TIDMDBAY
RNS Number : 2207P
Douglasbay Capital PLC
30 September 2011
September 30(th) , 2011
DouglasBay Capital plc
("DouglasBay", "the Group" or "the Company")
Unaudited Interim Results for the period to 30 June 2011
DouglasBay Capital plc (AIM: DBAY), the active value investment
company, today announces unaudited interim results for the period
to 30 June 2011.
Highlights
-- GBP197.5m returned to shareholders via a share buy-back
-- Completion of the sale of TDG (announced in November 2010)
for GBP208m, generating an Internal Rate of Return of over 30%
-- Significant progress in realising value from our real estate
holdings with two properties sold in the first half of the year
-- The Group has net cash of GBP15.1m and liquid investments of
GBP1.0m as at 30th June 2011; cash position will further improve
following the pending sale of further real estate assets
-- In-depth assessment of potential new Majority Investments
on-going
For further information please visit www.douglasbaycap.com or
contact:
DouglasBay Capital plc Peel Hunt LLP ((Nominated
Adviser & Broker)
Alex Paiusco, Chief Executive Guy Wiehahn
Tel: 01624 690900 Tel: 020 7418 8893
Chairman's Statement - Interim Statements period ended 30th June
2011
With the completion of the disposal of our major investment in
the logistics company, TDG, the first half of 2011 has been a
rewarding period for DouglasBay. In two and a half years since
inception in 2008, we have demonstrated an ability to deliver
significant value to shareholders from our investment in TDG and
against a backdrop of the most challenging economic conditions in
recent history. This interim report provides commentary on the TDG
investment and its performance, the subsequent return of capital to
shareholders following the business sale, further developments
within our property group and our intentions moving forward.
TDG, our first major investment, has been a success story for
DouglasBay. Acquired at the time of the demise of Lehman Brothers,
the timing could not have appeared worse. However, with the support
of a strong TDG senior management team, DouglasBay demonstrated its
ability to act swiftly and decisively leaving the business in an
ideal position to be taken to the next stage in its lifecycle under
the ownership of a major industry player.
A number of parties expressed an interest in TDG, but the
DouglasBay board felt that Norbert Dentressangle offered the best
options in terms of strategic fit and support for the future
development of the business. To that end we agreed a sale to
Norbert Dentressangle in November 2010 and completed the disposal
in March 2011, following the approval of the European
Commission.
Following the disposal of TDG, and in line with the stated
objectives of the company, the DouglasBay board approved a share
buy-back scheme that returned GBP197.5m to its shareholders.
DouglasBay has also made significant progress in liquidating its
real estate portfolio, with five of the six ex-TDG properties held
in DouglasBay Property Group having now been either sold or under
offer.
Our minority investment in a social media start-up is at an
interesting stage of its development.
The prevailing, volatile market conditions continue to be a
challenge, but also create a number of interesting investment
opportunities which we are researching.
Finally, I would like to thank Geoff Bicknell for his sizeable
contribution to DouglasBay in his role of Chief Financial Officer
since joining the board in 2009. Geoff has decided to step down
from the position with effect from the end of this month to pursue
a new opportunity in a technology start-up business in the United
States, but I am pleased to say that he will continue to work with
us in a Non-executive Director role. Mike Haxby, our Chief Risk
Officer will take his place as Chief Financial Officer, and Stephen
Hardie will become Deputy Chief Financial Officer.
David Panter
Non-executive Chairman
29 September 2011
CEO's Statement - Interim Statements period ended 30th June
2011
I am delighted to report a six month period of further
considerable progress for DouglasBay.
TDG disposal
TDG, a GBP700m turnover pan-European logistics company, was
taken private by DouglasBay in October 2008 at a time of
significant economic turmoil. During 2009 and in the early part of
2010, DouglasBay applied its active value investing approach,
working with management to rapidly restructure and reorganise the
business, substantially improving its efficiency and profitability.
We agreed to sell TDG to a major industry player, Norbert
Dentressangle, in November 2010 and completed the sale in March
2011 for GBP208m.
Return of capital to shareholders
DouglasBay's foremost objective is to create value and generate
long-term returns for our shareholders. These returns will be
derived from a combination of dividends from cash generative
businesses we acquire, capital gains from any increase in our share
price and one-off distributions from the sale of investments.
In line with our investment policy, following the disposal of
TDG, we returned GBP197.5m to shareholders via a tender offer for
89% of ordinary shares at an offer price of 16.35 pence per
share.
Outlook
Following the return of capital to shareholders, and after a
further two property disposals in the period, the Group is in a
cash positive position of GBP15.1m at 30(th) June 2011 and
additionally has liquid investment holdings totalling approximately
GBP1.0m.
This net cash position will be enhanced further as a result of
additional sales from our real estate portfolio in the second half
of the year.
Our minority investment in a US social media business, increased
to GBP1.3m (2010: GBP0.3m) in the first half of the year.
The process is now well underway with regard to the search for
new investment opportunities which will be funded from available
resources and if required, with underwriting support from our major
shareholder, Laxey Partners. We outlined our investment strategy in
depth in our 2010 annual report.
Summary
We are extremely proud and delighted with the achievements
DouglasBay has made since its inception. Our aim is to further
develop our active value approach to investing and we believe that
the current economic environment provides a number of suitable
opportunities to do so successfully. With that thought in mind, our
priorities remain unchanged to those we outlined in our 2010 annual
report, namely to identify and secure attractive investment
opportunities that meet our active value criteria, and will in the
medium term create value for our shareholders.
I would also like to thank Geoff Bicknell for the major
contribution he has made to DouglasBay and wish him every success
with the new opportunity he has decided to take up in the United
States.
Alex Paiusco
Chief Executive Officer
29 September 2011
Financial Review - Interim Statements period ended 30th June
2011
Introduction
This report covering the period from 1 January to 30 June 2011
is our third interim report since our listing on the AIM market in
2008. Given the disposal of TDG on 28 March 2011, this reporting
period contains only three months of TDG trading, so meaningful
comparison with the previous half year where we held the investment
for the full six months, is limited.
