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Sutton Harbour Holdings PLC   -  SUH   

Half-year Report and Open Offer

Released 07:00 22-Nov-2018

RNS Number : 1426I
Sutton Harbour Holdings PLC
22 November 2018
 

22 November 2018

 

SUTTON HARBOUR HOLDINGS PLC

("Sutton Harbour" or "the Company")

Interim results for the six-month period to 30 September 2018

Sutton Harbour Holdings plc, the AIM-listed marine and waterfront regeneration specialist, announces its interim results for the six-month period to 30 September 2018.

 

Highlights:

 

·      Unanimous planning approval for the Sugar Quay scheme

·      Planning consent secured for Harbour Arch Quay Scheme and Harbour Car Park extension

·      Open Offer to raise up to £3million (gross) to fund post planning pre-construction phase project costs, capital maintenance project costs and to provide cash headroom

 

Financial Highlights

 

·      Adjusted* profit before tax £0.110m (H12017: £0.136m);

·      Profit before tax of £0.110m (H12017: loss of £0.702m);

·      Net assets of £39.445m (31 March 2018: £39.328m);

·      Net debt £23.459m (31 March 2018: £22.956m).

 

*Excluding fair value adjustments

 

Enquiries

Sutton Harbour Holdings plc

+44 (0) 1752 204186

Philip Beinhaker, Executive Chairman

Natasha Gadsdon, Finance Director

Arden Partners (NOMAD and Broker)

+44 (0)20 7614 5917

Paul Shackleton, Ben Cryer, Maria Gomez de Olea

 

 

Notes to Editors

Sutton Harbour Holdings plc (SUH) is an AIM listed company specialising in marine operations, waterfront regeneration and destination creation in Plymouth and South West England.

 The Company operates Sutton Harbour Marina, King Point Marina and Plymouth Fisheries. Operational activities include mixed-use lettings, car parking and support services to harbour users, property management and regeneration and asset enhancement.

Sutton Harbour Holdings plc is committed to being the leading marine and waterfront regeneration specialist in Southern England, and to positioning Sutton Harbour in Plymouth as a destination of national interest.

 

Executive Chairman's Statement

For the six-month period to 30 September 2018

 

Results and Financial Position

 

Excluding fair value adjustments, the adjusted profit before taxation for the six month period ending 30 September 2018 was £0.110m (30 September 2017: £0.136m).

 

As at 30 September 2018, net assets were £39.445m compared to £39.328m, as last reported as at 31 March 2018. No revaluation of assets has been undertaken as at 30 September 2018 following the approved resolution to instruct an independent external valuation once a year.

 

Net debt has increased to £23.459m, up by £1.631m, from £21.858m as at 31 March 2018. This was fully expected as the Company has invested £0.960m during the period into planning and professional fees in connection with the accelerated programme to implement a new phase of regeneration around Sutton Harbour which has resulted in the newly granted planning consents for Sugar Quay, Harbour Arch Quay and the extension of Harbour Car Park. (see Regeneration Report below). The increase in net debt is amplified by the annual cash cycle whereby annual marina fees and other rents are payable before the start of the financial year. Overall, this has resulted in an increase in gearing from 55.6% (31 March 2018) to 59.2% as at 30 September 2018.

 

To continue to progress the pre-construction project costs and to fund essential infrastructure updating projects, the Company is notifying shareholders today of an Open Offer to existing shareholders to subscribe for £3 million new share capital (10,344,951, shares priced at 29p) on a 77 for 786 shares basis. Net proceeds of the Open Offer will be utilised in the ongoing development of Company including pre-construction costs in respect of both Harbour Arch Quay and Sugar Quay, capital maintenance across the Company's assets, and to meet the Company's general funding requirements arising from its ordinary and development activities.

 

Board Composition Update

 

Philip Beinhaker was appointed Executive Chairman early in the financial year and continues in this role. Jason Schofield, who had been the Chief Executive since 2011, left the Company in July 2018 and the board has continued its search for a new Executive Director and expects to be able to make an announcement about the appointment in the near future.

 

Trading Report

 

Trading by the marine and car parking activity segments over the first half year have been consistent with the same period last year. Income from the real estate segment is slightly below that of the comparable period as a result of temporary voids. The outlook is improving for the second half year with interest in commercial property increased in recent months. Three new lettings recently completed and a further two are due to complete shortly.

