TIDMTRAF
RNS Number : 0440O
Trafalgar Property Group PLC
30 September 2019
30 September 2019
TRAFALGAR NEW HOMES PLC
("Trafalgar", the "Company" or "Group")
Final Results for the year ended 31 March 2019 and notice of
Annual General Meeting
Trafalgar (AIM: TRAF), the AIM quoted residential property
developer operating in southeast England, announces its final
results for the twelve months ended 31 March 2019.
The Company's Annual Report is being posted to shareholders
today and contains notice of the Annual General Meeting of the
Company to be held at the Company's offices at Chequers Barn, Bough
Beech, Edenbridge, Kent TN8 7PD at 11.00 a.m. on 25 October
2019.
Highlights
-- Group turnover was GBP2,123,500 (2018: GBP906,484), with a loss after tax of GBP 2,296,422 (2018: Loss
GBP424,903), after taking into account exceptional item of GBP1,559,319.
-- Group turnover for the year amounted to GBP 2,123,500, representing the sale of five residential properties.
-- Management have concluded that an impairment of the investments in subsidiaries is prudent and that these will be
written down to zero, resulting in an exceptional charge of GBP1,559,319.
-- The cash on the balance sheet at the end of the year was GBP32,800 (2018: GBP458,209) and the Group continues to
have sufficient bank facilities for all planned activities.
-- On 27th May, 2019 Chris Johnson and his son Alex Johnson stepped down from the Group Board, although they remain
involved on a consultancy basis. On the same day, Paul Treadaway was appointed as the new Group Managing Director
which strengthens the Board with his particular expertise being in the sector for assisted living developments.
This retains a good balance of complementary skills on the Board.
Enquiries:
Trafalgar Property Group plc +44 (0) 7899
James Dubois 995 421
SPARK Advisory Partners Limited - AIM Nominated
Adviser +44 (0) 203 368
Matt Davis 3550
+44 (0) 20 7409
Peterhouse Capital Limited - Broker 0930
Duncan Vasey/Lucy Williams
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 ("MAR"). With the publication of this announcement,
this information is now considered to be in the public domain.
Notes to Editors:
Trafalgar Property Group plc
For further information visit www.trafalgarproperty.group
CHAIRMAN'S STATEMENT
for the year ended 31 March 2019
On behalf of the Board, I present Trafalgar Property Group's
results for the year ended 31 March 2019 which show five property
sales were recorded in the year. The overall result was very
disappointing, as can be seen in the attached Accounts and
Strategic Report.
We will continue to explore the potential for acquiring new
sites that should produce increased turnover and a return to
profit.
Financials
The year under review saw Group turnover at GBP2,123,500 (2018:
GBP906,484), with a loss after tax of GBP2,296,422 (2018: Loss
GBP424,903), after taking into account exceptional items as
detailed in note 19 to the accounts.
Management have performed a review of the assets and liabilities
of the underlying subsidiaries which form the value of the
anticipated profits on ongoing developments. In addition, the value
of land options in Trafalgar Retirement + have been re-assessed. At
the time of approval of the financial statements there is no
confirmed planning permission on these land options.
Due to the uncertainties and timing of developments it has been
agreed by management not to include any future anticipated profits
of developments in their assessment. Therefore the net asset value
of the underlying investments does not support the Trafalgar
Property Group's carrying value of investments in the
subsidiaries.
Management have concluded that an impairment of the investments
is prudent and that these will be written down to zero, resulting
in an exceptional charge of GBP1,559,319.
The cash on the balance sheet at the end of the year was
GBP32,800 (2018: GBP458,209) and the Group continues to have
sufficient bank facilities for all planned activities.
Business Environment and Outlook
Our recent move into the assisted living sector gives us an
opportunity to expand into fresh areas of residential units where
we see an enormous demand, especially in the South-East. However,
our failure in obtaining finance for our first venture, at
Camberley, has proved a poor start to our ambitions in this
direction.
On 27(th) May, 2019 Chris Johnson and his son Alex Johnson
stepped down from the Group Board, although they remain involved on
a consultancy basis. On the same day, Paul Treadaway was appointed
as the new Group Managing Director which strengthens the Board with
his particular expertise being in the sector for assisted living
developments. This retains a good balance of complementary skills
on the Board. We are currently progressing offers of finance
alongside our planning applications so that we should be well
placed to commence our developments as soon as planning
permits.
I would refer you to Paul Treadaway's Strategic Report that
covers our activities in more detail.
James Dubois
Chairman
27 September 2019
Trafalgar Property Group Plc
STRATEGIC REPORT
for the year ended 31 March 2019
Business review, results and dividends
All trading and property assets of Trafalgar Property Group Plc
are held in the name of Trafalgar Property Group Plc or its
subsidiaries as follows:
Trafalgar New Homes Limited
Trafalgar Retirement+ Limited
Combe Bank Homes (Oakhurst) Limited
Combe Homes (Borough Green) Ltd
All bank and mortgage borrowings are the liability of Trafalgar
New Homes Ltd, the wholly owned subsidiary of Trafalgar Property
Group Plc. The shares of Trafalgar Property Group Plc are quoted on
the London Stock Exchange AIM market.
The principal activity of the Group continues to be that of home
building and property development and the consolidated results of
the year's trading, are shown below. The consolidated loss for the
year amounted to GBP2,296,422 (2018: Loss GBP424,903) after taking
into account exceptional items as mentioned in note 19 to the
accounts.
Principal risks & uncertainties
Set out below are certain risk factors which could have an
impact on the Group's long-term performance. The factors discussed
below should not be regarded as a complete and comprehensive
statement of all potential risks and uncertainties facing the
Group.
The principal risks and uncertainties facing the Group are:
1. Any possibility that lending criteria from the Group's
bankers may harden with little prior notice.
2. Construction costs may escalate and eat into gross profit margins.
3. Heavy overheads may be incurred especially when projects have
been completed and before others have been commenced.
4. The Group could pay too much for land acquisitions.
5. The Group's reliance on key members of staff.
6. The market may deteriorate, damaging liquidity of the group and future revenues.
The Group considers that it mitigates these risks with the
following policies and actions:
1. The Group affords its bankers and other lenders a strong
level of asset and income cover and maintains good relationships
with a range of funding sources from which it is able to secure
finance on favourable terms.
2. Construction costs are outsourced on a fixed price contract
basis, thereby passing on to the contractor all risk of development
cost overspend, including from increased material, labour or other
costs.
3. Most other professional services are also outsourced, thus
providing a known fixed cost before any project is taken forward
and avoiding the risk that can arise in employing in-house
professionals at a high unproductive overhead at times when
activity is slack.
4. Land buying decisions are taken at board level, after careful
research by the Directors personally, who have substantial
experience of the house building industry, potential construction
issues and the local market.
The Group focuses on a niche market sector of new home
developments in the range of 4 to 20 units. Within this unit size,
competition to purchase development sites from land buyers is
relatively weak, as this size is unattractive to major national and
regional house builders who require a larger scale to justify their
administration and overheads, whilst being too many units for the
smaller independent builder to finance or undertake as a project.
Within this market, there are opportunities to negotiate land
acquisitions on favourable terms. Many competitors who also focus
on this niche have yet to recapitalise and are unable to raise
finance.
5. Many of the activities are outsourced and each of the
Directors is fully aware of the activities of all members.
6. The Group has a rigorous corporate governance policy
appropriate for a publicly quoted company with ambitions
substantially to raise its profile within the wider investor
community.
Operations review
A summary of the results for the year is as follows:-
2019 2018
GBP GBP
Revenue for the year 2,123,500 906,484
Gross (loss)/profit (264,171) 33,838
Loss after taxation (2,296,422) (424,903)
Group turnover for the year amounted to GBP 2,123,500,
representing the sale of five residential properties.
After taking into account the overheads of the Group, there was
a loss recorded for the year of GBP 2,296,422 after exceptional
items as detailed in note 19.
There will be no tax charge and the Company now has tax losses
being carried forward of GBP 3,364,609 (2018: losses
GBP2,642,077)
The loss per share is (0.54p), (2018: loss per share 0.10p)
during the year.
As can be seen from the above , the Group failed to achieve a
profit for the year under review and, as at the year end, only five
of the residential units developed during the year have been sold,
being the 2 apartments at the Burnside Tunbridge Wells, Kent
development, the two remaining terraced houses at the Edenbridge,
Kent development and one of the two detached houses at
Hildenborough Kent development.
Key performance indicators (KPIs)
Management are closely involved in the day to day operations of
the Group and are very aware of cashflows and expenditure. However,
Management believe that the key indicators of performance for the
group are the revenue and profitability achieved during the period.
These measures are disclosed above in the operations review.
Development Pipeline & outlook
The year under review was not without its difficulties. In the
residential division delays occurred on the building programme for
the various properties that were still in the course of
construction, or being finished off, with contractors appointed to
complete the works but unable to follow the timetable laid down for
completion of those works.
The delays lead to escalating interest costs on borrowing and
therefore affected the profitability of the completed units that
were for sale, on the disposal of the same. Five of the units were
sold during the year grossing GBP2,123,500.
Rather than sell the remaining completed units into a declining
market the units were retained by the group, refinanced and let out
on assured shorthold tenancy agreements which in every case
resulted in the group receiving rents in excess of the borrowing
cost of each property.
Currently the group holds 4 "let out" properties, valued at
GBP1,975,000.
The substantial detached property developed by the group at
Saxons, Speldhurst Nr Tunbridge Wells, Kent required further build
work which was commenced during the year and is nearing completion
and terms have been agreed with a buyer for a sale of the property
at GBP1,600,000, subject to contract, which once the necessary
residual works have been completed should conclude.
During the year work has continued on the 6 town house site at
Sheerness, Kent where, again, contractor difficulties were
experienced with the appointed contractor ceasing work on site
resulting in the group having to appoint an alternative contractor
to complete the works. Work on site is anticipated to be completed
by end October where all the properties will be put on the market
for sale and we will be taking advantage of the "help to buy"
scheme for which we are registered.
The integration of Trafalgar Retirement +, the extra/care
assisted living operator has gone well and they have secured a
number of options for both extra/care assisted living developments
and vanilla residential developments which should provide a steady
supply of sites for development in both sectors, to contribute to
turnover in the current year and beyond.
Whilst Trafalgar Retirement+ continue to identify and secure new
land opportunities for extra/care and assisted living, they are
equally focused on obtaining a successful outcome on the sites
currently under option and/or in for planning. Once planning has
been achieved then the sites can be built out and placed for sale
on the open market, or in the care of the smaller residential
schemes, sold on with planning, both options being profitable to
the business.
Notwithstanding that finance is readily available for the modest
sized residential development schemes which the group has
specialised in, difficulties have been experienced in the raising
of finance for the substantial larger extra case/assisted living
schemes which the group wishes to undertake and the group is
accordingly actively seeking the finance for such developments at
the present time.
Since the year end Trafalgar Retirement+ entered into a
guarantee agreement for GBP360,000 for funds supplied by Mr C
Johnson, being a deposit forfeited by Randell House Ltd, a
subsidiary of Trafalgar Retirement+. This is related to the
acquisition of an assisted living site in Camberley Surrey, where
the acquisition was not completed.
