Interim Results - Pre-tax Profit Up 19%

BPT PLC 18 November 1999 BPT REPORTS A BUOYANT FIRST HALF -------------------------------- BPT plc (formerly The Bradford Property Trust PLC), the largest quoted owner of tenanted residential properties in the private rented sector in the UK, reports its interim figures for the half year ended 5 October 1999 Financial Highlights - Operating profit increased 17% to £24.6m (1998: £21.1m) - Profit before tax increased 19% to £18.7m (1998:15.7m) - Earnings per ordinary share increased 22% to 8.95p (1998: 7.36p) - Dividend per ordinary share increased 7% to 4.7p (1998: 4.4p) Corporate Highlights - Internal review indicates vacant possession values of the residential portfolio increased by 7% in the six month period - First entry in the public eurobond market through the issue of £75m 6.90% Bonds in July 1999 - Residential properties acquired at a cost of £56m, including: - BPT Bridgewater life tenancy portfolio gathers momentum with £4.2m invested in the period - Acquisitions of residential investment properties by BPT (Assured Homes) totalled £15.8m, including 198 new homes acquired from housebuilders - 324 houses and 108 apartments acquired from Pemberstone plc for a total consideration of £20.4m - UBI Investments Limited acquired for £1.2m comprising 80 houses and apartments in Oulton, Leeds Commenting on the prospects for the group, Chairman, Philip Warner said: 'Immediate prospects for the UK housing market appear favourable notwithstanding two recent small increases in interest rates. The group is well positioned to take advantage of current market conditions.' For further information: BPT plc Citigate Dewe Rogerson Tim Watts - Managing Director Keeley Middleton Tel: 0171 638 9571 (today) Tel: 0171 638 9571 (today) Tel: 01372 743113 (thereafter) Tel: 0113 279 9899 (thereafter) Nigel Denby - Finance Director Tel: 0171 638 9571 (today) Tel: 01274 723181 (thereafter) CHAIRMAN'S STATEMENT I am pleased to report an increase of 17% in operating profits to £24.6m for the six months ended 5 October 1999 (1998 £21.1m). This was principally due to increased property sales in a buoyant housing market. Profit before tax increased by 19% to £18.7m (1998 £15.7m) and earnings per ordinary share were 8.95p in comparison to 7.36p last year, an increase of 22%. Your directors have decided to declare an interim dividend of 4.7p per ordinary share, an increase of 7% over the 4.4p paid last year. It will be paid on 5 January 2000 to shareholders on the register at the close of business on 3 December 1999. Our successful strategy to grow both the activity and size of our portfolio within the private rented residential sector, supported by prudent financing, has continued. During this period the group completed the acquisition of residential properties at a cost of £56.0m. The debt term profile has been improved through the Company making its first entry into the public eurobond market by issuing £75m 6.90% Bonds 2014 in July 1999. Over the six month period, the notional effect of marking fixed rate debt to market under FRS13 has improved from a potential additional gross 'liability' of £7.4m to an 'asset' of £2.3m. David Baker retired as Joint Managing Director in August 1999 and, following the appointment last April of Gary Butterworth as Property Director, South, I am pleased to announce that, with effect from 1 January 2000, James Story will join the Board as Property Director, North. The Board is conscious of recent trends in corporate governance, particularly relating to the independence of non executive directors under the provisions of the Combined Code. Therefore I was pleased to announce in August 1999 the appointment of Christopher Kemball, a senior managing director in corporate finance with ING Barings, as an additional independent non-executive director. Shareholders will see continuing evolution in this respect. Immediate prospects for the UK housing market appear favourable notwithstanding two recent small increases in interest rates. The group is well positioned to take advantage of current market conditions. Philip Warner Chairman OPERATING AND FINANCIAL REVIEW MARKET CONDITIONS During the period reported the UK housing market has generally maintained the momentum of house price increases seen at the start of 1999. Whilst the south east of England continues to lead this more buoyant activity in the market, it is primarily being driven by a supply shortage in certain areas. Wide geographical variations are still being experienced