Final Results
Benchmark Group PLC
18 September 2002
RNS RELEASE
For immediate release 18 September 2002
PRELIMINARY RESULTS
For the Year Ended 30 June 2002
Net assets per share increased by 3.1%
Benchmark Group PLC ('Benchmark'), the specialist Central London property
investment and development company, announces adjusted diluted net assets per
share of 382.4p for the year ended 30 June 2002, a 3.1% increase over last
year's figure of 370.9p.
Financial Highlights
30 June 2002 30 June 2001 % change
Adjusted diluted NAV/share (p) 382.4 370.9 3.1
Net gearing (%) 65.4 58.6 11.6
Properties under management (£m) 1,188.2 1,030.8 15.3
Net rental income (£m) 48.6 38.5 26.2
Profit after tax (£m) 11.8 14.9 -20.8
Dividend per share (p) 5.05 4.55 11.0
Special dividend per share paid (p) 60.0 -
Corporate Highlights
• A final dividend of 3.1p/share proposed which when added to the interim
dividend of 1.95p/share paid on 9 April 2002 would result in a total of
5.05p/share for the full year, an increase of 11% over 2001.
• A special dividend of 60p/share was paid on 16 November 2001 at which time
a share consolidation was undertaken on the basis of 8 new shares for every
10 existing shares.
• Investment properties showed a net increase of £17.7 million based on
independent valuation, representing a 2.0% uplift on the investment
properties held at the year end, compared to the 31 December 2001 interim
valuation.
• Net rental income increased by 26% to £48.6 million including the
Company's share of joint ventures (2001: £38.5 million). As at the date of
this announcement, the annualised net rental income of the portfolio is
£54.7 million.
• Total disposals of £262.7 million were achieved, giving a net profit of
£7.7 million over book value of which £2.3 million was recognised in the
profit and loss account.
• £159.0 million spent on acquisitions in Central London during the year
including the long leasehold interests in 29/30 St James's Street, SW1, 25/
28 Old Burlington Street, W1 and the freehold of Trevelyan House, 30 Great
Peter Street, SW1. Benchmark JER 1 Limited Partnership and Benchmark JER 2
Limited Partnership acquired 95 Fetter Lane, EC4 and the remaining 50%
interest not already owned in 90 Long Acre, WC2, including the freehold.
• Benchmark Direct, a new direct marketing initiative, was launched in
January 2002. Since inception 7 deals totalling 27,000 sq ft of offices at
rents totalling £1.3m pa have been concluded with the involvement of
Benchmark Direct.
• Benchmark Customer Centre, a new tenant service product launched in June
2002 in collaboration with ISG plc, delivers high standard services to
tenants under the terms of leases and additional optional services using an
extranet based communication system.
Tan Sri Quek Leng Chan, Chairman of Benchmark, said: 'Since 30 June 2001 the
Central London property market has been much weaker than in recent years,
particularly in terms of tenant demand for offices. In these more difficult
conditions we have managed to achieve most of the goals which we set out for
ourselves during the period. We have sold £263 million of properties, paid a
special dividend of £73 million, maintained and slightly increased our net asset
value per share and increased the normal dividend per share payable.
'The West End office market still offers the characteristics of long-term
strength and resilience with little new space being speculatively developed and
a wide range of businesses wishing to locate to modern buildings in good
locations.
'We are in a good position to take advantage of the opportunities in the
marketplace as they appear.'
For further information, please contact:
Benchmark Group PLC Tavistock Communications Ltd
Nigel Kempner, Chief Executive Jeremy Carey / Molly Dover
Tel: 020 7659 0500 Tel: 020 7600 2288
www.benchmarkgroup.plc.uk
www.benchmarkdirect.com
The company will make a presentation to analysts at 10.30 am on Wednesday, 18
September 2002 at 1 Cornhill, EC3. A copy of the slide presentation is
available on www.benchmarkgroup.plc.uk.
CHAIRMAN'S STATEMENT
Since 30 June 2001 the Central London property market has been much weaker than
in recent years, particularly in terms of tenant demand for offices. In these
more difficult conditions we have managed to achieve most of the goals which we
set out for ourselves during the period. We have sold £263 million of
properties, paid a special dividend of £73 million, maintained and slightly
increased our net asset value per share and increased the normal dividend per
share payable.
The weakness of the tenant market has arisen partly as a result of the slowdown
in economic growth on both sides of the Atlantic which has been accentuated by
more recent serious corporate failures. Combined, these have had a detrimental
effect on market confidence and on tenant demand in the property market. We
need to see a return of business confidence for the office markets to improve in
terms of tenant demand, although the appetite for good investments has held up
well due to the low interest rate environment and the relative performance in
comparison to other forms of investment assets.
Current overall office vacancy rates in the West End, where we specialise, are
around 10% and we have seen rents falling over the last 12 months, albeit at
slower rates more recently, but incentives offered to tenants are increasing.
This has to an extent been balanced by a lack of new speculative office
development and a supply of new landlord controlled space in the core West End
market leading to some major lettings totalling some 250,000 sq ft recently to
Lazards and Capital International. Such occupiers deciding to locate at the
heart of the West End can only be good for that market over the next few years.
There are other major companies and government bodies with active West End
requirements and, as confidence levels return and with limited new development
taking place, rental growth from current levels can be anticipated.
The Central London investment market has been resilient and has shown signs of
strengthening in capital terms as a result of demand over recent weeks from
institutions, overseas investors and private investors generally backed by debt
finance.
