Final Results
FOR IMMEDIATE RELEASE
21st March 2005
LONDON & ASSOCIATED PROPERTIES PLC:
PRELIMINARY RESULTS FOR 12 MONTHS TO 31ST DECEMBER 2004
London & Associated Properties is fully listed and is focussed on the
acquisition of, and long term management of, well located shopping centres and
other retail investments. Today it owns and manages £250m of retail
investments. Over the past 12 months its share price has risen 75% (96% since
January 2004) and LAP was one of the best performing property shares during
2004.
HIGHLIGHTS
* Fully diluted net assets grew to 111.02p a share + 25%
* Wholly owned shopping centres valued at £108.3m + 9.2%
* Value of joint venture properties rose to £124m + 14%
* Annual rent roll currently £7.8m against ERV of £8.4m
* Pre-tax profits increased to £3.02m from £2.81m + 8%
* Final dividend of 1.65p per share recommended + 8.2%
* Compound dividend growth over past five years + 8.45%
* Interim dividend to be restored during current year
* Planning consent for partial redevelopment of King Edward Court, Windsor
secured and virtually all new space pre-let
'LAP is currently in an unprecedented position of strength. We have a number of
significant value enhancing projects underway, we have over £30m in cash and
undrawn facilities, and we have a carefully chosen core portfolio of shopping
centres where tenant demand is at a record level. I therefore look forward with
confidence to the future,' Michael Heller, Chairman.
-more-
Contact:
John Heller, Chief Executive, LAP Tel: 020 7415 5000
Robert Corry, Finance Director, LAP. Tel: 020 7415 5000
Baron Phillips, Baron Phillips Associates Tel: 020 7920 3161
CHAIRMAN'S STATEMENT
It gives me great pleasure to report on a year of excellent progress at London
& Associated Properties in 2004. We achieved a substantial uplift in the net
asset value of the Company reflecting both our management strategy and strong
investor demand for shopping centres.
Over the 12 months to 31 December 2004 LAP's fully diluted net assets grew by
25% to 111.02p a share from last year's 88.58p reflecting the uplift in our net
assets which, including our listed share portfolio at market value, rose to £
91.2 million against £72.8 million in 2003. Indeed, when the market value of
our 42% owned associate Bisichi Mining plc is taken into account, fully diluted
net assets further rise to 114.71p a share and net assets stand at £94.2
million.
Our wholly owned shopping centres increased in value by 9.2% over the year to £
108.3 million while those owned by Analytical Properties, our joint venture
with Bank of Scotland, grew by 14% to £124 million. Today LAP owns or manages,
on behalf of Bisichi, Dragon Retail Properties and Analytical, retail
properties valued at over £250 million compared to £219 million a year ago.
Pre-tax profits for the period rose by 8% from £2.81 million to £3.02 million.
Fully diluted earnings per share fell marginally to 2.80p from 2.97p due to an
increased tax charge.
The Board is recommending a final dividend of 1.65p a share, an increase of
8.2% which, if agreed by shareholders, will be paid on 8 July 2005 to those
shareholders on the register as at 17 June 2005. Over the past five years
there has been a compound dividend growth of some 8.45%.
The Board feels it is no longer appropriate to issue shares as an alternative
to a cash dividend at a discount to net assets, which is dilutive, and
consequently there will be no scrip alternative this year. However, the Board
intends to restore payment of an interim dividend during the course of the
current year.
Sales during the year amounted to £4.4 million. Since the year end, we have
also disposed of The Moor Centre at Brierley Hill, West Midlands for £4.85
million. Total sales over the past two years amount to over £20 million and the
proceeds have been added to our cash balances. This reflects our ongoing
strategy of selling mature properties into a strong investment market.
On a like for like basis, the net rental income from our directly owned
portfolio rose by £280,000. This figure is made up of £416,000 of new lettings
and rent reviews, while we lost £136,000 as units became empty. Of this lost
income, some 70% was as a result of deliberately vacating units pending their
redevelopment.
