Final Results

RNS Number : 3085Z
Town Centre Securities PLC
17 September 2015
 

For immediate release                                                                 

Thursday 17 September 2015

 

TOWN CENTRE SECURITIES PLC

Final results for the year ended 30 June 2015

STRONG RETURNS DELIVERED THROUGH INTENSIVE ASSET MANAGEMENT

Town Centre Securities PLC ("TCS"), the Leeds based property investment and car parking company, today announces its audited final results for the year ended 30 June 2015.

Financial highlights

·     Net assets per share up 11.7% at 344p (2014: 308p)

·     Dividend 1.16 times covered, total dividend per share 10.44p (2014: 10.44p); proposed final dividend unchanged at 7.34p (2014: 7.34p)

·     Statutory profit before tax of £24.0m (2014: £27.4m) and statutory earnings per share of 45.1p (2014: 51.6p)

·     Underlying profit before tax* of £6.5m (2014: £7.6m) following planned disposals as part of capital recycling programme

·     Underlying earnings per share* of 12.1p (2014: 14.4p)

·     Total shareholder return of 19.1% (2014: 49.3%) and total property return of 12.2% (2014: 14.1%)

·     New £35m bank facility agreed at 50bp reduction in margin

*Excluding valuation movement and property disposal profits

Operating Performance

·     Total property return of 12.2% (2014: 14.1%) has out-performed IPD in all comparable categories

·     Like for like passing rent up 2.5% to £18.3m

·     Estimated Rental Value ('ERV') up 8% to £21.6m mainly due to Merrion House deal and acquisitions

·     Like for like ERV up 2.8%

·     Like for like property valuation increase of 7.1% (2014: 10.0%); initial yield of 5.8% (2014: 6.7%) and reversionary yield of 6.8% (2014: 7.4%)

·     Occupancy remains high at 96% (2014: 97%)

Operational highlights

·     Active capital recycling through

Sales of properties at Apperley Bridge and Victoria Gate for total consideration of £9.7m, exit yield 3.3%

Four property acquisitions at a net initial yield of 5.1% for a total cost of £11.3m

Sale of Goodramgate, York for £3.55m completed in August 2015, exit yield 6.24%

 

·     Good progress with Merrion Centre enhancements

Morrisons re-fit and extension nearing completion, trading well

Merrion House 50/50 JV with Leeds City Council now established and property transferred

Merrion Hotel Franchise agreements signed with Ibis Styles and Marco Pierre White

Arena Quarter now 80% let

 

·     Waitrose, Milngavie development completed and open for trading with £3.3m development surplus

·     Completed the redevelopment of Albion Place, Leeds replacing Austin Reed with a Sainsbury's store

·     Marketing a 91 unit residential scheme in Piccadilly basin, Manchester

·     Purchased, refurbished and let a retail/office investment in Duke Street, London

·     Added five new branches to our Citipark car parking portfolio, increasing total spaces by 81% to 5,200

·     Two new Non-executive Directors, Ian Marcus and Paul Huberman appointed 1 January 2015 and Ben Ziff appointed 17 September 2015

 

Commenting on the results, Chairman and Chief Executive Edward Ziff, said:

 

"Retail valuations have continued to rise in the regions and we expect this to continue as the economic backdrop continues to improve. The letting market remains competitive but we continue to find opportunities to increase income in all areas of our portfolio and over the next couple of years our income will benefit from the transactions we have already concluded. This is particularly so in the Merrion Centre where the Merrion House deal is now underway. We intend to increase portfolio sales and purchase activity this year.

We will continue our car park acquisitions programme as we have already seen this contributing positively to our profits.

We will also complete our bank facility renewal; the banking panel has improved and we expect to achieve a reduced margin and subsequent reduction in average borrowing cost.

Overall we look forward with confidence and are encouraged by the many profitable opportunities that we have to deliver attractive shareholder returns".

 

For further information, please contact:

 

Town Centre Securities PLC                                        www.tcs-plc.com

Edward Ziff, Chairman and Chief Executive         0113 222 1234

Duncan Syers, Finance Director

                 

MHP Communications 

Reg Hoare / Gina Bell                                                     020 3128 8100

 

 

Chairman and Chief Executive's Statement

We have had another good year with Total Shareholder Return of 19% and our property portfolio has produced a Total Property Return of 12% which has out-performed IPD in all comparable categories

Portfolio performance

The like for like increase in the value of our investment property portfolio this year has been 7.1% (2014: 10%) which reflects a reversionary yield of 6.8% (2014: 7.4%). The total property return of 12.2% is ahead of IPD with excellent performances from the completed Waitrose development at Milngavie, Glasgow and Merrion House which was transferred into a JV with Leeds City Council in May 2015.

Including acquisitions, developments, joint ventures and leasehold car parks the portfolio value at the year end stood at £355.4m (2014: £326.8m).

