Interim Results
Helical Bar PLC
29 November 2006
29 November 2006
H E L I C A L B A R P L C
('Helical'/'Company')
I n t e r i m R e s u l t s
For the half year to 30 September 2006
HELICAL - STOCKING UP
• Profit before tax, excluding investment gains, of £10.8m (2005: £7.9m) -
up 37%
• Interim dividend of 1.60p per share (2005: 1.45p) - up 10%
• High levels of new transactions in joint venture to create new high margin
business
• Major planning gains at Liphook. Further retirement village sites acquired
• £65m of forward sales of 360 residential units at Milton Keynes and Cardiff
• Increased trading activity to bear fruit in 2007 and 2008
Commenting on the results, Giles Weaver, Chairman, said:
'The last six months have seen significant progress in many of our schemes and
further development of joint venture relationships. We are confident that
despite the anticipated easing of recent yield compression, our diversified,
value added, active management approach will create significant surpluses in the
foreseeable future.'
For 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
Half Year To Half Year To Year To
30 September 30 September 31 March
2006 2005 2006
Notes £m £m £m
Net rental income 6.7 8.2 16.5
Development profits 1.7 3.9 4.6
Trading profits 4.6 6.8 13.4
Joint ventures 1 3.3 0.3 0.4
Other gross profits 0.7 0.1 0.2
Profits before gains on investment
properties and taxation 10.8 7.9 13.5
Gain on investment properties 2 0.6 7.2 43.6
Profits before tax 11.4 15.1 57.1
pence pence pence
Basic earnings per share 11.1 21.4 54.7
Diluted earnings per share 10.5 20.5 51.8
Adjusted diluted earnings per share 3 7.5 6.0 8.5
Dividends per share
- ordinary dividend 1.60 1.45 3.65
Adjusted diluted net assets per share 1/4 283 231 278
£m £m £m
Value of investment portfolio 290.4 239.2 294.6
Net borrowings 132.1 77.5 112.7
Net assets 2 236.5 202.0 230.1
Net gearing 56% 38% 49%
Notes
1. The Group's share of the results of entities controlled equally by the
Group and its joint venture partners.
2. There has been no interim revaluation of the investment portfolio as
at 30 September 2006 (2005:nil)
3. After adding back deferred taxation arising from the clawback of
capital allowances on sale of investment properties, the deferred taxation
on the revaluation surpluses of the investment portfolio and the fair value
of financial instruments.
4. Excludes any surplus arising from a valuation of trading stock.
C h a i r m a n ' s S t a t e m e n t
Introduction
During the first six months Helical has made substantial progress on a number of
its existing schemes whilst continuing to identify and work on new high margin
business.
With yields at historic lows, the prospective return from holding conventional
property investments is likely to be much lower than in recent years. However,
we continue to find value in a variety of specialist niches including gaining
change of use, mixed use development, retirement village schemes and industrial
units built for freehold sales. Acting as lead partner in a series of joint
ventures, our growing pipeline is sourced by using partners hand picked for the
quality of their execution in their specialist fields. We believe this model
will be the key to outperformance as the benign impact of yield shift fades.
At Liphook, Hampshire, we have obtained planning permission for a retirement
village. Rather than selling the site for a gain of over £10m we intend to
retain it and expand our involvement in this sector by building up a portfolio
of such villages in Hampshire, Warwickshire, Cambridgeshire and other areas.
At C4.1 Milton Keynes, forward sales to J. Sainsbury plc, KingsOak and Genesis
exceed £100m. These sales enable us to recognise profit on this mixed use
development.
During the period, we also sold five assets which we had either owned or
developed with one of our specialist joint venture partners. These have all
generated returns over cost of at least 25%.
Lettings at our retail and mixed use developments in Luton, Cardiff and Wroclaw
and Gliwice in Poland and office developments in Central London will all
generate healthy surpluses in the foreseeable future.
Our industrial schemes at Oxford, Kidlington, Southall, Southampton and Hailsham
are all expected to contribute to profitability in 2007 and 2008. Meanwhile our
involvement in outsourcing through The Asset Factor is making encouraging
progress.
Results
The results, excluding investment gains, for the first six months to 30
September 2006 are up 37% to £10.8m (2005: £7.9m) on the comparative period last
year with lower levels of finance costs and administrative costs exceeding the
fall in operating profit.
Profits before tax, including investment gains, were £11.4m (2005: £15.1m). Net
rental income for the period was £6.7m (2005: £8.2m). Trading profits of £4.6m
(2005: £6.8m) and development profits of £1.7m (2005: £3.9m) augmented the gain
on the sale of investment properties of £0.6m (2005:£7.2m). Profit from joint
ventures contributed £3.3m (2005: 0.3m). Administration costs fell by 18% to
£6.0m (2005:£7.4m) and net financing costs fell by 94% to £0.3m (2005:£4.1m).
