Interim Results

RNS Number : 0669W
Wynnstay Properties PLC
09 November 2017
 

WYNNSTAY PROPERTIES PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 29TH SEPTEMBER 2017

 

 

 

CHAIRMAN'S STATEMENT

I am delighted to be able to report very satisfactory results for the first-half of the year to 29th September 2017.

 

The financial results may be summarised as follows

 

 

 

2017

2016

Property Income

+16.0%

£1,116,000

£962,000

Profit before Sale of Investment Properties

+10.8%

£778,000

£702,000

Operating Income

+29.5%

£909,000

£702,000

Income before Taxation

+38.1%

£725,000

£525,000

Earnings per share

+36.3%

21.4p

15.7p

 

 

 

 

Net Asset value per share

+15.9%

685p

591p

Interim Dividend per share

+18.2%

6.5p

5.5p

 

Property income for the half-year increased over the same period last year to £1,116,000 (2016 - £962,000), reflecting the lettings of units at Aylesford and Liphook and uplifts on contractual rent reviews at Lichfield and Surbiton. It is particularly pleasing to note the increased rents now being achieved on the larger, multi-let, estates in the portfolio.

Operating income at £909,000 (2016 - £702,000), and Income before Taxation of £725,000 (2016 - £525,000) are both significantly higher compared to the same period last year as a result of the profit arising on the sale of our Gosport and Colchester properties.

As foreseen in my statement accompanying the annual report for last year, we have disposed of these two small retail properties realising a net profit over book value of £132,000.  The disposals enabled us to repay £1,100,000  of borrowings under our revolving credit facility. Property costs are higher than in the prior half-year primarily as a result of refurbishment of units at Liphook for incoming tenants.

No additions to the portfolio have been made in the half-year. However, with our cash reserves and available borrowings, we remain in a position to make further acquisitions to enhance the portfolio.

Indeed, after the half year, we have completed the purchase of a small vacant site adjacent to the Beaver Industrial Estate at Liphook. This site will enable us to create additional units on the estate, subject to obtaining the necessary planning and other consents. We have also applied for a non-material variation of the existing planning permission for the additional units at our Aylesford Estate in order to enhance the viability of the scheme.

At Basingstoke, the tenant of two units sold his businesses last year. The new owner has decided to change the business model and contract out warehousing and distribution functions to a third party and has thus exercised the break options in his leases effective at the end of our current financial year. This will give us the opportunity to carry out a substantial refurbishment of the units while marketing them to potential new tenants. Our valuation of the units as at 25 March 2017 assumed that the tenant break options would be exercised and reflected the likely requirement for refurbishment.

At the time of writing, the portfolio is 98% let and we have collected over 99% of the rental income due for the current quarter commencing 29 September 2017.

In view of the very satisfactory financial results, I am pleased to say that we are in a position to continue our recent pattern of increasing the dividend.  The Board has decided to pay an increased interim dividend of 6.5p per share 2016 - 5.5p) on 15th December 2017 to those Shareholders on the register on 17th November 2017. Any future increases will, of course, depend on our financial performance and the economic situation and market outlook.

Despite the uncertainties arising from the decision to leave the European Union, we are encouraged that the portfolio remains fully let and with rising rents being achieved and are confident about the Company's future given the broad spread of the portfolio and range of tenants.

I must repeat, as I have done regularly when writing to you, a warning on unsolicited telephone calls to shareholders about their investments in which the caller mentions individual holdings, such as Wynnstay Properties. These approaches are highly likely to come from fraudsters and I would urge caution in responding to such calls. Wynnstay's website (www.wynnstayproperties.co.uk) includes a warning and a link to other information about unsolicited calls on the Financial Conduct Authority's website.

As previously reported, Terry Nagle retired as a Director after 19 years at the Annual General Meeting in July 2017. Paul Mather and Caroline Tolhurst joined the Board as Non-executive Directors on 28 March 2017 and I am pleased to say that the transition proved very smooth. Caroline Tolhurst has also taken on the role of Senior Independent Director formerly undertaken by Terry Nagle.