Results

Net assets at 30 June 2015 were £182.9m, representing 344 pence per share (2014: £163.9m, 308 pence per share).  Adjusted net asset value was £183.0m, representing 344 pence per share (2014: £170.4m, 320 pence per share) reflecting the fact that long term interest rates are in line with the coupon on our Debenture Stock.

We report a statutory profit for the year of £24.0m (2014:  £27.4m) which includes the property revaluation surplus of £14.8m this year (2014 £19.8m). 

Our underlying profit before tax of £6.5m (2014: £7.6m) (excluding property revaluation and property disposals) is in line with expectations but behind last year due to planned disposals as part of our capital recycling programme.  The car park business was ahead of the prior year on a like for like basis.

Statutory earnings per share (including property revaluation and property disposals) were 45.1p (2014: 51.6p). Underlying earnings per share were 12.1p (2014: 14.4p). 

Dividend

The Board is recommending a final dividend of 7.34 pence per share, which, together with the interim dividend of 3.1 pence per share, provides an unchanged total dividend of 10.44 pence per share.  The final dividend comprises a Property Income Distribution of 2.16 pence and an ordinary dividend of 5.18 pence per share.  The final dividend will be paid on 5 January 2016 to shareholders on the register on 4 December 2015.

Funding

Net debt at 30 June 2015 amounted to £174.6m (2014: £160.5m).  This comprised £106.1m of 5.375% First Mortgage Debenture Stock 2031 and £70.0m of revolving credit facilities, net of £1.5m cash.  The increase in the level of net debt is principally due to capital expenditure (£37.6m) exceeding property disposal proceeds (£26.8m). Borrowings represent 49% of property values (2014: 49%).

The group is in the process of renewing its bank facilities. We have completed the renewal of our 3 year revolving credit facility with Handelsbanken increasing the facility from £20m to £35m and reducing the average margin by over 50 basis points. We shall renew the other bank facilities over the next few months.

Capital recycling

A key part of our property strategy is continually to refresh the portfolio through a combination of selective sales of properties where we can no longer add value and purchases of properties which give opportunities to grow income and value.

 

As part of this process in 2013/14 we sold five properties in Scotland for £8.9m. The income from these properties was £512,000 in 2013/14. We also sold Park Row, Leeds for £7.5m at the beginning of this year with income of £630,000. While the recycling programme continues to refresh and improve the portfolio these disposals have reduced income by £1.14m with an associated interest benefit of £400,000.

 

Our capital recycling in 2014/15 has been as follows:

·     Purchased Duke Street, London for £3.1m, rental value £196,700

·     Purchased Princes Street, Edinburgh for £2.4m, income £147,500

·     Purchased Wood Green, London for £1.3m, income £72,000

·     Purchased an industrial park in Stourton, Leeds for £4.5m, income £325,000

·     Sold Apperley Bridge, Leeds for £5.0m, income £121,000

·     Sold our interest in the Victoria Gate development in Leeds for £4.7m, income £200,000

 

The full year income gain from these transactions is £420,000 while the net interest increase is only £40,000.

 

We also agreed terms to sell Goodramgate, York in June 2015 with completion in August 2015; we received £3.55m and the exit yield was 6.24%.

 

Active property management

This is the time of year when we look back and review what we have achieved; the range and scope of our management activities is illustrated in the following pages. Our focus is on finding and generating income growth against a backdrop of a competitive retail rental market. Set out below is a summary of the projects we have been working on over the last couple of years which in total have added over £20m to net assets.

Merrion Centre

Arena Quarter

This redevelopment began with the Pure Gym letting in 2012, 20,600 sq ft at £8.50 psf.

Building work on all units created a total of 80,700 sq ft of retail space and was completed in 2014 at a cost of £5.6m. It is currently 80% let with a total rental value of £831,600. The current valuation is £8.1m which has therefore added £2.5m to net assets.

During the year we took a surrender of a lease to restaurant operator Cosmo as the tenant was unable to fit out; we received £150,000 in respect of the surrender, the existing lease was at £12.61 psf and we have been letting recently at £20 psf. This unit, along with all the remaining units in the scheme, is being actively marketed.

Morrisons

We completed a surrender and lease renewal with Morrisons in June 2014 which added 20% to their floorspace and £500,000 to rental income. The fit out is well underway and has already had a beneficial impact on the main mall. This deal alone added £5m to net assets.

Main mall

We continue to improve the tenant line up and rental income in what remains a competitive retail market. Demand is strong for the main mall units and where units come available they let quickly. The tenant mix remains strong with a number of new lettings, renewals, re-locations and reviews including Superdrug, Ethel Austin, Holland & Barrett, 3store, O2, Peacocks, Claires Accessories, Greggs, Poundworld and Home Bargains and we have increased the rental income and the average lease length during the year.

