TIDMSYG
RNS Number : 1269J
Speymill PLC
27 June 2011
27 June 2011 AIM:SYG
Speymill plc ("Speymill" or "the Company")
Preliminary Results 2010
Speymill, the multinational property services group, which
encompasses real estate investments, investment management services
and construction operations, announces its preliminary results for
the year ended 31 December 2010.
Speymill plc
Denham Eke, Chief Executive Officer
Tel: 01624 640 860
Nominated Adviser
Smith & Williamson Corporate Finance Limited
Azhic Basirov
Siobhan Sergeant
Tel: 020 7131 4000
Chairman's statement
In our interim report, I reported on the events that would see
our Group undergo a significant restructuring as a result of the
termination of our investment management agreement ("IMA") with
Speymill Deutsche Immobilien Company plc ("SDIC") and the
acquisition by SDIC of our German subsidiary, GOAL service GmbH
("GOAL"). I am pleased to have the opportunity to report further on
the developments in relation to these transactions as part of the
group's annual report for the year ended 31 December 2010.
Results
During the year ended 31 December 2010, the Group returned a
profit before tax of GBP5.98 million, compared to a full year
profit for the year ended 31 December 2009 of GBP0.54 million.
These results include a profit of GBP6.78 million in relation to
the termination agreement for the investment management agreement
with SDIC for services provided by the Group's Isle of Man
subsidiary, Speymill Property Group Limited ("SPG"). The
consideration received by the Group from SDIC in respect of the
termination was primarily in the form of residential property
assets in Germany, through the transfer of two companies from SDIC
to the Group.
Excluding the termination of the IMA with SDIC, the Group's
property fund management and property services businesses recorded
a loss before tax for the year of GBP1.37 million (2009: profit of
GBP4.56m). The reduction in this performance, year on year,
reflects the fact that the IMA with SDIC was terminated with effect
from 1 June 2010.
These results also include a profit of GBP1.44 million in
respect of the sale of GOAL to SDIC, which became effective on 18
November 2010. As part of the agreement to sell GOAL to SDIC, the
Group agreed to retain ownership of one subsidiary of GOAL - GOAL
construction GmbH.
The profit generated from the group's German property
investments was GBP0.15 million. This represents the profit since
the date of acquisition of 94.9% of the shares in each of the two
property owning companies.
Speymill Contracts Limited ("Speymill Contracts") has continued
to see a satisfactory improvement in performance, as reported in
both the previous annual report and the interim report for 2010.
For the full year, Speymill Contracts made a loss before tax of
GBP0.59 million (2009: loss of GBP3.8m) and although this does not
yet represent a return to profitability it does reflect continued
improvement achieved within the disciplined and risk managed
approach undertaken at Speymill Contracts. We expect 2011 to be a
profitable year for Speymill Contracts on enhanced turnover.
The Group's turnover for the year was GBP33.43 million, a
decrease of 14.8% on the turnover of GBP39.24m in 2009, reflecting
a combination of the turnover in respect of the IMA with SDIC, a
change in turnover at Speymill Contracts and the disposal of
GOAL.
The tax charge for the year is GBP0.25 million (2009: GBP0.46m)
and this substantially relates to the activities of Group's former
German property services division, GOAL, prior to the disposal of
that business. A much smaller proportion relates to the activities
of Speymill Property Group (Far East) Limited ("SPGFE"), our Hong
Kong-based investment advisory subsidiary.
Financial position
The Group's financial position has improved significantly with
net assets of GBP3.39 million at 31 December 2010, compared to a
net liability position of GBP2.16 million as at 31 December
2009.
As I reported in our annual statement for 2009, Bob MacDonald
and I agreed to amend the terms of the shareholder loan agreement,
which was originally put in place in January 2009, in order to
provide a new revolving loan facility with an increased limit of
GBP5.77 million that will expire on 31 July 2011. As at 31 December
2010, a total of GBP2.90 million of this facility had been drawn
down by the Group, excluding accrued interest.
The Board of Directors had previously stated an intention to
undertake a general offer to all shareholders, which would be
undertaken in connection with a conversion of the element of the
shareholder loan which relates to me. The Board of Directors have
reconsidered the position and believe that the prevailing
conditions do not merit a general offer and conversion of the
current shareholder loan at this time. As a consequence, I have
agreed to provide a further shareholder loan facility to the Group.
The facility will be provided by myself and Burnbrae Limited and
will have a limit of GBP5 million and will expire on 30 June 2012.
The interest rate will reduce to 8% on any sums drawn down, a
reduction from the 9% on the original loan. All other terms remain
as per the previous facility.
Speymill Deutsche Immobilien Company plc and GOAL service
GmbH
As announced on 23 July 2010 and reported in the Group's interim
report for 2010, the Group entered a formal agreement with SDIC to
terminate the IMA during the course of the year.
The effective date for the termination of the investment
management agreement was 1 June 2010 but, as part of the agreement
with SDIC, the Group entered into an interim agreement to continue
providing investment management services to SDIC until 16 August
2010.
As announced on 17 November 2010, the Group entered into an
agreement to sell its wholly owned German subsidiary, GOAL, to
SDIC. As part of this agreement the Group agreed to retain
ownership of Goal construction GmbH, itself a wholly owned
subsidiary of GOAL. The consideration received from SDIC included
amounts to settle outstanding intercompany balances due between
those entities being sold to SDIC and the remainder of the Group.
The Group realised a profit of GBP1.44 million on the sale of GOAL.
