Playgolf (Holdings) PLC
22 June 2006
PLAYGOLF (HOLDINGS) PLC
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005
The board is pleased to report the results for Playgolf (Holdings) plc
('Playgolf' or the 'Group' or the 'Company') for the financial year ending 31st
December 2005. 2005 can best be described as a significant year for Playgolf.
Our flagship venture at Northwick Park was opened in November, slightly later
than planned, to critical acclaim. The building and concept has generated
considerable interest from other Metropolitan boroughs. Playgolf has also
received full planning permission for a substantial new venture in East
Kilbride.
Turnover was up marginally to £2.391 million with a loss after taxation of
£980,000. Earnings per share were (1.8p) (2004: (1.4p)). The net assets of
Playgolf increased from £6,689,000 at 31 December 2004 to £11,665,000 at 31
December 2005 (74%) which is equivalent to a share price of 22p.
Trading Position
The late opening of Northwick Park missed late summer trade and this had a knock
on effect on the operating performance of the Group. The remaining facilities in
the Group had a mixed year with Heaton Park performing above expectations,
Trafford in line, and Metro below, the last primarily due to operating
difficulties which have since been resolved. The Company also established a
joint venture with Mix Bars Limited to develop and operate the restaurant at
Northwick Park, trading as Amano. The Company owns 90% of the joint venture. As
reported at the time of the flotation of the Company's future profitability will
be driven by Northwick Park, and new developments. The Group is consequently
reporting an operating loss for the year.
The start of 2006 has been difficult, due mainly to unfavourable weather.
Northwick Park is on an upward curve with the driving range, baseball, adventure
golf and restaurant all performing well. The gym will open in July and recent
improvement in the weather is attracting more people to the golf course. We have
some planning issues with Brent Council but are confident that these will be
resolved satisfactorily. Metro is recovering and Trafford is performing
steadily. We have sold our management contract to run the Heaton Park golf
courses in Manchester. We are finalising plans for East Kilbride and are looking
to commence construction in the next few months. We are in discussions with our
bankers concerning appropriate development finance for future projects and we
will review all of our existing finance.
We do not expect Playgolf to be profitable in 2006 although we anticipate being
able to continue to grow the Group's net assets. We are currently streamlining
our existing operations, and expect to be able to report an improvement in the
profitability of the mature facilities as a result. East Kilbride shows the
evolution of the Group into multi sport development and will allow the Group to
generate capital receipts through development profits as well as operational
income.
We are a pioneering business and as a result it is not always possible to
accurately predict how things will go. However, the opportunities for Playgolf
are significant and both Northwick Park and East Kilbride have stimulated
interest from other Local Authorities seeking to provide high quality sports
infrastructure. The political climate has never been more positive for the field
that we are in and the number of potential partners wishing to participate in
Playgolf developments continues to expand. We would like to thank all our
employees for all their hard work during the course of the year.
