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Wynnstay Properties (WSP)

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Tuesday 20 June, 2006

Wynnstay Properties

Final Results

Wynnstay Properties PLC
20 June 2006


WYNNSTAY PROPERTIES PLC
20 JUNE 2006


             Wynnstay Properties PLC - 'the Company' or 'Wynnstay'

               Preliminary Results for Year Ended 25th March 2006



When I wrote to you 12 months ago, I cautioned that the year under review would
be a challenging one for your Company. In the event, the results are
satisfactory with profits proving to be resilient, despite adverse cost factors,
whilst the value of the property portfolio continued to grow strongly, resulting
in a substantial uplift in net asset value per share.


Overview of results

Profits before property disposals and taxation were £97,000 lower than last
year, reflecting a reduction in rents and a one-off pension contribution to
which I refer below. However, the year end property revaluation produced a
further satisfactory increase in the value of the portfolio and, as a result,
Shareholders' Funds rose from £11.90 million to £13.64 million.


The results may be summarised as follows:

                                               Change        2006         2005

  • Profit before property                   - 14.9%     £553,000     £650,000
    disposals and taxation:

  • Profit on ordinary activities            - 49.4%     £553,000   £1,093,000
    before taxation:

  • Basic Earnings per share:                - 54.6%        12.2p        26.9p

  • Normalised Earnings per share:           - 15.9%        12.2p        14.5p

  • Dividends per share, paid and            + 3.75%         8.3p         8.0p
    proposed:

  • Net asset value per share:               + 14.6%         432p        377p*



* Restated in accordance with accounting standard FRS 21 (Note 2).


Property Management

A 7% decline in rental income, compared with the previous year, resulted from
our office property in Epsom having become vacant at the half year stage,
following the expiry of the occupational lease and also reflected the sale of
the Bognor Regis property in February 2005.


There has been a considerable amount of management activity in the portfolio
during the year, with a number of rent reviews, lease renewals and new leases
having been successfully negotiated. We completed the refurbishment and
conversion of a large industrial unit at St Neots, Cambridgeshire into three
smaller self-contained units and I am pleased to report that all are now income
producing. A further unit at this location has recently become vacant and is
currently being marketed.


A proactive engagement with our tenants resulted in there being no bad debts
during the year.


Portfolio

For the first time for several years, there have been no investment purchases or
sales. We looked at a number of opportunities that were put to us or which we
identified but where, after evaluation, we decided not to proceed. In most
cases, the prices being sought did not appear sufficiently attractive on
investment grounds. Whilst we keep under review the possibility of profitably
disposing of older properties, where growth prospects appear limited, we remain
mindful of the need to maintain a strong rental income stream.


Our Independent Valuers, Sanderson Weatherall, revalued the Company's portfolio
at £20.35 million, an increase of 8.6% compared with £18.74 million last year.
Increases were seen across almost the entire portfolio, with the more recently
acquired industrial properties continuing to performing particularly well.


As I said in my interim statement, in relation to our office property in Epsom,
when an investment of this nature becomes vacant, there is an opportunity to
consider alternative strategies. In parallel with marketing the building for its
existing office use we have decided to take advantage of the continuing strength
in the residential market and have applied for planning consent to construct an
additional floor whilst converting the two existing upper floors to provide a
total of 11 residential units with the ground and first floors remaining as
offices. If our application proves successful, this should realise substantial
added value. I hope to have further information to report at the time of the
Annual General Meeting at the end of July.


Within the portfolio, following the revaluation, the industrial sector now
accounts for 55% by value, with the balance of 45% divided equally between
offices and retail.


Borrowings and Gearing

Net borrowings at the year end were £5.68 million, compared with £5.93 million
and, as a result of Shareholders' Funds having increased by £1.74 million, net
gearing at the year end fell to 42% compared with 50% as restated last year.


We have recently successfully renewed and increased our loan facility with N.M.
Rothschild & Sons Limited for a further five year period on improved terms.


