RNS Number:5658E
Warner Estate Holdings PLC
03 December 2002
WARNER ESTATE'S GOOD PERFORMANCE UNDERPINS STRATEGY
Warner Estate Holdings PLC ("Warner Estate"), the property investment company
has today announced its interim results for the six months to 30 September 2002.
Highlights
* Recurring revenue profits up 41% to #6.7m (2001: #4.8m)
* Recurring revenue earnings per share up 44% to 11.09p (2001: 7.68p)
* Adjusted NAV up to 434p (March 2002: 423p)
* Annualised rent roll of #36.2m (September 2001: #27.3m)
* Property under management up to #570m
* Voids down to 4% (March 2002: 5%)
* Interim dividend up 6.9% to 7.75p (2001: 7.25p)
Philip Warner, Executive Chairman of Warner Estate commented,
" This has been the busiest period in Warner Estate's history. Following
recent acquisitions, we now manage over #500 million of property assets. During
the period, the three sectors we concentrate on, retail, regional offices and
industrial property, have all performed well.
" We have focused particularly on the growth of our North West shopping centre
portfolio. With the joint acquisition of the large shopping centres in Bolton
and Middleton, the portfolio has grown to #165 million. We now have five
substantial centres with potential to deliver significant increases in rental
and capital value and to that end we have started a major upgrading programme.
" The outlook for Warner Estate is very encouraging and with the integrated
management team we have built up, I look forward to continuing the positive
development of the business."
-ends-
Date: 3 December 2002
For further information contact:
Warner Estate Holdings PLC City Profile Group
Philip Warner, Chairman Simon Courtenay
Peter Collins, Finance Director Ed Senior
Richard Moore, Property Director 020-7448-3244
020-7907-5100 e-mail: simon.courtenay@city-profile.com
Web: www.warnerestate.co.uk
Chairman's Statement
RESULTS
This has been the busiest period in Warner Estate's history and the first six
months of the year have seen significant progress both in recurring profit and
in the execution of the Group's strategy. Following recent acquisitions, we now
manage over #500 million of property assets. The three sectors we concentrate
on, shopping centres, regional offices and industrial property, have all
performed well. Adjusted net assets per share have risen 2.6% to 434p (March
2002: 423p) after a full property valuation, which added 4.8p per share with
most of the balance coming from retained profits.
Triple net asset value, which adjusts for deferred tax and the fair value of
debt, rose to 405p (March 2002: 403p). This proportionately lower increase was
caused firstly by a substantial rise in the debt adjustment due to a downward
spike in the yield curve during September, which has since partially reversed.
Secondly, the loan margin assumed on our debt has reduced by 0.25% as a result
of our improved financial standing.
Revenue pre tax profits (which exclude the effect of fixed asset disposals,
which were higher in the earlier period) were #7.2 million, a 26% increase on
the comparable period (September 2001: #5.7 million) and recurring revenue
profits, which derive from the Group's core maintainable income, were up a very
satisfactory 41% at #6.7 million (September 2001: #4.8 million). This last
measure, to which I drew shareholders' attention in the annual report,
demonstrates the underlying robustness of the Group. Pre tax profits for the
six months were #7.9 million (September 2001: #7.8 million).
Adjusted revenue earnings per share were 11.74p and recurring revenue earnings
per share 11.09p, increases of 30 % and 44 % respectively (September 2001:
9.04p and 7.68p). Total adjusted earnings per share were 12.85p (September
2001: 13.12p). This slight decline reflects an increase in the rate of tax
payable from 15.6% to 18.0%.
Supported by strong growth in recurring revenue, the Board has increased the
interim dividend by 6.9% to 7.75p against last year's 7.25p.This dividend is
covered 1.4 times by recurring revenue earnings (September 2001: 1.1 times) and
will be paid on 28 February 2003 to shareholders on the register at close of
business on 31 January 2003. Shareholders should note that, as with the previous
final dividend, the date of payment has been brought forward.