The annual rent roll of our portfolio now stands at £7.8 million against £7.9
million previously. Voids remain extremely low and, including those held empty
for redevelopment, account for less than 2% of the portfolio. The estimated
rental value of the portfolio is £8.4 million.
The biggest event during 2004 was our success in obtaining planning permission
for the redevelopment of part of King Edward Court, Windsor, which is owned by
Analytical Properties in a joint venture with the Bank of Scotland. Our ability
to obtain this planning consent at the first attempt in a sensitive location
reflects our ability to work closely and successfully with local authorities
and I congratulate our management team on achieving this. Virtually the entire
redevelopment, amounting to some 170,000 square feet gross, is pre-let and will
increase the amount of retail space at King Edward Court by over 50,000 square
feet.
The tenants to whom we have pre-let units are of the highest quality, and once
the scheme is completed we anticipate a substantial uplift in capital value as
income across the entire shopping centre increases to match the rental levels
obtained in these new units.
Development is currently underway and funding for the anticipated £16.5 million
construction costs is being provided by the Bank of Scotland. A contribution
towards the cost of the development will also be provided by the Royal Borough
of Windsor and Maidenhead as freeholder.
During the year we invested £9.4 million in upgrading and improving our wholly
owned portfolio. This included the £7.8 million acquisition of a substantial
15,000 square foot retail unit in Fargate which adjoins our Orchard Square
shopping centre in Sheffield. We now have extensive frontage to the city's
principal retail thoroughfare, and have the opportunity to amalgamate this unit
into our shopping centre over the medium term. We also acquired for £560,000 a
Post Office adjacent to our Mall shopping centre in Dagenham, which opens up a
number of development opportunities which we are exploring.
During the year we acquired 750,000 of our own shares at an average price of
76.6p which have been retained as Treasury shares. The Board continues to look
for ways to create shareholder value and, in the absence of suitable property
investment opportunities, may acquire further shares in the future.
Elsewhere I am pleased to report that Dragon Retail Properties, our joint
venture with Bisichi, has also performed well with net assets increasing by
14.3% to £3.2 million following a number of profitable disposals. Bisichi
Mining has had a good year with profit before tax rising to £2.0 million (2003:
£1.5 million). Bisichi's South African coal mining subsidiary has undertaken
several initiatives during the year that should ensure further good progress
over the coming periods with increased coal production and a higher average
selling price.
I would like to take this opportunity to thank all my Board colleagues, LAP
staff and advisors for their hard work over the past 12 months. This has been
an exceptional year for LAP and this level of progress would not have been
possible without the contribution of a large number of people.
LAP is in an unprecedented position of strength. We have a number of
significant value enhancing projects underway, we have over £30 million in cash
and undrawn facilities, and we have a carefully chosen core portfolio of
shopping centres where tenant demand is at a record level. I therefore look
forward with confidence to the future.
Michael Heller
Chairman
21 March 2005
CHIEF EXECUTIVE'S REPORT
The year under review was another one of outstanding growth in our investment
portfolio. At the end of December 2004 the gross value of our directly owned
portfolio, comprising town centre shopping centres, was valued at £108.3
million representing growth of 9.2% on a like for like basis. At the same
time, we sold £4.4 million of mature property and made two strategic
acquisitions adjacent to our shopping centres in Sheffield and Dagenham at a
combined gross cost of £8.4 million.
Analytical Properties, our joint venture with the Bank of Scotland, also had an
exceptional year. Its two properties, King Edward Court in Windsor and Church
Square in St Helens, were valued at £124 million, an uplift of 14%. LAP
manages these properties on behalf of Analytical, and today LAP owns or manages
more than £250 million of property on behalf of Analytical, Bisichi Mining and
Dragon Retail Properties.
During 2004 we contracted further net rents in our directly owned portfolio of
over £280,000 following a series of new lettings and rent reviews. Many of
these were at record rents, and have, in part, been achieved because we still
have an extremely low void level of 2% of gross rental income. Rental growth
has also been achieved as we have developed new units to meet modern retailer
requirements. These units are then capable of attracting the best retailers
able and willing to pay top rents.