Following the sale of GOAL, the Group has no remaining contractual
relationships with SDIC to supply investment management, property
management or any other services.
The consideration received by the Group in respect of the
disposal of GOAL was in the form of convertible loan notes, the
terms of which are as follows:
-- Repayable or convertible at SDIC's option;
-- Conversion at the average closing price of SDIC's shares over
a 90 day period following the completion of its debt
restructuring;
-- Interest equal to the gross yield on the 2 year German
Government bond plus margin of 1.5%; and
-- Maturity on 31 May 2011.
The Group notes the recent events at SDIC, including the
cancellation of trading in shares of SDIC on AIM as well as the
announcements made by SDIC on 7 March 2011 and 25 May 2011
regarding on-going negotiations with an investment consortium. As a
result of discussions between the Group and SDIC an amount has been
paid by SDIC, after 31 December 2010, to the Group in settlement of
outstanding interest and loan note principal amounts. The Directors
remain optimistic regarding the probability of settlement of the
outstanding loan notes due from SDIC but have decided to take the
prudent step of making a provision of GBP0.54 million in relation
to the fact that there is no certainty regarding the outcome of the
on-going negotiations between SDIC and the investment consortium.
The carrying value of the loan notes now stands at GBP1.25
million.
German Property Investment
As part of the arrangement to terminate the Group's IMA with
SDIC, the Group acquired 94.9% of each of two former subsidiaries
of SDIC. These two entities, Horsfield Limited and Wyatt Limited,
each own German residential investment properties. The gross value
of the properties across both companies is in excess of EUR26.42
million.
It is the Group's intention to use the ownership of these two
companies as a basis to create a focussed, conservatively leveraged
German residential investment platform. Progress is being made in
respect of this, and we expect to announce news on this before the
calendar year is over. It should be noted that the Burnbrae Group,
part of the trust of which I am a life tenant, owns and operates a
substantial residential and commercial portfolio in Germany, and
has done so successfully for a number of years. The expertise of
Burnbrae will be helpful in our building of a substantial German
facing business.
Speymill Contracts
Following the substantial restructuring exercise which was
undertaken at Speymill Contracts, the Group has been encouraged by
the consistent improvement in results from this company in spite of
the general economic environment. For the year ending 31 December
2010, Speymill Contracts reported a loss before tax of GBP0.59
million (2009: GBP3.8m). Whilst this does not yet represent a
return to profitability, it is a significant improvement and does
reflect the on-going commitment and hard work of the management and
staff at that business in conjunction with the risk managed
overview at Group level.
Turnover at Speymill Contracts increased by 22.9% to GBP14.99
million in 2010 (2009: GBP12.2 million). I am also pleased to
report that before the end of March 2011 Speymill Contracts had
already secured a pipeline of GBP30 million confirmed orders for
2011.
We believe that Speymill Contracts has a strong future as the
leading builder of budget hotels in the UK, but we remain committed
to the focus on the risk management which has underpinned this
company's recent improvement.
Update on Far Eastern activities
As I reported in the Group's interim report for 2010, the Group
announced on 28 June 2010 that it had received notice from Speymill
Macau Property Company plc ("Speymill Macau") to terminate the
investment management agreement between Speymill Macau and SPG. The
notice period for this investment management agreement is twelve
months and therefore it is currently expected it will terminate on
28 June 2011.
Through SPG and its Hong Kong based subsidiary, Speymill
Property Group (Far East) Limited ("SPGFE"), the Group continues to
work with the board of directors of Speymill Macau during the
notice period of the investment management agreement in line with
its contractual obligations.
Restructuring
The Group has continued with steps to downsize its operating
costs following the reduction in staff reported in the previous
annual report and the further reductions of overheads commented
upon in the interim report. This is entirely consistent with the
approach which I reported on in our interim report, namely to
utilise a level of infrastructure and overhead which is appropriate
to the activities of the Group.
As reported in the interim report for 2010 and on 26 January
2011, this has also seen changes to the composition of the Board of
Directors of Speymill plc. On 30 July 2010, the Group announced
that both Howard Flight and Paul Smith were to resign from the
Board of Directors. On 26 January 2011, it was announced that Bob
MacDonald, then Chief Executive Officer, and Sir James Mellon, a
non-Executive Director, were to resign from the Board of Directors.
I would like to take this opportunity to thank each of Bob, Sir
James, Howard and Paul for their contributions to the Group.
In connection with the resignations of Bob MacDonald and Sir
James Mellon, it was announced that I would assume the role of
Executive Chairman and that Denham Eke would assume the role of
Chief Executive Officer. The Directors consider that the current
composition of the Board, comprising myself, Denham Eke and Lincoln
Forrest, a non-Executive Director, is appropriate for the current
period of restructuring. The Board of Directors will continue to
review the composition of the Board to ensure that it is
appropriate for the needs of the Group.
As a result of taking steps to reduce overheads and to ensure
that sufficient working capital is available through the increased
and extended shareholder loan facility noted above, the Directors
are of the opinion that it remains appropriate to prepare the
Group's financial statements on a "going concern" basis. Please
also refer to note 1 of the consolidated financial statements for
further details.
Outlook
Speymill continues to look to all opportunities to increase
value for its shareholders, and will concentrate on the nurturing
and growth of its German property investment activities and its
activities at Speymill Contracts. The year ahead should see us make
considerable progress in both areas. The restoration of high and
consistent profitability for Speymill is the predominant aspiration
of the whole Board.
