Interim Results
Cardiff Property PLC
06 May 2004
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
FOR RELEASE 7.00 AM 6 MAY 2004
THE CARDIFF PROPERTY PLC
(The group, including Campmoss, specialises in property investment and
development in the Thames Valley. The portfolio is valued in excess of £42m.
Investment and development property is primarily located to the west of London,
close to Heathrow Airport, whilst residential development is undertaken in
Surrey and Berkshire.)
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2004
Highlights:
Six months Six months Year
31 March 31 March 30 September
2004 2003 2003
(Unaudited) (Unaudited) (Audited)
Group turnover* £'000 1,621 996 2,001
Property sales £'000 nil nil nil
Net assets per share** pence 807 732 777
Profit before tax £'000 943 546 1,677
Earnings per share pence 38.2 17.4 59.3
Interim/final dividend
per share pence 2.2 2.0 5.1
Gearing % nil nil nil
* Includes the group's share of Campmoss
** Properties not revalued at half-year
Richard Wollenberg, Chairman, commented:
'Signs of an improving economy and reports of an upturn in business activity
over the last six months have encouraged larger corporates based in the Thames
Valley to reactivate their enquiries for new office space. Shareholders should
be aware that a considerable amount of new office space in the Thames Valley
remains available for letting and I anticipate that it will be some time before
there is evidence of a recovery in rental values.'
For further information
The Cardiff Property plc Richard Wollenberg 01784 437444
Arbuthnot Securities Tim Goodman 0121 632 2100
THE CARDIFF PROPERTY PLC
(The group, including Campmoss, specialises in property investment and development in the Thames Valley.
The portfolio is valued in excess of £42m. Investment and development property is primarily located to
the west of London, close to Heathrow Airport, whilst residential development is undertaken in Surrey
and Berkshire.)
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2004
CHAIRMAN'S INTERIM STATEMENT
Dear shareholder
Signs of an improving economy and reports of an upturn in business activity over
the last six months have encouraged larger corporates based in the Thames Valley
to reactivate their enquiries for new office space. As a further sign of
confidence, a number of technology based companies have, in expectation of
renewing their previously deferred expansion plans, withdrawn surplus office
space from the market. As a consequence, new lettings have been announced but at
terms which reflect lower overall average rental and more flexible lease terms.
Shareholders should be aware that a considerable amount of new office space in
the Thames Valley remains available for letting and I anticipate that it will be
some time before there is evidence of a recovery in rental values.
A number of new office developments have been placed on hold as developers await
take up of surplus space. It should be remembered that the industry faces the
difficult task of forecasting future market conditions, as it takes on average
between two and three years to obtain planning permission and complete
construction, before the finished product is available for letting.
The low cost of borrowing continues to attract investors to the residential
property market. Values in Surrey and Berkshire, which reduced last year, have
remained unchanged in the six months under review. The market for houses at the
higher end of the range above £1 million remains quiet. Sales have taken place
but usually below the asking price. The market for new homes in the £200,000 -
£500,000 range remains active, although in most cases the timetable between
acceptance of an offer and final completion of purchase has lengthened.
As indicated in my chairman's statement accompanying the group's year end
results, your directors continued to take a cautious view of both the
residential and commercial market. Profit on ordinary activities before tax for
the six months to 31 March 2004 was £0.9m (2003: £0.5m), which included a
contribution from Campmoss Property Company Limited, our 47.62% joint venture
undertaking, of £0.6m (2003: £0.2m). Gross rental income for the half year was
£1.6m (2003: £0.9m), including our share of Campmoss of £1.2m (2003: £0.5m).
Earnings per share were 38p (2003: 17p). It should be noted, however, that the
Campmoss contribution has been increased substantially by the inclusion of a
lease surrender, details of which are described below.
Active management of the group's portfolio can bring about opportunities,
especially during the current difficult market. In October of last year,
Campmoss benefited from an agreed surrender of a lease in respect of part of the
office space at The Priory, Burnham for a cash sum of £1.35m. This amount is
payable in four equal instalments over the year, two payments of which have
already been received. The contribution from Campmoss is expected to be lower in
the future until that office space is re-let.
