Interim Results
Cardiff Property PLC
19 May 2006
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
FOR RELEASE 7.00 AM 19 MAY 2006
THE CARDIFF PROPERTY PLC
(The group, including Campmoss, specialises in property investment and
development in the Thames Valley. The portfolio, valued in excess of £34m, 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 2006
Highlights:
Six months Six months Year
31 March 31 March 30 September
2006 2005 2005
IFRS IFRS IFRS
(Unaudited) (Unaudited)* (Unaudited)*
Group revenue £'000 259 1,364 1,672
Property sales £'000 - 1,113 1,113
Net assets per share* pence 1,006 850 990
Profit before tax £'000 452 1,023 3,201
Earnings per share pence 20.7 53.1 193.6
Interim/final dividend pence 2.75 2.5 9.0
per share
Gearing % nil nil nil
* Figures restated for IFRS
** Properties not revalued at half year
Richard Wollenberg, Chairman, commented:
'A healthy increase in tenant demand across all sectors of the property market
in the Thames Valley has been evident over the last six months. The group's
property portfolio continues to focus within the area known as The Golden
Triangle namely to the west of London and close to Heathrow Airport. Residential
activities are confined to the counties of Surrey and Berkshire. Interest rates
continue to remain at current low levels and there is a renewed confidence in
the property market as a whole.'
For further information:
The Cardiff Property plc Richard Wollenberg 01784 437444
Arbuthnot Securities Richard Dunn 020 7012 2000
THE CARDIFF PROPERTY PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2006
CHAIRMAN'S INTERIM STATEMENT
Dear shareholder
A healthy increase in tenant demand across all sectors of the property market in
the Thames Valley has been evident over the last six months.
A number of lettings of Grade A office buildings situated to the West of London
have been successfully concluded indicating a marginal increase in headline rent
levels. Landlords' incentives are, however, still an important feature of any
transaction and currently represent a concession of up to 10% over the first
five years of the lease term. The average period for new leases is between 5 and
15 years and often includes a tenant's break after 5 or 10 years. These are all
welcoming features but shareholders should appreciate that although confidence
is gradually returning, the market place for new lettings remains fragile. As
always, a prospective tenant or purchaser will require a well located building,
a high quality of construction and the availability of good car parking
facilities.
The level of interest for purpose built business units and industrial premises
to the west of Heathrow has remained reasonably buoyant with rental levels
unchanged. Lettings close to the airport, primarily in the logistics sector,
indicate a marginal increase in rental levels.
The commercial property investment market, dominated by UK and overseas
institutions as well as private investors, remains very active. Individual
institutions have increased their weightings towards this sector and, with the
real prospect of rental growth, investment values are expected to remain firm.
The increasing number of owner occupiers acquiring their own freeholds rather
than renting has contributed to the strength of the market place.
The Thames Valley residential market has recently experienced an upturn in the
number of viewings by prospective purchasers and it will be interesting to see
if, during the year, this translates into actual sales. Property values have
remained similar to last year although with the continued difficulty and length
of time taken to obtain a planning permission, the availability of new stock
will always be in short supply.
Dividend
The directors have declared an increased interim dividend of 2.75p per share
(March 2005: 2.5p; September 2005: 9.0p) which will be paid on 7 July 2006 to
shareholders on the register on 9 June 2006.
Financial
The consolidated results for the six months ended 31 March 2006 are the first to
be prepared by the group under applicable International Financial Reporting
Standards adopted by the European Union ('IFRS') which have been adopted and
incorporated into the principal accounting policies as set out in note 2. From 1
January 2005, all listed companies traded on a regulated market in any European
Union member state are required to adopt this basis of accounting. Note 8 and
the subsequent pages set out detailed reconciliations to show the differences in
accounting treatment as compared to the previous UK GAAP basis of accounting.
There are reconciliations for the Group Income Statement (formerly the Group
Profit and Loss Account) and Group Balance Sheet for the current period, the
restated comparative results for the year ended 30 September 2005 and the six
months ended 31 March 2005, together with an opening balance sheet at 1 October
2004, the date of transition to IFRS.
The key changes resulting from the introduction of IFRS are set out on page 8.
