Final Results
Capital & Regional PLC
31 March 2003
31 March 2003
2002 PRELIMINARY RESULTS
Capital & Regional plc, the co-investing property asset manager, today announces
its unaudited preliminary results for the period ended 31 December 2002.
Highlights
• Transformation to co-investing asset manager completed;
• Increase in properties under management to £1.5bn at the period end
(Dec 2001: £886m) and to £2.4bn at 31 March 2003;
• Net asset value per share up 15.5% to 388p on a fully diluted basis
(Dec 2001:336p);
• Return of £50m to shareholders in April 2002, reducing shares
outstanding by 22.1%;
• Profit before tax and exceptional items of £10.8m (2001: £11.4m)
(see note 2) on reduced capital base;
• A final dividend of 4.0p to be paid on 16 June 2003 (Dec 2001:
3.5p), making a total dividend for the year 7.0p, an increase of 17%
(Dec 2001: 6.0p);
• The Mall Fund produced a return to investors, after management fees,
of 21.6%;
• The Junction Fund produced a return to investors, after management
fees, of 17.8%;
• Acquisition of MWB Group plc leisure fund management business in January
2003.
Commenting on the results, Martin Barber, Chief Executive said:
"2002 has been a very successful year. Reshaping of the Group is now complete
and significant expansion of the funds has already taken place with investors of
the highest quality. We look forward to the coming year with optimism."
For further information please contact Capital & Regional on 020 7932 8000:
Martin Barber, Chief Executive
William Sunnucks, Group Finance Director
Andrew Hayes / Wendy Baker, Hudson Sandler Ltd - 020 7796 4133
CHAIRMAN'S AND CHIEF EXECUTIVE'S OVERVIEW
STRATEGY
2002 has been a very successful year. We have achieved our objective of
transforming Capital & Regional from being a traditional property company
investing solely on its own behalf to becoming a co-investing asset manager.
This innovative approach enables the Group to leverage its equity and management
expertise across a much larger property portfolio with a view to providing
significantly higher returns for its shareholders. The management teams now
have responsibility for over £2.4bn of property assets.
Over the years, the Group has produced good underlying returns through its
direct investments. It has recognised, however, that in a low inflation
environment stock market equity requires returns which cannot be achieved on a
sustainable basis solely from direct investment. Capital & Regional is now a
co-investing real estate asset manager. This enables the company not only to
receive returns from its co-investments, which should be no different to those
it would have expected from wholly owned property activities, but also to
receive fees for managing the funds which it has created.
2002 was a year of major activity. We are very pleased with the growth of the
net assets per share of 15.5% after a dividend of 7.0p per share and exceptional
costs of £8.7m.
We highlight below some key events:-
On 3 January 2002 we formed The Junction Limited Partnership, a fund focused on
dominant retail parks. This fund, initially a 50:50 joint venture between the
Group and clients of Morley Fund Management Limited, at launch had a value of
£336m and comprised 11 retail parks. During its first year of operation the fund
made significant progress through a series of acquisitions. The investors in
this fund now comprise the Group, Norwich Union, Commercial Union and Hermes on
behalf of The British Telecom Pension Scheme which helped to further develop the
fund providing equity as acquisitions arose. The fund now has a portfolio of 18
retail parks and 4 development sites with a gross asset value of £705m and our
share of the fund is currently 27.6%.
On 28 February 2002, a second fund called The Mall Limited Partnership was
created, focusing on in-town, covered shopping centres. This fund, initially a
50:50 joint venture between the Group and clients of Morley Fund Management
Limited, at launch had a value of £656m and comprised 11 shopping centres. The
investors in this fund now comprise the Group, Norwich Union, The Hanson Trust
Pension Fund and, as announced today, the Prudential. Two significant recent
acquisitions have increased the portfolio to 13 centres with a gross asset value
of £939m during the first year of operation to 28 February 2003. Our share of
the fund is currently 45.8%.
In April 2002 £50m of cash was returned to shareholders by way of a tender offer
for shares, reducing shares outstanding by 22.1%.
Since the year end we have acquired a leisure fund business from MWB Group plc,
which had three funds under management focused on leisure properties. They are
being managed by our Xscape management team, together with the personnel who we
were very pleased to welcome from MWB. This division in future will be known as
X-Leisure and currently has approximately £608m of assets under management.
