RNS No 8811m
LONDON & METROPOLITAN PLC
31st October 1997
LONDON & METROPOLITAN PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 1997
CHAIRMAN'S STATEMENT
London & Metropolitan is pleased to announce a return to profitability with
profits before taxation for the six months ended 30 June 1997 of #5.76
million, compared with a loss before taxation of #2.18 million in the
corresponding period in 1996.
The positive impact of the Financial Restructuring, which was signed and
announced on 12 May 1997, is fully reflected in these results which,
therefore, should not be taken as indicative of the year as a whole. The
results include the write back of losses taken in prior years of #4.97 million
and the successful settlement of an action against a former client for breach
of contract. However, notwithstanding those non-recurring items, the return
to operating profitability was a significant achievement.
Sales in the half-year totalled #17.44 million, as the debt reduction
programme proceeded to plan, with a total of ten properties sold at or above
book value. Net debt was reduced by #9.2 million to #10.6 million in the six
months ended 30 June and by a further #4.0 million after the end of the
period, from the proceeds of a sale contracted in the first six months.
Shareholder's equity improved substantially in the first half-year, both from
earnings and also from the conversion of #15.46 million of debt into one
ordinary share in the Company. Overall, the deficit on Shareholders' Funds as
at 30 June 1997 fell to #0.19 million, from #21.4 million at 31 December 1996.
The Group continues to progress projects outside the debt reduction programme.
At Bicester Park, the 18 hectare distribution development being managed by the
Group, construction of a 8,547 m2 warehouse building was successfully
completed. The building had earlier been pre-let to Bibby Distribution and
pre-sold to BICC Group Pension Fund. In May, the joint-venture project on 8
hectares at Emersons Green, Bristol, obtained as part of a larger scheme,
a resolution to grant planning consent for a Business and Science Park.
The Value Retail factory outlet consortium, of which the Group is a member,
continues to move forward with three further European opportunities secured
and with a number of other projects under negotiation in mainland Europe.
DIVIDEND
The financial position of the Company continues to prevent the payment of a
dividend and shareholders should not expect to receive dividends for the
foreseeable future.
PROSPECTS
Since the half-year, the debt reduction programme has progressed successfully
and has been completed within forecast. As a result, the repayment date of
the Group's residual bank borrowings of #2.2 million has been extended to May
2004 and the lender's recourse restricted to the realisation of certain of the
Group's assets.
A number of new property development opportunities continue to be actively
pursued and, as announced recently, the Group has entered into an option to
purchase 73 hectares of land adjacent to Junction 36 of the M4 at Bridgend,
Wales. The site has planning permission for 21,000 m2 of retail development
plus other leisure uses. Another option has also been secured to create a
4,500 m2 headquarters office building in Paseo de la Castellana, a sought
after office location in Madrid.
Your Board believes that, in the current positive market environment, more
opportunities such as these can be converted into secured projects, to form a
stable trading base for the Group and, thereby, allow time for the prospective
value of the retained assets to mature. Trading results, and the future
financial condition of the Group, will depend to a material extent on the
level of success achieved in pursuing this strategy.