We have taken advantage of the market over the last 12 months to achieve
substantial sales which enabled us to pay a special dividend totalling £73
million to our shareholders in November 2001, thus delivering real returns to
them. This did not inhibit us from making some purchases where there were
synergies with our existing portfolio or, in one case in the West End sub-market
of Westminster, where we were not represented in our portfolio and where we
consider there are good potential growth prospects.
As planned, we incurred our lowest capital expenditure programme in our history
because of the perceived position in the market cycle. Only now are we
commencing some speculative office development in prime West End locations to
create new buildings in late 2004 and 2005.
During the last three months much time has been spent in assisting Schroder
Property Investment Management with the marketing of new units in The West End
of London Property Unit Trust ('WELPUT') where we have an effective interest of
73% of the units in issue. Good progress is being made as evidenced by a
transaction agreed between WEL Property Limited Partnership ('WEL') and Schroder
Exempt Property Unit Trust on 16 September 2002 for WEL to acquire in January
2003 an office building in the heart of Westminster called Invensys House for
consideration of £26.07 million in a structure which will mean that Benchmark's
effective interest in WELPUT will drop to 62%.
In a climate where it is important to do all that is reasonably possible to
retain existing occupiers and to attract new ones, we have restructured the
management team and successfully established two new initiatives: Benchmark
Direct for leasing and Benchmark Customer Centre for better management services
to occupiers.
RESULTS
The adjusted diluted net asset value per share as at 30 June 2002 was 382.4p
compared with 370.9p as at 30 June 2001, an increase of 3.1%.
Our investment properties, including those held in our joint venture with JER
Partners, were valued on the basis of open market value at 30 June 2002 by DTZ
Debenham Tie Leung Limited. At that same date CB Hillier Parker Limited and
Atis Real Weatheralls Limited valued the properties in WELPUT. These valuations
showed a net increase of £17.7 million over the 31 December 2001 figures
representing an uplift of 2% in the value of the investment properties held at
our financial year end compared to the valuation as at 31 December 2001.
Pre-tax profits for the year reduced to £13.6 million from £16.1 million in the
previous year, after deducting in the previous year the exceptional profit of
£6.5 million from the sale of our controlling interest in Corpnex PLC (formerly
Nexus Estates PLC). Post-tax profits for the year fell to £11.8 million from
£14.9 million for the previous year. Net rental income, including our share of
joint ventures for the year, increased from £38.5 million to £48.6 million.
Taking into account sales and acquisitions since the year end, net rental
income, on an annualised basis, at the date of this report, is £54.7 million.
Total net rental income on an annualised basis from all properties managed by
the Group is currently £67.9 million per annum.
FINANCIAL
Our net borrowings at the financial year end were £246.9 million representing
net gearing of 65.4% compared with 58.6% as at 30 June 2001. Shareholders'
funds as at 30 June 2002 were £377.8 million, compared with £457.0 million as at
30 June 2001, on a restated basis, and our share of property assets were £943
million compared with £889 million at 30 June 2001.
ACQUISITIONS AND DISPOSALS
We spent £58.0 million on acquisitions in Central London during the year in
Benchmark, £56.4 million of acquisitions were made in the Benchmark JER Limited
Partnerships and we made an investment of £72.8 million in WELPUT and the WEL
Property Limited Partnership.
Total disposals of £262.7 million were completed at a net pre-tax profit of £7.7
million of which £2.3 million was recognised in the profit and loss account and
the balance as an increase in the revaluation reserve.
Presently, in Central London, we manage a portfolio of 2.1 million sq ft with
400 tenants, valued at £1.2 billion with 86.1% by value in the West End.
DEVELOPMENTS
We spent £14.3 million on our development programme during the year.
We completed our development of Medius, Sheraton Street, W1 providing 67,000 sq
ft of offices and 6,000 sq ft of retail space and to date 20,000 sq ft has been
let producing an annual net rental income of £0.8 million.
The development of the new Waitrose retail store on Motcomb Street, Belgravia,
SW1 is continuing on schedule and within budget with an anticipated handover to
Waitrose in October 2002. The offices, Cubitt House, above the Waitrose store
will comprise 18,000 sq ft and will be ready for marketing at the beginning of
2003.
Development works on our Golden Square Estate will commence shortly and will
provide 42,000 sq ft of new offices, 17,000 sq ft of commercial space and 4
residential units, which will be available in Autumn 2004.
We have obtained planning consent for a new office development to provide 33,500
sq ft at Melrose House, Savile Row, W1 which, subject to freeholder consent for
the development, will provide new space early in 2005.
DIVIDEND
An interim dividend of 1.95p per share was paid on 9 April 2002 and the Board
now recommends the payment of a final dividend of 3.1p per share to be paid on
18 November 2002 to shareholders on the register at 18 October 2002. This
represents an increase of 11.0% over the total dividend per share paid for the
year to 30 June 2001.
In addition, we paid a special interim dividend of 60p per share which amounted
to £73 million on 16 November 2001.
OUTLOOK
The Central London property market continues to have short-term uncertainties
closely linked to the economic prospects and general corporate confidence both
in Europe and America.
However, London remains an important global financial centre and, provided
enough attention is paid by the relevant authorities to provide an
infrastructure to complement its importance as a city in which to live and work,
then the property market will remain strong in the longer term.
I believe that the West End office market still offers the characteristics of
long-term strength and resilience with little new space being speculatively
developed and a wide range of businesses wishing to locate to modern buildings
in good locations.
We are in a good position to take advantage of the opportunities in the
marketplace as they appear.
