RNS Number:1779W
Warner Estate Holdings PLC
20 December 2000
The Warner Estate Holdings Plc announcement released on 19 December 2000
at 11:00 under RNS No 0529W should read 2nd Interim Results - Part 1, and not
Final Results - Part 1, as previously stated.
The full text shown below remains unchanged.
--------------------------------------------------------------------------------
Part 1
Warner Estate Holdings PLC
WARNER ESTATE REPORTS SECOND INTERIMS
Warner Estate Holdings PLC ("Warner"), the property investment company, has
today announced its second interim results for the twelve months ended 30
September 2000.
The next financial reporting period will be for the 18 months ending 31st
March 2001. The new year-end will make the Company's results more readily
comparable to other property companies as they will be published during the
main reporting period for the quoted property sector.
Highlights
* #97 million portfolio acquired from Winglaw Group
* Considerable interest in Walthamstow residential portfolio
* Second interim dividend per share up to 9.40p (1999: 9.10p)
* NAV up 11.6% to 386p (1999: 346p)
Philip Warner, Executive Chairman of Warner commented,
" Warner is evolving into a more transparent property company. Our strategy
is to focus on well located, larger properties in the South East of England.
Our new year end will enable us to be more easily comparable with our
quoted property company peers."
For further information contact:
Philip Warner, Chairman Warner Estate Holdings PLC 020-7487-3312
Peter Collins, Finance Director Warner Estate Holdings PLC 020-7487-3312
Web: www.warnerestate.co.uk
Simon Courtenay City Profile Group 020-7726-8588
CHAIRMAN'S STATEMENT
Financial Overview
I am pleased to report an increase in net asset value per share of 11.6 % to
386p at 30th September 2000 (1999: 346p) following a full property revaluation
for this second interim stage. The increase was due to our residential assets
and retained profits.
Our pro forma net asset value, which includes the relevant net asset value of
other property businesses in which we have invested, rose to 422p (1999:
361p). However, with the announcement by BPT plc on 4th December 2000 that it
had entered into a period of exclusive negotiations with a third party
consortium with a view to agreeing a cash offer for the shares of BPT, that
figure should be treated with caution while we await the outcome. Our 13 per
cent shareholding in BPT, valued in the balance sheet on 30th September at
#55.5 million, is by far the largest of our investments in other property
businesses.
Pre-tax profits, both total and revenue (which exclude profits and losses on
fixed asset disposals), were lower at #10.86 million (1999: #12.95 million)
and #9.41 million (1999: #9.89 million) respectively. Profits from the sale of
fixed assets inevitably fluctuate from year to year. The reduction in revenue
profits was due to a number of factors, the most significant being provisions
of #0.7 million against the cost of properties held as current assets.
Provisions aside, a valuation of those current assets by the directors shows a
surplus of #1.3 million over the figure in the balance sheet not reflected in
any NAV figure.
Earnings per share were 17.80p (1999:20.84p) in total and 15.09p (1999:
15.63p) in revenue terms.
The Board has declared a second interim dividend per share of 9.40p (1999:
9.10p), making a total for the financial period to date of 14.00p (1999:
13.60p) covered 1.3 times. This dividend will be paid on 9 April 2001 to
shareholders on the register at close of business on 9 March 2001.
As announced on 25th September 2000, the Company's next financial reporting
period will be for the 18 months ending 31st March 2001. An Annual General
Meeting will be held in May 2001 to comply with statute and an Extraordinary
General Meeting in July 2001 at which the accounts will be presented. The new
year-end should make the Company's results more readily comparable to other
property companies as they will be published during the main reporting period
for the quoted property sector.
Portfolio
Expansion and restructuring of the commercial investment portfolio has been
sustained throughout the period. After sales and purchases of #8.3 million
and #72.2 million respectively and the inclusion of both our development at
Watford and our former joint venture at Sale, Healey & Baker have valued it at
#261 million (1999: #162 million). Recent acquisitions together with Watford
and Sale account for #107 million of this figure and the balance of the
portfolio showed a small rise. Restructuring continues and we expect the
effects to show through by way of increased values in 2001 through our
emphasis on increasing exposure to South East offices and industrials.