Diluted earnings per share were 10.5p (2005: 20.5p) and adjusted earnings per
share were 7.5p (2005: 6.0p).
Basic net assets per share rose to 265p per share (31 March 2006: 259p) and the
fully diluted net assets per share adjusted for the add back of the deferred tax
provision rose to 283p per share (31 March 2006: 278p).
There has been no interim revaluation of the investment portfolio as at 30
September 2006.
Financing
Purchases of trading and development stock of £29m have contributed to an
increase in net debt to £132.1m. Gearing has increased to 56% from 49% at 31
March 2006.
Outlook
As indicated in our 2006 accounts our business model is not consistent with the
requirements of the REIT legislation and Helical will not convert to REIT status
in 2007. However, we continue to believe that our model is robust enough to
outperform our REIT peers.
The last six months have seen significant progress in many of our schemes and
further development of joint venture relationships. We are confident that
despite the anticipated easing of recent yield compression, our diversified,
value added, active management approach will create significant surpluses in the
foreseeable future.
Giles Weaver
Chairman
29 November 2006
Helical Property Portfolio
A complete list of the group's ongoing projects is noted under Ongoing Projects
below. Highlights during the half year to 30 September 2006 are as follows:
Milton Keynes
At C4.1, Milton Keynes, our 50:50 joint venture with Abbeygate Developments has
successfully forward sold 300 residential units to KingsOak, a subsidiary of
Barratt Developments Plc. Forward sales on this mixed use development now
exceed £100m following the earlier sale of a 110,000 sq ft supermarket to J.
Sainsbury plc and social housing sale to Genesis. Completion of this scheme is
due in 2008.
Weston-super-Mare
At Weston-super-Mare we have completed a new 29,000 sq ft retail warehouse which
we have pre-let to Wickes and forward sold to Scottish Widows for £7.66m.
Morgan Department Store, Cardiff
The refurbishment of the Morgan Department Store, Cardiff is proceeding and the
retail element of the scheme is due to complete before Christmas with 80%
pre-let to Borders, TK Maxx, Moss Bros and Rossiters. In the meantime all 56
residential apartments were sold on the first day of their launch for just under
£11m with completion in Summer 2007.
Leisure Plaza, Milton Keynes
A resolution to grant planning consent has been gained for our scheme with
Abbeygate Developments at the Leisure Plaza, Milton Keynes. This mixed use
scheme comprises a new 150,000 sq ft retail store for ILVA, a refurbishment of
the existing ice rink and a further 100,000 sq ft of leisure and retail uses.
Hatters Retail Park, Luton
In Luton our 80,000 sq ft retail scheme is under construction and is due to be
completed in Spring 2007. Tenants include DFS, Carpetright, Paul Simon, Harveys
and SCS and the development is almost 90% pre-let. The completed development
will be sold and the company is in discussions with potential purchasers.
St Austell
During the six months to 30 September 2006 we sold our retail warehouse at St.
Austell for £7.55m plus a top-up payment due on settlement of the outstanding
rent review with Homebase. The property was acquired for £4.37m in 2002.
Worthing
Our Wickes retail warehouse was sold during the half year for £7.25m having been
bought for £4.32m in 2003.
Freehold industrial developments
The company continued to make progress on its freehold industrial developments
by selling units at Cowley, Oxford and Sawston, Cambridge. A 145,000 sq ft
industrial unit at Sandiacre, Nottingham was sold to a supermarket operator.
Further industrial sites at Southall, Watford, Southampton, Stockport, Hailsham
and Whitstable have been acquired which are to be redeveloped/refurbished and
sold.
Retirement villages
The planning success at Liphook, Hampshire where, after five years of
negotiation, the site was given consent for a retirement village of 150 units,
has prompted the company to expand its activity within this sector. Further
sites at Great Alne, Warwickshire and Milton, Cambridge have been acquired with
a view to developing retirement villages at each site. Helical will retain a
core central facility as a long term investment.
Central London
Riverside House
At Riverside House, London EC4 we have a development management role on a
300,000 sq ft development pre-let to Man Group. This development is due to
start in 2007.
Ropemaker Place
Helical has a Development Management Agreement with British Land who have now
commenced piling on site. The Agreement provides for a fixed fee and a profit
share dependent upon outcome.
Mitre Square
Good progress is being made first in completing negotiations with the City of
London on the S.106 Agreement and second on completing the site acquisition.
The project is planned to start on site in 2008.