I would like to thank my co-directors and our entire management team for their
commitment and hard work for the continued success of the company and we look
forward to the next stage of our growth.
Tan Sri Quek Leng Chan
Chairman
17 September 2002
REVIEW OF OPERATIONS
CORPORATE EVENTS
ESTABLISHMENT OF WELPUT
In July 2001, we established a new specialist property unit trust, The West End
of London Property Unit Trust ('WELPUT') in partnership with Schroder Property
Investment Management. We sold for a total consideration of £249.5 million, our
entire partnership interests in Benchmark (Jersey) No. 1 Limited Partnership to
WEL Property Limited Partnership in which WELPUT has a 50.1% interest and the
remaining 49.9% is held by us.
We currently have an effective ownership position of 73% and we are seeking to
reduce that to nearer 45% at least by 30 June 2003. WELPUT has appointed HSBC
Investment Bank to assist it in raising at least £100 million through the sales
of new units and marketing is ongoing at the current time.
On 16 September 2002 WEL Property Limited Partnership entered into contractual
arrangements to acquire the freehold of Invensys House, Carlisle Place, SW1 from
the trustee of the Schroder Exempt Property Unit Trust ('SEPUT'). The aggregate
consideration is £26.07 million, to be paid on 9 January 2003. Also on that date
SEPUT will subscribe £13.6 million for units in WELPUT at an issue price based
upon WELPUT's net asset value as at 31 December 2002. This would dilute
Benchmark's effective interest in WELPUT from 73% to 62%.
There are also contemporaneous discussions with a number of property owners, to
acquire properties in the West End with part of the consideration being in the
form of the issue of new units in WELPUT.
SPECIAL DIVIDEND AND SHARE CONSOLIDATION
In November 2001, we paid a special interim dividend of 60p per share to
shareholders totalling £73 million and we also carried out a share consolidation
of 8 new 62.5p shares for every 10 existing 50p shares held.
PROPERTY REVIEW
ACQUISITIONS
During the year, some £159.0 million was spent on acquisitions, of which the
principal transactions were:
• £58.0 million of properties in the West End which included the
long leasehold interests in 29/30 St James's Street, SW1, 25/28 Old Burlington
Street, W1 (where, subsequent to the year end, we have also acquired an
intermediary leasehold interest for £5.0 million from CIN) and the freehold of
Trevelyan House, 30 Great Peter Street, SW1.
• £56.4 million of properties by Benchmark JER 1 Limited
Partnership and Benchmark JER 2 Limited Partnership comprising 95 Fetter Lane,
EC4 and the remaining 50% interest not already owned in 90 Long Acre, WC2
including the freehold. Our share of the acquisition amounted to £28.2 million.
• A £72.8 million investment in WELPUT and the WEL Property
Limited Partnership.
DISPOSALS
During the year, we continued to pursue our stated objective of achieving sales
of non-core properties to take advantage of the market. Total disposals of
£262.7 million were achieved, giving a pre-tax profit of £7.7 million over book
value of which £2.3 million was recognised in the profit and loss account and
the balance as an increase in the revaluation reserve. The surplus over
historic cost was £82.1 million of which £22.4 million was recognised in the
period to 30 June 2002. The principal disposals were:
• Portfolio of 8 properties in Benchmark (Jersey) No. 1 Limited
Partnership for £249.5 million
• 49/50 South Molton Street, W1
• 40/41 Old Bond Street, W1
• 63/64 South Molton Street, W1
• 4 flats at Belgravia
• 24 Cambridge Circus and 115/119 Shaftesbury Avenue, WC2 from
the BJER portfolio (our share: 50%)
DEVELOPMENTS
Medius, Sheraton Street, W1
Practical completion of the development of 67,000 sq ft of offices and 6,000 sq
ft of retail space was achieved in July 2001. To date, 20,000 sq ft has been
let producing an annual net rental income of £0.8 million.
Belgravia Estate, SW1
The 21,000 sq ft foodhall, pre-let to Waitrose, is due for practical completion
in October 2002. 18,000 sq ft of offices, which are being developed
speculatively, are due for practical completion in January 2003.
Golden Square Estate, W1
Planning consent was obtained in 2002 for the development of 66,000 sq ft net of
offices, retail, leisure and residential space. Vacant possession was obtained
in June 2002 and the development has commenced.
Melrose House, Savile Row, W1
Planning consent was obtained in May 2002 for 33,500 sq ft net of offices and
retail space. Vacant possession will be available from March 2003, and a start
is anticipated at that time subject to the freeholder's consent for a new
development and legal formalities with the local authority.
ASSET MANAGEMENT INITIATIVES
BENCHMARK DIRECT
A new direct marketing initiative was launched in January 2002, complementing
traditional agency with web-based information and telesales. Since inception 7
deals totalling 27,000 sq ft of offices at rents totalling £1.3 million per
annum have been concluded with the involvement of Benchmark Direct.
BENCHMARK CUSTOMER CENTRE
A new tenant service product was launched in June 2002, in collaboration with
ISG plc. Benchmark Customer Centre aims to deliver high standard services to
tenants, both under the terms of leases and additional optional services, using
an extranet based communication system.
REFURBISHMENT PROGRAMME
During the period July 2001 to June 2002 6 projects totalling 84,000 sq ft were
undertaken and delivered on time and within budget. These include 2 floors
totalling 43,000 sq ft at 125 Shaftesbury Avenue and the 4th floor at 90 Long
Acre (21,000 sq ft).