David Piggins
Chief Executive
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2005
2005 2004
Notes £'000 £'000
TURNOVER 1
- continuing operations 2,391 1,444
- acquisitions - 914
--------------- ---------------
2,391 2,358
Cost of sales
- continuing operations (1,180) (515)
- acquisitions - (350)
--------------- ---------------
(1,180) (865)
GROSS PROFIT
- continuing operations 1,211 929
- acquisitions - 564
--------------- ---------------
1211 1,493
Administrative expenses
- continuing operations (1,915) (1,464)
- acquisitions - (461)
--------------- ---------------
(1,915) (1,925)
OPERATING LOSS
- continuing operations (704) (535)
- acquisitions - 103
--------------- ---------------
2 (704) (432)
Net interest payable 3 (276) (205)
Profit on disposal of investments - 118
--------------- ---------------
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION (980) (519)
Tax on loss on ordinary activities 6 - 16
--------------- ---------------
LOSS ON ORDINARY ACTIVITIES
AFTER TAXATION (980) (503)
Equity minority interests - 1
--------------- ---------------
RETAINED LOSS FOR THE YEAR 17 (980) (502)
=============== ===============
Earnings per share
Basic 8 (1.8)p (1.4)p
=============== ===============
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31 DECEMBER 2005
Note 2005 2004
£'000 £'000
LOSS FOR THE FINANCIAL YEAR (980) (502)
Unrealised surplus on revaluation of
leasehold properties 17 5,087 -
----------- -----------
Total recognised gains and losses relating
to the year 4,107 (502)
=========== ===========
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2005
2005 2004
Note £'000 £'000
FIXED ASSETS
Intangible assets 9 - 6
Tangible assets 10 21,661 10,430
--------------- ---------------
21,661 10,436
CURRENT ASSETS
Stock 12 46 41
Debtors 13 640 233
Cash at bank and in hand 470 1,284
--------------- ---------------
1,156 1,558
CREDITORS: amounts falling due
within one year 14 (1,113) (625)
--------------- ---------------
NET CURRENT ASSETS 43 933
--------------- ---------------
TOTAL ASSETS LESS CURRENT
LIABILITIES 21,704 11,369
CREDITORS: amounts falling due
after one year 15 (10,039) (4,680)
-------------- --------------
NET ASSETS 11,665 6,689
============== ==============
CAPITAL AND RESERVES
Called up share capital 16 106 96
Share premium account 17 2,475 1,616
Revaluation reserve 17 9,753 4,847
Merger reserve 17 467 467
Other reserves 17 400 400
Profit and loss account 17 (1,536) (737)
-------------- --------------
EQUITY SHAREHOLDERS' FUNDS 18 11,665 6,689
============== ==============
COMPANY BALANCE SHEET
AT 31 DECEMBER 2005
2005 2004
Note £'000 £'000
FIXED ASSETS
Tangible assets 10 6 4
Investments 11 20 19
-------------- ---------------
26 23
CURRENT ASSETS
Debtors 13 1,814 504
Cash at bank and in hand 324 1,173
-------------- ---------------
2,138 1,677
CREDITORS: amounts falling due
within one year 14 (112) (80)
-------------- ---------------
NET CURRENT ASSETS 2,026 1,597
-------------- ---------------
TOTAL ASSETS LESS CURRENT
LIABILITIES 2,052 1,620
============== ===============
CAPITAL AND RESERVES
Called up share capital 16 106 96
Share premium account 17 2,475 1,616
Profit and loss account 17 (529) (92)
-------------- ---------------
EQUITY SHAREHOLDERS' FUNDS 18 2,052 1,620
============== ===============
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
2005 2004
Note £'000 £'000
Net cash outflow from operating
activities 19 (404) (458)
Returns on investment and servicing of
finance
Interest received 22 27
Interest paid (298) (232)
--------------- --------------
Net cash outflow from returns on
investment and servicing of finance (276) (205)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (6,364) (455)
--------------- --------------
Net cash outflow from capital expenditure
and financial investment (6,364) (455)
Acquisitions and disposals
Purchase of subsidiary undertakings - (2,000)
Net cash acquired with subsidiary
undertakings - 35
--------------- --------------
Net cash outflow from acquisitions
and disposals - (1,965)
--------------- --------------
Cash outflow before financing (7,044) (3,083)
Financing
Issue of ordinary share capital
(net of issue costs) 869 1,690
Long term loans received 5,359 2,404
--------------- --------------
Net cash inflow from financing 6,228 4,094
--------------- --------------
(Decrease)/increase in cash in the
year 20 (816) 1,011
=============== ==============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
1. ACCOUNTING POLICIES
Basis of accounting
The financial statements have been prepared under the historical cost convention
modified to include the revaluation of the leasehold premises and in accordance
with the applicable accounting standards.
Basis of consolidation
The Group financial statements consolidate the financial statements of Playgolf
(Holdings) Plc and its subsidiary undertakings drawn up to 31 December each
year.
