15th Aug 2007 07:32
Westbury Property Fund Limited15 August 2007 The Westbury Property Fund Limited Unaudited Interim Report for the six months ended 30 June 2007 Chairman's Statement For the period from 1 January 2007 to 30 June 2007 This has been another successful period for The Westbury Property Fund with anexciting outlook ahead. In line with the Company's stated strategy ofrepositioning itself as an asset backed logistics business, the Board announcedin January 2007 that it was considering a disposal of a substantial part of itswholly owned property portfolio. I am pleased to announce that the Company has agreed to dispose of the majorityof its wholly owned property portfolio for £142.1m. The sale will realise theexcellent performance achieved to date for shareholders and is a significantstep for the Company in meeting its new strategic objectives. At the same time the Company has agreed to merge with Eddie Stobart Holdings(Stobart Group), a long established and highly successful logistics business.The merger will bring together Stobart Group's established contract logisticsoperations with the emerging multi modal port and rail operations of theCompany. This merger provides the enlarged group with a strong asset base whichcan be used to fund the future growth of the combined business. The mergeroffers both considerable synergies and significant value in the ability to offercustomers a logistics solution incorporating national road, rail and both deepsea and inland waterway networks. It is the Board's intention that the enlargedGroup re-names itself as Stobart Group Limited thereby benefiting from itsexcellent brand. The merger will be effected through the acquisition of Stobart Group by theCompany for £137.7m in cash and new Ordinary Shares and completion of thedisposal and merger is expected to take place in September 2007. Stobart Groupbenefits from strong management and its acquisition, along with disposal of theproperty portfolio, will lead to termination of the Company's investmentmanagement agreement with Assura Fund management LLP. Full details and thereasons behind the proposals can be found in the Circular and Prospectus. Boththe sale of the property portfolio and the merger with Stobart Group, andconsequential termination of the investment management agreement, areconditional on the approval of shareholders. Net Asset Value and Dividend Policy As at 30 June 2007, the unaudited net asset value per share due to ordinaryshareholders was 164.71p compared to 169.10p as at 31 December 2006. Thisfigure fully provides for both the termination of the investment managementagreement and the payment of the performance fee due to the investment manager.Assuming the investment management agreement were not to be terminated, the NAVgrew to 175.35p as at 30 June 2007 from 169.10p at the 2006 year end on alike-for-like basis. It is the Board's intention, following agreement to the above proposals, thatthe year end will be changed to 28 February, in line with that of Stobart Group.Furthermore that dividend payments on Ordinary Shares will be made twiceyearly with an interim and final dividend payable effective October and Mayrespectively. The Board is today declaring an interim dividend of 2.70p perOrdinary Share for the 14 month period ending 28 February 2008. This is inaddition to the quarterly dividends already paid on the Ordinary Sharessummarised in note 6. Following an application to the Royal Court of Guernsey, £99,925,500 wastransferred from the Share Premium account to Distributable Reserves on 22 June2007. Westlink Group Limited In March 2007 the company acquired, for £33.5m, AHC Westlink Limited (formerlyAHC Warehousing Limited), together with some 100 acres of land, 650,000 sq ft ofwarehousing and four rail sidings in Widnes from which the company operates.The acquisition of an established and profitable warehousing and distributionbusiness is key to the company's growth strategy and provides a number ofdevelopment opportunities and operational synergies with the existing operationsbased out of the Port of Weston at Runcorn. Terms have also been agreed to acquire, for £23m, the entire share capital ofO'Connor Group Management Limited (O'Connor Group), a profitable logisticsbusiness with 6 rail sidings on its freehold site of around 40 acres adjacent tothat of AHC Westlink at Widnes. The combination of O'Connor Group and AHCWestlink will create one of the UK's largest rail freight hubs and, working inpartnership with Halton Borough Council, will comprise the core of the largerinternational multi modal freight