11th Jul 2005 07:00
St. Modwen Properties PLC11 July 2005 St. Modwen Properties PLC Interim results for the six months ended 31 May 2005 Another strong performance St. Modwen Properties PLC is a property development and investment companyconcentrating on regeneration. It has four particular areas of specialism: towncentre regeneration; partnering industry in its restructuring; renewal ofbrownfield land; and heritage restoration. Highlights * Profit before tax of £22.8m, a 3% increase on the exceptional 2004 performanceof £22.1m * Earnings per share up 1% to 13.0p (2004: 12.9p) * Interim dividend increased by 16% to 2.9p per share (2004: 2.5p) * Progress on major schemes at Farnborough, Edmonton and Wembley * Strong start to second half: profit of more than £15m already secured Anthony Glossop, Chairman, comments: "The trading progress I referred to at our AGM in April has continued. Ourdevelopment activities are running at record levels, we have successfullyacquired several significant sites for future development and are sellingcompleted developments and mature investments well. "We therefore remain on course to meet our long-term objective of doubling thenet worth of the company every five years, and I look forward with confidence toreporting record full year results for the thirteenth consecutive year." 11 July 2005 ENQUIRIES: St. Modwen Properties PLC www.stmodwen.co.ukAnthony Glossop, Chairman On 11 July - 020 7457 2020Bill Oliver, Chief Executive thereafter - 0121 456 2800Tim Haywood, Finance Director College Hill www.collegehill.comAlex Sandberg/Gareth David 020 7457 2020 A presentation will be held at 11.00am today at College Hill, 78 Cannon Street,London EC4 Print resolution images are available to view and download fromwww.vismedia.co.uk ST MODWEN PROPERTIES PLC INTERIM RESULTS FOR THE SIX MONTHS TO 31 MAY 2005 Chairman's Statement Interim Results I am very pleased to report that your company has had another strong first halfperformance, with profits before tax of £22.8m, a 3% increase on the exceptional2004 performance of £22.1m. Major contributions to these results were: • The sale of the North City shopping centre in Harpurhey, Manchester for £19m (an initial yield of 6.1%), construction of which was completed in the period. • The disposal of the second phase of the Shrub Hill Retail Park at Worcester for £5.1m (an initial yield of 6.2%). • Residential land sales at Norton Park, Stoke-on-Trent and Halebank, Widnes for £11.7m. • Sales of a number of office, business and trade park units on speculative schemes in Avonmouth,Birmingham, Halesowen, Huddersfield, Stoke-on-Trent, Walsall and Warrington for £17.7m. • Disposals of a number of investment properties where we felt that there was limited scope for us to add further value. These realised £18.7m, an average uplift of 14% on last year's valuation. • Earnings per share of 13.0p were 1% ahead of 2004. The results have been achieved after charging £3.3m (2004: £2.7m) of employeeshare option costs, a consequence of the significant increase in the share priceduring the period. Dividends These results together with the prospects for the full year have led the boardto declare a 16% increase in the interim dividend to 2.9p per ordinary share(2004: 2.5p) which will be paid on 2 September 2005 to shareholders on theregister at 5 August 2005. Current Trading The trading progress I referred to at our AGM in April has continued. Ourdevelopment activities are running at record levels, we have successfullyacquired several significant sites for future development and are sellingcompleted developments and mature investments well. The second half has commenced strongly: • We have sold our interest in the Kirkby Shopping Centre for £35.5m (an initial yield of 5.6%). The price achieved showed an uplift of 33% on our book value. We had completed our programme of active asset management and when we were not selected by the Council for the wider development we sold our interest to the selected party. • We have exchanged on or completed the sale of further tranches of residential land at Coalville and Hilton for £5.2m. • Construction is well advanced on a pre-sold 365,000 sq ft distribution facility for Pirelli near Burton upon Trent for £20.5m on our Centre 38 joint venture with Prologis, and on a 55,000 sq ft office at Yeovil pre-let to Screwfix. • Further forward sales of major industrial and distribution facilities have been exchanged with Rieter Automotive (100,000 sq ft) and Glen Dimplex (437,000 sq ft) at Trentham Lakes, Stoke-on-Trent. The