Interim Results
Helical Bar PLC
18 November 2004
18 November 2004
HELICAL BAR PLC
('Helical'/'Company')
Interim Results
For the half year to 30 September 2004
HELICAL TO RETURN £4 A SHARE
• Shareholders to receive £4 a share by way of a capital reconstruction
following the sale of Aycliffe & Peterlee Industrial Estates for £67.6m
• Adjusted diluted net asset value of 966p per share (31.3.04: 874p) -
up 11% after interim valuation
• 'Triple net' asset value of 886p per share (31.3.04: 797p) - up 11%
• Investment portfolio valuation increase of 9.3% since 31 March 2004
• Profit before tax of £9.5m (2003: £6.4m) - up 47%
• Interim dividend held at 6.60p per share (2003: 6.60p)
• A further 2.0% of share capital bought in for cancellation at an average
cost of 843p per share.
John Southwell, Chairman, commented:
'With over 30 active projects spread across the different property sectors your
directors view the financial and trading prospects of the Group for the current
financial year and thereafter with confidence.'
Further information, please contact:
Helical Bar plc
020 7629 0113
Michael Slade (Managing Director)
Nigel McNair Scott (Finance Director)
Address: 11-15 Farm Street, London W1J 5RS
Fax: 020 7408 1666
Website: www.helical.co.uk
Financial Dynamics
020 7831 3113
Stephanie Highett/Dido Laurimore
FINANCIAL HIGHLIGHTS
Notes Unaudited Unaudited Audited
Half Year Half Year Year
To To To
30 September 30 September 31 March
2004 2003 2004
£m £m £m
Net rental income 10.9 11.7 23.0
Development profits 0.2 (0.7) -
Trading profits 1.3 0.3 1.0
Other gross profits - - 0.6
Profits before tax 9.5 6.4 13.7
Adjusted profits before tax 1 6.9 5.3 11.7
pence pence pence
Diluted earnings per share 27.6 13.6 39.6
Dividends per share 6.60 6.60 16.60
Adjusted diluted net assets per share 2 966 779 874
Adjusted diluted 'triple net' assets
per share 3 886 719 797
£m £m £m
Value of investment portfolio 303.9 281.3 334.9
Net borrowings 77.6 114.6 129.8
Adjusted net assets 4 275.0 232.6 248.7
Net gearing 4 28% 49% 52%
Notes
1. Excludes profit on sale of investment properties and loss on sale of
subsidiary.
2. After adding back deferred taxation arising from the clawback of capital
allowances on sale of investment properties and the cost of the
investment in own shares held by the Company's Employee Share Ownership
Plan Trust.
3. Adjusted for contingent liabilities of deferred taxation on chargeable
gains on investment properties and the market value of financial
instruments but after adding back the deferred taxation referred to in Note
2 above and the cost of the investment in own shares held by the Company's
Employee Share Ownership Plan Trust.
4. After adding back the cost of the investment in own shares held by the
Company's Employee Share Ownership Plan Trust.
Chairman's Statement
Since the start of the financial year Helical has continued to take advantage of
a buoyant investment market, selling over £150m of investment properties
including its two industrial estates at Aycliffe & Peterlee, due to complete on
23 November 2004. The effect on the balance sheet of Helical of these, and
previous investment sales, will be to reduce the Company's net gearing to below
15%. This is an inappropriate level for a Company such as Helical which
traditionally has enhanced returns on shareholders' equity by the judicious use
of gearing.
The Company is therefore considering a tax efficient return of cash to
shareholders of £4 a share following the completion of the sale of Aycliffe &
Peterlee. It is expected that the return of cash will be structured to give
shareholders a choice between receiving the payment either in the form of income
or of capital. In addition, shareholders will have a limited opportunity to
receive further ordinary shares in lieu of their entitlement to a cash payment
albeit at an effective premium to the market price.
As part of the return of cash scheme it is proposed there be a share
reorganisation so that, subject to normal market movements, the Helical Bar
share price following the return is approximately equal to the share price prior
to the return of cash with shareholders accordingly holding a proportionately
smaller number of shares.
Further details on the return of cash and subsequent share reorganisation will
be included in the circular which is expected to be posted to shareholders
shortly.
Such a return of cash will be in addition to the £4.5m spent buying back shares
in the half year. It should be noted that since July 2003 the Company has spent
£26.0m buying in shares for cancellation at an average share price of 756p per
share, enhancing future returns to shareholders.
