TIDMFRM
RNS Number : 6676Y
Formation Group PLC
19 May 2016
Formation Group PLC ("Formation" or "the Group")
Interim Results for the Six Months ended 29 February 2016
The Group is pleased to announce its interim results for the six
months ended 29 February 2016. Formation Group is now predominately
a property development and project management company providing
professional services to its clients within this sector.
HIGHLIGHTS
-- Revenue from continuing operations of GBP10.178 million (2015: GBP10.78 million).
-- Operating loss from continuing operations of GBP0.084 million
(2015: Profit GBP0.266 million).
-- Profit for the financial period of GBP2.379 million (2015: profit GBP0.257 million)
-- Cash position as at 29 February 2016 of GBP0.603 million (31 August 2015 GBP1.633 million).
-- Overall profit to be realised from the investment in Norwich
House profit share circa GBP3.918 million.
-- Near completion of the 159-161 Iverson Road development with
profits forecast within the 2(nd) half of the current financial
year.
-- The disposal of the investment properties held in FG
(Bradford) Limited and FG (Bristol) Limited on the 2 October,
2015 with a positive write back of GBP1.076 million relating to
the loans secured on these properties by Dunbar Assets Plc.
Outlook
-- The Group is trading in line with management's expectations
and the Board remains confident about the Group's prospects for the
remainder of the year.
Enquiries:
Formation Group Plc:
David Kennedy; Chief Executive Officer - 020 7920 7590
NOMAD to Formation Group Plc:
Northland Capital Partners Ltd
0207 382 1100
William Vandyk/ Gerry Beaney
BROKER to Formation Group plc
Peterhouse Corporate Finance Limited
0207 469 0930
Duncan Vasey/Fungai Ndoro
MEDIA RELATIONS
Yellow Jersey PR Limited
07825 916 715
Alistair de Kare-Silver / Aidan Stanley
Chairman's Statement
I am pleased to report the Group's results for the six months
ended 29 February 2016.
The Group continues to maintain its recent impressive trend of
turnover and profitability and is confident that the current year
budgeted profit is achievable. This confidence is enhanced by the
achievement of the projected profits on the Norwich House profit
share and the increasing order book on project management
contracts. Furthermore, with the expected successful completion of
the 159-161 Iverson Road development the Group is confident that it
can continue to source lucrative development opportunities.
William O'Dea
Non-Executive Chairman
19 May 2016
Chief Executive Officer's Report
Overview
Revenue for the period was GBP10.178 million from continuing
operations (2015 GBP10.780 million) and operating loss from
continuing operations was GBP0.084 million (2015 GBP0.266 million
profit).
Revenue for the period is underpinned by an order book with some
larger project management contracts in place.
In line with the Group's current dividend policy, no interim
dividend is being declared. However the Directors will review the
position at the time of the Preliminary results for the year ending
31 August 2016.
Project Management Division
-Formation Design & Build Limited
The company is now working on two larger sized contracts after a
short period of inactivity and will seek to source further
contracts to boost profitability.
-Formation Construction Limited
This company was formed in early 2012, to project manage
construction work and has substantially increased its revenue. At
present the company is managing in excess of eight projects.
Property Development Division
-Formation Homes (London) Ltd
As previously announced, Formation Homes has acquired the
development site in Iverson Road using a mixture of development
funding and cash from the Group's resources. The scheme comprises
19 residential units and 1 commercial unit. The Group is pleased to
announce that this development is near successful completion with
profits forecast within the 2(nd) half of the financial year.
Discontinued Operations
-FG Bradford & FG Bristol Ltd
As previously announced, Dunbar Assets plc have taken management
of the properties at FG (Bristol) Limited and FG (Bradford) Limited
and are actively marketing these properties with a view to sell.
The properties have been funded on a non-recourse basis and any
subsequent disposal will be cash neutral for Formation. The
properties held in these companies were disposed of on the 2
October 2015
with a positive write back of GBP1.076 million relating to the
loans secured on these properties.
Risks and Uncertainties
It is important to the board that we continue to provide all our
shareholders with a balanced view of the business including its
risks and uncertainties.