The results of subsidiaries acquired are accounted for from the effective date
of acquisition, using the acquisition method. The financial information does not
include the results regarding the 50% shareholding in Calverley (2004) Limited,
due to the sale of this investment to H.L.W. Fox and D.A.C. Piggins on 14 June
2004 in exchange for deferred consideration of £50,000.
Intangible assets - goodwill
Goodwill arising on the acquisition of subsidiary undertakings, representing any
excess of the fair value of the consideration given over the fair value of the
identifiable assets and liabilities acquired, is capitalised and written off on
a straight line basis over its useful economic life, which is 20 years.
Provision is made for any impairment.
Tangible fixed assets
Leasehold land and buildings are stated at valuation, net of depreciation and
any provision for impairment. The Group has a policy of revaluing all leasehold
property, by an external valuer, upon acquisition and on completion of
construction. Thereafter, the valuation will be performed annually by the
directors and externally at least every five years.
Other tangible fixed assets are stated at cost, net of depreciation and any
provision for impairment. Depreciation is provided on all tangible fixed assets,
once completed, at rates calculated to write off the cost, less estimated
residual value, of each asset on a straight-line basis over its expected useful
life, as follows:
Leasehold land and buildings over the shorter of the lease term and 50 years
Other assets 20 -33% straight line
Investments
Except as stated below, fixed asset investments are shown at cost less provision
for impairment.
In the Company balance sheet, the investment in Golf Learning Centres Limited
and Work For Fun Limited is measured by reference to the nominal value of the
shares issued as consideration. These shares qualified for merger relief and
therefore the premium is ignored.
Stock
Stock represents goods for resale and is stated at the lower of cost and net
realisable value.
Deferred Taxation
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 between the Group'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 periods different from those in which they are recognised in the
financial statements.
Turnover
Turnover represents amounts receivable for goods and services net of VAT.
Leases
Rentals applicable to operating leases where substantially all of the benefits
and risks of ownership remain with the lessor are charged to the profit and loss
account as incurred.
2. OPERATING LOSS 2005 2004
£'000 £'000
Operating loss is stated after charging/
(crediting):
Depreciation 264 155
Amortisation of goodwill - 1
Impairment of goodwill - 103
Profit on sale of fixed asset investments - (118)
Operating lease rentals - land and buildings 138 138
- other 10 53
Auditors' remuneration - audit services 23 22
- other services 13 49
=========== ===========
3. NET INTEREST PAYABLE 2005 2004
£'000 £'000
Interest payable and similar
charges
Bank loans and overdrafts 298 232
Interest receivable (22) (27)
----------- -----------
276 205
=========== ===========
4. STAFF COSTS 2005 2004
No. No.
The average monthly number of employees
(including Executive Directors) was: 61 48
============ ==============
Their aggregate remuneration comprised:
Wages and salaries 1,156 913
Social security costs 111 90
------------ --------------
1,267 1,003
============ ==============
5. DIRECTORS' REMUNERATION 2005 2004
£'000 £'000
Aggregate remuneration
The total amounts for Directors' emoluments were as
follows:
Emoluments 295 268
============ ==============
Highest paid director:
Emoluments 100 94
============ ==============
6. TAX ON PROFIT ON ORDINARY ACTIVITIES 2005 2004
£'000 £'000
(a). Analysis of charge in the year
Current tax charge/(credit)
UK corporation tax - 1
UK corporation tax adjustment in respect of prior - (3)
years
----------- -----------
Total current tax (Note 6(b)) - (2)
=========== ===========
Deferred tax
Origination and reversal of timing differences - (14)
----------- -----------
Total tax credit on loss on ordinary activities - (16)
=========== ===========
(b). Factors affecting the tax charge for the year
The differences between the total current tax shown above, and the amount
calculated by applying the standard rate of UK corporation tax to the loss
before tax is as follows:
2005 2004
£'000 £'000
Loss on ordinary activities before tax (980) (519)
Loss on ordinary activities before tax
multiplied by the standard UK rate of
corporation tax of 30% (2004: 30%) (294) (156)
Effects of:
Expenses not deductible for tax purposes (9) 15
Profit on disposal of investments - (36)
Goodwill write-off - 31
Capital allowances (in excess of)/less than
depreciation (26) 23
Pre-trading expenditure adjustment (22) 22
Small companies relief (3) -
Utilisation of tax losses - (1)
Unutilised losses carried forward 354 103
Adjustments to tax charge in respect of previous
periods - (3)
------------ ------------
Current tax charge for year (Note 6(a)) - (2)
============ ============
The Group is carrying forward losses of £1,690,000 (2004: £305,000).