White City
Preparations are now well advanced for the submission of an outline planning
application based on the masterplan prepared by Rem Koolhaas's Office of
Metropolitan Architecture with both an Environmental Impact Assessment and
Transport Assessment under way. The planning application will be for a major
mixed use regeneration comprising circa 5m sq ft and will be submitted in 2007.
Helical, jointly with Morley, are one of the major landowners and are appointed
to lead the landowning consortium.
Outsourcing
The Asset Factor
Since its launch at the end of 2005 The Asset Factor has established The Asset
Factor Business Services and Space 2, two new joint ventures adding supply chain
services and short term management to the existing property and facilities
management team. The Asset Factor is in negotiation with a number of major
organisations regarding the provision of integrated property asset and lease
liability management solutions. Over the period The Asset Factor has worked for
the University of Westminster on its London property strategy and partnered with
BT to undertake certain property aspects of key Local Authority outsourcing
deals.
Ongoing Projects
Mixed use Description Helical
Developments share
Morgan Department • 160,000 sq ft retail - 100%
Store, Cardiff Borders, TK Maxx,
Moss Bros. Completion
December 2006
• 55 flats, all sold.
Completion 2007
Trinity Square, • 200,000 sq ft retail - Borders, TK 65%
Nottingham Maxx,
Dixons
• 700 student units
• Forward sold to
Morley for over £100m
• Completion 2007
C4.1, Milton Keynes • 110,000 sq ft Sainsbury's (forward 50%
sold)
• 440 residential units (forward sold)
• Completion 2008
White City, London • Planning consent to be Consortium
W12 sought for 5 million landowner &
sq ft of commercial development
and residential on manager
43 acres
Amen Corner, • Land and options 50 to 100%
Bracknell held for a gateway
office development
off A329M
Bluebrick, • 11 acre site. 50%
Wolverhampton Individual land sales
completed for 208
flats, 20,000 sq ft
showroom, 88 bed
hotel, 7,000 sq ft pub
• A casino use is
proposed for the
remaining listed building
Ropemaker Park, • 70,000 sq ft light 50%
Hailsham industrial, 27,000
sq ft trade counter,
12,000 sq ft car
showroom, 4,000
sq ft convenience
store and 4,000
sq ft creche
• Construction started
2006
Leisure Plaza, • Resolution to grant 50%
Milton planning consent for
Keynes 165,000 sq ft ILVA
store, 65,000 sq ft
casino, 50,000 sq ft
ice rink, plus a further
25,000 sq ft of retail
Tiviot Way, • A planning application 80%
Stockport will be submitted
in 2007 for 100,000
sq ft industrial, 49,000
sq ft trade counter,
20,000 sq ft self
storage, 20,000 sq ft
builders merchant
and car showroom
Parkgate, Shirley, • 200,000 sq ft retail 50%
Birmingham - Asda (80,000 sq ft supermarket)
• 200 residential units
• Construction to
commence 2007
Hagley Road West, • 16,000 sq ft retail 75%
Edgbaston, plus 15 residential
Birmingham units
• Demolition imminent
Commerce House, • 2 retail units plus 33 50%
Letchworth retirement flats
• Construction to
commence early 2007
Office Description Helical
Developments share
Mitre Square, London • 350,000 sq ft 50%
EC3 • Due to start on
site 2007/8
Riverbank House, • 300,000 sq ft pre-let Development
London EC4 to Man Group Management
• Due to start on role
site 2007
Ropemaker Place, • 500,000 sq ft of Development
London EC2 offices Management
• Construction started role
2006
Clareville House, • Refurbishment of Development
London SW1 35,000 sq ft offices Management
plus 23,000 sq ft role
of restaurant,
nightclub and retail
• Start on site March
2007
Battersea Studios, • Refurbishment of 50%
London SW8 55,000 sq ft of
media style
studio offices
completed 2006
• Planning consent
gained for 40,000
sq ft new build
Forestgate, • Refurbishment of 75%
Crawley 24,000 sq ft
completed
• Scheme for two
new buildings
of 21,000 sq ft
and 18,000 sq ft
Amberley Court, • Partial refurbishment 90%
Crawley of 31,000 sq ft
• Office campus
Industrial Description Helical
developments share
Watlington Road, • 71,000 sq ft of 80%
Cowley, Oxford industrials and
offices of which
25,000 sq ft of
offices sold and
26,000 sq ft of
industrials sold
or under offer
Longford Lane, • 140,000 sq ft of 80%
Kidlington industrial units
for freehold sales
• Construction started
2006
Scotts Road, Southall, • 250,000 sq ft of 80%
West London industrial units for
freehold sales
• Construction to
commence 2007
Southampton • 50,000 sq ft of 80%
industrial units,
65,000 sq ft of
trade counters,
20,000 sq ft of
self storage to
commence 2007
plus a further 4
acres of industrial land
Retail Description Helical
developments share
Hatters Retail Park, • 80,000 sq ft 80%
Luton retail warehouse -
DFS, SCS,
Carpetright, Harveys,
Paul Simon
• Completion 2007
• 25,000 sq ft
industrial to rear
Gliwice, Poland • 500,000 sq ft out 50%
of town retail
• construction to
commence 2007/08
Wroclaw, Poland • 100,000 sq ft 50%