Financial Instruments
The Group's principal financial instruments comprise cash at
bank, bank loans, other loans and various items within current
assets and current liabilities that arise directly from its
operations. The Directors consider that the key financial risk is
liquidity. This risk is explained in the section headed 'Principal
risks and uncertainties' in the Annual Report and Accounts on page
3.
Paul Treadaway
Director
27 September, 2019
Trafalgar Property Group Plc
DIRECTORS' REPORT
for the year ended 31 March 2019
TRAFALGAR PROPERTY GROUP PLC
DIRECTORS' REPORT
The Directors present their Report and Audited Financial
Statements for the year ended 31 March 2019.
Results and dividends
The results for the year are set out on page 14.
The Directors do not recommend the payment of a final dividend
for the year (2018: nil).
Directors
The following Directors have held office since 1 April 2018 and
have all served for the entire accounting year:-
C C Johnson
A D Johnson
N A C Lott
J Dubois
D C Stocks
Appointed post year end: Resignations post year end:
P A Treadaway - 27 May 2019 C C Johnson - 27 May 2019
A D Johnson - 27 May 2019
Conflicts of interest
Under the articles of association of the company and in
accordance with the provisions of the Companies Act 2006, a
Director must avoid a situation where he has, or can have, a direct
or indirect interest that conflicts, or possibly may conflict with
the company's interests. However, the Directors may authorise
conflicts and potential conflicts, as they deem appropriate. As a
safeguard, only Directors who have no interest in the matter being
considered will be able to take the relevant decision, and the
Directors will be able to impose limits or conditions when giving
authorisation if they think this is appropriate. During the
financial year ended 31 March 2019, the Directors have authorised
no such conflicts or potential conflicts.
Directors' interests in shares
Directors' interests in the shares of the Company, including
family interests, at 31 March 2019 were as follows:-
31.03.2019 31.03.2018
Ordinary shares Ordinary shares of 1p
of 0.1p each each
C C Johnson 186,815,803 186,815,803
A Johnson 1,868 1,868
J Dubois 1,500,000 1,500,000
N Lott 500,000 500,000
D C Stocks 80,330,532 80,330,532
P Treadaway 106,484,658 106,484,658
P Treadaway was a shareholder as at 31(st) March, 2019 and
31(st) March, 2018, but not a Director as at that time.
Other substantial shareholdings
As at 26 September, 2019, being the latest practicable date
before the issue of these financial statements, the company had
been notified of the following shareholdings which constitute 3% or
more of the total issued shares of the company at that date.
Ordinary
shares Shareholding
No. %
C.C. Johnson 186,815,803 38.31
D C Stocks 80,330,532 16.47
P Treadaway 106,484,658 21.83
Statement of directors' responsibilities
The Directors are responsible for preparing the Strategic
Report, Directors' Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the financial statements in accordance with
FRS 102 and applicable law. Under company law the Directors must
not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Group
and of the profit or loss of the Group for that year. In preparing
these financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether applicable Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will continue
in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's
transactions and disclose with reasonable accuracy at any time the
financial position of the Group and enable them to ensure that the
financial statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
They are further responsible for ensuring that the Strategic
Report and the Report of the Directors and other information
included in the Annual Report and Financial Statements is prepared
in accordance with applicable law in the United Kingdom.
The maintenance and integrity of the Group website is the
responsibility of the Directors; the work carried out by the
auditors does not involve the consideration of these matters and,
accordingly, the auditors accept no responsibility or any changes
that may have occurred in the accounts since they were initially
presented on the website.
Legislation in the United Kingdom governing the preparation and
dissemination of the accounts and the other information included in
annual reports may differ from legislation in other
jurisdictions.
Financial Instruments
Information relating to the financial instruments is now
included in the Strategic report on pages 3-5.
Future Developments
Information relating to future developments is included in the
Strategic report on pages 3-5.
Provision of information to auditor
Each of the persons who are Directors at the time when this
Directors' Report is approved has confirmed that:
-- so far as that Director is aware, there is no relevant audit
information of which the Group's auditor is unaware; and
-- that Director has taken all the steps that ought to have been
taken as a Director in order to be aware of any information need by
the Group's auditor in connection with preparing their report and
to establish that the Group's auditor is aware of the
information.
Auditor
During the year the company changed auditors from Crowe UK LLP,
to MHA MacIntyre Hudson.
The auditor, MHA MacIntyre Hudson, will be proposed for
re-appointment in accordance with Section 489 of the Companies Act
2006.
This report was approved by the board and signed on its
behalf.
Paul Treadaway Director
27 September 2019
Trafalgar Property Group Plc
CORPORATE GOVERNANCE STATEMENT
The Board of Trafalgar Property Group Plc recognise the value of
good corporate governance and has through the year ended 31 March
2019 implemented corporate governance procedures appropriate for
the present size of the entity having given due regard to the
Corporate Governance Code for Small and Mid-Size Quoted Companies
issued by the Quoted Companies Alliance ("QCA"). In accordance with
AIM Rule 26 as amended, the Company has decided to apply the QCA
Corporate Governance Code ("QCA Code") issued by the QCA in May
2018 and is publishing on its website details of the QCA Code, how
the Company complies with the QCA Code and, where it departs from
the QCA Code, an explanation of the reasons for doing so.
Board Structure
The Board consists of four Directors of which two are executive
and two non-executive.
The Board meets as and when required and is satisfied that it is
provided with information in an appropriate form and quality to
enable it to discharge its duties. All Directors are required to
retire by rotation with one third of the board seeking re-election
each year.
Due to the current size of the Group, the duties that would
normally be attributed to The Nomination Committee, have been
undertaken by the board as a whole.
The board has undertaken a formal assessment of the auditor's
independence and will continue to do so at least annually. This
assessment includes:
-- a review of non-audit services provided to the company and the related fees;
-- a review of the auditor's own procedures for ensuring the
independence of the audit firm and parties
and staff involved in the audit, including regular rotation of
the audit partner; and
-- obtaining confirmation from the auditor that, in their
professional judgement, they are independent.
Internal Controls
The Board is responsible for the Group's system of internal
controls and for reviewing their effectiveness. The internal
controls are designed to ensure the reliability of financial
information for both internal and external purposes. The Directors
are satisfied that the current controls are effective with regard
to the size of the Group. Any internal control system can only
provide reasonable, but not absolute assurance against material
mis-statement or loss. Given the size of the Group, the Board has
assessed that there is currently no need for an internal audit
function.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF TRAFALGAR PROPERTY
GROUP PLC
Opinion
We have audited the group financial statements of Trafalgar
Property Group Plc for the year ended 31 March 2019 which comprise
the Group Statement of Comprehensive Income, the Group Statement of
Financial Position, the Group Statement of Changes in Equity, the
Group Cash Flow Statement and notes to the financial statements,
including a summary of significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
In our opinion:
-- the financial statements give a true and fair view of the
state of the group's affairs as at 31 March 2019 and of the Group's
loss for the year then ended;
-- the financial statements have been properly prepared in
accordance with IFRS as adopted by the European Union; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the group financial
statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to SME listed entities, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements.
Conclusions relating to going concern
Material uncertainty related to going concern
We draw attention to the going concern section in the notes to
the financial statements. The group's ability to generate funds to
meet short term operating cash requirements and loan repayments is
reliant on the group's ability to sell the properties it holds, or
to obtain alternative financing. The timing of these sales is
uncertain and as a result the group is currently reliant on long
term investor loans being renewed when they come up for
repayment.
Notwithstanding the disclosure in the going concern note in the
notes to the accounts and the directors' belief that it is
appropriate to produce these accounts on a going concern basis, we
consider there to be factors that indicate that a material
uncertainty exists that may cast doubt on the ability of the
company to continue as a going concern. Our opinion is not modified
in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the group
financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not
due to fraud) we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the
group financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
The key audit matters that we identified for the year ended 31
March 2019 are:
Key audit matter How the scope of our audit addressed
the key audit matter
================================ ==============================================
Valuation of inventory
The group develops properties We reviewed the additions to the
at a number of sites incurring inventory value during the year ensuring
significant costs. These that the amounts recognised were
are required to be valued appropriate and accounted for correctly.
at the lower of cost and In addition we reviewed the assessed
net realisable value. realisable value of the developments
for indications of potential impairment
in the carrying value of the inventory
by reference to agents' valuations
and market trends and data.
================================ ==============================================
Revenue recognition
The group recognises revenue We reviewed sales during the year
at the point of completion. to ensure that these were recognised
in line with the stated revenue recognition
policy.
We reviewed revenue recognised post
year end to ensure cut-off had been
suitably applied.
================================ ==============================================
Going concern
The financial statements In assessing the appropriateness
have been prepared on of the going concern assumption used
a going concern basis in preparing the financial statements,
as discussed in the notes our procedures included, amongst
to the financial statements. others:
Historically, the Group -- Assessing the cash flow requirements
has been loss making, of the Group over the next 12 months
and has raised capital based on budgets and forecasts.
and taken out borrowings -- Understanding what forecast expenditure
to fund costs during an is committed and what could be considered
extended growth phase. discretionary.
Accumulated losses shown -- Considering the liquidity of existing
in the Consolidated Balance assets on the balance sheet.
Sheet totalled GBP2,610,307 -- Considering the terms of the bank
as at 31 March 2019. loan and trade finance facilities
We included the going and the amount available for drawdown.
concern assumption as -- Considering the continued support
a key audit matter as of the Directors and Related Party
it relies on existing Loans.
cash reserves and revenue
growth generating sufficient
cashflows to cover necessary
expenditure.
================================ ==============================================
Our application of materiality
The materiality that we used for the consolidated financial
statements was GBP92,000 (2018: GBP125,000). We determine
materiality using 2% of the total assets of the Group (2018: 2% of
total assets), which we have determined, in our professional
judgment, to be one of the principal benchmarks within the
financial statements relevant to members of the Company in
assessing financial performance.
We report to the director's all corrected and uncorrected
misstatements we identified through our audit with a value in
excess of GBP4,600 (2018: GBP2,000), in addition to other audit
misstatements below that threshold that we believe warranted
reporting on qualitative grounds.
An overview of the scope of our audit
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of whether the accounting policies are
appropriate to the Company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the directors; and the
overall presentation of the financial statements. In addition, we
read all the financial and non-financial information in the
Chairman's statement, Strategic report and Directors' report to
identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge acquired
by us in the course of performing the audit. If we become aware of
any apparent material misstatements or inconsistencies, we consider
the implication for our report.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the group financial statements,
our responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the group financial statements or our knowledge
obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether there
is a material misstatement of the group financial statements or a
material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Opinion on matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the group
financial statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the
directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement set out on page 7, the directors are responsible for the
preparation of the group financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable
the preparation of group financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the group financial statements, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the group financial
statements
Our objectives are to obtain reasonable assurance about whether
the group financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at:
http://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor's report.
