Final Results
Cardiff Property PLC
28 November 2003
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
FOR RELEASE 7.00 AM 28 NOVEMBER 2003
The group, including Campmoss, specialises in property investment and
development in the Thames Valley. The portfolio, valued in excess of £40m, 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 2003
HIGHLIGHTS
Group turnover £2.0m (2002: £1.8m)
Property sales nil (2002: £0.2m)
Net asset value per share 777p (2002: 704p) + 10%
Net asset value per share before adjusting for
FRS 19 794p (2002: 715p) + 11%
Profit before tax £1.7m (2002: £1.2m) + 46%
Earnings per share 59.3p (2002: 31.2p) + 90%
Total dividend for the year 7.1p per share (2002: 6.3p) + 13%
Final dividend 5.1p per share (2002: 4.5p)
Gearing nil (2002: nil)
Richard Wollenberg, chairman, commented:
'Despite a difficult market the group has performed well over the period under
review, enabling it to continue its development programme, target further
properties for acquisition and progress existing and new planning applications.
New office letting activity within the Thames Valley remains subdued and I
continue to be cautious about the market place.'
For further information:
The Cardiff Property plc Richard Wollenberg 01784 437444
Arbuthnot Securities Tim Goodman 0121 632 2100
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
The group, including Campmoss, specialises in property investment and
development in the Thames Valley. The portfolio, valued in excess of £40m, 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 2003
Chairman's Statement
Dear shareholder
Despite a difficult market the group has performed well over the period under
review. The cautious approach adopted over the last two years has enabled the
group to continue its development programme, target further properties for
acquisition and progress existing and new planning applications without creating
pressure on financial resources.
For the year to 30 September 2003 profit on ordinary activities before tax was
£1.68m (2002: £1.15m) including a contribution from Campmoss Property Company
Limited our 47.62% joint venture undertaking of £0.35m (2002: £0.19m). As no
sales of development properties were made during the year turnover is entirely
represented by gross rental income of £2.0m (2002: £1.85m). The group's rental
income increased marginally to £0.84m (2002: £0.81m) following rent reviews at a
property in Egham. The letting of Globe House, Maidenhead, held by Campmoss,
accounted for a major part of the increased rental income contribution of £1.16m
(2002: £0.86m). There were no disposals of investment properties during the
year.
In the second half of the year the group disposed of its investment in HACAS
Group PLC following an agreed takeover offer, which contributed £0.77m to
pre-tax profits.
Net profit attributable to shareholders amounted to £1.23m (2002: £0.75m) and
earnings per share was 59.3p (2002: 31.2p)
Dividend
Your directors propose a final dividend of 5.1p (2002: 4.5p) making a total
dividend for the year of 7.1p (2002: 6.3p) an increase of 12.7%. The final
dividend will be paid on 12 February 2004 to shareholders on the register on 16
January 2004.
Financial
The Accounting Standard FRS 19 Deferred Tax introduced last year has again been
adopted in the accounts before you but as in the previous year the earnings per
share and net asset per share figures have been presented before and after
adjustment.
The group's commercial and residential investment portfolio, valued annually by
Cushman & Wakefield Healey & Baker and Aitchison Raffety respectively, totalled
£6.13m (2002: £6.08m). These figures exclude property in the course of
development or refurbishment which is held as stock in the balance sheet at cost
or market value whichever is the lower. Total assets for the group were £20.5m
(2002: £20.5m) including our share of the net assets of Campmoss of £4.8m (2002:
£4.5m). Taking into account current market values the group's property
portfolio, including those held by Campmoss, is valued in excess of £40m.
Net assets were £15.7m (2002: £15.3m) equivalent to 777p (2002: 704p) per share.
Before adjusting for FRS19 Deferred Tax net assets were £16.0m (2002: £15.5m)
equivalent to 794p (2002: 715p) per share, an increase of 11%.
The group has renewed its existing bank borrowing facility and continues to
retain long-term borrowings of £3.2m (2002: £3.2m), both of which are linked to
base rate. Cash balances have been placed on short-term deposit and are
available for completion of the groups' development programme as well as for
making further investments.
During the year the company purchased for cancellation 153,560 ordinary shares
at a total cost of £0.79m at prices ranging between 511p and 522p. Your
directors intend to continue the policy of acquiring shares at a substantial
discount to their underlying value. The annual renewal of the directors'
authority will be placed before shareholders at the annual general meeting to be
held on 13 January 2004.
