Final Results
Cardiff Property PLC
25 November 2002
The Cardiff Property plc
56 Station Road, Egham, Surrey TW20 9LF
Tel: 01784 437444 Fax: 01784 439157
E-mail: webmaster@cardiff-property.com
Web: www.cardiff-property.com
FOR RELEASE 7.00 AM 25 NOVEMBER 2002
(The group, including Campmoss, specialises in property investment and
development in the Thames Valley. The portfolio, valued in excess of £32m, is
primarily located to the west of London, close to Heathrow Airport and in Surrey
and Berkshire .)
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2002
HIGHLIGHTS
Group turnover £1.8m (2001: £5.8m)
Property sales £0.2m (2001: £4.2m)
Net asset value per share:
Excluding FRS 19 - 715p (2001: 652p) +10%
Including FRS 19 - 704p (2001: 646p)
Profit before tax £1.2m (2001: £2.3m) - 49%
Earnings per share 31.2p (2001: 58.7p) - 47%
Total dividend for the year 6.3p per share (2001: 5.6p) + 13%
Final dividend 4.5p per share (2001: 4.0p)
Gearing nil (2001: nil)
Richard Wollenberg, chairman, commented:
'The year under review has seen a further increase in the underlying value of
the company's ordinary shares. Over the year and probably more evident in the
last two quarters the level of letting activity has fallen both for commercial
and residential property. As a result of previous property sales and a cautious
approach to new acquisitions the group's financial position remains strong with
nil gearing.'
For further information:
The Cardiff Property plc Richard Wollenberg 01784 437444
Old Mutual Securities Ltd Kevin Wilson 0161 819 2110
Beattie Financial Brian Coleman-Smith 020 7398 3300
Chairman's statement
Dear shareholder
The year under review has seen a further increase in the underlying value of the
company's ordinary shares. The group including Campmoss Property continues to
revise and improve, where possible, existing planning consents for its
commercial and residential property as well as progressing with its development
programme.
For the year to 30 September 2002 pre-tax profit was £1.15m (2001: £2.26m)
including a contribution from Campmoss Property, our 47.62% joint venture
undertaking, of £0.19m (2001: £0.19m). Turnover totalled £1.85m (2001: £5.82m)
which included gross rental income of £1.66m (2001: £1.64m) and overage payments
amounting to £0.19m received in the first half of the year in respect of
previous sales. The gross rental income for the current year has remained
similar to last year despite the sale of income producing property completed
during our previous accounting year.
Net profits attributable to shareholders amounted to £0.75m (2001 restated:
£1.63m) and earnings per share were 31.2p (2001 restated: 58.7p).
Dividend
Your directors are recommending a final dividend of 4.5p per share (2001: 4.0p)
making a total dividend for the year of 6.3p (2001: 5.6p) an increase of 12.5%.
The final dividend will be paid on 14 February 2003 to shareholders on the
register on 17 January 2003.
Financial
The financial statements before you have been prepared adopting the new
accounting standard, FRS 19 - Deferred Taxation, which has had an effect on both
earnings and net assets per share. The comparative figures for 2001 have been
restated to show a direct comparison. Full details are set out in the annual
report. Your directors are of the view, along with other property companies and
analysts, that accounting for deferred tax which is unlikely to materialise,
gives a distorting effect to the accounts. For a more correct understanding net
assets per share data has been presented both excluding and including the
effects of FRS 19.
As a result of previous property sales and a cautious approach to new
acquisitions the group's financial position remains strong with nil gearing.
Your directors believe that this continues to be the most appropriate policy in
the current market.
The company's commercial and residential investment portfolio was valued at the
year end by Cushman & Wakefield, Healey & Baker and Aitchison Raffety
respectively, producing a total value of £6.08m (2001: £6.21m). This figure
excludes property in the course of development or those undergoing upgrading or
refurbishment works. The values of these properties are included as stock in the
balance sheet at cost or market values whichever is the lower.
Total assets of the group were £20.50m (2001 restated: £21.86m) including our
share of the net assets of Campmoss Property of £4.51m (2001 restated: £4.38m).
The total property portfolio under management, including Campmoss Property, is
valued in excess of £32m.
Net assets before adjusting for FRS 19 were £15.51m (2001: £17.03m) equivalent
to 715p per share (2001: 652p) an increase of 10% over the year. After
accounting for FRS 19 net assets were £15.26m (2001 restated: £16.88m)
equivalent to 704p per share (2001 restated: 646p).
