20th Jun 2005 07:01
Wichford plc20 June 2005 20 June 2005 Wichford plc Maiden interim results; £100 million fundraising Wichford plc ("Wichford" or the "Company"), which invests in property outsideCentral London occupied exclusively by UK Central Government bodies, todayannounces its interim results for the period to 31 March 2005. The Company alsoannounces today a Placing of 55,555,556 new ordinary shares at 180p per share toraise £100 million (before expenses) to finance the purchase of additionalproperties. Highlights • Net assets of £66.6 million at 31 March 2005, increased from £25.8 million at the end of May 2004 • Net asset value up 11% to 163.8p per share • 19 properties purchased or contracted for during the period for £99 million • Wichford now owns 36 properties valued at approximately £210 million with an annualised rental income of approximately £13.5 million • Expected dividend of 9 pence per eligible share for the period to 30 September 2005 Michael Sheehan, Chairman of Wichford, commented today: "This has been an excellent first period for the Company. I am extremely pleasedwith the overall performance achieved by the Company and am particularlyencouraged about the opportunities we will be able to pursue following today'sfund raising. At the end of March, Wichford had increased its portfolio to £227million and has since disposed of the property in Reading at a net profit of£1.5 million. We are well placed to continue to acquire our target propertiesat competitive prices. The enlarged portfolio we will be able to create willimprove Wichford's negotiating position with tenants and debt providers and, weanticipate, will improve returns to shareholders over the long term." Enquiries: WichfordJamie Hambro Tel: 0207 747 5678Philip Cooper Tel: 0207 495 7111Richard Britten-Long Tel: 0207 333 0044 Citigate Dewe Rogerson Tel: 020 7638 9571Patrick Toyne-SewellGeorge Cazenove Chairman's statement It gives me great pleasure to announce the first set of interim results coveringthe period from incorporation on 28 June 2004 to 31 March 2005 for your Company,Wichford plc. The pre-tax profits for the period were £818,000, and net assets grew from£25.8m (147.7p per share), immediately prior to the flotation, to £66.6 million(163.8p per share) at 31 March 2005. In the absence of unforeseencircumstances, the directors expect to recommend the payment of a dividend of 9pence per eligible share for the period to 30 September 2005. The Company has been extremely active in investing the proceeds of theflotation. A further 19 properties costing £99.0 million were purchased orcontracted for during the period. At the balance sheet date your Company ownedor had exchanged on a total of 37 properties valued at approximately £227.6million prior to the sale of the property in Reading as referred to below. Theannualised rental income on the portfolio at 31 March 2005 was approximately£15.5 million. A large number of properties fall due for rent review in the period ending 2007.The Board believes that these reviews will result in an uplift in theCompany's rental income stream. The Company now owns 9 properties where the length of the remaining lease isless than 6 years. The Board believes the advantages of this strategy aretwofold: firstly, the rental yield is higher than on longer lease propertiesand, secondly, there is a strong likelihood that the tenants will renew theleases at or before their expiry. As announced on 3 May 2005, following a satisfactory rent review, the Companysold a property in Reading for a total consideration of £17.2 million andrealised a profit on sale of £1.8 million. The UK property investment market remains strong which has led to average yieldsfalling in the period under review. However, the market in which the Companyoperates is substantial and liquid, and our reputation in the sector continuesto grow. As demonstrated by the level of activity since flotation, we are ableto purchase and sell properties at competitive prices. The Board estimates thatWichford currently owns only 2% of the properties occupied by UK CentralGovernment. The Future As the Board announced on 20 June 2005, subject to shareholders' approval, theCompany intends to issue a further 55,555,556 shares at 180 pence per share tofinance the purchase of additional properties. The enlarged portfolio willimprove Wichford's negotiating position with tenants and debt providers and, weanticipate, will improve returns to shareholders. It is the intention of the Directors, in respect of their shareholdings, to votein favour of the resolutions at the forthcoming Extraordinary General Meeting. Michael Sheehan WICHFORD PLCCONSOLIDATED PROFIT & LOSS