TIDMPROP
RNS Number : 4778I
Property Recycling Group PLC
12 March 2010
12 March 2010
PROPERTY RECYCLING GROUP PLC
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2009
Property Recycling Group plc (AIM: PROP), which acquires and improves brownfield
sites before selling them to developers or end users, announces its results for
the year ended 31 December 2009.
· Revenue GBP1.16 million (2008: GBP0.88 million)
· Profit before provision and tax GBP0.07 million (2008: loss GBP0.10
million)
· Loss before tax GBP0.91 million (2008: GBP0.20 million)
· Net debt GBP1.65 million (2008: GBP2.20 million)
Commenting Paul Rackham, executive chairman, said:
"This is a creditable performance in a difficult operating environment. I expect
the current conditions to continue for some time so we will maintain our low
cost, low gearing approach.
As required by IAS 2 we have reviewed the carrying value of each property
carried in inventories and made a provision of GBP0.97 million. We have no
intention of realising assets at carrying value and consider that no provision
would have been required on stock properties at the aggregate carrying value."
For further information please contact:
+------------------------------------------+------------------+
| Paul Rackham, Chairman, | 01953 717176 |
| Property Recycling Group plc | |
+------------------------------------------+------------------+
| Geoff Nash/Leslie Kent | 020 7600 1658 |
| FinnCap (Nominated adviser and joint | |
| broker) | |
+------------------------------------------+------------------+
| John Webb/Robert Luetchford | 020 7490 3788 |
| Marshall Securities Limited (Joint | |
| broker) | |
+------------------------------------------+------------------+
The report and financial statements for the year ended 31 December 2009 are
expected to be posted to shareholders by 19 March 2010. Copies of the accounts
will be available on the Company's website: www.propertyrecycling.co.uk.
The Annual General Meeting of the Company will be held at 10.30 a.m. on 1 June
2010 at the offices of Mayer Brown International LLP, 201 Bishopsgate, London
EC2M 3AF.
Visit our website: www.propertyrecycling.co.uk
EXECUTIVE CHAIRMAN'S REPORT
Introduction
During 2009 the UK economy was hindered by the continued effects of the credit
crunch and the ensuing banking problems. Our experience is that the banks
continue to seek to rebuild their balance sheets through restricting lending
whilst charging significant fees and high rates of interest to renew existing
facilities. Despite banks' protestations, there appears to be a major shortage
of bank lending to the real economy and in particular new lending for new
projects. Commentators have described increased interest in the property sector
and a number of funds have been launched with the stated purpose of taking
advantage of distressed sellers. Although there have been a small number of well
published bank enforced realisations, we have seen little sign of distressed
sellers as all participants have sought to avoid realising property assets in
illiquid markets and at depressed valuations. We believe banks are adopting a
gradual approach to limit damage to their already impaired balance sheets.
Most commentators agree that the next government will have to address the
extraordinary level of government debt and deficits. Action on these matters is
already overdue but when taken will inevitably have a negative short-term impact
on the entire economy.
We have continued to work on our existing portfolio, seeking to maintain our
short term letting income and, where possible, to augment it with option income.
We have also worked to enhance the long term value of our properties through
improved planning consents. The Group has low gearing and continues to keep a
tight control over costs. We have applied cash generated during the year to
reducing debt.
Financial results
In the year ended 31 December 2009 the Group achieved revenue of GBP1.16 million
(2007: GBP0.88 million), the increase reflecting an option fee received in
connection with our site at Brigg partly offset by a small reduction in letting
income. There was no income from property sales in 2009 (2008: GBP nil). Cost of
sales comprises a provision against the carrying value of one of the Group's
properties held as a trading asset. Administrative costs were GBP1.04 million
(2008: GBP0.90 million), including an increase of GBP0.07 million in the charge
for share based payments arising from the closure of the share option scheme
during the period.
As shareholders will be aware we hold our properties, other than an investment
property, as inventories in subsidiary companies. The accounting requirements of
IAS 2 'Inventories' force us to consider each property separately on the basis
of the lower of cost or net realisable value. We have concluded that in current
markets a provision of GBP0.97 million is needed against one of the Group
properties to meet these requirements. The Board has no intention of realising
assets at carrying value and it considers that no provision would have been
required on its inventories at the aggregate carrying value.
