Final Results
01 Julio 2003 - 6:46AM
UK Regulatory
RNS Number:0077N
Southern Vectis PLC
01 July 2003
Southern Vectis plc ("the Company")
Preliminary results for the year ended 30 April 2003
Chairman's statement
Trading results
Profit before tax for the year ended 30 April 2003 was #677,000 (2002:
#1,005,000) on turnover of #16.02 million (2002: #15.77 million).
Earnings per share were 2.5p (2002: 3.5p).
The 33% reduction in profits is reflected by two major external cost factors.
The first of these was the cost of insurance for both our Island and Mainland
operations, which was 33% higher than in 2001/02, and 76% higher than two years
ago.
Secondly, the group operates a final salary pension scheme which has functioned
satisfactorily for fifteen years. As I indicated in my statement this time last
year and again at the half-year, the scheme has become seriously under-funded as
a result of the fall in stock market values, increased longevity and increased
taxation. Following negotiations with the Trades Unions, we have increased the
level of our contributions by 3.8% of salaries per annum.
Your board has sought to mitigate the effect of these factors for future periods
through a mixture of actions designed to control cost and generate further
revenue. These include a new network for our Solent Blue Line operations, and
revisions to the pension scheme, which have reduced benefits accruing for
service from November 2002 onwards.
Dividend
As last year, we are proposing a dividend of 1.55p per share, which is covered a
little over 1.5 times by profit after tax.
Review of operations
Island Buses
The Island bus network has been relatively stable, with the most significant
change being towards the year end when the successful open top services centred
on Yarmouth and Sandown/Shanklin were reorganised and re-branded.
Eight new buses were introduced towards the end of summer 2002 and are used on
the Cowes Pontoon route and the Explorer Round the Island service.
The Isle of Wight Council is progressing its plans for a contra-flow bus lane in
Newport, which will greatly improve the reliability of our bus services and
their appeal to current and potential customers.
Mainland Buses
In addition to increased insurance and pension costs, the performance of Solent
Blue Line has suffered from growing traffic congestion, which has adversely
affected the reliability and performance of the network.
A new network has been designed for the Southampton/Eastleigh/Winchester
corridor, in conjunction with Hampshire County Council using the group's Quality
Network techniques. The Quality Network approach involves the integrated
planning of commercial services, tendered journeys and schools routes, and leads
to a more cost-effective and robust network. The tendered sections of the new
network were won in competition by Solent Blue Line and the whole network was
introduced on Sunday 18 May 2003.
Twelve new Dennis Dart single deck vehicles in a new blue and orange livery were
introduced as part of the new network.
Consultancy
Increasing interest is being shown in the Quality Network concept, with the
third study for Hampshire County Council about to start. Studies are also in
progress in Wales and Essex.
Further afield, the Company has undertaken studies in France, Germany and
Guernsey.
Newport Bus Station
As announced in March this year, the group has entered into an agreement with
Halladale Group plc granting it an option to purchase Newport Bus Station. The
agreement also provides for Southern Vectis, in conjunction with Halladale, to
develop a bus interchange on land which Southern Vectis will retain adjacent to
the bus station. If the option is exercised, the development will lead to the
creation of more modern facilities for buses, passengers and staff as well as
generating a capital receipt, net of our own development costs, of more than #4
million; this compares with the book value of the property of approximately #2.5
million.
The option is unlikely to be exercised prior to the grant of suitable planning
permission for the redevelopment of the bus station site. Thus, if it is
exercised, the proceeds are likely to be received in Southern Vectis' accounting
period ending on 30 April 2005.
Financial resources
Net debt of #5.33 million at 30 April 2003 compares with #4.94 million at 30
April 2002. Gearing is now 210% (2002: 210%). Interest was covered 3.1 times
(2002: 3.8 times) by operating profit. The slight decline in interest cover is
attributable to our lower profitability, but is still at an acceptable level.
People
As ever, I pay tribute to the hard work and dedication of our staff, and thank
them for their contribution to the group's performance.
Outlook
The action we have taken to restructure our mainland bus network and to mitigate
further increases in pension scheme funding, together with the growth in
consultancy work and opportunities, all lead us to expect a modest improvement
in performance in the current year.
Mike Killingley
1 July 2003
Consolidated profit and loss account
for the year ended 30 April 2003
2003 2002
#000 #000
Turnover 16,020 15,768
Other operating income 158 150
---------------- ----------------
16,178 15,918
Operating costs (15,155) (14,530)
---------------- ----------------
Group operating profit 1,023 1,388
Share of operating loss in (25) (25)
associates
---------------- ----------------
Total operating profit: Group and
share of associates 998 1,363
Interest receivable 22 13
Interest payable and similar (343) (371)
charges
---------------- ----------------
Profit on ordinary activities before
taxation 677 1,005
Tax on profit on ordinary (193) (313)
activities
---------------- ----------------
Profit for the financial year 484 692
Dividends (306) (306)
---------------- ----------------
Retained profit for the financial 178 386
year
================ ================
Basic and diluted earnings per 2.5p 3.5p
share
================ ================
In both the current and previous financial years, the Group had no recognised
gains and losses other than those passing through the profit and loss account.