Jim Mellon
Chairman
24 June 2011
Consolidated income statement
For the year ended 31 December 2010
2010 2010 2010 2009 2009 2009
Continuing Discontinued Continuing Discontinued
Operations Operations Total Operations Operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ----------- ------------- --------- ----------- ------------- ---------
Turnover 15,533 17,897 33,430 12,191 27,046 39,237
Cost of sales (13,213) (12,612) (25,825) (11,770) (11,285) (23,055)
----------------- ----------- ------------- --------- ----------- ------------- ---------
Gross profit 2,320 5,285 7,605 421 15,761 16,182
----------------- ----------- ------------- --------- ----------- ------------- ---------
General
administrative
expenses (2,816) (6,340) (9,156) (4,054) (10,969) (15,023)
Share-based
payments (61) (15) (76) (143) (63) (206)
Profit on
disposal of
operations - 8,173 8,173 - - -
----------------- ----------- ------------- --------- ----------- ------------- ---------
Total operating
costs (2,877) 1,818 (1,059) (4,197) (11,032) (15,229)
----------------- ----------- ------------- --------- ----------- ------------- ---------
(Loss)/profit
from
operations (557) 7,103 6,546 (3,776) 4,729 953
Net finance
costs (616) 48 (568) (412) 1 (411)
----------- ------------- --------- ----------- ------------- ---------
(Loss)/profit on
ordinary
activities
before
taxation (1,173) 7,151 5,978 (4,188) 4,730 542
Taxation - (253) (253) - (462) (462)
----------------- ----------- ------------- --------- ----------- ------------- ---------
(Loss)/profit on
ordinary
activities
after taxation (1,173) 6,898 5,725 (4,188) 4,268 80
----------------- ----------- ------------- --------- ----------- ------------- ---------
Attributable to:
Owners of the
Company (1,181) 6,898 5,717 (4,188) 4,268 80
Non-controlling
interest 8 - 8 - - -
----------------- ----------- ------------- --------- ----------- ------------- ---------
(1,173) 6,898 5,725 (4,188) 4,268 80
----------------- ----------- ------------- --------- ----------- ------------- ---------
(Loss)/earnings
per share
(pence)
----------------- ----------- ------------- --------- ----------- ------------- ---------
Basic (2.02) 11.81 9.79 (7.18) 7.32 0.14
----------------- ----------- ------------- --------- ----------- ------------- ---------
Diluted (2.02) 11.81 9.79 (7.18) 7.32 0.14
----------------- ----------- ------------- --------- ----------- ------------- ---------
Consolidated statement of comprehensive income
For the year ended 31 December 2010
2010 2010 2010 2009 2009 2009
Continuing Discontinued Continuing Discontinued
Operations Operations Total Operations Operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ----------- ------------- -------- ----------- ------------- --------
(Loss)/profit for
the year (1,173) 6,898 5,725 (4,188) 4,268 80
-------------------- ----------- ------------- -------- ----------- ------------- --------
Other comprehensive
income:
Revaluation of
available-for-sale
financial assets - (135) (135) - 354 354
Currency
translation
differences on
foreign
operations (202) (80) (282) - (75) (75)
--------------------
Total comprehensive
(loss)/ income for
the year (1,375) 6,683 5,308 (4,188) 4,547 359
-------------------- ----------- ------------- -------- ----------- ------------- --------
Statements of financial position
As at 31 December 2010
31-Dec 31-Dec 31-Dec 31-Dec
2010 2010 2009 2009
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- -------- -------- --------
Non-current assets
Intangible assets-goodwill - - 2 -
Property, plant and equipment 153 17 1,010 45
Investments in subsidiaries
and joint ventures - 1,129 - 1,291
Investment property 22,626 - - -
Available-for-sale financial
assets 1,287 - 573 -
Total non-current assets 24,066 1,146 1,585 1,336
-------------------------------- -------- -------- -------- --------
Current assets
Due from customers for
contract work 1,228 - 577 -
Trade and other receivables 2,734 17,289 6,319 12,785
Cash and cash equivalents 1,551 212 59 413
Total current assets 5,513 17,501 6,955 13,198
Total assets 29,579 18,647 8,540 14,534
-------------------------------- -------- -------- -------- --------
Equity
Capital and reserves
Ordinary share capital 584 584 583 583
Share premium 34 34 34 34
Share-based payments
reserve 1,105 1,105 1,988 1,989
Other income reserve (562) 45 (432) -
Retained income/(loss) 2,493 719 (4,336) 372
-------------------------------- -------- -------- -------- --------
Equity attributable to
owners of the Company 3,654 - (2,163) -
Non-controlling interest (269) - - -
Total equity 3,385 2,487 (2,163) 2,978
-------------------------------- -------- -------- -------- --------
Non-current liabilities
Deferred tax liabilities - - 493 -
Obligations under finance
leases - - 1 1
Interest Bearing Loans 14,915 - - -
Derivative Financial
Instruments 838 - - -
Shareholders' loan 3,241 3,241 2,421 2,421
-------------------------------- -------- -------- -------- --------
Total non-current liabilities 18,994 3,241 2,915 2,422
-------------------------------- -------- -------- -------- --------
Current liabilities
Bank overdraft 989 - 1,765 -
Trade and other payables 3,643 12,918 3,854 9,132
Due to suppliers for
contract work 2,212 - 1,033 -
Obligations under finance
leases 1 1 2 2
Current tax liabilities 355 - 1,134 -
Total current liabilities 7,200 12,919 7,788 9,134
-------------------------------- -------- -------- -------- --------
Total liabilities 26,194 16,160 10,703 11,556
Total equities and liabilities 29,579 18,647 8,540 14,534
