Half-year Report

RNS Number : 4187N
Cardiff Property PLC
09 May 2018
 

 

THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY

AND ITS SUBSIDIARIES

 

FOR RELEASE                                    7.00 AM                                 9 May 2018

 

                                         THE CARDIFF PROPERTY PLC

The group, including Campmoss, specialises in property investment and development in the Thames Valley. The total portfolio under management, valued in excess of £25m, is primarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire.

 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 MARCH 2018

 

Highlights:

 

 

Six months

31 March

2018

(Unaudited)

Six months

31 March

2017

(Unaudited)

Year

30 September

2017

(Audited)

 

Revenue

£'000

336

284

552

 

Net assets per share

£

21.67

19.07

21.26

 

Profit before tax

£'000

715

561

3,359

 

Earnings per share (basic and diluted)

pence

52.4

39.2

253.7

 

Interim/total dividend

   per share

 

pence


4.4


4.00

 

15.5

 

Gearing

%

Nil

Nil

Nil

 

 

Richard Wollenberg, Chairman, commented:

 

The Thames Valley commercial property market continues to experience a good level of tenant demand although it is noticeable that a more cautious attitude is currently being taken leading to requests for shorter leases or break clauses. Office and industrial rental levels remain firm and it is particularly encouraging to report that in certain Thames Valley locations further growth is being predicted.

 

Concerns regarding Brexit, the UK economy and increases in interest rates are still apparent, yet the commercial property investment market remains active as investors seek to obtain higher rates of return than those available in other markets.

 

For further information:

The Cardiff Property plc

Richard Wollenberg

  01784 437444

Stockdale Securities

       Richard Johnson

020 7601 6100

 

LEI: 213800GE3FA4C52CIN05

 

 
       

 

 

THE CARDIFF PROPERTY PLC

 

 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 MARCH 2018

 

 

 

INTERIM MANAGEMENT REPORT

 

The Thames Valley commercial property market continues to experience a good level of tenant demand, although it is noticeable that a more cautious attitude is currently being taken leading to requests for shorter leases or break clauses. Office and industrial rental levels remain firm and it is particularly encouraging to report that in certain Thames Valley locations further growth is being predicted.

 

Concerns regarding Brexit, the UK economy and increases in interest rates are still apparent, yet the commercial property investment market remains active as investors seek to obtain higher rates of return than those available in other markets.

 

As anticipated last year the slow down in activity in the residential market has resulted in lower values, particularly at the high end of the market. At the lower range the majority of properties have retained their value and it is noticeable that first time buyers are benefitting from the government's various Help to Buy schemes. This is particularly evident at our joint venture residential developments in Bracknell.

 

 

Financial

For the six months ending 31 March 2018 profit before tax amounted to £0.72m (March 2017: £0.56m; September 2017: £3.36m). This figure includes an after-tax profit from Campmoss Property Company Limited, our 47.62% joint venture, of £0.36m (March 2017: £0.27m; September 2017: £1.84m).  

 

Revenue for the six months to 31 March 2018, represented by rental income, totalled £0.34m (March 2017: £0.28m; September 2017: £0.55m). The group's share of revenue from Campmoss was £0.80m (March 2017: £0.53m; September 2017: £1.22m), represented by rental income of £0.59m (March 2017: £0.53m; September 2017: £0.98m) and property sales of £0.21m (March 2017: £nil; September 2017: £0.24m). Rental income and sales figures for Campmoss are not included in group revenue.

 

The comparable figures in brackets relate to the periods six months ending 31 March 2017 and the year end 30 September 2017.

 

Net assets of the group as at 31 March 2018 were £27.26m (March 2017: £24.23m; September 2017: £26.86m), equivalent to £21.67 per share (March 2017: £19.07; September 2017: £21.26). The company's share of net assets of Campmoss, included on the group balance sheet, amounted to £15.22m (March 2017: £13.29m; September 2017: £14.86m).

 

Your directors are of the opinion that, other than as mentioned in this report, there is no material change in the value of the group's property portfolio as at 31 March 2018.

 

During the six months to 31 March 2018 the company purchased 5,809 of its own shares (March 2017: nil; September 2017: 7,128 shares). There have been no material events or material changes in assets, liabilities or related party relationships since 30 September 2017.

