Final Results Part 4
British Land Co PLC
31 May 2000
PART 4
Notes to the Financial Statements
for the year ended 31 March 2000
---------------------------------
1 Operating profit
2000 1999
£m £m
------ ------
Gross rental income 368.3 311.9
Rents payable (2.1) (7.3)
Other property outgoings (18.7) (8.1)
------ ------
Net rental income 347.5 296.5
Profit on property trading (see below) 41.0 13.7
Other income 5.3 5.0
Administrative expenses (26.7) (24.3)
------ ------
Operating profit 367.1 290.9
====== ======
Profit on property trading
--------------------------
Sale proceeds 124.0 62.2
Cost of sales (83.0) (48.5)
------ ------
Profit on property trading 41.0 13.7
====== ======
2 Net interest payable
2000 1999
British Land Group £m £m
------------------ ------ ------
Payable on : bank loans and overdrafts 41.5 90.8
other loans 214.5 124.9
finance leases 15.3
------ ------
271.3 215.7
Deduct : development cost element (1.4) (2.5)
------ ------
269.9 213.2
Receivable on : deposits and securities (20.6) (6.1)
loans to joint ventures (15.3) (19.3)
------ ------
Total British Land Group 234.0 187.8
------ ------
Share of joint ventures
-----------------------
Interest payable on shareholder loans 15.3 19.3
Other interest payable (net) 33.6 25.8
------ ------
Total share of joint ventures 48.9 45.1
------ ------
Net interest payable 282.9 232.9
====== ======
Exceptional item 68.0
====== ======
The 31 March 1999 exceptional item relates to the termination of derivatives
no longer required as a result of the £1,540 million Broadgate (Funding) PLC
issue. The cost was provided for in the accounts for the year ended 31 March
1999 and has been settled during the current year.
3 Taxation
2000 1999
£m £m
------ ------
U.K. corporation tax 21.8 7.7
Deferred tax 6.2 2.1
Foreign tax 2.3 1.6
Attributable to joint ventures 4.1 2.4
Prior years adjustment - corporation tax (7.7) 1.9
------ ------
Revenue taxation 26.7 15.7
(effective tax rate 17.4% - 1999 12.8%) ------ ------
Capital taxation on exceptional item (13.8)
Capital taxation attributable to joint ventures 0.9 0.7
------ ------
Capital taxation 0.9 (13.1)
------ ------
------ ------
Total taxation 27.6 2.6
====== ======
The availability of capital allowances reduces the effective tax rate.
4 Ordinary dividends
2000 1999 2000 1999
pence pence £m £m
----- ----- ----- -----
Interim paid 3.40 3.23 17.6 16.7
Proposed final 7.50 7.07 38.9 36.7
----- ----- ----- -----
Total for year 10.90 10.30 56.5 53.4
===== ===== ===== =====
The final dividend of 7.50p will be paid on 25 August 2000 to shareholders on
the register at the close of business on 14 July 2000. The ex-dividend date
is 10 July 2000.
5 Basic and diluted earnings per share
Basic and diluted earnings per share are based on the profit attributable to
ordinary shareholders and on the weighted average of 518.0 million shares in
issue (March 1999 - 517.2 million). Earnings per share in 1999 on a
pre-exceptional basis are calculated by excluding the post tax effect (£54.2m)
of the exceptional item described in Note 2.
6 Investment, development and trading properties
Investment, development and trading properties were valued by external valuers
on the basis of open market value in accordance with the Appraisal and
Valuation Manual published by The Royal Institution of Chartered Surveyors.