out of town retail
• construction due to
commence 2007
Retirement Description Helical
Village share
Developments
Lime Tree Village, • 154 bungalows, 33%
Rugby cottages and
apartments being
constructed in
phases
• 82 sold to date
Bramshott Place, • Planning consent 90%
Liphook granted in 2006
for 144 units resulting
in an increase of
over £10 million in
site value
• Construction to
commence 2007
Projects with Description Helical
change of use share
potential
Maudslay Park, • 314,000 sq ft 90%
Great Alne industrial estate
on a 20 acre site
with a planning
application for
175 retirement
home units
Waterside, Fleet • 54,000 sq ft of 75%
industrial property
on 5 acres with
planning application
for 250 residential
units
Upper High Street, • Site with residential 100%
Epsom consent subject to
a planning appeal
for an 80,000 sq ft
supermarket
Ely Road, Milton, • 32,000 sq ft 90%
Cambridge of industrial on
20 acres
• Planning application
to be submitted in
2007 for 120 unit
retirement village
Thanet Way, • 80,000 sq ft of 90%
Whitstable industrial on 6 acres
with potential for
mixed use development
Winterhill, Milton • 28,000 sq ft of 50%
Keynes warehouses and
offices with retail
warehouse or trade
counter potential
Cardiff Royal • Vacant hospital 75%
Infirmary on a peppercorn
lease with residential
potential
Income producing
assets
Offices Description Helical
share
Rex House, Lower • 80,000 sq ft office 100%
Regent Street, building refurbished
London SW1 in 2001
• Short leasehold
expiring 2035
• Acquired vacant in
2000
Shepherds Building, • 150,000 sq ft of 90%
Shepherds Bush, studio offices
London W14 refurbished in
2001 and let to
over 50 tenants
• Acquired vacant in 2000
61 Southwark • 66,000 sq ft of 100%
Street, London offices that have
SE1 been subject to a
rolling refurbishment
and a new penthouse
floor
• Acquired 1998
Retail - in town Description Helical
share
Morgan & Royal • 55 units to be subject 100%
Arcades, Cardiff to intensive management
on completion of the
adjoining development
at the David Morgan
Department Store
• Acquired 2005
Garden Square, • 150,000 sq ft shopping 95%
Letchworth centre acquired in 2003
• Rental values increased
from £35 psf to £65 psf
Zone A during ownership
1-5 Queens Walk, • 37,000 sq ft of retail 87%
East Grinstead opposite a proposed
new retail scheme
• Acquired 2005
Glasgow Portfolio • six small unit shop 100%
investments and part
of a multi-let office block,
all in Glasgow City
Centre
• acquired 2005
Retail - out of Description Helical
town share
Otford Road Retail • 43,000 sq ft with open 75%
Park, Sevenoaks A1 consent let to Wickes,
Currys and Carpetright
• Acquired 2003
Stanwell Road, • 32,000 sq ft Focus 75%
Ashford DIY store
• Acquired 2004
215 Brixham Road, • 24,000 sq ft Focus 67%
Paignton store with open A1
consent
• Acquired 2005
Industrial Description Helical
share
Hawtin Park, • 251,000 sq ft estate, 100%
Blackwood part vacant
• Acquired 2003
Westgate, Aldridge • 208,000 sq ft part 75%
vacant
• Acquired 2006
Dales Manor, • 188,000 sq ft 67%
Sawston, Cambridge multi-let estate
• Acquired 2003
Golden Cross, • 102,000 sq ft unit 100%
Hailsham let on a long RPI lease
• Acquired 2001
Standard Industrial • 50,000 sq ft estate, 60%
Estate, North recently refurbished
Woolwich • Acquired 2002
Bushey Mill Lane, • 24,000 sq ft income 80%
Watford producing with
development potential
• acquired 2006
Properties sold / Description Helical
projects completed share
during half year
Worthing • 26,000 sq ft Wickes 75%
sold for 69% above
2003 purchase price
St Austell • 36,000 sq ft Homebase 75%
sold with a top-up
payment on outstanding
review
• Anticipated proceeds
circa 100% above
2002 purchase price
Weston-super-Mare • 29,000 sq ft retail 75%
warehouse development
prelet to Wickes and
presold to Scottish
Widows
• Completed 10/06
• Profit over 40% on
cost
Sandiacre, • 145,000 sq ft industrial 75%
Nottingham sold to Tesco for
potential supermarket
development
• 32% profit on cost
over one year
Sawston, • Final sales completed 67%
Cambridge of 65,000 sq ft of
offices and industrial
units developed for
freehold sales
• 25% profit on cost
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 2006 which comprises the consolidated income
statement, the consolidated balance sheet, the consolidated cash flow statement,
the consolidated statement of recognised income and expense and the related
notes 1 to 19. We have read the Chairman's Statement and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
This report is made solely to the Company, in accordance with guidance 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 them 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
conclusions 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 Listing
Rules of the Financial Services Authority 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. This interim report has been prepared in
accordance with International Accounting Standard 34 'Interim Financial
Reporting'.
