19th Mar 2007 07:03
Standard Life Invs Property Inc Tst19 March 2007 19 March 2007Standard Life Investments Property Income Trust LimitedPreliminary Results in respect of the year ended 31 December 2006 Financial Highlights •Net Asset Value per share increased by 13.9% to 132.7p •Net Asset Value total return since launch of 70.8% •Property portfolio valued at £239.4m •Four properties acquired over the year •Dividends per share of 6.695p for the year •Dividend yield of 5.3% based on year end share price Financial Summary 31 December 2006 31 December 2005 % ChangePrice per share 125.3p 118.1p 6.1%Value of property portfolio * £239.4m £202.3m 18.3%Cumulative Dividend per share 6.695p 6.500p 3.0%IFRS Net Asset Value pershare ** 127.8p 113.6p 12.5%Published adjusted IFRS NetAsset Value per share *** 132.7p 116.5p 13.9% * Valued on a market value basis in accordance with the RICS Appraisal andValuation Standards.** Calculated under International Financial Reporting Standards.*** Calculated under International Financial Reporting Standards adjusted toexclude Deferred Taxation and to include the fourth quarter dividend. Extracts from the Chairman's statement: "I am pleased to report that 2006 proved to be another positive year for UKcommercial property in general and your Company in particular. The adjusted IFRSnet asset value (after deducting the final dividend and adding back deferredtaxation) increased by 13.9% over the financial year ended 31 December 2006 andtotal annual dividends of 6.695p per share have been paid to shareholders overthe year. One of the main objectives of the Company is to provide an attractive level ofincome. I am pleased to report that in respect of the last financial year theCompany's income return from its property portfolio was 6.6% compared with anincome return for the IPD universe of 4.7%. The UK commercial property market continues to deliver positive returns, withtotal returns as measured by IPD Monthly Index, delivering 18.1% over the year.This compares with the UK equity market producing a total return of 16.75%, asmeasured by the FTSE All-Share Index, and the UK gilt market delivering a totalreturn of 0.69% as measured by the FTSE British Government All Stocks Index.Over the last three years the total returns produced by property as an assetclass have been very attractive compared with equities and bonds. Performance was once again primarily attributable to increasing capital valuesacross the portfolio, as well as the continued benefits of financial gearing ina strong market. The theme of strong inward yield shift that has driven themarket over the last three years is now showing signs of having run its course.The cost of borrowing has increased during 2006 and the margin for debt backedbuyers has reduced considerably. There is still strong demand for good qualitystock, particularly for office property in Central London. The Company has acquired 4 properties over the reporting period, at an aggregatenet cost of £22.5m. These properties have an attractive income yield and highquality tenants. The purchases have been predominately debt financed and theportfolio value at the end of December 2006 was £239.4m. The average unexpiredlease term for the portfolio was 9.4 years which is slightly longer than the IPD(market) average. During September 2006 the Company issued 4m shares at 133p pershare providing gross proceeds of £5.3m. During the fourth quarter the market appetite for offshore closed ended UKcommercial property trusts such as your Company appeared to reduce as the shareprices moved from small premiums to net asset values to small discounts. At theyear end the Company's share price was 125.3p per share which represented adiscount of 5.6% to the year end net asset value of 132.7p per share. The Board increased the interim dividend in respect of the quarter ended 30 June2006 by 4% to 1.69p per share. Subsequent interim dividends have been increasedto this new level of 1.69p per share. Therefore in respect of the financialyear, total dividends represented 6.695p per share on an accruals basis comparedwith 6.5p per share for the previous year. The interim dividend of 1.69p pershare in respect of the quarter ended 31 December 2006 was paid on 28 February2007. At the year end the Company's ordinary shares provided an attractivedividend yield of 5.3% compared with a yield of 2.9% for the FTSE All-ShareIndex. The managers have increased their marketing of the Company to existing andpotential new institutional and private client shareholders during 2006particularly following the change of the individual fund manager, withinStandard Life Investments, who has responsibility for asset management of theportfolio. Jason Baggaley, a qualified chartered surveyor with 16 years realestate fund management experience, assumed