Interim Results

Cardiff Property PLC 27 April 2007 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES FOR RELEASE 7.00 AM 27 April 2007 THE CARDIFF PROPERTY PLC (The group, including Campmoss, specialises in property investment and development in the Thames Valley. The portfolio, valued in excess of £34m, is primarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire.) INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2007 Highlights: Six months Six months Year 31 March 31 March 30 September 2007 2006 2006 (Unaudited) (Unaudited) (Audited) Revenue £'000 433 259 2,442 Property sales £'000 - - 1,927 Net assets per share* pence 1,140 1,006 1,123 Profit before tax £'000 464 452 2,549 Earnings per share pence 23.0 20.7 137.6 Interim/final dividend per share pence 3.00 2.75 10.05 Gearing % nil nil nil * Properties not revalued at half year Richard Wollenberg, Chairman, commented: 'The expected increase in rental growth, supported by tenant demand, whilst evident in locations such as Central London, The City and Docklands, has not yet occurred in the Thames Valley M4 corridor although there is widespread optimism in the market place that this will happen towards the end of 2007. Increasing interest rates, together with additional supply is likely to prompt a slow down in the market but the continuing availability of substantial investment funds should underpin current values' For further information: The Cardiff Property plc Richard Wollenberg 01784 437444 Arbuthnot Securities Richard Dunn 020 7012 2000 THE CARDIFF PROPERTY PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2007 CHAIRMAN'S INTERIM STATEMENT Dear shareholder The level of investor demand for income producing commercial property remains buoyant with capital growth being primarily assisted by a fall in yields; however, with the upward trend in interest rates, the pace of growth is likely to slow. Conversely there is little reason to expect a major collapse in either investment or rental values whilst the economy remains strong. The expected increase in rental growth, supported by tenant demand, whilst evident in locations such as Central London, The City and Docklands, has not yet occurred in the Thames Valley M4 corridor although there is widespread optimism in the market place that this will happen towards the end of 2007. Over the past two years, the supply of new high grade office buildings in the Thames Valley has diminished; however it is noticeable that with the completion of certain lettings, a number of developers have been encouraged to commence new speculative office developments. The forecast of higher rentals and an increasing level of tenant enquiries has further encouraged this aspect and the commercial property market will receive a major boost if, as anticipated, some pre-lettings are achieved. Surrey and Berkshire residential market values have, despite recent negative comment, remained firm. Purchasers are, however, taking longer to make positive decisions and continue to be price conscious. In some areas the supply of houses for sale has diminished quite rapidly as sellers are reluctant to pay the increasing costs of moving and are unable to find homes to suit their requirements. The planning process, particularly in the green belts of Surrey and Berkshire, remains an extremely arduous and lengthy process, despite local authorities announcing their intention to increase the number of residential units available. The continuing reduction in supply of new homes and the availability of substantial risk capital for investment purposes has resulted in increasing land values. Dividend -------- Your directors have declared the increased interim dividend of 3p per share (2006: 2.75p) which will be paid on 6 July 2007 to shareholders on the register on 8 June 2007. Financial --------- For the half year ended 31 March 2007, profit before tax amounted to £0.46m (March 2006: £0.45m; September 2006: £2.55m) which included an after tax contribution from Campmoss Property Company Limited, our 47.62% jointly controlled entity, of £0.19m (March 2006: £0.17m; September 2006: £0.96m). Revenue totalled £0.43m (March 2006: £0.26m; September 2006: £2.44m) representing gross rental income of £0.24m (March 2006: £0.26m; September 2006: £0.51m) and sales of development property of £0.19m (March 2006: nil; September 2006: £1.93m). Total gross rental income of Campmoss amounted to £0.94m (March 2006: £0.99m; September 2006: £1.95m). The Campmoss revenue figures are not included in group revenue under IFRS rules. Profit after tax attributable to shareholders for the six months amounted to £0.40m (March 2006: £0.37m; September 2006: £2.43m). Earnings per share were 23.0p (March 2006: 20.7p; September 2006: 137.6p). Total assets of the group at 31 March 2007 were £21.04m (March 2006: £19.19m; September 2006: £20.71m) including the company's share of the net assets of Campmoss of £8.15m (March 2006: £7.16m; September 2006: £7.96m). Net assets as at 31 March 2007, including our share of Campmoss, totalled £19.86m (March 2006: £17.72m; September 2006: £19.56m) equivalent to 1,140p per share (March 2006: 1,006p; September 2006: 1,123p). The group's property portfolio is valued at the end of the financial year and therefore the figures for the half year are based on values as at 30 September 2006. Gearing for Cardiff was nil (March 2006: nil; Sep 2006: nil) and for Campmoss 38% (March 2006: 