TIDMBLEY
RNS Number : 7365J
Bailey(C.H.) PLC
07 December 2018
C H Bailey plc
7 December 2018
Chairman's statement and unaudited financial results
for the six months ended 30th September 2018
C H Bailey Plc ("the Company" or "the Group"), the diverse group
of businesses, with investments and operations around the world in
Leisure, Property principally in Tanzania, South Africa and Malta
and a UK engineering business, announces its interim results for
the half year ended 30 September 2018.
Group Highlights
Overall
-- Value of the Malta property increases and improves the
Company's assets and Income Statement value
-- Operations in Tanzania affected by reduced economic activity in the country
-- Revenue in South Africa reduced due to the fire at Galenia in
February 2018 with anticipated recovery in the second half of the
financial year
-- Growth in revenues at B.I.E, the UK engineering business
Finance
-- Group Revenue is down 4% to GBP2,609k (2017: GBP2,713k)
-- Gross profit margin is down to 28.9% (2017: 30.2%)
-- EBITDA at GBP1,188k is up 18% (2017: GBP1,006k)
-- Group Operating profit is up 42% at GBP776k (2017: GBP547k)
-- Overall profit is up 43% at GBP601k (2017: GBP421k)
Chairman's Statement
C.H. Bailey Plc ("CH Bailey", the "Company" or the "Group"),
announces its interim results for the half year ended 30 September
2018.
Interim Statement and Results
Our interim results for the six month period ended 30 September
2018 show a profit for the period of GBP601k, up 43% (2017:
GBP421k). The increase was driven principally by an improvement in
the value of the Malta property portfolio, which increased by
GBP1,026k (2017: increase of GBP640k). Revenue has decreased by 4%
to 2,609k (2017: GBP2,713k) with gross profit reducing by 8% to
GBP753k (2017: GBP818k). Gross profit margin has decreased to 28.9%
(2017: 30.2%). Operating profit for the period is up 42% at GBP776k
(2017: GBP547k) and EBITDA is up 18% at GBP1,188k (2017:
GBP1,006k). An increase in property operating costs in Malta,
together with costs incurred in providing strategic advice to a
potentially complementary hospitality project in Tanzania, pushed
administrative expenses up to GBP1,005k from GBP888k. Finance costs
at GBP185k are slightly down compared to GBP187k in 2017.
Tanzania
The Tanzanian economy has continued to decline and suffers from
a lack of public spending and uncertainty. This has led to a
decline in investment and economic activity in general across all
sectors. Demand for commercial real estate remains low, and our
serviced offices and retail property in Dar es Salaam are being
affected as a direct result of the weaker demand. Despite this
background, we continue to remain a destination for new business
and have adapted some of the office units to suit smaller
occupiers. The retail units have been reconfigured to incorporate a
food court, which is proving to be popular. Overall occupancy for
the offices and retail units at the end of September 2018 was 78%
and this has increased since then as we have attracted new tenants
but it remains a volatile market going forward.
The Oyster Bay Suites have witnessed reduced demand in line with
the lower economic activity in the country. Tourism has not been as
adversely affected. Beho Beho has seen an increase in occupancy
whereas The Oyster Bay Hotel in Dar es Salaam has seen a reduced
number of bookings compared to the same period in 2017.
We are involved in an advisory capacity in new hospitality
development projects in Tanzania which will benefit our business in
the medium term and earn us some fee income in the short term.
South Africa
The fire at Galenia in February 2018, which affected 60% of our
bedstock, caused a slow-down in our forward bookings for this
season until the restoration work had been finished and the
property re-opened. We opened the property in August 2018 for the
start of the new season, with all the rooms rebuilt to a 5 star
standard from the South African Tourist Board. Bookings have been
brisk after a slow start and we are now looking to beat the
bookings total of last year, which were curtailed by the fire at
the height of the tourist season.
Development plans for Galenia and the adjoining Little Bean Farm
continue but are progressing slowly. We continue to invest in the
infrastructure of both properties, including an upgrade to the
electricity supply, water boreholes and pumping system.
Work continues at the property in Cape Town (Glendale
Terrace/Palmyra Road). We hope to complete the refurbishment in
early 2019 and take it to the market for sale.
Malta
The refurbished St Lucia Street property has been rented to the
Maltese Government for 10 years at a rent of EUR115,000 per annum,
with index-linked rent reviews.
The St Barbara Bastion property is currently rented on a
12-month residential lease expiring March 2019, which we will seek
to renew or re-let.
Planning permission for the Archbishop Street property has been
obtained after appeal, and we are now working on the refurbishment
plans for work to commence in early 2019. After the planning
consent was granted, we have reviewed the property portfolio in
Malta and increased its value, which has contributed GBP1,025k to
investment activities and other income in the Consolidated Income
Statement.
