RNS Number : 0381J
Warner Estate Holdings PLC
27 November 2008
Warner Estate Holdings PLC
FOCUS ON IMPROVING SECURITY AND QUALITY OF INCOME
Warner Estate Holdings PLC ("Warner Estate" or "Group"), the property investment and management company has today announced its
preliminary results for the half year ended 30 September 2008.
Financial Summary
* Revenue �23.5million (September 2007: �21.9million)
* Recurring profit before performance fees �5.7million (September 2007: �5.1million)
* Realised pre-tax profit �3.6million (September 2007: �11.2million)(i)
* Loss before income tax �124.7million (September 2007: �7.7million)
* Net asset value per share 316p (March 2008: 549p)
* Adjusted net asset value per share 320p (March 2008: 557p)(ii)
* Losses per share 222.0p (September 2007: 10.7p losses)
* Recurring post-tax earnings per share 7.1p (September 2007: 9.2p)(iii)
Key Business Events
* �60 million of revolving borrowing facilities renewed for three years and the loan to value covenant on a further �325million of
facilities increased to 80%
* Completion of development at Market Hall, Bolton (Agora joint venture) in September 2008
* Life of Ashtenne Industrial Fund, together with asset management agreement, extended to 2016
* Compulsory purchase order made on the Pallasades shopping centre, Birmingham by Birmingham City Council
* Formal development agreement for town centre regeneration project exchanged with Aylesbury District Council
* Finance Director succession confirmed
(i) Realised pre tax profit includes share of joint venture pre-tax results and is before fair value movements
(ii) Adjusted for deferred tax on fair value gains and fair value adjustments on fixed rate debt
(iii) Adjusted for fair value movements, profits and losses on sale of investment properties and other one-off items
Philip Warner, Chairman of Warner Estate commented
"We are concentrating on those areas which we can control, namely, improving our income, reducing our costs and maximising our cash. We
are being proactive in meeting the challenge of falling values and remain in compliance with our banking covenants."
Date: 27 November 2008
For further information contact:
Warner Estate Holdings PLC City Profile
Philip Warner, Chairman Simon Courtenay
Mark Keogh, Finance Director Tel: 020-7448-3244
Michael Stevens, Property Director
Tel: 020-7907-5100
Web: www.warnerestate.co.uk
CHAIRMAN'S STATEMENT
The property sector continues to face significant challenges and the Group is not immune from these, particularly the impact of falling
property values. Against this background our interim results also reflect the strength of our business model, with its focus on income
generation, which will benefit from cuts in Base Rate as they flow through to LIBOR. We shall continue to concentrate on those areas which
we can control, primarily, improving the security and quality of our income streams, reducing our property, support and interest costs and
maximising our cash collection through close contact with our tenants. Our void levels are low and we have no exposure to development. We
maintain a strong working relationship with our bank partners and the Group remains in compliance with both its income cover and loan to
value banking covenants. However the Board is ever mindful of the risks facing the business in the current climate and the ongoing
uncertainties in our industry. We are being proactive in meeting these challenges and we are confident that by taking appropriate actions, including disposals and securing uncharged assets, we shall
mitigate the risks as far as possible. In particular, in order to conserve cash and reduce debt over the coming months, we have decided not
to pay an interim dividend this year. As a REIT, the Group is statutorily required to distribute at least 90% of the profits of its property
rental business by way of a dividend, known as a Property Income Distribution ('PID'), which last year was 17.5pence per share, and we shall
meet this requirement in respect of the full financial year.
Results Overview
Recurring profit before tax for the period was �5.7million compared to �5.1million for the equivalent period last year. However, due to
reduced property values, the Group made a pre tax loss of �124.7million (September 2007: �7.7million). Net asset value per share fell from
549p at 31st March 2008 to 316p and adjusted net asset value from 557p to 320p.
The first half of the year has benefitted from cost savings of �0.6million, confirming that the Group is on track to deliver the
�1.5million of annualised savings referred to in our 14 August Interim Management Statement. We shall be seeking further reductions in costs
with a view to at least doubling those annualised savings during the next financial year. Cash collection has improved for the fourth
quarter in succession with 98.2 % of the September quarter day rents collected within 28 days. There was a net cash outflow of �2.1million
in the six month period following the injection of �7.0million into the Group's joint venture Agora Max, which outweighed the positive cash
flow from operations and net property sales.
