29th Nov 2007 07:00
Cardiff Property PLC29 November 2007 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES FOR RELEASE 7.00 AM 29 NOVEMBER 2007 THE CARDIFF PROPERTY PLC (The group, including Campmoss, specialises in property investment anddevelopment in the Thames Valley. The portfolio, valued in excess of £35m, isprimarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire.) PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2007 Highlights: 2007 2006Revenue £'000 700 2,442Property sales £'000 196 1,927Net assets per share pence 1,189 1,123 + 6%Profit before tax £'000 1,475 2,549 - 42%Earnings per share pence 74.5 137.6 - 46%Dividend per share - paid and proposed pence 11.25 10.05 + 12%Gearing % nil nil Richard Wollenberg, Chairman, commented: "The improvement in take up of new office space in the M4 corridor, forecast forthe latter part of 2007, has not materialised. The majority of propertyprofessionals remain optimistic of an improvement in the letting market but I amnot convinced that this will happen. Investment values for commercial, as wellas residential property, will, no doubt, come under further pressure. The ThamesValley, by virtue of its proximity to Heathrow Airport, will remain an importanttrading and commercial location and be attractive to a range of occupiers." For further information: The Cardiff Property plc Richard Wollenberg 01784 437444Arbuthnot Securities Richard Wood 020 7012 2000 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES (The group, including Campmoss, specialises in property investment anddevelopment in the Thames Valley. The portfolio, valued in excess of £35m, isprimarily located to the west of London, close to Heathrow Airport and in Surreyand Berkshire.) PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2007 Chairman's statement Dear shareholder The improvement in take up of new office space in the M4 corridor, forecast forthe latter part of 2007, has not materialised and, although some new officelettings have taken place, the Thames Valley market remains subdued. The strongletting market in Central London and the City of London had expected to benefitthe M4 corridor but to date the number of reported transactions has beendisappointing. Grade A headline office rents remain firm, although supported by incentives suchas rent free periods and landlords accepting tenant breaks at 5 and 10 yearintervals. The majority of property professionals remain optimistic of animprovement in the letting market but I am not convinced that this will happenin the short term. There is a lack of new grade A office space currentlyavailable within the Thames Valley and new office schemes have commenced intowns close to Heathrow such as Reading, Slough and Maidenhead. It will,however, be important that the letting of this new space is completed to sustainthe current optimistic mood. Uncertainty in the financial markets, the rise in interest rates and the realpossibility of a slow down in the UK economy has inevitably led to caution anddelayed activity in the commercial property sector. The removal in March nextyear of void rates relief on empty commercial buildings has added an additionalcost factor to speculative development projects and will play a significant rolein determining whether or not new developments are commenced without securing atenant. As a result of recent increases in interest rates the property investment markethas seen a decline in values of around 5% during the last quarter. Institutionaland private investors are awaiting clarity in the financial markets and signs ofimproving liquidity in the debt market. I do not expect a major collapse as somemarket operators seem to suggest but a further 5% fall in commercial propertyvalues is likely. In the residential market, although here again Central London has defied thetrend, asking prices have seen a decline of just over 5%. The tightening oflending conditions and worries surrounding the UK economy will inevitably leadto a further period of uncertainty. Surrey and Berkshire are not immune to thesemarket movements and I am of the opinion that this market will experience afurther fall in values. I do not subscribe to the view that the housing marketwill suffer a major decline in values. The financial market indicates that afall in interest rates may occur in the short term but I am sceptical that thiswill lead to any increase in values or activity over the next year. Theresidential market has seen a remarkable growth rate over the past few years andit should come as no surprise that the market will experience a reverse.Obtaining planning permissions for new detached homes within the regioncontinues to prove a long and difficult process and the lack of new projectscoming to the market will always provide a supportive base for values. Despite this uncertainty in the market the group, including Campmoss PropertyCompany Limited, our 47.62% jointly controlled entity, has achieved a furtherincrease in asset value per share, whilst operating profit has reduced as aresult of lower development property sales. Financial For the year to 30 September 2007 profit