 

Regeneration

 

Led by Philip Beinhaker, the Company resubmitted its redesigned proposals for a mixed-use scheme to regenerate the long vacant site at Sugar Quay, Sutton Harbour. The scheme which gained unanimous approval from the committee of the Local Planning Authority earlier this month, comprises 170 apartments, 32,000 sq ft of commercial/retail space and basement parking for 106 cars with an additional 114 spaces being built at Harbour Car Park. Upon delivery, the development will be a landmark development in the Sutton Harbour area with its future occupiers contributing to the sustainability of the area as a place to visit, live and work in.

 

The Company also has consent to move forward with the smaller residential scheme at Harbour Arch Quay, Sutton Harbour. The scheme will provide 14 high quality apartments on the North East side of Sutton Harbour. The Company intends to start construction during the second calendar quarter of 2019 with completion due during the second calendar quarter of 2020.

 

Summary

 

The Company's key focus in the first half year has resulted in the successful achievements of planning consents for a new phase of regeneration around Sutton Harbour. The collaborative approach with the Local Authority, stakeholders and the development team has enabled the formulation of a high profile scheme which will contribute to housing delivery targets as well as stimulate the social and economic vibrancy of the area. The Company is now actively progressing the funding strategy to bring the schemes to construction.

 

Philip Beinhaker

 

EXECUTIVE CHAIRMAN


Consolidated Statement of Comprehensive Income

 


 

 

 

 

Note

6 months to

30 September

2018

(unaudited)

£000

6 months to

30 September

2017

(unaudited)

£000

Year Ended

31 March

2018

(audited)

£000



Revenue

3

3,717

3,473

6,503






Cost of Sales


(2,390)

(2,155)

(4,367)






Gross Profit


1,327

1,318

2,236











Fair value adjustment on fixed assets and investment property


(8)

(838)

(626)

Administrative expenses


(711)

(720)

(1,374)

Exceptional costs of change in ownership



-

(1,741)

 

Operating profit/loss from continuing operations

 

3

 

608

 

(240)

 

(1,605)






Financial income


-

-

-

Financial expense


(498)

(462)

(897)






Net financing costs


(498)

(462)

(897)











Profit/(loss) before tax from continuing operations

3

110

(702)

(2,502)

Taxation (charge)/credit on profit from continuing operations

4

-

(27)

304






Profit/(loss) from continuing operations


110

(729)

(2,198)









Basic profit/(loss)/earnings per share

6

0.01p

(0.76)p

(2.24p)






Diluted profit/(loss)/earnings per share

6

0.01p

(0.76)p

(2.24p)

 

                        



6 months to

30 September

2018

(unaudited)

£000

6 months to

30 September

2017

(unaudited)

£000

Year Ended

31 March

2018

(audited)

£000




Profit/(loss) from continuing operations


110

(729)

(2,198)





Other comprehensive (expense)/income


Continuing operations:



   Revaluation of property, plant and equipment


-

(374)

(1,624)

   Deferred taxation on income and expenses recognised directly in the       consolidated statement of comprehensive income



 

 


   Effective portion of changes in fair value of cash flow hedges


-

46

70






Total other comprehensive expense


-

(328)

(1,554)

Total comprehensive expense for the period attributable to equity shareholders


 

110

 

(1,057)

 

(3,752)


Consolidated Balance Sheet

 


 

 

 

 

Note

As at

30 September

2018

(unaudited)

£000

As at

30 September

2017

(unaudited)

£000

As at

31 March

2018

(audited)

£000




Non-current assets





Property, plant and equipment

7

23,899

24,966

23,973

Investment property

7

19,055

19,485

19,055



42,954

44,451

43,028




Current assets





Inventories


22,250

20,759

21,276

Trade and other receivables


2,122

2,030

2,170

Cash and cash equivalents

8

1,859

281

2,767

Tax recoverable


-

14

8



26,231

23,084

26,221




Total assets

3

69,185

67,535

69,249






Current liabilities





Other interest-bearing loans and borrowings


-

-

-

Trade and other payables


1,308

1,038

1,633

Finance lease liabilities


96

111

117

Deferred income


883

1,083

1,434

Provisions

9

69

70

70

Derivative financial instruments


-

-

6



2,356

2,302

3,260




Non-current liabilities





Other interest-bearing loans and borrowings


25,000

22,950

24,350

Finance lease liabilities


232

185

158

Deferred government grants


646

1,146

646

Deferred tax liabilities


1,338

1,670

1,338

Provisions

9

168

168

169

Derivative financial instruments


-

30

-



27,384

26,149

26,661






Total liabilities

3

29,740

28,451

29,921




Net assets


39,445

39,084

39,328




Issued capital and reserves attributable to owners of the parent





Share capital                           


16,162

16,069

16,162

Share premium


7,872

5,368

7,872

Other reserves


10,056

12,355

10,050

Retained earnings


5,355

5,292

5,244

Total equity


39,445

39,084

39,328


Consolidated Statement of Changes in Equity

 


