Final Results & Notice of AGM

28 May 2010 GSC Property Holdings plc PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE 12 MONTHS TO 31 DECEMBER 2009 Key points: * Turnover rises 7 per cent to Â£8,342,418 (2008: Â£7,793,240) * Full year dividend 3 pence (net) per share (2008: 3.5 pence) * Net asset value at year end 176 pence per share (2008: 175 pence) Mark Rubin, Chief Executive commented: "Our risk averse strategy, which has served the Company well for many years, remains unchanged. Last year I expressed confidence in the resilience of our long established business model and these results vindicate that view and emphasize the underlying strength and robustness of GSC." ------------------------------------ For further information please contact: Mark Rubin, Chief Executive 01702 293300 Jonathan Williams, Bishop Fleming (Corporate Adviser) 0117 910 0250 Anthony Spiro, Spiro Financial (Press and Investor Relations) 020 8336 6196 ------------------------------------ GSC Property Holdings specialises in commercial property investment in the UK. The company's strategy is to spread risk through building a diverse portfolio to minimise exposure to any single end use or geographical area. Our objective is to add maximum value for shareholders. ------------------------------------ CHAIRMAN'S STATEMENT I am pleased to report that the GSC has delivered a solid set of results for the year to 31 December 2009, which is an excellent achievement considering the continuing harsh trading environment. The deep recession resulting from the 2008 banking crisis, coupled with the ensuing depressed levels of consumer and corporate confidence, created a very difficult business climate. The Company's turnover was seven per cent higher at Â£8,342,418 compared with Â£ 7,793,240 in 2008. The operating profit for the period was Â£5,781,454 (2008: Â£ 2,058,313). The comparative administration costs and operating profit for 2008 includes the fair value adjustment of Â£2,500,000 which was previously shown as an exceptional item. The net asset value of the Company remains virtually unchanged at 176 pence per share (2008: 175 pence) The financial performance for the year under review was most creditable and delivered a clear demonstration of the inherent strengths of the GSC business model. We started the year facing the most difficult and uncertain economic outlook since the company was formed over 30 years ago. While we could do nothing to influence the UK economy, we could do a great deal to hold GSC to its consistent strategy, which has proved so successful over many years. At this time last year your Board stated that in view of the general uncertainty it was prudent to conserve cash and accordingly reduced the final dividend to 1.5 pence. Although the degree of uncertainty has lessened somewhat your Board still believes that it should maintain its cautious stance and is recommending a final dividend of 1.0 pence per share (2008: 1.5 pence per share). The total dividend for the year is 3.0 pence per share (2008: 3.5 pence per share). It will be paid on 30 June 2010 to shareholders on the register on 11 June 2010. The Annual General Meeting of the Company will be held on 29 June 2010 at Courtway House, 129 Hamlet Court Road, Westcliff on Sea, Essex at 2pm. GSC's balance sheet continues to be very sound and most of the company's borrowings are long term and at fixed rates. Commercial lending from the major banks is improving from last year's freeze but remains very difficult and at rates well above the Bank of England's Minimum Lending Rate. GSC is hardly affected by this scenario as it has funds in place and lines of credit to draw down should an investment opportunity arise. Our banking arrangements stretch back many years and are built on excellent long-term relationships. At this time last year and also in the Interim statement released in September 2009 I commented that the very tough market conditions provide opportunities for companies like GSC able to move quickly and with the necessary financial resources in place. GSC has identified a number of opportunities to generate value from the continuing market upheaval but we are under no pressure to invest. While we believe that the property sector will recover we will not act in a hasty or precipitate manner, we would rather miss the turn than buy into a false dawn. There may be some early signs of recovery in the commercial property market after its near death experience, nevertheless we remain on the sidelines waiting for the right opportunity. Our commercial portfolio has very good covenants and the bad debt position is very low. The negligible rates of interest offered to cash depositors have encouraged investors to look again at property in order to obtain more acceptable returns. There has been some recovery in capital values from the low point of mid-2009 and this has continued into the current year, albeit at a slow pace, brought about principally by the banks' need to reduce significantly their exposure to the property sector. Our risk averse strategy, which has served the Company well for many years, remains unchanged. Last year I expressed confidence in the resilience of our long established business model and these results vindicate that view and emphasize the underlying strength and robustness of GSC. Alan Gershlick Chairman 28 May 2010 EXTRACT FROM AUDITED FULL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2009 CONSOLIDATED PROFIT AND LOSS