Use of our audit report
This report is made solely to the parent company's members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to
the parent company's members those matters we are required to state
to them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the parent company and the
parent company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Andrew Moyser FCCA ACA (Senior statutory auditor)
for and on behalf of
MHA Macintyre Hudson
Chartered Accountants and Statutory Auditors
Equipoise House
Grove Place
Bedford
MK40 3LE
27 September 2019
Trafalgar Property Group Plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2019
Year Year
ended ended
31 March
31 March
Note 2019 2018
GBP GBP
Revenue 2,123,500 906,484
Cost of sales (2,392,360) (880,846)
----------- ---------
Gross (loss)/profit (268,860) 25,638
Administrative expenses (472,932) (440,014)
Operating (loss) (741,792) (414,376)
(Loss) before interest (741,792) (414,376)
Other income 2 4,689 8,200
Exceptional items 19 (1,559,319) -
Interest payable and similar charges 5 - (18,727)
(Loss) before taxation (2,296,422) (424,903)
Tax payable on (loss) on ordinary activities 6 -
(Loss) after taxation for the year attributable
to equity
holders of the parent (2,296,422) (424,903)
=========== =========
Other comprehensive income attributable to
equity
holders of the parent - -
Total comprehensive (loss) for the year (2,296,422) (424,903)
(Loss) attributable to:
Equity holders of the Parent (2,296,422) (424,903)
=========== =========
Total comprehensive (loss) for the year attributable
to:
Equity holders of the Parent (2,296,422) (424,903)
(LOSS) PER ORDINARY SHARE:
Basic/diluted 7 (0.54)p (0.10)p
=========== =========
All results in the current and preceding financial year derive
from continuing operations.
The notes on pages 18 to 35 are an integral part of these
consolidated financial statements.
Trafalgar Property Group Plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 31 March 2019
31 March 31 March
Note 2019 2018
TOTAL ASSETS GBP GBP
Non-current assets
Property, plant and equipment 8 1,339 2,079
------------ -----------
1,339 2,079
Current assets
Inventory 11 4,481,230 7,792,611
Trade and other receivables 9 92,092 94,844
Cash at bank and in hand 10 32,800 458,209
------------ -----------
4,606,122 8,345,664
Total assets 4,607,461 8,347,743
============ ===========
EQUITIES & LIABILITIES
Current liabilities
Trade and other payables 12 442,203 394,255
Borrowings 13 2,502,462 3,108,510
2,944,665 3,502,765
Non-current liabilities
Deferred tax 6 - 291,045
Borrowings 13 4,273,103 4,867,818
Total liabilities 7,217,768 8,661,628
Equity attributable to equity holders of
the Company
Called up share capital 14 2,570,567 2,570,567
Share premium account 15 2,510,462 2,510,462
Reverse acquisition reserve (2,817,633) (2,817,633)
Profit & loss account (4,873,703) (2,577,281)
Total Equity (2,610,307) (313,885)
Total Equity & Liabilities 4,607,461 8,347,743
============ ===========
These financial statements were approved by the Board of
Directors and authorised for issue on 27 September, 2019 and are
signed on its behalf by:
P Treadaway: .............................................. J Dubois: ...................................................
The notes on pages 18 to 35 are an integral part of these
consolidated financial statements.
Trafalgar Property Group Plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2019
Re
Share capital Share premium Reverse Retained Total equity
acquisition profits
reserve /(losses)
GBP GBP GBP GBP GBP
At 1 April 2017 2,383,752 1,165,463 (2,817,633) (2,152,378) (1,420,796)
Loss for the year - - - (424,903) (424,903)
Total comprehensive
income for the
year - - - (424,903) (424,903)
------------- ------------- ------------ ------------- ------------
Issue of shares 186,815 1,344,999 - - 1,531,814
Share issue costs - - - - -
At 31 March 2018 2,570,567 2,510,462 (2,817,633) (2,577,281) (313,885)
------------- ------------- ------------ ------------- ------------
At 31 March 2018 2,570,567 2,510,462 (2,817,633) (2,577,281) (313,885)
(Loss) for year - - - (2,296,422) (2,296,422)
Total comprehensive
(loss) for the
year - - - (2,296,422) (2,296,422)
------------- ------------- ------------ ------------- ------------
Issue of shares - - - - -
Share issue costs - - - - -
At 31 March 2019 2,570,567 2,510,462 (2,817,633) (4,873,703) (2,610,307)
------------- ------------- ------------ ------------- ------------
The reverse acquisition reserve was created in accordance with
IFRS3 'Business Combinations'. The reserve arises due to the
elimination of the Company's investment in Trafalgar New Homes Ltd
(formerly Combe Bank Homes Limited). Since the shareholders of
Trafalgar New Homes Ltd became the majority shareholders of the
enlarged group, the acquisition is accounted for as though there is
a continuation of the legal subsidiary's financial statements. In
reverse acquisition accounting, the business combination's costs
are deemed to have been incurred by the legal subsidiary.retained
profit/(losses) - Relate to the profits/ losses earned by the
business that have not been distributed and have built up over the
years of trading.
For the purpose of preparing the consolidated financial
statement of the Group, share capital represents the nominal value
of the issued share capital of 0.1p per share (2018: 0.1p per
share). Share premium represents the excess over nominal value of
the fair value consideration received for equity shares net of
expenses plus deferred shares of 0.9p after issued share capital of
1p.
The notes on pages 18 to 35 are an integral part of these
consolidated financial statements.
Trafalgar Property Group Plc
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2019
-------------------------------------
2019 2018
GBP GBP
Cash flow from operating activities
(Loss) after taxation (2,296,422) (424,903)
Depreciation 740 447
Decrease/(increase) in stocks 3,494,598 (517,488)
Decrease in debtors 2,752 3,371
Increase in creditors 47,948 160,546
Interest paid 145,434 18,727
Net cash outflow from operating activities 1,395,050 (759,300)
------------ ---------
Investing activities
Purchase of tangible fixed assets - -
Net cash used in investing activities - -
------------ ---------
Taxation (291,045) -
------------ ---------
Financing activities
(Repayment)/new loans in year (1,520,763) 931,367
Director loan cash injected 320,000 204,061
Interest paid (328,651) (18,727)
------------ ---------
Net cash (outflow)/inflow from financing (1,529,414) 1,116,710
------------ ---------
Increase/(Decrease) in cash and cash equivalents
in the year (425,409) 357,401
------------ ---------
Cash and cash equivalents at the beginning
of the year 458,209 100,808
Cash and cash equivalents at the end of the
year 32,800 458,209
============ =========
The notes on pages 18 to 32 are an integral part of these
consolidated financial statements.
Trafalgar Property Group Plc
GROUP ACCOUNTING POLICIES
For the year ended 31 March 2019
BASIS OF ACCOUNTING
These financial statements are for Trafalgar Property Group Plc
("the Company") and its subsidiary undertakings ('the Group'). The
Company is a public company, limited by shares and incorporated in
England and Wales. (company number is 04340125). The Company's
registered office is Chequers Barn, Bough Beech, Edenbridge, Kent,
TN8 7PD.
The nature of the Group's operations and its principal
activities are set out in the Strategic Report on page 3.
BASIS OF PREPARATION
The Group financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) and
interpretations adopted by the European Union ("EU") and as applied
in accordance with the provisions of the Companies Act 2006. These
financial statements are for the year ended 31 March 2019 and are
presented in pounds sterling ("GBP"). The comparative year is for
the year to 31 March 2018.
The financial statements have been prepared under the historical
cost basis. The principal accounting policies adopted are set out
below.
GOING CONCERN
The Directors have reviewed forecasts and budgets for the coming
year, which have been drawn up with appropriate regard for the
current economic environment and the particular circumstances in
which the Group operates. These were prepared with reference to
historical and current industry knowledge, taking into account
future strategy of the Group.
The Group continues to utilise banking sources for the financing
of its developments, together with loans from third party
investors, to ensure that there is sufficient money available for
the Group to undertake and complete its various developments.
The Group do not operate an overdraft facility but borrow on a
site specific basis from various bankers, with a mix of loans from
outside investors geared to some of the development properties and
otherwise loaned on a general basis to the Group.
The Board is comfortable with the structure of its bank finance,
which usually involves the bank lending a modest sum towards the
land purchase for the modest sized residential development schemes,
with the Group putting up the rest of the funds required to acquire
the site and the costs associated with the acquisition and then for
the bank to provide 100% of the build finance. However,
difficulties have been experienced in the raising of finance for
the substantial larger extra care/assisted living schemes which the
group wishes to undertake and the group is accordingly actively
seeking the finance for such developments at the present time.
Investor loans that are not related to specific sites are long
term loans with repayment dates extending beyond the year end and
have, in the past, been renewed when they come up for
repayment.
The existing operations have been generating funds to meet
short-term operating cash requirements and management are confident
that the expected sales will allow the Group to meet loan
repayments due within the next twelve months or that the loans will
be refinanced.
As a result of these considerations, at the time of approving
the financial statements, the Directors consider that the Company
and the Group have sufficient resources to continue in operational
existence for the foreseeable future.
However given that a degree of uncertainty exists in the timing
of future sales, and management's ability to refinance all loans
due in the next twelve months, there exists a material uncertainty
in relation to the going concern basis adopted in the preparation
of the financial statements.
REVENUE RECOGNITION
Revenue represents the amounts receivable from the sale of
properties during the year and other income directly associated
with property development. Revenue from the sale of properties is
recognised when the amounts of revenue and cost can be measured
reliably, the significant risks and rewards of ownership have been
transferred to the buyer, neither continuing managerial involvement
nor effective control of the property is retained and it is
probable that the economic benefits associated with the sale will
flow to the group/company. In the majority of cases properties are
treated as sold and profits are recognised at the point of legal
completion.
The Directors are of the opinion that this accounting policy
accurately reflects commercial reality and the recording of revenue
for the group.
STANDARDS ISSUED BUT NOT YET EFFECTIVE
The fina The financial statements comply with IFRS as adopted
by the European Union. A number of new and revised Standards
and Interpretations have been adopted in the current period
by the Group for the first time and do not have a material
impact on the group.
The following new standards and amendments to standards and
interpretations have been issued but are not yet effective
and not early adopted. None of these are expected to have
a significant effect on the financial statements of the Group.
IFRS 3 1 January
Amendments resulting from Annual Improvements 2019
2015-2017 Cycle
IFRS 11
(re measurement of previously held interest)
IFRS 9 1 January
Amendments regarding prepayment features with 2019
negative compensation and modifications of
financial liabilities
IFRS 16 1 January
Leases - new standard 2019
IAS 12 1 January
Amendments resulting from Annual Improvements 2019
2015-2017 Cycle (income tax consequences of
dividends)
IAS 19 1 January
Amendments regarding plan amendments, curtailments 2019
or settlements
IAS 23 1 January
Amendments resulting from Annual Improvements 2019
2015-2017 Cycle (intended use or sale)
IAS28 1 January
Amendments regarding long-term interests in 2019
associates and joint ventures
Applied in year
IFRS 15
IFRS 15 establishes a comprehensive framework for determining
whether, how much and when revenue is recognised. It replaces IAS
18 Revenue, IAS 11 Construction contracts and related
interpretations. Under IFRS 15, revenue is recognised when a
customer obtains control of the good or services. The Group has
adopted IFRS 15 in full at the date of initial application (1
January 2018) but this has not had any impact on the recognition of
income.