The DouglasBay Group accounts as presented containing the TDG
results to the point of its disposal are prepared in accordance
with the requirements of the IAS34 "Interim Financial Reporting"
standard as adopted by the EU.
TDG
DouglasBay moved quickly after taking TDG private in
implementing a variety of restructuring and revitalisation plans to
enhance business performance. The combination of re-aligned
strategic focus, efficiency improvements and cost-saving measures
resulted in stronger financial performance in 2010 as reported in
detail within our last annual report.
Having delivered value creation throughout the previous two
years with our operational improvements, we were then able to
realise our investment through the sale of TDG to Norbert
Dentressangle. The sale of TDG was completed in March 2011 with
proceeds of GBP208m.
Return of capital to shareholders
As highlighted in the CEO's statement, the share buy-back offer
was almost fully subscribed and resulted in GBP197.5m cash being
returned to shareholders in May 2011.
Group Financing
At the half year the Group was in a cash positive position of
GBP15.1m with additional liquid investments totalling approximately
GBP1.0m.
DouglasBay Property Group (DBPG)
DBPG was formed in the latter part of 2009 following the
transfers from TDG of six properties. Since then, DBPG has actively
managed the portfolio, maximising rental income and sale proceeds.
In early 2011 we successfully realised the sales of another two
sites, having already disposed of one in 2010. Since 30(th) June
this year we have completed the sale of one additional property and
exchanged contracts on another, leaving only one remaining property
from the original portfolio. We will have generated total net
proceeds in excess of GBP27m from the five properties sold or under
offer to date, an important element of the value creation plan
stemming from the investment in TDG.
Minority Investments
Despite the ongoing uncertain market conditions, during the
first half of 2011 we made significant progress in liquidating the
remaining minority investments of the original TLIT portfolio with
the sale of two further holdings for net cash proceeds of GBP0.8m.
As at 30 June 2011 the remaining TLIT investment portfolio was
valued at GBP0.9m (2010: GBP2.1m) which primarily comprises
holdings in quoted companies.
During the period we increased our investment in a US based
social media business by a further GBP1m, acquiring a 21% stake at
a total investment cost of GBP1.3m. This investment is held within
our recently formed subsidiary, DouglasBay Media Holdings.
Summary
It has been a successful six months for DouglasBay having
concluded the sale of TDG and returned capital to our shareholders.
The closing of the TDG sale serves as a blueprint for our active
value investment approach which can be rolled out to new investment
opportunities in the near future.
With effect from 30(th) September I am stepping down from my
role as CFO. It has been a very real pleasure to have worked with
the DouglasBay team and to have contributed to their undoubted
success. I am sure they will build on this in future deals and I
look forward to supporting them as a Non-executive Director. I wish
all the best to Mike Haxby who will, along with his
responsibilities as Chief Risk Officer, also take on the task of
Chief Financial Officer. I would also like to congratulate Stephen
Hardie for his new role as Deputy Chief Financial Officer of
DouglasBay.
Geoff Bicknell
Chief Financial Officer
29 September 2011
Condensed Consolidated Income Statement
For the period ended 30 June 2011
Continuing Discontinued Continuing Discontinued
operations
operations operations(a) Total operations (a) Total
2011 2011 2011 2010 2010 2010
Notes GBPm GBPm GBPm GBPm GBPm GBPm
Revenue - 170.8 (b) 170.8 - 340.0 340.0
Operating
expenses (1.5) (167.0) (168.5) (1.6) (327.4) (329.0)
----------- -------------- -------- ----------- ------------- --------
Underlying
operating
profit/(loss) 4 (1.5) 3.8 2.3 (1.6) 12.6 11.0
Amortisation
of acquisition
intangibles 5 - (0.7) (0.7) - (1.5) (1.5)
Rationalisation
costs 5 - (0.3) (0.3) - (1.6) (1.6)
Impairment of
fixed assets 5 - - - - (2.5) (2.5)
(Loss)/Gain on
sale of
properties 5 - (0.4) (0.4) - 3.3 3.3
Profit on sale
of subsidiaries 5 95.0 - 95.0 - - -
Site exit costs 5 - - - - (1.6) (1.6)
Dilapidations &
onerous leases 5 - (2.8) (2.8) - 1.1 1.1
Operating
profit/(loss) 93.5 (0.4) 93.1 (1.6) 9.8 8.2
Finance costs 7 (0.1) (1.3) (1.4) - (14.0) (14.0)
Finance income 7 - - - 10.4 - 10.4
Profit/(loss)
before tax 93.4 (1.7) 91.7 8.8 (4.2) 4.6
Income tax
income 8 - - - - 1.4 1.4
Profit/(loss)
for the period 93.4 (1.7) 91.7 8.8 (2.8) 6.0
----------- -------------- -------- ----------- ------------- --------
Attributable
to:
Profit/(Loss)
attributable to
equity holders
of the parent 93.4 (1.7) 91.7 8.8 (2.9) 5.9
Profit attributable
to non-controlling
interests - - - - 0.1 0.1
93.4 (1.7) 91.7 8.8 (2.8) 6.0
----------- -------------- -------- ----------- ------------- --------
Earnings (pence)
per share
Basic & fully
diluted
earnings/(loss)
per share 9 9.48p (0.18p) 9.30p 0.66p (0.22p) 0.44p
----------- -------------- -------- ----------- ------------- --------
Underlying
earnings
/(loss) per
share 9 (0.16p) 0.17p 0.01p 0.66p (0.08p) 0.58p
----------- -------------- -------- ----------- ------------- --------
(a) Detailed information related to the Laxey Logistics Group
and Property Group discontinued operations is disclosed in note
12
(b) TDG was sold on March 28(th) 2011. Only 3 months trading up
to the date of the sale are therefore included in the consolidated
income statement
Condensed Consolidated Statement of Comprehensive income
For the period ended 30 June 2011
2011 2010
GBPm GBPm
Profit for the period 91.7 6.0
Other comprehensive income
Currency translation adjustments 1.1 0.2
Actuarial loss on defined benefit
schemes - (16.4)
