TIDMPROP
RNS Number : 7265R
Property Recycling Group PLC
27 August 2010
PROPERTY RECYCLING GROUP PLC
Interim Results
For the six months ended 30 June 2010
Property Recyling Group plc (the "Company") (AIM: PROP), which acquires and
prepares brownfield sites for development, today announces its interim results
for the six months ended 31 June 2010.
For further information please contact:
Stephen Stuteley, Director
Property Recycling Group plc
01953 717176
Geoff Nash
finnCap, Nominated adviser and joint broker
020 7600 1658
John Webb
Marshall Securities, Joint broker
020 7490 3788
Executive Chairman's Report
Introduction
I said at the onset of the financial crisis that we had positioned ourselves for
an extended period of tough times by reducing our costs and seeking to maximise
short term income. That remains our approach and, as shown below, it has served
us well in the period to June 2010. There is little reason to challenge our view
that the economy will take a considerable period to rebalance and recover.
In our sector there have been a few well publicised bank realisations of
property but we expect that there are many more to come. The very gradual
unwinding of the bank balance sheets is no doubt vital at the national economic
level, but it seems that much of the property sector faces a prolonged period of
difficult financing which will delay the realisation of development assets.
Financial results
In the period the Group achieved revenue of GBP666,215, up from GBP436,611 in
the same period last year. While rental income fell as a result of the overall
economic downturn, our approach of securing option fees generated GBP300,000 in
the period. There were no property realisations in either period. The operating
profit was GBP205,532 (2009: loss GBP13,341) reflecting the benefit of increased
turnover and GBP26,554 which arose from the absence of a charge relating to
share options in the current period following cancellation of the scheme in the
second half of last year. Net interest expense was GBP26,895 (2009: GBP20,404).
Profit before tax was GBP178,637 (2009: loss GBP33,745). Earnings per share were
0.49p (2009: loss 0.09p) all of which is attributable to continuing operations.
At 30 June 2010 the Group had net debt of GBP1.83m compared to GBP1.65m at 31
December 2009 as a result of a prepayment of revenue received in 2009 relating
to the current period.
No interim dividend is proposed.
Property portfolio
The Group currently owns eight freehold sites totalling 346 hectares, all of
which have planning approval for industrial, commercial, residential or leisure
use. There have been no acquisitions or disposals in the period. We continue to
progress further the value of these sites by remediation and improved planning
permissions and to explore long term disposals through option arrangements.
Planning approval for a Biomass plant at Brigg was refused and an appeal against
this decision has been lodged by the optionholder.
Prospects
The prospects for the Company are unchanged from those I described in March
2010. We expect that it is going to be some time before demand for development
sites returns to normal activity levels. In the meantime we concentrate on
maintaining our rental income, controlling costs and exploring ways of
increasing the underlying value of our sites. In this context we have received
an option fee of GBP500,000 in August 2010 which extends a previous agreement.
We are confident that the portfolio will deliver value to shareholders in the
longer term.