£m
------
On an open market basis - External valuations:
United Kingdom : Weatherall Green & Smith 6,864.6
Republic of Ireland : Jones Lang LaSalle 105.6
Netherlands : CB Richard Ellis B.V. 1.0
------
Total investment, development and trading properties 6,971.2
======
Total
£m
------
Investment and development properties
-------------------------------------
Valuation and cost 1 April 1999 5,289.5
Purchase of Meadowhall Shopping Centre 1,170.0
Additions 224.0
Disposals (115.2)
Exchange fluctuations (11.4)
Revaluation 220.9
------
Valuation and cost 31 March 2000 6,777.8
======
Trading properties
------------------
At lower of cost and net realisable value 69.0
31 March 2000 ======
External valuation surplus on development and trading properties 124.4
------
Total investment, development and trading properties 6,971.2
======
Total external valuation surplus on development and trading properties
£m
------
British Land Group 124.4
Share of joint ventures 19.5
------
143.9
======
7 Joint ventures
The Public BL BL Rank Cherrywood BL
House Universal Properties Properties Ltd Fraser
Company Ltd PLC Ltd (Rep of Ireland) Ltd
----------- --------- ---------- --------------- ---------
All joint ventures are held equally on a 50:50 basis
Date established April 1995 Feb 1997 Aug 1997 April 1999 July 1999
Accounting year end 31 March 31 March 31 Dec 31 Dec 29 Jan
Summarised profit and loss accounts
-----------------------------------
£m £m £m £m £m
----------- --------- ---------- --------------- ---------
Gross rental income 20.2 69.9 12.6 6.3
=========== ========= ========== =============== =========
Net rental income 20.0 64.3 12.4 6.2
Other expenditure (0.2) (2.6) (0.4) (0.2)
----------- --------- ---------- --------------- ---------
Operating profit 19.8 61.7 12.0 6.0
----------- --------- ---------- --------------- ---------
Net interest
- external (13.2) (31.9) (7.5) (4.2)
- shareholders (22.2) (4.4) (1.9)
----------- --------- ---------- --------------- ---------
Net interest
(payable) receivable (13.2) (54.1) (11.9) (6.1)
----------- --------- ---------- --------------- ---------
Revenue profit
(loss) before tax 6.6 7.6 0.1 (0.1)
Capital profit
(loss) before tax 0.2 6.1
----------- --------- ---------- --------------- ---------
Profit (loss)
before tax 6.8 13.7 0.1 (0.1)
Tax (3.9)
----------- --------- ---------- --------------- ---------
Profit (loss)
after tax 6.8 9.8 0.1 (0.1)
=========== ========= ========== =============== =========
Summarised statements of recognised gains and losses
----------------------------------------------------
Profit (loss) retained
for the year 6.8 9.8 0.1 (0.1)
Unrealised surplus
(deficit) on revaluation (0.1) 28.6 (1.2) 4.7
----------- --------- ---------- --------------- ---------
Total recognised
gains and losses 6.7 38.4 (1.1) 4.6
=========== ========= ========== =============== =========
Summarised balance sheets
-------------------------
Investment properties
at valuation 249.8 1,043.7 167.3 178.0
Development properties
at cost 60.8
----------- --------- ---------- --------------- ---------
Total properties 249.8 1,043.7 167.3 60.8 178.0
----------- --------- ---------- --------------- ---------
Debentures (294.7)
Bank debt falling
due within one year (15.8)
Bank debt falling
due after one year (150.0) (225.0) (112.7) (124.2)
Other net assets
(liabilities) 4.0 (26.4) (2.4) (11.5) (2.4)
----------- --------- ---------- --------------- ---------
Total external
(liabilities) assets (161.8) (546.1) (115.1) (11.5) (126.6)
----------- --------- ---------- --------------- ---------
Net external assets 88.0 497.6 52.2 49.3 51.4
=========== ========= ========== =============== =========
Represented by:
Shareholder loans;
funded equally at
31 March 2000 2.3 238.7 46.7 19.4 46.5
Ordinary shareholders'
funds /
Partners' capital 85.7 258.9 5.5 29.9 4.9
----------- --------- ---------- --------------- ---------
Total investment 88.0 497.6 52.2 49.3 51.4
=========== ========= ========== =============== =========
Capital commitments 75.4
=========== ========= ========== =============== =========
Contingent liabilities 2.8 56.1 0.3 6.9 1.1
=========== ========= ========== =============== =========
The Group's share of the market value of the debt and derivatives as at 31
March 2000 was £6.3 million less than the Group's share of the book value.
All companies are English property investment companies unless otherwise
stated. All information is as at or for the period to 31 March 2000 unless
otherwise stated.
