Final Results - Replacement
Grainger Trust PLC
7 December 2000
The issuer has made the following amendment to the Final Results
announcement released today at 07:01 under RNS No 3854V.
Amendment to Grainger Trust Preliminary Results Announcement
Record Date:
Changed from:
Your Directors are recommending a final dividend of 8.42p per share (1999:
7.32p per share), payable on 1st March 2001 to shareholders on the register at
the close of business on 9th February 2000.
Please change to:
Your Directors are recommending a final dividend of 8.42p per share (1999:
7.32p per share), payable on 1st March 2001 to shareholders on the register at
the close of business on 9th February 2001.
All other details remain unchanged.
The full corrected version is shown below.
PRELIMINARY RESULTS FOR THE
YEAR ENDED 30TH SEPTEMBER 2000
Grainger Trust plc, the tenanted residential property specialist,
today announces Preliminary Results for the year ended 30th September
2000. Highlights are as follows:-
* Pre-tax profits up 31% to £16.1m (1999: £12.3m prior to the
exceptional net credit of £11.9m).
* Earnings per share up 28% to 43.3p per share (1999: 33.9p per
share prior to the exceptional net credit)
* Net Asset Value prior to contingent taxation on revaluation
surpluses and FRS 13 adjustment per share up 39% to £9.85 (1999:
£7.08)
* Proposed dividends for the year of 10.72p per share, an increase
of 15% (1999: 9.32p per share)
* It is confirmed that Grainger Trust is a member of the Deutsche
Bank Private Equity consortium who have been granted a period of
exclusivity to bid for BPT plc.
Commenting on the results, Stephen Dickinson, Managing Director, said:
'I am delighted to report another excellent result for the year. In
the last two years we have doubled earnings per share and NAV per
share. We have continued our drive to improve returns by building up
our development activities and continuing the disposal of ex-growth
properties from the commercial investment portfolio. These
improvements illustrate that our long-term strategy of focusing on
activities where large reversionary values are combined with material
cash flow generation is proving successful.
'The profitability and strong cash flow generation of core business
areas has given the Group the opportunity to increase the scope of our
development activities in both the commercial and residential sectors
and to forge relationships with key partners.
'The current negotiations with BPT represent an exciting opportunity
for the Group. This year has begun well and we continue to have every
confidence in the future.'
Enquiries:-
Stephen Dickinson Managing Director Grainger Trust plc 0191 261 1819
Andrew Cunningham Financial Director Grainger Trust plc
Tom Buchanan Brunswick Group 020 7404 5959
Tricia Parish Brunswick Group 020 7404 5959
GRAINGER TRUST plc
Preliminary Results for the Year Ended 30th September 2000
Results and Dividend
The results for the year ended 30th September 2000 show pre tax
profits up 31% to £16.1m (1999: £12.3m prior to the exceptional net
credit of £11.9m).
Earnings per share increased 28% to 43.3p per share (1999: 33.9p per
share prior to the exceptional net credit).
Year end Net Asset Value per share (NAV) prior to contingent taxation
on revaluation surpluses and the FRS 13 adjustment has risen 39% to
£9.85 (1999 £7.08). NAV increased by £2.77 during the year. This is
made up of retained earnings (34p less tax charged to reserves 4p),
30p, and valuation surpluses of £1.49p and 98p arising in the Tenanted
Residential and Development and Trading Divisions respectively. This
increase embodies the net effect of 8p arising from movements in the
issued shared capital. Buy backs totalling 740,000 shares at an
average price of £5.77 give rise to a surplus of 12p. The issue of
50,000 shares on the acquisition of Real Estate Securities Limited at
£3.98 per share and the take up of 97,669 shares under company option
schemes at an average price of £1.44 give rise to a deduction of 4p
per share. Year end NNNAV per share is £7.41p (1999: £5.34) after
making deductions of £2.18 and 26p per share for contingent taxation
and FRS 13 respectively.
Your Directors are recommending a final dividend of 8.42p per share
(1999: 7.32p per share), payable on 1st March 2001 to shareholders on
the register at the close of business on 9th February 2001. This
together with the interim dividend of 2.3p per share (1999: 2.0p) paid
in July will amount to 10.72p, an increase of 15% (1999: 9.32p).
