REG - Palace Capital PLC - Final Results

Thu Jun 7, 2012 10:26am EDT

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RNS Number : 9286E
Palace Capital PLC
07 June 2012
 



7 June 2012

 

Palace Capital plc

("Palace Capital", "the Company" or "the Group")

 

Final results for the year ended 31 January 2012

 

The Board of Palace Capital is pleased to announce the Group's final results for the year ended 31 January 2012.

 

Chairman's Statement

 

I can report that for the year ended 31 January 2012 the Group made a consolidated profit of £13,956 (2011: loss £28,291).

 

During the year the Company reviewed a number of propositions and in October 2011 we completed the acquisition of Hockenhull Estates Ltd for £1,813,215. This company is an Isle of Man registered company owning nine properties in Crewe and Nantwich, Cheshire which are fully let and occupied and currently producing a net annual rental of approximately £186,000 which is a satisfactory return.

 

We are continuing to actively manage the portfolio, details of which are in the Admission Document dated 08 September 2011. The portfolio, which is performing well, was independently valued at £2,015,000 and we have reflected this in these accounts. We will update shareholders on progress as and when appropriate

 

We are continuing to seek significant property related acquisitions or investments in line with our investing policy but particularly private property companies that own high yielding secondary commercial investments. We have been evaluating a number of propositions which we continue to consider and review.

 

The Directors continued to provide financial support to the Company during the year. In order to keep operating costs of the Company to a minimum each of the members of the Board agreed not to receive any salary or fee until the Company completed the acquisition of Hockenhull Estates Limited.

 

The Directors consider that current market uncertainties are presenting opportunities of which we hope we can take advantage , and we look to the future with confidence.

 

Stanley Davis

Chairman
1 June 2012

 

Enquiries:

Palace Capital Palace Capital plc

Neil Sinclair, Managing Director

Tel: +44 (0)20 7722 7603

 

Fairfax I.S. PLC

Katy Birkin/Ewan Leggat

Tel: +44 (0)20 7598 5368

 

Lehmann Communications plc

Ronel Lehmann

Tel:  +44 (0) 20 7266 3020

 

Consolidated Statement of Comprehensive Income

 


2012

2011


£

£




Turnover

55,400

-




Cost of sales

-

-




Gross profit

55,400

-




Administrative expenses

(141,647)

(116,753)

Costs of acquisition

(53,033)

-

Gains on revaluation of investment property portfolio

197,500

-


 

 




Operating profit/(loss)

58,220

(116,753)




Share of results of joint venture - post tax

-

28,416

Profit on disposal of joint venture

-

40,146




Profit/(loss) before interest

58,220

(48,191)




Other interest receivable and similar income

27

19,900




Finance costs

(44,863)

-




Profit/(loss) before taxation

13,384

(28,291)




Tax payable on profit on ordinary activities

573

-




Profit/(loss) after taxation for the year

13,957

(28,291)




Other comprehensive income for the year

-

-




Total comprehensive income for the year

13,957

(28,291)




Attributable to:



Equity holders of the parent

13,957

(28,291)




PROFIT/(LOSS) PER ORDINARY SHARE;

Basic

0.1p

(0.4p)

Diluted

0.1p

(0.4p)

 

All results in the current and preceding financial year derive from continuing operations

 

 

Consolidated Statement of Financial Position

 


2012

2011


£

£

Non-current assets



Goodwill

5,910

-

Investment properties

2,015,000


Tangible fixed assets

805

-


2,021,715

-




Current assets



Trade and other receivables

46,848

8,430

Cash at bank and in hand

145,378

7,148


192,226

15,578




Total Assets

2,213941

15,578




Current liabilities



Trade and other payables

(122,079)

(74,837)

Redeemable preference shares

(65,000)

(65,000)

Creditors: amounts falling due within one year

(187,079)

(139,837)




Net current assets/(liabilities)

5,147

(124,259)




Non-current liabilities



Borrowings

(1,757,485)

-




Net assets/(liabilities)

269,377

(124,259)










Capital and reserves



Called up share capital

315,938

72,160

Share premium account

110,395

5,761

Convertible loan notes - equity

27,934

-

Share based payments

3,333

-

Profit and loss account

(188,223)