The group's balance sheet remains strong with cash placed on short to medium
term deposit amounting to £5.09m. Long-term borrowings of £3.2m (2001: £3.2m)
are linked to base rate. The group's existing bank borrowing arrangements have
been renewed for a further year and remain available to take advantage of
opportunities as and when they arise.
To enhance shareholder value your directors continue to follow their policy of
purchasing the company's ordinary shares for cancellation at a substantial
discount to their underlying value. At an extraordinary general meeting held on
19 September 2002 shareholders renewed the directors' authority to acquire
shares and 90,000 ordinary shares were purchased and cancelled on 24 September
2002. The annual renewal of this authority will be placed before shareholders at
the forthcoming annual general meeting. During the year a total of 444,000
ordinary shares, including the 90,000 referred to above, were purchased at a
cost of £2.36m, at prices ranging between 510p and 545p per share and cancelled.
The Thames Valley, Heathrow, the M25, M4 and M3 motorways
As expressed in my last annual and interim reports to shareholders your
directors have adopted a cautious approach to the property market. The weakness
of world stock markets has restricted expansion plans of many companies even
though retail demand appears to remain strong. The lettings market is not immune
to the present uncertain state of the economy and world affairs and inevitably
the Thames Valley, a barometer of activity in technology related businesses, has
suffered.
Over the year and probably more evident in the last two quarters the level of
letting activity has fallen both for commercial and residential property. In the
office sector prospective tenants are being offered attractive incentives to
enter into a lease commitment and as a consequence underlying rental levels have
probably fallen by around 10%-15%. The Thames Valley, especially west of London
and close to Heathrow, has experienced real annual rental increases over the
past five years and your directors consider the adjustment as a reasonable
reaction to the current uncertainty in the market place.
Low interest and deposit rates set against much higher income yields available
from the property market are encouraging institutions and private individuals to
increase their property portfolio weighting. Well located commercial properties
let to strong covenants and on medium to long-term leases continue to attract
considerable investment attention and inevitably capital values have increased.
The capital value of low risk income producing commercial and industrial
property will remain firm as long as interest rates continue at their current
levels.
Residential property values in Surrey and Berkshire have again seen an increase
over the year although during the last few months certain properties have
re-appeared on the market at slightly lower asking prices. This primarily
relates to the higher end of the market but, as always, location and quality of
design will attract a premium. Any weakness in the market will be limited by the
restrictive planning process, the low cost of borrowing and the acknowledged
quality of life that the area offers.
Commercial investments
Our investment portfolio is located within the Thames Valley and to the west of
Heathrow, at Windsor and Egham. These properties are let to well known covenants
on medium to long-term institutional type leases. At The White House, Egham,
rent reviews for the first floor office area have been agreed whilst we remain
in discussions with the six ground floor retail shop tenants. An increase of
just over 10% in rental terms is expected once all reviews have been agreed. We
continue to negotiate a lease renewal with The Royal Mail regarding the post
office sorting centre at Cardiff.
At the Windsor Business Centre following receipt of planning permission, one of
the business units has been upgraded to incorporate further office space for the
existing tenant. The annual rental income from this property has increased to
just under £247,000 per annum.
Gross rental income from our commercial property portfolio now totals £0.78m per
annum.
Residential
At Ashleigh Lodge, Virginia Water, Surrey, a revised planning permission has
been granted and the development of a 5 bedroom executive house of just under
4,800 sq ft recently commenced. The property stands in approximately 2 acres of
grounds within the Green Belt.
A smaller residential property in Egham, acquired at the beginning of the year,
has also received planning permission for the redevelopment of four new terraced
houses. Discussions are taking place at present with a view to either disposing
of the site or developing the project ourselves.
We retain two high-yielding residential properties in Windsor and Egham, both of
which have recently been re-let on short-term tenancies.
Campmoss Property Company Limited
At the year-end the directors of Campmoss, taking a cautious view of the market
and account of external advice where available, have assessed the current market
value of the portfolio at £24.19m (2001: £21.56m). Property in the course of
development is valued at cost. Gross rental income from these investments is
currently in excess of £1.78m per annum. The investment properties are primarily
let to well known covenants on long-term leases.
At Britannia Wharf, Woking, rent reviews have been agreed for the majority of
the 28,750 sq ft office space. The annual rental income is now just under
£600,000, an increase of 10%.
At Maidenhead, the development of a new 30,000 sq ft high grade office building
has been completed on time and to budget. The new building has been designed to
allow letting of the building to one or more tenants and agents have been
appointed. In the current market a suitable letting may take time to achieve,
but once secured the capital value of this investment should increase
significantly.
