Final Results

Cardiff Property PLC 26 November 2004 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES FOR RELEASE 7.00 AM 26 NOVEMBER 2004 The group, including Campmoss, specialises in property investment and development in the Thames Valley. The portfolio, valued in excess of Â£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 2004 HIGHLIGHTS Group turnover Â£2.7m (2003: Â£2.0m) Development property sales Â£nil (2003: Â£nil) Net asset value per share 895p (2003: 777p) + 15% Profit before tax Â£1.8m (2003: Â£1.7m) + 5% Earnings per share 80.2p (2003: 59.3p) + 35% Total dividend for the year 8.0p per share (2003: 7.1p) + 13% Final dividend 5.8p per share (2003: 5.1p) Gearing nil (2003: nil) Richard Wollenberg, chairman, commented: 'The demand for new and second hand office space in the Thames Valley is looking healthier than for some time. Despite uncertain markets, the group, including Campmoss, has seen a further increase in asset value per share. The new office lettings market in the Thames Valley will remain competitive over the coming year.' For further information: The Cardiff Property plc Richard Wollenberg 01784 437444 Arbuthnot Securities Richard Dunn 020 7012 2000 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 Â£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 2004 Chairman's Statement Dear shareholder The demand for new and second hand office space in the Thames Valley is looking healthier than for some time, although the number of completed transactions being reported has been minimal. The general level of activity and number of new viewings by prospective tenants has increased but uncertainty surrounding the UK economy and future interest rate levels has resulted in companies and their executives taking much longer to make positive decisions and conclude transactions. Headline rental levels for new office space, which on the basis of reported lettings fell by up to 20% over the past 2 years, are now showing marginal improvement. However, incentives such as longer rent free periods, contribution to fitting out costs and the options for tenant only breaks are becoming more common in order to complete transactions. Further, the length of lease, encouraged by government and the market difficulties, has reduced from an historic 20 year term to 10-15 years. Inevitably these changes have generally had the effect of reducing investment values of completed and let buildings. As always, location, quality of space and adequate car parking facilities remain key factors in attracting business tenants. It is noticeable that a number of new office development schemes remain on hold awaiting further take up of existing vacant space. As reported below, a number of second hand office buildings which have remained unlet for some time are, potentially, reverting to residential use. The granting of planning permissions continues to remain a difficult and lengthy process. Although interest rates have increased during the year, demand for commercial property investments let on long term leases and to good covenants remains strong as private and institutional investors increase their portfolio weighting towards the sector. Reflecting this market strength, our investment property at St Leonard's Road, Windsor was sold during the latter part of the year following receipt of an offer substantially above book value. Although the company's largest income producing freehold commercial property, your directors considered that the premium over book value and the yield achieved presented a good opportunity to sell. Shareholders should note that it will be difficult to replace the lost investment income in the short term. In Surrey and Berkshire the residential market especially for new homes above the Â£1 million level is experiencing a slowdown and sales are taking much longer to conclude. The market remains quite healthy at values of between Â£300k and Â£500k. Over the year, as a result of reduced activity, sale prices of new and existing houses have shown a fall of around 5% and a further small decline is predicted over the next 12 months. Despite these uncertain markets the group, including Campmoss Property Company Limited, our 47.62% joint venture undertaking, has seen a further increase in asset value per share together with increased profitability. For the year to 30 September 2004, pre-tax profit was Â£1.76m (2003: Â£1.68m), including a contribution from Campmoss of Â£0.81m (2003: Â£0.35m). Turnover totalled Â£2.68m (2003: Â£2.00m) representing gross rental income of Â£2.04m (2003: Â£2.00m) and the group's share of a lease surrender in Campmoss detailed below of Â£0.64m (2003: Â£nil). The disposal of the company's freehold property at St Leonard's Road, Windsor was completed in the second half of the year and contributed Â£0.46m to pre-tax profits. Net profit attributable to shareholders amounted to Â£1.54m (2003: Â£1.23m) and earnings per share was 80.2p (2003: 59.3p). Dividend The directors are recommending a final dividend of 5.8p per share (2003: 5.1p) making a total dividend for the year of 8.0p (2003: 