19th May 2006 07:00
Cardiff Property PLC19 May 2006 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES FOR RELEASE 7.00 AM 19 MAY 2006 THE CARDIFF PROPERTY PLC (The group, including Campmoss, specialises in property investment and development in the Thames Valley. The portfolio, valued in excess of £34m, isprimarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire.) INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2006 Highlights: Six months Six months Year 31 March 31 March 30 September 2006 2005 2005 IFRS IFRS IFRS (Unaudited) (Unaudited)* (Unaudited)* Group revenue £'000 259 1,364 1,672Property sales £'000 - 1,113 1,113Net assets per share* pence 1,006 850 990Profit before tax £'000 452 1,023 3,201Earnings per share pence 20.7 53.1 193.6Interim/final dividend pence 2.75 2.5 9.0 per shareGearing % nil nil nil * Figures restated for IFRS** Properties not revalued at half year Richard Wollenberg, Chairman, commented: "A healthy increase in tenant demand across all sectors of the property marketin the Thames Valley has been evident over the last six months. The group'sproperty portfolio continues to focus within the area known as The GoldenTriangle namely to the west of London and close to Heathrow Airport. Residentialactivities are confined to the counties of Surrey and Berkshire. Interest ratescontinue to remain at current low levels and there is a renewed confidence inthe property market as a whole." For further information: The Cardiff Property plc Richard Wollenberg 01784 437444Arbuthnot Securities Richard Dunn 020 7012 2000 THE CARDIFF PROPERTY PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2006 CHAIRMAN'S INTERIM STATEMENT Dear shareholder A healthy increase in tenant demand across all sectors of the property market inthe Thames Valley has been evident over the last six months. A number of lettings of Grade A office buildings situated to the West of Londonhave been successfully concluded indicating a marginal increase in headline rentlevels. Landlords' incentives are, however, still an important feature of anytransaction and currently represent a concession of up to 10% over the firstfive years of the lease term. The average period for new leases is between 5 and15 years and often includes a tenant's break after 5 or 10 years. These are allwelcoming features but shareholders should appreciate that although confidenceis gradually returning, the market place for new lettings remains fragile. Asalways, a prospective tenant or purchaser will require a well located building,a high quality of construction and the availability of good car parkingfacilities. The level of interest for purpose built business units and industrial premisesto the west of Heathrow has remained reasonably buoyant with rental levelsunchanged. Lettings close to the airport, primarily in the logistics sector,indicate a marginal increase in rental levels. The commercial property investment market, dominated by UK and overseasinstitutions as well as private investors, remains very active. Individualinstitutions have increased their weightings towards this sector and, with thereal prospect of rental growth, investment values are expected to remain firm.The increasing number of owner occupiers acquiring their own freeholds ratherthan renting has contributed to the strength of the market place. The Thames Valley residential market has recently experienced an upturn in thenumber of viewings by prospective purchasers and it will be interesting to seeif, during the year, this translates into actual sales. Property values haveremained similar to last year although with the continued difficulty and lengthof time taken to obtain a planning permission, the availability of new stockwill always be in short supply. Dividend The directors have declared an increased interim dividend of 2.75p per share(March 2005: 2.5p; September 2005: 9.0p) which will be paid on 7 July 2006 toshareholders on the register on 9 June 2006. Financial The consolidated results for the six months ended 31 March 2006 are the first tobe prepared by the group under applicable International Financial ReportingStandards adopted by the European Union ("IFRS") which have been adopted andincorporated into the principal accounting policies as set out in note 2. From 1January 2005, all listed companies traded on a regulated market in any EuropeanUnion member state are required to adopt this basis of accounting. Note 8 andthe subsequent pages set out detailed reconciliations to show the differences inaccounting treatment as compared to the previous UK GAAP basis of accounting.There are reconciliations for the Group Income Statement (formerly the GroupProfit and Loss Account) and Group Balance Sheet for the current period, therestated comparative results for the year ended 30 September 2005 and the sixmonths ended 31 March 2005, together with an opening balance sheet at 1 October2004, the date of transition to IFRS. The key changes resulting from the introduction of IFRS are set out on page 8.The principal one affecting the group is the inclusion of deferred tax onrevaluation of property which was previously shown by way of a note to theaccounts. The effect on net assets under IFRS at 30 September 2005 was to reducethe UK GAAP amount of 1,025p per share to 990p per share. Under IFRS net assetsat 31 March 2006, including our share of Campmoss, our 47.62% owned jointlycontrolled entity, totalled £17.72m (March 2005: £15.18m; September 