Interim Results
Cardiff Property PLC
04 May 2005
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
FOR RELEASE 7.00 AM 4 MAY 2005
THE CARDIFF PROPERTY PLC
(The group, including Campmoss, specialises in property investment and
development in the Thames Valley. The portfolio, valued in excess of £40m, 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 2005
Highlights:
Six months Six months Year
31 March 31 March 30 September
2005 2004 2004
(Unaudited) (Unaudited) (Audited)
Group turnover* £'000 2,005 1,621 2,679
Property sales £'000 1,113 nil nil
Net assets per share** pence 928 807 895
Profit before tax £'000 1,160 943 1,758
Earnings per share pence 53.4 38.2 80.2
Interim/final dividend pence 2.5 2.2 8.0
per share
Gearing % nil nil nil
* Includes the group's share of Campmoss
** Properties not revalued at half-year
Richard Wollenberg, Chairman, commented:
'New office lettings reported in the Thames Valley indicate a small increase in
headline rental levels but the volume remains low. Compared to this inactivity,
the level of investment interest in the commercial property market has
intensified. With interest rates at current low levels and a relatively stable
economy, I would expect investment values to remain strong. However, any
immediate improvement in rental levels will be limited.'
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 2005
CHAIRMAN'S INTERIM STATEMENT
New office lettings in the Thames Valley remain at a low level and although
numerous enquiries from both large and small companies are currently in the
market place, firms still seem reluctant to commit themselves. Whilst new
lettings reported indicate a small increase in headline rental levels,
incentives such as rent free periods and contribution to fitting out costs are
still being negotiated albeit at a reduced level.
Compared to this inactivity, the level of investment interest in the commercial
property market has intensified as pension funds and private trusts compete to
invest their funds. This is primarily relevant to new high grade commercial
property let on medium to long term leases where yields available compare
favourably with other investment products. As a result, capital values have
increased and, as indicated later in this report, we have taken advantage of
this.
In addition to the competition between investment funds it is noticeable that
owner occupiers are taking advantage of current low interest rates, preferring
to acquire a freehold rather than paying rental. Reflecting this trend, an
acceptable offer was received for our vacant unit at The Windsor Business Centre
and a freehold sale completed in January 2005. We still retain the adjoining
five business units which are all let on medium term leases.
The residential market has generated some transactions but purchasers are taking
much longer to make positive decisions and becoming more price conscious.
Selling prices have seen a further decline of approximately 5% over the past 6
months. This inactivity and reduction in sale prices will inevitably have an
effect on land values although I am of the view that this has not as yet been
fully reflected in the market place.
As indicated later on in this report, Campmoss Property Company Limited, our
47.62% owned joint venture undertaking, also took advantage of the strong
investment market and, following an attractive offer, completed the sale of a
freehold property in March 2005.
Taking into account the above activity, profit on ordinary activities before tax
for the half year to 31 March 2005, amounted to £1.160m (2004: £0.943m) which
included a contribution from Campmoss of £0.473m (2004: £0.583m). Group turnover
totalled £2.005m (2004: £1.621m) representing gross rental income of £0.892m
(2004: £1.621m) and sales of commercial properties totalling £1.113m (2004:
nil). The comparative gross rental figure included proceeds received by Campmoss
following the surrender of a lease. Earnings per share was 53.4p (2004: 38.2p).
Dividend
The directors have declared an increased interim dividend of 2.5p per share
(2004: 2.2p) which will be paid on 8 July 2005 to shareholders on the register
on 10 June 2005.
Financial
Net assets at 31 March 2005, including our share of Campmoss, totalled £16.547m
(2004: £16.430m) equivalent to 928p per share (March 2004: 807p - September
2004: 895p). The property portfolio is valued annually and therefore the figures
for the half year are based on values as at 30 September 2004. Following the
sales and purchase referred to in this report cash balances increased and have
been placed on short term deposit. Bank borrowing facilities remain available to
allow further acquisitions.
The investment and development portfolio
The commercial investment portfolio includes a range of retail, industrial and
office buildings located in Egham, Windsor and Cardiff. These properties are let
to well known public and private companies on medium to long term institutional
leases.
One of the four new residential houses in Egham has been sold and one let. At
Ashleigh House, Englefield Green, Surrey, although interest has been received,
no acceptable offer has been forthcoming and the property remains available for
sale. Houses in Windsor and Egham have been retained and let on yearly
agreements.
In February, the freehold of a vacant 15,000 sq ft industrial and office
building in Maidenhead was acquired for just under £0.8m. The intention, subject
to obtaining appropriate planning permission, is to carry out a total
refurbishment and divide the finished building into individual business units of
between 2,000 and 5,000 sq ft. The units will offer ground floor industrial use
and first floor office use. On completion, these units will be placed on the
market for either letting or sale. Appropriate plans have been submitted to the
Local Authority and, in the meantime, part of the refurbishment works have
commenced.
