31 August 2012
Trafalgar New Homes PLC
(The "Company" and with its subsidiaries "the Group")
Audited Final Results for the period ended 31 March 2012
It is with great pleasure that I present the Report and Accounts for the Company for the period ended 31st
The year has seen great changes in the Company. On 13th September 2011 completion of the Administration
Procedure of the Company was announced, confirming that the Company was no longer in Administration.
On 13th October 2011 the Company announced that it had entered into a conditional agreement to acquire the
entire issued share capital of Combe Bank Homes Ltd and its subsidiaries ("CBH") by the issue of new shares in
the Company. CBH was established in 2006 to undertake residential development in both new build and
On 11th November 2011 the Company was pleased to announce both completion of the acquisition of CBH and the re-
admission of the Company's entire issued Ordinary Share capital to trading on the PLUS-Stock Exchange.
At the same time Mr. Robert McKendrick and Mr. James Reid resigned as Directors of the Company and Christopher
Johnson and Alexander Johnson, the Directors of CBH, joined the Board as Executive Directors of your Company,
forming the new management team. Mr. Andrew Moore subsequently resigned his Directorship of the Company for
personal reasons but continues to undertake the Company Secretarial role.
Following the issue of shares at the time of the completion of the Administration and the issue of shares for
the acquisition of CBH, the Company now has 214,375,200 ordinary shares in issue.
On 6th December 2011, Mr. Norman Lott FCA was appointed a Non-Executive Director and on 17th May 2012, I was
appointed as Independent Non-Executive Chairman of the Company.
I was delighted to accept the role of Chairman of this Company as I have a strong belief in the management
team, having known them for many years. I believe that they will successfully pursue their stated aim to make
this Company and its subsidiaries a force to be reckoned with in the house building market in the South East of
England, their chosen area of operation.
The benefit of the acquisition of CBH and its subsidiaries can be seen in the results for the financial period
ended 31st March 2012 which shows a post tax profit for the financial period of £208,464 (year ended 30
November 2010: loss of £903,100) and earnings of 0.1p per ordinary share (year ended 30 November 2010: loss per
ordinary share of 0.47p). This is however, after writing-off £291,075 of exceptional one-off costs (year ended
30 November 2010: nil) relating to the acquisition of Combe Bank Homes Ltd.
I am encouraged by the growth strategy now in place, with development underway on sites, which are anticipated
to contribute to the Company's financial performance for the years ending March 2013 and 2014.
It leaves me now only to thank those who have served the Company through its difficult times and to
congratulate my fellow board members on their efforts in achieving a positive set of results for the period
under review, enabling us all to look forward to the future with optimism.
The last year has seen the Group make great progress in fulfilling its aim to be a force in the house building
market, in its chosen geographical area of operation which remains primarily Kent, East Sussex, Surrey and the
outer London M25 ring.
The year under review has seen an improvement in the fortunes of house building companies generally and it is
no surprise that we are no exception. However, the very satisfactory results achieved are exciting and augur
well for the future.
At the start of the last financial period the Group was on site and building out developments at Deal and
Aylesford in Kent and Crowborough in East Sussex and undertaking a project management role for a fee on a
development in Frant Road, Tunbridge Wells, Kent. The type of housing units being developed ranged from one
bed starter homes to an executive five bed detached house. The sites were all in the preferred range, being
one to twenty unit sites. No flat developments were undertaken during the period. All the houses were
completed and sold contributing to the turnover for the period and the profit.
The consolidated profit of £499,536 (year ended 30 November 2010: loss of £903,100) before exceptional costs of
£291,075 (year ended 30 November 2010: nil) is a good start. The losses carried forward from previous years
indicate that it is unlikely that there will be a tax charge in 2012 or 2013.
The success of our development activities through the period is shown in the gross profit achieved for the
period under review; this profitability being further enhanced by the addition of rental income generated from
some of the developments undertaken by the Group in previous periods which were retained and rented out owing
to a lack lustre sales market at the time.
The period under review also saw us commence work on our flagship site at Oakhurst Park Gardens, Hildenborough,
Kent and our site at Edenbridge, Kent. These two sites (of 24 units in total) should generate a substantial
turnover over the two financial years ended 31.03.2013 and 31.03.2014.