Profit before this provision and tax was GBP0.07 million (2008: loss GBP0.10
million). After the provision the loss before tax was GBP0.91 million (2008:
GBP0.20 million). Loss per share was 2.44p (2008: loss 0.51p). At 31 December
2009 the Group had net borrowings of GBP1.65 million (2008: GBP2.20 million).
In the light of the results for the year and the prospect that economic
conditions will continue to be difficult for some time the Directors recommend
that no dividend be paid.
Property portfolio
The portfolio comprises eight properties totalling 346 hectares.
Kentford
This 121 hectare freehold site is located near Newmarket in Suffolk. The site
has three dwellings, agricultural land, a stud farm and a construction training
site all of which are let. The property has been considered in the past for
substantial development and we believe it will offer significant opportunity in
the longer term.
Welford
This is a vacant freehold 17 hectare site in Northamptonshire which was acquired
at the end of 2008. The site, which is located at the junction of the A14 and
the A5199, approximately 5 miles from the Cathorpe interchange of the Ml and the
M6, has planning permission for the full range of motorway services.
Colsterworth
The freehold 8 hectare site located adjacent to the A1, midway between Stamford
and Grantham, has planning consent for general industrial, storage and
distribution use. There are 18 storage buildings on the site amounting to
approximately 20,400 sq m of which half are let on short term tenancies.
Stanton
Stanton is a vacant 37 hectare freehold site located near Bury St Edmunds in
Suffolk. The site has the benefit of an existing planning approval for an
111,480 sq m distribution centre granted in August 2006. This site continues to
be marketed by our agents.
Brigg
This freehold 50 hectare site located near Scunthorpe in Lincolnshire has
industrial / commercial planning permission. During 2009 we granted an option
over 41.5 hectares for which we received an option fee of GBP300,000, with the
possibility of a further fee of the same amount during this year. A planning
hearing is scheduled to be held soon relating to the development of a biomass
plant on another part of the site for which we granted a three year option in
August 2007. We expect that the outcome of that matter will emerge during this
year.
Fornham Park
This 89 hectare freehold site is located near Bury St Edmunds in Suffolk.
Approximately half of the site has planning approval for a golf course and 27
log cabins. Following sales of parts of the site in 2006 and 2007 for
development as five residential properties, we have been actively working on the
balance of this site which we believe has considerable potential. In the
meantime we receive rental income in respect of approximately half of the site.
Woodhurst
This freehold 20 hectare investment property, located near Huntingdon in
Cambridgeshire, is let to ADAS Consulting Limited on a ten year lease. We
continue to work with our tenant to maximise the future earning potential of the
undeveloped land and to establish the site as a centre of excellence for
composting technology.
Stoke Holy Cross
This former radar base comprises a freehold 5 hectare site outside Norwich. This
is a longer term site which will require the acquisition of additional land to
maximise potential and in due course the preparation of a master plan.
Prospects
I said last year that I saw little prospect of property sales at acceptable
prices in that year. That proved to be the case and I think we face a similar
situation this year. We expect this to be a long haul. Each year we review our
expenses and seek savings wherever possible. We work with tenants, many of whom
face challenges in their businesses, to retain as much of our letting income as
is possible. Option agreements such as that at Brigg can provide one-off but
welcome cash flow.
Our portfolio consists largely of strategically located brownfield sites which
we have improved through remediation and enhanced planning consents. In our
opinion demand for these sites will not return to anything like normal activity
until the large backlog of existing sites already held by developers and
currently mothballed have been developed and distressed sales completed. We
have seen no evidence of this process starting yet or liquidity returning and
perhaps more importantly sustainable owner occupier and tenant demand for
residential, industrial and commercial properties.
Throughout this difficult environment we will continue to explore opportunities
to enhance the long term value of the properties. We will consider selective
purchases only where properties are available at substantial discounts. I remain
confident that the portfolio will deliver shareholder value in the long term.
