27th Sep 2010 07:00
CareCapital Group Plc
("CareCapital" or "the Group")
Interim Report for the Six Months to 30 June 2010
CareCapital Group Plc (AIM: CARE), a healthcare real estate developer and investor in the UK and Germany, is pleased to announce its interim report for the six months to 30 June 2010.
Highlights
·; Group rental income down 35% to £1.1m (HI 2009: £1.6m) following disposal of UK portfolio
·; Adjusted diluted Net Asset Value ("NAV") per share* 12.2p (H1 2009: 18.5p)
·; Disposal of UK portfolio for £23.5m to PHP in February 2010
·; Loss before tax of £2m (H1 2009 Profit: £0.9m)
·; Development pipeline in the UK and Germany with a combined value of £42.7m
*Adjusted diluted net asset per share - excludes deferred tax on property portfolio revaluation. Calculated on a similar basis for 2009.
For further information, please contact:
| CareCapital Group Plc | Daniel Stewart & Co. Plc | Tavistock Communications |
|
Paul Stacey, Chief Executive Clive Hyman, Finance Director |
Oliver Rigby, Corporate Finance
|
Simon Hudson Paul Young
|
| Tel: 020 7034 1949 | Tel: 020 7776 6550 | Tel: 020 7920 3150 |
|
|
Chairman's Statement - six months to 30 June 2010.
I am pleased to report on the financial results for the CareCapital Group for the six month period to 30th June 2010.
The Group's principal activities are the development of and investment in medical office buildings and other healthcare related real estate in the UK and Germany.
As I reported in my statement introducing the 2009 Annual Report we disposed of a portfolio of 14 medical office buildings and ancilliary pharmacies etc in February 2010 and completed in March the development of our second medical office building in Adlershof, South East Berlin, in May. This building of 4,000 sq m is 90% tenanted and it is anticipated the remaining space will be let within the next few weeks.
These significant events during the six month period to 30 June 2010 mean that direct comparison between these financial results and those previously reported does not properly reflect the Group's progress.
At 30 June 2010 the Group's investment properties and developments in progress were valued at
£35.1m (31.12.09:£60m; 30.6.09 £57.6m). Adjusted diluted Net Asset Value per share (which excludes deferred tax on property revaluations) was 12.2p at 30 June 2010; (15.5p at 31.12.09). Costs associated with the sale of the UK medical centres, as reported above, including redemption penalties incurred on the repayment of the senior debt have been written off in the period. Group rental income for the six months under review was £1.1m; (2009: £1.6m.)
In the UK construction works started on the project in Coventry in August and it is anticipated works will commence on site for the West Wirral project in late October. Progress continues on the rest of the medical centre development programme.
In addition, as announced in August, significant steps have been taken in progressing the proton therapy development initiative through Proton Therapy Global Inc ("PTG") in which CareCapital has a 25% stake. At the time of writing this report PTG has entered into letters of intent with four major healthcare institutions in the US and one in the UK. A further seven potential projects are under discussion.
I remain convinced that the development of, and investment in, medical office buildings remains one of the most stable long term property related activities and that this will continue to be the case for the foreseeable future.
Dr Michael Sinclair,
Chairman
27th September 2010
|
CareCapital Group Plc |
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Consolidated statement of comprehensive income for the six months ended 30 June 2010 |
|
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||||||
|
|
|
|
|
|
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Six months |
Six months |
Year |
|
