RNS No 3294f
ORB ESTATES PLC
12th March 1998
C H A I R M A N ' S S T A T E M E N T
Since my appointment in November 1997 the Company has made good progress,
further reducing overhead costs and building up cash resources.
The non ring fenced profit and loss account for the 6 months ended
31st December 1997,shows a profit before tax of #197,000 (1996:#70,000 loss).
On the basis of June 1997 valuations the non ring fenced NAV at 31st December
1997 was 82.9p per share(1996: 72.2p).
The Board is of the view that Orb's investment properties in aggregate today
have a higher value compared to June 1997. This partly relates to a general
improvement in the market, but also to further lettings at Percy Business
Park. Disposals of certain investment properties are now being actively
pursued at amounts which should show a surplus against book value.
Historically, a large proportion of Orb's NAV has been represented by
ungeared development properties, generating limited current income and
requiring substantial future investments.To improve the Group's cash position
as well as current cash flow, the disposal of these sites has accordingly
had a high priority.
On 26th February 1998 we completed the sale of the 10 acre site at Stirchley,
for #1.5m in cash and the first half result reflects the price obtained,by
the release of earlier provisions made. Free cash increased by #1.5m from
this transaction and the current income will improve accordingly.
On 6th March 1998 we exchanged a conditional contract to sell the site at
Tudor Road, Reading. Subject to the satisfactory outcome of a site
investigation currently being conducted, the contract is expected to become
unconditional no later than 30th June 1998. Proceeds of an estimated #770,000
will further add to Orb's free cash resources. The 30th June 1997 book value
was #850,000 and the sale will thus generate a small loss which has been
reflected in the first half accounts.
In aggregate, a disposal of both development sites in the second half will
generate free cash of circa #2,270,000.
As announced on 10th March 1998 the Company gave twelve months notice of
termination of the executive service contract to Philip Ridal the Finance
Director and Company Secretary. The Board wishes to thank Mr Ridal for his
excellent performance and success in participating in the management of the
Company's affairs during a difficult period for the Company.
Further staff reductions have been implemented such that head office staff
are now reduced to three. Office space has been rationalised and further
reductions in central costs are envisaged. The release of funds from the
disposal of low yielding development sites, together with cost reductions,
is now bringing the Company towards a positive cash flow situation after
loan amortisation.
During the second half, we expect to dispose of the last remaining ring
fenced UK property, further simplifying the Group's financial statements.
No significant progress has been achieved with the ring fenced Brandywine
development land project in Maryland USA. The Board will review the book
value of this investment at the year end.
For different reasons, our Company has been forced to spend recent years
focusing on simplifying its balance sheet and eliminating some negative
remainders from the past. However, the Company is moving towards a situation
where the NAV is made up of investment properties generating good current
income and a significant amount of free cash. No contingent liabilities of
significance remain and the central costs are coming down towards a more
appropriate level.
Orb is a "minnow" among public property companies. However, we believe a
strong and "liquid" balance sheet, substantial tax losses and a full listing,
is a good platform from which to grow shareholder value. It is obvious that
such growth will not necessarily be organic, but will rather require further
contributions from shareholders and/or a merger with another company.
Peter Gyllenhammar
Chairman
U N A U D I T E D C O N S O L I D A T E D
P R O F I T A N D L O S S A C C O U N T
for the Six Months ended 31st December 1997
Unaudited Unaudited Audited
31.12.97 31.12.96 30.6.97
#'000 #'000 #'000
Turnover
Property sales - - -
Rental and other income 687 1,388 2,804
687 1,388 2,804
Cost of sales
Property sales - - -
Other property outgoings (109) (474) (658)
Provisions released 310 - 44
201 (474) (614)
Gross profit 888 914 2,190
Administrative expenses (345) (328) (641)
Operating profit 543 586 1,549
(Loss)/profit on sale of properties
and investments - (10) 641
Share of losses in associated
undertakings - (35) (77)
Exceptional item -
Financial reconstruction - - (5)
Profit on ordinary activities
before interest and taxation 543 541 2,108
Net interest payable and similar charges (457) (902) (1,745)
Profit/(loss) on ordinary activities
before taxation 86 (361) 363
Tax on profit/(loss) on
ordinary activities - 30 (315)
Retained profit/(loss)
for the period 86 (331) 48
Non ring fenced profit/(loss) 197 (70) 46
Ringed fenced (loss)/profit (111) (261) 2
86 (331) 48
Profit/(loss)per share 1.3p (5.0)p 0.7p
The above transactions relate to continuing operations
U N A U D I T E D C O N S O L I D A T E D B A L A N C E S H E E T
As at 31st December 1997
Unaudited Unaudited Audited
31.12.97 31.12.96 30.6.97
#'000 #'000 #'000
Fixed assets:
Tangible assets:
Investment properties 6,732 14,021 6,725
Other fixed assets 22 78 30
Investments 1,315 1,266 1,296
8,069 15,365 8,051
Current assets:
Trading properties 7,097 6,857 6,750
Debtors 331 651 1,046
Cash at bank and in hand 1,718 815 1,759
9,146 8,323 9,555
Creditors: amounts falling due
within one year:
Limited recourse loans (6,168) (6,471) (7,006)
Convertible limited recourse loans - (1,767) -
Other loans (163) (977) (977)
Other creditors (1,023) (1,176) (1,410)
(7,354) (10,391) (9,393)
Net current assets/(liabilities) 1,792 (2,068) 162
Total assets less current liabilities 9,861 13,297 8,213
Creditors: amounts falling due
after more than one year (4,370) (10,276) (2,989)
5,491 3,021 5,224
Capital and reserves
Called up share capital 3,313 3,313 3,313
Revaluation reserve (809) (1,818) (806)
Special reserve 2,381 2,381 2,381
Profit and loss account (2,563) (2,871) (2,655)
Limited recourse reserve 3,169 2,016 2,991
Equity shareholders' funds 5,491 3,021 5,224
N O T E S
1. Basis of preparation
The financial information contained in this statement does not constitute
statutory accounts within the meaning of the Companies Act 1985. This
statement has not been audited. The results for the year ended 30th June
1997 are an extract from the financial statements for that period, which
received an unqualified audit report and have been filed with the
Registrar of Companies.