Share capital

Share premium

Revaluation reserve

Merger reserve

Hedging reserve

Retained earnings

TOTAL

 




       ----------Other Reserves----------






£000

£000

£000

£000

£000

£000

£000

 









 

Balance at 1 April 2018

16,162

7,872

6,183

3,871

(6)

5,246

39,328

 

Comprehensive income/(expense)








 

Profit for the period

-

-

-

-

-

110

110

 

Other comprehensive income/(expense)








 

Revaluation of property, plant and equipment

-

-

-

-

-

-

-

 

Effective portion of changes in fair value of cash flow hedges

 

-

 

-

 

-

 

-

 

7

 

-

 

7

 

Total other comprehensive income/(expense)  - period ended 30 September 2018

 

-

 

-

 

-

 

-

 

7

 

-

 

117

 

Total comprehensive income/(expense) - period ended 30 September 2018

 

-

 

-

 

-

 

-

 

7

 

-

 

117

 

Balance at 30 September 2018

16,162

7,872

6,183

3,871

1

5,2

39,445

 

Balance at 1 October 2017

16,069

5,368

8,514

3,871

(30)

5,292

39,084

 

Adjustment to opening balances

-

-

(1,079)

-

-

1,421

342

 

Comprehensive income/(expense)








 

Profit for the period

-

-

-

-

-

(1,469)

(1,469)

 

Other comprehensive income/(expense)








 

Revaluation of property, plant and equipment

-

-

(1,250)

-

-

-

(1,250)

 

Effective portion of changes in fair value of cash flow hedges

 

-

 

-

 

-

 

-

 

24

 

-

 

24

 

Total other comprehensive income/(expense)  - period ended 31 March 2018

 

-

 

-

 

(1,250)

 

-

 

24

 

(1,469)

 

(2,695)

 

Total comprehensive income/(expense) - period ended 31 March 2018

 

-

 

-

 

(1,250)

 

-

 

24

 

(1,469)

 

(2,695)

 

Transactions with owners of the parent








 

Purchase of shares

93

2,504

-

-

-

-

2,597

 

Balance at 31 March 2018

16,162

7,872

6,185

3,871

(6)

5,244

39,328

 

Balance at 1 April 2018

16,162

7,872

6,185

3,871

(6)

5,244

39,328

 

Comprehensive income/(expense)








 

Loss for the period








 

Other comprehensive income/(expense)







 

 

 

Revaluation of property, plant and equipment








 

Effective portion of changes in fair value of cash flow hedges








 

Total other comprehensive income/(expense)  - period ended 30 September 2017








 

Total comprehensive income/(expense) - period ended 30 September 2017








 

As at 30 September 2017








 

 


 


Note

6 months to

30 September

2018

(unaudited)

£000

6 months to

30 September

2017

(unaudited)

£000

Year Ended

31 March

2018

(audited)

£000

 

Cash generated from total operating activities

 

10

 

(916)

 

95

 

(886)






Cash flows from investing activities





Net expenditure on investment property


-

(2)

-

Expenditure on property, plant and equipment


(100)

(138)

(227)

Proceeds from sale of plant and equipment


-

-

12

Net cash used in investing activities


 

(100)

 

(140)

 

(215)






Cash flows from financing activities





Proceeds from sale of shares


-

-

2,750

Expenses of share issuance


-

-

(152)

Interest paid


(498)

(462)

(897)

Loan drawdowns/(repayment of borrowings)


650

150

1,550

Net finance lease (payments)/receipts


(43)

(65)

(86)

Net cash generated from financing activities


 

109

 

(377)

 

3,165

`

Net increase/(decrease) in cash and cash equivalents


 

(907)

 

(422)

 

2,064

 

Cash and cash equivalents at beginning of period


 

2,766

 

703

 

703

 

Cash and cash equivalents at end of period

 

8

 

1,859

 

281

 

2,767

 

Notes to Interim Report

 

1.      General information

 

This consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006.  Statutory accounts for the year ended 31 March 2018 were approved by the Board of Directors on 29 June 2018 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain any statement under section 498 of the Companies Act 2006.

