Final Results

RNS Number : 7347U

CareCapital Group plc

30 June 2009

 



30 June 2009

CARECAPITAL GROUP PLC

("CareCapital" or "the Company")

Financial statements for the year to 31 December 2008

CareCapital plc (AIM: CARE), the healthcare real estate developer and owner, is pleased to announce its audited financial statements for the year to 31 December 2008.

Highlights

•    Group rental income up 35% to £2.86 million (2007: £2.12 million).

•    Portfolio value up 31% to £52.3 million (2007: £39.9 million).

•    Rent reviews for the year have produced an average increase of 10.4%.

•    Completion of two developments with a combined value of £8.9 million.

•    Development programme in the UK and Germany with a value of £87 million.

Chairman's statement

I am pleased to present the 2008 financial results for CareCapital Group Plc and report on activities during the year and since my last year end statement published on 25 June 2008.

Good progress has been achieved during the period under review despite the prevailing economic conditions. In the UK, the 1,200m sq. dental/medical facility in Folkestone has been completed and the projects in Southampton and Coventry are being progressed with the objective of construction commencing in the late summer/early autumn this year. Additionally, the other projects in our development pipeline are being moved forward in line with their projected timetables in both the UK and Germany. In Germany, we have completed the 3,300m sq. development in Marktredwitz, Northern Bavaria, which is fully let and also commenced construction on a 3,600m sq. medical office building south east of Berlin; this pre-let facility is scheduled for completion in the early spring next year. Pre-letting is well advanced on a further development project in central Berlin. 

At 31 December 2008 the value of our completed investment properties had increased to £52.3 million (2007: £39.9 million) and developments in progress to £3.5 million (2007: £3.1 million). We now have 103 tenants in 26 completed buildings generating £3.06 million (2007: £2.36 million) in rental income on an annualised basis.

Independent valuation reviews have been conducted in respect of both the UK and German property portfolios. Although the valuation of the German properties (representing 48.9% of the overall portfolio) was in line with previous valuations, the UK value was reduced by £2.03 million as a consequence of the then current market conditions. This adjustment, offset to an extent by uplifts in value on completed developments and increases in value resulting from rent reviews, has been charged against profit and is largely the reason for reporting a loss for 2008 of £1.69 million after tax (2007: £1.51 million profit).

The underlying strength in terms of tenant covenant and the requirement to expand services at the community level has meant that the perceived softening of capital yields in the medical office building sector has had a far lesser impact than the property market generally and this is reflected in our continuing ability to secure development funding and long term debt financing from our panel of banks on competitive terms and at relatively high loan to value ratios. 

In order to maintain the momentum of our development programme we successfully completed two general financings for the Company during 2008; raising £3.9 million through the refinancing of a substantial part of the UK portfolio and a further £4 million by way of a short term mezzanine loan.

We are currently negotiating an additional financing which will ensure the fulfilment of our current developments and enable further expansion beyond that programme. It is anticipated this funding will be completed before the end of September.

The past twelve months have been a challenge in a number of ways for the Company not least as a result of the prevailing economic conditions. It is a reflection of the skills and experience of our staff that these challenges are overcome and the Company continues to make significant progress."

Dr. Michael Sinclair

Chairman

29 June 2009

Consolidated income statement

For the year ended 31 December 2008

	Group 2008	Group 2007
	£	£
Continuing operations
Revenue	2,856,110	2,115,026
Cost of sales	(416,025)	(162,806)
Gross profit	2,440,085	1,952,220
Administrative expenses	(1,750,826)	(1,845,788)
Other operating income	-	126,180
Net (deficit)/surplus on revaluation of investment properties	(1,655,932)	2,507,319
Operating (loss)/profit	(966,673)	2,739,931
Finance income	1,208,929	257,872
Finance costs	(2,548,868)	(1,351,164)
Change in fair value of financial instruments	92,256	7,239
Net finance costs	(1,247,683)	(1,086,053)
(Loss)/profit before tax	(2,214,356)	1,653,878
Taxation	524,195	(144,290)
(Loss)/profit after taxation	(1,690,161)	1,509,588
Discontinued operations
Loss from discontinued operations	-	(27,965)
(Loss)/profit for the period
- attributable to equity shareholders	(1,688,027)	1,353,187
- attributable to minority interest	(2,134)	128,436
	(1,690,161)	1,481,623
(Loss)/earnings per ordinary share
Basic - total	(2.20)p	1.76p
- continuing operations	(2.20)p	1.76p
- discontinued operations	-	-
Diluted - total	(2.20)p	1.72p
- continuing operations	(2.20)p	1.72p
- discontinued operations	-	-
Weighted average number of shares (000')	76,754	76,754