Paul Rackham
Executive Chairman
12 March 2010
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December 2009
+-----------------------------------+------+-------------+----------+------------+
| | | Year | | Year |
| | | ended | | ended |
| | | 31 | | 31 |
| |Note | December | | December |
| | | 2009 | | 2008 |
| | | GBP | | GBP |
+-----------------------------------+------+-------------+----------+------------+
| | | | | |
+-----------------------------------+------+-------------+----------+------------+
| Revenue | 3 | 1,162,910 | | 880,944 |
+-----------------------------------+------+-------------+----------+------------+
| | | | | |
| Cost of sales | | (974,694) | | (141,800) |
+-----------------------------------+------+-------------+----------+------------+
| | | | | |
| Gross profit | | 188,216 | | 739,144 |
+-----------------------------------+------+-------------+----------+------------+
| | | | | |
| Administrative expenses | | (1,038,213) | | (899,830) |
+-----------------------------------+------+-------------+----------+------------+
| | | | | |
| Operating loss | | (849,997) | | (160,686) |
+-----------------------------------+------+-------------+----------+------------+
| | | | | |
| Investment revenue | | 2,466 | | 50,969 |
+-----------------------------------+------+-------------+----------+------------+
| Finance costs | | (57,693) | | (90,137) |
+-----------------------------------+------+-------------+----------+------------+
| | | | | |
| Loss before tax | | (905,224) | | (199,854) |
+-----------------------------------+------+-------------+----------+------------+
| | | | | |
| Tax credit | 4 | 21,872 | | 16,082 |
+-----------------------------------+------+-------------+----------+------------+
| | | | | |
| Loss for the year attributable to | | (883,352) | | (183,772) |
| equity holders of the parent | | | | |
| | | | | |
+-----------------------------------+------+-------------+----------+------------+
| Credit to property revaluation | | 10,120 | | 3,955 |
| reserve | | | | |
| | | | | |
+-----------------------------------+------+-------------+----------+------------+
| Other comprehensive income for | | 10,120 | | 3,955 |
| the period | | | | |
+-----------------------------------+------+-------------+----------+------------+
| | | | | |
+-----------------------------------+------+-------------+----------+------------+
| Total comprehensive income for | | (873,232) | | (179,817) |
| the period | | | | |
+-----------------------------------+------+-------------+----------+------------+
| | | | | |
+-----------------------------------+------+-------------+----------+------------+
| Loss per share | 6 | | | |
+-----------------------------------+------+-------------+----------+------------+
| Basic (pence) | | (2.44) | | (0.51) |
| | | | | |
+-----------------------------------+------+-------------+----------+------------+
| Diluted (pence) | | (2.44) | | (0.51) |
| | | | | |
+-----------------------------------+------+-------------+----------+------------+
In 2009 and 2008 all results derived from continuing operations.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 December 2009
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| | Share | Share | Revaluation | Other | Retained | Total |
| | capital | premium | reserve | reserves | earnings/ | equity |
| | | | | | (losses) | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| | GBP | GBP | GBP | GBP | GBP | GBP |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| | | | | | | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| At 1 January | 1,810,000 | 6,428,529 | 1,692,080 | 927,317 | 359,454 | 11,217,380 |
| 2008 | | | | | | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| Loss for the | - | - | - | - | (183,772) | (183,772) |
| year | | | | | | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| Other | - | - | 3,955 | - | - | 3,955 |
| comprehensive | | | | | | |
| income - | | | | | | |
| reversal of | | | | | | |
| deferred tax | | | | | | |
| liability | | | | | | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| Dividends | - | - | - | - | (253,400) | (253,400) |
| paid | | | | | | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| Share based | | | | 53,548 | | 53,548 |
| payment | - | - | - | | - | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| At 1 January | 1,810,000 | 6,428,529 | 1,696,035 | 980,865 | (77,718) | 10,837,711 |
| 2009 | | | | | | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| Loss for the | - | - | - | - | (883,352) | (883,352) |
| year | | | | | | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| Other | - | - | 10,120 | - | - | 10,120 |
| comprehensive | | | | | | |
| income - | | | | | | |
| reversal of | | | | | | |
| deferred tax | | | | | | |
| liability | | | | | | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| Share based | - | - | - | 119,604 | - | 119,604 |
| payment | | | | | | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| Transfer | | | | (278,636) | 278,636 | |
| from equity | - | - | - | | | - |
| reserve to | | | | | | |
| retained | | | | | | |
| earnings/(losses) | | | | | | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
| At 31 | 1,810,000 | 6,428,529 | 1,706,155 | 821,833 | (682,434) | 10,084,083 |
| December | | | | | | |
| 2009 | | | | | | |
+-------------------+-------------+-------------+-------------+---------------+----------------+---------------+
Equity comprises share capital, share premium, merger reserve, revaluation
reserve, equity reserve and retained earnings/(losses).
Other reserves comprise merger reserve and equity reserve. Following the
cancellation of the share option scheme, the balance on the equity reserve has
been transferred to retained earnings/(losses).
