Annual report and financial statements for the year ended
Strategic Report for the year ended
The directors present their strategic report for the year ended
The Group continues to target projects based in
Our strategic priorities
As a board we are keen to build on this performance and grow the Group into a significant regional house builder. We now have an established and profitable method of operation which could be scaled up should further capital become available to the Group.
We believe the key Group assets are its people, capital base and market listing. Our primary aim is to maximise shareholder value by utilising each of these assets to best effect. We also are committed to the highest standards of sustainability.
People and partnering
We have an intentionally small but experienced team with demonstrable competency in the areas of finance, property development, project appraisal and project delivery. Our strategy is to match those core skills and our capital with partners who can assist with project design, construction and sales. Our people are motivated through a management incentive scheme which aligns their interests with that of the shareholders and only rewards performance after attainment of profit targets linked to the return on shareholders funds.
The Group commenced 2015 with a capital base of just over £3.6m (2014 -£3.2m). We have previously set a performance target to grow that base by a minimum of 5% on opening shareholders funds per annum through organic growth. In 2015 we actually achieved a pre-tax profit of 15.1% (2014-18.1%) on opening shareholders funds.
As previously advised we believe that capital availability remains a constraining factor for the business and we continue to explore new opportunities to raise fresh capital. We remain committed to growth and will consider small corporate acquisitions as our current projects mature.
ISDX Growth Market Listing
While the listing should provide improved trading and liquidity opportunities for our shareholders our share price has historically traded at a significant discount to the Group’s net asset value. The discount to net asset value at the date of this report is circa 22% to the quoted market mid-price. This is significantly less than the historical discount but more than we would like it to be.
We are however making progress and the combined effect of profit growth and a reduced discount to assets was reflected in growth of 68% in the mid-market price of our shares since the
We recognise that there are financial and operational benefits of working sustainably and we are committed to the highest standards of sustainability. While many environmental requirements are embedded within the planning process, sustainability is a broader issue than that and encompasses both Health & Safety and the supply chain.
Health & Safety remains the Group’s first priority and we work with our joint venture partners to attain best practice standards. We are happy to report that there were no reportable incidents on any of our projects during 2015 and we remain committed to the highest standards of Health & Safety.
Having the right supply chain is also crucial to sustainability. We do have long term working relationships with our main suppliers but continue to carefully monitor the financial health of our design teams and main contractors. We aim to pay suppliers in agreed timescales and to work collaboratively with them for the benefit of all.
At present we have live joint venture projects totalling 87 residential units (together with associated commercial space) on sites in Mortlake, St Margarets and
The final sales on the Bulvinos House, Ealing and
The Company entered a joint venture for the development of 26 residential apartments in Mortlake, Richmond in
The Company also invested in a regeneration property development venture at
St Margarets Waterside, Richmond,London:
The Company entered a joint venture for the development of 21 luxury apartments (together with office space) in
As capital and profits are released from the current project portfolio the board will seek out further opportunities with similar risk profiles. The group’s schemes have largely been in the outer London Boroughs and it is intended that the group will continue to focus on this geographic area.
Principal risks and uncertainties
The Company is exposed to the usual risks of companies constructing and developing residential property, including construction budget overruns, delays in programme, insolvency of clients, general economic conditions, uninsured calamities and other factors. The delay in Governments direction on Permitted Development Rights, now thankfully clarified, did have create uncertainty in appraising future site opportunities in 2015.
Investments are made in sterling and therefore the Company is not subject to foreign exchange risks. The Company’s credit risk is primarily attributable to its trade debtors. Credit risk is managed by monitoring payments against contractual agreements. The Company also reviews the financial standings of its debtors prior to entering into significant contracts.
Key Performance Indicators
The Company’s long term performance target has been to generate a minimum average annual return on shareholders funds of 5%. During 2015 the annual pre-tax return on shareholders’ funds was 15.1 % (2014: 18.1%).
The Company also seeks protection from market downturns by committing no more than 50% of its capital to any one project and by requiring projects in which it is a stakeholder to show a minimum return on cost of 15%.