2005:£17.58m) equivalent to 1,006p per share (March 2005: 850p; September 2005:990p). For the half year to 31 March 2006, under IFRS, profit before tax amounted to£0.45m (March 2005: £1.02m; September 2005: £3.20m) which included acontribution from Campmoss of £0.17m (March 2005: £0.36m; September 2005:£2.12m). Group revenue totalled £0.26m (March 2005: £1.37m; September 2005:£1.67m) representing gross rental income of £0.26m (March 2005: £0.49m;September 2005: £0.56m) and sales of commercial property of nil (March 2005:£1.11m; September 2005: £1.11m). Earnings per share was 20.7p (March 2005:53.1p; September 2005: 193.6p). Shareholders should note that under UK GAAP,results for Campmoss were identified under all the component parts of the incomestatement (formerly the profit and loss account). Under IFRS, however, profitbefore tax includes a single line item "share of jointly controlled entity". Thenet effect is the same but the presentation is significantly different. The group's property portfolio is valued annually and therefore the figures forthe half year are based on values as at 30 September 2005. Gearing at Campmosswas 44% (March 2005: 145%; September 2005: 47%) and for Cardiff nil (March 2005:nil; September 2005: nil). During the first half the company acquired 14,000 ofits own shares for cancellation. Cash balances are placed on short term depositand bank borrowing facilities have been renewed and remain available foracquisitions. The investment and development portfolio The group's property portfolio continues to focus within the area known as TheGolden Triangle namely to the west of London and close to Heathrow Airport.Residential activities are confined to the counties of Surrey and Berkshire. The company's office, retail and business units are located at Egham, Windsor,Maidenhead and Cardiff. Other than Maidenhead, referred to below, thesebuildings are let on medium to long term institutional leases to well knownnational and local companies. At the Maidenhead Enterprise Centre, major refurbishment work has now beencompleted. The property comprises six individual business units totalling 14,000sq ft. Agents have been appointed to seek either a letting or a freehold sale. At Egham, two of our newly built residential houses remain available for sale.One house has been let on a short term basis. At Ashleigh House, EnglefieldGreen, Surrey an acceptable offer has been received and as indicated in my postbalance sheet comments, the sale has now been completed. Campmoss Property Company Ltd Campmoss continues to retain freehold commercial property at Britannia Wharf,Woking, The Priory, Burnham and Kiln Lane, Bracknell. Gross annual rental incomegenerated from this portfolio is now in excess of £1.42m. Freehold properties atTangley Place, Worplesdon, Datchet Meadows, Datchet, Market Street, Bracknelland Highway House, Maidenhead, are all the subject of detailed planningdiscussions with individual Local Authorities' Planning Departments. In allcases planning applications have been lodged and although this remains a longand arduous task each individual scheme, as and when planning is achieved,represents an exciting project for the future. Whilst planning matters proceed part of the office and retail buildings atMarket Street, Bracknell have been let on a short term basis. Shareholders telephone dealing service This low commission share dealing facility provided by the company's registrars,Computershare Investor Services Plc, and used by a number of shareholders, hasbeen renewed. The company is continuing to offer its free share sale service tothose shareholders who wish to dispose of holdings of 1,000 shares or less.Shareholders should be aware that this service should not be construed as anencouragement to buy or sell the company's shares. If in any doubt shareholdersshould contact their own financial advisors. Computershare can be contacted on0870 703 0084. Post balance sheet events The sale of Ashleigh House and adjacent land for £1.72m has now beensuccessfully completed and the funds placed on short term deposit. At Maidenhead an acceptable offer for leasing two of the units has been receivedand is in solicitor's hands. At Windsor an acceptable offer for the freehold ofone of the business units has been received and is also in solicitor's hands. Interest rates continue to remain at current low levels and as evidenced by theabove events renewed confidence in the property market, as a whole, is evident. I look forward to reporting on further progress to shareholders with the yearend results. J Richard WollenbergChairman18 May 2006 Consolidated Income StatementFOR THE SIX MONTHS ENDED 31 MARCH 2006 Six months Six months Year 31 March 31 March 30 September 2006 2005 2005 (Unaudited) (Unaudited) (Unaudited) £'000 £'000 £'000 Revenue 259 1,364 1,672 Cost of sales (19) (712) (722) ------ ------ ------Gross profit 240 652 950 Administrative expenses (243) (272) (573)Other operating income 209 168 282 ------ ------ ------Operating profit before gains on investment properties 206 548 659 Profit on sale of other investments - 1 1Surplus on revaluation of investmentproperties - - 225 ------ ------ ------Profit before financing 206 549 885 Financing: Interest receivable and similar income 78 113 197 Interest payable - - (5)Share of jointly controlled entity 168 361 2,124 ------ ------ ------Profit before taxation 452 1,023 3,201 Tax on profit on ordinary activities (85) (86) 233 ------ ------ ------Profit for the period 367 937 3,434 ------ ------ ------ Dividends Paid 115 104 149 Proposed 48 45 115 ------ ------ ------Earnings per share - pence On profit for the six months Basic 20.7 53.1 193.6 Diluted 20.6 52.9 192.0 ------ ------ ------ The above results relate entirely to continuing activities. There were noacquisitions or disposals of businesses during the period. Consolidated Balance SheetAT 31 MARCH 2006 31 March 31 March 30 September 2006 2005 2005 (Unaudited) (Unaudited) (Unaudited) £'000 £'000 £'000Non-current assets Investment properties 5,576 4,719 5,444Investment in jointly controlledentity 7,164 5,347 6,996Property, plant and equipment 3 5 4Other financial assets 393 303 303 ------ ------ ------Total non-current assets 13,136 10,374 12,747 ------ ------ ------Current assets Stock and work in progress 2,701 2,799 2,701Trade and other receivables 250 487 328Cash and cash equivalents 3,101 3,660 3,356 ------ ------ ------ 6,052 6,946 6,385 ------ ------ ------Total assets 19,188 17,320 19,132 ------ ------ ------Current liabilitiesTrade and other payables (688) (910) (775) Non-current liabilitiesProvisions and deferred tax (785) (1,235) (781) ------ ------ ------Total liabilities (1,473) (2,145) (1,556) ------ ------ ------Net assets 17,715 15,175 17,576 ------ ------ ------Capital and reservesCalled up share capital 352 357 355Share premium account 4,946 4,944 4,946Other reserves 2,295 2,291 2,29Profit and loss account - non-distributable 3,990 3,444 3,990Profit and loss account - distributable 6,132 4,139 5,993 ------ ------ ------Shareholders' funds - equity 17,715 15,175 17,576 ------ ------ ------Net assets per share 1,006p 850p 990p ------ ------ ------ Consolidated Cash Flow StatementFOR THE SIX MONTHS ENDED 31 MARCH 2006 Six months Six months Year 31 March 31 March 30 September 2006 2005 2005 (Unaudited) (Unaudited) (Unaudited) £'000 £'000 £'000 Cash flows from operating activitiesProfit for the year 367 937 3,434 Adjustments for: Depreciation, amortisation and impairment 1 2 3 Financial income (78) (113) (197) Financial expense - - 5 Share of profit of jointly controlled entity (217) (493) (2,378) Profit on sale of other investments - (1) (1) Surplus on revaluation of investment properties - - (225) Equity settled share-based payment expenses 25 25 50 Taxation 134 218 21 ------ ------ ------Operating profit before changesin working capital 232 575 712 Decrease in trade and other receivables 74 1,845 1,986 Decrease in stock - 624 722 (Decrease)/increase in trade and other payables (170) 4 3 ------ ------ ------Cash generated from operations 136 3,048 3,423Tax paid - - (132) ------ ------ ------Net cash from operating activities 136 3,048 3,291 ------ ------ ------ Cash flows from investing activities Interest received 85 72 155 Interest paid - - (5) Acquisition of property, plant and equipment (223) (782) (1,286) Proceeds of disposals of plant and equipment - 9 9 ------ ------ ------ (138) (701) (1,127) ------ ------ ------Cash flows from financing activities Proceeds from the issue of share capital - 104 105 Purchase of owhares (138) - (76) Dividends paid (115) (103) (149) ------ ------ ------Net cash from financing activities (253) 1 (120) ------ ------ ------ Net (decrease)/increase in cashand cash equivalents (255) 2,348 2,044 Cash and cash equivalents broughtforward 3,356 1,312 1,312 ------ ------ ------Cash and cash equivalents at endof period 3,101 3,660 3,356 ------ ------ ------ Other Primary StatementsFOR THE SIX MONTHS ENDED 31 MARCH 2006 Consolidated statement of changes in equity Six months Six months Year 31 March 31 March 30 September 2006 2005 2005 (Unaudited) (Unaudited) (Unaudited) £'000 £'000 £'000 Opening shareholders' funds aspreviously reported 18,186 15,548 15,548Effects of IFRS (610) (1,335) (1,335) ------ ------ ------Opening shareholders' fundsrestated under IFRS 17,576 14,213 14,213 Share capital on options exercised - 10 9Share premium on options exercised - 94 95Own shares purchased (138) - (76)Fair value of share options granted 25 25 50 ------ ------ ------ 17,463 14,342 14,291Total recognised income and expensefor the period 367 937 3,434 ------ ------ ------ 17,830 15,279 17,725 Dividends (115) (104) (149) ------ ------ ------Closing shareholders' funds 17,715 15,175 17,576 ------ ------ ------ Notes to the Financial StatementsFOR THE SIX MONTHS ENDED 31 MARCH 2006 1. International Financial Reporting Standards The consolidated results for the six months ended 31 March 2006 are the first tobe prepared by the group under applicable International Financial ReportingStandards adopted by the European Union ("IFRS") which have been adopted andincorporated into the principal accounting policies as set out in note 2. From 1January 2005, all listed companies traded on a regulated market in any EuropeanUnion member state are required to adopt this basis of accounting. Note 8 andthe subsequent pages set out detailed reconciliations to show the differences inaccounting treatment as compared to the previous UK GAAP basis of accounting.There are reconciliations for the Group Income Statement (formerly the GroupProfit and Loss Account) and Group Balance Sheet for the current period, therestated comparative results for the year ended 30 September 2005 and the sixmonths ended 31 March 2005, together with an opening balance sheet at 1 October2004, the date of transition to IFRS. The financial