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 2009
+--------------------------------------+------+------------------+------------------+
| | | 31 | 31 |
| | | December | December |
| | Note | 2009 | 2008 |
| | | GBP | GBP |
+--------------------------------------+------+------------------+------------------+
| Non-current assets | | | |
+--------------------------------------+------+------------------+------------------+
| Property, plant and equipment | | 88,293 | 123,735 |
+--------------------------------------+------+------------------+------------------+
| Investment property | | 2,962,000 | 2,962,000 |
+--------------------------------------+------+------------------+------------------+
| Finance lease receivables | | 55,218 | 71,718 |
+--------------------------------------+------+------------------+------------------+
| Deferred tax asset | | | |
| | | 6,718 | - |
+--------------------------------------+------+------------------+------------------+
| | | 3,112,229 | 3,157,453 |
+--------------------------------------+------+------------------+------------------+
| Current assets | | | |
+--------------------------------------+------+------------------+------------------+
| Inventories | 7 | 9,373,414 | 10,161,220 |
+--------------------------------------+------+------------------+------------------+
| Finance lease receivables | | 16,500 | 16,500 |
+--------------------------------------+------+------------------+------------------+
| Trade and other receivables | | 251,188 | 446,551 |
+--------------------------------------+------+------------------+------------------+
| Current tax assets | | 11,783 | 26,684 |
+--------------------------------------+------+------------------+------------------+
| Cash and cash equivalents | | 43,996 | 18,007 |
+--------------------------------------+------+------------------+------------------+
| | | 9,696,881 | 10,668,962 |
+--------------------------------------+------+------------------+------------------+
| Total assets | | 12,809,110 | 13,826,415 |
+--------------------------------------+------+------------------+------------------+
| | | | |
+--------------------------------------+------+------------------+------------------+
| Current liabilities | | | |
+--------------------------------------+------+------------------+------------------+
| Trade and other payables | | (177,385) | (159,671) |
+--------------------------------------+------+------------------+------------------+
| Borrowings | 8 | (1,054,064) | (1,371,278) |
+--------------------------------------+------+------------------+------------------+
| Deferred revenue | | (456,735) | (197,673) |
+--------------------------------------+------+------------------+------------------+
| | | (1,688,184) | (1,728,622) |
+--------------------------------------+------+------------------+------------------+
| Net current assets | | 8,008,697 | 8,940,340 |
+--------------------------------------+------+------------------+------------------+
| | | | |
+--------------------------------------+------+------------------+------------------+
| Non-current liabilities | | | |
+--------------------------------------+------+------------------+------------------+
| Borrowings | 8 | (638,580) | (851,608) |
+--------------------------------------+------+------------------+------------------+
| Deferred tax liabilities | | (398,263) | (408,474) |
+--------------------------------------+------+------------------+------------------+
| | | (1,036,843) | (1,260,082) |
+--------------------------------------+------+------------------+------------------+
| Total liabilities | | (2,725,027) | (2,988,704) |
+--------------------------------------+------+------------------+------------------+
| Net assets | | 10,084,083 | 10,837,711 |
+--------------------------------------+------+------------------+------------------+
| | | | |
+--------------------------------------+------+------------------+------------------+
| Equity | | | |
+--------------------------------------+------+------------------+------------------+
| Share capital | | 1,810,000 | 1,810,000 |
+--------------------------------------+------+------------------+------------------+
| Share premium account | | 6,428,529 | 6,428,529 |
+--------------------------------------+------+------------------+------------------+
| Merger reserve | | 821,833 | 821,833 |
+--------------------------------------+------+------------------+------------------+
| Revaluation reserve | | 1,706,155 | 1,696,035 |
+--------------------------------------+------+------------------+------------------+
| Equity reserve | | - | 159,032 |
+--------------------------------------+------+------------------+------------------+
| Retained losses | | (682,434) | |
| | | | (77,718) |
+--------------------------------------+------+------------------+------------------+
| Total equity | | 10,084,083 | 10,837,711 |
+--------------------------------------+------+------------------+------------------+
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 December 2009
+--------------------------------+------+-------------+-------------+
| | | Year | Year |
| | | ended | ended |
| | | 31 | 31 |
| | | December | December |
| |Note | 2009 | 2008 |
| | | GBP | (restated) |
| | | | GBP |
+--------------------------------+------+-------------+-------------+
| | | | |
| Net cash inflow/(outflow) from | 9 | 611,458 | (2,456,045) |
| operating activities | | | |