|
|
|
|
|
|
ended |
ended |
ended |
|
|
|
|
|
|
|
30-Jun |
30-Jun |
31-Dec |
|
|
|
|
|
|
|
2010 |
2009 |
2009 |
|
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
|
|
|
|
Notes |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
||
|
Revenue |
|
|
|
|
|
1,119,528 |
1,596,719 |
3,414,698 |
|
Cost of sales |
|
|
|
|
(200,768) |
(203,817) |
(455,296) |
|
|
Gross profit |
|
|
|
|
918,760 |
1,392,902 |
2,959,402 |
|
|
Administrative expenses |
|
|
|
(1,005,945) |
(939,268) |
(1,808,043) |
||
|
Impairment of goodwill |
|
|
|
- |
- |
(1,751,960) |
||
|
Loss on disposal of assets |
|
|
|
(279,635) |
- |
- |
||
|
Net gain /(loss) on fair value adjustment |
|
|
- |
- |
596,807 |
|||
|
Development costs written off |
|
|
- |
130,511 |
(502,032) |
|||
|
Operating profit / (loss) |
|
|
|
|
(366,820) |
584,145 |
(505,826) |
|
|
Finance income |
|
|
|
|
149 |
676 |
4,303 |
|
|
Finance costs |
|
|
|
|
(1,655,868) |
(1,464,826) |
(2,963,463) |
|
|
Change in fair value of financial instruments |
|
|
- |
- |
- |
|||
|
Net finance costs |
|
|
|
|
(1,655,719) |
(1,464,150) |
(2,959,160) |
|
|
(Loss) / profit before tax |
|
|
|
|
(2,022,539) |
(880,005) |
(3,464,986) |
|
|
Taxation |
|
|
|
|
|
- |
- |
1,696,466 |
|
(Loss) / Profit on ordinary activities after taxation |
|
(2,022,539) |
(880,005) |
(1,768,520) |
||||
|
(Loss) / Profit for the period |
|
|
|
|
|
|
||
|
- attributable to equity shareholders |
|
|
(2,002,462) |
(905,825) |
(1,903,049) |
|||
|
- attributable to minority interests |
|
|
20,077 |
25,820 |
134,529 |
|||
|
|
|
|
|
|
|
(2,022,539) |
(880,005) |
(1,768,520) |
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign operations |
|
|
|
|
|
(554,792) |
(960,581) |
(648,614) |
|
Total comprehensive loss for the year |
|
|
|
|
|
(2,577,331) |
(880,005) |
(2,417,134) |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income / (loss) attributable to : |
|
|
|
|
|
|
|
|
|
- Equity shareholders |
|
|
|
|
|
(2,541,929) |
(1,835,362) |
(2,486,802) |
|
- Non controlling interest |
|
|
|
|
|
(35,402) |
(5,224) |
69,668 |
|
|
|
|
|
|
|
(2,577,331) |
(1,840,586) |
(2,417,134) |
|
|
|
|
|
|
|
|||
|
Loss per Ordinary Share |
|
|||||||
|
|
|
|
|
|
|
(2.64)p |
(1.15)p |
(2.48)p |
|
Basic and diluted - total |
|
|
|
|||||
|
|
|
|
76,754 |
76,754 |
76,754 |
|||
|
Weighted average number of shares ('000) |
|
|||||||
|
CareCapital Group Plc |
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Consolidated statement of financial position at 30 June 2010 |
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|||||
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|
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As at |
As at |
As at |
|
|
|
|
|
30 June |
31 December |
30 June |
|
|
|
|
|
2010 |
2009 |
2009 |
|
|
|
|
|
Unaudited |
Audited |
Unaudited |
|
|
|
|
|
£ |
£ |
£ |
|
Non - current assets |
|
|
|
|
||
|
Intangible assets |
|
|
|
- |
1,751,959 |
|
|
Investment properties |
|
|
31,143,199 |
55,982,399 |
49,367,932 |
|
|
Development properties |
|
3,984,188 |
4,074,198 |
8,236,752 |
||
|
Leasehold improvements |
|
68,997 |
73,908 |
75,003 |
||
|
Plant and equipment |
|
|
35,835 |
47,199 |
62,247 |
|
|
|
|
|
|
35,232,219 |
60,177,704 |
59,493,894 |
|
Current assets |
|
|
|
|
|
|
|
Trade and other receivables |
|
477,550 |
512,571 |
314,274 |
||
|
Cash and cash equivalents |
|
13,082 |
268,573 |
178,216 |
||
|
|
|
490,632 |
781,144 |
492,490 |
||
|
|
|
|
35,722,851 |
60,958,848 |
59,986,384 |
|
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Total assets |
||||||
|
|
|
|
|
|
|
|
|
Current liabilities |
||||||
|
Trade and other payables |
|
(1,327,501) |
(2,453,857) |
(2,785,647) |
||
|
Borrowings, including finance leases |
(3,475,329) |
(9,207,414) |
(4,609,067) |
|||
|
Derivative financial instruments |
|
- |
- |
- |
||
|
Total Current Liabilities |
|
(4,802,830) |
(11,661,271) |
(7,394,713) |
||
|
|
|
|
|
|
