Interim Results
Cardiff Property PLC
19 May 2003
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
FOR RELEASE 7.00 AM 19 MAY 2003
THE CARDIFF PROPERTY PLC
(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.)
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2003
Highlights:
* Group turnover £1.0m (2002: £1.0m)*
* Development property sales £0.05m (2002: £0.20m)
Net assets per share:
* Excluding FRS 19 - 747p (2002: 691p)**
* Including FRS 19 - 732p (2002: 681p)
* Profit before tax £0.5m (2002: £0.8m)
Earnings per share:
* Excluding FRS 19 - 20p (2002: 24p)
* Including FRS 19 - 17p (2002: 21p)
* Interim dividend 2.0p per share (2002: 1.8p)
* Gearing nil (2002: nil)
* Includes the group's share of Campmoss
** Properties not re-valued at half-year
Net assets per share 30 September 2002 excluding FRS 19 - 715p
Richard Wollenberg, chairman, commented:
'The property market remains subdued but your directors are of the view that the
current imbalance between the supply and demand for offices will eventually
rectify itself with the gradual reduction in the new development pipeline
leading to greater stability in the market place. Residential values will also
remain under pressure whilst the economic outlook continues to be uncertain.'
For further information
The Cardiff Property plc Richard Wollenberg 01784 437444
Arbuthnot Securities Ltd Susan Brice 0121 710 4500
Beattie Financial Brian Coleman-Smith 020 7398 3300
THE CARDIFF PROPERTY PLC
(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.)
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2003
CHAIRMAN'S INTERIM STATEMENT
Dear shareholder
Against an uncertain economic background occupier demand has continued to
decline and over the last 6 months new office lettings in the Thames Valley have
been minimal. It is therefore not surprising that rental levels for new offices
have fallen over that period by at least 10%, although the lack of transactional
evidence makes it difficult to ascertain the extent of the decline.
As demonstrated by our major letting in Maidenhead, new and well located high
grade office space with good car parking facilities is still in demand. However,
overall vacancy rates have increased primarily as a result of space becoming
surplus to existing occupiers requirements. It is important to note that with no
apparent sign of a significant turnaround in the economy approximately 30% of
Grade A office space currently available is entirely attributable to occupiers
either downsizing or curtailing their expansion plans. The Thames Valley office
market is highly reliant on the technology and telecommunications sectors which
for the moment remain reluctant to expand their operations.
Landlords have responded to these market conditions by offering rent free
periods, capital incentives and flexibility of lease terms. This inevitably
affects capital values although when markets recover landlords should benefit
from early lease breaks.
An encouraging sign is the strength of rental levels for industrial and small
office business units, particularly those close to Heathrow, which have remained
far more resilient than the general market. There is still a healthy demand from
small and start up businesses.
High running yields from commercial property and the low cost of borrowing
continue to attract institutional as well as debt financed private and overseas
based investors, enabling the investment market to remain robust.
Residential values in Surrey and Berkshire have fallen primarily as a result of
reduced activity. This is particularly evident for homes in excess of £1m. New
detached homes and flats which typically range between £200,000 and £500,000
remain in demand and price levels are proving resilient to the quiet market
conditions.
Your directors took a cautious view of the property market at the beginning of
last year and, as expected, profit on ordinary activities before taxation for
the six months to 31 March 2003, was lower at £0.55m (2002: £0.83m). This
includes a contribution of £0.15m (2002: £0.13m) from Campmoss Property Company,
our 47.62% joint venture undertaking.
Cardiff benefited from an overage payment received following a successful
planning outcome, the sale of its remaining shareholding in Grantchester
Holdings PLC, and increases in rent following reviews at commercial property in
Egham. The increased contribution from Campmoss resulted from rental income
following the letting of Cannon Court, Maidenhead, partially offset by interest
on additional long term borrowings which are being used to complete the
development programme.
Gross rental income for the half year was £0.95m (2002: £0.79m) including our
share of Campmoss Property of £0.50m (2002: £0.41m). Earnings per share were 17p
(2002: 21p).
Dividend
Your directors have declared an increased interim dividend of 2p per share
(2002: 1.8p) which will be paid on 10 July 2003 to shareholders on the register
on 13 June 2003.