Dividend
Your directors have declared an increased interim dividend of 2.2p per share
(2003: 2.0p), which will be paid on 9 July 2004 to shareholders on the Register
on 11 June 2004.
Financial
At the half year net assets per share, including our share of Campmoss, totalled
807p (March 2003: 732p; September 2003: 777p). Properties are not revalued at
the half year.
The company did not buy in any of its own shares during the first half of the
year. The group's cash balances continue to be placed on short term deposit and,
where possible, set against borrowings. The company's long term borrowing
remains at £3.2m and interest charges are linked to base rate. Gearing at the
half year was nil (2003: nil).
The investment and development portfolio
The property portfolio continues to be primarily located to the west of London
and close to Heathrow Airport, whilst residential activities are confined to the
counties of Surrey and Berkshire.
At the Windsor Business Centre, which comprises six individual business units,
one of the units remains available for letting. At Cowbridge Road, Cardiff a new
lease has now been agreed with The Royal Mail for continued use as a sorting
centre and completion is expected shortly.
Our residential investment property in Windsor has been placed on the market for
sale whilst the property in Egham, which recently became vacant, is available
for letting, following minor repair works.
In respect of our residential development activity, construction at Ashleigh
House, Virginia Water, Surrey has now been completed with final preparations
currently in hand for marketing to commence. Ashleigh House received a local
architectural award which has assisted in raising the profile of the property.
At Rusham Road, Egham, construction of 4 small terraced houses is progressing
with completion expected by Autumn.
Campmoss Property Company
Campmoss continues to experience a high level of activity. As previously
mentioned the surrender of a lease on part of the office building known as The
Priory, Burnham resulted in a cash contribution of £1.35m. Major refurbishment
work has now been completed to a high standard and the space is available for
letting. Including this non-recurring item, gross rental income for the 6 months
was £2.6m (2003: £1.0m)
Campmoss retains property investments at Britannia Wharf, Woking, Globe House,
Maidenhead and Kiln Lane, Bracknell. At Highway House, Maidenhead, which was
acquired in November last year, negotiations are currently in hand with existing
tenants on short term leases to either vacate or agree new terms.
At Clivemont House, Maidenhead, planning permission has been granted for a new
45,000 sq ft office building. The property is currently let on 3 medium term
leases and therefore commencement of the redevelopment will not take place in
the short term.
At York House, Maidenhead, our 10,000 sq ft new office scheme remains available
for letting. The adjacent three, two bedroom houses, which were built as part of
the York House scheme, are currently under offer and documentation is with
solicitors.
At Gowring House and adjoining buildings in Market Street, Bracknell, we
continue to negotiate with the Local Planning Authority and have again submitted
revised plans for a residential, retail and office scheme. At Tangley Place,
Worplesdon, a further revised scheme has been submitted negotiations having
commenced some 3 years ago.
Share dealing
The share dealing facility provided by the company's registrar, Computershare
Services plc, has been extended. Computershare can be contacted on 0870 703
0084.
Outlook
The immediate outlook for the commercial and residential property markets
remains subdued. Both markets will however continue to respond positively
whilst interest rates are at, or close to, current levels. The lack of
commercial tenants for new office space in the Thames Valley will continue to
have a dampening effect on any potential office rental or capital value
recovery. The residential letting market remains competitive also constraining
rental values and capital growth.
The introduction of Stamp Development Land Tax has created a further cost for
the industry at a time when both landlords and tenants are attempting to recover
their financial and trading positions. The proposals for Property Investment
Funds ('PIFs'), based on the European and American Real Estate Investment Trusts
('REITs'), may assist investment demand in the property market, although the
usual caution needs to be expressed as detailed regulation, which inevitably
surrounds such vehicles, is awaited.
Our development and planning objectives remain at the forefront of your board's
strategy and I look forward to reporting to you in December with the year end
figures.
