OPERATIONS REVIEW

The year under review has seen us continue our movement towards establishing ourselves as a force in the house building market in our chosen area of operation, which, as in previous years, remains primarily Kent, East Sussex, Surrey and the outer London M25 ring.

At the commencement of the year, work was under way on our flagship site at Oakhurst Park Gardens, Hildenborough, Kent and our site at Edenbridge, Kent which two sites were anticipated to generate substantial turnover over the two financial years ended 31 March 2013 and 31 March 2014.  This has been the case.  Work was completed on the Edenbridge site, which comprised of eight two bed apartments, a three bedroom penthouse, a studio and retail shop (new build) and an existing cottage which was refurbished.  Seven of the units contributed to the profit for the year end under review and all, but one, of the remaining units are currently under offer for sale.  This site contributed substantially to the profit for the year.

On the Oakhurst Park Gardens development, work is complete and whilst available for sale now, marketing of the properties will commence in earnest at the beginning of September, as we took the decision to delay the launch during the peak July and August summer holiday period.  We are confident that this site will contribute substantially to turnover and profit for the year ended 31 March 2014.

During the year we have acquired sites in Ticehurst, East Sussex and Tunbridge Wells, Kent for the development of two units and six units respectively and development work will be undertaken on these two sites during this year, with the site we own at Sheerness, Kent (six units) being commenced at the same time.  These three sites are anticipated to contribute to the profit for the year ended 31 March 2015.

The other site currently owned by us at Chatham, Kent (three units) will be retained for development or sale over the course of this year.  We have decided to withdraw from the development at Chipstead as satisfactory terms could not be agreed.

The success of our development activities through the year is shown in the gross profit achieved for the year under review; the profitability being further enhanced by the addition of profit generated from the sale of the balance of the investment properties at The Square, Maidstone, which had been retained by us through the recession.

The consolidated profit after tax of £530,558 (2012: £208,464) on revenue of £2,205,786 is an encouraging result.  The losses carried forward from previous years has reduced the tax charge in 2013.  There has been a change in accounting policy in relation to revenue recognition as detailed in the accounting policy note here.

As stated previously, the declaration and payment of dividends is at the discretion of the Board and depends upon future funding requirements, profits generated and the available reserves of the Company.  It remains the Board’s intention to give consideration to the payment of a dividend at the earliest opportunity and we therefore aim to pay a dividend in respect of the financial year ending 31 March 2014, subject to the foregoing.

We continue to negotiate the purchase of a number of sites, some with planning permission and some without planning consent where we are confident that planning permission will be obtained.  We have and are entering into options and conditional contracts on land in our chosen area of operation to ensure continuity of development activity with a view to achieving our projected profitability for 2015 and onwards.

In particular, we are excited about the option we have entered into in respect of land in Staplehurst, Kent (circa 5 acres in extent) where we are confident planning permission will be obtained and which has been acquired by us for a nominal consideration and at a beneficial purchase price.

In our area of operations we intend for the Group to continue our successful policy of developing property of high quality to satisfy public demand.  We will continue our land acquisition programme to satisfy the likely needs and demands of house buyers, preferring to develop a broad and varied range of residential homes, as evidenced in the year under review where we have developed out the Edenbridge site comprising apartments and a refurbished cottage and the Oakhurst site which comprises twelve three/four bedroom houses ranging in size from 1,400 sq.ft to 1,900 sq.ft each and which we intend to market for sale at figures in excess of £500,000 per unit.

 As regards financial matters, I can confirm that our main bankers have continued their full support for the Group and its activities and remains prepared to lend on realistic terms for both land acquisitions and construction costs.  Indeed, we have a number of financial institutions keen to support our development activities. We have three main bankers/funders at present, satisfying our needs on competitive terms and the Johnson family will continue to support the Group in its activities where necessary via the established loan accounts, providing the necessary financial support to cover the balance of the monies needed to buy land and build out sites and for overheads.  We borrow on a site specific basis only and do not seek general overdraft facilities.

On the corporate side, we signalled our intention to move the Company from the ISDX Growth Market (formerly PLUS) to AIM, which was completed on 16 July 2013, and the Company's shares may be a further source of capital funding in the future as a result.  The Group does, indeed, intend to capitalise upon its funding sources to acquire and develop prime new build land sites on a favourable cost basis, where opportunities arise and it is prudent so to do.

We continue to run the business on a low overhead base and whilst costs will rise following our admission to AIM, we believe we will continue to operate on a low overhead base compared to our competitors.

The experience of the Executive Directors in the industry enables us to buy land, negotiate and enter into construction contracts for the sites and engage professional services with a low head office overhead centre, enabling the Group to scale up or down the trading activity very quickly to react to changing market conditions and opportunities.  We are very confident of being able to develop out sufficient sites to continue the Group’s growth trend through the current year and onwards.  We believe that the success of the Group and the profitability generated as a result will enable us to pay dividends to shareholders in the future.

Finally, we remain committed to providing quality homes in areas of undoubted demand at realistic prices.

RESULTS AND DIVIDENDS

The results for the year are here.

The Directors do not recommend the payment of a final dividend for the year (2012: nil).

DIRECTORS

The following Directors have held office since 1 April 2012:-

C C Johnson

A Johnson

N Lott

J Dubois  

CONFLICTS OF INTEREST

Under the articles of association of the company and in accordance with the provisions of the Companies Act 2006, a Director must avoid a situation where he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict with the company's interests.  However, the Directors may authorise conflicts and potential conflicts, as they deem appropriate.  As a safeguard, only Directors who have no interest in the matter being considered will be able to take the relevant decision, and the Directors will be able to impose limits or conditions when giving authorisation if they think this is appropriate.  During the financial year ended 31 March 2013, the Directors have authorised no such conflicts or potential conflicts.

DIRECTORS' INTERESTS IN SHARES

Directors' interests in the shares of the Company, including family interests, at 31 March 2013 were as follows:-

Christopher Johnson

Director

21st August 2013