44%; September 2006: 40%). The investment and development portfolio ---------------------------------------- The group's property portfolio continues to be primarily located in the M4 corridor, namely to the west of London and close to Heathrow Airport. Residential activities are focused within the counties of Surrey and Berkshire. The company's core office, retail and business unit investments are located in Egham, Maidenhead, Windsor and Cardiff. At the Maidenhead Enterprise Centre, three business units have now been let with ongoing discussions taking place for two of the three remaining vacant units. The development, completed last year, includes six business units totalling 14,000 sq ft. At the Windsor Business Centre refurbishment works for one of the units has recently been completed and negotiations with a prospective tenant are currently in hand. At Egham one of our remaining new homes has been sold whilst the other is in the process of being marketed for sale or re-letting. At the White House, Egham, discussions are taking place with one of the shop tenants for a potential surrender of the existing lease and subsequent re-letting to a new occupier. Campmoss Property Company Limited --------------------------------- Campmoss continues to experience a high level of activity. Although two commercial properties developed by the group were sold last year, Campmoss retains freehold high grade office property at Britannia Wharf, Woking, The Priory, Burnham, Clivemont House, Maidenhead and business units at Brickfields, Bracknell. Retail and office properties at Market Street, Bracknell and Tangley Place, Worplesdon, remain the subject of planning applications where detailed discussions continue to take place with the relevant local authority. At Highway House, Maidenhead, planning permission has been granted for a new high grade headquarters office building totalling 45,000 sq ft. Agents have been appointed to seek either a pre-letting or freehold sale of the proposed building. Detailed plans and the development programme are currently being finalised. At Datchet Meadows, Slough, planning permission has been granted for a total of 35 residential units, an increase of 11 units over our previously achieved permission. Development of this prestigious apartment block is expected to commence shortly. At Brickfields, Bracknell, two vacant business units have undergone specific improvement works and are currently being marketed for re-letting. Shareholders dealing facility ----------------------------- The share dealing facility provided by the company's registrar Computershare Investor Services Plc has been extended. Computershare can be contacted on 0870 703 0084. Outlook ------- An improvement in the take up of new office space in the M4 corridor is forecast for the latter part of 2007. This is important to the investment market which remains strong. Increasing interest rates, together with additional supply, is likely to prompt a slow down in the market but the continuing availability of substantial investment funds should underpin current values. No acquisitions of property were completed in the first half of the year. A number of potential development projects were appraised but did not meet your directors' objectives. During the first half of the year the group achieved two important planning permissions which will result in a sizeable office and residential development programme over the next twelve to eighteen months. The successful re-letting of the group's vacant business and office units, as referred to earlier, are important to the group and I look forward to reporting on this and further progress at the end of the financial year. J Richard Wollenberg Chairman 26 April 2007 Consolidated Income Statement FOR THE SIX MONTHS ENDED 31 MARCH 2007 Six months Six months Year 31 March 31 March 30 September 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Revenue 433 259 2,442 Cost of sales (189) (19) (1,467) ______ ______ ______ Gross profit 244 240 975 Administrative expenses (253) (243) (493) Other operating income 120 209 337 ______ ______ ______ Operating profit before gains on investment properties and other investments 111 206 819 Profit on sale of investment property - - 139 Profit on sale of other investments - - 34 Surplus on revaluation of investment properties - - 391 ______ ______ ______ Operating profit 111 206 1,383 Financing: Interest receivable and similar income 161 78 203 Share of results of jointly controlled entity 192 168 963 ______ ______ ______ Profit before taxation 464 452 2,549 Taxation (63) (85) (121) ______ ______ ______ Profit for the period attributable to equity holders 401 367 2,428 ______ ______ ______ Earnings per share on profit for the period - pence Basic 23.0 20.7 137.6 Diluted 22.8 20.6 136.4 ______ ______ ______ Dividends Final 2006 paid 7.3p (2005: 6.5p) 127 115 115 Interim 2006 paid 2.75p - - 48 ______ ______ ______ 127 115 163 ______ ______ ______ Final 2006 proposed 7.3p - - 127 Interim 2007 proposed 3p (2006: 52 48 - 2.75p) ______ ______ ______ 52 48 127 ______ ______ ______ The above results relate entirely to continuing activities. There were no acquisitions or disposals of businesses during the period. Consolidated Balance Sheet AT 31 MARCH 2007 31 March 31 March 30 September 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Non-current assets Investment properties 5,738 5,576 5,730 Investment