7 Joint ventures (continued)
BLT Tesco Other British
Properties BL Joint Land
Ltd Holdings Ltd Ventures Share
---------- ------------ -------- -------
All joint ventures are held equally on a 50:50 basis
Date established Nov 1996 Nov 1999
Accounting year end 20 Dec 20 Dec
Summarised profit and loss accounts
----------------------------------- £m £m £m £m
---------- ------------ -------- -------
Gross rental income 12.7 2.0 27.1 75.4
========== ============ ======== =======
Net rental income 12.7 2.0 24.3
Other expenditure (0.4) (0.2) (0.2)
---------- ------------ --------
Operating profit 12.3 1.8 24.1 68.9
---------- ------------ -------- =======
Net interest - external (10.2) (1.1) 0.9 (33.6)
- shareholders (1.4) (0.7) (15.3)
---------- ------------ -------- -------
Net interest (payable) receivable (11.6) (1.8) 0.9 (48.9)
---------- ------------ -------- =======
Revenue profit (loss) before tax 0.7 25.0
Capital profit (loss) before tax (0.6) 2.9
---------- ------------ -------- =======
Profit (loss) before tax 0.7 24.4
Tax (6.1) (5.0)
---------- ------------ -------- =======
Profit (loss) after tax 0.7 18.3
========== ============ ========
Summarised statements of recognised gains and losses
----------------------------------------------------
Profit (loss) retained for the year 0.7 18.3
Unrealised surplus (deficit)
on revaluation 9.9 33.5 37.7
---------- ------------ -------- =======
Total recognised gains and losses 10.6 51.8
========== ============ ========
Summarised balance sheets
-------------------------
Investment properties at valuation 222.9 290.6 202.6
Development properties at cost 22.9
---------- ------------ --------
Total properties 222.9 290.6 225.5 1,219.3
---------- ------------ -------- =======
Debentures
Bank debt falling due within one year (0.3)
Bank debt falling due after one year (134.5) (209.1)
Other net assets (liabilities) (4.6) (2.4) 15.0
---------- ------------ --------
Total external (liabilities) assets (139.4) (211.5) 15.0 (648.5)
---------- ------------ -------- =======
Net external assets 83.5 79.1 240.5 570.8
========== ============ ======== =======
Represented by:
Shareholder loans; funded
equally at 31 March 2000 18.3 77.1 50.4 249.7
Ordinary shareholders' funds
/ Partners' capital 65.2 2.0 190.1 321.1
---------- ------------ -------- -------
Total investment 83.5 79.1 240.5 570.8
========== ============ ======== =======
Capital commitments 4.5 26.0 18.9 62.4
========== ============ ======== =======
Contingent liabilities 10.4 3.4 6.0 43.5
========== ============ ======== =======
The Group's share of the market value of the debt and derivatives as at 31
March 2000 was £6.3 million less than the Group's share of the book value.
All companies are English property investment companies unless otherwise
stated. All information is as at or for the period to 31 March 2000 unless
otherwise stated.
7 Joint ventures (continued)
The movement for the year
Equity Loans Total
£m £m £m
------ ------ ------
At 1 April 1999 399.2 196.0 595.2
Additions 15.6 225.4 241.0
Repayment of loans (171.7) (171.7)
Share of profit attributable to joint ventures
(net of dividend) 17.8 17.8
Disposals (149.2) (149.2)
Revaluation 37.7 37.7
------ ------ ------
At 31 March 2000 321.1 249.7 570.8
====== ====== ======
8 Other investments
£m
------
At 1 April 1999 101.8
Additions 68.7
Disposals (21.4)
Revaluations 1.3
------
At 31 March 2000 150.4
======
For the year ended 31 March 2000 dividends and interest from other investments
amounted to £4.5m (1999 - £2.9m).
