TIDM57OE
RNS Number : 6330N
Endeavour SCH PLC
05 September 2011
ENDEAVOUR SCH PLC
INTERIM MANAGEMENT REPORT
FOR THE 6 MONTH PERIOD ENDED 30 JUNE 2011
Principal Activity
The Company's principal activity is that of Private Finance
Initiative Concessionaire for the South Tees Acute Hospitals Single
Site Project, under the terms of a Concession Agreement dated 16
August 1999 between the Company and South Tees Acute Hospitals
National Health Service Trust ('the Trust').
The Company's Concession Agreement requires it to finance,
design, develop and construct and then maintain and part operate
the enlarged hospital following completion of new facilities and
certain other work. The concession is intended to continue for a
period of 30 years after hospital completion which occurred on 16
July 2003, and the project is now in its operational phase.
Principal risks and uncertainties for the remainder of the
financial year
Availability
Investment in the Project is funded primarily by Index Linked
Secured Guaranteed Bonds ('the Bonds') and subordinated unsecured
loan stock. During the operational phase the principal source of
funds available to meet its liabilities under the Bonds will be
Availability Payments received from the Trust under the Concession
Agreement. Failure to achieve the forecast levels of availability
would result in lower than forecast revenues and this may adversely
affect the company's ability to make payments to Bondholders. There
have been no deductions for unavailability in the periods covered
in these financial statements.
Major Maintenance
The Company is obliged under the Concession Agreement to
undertake major maintenance and plant/equipment replacement so that
it continues to satisfy the standards required. There are a number
of factors which could lead to higher than projected costs, such as
shorter than anticipated life spans or increased inflation on
specific items of plant and equipment or worse than expected
condition of the residual estate. This risk has been mitigated
through contractual arrangements with the subcontractor undertaking
this work, as 25% of the risk of asset failure is shared with the
subcontractor.
Service Performance
The Soft Services and Maintenance Services are monitored against
agreed objective measures. Ultimately, poor performance may result
in the Trust having the right to terminate the Concession
Agreement. There have been no deductions for poor performance in
the periods covered in these financial statements.
Trust Status and Performance
Failure by the Trust to perform its obligations may affect the
Company's ability to meet its liabilities to Bondholders. However
the Trust's obligations under the Concession Agreement are
underwritten by the Secretary of State for Health.
Financial Instruments Risk
The Company does not undertake financial instrument transactions
which are speculative or unrelated to the Company's trading
activities. The Company's funding has been arranged using the
principles of project finance with the terms of the financial
instruments, and the resulting profile of the debt service costs,
tailored to match the expected revenues arising from the Concession
Agreement. Board approval is required for the use of any new
financial instrument, and the Company's ability to do so is
restricted by covenants in its existing funding agreements. Other
disclosures in respect of financial instruments are given in notes
9, 10, 11, 12, 13 and 15 to the Condensed Unaudited Interim
Financial Statements.
ENDEAVOUR SCH PLC
INTERIM MANAGEMENT REPORT
FOR THE 6 MONTH PERIOD ENDED 30 JUNE 2011 (continued)
Operational and financial review
In the opinion of the Directors, the project has achieved a
satisfactory performance in the period under review.
Income for the six month period ended 30 June 2011 of GBP18.76
million (six month period ended 30 June 2010: GBP19.74 million) and
operating profit for the same period of GBP7.98 million (2010:
GBP7.84 million) is in line with expectations. Profit before tax
for the six month period ended 30 June 2011 GBP1.83 million (six
month period ended 30 June 2010: is GBP2.37 million) and is in line
with expectations. The Directors declared and paid no dividend in
the six month period ended 30 June 2011 (2010: GBP2.8 million).
There have been no significant events that have occurred during
the first six months of the financial year that have had a material
impact on the Condensed Unaudited Interim Financial Statements.
On behalf of the Board of Directors
......................................
G A Perez-Luna - 31 August 2011
Company Secretary
ENDEAVOUR SCH PLC
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE
INTERIM MANAGEMENT REPORT
We confirm that to the best of our knowledge:
0 The Condensed Unaudited Interim Financial Statements included
in this Interim Financial Report have been prepared in accordance
with UK Generally Accepted Accounting Practice and give a true and
fair view of the assets, liabilities, financial position and profit
of the Company.
0 Appropriate disclosure under DTR 4.2.7R of the Disclosure and
Transparency Rules has been made in the Interim Management Report
as to any significant events that have occurred during the first
six months of the financial year that have had a material impact on
the Condensed Unaudited Interim Financial Statements.
0 Appropriate disclosure under DTR 4.2.7R of the Disclosure and
Transparency Rules has been made in the Interim Management Report
as to a description of the principal risks and uncertainties for
the remaining six months of the financial year.
On behalf of the Board of Directors
......................................
G A Perez-Luna - 31 August 2011
Company Secretary
The Directors are responsible for preparing the Interim
Management Report and the Condensed Unaudited Interim Financial
Statements in accordance with the applicable Disclosure and
Transparency Rules of the United Kingdom Financial Services
Authority in relation to an Issuer of Debt Securities which are
listed on the London Stock Exchange.
The annual financial statements of the Company are prepared in
accordance with UK Generally Accepted Accounting Practice (UK
GAAP). The financial information contained in the Condensed
Unaudited Interim Financial Statements is pro-forma and does not
constitute full statutory accounts within the meaning of section
435 of the Companies Act 2006. The information has been extracted
from the records of the Company for the six month periods ended 30
June 2011 and 30 June 2010 and for the year ended 31 December 2010.
The information has been prepared using the accounting policies and
basis of preparation set out in Note 1 to the Annual Report and
Accounts 2010.
Cautionary statement regarding forward-looking statements
The Interim Management Report and Condensed Unaudited Interim
Financial Statements (together the " Interim Report") may contain
certain projections and other forward-looking statements with
respect to the financial condition, results of operations and the
business of Endeavour SCH PLC. These statements are based on
current expectations and involve risk and uncertainty because they
relate to events and depend upon circumstances that may occur in
the future. There are a number of factors which could cause actual
results or developments to differ materially from those expressed
or implied by these forward-looking statements. Although Endeavour
SCH PLC currently believes that the assumptions underlying these
forward-looking statements are reasonable, any of the assumptions
could prove inaccurate or incorrect and therefore there can be no
assurance that any results contemplated in the forward-looking
statements will actually be achieved. Nothing contained in this
Interim Report should be construed as a profit forecast or profit
estimate. Investors or other recipients are cautioned not to place
undue reliance on any forward-looking statements contained herein.
Endeavour SCH PLC undertakes no obligation to update or revise
(publicly or otherwise) any forward-looking statement, whether as a
result of new information, future events or other circumstances.
This Interim Report does not constitute an invitation or inducement
to any person to subscribe for, or otherwise acquire, securities
issued by Endeavour SCH PLC.
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END
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