before tax was £1.48m (2006: £2.55m)including an after tax contribution from Campmoss of £0.66m (2006: £0.96m).Revenue totalled £0.70m (2006: £2.44m) which represented gross rental income of£0.50m (2006: £0.52m) and sales of development property of £0.20m (2006:£1.92m). The group's share of gross rental income of Campmoss amounted to £0.91m(2006: £0.93m). It should be noted, however, that these revenue figures are notincluded in group revenue under IFRS rules. Profit after tax attributable toshareholders for the financial year amounted to £1.30m (2006: £2.43m). Earningsper share was 74.5p (2006: 137.6p). The company's commercial and residential investment portfolio, which is valuedannually by Cushman & Wakefield and Aitchison Raffety respectively totalled£5.91m (2006: £5.73m). The portfolio excludes property under development orrefurbishment and held for re-sale which is held as stock on the balance sheetat the lower of cost or market value. At the year end, stock included commercialproperty at The Windsor Business Centre, Windsor. The group's property portfoliounder management at the year end, including the Campmoss investment anddevelopment portfolio was valued at £35.85m (2006: £34.46m). The company's shareof the net assets of Campmoss amounted to £8.62m (2006: £7.96m). Net assets were £20.64m (2006: £19.56m) equivalent to 1,189p per share (2006:1,123p) an increase of 5.9% over the year (2006: 13.4%). The group, including Campmoss, has adequate resources to complete the currentdevelopment programme. Certain facilities were repaid over the last two yearsfollowing sales of investment property. Cash balances are placed on short termdeposit. During the year the company purchased for cancellation 5,500 ordinary shares fora total consideration of £51,626. The directors are proposing the annual renewalof their authority to acquire shares and the rule 9 authority both of which willbe included in the resolutions to be placed before shareholders at the AnnualGeneral Meeting and Extraordinary General Meeting respectively to be held on 10January 2008. Dividend The directors are recommending a final dividend of 8.25p per share (2006: 7.30p)making a total dividend for the year of 11.25p (2006: 10.05p) an increase of11.9%. The final dividend will be paid on 7 February 2008 to shareholders on theregister on 18 January 2008. The Property Portfolio The group's investment portfolio continues to be primarily located to the westof London, close to Heathrow Airport and in the counties of Surrey andBerkshire. At The Maidenhead Enterprise Centre, Maidenhead, three units are now let andnegotiations continue for two further units. The development totals 14,000 sq ftand comprises six business units which offer fully carpeted offices on the firstfloor with industrial workspace on the ground floor. At The Windsor Business Centre, Windsor, one vacant unit has been re-letfollowing refurbishment. This is a similar development to that at Maidenhead andcomprises 5 business units totalling 15,600 sq ft. The remaining units are leton medium term leases. At The White House, Egham, a lease surrender for one of the retail units andsubsequent re-letting to a new tenant has been completed. A higher rental valuewas achieved and this should assist rent reviews on the remaining units whichare currently under negotiation. The group retains two houses in Egham, Surrey, which have been let on assuredshorthold tenancies. Campmoss Property Campmoss continues to retain freehold property located at Woking, Burnham,Bracknell, Maidenhead, Worplesdon and Slough. At Datchet Meadows, Slough, the vacant office building has been demolishedfollowing the grant of planning permission earlier in the year for 35 newresidential units. Development of the new scheme has now commenced andcompletion is expected during the middle of next year. A sales and marketingcampaign is currently in preparation. Obtaining planning permissions continues to involve long and detaileddiscussions with the relevant authorities. It is therefore pleasing to reportthat at Highway House, Maidenhead, permission was granted for a new 46,000 sq ftheadquarters office building. It is the intention to seek a forward lettingbefore commencing this development. At Clivemont House, Maidenhead, planning permission was granted last year for anew 50,000 sq ft headquarters office building on the existing office site.Discussions with new and existing tenants are taking place whilst thedevelopment programme is being formulated. The property has been partially leton a short term lease. At Bracknell, an outline planning permission for the New Town Centre Scheme hasbeen granted and our three properties at Market Street are included in the TownPlan. Discussions continue for our proposed retail, office and residentialdevelopment and a revised planning application is expected to be submitted thisyear. At Tangley Place, Worplesdon revised planning applications for a new 19,000 sqft headquarters office building and, as an alternative, a 70 room Care Home havebeen submitted. We await further meetings with the planning department toachieve a successful outcome. At