Following the sale of the Charles Street property in March 2018,
the Company repaid the Lombard Bank loan. We are currently in
discussion with Lombard Bank regarding a new facility to be secured
on the existing property portfolio while we continue to seek new
development opportunities in Valletta.
UK operations
Our UK engineering business, Bailey Industrial Engineering
Limited, is continuing to grow. Revenues are up by 10% to GBP929k
for the period under review. EBITDA is down to GBP83k (2017:
GBP111k) due to the type of orders worked on during this time. The
order book for the second half of the year is solid with a
different mix of work, so we hope to see the margins restored to
previous levels.
The new lease with Associated British Ports has been agreed and
the allied works relating to the dilapidations of the old lease are
agreed with the work expected to commence in January 2019.
Outlook
We will continue to maintain our market position in Tanzania.
Our involvement in new development projects in an advisory capacity
will indirectly help our hospitality business and we remain
positive in our potential future growth in the country.
South Africa is expected to remain steady as the country
stabilises and attracts new local and inward investment. We hope to
locate and benefit from further property development opportunities
in Cape Town and to make progress with the development plans in
Montagu.
Malta still grows in international economic stature. We hope to
find further development sites in Valletta or other opportunities
on the island, where we have invested for over 50 years and know
the local market well.
We believe there will be continued growth in the UK engineering
business. However the continued uncertainty of Brexit may impact
our customers' business and therefore could have an adverse effect
on our business growth.
Operating in emerging markets and niche industries, like heavy
engineering in the UK, it is difficult to predict the future but we
remain positive and cautiously optimistic.
David Wilkinson
Chairman
6 December 2018
Further information:
Harry Sihra, Company Secretary
C H Bailey Plc
Tel: 01633 262961
Ciaran Walsh, Maria Gomez De Olea
Arden Partners plc
Tel: 020 7614 5900
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/ 2014.
Consolidated Income Statement
for the six months ended 30 September 2018
Notes September September March
2018 2017 2018
GBP GBP GBP
Continuing operations
Revenue 4 2,609,371 2,713,134 5,646,058
Cost of sales (1,856,377) (1,895,053) (3,871,010)
----------------- ------------------- ---------------
Gross profit 752,994 818,081 1,775,048
Administrative expenses (1,005,193) (887,611) (2,078,001)
Investment activities and other income 5 1,028,031 616,803 2,496,808
----------------- ------------------- ---------------
Operating profit 775,832 547,273 2,193,855
EBITDA* 1,187,976 1,005,883 2,890,074
Depreciation (412,144) (458,610) (848,509)
Profit on sale of plant and equipment - - 152,290
----------------- ------------------- ---------------
Operating profit 775,832 547,273 2,193,855
------------------------------------------------- ------ ----------------- ------------------- ---------------
Finance income 6 1,158 9,633 14,680
Finance costs 7 (185,034) (187,135) (379,259)
----------------- ------------------- ---------------
Profit before taxation 591,956 369,771 1,829,276
Taxation 8,301 50,943 52,066
Non-controlling interest 1,115 57 89
----------------- ------------------- ---------------
Profit for the financial period 601,372 420,771 1,881,431
----------------- ------------------- ---------------
Earnings per share from continuing and total
operations 8 7.85p 5.50p 24.58p
*Earnings before interest, taxation, depreciation, profit on
sale of plant and equipment and profit on sale of property.
Consolidated Statement of
Comprehensive Total Income
for the six months ended 30 September 2018
September September March
2018 2017 2018
GBP GBP GBP
Profit for the financial period 601,372 420,771 1,881,431
Sale of investment in own shares - 10,716 17,616
Items that may be reclassified to profit and loss:
Exchange differences 354,152 (557,308) (1,019,393)
Total comprehensive income for the period 955,524 (125,821) 879,654
----------------- ---------------- ----------------
Consolidated Balance Sheet
as at 30 September 2018
Notes September September March
2018 2017 2018
GBP GBP GBP
Non-current assets
Property, plant and equipment 9 15,818,401 15,055,952 14,688,914
Operating leases 253,823 232,955 231,522
Trade and other receivables 904,550 940,568 840,202
Deferred tax asset 641,620 424,898 538,145
17,618,394 16,654,373 16,298,783
----------------- ----------------- -----------------
Current assets
Inventory 28,460 27,305 27,505
Trade and other receivables 2,222,990 1,877,446 1,987,610
Current asset investments 10 729,875 1,130,238 987,580
Cash and cash equivalents 11 1,481,048 1,175,109 2,540,649
4,462,373 4,210,098 5,543,344
Assets classified as held for sale 187,752 185,775 177,033
4,650,125 4,395,873 5,720,377
----------------- ----------------- -----------------
Current liabilities
