30th Nov 2005 07:00
Cardiff Property PLC30 November 2005 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES FOR RELEASE 7.00 AM 30 NOVEMBER 2005 The group, including Campmoss, specialises in property investment anddevelopment in the Thames Valley. The portfolio, valued in excess of £33m, isprimarily located to the west of London, close to Heathrow Airport and in Surreyand Berkshire. PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 AND DETAILS OF RULE 9 WAIVER HIGHLIGHTS Group turnover £2.7m (2004: £2.7m)Development property sales £1.1m (2004: £nil)Net asset value per share 1,025p (2004: 895p) + 15%Profit before tax £3.3m (2004: £1.8m) + 85%Earnings per share 143.6p (2004: 80.2p) + 79%Total dividend for the year 9.0p per share (2004: 8.0p) + 13%Final dividend 6.5p per share (2004: 5.8p)Gearing nil (2004: nil) Richard Wollenberg, chairman, commented: "Tenant demand for new Grade A office space located in the Thames Valleycontinued to be disappointing. In specific locations, completed lettings duringthe last quarter indicate a rise in headline rents and a reduction in landlords'incentives. There is still an overall reluctance of large corporates to committo new space. The market is improving in some areas, but a sustained recovery inthe demand for new office space in the Thames Valley is unlikely in the shortterm." For further information: The Cardiff Property plc Richard Wollenberg 01784 437444Arbuthnot Securities Richard Dunn 020 7012 2000 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANYAND ITS SUBSIDIARIES The group, including Campmoss, specialises in property investment anddevelopment in the Thames Valley. The portfolio, valued in excess of £33m, isprimarily located to the west of London, close to Heathrow Airport and in Surreyand Berkshire. PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 Chairman's Statement During the year under review, tenant demand for new Grade A office space locatedin the Thames Valley continued to be disappointing. Interestingly, however, inspecific locations such as Maidenhead, completed lettings during the lastquarter indicate a rise in headline rents and a reduction in landlords'incentives as part of the overall letting package. This recent take up hasdramatically reduced the supply of high-grade office space in such areas, aidedby a reduction in the number of new speculative office development schemes overthe past few years. The town of Maidenhead is sometimes considered a barometerof the Thames Valley office rental market, but I would add a note of cautionthat, despite this encouraging rental evidence, there is still an overallreluctance of large corporates to commit to new space. The market is improvingin some areas, but a sustained recovery in the demand for new office space inthe Thames Valley is unlikely in the short term. The demand for new business units, located within close proximity to the M4 andM25 motorways and Heathrow Airport, which offer a mixture of office andindustrial space has remained buoyant. These units are principally for the smallto medium sized business user where the market has also been encouraged by newlegislation making it particularly attractive to owner occupiers who prefer toacquire a freehold rather than paying rent. Interest remains high but over theyear rental levels have not improved. As a marked contrast, the level of investment activity in the freeholdcommercial property market remains remarkably high. The anticipation of rentalgrowth in the Thames Valley and lower rates of return available from competinginvestments, have led both pension and private funds to increase their exposureto the commercial property market. The demand is primarily towards newhigh-grade commercial property let on medium to long term leases. Competitionfor such investments have reduced yields and increased capital values. Asindicated later in this report, your directors have taken advantage of thisupturn in the investment market. In Surrey and Berkshire the residential market remains subdued. On the evidenceof completed sales, property values have not declined further. The number ofenquiries has certainly increased over recent months, but transactions, comparedto last year, are taking much longer to complete. Despite the difficult market conditions the group, including Campmoss PropertyCompany Limited our 47.62% joint venture undertaking, has performed well overthe year