VACANCY
Currently, of the 2.1 million sq ft under management, 128,250 sq ft or 6.1% is
vacant with a total estimated rental value of £5.5 million per annum.
PORTFOLIO ANALYSIS
The following analysis takes into account all properties owned as at the date of
this report by the Company, its subsidiaries, our 50% share of the portfolio
held in the Benchmark JER Limited Partnerships and our share of the WELPUT
portfolio.
• Lease profile
34% of our annual net rental income extends beyond 10 years.
>15 yrs 16.8%
11-15 yrs 16.8%
5-10 yrs 30.5%
<5 yrs 35.9%
• Location
86% by value of our properties are in the West End.
West End 86.1%
City 13.9%
The breakdown of the West End portfolio into key sub-markets by value are as
shown below.
Mayfair & St. James's 38.8%
Soho/Covent Garden 30.5%
Kensington/Hammersmith 20.6%
Chelsea/Belgravia 6.2%
Victoria/Westminster 3.9%
• Use
79% of the annual net rental income is derived from offices with those in the
West End contributing 68% and 18% from retail use. The 'others' category
includes residential, leisure and car parking uses.
West End Offices 65.2%
Retail 17.8%
City Offices 13.8%
Others 3.2%
• Tenure
Despite our concentration in the West End, where many properties are leasehold,
we hold 68% by value of our properties as freeholds or on leases with at least
100 years unexpired.
<25 years 0.9%
25-49 years 1.5%
50-74 years 9.1%
75-100 years 20.4%
>100 years 24.6%
Freehold 43.5%
• Tenant profile
Tenants from the financial services sector contribute 25% of our net annual
income, whilst 15% comes from major retailers with UK corporates contributing
another 13%. Exposure to the technology, media and telecommunications (TMT)
sector is 8%.
Financial Services 25.0%
Others 18.7%
Major Retailers 14.7%
UK Corporates 13.5%
Professional Services 6.8%
TMT 6.0%
Government 4.3%
FINANCIAL REVIEW
NET ASSETS PER SHARE
The investment portfolio, including those held in our joint venture with JER
Partners, was revalued at 30 June 2002 by DTZ Debenham Tie Leung Limited. The
properties in The West End of London Property Unit Trust ('WELPUT') were valued
on the same date by CB Hillier Parker Limited and Atis Real Weatheralls Limited.
The valuation showed a net increase of £17.7 million representing a 2.0%
uplift on the investment properties held at the year end, compared to the 31
December 2001 interim valuation. Correspondingly, for the full year the value
of the investment properties remained the same (2001 - 6.0% uplift).
The required adoption, effective for the first time in this financial year, of
the Urgent Issues Task Force Abstract 28 'Operating Lease Incentives' (UITF 28)
and the Financial Reporting Standard 19 'Deferred Tax' (FRS 19) have
necessitated the restatement of the comparative figures for the previous
financial year end, 30 June 2001. The restated basic and diluted net asset
values per share as at 30 June 2001 to take account of these accounting changes
are 375.5p and 367.0p respectively compared with 383.3p and 373.9p as previously
reported. These figures are reported following the full adoption of FRS 19, as
stated above. Adding back the special dividend of £73 million, adjusted net
assets were £455.4 million (2001 - restated £462.3 million) and have been
calculated excluding the additional deferred tax liability in respect of capital
allowances of £4.5 million (2001 - £5.3 million) as it is the Group's belief
that such a liability is unlikely to crystallise.
The adjusted diluted net assets per share as at 30 June 2002 is 382.4p, a 3.1%
increase on the previous year's figure of 370.9p.
OPERATING RESULTS
Gross rental income (including share of joint ventures) increased by 20.9% to
£54.7 million (2001 - £45.3 million). The main contribution to profits was
from net rental income. Net rental income rose by 26% to £48.6 million
including the company's share of joint ventures (2001 - £38.5 million). Our
joint ventures contributed £18.5 million of net rental income (2001 - £6.0
million).
The annualised net rental income including our share of joint ventures increased
to £53.0 million from £50.5 million last year.
Profit before taxation reduced to £13.6 million from £22.6 million previously.
However last year's profit included the £6.5 million profit on disposal of
shares in Corpnex PLC. Taking out this profit, the reduction in profit before
tax was only 15.5%. Profit after tax was £11.8 million compared to £14.9
million previously.
Earnings per share on a diluted basis reduced to 11.0p from 12.6p previously.
The adjusted earnings per share, which exclude the post-tax profit arising on
sales of trading and investment properties and disposal of shares in Corpnex PLC
and the different taxation charge in respect of capital allowances arising on
the adoption of FRS 19, was 9.6p per share compared to 7.4p previously.
OVERHEADS
Total overheads for the year amounted to £6.0 million (2001 - £4.3 million).
This represents 0.50% of the value of properties under management compared to
0.42% previously. During the year the principle of a bonus bank was
established and it was determined by the Board that the payment of a special
dividend to shareholders on 16 November 2001 warranted the establishment of a
bonus bank. The total amount of the bonus bank was £730,000 and if this amount
was deducted, total overheads for the year would be £5.2 million representing
0.44% of the value of properties under management.
TAXATION
The taxation charge of £1.7 million (2001 - £7.7 million) represents 12.8% (2001
- 34.2%) of our pre-tax profits. The reduction is due to the release of a £3.4
million deferred tax charge on properties disposed.
FINANCE
The Group finances its operations through a mixture of equity, convertible loan
stock and bank borrowings. The Group's objective is to maintain sufficient
resources to meet its financing requirements at the lowest achievable cost and
minimal risk, whilst maintaining sufficient flexibility to fund property
acquisitions and capital expenditure. No speculative treasury transactions are
undertaken.