PROPERTY
We have focused particularly on the growth of our North West shopping centre
portfolio. With the joint acquisitions of the large shopping centres in Bolton
and Middleton, the portfolio has grown to #165 million. We now have five
substantial centres with potential to deliver significant increases in rental
and capital value and to that end we have started a major upgrading programme.
In addition, the purchase of an office in Glasgow took the regional office
portfolio to #144 million. The core of the Group's stated strategy is to create
suitable property portfolios to be transferred to limited partnerships or
similar alliances for which we will provide management services. During the
last six months, considerable efforts have been made not only in acquiring
appropriate properties, but also in ensuring the portfolios are structured
efficiently to achieve our objective.
The breakdown of the portfolio at 30 September was as follows:
No. of Value #'m Annual Rent Net initial Weighting
properties Roll #m yield
Retail
Shopping Centres 3 60.5 4.2
Retail Warehouses 6 19.2 1.6
High Street 12 29.7 2.0
Retail sub total 21 109.4 7.8 6.77% 27%
Offices
Regional 23 150.5 12.6
M25 and Outer London 20 76.0 6.2
Offices sub total 43 226.5 18.8 8.08% 56%
Industrial 22 68.7 5.9 8.23% 17%
Total 86 404.6 32.5 7.75% 100%
Trading 17 49.5
Joint ventures (50% owned)
Shopping Centres 2 104.0
Trade Centres 4 10.5
Total under management 109 568.6
Cushman & Wakefield Healey & Baker carried out an interim valuation of the
investment portfolio as at 30 September 2002 which, together with those
properties valued by the Directors, produced a figure of #404.6 million and an
average lot size of #4.7 million (March 2002: #403.2 million and #4.3 million).
The valuation produced an uplift of #2.5million, net of capital expenditure, the
majority of which arose on the Group's retail portfolio, although there were
increases across all sectors, a credit to the performance of our asset managers.
The annualised rent roll for both trading and investment properties at 30
September 2002 was #36.2 million (September 2001: #27.3 million), excluding the
Bolton and Middleton shopping centres, which are held in joint ventures with a
rent roll of #7.7 million. It covered 564 tenancies in 103 properties (of which
86 were investment properties) with #25 million of rents being from low or
medium risk covenants. In addition no one tenant accounted for more than 5% of
the Group's rental income, with the exception of Government agencies which
accounted for 7%. The Group's portfolio is well balanced across business
sectors and, in terms of geographic risk, this year saw the disposal of our last
office property in central London.
The average lease length in the investment portfolio exceeds 11 years, the
estimated rental value at 30 September 2002 was #36.9 million against a rent
roll of #32.5 million and the level of voids was down to 4% (March 2002: 5%)
Acquisitions during the period totalled #14 million, excluding those within
joint ventures, and disposals #18 million, realising a profit on the March
valuation. In addition, the Group sold its share in Midland Commercial
Properties for #2.1 million and, with the sale of most of the assets in the
Warrington joint venture, our exit from small joint ventures has almost been
completed.
In the trading portfolio three properties were sold for #4.2 million and further
disposals will follow as opportunities arise. The directors estimate that the
value of the trading stock is worth a further #1.3 million above its book cost.
It is not currently the Group's strategy to buy to trade except as an incidental
part of a larger purchase.
FINANCE
Accounting Standards
Concern has been expressed in the media about the exposure of companies to
pension liabilities. As a result, despite concerns that the standard overstates
the impact of short-term market changes, FRS 17: Retirement Benefits, was fully
implemented in the March 2002 results so that shareholders would know the extent
of the Group's exposure. The impact in the current six months is to increase
profits by #13,000 and reduce shareholders' funds by #171,000 (0.3 pence per
share), which your Board does not consider material.