We intend to expand our funds through new investors contributing either cash or
appropriate property assets and to increase rental income by further capital
investment and active tenant mix management. We believe our funds will
outperform the relevant benchmarks and the effectiveness of our management
skills will enhance the value of our assets under management through innovation,
marketing, promotion and investment.
The other major venture in which we have retained a 50% interest is the
development of The Fort, Glasgow in a 50:50 partnership with Pillar Property Plc
where construction has commenced on a major shopping park. The remaining Group
properties amounting to approximately £63m (excluding our head office building
in Lower Grosvenor Place) will be sold when appropriate.
MANAGEMENT & BOARD
The substantial changes to the way that the Group has pursued its business over
the past year have been reflected in corresponding changes to the board and
management.
Following the retirement of Roger Boyland from the position of Corporate Finance
Director and the decision to appoint Financial Director Lynda Coral to a new
role co-ordinating the funds development, William Sunnucks was appointed to the
board as Group Finance Director in October 2002.
Martin Gruselle, the senior non-executive director, indicated during the course
of the year that he wished to retire at the next AGM. As the Group has grown
over the past thirteen years, he has made an enormous contribution, with his
penetrating insight and independent eye. We record our gratitude and extend our
warmest wishes to him for the future.
Within the past fifteen months, the value of the properties for which the Group
is responsible has increased nearly threefold, to over £2.4bn. The Capital &
Regional team has worked tirelessly to build this enlarged base of activity and
to lay the foundations for the Group's future performance. This year, even more
than in others, we would like to express our appreciation of this effort and
achievement.
OUTLOOK
Reshaping of the Group is now complete and significant expansion of the funds
has already taken place with leading institutional investors. We have three
divisions specialising in the management of assets where generating higher
footfall and quality tenants are the key drivers to building value. The
effectiveness of our approach to achieve this has proved itself over recent
years and reflects the strength of the management teams we have assembled. The
community based shopping centres and high quality retail parks we manage are
very well placed to make progress, even if there is a general downturn in
consumer confidence, as value and convenience become even more important. We
look forward to the coming year with optimism.
GROUP FINANCE DIRECTOR'S OVERVIEW
Total returns
During 2002 the Group earned a total return of £37.1m made up as follows:
Total returns report 2002 2001
restated
£m £m
Profit before exceptionals and tax (see note 2) 10.8 11.4
Exceptional items (see note 2) (8.7)
Gains put through reserves 40.2 (33.4)
42.3 (22.0)
Tax (5.2) 7.1
Total return 37.1 (14.9)
Total return on equity 14.6% -4.5%
The table above summarises the Statement of Total Recognised Gains and Losses
("STRGL"). Much Group activity is directed towards creating an uplift in
property value. The benefits of this activity flow through reserves, while the
costs are all set against profit. Only tax is allocated between the two. For
these reasons we consider the STRGL to be important for assessing performance.
Total return on equity, post tax, is calculated on opening shareholders' funds,
reduced on a time weighted basis for the £50m share buy back in April 2002.
The exceptional items relate to costs incurred in repositioning the Group (see
note 2 for details).
Profit and loss account
The Group's profit can be broken down as follows:
Share of Wholly
JVs and owned
Asset Snow slope associates properties Total for Totals for
Segmental profits Management business 2002 2001
£000 £000 £000 £000 £000 £000
Asset management fees 7,262 7,262 1,509
Performance fees 2,781 2,781 -
Snow slope income 4,044 4,044 3,522
Rental & other income 12,123 12,123 57,084
Group Turnover 10,043 4,044 12,123 26,210 62,115
Share of joint ventures and
associates 27,298 27,298 3,068
Snow slope expenses (3,777) (3,777) (3,433)
Property costs (1,986) (1,986) (8,052)
Net Interest payable
- on non-recourse borrowings (14,956) (14,956) (2,447)
- on own borrowings (3,465) (6,603) (10,068) (31,946)
Contribution 10,043 267 8,877 3,534 22,721 19,305
Property management overhead (14,261) (9,564)
Profit on disposals (net) 2,319 1,622
Profit before exceptionals 10,779 11,363
Exceptional items (see note 2) (8,706) -
Profit before taxation 2,073 11,363
Asset Management: The Group charges fees for the asset management of the Mall
and Junction portfolios and joint ventures. Fees earned in 2002 covered 70% of
the Group's overhead. These include performance fees which enable the Group to
share in the upside when fund returns exceed the relevant hurdles. Performance
fees are accumulated over a three year period, so estimates made in any one year
may be subject to adjustment in future years.