responsibility for the fundmanagement of the Company's assets in August 2006. The Board have undertaken a thorough review of the portfolio with the managersas asset management initiatives and rental growth are likely to be the maindrivers of total return going forward. Whilst the outlook for UK commercial property remains broadly positive ascontinuing economic growth underpins corporate demand for commercial space, theexpectations are that the exceptional performance of the last three years cannotcontinue with total returns expected to be in high single digits in the comingyear, and income return providing the main component of total return, much as ithas over the long term. The Company's property portfolio is reasonably wellplaced, based upon sector weightings, relatively long leases and high incomereturn to produce attractive investment returns to shareholders. David MooreChairman" All Enquiries to: The Company SecretaryNorthern Trust International Fund Administration Services (Guernsey) LtdTrafalgar CourtLes BanquesSt Peter PortGuernseyTel: 01481 745001 Richard EnglandGordon HumphriesJason BaggaleyStandard Life InvestmentsTel: 0131 225 2345 Standard Life Investments Property Income Trust LimitedConsolidated Income StatementFor the year ended 31 December 2006 2006 2005 £ £ IncomeUnrealised gain arising onadjustment to fair value ofinvestment properties 12,701,088 18,893,599Realised gain on disposal ofinvestment property - 145,281Rental income 14,811,508 12,878,325 -------- --------Total income and fair valuegains 27,512,596 31,917,205 -------- -------- ExpenditureInvestment management fees (1,915,571) (1,584,607)Head lease payments (283,854) (283,572)Valuation fees (81,500) (72,500)Other direct property costs (302,323) (109,734)Directors' fees and subsistence (83,022) (75,547)Other administration expenses (172,164) (194,035) -------- -------- (2,838,434) (2,319,995) -------- -------- Operating profit 24,674,162 29,597,210 Finance costs - netInterest payable (5,375,415) (4,397,047)Interest receivable 331,532 262,109 -------- -------- (5,043,883) (4,134,938) -------- -------- -------- --------Profit for the year beforetaxation 19,630,279 25,462,272 -------- -------- Taxation (2,449,225) (3,880,011) -------- --------Profit for the year 17,181,054 21,582,261 ======== ======== Earnings per share for the yearattributable to the equity holders of theCompany Basic and diluted 16.99 21.58 pence pence All items in the above income statement derive from continuing operations Standard Life Investments Property Income Trust LimitedConsolidated Balance SheetAs at 31 December 2006 2006 2005 £ £ASSETSNon-currentassetsFreehold 195,915,863 168,194,233investmentpropertiesLeasehold 47,984,258 39,105,163investmentpropertiesInterest rate 501,862 -swap -------------------------------------------- -------------- 244,401,983 207,299,396 -------------------------------------------- --------------CurrentassetsTrade and 3,734,872 2,134,473otherreceivablesCash and cash 5,214,503 13,711,633equivalents --------------------------------------------- -------------- 8,949,375 15,846,106 --------------------------------------------- -------------- --------------------------------------------- --------------Total assets 253,351,358 223,145,502 ============================================= ============== EQUITYCapital andreservesattributableto Company'sequityholdersShare 1,040,000 1,000,000capitalShare 5,217,022 -premiumRetained (4,146,647) (2,334,373)earningsCapital 35,961,779 19,734,918reservesOther 94,801,259 95,206,619distributable --------------------------------------------- ----------------reservesTotal equity 132,873,413 113,607,164 --------------------------------------------- ---------------- LIABILITIESNon-currentliabilitiesTaxation 6,895,522 4,446,297Bank 84,432,692 84,432,692borrowingsRedeemable 7,161,365 6,756,006preferencesharesLeasehold 4,544,339 4,801,715obligationsInterest rate - 3,023,911swap --------------------------------------------- ---------------- 103,033,918 103,460,621 --------------------------------------------- ---------------- CurrentliabilitiesTrade and 7,310,579 5,794,269other payablesBank 9,850,000 -borrowingsLeasehold 283,448 283,448obligations --------------------------------------------- ------------------- 17,444,027 6,077,717 --------------------------------------------- ------------------- --------------------------------------------- -------------------Total 120,477,945 109,538,338liabilities --------------------------------------------- ------------------- --------------------------------------------- -------------------Total equity 253,351,358 223,145,502and ============================================= ===================liabilities Standard Life Investments Property Income Trust LimitedConsolidated Statement of