During the current period, we also intend to start work on two smaller sites owned by the Company in Sheerness,
Kent (six units) and Chatham, Kent (three units).
As stated in the Company's circular to shareholders dated 8th November, 2011, 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 as soon as possible.
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 we will obtain planning permission, which should result in an
enhancement of the land value accordingly. 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 laying the
ground work for 2015 and onwards.
The principal area of operations for the Group has remained Kent and the Southern outer London Boroughs, Surrey
and East Sussex. We intend for the Group to continue its successful policy of developing property of high
quality in its chosen area. It will continue to pursue an aggressive, but controlled 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 mentioned above, our forward land supply situation has remained good and we have sites which are either
being developed out now or owned by us or are in the throes of being acquired, either conditionally or
unconditionally with or without planning permission, which should contribute to the Company's anticipated
financial performance for 2013 and beyond.
On the financial side, I am very pleased to report that our main Bankers have continued their full support for
the Group and its activities and remain prepared to lend on sensible terms for both land acquisition and
construction cost. We have three main Bankers now lending to us to support our activities and development
programme and the cost of our borrowing remains very competitive. The Johnson family will continue to support
the Group in its activities, via their established loan accounts providing the necessary financial support to
cover the balance of monies needed to buy land and build out sites and for overheads.
The PLUSquotation of the Company's shares may, in due course, be a further source of capital funding. The
Group intends to capitalise upon its funding sources to acquire and develop prime new build land sites on a
favourable cost base, where opportunities arise and it is prudent so to do.
By continuing to outsource most of our activities, we are able to keep our overheads very low and thereby
increase profitability accordingly. Your executive management team of myself and Alex Johnson have, between
us, more than forty years experience in the house building industry, our collective experience enabling us to
handle 'in house' almost any eventuality that might arise and cover all aspects of land acquisition,
development and sales and marketing.
We continue to be able to negotiate satisfactory building prices with our favoured contractors and,
notwithstanding any increase in building prices generally (and despite delays in the planning process being
experienced throughout the industry), we are confident of developing out sufficient sites to continue the
Group's growth trend.
The outsourcing by the Group of construction work and professional services and the operation of a minimal head
office centre, with low fixed overheads, enables the Group to scale up or down the trading activity very
quickly to react to changing market conditions and opportunities.
Needless to say, we are working tirelessly to achieve an increase in the profile of our product at the same
time as working to increase profitability and the potential for dividends to be payable to shareholders in the
future as a result.
Finally, we remain committed to providing quality homes in areas of undoubted demand at realistic prices.
Trafalgar New Homes Plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 31 March 2012
16 month Year ended 30
period ended November
Note 2012 2010
Revenue 2,346,404 326,550
Cost of sales 1,699,896 1,104,025
Gross profit / (loss) 646,508 (777,475)
Administrative expenses 251,509 156,749
Underlying operating profit / (loss)* 394,999 (934,224)
Costs of acquisition 29,500 -
Deemed cost of listing 261,575 -
Operating profit/(loss) 103,924 (934,224)
Profit/(loss) before interest 103,924 (934,224)
Other interest receivable and similar income 137,858 92,941
Finance costs 33,163 61,817
Profit/(loss) before taxation 208,619 (903,100)
Tax payable on profit on ordinary activities 155 -
Profit/(loss) after taxation for the period 208,464 (903,100)
Other comprehensive income - -
Total comprehensive income for the period 208,464 (903,100)
Profit/(loss) attributable to:
Equity holders of the parent 208,464 (903,100)
Total comprehensive income for the period attributable to:
Equity holders of the parent 208,464 (903,100)
PROFIT/(LOSS) PER ORDINARY SHARE;
Basic/Diluted 0.1p (0.47)p
*Operating profit before non-recurring items, costs of acquisition and deemed cost of listing
All results in the current and preceding financial period derive from continuing operations.
Trafalgar New Homes Plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 March 2012
31 March 30 November
Note 2012 2010
Tangible fixed assets 1,533 529
Inventory 6,557,666 6,934,734
Trade and other receivables 110,043 54,113
Cash at bank and in hand 553,420 271,665
Total assets 7,222,662 7,261,041
Creditors: amounts falling due within one year
Trade and other payables (169,305) (24,090)
Borrowings (1,010,816) (3,939,612)
Net current assets 6,041,008 3,296,810
Borrowings (7,420,555) (5,070,765)
Net liabilities (1,378,014) (1,773,426)
Capital and reserves
Called up share capital 2,143,752 87,575
Share premium account 961,128 194,393
Reverse acquisition reserve (2,817,633) (181,669)
Profit & loss account (1,665,261) (1,873,725)
Equity - attributable to the owners of the parent ---------- ----------
BASIS OF ACCOUNTING
These financial statements are for Trafalgar New Homes Plc ("the Company") and its subsidiary undertakings.
