 8497
Solitaire Group Plc
Tarquin Edwards / Simon Rothschild Tel: 020 7929 5599
Holborn
Chairman's statement
I am pleased to report that the number of residential developments under
management or where we hold contracts for future management continues to
increase and this growth bodes well for the future; we expect the benefit from
many of these future contracts to be felt in 2003. We have also seen a trend
towards the management of larger developments most of which are exclusively
residential, but some have a commercial element.
A number of new developments came under management later in the year than was
originally anticipated. This delay has had a marginal impact on our revenues
this year.
In response to the increased level of new business we established last year our
first branch office in Leicester to manage developments in the Midlands. This
move has already led to a number of new management instructions in that region.
As a consequence the board is considering the opening of another branch office
on or near the South Coast to manage the group's substantial estates in that
area.
Our expenses have increased following an exceptional and unprecedented market
wide increase in liability insurance rates as well as the one off set-up costs
of our office in Leicester.
The current economic climate is uncertain for many companies .The sustainable
revenue stream from our property management business taken together with the
number of contracts entered into for the management of new developments, gives
us confidence for the future.
Results
Turnover increased by 16.8 per cent to #5,911,000 (2001: #5,062,000) and
includes a full year from Moss Kaye Pembertons, against only seven months in
2001.
The operating profit for the year ended 31 December 2002, before writing off
exceptional costs, goodwill amortisation and interest, increased by 9.3 per cent
to #1,805,000 (2001: #1,651,000). The group incurred certain other costs
relating to the promotion of ultimately abortive property investment initiatives
in 2002 and a provision relating to the future exercise of share options
necessary under UITF 17. These have been included as exceptional costs.
Accordingly, after exceptional costs, interest and goodwill amortisation,
pre-tax profits were up by #288,000 or 24.9 per cent to #1,447,000 (2001:
#1,159,000) and earnings per share under FRS 14 were up by 22.7 per cent to
21.6p (2001: 17.6p). Adjusted earnings per share, before exceptional costs,
goodwill amortisation and interest were 26.2p (2001: 25.8p).
The board is recommending the payment of an increased final dividend of 7.3p
(2001: 6.75p) per share making a total for the year of 10.3p (2001: 9.5p), an
increase of 8.4 per cent over 2001. This will be paid on 24 June 2003 to
shareholders on the register on 9 May 2003.
Business development
Organic growth from our core business remains the board's prime aim. We continue
to examine the acquisition of companies that provide a strong fit with
Solitaire's underlying business but will only proceed if we feel that the
business is sufficiently robust and will provide enhanced shareholder value. We
are pleased with the positive response that our Leicester office has generated
and we will consider opening further regional offices in the future to better
serve our developer and residential clients.
People
After the year-end Tom Quinn retired as a non-executive director. Tom has been a
board member since the flotation in 1997 and the board will miss his assistance
and wise counsel. I am happy to welcome Chris Phillips as Tom's replacement as a
non-executive director, which was announced on 11th of February. Chris has a
strong background in residential property and will be providing valuable
experience and support to the board. He is a director of Colliers CRE
responsible for investment management and is the non-executive chairman of both
Marchpole Holdings Plc and Spring Grove Property Maintenance Plc.
We continue to strengthen our core property management team and are very pleased
with the way our staff have integrated the ever-increasing numbers of properties
under management into our portfolio. I would wish to record my sincere thanks to
all our staff for their hard work and commitment to maintaining our high
standards of client service.
The future
The continuing growth in your company's core residential management business
confirms Solitaire's position as one of the UK's market leaders in the sector.
The stability afforded by a forecasted low interest rate environment is welcomed
by the property sector generally and will substantially underpin our clients'
on-going development programmes. This in turn should have a positive impact on
the group's growth in the forthcoming years.
Trading in the current year has started well.