Consolidated balance sheet

As at 31 December 2008

	Group 2008	Group 2007
	£	£
Non-current assets
Goodwill	1,751,959	1,751,959
Investment properties	52,331,824	39,931,316
Development properties	3,512,716	3,086,413
Leasehold improvements	79,914	89,315
Plant and equipment	58,941	56,467
	57,735,354	44,915,470
Current assets
Trade and other receivables	465,181	546,145
Cash and cash equivalents	2,519,519	118,680
	2,984,700	664,825
Total assets	60,720,054	45,580,295
Current liabilities
Trade and other payables	(1,940,940)	(790,472)
Borrowings, including finance leases	(4,438,452)	(2,393,676)
Derivative financial instruments	-	(92,256)
	(6,379,392)	(3,276,404)
Non-current liabilities
Borrowings, including finance leases	(38,327,667)	(24,745,982)
Deferred tax	(2,103,420)	(2,627,615)
	(40,431,087)	(27,373,597)
Total liabilities	(46,810,479)	(30,650,001)
Net assets	13,909,575	14,930,294
Equity
Share capital	767,541	767,541
Share premium account	1,397,500	1,397,500
Share option reserve	390,606	209,332
Reverse acquisition reserve	11,038,204	11,038,204
Exchange movements reserve	443,404	4,053
Profit and loss account	(303,469)	1,384,558
Equity attributable to shareholders of the Parent	13,733,786	14,801,188
Minority Interest	175,789	129,106
Total equity	13,909,575	14,930,294

Consolidated cash flow statement

For the year ended 31 December 2008

	Group 2008	Group 2007
	£	£
Cash flows from operating activities
(Loss)/profit after taxation	(1,690,161)	1,481,623
Adjustments:
Taxation	(524,195)	144,290
Change in fair value of financial instruments	(92,256)	(7,239)
Finance costs	2,548,868	1,351,164
Finance income	(1,208,929)	(257,872)
Unrealised net revaluation losses/(gains) on investment properties	1,655,932	(2,507,319)
Profit on sale of property	-	(126,180)
Depreciation	38,460	33,709
Write off of development costs incurred	16,933	15,456
Share based payments	21,649	66,277
Cash flows from operations before changes in working capital	766,301	193,909
Change in trade and other receivables	(13,770)	13,325
Change in trade and other payables	808,538	(281,429)
Cash generated/(used) from operations	1,561,069	(74,195)
Interest paid	(2,186,557)	(1,338,024)
Cash flows from operating activities	(625,488)	1,412,219)
Cash flows from investing activities
Purchase of investment property	(520,845)	7,349,714)
Sale of non-current asset held for sale	-	1,626,180
Capital expenditure on development properties	(8,461,421)	(2,596,953)
Purchase of leasehold improvements	(400)	(96,305)
Purchase of plant and equipment	(31,133)	(55,470)
Sale of plant and equipment	-	440
Interest received	10,933	59,564
Cash flows from investing activities	(9,002,866)	(8,412,258)
Cash flows from financing activities
New mortgage loans raised (net of transaction costs)	22,868,788	6,519,028
Repayment of loans	(12,588,154)	(403,651)
Repayment of finance leases	-	(8,041)
Repayment of loan on non-current asset held for sale	-	(468,539)
Directors' loan (net of costs)	3,666,724	-
Cash flows from financing activities	13,947,358	5,638,797
Increase/(decrease) in cash and cash equivalents	4,319,004	(4,185,680)
Cash and cash equivalents at 1 January	(1,863,747)	2,321,933
Cash and cash equivalents at 31 December	2,455,257	(1,863,747)