7.1p) an increase of 12.7%. The final dividend will be paid on 10 February 2005 to shareholders on the register on 21 January 2005. Financial The group's commercial and residential investment portfolio, valued annually by Cushman & Wakefield Healey & Baker and Aitchison Raffety respectively totalled Â£3.94m. It should be remembered this year's figure excludes the office investment at Windsor which was sold during the year. The portfolio value excludes property in the course of development which is held as stock in the balance sheet at the lower of cost or market value. Gross assets of the group totalled Â£16.88m (2003: Â£20.46m) including our share of the net assets of Campmoss of Â£5.49m (2003: Â£4.81m). The total property portfolio under management at the year end, including Campmoss, was valued at Â£40.10m. Net assets were Â£15.55m (2003: Â£15.67m) equivalent to 895p per share (2003: 777p), an increase of 15.2%. Following the sale of 25 St Leonard's Road, Windsor the company's long term borrowings were repaid and cash balances placed on short term deposit. Bank borrowing facilities remain in place and, together with cash balances, remain available for completion of the group's development programme as well as making further acquisitions. During the year the company purchased for cancellation 300,200 ordinary shares for a total cost of Â£2.01m at prices ranging between 633p and 665p. Your directors intend to continue the policy of acquiring shares at a substantial discount to their underlying value where possible and the annual renewal of the directors' authority will be placed before shareholders at the annual general meeting to be held on 13 January 2005. Any shares so purchased will be held in treasury or cancelled. The group's financial position remains strong with nil gearing. Commercial investments The group's investment portfolio continues to be primarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire. At the Windsor Business Centre, a development of 6 small business units, one unit remains available for letting or sale. Heads of terms are currently being negotiated for a freehold sale of that unit. The office and retail units at The White House and Heritage Court, Egham are all let on medium term leases. At Cowbridge Road, Cardiff, following protracted negotiations, a new lease has been agreed with the Royal Mail. The year end valuation for these properties has shown an increase in capital value in excess of 12%. Residential During the year our residential development at Ashleigh House, Virginia Water, Surrey was completed and the property placed on the market for sale. As you will see from the inside cover of this report, particular attention has been given to constructing an attractive and high quality 5 bedroom 5 bathroom individual house which, as a result, received a local architectural award. We are confident of achieving a sale, although as mentioned earlier, the market for such houses is, for the moment, subdued. At Rusham Road, Egham, construction of 4 small terraced houses has just been completed and 1 of the units is currently under offer. Our residential properties at Egham and Windsor, following minor refurbishment, have been let on annual tenancies. Campmoss Property Company Limited As mentioned at the half year, our joint venture undertaking, Campmoss, has been very active although progress is partially restrained by the difficulty in obtaining specific planning permissions. At the year end the portfolio which includes freehold office buildings at Maidenhead, Woking, Burnham, Worplesdon and Bracknell has been valued by the directors, taking account of external advice where available and assessed at a current market value of Â£32.74m (2003: Â£31.22m). Ongoing rental income which is primarily from well established companies on medium to long term full repairing and insuring leases is currently in excess of Â£2.74m (2003: Â£2.43m) per annum. Total rental income for the year of Â£4.09m (2003: Â£2.43m) included Â£1.35m in respect of a lease surrender. Activity during the year included a reverse premium on an agreed surrender of a lease in respect of part of the office space at The Priory, Burnham as detailed above. Following substantial refurbishment, part of that accommodation has now been relet and negotiations are currently taking place with regard to a considerable proportion of the remainder. At our new 10,000 sq ft freehold office building at York Road, Maidenhead, negotiations are currently taking place to let the whole building. The three adjoining long leasehold cottages were sold during the year. At Highway House, Maidenhead, acquired in December 2003, three floors of the four storey building have been refurbished. One of the original tenants renewed their lease on a short term basis. The remainder of the 10,500 sq ft building is now available to be let on a floor by floor basis or as individual suites. The difficulties in obtaining viable planning consents are illustrated by lengthy consultations in respect of our properties at Worplesdon, Guildford and Bracknell, Berkshire. At Worplesdon