information included in this document is unaudited and does notcomprise statutory accounts within the meaning of section 240 of the CompaniesAct 1985. The comparative figures for the financial year ended 30 September 2005are not the company's statutory accounts for that financial year. The statutoryaccounts for the year ended 30 September 2005, prepared in accordance with UKGAAP, have been filed with the Registrar of Companies. The auditor gave anunqualified report, without any statement under section 237(2) or (3) of theCompanies Act 1985. Basis of preparation The results have been prepared using applicable IFRS, which includesInternational Accounting Standards (IAS) and interpretations issued by theInternational Accounting Standards Board (IASB) and its committees, which areexpected to be endorsed by the European Union and apply to the 2006 full yearresults. Key changes The main differences from UK GAAP are: • annual revaluation surpluses or deficits on investment properties are included in the income statement, whereas previously this was reported as a movement on the balance sheet through the revaluation reserve; • capital gains tax payable in the event that all the group's investment properties were sold at the balance sheet date is included as an additional deferred tax liability in the balance sheet, having previously been disclosed as a note to the accounts. The movement in valuation of the investment properties during the year will affect the tax charge in the income statement; • the value of lease incentives is spread over the life of a lease rather than to the first rent review; • no provision is made for proposed dividends; and • the fair value of options granted is recognised as an employee expense with a corresponding increase in equity. Cash flow Despite all the changes to the reporting of assets, liabilities and performance,the cash flows that underline the business remain the same, hence noreconciliations of cash flows under UK GAAP and IFRS have been prepared. Thecash flow statements reported under IFRS differ only in presentation from UKGAAP. The effect of the change in categorisation is to reduce the number ofheadings in the cash flow statements. 2. Accounting policies The following principal accounting policies have been applied consistently indealing with items which are considered material in relation to the group'sfinancial statements. The financial statements have been prepared under thehistorical cost convention, modified by the revaluation of investmentproperties, and in accordance with applicable accounting standards and with theCompanies Act 1985 except as noted below under investment properties. Theseaccounting policies have been applied consistently across the group for thepurposes of these consolidated interim financial statements. Basis of consolidation The group's financial statements include the financial statements of the companyand its subsidiaries and jointly controlled entity made up to 31 March 2006. Thepurchase method of acquisition has been adopted. Under this method, the resultsof subsidiary undertakings acquired or disposed of in the year are included inthe consolidated income statement from the date of acquisition or up to the dateof disposal. Intra-group transactions are eliminated on consolidation. A jointly controlled entity is one in which the group has a long term interestand over which it exercises joint control. The group's investment in the jointlycontrolled entity is accounted for using the equity method, hence the group'sshare of the profits less losses of the jointly controlled entity is included inthe consolidated income statement and its interest in the net assets is includedin investments in the consolidated balance sheet. Goodwill Goodwill represents amounts arising on acquisition of subsidiaries, associatesand jointly controlled entities. Goodwill represents the difference between thecost of the acquisition and the fair value of the net identifiable assetsacquired. Identifiable assets include intangible assets which can be soldseparately or which arise from legal rights regardless of whether those rightsare separable. The classification and accounting treatment of acquisitions that occurred priorto 1 October 2004 has not been reconsidered in preparing the group's openingIFRS balance sheet at 1 October 2004. Goodwill is stated at cost less any accumulated impairment losses. Goodwill isallocated to cash-generating units and is not amortised but is tested annuallyat the balance sheet date for impairment. In respect of associates and jointlycontrolled entities, the carrying amount of goodwill is included in the carryingamount of the investment in that associate or jointly controlled entity. Impairment The annual impairment review involves comparing the carrying amount to theestimated recoverable amount (by allocating the goodwill to cash-generatingunits) and recognising an impairment loss, if the recoverable amount is lower.Impairment losses are recognised through the income statement. Investment properties Investment properties are properties which are held either to earn rental incomeor for capital appreciation or both. Investment properties are stated at fairvalue which are based on market values. Design, construction and management expenses together with interest incurred inrespect of investment properties in the course of development are capitaliseduntil the building is effectively completed and available