The Company is incorporated in England and Wales.
BASIS OF PREPARATION
The Group financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) and interpretations adopted by the European Union and as applied in accordance with the
provisions of the Companies Act 2006. These financial statements are for the period from 1 December 2010 to
31 March 2012 and are presented in pounds sterling ("GBP"). The comparative period is for the year to 30
The financial statements have been prepared under the historical cost basis, as modified by valuing financial
assets and financial liabilities at fair value through the Statement of Comprehensive Income. The principal
accounting policies adopted are set out below.
The directors have reviewed forecasts and budgets for the coming year, which have been drawn up with
appropriate regard for the current economic environment and the particular circumstances in which the Group
operates. These were prepared with reference to historical and current industry knowledge, taking into account
future strategy of the Group.
The existing operations have been generating funds to meet short-term operating cash requirements. As a result
of these considerations, at the time of approving the financial statements, the directors consider that the
Company and the Group have sufficient resources to continue in operational existence for the foreseeable
future. It is appropriate to adopt the going concern basis in the preparation of the financial statements.
Mr Johnson confirms that he will continue to support the Group for its anticipated needs for the next two
years. As with all business forecasts, the directors' statement cannot guarantee that the going concern basis
will remain appropriate given the inherent uncertainty about the future events.
STANDARDS ISSUED BUT NOT YET EFFECTIVE
At the date of authorisation of these financial statements the following Standards and Interpretations, some of
which have not been endorsed by the EU, which have not been applied in these financial statements but were in
issue but not yet effective:
IFRS 9 - Financial Instruments;
IFRS 10 - Consolidated Financial Statements;
IFRS 11 - Joint Arrangements;
IFRS 12 - Disclosure of Interests in Other Entities;
IFRS 13 - Fair Value Measurement;
IAS 1 (amended) - Presentation of Items of Other Comprehensive Income;
IAS 12 (amended) - Deferred Tax: recovery of underlying assets;
IAS 19 (revised) - Employee Benefits;
IAS 27 (revised) - Separate Financial Statements; and
IAS 28 (revised) - Investments in Associates and Joint Ventures.
IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine
The Directors do not anticipate that the adoption of these Standards and Interpretations in future periods
will have a material impact on the financial statements of the Group when the relevant standards and
interpretations come into effect.
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of Trafalgar New Homes Plc and its
On 11 November 2011, Trafalgar New Homes plc became the legal holding company of Combe Bank Homes Limited and
its subsidiaries via a share for share exchange.
This transaction is deemed outside the scope of IFRS 3 (Revised 2008) and not considered a business combination
because the directors have made a judgement that prior to the transaction, Trafalgar New Homes plc was not a
business under the definition of IFRS 3 Appendix A and the application guidance in IFRS 3.B7- B12 due to
Trafalgar New Homes plc being a shell company that had no processes or capability for outputs (IFRS 3.B7).
On this basis, the directors have developed an accounting policy for this transaction, applying the principles
set out in IAS 8.10-12, in that the policy adopted is:
* relevant to the users of the financial information;
* more representative of the financial position, performance and cash flows of the Group;
* reflects the economic substance of the transaction, not merely the legal form; and
* free from bias, prudent and complete in all material aspects.