During 2015 the maximum exposure of capital to any one project was less than 40% of the Company capital.
Operations have been financed by the issue of shares in the past and retained profits, the cash from which has been invested in short term cash deposits. In addition, various financial instruments such as trade debtors and trade creditors arise directly from the group's operations. The loan notes have been funded by the cash income from previous development projects. Further information on financial instruments is contained in note 24 of the financial statements.
On behalf of the Board
Report of the directors for the year ended
The directors present their report together with the audited financial statements for the year ended
The principal activity of the Company remained that of a residential contractor and house builder.
Results and dividends
The profit and loss account is set out on page 10 and we are pleased to report a profit before taxation of £548,887 (2014: £579,125) for the year.
An interim ordinary dividend of
The directors do not recommend the payment of a final ordinary share dividend for the year (2014: £Nil).
The following directors of the Company had interests in the ordinary shares of the Company at
Sean Ryan 72,000
Barry Tansey 66,500
During 2014 the Company adopted an incentive / reward system designed to allow the directors of the company to share in the improving profitability of the Company upon achieving a threshold/hurdle return of 5% on opening shareholders funds for the exclusive benefit of the ordinary shareholders. The remuneration committee believe that has acted as an important driver in achieving improved performance for the long term benefit of the Company’s shareholders.
The directors have assessed the Group’s projected business activities and available financial resources together with detailed forecasts for cash flow and relevant security analysis. The directors believe that the company is well placed to manage its business risks successfully.
After making appropriate enquiries the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly the directors continue to adopt the going concern basis in preparing the annual report and financial statements.
In accordance with section 489 of the Companies Act 2006, a resolution proposing that
Statement of disclosure to auditors
Each of the directors in office at the date of approval of this annual report confirms that:
• so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and
• the director has taken all the steps that he / she ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.
On behalf of the Board
Directors’ Responsibilities Statement
The directors are responsible for preparing the Annual 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 United Kingdom Generally Accepted Accounting Practice.
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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company 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.
Independent Auditors’ Report to the Members of
We have audited the consolidated financial statements of
This report is made solely to the 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 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 company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (
Scope of the audit of the financial statements
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 Annual Report to identify material inconsistencies with the audited financial statements and 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 implications for our report.
Opinion on financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the group and company's affairs as at
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
• the financial statements are not in agreement with the accounting records and returns; or
• 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.
for and on behalf of
St Mark Homes Plc Consolidated statement of comprehensive income for the year ended 31 December 2015 2015 2014 £ £ Group turnover 3,097,000 88,750 Cost of sales (2,803,992) (60,900) ________ ________ Gross profit 293,008 27,850 Administrative expenses (416,177) (457,198) ________ ________ Operating profit/(loss) (123,169) (429,348) Share of operating profit of joint venture 485,466 1,029,734 Interest receivable and similar income 226,921 182 Interest payable and similar charges (40,331) (21,443) ________ ________ Profit on ordinary activities before taxation 548,887 579,125 Taxation on ordinary activities (110,428) (41,226) ________ ________ Profit on ordinary activities after taxation 438,459 537,899 Other comprehensive income - - ________ ________ Total comprehensive income 438,459 537,899 ________ ________ Earnings per share – basic and diluted Ordinary shares 14.83p 18.19 p All amounts relate to continuing activities.
