Final Results -2-
25 3월 2009 - 4:00PM
UK Regulatory
which cash represented GBP11.6 million including GBP2.9 million held in escrow.
We certainly live in unusual times.
Windsorville is now not just the largest shareholder but owns a majority of the
shares in the Company. I pointed out in my recent circular to shareholders the
risk of remaining as a shareholder in a Company that may well be delisted and
taken private. Given the risks associated with remaining a minority shareholder
in an unquoted company, your Directors advised shareholders on 20 March 2009 to
accept the Offer, as indeed they have done, or intend to, in respect of their
own shareholdings amounting to 967,936 BPD shares, representing approximately
0.9% of the issued share capital of the Company.
Windsorville has stated its intention to honour the existing employment rights
of all employees of the Bulgarian Property Developments Group. Windsorville
intends to seek the resignation or removal of all or the majority of the BPD
directors and the appointment of such other persons as directors of Bulgarian
Property Developments Plc ("BPD") as Windsorville considers appropriate.
Group Results
The results for the year ended 31 December 2008 show a loss after tax of
GBP357,000 which is in line with expectations. This result includes increased
rental income of GBP1.1 million (2007: GBP0.5 million) from the existing
buildings at the Sofia Central Commercial Site and at Varna. Depreciation on the
existing buildings has been charged in the year for the first time resulting in
a GBP1.4 million charge to expenses. Offsetting this were realised exchange
gains of GBP2.4 million from the conversion of Euros held back into Sterling in
order to pay for the GBP21 million Special dividend. Sterling weakened from
EUR1.36 as at 31 December 2007 to EUR1.02 as at 31 December 2008.
Payment of Special dividend of GBP21 million
Following the cancellation of the Company's share premium account and the
Company having complied with its undertaking to the Court regarding creditor
protection, BPD paid a dividend of 19p per share on 17 July 2008 to shareholders
who were on the share register on 11 July 2008.
Portfolio and Net Asset Value ("NAV")
The portfolio was valued on 31 December 2008 by Colliers CRE at GBP66.2 million.
However, as required under the Takeover Panel rules, BPD had its portfolio
revalued by Colliers CRE as at 27 February 2009 and the valuation at that date
was GBP54.8 million.
The effect of this is that the NAV at 31 December 2008 was 65.1p per share.
Full details of the portfolio are contained within the notes to the financial
statements.
CHAIRMAN'S STATEMENT (continued)
for the year ended 31 December 2008
Sale and purchase of properties with FairPlay and subsequent legal dispute
As shareholders will be aware, FairPlay Commercial EAD ("FPC") has failed to
complete its purchase of our 50% stake in Varna Logistics at the agreed price of
EUR15 million and has launched a court case either to have the contract declared
void and recover the EUR3.9 million deposit that it paid or to have the contract
price unilaterally reduced to EUR9.3 million. Full details of this dispute are set
out in note 25 of the financial statements. Suffice it to say, we are vigorously
resisting these actions and are hopeful of success.
The Sofia Central Commercial Site
This is the Group's most important asset and represents almost half of the value
of the Group's portfolio.
The Group has applied for permission to increase the permitted build area on the
site from 130,000 square metres to in excess of 290,000 square metres. The
rezoning process is substantially complete. The directors believe that
permission should be granted for the increase in density by the end of 2009. The
effect of such an increase in density would be that the value of the site would
increase from the value ascribed to it by Colliers in December 2008 of GBP32.6
million to GBP62.4 million, the increase being equivalent to approximately 27.5p
per BPD share (at year end exchange rate of GBP1: EUR1.026) or, using Colliers'
February valuation, from GBP26.8 million to GBP47.9 million, an increase of
GBP21.1 million or 19.5p per BPD share (at 27 February 2009 exchange rate of
GBP1: EUR1.121).
Sandanski Retail Centre OOD ("SRC")
The Group has acquired the 50% of shares of SRC, which it did not own for a
consideration of EUR900,000.
Trakia Retail Centre OOD ("TRC")
BPD purchased FairPlay International AD's 50% shareholding in TRC, which owned a
site in the city of Plovdiv for EUR3 million (GBP2.9 million) and then sold the
whole site for EUR6 million (GBP5.8 million) realising a gain of GBP0.7 million.
