TIDMSUH
RNS Number : 2279E
Sutton Harbour Group PLC
06 July 2021
6 July 2021
SUTTON HARBOUR GROUP PLC ("the Group")
Results for the year ended 31 March 2021
Sutton Harbour Group plc ("Sutton Harbour", "the Company"), the
AIM listed owner and operator of Sutton Harbour in Plymouth and
specialist in waterfront regeneration projects and operation of
waterfront real estate, marinas and Plymouth Fisheries, announces
audited results for the year ended 31 March 2021.
Highlights
-- Net asset value up by GBP1.071m (0.92p.share),despite
difficult trading conditions resulting from the Covid-19 pandemic
and UK Government imposed restrictions.
-- Record trading year for the marinas as UK based boating
becomes more popular, overall 96% occupancy by June 2021.
-- Investment Property occupancy rate of 97% at 31 March 2021 (95% at 31 March 2020)
-- Strong recovery parking revenues in summer 2020 after
Lockdown ended and same trend now apparent for 2021.
-- The first new development project at Sutton Harbour in a
decade, Harbour Arch Quay, due to start on site imminently.
Financial Highlights
Note 2021 2020
Adjusted (Loss)/profit before * (GBP0.162m) GBP0.221m
tax
----------------- ----------------------- ---------------------
Net financing costs GBP0.753m GBP0.844m
----------------- ----------------------- ---------------------
Net assets GBP47.2m GBP46.0m
----------------- ----------------------- ---------------------
Net asset per share 40.6p 39.7p
----------------------- ---------------------
Valuation of property portfolio ** GBP47.3m GBP46.0m
----------------- ----------------------- ---------------------
Year-end net debt GBP26.9m GBP23.5m
----------------------- ---------------------
*Before accounting for fair value adjustments to property asset
valuation.
**Comprises investment and owner occupied portfolios.
Excludes land held as development inventory.
Valuation as at 31 March 2021.
Philip Beinhaker, Executive Chairman, commented:
"The Group has used the last year to advance the development
projects, invest in a new development site and develop the
marketing and operations efficiencies of the marinas business. The
Group now wishes to continue its pace of progress. To support the
completion of the Harbour Arch Quay development, provide headroom
to invest in other strategic sites and support the costs of
planning and professional fees the Group accordingly intends to
make an open offer for new equity capital to enable existing
shareholders to participate in future growth of the Group in the
near future."
For further information, please contact
Sutton Harbour Group plc
Philip Beinhaker - Executive
Chairman
Corey Beinhaker - Chief Operating
Officer
Natasha Gadsdon - Finance Director 01752 204186
Arden Partners (Nomad and Broker)
Paul Shackleton
Akhil Shah 020 7614 5924
Executive Chairman's Statement
For Year Ended 31 March 2021
Introduction
I am pleased to report on the Group's results for the year ended
31 March 2021. These results include the impact of the Covid
pandemic and periodic UK Government imposed restrictions during the
reporting year.
The Group maintained its trading operations throughout the full
year. The Covid crisis most acutely undermined the car parking
revenues, an important cash generative activity, and throughput was
slowed at Plymouth Fisheries as the market for high quality fish
reduced in the wake of closures of restaurants and hospitality
businesses. Collection of rentals has been steady throughout the
year with some tenants arranging instalment payment plans. Overall
90% rentals falling due have been collected and the Group has
continued to achieve lettings of vacant space to new tenants with
the occupancy rate at 97% by 31 March 2021. The marinas benefitted
from the boom in UK based leisure during Summer 2020, a trend that
has continued into the Summer 2021 season giving rise to a marinas
occupancy rate of 96% by June 2021.
Sutton Harbour is a destination offering outdoor marine, leisure
and hospitality facilities. Visitor activity has now returned to
the Harbour area with tenants and other operators now attracting
strong footfall. In Summer 2020 after the Lockdown restrictions
were relaxed, car parking revenues quickly recovered as visitors
returned. Unfortunately this recovery was cut short as two further
Lockdowns followed. To date, the recovery of Summer 2021 is
proceeding strongly as parking incomes and tenants' businesses
improve, allowing the Group to move on from the difficulties of the
past 16 months. During the year the Company was exposed to the
business failure of Edinburgh Woollen Mill, which occupied a 7,500
sq ft unit.
