TIDMDBAY
RNS Number : 6342E
Douglasbay Capital PLC
10 April 2011
11 April 2011
DouglasBay Capital plc
Audited Final Results for the year to 31 December 2010
DouglasBay Capital plc (AIM: DBAY), the active value investment
company, today announces final results for the year to 31 December
2010.
Highlights
-- Successful disposal of TDG completed in March 2011 for a
total cash consideration of GBP208m. Transaction secures a very
attractive return for DouglasBay, equivalent to an IRR of over
30%.
- TDG revitalised and transformed under DouglasBay
ownership:
- Underlying operating profit on a like-for-like basis(1)
improved by 31% in just two years, in spite of economic
recession
- Rapid de-leveraging achieved; successful transition to asset
light business model
- Expansion in high growth specialist markets and important new
business wins
- Excellent overall 2010 performance
-- Strong 2010 full year results for DouglasBay - underlying
operating profit up 14% at GBP25.7m; underlying EPS of 1.50p (2009:
1.34p), up 12%; basic EPS of 1.11p (2009: 0.89p), up 25%.
-- Substantial debt reduction achieved - net borrowing down by
58% to GBP36.5m at year end (2009: GBP86.7m). Following the
disposal of TDG and further property sales, the Group is now fully
de-geared and has a strong cash position.
-- In line with investment policy, a proposal to return capital
to shareholders by way of a Tender Offer to buy back up to 1.23bn
of ordinary shares at a price of 16.35p per share. Details of the
Tender Offer will be forwarded to Shareholders later this week.
-- DouglasBay team now assessing in depth a small number of
larger Majority Investment prospects; first Minority Investment
made in high potential US social media business. New investments
will be financed through existing cash resources and ad-hoc capital
raisings and share placements, with underwriting support from Laxey
Partners.
(1) before DouglasBay management charges and adjusting for lease
payments arising from planned property sales
David Panter, Chairman, commented: "This has been an exciting
and defining period for DouglasBay during which we have
successfully realised value from our largest investment and
delivered strong full year 2010 operating results in challenging
markets. The revitalisation of TDG prior to its onward sale, all
achieved in a little over two years, has met our expectations and
demonstrated our wide ranging skills in identifying, acquiring,
revitalising and managing active value investment opportunities.
Current market conditions continue to create some strong new
prospects and we are working hard in pursuit of opportunities where
we believe our approach can deliver attractive returns."
Alex Paiusco, Chief Executive Officer, commented: "2010 was a
good year, with the successful disposal of TDG securing a very
attractive return for DouglasBay, equivalent to an IRR of more than
30% over less than two and half years under our ownership. This is
an outstanding achievement by the whole team given the difficult
economic conditions that surrounded the company during the period
of our ownership. We are now pleased to be in the position to
reward the investors who have supported us over the past years
through the proposed capital return. We will continue to work hard
assessing new opportunities with a view to returning to the market
to raise new funds for new specific investments, with the support
of our seed investor Laxey Partners. 2010 has been a notable year
but it's only the start of our journey."
For further information please visit www.douglasbaycap.com or
contact:
DouglasBay Capital plc Peel Hunt LLP ((Nominated Adviser
& Broker)
Alex Paiusco, Chief Executive Guy Wiehahn
Tel: 01624 690900 Tel: 020 7418 8893
Chairman's Statement
Introduction
This latest annual report, the third since our incorporation and
listing in late 2008, covers an exciting and defining period for
DouglasBay. During the last financial year and in the current year
to date we have successfully realised value from our largest
investment and delivered strong full year 2010 operating results in
challenging markets. In line with our investment policy, we are
pleased to be in a position today to propose a capital return to
shareholders to reward them for their support over the past
years.
Disposal of our investment in TDG
The main event for DouglasBay in 2010 was the announcement in
November of the sale of our major investment, the logistics
business TDG, to Norbert Dentressangle SA, for cash proceeds of
GBP208m. Completed recently in March, this investment is a real
success story for DouglasBay. The revitalisation of TDG prior to
its onward sale, all accomplished in a little over two years, has
met our expectations and demonstrated DouglasBay's wide ranging
skills in identifying, acquiring, revitalising and managing active
value investment opportunities.
We are pleased also that TDG is transferring to a buyer who is
well placed to support the company in the next stage of its
development. The transformation of TDG under our ownership has been
achieved due in no small part to TDG's skilled and motivated
workforce. I want to thank all of TDG's employees for their
outstanding service and wish them every success in the future.
With the sale completed this March, TDG traded as part of
DouglasBay for the full financial year 2010. Throughout this period
the company performed strongly, delivering the anticipated
improvements from the far reaching revitalisation programme
implemented in 2009.
Chief Executive, Alex Paiusco, provides a more detailed report
on progress across the Group in the Investment Review that follows.
During 2010 we operated in three business streams - TDG, DouglasBay
Property Group and Minority Investments, the latter including the
investments in TLIT which have now been substantially realised.
Results
Total underlying operating profit, before exceptional items, was
ahead 14% at GBP25.7m (2009: GBP22.5m) on revenues of GBP678.3m
(2009: GBP662.1m). Underlying profit before tax improved by 39% to
GBP18.9m (2009: GBP13.6m) and underlying earnings per share by 12%
to 1.50p (2009: 1.34p).
Profit before tax, after reduced exceptional charges of GBP7.3m
due mainly to lower rationalisation costs and net finance charges
of GBP6.8m, was significantly higher at GBP11.6m (2009: GBP4.1m).
Earnings per share on the same measure was up strongly at 1.11p
(2009: 0.89p).
As in 2009, cash generation was a key priority and over the
course of the year the Group's financial position was again
significantly improved through strong operational cash flows from
TDG and proceeds from property disposals and holdings in TLIT,
together reducing net debt to GBP36.5m (2009: GBP86.7m). In the
current year, following receipt of all proceeds from the TDG
disposal as well as further property disposals, the Group holds a
substantial cash position. This is a fine achievement.
Further details of these results are contained in the Finance
Director's review.
Return of Cash to Shareholders
Having indicated at the time of the TDG disposal that we would
evaluate capital returns following realisations, a return of funds
by way of a Tender Offer to buy back ordinary shares at a price of
16.35p per share, subject to certain conditions, and limited to 89%
of the fully diluted share capital as at today (that is all
ordinary shares currently in issue together with any ordinary
shares that would be issued if existing share options were fully
exercised) will be proposed to shareholders. Should all
shareholders accept this Tender a total amount of GBP200m would be
returned, although management in the company has already indicated
that they will not participate in full in the Tender. This is
considered the most efficient way of rewarding shareholders for
their support in making the TDG investment. A circular setting out
details of the Tender Offer, along with copies of the 2010 Annual
Report & Accounts and Notice of AGM, will be forwarded to
shareholders later this week.
Next steps and prospects
DouglasBay has achieved a great deal in its short history and
our strategy from the outset has remained broadly unchanged.
However, as we are still a relatively young company I have asked
Alex Paiusco to expand on our approach in the CEO's Investment
Review that follows. Our successful investment in TDG is an
excellent example of how we work.