Property Review
The relative performance of the Group's property has held up well. Our equity portfolio of �971million outperformed the IPD Monthly
Index benchmark for the first six months of the year. Standing investments fell in value by 9.8%, outperforming the benchmark fall of 10.0%,
and estimated rental value (ERV) grew by 1.0% to �81.5 million, compared with the benchmark decline of 0.4%. The Group has no
disproportionate exposure to any particular tenant. The Government is our largest tenant at 3% of rental income.
The net initial yield of our equity portfolio moved out 59 basis points to 6.36% and equivalent yield moved out 84bps to 7.30%.
Well over 90% of the equity portfolio is occupied with a void rate of 6.7% by ERV, compared with the IPD benchmark of 9.3%. The weighted
average lease expiry across the portfolio is 8.6 years compared to 7.0 years in September 2007.
In July, the life of the Ashtenne Industrial Fund, together with our contract to asset manage it, was extended to 2016. In September,
the development at Market Place, Bolton, was opened with over 70% of the space let, thereby completing our current development programme.
Finance Review
Revenue at �23.5million is over 7% ahead of September 2007 (�21.9million). However, this is marginally below the second half of the
prior financial year due to disposals of non-core investments. Recurring operating profit increased to �15.6million (2007: �13.8million)
whilst interest increased to �9.9million (2007: �8.7million) reflecting the relative increase in LIBOR. However, interest has fallen from
�10.8million, for the second half of last year, due to prudent treasury management.
Net debt has increased during the period by �2.0million to �348.7million (March 2008: �346.7million). Joint venture debt, which is non
recourse, was �332million. It remains our intention to reduce debt through, inter alia, the continuing programme of sales. Disposals totaled
�10.4million in the first half and substantially more are expected in the second half with �9.0million already achieved.
The Group's facilities remain at �415million with an average loan to value covenant of 79% compared to 75% as at March 2008. The cost of
increasing the loan to value covenants has been reduced by entering into a further �50million hedge at 3.08% effective from 28 November
2008. The combination of hedges that the Group has in place together with recent falls in LIBOR bring the average interest rate to 4.71 %
compared to 5.84% as at March 2008. Taking into account the �25million callable swap at 4.4% that comes into effect from 31 December 2008
and the �25million callable swap at 3.84% effective from 31 March 2009 the Group will be hedged to 99%.
Earlier this month Peter Collins stepped down as Finance Director. Since he joined the Group ten years ago, Peter has played a huge part
in building the business, effecting the conversion to a REIT and, more recently, navigating through stormy waters. On behalf of
shareholders, I thank him for his invaluable contribution.
Strategy and Outlook
In line with being a REIT, the Group's strategy remains to deliver recurring profit growth through improving the quality and security of
its income and judicious management of costs. It is income which is important, the more so in uncertain circumstances, and although values
are likely to continue to fall into 2009, the Group remains confident that it can continue to outperform the IPD index by focusing on the
asset management basics of revenue enhancement.
We are reducing costs through a structured review programme covering our processes, systems and organisation and we are on track to
deliver annualised net savings of �1.5million by the end of this financial year, with more to follow in the next.
The financial markets are beginning to show the first signs of thawing out with the recent base rate changes feeding through to LIBOR;
every 50bps movement in LIBOR reduces the Group's interest charge by �1million. However, uncertainty lies in the impact the likely economic
recession will have on the occupational market. This may give rise to a significant cash management challenge, particularly in retail. The
strength of the Group's cash management processes, systems and tenant knowledge will be of considerable benefit, particularly the economies
of scale and expertise arising from the collection of a total managed rent roll of �185million per annum.
Discussions with our relationship banks have commenced regarding the renewal of those facilities reaching maturity in 2010 and 2011. The
�30million facility maturing in January 2009 is not being utilised and will not be renewed. Continuous dialogue with our banks has allowed
us to increase loan to value covenants to provide a level of insurance against further falls in investment values, although further actions
have been initiated to ensure we continue to remain in compliance with our banking covenants. Equally important are our income cover
covenants and the recent changes in LIBOR have increased significantly the Group's headroom in relation to these.