the year end the portfolio, which include the above freehold properties, hasbeen valued by the directors, taking account of external advice where availableand assessed at a current market value of £28.88m (2006: £27.53m). Rental incomefrom the portfolio totals £1.91m (2006: £1.95m) and is received from twenty fourtenants. At the year end net borrowings totalled £6.71m (2006: £7.00m) andgearing was 36% (2006: 40%). Quoted Investments The group holds a small equity portfolio which includes Tribal Group Plc,ImmuPharma Plc, Kiwara Plc and General Industries Plc. The fair value of theseinvestments is currently in excess of cost. I remain a director of Kiwara Plcand General Industries Plc, quoted on AIM and Plus Markets respectively. Management & Staff The achievements in planning, letting and management of the group's propertiesare due to the dedication and hard work of our small team based in Egham and ourjoint venture partner. On behalf of shareholders I would wish to take this opportunity of thanking themfor their effort and support during the year. Shareholders Telephone Dealing Service The company continues to offer its free share sale service to those shareholderswho wish to dispose of holdings of 500 shares or less. This facility is providedby our registrars, Computershare Investor Services Plc. Shareholders should beaware that this service should not be construed as an encouragement to buy orsell the company shares. If in any doubt shareholders should contact their ownfinancial advisors. Computershare can be contacted on 0870 703 0084. Outlook Investment values for commercial and residential property will no doubt comeunder further pressure. The removal of relief for rates on empty commercialproperty, even if a tenant is being actively sought, will place a greateremphasis on finding occupiers for existing buildings and reduce the willingnessfor development ahead of securing a letting. The Thames Valley by virtue of its communications network, motorway access andclose proximity to Heathrow Airport will remain an important trading andcommercial location and be attractive to a range of occupiers. Location, qualityof space and available car parking facilities are important considerations. The group retains a portfolio of well located freehold property which provides a secure stream of rental income as well as the potential for a sizeable futuredevelopment programme. Key planning permissions have been secured during theyear and I remain confident that further successes will be achieved. I lookforward to reporting progress at the interim stage. J Richard WollenbergChairman28 November 2007 Consolidated Income StatementFOR THE YEAR ENDED 30 SEPTEMBER 2007 2007 2006 £'000 £'000Revenue 700 2,442Cost of sales (175) (1,467) ______ ______Gross profit 525 975Administrative expenses (463) (493)Other operating income 250 337 ______ ______Operating profit before gains on investmentproperties and other investments 312 819Profit on sale of investment property - 139(Loss)/profit on sale of other investments (7) 34Surplus on revaluation of investment properties 167 391 ______ ______Operating profit 472 1,383 Financing:Interest receivable and similar income 347 203Interest payable - -Share of results of jointly controlled entity 656 963 ______ ______Profit before taxation 1,475 2,549 Taxation (178) (121) ______ ______Profit for the financial year attributable to 1,297 2,428equity holders ______ ______ Earnings per share on profit for thefinancial year - penceBasic 74.5 137.6Diluted 73.8 136.4 ______ ______ DividendsFinal 2006 paid 7.30p (2005: 6.30p) 127 115Interim 2007 paid 3.00p (2006: 2.75p) 52 48 ______ ______ 179 163 ______ ______ Final 2007 proposed 8.25p (2006: 7.30p) 143 127 ______ ______ The above results relate entirely to continuing activities. There were noacquisitions or disposals of businesses during the period. Consolidated Balance SheetAT 3O SEPTEMBER 2007 2007 2006 £'000 £'000Non-current assetsInvestment properties 5,905 5,730Investment in jointly controlled entity 8,615 7,959Property, plant and equipment 2 4Other financial assets 340 357Deferred tax asset 22 37 ______ ______Total non-current assets 14,884 14,087 ______ ______Current assetsStock and work in progress 992 1,132Trade and other receivables 1,983 1,497Cash and cash equivalents 3,765 3,990 ______ ______ 6,740 6,619 ______ ______ Total assets 21,624 20,706 ______ ______Current liabilitiesCorporation tax (148) (316)Trade and other payables (482) (447) ______ ______ (630) (763) ______ ______Non-current liabilitiesProvisions (65) (115)Deferred tax liability (288) (272) ______ ______ (353) (387) ______ ______Total liabilities (983) (1,150) ______ ______Net assets 20,641 19,556 ______ ______Capital and reserves Called up share capital 347 348Share premium account 4,946 4,946Other reserves 2,300 2,299Investment property revaluation reserve 5,365 4,892Retained earnings 7,683 7,071 ______ ______Shareholders' funds attributable to 20,641 19,556equity holders ______ ______ Net assets per share 1,189p 1,123p ______ ______ Consolidated Cash Flow StatementFOR THE YEAR ENDED 30 SEPTEMBER 2007 2007 2006 £'000 £'000Cash flows from operating activitiesProfit for the year 1,297 2,428Adjustments for:Depreciation, amortisation and impairment 2 3Financial income (347) (203)Share of profit of jointly controlled entity (656) (963)Profit on sale of investment property - (139)Loss/(profit) on sale of other investments 7 (34)Loss/(profit) on disposal of fixed assets 1 -Surplus on revaluation of investment properties (167) (391)Fair value of options granted - 50Taxation 178 121Decrease in provisions (50) (162) ______ ______Cash flows from operations before changes inworking capital 265 710Decrease in stock 140 1,569Increase in trade and other receivables (486) (1,283)Increase/(decrease) in trade and other payables 35 (212) ______ ______Cash (absorbed by)/generated from operations (46) 784Tax paid (315) (81) ______ ______Net cash (out)/inflows from operating activities (361) 703 ______ ______ Cash flows from investing activitiesInterest received 347 209Acquisition of property, investments andplant and equipment (9) (238)Proceeds of disposal of property, investmentsand plant and equipment 29 458 ______ ______Net cash flows from investing activities 367 429 ______ ______ Cash flows from financing activitiesPurchase of own shares (52) (335)Dividends paid (179) (163) ______ ______Net cash flows from financing activities (231) (498) ______ ______ Net (decrease)/increase in cash and (225) 634cash equivalentsCash and cash equivalents brought forward 3,990 3,356 ______ ______Cash and cash equivalents at year end 3,765 3,990 ______ ______ Other Primary StatementsFOR THE YEAR ENDED 30 SEPTEMBER 2007 Consolidated statement of recognised income and expense 2007 2006 £'000 £'000Net change in fair value of available for salefinancial assets recognised directly in equity 19 -Profit for year 1,297 2,428 ______ ______Total recognised income and expense for theyear attributable to the equity holders of the 1,316 2,428parent company ______ ______ Notes to the Financial StatementsFOR THE YEAR ENDED 30 SEPTEMBER 2007 1. International Financial Reporting Standards The consolidated results for the year ended 30 September 2007 and 2006 areprepared by the group under applicable International Financial ReportingStandards adopted by the European Union ("adopted IFRS") which have been adoptedand incorporated into the principal accounting policies. 2. Segmental Analysis The primary format used for segmental analysis is by business segment, as thegroup operates in only one geographical segment. Segment results, assets andliabilities include items directly attributable to a segment as well as thosethat can be allocated on a reasonable basis. 2007 2006 £'000 £'000Revenue (wholly in the United Kingdom):Property and other investment being 504 515gross rents receivableProperty development being sale of 196 1,927development properties ______ ______ 700 2,442 ______ ______Profit before taxation:Property and other investment 1,424 1,886Property development 51 663 ______ ______ 1,475 2,549 ______ ______Net operating assets:AssetsProperty and other investment 20,871 19,845Property development 2,905 2,869Eliminations (2,152) (2,008) ______ ______Total assets 21,624 20,706 ______ ______LiabilitiesProperty and other investment 2,405 2,111Property development 318 483Eliminations (1,740) (1,444) ______ ______Total liabilities 983 1,150 ______ ______ Net operating assets 20,641 19,556 ______ ______ 3. Earnings per share Earnings per share has been calculated in accordance with IAS 33 - Earnings PerShare using the profit after tax for the financial year of £1,297,000 (2006:£2,428,000) and the weighted average number of shares as follows: Weighted average number of shares 2007 2006Basic 1,740,839 1,763,962Adjustment to basic for bonus elementof shares to be issued on exercise of options 17,814 16,046 _________ _________Diluted 1,758,653 1,780,008 _________ _________ Financial Calendar 2007 29 November Final results for 2007 announced2008 10 January Annual General Meeting 16 January Ex dividend date for final dividend 18 January Record date for final dividend 7 February Final dividend to be paid May Interim results for 2008 announced 30 September End of accounting year Directors and Advisers Directors AuditorJ Richard Wollenberg, KPMG Audit PlcChairman and chief executive David A Whitaker FCAFinance director Stockbrokers and financial advisersNigel D Jamieson BSc, MRICS, FSI, Arbuthnot Securities LtdIndependent non-executive director Secretary BankersDavid A Whitaker FCA HSBC Bank Plc Non-executive director of wholly owned subsidiary SolicitorsFirst Choice Estates plc Charles RussellDerek M Joseph BCom, FCIS, MSII Morgan Cole Head office Registrar and transfer office56 Station Road Computershare Investor Services PlcEgham PO Box 82Surrey TW20 9LF The PavilionsTelephone: 01784 437444 Bridgwater RoadFax: 01784 439157 Bristol BS99 7NHE-mail: [email protected] Telephone: 0870 702 0001Web: www.cardiff-property.com Dealing line: 0870 703 0084 Registered office Registered numberMarlborough House 22705Fitzalan CourtFitzalan RoadCardiff CF24 0TE This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Cardiff Property