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DJ Ace Liberty & Stone PLC Annual Financial Report

TIDMALSP

RNS Number : 9981N

Ace Liberty & Stone PLC

30 September 2019

Ace Liberty and Stone plc

("Ace" or "the Company")

FINAL RESULTS FOR THE YEAR ENDED 30 APRIL 2019

Strong Growth in Revenue, Profit, and Portfolio Value

Ace Liberty and Stone Plc (NEX: ALSP), the active property investment company capitalising on commercial property investment opportunities across the UK, is delighted to announce its Final Results for the year ended 30 April 2019.

Financial Highlights:

   --      Revenue for the year grew to GBP5,072,435 (2018: GBP3,515,088) a 44.3% increase 
   --      Property assets have increased to GBP88.3 million (2018: GBP58.2 million) a 51.7% increase 
   --      Comprehensive Income grew to GBP814,562 (2018: GBP361,295) a 125.5% increase 
   --      Profit after taxation increased to GBP765,717 (2018: GBP361,296) a 111.94% increase 
   --      Dividend payments for the year were double that of the previous year at 2.5p per share 
   --      Dividends paid in three installments resulting in earlier receipt by shareholders 

-- Basic Earnings per share 1.97p (2018: 0.91p) and diluted earnings per share 1.15p (2018: 0.61p) increased by 116.5% and 88.5% respectively

Operational Highlights:

-- Ace has substantially strengthened its portfolio with the acquisition of eight properties for a combined total of GBP32,952,499:

o Tweedale House, Oldham and Brocol House Wigan; Princes Court, Leicester; Mecca Bingo Hall in Chesterfield; Frances House in Northampton; Black Horse Street in Bolton; Nolan House in Warrington; and James Cook House in Middlesbrough

-- The portfolio was also rebalanced with the sale of the Doncaster car park; as well as most of the remaining residential assets in Barnsley and Stoke on Trent

-- Since the year end further residential properties were sold in Barnsley and the sale of Hillcrest House in Leeds was also agreed

-- Ace also sold Hume House for GBP3,900,000, representing an overall 307% return on our investment over the purchase price of GBP1,670,000 in 2014; and Bridge House in Dudley was sold with deferred completion

-- These transactions show Ace's proactive investment and trading strategy in action, finding multi-use and attractive locations with strong rental agreements and established tenants

-- Banking relationships were improved with new banking facilities of GBP20 million agreed with Coutts & Co in addition to the existing facility with long term supporter Lloyds Bank

   --      Shareholder support has also been forthcoming with: 

o GBP1.2 million of the 5% Convertible Loan Note converted into Ordinary shares

o GBP3.2 million loan agreed; and

o GBP10 million Convertible Loan Note renewal agreed

Ismail Ghandour, Chief Executive Officer, commented:

"We are currently in a very strong position, with a healthy balance sheet, good cashflow and excellent banking relationships in place. Ace will now look to use this financial and operational platform to explore opportunities that present themselves as a result of the current economic and political turmoil.

"Our strategy remains unchanged and we will choose our properties very carefully, making sure they fit our investment criteria; fully let; with national or local government or triple-A commercial tenants; and most leases covering the next nine plus years. We are more convinced than ever that there are many more profitable opportunities in smaller, thriving towns outside of the capital and believe we can continue our growth no matter what the eventual outcome of Brexit brings."

-ends-

For further information, please contact:

 
 Ace Liberty & Stone Plc 
 Ivan Minter, Financial Director                Tel: +44 (0) 20 7201 8340 
                                            http://acelibertyandstone.com 
 
 Alfred Henry Corporate Finance Ltd, 
  NEX Exchange Corporate Adviser 
 Jon Isaacs / Nick Michaels                     Tel: +44 (0) 20 3772 0021 
                                                      www.alfredhenry.com 
 
 Belvedere Communications 
 John West /Llew Angus                          Tel: +44 (0) 20 3687 2756 
                                                      www.belvederepr.com 
 
 SP Angel Corporate Finance LLP 
  Broker 
 Abigail Wayne / Rob Rees                        Tel: +44 (0)20 3470 0470 
                                                        www.spangel.co.uk 
 
 ACF Equity Research 
 Christopher Nicholson / Amalia Barnoschi       Tel: +44 (0) 20 7558 8974 
                                                www.acfequityresearch.com 
 

Chairman's Statement

It is my great pleasure once again to recommend an Annual Report which shows remarkable progress.