The property market is a challenging environment but I am confident that the actions we are taking to reduce debt and costs, whilst
maintaining income flows, will allow the Group to weather these difficult times.
Philip Warner
Chairman
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 September 2008
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
Notes 30 September 2008 30 September 2007 31 March
2008
�m �m �m
Revenue 23.5 21.9 46.1
Rental and similar income 15.5 13.0 28.7
Property expenses (5.5) (2.2) (5.8)
Service charge and similar 2.3 1.7 4.3
income
Service charge expense and (2.9) (2.3) (5.1)
similar charges
Net rental income 2 9.4 10.2 22.1
Revenue from asset management 5.7 7.2 13.1
activities
Cost of sales of asset (4.6) (6.2) (12.6)
management activities
Net income from asset 2 1.1 1.0 0.5
management activities
Administrative expenses (0.5) (1.3) (2.0)
Operating profit before net 2 10.0 9.9 20.6
gains on investments
Net loss from fair value 8 (49.7) (11.4) (50.7)
adjustments on investment
properties
Net loss from fair value 10/11 (31.1) (1.3) (25.2)
adjustment on investments
(Loss) / profit on sale of (0.6) 6.3 8.1
investment properties
Profit on sale of finance - 0.1 0.1
lease assets
Operating (loss) / profit (71.4) 3.6 (47.1)
Finance income 3 4.5 3.7 7.5
Finance expense 4 (10.7) (9.4) (21.2)
Change in fair value of (0.4) 0.5 (1.9)
derivative financial
instruments
Share of joint ventures' post 9 (46.7) (6.1) (60.8)
tax losses
Loss before income tax (124.7) (7.7) (123.5)
Taxation - current 5 (1.8) 1.0 2.9
Taxation - deferred 5 3.0 0.7 7.1
Loss for the period (123.5) (6.0) (113.5)
p p p
Basic losses per share 7 (222.03) (10.67) (203.61)
Fully diluted losses per share 7 (217.52) (10.52) (200.99)
UNAUDITED CONSOLIDATED BALANCE SHEET
Notes Unaudited Unaudited Audited
At At At
30 September 2008 30 September 2007 31 March
2008
�m �m �m
ASSETS
Non-current assets
Goodwill 11.3 11.3 11.3
Investment properties 8 403.7 482.6 458.6
Properties under the course of - 24.9 -
development
Plant and equipment 0.4 0.5 0.5
Investments in joint ventures 9 50.3 145.4 90.0
Investments in funds 10 76.5 119.5 98.9
Investments in listed and 11 1.1 13.1 9.8
unlisted shares
Net investment in finance 3.8 3.8 3.8
leases
Deferred income tax assets 12 1.3 0.6 1.9
Derivative financial assets 1.3 1.1 0.6
Trade and other receivables 1.4 - 0.6
551.1 802.8 676.0
Current assets
Trade and other receivables 19.9 36.1 27.5
Current income tax assets - - 1.2
Cash and cash equivalents 15.8 25.2 55.5
35.7 61.3 84.2
Total assets 586.8 864.1 760.2
LIABILITIES
Non-current liabilities
Borrowings, including finance (367.7) (300.2) (350.5)
leases
Trade and other payables (7.7) (12.2) (9.9)
Derivative financial (3.3) (0.3) (2.2)
liabilities
Deferred income tax 12 (2.6) (10.9) (6.2)
liabilities
Retirement benefit obligations (0.2) (0.2) (0.1)
Provisions for other 13 (1.3) (3.3) (1.4)
liabilities and charges
(382.8) (327.1) (370.3)
Current liabilities
Borrowings, including finance (0.5) (88.1) (55.5)
leases
Trade and other payables (23.6) (27.1) (26.0)
Current income tax liabilities (0.6) (0.9) -
Provisions for other 13 (3.9) - (3.2)
liabilities and charges
(28.6) (116.1) (84.7)
Total liabilities (411.4) (443.2) (455.0)
Net assets 175.4 420.9 305.2
EQUITY
Capital and reserves
attributable to the Company's
equity holders
Share capital 14 2.8 2.8 2.8
Reserves 14 173.8 416.7 303.6
Investment in own shares 14 (1.2) (1.1) (1.2)
Equity shareholders' funds 175.4 418.4 305.2
Minority interest 16 - 2.5 -
Total equity 175.4 420.9 305.2
UNAUDITED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
For the six months ended 30 September 2008
Unaudited Unaudited Audited
