RNS Number:2855B
Westbury Property Fund Limited
28 July 2004
The Westbury Property Fund Limited
Unaudited Interim Report for the six months ended 30 June 2004
Chairman's Statement for the period 1 January 2004 to 30 June 2004
This Interim Report is published in respect of six months to 30 June 2004. I am
delighted to report the unaudited net asset value due to capital shareholders
has increased to 150.28p (compared to 104.19p as at 30 June 2003). This is an
increase of some 44% compared to the same period last year and reflects the
underlying quality of the Company's property portfolio and the strength of the
UK property market as a whole. Furthermore, this strong performance has been
generated across the entire portfolio and has not been confined to any one
single asset or sector.
During the period, Income Share dividends of 4p per Income Share have been
declared. Going forward and in the absence of any unforeseen circumstances, it
is the intention of the Board to declare and pay quarterly dividends of 2p per
Income Share in line with their entitlement to receive a fixed preferential
dividend of 8% per annum over their life.
Share Price Performance
The share price performance of the Income Shares has been relatively stable
throughout the period and has consistently traded at a premium to par. This
reflects the strong asset backing of the Income Shares and the spread of rental
receipts across the entire portfolio.
I have been disappointed by the share price performance of the Capital Shares
which have, on average, traded at a discount of approximately 25% to the
published net asset value. This is an anomaly compared to other comparable
property funds and the Board is currently reviewing the Company's capital
structure to see whether the Company itself can take steps to ensure that the
discount to NAV can be narrowed. Further announcements, if any, will be made in
due course.
Bank Borrowings
The Company has fixed rate borrowings with Bradford & Bingley amounting to
#38.5m currently drawn down and fixed at an average all-in-cost of just over
6.0% until 25 June 2009. The Company has a further #5m drawn down under its
revolving facility which remains at an all-in floating rate of around 5.5%. The
Board considers this to be a prudent interest rate policy as it will enable debt
breakage costs to be minimised in the event that any assets are disposed of
pending reinvestment. Most commentators believe that interest rates are more
likely to rise than fall over the coming months and it remains the Company's
policy not to expose itself to any material interest rate risk.
Property Portfolio - Balanced
As at 30 June 2004, the Company has a direct property portfolio of 14 properties
with an aggregate valuation of #72.8m. The Company has 45 tenancies in the
balanced portfolio, an annual rent roll of circa #5m and a weighted average
lease length of 13.25 years.
There is a wide and diverse spread by sector, by region and by tenant covenant.
The main drivers to performance over the last six months have been the
completion of our two pre-let developments at Worcester and Guildford, the
anticipated rent review settlement at our Hull retail warehouse and continued
yield shift across the entire portfolio. There remain a number of significant
asset management opportunities within the existing portfolio and these will be
implemented over the coming months.
Given the strength of the UK property market, disposals of assets will be
considered if individual realisation prices can be achieved ahead of current
business plans.
Property Portfolio - Ventures
I am pleased to report that the Company has, subsequent to the period end,
disposed of its interest in Lunar Partnership Limited. This investment has been
revalued to reflect the net profit after all costs of over #700,000 on top of
the original investment cost of #2m which was made in October 2003. The
investment result was well ahead of our original expectations returning an
estimated IRR of some 50%.
The Company's other venture investments at Ropewalks One in Liverpool and at the
Orton Shopping Centre in Peterborough are making good progress and the Board is
confident that good returns can be generated from these assets.
A fourth venture investment has been made following the period end. The
investment is in a North West based storage and facilities handling business
which operates from a 55 acre site with road, rail, sea and inland waterway
access. The Company has made an initial investment of circa #0.5m in the
business and a further investment of circa #1m will be committed if certain
lease arrangements and development plans are approved. The Company has a 50%
interest in a syndicate of investors which includes Berrington Fund Management
Limited, Barlows Holdings Limited, London & Palatine Estates Limited and a
private investor.
Property Investment Funds ("PIFs")
There has been a great deal of press comment and interest in the Treasury's
consultation regarding the possible introduction of a tax transparent property
investment fund. It is possible that this legislation could be passed as early
as 2005.
Unlike all UK domiciled quoted property companies, the Company already has the
benefits of tax transparency. There is no capital gains tax for Guernsey
companies, there is currently no tax paid on the Company's rental income and all
returns to shareholders are distributed gross.