land sale elements will be reflected in this year's figures with the construction elements reflected in next year's results. The combined effect of these and other transactions is that we have alreadysecured property profits of more than £15m for the second half of this year. The Hopper We have continued to add to the Hopper with a number of medium sizeopportunities. • In Burton upon Trent as part of the transaction with Pirelli we entered into a sale and leaseback of 350,000 sq ft of industrial buildings on 20 acres. The site, which has an extensive canal frontage, has longer term residential potential but can be used in the medium term for reuse of the existing buildings once Pirelli has vacated and whilst the longer term planning situation is progressed. • We have acquired two industrial complexes in Telford totalling 290,000 sq ft of existing buildings on 40 acres, including 22 acres of land for additional development. One of the sites has potential for some medium-term residential use but both are good, well-located employment opportunities. • We have entered into two transactions at Quedgeley, Gloucester, which bring our total land holding by Junction 12 of the M5 to over 100 acres. The first is a development agreement on 35 acres adjoining our existing Quedgeley East site, which should enable us to obtain a much-improved access to that site. The second is the acquisition of 15 acres of employment land in the Hunts Grove development. • In Weston-super-Mare we have acquired an existing let 55,000 sq ft storage building on 15 acres, which adjoins the major proposed housing area on the former airfield. • At Bedford and Hatfield, where we have been selected by the Councils as their development partner, we are continuing to acquire further interests to enable the schemes to be brought forward expeditiously. In a similar manner we have invested further at Harpurhey by acquiring a closed Kwik Save foodstore, still the subject of a lease to that company, to enable further development to be added to that successful scheme. A number of other opportunities are being pursued and we are well placed to meetour annual target of replacing assets used from the Hopper by at least 120%. Marshalling A key element in our strategy will always be marshalling schemes from the Hopperinto the active development programme. We have continued to make good progressin this regard. • Detailed planning consent has finally been obtained, after two judicial challenges, for the main phase of the proposed redevelopment of Farnborough town centre, where our interest is held through our Key Properties joint venture. We are now pursuing the required road closure permissions and seeking to agree final details with our anchor occupiers so that the scheme can proceed. • The demolition phase at Edmonton is complete and construction of the leisure centre, primary care facility, the two residential towers and associated retail is proceeding well. • At Wembley Central Shopping Centre, held through our joint venture with Rotch Property Group, we have exchanged agreements with Network Rail for the acquisition of the necessary interests to enable the scheme to proceed. Demolition should commence shortly which will be followed by construction of the social housing and hotel elements. Site assembly, supported by a CPO, will then clear the way for the remaining retail, leisure and private housing parts of the scheme. • We are continuing to work up proposals for the redevelopment of Elephant & Castle held in our Key Properties joint venture, having been selected by Southwark Borough Council as one of seven short-listed parties. In our AGM statement we reported on the position at Longbridge. Currently theAdministrator is remaining in occupation and is paying full rent. Whilst thefinal outcome of the Administration is still uncertain, we are co-operating withthe Administrator. Our aim is to provide a flexible approach which will ensurethat we obtain full rent for space retained by the Administrator whilst allowinghim to surrender space that is not required but is capable of independent accessand use. In the meantime, on the assumption that much, if not all, of the sitewill be handed back to us in due course, we are talking to all the relevantregional and local authorities with a view to expediting its re use as a majoremployment-led mixed-use site. On a lighter note we were delighted to have been associated with Laurent Perrierin sponsoring the gold medal winning Trentham Garden at Chelsea designed by TomStuart-Smith. The gardens at