Results
Pre-tax profits for the half year to 30 September 2004 increased by 47% to £9.5m
(2003: £6.4m). Adjusted profits, after excluding the profit on sale of
investment properties, rose by 30% to £6.9m (2003: £5.3m).
Rental income for the period fell to £12.3m (2003: £13.1m) following continued
sales of investment properties. A development profit of £0.2m was made (2003:
loss £0.7m). The profit on sale of investment properties was £2.6m (2003:
£1.2m).
Earnings per share increased by 105% to 28.7p (2003: 14.0p) and on a diluted
basis by 103% to 27.6p (2003: 13.6p). Adjusted earnings per share, after
excluding exceptional items and adding back the FRS19 deferred tax provision,
increased by 40% to 13.7p (2003: 9.8p).
As part of the preparation for the return of cash to shareholders, the
investment portfolio was revalued at 30 September 2004. As a consequence of
this the Company's basic net asset value per share increased by 10.5% to 1012p
(31.03.2004: 916p) and, on a diluted basis, by 11.2% to 974p (31.03.2004: 876p).
Net asset value per share adjusted for the addback of the deferred tax
provision and the cost of the investment in own shares held by the Company's
Employee Share Ownership Plan Trust increased by 10.5% to 966p (31.03.2004:
874p) and by 11.2% to 886p (31.03.2004: 797p) on a 'triple net' basis.
DEVELOPMENT PROGRAMME
OFFICE DEVELOPMENTS
COMPLETED DEVELOPMENTS
40 Berkeley Square, London W1
40 Berkeley Square is an office development of 72,500 sq ft situated in a prime
area of London's West End and carried out in joint venture with Morley Fund
Management. The building, completed in March 2004, comprises eight floors of
high specification offices. During the period the fourth floor was let to The
Blackstone Group for 20 years at a rent of £80 psf and a rent free period of 18
months. With the top three floors already let to The Blackstone Group and the
third floor let to Caxton Europe Asset Management, the building now has tenants
for 37,900 sq ft (52%).
The Heights, Weybridge
The Heights, Weybridge is a 337,000 sq ft office campus development of five
distinct buildings funded with Prudential. During the period 23,600 sq ft was
let to Alliance Unichem on a 15 year lease at £27 psf.
The Waterfront Business Park, Fleet
This scheme, funded with Barclays, comprises three self contained office
buildings overlooking the Fleet Pond Nature Reserve adjacent to Fleet railway
station. The second floor of Building 1 was let to Hydra Plc and, of the two
remaining floors, one is currently under offer. Building 2, which is the
largest building at 26,700 sq ft, has recently been let to Dimension Data
Network Services Limited and Building 3 was sold to the Conair Group for its own
occupation.
FUTURE DEVELOPMENTS
Ropemaker Place, London EC2
Ropemaker Place comprises a 500,000 sq ft redevelopment of a site in partnership
with owners DB Real Estate. Detailed planning consent has been granted. A
pre-let is being sought.
Mitre Square, London EC3
Mitre Square is an office scheme of 350,000 sq ft planned in partnership with
Ansbacher Property Development Limited. The planning application has been
submitted and we continue to await its approval.
Wood Lane, White City
Helical, who jointly with Morley Fund Management acquired a 10 acre site at
White City, have been working with a number of adjoining landowners to promote
the regeneration of 43 acres of land for a major mixed use development.
Following the sites' designation as an Opportunity Area in the London Plan,
Hammersmith & Fulham Borough Council have adopted their 'White City Opportunity
Area - A Framework for Development' as Supplementary Planning Guidance to the
Unitary Development Plan. The landowners are now looking to jointly instruct a
masterplanner to promote their combined vision that the area be transformed into
a thriving new mixed use urban quarter.
Amen Corner, Bracknell
Having acquired a number of residential properties and options over land at Amen
Corner, Bracknell, Helical is continuing to promote the site for commercial/
residential developments. This is now likely to happen through the new Local
Development Framework process.
RETAIL DEVELOPMENTS
We continue to work closely with our retail partners, Oswin Developments and
Overton Developments, on retail schemes throughout the country. In Milton
Keynes, our joint venture partner Abbeygate is working on a number of schemes.