Other movements - disposal of businesses (1.7) -
Income tax income on other comprehensive
income - 3.1
Other comprehensive loss for the
period, net of income tax (0.6) (13.1)
------ -------
Total comprehensive income/(loss)
for the period 91.1 (7.1)
------ -------
Attributable to:
Equity holders of the parent 91.1 (7.0)
Non-controlling interest - (0.1)
------ -------
91.1 (7.1)
------ -------
Condensed Consolidated Statement of Changes in Equity
For the period ended 30 June 2011
Attributable to equity
holders of the parent
Hedging
Issued and Non-
share Share translation Retained controlling Total
capital premium reserve earnings Total interest Equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 1
January 2011 64.5 63.5 0.2 (6.1) 122.1 0.7 122.8
-------- -------- ------------ --------- -------- ------------ --------
Currency
translation
differences - - 1.5 (0.4) 1.1 - 1.1
Disposal of
subsidiaries - - (1.7) - (1.7) (0.4) (2.1)
Other
comprehensive
loss for the
period - - (0.2) (0.4) (0.6) (0.4) (1.0)
-------- -------- ------------ --------- -------- ------------ --------
Profit for the
period - - - 91.7 91.7 - 91.7
Issue of
shares 4.3 4.3 - - 8.6 - 8.6
Purchase of
own shares (60.4) (67.8) - (69.3) (197.5) - (197.5)
Balance at 30
June 2011 8.4 - - 15.9 24.3 0.3 24.6
-------- -------- ------------ --------- -------- ------------ --------
Attributable to equity
holders of the parent
Hedging
Issued and Non-
share Share Translation Retained controlling Total
capital premium Reserve earnings Total interest Equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 1
January 2010 66.9 66.9 0.3 (1.2) 132.9 0.6 133.5
-------- -------- ------------ --------- -------- ------------- --------
Currency
translation
differences - - 0.2 0.2 0.4 - 0.4
Actuarial
gains on
defined
benefit
scheme - - - (16.4) (16.4) - (16.4)
Tax on items
recognised in
other
comprehensive
income - - - 3.1 3.1 - 3.1
Other
comprehensive
profit/(loss)
for the
period - - 0.2 (13.1) (12.9) - (12.9)
-------- -------- ------------ --------- -------- ------------- --------
Profit for the
period - - - 6.0 6.0 (0.1) 5.9
Balance at 30
June 2010 66.9 66.9 0.5 (8.3) 126.0 0.5 126.5
-------- -------- ------------ --------- -------- ------------- --------
Condensed Consolidated Statement of Financial Position
For the period ended 30 June 2011
As As
at at
30 31
June December
2011 2010
Notes GBPm GBPm
Assets
Non current assets
Property, plant and equipment 10 2.3 5.3
Investments 11 2.5 2.4
4.8 7.7
Current assets
Held-for-sale assets 12.16 4.9 321.7
Trade and other receivables 0.4 3.2
Cash and cash equivalents 13 15.1 1.6
20.4 326.5
------ ----------
Total assets 25.2 334.2
------ ----------
Non current liabilities
Interest bearing borrowings 14 - 14.3
- (14.3)
Current liabilities
Interest bearing borrowings 14 - 2.1
Trade and other payables 0.6 3.0
Held-for-sale liabilities 12 - 192.0
(0.6) (197.1)
Total liabilities (0.6) (211.4)
Net assets 24.6 122.8
------ ----------
Equity
Issued capital and reserves
Issued share capital 15 8.4 64.5
Share premium - 63.5
Hedging & translation reserve - 0.2
Retained earnings 15.9 (6.1)
------ ----------
Equity attributable to owners
of the Company 24.3 122.1
Non-controlling interests 0.3 0.7
Total equity 24.6 122.8
------ ----------
Condensed Consolidated Statement of Cash Flows
For the period ended 30 June 2011
6 months 6 months
to 30 to 30
June June
2011 2010
Notes GBPm GBPm
Cash flows from operating
activities (page 10) 11.8 16.7
Cash flows used in other
operating activities
Interest paid (1.5) (4.9)
Income taxes paid - (0.3)
Cash flows used in other
operating activities (1.5) (5.2)
--------- ---------
Cash flows from investing
activities
Payments to acquire property,
plant and equipment (1.6) (3.5)
Receipts from sale of investments
(net of costs) 206.3 -
Receipts from sale of property,
plant and equipment 19.8 43.0
Deferred consideration from
the purchase of businesses - 0.1
Payments to acquire investments (1.1) (0.2)
Interest received - 0.3
Cash flows from investing
activities 223.4 39.7
--------- ---------
Cash flows from financing
activities
Payments to acquire Ordinary
shares (197.5) -
Repayment of secured borrowings (41.3) (31.9)
Repayment of obligations
under finance leases - 0.1
Repayment of loan to ultimate
controlling party - (5.0)
Dividends paid to non-controlling
interests (0.3) (0.2)
Cash flows used in financing
activities (239.1) (37.0)
--------- ---------
Net (decrease)/increase
in cash and cash equivalents (5.4) 14.2
Cash and cash equivalents
as at 1 January 20.2 16.4
Effect of exchange rate
changes 0.3 (0.3)
Cash and cash equivalents
as at 30 June 13 15.1 30.3
--------- ---------
Condensed Consolidated Statement of Cash Flows (continued)
For the period ended 30 June 2011
Reconciliation of net profit from operations to net cash from
operating activities
6 months 6 months
to 30 to 30
June June
2011 2010
Notes GBPm GBPm
Cash flows from operating
activities
Net profit 91.7 6.0
Adjustments to reconcile to
profit from operations
Net interest expense 7 1.4 3.6
Income tax income 8 - (1.4)
Adjustments to reconcile profit
from operations 1.4 2.2
--------- ---------
Non-cash adjustments
Depreciation of property,
plant and equipment 2.3 5.8
Amortisation of acquisition
& other intangible assets 1.3 2.8
Impairment of property 5 - 2.5
Impairment of plant and equipment - 0.4
Dilapidations & onerous leases 5 2.8 -
Profit on the sale of investments 5 (95.0) -
Loss arising on the revaluation
of TLIT investments 0.4 -
Unrealised losses on foreign
currency exchange (0.1) (0.3)
Gain on sale of properties,
plant and equipment 5 0.3 (3.4)
Release of investment grants - (0.1)
Non-cash adjustments (88.0) 7.7
--------- ---------
Decrease in working capital
Increase in trade and other
receivables (12.1) (12.0)
Increase in trade and other
payables 20.1 17.4
Decrease in working capital 8.0 5.4
--------- ---------
Pension deficit funding additional
employer contributions (1.3) (4.6)