Looking to the immediate future, current market conditions are
creating some strong new prospects and we are working hard in
pursuit of opportunities where we believe our approach can generate
attractive returns. We will continue to take a cautious and highly
disciplined approach but will move decisively when opportunities
meet our strict investment criteria.
It remains for me to thank all our Group colleagues for their
commitment and hard work in building DouglasBay and you, our
shareholders, for your continued support.
David Panter
Non-executive Chairman,
11 April 2011
CEO's Investment Review
Overview
2010 was a good year for DouglasBay.
The year culminated in the successful disposal of TDG for a
total cash consideration of GBP208m. Announced in November and
completed in March this year, following competition clearance from
the EU Commission, the transaction secured a very attractive return
for DouglasBay, equivalent to an internal rate of return of more
than 30% during less than two and half years under our ownership.
This result was achieved against a backdrop of considerable global
economic uncertainty with a very conservative level of leverage on
the investment.
Looking ahead, we will build on this major success, but before
outlining our investment approach in more detail, let me first
recap on just how much was achieved at TDG under our ownership.
TDG and the sale to Norbert Dentressangle
We acquired TDG at the height of the financial crisis in October
2008, less than a month after the collapse of Lehman Brothers. At
once we moved decisively to implement a wide ranging revitalisation
plan focused on cash generation, return on investment and cost
control, working in conjunction with a new management team, under
the leadership of Mike Branigan, CEO of TDG and Ian Pringle, TDG's
Head of HR/Strategy.
To establish a more competitive cost base immediately, Mike
merged two divisions into a single company, cut all non-essential
overheads and relocated central functions, closing the London head
office. Attention then turned to business growth, with a focus on
expanding presence in specialised markets including 4PL transport
and freight forwarding, and high growth regions such as Central
& Eastern European.
The more active management of TDG's substantial property
portfolio was a key element of our investment case. To facilitate
this we established DouglasBay Property Group (DBPG), whose task
was to assist TDG in maximizing value through selective disposals
via sale & leasebacks, moving the company to a more asset-light
business model, in line with standard industry practice. Along with
improvements to operational cash generation, these cash inflows
enabled over 80% of bank debt taken on at the time of the
acquisition to be repaid by 31 December 2010.
The improvements in financial performance speak for themselves.
Over the period of our ownership we grew the underlying operating
profit by over 30% on a like-for-like basis, this during an
economic recession.
TDG performance improvement 2008 to
2010
2008 2009 2010
GBPm GBPm GBPm
Underlying Operating Profit(1) 26.8 26.0 27.2
- Operating margin % 3.7% 3.9% 4.0%
Like-for-like Underlying Operating
Profit(2) 26.8 28.8 35.0
- Growth % 7.5% 21.5%
- Operating margin % 3.7% 4.4% 5.2%
Year End Net Debt 132.5 73.8 21.8
Underlying Operating Profit(1) per GBP3,678 GBP3,983 GBP4,399
Employee (GBP)
Like-for-like Underlying Operating GBP3,678 GBP4,412 GBP5,661
Profit(2) per Employee (GBP)
Notes:
(1) Underlying operating profit before DouglasBay management
charges
(2) Underlying operating profit before DouglasBay management
charges and adjusting for lease payments
arising from planned property sales
Norbert Dentressangle will be an excellent owner of the
business. The strategic fit with TDG is strong and the combination
gives TDG scale and global reach. We wish TDG, its management and
staff continued success under the new ownership.
Our Investment Approach
DouglasBay's successful investment in TDG powerfully illustrates
the benefits of our active value investment model which can be
simplified in four phases.
- Our first step is to seek out good businesses which are
undervalued but where mispricing is due to temporary issues such as
liquidity constraints, poor coverage or sub-scale operations,
rather than any fundamental decline. Opportunities are generated
in-house through proprietary screening models or through our wide
network of contacts. We then rigorously research these companies to
identify insights and establish the extent of the value gap.
Adopting a balanced view at all times, we strive to understand
potential investments in detail. Then we seek clarity from the
outset of a value creation path which can lead to financial returns
that potentially exceed our minimum hurdle rates.
- Having identified a target, step two of our approach is to
secure the business on attractive terms. Here, our in-house
expertise in trading in listed securities, structuring transactions
in an innovative and flexible way, raising the optimal debt and
mezzanine financing, provides an important means to create
potentially higher returns on the investment for our
shareholders.
- With ownership secured, we integrate rapidly with management
teams as business partners to support in implementing a detailed
value creation plan. At this stage we take an active 'hands-on'
approach, focusing on cash generation, return on investment and
control of costs as well as strategy and investment to drive
business growth.
- Once performance under our ownership has been optimised and we
see that DouglasBay is no longer the best home for a business, the
final step is to ensure value realisation and the return of
proceeds to shareholders, retaining some funds to secure minority
positions in new investments prior to executing new transactions.
In the case of TDG our decision to accept the offer from Norbert
Dentressangle was thoroughly weighted against the option of further
developing the business and the risk reward profile compared to the
specific offer that was received.
DouglasBay has important advantages when implementing this
business model. We have an established core team with skills to
handle the entire investment cycle in-house, combining expertise in
mergers and acquisitions, private equity and hedge fund investing
with operational and financial skills in the management and
revitalisation of companies. This allows us toact rapidly and
decisively when opportunities meet our strict investment criteria.
We think this approach is a key differentiator.
New investments - target markets and progress to date
In future we intend to organise our investing activities into
two categories.
DouglasBay's core focus, and our principle area of activity,
will be in assembling and revitalising a diversified portfolio of
larger businesses where we can apply our expertise to generate
attractive returns for shareholders. Termed Majority Investments
and operating across a range of sectors, in these instances we
intend to take a majority or even 100% control, utilising leverage
prudently to enhance returns. We envisage at any one time an active
portfolio of businesses, some in the process of revitalisation,
others trading successfully earning above-average returns on
capital, and a third group nearing the realisation stage where a
third party is better placed to support the next stage of
development.
In terms of new investments, whilst uncertainty and volatility
remain prominent features in the market, this year we see
substantially more attractive risk reward profiles than in the
recent past. In particular we feel that though many companies in
the recession cleaned up their businesses and are now coming out
stronger, in some instances this has not been reflected in their
market prices, creating substantial value arbitrage opportunities.
We have stepped up our research efforts and are now assessing in
depth a small number of specific opportunities.
Our target investment universe comprises currently over 5,000
companies listed on European stock exchanges with market
capitalisations around or below GBP200m. We see high return
potential in this small and mid-market universe given that some of
these businesses, although fundamentally sound, are either unloved
by investors or mismanaged.
A second smaller area of activity, classified as Minority
Investments, will involve DouglasBay holding minority positions in
either deeply undervalued listed companies or unlisted high growth
businesses. In the case of listed minority positions, DouglasBay
will aim to hedge market risk when appropriate and thus generate
alpha returns. Some of these positions may over time develop into
Majority Investments. At that point we will approach markets to
raise the required capital, with the support of underwritten
facilities from our largest investor to date, Laxey Partners.
In the case of unlisted minority positions DouglasBay will
ensure risk protection through the negotiation of extensive
minority rights. In this area DouglasBay may also provide very
selectively initial funding to businesses with high growth
potential and likely with a focus on technology, energy and other
fast developing sectors. This area of investment is more
opportunistic but offers very high potential returns for
shareholders. We are selective and measured in our approach,
adopting the same rigour as for larger transactions.