The Group has made significant progress with its stated
regeneration business plans. After further delays resulting from
the Covid crisis disruption, construction of the 14 apartment
building known as Harbour Arch Quay is due to start this summer. In
December 2020, the Company completed the purchase of a site just
east of the Harbour on Sutton Road and immediately submitted an
application for two residential-led developments on this site.
To provide additional headroom on bank facilities to assure the
financial resilience of the Group through the post Lockdown
recovery period, the increased facility of GBP2m above the core
facilities of GBP25m has been successfully extended with National
Westminster Bank plc until May 2022.
Results and Financial Position
The adjusted loss before taxation for the year was GBP0.162m
(2020: GBP0.221m profit before taxation) which excludes non-cash
fair value adjustments. In this financial year these adjustments
relate to property asset valuation, undertaken by external valuers
as at 31 March 2021. The loss before taxation for the year under
review as per the Income Statement, inclusive of the aforementioned
adjustments, was GBP2.373m (2020: GBP0.756m loss). The financial
impact of the Covid-19 crisis is evident in the Gross Profit which
is down by GBP0.567m to GBP1.762m in the year to 31 March 2021
(year to 31 March 2020: GBP2.329m), attributable to a decline of
GBP0.294m in car parking; GBP0.146m in marine activities (fisheries
and marinas) and GBP0.117m in real estate/regeneration. The Group
companies were not eligible for any Covid-19 related Government
grants and full functionality of the harbour (fisheries operations,
harbour services and 24 hour lock operations) operated continuously
to support users due to its status a statutory harbour authority
and as part of the food supply chain infrastructure.
Net debt (including lease liabilities) increased to GBP26.874m
as at 31 March 2021 from GBP23.549m at 31 March 2020, an increase
of GBP3.325m of which GBP2.275m is a loan taken out in December
2020 to finance the purchase of the site on Sutton Road. The
increase in development property inventory of GBP4.282m was
principally incurred in the purchase of the aforementioned site and
costs to prepare the full planning application.
Gearing (Net debt: net assets) as at 31 March 2021 stood at
57.0% (2020: 51.1%). Finance costs of GBP0.753m in the year (2020:
GBP0.844m) reflect the lower rates of interest.
As at 31 March 2021, net assets were GBP47.153m (2020:
GBP46.082m), a net asset value of 40.6p per ordinary share (2020:
39.7p per ordinary share). The movement includes the valuation of
the Group's property assets which gave rise to an overall valuation
surplus of GBP1.035m, as reconciled in the table below, of which
GBP1.142m deficit relates to the investment property portfolio and
GBP2.176m surplus relates to the owner occupied properties. The
investment portfolio and car park valuation movements reflect the
market uncertainty caused by the UK Government's restrictions to
manage the Covid-crisis as at 31 March 2021, with the marinas'
valuation surplus following strengthening in trading performance.
During the year the new fuel servery at Plymouth Fisheries was
completed and accordingly the net cost of GBP0.475m was transferred
from 'Assets under the Course of Construction' to the Fisheries
asset. The current weaker level of trading at Plymouth Fisheries
has informed the valuer's lower overall Fisheries asset value
resulting in the effective write down of the fuel servery.
Valuation Surplus/(Deficit) Accounting*
Owner Occupied
Portfolio
(GBP1.061m) Fair valuation adjustment recorded in
* Fisheries the Income Statement as no revaluation
reserve available to absorb the deficit
GBP3.563m Credited to the Revaluation Reserve in
* Marinas the Balance Sheet
(GBP0.317m) Debited to the Revaluation Reserve in
* Car Parks the Balance Sheet
---------------------------- -----------------------------------------
Investment Property (GBP1.150m) Fair valuation adjustment recorded in
Portfolio the Income Statement
---------------------------- -----------------------------------------
TOTAL GBP1.035m
---------------------------- -----------------------------------------
*Accounting for the fair value movement between valuations at 31
January 2020 and 31 March 2021 has been accounted in the current
year as the movement was materially related to factors that
occurred from 1 April 2020.
Taking into account the current level of bank borrowing, the
board does not recommend payment of a dividend on the year's
results.