Rental income from our directly owned properties now stands at £7.8 million per
annum compared to £7.9 million in 2003. This is a particularly satisfactory
performance following the sale of over £20 million of directly owned property
in the last two years. This year is the first time that the full impact of the
lost income, amounting to £815,000, has been reflected in the profit and loss
account, as the majority of disposals took place in late 2003. Much of the
rental income lost in these disposals has not yet been replaced except for the
strategic properties acquired in Sheffield and Dagenham. This shows the
underlying growth in the core portfolio which we have retained.
I will now report in greater detail on our principal shopping centres.
Directly held portfolio
Orchard Square, Sheffield
In March, we acquired the freehold of the Dixons unit which is immediately
adjacent to Orchard Square for £7.8 million gross. The acquisition was paid
for entirely out of a revolving credit facility provided by the Royal Bank of
Scotland. Dixons' lease runs until 2012 at over £400,000 per annum with a rent
review in 2007. The acquisition creates an opportunity, over the medium term,
to develop a substantial, flagship unit of about 20,000 square feet with
extensive frontage on to Fargate.
Elsewhere at Orchard Square, we have, once again, created a unit on land that
was previously non-income producing. We developed a unit to the rear of the
shopping centre at a cost of about £200,000 which we have let to Subway, the
international sandwich retailer, at £35,000 a year. This rent equates to
approximately £68 a square foot, further underpinning future rent reviews at
Orchard Square.
The rent review programme continues to bring excellent rental growth, and,
during the course of 2004, we achieved net growth in rents of over £76,000 a
year, which was ahead of expectations.
Saxon Square, Christchurch
Saxon Square continues to perform well for us and retailer demand there is as
strong as ever. During 2004 we continued negotiations with the planning
officers at the local authority over the redevelopment of a number of small
units at the weakest end of the shopping centre. We are looking to build a
unit of around 5,000 square feet to act as an anchor at that end, as well as
approximately 10 residential units. Progress has to date been slow although it
must be recognised that this is a sensitive site in a conservation area.
However, both LAP and the council are keen to find a mutually satisfactory
solution, and I remain confident that this will be achieved in the near future.
Elsewhere in the centre, we split a unit previously let at £21,900 per annum
and re-let part of it to Toni and Guy hairdressers at an annual rent of £
32,500. The remainder of the unit will, in due course, be amalgamated with two
small adjacent shops.
We have also obtained planning consent for a café in the centre and are at an
advanced stage of negotiation with a national coffee bar operator to take a
lease. The unit will be created out of what was previously ancillary space in
an adjacent unit.
We have achieved good growth at rent review at Saxon Square and we added £
57,000 to the annual rent roll in 2004.
The Mall, Dagenham
During 2004 we acquired for £560,000 the long leasehold of the Post Office
adjacent to The Mall. This unit can be amalgamated into our centre, but more
importantly, ownership of the Post Office enables us to expand our shopping
centre to the rear. We are exploring with our professional team a number of
exciting opportunities which have only become available following this
purchase.
During the year we contracted a net incremental rent of £79,000 per annum.
Kings Square, West Bromwich
Kings Square continues to be popular with retailers and during the year we
achieved four new lettings in the centre. These were only possible as a result
of our active participation as we negotiated surrenders with and relocated some
existing tenants, and redeveloped one large unit into two better configured
ones. This enabled us to introduce a number of new national tenants to the
Centre, all at substantial increases in annual rent compared to their
predecessors. These include Cardfair, Raid Shoes and Vodafone, which is paying
over £70 per square foot compared to the previously achieved highest rent of £
65.
Joint Ventures
King Edward Court, Windsor
It was a year of dramatic progress at King Edward Court. In July we were
granted planning consent for a development that will see us demolish
approximately 55,000 square feet of buildings comprising an old Waitrose
supermarket, a snooker club and a number of small lock-up shops, as well as
27,000 square feet of offices. We will construct in their place over 100,000
square feet of new prime retail space and a 113 bed hotel which was pre-let at
the end of 2003 to Travelodge. We will also refurbish the town's principal car
park that forms part of our centre.