Snow slope business: The snow slope business operates the ski business at Xscape
Milton Keynes. It charges for the use of the real snow indoor ski slope, and
for tuition. It employs 174 people including casual and part time employees.
It pays an arm's length rent to the partnership which owns the property. It has
committed to open a similar business at the new Xscape being built at Castleford
near Leeds.
Investments in joint ventures and associates: The Xscape developments at Milton
Keynes, Castleford and Braehead are treated as joint ventures, along with the
Glasgow Fort development. The Mall and Junction Funds are treated as
associates. The figures in this column reflect our share of the rental income
and interest expense, plus interest on Group borrowings secured on our interest
in the funds.
Wholly owned properties: These include a number of retail, office and
industrial properties which have not been put into the funds. They produce
rental income and incur direct management and interest expense.
Property management overhead: This covers the cost of running the London and
Glasgow offices. It has increased by 50% since 2001, while property under
management has increased by 67%. Out of the £14.3m cost, £3.8m is performance
related.
Change of accounting policy: The comparatives have been restated because the
Group has adopted FRS19 which requires full provision to be made for deferred
tax on all short term timing differences (see note 1).
Funding strategy
Group borrowings: These have fallen during the year from £441m to £95m. We
continue to borrow from banks which have demonstrated a commitment to property
lending and have experienced property teams. All bank borrowings are secured.
Joint ventures: Our main joint ventures - Milton Keynes, Castleford and Glasgow
Fort - are funded with limited recourse bank debt. Group guarantees are
carefully limited to specific events, principally cost over runs and interest
shortfalls.
Associates: The Mall and Junction properties are funded with approximately 50%
equity and 50% bank debt. There is no recourse to the Group for these
borrowings.
Hedging: The Group's main exposure is to interest rate movements. During the
year much of the bank debt was repaid, and new bank debt was raised within the
funds. Loan breakage costs of £3.9m are included in exceptional items.
The Group's exposure is now partially hedged by interest rate swaps within the
funds and joint ventures. Interest on the Group's CULS is fixed at 6.75%.
Interest on the £95m borrowed from the banks was floating rate at the year end.
The balance between borrowing on floating and hedged interest rates is
continually reviewed in the light of market conditions and business
requirements.
Dividend: The Directors are recommending a final dividend of 4.0p making a total
for the year of 7.0p per share, an increase of 17% (2001: 6.0p). The dividend
will be paid on 16 June 2003 to shareholders on the register at the close of
business on 25 April 2003. Our facility for dividend reinvestment by
shareholders continues.
Post balance sheet events
The principal post balance sheet events have been:
• the acquisition of the Leisure Fund management division of MWB Group plc,
which completed on 24 January 2003 at a price of £30.2m The purchase
included equity interests in the three funds, together with the rights to
deferred fund management fees and carried interests together valued at
£16.9m;
• the acquisition of two shopping centres by the Mall fund, at Chester and
Sutton Coldfield;
• the acquisition of three retail parks by the Junction fund, at Bristol,
Glasgow and Worcester;
Total property under management is currently estimated at £2.4bn built up as
follows:
Property under management 31 Dec 2002 25 Dec 2001 Increase
£m £m
Investment properties 55.5 703.3
Trading properties 7.8 28.1
Joint ventures 133.3 155.2
Mall Fund 724.4 -
Junction Fund 535.6 -
Other properties under management 39.8 -
Total at 31December 2002 1,496.4 886.6 1.69
Three retail parks acquired by the Junction fund 142.7 -
Two shopping centres acquired by the Mall fund 213.6 -
Leisure funds ex MWB Group 504.0 -
Estimated total at 31 March 2003 2,356.7 886.6 2.66
OPERATING REVIEW
SHOPPING CENTRES
2002 was a record year for UK shopping centre transactions; over 100 centres
changed hands for £4.5bn. This is twice the 2001 level and 40% up on a four-year
average. In our segment of the market, community shopping centres, positive cash
flows relative to cost of debt means there remains an active investment market,
particularly among property companies. Consumer spending slowed a little during
the year, but was still quite strong. We saw a late, but positive, critical
Christmas season with strong post Christmas sales. We continue to see selective
but healthy retailer requirements.
THE MALL FUND
This fund was launched at the end of February 2002. For the ten month period to
the end of December 2002 it showed a return to investors, after fees, of 21.6%;
a very strong performance. The ungeared property returns were 14.7%.