The main risk arising from the Group's financial liabilities is interest rate
risk. The Group borrows at both fixed and floating rates of interest and
additionally uses interest rate derivatives to manage exposure to interest rate
movements.
At the year end 73% (2001 - 59%) of borrowings were at fixed interest rates and
the weighted average rate of interest was 6.5% (2001 - 7.3%). Total net
borrowings amounted to £246.9 million (2001 - £267.8 million) representing a
gearing of 65.4% (2001 - 58.6%). However if our share of the joint ventures'
non-recourse debt is included, the gearing would be 129.6% (2001 - 78.3%). The
increase is mainly due to the inclusion of our share of the WELPUT debt.
DEBT STRUCTURE
The breakdown of the type of borrowings are shown below.
Unsecured, recourse 33.9%
Secured, non-recourse 15.2%
Share of JV's debt,
secured, non-recourse 50.9%
6 YEAR REVIEW
Since its recapitalisation in October 1996, Benchmark has undergone rapid
transformation to become a key Central London property specialist and as at the
year end it now has £1.2 billion of properties under management compared to £20
million in June 1996. Its track record in terms of acquisitions, disposals and
capital expenditure is shown on the table below:-
£ million
1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 Total
Acquisitions 176.9 222.0 35.3 186.5 169.7 159.0 949.4
Disposals - 49.0 85.9 167.0* 76.8 262.7 641.4
Capital Expenditure 2.4 31.4 63.8 44.4 38.7 14.3 195.0
* Excluding sale of 49.9% of Kensington Estate
As Benchmark is primarily a property investment company, a key performance
indicator is growth in the diluted net asset value (NAV) per share.
During this period, the annual compound growth in diluted NAV per share
including the cumulative dividends per share that have been paid or are proposed
is 16.1% per annum.
Consolidated Profit and Loss Account
Year ended 30 June 2002
2001
2002 (restated)
Note £'000 £'000
GROSS RENTAL INCOME
Group and share of joint ventures 54,737 45,268
Less: share of joint ventures (19,375) (7,252)
35,362 38,016
NET RENTAL INCOME
Group and share of joint ventures 48,554 38,468
Less: share of joint ventures (18,523) (6,022)
30,031 32,446
Net operating profit from Corpnex PLC - 593
Profit on disposal of trading properties 2 - 745
Administration expenses (5,968) (4,297)
GROUP OPERATING PROFIT 24,063 29,487
Share of operating profit in joint ventures 7 17,801 6,035
TOTAL OPERATING PROFIT 41,864 35,522
Profit on disposal of investment properties 2 2,287 3,101
Profit on disposal of shares in Corpnex PLC - 6,500
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST 44,151 45,123
Group net interest payable and similar charges 3 (13,914) (17,507)
Share of net interest payable in joint ventures 7 (16,674) (5,008)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 13,563 22,608
Tax on profit on ordinary activities 4 (1,734) (7,742)
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 11,829 14,866
Minority interests (107) 450
PROFIT FOR THE FINANCIAL YEAR 9 11,722 15,316
Dividends 5 (77,925) (5,538)
RETAINED (LOSS)/PROFIT FOR THE YEAR (66,203) 9,778
EARNINGS PER SHARE - BASIC 6 11.0p 12.6p
- DILUTED 6 11.0p 12.6p
ADJUSTED EARNINGS PER SHARE 6 9.6p 7.4p
All income was derived from within the United Kingdom from continuing
operations. The comparative figures for the year ended 30 June 2001 have been
restated as set out in note 1.
Consolidated Balance Sheet
As at 30 June 2002
2001
2002 (restated)
Note £'000 £'000
FIXED ASSETS
Investment and development properties 571,112 746,819
Joint ventures 7
Share of gross assets 382,361 146,837
Share of gross liabilities (278,471) (106,191)
103,890 40,646
Investments 3,213 3,213
Other tangible assets 255 272
678,470 790,950
CURRENT ASSETS
Debtors 14,902 8,993
Investments 916 916
Cash at bank and in hand 5,172 7,818
20,990 17,727
CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR (39,866) (46,365)
NET CURRENT LIABILITIES (18,876) (28,638)
TOTAL ASSETS LESS CURRENT LIABILITIES 659,594 762,312
CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR (202,734) (226,250)
CONVERTIBLE UNSECURED LOAN STOCK (49,365) (49,318)
PROVISIONS FOR LIABILITIES AND CHARGES (10,225) (12,306)
NET ASSETS 397,270 474,438
CAPITAL AND RESERVES
Called up share capital 8 60,906 60,850
Share premium account 9 151,490 151,392
Revaluation reserve 9 145,769 168,449
Other reserves 9 51 51
Profit and loss account 9 19,627 76,298
EQUITY SHAREHOLDERS' FUNDS 377,843 457,040
Minority interests 19,427 17,398
TOTAL CAPITAL EMPLOYED 397,270 474,438
NET ASSETS PER SHARE - BASIC 6 387.7p 375.5p
- DILUTED 6 378.4p 367.0p
ADJUSTED NET ASSETS PER SHARE - BASIC 6 392.4p 379.9p
- DILUTED 6 382.4p 370.9p
The accounts have been approved by the Board of Directors and were signed on 17
September 2002 on its behalf by:
N J Kempner
K C Wong
Other Primary Statements
Year ended 30 June 2002
Consolidated Statement of Total Recognised Gains and Losses
2001
2002 (restated)
£'000 £'000
Profit for the financial year 11,722 15,316
Share of (deficit)/surplus arising on revaluation of investment properties (7,968) 42,742
Unrealised profit on sale to WELPUT 5,393 -
Tax on realisation of revaluation surpluses on investment property (10,573) (4,872)
disposals
Total recognised gains and losses for the year (1,426) 53,186
Prior year adjustment (note 1) (9,398) -
Total recognised gains and losses since last accounts (10,824) 53,186
The total recognised gains and losses include losses of £11,091,000 (2001: gains
of £9,607,000) from joint ventures (note 7).