In the last two years earnings per share (1998: 23.1p 2000: 43.3p),
and NAV per share (1998: £4.67, 2000: £9.85) have doubled. These
improvements illustrate that the Group's long term strategy of
concentrating on activities where large reversionary values are
combined with material cashflow generation is proving successful.
BPT
We are a member of the consortium led by Deutsche Bank Real Estate
Private Equity which has been involved in the bidding process for BPT.
The BPT Board announced on the 4th December that it had entered into a
period of exclusive negotiations with this consortium, to terminate on
31st January 2001, and that the proposals made enjoy the full support
of BPT's Executive Directors. This represents an exciting opportunity
for the Group, and further announcements will be made as appropriate.
Group Structure
The Group's drive to improve returns is demonstrated by the build up
of its development activities and the continued disposal of ex-growth
properties from the commercial investment portfolio. To recognise the
new balance of operations, Group operations have been reclassified as
follows:-
Tenanted Residential. The tenanted residential portfolio.
Development and Trading. Residential land, and other development and
trading.
Investment. Commercial properties to be held for long term growth.
Review of Operations
Tenanted Residential
The operating contribution has increased by 17% to £20.5m from £17.5m
last year. Gross and net rentals have increased to £14.8m (1999:
£13.0m) and £8.7m (1999 £7.4m) respectively. Trading profits have
increased to £13.6m (1999: £11.5m).
The majority of our stock, by vacant possession value, is in London
and the South East. Selling prices realised for properties sold have
for the second year running exceeded our estimate of vacant possession
value at the start of the year by 20%. We have also seen satisfactory
results from our other two operating divisions, South/South West and
the Midlands/North. Since April the London market has weakened
slightly, with buyers seeking discounts to selling prices. The House
of Lords have heard the Government's appeal on the question of the
legality of capping registered rents, and their decision is awaited.
We have spent £36m on replacement property. Shareholders will be
relieved to learn that only 7 of our properties have suffered during
the recent floods. At the year end our stock had increased
numerically from 5,016 to 5,250 units.
Year end cost, investment value, and resultant NAV surplus are £152m,
£259m and £107m respectively. £37m of the NAV surplus, £1.49 per
share, occurred in the year.
Development and Trading
The operating contribution has increased to £6m from £0.9m. £5.2m of
this year's contribution arises from Residential Land Development at
Kennel Farm, with the balance of £0.8m being net rental income less
initial development expenditure written off.
Residential Land
During the year we completed three transactions at Kennel Farm with
national house builders, two sites were sold outright, and the balance
of the original site was sold on conditional contracts over four years
at fixed prices. These transactions involve a gross income flow of
some £50m. Our infrastructure programme is well advanced, and house
builders have some 200 houses completed or in the course of
construction. We have purchased the adjoining ex Motorway Service
Area 12 acre site which is allocated for housing in the Local Plan,
and outline planning has been applied for. Initial planning work
continues with the Winchester and Havant Councils on the 640 acre site
at Waterlooville, over which we hold an option, which is designated as
one of the four Major Development Areas (MDA's) in the Hampshire
County Structure Plan. We have also purchased two agricultural sites
adjoining established settlements which we will be promoting for
residential development.
Other Development and Trading
This division now includes current development projects, properties
held for future redevelopment and commercial trading properties held
for resale in the short to medium term. We are currently building
four new distribution units, with our partner Astral, immediately
adjacent to Intersection 31 on the M25 at Thurrock. Since the year
end we have exchanged contracts on the sale of one unit at a level
above our expectations. We are undertaking a 190,000 sq.ft. mixed use
scheme at the Old Crown site in the centre of Slough with Frontier
Estates which is attracting strong interest from potential occupiers.
A resolution to grant planning permission has been passed, and
construction should start in early 2001 with completion a year later.
We have two projects on land owned immediately adjacent to our
residential land projects. In Basingstoke we are finalising the
planning for a 100,000 sq.ft. business park. At West Waterlooville we
have made a planning application for a leisure complex of 70,000
sq.ft. to encompass a family pub/restaurant, hotel, health and fitness
centre and two drive through restaurants, all of which are attracting
serious interest.