The principal one affecting the group is the inclusion of deferred tax on
revaluation of property which was previously shown by way of a note to the
accounts. The effect on net assets under IFRS at 30 September 2005 was to reduce
the UK GAAP amount of 1,025p per share to 990p per share. Under IFRS net assets
at 31 March 2006, including our share of Campmoss, our 47.62% owned jointly
controlled entity, totalled £17.72m (March 2005: £15.18m; September 2005:
£17.58m) equivalent to 1,006p per share (March 2005: 850p; September 2005:
990p).
For the half year to 31 March 2006, under IFRS, profit before tax amounted to
£0.45m (March 2005: £1.02m; September 2005: £3.20m) which included a
contribution from Campmoss of £0.17m (March 2005: £0.36m; September 2005:
£2.12m). Group revenue totalled £0.26m (March 2005: £1.37m; September 2005:
£1.67m) representing gross rental income of £0.26m (March 2005: £0.49m;
September 2005: £0.56m) and sales of commercial property of nil (March 2005:
£1.11m; September 2005: £1.11m). Earnings per share was 20.7p (March 2005:
53.1p; September 2005: 193.6p). Shareholders should note that under UK GAAP,
results for Campmoss were identified under all the component parts of the income
statement (formerly the profit and loss account). Under IFRS, however, profit
before tax includes a single line item 'share of jointly controlled entity'. The
net effect is the same but the presentation is significantly different.
The group's property portfolio is valued annually and therefore the figures for
the half year are based on values as at 30 September 2005. Gearing at Campmoss
was 44% (March 2005: 145%; September 2005: 47%) and for Cardiff nil (March 2005:
nil; September 2005: nil). During the first half the company acquired 14,000 of
its own shares for cancellation. Cash balances are placed on short term deposit
and bank borrowing facilities have been renewed and remain available for
acquisitions.
The investment and development portfolio
The group's property portfolio continues to focus within the area known as The
Golden Triangle namely to the west of London and close to Heathrow Airport.
Residential activities are confined to the counties of Surrey and Berkshire.
The company's office, retail and business units are located at Egham, Windsor,
Maidenhead and Cardiff. Other than Maidenhead, referred to below, these
buildings are let on medium to long term institutional leases to well known
national and local companies.
At the Maidenhead Enterprise Centre, major refurbishment work has now been
completed. The property comprises six individual business units totalling 14,000
sq ft. Agents have been appointed to seek either a letting or a freehold sale.
At Egham, two of our newly built residential houses remain available for sale.
One house has been let on a short term basis. At Ashleigh House, Englefield
Green, Surrey an acceptable offer has been received and as indicated in my post
balance sheet comments, the sale has now been completed.
Campmoss Property Company Ltd
Campmoss continues to retain freehold commercial property at Britannia Wharf,
Woking, The Priory, Burnham and Kiln Lane, Bracknell. Gross annual rental income
generated from this portfolio is now in excess of £1.42m. Freehold properties at
Tangley Place, Worplesdon, Datchet Meadows, Datchet, Market Street, Bracknell
and Highway House, Maidenhead, are all the subject of detailed planning
discussions with individual Local Authorities' Planning Departments. In all
cases planning applications have been lodged and although this remains a long
and arduous task each individual scheme, as and when planning is achieved,
represents an exciting project for the future.
Whilst planning matters proceed part of the office and retail buildings at
Market Street, Bracknell have been let on a short term basis.
Shareholders telephone dealing service
This low commission share dealing facility provided by the company's registrars,
Computershare Investor Services Plc, and used by a number of shareholders, has
been renewed. The company is continuing to offer 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 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 advisors. Computershare can be contacted on
0870 703 0084.
Post balance sheet events
The sale of Ashleigh House and adjacent land for £1.72m has now been
successfully completed and the funds placed on short term deposit.
At Maidenhead an acceptable offer for leasing two of the units has been received
and is in solicitor's hands. At Windsor an acceptable offer for the freehold of
one of the business units has been received and is also in solicitor's hands.
Interest rates continue to remain at current low levels and as evidenced by the
above events renewed confidence in the property market, as a whole, is evident.
I look forward to reporting on further progress to shareholders with the year
end results.