gateway strategically located in the heart ofthe North West and very close to the Company's Port of Weston. I am pleased to report that encouraging progress is being made at the Port ofWeston where the Company is committed to the development of an inter modaltransport facility providing road, rail, deep sea and inland waterwayconnectivity. The company's rail freight subsidiary, Victa Westlink Rail, is now providing arail freight train service offering inter modal customers aggregated loadopportunities between the south-east ports and Scotland in addition toundertaking ad hoc services. The 75% owned subsidiary has concluded thepurchase of the business of FM Rail from the administrator following the recentgrant to the company of Passenger and Freight Operating Licences by the Officeof Rail Regulation. Joint Venture Property Investments The Company's joint venture investments will continue to be realised accordingto individual business plans so that returns can be maximised. It isanticipated that the proceeds from future sales of these investments will bere-invested into the combined Stobart Group business. I am particularly delighted with the strong performance shown by the Company'scentral London joint venture investments in Mid City Place, High Holborn, LondonWC1 and Plantation Place, Fenchurch Street, London EC3. Both have benefitedfrom the keen demand for good quality, well let investment property in London,which together with rental growth, has generated performance ahead of originalexpectations. The Company's interest in DV3 Mid City Limited has been sold veryrecently realising £21.4m and the Company may look to crystallise theperformance already achieved at Plantation Place given the recent cooling in thewider property market notwithstanding ongoing rental growth in the City. In addition, the Company has seven other joint venture investments havingacquired, during the period, a 50% stake in a mixed use investment on TottenhamCourt Road, London W1. Post the portfolio disposal, one asset will remainwholly owned. In addition to Mid City Place and Plantation Place, good progressis being made with the other investments. The majority of the site in Ware hasnow been sold very profitably out of the associated company in which the Companyholds a 47.5% stake. A resolution to grant planning permission, subject to aSection 106 agreement, for a change of use of the Stoughton Grange site has alsonow been granted. The Fund holds a 50% stake in the joint venture company whichacquired the site in January 2007. Full Year Outlook The acquisition of and merger with Stobart Group, together with the disposal ofthe majority of the wholly owned portfolio and acquisition of O'Connor Group aresignificant and exciting steps in the evolution of the Company from a propertyinvestment company into an asset backed, storage, handling and multi modallogistics business. I refer you to the Circular and Prospectus for further details of the proposals.I commend these to you and confirm they will have the Board's full support. Rodney Baker-Bates Chairman 14 August 2007 Unaudited Consolidated Income Statement For the period 1 January 2007 to 30 June 2007 1/01/2007 1/01/2006 to to 30/06/2007 30/06/2006 Unaudited Unaudited £ £IncomeRent receivable 3,749,075 3,509,723Storage, handling and transport sales 2,891,125 -Bank and other interest 1,436,316 96,241 Total Income 8,076,516 3,605,964 ExpensesInterest payable and similar charges, includingdistributions on Income Shares 2,755,468 2,596,568Storage, handling and transport costs 2,726,698 -Investment Manager's fees 1,643,623 1,083,736Salaries 1,000,256 -General expenses 414,451 88,891Legal and professional fees 351,966 222,217Property management expenses 341,249 181,862Administration fee 105,577 76,648Audit and tax fees 77,092 21,190Depreciation 59,623 -Directors' fees 52,233 44,000Bank charges 12,378 12,122 Total Expenses 9,540,614 4,327,234 Net loss before investment result (1,464,098) (721,270) Realised gain on sale of investment properties - 21,566Realised loss on sale of investment (67,345) -Movement in unrealised gain on revaluation of properties 3,686,973 7,167,605Movement in unrealised gain on revaluation of investments 9,622,829 16,253,851Exceptional Investment Manager's termination fee (see note (10,698,400) -7)Performance fee (see note 7) (989,911) (5,225,842)Share of profit of associated company 20,923 - Profit before taxation 110,971 17,495,910 Taxation (5,290) 3,863 Profit for the half year 105,681 17,499,773 Basic and diluted profit per Ordinary Share 0.11p 31.94pDividend per Ordinary Share (see note 