The accounting policy adopted by the directors applies the principles of IFRS 3 in identifying the accounting
acquirer and the presentation of the consolidated financial statements of the legal parent (Trafalgar New Homes
plc) as a continuation of the accounting acquirer's financial statements (Combe Bank Homes Limited). This
policy reflects the commercial substance of this transaction as follows:
* the original shareholders of the subsidiary undertakings are the most significant shareholders post initial
public offering, owning 90 per cent. of the issued share capital; and
* the cash consideration paid as part of the initial public offering returned equity to the original
shareholders of the legal subsidiary undertaking and as a consequence diluted their shareholding to 10 per
Accordingly, the following accounting treatment and terminology has been applied in respect of the reverse
* the asset and liabilities of the legal subsidiary Combe Bank Homes Limited are recognised and measured in the
Group financial statements at the pre-combination carrying amounts, without reinstatement to fair value;
* the retained earnings and other equity balances recognised in the Group financial statements reflect the
retained earnings and other equity balances of Combe Bank Homes Limited immediately before the business
combination, and the results of the period from 1 December 2010 to the date of the business combination are
those of Combe Bank Homes Limited. However, the equity structure appearing in the Group financial statements
reflects the equity structure of the legal parent, including the equity instruments issued under the share for
share exchange to effect the business combination;
* comparative numbers presented in the Group financial statements are those reported in the financial
statements of the legal subsidiary, Combe Bank Homes Limited, for the year ended 30 November 2010;
* the cost of the combination has been determined from the perspective of Combe Bank Homes Limited. The fair
value of the shares in Combe Bank Homes Limited has been determined from the admission price of the Trafalgar
New Homes plc shares on re-admission to trading on PLUS for 1 pence per share. The value of the consideration
shares was £1,868,177. The fair value of the notional number of equity instruments that the legal subsidiary
would have had to have issued to the legal parent to give the owners of the legal parent the same percentage
ownership in the combined entity is 10 per cent of the market value of the shares after issues, being £207,575.
The difference between the notional consideration paid by Trafalgar New Homes plc for Combe Bank Homes Limited
and the Trafalgar New Homes plc net liabilities acquired of £54,000 has been charged to the Consolidated
Statement of Comprehensive Income as a deemed cost of listing amounting to £261,575 with a corresponding entry
to the reverse acquisition reserve.
Trafalgar New Homes plc had no significant assets nor significant other liabilities or contingent liabilities
of its own at the time that the share for share exchange took effect.
Transaction costs of equity transactions relating to the issue and re-admission of the Company's shares are
accounted for as a deduction from equity where they relate to the issue of new shares and listing costs are
charged to the Group Income Statement as an exceptional item within administrative expenses.
Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern
the financial and operating policies generally accompanying the shareholding of more than half of the voting
rights. Where necessary, adjustments have been made to the financial statements of subsidiaries, associates
and joint ventures to bring the accounting policies used and accounting periods into line with those of the
Group. Intragroup balances and any unrealised gains and losses arising from intragroup transactions are
eliminated in preparing the Consolidated financial statements.
The results of subsidiaries acquired during the period are included from the effective date of acquisition,
being the date on which the Group obtains control. They are deconsolidated on the date that control ceases.
Business combinations, other than noted above, are accounted for under the acquisition method. Any excess of
the purchase price of the business combination over the fair value of the identifiable assets and liabilities
acquired is recognised as goodwill.
The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred,
the liabilities incurred and the equity interests issued by the Group. This fair value includes any contingent
consideration. Acquisition-related costs are expensed as incurred.
Investments in subsidiaries are accounted for at cost less impairment. Cost also includes direct attributable
costs of investment. The excess of consideration over the fair value of the assets and liabilities acquired is
recorded as goodwill. If the consideration is less than the fair value of the assets and liabilities acquired,
the difference is recognised directly in the Statement of Comprehensive Income.
Revenue is measured at fair value of the consideration received. All income is derived in the United Kingdom.
Sales of homes are recognised when the sale has been completed and the proceeds received.
Revenue shown in the statement of comprehensive income represents amounts invoiced during the period.
Items included in the financial statements of each of the group's entities are measured using the currency of
the primary economic environment in which the entity operates ('the functional currency'). The consolidated
financial statements are presented in Pounds Sterling (£), which is the company's functional and the group's
Operating profit/(loss) is stated before interest and tax.
Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group has
become a party to the contractual priorities of the instrument.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and deposits held at call with banks.
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and,
where applicable, direct labour costs and those overheads that have been incurred in bring the inventories to
their present location and condition. Interest of sums borrowed that finance specific projects is added to
cost. Cost is calculated using the weighted average method. Net realisable value represents the estimated
selling price less all estimated costs of completion and costs to be incurred in marketing, selling and
TANGIBLE FIXED ASSETS AND DEPRECIATION
Tangible fixed assets are stated at cost, net of depreciation and any provision for improvement.
