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PRELIMINARY ANNOUNCEMENT OF THE RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006 Wellington Market Company PLC, the owner and operator of retail markets throughout England and Wales, today announces its results for the year ended 31 December 2006. HIGHLIGHTS:
CHAIRMAN'S STATEMENT This is my first annual report statement since I became your Chairman following the very sad death of my predecessor, Geoffrey Simon, who did so much to build and develop the group that we see today. Your new Board has instigated a number of changes which we hope will be appreciated by shareholders; these include a considerably modernised and more informative Annual Report and a move this year from our traditional AGM venue in Telford to the recently refurbished 6 Market Approach in Wellington, where we hope to give attending shareholders both appropriate refreshments and a tour of our Wellington market operation.
In many ways 2006 has been a transitional year for Wellington: the most important development has seen us taking a 25 year operating lease of Cornish Market World (together with Bens Play World) which I referred to in my interim statement. This was legally completed on September 19th and so far, I am pleased to report, it has traded well up to our expectations. The site has a total area of 80,000 sq ft. of which the market occupies 70,000 sq ft. with the remaining 10,000 sq ft. occupied by Bens Play World, a children's activity centre. With 120 traders and a 950 vehicle parking area it should make a material contribution to our results in 2007.
We have also considerably strengthened our tier of regional managers and are continuing to weed out some poorly performing smaller markets while upgrading and improving others.
Turning now to the actual results themselves, 2006 has proved a rather disappointing trading year both for the markets industry generally and ourselves in particular. Despite the inclusion of Cornish Market World for three months both our turnover and operating profit (before impairment of tangible fixed assets) were slightly down as were, more pleasingly, our administrative expenses. On the other hand our professionally valued property assets showed an overall increase of GBP850,000 predominantly due to growth in the worth of our Investment Portfolio. However accountancy treatment requires us to show any value reductions on cost in individual markets as an "exceptional" item in our Profit and Loss Account - thus you will see an impairment charge of GBP680,000 - primarily because of a reduction in value of our Cleethorpes site - turning our "profit" into a "loss". I would emphasise that this is essentially a book-keeping transaction which in no way affects the cash position of Wellington - indeed you will see that your Board is proposing a 2.5p final dividend which maintains a total dividend of 4.0p for the year. Our "gearing" level - bank borrowings of GBP5.58m to our net asset base of GBP8.44m - stands at a comfortable 66%.
Looking to the future I anticipate an improving trading performance in 2007 not least because of both the investment we have made in Luton, but also the inclusion of a full year's contribution from Cornish Market World. With consumers becoming increasingly critical of supermarket shopping and sterile high streets, markets like ours can bring value, vitality and community to the retailing experience and play a significant role in the regeneration of our town centres. It is up to us, as the only quoted markets operator - and one of the industry leaders - to seize the opportunities that are available. Our Wellington team has worked very hard this year and I pay fulsome tribute to them; hopefully their efforts will bring shareholder rewards in the years to come.
Download full report here.