No note of historical cost profits required by Financial Reporting Standard 3
has been presented since reported profits do not materially differ from
historical cost profits.
The results for the current and prior years all relate to continuing operations.
Consolidated balance sheet
at 30 April 2003
2003 2002
#000 #000 #000 #000
Fixed
assets
Tangible 9,226 9,137
assets
Investments - -
Current
assets
Stocks 356 365
Debtors 1,576 1,512
Cash at bank 312 302
and in hand
--------------- -------------
2,244 2,179
Creditors: (4,799) (4,604)
amounts
falling due
within one
year
--------------- -------------
Net current (2,555) (2,425)
liabilities
--------------- --------------
Total assets 6,671 6,712
less current
liabilities
Creditors:
amounts
falling due
after more
Than one (3,892) (4,069)
year
Provisions (245) (287)
for
liabilities
and charges
--------------- --------------
Net assets 2,534 2,356
=============== ==============
Capital and
reserves
Called up 1,975 1,975
share
capital
Revaluation 251 251
reserve
Capital 321 321
reserve
Profit and (13) (191)
loss
account
--------------- --------------
Equity 2,534 2,356
shareholders'
funds
=============== ==============
Consolidated cash flow statement
for the year ended 30 April 2003
2003 2002
#000 #000
Cash inflow from operating 1,653 2,397
activities
Return on investments and servicing of (321) (358)
finance
Taxation (339) (80)
Capital expenditure 35 (165)
Acquisitions and disposals (25) (25)
Equity dividends paid (306) (306)
---------------- ----------------
Cash inflow before financing 697 1,463
Financing (1,220) (1,162)
---------------- ----------------
(Decrease)/increase in cash in the (523) 301
year
================ ================
Notes
1. Basis of accounting
The financial statements have been prepared under the historical cost
convention, modified to include the revaluation of certain freehold land and
buildings. They have been prepared in accordance with applicable accounting
standards.
2. Profit on ordinary activities before taxation
Profit on ordinary activities before taxation is stated after charging/
(crediting):
2003 2002
#000 #000
Depreciation:
Owned assets 424 439
Leased assets 636 523
Auditors' remuneration - audit services:
Group 30 26
Company - -
Other fees paid to the auditors and their
associates:
Group 11 10
Company - -
Profit on disposal of fixed assets (101) (51)
============ ============
3. Earnings per ordinary share
Basic earnings per share for the year ended 30 April 2003 has been
calculated based upon the weighted average number of ordinary shares in
issue for the year of 19,754,309 (2002: 19,754,309) and profit for the
financial year of #484,000 (2002: #692,000). The diluted earnings per share
is identical to the basic earnings per share as there are no share options
or other potential dilutive ordinary shares in issue.
4. Reconciliation of net cash flow to movement in net debt
2003 2002
#000 #000
(Decrease)/increase in cash in the (523) 301
year
Cash outflow from decrease in debt 1,220 1,162
and lease financing
---------------- ----------------
Change in net debt resulting from 697 1,463
cash flows
New finance leases (1,083) (1,099)
---------------- ----------------
Movement in net debt in the year (386) 364
Net debt at beginning of year (4,941) (5,305)
---------------- ----------------
Net debt at end of year (5,327) (4,941)
================ ================
5. Analysis of net debt
At 1 May Cash flow Other non-cash At 30 April
flows
2002 2003
#000 #000 #000 #000
Cash at bank 302 10 - 312
and in
hand
Bank (36) (533) - (569)
overdrafts
---------------- ---------------- --------------- ---------------
266 (523) - (257)
Bank loans (500) 500 (500) (500)
due within
one year
Bank loans (2,250) - 500 (1,750)
due after
one year
Finance (2,457) 720 (1,083) (2,820)
leases
---------------- ---------------- --------------- ---------------
Total (4,941) 697 (1,083) (5,327)
================ ================ =============== ===============
6. Proposed dividends
2003 2002
#000 #000
Proposed ordinary dividend of 1.55p per ordinary 306 306
share (2002:1.55p)
=========== ===========
7. Financial information
The financial information set out above does not constitute statutory
accounts within the meaning of Section 254 of the Companies Act 1985 for
the years ended 30 April 2003 and 2002 but is derived from the Group's
audited accounts which have been approved and signed by the directors.
Statutory accounts for 2002 have been delivered to the Registrar of
Companies, and those for 2003 will be delivered following the Group's
Annual General Meeting. The auditors have reported on those accounts;
their reports were unqualified and did not contain statements under
either Section 237(2) or 237(3) of the Companies Act 1985.
8. Report and Accounts
Copies of the Report and Accounts will be sent to shareholders. Copies
will be available from the Group's Registered Office at Nelson Road,
Newport, Isle of Wight PO30 1RD and from the Company's nominated adviser
Smith & Williamson Corporate Finance Limited at No 1 Riding House
Street, London W1A 3AS.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR NKDKQDBKDDOK