-------------------------------- -------- -------- -------- --------
Consolidated statement of changes in equity
For the year ended 31 December 2010
Attributable
Ordinary Other Retained to owners
share Share Share-based income income/ of the Non-Controlling Total
capital premium payment reserve (loss) parent Interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- --------- -------- ------------ -------- --------- ------------- ---------------- --------
Balance at 31
December 2008 583 34 1,815 (729) (4,416) (2,713) - (2,713)
Profit the year - - - - 80 80 - 80
Other comprehensive
income for the
year:
Revaluation of
available-for-sale
financial assets - - - 354 - 354 - 354
Currency
translation
differences on
foreign
operations - - - (75) - (75) - (75)
Transactions with
owners, recorded
directly in
equity:
Share based
payments:
- share options
charge - - 127 - - 127 - 127
- deferred share
plan - - 79 - - 79 - 79
Own shares acquired
(76,782 shares)
(i) - - - (15) - (15) - (15)
Own shares
distributed
(74,228 shares) - - (33) 33 - - - -
Balance at 31
December 2009 583 34 1,988 (432) (4,336) (2,163) - (2,163)
-------------------- --------- -------- ------------ -------- --------- ------------- ---------------- --------
Profit the year - - - - 5,717 5,717 8 5,725
Other comprehensive
income for the
year:
Revaluation of
available-for-sale
financial assets - - - (135) - (135) - (135)
Currency
translation
differences on
foreign
operations - - - (282) - (282) - (282)
Acquisition of
subsidiaries - - - 242 - 242 - 242
Transactions with
owners, recorded
directly in
equity:
Share based
payments:
- share options
charge - - 58 - - 58 - 58
- deferred share
plan - - 18 - - 18 - 18
Disposal of
subsidiary - - (212) - 410 198 - 198
Shares issued in
the year (77,273) 1 - (9) - 9 1 - 1
Own shares
distributed
(165,269 shares) - - (45) 45 - - - -
Lapsed/forfeited
share options - - (693) - 693 - - -
Arising on
acquisition of
subsidiaries (ii) - - - - - - (277) (277)
Balance at 31
December 2010 584 34 1,105 (562) 2,493 3,654 (269) 3,385
-------------------- --------- -------- ------------ -------- --------- ------------- ---------------- --------
(i) During 2009 the Company acquired 76,782 of its own shares
relating to the deferred bonus awards. The shares are held in the
employment trust.
(ii) In 2010 the Group acquired 94.9% of the share capital of
Horsfield Limited and Wyatt Limited, refer to note 7.
Consolidated statement of cash flows
For the year ended 31 December 2010
Notes 31-Dec 31-Dec
------
2010 2009
------
GBP'000 GBP'000
---------------------------------------------- ------ -------- ---------
Cash in/(out)flows from operating activities
Net cash in/(out)flow from operations 11,525 (989)
Taxation paid (1,295) (362)
---------------------------------------------- ------ -------- ---------
Net cash in/(out)flow from operating
activities 10,230 (1,351)
Cash flows from investing activities
Interest received 37 11
Cash acquired on acquisition of subsidiaries 294 -
Cash held by subsidiary on disposal 7 (750) -
Loan notes received (1,238) -
Disposal/write-off of investments 148 -
Subsequent expenditure on investment
properties 11 (78) -
Transfer to investment/foreign exchange
reserve (6,773) -
Net purchase and disposal of property,
plant and equipment 10 (310) (427)
---------------------------------------------- ------ -------- ---------
Net cash outflow from investing activities (8,670) (416)
Cash flows from financing activities
Issue of equity shares 22 1 -
Shareholders' loan drawdown 18 680 3,191
Shareholders' loans repayments 18 (213) (1,015)
Facility fees paid 18 14 (13)
Finance lease principal repayments (1) (13)
Repayment of interest bearing loans (40) (16)
Interest paid (407) (158)
Interest rate swap valuation movement 4 (210) -
---------------------------------------------- ------ -------- ---------
Net cash (out)/inflow from financing
activities (176) 1,976
---------------------------------------------- ------ -------- ---------
Net increase in cash and cash equivalents 1,384 209
---------------------------------------------- ------ -------- ---------
Translation 884 38
Cash and cash equivalents at beginning
of year (1,706) (1,953)
---------------------------------------------- ------ -------- ---------
Net cash and cash equivalents at end
of year 562 (1,706)
---------------------------------------------- ------ -------- ---------
Cash and cash equivalents comprise
Bank balances 1,551 59
Bank overdraft used for cash management
purposes (989) (1,765)
---------------------------------------------- ------ -------- ---------
Cash and cash equivalents in the statement
of cash flows 562 (1,706)
---------------------------------------------- ------ -------- ---------
Cash generated from operations
Profit from operations 6,546 953
Adjusted for:
Depreciation of tangible assets 10 497 483
Share-based payments charge 20 76 206
Decrease in receivables 1,057 8,032
Increase/(decrease) in payables 3,349 (10,663)
---------------------------------------------- ------ -------- ---------
Net cash in/(out)flow from operations 11,525 (989)
---------------------------------------------- ------ -------- ---------
Notes to the consolidated financial statements
1 Reporting entity
Speymill plc is a public limited company incorporated and
domiciled in the Isle of Man (referred to as the Company). The
address of the Company's registered office is 1st Floor, Regent
House, 16-18 Ridgeway Street, Douglas, Isle of Man, IM1 1EN.