The retail space has been divided into four units, totalling some 60,000 square
feet. They have been pre-let to Zara and Hennes who are new to Windsor, as
well as New Look which is relocating from Peascod Street, traditionally seen as
Windsor's prime shopping location. On the first floor, we are creating a new
42,500 square foot supermarket for Waitrose. These units, plus the Travelodge
hotel, will produce £2.2 million per annum gross and we estimate a total annual
rental value of over £2.4 million for this block when all lettings are
completed. The previous rents here totalled £1.1 million a year. These figures
do not allow for the additional income that we anticipate generating from the
car park following its refurbishment.
The new lettings equate to £125 per square foot compared to a current rental
level of between £97 and £101 per square foot, and rents passing at the time of
acquisition of around £80 per square foot. We have deliberately retained one
5,000 square foot unit with a view to marketing it towards the end of 2005. We
believe that we will achieve higher rental levels as the development nears
completion.
Although demolition is underway, the construction contract will be awarded in
the next three months. We anticipate construction costs of around £16.5
million including the car park. The Council, as freeholder, is contributing
towards these costs approximately pro-rata to the head lease gearing. The
balance of the financing will be provided by the Bank of Scotland as a
development loan. Construction is scheduled to complete in late 2006.
Waitrose is maintaining its presence at King Edward Court during the
construction period by taking a temporary lease at a rent of £150,000 per annum
on a 4,500 square foot unit which we created by extending a double unit to the
rear. The unit had previously been let to Superdrug at an annual rent of £
118,000. Waitrose will vacate this unit as soon as its new store is ready and
we are already aware of strong tenant demand for this type of larger unit in a
prime position.
Elsewhere at King Edward Court, the lease renewals of ten units have led to
three tenants deciding to leave. The largest of these units was let to Thomas
Cook at £87,000 per annum. We are currently on site to divide this poorly
configured unit into two better shaped shops. These have been pre-let to Costa
Coffee, which is new to the shopping centre, and to Timpsons, the national
retailer, which was displaced by the redevelopment of its previous unit. The
total rent for these units will be over £105,000 a year and construction costs
will be around £200,000.
The remaining two vacant units, which are next door to each other, will be
amalgamated and extended to create a single unit with approximately 3,600
square feet of trading space at ground floor. Preliminary interest from
retailers has been most encouraging, and this unit, along with the one let
temporarily to Waitrose, will meet some of the demand for medium size units
that currently cannot be fulfilled within the town.
Church Square, St Helens
The first full year of Analytical's ownership of this shopping centre has been
a success, and we have exceeded the targets that were set at the time of
acquisition.
In March, Argos vacated its shop which was large and poorly configured. We
divided the unit into two and these units have now been let to St Helens Rugby
Club and Gamestation at a total rent of £137,500 a year compared to £122,000
previously. Costs of splitting the unit were £150,000.
In 2004, we contracted an additional £193,000 of annual rent at review which
exceeded estimated rental values at the time of acquisition. In addition, we
contracted a further £220,000 a year of space through new lettings. During our
ownership since August 2003, the rent has increased by over 6% to £5.5 million
a year.
We continue to work closely with the local authority to explore ways of
extending the shopping centre to create additional retail space. Interest from
retailers is encouraging and we expect to continue to make progress during the
coming year. Any development will be subject to negotiating with occupational
tenants and should therefore be considered a medium term project.
In line with our ongoing policy, we have continued to dispose of properties
where we no longer see opportunities to grow rental income and capital values.
During 2004 we disposed of Hebburn Shopping Centre in Hebburn, South Tyneside
for £4.4 million in cash. We have also since the year end disposed of The Moor
Centre, Brierley Hill for £4.85 million in cash. Both of these sales were at a
surplus to book value.
We currently have no further properties under offer although we continue to
look critically at all of our portfolio and will dispose of any investments
whose potential we feel we have maximised.
The year has started well and demand for our shops from occupiers continues to
be encouraging. I remain confident as we progress through 2005.