Financial
The group's property portfolio is valued annually at the September year end. Net
assets at the half year ending 31 March 2003 including our share of Campmoss,
before adjusting for FRS 19 - Deferred Tax, totalled £15.20m (2002: £15.98m)
equivalent to 747p per share (March 2002: 691p September 2002: 715p). After
accounting for FRS 19, net assets were £14.90m (2002: £15.76m) equivalent to
732p per share (March 2002: 681p September 2002: 704p). During the first half of
the year the company purchased 134,000 ordinary shares for cancellation at
prices between 511p and 517p for a total consideration of £692,000.
The group's cash balances are placed on short and medium term deposits and where
possible set against medium term borrowings. The group's bank borrowing
facilities have been renewed. Long term borrowings remain at £3.2m and are
linked to Base Rate. Gearing at the half year was nil (2002: nil).
The investment and development portfolio
The property portfolio includes commercial buildings in Windsor, Egham and
Cardiff. Residential investments are located in Windsor and Egham.
Gross annual rental income from these properties, which are primarily let on
full repairing and insuring leases, totals £826,000. Two new lettings are taking
place at the Windsor Business Centre replacing original tenancy agreements.
Our two residential sites at Englefield Green and Egham are currently under
development.
At Ashleigh Lodge, Englefield Green, Surrey the development of a 4,800 sq ft 5
bedroom executive house progresses in accordance with the anticipated timetable
and to budget. The completed scheme is expected to be placed on the market for
sale towards the end of the year.
At Rusham Road, Egham, Surrey the development of 4 terraced houses has
commenced. The completed units are expected to be available for sale at the
beginning of next year.
The value of our quoted investment portfolio continues to show a surplus over
cost. In December last year our shareholding in Grantchester Holdings PLC was
sold following a cash offer.
Campmoss Property Company
Campmoss retains as investments high grade office property at Britannia Wharf,
Woking; The Priory, Burnham; Globe House, Maidenhead and twelve business units
at Kiln Lane, Bracknell. These properties developed by Campmoss are let on
medium to long term institutional leases and produce a gross income of £2.40m
per annum, a substantial increase over last year.
In February this year the company announced the successful letting of Cannon
Court, Maidenhead, now renamed Globe House, to SDL plc for a term of 15 years,
at an average annual rental, including a rent free period, of £664,000 per annum
over the first five year term. The lease includes a break clause after 10 years.
This investment will be revalued by the directors of Campmoss at the September
2003 year end.
At York House, Maidenhead the development of a new 10,000 sq ft high grade
office building is well advanced and letting agents have been appointed. York
House is constructed on 3 floors and can be let to one or more tenants. In the
current market conditions suitable lettings may take time to complete. Adjacent
to the building three, two-bedroomed houses have been constructed and selling
agents have been appointed.
Further discussions with Local Planning Authorities have resulted in revised
planning applications being submitted for our properties at Gowring House,
Bracknell and Tangley Place, Worplesdon. Gowring House remains partially let on
short term leases.
Acquisitions remain on the agenda and negotiations are currently taking place
for the purchase of commercial property at Maidenhead and Bracknell. Both
properties are adjacent to our existing holdings in those locations. Borrowing
facilities have been arranged to cover these new acquisitions.
Share dealing
A number of individuals with small shareholdings have taken advantage of the low
commission share dealing facility provided by the company's registrar
Computershare Services plc. This facility remains available. Computershare can
be contacted on 0870 703 0084.
Outlook
The property market remains subdued but your directors are of the view that the
current imbalance between the supply and demand for offices will eventually
rectify itself with the gradual reduction in the new development pipeline
leading to greater stability in the market place. Residential values will also
remain under pressure whilst the economic outlook continues to be uncertain.
I look forward to reporting to you in December with the year end figures.