Cash flows from operating
activities (page 9) 11.8 16.7
--------- ---------
Notes on the condensed consolidated financial statements
1. Basis of preparation
These unaudited interim condensed consolidated financial
statements do not constitute statutory accounts
and have been prepared on a basis consistent with
the Group's accounting policies as set out in the
2010 Annual Report and Accounts.
These interim condensed consolidated financial statements
have been prepared in accordance with AIM Listing
Rules and in accordance with IAS 34 "Interim Financial
Reporting". They do not include all of the information
required for full annual financial statements and
should be read in conjunction with the consolidated
financial statements for the year ended 31 December
2010.
These financial statements have been prepared on
a going concern basis and the Directors consider
that the Group will be able to meet its liabilities
as they fall due for the foreseeable future. The
Directors have prepared base case and sensitised
cash flow projections for the period to September
2012 which are based on certain assumptions and
show the Group is capable of operating within the
existing financing arrangements.
These interim condensed consolidated financial statements
have been prepared by applying the accounting policies
and presentation that were applied in the preparation
of the Group's consolidated financial statements
for the year ended 31 December 2010, which were
prepared in accordance with International Financial
Reporting Standards.
The Directors consider the underlying profit and underlying
earnings per share provide additional meaningful information
on underlying performance to shareholders. The terms
"underlying profit" and "exceptional item" are not defined
terms under IFRS and may not be comparable with similarly
titled profit measures reported by other companies.
Underlying operating profit is not intended to be a
substitute for, or superior to, GAAP measurements of profit.
The term "underlying" refers to the relevant measure being
reported excluding exceptional items, and amortisation of
acquisition intangibles. Exceptional items are items which
are both material and non-recurring and are presented as
exceptional items within their relevant consolidated income
statement category. The separate reporting of exceptional
items helps provide a better indication of the Group's
underlying business performance. Events which may give rise
to the classification of items as exceptional include the
restructuring of the businesses, the integration of new
businesses, gains or losses on the disposal of businesses
and asset impairments and corporate costs.
2. Key accounting policies
Currency
Translation
a) Functional and
presentational currency
Items included in the financial statements of
each of the Group's entities are measured using
the functional currency, which is the local currency
in which the entity operates. The consolidated
financial statements are presented in Sterling,
which is the Company's functional and presentation
currency.
b) Transactions
and balances
Transactions in foreign currencies are translated
into functional currency at the rates of exchange
prevailing on the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement
of these transactions and from the translation
of monetary assets and liabilities denominated
in foreign currencies to functional currency at
rates prevailing at the end of reporting period
are recognised in profit or loss.
At each end of reporting period, non-monetary
assets and liabilities that are measured in terms
of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction.
Non-monetary assets and liabilities that are carried
at fair value that are denominated in foreign
currencies are translated at the rates prevailing
when the fair value was determined.
c) Group
companies
On consolidation, the assets and liabilities of
the Group's overseas operations are translated
at exchange rates prevailing at the end of reporting
period. Income and expense items are translated
at the average exchange rates for the period.
Foreign exchanges difference arising on retranslation
are recognised in other comprehensive income and
transferred to the Group's translation reserve.
Such translation differences are recognised in
the profit or loss in the period in which the
operation is disposed of.
Exchange differences arising from the translation
of the net investment in foreign operations, and
of related hedges are taken directly to the translation
reserve. Such translation differences are recognised
in profit or loss in the period in which the operation
is disposed of.
Goodwill and fair value adjustments arising on
the acquisition of a foreign entity are treated
as assets and liabilities of the foreign entity
and are translated at the closing rate.
Underlying operating
profit
Underlying operating profit is separately disclosed
on the face of the income statement. This is profit
before net finance costs, share of loss of associates
and tax excluding items which the Directors consider
to be material or non-recurring in nature. These
items were amortisation of acquisition intangibles,
rationalisation costs, impairment of current and
non-current assets where the impairment is considered
exceptional due to its size, profit on sale of
subsidiaries, profit/loss on sale of properties,
site exit costs, and dilapidation and onerous
lease provisions considered to be exceptional
due to the size of the expected costs or releases.
These items are collectively referred to as "exceptional
items".
The Directors believe that underlying operating
profit provides an important measure of the underlying
earnings performance of the Group.
Underlying earnings
per share
Underlying earnings per share is calculated as
underlying profit, less net finance charges, share
of loss of associates, profit attributable to
minority interests and corporation tax adjusted
for corporation tax on exceptional items, divided
by the weighted average number of Ordinary Shares
in issue during the period. The Directors believe
that "underlying earnings per share" provides
an important measure of the underlying earnings
performance of the Group.
Investments
All investments are classified as 'fair value
through profit or loss'. Investments are initially
recognised at cost being the fair value of consideration
given.
After initial recognition investments are measured
at fair value, with unrealised gains and losses
on investments recognised in profit or loss and
allocated to capital. Realised gains and losses
on investments sold are calculated as the difference
between sale proceeds and cost.
The entity manages and evaluates the performance
of these investments on a fair value basis in
accordance with its investment strategy.
Unquoted investments are valued by the Directors,
at fair value based on latest dealing prices,
stockbroker valuations or other information, as
appropriate. This valuation incorporates all factors
that market participants would consider in setting
a price.
Quoted investments are valued at closing bid market
prices or last traded price where bid prices are
not regularly and readily available.
Contracts for difference are synthetic equities
and the unrealised gain or loss is disclosed with
reference to the investments' underlying bid prices.
The Company is taking advantage of IAS 28 which
enables it to treat holdings over 20% of a company's
share capital as a normal investment and not as
an associate.