(202,180)

Equity - attributable to the owners of the parent

269,377

(124,259)




 

These financial statements were approved by the Board of Directors and authorised for issue on 1 June 2012 and are signed on its behalf by:

 

Stanley Davis

Director

 

 

Consolidated Statement of Changes in Equity

 


Share Capital

Share Premium

Share based payments

Convertible loan notes

 equity

Retained losses

Total equity


£

£

£

£

£

£

At 31 January 2010

 

72,160

5,761

-

-

(173,889)

(95,968)

Loss for the year

-

-

-

-

(28,291)

(28,291)

Total comprehensive income

-

-

-

-

(28,291)

(28,291)

At 31 January 2011

Profit for the year
Issue of ordinary share

capital

72,160

 

-

243,778

5,761

 

-

104,634

-

 

-

-

-

 

-

-

(202,180)

 

13,957

-

(124,259)

 

13,957

348,412

 

 

 

Issue of convertible loan notes

-

-

-

27,934

-

27,934

Share based payments

-

-

3,333

-

-

3,333

Total comprehensive income

243,778

104,634

3,333

27,934

13,957

393,636

At 31 January 2012

315,938

110,395

3,333

27,934

(188,223)

269,377

 

For the purpose of preparing the consolidated financial statement of the Group, the share capital represents the nominal value of the issued share capital of Palace Capital. Share premium represents the excess over nominal value of the fair value consideration received for equity shares net of expenses of the share issue.

Share based payments reserve comprises the fair value of options and performance share rights recognised as an expense. Upon exercise of options or performance share rights, any proceeds received are credited to share capital. The share-based payment reserve remains as a separate component of equity.

 

The convertible loan note equity reserve represents the difference between the proceeds from issuing the convertible loan notes and the fair value assigned to the liability component at the date of issue

 

 

Consolidated Statement of Cash Flows

 


2012

2011


£

£




OPERATING ACTIVITIES

Net cash outflow from operating activities

(158,000)

(145,081)




Interest received

27

-

Interest paid

(17,361)

-

Net cash flow from investing activities

(17,334)

-




TAXATION



Corporation tax paid

(28,148)

-




INVESTING ACTIVITIES



Payments to acquire subsidiary undertaking

(1,783,395)

-

Disposal of joint venture

-

88,749

Payments to acquire fixed assets

(805)

-

Net cash flow from investing activities

(1,784,200)

88,749







FINANCING ACTIVITIES



Loans provided by directors

577,500

-

Bank loan

1,200,000

-

Issue of new share capital

348,412

-

Issue of loan note

-

60,000

Net cash flow from financing activities

2,125,912

60,000







NET INCREASE IN CASH AND CASH EQUIVALENTS

138,230

3,668




Cash and cash equivalents at beginning of the year

7,148

3,480

Cash and cash equivalents at the end of the year

145,378

7,148







 

Notes to the Financial Information for the year ended 31 January 2012

 

1. STATUS OF FINANCIAL INFORMATION

 

The Group and Company financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS, as adopted by the European Union and Companies Act 2006.

 

The Board has reviewed the accounting policies set out in the Financial Statements and considers them to be the most appropriate to the Group's business activities.

 

The directors do not propose a dividend in respect of the year ended 31 January 2012 (2011: nil).

 

This announcement of the final results for the year ended 31 January 2012 was approved and authorised for issue by the board of directors on 7 June 2012.

 

The financial information set out in this announcement does not constitute the statutory financial statements of the Group but was derived from them. The current auditors (Crowe Clark Whitehill LLP) have reported on the financial statements for the year ended 31 January 2012; their report was unqualified.

 

The annual report for the year ended 31 January 2012, which will contain the financial statements for the year ended to 31 January 2012 and the notice of Annual General Meeting, will be posted to shareholders shortly and will also be available on the Company's website www.palacecapitalplc.com. The Annual General Meeting of the Company will be held at 41 Chalton Street, London NW1 1JD on 12 July 2012 at 10.00am

 

2. SEGMENTAL REPORTING

For the purpose of IFRS 8, the chief operating decision maker ("CODM") takes the form of the Board of Directors. The Directors opinion of the business of the group is as follows.