Directors and Staff
There have been no other Board changes during the year.
Headcount as at 31 March 2021 was 28 (31 March 2020: 30). During
the year five staff were furloughed for a very minimal period of
time and two redundancies were made. Harbour operations personnel
were designated as key workers.
Operations Report
Marine
Sutton Harbour Marina and King Point Marina both enjoyed a
record year of annual berth sales with overall annual berth sales
up by 5% and overall occupancy up to 92% by 31 March 2021 (80% by
31 March 2020). Total marinas revenue for the year ended 31 March
2021 was slightly up on the previous year, although the overall
result was offset by weaker visitor bookings. The current year is
set to be another record year with occupancy currently at 96%
setting a strong platform for future revenue and valuation growth.
Prices have been held this year and will be reviewed as the economy
recovers. The marinas have benefited from the renewed popularity of
UK based boating since the start of the Covid crisis and it is
pleasing to see many first-time boat owners taking up the leisure
activity. Demand for berths has justified installation of the final
pontoons at a cost of GBP60,000 at King Point Marina making the
facility, which opened in 2013, complete. At Sutton Harbour Marina,
provision for jet skis has been increased, which was quickly sold
out, and improvements to the business' telephony and customer
management software have been undertaken.
Plymouth Fisheries trading slowed during the year with both
landings of fish and fuel sales impacted by a combination of
uncertainty arising from the Covid-19 crisis and Brexit transition,
local competition from other south-west ports and a declining local
fleet as fishing licences are concentrated to fewer, larger
vessels, some which are too large for Sutton Harbour to
accommodate. Fishing remains an important component of the
Harbour's vibrancy and supports direct and indirect employment. The
Group is working closely with Plymouth City Council and other
stakeholders on a plan to stimulate Fisheries-related activity
through the provision of new facilities which will better meet
future needs of the industry and provide public access to and
enjoyment of Plymouth's fishing tradition.
Real Estate and Car Parking
Tenant occupancy by 31 March 2021 stood at 97% (31 March 2020:
95%). Following the period of administration and end of their
lease, Edinburgh Woollen Mill vacated the 7,500 sq ft premises at
the heart of the Barbican at the end of May 2021. 2,500 sq ft is
already reserved for a new high quality tenant subject to lease,
and the remainder of the space is now being actively marketed.
Car parking revenues were down by half due to the Lockdowns
during the year. The multi-storey Harbour Car Park was closed
during Lockdown periods due to lack of use and to save business
rates. The Group has also incurred security costs to prevent
trespass of the car park. Following each Lockdown, and as footfall
returned, car parking revenues recovered with the height of Summer
2020 trading at a similar level to Summer 2019.
Regeneration
Sutton Harbour The Group is working diligently with the Local
Authority on the finalisation of planning applications for the two
buildings on the Sutton Road site. The Group is hopeful of a start
on site with the first of the Sutton Road developments in Summer
2022. The smaller Harbour Arch Quay scheme is due to start
construction this summer and is due for completion in a year's
time. Since the year end the Group has arranged separate
development financing, which is subject to completion, to fund the
Harbour Arch Quay scheme. Marketing of the 14 high quality
waterfront apartments will soon be underway with good levels of
informal interest already reported.
Former Airport Site As previously reported the site is
safeguarded from development until 2024. The Group has ready
proposals for a deliverable alternative use of the 113 acre site
which meet the social and economic needs of Plymouth.
Summary and Outlook
The disruption caused by three Lockdowns and restrictions
imposed by the UK Government to contain the spread of Covid-19 was
more extensive than we foresaw last summer and there is the
potential for further interruptions to trading in the future. The
Board is now more optimistic that with the vaccination programme
well advanced and with businesses finding ways to adapt to
different levels of restriction, the Group is well placed to
benefit from the re-popularisation of UK based tourism and
staycations. This has already been demonstrated by the growth in
marina occupancy, recent increase in new lettings and recovery in
parking revenues in the post year end period.
The Group has used the last year to advance the development
projects, invest in a new development site and develop the
marketing and operations efficiencies of the marinas business. The
Group now wishes to continue its pace of progress. To support the
completion of the Harbour Arch Quay development, provide headroom
to invest in other strategic sites and support the costs of
planning and professional fees the Group accordingly intends to
make an open offer for new equity capital to enable existing
shareholders to participate in future growth of the Group in the
near future.