Our residential development activities include a 21 flat scheme at
Redcliffe Backs in Bristol which is due for completion in the first
quarter of 2001. Nineteen flats have either exchanged contracts or
been reserved at satisfactory prices. In addition, we are working up
two properties in Kensington Church Street and Ladbroke Grove, and
have submitted a planning application for the conversion of a 13,000
sq.ft. office building in Uxbridge Street, Kensington to residential
with an office refurbishment as an alternative. We continue to be
involved in the 79 flat private residential element of the proposed
Victoria Bus Garage redevelopment in Pimlico.
In addition to these current projects we hold properties valued at
£42m, the majority of which are in the commercial sector, which are
income producing but have a potential for redevelopment or short term
resale. Included in this portfolio is Townsend House, Victoria, where
we have submitted a planning application with Central & City for a
120,000 sq.ft. office scheme which includes adjoining land.
Year end cost, investment value, and resultant NAV surplus are £68m,
£115m and £47m respectively. £24m of the NAV surplus, 98p per share
occurred in the year.
Investment
The operating contribution from commercial investments fell by 37% to
£4.9m (1999 £7.8m). This is due to the continued sale of ex-growth
properties from this portfolio, £19m having been sold in the year, and
£23m having been transferred to other divisions in accordance with the
alterations in Group Structure. Provisions against and losses on
disposal of investment properties totalling £0.9m (£0.3m relating to
sales costs) compare with a profit of £0.4m in 1999. We foresee
further sales to achieve a core holding of properties with long term
growth prospects.
Year end cost, investment value and NAV surplus are £56m, £64m and £8m
respectively. No movement occurred on surplus during the year.
Personnel
Rupert Dickinson was appointed Deputy Managing Director during the
year. He has been instrumental in increasing the size and scope of
the Group's development division and overseeing the London office's
tenanted residential activities which have been particularly
successful in recent years. Andy James, who has dealt very
competently with our residential land activities since early 1999,
became a full time employee of the Group from 1st October. The
Group's recruitment initiatives over the last few years have
successfully attracted entrepreneurial and experienced managers who
are now carrying forward the Group's activities. Your Directors are
very grateful to all employees for the professionalism and dedication
shown in achieving these excellent results.
Shareholder Value
As foreshadowed in the Interim Results Announcement, your board sought
and obtained the approval of shareholders at an EGM held on the 26th
July to increase the Company's existing powers to purchase its issued
share capital from 5% to 10% in the period expiring at the conclusion
of the Company's next AGM. Some 740,000 shares representing 2.9% have
been bought in to date in this financial year at a cost of £4.3m.
Your Directors believe that Grainger Trust's best prospects are in
remaining as an independent company within the quoted property sector;
as recently announced the Company is participating in the
rationalisation of the sector through its involvement with the
consortium bidding for BPT.
These latest results demonstrate clearly how successful Grainger Trust
has been in building shareholder value. At the forthcoming AGM your
Directors will include a resolution renewing the buy back power.
Prospects
The Group has had another successful year. The tenanted residential
activity has long been the backbone of the Group's activities. It is
both profitable and cashflow generative, and has been joined in this
category by residential land with Kennel Farm on stream. The strong
cashflows generated have given the Group the opportunity to increase
the scope of its development activities in both the commercial and
residential sectors and to forge relationships with key partners. The
current negotiations with BPT represent another exciting opportunity
for the Group, in addition to those referred to above. Your Directors
have every confidence the future.
Registered Office
Chaucer Buildings Robert Dickinson
57 Grainger Street Chairman
Newcastle upon Tyne.