Campmoss Property Company Limited
Campmoss has again experienced an active six months period. Against a background
of low tenant demand, a letting of our new 10,000 sq ft office building at York
Road, Maidenhead was successfully achieved in February and following the receipt
of an offer for the freehold at substantially above book value, a sale to a
leading institution was completed in March 2005.
Campmoss continues to retain freehold properties at Maidenhead, Woking, Burnham
and Bracknell. Gross annual rental income generated from the portfolio is now in
excess of £2.70m.
In October 2004, a vacant 10,000 sq ft office building known as Jubilee House,
located on the outskirts of Datchet, Berkshire, close to the M4 motorway, was
acquired with a view to changing the use of the property to residential. I am
pleased to report that planning permission has been granted for 24 residential
units and further discussions with adjacent property owners and the planning
department are currently in hand.
The obtaining of planning permission remains a prolonged and time consuming
process. Revised plans have again been submitted to the relevant local
authorities for our residential and commercial schemes in Bracknell Town Centre
and Worplesdon, Guildford. We await the outcome of our presentations. Part of
the property in Bracknell has been let on a short term basis.
At Highway House, Maidenhead, despite a number of viewings by prospective
tenants, three of the recently refurbished floors remain available for letting.
Share dealing facility
The low commission 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
As new office letting activity remains subdued developers are inevitably
reluctant to commence new office projects. Leading commercial property agents
are, however, predicting a marked upturn in letting activity, and if this is the
case there will be a scarcity of available space in certain locations leading to
an uplift in rental values. It is interesting to note that a number of recently
formed specialist funds recognising this possibility, have entered into the
investment market with a specific mandate to acquire newly developed commercial
property let on medium to long term leases located in the Thames Valley.
With interest rates at current low levels and a relatively stable economy,
yields on commercial property are higher than the majority of other investments
in the market place and I would therefore expect investment values to remain
strong. However, whilst new vacant office space will eventually be taken up, any
immediate improvement will be limited.
Your directors will continue to evaluate development opportunities as they
arise.
The group retains a well balanced commercial property portfolio together with a
number of exciting projects which are all subject to the grant of planning
permissions. I look forward to reporting to you with further progress at the
year end.
J Richard Wollenberg
Chairman
3 May 2005
Consolidated Profit and Loss Account
FOR THE SIX MONTHS ENDED 31 MARCH 2005
Six months Six months Year
31 March 31 March 30 September
2005 2004 2004
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Turnover
Group and share of joint venture
undertaking 2,005 1,621 2.679
Less: share of joint venture
undertaking (641) (1,247) (1,948)
______ ______ ______
Group turnover 1,364 374 731
Cost of sales (712) (27) (93)
______ ______ ______
Gross profit 652 347 638
Administrative expenses (247) (234) (471)
Other operating income 168 195 316
______ ______ ______
Operating profit
Group 573 308 483
Share of operating profit in joint
venture undertaking 364 889 1,387
______ ______ ______
Total 937 1,197 1,870
Profit on sale of investment property
Group - - 460
Share of joint venture undertaking 435 - 31
Profit on sale of other investments
(group) 1 - -
Amounts written off investment (group) - - (86)
______ ______ ______
Profit on ordinary activities before
interest 1,373 1,197 2,275
Interest receivable and similar income
Group 113 121 240
Share of joint venture undertaking 3 1 3
Interest payable
Group - (69) (152)
Share of joint venture undertaking (329) (307) (608)
______ ______ ______
Profit on ordinary activities before
taxation 1,160 943 1,758
Tax on profit on ordinary activities
Group (198) (100) (86)
Share of joint venture undertaking (20) (70) (132)
______ ______ ______
Profit on ordinary activities after
taxation being profit for the period 942 773 1,540
Dividends (47) (46) (140)
______ ______ ______
Retained profit for the period 895 727 1,400
______ ______ ______
Earnings per share - pence
On profit for the six months
Basic 53.4 38.2 80.2
Diluted 53.2 37.6 78.7
______ ______ ______
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 2005
31 March 31 March 30 September
2005 2004 2004
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Fixed assets
Tangible assets:
Investment properties 4,719 6,135 3,935
Other 5 6 5
______ ______ ______
4,724 6,141 3,940
______ ______ ______
Investments:
Investment in joint venture undertaking
Share of gross assets 16,471 16,893 16,651
Share of gross liabilities (10,524) (11,568) (11,159)
______ ______ ______
5,947 5,325 5,492
Other investments 303 397 311
______ ______ ______
6,250 5,722 5,803
______ ______ ______
Total fixed assets 10,974 11,863 9,743
______ ______ ______
Current assets
Stock and work in progress 2,799 3,210 3,423
Debtors 487 3,082 2,369