IFRS 7 requires the Company to analyse financial
instruments carried at fair value, by valuation
method. The different levels have been defined
as follows:
- Level 1: quoted prices (unadjusted)
in active markets for identical assets
or liabilities.
- Level 2: inputs other than quoted prices included
within Level 1 that are observable for the asset
or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability
that are not based on observable market data
(unobservable inputs)
Discontinued operations and held
for sale assets & liabilities
A discontinued operation is a component of the
Group's business that represents a separate major
line of business or geographical area of operations
that has been disposed of or is held for sale,
or is a subsidiary acquired exclusively with a
view to resale. Classification as a discontinued
operation occurs upon disposal or when the operation
meets the criteria to be classified as available
for sale, if earlier. Results of the discontinued
operation are presented separately on the statement
of comprehensive income where they are considered
by the Directors to be material to the results
of the Group. When an operation is classified
as a discontinued operation and considered to
be material to the results of the Group, the comparative
income statement is re-presented as if the operation
had been discontinued from the start of the comparative
period.
Non-current assets, or disposal groups comprising
assets and liabilities, that are expected to be
recovered primarily through sale rather than through
continuing use, are classified as available for
sale. Immediately before classification as held
for sale, the assets, or components of a disposal
group, are remeasured in accordance with the Group's
accounting policies. Thereafter generally the
assets, or disposal group, are measured at the
lower of their carrying amount and recoverable
amount. Any impairment loss on a disposal group
first is allocated to goodwill, and then to remaining
assets and liabilities on a pro rata basis, except
that no loss is allocated to inventories, financial
assets, deferred tax assets, employee benefit
assets and investment property, which continue
to be measured in accordance with the Group's
accounting policies. Impairment losses on initial
classification as available for sale and subsequent
gains or losses on remeasurement are recognised
in profit or loss. Gains are not recognised in
excess of any cumulative impairment loss.
Cash and cash
equivalents
Cash and cash equivalents comprise cash at bank
and in hand, short term deposits and cash in restricted
accounts.
Bank overdrafts that are repayable on demand and
form an integral part of the Group's cash management
are included as a component of cash and cash equivalents
for the purposes of the consolidated statement
of cash flows.
3. Segmental analysis
As a result of the Group adopting IFRS 8 Operating
Segments the segmental analysis is presented in
line with the information provided to the Chief
Operating Decision Maker ("CODM") in the management
accounts.
An operating segment is a component of the Group
that engages in business activities from which
it may earn revenues and incur expenses, including
revenues and expenses that relate to transactions
with any of the Group's other components. All operating
segments' operating results are reviewed regularly
by the Group's CODM to make decisions about resources
to be allocated to the segment and assess its performance,
and for which discrete financial information is
available.
The Group's primary reporting format is business
segments and its secondary is geographical segments.
The operating businesses are organised and managed
separately according to the markets they serve.
The Group's business segments are organised and
managed separately according to the nature of the
business and its reporting structure within the
Group.
-- TDG - provides specialised B2B
logistics and freight forwarding
services within the UK and Europe;
-- TLIT - the investments held by TLIT,
including minority stakes in quoted
and unquoted companies;
-- DouglasBay Property Group - manages
the investments of a portfolio of UK
properties;
-- Central management - any central costs
held within the parent company, Laxey
Logistics Limited, DouglasBay UK
Limited and DouglasBay Media Holdings
Limited.
Significant reliance is not placed on major customers
as the Group does not receive revenue from any
single customer which amounts to 10% or more of
Group revenues.
Primary segments - business activities
Period ended 30 June 2011
Continuing operations Discontinued operations
Eliminat- Eliminat-
ions ions
Central & Central &
Property manage- adjust- Property manage- adjust-
TLIT Group ment ments* Total TDG** Group ment ments* Total TOTAL
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Gross sales - 0.2 1.1 (1.3) - 170.6 0.3 - (0.1) 170.8 170.8
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Results
Underlying
operating
profit/(loss) (0.4) 0.1 (0.3) (0.9) (1.5) 3.0 0.1 - 0.7 3.8 2.3
Net
exceptional
income/
(expense) - - 95.0 - 95.0 (3.1) 1.3 - (2.4) (4.2) 90.8
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Operating
profit/(loss) (0.4) 0.1 94.7 (0.9) 93.5 (0.1) 1.4 - (1.7) (0.4) 93.1
Net finance
income/(cost) - - 5.8 (5.9) (0.1) 0.2 (0.2) (7.1) 5.8 (1.3) (1.4)
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
(0.4) 0.1 100.5 (6.8) 93.4 0.1 1.2 (7.1) 4.1 (1.7) 91.7
Income tax
income/
(expense) - - - - - - - - - - -
Profit/(loss)
for year (0.4) 0.1 100.5 (6.8) 93.4 0.1 1.2 (7.1) 4.1 (1.7) 91.7
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Assets &
liabilities
Segment
assets 0.9 2.4 17.1 - 20.4 - 4.8 - - 4.8 25.2
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Segment
liabilities - - 0.6 - 0.6 - - - - - 0.6
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Other Segment
information
Depreciation
and
amortisation - - - - - 2.8 - - 0.8 3.6 3.6
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
* Eliminations include all the adjustments arising on
consolidation of the four individual segments TDG, TLIT, Property
Group and Central management for statutory reporting.