J Richard Wollenberg
Chairman
6 May 2004
Consolidated Profit and Loss Account
FOR THE SIX MONTHS ENDED 31 MARCH 2004
Six months Six months Year
31 March 31 March 30 September
2004 2003 2003
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Turnover
Group and share of joint venture undertaking 1,621 996 2,001
Less: share of joint venture undertaking (1,247) (502) (1,157)
______ ______ ______
Group turnover 374 494 844
Cost of sales (27) (39) (186)
______ ______ ______
Gross profit 347 455 658
Administrative expenses (234) (213) (438)
Other operating income 195 72 189
______ ______ ______
Operating profit
Group 308 314 409
Share of operating profit in joint venture
undertaking 889 398 867
______ ______ ______
Total 1,197 712 1,276
Profit on sale of other investments (group) - 25 813
Amounts written off investment (group) - (9) (4)
______ ______ ______
Profit on ordinary activities before interest 1,197 728 2,085
Interest receivable and similar income
Group 121 131 247
Share of joint venture undertaking 1 1 2
Interest payable
Group (69) (68) (137)
Share of joint venture undertaking (307) (246) (520)
______ ______ ______
Profit on ordinary activities before taxation 943 546 1,677
Tax on profit on ordinary activities
Group (100) (45) (346)
Share of joint venture undertaking (70) (130) (99)
______ ______ ______
Profit on ordinary activities after taxation
being profit for the period 773 371 1,232
Dividends (46) (38) (141)
______ ______ ______
Retained profit for the period 727 333 1,091
______ ______ ______
Earnings per share - pence
On profit for the six months
Basic 38.2 17.4 59.3
Diluted 37.6 17.1 58.1
______ ______ ______
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 2004
31 March 31 March 30 September
2004 2003 2003
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Fixed assets
Tangible assets:
Investment properties 6,135 6,080 6,135
Other 6 9 7
______ ______ ______
6,141 6,089 6,142
______ ______ ______
Investments:
Investment in joint venture undertaking
Share of gross assets 16,893 13,093 15,876
Share of gross liabilities (11,568) (8,477) (11,065)
______ ______ ______
5,325 4,616 4,811
Other investments 397 247 297
______ ______ ______
5,722 4,863 5,108
______ ______ ______
Total fixed assets 11,863 10,952 11,250
______ ______ ______
Current assets
Stock and work in progress 3,210 2,677 2,894
Debtors 3,082 2,526 1,915
Cash at bank and in hand 3,227 3,443 4,404
______ ______ ______
9,519 8,646 9,213
Creditors: amounts falling due within one year (1,203) (928) (1,045)
______ ______ ______
Net current assets 8,316 7,718 8,168
______ ______ ______
Total assets less current liabilities 20,179 18,670 19,418
Creditors: amounts falling due after more than one year (3,200) (3,200) (3,200)
Provisions for liabilities and charges (549) (569) (552)
______ ______ ______
Net assets 16,430 14,901 15,666
______ ______ ______
Capital and reserves
Called up share capital 407 407 403
Share premium account 4,850 4,815 4,817
Investment property revaluation reserve 4,259 4,152 4,259
Other reserves 2,231 2,226 2,231
Profit and loss account 4,683 3,301 3,956
______ ______ ______
Shareholders' funds - equity 16,430 14,901 15,666
______ ______ ______
Net assets per share 807p 732p 777p
Consolidated Cash Flow Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2004
Six months Six months Year
31 March 31 March 30 September
2004 2003 2003
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash outflow from operating activities (1,144) (564) (50)
Returns on investment and servicing of
finance 86 48 112
Taxation - (6) (291)
Capital expenditure and financial
investment (100) 138 901
Equity dividends paid (103) (95) (136)
______ ______ ______
Cash (outflow)/inflow before financing (1,261) (479) 536
Financing 37 (1,154) (1,254)
______ ______ ______
Decrease in cash in the six months (1,224) (1,633) (718)
______ ______ ______
Reconciliation of net cash flow to movement in net (debt)/funds
Decrease in cash and movement
in net funds in the period resulting
from cash flows (1,224) (1,633) (718)
Net funds at beginning of period 1,158 1,876 1,876
______ ______ ______
Net (debt)/funds at end of period (66) 243 1,158
______ ______ ______
Reconciliation of operating profit to net cash flow from operating activities
Operating profit - group 308 314 409
Depreciation charges 1 1 2
Increase in stock and work in progress (316) (226) (443)
(Increase)/decrease in debtors (1,167) (554) 79
Increase/(decrease) in creditors and provisions 30 (99) (97)
______ ______ ______
(1,144) (564) (50)
______ ______ ______
Notes to the Financial Statements
FOR THE SIX MONTHS ENDED 31 MARCH 2004
1 Basis of preparation
The figures for the six months ended 31 March 2004, which were approved by the
board on 5 May 2004, are prepared on the same basis of accounting as for the
year ended 30 September 2003 and are unaudited.