However, the recently introduced FRS 19: Deferred Tax, has had a material effect
on these results in terms of earnings per share. This is because tax
allowances are only allowed under FRS 19 when they have crystallised and during
the half year the Group disposed of properties whilst retaining the tax
allowances on the properties sold. As a result, revenue earnings per share are
shown to be higher than adjusted revenue earnings per share rising by 36%
compared to 30%. As explained in the March 2002 accounts, we produce adjusted
figures, which ignore the effects of this standard, in order to counter this
distortion.
Cash Flow
The net outflow in the period of #13.8 million arose mainly as a result of loans
to joint ventures of #17.0 million and the effect of bringing forward to August
the payment of the final dividend of #3.9 million. Since the period end there
has been an inflow of #10.6 million from property disposals.
Balance Sheet
Adjusted shareholders' funds (excluding the #4.8million reduction for deferred
tax) rose to #221million up from #216million in March and triple net assets to
#207 million from #205 million. No shares were bought in although the authority
to buy back up to 14.9% was renewed at the AGM in July.
Debt
Net debt at 30 September 2002 was #263 million giving the Group adjusted net
gearing of 119% (March 2002: 116%), of which #137 million was long-term. The
net short-term debt of #126 million reflects purchases made with a view to sale
into limited partnership vehicles. Once this has occurred, the Group's overall
debt and gearing will be substantially reduced. However, in the interests of
transparency, we shall continue to report the financial position of such
vehicles including the full extent of non-recourse debt. Cash and unutilised
facilities totalled #30 million.
Of the long-term debt of #137 million, #120 million is fixed or hedged against
interest rate movements. As regards the short-term debt, in June of this year,
the Group took out a #100 million cap at 7.25% for five years as protection
against a sharp rise in interest rates during times of significant exposure.
Interest was covered 1.8 times by recurring revenue profit before interest and
tax (March 2002: 1.9 times)
Return on Capital
The annualised post tax total return for the six months to 30 September was 5%,
which, as previously reported, measures the return on the Group's shareholders'
funds before the dividend distribution, using triple net asset value. The
return, as detailed above, was significantly affected by a short-term movement
in the yield curve, without which it would have been 9%.
Prospects
The outlook for Warner Estate is very encouraging, despite global uncertainty
and economic slowdown. Against a background of decline in London, our purchases
of regional offices and North West shopping centres have been well timed and our
research supports the prospect of continuing progress. We would welcome greater
exposure to retail and distribution warehousing but intense competition is
keeping prices higher than we have been able to justify. However, your company's
management team, which integrates both property and financial expertise, has
already made the most of the market and of the fiscal environment and I look
forward to continuing the positive development of the business.
Philip Warner
3 December 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months ended 30 September 2002
Notes Unaudited 6 Unaudited 6 Audited year
months ended months ended ended
30.9.2002 30.9.2001 31.3.2002
restated
#'000 #'000 #'000
TURNOVER: GROUP AND SHARE OF JOINT
VENTURES AND ASSOCIATE 29,222 21,311 40,603
less: Share of joint ventures and associate (6,291) (3,171) (6,171)
GROUP TURNOVER 2 22,931 18,140 34,432
Cost of sales and other property outgoings (7,374) (6,446) (10,487)
GROSS PROFIT 2 15,557 11,694 23,945
