TIDMTRAF
RNS Number : 7301G
Trafalgar New Homes PLC
10 August 2016
10 August 2016
TRAFALGAR NEW HOMES PLC
("Trafalgar", the "Company" or "Group")
Final Results for the year ended 31 March 2016
Trafalgar New Homes plc (AIM: TRAF), the AIM quoted residential
property developer operating in South East England, announces its
final results for the 12 months ended 31 March 2016. A copy of the
annual report and accounts, along with notice of the Company's
annual general meeting, to be held at the Company's offices at
Chequers Bank, Bough Beech, Edenbridge, Kent TN8 9PD at 11.00 a.m.
on 8 September 2016, will be posted to shareholders shortly and
made available on the Company's website,
www.trafalgar-new-homes.co.uk.
Financial Highlights:
-- Turnover for the Period was GBP2,235,000 (2015: GBP3,898,250);
-- Profit before and after tax of GBP204,877 (2015: Loss GBP619,106);
-- EPS of 0.09p (2015: loss per share of 0.26p); and
-- Cash on the balance sheet at the end of the year was GBP278,406 (2015: GBP490,770).
Operational Highlights:
-- Construction work continues at Tunbridge Wells, Kent for six luxury apartments;
-- Work commenced at: 1) High Street, Edenbridge, Kent for three
terraced houses; 2) Vines Lane, Hildenborough, Kent for two
detached houses; and 3) Sheerness, Kent for six terraced houses;
and
-- Completed the purchase of a development site in Speldhurst, Tunbridge Wells, Kent.
Commenting on today's Results, CEO, Chris Johnson, said:
"I am delighted to report that the Group has returned to
profitability. We are confident that the Company has a strong
development pipeline and that we are well positioned to improve
financial performance for FY2017 and beyond. Despite Brexit, we
believe the market fundamentals remain strong and that huge demand
still remains for homes as a result of the chronic lack of supply.
We remain committed to building new homes in the South East where
we believe there is still high demand, to growing the Group's
profitability and, in time, rewarding our shareholders through
dividend payments. We believe the outlook for the Company is
exciting."
Enquiries:
Trafalgar New Homes plc +44 (0)1732 700000
Christopher Johnson
Allenby Capital Ltd - Nominated Adviser and Broker +44 (0)20 3328 5656
Jeremy Porter/James Reeve
Yellow Jersey PR Limited +44 (0)7825 916 715
Dominic Barretto/Alistair de Kare-Silver
Notes to Editors:
Trafalgar New Homes is the holding company of Combe Bank Homes,
a successful residential property developer operating in the
southeast of England. The founders of Combe Bank homes have a long
track record of developing new and refurbished homes, principally
in Kent.
The Company's focus is on the select situation of land for
residential property development. The Company outsources all
development activities, for example the obtaining of planning
permission, design and construction and uses fixed price build
contracts. This enables the Company to tightly control its
development and overhead costs.
The Company focuses on the regions of Kent, Surrey, Sussex and
the M25 ring south of London and targets development sites of up to
20 homes, with sales prices typically ranging from GBP250,000 to
GBP1,500,000 per unit.
Trafalgar New Homes Plc
CHAIRMAN'S STATEMENT
for the year ended 31 March 2016
On behalf of the Board, I am pleased to present Trafalgar New
Homes' results for the year ended 31 March 2016 which saw the Group
return to profitability. The Board is confident that it has a
strong development pipeline and that the Company is well positioned
to deliver profitability for FY2017 and onwards.
Our driving focus is now on acquiring new sites that should
produce increased turnover and a significant improvement in the
financial performance for FY2017. In addition, we have been
progressing with the preparation of a revised planning application
for our Staplehurst site, which, if successful, should make a
significant contribution to our bottom line and address the chronic
shortage in the area of good quality housing stock.
Financials
The year under review saw Group turnover at GBP2,235,000 (2015:
GBP3,898,250), with a profit before and after tax of GBP204,877
(2015: Loss GBP619,106). The cash on the balance sheet at the end
of the year was GBP278,406 (2015: GBP490,770) and the Group
continues to have sufficient capital for all planned
activities.