George Brutton FRICS
Chairman
28 April 2003
Consolidated profit and loss account
2002 2001
Notes #'000 #'000
________ _______
Turnover 5,911 5,062
________ _______
Operating expenses
External fees and commissions 276 245
Other administration expenses 3,830 3,166
________ _______
1,805 1,651
Amortisation of goodwill and development costs 115 140
Exceptional costs 2 95 233
________ _______
Operating profit 1,595 1,278
Net Interest paid (148) (119)
________ _______
Profit on ordinary activities before taxation 1,447 1,159
Taxation on ordinary activities 450 354
________ _______
Profit on ordinary activities after taxation 997 805
Dividends 4 475 433
________ _______
Retained profit for the year 522 372
________ _______
Basic and diluted earnings per share 5 21.6p 17.6p
Adjustment for amortisation 2.5p 3.1p
Adjustment for exceptional costs 2.1p 5.1p
________ _______
Adjusted earnings per share 5 26.2p 25.8p
________ _______
Consolidated balance sheet
Group Company
2002 2001 2002 2001
Notes #'000 #'000 #'000 #'000
________ ________ ________ _______
Fixed assets
Intangible assets 1,792 1,880 - -
Tangible assets
Office equipment 184 171 -
Freehold land and buildings 3 261 181 -
Freehold investment reversions 3 11,739 9,290 -
Investments - - 3,190 3,190
12,184 9,642 3,190 3,190
________ ________ ________ _______
13,976 11,522 3,190 3,190
________ ________ ________ _______
Current assets
Debtors 1,888 1,976 2,382 2,684
Cash and deposits 101 226 2 3
________ ________ ________ _______
1,989 2,202 2,384 2,687
Creditors: amounts falling due within one
year
Borrowings 790 1,035 754 813
Other liabilities 1,337 1,492 416 740
________ ________ ________ _______
Net current (liabilities) / assets (138) (325) 1,214 1,134
________ ________ ________ _______
Total assets less current liabilities 13,838 11,197 4,404 4,324
________ ________ ________ _______
Creditors: amounts falling due after more
than one year
Borrowings 1,779 1,659 434 350
________ ________ ________ _______
Net Assets 12,059 9,538 3,970 3,974
________ ________ ________ _______
Capital and reserves
Called-up share capital 462 462 462 462
Share premium account 2,647 2,647 2,647 2,647
Revaluation reserve 6,731 4,731 - -
Profit and loss account 2,219 1,698 861 865
________ ________ ________ _______
Equity shareholders' funds 12,059 9,538 3,970 3,974
________ ________ ________ _______
Consolidated cash flow statement
Restated
2002 2001
Notes #'000 #'000
________ _______
Cash flow from operating activities 1,752 1,283
Returns on investments and servicing of finance
Interest received 18 8
Interest paid (166) (127)
________ _______
Net cash outflow from returns on investment and servicing of finance (148) (119)
________ _______
UK corporation tax (511) (384)
________ _______
Capital expenditure and financial investment
Office equipment (92) (154)
Purchase of freehold reversions (584) (670)
Disposal of fixed assets 55 -
________ _______
Net cash outflow from capital expenditure and financial investment (621) (824)
________ _______
Acquisition of subsidiary (26) (1,015)
Equity dividends paid (446) (411)
________ _______
Cash outflow before use of liquid resources and financing 0 (1,470)
________ _______
Management of liquid resources and financing
Financing 153 786
________ _______
Increase/(decrease) in cash in the year 153 (684)
________ _______
2002 2001
Reconciliation of net cash flow to movement in net debt #'000 #'000
________ _______
Increase/(decrease) in cash in the year 153 (684)
Cash inflow from increased debt (153) (662)
________ _______
Movement in net debt 0 (1,346)
Opening net debt (2,468) (1,122)
________ _______
Closing net debt (2,468) (2,468)
________ _______
SOLITAIRE GROUP Plc
Notes
1. Basis of preparation
The results and balance sheet incorporate the audited results of Solitaire Group Plc and all its
subsidiaries made up to 31 December 2002 and have been prepared on a basis consistent with the
audited financial statements for the year ended 31 December 2001.
The comparative numbers in the cash flow for the reconciliation of net debt have been adjusted to
reflect a change in the method of displaying the funds arising from the issue of shares under the
groups share option scheme.
2. Exceptional costs
Certain costs resulting from abortive acquisitions and initiatives have been written off as
exceptional costs as has a provision relating to the future exercise of share options necessary
under UITF 17. Some of these costs are not an allowable expense in the calculation of the tax
charge for the year.
3. Revaluation
The directors obtained an external valuation of the freehold reversions and properties held by the
group at the year-end and have increased the value by #2,000,000.
4. Dividends
During the year the company paid an interim dividend of 3.00p (2001: 2.75p) per share. The company
has proposed a final dividend of 7.3p (2001: 6.75p) per share making a total of 10.3p (2001: 9.5p)
for the year.
5. Earnings per share
The calculation of earnings per share for the year ended 31 December 2002 is based on earnings of
#997,000 (2001: #805,000) and a weighted average number of shares in issue of 4,623,581 (2001:
4,575,873). There is no significant difference between basic and diluted earnings per share in
2002 and 2001. The adjusted earnings per share are based on the profits for the year after tax
adjusted for amortisation of goodwill and development costs and exceptional costs.
6. Results
The results for the year ended 31 December 2002 have been extracted from the audited financial
statements, which will shortly be sent to shareholders and filed with the Registrar of Companies.
The auditor's report on these accounts was unqualified.
This information is provided by RNS
The company news service from the London Stock Exchange
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