Trentham, Staffordshire are already giving morethan a hint of the wonderful display they will provide at maturity. Furtherphases are under discussion and will be brought forward progressively over thenext few years. The commercial side is performing well although the visitornumbers to the gardens will only build up over some time. The schemedemonstrates how a flagship regeneration scheme providing real quality can bedelivered within the private sector. Non-Executive Directors At the AGM, I reported that James Shaw, who had taken a position with UK Coaladvising that company on its property portfolio, had decided not to offerhimself for re-election. In the four years that James was with the company, heproved an extremely useful board member and his interest in and advice on anumber of our projects was of benefit both to the board and the executive team. I would, therefore, like to take this opportunity of thanking him for hissupport and wishing him every success in his new position. I am pleased to announce the appointment of Mary Francis, until recentlyDirector-General of the Association of British Insurers (ABI), as anon-executive director with effect from 1 June 2005. Mary brings extensive experience to St. Modwen, gained through the wide varietyof important public and private sector roles she has fulfilled. I am delightedto welcome her to the board, and am confident that she will make an importantcontribution to our business. Future Prospects The investment market is strong and appears likely to remain so. Theoccupational market is patchy, particularly in the office sector, but there isbusiness to be won on the right site if the product is competitive. The marketfor residential land continues to be buoyant and the mixed-use apartment sectorthat we address, which is affordable and owner-occupier led, is also holding up. We therefore remain on course to meet our long-term objective of doubling thenet worth of the company every five years, and I look forward with confidence toreporting record full year results for the thirteenth consecutive year. Anthony GlossopChairman ST MODWEN PROPERTIES PLC INTERIM RESULTS FOR THE SIX MONTHS TO 31 MAY 2005 Group Profit and Loss Account Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 May 31 May 30 Nov 2005 2004 2004 Note £'000 £'000 £'000 Turnover 1 81,046 63,833 130,140Group and share of joint ventures Less: share of joint ventures' turnover (8,344) (5,895) (12,886) 72,702 57,938 117,254 Operating profitGroup operating profit 25,484 18,394 33,801Share of operating profit in joint ventures 5,474 4,707 9,808Share of operating profit in associates 197 38 967 1 31,155 23,139 44,576 Profit on sale of fixed assets 1,916 6,852 12,964 Net interest payable 2 (10,309) (7,934) (17,202) Profit on ordinary activities before taxation 22,762 22,057 40,338 (6,527) (6,217) (9,861) Taxation Profit on ordinary activities after taxation 16,235 15,840 30,477 Equity minority interests (653) (425) (464) Profit attributable to shareholders 15,582 15,415 30,013Dividends (3,495) (3,007) (9,132)Transferred to reserves 12,087 12,408 20,881 Basic earnings per ordinary share 3 13.0p 12.9p 25.0p Dividend per ordinary share 2.9p 2.5p 7.6p ST MODWEN PROPERTIES PLC INTERIM RESULTS FOR THE SIX MONTHS TO 31 MAY 2005 Group Balance Sheet Unaudited Unaudited Audited at 31 May at 31 May at 30 Nov 2005 2004 2004 Note £'000 £'000 £'000Fixed assetsTangible fixed assets 4 373,615 328,484 367,238Investment in joint ventures Share of gross assets 151,025 123,185 147,765 Share of gross liabilities (108,740) (88,128) (105,777) 42,285 35,057 41,988Associated companies 10,201 9,566 10,167 426,101 373,107 419,393 Current assetsStocks 113,065 90,615 118,032Debtors 16,552 10,069 12,312Cash at bank and in hand 1,461 5,909 3,652 131,078 106,593 133,996 Creditors: amounts falling due within one year (74,402) (48,700) (47,098)Net current assets 56,676 57,893 86,898 Total assets less current liabilities 482,777 431,000 506,291Creditors: amounts falling due after more thanone year (192,133) (189,149) (230,513)Provisions for liabilities and charges (5,793) (2,962) (5,305)Equity minority interests (3,543) (3,062) (3,103)Net assets 281,308 235,827 267,370 Capital and reservesShare capital 12,077 12,077 12,077Other reserves 9,532 9,532 9,532Revaluation reserve 110,175 90,690 114,236Profit and loss account 150,285 124,986 133,499 282,069 237,285 269,344Own shares at cost (761) (1,458) (1,974)Equity shareholders' funds 5 281,308 235,827 267,370 Net assets per ordinary share 232.9p 195.3p 221.4pGearing 74% 80% 