in jointly controlled entity 8,151 7,164 7,959 Property, plant and equipment 3 3 4 Other financial assets 357 393 357 Deferred tax asset 37 112 37 ______ ______ _______ Total non-current assets 14,286 13,248 14,087 ______ ______ _______ Current assets Stock and work in progress 992 2,701 1,132 Trade and other receivables 1,545 138 1,497 Cash and cash equivalents 4,219 3,101 3,990 ______ ______ _______ Total current assets 6,756 5,940 6,619 ______ ______ _______ Total assets 21,042 19,188 20,706 ______ ______ _______ Current liabilities Corporation tax (384) (192) (316) Trade and other payables (422) (496) (447) ______ ______ ______ Total current liabilities (806) (688) (763) ______ ______ ______ Non-current liabilities Provisions (115) (270) (115) Deferred tax liability (266) (515) (272) ______ ______ ______ Total non-current liabilities (381) (785) (387) ______ ______ ______ Total liabilities (1,187) (1,473) (1,150) ______ ______ ______ Net assets 19,855 17,715 19,556 ______ ______ ______ Capital and reserves Called up share capital 348 352 348 Share premium account 4,946 4,946 4,946 Other reserves 2,299 2,295 2,299 Revaluation reserve 4,892 3,990 4,892 Retained earnings 7,370 6,132 7,071 ______ ______ ______ Shareholders' funds attributable to 19,855 17,715 19,556 equity holders ______ ______ ______ Net assets per share 1,140p 1,006p 1,123p ______ ______ ______ Consolidated Cash Flow Statement FOR THE SIX MONTHS ENDED 31 MARCH 2007 Six months Six months Year 31 March 31 March 30 September 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Cash flows from operating activities Profit for the period 401 367 2,428 Adjustments for: Depreciation, amortisation and impairment 1 1 3 Financial income (161) (78) (203) Share of profit of jointly controlled entity (192) (217) (963) Profit on sale of investment property - - (139) Profit on sale of other investments - - (34) Surplus on revaluation of investment properties - - (391) Equity settled share-based payment expenses 25 25 50 Taxation 63 134 121 Decrease in provisions - - (162) ______ ______ ______ Cash flows from operations before changes in working capital 137 232 710 Decrease in stock 140 - 1,569 (Increase)/decrease in trade and other receivables (34) 74 (1,283) (Decrease) in trade and other payables (27) (170) (212) ______ ______ ______ Cash generated from operations 216 136 784 Tax paid - - (81) ______ ______ ______ Net cash flows from operating activities 216 136 703 ______ ______ ______ Cash flows from investing activities Interest received 148 85 209 Acquisition of property, investments and plant and equipment (9) (223) (238) Proceeds of disposals of property, investments and plant and equipment 1 - 458 ______ ______ ______ Net cash flows from investing activities 140 (138) 429 ______ ______ ______ Cash flows from financing activities Purchase of own shares - (138) (335) Dividends paid (127) (115) (163) ______ ______ ______ Net cash flows from financing activities (127) (253) (498) ______ ______ ______ Net increase/(decrease) in cash and cash equivalents 229 (255) 634 Cash and cash equivalents at beginning of period 3,990 3,356 3,356 ______ ______ ______ Cash and cash equivalents at end of period 4,219 3,101 3,990 ______ ______ ______ Other Primary Statements FOR THE SIX MONTHS ENDED 31 MARCH 2007 Consolidated statement of changes in equity Six months Six months Year 31 March 31 March 30 September 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Opening shareholders' funds 19,556 17,576 17,576 Own shares purchased - (138) (335) Fair value of share options granted 25 25 50 Profit for the period 401 367 2,428 Dividends (127) (115) (163) ______ ______ ______ Closing shareholders' funds 19,855 17,715 19,556 ______ ______ ______ Notes to the Financial Statements FOR THE SIX MONTHS ENDED 31 MARCH 2007 1. International Financial Reporting Standards The consolidated results for the six months ended 31 March 2007 have been prepared using applicable International Financial Reporting Standards adopted by the European Union ('IFRS'), which includes International Accounting Standards ('IAS') and interpretations issued by the International Accounting Standards Board ('IASB') and its committees, which are expected to be endorsed by the European Union. The unaudited interim financial information has been prepared in accordance with the Listing Rules of the Financial Services Authority. The results, which were approved by the board on 26 April 2007, are prepared by the group on the same basis as for the year ended 30 September 2006, are unaudited and do not comprise statutory accounts within the meaning of section 240 of the Companies Act 1985. The comparative figures for the financial year ended 30 September 2006 are extracted from the statutory financial statements for that year which have been filed with the Registrar of Companies and on which the auditor gave an unqualified report, without any statement under section 237 (2) or (3) of the Companies Act 1985. 