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Trading Update February 2007
16 February 2007
Artisan (UK) PLC
For immediate release: 16 February 2007
Artisan (UK) plc
Trading Update
Artisan (UK) plc ('Artisan' or 'the Company'), the housebuilder and commercial business park developer, releases the following trading update in respect of the three months to 31 December 2006 which is provided as part of a move to the revised accounting reference date of 30 June. In addition, due to the changes of revenue recognition, as previously announced, as part of the conversion to IFRS, Artisan is not providing comparative figures for this quarter.
Sales for the period are summarised below:
Three months to Nine Months to
31 December 31 December
2006 2006
Residential £3.18m £14.49m
Commercial £2.56m £7.02m
TOTAL £5.74m £21.51m
Rippon Homes
Completed sales of residential units rose from 62 for the six months to 30 September 2006 to 82 for the nine months to 31 December 2006. Although the three months to 31 December were expected to be seasonally quiet, in the event November and early December were more robust than expected. Margins continue to be pressured by the need to provide incentives on sales and from the use of newer land. Overheads in this business have remained in line with management expectations.
Although the market for land, particularly with planning permission, remains extremely competitive, Rippon Homes was successful in securing the three sites announced last month, with the purchase of a further site due to complete shortly and sites at other locations at an advanced stage of negotiations.
Artisan Developments
Artisan (UK) Developments, the Company’s business park development subsidiary, completed the sales of four units to an investor on its St Albans site in December. In addition, during the period this business entered into a forward sale on an 11,000 sq ft office at Cygnet Park in Peterborough and a forward lease of a further 11,000 sq ft office also at Cygnet Park. These are all significant and profitable transactions. On the forward sale only the land value and initial build valuation have been recognised in the period to December. The forward lease provided no contribution at that stage, but in January a forward sale of the freehold of the building subject to the forward lease was completed. The majority of the build turnover will be recognised in the remainder of the financial period to 30 June 2007. Whilst these transactions are extremely encouraging, Artisan (UK) Developments Limited will continue to attract the regular sales that form the core of its trading activities. The exceptional activity on the larger sales has been a little offset by a slightly quieter time on the regular sales. We believe this reflects the underlying variability in demand rather than any response to rising interest rates as yet.
Outlook
Although it is proving challenging to purchase quality land at appropriate values, we are pleased to report that the strategy of investment in land for the future is moving ahead and the Board believes that the platform for growth is being achieved. We can see very positive signs that our strategy on the commercial side will be rewarded. The growth in commercial activity is mainly on existing land stocks and we are working to increase the opportunities to acquire more commercial outlets.
At Rippon, the Board is comfortable that its expectations on sales are being met, although the period after the New Year has not proved quite as robust as the same period last year and the traditional Spring season remains key, as ever.
In addition, the Board is currently examining the possibility of utilising its in-house skills to establish a property investment arm within the Business, to purchase and hold commercial investment properties both from the Company’s current development property portfolio and outside. We will update shareholders on our strategy in this area in due course.
Artisan (UK)
plc
Chief
Executive
01480 436666
Chris
Musselle
email@artisan-plc.co.uk
Brewin Dolphin Securities Limited
Nominated advisers
0121 236 7000
Ifor Williams
Bankside
Consultants Financial
PR advisers 020 7367 8888
Simon
Rothschild
07703 167065
Company website:
www.artisan-plc.co.uk