Paul Rackham
Executive chairman
27 August 2010
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2010
+-----------------+------+-----------+------------+--------------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 |
| |Note | 30 | 30 | December |
| | | June | June | 2009 |
| | | 2010 | 2009 | GBP |
| | | GBP | GBP | |
+-----------------+------+-----------+------------+--------------+
| | | | | |
| Revenue | 4 | 666,215 | 436,611 | 1,162,910 |
+-----------------+------+-----------+------------+--------------+
| Cost of sales | | - | | (974,694) |
| | | | - | |
+-----------------+------+-----------+------------+--------------+
| Gross profit | | 666,215 | 436,611 | 188,216 |
+-----------------+------+-----------+------------+--------------+
| Administrative | | (460,683) | (449,952) | (1,038,213) |
| expenses | | | | |
+-----------------+------+-----------+------------+--------------+
| Operating | | 205,532 | (13,341) | (849,997) |
| profit/(loss) | | | | |
+-----------------+------+-----------+------------+--------------+
| Investment | | 244 | 1,621 | 2,466 |
| revenues | | | | |
+-----------------+------+-----------+------------+--------------+
| Finance costs | | (27,139) | (22,025) | (57,693) |
+-----------------+------+-----------+------------+--------------+
| | | | | |
| Profit/(loss) | | 178,637 | (33,745) | (905,224) |
| before tax | | | | |
+-----------------+------+-----------+------------+--------------+
| Tax | 5 | (1,338) | 1,534 | 21,872 |
| (charge)/credit | | | | |
+-----------------+------+-----------+------------+--------------+
| Profit/(loss) | | | | |
| for the period | | | | |
| | | 177,299 | (32,211) | (883,352) |
+-----------------+------+-----------+------------+--------------+
| | | | | |
| Credit to | | 12,047 | | 10,120 |
| property | | | 988 | |
| revaluation | | | | |
| reserve | | | | |
+-----------------+------+-----------+------------+--------------+
| Other | | | | |
| comprehensive | | 12,047 | 988 | 10,120 |
| income for the | | | | |
| period | | | | |
+-----------------+------+-----------+------------+--------------+
| | | | | |
| Total | | | | |
| comprehensive | | 189,346 | (31,223) | (873,232) |
| income for the | | | | |
| period | | | | |
+-----------------+------+-----------+------------+--------------+
| | | | | |
| Earnings/(Loss) | 6 | | | |
| per share | | | | |
+-----------------+------+-----------+------------+--------------+
| | | | | (2.44) |
| Basic (pence) | | 0.49 | (0.09) | |
+-----------------+------+-----------+------------+--------------+
| | | | | |
| Diluted | | 0.49 | (0.09) | (2.44) |
| (pence) | | | | |
+-----------------+------+-----------+------------+--------------+
The results for the period are derived from continuing operations.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For six months ended 30 June 2010
+-------------------+------------+------------+--------------+------------+------------+---------------+
| | Share | Share | Revaluation | Other | Retained | Total |
| | capital | premium | reserve | reserves | earnings/ | equity |
| | | | | | (losses) | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| | GBP | GBP | GBP | GBP | GBP | GBP |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| At 1 | 1,810,000 | 6,428,529 | 1,696,035 | 980,865 | (77,718) | 10,837,711 |
| January | | | | | | |
| 2009 | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| Loss for | - | - | - | - | (32,211) | (32,211) |
| the 6 | | | | | | |
| month | | | | | | |
| period | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| Other | - | - | 988 | - | - | 988 |
| comprehensive | | | | | | |
| income - | | | | | | |
| reversal of | | | | | | |
| deferred tax | | | | | | |
| liability | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| Share | | | | 26,554 | | 26,554 |
| based | - | - | - | | - | |
| payment | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| At 1 July | 1,810,000 | 6,428,529 | 1,697,023 | 1,007,419 | (109,929) | 10,833,042 |
| 2009 | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| Loss for | - | - | - | - | (851,141) | (851,141) |
| the 6 | | | | | | |
| month | | | | | | |
| period | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| Other | - | - | 9,132 | - | - | 9,132 |
| comprehensive | | | | | | |