Business Environment and Outlook
The decision to exit the European Union at the end of June 2016
was unprecedented. It led to an immediate drop in the value of
sterling and a sell-off in house building stocks. Following the
initial market panic the stock market has rebounded in anticipation
of improved macro-economic conditions. However, it is too soon to
predict the long-term impact of Brexit on the UK homes market.
The market fundamentals remain strong with robust demand for
homes as a result of chronic undersupply. A recent report by the
Resolution Foundation showed that home ownership in the UK had
dropped to its lowest levels in 30 years, with outer London seeing
the second biggest drop of 13.5% to just under 58%. Further, the
Bank of England's decision on 4th August 2016 to reduce interest
rates to a record low of 0.25% should reduce the cost of financing
and may also provide potential buyers with cheaper mortgages.
Nevertheless, we strongly believe that as long as planning
restrictions remain obstructive there will continue to be a
considerable shortage of housing supply in the South East.
These fundamentals provide attractive opportunities for house
builders with the right strategic focus and access to finance. We
are confident that our focus on traditional housing for a wide
range of buyers in the South East, along with the price of our
current housing stock, will keep sale prices stable and we will
continue to attract customers. The recent increases in Stamp Duty
Tax are mainly applicable to the luxury end of the market and do
not adversely affect our operations. The Group remains committed to
building new homes in the South East that are in such high
demand.
The Group remains confident about its prospects for FY2017 and
beyond. Trafalgar New Homes is in a stronger position now than
ever, having returned to profitability and having secured several
banking facilities to fund its strong development pipeline. The
Executive Directors collectively have many years of residential
development experience, which enables the Group to negotiate land
and property purchases and construction contracts efficiently and
quickly. This, in turn, enables the Group to adapt to changing
market conditions and exploit opportunities. We are committed to
growing the Group's profitability and to rewarding our shareholders
through dividend payments when appropriate. We believe the outlook
for the Company is exciting.
James Dubois
Chairman
9 August 2016
Operations review
A summary of the Results for the year is as follows:-
2016 2015
GBP GBP
Revenue for the year 2,235,000 3,898,250
Gross profit/(loss) 476,607 (290,791)
Profit after taxation 204,877 (619,106)
Earnings per share 0.09p (0.26)p
Group turnover for the year related to the sale of the final
house at Oakhurst Park Gardens, Hildenborough, and the completion
and sale of the houses on the sites at The Bell Inn, Ticehurst,
East Sussex and the land at Station Road, Borough Green, Kent. The
revenue from these sales totalled GBP2,235,000, generating a gross
profit of GBP476,607. After deducting overhead costs of GBP279,250
for the year the Company recorded a pre-tax profit of
GBP204,877.
As the Company has approved tax losses brought forward of a sum
in excess of the profitability, there will be no tax charge and,
therefore, the post-tax profit amounts to GBP204,877 and with
238,375,190 shares in issue, (no change from the previous year) the
Company achieved earnings per share of 0.09p, which compares
favourably to the earnings per share loss of 0.26p recorded for the
year ended 31(st) March 2015.
Key performance indicators (KPIs)
Management are closely involved in the day to day operations of
the group and are very aware of cashflows and expenditure. However
management believe that the key indicators of performance for the
group are the revenue and profitability achieved during the period.
These measures are disclosed above in the operations review.
Management do not use any non-financial KPIs.
Development Pipeline
Construction work continues on our site at Tunbridge Wells, Kent
for six luxury apartments. Work has also commenced on sites at High
Street, Edenbridge, Kent for three terraced houses and at Vines
Lane, Hildenborough, Kent for two detached houses. Construction
work on all three sites is expected to be completed during the
current calendar year and most of these eleven units should be sold
before 31(st) March 2017, which will contribute to the
profitability of the Group for the year ending 31(st) March
2017.
The funding for the sites at Edenbridge and Hildenborough is
being provided by Coutts, with RateSetter financing the Tunbridge
Wells site. The Company's arrangements with its funders now provide
Trafalgar New Homes with 100% of the finance required to build on
all three sites, having committed its own funds at the time of the
acquisition of the sites and for the initial construction
costs.
