TIDMTRAF

 

MOVE TO AIM, CHANGE OF ADVISER

RNS Number : 4319F

Trafalgar New Homes PLC

23 May 2013

Trafalgar New Homes PLC

("Trafalgar New Homes", the "Company" or "Group")

Trading update, proposed admission to AIM and fundraising and appointment of ISDX corporate adviser and broker

The directors of Trafalgar New Homes (ISDX:TRAF), the residential property developer operating in southeast England, are pleased to provide a trading update for the financial year ended 31 March 2013 and announce their intention to apply for admission of the ordinary shares of the Company to trading on the AIM market of the London Stock Exchange plc ("AIM"), together with a fundraising of up to GBP1 million.

Trading update

The last year has seen the Group make good progress in its chosen geographical area of operation, primarily Kent, East Sussex, Surrey and the outer London M25 ring. Activity in the residential property market has started to increase and the last financial year has seen an increase in revenues for the Group.

For the 12 months ended 31 March 2013, the Group sold a combined 12 units in Dover (The Engineer), Edenbridge (High Street) and Hildenbrough (Lodge at Oakhurst Park Gardens). In addition, the Group has conditionally agreed to sell its subsidiary company, Combe Homes (Investments) Limited, which holds six rental flats in Maidstone (The Square). These contributions to Group revenue for the year to 31 March 2013 mean that, in the absence of unforeseen circumstances, the directors of the Company ("Directors") estimate that the consolidated profit before taxation of the Group for the year ended 31 March 2013 was not less than GBP575,000 ("Profit Estimate") (see note 1 below). The Directors expect the audited results for the year to 31 March 2013 to be announced in August.

Since the financial year end, at Edenbridge (High Street) a further two units have been sold with two more under offer, leaving only the cottage to be sold where marketing has just commenced. At the Oakhurst Park Gardens development of 12 homes, marketing is due to start next month as the development nears completion. These contributions to revenue in this current financial year mean that, subject to no unforeseen circumstances and sufficient distributable reserves being available, the Company aims to pay a final dividend for the year to 31 March 2014.

The Group owns a further three sites and has agreements to purchase three other sites. The development of five of these is planned to take place during 2015 and on into 2016, with contributions to revenue for both the financial years ending 31 March 2015 and 2016.

The Directors are optimistic about future prospects for the Group following signs of a gradual improvement in the residential property market, helped by various stimuli provided by the Government to encourage buyers into the market. The Directors believe that the Group's focus on southeast England and relatively small developments, being those which they consider are outside the resources of local house builders and too small to be of interest to the larger house building companies, puts the Group in a strong position to take advantage of an improvement in the sector.

Proposed admission to AIM and fundraising

The Company intends to seek the admission of its ordinary shares to trading on AIM in the near future ("AIM Admission") and to withdraw from trading on the ISDX Growth Market. It has always been the Company's intention to move to AIM at an appropriate time and the Directors believe that the Group has made sufficient progress such that the move to AIM is now a logical next step. Since the reverse takeover of Combe Bank Homes Limited in November 2011, trading in the Company's ordinary shares on the ISDX Growth Market has been minimal. The Directors believe that admission to AIM will assist the Company in attracting new investors, improving liquidity in its shares and raising additional capital when required. The Directors also believe that admission to AIM will enhance the profile of the Company and help to attract future acquisition opportunities as the Company seeks to expand.

At the same time as the AIM Admission, the Company will be seeking to raise (subject to market conditions) up to GBP1,000,000, via a placing of new ordinary shares, for general working capital purposes.

An admission document in relation to the AIM Admission will be published in due course and a further announcement will be made at the time.

Appointment of ISDX Corporate Adviser and broker

The Directors are pleased to announce the appointment of Allenby Capital Limited as ISDX Corporate Adviser and broker to the Company with immediate effect, who have also agreed to act as nominated adviser and broker to the Company in connection with its proposed AIM Admission. The Company has also appointed Yellow Jersey PR Limited as its financial PR adviser.

Christopher Johnson, CEO of Trafalgar New Homes, commented: "We believe that given the fundamentals of the business and the direction of the residential property market, the time has come for a move to AIM. The funds raised and increased profile will assist the Company in its aim to expand through organic growth and strategic acquisitions."

The directors of the Company accept responsibility for this announcement.

For further information please contact:

 

 Trafalgar New Homes Plc

  Christopher Johnson                 +44 (0)1732 700000

 ISDX Corporate Adviser and Broker

  Jeremy Porter/James Reeve           +44 (0)20 3328 5656

 Financial PR

  Yellow Jersey PR Limited

  Dominic Barretto/Anna Legge         +44 (0)20 3664 4087

 

For further information please visit the Company's website at: www.trafalgar-new-homes.co.uk

Note 1

The Profit Estimate is based on i) the unaudited interim financial statements of the Group for the six month period ended 30 September 2012 issued by the Company on 27 November 2012; and ii) the unaudited management accounts of the Group for the six month period ended 31 March 2013.

For the purposes of the Profit Estimate, "profit before taxation" is defined as earnings before tax as reported under IFRS, not including the impact of any items which might be reported as exceptional items.

The Profit Estimate takes into account the following principal assumptions which could have a material effect on the achievement of the Profit Estimate:

-- sales of properties on which contracts were exchanged prior to 31 March 2013 will proceed to

completion in accordance with contractual terms;

-- there will be no material impairment of assets (either tangible or intangible) requiring write down; and

-- there will be no change resulting in a material impact on the results (either positive or negative)

arising due to changes in legislation, taxation or regulatory requirements, changes in or the

occurrence of events or circumstances not currently foreseen, the correction of errors in the interim financial results and management accounts and different judgements made by the Directors at the

time of reporting the audited results for the year ended 31    March 2013.

This information is provided by RNS

The company news service from the London Stock Exchange

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May 23, 2013 06:00 ET (10:00 GMT)