John Heller
Chief Executive
21 March 2005
FINANCIAL DIRECTOR'S REPORT
Cash Flow
The cash and facilities currently available to the group have increased to over
£30 million (2003: £20 million). The main reason for this increase was the
sale of our investments at Hebburn and, since the year end, at Brierley Hill.
The increase also reflects the negotiation of new banking facilities together
with the cash generated from our property portfolio.
In April 2004, we signed a new seven year £20 million Revolving Credit
Facility. To date we have drawn £8.4 million to finance the strategic purchase
of the new Dixons unit in Sheffield and the Post Office in Dagenham.
During the year we purchased 750,000 shares into treasury at a cost of £
581,000. This was paid for with cash below net asset value per share, thus
improving the net asset value and earnings per share.
We now have 51.3% of our term debt hedged. 43.3% is at fixed rates of interest
with the balance protected by an 'interest rate collar' to ensure we are not
exposed to any wild fluctuations in interest rates. The remainder of our
floating rate debt is linked to LIBOR.
Profit & Loss
Despite property disposals which resulted in a loss of rental income of £
815,000 in 2003, the company's rental income was £7.8 million (2003: £7.9
million). This reflects the active management of our portfolio.
Following the sale of properties in 2002 and 2003 the increased cash on deposit
has led to a rise in interest receivable to £780,000 (2003: £330,000).
Even though the base rate has increased from 3.75% to 4.75% during 2004, our
average cost of debt has risen only marginally to 7.5% (7.3% in 2003). This is
a result of our prudent debt management and the hedging strategies we have
adopted. Group interest payable was £7.1 million (2003: £5.7 million), of
which £3.4 million (2003: £2.3 million) relates to joint ventures and
associated companies. The remaining £3.7 million (2003: £3.4 million) is
covered 1.7 times (2003: 1.7 times) by the company's net income.
Taxation
Current year tax charge is 23.8% (2003: 14.4%). Last year's tax charge was
unusually low due to the release of the provisions for capital allowances
relating to properties sold, under the FRS 19 Accounting Standard.
Balance Sheet
The group property portfolio, which includes the properties owned by Bisichi,
Dragon Retail Properties and Analytical, grew in the year by 11.9% on a like
for like basis. The net assets of the group have grown by 25% to £91.2 million
(2003: £72.8 million), while the diluted net assets per share rose by 25% to
111.02p (2003: 88.58p) including current assets at market value. Bisichi
Mining's share price at 31 December 2004 showed a surplus over its net asset
value. This, if added to the net assets of the company, would lead to net
assets of £94.2 million and a net asset value per share of 114.77p compared to
87.17p last year.
Gearing as at 31 December 2004 was 38.4% (2003: 38.6%) net of listed
investments. If we exclude the cash held as agents for our joint venture,
gearing is 41.5%, (2003: 42.4%).
The notional adjustment of the debt to 'fair value' of our term debt is
currently 4.40p per share (2003: 4.83p). This would equate to a reduction in
net assets of £3.6 million (2003: £3.9 million). It remains our policy not to
repay long term debt early.
Dividend
A dividend of 1.65p is recommended, an 8.20% increase on last year and showing
a compound growth of 8.45% over the last five years. The dividend is covered
1.7 times by profits after tax. This year we are no longer offering a scrip
alternative, but it is our intention to pay an interim dividend.
Our associated company, Bisichi Mining, in which we hold a 42% stake, produced
profits before tax of £2.0 million, an increase of 34% over the previous year.
Shareholder funds grew by 30%. This growth was due to the good performance of
Bisichi's coal mining subsidiary.
Dragon Retail Properties, our joint venture with Bisichi, also had another
strong year with its net assets increasing by a further 14% to £3.2 million.
International Financial Reporting Standards (IFRS)
We reviewed the effect of the new accounting standards on our statutory
accounts. The main effect to the balance sheet will be the inclusion of:
* The value of the contingent tax (deferred tax) that may arise on the sale
of the properties for the year ending 31 December 2004 will be £7.4
million; and
* The marking of debt to fair value. This adjustment, which is the
difference between the interest rates we are paying and current market
rates, will be an increase of £3.6 million in the value of our debt as
reported in our balance sheet.