6 months ended 6 months Year
30 September 2008 ended ended
30 September 2007 31 March
2008
�m �m �m
Loss for the period (123.5) (6.0) (113.5)
attributable to equity
shareholders
Actuarial (losses) / profit on (0.1) 0.1 0.2
retirement benefit obligations
Deferred tax arising on - - (0.1)
retirement benefit obligations
Total recognised income and (123.6) (5.9) (113.4)
expense for the period
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 September 2008
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 September 2008 30 September 2007 31 March
2008
�m �m �m
Opening equity shareholders' 305.2 432.7 432.7
funds
Share premium on shares issued - 0.1 0.3
Acquisition of investment in - (0.3) (0.5)
own shares
Disposal of investment in own - - 0.1
shares
Cost of share based payments 0.1 0.1 0.8
Deferred tax arising on share - (0.6) (0.8)
based payments
Acquisition of treasury shares - (1.5) (1.5)
305.3 430.5 431.1
Total recognised income and (123.6) (5.9) (113.4)
expense for the period
Dividend paid in period (6.3) (6.2) (12.5)
Closing equity shareholders' 175.4 418.4 305.2
funds
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 September 2008
Notes Unaudited Unaudited Audited
30 September 2008 30 September 2007 31 March
2008
�m �m �m
Cash flows from operating
activities
Cash (outflows) / inflows from 15 4.4 (10.3) 6.9
operations
Interest paid (10.7) (9.2) (20.9)
Interest received 0.4 1.0 2.1
UK Corporation tax received - 2.3 0.4
Net cash outflow from (5.9) (16.2) (11.5)
operating activities
Cash flows from investing
activities
Purchase of investment (5.5) (106.5) (112.2)
properties and related capital
expenditure
Sale of investment properties 19.6 46.1 62.5
Purchase of plant and - (0.1) (0.1)
equipment
Loans to joint ventures (7.0) - -
Dividends received from funds 3.3 2.8 6.0
Dividends received from joint - - 0.8
ventures
Net cash inflow / (outflow) 10.4 (57.7) (43.0)
from investing activities
Cash flows from financing
activities
Issue of shares - 0.1 0.3
Purchase of own shares for - (0.3) (0.2)
AESOP scheme
Disposal of own shares for 0.1 - 0.1
share option scheme
Purchase of treasury shares - (1.5) (1.5)
Dividends paid (6.3) (6.2) (12.6)
Increase in bank loans - 7.4 8.8
Repayment of bank loans (0.4) (14.4) (41.2)
Net cash outflow from (6.6) (14.9) (46.3)
financing activities
Net decrease in cash and cash (2.1) (88.8) (100.8)
equivalents*
Cash and cash equivalents at (321.5) (220.7) (220.7)
beginning of period
Cash and cash equivalents at (323.6) (309.5) (321.5)
end of period
* Includes overdraft facility balances shown in borrowings
UNAUDITED NOTES TO THE FINANCIAL STATEMENTS
1. accounting policies
Basis of preparation
The unaudited interim consolidated financial statements of the Group for the six months to 30 September 2008 have been prepared in
accordance with Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 Interim Financial Reporting, as
adopted by the EU, and on the basis of accounting policies set out in the Group's Annual Report and Accounts for the year ended 31 March
2008.
These unaudited interim consolidated financial statements do not comprise statutory accounts within the meaning of Section 240 of the
Companies Act 1985.
The unaudited interim consolidated financial statements should be read in conjunction with the statutory accounts for the year ended 31
March 2008 that have been delivered to the Registrar of Companies and include an audit report which was unqualified and did not contain a
statement under either Section 237(2) or 237(3) of the Companies Act 1985. This includes the principle risks and uncertainties on page 62 of
the Annual Report and Accounts and these have remained valid.