Note of Historical Cost Profits and Losses
2001
2002 (restated)
£'000 £'000
Profit on ordinary activities before taxation 13,563 22,608
Realisation of property revaluation surpluses in prior periods 20,105 19,333
Historical cost profit on ordinary activities before taxation 33,668 41,941
Historical cost (loss)/profit retained after tax, minority interests and (56,671) 24,239
dividends
Reconciliation of Movements in Shareholders' Funds
2001
2002 (restated)
£'000 £'000
Total recognised gains and losses for the year (1,426) 53,186
Dividends (77,925) (5,538)
Issue of shares 154 1,490
(Decrease)/increase in total capital employed (79,197) 49,138
Opening shareholders' funds (originally £466.4m before prior year
adjustment of £9.4m) 457,040 407,902
Closing shareholders' funds 377,843 457,040
Consolidated Cash Flow Statement
Year ended 30 June 2002
2002 2001
Note £'000 £'000
OPERATING ACTIVITIES
Net cash inflow before sales of and additions to trading properties 15,315 45,922
Net cash inflow from sales of and additions to trading properties - 5,637
NET CASH INFLOW FROM OPERATING ACTIVITIES 10(a) 15,315 51,559
DIVIDENDS FROM JOINT VENTURES AND ASSOCIATES 341 -
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 785 547
Interest paid (15,230) (20,801)
NET CASH OUTFLOW FOR RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (14,445) (20,254)
TAXATION
Corporation tax paid (7,301) (4,018)
CAPITAL EXPENDITURE
Acquisition of investment properties (83,629) (69,380)
Disposals and other capital receipts 263,179 77,121
Purchase of other fixed assets (65) (1,036)
NET CASH INFLOW FOR CAPITAL EXPENDITURE 179,485 6,705
ACQUISITIONS AND DISPOSALS
Investment in joint ventures (74,658) (31,039)
NET CASH OUTFLOW FOR ACQUISITIONS AND DISPOSALS (74,658) (31,039)
EQUITY DIVIDENDS PAID (78,068) (5,158)
CASH INFLOW/(OUTFLOW) BEFORE USE OF LIQUID RESOURCES AND FINANCING 20,669 (2,205)
FINANCING
Issue of shares 154 1,490
(Decrease)/increase in debt 10(b) (23,469) 7,216
NET CASH (OUTFLOW)/INFLOW FROM FINANCING (23,315) 8,706
(DECREASE)/INCREASE IN CASH IN THE YEAR 10(b) (2,646) 6,501
Notes to the Accounts
1 RESTATEMENT OF COMPARATIVES
The effects of adopting UITF28 (Operating Lease Incentives) and FRS19 (Deferred
Tax) for the current and comparative years are as follows:
Gross Taxation Profit Earnings per share Shareholders' Net assets per share
property after (pence) funds (pence)
income taxation
£'000 £'000 £'000 Basic Diluted £'000 Basic Diluted
Year ended 30 June 2001
As previously reported 36,930 (5,737) 15,785 13.4 13.3 466,438 383.3 373.9
Effect of adopting UITF28 1,086 (326) 760 0.6 0.5 (326) (0.3) (0.3)
Effect of adopting FRS19 - (1,679) (1,679) (1.4) (1.2) (9,072) (7.5) (6.6)
As restated 38,016 (7,742) 14,866 12.6 12.6 457,040 375.5 367.0
Year ended 30 June 2002
Without adoption of
UITF28 and FRS19 34,750 (3,638) 9,313 8.6 8.9 385,312 395.4 385.0
Effect of adopting UITF28 612 (184) 428 0.4 0.4 (485) (0.5) (0.4)
Effect of adopting FRS19 - 2,088 2,088 2.0 1.7 (6,984) (7.2) (6.2)
As reported 35,362 (1,734) 11,829 11.0 11.0 377,843 387.7 378.4
2 PROFIT ON DISPOSAL OF TRADING AND INVESTMENT PROPERTIES
The profit on disposal of trading properties was £nil (2001 - £745,000).
The profit on disposal of investment properties comprises:
2002 2001
£'000 £'000
Aggregate consideration 262,731 66,410
Less: sales costs (1,551) (1,071)
Net proceeds 261,180 65,339
Less: historical cost of properties (179,118) (42,905)
Historical cost profit 82,062 22,434
Less: revaluation surpluses in prior periods (74,382) (19,333)
7,680 3,101
Less: unrealised profit on disposal to WELPUT (5,393) -
2,287 3,101
3 GROUP NET INTEREST PAYABLE AND SIMILAR CHARGES
2002 2001
£'000 £'000
Amounts payable on bank loans and overdrafts 11,788 17,498
5.75% Convertible Unsecured Loan Stock 2013 2,930 2,923
Less: interest capitalised - (2,378)
14,718 18,043
Interest receivable (804) (536)
13,914 17,507
Interest receivable includes £161,000 (2001 - £119,000) arising from loan notes
issued by Agnew's Property Investments Limited ('APIL') in which the Company has
a 25% interest.
