Business review, results and dividends
All trading and property assets of Trafalgar Property Group Plc (Group) are held in the name of the Group or its subsidiaries as follows:
Trafalgar New Homes Limited (TNH)
Trafalgar Retirement+ Limited (TR+)
Selmat Limited (Selmat)
Combe Bank Homes (Oakhurst) Limited (Oakhurst)
Combe Homes (Borough Green) Limited (Borough Green)
All bank borrowings were the liability of TNH, the wholly owned subsidiary of the Group, however during the year the bank borrowings were cleared. Mortgages of £924,373 exist on the four properties held by Selmat. The shares of the Group are quoted on the London Stock Exchange AIM market.
The principal activity of the Group continues to be that of home building and property development and the consolidated results of the year’s trading, are shown below. The consolidated loss for the year was £329,194 (2020: Loss £ 1,022,898) after taking into account exceptional items as mentioned in note 19 to the accounts.
Principal risks & uncertainties
Set out below are certain risk factors which could have an impact on the Group's long-
The principal risks and uncertainties facing the Group are:
1. Direct costs may escalate and eat into gross profit margins.
2. Heavy overheads may be incurred especially when projects have been completed and before others have been commenced.
3. The Group could commit too much to future capital projects.
4. The Group’s reliance on key members of staff.
5. The market may deteriorate, damaging liquidity of the Group and future revenues.
The Group considers that it mitigates these risks with the following policies and actions:
1. The Group affords its bankers and other lenders a strong level of asset and income cover and maintains good relationships with a range of funding sources from which it is able to secure finance on favourable terms.
2. Direct costs are outsourced on a fixed price contract basis, thereby passing on to the contractor all risk of cost overspend, including from increased material, labour or other costs.
3. Most other professional services are also outsourced, thus providing a known fixed cost before any project is taken forward and avoiding the risk that can arise in employing in-
4. Buying decisions for capital projects are taken at Board level, after careful research by the Directors … personally, who have substantial experience in various business sectors and markets.
The Group has focused on a niche market sector of new home developments in the range of four to twenty units. Within this unit size, competition to purchase development sites from land buyers is relatively weak, as this size is unattractive to major national and regional house builders who require a larger scale to justify their administration and overheads, whilst being too many units for the smaller independent builder to finance or undertake as a project. Many competitors who also focus on this niche have yet to recapitalise and are unable to raise finance.
5. Many of the activities are outsourced and each of the Directors is fully aware of the activities of all members.
6. The Group has a corporate governance policy appropriate for a small publicly listed company with ambitions substantially to raise its profile within the wider investor community.
A summary of the results for the year is as follows:-
Annual report & consolidated financial statements 2021
Revenue for the year
Loss after taxation
Group turnover for the year amounted to £2,285,800 (2019: £1,970,106), representing the sale of six units at Sheerness plus two land options purchased and sold (2020: two residential properties plus car park space).
After taking into account the overheads of the Group, there was a loss recorded for the year of (£329,194) after exceptional items as detailed in note 19.
There will be no tax charge and the Company now has tax losses being carried forward of £ 4,645,489 (2020: losses £4,381,991).
The loss per share during the year was (0.34p), (2020: loss per share 0.21p).
As can be seen from the above , the Group failed to achieve a profit for the year under review and during the year all remaining residential units have been sold being the remaining six units at the Sheerness Site. There are currently two site options in Send & Leatherhead upon which planning was not granted and for which now appeals have been lodged with further option opportunities being explored.
Directors’ duties under S172
The Directors believe that, individually and together, they have acted in the way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members as a whole, having regard to the stakeholders and matters set out in s172(1)(a-
Our Board of Directors remain aware of their responsibilities both within and outside of the Group. Within the limitations of a Group with so few employees we endeavour to follow these principles:
Purpose, vision and strategy: this is set out on pages 5-
Group policies: these are reviewed annually and staff and Directors are encouraged to improve their skillset as appropriate.
Culture and people: we fully support a culture where all customers, staff and suppliers are treated in an open and honest fashion, irrespective of race, gender, ethnic, disabilities or other scenarios.
Board structure: the role of the Board is reviewed annually with a clear focus on the specific roles assigned to each individual to enable the Board to properly support each member of staff.
Freedom within a framework: we are developing a new framework for communicating this freedom in a straight-
Risk and internal control framework: risks and controls are subject to discussion at quarterly Board meetings. Every project undertaken by the Group is analysed with a view to limiting the risks to the Group and its Stakeholders before proceeding with implementation.
Key performance indicators (KPIs)
Management are closely involved in the day to day operations of the Group and constantly monitor cashflows and expenditure. However, Management believe the key indicators of performance for the Group are the revenue and profitability achieved during the period. These measures are disclosed above in the operations review.
Development Pipeline & outlook
The year under review was not without its difficulties. In the residential division delays occurred on the building programme for the various properties that were still in the course of construction, or being finished off, with contractors appointed to complete the works but unable to follow the timetable laid down for completion of those works. The delays lead to escalating interest costs on borrowing and therefore affected the profitability of the completed units that were for sale, on the disposal of the same. During the year all remaining 6 units at the Sheerness site sold.
Currently the Group holds four rented properties within its subsidiary. These properties valued at £1,975,000 as investment properties have generated rental income and are let on Assured Shorthold Tenancy Agreements, generating rental income substantially in excess of the borrowing cost of each property.
Whilst TR+ continue to identify and secure new land opportunities for extra/care and assisted living, they are equally focused on obtaining a successful outcome on sites currently under option and/or in for planning. Once planning has been achieved the sites can be built out and placed for sale on the open market, or in the case of the smaller residential schemes, sold on with planning, both options being profitable to the business. Options have been secured for residential development in Ashtead, & Epsom and subsequently sold for profit during the year. Going forward options still remain on Leatherhead and Send but planning has not been forthcoming and this is now lodged for appeal. It is our intention to develop the Leatherhead and Send sites once the favourable outcome of the appeal is known.
Information relating to the financial instruments is now included in the Directors’ Report HERE.
6 September 2021