Notwithstanding this, the Board will monitor the progress of PIF legislation and
will consider a change of domicile, if PIFs are introduced and it is in
shareholders' interests to convert the Company into a PIF.
Full Year Outlook
The UK property market has performed very strongly this year and whilst some
commentators believe that it has reached its peak we are still seeing a number
of signs that further rises could take place. The occupier market is looking a
little stronger compared to this time last year and the weight of money being
allocated to property by pension funds and other institutional investors is
showing no signs of abating. That being said, we remain cautious but
opportunistic and whilst we may dispose of individual assets on a tactical
basis, we remain committed to expanding the Company's asset base overall.
The total return outlook for 2004 is ahead of our expectations at the beginning
of this year however we remain concerned that some property prices being paid at
the moment are too high.
Shareholder Communication
In addition to the Annual and Interim Reports, the Investment Manager has also
published a two-page monthly report on the activities of the Company. In
future, as the Fund is now broadly fully invested, this monthly report will be
replaced by a quarterly performance report which will be distributed to
shareholders by email. Any shareholder who does not currently receive direct
communication from the fund manager should contact info@berringtonfm.com.
Rodney Baker-Bates
Chairman
27 July 2004
Property Holdings as at 30 June 2004
Set out below is the schedule of properties together with net annual rents
receivable. The individual valuations shown are the Prospectus values or
purchase price, but excluding the actual costs of acquisition.
PORTFOLIO LISTINGS AS AT 30 JUNE 2004
Address Use Tenure Current Net Prospectus value
Annual Rent or net purchase
Receivable cost
14-20 Watergate Street, Town centre retail Freehold #332,500 #4,775,000
Chester
Carr Office Village, 3/6 Multi-let offices Freehold #320,177 #3,415,000
White Rose Way, Doncaster
Admiral Retail Park, Retail warehouse Freehold #1,004,787 #12,300,000
Lottbridge Drove,
Eastbourne park
B&Q Warehouse, Stoneferry Retail warehouse Freehold #614,000* #10,100,000
Road, Kingston upon Hull park
Hallamshire Court, Multi-let offices Freehold #184,770 #2,460,000
Summerfield Street,
Sheffield
Meadowcourt III, Meadowhall Multi-let offices Freehold #254,910 #3,035,000
Road, Sheffield
34 Regent Street, Swindon Town centre retail Freehold #103,000 #1,374,000
66/68 High Street, Staines Town centre retail Freehold #133,200 #1,795,000
Comau Estil Unit, 10 Industrial/Warehouse Freehold #192,000 #1,920,000
Midland Road, Luton
Health & Fitness Club, Other Freehold #306,000 #3,782,000
Queen Elizabeth Barracks,
Guildford
The Whitbread Centre, Hedge Industrial/Warehouse Freehold #638,500 #7,860,000
End, Southampton
WRTL Premises, Waterside Industrial/Warehouse Long Leasehold* #138,000 #1,665,000
Park, Great Bridge, Tipton *
Area 7, Pershore Road, Industrial/Warehouse Freehold #477,302 #5,649,000
Worcester
Graylaw Trading Estate, Industrial/Warehouse Long Leasehold #211,288 #2,815,000
Wareing Road, Aintree,
Liverpool
Ropewalks One LLP Joint Venture Special Purpose n/a #500,000
Vehicle
Lunar Partnership Limited** Joint Venture Special Purpose n/a #2,000,000
* Vehicle
Orton Shopping Centre LLP Joint Venture Special Purpose n/a #1,100,000
Vehicle
TOTAL #4,910,434 #66,545,000
* Pending rent review settlement.