At York Road, Maidenhead, planning permission for a new 10,000 sq ft high grade
office building, with good underground parking facilities has been granted and
building works have commenced. Completion is expected towards the middle of next
year.
Discussions with the planning authorities in respect of two new office schemes
at Worplesdon, Guildford, and Bracknell, Berkshire, continue. In the meantime
part of the existing office and retail premises at Bracknell continues to be let
on a short-term basis.
Campmoss Property recently increased its borrowing facilities at lower rates of
interest and, together with existing cash balances, has sufficient funds
available to complete the current development programme. At the year end net
borrowings totalled £13.26m (2001: £10.90m). Gearing was 124% (2001 restated:
119%).
Quoted investments
A cash distribution was received during the year from our shareholding in
Grantchester Holdings plc. We retain our shareholdings in HACAS Group PLC, which
provides outsourcing and consultancy services to the public and social housing
sector and The Celltalk Group plc, a call centre based retailer of mobile
phones. Despite adverse conditions the market value of our quoted portfolio
remains in excess of cost. I remain a director of HACAS and Celltalk both of
which are quoted on AIM.
Shareholders telephone dealing service
A telephone dealing service for the company's ordinary shares has been made
available to shareholders by our registrars, Computershare Investor Services
PLC. Further details are set out in a separate information sheet enclosed with
this report and accounts. This service may be particularly useful to some of our
smaller shareholders, but should not be construed as an encouragement to buy or
sell the company's shares. If in doubt shareholders should contact their
financial advisors.
Management and staff
Our small but focused management team has again achieved good progress in the
current year. I therefore wish to take this opportunity of thanking all members
of the group, including our joint venture partners, for their effort and support
throughout a challenging but successful year.
Post balance sheet events and outlook
Our shareholding in Grantchester Holdings plc has been sold following a cash
offer and an overage payment received, following a successful planning outcome
at a property sold last year.
The group's residential project at Virginia Water, Surrey, and new office
development at Maidenhead, Berkshire, continue on budget and in accordance with
the expected timetable.
Our assets, based in the Thames Valley, are in prime locations offering high
quality space with good car parking facilities. These factors always will be
important in determining investment values. The group is well placed to respond
to opportunities that present themselves and I look forward to achieving further
underlying value in what I am sure will be another challenging year.
J R Wollenberg
Chairman
25 November 2002
Consolidated profit and loss account
for the year ended 30 September 2002
2002 2001
(Restated)
£'000 £'000
Turnover
Group and share of joint venture undertaking 1,847 5,822
Less: share of joint venture undertaking (857) (820)
______ ______
Group turnover 990 5,002
Cost of sales (55) (2,993)
______ ______
Gross profit 935 2,009
Administrative expenses (416) (473)
Other operating income 192 184
______ ______
Operating profit
Group 711 1,720
Share of operating profit in joint venture undertaking 617 615
______ ______
Total 1,328 2,335
Profit on sale of investment property (group) 240 247
Profit on sale of other investments (group) 62 141
Amounts written off investments (group) (204) (208)
______ ______
Profit on ordinary activities before interest 1,426 2,515
Interest receivable and similar income
Group 315 398
Share of joint venture undertaking 5 14
Interest payable
Group (159) (229)
Share of joint venture undertaking (436) (434)
______ ______
Profit on ordinary activities before taxation 1,151 2,264
Tax on profit on ordinary activities (401) (638)
______ ______
Profit on ordinary activities after taxation being profit for the financial year 750 1,626
attributable to shareholders
Dividends (139) (148)
______ ______
Retained profit for the financial year 611 1,478
===== =====
The above results relate entirely to continuing activities. There were no acquisitions or disposals of businesses
during the year.