6) 4.50p 4.50p Unaudited Consolidated Balance Sheet as at 30 June 2007 30/06/2007 31/12/2006 Unaudited Audited £ £Non-current Assets Investment properties 143,162,500 139,445,750 Investments in associates and joint ventures 55,061,978 70,612,226 Property, plant and equipment 43,081,419 11,084,111 Other investment 250,000 250,000 Goodwill 5,497,692 3,812,597 247,053,589 225,204,684 Current Assets Cash and cash equivalents 8,383,101 39,830,507 Debtors 5,959,593 3,292,798 14,342,694 43,123,305 Non-current Assets classified as held for sale 21,431,043 -Total Assets 282,827,326 268,327,989 Current Liabilities Creditors 21,439,097 4,209,329 Provisions (see note 7) 10,698,400 - 32,137,497 4,209,329 Non-current Liabilities Creditors 528,664 9,618,133 Long-term loan 79,462,060 79,399,740 Income Shares 5,191,721 5,177,184 85,182,445 94,195,057 Total Liabilities 117,319,942 98,404,386 Net Assets 165,507,384 169,923,603 Represented by: Capital and Reserves Share capital 10,048,665 10,048,665 Share premium - 99,925,500 Distributable 99,925,500 - reserve Revaluation 339,885 339,885 reserve Retained earnings 55,193,334 59,609,553 Issued capital and reserves 165,507,384 169,923,603 Net Asset Value per Ordinary Share 164.71p 169.10p The unaudited financial statements on pages 6 to 11 were approved at a meeting of the Board ofDirectors held on 14 August 2007 and signed on its behalf by:Tim Chesney, DirectorWilliam Kay, Director Unaudited Consolidated Statement of Changes in Equity For the period from 1 January 2007 to 30 June 2007 Share Share Distributable Revaluation Retained Reserves Capital Premium Reserve Reserve Earnings £ £ £ £ £ £ Balance at 1 January 10,048,665 99,925,500 - 339,885 59,609,553 169,923,6032007Transfer from share - (99,925,500) 99,925,500 - - -premium (1)Dividends on Ordinary - - - - (4,521,900) (4,521,900)SharesProfit attributable to - - 105,681equity holders - - 105,681 Balance at 30 June 2007 10,048,665 - 99,925,500 339,885 55,193,334 165,507,384 Share Share Distributable Revaluation Retained Reserves Capital Premium Reserve Reserve Earnings £ £ £ £ £ £ Balance at 1 January 5,173,462 39,698,503 - - 20,823,413 65,695,3782006Issue of Ordinary 4,875,203 - 65,102,200Shares, 60,226,997 - -net of issue costsDividends on Ordinary - - - - (3,990,561) (3,990,561)SharesProfit attributable to - - - - 42,776,701 42,776,701equity holdersRevaluation of land and - - - 339,885 - 339,885buildings Balance at 31 December 10,048,665 99,925,500 - 339,885 59,609,553 169,923,6032006 (1) Following an application to the Royal Court of Guernsey, £99,925,500 was transferred from SharePremium account to Distributable Reserves on 22 June 2007. Unaudited Consolidated Cash Flow Statement For the period from 1 January 2007 to 30 June 2007 1/01/2007 1/01/2006 to to 30/06/2007 30/06/2006 Unaudited Unaudited £ £Operating ActivitiesRent received 3,623,881 3,540,530Interest received 1,350,366 77,086Storage and handling sales 2,891,125 -Expenses paid (4,246,637) (1,798,792)Storage and handling costs (2,726,698) -Interest paid and similar charges, includingdistributions on Income Shares (2,687,784) (2,423,064) Net cash outflow from operating activities (1,795,747) (604,240) Investing ActivitiesPurchase of investments - (19,948,734)Acquisition of subsidiary (see note 9) (12,709,289) -Acquisition of subsidiary - cash acquired (see note 9) 5,709,399 -Net loans repaid by (advanced to) investments 3,831,766 (2,106,220)Purchase of properties (29,777) (9,268,692)Sales of properties - 8,621,566Property, plant and equipment acquired (23,458,346) -Sale of fixed assets 19,188 - Net cash outflow from investing activities (26,637,059) (22,702,080) Financing ActivitiesIssue of Ordinary Shares - 6,725,499Issue costs paid on issuance of Ordinary Shares - (226,325)Dividends paid on Ordinary Shares (3,014,600) (1,629,640)Draw down of long term loan - 16,500,000Additional loan issue costs - (192,131) Net cash (outflow)/inflow from financing activities (3,014,600) 21,177,403 Decrease in cash and cash equivalents (31,447,406) (2,128,917) Cash and cash equivalents at 1 January 39,830,507 6,395,313 Cash and cash equivalents at 30 June 8,383,101 4,266,396 Notes to the Unaudited Financial Statements For the period from 1 January 2007 to 30 June 2007 1. The results for the six-month period, which are not statutory accountsand have not been audited, have been prepared on the same basis as set out in the audited accounts for the year ended 31 December 2006. 2. The results for the year ended 31 December 2006 constitutenon-statutory accounts extracted from the statutory accounts for that period onwhich the auditors gave an unqualified report. 