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
International Standards on Auditing (UK and Ireland) 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 2006.
Grant Thornton UK LLP
Chartered Accountants
London
29 November 2006
Unaudited Consolidated Income Statement
For the half year to 30 September 2006
Half Year To Half Year To Year To
30 September 30 September 31 March
2006 2005 2006
Notes £000 £000 £000
Revenue 2 51,644 52,394 119,274
Net rental income 3 6,748 8,229 16,524
Trading profits 4,634 6,813 13,441
Development profits 1,681 3,866 4,594
Share of results of joint ventures 3,280 324 437
Other operating income 737 140 235
Gross profit before gain on
investment properties 17,080 19,372 35,231
Gain on sale and revaluation of
investment properties 4 644 7,245 43,551
Gross profit 17,724 26,617 78,782
Administrative expenses (6,010) (7,354) (16,582)
Operating profit 11,714 19,263 62,200
Finance costs 5 (1,784) (5,303) (7,421)
Finance income 1,124 330 1,295
Change in fair value of derivative
financial instruments 395 834 1,046
Profit before tax 11,449 15,124 57,120
Tax 6 (1,227) 3,069 (9,676)
Profit after tax 10,222 18,193 47,444
- attributable to minority interests 342 (124) (124)
- attributable to equity
shareholders 9,880 18,317 47,568
Profit for the year 10,222 18,193 47,444
Earnings per 1p share 7
Basic 11.1p 21.4p 54.7p
Diluted 10.5p 20.5p 51.8p
Adjusted 7.5p 6.0p 8.5p
Unaudited Consolidated Balance Sheet
At 30 September 2006
At At At
30 September 30 September 31 March
2006 2005 2006
Notes £000 £000 £000
Non-current assets
Investment properties 8 290,401 239,210 294,583
Owner occupied property, plant and
equipment 438 471 489
Investment in joint ventures 3,575 2,519 295
Goodwill 68 182 68
294,482 242,382 295,435
Current assets
Land, developments and trading
properties 9 115,489 71,043 86,076
Available-for-sale investments 10 72 82 66
Trade and other receivables 11 38,893 38,200 33,925
Cash and cash equivalents 12 4,535 31,230 10,135
158,989 140,555 130,202
Total assets 453,471 382,937 425,637
Current liabilities
Trade payables and other payables 13 (57,008) (52,624) (49,506)
Tax liabilities (6,255) (6,318) (3,394)
Borrowings 14 (23,273) (4,286) (42,683)
(86,536) (63,228) (95,583)
Non-current liabilities
Borrowings 14 (113,370) (104,404) (80,160)
Derivative financial instruments (216) (823) (610)
Deferred tax provision 6 (16,644) (12,266) (19,005)
Obligation under finance leases (180) (182) (182)
(130,410) (117,675) (99,957)
Total liabilities (216,946) (180,903) (195,540)
Net assets 236,525 202,034 230,097
Unaudited Consolidated Balance Sheet
At 30 September 2006
At At At
30 September 30 September 31 March
2006 2005 2006
Notes £000 £000 £000
Equity
Called-up share capital 18 1,216 1,204 1,209
Share premium account 18 42,520 42,052 42,490
Revaluation reserve 18 63,326 41,910 64,820
Capital redemption reserve 18 7,478 7,467 7,478
Other reserves 18 291 291 291
Retained earnings 18 130,154 112,704 120,948
Investment in own shares 18 (8,802) (7,139) (7,139)
Equity attributable to equity holders
of the parent 236,183 198,489 230,097
Minority interests 342 3,545 -
Total equity 236,525 202,034 230,097
Net assets per share
Basic 19 265p 225p 259p
Diluted 19 260p 219p 253p
Adjusted diluted 19 283p 231p 278p
Unaudited Consolidated Cash Flow Statement
For the half year to 30 September 2006
Half Year To Half Year To Year To
30 September 2006 30 September 2005 31 March 2006
Cash flows from operating activities
Operating profit 11,714 19,263 62,200
Depreciation 88 87 179
Gain on investment properties (644) (7,245) (43,551)
Other non-cash items (3,678) (409) (454)
Cash flows from operations before changes in
working capital 7,480 11,696 18,374
Change in trade and other receivables (4,670) 1,904 3,232
Change in land, developments and trading properties (27,521) 25,826 11,989
Change in trade and other payables 6,537 (22,743) (30,779)
Cash used in/generated from operations (18,174) 16,683 2,816
Finance costs (3,492) (6,849) (10,256)
Finance income 730 330 1,295
Minority interest dividends paid - - (3,545)
Dividends from joint ventures - - 2,337
Tax paid (199) (424) (4,743)
(2,961) (6,943) (14,912)
Cash flows from operating activities (21,135) 9,740 (12,096)
Cash flows from investing activities
Purchase of investment property (10,062) (15,909) (39,055)
Sale of investment property 15,124 55,353 65,991
Purchase of shares by ESOP (1,663) (175) (85)