Consolidated statement of changes in equity

For the year ended 31 December 2008

	Share capital £	Share premium £	Share options reserve £	Reverse acquisition reserve £	Exchange rate movement reserve £	Profit and loss account £	Equity share-holders' interest £	Minority interest £	Total £
Balance at 1 January 2007	767,541	1,397,500	143,055	11,038,204	-	31,371	13,377,671	-	13,377,671
Exchange rate movement	-	-	-	-	4,053	-	4,053	450	4,503
Profit for the year	-	-	-	-	-	1,353,187	1,353,187	128,436	1,481,623
Total recognised income and expenditure	-	-	-	-	4,053	1,353,187	1,357,240	128,886	1,486,126
Share based payment
- employee services*	-	-	66,277	-	-	-	66,277	-	66,277
Minority interest in subsidiary	-	-	-	-	-	-	-	220	220
Balance at 31 December 2007	767,541	1,397,500	209,332	11,038,204	4,053	1,384,558	14,801,188	129,106	14,930,294
Balance at 1 January 2008	767,541	1,397,500	209,332	11,038,204	4,053	1,384,558	14,801,188	129,106	14,930,294
Exchange rate movement	-	-	-	-	439,351	-	439,351	48,817	488,168
Loss for the year	-	-	-	-	-	(1,688,027)	(1,688,027)	(2,134)	(1,690,161)
Total recognised income and expenditure	-	-	-	-	439,351	(1,688,027)	(1,248,676)	46,683	(1,201,993)
Share based payment
- employee services	-	-	21,649	-	-	-	21,649	-	21,649
- costs of raising finance	-	-	159,625	-	-	-	159,625	-	159,625
Balance at 31 December 2008	767,541	1,397,500	390,606	11,038,204	443,404	(303,469)	13,733,786	175,789	13,909,575

Notice of Annual General Meeting

Notice is hereby given that the Annual General Meeting of CareCapital Group Plc ("the Company") will be held at 54 Baker Street, London W1U 7BU on Wednesday, 29 July 2009 at 10.00 a.m. Details of the resolutions proposed are included in the Notice of the Annual General Meeting which will be posted to shareholders on 3 July 2009 and is available on the Company's web site at www.carecapital.co.uk

Financial Statements & Audit Opinion

The financial information included in this preliminary results announcement for the years ended 31 December 2008 and 31 December 2008 does not comprise statutory accounts within the meaning of section 240 of the Companies Act 1985. It represents an extract from the statutory accounts, which have not yet been delivered to the Registrar of Companies. Statutory accounts for the year ended 31 December 2008 were today approved by the Board of directors and delivered to the Registrar of Companies.

In forming their opinion, which was not qualified, the auditors have considered the adequacy of the disclosure made in accounting policy (a) to the financial statements concerning the Group's ability to continue as a going concern. The Group had net current liabilities of £3.4 million at 31 December 2008 and has commitments to develop new properties. As a result, the Group requires further funding to meet it debt repayment, development programme and working capital requirements. These conditions, along with the other matters explained in accounting policy (a) to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

Publication of the Annual Report & Accounts

Copies of the Annual Report & Accounts have today been posted on the Company's web site at www.carecapital.co.uk. Printed copies of the financial statements will be posted to shareholders on 3 July 2009.

For further information please visit www.carecapital.co.uk or contact:

Paul Stacey, Managing Director Steve Wilden, Finance Director	Simon Leathers	Simon Hudson,  Paul Young
CareCapital Group Plc	Daniel Stewart & Co. Plc	Tavistock Communications
Tel: [phone]	Tel: [phone]	Tel: [phone]
[e-mail]	[e-mail]	[e-mail]
[e-mail]		[e-mail]

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