** TDG was sold on March 28(th) 2011 to Norbert
Dentressangle
3. Segmental analysis (continued)
Primary segments - business activities
Period ended 30 June 2010
Continuing operations Discontinued operations
Eliminat- Eliminat-
ions ions
Central & Central &
Property manage- adjust- Property manage- adjust-
TLIT Group ment ments* Total TDG** Group ment ments* Total TOTAL
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Gross sales - 0.3 1.5 (1.8) - 340.0 0.9 - (0.9) 340.0 340.0
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------- ------
Results
Underlying
operating
profit/(loss) (0.3) 0.1 0.3 (1.7) (1.6) 10.6 0.7 (0.2) 1.5 12.6 11.0
Net
exceptional
income/
(expense) - - - - - 3.1 - - (5.9) (2.8) (2.8)
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------- ------
Operating
profit/(loss) (0.3) 0.1 0.3 (1.7) (1.6) 13.7 0.7 (0.2) (4.4) 9.8 8.2
Net finance
income/(cost) 0.2 - 10.2 - 10.4 (0.6) (0.4) (13.0) - (14.0) (3.6)
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------- ------
(0.1) 0.1 10.5 (1.7) 8.8 13.1 0.3 (13.2) (4.4) (4.2) 4.6
Income tax
income /
(expense) - - (0.2) 0.2 - 1.4 - - - 1.4 1.4
Profit/(loss)
for period (0.1) 0.1 10.3 (1.5) 8.8 14.5 0.3 (13.2) (4.4) (2.8) 6.0
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------- ------
Assets &
liabilities
Segment
assets 6.5 2.4 381.2 (385.6) 4.5 419.6 25.5 - (79.5) 365.6 370.1
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------- ------
Segment
liabilities 0.4 2.4 267.4 (267.3) 2.9 227.7 25.2 - (12.2) 240.7 243.6
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------- ------
Other Segment
information
Depreciation
and
amortisation - - - - - 7.0 - - 1.6 8.6 8.6
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------- ------
* Eliminations include all the adjustments arising on
consolidation of the four individual segments TDG, TLIT, Property
Group and Central management for statutory reporting.
** TDG was sold on March 28(th) 2011 to Norbert
Dentressangle
Secondary segments - geographical analysis
The group's operations are located in United Kingdom, Spain,
Netherlands, Ireland, Belgium and Other Europe (Germany, Hungary
and Poland). The following table provides an analysis of the
Group's sales by geographic market, irrespective of the origin of
the (goods/services).
6 months
6 months to
to 30 30
June June
2011 2010
Revenue from external customers GBPm GBPm
United Kingdom 127.4 252.6
Spain 15.7 31.0
Netherlands 6.1 14.6
Ireland 11.3 23.2
Belgium 7.9 15.3
Other Europe 2.4 3.3
--------- ---------
Discontinued operations 170.8 340.0
--------- ---------
United Kingdom - -
--------- ---------
Continuing operations - -
--------- ---------
Total revenue for the period 170.8 340.0
--------- ---------
4. Underlying operating profit
Underlying operating profit is stated after charging/(crediting)
the following:
6 months
6 months to
to 30 30
June June
2011 2010
Notes GBPm GBPm
Employee benefits
expense 6 50.1 97.9
--------- ---------
Loss/(profit) on disposal
of plant and equipment - (0.1)
--------- ---------
Depreciation of property,
plant and equipment 2.3 5.8
Amortisation of intangible
assets (software) 0.6 1.3
--------- ---------
Amortisation of government
grants - (0.1)
--------- ---------
5. Exceptional operating (costs)/profits
6 months 6 months
to 30 to 30
June June
2011 2010
GBPm GBPm
Amortisation of acquisition intangibles (0.7) (1.5)
Rationalisation costs (0.3) (1.6)
Impairment of properties - (2.5)
(Loss) / gain on sale of properties (0.4) 3.3
Profit of sale of subsidiaries 95.0 -
Site exit costs - (1.6)
Dilapidations & onerous leases (2.8) 1.1
90.8 (2.8)
--------- ---------
Due to the continued reorganisation of the TDG business during
the period, rationalisation costs of GBP0.3m (2010: GBP1.6m) were
incurred in the UK, Ireland, Netherlands and Spain.
The loss on sale of properties, GBP0.4m (2010: profit GBP3.3m),
arose on the sale of properties held in the UK.
The profit on disposal of subsidiaries of GBP95.0m (2010:
GBPNil) results from the sale of the Laxey Logistics Group on March
28(th) 2011 for GBP208m after various adjustments to Norbert
Dentressangle. Laxey Logistics Group's net assets as at 28 March
2011, the date of disposal, amounted to GBP100.9m.
The site exit costs of GBP1.6m in 2010 related to the exit of
unprofitable operations, totalling GBP0.9m in the UK, GBP0.6m in
Ireland and GBP0.1m in Spain.
In 2011 an onerous lease provision of GBP2.8m was required in
respect of the TDG business in Ireland.
In 2010 dilapidation provision releases of GBP0.8m and onerous
lease provision releases of GBP0.3m relate to prior period
exceptional dilapidation onerous lease provisions no longer
required. In 2009 dilapidation provisions were created in relation
to two UK properties. The Directors considered these costs to be
exceptional due to the size of the provision required.
6. Employee expenses
6 months 6 months
to 30 to 30
June June
2011 2010
GBPm GBPm
Wages and salaries 43.9 88.0
Post employment expense for defined
contribution plans 1.4 0.5
Employee termination benefits 0.1 0.7
Social security costs 4.7 8.7
50.1 97.9
--------- ---------
7. Finance costs/(income)
6 months 6 months
to 30 to 30
June June
2011 2010
GBPm GBPm
Interest payable on loan from
ultimate controlling party - 0.2
Interest payable on finance lease
rental payments 0.1 0.1
Interest expense: secured loans 0.9 2.7
Other finance costs 0.4 0.7
1.4 3.7
Foreign exchange - (0.1)
--------- ---------
1.4 3.6
8. Tax
Components of income tax (income)/expense
6 months 6 months
to 30 to 30
June June
2011 2010
GBPm GBPm
Current income tax expense/(income)
Isle of Man income tax - -
Overseas tax - 2.2
Current income tax expense/(income) - 2.2
Deferred income tax (income)/expense
Isle of Man - -
Overseas deferred tax - (3.6)
Deferred income tax income - (3.6)
---------- ---------
Income tax income recognized
in profit or loss - (1.4)
---------- ---------
Components of income tax recognised in other comprehensive
income
6 months 6 months
to 30 to 30
June June
2011 2010
GBPm GBPm
Deferred income tax (income)/expense
Deferred income tax income on
actuarial loss/(gain) - (3.2)
---------- ---------
9. Earnings per share
The calculation of basic earnings per share as at 30 June 2011
is based on the profit attributable to ordinary shareholders of
GBP91.7m (2010: GBP5.9m) and a weighted average number of ordinary
shares outstanding of 985,681,101 (2010: 1,337,815,633) reflecting
the period over which earnings per share has been calculated 1
January 2011 until 30 June 2011 (2010: 1 January 2010 until 30 June
2010). An alternative underlying earnings per share number is also
set out below, being before any exceptional (profits)/costs plus
related tax, since the Directors consider that this is more
representative of the underlying performance of the Group. No share
options remain outstanding as at 30 June 2011. Share options
outstanding as at 30 June 2010 had no dilutive impact on earnings
per share at that time.