The Thames Valley, Heathrow, the M25, M4 and M3 motorways
Office rental values in the Thames Valley and surrounding regions have remained
under considerable pressure. The level of new office letting activity,
inevitably affected by domestic and world political and economic considerations,
has remained subdued. However, against this background, the group has been
successful in letting two of its buildings in Maidenhead.
A revival in the high-tech and service industry seems some way off and as a
consequence potential tenants are reluctant to commit to long-term corporate
property decisions. The commencement of new office development schemes has
inevitably been restrained in response to this weak occupier market compounded
by some existing tenants being keen to reduce their balance sheet liabilities by
attempting to sub-let existing office space. Your directors have, however,
recently noticed a marginal increase in the level of enquiries for office
lettings, although this could be due to potential occupiers taking advantage of
attractive deals that are currently being negotiated.
The lack of alternative investment opportunities and the ability to lock into
long-term low interest rate borrowings continues to encourage the occupational
and investment market. As a result property values have remained relatively
stable for the past twelve months.
As reported at the interim stage, residential values in Surrey and Berkshire
have fallen over the past year with buyers reluctant to commit themselves in the
current uncertain market. The reduced level of activity has certainly been
evident at the higher end of the market affecting those homes over £1m whilst at
the lower range, between £200,000 and £400,000, the levels of activity remain
positive. The difficult and lengthy process of obtaining new planning
permissions within the Green Belt and sensitive environmental areas continues to
pose a problem, although by limiting the supply of new homes any major
correction in selling prices should be minimised. As always, location, quality
of design and finish, will determine the level of interest in new homes.
Investment and development portfolio
The investment portfolio includes a range of retail, industrial and office
buildings located in Windsor, Egham and Cardiff.
At The White House, Egham, rent reviews on all of the retail units have now been
concluded resulting in an overall increase in the annual rental of approximately
13%. At the Windsor Business Centre, two business units became available in the
early part of the year. One of these has now been let and the remaining unit is
currently under offer. At Cowbridge Road, Cardiff, we continue to negotiate a
new lease with the Royal Mail.
On the residential front our development at Ashleigh Lodge, Englefield Green,
Surrey, is expected to complete construction by the end of the calendar year and
although initial interest has been shown by prospective purchasers it is too
early to predict when a sale will be concluded. The development of four small
terraced houses at Rusham Road, Egham, is expected to complete next year.
Two freehold houses in Egham and Windsor continue to be retained and let on
short-term leases.
Campmoss Property Company Limited
Campmoss has experienced a high level of activity during the year. The
investment portfolio, located in the Thames Valley to the west of London and
Heathrow Airport, includes freehold office buildings at Maidenhead, Woking,
Burnham, Worplesdon and Bracknell. Gross annual rental income generated from
these properties is now in excess of £2.5m per annum.
The portfolio, valued annually by the directors taking into account market
conditions and external advice where available, has been assessed to be £31m
(2002: £24m) at the year end. Property in the course of development has been
valued at cost.
At Cannon Court, Maidenhead, now renamed Globe House, a letting was successfully
completed to SDL Plc at an average annual rental of £664,000 over the first five
year period.
At Clivemont House, Maidenhead, acquired in February this year, a further
short-term letting has been achieved. The building is now fully let and produces
an annual rental of just over £340,000. Plans to redevelop the site with a
30,000 sq ft office building have been submitted and discussions are currently
taking place with the local planning authority.
Further purchases of two income producing properties adjoining our existing
office building at Gowring House, Bracknell, have been completed. The existing
planning application for the redevelopment of Gowring House has been revised to
include these new buildings with the intention to seek permission for a
residential, retail and separate office scheme.
At York House, Maidenhead, the development of a new 10,000 sq ft office building
is now complete and agents have been instructed to achieve a letting or sale.
The adjacent three, 2 bedroom houses have also been completed and are available
for sale.
At The Priory, Burnham, we agreed, post year end, a surrender of an existing
lease for part of the office building totalling 9,000 sq ft. The consideration
was in excess of £1m. A complete refurbishment of this space is now underway
with a view to letting in the New Year.
