Final Results

Benchmark Group PLC 24 September 2001 For immediate release 24 September 2001 PRELIMINARY RESULTS For the Year Ended 30 June 2001 Pre-tax profit increased by 39% Special dividend of 60p per share Benchmark Group PLC ('Benchmark'), the specialist Central London property investment and development company, announces a 39% increase in pre-tax profit for the year ended 30 June 2001. With its strong financial position and in order to enhance total shareholder returns, Benchmark has decided to pay a special dividend of 60p per share, to be paid as an interim dividend in respect of the year to 30 June 2002, in addition to the proposed final dividend of 2.6p per share. Financial Highlights 30 June 2001 30 June 2000 % change Profit before tax £21.5m £15.5m 38.7% Earnings per share 13.4p 11.2p 19.6% Diluted NAV per share 373.9p 338.4p 10.5% Total dividend per share 4.55p 4.15p 9.6% Net gearing 57.4%(1) 64.3% (1) Following the completion of the WELPUT transaction post year-end, and the payment of the special dividend, the pro-forma gearing will reduce to 43%. Corporate Highlights * Investment properties showed a net increase of 6.0% or £47.9 million based on independent valuation. * Net rental income increased by 54.7% to £31.4 million (2000: £20.3 million). As at the date of this announcement, the annualised net rental income of the portfolio is £38.7 million. * £169.7 million spent on acquisitions in Central London during the year including 6/10 Bruton Street, Melrose House and Jackson House, Savile Row and a 50% share in the joint venture with JER Partners for the acquisition of a £250 million portfolio from MEPC. * £76.8 million of sales achieved during the period providing a net profit above book value of £3.9 million, £23.2 million over historic cost. * Since the year end, Benchmark has sold for a total consideration of £249.5 million, its entire partnership interests in Benchmark (Jersey) No.1 LP to WEL Property Limited Partnership, a Jersey Limited Partnership in which The West End of London Property Unit Trust ('WELPUT'), a Jersey unit trust, has a 50.1% interest. Benchmark has a 46% interest in WELPUT and a 49.9% interest in WEL Property Limited Partnership. Tan Sri Quek Leng Chan, Chairman of Benchmark, said: 'Having paid our shareholders a special dividend, we remain well placed, with sufficient resources available, to take advantage of new opportunities as they arise. 'We are in excellent shape to continue to deliver shareholder value in our chosen area of specialisation against the backdrop of a Central London property market which has short-term uncertainties but, in our view, long-term strength and resilience.' For further information, please contact: Benchmark Group PLC Tavistock Communications Ltd Nigel Kempner, Chief Executive Jeremy Carey / Bella Pagdin Tel: 020 7287 6881 Tel: 020 7600 2288 www.benchmarkgroup.plc.uk CHAIRMAN'S STATEMENT INTRODUCTION The year ended 30 June 2001, and the subsequent period up to the date of this statement, has seen a rearrangement of how the Group's properties are owned. This has enabled us to consolidate on past successes and provide the resources to take full advantage of opportunities in the future. The first major placing of new shares in the Group took place in October 1996 at a price of 160p per share when our portfolio was in the region of 110,000 sq ft and valued at £20 million, with a net asset value of 168.1p per share. Today we manage in Central London a portfolio in the region of 2 million sq ft valued at £1.1 billion, and we have a net asset value of 373.9p per share on a diluted basis. The Central London property market is currently showing resilience particularly in the West End, where we specialise. There is still a limited supply of new offices and a reasonable demand from a wide tenant base. Recent investor demand for property in Central London has been led by private investors, with their appetite for new purchases being in recent times closely linked to the cost of borrowing and availability of funding. Institutions have been less active over recent months due to sector allocation constraint. Against this backdrop we have taken advantage of a relatively stable market to complete lettings of vacant office space, achieve sales to transform unrealised valuation surpluses into realised profits and make acquisitions where we believe we can add value through our specialist expertise. Currently we have the lowest capital expenditure programme, the lowest level of gearing and the largest investment portfolio under our management since Benchmark was reborn as a property company in 1996. Since the year end, we have taken the opportunity to combine with Schroder Property Investment Management to set up a new property unit trust