Depreciation is calculated to write down the cost less estimated residual value of all tangible fixed assets
by equal annual instalments over their expected useful economic lives. The rates generally applicable are:
Fixtures, fittings and equipment - 25% on reducing balance
TRADE AND OTHER RECEIVABLES
Trade and other receivables are initially measured at fair value and are subsequently reassessed at the end of
each accounting period.
FINANCIAL LIABILITIES AND EQUITY
Financial liabilities and equity instruments issued by the group are classified according to the substance of
the contractual arrangements entered into and the definitions of a financial liability and an equity
instrument. An equity instrument is any contract that evidences a residual interest in the assets of the group
after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and
equity instruments are set out below.
Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the
effective interest rate method.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use of
sale, are added to the cost of those assets, until such time as the assets are substantially ready for their
intended use or sale. All other borrowing costs are recognised in the statement of comprehensive income in
the period in which they relate.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.
Shares issued are held at their fair value.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the tax authorities. The tax rates and the tax laws used to compute the amount are
those that are enacted or substantively enacted, by the balance sheet date.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as
reported in the income statement because it excludes items of income or expense that are taxable or deductible
in other periods and it further excludes items that are never taxable or deductible. The group's liability for
current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which deductible temporary differences can
be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the
asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is
settled or the asset is realised. Deferred tax is charged or credited in profit or loss, except when it
relates to items charged or credited directly to other comprehensive income, in which case the deferred tax is
also dealt with in other comprehensive income.
Ordinary share capital is classified as equity. Interim ordinary dividends are recognised when paid and final
ordinary dividends are recognised as a liability in the period in which they are approved.
Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past
event and it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. Where the group expects
some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when
the reimbursement is virtually certain. The expense relating to any provision is presented in the income
statement net of any reimbursement. If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a
COMMITMENTS AND CONTINGENCIES
Commitments and contingent liabilities are disclosed in the financial statements. They are disclosed unless the
possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is not
recognised in the financial statements but disclosed when an inflow of economic benefits is virtually certain.
EVENTS AFTER THE BALANCE SHEET DATE
Post period-end events that provide additional information about a company's position at the balance sheet date
and are adjusting events are reflected in the financial statements. Post period-end events that are not
adjusting events are disclosed in the notes when material.
CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgment in the process of applying the Group's
accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to the Group financial statements are disclosed below.
Estimates and judgments are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the present circumstances.
The directors consider that the share for share exchange between Trafalgar New Homes plc and Combe Bank Homes
Limited to be a reverse acquisition, as Combe Bank Homes Limited is considered the acquirer. Further details of
the basis of consolidation and how the directors developed the most appropriate accounting policy is outlined
in the basis of consolidation within the accounting policies. The difference between the consideration shares
transferred in the business combination ("Consideration Shares") and the fair value of the net assets acquired
has been charged to the Group Statement of Comprehensive Income as a deemed cost of listing.
The Group assesses the net realisable of inventories under development and completed properties held for sale
according to their recoverable amounts based on the realisability of these properties, taking into account
estimated costs to completion based on past experience and committed contracts and estimated net sales based on
prevailing market conditions. Provision is made when events or changes in circumstances indicate that the
carrying amounts may not be realised. The assessment requires the use of judgment and estimates.
For the purpose of IFRS 8, the chief operating decision maker ("CODM") takes the form of the Board of
Directors. The Directors opinion of the business of the group is as follows.
The principal activity of the Group was property development.
Based on the above considerations, there is considered to be one reportable segment. The internal and external
reporting is on a consolidated basis with transactions between group companies eliminated on consolidation.
Therefore the financial information of the single segment is the same as that set out in the consolidated
statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement
of financial position and cashflows.
The following tables present revenue regarding the group's geographical segments for the periods ended 31 March
2012 and 30 November 2010.