These unaudited interim consolidated financial statements have been prepared on a going concern basis, which assumes the Group will
continue to be able to meet its liabilities when they fall due, for the foreseeable future. The Directors have produced profit forecasts and
cash flow forecasts which indicate that the Group can continue as a going concern. In preparing those forecasts, the Directors have taken
into account the following key business risks and uncertainties:
* The current general uncertainties facing the property industry regarding the financial and economic markets;
* The increased pressure to remain in compliance with our banking covenants due to adverse movements in property valuations;
* The possibility of not achieving our property sales programme; and
* The possibility of not being able to bring in as additional bank security certain uncharged assets.
Having taken these uncertainties into account, the Directors believe it is appropriate to prepare the accounts on a going concern basis,
as they believe the Group will remain within its banking covenants. Accordingly, the unaudited interim consolidated financial statements do
not include the adjustments that would result from a failure to remain a going concern.
2. segmental reporting
business segments
For management purposes the Group is organised into two operating divisions, Property Investment and Asset Management:
Property Investment Asset Management Unallocated and Total
other activities
�m �m �m �m
Six months to 30 September
2008 (unaudited)
Rental and similar income 15.5 - - 15.5
Property management expenses (5.5) - - (5.5)
Service charge and similar 2.3 - - 2.3
income
Service charge expense and (2.9) - - (2.9)
similar charges
Net rental income 9.4 - - 9.4
Revenue from asset management
activities
Management fee income - 6.6 - 6.6
Performance fee provision - (0.9) - (0.9)
- 5.7 - 5.7
Asset management expenses - (4.6) - (4.6)
Administrative expenses (0.2) (0.3) - (0.5)
Operating profit / (loss) 9.2 0.8 - 10.0
before net gain on investments
Net loss from fair value (49.7) - - (49.7)
adjustments on investment
properties
Net loss from fair value - - (31.1) (31.1)
adjustments on investments
Profit on sale of investment (0.6) - - (0.6)
properties
Operating profit / (loss) (41.1) 0.8 (31.1) (71.4)
Total assets 417.0 19.4 150.4 586.8
Total liabilities excluding borrowings and (26.9) (0.4) (15.9) (43.2)
finance leases
Borrowing, including finance leases (3.7) - (364.5) (368.2)
Net assets / (liabilities) 386.4 19.0 (230.0) 175.4
Other segment items:
Capital expenditure 5.8 - - 5.8
Depreciation - - 0.1 0.1
2. segmental reporting (cont.)
Property Investment Asset Management Unallocated and Total
other activities
�m �m �m �m
Six months to 30 September
2007 (unaudited)
Rental and similar income 13.0 - - 13.0
Property management expenses (2.2) - - (2.2)
Service charge and similar 1.7 - - 1.7
income
Service charge expense and (2.3) - - (2.3)
similar charges
Net rental income 10.2 - - 10.2
Revenue from asset management
activities
Management fee income - 7.2 - 7.2
Performance fee income - - - -
- 7.2 - 7.2
Asset management expenses - (6.2) - (6.2)
Administrative expenses (0.3) (1.0) - (1.3)
Operating profit / (loss) 9.9 - - 9.9
before net gain on investments
Net loss from fair value (11.4) - - (11.4)
adjustments on investment
properties
Net loss from fair value - - (1.3) (1.3)
adjustments on investments
Profit on sale of investment 6.3 - - 6.3
properties
Profit on sale of finance 0.1 - - 0.1
lease assets
Operating profit / (loss) 4.9 - (1.3) 3.6
Total assets 531.6 23.1 309.4 864.1
Total liabilities excluding borrowings and (28.0) (6.8) (20.1) (54.9)
finance leases
Borrowing, including finance leases (3.8) - (384.5) (388.3)
Net assets / (liabilities) 499.8 16.3 (95.2) 420.9
Other segment items:
Capital expenditure 7.8 - - 7.8
Depreciation - - 0.1 0.1
2. segmental reporting (cont.)