The key drivers to this performance were as follows:-
A yield shift of 50 basis points across the portfolio as a whole, about half of
which we estimate is attributable to an improvement in the "quality" (i.e.
reduced risk) of income streams, and the balance is a result of general
improvement in market sentiment towards the sector over the period. Active
management initiatives resulted in a 6.9% increase in net income over the nine
months since the end of March. At the period end, the average net initial yield
from the portfolio was 7.12% and an equivalent yield of 7.63%.
Since the period end there has been positive development of our stated expansion
strategy. The Gracechurch Centre in Sutton Coldfield was purchased for £104m and
the Grosvenor Centre in Chester was purchased for £106m.
THE MALL FUND OUTLOOK During 2002 pedestrian flows to shopping centres as a
whole in the UK decreased by 1.7% (Source: Footfall National Index). After
eliminating footfall returns from the Pallasades in Birmingham and Liberty II in
Romford because of massive redevelopment in the town centres affecting consumer
visits, as a whole our centres showed a 5.1% footfall increase. Looking forward
therefore, we are confident that our management efforts to increase consumer
visits and to take market share from the rest of the catchment will continue,
but no business is totally immune from the current world events. We are seeing,
as a result of increasing trade by our occupiers in our centres, significant but
affordable rental value growth.
RETAIL PARKS
Demand from retailers for quality retail park floor space remained strong
throughout the year. Retail warehouse investment became increasingly popular
amongst institutions throughout the year resulting in yield shifts which often
did not correspond to the type and quality of investment and the on-going demand
for that investment.
THE JUNCTION FUND
The Junction Limited Partnership was launched in January 2002. For the 12 month
period to the end of December 2002 it showed a return to investors, after fees,
of 17.8%. The ungeared property returns were 13.3%. This is a highly
satisfactory result.
Since the creation of the fund, we have made significant progress with our
stated expansion strategy:-
In July 2002 we acquired a portfolio of four parks for £145m from Burford
Holdings Ltd. The retail parks are Stoke, Lakeside Extra Retail Park in
Thurrock, Euro Retail Park in Ipswich and Cockhedge Shopping Park in Warrington.
A smaller retail park at Stoke was sub-sold before completion at a profit.
Simultaneous to this acquisition, Commercial Union Life Fund invested £71m in to
the fund. One of the smaller retail parks in this portfolio has since been sold
for £20m.
In September 2002, Hermes, on behalf of British Telecom Pension Scheme, became
an investor in the fund through the injection of two retail parks valued at
£67m. The parks are Reading Retail Park and the Ocean Retail Park in Portsmouth
together with an adjoining industrial estate.
Since the period end we have continued with the growth phase of the funds that
we have under management:-
In January 2003 we created a limited partnership called The Junction Thurrock
Limited Partnership - 65% owned by The Junction Limited Partnership and 35%
owned by clients of Aberdeen Property Investors ("API"). The new partnership
acquired Lakeside Extra for £45m from The Junction Limited Partnership, the
Tunnel Retail Park from clients of API for £21m and the West Thurrock Retail
Park from AXA Real Estate Investment Managers on behalf of AXA Sun Life plc for
£35m. All of these parks are adjoining and are in Thurrock, Essex. The objective
is to create the dominant destination park in Thurrock with its excellent
profile to the M25.
In February 2003, the Group, on behalf of The Junction Limited Partnership, were
part of a consortium comprising Pillar Property plc, the Hercules Unit Trust and
Morley Fund Management that acquired a substantial portfolio of retail parks and
development sites from Chartwell, a subsidiary of Kingfisher plc, for a total
consideration of £696m. Pursuant to this transaction, The Junction Limited
Partnership acquired three prime destination retail parks in Bristol, Glasgow
and Worcester, together with a development opportunity in Stoke-on-Trent with a
gross asset value of £143m. A smaller retail park in Bristol was sub-sold before
completion at a profit.
Following these acquisitions, the Junction portfolio now comprises 18
destination retail parks totalling over 3.3 million sq ft together with four
development sites offering the potential of 600,000 sq ft of additional floor
space. On completion of our business plans for these properties there is the
potential to create 22 destination retail parks comprising approximately 5
million sq ft. Our success in attracting new investors has provided us with a
larger asset base over which to gear our expertise to create value. We believe
that we have the potential to achieve exceptional rental growth by actively
managing these retail warehouse parks to exploit the footfall of category killer
destination stores.