in house price increases around the UK. An interim internal review, but not a full valuation, has been undertaken of movements in residential vacant possession values in the six month period. It indicates that in the south of England, values of properties in our portfolio increased by an average of 8%. However, whilst rental market demand remains strong in the north of England, there has been no real increase in values there. For the portfolio as a whole, vacant possession values have increased by an average of 7% in the six month period. RENTAL INCOME Gross and net rental income increased by 9% and 11% respectively through continuing growth in rents and the effect of the continuing expansion of the residential portfolio. Regulated rents reviewed in the period increased by an equivalent annual average of 6% and market rents by 6%. The effect of the Government's imposition of limits on increases in regulated rents introduced in February 1999 (currently subject to judicial review in the Court of Appeal) has resulted in the annual average increase of 9% reported for last year reducing to 6%. Whilst BPT has limited exposure to market rents in central London, increases in rents have still been achieved in the period on lettings. At 5 October 1999, the total annualised rent roll of the group was £39.8m, an increase of £2.8m since 5 April 1999. New build properties acquired from housebuilders remain popular with prospective tenants and good demand continues to be experienced. Due to the increasing proportion of market rented residential properties in the portfolio and the effect of acquiring new vacant properties from housebuilders, the number of vacants handled by the area management teams continues to rise. For the first time in any six month period over 1,000 vacant residential properties were processed of which 56% were retained for letting and 44% were placed on the market for sale. The majority placed for sale were previously subject to regulated tenancies. SALES ACTIVITY The number of vacant residential units sold in the period increased by 36% and the average residential unit sales value increased by 11%. Consequently trading sales revenues increased by £8.5m or 43% to £28.2m in comparison to £19.7m last year. Trading profits at £11.8m increased by £2.4m or 26% in comparison to £9.4m reported last year. In the period a further 19 houses at Upper Rissington were sold. Of the original 212 vacant houses acquired in October 1996 and progressively refurbished, 185 houses have so far been sold for gross proceeds of £15.8m. Completion of the sale of a further 8 houses is imminent, whilst 19 houses have been retained for the rental market. A further 15 and 30 houses were sold at Thurlby St Hughes (ex RAF Swinderby) and from the Cambridgeshire portfolio respectively, with the majority of houses on these estates currently being retained for the rental market. CORPORATE ACTIVITIES On 30 April 1999 the Company acquired Residential Leases Ltd and Residential Tenancies Ltd from Pemberstone PLC for a cash consideration of £18.8m including funding the repayment of £16.1m of inter-company loans from the vendors. In addition a residential portfolio was acquired direct from the same vendors for £1.6m, making a total investment of £20.4m. The total portfolio comprised 324 houses and 108 apartments and had an agreed open market value of £20.5m. On acquisition, the portfolio generated gross rental income of £1.6m. On 27 August 1999 the Company acquired UBI Investments Ltd for £1.2m. The consideration comprised the issue of 400,799 BPT ordinary shares at a price of 249.5p and a cash payment of £0.2m. The portfolio, comprising 80 houses and apartments in Oulton, Leeds, had an agreed open market value of £2.3m, and generated a gross rental income of £0.2m. Net borrowings of £1.1m were taken over with this acquisition. At 5 October 1999 the Company held 21.58% of the issued share capital of Mountview Estates PLC. ACQUISITION ACTIVITY In addition to the corporate activities referred to above, the group acquired, contracted to acquire and refurbished residential properties at a total cost of £38.1m. Completed purchases of property stock in the period totalled £16.8m. The expansion of the BPT Bridgewater life tenancy reversion portfolio is now gathering momentum and £4.2m was invested in the period acquiring interests in residential properties. In addition £2.2m was invested in the major refurbishment of certain residential properties. Completed acquisitions of residential investment properties