We held our Annual General Meeting this year at a new venue where our auditors provided us with excellent facilities at their offices in the City. Next year's Annual General Meeting will be held at the same venue, 150 Aldersgate Street, London EC1A 4AB on Tuesday 10th July 2018. As this year, refreshments will be offered prior to the meeting.

I would encourage shareholders to note the date in their diaries now and to try to make arrangements to attend the meeting. Whilst many shareholders take the trouble to vote at our meetings through proxies, which is a good sign of interest in Wynnstay's affairs and future, we welcome the opportunity to meet with and talk to shareholders individually at such meetings.

Finally, on behalf of the Board, I convey our best wishes for 2018 and for a peaceful and Happy Christmas.

 

Philip G.H. Collins

Chairman

9th November 2017



 

1.   STATEMENT OF COMPREHENSIVE INCOME

 

 

 

Six months ended

 

Year ended

 

 

29th September

 

29th September

 

25th March

 

 

2017

 

2016

 

2017

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

Property Income

 

1,116

 

962

 

2,028

 

 

 

 

 

 

 

Property Costs

 

(88)

 

(38)

 

(131)

 

 

 

 

 

 

 

Administrative Costs

 

(250)

 

(223)

 

(528)

 

 

 

 

 

 

 

 

778

 

701

 

1,369

Movement in fair value of:

 

 

 

 

 

 

Investment Properties 

 

-

 

-

 

2,199

Profit on Sale of Investment Property

 

132

 

-

 

-

 

 

 

 

 

 

 

Operating Income

 

909

 

701

 

3,568

 

 

 

 

 

 

 

Investment Income

 

-

 

2

 

3

 

 

 

 

 

 

 

Finance Costs

 

(185)

 

(180)

 

(373)

 

 

 

 

 

 

 

Income before Taxation

 

725

 

524

 

3,198

 

 

 

 

 

 

 

Taxation

 

(143)

 

(101)

 

(401)

 

 

 

 

 

 

 

Income after Taxation

 

581

 

423

 

2,797

 

 

 

 

 

 

 

The company has no other items of comprehensive income



 

2.   STATEMENT OF FINANCIAL POSITION

 

 

Unaudited

Audited

 

29th September

29th September

25th March

 

2017

 

2016

 

2017

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Non Current Assets

 

 

 

 

 

Investment Properties

       28,765

 

    27,296

 

     29,515

Investments

               3

 

            3

 

             3

 

       28,768

 

    27,299

 

     29,518

Current Assets

 

 

 

 

 

Accounts Receivable

            355

 

        258

 

          455

Cash and Cash Equivalents

         1,202

 

        996

 

       1,075

 

         1,557

 

      1,254

 

       1,530

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Accounts Payable

(971)

 

(911)

 

(1,039)

Income Taxes Payable

(338)

 

(281)

 

(195)

 

(1,309)

 

(1,192)

 

(1,234)

 

 

 

 

 

 

Net Current Assets

248

 

64

 

296

 

 

 

 

 

 

Total Assets

       29,016

 

    27,363

 

     29,814

 

 

 

 

 

 

Non-Current Liabilities

 

 

 

 

 

Bank Loans Payable

(10,240)

 

(11,319)

 

(11,340)

Deferred Tax Payable

(208)

 

(3)

 

(209)

 

(10,448)

 

(11,322)

 

(11,549)

 

 

 

 

 

 

Net Assets

       18,568

 

    16,041

 

     18,265

 

 

 

 

 

 



 

Capital and Reserves

 

 

 

 

 

Share Capital

            789

 

        789

 

          789

Treasury Shares

(1,570)

 

(1,570)

 

(1,570)

Share Premium Account

         1,135

 

      1,135

 

1,135

Capital Redemption Reserve

            205

 

        205

 

          205

Retained Earnings

       18,010

 

    15,482

 

     17,706

 

 

 

 

 

 

 

       18,568

 

    16,041

 

     18,265

 

 

 

 

 

 



 

 

3.   STATEMENT OF CASHFLOW

 

 

 

2017

 

2016

 

2017

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

Cashflow from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before taxation

 

                 725

 

                   525

 

           3,198

Adjusted for:

 

