Zentra Group PLC (LSE: ZNT), the UK-based residential developer, development manager and property manager focused on the North of England, is pleased to announce its audited results for the year ended 30 June 2024 (FY 2024).

Financial highlights

• Reduction in revenue of £0.94m, 6% on the prior year, from £15.59m to £14.65m, driven by a reduction in sales completions from 71 to 52 during the period.
• Impairment £0.82m compared with £1.09m in the prior year, a reduction of £0.27m. The impairment loss is included in cost of sales.
  • Previously reported factors have continued to impact developments, including increases in costs due to rising material prices, sub-contractor prices, delays experienced and the cost of debt, as remaining self delivery projects completed by year-end. The remaining project of Victoria Road Eccleshill, procured on a fixed price contract, is within budget.
• Gross profit of £0.18m, down by £0.41m or 69% on prior year mainly due to the reduction in sales completions (FY 2023: gross profit of £0.59m).
• Loss before tax of £3.56m (FY 2023: loss of £2.14m).
• Basic loss per share of 8.7 pence (FY 2023: loss of 6.2 pence).
• Net debt of £16.89m (FY2023: £16.94m). Repayment in the period of £1.0m of the £1.5m Corporate Bond which matured in March 2024, with the reminder £0.5m rolled into a new loan note facility on the same terms for a further 12 months to March 2025.
• A decrease in the One Heritage Property Development shareholder loan facility of £0.4m to £10.98m (FY 2023: £11.38m). During the year renegotiation took place of the facility termination date, which was extended to December 2025, with the ability to extend for a further 3 years.

Operating highlights

• Practical completion of St Petersgate Stockport and North Church House Sheffield (as development manager), bringing to an end the policy of self-delivery development.
• A decision to move away from co-living activity due to uncertainties on returns.
• Advancement of construction on Victoria Road, Eccleshill within budget by utilising a fixed price contract procurement strategy, with practical completion occurring in October 2024.
• Completed a Company strategic review, resulting in a number of financial and operational changes after the financial year, including the alignment of overheads to current business position.
• Scott Nicol appointed as Group Head of Investment, adding substantial knowledge and experience and Ben Scandrett also came on board as Group Head of Development, overseeing all development activities, from pipeline management to project delivery.

Post Period Events

• Rebranding of One Heritage Group PLC to Zentra Group PLC reflecting a broader strategic realignment.
• Unconditional exchange of contracts for the sale of our inventory valued at £7.0m.
• The acquisition of a 30% stake in the One Victoria project in Manchester, where we also serve as Development Manager.
• Agreement of refinancing initiatives, including securing a new Related party £7.0m facility at a more favourable 6% interest rate (down from 7%) and a £2.0m debt write-off of existing Group facilities reducing our interest burden and increased financial flexibility.
• Completion of the sale of the building Seaton House, Stockport for £0.6m together with exchange of conditional contracts for the sale of the land to the rear for £0.4m.
• Practical completion in October 2024 of 24 houses at Victoria Road, Eccleshill.

Outlook

• The movement away from in-house delivery and Co-living are pivotal to allow the business to focus on the securing of new business opportunities linked with the promotion of our two main brands of Zentra Living for Apartments and Zentra Homes for single dwelling houses.
• The robust review of financial and operational structures and steps put in place give the Company greater operational and financial flexibility with the benefit of adding value for our shareholders.

Jason Upton, Chief Executive Officer, commented:

“Over the past year, the Company has faced economic and trading challenges, affecting both consumer confidence and our cost base. It has also been a time of reflection and transition, with key decisions made to move away from self-delivery, reduce our exposure to Co-living, and realign our cost base and staffing structure. These actions are vital for restoring profitability and increasing shareholder returns.

The recent financial restructuring and inventory disposal have laid a strong foundation as we enter a new era with a fresh identity and revised strategy under the Zentra brand. I look forward to leading the team through this exciting chapter in the months ahead.”