Final Results
FOR IMMEDIATE RELEASE
27th March 2007
LONDON & ASSOCIATED PROPERTIES PLC:
PRELIMINARY RESULTS FOR 12 MONTHS TO 31ST DECEMBER 2006
HIGHLIGHTS
London & Associated Properties PLC the fully listed UK shopping centre and
central London property specialist, owns and manages £301m of retail
investments.
* Fully diluted net assets per share rose 15% to 133.5p under IFRS
* Under UK GAAP NAV per share would have been 165.1p up 22%
* Total value of directly owned portfolio rose 65% to £192.8m
* Overall portfolio including properties owned in joint venture and with
associates now stands at £301.5m
* Pre-tax profits up to £18.3m from £17.9m
* 1.25p final dividend recommended - making a total of 1.85p for year up 7%
* Cash reserves anticipated to be £25m following completion of recent sales
* Gearing at year end only 84.6%
"We go into 2007 with a number of successful deals already completed this year
and the financial capacity to carry out further substantial acquisitions and
developments. For this reason I look forward to the coming year with
considerable confidence," Michael Heller, Chairman
Contact: London & Associated Properties PLC. Tel: 020 7415 5000
John Heller, Chief Executive
Robert Corry, Finance Director
Baron Phillips Associates Tel: 020 7920 3161
Baron Phillips
27 March 2007
Chairman's Statement
I am pleased to report once again on a year of considerable progress for London
& Associated Properties in 2006. During this year, we focused our portfolio
further on properties in which we see opportunities for future growth in
Central London and the South East. We achieved this through the acquisition of
The London Portfolio, a number of mainly retail properties in four areas in the
capital, and through the disposal of a number of properties, all in excess of
previously published valuations. We also maintained our successful record of
investing in and improving our existing properties, and our cash balances
reached record levels.
As a result, I am pleased to report excellent levels of capital growth. Our
fully diluted net assets per share rose by 15% to 133.5p under IFRS, while
under UK GAAP net assets per share rose by 22% to 165.1p. These numbers would
have been higher still had we not written off goodwill and costs associated
with the acquisition of The London Portfolio of £9.3m. The total value of our
directly owned portfolio of retail property has risen by 65% to £192.8m, while
the overall property portfolio, including the gross values of the properties of
joint ventures and associates, now stands at £301.5m. Our net assets are now £
101.9m under IFRS while under UK GAAP they are £125.9m.
As I reported last year, we embarked on an exciting development programme which
involved the creation of some 150,000 sq ft of new, state-of-the-art retail
space across our portfolio. These developments were all commenced with the
significant majority of new space pre-let to substantial international
retailers. During 2006, we spent £17.2m on these developments which are now for
the most part completed or coming to an end. The completed units are income
producing and will have a positive effect on cash flow in the coming months and
years.
The largest of these developments, which should complete in the summer, is at
King Edward Court, Windsor which we own through Analytical Properties, our
joint venture with Bank of Scotland. A fuller account of progress to date is
covered in the Chief Executive's Report but we have been affected at Windsor by
the failure at a critical time of a highly-specialised sub-contractor who could
not be quickly replaced.
We remain extremely pleased with the positive impact on the rest of the centre
that we are already seeing from the imminent arrival in this new block of
retailers such as Zara, Hennes and New Look along with a brand new Waitrose and
Travelodge hotel.
Our development of a new 20,000 sq ft flagship store for River Island in
Orchard Square, Sheffield is now completed and the tenant is fitting out. We
are also about to submit a planning application for a further 45,000 sq ft
anchor store to the rear of the centre.
During 2006 and since the year end we have disposed of two of our shopping
centres. These were Church Square, St Helens which was owned in Analytical
Properties and for which we achieved a sale price £75.0m, and the
directly-owned Mall in Dagenham on which we have exchanged contracts and for
which we will receive £18.7m at completion. Both sale prices are considerably
in advance of the December 2005 valuations of £65.0m and £14.9m respectively.
In September we completed the acquisition of the Atlantic Group of Companies
which owns The London Portfolio, a £50.3m portfolio of mainly retail properties
in prime and established parts of Central London. This portfolio is attractive
to us because the properties for the most part have large footprints and
under-utilised space, particularly in the upper parts. They will also benefit
from our intensive management style in the short-term.