 

Copies of the Group's financial statements are available from the Company's registered office, Tin Quay House, Sutton Harbour, Plymouth, PL4 0RA and on the Company's website www.sutton-harbour.co.uk.

 

This consolidated interim financial information has not been audited.

 

 

2.      Basis of preparation

 

The consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2018, which have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretation Committee (IFRIC) interpretations as endorsed by the European Union, and those parts of the Companies Acts 2006 as applicable to companies reporting under IFRS.

 

Accounting policies

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2018, as described in those annual financial statements.

Adoption of new International Financial Reporting Standards

The following new standards, amendments to standards or interpretations have been issued, but are not effective for the financial year beginning 1 April 2017 and have not been adopted early:

 

IFRS 15 Revenue from Contracts with Customers: *1 January 2018

IFRS 9 Financial Instruments: * 1 January 2018

 

* mandatory effective date is periods commencing on or after

 

Accounting estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions.

 

The Board of Directors considers the business from an operational perspective as having only one geographical segment, with all operations being carried out in the United Kingdom.

 

The Board of Directors considers the performance of the operating segments using operating profit. The segment information provided to the Board of Directors for the reportable segments for the period ended 30 September 2016 is as follows:

 

 

6 months to 30 September 2018

Marine

Real Estate

Car Parking

Regeneration

Total


£000

£000

£000

£000

£000

Revenue

2,665

747

305

-

3,717







Gross profit prior to non-recurring items

629

486

213

(57)

1,271

Segmental Operating Profit before Fair value adjustment and unallocated expenses

629

486

213

(57)

1,271

Fair value adjustment on fixed assets and investment property assets

-

-

-

-

-













Unallocated:






Administrative expenses





(662)

Operating profit from continuing operations





609













Financial income






Financial expense





(499)

Profit before tax from continuing operations





110

Taxation





-

Profit for the year from continuing operations





110







Depreciation charge






Marine





152

Car Parking





16

Administration





7






175

 

 

 

6 months to 30 September 2017

Marine

Real Estate

Car Parking

Regeneration

Total


£000

£000

£000

£000

£000

Revenue

2,399

765

309

-

3,473







Gross profit prior to non-recurring items

602

573

197

(54)

1,318

Segmental Operating Profit before Fair value adjustment and unallocated expenses

602

573

197

(54)

1,318

Fair value adjustment on fixed assets and investment property assets

(861)

23

-


(838)


(259)

596

197

(54)

480







Unallocated:






Administrative expenses





(720)

Operating profit from continuing operations





(240)













Financial income





-

Financial expense





(462)

Loss before tax from continuing operations





(702)

Taxation





(27)

Loss for the year from continuing operations





(729)







Depreciation charge






Marine





148

Car Parking





8

Administration





28






184

 

 

 

Year ended 31 March 2018

Marine

Real Estate

Car Parking

Regeneration

Total


£000

£000

£000

£000

£000

Revenue

4,578

1,414

511

-

6'503







Gross profit prior to non-recurring items

971

946

318

(99)

2,136

Segmental Operating Profit before Fair value adjustment and unallocated expenses

 

 

 

971

 

 

 

946

 

 

 

318

 

 

 

(99)

 

 

 

2,136

Fair value adjustment on fixed assets and investment property assets

(221)

(405)

-

-

(626)






1,510







Unallocated:






Administrative expenses





(1,374)

Exceptional costs of change in ownership





(1,741)

Operating profit from continuing operations





(1,605)













Financial income





-

Financial expense





(897)

Profit before tax from continuing operations





(2,502)

Taxation





304

Profit for the year from continuing operations





(2,198)







Depreciation charge






Marine





297

Car Parking





12

Administration





16






325

 

 


30 September 2018

30 September 2017

31 March 2018


£000

£000

£000

Segment assets:




Marine

20,580

21,463

20,882

Real estate

19,704

20,259

19,460

Car Parking

4,196

4,182

4,233

Regeneration

22,335

20,802

21,414

Total segment assets

66,815

66,706

65,989

Unallocated assets:




Property, plant and equipment

72

94

78

Trade & other receivables

439

454

415

Cash & cash equivalents

1,859

281

2,767

Total assets

69,185

67,535

69,249

 