NE1 5LE 7th December 2000
GRAINGER TRUST plc
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30TH SEPTEMBER 2000
Year Year Ended 30th September 1999
Ended 30th Excluding
September Exceptional Exceptional
2000 Items Items Total
£'000s £'000s £'000s £'000s
Turnover 68,218 60,118 60,118
_______ ________ ______
Gross rental income 24,705 22,752 22,752
Trading profits 19,441 12,601 12,601
Exceptional item: write
back of provision
against development land 16,457 16,457
Other income 346 361 361
_______ ________ ______
44,492 35,714 16,457 52,171
Less:
Property expenses (9,054) (6,970) (6,970)
Administration expenses (3,391) (3,164) (3,164)
_______ ________ ______
Operating profit 32,047 25,580 16,457 42,037
Net (loss)/profit on
disposal of and
provisions against fixed
assets (699) 641 641
_______ ________ _______ ______
Profit on ordinary
activities before
interest 31,348 26,221 16,457 42,678
Net interest and similar
charges (15,252) (13,891) (4,569) (18,460)
_______ ________ _______ ______
Profit on ordinary
activities before
taxation 16,096 12,330 11,888 24,218
Taxation (5,150) (3,766) (3,626) (7,392)
__________ __________ _______ _______
Profit on ordinary
activities after
taxation 10,946 8,564 8,262 16,826
Dividends (2,666) (2,353) (2,353)
__________ __________ _______ _________
Retained profit for the
year 8,280 6,211 8,262 14,473
__________ __________ _______ _________
Earnings per share
43.3p 33.9p 32.7p 66.6p
Diluted earnings per
share 43.1p 33.8p 32.6p 66.4p
__________ __________ _______ _________
STATEMENT OF GROUP TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 30TH SEPTEMBER 2000
2000 1999
£'000 £'000
_________ _______
Profit for the financial year 10,946 16,826
Taxation on realisation of property
revaluation gains of previous years (950) (380)
Surplus on investment properties transferred
to stock (7,931)
Unrealised (deficit)/surplus on revaluation
of properties (269) 6,885
_________ _______
Total gains recognised since the last annual
report 1,796 23,331
_________ _______
Note of group historical cost profit and
losses
Reported profit on ordinary activities
before taxation 16,096 24,218
Realisation of property revaluation gains of
previous years 2,911 481
_________ _______
Historical cost profit on ordinary
activities before taxation 19,007 24,699
Taxation (6,100) (7,772)
Dividends (2,666) (2,353)
Retained historical profit for the year 10,241 14,574
_________ _______
GRAINGER TRUST plc
BALANCE SHEETS
AT 30TH SEPTEMBER 2000
Group Company
2000 1999 2000 1999
£'000 £'000 £'000 £'000
_______ _____ _____ ________
Fixed assets
Tangible assets 64,886 115,879 408 404
Investments 866 302 57,414 57,561
Intangible assets 80 (205) -
_______ _______ ______ ________
65,832 115,976 57,822 57,965
_______ _______ ______ ________
Current assets
Stocks 220,157 134,475 - -
Debtors: 7,276 4,023 43,117 29,165
Cash at bank and in
hand 7,549 18,432 310 6,242
_______ _______ ______ ________
234,982 156,930 43,427 35,407
_______ _______ ______ ________
Creditors: amounts
falling due within
one year 46,379 29,021 32,350 23,327
_______ _______ ______ ________
Net current assets 188,603 127,909 11,077 12,080
_______ _______ ______ ________
Total assets less
current liabilities 254,435 243,885 68,899 70,045
Creditors: amounts
falling due after
more than one year 159,461 144,665 23,758 25,737
Provision for
liabilities and
charges
Deferred taxation 5,576 5,019
_______ _______ ______ ________
Net assets 89,398 94,201 45,141 44,308
_______ _______ ______ ________
Capital and reserves
Called-up share
capital 6,164 6,312 6,164 6,312
Share premium account
20,738 20,435 20,738 20,435
Revaluation reserve 11,258 22,369 51 51
Capital reserves - 14,093 - 10,405
Capital redemption
reserve 185 185
Profit and loss
account 51,049 30,988 18,003 7,105
_______ _______ ______ ________
Equity shareholders'
funds 89,394 94,197 45,141 44,308
Minority interests 4 4
_______ _______ ______ ________
Total capital
employed 89,398 94,201 45,141 44,308
_______ _______ ______ ________
CONSOLIDATED CASHFLOW STATEMENT
FOR THE YEAR ENDED 30TH SEPTEMBER 2000
2000 1999
£'000s £'000s
Net cash (outflow)/inflow from
operating activities (19,929) 30,787
__________ ______
Returns on investment and servicing
of finance
Interest received 282 227
Interest paid (15,571) (20,781)
Dividends received 7 3