Campmoss Property arranged new borrowing facilities to cover acquisitions
completed during the year. At the year end, net borrowings totalled £18.0m
(2002: £11.7m). Gearing was 178% (2002: 124%).
Quoted investments
As mentioned earlier, following an agreed takeover offer for HACAS Group PLC,
the group received cash and new shares in Tribal Group plc resulting in a profit
of just over £0.77m. The shares in Tribal Group plc have been retained together
with our existing holdings in Celltalk Group plc and General Industries plc, the
latter being a recently formed cash shell company. I remain a director of
Celltalk and General Industries both of which are quoted on AIM.
Free share dealing facility - sales only
A number of shareholders have already taken advantage of the existing low
commission share dealing facility provided by the company's registrars,
Computershare Investor Services plc. In response to requests from shareholders,
the company has arranged with Computershare a free share sale service for
shareholders who wish to dispose of holdings of 1,000 shares or less. Details of
this offer are included in a separate information sheet enclosed with this
report. Shareholders should be aware that this service should not be construed
as an encouragement to buy or sell the company's shares. If in any doubt
shareholders should contact their own financial advisers. Computershare can be
contacted on 0870 703 0084.
Management and staff
The group has reported another successful year and on behalf of shareholders I
wish to thank my fellow board members, our small management team and joint
venture partners for their support and achievements as reflected in this report.
Post balance sheet events and outlook
As referred to earlier, Campmoss negotiated a surrender of a lease in respect of
part of the office space at The Priory, Burnham, for a cash sum in excess of
£1m. This amount, guaranteed by a clearing bank, is payable in instalments over
the next twelve months.
In November, Campmoss acquired a 10,000 sq ft office building in Maidenhead
known as Highways House. Income from short-term leases amounts to just over
£280,000 per annum. The intention is to redevelop the site with a new office
scheme, subject to obtaining appropriate planning permission.
New office letting activity within the Thames Valley property market remains
subdued. The imminent introduction of Stamp Duty Land Tax in December 2003 will
no doubt bring further pressure on values and rental levels. Bearing all factors
in mind, I remain cautious of the market place.
The group's residential and new office projects remain in line with our
projected timetable and I hope to be able to report further progress especially
with regard to our various planning applications at the interim stage.
J Richard Wollenberg
Chairman
27 November 2003
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
Consolidated profit and loss account
for the year ended 30 September 2003
2003 2002
£'000 £'000
Turnover
Group and share of joint venture undertaking 2,001 1,847
Less: share of joint venture undertaking (1,157) (857)
______ ______
Group turnover 844 990
Cost of sales (186) (55)
______ ______
Gross profit 658 935
Administrative expenses (438) (416)
Other operating income 189 192
______ ______
Operating profit
Group 409 711
Share of operating profit in joint venture undertaking 867 617
______ ______
Total 1,276 1,328
Profit on sale of investment property (group) - 240
Profit on sale of other investments (group) 813 62
Amounts written off investments (group) (4) (204)
______ ______
Profit on ordinary activities before interest 2,085 1,426
Interest receivable and similar income
Group 247 315
Share of joint venture undertaking 2 5
Interest payable
Group (137) (159)
Share of joint venture undertaking (520) (436)
______ ______
Profit on ordinary activities before taxation 1,677 1,151
Tax on profit on ordinary activities
Group (346) (343)
Share of joint venture undertaking (99) (58)
______ ______
Profit on ordinary activities after taxation being profit
for the financial year 1,232 750
Dividends (141) (139)
______ ______
Retained profit for the financial year 1,091 611
______ ______
The above results relate entirely to continuing activities. There were no
acquisitions or disposals of businesses during the year.