** Option to purchase the freehold for #1 in 2023.
*** Sold July 2004.
LATEST PORTFOLIO VALUATION (excluding Joint Ventures) 30 JUNE 2004 #72,850,000
Unaudited Consolidated Statement of Operations
for the period from 1 January 2004 to 30 June 2004
01/01/2004 01/01/2003 01/01/2003
to to to
30/06/2004 30/06/2003 31/12/2003
Unaudited Unaudited Audited
# # #
Income
Rent receivable 2,320,431 1,844,755 4,247,937
Bank & other interest 135,279 31,559 49,811
Total Income 2,455,710 1,876,314 4,297,748
Expenses
Interest payable and similar charges, including
dividends on income shares 2,169,558 1,965,365 3,981,812
Investment Manager's fees 453,780 462,002 922,381
Legal and professional fees 56,060 142,518 261,571
Property management expenses 67,894 28,615 177,180
Administration fee 46,101 32,000 96,250
Directors' fees 36,125 33,500 66,375
General expenses 70,688 107,801 151,969
Bank charges 12,133 11,448 23,104
Audit fee 15,591 15,978 22,835
Total Expenses 2,927,930 2,799,227 5,703,477
Net loss before investment result (472,220) (922,913) (1,405,729)
Realised gain/(loss) on sale of investment properties 15,319 - (75,964)
Movement in unrealised gain on revaluation of
investment properties 3,130,893 1,712,838 3,477,827
Movement in unrealised gain on revaluation of investments 700,000 - -
Net profit for the period 3,373,992 789,925 1,996,134
UK Taxation (4,778) - (50,486)
Profit transferred to reserves 3,369,214 789,925 1,945,648
Basic and diluted profit per Capital Share 34.32p 8.05p 19.82p
Unaudited Consolidated Balance Sheet as at 30 June 2004
30/06/2004 30/06/2003 31/12/2003
Unaudited Unaudited Audited
# # #
Non-current Assets
Investment properties 72,850,062 62,962,241 64,479,348
Investments 4,763,944 - 4,939,001
77,614,006 62,962,241 68,418,349
Current Assets
Cash and cash equivalents 1,236,702 196,109 3,261,222
Debtors 372,826 376,540 625,628
1,609,528 572,649 3,886,850
Total Assets 79,223,534 63,534,890 73,305,199
Current Liabilities
Creditors 970,807 970,402 993,535
Non-current Liabilities
Long term loan 43,313,584 32,265,265 40,799,228
Income Shares 20,186,998 20,072,016 20,129,506
63,500,582 52,337,281 60,928,734
Total Liabilities 64,471,389 53,307,683 61,922,269
Net Assets 14,752,145 10,227,207 11,382,930
Capital and Reserves
Share capital 981,615 981,615 981,615
Share premium 8,387,893 8,387,893 8,387,893
Reserves 5,382,637 857,699 2,013,422
Issued capital and reserves 14,752,145 10,227,207 11,382,930
Net Asset Value per Capital Share 150.28p 104.19p 115.96p
The unaudited financial statements on pages 4 to 8 were approved at a meeting of
the Board of Directors held on 27 July 2004 and signed on its behalf by:
Rodney Baker-Bates, Chairman )
)
Peter Dickson, Director )
Unaudited Company Balance Sheet
as at 30 June 2004
30/06/2004 30/06/2003 31/12/2003
Unaudited Unaudited Audited
# # #
Non-current Assets
Investment in subsidiary companies 10,000,002 10,630,002 10,000,002
Investment 2,684,369 - 2,000,000
Loans to subsidiary companies 58,608,355 49,707,590 56,537,661
71,292,726 60,337,592 68,537,663
Current Assets
Cash and cash equivalents 100,000 30,713 20,496
Debtors 27,811 - -
127,811 30,713 20,496
Total Assets 71,420,537 60,368,305 68,558,159
Current Liabilities
Creditors 544,520 49,317 170,471
Non-current Liabilities
Long term loan 43,313,584 32,265,265 40,799,228
Income shares 20,186,998 20,072,016 20,129,506
63,500,582 52,337,281 60,928,734
Total Liabilities 64,045,102 52,386,598 61,099,205
Net Assets 7,375,435 7,981,707 7,458,954
Represented by:
Capital and Reserves
Share capital 981,615 981,615 981,615
Share premium 8,387,893 8,387,893 8,387,893
Reserves (1,994,073) (1,387,801) (1,910,554)
Issued capital and reserves 7,375,435 7,981,707 7,458,954
The unaudited financial statements on pages 4 to 8 were approved at a meeting of
the Board of Directors held on 27 July 2004 and signed on its behalf by:
Rodney Baker-Bates, Chairman )
)
Peter Dickson, Director )
Unaudited Consolidated Cash Flow Statement
for the period from 1 January 2004 to 30 June 2004
01/01/2004 01/01/2003 01/01/2003
to to to
30/06/2004 30/06/2003 31/12/2003