In the autumn we made a first investment in this area, injecting
an initial GBP0.3m out of a total cost of investment of GBP1.3m, to
take a 21% shareholding in an early stage social media business
based in the United States. Two further tranches of investment will
be made in the first half of the current year, with the service
anticipated to launch mid-year. We are deploying DouglasBay's
financial, operational and marketing expertise to assist with the
company's development. A further 2% shareholding of the company
will be owned by DouglasBay employees, who have invested on similar
terms to DouglasBay.
TDG
With the sale to Norbert Dentressangle completing this March,
TDG traded as part of DouglasBay for the full financial year 2010.
Throughout this period the company performed very strongly,
benefiting from a full year of benefits from the revitalisation
programme implemented in 2009. Headline numbers mask the extent of
the turnaround achieved but adjusting for lease payments arising
from planned property sales totalling GBP7.8m (2009: GBP2.8m) and
DouglasBay management charges of GBP3.0m (2009: GBP1.2m) - as shown
in the table at the start of this section - like-for-like
underlying operating profits of GBP35.0m (2009: GBP28.8m) were 22%
higher than last year's strong outturn. This was an exceptional
performance in markets only slowly emerging from recession.
DouglasBay Property Group
Working alongside TDG, DouglasBay Property Group made further
rapid progress in maximising value from TDG's real estate
portfolio. Further sales have been completed in the current year,
as detailed in the Financial Review.
TLIT
Over the year we made good progress in liquidating our listed
minority investments in TLIT, comprising a number of legacy tea
plantation assets. This process is now substantially complete.
Outlook
The macroeconomic outlook remains uncertain. Seldom have we
witnessed a situation where the divergence of views amongst experts
is so broad. In the same newspaper on the same day one can find
contrasting reports about fears of deflation and inflation.
Positive sentiment about economic recovery at the end of last year
has now been subdued by the recent sad events in Japan and the
tensions in the Middle East. It will take years for the global
economy to digest the pre-2008 exuberance and its consequences. But
at the same time this environment can present opportunities.
During 2010 we demonstrated the strength of DouglasBay's
investment approach. We have an outstanding team of dedicated,
experienced and highly motivated individuals with complementary
backgrounds. This makes us confident about our ability to identify
and secure attractive new opportunities that can create superior
returns for our investors.
I would like to take the opportunity of this annual report to
express my deepest thanks to the whole DouglasBay team, to our
Non-executive directors and the Board who have been so supportive
of the management team in very challenging times, and to our
investors who supported us through this journey. In particular, on
behalf of the entire management team, I would like to thank our
main backer and shareholder, Laxey Partners and thus our
Non-Executive Director Colin Kingsnorth, for providing us with the
opportunity in 2008 to prove our unique investment approach.
This has been a notable year for DouglasBay but it's only the
start of our journey.
Alex Paiusco
Chief Executive Officer
11 April 2011
Financial Review
Introduction
Last years annual report was our first covering a full 12 months
of trading, following the acquisitions of TDG and TLIT and our
listing on the LSE AIM market, together completed in early October
2008. These results for the period 1 January to 31 December 2010
therefore represent the first time that investors can compare
DouglasBay's performance with a full prior year reporting period. A
table in the CEO's Investment Review above well illustrates the
year-over-year improvements at TDG.
Readers should further note that following the signing in
November 2010 of the conditional agreement to sell the Group's
largest investment, the logistics business TDG, its operating
results have been presented in the consolidated income statement as
discontinued for the 2010 and 2009 periods, and as held-for-sale
assets and liabilities in the 2010 period consolidated statement of
financial position, all as required by IFRS 5. When reading these
statements we believe that total results for the 2010 and 2009
periods, both of which include a full years trading from TDG,
provide the most meaningful comparison of DouglasBay's year-on-year
performance. TDG's sale to Norbert Dentressangle completed in March
of the current year. Our 2011 reporting period will include the
period of TDG trading up until 28 March.
DouglasBay results
DouglasBay's strengthened financial position by the year end
reflected strong trading results and further success in
deleveraging the Group. As at 31 December 2010, Group net debt had
been cut to GBP36.5m (2009: GBP86.7m), a 58% reduction in the 12
month period and close to 80% decrease from the position just two
years previously. Major factors contributing to the GBP50.2m
reduction in 2010 were improved operational cash flows of GBP22.4m
(2009: GBP9.1m) and strong progress with planned property sales. In
the case of the former, the Group benefited from lower exceptional
cash outflows when compared to the prior year, and a full year's
benefit from the revitalisation plan implemented at TDG in 2009.
Net cash proceeds from external property sales totalled GBP47.0m,
as TDG accelerated its move towards a more asset-light business
model.
Over the period, consolidated net assets fell to GBP122.8m from
GBP133.5m, due primarily to an GBP18.2m decrease, before deferred
tax, in TDG's defined benefit pension scheme surplus calculated on
an IAS 19 basis, and the settlement of the TLIT put options for
GBP5.8m.
As at 31 December, the balance sheet contained GBP321.7m of
assets held for sale, comprising GBP308.9m of assets relating to
the sale of TDG and three properties for disposal. Since the year
end, three additional property disposals, one held by TDG and two
by DBPG, have been completed for proceeds totalling GBP19.7m and a
profit of GBP7.1m. In the current year, following receipt of cash
proceeds from the sale of TDG sale, the Group has approximately
GBP212m in net cash, part of which will be returned to shareholders
as stated in our investment strategy.
Group financing
Throughout the period of our ownership of TDG, debt finance was
provided by an asset backed facility from a syndicate led by
Burdale Financial Limited, scheduled to mature in October 2013.
This facility was originally for borrowings of up to GBP165.0m. An
additional facility of up to GBP16.0m, available from funds managed
by Laxey Partners, was unused and expired in August 2010.
At 31 December 2010 the Burdale facility comprised three
elements, a property facility of up to GBP40.6m, a receivables
facility of up to GBP65.0m and an equipment facility of up to
GBP4.4m. At the year end total borrowings under the facility were
GBP53.8m (2009: GBP89.8m) with borrowings under the receivables and
equipment facilities being GBP36.2m (2009: GBP38.1m). In the
current year, on receipt of proceeds from the sale of TDG, the
Burdale loan facility has been fully repaid.
Looking to the future, our announcement today of a proposed
Tender Offer will change our balance sheet structure, subject to
confirmations. The funding of new investment will depend on the
specifics of the situation. We will use our cash resources for
Minority Investments and also for taking initial positions in
companies which may become Majority Investments. Once the
opportunity is presented to pursue a new Majority Investment, the
company will seek to raise the required funds. We will use prudent
levels of external leverage and raise additional funds on the
capital markets with underwriting support from Laxey Partners. With
regard to debt financing, the repayment of the Burdale facility -
on time and in full - provides a strong platform for future
fundraisings and we are encouraged by signs of an easing of
restrictions on the availability of finance in capital markets.
A circular containing details of the Tender Offer, which is in
line with our policy of one-off distributions to shareholders from
the sale of investments, will be forwarded to shareholders later
this week.