Property Investment Asset Management Unallocated and Total
other activities
�m �m �m �m
Year ended 31 March 2008
(audited)
Rental and similar income 28.7 - - 28.7
Property management expenses (5.8) - - (5.8)
Service charge and similar 4.3 - - 4.3
income
Service charge expense and (5.1) - - (5.1)
similar charges
Net rental income 22.1 - - 22.1
Turnover from asset management
activities
Management fee income - 14.0 - 14.0
Performance fee income - 0.7 - 0.7
Performance fee provision - (1.6) - (1.6)
- 13.1 - 13.1
Asset management expenses - (12.6) - (12.6)
Administrative expenses (0.4) (1.6) - (2.0)
Operating profit / (loss) 21.7 (1.1) - 20.6
before net gain on investments
Net loss from fair value (50.7) - - (50.7)
adjustments on investment
properties
Net loss from fair value - - (25.2) (25.2)
adjustments on investments
Profit on sale of investment 8.1 - - 8.1
properties
Profit on sale of finance 0.1 - - 0.1
lease assets
Operating loss (20.8) (1.1) (25.2) (47.1)
Total assets 477.7 19.3 263.2 760.2
Total liabilities excluding borrowings and (26.8) (1.8) (20.4) (49.0)
finance leases
Borrowing, including finance leases (3.8) - (402.2) (406.0)
Net assets / (liabilities) 447.1 18.4 (160.3) 305.2
Other segment items:
Capital expenditure 14.2 - - 14.2
Depreciation - - 0.2 0.2
All turnover and operating profit has arisen from continuing operations.
3. finance income
Unaudited Unaudited Audited
6 months ended 6 months Year
30 September 2008 ended ended
30 September 2007 31 March 2008
�m �m �m
Income from investments
Distributions from funds 3.7 2.9 6.1
3.7 2.9 6.1
Interest receivable and
similar income:
From joint ventures 0.4 0.3 0.6
Other interest 0.4 0.5 0.7
Other finance income
Expected return on pension 0.2 0.2 0.4
scheme assets
Interest on pension scheme (0.2) (0.2) (0.3)
liabilities
- - 0.1
4.5 3.7 7.5
4. finance expense
Unaudited Unaudited Audited
6 months ended 6 months Year
30 September 2008 ended ended
30 September 2007 31 March 2007
�m �m �m
Interest payable on loans and 10.2 9.9 21.3
overdrafts
Charges in respect of cost of 0.4 0.2 0.8
raising finance
10.6 10.1 22.1
Less: Interest capitalised - (0.8) (1.2)
10.6 9.3 20.9
Interest payable under finance 0.1 0.1 0.3
leases
10.7 9.4 21.2
5. taxation
The taxation charge for the period has been estimated from the expected taxable profits of the Group after taking account of capital
allowances available.
6. dividends
Unaudited Unaudited Audited
6 months ended 6 months ended Year
30 September 2008 30 September 2007 ended
31 March 2008
�m �m �m
On Ordinary 5p shares
Final 11.25p at 31 March 2008 6.3 - -
paid 19 September 2008
Final 11.0p at 31 March 2007 - 6.2 6.2
paid 21 September 2007
Interim 11.25p at 30 September - - 6.3
2007 paid 22 February 2008
6.3 6.2 12.5
7. earnings per share
Basic losses per share of 222.03p (six months to 30 September 2007: losses 10.67p; year to 31 March 2008: losses 203.61p) are calculated
on the loss for the period of �123.5million (six months to 30 September 2007: loss �6.0million; year to 31 March 2008: loss �113.5million)
and the weighted average of 55,633,832 (six months to 30 September 2007: 55,840,016; year to 31 March 2008: 55,759,748) shares in issue
throughout the period.
Diluted losses per share of 217.52p (six months to 30 September 2007: losses 10.52p; year to 31 March 2008: losses 200.99p) are based on
the loss for the period as above divided by the weighted average number of shares in issue, being 56,786,473 (six months to 30 September
2007: 56,678,166; year to 31 March 2008: 56,485,386) after the dilutive impact of share options granted.