NHS clinic

This letting uses space which was previously used as the centre management office, along with balcony units and office space which were difficult to let with a low rental value. This 5,543 sq ft letting is to a NHS funded clinic at £100,000 pa and has already generated demand for the other balcony units in complementary uses. This refurbishment has also allowed us to create a block of kiosk units with a rental value of £55,000 pa.

Merrion Hotel

The Merrion Centre Hotel is currently vacant and we have now signed management contracts and franchise agreements with Ibis Styles (3 star) and Marco Pierre White restaurants to create a 134 bed hotel and 4,000 sq ft restaurant. The estimated build cost is £7.5m and is expected to generate an initial profit of £600,000 rising to £1m over five years. The start on site will be Autumn 2015 subject to finalising the detailed planning permission. This provides an excellent return on the investment for space that has been vacant for over two years.

Merrion House

The Merrion House redevelopment has now entered the contractual stage; the property was transferred into a 50/50 joint venture with Leeds City Council in May 2015. The book value of property was £25m and had rental income of £1.4m pa. The redevelopment will add 50,000 sq ft of state of the art office space and refit the existing 120,000 sq ft; the total cost estimate is £31m with £28m funded by sale of the 50% stake to Leeds City Council. The completed redevelopment has an expected value of £70m (we have a 50% share) and will generate total income of £3.3m pa (indexed in line with CPI) from a new 25 year lease to Leeds City Council.

 

Other properties

Whitehall Riverside, Leeds

This area is rapidly becoming the prime office location in Leeds with three substantially speculative office buildings under construction on the sites adjoining Whitehall Riverside. There is an established demand for grade A space at £28 psf and we are currently marketing for pre-let on our site a 170,000 sq ft office building and we are also in detailed negotiations regarding a 128 bedroom hotel. The masterplan also includes a 500 space multi-storey car park along with a further 150,000 sq ft of offices.

Albion Place, Leeds

This deal is typical of the way we continue to generate increases in value in a competitive retail market; we took surrender of a short lease to Austin Reed, pre-let 5,125 sq ft to Sainsburys for 15 years at £157,500 pa and have also configured the building to allow for a future residential development of 3,886 sq ft. The resultant revaluation gain was £800,000 less the cost of works of £200,000.

Vicar Lane, Leeds

Our property forms one side of the main entrance to the Victoria Gate development which includes a John Lewis store and associated retail/leisure units with a total of 450,000 sq ft of new space scheduled to open in autumn 2016. Our property is let to a number of tenants including Flannels and High & Mighty. We have benefitted from an increase in value due to its proximity to the scheme and we propose to further capitalise on this by reconfiguring the unit to maximise rental value.

Apperley Bridge, Bradford

The former Barratts head office was purchased in July 2012 for £2.4m. A total of £600,000 was spent on demolition and site preparation and achieving a residential planning consent. The site was sold unconditionally for £5m in December 2014.

Urban Exchange, Manchester

This retail warehouse unit comprises 160,000 sq ft of space on two levels plus a basement. It became vacant in 2008 and since then we have worked to rebuild value through lettings to Aldi, M&S, Pure Gym and Go Outdoors.  These lettings were on turnover and stepped rents and the growth over the last five years has been 400%.

Piccadilly Basin, Manchester

The planning agenda on the Northern side of our five acre site has changed over the last year and there is a move towards residential development in this part of Manchester. We have refocused the master plan which now includes capacity for 850 apartments with a potential end value of over £240m. As part of this plan we have detailed consent for 91 canal-side units and we are finalising a pre-sale agreement.

The remaining site is zoned for commercial development and includes space for a 750 space multi-storey car park. The site continues to trade successfully as a surface car park along with the existing MSCP at Tariff Street.

Empire House, Glasgow

This actively managed property comprises nine shop units on Sauchiehall Street and four floors of multi-let offices above. We have obtained change of use for one unit this year from shop to restaurant, let the unit to Bella Italia and increased the rent by £65,000 pa.

Shandwick Place, Edinburgh

This is a substantial block of mixed retail and office space at the end of Princes Street in Edinburgh. We recently concluded a deal with Ask restaurants; we obtained possession from two former tenants, put two units together and let to Ask at £150,000 pa, an increase of £70,000 pa on previous rent. The valuation has increased by £1.1m while the cost of works was £400,000. Overall the income from this block is up £246,000 on last year.

Waitrose Milngavie, Glasgow

The land for this development adjoins our existing ownership of the Homebase in Milngavie. We acquired the land for £3m and construction costs were £7m to create a 36,000 sq ft store let to Waitrose under a 25 year lease at an initial rent of £644,000 pa; the year end valuation was £13.3m.