Friary Retail Park, Stafford
The 38,500 sq ft scheme is pre-let to T K Maxx (20,000 sq ft), PC World (15,000
sq ft) and Choices Video (3,500 sq ft) and funded with Arlington Property
Investors at a yield of 5.5%. Construction work is well advanced and completion
is due early in December. A further 4,000 sq ft unit is to be created adjacent
to the main park as a second phase with construction envisaged to start in
Spring 2005.
56-76 Commercial Road, Bournemouth
Development work is shortly to commence on this £40m project. The property,
which was acquired from Equitable Life last year for £20m, is located in a prime
position in Bournemouth, and comprises a number of income producing shops, most
of which are about to be demolished to make way for a new three storey building.
The development will comprise four shops of varying sizes, with two stores
already pre-let (Hennes taking 22,000 sq ft and Zara taking 18,000 sq ft) and
one of the remaining smaller units under offer to a national fashion retailer.
The total size of the new building is 47,000 sq ft. In addition, three existing
shops let to blue chip covenants will remain. We are currently in talks with a
number of institutions who are interested in forward funding the scheme.
Trinity Square, Nottingham
Helical secured a contract on this prime 2.5 acre city centre site, which
adjoins the Victoria Centre, two years ago and has since obtained detailed
planning consent for a mixed use scheme comprising 250,000 sq ft of retail and
leisure accommodation, a multi storey car park containing 480 spaces plus 460
student accommodation units. Major pre-lettings have been secured on three
large retail stores, Borders taking 26,000 sq ft, T K Maxx 58,000 sq ft and
Dixons 25,000 sq ft. The scheme will have a completed value of £100m. It is
anticipated demolition of the site will commence in the Spring of next year,
with the completed scheme opening for trading in the Summer of 2007. We are
currently in discussions to forward fund the development.
Bluebrick, Wolverhampton
The 10 acre site was purchased last year and terms have now been agreed with Reg
Vardy for a sale of two acres for a Land Rover dealership, Travelodge for a 80
bed hotel and a national housebuilder for a city living scheme comprising 175
apartments. The deals are conditional on planning and an application is to be
submitted shortly.
Hatters Retail Park, Luton
Planning has recently been granted subject to a S.106 Agreement for a 80,000 sq
ft retail warehouse park and 25,000 sq ft of industrial units. Once the
planning documents have been finalised, marketing will be commenced with a view
to starting construction in Summer 2005.
Town Centre, Shirley
The scheme, which comprises 160,000 sq ft of retail anchored by a 75,000 sq ft
food store and some 200 apartments, is being progressed through a 50:50 joint
venture with Coltham Developments and a development agreement has been exchanged
with Solihull Metropolitan Borough Council who own the majority of the site.
Site assembly is underway and it is envisaged that a planning application will
be submitted early Summer 2005 with a view to start on site early in 2006.
SH3 Retail Park, Worcester
A purchase contract has been entered into with First Bus subject to their
relocation to a new site. The scheme has planning consent for 35,000 sq ft of
retail warehousing and 45 canalside apartments.
Milton Keynes
Planning consent has been obtained for an 80,000 sq ft retail warehouse in
Milton Keynes pre-let to Homebase. The £24.5m scheme has now been funded with
Arlington Property Investors to reflect a yield of 5.7% and construction starts
shortly. We have also been appointed by English Partnerships as developers of a
110,000 sq ft Sainsbury's supermarket and 400 residential units in central
Milton Keynes. All our Milton Keynes projects are carried out in joint venture
with local developer Abbeygate.
RESIDENTIAL DEVELOPMENTS
Lime Tree Village, Dunchurch, Rugby
At Lime Tree Village we have completed the first phase of 50 homes and the
refurbishment of the Victorian country house. Work on phase two has started.
Of the 150 bungalows, cottages and apartments to be built a total of 44 have
been sold or reserved.
Bramshott Place, Liphook
Planning negotiations continue for a retirement village development.
INVESTMENT AND TRADING PORTFOLIO
The interim valuation of the investment portfolio showed an uplift of 9.3% since
31 March 2004. Industrial property showed an increase in value of 12.6%, retail
warehousing 12.4%, town centre retail 8.0% and London offices 4.1%.
Sales
During the first half of the year offices were sold at 5-10 Paris Gardens,
London SE1 for £18.25m, a half share of 66 Prescot Street, London E1 for
£14.35m, Westfields in High Wycombe for £5.5m and Southfields Road, Dunstable
for £3.3m. We also contracted to sell the Interchange in Camden for £21.5m with
completion deferred up to September 2005. The total of £62.9m of office sales
was marginally above March 2004 valuation and 37% over historic cost, all having
been acquired over the previous five years.