6 months 6 months
to 30 to 30
June June
2011 2010
No. of No. of
shares shares
Weighted average number of
shares for the purposes of
basic and
underlying earnings per
share 985,681,101 1,337,815,633
------------ --------------
2011 2010
GBPm pence GBPm Pence
Profit attributable
to equity holders
of the
parent (Basic
earnings per
share) 91.7 9.30p 5.9 0.44p
Related Related
Expense/ Tax Expense/ Tax
(income) @ 27% (income) @ 28%
GBPm GBPm GBPm GBPm
Add back
exceptional
items net
of related tax
Amortisation
of acquisition
intangibles 0.7 - 1.5 -
Rationalisation
costs 0.3 (0.1) 1.6 (0.4)
Impairment of
properties - - 2.5 (0.6)
Loss/ (gain) on
sale of
properties 0.4 - (3.3) -
Profit on sale
of subsidiaries (95.0) - - -
Site exit costs - - 1.6 (0.3)
Dilapidations &
onerous leases 2.8 (0.7) (1.1) 0.4
(90.8) (0.8) (91.6) (9.29p) 2.8 (0.9) 1.9 0.14p
------- ------ ------- -------- ---------- ------ ------ ------
Underlying
earnings
(underlying
earnings pence
per share) 0.1 0.01p 7.8 0.58p
------- -------- ------ ------
10. Property, plant and equipment
As at As at
30 June 30 June
2011 2010
GBPm GBPm
Land and buildings 7.2 5.3
Transferred to assets available
for sale (4.9) -
2.3 5.3
-------- --------
11. Investments
Notes 2011 2010
GBPm GBPm
At 1 January cost net of
unrealised gains/(losses) 2.4 4.7
Additions 1.2 0.4
Disposals (0.8) (3.2)
Revaluation of investments (0.3) 0.6
Transfers to held-for-sale
assets 12 - (0.1)
------ ------
At 30 June and 31 December 2.5 2.4
------ ------
At 1 January
Cost or valuation 3.3 9.2
Accumulated depreciation
and impairment (0.9) (4.5)
Net carrying amount 2.4 4.7
------ ------
At 30 June
Cost or valuation 3.7 3.3
Accumulated depreciation
and impairment (1.2) (0.9)
Net carrying amount 2.5 2.4
------ ------
Investments mainly include the quoted and unquoted
investments in TLIT and DouglasBay Media Holdings.
The addition of GBP1.2m in the period relates
to the investment made by DouglasBay Media Holdings.
Disposals in the year, GBP0.8m (2010: GBP3.2m)
relate to the sale of two investments held by
TLIT which resulted in no profit/loss for the
Group in the period. The whole of the impairment
of GBP0.3m (2010: GBP(0.6)m) relates to the impairment
to the carrying value of the remaining TLIT investments
held, as a result of revaluing the investments
based on the closing bid market values or last
traded price where bid prices are not regularly
and readily available.
Fair value
hierarchy
IFRS 7 requires the Company to analyse financial
instruments carried at fair value, by valuation
method. The different levels have been defined
as follows:
Level 1: quoted prices
(unadjusted) in active markets
for identical assets or
-- liabilities.
Level 2: inputs other than quoted
prices included within Level 1 that are
observable for the asset or liability,
either directly (i.e. as prices) or
-- indirectly (i.e. derived from prices).
Level 3: inputs for the asset or
liability that are not based on
observable market data (unobservable
-- inputs)
Level Level Level
1 2 3 Total
GBPm GBPm GBPm GBPm
At 30
June 2011
Investments 1.0 1.5 - 2.5
Level Level Level
1 2 3 Total
GBPm GBPm GBPm GBPm
At 31 December
2010
Investments 1.3 0.4 0.7 2.4
The following table shows a reconciliation from
the beginning balances to the ending balances
for fair values measurements in Level 3 of the
fair value hierarchy:
2011 2010
GBPm GBPm
Balance at
1 January 0.7 1.7
Net gain from financial
instruments at fair value
through profit and loss - 0.1
Disposal
of investments (0.7) (1.0)
Transfer to
assets held-for-sale - (0.1)
Balance at
30 June - 0.7
During the period, the Company disposed of two
investments held in unquoted plantation management
companies that were valued by the Directors based
on the amount the Directors believe the investments
could be disposed of at an arms length price,
taking into account the Directors knowledge of
each company.
Although the Company believes that its estimates
of fair value are appropriate, the use of different
methodologies or assumptions could lead to different
measurements of fair value. It is not possible,
due to the valuation of Level 3 investments being
based on Directors knowledge of the company, to
provide an effect on profit or loss for a change
in valuation methodologies or assumptions.
12. Discontinued operations (Held-for-sale assets &
liabilities)
2011
The assets held for sale relate to the identification by the
Directors of two UK properties with a total net book value of
GBP4.7m. One of the properties was sold in August 2011 for next
proceeds of GBP2.1m, realising a profit of GBP0.2m
Property
Group Total
GBPm GBPm
Assets classified
as held-for-sale
Property, plant
and equipment 4.9 4.9
Total
assets 4.9 4.9
2010
On 29 November 2010, the Company announced it had reached
agreement to dispose of its largest investment, the logistics
business TDG Limited, to Norbert Dentressangle. On 28 March 2011,
the Company completed the disposal of TDG's holding company, Laxey
Logistics Limited for cash proceeds of GBP208m. As a result of the
commitment at the 31 December 2010 of the Group's management to
sell the Laxey Logistics Group the assets and liabilities of the
group have been shown within the consolidated statement of
financial position as held-for-sale.