7. LOSS FOR THE FINANCIAL YEAR
The Parent company has taken advantage of section 230 of the Companies Act 1985
and has not included its own profit and loss account in these financial
statements. The Group loss for the year includes a loss after taxation of
£437,000 which is dealt with in the financial statements of the company.
8. EARNINGS PER SHARE 2005 2004
£'000 £'000
The calculations for earnings per share are based on
the following losses
and numbers of shares:
Loss for the financial year (980) (502)
========= ==========
Weighted average number of shares Number Number
For basic earnings per share 52,990,188 35,914,027
========= ==========
9. INTANGIBLE FIXED ASSETS - GOODWILL Total
£'000
Cost
At 1 January 2005 and 31 December 2005 110
----------
Amortisation
At 1 January 2005 104
Written off in year 6
----------
At 31 December 2005 110
----------
Net Book Value
At 31 December 2005 -
==========
At 31 December 2004 6
==========
10. TANGIBLE FIXED ASSETS
Leasehold
Land and Other
Buildings Assets Total
GROUP £'000 £'000 £'000
Cost or valuation
At 1 January 2005 10,608 537 11,145
Additions 6,031 333 6,364
Revaluations 5,087 - 5,087
Reclassifications (7) 7 -
--------------- ------------ ----------------
At 31 December 21,719 877 22,596
2005
--------------- ------------ ---------------
Depreciation
At 1 January 2005 323 392 715
Charge for the 140 80 220
year
--------------- ------------ ----------------
At 31 December 463 472 935
2005
--------------- ------------ ---------------
Net book value
At 31 December 21,256 405 21,661
2005
=============== ============ ===============
At 31 December 10,285 145 10,430
2004
=============== ============ ===============
COMPANY Other
Assets Total
£'000 £'000
Cost
At 1 January 2005 6 6
Additions 5 5
------------- -------------
At 31 December 2005 11 11
Depreciation
At 1 January 2005 2 2
Charge for the year 3 3
------------- -------------
At 31 December 2005 5 5
Net book value
At 31 December 2005 6 6
============= =============
At 31 December 2004 4 4
============= =============
10. TANGIBLE FIXED ASSETS (cont.)
The leasehold premises of the trading subsidiaries were revalued, in accordance
with the Group's accounting policy, on the following dates:
Subsidiary Date Valuer Valuation
£'000
Golf Learning Centres Limited January 2004 Humberts Leisure 2,650
Playgolf (Trafford Centre) Limited July 2000 Strutt & Parker 1,600
Playgolf (Heaton Park) Limited November 1997 Directors 400
Playgolf (Northwick Park) Limited June 2005 Humberts Leisure 10,500*
Playgolf (East Kilbride) Limited October 2005 Humberts Leisure 5,000
In the directors' opinion, the carrying value of the Group's leasehold land and
buildings equates to the open market value as at 31 December 2005.
*In June 2005, a firm of Independent Chartered Surveyors valued the leasehold
premises at an open market value of £10,500,000 upon completion of the facility.
As Playgolf (Northwick Park) Limited has capital commitments of approximately
£600,000 as at 31 December 2005, the leasehold premises have been valued at
£9,900,000 at the balance sheet date.
