Interim Results

Wynnstay Properties PLC 27 November 2001 WYNNSTAY PROPERTIES PLC 27 NOVEMBER 2001 INTERIM RESULTS FOR THE SIX MONTHS ENDED 29 SEPTEMBER 2001 CHAIRMAN'S STATEMENT Wynnstay's financial year has started well. I am pleased to report very satisfactory results and to bring you up to date with recent developments in your Company's activities. The headline figures for the half-year to 29 September 2001 are: 2001 2000 * Profit before exceptional items and taxation: + 12.7% £258,000 £229,000 * Profit before taxation: + 38.0% £316,000 £229,000 * Earnings per share: + 39.6% 7.4p 5.3p * Interim dividend per share: +6.7% 2.0p 1.875p You will note that, on all these important criteria, we are well ahead of the position last year. Furthermore, Shareholders' funds at 29 September 2001 totalled £7,691,000, equivalent to 244p per share, representing an increase of 10.0% on the corresponding figure of £6,989,000, or 221p per share, at the same time last year. Moving to the detail, property income rose slightly to £714,000 (£702,000) reflecting, on the one hand, a full contribution from our industrial property in Alton acquired in January 2001 and, on the other hand, the disposals of our Epping and Cambridge properties in June this year. The sale prices achieved were in excess of the amounts at which both properties were valued at 25 March 2001 giving rise to a profit of £58,000 which has been taken as an exceptional item in the profit and loss account for the half-year. Following a series of interest rate reductions, net finance costs declined by £26,000. Property costs were 24% lower reflecting the low incidence of voids across the portfolio. Administration and other costs rose by 9% due largely to the costs associated with the establishment of a new term loan facility. Indeed, a major focus of our activity in the first-half of the year has been reviewing our loan facilities which were due to expire at the end of the current financial year. Over the past eight years, these facilities have been provided by The United Bank of Kuwait PLC with whom we have enjoyed an excellent working relationship. The Board decided, however, that in the current more competitive environment, it was appropriate also to consider proposals from other specialists in commercial property lending. It is pleasing to report, therefore, that during the period we were able successfully to conclude a new £7.5 million 5 year term loan facility with N.M. Rothschild & Sons Limited. We believe the terms agreed to be very attractive and, in order to provide certainty in our financial planning, we have taken advantage of the recent low rates to fix the interest payable on a substantial portion of the facility until its expiry in 2006. Net gearing at the end of the half-year was 70% compared with 79% last year, although this has increased as a result of a further significant addition to the portfolio made since the end of the half-year, involving the purchase of a freehold industrial property in Crawley, West Sussex for a cash consideration of £1,145,000. Constructed in the late 1980's on a 0.85 acre site which includes ample parking for commercial vehicles, it comprises a detached modern industrial unit of 15,410 square feet including 2,140 square feet of offices and ancillary accommodation. It is situated adjacent to the A23, which is the main access road from Crawley to Gatwick Airport. Currently used as a Parceline sorting depot, it is let to Geopost UK Limited, a subsidiary of La Poste, the French Post Office, for a ten year term expiring in 2005 on full repairing and insuring terms at an annual rent of £108,000, thus showing a yield of approximately 9% after acquisition costs. This quality acquisition, together with the other industrial units purchased in Aldershot and Alton over the last two years, have made a significant change to the structure of your Company's portfolio. These properties are well let and located in promising areas for economic growth in the industrial sector. In my address to Shareholders at the Annual General Meeting at the end of July, I referred to the turmoil in the stockmarkets and to the very substantial falls in the main indices of share prices, including the AIM index which had fallen by almost two-thirds between March 2000 and July 2001. Recent tragic events, and the uncertainties in world stability and economic outlook they have caused, have resulted in further turmoil in the financial markets. Your Company's share price has proved very resilient in these difficult times in common with other companies in the quoted commercial property sector and I hope that the financial markets and private investors will increasingly recognise the value of well-managed, smaller quoted property companies as an integral part of a balanced long-term investment portfolio. With a more fashionable property sector, a narrowing of the gap between asset and capitalised values may result. In the light of these results, the Directors have decided to increase the interim dividend by 6.7% from 1.875p per share to 2.0p per share. This will be paid on 17 December 2001 to Shareholders on the register at 7 December 2001. At the time of writing, prospects for the full year appear encouraging. We have the lowest base interest rates in the UK for forty years. Wynnstay's portfolio, which is broadly spread in terms of type and geography as well as across business sectors, is fully let. We plan to make other selective disposals which, together with our cashflow and the certainty provided by our new loan facility, should enable us to make further significant changes to enhance the portfolio. A number of Shareholders took the trouble to say how much they had enjoyed this year's Annual General Meeting and I would like to urge as many of you as possible to plan to spend a day in London and to attend this event next year, which will again be held at The Royal Automobile Club on Thursday 25 July 2002. It provides an opportunity to meet both other Shareholders and the Board, to ask questions and to hear about recent developments in your Company's affairs. Finally, on behalf of