St Mark Homes Plc Consolidated Balance sheet at 31 December 2015 2015 2015 2014 2014 £ £ £ £ Non Current assets Tangible assets 1,872 1,952 Investments in joint ventures 379,102 890,625 ________ ________ 380,974 892,577 Current assets Stock and Work In Progress 1,095,084 2,289,806 Debtors 3,761,851 4,143,010 Cash at bank and in hand 146,255 114,273 ________ ________ 5,003,190 6,547,089 Creditors: amounts falling due within one year (1,437,321) (3,798,195) ________ ________ Net current assets 3,565,869 2,748,894 ________ ________ Total assets less current 3,946,843 3,641,471 liabilities ________ ________ Net Assets 3,946,843 3,641,471 ________ ________ Capital and reserves Called up share capital 1,478,748 1,478,748 Capital redemption reserve 1,009,560 1,009,560 Other reserve 211,822 211,822 Profit and loss account 1,246,713 941,341 ________ ________ Shareholders’ funds 3,946,843 3,641,471 ________ ________ The financial statements were approved by the board of directors and authorised for issue on
18th May 2016. S Ryan Director Company Registration No 03822978
St Mark Homes Plc Company Balance sheet at 31 December 2015 2015 2015 2014 2014 as restated as restated £ £ £ £ Non Current assets Tangible assets 1,872 1,952 Investments - 2,796,040 ________ ________ 1,872 2,797,992 Current assets Stock and Work In Progress 1,095,084 2,289,806 Debtors 4,140,953 5,033,635 Cash at bank and in hand 146,255 114,273 ________ ________ 5,382,292 7,437,714 Creditors: amounts falling due within one year (1,437,321) (6,594,235) ________ ________ Net current assets 3,944,971 843,479 ________ ________ Total assets less current 3,946,843 3,641,471 liabilities Creditors: amounts falling due in more than one year - - ________ ________ Net assets 3,946,843 3,641,471 ________ ________ Capital and reserves Called up share capital 1,478,748 1,478,748 Capital redemption reserve 1,009,560 1,009,560 Other reserve 211,822 211,822 Profit and loss account 1,246,713 941,341 ________ ________ Shareholders’ funds 3,946,843 3,641,471 ________ ________ The financial statements were approved by the board of directors and authorised for issue on
18th May 2016. Sean RyanDirector Company Registration No 03822978
St Mark Homes Plc Statement of changes in equity For the year ended 31 December 2015 Share Capital Capital Other Profit and loss Total Redemption reserves Reserve Reserve £ £ £ £ £ Period ended 31 1,478,748 1,009,560 211,822 941,341 3,641,471 December 2014 Profit for the - - - 438,459 438,459 year ________ ________ ________ ________ ________ Total 1,478,748 1,009,560 211,822 1,379,800 4,079,930 comprehensive income for the year Dividend - - - (133,087) (133,087) ________ ________ ________ _________ _________ Balance at 31 1,478,748 1,009,560 211,822 1,246,713 3,946,843 December 2015 ________ ________ ________ ________ ________ Share Capital Capital Other Profit and loss Total Redemption reserves Reserve Reserve £ £ £ £ £ Period ended 31 1,478,748 1,009,560 211,822 497,065 3,197,195 December 2013 Profit for the - - - 537,899 537,899 year ________ ________ ________ ________ ________ Total 1,478,748 1,009,560 211,822 1,034,964 3,735,094 comprehensive income for the year Dividend - - - (93,623) (93,623) ________ ________ ________ _________ _________ Balance at 31 1,478,748 1,009,560 211,822 941,341 3,641,471 December 2014 ________ ________ ________ ________ ________
St Mark Homes Plc Consolidated statement of cashflows for the year ended 31 December 2015 2015 2015 2014 2014 £ £ £ £ Cash flows from operating activities Cash generated from operations 3,405,016 (2,954,966) Interest paid (40,331) (21,443) Corporation Tax (41,989) (4,323) ________ ________ Net cash inflow/(outflow) from operating activities 3,322,696 (2,980,732) Investing activities Purchase of tangible fixed assets (541) (859) Interest received 226,921 182 ________ ________ Net cash generated from/(used in) investing activities 226,380 (677) Financing activities (Decrease)/Increase in bank loans (1,212,830) 310,449 (Decrease)/ Increase in (2,171,177) 1,816,180 subordinated loans Dividend paid (133,087) (97,623) ________ ________ Net cash generated from/(used) in financing activities (3,517,094) 2,029,006 ________ ________ Net increase in cash and cash 31,982 (952,403) equivalents Cash and cash equivalents at 114,273 1,066,676 beginning of year ________ ________ Cash and cash equivalents at end 146,255 114,273 of year ________ ________ Relating to: Cash at Bank and in hand 146,255 114,273 ________ ________