J Richard Wollenberg
Chairman
19 May 2003
Consolidated Profit and Loss Account
FOR THE SIX MONTHS ENDED 31 MARCH 2003
Six months Six months Year
31 March 31 March 30 September
2003 2002 2002
(Unaudited) (Unaudited) (Audited)
(Restated
- Note 1)
£'000 £'000 £'000
Turnover
Group and share of joint 996 977 1,847
venture undertaking
Less: share of joint venture (502) (408) (857)
undertaking
______ ______ ______
Group turnover 494 569 990
Cost of sales (39) 31 (55)
______ ______ ______
Gross profit 455 600 935
Administrative expenses (213) (178) (416)
Other operating income 72 107 192
______ ______ ______
Operating profit
Group 314 529 711
Share of operating profit in 398 316 617
joint venture undertaking
______ ______ ______
Total 712 845 1,328
Profit on sale of investment - 249 240
property (group)
Profit on sale of other 25 16 62
investments (group)
Amounts written off (9) (187) (204)
investment (group)
______ ______ ______
Profit on ordinary activities 728 923 1,426
before interest
Interest receivable and
similar income
Group 131 160 315
Share of joint venture 1 3 5
undertaking
Interest payable
Group (68) (75) (159)
Share of joint venture (246) (186) (436)
undertaking
______ ______ ______
Profit on ordinary activities 546 825 1,151
before taxation
Tax on profit on ordinary (175) (296) (401)
activities
______ ______ ______
Profit on ordinary activities
after taxation being profit
for the period
371 529 750
Dividends (38) (42) (139)
______ ______ ______
Retained profit for the 333 487 611
period
______ ______ ______
Earnings per share - pence
Before adjusting for FRS 19 -
Deferred Tax
Basic 19.8 23.8 35.4
Diluted 19.4 23.4 34.8
______ ______ ______
After adjusting for FRS 19 -
Deferred Tax
Basic 17.4 21.0 31.2
Diluted 17.1 20.6 30.7
______ ______ ______
The above results relate entirely to continuing activities. There were no
acquisitions or disposals of businesses during the period.
Consolidated Balance Sheet
AT 31 MARCH 2003
31 March 31 March 30 September
2003 2002 2002
(Unaudited) (Unaudited) (Audited)
(Restated -
Note 1)
£'000 £'000 £'000
Fixed assets
Tangible assets:
Investment properties 6,080 5,955 6,080
Other 9 4 12
______ ______ ______
6,089 5,959 6,092
______ ______ ______
Investments:
Investment in joint venture
undertaking
Share of gross assets 13,093 11,680 12,098
Share of gross liabilities (8,477) (7,209) (7,589)
______ ______ ______
4,616 4,471 4,509
Other investments 247 385 368
______ ______ ______
4,863 4,856 4,877
______ ______ ______
Total fixed assets 10,952 10,815 10,969
______ ______ ______
Current assets
Stock and work in progress 2,677 2,169 2,451
Debtors 2,526 1,146 1,992
Cash at bank and in hand 3,443 6,419 5,086
______ ______ ______
8,646 9,734 9,529
Creditors: amounts falling due (928) (920) (2,083)
within one year
______ ______ ______
Net current assets 7,718 8,814 7,446
______ ______ ______
Total assets less current 18,670 19,629 18,415
liabilities
Creditors: amounts falling due (3,200) (3,200) (2,560)
after more than one year
Provisions for liabilities and (569) (671) (595)
charges
______ ______ ______
Net assets 14,901 15,758 15,260
______ ______ ______
Capital and reserves
Called up share capital 407 463 434
Share premium account 4,815 4,815 4,815
Investment property revaluation 4,152 4,027 4,152
reserve
Other reserves 2,226 2,170 2,200
Profit and loss account 3,301 4,283 3,659
______ ______ ______
Shareholders' funds - equity 14,901 15,758 15,260
______ ______ ______
Net assets per share
before adjusting for FRS 19 - 747p 691p 715p
Deferred Tax
after adjusting for FRS 19 - 732p 681p 704p
Deferred Tax
Consolidated Cash Flow Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2003
Six months Six months Year
31 March 31 March 30 September
2003 2002 2002
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash (outflow) from (564) (345) (1,328)
operating activities
Returns on investment
and servicing of
finance
48 88 145
Taxation (6) - (157)
Capital expenditure and
financial
investment 138 556 629
Equity dividends paid (95) (104) (146)
______ ______ ______
Cash (outflow)/inflow (479) 195 (857)
before financing
Financing (1,154) (1,711) (1,997)