called The West End of London Property Unit Trust ('WELPUT'). It will specialise in acquiring larger lot sizes than Benchmark would normally consider on its own. We will be the property advisers to WELPUT from which we should generate significant fee income over the years ahead. The initial portfolio is £300 million and the aim is to achieve a portfolio of at least £1 billion with Benchmark retaining a stake of no less than 20%. This transaction resulted in some £20 million of unrealised revaluation surpluses being converted into profits and after taking account of the Group's investment in WELPUT generated net cash of £173 million. Also, during the year we formed a 50/50 joint venture with JER Partners based in Washington DC, which manage US institutional funds, to acquire a £250 million portfolio of London properties from MEPC. This meant that we obtained a 50% interest in some prime office buildings, particularly in Covent Garden, where we were not represented. DEVELOPMENT All but 2 floors of our Bruton Street refurbishment comprising about 17,000 sq ft of offices on 7 floors have now been leased at average rents of around £75 per sq ft. Our refurbishment of 68,000 sq ft at Medius at 2 Sheraton Street in the heart of Soho has now been completed and the top floor of 7,400 sq ft of offices has been leased at £62.50 per sq ft with much interest being shown for the remainder of the space. The letting programme for the building was officially launched on 13 September 2001. We have now resolved our planning and other agreements with Westminster City Council to enable us to develop the new Waitrose store and offices on Motcomb Street in Belgravia. Development works will start in mid October 2001 and Waitrose hope to open for trading in time for Christmas in 2002. NEXUS In my statement last year I said that we were seeking a financial partner to help Nexus, our serviced offices subsidiary, to expand its business. During the year we concluded a sale of 85% of our interest in the business achieving a net profit of £6.5 million. RESULTS The diluted net asset value per share at 30 June 2001 was 373.9p compared with 338.4p a year earlier, an increase of 10.5%. Our investment properties were valued on the basis of open market value at 30 June 2001 by DTZ Debenham Tie Leung Limited, Chartered Surveyors. This revaluation showed a net increase of £47.9 million over the 30 June 2000 figures representing an uplift of 6.0% in the value of the investment properties held at the year end, excluding non-income producing developments. Pre-tax profits for the year increased to £21.5 million from £15.5 million in the previous year and post-tax profits for the year increased to £16.2 million from £13.5 million previously. Earnings per share were 13.4p compared with 11.2p in the previous year. Net rental income for the period increased from £ 20.3 million to £31.4 million. Taking into account sales and acquisitions since the year end, net rental income, on an annualised basis, at the date of this report is currently £38.7 million per annum. This excludes the WELPUT portfolio. Total net rental income on an annualised basis from all properties managed by the Group is currently £61.2 million per annum. FINANCIAL Our net borrowings at the year end were £267.8 million representing net gearing of 57% compared with 64% as at 30 June 2000. Shareholders' funds as at 30 June 2001 were £466.4 million, compared with £ 415.3 million as at 30 June 2000 and our property assets owned were just under £900 million compared with £695 million at 30 June 2000. ACQUISITIONS AND DISPOSALS We spent £169.7 million on acquisitions in Central London during the year. Total disposals of £76.8 million were completed and these realised a net profit of £3.9 million over book value or £23.2 million over historic cost. Since the year end, another £249.5 million of properties were sold under the WELPUT transaction mentioned earlier. At the date of this statement, we now manage a total portfolio of about 2 million sq ft of offices, retail, residential and leisure related space within or around the Circle Line in Central London. Some 80% of the portfolio, by value, is in the West End and 62% by value is freehold or on leases with unexpired terms of at least 100 years. DIVIDEND An interim dividend of 1.95p per share was paid on 10 April 2001 and the Board now recommends the payment of a final dividend of 2.6p per share to be paid on 16 November 2001 to shareholders on the register at 9 November 2001. This would make a total dividend payable for the year of 4.55p per share representing an increase of 9.6% over last year. As a consequence of the various transactions during the year and since the year end, Benchmark is now in a strong financial position. To maximise