The Company has also commenced work on the site at Sheerness,
Kent, which has been owned by the Group for some time. Trafalgar
New Homes has secured funding from Lloyds Bank for the construction
of the development on this site, which, after an initial payment by
the Group, will result in 100% of the finance required being
provided by the Bank.
Since the year-end the Company has completed the purchase of a
development site in Speldhurst, Tunbridge Wells, Kent, with the
benefit of receiving planning permission for the demolition of the
existing house and the erection of a substantial new build detached
house. Funding for the acquisition and development is being
provided by Lloyds Bank and construction work should commence
shortly. It is anticipated that the build work will be completed in
the spring of 2017 with a sale hopefully being achieved during the
summer of 2017.
Trafalgar New Homes believes that all the funding it has secured
for these developments are on competitive commercial terms.
The site at Staplehurst, Kent
The Company has been refused planning permission on its most
recent planning application for its site at Staplehurst, Kent. This
was received post year-end. Under the guidance of its planning
consultants, the Company felt it had addressed the requirements and
concerns set out by the authorities to the fullest. The Company is
now preparing a further application for planning permission, having
received advice from its planning consultants stating that: "In
formulating the emerging Local Plan, the Council's planning policy
team have clearly concluded (in writing and on public record) that
this is a site that is suitable to accommodate residential
development. In this context it is impossible to comprehend how an
'in principle' objection to housing development can be justified
and maintained".
Outlook
The Company is confident that its current development programme
will deliver profits for the Group for the year ended March 2017
and will enable it to meet market expectations. Looking ahead, the
Company is negotiating the purchase of other sites in the South
East of England, its chosen area of operation, which will
contribute to turnover and anticipated profitability for the Group
for the year ended 31(st) March 2018 and beyond.
The Board of Trafalgar New Homes remains focused on growing the
Group, both through site acquisition and development and corporate
acquisition, should any opportunities present themselves. The
Company is committed to creating value for its shareholders and
although it will not be paying a dividend this year Trafalgar New
Homes intends to declare and pay a dividend when circumstances
permit.
Christopher Johnson
Director
9th August, 2016
Trafalgar New Homes Plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2016
Year Year
ended ended
31 March
31 March
Note 2016 2015
GBP GBP
Revenue 2,235,000 3,898,250
Cost of sales (1,758,393) (4,189,041)
----------- -----------
Gross profit/ (loss) 476,607 (290,791)
Administrative expenses (279,250) (329,850)
Operating profit/(loss) 197,357 (620,641)
Profit /(loss) before interest 197,357 (620,641)
Other interest receivable and similar
income 2 7,520 1,535
Interest payable and similar charges 5 - -
Profit/(loss) before taxation 204,877 (619,106)
Tax payable on profit/(loss) on
ordinary activities 6 - -
Profit/(loss) after taxation for
the year attributable to equity
holders of the parent 204,877 (619,106)
=========== ===========
Other comprehensive income attributable
to equity
holders of the parent -
Total comprehensive income for
the year 204,877 (619,106)
Profit/(loss) attributable to:
Equity holders of the Parent 204,877 (619,106)
=========== ===========
Total comprehensive income/(loss)
for the year attributable to:
Equity holders of the Parent 204,877 (619,106)
PROFIT/(LOSS) PER ORDINARY SHARE;
Basic/diluted 7 0.09p (0.26p)
=========== ===========
All results in the current and preceding financial year derive
from continuing operations.