||
|
Non - current liabilities |
||||||
|
Borrowings, including finance leases |
(21,565,485) |
(37,376,534) |
(38,408,437) |
|||
|
Deferred tax provision |
|
(406,954) |
(406,954) |
(2,103,420) |
||
|
|
|
|
|
(21,972,439) |
(37,783,488) |
(40,511,857) |
|
|
|
|
(26,775,269) |
(49,444,759) |
(47,906,571) |
|
|
Total liabilities |
||||||
|
|
|
|
8,947,582 |
11,514,089 |
12,079,813 |
|
|
Net assets |
||||||
|
|
|
|
|
|
|
|
|
Equity |
||||||
|
Share capital |
|
|
767,541 |
767,541 |
767,541 |
|
|
Share premium account |
|
|
1,397,500 |
1,397,500 |
1,397,500 |
|
|
Share option reserve |
|
423,078 |
412,254 |
401,430 |
||
|
Reverse acquisition reserve |
|
11,038,204 |
11,038,204 |
11,038,204 |
||
|
Exchange movements reserve |
|
(639,662) |
(140,349) |
(486,133) |
||
|
Profit and Loss account |
|
(4,249,134) |
(2,206,518) |
(1,209,294) |
||
|
Equity shareholders interest |
|
8,737,527 |
11,268,632 |
11,909,248 |
||
|
Non controlling interest |
|
|
210,055 |
245,457 |
170,565 |
|
|
Total equity |
|
|
8,947,582 |
11,514,089 |
12,079,813 |
|
|
CareCapital Group Plc |
|
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|||
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Consolidated statement of changes in equity for the six months ended 30 June 2010 |
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|||||||||
|
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|
|
Share |
Share |
Share |
Reverse |
Exchange |
Profit and |
Equity |
Minority |
Total |
|
|
rate |
||||||||||||
|
|
|
|
capital |
premium |
options |
acquisition |
movement |
loss account |
Shareholder |
Interest |
|
|
|
|
|
|
|
|
reserve |
reserve |
reserve |
|
Interest |
|
|
|
|
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at |
|
|
|
|
|
|
|
|
|
|
||
|
1 January 2009 |
|
767,541 |
1,397,500 |
390,606 |
11,038,204 |
443,404 |
(303,469) |
13,733,786 |
175,789 |
13,909,575 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate movement |
- |
- |
- |
- |
(929,537) |
- |
(929,537) |
(31,044) |
(960,581) |
|||
|
Loss for the period |
|
- |
- |
- |
- |
- |
(905,826) |
(905,826) |
25,820 |
(880,005) |
||
|
Total comprehensive |
|
|
|
|
|
|
|
|
|
|||
|
income |
|
- |
- |
- |
- |
(929,537) |
(905,826) |
(1,835,363) |
(5,224) |
(1,840,586) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based payment |
|
|
|
|
|
|
|
|
|
|||
|
- employee services |
|
- |
- |
10,824 |
- |
- |
- |
10,824 |
- |
10,824 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at |
|
|
|
|
|
|
|
|
|
|
||
|
30 June 2009 |
|
767,541 |
1,397,500 |
401,430 |
11,038,204 |
(486,133) |
(1,209,294) |
11,909,248 |
170,565 |
12,079,813 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at |
|
|
|
|
|
|
|
|
|
|
||
|
30 June 2009 |
|
767,541 |
1,397,500 |
401,430 |
11,038,204 |
(486,133) |
(1,209,294) |
11,909,248 |
170,565 |
12,079,813 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate movement |
- |
- |
- |
- |
345,784 |
- |
345,784 |
(33,817) |
311,967 |
|||
|
Loss for the period |
|
- |
- |
- |
- |
- |
(997,224) |
(997,224) |
108,709 |
(888,515) |
||
|
Total comprehensive |
|
|
|
|
|
|
|
|
|
|||
|
income |
|
- |
- |
- |
- |
345,784 |
(997,224) |
(651,440) |
74,892 |
(576,548) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based payment |
|
|
|
|
|
|
|
|
|
|||
|
- employee services |
|
- |
- |
10,825 |
- |
- |
- |
10,825 |
- |
10,825 |
||
|
costs of raising finance |
|
|
- |
|
|
|
- |
|
- |
|||
|
Balance at |
|
|
|
|
|
|
|
|
|
|
||
|
31 December 2009 |
|
767,541 |
1,397,500 |
412,255 |
11,038,204 |
(140,349) |
(2,206,518) |
11,268,633 |
245,457 |
11,514,090 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at |
|
|
|
|
|
|
|
|
|
|
||
|
1 January 2010 |
|
767,541 |
1,397,500 |
412,255 |
11,038,204 |
(140,349) |
(2,206,518) |
11,268,633 |
245,457 |
11,514,090 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate movement |
- |
- |
- |
- |
(499,313) |
- |
(499,313) |
