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The Ethical Property Company

Financial Performance

Up to 30th September 2018

For 2018 Ethical Property Company (EPC) is reporting a small reduction in profit from ordinary activities in the year. This represents the first step towards the increased profitability that will be achieved once The Green House and Streamline are both completed and fully let.

Earnings before Interest and Taxation (EBIT)

EPC continues to report EBIT as the most appropriate measure of underlying operating performance as it gives a clear illustration of year-on-year trends, is unaffected by changes to interest costs and excludes any changes in property values.

Results for 2017 have been restated from £852,651 to £818,278 due to the inclusion of foreign currency translation movements in administrative expenses rather than after profit for the year. The company has also aligned the division of costs between cost of sales and administrative expenses to be consistent with the current year.

EBIT of £765,496 for 2018 is £52,782 lower than for 2017 as restated. Even though results from EPC's existing and ongoing operational portfolio have increased year-on-year, as shown by the higher Return on Book Cost, the short-term impact of the closure of Development House and the opening of The Green House led to reduced income.

 

Share Performance

The Company’s share price started the year at £1.01 and closed at £1.12, based on the average traded price each month. Across the year, just over 162,000 shares were bought and sold in a total of 48 trades.

At the end of the year, just over 91,000 shares were waiting to buy at prices ranging from 95p to £1.00, and just over 52,000 shares were waiting to be bought, at prices ranging from £1.15 to £1.25.

Looking forward, EPC sees the level of its dividend as a key driver of both liquidity and share price. It expects the Company’s profitability to increase as The Green House fills up, enabling the business to pay out higher dividends. Starting in March 2020, EPC is also planning to undertake regular annual share offers, at prices closer to net asset value. Plans for capital raising will be announced and voted on at each AGM, with the share offer commencing immediately afterwards.

EPC plans for each share offer to include a buy back, in which existing shareholders will be able to sell their shares to those participating in the offer, at a small discount to the share offer price. This should then give shareholders an annual opportunity to sell their shares at more realistic prices.

Revenue and net profit

These graphs give you a snapshot of how the business has performed over the last 9 years. Revenue, which is sometimes also called turnover, shows you how much money the business has brought in every year for the last five years. The net profit graph shows you how much of that money ended up as profit after all of the costs of running the business, and after tax. Read more

Profit and loss summary

The profit and loss summary table shows how profitable the business has been over the last year. Read more

2018
£
2017 (restated)
£
Turnover 4,635,050 4,567,929
Gross profit 2,085,800 2,089,353
Administrative expenses (1,521,955) (1,486,445)
Operating profit 598,413 660,559
Profit on ordinary activities before exceptional items, taxation, fair value, interest swap and investment movement 625,915 671,512
Tax on profit on ordinary activities 356,199 (140,795)
Profit for the financial year 1,245,634 1,591,978

Balance sheet summary

The balance sheet of a business gives you a picture of everything the business owns. It shows you all the cash the business has received and what it has done with it. Read more

2018
£
2017 (restated)
£
Total assets less current liabilities 65,035,478 58,757,442
Total liabilities (19,928,459) (14,896,057)
Net assets 45,107,019 43,861,385

Returns and value

The returns indicators show you how much return the business is making from all the money it has. A higher return means a more profitable business and more money for the shareholders. Read more

The share and asset value indicators are designed to help you understand better what the shares of the business might be worth. Read more

Returns indicators Share and asset value
Most recent dividend 3.5 pence Last traded price Read more
Earnings per share 4.2 pence Net asset value per share £3.03

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