TDG
TDG's revenue for the full year was 2% higher at GBP678.2m
(2009: GBP662.0m), reflecting a general recovery in market momentum
and improving trading volumes, particularly in 4PL transport and
freight forwarding. Underlying operating profit before DouglasBay
management charges was 5% ahead at GBP27.2m (2009: GBP26.0m), with
improved operating margins on this measure reflecting the more
competitive cost base now in place following the 2009
revitalisation programme.
In line with strong trading, underlying EBITDA, on a
like-for-like basis adjusting for the rental impact of the sale
& leaseback programme and DBAY management charges, was ahead at
GBP39.8m, compared to GBP37.1m in 2009. Operational cash flow was
GBP20.6m, up GBP3.9m on 2009, funding capital expenditure of
GBP6.4m (2009: GBP7.6m), a level reflecting TDG's more asset-light
model. Along with further planned property disposals, these factors
combined to reduce TDG's net debt by 70% over the twelve month
period.
DouglasBay Property Group (DBPG)
Following on from the West Hallam and Carnforth sites in 2009,
during the first half of 2010 a further four TDG properties, at
Stretton, Batley, Lancaster and a site in Manchester, were
transferred into DBPG in order to be professionally managed by the
property team. DBPG received an arm's length rental income from TDG
for the use of these properties. During the second half the
Lancaster property was sold for net proceeds totalling GBP3.1m,
and, as noted previously, since the year end two additional sales
from the DBPG portfolio have been completed for proceeds totalling
GBP19.2m. Three sites remain, including Carnforth which has
longer-term development potential. The bank debt associated with
the Property Group has now been fully repaid. The properties
remaining have been independently valued at GBP7.9m.
Minority Investments
We made further progress in liquidating TLIT's portfolio,
comprising minority stakes in Sri Lankan tea plantations and a
small number of holdings in quoted and unquoted companies, securing
the sale of three investments, for cash proceeds of GBP2.5m. As at
31 December 2010 the remaining portfolio was valued at GBP2.1m
(2009: GBP4.6m). We will seek to complete this process as and when
conditions permit.
As set out in the CEO's Investment Review, in September 2010 we
made the first of three payments to secure a 21% stake in a
US-based social media business. Made through a newly established
subsidiary, DouglasBay Media Holdings Limited, this first payment
of GBP0.3m will be followed by two further payments in the first
half of the current year, together totaling GBP1.3m.
Summary
2010 has been a significant period for DouglasBay with TDG's
revitalisation reflected in basic earnings per share ahead 25% at
1.11p (2009: 0.89p) and culminating in the company's successful
onward sale. We have strong financial skills in DouglasBay and with
our business model now proven, we look forward to building on this
platform in 2011.
Geoff Bicknell
Chief Financial Officer
11 April 2011
Consolidated Income Statement
For the Year ended 31 December 2010
Continuing Discontinued Continuing Discontinued
operations operations* Total operations operations* Total
2010 2010 2010 2009 2009 2009
Notes GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 0.1 678.2 678.3 0.1 662.0 662.1
Operating
expenses (2.6) (650.0) (652.6) (2.0) (637.6) (639.6)
----------- ------------- -------- ----------- ------------- --------
Underlying
operating
profit/(loss) 4 (2.5) 28.2 25.7 (1.9) 24.4 22.5
Amortisation of
acquisition
intangibles 5 - (3.0) (3.0) - (3.0) (3.0)
Rationalisation
costs 5 - (2.1) (2.1) - (8.2) (8.2)
Corporate
activity &
associated
costs 5 (1.9) (0.4) (2.3) - - -
Recycling of
exchange gains 5 - - - - (1.1) (1.1)
Impairment 5 - (2.7) (2.7) (0.4) (0.6) (1.0)
Gain on sale of
properties 5 - 3.2 3.2 - 7.2 7.2
Costs of sale of
subsidiaries 5 - (0.1) (0.1) - - -
Site exit costs 5 - (1.5) (1.5) - (2.6) (2.6)
Dilapidations &
onerous leases 5 - 1.2 1.2 - (0.8) (0.8)
Operating
profit/(loss) (4.4) 22.8 18.4 (2.3) 15.3 13.0
Finance costs 6 (0.1) (7.0) (7.1) - (9.4) (9.4)
Finance income 7 0.3 - 0.3 0.3 0.3 0.6
Share of loss
from
associates - - - - (0.1) (0.1)
----------- ------------- -------- ----------- ------------- --------
Profit/(loss)
before tax (4.2) 15.8 11.6 (2.0) 6.1 4.1
Income tax
income 8 - 3.5 3.5 - 8.1 8.1
Profit/(loss)
for the year (4.2) 19.3 15.1 (2.0) 14.2 12.2
----------- ------------- -------- ----------- ------------- --------
Attributable to:
Profit/(Loss)
attributable to
equity holders
of the parent (4.2) 19.0 14.8 (2.0) 13.9 11.9
Profit attributable
to non-controlling
interests - 0.3 0.3 - 0.3 0.3
(4.2) 19.3 15.1 (2.0) 14.2 12.2
----------- ------------- -------- ----------- ------------- --------
Earnings (pence)
per share
Basic & fully
diluted
earnings/(loss)
per share 9 (0.32p) 1.43p 1.11p (0.15p) 1.04p 0.89p
----------- ------------- -------- ----------- ------------- --------
Underlying
earnings
/(loss) per
share 9 (0.21p) 1.71p 1.50p (0.13p) 1.47p 1.34p
----------- ------------- -------- ----------- ------------- --------
* Detailed information related to the Laxey Logistics Group and
Property Group discontinued operations is disclosed in note 13.