The Group's core activity is now Project Management, Property
Development and Property Share investing activities such as the
lucrative Norwich House profit share agreement. The Group expects
that profits from the property development division and property
investing activities will form a substantial part of its
profitability in the future.
Outlook
Formation Group is now placing primary focus on property
development and property investing activities in addition to its
project management business in order to materially boost
shareholder value. This can be evidenced in the improved trading
position over the last year and the confidence in this continued
trend in the short and medium term future.
David Kennedy
Chief Executive Officer
19 May 2016
The interim accounts will be published on the company's website
www.formationgroupplc.com
Consolidated income statement
For the six months ended 29 February 2016
6 months ended 6 months ended Year ended
29 Feb. 2016 28 Feb. 2015 31 Aug. 2015
Note (Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 2 10,178 10,780 23,764
Cost of sales (9,145) (9,736) (22,266)
Gross profit 1,033 1,044 1,498
Administrative expenses (1,117) (778) (1,716)
Operating (loss)/profit from
continuing operations 2 (84) 266 (218)
Finance Income 1438 - 2,421
Finance costs - - -
Profit before taxation 1,354 266 2,203
Taxation 4 - - (170)
Profit for the financial period
from continuing operations 1,354 266 2,033
Discontinued operations
Profit/(loss) for the financial
period from discontinued
operations 3 1,025 (9) (219)
Profit for the financial period 2,379 257 1,814
Attributable to:
Owners of parent 2,379 257 1,814
2,379 257 1,814
Earnings per share
From continuing operations
Basic 5 0.61p 0.12p 0.9p
Diluted 5 0.61p 0.12p 0.9p
From discontinued operations
Basic 5 0.46p - (0.1p)
Diluted 5 0.46p - (0.1p)
From continuing and discontinued
operations
Basic 5 1.08p 0.12p 0.8p
Diluted 5 1.07p 0.12p 0.8p
A separate consolidated statement of comprehensive income for
Formation Group Plc has not been presented as there are no items to
be recognised within it.
Consolidated statement of financial position
As at 29 February 2016
29 Feb. 2016 28 Feb. 2015 31 Aug. 2015
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and
equipment 25 299 26
Investments accounted for
using the equity method - 1,268 -
Investment property 275 - 275
300 1,567 301
Current assets
Inventories 8 11,039 6,905 10,387
Trade and other receivables 9,063 3,167 5,820
Cash and cash equivalents 603 1,707 1,633
20,705 11,779 17,840
Assets included in
disposal group classified
as held-for-sale 3 - 3,505 3,311
Total assets 21,005 16,851 21,452
Current liabilities
Trade and other payables (2,522) (2,168) (3,893)
Bank overdrafts and loan 9 (8,508) (4,331) (9,963)
(11,030) (6,499) (13,856)
Net current assets 9,675 8,785 7,295
Long term liabilities
Bank Overdraft and loan 9 - (4,312) -
Total liabilities (11,030) (10,811) (13,856)
Net assets 9,975 6,040 7,596
Equity
Share capital 2,205 2,205 2,205
Share premium account 2,106 2,106 2,106
Capital redemption reserve 61 61 61
Share option reserve 22 22 22
Retained earnings 5,581 1,646 3,202
Total equity attributable
to the owners of the
parent 9,975 6,040 7,596
Consolidated statement of changes in equity
For the six months ended 29 February 2016
Called Share Capital Share
up premium Treasury redemption option Retained Total
share account shares reserve reserve earnings equity
capital
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
1 September
2014 2,205 2,106 - 61 22 1,388 5,782
Profit and
total comprehensive
income for
the financial
period - - - - - 258 258
Balance at
28 February
2015 2,205 2,106 - 61 22 1,646 6,040
Profit and
total comprehensive
income for
the financial
period - - - - - 1,556 1,556
Balance at
31 August
2015 2,205 2,106 - 61 22 3,202 7,596
Profit for
the financial
period - - - - - 2,379 2,379
Balance at
29 February
2016 2,205 2,106 - 61 22 5,581 9,975