 

Current IFRS accounting recommends that deferred tax is chargeable on the difference between the indexed cost of properties and quoted investments and their current market value. However, current IFRS accounting does not require the same treatment in respect of the Group's unquoted investment in Campmoss Property, our 47.62% owned joint venture. The investment in Campmoss is a substantial part of the company's net assets and for indicative purposes a disposal of this investment based on the value in the company's balance sheet at the 31 March 2018 could generate a tax liability of £2.59m (March 2017: £2.26m, September 2017: £2.53m), equivalent to 206p per share (March 2017: 178p, September 2017: 200p). This information is provided to shareholders as an additional, non-statutory disclosure.

 

Dividend

Your directors have declared an interim dividend of 4.4p (interim March 2017: 4p; final September 2017: 11.5p), an increase of 10% which will be paid on 5 July 2018 to shareholders on the register at 1 June 2018.

 

Investment and Development Portfolio

The group's freehold property portfolio, including those held by Campmoss, continues to be concentrated in the Thames Valley to the west of London and close to Heathrow Airport.

The office and retail investment at The White House, Egham, comprising five ground floor retail units with offices above, is fully occupied. The majority are let on medium term leases, some of which include annual rental increases. One of the upper floor office suites is anticipated to be vacated at the end of the year and discussions with prospective tenants are ongoing.

 

The Maidenhead Enterprise Centre, Maidenhead, offers six business units totalling 14,000 sq. ft. is fully let and negotiations with one of the tenants for a lease renewal is in progress.

 

The Windsor Business Centre, Windsor, comprises four business units totalling 9,500 sq. ft., all of which are let.  Planning permission was recently granted to increase the useable office area within one of the units and a further application to achieve additional space at the other three units is being prepared.

 

Cowbridge Road, Cardiff, comprises a 14,650 sq. ft. commercial property on two floors and is let to Royal Mail for use as a mail sorting office. The lease expires in June 2019 and discussions with the Royal Mail to extend their lease are in progress. Plans to increase the useable floor space are under negotiations with the local authority.

 

Heritage Court, Egham, comprises four retail units with eight residential apartments on the upper three floors. The apartments were previously sold on long leaseholds. The retails units are fully let with one of the units recently re-let on a medium-term lease achieving an increase in rental.

 

The company occupies its own freehold office in Egham and retains as an investment a freehold residential property in Egham. Following the grant of planning permission, works to extend and upgrade the residential property are expected to complete in July this year.

 

At Tilehurst, Reading, our outline residential planning application was refused and further discussions are taking place with the local planning authority.

 

Campmoss Property Company Limited and subsidiaries

Campmoss continues with its extensive programme of planning, re-development, sales and letting. Currently the main development and sales activity is in Bracknell, Berkshire. Bracknell has benefitted from the recent opening of the Lexicon Shopping Centre and the improvement of rail connections to Waterloo.

 

At Alston House, Market Street, Bracknell, the construction of ten new retail units on the ground and first floor and 12 residential units on the second and third floors is well advanced. This development is expected to complete by summer 2018 and the majority of retail units are under offer.

 

At Westview, adjacent to Alston House, the development of eight retail units on ground and first floors was completed last year and are all let on either medium or long term leases.

 

Gowring House, Market Street, Bracknell, previously an office building on ground and five upper floors was converted to provide three retail units on the ground floor and 30 residential apartments on the upper floors. The retail units are all let on medium term leases and sales of 22 apartments have completed, five of which took place in the first half of this year. The remaining eight residential units include a show apartment and three apartments let on yearly lease agreements. Two units for sale are currently under offer.

 

Following the sale of Worplesdon View, Worplesdon, Campmoss continue to own an adjacent 2.5-acre site which, subject to planning, may be available for alternative uses.

 

At Britannia Wharf, Woking, planning permission was granted in July 2017 for an 82-bedroom care home and discussions with prospective management companies are taking place. An alternative residential scheme remains under detailed discussion with the local authority.

 

At Clivemont House and Highway House, Maidenhead, planning permissions were previously granted for separate office schemes together totalling over 90,000 sq. ft.  In view of the uncertain local office market, commencement of these developments will only proceed when a significant pre-letting is achieved. A planning application for a residential scheme at Clivemont House has been submitted.