The historical cost of leasehold land and buildings included above at a
valuation of £21,719,000 was £11,966,000. The Net Book Value based on the
original cost would be £11,683,000 and the excess depreciation relating to the
revaluation is transferred annually from the revaluation reserve.
11. FIXED ASSETS INVESTMENTS
Company
Subsidiary undertakings 2005
£'000
Cost
At 1st January 2005 19
Additions 1
-------------
At 31 December 2005 20
-------------
Net book value 20
=============
Principal group investments
The Company has investments in the following subsidiary undertakings, all of
which are incorporated and registered in England and Wales.
Subsidiary undertakings Principal activity Holding
Golf Learning Centres Limited Driving range management 100%
Playgolf (Barnet Copthall) Limited Holding company 100%
Playgolf (Heaton Park) Limited Golf course management 100%
Playgolf (Northwick Park) Limited Golf / Leisure management 100%
Playgolf (Trafford Centre) Limited Driving range management 100%
Playgolf Limited Holding company 100%
Work For Fun Limited Holding company 100%
Playgolf (East Kilbride) Limited Golf / Leisure management 100%
Mix Bars Leisure Limited Restaurant Management 90%
12. STOCK Group Company
2005 2004 2005 2004
£'000 £'000 £'000 £'000
Goods for resale 46 41 - -
============= ============= ============= =============
13. DEBTORS Group Company
2005 2004 2005 2004
£'000 £'000 £'000 £'000
Trade debtors 44 14 - -
Amounts owed by group - - 1,759 416
undertakings
Other debtors 336 189 52 55
Prepayments and 260 30 3 33
accrued income
------------- ------------- ------------- -------------
640 233 1,814 504
============= ============= ============= =============
Included in other debtors in the current year, for both the Company and the Group, is
£50,000 due after more than one year (Note 23). In addition, for the Company, amounts owed
by group undertakings are due after one year.
14. CREDITORS: amounts falling due
within one year
Group Company
2005 2004 2005 2004
£'000 £'000 £'000 £'000
Bank loans and overdrafts 34 32 - -
Trade creditors 601 243 1 38
Amounts owed by group undertakings - - 95 -
Other taxation and social security 63 58 11 31
Other creditors 155 38 - 11
Accruals and deferred income 260 254 5 -
------------- ------------- ------------- -------------
1,113 625 112 80
============= ============= ============= =============
15. CREDITORS: amounts falling Group Company
due after one year
2005 2004 2005 2004
£'000 £'000 £'000 £'000
Bank loans 10,039 4,680 - -
------------- ------------- ------------- ---------------
10,039 4,680 - -
============= ============= ============= ===============
Bank loans are repayable as follows: Group
2005 2004
£'000 £'000
Between one and two years 10,039 4,680
Between two and five years - -
After five years - -
------------- -------------
10,039 4,680
============= =============
The terms of the bank loans are currently being renegotiated. The bank loans are
secured against the properties of the operating companies and other assets of
the Group.
16. CALLED UP SHARE CAPITAL 2005 2004
£'000 £'000
Authorised
500,000,000 ordinary shares of 1,000 1,000
£0.002 each
------------- ---------------
1,000 1,000
============= ===============
Allotted, called-up and fully paid
52,990,188 ordinary shares of £0.002 106 96
each
(2004: 47,987,410 ordinary shares of
£0.002 each)
------------- ---------------
106 96
============= ===============
On 19 September 2005, the Company issued 2,225,000 ordinary shares of £0.002
each for cash consideration of £400,500 and on 5 December 2005, the Company
issued a further 2,777,778 ordinary shares of £0.002 each for cash consideration
of £500,000.
On 22 February 2006, the Company issued 5,000,000 ordinary shares of £0.002 each
for cash consideration of £750,000.