 

 

 

 

 

Amortisation of deferred finance costs

 

-

 

-

 

               28

(Increase) in fair value of investment properties

 

               -

 

               -

 

(2,199)

Interest income

 

-

 

(2)

 

(3)

Interest expense

 

                 185

 

                   180

 

             373

Profit on disposal of investment properties

 

               -

 

               -

 

-

Changes in:

 

 

 

 

 

 

Trade and other receivables

 

                 100

 

                     15

 

(136)

Trade and other payables

 

(68)

 

                       9

 

               99

Income taxes paid

 

-

 

               -

 

(181)

Interest paid

 

(188)

 

(180)

 

(345)

Net cash from operating activities

 

                 754

 

                   547

 

             834

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cashflow from investing activities

 

 

 

 

 

 

Interest and other income received

 

-

 

                       2 

 

                 3

Purchase of investment properties

 

 

 

(2,066)

 

(2,086)

Sale of investment properties

 

                 750 

 

-

 

-

 

 

 

 

 

 

 

Net cash from investing activities

 

                 750 

 

(2,064)

 

(2,083)

 

 

 

 

 

 

 

Cashflow from financing activities

 

 

 

 

 

 

Dividends paid

 

(278)

 

(222)

 

(371)

Repayments on bank loans

 

(1,100)

 

-

 

-

Drawdown on bank loans

 

-

 

                 1,352

 

           1,312

Net cash used in financing activities

 

(1,378)

 

                 1,130

 

             941

 

 

 

 

 

 

 

Net (decrease)/ increase in cash and cash equivalents

                 127

 

(387)

 

(308)

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

              1,075

 

                 1,383

 

           1,383

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

              1,202

 

                   996

 

           1,075

 

 

 

 

 

 

 

 



 

4.   STATEMENT OF CHANGES IN EQUITY

 

UNAUDITED SIX MONTHS ENDED 29 SEPTEMBER 2017

 

Share Capital

Capital Redemption Reserve

Share Premium Account

Treasury Shares

Retained Earnings

Total

 

£ 000

£ 000

£ 000

£ 000

£ 000

£ 000

 

 

 

 

 

 

 

Balance at 26 March 2017

789

205

1,135

(1,570)

17,706

18,265

Total comprehensive income for the period

-

-

-

-

581

581

Dividends - note 6

-

-

-

-

(278)

(278)

Balance at 29 September 2017

789

205

1,135

(1,570)

18,009

18,568

 

 

 

 

 

 

 

 

UNAUDITED SIX MONTHS ENDED 29 SEPTEMBER 2016

 

Share Capital

Capital Redemption Reserve

Share Premium Account

Treasury Shares

Retained Earnings

Total

 

£ 000

£ 000

£ 000

£ 000

£ 000

£ 000

 

 

 

 

 

 

 

Balance at 26 March 2016

789

205

1,135

(1,570)

15,280

15,839

Total comprehensive income for the period

-

-

-

-

423

423

Dividends - note 6

-

-

-

-

(222)

(222)

Balance at 29 September 2016

789

205

1,135

(1,570)

15,481

16,041

 

 

 

 

 

 

 

 

AUDITED YEAR ENDED 25 MARCH 2017

 

Share Capital

Capital Redemption Reserve

Share Premium Account

Treasury Shares

Retained Earnings

Total

 

£ 000

£ 000

£ 000

£ 000

£ 000

£ 000

 

 

 

 

 

 

 

Balance at 26 March 2016

789

205

1,135

(1,570)

15,280

15,839

Total comprehensive income for the year

-

-

-

-

2,797

2,797

Dividends - note 6

-

-

-

-

(371)

(371)

Balance at 25 March 2017

789

205

1,135

(1,570)

17,706

18,265

 

 

 

 

 

 

 

 



 

5.   ACCOUNTING POLICIES

 

Wynnstay Properties PLC is a public limited company incorporated and domiciled in England and Wales. The principal activity of the Company is property investment, development and management. The Company's ordinary shares are traded on the Alternative Investment Market.

 

Basis of Preparation

These unaudited condensed interim financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34 Interim Financial Reporting. They do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006.

