RNS Number:7500U
Fairbriar PLC
28 January 2004
28 January 2004
PRELIMINARY RESULTS
FOR THE YEAR ENDED 30 SEPTEMBER 2003
FairBriar PLC ("FairBriar" or "the Group"), the specialist residential property
development and serviced apartment business, announces its preliminary results
for the year ended 30 September 2003.
FINANCIAL HIGHLIGHTS
o Net debt reduced by #40.7million in the year
o Profits for the year of #400,000 (2002: #3.0 million)
o Turnover of #4.8 million (2002: #29.7 million)
o Total dividend for the year of 1p (2002: 2.1p)
o Strategic review completed
CORPORATE HIGHLIGHTS
o Sale of the majority of refurbished units at Nell Gwynn House, Sloane
Avenue, London SW3
o Practical completion of the first block at Wandsworth Riverside
Quarter, London SW18
o Planning consent granted for the development of 70 flats, at the former
Rochester Row Police Station, Vincent Square, London SW1
o High occupancy levels for serviced apartments in Kensington, Chelsea
and Canary Wharf
Kevin McCabe, chairman of FairBriar, commented: "This year's profitability was
below expectations but nonetheless I am confident that the outcome of the
strategic review will prove to be the best option for shareholders in terms of
value. I am in no doubt that the release of completed developments during the
coming year will provide a higher level of profit than that now reported."
For further information:
Kevin McCabe Peter Willetts / Marylene Guernier
FairBriar PLC Tavistock Communications
Tel: 01723 500 208 Tel: 020 7920 3150
www.fairbriar.co.uk
Chairman's Statement
Key Financials
It is disappointing to report that in the financial year ending 30 September
2003 our Group achieved profits for the year of #400,000 (2002: #3.0 million) on
turnover of #4.8 million (2002: #29.7 million). This steep reduction in profits
is in part due to the timing of completion of certain developments.
Many of FairBriar's developments are substantial and the process of land
assembly, pre-contract planning, design and construction can cover several
years. The results of any one accounting period are materially influenced by the
state of completion of any major development. In the period under review none of
the Group's more significant projects were concluded, however I am confident
that better profits will return in the current fiscal year.
During the year the Group has successfully focussed on improving cashflow and
reducing debt. Net debt has been reduced by #40.7million in the year to 30
September 2003. #14.9million of this reduction was due to the Group disposing of
half of its remaining interest in Pressdale Limited.
As a result of the lower level of reported profits, the Board has thought it
prudent not to recommend the payment of a final dividend.
Strategic Review
As we recently announced, for some time the Board has been concerned that the
quoted share price of FairBriar does not reflect the underlying value of its
activities and the ongoing development work. We expect to be in a position to
announce very shortly the outcome following our review of the options open to
the company.
Residential Developments
Over the period since acquisition, 84 out of a total 127 refurbished units at
Nell Gwynn House, Sloane Avenue, London SW3, have been sold or contracted and
further profits from this transaction are expected in the current year from the
sale of the final phase which is now substantially sold.
Additionally, planning consent was granted at Nell Gwynn House for a basement
health club with ancillary restaurant facilities and negotiations are presently
underway with potential operators.
Also in London, construction is progressing at N1rvana, our prestigious scheme
developed on the site of the Collins Theatre in Islington, with completion due
at the end of 2005. N1rvana will consist of 70 one, two and three bedroom
apartments, built around a new theatre.
The first half of this year saw the sale of seven houses at Heronsbrook, Ascot.
We are now delighted to announce the conclusion of the second development phase,
comprising seven apartments, which are now being marketed.
Two separate town centre refurbishment schemes have also commenced in Tunbridge
Wells, namely Victoria House and Garden House. The former comprises seven units
created within a former Victorian schoolhouse whilst the latter is the
conversion of an existing office block into 24 flats. Both developments should
be completed and sold within the next two years.
Also due to conclude this year is a 22 apartment, refurbishment and part new
build scheme in Uckfield, East Sussex. The former school building, set in five
acres of land, was acquired in January 2003, and is expected to provide a
significant profit for the Group.
Joint Ventures
MacLeod & FairBriar Limited
The long standing joint venture is progressing a number of projects, and has
achieved the sale of 13 flats on Wapping High Street, London E1, whilst the
remaining penthouse is being marketed. Additionally planning consent was
recently granted for the development of 10 residential units at 131 Wapping High
Street, and the site is now on the market for disposal.
Finally, construction is about to start on a third project comprising 29 flats
and houses at the King's Head Hotel in Harrow on the Hill, Middlesex.
Wandsworth Riverside Quarter Limited
The results for 2003 include a substantial portion of the profit from the
practical completion of the first block at Wandsworth Riverside Quarter, London
SW18, and it is anticipated that the remainder of the first block and the
entirety of the second block will be completed in this financial year. 66
apartments out of a total 116 have been pre-sold, with first occupiers moving
into their new homes shortly.