Consolidated Statement of Comprehensive income
For the Year ended 31 December 2010
2010 2009
GBPm GBPm
Profit for the year 14.8 11.9
Other comprehensive income
Currency translation adjustments (0.1) 0.4
Actuarial (loss)/gain on defined benefit schemes (27.4) 28.6
Income tax income/(expense) on other comprehensive
income 7.7 (8.9)
Other comprehensive (loss)/income for the year,
net of income tax (19.8) 20.1
------- ------
Total comprehensive (loss)/income for the year (5.0) 32.0
------- ------
Attributable to:
Equity holders of the parent (5.0) 32.0
Non-controlling interest - -
------- ------
(5.0) 32.0
------- ------
Consolidated Statement of Changes in Equity
For the Year ended 31 December 2010
Attributable to equity holders
of the parent
Hedging
Issued and Non-
share Share translation Retained controlling Total
capital premium reserve earnings Total interest Equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 1
January 2010 66.9 66.9 0.3 (1.2) 132.9 0.6 133.5
-------- -------- ------------ --------- ------- ------------ -------
Currency
translation
differences - - (0.1) - (0.1) - (0.1)
Actuarial loss
on defined
benefit
scheme - - - (27.4) (27.4) - (27.4)
Tax on items
recognised in
other
comprehensive
income - - - 7.7 7.7 - 7.7
Other
comprehensive
loss for the
year - - (0.1) (19.7) (19.8) - (19.8)
-------- -------- ------------ --------- ------- ------------ -------
Profit for the
period 14.8 14.8 0.3 15.1
Purchase of
own shares (2.4) (3.4) - - (5.8) - (5.8)
Equity
dividends - - - - - (0.2) (0.2)
Balance at 31
December
2010 64.5 63.5 0.2 (6.1) 122.1 0.7 122.8
-------- -------- ------------ --------- ------- ------------ -------
Attributable to equity holders
of the parent
Hedging
Issued and Non-
share Share translation Retained controlling Total
capital premium reserve earnings Total interest Equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 1
January 2009 66.9 66.9 (0.1) (32.8) 100.9 0.5 101.4
-------- -------- ------------ --------- ------- ------------ -------
Currency
translation
differences - - 0.4 - 0.4 - 0.4
Actuarial
gains on
defined
benefit
scheme - - - 28.6 28.6 - 28.6
Tax on items
recognised in
other
comprehensive
income - - - (8.9) (8.9) - (8.9)
Other
comprehensive
profit for
the year - - 0.4 19.7 20.1 - 20.1
-------- -------- ------------ --------- ------- ------------ -------
Profit for the
period - - - 11.9 11.9 0.3 12.2
Equity
dividends - - - - - (0.2) (0.2)
Balance at 31
December
2009 66.9 66.9 0.3 (1.2) 132.9 0.6 133.5
-------- -------- ------------ --------- ------- ------------ -------
Consolidated Statement of Financial Position
As at 31 December 2010
2010 2009
Notes GBPm GBPm
Assets
Non current assets
Property, plant and equipment 10 5.3 129.0
Investments 2.4 4.7
Goodwill - 26.8
Intangible assets - 38.4
Retirement benefit asset - 41.8
-------- --------
7.7 240.7
Current assets
Inventories - 2.2
Held-for-sale assets 13 321.7 30.6
Trade and other receivables 3.2 91.5
Prepayments - 20.2
Cash and cash equivalents 12 1.6 17.0
326.5 161.5
-------- --------
Total assets 334.2 402.2
Non current liabilities
Preference shares 11 - 0.3
Interest bearing borrowings 11 14.3 69.6
Deferred income - 0.5
Provisions - 5.0
Post employment retirement benefit
liability - 2.8
Deferred tax liabilities - 20.5
-------- --------
(14.3) (98.7)
Current liabilities
Interest bearing borrowings 11 2.1 28.6
Provisions - 9.6
Tax payables - 1.5
Trade and other payables 3.0 130.3
Held-for-sale liabilities 13 192.0 -
(197.1) (170.0)
Total liabilities (211.4) (268.7)
Net assets 122.8 133.5
-------- --------
Equity
Issued capital and reserves
Issued share capital 64.5 66.9
Share premium 63.5 66.9
Hedging & translation reserve 0.2 0.3
Retained loss (6.1) (1.2)
-------- --------
Equity attributable to owners of
the Company 122.1 132.9
Non-controlling interests 0.7 0.6
Total equity 122.8 133.5
-------- --------
Consolidated Statement of Cash Flows
For the Year ended 31 December 2010
2010 2009
Notes GBPm GBPm
Cash flows from operating activities
(page 14) 22.4 9.1
Cash flows used in other operating
activities
Interest paid (8.5) (8.6)
Income taxes (paid)/received (1.8) 2.8
Cash flows used in other operating
activities (10.3) (5.8)
------- --------
Cash flows from investing activities
Payments to acquire property, plant
and equipment (6.4) (7.7)
Payments to acquire subsidiaries
(including deferred consideration) (0.1) (2.4)
Receipts from sale of property, plant
and equipment 47.7 45.8
Receipts from sale of investments 2.5 -
Payments to acquire investments (0.4) -
Interest received 0.4 0.6
Cash flows from investing activities 43.7 36.3
------- --------
Cash flows from financing activities
Payments to purchase own shares (5.7) -
Drawdown of secured borrowings - 6.7
Repayment of secured borrowings (35.7) (55.3)
Repayment of obligations under finance
leases - (0.7)
Drawdown of loan from ultimate controlling
party - 7.2
Repayment of loan to ultimate controlling
party (5.1) (2.0)
Repayment of term unsecured borrowings (5.2) -
Repayment of loan from associate
company 0.1 -
Dividends paid to minority interests (0.2) -
Cash flows used in financing activities (51.8) (44.1)
------- --------
Net increase/(decrease) in cash and
cash equivalents 4.0 (4.5)
Cash and cash equivalents as at 1
January 16.4 21.3
Effect of exchange rate changes (0.2) (0.4)
Cash and cash equivalents as at 31
December 12 20.2 16.4
------- --------
Reconciliation of net debt
Net increase/(decrease) in cash and
cash equivalents 4.0 (4.5)
Decrease in debt 45.6 44.1
------- --------
Change in net debt from cash flows 49.6 39.6
Effect of exchange rate changes 0.6 3.3
------- --------
Decrease in net debt during the period 50.2 42.9
Net debt at start as at 1 January (86.7) (129.6)
Net debt as at 31 December 11 (36.5) (86.7)
------- --------
Consolidated Statement of Cash Flows (continued)
For the Year ended 31 December 2010
Reconciliation of net profit from operations to net cash from
operating activities
2010 2009
GBPm GBPm
Cash flows from operating activities
Net profit 15.1 12.2
Adjustments to reconcile to profit from
operations
Net interest expense 6.8 8.8
Income tax income (3.5) (8.1)
Share of loss from investments in associates - 0.1
Adjustments to reconcile profit from operations 3.3 0.8
------- -------
Non-cash adjustments
Depreciation of property, plant and equipment 10.7 13.7
Amortisation of acquisition & other intangible
assets 5.5 5.8
Impairment of property 2.3 1.1
Impairment of plant and equipment 0.5 0.4
Impairment of other current and non current
assets 0.2 -
Loss on the sale of investments 0.7 -
Gain/(loss) arising on the revaluation
of TLIT investments (0.6) 0.4
Unrealised losses on foreign currency
exchange 0.1 1.2
Gain on sale of properties, plant and
equipment (3.1) (7.7)
Pension IAS 19 charge (5.8) (2.3)
Release of investment grants (0.5) (0.2)
Non-cash adjustments 10.0 12.4
------- -------
Decrease in working capital
(Increase)/Decrease in inventories (0.1) 0.6
(Increase)/Decrease in trade and other
receivables (11.2) (0.4)
Decrease/(Increase) in trade and other
payables 9.0 (12.6)
Decrease in working capital (2.3) (12.4)
------- -------
Pension deficit funding additional employer
contributions (3.7) (3.9)
Cash flows from operating activities (page
13) 22.4 9.1
------- -------
Notes
1. Basis of preparation
The preliminary announcement for the full year ended 31 December
2010 has been prepared on the going concern basis and in accordance
with International Financial Reporting Standards (IFRS and IAS) as
adopted by the European Union (EU) and IFRIC interpretations issued
and effective, or issued and early adopted.
The following new and amended standards became effective in the
period which had an impact on these full year financial statements:
IFRS 2 Group Cash-settled Share-based Payment Transactions and IFRS
3 (revised) Business Combinations. In addition, in April 2009, the
International Accounting Standards Board issued its second omnibus
of amendments to its standards, primarily with a view to removing
inconsistencies and clarifying wording. The adoption of these
amendments, which are effective from 1 January 2010, did not have
any impact on the reporting of the financial position or
performance of the Group.