______ ______ ______
(Decrease) in cash in (1,633) (1,516) (2,854)
the six months ______ ______ ______
Reconciliation of net cash flow to movement
in net funds
(Decrease) in cash and
movement
in net funds in the period
resulting
from cash flows (1,633) (1,516) (2,854)
Net funds at beginning of 1,876 4,730 4,730
period
______ ______ ______
Net funds at end of 243 3,214 1,876
period
______ ______ ______
Reconciliation of operating profit to net cash flow from
operating activities
Operating profit - group 314 529 711
Depreciation charges 1 3 9
(Increase) in stock and (226) (63) (345)
work in progress
(Increase) in debtors (554) (600) (1,483)
(Decrease) in creditors (99) (214) (220)
and provisions
______ ______ ______
(564) (345) (1,328)
______ ______ ______
Notes to the Financial Statements
1 Basis of preparation
The figures for the six months ended 31 March 2003, which were approved by the
board on 16 May 2003, are prepared on the same basis of accounting as for the
year-ended 30 September 2002 and are unaudited. The comparative figures for the
six months ended 31 March 2002 have been restated to show the effects of FRS 19
- Deferred Tax.
The figures for the year-ended 30 September 2002 are extracted from the
statutory financial statements for that year which have been filed with the
Registrar of Companies and on which the auditors gave an unqualified report,
without any statement under section 237(2) or (3) of the Companies Act 1985.
2 Analysis of turnover, profit on ordinary activities before interest and
taxation and net operating assets
Six months Six months Year
31 March 31 March 30 September
2003 2002 2002
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Turnover (wholly in the United
Kingdom):
Gross rents receivable
Group 444 384 805
Share of joint venture 502 408 857
undertaking
Sale of development properties
Group 50 185 185
______ ______ ______
996 977 1,847
______ ______ ______
Profit on ordinary activities
before interest and taxation:
Property and other investment
Group 280 422 324
Share of joint venture 398 316 617
undertaking
Property development
Group 50 185 485
______ ______ ______
728 923 1,426
______ ______ ______
Net operating assets:
Property and other investment 11,374 11,626 11,841
Property development 3,527 4,132 3,419
______ ______ ______
14,901 15,758 15,260
______ ______ ______
3 Taxation
The tax position for the six months is estimated on the basis of the anticipated
tax rates applying for the full year.
Notes to the Financial Statements
(continued)
4 Dividends
Year Year
30 September 30 September
2003 2002
£'000 £'000
Interim 2.0p per 38 Interim 1.8p per 42
share share
Final - Final 4.5p per share 97
______ ______
38 139
______ ______
The interim dividend of 2.0p per share will be paid on 10 July 2003 to
shareholders on the register on 13 June 2003.
5 Earnings per share
Earnings per share have been calculated in accordance with FRS 14 - Earnings per
share using the profit after tax for the period before accounting for FRS 19 -
Deferred tax of £422,000 (six months to 31 March 2002: £601,000; year to 30
September 2002: £850,000) and after accounting for FRS 19 - Deferred Tax of
£371,000 (six months to 31 March 2002: £529,000; year to 30 September 2002:
£750,000) and the weighted average number of shares as follows:
Weighted average number of shares
31 March 31 March 30 September
2003 2002 2002
Basic 2,128,015 2,523,280 2,401,174
Adjustment to basic for bonus element
of shares to be issued on exercise of
options
44,285 43,768 44,338
_________ _________ _________
Diluted 2,172,300 2,567,048 2,445,512
_________ _________ _________
6 Reconciliation of movement in shareholders' funds
31 March 31 March 30 September
2003 2002 2002
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
At beginning of period 15,260 17,032 17,032
Prior year adjustment - (150) (150)
______ ______ ______
15,260 16,882 16,882
Profit after tax for the 371 529 750
period
Dividends (38) (42) (139)
Revaluation of investment - - 125
properties
Own shares purchased in (692) (1,611) (2,358)
period
______ ______ ______
At end of period 14,901 15,758 15,260
______ ______ ______
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