Cash at bank and in hand 3,660 3,227 1,349
______ ______ ______
6,946 9,519 7,141
Creditors: amounts falling due within
one year (955) (1,203) (923)
______ ______ ______
Net current assets 5,991 8,316 6,218
______ ______ ______
Total assets less current liabilities 16,965 20,179 15,961
Creditors: amounts falling due after
more than one year - (3,200) -
Provisions for liabilities and charges (418) (549) (413)
______ ______ ______
Net assets 16,547 16,430 15,548
______ ______ ______
Capital and reserves
Called up share capital 357 407 347
Share premium account 4,944 4,850 4,850
Investment property revaluation
reserve 4,261 4,259 4,261
Other reserves 2,291 2,231 2,291
Profit and loss account 4,694 4,683 3,799
______ ______ ______
Shareholders' funds - equity 16,547 16,430 15,548
______ ______ ______
Net assets per share 928p 807p 895p
Consolidated Cash Flow Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2005
Six months Six months Year
31 March 31 March 30 September
2005 2004 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash inflow/(outflow) from operating
activities 3,048 (1,144) (512)
Returns on investment and servicing of
finance 72 86 127
Taxation - - (361)
Capital expenditure and financial
investment (773) (100) 3,010
Equity dividends paid (103) (103) (142)
______ ______ ______
Cash inflow/(outflow) before financing 2,244 (1,261) 2,122
Financing 104 37 (5,168)
______ ______ ______
Increase/(decrease) in cash in
the period 2,348 (1,224) (3,046)
______ ______ ______
Reconciliation of net cash flow to movement in net funds/(debt)
Increase/(decrease) in cash in the
period 2,348 (1,224) (3,046)
Bank loans repaid - - 3,200
______ ______ ______
2,348 (1,224) 154
Net funds at beginning of period 1,312 1,158 1,158
______ ______ ______
Net funds/(debt) at end of period 3,660 (66) 1,312
______ ______ ______
Reconciliation of operating profit to net cash flow from operating activities
Operating profit (group) 573 308 483
Depreciation charges 2 1 2
Decrease/(increase) in stock and work in
progress 624 (316) (529)
Decrease/(increase) in debtors 1,845 (1,167) (454)
Increase/(decrease) in creditors and
provisions 4 30 (14)
______ ______ ______
Net cash inflow/(outflow) from operating
activities 3,048 (1,144) (512)
______ ______ ______
Notes to the Financial Statements
FOR THE SIX MONTHS ENDED 31 MARCH 2005
1 Basis of preparation
The figures for the six months ended 31 March 2005, which were approved by the
board on 3 May 2005, are prepared on the same basis of accounting as for the
year ended 30 September 2004 and are unaudited.
The figures for the year ended 30 September 2004 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 Analysis of turnover, profit on ordinary activities before interest and
taxation and net operating assets
Six months Six months Year
31 March 31 March 30 September
2005 2004 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Turnover (wholly in the United
Kingdom)
Gross rents receivable:
Group 251 374 731
Share of joint venture undertaking 641 1,247 1,948
Sales of development property (group) 1,113 - -
______ ______ ______
2,005 1,621 2,679
______ ______ ______
Profit on ordinary activities before
interest and taxation
Property and other investment:
Group 68 308 857
Share of joint venture undertaking 799 889 1,418
Property development (group) 506 - -
______ ______ ______
1,373 1,197 2,275
______ ______ ______
Net operating assets
Property and other investment 12,710 13,008 12,070
Property development 3,837 3,422 3,478
______ ______ ______
16,547 16,430 15,548
______ ______ ______
3 Taxation
The tax position for the six months is estimated on the basis of the anticipated
tax rates applying for the full year.
4 Dividends
Year Year
30 September 30 September
2005 2004
£'000 £'000
Interim 2.5p per share 45 Interim 2.2p per share 46
Increase in 2004 final Reduction in 2004 interim dividend
dividend following issue following redemption of own
of shares in respect of shares (7)
options exercised 2
Final - Final 5.8p per share 101
______ ______
47 140
______ ______
The interim dividend of 2.5p per share will be paid on 8 July 2005 to
shareholders on the register on 10 June 2005.
5 Earnings per share
Earnings per share has been calculated in accordance with FRS 14 - Earnings per
Share using the profit after tax for the period of £942,000 (six months to 31
March 2004: £773,000; year to 30 September 2004: £1,540,000) and the weighted
average number of shares as follows:
Weighted average number of shares
31 March 31 March 30 September
2005 2004 2004
Basic 1,764,936 2,024,337 1,920,304
Adjustment to basic for bonus element
of shares to be issued on exercise of
options 7,018 33,561 36,716
_________ _________ _________
Diluted 1,771,954 2,057,898 1,957,020
_________ _________ _________
6 Reconciliation of movements in shareholders' funds
31 March 31 March 30 September
2005 2004 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
At beginning of period 15,548 15,666 15,666
Profit after tax for the period 942 773 1,540
Dividends (47) (46) (140)
Revaluation of investment properties - - 450
Share options exercised in period:
Increase in share capital 10 4 4
Increase in share premium 94 33 33
Own shares purchased in period - - (2,005)
______ ______ ______
At end of period 16,547 16,430 15,548
______ ______ ______
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