Construction of the third and fourth blocks of flats is to commence in the next
few months.
The second scheme undertaken in conjunction with Singaporean partners -
Centrepoint Properties Limited's, UK subsidiary - is the conversion of the
former Rochester Row Police Station, Vincent Square, London SW1. Planning
consent has been granted for the development of 70 flats, including 21 social
housing units for key workers. Building work should commence shortly.
I am confident that the developments undertaken either directly or through joint
ventures will generate good returns for the Group over the next two years.
Serviced Apartments
The rental market has seen a good upturn over the period, and earnings generated
by the Fraser Residences Limited joint venture have increased as a result.
Occupancy levels at our quality accommodation situated at Kensington's Stanhope
Gardens, Chelsea's Bolton Studios, and Canary Wharf's Boardwalk properties
exceed budgets. FairBriar and Centrepoint Properties Limited are looking for new
management contracts to develop the business further.
Prospects
This year's profitability was below expectations but nonetheless I am confident
that the outcome of the Board's strategic review will prove to be the best
option for shareholders in terms of improving value. I am in no doubt that the
release of completed developments during the coming year will provide a higher
level of profit than that now reported.
Kevin McCabe
Chairman
28 January 2004
FairBriar PLC
Consolidated profit and loss account
for the year ended 30 September 2003
Note 2003 2002
#000 #000 #000 #000
Turnover: Group and share of joint
venture 15,907 29,756
Less: share of joint venture
turnover (11,130) (22)
------- --------
Group turnover 4,777 29,734
Cost of sales (2,904) (25,005)
-------- -------
Gross profit 1,873 4,729
Administrative expenses (3,144) (3,176)
Other operating income 2 1,181 2,517
-------- -------
Group operating (loss)/profit (90) 4,070
Share of joint venture operating
profit/(loss) 2,408 (161)
Share of associate operating profit 54 -
-------- -------
Total operating profit including
share of joint ventures
and associates 2,372 3,909
(Loss)/profit on disposal of
subsidiary undertakings (886) 192
Profit on disposal of investment
properties 1,045 3,061
------- --------
159 3,253
Interest payable - group (3,284) (4,105)
-------- -------
(Loss)/profit on ordinary (753) 3,057
activities
before taxation
Tax on (loss)/profit on ordinary
activities - group 1,590 5
- joint ventures (716) -
------- --------
874 5
-------- -------
Profit on ordinary activities after 121 3,062
taxation
Minority interest 282 (19)
-------- -------
Profit for the year 403 3,043
Dividend 3 (353) (741)
-------- -------
Retained profit for the year 50 2,302
======== =======
Earnings per share - basic 4 1.14p 8.63p
- diluted 4 1.14p 8.45p
======== =======
All amounts relate to continuing operations.
FairBriar PLC
Consolidated balance sheet
as at 30 September 2003
2003 2002
#000 #000 #000 #000
Fixed assets
Intangible assets 272 1,193
Tangible assets 14,617 43,646
Investments 5,112 5,012
--------------- ----------------
Investment in
joint ventures
Share of
gross assets 47,417 27,854
Share of
gross
liabilities (34,900) (19,277)
--------------- ----------------
12,517 8,577
--------------- ----------------
Investments 2,176 -
in associates
--------------- ----------------
Total 19,805 13,589
investments
---------------- ----------------
34,694 58,428
Current
assets
Stock and
work in
progress 16,316 10,361
Debtors 14,099 42,012
Cash 616 1,309
--------------- ----------------
31,031 53,682
--------------- ----------------
Creditors:
amounts
falling due
within one
year
Bank loans (35,944) (58,680)
and overdraft
Creditors (1,962) (6,080)
--------------- ----------------
(37,906) (64,760)
--------------- ----------------
Net current (6,875) (11,078)
liabilities
---------------- ----------------
Total assets 27,819 47,350
less current
liabilities
Creditors:
amounts
falling due
after more
than one
year
Bank loans (16,955) (35,650)
---------------- ----------------
Net assets 10,864 11,700
================ ================
Capital and
reserves
Called up 353 353
share capital
Capital 28,886 28,886
redemption
reserve
Share premium 3,822 3,822
account
Revaluation 1,000 2,145
reserve
Profit and (23,341) (24,536)
loss account
---------------- ----------------
Equity 10,720 10,670
shareholder's
funds
Minority 144 1,030
interest -
equity
---------------- ----------------
10,864 11,700
================ ================
FairBriar PLC
Consolidated cash flow statement
for the year ended 30 September 2003
2003 2002
#000 #000
Net cash inflow from operating activities 20,909 2,108
Returns on investments and servicing of (4,122) (4,378)
finance
Taxation (7) (12)
Capital expenditure and financial investment 9,932 (844)
Acquisitions and disposals 268 1,241
Equity dividends paid (741) (741)
---------------- ----------------
Net cash inflow/(outflow) before financing 26,239 (2,626)
Financing (14,896) (4,814)
---------------- ----------------
Increase/(decrease) in cash in the year 11,343 (7,440)
---------------- ----------------
Reconciliation of net cash flow to movement in net debt
for the year ended 30 September 2003
2003 2002
#000 #000
Increase/(decrease) in cash in the year 11,343 (7,440)
Cash outflow from repayment of secured loan 14,896 5,656
New secured loans - (842)
-------------- ----------------
26,239 (2,626)
Loans disposed with subsidiaries 14,899 -
Amortisation of bank arrangement fee (400) -
-------------- ----------------
Movement in net debt in year 40,738 (2,626)
Net debt at 1 October (93,021) (90,395)
-------------- ----------------
Net debt at 30 September (52,283) (93,021)
============== ================
Notes
1. The financial information set out above does not constitute the
company's statutory accounts for the years ended 30 September 2003 or 2002. The
financial information for 2002 is derived from the statutory accounts for 2002
which have been delivered to the registrar of companies. The auditors have
reported on the 2002 accounts; their report was unqualified and did not contain
a statement under section 237(2) or (3) of the Companies Act 1985. The statutory
accounts for 2003 will be finalised on the basis of the financial information
presented by the directors in this preliminary announcement and will be
delivered to the registrar of companies following the company's annual general
meeting.