Purchase of investments (3,264) - -
Sale of investments 3,828 - -
Sale of plant and equipment 13 - 47
Purchase of plant and equipment (45) (18) (140)
3,931 39,251 26,758
Cash flows from financing activities
Issue of shares 37 2,976 3,418
Borrowings drawn down 29,448 13,555 35,146
Borrowings repaid (15,564) (58,178) (65,647)
Equity dividends paid (2,174) (1,831) (3,127)
Return of cash - B share repurchase - (2,451) (2,451)
Refinancing costs (143) (35) (69)
11,604 (45,964) (32,730)
Net (decrease)/increase in cash and cash (5,600) 3,027 (18,068)
equivalents
Cash and cash equivalents at
1 April 2006 10,135 28,203 28,203
Cash and cash equivalents at 30
September 2006 4,535 31,230 10,135
Unaudited Consolidated Statement of Recognised Income and Expense
For the half year to 30 September 2006
Half Year To Half Year To Year To
30 September 30 September 31 March
2006 2005 2006
£000 £000 £000
Profit for the year 10,222 18,193 47,444
Fair value movements on available-for-sale investments 6 - (14)
Total recognised income and expense
for period 10,228 18,193 47,430
- attributable to equity shareholders 9,886 18,317 47,554
- attributable to minority interest 342 (124) (124)
10,228 18,193 47,430
Unaudited Notes to the Interim Statement
1. Financial Information
The financial information contained in this statement does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985.
The full accounts for the year ended 31 March 2006, which were prepared under
International Financial Reporting Standards and which received an unqualified
report from the Auditors, and did not contain a statement under s237(2) or (3)
of the Companies Act 1985, have been filed with the Registrar of Companies.
The interim statement has been prepared in accordance with IAS 34 Interim
Financial Reporting. The principal accounting policies have remained unchanged
from the prior financial period to 31 March 2006.
The interim statement was approved by the Board on 28 November 2006 and is being
sent to shareholders and will be available from the Company's registered office
at 11-15 Farm Street, London W1J 5RS and on the Company's website at
www.helical.co.uk.
2. Revenue
Half Year To Half Year To Year To
30 September 30 September 31 March
2006 2005 2006
£000 £000 £000
Rental income 8,102 10,135 20,102
Trading property sales 20,378 30,694 72,101
Developments 19,164 11,356 26,756
Other income 4,000 209 315
51,644 52,394 119,274
3. Net rental income
Half Year To Half Year To Year To
30 September 30 September 31 March
2006 2005 2006
£000 £000 £000
Gross rental income 8,102 10,135 20,102
Rents payable (54) (307) (489)
Other property outgoings (1,300) (1,599) (3,089)
Net rental income 6,748 8,229 16,524
4. Gain on sale and revaluation of investment properties
Half Year To Half Year To Year To
30 September 30 September 31 March
2006 2005 2006
£000 £000 £000
Net proceeds from the sale of investment
properties 15,124 55,353 65,992
Book value (14,475) (48,108) (57,565)
Lease incentive and letting costs
adjustment (5) - (609)
Gain on sale of investment properties 644 7,245 7,818
Revaluation gains on investment properties - - 35,733
Gain on sale and revaluation of investment properties 644 7,245 43,551
5. Finance costs
Half Year To Half Year To Year To
30 September 30 September 31 March
2006 2005 2006
£000 £000 £000
Interest payable on bank loans and overdrafts 3,730 4,483 7,638
Other interest payable and similar charges 120 2,046 2,346
Finance arrangement costs 59 169 234
Interest capitalised (2,125) (1,395) (2,797)
Finance costs 1,784 5,303 7,421
6. Tax
Half Year To Half Year To Year To
30 September 30 September 31 March
2006 2005 2006
£000 £000 £000
The tax charge is based on the profit for
the period and represents:
United Kingdom corporation tax at 30%
(2005: 30%)
- group corporation tax 3,588 2,411 5,983
Current tax charge 3,588 2,411 5,983
Deferred tax - capital allowances 66 (688) (804)
- other timing differences (121) 248 (872)
- revaluation surpluses (2,306) (5,040) 5,369
Deferred tax (2,361) (5,480) 3,693
Tax on profit on ordinary activities 1,227 (3,069) 9,676
Deferred tax provision
Capital gains 18,621 9,644 20,927
Capital allowances 2,241 1,417 2,175
Other temporary differences (4,218) 1,205 (4,097)
Deferred tax provision 16,644 12,266 19,005
Under IAS 12, deferred tax provisions are made for the tax that would
potentially be payable on the realisation of investment properties and other
assets at book value.