+--------------------------------+------+-------------+-------------+
| Investing activities | | | |
+--------------------------------+------+-------------+-------------+
| Interest received | | 2,466 | 50,969 |
+--------------------------------+------+-------------+-------------+
| | | | |
| Net cash increase from | | | |
| investing activities | | 2,466 | 50,969 |
+--------------------------------+------+-------------+-------------+
| | | | |
| Financing activities | | | |
+--------------------------------+------+-------------+-------------+
| Dividends paid | 5 | - | (253,400) |
+--------------------------------+------+-------------+-------------+
| Repayments of borrowings | | (1,380,242) | (148,940) |
+--------------------------------+------+-------------+-------------+
| Proceeds from borrowing | | 850,000 | 1,180,631 |
+--------------------------------+------+-------------+-------------+
| Interest paid | | (57,693) | (90,137) |
+--------------------------------+------+-------------+-------------+
| | | | |
| | | | |
| Net cash (used in)/from | | (587,935) | 688,154 |
| financing activities | | | |
+--------------------------------+------+-------------+-------------+
| | | | |
| Net increase/(decrease) in | | 25,989 | (1,716,922) |
| cash and cash equivalents | | | |
+--------------------------------+------+-------------+-------------+
| | | | |
+--------------------------------+------+-------------+-------------+
| Cash and cash equivalents at | | | |
| beginning of year | | 18,007 | 1,734,929 |
+--------------------------------+------+-------------+-------------+
| | | | |
| Cash and cash equivalents at | | 43,996 | 18,007 |
| end of year | | | |
+--------------------------------+------+-------------+-------------+
The prior year figures have been restated to reclassify interest paid of
GBP90,137 from cash flows from investing activities to cash flows from financing
activities, in accordance with IAS 7 'Cash flow statements'. This change of
presentation has no impact on the net increase / (decrease) in cash and cash
equivalents.
NOTES TO THE FINANCIAL INFORMATION
1. Presentation of financial information
This financial information does not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006 for the Group for the year
ended 31 December 2009 but has been derived from those accounts. The statutory
accounts for the year ended 31 December 2009 have been reported on by the
auditors whose report was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under sections 498(2) or (3) of the
Companies Act 2006. The accounts for the year ended 31 December 2009 will be
delivered to the Registrar of Companies for England and Wales in due course and
will also be sent to shareholders.
Statutory accounts for the year ended 31 December 2008 have been filed with the
Registrar of Companies. The auditors' report on those accounts was unqualified,
did not contain an emphasis of matter paragraph and did not contain any
statement under section 237(2) or (3) of the Companies Act 1985, under which Act
those accounts were prepared.
This preliminary report was approved by the board on 12 March 2010.
2. Significant accounting policies
Basis of accounting
The financial information has been prepared in accordance with International
Financial Reporting Standard (IFRSs).
The financial information has been prepared on the historical cost basis. The
principal accounting policies adopted were set out in the statutory accounts for
the year ended 31 December 2008 and are included in the statutory accounts for
the year ended 31 December 2009.
3. Revenue and segmental information
Revenue for the year 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:
+------------------------------------------+-----------------+----------+
| | Year | Year |
| | ended | ended |
| | 31 | 31 |
| | December | December |
| | 2009 | 2008 |
| | GBP | GBP |
+------------------------------------------+-----------------+----------+
| Sale of properties | | - |
| | - | |
+------------------------------------------+-----------------+----------+
| Option fees | 300,000 | |
| | | - |
+------------------------------------------+-----------------+----------+
| Property rental income | 854,376 | 859,976 |
+------------------------------------------+-----------------+----------+
| Other income | 8,534 | 20,968 |
+------------------------------------------+-----------------+----------+
| | 1,162,910 | 880,944 |
+------------------------------------------+-----------------+----------+
| Investment revenue | 2,466 | 50,969 |
+------------------------------------------+-----------------+----------+
| | 1,165,376 | 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.
4. Tax
+------------------------------------------+----------+---------------+
| | Year | Year |
| | ended | ended |
| | 31 | 31 |
| | December | December |
| | 2009 | 2008 |
| | GBP | GBP |
+------------------------------------------+----------+---------------+
| Current tax (credit) | (15,063) | (17,239) |
+------------------------------------------+----------+---------------+
| Deferred tax | (6,809) | 1,157 |
+------------------------------------------+----------+---------------+
| Total tax (credit) on loss on ordinary | (21,872) | (16,082) |
| activities | | |
+------------------------------------------+----------+---------------+
Corporation tax is calculated at 28% (2008: 28%) of the estimated assessable
profit for the year.