The pace of lettings has been disappointingly slow at the Waterfields Retail
Park, Watford, our 75,000 sq. ft. of retail warehouse development. However,
demand has picked up and, following the appointment of new letting agents, I
expect to report better news following our March 18 month year-end.
Trading activity in support of the portfolio restructuring has contributed
significantly to profits, most notably disposals from the Winglaw Group
properties acquired in March of this year. After sales and purchases of #33.1
million and #26.2 million respectively, properties held as current assets
totalled #37.0 million after provisions at the period end (1999: #44.6
million).
On 19th June the Board announced a review, intended to gauge interest in the
Group's residential estate in Walthamstow, London E.17, which might or might
not lead to disposal. I am pleased to report that there was considerable
interest. We have just completed a corporate restructuring, which puts us in
a position to dispose of either the residential estate or our interest in BPT
or both more efficiently. We now intend to further the interest in the estate
with a view to negotiations for sale commencing shortly. During the review
and restructuring, there were fewer sales of vacant properties and
consequently less capital profit during the period than would otherwise have
been the case. The directors have valued the residential portfolio and the
substantial uplift to #52 million (1999: #42 million) reflects the strong rise
seen in the market as well as the value of retained properties.
Joint Ventures
In July we purchased our partner's 50% share of Six Acre Investments Limited,
which owns a shopping centre and office block in Sale, Greater Manchester. The
property has been transferred to our investment portfolio and we intend to
refurbish the shopping centre.
Deferral of sales at Trade Centre Developments has held back profits for the
period. However, we remain optimistic about the prospects for this company,
which specialises in the development of trade parks.
Finance
Borrowings increased during the 12 month period from #132 million to #219
million and gearing from 75% to 109%, down from 134% at the first interim.
We ceased capitalising interest on expenditure at Watford in February.
As at 30th September the Group had #57.0 million of unutilised borrowing
facilities.
Personnel
As announced on 6th December Jim Neill has resigned as Property Director. He
leaves the Group by mutual agreement on 22nd December 2000 and we shall be sad
to see him depart. However, our property team was strengthened in July with
the arrival of Richard Moore FRICS from NatWest as an Associate Director and
Mike Stevens ARICS from Celexa as Senior Asset Manager. They join Karl Meade
ARICS, Associate Director in charge of disposals, and I am confident that,
supported by their staff, continuing progress will be made.
Prospects
The Company's year-end in March should see the emergence of a more transparent
Warner Estate. Diversity has served us well but the focus in recent years has
been on the commercial investment portfolio and other facets of the Group have
sometimes clouded the view. We have been reducing the number of joint ventures
and departure from the residential sector both directly and indirectly seems
increasingly likely. We subscribe to the increasing importance put on
benchmarking by shareholders and commentators alike and my year-end statement
will report fully both on strategy and performance.
The economic climate appears benign for our continued expansion with the
prospect of low interest rates and steady growth although we shall be keeping
a weather eye on the United States for signs of any downturn or credit
squeeze, which may translate over here.
I am confident that the combination of an improving commercial portfolio with
positive economic indicators bodes well for the Group's fortunes in 2001.