The other discontinued items relate to three properties held by
Property Group which the Directors intended to sell early in 2011.
Subsequent to the year end, the Property Group has sold all three
properties, sites at West Hallam, Batley and Manchester, for a net
consideration of GBP21.3m, realising a profit of GBP7.3m.
Laxey
Logistics Property
Group Group Total
GBPm GBPm GBPm
Assets classified
as held-for-sale
Property, plant and
equipment 87.2 12.8 100.0
Investments 0.1 - 0.1
Goodwill 27.0 - 27.0
Acquisition and other
intangible assets 34.0 - 34.0
Retirement benefit
asset 23.6 - 23.6
Inventories 2.4 - 2.4
Trade and other receivables 94.4 - 94.4
Prepayments 21.3 - 21.3
Cash and cash equivalents 18.9 - 18.9
Total assets 308.9 12.8 321.7
---------- --------- ------
Liabilities classified
as held-for-sale
Property finance leases 1.1 - 1.1
Interest bearing borrowings 38.9 - 38.9
Preference shares 0.3 - 0.3
Bank overdrafts 0.3 - 0.3
Provisions 10.9 - 10.9
Post employment retirement
benefit liability 2.5 - 2.5
Deferred tax liabilities 6.7 - 6.7
Tax payables 2.1 - 2.1
Trade and other payables 129.2 - 129.2
Total liabilities 192.0 - 192.0
---------- --------- ------
The main elements of the cash flow of the discontinued
operations are as follows:
Cash flow from discontinued operations
2011 2010
GBPm GBPm
Operating cash flow 1.7 13.9
Cash flow from investing activities 0.4 41.4
Cash flow from financing activities (2.8) (52.2)
Net cash inflows/(outflows) for
the year (0.7) 3.1
------ -------
13. Cash and cash equivalents
As at As at
30 June 31 Dec
2011 2010
Notes GBPm GBPm
Cash at bank and in hand 0.4 5.4
Short-term deposits 14.7 2.3
Cash in restricted accounts - 12.8
Transfers to held-for-sale
assets 12 - (18.9)
15.1 1.6
--------- --------
For the purposes of the consolidated statement of cash flows,
cash and cash equivalents comprise the following at 30 June 2011
and 31 December 2010
2011 2010
GBPm GBPm
Cash at bank and in hand 0.4 5.4
Short-term deposits 14.7 2.3
Cash in restricted accounts - 12.8
Bank overdrafts - (0.3)
15.1 20.2
----- ------
14. Net borrowings
As at 30 As at
June 31 Dec
2011 2010
GBPm GBPm
Non-current
Property finance leases - 1.1
Secured bank loans - 48.8
Non redeemable preference
shares - 0.3
Transfers to held-for-sale
liabilities - (35.9)
--------- --------
- 14.3
--------- --------
Finance
leases
The property finance leases GBPNil (2010: GBP1.1m)
were secured over the properties of the subsidiary
undertakings concerned.
Fixed and variable interest
was payable on the property
finance leases.
Non redeemable
preference shares
The non redeemable preference
shares carried an interest
rate of 4.75%.
Bank loans and other borrowings
2011 2010
GBPm GBPm
Secured bank loan - 53.8
Short term loan facility - 1.5
- 55.3
Less:current installments
on loans and borrowings - (6.5)
----- ------
Non-current - 48.8
----- ------
On 28 March 2011, following the sale of TDG the principal source
of financing held with Burdale Financial Limited was repaid in
full
15. Share capital
Issued share
capital
Issued and
fully paid
Ordinary share
capital No. GBPm
At 1 January 2010
and 1 July 2010 1,337,815,633 66.9
Purchase of
own shares (48,233,341) (2.4)
At 1 January
2011 1,289,582,292 64.5
Options
exercised 85,392,512 4.3
Purchase of
own shares (1,207,966,299) (60.4)
At 30 June
2011 167,008,505 8.4
The Company has only one class of ordinary shares
which carry no right to fixed income. Holders
are entitled to one vote per share at meetings
of the Company.
Share options - exercise (2011)
On 13th May 2011, directors exercised 71,160,426
share options in the company. A further 14,232,086
share options were also
exercised on 13th May 2011
by other senior employees
of the company.
Share buyback - purchase
or ordinary shares (2011)
On 13th May 2011, following the sale of TDG and
having considered the forecast cash flow requirements
of the Group, including nearer term acquisition
opportunities, the Board announced a return of
cash to shareholders totalling GBP197.5m via a
share buyback. The share buyback required the
Company to buy up to 89% of the issued share capital
at a price of 16.35p.
Purchase of ordinary
shares (2010)
As part of its takeover of TLIT the Company conditionally
granted options to shareholders in TLIT enabling
them, if such conditions were satisfied, to require
the Company to purchase all their ordinary shares
in the Company initially at 11.4 pence per share,
subsequently revised to 12 pence per share during
the ten weeks commencing on 14 September 2010
and ending on 20 November 2010.
During the period to 31 December 2010 the Board
determined that the conditions had been satisfied
and accordingly the Company purchased all of the
Option Shares of the Options Holders who exercised
their options during the period 14 September and
20 November 2010. A total of 48,233,341 shares
were purchased by the Company at 12 pence per
share for a consideration of GBP5,788,000.
The right of Option Holders to exercise
their Options terminated on expiry
of the Option Period.
16. Subsequent items
On 5(th) August 2011 the Property Group has sold a property
located in Manchester for a net consideration of GBP2.1m. This
transaction resulted in a book profit to the Group of GBP0.2m.
17. Related party transaction
In the period the Company agreed to sell unquoted investments in
Sri Lankan tea plantations held by TLIT with a carrying value of
GBP725,000 to Laxey Partners Limited (50% owned by Colin
Kingsnorth, Non-executive Director of DouglasBay Capital plc) and
David Panter (Non-executive Chairman of DouglasBay Capital plc) for
combined proceeds of GBP750,000. The value achieved by the Company
for these investments was supported by an independent valuation by
a suitably qualified industry sector expert.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEIFDUFFSELU
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