IFRS 9
IFRS 9 establishes a framework of the recognition and
measurement, impairment, derecognition and general hedge
accounting. It replaces IAS 39 Financial Instruments: Recognition
and Measurement. The Group has adopted IFRS 9 in full at the date
of initial application (1 January 2018) and elected to apply the
limited exemptions in IFRS 9 relating to classification,
measurement and impairment requirements for financial instruments,
and accordingly comparative periods have not been restated and
remain in line with the previous standard IAS 39 Financial
Instruments: Recognition and Measurement.
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial
statements of Trafalgar Property Group Plc and its
subsidiaries.
The results of subsidiaries acquired during the year are
included from the effective date of acquisition, being the date on
which the Group obtains control. They are deconsolidated on the
date that control ceases.
The consideration transferred for the acquisition of a
subsidiary is the fair value of the assets transferred, the
liabilities incurred and the equity interests issued by the Group.
This fair value includes any contingent consideration.
Acquisition-related costs are expensed as incurred.
Investments in subsidiaries are accounted for at cost less
impairment. Cost also includes direct attributable costs of
investment. If the consideration is less than the fair value of the
assets and liabilities acquired, the difference is recognised
directly in the Statement of Comprehensive Income.
When the Group ceases to have control or significant influence,
any retained interest in the entity is remeasured to its fair
value, with the change in carrying amount recognised in profit or
loss. The fair value is the initial carrying amount for the
purposes of subsequently accounting for the retained interest as an
associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the Group had
directly disposed of the related assets or liabilities. This may
mean the amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
FUNCTIONAL CURRENCY
Items included in the financial statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates ('the functional
currency'). The consolidated financial statements are presented in
Pounds Sterling (GBP), which is the Company's functional and the
Group's presentation currency.
OPERATING (LOSS)/PROFIT
Operating (loss)/profit is stated before interest and tax.
DEFINED CONTRIBUTION PENSION PLAN
The Group operates a defined contribution plan for its
employees. A defined contribution plan is a pension plan under
which the Group pays fixed contributions into a separate entity.
Once the contributions have been paid the Group has no further
payments obligations.
The contributions are recognised as an expense in the Statement
of Comprehensive Income when they fall due. Amounts not paid are
shown in accruals as a liability in the Statement of Financial
Position. The assets of the plan are held separately from the Group
in independently administered funds
FINANCIAL INSTRUMENTS
The Company recognises financial instruments when it becomes a
party to the contractual arrangements of the instrument. Financial
instruments are de-recognised when they are discharged or when the
contractual term expire. The Company's accounting policies in
respect of financial instruments transactions are explained
below:
Financial assets and financial liabilities are initially
measured at fair value.
Financial assets:
All recognised financial assets are subsequently measured in
their entirety at either fair value or amortised cost, depending on
the classification of the financial assets.
Fair value through profit or loss
All of the Company's financial assets other than those which
meet the criteria to be measured at amortised cost are subsequently
measured at fair value at the end of each reporting period, with
any fair value gains or losses being recognised in profit or loss
to the extent they are not part of a designated hedging
relationship. The net gain or loss recognised in profit or loss
includes any dividend or interest earned on the financial
asset.
Debt instruments at amortised cost
Debt instruments are subsequently measured at amortised cost
where they are financial assets held within a business model whose
objective is to hold financial assets in order to collect
contractual cash flows and selling the financial assets, and the
contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. Amortised cost is
calculated using the effective interest method and represents the
amount measured at initial recognition less repayments of principal
plus the cumulative amortisation using the effective interest
method of any difference between the initial amount and the
maturity amount, adjusted for any loss allowance.
Impairment of financial assets
The Company recognises a loss allowance for expected credit
losses (ECL) on investments in debt instruments that are measured
at amortised cost or FVTOCI, lease receivables, amounts due from
customers under construction contracts, as well as on loan
commitments and financial guarantee contracts. No impairment loss
is recognised for investments in equity instruments. The amount of
expected credit losses is updated at each reporting date to reflect
changes in credit risk since initial recognition of the respective
financial instrument.
The Company recognises lifetime ECL on all financial instruments
where there has been a significant increase in credit risk since
initial recognition. The assessment of whether lifetime ECL should
be recognised is based on significant increase in the likelihood or
risk of a default occurring since initial recognition instead of on
evidence of a financial asset being credit-impaired at the
reporting date or an actual default occurring.
Lifetime ECL represents the expected credit losses that will
result from all possible default events over the expected life of a
financial instrument. In contract, 12 month ECL represents the
portion of lifetime ECL that is expected to result from default
events on a financial instrument that are possible within 12 months
after the reporting date.
In assessing whether the credit risk on a financial instrument
has increased, the following shall be taken into account:
- Actual or expected significant deterioration in the financial
instrument's external or internal credit rating; or
- Significant deterioration in external market conditions;
or
- Existing or forecast adverse changes in business, financial or
economic conditions that will impact the
debtor's ability to meet debt obligations; or
- Actual or expected deterioration in the operating results of
the debtor; or
- Actual or expected significant adverse changes in the
regulatory or technological environment of the debtor that will
impact the debtor's ability to meet debt obligations.
For certain categories of financial asset, such as trade
receivables, assets that are assessed not to be impaired
individually are subsequently assessed for impairment on a
collective basis. Objective evidence of impairment for a portfolio
of receivables could include the Company's past experience of
collecting payments, an increase in the number of delayed payments
in the portfolio past the average credit period of 30 days, as well
as observable changes in the national or local economic conditions
that correlate with default on receivables.
Financial liabilities:
Fair value through profit or loss
Financial liabilities are classified as at fair value through
profit or loss, when the financial liability is held for trading,
or is designated as at fair value through profit or loss. This
designation may be made if such designation estimates or
significantly reduces a measurement or recognition inconsistency
that would otherwise arise, or the financial liability forms part
of a group of financial instruments which is managed and its
performance is evaluated on a fair value basis, or the financial
liability forms part of a contract containing one or more embedded
derivatives, and IFRS 9 permits the entire combined contract to be
designated as at fair value through profit or loss. Any gains or
losses arising on changes in fair value are recognised in profit or
loss to the extent that they are not part of a designated hedging
relationship.
At amortised cost
Financial liabilities which are neither contingent consideration
of an acquirer in a business combination, held for trading, nor
designated as at fair value through profit or loss are subsequently
measured at amortised cost using the effective interest method.
This is a method of calculating the amortised cost of a financial
liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly
discounts estimated future cash payments through the expected life
of the financial liability, or where appropriate a shorter period,
to the amortised cost of a financial liability.
Derecognition of financial liabilities
The company derecognises financial liabilities when, and only
when, the company's obligations are discharged, cancelled or they
expire.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and deposits
held at call with banks.
INVENTORIES
Inventories consist of properties under construction and are
stated at the lower of cost and net realisable value. Cost
comprises direct materials and, where applicable, direct labour
costs and those overheads that have been incurred in bringing the
inventories to their present location and condition. Interest on
sums borrowed that finance specific projects is added to cost. Net
realisable value represents the estimated selling price less all
estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
TANGIBLE FIXED ASSETS AND DEPRECIATION
Tangible fixed assets are stated at cost, net of depreciation
and any provision for impairment. Depreciation is calculated to
write down the cost less estimated residual value of all tangible
fixed assets using the reducing balance method over their expected
useful economic lives. The rates generally applicable are:
Fixtures, fittings and equipment - 25% on reducing balance
TRADE AND OTHER RECEIVABLES
Trade and other receivables are initially measured at fair value
and are subsequently reassessed at the end of each accounting year.
The Group establishes an allowance for impairment that represents
its estimate of incurred losses in respect of the trade and other
receivables as appropriate. Impairment is estimated by management
based on prior experience and the current economic environment.
FINANCIAL LIABILITIES AND EQUITY
Financial liabilities and equity instruments issued by the Group
are classified according to the substance of the contractual
arrangements entered into and the definitions of a financial
liability and an equity instrument. An equity instrument is any
contract that evidences a residual interest in the assets of the
Group after deducting all of its liabilities. The accounting
policies adopted for specific financial liabilities and equity
instruments are set out below.
TRADE PAYABLES
Trade payables are initially measured at fair value and are
subsequently measured at amortised cost, using the effective
interest rate method.
BORROWING COSTS
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets
that take a substantial period of time to be completed for sale,
are added to the cost of property held as stock at the year end.
All other borrowing costs are recognised in the statement of
comprehensive income in the year in which they relate.
EQUITY INSTRUMENTS
Equity instruments issued by the company are recorded at the
proceeds received, net of direct issue costs. Shares issued are
held at their fair value.
CURRENT AND DEFERRED TAXATION
Current tax assets and liabilities for the current and prior
years are measured at the amount expected to be recovered from or
paid to the tax authorities. The tax rates and the tax laws used to
compute the amount are those that are enacted or substantively
enacted, by the reporting date.
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting
profit.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the year when the liability is settled or the asset is
realised. Deferred tax is charged or credited in profit or loss,
except when it relates to items charged or credited directly to
other comprehensive income, in which case the deferred tax is also
dealt with in other comprehensive income.
SHARE CAPITAL
Ordinary share capital is classified as equity. Interim ordinary
dividends are recognised when paid and final ordinary dividends are
recognised as a liability in the year in which they are
approved.
PROVISIONS
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event and
it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Where the
Group expects some or all of a provision to be reimbursed, the
reimbursement is recognised as a separate asset but only when the
reimbursement is virtually certain. The expense relating to any
provision is presented in the income statement net of any
reimbursement. If the effect of the time value of money is
material, provisions are discounted using a current pre-tax rate
that reflects, where appropriate, the risks specific to the
liability. Where discounting is used, the increase in the provision
due to the passage of time is recognised as a borrowing cost.
COMMITMENTS AND CONTINGENCIES
Commitments and contingent liabilities are disclosed in the
financial statements. They are disclosed unless the possibility of
an outflow of resources embodying economic benefits is remote. A
contingent asset is not recognised in the financial statements but
disclosed when an inflow of economic benefits is virtually
certain.
SUBSEQUENT EVENTS
Events subsequent to the year end that provide additional
information about the Group's position at the reporting date and
are adjusting events are reflected in the financial statements.
Events subsequent to the year end that are not adjusting events are
disclosed in the notes when material.
Since the year end TR+ entered into a guarantee agreement for
GBP 360,000 for funds supplied by Mr C Johnson being a deposit
forfeited by Randell House Ltd, a subsidiary of TR+. This is
related to the acquisition of an assisted living site in Camberley
Surrey, where the acquisition was not completed.
The Group has raised an additional GBP 250,000 less costs by
issuing a further 62,500,000 Ordinary 0.1p shares by way of a share
issue made on 31(st) May, 2019.
Mr C Johnson and Mr A D Johnson both resigned as Directors in
this Group on 27(th) May, 2019 but both remain officers and
shareholders within the associated companies as named in Note 7
pages 41 to these accounts.
CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND
UNCERTAINTY
The preparation of financial statements in conformity with IFRS
as adopted by the EU requires the use of certain critical
accounting estimates. It also requires management to exercise its
judgment in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgment or
complexity, or areas where assumptions and estimates are
significant to the Group financial statements are disclosed
below.
Estimates and judgments are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
present circumstances.
Valuation of Inventory
The Group assesses the net realisable value of inventories under
development and completed properties held for sale according to
their recoverable amounts based on the realisability of these
properties, taking into account estimated costs to completion based
on past experience and committed contracts and estimated net sales
based on prevailing market conditions. Provision is made when
events or changes in circumstances indicate that the carrying
amounts may not be realised. The carrying value is reduced by its
selling price less costs to complete and sell. This impairment loss
is recognized immediately in the Statement of Comprehensive Income.
The assessment requires the use of judgment and estimates. The
carrying amount of inventory is disclosed in note 11 to the
financial statements.
Recognition of deferred tax assets
The recognition of deferred tax assets is based upon whether it
is more likely than not that sufficient and suitable taxable
profits will be available in the future against which the reversal
of temporary differences can be deducted. To determine the future
taxable profits, reference is made to the latest available profit
forecasts. Where the temporary differences are related to losses,
relevant tax law is considered to determine the availability of the
losses to offset against the future taxable profits.
Impairment of non financial assets
At each statement of financial position date the company reviews
the carrying amounts of its tangible and intangible assets with
finite lives to determine whether there is an indication that those
assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any).
If the recoverable amount of an asset is estimated to be less
than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. Impairment losses are recognised
as an expense immediately, unless the relevant asset is land or
buildings at a revalued amount, in which case the impairment loss
is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset in prior years. A
reversal of an impairment loss is recognised as income immediately,
unless the relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a
revaluation increase.
Trafalgar Property Group Plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2019
1 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 property development.
All the Group's non-current assets are located in the UK.
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.
Revenue
An analysis of revenue is as follows:
The Group's revenue, which is all attributable to their
principal activity, can be split as follows:
2019 2018
GBP GBP
Development sales
2,123,500 906,484
Rental income 4,689 8,200
2,128,189 914,684
Timing of revenues are as follows:
2019 2018
GBP GBP
Goods transferred at a point in time
2,123,500 906,484
Services transferred over time
4,689 8,200
2,128,189 914,684
Revenues analysed by geographic location are as follows:
2019 2018
GBP GBP
United Kingdom
2,128,189 914,684
2 OTHER INTEREST RECEIVABLE AND SIMILAR INCOME
2019 2018
GBP GBP
Rental income & ground rent 4,689 8,200
4,689 8,200
====== ======
3 LOSS FOR THE YEAR
Operating loss is stated after charging / (crediting) the
following:
2019 2018
GBP GBP
Subcontractor costs and cost of inventories recognised as an
expense
2,063,709 556,291
Interest charges
328,651 324,555
2,392,360 880,846
Depreciation of property, plant and equipment
740 447
Auditor's remuneration - audit services
10,000 10,000
Auditor's remuneration - taxation services
6,000 7,000
16,000 17,000
Operating expenses by nature:
Subcontractors costs, interest and consumables 2,392,360 880,846
Employee expenses 169,054 168,774
Depreciation 740 447
Other expenses 1,862,457 289,520
4,424,611 1,339,587
========= =========
4 EMPLOYEES AND DIRECTORS' REMUNERATION
Staff costs during the year were as follows:
2019 2018
GBP GBP
Directors' remuneration 75,000 75,000
Wages and salaries 63,000 63,000
Social security costs 11,394 11,945
Other pension costs 19,660 18,830
169,054 168,774
======= =======
The average number of employees of the company during the year
was:
2019 2018
Number Number
Directors and management 6 4
====== ======
Key management are the Group's Directors. Remuneration in
respect of key management was as follows:
2019 2018
GBP GBP
Short-term employee benefits:
- Emoluments for qualifying services C C Johnson - -
- Emoluments for qualifying services A Johnson 65,617 65,574
- Emoluments for qualifying services J Dubois 15,907 15,943
81,524 81,517
====== ======
There are retirement benefits accruing to Mr C C Johnson for
whom a company contribution was paid during the year of GBP18,000
(2018: GBP18,000) and Mr A Johnson GBP 1,200 (2018: GBP600).
Consultancy fees of GBP 4,994 (2018: GBP4,994) were paid to Mr N
Lott during the year.
5 INTEREST PAYABLE AND SIMILAR CHARGES
During the year the interest paid on borrowings relating to
ongoing developments was capitalised as part of inventory GBP
183,217 (2018: GBP324,555) with the interest on properties sold in
the year forming part of cost of sales and transferred to profit
& loss accordingly.
For sites where the construction had been completed, the
interest paid of GBP 145,434 (2018: GBP18,727) has been accounted
for in the profit & loss within cost of sales together with an
impairment provision of GBP 126,661 (2018: Nil) on account of the
reduction of likely selling prices being achieved since the year
end.
6 TAXATION
2019 2018
GBP GBP
Current tax - -
Tax charge - -
==== ====
2019 2018
GBP GBP
(Loss)/profit on ordinary activities before
tax (2,296,422) (424,903)
Based on (loss) for the year:
Tax at 19% (2018: 19%) (436,320) (80,732)
Unrelieved tax losses 138,799 80,732
Impairment 296,271 -
Disallowable expenses 1,250 -
Tax charge for the year - -
=========== =========
Deferred tax
The deferred tax liability recognised in 2018 of GBP 291,045 to
reflect timing differences on the future tax liability arising as a
result of the uplift in the fair value of the options acquired as
part of the Trafalgar Retirement + acquisition has been reversed
due to the impairment review performed by management (note 8, page
42).
No deferred tax asset has been recognised in respect of
historical losses due to the uncertainty in future profits against
which to offset these losses. As at the 31 March 2019, the group
had cumulative tax losses of GBP3,364,609 (2018: GBP2,634,086) that
are available to offset against future taxable profits.
7 (LOSS) PER ORDINARY SHARE
The calculation of (loss)/profit per ordinary share is based on
the following profits/(losses) and number of shares:
2019 2018
GBP GBP
(Loss) for the year (2,296,422) (424,903)
=========== =========
Weighted average number of shares for basic
(loss) per share 425,190,380 425,190,380
=========== ===========
Weighted average number of shares for diluted
(loss) per share 425,190,380 425,190,380
=========== ===========
(LOSS) PER ORDINARY SHARE:
Basic (0.54)p (0.10)p
=========== ===========
Diluted (0.54)p (0.10)p
=========== ===========
8 PROPERTY, PLANT AND EQUIPMENT
Fixtures and fittings 2019 2018
GBP GBP
Cost
At 1 April 6,205 5,467
Additions - 738
At 31 March 6,205 6,205
===== =====
Depreciation
At 1 April 4,126 3,679
Charge for the year 740 447
At 31 March 4,866 4,126
===== =====
Net book value at 31 March 1,339 2,079
----- -----
9 TRADE AND OTHER RECEIVABLES
2019 2018
GBP GBP
Other receivables 75,389 66,192
Other taxes 14,629 24,327
Prepayment 2,074 4,325
92,092 94,844
====== ======
There are no receivables that are past due but not impaired at
the year-end. There are no provisions for irrecoverable debt
included in the balances above.
10 CASH AND CASH EQUIVALENTS
All of the Group's cash and cash equivalents at 31 March 2019
are in sterling and held at floating interest rates.
2019 2018
GBP GBP
Cash and cash equivalents 32,800 458,209
====== =======
The Directors consider that the carrying amount of cash and cash
equivalents approximates to their fair value.
11 INVENTORY
2019 2018
GBP GBP
Work in progress 4,481,230 7,792,611
========= ===============
See note 5 for details of interest capitalised as part of the
value of inventory.
12 TRADE AND OTHER PAYABLES
2019 2018
GBP GBP
Trade payables 21,602 82,145
Accruals 411,990 278,468
PAYE, & other taxes 6,149 6,288
Other payables 2,462 27,354
442,203 394,255
======= =======
13 BORROWINGS
2019 2018
GBP GBP
Directors' loans 2,693,103 3,167,818
Other loans 1,580,000 1,700,000
Bank and other loans (less
than 1 year) 2,502,462 3,108,510
6,775,565 7,976,328
========= =========
Included in Directors' loans is the sum of GBP 300,000 (2018:
GBP300,000) advanced by the DFM Pension Scheme of which Mr J Dubois
is the principal beneficiary. This loan bears interest at 12% per
annum (2018: 12% per annum).
Included in Directors' loans is the sum of GBP nil (2018:
GBP697,161) drawn down from a GBP835,000 loan facility advanced by
Lloyds Bank and which is linked to the Speldhurst development. The
loan was made in the name of A Johnson as the Speldhurst property
is held in his name, and bears interest at 5.2% above base rate per
annum. During the year the loan was repaid.
The remaining balance is disclosed in note 16.
Included in other loans is GBP 980,000 (2018: GBP1,100,000)
advanced by Mr. G Howard (son-in-law of Mr. C C Johnson) to the
company at a rate of 10% per annum (2018: 10% pa). GBP 600,000
(GBP2018: GBP600,000) has been advanced by C Rowe, an employee of
the group, at a rate of 10% per annum.
Lloyds Bank hold a legal charge over land at Wellesley Road,
Sheerness, Kent, together with charges over two term life policies
on two of the Directors. Bridgeco holds a legal charge on the site
known as Saxons, Speldhurst, Kent and Ratesetter holds a legal
charge on the site known as Burnside, Tunbridge Wells, Kent and
Alexander Stables, Hildenborough, Kent.
The bank borrowings are repayable as follows:
2019 2018
GBP GBP
On demand or within one year 2,502,462 3,082,010
In the second year - -
In the third to fifth years
inclusive - -
After five years - -
2,502,462 3,082,010
========= =========
Less amount due for settlement
within 12 months (included
in current liabilities) 2,502,462 3,082,010
Amount due for settlement after
12 months - -
========= =========
The weighted average interest rates paid on the bank loans were
as follows:
Bank loans: - 7.18% (2018: 4.23%)
All of the Directors' loans are repayable after more than 1
year. All loans are interest bearing and charged accordingly.
However Mr C C Johnson has waived his right to interest in the year
and as a result interest of GBP Nil (2018: GBP Nil) was paid to Mr
C C Johnson. The rate of interest on the loan is 5% pa (2018: 5%
pa). Interest of GBP36,000 (2018: GBP36,000) was paid to Mr J
Dubois at the rate of 12% pa (2018: 12% pa).
14 Share capital
Authorised Share Capital
2019 2018
Number Number
Ordinary shares of 0.1p in
issue 425,190,380 238,375,200
Deferred shares of 0.9p in
issue
Sub division 238,375,200 -
Ordinary shares of 0.1p - 238,375,200
Deferred shares of 0.9p - 238,375,200
Additional ordinary shares
issued as part of acquisition - 186,815,180
663,565,580 425,190,380
=========== ===========
Ordinary shares entitle the holder to receive notice of and to
attend or vote at any general meeting of the Company or to receive
dividends or other distributions.