A Sainsbury's supermarket in Wednesfield was sold for £18.36m reflecting a net
initial yield of 4.1%, in line with valuation but 58% over the purchase cost
incurred in December 2001. An industrial estate in Avonmouth was sold for
£8.025m, 25% above valuation and 87% above historic cost.
Since the half year end we have contracted to sell our industrial assets in
Aycliffe & Peterlee for £67.6m with completion scheduled for 23 November 2004.
The transaction reflects a net initial yield of 7.4%.
Out of Town Retail
Planning consent has been obtained for a 26,000 sq ft Wickes retail warehouse as
an extension to our retail park in Weston-Super-Mare. Retail warehouses in
Ashford, Middlesex and Crowborough, East Sussex have been acquired, the latter
just after the half year end.
In-Town Retail
Our shopping centre in Letchworth continues to progress well with new lettings
at £55 psf Zone A against £35 psf Zone A at the time of acquisition in 2003.
The purchase of the 235,000 sq ft Morgan Department Stores and Royal and Morgan
Arcades in Cardiff is due to complete in March 2005. Vacant possession is being
given of the department store which will be reconfigured to create large shop
units and upper floor residential. The Arcades which are fully let are the two
finest in Cardiff but have considerable scope for physical enhancement and
improvement of the tenant mix.
Industrial
We have a number of industrial refurbishment and redevelopment projects designed
for owner occupier sales at premium prices. Schemes in progress are 127,000 sq
ft in Harlow (84% sold, 6% under offer), 135,000 sq ft in Slough (19% sold),
46,000 sq ft in Sawston, Cambridge (10% sold, 38% under offer) and 36,000 sq ft
in Edenbridge (10% sold, 15% under offer). We have also recently acquired a
73,000 sq ft scheme at Watlington Road, Oxford. The projects are carried out in
joint venture with either Dencora or Chancerygate.
We hold industrial assets in Fleet (5 acres), Dunstable (5 acres) and Great
Alne, Warwickshire (20 acres) where we are hopeful of crystallising value by
obtaining residential or retirement home consents.
Offices
Our 150,000 sq ft office scheme at Shepherds Building, London W11 is now
progressing well with 70% of the accommodation let and 25% under offer. Over
thirty tenants, primarily from the media sector, are in occupation and we
believe there is significant scope for rental growth with the majority of the
space let at rentals below £20 psf. Our remaining offices, all in Central
London, are fully let with uplifts expected at reviews this year at 61 Southwark
Street, SE1.
Valuation Uplifts Since 31 March 2004
Industrial 12.6%
Office 4.1%
Out of Town Retail 12.4%
In-Town Retail 8.0%
Total portfolio 9.3%
Portfolio split (by value)
Current
Offices Retail Retail Industrial Other Total
In-Town Out of
Town
Investment 26.5% 7.4% 13.4% 31.7% 0.2% 79.2%
Trading 0.5% 0% 0% 6.7% 1.0% 8.2%
Development 3.8% 6.3% 1.0% 0% 1.5% 12.6%
Total 30.8% 13.7% 14.4% 38.4% 2.7% 100.0%
Portfolio split (by value)
On Legal Completion of Contracted Purchases and Sales
Offices Retail Retail Industrial Other Total
In-Town Out of
Town
Investment 25.8% 17.9% 15.1% 15.2% 0.1% 74.1%
Trading 0.6% 0% 2.5% 7.5% 1.2% 11.8%
Development 4.3% 7.0% 1.1% 0% 1.7% 14.1%
Total 30.7% 24.9% 18.7% 22.7% 3.0% 100.0%
Financing
Sales of investment properties have contributed to reductions in net debt to
£78m (31.03.2004: £130m) and net gearing to 28% (31.03.2004: 52%). On legal
completion of contracted purchases and sales, gearing will fall to below 15%
with net debt below £40m.
The Interim Statement includes, exceptionally, a revaluation of the investment
portfolio to assist in the preparation of the return of cash to shareholders.
This revaluation shows a surplus of £22.6m or 9.3%.
Recent sales of investment properties have reduced the Company's deferred tax
provision to £1.65m or 6p per share (31.03.2004: 8p). Unprovided deferred tax
on revaluation surpluses amounts to £22.0m or 76p per share (31.03.2004: 70p).