Period ended 31 March 2012 United Total
Property development - sales 2,346,404 2,346,404
Year ended 30 November 2010 United Total
Property development - sales 326,550 326,550
OTHER INTEREST RECEIVABLE AND SIMILAR INCOME
Bank interest received 220 227
Rental Income 137,638 92,714
INTEREST PAYABLE AND SIMILAR CHARGES
Interest on bank loans 166,054 129,469
Interest on other loans 90,500 57,000
PROFIT/(LOSS) FOR THE PERIOD
The Group's profit/(loss) for the period is stated after charging the following:
Deemed cost of listing (i) 261,575 -
Costs of acquisition 29,500 -
Depreciation of tangible fixed assets 737 636
Fees payable to the auditor for the audit of the company's annual accounts 10,000 3,000
Fees payable to the auditor for the audit of the annual accounts of
Subsidiary undertakings 2,000 -
Amounts payable to Crowe Clark Whitehill LLP and its related entities in respect of audit and non-audit
services are disclosed in the table above.
(i) The difference between the notional consideration transferred in the business combination of £207,575
and the fair value of net liabilities acquired of £54,000, £261,575 has been consequently charged to
the group Statement of Comprehensive Income.
EMPLOYEES AND DIRECTORS' REMUNERATION
Staff costs during the period were as follows:
Directors remuneration 24,475 13,000
Wages and salaries 81,333 68,298
Social security costs 9,626 7,014
Other pension costs 25,500 18,000
The average number of employees of the company during the period was:
Directors and management 4 4
Key management are the group's directors. Remuneration in respect of key management was as follows:
Short-term employee benefits:
- Emoluments for qualifying services C Johnson 14,475 6,500
- Emoluments for qualifying services A Johnson 10,000 6,500
There are retirement benefits accruing to Mr C Johnson for whom a company contribution was paid during the
period of £25,500. (2010: £18,000)
Current tax 155 -
Tax charge/(credit) 155 -
Profit/(loss) on ordinary activities before tax 208,619 (903,100)
Based on profit for the period:
Tax at 26.3% (2010: 26.3%) 54,867 (237,515)
Losses not utilised (54,712) 237,515
Tax charge for the period 155 -
PROFIT/(LOSS) PER ORDINARY SHARE
The calculation of profit/(loss) per ordinary share is based on the following profits/(losses) and number of
Profit/(loss) for the period £208,464 £(903,100)
Weighted average number of shares for basic profit/(loss) per share 200,396,679 8,757,500
Weighted average number of shares for diluted profit/(loss) per share ----------- ----------
PROFIT/(LOSS) PER ORDINARY SHARE; ----------- -----------
Diluted 0.1p (0.47)p
TANGIBLE FIXED ASSETS
At 1 December 2010 1,165
At 31 March 2012 ----------
At 1 December 2010
Charge for the period 636
At 31 March 2012 ----------
Net book value at 31 March 2012 1,533
Net book value at 30 November 2010 ----------
TRADE AND OTHER RECEIVABLES
Other receivables 79,926 42,389
Other taxes 27,820 3,849
Prepayment 2,297 7,875
There are no receivables that are past due but not impaired at the period end, and receivables relate only
to customers with no recent history of default.
CASH AND CASH EQUIVALENTS
All of the group's cash and cash equivalents at 31 March 2012 and 30 November 2010 are in sterling and held at
floating interest rates.
Cash and cash equivalents 553,420 271,665
The Directors consider that the carrying amount of cash and cash equivalents approximates to their fair value.
Work in progress 6,557,666 6,934,734
TRADE AND OTHER PAYABLES
Trade creditors 69,057 10,316
Accruals 52,812 8,480
Tax 5,467 3,563
Other creditors 41,969 1,731
Director's loans 4,578,912 4,590,765
Other loans 480,000 480,000
Bank loans 3,372,459 3,939,612
Included in other loans, all bearing interest at 10% - 15% per annum, is the sum of £300,000 (2010: £300,000)
advanced by the DFM Pension Scheme of which Mr J Dubois is the principal beneficiary.
The bank borrowings are repayable as follows:
On demand or within one year 1,010,816 3,939,612
In the second year 1,726,643 -
In the third to fifth years inclusive 635,000 -
After five years ---------- ----------
Less amount due for settlement within 12
months (included in current liabilities) (1,010,816) (3,939,612)
Amount due for settlement after 12 months ---------- ----------
The weighted average interest rates paid on the bank loans were as follows:
Bank Loans - 5.1% (2010: 5.1%)
The Director's loan is repayable after more than 1 year and is interest free.
The other loans bear interest of between 10-15% and are repayable after more than 1 year.