The Company has purchased properties in Oldham, Wigan, Leicester, Chesterfield, Northampton, Bolton, Middlesbrough and Warrington during the year under review, spending GBP32,952,499 on these properties. This has the effect of lifting the total passing rent of the portfolio to GBP6,477,438. Photographs of these properties are shown on the inside front and back cover of the annual report. During the year the Doncaster car park was sold as were most of the remaining residential properties in our Barnsley and Stoke on Trent portfolios. The sale of Bridge House, Dudley was agreed with deferred completion. Since the year end, we have completed the sale of the residential properties in Barnsley and arranged the sale Hillcrest House, Leeds. The proceeds of these sales will be used for further purchases.

I again commend to you the KPIs published on pages 6 and 7 of the annual report. This is information used by management to run the business and we believe it is beneficial for shareholders and potential investors to be able to share it. In the last five years, the portfolio has grown from some GBP24million to GBP88million with the income proportionately increasing from GBP2.2million to GBP6.5million the graph of this performance forms the basis of the Report's front cover design. We also take pride in the quality of the portfolio. The Weighted Average Unexpired Lease to Break measurement (WAULB) has been consistently close to nine years for the past three years and, elsewhere in the Report, we disclose that 59 per cent of the Group income is from National and Local Government tenants. These statistics show our stability outperforms many in our industry and confirm the very secure base from which to approach the future.

We also show the underlying portfolio strength in terms of cash- and profit- earning with the management reports which show the growth of gross contribution from the portfolio over the past five years from GBP724,243 to GBP3,547,530. Over the same period recurring overheads have grown only from GBP365,439 to GBP872,735, demonstrating sound corporate management on behalf of our shareholders.

I commented last year on the effect of IFRS on our published reports. In our view the KPIs published will give a more focused report on the essence of the business.

The Company continues to benefit from sound banking relationships. In addition to the valued facility from Lloyds Bank Plc, we have added a new facility from Coutts & Co which reached approximately GBP20million at the year end. This support enables us to engage with confidence with potential vendors.

Shareholders, too, have been supportive. The holders of almost GBP1.2million of the 5% CLN have converted into Ordinary Shares and over GBP800,000 have exercised their warrants, contributing new equity capital to the enterprise. In addition, we have successfully arranged the issue of a GBP3.2million loan, also to shareholders, accompanied by warrants exercisable at 95p. The holder of the GBP10million CLN has agreed to renew this instrument.

Finally, I am delighted to report the continued increase in the Company's dividend payments. The payment in respect of the year ended 2019 was double that of the previous year, at 2.5p per share, and was paid in three instalments instead of annually, resulting in earlier receipt by shareholders.

None of us can foresee what awaits us in the future and, in these troubled times, it would be rash of me to make any forecasts. I can simply say that the Company is very soundly placed and the Board will be ready to meet any opportunities which occur in the next twelve months.