9 Debtors
2000 1999
£m £m
------ ------
Trade debtors 29.9 16.2
Amounts owed by joint ventures 8.8 10.4
Prepayments and accrued income 3.1 6.5
------ ------
41.8 33.1
====== ======
10 Creditors due within one year
2000 1999
£m £m
------ ------
Debentures and loans (note 12) 37.3 1.7
Overdrafts (note 12) 6.1 1.5
Bank loans (note 12) 124.7 103.1
Trade creditors 64.0 114.7
Corporation tax 52.0 25.6
Other taxation and social security 4.2 4.5
Accruals and deferred income 238.8 109.9
Dividends (1998 - final and 1999 - interim; note 14) 38.0
Proposed final dividend 38.9 36.7
------ ------
566.0 435.7
====== ======
11 Creditors due after one year
2000 1999
£m £m
------ ------
Debentures and loans (note 12) 2,453.1 984.4
Bank loans (note 12) 796.3 1,275.3
Minority interest 12.0
------ ------
3,249.4 2,271.7
====== ======
12 Net debt
2000 1999
£m £m
------ ------
Maturity analysis of net debt
-----------------------------
Repayable:
within one year and on demand 168.1 106.3
between:
one and two years 245.8 258.6
two and five years 615.8 943.0
five and ten years 712.9 522.3
ten and fifteen years 237.2 32.4
fifteen and twenty years 352.9 195.3
twenty and twenty five years 370.4 147.6
twenty five and thirty years 489.6 229.9
thirty and thirty five years 272.7
thirty five and forty years 268.7 246.5
Irredeemable 146.6 146.5
------ ------
Gross debt 3,880.7 2,828.4
Less cash and deposits (118.4) (120.2)
------ ------
Net debt 3,762.3 2,708.2
====== ======
Net debt comprises:
2000 1999
£m £m
------ ------
Creditors due within one year (note 10)
Debentures and loans 37.3 1.7
Overdraft 6.1 1.5
Bank loans 124.7 103.1
------ ------
168.1 106.3
------ ------
Creditors due after one year (note 11)
Debentures and loans 2,453.1 984.4
Bank loans 796.3 1,275.3
------ ------
3,249.4 2,259.7
------ ------
Debt before convertible bonds 3,417.5 2,366.0
Convertible bonds (note 13) 463.2 462.4
------ ------
Gross debt 3,880.7 2,828.4
------ ------
Cash (54.4) (81.9)
Term deposits (64.0) (38.3)
------ ------
Total cash and deposits (118.4) (120.2)
------ ------
Net debt 3,762.3 2,708.2
====== ======
12 Net debt (continued)
2000 1999
£m £m
------ ------
Maturity of committed undrawn borrowing facilities
--------------------------------------------------
Expiring:
Within one year 318.5 110.9
between: one and two years 228.0 177.9
two and three years 215.4 108.0
three and four years 47.7 40.0
four and five years 317.3 59.0
over five years 115.0 123.4
------ ------
Total 1,241.9 619.2
====== ======
Interest rate profile - including effect of derivatives
2000 1999
£m £m
------ ------
Fixed rate 3,207.0 2,046.1
Capped rate 150.0 250.0
Variable rate 405.3 412.1
------ ------
Net debt 3,762.3 2,708.2
====== ======
All the above debt is effectively Sterling except for £148.5m (1999 - £112.7m)
of Euro debt of which £125.8m (1999 - £75.0m) is fixed and the balance
floating. At 31 March 2000 the weighted average interest rate of the Sterling
fixed rate debt is 7.54%. The weighted average period for which the rate is
fixed is 22.7 years. The Irredeemable Convertible is treated as having a life
of 100 years for this calculation. The weighted average interest rate of the
Euro fixed rate debt is 4.07% and the weighted average period for which the
rate is fixed is 3.25 years. The floating rate debt is set for periods of the
Company's choosing at the relevant LIBOR (or in the case of Euro debt EURIBOR)
rate.
12 Net debt (continued)
Comparison of market values and book values at 31 March 2000
------------------------------------------------------------
2000
Market Book
Value Value Difference
£m £m £m
------ ------ --------
Fixed rate debt
Securitised debt 1,594.3 1,613.2 (18.9)
Other fixed rate debt 1,113.7 877.2 236.5
Convertible debt 449.7 463.2 (13.5)
Bank debt (net) 808.7 808.7
Continuing derivatives (15.8) (15.8)
------ ------ --------
Net debt 3,950.6 3,762.3 188.3
====== ======
Derivatives - Meadowhall 75.5 85.0 (9.5)
====== ======
--------
Total 178.8
--------
The market value and difference are shown before any tax relief.
In accordance with Accounting Standards the book value of debt is par value
net of amortised issue costs. The valuation of the Broadgate Notes has been
undertaken by Morgan Stanley. The valuations of 135 Bishopsgate
Securitisations 2018 have been undertaken by Greenwich NatWest. The valuations
of other fixed rate debt and convertible debt have been undertaken by UBS
Warburg. The bank debt has been valued assuming the bank debt could be
renegotiated at contracted margins. The derivatives have been valued by the
independent treasury advisor Record Treasury Management.
On the acquisition of Meadowhall an allowance of £92 million (note 15) was
made in respect of the high rate of interest payable under the finance leases,
which have since been repaid. The market value of the related derivatives is
shown above alongside the remaining allowance at 31 March 2000. Since the year
end, these derivatives were closed out at a cost of £74.8 million.