(55,479) |
(554,792) |
|||
|
Loss for the period |
|
- |
- |
- |
- |
- |
(2,042,616) |
(2,042,616) |
20,007 |
(2,022,539) |
||
|
Total comprehensive |
|
|
|
|
|
|
|
|
|
|||
|
income |
|
- |
- |
- |
- |
(499,313) |
(2,042,616) |
(2,541,929) |
(35,402) |
(2,577,331) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based payment |
|
|
|
|
|
|
|
|
|
|||
|
- employee services |
|
- |
- |
10,824 |
- |
- |
- |
10,824 |
- |
10,824 |
||
|
Balance at |
|
|
|
|
|
|
|
|
|
|
||
|
30 June 2010 |
|
767,541 |
1,397,500 |
423,078 |
11,038,204 |
(639,662) |
(4,249,134) |
8,737,527 |
210,055 |
8,947,582 |
||
|
CareCapital Group Plc |
|
|
|
|
|
|
||
|
Consolidated statement of cash flows for the six months ended 30 June 2010 |
|
|||||||
|
|
|
|
|
|
|
Six months |
Six months |
Year |
|
|
|
|
|
|
|
ended |
ended |
ended |
|
|
|
|
|
|
|
30 June |
30 June |
31 December |
|
|
|
|
|
|
|
2010 |
2009 |
2009 |
|
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
|
|
|
|
|
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|||
|
(Loss) / Profit after taxation |
|
|
|
(2,022,988) |
(880,005) |
(1,769,520) |
||
|
Adjustments |
|
|
|
|
|
|
|
|
|
Taxation |
|
|
|
|
|
- |
- |
(1,696,466) |
|
Change in fair value of financial instruments |
|
|
- |
- |
- |
|||
|
Finance costs |
|
|
|
|
885,747 |
1,464,826 |
2,963,463 |
|
|
Finance income |
|
|
|
|
(149) |
(676) |
(4,303) |
|
|
Unrealised net revaluation gains on investment properties |
|
- |
(130,511) |
(596,807) |
||||
|
Impairment of goodwill |
|
|
|
- |
- |
1,751,959 |
||
|
Depreciation |
|
|
|
|
14,207 |
13,660 |
33,132 |
|
|
Write off of development properties |
|
|
22,482 |
69,649 |
502,032 |
|||
|
Share based payments |
|
|
|
10,824 |
10,824 |
21,648 |
||
|
Cash flows from operations before changes in working capital |
(1,089,877) |
547,767 |
1,206,138 |
|||||
|
Change in trade and other receivables |
|
|
34,970 |
150,907 |
(47,389) |
|||
|
Change in trade and other payables |
|
|
(1,126,355) |
890,256 |
556,477 |
|||
|
Cash (used) / generated from operations |
|
|
(2,181,262) |
1,588,930 |
1,715,226 |
|||
|
Interest paid |
|
|
|
|
(825,965) |
(1,252,236) |
(2,457,309) |
|
|
Cash flows from operating activities |
|
|
(3,007,227) |
336,694 |
(742,083) |
|||
|
Cash flows from investing activities |
|
|
|
|
|
|||
|
Sale of investment property |
|
|
|
23,248,860 |
- |
- |
||
|
Capital expenditure on development properties |
|
|
(791,775) |
(4,825,697) |
(6,305,031) |
|||
|
Capital expenditure on leasehold improvements |
|
|
- |
- |
(3,815) |
|||
|
Purchase of plant and equipment |
|
|
- |
(13,037) |
(13,199) |
|||
|
Profit from sale of developed properties |
|
|
|
280,935 |
- |
- |
||
|
Interest received |
|
|
|
|
149 |
676 |
4,303 |
|
|
Cash flows from investing activities |
|
|
22,738,169 |
(4,838,058) |
(6,317,742) |
|||
|
Cash flows from financing activities |
|
|
|
|
|
|||
|
New mortgage loans raised (Net) |
|
|
953,362 |
2,590,777 |
4,446,523 |
|||
|
Repayment of loans |
|
|
|
|
(21,326,542) |
(366,454) |
(823,382) |
|
|
Directors' loan (net of costs) |
|
28,500 |
- |
300,000 |
||||
|
Other short term loans |
|
|
|
|
|
- |
- |
950,000 |
|
Cash flows from financing activities |
|
|
(20,344,680) |
2,224,323 |
4,873,141 |
|||
|
Net decrease in cash and cash equivalents |
|
|
(613,738) |
(2,277,041) |
(2,186,684) |
|||
|
Cash and cash equivalents at 1 January |
|
|
268,573 |
2,455,257 |
2,455,257 |
|||
|
Cash and cash equivalents at closing |
|
|
(345,165) |
178,216 |
268,573 |
|||
|
Comprising: |
|
|
|
|
|
|
|
|
|
- Cash and cash equivalents |
|
|
|
13,082 |
178,216 |
268,573 |
||
|
- Bank overdrafts |
|
|
|
|
(358,247) |
- |
- |
|
|
- Total |
|
|
|
|
|
(345,165) |
178,216 |
268,573 |
CareCapital Group Plc
Notes to the accounts (Unaudited)
1. Basis of preparation
The interim report of the Groups results for the six months ended 30 June 2010 was approved by the Board on 27th September 2010.
