Final Results - Part 2

Workspace Group PLC 25 June 2001 PART 2 Notes to the Cash Flow Statement for year ended 31 March 2001 2001 2000 £000 £000 1. Reconciliation of operating profit to operating cash flows Operating profit 20,976 17,453 Depreciation charges 524 485 Profit on sale of tangible fixed assets (38) (4) Increase in debtors (202) (2,476) Increase in creditors 1,533 4,725 _______ _______ 22,793 20,183 _______ _______ Notes 2001 2000 2. Analysis of cash flow: To cashflow £000 £000 Returns on investments and servicing of finance Interest received 391 239 Interest paid (12,762) (9,967) Movement in cost of raising finance - (1,927) _______ _______ Net cash outflow (12,371) (11,655) Capital expenditure Purchase of tangible fixed assets (48,436) (91,731) Sale of tangible fixed assets 35,442 6,576 Grants Received - 130 _______ _______ Net cash outflow (12,994) (85,025) Management of liquid resources Decrease/(Increase) in short term deposits 3 6,051 (9,092) _______ _______ Net Cash inflow/(outflow) 6,051 (9,092) _______ _______ Financing Issue of ordinary share capital 898 131 Mortgage on freehold property 3 516 117,459 Drawdown of Bank Loan 3 3,103 18,397 Repayment of Mortgage 3 - (42,960) _______ _______ Net cash inflow 4,517 93,027 _______ _______ 3. Analysis of Net Debt At Cash At At Cash At 1.4.00 Flow 31.3.01 1.4.99 Flow 31.3.00 £000 £000 £000 £000 £000 £000 Cash at bank and in hand 201 5 206 2 199 201 Bank Overdrafts (3,322) 1,478 (1,844) (4,726) 1,404 (3,322) ______ ______ ______ ______ ______ ______ (3,121) 1,483 (1,638) (4,724) 1,603 (3,121) ______ ______ ______ ______ ______ ______ Debt due within one year: Securitised Loan (2,529) (269) (2,798) - (2,529) (2,529) Less Cost of Raising Finance 340 (53) 287 340 340 Debt due after one year: 11% Convertible Unsecured Loan (4,040) - (4,040) (4,040) - (4,040) 11.125% First Mortgage Debenture (12,500) - (12,500) (12,500) - (12,500) 11.625% First Mortgage Debenture (7,000) - (7,000) (7,000) - (7,000) Mortgage: Lombard North Central - - - (2,960) 2,960 - Mortgage: Bradford & Bingley Building Society - - - (30,000) 30,000 - Bristol & West Building Society - - - (10,000) 10,000 - Securitised Loan (114,930) (247)(115,177) - (114,930) (114,930) Bank Loan (18,397) (3,103) (21,500) - (18,397) (18,397) Less Cost of raising of finance 2,022 (176) 1,846 435 1,587 2,022 ______ ______ ______ ______ ______ ______ (157,034) (3,848)(160,882) (66,065) (90,969) (157,034) ______ ______ ______ ______ ______ ______ Short term deposits 11,424 (6,051) 5,373 2,332 9,092 11,424 ______ ______ ______ ______ ______ ______ Total (148,731) (8,416)(157,147) (68,457) (80,274) (148,731) ______ ______ ______ ______ ______ ______ Notes to the Accounts for the year ended 31 March 2001 1. Basis of Preparation The audited financial information contained in this preliminary announcement report does not comprise statutory accounts with the meaning of Section 240 of the Companies Act 1985. The figures in this preliminary announcement have been prepared under generally accepted accounting policies in the United Kingdom. The accounting policies adopted are those set out in the Annual Report and Accounts for the year ended 31 March 2000 which includes the unqualified report of the auditors and which have been filed with the Registrar of Companies. 2. Segmental Analysis 2001 2000 Gross Gross Turnover Costs Profit Turnover Costs Profit £000 £000 £000 £000 £000 £000 Rental income 28,534 (946) 27,588 23,397 (802) 22,595 Service charges and other recoveries 6,194 (9,047) (2,853) 4,609 (6,098) (1,489) Services, fees, commissions and sundry 1,494 (265) 1,229 1,311 (709) 602 income ______ ______ ______ ______ ______ ______ 36,222 (10,258) 25,964 29,317 (7,609) 21,708 ______ ______ ______ ______ ______ ______ All business in the Group was continuing and occurred in the United Kingdom 3. Surplus on Disposal of Investment Properties The profit arising on the sale of properties is calculated by reference to the book value at the date of sale. Book value comprises the valuation as at 31 March 2000 plus additions at cost since that date. Proceeds from the sale of investment properties totalled £35,593,000. Book value of these assets plus costs of sale totalled £25,530,000 yielding a surplus of £10,063,000. 