J Richard Wollenberg
Chairman
18 May 2006
Consolidated Income Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2006
Six months Six months Year
31 March 31 March 30 September
2006 2005 2005
(Unaudited) (Unaudited) (Unaudited)
£'000 £'000 £'000
Revenue 259 1,364 1,672
Cost of sales (19) (712) (722)
------ ------ ------
Gross profit 240 652 950
Administrative expenses (243) (272) (573)
Other operating income 209 168 282
------ ------ ------
Operating profit before gains on
investment properties 206 548 659
Profit on sale of other investments - 1 1
Surplus on revaluation of investment
properties - - 225
------ ------ ------
Profit before financing 206 549 885
Financing:
Interest receivable and similar income 78 113 197
Interest payable - - (5)
Share of jointly controlled entity 168 361 2,124
------ ------ ------
Profit before taxation 452 1,023 3,201
Tax on profit on ordinary activities (85) (86) 233
------ ------ ------
Profit for the period 367 937 3,434
------ ------ ------
Dividends
Paid 115 104 149
Proposed 48 45 115
------ ------ ------
Earnings per share - pence
On profit for the six months
Basic 20.7 53.1 193.6
Diluted 20.6 52.9 192.0
------ ------ ------
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 2006
31 March 31 March 30 September
2006 2005 2005
(Unaudited) (Unaudited) (Unaudited)
£'000 £'000 £'000
Non-current assets
Investment properties 5,576 4,719 5,444
Investment in jointly controlled
entity 7,164 5,347 6,996
Property, plant and equipment 3 5 4
Other financial assets 393 303 303
------ ------ ------
Total non-current assets 13,136 10,374 12,747
------ ------ ------
Current assets
Stock and work in progress 2,701 2,799 2,701
Trade and other receivables 250 487 328
Cash and cash equivalents 3,101 3,660 3,356
------ ------ ------
6,052 6,946 6,385
------ ------ ------
Total assets 19,188 17,320 19,132
------ ------ ------
Current liabilities
Trade and other payables (688) (910) (775)
Non-current liabilities
Provisions and deferred tax (785) (1,235) (781)
------ ------ ------
Total liabilities (1,473) (2,145) (1,556)
------ ------ ------
Net assets 17,715 15,175 17,576
------ ------ ------
Capital and reserves
Called up share capital 352 357 355
Share premium account 4,946 4,944 4,946
Other reserves 2,295 2,291 2,29
Profit and loss account -
non-distributable 3,990 3,444 3,990
Profit and loss account -
distributable 6,132 4,139 5,993
------ ------ ------
Shareholders' funds - equity 17,715 15,175 17,576
------ ------ ------
Net assets per share 1,006p 850p 990p
------ ------ ------
Consolidated Cash Flow Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2006
Six months Six months Year
31 March 31 March 30 September
2006 2005 2005
(Unaudited) (Unaudited) (Unaudited)
£'000 £'000 £'000
Cash flows from operating activities
Profit for the year 367 937 3,434
Adjustments for:
Depreciation, amortisation and
impairment 1 2 3
Financial income (78) (113) (197)
Financial expense - - 5
Share of profit of jointly
controlled entity (217) (493) (2,378)
Profit on sale of other investments - (1) (1)
Surplus on revaluation of
investment properties - - (225)
Equity settled share-based
payment expenses 25 25 50
Taxation 134 218 21
------ ------ ------
Operating profit before changes
in working capital 232 575 712
Decrease in trade and other
receivables 74 1,845 1,986
Decrease in stock - 624 722
(Decrease)/increase in trade and
other payables (170) 4 3
------ ------ ------
Cash generated from operations 136 3,048 3,423
Tax paid - - (132)
------ ------ ------
Net cash from operating activities 136 3,048 3,291
------ ------ ------
Cash flows from investing activities
Interest received 85 72 155
Interest paid - - (5)
Acquisition of property, plant
and equipment (223) (782) (1,286)
Proceeds of disposals of plant
and equipment - 9 9
------ ------ ------
(138) (701) (1,127)
------ ------ ------
Cash flows from financing activities
Proceeds from the issue of share
capital - 104 105
Purchase of owhares (138) - (76)
Dividends paid (115) (103) (149)
------ ------ ------
Net cash from financing activities (253) 1 (120)
------ ------ ------
Net (decrease)/increase in cash
and cash equivalents (255) 2,348 2,044
Cash and cash equivalents brought
forward 3,356 1,312 1,312
------ ------ ------
Cash and cash equivalents at end
of period 3,101 3,660 3,356
------ ------ ------
Other Primary Statements
FOR THE SIX MONTHS ENDED 31 MARCH 2006
Consolidated statement of changes in equity
Six months Six months Year
31 March 31 March 30 September
2006 2005 2005
(Unaudited) (Unaudited) (Unaudited)
£'000 £'000 £'000
