27th Apr 2007 07:01
Cardiff Property PLC27 April 2007 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES FOR RELEASE 7.00 AM 27 April 2007 THE CARDIFF PROPERTY PLC (The group, including Campmoss, specialises in property investment anddevelopment in the Thames Valley. The portfolio, valued in excess of £34m, isprimarily located to the west of London, close to Heathrow Airport and in Surreyand Berkshire.) INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2007 Highlights: Six months Six months Year 31 March 31 March 30 September 2007 2006 2006 (Unaudited) (Unaudited) (Audited) Revenue £'000 433 259 2,442Property sales £'000 - - 1,927Net assets per share* pence 1,140 1,006 1,123Profit before tax £'000 464 452 2,549Earnings per share pence 23.0 20.7 137.6Interim/final dividend per share pence 3.00 2.75 10.05Gearing % nil nil nil * Properties not revalued at half year Richard Wollenberg, Chairman, commented: "The expected increase in rental growth, supported by tenant demand, whilstevident in locations such as Central London, The City and Docklands, has not yetoccurred in the Thames Valley M4 corridor although there is widespread optimismin the market place that this will happen towards the end of 2007. Increasing interest rates, together with additional supply is likely to prompt aslow down in the market but the continuing availability of substantialinvestment funds should underpin current values" 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 2007 CHAIRMAN'S INTERIM STATEMENT Dear shareholder The level of investor demand for income producing commercial property remainsbuoyant with capital growth being primarily assisted by a fall in yields;however, with the upward trend in interest rates, the pace of growth is likelyto slow. Conversely there is little reason to expect a major collapse in eitherinvestment or rental values whilst the economy remains strong. The expected increase in rental growth, supported by tenant demand, whilstevident in locations such as Central London, The City and Docklands, has not yetoccurred in the Thames Valley M4 corridor although there is widespread optimismin the market place that this will happen towards the end of 2007. Over the past two years, the supply of new high grade office buildings in theThames Valley has diminished; however it is noticeable that with the completionof certain lettings, a number of developers have been encouraged to commence newspeculative office developments. The forecast of higher rentals and anincreasing level of tenant enquiries has further encouraged this aspect and thecommercial property market will receive a major boost if, as anticipated, somepre-lettings are achieved. Surrey and Berkshire residential market values have, despite recent negativecomment, remained firm. Purchasers are, however, taking longer to make positivedecisions and continue to be price conscious. In some areas the supply of housesfor sale has diminished quite rapidly as sellers are reluctant to pay theincreasing costs of moving and are unable to find homes to suit theirrequirements. The planning process, particularly in the green belts of Surrey and Berkshire,remains an extremely arduous and lengthy process, despite local authoritiesannouncing their intention to increase the number of residential unitsavailable. The continuing reduction in supply of new homes and the availabilityof substantial risk capital for investment purposes has resulted in increasingland values. Dividend--------Your directors have declared the increased interim dividend of 3p per share(2006: 2.75p) which will be paid on 6 July 2007 to shareholders on the registeron 8 June 2007. Financial---------For the half year ended 31 March 2007, profit before tax amounted to £0.46m(March 2006: £0.45m; September 2006: £2.55m) which included an after taxcontribution from Campmoss Property Company Limited, our 47.62% jointlycontrolled entity, of £0.19m (March 2006: £0.17m; September 2006: £0.96m).Revenue totalled £0.43m (March 2006: £0.26m; September 2006: £2.44m)representing gross rental income of £0.24m (March 2006: £0.26m; September 2006:£0.51m) and sales of development property of £0.19m (March 2006: nil; September2006: £1.93m). Total gross rental income of Campmoss amounted to £0.94m (March2006: £0.99m; September 2006: £1.95m). The Campmoss revenue figures are notincluded in group revenue under IFRS rules. Profit after tax attributable toshareholders for the six months amounted to £0.40m (March 2006: £0.37m;September 2006: £2.43m). Earnings per share were 23.0p (March 2006: 20.7p;September 2006: 137.6p). Total assets of the group at 31 March 2007 were £21.04m (March 2006: £19.19m;September 2006: £20.71m) including the company's share of the net assets ofCampmoss of £8.15m (March 2006: £7.16m; September 2006: £7.96m). Net assets asat 31 March 2007, including our share of Campmoss, totalled £19.86m (March 2006:£17.72m; September 2006: £19.56m) equivalent to 1,140p per share (March 2006:1,006p; September 2006: 1,123p). The group's property portfolio is valued at the end of the financial year andtherefore the figures for the half year are based on values as at 30 September2006. Gearing for Cardiff was nil (March 2006: nil; Sep 2006: nil) and forCampmoss 38% (March 2006: 44%; September 2006: 40%). The investment and development portfolio----------------------------------------The group's property portfolio continues to be primarily located in the M4corridor, namely to the west of London and close to Heathrow Airport.Residential activities are focused within the counties of Surrey and Berkshire.The company's core office, retail and business unit investments are located