4 TAX ON PROFIT ON ORDINARY ACTIVITIES
2002 2001
£'000 (restated)
£'000
Taxation based on profit for the year:
Corporation tax at 30% (2001 - 30%) 2,272 2,940
Tax arising on capital items 1,512 2,815
3,784 5,755
Deferred taxation on revenue profit 1,325 1,679
Release of deferred taxation (3,406) -
Group tax charge 1,703 7,434
Share of tax from joint ventures 31 308
1,734 7,742
Factors affecting the tax charge for the year
The tax assessed for the year is lower than the standard rate of corporation tax
in the UK of 30% (2001 - 30%). The differences are explained below:
2002 2001
£'000 £'000
Profit on ordinary activities before taxation (page 16) 13,563 22,608
Profit on ordinary activities multiplied by the standard rate of 4,069 6,782
corporation tax at 30%
Capital allowances (1,567) (654)
Capitalised interest - (713)
Additional tax on property sales 826 (66)
Expenses disallowed 487 714
Share of tax from joint ventures (31) (308)
Tax on profit on ordinary activities 3,784 5,755
5 DIVIDENDS
2002 2001
£'000 £'000
First interim dividend paid of 60p (2001 - nil) per share 73,006 -
Second interim dividend paid of 1.95p (2001 - 1.95p) per share 1,898 2,374
Final dividend proposed of 3.1p (2001 - 2.6p) per share 3,021 3,164
Total dividends payable for the year of 65.05p (2001 - 4.55p) per share 77,925 5,538
6 EARNINGS/NET ASSETS PER SHARE
Earnings per share
The weighted average number of shares in issue during the year was 106,317,100
(2001 - 121,261,040) and the earnings attributable to ordinary shares were
£11,722,000 (2001 - restated £15,316,000).
Adjusted earnings per share are calculated on the same weighted average number
of shares but exclude the post-tax profit arising on sales of trading and
investment properties of £775,000 (2001 - £2,758,000) and the disposal of shares
in Corpnex PLC of £nil (2001 - £4,550,000) and the deferred taxation credit of
£780,000 (2001 - charge of £966,000) in respect of capital allowances arising on
the adoption of FRS19. The deferred tax is excluded as the Group's experience
is that it is very unusual for capital allowances to be claimed back through
balancing charges on the disposal of a property.
Diluted earnings per share have been calculated for both years adopting the
method set out in Financial Reporting Standard 14 - Earnings per Share.
In calculating diluted earnings per share the weighted average number of shares
have been increased to 121,962,374 (2001 - 137,858,216) and earnings adjusted to
£13,734,000 (2001 - restated £17,362,000) to take account of the dilutive effect
of the potential exercise of conversion rights relating to the 5.75% Convertible
Unsecured Loan Stock 2013 ('CULS') and share options.
Net assets per share
The number of shares in issue at 30 June 2002 was 97,450,240 (2001 -
121,700,846) and net assets attributable to shareholders were £377,843,000 (2001
- restated £457,040,000).
Adjusted net assets per share have been calculated on the same number of shares
but exclude the additional deferred tax liability in respect of capital
allowances of £4,531,000 (2001 - £5,311,000) arising from the adoption of FRS19.
Adjusted net assets have been calculated on this basis as the Group's
experience is that deferred tax on capital allowances in relation to investment
properties is unlikely to crystallise in practice.
Diluted net assets per share, reflecting the potential exercise of conversion
rights relating to the CULS, were 378.4p as at 30 June 2002 (2001 - restated
367.0p), based on net assets of £427,208,000 (2001 - restated £506,358,000) and
shares in issue of 112,911,458 (2001 - 137,955,033).
Diluted adjusted net assets per share, were 382.4p as at 30 June 2002 (2001 -
370.9p), based on net assets of £431,739,000 (2001 - restated £511,669,000) and
shares in issue of 112,911,458 (2002 - 137,955,033).
7 JOINT VENTURES
£'000
At 1 July 2001 at valuation 40,646
Net equity investments 74,658
Deficit on revaluation of investment properties (12,187)
Share of retained profit for the year 773
Share of net assets at 30 June 2002 103,890
In August 2001 Benchmark sold for a total consideration of £249.5 million its
entire partnership interests in Benchmark (Jersey) No.1 LP to WEL Property
Limited Partnership ('WEL Partnership'), a Jersey Limited Partnership in which
The West End of London Property Unit Trust ('WELPUT'), a Jersey unit trust, has
a 50.1% interest. Benchmark has retained a 49.9% interest in WEL Partnership
and has a 46% interest in WELPUT.
Under the terms of the WEL Partnership deed and the WELPUT Trust deed, Benchmark
does not have the right to control either entity. In view of Benchmark's
effective joint control it has accounted for its WELPUT interests as a joint
venture in accordance with Financial Reporting Standard 9 - Associates and Joint
Ventures. Benchmark will be seeking to reduce its effective interest below 50%
by 30 June 2003.
During the year the Group established a 49.9% partnership interest in Benchmark
JER 2 Limited Partnership, which operates in the United Kingdom.