Administrative expenses (1,026) (878) (1,783)
GROUP OPERATING PROFIT 2 14,531 10,816 22,162
Share of operating profit in:
Joint ventures 2 438 12 754
Associate 2 660 1,260 2,352
1,098 1,272 3,106
TOTAL OPERATING PROFIT 15,629 12,088 25,268
Profit on sale of fixed assets 4 607 2,114 2,083
Income from fixed asset investments 635 461 603
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST 16,871 14,663 27,954
Net interest payable and similar charges 5 (9,016) (6,813) (12,804)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 7,855 7,850 15,150
Taxation on profit on ordinary activities 6 (1,306) (1,224) (3,502)
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 6,549 6,626 11,648
Dividends (3,950) (3,541) (7,490)
RETAINED PROFIT 2,599 3,085 4,158
p p p
EARNINGS PER SHARE 7
Revenue 11.87 8.71 19.16
Capital 1.11 4.08 3.56
12.98 12.79 22.72
p p p
FULLY DILUTED EARNINGS PER SHARE 7
Revenue 11.87 8.70 19.16
Capital 1.11 4.08 3.56
12.98 12.78 22.72
P P P
ADJUSTED EARNINGS PER SHARE 7
Revenue 11.74 9.04 21.42
Capital 1.11 4.08 3.56
12.85 13.12 24.98
CONSOLIDATED BALANCE SHEET
Notes Unaudited Unaudited Audited At
At At 31.3.2002
30.9.2002 30.9.2001
restated
#'000 #'000 #'000
FIXED ASSETS
Tangible fixed assets
Investment properties 8 404,600 298,630 403,186
Other tangible assets 494 194 439
405,094 298,824 403,625
Joint ventures 9
Share of gross assets 57,261 8,160 7,108
Share of gross liabilities (56,960) (6,538) (4,902)
Loan accounts 18,830 2,184 1,868
19,131 3,806 4,074
Investments 23,480 21,262 22,879
447,705 323,892 430,578
CURRENT ASSETS
Property stock 49,451 24,688 53,374
Debtors 8,362 27,855 5,326
Investments 317 309 309
Cash at bank and in hand 11,859 15,327 843
69,989 68,179 59,852
CURRENT LIABILITIES
Creditors: amounts falling due within one year (159,637) (41,167) (137,230)
NET CURRENT (LIABILITIES)/ASSETS (89,648) 27,012 (77,378)
TOTAL ASSETS LESS CURRENT LIABILITIES 358,057 350,904 353,200
Creditors: amounts falling due after more than (136,726) (137,182) (137,362)
one year
Provision for liabilities and charges
Deferred taxation 10 (4,858) (4,007) (4,919)
Net assets excluding pension (liability)/asset 216,473 209,715 210,919
Pension (liability)/asset 3 (171) 62 (36)
NET ASSETS 216,302 209,777 210,883
CAPITAL AND RESERVES
Called up share capital 2,548 2,562 2,547
Other reserves 204,840 201,623 201,455
Profit and loss account 8,914 5,592 6,881
Shareholders' funds 216,302 209,777 210,883
p p p
Net assets per share 425 409 414
FRS 19 reversal 9 8 9
Adjusted net assets per share 434 417 423
STATEMENT OF TOTAL RECOGNISED GAINS & LOSSES
Unaudited 6 Unaudited6 Audited year
months ended months ended ended
30.9.2002 30.9.2001 31.3.2002
restated
#'000 #'000 #'000
Profit on ordinary activities after taxation 6,549 6,626 11,648
Unrealised surplus on revaluation of properties 2,456 3,179 4,222
Unrealised surplus/(deficit) on revaluation of investments 484 (181) 174
Actuarial loss on pension scheme assets (207) (194) (362)
Deferred tax arising on pension scheme assets 59 56 98
Tax on realisation of revalued properties - (223) (464)
TOTAL RECOGNISED GAINS RELATING TO THE PERIOD 9,341 9,263 15,316
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Unaudited 6 Unaudited 6 Audited year
months ended months ended ended
30.9.2002 30.9.2001 31.3.2002
restated
#'000 #'000 #'000
Profit on ordinary activities after taxation 6,549 6,626 11,648
Dividends (3,950) (3,541) (7,490)
2,599 3,085 4,158
Share capital and share premium issued in period 28 612 613
Share capital purchased and cancelled in period (incl. - (4,170) (5,169)
expenses)
Other recognised gains and losses 2,792 2,637 3,668
Net increase in shareholders' funds 5,419 2,164 3,270
Opening shareholders' funds 210,883 207,420 207,420
Prior year adjustment on adoption of FRS 17 - 193 193
Restated opening shareholders' funds 210,883 207,613 207,613