Trade and other payables (2,322,105) (1,970,255) (1,949,621)
Bank loans and overdrafts 13 (2,361,113) (2,257,885) (2,509,201)
Provisions (314,942) (225,000) (319,000)
(4,998,160) (4,453,140) (4,777,822)
----------------- ----------------- -----------------
Net current assets (liabilities) (348,035) (57,267) 942,555
----------------- ----------------- -----------------
Total assets less current liabilities 17,270,359 16,597,106 17,241,338
Non-current liabilities
Bank loans 13 (1,844,054) (3,204,784) (2,853,471)
Deferred tax liabilities (234,828) (160,709) (150,813)
Net assets 15,191,477 13,231,613 14,237,054
----------------- ----------------- -----------------
Equity
Called-up share capital 11 833,541 833,541 833,541
Share premium account 609,690 609,690 609,690
Capital redemption reserve 5,163,332 5,163,332 5,163,332
Investment in own shares (886,986) (894,576) (886,986)
Translation reserve 59,883 60,311 58,829
Retained earnings 9,412,017 7,458,180 8,457,547
----------------- ----------------- -----------------
Surplus attributable to the parent's
shareholders 15,191,477 13,230,478 14,235,953
Non-controlling interest - 1,135 1,101
Total equity 15,191,477 13,231,613 14,237,054
----------------- ----------------- -----------------
Consolidated Cash Flow Statement
for the six months ended 30 September 2018
Notes September September March
2018 2017 2018
GBP GBP GBP
Cash flows from operating activities
Cash generated from operations 12 383,896 1,011,745 1,318,251
Interest paid (185,034) (187,135) (379,259)
Overseas tax paid (29,926) (30,045) (145,645)
Net cash flow from operating activities 168,936 794,565 793,347
---------------- ---------------- --------------
Investing activities
Sale of property, plant and equipment - - 1,595,227
Purchase of property, plant and equipment (212,525) (760,300) (1,092,873)
Sale of investments 318,940 541,905 717,321
Purchase of investments (72,359) (446,112) (481,799)
Interest received 1,158 9,633 14,680
Net cash flow from investing activities 35,214 (654,874) 752,556
---------------- ---------------- --------------
Financing activities
Investment in own shares - 10,716 17,616
Movement in bank loans (1,085,011) (324,642) (655,392)
Movement in directors' loans 67,083 (3,800) (79,818)
Net cash flow from financing activities (1,017,928) (317,726) (717,594)
---------------- ---------------- --------------
Net (decrease) increase in cash and cash equivalents (813,778) (178,035) 828,309
Cash and cash equivalents at beginning of period 31,448 (979,806) (979,806)
Exchange differences (97,735) 75,065 182,945
Cash and cash equivalents at end of period 13 (880,065) (1,082,776) 31,448
---------------- ---------------- --------------
Reconciliation of net cash flow to movement in net
(debt) in the period
Net (decrease) increase in cash and cash equivalents (813,778) (178,035) 828,309
Net cashflow from the movement in debt 1,085,011 324,642 655,392
---------------- ---------------- --------------
Movement in net (debt) during the period 271,233 146,607 1,483,701
Net (debt) at the beginning of period (2,822,023) (4,677,871) (4,677,871)
Exchange differences (173,405) 243,704 372,147
Net (debt) at the end of period 13 (2,724,195) (4,287,560) (2,822,023)
---------------- ---------------- --------------
Consolidated Statement of Changes in Equity
for the six months ended 30 September 2018
Called-up share Share premium Capital redemption Investment in own Translation reserve Retained earnings Non-controlling Total
capital account reserve shares interest
GBP GBP GBP GBP GBP GBP GBP GBP
At 31 March
2017 833,541 609,690 5,163,332 (904,502) 58,962 7,595,276 1,154 13,357,453
Transactions with owners recorded directly in equity
Sale on
investment
in own
shares - - - - - 17,616 - 17,616
Cost of
investment
in own
shares - - - 17,516 - (17,516) - -
Income
statement
Profit for
the
financial
period - - - - - 1,881,431 (89) 1,881,342
Items that may be reclassified to profit and loss
Exchange
differences - - - - (133) (1,019,260) 36 (1,019,357)
------------------- ------------------ ---------------------- ---------------------- ------------------------ ------------------- ----------------- -----------------------
At 31 March
2018 833,541 609,690 5,163,332 (886,986) 58,829 8,457,547 1,101 14,237,054
Income
statement
Profit for
the
financial
period - - - - - 601,372 (1,115) 600,257
Items that may be reclassified to profit and loss
Exchange
differences - - - - 1,054 353,098 14 354,166
------------------- ------------------ ---------------------- ---------------------- ------------------------ ------------------- ----------------- -----------------------
At 30
September
2018 833,541 609,690 5,163,332 (886,986) 59,883 9,412,017 - 15,191,477
------------------- ------------------ ---------------------- ---------------------- ------------------------ ------------------- ----------------- -----------------------
.
Notes to the Accounts
1. General information
Legal status and country of incorporation
C. H. Bailey plc, company number 190106, is incorporated in
England and Wales under the Companies Act 2006. The address of the
registered office is Alexandra Docks, Newport NP20 2NP.