All of the properties have been reviewed in detail and plans have been
formulated to improve each of them. These plans range from simply more
efficient management of the properties on a day-to-day basis, to extension,
refurbishment and part-redevelopment.
Where we were unable to identify initiatives to improve the asset, the property
was earmarked for sale. We have now completed the sale of two properties we
acquired in Notting Hill, London. These comprised an antiques market and a
freehold house for which the combined proceeds were £4.9m against the £3.9m
that we paid for them. As the purchase of these properties was only completed
in September, the surplus achieved is encouraging.
The proceeds of this sale, as well as those of St. Helens and Dagenham, will be
used in part to reduce outstanding loans while the balance will be added to our
cash reserves. It is expected these will total approximately £25m.
Last year, I mentioned that our considerable development programme would impact
on rental income while the developments were underway. However, I am pleased to
report that we have been able to maintain net income for 2006 at £7.9m (2005 £
7.9m). Our profit before tax, which under IFRS includes the revaluation of our
properties, increased to £18.3m against £17.9m for 2005. Diluted earnings per
share were 20.0p against 18.8p.
The Board is recommending a final dividend this year of 1.25p per share which,
if approved by shareholders, will make a total of 1.85p for the year, an
increase of over 7%. This will be paid on 6 July 2007 to all those shareholders
on the register at the close of business on 15 June 2007.
2006 was a year of considerable progress during which we invested significantly
in new and exciting properties. This was against a difficult backdrop of
unprecedented demand from both local and international buyers for shopping
centres and retail property.
We have also trimmed our portfolio and disposed of centres where we either saw
no further growth potential or where the price on offer was higher than our
predicted exit values once all our management initiatives had been carried out.
For the first time our net assets are over £100m and our total property
portfolio has passed the £300m mark, all achieved while carrying out the
largest development programme in our history. At the same time, we have managed
to maintain cash balances at record levels while carrying out all of the
projects mentioned above.
I would like to thank my Board colleagues, LAP staff and advisers for all their
hard work. We go into 2007 with a number of successful deals already completed
this year and the financial capacity to carry out further substantial
acquisitions and developments. For this reason, I look forward to the coming
year with considerable confidence.
Michael Heller
Chairman
27 March 2007
Chief Executive's Report
The year under review was again a period of considerable growth for the
Company. Our directly owned property portfolio was valued at £192.8m, an
increase of 64.8%. This figure includes last summer's acquisition of The London
Portfolio for £50.3m. On a like for like basis the value of our wholly owned
properties advanced by 13.7% to £137.3m. We calculate that approximately 60% of
this capital growth can be attributed to the continuing strength of the
investment market while the remainder reflects successful management
initiatives carried out during the year which grew the future estimated rental
income at our properties.
The acquisition of The London Portfolio was the first major acquisition that we
had made for some time. It was achieved in a highly competitive market
although, as evidenced by our December 2006 revaluation and two disposals from
the portfolio, we believe we managed to acquire the properties at an attractive
price for shareholders. This acquisition, combined with the selective disposals
we have completed over the last few years, refocuses a considerable proportion
of LAP's portfolio towards Central London and the South East where we believe
property values have good scope for further growth in the right locations and
asset classes. This refocusing is enhanced through King Edward Court in
Windsor, which we own through Analytical Properties, our joint venture with
Bank of Scotland. As shareholders know, we are completing a large development
there which will further increase our exposure to this area.
Disposals during the year include our other shopping centre within this joint
venture, Church Square in St Helens. This was sold during the year for £75.0m
having been originally acquired in 2003 for £50.0m. Net of tax, fees and other
expenses, both joint venture partners to date have received £11.0m from this
disposal, a strong return on the original £3.9m that each shareholder invested.
There may be further returns should a number of retentions not be required.
Since the year end we have also exchanged contracts to sell The Mall, our
Dagenham shopping centre, and the adjacent Post Office for a combined £18.7m.