Changes in EquityFor the year ended 31 December 2005 Share Share Retained Capital Other Total capital Premium earnings Reserve distributable equity reserves £ £ £ £ £ £ Openingbalance 1January 1,000,000 - 135,973 5,214,861 96,692,892 103,043,7262005 Profit forthe - - 21,582,261 - - 21,582,261yearUnrealisedgain arisingonadjustmentto fair valueof investmentproperties - - (18,893,599) 18,893,599 - -Transfer betweenreserves* - - 1,486,273 - (1,486,273) -Realised gainon disposalofinvestment - - (145,281) 145,281 - -propertyMovement inrevaluationof interestrate swap - - - (4,518,823) - (4,518,823)Dividends - - (6,500,000) - - (6,500,000) ------- ------- -------- ------- --------- --------Balance at 31December 1,000,000 - ( 2,334,373) 19,734,918 95,206,619 113,607,164 2005 ======= ======= ======== ======= ========= ======== * this is a transfer to move preference share finance costs and launch costsfrom the retained earnings reserve to the other distributable reserves. Consolidated Statement of Changes in EquityFor the year ended 31 December 2006 Share Share Retained Capital Other Total capital Premium earnings reserve distributable equity reserves £ £ £ £ £ £ Openingbalance 1January 1,000,000 - (2,334,373) 19,734,918 95,206,619 113,607,1642006 Profit forthe - - 17,181,054 - - 17,181,054yearUnrealisedgain arisingonadjustmentto fair valueof investmentproperties - - (12,701,088) 12,701,088 - -Transferbetweenreserves* - - 405,360 - (405,360) -Movement inrevaluationof interestrate swap - - - 3,525,773 - 3,525,773Issue ofordinaryshare 40,000 - - - - 40,000capitalShare premiumon issue ofordinary - 5,280,000 - - - 5,280,000sharecapitalShare issuecosts - (62,978) - - - (62,978)Dividends - - (6,697,600) - - (6,697,600) ------- ------- -------- ------- --------- --------Balance at 31December 1,040,000 5,217,022 (4,146,647) 35,961,779 94,801,259 132,873,413 2006 ======= ======= ======== ======= ========= ======== * this is a transfer to move preference share finance costs from the retainedearnings reserve to the other distributable reserves. Standard Life Investments Property Income Trust LimitedConsolidated Cash Flow StatementFor the year ended 31 December 2006 2006 2005 £ £ Cash flows from operating activitiesCash generated from operations 10,547,679 11,960,434Interest paid (3,631,250) (4,014,632) ------------- ----------Net cash generated from operating activities 6,916,429 7,945,802 ------------- ---------- Cash flows from investing activitiesPurchase of investment properties (24,154,513) (27,776,307)Sale of investment properties - 8,500,000Interest received 331,532 262,109 ------------- ----------Net cash used in investing activities (23,822,981) (19,014,198) ------------- ---------- Cash flows from financing activitiesProceeds from issuing of new ordinary shares 5,320,000 -Share issue costs (62,978) -Proceeds from bank borrowings 9,850,000 23,722,916Dividends paid (6,697,600) (6,500,000) ------------- ----------Net cash generated from financing activities 8,409,422 17,222,916 ------------- ---------- ------------- ----------Net (decrease)/increase in cash and cashequivalents (8,497,130) 6,154,520in the year ============= ========== Cash and cash equivalents at beginning of year 13,711,633 7,557,113 ------------- ----------Cash and cash equivalents at end of year 5,214,503 13,711,633 ------------- ---------- STANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2006 1. The results of the Group were prepared on the basis of InternationalFinancial Reporting Standards and the accounting policies set out in the lastpublished accounts of the Group for the year ended 31 December 2005. 2. The final dividend in respect of 2006 was declared on 8 February 2007 andpaid on 28 February 2007 to shareholders. 3. There were 104,000,000 Ordinary Shares in issue at 31 December 2006. Theearnings per Ordinary Share are based on the profit of the year of £17,181,054and on 101,117,808 Ordinary Shares, being the weighted average number of sharesin issue during the year. 4. The Group results consolidate those of Standard Life Investments HoldingsLimited, a wholly owned subsidiary which invests in properties in the UnitedKingdom. 5. The total fair value of freehold and leasehold properties shown on theBalance Sheet is £243,900,121. This differs from the market valuation of theproperty portfolio at the year end of £239,355,000 due to adjustments made toreflect the discounted present value of minimum lease payments and leaseincentives. The full audited accounts for the year ended 31 December 2006 will be sent toshareholders in April 2007, and will be available for inspection at TrafalgarCourt, Les Banques, St Peter Port, Guernsey, the registered office of theCompany. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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