The consolidated financial statements of the Company as at and
for the year ended 31 December 2010 comprise the Company and its
subsidiaries (together referred to as the "Group" and individually
as "Group entities") and the Group's interest in jointly controlled
entities. The Group is primarily involved in real estate investment
management, construction operations, property management and
property investment.
1.1 Basis of preparation
(a) Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
("IFRSs") and its interpretations adopted by the International
Accounting Standards Board ("IASB").
Going concern
The Board is of the opinion that it has secured sufficient
finance in order to enable the Group to continue trading and that
it is appropriate to prepare these accounts on a going concern
basis. In support of this opinion, the Board has undertaken a
budgeting process for its remaining business units for the 18 month
period to 30 June 2012.
Speymill have in place a shareholder loan facility (the
"Existing Facility") entered into with Jim Mellon, Burnbrae Limited
and Bob MacDonald (the "Lenders") on 23 June 2010 that is due to
expire on 31 July 2011. Further to the announcement on 24 June
2011, Jim Mellon and Burnbrae Limited have agreed to a new extended
facility (the "Extended Facility").
The overall limit of the principal on the Extended Facility is
GBP5 million and it will expire on 30 June 2012. The interest rate
charged on the Existing Facility was reduced to 9% per annum
(previously 12% per annum) with effect from December 2010. With
effect from the commencement of the Extended Facility on 1 July
2011, the interest rate will further reduce to 8% per annum. All
other terms remain the same.
The purpose of the Extended Facility is to provide the working
capital that Speymill needs in order to continue to trade through
the financial year ended 31 December 2011 after the restructuring
process resulting from the changes in activity in 2010.
Based on the current budgeted activity, which is projected until
30 June 2012, the Directors believe that sufficient working capital
facilities are in place.
Speymill committed to reducing the size of its Isle of Man-based
head office and investment management operations and its
London-based investment advisory function commensurate with the
reduced level of activity in its asset management businesses. The
Group's London office closed in April 2011 and the activities at
the Isle of Man-based head office have been reduced. Further
restructuring and down-sizing will take place during the coming
months in line with the revised level of activity.
Speymill has also renewed its overdraft facility with its bank,
Lloyds TSB Bank plc, until 30 June 2011. The overdraft limit was
renewed at GBP1,000,000 and will reduce by GBP250,000 on 1 June
2011 to GBP750,000. The Board is currently in discussion with the
bank to extend the facility further.
2 Segmental information
The Group has six reportable segments, as described below, which
are the Group's strategic business units. The strategic business
units offer different products and services, and are managed
separately because they require different technology and marketing
strategies. The following summary describes the operations in each
of the Group's reportable segments:
-- United Kingdom construction and refurbishment
-- Property fund management
-- Property services (comprising both discontinued and
discontinuing operations)
-- Property investment
-- Other
31 December 2010
Continuing Continuing Continuing Discontinuing Discontinued Discontinuing
Operations Operations Operations Operations Operations Operations
United
Kingdom
Construction Property
and Property Property Property Fund
Refurbishment Investment Other Services Services Management Elimination Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- -------------- ------------- ------------- ---------------- ------------- -------------- ------------ ---------
External revenue 14,987 546 - 412 13,544 3,941 - 33,430
Inter-segment
revenue - - 2,218 - 1,627 829 (4,674) -
------------------- -------------- ------------- ------------- ---------------- ------------- -------------- ------------ ---------
Total segment
revenue 14,987 546 2,218 412 15,171 4,770 (4,674) 33,430
------------------- -------------- ------------- ------------- ---------------- ------------- -------------- ------------ ---------
Reportable segment
(loss)/profit
from operations
before
share-based
payments (486) 417 46 (837) (1,382) 7,476 1,388 6,622
Share-based
payments (9) - (52) - (12) (3) - (76)
Finance income - 210 3 17 22 18 - 270
Finance costs (93) (478) (386) (308) 259 168 - (838)
------------------- -------------- ------------- ------------- ---------------- ------------- -------------- ------------ ---------
Reportable segment
(loss)/profit
before tax (588) 149 (389) (1,128) (1,113) 7,659 1,388 5,978
------------------- -------------- ------------- ------------- ---------------- ------------- -------------- ------------ ---------
Depreciation (106) - (32) (3) (347) (9) - (497)
Reportable segment
assets 3,501 23,429 1,808 9 - 1,368 (536) 29,579
Reportable segment
liabilities (5,726) (16,484) (3,422) (388) - (174) - (26,194)
Segment capital
expenditure (10) - - - (300) - - (310)
------------------- -------------- ------------- ------------- ---------------- ------------- -------------- ------------ ---------
31 December
2009
Continuing Continuing Continuing Discontinuing Discontinued Discontinuing
Operations Operations Operations Operations Operations Operations
United
Kingdom
Construction Property
and Property Property Property Fund
Refurbishment Investment Other Services Services Management Elimination Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- -------------- ------------- ------------- ---------------- ------------- -------------- ------------ ---------
External revenue 12,191 - - 2,501 16,273 8,272 - 39,237
Inter-segment
revenue - - 2,765 - 2,895 839 (6,499) -
------------------- -------------- ------------- ------------- ---------------- ------------- -------------- ------------ ---------