inEgham, Maidenhead, Windsor and Cardiff. At the Maidenhead Enterprise Centre, three business units have now been let withongoing discussions taking place for two of the three remaining vacant units.The development, completed last year, includes six business units totalling14,000 sq ft. At the Windsor Business Centre refurbishment works for one of the units hasrecently been completed and negotiations with a prospective tenant are currentlyin hand. At Egham one of our remaining new homes has been sold whilst the other is in theprocess of being marketed for sale or re-letting. At the White House, Egham, discussions are taking place with one of the shoptenants for a potential surrender of the existing lease and subsequentre-letting to a new occupier. Campmoss Property Company Limited---------------------------------Campmoss continues to experience a high level of activity. Although twocommercial properties developed by the group were sold last year, Campmossretains freehold high grade office property at Britannia Wharf, Woking, ThePriory, Burnham, Clivemont House, Maidenhead and business units at Brickfields,Bracknell. Retail and office properties at Market Street, Bracknell and TangleyPlace, Worplesdon, remain the subject of planning applications where detaileddiscussions continue to take place with the relevant local authority. At Highway House, Maidenhead, planning permission has been granted for a newhigh grade headquarters office building totalling 45,000 sq ft. Agents have beenappointed to seek either a pre-letting or freehold sale of the proposedbuilding. Detailed plans and the development programme are currently beingfinalised. At Datchet Meadows, Slough, planning permission has been granted for a total of35 residential units, an increase of 11 units over our previously achievedpermission. Development of this prestigious apartment block is expected tocommence shortly. At Brickfields, Bracknell, two vacant business units have undergone specificimprovement works and are currently being marketed for re-letting. Shareholders dealing facility----------------------------- The share dealing facility provided by the company's registrar ComputershareInvestor Services Plc has been extended. Computershare can be contacted on 0870703 0084. Outlook-------An improvement in the take up of new office space in the M4 corridor is forecastfor the latter part of 2007. This is important to the investment market whichremains strong. Increasing interest rates, together with additional supply, islikely to prompt a slow down in the market but the continuing availability ofsubstantial investment funds should underpin current values. No acquisitions of property were completed in the first half of the year. Anumber of potential development projects were appraised but did not meet yourdirectors' objectives. During the first half of the year the group achieved two important planningpermissions which will result in a sizeable office and residential developmentprogramme over the next twelve to eighteen months. The successful re-letting ofthe group's vacant business and office units, as referred to earlier, areimportant to the group and I look forward to reporting on this and furtherprogress at the end of the financial year. J Richard WollenbergChairman26 April 2007 Consolidated Income StatementFOR THE SIX MONTHS ENDED 31 MARCH 2007 Six months Six months Year 31 March 31 March 30 September 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Revenue 433 259 2,442 Cost of sales (189) (19) (1,467) ______ ______ ______Gross profit 244 240 975 Administrative expenses (253) (243) (493) Other operating income 120 209 337 ______ ______ ______ Operating profit before gains on investment properties and other investments 111 206 819 Profit on sale of investment property - - 139 Profit on sale of other investments - - 34 Surplus on revaluation of investment properties - - 391 ______ ______ ______Operating profit 111 206 1,383 Financing: Interest receivable and similar income 161 78 203 Share of results of jointly controlled entity 192 168 963 ______ ______ ______Profit before taxation 464 452 2,549 Taxation (63) (85) (121) ______ ______ ______Profit for the period attributable to equity holders 401 367 2,428 ______ ______ ______ Earnings per share on profit for the period - pence Basic 23.0 20.7 137.6 Diluted 22.8 20.6 136.4 ______ ______ ______ Dividends Final 2006 paid 7.3p (2005: 6.5p) 127 115 115 Interim 2006 paid 2.75p - - 48 ______ ______ ______ 127 115 163 ______ ______ ______ Final 2006 proposed 7.3p - - 127 Interim 2007 proposed 3p (2006: 52 48 - 2.75p) ______ ______ ______ 52 48 127 ______ ______ ______ The above results relate entirely to continuing activities. There were noacquisitions or disposals of businesses during the period. Consolidated Balance SheetAT 31 MARCH 2007 31 March 31 March 30 September 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Non-current assets Investment properties 5,738 5,576 5,730 Investment in jointly controlled entity 8,151 7,164 7,959 Property, plant and equipment 3 3 4 Other financial assets 357 393 357 Deferred tax asset 37 112 37 ______ ______ _______ Total non-current assets 14,286 13,248 14,087 ______ ______ _______Current assets Stock and work in progress 992 2,701 1,132 Trade and other receivables 1,545 138 1,497 Cash and cash equivalents 4,219 3,101 3,990 ______ ______ _______Total current assets 6,756 5,940 6,619 ______ ______ _______ Total assets 21,042 19,188 20,706 ______ ______ _______ Current liabilities Corporation tax (384) (192) (316) Trade and other payables (422) (496) (447) ______ ______ ______Total current liabilities (806) (688) (763) ______ ______ ______ Non-current liabilities Provisions (115) (270) (115) Deferred tax liability (266) (515) (272) ______ ______ ______ Total non-current liabilities (381) (785) (387) ______ ______ ______ Total liabilities (1,187) (1,473) (1,150) ______ ______ ______Net assets 19,855 17,715 19,556 ______ ______ ______ Capital and reserves Called up share capital 348 352 348Share premium account 4,946 4,946 4,946Other reserves 2,299 2,295 2,299Revaluation reserve 4,892 3,990 4,892Retained earnings 7,370 6,132 7,071 ______ ______ ______Shareholders' funds attributable to 19,855 17,715 19,556 equity holders ______ ______ ______ Net assets per share 1,140p 1,006p 1,123p ______ ______ ______ Consolidated Cash Flow StatementFOR THE SIX MONTHS ENDED 31 MARCH 2007 Six months Six months Year 31 March 31 March 30 September 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Cash flows from operating activities Profit for the period 401 367 2,428 Adjustments for: Depreciation, amortisation and impairment 1 1 3 Financial income (161) (78) (203) Share of profit of jointly controlled entity (192) (217) (963) Profit on sale of investment property - - (139) Profit on sale of other investments - - (34) Surplus on revaluation of investment properties - - (391) Equity settled share-based payment expenses 25 25 50 Taxation 63 134 121 Decrease in provisions - - (162) ______ ______ ______Cash flows from operations before changes in working capital 137 232 710 Decrease in stock 140 - 1,569 (Increase)/decrease in trade and other receivables (34) 74 (1,283) (Decrease) in trade and other payables (27) (170) (212) ______ ______ ______ Cash generated from operations 216 136 784 Tax paid - - (81) ______ ______ ______ Net cash flows from operating activities 216 136 703 ______ ______ ______ Cash flows from investing activities Interest received 148 85 209 Acquisition of property, investments and plant and equipment (9) (223) (238) Proceeds of disposals of property, investments and plant and equipment 1 - 458 ______ ______ ______Net cash flows from investing activities 140 (138) 429 ______ ______ ______ Cash flows from financing activities Purchase of own shares - (138) (335) Dividends paid (127) (115) (163) ______ ______ ______Net cash flows from financing activities (127) (253) (498) ______ ______ ______ Net increase/(decrease) in cash and cash equivalents 229 (255) 634 Cash and cash equivalents at beginning of period 3,990 3,356 3,356 ______ ______ ______Cash and cash equivalents at end of period 4,219 3,101 3,990 ______ ______ ______ Other Primary StatementsFOR THE SIX MONTHS ENDED 31 MARCH 2007 Consolidated statement of changes in equity Six months Six months Year 31 March 31 March 30 September 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Opening shareholders' funds 19,556 17,576 17,576 Own shares purchased - (138) (335) Fair value of share options granted 25 25 50 Profit for the period 401 367 2,428 Dividends (127) (115) (163) ______ ______ ______Closing shareholders' funds 19,855 17,715 19,556 ______ ______ ______ Notes to the Financial StatementsFOR THE SIX MONTHS ENDED 31 MARCH 2007 1. International Financial Reporting StandardsThe consolidated results for the six months ended 31 March 2007 have beenprepared using applicable International Financial Reporting Standards adopted bythe European Union ("IFRS"), which includes International Accounting Standards("IAS") and interpretations issued by the International Accounting StandardsBoard ("IASB") and its committees, which are expected to be endorsed by theEuropean Union. The unaudited interim financial information has been prepared inaccordance with the Listing Rules of the Financial Services Authority. Theresults, which were approved by the board on 26 April 2007, are prepared by thegroup on the same basis as for the year ended 30 September 2006, are unauditedand do not comprise statutory accounts within the meaning of section 240 of theCompanies Act 1985. The comparative figures for the financial year ended 30 September 2006 areextracted from the statutory financial statements for that year which have beenfiled with the Registrar of Companies and on which the auditor gave anunqualified report, without any statement under section 237 (2) or (3) of theCompanies Act 1985. 2. Accounting policies Basis of preparation--------------------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 on thehistorical cost basis except that the following assets and liabilities arestated at their fair value: financial instruments classified as available forsale; and investment properties. These accounting policies have been appliedconsistently across the group for the purposes of these consolidated financialstatements. 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 2007.Subsidiary companies are those entities under the control of the company, wherecontrol means the power to govern the financial and operating policies of theentity so as to obtain benefit from its activities. The results of subsidiaryundertakings acquired or disposed of in the year are included in theconsolidated income statement from the date control is obtained or up to thedate when control is lost. Intra-group transactions are eliminated onconsolidation. 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 gains and 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 and jointlycontrolled entities. Goodwill represents the difference between the cost of theacquisition and the fair value of the assets, liabilities and contingentliabilities acquired. Identifiable assets include intangible assets which can besold separately or which arise from legal rights regardless of whether thoserights are separable. 