The interim financial information has not been audited and does not constitute statutory accounts as defined under section 435 of the Companies Act 2006.
The interim financial statements have been prepared in accordance with applicable accounting standards and are consistent with those accounting policies adopted in the consolidated statutory accounts of CareCapital Group Plc for the year ended 31 December 2009, prepared under IFRS as adopted in the EU. The auditors' report on those accounts, which have been filed with the Registrar of Companies, was unqualified but did contain an Emphasis of Matter with respect of the ability of the Company and the Group to continue as a going concern. The auditors' report did not contain a statement under section 498(2) or 498 (3) of the Companies Act 2006.
In the Group's annual report and accounts, the Directors stated that additional working capital would be required to fund progress on several development projects, a number of funding options had been reviewed and negotiations were progressing to secure the required finance. Since then further options have presented themselves to the Board and are also under active review. The Directors continue to have reasonable expectations of securing funding which will enable the Group to meet its debt repayment, development programme and working capital requirements for a period in excess of twelve months.
Consequently, the financial statements have been prepared on a going concern basis. However, there can be no certainty that funding will be secured and this interim financial information does not contain any adjustments that might be necessary in the event that funding is not secured.
2. Investment Property valuations
At 30 June 2010 the Group's investment properties were valued at £31.1m (30.06.09 £49.4m) of which £3m (30.06.09 £26.8m) related to the UK portfolio and £28m (30.06.09 £22.6m) related to the German properties after conversion to sterling from Euros at an exchange rate of 1.2167 These values reflect the underlying position at 31 December 2009 uplifted for the completion of Adlershof 2 in the period.
|
3. Earnings per Share |
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|
|
|
|
||
|
|
|
|
|
|
Six months |
Six months |
Year |
|
|
|
|
|
|
ended |
ended |
ended |
|
|
|
|
|
|
30 June |
30 June |
31 December |
|
|
|
|
|
|
2010 |
2009 |
2009 |
|
Basic earnings per share |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
Basic earnings per share is calculated by dividing the profit |
|
|
|
||||
|
attributable to equity holders of the Company by the weighted |
|
|
|
||||
|
average number of ordinary shares in issue during the year, |
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
(Loss) / profit attributable to equity holders of the Company (£) |
(2,022,988) |
(905,825) |
(1,903,049) |
||||
|
Weighted average number of ordinary shares in issue (thousands) |
76,754 |
76,754 |
76,754 |
||||
|
(Loss) / earnings per share (pence per share) |
|
(2.64) |
(0.09) |
(2.48) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
The Company has two categories of dilutive potential ordinary shares - share options and warrants. A calculation is |
|||||||
|
undertaken to determine the number of shares which could have been acquired at fair value based on the |
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|
monetary value of the subscription rights attached to outstanding share options. It is compared with the |
|||||||
|
number of shares which would have been issued assuming the exercise of the share options. |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months |
Six months |
Year |
|
|
|
|
|
|
ended |
ended |
ended |
|
|
|
|
|
|
30 June |
30 June |
31 December |
|
|
|
|
|
|
2010 |
2009 |
2009 |
|
|
|
|
|
|
|
|
|
|
(Loss) / profit attributable to equity holders of the Company (£) |
(2,022,988) |
(905,825) |
(1,903,049) |
||||
|
Weighted average number of ordinary shares in issue (thousands) |
76,754 |
76,754 |
76,754 |
||||
|
Adjustment for share options (thousands) |
|
- |
- |
- |
|||
|
Weighted average number of ordinary shares for diluted |
|
|
|
||||
|
earnings (thousands) |
|
|
|
76,754 |
76,754 |
76,754 |
|
|
Diluted (Loss) / earnings per share (pence per share) |
|
(2.64) |
(0.09) |
(2.48) |
|||
6. Availability of Results
These results are available on the Company's website, www.carecapital.co.uk
Related Shares:
AVO.L