Authorised Share Capital
Ordinary shares of 1p each 214,375,200 87,575,000
Issued, allotted and fully paid
Ordinary shares of 1p each 2,143,752 87,575
On 11 November, 2011, the Company acquired the entire share capital of Combe Bank Homes Limited for the sum
of £2,323,524 satisfied by the issue of 186,817,671 New Ordinary Shares of 1p per share.
SHARE PREMIUM ACCOUNT
Balance brought forward 194,393 194,393
Premium on issue of new shares 787,235 -
Share issue costs (20,500) -
Balance carried forward ---------- ----------
RELATED PARTY TRANSACTIONS
Mr C. C. Johnson holds 87.15% of the total issued share capital of the Group.
On 9 February 2012, the Directors agreed to sell a small number of completed residential properties, which were
let pending sale, to Mr C C Johnson for an aggregate consideration of £1,090,000. The Directors believed that
a sale of the properties on the open market in the current economic climate would realise a significant loss
against cost. The book value of the properties was £1,129,301 at the date of sale.
The following working capital loans have been provided by the Directors:
C C Johnson £4,578,912 £4,590,765
J Dubois £300,000 £300,000
Mr Johnson's Loan is interest-free and Mr Dubois' Loan, which is from his Pension Fund of which he is the sole
beneficiary, is at 15% pa interest.
CATEGORIES OF FINANCIAL INSTRUMENTS
The group's financial assets are divided as cash and cash equivalents. The group's financial liabilities are
divided as directors loans, bank loans and other loans.
Loans, cash and cash Borrowings and trade
equivalents and payables held at
receivables held at bamortised cost
2012 2010 2012 2010
£ £ £ £
Cash and cash equivalents 553,420 271,665 - -
Borrowings - directors loans - - 4,578,912 4,590,765
Borrowings - bank loan - - 3,372,459 3,939,612
Borrowings - other loans - - 480,000 480,000
Total ---------- ---------- ---------- ----------
553,420 271,665 8,431,371 9,010,377
---------- ---------- ---------- ----------
The Board has overall responsibility for the determination of the Group's risk management objectives and
policies and it sets policies that seek to reduce risk as far as possible without unduly affecting the Group's
competitiveness and flexibility. Further details regarding these policies are set out below:
Capital risk management
The Group considers its capital to comprise its share capital and share premium. The Group's capital
management objectives are to safeguard the entity's ability to continue as a going concern, so that it can
continue to provide returns for shareholders and benefits for other stakeholders and to provide an adequate
return to shareholders by pricing products and services commensurately with the level of risk.
Significant Accounting Policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class of
financial asset, financial liability and equity instrument are disclosed on pages 16 to 20 to these financial
Foreign currency risk
The Group has minimal exposure to the differing types of foreign currency risk. It has no foreign currency
denominated monetary assets or liabilities and does not make sales or purchases from overseas countries.
Interest rate risk
The Group is sensitive to changes in interest rates principally on the loans from banks. The loans from the
directors are interest free.
The impact of a 100 basis point increase in interest rates would result in additional interest cost for the
period of £33,302 (2010: £38,901).
Credit risk management
Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in
financial loss to the group.
Liquidity risk management
This is the risk of the Company not being able to continue to operate as a going concern.
The Directors have, after careful consideration of the factors set out above, concluded that it is appropriate
to adopt the going concern basis for the preparation of the financial statements and the financial statements
do not include any adjustments that would result if the going concern basis was not appropriate.
Derivative financial instruments
The Group does not currently use derivative financial instruments as hedging is not considered necessary.
Should the group identify a requirement for the future use of such financial instruments, a comprehensive set
of policies and systems as approved by the Directors will be implemented.
In accordance with IAS 39, "Financial instruments: recognition and measurement", the group has reviewed all
contracts for embedded derivatives that are required to be separately accounted for if they do not meet
specific requirements set out in the standard. No material embedded derivatives have been identified.
- The information contained within this announcement has been extracted from the Company's audited
annual report and consolidated financial statements for the period ended 31st March 2012.
- The Directors do not recommend the payment of a final dividend for the period.
THE DIRECTORS OF THE COMPANY ACCEPT RESPONSIBILTY FOR THE CONTENTS OF THIS ANNOUNCEMENT
Trafalgar New Homes Plc
+44 (0)1732 700000
PLUS Corporate Adviser
Peter Ward/Alex Brearley
+44 (0)20 7638 5600