Duke Street, London

We completed the acquisition of this property in July 2014 at a cost of £3.1m from an LPA receiver. Although not fully occupied there were two existing leases with a total rent of £90,000 pa. We negotiated the surrender of the leases, completely refurbished the interior and exterior and at the same time regularised the legal and planning status of the ownership.  The ground, first floor and basement is now let to Titan Black at a rent of £122,000 pa and we have occupied the second and third floor offices which have a combined rental value of £60,000 pa. The total refurbishment cost was £350,000 and it is valued at the year end at £4.25m.

Car parking

We have been extremely active in the car park business as well. Following the acquisition of the Ilford multi-storey last June we have added five new sites to our portfolio in London and Watford; bringing the total to 5,200 spaces. These acquisitions all comprise leasehold sites and we have also negotiated lease extensions with the landlords. These operations are currently being fitted out in CitiPark branding and will generate turnover of approximately £10m in 2015/16.

Our cloud based management system has been installed in Ilford and Manchester with further installations currently underway at our Central London and Watford branches. Our Engine Room (central control room) became fully operational in August this year and we are now able to deal with all day to day operational matters remotely. This will allow us to rationalise staff levels at our branches.

The rebranding of the business to CitiPark was successfully completed during the year. All our branches will have a consistent brand and it will apply to surface and multi-storey operations. The rebrand will help give a clear modern identity and will emphasise the message that the business is at the forefront of technology and customer service. We are confident that the rebrand will increase our customer base and give the branches a cleaner look and feel.

Outlook

Retail valuations have continued to rise in the regions as the economic backdrop improves. The letting market remains competitive but we continue to find opportunities to increase income in all areas of our portfolio and over the next couple of years our income will benefit from the transactions we have already concluded. This is particularly so in the Merrion Centre where the Merrion House deal is now underway. We intend to increase portfolio sales and purchase activity this year.

We will continue our car park acquisitions programme as we have already seen this contributing positively to our profits.

We shall also complete our bank facility renewal; the banking panel has improved and we expect to achieve a reduced margin and subsequent reduction in average borrowing cost.

Overall we look forward with confidence and are encouraged by the many profitable opportunities that we have to deliver attractive shareholder returns.

Board changes

During the year we have appointed two new non-executive directors, Ian Marcus and Paul Huberman, and Howard Stanton has retired. We appointed Ben Ziff to the Board on 17 September 2015; he is the Managing Director of CitiPark.

Ian and Paul bring immense experience and expertise in the finance and property sector which will be invaluable to us in years to come. Ben has been extremely successful with the development of the car park business which is becoming an increasingly important part of the group and his appointment is well-deserved.

I would like to pay tribute to Howard Stanton. Howard joined us in April 2009 when we were facing some of the most challenging financial conditions the market has known and he has been a continuing support through those difficult times. He played a major role in the tender offer and exchange of our mortgage debenture which has been one of the most significant deals for the success of the group over the last 10 years. He has chaired our audit committee throughout his six year term and has done an excellent job with our finance team and our auditors. Finally and most importantly I would like to thank Howard for his personal support in steering the group through the last six turbulent years.

As ever I would also like to thank our loyal and dedicated staff for their commitment and support over the last 12 months.

Edward Ziff

Chairman and Chief Executive

17 September 2015

 

Detailed Portfolio Performance

The value of our investment property portfolio including acquisitions, developments, joint ventures, leasehold car parks and assets held for sale now stands at £355.4m with a gross income of £19.8m and an occupancy rate, based upon income (rather than square footage), of 96%.  The external valuation of our investment portfolio as at 30 June 2015 on a like for like basis showed an increase of 7.1% (2014: 10.0%) and reflects an initial yield of 5.8% (2014: 6.4%) and a reversionary yield of 6.8% (2014: 7.4%).

The investment property portfolio has out-performed IPD in all comparable categories.

Total property returns

TCS

IPD

Retail All

12.0%

11.3%

Retail shopping centres

12.3%

12.1%

Retail Warehouses

12.6%

11.1%

Retail rest of UK standard shops

10.2%

9.4%

Offices Rest of UK

23.5%

17.2%

 

 

 

The most notable gains are in Merrion House (£17.5m compared to £12.8m), Waitrose at Milngavie (£13.3m compared to total cost of £10m), the London suburban shops at 16.3% (2015 value £3.1m) and Albion Place, Leeds at 10.3% (2015 value £5.4m).

Merrion Centre has again out-performed IPD in each of the last 5 years.