for letting along withthe costs directly attributable to the initial letting of newly developedproperties. Thereafter they are charged to the income statement. Whilst underdevelopment such properties are classified as assets in the course ofconstruction and any accumulated revaluation surpluses or deficits arerecognised in the income statement. These properties are revalued at the yearend and surpluses or deficits recognised in the income statement. An external, independent valuer, having an appropriate recognised professionalqualification and recent experience in the location and category of propertybeing valued, values the company portfolio each year. The directors of thejointly controlled entity value its portfolio each year. Depreciation Property and plant and equipment are stated at cost less accumulateddepreciation and impairment losses. Provision is made for depreciation on other tangible fixed assets so as to writeoff their cost less the estimated residual value on a straight-line basis overtheir expected useful lives as follows: • motor vehicles - 4 years; and • fixtures, fittings and equipment - 4 years. Impairment The carrying amounts of the group's assets are reviewed at each balance sheetdate to determine whether there is any indication of impairment. If any suchindication exists, the assets recoverable amount is estimated and an impairmentloss recognised where the recoverable amount is less than the carrying value ofthe asset. Stocks and work in progress Stocks, being properties under development intended for resale, are stated atthe lower of cost, including attributable overheads, and net realisable value Revenue Revenue consists of rental income earned from properties held for investmentpurposes together with the proceeds from the sale of development properties.Rental income is recognised in the income statement on a straight-line basisover the total lease period. Payments due on early terminations of leaseagreements are recognised in the income statement within revenue. Proceeds from the sale of investment properties are not included in revenue, butin profit on sale of investment property. The profit or loss on disposal iscalculated with reference to the carrying amount in the balance sheet. Purchasesand sales of investment properties are accounted for when exchanged contractsbecome unconditional. Financial assets Investments in equity securities are classified as assets available for sale andare stated at fair value with any resultant gain or loss being recogniseddirectly in equity except for any impairment loss. When these investments arederecognised, the cumulative gain or loss previously recognised directly inequity is recognised in the income statement. In the company's financial statements, investments in subsidiary undertakings,associates and jointly controlled entities are stated at cost less anyimpairment value. Trade and other receivables Trade and other receivables are stated at their historic cost (discounted ifmaterial) less impairment. Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. Bankoverdrafts that are repayable on demand and form an integral part of the group'scash management are included as a component of cash and cash equivalents for thepurpose only of the statement of cash flows. Share based payments The share option programme allows group employees to acquire shares of theultimate parent company; these awards are granted by the ultimate parent. Thefair value of options granted is recognised as an employee expense with acorresponding increase in equity. The fair value is measured at the date ofgrant and spread over the period during which the employees becomeunconditionally entitled to the options using an option valuation model, takinginto account the terms and conditions upon which options were granted. Theamount recognised as an expense is adjusted to reflect the actual number ofshare options that vest except where forfeiture is due only to share prices notachieving the threshold for vesting. Dividends Dividends are recognised as a liability in the period in which they areapproved. Provisions A provision is recognised in the balance sheet when the group has a presentlegal or constructive obligation as a result of a past event and it is probablethat an outflow of economic benefit will be required to settle the obligation.If the effect is material, provisions are determined by discounting the expectedfuture cash flows at a pre tax rate that reflects current market assessments ofthe time value of money and, where appropriate, the risks specific to theliability. Taxation Tax on the profit or loss for the year comprises current and deferred tax. Taxis recognised in the income statement except to the extent that it relates toitems recognised directly in equity, in which case it is recognised in equity. Current tax is expected tax payable on the taxable income for the year, usingtax rates enacted or substantively enacted at the balance sheet date and anyadjustment to tax payable in respect of previous years. Deferred tax is provided on temporary differences between the carrying amountsof assets and liabilities for financial reporting purposes and the amounts usedfor taxation purposes. The following temporary differences are not provided for:the initial recognition of goodwill; the initial recognition of assets orliabilities that affect neither accounting nor taxable profit other than in abusiness combination; and differences relating to investments in subsidiaries tothe extent that they will probably not reverse in the foreseeable future. Theamount of deferred tax provided is based on the expected manner of realisationor settlement of the carrying amount of assets and liabilities, using tax ratesenacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable thatfuture taxable profits will be available against which the asset can beutilised. 