Dividend

The Directors are recommending a total dividend for the year of 8.3p per share,
compared with 8.0p last year, representing a 3.75% increase. An interim dividend
of 2.3p was paid in December 2005 and, subject to approval of Shareholders at
the Annual General Meeting, a final dividend of 6.0p per share will be paid on
3rd August 2006 to Shareholders on the register on 7th July 2006.


Outlook

Until we have reinvested recent sale proceeds and have come to a decision on the
future of the Epsom property, rental income in the current year is expected to
show a modest decline. On the other hand, costs should be somewhat lower which
will assist in maintaining profit levels. The results this year will benefit
from the release of deferred tax provisions no longer required amounting to
£159,000. It is difficult to predict at this stage whether property values will
continue to grow at similar levels to those seen over recent years.


The Board's view is that in the current market conditions, it remains important
to be very selective in only making property acquisitions which will increase
shareholder value in the medium to longer term. Nevertheless, with our modest
levels of gearing and renewed borrowing facility, we remain in a strong
financial position to make further investments if the right opportunities become
available. Your Board remains committed to growing the Company over the coming
years.


Board and Management Changes

Michael Cheesmer, who retired in March 2006, joined Wynnstay in its centenary
year, 1986, when the Company's portfolio was valued at just £3.6 million,
compared with its present value of over £20 million. The intervening years have
seen many ups and downs in the economy, in the property market as well as a
number of changes at Wynnstay. Michael has made an extremely valuable
contribution to the development of your Company over these past twenty years,
during which time he remained totally committed to Wynnstay. In recognition of
his services, the Board agreed to enhance his pension arrangements by making a
special net one-off contribution of £57,000 to his scheme during the year.
Shareholders will be aware that Wynnstay is not a company which has paid large
bonuses in the past, nor has Michael benefited from share options during his
long term of office. In such circumstances the Board considered that this
payment was fully merited and I am sure you will join with me in wishing him and
his wife, Hazel, a long and happy retirement together. We look forward to
continuing to see them both, as Shareholders, at our future Annual General
Meetings.


Michael has been succeeded as Managing Director by Paul Williams, who joined
Wynnstay at the end of February 2006 following a recruitment programme conducted
by professional consultants. Paul, aged 48, is a Chartered Surveyor and has
spent his entire career in commercial property including, latterly, a fourteen
year period with MEPC. I welcome him to the Company and am very confident that
he will play a major part in taking the Company forward.


Ian Lockhart has been our longest serving director, having joined the Board in
1972. He has been a source of considerable wisdom and experience in overseeing
Wynnstay's development and we are very sorry that ill health forced him to take
the decision to retire at the end of the financial year. I am sure that you will
wish to join with me in sending our thanks and best wishes to both Ian and to
his wife Rosanna.


Alan Domin, our property manager, retired at the end of 2005, having first
joined Wynnstay in 1983. He dealt with a wide range of practical issues both in
relation to the Company's portfolio as well as in managing properties for
clients. We are grateful to him and extend our best wishes for a long and happy
retirement.


Annual General Meeting

The Company's Annual General Meeting will be held at the Royal Automobile Club
at 12 Noon on Thursday 27th July 2006.



Philip G.H. Collins
Chairman





CONSOLIDATED PROFIT AND LOSS ACCOUNT YEAR ENDED 25TH MARCH 2006

                                     2006                          2005
                                                                 Restated
                             £'000          £'000          £'000          £'000
Turnover
Gross Rental Income                         1,560                     1,676
Fees and                                       17                            17
Commissions
                                   --------------                --------------
                                            1,577                         1,693
Property Outgoings                           (62)                          (88)
                                   --------------                --------------
                                            1,515                         1,605
Administrative                              (589)                         (523)
Expenses
                                   --------------                --------------
Operating Profit                              926                         1,082
Profit on Disposal
of Investment
Properties                                      -                           443
                                   --------------                --------------
                                              926                         1,525
Finance Costs
Interest Payable             (385)                         (442)
Investment Income               12                            10
                    --------------                --------------
                                            (373)                         (432)
                                   --------------                --------------
Profit on Ordinary
Activities before
Taxation                                      553                         1,093