17. RESERVES Share Profit and
Premium Revaluation Other Merger Loss
Account Reserve Reserves Reserve Account Total
£'000 £'000 £'000 £'000 £'000 £'000
Group
At 1 January 2005 1,616 4,847 400 467 (737) 6,593
Share issues 859 - - - - 859
(net of costs)
Unrealised
surplus on the
revaluation of
leasehold premises - 5,087 - - - 5,087
Transfer (181) 181 -
Retained loss - - - - (980) (980)
for the year
-------------- --------------- ------------- -------------- ------------- -------------
At 31 December 2,475 9,753 400 467 (1,536) 11,559
2005
============== =============== ============= ============== ============= =============
Company
At 1 January 1,616 - - - (92) 1,524
2005
Share issues 859 - - - - 859
(net of costs)
Retained loss - - - - (437) (437)
for the year
-------------- --------------- --------------- --------------- ------------- -------------
At 31 December 2,475 - - - (529) 1,946
2005
============== =============== ============= ============== ============= =============
18. RECONCILIATION OF MOVEMENTS IN GROUP 2005 2004
SHAREHOLDERS' FUNDS £'000 £'000
Loss for the financial (980) (502)
year
Other recognised gains and losses relating the 5,087 -
year
New shares issued 869 1,712
Acquisition of subsidiary - 346
Acquisition of minority interests' shareholding - 490
------------- -------------
Net addition to shareholders' funds 4,976 2,046
Opening shareholders' funds 6,689 4,643
------------- -------------
Closing shareholders' funds 11,665 6,689
============= =============
19. RECONCILIATION OF OPERATING LOSS TO 2005 2004
OPERATING CASH FLOWS £'000 £'000
Operating loss (704) (432)
Depreciation and amortisation charges 226 259
Profit on sale of investments - 118
(Increase)/decrease in stock (5) 11
Increase in debtors (407) (102)
Increase/(decrease) in creditors 486 (312)
------------- -------------
Net cash outflow from operating activities (404) (458)
============= =============
20. ANALYSIS AND RECONCILIATION OF 1 January 31 December
NET DEBT 2005 Cashflow 2005
£'000 £'000 £'000
Cash in hand, at bank 1,284 (814) 470
Overdrafts (32) (2) (34)
------------- ------------- -------------
1,252 (816) 436
Debt due after one year (4,680) (5,359) (10,039)
------------- ------------- -------------
Net debt (3,428) (6,175) (9,603)
============= ============= =============
2005 2004
£'000 £'000
(Decrease)/increase in cash in the year (816) 1,011
Cash inflow from bank loans in the year (5,359) (2,633)
------------- -------------
Movement in net debt in the year (6,175) (1,622)
Net debt at 1 January 2005 (3,428) (1,806)
------------- -------------
Net debt at 31 December 2005 (9,603) (3,428)
============= =============
21. FINANCIAL COMMITMENTS 2005 2004
Land and Land and
Buildings Other Buildings Other
£'000 £'000 £'000 £'000
Group
Expiry date
Within one year - - - -
Between two and five years - 8 - 10
After five years 198 - 163 -
------------- ------------- ------------- -------------
At 31 December 2005 198 8 163 10
============= ============= ============= =============
22. CAPITAL COMMITMENTS
The Group is committed to the capital expenditure in building a golf leisure
facility. At 31 December 2005, it was committed to spend £624,000.
23. RELATED PARTY TRANSACTIONS
On 14 June 2004, the Group sold its investment in Playgolf (2004) Limited,
previously named Playgolf (Calverley) Limited, to D.A.C. Piggins and H.L.W. Fox,
both directors and shareholders of Playgolf (Holdings) Plc, for deferred
consideration of £50,000, included in other debtors of both the Company and the
Group at 31 December 2004 and 31 December 2005 (Note 13). The consideration is
due for repayment by 14 June 2007 and is accruing interest at a rate of 5% per
annum up to the date of repayment.
24. POST BALANCE SHEET EVENTS
On 10 April 2006, the Group sold the subsidiary, Playgolf (Heaton Park) Limited
for cash consideration of £302,000.
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