The expected tax charge for the year at 28% (2008:28%) is reconciled to the
actual tax credit as
shown below:
+------------------------------------------+----------------+---------------+
| | Year | Year |
| | ended | ended |
| | 31 | 31 |
| | December | December |
| | 2009 | 2008 |
| | GBP | GBP |
+------------------------------------------+----------------+---------------+
| | | |
+------------------------------------------+----------------+---------------+
| Loss before tax: | (905,224) | (199,854) |
+------------------------------------------+----------------+---------------+
| Tax at the UK corporation tax rate of | (253,463) | (55,959) |
| 28% (2008: 28%) | | |
+------------------------------------------+----------------+---------------+
| | | |
+------------------------------------------+----------------+---------------+
| Tax effect of: | | |
+------------------------------------------+----------------+---------------+
| Non-deductible expenses | 1,437 | 7,139 |
+------------------------------------------+----------------+---------------+
| Non-deductible general provision against | 272,915 | - |
| inventories | | |
+------------------------------------------+----------------+---------------+
| Permanent differences re Industrial | (19,012) | (18,007) |
| Buildings Allowance | | |
+------------------------------------------+----------------+---------------+
| Utilisation of tax losses not previously | (70,971) | - |
| recognised | | |
+------------------------------------------+----------------+---------------+
| Increase in unrecognised deferred tax | 21,847 | 26,305 |
| re tax losses | | |
+------------------------------------------+----------------+---------------+
| Unrecognised deferred tax on share based | 33,489 | 14,994 |
| payments | | |
+------------------------------------------+----------------+---------------+
| Losses surrendered in previous year | - | 26,686 |
+------------------------------------------+----------------+---------------+
| Prior year adjustment re current tax | (3,280) | (17,240) |
+------------------------------------------+----------------+---------------+
| Prior year adjustment re deferred tax | (4,834) | |
| | | - |
+------------------------------------------+----------------+---------------+
| Tax credit for the year | (21,872) | (16,082) |
+------------------------------------------+----------------+---------------+
In addition to the amount charged to the income statement, deferred tax relating
to the revaluation of the Group's investment property amounting to GBP10,120
(2008: GBP3,955) has been charged directly to equity.