2000 1999
£m £m
------ ------
Secured on the assets of the Group
----------------------------------
6.5055% Notes 2038 (a) 97.5
8.875% First Mortgage Debenture Stock 2035 246.5 246.4
9.375% First Mortgage Debenture Stock 2028 197.1 197.0
10.5% First Mortgage Debenture Stock 2019/24 12.6 12.6
11.375% First Mortgage Debenture Stock 2019/24 20.4 20.4
5.66% 135 Bishopsgate Securitisation 2018 (a) 27.9
8.49% 135 Bishopsgate Securitisation 2018 (a) 106.8 109.1
------ ------
708.8 585.5
------ ------
Unsecured
---------
Class C2 6.4515% Notes 2032 (a) 73.1
Class B 6.0875% Notes 2031 (a) 219.4
Class A3 5.7125% Notes 2031 (a) 146.3
Class A2 5.67% Notes 2029 (a) 299.5
Class A1 Fixed Rate Notes 2024 (a) 316.9
8.875% Bonds 2023 147.6 147.6
12.5% Bonds 2016 150.0 150.0
Class C1 6.7446% Notes 2014 (a) 170.7
Class D Fixed / Floating Rate Notes 2014 (a) 155.1
10.25% Bonds 2012 1.7 1.7
7.35% Senior US Dollar Notes 2007** 97.8 97.8
8.5% Loan Stock 2000/05* 3.5 3.5
Bank loans and overdrafts 927.1 1,379.9
------ ------
2,708.7 1,780.5
------ ------
Convertible Bonds
-----------------
6.5% Convertible Bonds 2007 316.6 315.9
6% Subordinated Irredeemable Convertible Bonds 146.6 146.5
------ ------
463.2 462.4
------ ------
Gross debt 3,880.7 2,828.4
Cash and deposits (118.4) (120.2)
------ ------
Net debt 3,762.3 2,708.2
====== ======
(a) These borrowings are obligations of ringfenced, default remote, special
purpose companies, with no recourse to other companies or assets in the Group.
* Notice has been given to stockholders to redeem the stock on 30 June 2000.
** These borrowings have been hedged into Sterling from the date of issue.
13 Convertible Bonds
6.5% Convertible Bonds 2007
---------------------------
The £323 million 6.5% Convertible Bonds 2007 carry a Bondholder right of
conversion, exercisable at any time, into Ordinary Shares of the Company at
672p per share. The Company has the right to redeem, at its discretion, all or
part of the Bonds at par on or after 17 June 2002. The Company has the right
to redeem the remaining Bonds where 75% of the Bonds have been converted or
purchased or cancelled. If the Company elects to redeem the Bonds, Bondholders
have the right to elect for conversion into the underlying Ordinary Shares.
On conversion of the entire issue into Ordinary Shares of the Company 48.1
million Ordinary Shares would be issued.
6% Subordinated Irredeemable Convertible Bonds
----------------------------------------------
The £150 million 6% Subordinated Irredeemable Convertible Bonds carry a
Bondholder conversion right exercisable at any time into Ordinary Shares of
the Company at 500p (1999 - 500p) per share. The Company has the right to
redeem, at its discretion, the Bonds at par if after 9 April 2001 the average
ordinary share price attains 130% of the conversion price for a 30 day period
and after 9 April 2008 without conditions. The Company has the right to
redeem the remaining Bonds where 75% of the Bonds have been converted or
purchased or cancelled. If the Company elects to redeem the Bonds, Bondholders
have the right to convert into the underlying Ordinary Shares. The Company has
an option to exchange the Bonds for 6% Convertible Preference Shares with the
same conversion terms. The Company has a further option to exchange the
preference shares back to convertible bonds after these preference shares have
been in issue for six months. On conversion of the entire issue into Ordinary
Shares of the Company 30.0 million Ordinary Shares would be issued.