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. ImpairmentThe 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 fairvalues 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; such valuation takesinto account yields on similar properties in the area, vacant space and covenantstrength. Property, plant and equipment and depreciation----------------------------------------------Property and plant and equipment are stated at cost less accumulateddepreciation and impairment losses. Provision is made for depreciation on property, plant and equipment so as towrite off their cost less the estimated residual value on a straight line basisover their 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, other than investment propertiesmeasured at fair value, are reviewed at each balance sheet date to determinewhether there is any indication of impairment. If any such indication exists,the asset's recoverable amount is estimated and an impairment loss recognisedwhere the recoverable amount is less than the carrying value of the 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 under operating leases granted, fromproperties held for investment purposes, together with the proceeds from thesale of development properties. Rental income is recognised in the incomestatement on a straight-line basis over the total lease period. Payments due onearly terminations of lease agreements are recognised in the income statementwithin 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. 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 forthe purpose only of the statement of cash flows. Share based payments--------------------The share option programme allows group employees to acquire shares of theparent company; these awards are granted by the parent. The fair value ofoptions granted is recognised as an employee expense with a correspondingincrease in equity. The fair value is measured at the date of grant and spreadover the period during which the employees become unconditionally entitled tothe options using an option valuation model, taking into account the terms andconditions upon which options were granted. The amount recognised as an expenseis adjusted to reflect the actual number of share options that vest except whereforfeiture is due only to share prices not achieving 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. Adopted IFRS not yet applied----------------------------There are a number of new Standards, Amendments to Standards and Interpretationswhich are mandatory for the year ending 30 September 2007. In most cases, thesenew requirements are not relevant to the group. This is the case for theAmendments to IAS 39, IAS 21 and IFRS 4, to the new Standard IFRS 6 and to thenew Interpretations IFRIC 5 and IFRIC 6. In accordance with IFRIC 4 'Determiningwhether an arrangement contains a lease', the group has reviewed itsarrangements to ascertain whether any of them effectively contain a leaseresulting in the group being a lessor or lessee. No changes to the accountingtreatments of the group's arrangements have been necessary. The following new Standards and Interpretations have been issued but are noteffective for the year ended 30 September 2007 and have not been adopted early: • IFRS 7 - financial instruments: disclosure (applicable for years commencing on or after 1 January 2007); and • IFRIC 7, IFRIC 8, IFRIC 9 and IFRIC 10. 3. Analysis of revenue and profit before tax Six months Six months Year 31 March 31 March 30 September 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Revenue (wholly in the United Kingdom) Property and other investments being gross rents receivable 237 259 515 Property development being sale of development properties 196 - 1,927 ______ ______ ______ 433 259 2,442 ______ ______ ______Profit before taxation Property and other investment 413 353 1,886 Property development 51 99 663 ______ ______ ______ 464 452 2,549 ______ ______ ______ 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 The interim dividend of 3p per share will be paid on 6 July 2007 to shareholderson the register on 8 June 2007. Under accounting standards this dividend is notincluded in the consolidated financial statements for the six months ended 31March 2007. 6. Earnings per share Earnings per share has been calculated using the profit after tax for the periodof £401,000 (six months to 31 March 2006: £367,000; year to 30 September 2006:£2,428,000) and the weighted average number of shares as follows: Weighted average number of shares 31 March 31 March 30 September 2007 2006 2006 Basic 1,741,080 1,773,234 1,763,962 Adjustment to basic for bonus element of shares to be issued on exercise of options 18,114 7,920 16,046 _________ _________ _________Diluted 1,759,194 1,781,154 1,780,008 _________ _________ _________ Copies of the Interim Report will be posted to shareholders shortly, and will beavailable at: www.cardiff-property.com Directors and Advisers Directors Auditor J Richard Wollenberg, KPMG Audit PlcChairman and chief executiveDavid A Whitaker FCAFinance director Stockbrokers and financial advisersNigel D Jamieson BSc, MRICS, FSI, Arbuthnot Securities LimitedIndependent non-executive director 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 Financial Calendar 2007 27 April Interim results for 2007 announced 6 June Ex dividend date for interim dividend 8 June Record date for interim dividend 6 July Interim dividend to be paid 30 September End of accounting year December Final results for 2007 announced2008 January Annual general meeting February Final dividend to be paid This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Cardiff Property