Taxation on Profit
from Ordinary
Activities                                  (168)                         (243)
                                   --------------                --------------
Profit after
Taxation
Attributable to                               385                           850
Ordinary
Shareholders

Dividends                                   (253)                         (243)
                                   --------------                --------------
Retained Profit for                           132                           607
the Financial Year
                                         ========                      ========

Basic Earnings per                          12.2p                         26.9p
Share
Normalised Earnings                         12.2p                         14.5p
per Share



CONSOLIDATED BALANCE SHEET AT 25TH MARCH 2006

                                         2006                          2005
                                                                     Restated
                                £'000           £'000        £'000           £'000
Fixed Assets
Tangible Assets                               20,357                        18,751
Quoted Investments                                 1                             1
                                      --------------                --------------
                                              20,358                        18,752
Current Assets
Debtors                            35                            84
Cash at Bank and in               316                           272
Hand
                       --------------                --------------
                                  351                           356

Creditors: Amounts
falling due within one
year                            (758)                         (704)
                       --------------                --------------
Net Current                                    (407)                         (348)
Liabilities
                                      --------------                --------------
Total Assets Less                             19,951                        18,404
Current Liabilities

Creditors: Amounts
falling due after more
than one year                                (6,000)                       (6,200)
                                      --------------                --------------
                                              13,951                        12,204

Provisions for                                 (314)                         (304)
Liabilities and
Charges
                                      --------------                --------------

Net Assets                                    13,637                        11,900
                                            ========                      ========

Capital and Reserves:
Share Capital                                    789                           789

Reserves
Capital Redemption                205                           205
Reserve
Share Premium Account           1,135                         1,135
Capital Reserve                   151                           151
Revaluation Reserve             6,277                         4,672
                       --------------                --------------
Non-Distributable                              7,768                         6,163
Reserves

Profit and Loss                                5,080                         4,948
Account
                                      --------------                --------------
Equity Shareholders'                          13,637                        11,900
Funds
                                            ========                      ========





CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 25TH MARCH 2006


                                        2006                          2005
                                £'000          £'000          £'000          £'000

Cash Flow from Operating                         1,004                         1,163
Activities

Returns on Investment
and Servicing of Finance
Interest Received                    10                            10
Interest Paid                     (388)                         (506)
                         --------------                --------------
Net Cash (Outflow) from
Returns on Investment
and Servicing of Finance                         (378)                         (496)

Taxation Paid                                    (127)                         (164)

Capital Expenditure and
Financial Investment
Purchase of Tangible                (3)                       (1,571)
Fixed Assets
Disposal of Tangible                  1                         1,468
Fixed Assets
                         --------------                --------------

Net Cash (Outflow) from                            (2)                         (103)
Investing Activities

Equity Dividends Paid                            (253)                         (243)
                                        --------------                --------------
Net Cash Inflow before                             244                           157
Financing

Financing
Drawdown of Bank Loan                                -                         1,342
Repayment of Bank Loan                           (200)                       (1,742)
                                        --------------                --------------

Increase/(Decrease) in                              44                         (243)
Cash in the Period
                                              ========                      ========


Reconciliation of Net
Cash Flow to Movement in
Net Debt
Increase/(Decrease) in                              44                         (243)
Cash in the Period
Cash Outflow from Debt                             200                           400
Financing
                                        --------------                --------------
Movement in Net Debt in                            244                           157
the Period

Net Debt at 25th March                         (5,928)                       (6,085)
2005
                                        --------------                --------------
Net Debt at 25th March                         (5,684)                       (5,928)
2006
                                              ========                      ========