Trafalgar New Homes Plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 31 March 2016
31 March 31 March
Note 2016 2015
GBP GBP
Non-current assets
Property, plant and equipment 8 2,384 648
----------- -----------
2,384 648
Current assets
Inventory 11 2,275,546 1,884,250
Trade and other receivables 9 436,604 81,244
Cash at bank and in hand 10 278,406 490,770
----------- -----------
2,990,556 2,456,264
Total assets 2,992,940 2,456,912
Liabilities: amounts falling
due within one year
Trade and other payables 12 (152,149) (70,777)
Borrowings 13 (741,266) (381,450)
Net current assets 2,099,525 2,004,685
Non-current liabilities
Borrowings 13 (3,221,924) (3,331,961)
Net liabilities (1,122,399) (1,327,276)
=========== ===========
Capital and reserves
Called up share capital 14 2,383,752 2,383,752
Share premium account 15 1,165,463 1,165,463
Reverse acquisition reserve (2,817,633) (2,817,633)
Profit & loss account (1,853,981) (2,058,858)
Equity - attributable to the
owners of the Parent (1,122,399) (1,327,276)
=========== ===========
Trafalgar New Homes Plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2016
Re
Share Share Reverse Retained Total
capital premium acquisition profits equity
reserve /(losses)
GBP GBP GBP GBP GBP
At 1 April
2014 2,283,752 1,075,513 (2,817,633) (1,439,752) (898,120)
Loss for the
year - - - (619,106) (619,106)
Total comprehensive
income for
the year - - - (619,106) (619,106)
--------- --------- ------------ ----------- -----------
Issue of shares 100,000 100,000 - - 200,000
Share issue
costs - (10,050) - - (10,050)
At 31 March
2015 2,383,752 1,165,463 (2,817,633) (2,058,858) (1,327,276)
--------- --------- ------------ ----------- -----------
At 31 March
2015 2,383,752 1,165,463 (2,817,633) (2,058,858) (1,327,276)
Profit for
year - - - 204,877 204,877
Total comprehensive
income for
the year - - - 204,877 204,877
--------- --------- ------------ ----------- -----------
At 31 March
2016 2,383,752 1,165,463 (2,817,633) (1,853,981) (1,122,399)
--------- --------- ------------ ----------- -----------
For the purpose of preparing the consolidated financial
statement of the Group, the share capital represents the nominal
value of the issued share capital of 1p per share. Share premium
represents the excess over nominal value of the fair value
consideration received for equity shares net of expenses of the
share issue.
Trafalgar New Homes Plc
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2016
Note 2016 2015
GBP GBP
Cash flow from operating activities
Operating profit/(loss) 197,357 (620,641)
Depreciation 795 215
(Increase)/decrease in stocks (391,296) 3,186,204
(Increase)/decrease in debtors (355,360) 2,344,241
Increase/(decrease) in creditors 81,372 (670,542)
Interest received 60 174
Interest paid 166,869 272,483
Rental income received 7,460 1,361
Net cash (outflow) / inflow from
operating activities (292,743) 4,513,495
--------- -----------
Investing activities
Purchase of tangible fixed assets (2,531) -
Net cash used in investing activities (2,531) -
--------- -----------
Taxation - -
--------- -----------
Financing activities
New loans in year (net)/(loan repayments) 694,816 (4,092,216)
Issue of shares (net of direct
costs) - 189,950
Director loan repayments (445,037) (1,064,447)
Interest paid (166,869) (272,483)
--------- -----------
Net cash inflow/(outflow) from
financing 82,910 (5,239,196)
--------- -----------
(Decrease) in cash and cash equivalents
in the year (212,364) (725,701)
--------- -----------
Cash and cash equivalents at the
beginning of the year 490,770 1,216,471
Cash and cash equivalents at the
end of the year 278,406 490,770
========= ===========
BASIS OF PREPARATION
The financial information set out in this announcement is
abridged and does not constitute the Company's statutory financial
statements for the year ended 31 March 2016. The financial
information has been extracted from the financial statements for
the year ended 31 March 2016, which have been prepared in
accordance with International Financial Reporting Standards (IFRS)
and interpretations adopted by the European Union ("EU") and as
applied in accordance with the provisions of the Companies Act 2006
and were approved by the Board on 9 August 2016 and on which the
auditors have reported without qualification.
The statutory financial statements for the year ended 31 March
2016 will be posted to shareholders next week and, once approved,
will be delivered to the Registrar of Companies following the
Annual General Meeting on 8 September 2016.
Trafalgar New Homes Plc
NOTES TO THE FINAL RESULTS
For the year ended 31 March 2016
1 SEGMENTAL REPORTING
For the purpose of IFRS 8, the chief operating decision maker
("CODM") takes the form of the Board of Directors. The Directors'
opinion of the business of the Group is as follows.
The principal activity of the Group was property development.
All the Group's non-current assets are located in the UK.
Based on the above considerations, there is considered to be one
reportable segment. The internal and external reporting is on a
consolidated basis with transactions between Group companies
eliminated on consolidation. Therefore the financial information of
the single segment is the same as that set out in the consolidated
statement of comprehensive income, the consolidated statement of
changes in equity, the consolidated statement of financial position
and cashflows.
