Chairman's Statement
In my statement that accompanied the 2010 Accounts I mentioned that trading had started to improve in the second half of that year, but unfortunately this did not continue into the year under review.
I am therefore reporting a loss for the year of £965,000 (2010: loss of £1,025,000). The resultant loss per share is 5.7p (2010: loss of 7.2p). Gearing at the year end was 168% (2010: 144%) and Net Assets per Share were 50p (2010: 56p).
In September 2009, the Board informed each executive director that they had to forgo a proportion of their salary to take into consideration the market conditions and in the event that the Group returned to a sustained profitable position, the forgone salary would be paid and the former salary reinstated. Unfortunately, conditions have not improved and, therefore, the Board informed the executive directors that the amounts in question will not be made good under any circumstances and, therefore, an accrual for these monies in the sum of £1,877,000 has been reversed as at 31 March 2011. There will be no further salary reviews until market conditions will allow.
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There is, however, a recognition that the executive directors need to be incentivised to ensure that the Group does return to profit as soon as possible and, therefore, it is proposed that share options will be granted to the executive directors. Further details will be included in the notice of the forthcoming Annual General Meeting.
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As is the usual custom, a proportion of the property portfolio has been valued externally with the remainder being valued by the Board. The result is that the trading portfolio has been reduced by £576,000 (2010: increase £195,000) and the investment portfolio has been reduced by £24,000 (2010: increase £666,000).
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During the course of the year, Safeland (LSE: SAF.L) completed the purchase of the 50% interest in Grafton Insurance Services Limited. Shareholders may also be aware that post the year end, Safeland entered into a joint venture with the Moorfield Group to develop and operate a chain of Hostels under the name Safestay, initially in London and then across the rest of the UK. Building work is about to commence on the first of these in Southwark and we are all very excited by this new project.
Shareholders will also be aware that we have continued to write down our investment value in the Managed Workspace Fund. As it has continued to suffer both in terms of performance and value, the decision was therefore taken to exit from this altogether and to that end the portfolio was sold on 7 July 2011.
In terms of property trading, we do continue to do profitable deals, but volume is limited and, due to the volatility in the market, we are very selective in the transactions we enter into.
I am, however, very pleased with our current property portfolio and we do continue to enjoy the support of our lenders and professional team so this, coupled with the new venture in Safestay, gives me confidence for the long term future.
Raymond Lipman