The interim accounts have been prepared on the basis of the accounting
policies set out in the 1997 Group accounts. After reviewing detailed
cash flow projections and taking into account planned property disposals,
cash resources and borrowing facilities,and making such further enquiries
as they consider appropriate, the Directors have a reasonable expectation
that the Group has adequate resources to continue in operational
existence for the foreseeable future. For this reason they continue
to adopt the going concern basis in preparing the interim accounts.
N O T E S
2. Analysis of unaudited consolidated profit and loss account
Unaudited six months to 31.12.97
Non ring Ring Total
fenced fenced
#'000 #'000 #'000
Turnover
Property sales - - -
Rental and other income 418 269 687
418 269 687
Cost of sales
Property sales - - -
Other property outgoings (53) (56) (109)
Provisions released 310 - 310
257 (56) 201
Gross profit 675 213 888
Administrative expenses (318) (27) (345)
Operating profit 357 186 543
(Loss)/profit on sale of properties
and investments - - -
Share of losses in associated
undertakings - - -
Exceptional item -
Financial reconstruction - - -
Profit on ordinary activities
before interest and taxation 357 186 543
Net interest payable and similar charges (160) (297) (457)
Profit/(loss)on ordinary activities
before taxation 197 (111) 86
Tax on profit/(loss) on
ordinary activities - - -
Retained profit/(loss) for the period 197 (111) 86
Profit/(loss)per share 3.0p 1.3p
The above transactions relate to continuing operations
N O T E S
2. Analysis of unaudited consolidated profit and loss account
Unaudited six months to 31.12.96
Non ring Ring Total
fenced fenced
#'000 #'000 #'000
Turnover
Property sales - - -
Rental and other income 602 786 1,388
602 786 1,388
Cost of sales
Property sales - - -
Other property outgoings (63) (411) (474)
Provisions released - - -
(63) (411) (474)
Gross profit 539 375 914
Administrative expenses (285) (43) (328)
Operating profit 254 332 586
(Loss)/profit on sale of properties
and investments (10) - (10)
Share of losses in associated
undertakings (35) - (35)
Exceptional item -
Financial reconstruction - - -
Profit on ordinary activities
before interest and taxation 209 332 541
Net interest payable and similar charges (309) (593) (902)
Profit/(loss) on ordinary activities
before taxation (100) (261) (361)
Tax on profit/(loss) on
ordinary activities 30 - 30
Retained profit/(loss) for the period (70) (261) (331)
Profit/(loss) per share (1.1)p (5.0)p
The above transactions relate to continuing operations
N O T E S
2. Analysis of unaudited consolidated profit and loss account
Audited year to 30.6.97
Non ring Ring Total
fenced fenced
#'000 #'000 #'000
Turnover
Property sales - - -
Rental and other income 1,248 1,556 2,804
1,248 1,556 2,804
Cost of sales
Property sales - - -
Other property outgoings (125) (533) (658)
Provisions released 44 - 44
(81) (533) (614)
Gross profit 1,167 1,023 2,190
Administrative expenses (590) (51) (641)
Operating profit 577 972 1,549
(Loss)/profit on sale of properties
and investments 106 535 641
Share of losses in associated
undertakings (77) - (77)
Exceptional item -
Financial reconstruction (5) - (5)
Profit on ordinary activities
before interest and taxation 601 1,507 2,108
Net interest payable and similar charges (573) (1,172) (1,745)
Profit/(loss) on ordinary activities
before taxation 28 335 363
Tax on profit/(loss) on
ordinary activities 18 (333) (315)
Retained profit/(loss) for the period 46 2 48
Profit/(loss) per share 0.7p 0.7p
The above transactions relate to continuing operations
N O T E S
3. Analysis of unaudited consolidated balance sheet
Unaudited
Non ring Ring Total
fenced fenced 31.12.97
Fixed assets #'000 #'000 #'000
Tangible assets:
Investment properties 6,732 - 6,732
Other fixed assets 22 - 22
Investments 413 902 1,315
7,167 902 8,069
Current assets:
Trading properties 2,247 4,850 7,097
Debtors 227 104 331
Cash at bank and in hand 1,147 571 1,718
3,621 5,525 9,146
Creditors: amounts falling due
within one year
Limited recourse loans - (6,168) (6,168)