ACCOUNT 2009 2008 Â£ Â£ TURNOVER Continuing Operations 8,342,418 7,793,240 --------------- --------------- Group Turnover 8,342,418 7,793,240 Cost of sales (127,852) (154,887) --------------- --------------- GROSS PROFIT 8,214,566 7,638,353 Distribution costs (16,354) (11,162) Administrative expenses (2,416,758) (4,964,066) Loan exit fee - (604,812) --------------- --------------- Group Operating Profit 5,781,454 2,058,313 Exceptional Item Net loss on sale of Investment Property (175,000) - --------------- --------------- Profit on Ordinary Activities before 5,606,454 2,058,313 Interest Interest receivable and similar income 79,815 98,164 Interest payable (5,287,559) (5,669,580) --------------- --------------- Profit / (loss) on ordinary activities 398,710 (3,513,103) before taxation Tax on profit / (loss) on ordinary - - activities --------------- --------------- Profit / (loss) for the Financial Year 398,710 (3,513,103) ========= ========= Basic Earnings per share (pence) 3.81 (33.56) Adjusted Earnings per share (pence) 4.77 (122.37) Weighted average number of ordinary shares 10,468,000 10,468,000 in issue STATEMENT OF GROUP TOTAL RECOGNISED GAINS AND LOSSES 2009 2008 Â£ Â£ Profit / (loss) for the financial year 398,710 (3,513,103) attributable to the shareholders Unrealised surplus / (deficit) on investment 100,000 (9,296,711) properties ------------- ------------- Total gains and losses recognised since the last 498,710 (12,809,814) annual report ======== ======== NOTE OF GROUP HISTORICAL COST PROFIT AND LOSS 2009 2008 Â£ Â£ Profit / (loss) before tax 398,710 (1,013,103) Realisation of valuation gains of previous (74,016) - periods ------------- ------------- Historical cost Profit / (loss) before tax 324,694 (1,013,103) ======== ======== CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2009 2009 2008 Â£ Â£ FIXED ASSETS Intangible assets 264,234 281,849 Tangible assets 4,240,487 4,376,262 Investment Properties 84,371,001 86,521,001 --------------- --------------- 88,875,722 91,179,112 --------------- --------------- CURRENT ASSETS Stocks 20,010,391 20,013,236 Debtors 923,194 1,422,021 Investments 200 200 Cash at bank 1,199,313 1,280,991 --------------- --------------- 22,133,098 22,716,448 --------------- --------------- CREDITORS: Amounts falling due within one year (6,498,398) (7,071,027) --------------- --------------- NET CURRENT ASSETS 15,634,700 15,645,421 --------------- --------------- TOTAL ASSETS LESS CURRENT LIABILITIES 104,510,422 106,824,533 CREDITORS: Amounts falling due after more than (86,056,157) (88,502,598) one year --------------- --------------- 18,454,265 18,321,935 ========= ========= CAPITAL AND RESERVES Called-up equity share capital 104,680 104,680 Share premium account 1,414,350 1,414,350 Revaluation Reserve 12,536,826 12,362,810 Profit and loss account 4,398,409 4,440,095 --------------- --------------- SHAREHOLDERS' FUNDS 18,454,265 18,321,935 ========= ========= NOTES TO THE FINAL RESULTS 1. DIVIDENDS 2009 2008 Â£ Â£ Interim dividend paid at 2p per share (2008 - 209,360 209,360 2.0p) Prior period final dividend paid at 1.5p per 157,020 314,055 share (2008 - 3.0p) ------------- ------------- 366,380 523,415 ======= ======= 2. EARNINGS PER SHARE Basic earnings per share have been calculated to report only distributable earnings arising in the period and do not include movements through the revaluation reserve. Adjusted earnings per share have been calculated to include total earnings attributable to equity shareholders arising in the period. The reconciliation between the two is shown below: 2009 2008 Â£ Â£ Profit / (loss) after tax attributable to 398,710 (3,513,103) the shareholders Unrealised (losses) / gains arising on the 100,000 (9,296,711) revaluation of investment property ---------------- ---------------- Total (losses) / gains attributable to the 498,710 (12,809,814) shareholders ========= ========= Adjusted shares in issue 10,468,000 10,468,000 Pence Pence Basic earning per share 3.81 (33.56) Unrealised (losses) / gains arising on the 0.96 (88.81) revaluation of investment ------------- ------------- Adjusted earnings per share 4.77 (122.37) ======== ======== 3. SHARE CAPITAL Authorised share capital 2009 2008 Â£ Â£ 100,000,000 Ordinary shares of 1,000,000 1,000,000 1p each ======== ======== 2009 2009 2008 2008 No Â£ No Â£ Allotted and called up Ordinary shares of 1p each 10,468,000 104,680 10,468,000 104,680 ======== ======= ======== ======== 4. GROUP RESERVES Share premium account 2009 2008 Â£ Â£ Balance brought forward 1,414,350 1,414,350 Premium on shares issued in the year - - ------------- ------------- Balance carried forward 1,414,350 1,414,350 ======= ======= Revaluation reserve 2009 2008 Â£ Â£ Balance brought forward 12,362,810 21,659,521 Revaluation of investments in the year 100,000 (9,296,711) Transfer to profit and loss account on 74.016 - disposal of properties --------------- --------------- Balance carried forward 12,536,826 12,362,810 ======== ======== Profit and loss account 2009 2008 Â£ Â£ Balance brought forward 4,440,095 8,476,613 (Loss) / profit for the year 398,710 (3,513,103) Transfer from revaluation reserve on disposal of (74,016) - properties Equity dividends paid (366,380) (523,415) -------------- -------------- 4,398,409 4,440,095 ======== ======== 5. ANNUAL GENERAL MEETING The Annual General Meeting of the Company will be held on 29 June 2010 at Courtway House, 129 Hamlet Court Road, Westcliff on Sea, Essex at 2pm.