__________ ______
(15,282) (20,551)
__________ ______
Taxation
UK Corporation tax paid (7,312) (3,846)
__________ ______
Capital expenditure and financial
investment
Purchase of fixed asset investments (828)
Purchase of tangible fixed assets (1,477) (10,673)
Sale of tangible fixed assets 19,905 13,455
__________ ______
17,600 2,782
__________ ______
Acquisitions and disposals
Purchase of subsidiaries (5,859) (5,341)
Cost on purchase of subsidiaries (125) (284)
Net cash acquired with subsidiaries 271 1,437
__________ ______
(5,713) (4,188)
__________ ______
Equity dividends paid (2,438) (2,108)
Cash (outflow)/inflow before (33,074) 2,876
financing
__________ ______
Financing
New loans raised 43,388 14,874
Repayment of loans (17,064) (7,392)
Share buyback (4,273)
Issue of shares 140
__________ _________
Net cash inflow from financing 22,191 7,482
__________ _________
(Decrease)/increase in cash in the
period (10,883) 10,358
__________ _________
Reconciliation of operating profit
to net cash (outflow)/inflow from
operating activities
Operating profit 32,048 42,037
Depreciation and profit on disposal
of fixed assets 196 247
Movement in provision against
development land (16,457)
(Increase)/decrease in debtors (3,086) 1,244
Increase in creditors 1,088 1,925
(Increase)/decrease in stocks (50,175) 1,791
__________ _________
Net cash (outflow)/inflow from
operating activities (19,929) 30,787
__________ _________
This preliminary announcement was approved by the Board of Directors
on 7th December 2000.
This announcement does not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985. Statutory accounts
for the period ended 30th September 1999 have been filed with the
Registrar of Companies. The auditors have reported on these accounts;
their report was unqualified and did not contain any statement under
Section 237(2) or (3) of the Companies Act 1985.
The release of this announcement has been agreed by the Group's
auditors, PricewaterhouseCoopers. The statutory accounts of the Group
for the year ended 30th September 2000 have been prepared, but the
auditors' report has yet to be signed. It is expected that the
auditors' report on the statutory accounts for the year ended 30th
September 2000 will be unqualified.
NOTES TO THE RESULTS ANNOUNCEMENT
1. Property valuations
For NAV purposes, all properties are shown at valuation.
Investment properties are shown in the balance sheet at valuation,
while trading stock, which consists of tenanted residential properties
and development and trading properties, are shown at the lower of cost
and net realisable value.
Tenanted residential properties have been valued in-house or by
managing agents. Chesterton plc have re-valued some 2,300 dwellings
which were valued by them in March 2000 for the Company's interim
announcement. Additionally, they have audited the internal/managing
agents' valuations for the remaining dwellings and are content that
these valuations are reasonable.
All other property and land portfolios have been valued by qualified
professional valuers.
The comparison of cost, net of provisions, against valuation, on the
above basis, is as follows:
30 September 2000 30 September 1999
Cost Valuation Cost Valuation
£m £m £m £m
Investment properties 56.3 64.5 95.4 115.5
____ _______ _____ ______
Trading stock
Tenanted residential
properties 152.4 58.9 121.3 188.8
Development and
trading 67.8 114.6 13.2 30.3
____ _______ _____ ______
220.2 373.5 134.5 219.1
____ _______ _____ ______
Total properties 276.5 438.0 229.9 334.6
_____ _____ _____ _____
2. Net asset value per share
This consists of balance sheet equity plus the excess of market value
over book cost of trading stock divided by the number of shares in
issue. Net asset value per share at 30th September 2000 before the
adjustments referred to below was £9.85, compared to £7.08 at 30th
September 1999.
Two proforma adjustments are commonly made to NAV per share:-
i) FRS13
This records the difference between the current market value of fixed
rate debt and derivatives and their book values. After allowing for
tax, this adjustment has increased to 26p from 21p at 30th September
1999.
ii) Contingent tax
This is the tax that would be payable if all Group properties were
disposed of at valuation on 30th September 2000, and amounts to £2.18
per share.