The information set out in this preliminary statement does not
constitute statutory accounts within the meaning of Section 80 of
the Isle of Man Companies Act 2006. The auditors' reports on the
statutory accounts for both the period ended 31 December 2009 and
the year ended 31 December 2010 were unqualified. The information
presented in this preliminary announcement for the year ended 31
December 2010 is extracted from, and is consistent with, that in
the Group's audited financial statements for the year ended 31
December 2010.
The financial information in this announcement has been prepared
on the basis of the accounting policies set out in the last
published set of annual financial statements. There have been no
material changes to the accounting policies since the prior
period.
These consolidated financial statements have been prepared under
historical cost convention, except for the revaluation of land and
buildings to fair value at the date of transition (which is treated
as deemed cost under IFRS) and the measurement of certain balances
at fair value.
The Directors consider the underlying profit and underlying
earnings per share provide additional meaningful information on
underlying performance to shareholders. The terms "underlying
profit" and "exceptional item" are not defined terms under IFRS and
may not be comparable with similarly titled profit measures
reported by other companies. Underlying operating profit is not
intended to be a substitute for, or superior to, GAAP measurements
of profit. The term "underlying" refers to the relevant measure
being reported excluding exceptional items, and amortisation of
acquisition intangibles. Exceptional items are items which are both
material and non-recurring and are presented as exceptional items
within their relevant consolidated income statement category. The
separate reporting of exceptional items helps provide a better
indication of the Group's underlying business performance. Events
which may give rise to the classification of items as exceptional
include the restructuring of the business, the integration of new
businesses, gains or losses on the disposal of businesses and asset
impairments and corporate costs.
This announcement was approved by the Board of Directors on 7
April 2011.
2. Currency translation
All amounts denominated in overseas currencies for the
consolidated income statement have been translated into sterling at
the appropriate average rates for the period. Period end rates have
been used to translate all overseas amounts included in the
consolidated statement of financial position.
3. Segmental analysis
Primary segments - business activities
Year ended 31 December 2010
Continuing operations Discontinued operations
Eliminat- Eliminat-
ions ions
Central & Central &
Property manage- adjust- Property manage- adjust-
TLIT Group ment ments* Total TDG Group ment ments* Total TOTAL
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Gross sales 0.1 0.7 3.9 (4.6) 0.1 678.2 1.9 - (1.9) 678.2 678.3
----- --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Results
Underlying
operating
profit/(loss) - 0.2 1.0 (3.7) (2.5) 24.2 1.3 (0.1) 2.8 28.2 25.7
Net
exceptional
income/
(expense) - - (2.0) 0.1 (1.9) 2.7 1.2 - (9.3) (5.4) (7.3)
----- --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Operating
profit/(loss) - 0.2 (1.0) (3.6) (4.4) 26.9 2.5 (0.1) (6.5) 22.8 18.4
Net finance
income/(cost) 0.2 (0.1) 22.4 (22.3) 0.2 (0.6) (0.9) (27.8) 22.3 (7.0) (6.8)
----- --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
0.2 0.1 21.4 (25.9) (4.2) 26.3 1.6 (27.9) 15.8 15.8 11.6
Income tax
income/
(expense) - - - - - 3.7 - (0.2) - 3.5 3.5
Profit/(loss)
for year 0.2 0.1 21.4 (25.9) (4.2) 30.0 1.6 (28.1) 15.8 19.3 15.1
----- --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Assets &
liabilities
Segment assets 6.4 9.5 167.3 (174.8) 8.4 392.6 20.2 219.8 (306.8) 325.8 334.2
----- --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Segment
liabilities - 28.1 - (23.9) 4.2 192.0 - 282.8 (267.6) 207.2 211.4
----- --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Other Segment
information
Depreciation
and
amortisation - - - 0.2 0.2 13.0 - 3.1 - 16.1 16.3
----- --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
* Eliminations include all the adjustments arising on
consolidation of the four individual segments TDG, TLIT, Property
Group and Central management for statutory reporting.
3. Segmental analysis (continued)
Primary segments - business activities
Year ended 31 December 2009
Continuing operations Discontinued operations
Eliminat- Eliminat-
ions ions
Central & Central &
Property manage- adjust- Property manage- adjust-
TLIT Group ment ments* Total TDG Group ment ments* Total TOTAL
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Gross sales 0.1 - 1.0 (1.0) 0.1 662.0 - 0.2 (0.2) 662.0 662.1
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Results
Underlying
operating
profit/(loss) - (0.1) (0.7) (1.1) (1.9) 24.8 - (1.0) 0.6 24.4 22.5
Net
exceptional
income/
(expense) (0.4) - (0.3) 0.3 (0.4) (7.9) - - (1.2) (9.1) (9.5)
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Operating
profit/(loss) (0.4) (0.1) (1.0) (0.8) (2.3) 16.9 - (1.0) (0.6) 15.3 13.0
Share of loss
of associates - - - - - (0.1) - - - (0.1) (0.1)
Net finance
income/(cost) 0.1 - 18.9 (18.7) 0.3 (3.7) - (24.1) 18.7 (9.1) (8.8)
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
(0.3) (0.1) 17.9 (19.5) (2.0) 13.1 - (25.1) 18.1 6.1 4.1
Income tax
income - - - - - 8.1 - - - 8.1 8.1
Profit/(loss)
for year (0.3) (0.1) 17.9 (19.5) (2.0) 21.2 - (25.1) 18.1 14.2 12.2
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Assets &
liabilities
Segment assets 6.3 5.5 151.8 (154.2) 9.4 444.7 17.5 220.2 (289.6) 392.8 402.2
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Segment
liabilities 0.1 23.1 0.5 (20.9) 2.8 253.6 - 255.0 (242.7) 265.9 268.7
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
Other Segment
information
Depreciation
and
amortisation - - - 0.2 0.2 16.5 - - 3.0 19.5 19.7
------ --------- -------- ---------- ------ ------ --------- -------- ---------- ------ ------
* Eliminations include all the adjustments arising on
consolidation of the four individual segments TDG, TLIT, Property
Group and Central management for statutory reporting.
Secondary segments - geographical analysis
The group's operations are located in United Kingdom, Spain,
Netherlands, Ireland, Belgium and Other Europe (Germany and
Poland). The following table provides an analysis of the Group's
sales by geographic market, irrespective of the origin of the
(goods/services).