Total segment
revenue 12,191 - 2,765 2,501 19,168 9,111 (6,499) 39,237
------------------- -------------- ------------- ------------- ---------------- ------------- -------------- ------------ ---------
Reportable segment
(loss)/profit
from operations
before
share-based
payments (3,613) - 507 7 1,907 2,532 (181) 1,159
Share-based
payments (34) - (108) - (90) 26 - (206)
Finance income - - 9 - 1 1 - 11
Finance costs (154) - (429) - 161 - - (422)
------------------- -------------- ------------- ------------- ---------------- ------------- -------------- ------------ ---------
Reportable segment
(loss)/profit
before tax (3,801) - (21) 7 1,979 2,559 (181) 542
------------------- -------------- ------------- ------------- ---------------- ------------- -------------- ------------ ---------
Depreciation (120) - (30) (3) (320) (10) - (483)
Reportable segment
assets 1,453 - 239 1,192 4,031 2,764 (1,139) 8,540
Reportable segment
liabilities (4,993) - (2,512) (866) (3,020) (451) 1,139 (10,703)
Segment capital
expenditure (8) - (19) - (397) (3) - (427)
------------------- -------------- ------------- ------------- ---------------- ------------- -------------- ------------ ---------
Discontinued/discontinuing operations
The Group has determined that two lines of business meet the
criteria to be treated under IFRS 5 as Non-current assets held for
sale or discontinued operations. The two lines of business treated
as discontinued operations are as follows:
-- The Group's property services business
-- That part of the Group's property fund management business
which relates to the management of the property investment fund
Speymill Deutsche Immobilien Company plc ("SDIC")
In addition, the Group has determined that activities in
relation to its Investment Management Agreement (IMA) with Speymill
Macau Property Company plc ("Macau") should be treated as
discontinuing as a result of the fact that notice has been served
on this agreement by Macau and all activities will cease on 28(th)
June 2011.
The analysis of the business lines deemed to be discontinued and
discontinuing is shown on the face of the Consolidated Income
Statement and in the related notes. The comparative results have
been re-presented to show the continuing and
discontinued/discontinuing split.
The cash flows arising from discontinued or discontinuing
operations are as follows:
Cash flow of discontinued/ing 2010 2009
operations GBP'000 GBP'000
------------------------------- --------- ---------
Operating cash flows 8,381 (144)
Investing cash flows (8,268) (350)
Financing cash flows (40) 9
------------------------------- --------- ---------
Total cash flows 73 (485)
------------------------------- --------- ---------
3 Profit/(loss) from operations
2010 2010 2010 2009 2009 2009
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ----------- ------------- -------- ----------- ------------- --------
Operating
profit/(loss)
is stated
after
charging/
(crediting):
Depreciation:
- owned assets 134 359 493 142 333 475
- leased
assets 4 - 4 8 - 8
Operating
lease
charges:
- land and
buildings 127 663 790 177 701 878
- equipment
and motor
vehicles 100 389 489 194 303 497
Net foreign
exchange loss
/ (gain) 32 (362) (330) 2 298 300
--------------- ----------- ------------- -------- ----------- ------------- --------
Auditors'
remuneration:
Audit of
parent
company and
consolidated
financial
statements 36 - 36 32 - 32
Audit of
subsidiary
company
financial
statements 23 82 105 25 102 127
Tax services 18 74 92 19 33 52
Other services - 9 9 46 2 48
77 165 242 122 137 259
--------------- ----------- ------------- -------- ----------- ------------- --------
All the above costs have been charged to the income
statement.
4 Share-based payments
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
2010 2010 2010 2009 2009 2009
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- ----------- ------------- -------- ----------- ------------- --------
Share
options 25 33 58 73 54 127
Provision
for share
issue 36 (18) 18 70 9 79
61 15 76 143 63 206
----------- ----------- ------------- -------- ----------- ------------- --------
5 Net finance costs
2010 2010 2010 2009 2009 2009
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ----------- ------------- -------- ----------- ------------- --------
Bank
interest
receivable - 40 40 9 2 11
Other
interest
receivable 3 17 20 - - -
Change in
fair value
of
derivative
financial
instruments 210 - 210 - - -
------------- ----------- ------------- -------- ----------- ------------- --------
213 57 270 9 2 11
------------- ----------- ------------- -------- ----------- ------------- --------
Bank charges
and
interest
payable (181) (9) (190) (189) (1) (190)
Interest
charge on
interest
bearing
loans (308) - (308) - - -
Shareholder
loan
interest
and
facility
fees (339) - (339) (231) - (231)
Finance
lease
charges (1) - (1) (1) - (1)
(829) (9) (838) (421) (1) (422)
------------- ----------- ------------- -------- ----------- ------------- --------
Net finance
costs (616) 48 (568) (412) 1 (411)
------------- ----------- ------------- -------- ----------- ------------- --------
6 Taxation
Tax charge
2010 2010 2010 2009 2009 2009
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Foreign income tax on
subsidiary - 794 794 - 531 531
Previous year's (over)
/ under provision - - - - (91) (91)
Total current tax - 794 794 - 440 440
------------------------ ----------- --------------- ---------- ------------- ----------------- ----------
Deferred tax (541) 22
---------- ----------
Original and reversing
of timing differences - (541) - 22
----------- --------------- ------ ------------- ----------------- ------
Total tax charge - 253 253 - 462 462
------------------------ ----------- --------------- ---------- ------------- ----------------- ----------
Factors affecting the tax charge
for the year
2010 2010 2010 2009 2009 2009
Continuing Discontinued Continuing Discontinued
Operations operations Total operations operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit/(loss) on
ordinary activities