3. Analysis of revenue, profit before tax and net operating assets Six months Six months Year 31 March 31 March 30 September 2006 2005 2005 (Unaudited) (Unaudited) (Unaudited) £'000 £'000 £'000 Revenue (wholly in the United Kingdom) Gross rents receivable: 259 251 559 Sale of development property - 1,113 1,113 ------ ------ ------ 259 1,364 1,672 ------ ------ ------Profit before tax Property and other investment 353 517 2,666 Property development 99 506 535 ------ ------ ------ 452 1,023 3,201 ------ ------ ------Net operating assets Property and other investment 15,722 11,338 15,656 Property development 1,993 3,837 1,920 ------ ------ ------ 17,715 15,175 17,576 ------ ------ ------4. Taxation The tax position for the six months is estimated on the basis of the anticipatedtax rates applying for the full year. 5. Dividends Period Year 31 March 30 September 2006 2005 £'000 £'000 Final 2005 115 Final 2004 5.8p per share 1016.5p per share Increase in 2004 final dividend following issue of shares in respect of options exercised 3Interim 2006 2.75p per share - Interim 2005 2.5p per share 45 ----- ----- 115 149 ----- ----- The interim dividend of 2.75p per share will be paid on 7 July 2006 toshareholders on the register on 9 June 2006. Under IFRS rules this dividend isnot included in the consolidated income statement for the six months ended 31March 2006 nor the balance sheet as at that date. 6. Earnings per share Earnings per share has been calculated using the profit after tax for the periodof £367,000 (six months to 31 March 2005: £937,000; year to 30 September 2005:£3,434,000) and the weighted average number of shares as follows: Weighted average number of shares 31 March 31 March 30 September 2006 2005 2005 Basic 1,773,234 1,764,936 1,773,706 Adjustment to basic for bonus element of shares to be issued on exercise of options 7,920 7,018 14,690 --------- --------- ---------Diluted 1,781,154 1,771,954 1,788,396 --------- --------- --------- 7. Share based payments In accordance with the transitional provisions in IFRS 1 and IFRS 2, therecognition and measurement principles in IFRS have not been applied to grantsmade prior to 7 November 2002. For grants subsequent to this date the fair values of services received inreturn for share options granted are measured by reference to the fair value ofshare options granted. The estimate of the fair value of the option is measuredbased on a Black Scholes model (with the contractual life of the option andexpectations of early exercise built into the model). The option vests after aperiod of 3 years and in addition, the average of the previous three years netasset value per share must exceed the corresponding increase in the FT PropertyIndex over the same period, by at least 3%. The terms and condition of outstanding share options are as follows: Date granted Amount paid No. of Option Exercisable ordinary price between shares per share------------- -------- --------- --------- ----------14 January 2003 £1 10,000 515p 2006-2013 The principal assumptions used in assessing the fair value of the options are asfollows: • share price - 515p; • exercise price - 515p; • option life - 10 years; • expected dividends - 1.4%; and • risk-free interest rate - 4.3%. 8. Reconciliation of UK GAAP to IFRS To illustrate the changes introduced by IFRS and the impact on the group resultswhen compared to UK GAAP, the transitional requirements are for a set ofdetailed reconciliations going back to the balance sheet date at 1 October 2004.In the subsequent pages, reconciliations are set out for the six months ended 31March 2006 and also for the restated comparative results for the year ended 30September 2005 and the six months ended 31 March 2005. The balance sheet as at 1October 2004 is also included. The IFRS accounting standards that impact on the group's results are identifiedin the reconciliations and are as follows: Reconciliation of UK GAAP to IFRS Consolidated Income StatementFOR THE SIX MONTHS ENDED 31 MARCH 2006 UK GAAP Share Adjusted Dividends Revaluations IFRS (under IFRS option share of under and related presentation) expense profit of IAS 10 deferred IFRS 2 jointly taxation controlled taken to entity consolidated income statement £'000 £'000 £'000 £'000 £'000 £'000 ------ ------ ------ ------ ------ ------Revenue 259 259 Cost of sales (19) (19) ------ ------ ------ ------ ------ ------Gross profit 240 240 Administrativeexpenses (218) (25) (243) Otheroperating 209 209income ------ ------ ------ ------ ------ ------Operatingprofitbefore gains 231 (25) 206on investmentproperties Profit on sale - -of otherinvestments Surplus on - -revaluation ofinvestmentproperties ------ ------ ------ ------ ------ ------Profit beforefinancing 231 (25) 206 Financing: Interest receivable and similar income 78 78 Interest - - payable Share of jointly 168 168 controlled entity ------ ------ ------ ------ ------ ------Profit beforetaxation 477 (25) 452 Tax on profit on ordinary (85) (85)activities ------ ------ ------ ------ ------ ------Profit for