 

The unaudited condensed interim financial statements should be read in conjunction with the financial statements of the Company as at and for the year ended 25th March 2017 which were prepared in accordance with IFRS as adopted by the European Union and those parts of the Companies Act 2006 applicable to companies reporting under IFRS, and have been reported on by the Company's auditors. The financial information for the interim periods ended 29th September 2017 and 29th September 2016 has not been audited and the auditors have not reported on or reviewed these interim financial statements. The information for the year ended 25th March 2017 has been extracted from the latest published audited financial statements.

 

Key Sources of Estimation Uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that may affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses.

 

Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period. The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are those relating to the fair value of investment properties.

 

Investment Properties

All the Company's investment properties are revalued annually and stated at fair value at 25th March. The aggregate of any resulting surpluses or deficits are recognised through the statement of comprehensive income.

 

Depreciation

In accordance with IAS 40, freehold and leasehold investment properties are included at the reporting date at fair value, and are not depreciated.

 

Depreciation of other plant and equipment is on a straight line basis calculated at annual rates estimated to write off each asset over its useful life of 5 years.

 

Disposal of Investments

The gains and losses on the disposal of investment properties and other investments are included in the statement of comprehensive income in the year of disposal.

 

Property Income

Property income represents the value of accrued charges under operating leases for rental of the Company's properties. Revenue is measured at the fair value of the consideration received. All income is derived in the United Kingdom.

 

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax. Current tax is the expected tax payable on the taxable income for the year based on the tax rate enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of prior years. Taxable profit differs from income before tax as reported in the income statement because it excludes items of income or expense that are deductible in other years, and it further excludes items that are never taxable or deductible.

 

Deferred taxation is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits, and is accounted for using the financial position liability method. Deferred tax liabilities are recognised for all taxable temporary differences (including unrealised gains on revaluation of investment properties) and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. The Company provides for deferred tax on investment properties by reference to the tax that would be due on the sale of the investment properties.

 

Deferred tax is calculated at the rates that are expected to apply in the period when the liability is settled, or the asset is realised. Deferred tax is charged or credited in the statement of comprehensive income, including deferred tax on the revaluation of the asset.

 

Investments

Quoted investments are recognised as held at fair value, and are measured at subsequent reporting dates at fair value, which is either at the bid price, or the latest traded price, depending on the convention of the exchange on which the investment is quoted. Changes in fair value are recognised in profit or loss.

 

Trade and other accounts receivable

Trade and other receivables are initially measured at fair value as reduced by appropriate allowances for estimated irrecoverable amounts. All receivables do not carry any interest and are short term in nature.

 

Cash and cash equivalents

Cash comprises cash at bank and on demand deposits. Cash equivalents are short term (less than three months from inception), repayable on demand and which are subject to an insignificant risk of change in value.

 

Trade and other accounts payable

Trade and other payables are initially measured at fair value. All trade and other accounts payable are not interest bearing.

 

Comparative information

The information for the year ended 25 March 2017 has been extracted from the latest published audited financial statements.

 

Pensions

Pension contribution towards employees' pension plans are charged to the statement of comprehensive income as incurred. The pension scheme is a defined contribution scheme.

 

6.   DIVIDENDS

 

 

Payment

Per share

Amount absorbed

Period

Date

(pence)

£'000

 

 

 

 

6 months to 29th September 2017

15th Dec 2017

6.5

178

 

 

 

 

6 months to 29th September 2016

23rd Dec 2016

5.5

151

 

 

 

 

Year ended 25th March 2017

21st July 2017

10.25

278

 



 

7.   EARNINGS PER SHARE

Basic earnings per share are calculated by dividing income after taxation attributable to Ordinary Shareholders of £581,000 (2016: £423,000) by the weighted average number of 2,711,617 ordinary shares in issue during the period (2016: 2,711,617).  There are no instruments in issue that would have the effect of diluting earnings per share.

 

 

 

For further information please contact:

Wynnstay Properties Plc

Toby Parker, Finance Director

020 7554 8766

Panmure Gordon (UK) Limited

Andrew Potts

020 7886 2500

 


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