14 Notes to the cash flow statement
-----------------------------------------
Reconciliation of operating profit to net cash inflow from operating
activities
--------------------------------------------------------------------
2000 1999
£m £m
------ ------
Operating profit 367.1 290.9
Dividends received (1.1) (0.8)
Depreciation 0.4 0.8
Decrease in trading properties 78.8 39.1
(Increase) decrease in debtors (5.4) 12.7
(Decrease) increase in creditors (7.6) 2.4
------ ------
Net cash inflow from operating activities 432.2 345.1
====== ======
Analysis of Group net debt
--------------------------
Cash Non cash
1999 Acquisitions flow Movements 2000
£m £m £m £m £m
------ ------------ ------ -------- -------
Cash at bank (81.9) 27.5 (54.4)
Overdraft 1.5 4.6 6.1
------ ------------ ------ -------- -------
Net cash per
cash flow statement (80.4) 32.1 (48.3)
Term debt 2,364.5 448.7 698.4 (100.2) 3,411.4
Convertible Bonds 462.4 0.8 463.2
Term deposits (38.3) (25.7) (64.0)
------ ------------ ------ -------- -------
Group net debt 2,708.2 448.7 704.8 (99.4) 3,762.3
====== ============ ====== ======== =======
Reconciliation of net cash flow to movement in Group net debt
-------------------------------------------------------------
2000 1999
£m £m
------ ------
Brought forward 2,708.2 2,297.7
------ ------
Movement in net debt in the year
Decrease (increase) in cash 32.1 (34.6)
Cash inflow from movement in debt 698.4 410.7
Cash (outflow) inflow in term deposits (25.7) 27.7
------ ------
Changes resulting from cash flows 704.8 403.8
Term debt acquired with Meadowhall Shopping Centre 448.7
Changes resulting from non cash flows
(includes £92 million Meadowhall allowance
- notes 12,15) (99.4) 6.7
------ ------
1,054.1 410.5
------ ------
Carried forward 3,762.3 2,708.2
====== ======
Equity dividends paid
---------------------
Following the abolition of Advance Corporation Tax on 5 April 1999, dividends
were paid on 6 April 1999 relating to the years ended 31 March 1998 and 1999.
The interim dividend for the year ended 31 March 2000 was paid on 22 February
2000.
15 Purchase of Meadowhall Shopping Centre
On 8 July 1999, the Group acquired Meadowhall Shopping Centre, Sheffield. This
acquisition was structured as an option to purchase the entire share capital
of Meadowhall Holdings Limited and its subsidiaries for a payment on 8 July
1999 of £100 million with a completion payment on 1 November 1999 following
exercise of the option. The total consideration payable, discounted to the
date of acquisition, amounted to £701.7 million. This purchase was funded from
existing cash and bank facilities.
This acquisition has been consolidated in these accounts since 8 July 1999,
the effective date on which control of the company was acquired and has been
accounted for using the acquisition method. The analysis of net assets
acquired and the fair value to the Group is as follows:
Book Note Fair value Fair value
value adjustments to Group
£m £m £m
------ ---------- ----------
Meadowhall Shopping Centre, Sheffield 1,170.0 1,170.0
Other fixed assets 1.0 1.0
Debtors 16.7 16.7
Cash 9.8 9.8
Creditors (10.6) a (36.5) (47.1)
Loans and finance leases (341.3) b,c (107.4) (448.7)
------ ---------- ----------
Net assets 845.6 (143.9) 701.7
====== ========== ==========
Consideration:
--------------
Option payment 100.0
Completion payment (net of discount) c 601.7
----------
Purchase consideration 701.7
==========
Cashflow impact:
----------------
Cash paid 705.0
Accrued consideration and discount (3.3)
----------
Purchase consideration 701.7
==========
a The fair value adjustment of £36.5 million relates to provisions for
pre-acquisition liabilities and charges, which have since mostly been paid.
b The principal fair value adjustment of £92 million was in respect of
the finance lease arrangements and related derivatives which have been
revalued to reflect their market value at the date of acquisition.
c The consideration paid on 1 November 1999 and borrowings assumed have
been discounted to their present value at the date of acquisition. The net
discount has been charged as interest payable over the period from acquisition
to 1 November 1999.
15 Purchase of Meadowhall Shopping Centre (continued)
Since acquisition the secured loan and finance lease obligations have been
refinanced from existing unsecured bank facilities as follows:
In December 1999 the £75 million secured bank loan was repaid.
On 6 March 2000 the Group discharged for £286.4 million the third
party secured finance lease obligations acquired with the purchase of the
Meadowhall Shopping Centre and assumed the related swaps liability to which
the fair value adjustment (note b above) refers. This was effected by the
purchase of five finance leasing companies from Lloyds TSB Leasing, Capital
Bank and HSBC Asset Finance.
Since the year end the above derivatives were closed out at a cost of
£74.8 million.
