RNS Number:5007A
Hurlingham PLC
28 March 2006
HURLINGHAM PLC
28 March 2006
Results for the year ended 30 September 2005
Chairman's statement
I am pleased to present the Results of the Group for the year ended 30th
September 2005. My report comments on the activities and results for the year,
but as there have been significant events and decisions taken by the Board since
the year end, I have also commented on those matters below.
Results
Group Profit and loss account
A significant deterioration in the trading performance of the Group's travel
division due to the terrorist bombs in London and Istanbul during the last
quarter of the year to 30th September 2005 has led to increased losses for the
year then ended. Group losses from continuing operations for the year amounted
to #536,000 (2004: #26,000) after allowing for an exceptional charge of
#379,000, relating to the write-off of goodwill referred to below and before net
interest payable of #133,000 (2004: #150,000). Continuing trading losses from
the travel division during the first half of the current year have led to the
Board considering that in view of the increased volatility of the travel
industry, the Group is insufficiently capitalised to be able to assume the level
of risk necessary to generate significant shareholder value from this division.
The Board has therefore decided to dispose of or close its travel interests.
The net assets of the travel division primarily comprised goodwill, with a book
value, after the current year's depreciation, of #379,000 and normal trade
debtors and creditors. The Board has therefore made full provision for this
intangible asset in these accounts, resulting in a retained loss on ordinary
activities for the year of #669,000 (2004: loss #163,000).
Group subsidiaries
Custom Flights Limited
Although Custom Flights Limited increased turnover to #6.9m (2004: #1.1m), the
damage to margins in the last quarter of the year referred to above, resulted in
a loss from continuing operations before taxation and interest of #120,000
(2004: profit #8,000).
Custom Tours Limited
Sales at Custom Tours Limited, the Group's hotel booking company, declined to
#265,000 (#346,000) and the loss on ordinary activities increased to #158,000
after allowing for an exceptional write down of goodwill amounting to #76,000
(2004: loss #85,000).
Bettagrade Limited
Turnover at the Group's hotel in Perth increased to #1,088,000 (2004:
#1,016,000) and operating profit increased to #225,000 (2004: #204,000).
Group Balance sheet and shareholders funds
Despite the losses incurred by the travel division, the Group's hotel has
continued to trade well. This asset has increased in value significantly since
it was last valued in January 2004 and the Group's residential properties have
maintained their value. The external valuation of the hotel in January 2006,
which the Board considers is representative of the position at 30th September
2005, has confirmed a valuation of #4.5m at that date. This compares with a
book value at 30th September 2005 of #3,367,000 and accordingly a valuation
surplus before taxation of approximately #1.13m has been recorded for this
asset.
After taking account of the trading losses from continuing operations for the
year, interest payable and the unrealised valuation surplus on the Perth hotel
of approximately #1.13m referred to above, a net increase in Shareholders Funds
of approximately #464,000 has arisen during the year ended 30th September 2005.
This net increase has increased Shareholders Funds to #2.9m.
Outlook
As mentioned above, the continuing losses at the travel division during the
first half of the current financial year have led to the Board's decision to
dispose of or close the Group's travel interests. Overall losses and the
anticipated disposal costs are currently estimated at approximately #600,000 and
accordingly Shareholders Funds are estimated at approximately #2.3m at the
present time.
Strategy
In view of these results, the Board considers that the Group is insufficiently
capitalised to be able to generate significant shareholder returns from the
existing property and hotel operations and due to its small size it cannot
readily increase its equity capital to the level required. The losses incurred
by the travel division since the year end have increased the borrowings and debt
across the Group to levels higher than those experienced in previous years. As
a result, the Board has taken the decision to sell the Group's London properties
and, in principle, subject to shareholder consent, to sell the Group's hotel in
Perth, and it expects these sales will realise at least the book values of the
properties concerned at 30th September 2005. The Board intends to repay Group
borrowings from the proceeds of these sales and believes that thereafter, the
Group will be positioned to acquire new businesses or to merge with other
operations from a position of greater financial strength.