C.I.K. Harris Buchanan House
Chairman and Managing Director 3 St James's Square
31 October 1997 London SW1Y 4JU
Enquiries: Christopher Harris, Chairman and Managing Director/
John Aiton, Finance Director
Tel: 0171 925 2383
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 30 June 1997
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
Note 1997 1996 1996
#000 #000 #000
TURNOVER
- Continuing Operations 17,441 1,516 3,628
---------- ---------- ----------
Cost of Sales
- Exceptional items - - 1,261
- Other cost of sales (14,024) (1,097) (2,939)
---------- ---------- ----------
(14,024) (1,097) (1,678)
---------- ---------- ----------
GROSS PROFIT 3,417 419 1,950
Administrative Expenses (1,517) (1,369) (2,761)
---------- ---------- ----------
OPERATING PROFIT/(LOSS)
- Continuing Operations 1,900 (950) (811)
Write back of prior years'
losses 2 4,975 - -
---------- ---------- ----------
PROFIT/(LOSS) AFTER
WRITE BACK OF PRIOR YEARS' LOSSES 6,875 (950) (811)
Interest receivable and similar income 92 95 201
Interest payable and similar charges (1,207) (1,325) (2,709)
---------- ---------- ----------
PROFIT/(LOSS) ON ORDINARY
ACTIVITIES BEFORE TAXATION 5,760 (2,180) (3,319)
Taxation - - -
--------- --------- ---------
PROFIT/(LOSS) FOR THE PERIOD 5,760 (2,180) (3,319)
====== ====== ======
Earnings/(loss) per ordinary
share 3 12.1p (4.6)p (7.0)p
STATEMENT OF TOTAL RECOGNISED
GAINS AND LOSSES
for the six months ended 30 June 1997
PROFIT/(LOSS) FOR THE PERIOD 5,760 (2,180) (3,319)
FOREIGN EXCHANGE TRANSLATION
DIFFERENCES ON FOREIGN CURRENCY
NET INVESTMENT IN SUBSIDIARIES (6) 9 (9)
---------- ----------- ---------
TOTAL RECOGNISED GAINS AND LOSSES 5,754 (2,171) (3,328)
FOR THE PERIOD ====== ====== ======
CONSOLIDATED BALANCE SHEET
as at 30 June 1997 Unaudited Unaudited Audited
30 June 30 June 31 December
Note 1997 1996 1996
#000 #000 #000
FIXED ASSETS
Tangible assets
Investment properties - 13,825 -
Other fixed assets 64 78 72
---------- ---------- ----------
64 13,903 72
Investments
Other investments 1,106 1,421 1,104
---------- ---------- ----------
1,170 15,324 1,176
---------- ---------- ----------
CURRENT ASSETS
Properties held for sale 6,302 - 18,253
Developments in progress 450 5,240 270
Debtors 5,372 3,473 1,513
Cash at bank and in hand 204 3,098 5,182
---------- ---------- ----------
12,328 11,811 25,218
---------- ---------- ----------
CREDITORS: AMOUNTS FALLING DUE
WITHIN ONE YEAR
Bank loans 8,854 12,885 14,167
Other creditors 2,895 2,699 2,766
---------- ---------- ----------
11,749 15,584 16,933
---------- ---------- ----------
NET CURRENT ASSETS/(LIABILITIES) 579 (3,773) 8,285
---------- ---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 1,749 11,551 9,461
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR (1,940) (25,312) (25,888)
---------- ----------- ---------
(191) (13,761) (16,427)
====== ====== ======
CAPITAL AND RESERVES/(DEFICIT)
Called up share capital 4 2,388 2,388 2,388
Share premium account 4 15,457 - -
Profit and loss account deficit 4 (18,036) (22,633) (23,790)
----------- ---------- ---------
Equity shareholders' deficit (191) (20,245) (21,402)
Non equity minority interests - 6,484 4,975
----------- ---------- ---------
(191) (13,761) (16,427)
====== ====== ======
NOTES TO THE ACCOUNTS
for the six months ended 30 June 1997
1. GOING CONCERN
On the basis of the working capital projections which have been prepared
for the Group's business, the Directors anticipate that the Group will be
able to finance its short-term working capital needs. Consequently, the
Directors consider that it is appropriate for the financial statements for
the six months ended 30 June 1997 to be prepared on a going concern basis.
2. WRITE BACK OF PRIOR YEARS' LOSSES
The write back of prior years' losses has arisen as a result of the
acquisition, for nominal consideration of non-equity minority interests
represented by all of the issued preference shares of two subsidiary
companies. This was agreed as part of the Financial Restructuring.