Philip Beinhaker
EXECUTIVE CHAIRMAN
5 July 2021
Consolidated Income Statement
For the year ended 31 March 2021
2021 2020
GBP000 GBP000
Revenue 5,400 6,558
Cost of sales (3,638) (4,229)
Gross profit 1,762 2,329
------------ ------------
Fair value adjustments on investment properties and fixed assets (2,211) (977)
Administrative expenses (1,171) (1,264)
Operating (loss)/profit (1,620) 88
------------ ------------
Finance income - -
Finance costs (753) (844)
------------ ------------
Net finance costs (753) (844)
------------ ------------
(Loss) before tax from continuing operations (2,373) (756)
Taxation ( charge)/ credit on (l oss) /profit from continuing operations 198 (232)
------------ ------------
(Loss) for the year from continuing operations (2,175) (988)
------------ ------------
(Loss) for the year attributable to owners of the parent (2,175) (988)
============ ============
Basic (loss)/earnings per share from continuing operations
(1.88p) (0.85p)
Diluted (loss)/earnings per share from continuing operations (1.88p) (0.85p)
Consolidated Statement of Other Comprehensive Income
For the year ended 31 March 2021
2021 2020
GBP000 GBP000
(L oss) for the year (2,175) (988)
Items that will not be reclassified subsequently to profit or loss:
Revaluation of property, plant and equipment 3,245 1,338
Items that may be reclassified subsequently to profit or loss:
Effective portion of changes in fair value of cash flow hedges - -
Other comprehensive income for the year, net of tax 3,245 1,338
------------ ------------
Total comprehensive income for the year attributable to owners of the parent 1,070 350
============ ============
Consolidated Balance Sheets
As at 31 March 2021
2021 2020
GBP000 GBP000
Non-current assets
Property, plant and equipment 29,766 27,958
Investment property 17,845 18,985
Inventories 12,962 12,810
60,573 59,753
------------ ------------
Current assets
Inventories 16,359 12,217
Trade and other receivables 2,396 2,595
Tax recoverable 6 5
Cash and cash equivalents 928 792
19,689 15,609
------------ ------------
Total assets 80,262 75,362
------------ ------------
Current liabilities
Trade and other payables 1,730 1,396
Lease liabilities 141 63
Deferred income 1,819 1,544
Provisions 56 70
3,746 3,073
------------ ------------
Non-current liabilities
Bank loans 27,475 24,250
Lease liabilities 186 28
Deferred government grants 646 646
Deferred tax liabilities 1,056 1,254
Provisions - 29
29,363 26,207
------------ ------------
Total liabilities 33,109 29,280
------------ ------------
Net assets 47,153 46,082
============ ============
Issued capital and reserves attributable
to owners of the parent
Share capital 16,266 16,266
Share premium 10,695 10,695
Other reserves 16,280 13,034
Retained earnings 3,912 6,087
Total equity 47,153 46,082
============ ============
Consolidated Statement
of Changes
in Equity
For the year ended 31
March 2021
Share Share Revaluation Merger Hedging Retained Total
capital premium reserve reserve reserve earnings equity
------------Other reserves------------
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------- -------- ---------------- ----------- ----------- --------- -------
Balance at 1 April
2019 16,266 10,695 7,825 3,871 - 7,075 45,732
Comprehensive income
Loss for the year - - - - - (988) (988)
Other comprehensive
income
Revaluation of property,
plant and equipment - - 1,339 - - - 1,339
Total comprehensive
income 1,339 - (988) 350
-------- -------- ---------------- ----------- ----------- --------- -------
Balance at 31 March
2020 16,266 10,695 9,164 3,871 - 6,087 46,083
-------- -------- ---------------- ----------- ----------- --------- -------
Balance at 1 April
2020 16,266 10,695 9,164 3,871 - 6,087 46,083
Comprehensive income
Loss for the year - - - - - (2,175) (2,175)
Other comprehensive
income
Revaluation of property,
plant and equipment - - 3,245 - - - 3,245
Total comprehensive
income - - 3,245 - - (2,175) 1,070
-------- -------- ---------------- ----------- ----------- --------- -------
Balance at 31 March
2021 16,266 10,695 12,409 3,871 - 3,912 47,153