The figures for the year ended 30 September 2003 are extracted from the
statutory financial statements for that year which have been filed with the
Registrar of Companies and on which the auditor 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
2004 2003 2003
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Turnover (wholly in the United Kingdom)
Gross rents receivable:
Group 374 494 844
Share of joint venture undertaking 1,247 502 1,157
______ ______ ______
1,621 996 2,001
______ ______ ______
Profit on ordinary activities before interest and
taxation
Property and other investment:
Group 308 330 1,218
Share of joint venture undertaking 889 398 867
______ ______ ______
1,197 728 2,085
______ ______ ______
Net operating assets
Property and other investment 13,008 11,374 12,302
Property development 3,422 3,527 3,364
______ ______ ______
16,430 14,901 15,666
______ ______ ______
3 Taxation
The tax position for the six months is estimated on the basis of the anticipated
tax rates applying for the full year.
4 Dividends
Year Year
30 September 30 September
2004 2003
£'000 £'000
Interim 2.2p per share 46 Interim 2.0p per share 38
Final - Final 5.1p per share 103
______ ______
46 141
______ ______
The interim dividend of 2.2p per share will be paid on 9 July 2004 to
shareholders on the register on 11 June 2004.
5 Earnings per share
Earnings per share has been calculated in accordance with FRS 14 - Earnings per
Share using the profit after tax for the period of £773,000 (six months to 31
March 2003: £371,000; year to 30 September 2003: £1,232,000) and the weighted
average number of shares as follows:
Weighted average number of shares
31 March 31 March 30 September
2004 2003 2003
Basic 2,024,337 2,128,015 2,076,125
Adjustment to basic for bonus element of shares
to be issued on exercise of options
33,561 44,285 44,165
_________ _________ _________
Diluted 2,057,898 2,172,300 2,120,290
_________ _________ _________
6 Reconciliation of movements in shareholders' funds
31 March 31 March 30 September
2004 2003 2003
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
At beginning of period 15,666 15,260 15,260
Profit after tax for the period 773 371 1,232
Dividends (46) (38) (141)
Revaluation of investment properties - - 107
Share options exercised in period:
Increase in share capital 4 - -
Increase in share premium 33 - 2
Own shares purchased in period - (692) (794)
______ ______ ______
At end of period 16,430 14,901 15,666
______ ______ ______
Financial Calendar
2004 6 May Interim results for 2004 announced
9 June Ex-dividend date for interim dividend
11 June Record date for interim dividend
9 July Interim dividend to be paid
30 September End of accounting year
December Final results for 2004 announced
2005 January Annual general meeting
February Final dividend to be paid
Directors and Advisers
Directors Auditor
J Richard Wollenberg, KPMG Audit Plc
Chairman and chief executive
David A Whitaker FCA
Nigel D Jamieson BSc, MRICS, FSI, Stockbrokers and financial advisers
Independent non-executive director Arbuthnot Securities Ltd
Secretary Bankers
David A Whitaker FCA HSBC Bank plc
Non-executive director of wholly owned subsidiary Solicitors
First Choice Estates plc Charles Russell
Derek M Joseph BCom, FCIS, MIMC, MBIM Morgan Cole
Head office Registrar and transfer office
56 Station Road Computershare Services plc
Egham PO Box 82
Surrey TW20 9LF The Pavilions
Telephone: 01784 437444 Bridgewater Road
Fax: 01784 439157 Bristol BS99 7NH
E-mail: webmaster@cardiff-property.com Telephone: 0870 702 0001
Web: www.cardiff-property.com
Registered office Registered number
Marlborough House 22705
Fitzalan Court
Fitzalan Road
Cardiff CF24 0TE
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