4. Interest Receivable 2001 2000 The following amounts were earned during the year £000 £000 Short term deposits 374 230 Other 44 15 ______ ____ 418 245 5. Interest Payable 2001 2000 The following amounts were payable during the year: £000 £000 11% Convertible Loan Stock 2011 444 444 11.125% First Mortgage Debenture Stock 2007 1,391 1,391 11.625% First Mortgage Debenture Stock 2007 814 814 Mortgage interest on securitised loan not wholly repayable 8,922 7,464 within five years* Bank and other interest on amounts wholly repayable within five 1,501 995 years _____ ______ 13,072 11,108 Interest capitalised on development properties (1,138) (742) ______ ______ Charged to profit and loss account 11,934 10,366 ______ ______ *Net of amortisation of cost of raising finance £352,000 (2000: £617,000). 6. Taxation 2001 2000 £000 £000 Corporation tax at 30% (2000- 30%) 6,219 2,238 Prior year adjustment 82 - ________ ________ 6,301 2,238 ________ ________ The taxation charge for the year ended 31 March 2001 was £6,219,000 representing an effective rate of 31.9% (2000 - 25.5%). Effective tax rate excluding property disposals amounted to 25.7% (2000: 24.3%). The increase in the rate of taxation is due principally to lower availability of capital and industrial building allowances on new acquisitions. 7. Dividends 2001 2000 £000 £000 Interim dividend of 6.5p (2000 - 6.0p) per Ordinary Share 1,070 941 Proposed final dividend of 16.6p (2000 - 15.0p) per Ordinary 2,653 2,357 Share ________ ________ 3,723 3,298 The interim dividend was paid on 1 February 2001 and the proposed final dividend is payable on 1 August 2001 to shareholders on the register at the close of business on 6 July 2001. 8. Earnings Per Share and Net Assets Per share The following table shows a reconciliation of profit used in calculating earnings per share. Profit Earnings per share 2001 2000 2001 2000 £000 £000 pence pence Profit for the year attributable to shareholders 13,222 6,523 83.2 41.6 Other items (6,272) (217)(39.5) (1.4) _______ _____ ______ ______ Profit for the year attributable to shareholders used for 6,950 6,306 43.7 40.2 calculating earnings per share excluding other items Reconciliation of profit used in calculating diluted earnings per share Profit Earnings per share 2001 2000 2001 2000 £000 £000 pence pence Profit for the year attributable to shareholders used 13,222 6,523 for calculating basic earnings per share Interest saving net of taxation on 11% Convertible Loan 311 311 Stock _______ _______ Profit for the year attributable to shareholders used 13,533 6,834 79.9 41.0 in calculating the underlying diluted earnings per share Other items (6,272) (217)(37.0) (1.3) _______ _____ ____ ____ Profit for the year attributable to shareholders used 7,261 6,617 42.9 39.7 in calculating the diluted earnings per share excluding other items _______ _____ ____ ____ The following table shows a reconciliation of the weighted average number of shares used for calculating the basic and diluted earnings per share. 2001 2000 £000 £000 Used for calculating basic earnings per share 15,890,584 15,684,658 Dilution due to Share Option Scheme 244,256 166,574 Dilution due to Convertible Loan Stock 808,000 808,000 _______ _______ Used for calculating diluted earnings per share 16,942,840 16,659,232 _______ _______ Net assets per share have been calculated by dividing net assets of £ 191,578,000 less investment in own shares of £1,015,000 (2000: £143,018,000) by 15,979,510 (2000: 15,713,815) being the number of shares in issue at 31st March 2001 less investment in own shares of 200,000. Other items in the current year comprise profits on disposal of investment properties (2000: profits on sale of investment properties less costs associated with redemption of loans). 9 (a). Investment Properties-Group Freehold Mainly Long Short Total Freehold Leasehold Leasehold £000 £000 £000 £000 £000 Balance at 1 April 2000 208,488 48,335 47,425 - 304,248 Additions during the year 42,377 2,814 3,701 - 48,892 Disposals during the year (25,288) - - - (25,288) Revaluation during the year 31,336 6,383 954 - 38,673 _______ _______ _______ _______ _______ Balance at 31 March 2001 256,913 57,532 52,080 - 366,525 _______ _______ _______ _______ _______ The historical cost of investment properties Balance at 1 April 2000 134,904 45,750 36,725 7 217,386 _______ _______ _______ _______ _______ Balance at 31 March 2001 154,788 48,564 40,426 7 243,785 _______ _______ _______ _______ _______ The directors are advised that the value of the properties at 31 March 2001 was not less than their book cost (see Note 9(b) ). Additions during the year are stated net of £100,000 relating to grants receivable (2000 - £129,800) and include capitalised interest, gross of tax element, of £1,138,000. 