(PCH) Pochin's

Pochin's PLC

(the "Group")

Half year report for the six months to 30 November 2011

Headlines

·      Revenue from continuing operations £30.7m (2010: £37.0m)

·      Profit after tax from continuing operations £0.49m (2010: £0.03m)

·      Net loss (including discontinued operations) £0.33m (2010: £0.49m loss)

Chairman's Statement

The results for the 6 months ended 30 November 2011 show a profit after tax from continuing activities of £0.485m (2010: £0.027m) and a loss from  discontinued activities of £0.817m (2010: £0.516m loss), which combine in an overall loss for the period of £0.332m (2010: £0.489m loss).  Revenue for the period from continuing activities was £30.722m; the comparable figure for 2010 was £37.035m, which included a c£11m property disposal.  No interim dividend is proposed.

Concrete Pumping

The decision to dispose of the loss making concrete pumping business was announced with the results for the year ending 31 May 2011.  This division, whose activities are now classified as  discontinued, have  benefited from improved cost control and operational efficiencies, and a reasonably mild winter, with the result that the level of ongoing losses has been contained, albeit with additional provision made for costs of disposal.  Meanwhile the disposal process is at an advanced stage, with completion expected shortly.

Construction

This division has performed well in testing market conditions with improved results compared to the corresponding period last year.  While it remains particularly difficult to win new work in a fiercely competitive market, highly valued established clients continue to provide good opportunities which should enable this division to maintain its improved performance in the second half of the year.

Property

Rental income from the core investment portfolio has remained strong.  The regional commercial property market shows signs of renewed weakness which may   have a further impact on values during 2012.  These conditions are adversely affecting development land values in particular, and they inhibit the Group's planned disposals of non-core assets.

Group

During this period, the Group put into effect the agreement to reduce substantially its guarantee commitments to joint venture companies.  While this did not affect the profit, it did give rise to a £5m increase in net indebtedness.  Other than in this respect, the Group is maintaining a stable cash position and is entering discussions with its principal banker, The Royal Bank of Scotland, over suitable facilities to take effect following its withdrawal from the concrete pumping activity.

In summary, the Group's property rental income and ongoing construction activities have performed creditably in difficult market conditions.  Prospects for commercial property values remain a concern, as do those for an early return to profitable development activity.  The second half of the year should see the disposal of the concrete pumping business, leaving the remaining divisions seeking to benefit from their established position in the challenging regional market.

Richard Fildes

Chairman

Enquiries:

Pochin's PLC

John Moss, Chief Executive                              01606 833 333

John Edwards, Finance Director

Charles Stanley Securities                              020 7149 6000

Russell Cook

Carl Holmes

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of changes in equity

Consolidated balance sheet

Consolidated cash flow statement

1.             The interim report was approved by the board on 27 January 2012.

2.             General information and basis of preparation

The interim financial information has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 May 2011.  They do not include all of the information required in annual financial statements in accordance with IFRS, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 May 2011.

3.             Significant accounting policies

                The interim financial statements have been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements for the year ended 31 May 2011.

4.             Estimates

                When preparing the interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses.  The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.

                The judgements, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty were the same as those applied in the Group's last annual financial statements for the year ended 31 May 2011.

5.            Going concern

                After making enquiries, which include a detailed review of the Group's working capital requirements and an assessment of the likelihood of obtaining continuing support from the Group's bankers and renewal of facilities in the forthcoming year, the directors have a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future.  For this reason they continue to adopt the going concern basis in preparing the financial statements. 

6.             Business combination

                On 9 June 2011 the Group acquired 100% of the issued share capital and voting rights of UKLP (BrynCegin) Limited, a company based in the United Kingdom that operates within the property segment, for a non-cash consideration.  There is no material effect on the balance sheet.

7.             Segmental information

                During the period, the Group was organised into three operating business segments based on the different services provided by each division: Construction, Property and Residential.  The residential segment has been transferred to the construction division during the period for operational purposes.  The Concrete Pumping segment has been classified as discontinued during the period and comparatives re-presented.  

                As operations are carried out entirely within the UK, there is no further consideration of information on geographical areas in determining the Group's operating segments.  The measurement policies used for segment reporting reflect those used for internal reporting and for the Group's financial statements.  Inter-segmental pricing is done on an arms length open market basis.

Segmental information

6 months ended 30 November 2011

Within the Construction segment, external sales of £18,631,000 arise from five customers that individually account for more than 10 per cent of the entity's revenues.  These are also considered to be major customers.