We acquired the Mall for £8.0m in 1994, undertook a minor refurbishment in
1995, and acquired the adjacent Post Office in 2004 for £550,000. At the time
we put these properties under offer, they were valued at £14.9m.
We have also sold two properties from The London Portfolio where we saw limited
opportunities for growth, namely a Saturday-only antiques mall and an adjacent
freehold house in Notting Hill. At the time of acquisition, the antiques mall
had a secondary run of shops in the basement of the house. We vacated the
basement and sold the house to an owner-occupier. The combined price received
for both properties was £4.9m against a value at acquisition of £3.9m.
During the year we continued to grow rental levels at all our major centres and
we have contracted a net incremental £960,000 pa of rental income. This
includes a single letting of £667,500 pa to River Island at Orchard Square,
Sheffield. We have also maintained void levels of less than 2% excluding units
held for redevelopment at all our Centres and have invested £17.2m in the
centres, including at King Edward Court, to create better configured space.
This has also led to enhanced returns for shareholders.
The London Portfolio
We have successfully integrated the portfolio into LAP and all the properties
are now run from our head office. Rents have grown since acquisition by over 3%
while the irrecoverable costs of running the properties have decreased by 15%
due to the application of our intensive style of management.
The properties comprising The London Portfolio were described in detail at the
half-year stage. We believe this portfolio represents a series of exciting
opportunities. The properties are for the most part located in prime central
London and many of the buildings have large footprints with only a single
storey. Consequently, we are in the process of reviewing opportunities to
expand the amount of lettable retail space as well as creating additional
floors of residential or office accommodation. I look forward to updating
shareholders on progress over the coming year.
At Antiquarius on the Kings Road, we expect to be able to start work soon on
refurbishing a vacant residential unit. Costs are anticipated to be around £
250,000 including fees, while the gross rent generated on completion is
expected to be £50 - 60,000 a year.
In addition we are about to commence the refurbishment of a house in Upper
Street, Islington at an anticipated cost of £200,000. This house will generate
a gross rent of £40-50,000 a year once finished. Both of these units have been
vacant and in a state of disrepair for some time, notwithstanding their prime
locations
Orchard Square, Sheffield
The new flagship unit for River Island that we have created from two poorly
configured smaller units was completed in December, ahead of schedule and on
budget. River Island is currently fitting out and the unit is now producing £
667,500 pa, a Zone A of over £230 per sq ft compared to £200 per sq ft
previously achieved in this part of Fargate. The adjacent unit, which is let to
Virgin at £200 per sq ft Zone A, is subject to a rent review this year.
Next to River Island, we have a further shop which will be marketed once the
hoardings around the River Island unit are removed. We anticipate letting this
unit at a rent of £80,000 pa. The total cost of this development was £2.2m and
the incremental rent will be around £250,000 pa once all the space created has
been let.
To the rear of the Centre we have submitted a planning application to create a
45,000 sq ft anchor unit. This will incorporate the space currently let to TK
Maxx, where there is a lease expiry, and the vacant Stonehouse pub which we
acquired in August 2005. We have received strong interest in this large space
from retailers, and we are in advanced negotiations with a fashion operator who
wishes to take the entire unit.
Elsewhere, Orchard Square is fully let apart from one small unit which is being
kept vacant for redevelopment. Demand for space at the centre is the strongest
it has been during our seven years of ownership and we have a number of
initiatives underway to create space to accommodate some of the retailers who
wish to trade from this centre.
Kings Square, West Bromwich
We have successfully introduced a number of exciting national retailers to the
centre. These include Claires Accessories, Shoe Zone and BB's Muffins which has
leased the vacant central mall area at £40,000 pa. Gross rents at the centre
have grown by £141,000 pa as a result of these new lettings and successful rent
reviews.
Saxon Square, Christchurch
We continue to pursue our planning application to develop a medium sized unit
with residential upper parts to the rear of the shopping centre. We suffered a
setback during the year when the Council refused planning consent for our
application but we are appealing this decision. There is strong interest in the
proposed unit in any case and it is already under offer to a national food
retailer.
Notable deals elsewhere in the centre include the surrender of a lease at £
47,500 pa to soft furnishing retailer Zoom the Loom and the re-letting of the
unit to HBOS at £62,500 pa, a record rent per square foot .