2. Other operating income
2003 2002
#000 #000
Serviced apartment income (net) 519 1,898
Project fee income 590 500
Property management income - 43
Rent receivable (net) 72 76
--------------- ---------------
1,181 2,517
=============== ===============
3. Dividend
The Company paid an interim dividend of 1p per ordinary share in August 2003.
The Directors do not recommend the payment of a final dividend, making a total
dividend of 1p for 2003 (2002: 2.1p).
4. Earnings per share
The calculation of the earnings per ordinary share for the year, on both a basic
and diluted basis, is calculated on the profit for the year of #403,000 (2002:
#3,043,000). The undiluted weighted average number of ordinary shares in issue
during the year was 35,278,647 (2002: 35,278,647). The diluted earnings per
share as disclosed takes account of share options held by the Directors and
other senior employees. The weighted average number of shares used for this
purpose is 35,320,025 (2002: 36,033,053).
5. Reconciliation of movements in shareholders' funds
2003 2002
Group Company Group Company
#000 #000 #000 #000
Profit/(loss) 403 (362) 3,043 (2,444)
for the year
Dividends (353) (353) (741) (741)
--------------- --------------- --------------- ---------------
50 (715) 2,302 (3,185)
Other net
recognised gains
and losses
relating to the
year
- revaluation of - - 1,145 -
investment
properties
--------------- --------------- --------------- ---------------
Net addition to/
(reduction in) 50 (715) 3,447 (3,185)
shareholders'
funds
Opening 10,670 7,503 7,223 10,688
shareholders'
funds
--------------- --------------- --------------- ---------------
Closing 10,720 6,788 10,670 7,503
shareholders'
funds
=============== =============== =============== ===============
6. Related party transactions
During the year the following transactions were entered into with related
parties. All were carried out on an arms length basis.
Transactions associated with Mr KC McCabe
A limited partnership, Oystercatcher, is an investor in the FairBriar
Residential Investment Partnership, ('FRIP'). Oystercatcher is sponsored and
operated by Equity Partnerships Fund Management Limited, ('EP'), a wholly owned
subsidiary of Teesland PLC, a company in which Kevin McCabe has an interest. EP
carried out the FSA regulated role of operator of FRIP during 2003 at an annual
fee of #75,864. Of this amount #19,038 was outstanding at the year end.
During the year, the Group paid #2,792 (2002: #5,500) in rent to Forsyth
Business Centres plc for an office in Central London utilised by the Group.
Forsyth Business Centres plc is indirectly controlled by Mr KC McCabe. No
amounts were outstanding at the year end on this transaction.
Transactions associated with Mrs LA Pairman
During the year the Group had contracts with Bison Holdings Limited ('Bison').
During the year and in accordance with the office rental agreement the amount
paid to Bison was #88,000 (2002: #88,000) and in addition #3,455 was paid to
Bison for sundry purchases of construction materials (2002: #12,000). Mrs LA
Pairman is a Director of Bison Limited, the ultimate parent company of Bison.
Transactions involving Joint Venture partners
During the year the Group recharged costs of #384,000 (2002: #384,000) to
Wandsworth Riverside Quarter Limited, a company which is 50% owned by the Group.
A balance of #896,000 was unpaid at the year end. No profit was made on this
transaction.
During the year the Group charged a project management fee of #206,000 (2002:
#8,000) to MacLeod & FairBriar Limited, a company which is 50% owned by the
Group. No amount was unpaid at the year end.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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