Brockhampton Hldgs - Final Results
24 Maggio 2000 - 9:01AM
UK Regulatory
RNS Number:0810L
Brockhampton Holdings PLC
24 May 2000
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31ST MARCH 2000
HIGHLIGHTS
- Operating profits rose from #9.6m. to #9.9m.
- Earnings per share increased by 10.8% to 14.4p
(1999:13.0p)
- Recommended final dividend of 3.9p per Ordinary and
'A' Ordinary share, making a total of 5.7p per share
(1999:5.2p), an increase of 9.6%
- Charges to customers maintained as the lowest in the
industry
- Excellent levels of customer service and compliance
maintained
CHAIRMAN'S STATEMENT
I am pleased to report that the Group has completed
another successful year, with the regulated water
business continuing to serve customers with one of the
highest levels of overall service in the country at the
lowest cost. During the year, the Group has taken its
first major initiative to generate non-regulated
earnings. In November 1999, a new business, Seven
Springs Limited, was launched to supply bottled spring
water and associated drinking water cooling equipment to
commercial customers. The market is exhibiting rapid
growth, and the Board is confident that Seven Springs
Limited can soon build a strong presence in that market.
The transfer of property from the core business to both
Brockhampton Holdings plc and Brockhampton Property
Investments Limited in recent years has ensured a sharper
focus on the management of Group land resources in
generating an additional income stream.
The most significant event to impact on the core water
business during the year was the final determination, in
November 1999, of permitted price limits for the five
year period to 2005 by the Director General of Water
Services. These limits dictate that Portsmouth Water is
faced with a real price reduction of 3% in the first year
of the review period and an average of 1.4% annually for
the five years. The Directors decided that an appeal to
the Competition Commission would not be in the best
interests of shareholders. The Board believes the
targets to be challenging, but achievable, and will seek
to ensure that the level of future efficiencies assumed
by the Director General of Water Services is delivered.
The opportunity for competition has been introduced into
the water industry by the Competition Act, which came
into force on 1st March 2000. In April, the government
published a consultation paper reviewing the scope for
expanding competition in the industry. There remain a
number of significant issues, which will need to be
addressed before competition can realistically become
practical for other than the larger customers. The Board
will continue to monitor the situation carefully.
The results for the year ended 31st March 2000 reflect
another solid financial performance. Operating profit
rose by 3.0% on an increase in turnover of 2.8%, which
has been achieved after some 1,500 customers switching to
meters to reduce their bills. Profit before taxation
increased by 7.2%, despite the #0.47m. initial setting up
costs of the new bottled water business. Earnings per
share improved to 14.4p, compared with 13.0p last year,
an increase of 10.8%. In the light of these results, the
Directors are recommending a final dividend of 3.9p per
Ordinary and 'A' Ordinary Share, which together with the
interim dividend paid in January 2000, makes a total for
the year of 5.7p, an increase of 9.6% on last year's
figure of 5.2p. Subject to approval at the Annual
General Meeting, the final dividend will be paid on 17th
August 2000 to shareholders on the register at the close
of business on 30th June 2000. For the future, the rate
of dividend growth will be dependent upon the level of
future efficiencies achieved in the core water business
and the successful generation of non-regulated earnings.
On 23rd September 1999, the #6m. 10.3325% bank loan fell
due for repayment. This repayment was financed by a
replacement ten year bank loan for the same amount, with
interest fixed at the significantly reduced rate of 6.93%
by way of an interest rate swap arrangement. The
Directors anticipate that, as a result of the Periodic
Review outcome, gearing levels will increase modestly
over the next few years to help meet the capital
expenditure programme.
Capital investment continued at the high level of
previous years and, once again, the programme was
delivered effectively. In the regulated business,
expenditure was targeted at the improvement of water
quality and the maintenance both of infrastructure and
other operating assets. Capital expenditure of #0.7m.
was incurred to establish the new bottled water business,
which was in line with expectations at the time of the
interim statement.
Another full year has been completed without any
restrictions in water supply to our customers.
Portsmouth Water's record in this respect is an enviable
one, operating in the South East of England where
supplies are traditionally stretched. Water supplied
continues to be of high quality, at over 99.8% compliance
with the stringent regulations, while Ofwat's demanding
leakage target for the year has been met, ensuring a
level of leakage amongst the lowest in the country.
Portsmouth Water does not anticipate a water resource
problem for the foreseeable future and no restrictions in
water supply are expected for the forthcoming summer. The
Company treats its responsibility to promote the
efficient use of water most seriously and has continued
to commit resources to the management of demand. It has
participated in a review of water resources in the South
East of England and, as a result, is now discussing plans
for a bulk supply arrangement with one of its neighbours.
Mr. Fred Bailey retired as a Director on 18th November
1999 after 37 years' service, having joined Portsmouth
Water Company in 1962. His experience and long service
have been of great value to the business and we wish him
a long and happy retirement.
The success of the Group is based on the hard work and
commitment of its staff, and I extend my own and the
Board's appreciation to them for their efforts and
achievements over the last twelve months.
The pricing review has issued a serious challenge to the
water business, which the Directors are determined to
meet. At the same time, they will seek to develop the
level of non-regulated business. I believe that the
Group is well positioned to meet the many challenges
which lie ahead.