3. EARNINGS/(LOSS) PER ORDINARY SHARE
Earnings/(loss) per ordinary share are based on:
Unaudited Unaudited Audited
30 June 30 June 31 December
1997 1996 1996
Average number of ordinary shares
in issue during the period 47,747,588 47,747,588 47,747,588
------------ ---------- --------
Profit/(loss) attributable to
shareholders #5,759,943 #(2,180,107) #(3,318,881)
------------ ---------- --------
4. EQUITY SHAREHOLDERS' FUNDS/(DEFICIT)
Called up Share Profit Total
share premium and loss
capital account account
#000 #000 #000 #000
At 1 January 1997 2,388 - (23,790) (21,402)
Ordinary shares issued
during the period - 15,457 - 15,457
Retained profit for the period - - 5,760 5,760
Other recognised gains and losses
for the period - - (6) (6)
---------- ---------- ---------- ----------
At 30 June 1997 2,388 15,457 (18,036) (191)
---------- ---------- ---------- ----------
NOTES TO THE ACCOUNTS
for the six months ended 30 June 1997
5. GENERAL
The results for the six months ended 30 June 1997 are unaudited, although
the auditors have conducted a review, detailed on page 7.
The financial information for the year ended 31 December 1996, as shown in
this Interim Report, is an abridged version of the Company's 1996 financial
statements and does not comprise full statutory financial statements within
the meaning of Section 240 of the Companies Act 1985 (as amended). Full
financial statements for that year have been filed with the Registrar of
Companies.
The financial statements for the year ended 31 December 1996 were reported
on by the auditors, Deloitte & Touche. In their report the auditors gave
an unqualified opinion.
The auditors made reference to the fact that in forming their opinion they
had considered the adequacy of disclosures in the financial statements
concerning the availability of working capital in order for the Group and
the Company to meet their liabilities as they fall due.
The auditors stated that, at the time, the Directors expected to shortly
conclude their discussions with the Group's bankers, concerning the future
financing of the Group and, in particular, the provision of a working
capital facility, in a way which enabled the Group to continue to trade and
develop its business in the long-term. Following the issue of the
financial statements for the year ended 31 December 1996, the Directors
announced the Financial Restructuring on 12 May 1997.
The financial statements did not include any adjustments that would result
from a failure to obtain adequate working capital facilities. The
auditors' opinion was not qualified in this respect.
A copy of the Interim Report is to be sent to all shareholders and will
also be available at the Company's Registered Office, Buchanan House, 3 St
James's Square, London SW1Y 4JU.
AUDITORS' STATEMENT
REVIEW REPORT BY THE AUDITORS TO LONDON & METROPOLITAN PLC
We have reviewed the interim financial information for the six months ended 30
June 1997 set out on pages 3 to 6 which is the responsibility of, and has been
approved by, the Directors. Our responsibility is to report on the results of
our review.
Our review was carried out having regard to the Bulletin Review of Interim
Financial Information, issued by the Auditing Practices Board. This review
consisted principally of applying analytical procedures to the underlying
financial data, assessing whether accounting policies have been consistently
applied, and making enquiries of Group management responsible for financial
and accounting matters. The review excluded audit procedures such as tests of
controls and verification of assets and liabilities, and was therefore
substantially less in scope than an audit performed in accordance with
Auditing Standards. Accordingly we do not express an audit opinion on the
interim financial information.
Fundamental Uncertainty
We have considered the adequacy of the disclosure made in Note 1 concerning
the availability of working capital in order for the Group and Company to meet
their liabilities as they fall due.
There remains a fundamental uncertainty about the Group's ability to continue
as a going concern. The financial statements do not include any adjustments
that would result from a failure to obtain adequate working capital
facilities. Our opinion is not qualified in this respect.
On the basis of our review:
in our opinion the interim financial information has been prepared using
accounting policies consistent with those adopted by London & Metropolitan PLC
in its financial statements for the year ended 31 December 1996; and we are
not aware of any material modifications that should be made to the interim
financial information as presented.
DELOITTE & TOUCHE
Chartered Accountants
Hill House, 1 Little New Street, London EC4A 3TR
31 October 1997
END
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