Safeland PLC
18 June 2007
SAFELAND PLC
PRELIMINARY RESULTS
Safeland plc, the property fund management and property trading group, announces
results for the year ended 31 March 2007.
Financial Highlights:
• Revenue of £18.27m (2006: £15.59m)
• Profits before tax of £3.69m (2006: £1.15m loss) - inc. £3.57m from Bizspace
disposal
• EPS of 15.18p (2006: 4.77p loss)
• NAV per share of 114p (2006: 111p)
• Gearing now stands at 117%
Operational Highlights:
• 51 transactions completed during the period (2006: 47) with an average lot
size of £358,000 (2006: £332,000)
• Formation of Safeland Property Unit Trust with Safeland as a UK property
manager
• £38m invested in multi-let properties to date
• Proposal to raise a further £50m of equity for the fund
Raymond Lipman, Chairman of Safeland plc, said:
'The board have decided to focus their future attention on the fund management
business which has started so successfully. It is this that allows me to look
forward to the future with confidence.'
Safeland plc Tel: 020 8815 1600
Larry Lipman, Managing Director
Paul Davis, Finance Director
www.safeland.co.uk
Parkgreen Communications Ltd Tel: 020 7479 7933
Paul McManus Mob: 07980 541 893
paul.mcmanus@parkgreenmedia.com
SAFELAND PLC
18 June 2007
Chairman's Statement
I am delighted to report a profit for the year to March 31 2007 of £3,691,000
compared to a loss for the previous year of £1,151,000. The resultant earnings
per share were 15.18p (2006: loss 4.77p).
In my last year's statement I advised shareholders of two post balance sheet
events being the group's disposal of its shareholding in both Bizspace Plc and
Serviced Office Group Plc. This financial year's accounts includes a profit of
£3,572,000 in respect thereof.
Espazio, the company's Italian self storage business, saw its trading losses
continue to fall from £472,000 12 months ago to £404,000. During the year
Espazio sold a freehold property in Milan for a profit of £910,000 and now only
operates from two centres, one in Rome and one in Milan.
As is demonstrated from the figures property trading has once again proved
difficult and has resulted in an operating loss for the year of £58,000 despite
a relatively good first six months.
During the year under review the group undertook 51 transactions compared to 47
in the previous year with an average lot size of £358,000 (2006: £332,000).
Revenue for the current period was £18,266,000 compared to £15,588,000 in the
year ended March 31 2006. Gearing at the year end was 117% (2006: 69%). Net
assets per share at the year end were 114p as against 111p at the start of the
year.
The major event to take place during this financial year was the announcement
that was made on October 20 2006 of the formation of a Property Fund with
Electra Partners Europe Limited in which Safeland has invested £1m and Electra
£15m and which with bank funding will enable purchases of up to £50m to be made.
I am pleased to advise shareholders that to date £38m has been invested
primarily in multi-let properties throughout the UK and I am also delighted that
we have been able to assemble the same team that were primarily responsible for
the success of Bizspace and in particular Neil Corderey who will be responsible
for the day to day running of the management vehicle.
At the beginning of the year it was recognised that it would not take too long
for the initial fund to be fully invested, and, therefore, CBRE were instructed
in January 2007 to raise a further £50m of equity which will enable further
purchases of c £150m to be made. Over the past few months presentations have
been made to potential investors and I hope to be able to make an announcement
as to the outcome of this in the next few weeks.
With there being no sign on the horizon that conditions for property trading are
likely to improve the board have decided to focus their future attention on the
fund management business which has started so successfully. It is this that
allows me to look forward to the future with confidence.