2002 2001
(Restated)
£'000 £'000
Earnings per share - pence
Before adjusting for FRS 19
Basic 35.4 76.4
Diluted 34.8 75.2
===== =====
After adjusting for FRS 19
Basic 31.2 58.7
Diluted 30.7 57.8
===== =====
2002 2001
£'000 £'000
Dividends
Interim paid 1.8p (2001: 1.6p) 42 44
Final proposed 4.5p (2001: 4.0p) 97 104
_____ _____
139 148
===== =====
Consolidated statement of total recognised gains and losses
for the year ended 30 September 2002
2002 2001
(Restated)
£'000 £'000
Profit for the financial year 750 1,626
Unrealised surplus/(deficit) on revaluation of investment properties in the year 125 (90)
(group)
______ ______
Total recognised gains and losses relating to the financial year 875 1,536
Prior year adjustment relating to accounting policy for deferred tax (150) -
_______ ______
Total recognised gains and losses since last annual report 725 1,536
====== =====
Consolidated balance sheet
at 30 September 2002
2002 2001
(Restated)
£'000 £'000 £'000 £'000
Fixed assets
Tangible assets:
Investment properties 6,080 6,210
Other 12 7
______ ______
6,092 6,217
Investments:
Investment in joint venture undertaking
Share of gross assets 12,098 11,469
Share of gross liabilities (7,589) (7,088)
______ ______
4,509 4,381
Other investments 368 608
______ ______
4,877 4,989
______ ______
10,969 11,206
Current assets
Stock and work in progress 2,451 2,106
Debtors 1,992 579
Cash at bank and in hand 5,086 7,964
______ ______
9,529 10,649
Creditors: amounts falling due within one year (2,083) (1,008)
______ ______
Net current assets 7,446 9,641
______ ______
Total assets less current liabilities 18,415 20,847
Creditors: amounts falling due after more than (2,560) (3,200)
one year
Provisions for liabilities and charges (595) (765)
______ ______
Net assets 15,260 16,882
===== =====
Capital and reserves
Called up share capital 434 523
Share premium account 4,815 4,815
Investment property revaluation reserve 4,152 4,162
Other reserves 2,200 2,111
Profit and loss account 3,659 5,271
______ ______
Shareholders' funds - equity 15,260 16,882
===== =====
Net assets per share - pence:
Before adjusting for FRS 19 715 652
===== =====
After adjusting for FRS 19 704 646
===== =====
Consolidated cash flow statement
for the year ended 30 September 2002
2002 2001
£'000 £'000
Cash (outflow)/inflow from operating activities (1,328) 4,572
Returns on investment and servicing of finance 145 157
Taxation (157) -
Capital expenditure and financial investment 629 995
Equity dividends paid (146) (139)
______ ______
Cash (outflow)/inflow before financing (857) 5,585
Financing (1,997) (805)
______ ______
(Decrease)/increase in cash in the year (2,854) 4,780
===== =====
Reconciliation of net cash flow to movement in net funds/(debt)
(Decrease)/increase in cash and movement in net funds/(debt) in the year (2,854) 4,780
resulting from cash flows
Net funds/(debt) at beginning of year 4,730 (50)
______ ______
Net funds at end of year 1,876 4,730
===== =====
Reconciliation of operating profit to net cash inflow from operating
activities
Operating profit - group 711 1,720
Depreciation charges 9 11
(Increase)/decrease in stock and work in progress (345) 1,184
(Increase)/decrease in debtors (1,483) 1,473
Increase in creditors and provisions (220) 184
______ ______
Net cash (outflow)/inflow from operating activities (1,328) 4,572
===== =====
Summary preliminary results
for the year ended 30 September 2002
2002 2001
(Restated)
£'000 £'000
Turnover 1,847 5,822
Gross rental income 1,662 1,637
Profit on ordinary activities before taxation 1,151 2,264
Taxation (401) (638)
Profit for the financial year attributable to shareholders 750 1,626
Dividend: Interim 1.8p (2001: 1.6p) per share 42 44
Final 4.5p (2001: 4.0p) per share 97 104
Earnings per share: Basic 31.2 58.7
Diluted 30.7 57.8
Notes
i) Basic earnings per share has been calculated using the weighted average number of ordinary shares in issue
during the year of 2,401,174 (2001: 2,769,889). Diluted earnings per share has been calculated in
accordance with FRS14.
ii) The taxation charge represents tax on profits of the year less management expenses brought forward. The
basis is consistent with the financial statements for the year ended 30 September 2001, except that FRS19
- Deferred Tax has been adopted. The standard requires that full provision is made for deferred tax and
the comparative figures have been restated to reflect its adoption.
iii) The board recommends that the final dividend be increased to 4.5p (2001: 4.0p) payable on 14 February 2003
to shareholders on the register at 17 January 2003, giving a total increase for the year of 13%.
iv) The annual general meeting will be held on 14 January 2003.
v) The financial information set out above does not constitute the company's statutory accounts for the years
ended 30 September 2002 or 2001. Statutory accounts for 2001 have been delivered to the Registrar of
Companies and those for 2002 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 statements
under section 237(2) or (3) of the Companies Act 1985.
vi) A copy of the report and accounts will be submitted to the document viewing facility at the Financial
Services Authority.
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