Opening shareholders' funds as
previously reported 18,186 15,548 15,548
Effects of IFRS (610) (1,335) (1,335)
------ ------ ------
Opening shareholders' funds
restated under IFRS 17,576 14,213 14,213
Share capital on options exercised - 10 9
Share premium on options exercised - 94 95
Own shares purchased (138) - (76)
Fair value of share options granted 25 25 50
------ ------ ------
17,463 14,342 14,291
Total recognised income and expense
for the period 367 937 3,434
------ ------ ------
17,830 15,279 17,725
Dividends (115) (104) (149)
------ ------ ------
Closing shareholders' funds 17,715 15,175 17,576
------ ------ ------
Notes to the Financial Statements
FOR THE SIX MONTHS ENDED 31 MARCH 2006
1. International Financial Reporting Standards
The consolidated results for the six months ended 31 March 2006 are the first to
be prepared by the group under applicable International Financial Reporting
Standards adopted by the European Union ('IFRS') which have been adopted and
incorporated into the principal accounting policies as set out in note 2. From 1
January 2005, all listed companies traded on a regulated market in any European
Union member state are required to adopt this basis of accounting. Note 8 and
the subsequent pages set out detailed reconciliations to show the differences in
accounting treatment as compared to the previous UK GAAP basis of accounting.
There are reconciliations for the Group Income Statement (formerly the Group
Profit and Loss Account) and Group Balance Sheet for the current period, the
restated comparative results for the year ended 30 September 2005 and the six
months ended 31 March 2005, together with an opening balance sheet at 1 October
2004, the date of transition to IFRS.
The financial information included in this document is unaudited and does not
comprise statutory accounts within the meaning of section 240 of the Companies
Act 1985. The comparative figures for the financial year ended 30 September 2005
are not the company's statutory accounts for that financial year. The statutory
accounts for the year ended 30 September 2005, prepared in accordance with UK
GAAP, have been filed with the Registrar of Companies. The auditor gave an
unqualified report, without any statement under section 237(2) or (3) of the
Companies Act 1985.
Basis of preparation
The results have been prepared using applicable IFRS, which includes
International Accounting Standards (IAS) and interpretations issued by the
International Accounting Standards Board (IASB) and its committees, which are
expected to be endorsed by the European Union and apply to the 2006 full year
results.
Key changes
The main differences from UK GAAP are:
• annual revaluation surpluses or deficits on investment properties are
included in the income statement, whereas previously this was reported as a
movement on the balance sheet through the revaluation reserve;
• capital gains tax payable in the event that all the group's investment
properties were sold at the balance sheet date is included as an additional
deferred tax liability in the balance sheet, having previously been
disclosed as a note to the accounts. The movement in valuation of the
investment properties during the year will affect the tax charge in the
income statement;
• the value of lease incentives is spread over the life of a lease rather
than to the first rent review;
• no provision is made for proposed dividends; and
• the fair value of options granted is recognised as an employee expense
with a corresponding increase in equity.
Cash flow
Despite all the changes to the reporting of assets, liabilities and performance,
the cash flows that underline the business remain the same, hence no
reconciliations of cash flows under UK GAAP and IFRS have been prepared. The
cash flow statements reported under IFRS differ only in presentation from UK
GAAP. The effect of the change in categorisation is to reduce the number of
headings in the cash flow statements.
2. Accounting policies
The following principal accounting policies have been applied consistently in
dealing with items which are considered material in relation to the group's
financial statements. The financial statements have been prepared under the
historical cost convention, modified by the revaluation of investment
properties, and in accordance with applicable accounting standards and with the
Companies Act 1985 except as noted below under investment properties. These
accounting policies have been applied consistently across the group for the
purposes of these consolidated interim financial statements.