returns to Benchmark's shareholders in the future we have always said that we would keep our equity base as tight as possible. We have also made it clear that when assessing dividends payable we would have close regard to Benchmark's and the property sector's conditions and prospects. It is our view that, in the property sector, the majority of investors today place emphasis on real delivered return, as well as looking at the underlying performance of the assets. SPECIAL DIVIDEND Accordingly, we have decided to pay a special dividend, in addition to the proposed final dividend, of 60p per share amounting to £73 million which represents 64% of our distributable profits. This will leave us with a pro-forma gearing of 43%, substantial resources for new investment in addition to the potential for opportunities through WELPUT and our existing or new joint ventures. Approval of shareholders will be sought at the forthcoming AGM to alter the conversion rate of the Company's Convertible Unsecured Loan Stock from 32.51 to 38.66 ordinary shares per £100 nominal of stock to take into account the proposed special dividend. OUTLOOK Whilst the Central London property market is unlikely to show the same rates of growth it has demonstrated over the last 2 years, it is still a relatively stable market with supply of new space restricted. Having paid our shareholders a special dividend, we remain well placed, with sufficient resources available, to take advantage of new opportunities as they arise. I would like to thank my co-directors and our entire team for their hard work and valuable contributions over the 5 years and particularly during this last year. The property portfolio has good ongoing potential. Keeping our equity base as tight as possible will enable us to maximise total shareholder return. We are in excellent shape to continue to deliver shareholder value in our chosen area of specialisation against the backdrop of a Central London property market which has short-term uncertainties but, in our view, long-term strength and resilience. Tan Sri Quek Leng Chan Chairman 24 September 2001 Review of Operations PROPERTY REVIEW ACQUISITIONS During the year, some £169.7 million was spent on the acquisition of properties in Central London. The principal transactions were: - In October 2000, we purchased a portfolio of 6 properties from MEPC in a new 50/50 joint venture, Benchmark JER 1 Limited Partnership, formed with JER Partners, a US fund manager. Our share of the consideration amounted to £125 million. The portfolio totals 630,000 sq ft of offices and 58,000 sq ft of retail accommodation and comprises: - 90 Long Acre, WC2 - 125 Shaftesbury Avenue and 25 Cambridge Circus, WC2 - 11/12 St James's Square, SW1 - Landmark House, Hammersmith, W6 - 100 Fetter Lane and 12 Norwich Street, EC4 - Piercy House, 7/9 Copthall Avenue, EC2 - The acquisition of the freehold of 6/10 Bruton Street, W1, the long leasehold interest in Melrose House, 4/6 Savile Row, W1 and the long leasehold interest in Jackson House, 18/19 Savile Row, W1 for a total consideration of £35.6 million; - In June 2001, we spent £7.6 million as our contribution to the restructuring of our joint venture interest in 90 Long Acre, WC2. The interest held by Benchmark JER 1 Limited Partnership has now increased from 37.5% to 50%; DISPOSALS During the year, we continued to pursue our stated objective of disposing of non-core properties. Total disposals of £72.2 million were achieved, giving a net profit of £3.8 million over book value or £23.2 million over historic cost. The principal sales were: - 27/28 Soho Square, W1 - Liscartan House, 127/131 Sloane Street, SW1 - Granville House, 132/135 Sloane Street, SW1 - Remaining 3 apartments at Stirling Square, Carlton Gardens, SW1 - 8/12 William Street, SW1 In addition to the above disposals, the Group received £4.6 million in respect of the sale of Piercy House, a property owned by Benchmark JER 1 Limited Partnership. In December 2000 we sold 85% of our shares in Nexus Estates, our serviced offices subsidiary, to a management buy-out sponsored by the private equity arm of Henderson Global Investors. We achieved a pre-tax profit of £6.5 million on the sale. In addition, since the year end, we sold for a total consideration of £249.5 million, our entire partnership interests in Benchmark (Jersey) No. 1 LP to WEL Property Limited Partnership ('WEL Partnership'), a Jersey Limited Partnership in which The West End of London Property Unit Trust ('WELPUT'), a Jersey unit trust, has a 50.1% interest. The properties owned by Benchmark (Jersey) No. 1 LP were: - Stirling Square, Carlton Gardens, SW1 - 24/28 Sackville Street, W1 - Buchanan House, 3 St James's Square, SW1 - 4/5 Princes Gate, SW7 - 45 Fouberts Place, W1 - St Giles House, 49/50 Poland Street, W1 - Broadbent House, 64/65 Grosvenor Street, W1 - 100 Regent Street and 33 Glasshouse Street, W1 Benchmark has retained a 49.9% interest in WEL Partnership and has acquired a 46% interest in WELPUT. DEVELOPMENTS Medius, Sheraton Street, W1 The refurbishment was carried out to produce 67,000 sq ft of offices and 10,000 sq ft of retail space. We started on site in May 2000 and practical completion was achieved in July 2001. The 10,000 sq ft of retail space in Novello House has been pre-let to YHA Plc on a 15 year lease at an annual rent of £240,000. The top floor of 7,400 sq ft offices has now been let at a rent of £62.50 psf. Belgravia Estate, SW1 We have now resolved our planning and other agreements with Westminster City Council and we will commence development works in mid October 2001. The new Waitrose store is expected to be open for trading by Christmas 2002. Golden Square Estate, W1 A planning application to redevelop 41,500 sq ft of offices, 5,000 sq ft of leisure use, 12,000 sq ft of retail space and 7,200 sq ft of residential accommodation on the south side of Golden Square has been considered by Westminster City Council and the overall principle of the scheme has been approved subject to a final decision expected in December 2001 concerning the treatment of the facade design on Brewer Street. Kensington Estate, W8 These properties are owned by our 50.1% subsidiary, 121 KHS Ltd, with the remaining 49.9% owned by Deutsche Bank AG. The refurbishment of the shop units was completed in September 2000 with The Gap opening for trading in December 2000 and H&M Hennes in February 2001. An additional floor for a restaurant was added to the Roof Gardens night club and the tenant, Voyager Clubs, took a new 15 year lease. PORTFOLIO BALANCE The following analysis takes into account all properties owned as at the date of this report by the Company, its subsidiaries, its 50% share of the portfolio held in Benchmark JER 1 Limited Partnership and excludes WELPUT properties. - Lease profile 32% of our annual net rental income extends beyond 10 years. Lease profile % Less than 5 years 46.0 5-10 years 21.8 11-15 years 16.8 More than 15 years 15.4 - Location 80% by value of our properties are in the West End. Location % West End 80.3 City 19.7 - Use 72% of the annual net rental income is derived from offices and 23% from retail use. The 'others' category includes residential, leisure and car parking uses. Use % Office 72.0 Retail 22.6 Others 5.4 - Tenure Despite our concentration in the West End, where many properties are leasehold, we hold 62% by value of our properties as freeholds or on leases with at least 100 years unexpired. Tenure % Freehold 34.2 More than 100 years 28.0 75-100 years 23.2 50-74 years 11.0 25-49 years 2.1 Less than 25 years 1.5 - Tenant profile Tenants from UK corporates contribute 29% of our gross annual income, whilst 19% comes from the financial services sector with major retailers contributing another 18%. FINANCIAL REVIEW NET ASSETS PER SHARE The investment portfolio was revalued at 30 June 2001 by DTZ Debenham Tie Leung Limited, Chartered Surveyors. The revaluation showed a net increase of £24.0 million representing a 2.9% uplift on the investment properties held at the year end. This was in addition to the net increase in capital value of £ 23.9 million that arose at the interim revaluation at 31 December 2000. Correspondingly, the total uplift for the full year in the value of the investment properties was 6.0% (2000 - 17.0%). The net assets per share have increased from 343.1 pence as at 30 June 2000 to 383.3 pence at the year end, an increase of 11.7% (2000 - 26.8%) and on a diluted basis from 338.4 pence to 373.9 pence, an increase of 10.5% (2000 - 25.1%) OPERATING RESULTS Net rental income for the year increased to £31.4 million from £20.3 million previously. Profit before tax improved by 38.7% to £21.5 million (2000 - £ 15.5 million) and on an after tax and minority interest basis, profits increased by 20.0% to £16.2 million (2000 - £13.5 million). The biggest impact on the Group operating profit came from the 54.7% increase in net rental income. Earnings per share including profits on disposal of trading and investment properties improved to 13.4 pence (13.3 pence on a diluted basis) from 11.2 pence on a basic and diluted basis. OVERHEADS Total overheads for the year amounted to £4.3 million (2000 - £3.9 million). This represents 13.7% of net rental income, a significant improvement over last year's figure of 19.3%. TAXATION The taxation charge of £5.7 million (2000 - £2.2 million) represents 26.7% (2000 - 14.3%) of our pre-tax profits reflecting the benefit of capital allowances claimed. Last year's effective tax rate was reduced