Total property return

 

 

 

 

 

 

2011

2012

2013

2014

2015

Merrion Centre

13.6%

0.4%

6.7%

16.4%

12.3%

IPD shopping centres index

8.1%

(0.5)%

(0.8)%

12.3%

12.1%

 

PORTFOLIO ANALYSIS

 

Passing rent

ERV

Value

% of portfolio

Valuation incr/(decr)

Initial yield

Reversionary yield

 

£m

£m

£m

 

 

 

 

Retail & leisure

5.1

5.7

90.1

25%

5.1%

5.4%

6.0%

Merrion Centre (excl offices)*

6.1

7.2

112.6

32%

7.1%

6.4%

7.1%

Offices

3.0

4.5

48.0

14%

11.1%

5.9%

8.8%

Out of town retail

3.4

3.5

59.7

17%

7.4%

5.4%

5.5%

Industrial

0.2

0.4

4.4

1%

-

5.0%

7.8%

Residential

0.5

0.5

9.5

3%

4.7%

4.6%

4.6%

 

18.3

21.6

324.3

91%

7.1%

5.8%

6.8%

Development property (car park income)

0.9

1.4

13.5

4%

-

 

 

Car parks

0.6

1.2

17.6

5%

-5.6%

 

 

Let portfolio

19.8

24.2

355.4

100%

6.5%

 

 

Voids (4%)

 

0.8

 

 

 

 

 

 

 

25.0

 

 

 

 

 

 

Portfolio income analysis

Passing rent

ERV

 

 

 

 

 

 

2015

2014

2015

2014

 

 

 

 

 

£m

£m

£m

£m

 

 

 

 

Merrion excluding Merrion House

7.5

7.6

8.6

8.2

 

 

 

 

Merrion House

0.7

1.4

1.7

1.4

 

 

 

 

Waitrose Milngavie

0.7

                  -  

0.7

         -

 

 

 

Park Row Leeds (sold July 2014)

                 -  

0.7

             -  

0.7

 

 

 

 

Property acquisitions 2015

0.5

                  -  

0.8

        -

 

 

 

Other

8.9

8.4

9.8

9.7

 

 

 

 

 

18.3

18.1

21.6

20.0

 

 

 

 

                       

 

Location

Value

%

Leeds

190.9

56%

Manchester

47.2

14%

Scotland

82.3

24%

London

21.5

6%

 

341.9

100%

 

 

 

Sector

Value

%

Retail/leisure

262.4

77%

Office

48.0

14%

Car parking

17.6

5%

Industrial

4.4

1%

Residential

9.5

3%

 

341.9

100%

Development sites

13.5

 

 

355.4

 

 

 

 

Lease Expiries

Value

%

0-5 years

5.9

33%

5+ years

6.9

37%

10+ years

5.5

30%

 

18.3

100%

 

 

Consolidated income statement

 

 

 

 

for the year ended 30 June 2015

 

 

 

 

 

 

 

 

 

 

 

2015

2014

 

 

Notes

£000

£000

 

Gross revenue

 

22,714

  22,633

 

Property expenses

 

(5,248)

  (3,679)

 

Net revenue

 

17,466

  18,954

 

Administrative expenses

2

(5,068)

  (4,679)

 

Other income

3

1,451

  852

 

Valuation movement on investment and development properties

 

14,791

  19,805

 

Operating profit

 

28,640

  34,932

 

Finance costs

 

(7,258)

   (7,585)

 

Loss on disposal of investment properties into joint ventures

 

(2,488)

-

 

Share of post tax profits from joint ventures

7

5,109

  87

 

Profit before taxation

 

24,003

  27,434

 

Taxation

 

-

            -  

 

Profit for the year attributable to owners of the Parent

 

24,003

  27,434

 

Earnings per ordinary share of 25p each

 

 

 

 

Basic and diluted

4

45.1p

51.6p

 

Underlying (non-GAAP measures)

4

12.1p

14.4p

 

Dividends per ordinary share

 

 

 

 

Paid during the year

5

10.44p

10.44p

 

Proposed

5

7.34p

7.34p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated statement of comprehensive income

 

for the year ended 30 June 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

2014

 

 

 

£000

£000

 

Profit for the year

 

24,003

  27,434

 

Other comprehensive income

 

 

 

 

Revaluation gain on cash flow hedges

 

-

 298 

 

Revaluation gains on other investments

 

228

  112

 

Total comprehensive income for the year

 

24,231

  27,844

 

All recognised income for the year is attributable to owners of the Parent.

 

 

 

 

 

 

 

 

 

Consolidated balance sheet

 

 

 

 

as at 30 June 2015

 

 

 

 

 

 

 

 

 

 

 

2015

2014

 

 

Notes

£000

£000

 

Non-current assets

 

 

 

 

Investment properties

6

328,249

  317,697

 

Lease premiums

6

4,311

-

 

Investments in joint ventures

7

19,344

  1,748

 

Fixtures, equipment and motor vehicles

6

1,214

  1,112

 

Unamortised tenant lease incentives

 

3,966

  3,788

 

Total non-current assets

 

357,084

  324,345

 

Current assets

 

 

 

 

Non-current assets held for sale

 

3,450

  7,500

 

Investments

 

1,962

  1,734

 

Trade and other receivables

 

6,871

  4,705

 

Cash and cash equivalents

 

1,515

-

 

Total current assets

 

13,798

  13,939

 

Total assets

 

370,882

  338,284

 

