Revenue included €8 million relating to low margin business which had a lesser beneficial effect on profit margins.
The Group‟s operating profit before depreciation amounted to €5,782,866 (2013: €902,402). After charging depreciation amounting to €1,661,765
(2013: €503,117) and net finance costs amounting to €1,077,086 (2013: €267,346), the Group registered a profit before tax of €3,044,015 (2013: €131,939). Profit after accounting for taxation amounted to €2,185,897(2013: €394,333).
The Group completed the construction of its base at the port of Larnaca and started providing support services to ENI Cyprus, as scheduled, on 1 June 2014.
The contracts referred to above led to both the Malta and Cyprus bases working at full capacity throughout the second half of the year.
During 2014, Medserv p.l.c. issued another tranche of bonds amounting to €7 million carrying a coupon of 6% per annum to supplement the first tranche of €13 million issued in 2013. The total funds raised amounting to €20 million have enabled the Group to complete its investment programme. In the year under review this included the completion of a new 8,000 square metre warehouse which is now fully utilized. In addition, an investment of €3.5 million was made in specialised containers, most of which are now on hire to clients in Malta and Cyprus.
Further expansion and investment took place at the Hal Far site that now extends to 43,000 square metres, the vast majority of which is already fully utilised and earning storage fees from clients.
This has resulted in the Malta base having a total foot print of 98,000 square metres. The solar farm suspended on the roofs of the Medserv base has been completed and went on line in July 2014. This is expected to yield an average of 2 MWp of electricity annually over the next twenty years.
State of affairs
Group total assets at reporting date stood at €80,836,394 (restated 2013: €58,909,455).
The group‟s short term liquidity position as at 31 December 2014 was 1.2:1 (restated 2013: 4.2:1).
The current assets as at 31 December 2013included cash and cash equivalents raised by the note issue that awaited their investment.
During the reporting year, Medserv p.l.c. issued tranche two of notes amounting to €7,105,000 the purpose of which was to finance the capital projects completed during the year.
During 2014, the Group changed its accounting policy on the recognition and measurement of an emphyteutical grant over industrial property forming part of the Malta Freeport at the Port of Marsaxlokk.
Until 31 December 2013, the Group had been recognising the property rights conferred by virtue of the said grant as an operating lease and measuring these rights at a nominal amount in accordance with International Financial Reporting Standards (IFRS).
On 31 December 2014, the Group elected to recognise the property rights and the grant at fair value, also in accordance with IFRS.
As a result, deferred income and an equivalent non-monetary asset (referred to as, prepaid operating lease) were initially recognised at fair value and subsequently recognised in profit or loss on a systematic basis over the useful life of the asset using the income approach.
The fair value of the non-monetary asset and related deferred income were determined with reference to the valuation of the underlying property rights by an independent professional valuer as at 31 December 2012.
The Group applied the change in accounting policy retrospectively and restated the comparative periods to recognise the fair value of the property rights as at grant date.