10th Sep 2007 07:03
Hansteen Holdings plc10 September 2007 10 September 2007 Hansteen Holdings PLC ("Hansteen" or, "the Company") Interim Results Hansteen Holdings PLC (AIM: HSTN), the pan European property investment company,announces Interim Results for the six months to 30 June 2007. Highlights• Pre tax profit for the period of £13.6 million (HY '06: £2.8 million).• Property assets of £229 million as at 30 June 2007 (FY '06: £145 million)• Net asset value of 123 pence per share on an EPRA basis as at 30 June 2007 (FY '06: 114 pence).• Property investment's valuation uplift of £9.2million. • Annualised net rental income at 30 June 2007 of £17.1 million. James Hambro, Chairman commented: "The Board remains confident of the prospectsfor the Company. Both the fundamentals of the properties acquired and theoccupational markets remain strong in the Continental markets in which weoperate. Hansteen will continue with its stated strategy to provide consistentand high returns to its investors through the creation of a high yieldingproperty portfolio in Continental Europe. The Company has a strong balancesheet, increasing market expertise and is well placed to acquire more propertiesin Continental Europe or to take advantage of opportunities which may arisein the UK." For further information: Morgan Jones/Ian WatsonHansteen Holdings plcTel: 020 7016 8820 Matt GoodeKBC Peel HuntTel: 020 7418 8900 Jeremy Carey/Rachel Drysdale/Matt RidsdaleTavistock CommunicationsTel: 020 7920 3150 CHAIRMAN'S STATEMENT I am pleased to report good results for the six months to 30 June 2007. This hasbeen a very active time for Hansteen with very good progress in all areas. During the period the Company achieved excellent profits, raised additionalequity capital, added a substantial amount of well-priced properties to itsportfolio and grew net assets. Additionally, on 1 May 2007, Hansteen Holdingspaid its first dividend of three pence per share from distributable reservesgenerated during the first year's trading. Results Profit before tax for the period was £13.6 million (2006: £2.8 million) with netassets as at 30 June 2007 of £212 million. Property As at 30 June 2007, the core portfolio comprised industrial and officeproperties valued at approximately £199 million, of which £97 million is in theNetherlands, £87 million is in Germany and £15 million in France. Theseproperties are currently generating a net annual rental income of £16.1 millionand have shown both rental and value growth during the year. The Company continues to focus on its four core continental markets: Germany,France, the Netherlands and Belgium. During this period, all properties acquiredwere in Germany and the Netherlands, but Hansteen expects to make furtherpurchases in France and announced its first acquisitions in Belgium today. The Company's business model for property investment in Europe continues to berobust. Firstly, all purchases made to date demonstrate a positive yield gapbetween the rental income yield and the Company's cost of finance. Secondly,in a number of cases, purchases presented active management opportunities whichwill, we believe, show good growth. Thirdly, given the superior yield and growthcharacteristics of Continental property combined with the difficulty ofassembling such portfolios, we continue to believe that such portfolios warranta premium price compared to the sum of the parts. Finally, a growing source ofnew business has come from owner occupiers seeking to sell and lease backproperties, particularly where such deals require understanding of the propertyfundamentals and access to equity finance. The Board believes that Hansteen,with a strong balance sheet and a growing reputation as an investment company,is well positioned to act as the purchaser of choice to vendors. Our non-core, opportunistic properties, representing approximately 11% of thetotal portfolio, continue to perform well . These include land in the UK,together with retail and residential property in Germany. Hansteen has starteda programme of refurbishment of the residential apartments in Wiesbaden,Germany. The improved apartments are commanding materially increased rentsover unrefurbished ones , demonstrating the value of this investment. Inaddition, Hansteen sold three flats and an entire house of apartments at aprofit earlier in the year. Finance The strong profits for the period