King Edward Court, Windsor
The development which comprises over 100,000 sq ft of retail space and a new
hotel block to include Waitrose, Zara, H&M, New Look, and Travelodge is
unfortunately going to cost more than previously stated. At the end of last
year, I reported that costs had risen to £18.2m from the £16.5m anticipated at
the start of the contract. Since then a nominated specialist sub-contractor
failed shortly before going on site causing considerable delay and expense. A
replacement sub-contractor was found and the work has now been completed. As a
result of this delay we expect final development costs to be over £20m. We
still expect the development to be profitable, and the interest shown in the
rest of the Centre is strong in anticipation of the opening of the new block.
This delay means we will not be able to hand over the retail units for
fitting-out by the tenants until July against a previous target date of April.
We were monitoring progress very closely when this sub-contractor failed and
feel there were no extra controls that we could have applied to avoid this
happening
Marketing of the final unit in the development and the café at road level is
now underway. Interest is strong and I expect to be able to announce further
lettings in the near future.
The rest of the centre is trading well. There are no vacant units and we have
good interest from retailers who wish to trade from the Centre now that the
development is almost compete.
Following the sale of Church Square, St Helens, the two properties in Notting
Hill and The Mall, Dagenham we will have unencumbered cash on deposit of £25m.
Although in the last 12 months we have been unable to identify any shopping
centre investments that meet our strict acquisition criteria, we were able to
acquire other types of retail property. We continue to look hard at every
shopping centre that comes to market and believe that the slowdown in consumer
spending being experienced and the lower rental growth that this causes may
well lead to a softening of the shopping centre market in which we have
traditionally specialised. We are in a strong position due to our high cash
reserves and undrawn facilities to take advantage of this and we can move
quickly to acquire any suitable centres that come to the market.
The year to date is going well and I remain confident of a successful 2007.
John Heller
Chief Executive
27 March 2007
Financial Director's Report
2006 was a strong year for London & Associated Properties as its cash reserves
were bolstered by the proceeds from the sale of Church Square, St. Helens, and
two properties in Notting Hill, London, and will be further swelled following
completion of the sale of the Mall, Dagenham. In fact following the sale of the
Mall, we expect to have £25m available in unencumbered cash, a record high.
We also signed a new £90m 5 year Revolving Credit Facility with the Royal Bank
of Scotland in August. This replaced two facilities of £20m each. £50m of the
new facility was subsequently drawn down for the purchase of The London
Portfolio, taking the total drawn from this new facility to £80m.
Cash Flow
As stated we have strengthened the group's cash position over the year. The
principal events that affected cash in the year were:
* The purchase of The London Portfolio for £50.3m.
* The sale of Church Square, our shopping centre in St Helens held in
Analytical Properties, our joint venture with the Bank of Scotland. This
has enabled the group to receive some £11.0m in cash from an investment of
£3.9m three years ago;
* The sale of the two properties in Notting Hill for which we received £4.9m
in total; and
* Capital investment of £3.5m from our existing cash into our property
portfolio.
These events, combined with the contracted disposal of The Mall, Dagenham for £
18.7m, are expected to give us cash and facilities of over £45m, leaving the
group in an extremely strong position for the future.
Interest paid in 2006 was covered 1.8 times by the cash generated from
continuing operations.
Income Statement
The group generated a profit before taxation of £18.3m (2005: £17.9m). This
figure would have been higher but we took the decision to write off £9.3m of
goodwill and acquisition costs arising on the purchase of The London Portfolio.
The average cost of debt has fallen to 6.9% (2005: 7.3%). Interest payable
(excluding the interest on obligations under finance leases) in the year
increased to £5.0m (2005: £4.0m). This increase follows the funding of the
acquisition of The London Portfolio.
The effective tax rate in the year was 17.0% (2005: 17.0%), although the
current year's charge was £Nil (2005: £0.5m) due to the utilisation of tax
losses in the group. The deferred tax charge was £3.1m (2005: £2.5m).
Balance Sheet
The overall property portfolio, which includes those properties held by
Analytical, Bisichi and Dragon Retail, grew by 10.0% to £301.5m.