The Interim Statement adopts the provisions of UITF38 on the Accounting for
Employee Trusts. The effect of the adoption of this standard is a reduction in
the Company's net assets and shareholders' funds of £14.1m (31.03.2004: £10.1m).
Corresponding balance sheet amounts have been restated. In calculating the
adjusted net asset value per share the Company has increased net assets by this
amount as it believes that it will be recoverable in full as share options are
exercised.
Outlook
With over 30 active projects spread across all the different property sectors
your directors view the financial and trading prospects of the Group for the
current financial year and thereafter with confidence.
John Southwell
Chairman
18 November 2004
Independent Review Report to Helical Bar plc
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 30 September 2004 which comprises the consolidated profit
and loss account, summary consolidated balance sheet, summary cash flow
statement, statement of total recognised gains and losses, and the related notes
1 to 18. We have read the other information contained in the interim report
which comprises only the Chairman's statement and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information. Our responsibilities do not extend to any other information.
This report is made solely to the company, in accordance with guidance contained
in APB Bulletin 1999/4 'Review of Interim Financial Information'. Our review
work has been undertaken so that we might state to the company those matters we
are required to state to it in a review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company, for our review work, for this report, or for the
conclusion we have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority, which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
'Review of Interim Financial Information' issued by the Auditing Practices Board
for use in the United Kingdom. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data and, based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom Auditing Standards and therefore provides a lower level of assurance
than an audit. Accordingly, we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2004.
Grant Thornton UK LLP
Chartered Accountants
London
18 November 2004
Consolidated Profit and Loss Account
For the half year to 30 September 2004
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2004 2003 2004
Notes £000 £000 £000
Turnover (including share of joint
ventures' turnover) 31,143 30,979 55,984
Less: share of joint ventures' turnover (350) (744) (1,418)
_______ _______ _______
Turnover 1 30,793 30,235 54,566
Cost of sales (18,318) (18,892) (29,916)
_______ _______ _______
Gross profit 1 12,475 11,343 24,650
Administrative expenses
- Administration (4,055) (2,839) (8,037)
_______ _______ _______
Operating profit 8,420 8,504 16,613
Share of operating profit of joint ventures 2,007 817 1,636
Profit on sale of investment properties 2 2,561 1,169 2,035
Loss on sale of subsidiary - (56) (59)
_______ _______ _______
Profit on ordinary activities before 12,988 10,434 20,225
interest
Net interest payable and similar charges 3 (3,514) (3,986) (6,572)
_______ _______ _______
Profit on ordinary activities before
taxation 9,474 6,448 13,653
Taxation 4 (2,045) (2,384) (2,199)
_______ _______ _______
Profit on ordinary activities after taxation 7,429 4,064 11,454
Minority interest (116) (117) (232)
_______ _______ _______
Profit for the period 7,313 3,947 11,222
Ordinary dividends - 6.6p (6.6p) 5 (1,702) (1,795) (4,263)
_______ _______ _______
Retained profit for the period 5,611 2,152 6,959
_______ _______ _______
Earnings per 5p share 6
- basic 28.7p 14.0p 40.9p
- fully diluted 27.6p 13.6p 39.6p
Summary Consolidated Balance Sheet
At 30 September 2004
Notes Restated Restated
Unaudited Unaudited Audited
At At At
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
Fixed assets 7 306,789 287,288 337,027
Stock 9 67,994 60,498 70,254
Investments 10 263 13 263
Debtors 32,757 29,626 25,573
Cash 11 63,851 14,563 18,284
Creditors falling due within one year (93,912) (52,487) (78,662)
Creditors falling due after one year 12 (115,115) (114,297) (131,779)
Provisions for liabilities and charges 13 (1,650) (2,566) (2,345)
_______ _______ _______
Net assets 260,977 222,638 238,615
_______ _______ _______
Capital & reserves
Called up share capital 14 1,358 1,438 1,357
Share premium account 38,196 35,271 35,900
Revaluation reserve 89,897 69,386 89,323
Capital redemption and other reserves 7,564 7,450 7,537
Profit and loss account 133,112 116,333 110,906
_______ _______ _______
270,127 229,878 245,023
Less: Investment in own shares (14,051) (9,973) (10,106)
_______ _______ _______
Shareholders' funds 256,076 219,905 234,917
Minority interests 4,901 2,733 3,698
_______ _______ _______
260,977 222,638 238,615