If upon sale of the investment properties the group retained all the capital
allowances, the deferred tax provision in respect of capital allowances of £2.2m
would be released and further capital allowances of £14.8m would be available to
reduce future tax liabilities. The provision in respect of capital gains has
been reduced by indexation.
7. 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 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.
Half Year To
30 September 2006
Weighted average Per share
Earnings no of shares Amount
£000 000 pence
Basic earnings per share 9,880 89,297 11.1
Dilutive effect of share options 4,368
Diluted earnings per share 9,880 93,665 10.5
Adjustments
- gain on investment properties (644)
- deferred tax on revaluation surpluses (2,306)
- deferred tax on capital allowances 66
Adjusted earnings per share 6,996 93,665 7.5
Half Year To
30 September 2005
Weighted average Per share
Earnings no of shares amount
£000 000 pence
Basic earnings per share 18,317 85,716 21.4
Dilutive effect of share options 3,512
Diluted earnings per share 18,317 89,228 20.5
Adjustments
- gain on investment properties (7,245)
- deferred tax on revaluation surpluses (5,040)
- deferred tax on capital allowances (688)
Adjusted earnings per share 5,344 89,228 6.0
8. Investment properties
Valuation Cost
£000 £000
At 1 April 2006 294,583 209,529
Additions 10,452 10,452
Disposals (14,475) (10,675)
Transfer to trading stock (157) (157)
Amortisation of short leasehold (2) -
As at 30 September 2006 290,401 209,149
All properties are stated at market value as at 31 March 2006, as adjusted for
additions and disposals in the half year to 30 September 2006. Interest
capitalised in respect of investment properties at 30 September 2006 amounted to
£1,703,000 (31 March 2006: £1,313,000). Interest capitalised during the period
in respect of investment properties was £390,000.
9. Land, developments and trading properties
At At
30 September 31 March
2006 2006
£000 £000
Development sites 45,047 40,568
Properties held as trading stock 70,442 45,508
115,489 86,076
The directors' valuation of trading and development stock showed a surplus of
£29m above book value at 31 March 2006.
Interest capitalised in respect of the development of sites is included in stock
to the extent of £3,567,000 (31 March 2006: £2,867,000). Interest capitalised
during the period in respect of development sites amounted to £1,735,000.
10. Available-for-sale investments
At At
30 September 31 March
2006 2006
£000 £000
UK listed investments at fair value 72 66
72 66
11. Trade and other receivables
At At
30 September 31 March
2006 2006
£000 £000
Trade receivables 20,085 13,156
Other receivables 6,098 5,999
Prepayments and accrued income 12,710 14,770
38,893 33,925
12. Cash and cash equivalents
At At
30 September 31 March
2006 2006
£000 £000
Rent deposits and
cash held at managing agents 3,042 1,980
Cash secured against debt
and cash held at solicitors 670 189
Cash held to fund future development costs 390 382
Cash deposits 433 7,584
4,535 10,135
13. Trade payables and other payables
At At
30 September 31 March
2006 2006
£000 £000
Trade creditors 17,661 8,424
Other payables 7,126 7,372
Accruals and deferred income 32,221 33,710
57,008 49,506
14. Borrowings
At At
30 September 31 March
2006 2006
£000 £000
Bank overdraft and loans - maturity
Due within one year 23,273 42,683
Due after more than one year 113,370 80,160
136,643 122,843
At At
30 September 31 March
2006 2006
Gearing £000 £000
Total borrowings 136,643 122,843
Cash (4,535) (10,135)
Net borrowings 132,108 112,708
Net assets 236,525 230,097
Gearing 56% 49%
15. Share capital
At At
30 September 31 March
2006 2006
£000 £000
Authorised 39,577 39,577
39,577 39,577
The authorised share capital of the Company is
£39,576,626.60 divided into ordinary shares of 1p each,
5.25p convertible cumulative redeemable preference shares
2012 of 70p each and deferred shares of 1/8p each
Allotted, called up and fully paid
- 95,060,612 ordinary shares of 1p each 951 944
- 212,145,300 deferred shares of 1/8 p each 265 265
1,216 1,209
As at 1 April 2006 the Company had 94,371,925 ordinary 1p shares in issue. On
30 June 2006 options over 654,792 ordinary 1p shares were exercised. On 29
September 2006 options over 33,895 ordinary 1p shares were exercised increasing
the issued share capital of the Company to 95,060,612 ordinary 1p shares.