The net assets of the group grew by 15.5% to £101.9m (2005: £88.3m). Under UK
GAAP the net assets would have been £125.9m (£103.5m), an increase of 21.6%.
The principal reason for the increase was the revaluation of our property
portfolio. Of the growth, some 60% resulted from increases in values in the
general property market while the remainder was due to our management
initiatives.
Fully diluted net assets per share rose by 15.3% to 133.7p per share (2005:
115.9p).
Gearing at 31 December 2006 was 86.4% (2005: 50.1%). This increase was again a
result of the purchase of The London Portfolio, although gearing remains modest
by property company standards.
To minimise the effect of adverse movements in interest rates, London &
Associated Properties took out a hedge against interest rates to cover £40m of
the revolving credit. This is in the form of a collar with a 5.5% cap and a
4.5% floor. LAP now has 57.7% of its debt at the 31 December 2006 either at a
fixed rate or protected.
Under IFRS our long term debenture debt is not shown at fair value. An
adjustment to fair value of the debenture debt would be 4.0p per share (2005:
5.6p). It remains our policy not to repay this long term debt early. Banking
debt and associated derivatives are shown in the balance sheet at fair value.
Dividends
The proposed final dividend of 1.25p, payable to shareholders on 6th July 2007,
gives a total dividend for the year of 1.85p, an increase on 2005 of 7.2%. The
dividend is covered 2.9 times if the revaluation surpluses are excluded and the
goodwill and acquisition costs are added back.
Analytical Properties, our joint venture with the Bank of Scotland, had another
strong year. Following the sale of Church Square, it has to date been able to
return some £11m in cash to shareholders.
Analytical also increased its development facility with the Bank of Scotland in
the year to £25.0m. This is to cover the additional building costs and delays
at King Edward Court, Windsor, as outlined the Chief Executive's Report.
Our associated company, Bisichi Mining, in which we hold a 42% stake, produced
profits before tax of £2.6m (2005: £4.2m) following some difficulties at its
mining operation in the first half of the year. However, the second half was
the most profitable in its history. Dragon Retail Properties, our joint venture
with Bisichi, also had a good year with net assets increasing by 8.8% to £4.8m
(as reported under UK GAAP). This increase was, in part, from the sale at a
profit of a property in Brighton during the year.
With available cash and undrawn facilities of approximately £45m, London &
Associated Properties is in a strong position to take advantage at short notice
of any opportunities that arise. It remains our policy to manage the finances
of the Group on a prudent basis, and I feel confident as we enter into 2007.
Robert Corry
Finance Director
27 March 2007
London & Associated Properties PLC
Consolidated income statement for the year ended 31 December 2006
2006 2005
Notes £'000 £'000
Gross rental income
Group and share of joint 11,840 12,392
ventures
Less: joint ventures - share of (3,949) (4,525)
rental income
7,891 7,867
Less: property overheads:
Direct property expenses (1,107) (894)
Attributable overheads (3,623) (2,516)
Property overheads (4,730) (3,410)
Net rental income 3,161 4,457
Listed investments 264 169
Operating profit before 3,425 4,626
adjustments
Lease surrender - (173)
Costs on acquisition of (1,849) -
subsidiary investments
Goodwill impairment (7,483) -
Costs in relation to acquisition 1 (9,332) -
Profit on sale of subsidiary 52 -
investments
Profit on sale of investment - 1,230
properties
Net gain on revaluation of 21,610 10,078
investment properties
Net increase in value of 680 831
investments held for trading
Operating profit after 16,435 16,592
adjustments
Share of profit of joint 4,358 3,659
ventures
Share of profit of associate 972 1,232
21,765 21,483
Interest receivable 2 742 820
Interest payable 2 (4,182) (4,408)
Profit before taxation 18,325 17,895
Income tax 3 (3,107) (3,046)
Profit for the year 15,218 14,849
Basic earnings per share 4 20.00p 18.83p
Diluted earnings per share 4 19.97p 18.79p
Consolidated balance sheet at 31
December 2006
2006 2005
Notes £'000 £'000
Non-current assets
Value of properties attributable 192,788 116,971
to group