3. All turnover and operating profit arose from continuing operations. 4. Basic and diluted profit per Ordinary Share is based on profitattributable to equity holders for the period and on 100,486,657 Ordinary Shares(30 June 2006 - 54,792,969), being the weighted average number of equivalentOrdinary Shares in issue. 5. Distributions payable on Income Shares: 1/01/2007 1/01/2006 No. of Rate to Rate to Income pence 30/06/2007 pence 30/06/2006 Shares 2007 £ 2006 £ First interim distribution 5,271,678 2.00 105,434 2.00 105,434 paid 3 May 2007 (declared March 2007)Second interim 5,271,678 2.00 105,434 2.00 105,434distribution paid 20 July 2007 (declared June 2007) 210,868 210,868 6. Dividends payable on Ordinary Shares: 1/01/2007 1/01/2006 No. of Rate to Rate to Ordinary pence 30/06/2007 pence 30/06/2006 Shares 2007 £ 2006 £ Final dividend for 2006 100,486,657 1.50 1,507,300 1.50 776,019 paid 24 January 2007 (2006 - 51,734,625)(declared December 2006)First interim dividend 100,486,657 1.50 1,507,300 1.50 853,621 paid 3 May 2007 (2006 - 51,734,625)(declared March 2007)Second interim dividend 100,486,657 1.50 1,507,300 1.50 853,621 paid 20 July 2007 (2006 - 51,734,625)(declared June 2007) 4,521,900 2,483,261 7. A performance fee of £989,911 is due to Assura Fund Management LLP,the Investment Manager, for the half year to 30 June 2007 (£5,225,842 for thehalf year to 30 June 2006). In addition to this, a termination fee has beencalculated and provided for at £10,698,400 as at 30 June 2007 in accordance withthe contractual arrangements with the Investment Manager whose contract is to beterminated. Upon termination the accrued performance fee of £10.6m will becomepayable by way of new shares issued. The termination fee will be payable incash. Messrs R. Burrell and N. Rawlings, who are members of the Investment Committeeof the Company, are Chief Executive Officer and Chief Financial Officerrespectively, and also hold shares in Assura Group Limited, the ultimate holdingcompany of Assura Fund Management LLP. 8. The figures for investment properties at 30 June 2007 and 31 December2006 are based on valuations determined by Knight Frank. 9. Acquisition of AHC Westlink Limited (formerly AHC Warehousing Limited) and related companies £ Consideration paid 12,500,000 Cost of acquisition 209,289 12,709,289 Net assets acquired 11,449,066 Cash acquired at date of acquisition 5,709,399 Simultaneously the Company acquired land and buildings used by AHC WestlinkLimited for £19,000,000 plus associated costs including SDLT. The total cost of the acquisition of AHC and land and buildings used by AHC was£33.5m. The above acquisition has been accounted for as an acquisition in accordancewith IFRS3. The acquisition balance sheet has been adjusted to reflectprovisional fair values. 10. A copy of this statement has been sent to every shareholder. Further copies are available from the Company's registered office. 11. The interim financial statements were approved at a meeting of the Boardof Directors held on 14 August 2007. Management and Administration Directors: Rodney Baker-Bates Tim Chesney William Kay Iain Stokes Nick Watts (appointed 1 February 2007) Investment Committee: Richard Burrell Nigel Rawlings Ben Browne-Clayton Philip Gadsden Nick Montgomery Andrew Bird Registered Office: Suite 4 Albert House South Esplanade St. Peter Port Guernsey Channel Islands GY1 3TX Investment Manager: Assura Fund Management LLP Regus House Herons Way Chester Business Park Chester CH4 9QR Investment Advisers to Invista Real Estate Investment Management Ltd The Investment Manager: (formerly Insight Investment Management Limited) Exchequer Court 33 St. Mary Axe London EC3A 8AA Barlows Asset Management Limited Chepstow House Dee Hills Park Chester CH3 5AR Administrator and Assura Administration Limited Secretary: PO Box 327 Suite 4 Albert House South Esplanade St. Peter Port Guernsey Channel Islands GY1 3TX Channel Islands Cenkos Channel Islands Limited Sponsor: Suite F1 Hirzel Court St Peter Port Guernsey Channel Islands GY1 4JG Auditors: Ernst & Young LLP 14 New Street St. Peter Port Guernsey Channel Islands GY1 4AF Independent Property Knight Frank LLP Valuer: 20 Hanover Square London W1S 1HZ Principal Bankers: Bradford & Bingley PLC Croft Road Crossflatts Bingley West Yorkshire BD16 2UA Legal Advisers: Carey Olsen 7 New Street St. Peter Port Guernsey Channel Islands GY1 4BZ Stockbroker: Cenkos Securities Limited 6.7.8 Tokenhouse Yard London EC2R 7AS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
STOB.L