RNS No 1995b
CRESTON LAND & ESTATES PLC
30th March 1998
Creston Land & Estates plc
Interim Report 1997/8
Highlights
Half year profit on ordinary activities before taxation of #404,000
compared with #169,000 for the corresponding period of last year.
Net assets per share of 10.77 pence.
Rent roll of #4.2 million and portfolio value of #44.3 million at the half
year end.
Good progress made on several important projects with the potential for
significant future profits.
Following the half year end:
-Creska Limited acquired for #1, but with the fair value of its net
assets in excess of #500,000. Of Creska Limited's portfolio of six
properties, three properties were disposed of shortly after acquisition
for a total of #3.425 million.
-Brighouse Court, Gloucester sold for #4.65 million to produce a useful
trading profit.
-9-11 Grosvenor Gardens acquired for #3.275 million.
Chairman's Statement
I am pleased to report that for the six months ended 31 December 1997 a profit
on ordinary activities before taxation of #404,000 was achieved compared with
#169,000 for the corresponding period of last year. There was no charge for
taxation due to the availability of tax losses and allowances. Earnings per
share amounted to 0.43 pence compared with 0.19 pence last time. Net assets
per share rose to 10.77 pence.
The half year has been a period of considerable activity with good progress
being made on several important projects. The benefit of this activity is not
yet reflected in the group's results, but, as explained below, should begin to
contribute in the second half of this year and in the next financial year.
Following the lease surrender last year by the tenant of the retail warehouse
at Shirley Road, Southampton, part of the premises has been let to Fitness
First Plc for a period of 25 years and the remainder is under offer to a major
covenant for a period of 20 years. On completion of this letting, this
property would produce an annual rental income of #260,000 and would show a
significant surplus over book value.
Steps have been taken to enhance the value of St George's Court, New Malden.
Options to require the existing restaurant tenants to surrender their leases
have been obtained and an agreement for a 35 year lease, which is subject to
receiving planning permission, is expected to be exchanged shortly with SFI
Plc for a Bar Med restaurant. Upon this letting proceeding, significant
additional value would be created after deducting the costs of the
transaction.
Plans for the redevelopment of Premier House, Woking have progressed.
Negotiations are under way to acquire the adjoining site, which, if
successful, would enable a new 42,000 sq ft office building to be constructed
conditional on receiving planning permission. This project will not impact
the current financial year, but if it proceeds it would lead to an
attractive enhancement in value in the medium term.
Following interest by H M Prison Service, a public enquiry was held to
consider the use of Middleton Towers, Morecambe, a former Pontins holiday
camp, as a category C prison. The outcome is expected to be announced in the
near future and, if positive, should lead to the premises being let to H M
Prison Service.
The proposed increased leisure facilities at Dougalston Golf Course progressed
satisfactorily with the local council indicating that they are minded to grant
planning permission subject to a section 75 agreement. The main terms of this
agreement have been settled and the period within which the application may be
called in by the Secretary of State for Scotland will expire shortly. The
property has been sold subject to receiving planning permission and if
completed the transaction would produce a worthwhile contribution.
During the half year the leasehold interest in 26 Grosvenor Gardens was
purchased and it was subsequently decided to carry out a comprehensive
refurbishment. The work is now well under way and is expected to be finished
early in the summer. Demand for office space in the area has increased with
improved rental levels, leading to the prospect of a significant enhancement
in value. In order to benefit further from these higher rental levels, a
neighbouring property, 9-11 Grosvenor Gardens, was recently acquired. This
property consists of 16,500 sq ft of office space, with two mews buildings,
and is let to a single tenant on a short lease.
Following the half year end, Creska Limited ("Creska") was acquired for #1 in
cash, although the directors consider the fair value of Creska's net assets to
be in excess of #500,000. This will lead to a corresponding increase in the
group's net assets at the year end. As planned, three of Creska's six
properties have been sold and the remaining properties in Hammersmith, Durham
and Mansfield are being retained as they possess the potential for further
enhancement in value.
Brighouse Court, Gloucester was sold subsequent to the half year end for #4.65
million to produce a useful trading profit for the second half. Other
disposals currently under negotiation include Royal Mint Street, London E1,
The Redlands Centre, Coulsdon, Surrey and Springhill, Glasgow, all of which
are under offer.