Consolidated statement of cash flows
For the six months ended 29 February 2016
6 months ended 6 months ended Year ended
29 Feb. 2016 28 Feb. 2015 31 Aug. 2015
Note (Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Operating activities
Net cash (used)/ generated by operations 6 (2,857) (6,310) (6,752)
Interest paid (24) - (154)
Net cash outflow from operating activities (2,881) (6,310) (6,906)
Investing activities
Cash flow from Norwich House profit share - - 400
Cash outflow in respect of Norwich House profit share - - (2,444)
Purchases of property, plant and equipment (6) (14) (25)
Repayments of investment accounted for using the equity
method - 3,380 4,638
Disposal of Property held for resale 3,312 - -
Net cash (used in) generated by investing activities 3,306 3,366 2,569
Financing activities
New/(reduction) loans (1,455) 4,322 5,642
Net cash (used) / generated by financing activities (1,455) 4,322 5,642
Net (decrease) / increase in cash and cash equivalents (1030) 1,379 1,305
Cash and cash equivalents at the beginning of the period 1,633 328 328
Cash and cash equivalents at end of the period 603 1,707 1,633
Notes to the Interim Information
For the six months ended 29 February 2016
1. Basis of preparation
The financial information set out in this interim report does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The group's statutory financial statements for
the year ended 31 August 2015, prepared under IFRS, have been filed
with the Registrar of Companies. The auditor's report on those
financial statements was unqualified and did not contain a
statement under Section 498 (2) or (3) of the Companies Act
2006.
The interim financial information has been prepared in
accordance with the recognition and measurement principles of
International Financial Reporting Standards (IFRS) and on the same
basis and using the same accounting policies as used in the
financial statements for the year ended 31 August 2015. The interim
financial statements have not been audited or reviewed in
accordance with the International Standard on Review Engagement
2410 issued by the Auditing Practices Board.
2. Segment information
Discontinued operations in the period primarily relate to the
winding down of FG Bradford Limited and FG Bristol Limited
6 months 6 months Year
ended ended ended
31
29 Feb. 28 Feb. Aug.
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
Profit
Revenue Profit Revenue Profit Revenue from
From from
continuing continuing Continuing
Operations operations Operations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
By class of
business:
Project Management 10,178 1,033 10,780 1,044 23,764
10,178 10,780 23,764 1,498
Unallocated
corporate expenses (1,117) (778) (1,716)
Operating profit/(loss)loss
from continuing
operations (84) 266 (218)
------------ ------------ -----------
-- No income has been incurred in respect of the Property development division.
3. Discontinued operations
The results of the discontinued operations which have been
included in the consolidated income statement, were as follows:
6 months ended 6 months ended Year ended
29 Feb. 2016 28 Feb. 2015 31 Aug. 2015
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Profit/(Loss) discontinued operations 1,025 (9) (219)
Attributable tax expense - - -
Profit/(Loss) from discontinued operations 1,025 (9) (219)
Notes to the Interim Information
For the six months ended 29 February 2016
3. Discontinued operations (continued)
The investment properties were secured by Dunbar Assets Plc
under non-recourse financing and were disposed of on the 2(nd)
October, 2015 with a positive write back of GBP1.076m on the loans
secured against these properties
Discontinued operation relates to the ongoing treatment of
results for the investment properties FG Bradford Limited & FG
Bristol Limited as part of discontinued operations.
4. Taxation
A deferred tax asset has not been recognised as the reversal of
tax losses is uncertain.