before taxation (1,173) 7,151 5,978 (4,188) 4,730 542
------------------------ ----------- --------------- ---------- ------------- ----------------- ----------
Isle of Man income tax
@ 0% (2009: 0%) - - - - - -
Higher rates on
overseas earnings - 253 253 - 553 553
Adjustments in respect
of prior periods - - - - (91) (91)
Tax expense per the
income statement - 253 253 - 462 462
------------------------ ----------- --------------- ---------- ------------- ----------------- ----------
7 Profit/(loss) on disposal of operations
The acquisition had the following effect on the Group's assets
and liabilities:
Wyatt Limited Horsfield Limited
Recognised Values Recognised Values
on Acquisition on Acquisition
at Fair Value at Fair Value Total
GBP'000 GBP'000 GBP'000
------------------------- -------------------- ------------------- --------
Acquiree's net assets at
the acquisition date
Net liabilities (1) (1,879) (3,274) (5,153)
Inter-company loans 4,894 6,890 11,784
------------------------- -------------------- ------------------- --------
Net identifiable assets 3,015 3,616 6,631
------------------------- -------------------- ------------------- --------
Contractual consideration:
Assigned value of Horsfield & Wyatt
(EUR8,628,910) 7,122
Fair value adjustment (491)
----------------------------------------------- ------------------- --------
6,631
----------------------------------------------- ------------------- --------
Loan notes issued (EUR362,020) 308
----------------------------------------------- ------------------- --------
6,939
----------------------------------------------- ------------------- --------
(1) Amounts shown are 94.9% of net liabilities acquired at date of
acquisition
The difference between the sterling equivalent of the profit
recognised (GBP6,785,000) and the assets received (GBP6,939,000) is
the result of a foreign exchange gain arising between the date the
income was recognised and the date the assets were received.
The terms of the loan notes are as follows:
-- SDIC issued 362 convertible loan notes with a nominal value
of EUR1,000 each on 16 November 2010. These loan notes bear
interest at 2% per annum and are repayable at any time up until the
final redemption date of 31 May 2011 at the discretion of SDIC.
-- SDIC has the right at any time up to, and including the final
redemption date to convert all or some of the notes then
outstanding into fully paid Ordinary Shares by serving written
notice on SPG on a date specified in such notice, being not sooner
than the last day of the conversion pricing period.
-- The conversion pricing period is a period of ninety days, the
first day of which being when SDIC makes a public announcement to
the effect that the general banking facilities of the SDIC Group
have been extended by all material creditors on revised conditions
for at least the following twelve months.
-- The conversion price is the mean average of the prices at
which SDIC's shares trade at the close of business on each business
day falling during the conversion pricing period.
The fair values of the investment properties at 31 December 2010
have been arrived at on the basis of a valuation carried out as at
30 June 2010, by DTZ Zadelhoff Tie Leung GmbH, independent valuers
that are not related to the Group. The Directors deem this
valuation to be appropriate as at the year end, as there have been
no significant indicators of impairment or factors identified which
may affect the value of the investment properties during that
period. The Group also acquired the interest rate swap contracts
associated with the interest-bearing loans, in order to fix the
interest rate payable on the bank borrowings.
Disposal of subsidiary, GOAL service GmbH
On 17 June 2010, Speymill Property Group (UK) Limited ("SPGUK"),
a wholly owned subsidiary of Speymill, reached agreement on a heads
of terms with Speymill Deutsche Immobilien Company plc ("SDIC"), to
dispose of GOAL service GmbH ("GOAL"), which carried out the
Group's property services. The disposal was completed on 18
November 2010, on which date control passed to SDIC, with the
exception of the Group retaining 100% equity interest in GOAL
construction GmbH (a wholly owned subsidiary company of GOAL). The
total consideration received was GBP792,005 (EUR932,000 converted
at an exchange rate of 1.177), and in addition an amount of
GBP674,734 (EUR794,000 converted at an exchange rate of 1.177) was
received in settlement of outstanding intercompany balances.
The carrying amount of the assets and liabilities of GOAL
(excluding GOAL construction GmbH) at the date of disposal were as
follows:
Net assets disposed of
18 November 2010
GBP'000
-------------------------------------------- -----------------------
Total non-current assets 644
Trade and other receivables 1,721
Cash and cash equivalents 750
Trade and other payables (3,942)
-------------------------------------------- -----------------------
Aggregate net liabilities disposed of (827)
Total consideration received in loan notes
(EUR932,000) 792
-------------------------------------------- -----------------------
Initial profit on disposal 1,619
-------------------------------------------- -----------------------
Less:- Intercompany loan write-off (178)
-------------------------------------------- -----------------------
Profit on disposal of subsidiary 1,441
-------------------------------------------- -----------------------
The consideration, and settlement of agreed outstanding
intercompany balances, was satisfied by the issue of convertible
loan notes in SDIC totalling GBP1,466,440 (EUR1,726,000 converted
at an exchange rate of 1.177). The convertible loan notes issued
are on identical terms as those issued in respect of the
termination of the IMA with SDIC.
The convertible loan notes have been classified as
available-for-sale financial assets and have been measured at fair
value with future resulting gains and losses recognised directly in
equity.
Subsequent to issuing the loan notes, trading in SDIC shares on
AIM were suspended pending clarification of its financial position.