resulting in a further increase in the net asset value. For the year to 30 September 2005 profit on ordinary activity before tax was£3.26m (2004: £1.76m) including a contribution from Campmoss of £2.36m (2004:£0.81m). The contribution from Campmoss included a profit of £2.32m (2004:£0.03m) from the sale of investment properties, gross proceeds of which amountedto £14.68m. Turnover totalled £2.72m (2004: £2.68m) representing gross rentalincome of £1.61m (2004: £2.68m) and sales of development properties of £1.11m(2004: £nil). During the year Campmoss disposed of two freehold buildings at York Road andClivemont Road, Maidenhead. Both properties were sold to a leading UK PensionFund. In the case of York Road, sale proceeds amounted to £3.58m. The propertywas let on a 10 year full repairing and insuring lease earlier this year at anannual rental of £0.20m. Cannon Court, Clivemont Road, sale proceeds amounted to£11.1m. The property, let on a 15 year institutional lease, produced an averageannual rental of £0.66m over the first five years. These buildings, bothdeveloped by the group, returned a substantial annual gross rental income butyour directors felt that the sales levels achieved were very attractive. Theproceeds have been utilised to reduce borrowings and residual funds are held onshort term deposit. Net group profit attributable to shareholders amounted to £2.55m (2004: £1.54m).Earnings per share was 143.6p (2004: 80.2p). Dividend The directors recommend a final dividend of 6.5p per share (2004: 5.8p) making atotal dividend for the year of 9.0p (2004: 8.0p) an increase of 12.5%. The finaldividend will be paid on 9 February 2006 to shareholders on the register on 20January 2006. Financial The commercial and residential investment portfolio, valued annually by Cushman& Wakefield Healey and Baker and Aitchison & Raffety respectively totalled£5.44m. This figure includes property being developed at the Cordwallis Estate,Maidenhead, shown as a fixed asset in the balance sheet. Property underdevelopment and held for resale includes Ashleigh House, Virginia Water, threehouses at Rusham Road, Egham and The Windsor Business Centre, Windsor, all ofwhich are included in stock and work in progress. Gross assets of the group totalled £19.36m (2004: £16.88m) including our shareof the net assets of Campmoss of £7.23m (2004: £5.49m). The total propertyportfolio under management at the year end, including Campmoss, was valued at£33.86m. Net assets of the group were £18.19m (2004: £15.55m) equivalent to1,025p per share (2004: 895p), an increase over the year of 14.5%. The group has retained its existing bank borrowing facilities of up to £3.27m,whilst cash balances are placed on short term deposit pending completion of theexisting development projects and to enable further suitable acquisitions to beconsidered. The borrowing facilities were not utilised during the year underreview. During the year the company purchased for cancellation 8,000 ordinary shares fora total consideration of £76,031. The directors are proposing the annual renewalof their authority to continue the policy of acquiring shares and this will beplaced before shareholders at the annual general meeting to be held on 12January 2006. If this authority was to be used, or if I should exercise shareoptions previously granted to me, the combined holdings of my immediate familyand myself may exceed 30% of the issued share capital of the company. Under therules of the City Code on Takeovers and Mergers, we should then be required tomake a cash offer for the remaining issued share capital of the company. ThePanel on Takeovers and Mergers has agreed, subject to the consent ofshareholders, to waive the requirement to make an offer in either of thesecircumstances and an extraordinary general meeting will be held immediatelyafter the AGM to request such consent from shareholders. Full details are setout in a circular to be sent to shareholders. Commercial investments The investment portfolio comprises a range of office, industrial and retailbuildings located in Windsor, Egham, Cardiff and Maidenhead. In the first half of the year, one of the freehold units at The Windsor BusinessCentre was sold to an owner occupier and the remaining five units are currentlylet on short to medium term leases. The White House and Heritage Court, Egham, comprise a mixture of office andretail units. A lease of one of the