Embargoed for release at 7.00 a.m. on 9 September 2009
PROPERTY RECYCLING GROUP PLC
INTERIM RESULTS
Property Recycling Group plc (the "Company") (AIM: PROP), which
acquires and prepares brownfield sites for development, announces
interim results for the six months ended 30 June 2009.
� Loss before tax of £33,745 (2008: profit £4,278) on a turnover
of £436,611 (2008: £433,960).
� The Group currently owns eight freehold sites totalling 346
hectares, all of which have planning approval for either industrial,
commercial, residential or leisure use.
For further information please contact:
Paul Rackham, Chairman
Property Recycling Group plc
01953 717176 www.propertyrecycling.co.uk
Geoff Nash / Leslie Kent
FinnCap (Nominated adviser and joint broker)
020 7600 1658
Robert Luetchford/John Webb
Marshall Securities Limited (Joint broker)
020 7490 3788
PROPERTY RECYCLING GROUP PLC
EXECUTIVE CHAIRMAN'S REPORT
Introduction
The economic environment which I described in the annual report
published at the end of April 2009 remains poor. Whilst prices on
stock markets have improved this has been characterized by low
trading volumes. In the real economy there is still little evidence
of the low interest environment described by the government feeding
through to businesses in general and property companies in
particular. In fact many businesses are seeing banking costs
increasing and a squeeze on lending.
Property portfolio
There have been no acquisitions or disposals of properties in the
period. The Group currently owns eight freehold sites totalling 346
hectares, all of which have planning approval for either industrial,
commercial, residential or leisure use. It is our intention to
progress further the value of these sites by remediation and through
new and improved planning permissions.
We have seen little evidence of properties being offered for sale at
distressed prices and believe that part of the cycle may well lie
ahead. We continue to explore with advisers and planners improved
planning consents to enhance the value of our properties, and to
progress long term disposals through venture and option arrangements.
Financial results
In the period the Group achieved turnover of £436,611, almost
unchanged from £433,960 in the same period last year. There were no
property realisations in either period. The operating loss was
£13,341 (2008: loss £9,862). Net interest expense was £20,404 (2008:
net income £14,140) reflecting the net debt following the purchase of
Moorland Stud in April 2008 and Welford at the end of 2008. Loss
before tax was £33,745 (2008: profit £4,278). Loss per share was
0.09p (2008: earnings 0.02p) all of which is attributable to
continuing operations.
At 30 June 2009 the Group had net borrowings of £2.2m (2008: £1.4m)
which is unchanged from December 2008
No interim dividend is proposed.
Prospects
Our results reflect continued income from short term lettings and
vigilance on costs. Several of our tenants are experiencing difficult
trading conditions and we work with them to mitigate income loss and
avoid costs to the Group which would arise from tenant failure. We
have a low overhead base and our interest costs are modest.
We believe that the portfolio will deliver shareholder value in the
longer term but do not expect a rapid recovery in activity, it could
be five or six years before we experience a restoration of acceptable
values.
Paul Rackham
Executive chairman
9 September 2009
PROPERTY RECYCLING GROUP PLC
Unaudited Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2009
Six months ended Six months Year ended 31
30 June 2009 ended 30 December 2008
£ June 2008 £
Note £
Revenue 4 436,611 433,960 880,944
Cost of sales - (141,800)
-
Gross profit 436,611 433,960 739,144
Administrative (449,952) (443,822) (899,830)
expenses
Operating loss ( 13,341) (9,862) (160,686)
Investment revenues 1,621 50,291 50,969
Finance costs (22,025) (36,151) (90,137)
(Loss)/profit before 4,278 (199,854)
tax (33,745)
Tax credit 5 1,534 3,311 16,082
(Loss)/profit for the
period (32,211) 7,589 (183,772)
Credit to property
revaluation reserve 988 11,666 3,955
Other comprehensive
income for the period 988 11,666 3,955
Total comprehensive
income for the period (31,223) 19,255 (179,817)
(Loss)/earnings per 6
share
Basic (pence) (0.09) 0.02 (0.51)
Diluted (pence) (0.09) 0.02 (0.51)
The results for the period are derived from continuing operations.
PROPERTY RECYCLING GROUP PLC
Unaudited Consolidated Statement of Changes in Equity
for six months ended 30 June 2009
Six months Six months Year ended 31
ended 30 June ended 30 June December 2008
2009 2008 £
£ £
Balance at start of 10,837,711 11,217,380 11,217,380
period
Total comprehensive
income for the period (31,223) 19,255 (179,817)
Dividends paid - (253,400) (253,400)
Increase in equity 26,554 26,701 53,548
reserve
Balance at end of period 10,833,042 11,009,936v 10,837,711
Equity comprises share capital, share premium account, merger
reserve, revaluation reserve, equity reserve and retained earnings.
