RNS Number:8880U
Hurlingham PLC
29 November 2000
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2000
CHAIRMAN'S STATEMENT
I am pleased to present the Preliminary Results of the Company
for the year ended 31st May 2000. The year constituted a
period of further progress in developing the policy, which I
initially set out in my statement accompanying the Interim
results for the six months ended 30 November 1998, of moving
away from being a residential property investment company to
being a more broadly based trading company operating in the
"provision of accommodation." It is the Board's intention
that the Company shall not only own property assets which
contain accommodation, but will also build on the platform of
Custom Tours to develop a presence in the reservations systems
which serve the accommodations industry. The Board considers
that this policy provides a combination of assets and
earnings, which are capable of growth in tandem. At the
Extraordinary General Meeting held on 26th July 2000,
shareholders approved the development of this policy, and also
approved the change of name to Hurlingham plc, to reflect the
change in emphasis in the Group's activities.
The attached Financial Statements constitute the first Group
consolidated accounts incorporating the results of our
subsidiary Custom Tours Limited and our 45% associate
Bettagrade Limited. As you will see from these Accounts,
Group turnover increased some sevenfold, which reflects the
impact of Custom Tours Limited on our business in the four
months from our acquisition of the Company on 1st February
2000.
Custom Tours Limited
Custom Tours Limited is a specialist intermediary, which acts
as a reservation agent and wholesales hotel rooms to travel
agents. The business offers potential for further development
and growth and gives the Group a source of trading income to
complement our lower yielding Hotel and residential property
interests. Since acquisition, the Directors have implemented
computerisation of the sales booking function and will shortly
be re-locating the business to larger premises which will give
the capacity for expansion.
Following acquisition, the Directors reviewed Custom Tours
policy of taking credit for sales in respect of travel
accommodation paid for prior to the period end where the date
of travel fell after the period end. This policy has been
revised so that Custom Tours now only treats as sales bookings
where the date of travel is before the period end. This has
resulted in a prior year adjustment in the accounts of Customs
Tours. At the same time, Custom Tours' accounting reference
date was changed from 31st August to 31st May to be
coterminous with other Group companies. As a result of these
changes, the operating profit before tax for the year ended
31st August 1999, prior to our acquisition of the Company, has
been adjusted from #110,661 to #102,359 and the profit for the
nine month period ended 31st May 2000 on the revised basis is
#65,946 of which #30,471 was generated in the four months
following acquisition on 1st February 2000, and is included in
these Group results.
Bettagrade Limited
Turning to our 45% associate Company, Bettagrade Limited,
progress has been slower than anticipated. The Company's
Express by Holiday Inn Hotel in Perth, Scotland, which was
officially opened in September 1999 enjoyed a promising start,
but suffered from poor winter trading, exacerbated by the
"millennium effect", which was experienced by the hospitality
industry nation wide and resulted in extremely poor occupancy
levels over the Christmas and New Year period. As a result,
Bettagrade reported a trading loss of #121,746 in the period
to 31st May. Hurlingham's share of this loss is #54,785,
which is reflected in the attached profit and loss account.
In the light of these results, the Board of Bettagrade has
strengthened the marketing effort, as a result of which
occupancy levels since the year end have improved
significantly and in the peak month of August reached 85%.
The Board of Bettagrade considers this to be a strong
performance for a new Hotel, but believe that it will take
some further time for the Hotel to establish a stabilised
trading year.
As stated above, Bettagrade Limited is a 45% associate company
and not a subsidiary. Despite this, Financial Reporting
Standard Number 9 requires us to incorporate our share of its
results into our consolidated Profit and Loss account, instead
of accounting for our interest as an investment. Although
Bettagrade made a trading loss in the period, the Board does
not consider that the value of our investment in the Company
has fallen. An independent valuation of the Hotel was
obtained during the period, which attributed an open-market
value of #3.5 million, being approximately #300,000 in excess
of cost which has not been reflected in these accounts.
Residential Portfolio
The residential portfolio performed well during the year under
review with income increasing some 6.5% to #117,591 (1999,
#110,370), despite the sale of two properties at the end of
the period. The London residential property market has been
strong for some time and the sale of the two properties
referred to above resulted in substantial profits on disposal.
The current accounting treatment on the sale of previously
revalued properties requires that part of the profit does not
appear in the Profit and Loss account, but is only reflected
in the historical cost Profit and Loss account.
Summary
As a result of the accounting treatments referred to above,
while the Group Profit and Loss Account shows a profit for the
year before taxation of #58,300 (1999 Loss - #180), the
historical cost Profit and Loss Account shows the actual
profit of #91,225 (1999 - #102,259). After provision for
taxation of #14,090 and dividends of #18,265, the amount of
profit transferred to reserves to help fund future development
is #54,869, representing #25,944 net profit as per the Profit
and Loss account, plus #28,925 being released from the
revaluation reserve.
During the period, the Board commissioned an independent
valuation of the residential properties, as a result of which
the portfolio was revalued to a current value of #1,620,000.
Overall, equity shareholder funds increased during the period
from #1,687,225 to #2,162,558. In the light of all these
developments, the Board has decided to maintain the dividend
of 1p per share for the year ended 31st May 2000.