| income - | | | | | | |
| reversal of | | | | | | |
| deferred tax | | | | | | |
| liability | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| Share | - | - | - | 93,050 | - | 93,050 |
| based | | | | | | |
| payment | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| Transfer | | | | (278,636) | 278,636 | |
| from | - | - | - | | | - |
| equity | | | | | | |
| reserve to | | | | | | |
| retained | | | | | | |
| earnings/(losses) | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| At 1 | 1,810,000 | 6,428,529 | 1,706,155 | 821,833 | (682,434) | 10,084,083 |
| January | | | | | | |
| 2010 | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| Profit for | - | - | - | - | 177,299 | 177,299 |
| the 6 | | | | | | |
| month | | | | | | |
| period | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| Other | | | 12,047 | | | 12,047 |
| comprehensive | - | - | | - | - | |
| income - | | | | | | |
| reversal of | | | | | | |
| deferred tax | | | | | | |
| liability | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
| At 30 June | 1,810,000 | 6,428,529 | 1,718,202 | 821,833 | (505,135) | 10,273,429 |
| 2010 | | | | | | |
+-------------------+------------+------------+--------------+------------+------------+---------------+
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 was
transferred to retained earnings/(losses) in 2009.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2010
+---------------------------------------------------------------------------------------------------+
| As at As at As at |
| 30 30 31 |
| June June December |
| Note 2010 2009 2009 |
| GBP GBP GBP |
| Non-current |
| assets |
| Property, 70,613 105,973 88,293 |
| plant and |
| equipment |
| Investment 2,962,000 2,962,000 2,962,000 |
| property |
| Finance lease 46,968 63,468 55,218 |
| receivables |
| Deferred tax 5 5,380 1,443 6,718 |
| asset |
| 3,084,961 3,132,884 3,112,229 |
| Curret assets |
| Inventories 9,412,101 10,273,669 9,373,414 |
| Finance lease 16,500 16,500 16,500 |
| receivables |
| Trade and 309,232 381,366 251,188 |
| other |
| receivables |
| Current tax 11,783 26,684 11,783 |
| assets 483,829 53,653 43,996 |
| Cash and cash |
| equivalents |
| 10,233,445 10,751,872 9,696,881 |
| Total assets 13,318,406 13,884,756 12,809,110 |
| Current |
| liabilities |
| Trade and (161,282) (197,798) (177,385) |
| other payables |
| Borrowings (1,771,597) (1,511,750) (1,054,064) |
| Deferred (187,027) (193,280) (456,735) |
| revenue |
| (2,119,906) (1,902,828) (1,688,184) |
| Net current 8,113,539 8,849,044 8,008,697 |
| assets |
| Non-current |
| liabilities |
| Borrowings (538,855) (741,491) (638,580) |
| Deferred tax 5 (386,216) (407,395) (398,263) |
| liabilities |
| (925,071) (1,148,886) (1,036,843) |
| Total (3,044,977) (3,051,714) (2,725,027) |
| liabilities |
| Net assets 10,273,429 10,833,042 10,084,083 |
| Equity |
| Share capital 1,810,000 1,810,000 1,810,000 |
| Share premium 6,428,529 6,428,529 6,428,529 |
| account |
| Merger reserve 821,833 821,833 821,833 |
| Revaluation 1,718,202 1,697,023 1,706,155 |
| reserve |
| Equity reserve 185,586 |
| - - |
| Retained (505,135) (109,929) (682,434) |
| losses |
| |
| Total equity 10,273,429 10,833,042 10,084,083 |
| |
+---------------------------------------------------------------------------------------------------+
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2010
+----------------------+------+-------------------+--------------------+-------------------+
| |Note | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 |
| | | 30 | 30 | December |
| | | June | June | 2009 |
| | | 2010 | 2009 | GBP |
| | | GBP | GBP | |
+----------------------+------+-------------------+--------------------+-------------------+
| Net cash | | | | |
| (outflow)/inflow | 8 | (151,080) | 25,695 | 611,458 |
| from operating | | | | |
| activities | | | | |
+----------------------+------+-------------------+--------------------+-------------------+
| | | | | |
+----------------------+------+-------------------+--------------------+-------------------+
| Investing activities | | | | |
+----------------------+------+-------------------+--------------------+-------------------+
| | | | | |
+----------------------+------+-------------------+--------------------+-------------------+