Deferred shares do not entitle the holder to receive notice of
and to attend or vote at any general meeting of the Company or to
receive dividends or other distributions. Upon winding up or
dissolution of the Company the holders of deferred shares shall be
entitled to receive an amount equal to the nominal amount paid up
thereon, but only after holders of Ordinary shares have received
GBP 100,000 per Ordinary Share. Holders of deferred shares are not
entitled to any further rights of participation in the assets of
the Company. The Company has the right to purchase the deferred
shares in issue at any time for no consideration.
Issued, allotted and fully paid
2019 2018
GBP GBP
Ordinary shares 425,190 2,383,752
Deferred shares 2,145,377 -
Issued in year - Ordinary shares
as part of acquisition - 186,815
2,570,567 2,570,567
15 Share PREMIUM ACCOUNT
2019 2018
GBP GBP
Balance brought forward 2,510,462 1,165,463
Premium on issue of new shares - 1,344,999
Share issue costs - -
Balance carried forward 2,510,462 2,510,462
========== ===========
16 RELATED PARTY TRANSACTIONS
Mr C C Johnson holds 43.94% (2018: 43.94%) of the total issued
share capital of the Group as at 31(st) March, 2019
Mr D C Stocks holds 18.89% (2018: 18.89%) of the total issued
share capital of the Group as at 31(st) March, 2019
Mr P Treadaway holds 25.04% (2018: 25.04%) of the total issued
share capital of the Group as at 31(st) March, 2019.
Further details relating to an issue of shares post year end can
be found under accounting policies on page 24.
The following working capital loans have been provided by the
Directors:
2019 2018
GBP GBP
C C Johnson
Opening balances 2,170,657 2,168,802
Loan repayments - -
Personal drawings (73,511) (48,145)
Capital injected 320,000 50,000
Interest payable - -
Balance carried forward 2,417,146 2,170,657
========= =========
J Dubois - 300,000 300,000
D Stocks - (23,935) 26,500
P Treadaway (108) 21,693
Balance carried forward 2,693,103 2,518,850
========= =========
Mr Johnson's Loan bore interest during the year at 5% (2018: 5%
pa), but he has chosen to forego the interest in the year. Mr
Dubois's Loan, which is from his Pension Fund of which he is the
sole beneficiary, was at 12% pa interest (2018: 12% pa). Mr Stocks'
& Mr Treadaway's loans bore no interest.
The development at Speldhurst was acquired in the name of A
Johnson and is held in trust by him on behalf of the Group,
together with a Lloyds Bank loan facility for up to GBP 835,000
connected to this development which has been repaid in the year
(2018: GBP 697,161).
During the year rents were paid of GBP 10,259 (2018; GBP 10,000)
to the Combe Bank Homes Pension Scheme which owns the freehold
offices at Chequers Barn. Mr C C Johnson is a Trustee and
Beneficiary of that Pension Scheme.
17 SHARE OPTIONS AND WARRANTS
There are no share options or warrants.
18 CATEGORIES OF Financial instruments
The only impact of IFRS 9 was in relation to reclassification
and is documented in the tables below:
As at 1 April 2018 IFRS 9 measurement category
Previously Fair value Amortised Fair
reported through cost value
(see note profit or through
below) loss OCI
GBP GBP GBP
IAS 39 measurement category
Loans and receivables
Trade receivables 86,327 - 86,327 -
Cash and cash equivalents (6,740,092) (6,740,092) -
(6,653,765) (6,653,765)
Amortised cost
Trade and other payables (178,675) - (178,675) -
(178,675) (178,675)
As at 31 March 2018 IFRS 9 measurement category
Previously Fair value Amortised Fair
reported through cost value
(see note profit or through
below) loss OCI
GBP GBP GBP
IAS 39 measurement category
Loans and receivables
Trade receivables 66,192 - 66,192 -
Cash and cash equivalents (7,518,119) - (7,518,119) -
(7,451,927) (7,451,927) -
Amortised cost
Trade and other payables (458,209) - (458,209) -
(458,209) - (458,209) -
As at 31 March 2019 IFRS 9 measurement category
Fair value Amortised Fair
through cost value
profit or through
loss OCI
GBP GBP GBP
IAS 39 measurement category
Loans and receivables
Trade receivables -
75,389 -
Cash and cash equivalents - (6,742,765) -
(6,667,376) -
Amortised cost
Trade and other payables - (436,054) -
- (436,054) -
Capital risk management
The Group considers its capital to comprise its share capital
and share premium. The Group's capital management objectives are to
safeguard the entity's ability to continue as a going concern, so
that it can continue to provide returns for shareholders and
benefits for other stakeholders and to provide an adequate return
to shareholders by pricing products and services commensurately
with the level of risk.
Significant Accounting Policies
Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are
recognised, in respect of each class of financial asset, financial
liability and equity instrument are disclosed on pages 18 to 25 to
these financial statements.
Foreign currency risk
The Group has minimal exposure to the differing types of foreign
currency risk. It has no foreign currency denominated monetary
assets or liabilities and does not make sales or purchases from
overseas countries.
Interest rate risk
The Group is sensitive to changes in interest rates principally
on the loans from Lloyds Bank, Rate Setter and Bridgeco where
interest is charged on a variable rate basis.
The impact of a 100 basis point increase in interest rates on
these loans would result in additional interest cost for the year
of GBP 25,025 (2018: GBP37,792).
Credit risk management
Credit risk refers to the risk that a counter-party will default
on its contractual obligations resulting in financial loss to the
Group.
Liquidity risk management
This is the risk of the Group not being able to continue to
operate as a going concern.
The Directors have, after careful consideration of the factors
set out above, concluded that it is appropriate to adopt the going
concern basis for the preparation of the financial statements and
the financial statements do not include any adjustments that would
result if the going concern basis was not appropriate.
Derivative financial instruments
The Group does not currently use derivative financial
instruments as hedging is not considered necessary. Should the
Group identify a requirement for the future use of such financial
instruments, a comprehensive set of policies and systems as
approved by the Directors will be implemented.
Financial liabilities
Carrying Within 1 Over 1
amount GBP year or on Year but
demand GBP less than 5
years GBP
Trade payables 436,054
436,054
Borrowings - Directors' loan 2,693,103 2,693,103
Borrowings - Bank loan 2,502,462 2,502,462
Borrowings - Other loans 1,580,000 1,580,000
Total 7,211,619 2,938,516 4,273,103
Derivative financial instruments
The Group does not currently use derivative financial
instruments as hedging is not considered necessary. Should the
Group identify a requirement for the future use of such financial
instruments, a comprehensive set of policies and systems as
approved by the directors will be implemented.
19 EXCEPTIOnAL ITEM
As disclosed in note 8 page 42, management have performed a
review of the assets of its trading subsidiaries. This assessment
concluded that the land options in Trafalgar Retirement+ should be
written down to zero. Consequently, inventory valued at 31 March
2018 of GBP 1,850,364 less potential deferred tax of GBP 291,045
has been written off in the financial statements.
20 Net debt reconciliation
2019 2018
GBP GBP
Cash at bank
32,800 458,209
Cash and cash equivalents
32,800 458,209
Borrowing repayable within one year (including overdrafts)
(6,775,565) (7,976,328)
Net Debt
(6,742,765) (7,518,119)
Cash and Gross Total cash
liquid borrowings and liquid
investments with a fixed investments
interest rate GBP GBP GBP
Net debt as at 1 April 2018 100,808 (6,840,900) (6,740,092)
Cash flows 357,401 (1,135,428) (778,027)
Net debt as at 31 March 2018 458,209 (7,976,328) (7,518,119)
Cash flows (425,409) 1,200,763 775,354
Net debt as at 31 March 2019 32,800 6,775,565 (6,742,765)
Trafalgar Property Group Plc
COMPANY BALANCE SHEET
For the year ended 31 March 2019
Note 2019 2018
GBP GBP
FIXED ASSETS
Investments 7 - 2,354,732
------------ -----------
- 2,354,732
Current assets
Stocks 5,292 5,292
Debtors 9 278,363 275,996
Cash at bank and in hand 9,561 68,723
------------ -----------
293,216 350,011
Creditors: amounts falling due within one
year 10 995,543 875,726
------------ -----------
Net current liabilities (702,327) (525,715)
Net (liabilities)/assets (702,327) 1,829,017
============ ===========
Capital and reserves
Called up share capital 12 2,570,567 2,570,567
Share premium account 13 2,510,462 2,510,462
Profit and loss account 14 (5,783.356) (3,252,012)
Equity - attributable to the owners of
the Parent 15 (702,327) 1,829,017
============ ===========
The loss for the financial year dealt with in the financial
statements of the Parent Company was GBP 2,531,344 (2018: Loss
GBP1,733,709 ).
The financial statements were approved by the Board of Directors
on 27 September, 2019 and authorised for issue and are signed on
its behalf by:
P Treadaway: .............................................. J Dubois: ...................................................
Company Registration Number: 04340125
The notes on pages 39 to 45 form an integral part of these
financial statements
Trafalgar Property Group Plc
COMPANY STATEMENT OF CHANGES IN EQUITY
31 March 2019
Share capital Share premium Reverse Retained Total equity
acquisition profits
reserve /(losses)
GBP GBP GBP GBP GBP
At 1 April 2017 2,383,752 1,165,463 - (1,518,303) 2,135,800
Loss for the year - - - (1,733,709) (104,888)
Total comprehensive
income for the
year - - - (1,733,709) (104,888)
------------- ------------- ------------ ----------- ------------
Issue of shares 186,815 1,344,999 - - 1,531,814
Share issue costs - - - - -
At 31 March 2018 2,570,567 2,510,462 - (3,252,012) 1,829,017
------------- ------------- ------------ ----------- ------------
At 1 April 2018 2,570,567 2,510,462 - (3,252,012) 1,829,017
Loss for year - - - (2,531,344) (2,531,344)
Total comprehensive
income for the
year - - - (2,531,344) (2,531,344)
------------- ------------- ------------ ----------- ------------
Issue of shares - - - - -
Share issue costs - - - - -
At 31 March 2019 2,570,567 2,510,462 - (5,783,356) (702,327)
------------- ------------- ------------ ----------- ------------
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 0.1p per share and 0.9p per
share deferred (2018: 1p per share). Share premium represents the
excess over nominal value of the fair value consideration received
for equity shares net of expenses of the share issue. Retained
earnings represent the cumulative value of the profits not
distributed to shareholders, but retained to finance the future
capital requirements of the Company.
The notes on pages 39 to 45 form an integral part of these
financial statements.