_______ _______ _______
_______ _______ _______
Shareholders' funds
Attributable to equity interests 256,076 219,905 234,917
_______ _______ _______
Net assets per share
basic 15 1,012p 806p 916p
diluted 15 974p 776p 876p
adjusted diluted 15 966p 779p 874p
triple net 15 886p 719p 797p
Summary Cash Flow Statement
For the half year to 30 September 2004
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2004 2003 2004
Notes £000 £000 £000
Net cash inflow/(outflow) from operating
activities 16 13,862 (14,827) (11,082)
Dividends from joint ventures 1,078 246 1,415
Returns on investment and servicing
of finance (4,188) (3,485) (6,828)
Taxation (464) (3,036) (6,469)
Capital expenditure and financial
investment 17 47,362 20,445 19,002
Acquisitions/(disposals) (350) 37,719 40,415
Equity dividends paid (2,532) (2,570) (4,309)
_______ _______ _______
Cash flow before management of
liquid resources and financing 54,768 34,492 32,144
Management of liquid resources (29,053) 4,271 132
Financing
- issue of shares 2,323 - 635
- decrease in debt (7,009) (27,903) (9,060)
- refinancing costs (48) (8) (57)
- purchase of shares (4,467) (8,155) (21,515)
_______ _______ _______
Increase in cash 16,514 2,697 2,279
_______ _______ _______
Reconciliation of net cash flow to
movement in net debt
Increase in cash in the period 16,514 2,697 2,279
Cash flow from management of liquid
resources 29,053 (4,271) (132)
Cash flow from change in net debt 7,057 27,911 9,117
Debt arrangement expenses (381) (79) (170)
_______ _______ _______
Movement in net debt in the period 52,243 26,258 11,094
Net debt at beginning of the period (129,799) (140,893) (140,893)
_______ _______ _______
Net debt at end of the period (77,556) (114,635) (129,799)
_______ _______ _______
Gearing 12 28% 49% 52%
Statement of Total Recognised Gains and Losses
For the half year to 30 September 2004
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
Profit for the period after taxation 7,429 4,064 11,454
Minority interest (116) (117) (232)
Revaluation of investment properties
- subsidiaries 22,646 - 23,912
- joint ventures 192 - -
Minority interest in revaluation surplus (1,203) - (849)
_______ _______ _______
Total recognised gains and losses 28,948 3,947 34,285
_______ _______ _______
Notes to the Interim Statement
1. Turnover and gross profit on ordinary activities before taxation
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
Turnover
Trading property sales 9,608 2,075 5,264
Rental income 12,286 13,145 25,283
Developments 8,850 14,951 23,418
Other income 49 64 601
_______ _______ _______
30,793 30,235 54,566
_______ _______ _______
Gross profit
Trading property sales 1,264 284 1,031
Net rental income 10,924 11,681 22,980
Developments 239 (686) 38
Other net income 48 64 601
_______ _______ _______
Gross profit 12,475 11,343 24,650
Central overheads (4,055) (2,839) (8,037)
Interest payable less receivable (3,514) (3,986) (6,572)
Share of profit of joint ventures 2,007 817 1,636
_______ _______ _______
Profit before taxation, profit on sale of
investment properties, loss on sale
of subsidiary 6,913 5,335 11,677
_______ _______ _______
2. Sale of investment properties
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
Net proceeds from the sale of investment properties 71,140 73,699 84,213
Book value (68,579) (72,530) (82,178)
_______ _______ _______
Profit on sale of investment properties 2,561 1,169 2,035
_______ _______ _______
3. Net interest payable and similar charges
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
Interest payable on bank loans and overdrafts 4,260 4,011 7,548
Finance arrangement costs 381 79 170
Other interest payable and similar charges 1,119 1,097 1,741
Interest capitalised (1,283) (475) (1,817)
Interest receivable and similar income (963) (726) (1,070)
_______ _______ _______
3,514 3,986 6,572
_______ _______ _______
4. Taxation on profit on ordinary activities
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
The tax charge is based on the profit for the year
and represents:
United Kingdom corporation tax at 30% (2003: 30%)
- group corporation tax 2,667 2,446 2,084
- share of joint ventures 496 - 372
- adjustments in respect of prior periods - - (67)
_______ _______ _______
Current tax charge 3,163 2,446 2,389
Deferred tax
- origination of timing differences (695) (62) (361)
- share of joint ventures (423) - 171
_______ _______ _______
Tax on profit on ordinary activities 2,045 2,384 2,199
_______ _______ _______
5. Dividends
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
Attributable to equity share capital
Ordinary
- interim payable 6.60p (2003: 6.60p) per share 1,702 1,795 1,739
- final paid 10.00p per share - - 2,524
_______ _______ _______
1,702 1,795 4,263
_______ _______ _______
The interim dividend of 6.60p is payable on 17 December 2004 to shareholders on
the register on 26 November 2004.