Convertible limited recourse loans - - -
Other loans (163) - (163)
Other creditors (764) (259) (1,023)
(927) (6,427) (7,354)
Net current assets/(liabilities) 2,694 (902) 1,792
Total assets less current liabilities 9,861 - 9,861
Creditors: amounts falling due
after more than one year (4,370) - (4,370)
Net asset/(liabilities) 5,491 - 5,491
Net asset value per share 82.9p 82.9p
N O T E S
3. Analysis of unaudited consolidated balance sheet
Unaudited
Non ring Ring Total
fenced fenced 31.12.96
Fixed assets #'000 #'000 #'000
Tangible assets:
Investment properties 9,085 4,936 14,021
Other fixed assets 45 33 78
Investments 413 853 1,266
9,543 5,822 15,365
Current assets:
Trading properties 1,824 5,033 6,857
Debtors 467 184 651
Cash at bank and in hand 209 606 815
2,500 5,823 8,323
Creditors: amounts falling due
within one year
Limited recourse loans - (6,471) (6,471)
Convertible limited recourse loans - (1,767) (1,767)
Other loans (977) - (977)
Other creditors (749) (427) (1,176)
(1,726) (8,665) (10,391)
Net current assets/(liabilities) 774 (2,842) (2,068)
Total assets less current liabilities 10,317 2,980 13,297
Creditors: amounts falling due
after more than one year (5,529) (4,747) (10,276)
Net asset/(liabilities) 4,788 (1,767) 3,021
Net asset value per share 72.2p 45.6p
N O T E S
3. Analysis of unaudited consolidated balance sheet
Audited
Non ring Ring Total
fenced fenced 30.06.97
Fixed assets #'000 #'000 #'000
Tangible assets:
Investment properties 6,725 - 6,725
Other fixed assets 30 - 30
Investments 409 887 1,296
7,164 887 8,051
Current assets:
Trading properties 1,900 4,850 6,750
Debtors 235 811 1,046
Cash at bank and in hand 767 992 1,759
2,902 6,653 9,555
Creditors: amounts falling due
within one year
Limited recourse loans - (7,006) (7,006)
Convertible limited recourse loans - - -
Other loans (977) - (977)
Other creditors (876) (534) (1,410)
(1,853) (7,540) (9,393)
Net current assets/(liabilities) 1,049 (887) 162
Total assets less current liabilities 8,213 - 8,213
Creditors: amounts falling due
after more than one year (2,989) - (2,989)
Net asset/(liabilities) 5,224 - 5,224
Net asset value per share 78.8p 78.8p
N O T E S
4. Investment properties
Investment properties are revalued annually by independent valuers. A
full valuation was carried out as at 30th June 1997 and those values have
been used in the preparation of the interim accounts for the period ended
31st December 1997.
5. Assets and earnings per share
The calculation of earnings per share is based on the profit for the
financial period and on the weighted average of 6,626,429(1996:6,626,429)
Ordinary 50p shares in issue during the period. The assets per share
values have been prepared on two bases as set out in the notes to the
1997 Group accounts. The Directors believe that the 'non ring fenced'
basis of calculation provides a realistic view of the net asset value
attributable to the Ordinary 50p shares.
6. Administrative expenses
Property management fees of #12,500 (1996: #12,500) payable from ring
fenced funds have been credited to non ring fenced administrative
expenses, thereby increasing ring fenced costs. There is no effect on
total administrative expenses.
7. Taxation
There is no UK Corporation Tax payable in respect of the profit for the
period, as individual company profits are covered by Group relief or the
availability of brought forward losses.
8. Other information
This statement was approved by the Directors on 12th March 1998 and will
be posted to all shareholders shortly thereafter. Further copies are
available from the registered office of the Company, 24 Brook's Mews,
London W1Y 1LF.
Directors
P Gyllenhammar Chairman
P M Ridal FCA MCT Finance Director and Company Secretary
M J C Hawkes FRICS Non - Executive Director
M Higgins FRICS Non - Executive Director
J Claesson Non - Executive Director
Auditors
Deloitte & Touche, Hill House, 1 Little New Street, London, EC4A 3TR
Registered number
Registered in England and Wales No. 552331
Registrars
Lloyds Bank PLC, Goring-by-Sea, Worthing, West Sussex BN99 6DB
END
IR JTMTBLLTBBMP
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