theperiod 392 (25) 367 ------ ------ ------ ------ ------ ------ Dividends 48 67 115 ------ ------ ------ ------ ------ ------ Earnings per share - penceOn profit forthe six months Basic 22.1 20.7 Diluted 22.0 20.6 ------ ------ Reconciliation of UK GAAP to IFRS Consolidated Balance SheetAS AT 31 MARCH 2006 UK GAAP Share Adjusted Dividends Revaluations IFRS (under IFRS option share of under and related presentation) expense profit of IAS 10 deferred IFRS 2 jointly taxation controlled taken to entity consolidated income statement £'000 £'000 £'000 £'000 £'000 £'000 ------ ------ ------ ------ ------ ------ Non-current assets Investmentproperties 5,576 5,576 Investment injointlycontrolled entity 7,393 (229) 7,164 Property, plantand equipment 3 3 Other financialassets 393 393 ------ ------ ------ ------ ------ ------ Total non-currentassets 13,365 (229) 13,136 ------ ------ ------ ------ ------ ------ Current assets Stock and work inprogress 2,701 2,701 Trade and otherreceivables 250 250 Cash and cashequivalents 3,101 3,101 ------ ------ ------ ------ ------ ------ 6,052 6,052 ------ ------ ------ ------ ------ ------ Total assets 19,417 (229) 19,188 ------ ------ ------ ------ ------ ------ CurrentliabilitiesTrade and otherpayables (736) 48 (688) Non-currentliabilitiesProvisions anddeferred tax (289) (496) (785) ------ ------ ------ ------ ------ ------ Total liabilities (1,025) 48 (496) (1,473) ------ ------ ------ ------ ------ ------ Net assets 18,392 (229) 48 (496) 17,715 ------ ------ ------ ------ ------ ------ Capital and reserves Called up sharecapital 352 352 Share premiumaccount 4,946 4,946 Investmentpropertyrevaluationreserve 4,486 (4,486) - Other reserves 2,295 2,295 Profit and lossaccount -non-distributable - 3,990 3,990 Profit and lossaccount -distributable 6,313 (229) 48 6,132 ------ ------ ------ ------ ------ ------ Shareholders'funds - equity 18,392 (229) 48 (496) 17,715 ------ ------ ------ ------ ------ ------ Net assets pershare 1,044p 1,006p ------ ------ Reconciliation of UK GAAP to IFRS Consolidated Income StatementFOR THE YEAR ENDED 30 SEPTEMBER 2005 UK GAAP Share Adjusted Dividends Revaluations IFRS (under IFRS option share of under and related presentation) expense profit of IAS 10 deferred IFRS 2 jointly taxation controlled taken to entity consolidated income statement £'000 £'000 £'000 £'000 £'000 £'000 ------ ------ ------ ------ ------ ------ Revenue 1,672 1,672Cost of sales (722) (722) ------ ------ ------ ------ ------ ------ Gross profit 950 950 Administrativeexpenses (523) (50) (573) Otheroperating 282 282income ------ ------ ------ ------ ------ ------ Operatingprofitbefore gains 709 (50) 659on investmentproperties Profit on sale of 1 1other investments Surplus onrevaluation ofinvestmentproperties - 225 225 ------ ------ ------ ------ ------ ------ Profit beforefinancing 710 (50) 225 885 Financing: Interest receivable and similar income 197 197 Interest (5) (5) payable Share ofjointly 1,733 391 2,124controlledentity ------ ------ ------ ------ ------ ------ Profit beforetaxation 2,635 (50) 391 225 3,201 Tax on profiton ordinary (88) 321 233activities ------ ------ ------ ------ ------ ------ Profit for theperiod 2,547 (50) 391 546 3,434 ------ ------ ------ ------ ------ ------ Dividends 163 (14) 149 ------ ------ ------ ------ ------ ------ Earnings per share - pence On profit for the year Basic 143.6 193.6 Diluted 142.4 192.0 ------ ------ Reconciliation of UK GAAP to IFRS Consolidated Balance SheetAS AT 30 SEPTEMBER 2005 UK GAAP Share Adjusted Dividends Revaluations IFRS (under IFRS option share of under and related presentation) expense profit of IAS 10 deferred IFRS 2 jointly taxation controlled taken to entity consolidated income statement £'000 £'000 £'000 £'000 £'000 £'000 ------ ------ ------ ------ ------ ------Non-current assets Investmentproperties 5,444 5,444 Investment injointlycontrolled entity 7,225 (229) 6,996 Property, plantand equipment 4 4 Other financialassets 303 303 ------ ------ ------ ------ ------ ------Total non-currentassets 12,976 (229) 12,747 ------ ------ ------ ------ ------ ------Current assets Stock and work inprogress 2,701 2,701 Trade and otherreceivables 328 328 Cash and cashequivalents 3,356 3,356 ------ ------ ------ ------ ------ ------ 6,385 6,385 ------ ------ ------ ------ ------ ------ Total assets 19,361 (229) 19,132 ------ ------ ------ ------ ------ ------ CurrentliabilitiesTrade and otherpayables (890) 115 (775) Non-currentliabilitiesProvisions anddeferred tax (285) (496) (781) ------ ------ ------ ------ ------ ------ Total liabilities (1,175) 115 (496) (1,556) ------ ------ ------ ------ ------ ------Net assets 18,186 (229) 115 (496) 17,576 ------ ------ ------ ------ ------ ------Capital and reserves Called up sharecapital 355 355 Share premiumaccount 4,946 4,946 Investmentpropertyrevaluationreserve 4,486 (4,486) - Other reserves 2,292 2,292 Profit and lossaccount -non-distributable - 3,990 3,990 Profit and lossaccount -distributable 6,107 (229) 115 5,993 ------ ------ ------ ------ ------ ------Shareholders'funds - equity 18,186 (229) 115 (496) 17,576 ------ ------ ------ ------ ------ ------Net assets pershare 1,025p 990p ------ ------ Reconciliation of UK GAAP to IFRS Consolidated Income StatementFOR THE SIX MONTHS ENDED 31 MARCH 2005 UK GAAP Share Adjusted Dividends Revaluations IFRS (under IFRS option share of under and related presentation) expense profit of IAS 10 deferred IFRS 2 