CLOSING SHAREHOLDERS' FUNDS 216,302 209,777 210,883
CONSOLIDATED CASH FLOW STATEMENT
Unaudited 6 Unaudited 6 Audited year
months ended months ended ended
30.9.2002 30.9.2001 31.3.2002
restated
#'000 #'000 #'000
Net cash inflow from operating activities 17,062 22,088 14,783
Dividends received from joint ventures and associate 126 85 296
Returns on investments and servicing of finance (7,500) (5,127) (10,419)
Taxation (194) (941) (2,298)
Capital expenditure and financial investments (17,173) 65,704 (41,720)
Acquisitions and disposals 2,002 - (439)
Equity dividends paid (7,568) (4,907) (8,487)
Management of liquid resources (8) (6) -
Net cash (outflow)/inflow before financing (13,253) 76,896 (48,284)
Financing (508) (4,828) (5,994)
(DECREASE)/INCREASE IN CASH (13,761) 72,068 (54,278)
RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW
Unaudited At Unaudited At Audited At
30.9.2002 30.9.2001 31.3.2002
restated
#'000 #'000 #'000
Operating profit 14,531 10,816 22,162
Depreciation of tangible fixed assets 76 98 130
Loss on sale of other tangible fixed assets - - 11
Decrease/(increase) in stocks 3,923 4,296 (24,390)
(Increase)/decrease in debtors (2,964) 6,014 19,513
Increase/(decrease) in creditors 1,496 864 (2,643)
Net cash inflow from operating activities 17,062 22,088 14,783
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
The interim accounts have been prepared on the basis of accounting policies set
out in the published accounts of the Group for the year ended 31 March 2002.
The comparatives for the 6 months ended 30 September 2001 have been restated for
FRS 17: Retirement Benefits which was adopted in the audited accounts for the
year ended 31 March 2002. The effect of this restatement is set out in Note 3
to the financial statements.
2. TURNOVER AND OPERATING PROFIT
The Directors believe that the Group operates in only one segment, namely
property. The following analysis is provided for information only:
Property Property Group Total Joint Associate Total
Investment Trading Ventures
#'000 #'000 #'000 #'000 #'000 #'000
6 months to 30 September 2002
Turnover:
Rents receivable 17,111 1,656 18,767 373 1,844 20,984
Property trading - 4,164 4,164 2,048 2,026 8,238
Total turnover 17,111 5,820 22,931 2,421 3,870 29,222
Cost of sales and property (3,074) (4,252) (7,326)
outgoings
Writedown cost of trading - (48) (48)
stock
Gross profit 14,037 1,520 15,557
Administrative expenses (868) (158) (1,026)
Operating profit 13,169 1,362 14,531 438 660 15,629
6 months to 30 September 2001
restated
Turnover:
Rents receivable 11,994 1,271 13,265 259 914 14,438
Property trading - 4,875 4,875 66 1,932 6,873
Total turnover 11,994 6,146 18,140 325 2,846 21,311
Cost of sales and property (1,868) (4,378) (6,246)
outgoings
Writedown cost of trading stock - (200) (200)
Gross profit 10,126 1,568 11,694
Administrative expenses (770) (108) (878)
Operating profit 9,356 1,460 10,816 12 1,260 12,088
Year to 31 March 2002
Turnover:
Rents receivable 24,686 2,721 27,407 804 1,862 30,073
Property trading - 7,025 7,025 1,460 2,045 10,530
Total turnover 24,686 9,746 34,432 2,264 3,907 40,603
Cost of sales and property (4,090) (6,099) (10,189)
outgoings
Writedown cost of trading stock - (298) (298)
Gross profit 20,596 3,349 23,945
Administrative expenses (1,501) (282) (1,783)
Operating profit 19,095 3,067 22,162 754 2,352 25,268
3. PENSION COMMITMENTS
The Group operates and contributes to pension schemes for certain Directors and
employees and makes some discretionary allowances. The costs charged to the
profit and loss account for the six months to 30 September 2002 in respect of
these amounted to #81,000 (half year to 30.9.01 restated: #54,000; year to
31.3.02: #135,000). Pension premiums paid in advance were #44,000 (half year
to 30.9.01: #41,000; year to 31.3.02: #33,000).