Basis of preparation
These financial statements have been prepared in accordance with
International Accounting Standards (IAS) and International
Financial Reporting Standards (IFRS) as adopted by the European
Union and with the Companies Act 2006. Therefore these financial
statements comply with the AIM rules.
The financial statements are prepared using the historical cost
basis of accounting except for:
-- Properties held at the date of transition to IFRS which are stated at deemed cost; and
-- Assets held for sale which are stated at the lower of fair
value less anticipated disposal costs and carrying value.
Going concern
The directors have prepared these financial statements on the
fundamental assumption that the group is a going concern and will
continue to trade for at least 12 months following the date of
approval of the financial statements.
Accounting period
The current period is for 6 months ended 30 September 2018 and
the comparative period is for the 6 months ended 30 September
2017.
Functional and presentational currency
The financial statements are presented in pounds sterling
because that is the functional currency of the primary economic
environment in which the group operates.
Adoption of International Financial Reporting Standards
On 1 April 2006 the group adopted IFRS for the first time when
advantage was taken of the following exemptions as permitted by
IFRS 1:
-- The requirements of IFRS 3 - Business Combinations - have not
applied to business combinations that occurred before the date of
transition to IFRS;
-- The carrying value of freehold and leasehold properties are
based on previously adopted UK GAAP valuations and these are now
taken as deemed cost on transition to IFRS.
International Financial Reporting Standards adopted for the
first time this accounting period
There were no new standards or amendments to standards adopted
for the first time this year that had a material impact on the
results or the group.
Future adoption of International Financial Reporting
Standards
A number of new standards, amendments and interpretations to
existing standards have been published by the ISAB but are not yet
effective and have not been applied early by the group. It is
anticipated that the following pronouncements relevant to the
group's operations will be adopted in the group's accounting
policies for the first period beginning after the effective date of
the pronouncement once adopted by the European Union:
-- IFRS 9 Financial instruments (effective 1 January 2018);
-- IFRS 14 Regulatory deferral accounts (effective 1 January
2016 not yet adopted by European Union);
-- IFRS 15 Revenue from contracts with customers (effective 1 January 2018);
-- IFRS 16 Leases (effective 1 January 2019);
-- Sale or contribution of assets between an investor and its
associate or joint venture (amendment IFRS 10 and IAS 28
(deferred);
-- Clarifications to IFRS 15 Revenue from contracts with customers (effective 1 January 2018);
-- Amendments to IFRS 2 Classification and measurement of
share-based payment transactions (effective 1 January 2018);
-- Amendments to IFRS 4 Applying IFRS 9 to IFRS 4 Insurance
contracts (effective 1 January 2018);
-- Annual improvements to IFRS 2014-2016 Cycle - Relating to IAS
28 Investments in associates and joint ventures (effective 1
January 2017);
-- Annual improvements to IFRS 2014-2016 Cycle - Relating to
IFRS 12 Disclosure of interest in other entities (effective 1
January 2018 not yet adopted by European Union);
-- IFRIC Interpretation on foreign currency transactions and
advance considerations (effective 1 January 2018 not yet adopted by
European Union).
The company has assessed the impact of these standards and the
directors do not currently foresee any material impact on the
financial statements of the group as a result of adopting these
standards.
2. Significant accounting policies
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the company and entities controlled by the company
(its subsidiaries) made up to 30 September 2018. Control is
achieved where the company has the power to govern the financial
and operating policies of an investee so as to obtain benefits from
its activities.
Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the group's equity
therein. Non-controlling interests consist of the amount of those
interests at the date of the original business combination (see
below) and the minority's share of changes in equity since the date
of the combination.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the group.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Business combinations and goodwill
The acquisition of subsidiaries is accounted for using the
acquisition method. The assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3
are recognised at their fair value at their acquisition date except
for non-current assets (or disposal groups) that are classified as
held for sale in accordance with IFRS 5 which are recognised and
measured at fair value less costs to sell. Any excess of the cost
over the asset valuation as calculated above is recognised as
goodwill.
In accordance with the options that are available under IFRS 1
on transition to IFRS, the group elected not to apply IFRS 3
retrospectively to past business combinations that occurred before
the date of transition to IFRS.
Accordingly goodwill that had previously been offset against
reserves under UK GAAP has not been recognised in the opening IFRS
balance sheet. The interest of any minority shareholders in the
acquiree is initially measured at the minority's proportion of the
net fair value of the assets, liabilities and contingent
liabilities recognised.
Investments in associates and trade investments
The results of entities over which the group is not in a
position to be able to exercise significant influence despite
holding a significant shareholding are not accounted for as
associates and therefore are not equity accounted. The companies
are classified as trade investments and are carried as available
for sale financial assets which are measured at fair value at the
end of the reporting period. Dividend income is recognised in the
income statement on a receipts basis.