due to the utilisation of brought forward losses and a prior year over-provision of £0.7 million. POST BALANCE SHEET EVENTS In July 2001, the Group completed the sale of its partnership interests in Benchmark (Jersey) No. 1 LP to WEL Property Limited Partnership for £249.5 million. This transaction generates a pre-tax gain of £22.7 million which will be recognised in the statutory accounts for the year to 30 June 2002. Of this, £2.6 million will be recognised in the profit and loss account, whilst the balance will be a transfer from the revaluation reserve. The Group has received net cash proceeds of £173.2 million after allowing for expenses. FINANCE The Group finances its operations by a mixture of equity, convertible loan stock and bank borrowings. The Group's objective is to maintain sufficient resources to meet its financing requirements at the lowest achievable cost and minimal risk, whilst maintaining sufficient flexibility to fund property acquisitions and capital expenditure. No speculative treasury transactions are undertaken. The main risk arising from the Group's financial liabilities is interest rate risk. The Group borrows at both fixed and floating rates of interest and additionally uses interest rate derivatives to manage the Group's exposure to interest rate movements. At the year end 52.3% of borrowings were at fixed interest rates and the weighted average rate of interest was 7.3%. Total net borrowings amounted to £267.8 million (2000 - £267.0 million) representing a gearing of 57.4% (2000 - 64.3%). However if our share of the joint venture non-recourse debt is included, the gearing would be 78.3%. DEBT STRUCTURE The WELPUT transaction, which completed just after the year end, has radically transformed the balance sheet of the Group. Pro-forma net borrowings were reduced to £94.6 million representing a gearing of 20.4%. However, of this £ 94.6 million, £80.2 million comprises non-recourse loans held by our 50.1% subsidiary, 121 KHS Limited. This restructuring of our balance sheet has put the Group on a solid footing to take advantage of any opportunities that may arise. Following the proposed payment of the special dividend the pro-forma gearing will increase to 42.9%. The analysis below shows the breakdown of the type of borrowings and also the maturity profile on a pro-forma basis after the completion of the WELPUT transaction and the proposed special dividend and includes our share of the joint venture's debts. Debt Maturity Profile £m 2005 138.7 2007 80.2 2013 49.3 Type of Borrowings % Share of JV's debt, secured, non-recourse 37.5 Unsecured, recourse 32.6 Secured, non-recourse 29.9 FIVE YEAR REVIEW Since its recapitalisation in October 1996, Benchmark has undergone rapid transformation to become a key Central London property specialist and as at the year end it has now £1.1 billion of properties under management compared to £20 million in June 1996. Its track record in terms of acquisitions, disposals and capital expenditure is shown in the table below: £ million Post Year End - 1996/97 1997/98 1998/99 1999/00 2000/01 WELPUT Total Acquisitions 176.9 222.0 35.3 186.5 169.7 790.4 Disposals - 49.0 85.9 167.0* 76.8 249.5 628.2 Capital Expenditure 2.4 31.4 63.8 44.4 38.7 180.7 * Excluding sale of 49.9% of Kensington Estate As Benchmark is primarily a property investment company, one key performance indicator is growth in the diluted net asset value (NAV) per share. Diluted NAV per share Year to 30 June Pence 1996 168.1 1997 189.3 1998 243.4 1999 270.5 2000 338.4 2001 373.9 During this period, the annual compound growth in diluted NAV per share has been 17.3% per annum and by including the cumulative dividends per share that have been paid or are proposed, the total return has been 18.5% per annum. Consolidated Profit and Loss Account Year ended 30 June 2001 2001 2000 Note £'000 £'000 GROSS RENTAL INCOME Group and share of joint venture 44,182 25,129 Less: share of joint venture (7,252) - 36,930 25,129 Ground rents (2,024) (1,398) Irrecoverable property costs (2,723) (3,009) Amortisation of leasehold properties (823) (464) NET RENTAL INCOME 31,360 20,258 Net operating profit/(loss) from serviced offices 593 (1,064) Profit on disposal of trading properties 1 745 3,193 Administration expenses (4,297) (3,903) GROUP OPERATING PROFIT 28,401 18,484 Share of operating profit in joint venture 6,035 - TOTAL OPERATING PROFIT 34,436 18,484 Profit on disposal of investment properties 1 3,101 8,790 Profit on disposal of shares in serviced offices 6,500 - subsidiary PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST 44,037 27,274 Net interest payable and similar charges 2 (22,515) (11,790) PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 21,522 15,484 Taxation 3 (5,737) (2,220) PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 15,785 13,264 Minority interests 450 236 PROFIT FOR THE FINANCIAL YEAR 16,235 13,500 Dividends 4 (5,538) (5,014) RETAINED PROFIT FOR THE YEAR 10,697 8,486 EARNINGS PER SHARE EXCLUDING NET PROFITS ON DISPOSALS 5 7.4p 3.5p EARNINGS PER SHARE - BASIC 5 13.4p 11.2p - DILUTED 5 13.3p 11.2p Consolidated Balance Sheet As at 30 June 2001 Unaudited pro forma post WELPUT transaction and special dividend 2001 2000 Note (note 10) £'000 £'000 £'000 FIXED ASSETS Investment and 508,920 747,905 690,802 development properties Joint venture 6 Share of gross assets 146,837 146,837 - Share of gross (106,191) (106,191) - liabilities 40,646 40,646 - Associates 72,783 - - Investments 3,213 3,213 1,953 Other tangible assets 272 272 2,979 625,834 792,036 695,734 CURRENT ASSETS Trading properties - - 4,892 Debtors 10,407 7,907 26,510 Investments 916 916 750 Cash at bank and in hand - 7,818 1,317 11,323 16,641 33,469 CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR (58,105) (46,039) (55,573) NET CURRENT LIABILITIES (46,782) (29,398) (22,104) TOTAL ASSETS LESS CURRENT LIABILITIES 579,052 762,638 673,630 CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR (118,253) (226,250) (192,095) CONVERTIBLE UNSECURED LOAN STOCK (49,318) (49,318) (49,265) PROVISIONS FOR LIABILITIES AND CHARGES (3,234) (3,234) (3,234) NET ASSETS 408,247 483,836 429,036 CAPITAL AND RESERVES Called up share capital 7 60,850 60,850 60,518 Share premium account 8 151,392 151,392 150,234 Revaluation reserve 8 156,334 169,535 145,040 Other reserves 8 51 51 51 Profit and loss account 8 22,222 84,610 59,452 EQUITY SHAREHOLDERS' 390,849 466,438 415,295 FUNDS MINORITY INTERESTS 17,398 17,398 13,741 TOTAL CAPITAL EMPLOYED 408,247 483,836 429,036 NET ASSETS PER SHARE - BASIC 5 321.2p 383.3p 343.1p - DILUTED 5 319.1p 373.9p 338.4p Consolidated Statement of Total Recognised Gains and Losses Year ended 30 June 2001 2001 2000 £'000 £'000 Profit for the financial year 16,235 13,500 Share of surplus arising on revaluation of investment 43,828 82,290 properties Revaluation surplus arising from part disposal of investment - 1,870 property Tax on realisation of revaluation surpluses on investment (4,872) (4,212) property disposals Total recognised gains and losses for the year 55,191 93,448 The total recognised gains for the year include £9,607,000 from the joint venture, Benchmark JER 1 Limited Partnership. Note of Historical Cost Profits and Losses Year ended 30 June 2001 2001 2000 £'000 £'000 Profit on ordinary activities before taxation 21,522 15,484 Realisation of property revaluation surpluses in prior periods 19,333 22,813 Historical cost profit on ordinary activities before taxation 40,855 38,297 Historical cost profit retained after tax and dividends 24,708 26,851 Reconciliation of Movements in Shareholders' Funds Year ended 30 June 2001 2001 2000 £'000 £'000 Total recognised gains and losses for the year 55,191 93,448 Dividends (5,538) (5,014) Issue of shares 1,490 735 Net addition to shareholders' funds 51,143 89,169 Opening shareholders' funds 415,295 326,126 Closing shareholders' funds 466,438 415,295 Consolidated Cash Flow Statement Year ended 30 June 2001 2001 2000 Note £'000 £'000 OPERATING ACTIVITIES Net cash inflow before sales of and additions to 45,922 13,820 trading properties Net cash inflow from sales of and additions to trading 5,637 7,622 properties NET CASH INFLOW FROM OPERATING ACTIVITIES 9(a) 51,559 21,442 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received 547 368 Interest paid (20,801) (14,085) NET CASH OUTFLOW FOR RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (20,254) (13,717) TAXATION Corporation tax paid (4,018) (1,097) CAPITAL EXPENDITURE Acquisition of investment properties (69,380) (222,314) Disposals and other capital receipts 77,121 129,176 Purchase of other fixed assets (1,036) (1,860) Repayment of loan notes by investment - 1,095 NET CASH INFLOW/(OUTFLOW) FOR CAPITAL EXPENDITURE 6,705 (93,903) ACQUISITIONS AND DISPOSALS Investment in joint venture (31,039) - NET CASH OUTFLOW FOR ACQUISITIONS AND DISPOSALS (31,039) - EQUITY DIVIDENDS PAID (5,158) (4,641) CASH OUTFLOW BEFORE FINANCING (2,205) (91,916) FINANCING Issue of shares 1,490 735 Increase in debt 9(b) 7,216 92,216 NET CASH INFLOW FROM FINANCING 8,706 92,951 INCREASE IN CASH IN THE YEAR 9(b) 6,501 1,035 Notes to the Accounts 1 PROFIT ON DISPOSAL OF TRADING AND INVESTMENT PROPERTIES The profit on disposal of trading and investment properties for the year ended 30 June 2001 comprises: Trading Investment properties properties Total £'000 £'000 £'000 Aggregate consideration 5,750 66,410 72,160 Less: sales costs (113) (1,071) (1,184) Net proceeds 5,637 65,339 70,976 Less: historical cost of properties (4,892) (42,905) (47,797) Historical cost profit 745 22,434 23,179 Less: revaluation surpluses in prior periods - (19,333) (19,333) 745 3,101 3,846 2 NET INTEREST PAYABLE AND SIMILAR CHARGES 2001 2000 £'000 £'000 Amounts payable on bank loans and overdrafts 17,498 12,881 5.75% Convertible Unsecured Loan Stock 2013 2,923 2,940 Less: interest capitalised (2,378) (3,648) 18,043 12,173 Interest receivable (536) (383) 17,507 11,790 Share of joint venture's net interest 5,008 - 22,515 11,790 Interest receivable includes £119,000 (2000 - £119,000) arising from loan notes issued by Agnew's Property Investments Limited in which the Company has a 25% interest. 