Geographical segments
The following tables present revenue regarding the Group's
geographical segments for the year ended 31 March 2016.
United
Year ended 31 March 2016 Kingdom Total
GBP GBP
Property development - sales 2,235,000 2,235,000
2,235,000 2,235,000
========= =========
United
Year ended 31 March 2015 Kingdom Total
GBP GBP
Property development - sales 3,898,250 3,898,250
3,898,250 3,898,250
========= =========
2 OTHER INTEREST RECEIVABLE AND SIMILAR INCOME
2016 2015
GBP GBP
Bank interest received 60 174
Rental income & ground rent 7,460 1,361
7,520 1,535
===== =====
3 PROFIT FOR THE YEAR
The Group's profit for the year is stated after charging the
following:
2016 2015
GBP GBP
Depreciation of tangible fixed assets 795 215
Auditor's remuneration:
Audit of these financial statements 10,000 10,000
Amounts receivable by the auditor
in respect of the audit of the financial
statements of subsidiary undertakings
pursuant to legislation 6,000 5,124
Amounts payable to Crowe Clark Whitehill LLP and its related
entities in respect of audit and non-audit services are disclosed
in the table above.
4 EMPLOYEES AND DIRECTORS' REMUNERATION
Staff costs during the year were as follows:
2016 2015
GBP GBP
Directors remuneration 15,000 36,250
Wages and salaries 43,500 66,000
Social security costs 4,061 8,454
Other pension costs 18,000 18,000
80,561 128,704
====== =======
The average number of employees of the company during the year
was:
2016 2015
Number Number
Directors and management 4 4
====== ======
Key management are the Group's Directors. Remuneration in
respect of key management was as follows:
2016 2015
GBP GBP
Short-term employee benefits:
- Emoluments for qualifying services
C C Johnson - -
- Emoluments for qualifying services
A Johnson - 10,000
- Emoluments for qualifying services
J Dubois 15,000 26,250
15,000 36,250
====== ======
There are retirement benefits accruing to Mr C C Johnson for
whom a company contribution was paid during the year of GBP18,000
(2015: GBP18,000).
Consultancy fees of GBP 4,994 (2015: GBP8,748) were paid to Mr N
Lott during the year.
5 INTEREST PAYABLE AND SIMILAR CHARGES
During the year all interest paid on borrowings was capitalised
as part of work in progress (GBP166,869) with the interest
capitalised on properties sold in the period forming part of cost
of sales. All interest was capitalised with the exception of:-
2016 2015
GBP GBP
Director's loan interest paid - -
- -
==== ====
6 TAXATION
2016 2015
GBP GBP
Current tax - -
Tax charge - -
==== ====
2016 2015
GBP GBP
Profit/(loss) on ordinary activities
before tax 204,877 (619,106)
Based on profit/(loss) for the year:
Tax at 20% (2015: 21%) 40,975 -
Effect of:
Losses utilised/group relief claimed (40,975) -
Tax charge for the year - -
======== ===============
No deferred tax asset has been recognised in respect of
historical losses due to the uncertainty in future profits against
which to offset these losses. As at the 31 March 2016 the group had
cumulative tax losses of GBP1,837,724 (2015: GBP2,056,907) that are
available to offset against future taxable profits.
7 PROFIT/(LOSS) PER ORDINARY SHARE
The calculation of profit/(loss) per ordinary share is based on
the following profits/(losses) and number of shares:
2016 2015
GBP GBP
Profit/(loss) for the year 204,877 (619,106)
======= =========
Weighted average number of shares
for basic profit /(loss) per share 238,735,200 236,708,533
=========== ===========
Weighted average number of shares
for diluted profit /(loss) per share 238,735,200 236,708,533
=========== ===========
PROFIT/(LOSS) PER ORDINARY SHARE:
Basic 0.09p (0.26p)
=========== ===========
Diluted 0.09p (0.26p)
=========== ===========
8 PROPERTY, PLANT AND EQUIPMENT
Fixtures and fittings 2016 2015
GBP GBP
Cost
At 1 April 2,936 2,936
Additions 2,531 -
At 31 March 5,467 2,936
===== =====
Depreciation
At 1 April 2,288 2,073
Charge for the year 795 215
At 31 March 3,083 2,288
===== =====
Net book value at 31
March 2016 (2015) 2,384 648
----- ---
9 TRADE AND OTHER RECEIVABLES
2016 2015
GBP GBP
Other receivables 425,515 59,268
Other taxes 4,786 18,532
Prepayment 6,303 3,444
436,604 81,244
======= ======
There are no receivables that are past due but not impaired at
the year-end. There are no provisions for irrecoverable debt
included in the balances above.