As already announced to the London Stock Exchange, the opportunity has been
taken to repurchase #575,000 nominal of the company's 6% convertible
redeemable unsecured loan stock and 2,374,809 ordinary shares. In the half
year this led to a gain of #145,000 on repurchase of the loan stock.
The outlook for the property sector remains positive with better levels of
demand from occupiers and greater potential for rental growth. Short term
interest rates may have peaked and medium to long term rates are at
attractively low levels. As explained above there are several projects under
way that individually have the potential to create significant additional
value for the group. With the high level of activity reported above the board
is confident of the outlook for the year as a whole.
Ronald G Hooker CBE FEng
Chairman
30 March 1998
Unaudited Consolidated Profit and Loss Account
for the six months ended 31 December 1997
Six months Six months Year
ended ended ended
31 December 31 December 30 June
1997 1996 1997
Notes #000 #000 #000
Turnover 1 2,882 2,394 5,952
Cost of sales (374) (200) (587)
Gross profit 2,508 2,194 5,365
Administrative expenses (646) (735) (1,541)
Operating profit 1,862 1,459 3,824
Profit on disposal of
investment properties - - 424
Profit on ordinary activities
before interest 1,862 1,459 4,248
Net interest payable (1,603) (1,290) (2,591)
Gain arising on repurchase of 6%
convertible redeemable unsecured
loan stock 145 - -
Profit on ordinary activities
before taxation 404 169 1,657
Tax on profit on ordinary activities - - -
Profit for the financial period #404 #169 #1,657
Dividends - - -
Earnings per share 2 0.43p 0.19p 1.8p
Unaudited Consolidated Balance Sheet
at 31 December 1997
31 December 31 December 30 June
1997 1996 1997
Notes #000 #000 #000
Fixed assets
Tangible assets 3 32,533 28,889 29,345
Current assets
Property stocks 11,722 15,624 14,421
Debtors 4 1,846 1,845 3,313
Cash at bank 390 94 355
13,958 17,563 18,089
Creditors: amounts falling due within
one year including convertible debt 5 (4,957) (6,354) (4,178)
Net current assets 9,001 11,209 13,911
Total assets less current liabilities 41,534 40,098 43,256
Creditors: amounts falling due after
more than one year including
convertible debt 6 (31,514) (32,088) (33,452)
Provisions for liabilities and charges (153) (1,058) (153)
Net assets #9,867 #6,952 #9,651
Capital and reserves
Called up share capital 916 940 940
Share premium account 2,541 3,924 2,540
Capital redemption reserve 24 - -
Revaluation reserve 1,420 349 1,420
Special reserve 1,386 1,386 1,386
Other reserve 1,046 (339) 1,046
Profit and loss account 2,534 692 2,319
Total equity shareholders' funds #9,867 #6,952 #9,651
Unaudited Consolidated Cash Flow Statement
for the six months ended 31 December 1997
Six months Six months Year
ended ended ended
31 December 31 December 30 June
1997 1996 1997
#000 #000 #000
Net cash inflow (outflow) from
operating activities 3,580 (7,067) (4,286)
Net cash outflow from returns on
investments and servicing of finance (1,635) (1,073) (3,815)
Capital expenditure and financial investment
Purchase of property (598) (30) (3,296)
Sale of property 40 1,100 4,519
Other (2) - (29)
Net cash (outflow) inflow from capital
expenditure and financial investment (560) 1,070 1,194
Net cash outflow from acquisitions
and disposals - (357) (42)
Net cash inflow (outflow) before
financing 1,385 (7,427) (6,949)
Financing
Issue of share capital 1 300 301
Purchase of own shares (189) - -
New bank loans - 7,111 22,192
Repayment of bank loans (812) (1,896) (16,373)
Repurchase of 6% convertible
redeemable unsecured loan stock (350) - -
Net cash (outflow) inflow from
financing (1,350) 5,515 6,120
Increase (decrease) in cash #35 #(1,912) #(829)
Reconciliation of operating profit to net cash
inflow (outflow) from operating activities
Operating profit 1,862 1,459 3,824
Depreciation 16 13 42
Profit on disposal of plant, vehicles
and equipment - (15) (8)
Decrease (increase) in property stocks 55 (7,993) (6,887)
Decrease (increase) in debtors 1,467 534 (657)
Increase (decrease) in creditors 180 (1,065) (600)
Net cash inflow (outflow) from operating
activities #3,580 #(7,067) #(4,286)