These items are both currently shown in the notes to the accounts.
The changes to the Profit and Loss account will include certain items which we
currently take direct to reserves. This may lead to distortions in the profit
declared in any given year, although the overall cash position of the group
will be unaffected.
As stated above we have cash and facilities of £30 million which will enable us
to seize opportunities as they arise. This position of strength follows
successful implementation of our programme of disposals of those properties we
feel no longer offer opportunities for growth. We continue to look for ways to
build shareholder value while continuing to prudently manage the company's
finances.
Robert Corry
Finance Director
21 March 2005
London & Associated Properties PLC
Consolidated profit and loss account
for the year ended 31 December 2004
2004 2003
Notes £000 £000
Gross rental income
Group and share of joint ventures 12,964 11,360
Less: joint ventures- share of rental income (5,205) (3,469)
7,759 7,891
Less: property overheads-
Ground rents (1,677) (1,252)
Direct property expenses (1,135) (1,078)
Attributable overheads (2,162) (1,787)
(4,974) (4,117)
Less: joint ventures- share of overheads 1,930 1,169
(3,044) (2,948)
Net rental income 1 4,715 4,943
Listed investments- net income 345 62
Operating profit 5,060 5,005
Share of operating profit of joint ventures 1&2 3,279 2,218
Share of operating profit of associate 1 820 813
9,159 8,036
Interest receivable 1 780 333
Interest payable 1 (7,061) (5,651)
Exceptional items-
Company- Profit on sale of investment properties 142 157
Associate and joint venture - (67)
3 142 90
Profit on ordinary activities before taxation 1 3,020 2,808
Taxation on profit on ordinary activities 4 719 404
Profit on ordinary activities after taxation 2,301 2,404
Dividend 5 1,346 1,241
Retained profit for the year 6 955 1,163
Earnings per share -basic 7 2.82 p 2.98p
-fully diluted 7 2.80 p 2.97p
Dividend per share 5 1.65 p 1.525p
The revenue and operating profit for the year is derived from continuing operations in the United Kingdom.
Consolidated statement of total recognised gains and losses
for the year ended 31 December 2004
2004 2003
£000 £000
Profit for the financial year 2,301 2,404
Currency translation difference on foreign currency
net investments of associate 116 87
Increase on revaluation of investment properties
Company 9,088 10,217
Associate and joint ventures 8,629 5,660
Taxation on gains on disposals of properties (404) (130)
Total gains and losses recognised in the year 19,730 18,148
Consolidated Balance sheet
at 31 December 2004
Notes
2004 2003
£000 £000
Fixed Assets
Tangible assets 8 108,851 94,601
Investments in joint ventures
Share of gross assets 67,254 59,129
Share of gross liabilities (49,803) (49,427)
Share of net assets 17,451 9,702
Other investments
Associated company 6,036 4,636
Other 3,784 3,784
9,820 8,420
27,271 18,122
136,122 112,723
Current assets
Debtors 1,923 2,362
Investments at cost 2,681 2,135
(Market value £3,724,000 (2003: £3,011,000))
Bank balances 12,253 11,451
16,857 15,948
Creditors
Amounts falling
due within one year (11,613) (14,450)
Net current assets (liabilities) 5,244 1,498
Total assets less current liabilities 141,366 114,221
Creditors
Amounts falling
due after more than one year (49,830) (40,988)
Provisions for liabilities
and charges (1,365) (1,346)
Net assets 90,171 71,887
Capital and reserves
Share capital 8,232 8,140
Share premium account 5,226 4,837
Capital redemption reserve 47 47
Revaluation reserve 55,404 39,820
Other reserves 429 429
Treasury shares (581) -
Retained earnings 21,414 18,614
Shareholders' funds 90,171 71,887
Net assets per share* Basic 7 111.83p 89.39p
Diluted 7 111.02p 88.58p
*Including current asset investments at market value.