Current liabilities

 

 

 

 

Trade and other payables

 

(11,857)

 (13,908)

 

Financial liabilities - borrowings

 

(38,668)

(1,845)

 

Total current liabilities

 

(50,525)

 (15,753)

 

Net current liabilities

 

(36,727)

   (1,814)

 

Non-current liabilities

 

 

 

 

Financial liabilities - borrowings

 

(137,479)

(158,660)

 

Total non-current liabilities

 

(137,479)

(158,660)

 

Total liabilities

 

(188,004)

(174,413)

 

Net assets

 

182,878

  163,871

 

Equity attributable to the owners of the Parent

 

 

 

 

Called up share capital

8

13,290

  13,290

 

Share premium account

 

200

  200

 

Capital redemption reserve

 

559

  559

 

Retained earnings

 

168,829

  149,822

 

Total equity

 

182,878

  163,871

 

Net assets per share

 

344p

308p

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated statement of changes in equity

 

 

as at 30 June 2015

 

 

 

 

 

 

 

 

Called up share capital

Share

premium account

Hedging reserve

Capital redemption reserve

Retained earnings

Total equity

 

£000

£000

£000

£000

£000

£000

Balance at 1 July 2013

13,290

200

(298)

559

128,152

141,903

Profit for the year

-

-

-

-

27,434

27,434

Other comprehensive income:

 

 

 

 

 

 

- Revaluation gains on cash flow hedges

-

-

298

-

-

298

- Revaluation gains on other investments

-

-

-

-

112

112

Total comprehensive income for the year ended 30 June 2014

-

-

298

-

27,546

27,844

Final dividend relating to the year ended 30 June 2013 paid in January 2014

-

-

-

(3,902)

(3,902)

Interim dividend relating to the year ended 30 June 2014 paid in June 2014

-

-

-

-

(1,648)

(1,648)

Other adjustments

-

-

-

-

(326)

(326)

Balance at 30 June 2014

13,290

200

-

559

149,822

163,871

Profit for the year

-

-

-

-

24,003

24,003

Other comprehensive income:

 

 

 

 

 

 

- Revaluation gains on other investments

-

-

-

-

228

228

Total comprehensive income for the year ended 30 June 2015

-

-

-

-

24,231

24,231

Final dividend relating to the year ended 30 June 2014 paid in January 2015

-

-

-

-

(3,902)

(3,902)

Interim dividend relating to the year ended 30 June 2015 paid in June 2015

-

-

-

-

(1,648)

(1,648)

Other adjustments

-

-

-

-

326

326

Balance at 30 June 2015

13,290

200

-

559

168,829

182,878

 

 

 

 

 

 

 

 

           
 

 

 

 

 

 

 

 

 

Consolidated cash flow statement

 

for the year ended 30 June 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

2014

 

Notes

£000

£000

 

£000

£000

Cash flows from operating activities

 

 

 

 

 

 

Cash generated from operations

9

9,950

 

 

  15,664

 

Interest paid

 

(7,759)

 

 

    (7,823)

 

Net cash generated from operating activities

 

 

2,191

 

 

  7,841

Cash flows from investing activities

 

 

 

 

 

 

Purchase and construction of investment properties

 

(22,132)

 

 

(4,803)

 

Refurbishment of investment properties

 

(10,602)

 

 

(8,174)

 

Acquisition of leasehold property

 

(4,311)

 

 

-

 

Purchases of fixtures, equipment and motor vehicles

 

(532)

 

 

(490)

 

Proceeds from sale of investment properties

 

16,821

 

 

8,802

 

Proceeds from sale of Merrion House to joint venture

 

10,000

 

 

-

 

Proceeds from sale of listed investments

 

-

 

 

241

 

Net cash used in investing activities

 

 

(10,756)

 

 

      (4,424)

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from non-current borrowings

 

17,475

 

 

  676

 

Dividends paid to shareholders

 

(5,550)

 

 

(5,550)

 

Net cash generated from/(used in) financing activities

 

 

11,925

 

 

(4,874)

Net increase/(decrease) in cash and cash equivalents

 

 

3,360

 

 

     (1,457)

Cash and cash equivalents at 1 July

 

 

(1,845)

 

 

        (388)

Cash and cash equivalents at 30 June

 

 

1,515

 

 

     (1,845)

 

 

 

 

 

 

 

 

1. Segmental information

 

The chief operating decision-maker has been identified as the Board. The Board reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports.