and property valuation uplift resulted in an8% NAV per share uplift in the six month period. Gearing remains low atapproximately 3%. This gives us capacity to add a further £300 million to theportfolio whilst still retaining prudent gearing of around 60% loan to value. Weannounced today acquisitions which utilise £76 million of that capacity. Following the property revaluation, the Company's portfolio is yielding 7.5%which, despite the rise in interest rates during the period, compares favourablyto average borrowing costs. On 28 February, Hansteen announced a conditional placing of 53,435,115 sharesat a price of £1.31 per share, raising approximately £68.5 million of new cash,net of expenses. The placing was approved by shareholders at the ExtraordinaryGeneral Meeting on 23 March 2007. Outlook During the period, the Hansteen team grew from seven employees to ten, all highcalibre, experienced and committed to the business. We continue to strengthenour network, adding to our connections in continental Europe with newrelationships. The Board remains confident of the prospects for the Company. Both thefundamentals of the properties acquired and the occupational markets remainstrong in the Continental markets in which we operate. Hansteen will continuewith its stated strategy to provide consistent and high returns to its investorsthrough the creation of a high yielding property portfolio in ContinentalEurope. The Company has a strong balance sheet, increasing market expertiseand is well placed to acquire more properties in Continental Europe or to takeadvantage of opportunities which may arise in the UK James HambroChairman Hansteen Holdings plc. 10 September 2007 Consolidated income statementfor the six months to 30 June 2007 Period from Period from Period from 27 October 1 January 27 October 2005 2007 2005 to to to31 December 30 June 30 June 2006 2007 2006 £'000 £'000 £'000 Audited Note Unaudited Unaudited Continuing operations 16,012 Revenue 2 6,648 4,410 (8,395) Cost of sales (668) (1,714) -------- -------- -------- 7,617 Gross profit 5,980 2,696 (2,847) Administrative expenses 3 (1,768) (1,496) -------- -------- -------- Operating profit before gains 4,770 on investment properties 4 4,212 1,200 14,789 Gains on investment properties 9,215 - -------- -------- -------- 19,559 13,427 1,200 1,304 Gains on forward currency contracts 551 - 1,996 Finance income 1,115 1,713 (490) Finance costs (1,281) (91) 13 Changes in fair value of 260 - interest rate swaps (260) Foreign exchange losses (412) - -------- -------- -------- 22,122 Profit before tax 13,660 2,822 (6,792) Tax 5 (4,386) (903) -------- -------- -------- 15,330 Profit for the period 9,274 1,919 ======== ======== ======== Attributable to: 15,330 Equity shareholders 9,274 1,919 - Minority interests - - -------- -------- -------- 15,330 Profit for the period 9,274 1,919 ======== ======== ======== Earnings per share 13.3p Basic 6.0p 1.8p ======== ======== ======== 13.3p Diluted 6.0p 1.8p ======== ======== ======== Consolidated balance sheetas at 30 June 200731 December 30 June 30 June2006 2007 2006£'000 £'000 £'000Audited Unaudited Unaudited Non-current assets 28 Property, plant and equipment 32 25 139,593 Investment property 223,783 95,668 1,434 Derivative financial instruments 2,261 - -------- -------- -------- 141,055 226,076 95,693 -------- -------- -------- Current assets 5,151 Trading properties 5,223 5,355 2,485 Trade and other receivables 2,464 2,324 14,395 Cash and cash equivalents 47,191 26,864 -------- -------- -------- 22,031 54,878 34,543 -------- -------- -------- 163,086 Total assets 280,954 130,236 ======== ======== ======== Current Liabilities - Borrowings (9,384) - (3,333) Trade and other payables (4,748) (2,742) (1,675) Current tax liabilities (2,772) (763) -------- -------- -------- (5,008) (16,904) (3,505) -------- -------- -------- Non-current liabilities (15,689) Borrowings (44,640) - (4,517) Deferred tax liabilities (7,515) (457) -------- -------- -------- (20,206) (52,155) (457) -------- -------- -------- (25,214) Total liabilities (69,059) (3,962) ======== ======== ======== 137,872 Net assets 211,895 126,274 ======== ======== ======== Equity 12,500 Share capital 17,844 12,500 111,133 Share premium account 174,312 111,133 (1,142) Translation reserves (1,210) 701 15,381 Retained earnings 20,932 1,940 -------- -------- -------- 137,872 Equity