Dr Tony Ghorayeb

Chairman

Date: 25 September 2019

Consolidated Statement of Comprehensive Income for the year ended 30 April 2019

 
                                                          2019          2018 
                                                           GBP           GBP 
 
 Revenue                                             5,072,435       3,515,088 
 Gain / (loss) on disposal of investment 
 property                                              284,138        (40,758) 
 Administrative expenses                           (1,827,857)     (1,042,612) 
 Fair value gain on investment property              1,247,371         250,000 
 Fair value losses on assets held for 
  sale                                               (320,079)       (250,000) 
 Finance cost                                      (3,354,830)     (2,219,199) 
 Finance income                                          5,511           1,622 
 Share based payment charge                          (347,726)               - 
 Profit before taxation                                758,963         214,141 
 Taxation                                                6,754         147,154 
                                                  ------------  -------------- 
 Profit after taxation                                 765,717         361,295 
 Other comprehensive income                             48,845               - 
 Total comprehensive income for the 
  period                                               814,562         361,295 
                                                  ============  ============== 
 
 Attributable to: 
 Owners of the parent                                  814,562         361,295 

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DJ Ace Liberty & Stone PLC Annual Financial Report -2-

                                                  ============  ============== 
 
 
 
 Earnings per share on continuing activities        Pence   Pence 
 Basic earnings per share attributable 
  to equity owners of the parent                2    1.97    0.91 
 Diluted earnings per share attributable 
  to equity owners of the parent                2    1.15    0.61 
 

Consolidated Statement of Financial position at 30 April 2019

 
                                         2019         2018 
  ASSETS                                  GBP          GBP 
  Non-current assets 
  Investment property              79,538,096   50,487,866 
                                   79,538,096   50,487,866 
                                  -----------  ----------- 
  Current assets 
  Assets held for sale              8,784,921    7,734,000 
  Trade and other receivables         510,490      934,479 
  Cash and cash equivalents         1,956,742    5,180,225 
                                  -----------  ----------- 
                                   11,252,153   13,848,704 
                                  -----------  ----------- 
 
 TOTAL ASSETS                      90,790,249   64,336,570 
                                  ===========  =========== 
 
  EQUITY AND LIABILITIES 
  Current liabilities 
  Liabilities relating to 
  assets held for sale              1,440,125    2,587,141 
  Trade and other payables          4,833,381    1,239,869 
  Taxation                             96,681      162,098 
  Borrowings                       15,921,701      690,000 
                                  -----------  ----------- 
                                   22,291,888    4,679,108 
                                  -----------  ----------- 
  Non-current liabilities 
  Borrowings                       47,212,143   40,003,625 
  Deferred tax                        116,188      214,502 
                                  -----------  ----------- 
                                   47,328,331   40,218,127 
                                  -----------  ----------- 
 
  Share capital                    10,608,342   10,065,887 
  Share premium                     9,099,025    7,643,310 
  Share option reserve                826,906      479,180 
  Other reserve                       341,603      579,548 
  Treasury shares                   (480,620)    (480,620) 
  Retained earnings                   774,774    1,152,030 
                                  -----------  ----------- 
  Total equity                     21,170,030   19,439,335 
                                  -----------  ----------- 
 
  TOTAL EQUITY AND LIABILITIES     90,790,249   64,336,570 
                                  -----------  ----------- 
 
 

Consolidated Cash Flow Statement for the year ended 30 April 2019

 
                                                                 2019           2018 
                                                                  GBP            GBP 
 Profit before tax                                            758,963        214,141 
 
 Cash flow from operating 
  activities 
 Adjustments for: 
 Finance income                                               (5,511)        (1,622) 
 Finance costs                                              3,354,830      2,219,199 
 Gain on disposal of 
  investment property                                       (284,138)         40,758 
 Fair value adjustment                                      (927,292)              - 
 Decrease / (Increase) 
  in receivables                                              423,989      (756,313) 
 Increase in payables                                       1,558,525        476,019 
 Tax paid                                                   (156,977)      (337,186) 
 Interest paid                                            (1,448,846)    (1,520,350) 
 Other finance costs                                        (356,562)              - 
  paid 
 Share based payment                                          347,726              - 
  charge 
  Net cash generated by operating activities                3,264,707        334,646   334,646 
                                                        -------------  ------------- 
 
