7th Dec 2007 17:06
Wichford plc07 December 2007 Wichford P.L.C. ("Wichford" or the "Company") Restatement of Interim Results under IFRS 7 December 2007 Wichford P.L.C., the property investment company, on 26 November 2007 announcedits intended move from London Stock Exchange plc's AIM market ("AIM") to theOfficial List of the UK Listing Authority (the "Admission"), which is expectedto become effective on or around 28 December 2007. As part of the process for Admission, the Company will be required to preparefinancial information for the period to 30 September 2007 under IFRS accountingstandards. To date, the Company has reported under UK GAAP accounting standardsand most recently announced its interim results for the six months ended 31March 2007 on 23 May 2007 under UK GAAP. In order, therefore, to provideconsistency between the interim and full year financial information for 2007,the Company sets out below its interim results for the current financial yearrestated under IFRS, together with a commentary on the principal adjustmentsresulting from this change of accounting standards. Commentary on IFRS restatement The change from UK GAAP to IFRS accounting standards involves bothpresentational and conceptual issues. The restated results shown below reflectboth of these types of changes. An example of the presentational changes is thatthe prime statement showing the profit of the Company is now called theConsolidated Income Statement rather than Consolidated Profit and Loss Account.This commentary will explain more of the conceptual changes rather than thepresentational ones. Reconciliations between the UK GAAP and IFRS results forthe six months to 31st March 2007 and 31st March 2006 together with the year to30th September 2006 are shown in Note 14 below. The following points outline the most significant changes to the 2007 Interimresults under IFRS: Under UK GAAP lease incentives were reported over the period to the next rentreview, while under IFRS this period is extended to cover the whole term of thelease. The effect of this on these results is to increase net rental income by£94,000 over the six months.Upfront cash lease incentives should, under IFRS, berecognised as reductions in rental income over the lease term rather than asadministrative expenses as under UK GAAP. • Under IFRS, where any rental agreements have fixed increments, the effects of these increments should be spread over the term of the leases. For UK GAAP these increases are recognised as they fall due. This results in an increase in rental income for the six months to 31 March 2007 of £192,000 (2006: £88,000). • The changes in valuation of the investment properties have previously under UK GAAP been reported in the Statement of Total recognised Gains and Losses following the Profit and Loss Account and included in a separate reserve in Capital and Reserves. For IFRS purposes the Company has, in line with most property companies, shown these movements in the Consolidated Income Statement with the result that the surpluses become part of Retained Earnings on the Balance Sheet. This is the single most significant change to the presentation of the results, which now shows a profit for the six months to 31 March 2007 of £3,802,000 as opposed to a surplus under UK GAAP of £4,539,000 mainly due to the elevation of the valuation deficit of £1,053,000 (2006: surplus of £17,847,000) into the Income Statement. The leases with head lessors are treated as finance leases under IFRS as opposedto operating leases under UK GAAP. The result of this change is that theoperating expenses are decreased and the financing costs increased in theConsolidated Income Statement and on the Consolidated Balance Sheet the totalcommitment to these finance leases are shown as liabilities with an equivalentincrease to the reported value of the investment properties. The value of thisadjustment on the Consolidated Balance Sheet is to increase finance leaseobligations and investment property by £3,236,000. • Under IFRS the fair value of the interest rate derivatives the Company employs to minimise exposure to interest rate movements are now shown on the Consolidated Balance Sheet as the Company has designated them as hedging instruments. This has increased the assets and reserves by £8,454,000 for the period. Under UK GAAP there was no requirement to recognise this item on the Consolidated Balance Sheet. • There is also a requirement under IFRS to assess the impact on deferred tax of these adjustments. This has resulted in a related deferred tax charge of £134,000 for the period. Enquiries: Wichford P.L.C.Philippe de Nicolay 00 331 40 74 42 79David Harrel 020 7111 2222 Wichford Property Management LimitedJamie Hambro 020 7747 5678Richard Britten-Long 020 7016 6150 Citigate Dewe Rogerson 020 7638 9571George CazenoveHannah Seward Evolution Securities Limited 020 7071 4300Nominated Adviser, Joint Sponsor and Joint BrokerTim WorlledgeJeremy Ellis KBC Peel Hunt Ltd 020 7418 8900Joint Sponsor and Joint BrokerNick MaslenDavid Anderson Notes to editors Wichford P.L.C. (AIM:WICH) is a property investment company with a portfoliofocused on UK and Continental European investment property primarily occupied byCentral and State Government bodies. Approximately a quarter of the portfoliocomprises public sector rented properties in France, Germany and theNetherlands. The Company currently owns 77 properties with a gross asset value of in excessof £650m generating a rental income of circa £39.6m per annum. The Company'sportfolio of properties has unit values usually between £2m and £30m. TheCompany's current core portfolio has a weighted average unexpired lease term ofcirca 11 years. Wichford announced on 26 November 2007 that it intends to move to the OfficialList of the London Stock Exchange, subject to approval by the UKLA and theLondon Stock Exchange, on or around 28 December 2007. Paste the following link into your web browser to download the PDF document forthe Restated Interim Results related to this announcement: http://www.rns-pdf.londonstockexchange.com/rns/4848j_-2007-12-7.pdf This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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