Interim Results
September 24 2003 - 3:03AM
UK Regulatory
RNS Number:1003Q
Solitaire Group PLC
24 September 2003
24 September 2003
SOLITAIRE GROUP Plc
Solitaire is a leading national provider of property management services
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2003
Highlights
Change Six months ended Six months ended
per cent 30 June 2003 30 June 2002
#'000 #'000
Turnover +5.2 #3,032 #2,882
Profit before tax +7.3 #782 #729
Profit before tax, amortisation and +6.1 #909 #857
interest
Earnings per share +9.3 11.7p 10.7p
Earnings per share before amortisation +8.4 12.9p 11.9p
Interim dividend +10.0 3.3p 3.0p
* Acquisition of Freehold Managers PLC ("FMP") for an initial consideration of
#3.9 million (#0.7 million in shares and #3.2 million in cash plus an
estimated #2million earn out, announced today. This acquisition, which
is substantially earnings enhancing, represents an exciting new opportunity
for Solitaire
* Growth in instructions from both existing and new housebuilder clients
continues. We have been appointed as property managers to a number of
significant residential development schemes and our ground rent portfolio
continues to grow
* As a result of our extensive management responsibilities in southern England,
we are considering opening a second branch office on or near the south
coast
George Brutton, Chairman of Solitaire Group Plc, commented:
"I am delighted that FMP is joining the Solitaire Group. This acquisition
complements and extends Solitaire's core range of activities and will provide
significant earnings enhancement for the group. We look forward to working with
the FMP team to develop and grow our business.
"The continuing growth of our core property management business has been very
satisfactory and we have a substantial pipeline of developments which will come
on-stream for management during the next 12-18 months."
For further information:
Graham Shapiro, Joint Managing Director Tel: 0208 449 6125
Solitaire Group Plc
Tarquin Edwards / Chris Steele Tel: 0207 929 5599
Holborn Public Relations Limited
Chairman's Statement
I am pleased to report another satisfactory first half for Solitaire showing a
5.2 per cent increase in turnover and a 7.3 per cent increase in profit before
tax. The results show the continuing strength of our core property management
business.
We have today announced the acquisition of Freehold Managers PLC for an initial
consideration of #3.9 million (#0.7 million in shares and #3.2 million in cash)
plus an estimated #2 million earn out. This is a substantially earnings
enhancing acquisition and represents an exciting new opportunity for Solitaire.
Results and dividend
Turnover increased by 5.2 per cent to #3,032,000 (2002: #2,882,000). The
operating profit for the six months to 30 June 2003 after writing off goodwill
amortisation but before interest, increased by 6.5 per cent to #852,000 (2002:
#800,000). Accordingly, after interest and goodwill amortisation, pre-tax
profits were up by #53,000 or 7.3 per cent to #782,000 (2002: #729,000) and
basic earnings per share were up by 9.3 per cent to 11.70p (2002: 10.70p).
Adjusted earnings per share, before goodwill amortisation and after interest
were up by 8.4 per cent to 12.90p (2002: 11.90p).
The board is recommending the payment of an increased interim dividend of 3.30p
(2002: 3.00p) per share, an increase of 10.0 per cent over 2002, reflecting the
board's confidence in the future prospects of the group. This will be paid on 21
November 2003 to shareholders on the register on 10 October 2003.
Review of operations
Residential property management
The growth in instructions from our existing housebuilder clients has shown no
signs of slowing down. In addition we are seeing a growing number of
instructions from housebuilders we have not worked with before. Furthermore,
the instructions that we are receiving are substantial in size, which will lead
to greater operational efficiency.
We have started a phased introduction of our new property management computer
system. The main reason for its introduction is the significant extra compliance
requirements for property managers contained in the Commonhold and Leasehold
Reform Act 2002. The new system will however enable us to further improve our
mainstream service to clients.
The success of our Leicester office in attracting business from new and existing
clients has necessitated increased local staffing. In addition we are
considering opening a further office in or near the south coast to better serve
our large and growing management responsibilities in that area.
Professional and commercial services
Management fees and professional services income derived from Moss Kaye
Pembertons remains at a satisfactory level, but the commissions from selling and
letting commercial premises have experienced a temporary slow down in common
with the rest of the market. However we continue to see benefits from the
cross-referral of business.
Insurance services
The number of properties in our insurance portfolio continues to rise. The
value of properties managed by the group for insurance purposes amounts to
approximately #1.6 billion.
Management of residential rented property
This business continues to make a positive contribution to group profits and we
are seeking further opportunities for expansion in this area.
Current trading and prospects
The continuing growth of our core property management business has been very
satisfactory and we have a substantial pipeline of developments which will come
on-stream for management during the next 12-18 months. The increase in capital
expenditure this half year reflects the growth of the group's ground rent
portfolio.
Our announcement of the acquisition of Freehold Managers PLC represents an
exciting new opportunity for Solitaire and I look forward to the future of the
group with confidence.