Present value of head leases 9,340 8,582
Property 7 202,128 125,553
Plant and equipment 1,033 975
Investments in joint ventures 15,263 18,033
Investments in associated 6,872 6,495
company
Held to maturity investments 1,834 3,784
227,130 154,840
Current assets
Trade and other receivables 3,849 4,608
Financial assets-investments 4,992 4,586
held for trading
Cash and cash equivalents 14,555 6,212
23,396 15,406
Total assets 250,526 170,246
Current liabilities
Financial liabilities-borrowings (5,693) (2,446)
Trade and other payables (11,434) (6,724)
Current tax liabilities - (177)
(17,127) (9,347)
Non current liabilities
Financial liabilities-borrowings (99,976) (52,494)
Present value of head leases on (9,340) (8,582)
properties
Deferred tax (22,223) (11,482)
(131,539) (72,558)
Total liabilities (148,666) (81,905)
Net assets 101,860 88,341
Equity
Share capital 8,232 8,232
Share premium account 5,236 5,228
Capital redemption reserve 47 47
Other reserves 429 429
Retained earnings (excluding 94,449 81,037
treasury shares)
Treasury shares (6,533) (6,632)
Retained earnings 87,916 74,405
Total shareholders' equity 101,860 88,341
Net assets per share 5 133.62p 116.04p
Diluted net assets per share 5 133.47p 115.88p
Consolidated statement of recognised income and expenses for the year ended 31 December 2006
2006 2005
£'000 £'000
Profit for the year 15,218 14,849
Currency translation (541) (35)
Transitional adjustment on - 948
adoption of IAS 39
Deferred tax thereon - (311)
Total recognised income and 14,677 15,451
expense for the year
Consolidated statement of changes in shareholders' equity for the year ended 31 December 2006
Retained
Earnings
Share Share Other Treasury Earnings Total
capital premium reserves shares excluding equity
treasury
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2006 8,232 5,228 476 (6,632) 81,037 88,341
Investment valuation in Joint 24 24
Venture
Equity share options in 44 44
Associate
Acquisition of own shares (40) (40)
Disposal of own shares 139 139
Gain/(loss) on disposal of own 8 (20) (12)
shares
Currency translation (541) (541)
Dividend (1,313) (1,313)
Profit for year 15,218 15,218
Balance at 31 December 2006 8,232 5,236 476 (6,533) 94,449 101,860
Consolidated cash flow statement for the year
ended 31 December 2006
2006 2005
£'000 £'000 £'000 £'000
Operating activities
Operating profit after 16,435 16,592
adjustments
Depreciation 178 125
Goodwill impairment 7,483 -
Costs on acquisition of 1,849 -
subsidiary investments
Costs in relation to acquisition 9,332 -
Gain on disposal of non-current (30) (1)
assets
Profit on sale of investment - (1,230)
properties
Profit on sale of subsidiary (52) -
investments
Net gain on revaluation of (21,610) (10,078)
investment properties
Net increase in value of (680) (831)
investments held for trading
Increase in net current assets (129) (695)
Cash generated from operations 3,444 3,882
Interest paid (4,980) (4,360)
Interest received 757 535
Income tax paid (359) (843)
Cash flows after interest and (1,138) (786)
tax
Investing activities
Repayment of investment in loan 1,950 -
stock in joint ventures
Acquisition of subsidiary (27,313) -
investments (net of cash
acquired)
Costs on acquisition of (1,849) -
subsidiary investments
Sale of subsidiary investments 1,695 -
Property acquisitions and (2,656) (3,455)
improvements
Sale of properties 1,453 4,726
Purchase of office equipment and (204) (578)
motor cars
Sale of office equipment and 61 6
motor cars
Dividends received 7,248 87
Cash flows from investing (19,615) 786
activities
Financing activities
Shares issued for cash - -
Issue expenses - (1)
Purchase of Treasury shares (40) (6,721)
Sale of Treasury shares 127 367
Equity dividends paid (1,313) (1,355)
Cash attributable as agents - (2,520)
Debt repaid on acquisition of (23,375) -
subsidiary investments
Drawdown of short term loan from 2,600 -
joint ventures
Drawdown of medium term bank 47,850 2,650
loan
Cash flows from financing 25,849 (7,580)
activities
Net increase/(decrease) in cash 5,096 (7,580)
and cash equivalents
Cash and cash equivalents at 3,766 11,346
beginning of period
Cash and cash equivalents at end 8,862 3,766
of period
Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents
comprise the following balance sheet amounts:
2006 2005
£'000 £'000
Cash and cash equivalents 14,555 6,212
Bank overdraft (5,693) (2,446)