Trafalgar Property Group Plc
CASHFLOW
for the year ended 31 March 2019
2019 2018
GBP GBP
Cash flow from operating activities
Operating loss (176,612) (1,733,709)
Operating loss before working capital changes (176,612)
(1,733,709)
Impairment of investment - 1,500,606
Decrease/(Increase) in stocks 2,354,732 (5,292)
(Increase)/decrease in impairments (2,354,732) -
(Increase) in debtors (2,367) (19,260)
(Decrease)/Increase in creditors
(66,000) 317,375
Net cash (outflow)/inflow from operating activities
(244,979)
59,720
Income tax paid - -
Net cash (outflow)/inflow from operating activities
(244,979)
59,720
Cashflow from investing activities - -
Net cash (outflow/inflow from investing activities (244,979)
59,720
Cashflow from financing activities
(Repayments)/loans from Group undertakings 85,817 -
Capital injected
- 100,000
Net cash (outflow)/inflow from financing 185,817 -
Net(decrease)/increase in cash and cash equivalents (59,162)
59,720
Cash and cash equivalent at beginning of the year 68,723
9,003
Cash and cash equivalent at end of the year 9,561
68,723
The notes on pages 39 to 45 form an integral part of these
financial statements.
Trafalgar Property Group Plc
NOTES TO THE COMPANY FINANCIAL STATEMENTS
for the year ended 31 March 2019
1. GENERAL INFORMATION
Nature of operations
Trafalgar Property Group Plc ("the Company") is the UK holding
company of a group of companies which are engaged in property
development. The Company is registered in England and Wales. Its
registered office and principal place of business is Chequers Barn,
Bough Beech, Edenbridge, Kent TN8 7PD.
2. BASIS OF PREPARATION
The financial statements have been prepared under the historical
cost convention and in accordance with applicable United Kingdom
law, FRS 102 and accounting standards. The principal accounting
policies are described below. They have all been applied
consistently throughout the year and preceding year.
3. SIGNIFICANT ACCOUNTING POLICIES
(a) GOING CONCERN
The Directors have reviewed forecasts and budgets for the coming
year, which have been drawn up with appropriate regard for the
current economic environment and the particular circumstances in
which the Company operates. These were prepared with reference to
historical and current industry knowledge, taking into account
future strategy of the Company and wider Group.
The existing operations have been generating funds to meet
short-term operating cash requirements. As a result of these
considerations, at the time of approving the financial statements,
the Directors consider that the Company and the Group have
sufficient resources to continue in operational existence for the
foreseeable future. It is appropriate to adopt the going concern
basis in the preparation of the financial statements.
As with all business forecasts, the Directors' statement cannot
guarantee that the going concern basis will remain appropriate
given the inherent uncertainty about the future events.
(b) INVESTMENTS
Investments held as fixed assets are stated at cost less
provision for impairment.
(c) TAXATION
Current tax, including UK corporation tax and foreign tax, is
provided at amounts expected to be paid (or recovered) using the
tax rates and laws that have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the balance sheet date
where transactions or events that result in an obligation to pay
more tax in the future or a right to pay less tax in the future
have occurred at the balance sheet date. Timing differences are
differences between the company's taxable profits and its results
as stated in the financial statements that arise from the inclusion
of gains and losses in tax assessments in years different from
those in which they are recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and
therefore recognised only when, on the basis of all available
evidence, it can be regarded as more likely than not that there
will be suitable taxable profits from which the future reversal of
the underlying timing differences can be deducted.
(d) FINANCIAL INSTRUMENTS
Financial assets and liabilities are recognised in the
statements of financial position when the Company has become a
party to the contractual provisions of the instruments.
The Company's financial assets and liabilities are initially
measured at fair value plus any directly attributable
transaction costs. The carrying value of the Company's financial
assets, primarily cash and bank balances, and liabilities,
primarily the Company's payables and other accrued expenses,
approximate to their fair values.
(i) Financial assets
On initial recognition, financial assets are classified as
either financial assets at fair value through profit or loss,
held-to-maturity investments, loans and receivables financial
assets, or available-for-sale financial assets, as appropriate.
Trade and other receivables
Trade and other receivables (including deposits and prepayments)
that have fixed or determinable payments that are not quoted in an
active market are classified as other receivables, deposits, and
prepayments. Other receivables, deposits, and prepayments are
measured at amortised cost using the effective interest method,
less any impairment loss. Interest income is recognised by applying
the effective interest rate, except for short-term receivables when
the recognition of interest would be immaterial.
(ii) Financial liabilities and equity instruments
Financial liabilities are classified as liabilities or equity in
accordance with the substance of the contractual arrangement.
Financial liabilities
Financial liabilities comprise long-term borrowings, short-term
borrowings, trade and other payables and accruals, measured at
amortised cost using the effective interest method.
The effective interest method is a method of calculating the
amortised cost of a financial liability and of allocating interest
income over the relevant period. The effective interest rate is the
rate that exactly discounts estimated future cash payments
(including all fees on points paid or received that form an
integral part of the effective interest rate, transaction costs and
other premiums or discounts) through the expected life of the
financial liability, or, where appropriate, a shorter period to the
net carrying amount on initial recognition.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all its
liabilities. Equity instruments issued by the Company are
recognised at the proceeds received, net of direct issue costs.
(e) DEBTORS AND CREDITORS
Short term debtors and creditors are measured at transaction
price, less any impairment. Loans receivable are measured initially
at fair value, net of transaction costs, and other financial
liabilities, including bank loans, are all measured subsequently at
amortised cost using the effective interest method, less any
impairment.
4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Company's accounting policies, which
are described in note 3, the Directors are required to make
judgements, estimates and assumptions about the carrying amounts of
assets and liabilities that are not apparent from other sources.
The estimates and assumptions are based on historical experience
and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
The following are the key assumptions concerning the future and
other key sources of estimation uncertainty at the statement of
financial position date that have a significant risk of causing a
significant adjustment to the carrying amounts of assets and
liabilities in the financial statements:
Carrying value of investments in subsidiaries and
intercompany
Management's assessment for impairment of investment in
subsidiaries is based on the estimation of value in use of the
subsidiary by forecasting the expected future cash flows expected
on each development project. The value of the investment in
subsidiaries is based on the subsidiaries being able to realise
their cash flow projections.
Recognition of deferred tax assets
The recognition of deferred tax assets is based upon whether it
is more likely than not that sufficient and suitable taxable
profits will be available in the future against which the reversal
of temporary differences can be deducted. To determine the future
taxable profits, reference is made to the latest available profit
forecasts. Where the temporary differences are related to losses,
relevant tax law is considered to determine the availability of the
losses to offset against the future taxable profits.
5. LOSS FOR FINANCIAL PERIOD
The Company has taken advantage of section 408 of the Companies
Act 2006 and, consequently, a profit and loss account for the
Company alone has not been presented. The Company's loss for the
financial period was GBP2,531,344 (2018: Loss GBP1,733,709). The
Company's loss for the financial year has been arrived at after
charging auditor's remuneration payable to MHA MacIntyre Hudson for
audit services to the Company of GBP10,000 (2018: GBP10,000) and an
impairment adjustment of GBP 2,354,732 - see note 8.
6. EMPLOYEES AND DIRECTORS' REMUNERATION
2019 2018
GBP GBP
Directors' fees 15,000 15,000
Wages and salaries - -
Social security costs 907 943
Management fees 4,994 4,994
20,901 20,937
====== ======
The average number of employees of the company during the year
was:
2019 2018
Number Number
Directors and management 1 1
====== ======
There are no retirement benefits accruing to any of the
Directors.
GBP 4,994 (2018: GBP4,994) was paid to Mr Norman Lott for his
professional services.
Additional directors remuneration of GBP60,000 (2018: GBP60,000)
was paid to a director through subsidiary entities.
7. INVESTMENTS
Subsidiary
undertakings
GBP
At 1 April 2018 2,354,732
Additions -
Impairments (2,354,732)
At 31 March 2019 -
====================
The company owns the following undertakings, all of which are
incorporated in the United Kingdom and have their registered
offices at Chequers Barn, Chequers Hill, Bough Beech, Edenbridge,
Kent, TN8 7PD.
Class of % shareholding Principal activity
share held
Held directly
Ordinary Residential
Trafalgar New Homes Limited shares 100% property developers
Residential
property and
Trafalgar Retirement+ Ordinary assisted living
Ltd shares 100% scheme
Held indirectly through
Trafalgar New Homes Limited
Combe Bank Homes (Oakhurst) Ordinary Residential
Ltd shares 100% property developers
Held indirectly through TR+
Ordinary
Randell House Ltd shares 100% Assisted living developer
Principal activity
Class of % shareholding
share held
Controlled via Deed of Trust
Combe Homes (Borough Green) Ordinary Residential property
Ltd shares 100% developers
8. IMPAIRMENT
The investment carried in the Plc entity financial statements
reflects the entity's control over Trafalgar New Homes Limited,
Combe Bank Homes (Oakhurst) and Combe Bank (Borough Green) Limited
and Trafalgar Retirement + Ltd.
There has been minimal trading in Combe Bank Homes (Oakhurst)
and Combe Bank (Borough Green) Limited and both entities now hold
very little inventory.
Development continues in Trafalgar New Homes Limited and there
have been sales of five properties in the year, however due to the
factors laid out in the Operations review, there has been some
erosion of the margins that had been anticipated at the start of
the year.
Management have performed a review of the assets and liabilities
of the underlying subsidiaries which form the value of the
investment.
In performing this assessment consideration has been given to
anticipated profits on ongoing developments. In addition, the value
of land options in Trafalgar Retirement + have been re-assessed. At
the time of approval of the financial statements there is no
confirmed planning permission on these land options.
Where the 'real' net asset value is in excess of the carrying
value of the investment in the Plc entity statement of financial
position, there is no indication of impairment.
Due to the uncertainties and timing of developments it has been
agreed by management not to include any future anticipated profits
of developments in their assessment. Therefore the net asset value
of the underlying investments does not support the Trafalgar
Property Group's carrying value of investments in Trafalgar New
Homes Limited, Combe Bank Homes (Oakhurst), Combe Bank (Borough
Green) and Trafalgar Retirement +.
Management have concluded that an impairment of the investments
is prudent and that these will be written down to zero.
9. debtors
2019 2018
GBP GBP
Amounts owed by group undertakings 274,304 253,304
Other debtors 1,136 6,137
Other taxes and social security 2,923 16,555
278,363 275,996
======= =======
10. CREDITORS: Amounts falling due within one yeaR
2019 2018
GBP GBP
Trade creditors 2,939 73,159
Taxation and social security 1,323 1,325
Other creditors 30,300 26,078
Director's loan account - cash
injected in year 100,000 -
Amounts owed to group undertakings 860,981 775,164
995,543 875,726
======= =======
11. FINAncial Instruments
2019 2018
GBP GBP
Financial assets
Financial assets measured at amortised cost:
Amounts owed by group undertakings and other
debtors 275,440 259,441
Financial liabilities
Financial liabilities measured
at amortised cost 994,220 874,401
Financial liabilities include, trade creditors, other creditors
and amounts due to group undertakings.
12. Share capital
Authorised Share Capital
2019 2018
Number Number
Ordinary shares of 0.1p in
issue 425,190,380 238,375,200
Deferred shares of 0.9p in
issue
Sub division 238,375,200 -
Ordinary Shares of 0.1p - 238,375,200
Deferred shares of 0.9p - 238,375,200
Additional shares issued as
part of acquisition - 186,815,180
663,565,580 425,190,380
=========== ===========
Deferred shares do not entitle the holder to receive notice of
and to attend or vote at any general meeting of the Company or to
receive dividends or other distributions. Upon winding up or
dissolution of the Company the holders of deferred shares shall be
entitled to receive an amount equal to the nominal amount paid up
thereon, but only after holders of Ordinary shares have received
GBP 100,000 per Ordinary Share. Holders of deferred shares are not
entitled to any further rights of participation in the assets of
the Company. The company has the right to purchase the deferred
Shares in issue at any time for no consideration.