The unaudited summarised trading results and statement of recognised gains and
losses of Meadowhall Holdings Limited, and its subsidiaries for the period
from 2 October 1998 until the effective date of acquisition on 8 July 1999,
were as follows:
£m
------
Turnover 41.4
======
Operating profit 24.5
======
Loss before taxation (net of management fees of £7.9 million) (0.4)
Taxation
------
Loss after taxation (0.4)
Unrealised surplus on revaluation of properties 314.7
------
Total recognised gains and losses relating to the period 314.3
======
The audited consolidated profit after taxation for the previous financial year
ended 1 October 1998 amounted to £6.9 million.
Meadowhall Holdings Limited contributed £17.0 million to the Group's net cash
inflow from operating activities and £4.7 million to the Group's net cash
outflow before management of liquid resources and financing.
16 Share capital
Ordinary shares
of 25p each
---------------
Authorised 1 April 1999 and 31 March 2000 799,200,000
===============
£m
------
Issued and fully paid 1 April 1999 129.5 517,983,924
Issues 20,000
------ ---------------
Issued and fully paid 31 March 2000 129.5 518,003,924
====== ===============
17 Net Asset Value per share
2000 1999
Net Net
Shares Assets Shares Assets
m £m m £m
------ ------- ------ -------
Net Asset Value (undiluted)
---------------------------
Shareholders' funds as shown on balance sheet
518.0 3,449.6 518.0 3,117.8
====== ======
External valuation surplus on development
and trading properties 143.9 143.9
------- -------
Net assets attributable to ordinary shares 3,593.5 3,261.7
======= =======
Net Asset Value per share (undiluted) 694p 630p
======= =======
Fully diluted Net Asset Value
-----------------------------
Net assets attributable
to ordinary shares 518.0 3,593.5 518.0 3,261.7
Adjust to fully diluted on
conversion of:
6% Irredeemable Convertible Bonds 30.0 146.6 30.0 146.5
6.5% Convertible Bonds 2007 48.1 316.6 48.1 315.9
------ ------- ------ -------
Net assets attributable to fully
diluted ordinary shares 596.1 4,056.7 596.1 3,724.1
====== ======= ====== =======
Fully diluted Net Asset Value per share 681p 625p
The NAV includes the surplus of the external property valuation over the book
value of both development and trading properties. Such properties are included
in the balance sheet at the lower of cost and net realisable value.
18 Reserves
Profit
Share Other Revaluation and loss
premium reserves reserve account Total
£m £m £m £m £m
------- -------- ----------- -------- -------
At 1 April 1999 1,104.5 (7.9) 1,369.0 522.7 2,988.3
Issues 0.1 0.1
Retained profit 72.2 72.2
Realisation of prior year
revaluations (3.3) 3.3
Current year revaluation 259.9 259.9
Exchange movements on
net investments 6.7 (6.6) (0.5) (0.4)
------- -------- ----------- -------- -------
At 31 March 2000 1,104.6 (1.2) 1,619.0 597.7 3,320.1
======= ======== =========== ======== =======
The cumulative amount of goodwill written off against other reserves of the
Group is £14.6m (1999 - £14.6m).
19 Capital commitments
2000 1999
£m £m
------ ------
Contracted (including share of joint ventures - note 7) 239.6 182.3
====== ======
20 Contingent liabilities
It is estimated that, in the event of the realisation of all investment
properties and fixed asset investments at book value, the liability for tax,
after capital losses and available reliefs at 31 March 2000 would not be more
than £468m and at the total value of investment, development and trading
properties as shown in note 6, £509m (1999 - £202m and £245m respectively).
Contingent liabilities of the Parent for guarantees to third parties amounted
to £33.0m (1999 - £33.0m)
21 Basis of preparation
The Directors of The British Land Company PLC are responsible in accordance
with the Listing Rules of the Financial Services Authority and applicable
United Kingdom accounting standards for preparing and issuing this preliminary
announcement which was approved on 30 May 2000.
The financial information is extracted from the Group's full financial
statements for the year ended 31 March 2000 which were approved by the Board
of Directors on 30 May 2000 and which received an unqualified audit report.
The financial information is prepared on the basis of the accounting policies
set out in the Group's full financial statements for the year ended 31 March
2000, which are consistent in all material respects with the policies applied
in the Group's full financial statements for the year ended 31 March 1999.
The financial information is abridged and does not constitute statutory
accounts for the years ended 31 March 1999 and 31 March 2000. Full financial
statements for the year ended 31 March 1999 (which received an unqualified
audit report) have been filed with the Registrar of Companies. Full financial
statements for the year ended 31 March 2000 will be dispatched to shareholders
and placed before the Annual General Meeting on 14 July 2000.
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