Dividend
In view of the circumstances outlined above and the current deficiency on the
Company's retained Profit and Loss reserve, the Board has decided not to pay a
dividend for the year to 30th September 2005. However, the matter will be kept
under review in future periods as the realisations referred to above are
completed
Charles Llewellyn
Chairman
Consolidated profit and loss account
for the year ended 30 September 2005
2005 2004
# #
Turnover:
Continuing operations 8,340,605 2,556,958
________ ________
Cost of sales before goodwill amortisation (7,411,542) (1,716,508)
Goodwill amortisation (25,398) (25,398)
Exceptional item:
Provision for impairment of intangible fixed assets (378,871) -
________ ________
Cost of sales (7,815,811) (1,741,906)
________ ________
Gross profit 524,794 815,052
Administrative expenses (1,060,734) (841,022)
________ ________
Operating loss
Continuing operations (535,940) (25,970)
Profit on disposal of fixed assets - 13,458
________ ________
Loss on ordinary activities before interest and taxation (535,940) (12,512)
Net interest payable (132,658) (150,194)
________ ________
Loss on ordinary activities before and after taxation
transferred to reserves (668,598) (162,706)
======== ========
Loss per share
Basic (32.2)p (8.0)p
Diluted (32.1)p (8.0)p
======== ========
Balance Sheet
At 30 September 2005
Group
2005 2004
# #
Fixed Assets
Intangible assets - 404,269
Tangible assets 5,254,838 4,151,163
Investments - -
_________ _________
5,254,838 4,555,432
_________ _________
Current Assets
Stock 2,602 3,097
Debtors 468,948 430,780
Cash at bank and in hand 291,313 577,541
_________ _________
762,863 1,011,418
Creditors: due within one year (1,187,513) (1,137,760)
_________ _________
Net current (liabilities)/assets (424,650) (126,342)
_________ _________
Total assets less current liabilities 4,830,188 4,429,090
Creditors: due after one year (1,885,000) (2,005,000)
_________ _________
Net assets 2,945,188 2,424,090
========= =========
Capital and reserves
Called up share capital 1,579,280 1,534,280
Share premium account 362,454 350,454
Revaluation reserve 1,599,155 466,459
Profit and loss account (595,701) 72,897
_________ _________
Equity shareholders' funds 2,945,188 2,424,090
========= =========
Consolidated cash flow statement
for the year ended 30 September 2005
2005 2004
# # # #
Net cash (outflow)/inflow from operating (51,478) 394,059
activities
Returns on investments and servicing of
finance
Interest received 12,221 10,199
Interest paid (146,900) (157,552)
_________ _________
Net cash outflow from returns on investments
and servicing of finance (134,679) (147,353)
Taxation
UK corporation tax recovered - 52
Capital expenditure and financial
investments
Purchase of operating assets (43,002) (59,317)
Sale of investment properties - 515,568
_________ _________
Net cash (outflow)/inflow from capital
expenditure and financial investment (43,002) 456,251
_________ ________
(229,159) 703,009
Equity dividends paid - 193
_________ ________
Net cash (outflow)/inflow before financing (229,159) 703,202
Management of liquid resources
Cash transferred to treasury operations - (150,000)
Cash transferred from treasury operations 150,000 -
_________ _________
(79,159) 553,202
Financing
Issue of new shares 57,000 22,582
Bank loan repaid (100,000) (469,575)
Capital element of finance lease rental (14,069) (17,899)
payments _________ ________
Net cash outflow from financing (57,069) (464,892)
_________ _________
(Decrease)/increase in cash (136,228) 88,310
========= =========
Reconciliation of net cash flow to movement in net debt
for the year ended 30 September 2005
2005 2004
# #
(Decrease)/increase in cash in year (136,228) 88,310
Cash outflow from movement in debt 114,069 483,756
________ ________
Net movement in year (22,159) 572,066
Net debt at 1 October 2004 (1,736,528) (2,308,594)
___________ __________
Net debt at 30 September 2005 (1,758,687) (1,736,528)
=========== ==========
A copy of the Annual Report and Accounts for the year ended 30 September 2005
will be sent to all shareholders this morning and is available form the
Company's registered office.
This information is provided by RNS
The company news service from the London Stock Exchange
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