5. Earnings per share
Earnings/(loss) per share are based on the following profits and
numbers of shares:
6 months ended 6 months ended Year ended
29 Feb. 2016 28 Feb. 2015 31 Aug. 2015
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Profit/(loss) for the period:
Basic and diluted earnings - continuing operations 1,354 266 2,033
Basic and diluted earnings - discontinued operations 1,025 (9) (219)
Basic and diluted earnings/(losses) - continuing and
discontinued operations 2,379 (257) 1,814
Number of Number of Number of
Shares shares Shares
'000 '000 '000
Weighted average number of shares:
Basic 220,515 220,515 220,515
Diluted 220,515 220,515 223,727
Notes to the Interim Information
For the six months ended 29 February 2016
6. Reconciliation of profit from operations to net cash from
operations
6 months ended 6 months ended Year ended
29 Feb. 2016 28 Feb. 2015 31 Aug. 2015
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Operating (loss)/profit for the year from continuing
operations (84) 266 (218)
Operating profit/(loss) from discontinued operations 1,049 (9) (64)
Impairment of investment - - 10
Depreciation of property, plant and equipment 7 5 15
Impairment of assets classified as held for sale - - 193
Operating cash flows before movements in working
capital 972 262 (64)
(Increase)/decrease in inventories (1,419) (6,198) (8,091)
(Increase)/decrease in receivables (1,048) (952) (719)
(Decrease)/increase in payables (1,362) 578 2,122
Cash used in by operations (2,857) (6,310) (6,752)
Notes to the Interim Information
For the six months ended 29 February 2016
7. Investments accounted for using the equity method
6 months ended 6 months ended Year ended
29 Feb. 2016 28 Feb. 2015 31 Aug. 2015
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Investment in JV Finance Ventures Limited
Brought Forward - 4,648 4,648
Impairment - - (10)
Received - (3,380) (4,638)
Carried Forward - 1,268 -
In the year ended 2010, Formation Group PLC, in partnership with
JV Finance Limited, have contributed through JV Finance Ventures
Limited, a combined sum of GBP18.2 million, (Formation Group Plc's
contribution of GBP6.7 million on terms as announced on 2nd
September 2010) in order to settle with both Heritable Bank Plc's
administrator and outstanding creditors, in order to secure the
Aldgate site and the necessary warranties for completed
construction works.
Formation Group Plc's percentage shareholding in JV Finance
Ventures Limited is 36.88% and is based on Formation's percentage
share of long term loans in JV Finance Ventures Limited of GBP6.7
million. On the basis that the loans are repayable in 10 years time
and the percentage of the loan directly affects the shareholding,
the loans have been treated as an investment in an associated
undertaking and is accounted for under the equity method.
Accordingly the investment in JV Finance Ventures Limited has been
adjusted to the
anticipated fair value of the sales proceeds less costs to sell.
The fair value is based on the present value of the anticipated
future cash flows due within one year.
Formation Group Plc is pleased to announce that the investment
funds have been fully received.
8. Inventories
6 months ended 6 months ended Year ended
29 Feb. 2016 28 Feb. 2015 31 Aug. 2015
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Work In Progress 11,039 6,905 10,387
11,039 6,905 10,387
The inventory is held at the lower of cost and net realisable
value, net of payments received on account. Net realisable value is
based on the estimated selling prices less any further costs
expected to be incurred. There have been no write down of
inventories or amounts recognised in the income statement during
the period. The inventory relates to the development site at 161
Iverson Road.
Notes to the Interim Information
For the six months ended 29 February 2016
9. Bank overdrafts and loans
6 months ended 6 months ended Year ended
29 Feb. 2016 28 Feb. 2015 31 Aug. 2015
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Bank loan - term loan facility (8,507) (8,643) (9,963)
(8,507) (8,643) (9,963)
6 months ended 6 months ended Year ended
29 Feb. 2016 28 Feb. 2015 31 Aug. 2015
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
On demand or within one year (8,507) - (9,963)
Due more than one year - (8,643) -
The weighted average interest rates paid were as follows:
6 months ended 6 months ended
29 Feb. 2016 28 Feb. 2015 31 Aug. 2015
(Unaudited) (Unaudited) (Audited)
%. % %
Bank loan 9 6 7
_____________ ___________ __________
Formation Homes (London) Limited bank loan of GBP8,507 million,
is repayable within eighteen months of the date taken out and is
due to be repaid on the 18 June 2016. This facility is secured by
Titlestone Real Estate on the 159-161 Iverson Road development. The
interest rate payable on this loan is a fixed term rate of 9%. The
Board is confident that this loan will be repaid from a combination
of proceeds from the property sales at Iverson Road and if needed
funds from its Norwich House profit share agreement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFSAEEITLIR
(END) Dow Jones Newswires
May 19, 2016 02:01 ET (06:01 GMT)
Formation (LSE:FRM)
Historical Stock Chart
From Apr 2024 to May 2024
Formation (LSE:FRM)
Historical Stock Chart
From May 2023 to May 2024