We are nearing completion of the first phase of our re-branding program. The
first branded Junction retail park opens in Hull in April 2003 together with our
first pre-let 'Pod' development.
The government's attitude to out-of-town retailing continues to harden with
planning consents for new schemes becoming increasingly difficult to obtain.
This has led to our planning application at Aylesbury, which was supported by
the local authority and in accordance with the draft local plan, being 'called
in'. A public enquiry will be held in April 2003 and a formal planning decision
is anticipated by the year-end.
Significant progress has been made on our proposed 400,000 sq ft scheme at
Oldbury with the government's planning inspector having approved our proposals.
A detailed planning application has been submitted to the local authority and we
anticipate obtaining consent in May 2003, subject again to final ratification by
the government.
THE JUNCTION FUND OUTLOOK
We are continuing to see a healthy level of demand from retailers for quality
destination retail park floor space. We believe that retailer demand for
secondary floor space will diminish. We now manage a largely prime portfolio of
destination retail parks well suited to the more stringent demands of quality
retailers. Good and prime retail warehouse investments remain top of 'the
shopping list' for investors, thereby continuing the downward pressure on
yields.
XSCAPE
Our first Xscape in Milton Keynes has had a very good second year. The footfall
has increased by 22% compared to the first year despite it no longer being a
'novelty' attraction; one might have expected it to have fallen. The length of
time that people stay in the building has also increased significantly. The
occupiers report that they are trading well and new revenue streams from
corporate hospitality, sponsorship and events have been developed.
At Milton Keynes we are seeing good evidence of rental growth with leases being
sold at significant premiums.
The second Xscape at Castleford, Leeds will open in September 2003. We hope to
commence construction of Xscape, Glasgow in Braehead at the beginning of 2004.
Within Xscape, our wholly owned subsidiary that operates the real snow indoor
ski slope made a profit of £270,000 in 2002 and will also lease the snow
operation at Xscape, Castleford.
Due to the acquisition of the MWB leisure funds business we have decided to
withdraw from expansion in to continental Europe so that management can focus
its efforts 100% on the UK market. Therefore the projects in Germany and Belgium
have been terminated.
X-LEISURE The purchase of the MWB Group plc leisure fund business was a natural
development given the platforms we have created in this sector. Xscape, Milton
Keynes is making excellent progress and Xscape, Castleford is being completed to
plan. The management team we have assembled led by PY Gerbeau is amongst the
most capable in the leisure property sector today. We are well placed to
transform the performance of the MWB Group plc leisure assets. The business has
now been branded X-Leisure.
We have some expansion and rather different ideas on how to manage and deal with
the properties in the funds and are talking to investors about these and will
report further to shareholders in due course.
GLASGOW FORT Since the period end, in a joint venture between the Group and
Pillar Property plc, we have successfully completed the acquisition of a
prominent 90 acre site east of Glasgow and adjacent to junction 10 of the M8
motorway. Construction of the scheme, comprising some 350,000 sq ft of open A1
retail and leisure space, commenced in March 2003 and will provide Glasgow with
it's first shopping park. Completion is due in autumn 2004, when the ultimate
value is projected to be in excess of £140m.