6. Earnings per share
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the year. Shares held by the ESOP, which has waived its
entitlement to receive dividends, are treated as cancelled for the purposes of
this calculation.
The calculation of diluted earnings per share is based on the basic earnings per
share, adjusted to allow for the issue of shares and the post tax effect of
dividends on the assumed exercise of all dilutive options.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
Unaudited
Unaudited Half Year To
Half Year To 30 30
September September
2004 2003 Per
Weighted Per share Weighted share
Earnings average no of amount Earnings average no amount
£ shares pence £ of shares pence
Basic earnings
per share 7,313,000 25,523,166 28.7 3,947,000 28,159,875 14.0
Dilutive effect
of share options 1,005,021 863,723
_______ _______ _______ _______ _______ _______
Dilutive earnings
per share 7,313,000 26,528,187 27.6 3,947,000 29,023,598 13.6
_______ _______ _______ _______ _______ _______
7. Fixed assets
Unaudited At Audited At
30 September 31 March
2004 2004
£000 £000
Intangible assets
- goodwill 1,191 873
Tangible assets 509 503
Investment property 303,867 334,932
Investment in joint ventures
- share of gross assets 5,032 17,684
- share of gross liabilities (3,810) (16,965)
________ ________
306,789 337,027
________ ________
8. Investment property
Unaudited Audited
At At
30 September 31 March
2004 2004
£000 £000
Cost or valuation at 1 April 334,932 342,484
Additions at cost 14,868 50,464
Disposals (68,579) (82,178)
Revaluation 22,646 24,162
________ ________
Cost or valuation at 30 September/31 March 303,867 334,932
________ ________
9. Stock
Unaudited At Audited At
30 September 31 March
2004 2004
£000 £000
Development sites 43,293 46,236
Properties held as trading stock 24,701 24,018
________ ________
67,994 70,254
________ ________
Interest capitalised in respect of the development of sites is included in stock
to the extent of £2,251,000 (31.03.2004: £1,666,000). Interest capitalised
during the period in respect of development sites amounted to £1,283,000 (2003:
£475,000).
10. Current asset investments
Unaudited At Audited At
30 September 31 March
2004 2004
£000 £000
UK listed investments at cost 263 263
________ ________
263 263
________ ________
The market value of listed investments at 30 September 2004 was £315,000
(31.03.2004: £265,000).
11. Cash at bank and in hand
Unaudited At Audited At
30 September 31 March
2004 2004
£000 £000
Rent deposits and cash held at managing agents 6,211 2,575
Cash secured against debt and cash held at solicitors 8,784 1,121
Cash held to fund future development costs 360 1,517
Free cash 48,496 13,071
________ ________
63,851 18,284
________ ________
12. Financing and financial instruments
Unaudited At Audited At
30 September 31 March
2004 2004
£000 £000
Bank overdraft and loans - maturity
Due after more than one year 115,115 131,779
Due within one year 26,291 16,304
________ ________
141,406 148,083
________ ________
Gearing
Unaudited At Audited At
30 September 31 March
2004 2004
£000 £000
Total borrowings 141,406 148,083
Cash (63,851) (18,284)
________ ________
Net borrowings 77,555 129,799
________ ________
Adjusted net assets 275,028 248,721
Gearing 28% 52%
Fair value of financial assets and financial liabilities:
Unaudited Unaudited Audited Audited
At 30 At 30 At At
September September 31 March 31 March
2004 2004 2004 2004
£000 £000 £000 £000
Book Value Fair Value Book Value Fair Value
Borrowings 141,719 142,474 148,728 149,639
Interest rate swaps - 57 - 123
Other financial instruments - 961 - 1,848
________ ________ ________ ________
141,719 143,492 148,728 151,610
________ ________ ________ ________
The fair value of financial assets and financial liabilities represents the mark
to market valuations at 30 September 2004 and 31 March 2004. The adjustment to
net assets from a recognition of these values, net of tax relief, would be to
reduce diluted net asset value per share by 4p (31.03.2004: 7p).