Note of historical cost profits and losses
for the year ended 31 December 2004
2004 2003
£000 £000
Reported profit on ordinary activities before taxation 3,020 2,808
Share of realisation of property revaluation gains of previous years
Company 1,954 2,012
Associate and joint ventures 179 308
Historical cost profit on ordinary activities before tax 5,153 5,128
Retained historical cost profit for the year 3,088 3,483
Reconciliation of movement in shareholders funds
for the year ended 31 December 2004
2004 2003
£000 £000
Profit for the financial year 2,301 2,404
Dividend (1,346) (1,241)
Retained profit for the year 955 1,163
Associate's currency translation difference on foreign currency net 116 87
investments
Unrealised changes on revaluation of investment properties 17,717 15,787
Gain on realisation of revaluation of property in previous years - 572
Taxation on gains on disposals of properties (404) (130)
Shares issued 92 163
Shares purchased (581) (108)
Share premium account movement 389 328
18,284 17,862
Shareholders' funds at 1 January 2004 71,887 54,025
Shareholders' funds at 31 December 2004 90,171 71,887
Consolidated cash flow statement
for the year ended 31 December 2004 2004 2003
£000 £000 £000 £000
Net cash inflow from operating activities 2,360 9,642
Returns on investments and servicing of finance
Interest received 868 318
Interest paid (3,810) (3,322)
Net cash outflow from returns on
investments and servicing of finance
(2,942) (3,004)
Taxation
Corporation tax (1,011) (400)
Capital expenditure and financial investment
Purchase of fixed asset investments - (3,900)
Sale of properties 4,360 15,763
Sale of office equipment and motor cars 46 43
Property acquisitions and improvements (9,555) (3,191)
Purchase of office equipment and motor cars (206) (200)
Net cash (outflow) inflow for
capital expenditure and financial investment (5,355) 8,515
Equity dividends paid (867) (783)
Net cash (outflow) inflow before use of liquid
resources and financing (7,815) 13,970
Net cash inflow from management of liquid resources
Drawdown of short term loan from joint venture 643 307
643 307
Financing
Shares issued for cash 115 141
Issue expenses (8) (8)
Cost of treasury shares (581) -
Cost of shares redeemed - (108)
Drawdown/(Repayment) of medium term bank loan 8,525 (5,300)
Net cash inflow (outflow) from financing 8,051 (5,275)
Increase in cash in the period 879 9,002
Reconciliation of net cash flow to movement in net debt
for the year ended 31 December 2004
2004 2003
£000 £000
Increase in cash in the period 879 9,002
Net cash (outflow) inflow from movement in debt (8,525) 5,300
(7,646) 14,302
Other movements on current asset investments 546 (58)
Movement in net debt in the period (7,100) 14,244
Net debt at 1 January 2004 (28,998) (43,242)
Net debt at 31 December 2004 (36,098) (28,998)
Reconciliation of operating profit to net cash inflow from operating activities:
2004 2003
£000 £000
Operating profit 5,060 5,005
Depreciation charges 108 90
Profit on disposal of fixed assets (10) (7)
Dividend from associated company 78 65
Dividend from joint ventures 100 93
Decrease (increase) in debtors 208 (641)
(Decrease) increase in creditors (2,638) 4,979
(Increase) decrease in current asset investments (546) 58
Net cash inflow from operating activities 2,360 9,642
Analysis of net debt
At 1 At 31 December
January Cash Other 2004
2004 flow movements
£000 £000 £000 £000
Bank balances in hand 11,451 802 - 12,253
Bank overdrafts (984) 77 - (907)
Debt due within one year (300) - 300 -
Debt due after one year (41,300) (8,525) (300) (50,125)
Current asset investments 2,135 - 546 2,681
Net debt (28,998) (7,646) 546 (36,098)
Notes
31 December 2004
1 Analysis of profit on ordinary activities before taxation
2004
Joint
Company Ventures Associate Total
Net rental income 4,715 - - 4,715
Listed investments 345 - - 345
Share of operating profit of joint ventures - 3,279 - 3,279
Share of operating profit of associate - - 820 820
5,060 3,279 820 9,159
Interest receivable 721 48 11 780
Interest payable (3,664) (3,206) (191) (7,061)
Exceptional items-
Profit on sale of investment properties 142 - - 142
Profit on ordinary activities before taxation 2,259 121 640 3,020
2003
Joint
Company Ventures Associate Total
Net rental income 4,943 - - 4,943
Listed investments 62 - - 62
Share of operating profit of joint ventures - 2,218 - 2,218
Share of operating profit of associate - - 813 813
5,005 2,218 813 8,036
Interest receivable 305 20 8 333
Interest payable (3,396) (2,052) (203) (5,651)
Exceptional items 157 (47) (20) 90
Profit on ordinary activities before taxation 2,071 139 598 2,808
2 Joint venture - Analytical Properties
Analytical Properties is a joint venture with Bank of Scotland which acquired
its first shopping centre in December 2002, and a second shopping centre in
August 2003. These accounts include the group's share of income for the year.