PROPERTY RECYCLING GROUP PLC
Unaudited Condensed Consolidated Statement of Financial Position as
at 30 June 2009
As at As at As at
30 June 30 June 31 December
2009 2008 2008
Note £ £ £
Non-current assets
Property, plant and
equipment 105,973 141,499 123,735
Investment property 2,962,000 2,962,000 2,962,000
Finance lease receivables 63,468 79,969 71,718
Deferred tax asset 5 1,443 1,189 -
3,132,884 3,184,657 3,157,453
Curret assets
Inventories 10,273,669 9,630,096 10,161,220
Finance lease receivables 16,500 16,500 16,500
Trade and other
receivables 381,366 374,096 446,551
Current tax assets 26,684 - 26,684
Cash and cash equivalents 53,653 717,725 18,007
10,751,872 10,738,417 10,668,962
Total assets 13,884,756 13,923,074 13,826,415
Current liabilities
Trade and other payables (197,798) (224,736) (159,671)
Current tax liabilities - (37,263) -
Borrowings (1,511,750) (1,101,909) (1,371,278)
Deferred revenue (193,280) (169,869) (197,673)
(1,902,828) (1,533,777) (1,728,622)
Net current assets 8,849,044 9,204,640 8,940,340
Non-current liabilities
Borrowings (741,491) (978,689) (851,608)
Deferred tax liabilities 5 (407,395) (400,672) (408,474)
(1,148,886) (1,379,361) (1,260,082)
Total liabilities (3,051,714) (2,913,138) (2,988,704)
Net assets 10,833,042 11,009,936 10,837,711
Equity
Share capital 1,810,000 1,810,000 1,810,000
Share premium account 6,428,529 6,428,529 6,428,529
Merger reserve 821,833 821,833 821,833
Revaluation reserve 1,697,023 1,703,746 1,696,035
Equity reserve 185,586 132,185 159,032
Retained
(losses)/earnings (109,929) 113,643 (77,718)
Total equity 10,833,042 11,009,936 10,837,711
PROPERTY RECYCLING GROUP PLC
Unaudited Consolidated Statement of Cash Flows
for the six months ended 30 June 2009
Note Six months Six months Year ended
ended 30 ended 30 31 December
June 2009 June 2008 2008
£ £ £
Net cash inflow/(outflow)
from operating activities 8 25,695 (1,667,347) (2,456,045)
Investing activities
Interest paid (22,025) (36,151) (90,137)
Interest received 1,621 50,291 50,969
Net cash (deficit)/surplus
from investing activities (20,404) 14,140 (39,168)
Financing activities
Dividends paid 7 - (253,400) (253,400)
Repayment of borrowings (98,221) (71,390) (148,940)
Proceeds from borrowing 128,576 960,793 1,180,631
Net cash from financing
activities 30,355 636,003 778,291
Net increase/(decrease) in
cash and cash equivalents 35,646 (1,017,204) (1,716,922)
Cash and cash equivalents
at beginning of period 18,007 1,734,929 1,734,929
Cash and cash equivalents
at end of period 53,653 717,725 18,007
PROPERTY RECYCLING GROUP PLC
NOTES TO THE CONSOLIDATED INTERIM STATEMENT
1. General information
The nature of the operations and principal activities of the Company
and its subsidiaries (together called the Group) are set out in note
4.
Property Recycling Group plc is the Group's ultimate parent company.
It is incorporated in the United Kingdom under the Companies Acts.
The address of the registered office is Manor Farm, Bridgham,
Norwich, NR16 2RX.
Property Recycling Group plc shares are traded on AIM, a market of
the London Stock Exchange.
This consolidated interim statement was approved for issue by the
Board of Directors on 8 September 2009.
2. Basis of preparation
The consolidated interim statement should be read in conjunction with
the annual financial statements for the year ended 31 December 2008,
which have been prepared in accordance with IFRS as adopted by the
European Union on the historical cost basis.
The interim financial information has not been audited and does not
constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006. The Company's statutory accounts for the
year ended 31 December 2008 have been filed with the Registrar of
Companies and are available at www.propertyrecycling.co.uk. The
auditors' report on these financial statements was unqualified and
did not contain any statement under Section 237 (2) or (3) of the
Companies Act 1985.
3. Accounting policies
The accounting policies applied are consistent with those of the
annual financial statements for the year ended 31 December 2008, as
described in those annual financial statements.