Unaudited Statement of Total Recognised Gains and Losses
for the six months ended 31 December 1997
Six months Six months Year
ended ended ended
31 December 31 December 30 June
1997 1996 1997
#000 #000 #000
Profit for the financial period 404 169 1,657
Transfer of deferred fees to
revaluation reserve - - 1,000
Unrealised surplus on revaluation
of properties - - 210
Total recognised gains and losses
for the period #404 #169 #2,867
Unaudited Reconciliation of Movements in Shareholders' Funds
for the six months ended 31 December 1997
Six months Six months Year
ended ended ended
31 December 31 December 30 June
1997 1996 1997
#000 #000 #000
Total recognised gains and losses
for the period 404 169 2,867
Share issues net of expenses 1 1,831 1,832
Purchase at 7.95p per share and subsequent
cancellation of 2,374,809 of own shares (189) - -
Goodwill on acquisition eliminated - (293) (293)
Net addition to shareholders' funds 216 1,707 4,406
Opening total equity shareholders' funds 9,651 5,245 5,245
Closing total equity shareholders' funds #9,867 #6,952 #9,651
Notes to the Unaudited Interim Results
for the six months ended 31 December 1997
1 Turnover
Six months Six months Year
ended ended ended
31 December 31 December 30 June
1997 1996 1997
#000 #000 #000
Rental income 2,366 2,077 4,719
Property trading 103 - 731
Other income 413 317 502
2,882 2,394 5,952
2 Earnings per share
Earnings per share is based on the profit for the financial period of
#404,000 (1996/7 interim: #169,000; 1996/7 final: #1,657,000) divided by the
weighted average number of shares in issue during the period of 93,550,866
(1996/7 interim: 90,194,460; 1996/7 final: 92,077,423).
3 Tangible assets
Investment
properties Other Total
#000 #000 #000
Cost or valuation:
At 1 July 1997 29,257 301 29,558
Additions 598 2 600
Transfer from trading stock 2,644 - 2,644
Disposals (40) (6) (46)
At 31 December 1997 32,459 297 32,756
Depreciation:
At 1 July 1997 - 213 213
Charge for the period - 16 16
Disposals - (6) (6)
At 31 December 1997 - 223 223
Net book value:
At 31 December 1997 32,459 74 32,533
At 30 June 1997 29,257 88 29,345
4 Debtors
31 December 31 December 30 June
1997 1996 1997
#000 #000 #000
Trade debtors 1,367 1,605 2,831
Other debtors - 53 29
Prepayments and accrued income 271 187 245
Corporation tax 208 - 208
1,846 1,845 3,313
5 Creditors: amounts falling due within one year including convertible debt
31 December 31 December 30 June
1997 1996 1997
#000 #000 #000
Bank and other loans (secured) 1,409 1,953 955
Convertible loan stock 2000 83 314 83
Convertible redeemable unsecured
loan note 177 - -
Trade creditors 1,059 470 896
Rent in advance 1,041 982 1,016
Social security and other taxes 539 1,811 577
Accruals and deferred income 649 824 651
4,957 6,354 4,178
6 Creditors: amounts falling due after more than one year including
convertible debt
31 December 31 December 30 June
1997 1996 1997
#000 #000 #000
Repayable between one and two years:
6% Convertible redeemable unsecured
loan stock 2,489 - 2,983
Convertible redeemable unsecured
loan note - 177 177
Bank and other loans (secured) 830 11,198 1,823
Repayable between two and five years:
6% Convertible redeemable unsecured
loan stock - 2,978 -
Bank and other loans (secured) 8,720 6,049 5,423
Repayable after five years:
Bank and other loans (secured) 19,475 11,686 23,046
31,514 32,088 33,452
The financial information contained in this Interim Report does not
constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985. The statutory accounts for the year ended 30 June 1997
have been reported on by the auditors and delivered to the Registrar of
Companies. The auditors' report was unqualified and did not contain a
statement under section 237(2) or 237(3) of the Companies Act 1985.
A copy of this report will be sent to the holders of ordinary shares and
6% convertible redeemable unsecured loan stock and, for information only,
to the holders of options under the share option scheme. Members of the
public may obtain a copy from the company's registered office, 26
Grosvenor Gardens, Belgravia, London SW1W 0DH.
Enquiries: Carl Fry, Creston
Tel: 0171 823 6766
Fax: 0171 629 0005
END
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