OTHER FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2006



                                                         2006               2005
                                                                          Restated
                                                        £'000              £'000

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Profit for the Financial Year after Taxation                  385                850
Taxation on Realised Property Revaluation                       -               (66)
Unrealised Surplus on Revaluation of                        1,605                739
Investment Properties
                                               ------------------ ------------------
Total Recognised Gains and Losses for the Year              1,990              1,523
                                                      ===========        ===========


The Company has adopted FRS 21 in the year ended 25th March 2006. Although this
has not impacted on the recognised gains or losses, in either the current or
prior years, the net assets of the prior year have increased by £180,000.



RECONCILIATION OF MOVEMENT OF

SHAREHOLDERS' FUNDS
Opening Shareholders' Funds as at 26th March               11,720             10,449
2005 as previously reported
Prior year adjustment - Final Dividend                        180                171
                                               ------------------ ------------------
Opening Shareholders' Funds as at 26th March               11,900             10,620
2005 - restated

Profit for the Financial Year after Taxation                  385                850
Dividends                                                   (253)              (243)
Other recognised Gains and Losses - as per
Statement of Total Recognised Gains and Losses
                                                            1,605                673
                                               ------------------ ------------------
Closing Shareholders' Funds as at 25th March               13,637             11,900
2006
                                                      ===========        ===========

NOTE OF HISTORICAL COST PROFITS AND LOSSES
Profit on Ordinary Activities before Taxation                553               1,093
Realisation of Property Revaluation Gains on                   -                 572
Previous Years
                                              ------------------ ------------------
Historical Cost Profit on Ordinary Activities                553               1,665
before Taxation
                                                     ===========        ===========
Historical Cost Profit for the Year Retained
after
                                                             132              1,179
Taxation and Dividends
                                                     ===========        ===========





Notes:



1. The financial information above does not constitute full accounts within the
meaning of Section 240 Companies Act 1985 as amended (the 'Act'). Full accounts
in respect of the year ended 25th March 2005, on which the auditors reported
without qualification and which contained no statement under Section 237 (2) or
(3) of the Act, have been delivered to the Registrar of Companies.


2. In compliance with accounting standard FRS 21, 'Events after the Balance
Sheet Date', dividends which have been declared after the balance sheet date are
no longer recognised as a liability. Accordingly, a prior year adjustment has
been made to reflect this change in accounting policy. As a result of adopting
this accounting standard, retained earnings increased by £171,000 as at 25th
March 2004, and by £180,000 as at 25th March 2005.

                                                            2006            2005
                                                           £'000           £'000

Final prior year dividend paid in year of 5.7p
per share                                                    180             171
(2004: 5.4p per share)

Interim current year dividend paid in year of
2.3p per share                                                73              72
(2005: 2.3p per share)
                                                 --------------- ---------------
                                                             253             243
                                                 --------------- ---------------


3. Basic earnings per share have been calculated on profits after taxation
attributable to Shareholders of £385,000 (2005: £850,000) and on 3,155,267
ordinary shares being the weighted average number of shares in issue in both
periods. Normalised earnings per share have been calculated on profits after
taxation attributable to Shareholders, excluding profit on property disposals,
of £385,000 (2005: £458,000) on the same weighted average of 3,155,267 shares.


4. A final dividend of 6.0p (2005: 5.7p) per share is being recommended and will
be paid on 3 August 2006 to Shareholders on the register at the close of
business on 7 July 2006.


5. The 2006 Annual Report & Financial Statements will be posted to Shareholders
shortly and copies may be obtained by writing to the Secretary, Wynnstay
Properties PLC, Cleary Court, 21 St. Swithin's Lane, London EC4N 8AD.


6. The Company's Annual General Meeting will be held at 12 noon on Thursday 27th
July 2006 at The Royal Automobile Club, 89 Pall Mall, London SW1Y 5HS.



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