Final Results - Pre-tax Profit Up 263%

Cardiff Property PLC 7 December 1999 THE CARDIFF PROPERTY PLC (The investment and development portfolio, including Campmoss Property, valued in excess of £30m, is primarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire.) PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 1999 HIGHLIGHTS * Group turnover £3.4m (1998: £1.4m) * Property sales £5.6m (1998: £0.5m) * Net asset value per share 461p (1998: 376p*) + 23% * Profit before tax £1.7m (1998: £0.5m) + 239% * Earnings per share 53.3p (1998: 14.7p) + 263% * Total dividend for the year 4.10p per share (1998: 3.50p) 17% * Final dividend 2.85p per share (1998: 2.40p) * Gearing 16% (1998: 46%) * See chairman's statement Richard Wollenberg, Chairman, commented: 'The group, including Campmoss Property, performed well, achieving new highs in asset value and earnings per share. The area in which the group operates has become well established as a preferred location for IT and high-tech companies and the trend appears set to continue. Rental levels for modern offices have risen in excess of 15% over the year and the current strength in this sector indicates further growth.' For further information The Cardiff Property Plc Richard Wollenberg 01784 437444 Albert E Sharp Securities Will Martin 0171 464 8421 Binns & Co Public Relations Brian Coleman-Smith 0171 786 9600 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES (The investment and development portfolio, including Campmoss Property, valued in excess of £30m, is primarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire.) PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 1999 Chairman's statement The group, including Campmoss Property, had another excellent year. Pre-tax profits for the year to 30 September 1999 increased by 239% to £1.69m (1998: £0.50m) including £0.33m (1998: £0.07m) representing the group's share of profits from Campmoss Property Company Limited, our 47.62% owned joint venture undertaking. A major part of the increase in profits was generated by the sale of investment and development properties. Total turnover rose to £3.41m (1998: £1.38m) including property sales of £2.00m (1998: £0.07m). In addition, sales of investment properties totalled £3.57m (1998: £0.41m). Profit after tax amounted to £1.68m (1998: £0.49m) and earnings per share were 53.3p (1998: 14.7p). Dividends The directors recommend a final dividend of 2.85p per share (1998: 2.40p), bringing the total dividend for the year to 4.10p per share (1998: 3.50p), an increase of 17%. Financial Our commercial and residential investment portfolio, which is valued annually by Healey & Baker and Aitchison Raffety respectively, produced a value of £6.60m (1998: £9.67m). This year's figure reflects a number of disposals. Total assets, including our share of the net assets of Campmoss Property of £3.96m (1998: £3.18m), amounted to £17.63m (1998: £19.01m). Net assets increased to £13.56m (1998: £12.47m) equivalent to 461p per share (1998: 376p), an increase of 23%. The comparable figure for 1998 excludes the directors' estimate of an increase in value of £0.50m on a development property at Windsor sold in the year under review. The group's bank borrowing facilities remain available with the rate of interest, as in previous years, being linked to base rate. Gearing reduced to 16% against 46% at the last year- end. Heathrow, west of London, the M25, M4 and M3 motorways Commercial property to the west of London, close to Heathrow Airport and in the counties of Surrey and Berkshire, continues to be in high demand by both occupiers and institutional investors. Although development activity has increased, the level of take up has been high and tenant demand remains strong. Rental levels for modern offices have risen in excess of 15% over the year and the current strength in this sector of the market indicates further growth. The area in which the group operates has become well established as a preferred location for IT and high tech companies and this trend appears set to continue. The growth in this sector and the availability of new capital remains an important factor in allowing businesses to expand, creating new job opportunities and the requirement for new or larger premises. Well-located office and business use space, built to top specification, remains a priority for most occupiers and institutions. Furthermore, those developments offering secure and good parking facilities will be at the forefront of the market place. Residential values in Surrey and Berkshire continue to benefit from the pleasant out of town working environment and the strength of the local employment market. Obtaining planning permission remains a difficult and lengthy process adding further premium value to new homes and increases in excess of 20% have been achieved over the year. Commercial investments The majority of our commercial property investment portfolio, located to the west of Heathrow Airport, at Windsor, Egham and Hatton Cross is primarily let to good covenants on long-term institutional leases. These properties produce an annual gross rental income of £530,000. We disposed of our new office building in Egham in October 1998 and your directors will take advantage of any further opportunities as they occur. Commercial developments After completion of refurbishment works at our 8,000 sq ft office scheme in Redhill, we received a cash offer of £1.31m from an owner-occupier. The freehold sale was completed in July 1999 at a satisfactory