Charles Llewellyn
Chairman
29 November 2000
Consolidated profit and loss account
for the year ended 31 May 2000
2000 1999
# #
Turnover:
Continuing operations 117,591 110,370
Acquisitions 649,097 -
------- -------
766,688 110,370
Cost of sales (599,735) (26,288)
------- -------
Gross Profit 166,953 84,082
Administrative expenses (148,601) (89,363)
------- -------
Operating profit/(loss)
Continuing operations (12,119) (5,281)
Acquisitions 30,471 -
------- -------
18,352 (5,281)
Share of results from associated
undertaking 12,015 -
------- -------
Total operating profit/(loss) 30,367 (5,281)
Exceptional profit 80,848 9,182
Interest receivable
Group 44,052 21,525
Associate 1,645 -
------- -------
45,697 21,525
Interest payable
Group (30,167) (25,606)
Associate (68,445) -
------- -------
(98,612) (25,606)
------- -------
Profit/(loss) on ordinary
activities before taxation 58,300 (180)
Taxation (14,090) -
------- -------
Profit/(loss) on ordinary 44,210 (180)
activities after taxation
Dividends (18,266) (15,526)
------- -------
Transferred to/(from) reserves 25,944 (15,706)
======= =======
Earnings/(loss) per share 2.85p. (0.01)p.
Statement of total recognised gains and losses
for the year ended 31 May 2000
2000 1999
# #
Profit/(loss) on ordinary 44,210 (180)
activities after taxation
Increase in revaluation reserve 449,389 -
for investment properties
------- -------
Total recognised gains and losses 493,599 (180)
since last annual report
------- -------
Note of historical cost profits and losses
for the year ended 31 May 2000
2000 1999
# #
Reported profit/(loss) on 58,300 (180)
ordinary activities before
taxation
Realisation of property 32,925 102,439
revaluation gains
------- -------
Historical cost profit on 91,225 102,259
ordinary activities before
taxation
======= =======
Transfer to reserves after 54,869 86,733
taxation and dividends
======= =======
Balance sheets
at 31 May 2000
2000 1999
# #
Fixed Assets
Intangible assets 412,481 -
Tangible assets 1,645,317 1,322,925
Investments 60,840 115,625
--------- ---------
2,118,638 1,438,550
--------- ---------
Current Assets
Debtors 803,635 721,130
Cash at bank and in hand 303,066 6,485
--------- ---------
1,106,701 727,615
--------- ---------
Creditors: amounts falling due
within one year (443,421) (318,461)
--------- ---------
Net current assets 663,280 409,154
--------- ---------
Total assets less current
liabilities 2,781,918 1,847,704
Creditors: amounts falling due
after one year (528,360) (152,279)
Provisions for liabilities and
charges (91,000) (8,200)
--------- ---------
Net assets 2,162,558 1,687,225
--------- ---------
Capital and reserves
Called up share capital 1,164,450 1,164,450
Share premium account 214,854 214,854
Revaluation reserve 578,189 157,725
Profit and loss account 205,065 150,196
--------- ---------
Equity shareholders' funds 2,162,558 1,687,225
--------- ---------
Consolidated cash flow statement
For the year ended 31 May 2000
2000 1999
# #
Net cash (outflow)/inflow
from operating activities 161,769 (23,199)
Returns on investments and
servicing of finance
Interest received 40,874 14,840
Interest paid (23,443) (20,168)
--------- --------
Net cash outflow from
returns on investments and 17,431 (5,328)
servicing of finance
Taxation
UK corporation tax paid (7,826) -
Capital expenditure and
financial investments
Purchase of operating assets (25,787) (3,183)
Sale of investment 333,191 246,191
properties (net)
Loan to associate company - (500,000)
--------- --------
Net cash outflow for capital
expenditure and financial 307,404 (256,992)
investment
Acquisitions and disposals
Acquisition of subsidiaries (506,452) -
Net cash acquired with 27,343 -
subsidiaries
Investment in associate
companies - (3,125)
--------- --------
Net cash outflow from
acquisitions and disposals (479,109) (3,125)
Equity dividends paid (15,225) (15,254)
--------- --------
--------- --------
Net cash outflow before (15,555) (303,898)
financing
Financing
Bank loans repayments (302,864) -
New bank loans 465,000 230,000
--------- --------
Net cash inflow from 162,136 230,000
financing
--------- --------
Increase/(decrease) in cash 146,581 (73,898)
NOTES:
NOTES TO THE PRELIMINARY RESULTS ANNOUNCEMENT
The financial information contained in this statement does not
constitute full accounts within the meaning of section 240
Companies Act 1985 (the "Act"). Full accounts for the year
ended 31 May 1998 have been filed with the registrar of
companies which contained an unqualified auditors' report and
no statement under section 237(2) or (3) of the Act. Full
accounts for the year ended 31 May 1999 are expected to be
posted to shareholders shortly. Copies will be available to
the public for at least 14 days thereafter from the Company's
secretary at 90 Babbacombe Road, Bromley, Kent BR1 3LS.
Earnings/(loss) per share on the net basis is based on the
loss on ordinary activities after taxation namely #58,300
(1999: loss #180) and on 1,552,500 ordinary shares (1999:
1,552,600) being the number of ordinary shares in issue and
ranking for dividend throughout the year.
A final dividend of 1p per ordinary share is proposed to be
paid on 11 January 2001 to shareholders on the register at the
close of business on 15 December 2000.
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