4. Revenue and segmental information
Turnover comprises the invoiced value of property sales, property
rentals and other goods and services which fall within the Group's
ordinary activities after deduction of trade discounts and value
added tax. Income from operating leases is accounted for according
to the terms of the leases.
An analysis of the Group's revenue is as follows:
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2009 2008 2008
£ £ £
Sale of properties - - -
Property rental income 434,325 421,688 859,976
Other income 2,286 12,272 20,968
436,611 433,960 880,944
Investment income 1,621 50,291 50,969
438,232 484,251 931,913
Business segments
For management purposes, the Group is organised into one segment
being the sale or rental of property. Analysis of the Group's
revenue between sale of property and rental income is presented
above.
Geographical segments
The Company operates solely from the UK and management considers
there to be only one geographical segment.
5. Taxation
(i). Analysis of tax (credit)/charge on ordinary activities.
Six months Six months Year ended 31
ended 30 June ended 30 June December 2008
2009 2008 £
£ £
Current tax:
Corporation tax credit - (3,188) (17,239)
Deferred tax:
Deferred tax (1,534) (123) 1,157
(credit)/charge
Total tax (credit) on (1,534) (3,311) (16,082)
(loss)/profit
(ii). Deferred taxation liability/(asset)
The amounts included in the accounts and the amounts not recognised
are as follows:
Six months ended Six months Year ended 31
30 June 2009 ended 30 June December 2008
£ 2008 £
£
Included:
Investment property 407,395 400,672 408,383
Accelerated capital
allowances (1,443) (1,189) 91
405,952 399,483 408,474
Not recognised:
Trading losses (132,921) (106,532) (132,921)
(iii). Factors that may affect the future tax charge
No deferred tax asset has been recognised in respect of timing
differences relating primarily to tax losses as there is insufficient
evidence that the asset would be recoverable. The asset will be
recoverable if the Group generates suitable taxable profits.
6. (Loss)/earnings per share
Basic
Basic (loss)/earnings per ordinary share is calculated by dividing
the (loss)/profit after taxation for the periods by the weighted
average number of ordinary shares in issue as shown in the table.
The Company had 36,200,000 shares in issue as at 30 June 2009.
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2009 2008 2008
(Loss)/profit for period £(32,211) £7,589 £(183,772)
Weighted average number of 36,200,000 36,200,000 36,200,000
shares
(Loss)/earnings per ordinary
share (pence)
- Continuing operations (0.09) 0.02 (0.51)
Diluted
The calculation of diluted (loss)/earnings per share is calculated by
adjusting the weighted average number of shares to assume conversion
of share options. The adjusted weighted average number of shares is
36,200,000.
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2009 2008 2008
(Loss)/profit for period £(32,211) £7,589 £(183,772)
Weighted average number of 36,200,000 36,200,000 36,200,000
shares
(Loss)/earnings per ordinary
share (pence)
- Continuing operations (0.09) 0.02 (0.51)
7. Dividends
Six months Six months Year ended 31
ended 30 June ended 30 December 2008
2009 June pence
pence 2008
Ordinary Dividend: pence
Final paid in respect of
year ended 31 December 2007
(£253,400) - 0.70 0.70
Interim paid in respect of
year ended 31 December 2008
(£Nil) - -
Final paid in respect of
year ended 31 December 2008
(£Nil) - - -
- 0.70 0.70
The Board has not declared an interim dividend for the year ended 31
December 2009 (2008: Nil pence).
8. Notes to the consolidated statement of cash flows
Six months Six months Year ended 31
ended 30 ended 30 June December 2008
June 2009 2008 £
£ £
(Loss)/profit for the period (32,211) 7,589 (183,772)
Adjustment for:
Investment revenues (1,621) (50,291) (50,969)
Finance costs 22,025 36,151 90,137
Income tax credit (1,534) (3,311) (16,082)
Depreciation of property,
plant and equipment 17,762 17,762 35,526
Share based payment expense 26,554 26,701 53,548
Operating cash flows before
movements in working capital 30,975 34,601 (71,612)
Increase in inventories (112,449) (2,152,581) (2,683,705)
Decrease in receivables 73,435 407,787 343,583
Increase in payables 33,734 42,846 5,585
Cash generated/(absorbed) in
operations 25,695 (1,667,347) (2,406,149)
Tax paid - - (49,896)
Net cash inflow/(outflow)
from operating activities 25,695 (1,667,347) (2,456,045)
9. The Interim Statement will be posted shortly to
shareholders and will be available from the Company's Registered
Office at Manor Farm, Bridgham, Norwich, NR16 2RX and from the
Company's website: www.propertyrecycling.co.uk.
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