profit. At Windsor, the re-building of the Windsor Business Centre, comprising six individual business units totalling 20,000 sq ft, was completed during the year. Two units have been let and offers for the remaining space are being evaluated. The units incorporate 30% office space and average rentals of £10 per sq ft have been achieved. The construction of a new 16,000 sq ft headquarters office building known as The Clock Tower, Brookwood, is nearing completion. At the time of writing this report two offers from prospective tenants have been received. I anticipate that on a fully let basis, Windsor and Brookwood should produce an annual gross rental income of approximately £500,000. The investment value is expected to be in excess of £5m. Residential At Clarence Road, Windsor, an improved planning consent for twenty-one flats was granted and a cash offer of £1.48m accepted from a national house-builder. The sale generated a significant surplus over book value. The development of seven flats at Egham was completed during 1998 and the remaining three flats sold during the year. At Thames Ditton, Surrey, the construction of an executive house was completed and contracts for sale exchanged just before the year-end. The sale was completed in October 1999. At Hambledon, Surrey, the specification for our 7,000 sq ft residence known as 'Foxbury' has been upgraded. Construction of the property, set in six acres and in an area of outstanding natural beauty, is expected to complete shortly and will be marketed for sale in early 2000. Campmoss Property Company Limited The high-grade 28,750 sq ft office building at Britannia Wharf, Woking and the 26,000 sq ft headquarters office building at The Priory, Burnham, produce a total gross annual rental income of £1.15m. The properties are let to five well- known covenants primarily on long term institutional leases. Rents in these areas have risen over the past few years and there is every prospect of a further increase in income over the next few years. At Gowring House, Bracknell, a revised planning application for a new office building in excess of the existing 25,000 sq ft has been submitted. The property has been let on various short-term leases. At Brickfields, Bracknell, further lettings have been achieved. The development which comprises twelve business units totalling 35,000 sq ft incorporates up to 30% office space. Once fully let, rental income is expected to be in excess of £400,000 per annum. In March and September this year, two commercial properties, both located in Maidenhead, were acquired for a total of £2.30m cash. At York Road, Maidenhead, the existing office building totals 8,000 sq ft and a planning application for a new, more extensive, office scheme has been submitted. At Cordwallis Estate, Maidenhead, subject to planning permission, we intend to replace the existing 25,000 sq ft office and industrial building with high quality offices. The proposed redevelopment cost of these two buildings, which is expected to be in the region of £4m, will be funded from cash balances and existing borrowing facilities. Quoted investments During the year the group disposed of part of its shareholding in Grantchester Holdings PLC, a company specialising in the UK retail warehouse market. We retain our shareholding in HACAS Group PLC which provides out-sourcing and consultancy services to the public and social housing sector. In addition we made a small investment in General Industries plc, a cash shell floated on the AIM market. I remain a director of both HACAS Group and General Industries. Management and staff It is pleasing to see that our small management team has produced such excellent results and I wish to take this opportunity of thanking all members of the group, including our joint venture partners, for their support, dedication and hard work over the year. Post balance sheet events and outlook Completion of building works and the subsequent sale of our residential development at Thames Ditton, Surrey, took place in October this year. Our office development at Brookwood, and residential development at Hambledon, are both close to completion. I hope to be in a position to report further progress with the interim results. I also await the outcome of three separate planning applications for two office schemes at Maidenhead and one at Bracknell. A small increase in interest rates over the next six months should be considered as a positive move. A less volatile marketplace will, in the long run, prove beneficial to investors and homeowners alike. The group currently retains cash balances which, together with unused bank borrowing facilities, will fund the proposed development programme as well as allowing your directors to make acquisitions. The outlook for both the commercial and residential property markets remains firm and I look forward to achieving and reporting further success in the current year. J Richard Wollenberg Chairman THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES Consolidated profit and loss account for the year ended 30 September 1999 1999 1998 £'000 £'000 Turnover Group and share of joint venture 3,413 1,383 undertaking Less: share of joint venture (769) (542) undertaking ------- ------- Group turnover 2,644 841 Cost of sales (1,109) (115) ------- ------- Gross profit 1,535 726 Administrative expenses (507) (404) Other operating income 105 121 ------- ------- Operating profit Group 1,133 443 Share of operating profit in joint venture undertaking 689 387 ------- ------- Total 1,822 830 Profit on sale of investment property (group) 307 14 Profit on sale of other investments (group) 112 288 ------- ------- Profit on ordinary activities before interest 2,241 1,132 Interest receivable and similar income Group 102 106 Share of joint venture 6 4 undertaking Interest payable Group (297) (419) Share of joint venture (363) (325) undertaking ------- ------- Profit on ordinary activities before taxation 1,689 498 Tax on profit on ordinary activities (13) (9) ------- ------- Profit after taxation being profit for the financial year attributable to equity shareholders 1,676 489 Dividends (117) (116) ------- ------- Retained profit for the financial 1,559 373 year ======= ======= The above results relate entirely to continuing activities. There were no acquisitions or disposals of businesses in the year. THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES Consolidated balance sheet at 30 September 1999 1999 1998 £'000 £'000 £'000 £'000 Fixed assets: Tangible assets: Investment properties 6,600 9,665 Other 31 40 --------- ----- 6,631 9,705 Investments: Investment in joint venture undertaking Share of gross 9,274 7,546 assets Share of gross liabilities (5,316) (4,366) -------- ------ 3,958 3,180 Other investments 468 421 -------- ------ 4,426 3,601 --------- ------ 11,057 13,306 Current assets Stock and work in 5,004 3,141 progress Debtors 389 2,560 Cash at bank and in 1,179 3 hand -------- ------ 6,572 5,704 Creditors: amounts falling due within one year (798) (3,341) -------- ------ Net current assets 5,774 2,363 --------- ------ Total assets less current liabilities 16,831 15,669 Creditors: amounts falling due after (3,200) (3,200) more than one year Provisions for liabilities and (75) - charges -------- ------ Net assets 13,556 12,469 ======== ====== Capital and reserves Called up share 587 664 capital Share premium 4,810 4,810 account Investment property revaluation reserve 3,629 3,876 Other reserves 2,046 1,969 Profit and loss 2,484 1,150 account ------- ------ Shareholders' funds - equity 13,556 12,469 ====== ====== THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES Consolidated cash flow statement for the year ended 30 September 1999 1999 1998 £'000 £'000 Cash inflow/(outflow) from operating activities 1,412 (52) Returns on investment and servicing of finance (213) (268) Taxation (17) (21) Capital expenditure and financial investment 3,618 (116) Equity dividends paid (113) (106) Management of liquid resources - 64 ------- ------- Cash inflow/(outflow) before 4,687 (499) financing Financing (2,403) - ------- ------- Increase/(decrease) in cash in the 2,284 (499) year ======== ======== Reconciliation of net cash flow to movement in net debt 1999 1998 £'000 £'000 Increase/(decrease) in cash in the 2,284 (499) year Cash inflow from loan finance 1,300 - Cash outflow from disposal of current - (64) asset investment ------- ------- Changes in net debt resulting from cash flows 3,584 (563) Increase in market value of current asset investment - 14 ------- ------- Movement in net debt in the year 3,584 (549) Net debt at beginning of year (5,772) (5,223) ------- ------- Net debt at end of year (2,188) (5,772) ======== ======== Reconciliation of operating profit to net cash flow from operating 1999 1998 activities £'000 £'000 Operating profit - group 1,134 443 Profit on disposal of current asset investment - (14) Depreciation charges 12 14 Increase in stock and work in (1,863) (1,058) progress Decrease in debtors 2,171 537 (Decrease)/increase in creditors and provisions (42) 26 ------- ------- Net cash inflow/(outflow) from operating activities 1,412 (52) ======== ======== THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES Summary preliminary results for the year ended 30 September 1999 1999 1998 £'000 £'000 Turnover - group 2,644 841 Gross rental income (included in the turnover figure) 648 775 Profit on ordinary activities before taxation 1,689 498 Taxation (13) (9) Profit for the financial year attributable to shareholders 1,676 489 Dividend: Interim 1.25p (1998: 1.10p) per share 33 36 Final 2.85p (1998: 2.40) per share 84 80 Earnings per share- basic 53.3p 14.7p - diluted 53.0p 14.7p Notes I. Basic earnings per share has been calculated using the weighted average number of ordinary shares in issue during the year of 3,143,482 (1998: 3,317,514). Diluted earnings per share has been calculated in accordance with FRS 14. II. The taxation charge represents principally irrecoverable ACT. III. The board recommends that the final dividend be increased to 2.85p (1998: 2.40p) payable on 18 February 2000 to shareholders on the register at 21 January 2000, giving a total increase for the year of 17%. IV. The annual general meeting will be held on 27 January 2000. V. The financial information for the year ended 30 September 1998 has been extracted from the audited financial statements which have been filed with the Registrar of Companies. The auditor's report on these financial statements was unqualified. VI. The financial information for the year ended 30 September 1999 has been extracted from the audited financial statements which will shortly be sent to shareholders and filed with the Registrar of Companies. The auditor's report on these financial statements is unqualified. VII. The financial information contained in this preliminary announcement does not constitute statutory accounts within the meaning of S240 of the Companies Act 1985.

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