Property, plant and equipment
Property is carried at deemed cost at the date of transition to
IFRS based on the previous UK GAAP valuations. Plant and equipment
held at the date of transition and subsequent additions to
property, plant and equipment are stated at purchase cost including
directly attributable costs. The group does not have a revaluation
policy. Freehold land is not depreciated. Depreciation of other
property, plant and equipment is provided on a straight line basis
using rates calculated to write down the cost of each asset over
its estimated useful life as follows:
Property:
Freehold buildings Between 2% and 3%
Leasehold buildings 5% or period of the lease
Plant and equipment Between 10% and 25%
Annual reviews are made of estimated useful lives and material
residual values.
Investment and development property
Properties are externally valued on the basis of fair value at
the balance sheet date. Investment property is recorded at
valuation whereas trading property is stated at the lower of cost
and net realisable value. Any surplus or deficit arising is
recognised in investment activities in the income statement.
The cost of properties in the course of development includes
attributable interest and other associated outgoings. Interest is
calculated on the development expenditure by reference to specific
borrowings. Interest is not capitalised where no development
activity is taking place. A property ceases to be a development
property on practical completion.
Investment property disposals are recognised on completion.
Profits and losses are recognised in investment activities in the
income statement. The profit on disposal is determined as the
difference between the net sale proceeds and the carrying amount of
the asset at the commencement of the accounting period plus capital
expenditure in the period.
Where investment properties are appropriated to trading stock,
they are transferred at market value. If properties held for
trading are appropriated to investment, they are transferred at
book value.
Lessee accounting
Initial rental payments in respect of operating leases are
included in current and non-current assets as appropriate and
amortised to the income statement over the period of the lease.
Ongoing rental payments are charged as an expense in the income
statement on a straight line basis until the date of the next rent
review. Finance leases are capitalised and depreciated in
accordance with the accounting policy for property, plant and
equipment. As permitted by IFRS 1 at the date of transition to
IFRS, the carrying value of long leasehold properties are based on
the previous UK GAAP valuations and this has been taken as deemed
cost. Rental costs arising from operating leases are charged as an
expense in the income statement on a straight line basis over the
period of the lease.
Non-current assets held for sale
Non-current assets are reclassified as assets held for sale if
they are immediately available for sale in their current condition
and their carrying value will be recovered through a sale
transaction on which is highly probable to be completed within 12
months of the initial classification. Assets held for sale are
valued at the lower of carrying value at the date of initial
classification and fair value less costs to sell.
Impairment of non-financial assets
Goodwill is tested annually for impairment or more frequently if
there are any changes in circumstances or events that indicate that
a potential impairment may exist. Goodwill impairments cannot be
reversed. Property, plant and equipment are reviewed for
indications of impairment when events or changes in circumstances
indicate that the carrying amount may not be recovered. If there
are indications then a test is performed on the asset affected to
assess its recoverable amount against carrying value. An asset
impaired is written down to the higher of value in use or its fair
value less cost to sell.
Deferred and current taxation
The charge for taxation is based on the taxable profit or loss
for the year and takes into account taxation deferred because of
differences between the treatment of certain items for taxation and
for accounting purposes. Full provision is made for the tax effects
of these differences.
Current income tax assets or liabilities comprise those claims
from, or obligations to, fiscal authorities relating to current or
prior periods that are unpaid at the balance sheet date. They are
calculated according to the tax rates and tax laws applicable to
the fiscal periods to which they relate based on the taxable profit
for the year. Deferred tax is calculated using the liability method
on temporary differences. This involves the comparison of the
carrying amounts of assets and liabilities in the consolidated
financial statements with their respective tax bases.
The carrying amount of the deferred tax assets is reviewed at
each reporting balance sheet date to ensure that it is probable
that sufficient taxable profits will be available to allow the
asset to be recovered. Assets and liabilities, in respect of both
deferred and current tax, are only offset when there is a legally
enforceable right to offset and the assets and liabilities relate
to taxes levied by the same taxation authority.
Deferred and current tax is charged or credited in the income
statement except when it relates to items charged directly to
equity in which case the associated tax is also dealt with in
equity.
Stocks
Stocks are valued at the lower cost of purchase and net
realisable value. Cost comprises actual purchase price and, where
applicable, associated direct costs incurred bringing the stock to
its present location and condition. Net realisable value is based
on estimated selling price less further costs expected to be
incurred to completion and disposal. Provision is made for
obsolete, slow moving or defective items where appropriate.
Financial instruments
Financial assets and financial liabilities are recognised on the
consolidated balance sheet when the group becomes a party to the
contractual provisions of the instrument.
Financial assets are recognised and derecognised on a trade date
where the purchase or sale of an asset is under a contract whose
terms require delivery of the investment within the timeframe
established by the market concerned. Financial assets are
classified as "loans and receivables", "held to maturity"
investments, "available for sale" investments or "assets at fair
value through the profit and loss" depending upon the nature and
purpose of the financial asset. The classification is determined at
the time of the initial recognition.