3 TAXATION 2001 2000 £'000 £'000 Taxation based on profit for the year: Corporation tax at 30% (2000 - 30%) 2,614 539 Deferred tax - 680 Current year tax 2,614 1,219 Prior year over-provision - (703) Tax on operating activities 2,614 516 Tax arising on capital items 2,815 1,704 Group tax charge 5,429 2,220 Share of tax from joint venture 308 - 5,737 2,220 The tax charge has benefited from the utilisation of brought forward losses and capital allowances claimed. Tax losses of £7.7 million were utilised in the year ended 30 June 2000 and no losses were brought forward at 1 July 2000. Relief has been taken during the year for interest capitalised of £2.4 million (2000 - £2.9 million). 4 DIVIDENDS 2001 2000 £'000 £'000 Interim dividend paid of 1.95p (2000 - 1.85p) per share 2,374 2,230 Final dividend proposed of 2.6p (2000 - 2.3p) per share 3,164 2,784 Total dividends payable for the year of 4.55p (2000 - 4.15p) per share 5,538 5,014 5 EARNINGS/NET ASSETS PER SHARE The weighted average number of shares in issue during the period was 121,261,040 (2000 - 120,616,866) and the earnings attributable to ordinary shares was £16,235,000 (2000 - £13,500,000). The earnings on ordinary activities, excluding net profits on disposal of trading and investment properties and the disposal of shares in subsidiary undertakings, comprise net rental income less administration expenses less net interest payable and attributable taxation and amounted to £8,927,000 (2000 - £4,179,000). Diluted earnings per share have been calculated for all periods adopting the method set out in Financial Reporting Standard 14 - Earnings per Share. Diluted earnings per share reflect the potential exercise of conversion rights relating to the 5.75% Convertible Unsecured Loan Stock 2013 ('CULS') and of share options. In calculating diluted earnings per share, earnings have been adjusted to £18,280,000 (2000 - £13,500,000) and the weighted average number of shares increased to 137,858,216 (2000 - 120,638,427). The number of shares in issue at 30 June 2001 was 121,700,846 (2000 - 121,036,371) and the net assets attributable to shareholders at 30 June 2001 was £466,438,000 (2000 - £415,295,000). Diluted net assets per share, reflecting the potential exercise of conversion rights relating to the CULS, were 373.9p as at 30 June 2001 (2000 - 338.4p), based on net assets of £515,756,000 (2000 - £464,560,000) and shares in issue of 137,955,033 (2000 - 137,291,371). 6 JOINT VENTURE £'000 Share of net assets acquired 31,039 Surplus on revaluation of investment properties 8,888 Share of profit for the year 719 Share of net assets as at 30 June 2001 40,646 During the year the Group established a 50% interest in Benchmark JER 1 Limited Partnership, which operates in the United Kingdom. The consideration for the 50% interest was satisfied in cash. The Group's share of that entity's results, assets and liabilities is as follows: Profit and loss account £'000 Period from 18 October 2000 to 30 June 2001 Operating profit 6,035 Net interest payable (5,008) Profit on ordinary activities before taxation 1,027 Taxation (308) Retained profit for the period 719 Balance Sheet £'000 As at 30 June 2001 Investment properties at valuation 127,770 Trading properties 14,238 Cash 3,408 Other current assets 1,421 Current liabilities (5,598) Borrowings (100,593) 40,646 The joint venture investment properties were valued at 30 June 2001 on the basis of open market value by DTZ Debenham Tie Leung Limited, Chartered Surveyors. The Group's share of the historical cost of investment properties was £118.9 million. The borrowings are non-recourse to the Group. 