The Group operated a defined benefit scheme in the UK, The Warner Estate Group
Retirement Benefits Scheme. A full valuation was carried out at 1 October 2000
and updated to 30 September 2001, 31 March 2002 and 30 September 2002 by a
qualified independent actuary.
It has been agreed with the Trustees that the Group contributions for the next
four years will be at 28.4% of pensionable salaries, subject to review by the
Scheme Actuary.
The value of the assets and liabilities of the Scheme were as follows:
Value at Value at Value at
30.9.02 30.9.01 31.3.02
#'000 #'000 #'000
Total market value of assets 4,427 5,516 4,537
Present value of scheme liabilities (4,672) (5,427) (4,588)
(Deficit)/surplus (245) 89 (51)
Related deferred tax asset/(liability) 74 (27) 15
Net pension (liability)/asset (171) 62 (36)
Analysis of amount charged to operating profit
Unaudited 6 Unaudited6 Audited
months ended months ended year ended
30.9.02 30.9.01 31.3.02
#'000 #'000 #'000
Total operating charge
Current service cost 18 23 46
The impact of the adoption of FRS 17: Retirement Benefits is as follows:
Unaudited 6 Unaudited 6 Audited
months ended months ended year ended
30.9.02 30.9.01 31.3.02
#'000 #'000 #'000
(Decrease)/increase in shareholders' funds (171) 62 (36)
Decrease/(increase) in administrative expenses 15 (8) 8
Other finance (cost)/income (2) 15 27
Increase in profit on ordinary activities before taxation 13 7 35
4. PROFIT ON SALE OF FIXED ASSETS
Unaudited 6 Unaudited 6 Audited year
months ended months ended ended
30.9.2002 30.9.2001 31.3.2002
#'000 #'000 #'000
Surplus/(deficit) over book value
Investment properties 412 (175) (81)
Listed investments - 2,289 2,164
Share of associate 195 - -
607 2,114 2,083
5. NET INTEREST PAYABLE AND SIMILAR CHARGES
Unaudited 6 Unaudited 6 Audited
months months year ended
ended ended 31.3.2002
30.9.2002 30.9.2001
restated
#'000 #'000 #'000
Interest payable on bank loans and overdrafts, mortgages
and other loans
repayable within five years not by instalments 4,192 2,152 2,287
repayable wholly or partly in more than five years 3,553 4,221 9,333
7,745 6,373 11,620
Charges in respect of cost of raising finance 742 316 1,003
8,487 6,689 12,623
Less capitalised interest (11) (77) (77)
8,476 6,612 12,546
Share of joint ventures' net interest 375 158 245
Share of associate's net interest 494 540 1,101
9,345 7,310 13,892
Other finance cost/(income)
Expected return on pension scheme assets (136) (176) (346)
Interest on pension scheme liabilities 138 161 319
2 (15) (27)
9,347 7,295 13,865
Interest receivable:
From joint ventures (326) (51) (185)
Other interest (5) (431) (876)
9,016 6,813 12,804
6. 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.
7. EARNINGS PER SHARE
Earnings per share of 12.98p (half year to 30.9.01 restated: 12.79p; year to
31.3.02: 22.72p) are calculated on the profit on ordinary activities after
taxation of #6,549,000 (half year to 30.9.01 restated: #6,626,000; year to
31.3.02: #11,648,000) and the weighted average of 50,459,517 (half year to
30.9.01: 51,788,035; year to 31.3.02: 51,251,783) shares in issue throughout
the period. Profit on ordinary activities after taxation includes capital
profits on the sale of investments net of tax of #559,000 (half year to
30.9.01: #2,114,000; year to 31.3.02: #1,827,000).
Fully diluted earnings per share are based on the profit available for
distribution as above divided by the weighted average number of shares in issue,
being 50,484,365 (half year to 30.9.01: 51,290,769; year to 31.3.02:
51,254,606) after the dilutive impact of share options granted.