negotiations have reflected the uncertain office market and a revised scheme for residential use is now being proposed. At Market Street, Bracknell our planning application includes residential, retail and office space and remains under negotiation. Part of the existing office and retail space has been let on a short term basis. At the year end Campmoss had net borrowings totalling Â£17.41m (2003: Â£18.00m). Gearing was 151% (2003: 178%). Quoted investments The company has retained its small equity portfolio which includes Tribal Group plc, The Celltalk Group plc, IFX Group plc and General Industries plc. The market value of these investments remains in excess of carrying value. I remain a director of Celltalk and General Industries, both of which are quoted on AIM. Management and staff The property market continues to be difficult and challenging and I therefore wish to take this opportunity of thanking all members of the group including our joint venture partners, for their efforts in achieving a solid performance over the current year. Shareholders telephone dealing service A number of shareholders have taken advantage of the company's low commission share dealing facility provided by the company's registrars, Computershare Investor Services plc. As an extension of this service the company is continuing its free share sale service to those shareholders who wish to dispose of holdings of 1,000 shares or less. Shareholders should be aware that these services 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. Post balance sheet events In October, Campmoss acquired a vacant 10,000 sq ft office building located on the outskirts of Datchet, Berkshire close to the M4 motorway. Following discussions with the local authority a planning application is to be submitted to demolish the existing building and replace it with a new residential scheme. Outlook The new office lettings market in the Thames Valley will continue to remain competitive over the coming year. However, the number of enquiries for new high grade office space have improved remarkably over the past two months which could be a prelude to increased activity. In the event that this leads to transactions being completed, marginal increases in rental levels should result. The Thames Valley residential market will continue to be affected by reduced numbers of sales being reported. In Surrey and Berkshire the number of new homes available for sale will remain limited as a result of the lengthy and difficult process of achieving new residential planning permissions. Consequently any substantial decline in selling prices should be limited. New lettings and the granting of planning permissions are important to the future growth of the group and I remain confident that our objectives will be achieved. In the meantime our portfolio of freehold commercial investment properties, located in prime areas of the Thames Valley, will provide a secure stream of rental income. The group is well placed to take advantages of any opportunities in the marketplace. Despite the challenges, I look forward to reporting further progress to shareholders with the interim figures in May 2005. J Richard Wollenberg Chairman 25 November 2004 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES Consolidated profit and loss account for the year ended 30 September 2004 2004 2003 Â£'000 Â£'000 Turnover Group and share of joint venture undertaking 2,679 2,001 Less: share of joint venture undertaking (1,948) (1,157) ______ ______ Group turnover 731 844 Cost of sales (93) (186) ______ ______ Gross profit 638 658 Administrative expenses (471) (438) Other operating income 316 189 ______ ______ Operating profit Group 483 409 Share of operating profit in joint venture undertaking 1,387 867 ______ ______ Total: group and share of joint venture undertaking 1,870 1,276 Profit on sale of investment property (group) 460 - Profit on sale of investment property (share of joint venture undertaking) 31 - Profit on sale of other investments (group) - 813 Amounts written off investments (group) (86) (4) ______ ______ Profit on ordinary activities before interest 2,275 2,085 Interest receivable and similar income Group 240 247 Share of joint venture undertaking 3 2 Interest payable Group (152) (137) Share of joint venture undertaking (608) (520) ______ ______ Profit on ordinary activities before taxation 1,758 1,677 Tax on profit on ordinary activities Group (86) (346) Share of joint venture undertaking (132) (99) ______ ______ Profit on ordinary activities after taxation being profit for the financial year 1,540 1,232 Dividends (140) (141) ______ ______ Retained profit for the financial year 1,400 1,091 ======== ======== The above results relate entirely to continuing activities. There were no acquisitions or disposals of businesses during the year. Earnings per share 2004 2003 Pence per Pence per share share On profit for the financial year Basic 80.2 59.3 Diluted 78.7 58.1 ==== ==== Dividends 2004 2003 Â£'000 Â£'000 Interim paid 2.2p (2003: 2.0p) 46 38 Reduction in interim dividend following redemption of own