George Brutton, FRICS
Chairman
24 September 2003
Unaudited consolidated profit and loss account
Six months Six months Year to
to 30 June to 30 June 31 Dec
2003 2002 2002
Notes #'000 #'000 #'000
_______ _______ _______
Revenue 3,032 2,882 5,911
Operating expenses
External fees and commissions 94 158 276
Other administration expenses 2,029 1,867 3,830
_______ _______ _______
909 857 1,805
Amortisation of goodwill and development costs 57 57 115
Exceptional costs - - 95
_______ _______ _______
Operating profit 852 800 1,595
Net interest paid (70) (71) (148)
_______ _______ _______
Profit on ordinary activities before taxation 782 729 1,447
Taxation on ordinary activities 241 233 450
_______ _______ _______
Profit on ordinary activities after taxation 541 496 997
Dividends 2 153 138 475
_______ _______ _______
Retained profit for the period 388 358 522
_______ _______ _______
Basic and diluted earnings per share 3 11.7p 10.7p 21.6p
Adjustment for amortisation 1.2p 1.2p 2.5p
Adjustment for exceptional costs - - 2.1p
_______ _______ _______
Adjusted earnings per share 3 12.9p 11.9p 26.2p
_______ _______ _______
Dividend per share 3.30p 3.00p 10.3p
_______ _______ _______
Unaudited consolidated balance sheet
30 June 30 June 31 Dec
2003 2002 2002
#'000 #'000 #'000
_______ _______ _______
Fixed assets
Intangible assets 1,734 1,840 1,793
Tangible assets
Office equipment 298 163 184
Freehold land and buildings 261 181 261
Freehold investment reversions 12,604 9,498 11,739
13,163 9,842 12,184
_______ _______ _______
14,897 11,682 13,977
_______ _______ _______
Current assets
Debtors 2,243 1,946 1,888
Cash and deposits 112 301 101
_______ _______ _______
2,355 2,247 1,989
Creditors: amounts falling due within one year
Borrowings 1,099 769 790
Other liabilities 1,511 1,681 1,337
_______ _______ _______
2,610 2,450 2,127
Net current (liabilities) / assets (255) (203) (138)
_______ _______ _______
Total assets less current liabilities 14,642 11,479 13,839
_______ _______ _______
Creditors: amounts falling due after more than one
year
Borrowings 2,167 1,583 1,779
_______ _______ _______
Net Assets 12,475 9,896 12,060
_______ _______ _______
Capital and reserves
Called-up share capital 464 462 462
Share premium account 2,671 2,647 2,647
Revaluation reserve 6,731 4,731 6,731
Profit and loss account 2,609 2,056 2,220
_______ _______ _______
Equity shareholders' funds 12,475 9,896 12,060
_______ _______ _______
Consolidated cash flow statement
Six months Six months Year to
to 30 June to 30 June 31 Dec
2003 2002 2002
#'000 #'000 #'000
_______ _______ _______
Cash flow from operating activities 1,076 1,401 1,752
Returns on investments and servicing of finance
Interest received 5 4 18
Interest paid (75) (75) (166)
_______ _______ _______
Net cash outflow from returns on investment and (70) (71) (148)
servicing of finance
_______ _______ _______
UK corporation tax (355) (346) (509)
_______ _______ _______
Capital expenditure and financial investment
Office equipment (163) (33) (92)
Purchase of freehold reversions (865) (263) (584)
Disposal of fixed assets - 55 55
_______ _______ _______
Net cash outflow from capital expenditure and (1,028) (241) (621)
financial investment
_______ _______ _______
Acquisition of subsidiary - (17) (28)
Equity dividends paid (338) (308) (446)
_______ _______ _______
Cash (outflow) / inflow before use of liquid (715) 418 0
resources and financing
_______ _______ _______
Management of liquid resources and financing
Financing 409 (76) 153
Equity 29 -
_______ _______ _______
(Decrease) / Increase in cash in the year (277) 342 153
_______ _______ _______
Six months Six months Year to
to 30 June to 30 June 31 Dec
2003 2002 2002
#'000 #'000 #'000
_______ _______ _______
Reconciliation of net cash flow to movement in net
debt
(Decrease) / Increase in cash in the year (277) 342 153
Cash (inflow) / outflow from movement in debt (409) 76 (153)
_______ _______ _______
Movement in net debt (686) 418 0
Opening net debt (2,468) (2,467) (2,468)
_______ _______ _______
Closing net debt (3,154) (2,049) (2,468)
_______ _______ _______
Notes
1. Basis of preparation of unaudited interim information
The results for the six months ended 30 June 2003 have been reviewed by
MacIntyre Hudson and have been prepared on the basis of the accounting
policies set out in the consolidated financial statements at 31 December
2002. The comparatives for the year ended 31 December 2002 have been
extracted from the audited consolidated financial statements for that
period.
The audited consolidated financial statements for the year ended 31
December 2002 have been filed with the Registrar of Companies and include
an unqualified audit report. The comparatives included in this report do
not constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985.
2. Dividends
The board has declared an interim dividend of 3.30p (2002: 3.00p) per
ordinary share, payable on 21 November 2003 to shareholders on the register
on 10 October 2003.
3. Earnings per ordinary share
The calculation of earnings per share for the six months ended 30 June 2003
is based upon a profit of #541,000 (2002: #496,000) and the average number
of ordinary 10p shares in issue of 4,636,831 (2002: 4,623,581). The group
considers that the additional disclosure of the adjusted earnings per share
before the effect of amortisation more truly reflects its operational
performance.
4. Interim report
Copies of the interim report for the six months ended 30 June 2003 will be
sent to shareholders on 22 October 2003. Further copies will be available
from the Company Secretary, Solitaire Group Plc, Lynwood House, 10 Victors
Way, Barnet, Hertfordshire, EN5 5TZ and at the group's website,
www.solitairegroup.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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