3 Exceptional items
2004 2003
£000 £000
Profit on sale of:-
Freehold property 98 157
Leasehold property 44 -
Joint venture - loss on sale of freehold property - (47)
Associate - fixed asset investment- loss on disposal - (20)
142 90
4 Taxation 2004 2003
£000 £000
Based on the results of the year:
Corporation Tax at 30 per cent (2003: 30 per cent) 544 494
Deferred taxation - increase (decrease) in provision 19 (311)
Adjustment in respect of previous years 5 10
568 193
Joint ventures 23 30
Associate 128 181
719 404
The tax charge for both 2004 and 2003 was reduced due to the effect of accelerated capital allowances.
5 Dividend
2004 2003
Per share £000 Per share £000
Proposed final dividend 1.650p 1,346 1.525p 1,241
The proposed final dividend will be payable on 8th July 2005 to shareholders registered
at the close of business on 17th June 2005.
6 Profit attributable to London & Associated Properties PLC 2004 2003
£000 £000
Dealt with in the financial statements of:
London & Associated Properties PLC 523 795
Joint ventures (2) 16
Associate 434 352
955 1,163
7 Earnings per share and net assets per share
Earnings per share have been calculated as follows:-
Earnings Shares in issue Earnings
per share
2004 2003 2004 2003 2004 2003
£000 £000 '000 '000 Pence Pence
Group profit on ordinary activities after tax 2,301 2,404 - -
Weighted average share capital for the year - - 81,705 80,772
Basic earnings 2,301 2,404 81,705 80,772 2.82p 2.98p
Dilutive effect of share options - - 491 156
Fully diluted earnings 2,301 2,404 82,196 80,928 2.80p 2.97p
Net assets per share have been calculated as follows:-
Net assets Shares in issue Net assets per share
2004 2003 2004 2003 2004 2003
£000 £000 '000 '000 Pence Pence
At 31 December 90,171 71,887 81,567 81,397
Surplus on current asset investments 1,043 876 - -
Basic 91,214 72,763 81,567 81,397 111.83p 89.39p
Dilutive effect of share options 223 338 791 1,101
Diluted 91,437 73,101 82,358 82,498 111.02p 88.61p
The net assets per share have not been adjusted for tax on the uplift of properties or investments to market value.
8 Revaluation of investment properties
Ninety nine per cent of freehold and long leasehold properties were valued as
at 31 December 2004 by external professional firms of chartered surveyors, the
balance being valued by the directors. The valuations were made at open market
value on the basis of existing use. The increase in book value amounting to £
9.088 million (2003- £10.127 million) was transferred to the revaluation
reserve.
9 The figures for the year ended 31 December 2003 are based on the audited
accounts for that year, which have been delivered to the Registrar of
Companies and on which the Auditors gave an unqualified report. The statutory
accounts for the year ended 31 December 2004 have been completed and an
unqualified opinion has been issued.
The preliminary announcement has been prepared on the basis of the accounting
policies set out in the company's published accounts for the year ended 31
December 2003. The figures in the preliminary announcement are an extract and
do not constitute statutory accounts within the meaning of the Companies Act
1985.
This preliminary statement was approved by the board on 21 March 2005.
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