Philip Warner
Chairman
CONSOLIDATED PROFIT & LOSS
For the twelve months ended 30
September 2000
Unaudited Audited
--------- -------
Notes 2000 1999
--------- -------
#'000 #'000
Turnover: Group and share of
joint ventures and associate 69,574 51,639
less: Share of joint ventures
and associate (10,589) (7,101)
--------- -------
Turnover 2 58,985 44,538
Cost of sales and other property
outgoings (36,897) (30,072)
--------- -------
Gross profit 2 22,088 14,466
Administrative expenses (1,761) (1,479)
--------- -------
Group operating profit 2 20,327 12,987
Share of operating profit in:
-------------------
Joint ventures 2 788 1,632
Associate 2 1,479 965
-------------------
2,267 2,597
--------- -------
Total operating profit 22,594 15,584
Profit on sale of fixed assets 3 1,448 3,064
Investment income 2,885 2,604
--------- -------
Profit on ordinary activities
before interest 26,927 21,252
Net interest payable and similar
charges 4 (16,072) (8,300)
--------- -------
Profit on ordinary activities
before taxation 10,855 12,952
Taxation on profit on ordinary
activities 5 (1,658) (2,298)
--------- -------
Profit on ordinary activities
after taxation 9,197 10,654
Dividends (7,259) (6,955)
--------- -------
Retained profit 1,938 3,699
_________ _______
Earnings per share 6
p p
Revenue 15.09 15.63
Capital 2.71 5.21
--------- -------
17.80 20.84
_________ _______
Fully diluted earnings per share 6
Revenue 15.07 15.62
Capital 2.71 5.20
--------- -------
17.78 20.82
_________ _______
CONSOLIDATED BALANCE SHEET
At 30 September 2000
Unaudited Audited
--------- -------
Notes 2000 1999
------ -------- -------
#'000 #'000
Fixed Assets
Tangible Fixed Assets
Investment Properties 7 314,300 216,555
Other Tangible Assets 311 389
--------- -------
314,611 216,944
Joint Ventures 8
--------- -------
Share of gross assets 7,298 21,006
Share of gross liabilities (5,273) (17,671)
Loan accounts 2,179 9,153
--------- -------
4,204 12,488
Investments 79,290 67,761
--------- -------
398,105 297,193
--------- -------
Current Assets
Property stock 37,027 44,562
Debtors 7,491 12,325
Investments 302 309
Cash at bank and in hand 19,939 843
--------- -------
64,759 58,039
Current Liabilities
Creditors: amounts falling due
within one year (101,829) (131,733)
--------- -------
Net Current Liabilities (37,070) (73,694)
--------- -------
Total Assets less Current
Liabilities 361,035 223,499
Creditors: amounts falling due
after one year (158,990) (46,354)
Provision for liabilities and
charges (573) (261)
--------- -------
Net Assets 201,472 176,884
--------- -------
Capital and Reserves
Called up share capital 2,610 2,560
Other reserves 190,775 166,776
Profit and loss account 8,087 7,548
--------- -------
Equity Shareholders' Funds 201,472 176,884
--------- -------
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the twelve months ended 30 September 2000
Unaudited Audited
--------- -------
2000 1999
#'000 #'000
--------- -------
Profit on ordinary activities after taxation 9,197 10,654
Unrealised surplus on revaluation of properties 12,200 13,027
Unrealised surplus on revaluation of investments 8,981 6,323
Tax on realisation of revalued properties (655) 199
Increase in deferred tax provided on investment
properties for sale (286) (202)
--------- -------
Total recognised gains relating to the period 29,437 30,001
--------- -------
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
Unaudited Audited
--------- -------
2000 1999
--------- -------
#'000 #'000
Profit on ordinary activities after taxation 9,197 10,654
Dividends (7,259) (6,955)
--------- -------
1,938 3,699
New share capital issued 2,410 -
Other recognised gains and losses 20,240 19,347
--------- -------
Net increase in shareholders' funds 24,588 23,046
Opening shareholders' funds 176,884 153,838
--------- -------
Closing shareholders' funds 201,472 176,884
_________ _______
CONSOLIDATED CASH FLOW STATEMENT
For the twelve months ended 30 September 2000
Unaudited Audited
--------- -------
2000 1999
--------- -------
#'000 #'000
Net cash inflow from operating activities 7,818 10,464
Dividends received from joint ventures and
associate 1,392 105
Returns on investments and servicing of
finance (10,078) (4,316)
Taxation (2,142) (1,155)
Capital expenditure and financial
investments (67,322) (46,497)
Acquisitions and disposals (2,166) (765)
Equity dividends paid (6,948) (6,750)
--------- -------
Net cash outflow before financing (79,446) (48,914)
--------- -------
Financing
Loan movements 102,665 (1,460)
Issue of shares 2,410 -
--------- -------
Increase/(decrease) in cash 25,629 (50,374)
_________ _______
RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW
Operating profit 20,327 12,987
Depreciation of tangible fixed assets 234 176
Profit on sale of other tangible fixed assets - (6)
Decrease/(increase) in stocks 7,535 (24,304)
Decrease in current asset investment 17 21
Decrease/(increase) in debtors 5,328 (7,262)
(Decrease)/increase in creditors (25,623) 28,852
--------- -------
Net cash inflow from operating activities 7,818 10,464
_________ _______
MORE TO FOLLOW
IR EASAEADEEFFE
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