| Interest received | | 244 | 1,621 | 2,466 |
+----------------------+------+-------------------+--------------------+-------------------+
| | | | | |
| Net cash surplus | | 244 | 1,621 | |
| from investing | | | | 2,466 |
| activities | | | | |
+----------------------+------+-------------------+--------------------+-------------------+
| | | | | |
+----------------------+------+-------------------+--------------------+-------------------+
| Financing activities | | | | |
+----------------------+------+-------------------+--------------------+-------------------+
| Repayment of | | (102,192) | (98,221) | (1,380,242) |
| borrowings | | 720,000 | 128,576 | 850,000 |
| Proceeds from | | (27,139) | (22,025) | (57,693) |
| borrowing | | | | |
| Interest paid | | | | |
+----------------------+------+-------------------+--------------------+-------------------+
| | | | | |
| Net cash from | | 590,669 | 8,330 | (587,935) |
| financing activities | | | | |
+----------------------+------+-------------------+--------------------+-------------------+
| Net increase in cash | | | | |
| and cash equivalents | | 439,833 | 35,646 | 25,989 |
+----------------------+------+-------------------+--------------------+-------------------+
| Cash and cash | | | | |
| equivalents at | | 43,996 | 18,007 | 18,007 |
| beginning of period | | | | |
+----------------------+------+-------------------+--------------------+-------------------+
| Cash and cash | | | | |
| equivalents at end | | 483,829 | 53,653 | 43,996 |
| of period | | | | |
+----------------------+------+-------------------+--------------------+-------------------+
| | | | | |
+----------------------+------+-------------------+--------------------+-------------------+
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 26 August 2010.
2. Basis of preparation
The consolidated interim statement should be read in conjunction with the annual
financial statements for the year ended 31 December 2009, 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 2009 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 498 (2), (3) or
(4) of the Companies Act 2006.
3. Accounting policies
The accounting policies applied are consistent with those of the annual
financial statements for the year ended 31 December 2009, as described in those
annual financial statements.
4. Revenue and segmental information
Revenue 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 Six Year |
| months months ended |
| ended ended 31 |
| 30 30 December |
| June June 2009 |
| 2010 2009 GBP |
| GBP GBP |
| Sale of - |
| properties - - |
| Option fees 300,000 - 300,000 |
| Property 360,706 434,325 854,376 |
| rental income |
| Other income 5,509 2,286 8,534 |
| 666,215 436,611 1,162,910 |
| Investment 244 1,621 2,466 |
| income |
| 666,459 438,232 1,165,376 |
| |
+--------------------------------------------------------------------------------+
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 (charge)/credit on ordinary activities.
+-----------------------------------------------------------------------+
| Six Six Year |
| months months ended |
| ended ended 31 |
| 30 30 December |
| Current tax: June June 2009 |
| 2010 2009 GBP |
| GBP GBP |
| |
| Corporation tax - 15,063 |
| credit - |
| Deferred tax: |
| Deferred tax (1,338) 1,534 6,809 |
| (charge)/credit |
| |
| Total tax (1,338) 1,534 21,872 |
| (charge)/credit |
| on profit |
| /(loss) |
| |
+-----------------------------------------------------------------------+
(ii). Deferred taxation liability/(asset)
The amounts included in the accounts and the amounts not recognised are as
follows:
+-------------------------------------------------------------------------+
| Six Six Year |
| months months ended |
| ended ended 31 |
| 30 30 December |
| Included: June June 2009 |
| 2010 2009 GBP |
| GBP GBP |
| |
| Investment 386,216 407,395 398,263 |
| property |
| Accelerated |
| capital (5,380) (1,443) (6,718) |
| allowances |
| 380,836 405,952 391,545 |
| Not |
| recognised: |
| Trading losses (44,008) (132,921) (87,416) |
| |
+-------------------------------------------------------------------------+
(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. Earnings/(loss) per share
Basic
Basic earnings/(loss) 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 2010.