Since the suspension had been in place for six months, trading on
AIM of SDIC's shares was cancelled. The suspension of its shares,
and subsequent cancellation of its AIM listing, has triggered a
default event.
8 Earnings/(loss) per share
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
2010 2010 2010 2009 2009 2009
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- ------------- ----------- ----------- ------------- -----------
(Loss)/earnings
for the year (1,181) 6,898 5,717 (4,188) 4,268 80
----------------- ----------- ------------- ----------- ----------- ------------- -----------
Basic weighted
average number
of shares in
issue 58,388,918 58,388,918 58,388,918 58,312,282 58,312,282 58,312,282
Employee share
options and
provisions for
share issue - - - - - -
(Loss)/earnings
per ordinary
share (pence) (2.02) 11.81 9.79 (7.18) 7.32 0.14
Dilutive effect
of employee
share options - - - - - -
----------- ------------- -----------
Diluted
(loss)/earnings
per share
(pence) (2.02) 11.81 9.79 (7.18) 7.32 0.14
----------------- ----------- ------------- ----------- ----------- ------------- -----------
9 Intangible assets - goodwill
Group
Cost GBP'000
------------------------------------ --------
At 1 January 2010 4,121
Reduction - Disposal of subsidiary (6)
------------------------------------ --------
At 31 December 2010 4,115
------------------------------------ --------
Amortisation and impairment
At 1 January 2010 4,119
Reduction - Disposal of subsidiary (4)
------------------------------------ --------
At 31 December 2010 4,115
------------------------------------ --------
Net book value at 31 December 2010 -
------------------------------------ --------
Group
Cost GBP'000
---------------------------------------- --------
At 1 January 2009 and 31 December 2009 4,121
---------------------------------------- --------
Amortisation and impairment
At 1 January 2009 4,115
Change in acquisition cost (1) 4
---------------------------------------- --------
At 31 December 2009 4,119
---------------------------------------- --------
Net book value at 31 December 2009 2
---------------------------------------- --------
10 Property, plant and equipment
Leasehold Fixtures
property and Motor
improvements equipment vehicles Total
Group GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------------- --------------- --------- ----------
Cost
At 1 January 2010 656 1,404 10 2,070
Additions 293 194 - 487
Disposals (172) (5) - (177)
Derecognised on disposal
of subsidiary (589) (1,089) - (1,678)
Exchange adjustments (28) (55) - (83)
At 31 December 2010 160 449 10 619
------------------------- -------------- --------------- --------- ----------
Depreciation
At 1 January 2010 273 777 10 1,060
Charge for the year 158 339 - 497
Disposals - (14) - (14)
Derecognised on disposal
of subsidiary (310) (725) - (1,035)
Exchange adjustments (11) (31) - (42)
At 31 December 2010 110 346 10 466
------------------------- -------------- --------------- --------- ----------
Net book value at 31
December 2010 50 103 - 153
------------------------- -------------- --------------- --------- ----------
At 31 December 2010 the net carrying amount of equipment and
motor vehicles held under finance leases was GBP1,746 (2009:
GBP2,978). Depreciation charged in the year on assets held under
finance leases was GBP4,663 (2009: GBP7,581).
Leasehold
property Fixtures and Motor
improvements equipment vehicles Total
Group GBP'000 GBP'000 GBP'000 GBP'000
------------------ ----------------- ----------------- ---------- --------
Cost
At 1 January 2009 453 1,118 127 1,698
Additions 195 232 - 427
Disposals - (24) (117) (141)
Exchange
adjustments 8 78 - 86
At 31 December
2009 656 1,404 10 2,070
------------------ ----------------- ----------------- ---------- --------
Depreciation
At 1 January 2009 112 352 114 578
Charge for the
year 142 335 6 483
Disposals - (23) (104) (127)
Exchange
adjustments 19 113 (6) 126
At 31 December
2009 273 777 10 1,060
------------------ ----------------- ----------------- ---------- --------
Net book value at
31 December
2009 383 627 - 1,010
------------------ ----------------- ----------------- ---------- --------
11 Shareholders' loan
2010 2010 2009 2009
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- -------- -------- -------- --------
Opening balance as at 1 January 2,421 2,421 - -
Shareholders' loan drawdowns 680 680 3,191 3,191
Facility fees charged 14 14 72 72
Interest charged 339 339 190 190
Shareholders' loan repayments (213) (213) (1,015) (1,015)
Facility fees paid - - (13) (13)
Interest paid - - (4) (4)
-------- -------- -------- --------
Closing balance as at 31 December 3,241 3,241 2,421 2,421
----------------------------------- -------- -------- -------- --------
Additional information regarding the shareholders' loan is set
out in note 1.
The balance outstanding on the shareholders' loan at the year
end comprising principal, accrued interest and facility fee is
attributable to the following:
2010 2010 2009 2009
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- -------- -------- -------- --------
Jim Mellon 2,943 2,943 2,193 2,193
Bob MacDonald 298 298 228 228
-------------------------------------- -------- -------- -------- --------
Closing balance as at 31 December
2010 3,241 3,241 2,421 2,421
-------------------------------------- -------- -------- -------- --------
12 Subsequent Event
As announced on 27 June 2011, a further shareholder loan
facility will be provided by Jim Mellon and Burnbrae Limited and
will have a limit of GBP5 million and will expire on 30 June 2012.
The interest rate for the new facility will be 8% with all other
terms remaining as per the previous facility.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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