A reconciliation of the weighted average number of shares used to calculate earnings per share and to that used to calculate diluted
earnings per share is shown below:
Unaudited Unaudited Audited
6 months ended 6 months ended Year
30 September 2008 30 September 2007 ended
31 March 2008
Earnings per share: weighted 55,633,832 55,840,016 55,759,748
average number of shares
Weighted average ordinary 1,152,641 838,150 725,638
shares to be issued under
employee incentive
arrangements
Diluted earnings per share: 56,786,473 56,678,166 56,485,386
weighted average number of
shares
8. investment properties
Freehold Leasehold Total Investment
with over Properties
50 years
unexpired
�m �m �m
At 1 April 2008 (audited) 359.4 99.2 458.6
Capital expenditure 3.1 2.7 5.8
Disposals (10.9) - (10.9)
Exchange differences (0.1) - (0.1)
Net loss from fair value (35.9) (13.8) (49.7)
adjustments on investment
property
At 30 September 2008 315.6 88.1 403.7
(unaudited)
9. joint ventures
Unaudited Unaudited Audited
At At At
30 September 2008 30 September 2007 31 March
2008
�m �m �m
Share of joint ventures
At 1 April 90.0 151.5 151.6
Share of loss for the period (46.7) (6.1) (60.8)
Net equity movements - - 14.6
Net loan movements 7.0 - (15.4)
At 30 September / 31 March 50.3 145.4 90.0
Unlisted shares at cost 87.7 72.8 87.7
Group's share of post (48.0) 53.7 (1.3)
acquisition retained (losses)
/ profits and reserves
39.7 126.5 86.4
Amounts owed by joint ventures 10.6 18.9 3.6
50.3 145.4 90.0
Amounts owed by / (due to) Unaudited Unaudited Audited
joint ventures comprise: At At At
30 September 30 September 31 March
2008 2007 2008
�m �m �m
Agora Shopping Centres Limited - 2.6 -
Radial Distribution Limited - 0.1 -
Agora Max Limited 7.0 21.4 -
Greater London Offices Limited 3.6 4.2 3.6
Others - (1.1) -
10.6 27.2 3.6
10. investments in funds
�m
As at 31 March 2008 (audited) 98.9
Net loss from fair value adjustments (22.4)
At 30 September 2008 (unaudited) 76.5
AIF 31.3
Apia 44.8
Other 0.4
At 30 September 2008 (unaudited) 76.5
11. investments in listed and unlisted shares
Unaudited Unaudited Audited
At At At
30 September 2008 30 September 2007 31 March
2008
�m �m �m
Listed investments 0.8 0.8 0.5
Unlisted investments 0.3 12.3 9.3
1.1 13.1 9.8
12. deferred taxation
Unaudited Unaudited Audited
At At At
30 September 2008 30 September 2007 31 March
2008
�m �m �m
Deferred taxation assets
Deferred taxation arising
from:
Unrealised derivative 0.9 0.1 0.6
financial instruments
valuations
Retirement benefit obligations - 0.1 -
Share based payments 0.1 0.4 0.3
Unrealised property and 0.3 - 1.0
investment valuations
1.3 0.6 1.9
Deferred taxation liabilities
Deferred taxation arising
from:
Unrealised derivative (0.2) - -
financial instruments
valuations
Unrealised property and (2.4) (10.9) (6.2)
investment valuations
(2.6) (10.9) (6.2)
13. provisions for other liabilities and charges
Onerous contracts Performance fees Total
�m �m �m
At 31 March 2008 (audited) 3.0 1.6 4.6
Charge to consolidated income 1.2 0.9 2.1
statement
Utilised during the period (1.5) - (1.5)
At 30 September 2008 2.7 2.5 5.2
(unaudited)
Provisions have been analysed between current and non-current as follows:
Unaudited Unaudited Audited
At At At
30 September 2008 30 September 2007 31 March
2008
�m �m �m
Non-current 1.3 3.3 1.4
Current 3.9 - 3.2
5.2 3.3 4.6
The onerous lease provision is made in relation to onerous leases on properties which are vacant or sublet at a level which renders the
properties loss-making over the remaining life of the lease. The provision represents the Directors' estimate of the net cash flows on the
properties.