Financial assets are normally classified as "loans and
receivables" and are initially measured at fair value including
transaction costs incurred. The only financial assets currently
held at "fair value through profit or loss" are the current asset
investments.
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the group after deducting all of
its liabilities. There are currently no financial liabilities held
at "fair value through profit or loss".
Loans and receivables
Trade receivables, loans and other receivables are measured on
initial recognition at fair value and, except for short term
receivables where the recognition of interest would be immaterial,
are subsequently re-measured at amortised cost using the effective
interest rate method. Allowances for irrecoverable amounts, which
are dealt with in the income statement, are calculated based on the
difference between the asset's carrying amount and the present
value of estimated future cash flows, calculated based on past
default experience, discounted at the effective interest rate
computed at initial recognition where material.
Derivative financial instruments and hedge accounting
The group has loans held in US dollars which are disclosed in
borrowings and are at fixed rates of 6.25% and 8% and loans held in
euros which are disclosed in borrowings and are at a fixed rate of
4%. The other group loans and overdrafts are subject to floating
interest rates based on LIBOR plus the most competitive margin
available. The group's policy is not to hedge its international
assets with respect to foreign currency balance sheet translation
exposure, nor against foreign currency transactions. The group
generally does not enter into any forward exchange contracts and it
does not use financial instruments for speculative purposes. The
group does not hold any derivative financial instruments or
embedded derivative financial instruments at either period end.
Cash and cash equivalents
Cash and cash equivalents includes cash-in-hand, cash at bank
and short term highly liquid investments that are readily
convertible into known amounts of cash within three months from the
date of initial acquisition with an insignificant risk of a change
in value.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at
each balance sheet date. Financial assets are impaired where there
is objective evidence that, as a result of one or more events that
occurred after the initial recognition of the financial assets, the
estimated future cash flows of the investment have been
impacted.
Other financial liabilities
Other financial liabilities, including trade payables, are
measured on initial recognition at fair value and, except for short
term payables where the recognition of interest would be
immaterial, are subsequently re-measured at amortised cost using
the effective interest rate method.
Bank loans
Interest bearing bank loans are recorded at the proceeds
received less capital repayments made. Finance charges are
accounted for on an accruals basis in the profit and loss account
using the effective interest rate method. They are included within
accruals to the extent that they are not settled in the period in
which they arise.
Provisions
Provisions are created where the group has a present obligation
(legal or constructive) as a result of a past event where it is
probable that the group will be required to settle that obligation.
Provisions are measured at the directors' best estimate of the
expenditure required to settle the obligation at the balance sheet
date. Provisions are only discounted to present value where the
effect is material.
Net funds
Net funds is defined as cash and cash equivalents, bank and
other loans including finance lease obligations and derivative
financial instruments stated at current fair value.
Revenue recognition
Revenue
Revenue represents the fair value of the consideration received
and receivable for services provided and goods supplied to third
party customers. In respect of long term contracts and contracts
for on-going services, revenue is recognised as the contract
progresses on the basis of work completed. Revenue excludes value
added tax.
Investment and interest income
Dividend income is recognised in the income statement when the
shareholder's right to receive payment has been established.
Interest income from bank deposit accounts is accrued on a time
basis calculated by reference to the principal on deposit and
effective interest rate applicable.
Foreign currencies
Transactions in foreign currencies are recorded at the rate of
exchange at the date of the transaction. Monetary assets and
liabilities in foreign currencies are translated into pounds
sterling at the financial reporting year end rates. Non monetary
items that are measured in terms of historical cost in a foreign
currency are not re-translated.
The results of overseas subsidiary undertakings, associates and
trade investments are translated into pounds sterling at average
rates for the year unless exchange rates fluctuate significantly
during that year in which case exchange rates at the date of
transactions are used. The closing balance sheets are translated at
the year end rates and the exchange differences arising are
transferred to the group's translation reserve as a separate
component of equity and are reported within the consolidated
statement of changes in equity. All other exchange differences are
included within the consolidated income statement in the year.
Intercompany foreign exchange differences are included in operating
profit unless deemed to be as permanent as equity in which case are
included in reserves.
Operating profit
Operating profit is defined as the profit for the year from
continuing operations after all operating costs and income but
before finance income, finance costs, and taxation. Operating
profit is disclosed as a separate line on the face of the income
statement.
Normalised operating profit is the same as the above but
excludes non-recurring items, for example profit on the sale of
property. Normalised operating profit is reconciled to operating
profit on the face of the income statement.
Other gains and losses
Other gains and losses are material items that arise from
unusual non-recurring events. They are disclosed separately, in
aggregate, on the face of the income statement after operating
profit where, in the opinion of the directors, such disclosure is
necessary in order to fairly present the results for the financial
period.