THE CAPITAL HILL PARTNERSHIP
In December 2002, the Group announced that we sold our 50% interest in the
Capital Hill Partnership to Hermes Property Unit Trust for £20m. The Partnership
had one asset, The Maybird Centre in Stratford-upon-Avon which we continue to
manage.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the period ended 31 December 2002
Unaudited
(Unaudited)
Period to 31 December 2002 £000 (Restated)
Notes Year to 25 December 2001
£000
Turnover: group income and share of joint
ventures' turnover 34,998 77,735
Less: share of joint ventures' turnover (8,788) (15,620)
Group turnover 26,210 62,115
Cost of sales (5,763) (11,485)
Gross profit 20,447 50,630
Profit on sale of trading and development
properties 499 183
Exceptional loss on write off of European
development properties 2 (1,522) -
Total (loss)/profit on disposal of trading and
development properties (1,023) 183
Administrative expenses (14,261) (9,564)
Group operating profit 5,163 41,249
Share of operating profit in joint ventures 27,298 3,068
and associates
Total operating profit 32,461 44,317
Exceptional costs of a fundamental
reorganisation 2 (7,184) -
(Loss)/profit on sale of investment
properties and investments (789) 1,439
Profit on sale of investment properties in
associates and joint ventures 2,609 -
Profit on ordinary activities before
interest 27,097 45,756
Interest receivable and similar income 1,043 1,587
Interest payable and similar charges
Group (10,649) (33,533)
Share of associates (12,451) -
Share of joint ventures (2,967) (2,447)
(26,067) (35,980)
Profit on ordinary activities before
taxation 2,073 11,363
Taxation 4 (1,220) 8,145
Profit on ordinary activities after taxation 853 19,508
Equity minority interests (8) 250
Profit attributable to the shareholders of
the Company 845 19,758
Equity dividends paid and payable (4,333) (4,731)
(Loss)/profit retained in the period/year (3,488) 15,027
Earnings per share 3 1.3p 24.0p
Earnings per share - diluted 3 1.2p 22.6p
The results of the Group for the year related entirely to continuing operations
within the meaning of FRS 3.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the period ended 31 December 2002
Unaudited
(Unaudited) (Restated)
Period to 31 Year to 25
December December
2002 2001
£000 £000
Profit before tax 2,073 11,363
Movements in revaluation reserve
on investment properties 509 (33,003)
on other fixed assets (920) (117)
on properties held in joint ventures and associates 38,302 (537)
Gains on deemed disposals 2,377 -
Minority interests (8) 250
Total gains/(losses) before tax 42,333 (22,044)
Tax shown in profit and loss account (1,220) 8,145
Tax on revaluation surplus realised (3,556) (3,218)
Deferred tax (485) 2,205
Total tax (charge)/credit (5,261) 7,132
Total recognised gains and losses for the period 37,072 (14,912)
Prior year adjustment (see note 1) (1,870)
Total recognised gains and losses since last annual report 35,202
Return on equity for the period 14.6% (4.5)%
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the period ended 31 December 2002
Unaudited
(Unaudited) (Restated)
Period to 31 Year to 25
December December
2002 2001
£000 £000
Profit for the year attributable to shareholders of the Company 845 19,758
Equity dividends paid and payable (4,333) (4,731)
(Loss)/profit retained in the period (3,488) 15,027
Share capital and share premium issued in period (net of expenses) 868 34
Share capital purchased and cancelled in period (including expenses) (50,845) (23,325)
Other recognised gains and losses relating to period 36,227 (34,670)
Net reduction in shareholders' funds (17,238) (42,934)
Opening shareholders' funds as previously stated 289,111 340,617
Prior year adjustment (see note 1) (1,870) (10,442)
Opening shareholders' funds as restated 287,241 330,175
Closing shareholders' funds 270,003 287,241
CONSOLIDATED BALANCE SHEET
As at 31 December 2002
Unaudited
(Restated)
2002 2001
Notes £000 £000 £000 £000
Fixed assets
Property assets 55,475 703,338
Other fixed assets 12,934 13,966
68,409 717,304
Investment in joint ventures:
share of gross assets 77,857 91,497
share of gross liabilities (53,168) (62,014)
6 24,689 29,483
Investment in associates 5 286,367 -
379,465 746,787
Current assets
Property assets 7,773 28,126
Debtors:
amounts falling due after more than one year 84 8,307
amounts falling due within one year 27,241 27,925
Cash at bank and in hand 4,159 8,567
39,257 72,925
Creditors: amounts falling due within one year (29,281) (70,655)
Net current assets 9,976 2,270
Total assets less current liabilities 389,441 749,057
Creditors: amounts falling due after more than one