the Board, I send all Wynnstay's Shareholders and their families our best wishes for Christmas and for 2002. PHILIP G.H. COLLINS Chairman 27 November 2001 UNAUDITED PROFIT & LOSS ACCOUNT for the six months ended 29 September 2001 Six months Six months Year ended ended 29 Sept ended 29 Sept 25 March 2001 2000 2001 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Gross Rental Income 705 688 1,385 Fees and Commissions 9 14 23 ------------- -------------- ----------- Property Income 714 702 1,408 Property Outgoings (28) (37) (65) ------------- -------------- ----------- 686 665 1,343 Administration and Other Costs (215) (197) (384) ------------- -------------- ----------- Operating Profit 471 468 959 Finance Costs (Net) (213) (239) (461) ------------- -------------- ----------- Profit on Ordinary Activities before Exceptional Items and Taxation 258 229 498 Exceptional Items 58 - 7 ------------- -------------- ----------- Profit on Ordinary Activities before Taxation 316 229 505 Taxation (82) (62) (97) ------------- -------------- ----------- Profit on Ordinary Activities after Taxation 234 167 408 Interim Dividend 2001: 2.0p 2000: 1.875p (63) (59) Total Dividend 2000-2001: 6.3p (199) ------------- -------------- ----------- Profit Retained 171 108 209 ------------- -------------- ----------- Basic & Diluted Earnings per share (Note 2) 7.4p 5.3p 12.9p Notes 1. The figures in this statement do not constitute statutory accounts; those for the year ended 25 March 2001 are extracted from the Group Accounts which have been filed with the Registrar of Companies and which received an unqualified report from the Auditors and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985 as amended. 2. Basic and Diluted Earnings per share have been calculated on profits after taxation attributable to ordinary shareholders of £233,669 (2000: £166,573) and on 3,155,267 ordinary shares, being the weighted average number in issue during both periods. 3. The interim dividend of 2.0p per share will be paid on 17 December 2001 to those shareholders on the register at 7 December 2001. 4. This interim report is being posted to all shareholders and will be available on application to the Company's registered office at Cleary Court, 21 St. Swithin's Lane, London EC4N 8AD. UNAUDITED CONSOLIDATED BALANCE SHEET As At 29 September 2001 29 September 29 September 25 March 2001 2000 2001 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Fixed Assets Tangible Assets 13,340 13,086 14,178 Investments 54 53 54 -------------- ------------- ------------ 13,394 13,139 14,232 Current Assets Debtors 242 126 105 Cash at Bank and in Hand 292 239 180 -------------- ------------- ------------ 534 365 285 Creditors: Amounts falling due within one year (594) (733) (602) -------------- ------------- ------------ Net Current Liabilities (60) (368) (317) -------------- ------------- ------------ Total Assets Less Current Liabilities 13,334 12,771 13,915 Creditors: Amounts falling due after more than one year (5,643) (5,782) (6,397) -------------- ------------- ----------- Net Assets 7,691 6,989 7,518 -------------- ------------- ----------- Capital and Reserves Share Capital 789 789 789 Capital Redemption Reserve 205 205 205 Share Premium Account 1,135 1,135 1,135 Capital Reserve 151 151 151 Revaluation Reserve 2,762 2,363 2,740 Distributable Reserves 2,649 2,346 2,498 -------------- ------------- ----------- Equity Shareholders' Funds 7,691 6,989 7,518 -------------- ------------- ----------- UNAUDITED CONSOLIDATED CASH FLOW STATEMENT For The Six Months Ended 29 September 2001 6 months to 29 6 months to 29 Year ended September 2001 September 2000 25 March 2001 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Cash Flow from Operating Activities (Note 1) 381 716 1,214 ------------ ------------- ------------ Returns On Investment And Servicing Of Finance Interest Received 7 17 23 Interest Paid (252) (265) (578) ------------ ------------- ------------ Net Cash (Outflow) from Returns on Investment and Servicing of Finance (245) (248) (555) ------------ ------------- ------------ Taxation Paid (23) - (143) Taxation Refunded - 2 - ------------ ------------- ------------ (23) 2 (143) ------------ ------------- ------------ Capital Expenditure and Financial Investment Purchase of Tangible Fixed Assets - - (742) Disposal of Tangible Fixed Assets 893 - 82 Sinking Fund Policy Premium - - (1) ------------ ------------- ------------ Net Cash Inflow/(Outflow) from Investing Activities 893 - (661) ------------ ------------- ------------ Equity Dividends Paid (140) (133) (192) ------------ ------------- ------------ Net Cash Inflow/(Outflow) before Financing 866 337 (337) Financing Drawdown of Bank Loan 5,643 - 700 Repayment of Bank Loan (6,397) (700) (785) ------------ ------------- ------------ Increase/(Decrease) in Cash in the Period 112 (363) (422) ------------ ------------- ------------ Reconciliation Of Net Cash Flow To Movement In Net Debt Increase/(Decrease) in Cash in the Period 112 (363) (422) Cash Outflow from Decrease in Debt Financing 754 700 85 ------------ ------------- ------------ Movement in Net Debt in the Period 866 337 (337) Net Debt at 25 March 2001 (6,217) (5,880) (5,880) ------------ ------------- ------------ Net Debt at 29 September 2001(Note 2) (5,351) (5,543) (6,217) ============= ============= ============ NOTES TO CASH FLOW STATEMENT (1) Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities Six months ended Year ended 29 September 25 March 2001 2000 2001 £'000 £'000 £'000 Operating Profit 471 467 959 Depreciation and Amortisation 3 4 7 (Increase)/Decrease in Debtors (116) 226 256 Increase/(Decrease) in Creditors 23 19 (8) ----------- ------- ------------ Net Cash Inflow from Operating Activities 381 716 1,214 ----------- ------- ------------ (2) Analysis of Net Debt 29 September 2001 Cash Movement 25 March 2001 £'000 £'000 £'000 Cash at Bank and in Hand 292 112 180 Debt due after more than one year (5,643) 754 (6,397) ---------- -------- ------- Net Debt (5,351) 866 (6,217) ---------- -------- -------

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