Finance costs
Finance costs are recognised in the income statement on the
accruals basis in the year in which they are incurred.
3. Use of critical accounting assumptions and estimates
Estimates and judgements are continually evaluated and assessed
based on historical experience and other factors, including
expectations of future events that are believed to be reasonable
given the circumstances prevailing when the accounts are
approved.
The group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The area where the group
considers estimates and assumptions to have a significant risk of
causing material adjustment to the carrying value of assets and
liabilities.is is in the valuation of investment properties.
4. Segmental information
Classes of business
Investment
Tourism and and development
Engineering serviced units property Management Total
September September September September September September September September September September
2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
Revenue 928,828 846,902 1,680,543 1,866,232 - - - - 2,609,371 2,713,134
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- -------------- ---------------
Profit (loss)
before
investment
activities
and other
income 82,706 111,347 106,583 273,801 (164,418) (130,436) (277,070) (324,242) (252,199) (69,530)
Investment
activities
and other
income - - - - 1,111,353 639,960 (83,322) (23,157) 1,028,031 616,803
-------------- ---------------
Operating
profit 82,706 111,347 106,583 273,801 946,935 509,524 (360,392) (347,399) 775,832 547,273
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- -------------- ---------------
EBITDA 106,706 140,347 468,409 677,366 973,253 535,569 (360,392) (347,399) 1,187,976 1,005,883
(Depreciation)
and profit
(loss) on
sale of
plant and
equipment (24,000) (29,000) (361,826) (403,565) (26,318) (26,045) - - (412,144) (458,610)
-------------- ---------------
Operating
profit 82,706 111,347 106,583 273,801 946,935 509,524 (360,392) (347,399) 775,832 547,273
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- -------------- ---------------
Net assets 660,783 335,665 7,040,823 6,880,888 6,482,222 4,637,662 1,007,649 1,377,398 15,191,477 13,231,613
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- -------------- ---------------
Geographical segments
United Kingdom Africa Malta Rest of World Total
September September September September September September September September September September
2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
Revenue 1,023,471 884,054 1,585,900 1,829,080 - - - - 2,609,371 2,713,134
-------------- ------------- ------------ ------------ --------------- --------------- --------------- --------------- -------------- --------------
Profit (loss)
before
investment
activities
and other
income (73,465) (127,682) 90,087 266,515 (164,418) (130,436) (104,403) (77,927) (252,199) (69,530)
Investment
activities
and other
income 70,098 (42,220) (224,762) 82,192 1,117,311 637,736 65,384 (60,905) 1,028,031 616,803
-------------- --------------
Operating
profit (3,367) (169,902) (134,675) 348,707 952,893 507,300 (39,019) (138,832) 775,832 547,273
-------------- ------------- ------------ ------------ --------------- --------------- --------------- --------------- -------------- --------------
EBITDA 20,633 (140,902) 227,151 752,272 979,211 533,345 (39,019) (138,832) 1,187,976 1,005,883
(Depreciation)
and profit
(loss) on
sale of
plant and
equipment (24,000) (29,000) (361,826) (403,565) (26,318) (26,045) - - (412,144) (458,610)
-------------- --------------
Operating
profit (3,367) (169,902) (134,675) 348,707 952,893 507,300 (39,019) (138,832) 775,832 547,273
-------------- ------------- ------------ ------------ --------------- --------------- --------------- --------------- -------------- --------------
Net assets 791,538 644,374 6,877,038 6,784,749 6,482,222 4,637,662 1,040,679 1,164,828 15,191,477 13,231,613
-------------- ------------- ------------ ------------ --------------- --------------- --------------- --------------- -------------- --------------
5. Investment activities and other income
September September March
2018 2017 2018
GBP GBP GBP
Current asset investments valuation movement (11,124) (91,526) (94,955)
Investment and development property valuation
movement 1,025,509 639,960 2,057,475
Investment and development property rent 85,844 - 3,518
Profit on disposal of property - - 152,290
Net foreign exchange (loss) gain - inter-company
loans 6,449 (196,184) (21,199)
Net foreign exchange gain (loss)- monetary items (173,329) 225,347 372,086
Income from current asset investments 94,682 39,206 27,093
1,028,031 616,803 2,496,308
----------------- ----------------- -----------------
6. Finance income
September September March
2018 2017 2018
GBP GBP GBP
Bank deposits 1,158 9,633 14,680
---------------- ---------------- ---------------
7. Finance costs
September September March
2018 2017 2018
GBP GBP GBP
Bank loans 185,034 187,135 379,259
--------------- --------------- ---------------
8. Earnings per share
The earnings per share has been calculated by reference to the
weighted average number of ordinary shares of 10p each in issue of
7,663,454 (September 2017: 7,650,389) (March 2018: 7,654,016) which
excludes own shares held. The share options in issue have no
dilutive effect on the weighted average number of ordinary shares.