5. Dividends
+----------------------------------------+----------+----------+
| | Year | Year |
| | ended | ended |
| | 31 | 31 |
| | December | December |
| | 2009 | 2008 |
| | GBP | GBP |
+----------------------------------------+----------+----------+
| Amounts recognised as distributions to | | |
| equity holders in the period: | | |
+----------------------------------------+----------+----------+
| | | |
+----------------------------------------+----------+----------+
| Final dividend for the year ended 31 | | |
| December 2008 | - | 253,400 |
| of Nil p (2007: 0.7p) per share. | | |
+----------------------------------------+----------+----------+
| | | |
+----------------------------------------+----------+----------+
| Interim dividend for the year ended 31 | | |
| December 2009 of Nil p (2008: Nil p) | | |
| per share. | - | - |
+----------------------------------------+----------+----------+
| | | 253,400 |
| | - | |
+----------------------------------------+----------+----------+
+----------------------------------------+----------+----------+
| | | |
+----------------------------------------+----------+----------+
| Proposed final dividend for the year | | |
| ended 31 December 2009 of Nil p (2008: | | |
| Nil p) per share. | - | - |
+----------------------------------------+----------+----------+
6. Loss per share
Basic
The calculation of loss per share arising on continuing activities for the
current year is based on the loss on continuing activities for the year of
GBP883,352 (2008: loss GBP183,772) and the weighted average number of shares of
36,200,000 (2008: 36,200,000). The Company had 36,200,000 shares in issue as at
31 December 2009.
+----------------------------------------+---------------+---------------+
| | Year | Year |
| | ended | ended |
| | 31 | 31 |
| | December | December |
| | 2009 | 2008 |
| | | |
+----------------------------------------+---------------+---------------+
| Loss per share (pence) | | |
+----------------------------------------+---------------+---------------+
| - continuing operations | (2.44) | (0.51) |
+----------------------------------------+---------------+---------------+
Diluted
The calculation of diluted loss per share arising on continuing activities was
calculated for 2008 by adjusting the weighted average number of shares to assume
conversion of share options. The share option scheme was terminated during
2009. The weighted average number of shares is 36,200,000 (2008: 36,200,000).
+----------------------------------------+---------------+----------+
| | Year | Year |
| | ended | Ended |
| | 31 | 31 |
| | December | December |
| | 2009 | 2008 |
| | | |
+----------------------------------------+---------------+----------+
| Loss per share (pence) | | |
+----------------------------------------+---------------+----------+
| - continuing operations | (2.44) | (0.51) |
+----------------------------------------+---------------+----------+
7. Inventories
+------------------------------+------------+------+------------+
| | 31 | | 31 |
| | December | | December |
| | 2009 | | 2008 |
| | GBP | | GBP |
+------------------------------+------------+------+------------+
| | | | |
+------------------------------+------------+------+------------+
| Stock properties | 9,373,414 | | 10,161,220 |
+------------------------------+------------+------+------------+
Included in stock properties at 31 December 2009 is an asset with a cost of
GBP817,435 (2008: GBP799,920) in respect of which the Group entered into an
agreement in August 2007 with a third party that gives the third party the
option to purchase part of the stock property and precludes the Group from
selling such area to a different party. The option agreement expires on 24
August 2010. A further two option agreements on two further areas of the same
site were granted to another third party in 2009. These options are for one year
with a right to extend into two further two year periods, giving a total option
period available to the option holder of five years. Both of these option
agreements expire on 11 August 2010 unless extended.
A total of GBP974,694 (2008: GBP100,000) has been charged to the income
statement as an expense, resulting from provisions in inventories. No reversal
of previous provisions was recognised as a reduction of an expense in 2009 or
2008.
One of the Group's properties included within inventories has been pledged to
secure general banking facilities.
No borrowing costs relating to qualifying assets were capitalised in the current
or prior year.
8. Borrowings
+----------------------------------------+-----------+-----------+
| | 31 | 31 |
| | December | December |
| | 2009 | 2008 |
| | GBP | GBP |
+----------------------------------------+-----------+-----------+
| Secured borrowing at amortised cost | | |
+----------------------------------------+-----------+-----------+
| Bank overdrafts | - | 1,180,631 |
+----------------------------------------+-----------+-----------+
| Bank loans | 1,692,644 | 1,042,255 |
+----------------------------------------+-----------+-----------+
| | 1,692,644 | 2,222,886 |
+----------------------------------------+-----------+-----------+
| | | |
+----------------------------------------+-----------+-----------+
| Amount due for settlement within 12 | 1,054,064 | 1,371,278 |
| months | | |
+----------------------------------------+-----------+-----------+
| Amount due for settlement after 12 | 638,580 | 851,608 |
| months | | |
+----------------------------------------+-----------+-----------+
| | 1,692,644 | 2,222,886 |
+----------------------------------------+-----------+-----------+
The principal features of the Group's borrowings are as follows:
On 7 April 2009 the Group secured its position with Lloyds Banking Group
converting its overdraft facility of GBP1,800,000 into a revolving credit
facility for a term of three years at an interest rate of 2.5% over 3 month
LIBOR with a 1.5% non utilisation fee, and secured by a charge over two of the
Group's properties. The balance at 31 December 2009 amounted to GBP850,000 and
is included within bank loans above. Prior to this the Group had an overdraft
facility of GBP1.8 million (2008: GBP1,800,000) dated 14 March 2008, secured by
a charge over two of the Group's properties. The average effective interest rate
on the bank overdraft approximated 2.44% (2008: 5.77%) and was determined based
on 1½% plus bank base rate.
The Group has a further bank loan of GBP842,644 (2008: GBP1,042,255) secured by
a charge over one of the Group's properties dated 27 September 2004. The
payments commenced on 20 December 2004 and will continue until 20 September
2014. The loan carries an interest rate of 1% over Lloyds Banking Group base
rate.