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
Consolidated profit and loss account
for the year ended 30 September 2003 (continued)
Earnings per share 2003 2002
Pence per Pence per
share share
On profit for the financial year
Basic 59.3 31.2
Diluted 58.1 30.7
On profit for the financial year before
adjusting for FRS 19 - Deferred Tax
Basic 63.2 35.4
Diluted 62.0 34.8
Dividends 2003 2002
£'000 £'000
Interim paid 2.0p (2002: 1.8p) 38 42
Final proposed 5.1p (2002: 4.5p) 103 97
141 139
Consolidated statement of total recognised gains and losses
for the year ended 30 September 2003
2003 2002
£'000 £'000
Profit for the financial year 1,232 750
Unrealised surplus on revaluation of investment properties in the year
Group 55 125
Share of joint venture undertaking 52 -
______ ______
Total recognised gains and losses relating to the financial year 1,339 875
Prior year adjustment relating to accounting policy for deferred tax - (150)
______ ______
Total recognised gains and losses since last annual report 1,339 725
______ ______
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
Consolidated balance sheet
at 30 September 2003
2003 2002
£'000 £'000 £'000 £'000
Fixed assets:
Tangible assets:
Investment properties 6,135 6,080
Other 7 12
______ ______
6,142 6,092
Investments:
Investment in joint venture undertaking
Share of gross assets 15,876 12,098
Share of gross liabilities (11,065) (7,589)
______ ______
4,811 4,509
Other investments 297 368
______ ______
5,108 4,877
______ ______
11,250 10,969
Current assets
Stock and work in progress 2,894 2,451
Debtors 1,915 1,992
Cash at bank and in hand 4,404 5,086
______ ______
9,213 9,529
Creditors: amounts falling due within one year (1,045) (2,083)
______ ______
Net current assets 8,168 7,446
______ ______
Total assets less current liabilities 19,418 18,415
Creditors: amounts falling due after more than
one year (3,200) (2,560)
Provisions for liabilities and charges (552) (595)
______ ______
Net assets 15,666 15,260
______ ______
Capital and reserves
Called up share capital 403 434
Share premium account 4,817 4,815
Investment property revaluation reserve 4,259 4,152
Other reserves 2,231 2,200
Profit and loss account 3,956 3,659
______ ______
Shareholders' funds - equity 15,666 15,260
______ ______
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
Consolidated balance sheet
at 30 September 2003 (continued)
2003 2002
Pence per Pence per
share share
Net assets per share 777 704
Net assets per share before adjusting for
FRS 19 - Deferred Tax 794 715
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
Consolidated cash flow statement
for the year ended 30 September 2003
2003 2002
£'000 £'000
Cash outflow from operating activities (50) (1,328)
Returns on investment and servicing of finance 112 145
Taxation (291) (157)
Capital expenditure and financial investment 901 629
Equity dividends paid (136) (146)
______ ______
Cash inflow/(outflow) before financing 536 (857)
Financing (1,254) (1,997)
______ ______
Decrease in cash in the year (718) (2,854)
______ ______
Reconciliation of net cash flow to movement in net funds
Decrease in cash and movement in net funds in the
year resulting from cash flows (718) (2,854)
Net funds at beginning of year 1,876 4,730
______ ______
Net funds at end of year 1,158 1,876
______ ______
Reconciliation of operating profit to net cash outflow from operating
activities
Operating profit - group 409 711
Depreciation charges 2 9
Increase in stock and work in progress (443) (345)
Decrease/(increase) in debtors 79 (1,483)
Decrease in creditors and provisions (97) (220)
______ ______
Net cash outflow from operating activities (50) (1,328)
______ ______
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
Summary preliminary results
for the year ended 30 September 2003
2003 2002
£'000 £'000
Turnover 2,001 1,847
Gross rental income 2,001 1,662
Profit on ordinary activities before taxation 1,677 1,151
Taxation (445) (401)
Profit for the financial year attributable to shareholders 1,232 750
Dividend: Interim 2.0p (2002:1.8p) per share 38 42
Final 5.1p (2002: 4.5p) per share 103 97
Earnings per share: Basic 59.3 31.2
Diluted 58.1 30.7
Notes
(i) Basic earnings per share has been calculated using the weighted average
number of ordinary shares in issue during the year of 2,076,125 (2002:
2,401,174). Diluted earnings per share has been calculated in accordance
with FRS 14.
(ii) The taxation charge represents tax on profits of the year. The basis is
consistent with the financial statements for the year ended 30 September
2002. Full provision is made for deferred tax.
(iii) The board recommends that the final dividend be increased to 5.1p (2002:
4.5p) payable on 12 February 2004 to shareholders on the register at 16
January 2004, giving a total increase for the year of 13%.
(iv) The annual general meeting will be held on 13 January 2004.
(v) The financial information set out above does not constitute the company's
statutory accounts for the years ended 30 September 2003 or 2002.
Statutory accounts for 2002 have been delivered to the Registrar of
Companies and those for 2003 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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