Share options
At 30 September 2006 unexercised options over 2,764,405 (31 March 2006:
3,655,510) new ordinary 1p shares in the Company and 6,209,695 (31 March 2006:
6,234,695) purchased ordinary 1p 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.
16. Dividends
Half Year To Half Year To Year To
30 September 30 September 31 March
2006 2005 2006
£000 £000 £000
Attributable to equity share capital
Ordinary
- interim paid 1.45p per share - - 1,296
- prior period final paid 2.45p
(2005: 2.20p) per share 2,174 1,831 1,831
2,174 1,831 3,127
The interim dividend of 1.60p (30 September 2005: 1.45 pence per share) was
approved by the board on 28 November 2006 and will be paid on 29 December 2006
to shareholders on the register on 8 December 2006. This interim dividend,
amounting to £1,423,000 has not been included as a liability as at 30 September
2006.
17. Investment in own shares
Following approval at the 1997 Annual General Meeting the Company established
the Helical Bar Employees' Share Ownership Plan Trust (the 'Trust') to be used
as part of the remuneration arrangements for employees. The purpose of the
Trust is to facilitate and encourage the ownership of shares by or for the
benefit of employees by the acquisition and distribution of shares in the
Company.
The Trust purchases shares in the Company to satisfy the Company's obligations
under its Share Option Schemes and Performance Share Plan.
At 30 September 2006 the Trust held 6,092,131 (31 March 2006: 5,648,080)
ordinary shares in Helical Bar plc.
At 30 September 2006 options over 6,209,695 (31 March 2006: 6,234,695) ordinary
shares in Helical Bar plc had been granted through the Trust. At 30 September
2006 awards over 5,960,575 (31 March 2006: 4,514,380) ordinary shares in Helical
Bar plc had been made under the terms of the Performance Share Plan.
18. Statement of Changes in Equity
Capital Investment
Share Share Revaluation redemption Other Retained in own
capital premium reserve reserve reserves earnings shares Total
£000 £000 £000 £000 £000 £000 £000 £000
At 1 April 2006 1,209 42,490 64,820 7,478 291 120,948 (7,139) 230,097
Total
recognised
income - - - - - 10,228 - 10,228
Dividends
paid - - - - - (2,174) - (2,174)
Revaluation
surplus - - 2,306 - - (2,306) - -
Realised on
disposals - - (3,800) - - 3,800 - -
Minority
interest - - - - - (342) - (342)
Issue of
shares 7 30 - - - - - 37
Purchase of
shares - - - - - - (1,663) (1,663)
Performance
share plan - - - - - 4,551 - 4,551
Provision
For ESOP
purchase - - - - - (4,551) - (4,551)
At 30 Sept.
2006 1,216 42,520 63,326 7,478 291 130,154 (8,802) 236,183
The adjustment to retained earnings of £4,551,000 adds back the share based
payments charge, net of tax, in accordance with IFRS 2 Share Based Payments.
The Group has made a provision of £4,551,000 in respect of future purchases of
shares by the ESOP in anticipation of the vesting of share awards under the
Group's Performance Share Plan.
19. Net assets per share
30 September
30 September *Number of 2006
2006 shares pence
£000 000's per share
Shareholders' funds 236,183 88,968
Less: deferred shares (265) -
Basic net asset value 235,918 88,968 265
Add: unexercised share options 2,717 2,764
Diluted net asset value 238,635 91,732 260
Adjustment for
- deferred tax on capital allowances 2,241
- deferred tax on capital gains 18,621
- fair value of financial instruments 151
Adjusted diluted net asset value 259,648 91,732 283
The net asset values per share exclude any surplus from a valuation of trading
stock.
* Excludes 6,092,131 shares held by the Company's Employee Share Ownership Plan
Trust.
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