by BPT (Assured Homes) totalled £15.8m. These included the portfolio of 41 houses and apartments for £1.6m from Pemberstone PLC, referred to earlier, and a portfolio of 36 houses, previously in a BES portfolio, from Persimmon Homes. In the period 198 new houses and apartments were acquired from housebuilders including 20 apartments from Beazer Homes at Livingstone in Scotland, 20 apartments from St David at Adventurers Quay in Cardiff and 18 apartments from Linden Homes in Southampton. The balance of the development of 82 new houses by Crest Homes in Derby was completed and, of the 119 apartments being built by them in Hitchin, 61 were handed over in the half year. 12 out of 36 apartments being built by Redrow Homes in Timperley, near Sale and 12 out of 45 houses and apartments being built by Beazer Homes in Pitreavie, near Dunfermline were also handed over. The development of a further 46 new houses and apartments by Jackson Building at Martlesham Heath, near Ipswich is nearing completion and 43 out of the 46 units were handed over in the period. Currently, contracts have been exchanged with Crest Homes for the conversion of a block in Ilkley, West Yorkshire into 18 apartments, with Woodberry for the construction of 12 houses in Ipswich, and with Crest Homes for the construction of 16 houses in Swindon and 24 apartments on two sites in Beckenham. FINANCING Net borrowings (before issue costs) increased during the period from £152.8m at 5 April 1999 to £183.2m. This represents gearing of 44% on estimated net assets of £416.5m (including the surplus on the open market valuation of property stock at the last year end) or 88% based on reported shareholders funds of £208.5m. In July 1999, the Company completed the issue of £75m 6.90% Bonds 2014, listed on the London Stock Exchange. £15m of the private placement £40m 7.143% unsecured sterling bonds 2014, originally issued in March 1998, were exchanged into this new £75m listed debt issue. As a consequence the overall average term profile of the group's borrowings has been extended from 6 years to 9.5 years. At 5 October 1999, after allowing for interest rate swap contracts, 91% and 9% of net borrowings were paying fixed and variable rates of interest respectively. At this date, the average interest rate cost on gross borrowings was 7.4% per annum in comparison to 7.3% six months earlier. As at 5 October 1999, the notional FRS 13 fair value adjustment in respect of financial liabilities has been calculated as an 'asset' of £2.3m before tax or £1.6m after tax in comparison to a 'liability' of £(7.4)m and £(5.1)m respectively six months earlier. Tim Watts Managing Director Nigel Denby Finance Director BPT plc Consolidated Profit and Loss Account (unaudited) For the half year ended 5 October 1999 Year to 5 April 1999 1998 1999 Notes £'000 £'000 £'000 Turnover including share of joint ventures 47,619 37,559 111,694 Less: Share of joint ventures (51) (50) (97) Turnover 1 47,568 37,509 111,597 Cost of sales and other property outgoings (21,659)(15,405) (46,717) ------ ------ ------- 25,909 22,104 64,880 Administrative expenses (1,307) (1,053) (2,756) ------ ------ ------- Operating profit 1 24,602 21,051 62,124 Share of operating profit of joint ventures 41 20 75 ------ ------ ------- Operating profit including joint ventures 24,643 21,071 62,199 Profit on sale of investment properties 361 164 459 Investment income 569 348 666 ------ ------ ------- Profit on ordinary activities before interest 25,573 21,583 63,324 Interest payable and similar charges (6,897) (5,931) (12,503) ------ ------ ------- Profit on ordinary activities before taxation 18,676 15,652 50,821 Tax on profit on ordinary activities (5,514) (4,801) (15,956) ------ ------ ------- Profit on ordinary activities after taxation 13,162 10,851 34,865 Dividends on equity and non-equity shares 2 (6,969) (6,513) (14,492) Retained profit for the period 6,193 4,338 20,373 ------ ----- ------- Earnings per ordinary share 3 8.95p 7.36p 23.74p Fully diluted earnings per share 3 8.93p 7.35p 23.69p All items dealt with in arriving at operating profit for 1999 and 1998 relate to continuing operations. Turnover and operating profits from corporate acquisitions in the period amounted to £614,000 and £486,000 respectively. BPT plc Other Primary Statements (unaudited) Statement of Total Recognised Gains and Losses for the half year ended 5 October 1999 Year to 5 April 1999 1998 1999 Notes £'000 £'000 £'000 Profit for the period after taxation 13,162 10,851 34,865 Unrealised surplus on