Plymouth’s Sutton Harbour Group has recorded a £90,000 loss over the past year.
The company which owns a large swathe of Plymouth’s waterfront and its former airport site made a profit of £360,000 in the previous year.
The AIM-listed firm released its financial results for the year ended March 31 2023, where it cited rising energy costs and rising interests rates resulted in the rising of prices. However, the firm said that as energy costs have declined at the start of the current financial year, it is securing more cost effective contracts with "more stability in supply".
In May 2023, subscription for new equity shares by a major shareholder provided £2.9m to support the company’s operations and projects "in the face of ongoing higher costs and to permit reduction of bank loan debt".
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Sutton Harbour said that it had been engaged in the delivery of two "key property projects" during the year, to improve the quality, value and sustainability of the area.
Harbour Arch Quay is currently being constructed with the firm aiming for a completion date this month (August 2023). This is the first new building to be developed by the company at Sutton Harbour since 2009.
Additionally, Old Barbican Market has undergone a full refurbishment, including a new roof on the listed structure and separation of the 7,500 sq ft space into three retail spaces. The units have already been let to Cornish Bakery, Pavers and Loungers.
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Sutton Harbour added that it has seen "record" season for the marinas with near capacity occupancy throughout the year.
Strong trading by marinas and car parks were reflected in increased valuation of the owner occupied property portfolio at £38.3m, up from £36.1m the previous year.
Philip Beinhaker, executive chairman of Sutton Harbour Group, commented: "The board is pleased with the successful delivery of new developments to meet objectives of sustaining and enhancing the attractiveness and amenity of the Sutton Harbour area and to create long term value growth from the assets. The investments made in the past year are proof that sustainable success is achievable with improvements to the Harbour environment for the benefit of visitors, workers and residents."
In May 2022 the company repaid a third party loan which had been drawn down in 2020 to purchase strategic land. Security provided to the lender was then released. This was funded by unsecured related party loans from two major shareholders totalling £2.3m on better and more flexible terms than could be secured elsewhere.
Later in the financial year the Related Party Loans were increased by £280,000 and £375,000 respectively to improve cash liquidity. The Company is now preparing to put a new general banking facility in place within the current financial year.
Mr Beinhaker said: "Trading at the start of the new financial year is steady and consistent with recent trading. Demand for the company's property, services and facilities continues to be robust. The company will continue to be challenged with higher energy prices (although these continue to fall from the winter peak), general inflation and the consequential costs resulting from the lock cill replacement. Higher interest rates represent the single biggest cost pressure."
He added: "This positive achievement is set against the emergence of economic challenges of higher energy and interest costs which have undermined profitability in the past year. Looking to the future, in order to maintain the momentum with current strategic plans, the company is in discussions with the current development funder, based on the productive results of the work to date, towards securing the additional financing for development of the Company's existing land assets in the coming year. We look forward to updating the market in due course."
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