year (117,041) (461,816)
Provisions for liabilities and charges (2,397) -
Net assets 270,003 287,241
Capital and reserves
Called up share capital 6,175 7,886
Share premium account 162,752 161,927
Revaluation reserve 74,006 82,988
Other reserves 4,289 2,535
Profit and loss account 22,781 31,905
Equity shareholders' funds 270,003 287,241
Net assets per share 7 437p 364p
Net assets per share - fully diluted 7 388p 336p
CONSOLIDATED CASH FLOW STATEMENT
For the period ended 31 December 2002
Unaudited
(Unaudited) (Restated)
Period to Year to
31 December 2002 25 December 2001
£000 £000 £000 £000
Net cash inflow from operating activities 2,031 38,232
Dividends received from joint ventures 3,355 928
Dividends received from associates 9,418 -
12,773 928
Returns on investments and servicing of
finance
Interest received 447 1,548
Interest paid (15,158) (35,352)
Dividend paid to minority interests - (2)
Loan arrangement costs (374) (89)
(15,085) (33,895)
(281) 5,265
Taxation
UK corporation tax paid (7,679) (2,962)
UK corporation tax recovered ' 73 115
USA withholding tax recovered - 70
(7,606) (2,777)
(7,887) 2,488
Capital expenditure and financial investment
Payments for:
Additions to investment properties (18,510) (20,110)
Additions to properties held as current (9,544) (18,407)
assets (280) (306)
Additions to other tangible assets (850) (4,820)
Loans to joint ventures
Receipts from:
Sale of investment properties 645,842 216,033
Sale of properties held as current assets 28,122 16,778
Sale of other tangible assets 6 112
Sale of investments 20,203 -
Repayment of loans by joint ventures 8,050 1,710
673,039 190,990
665,152 193,478
Acquisitions and disposals and exceptional
item
Additions to joint ventures and associates (262,203) -
Costs of fundamental reorganisation (7,016) -
Acquisition of minority interests in - (2,929)
subsidiary
(269,219) (2,929)
395,933 190,549
Equity dividends paid (4,623) (4,855)
Cash inflow before financing 391,310 185,694
Financing
Issue of ordinary share capital 868 34
Share capital purchased and cancelled in (50,845) (33,491)
year
Bank loans received 118,800 72,604
Bank loans repaid (464,541) (222,365)
(395,718) (183,218)
(Decrease)/increase in cash (4,408) 2,476
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 December 2002
Unaudited
1. Basis of preparation
The preliminary announcement has been prepared for the 53 week period ending 31
December 2002 (52 week period ending 25 December 2001). The change in the period
end has not had a material effect on the financial information presented.
The preliminary announcement has been prepared in accordance with the accounting
policies adopted in the financial statements in the year ended 25 December 2001
with the exception of deferred tax. The Group has adopted Financial Reporting
Standard 19 (FRS 19) "Deferred Tax", in this preliminary announcement.
Comparatives have been restated to comply with the requirements of FRS 19. The
effect of this restatement, together with the impact on the current period's
results are summarised below:
(Unaudited) (Restated)
Period to Year to
31 December 25 December
2002 2001
£000 £000
Profit and loss account
Increase/(decrease) in deferred tax charge 527 (8,572)
Balance sheet
Reduction in net assets 2,397 1,870
2. Profit before tax and exceptional items
(Unaudited) (Restated)
Period to Year to
31 December 25 December
2002 2001
£000 £000
Exceptional loss on write off of European development properties 1,522 -
Exceptional costs of a fundamental reorganisation
Loan breakage costs 3,949 -
Advisory costs 2,150 -
Group reorganisation costs 1,085 -
7,184 -
Total exceptional costs 8,706 -
Profit before tax 2,073 11,363
Profit before tax and exceptional items 10,779 11,363
3. Earnings per share
(Unaudited) (Restated)
Period to Year to
31 December 2002 25 December 2001
Earnings per share 1.3p 24.0p
Earnings per share - diluted 1.2p 22.6p
a) Earnings per share have been calculated on the weighted average number of
Ordinary shares of 10p each in issue during the year 67,339,312 (2001:
82,272,918) and have been based on profit on ordinary activities after taxation
and minority interests of £845,000 (2001 (restated): £19,758,000).
b) Diluted earnings per share have been calculated after allowing for the
exercise of share options which have met the required exercise conditions. The
calculation does not include conversion of the Convertible Unsecured Loan Stock
as the effect on earnings per share is not dilutive. The weighted average number
of Ordinary Shares of 10p each is 67,947,236 (2001: 82,613,354) and the relevant
earnings are £845,000 (2001 (restated): £19,758,000).