Consequently the diluted earnings per share is the same as the
basic earnings per share in both periods.
9. Property, plant and equipment
Freehold land and Leasehold land and Plant and equipment Investment and Total
buildings buildings under 50 development property
years
GBP GBP GBP GBP GBP
Cost
At 1 April
2018 1,861,409 9,538,746 3,530,322 5,620,938 20,551,415
Exchange
differences ( 188,411) 577,558 134,558 73,590 597,295
Additions 129,637 - 66,199 16,689 212,525
Valuation
movement - - - 1,025,509 1,025,509
At 30
September
2018 1,802,635 10,116,304 3,731,079 6,736,726 22,386,744
---------------------- ------------------- -------------------- --------------------- ----------------
Depreciation
At 1 April
2018 29,719 2,884,067 2,842,906 105,809 5,862,501
Exchange
differences ( 3,008) 174,626 120,695 1,385 293,698
Charge for
period 7,850 238,337 139,639 26,318 412,144
At 30
September
2018 34,561 3,297,030 3,103,240 133,512 6,568,343
---------------------- ------------------- -------------------- --------------------- ----------------
Carrying
value
September
2018 1,768,074 6,819,274 627,839 6,603,214 15,818,401
March 2018 1,831,690 6,654,679 687,416 5,515,129 14,688,914
10. Current asset investments
September September March
2018 2017 2018
GBP GBP GBP
Listed investments 723,874 1,124,237 981,579
Unlisted investments 6,001 6,001 6,001
----------------- ------------- -------------
729,875 1,130,238 987,580
----------------- ------------- -------------
Investments are carried at fair value at the balance sheet
date.
11. Called-up share capital
September September March
2018 2017 2018
GBP GBP GBP
Issued and fully paid:
8,335,413 ordinary shares of 10p each 833,541 833,541 833,541
--------------- ----------- ---------------
On 26 September 2017, the company issued 7,520 ordinary shares
of 10 pence to the directors in lieu of fees payable of GBP10,716.
On 31 March 2018, the company issued 5,750 ordinary shares of 10
pence to the directors in lieu of fees payable of GBP6,900. The
company retains as treasury shares 671,959 shares of 10 pence at a
cost of GBP886,986 (2017: 685,229 shares of 10 pence at a cost of
GBP904,502). The company did not buy back any shares for
cancellation during the year. At 30 September 2018, the company has
one class of ordinary shares, which carry no right to fixed
income.
12. Cash generated from operations
September September March
2018 2017 2018
GBP GBP GBP
Operating profit continuing operations 775,832 547,273 2,193,855
Depreciation 412,144 458,610 848,509
(Profit) on the sale of property, plant and
equipment - - (152,290)
Current asset investments valuation
movement 11,124 91,526 94,455
Investment and development property
valuation movement (1,025,509) (639,960) (2,057,475)
Provision on current asset investments - - -
Exchange differences 217,928 (211,078) (504,054)
------------------- ------------------- -------------------
Cash generated from operations before
movements in working capital 391,519 246,371 423,000
Operating leases (8,283) (454) (9,963)
(Increase) in inventories (955) (1,270) (1,470)
(Increase) decrease in trade and other
receivables (299,728) 1,268,783 1,258,985
Increase (decrease) in trade and other
payables 301,343 (501,685) (352,301)
Cash generated from operations 383,896 1,011,745 1,318,251
------------------- ------------------- -------------------
13. Analysis of net funds (debt)
September September March
2018 2017 2018
GBP GBP GBP
Cash and cash equivalents 1,481,048 1,175,109 2,540,649
Bank loans and overdrafts (2,361,113) (2,257,885) (2,509,201)
--------------- -------------- ----------------
(880,065) (1,082,776) 31,448
Bank loans - non-current (1,844,054) (3,204,784) (2,853,471)
Net (debt) (2,724,119) (4,287,560) (2,822,023)
--------------- -------------- ----------------
14. Significant investment in subsidiaries
Percentage of ordinary share capital Principle activities
held
Industrial:
Bailey Industrial Engineering Limited
(UK) 100% Engineering
Leisure:
Bay Travel Limited (UK) 100% Travel agency
Industrial Investment Corporation SA 100% Tourism
Property Proprietary Limited (South
Africa)
IIC (Malta) Ltd (Malta) 100% Property development
Cordura Limited (Tanzania) 100% Tourism and serviced units
Kimbiji Bay Limited (Tanzania) 100% Property development
Other activities:
Industrial Investment Corporation 100% Holding company
Limited (Bermuda)
Kimbiji Bay Limited (Malta) 100% Holding company
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FKADKOBDDABK
(END) Dow Jones Newswires
December 07, 2018 02:00 ET (07:00 GMT)
C.H. Bailey (LSE:BLEY)
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C.H. Bailey (LSE:BLEY)
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