 Cash flows from investing 
  activities 
 Interest received                                            (5,511)          1,622 
 Purchase of investment 
  properties                                             (32,952,499)   (20,784,558) 
 Sale of investment properties                              4,063,138      1,501,242 
 Net cash used by investing 
  activities                                             (28,894,872)   (19,281,694) 
                                                        -------------  ------------- 
 
 Cash flows from financing 
  activities 
 Share issue, net of issue 
  costs                                                             -         85,300 
 Long term loans advanced                                  23,415,375     26,673,688 
 Long term loans repaid                                     (690,000)    (3,593,404) 
 Short term loans advanced                                  1,440,125      1,000,000 
 Short term loans repaid                                    (665,705)              - 
 Equity dividend paid                                     (1,093,113)      (389,121) 
 Net cash generated by financing 
  activities                                               22,406,682     23,776,463 
                                                        -------------  ------------- 
 
 Net (decrease) / increase in cash 
  and cash equivalents                                    (3,223,483)      4,829,415 
                                                        -------------  ------------- 
 
 Cash and cash equivalents at the beginning 
  of the period                                             5,180,225        350,810 
 
 Cash and cash equivalents at the end 
  of the period                                             1,956,742      5,180,225 
                                                        =============  ============= 
 
 
 

NOTES TO PRELIMINARY RESULTS FOR THE PERIOD ENDED 30 APRIL 2018

1. The financial information set out above does not constitute statutory accounts for the purpose of Section 434 of the Companies Act 2006. The financial information has been extracted from the statutory accounts of Ace Liberty & Stone Plc and is presented using the same accounting policies, which have not yet been filed with the Registrar of companies, but on which the auditors gave an unqualified report on 25(th) September 2019.

The preliminary announcement of the results for the year ended 30 April 2019 was approved by the board of directors on 25(th) September 2019.

   2.         Earnings per Share 
 
 
  The calculations of earnings per share are based on the following 
   earnings and numbers of shares. 
                                                               GBP            GBP 
  Profit for the period attributable 
  to equity owners                                         814,562        361,295 
                                                    --------------  ------------- 
                                                            No. of         No. of 
                                                            shares         shares 
                                                            of 25p         of 25p 
  Weighted average number of shares 
  For basic earnings per share                          41,245,673     39,837,319 
  Dilutive effect of share options                      29,837,805     18,942,245 
                                                    --------------  ------------- 
  For diluted earnings per share                        71,083,478     58,779,564 
                                                    ==============  ============= 
  Earnings per share                                         pence          pence 
  Basic                                                       1.97           0.91 
  Diluted                                                     1.15           0.61 
                                                               GBP            GBP 
  Dividends declared during the 
   year - per share of 25p                                  0.0291           0.01 
  Dividends declared during the 
   year - total                                          1,196,786        389,121 
 
   There were no dividends declared and approved prior to the end of 
   the year for inclusion in the Financial Statements. However, a dividend 
   of GBP356,994 was approved after the year end, being equal to 0.84p 
   per share. 
 

- ends -

The Directors accept responsibility for this announcement.

Notes to Editors

Ace Liberty & Stone Plc is a property investment company with a diverse portfolio of properties located across the UK, currently including Leeds, Sunderland, Plymouth, Dudley, Gateshead, Barnstaple, and London. The Company locates commercial and residential properties which have the potential for an increase in value through creative asset management activity, such as change of tenancy, change of use or new lease negotiation. Ace has maintained a track record of generating strong profits at disposal of properties and achieving better-than average returns on capital. With strong support from shareholders and mortgage lenders, the Company is currently seeking further investment opportunities in the UK to create value for existing and new investors.

Ace is run by a board with extensive property experience, an excellent network of contacts and relevant professional qualifications. This sector expertise has allowed the Board to identify opportunities and act promptly to secure investments.

For more information on the Company please visit www.acelibertyandstone.com

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DJ Ace Liberty & Stone PLC Annual Financial Report -3-

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