jointly taxation controlled taken to entity consolidated income statement £'000 £'000 £'000 £'000 £'000 £'000 ------ ------ ------ ------ ------ ------ Revenue 1,364 1,364 Cost of sales (712) (712) ------ ------ ------ ------ ------ ------Gross profit 652 652 Administrativeexpenses (247) (25) (272) Otheroperating 168 168income ------ ------ ------ ------ ------ ------Operatingprofitbefore gains 573 (25) 548on investmentproperties Profit on sale of 1 1other investments Surplus on - -revaluation ofinvestmentproperties ------ ------ ------ ------ ------ ------Profit beforefinancing 574 (25) 549 Financing: Interest receivable and similar income 113 113 Interest - - payable Share ofjointly 341 20 361controlledentity ------ ------ ------ ------ ------ ------Profit beforetaxation 1,028 (25) 20 1,023 Tax on profiton ordinary (86) (86)activities ------ ------ ------ ------ ------ ------Profit for theperiod 942 (25) 20 937 ------ ------ ------ ------ ------ ------ Dividends 47 56 103 ------ ------ ------ ------ ------ ------ Earnings per share - pence On profit for the six months Basic 53.4 53.1 Diluted 53.2 52.9 ------ ------ Reconciliation of UK GAAP to IFRS Consolidated Balance SheetAS AT 31 MARCH 2005 UK GAAP Share Adjusted Dividends Revaluations IFRS (under IFRS option share of under and related presentation) expense profit of IAS 10 deferred IFRS 2 jointly taxation controlled taken to entity consolidated income statement £'000 £'000 £'000 £'000 £'000 £'000 ------ ------ ------ ------ ------ ------Non-current assets Investmentproperties 4,719 4,719 Investment injointlycontrolled entity 5,947 (600) 5,347 Property, plantand equipment 5 5 Other financialassets 303 303 ------ ------ ------ ------ ------ ------Total non-currentassets 10,974 (600) 10,374 ------ ------ ------ ------ ------ ------Current assets Stock and work inprogress 2,799 2,799 Trade and otherreceivables 487 487 Cash and cashequivalents 3,660 3,660 ------ ------ ------ ------ ------ ------ 6,946 6,946 ------ ------ ------ ------ ------ ------Total assets 17,920 (600) 17,320 ------ ------ ------ ------ ------ ------ Current liabilities Trade and otherpayables (955) 45 (910) Non-currentliabilitiesProvisions anddeferred tax (418) (817) (1,235) ------ ------ ------ ------ ------ ------Total liabilities (1,373) 45 (817) (2,145) ------ ------ ------ ------ ------ ------Net assets 16,547 (600) 45 (817) 15,175 ------ ------ ------ ------ ------ ------Capital and reserves Called up sharecapital 357 357 Share premiumaccount 4,944 4,944 Investmentpropertyrevaluationreserve 4,261 (4,261) - Other reserves 2,291 2,291 Profit and lossaccount -non-distributable - 3,444 3,444 Profit and lossaccount -distributable 4,694 (600) 45 4,139 ------ ------ ------ ------ ------ ------Shareholders'funds - equity 16,547 (600) 45 (817) 15,175 ------ ------ ------ ------ ------ ------Net assets pershare 928p 850p ------ ------ Reconciliation of UK GAAP to IFRS Consolidated Balance SheetAS AT 30 SEPTEMBER 2004 UK GAAP Share Adjusted Dividends Revaluations IFRS (under IFRS option share of under and related presentation) expense profit of IAS 10 deferred IFRS 2 jointly taxation controlled taken to entity consolidated income statement £'000 £'000 £'000 £'000 £'000 £'000 ------ ------ ------ ------ ------ ------ Non-current assets Investmentproperties 3,935 3,935 Investment injointlycontrolled entity 5,492 (619) 4,873 Property, plantand equipment 5 5 Other financialassets 311 311 ------ ------ ------ ------ ------ ------Total non-currentassets 9,743 (619) 9,124 ------ ------ ------ ------ ------ ------Current assets Stock and work inprogress 3,423 3,423 Trade and otherreceivables 2,369 2,369 Cash and cashequivalents 1,349 1,349 ------ ------ ------ ------ ------ ------ 7,141 7,141 ------ ------ ------ ------ ------ ------Total assets 16,884 (619) 16,265 ------ ------ ------ ------ ------ ------ Current liabilities Trade and otherpayables (923) 101 (822) Non-currentliabilities Provisions anddeferred tax (413) (817) (1,230) ------ ------ ------ ------ ------ ------ Total liabilities (1,336) 101 (817) (2,052) ------ ------ ------ ------ ------ ------Net assets 15,548 (619) 101 (817) 14,213 ------ ------ ------ ------ ------ ------Capital and reserves Called up sharecapital 347 347 Share premiumaccount 4,850 4,850 Investmentpropertyrevaluationreserve 4,261 (4,261) - Other reserves 2,291 2,291 Profit and lossaccount -non-distributable - 3,444 3,444 Profit and lossaccount -distributable 3,799 (619) 101 3,281 ------ ------ ------ ------ ------ ------Shareholders'funds - equity 15,548 (619) 101 (817) 14,213 ------ ------ ------ ------ ------ ------Net assets pershare 895p 818p ------ ------ Financial Calendar 2006 19 May Interim results for 2006 announced 7 June Ex dividend date for interim dividend 9 June Record date for interim dividend 7 July Interim dividend to be paid 30 September End of accounting year December Final results for 2006 announced 2007 January Annual general meeting February Final dividend to be paid Directors and Advisers Directors AuditorJ Richard Wollenberg, KPMG Audit Plc Chairman and chief executiveDavid A Whitaker FCA Finance director Stockbrokers and financialNigel D Jamieson BSc, MRICS, FSI, advisers Independent non-executive director Arbuthnot Securities Ltd Secretary BankersDavid A Whitaker FCA HSBC Bank plc Non-executive director of wholly owned SolicitorssubsidiaryFirst 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