 

Segment assets

 

 

 

 

 

 

 

 

2015

2014

 

 

 

 

 

 

£000

£000

 

 

 

 

 

Property rental

349,840

323,048

 

 

 

 

 

Car park operations

21,042

15,236

 

 

 

 

 

 

370,882

338,284

 

 

 

 

 

 

Segmental results

 

 

 

 

 

 

 

 

2015

 

2014

 

Property

Car park

 

 

Property

Car park

 

 

rental

 operations

Total

 

rental

operations

Total

 

£000

£000

£000

 

£000

£000

£000

Gross revenue

15,844

6,870

22,714

 

  17,532

  5,101

  22,633

Property expenses

(1,558)

(3,690)

(5,248)

 

     (1,634)

  (2,045)

  (3,679)

Net revenue

14,286

3,180

17,466

 

  15,898

  3,056

  18,954

Administrative expenses

(4,484)

(584)

(5,068)

 

     (4,259)

   (420)

  (4,679)

Other income

1,435

16

1,451

 

  852

            -  

  852

Property valuation movement

15,577

(786)

14,791

 

  20,155

     (350)

  19,805

Operating profit

26,814

1,826

28,640

 

  32,646

  2,286

  34,932

Finance Income/costs

(7,258)

-

(7,258)

 

     (7,585)

            -  

  (7,585)

Loss on disposal of investment properties into joint ventures

(2,488)

-

(2,488)

 

-

-

-

Share of post tax profits from joint ventures

5,109

-

5,109

 

  87

            -  

  87

Profit before taxation

22,177

1,826

24,003

 

  25,148

  2,286

  27,434

Taxation charge

-

-

-

 

             -  

            -  

           -  

Profit for the year

22,177

1,826

24,003

 

  25,148

  2,286

  27,434

All results are derived from the UK.

 

 

 

 

 

 

 

                           

 

2. Administrative expenses

 

 

 

2015

2014

 

£000

£000

Employee benefits

3,479

3,086

Depreciation

176

203

Charitable donations

99

108

Other

1,314

1,282

 

5,068

4,679

 

3. Other income

 

 

 

 

2015

2014

 

 

£000

£000

 

Commission received

110

113

 

Dividends received

26

26

 

Management fees receivable

216

259

 

Profit/(loss) on disposal of investment properties

236

(59)

 

Profit on disposal of listed investments

-

101

 

Dilapidations receipts and income relating to lease premiums

380

207

 

Other

483

205

 

 

1,451

852

 

 

 

4. Underlying profit/earnings per share (EPS)

 

 

 

 

 

 

 

To assist shareholders in understanding the underlying results and compare to those results in previous accounting periods, adjustments made to the profit after taxation are:

 

2015

 

2014

 

 

Weighted

 

 

 

Weighted

 

 

 

average

 

 

 

average

 

 

 

number of

Earnings

 

 

number of

Earnings

 

Earnings

shares

per share

 

Earnings

shares

per share

 

£000

 

p

 

£000

 

p

Basic and diluted profit/EPS

24,003

53,162

45.1

 

  27,434

  53,162

  51.6

Valuation surplus on investment and development properties

(14,791)

-

(27.8)

 

(19,805)

 -

   (37.2)

Valuation surplus on joint venture investment properties

(5,013)

-

(9.4)

 

-

-

-

Profit on disposal of investment properties

(236)

-

(0.4)

 

-

-

-

Loss on disposal of investment properties into joint ventures

2,488

-

4.6

 

-

-

-

Underlying profit/EPS

6,451

53,162

12.1

 

  7,629

  53,162

  14.4

 

 

5. Dividends

 

 

 

 

2015

2014

 

 

£000

£000

 

2013 final paid: 7.34p per 25p share

 -

  3,902

 

2014 interim paid: 3.10p per 25p share

 -

  1,648

 

2014 final paid: 7.34p per 25p share

  3,902

 

2015 interim paid: 3.10p per 25p share

  1,648

 

 

  5,550

  5,550

 

                           

 

The Directors are proposing a final dividend in respect of the financial year ended 30 June 2015 of 7.34p per share, which will absorb an estimated £3,902,000 of shareholders' funds. This dividend will comprise an ordinary dividend of 5.18p per share and a Property Income distribution (PID) of 2.16p per share and will be paid on 5 January 2016 to shareholders who are on the Register of Members on 4 December 2015.

 

 

6. Non-current assets

 

 

 

 

(a) Investment properties

 

 

 

 

 

 

Long

 

 

 

Freehold

leasehold

Development

Total

 

£000

£000

£000

£000

Valuation at 1 July 2014

283,218

15,921

18,558

317,697

Additions

29,038

3,468

729

33,235

Disposals

(27,319)

(1,460)

(5,245)

(34,024)

Transfer of Assets held for sale

(3,450)

-

-

(3,450)

Transfer

242

326

(568)

-

Valuation movement

14,996

(205)

-

14,791

Valuation at 30 June 2015

296,725

18,050

13,474

328,249

 

Valuations are performed bi-annually and are performed consistently across all properties in the group's portfolio. At each reporting date appropriately qualified employees verify all significant inputs and review computational outputs. Valuers submit and present summary reports to the Property Director and the Board on the outcome of each valuation round.