ACCOUNTFor the period ended 31 March 2005 £'000 (unaudited) Turnover 7,952 Administrative expenses (1,890) Operating Profit 6,062 Net interest payable (5,244) Profit on ordinary activities before tax 818 Taxation (22) Profit on ordinary activities after tax 796 Dividends - Profit retained for the period 796 EARNINGS PER SHARE:Basic - pence 2.40 CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS & LOSSESFor the period ended 31 March 2005 £'000 (unaudited) Profit for the period 796 Unrealised surplus on revaluation of investment properties 6,245 Total recognised gains relating to the period 7,041 All activities are continuing. WICHFORD PLCCONSOLIDATED BALANCE SHEETAs at 31 March 2005 £'000 (unaudited) FIXED ASSETSTangible assets - Investment properties 211,000 CURRENT ASSETSDebtors 4,173Cash at Bank 13,729 17,902 CREDITORS: Amounts falling due within one year (10,189) NET CURRENT ASSETS/(LIABILITIES) 7,713 TOTAL ASSETS LESS CURRENT LIABILITIES 213,738 CREDITORSAmounts falling due after more than one year (152,117) Net Assets ______ 66,596 CAPITAL AND RESERVESCalled Up Share Capital 4,065Share Premium 55,203Revaluation Reserve 6,245Profit and Loss Account 796Other Reserve 287 Shareholders' Funds ______ 66,596 NET ASSET VALUE 163.84Basic - pence WICHFORD PLCCONSOLIDATED CASH FLOW STATEMENTFor the period ended 31 March 2005 £'000 (unaudited) Net cash movements from operating activities 10,164 RETURN ON INVESTMENTAND SERVICING OF FINANCEInterest received 350 Interest paid (3,507) _______Net outflow from return on investmentand servicing of finance (3,157) CAPITAL EXPENDITUREPayments to acquire tangible fixed assets (91,738) ACQUISITIONS AND DISPOSALSNet cash inflow on acquisitions 1,049 NET CASH OUTFLOW BEFORE FINANCING (83,682) FINANCINGOrdinary share issued (net of expenses) 29,223Increase in debt 68,188 Net cash inflow from financing 7,411 INCREASE IN CASH 13,729 NOTES TO THE FINANCIAL STATEMENTS 1. Accounting Policies The principal accounting policies are summarised below. They have all beenapplied consistently throughout the period. Basis of accounting The financial information has been prepared under the historical costconvention, and in accordance with applicable Isle of Man law and United Kingdomaccounting standards. Basis of consolidation The Group's financial information consolidates that of the Company and itssubsidiary undertakings up to 31 March 2005. The results of a subsidiaryundertaking acquired during the period are included from the date ofacquisition. Profits or losses on intra-group transactions are eliminated infull. On acquisition of a subsidiary, all of the subsidiary's identifiableassets and liabilities which exist at the date of acquisition are recorded attheir fair values at that date. Investment Properties Investment properties are initially recognised at cost, being the fair value ofconsideration given, including acquisition costs associated with the purchase ofthe investment property. All the Group's properties are held for long-term investment. After initialrecognition, investment properties are carried at open market value and areaccounted for in accordance with SSAP19, 'Accounting for Investment Properties'as follows: (i) investment properties are revalued semi-annually. Thesurplus or deficit on revaluation is transferred to the Revaluation Reserveunless a deficit below original cost, or its reversal, on an individualinvestment property is expected to be permanent, in which case it is recognisedin the profit and loss account for the period; and (ii) no depreciation is provided in respect of freehold and longleasehold properties. The Directors believe that the policy of not providingdepreciation is necessary in order to give a true and fair view since thecurrent value of investment properties and changes to that value, are of primaryimportance rather than a calculation of systematic depreciation. Depreciation isonly one of many factors reflected in the semi-annual valuation and the amountwhich might otherwise have been included cannot be separately identified orquantified. Property Disposals Profits or losses on disposal of a property are recognised upon the completionof a sale. Recognition of Income Rental income under operating leases is included in these financial statementson a receivable basis. Interest receivable on short term deposits is accounted for on an accrualsbasis. Insurance premiums recharged to tenants are not reflected in either income orexpense. Expenses Expenses are incurred by the Group in relation to the establishment,constitution, administration and business of the Group. Costs incurred in thepurchase of investment properties are capitalised as part of the