Adjusted earnings per share are calculated on the same weighted average number
of shares as for the basic earnings per share, but exclude from revenue profits
the deferred taxation credit of #68,000 (half year to 30.9.01: charge of
#173,000; year to 31.3.02: charge of #1,156,000) arising on the adoption of
FRS 19. This deferred tax has been adjusted as the Group's experience is that
it is very unusual for capital and industrial building allowances to be claimed
back on the disposal of a property.
8. INVESTMENT PROPERTIES
Freehold Freehold assets Leasehold Total
held for resale with over 50
years
unexpired
#'000 #'000 #'000 #'000
At 31 March 2002 232,202 102,012 68,972 403,186
Additions 1,526 13,382 1,185 16,093
Disposals (17,135) - - (17,135)
216,593 115,394 70,157 402,144
Surplus on revaluation 1,761 - 695 2,456
At 30 September 2002 218,354 115,394 70,852 404,600
The #115,394,000 of freehold properties categorised as assets held for resale
represent assets intended to form the core of a limited partnership or similar
venture.
Properties purchased within twelve months of the balance sheet date are included
at Directors' valuation. The remainder of the Group's investment portfolio was
valued by Cushman & Wakefield Healey & Baker on an open market basis in
accordance with the recommended guidelines of the Royal Institution of Chartered
Surveyors as at 30 September 2002.
Investment properties were valued as follows:
#'000
Cushman & Wakefield Healey & Baker 284,800
Directors' valuation 119,800
404,600
Additions in respect of leasehold property include capitalised interest of
#11,000.
9. JOINT VENTURES
Unaudited At Unaudited At Audited At
30.9.2002 30.9.2001 31.3.2002
#'000 #'000 #'000
Share of joint ventures
Opening balance 4,074 2,719 2,719
Share of profit/(loss) for the period 61 (169) 377
Surplus/(deficit) on revaluation of investments 36 (27) 15
Net equity movements (2,002) - (4)
Net loan movements 16,962 1,283 967
Closing balance 19,131 3,806 4,074
Unlisted shares at cost less amounts written off 249 1,457 1,457
Group's share of post acquisition retained profits and reserves 52 165 749
301 1,622 2,206
Net loans to joint ventures 18,830 2,184 1,868
19,131 3,806 4,074
Included in share of joint ventures' gross assets and
liabilities are:
Gross Assets
Fixed assets 53,121 414 413
Current assets 4,140 7,746 6,695
57,261 8,160 7,108
Gross Liabilities
Amounts falling due within one year 4,216 1,670 1,815
Amounts falling due after more than one year 52,744 4,868 3,087
56,960 6,538 4,902
10. DEFERRED TAX
Unaudited At Unaudited At Audited At
30.9.2002 30.9.2001 31.3.2002
#'000 #'000 #'000
Deferred taxation arising from the timing differences noted
below:
Short term timing difference (7) 154 82
Capital and industrial buildings allowances claimed on 4,865 3,853 4,837
investment properties
4,858 4,007 4,919
The potential amount of deferred taxation, for which no 3,005 1,688 2,925
provision has been made and which would arise if the assets
held as long term investments were sold at the values at which
they appear in the balance sheet, has been calculated as
follows:
11. FINANCIAL INSTRUMENTS
Financial Liabilities
The interest rate profile of the Group's financial liabilities at 30 September
2002, after taking account of interest rate instruments taken out by the Group
was:
Unaudited At Unaudited At Audited At
30.9.2002 30.9.2001 31.3.2002
#'000 #'000 #'000
Floating rate financial liabilities 56,506 19,695 131,730
Fixed rate financial liabilities 218,922 120,044 119,508
Total 275,428 139,739 251,238
The benchmark rate for determining interest payments for the floating rate
financial liabilities was LIBOR/base rate depending upon the facility.