4. Taxation
(Unaudited) (Restated)
2002 2001
£000 £000
Current tax
UK corporation tax (at 30%) 580 1,335
Tax credit in respect of exceptional items (1,510) -
Prior year (274) (1,135)
Share of joint ventures 177 227
Total current tax (1,027) 427
Deferred tax
Origination and reversal of timing differences 2,247 (8,572)
Total current and deferred tax for the period/year 1,220 (8,145)
5. Associates
The Mall Partnership The Junction Partnership Total to 31 Total to 25
£000 £000 December 2002 December 2001
£000 £000
Profit and loss account (100%)
Turnover 51,999 23,143 75,142 -
Operating profit 33,955 17,888 51,843 -
Sale of investment properties - 477 477
Net interest payable (15,600) (10,722) (26,322) -
Profit before tax 18,355 7,643 25,998 -
Balance sheet (100%)
Investment properties 724,386 535,632 1,260,018 -
Current assets 35,480 19,111 54,591 -
Current liabilities (32,757) (17,835) (50,592) -
Borrowing due in more than
one year (328,667) (211,181) (539,848) -
Net assets (100%) 398,442 325,727 724,169 -
Group
Interest at period end 49.39% 27.63% -
Group share of
Operating profit 16,927 6,967 23,894 -
Sale of investment properties - 174 174
Net interest payable (7,770) (4,305) (12,075) -
Profit for the period 9,157 2,836 11,993 -
Revaluation surplus for the
period 26,641 7,674 34,315 -
Associate net assets 196,791 89,998 286,789 -
Unrealised profit on sale of
property to associate (422) - (422) -
Associate net assets 196,369 89,998 286,367 -
6. Joint ventures
Xscape Xscape Total to 31 Total to 25
Milton Keynes Castleford Auchinlea December 2002 December 2001
Partnership Partnership Partnership Others £000 £000
£000 £000 £000 £000
Profit and loss
account (100%)
Turnover 3,493 - 804 13,280 17,577 31,241
Operating 2,614 (53) 644 3,625 6,830 6,136
profit/(loss)
Sale of investment - - - 4,871 4,871 -
properties
Net interest payable (3,287) - (602) (1,872) (5,761) (4,766)
(Loss)/profit before tax (673) (53) 42 6,624 5,940 1,370
Taxation and minority
interests - - - (370) (370) (415)
(Loss)/profit after tax (673) (53) 42 6,254 5,570 955
Balance sheet (100%)
Investment properties 73,050 30,940 29,350 - 133,340 155,162
Current assets 6,138 1,336 1,298 2,545 11,317 27,832
Current liabilities (3,045) (4,078) (529) (1,447) (9,099) (25,098)
Borrowing due in more
than one year (46,800) (19,650) (11,000) - (77,450) (87,902)
Net assets (100%) 29,343 8,548 19,119 1,098 58,108 69,994
Group
Interest at period end 50.0% 66.7% 50.0% - - -
Group share of
Turnover 1,747 - 402 6,639 8,788 15,620
Operating 1,307 (35) 322 1,810 3,404 3,068
profit/(loss)
Sale of investment - - - 2,435 2,435 -
properties
Net interest payable (1,643) - (301) (935) (2,879) (2,384)
(Loss)/profit before tax (336) (35) 21 3,310 2,960 684
Taxation and minority - - - (185) (185) (208)
interests
(Loss)/profit after (336) (35) 21 3,125 2,775 476
tax
Revaluation
surplus/(deficit) for
the period 48 - 3,939 - 3,987 (529)
Joint venture net assets 8,735 5,699 9,559 696 24,689 29,483
The joint ventures all operate in the UK.
7. Net assets per share
As at 31 December 2002 Net assets Number of shares Net assets per share
£000
Consolidated balance sheet 270,003 61,746,441 437
Conversion of subordinated unsecured loan stock ("CULS") 24,314 12,670,912
Exercise of share options 6,901 3,160,408
Fully diluted 301,218 77,577,761 388
As at 25 December 2001 Net assets Number of shares Net assets per share
£000
Consolidated balance sheet 287,241 78,855,975 364
Conversion of subordinated unsecured loan stock ("CULS") 24,223 12,412,171
Exercise of share options 8,724 3,998,308
Fully diluted 320,188 95,266,454 336
8. Status of financial information
The financial information contained in this announcement does not constitute
statutory financial statements within the meaning of Section 240 Companies Act
1985. The comparative figures (which have been restated for the effect of FRS
19) have been extracted from the audited financial statements for the year ended
25 December 2001 which have been filed at Companies House. The auditors have
reported on those accounts; their report was unqualified and did not contain
statements under S237(2) or (3) of the Companies Act 1985. The statutory
accounts for the period ended 31 December 2002 will be finalised on the basis of
the financial information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies following the
company's annual general
meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
Tuesday, 17th December 2024
COMPANIES COVERED:
Latest directors dealings
- 11 hours ago Compass Group
- 11 hours ago International Biotech Trust
- 11 hours ago Sage Group
- 12 hours ago The Global Smaller Companies Trust
- 12 hours ago Harworth Group