10 CASH AND CASH EQUIVALENTS
All of the Group's cash and cash equivalents at 31 March 2016
are in sterling and held at floating interest rates.
2016 2015
GBP GBP
Cash and cash equivalents 278,406 490,770
======= =======
The Directors consider that the carrying amount of cash and cash
equivalents approximates to their fair value.
11 INVENTORY
2016 2015
GBP GBP
Work in progress 2,275,546 1,884,250
========= ===============
12 TRADE AND OTHER PAYABLES
2016 2015
GBP GBP
Trade payables 93,328 24,579
Accruals 54,513 20,848
Tax 2,050 2,015
Other payables 2,258 23,335
152,149 70,777
======= ======
13 BORROWINGS
2016 2015
GBP GBP
Director's loans 2,121,924 2,566,961
Other loans 1,100,000 765,000
Bank and other loans 741,266 381,450
3,963,190 3,713,411
========= =========
Included in other loans is the sum of GBP300,000 (2015:
GBP300,000) advanced by the DFM Pension Scheme of which Mr J Dubois
is the principal beneficiary. This loan bears interest at 12% per
annum (2015: 12% per annum).
C C Johnson is a named guarantor on the loan included within
bank loans.
The bank borrowings are repayable as follows:
2016 2015
GBP GBP
On demand or within
one year 741,266 381,450
In the second year - -
In the third to fifth
years inclusive - -
After five years 741,266 381,450
======= =======
Less amount due for
settlement within 12
months (included in
current liabilities) 741,266 381,450
Amount due for settlement
after 12 months - -
======= =======
The weighted average interest rates paid on the bank loans were
as follows:
Bank Loans -5.33% (2015: 4.73%)
All of the Directors' loans are repayable after more than 1
year. All loans are interest bearing and charged accordingly.
However Mr C C Johnson has waived his right to interest in the year
and as a result interest of GBPNil (2015: GBP Nil) was paid to Mr C
C Johnson. The rate of interest on the loan is 5% pa (2015: 5% pa).
Interest of GBP36,000 (2015: GBP36,000) was paid to Mr J Dubois at
the rate of 12 % pa (2015: 12% pa).
14 Share capital
Authorised Share Capital
2016 2015
Number Number
Ordinary shares of 1p
each - 1April 2015 238,375,190 228,375,190
Additional shares issued
for cash in year - 10,000,000
238,375,190 238,375,190
=========== ===========
Issued, allotted and fully paid
2016 2015
GBP GBP
Ordinary shares of 1p each 2,383,752 2,383,752
========= =========
15 Share PREMIUM ACCOUNT
2016 2015
GBP GBP
Balance brought forward 1,165,463 1,075,513
Premium on issue of
new shares - 100,000
Share issue costs - (10,050)
Balance carried forward 1,165,463 1,165,463
========= =========
16 RELATED PARTY TRANSACTIONS
Mr C C Johnson holds 78.4% (2015: 78.4%) of the total issued
share capital of the Group.
The following working capital loans have been provided by the
Directors:
2016 2015
GBP GBP
C C Johnson
Opening balances 2,566,961 3,631,410
Loan repayments (421,255) (1,000,000)
Personal drawings (23,782) (64,449)
Interest payable - -
Balance carried forward 2,121,924 2,566,961
========= ===========
J Dubois - GBP300,000 GBP300,000
Mr Johnson's Loan bore interest during the year at 5% (2015: 5%
pa), but he has chosen to forego the interest in the year. Mr
Dubois's Loan, which is from his Pension Fund of which he is the
sole beneficiary, was at 12% pa interest (2015: 12% pa).