Issued, allotted and fully paid
2019 2018
GBP GBP
Ordinary shares 425,190 2,383,752
Deferred shares 2,145,377 -
Issued in year - Ordinary shares as part of
acquisition - 186,815
========= =========
2,570,567 2,570,567
========= =========
13. Share PREMIUM ACCOUNT
2019 2018
GBP GBP
Balance brought forward 2,510,462 1,165,463
Premium on issue of new shares - 1,344,999
Balance carried forward 2,510,462 2,510,462
========= =========
14. profit and loss account
2019 2018
GBP GBP
Balance brought forward (3,252,012) (1,518,303)
Loss for financial year (2,531,344) (1,733,709)
Balance carried forward (5,783,356) (3,252,012)
============ ===========
15. Reconciliation of movements in shareholders' fUNDS
2019 2018
GBP GBP
Loss for the financial year (2,531,344) (1,733,709)
Net decrease in shareholders'
funds (2,531,344) (1,733,709)
Issue of new shares - 1,531,814
Opening Shareholders' funds 1,829,017 2,030,912
Closing Shareholders' funds (702,327) 1,829,017
=========== ===========
16. INTERCOMPANY
The company has taken advantage of the exemption conferred by
FRS102 Section 33 "Related Party disclosures" not to disclose
transactions undertaken with other wholly owned members of the
group.
Trafalgar Property Group Plc
EXPLANATION OF RESOLUTIONS AT THE ANNUAL GENERAL MEETING
Explanation of resolutions at the Annual General Meeting
Information relating to resolutions to be proposed at the Annual
General Meeting is set out below. The notice of AGM is set out on
page 47.
Ordinary business at the AGM
In addition to the re-election of a Director (resolution 4) and
renewal of authorities to allot shares (resolutions 5 and 6), the
following ordinary business resolutions will be proposed at the
AGM:
(a) Resolution 1: to approve the annual report and accounts. The
Directors are required to lay before the Company at the AGM the
accounts of the Company for the financial year ended 31 March 2019,
the report of the Directors and the report of the Company's
auditors on those accounts.
(b) Resolution 2: to approve the re-appointment of MHA MacIntyre
Hudson as auditors of the Company. The Company is required to
appoint auditors at each general meeting at which accounts are
laid, to hold office until the next such meeting.
(c) Resolution 3: to approve the remuneration of the auditors for the next year.
Re-election of Directors
Under the Articles of Association, Directors must retire and
submit themselves for re-election at the annual general meeting if
they have not done so at either of the two previous annual general
meetings. Following the board changes since the last annual general
meeting, no Directors need to retire by rotation at this year's
annual general meeting.
Directors appointed since the previous annual general meeting
are required to be re-appointed at the next annual general meeting.
By resolution 4, Paul Treadaway is submitted for
re-appointment.
Grant of authorities to allot shares
The Company currently has an issued ordinary share capital of
GBP425,690.38 divided into 487,690,380 Ordinary Shares of 0.1p. The
Company has outstanding warrants to subscribe for 4,567,504
Ordinary Shares at 2p per share. Following the share
re-organisation in March 2018, the Company also has 238,375,190
deferred shares of 0.9p in issue (GBP2,145,376.71 in nominal
amount).
The Board proposes to renew the current authorities to allot
shares, which expire at the next AGM. Accordingly, resolutions 5
and 6 are being proposed at the AGM for the purpose of (i) granting
the Directors general authority to allot up to GBP244,000 in
nominal amount (equivalent to 24,000,000 ordinary shares) and (ii)
disapplying pre-emption rights in connection with the allotment of
up to GBP97,500 in nominal amount (equivalent to 97,500,000
ordinary shares). Both authorities will provide residual
authorities equivalent to approximately 50% of the current issued
ordinary share capital generally and 20% of the current issued
ordinary share capital for issues for cash.
TRAFALGAR PROPERTY GROUP PLC
(Registered in England No. 04340125)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the 2019 Annual General Meeting of
the Company will be held at the Company's offices at Chequers Barn,
Bough Beech, Edenbridge, Kent TN8 7PD at 11.00 am on 25th October
2019, for the following purposes:
RESOLUTIONS
To consider and, if thought fit, to pass resolutions 1 to 7
(inclusive) as ordinary resolutions:
1 To receive and adopt the directors' report, the auditor's
report and the Company's accounts for the year ended 31 March
2019.
2 To re-appoint MHA MacIntyre Hudson as auditor in accordance
with section 489 of the Companies Act 2006, to hold office until
the conclusion of the Annual General Meeting of the Company in
2020.
3 To authorise the Directors to determine the remuneration of the auditor.
4 To re-appoint Paul Treadaway as a Director of the Company.
As special business, to consider and, if thought fit, to pass
resolution 5 as an ordinary resolution and resolution 6 as a
special resolution:
5 THAT the directors be authorised generally and unconditionally
pursuant to Section 551 of the Companies Act 2006 as amended ("2006
Act") (in substitution for all other existing authorities to allot
securities generally to the extent not utilised at the date this
resolution is passed) to exercise all the powers of the Company to
allot shares and/or rights to subscribe for or to convert any
security into shares, provided that the authority conferred by this
resolution shall be limited to the allotment of shares and/or
rights to subscribe or convert any security into shares of the
Company up to an aggregate nominal amount of GBP244,000 such
authority (unless previously revoked, varied or renewed) to expire
on the conclusion of the Annual General Meeting of the Company to
be held in 2020 or, if earlier, 15 months after the date on which
this resolution has been passed, provided that the Company may,
before such expiry, make an offer, agreement or other arrangement
which would or might require shares and/or rights to subscribe for
or to convert any security into shares to be allotted after such
expiry and the directors may allot such shares and/or rights to
subscribe for or to convert any security into shares in pursuance
of such offer, agreement or other arrangement as if the authority
conferred hereby had not expired.
6 THAT, subject to resolution 5 above being duly passed, in
substitution for any existing and unexercised authorities, the
directors be and are hereby generally empowered pursuant to Section
570 of the 2006 Act to allot equity securities (within the meaning
of Section 560 of the 2006 Act) for cash pursuant to the authority
conferred by resolution 5 above or by way of sale of treasury
shares as if Section 561 of the 2006 Act or any pre-emption
provisions contained in the Company's articles of association did
not apply to any such allotment, provided that the power conferred
by this resolution shall be limited to
(i) any allotment of equity securities where such securities
have been offered (whether by way of rights issue, open offer or
otherwise) to holders of equity securities in proportion (as nearly
as may be practicable) to their then holdings of such securities,
but subject to the directors having the right to make such
exclusions or other arrangements in connection with such offer as
they deem necessary or expedient to deal with fractional
entitlements or legal or practical problems arising in, or pursuant
to, the laws of any territory or the requirements of any regulatory
body or stock exchange in any territory or otherwise howsoever;
(ii) the allotment (otherwise than pursuant to sub-paragraph (i)
above) of equity securities up to an aggregate nominal value of
GBP97,500.
such authority and power (unless previously revoked, varied or
renewed) to expire on the earlier to occur of 15 months after the
passing of this resolution or the conclusion of the Annual General
Meeting of the Company to be held in 2020, provided that the
Company may prior to such expiry make any offer, agreement or other
arrangement which would or might require equity securities to be
allotted after such expiry and the directors may allot equity
securities pursuant to any such offer, agreement or other
arrangement as if the power hereby conferred had not expired.
Dated: 27 September 2019
Registered Office: By order of the Board
Chequers Barn Nicholas Narraway
Chequers Hill Secretary
Bough Beech
Edenbridge
Kent
TN8 7PD
Notes:
1. As a member of the Company, you are entitled to appoint a
proxy to exercise all or any of your rights to attend, speak and
vote at the Meeting and you should have received a proxy form with
this notice of meeting. You can only appoint a proxy using the
procedures set out in these notes and the notes to the proxy
form.
2. A proxy does not need to be a member of the Company but must
attend the Meeting to represent you. Details of how to appoint the
Chairman of the Meeting or another person as your proxy using the
proxy form are set out in the notes to the proxy form.
3. You may appoint more than one proxy provided each proxy is
appointed to exercise rights attached to different shares. You may
not appoint more than one proxy to exercise rights attached to any
one share. To appoint more than one proxy, you may photocopy the
enclosed proxy form.
4. If you do not give your proxy an indication of how to vote on
any resolution, your proxy will vote or abstain from voting at his
or her discretion. Your proxy will vote (or abstain from voting) as
he or she thinks fit in relation to any other matter which is put
before the Meeting.
5. The notes to the proxy form explain how to direct your proxy
how to vote on each resolution or withhold their vote.
To appoint a proxy using the proxy form, the form must be:
(a) completed and signed;
(b) sent or delivered to the Company's Registrars, Neville
Registrars Limited, Neville House, Steelpark Road, Halesowen B62
8HD; and
(b) received by no later than 11.00 a.m. on 23 October 2019.
Any power of attorney or any other authority under which the
proxy form is signed (or a duly certified copy of such power or
authority) must be included with the proxy form.
6. To change your proxy appointment, simply submit a new proxy
appointment using the methods set out above. Note that the cut-off
time for receipt of proxy appointments (see above) also apply in
relation to amended instructions; any amended proxy appointment
received after the relevant cut-off time will be disregarded.
Where you have appointed a proxy using the hard-copy proxy form
and would like to change the instructions using another hard-copy
proxy form, you may photocopy the enclosed proxy form.
If you submit more than one valid proxy appointment, the
appointment received last before the latest time for the receipt of
proxies will take precedence.
7. In order to revoke a proxy appointment you will need to
inform the Company by sending a signed hard copy notice clearly
stating that you revoke your proxy appointment to Neville
Registrars Limited, Neville House, Steelpark Road, Halesowen, B62
8HD. Any power of attorney or any other authority under which the
revocation notice is signed (or a duly certified copy of such power
or authority) must be included with the revocation notice.
The revocation notice must be received by no later than 11.00
a.m. on 23 October 2019.
If you attempt to revoke your proxy appointment but the
revocation is received after the time specified then, subject to
the paragraph directly below, your proxy appointment will remain
valid.
Appointment of a proxy does not preclude you from attending the
Meeting and voting in person.
8. Pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, only those members registered in the register of
members of the Company as at 6.00 p.m. on 23 October 2019 shall be
entitled to attend and vote at this Meeting in respect of the
number of shares registered in their name at that time. Changes to
entries on the relevant register of securities after such time
shall be disregarded in determining the rights of any person to
attend or vote at this Meeting.
The Annual Results for year ended 31 March 2019 will be
available to download from the Company's website at:
http://www.trafalgarproperty.group/financials.html
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR CKCDNPBKDDCB
(END) Dow Jones Newswires
September 30, 2019 02:01 ET (06:01 GMT)
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