Valuations take into account tenure, lease terms and structural condition. The inputs underlying the valuations include market rents or business profitability, incentives offered to tenants, forecast growth rates, market yields and discount rates and selling costs including stamp duty.

The development properties principally comprise land in Leeds and Manchester; these have been valued taking into account the income from car parking and the Property Director's assessment of their realisable value in their existing state and condition based on market evidence of comparable transactions.

The valuation of investment properties includes £0.5m (2014: £0.2m) in respect of borrowing costs capitalised during the year.

Investment properties are analysed as follows:

 

 

 

2015

2014

 

£000

£000

Investment property (externally valued)

313,930

289,780

Development properties

13,474

18,558

Residential property acquired for potential development

-

3,804

Other

845

5,554

 

328,249

317,696

 

 

 

(b) Lease premiums

 

 

 

 

£000

At 1 July 2014

-

Additions

4,311

At 30 June 2015

4,311

 

Lease premiums comprise upfront payments upon acquisition of leasehold car parks with a term of less than 50 years.

In December 2014 the group acquired a leasehold interest in a basement car park on Clipstone Street, London, in exchange for consideration of £800,000. The lease has an unexpired term of 18 years and has a passing rent of £331,000 per annum. Including professional fees and transaction costs, the total expenditure associated with this acquisition was £900,000.

Subsequently, in March 2015 the group acquired the leasehold interest in a basement car park on Bell Street, London, in exchange for consideration of £3 million. The lease has an unexpired term of 24 years and has a passing rent of £197,000 per annum. Including professional fees and transaction costs the total expenditure associated with this acquisition was £3,124,000.

In April 2015, the group was assigned leases for three multi-story car parks in Watford town centre. No premium was paid for the acquisition of these leases, however the group has provided a commitment to refurbish the car parks during the next financial year. Professional costs and transaction fees associated with the acquisition of these leases amounted to £287,000.

 

 

 

 

(c) Fixtures, equipment and motor vehicles 

 

 

 

 

 

Accumulated

 

 

Cost

depreciation

 

 

£000

£000

 

At 1 July 2014

3,771

  2,659

 

Additions

  532

               -  

 

Disposals

(160)

(32)

 

Depreciation

        -  

  302

 

At 30 June 2015

4,143

 2,929

 

Net book value at 30 June 2015

 

  1,214

 

  

7. Investments in joint ventures

 

2015

2014

 

£000

£000

Interest in joint ventures

 

 

Opening balance

1,748

1,661

Additions

12,487

-

Share of profits after tax

5,109

87

 At 30 June

19,344

1,748

 

The Group's share of the joint ventures' net assets are as stated below:

 

2015

2014

 

£000

£000

Non-current assets

19,194

1,661

Current assets

182

154

Current liabilities

(32)

(65)

Non-current liabilities

-

(2)

At 30 June

19,344

1,748

 

The Group's share of the joint ventures' post tax profits are as stated below:

 

2015

2014

 

£000

£000

Income

138

223

Expenses

(31)

(125)

Tax

(11)

(11)

 

96

87

Increase in revaluation of investment properties

5,013

-

Share of post tax profits from joint ventures

5,109

87

 

8. Share capital

Authorised

The authorised share capital of the company is164,879,000 (2013: 164,879,000) ordinary shares of 25p each.

The nominal value of authorised share capital is £41,219,750 (2013: £41,219,750).

 

Issued and fully paid

 

 

 

 

Number of

Nominal

 

 

shares

value

 

Ordinary shares of 25p each

 

£000

 

At 30 June 2014 and 30 June 2015

  53,162

  13,290

 

 

 

 

 

 

9. Cash flow from operating activities

 

 

 

2015

2014

 

£000

£000

Profit for the financial year

24,003

  27,434

Adjustments for:

 

 

- Depreciation

302

  282

- (Profit)/loss on disposal of investment properties

(236)

  59

- Loss on disposal of investment properties into joint ventures

2,488

-

- Profit on disposal of listed investments

-

      (140)

- Finance costs

7,258

  7,585

- Share of post tax profits from joint venture

(5,109)

  (87)

- Movement in valuation of investment and development properties

(14,791)

  (19,805)

- Increase in receivables

(2,345)

        (598)

- (Decrease)/increase in payables

(1,620)

  934

Cash generated from operations

9,950

  15,664

 

10. Adjusted net asset value per share

 

 

 

 

 

 

To assist shareholders in understanding the results, the table below shows how the adjusted net asset value was arrived at:

 

 

 

2015

2014

 

 

£000

£000

 

Net assets at 30 June

182,878

  163,871

 

Less: debenture issue premium

(179)

        (190)

 

Add: debenture mark to market after tax

305

  6,737

 

 

183,004

  170,418

 

Shares in issue (000)

53,162

  53,162

 

Adjusted net asset value per share

344p

 320p

 

               

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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