+-+-----------------+--------------------+-------------+--------------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 |
| | | 30 June | 30 | December |
| | | 2010 | June | 2009 |
| | | | 2009 | |
| | | | | |
+-+-----------------+--------------------+-------------+--------------+
| Profit/(loss) for | | GBP(32,211) | GBP(883,352) |
| period | GBP177,299 | | |
+-------------------+--------------------+-------------+--------------+
| | | | |
+-------------------+--------------------+-------------+--------------+
| Weighted average | 36,200,000 | 36,200,000 | 36,200,000 |
| number of shares | | | |
+-------------------+--------------------+-------------+--------------+
| | | | |
+-------------------+--------------------+-------------+--------------+
| Earnings/(loss) | | | |
| per ordinary | | | |
| share (pence) | | | |
+-------------------+--------------------+-------------+--------------+
|- | Continuing | 0.49 | (0.09) | (2.44) |
| | operations | | | |
+-+-----------------+--------------------+-------------+--------------+
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 Six Year |
| months months ended |
| ended ended 31 |
| 30 June 30 December |
| 2010 June 2009 |
| 2009 |
| |
| Profit/(loss) for GBP(32,211) GBP(883,352) |
| period GBP177,299 |
| Weighted average 36,200,000 36,200,000 36,200,000 |
| number of shares |
| Earnings/(loss) |
| per ordinary |
| share (pence) |
| - Continuing 0.49 (0.09) (2.44) |
| operations |
| |
+----------------------------------------------------------------------+
7. Dividends
No dividends were paid during the period, the same period last year, or the year
ended 31 December 2009.
The Board has not declared an interim dividend for the year ended 31 December
2010 (2009: Nil pence).
8. Notes to the consolidated statement of cash flows
+----------------------+---+---------------------+--------------------+------------------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 |
| | | 30 | 30 | December |
| | | June | June | 2009 |
| | | 2010 | 2009 | GBP |
| | | GBP | GBP | |
+----------------------+---+---------------------+--------------------+------------------+
| Profit/(loss) | | 177,299 | (32,211) | (883,352) |
| for the period | | | | |
+----------------------+---+---------------------+--------------------+------------------+
| Adjustment for: | | | | |
+----------------------+---+---------------------+--------------------+------------------+
| Investment | | (244) | (1,621) | (2,466) |
| revenues | | | | |
+----------------------+---+---------------------+--------------------+------------------+
| Finance costs | | 27,139 | 22,025 | 57,693 |
+----------------------+---+---------------------+--------------------+------------------+
| Income tax | | 1,338 | (1,534) | (18,592) |
| charge/(credit) | | | | |
+----------------------+---+---------------------+--------------------+------------------+
| Depreciation of | | | | |
| property, plant | | 17,680 | 17,762 | 35,442 |
| and equipment | | | | |
+----------------------+---+---------------------+--------------------+------------------+
| Provision | | | | 974,694 |
| against | | - | - | |
| inventories | | | | |
+----------------------+---+---------------------+--------------------+------------------+
| Share based | | | 26,554 | 119,604 |
| payment expense | | - | | |
+----------------------+---+---------------------+--------------------+------------------+
| Operating cash | | | | |
| flows before | | 223,212 | 30,975 | 283,023 |
| movements in | | | | |
| working capital | | | | |
+----------------------+---+---------------------+--------------------+------------------+
| Increase in | | (38,687) | (112,449) | (186,888) |
| inventories | | | | |
+----------------------+---+---------------------+--------------------+------------------+
| (Increase)/decrease | | (49,794) | 73,435 | |
| in receivables | | | | 211,863 |
+----------------------+---+---------------------+--------------------+------------------+
| (Decrease)/increase | | (285,811) | 33,734 | 276,776 |
| in payables | | | | |
+----------------------+---+---------------------+--------------------+------------------+
| Cash | | | | |
| (absorbed)/generated | | (151,080) | 25,695 | 584,774 |
| in operations | | | | |
+----------------------+---+---------------------+--------------------+------------------+
| Tax paid | | - | - | 26,684 |
+----------------------+---+---------------------+--------------------+------------------+
| Net cash | | | | |
| (outflow)/inflow | | (151,080) | 25,695 | 611,458 |
| from operating | | | | |
| activities | | | | |
+----------------------+---+---------------------+--------------------+------------------+
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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