The weighted average interest rate on the fixed rate debt and the average
maturity of that debt was as follows:
Unaudited At Unaudited At Audited At
30.9.2002 30.9.2001 31.3.2002
% % %
Weighted average interest rate 7.94 7.95 7.95
Years Years Years
Weighted average period for which interest rate is fixed 6.91 7.75 7.34
Maturity of financial liabilities Unaudited At Unaudited At Audited At
30.9.2002 30.9.2001 31.3.2002
#'000 #'000 #'000
Within one year or on demand 138,033 1,641 113,156
Between one and two years 1,394 2,038 1,394
Between two and five years 4,182 6,539 5,482
In five years or more 131,819 129,521 131,206
275,428 139,739 251,238
Borrowing facilities
The Group has various borrowing facilities that were not fully Unaudited At Unaudited At Audited At
utilised at the period end in which the conditions for 30.9.2002 30.9.2001 31.3.2002
utilising those facilities were met.
#'000 #'000 #'000
Expiring in one year or less:
Total facilities 155,000 92,931 155,000
Unutilised 18,361 92,931 43,014
Fair values of financial assets and liabilities
The table below sets out by category the changes to the balance sheet values
that would occur if "fair values" applied.
Unaudited At Unaudited At Audited At
30.9.2002 30.9.2001 31.3.2002
Fair value Fair value Fair value
adjustment adjustment adjustment
#'000 #'000 #'000
Group
Primary financial instruments
Liabilities (13,651) (10,926) (9,068)
Assets - - -
Derivative instruments held to manage debt
Interest rate swaps (2,844) (1,798) (1,294)
Interest rate caps 8 9 4
Assets
Financial assets - - -
(16,487) (12,715) (10,358)
The effect on net assets per share of the total fair value adjustment
(#16,487,000 less tax #4,946,000) would be a decrease of 22.6 pence (31 March
2002: 14.2 pence)
The calculation of the fair values has been arrived at as follows:
Debt has been calculated by discounting cash flows at prevailing rates of
interest.
The equity assets have been valued at the quoted share price based upon the
strategic nature of the holdings compensating for any discount.
Interest rate swaps have been valued at the market rate for such swaps.
12. ANALYSIS OF NET DEBT MOVEMENTS
Audited At Cashflow Unaudited At
31.3.2002 31.9.2002
#'000 #'000 #'000
Cash at bank and in hand 843 11,016 11,859
Bank overdrafts/short term borrowings (111,862) (24,777) (136,639)
(13,761)
Debt due within one year:
Mortgage and other loans (1,294) (100) (1,394)
Debt due after one year:
Mortgage and other loans (112,503) 644 (111,859)
Bank loan (24,859) (8) (24,867)
536
Net Debt (249,675) (13,225) (262,900)
13. FINANCIAL STATEMENTS
The consolidated profit and loss account and the consolidated balance sheet are
unaudited and do not constitute statutory accounts within the meaning of section
240 of the Companies Act 1985. The statutory accounts for the year to 31 March
2002, from which the comparatives have been extracted, received an unqualified
auditors' report and have been delivered to the Registrar of Companies.
SIGNIFICANT EVENTS DURING 6 MONTH PERIOD TO 30 SEPTEMBER 2002
DATE
Purchase of office property in Bath Square, Glasgow for #12.5 million May 2002
Disposal of major property asset in Warrington Industrial Investments Limited joint May 2002
venture for #2.1 million
Sale of 50% shareholding in Midland Commercial Properties Limited joint venture for July 2002
#2.1 million
Purchase of Market Place Shopping Centre, Bolton for #64.52 million through a joint August 2002
venture with Bank of Scotland
Sale of six smaller lot size properties for #16.6 million June/August 2002
Purchase of Middleton Shopping Centre for #39.5 million through a joint venture with September 2002
Bank of Scotland
SIGNIFICANT EVENTS POST 30 SEPTEMBER 2002
DATE
Sale of three industrial estates for #10.85 million October 2002
This information is provided by RNS
The company news service from the London Stock Exchange
END
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