 

At The Priory, Burnham, the 26,000 sq. ft. building consists of new office premises on three floors totalling 17,000 sq. ft. and an adjoining Grade II Listed office building of 9,000 sq. ft. which is used as a Business Centre. Following negotiations, two existing tenants have reorganised their space requirements and part of the office space in the new building and Business Centre is currently being marketed. Plans over the next few years include submitting a planning application for re-development of the site.

 

 

Relationship Agreement

The company has entered into a written and legally binding relationship agreement with myself, its controlling shareholder, to address the requirements of LR9.2.2AR of the Listing Rules.

 

Outlook

 

The economy and the property market have performed significantly better than predicted at the time of the Brexit vote and the General Election. Interest rates remain low and projected increases are limited. If the economy remains resilient the property market should perform likewise.

 

The group should benefit from the completion of its current development programme and I therefore look forward to reporting further at the year end.

 

 

J Richard Wollenberg

Chairman

8 May 2018

 

 

   

 

 

 

Condensed Consolidated Interim Income Statement

FOR THE SIX MONTHS ENDED 31 MARCH 2018

 

 

 

 

 

 

Six months

31 March

2018
(Unaudited)

£'000

Six months

31 March

2017
(Unaudited)

£'000

Year

30 September

2017

(Audited)

£'000

Revenue

336

284

552

Cost of sales

(25)

(9)

(57)

 

______

______

______

Gross profit

311

275

495

Administrative expenses

(295)

(272)

(511)

Other operating income

314

261

577

 

______

______

______

Operating profit before gains on investment properties and other investments


330


264

 

561

Surplus on revaluation of investment properties

-

-

905

 

______

______

______

Operating profit

330

264

1,466

Financial income

25

27

54

Share of results of joint venture

360

269

1,839

 

______

______

______

Profit before taxation

715

561

3,359

Taxation

(53)

(62)

(141)

 

______

______

______

Profit for the period attributable to equity holders

662

498

3,218

 

______

______

______

 

 

 

 

Earnings per share on profit for the period - pence

 

 

 

Basic and diluted

52.4

39.2

253.7

 

______

______

______

 

 

 

 

Dividends

 

 

 

Final 2017 paid 11.5p (2016: 10.4p)

145

132

132

Interim 2017 paid 4.0p

-

-

51

 

______

______

______

 

145

132

183

 

______

______

______

Final 2017 paid 11.5p

-

-

145

Interim 2018 proposed 4.4p (2017: 4.0p)

55

51

-

 

______

______

______

 

55

51

145

 

______

______

______

 

These results relate entirely to continuing operations. There were no acquisitions or disposals during these periods.

 

 

 

 

Condensed Consolidated Interim Statement of Comprehensive Income and Expense

FOR THE SIX MONTHS ENDED 31 MARCH 2018

 

 

 

Condensed Consolidated Interim Balance Sheet

AT 31 MARCH 2018

 

 

 

 

31 March

2018

(Unaudited)
£'000

31 March

2017
(Unaudited)
£'000

30 September

2017

(Audited)

£'000

Non-current assets

 

 

 

Freehold investment properties

5,863

4,880

5,792

Property, plant and equipment

301

275

303

Investment in joint venture

15,224

13,294

14,864

Other financial assets

1,058

969

1,071

Deferred tax asset

-

2

5

 

______

______

______

Total non-current assets

22,446

19,420

22,035

 

______

______

______

Current assets

 

 

 

Stock and work in progress

668

668

668

Trade and other receivables

150

405

91

Financial assets

1,851

1,070

1,370

Cash and cash equivalents

2,991

3,405

3,485

 

______

______

______

Total current assets

5,660

5,548

5,614

 

______

______

______

Total assets

28,106

24,968

27,649

 

______

______

______

Current liabilities

 

 

 

Trade and other payables

(701)

(599)

(629)

 

______

______

______

Total current liabilities

(701)

(599)

(629)

 

______

______

______

Non-current liabilities

 

 

 

Deferred tax liability

(143)

(137)

(160)

 

______

______

______

Total non-current liabilities

(143)

(137)

(160)

 

______

______

______

Total liabilities

(844)

(736)

(789)

 

______

______

______

Net assets

27,262

24,232

26,860

 

______

______

______

 

 

 

 

Equity

 

 

 