J. F. Batty
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31st March 2000
2000 1999
#000 #000
TURNOVER 28,823 28,051
COST OF SALES 12,511 12,733
------ ------
GROSS PROFIT 16,312 15,318
Net operating expenses 6,453 5,750
------ ------
OPERATING PROFIT 9,859 9,568
Profit on sale of fixed assets 215 11
------ ------
PROFIT ON ORDINARY ACTIVITIES 10,074 9,579
BEFORE INTEREST
Interest receivable 233 277
------ ------
10,307 9,856
Interest payable 1,290 1,447
------ ------
PROFIT ON ORDINARY ACTIVITIES 9,017 8,409
BEFORE TAXATION
Taxation on profit on ordinary 2,058 2,181
activities ------ ------
PROFIT ON ORDINARY ACTIVITIES 6,959 6,228
AFTER TAXATION
Dividends paid and proposed 2,746 2,500
------ ------
RETAINED PROFIT FOR THE FINANCIAL 4,213 3,728
YEAR ====== ======
EARNINGS PER SHARE
Basic 14.4p 13.0p
------ ------
Diluted 14.4p 12.9p
------ ------
There are no recognised gains or losses other than the
profit for the year.
CONSOLIDATED BALANCE SHEET
As at 31st March 2000
2000 1999
#000 #000 #000 #000
FIXED ASSETS
Tangible assets 63,642 60,781
Investments 1,544 65,186 1,569 62,350
------ ------
CURRENT ASSETS
Stores 863 911
Debtors 1,177 883
Investments 4 4
Cash and short-term 6,939 5,530
deposits ------ ------
8,983 7,328
CREDITORS: AMOUNTS
FALLING DUE WITHIN
ONE YEAR 11,748 17,479
NET CURRENT (2,765) (10,151)
LIABILITIES ------ ------ ------ ------
TOTAL ASSETS LESS 62,421 52,199
CURRENT LIABILITIES
CREDITORS: AMOUNTS
FALLING DUE AFTER 15,000 9,000
ONE YEAR ------ ------
47,421 43,199
====== ======
CAPITAL AND RESERVES
Called up share 4,895 4,894
capital
Share premium 581 573
account
Capital redemption 4,059 4,059
reserve
Revaluation reserve 504 504
Profit and loss 37,382 33,169
account ------ ------
EQUITY SHAREHOLDERS' 47,421 43,199
FUNDS ====== ======
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31st March 2000
2000 1999
#000 #000 #000 #000
(restated)
NET CASH INFLOW FROM
OPERATING ACTIVITIES 14,244 13,422
RETURNS ON
INVESTMENTS AND
SERVICING OF FINANCE
Interest received 245 265
Interest paid (1,291) (1,046) (1,492) (1,227)
------ ------
TAXATION
UK corporation tax (2,293) (2,328)
paid
CAPITAL EXPENDITURE
AND FINANCIAL
INVESTMENT
Purchase of (8,273) (8,277)
tangible fixed
assets
Sale of tangible 272 49
fixed assets
Capital 1,044 567
contributions
received
Sale of fixed 5 (6,952) 1 (7,660)
asset investments ------ ------
EQUITY DIVIDENDS (2,553) (2,346)
PAID ------ ------
CASH INFLOW/
(OUTFLOW) BEFORE
MANAGEMENT OF LIQUID
RESOURCES AND 1,400 (139)
FINANCING
MANAGEMENT OF LIQUID
RESOURCES
Purchase of short (450) (100)
term deposits
Sale of current - (450) 198 98
asset investments ------ ------
FINANCING
Cancellation of - (12)
debenture stock
Issue of ordinary 9 168
share capital
New loan 6,000 -
Repayment of loan (6,000) 9 - 156
------ ------ ------ ------
INCREASE IN CASH IN 959 115
THE YEAR ====== ======
Notes:
1. The calculation of basic earnings per share is based
on the profits attributable to Ordinary/'A' Ordinary
shares of #6.959 million and on 48.179 million shares
(1999:#6.228 million and 47.935 million shares),
being the weighted average number of Ordinary and 'A'
Ordinary shares in issue during the year.
2. Dividends include a proposed final net dividend per
Ordinary and 'A' Ordinary share of 3.9p (1999:3.5p),
in addition to the interim dividend of 1.8p
(1999:1.7p) already paid. Subject to approval at the
Annual General Meeting, the final dividend will be
paid on 17th August 2000 to holders of Ordinary and
'A' Ordinary shares on the register at the close of
business on 30th June 2000.
3. The financial information included in this
announcement as regards the Group has been prepared
in accordance with United Kingdom accounting
standards using the same accounting policies adopted
in the accounts for the year ended 31st March 1999,
except for the adoption of FRS15, and does not
constitute statutory accounts for the relevant
periods within the meaning of Section 240 of the Act.
Statutory accounts for the Group for the financial
year ended 31st March 1999, upon which the auditors
of the Group have given an unqualified report, have
been delivered to the Registrar of Companies.
Statutory accounts for the Group for the financial
year ended 31st March 2000 will be delivered to the
Registrar of Companies as soon as practicable after
approval at the next Annual General Meeting.
4. The report and accounts will be posted to
shareholders shortly and the Annual General Meeting
will be held on 27th July 2000. The provisional ex-
dividend date for the Ordinary and 'A' Ordinary
shares is 26th June 2000.
For further information, please contact:
N.J. Roadnight - Managing Director
N. Smith - Finance Director
Tel: 023 9249 9888
END
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