shareholders' funds 211,878 126,274 - Equity minority interests 17 - -------- -------- -------- 137,872 Total equity 211,895 126,274 ======== ======== ======== 110.3p Diluted net asset value per share 118.7p 101.0p 114.6p EPRA net asset value per share 123.3p 101.2p Consolidated statement of changes in equityfor the six months to 30 June 2007 Share Share Translation Retained Minority capital premium reserves earnings interest Total £'000 £'000 £'000 £'000 £'000 £'000 Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Balance at 27 - - - - - -October 2005 --------- --------- --------- --------- --------- --------- Exchange differences arising on translationof overseas operations - - 1,018 - - 1,018overseas operations Tax on items takendirectly to equity - - (317) - - (317) --------- --------- --------- --------- --------- ---------Net incomerecognised directlyin equity - - 701 - - 701 --------- --------- --------- --------- --------- ---------Share based payments - - - 21 - 21Profit for the period - - - 1,919 - 1,919Ordinary sharesissued at a premium 12,500 112,500 - - - 125,000Costs of issue ofshares at a premium - (1,367) - - - (1,367) --------- --------- --------- --------- --------- ---------Balance at 30 June 12,500 111,133 701 1,940 - 126,2742006 ========= ========= ========= ========= ========= ========= Balance at 1 January 12,500 111,133 (1,142) 15,381 - 137,8722007 --------- --------- --------- --------- --------- --------- Exchange differencesarising ontranslation of - - 152 - - 152overseas operationsTax on items takendirectly to equity - - (220) - - (220) --------- --------- --------- --------- --------- ---------Net incomerecognised directlyin equity - - (68) - - (68) --------- --------- --------- --------- --------- ---------Share based payments - - - 27 - 27Profit for the - - - 9,274 - 9,274periodDividends - - - (3,750) - (3,750)Ordinary sharesissued at a premium 5,344 64,656 - - - 70,000Costs of issue ofshares at a premium - (1,477) - - - (1,477)Capital invested byminority interests - - - - 17 17 --------- --------- --------- --------- --------- ---------Balance at 30 June 17,844 174,312 (1,210) 20,932 17 211,8952007 ========= ========= ========= ========= ========= ========= Consolidated cash flow statementfor the six months to 30 June 2007 Period from Period from Period from 27 October 1 January 27 October 2005 2007 2005 to to to31 December 30 June 30 June 2006 2007 2006 £'000 £'000 £'000 Audited Note Unaudited Unaudited Net cash from/(used in) operating activities 292 6 3,811 (3,718) --------- --------- --------- 1,996 Interest received 1,114 1,711 Additions to property, plant (39) and equipment (11) (29) (126,823) Additions to investment properties (75,770) (94,644) Proceeds from sale of - 118 investment properties 453 - Additions to derivative (117) financial instruments (15) - --------- --------- --------- (124,865) Net cash used in investing (74,229) (92,962) --------- activities --------- --------- - Dividends paid (3,750) - 125,000 Proceeds from issue of shares 70,000 125,000 at a premium (1,367) Costs of issue of shares at a (1,477) (1,367) premium 15,335 New bank loans raised (net of 38,428 (91) expenses) Capital contribution from - minority shareholders 17 - --------- --------- --------- 138,968 Net cash from financing 103,218 123,542 --------- activites --------- --------- 14,395 Net increase in cash and cash 32,800 26,862 equivalents Cash and cash equivalents at - beginning of period 14,395 - - Effect of foreign exchange (4) 2 --------- rate changes --------- --------- 14,395 Cash and cash equivalents at ========= end of period 47,191 26,864 ========= ========= Notes to the Accounts for the six months ended 30 June 2007 1. General information Hansteen Holdings plc was incorporated in the United Kingdom under the Companies Act 1985 on 27 October 2005. The address of the registered office is 1 Berkeley Street, London W1J 8DJ. The Company was listed on AIM on 29 November 2005 and the comparative information covers the period from its date of incorporation on 27 October 2005 to 30 June 2006. The Group's principal activities are those of a property group investing mainly in industrial properties in continental Europe. Financial information The financial information contained in this report does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985 or complete financial statements under IAS 1 