14. capital and reserves
Reserves
Non-distributable Investment in own
Share Capital reserves Distributable shares
reserves
Total
�m �m �m �m �m
At 31 March 2008 (audited) 2.8 35.3 268.3 (1.2) 305.2
Retained loss for the period - - (123.5) - (123.5)
Realised on disposal of - 0.7 (0.7) - -
investment properties
Net loss from fair value - (49.7) 49.7 - -
adjustment on investment
properties
Share of joint ventures' net - (46.3) 46.3 - -
loss from fair value
adjustment on investment
properties
Net loss from fair value - 0.3 (0.3) - -
adjustment on listed
investments
Net loss from fair value - (31.4) 31.4 - -
adjustment on unlisted
investments
Change in fair value of - (0.4) 0.4 - -
derivative financial
instruments
Share of change in fair value - (0.2) 0.2 - -
of joint ventures' derivative
financial instruments
Dividends paid - - (6.3) - (6.3)
Actuarial gain on pensions - - (0.1) - (0.1)
scheme assets
Cost of share based payments - 0.1 - - 0.1
At 30 September 2008 2.8 (91.6) 265.4 (1.2) 175.4
(unaudited)
15. reconciliation of operating profit to net cash flow
Unaudited Unaudited Audited
At At At
30 September 30 September 31 March
2008 2007 2008
�m �m �m
Operating profit before net 10.0 9.9 20.6
gains on investments
Depreciation of plant and 0.1 0.1 0.2
equipment
(Increase) / decrease in trade (1.8) 2.0 9.0
and other receivables
Decrease in trade and other (3.9) (22.3) (22.9)
payables
Cash inflows / (outflows) from 4.4 (10.3) 6.9
operations
16. minority interest
This represents investments held by The F15 Partnership in Balmcrest Estates Limited. The company paid out a final dividend during the
year ended 31 March 2008 and is now in members' voluntary liquidation.
17. related party transactions
In accordance with IAS 27 "Consolidated and Separate Financial Statements," transactions between the company and subsidiaries, which are
related parties, have been eliminated on consolidation and are not disclosed in this note.
Details of transactions and balances between the Group and joint ventures are set out in note 9.
Remuneration of key management personnel:
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 30 September 31 March
2008 2007 2008
�m �m �m
Short-term employee benefits 0.5 1.0 1.0
Post-employee benefits 0.1 0.1 0.2
Share based payments 0.1 - 0.3
0.7 1.1 1.5
Directors' statement of responsibilities
The Directors confirm that this condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial
Reporting, as adopted by the European Union, and gives a true and fair view of the assets, liabilities, financial position and loss of the
Group, and that the Half Yearly Report herein includes a fair review of the information as required by 4.2.7 and 4.2.8 of the Disclosure and
Transparency Rules.
The Directors of Warner Estate Holdings PLC are as stated in the Group's Annual Report for the year ended 31 March 2008, with the
addition of Mr. M. Keogh who was appointed Finance Director on 20 November 2008.
By the order of the Board
D J Lanchester
Secretary
27 November 2008
Independent review report to Warner Estate Holdings PLC
Introduction
We have been engaged by the company to review the condensed set of interim consolidated financial statements in the half-yearly
financial report for the six months ended 30 September 2008, which comprises the consolidated income statement, consolidated balance sheet,
consolidated statement of recognised income and expense, consolidated statement of changes in equity, consolidated cash flow statement and
related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for
preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial
Services Authority.
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European
Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with
International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of interim consolidated financial statements in the
half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for
the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing
this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands
it may come save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United
Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of interim consolidated
financial statements in the half-yearly financial report for the six months ended 30 September 2008 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules
of the United Kingdom's Financial Services Authority.
Emphasis of Matter - going concern
In arriving at our Review Conclusion, which is not qualified, we have considered the adequacy of the disclosures made in the Basis of
preparation note within the interim consolidated financial statements concerning the Group's ability to continue as a going concern. These
disclosures indicate that there is a material uncertainty as to whether the Group may breach its loan to value banking covenants at 31 March
2009 which may cast significant doubt about the Group's ability to continue as a going concern.
PricewaterhouseCoopers LLP
Chartered Accountants
27 November 2008
London
Notes:
(a) The maintenance and integrity of the Warner Estate Holdings PLC website is the responsibility of the directors; the work carried
out by the auditors does
not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have
occurred to the financial
statements since they were initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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