revaluation of investment properties 4 - - 2,502 Share of joint venture's unrealised surplus on revaluation of investment properties 4 - - 224 Taxation on realisation of property revaluation gains of previous years (158) (105) (238) Total recognised gains for the period 13,004 10,746 37,353 ------ ------ ------ Note of Historical Cost Profits and Losses 1999 1998 1999 for the half year ended 5 October 1999 £'000 £'000 £'000 Reported profit on ordinary activities before taxation 18,676 15,652 50,821 Realisation of investment property revaluation gains of previous years 704 554 1,341 Share of realisation of joint venture's investment property revaluation gains of previous years 33 23 30 ------ ------ ------ Historical cost profit on ordinary activities before taxation 19,413 16,229 52,192 Historical cost profit for the year retained after taxation and dividends 6,772 4,810 21,506 Reconciliation of Movements in Shareholders' Funds 1999 1998 1999 for the half year ended 5 October 1999 £'000 £'000 £'000 Profit for the period after taxation 13,162 10,851 34,865 Dividends paid or proposed 2 (6,969 (6,513) (14,492) Issue of ordinary shares 7 1,000 - - Share options exercised 7 - 38 150 Other recognised gains and losses (net) (158) (105) 2,488 Net increases in shareholders' funds 7,035 4,271 23,011 Opening shareholders' funds 201,434 178,423 178,423 Closing shareholders' funds 208,469 182,694 201,434 BPT plc Consolidated Balance Sheet (unaudited) At 5 October 1999 5 October 5 April 1999 1999 Notes £'000 £'000 Fixed assets Intangible asset 440 - Tangible assets 4 142,240 107,840 Other investments: 17,381 17,111 ------- ------- 160,061 124,951 Current assets Property stock 265,679 258,396 Debtors 3,182 4,288 Cash and deposits 15,595 6,958 ------- ------- 284,456 269,642 Creditors Amounts falling due within one year: Bank borrowings and loan notes 5 (2,188) (23,139) Trade and other (37,057) (33,578) ------- ------- Net current assets 245,211 212,925 Total assets less current liabilities 405,272 337,876 Creditors Amounts falling due after more than one year: Bank borrowings 5 (20,000) (20,000) Senior unsecured notes and sterling bonds 5 (174,559) (116,192) Taxation (2,244) - Provisions for liabilities and charges - (250) Net assets 208,469 201,434 Shareholders' funds 208,469 201,434 BPT plc Consolidated Cash Flow Statement (unaudited) For the half year ended 5 October 1999 Year to 5 April 1999 1998 1999 Notes £'000 £'000 £'000 Net cash inflow before property stock acquisitions 39,749 27,834 91,849 Acquisition of property stock (18,793)(23,943) (46,551) Net cash inflow from operating activities 8 20,956 3,891 45,298 Returns on investments and servicing of finance (6,703) (5,660) (11,765) Taxation paid (1,904 (1,288) (10,380) Capital expenditure and financial investment (13,407)(16,251) (29,986) Acquisitions (20,421) - - (21,479)(19,308) (6,833) Ordinary dividends paid (equity) (7,897) (7,312) (13,744) Cash outflow before liquid resources and financing (29,376) 26,620) (20,577) Management of liquid resources Investment in bank deposits (1,400) - (6,900) Financing Issue of ordinary share capital - 38 150 Debt due within one year: Increase/(decrease) in short term bank borrowings (20,000) 19,500 11,500 Decrease in bank term loans (500) - (6,000) Redemption of 6% guaranteed loan notes 1999 (126) (110) (220) Debt due beyond one year: Increase in bank term loans - 9,500 20,000 Repayment of 7.143% unsecured sterling bonds 2014 (15,000) - - Issue of £75m 6.90% Bonds 2014 73,963 - - Net cash inflow from financing 38,337 28,928 25,430 Increase/(decrease) in cash in the period 9 7,561 2,308 (2,047) BPT plc Notes to the Interim Statement Year to 5 April 1999 1998 1999 £'000 £'000 £'000 1. Turnover Rental income 19,407 17,852 37,030 Property trading sales 28,161 19,657 46,542 47,568 37,509 83,572 Exceptional property sales - - 28,025 47,568 37,509 111,597 Operating Profit Net rental income 14,155 12,752 26,927 Property trading profit 11,754 9,352 21,124 25,909 22,104 48,051 Profit on exceptional property sales - - 16,829 25,909 22,104 64,880 Administrative expenses (1,307) (1,053) (2,756) 24,602 21,051 62,124 2. Dividends Dividends on equity shares: Ordinary: Interim payable of 4.7p per share (1998: 4.4p) 6,888 6,432 6,432 Final paid - - 7,898 Dividend on non-equity shares: Preference 10.5% paid 81 81 162 6,969 6,513 14,492 An interim dividend of 4.7p per ordinary share will be payable on 5 January 2000 to shareholders on the register at the close of business on 3 December 1999. 