======== ======== ================ =========== =========== ========= =======
Consolidated Cash Flow Statement
For the year ended 31 March 2021 2021 2020
GBP000 GBP000
------- ------------
Cash used from total operating activities (2,536) (455)
Cash flows from investing activities
Net expenditure on investment property (10) (52)
Expenditure on property, plant and equipment (161) (823)
Net cash used in investing activities (171) (875)
------- ------------
Cash flows from financing activities
Interest paid (754) (844)
Loan drawdown 3,225 1,750
Lease finance received 378 -
Cash payments of lease liabilities (142) (78)
Grants received 136 -
------- ------------
Net cash generated from financing activities 2,843 826
------- ------------
Net increase in cash and cash equivalents 136 (504)
Cash and cash equivalents at beginning of the
year 792 1,296
Cash and cash equivalents at end of the year 928 792
------- ------------
Reconciliation of financing activities for the year ended 31 March 2021
2021 Cash 2020 Cash flow 2019
flow
GBP000 GBP000 GBP000 GBP000 GBP000
-------- ------- ------- ---------- -------
Bank loans 25,200 9 50 24,250 1,750 22,500
Other loans 2 ,275 2 ,275 - - -
Lease liabilities 3 27 2 36 91 (78) 169
-------- ------- ------- ---------- -------
Long term debt 2 7,802 3 ,461 24,341 1,672 22,669
-------- ------- ------- ---------- -------
Segment results
For the year ended 31 March 2021
Real
Marine Estate Car Parking Regeneration Total
GBP000 GBP000 GBP000 GBP000 GBP000
-------- -------- ------------ ------------- --------
Revenue 3,509 1,542 349 - 5,400
Segmental Operating
Profit before
Fair value adjustment
and unallocated
expenses 770 1,020 110 (138) 1,762
Fair value adjustment
on investment
properties and
fixed assets (1,061) (1,150) - - (2,211)
-------- -------- ------------ ------------- --------
-
Unallocated:
Administrative
expenses (1,171)
Operating profit (1,620)
Financial income -
Financial expense (753)
--------
Profit before
tax from continuing
activities (2,373)
Taxation 198
--------
Profit for the
year from continuing
operations (2,175)
--------
Depreciation
charge
Marine 336
Car Parking 31
Administration 32
----
399
----
Year ended 31 Real
March 2020 Marine Estate Car Parking Regeneration Total
GBP000 GBP000 GBP000 GBP000 GBP000
------- -------- ------------ ------------- --------
Revenue 4,323 1,580 655 - 6,558
Gross profit
prior to non-recurring
items 916 1,157 404 (148) 2,329
Fair value adjustment
on investment
properties and
fixed assets (483) (494) - - (977)
------- -------- ------------ ------------- --------
1,352
Unallocated:
Administrative
expenses (1,264)
88
Finance income -
Finance expenses (844)
--------
Profit before
tax from continuing
activities (756)
Taxation (232)
--------
Profit for the year from continuing operations
(988)
Depreciation
charge
Marine 313
Car Parking 26
Administration 1
----
340
----
Notes to the Consolidated Financial Statements
1. General Accounting Policies
Basis of preparation
The results for the year to 31 March 2021 have been extracted
from the audited consolidated financial statements, which are
expected to be published by mid-August 2021.
The financial information set out above does not constitute the
Company's statutory accounts for the years to 31 March 2021 or 2020
but is derived from those accounts. Statutory accounts for the year
ended 31 March 2020 were delivered to the Registrar of Companies
following the Annual General Meeting on 22 September 2020 and the
statutory accounts for 2021 are expected to be published on the
Group's website (www.suttonharbourholdings.co.uk) shortly, posted
to shareholders at least 21 days ahead of the Annual General
Meeting ("AGM") to be held on 27 September 2021 and, after approval
at the AGM, delivered to the Registrar of Companies.
The auditor, PKF Francis Clark, has reported on the accounts for
the year ended 31 March 2021; their report includes a reference to
the valuation of Plymouth City Airport (former airport site) to
which the auditors drew attention by way of emphasis of matter
without qualifying their report.
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