85% ST MODWEN PROPERTIES PLC INTERIM RESULTS FOR THE SIX MONTHS TO 31 MAY 2005 Group Cash Flow Statement Unaudited Unaudited 6 months 6 months to 31 May to 31 May 2005 2004 £'000 £'000 Net cash inflow from operating activities 40,005 6,566 Dividends received from joint ventures 1,500 1,250 Returns on investments and servicing of finance (6,695) (5,545) Taxation paid (6,779) (5,000) Capital expenditure and financial investment (4,408) (45,586) Acquisitions and disposals - (477) Equity dividends paid (6,135) (5,624)Cash inflow/(outflow) before use of liquid resources and financing 17,488 (54,416) Net cash (outflow)/inflow from financing (19,679) 60,233(Decrease)/increase in cash in the period (2,191) 5,817 Reconciliation of net cash flow to movement in net debt(Decrease)/increase in cash in the period (2,191) 5,817Cash inflow/(outflow) from change in debt 19,996 (60,233)Decrease/(increase) in net debt resulting from cash flows 17,805 (54,416)Net debt at 30 November (227,302) (134,968)Net debt at 31 May (209,497) (189,384) Reconciliation of operating profit to net cash flow from operatingactivitiesOperating profit 25,484 18,394Depreciation and amortisation 239 110Decrease/(increase) in stocks 4,967 (11,199)Increase in debtors (4,240) (760)Increase in creditors 13,555 21Net cash inflow from operating activities 40,005 6,566 ST MODWEN PROPERTIES PLC INTERIM RESULTS FOR THE SIX MONTHS TO 31 MAY 2005 NOTES TO THE ACCOUNTS 1. Turnover and Profit Analysis Unaudited Unaudited 6 months to 6 months to 31 May 2005 31 May 2004 Turnover Profit Turnover Profit £'000 £'000 £'000 £'000Rental income Group 17,550 15,765 16,597 14,114 Share of joint ventures 6,208 5,355 5,303 4,467 Property development Group 53,564 18,394 40,696 12,457 Share of joint ventures 2,136 160 592 270Other activities 1,588 208 645 (245) 81,046 39,882 63,833 31,063 Share of operating profit of associates 197 38 Administrative and other operating expenses Other operating expenses (5,578) (5,204) Employee share option costs (3,305) (2,728) Share of joint ventures (41) (30) Operating profit 31,155 23,139 2. Net Interest Payable Unaudited Unaudited 6 months 6 months To 31 May To 31 May 2005 2004 £'000 £'000 Group 7,248 5,457Joint ventures 2,906 2,355Associates 155 122 10,309 7,934 3. Earnings per Share Earnings per ordinary share are calculated as follows: (a) Basic earnings per ordinary share are calculated by dividing the profit attributable to ordinary shareholders of £15,582,000 (2004: £15,415,000) by the weighted average number of shares in issue during the year (which excludes the shares held for share incentive schemes which are owned by the group) of 120,228,189 (2004: 119,916,862). (b) As the group does not currently intend to issue shares to satisfy outstanding share options, there will be no dilution of earnings arising from the exercise of employee share options. There would be no material dilution of earnings per share if all shares currently held in the Employee Benefit Trust were allocated to the employees. 4. Tangible Fixed Assets Investment properties included in tangible fixed assets have been stated at theNovember 2004 valuation. Additions subsequent to the year end have been included at cost. 5. Reconciliation of Movements in Shareholders' Funds £'000 Profit attributable to shareholders 15,582Dividends (3,495) 12,087Tax on realisation of prior year revaluations 638 Net additions to shareholders' funds 12,725Net disposal of own shares 1,213Shareholders' funds 30 November 2004 267,370 Shareholders' funds 31 May 2005 281,308 6. Other Information (i) The abridged accounts for the year ended 30 November 2004 are an extract from the full group accounts for that period on which an unqualified report was made by the group's auditors and which have been delivered to the Registrar of Companies. The financial information contained in this interim statement, which is unaudited, does not constitute statutory financial statements as defined in Section 240 of the Companies Act 1985. (ii) The results for the six months ended 31 May 2005 are prepared in accordance with applicable accounting standards, using the same accounting policies as set out in the group accounts for the year ended 30 November 2004. (iii) All profits derive from continuing activities. (iv) The effective tax rate used for the period is 28.7%, which is in line with the expected full year rate. (v) The interim statement was approved by the board on 11 July 2005. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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