cost ofinvestment. Costs relating to acquisitions in progress are retained in thebalance sheet and included in the cost of acquisition on completion. Costsincurred on aborted acquisitions are written off to the profit and loss account. Loan Issue Costs In accordance with FRS 4 'Capital Instruments', loans are stated in the balancesheet net of any issue costs. Those costs are spread over the life of the loanon an effective yield basis. Derivative Instruments The Group uses interest rate derivatives to hedge interest rate exposures on theGroup's borrowings. The Group's criteria for adopting hedge accounting for interest rate swaps are: (i) the derivative instrument must be related to a liability atinception; and (ii) it must reduce the interest rate risk on such future borrowings asto limit the exposure to increases in interest rates. Interest differentials are recognised by accruing the net interest payable. Thecost of interest rate hedges is recorded in the balance sheet against theassociated borrowing and is taken to the profit and loss account over the lifeof the hedging relationship. If the hedge is terminated early, the gain/loss isrecognised on a basis which matches the timing and accounting treatment of thehedged item. Taxation Current tax, including corporation tax and foreign tax, is provided at amountsexpected to be paid or recovered using the tax rates and laws that have beenenacted or substantially enacted by the balance sheet date. Deferred tax is recognised in respect of all timing differences that haveoriginated but not reversed at the balance sheet date where transactions orevents have occurred at that date that will result in an obligation to pay more,or a right to pay less or receive more, tax, with the following exceptions: • Provision is made for tax on gains from the revaluation (and similarfair value adjustments) of fixed assets, or gains on disposal of fixed assetsthat have been rolled over into replacement assets, only to the extent that, atthe balance sheet date, there is a binding agreement to dispose of the assetsconcerned. However, no provision is made where, on the basis of all availableevidence at the balance sheet date, it is more likely than not that the taxablegain will be rolled over into replacement assets and charged to tax only wherethe replacement assets are sold. • Deferred tax assets are recognised only to the extent that theDirectors consider that it is more likely than not that there will be suitabletaxable profits from which the underlying timing differences can be deducted. Where required deferred tax is provided, without discounting, under theliability method at the tax rates that are expected to apply in the periods inwhich timing differences reverse, based on tax rates and laws enacted orsubstantively enacted at the balance sheet date. 2. Turnover £'000 Rental income from pre flotation properties 6,054Rental income from properties acquired in period 1,898 Total 7,952 3. Net Interest Payable £'000 Interest receivable 372Interest payable (5,616) Net interest payable (5,244) 4. Taxation The taxation charge shown consists of UK income tax levied on bank interestreceived. 5. Share Capital AuthorisedOrdinary Shares of 10p each - number 100,000,000Ordinary Shares of 10p each - £ 10,000,000 Issued, Called Up and Fully Paid Ordinary Shares of 10p each - number 40,645,959Ordinary Shares of 10p each - £ 4,064,596 The Company made a placing of Ordinary Shares on 30 March 2005 whereby theshares issued at that time do not rank for any dividend related to the currentfinancial year, but will rank pari passu with the previous Ordinary Shares fordividends for the financial periods beginning 1 October 2005. Number £ Ordinary Shares of 10p Each- ranking for dividends for the current year 38,565,741 3,856,574- not ranking for dividends for the current year 2,080,218 208,022 Total ranking for dividends in subsequent financial years 40,645,959 4,064,596 6. Reserves £'000Revaluation ReserveOpening Balance -Revaluation of properties during the period 6,245 As at 31 March 2005 6,245 Profit and Loss AccountOpening Balance -Profit for the period 796As at 31 March 2005 796 Other ReserveOpening Balance Additions in period 287 As at 31 March 2005 287 The Other Reserve additions in the period result from an accrual for aPerformance Fee to the group's Property Adviser that, if it becomes payable,will be satisfied by the issuance of shares in the Company. Copies of the Interim Report will shortly be available from the RegisteredOffice at 1st Floor, 28 Victoria Street, Douglas, Isle of Man IM1 2LE. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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