9(b) Valuation The Group's investment properties were valued by Insignia Richard Ellis, Chartered Surveyors, at 31 March 2001 on the basis of open market existing use value and in accordance with the guidance notes issued by the Royal Institution of Chartered Surveyors. The valuation at that date amounted to £366,875,000 (2000 - £312,385,000) including £350,000 (2000: £350,000) in respect of the Company's short leasehold interest (expiring 11 February 2011) in the Alpha Business Centre, Walthamstow. For accounts purposes, as the unexpired term of the leasehold interest in Alpha Business Centre is less than 20 years, the valuation of the property has been retained at a nominal £1. After this adjustment the aggregate valuation for accounts purposes is £366,525,000 (2000 - £304,248,000). 10. Debtors Group Company 2001 2000 2001 2000 £000 £000 £000 £000 Amounts falling due within one year: Trade debtors 3,202 3,175 - - Amounts owed by subsidiary undertakings - - 120,785 118,400 Prepayments and accrued income 1,792 1,594 - - Deposits on investment acquisitions 571 240 - - Deposit on investment disposal 50 - - - Taxation and social security 42 - - - Corporation Tax - payment on account - - 4,996 1,311 ________ ________ ________ ________ 5,657 5,009 125,781 119,711 ________ ________ ________ ________ Amounts falling due after one year: Advance Commissions 187 227 - - ________ ________ ________ ________ Total Debtors 5,844 5,236 125,781 119,711 11. Investments Investments of £5,373,000 (2000 - £11,424,000) comprise short-term deposits with an original maturity date of less than 3 months. £5,373,000 comprised deposits held short-term for debt service and other costs under the securitised loan facility with WestLB of £2,785,000 and other deposits of £ 2,588,000. 12. Creditors: Amounts falling due within one year Group Company 2001 2000 2001 2000 £000 £000 £000 £000 Secured mortgage borrowings (Note 13) 2,511 2,189 - - Bank Loan and overdraft (secured) 1,844 3,322 - - Trade creditors 1,496 2,126 - - Amounts owed to subsidiary undertakings - - 32,752 46,037 Taxation and social security 1,676 1,107 220 222 Deferred income-rent and service charges 4,948 4,294 - - Tenants' deposits 3,255 2,595 - - Accruals 7,054 6,537 86 28 Corporation tax payable 4,576 851 - - Dividends 2,653 2,357 2,653 2,357 ________ ________ ________ ________ 30,013 25,378 35,711 48,644 ________ ________ ________ ________ See note 13 for details of security in relation to the bank loans and overdraft. 13.Creditors: Amounts falling due after more than one year. Group Company 2001 2000 2001 2000 £000 £000 £000 £000 Long-term borrowings consist of: Unsecured: 11% Convertible Loan Stock 2011 4,040 4,040 4,040 4,040 Secured: 11.125% First Mortgage Debenture Stock 2007 12,500 12,500 12,500 12,500 11.625% First Mortgage Debenture Stock 2007 7,000 7,000 7,000 7,000 Other secured loans 137,342 133,494 21,500 12,266 ________ ________ ________ ________ 160,882 157,034 45,040 35,806 Less: amount falling due within one year (2,511) (2,189) - - ________ ________ ________ ________ 158,371 154,845 45,040 35,806 The secured loans are secured on properties of value £325,426,000. Interest on the Debenture Stocks is payable on 31 March and 30 September in each year. Interest on the 11% Convertible Unsecured Loan Stock 2011 is payable on 30 June and 31 December each year. Other secured loans include a loan of £ 117,975,000 carrying an interest rate of 1.0% over LIBOR and repayable in 2011. Workspace Holdings Ltd, the subsidiary company used for the WestLB financing, holds an interest rate collar on £120.1 million which has a cap of 9% until 16 July 2001, falling then to 8% until 15 July 2009, and a floor of 5% until 16 July 2001, falling to 4.5% until 15 July 2009. The 11% Convertible Unsecured Loan Stock 2011 holders have the option to convert in each year on the basis of one ordinary share for every £5 of stock held. Loans totalling £121,096,100 have a maturity of five years or more. 14. Borrowings and Financial Instruments (i) Policies The Group finances its operations through