smaller retail units at Heritage Court wassurrendered recently and negotiations are currently in hand for a new letting.The remaining units are let on medium term leases. At Cowbridge Road, Cardiff, the property is occupied by The Royal Mail on a 15year lease expiring in 2019. In Maidenhead, planning permission has been achieved for a 14,000 sq ftindustrial and office development. Construction commenced earlier in the yearand is expected to complete by the end of the calendar year. The building willbe divided into individual business units of between 2,000 and 5,000 sq ftoffering industrial use on the ground floor and office use on the first floor.These properties are currently being placed on the market for letting. Afreehold sale may be considered. The year end valuation for the company's properties, excluding new build, hasshown an increase in capital value of 5.7%. Residential At Egham, one of the four recently developed residential houses has been sold,one remains available for sale and the remaining two units are let on short termtenancies. At Ashleigh House, Virginia Water, the new 5 bedroom property remainsavailable for sale. Houses in Windsor and Egham continue to be held asinvestments and are let on yearly agreements. Campmoss Property Company Limited During the year, our joint venture undertaking, Campmoss, took advantage of thestrong investment market and disposed of two, recently developed, officebuildings located in Maidenhead, achieving a substantial surplus over bookvalue. Some borrowings have been repaid and residual cash has been placed onshort term deposit which will be used to further the company's developmentprogramme and allow suitable acquisitions. The existing investment portfolio located in the Thames Valley and to the westof London and Heathrow Airport includes freehold offices and land earmarked forresidential development at Maidenhead, Woking, Burnham, Worplesdon, Bracknelland Datchet. At the year end the portfolio has been valued by the directors, taking intoaccount external advice where available, and assessed at a current market valueof £25.71m (2004: £32.74m). The reduction over the year is as a result of thetwo freehold sales referred to earlier. The group's share of the rental incomereceived from 22 established tenants was £1.05m (2004: £1.95m) per annum. Datchet Meadows (formerly Jubilee Court), located on the outskirts of Datchet,Berkshire and close to the M4 motorway was acquired in the early part of theyear. Planning permission has now been obtained for 24 residential units.Further discussions to potentially increase the number of residential units atthis location are currently taking place with the Planning Department. At MarketStreet, Bracknell and Tangley Place, Worplesdon, lengthy consultations with theappropriate Planning Authorities continue. Progress is slow and it has takentime to be able to move to the submission of new revised planning applications.At Market Street, Bracknell, our proposals, as part of the Bracknellregeneration scheme, include provision for residential, retail and office space.At Worplesdon, plans are being prepared for a residential scheme rather than theprevious office proposal. At Highway House, Maidenhead, plans have been prepared for a new high-gradeoffice scheme and a planning application is expected to be submitted shortly. At the year end Campmoss had net borrowings totalling £7.07m (2004: £17.41m).Gearing was 47% (2004: 151%). Quoted investmentsThe company's small equity portfolio includes Tribal Group plc, The CelltalkGroup plc, IFX Group plc and General Industries plc. The market value of theseinvestments has increased over the year and is in excess of carrying value. Iremain a director of Celltalk and General Industries both of which are quoted onAIM. Management and staff Despite the difficult property market the group has been able to report anothersuccessful year, and I wish to take this opportunity of thanking my fellow boardmembers, our joint venture partners and our small management team in Egham fortheir support and achievements over the current year. Shareholders telephone dealing service This low commission share dealing facility provided by the company's registrars,Computershare Investor Services Plc, and used by a number of shareholders duringthe year has been renewed. The company is continuing to offer its free sharesale service to those shareholders