The weighted average interest rates paid during the year were as follows:
+----------------------------------------+----------+----------+
| | 31 | 31 |
| | December | December |
| | 2009 | 2008 |
| | GBP | GBP |
+----------------------------------------+----------+----------+
| Bank overdrafts | 2.44% | 5.77% |
+----------------------------------------+----------+----------+
| Bank loans | 2.59% | 5.67% |
+----------------------------------------+----------+----------+
9. Notes to the cash flow statement
+------------------------------------------+-----------+-------------------+
| | Year | Year |
| | ended | ended |
| | 31 | 31 |
| | December | December |
| | 2009 | 2008 |
| | | (restated) |
| | GBP | GBP |
+------------------------------------------+-----------+-------------------+
| Profit/(loss) for the year | (883,352) | (183,772) |
+------------------------------------------+-----------+-------------------+
| Adjustment for: | | |
+------------------------------------------+-----------+-------------------+
| Investment revenues | (2,466) | (50,969) |
+------------------------------------------+-----------+-------------------+
| Finance costs | 57,693 | 90,137 |
+------------------------------------------+-----------+-------------------+
| Income tax (credit) | (18,592) | (16,082) |
+------------------------------------------+-----------+-------------------+
| Depreciation of property, plant and | 35,442 | 35,526 |
| equipment | | |
+------------------------------------------+-----------+-------------------+
| Provision against inventories | 974,694 | 100,000 |
+------------------------------------------+-----------+-------------------+
| Share based payment expense | 119,604 | 53,548 |
+------------------------------------------+-----------+-------------------+
| Operating cash flows before movements in | | |
| | 283,023 | 28,388 |
| working capital | | |
+------------------------------------------+-----------+-------------------+
| | | |
+------------------------------------------+-----------+-------------------+
| Decrease/(increase) in inventories | (186,888) | (2,783,705) |
+------------------------------------------+-----------+-------------------+
| Decrease in receivables | 211,863 | 343,583 |
+------------------------------------------+-----------+-------------------+
| Increase in payables | 276,776 | 5,585 |
+------------------------------------------+-----------+-------------------+
| | | |
| Cash generated/(absorbed) in operations | 584,774 | (2,406,149) |
+------------------------------------------+-----------+-------------------+
| | | |
| Tax received/(paid) | 26,684 | (49,896) |
+------------------------------------------+-----------+-------------------+
| | | |
| Net cash from operating activities | 611,458 | (2,456,045) |
+------------------------------------------+-----------+-------------------+
Cash and cash equivalents (which are presented as a single class of assets on
the face of the balance sheet) comprise cash at bank and other short-term highly
liquid investments with an original maturity of one month or less.
The prior year figures have been restated to reclassify the provision against
inventories of GBP100,000 from 'Increase in inventories' to 'Operating cash
flows before movements in working capital'.
10. Analysis and reconciliation of net funds
+----------------------+-------------+---------+-----------+-------------+
| | At | | | At |
| | 1 | Cash | Non-cash | 31 |
| | January | Flow | Movement | December |
| | 2009 | GBP | GBP | 2009 |
| | GBP | | | GBP |
+----------------------+-------------+---------+-----------+-------------+
| Cash and cash | 18,007 | 25,989 | - | 43,996 |
| equivalents | | | | |
+----------------------+-------------+---------+-----------+-------------+
| | | | | |
+----------------------+-------------+---------+-----------+-------------+
| Borrowings due after | | | | |
| more than one year | (851,608) | - | 213,028 | (638,580) |
+----------------------+-------------+---------+-----------+-------------+
| Borrowings due | (1,371,278) | 530,242 | (213,028) | (1,054,064) |
| within one year | | | | |
+----------------------+-------------+---------+-----------+-------------+
| | | | | |
+----------------------+-------------+---------+-----------+-------------+
| Total net funds | (2,204,879) | 556,231 | | (1,648,648) |
| | | | - | |
+----------------------+-------------+---------+-----------+-------------+
+------------------------------------------+-------------+-------------+
| | 31 | 31 |
| | December | December |
| | 2009 | 2008 |
| | GBP | GBP |
+------------------------------------------+-------------+-------------+
| Increase/(decrease) in cash and liquid | 25,989 | (1,716,922) |
| resources in year | | |
+------------------------------------------+-------------+-------------+
| Cash inflow/(outflow) from | 530,242 | (1,031,691) |
| increase/(decrease) in debt | | |
+------------------------------------------+-------------+-------------+
| Change in net funds resulting from cash | 556,231 | (2,748,613) |
| flows | | |
+------------------------------------------+-------------+-------------+
| | | |
+------------------------------------------+-------------+-------------+
| Net (deficit)/funds at beginning of year | (2,204,879) | 543,734 |
+------------------------------------------+-------------+-------------+
| | | |
| Net deficit at end of year | (1,648,648) | (2,204,879) |
+------------------------------------------+-------------+-------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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