2010 2009
Revenue from external customers GBPm GBPm
United Kingdom 505.8 475.8
Spain 59.5 58.9
Netherlands 47.7 49.2
Ireland 27.7 40.6
Belgium 29.6 28.5
Other Europe 7.9 9.0
------ ------
Discontinued operations 678.2 662.0
------ ------
United Kingdom 0.1 0.1
------ ------
Continuing operations 0.1 0.1
------ ------
Total revenue for the period 678.3 662.1
------ ------
4. Underlying operating profit
Underlying operating profit is stated after charging/(crediting)
the following:
2010 2009
GBPm GBPm
Employee benefits expense 194.5 206.2
------ ------
Loss on disposal of investments 0.7 -
Loss/(profit) on disposal of plant and equipment 0.1 (0.5)
------ ------
Depreciation of property, plant and equipment 10.7 13.7
Amortisation of intangible assets (software) 2.5 2.8
------ ------
Amortisation of government grants (0.5) (0.2)
------ ------
Operating leases:
Present value of minimum lease payments 45.5 40.7
Sublease payments (2.6) (1.8)
------ ------
Auditor's remuneration - audit of parent company
and consolidated financial statements 0.1 0.1
------ ------
Auditor's remuneration - other fees:
Other services pursuant to legislation - audit
of the Company's subsidiaries 0.5 0.4
Services relating to taxation 0.2 -
Other services 0.1 -
0.8 0.4
------ ------
5. Exceptional operating (costs)/profits
2010 2009
GBPm GBPm
Amortisation of acquisition intangibles (3.0) (3.0)
Rationalisation costs (2.1) (8.2)
Corporate activity and associated costs (2.3) -
Recycling of exchange gains - (1.1)
Impairment of properties (2.3) -
Impairment of plant and equipment (0.2) -
Impairment of other current and non current
assets (0.2) (1.0)
Gain on sale of properties 3.2 7.2
Costs of sales of subsidiaries (0.1) -
Site exit costs (1.5) (2.6)
Dilapidations & onerous leases 1.2 (0.8)
(7.3) (9.5)
------ ------
The impairment of properties in the year relates to the GBP1.3m
impairment, to their net realisable value, of two UK properties
that are due to be sold in 2011 and a GBP1.0m impairment to two
French properties following the exit of the French business.
Impairments to plant and equipment and other current and
non-current assets relates to the GBP0.4m write-down of assets held
in Belgium and the UK.
In 2009 the impairment of other current and non current assets
related to the impairment of a single trade receivable of GBP0.6m
and a GBP0.4m impairment to the carrying value of TLIT investments
to their market value.
The profit on sale of properties, GBP3.2m (2009: GBP7.2m), arose
on the sale of properties held in the UK, Netherlands and
Belgium.
Recycling of exchange losses of GBP1.1m originally charged to
reserves arose in 2009 as a result of the disposal of a net
investment in the year.
In 2010 dilapidation provision releases of GBP0.8m and onerous
lease provision releases of GBP0.4m relate to prior period
exceptional dilapidation and onerous lease provisions no longer
required. In 2009 dilapidation provisions were created in relation
to two UK properties. The Directors consider this cost to be
exceptional due the size of the provision required.
Due to the continued reorganisation of the business during the
year, rationalisation costs of GBP2.1m (2009: GBP8.2m) were
incurred. Of the rationalisation costs of GBP2.1m (2009: GBP8.2m),
GBP0.6m (2009: GBP5.5m) was incurred in the UK, GBP0.1m (2009:
GBP2.0m) Ireland, GBP1.0m (2009: GBP0.5m) Netherlands, GBP0.1m
(2009: GBPnil) in Belgium and GBP0.3m (2009: GBP0.2m) in Spain.
The site exit costs of GBP1.5m (2009: GBP2.6m) relate to the
exit of unprofitable operations, totalling GBP0.9m (2009: GBPnil)
in the UK, GBP0.5m (2009: GBPnil) in Ireland, GBPnil (2009:
GBP1.1m) in France and GBP0.1m (2009: GBP1.5m) in Spain.
Corporate activity costs relate to the sale of the Laxey
Logistics Group.
6. Finance costs
2010 2009
GBPm GBPm
Interest payable on loan from ultimate controlling
party 0.6 1.7
Interest payable on finance lease rental payments 0.1 0.2
Interest expense: secured loans 4.8 6.8
Other finance costs 1.6 0.7
7.1 9.4
----- -----
7. Finance income
2010 2009
GBPm GBPm
Interest receivable on short-term deposits - 0.4
Foreign exchange - 0.2
Interest receivable on loan to ultimate controlling
party 0.3 -
0.3 0.6
----- -----
8. Tax
Components of income tax (income)/expense
2010 2009
GBPm GBPm
Current income tax expense/(income)
Isle of Man income tax - -
Overseas tax 2.3 (2.2)
Overseas tax - adjustments to current tax
of prior period 0.2 (0.2)
------ ------
Current income tax expense/(income) 2.5 (2.4)
Deferred income tax (income)/expense
Isle of Man - -
Overseas deferred tax (2.1) (4.9)
Overseas deferred tax - adjustments to deferred
tax of prior period (3.9) (0.8)
------ ------
Deferred income tax income (6.0) (5.7)
------ ------
Income tax income (3.5) (8.1)
------ ------
Components of income tax recognised in other comprehensive
income
2010 2009
GBPm GBPm
Deferred income tax (income)/expense
Deferred income tax (income)/expense on actuarial
loss/(gain) (7.7) 8.9
------ -----
Reconciliation of income tax charge
The tax for the period is higher than the standard rate of
income tax in the Isle of Man of 0%. The differences are explained
below.
2010 2009
GBPm GBPm
Profit on ordinary activities before tax 11.6 4.1
------ ------
Profit on ordinary activities multiplied by
rate of corporation tax in the Isle of Man
of 0% - -
Effects of:
Tax effect of rates in other jurisdictions (0.5) (1.3)
Permanent differences 0.3 0.2
Differences between depreciation and capital
allowances and other timing differences (0.4) (6.3)
Utilisation of losses (0.3) (3.4)
Unrelieved losses 6.6 8.3
No tax relief on impairments 0.2 1.1
No tax relief on the recycling of exchange
losses - 0.5
Relief claimed on profit on sale of properties
and release of deferred tax (5.0) (4.5)
Change in tax rates (0.7) -
Over provision in prior years (3.7) (2.7)
(3.5) (8.1)
------ ------
9. Earnings per share
The calculation of basic earnings per share as at 31 December
2010 is based on the profit attributable to ordinary shareholders
of GBP14.8m (2009: GBP11.9m) and a weighted average number of
ordinary shares outstanding of 1,333,058,372 (2009: 1,337,815,633)
reflecting the period over which earnings per share has been
calculated (1 January 2010 until 31 December 2010 (2009: 1 January
2009 until 31 December 2009). An alternative underlying earnings
per share number is also set out below, being before any
exceptional (profits)/costs plus related tax, since the Directors
consider that this is more representative of the underlying
performance of the Group. Share options outstanding have no
dilutive impact on the basic earnings or underlying earnings per
share as at 31 December 2010. There was no dilution effect in the
period ended 31 December 2009.