Basis of consolidation
The group's financial statements include the financial statements of the company
and its subsidiaries and jointly controlled entity made up to 31 March 2006. The
purchase method of acquisition has been adopted. Under this method, the results
of subsidiary undertakings acquired or disposed of in the year are included in
the consolidated income statement from the date of acquisition or up to the date
of disposal. Intra-group transactions are eliminated on consolidation.
A jointly controlled entity is one in which the group has a long term interest
and over which it exercises joint control. The group's investment in the jointly
controlled entity is accounted for using the equity method, hence the group's
share of the profits less losses of the jointly controlled entity is included in
the consolidated income statement and its interest in the net assets is included
in investments in the consolidated balance sheet.
Goodwill
Goodwill represents amounts arising on acquisition of subsidiaries, associates
and jointly controlled entities. Goodwill represents the difference between the
cost of the acquisition and the fair value of the net identifiable assets
acquired. Identifiable assets include intangible assets which can be sold
separately or which arise from legal rights regardless of whether those rights
are separable.
The classification and accounting treatment of acquisitions that occurred prior
to 1 October 2004 has not been reconsidered in preparing the group's opening
IFRS balance sheet at 1 October 2004.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is
allocated to cash-generating units and is not amortised but is tested annually
at the balance sheet date for impairment. In respect of associates and jointly
controlled entities, the carrying amount of goodwill is included in the carrying
amount of the investment in that associate or jointly controlled entity.
Impairment
The annual impairment review involves comparing the carrying amount to the
estimated recoverable amount (by allocating the goodwill to cash-generating
units) and recognising an impairment loss, if the recoverable amount is lower.
Impairment losses are recognised through the income statement.
Investment properties
Investment properties are properties which are held either to earn rental income
or for capital appreciation or both. Investment properties are stated at fair
value which are based on market values.
Design, construction and management expenses together with interest incurred in
respect of investment properties in the course of development are capitalised
until the building is effectively completed and available for letting along with
the costs directly attributable to the initial letting of newly developed
properties. Thereafter they are charged to the income statement. Whilst under
development such properties are classified as assets in the course of
construction and any accumulated revaluation surpluses or deficits are
recognised in the income statement. These properties are revalued at the year
end and surpluses or deficits recognised in the income statement.
An external, independent valuer, having an appropriate recognised professional
qualification and recent experience in the location and category of property
being valued, values the company portfolio each year. The directors of the
jointly controlled entity value its portfolio each year.
Depreciation
Property and plant and equipment are stated at cost less accumulated
depreciation and impairment losses.
Provision is made for depreciation on other tangible fixed assets so as to write
off their cost less the estimated residual value on a straight-line basis over
their expected useful lives as follows:
• motor vehicles - 4 years; and
• fixtures, fittings and equipment - 4 years.
Impairment
The carrying amounts of the group's assets are reviewed at each balance sheet
date to determine whether there is any indication of impairment. If any such
indication exists, the assets recoverable amount is estimated and an impairment
loss recognised where the recoverable amount is less than the carrying value of
the asset.
Stocks and work in progress
Stocks, being properties under development intended for resale, are stated at
the lower of cost, including attributable overheads, and net realisable value
Revenue
Revenue consists of rental income earned from properties held for investment
purposes together with the proceeds from the sale of development properties.
Rental income is recognised in the income statement on a straight-line basis
over the total lease period. Payments due on early terminations of lease
agreements are recognised in the income statement within revenue.
Proceeds from the sale of investment properties are not included in revenue, but
in profit on sale of investment property. The profit or loss on disposal is
calculated with reference to the carrying amount in the balance sheet. Purchases
and sales of investment properties are accounted for when exchanged contracts
become unconditional.
Financial assets
Investments in equity securities are classified as assets available for sale and
are stated at fair value with any resultant gain or loss being recognised
directly in equity except for any impairment loss. When these investments are
derecognised, the cumulative gain or loss previously recognised directly in
equity is recognised in the income statement.
In the company's financial statements, investments in subsidiary undertakings,
associates and jointly controlled entities are stated at cost less any
impairment value.