3. Earnings per share
The calculation of earnings per share is based on a weighted average
of 25,258,530 shares in issue during the year (1999: 25,247,387). The
diluted earnings per share is based on a weighted average of
25,376,250 ordinary shares (1999: weighted average 25,343,410).
4. Reserves
Following reclassification of the Group's operations, certain
properties were transferred from tangible fixed assets to trading
stock at the lower of cost and net realisable value. The effect of
this was to reduce revaluation reserve by £7,931,000. The balance of
£14,093,000 on capital reserve at 30th September 2000 has been
transferred to profit and loss account reserve.
5. Reconciliation of Net Cashflow to Movement In Net Debt
2000 1999
£'000 £'000
(Decrease)/increase in cash over
period (10,883) 10,358
Cash inflow from increase in debt (26,324) (7,482)
_________ ______
Change in net debt resulting from
cashflows (37,207) 2,876
_________ ______
Other non-cash items
Loan notes issued (2,318)
Loans acquired with subsidiary (4,597) (350)
_________ ______
Movement in net debt for the period (41,804) 208
Net debt at 1 October 1999 (136,200) (136,408)
_________ _________
Net debt at 30 September 2000 (178,004) (136,200)
_________ _________
MEMO FOR ANALYSTS
RECONCILIATION OF OPERATING CONTRIBUTIONS
£m
Year Ended 30.9.99 Year Ended 30.9.00
Tenan- Commer- Tenan- Devel- Commer-
ted cial ted opment cial
Resid- Devel- Invest- Resid- & Invest-
ential opment ment Total ential Trading ment Total
Variance
40.8 9.4 9.9 60.1 Turnover 43.4 17.3 7.5 68.2 8.1
______ _____ _______ _______
Gross
13.0 - 9.7 22.7 Rents 14.8 2.6 7.3 24.7 2.0
Property
(5.6) - (1.4) (7.0) Expenses (6.1) (1.6) (1.3) (9.0) (2.0)
______ _____ _______ _______ ______ _____ _______ ___ _____
7.4 - 8.3 15.7 8.7 1.0 6.0 15.7 -
Trading
11.5 1.1 - 12.6 Profits 13.6 5.8 - 19.4 6.8
Other
0.2 - 0.2 0.4 Income 0.2 - 0.2 0.4 -
______ _____ _______ ___ ______ _____ _______ ___ _____
19.1 1.1 8.5 28.7 22.5 6.8 6.2 35.5 6.8
Adminis-
(1.9) (0.2) (1.1) (3.2) tration (2.2) (0.8) (0.4) (3.4) (0.2)
______ _____ _______ _______ _______ _____ _______ ___ _____
17.2 0.9 7.4 25.5 20.3 6.0 5.8 32.1 6.6
Capital
0.3 - 0.4 0.7 Profits 0.2 - (0.9) (0.7) (1.4)
______ _____ _______ _______ _______ _____ _______ ___ _____
Opera-
17.5 0.9 7.8 26.2 ting 20.5 6.0 4.9 31.4 5.2
Contri-
butions
______ _____ _______ _______ _______ _____ _______ ___ _____
Less:
Net
Interest
(13.9) Payable (15.3) (1.4)
_______
12.3 NPBT 16.1 3.8
Net
Excep-
tional
11.9 Credit - (11.9)
_______ ___ _____
NPBT
After
Excep-
tional
24.2 Credit 16.1 (8.1)
_______ ___ _____
MEMO FOR ANALYSTS
Reconciliation to NAV Published Accounts
30.9.99 30.9.00
Adjusted For
Divisional
Transfers
£m Per £m Per
Share Share
Share Capital and Reserves Including
74.2 2.94 Retained Earnings For the Year 85.2 3.22
Net Effect Share Transactions (4.0) 0.08
Revaluation Reserve Embodied in
Published Accounts:-
12.1 0.48 Commercial 8.2 0.33
____ ______ ____ _____
86.3 3.42 Per Published Accounts 89.4 3.63
Value of Trading Assets in Excess of
Cost:-
69.8 2.76 Residential 106.5 4.32
22.7 0.90 Development and Trading 46.8 1.90
_____ _____ ____ _____
178.8 7.08 242.7 9.85
_____ _____ ____ _____
Monday, 13th May 2024
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