3. Earnings per Ordinary Share The calculation of earnings per ordinary share is based on the profit for the period attributable to ordinary shareholders of £13,081,000 (1998: £10,770,000) and the weighted average number of ordinary shares in issue during the period of 146,231,650 (1998: 146,203,716). The fully diluted earnings per ordinary share is based upon the weighted average number of ordinary shares during the period of 146,497,708 (1998: 146,468,047). 4. A revaluation of properties has not been undertaken as at 5 October 1999. The valuation of investment property and property held as current assets at open market value is only undertaken as at the 5 April year end. 5. Maturity of Finance Debt 5 October 5 April 1999 1999 £'000 £'000 In one year or less 2,188 23,139 Between one and two years 8,525 6,343 Between two and five years 45,572 45,571 Between five and ten years 35,972 38,151 Over ten years 104,490 46,127 196,747 159,331 Finance debt is stated net of attributable issue costs of £1,033,000 (5 April 1999: £436,000) and £1,037,000 (5 April 1999: Nil) in respect of the discount on issue of the listed £75m 6.90% Bonds 2014. 6. Financial Instruments and Liabilities The summary interest rate profile of the group's financial liabilities at 5 October 1999, after taking account of interest rate swap contracts taken out by the group was: 5 October 5 April 1999 1999 £'000 £'000 Fixed rate liabilities 165,416 107,675 Weighted average rate of 7.67% (8.13%) Weighted average period of 10.35 years (8.01 years) Capped rate liabilities 10,000 10,000 Weighted average rate of 7.18% (7.18%) Weighted average period of 1.46 years (1.96 years) Floating rate liabilities 21,331 41,656 196,747 159,331 The summary fair value adjustments in respect of financial liabilities at 5 October 1999, as calculated by JC Rathbone Associates Limited, was: Fair Value Adjustment 5 October 5 April 1999 1999 £'000 £'000 Financial instruments 4,744 (3,317) Derivative financial instruments (2,418) (4,094) Before allowance for taxation 2,326 (7,411) Net of tax 1,628 (5,114) 7. Share Capital On 27 August 1999 400,799 ordinary shares were issued in part consideration for the acquisition of the whole of the issued share capital of UBI Investments Limited. No ordinary shares were issued in the period under the terms of The Bradford Property Trust PLC 1984 Share Option Scheme. 8. Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities Year to 5 April 1999 1998 1999 £'000 £'000 £'000 Operating profit 24,602 21,051 62,124 Depreciation of tangible fixed assets 330 233 502 (Profit)/loss on sale of tangible fixed assets 1 (20) (20) Increase in property stock (net) (7,283) (16,343) (13,893) (Increase)/decrease in trade and other debtors and prepayments 1,171 27 (933) Increase/(decrease) in trade creditors 4,659 (1,051) (3,538) Increase/(decrease) in other taxation and social security 5 (38) (140) Increase/(decrease) in accruals and deferred income (2,456) 97 1,136 Increase in tenants' rent deposits 177 185 310 Decrease in provision for liabilities and charges (250) (250) (250) Net cash inflow from operating activities 20,956 3,8914 5,298 9. Reconciliation of Net Cash Flow to Movement in Net Debt Year to 5 April 1999 1998 1999 £'000 £'000 £'000 Increase/(decrease) in cash in period 7,561 2,308 (2,047) Increase in short term deposits with banks 1,400 - 6,900 (Increase)/decrease in short term bank borrowings 20,000 (19,500) (11,500) (Increase)/decrease in medium term loans from banks 500 (9,500) (14,000) Repayment of 6% guaranteed loan notes 1999 126 110 220 Repayment of 7.143% unsecured sterling bonds 2014 15,000 - - Issue of £75m 6.90% Bonds 2014 (73,963) - - Debt issue costs 597 (7) (26) Movement in net debt in period (28,779) (26,589) (20,453) Opening net debt (152,373)(131,920)(131,920) Closing net debt (181,152)(158,509)(152,373) 10.The interim financial statements, which do not constitute statutory accounts, have been prepared on a basis consistent with the statutory financial statements for the year ended 5 April 1999, other than adjustments in respect of the revaluation of investment property in tangible fixed assets - see note 4. The statutory financial statements for the year ended 5 April 1999 have been reported upon without qualification by the auditors and have been delivered to the Registrar of Companies. Copies of this statement are to be sent to all shareholders and are available from the registered office.

Companies

Bridgepoint Group (Reg S) (BPT)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today