30 September 2018

30 September 2017

31 March 2018


£000

£000

£000

Segment liabilities:




Marine

1,134

2,059

1,858

Real estate

607

449

705

Car Parking

79

75

131

Regeneration

996

830

938

Total segment liabilities

2,816

3,413

3,632

Unallocated liabilities:




Bank overdraft & borrowings

25,232

23,246

24,625

Trade & other payables

354

92

320

Financial Derivatives

(2)

30

6

Tax payable

-

-

-

Deferred tax liabilities

1,340

1,670

1,338

Total liabilities

29,740

28,451

29,921

 

 

Unallocated assets included in total assets and unallocated liabilities included in total liabilities are not split between segments as these items are centrally managed.

 

4. Taxation

 

The Company has applied an effective tax rate of 19% (2017: 20%) based on management's best estimate of the tax rate expected for the full financial year and is reflected in a movement in deferred tax.

 

5. Dividends

 

The Board of Directors do not propose an interim dividend (2017: nil).

 

 

6. Earnings per share

 


6 months to

30 September

2018

(unaudited)

pence

6 months to

30 September

2017

(unaudited)

pence

Year Ended

31 March

2018

(audited)

pence

Continuing operations




Basic earnings per share

0.01p

(0.76)

(2.24)

Diluted earnings per share*

0.01p

(0.76)

(2.24)





 

Basic Earnings per Share:

Basic earnings per share have been calculated using the profit for the period of £110,000 (2017: loss £729,000, year ended 31 March 2018 loss £2,198,000). The average number of ordinary shares in issue, excluding those options granted under the SAYE scheme, of 105,599,120 (2017: 96,277,086; year ended 31 March 2018: 98,320,272) has been used in our calculation.

 

Diluted Earnings per Share:

Diluted earnings per share uses an average number of 105,599,120 (2017: 96,277,086; year ended 31 March 2018 98,320,272) ordinary shares in issue and takes account of the outstanding options under the SAYE scheme in accordance with IAS 33 'Earnings per share'.  There are no outstanding options under expire SAYE schemes.

 

7. Property valuation

Freehold land and buildings and investment property have been independently valued by Jones Lang LaSalle as at 31 March 2018, in accordance with the Practice Statements in the Valuations Standards (The Red Book) published by the Royal Institution of Chartered Surveyors. 

 

A further valuation will be commissioned for the year ending 31 March 2019, as in previous years.

8. Cash and cash equivalents


As at

30 September 2018

(unaudited)

£000

As at

30 September 2017

(unaudited)

£000

As at

31 March 2018

(audited)

£000





Cash and cash equivalents per balance sheet and cash flow statement

1,859

281

2,767

 

9. Provisions

 

 


Onerous leases

Total


£000

£000




Balance at 1 April 2017

253

253

Provisions made

-

-

Provisions utilised

(15)

(15)

Balance at 30 September 2017

238

238




Provisions made

-

-

Provisions utilised

1

1

Balance at 31 March 2018

239

239




Provisions made



Provisions utilised

71

71

Balance at 30 September 2018

168

168




Current

168

168

Non-current

-

-


168

168

 

 

 

10. Cash flow statements

 


6 months to

30 September 2018

(unaudited)

£000

6 months to

30 September 2017

(unaudited)

£000

Year Ended

31 March 2018

(audited)

£000

Cash flows from operating activities



 

Profit/(loss) for the period

110

(729)

(2,198)

Adjustments for:




Taxation

-

27

(304)

Financial income

-

-

-

Financial expense

498

462

897

Fair value adjustment on fixed assets and investment property

-

838

626

Depreciation

175

184

325

Amortisation of grants

-

(23)

-

Loss on sale of property, plant and equipment

(16)

4

(10)

Cash generated from operations before changes in working capital and provisions

 

767

 

763

 

(664)

Increase in inventories

(959)

(151)

(707)

Decrease/(increase) in trade and other receivables

57

29

82

(Decrease)/increase in trade and other payables

(229)

(135)

462

Decrease in deferred income

(551)

(396)

(45)

(Decrease)/increase in provisions

(1)

(15)

(14)





Cash generated from operations

(916)

95

(886)

 

 

11.  Capital Commitments

 

At 30 September 2018 the Group has engaged contractors to perform £0.2m of work in the Fisheries complex.  Some of this cost will be set off by grant contribution. 

 


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