Raymond Lipman
Chairman
18 June 2007
CONSOLIDATED INCOME STATEMENT
Year ended 31 March 2007
Note 2007 2006
£'000 £'000
Unaudited Audited
Revenue 18,266 15,588
Cost of sales (14,394) (13,526)
Gross profit 3,872 2,062
Sales and distribution costs (370) (394)
Administrative expenses (4,786) (3,770)
Other operating income 445 125
Profit on disposal of property, plant and equipment 939 7
Gains on revaluation of investment properties - 391
Profit on disposal of investment properties 156 103
Profit on disposal of subsidiaries 4 192 852
Operating profit / (loss) 448 (624)
Share of results of associates - post tax (4) (17)
Profit on disposal of available-for-sale investments 3 3,572 -
Profit / (loss) before interest 4,016 (641)
Finance income 140 285
Finance costs (465) (795)
Profit / (loss) before tax 3,691 (1,151)
Tax (882) 269
Profit / (loss) for the financial year 2,809 (882)
Basic and diluted earnings / (loss) per share 5 15.18p (4.77p)
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Year ended 31 March 2007
Note 2007 2006
£'000 £'000
Unaudited Audited
Fair value gains on available-for-sale 18 2,370
investments
Exchange differences on translation of foreign 43 (23)
operations
Tax on items taken directly to equity (5) (706)
Net income recognised directly in equity 56 1,641
Transfer to profit on sale of available-for-sale (3,053) -
investments
Tax on items transferred from equity 751 -
Profit / (loss) for the year 2,809 (882)
Total recognised income and expense for the year 8 563 759
available to equity shareholders
CONSOLIDATED BALANCE SHEET
31 March 2007
Note 2007 2006
£'000 £'000
Unaudited Audited
Non-current assets
Property, plant and equipment 4,263 6,095
Investment properties 1,868 4,632
Interests in associates 10 14
Available-for-sale investments 1,191 6,544
Deferred tax assets 46 290
Total non-current assets 7,378 17,575
Current assets
Trading properties 38,753 16,387
Trade and other receivables 2,363 1,408
Cash and cash equivalents 7 1,448 1,903
Total current assets 42,564 19,698
Total assets 49,942 37,273
Current liabilities
Bank loans and overdrafts 8,089 11,932
Trade and other payables 2,051 1,043
Current tax liabilities 541 226
Total current liabilities 10,681 13,201
Non-current liabilities
Bank loans 18,040 2,247
Deferred tax liabilities 103 1,254
Derivative financial instruments - 16
Total non-current liabilities 18,143 3,517
Total liabilities 28,824 16,718
Net assets 21,118 20,555
Equity
Share capital 925 925
Share premium account 5,351 5,351
Capital redemption reserve 765 765
Translation reserve (7) (50)
Revaluation reserve 85 2,374
Retained earnings 13,999 11,190
Total equity 8 21,118 20,555
CONSOLIDATED CASH FLOW STATEMENT
Year Ended 31 March 2007
Note 2007 2006
£'000 £'000
Unaudited Audited
Operating activities
Net cash outflow from operations 6 (26,100) (10,187)
Interest paid (481) (830)
Tax paid (728) (205)
Net cash outflow from operating activities (27,309) (11,222)
Investing activities
Interest received 140 249
Purchase of investment properties (776) (412)
Purchase of property, plant and equipment (518) (675)
Purchase of available-for-sale investments (1,000) (65)
Proceeds from sale of property, plant and equipment 2,947 184
Proceeds from sale of investment properties 3,696 349
Proceeds from sale of available for sale investments 6,890 -
Dividends received from available-for-sale investments - 36
Disposal of subsidiaries 3,525 7,415
Net cash inflow from investing activities 14,904 7,081
Financing activities
New loans 21,513 21,251
Loan repayments (9,306) (17,993)
Net cash inflow from financing activities 12,207 3,258
Net decrease in cash and cash equivalents in the year
(198) (883)
Cash and cash equivalents at beginning of year 1,547 2,430
Cash and cash equivalents at end of year 7 1,349 1,547
NOTES TO THE PRELIMINARY ANNOUNCEMENT
Year ended 31 March 2007
1. BASIS OF PREPARATION
The financial information set out in the announcement does not constitute the
group's statutory financial statements within the meaning of section 240 of the
Companies Act 1985, for the years ended 31 March 2007 or 2006. The statutory
financial statements for the year ended 31 March 2007 will be finalised and
signed 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 financial information for the year ended 31 March 2006 is derived from the
statutory accounts for that year. The auditors reported on those statutory
accounts which have been delivered to the Registrar of Companies; their report
was unqualified and did not contain a statement under s237(2) or (3) of the
Companies Act 1985.
This announcement is prepared applying International Financial Reporting
Standards as adopted by the European Union and using accounting policies that
are consistent with those as stated in the previous year's financial statements.