who wish to dispose of holdings of 1,000shares or less. Shareholders should be aware that this service should not beconstrued as an encouragement to buy or sell the company's shares. If in anydoubt shareholders should contact their own financial advisors. Computersharecan be contacted on 0870 703 0084. Outlook Many market commentators are currently forecasting an upturn in activity.However, the number of new lettings reported remains below expectations.Headline rents for Grade A office space in specific Thames Valley locations haveseen small increases, but this uplift has not been applicable to the ThamesValley market as a whole. Whilst interest rates remain at a low level and theoverall economic outlook appears stable, there is potential for rental growth. Iam of the opinion that this optimism will take some time to percolate through tothe market place. Commercial property continues to offer attractive long termincome and capital growth opportunities and I therefore expect the investmentmarket to remain firm. Shareholders should appreciate that this year's figures have been influenced byour share of the disposal of two freehold properties. These disposals haveplaced the group in a strong financial position together with the benefit of aproperty portfolio which should benefit from any sustained recovery in ThamesValley located commercial property rents. The planning process is not becomingany easier as evidenced in this report. However, the group's office andresidential properties, which are the subject of planning discussions, are allwell located and once planning permission has been achieved they remain excitingprojects for the future. J Richard WollenbergChairman 29 November 2005 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANYAND ITS SUBSIDIARIES Consolidated profit and loss accountfor the year ended 30 September 2005 2005 2004 £'000 £'000Turnover Group and share of joint venture undertaking 2,719 2,679 Less: share of joint venture undertaking (1,047) (1,948) ______ ______Group turnover 1,672 731Cost of sales (722) (93) ______ ______Gross profit 950 638Administrative expenses (523) (471)Other operating income 282 316 ______ ______Operating profit Group 709 483 Share of operating profit in joint venture undertaking 639 1,387 ______ ______Total: group and share of joint venture undertaking 1,348 1,870 Profit on sale of investment property (group) - 460Profit on sale of investment property (share of jointventure undertaking) 2,322 31Profit on sale of other investments (group) 1 -Amounts written off investments (group) - (86) ______ ______Profit on ordinary activities before interest 3,671 2,275 Interest receivable and similar income Group 197 240 Share of joint venture undertaking 11 3Interest payable Group (5) (152) Share of joint venture undertaking (614) (608) ______ ______Profit on ordinary activities before taxation 3,260 1,758Tax on profit on ordinary activities Group (88) (86) Share of joint venture undertaking (625) (132) ______ ______Profit on ordinary activities after taxation being profit 2,547 1,540for the financial yearDividends (163) (140) ______ ______Retained profit for the financial year 2,384 1,400 ______ ______ The above results relate entirely to continuing activities. There were noacquisitions or disposals of businesses during the year. THE CARDIFF PROPERTY PUBLIC LIMITED COMPANYAND ITS SUBSIDIARIES Consolidated profit and loss accountfor the year ended 30 September 2005 (continued) Earnings per share 2005 2004 Pence per Pence per share shareOn profit for the financial year Basic 143.6 80.2 Diluted 142.4 78.7 === === Dividends 2005 2004 £'000 £'000 Interim paid 2.5p (2004: 2.2p) 45 46Reduction in interim dividend following redemption of own shares - (7)Increase in 2004 final dividend following Exercise of options 3 -Final proposed 6.5p (2004: 5.8p) 115 101 --- ---Total per share 9.0p (2004: 8.0p) 163 140 === === Consolidated statement of total recognised gains and lossesfor the year ended 30 September 2005 2005 2004 £'000 £'000 Profit for the financial year 2,547 1,540Unrealised surplus on revaluation of investment propertiesin the year Group 225 450 Share of joint venture undertaking - - ______ ______Total recognised gains and losses relating to the financial year 2,772 1,990 ______ ______ THE CARDIFF PROPERTY PUBLIC LIMITED COMPANYAND ITS SUBSIDIARIES Consolidated balance sheetat 30 September 2005 2005 2004 £'000 £'000 £'000 £'000 Fixed assets:Tangible assets: Investment properties 5,444 3,935 Other 4 5 ______ ______ 5,448 3,940Investments: Investment in joint venture undertaking Share of gross assets 12,903 16,651 Share of gross liabilities (5,678) (11,159) ______ ______ 7,225 5,492Other investments 303 311 ______ ______ 7,528 5,803 ______ ______ 12,976 9,743Current assetsStock and work in progress 2,701 3,423Debtors 328 2,369Cash at bank and in hand 3,356 1,349 ______ ______ 6,385 7,141 Creditors: amounts falling due within one year (890) (923) ______ ______ Net current assets 5,495 6,218 ______ ______Total assets less current liabilities 18,471 15,961Provisions for liabilities and charges (285) (413) ______ ______Net assets 18,186 15,548 ______ ______ Capital and reservesCalled up share capital 355 347Share premium account 4,946 4,850Investment property revaluation reserve 4,486 4,261Other reserves 2,292 2,291Profit and loss account 6,107 3,799 ______ ______Shareholders' funds - equity 18,186 15,548 ______ ______ THE CARDIFF PROPERTY PUBLIC LIMITED COMPANYAND ITS SUBSIDIARIES Consolidated balance sheetat 30 September 2005 (continued) 2005 2004 Pence per Pence per share share Net assets per share 1,025 895 === === THE CARDIFF PROPERTY PUBLIC LIMITED COMPANYAND ITS SUBSIDIARIES Consolidated cash flow statementfor the year ended 30 September 2005 2005 2004 £'000 £'000 Cash inflow/(outflow) from operating activities 3,423 (512)Returns on investment and servicing of finance 150 127Taxation (132) (361)Capital expenditure and financial investment (1,277) 3,010Equity dividends paid (149) (142) ______ ______Cash inflow before financing 2,015 2,122Financing 29 (5,168) ______ ______Increase/(decrease) in cash in the year 2,044 (3,046) ______ ______ Reconciliation of net cash flow to movement in net funds Increase/(decrease) in cash in the year 2,044 (3,046)Bank loan repaid - 3,200 ______ ______Increase in net funds 2,044 154Net funds at beginning of year 1,312 1,158 ______ ______Net funds at end of year 3,356 1,312 ______ ______ Reconciliation of operating profit to net cash inflow/(outflow) from operating activities Operating profit - group 709 483Depreciation charges 3 2Decrease/(increase) in stock and work in progress 722 (529)Decrease/(increase) in debtors 1,986 (454)Increase/(decrease) in creditors and provisions 3 (14) ______ ______Net cash inflow/(outflow) from operating activities 3,423 (512) ______ ______ THE CARDIFF PROPERTY PUBLIC LIMITED COMPANYAND ITS SUBSIDIARIES Summary preliminary resultsfor the year ended 30 September 2005 2005 2004 £'000 £'000 Turnover 2,719 2,679 Profit on ordinary activities before taxation 3,260 1,758 Taxation (713) (218) Profit for the financial year attributable to shareholders 2,547 1,540 Dividend: Interim 2.5p (2004: 2.2p) per share 45 46 Final 6.5p (2004: 5.8p) per share 115 101 Earnings per share: Basic 143.6 80.2 Diluted 142.4 78.7 Notes 1) Basic earnings per share has been calculated using the weighted average number of ordinary shares in issue during the year of 1,773,706 (2004: 1,920,304). Diluted earnings per share has been calculated in accordance with FRS 14. 2) The taxation charge represents tax on profits of the year. The basis is consistent with the financial statements for the year ended 30 September 2004. Full provision is made for deferred tax. 3) The board recommends that the final dividend be increased to 6.5p (2004: 5.8p) payable on 9 February 2006 to shareholders on the register at 20 January 2006, giving a total increase for the year of 12.5%. 4) The annual general meeting will be held on 12 January 2006. 5) The financial information set out above does not constitute the company's statutory accounts for the years ended 30 September 2005 or 2004. Statutory accounts for 2004 have been delivered to the Registrar of Companies and those for 2005 will be delivered following the company's annual general meeting. The financial information for 2005 has been prepared under the same accounting policies as those used in 2004. The auditor has reported on those accounts; their reports were unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. 6) A copy of the report and accounts will be submitted to the document viewing facility at the Financial Services Authority. 7) This statement was approved by the directors on 29 November 2005. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Cardiff Property