Christian Williams
Chairman
24 March 2009
REPORT OF THE DIRECTORS
for the year ended 31 December 2008
The directors present their report with the financial statements of the Group
for the year ended 31 December 2008.
Principal activity
The principal activity of the Group in the period under review was that of
property development and property trading in Bulgaria. The development of the
Group's business and future prospects are considered in the Chairman's statement
on page 4.
Results and dividends
The audited financial statements for the year ended 31 December 2008 are set out
on pages 11 to 54. The consolidated income statement showing the results for the
period is set out on page 11. Bulgarian Property Developments Plc paid a
dividend of 19p per share on 17 July 2008 to shareholders who were on the share
register on 11 July 2008.
Business review
Review of the Group's development and performance
The Chairman's Report on the preceding page 4 gives a comprehensive review and
assessment of the Group's activities during the period and its position at 31
December 2008 and prospects for the forthcoming year.
Business risk
The Group's returns may be subject to the risks associated with the development
of real estate projects. These risks include: risks relating to project
financing, that a developer becomes unable to fulfil its obligations, that a
suitable developer may not be available, that planning consents are delayed or
not obtained, that the management services from Bulgarian Property Management
Limited and the Group's management teams cease to continue, events affecting any
Joint Venture partner or difficulties in identifying and securing attractive
property investments in Bulgaria.
Other risks identified by the Group include: geographical and political risks
associated with Bulgaria, financial risks such as lack of available funds to
meet the Group's needs, interest rate risk and currency risk (See note 1).
The Group views effective risk management as integral to the day-to-day business
decisions and encourages all its managers to assess risk on a continuous basis.
Future development
Since 5 March, Windsorville is the controlling shareholder of BPD. It is the
current intention of the board of Windsorville that, now that the Offer becomes
unconditional in all respects, will explore options to raise additional capital
for BPD, which may be raised all or in part from Windsorville. The Group will
develop and improve its existing property portfolio.
Environment
The Group is committed to effective environmental management, and regards
regulatory compliance as a minimum standard. In the light of best practice in
the property development industry, the Group will seek to set policies that
match the Groups operations with the increasing need to manage environmental
performance of existing and new developments; including energy and water
consumption, waste management, water and air pollution, and contractor and
tenant awareness.
Key performance indicators (KPI's)
The Group's success is principally measured in terms of the adjusted Net Asset
Value per share. This is based upon the market value of the Group's property
portfolio as valued by a third party valuer, Colliers, London. This allows the
Group's management to monitor the growth in value created as projects are
developed.
The adjusted Net Asset Value is arrived at with reference to the Group's
property assets as valued by Colliers, London, reflecting the actual percentages
held by the Group. To this figure is added its non property assets minus its
total liabilities. In calculating the adjusted Net Asset Value, no provision is
made for tax that may arise on a sale at that value. Please refer to the
Chairman's statement for details of the Group's performance in respect of this
KPI.
REPORT OF THE DIRECTORS (continued)
for the year ended 31 December 2008
Directors
The directors during the period were:
C D L Williams
I L G Hesmondhalgh
P A Pashov
K J Springall
J S Mackay
N K Galchev
R N Galtcheva (alternate)
Following Windsorville Investments Limited becoming the owner of the majority of
the shares in the Company, it is expected that Mr. Richard McGuire and Mr. Marek
Piwek will be appointed as directors of the Company and that all, or the
majority, of the current board will step down. In accordance with the Company's
articles of association, it is expected that both Mr. Richard McGuire and Mr.
Marek Piwek will retire from office at the Annual General Meeting, being the
first such meeting following their appointment and, being eligible, each will
offer themselves for re-appointment.
The interests of the directors holding office at 31 December 2008 in the issued
share capital of the Company are as follows:
+---------------------------------------------+----------------+----+----------------+
| | 31 December | | 31 December |
| | 2008 | | 2007 |
+---------------------------------------------+----------------+----+----------------+
| | Ordinary 25p | | Ordinary 25p |
| | shares | | shares |
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