2010 2009
Weighted average number of shares for
the purposes of basic and
underlying earnings per share 1,333,058,372 1,337,815,633
-------------- --------------
2010 2009
GBPm pence GBPm pence
Profit attributable to
equity holders of the
parent (Basic
earnings per
share) 14.8 1.11p 11.9 0.89p
Related Related
Expense/ Tax Expense/ Tax
(income) @ 28% (income) @ 28%
GBPm GBPm GBPm GBPm
Add back
exceptional
items net
of related tax
Amortisation of
acquisition
intangibles 3.0 - 3.0 -
Rationalisation
costs 2.1 (0.6) 8.2 (2.3)
Corporate
activity and
associated
costs 2.3 (0.6) - -
Recycling of
exchange gains - - 1.1 -
Impairment of
properties 2.3 (0.6) - -
Impairment of
plant and
equipment 0.2 (0.1) - -
Impairment of
other current
and non current
assets 0.2 (0.1) 1.0 (0.3)
Gain on sale of
properties (3.2) - (7.2) -
Costs of sales
of
subsidiaries 0.1 - - -
Site exit costs 1.5 (0.4) 2.6 (0.7)
Dilapidations &
onerous leases (1.2) 0.3 0.8 (0.2)
7.3 (2.1) 5.2 0.39p 9.5 (3.5) 6.0 0.45p
------ ------ ----- ------ --------- ------ ----- ------
Underlying
earnings
(underlying
earnings pence
per share) 20.0 1.50p 17.9 1.34p
----- ------ ----- ------
10. Property, plant and equipment
Net book Net book
value at value at
31 Dec 1 Jan 2010
2010 GBPm GBPm
Land and buildings 5.3 92.7
Plant and equipment - 30.2
Vehicles - 6.1
Total 5.3 129.0
----------- -----------
Properties disposed of post-year end are classified as assets
held-for-sale as at the date of the consolidated statement of
financial position.
11. Financial liabilities
Notes 2010 2009
GBPm GBPm
Non-current
Property finance leases 1.1 1.1
Secured bank loans 48.8 68.5
Non redeemable preference shares 0.3 0.3
Transfers to held-for-sale liabilities 13 (35.9) -
------- -------
14.3 69.9
------- -------
Current
Bank overdrafts 0.3 0.6
Property finance leases - -
Secured bank loans 5.0 21.3
Short term loan facility 1.5 6.7
Transfers to held-for-sale liabilities 13 (4.7) -
------- -------
2.1 28.6
------- -------
Reconciliation to Net debt
Borrowings (excluding loan payable to ultimate
controlling party and
before transfer of assets and liabilities
to held-for-sale 57.0 98.5
Deduct:
Cash at bank 12 (5.4) (3.8)
Short term deposits and cash in restricted
accounts 12 (15.1) (13.2)
------- -------
External net debt 36.5 81.5
Loan payable to ultimate controlling
party - 5.2
Net debt 36.5 86.7
------- -------
Finance leases
The property finance leases of GBP1.1m (2009: GBP1.1m) are
secured over the properties of the subsidiary undertakings
concerned. Fixed interest is payable on the property finance
leases.
Non redeemable preference shares
The non redeemable preference shares carry an interest rate of
4.75%.
Bank loans and other borrowings
2010 2009
GBPm GBPm
Secured bank loan 53.8 89.8
Short term loan facility 1.5 6.7
------ -------
55.3 96.5
Less: current installments due on
loans and borrowings (6.5) (28.0)
------ -------
Non-current 48.8 68.5
------ -------
On 28 March 2011, following the sale of TDG the principle source
of financing held with Burdale Financial Limited was repaid in
full.
Secured bank loan
The secured borrowings of GBP53.8m (2009: GBP89.8m) are secured
over the tangible fixed assets and receivables of the subsidiary
undertakings concerned.
Short term loan facility
The short term loan facility does not require the specific
backing of Eligible Receivables, but must not be drawn for at least
five consecutive Business Days in any month.
12. Cash and cash equivalents
Notes 2010 2009
GBPm GBPm
Cash at bank and in hand 5.4 3.8
Short-term deposits 2.3 4.0
Cash in restricted accounts 12.8 9.2
Transfers to held-for-sale assets 13 (18.9) -
1.6 17.0
------- -----
For the purposes of the consolidated statement of cash flows,
cash and cash equivalents comprise the following at 31 December
2010.
2010 2009
GBPm GBPm
Cash at bank and in hand 5.4 3.8
Short-term deposits 2.3 4.0
Cash in restricted accounts 12.8 9.2
Bank overdrafts (0.3) (0.6)
20.2 16.4
------ ------
13. Discontinued operations (Held-for-sale financial assets
& liabilities)
2010 - On 29 November 2010, the Company announced it had reached
agreement to dispose of its largest investment, the logistics
business TDG Limited, to Norbert Dentressangle SA. On 28 March
2011, the Company disposed of TDG's holding company, Laxey
Logistics Limited for cash proceeds of GBP208m. As a result of the
commitment at 31 December 2010 of the Group's management to sell
the Laxey Logistics Group the assets and liabilities of the group
have been shown within the consolidated statement of financial
position as held-for-sale. The other discontinued items relate to
three properties held by the Property Group which the Directors
intend to sell early in 2011. Subsequent to the year end, the
Property Group has sold two properties, sites at West Hallam and
Batley, for a net consideration of GBP19.2m, realising a profit of
GBP7.2m.
Laxey
Logistics Property
Notes Group Group Total
GBPm GBPm GBPm
Assets classified as held-for-sale
Property, plant and equipment 87.2 12.8 100.0
Investments 0.1 - 0.1
Goodwill 27.0 - 27.0
Acquisition and other intangible
assets 34.0 - 34.0
Retirement benefit asset 23.6 - 23.6
Inventories 2.4 - 2.4
Trade and other receivables 94.4 - 94.4
Prepayments 21.3 - 21.3
Cash and cash equivalents 12 18.9 - 18.9
Total assets 308.9 12.8 321.7
---------- --------- ------
Liabilities classified as
held-for-sale
Property finance leases 11 1.1 - 1.1
Interest bearing borrowings 11 38.9 - 38.9
Preference shares 11 0.3 - 0.3
Bank overdrafts 11 0.3 - 0.3
Provisions 10.9 - 10.9
Post employment retirement
benefit liability 2.5 - 2.5
Deferred tax liabilities 6.7 - 6.7
Tax payables 2.1 - 2.1
Trade and other payables 129.2 - 129.2
Total liabilities 192.0 - 192.0
---------- --------- ------
The main elements of the cash flow of the discontinued
operations are as follows:
Cash flow from discontinued operations
2010 2009
GBPm GBPm
Operating cash flow 13.9 1.2
Cash flow from investing activities 41.4 54.1
Cash flow from financing activities (52.2) (61.2)
Net cash inflows/(outflows) for the year 3.1 (5.9)
------- -------
14. Subsequent events
Since the year end four separate events have occurred that
require disclosure:
- On 28 March 2011 the Company disposed of its largest
investment, the logistics specialist TDG Limited, to Norbert
Dentressangle SA. The Company has agreed to sell TDG's holding
company, Laxey Logistics Limited, for cash proceeds of GBP208m.
- The Property Group has sold two properties, sites at West
Hallam and Batley, for a net consideration of GBP19.2m. These
transactions resulted in a book profit to the Group of GBP7.1m. TDG
sold one property for a net consideration of GBP0.5m which resulted
in a nil gain/loss in 2011.
- On 28 March 2011, following the sale of TDG the principle debt
facility held with Burdale Financial Limited was repaid in
full.
- Following the sale of TDG, the Board is proposing an
invitation to shareholders to participate in a return of funds by
way of a Tender Offer to buy back ordinary shares at a price of
16.35p per share, subject to certain conditions and limited to 89%
of the shares in issue.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR URURRAKASAUR
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