 

The principal activity of the Group was to invest in entities operating within the property sector.

Based on the above considerations, there is considered to be one reportable segment. The internal and external reporting is on a consolidated basis with transactions between group companies eliminated on consolidation. Therefore the financial information of the single segment is the same as that set out in the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement of financial position and cashflows.

 

Geographical segments

 

The following tables present revenue regarding the group's geographical segments for the years ended 31 January 2012 and 31 January 2011.

 

Year ended 31 January 2012

United Kingdom

Total


£

£




Rents received from investment properties

54,400

54,400


54,400

54,400

 

Year ended 31 January 2011

United Kingdom

Total


£

£




Rents received from investment properties

-

-


-

-

 

3. TAXATION

 


2012

2011


£

£




Current tax

(573)

-

Deferred tax

-

-




Tax charge/(credit)

(573)

-

 


2012

2011


£

£




Profit/(loss) on ordinary activities before tax

13,384

(28,291)




Based on profit for the year:



Tax at 26.3% (2011: 26.3%)

3,520

(7,441)




Effect of:



Expenses not deductible for tax purposes

16,487

-

Income not deductable for tax purposes

-

(5,572)

Gains on revaluation of investment property portfolio

(51,943)

-

Losses offset against capital gain on sale of investment

-

24,836

Other adjustments

8,017

-

Losses not utilised

24,492

7,374

Impact of joint venture profit disclosed net of tax

-

(19,197)

Tax credit for the period

 

573

-

 

Factors that may affect future tax charges:

At 31 January 2012, the Group had tax losses of £515,752 (2011: £413,302) available to carry forward to future periods. A deferred tax asset of £134,095 (2011: £115,725) has not been recognised in the financial statements due to the uncertainty as to the timing of future taxable profits.

 

4. PROFIT/(LOSS) PER ORDINARY SHARE

The calculation of profit/(loss) per ordinary share is based on the following profits/(losses) and number of shares:

 


2012

2011


£

£




Profit/(loss) for the year

13,384

(28,291)

 




Weighted average number of shares for basic profit/(loss) per share

15,297,356

7,215,956

Weighted average number of shares for diluted profit/(loss) per share

25,737,404

7,215,956

 

PROFIT/(LOSS) PER ORDINARY SHARE;

Basic

0.1p

(0.4p)

Diluted

0.1p

(0.4p)

 

In accordance with IAS 38 where there is a loss for the year, there is no dilutive effect from share options and therefore no difference between the basic and diluted loss per share.

 

5. REDEEMABLE PREFERENCE SHARES

The 65,000 £1 redeemable preference shares provide for a fixed cumulative dividend at a rate of 9% per annum which accrues on a daily basis. The preference shares can be redeemed by the company at any time on seven days written notice. The preference shares do not confer a right to attend, speak or vote at any general meeting of the company. On 30 July 2010, the holders of the preference shares waived the right to receive past dividends on these preference shares up to 31 January 2011.  Included in accruals and deferred income are accrued preference dividends of £5,850 (2011: £nil).

 

6. CONVERTIBLE LOAN NOTES

Loan notes amounting to £300,000 were issued on 3 October 2011.  The loan notes are convertible into ordinary shares of the Company at any time between the date of issue of the loan notes and their maturity date of 3 October 2015 at 2.25p per share.

The effective rate of interest used to calculate the interest charged on the loan notes to the income statement was 6%.

If the loan notes have not been converted, they will be redeemed on their maturity date at par.  Interest of 4% per annum will be paid quarterly up until that date.

There were no transaction costs incurred on the issue of these loan notes.  The proceeds from the issue of the convertible loan notes have been split between the liability element and an equity component, representing the fair value of the embedded option to convert the liability into equity of the Group as follows:







 £

£





Convertible loan notes issued


300,000

60,000

Equity component


(21,197)

(6,737)

Liability component at date of issue


278,803

53,263





Interest charged


5,094

4,977

Interest payable


(3,912)

-



279,985

58,240

 

 


This information is provided by RNS
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