13. Provision for liabilities and charges - deferred taxation
Deferred taxation provided for in the financial statements is set out below:
Unaudited At Audited At
30 September 31 March
2004 2004
£000 £000
Accelerated capital allowances 1,931 2,744
Less: - discount (281) (399)
________ ________
Discounted provision for deferred tax 1,650 2,345
________ ________
The Group has applied the provisions of FRS19 Deferred Tax, which requires that
deferred tax be recognised as a liability or asset if the transactions or events
that give the Group an obligation to pay more or less tax in the future have
occurred by the balance sheet date. In accordance with FRS19, the Group makes
full provision for timing differences other than revaluation gains and losses,
which are primarily in respect of capital allowances on plant and machinery,
industrial buildings' allowances and tax losses.
Amounts unprovided are:
Unaudited At Audited At
30 September 31 March
2004 2004
£000 £000
Unrealised capital gains 22,024 20,509
________ ________
22,024 20,509
________ ________
No provision has been made for taxation which would accrue if the investment
properties were sold at their revalued amounts. The adjustment to net assets
resulting from a recognition of these amounts would be to reduce diluted net
asset value per share by 76p (31.03.2004: 70p).
14. Share capital
Unaudited At Audited At
30 September 31 March
2004 2004
£000 £000
Authorised
- 688,954,752 ordinary shares of 5p each 34,448 34,448
________ ________
34,448 34,448
________ ________
Allotted, called up and fully paid
Attributable to equity interests:
- 27,156,525 ordinary shares of 5p each 1,358 1,357
________ ________
1,358 1,357
________ ________
In the period to 30 September 2004 530,000 ordinary 5p shares were purchased for
cancellation at an average cost of 843p per share.
Share options
At 30 September 2004 options over 1,874,323 (31 March 2004: 2,412,945) new
ordinary shares in the Company and 1,361,939 (31 March 2004: 1,361,939)
purchased shares held by the ESOP had been granted to directors and employees
under the Company's share option schemes. During the period no new options were
granted. Options over 538,622 shares were exercised.
15. Net assets per share
Number of p.p.s. Change since
Shares 31.03.2004
£000 000's + %
Net asset value ('NAV') 256,076 25,302 1,012 10.5
Add: potential exercise of options 8,566 1,874 (38)
________ ________ ______ ________
Diluted NAV 264,642 27,176 974 11.2
Adjustment for:
- capital allowances provided for
but unlikely to be clawed back 1,650 6
- ESOP investment in shares 14,051 1,855 (14)
________ ________ ______ ________
Adjusted diluted NAV 280,343 29,031 966 10.5
Adjustment for:
- potential capital gains unprovided for (22,024) (76)
- mark to market value of interest rate
hedging agreements (1,241) (4)
________ ________ ______ ________
Triple net NAV 257,078 29,031 886 11.2
________ ________ ______ ________
16. Reconciliation of operating profit to net cash flow from operating
activities
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
Operating profit 8,420 8,504 16,613
Depreciation of fixed assets 98 109 213
Release of provision against investments (442) (75) (133)
Profit on sale of fixed assets (19) 6 (9)
Amortisation of goodwill 32 50 65
Decrease/(increase) in debtors 4,166 (4,633) (580)
(Decrease)/increase in creditors (1,936) 123 74
Decrease/(increase) in stocks 3,543 (18,911) (27,325)
________ ________ ______
Net cash inflow/(outflow) from operating
activities 13,862 (14,827) (11,082)
________ ________ ______
17. Capital expenditure and financial investment
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
Purchase of property (8,857) (11,323) (22,906)
Sale of property 59,807 32,699 43,213
Purchase of fixed assets (109) (48) (141)
Sale of fixed assets 24 4 48
Sale of investments - (887) -
Purchase of investments (3,503) - (1,212)
________ ________ ______
47,362 20,445 19,002
________ ________ ______
18. Notes to the Interim Statement
The interim statement was approved by the Board of Directors on 17 November
2004. The foregoing financial information does not represent full accounts
within the meaning of S.240 of the Companies Act 1985, and has been reviewed but
not audited by the auditors, nor filed with the Registrar of Companies.
The results for the 12 months to 31 March 2004 are an abridged version of the
full accounts which received an unqualified auditor's report and have been filed
with the Registrar of Companies.
This statement is being sent to shareholders and will be available from the
Company's Registered Office at 11-15 Farm Street, London, W1J 5RS.
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