Mrs L C Howard (daughter of Mr C C Johnson) has provided a loan
to the company at a rate of 10% per annum of GBPnil (2015:
GBP100,000).
Mr G Howard (son-in-law of Mr C C Johnson) has provided a loan
to the company at a rate of 10% per annum of GBP800,000 (2015:
nil).
During the year, the Directors agreed to sell 11 Oakhurst Park
Gardens, Hildenborough Kent to Mr C C Johnson for a consideration
of GBP 525,000 (2015: GBP nil) being the market value.
17 SHARE OPTIONS AND WARRANTS
There are no share options or warrants.
18 CATEGORIES OF Financial instruments
The Group's financial assets are divided as cash and cash
equivalents. The Group's financial liabilities are divided as
Directors loans, bank loans and other loans.
Loans and receivables Financial
liabilities
measured at
amortised
cost
2016 2015 2016 2015
GBP GBP GBP GBP
Financial assets
Cash and cash equivalents 278,406 490,770 -
Trade receivables 436,604 81,244
Financial liabilities
Trade payables 152,149 70,777
Borrowings - Directors'
loans - - 2,121,924 2,566,961
Borrowings - Bank loan - - 741,266 381,450
Borrowings - Other loans - - 1,100,000 765,000
Total 715,010 572,014 4,115,339 3,784,188
=========== ========== ========= =========
The Board has overall responsibility for the determination of
the Group's risk management objectives and policies and it sets
policies that seek to reduce risk as far as possible without unduly
affecting the Group's competitiveness and flexibility. Further
details regarding these policies are set out below:
Capital risk management
The Group considers its capital to comprise its share capital
and share premium. The Group's capital management objectives are to
safeguard the entity's ability to continue as a going concern, so
that it can continue to provide returns for shareholders and
benefits for other stakeholders and to provide an adequate return
to shareholders by pricing products and services commensurately
with the level of risk.
Significant Accounting Policies
Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are
recognised, in respect of each class of financial asset, financial
liability and equity instrument are disclosed in the Company's
annual report and accounts for the year ended 31 March 2016.
Foreign currency risk
The Group has minimal exposure to the differing types of foreign
currency risk. It has no foreign currency denominated monetary
assets or liabilities and does not make sales or purchases from
overseas countries.
Interest rate risk
The Group is sensitive to changes in interest rates principally
on the loans from banks. GBP 2,000,000 of the loans from Mr Johnson
bears interest at 5% pa (2015: 5% pa), although Mr Johnson has
waived his right to receive interest in the year. Mr Dubois' loan
of GBP300,000 within other loans, from his Pension Fund attracts
interest at 12% pa (2015: 12%). Additional loans of GBP800,000
included in other loans attract interest at 10%pa (2015: 10%
pa).
The impact of a 100 basis point increase in interest rates would
result in additional interest cost for the year of GBP 7,280 (2015:
GBP24,325).
Credit risk management
Credit risk refers to the risk that a counter-party will default
on its contractual obligations resulting in financial loss to the
Group.
Liquidity risk management
This is the risk of the Company not being able to continue to
operate as a going concern.
The Directors have, after careful consideration of the factors
set out above, concluded that it is appropriate to adopt the going
concern basis for the preparation of the financial statements and
the financial statements do not include any adjustments that would
result if the going concern basis was not appropriate.
Mr Johnson confirms that he will continue to support the Group
for its anticipated needs for the next two years. As with all
business forecasts, the Directors' statement cannot guarantee that
the going concern basis will remain appropriate given the inherent
uncertainty about the future events.
Derivative financial instruments
The Group does not currently use derivative financial
instruments as hedging is not considered necessary. Should the
Group identify a requirement for the future use of such financial
instruments, a comprehensive set of policies and systems as
approved by the Directors will be implemented.
In accordance with IAS 39, "Financial instruments: recognition
and measurement", the Group has reviewed all contracts for embedded
derivatives that are required to be separately accounted for if
they do not meet specific requirements set out in the standard. No
material embedded derivatives have been identified.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AKCDDOBKDPFK
(END) Dow Jones Newswires
August 10, 2016 02:00 ET (06:00 GMT)
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