This preliminary announcement was approved by the Board of directors on 15 June
2007.
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. BUSINESS AND GEOGRAPHICAL SEGMENTS
Business segments
For management purposes, the group is currently organised into two operating
divisions as detailed below:
• property trading, property refurbishment and property investment; and
• self-storage
These divisions are the basis on which the group reports its primary segmental
information.
Geographical segments
The group's operations are wholly based in the United Kingdom except the
self-storage operation which operates in Italy.
No additional segmental disclosure is provided in respect of geographical
segments as they are identical to the business segments detailed above.
Property trading,
refurbishment and Self-storage Total
investment
2007 2006 2007 2006 2007 2006
£'000 £'000 £'000 £'000 £'000 £'000
Unaudited Audited Unaudited Audited Unaudited Audited
Revenue 17,828 15,255 438 333 18,266 15,588
Segment result (58) (152) 506 (472) 448 (624)
Share of result of associates - post tax (4) (17)
Profit on disposal of available-for-sale
investments 3,572 -
Finance income 140 285
Finance costs (465) (795)
Profit / (loss) before tax 3,691 (1,151)
Tax (882) 269
Profit / (loss) for the financial year 2,809 (882)
Balance sheet
Segment assets 46,334 26,288 2,361 4,137 48,695 30,425
Interests in associates 10 14
Available-for-sale investments 1,191 6,544
Deferred tax asset 46 290
Total assets 49,942 37,273
Segment liabilities 27,084 13,736 1,096 1,502 28,180 15,238
Current tax liabilities 541 226
Deferred tax liabilities 103 1,254
Total liabilities 28,824 16,718
3. PROFIT ON DISPOSAL OF AVAILABLE-FOR-SALE INVESTMENTS
During the year, the group sold its entire shareholdings in Bizspace plc and
Serviced Office Group plc for cash consideration totalling £6,890,000, which
realised a profit on disposal in the income statement of £3,572,000.
4. PROFIT ON DISPOSAL OF SUBSIDIARIES
One wholly-owned subsidiary of Safeland plc was sold during the year, CFC 24
Limited. The undertaking sold did not contribute any pre-tax results to the
group in the year (2006: £nil).
The following table sets out the book value of assets and liabilities disposed.
CFC 24 Ltd
£'000
Investment properties -
Trading properties 3,333
Net assets 3,333
Profit on disposal 192
Total Consideration 3,525
Satisfied by
Cash 3,525
5. EARNINGS / (LOSS) PER SHARE
Basic and diluted earnings of 15.18p (2006: loss per share 4.77p) are based on
the profit for the financial year of £2,809,000 (2006: loss of £882,000) and on
18,500,530 ordinary shares (2006: 18,500,530 ordinary shares) being the weighted
average number of shares in issue throughout the year.
The calculation of diluted earnings / (loss) per share uses the same earnings
figure and weighted average number of shares as the basic calculation, as there
are no dilutive options or instruments.
6. NOTES TO THE CASH FLOW STATEMENT
2007 2006
£'000 £'000
Unaudited Audited
Operating profit / (loss) 448 (624)
Adjustments for:
Depreciation of property, plant and equipment 342 343
Profit on sale of property, plant and equipment (939) (7)
Profit on sale of investment properties (156) (103)
Gains on revaluation of investment properties - (391)
Profit on sale of subsidiaries (192) (852)
Operating cash flow before movements in working capital (497) (1,634)
Increase in trading properties (25,699) (11,177)
(Increase) / decrease in trade and other receivables (955) 3,890
Increase / (decrease) in trade and other payables 1,051 (1,266)
Net cash outflow from operations (26,100) (10,187)
7. CASH AND CASH EQUIVALENTS
2007 2006
£'000 £'000
Unaudited Audited
Cash and cash equivalents per balance sheet 1,448 1,903
Bank overdrafts (99) (356)
Cash and cash equivalents per cash flow statement 1,349 1,547
8. RECONCILIATION OF CHANGES IN EQUITY
2007 2006
£'000 £'000
Unaudited Audited
1 April 2006 20,555 19,796
Total recognised income and expense for the year 563 759
31 March 2007 21,118 20,555
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