7 SHARE CAPITAL Number Class £'000 Authorised: As at 1 July 2000 and 30 June 177,000,000 ordinary shares of 50p 88,500 2001 each Allotted, called up and fully paid: As at 1 July 2000 121,036,371 ordinary shares of 50p 60,518 each Issued during year 664,475 ordinary shares of 50p 332 each As at 30 June 2001 121,700,846 ordinary shares of 50p 60,850 each 8 RESERVES Share Profit and premium loss account Revaluation Other account reserve reserves £'000 Total £'000 £'000 £'000 £'000 As at 1 July 2000 150,234 145,040 51 59,452 354,777 Premium on shares issued 1,158 - - - 1,158 Share of surplus arising on revaluation of investment - 43,828 - - 43,828 properties Revaluation surpluses realised on investment - (19,333) - 19,333 - property disposals Tax on realisation of revaluation surpluses on - - - (4,872) (4,872) investment property disposals Retained profit for the year - - - 10,697 10,697 As at 30 June 2001 151,392 169,535 51 84,610 405,588 The revaluation reserve solely relates to investment properties. 9 NOTES TO THE CONSOLIDATED CASHFLOW STATEMENT (a) Reconciliation of operating profit to operating cash flows 2001 2000 £'000 £'000 Operating profit 28,401 18,484 Depreciation 497 445 Profit on sale of trading properties (745) (3,193) Amortisation of leasehold properties 823 464 Decrease/(increase) in debtors 16,077 (8,013) Increase in investments (166) - Increase in creditors 1,035 5,633 Net cash inflow before sales of and additions to trading 45,922 13,820 properties Net cash inflow from sales of and additions to trading 5,637 7,622 properties Net cash inflow from operating activities 51,559 21,442 (b) Reconciliation of net cash flow to movement in net debt 2001 2000 £'000 £'000 Increase in cash in the year 6,501 1,035 Cash inflow from increase in debt (7,216) (92,216) Movement in net debt (715) (91,181) Net debt at start of year (267,035) (175,854) Net debt at end of year (267,750) (267,035) (c) Analysis of net debt 2001 Cashflow 2000 £'000 £'000 £'000 Cash at bank and in hand 7,818 6,501 1,317 Debt due within one year - 26,992 (26,992) Debt due after more than one year (275,568) (34,208) (241,360) Net debt (267,750) (715) (267,035) 10 PRO FORMA In August 2001 Benchmark sold for a total consideration of £249.5 million its entire partnership interests in Benchmark (Jersey) No. 1 LP to WEL Property Limited Partnership ('WEL Partnership'), a Jersey Limited Partnership in which The West End of London Property Unit Trust ('WELPUT'), a Jersey unit trust, has a 50.1% interest. Benchmark has retained a 49.9% interest in WEL Partnership and has a 46% interest in WELPUT. The impact of the disposal is illustrated in the following unaudited pro forma statement of net assets. Unaudited pro forma post WELPUT WELPUT Special transaction and 2001 transaction dividend special dividend Note £'000 £'000 £'000 £'000 FIXED ASSETS Investment and a 747,905 (238,985) - 508,920 development properties Joint venture - Share of gross 146,837 - - 146,837 assets Share of gross (106,191) - - (106,191) liabilities 40,646 - - 40,646 Associates b - 72,783 - 72,783 Investments 3,213 - - 3,213 Other tangible 272 - - 272 assets 792,036 (166,202) - 625,834 CURRENT ASSETS Debtors c 7,907 2,500 - 10,407 Investments 916 - - 916 Cash at bank and in d 7,818 27,129 (34,947) - hand 16,641 29,629 (34,947) 11,323 CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR e (46,039) (12,066) - (58,105) NET CURRENT LIABILITIES (29,398) 17,563 (34,947) (46,782) TOTAL ASSETS LESS CURRENT LIABILITIES 762,638 (148,639) (34,947) 579,052 CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR d (226,250) 146,071 (38,074) (118,253) CONVERTIBLE UNSECURED LOAN STOCK (49,318) - - (49,318) PROVISIONS FOR LIABILITIES AND CHARGES (3,234) - - (3,234) NET ASSETS 483,836 (2,568) (73,021) 408,247 MINORITY INTERESTS (17,398) - - (17,398) SHAREHOLDERS' FUNDS 466,438 (2,568) (73,021) 390,849 NET ASSETS PER SHARE 383.3p (2.1p) (60.0p) 321.2p - BASIC - DILUTED 373.9p (1.9p) (52.9p) 319.1p a The value of the properties disposed of is the book value as at 30 June 2001. b Benchmark's investment in associates comprises its 49.9% interest in WEL Partnership and its 46% investment in WELPUT. c The increase in debtors represents a loan to the WEL Partnership of £2.5 million. d Of net cash proceeds of £173.2 million received from WEL Partnership, £146.1 million was used to pay down certain unsecured borrowings. Net borrowings will increase by £73 million with the payment of the special dividend. e The increase in creditors due in less than one year is the estimated taxation as a result of the transaction. 11. BASIS OF PREPARATION The above financial information does not constitute the Company's full statutory accounts for the years ended 30 June 2000 or 2001 but is derived from those accounts. Statutory accounts for the year ended 30 June 2000 have been delivered to the Registrar of Companies, whereas those for 2001 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985. The Annual Report and Accounts will be posted to shareholders on or before 9 October 2001 and will be available from the Company's Registered Office at: 25 Sackville Street, London W1S 3EL.

Companies

Benchmark Holdings (BMK)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today