'Presentation of Financial Statements'. The results for the period ending 31 December 2006 are based on the audited accounts for that period, which have been reported on, without qualification by the auditors and have been delivered to the Registrar of Companies. The unaudited financial information presented in this document has been prepared on the basis of the accounting policies set out in the full accounts for the period ending 31 December 2006. This interim report has been prepared using accounting policies consistent with International Financial Reporting Standards ('IFRSs'). These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Company operates. The interim report was approved by the Board on 4 September 2007. 2. Revenue includes the following: Period from Period from Period from 27 October 1 January 27 October 2005 2007 2005 to to to 31 December 30 June 30 June 2006 2007 2006 £'000 £'000 £'000 Audited Unaudited Unaudited 7,760 Property rental income 6,648 2,857 8,252 Sales of trading properties - 1,553 ---------- --------- --------- 16,012 6,648 4,410 ---------- --------- --------- 1,977 Interest receivable on bank deposits 1,076 1,708 19 Other interest receivable 39 5 ---------- --------- --------- 1,996 1,115 1,713 ---------- --------- --------- 18,008 Total revenue in the period 7,763 6,123 ========== ========= ========= 3. Administration: The potential liability of the Group to payments which would fall due under the current four year long-term incentive plan which is due to end on 31 December 2009 has been reviewed. Projections for the Group were reviewed using the existing internal budgets and the proposed investment programme. Using assumptions of current interest rates, current exchange rates and current property yields no liability under the scheme would arise. 4. Operating profit includes £nil from the sale of trading properties (Period from 27 October 2005 to 30 June 2006: £104,000. Period from 27 October 2005 to 31 December 2006: £672,000). 5. Tax on profit on ordinary activities Period from Period from Period from 27 October 1 January 27 October 2005 2007 2005 to to to 31 December 30 June 30 June 2006 2007 2006 £'000 £'000 £'000 Audited Unaudited Unaudited 1,665 UK current tax 988 480 566 Foreign current tax 395 283 ---------- --------- --------- 2,231 Total current tax 1,383 763 4,561 Deferred tax 3,003 140 ---------- --------- --------- 6,792 4,386 903 ========== ========= ========= 6. Notes to the cash flow statement Period from Period from Period from 27 October 1 January 27 October 2005 2007 2005 to to to 31 December 30 June 30 June 2006 2007 2006 £'000 £'000 £'000 Audited Unaudited Unaudited 15,330 Profit for the period 9,274 1,919 6,792 Tax 4,386 903 ---------- --------- --------- 22,122 Profit before tax 13,660 2,822 (1,304) Gains on forward currency contracts (551) - (1,996) Finance income (1,115) (1,713) 490 Finance costs 1,281 91 (13) Changes in fair value of (260) - interest rate swaps 260 Foreign exchange losses 412 - ---------- --------- --------- 19,559 Operating profit 13,427 1,200 Adjustments for: (14,789) Gains on investment properties (9,215) - 51 Share-based employee remuneration 27 21 Depreciation of property, 10 plant and equipment 7 4 ---------- --------- --------- Operating cash flows before 4,831 movements in working capital 4,246 1,225 (5,151) Increase in trading properties (72) (5,355) (2,255) (Increase)/decrease in receivables 16 (2,318) 3,334 Increase in payables 1,420 2,730 ---------- --------- --------- 759 Cash generated by/(used in) operations 5,610 (3,718) (330) Income taxes paid (506) - (137) Interest paid (1,293) - ---------- --------- --------- Net cash from/(used in) 292 operating activities 3,811 (3,718) ---------- ========= ========= 7. Post Balance Sheet Events On 31 August 2007 the Group acquired 14 properties in Belgium with an approximate value of €54,276,000 (£36,532,000) and a total rent roll of €4 million (£2.7 million) per annum. The properties together with related debt are owned by nine Belgian companies. Hansteen paid €17,870,000 (£12,027,000) to acquire the equity in the companies. 8. The Interim Report and Accounts will be posted to shareholders and will be available from the Company's Registered Office at 1 Berkeley Street, London W1J 8DJ. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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