Called up share capital

252

254

253

Share premium account

5,076

5,076

5,076

Other reserves

2,760

2,696

2,772

Investment property revaluation reserve

997

2,935

997

Retained earnings

18,177

13,271

17,762

 

______

______

______

Shareholders' funds attributable to equity holders

27,262

24,232

26,860

 

______

______

______

 

 

 

 

Net assets per share

£21.67

£19.07

£21.26

 

______

______

______

 

 

Condensed Consolidated Interim Statement of Cash Flows

FOR THE SIX MONTHS ENDED 31 MARCH 2018

 

 

 

 

 

Six months

31 March

2018
(Unaudited)
£'000

Six months

31 March

2017
(Unaudited)

£'000

Year

30 September

2017
(Audited)

£'000

 

 

 

 

Cash flows from operating activities

 

 

 

Profit for the period

662

498

3,218

Adjustments for:

 

 

 

Depreciation

3

3

5

Financial income

(25)

(27)

(54)

Share of profit of joint venture

(360)

(269)

(1,839)

Surplus on revaluation of investment properties

-

-

(905)

Taxation

53

62

141

 

______

______

______

Cash flows from operations before changes in

working capital


333


267

 

566

(Increase)/decrease in trade and other receivables

(57)

(61)

1

Increase/(decrease) in trade and other payables

6

(21)

57

 

______

______

______

Cash generated from operations

282

185

624

Tax paid

-

(1)

(107)

 

______

______

______

Net cash flows from operating activities

282

184

517

 

______

______

______

 

 

 

 

Cash flows from investing activities

 

 

 

Interest received

23

28

56

Acquisition of investments, and property, plant and equipment


(71)


(100)

 

(164)

(Increase)/decrease in cash deposits with a maturity of > 90 days

(481)

(23)

(323)

 

______

______

______

Net cash flows from investing activities

(529)

(95)

(431)

 

______

______

______

 

 

 

 

Cash flows from financing activities

 

 

 

Purchase of own shares

(102)

-

(116)

Dividends paid

(145)

(132)

(183)

Loan repaid by Joint Venture

-

1,250

1,500

 

______

______

______

Net cash flows from financing activities

(247)

1,118

1,201

 

______

______

______

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

(494)

1,207

1,287

Cash and cash equivalents at beginning of period

3,485

2,198

2,198

 

______

______

______

Cash and cash equivalents at end of period

2,991

3,405

3,485

 

______

______

______
         

 

 

 

Condensed Consolidated Interim Statement of Changes in Equity
FOR THE SIX MONTHS ENDED 31 MARCH 2018 

 

 

 

 

 

Statement of Responsibility

FOR THE SIX MONTHS ENDED 31 MARCH 2018

 

The directors are responsible for preparing the condensed consolidated interim financial statements for the six months ended 31 March 2018 and they confirm, to the best of their knowledge and belief, that:

 

·      the condensed consolidated set of interim financial statements for the six months ended 31 March 2018 has been prepared in accordance with IAS 34 - Interim Financial Reporting, as adopted by the EU;

·      the interim management report includes a fair review of the information required by:

a)     DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of interim financial statements and a description of the principal risks and uncertainties for the remaining six months of the year; and

b)    DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the group during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

 

J Richard Wollenberg, Chairman

 

Karen L Chandler, Finance director

 

Nigel D Jamieson, Independent non-executive director

 

8 May 2018

 

 

 

Notes to the Condensed Consolidated Interim Financial Statements

FOR THE SIX MONTHS ENDED 31 MARCH 2018

 

1. Basis of preparation

This condensed set of financial statements has been prepared in accordance with IAS 34 - Interim Financial Reporting as adopted by the EU.

 

The annual financial statements of the group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, the condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the group's published consolidated financial statements for the year ended 30 September 2017.

 

The comparative figures for the financial year ended 30 September 2017 are not the group's statutory accounts for that financial year. Those accounts have been reported on by the group's auditor and delivered to the registrar of companies. The report of the auditor was: unqualified; did not give any reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report; and did not contain a statement under sections 498 (2) or (3) of the Companies Act 2006.

 

Accounting policies

The condensed consolidated interim financial statements have been prepared applying the accounting policies that were applied in the preparation of the group's published financial statements for the year ended 30 September 2017.

 

There are no IFRSs and Interpretations which have been endorsed in the period to 31 March 2018, which have had a material impact on these interim financial statements.