shares (7) - Final proposed 5.8p (2003: 5.1p) 101 103 ---- ---- Total per share 8.0p (2003: 7.1p) 140 141 ==== ==== THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES Consolidated statement of total recognised gains and losses for the year ended 30 September 2004 2004 2003 Â£'000 Â£'000 Profit for the financial year 1,540 1,232 Unrealised surplus on revaluation of investment properties in the year Group 450 55 Share of joint venture undertaking - 52 ______ ______ Total recognised gains and losses relating to the financial year 1,990 1,339 ======== ======== THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES Consolidated balance sheet at 30 September 2004 2004 2003 Â£'000 Â£'000 Â£'000 Â£'000 Fixed assets: Tangible assets: Investment properties 3,935 6,135 Other 5 7 ______ ______ 3,940 6,142 Investments: Investment in joint venture undertaking Share of gross assets 16,651 15,876 Share of gross liabilities (11,159) (11,065) ______ ______ 5,492 4,811 Other investments 311 297 ______ ______ 5,803 5,108 ______ ______ 9,743 11,250 Current assets Stock and work in progress 3,423 2,894 Debtors 2,369 1,915 Cash at bank and in hand 1,349 4,404 ______ ______ 7,141 9,213 Creditors: amounts falling due within one year (923) (1,045) ______ ______ Net current assets 6,218 8,168 ______ ______ Total assets less current liabilities 15,961 19,418 Creditors: amounts falling due after more than one year - (3,200) Provisions for liabilities and charges (413) (552) ______ ______ Net assets 15,548 15,666 ======== ======== Capital and reserves Called up share capital 347 403 Share premium account 4,850 4,817 Investment property revaluation reserve 4,261 4,259 Other reserves 2,291 2,231 Profit and loss account 3,799 3,956 ______ ______ Shareholders' funds - equity 15,548 15,666 ======== ======== 2004 2003 Pence per Pence per share share Net assets per share 895 777 === === THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES Consolidated cash flow statement for the year ended 30 September 2004 2004 2003 Â£'000 Â£'000 Cash outflow from operating activities (512) (50) Returns on investment and servicing of finance 127 112 Taxation (361) (291) Capital expenditure and financial investment 3,010 901 Equity dividends paid (142) (136) ______ ______ Cash inflow before financing 2,122 536 Financing (5,168) (1,254) ______ ______ Decrease in cash in the year (3,046) (718) ======== ======== Reconciliation of net cash flow to movement in net funds Decrease in cash in the year (3,046) (718) Bank loan repaid 3,200 - ______ ______ Increase/(decrease) in net funds 154 (718) Net funds at beginning of year 1,158 1,876 ______ ______ Net funds at end of year 1,312 1,158 ======== ======== Reconciliation of operating profit to net cash outflow from operating activities Operating profit - group 483 409 Depreciation charges 2 2 Increase in stock and work in progress (529) (443) (Increase)/decrease in debtors (454) 79 Decrease in creditors and provisions (14) (97) ______ ______ Net cash outflow from operating activities (512) (50) ======== ======== THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES Summary preliminary results for the year ended 30 September 2004 2004 2003 Â£'000 Â£'000 Turnover 2,679 2,001 Profit on ordinary activities before taxation 1,758 1,677 Taxation (218) (445) Profit for the financial year attributable to shareholders 1,540 1,232 Dividend: Interim 2.2p (2003: 2.0p) per share 39 38 Final 5.8p (2003: 5.1p) per share 101 103 Earnings per share: Basic 80.2 59.3 Diluted 78.7 58.1 Notes 1) Basic earnings per share has been calculated using the weighted average number of ordinary shares in issue during the year of 1,920,304 (2003: 2,076,125). Diluted earnings per share has been calculated in accordance with FRS 14. 2) The taxation charge represents tax on profits of the year. The basis is consistent with the financial statements for the year ended 30 September 2003. Full provision is made for deferred tax. 3) The board recommends that the final dividend be increased to 5.8p (2003: 5.1p) payable on 10 February 2005 to shareholders on the register at 21 January 2005, giving a total increase for the year of 13%. 4) The annual general meeting will be held on 13 January 2005. 5) The financial information set out above does not constitute the company's statutory accounts for the years ended 30 September 2004 or 2003. Statutory accounts for 2003 have been delivered to the Registrar of Companies and those for 2004 will be delivered following the company's annual general meeting. The financial information for 2004 has been prepared under the same accounting policies as those used in 2003. The auditor has reported on those accounts; their reports were unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. 6) A copy of the report and accounts will be submitted to the document viewing facility at the Financial Services Authority. 7) This statement was approved by the directors on 25 November 2004. This information is provided by RNS The company news service from the London Stock Exchange

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