Cash and cash equivalents at end 8,862 3,766
of period
Notes to the preliminary announcement for the year ended 31 December 2006
Basis of Accounting
The results for the year ended 31 December 2006 have been prepared in
accordance with International Financial Reporting Standards (IFRS) as
adopted by the European Union. The principal accounting policies applied
are the same as those set out in the Financial Statements for the year ended
31 December 2005.
1. Exceptional items
2006 2005
£'000 £'000
Costs in relation to
acquisition:
Costs on acquisition of (1,849) -
subsidiary investments
Goodwill impairment (7,483) -
(9,332) -
The costs on acquisition represent fees incurred prior to unconditional
agreement being reached to acquire APL Ocean Limited.
Goodwill impairment arose on the acquisition of APL Ocean Limited on 22
September 2006. This goodwill arose primarily as a result of recognising the
deferred tax which would arise if the properties within APL Ocean Limited were
realised at the fair valuation applied on acquisition. This goodwill is
immediately written off to the income statement.
2. Net finance costs 2006 2005
£'000 £'000
Interest receivable 742 820
Interest payable -
Interest on bank loans and (2,839) (1,923)
overdrafts
Other loans (2,124) (2,106)
Interest on obligations under 36 (442)
finance leases
Interest capitalised 745 63
(4,182) (4,408)
(3,440) (3,588)
3. Income tax 2006 2005
£'000 £'000
Current tax - (524)
Deferred tax (3,107) (2,522)
(3,107) (3,046)
4. Earnings per share 2006 2005
£'000 £'000
Group profit after tax 15,218 14,849
Weighted average number of 76,102 78,839
shares in issue for the period
(`000)
Basic earnings per share 20.00p 18.83p
Diluted number of shares in 76,205 79,021
issue re. outstanding share
options(`000)
Fully diluted earnings per share 19.97p 18.79p
5.Net assets per share
2006 2005
£'000 £'000
Shares in issue (`000) 76,229 76,129
Net assets per balance sheet 101,860 88,341
Basic net assets per share 133.62p 116.04p
Shares in issue diluted by 76,349 76,279
outstanding share options (`000)
Net assets after issue of share 101,900 88,393
options
Fully diluted net assets per 133.47p 115.88p
share
6. Dividend
2006 2005
Per share £'000 Per share £'000
Dividends paid during the year 1.725p 1,313 1.65p 1,355
relating to the prior year
An interim dividend for 2006 of 0.6p amounting to £457,000 was paid on 26
January 2007 (2005: 0.55p amounting to £419,000). The directors recommend
the payment of a final dividend for 2006 of 1.25p per ordinary share (2005: 1.175p)
amounting to £953,000 (2005: £895,000), making the total dividend for 2006
1.85p amounting to £1,410,000 (2005:1.725p amounting to £1,314,000). The final
dividend will be payable on 6 July 2007 to shareholders registered at the close of
business on 15 June 2007.
Dividends are now accounted for only in the financial year in which they
are paid, in accordance with revised accounting standards.
7. Revaluation of investment properties
99.9% of freehold and long leasehold properties were valued as
at 31 December 2006 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.
8. Financial information
The figures for the year ended 31 December 2005 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 and did not
contain a statement under Section 237(2) and (3) of the Companies Act 1985.
and did not contain a statement under Section 237 (2) and (3) of the Companies Act 1985.
The financial information set out in this preliminary announcement, which was
approved by the Board of London & Associated Properties PLC on 26th March 2007,
is unaudited and does not constitute the Company's statutory accounts for the year ended
31 December 2006, but is derived from those accounts.
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