Unaudited Unaudited Audited
# # #
Operating activities
Rent received 2,334,544 2,347,787 4,372,393
Bank and other interest received 135,279 31,559 49,811
Expenses paid (965,132) (928,862) (1,806,179)
Interest paid and similar charges, including
dividends on Income Shares (1,680,788) (1,965,365) (3,841,911)
Net cash outflow from operating activities (176,097) (514,881) (1,225,886)
Investing Activities
Purchase of investments - - (4,939,001)
Purchase of investment properties (6,088,799) (11,822,754) (15,226,671)
Sales of investment properties 865,319 - 3,674,036
Sale/repayment of investments 875,057 - -
Net cash outflow from investing activities (4,348,423) (11,822,754) (16,491,636)
Financing Activities
Issue costs paid on issuance of Capital Shares - - (17,606)
Issue costs paid on issuance of Income Shares - - (37,394)
Draw down of long term loan 2,500,000 10,500,000 19,000,000
Net cash inflow from financing activities 2,500,000 10,500,000 18,945,000
(Decrease) Increase in cash and cash equivalents (2,024,520) (1,837,635) 1,227,478
Cash and cash equivalents at 01 January 2004 3,261,222 2,033,744 2,033,744
Cash and cash equivalents at 30 June 2004 1,236,702 196,109 3,261,222
Notes to the Unaudited Financial Statements
for the period from 1 January 2004 to 30 June 2004
1.The results for the six-month period, which are not statutory accounts and
have not been audited, have been prepared on the same basis as set out in the
audited accounts for the period ended 31 December 2003.
2.The results for the year ended 31 December 2003 constitute non-statutory
accounts extracted from the statutory accounts for that period on which the
auditors gave an unqualified report.
3.All turnover and operating profit arose from continuing operations.
4.Basic and diluted profit per Capital Share is based on the net profit for the
period and on 9,816,146 Capital Shares in issue.
5.Dividends payable on Income Shares:
01/01/2004 01/01/2003
Rate Rate to to
No. of Income pence pence 30/06/2004 30/06/2003
Shares 2004 2003 # #
First interim dividend paid 6 April 2004 20,848,140 2.00 3.00 416,963 625,444
(declared March 2004)
Second interim dividend paid 8 July 2004 20,848,140 2.00 2.00 416,963 416,963
(declared June 2004)
833,926 1,042,407
6.The figures for both freehold and long leasehold properties at 30 June 2004
and 31 December 2003 are based on valuations determined by Knight Frank.
7.A copy of this statement has been sent to every shareholder. Further copies
are available from the Company's registered office.
8.The interim financial statements were approved at a meeting of the Board of
Directors held on 27 July, 2004.
Directors: Rodney Baker-Bates
Tim Chesney
Peter Dickson
William Kay
Iain Stokes
Investment Committee: Richard Burrell
Peter Hadley
Philip Gadsden
Duncan Owen
Andrew Bird
Registered Office: East Wing
Trafalgar Court
Admiral Park
St. Peter Port
Guernsey
Channel Islands
GY1 6HJ
Investment Manager: Berrington Fund Management Limited
East Wing
Trafalgar Court
Admiral Park
St. Peter Port
Guernsey
Channel Islands
GY1 6HJ
Investment Advisers to the Insight Investment Management Limited
Investment Manager: 33 Old Broad Street
London
EC2N 1HZ
Barlows Asset Management Limited
Chepstow House
Dee Hills Park
Chester
CH3 5AR
Administrator and Mourant Guernsey Limited
Secretary: East Wing
Trafalgar Court
Admiral Park
St. Peter Port
Guernsey
Channel Islands
GY1 6HJ
Channel Islands Mourant Capital Markets Services
Sponsor: Limited:
22 Grenville Street
St. Helier
Jersey
Channel Islands
JE4 9EX
Auditors: Ernst & Young LLP
14 New Street
St. Peter Port
Guernsey
Channel Islands
GY1 4AF
Independent Property Knight Frank, Chartered Surveyors
Valuer: 20 Hanover Square
London
W1S 1HZ
Principal Bankers: Bradford & Bingley PLC
Croft Road
Crossflatts
Bingley
West Yorkshire
BD16 2UA
Legal Advisers: Carey Olsen
7 New Street
St. Peter Port
Guernsey
Channel Islands
GY1 4BZ
Stockbroker: Collins Stewart Limited
88 Wood Street
London
EC2V 7QR
This information is provided by RNS
The company news service from the London Stock Exchange
END
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