Summarised aggregated financial statements:
Benchmark Benchmark WEL
JER 1 JER 2 Partnership
Limited Limited and Total Total
Partnership Partnership WELPUT 2002 2001
£'000 £'000 £'000 £'000 £'000
Percentage interest at year end 50.0% 49.9% 72.9%*
Profit and loss accounts - Group Share
Year to 30 June 2002
Gross rental income 7,699 675 11,001 19,375 7,252
Operating profit 7,994 637 9,170 17,801 6,035
Net interest payable (7,357) (470) (8,847) (16,674) (5,008)
Profit on ordinary activities before taxation 637 167 323 1,127 1,027
Taxation (31) - - (31) (308)
Profit for the year 606 167 323 1,096 719
Balance sheets - Group Share
As at 30 June 2002
Total Total
2002 2001
£'000 £'000 £'000 £'000 £'000
Investment properties at valuation 132,085 32,435 199,857 364,377 127,770
Trading properties 6,976 - - 6,976 14,238
Cash 2,558 831 5,116 8,505 3,408
Other current assets 46 26 2,431 2,503 1,421
Current liabilities due in less than one year (5,266) (13,679) (7,551) (26,496) (5,598)
Borrowings due after more than one year (92,155) (14,718) (145,102) (251,975) (100,593)
44,244 4,895 54,751 103,890 40,646
*The Group has a 49.9% interest in WEL Partnership and a 46% interest in WELPUT
which has a 50.1% interest in WEL Partnership giving an effective economic
interest of 72.9%.
The investment properties are stated on the basis of their open market values as
at 30 June 2002. The valuations were carried out by DTZ Debenham Tie Leung
Limited, CB Hillier Parker Limited and Atis Real Weatheralls Limited, Chartered
Surveyors, acting as External Valuers and in accordance with the Appraisal and
Valuation Manual of the Royal Institution of Chartered Surveyors.
The accounting period for Benchmark JER 1 and 2 Limited Partnerships is 30 June
and for WEL Partnership and WELPUT the period is 30 September.
All joint venture borrowings are non-recourse to the Group.
8 SHARE CAPITAL
Number Class £'000
Authorised:
At 1 July 2001 177,000,000 ordinary shares of 50p each 88,500
Share consolidation (35,400,000) -
At 30 June 2002 141,600,000 ordinary shares of 62.5p each 88,500
Allotted, called up and fully
paid:
At 1 July 2001 121,700,846 ordinary shares of 50p each 60,850
Issued pre share 7,984 ordinary shares of 50p each 4
consolidation
121,708,830 ordinary shares of 50p each 60,854
Share consolidation (24,341,766) -
97,367,064 ordinary shares of 62.5p each 60,854
Issued post share 83,176 ordinary shares of 62.5p each 52
consolidation
At 30 June 2002 97,450,240 ordinary shares of 62.5p each 60,906
9 RESERVES
Share Revaluation Other Profit and
premium reserve reserves loss
account £'000 £'000 account Total
£'000 £'000 £'000
At 1 July 2001 151,392 169,535 51 84,610 405,588
Prior year adjustments (UITF28 & FRS19) - (1,086) - (8,312) (9,398)
At 1 July 2001 as restated 151,392 168,449 51 76,298 396,190
Premium on shares issued 98 - - - 98
Share of deficit arising on revaluation of
investment properties - (7,968) - - (7,968)
Unrealised profit on sale to WELPUT - 5,393 - - 5,393
Revaluation surpluses realised on
investment property disposals - (20,105) - 20,105 -
Tax on realisation of revaluation
surpluses on investment property
disposals - - - (10,573) (10,573)
Profit for the financial year - - - 11,722 11,722
Dividends - - - (77,925) (77,925)
At 30 June 2002 151,490 145,769 51 19,627 316,937
10 NOTES TO THE CONSOLIDATED CASHFLOW STATEMENT
(a) Reconciliation of operating profit to operating cash flows
2002 2001
£'000 (restated)
£'000
Operating profit 24,063 29,487
Depreciation 82 497
Profit on sale of trading properties - (745)
Amortisation of leasehold properties 874 823
(Increase)/decrease in debtors (7,878) 14,991
Increase in investments - (166)
(Decrease)/increase in creditors (1,826) 1,035
Net cash inflow before sales of and additions to trading properties 15,315 45,922
Net cash inflow from sales of and additions to trading properties - 5,637
Net cash inflow from operating activities 15,315 51,559
(b) Reconciliation of net cash flow to movement in net debt
2002 2001
£'000 £'000
(Decrease)/increase in cash in the year (2,646) 6,501
Cash outflow/(inflow) from decrease/(increase) in debt 23,469 (7,216)
Movement in net debt 20,823 (715)
Net debt at start of year (267,750) (267,035)
Net debt at end of year (246,927) (267,750)
(c) Analysis of net debt
2002 Cashflow 2001
£'000 £'000 £'000
Cash at bank and in hand 5,172 (2,646) 7,818
Debt due after more than one year (252,099) 23,469 (275,568)
Net debt (246,927) 20,823 (267,750)
11 BASIS OF PREPARATION
The above financial information does not constitute the Company's full statutory
accounts for the years ended 30 June 2001 or 2002 but is derived from those
accounts. Statutory accounts for the year ended 30 June 2001 have been
delivered to the Registrar of Companies, whereas those for 2002 will be
delivered following the Company's Annual General Meeting. The auditors have
reported on those accounts; their reports were unqualified and did not contain a
statement under Section 237 (2) or (3) of the Companies Act 1985.
The Annual Report and Accounts will be posted to shareholders on or before 4
October 2002 and will be available from the Company's Registered Office at: 11
Grafton Street, London W1S 4EW.
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 1 hour ago Softcat
- 1 hour ago Rathbones Group
- 1 hour ago Coral Products
- 1 hour ago Burberry Group
- 2 hours ago Primary Health Properties