a mixture of retained profits and borrowings. The Group borrows at both fixed and floating rates of interest and then uses interest rate swaps and caps to generate the desired interest and risk profile. Details of the interest rate collar held by the Group to manage interest rate exposure on its £122m facility with WestLB are given in Note 13. No premium payment was made for this collar which is financed by a 0.22% adjustment to the interest rate margin paid on the borrowing. The Group's policy is to fix or cap at least 50% of its borrowings. At the year-end 15% (2000: 15%) of the Group's borrowings were fixed with a further 74% (2000: 74%) subject to a collar. The Group's policy is to ensure that at least 50% of borrowings have a maturity in excess of 5 years. At 31 March 2001 77% (2000: 82%) of the Group's borrowings mature after 5 years or more. The Group has taken advantage of the exemption for disclosure of short-term debtor and creditor balances. (ii) Financial Assets All of the Group's financial assets which comprised cash at bank and in hand are denominated in sterling. The interest rate profit at 31 March 2001 was: 2001 2000 £000 £000 Fixed Rate Financial Asset 5,579 11,625 ______ ______ (iii) Financial Liabilities All of the Group's financial liabilities are denominated in sterling. The interest rate profile of the Group's financial liabilities at 31 March 2001 was: 2001 2000 £000 £000 Floating Rate Financial Instruments 141,032 138,838 Fixed Rate Financial Liabilities 23,540 23,540 _______ _______ 164,572 162,378 As noted above (note 13) the Group has the benefit of an interest rate collar until July 2009. For its fixed rate financial liabilities: Weighted average interest rate 11.25% Weighted average period fixed 6.7 years Floating rate financial liabilities comprise mortgages that bear interest at rates based upon 1, 3, 6 or 12 month LIBOR. The average margin on these borrowings at 31 March 2001 was 1.02%. (iv) Maturity of Financial Liabilities A maturity analysis of loans is shown below Group Company 2001 2000 2001 2000 £000 £000 £000 £000 Less than one year 4,355 5,511 - - Between one year and two years 3,660 15,124 - 12,300 Between two years and three years 3,660 9,658 - - Between three years and four years 3,670 3,561 - - Between four years and five years 25,775 3,571 21,500 - In five years and more 123,452 124,953 23,540 23,540 ________ ________ ________ ________ 164,572 162,378 45,040 35,840 Less cost of raising finance (1,846) (2,022) (34) (34) ________ ________ ________ ________ 162,726 160,356 45,040 35,806 (v) Borrowing Facilities At 31 March 2001 the Group had undrawn borrowing facilities of £5,677,000 on which conditions precedent had been met (total undrawn £12,190,000). Of the total undrawn £656,000 had a maturity of less than 12 months with the remainder having a maturity of in excess of two years. (vi) Fair Value of Financial Liabilities Book and fair values of financial liabilities are: 2001 2001 2000 2000 Book Value Fair Value Book Value Fair Value £000 £000 £000 £000 Primary Financial Instruments Short term liabilities (4,355) (4,355) (5,511) (5,511) Long term borrowing (158,371) (165,299) (154,845) (163,828) Financial Assets 5,579 5,579 11,625 11,625 Derivative Financial Instruments Interest Rate Swaps 322 1,076 361 (1,076) ________ ________ ________ ________ (156,825) (162,999) (148,370) (158,790) ________ ________ ________ ________ The fair value of the interest rate cap/collar swap have been determined by reference to market prices and discounted expected cash flows at prevailing interest rates. All other fair values have been calculated by discounting expected cash flows at prevailing interest rates. The total fair value adjustment equates to 38.6 pence per share (15.6 pence based on diluted share capital). 15. Availability of Financial Information Copies of this statement will be available from the Group's registered office at Magenta House, 85 Whitechapel Road, London, E1 1DU from 9.00am on 25 June 2001. The full audited accounts for the year ended 31 March 2001 will be circulated to the shareholders for approval at the Annual General Meeting, which will be held on 30 July 2001. Copies of the report and accounts will be available from that date at he Group's registered office.

Companies

Workspace Group (WKP)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today