2. Accounting policies Basis of preparation -------------------- The following principal accounting policies have been applied consistently in dealing with items which are considered material in relation to the group's financial statements. The financial statements have been prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: financial instruments classified as available for sale; and investment properties. These accounting policies have been applied consistently across the group for the purposes of these consolidated financial statements. Basis of consolidation ---------------------- The group's financial statements include the financial statements of the company and its subsidiaries and jointly controlled entity made up to 31 March 2007. Subsidiary companies are those entities under the control of the company, where control means the power to govern the financial and operating policies of the entity so as to obtain benefit from its activities. The results of subsidiary undertakings acquired or disposed of in the year are included in the consolidated income statement from the date control is obtained or up to the date when control is lost. Intra-group transactions are eliminated on consolidation. A jointly controlled entity is one in which the group has a long term interest and over which it exercises joint control. The group's investment in the jointly controlled entity is accounted for using the equity method, hence the group's share of the gains and losses of the jointly controlled entity is included in the consolidated income statement and its interest in the net assets is included in investments in the consolidated balance sheet. Goodwill -------- Goodwill represents amounts arising on acquisition of subsidiaries and jointly controlled entities. Goodwill represents the difference between the cost of the acquisition and the fair value of the assets, liabilities and contingent liabilities acquired. Identifiable assets include intangible assets which can be sold separately or which arise from legal rights regardless of whether those rights are separable. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is tested annually at the balance sheet date for impairment. In respect of associates and jointly controlled entities, the carrying amount of goodwill is included in the carrying amount of the investment in that associate or jointly controlled entity. Impairment The annual impairment review involves comparing the carrying amount to the estimated recoverable amount (by allocating the goodwill to cash-generating units) and recognising an impairment loss, if the recoverable amount is lower. Impairment losses are recognised through the income statement. Investment properties --------------------- Investment properties are properties which are held either to earn rental income or for capital appreciation or both. Investment properties are stated at fair values which are based on market values. Design, construction and management expenses together with interest incurred in respect of investment properties in the course of development are capitalised until the building is effectively completed and available for letting along with the costs directly attributable to the initial letting of newly developed properties. Thereafter they are charged to the income statement. Whilst under development such properties are classified as assets in the course of construction and any accumulated revaluation surpluses or deficits are recognised in the income statement. These properties are revalued at the year end and surpluses or deficits recognised in the income statement. 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 portfolio each year. The directors of the jointly controlled entity value its portfolio each year; such valuation takes into account yields on similar properties in the area, vacant space and covenant strength. Property, plant and equipment and depreciation ---------------------------------------------- Property and plant and equipment are stated at cost less accumulated depreciation and impairment losses. Provision is made for depreciation on property, plant and equipment so as to write off their cost less the estimated residual value on a straight line basis over their expected useful lives as follows: • motor vehicles - 4 years; and • fixtures, fittings and equipment - 4 years. Impairment ---------- The carrying amounts of the group's assets, other than investment properties measured at fair value, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated and an impairment loss recognised where the recoverable amount is less than the carrying value of the asset. Stocks and work in progress --------------------------- Stocks, being properties under development intended for resale, are stated at the lower of cost, including attributable overheads, and net realisable value. Revenue ------- Revenue consists of rental income, earned under operating leases granted, from properties held for investment purposes, together with the proceeds from the sale of development properties. Rental income is recognised in the income statement on a straight-line basis over the total lease period. Payments due on early terminations of lease agreements are recognised in the income statement within revenue. Proceeds from the sale of investment properties are not included in revenue, but in profit on sale of investment property. The profit or loss on disposal is calculated with reference to the carrying amount in the balance sheet. Purchases and sales of investment properties are accounted for when exchanged contracts become unconditional. Financial assets ---------------- Investments in equity securities are classified as assets available for sale and are stated at fair value with any resultant gain or loss being recognised directly in equity except for any impairment loss. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the income statement. Trade and other receivables --------------------------- Trade and other receivables are stated at their historic cost (discounted if material) less impairment. Cash and cash equivalents ------------------------- Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the group's cash management, are included as a component of cash and cash equivalents for the purpose only of the statement of cash flows. Share based payments -------------------- The share option programme allows group employees to acquire shares of the parent company; these awards are granted by the parent. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at the date of grant and spread over the period during which the employees become unconditionally entitled to the options using an option valuation model, taking into account the terms and conditions upon which options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is due only to share prices not achieving the threshold for vesting. Dividends --------- Dividends are recognised as a liability in the period in which they are approved. Provisions ---------- 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. Taxation -------- Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date and any adjustment to tax payable in respect of previous years. Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Adopted IFRS not yet applied ---------------------------- There are a number of new Standards, Amendments to Standards and Interpretations which are mandatory for the year ending 30 September 2007. In most cases, these new requirements are not relevant to the group. This is the case for the Amendments to IAS 39, IAS 21 and IFRS 4, to the new Standard IFRS 6 and to the new Interpretations IFRIC 5 and IFRIC 6. In accordance with IFRIC 4 'Determining whether an arrangement contains a lease', the group has reviewed its arrangements to ascertain whether any of them effectively contain a lease resulting in the group being a lessor or lessee. No changes to the accounting treatments of the group's arrangements have been necessary. The following new Standards and Interpretations have been issued but are not effective for the year ended 30 September 2007 and have not been adopted early: • IFRS 7 - financial instruments: disclosure (applicable for years commencing on or after 1 January 2007); and • IFRIC 7, IFRIC 8, IFRIC 9 and IFRIC 10. 3. Analysis of revenue and profit before tax Six months Six months Year 31 March 31 March 30 September 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Revenue (wholly in the United Kingdom) Property and other investments being gross rents receivable 237 259 515 Property development being sale of development properties 196 - 1,927 ______ ______ ______ 433 259 2,442 ______ ______ ______ Profit before taxation Property and other investment 413 353 1,886 Property development 51 99 663 ______ ______ ______ 464 452 2,549 ______ ______ ______ 4. Taxation The tax position for the six months is estimated on the basis of the anticipated tax rates applying for the full year. 5. Dividends The interim dividend of 3p per share will be paid on 6 July 2007 to shareholders on the register on 8 June 2007. Under accounting standards this dividend is not included in the consolidated financial statements for the six months ended 31 March 2007. 6. Earnings per share Earnings per share has been calculated using the profit after tax for the period of £401,000 (six months to 31 March 2006: £367,000; year to 30 September 2006: £2,428,000) and the weighted average number of shares as follows: Weighted average number of shares 31 March 31 March 30 September 2007 2006 2006 Basic 1,741,080 1,773,234 1,763,962 Adjustment to basic for bonus element of shares to be issued on exercise of options 18,114 7,920 16,046 _________ _________ _________ Diluted 1,759,194 1,781,154 1,780,008 _________ _________ _________ Copies of the Interim Report will be posted to shareholders shortly, and will be available at: www.cardiff-property.com Directors and Advisers Directors Auditor J Richard Wollenberg, KPMG Audit Plc Chairman and chief executive David A Whitaker FCA Finance director Stockbrokers and financial advisers Nigel D Jamieson BSc, MRICS, FSI, Arbuthnot Securities Limited Independent non-executive director Secretary Bankers David A Whitaker FCA HSBC Bank plc Non-executive director of wholly owned Solicitors subsidiary First Choice Estates plc Charles Russell Derek M Joseph BCom, FCIS, MSII Morgan Cole Head office Registrar and transfer office 56 Station Road Computershare Investor Services PLC Egham PO Box 82 Surrey TW20 9LF The Pavilions Telephone: 01784 437444 Bridgwater Road Fax: 01784 439157 Bristol BS99 7NH E-mail: webmaster@cardiff-property.com Telephone: 0870 702 0001 Web: www.cardiff-property.com Dealing line: 0870 703 0084 Registered office Registered number Marlborough House 22705 Fitzalan Court Fitzalan Road Cardiff CF24 0TE Financial Calendar 2007 27 April Interim results for 2007 announced 6 June Ex dividend date for interim dividend 8 June Record date for interim dividend 6 July Interim dividend to be paid 30 September End of accounting year December Final results for 2007 announced 2008 January Annual general meeting February Final dividend to be paid This information is provided by RNS The company news service from the London Stock Exchange

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