 

Use of estimates and judgement

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

 

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The key areas in which estimates have been used and the assumptions applied are in valuing investment properties and properties in the joint venture, in valuing available for sale assets, in classifying properties and in the calculating of provisions.

 

An external, independent valuer, having an appropriate recognised professional qualification and recent experience in the location and category of property being valued, values the company's property portfolio at the end of each financial year. The directors of the joint venture value its portfolio each year; such valuation takes into account yields on similar properties in the area, vacant space and covenant strength. The directors of the group and joint venture review the valuations for the interim financial statements.

 

A provision is recognised in the balance sheet when the group has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefit will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

 

Going concern

The group has sufficient financial resources to enable it to continue in operational existence for the foreseeable future, to complete the current maintenance and development programme and meet its liabilities as they fall due. Accordingly, the directors consider it appropriate to continue to adopt the going concern basis in preparing these interim financial statements.

 

 

Notes to the Condensed Consolidated Interim Financial Statements

FOR THE SIX MONTHS ENDED 31 MARCH 2018 (continued)

 

2. Segmental analysis

The group manages its operations in two segments, being property and other investments and property development. The results of these segments are regularly reviewed by the board as a basis for the allocation of resources, in conjunction with individual site investment appraisals and to assess their performance. Information regarding the revenue and profit before taxation for each reportable segment is set out below:

 

 

 

 

 

 

Six months

31 March

2018

(Unaudited)
£'000

Six months

31 March

2017
(Unaudited)

£'000

Year

30 September

2017
(Audited)

£'000

 

 

 

 

Revenue (wholly in the United Kingdom)

 

 

 

Property and other investments being gross rents

Receivable

 

336

 

284

 

552

 

______

______

______

 

 

 

 

 

 

 

 

Profit before taxation

 

 

 

Property and other investments

595

472

3,211

Property development

120

89

148

 

______

______

______

 

715

561

3,359

 

______

______

______

 

 

 

 

The operations of the group are not seasonal.

 

3. Taxation

The tax position for the six-month period is estimated on the basis of the anticipated tax rates applying for the full year.

 

4. Dividends

The interim dividend of 4.4p per share will be paid on 5 July 2018 to shareholders on the register on 1 June 2018. Under accounting standards this dividend is not included in the condensed consolidated interim financial statements for the six months ended 31 March 2018.

 

5. Earnings per share

Earnings per share has been calculated using the profit after tax for the period of £662,000 (March 2017: £498,000; September 2017: £3,218,000) and the weighted average number of shares as follows:

 

 

Weighted average number of shares

 

 

 

31 March

2018

31 March

2017

30 September

2017

 

 

 

 

Basic and diluted

1,261,654

1,270,709

1,278,420

 

_________

_________

_________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Directors and Advisers

 

 

Directors

Auditor

J Richard Wollenberg

KPMG LLP

Chairman and chief executive

 

 

Karen L Chandler FCA

 

Finance director

Stockbrokers and financial advisers

 

Nigel D Jamieson BSc, FCSI

Stockdale Securities Limited

Independent non-executive director

 

 

 

 

 

Secretary

Bankers

Karen L Chandler FCA

HSBC Bank plc

 

 

 

 

Non-executive director of wholly owned subsidiary

Solicitors
First Choice Estates plc

Blake Morgan LLP

Derek M Joseph BCom, FCIS

 

 

 

 

 

Head office

Registrar and transfer office

56 Station Road

Neville Registrars Limited

Egham, TW20 9LF

Neville House

Telephone: 01784 437444

18 Laurel Lane

Fax: 01784 439157

Halesowen

E-mail: webmaster@cardiff-property.com

B63 3DA

Web: www.cardiff-property.com

Telephone: 0121 585 1131

 

 

 

 

Registered office

Registered number

56 Station Road

00022705

Egham, TW20 9LF

 

 

 

 

 

 

 

 

Financial Calendar

 

 

2018

9 May

Interim results for 2018 announced

 

31 May

Ex-dividend date for interim dividend

 

1 June

Record date for interim dividend

 

5 July

Interim dividend to be paid

 

30 September

End of accounting year

 

December

Final results for 2018 announced

2019

January

Annual General Meeting

 

February

Final dividend to be paid

 


This information is provided by RNS
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