Trade and other receivables
Trade and other receivables are stated at their historic cost (discounted if
material) less impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank
overdrafts that are repayable on demand and form an integral part of the group's
cash management are included as a component of cash and cash equivalents for the
purpose only of the statement of cash flows.
Share based payments
The share option programme allows group employees to acquire shares of the
ultimate parent company; these awards are granted by the ultimate parent. The
fair value of options granted is recognised as an employee expense with a
corresponding increase in equity. The fair value is measured at the date of
grant and spread over the period during which the employees become
unconditionally entitled to the options using an option valuation model, taking
into account the terms and conditions upon which options were granted. The
amount recognised as an expense is adjusted to reflect the actual number of
share options that vest except where forfeiture is due only to share prices not
achieving the threshold for vesting.
Dividends
Dividends are recognised as a liability in the period in which they are
approved.
Provisions
A provision is recognised in the balance sheet when the group has a present
legal or constructive obligation as a result of a past event and it is probable
that an outflow of economic benefit will be required to settle the obligation.
If the effect is material, provisions are determined by discounting the expected
future cash flows at a pre tax rate that reflects current market assessments of
the time value of money and, where appropriate, the risks specific to the
liability.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax
is recognised in the income statement except to the extent that it relates to
items recognised directly in equity, in which case it is recognised in equity.
Current tax is expected tax payable on the taxable income for the year, using
tax rates enacted or substantively enacted at the balance sheet date and any
adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used
for taxation purposes. The following temporary differences are not provided for:
the initial recognition of goodwill; the initial recognition of assets or
liabilities that affect neither accounting nor taxable profit other than in a
business combination; and differences relating to investments in subsidiaries to
the extent that they will probably not reverse in the foreseeable future. The
amount of deferred tax provided is based on the expected manner of realisation
or settlement of the carrying amount of assets and liabilities, using tax rates
enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised.
3. Analysis of revenue, profit before tax and net operating assets
Six months Six months Year
31 March 31 March 30 September
2006 2005 2005
(Unaudited) (Unaudited) (Unaudited)
£'000 £'000 £'000
Revenue (wholly in the United Kingdom)
Gross rents receivable: 259 251 559
Sale of development property - 1,113 1,113
------ ------ ------
259 1,364 1,672
------ ------ ------
Profit before tax
Property and other investment 353 517 2,666
Property development 99 506 535
------ ------ ------
452 1,023 3,201
------ ------ ------
Net operating assets
Property and other investment 15,722 11,338 15,656
Property development 1,993 3,837 1,920
------ ------ ------
17,715 15,175 17,576
------ ------ ------
4. Taxation
The tax position for the six months is estimated on the basis of the anticipated
tax rates applying for the full year.
5. Dividends
Period Year
31 March 30 September
2006 2005
£'000 £'000
Final 2005 115 Final 2004 5.8p per share 101
6.5p per share
Increase in 2004 final dividend
following issue of shares in
respect of options exercised 3
Interim 2006
2.75p per share - Interim 2005 2.5p per share 45
----- -----
115 149
----- -----
The interim dividend of 2.75p per share will be paid on 7 July 2006 to
shareholders on the register on 9 June 2006. Under IFRS rules this dividend is
not included in the consolidated income statement for the six months ended 31
March 2006 nor the balance sheet as at that date.
6. Earnings per share
Earnings per share has been calculated using the profit after tax for the period
of £367,000 (six months to 31 March 2005: £937,000; year to 30 September 2005:
£3,434,000) and the weighted average number of shares as follows:
Weighted average number of shares
31 March 31 March 30 September
2006 2005 2005
Basic 1,773,234 1,764,936 1,773,706
Adjustment to basic for bonus element of
shares to be issued on exercise of options 7,920 7,018 14,690
--------- --------- ---------
Diluted 1,781,154 1,771,954 1,788,396
--------- --------- ---------
7. Share based payments
In accordance with the transitional provisions in IFRS 1 and IFRS 2, the
recognition and measurement principles in IFRS have not been applied to grants
made prior to 7 November 2002.
For grants subsequent to this date the fair values of services received in
return for share options granted are measured by reference to the fair value of
share options granted. The estimate of the fair value of the option is measured
based on a Black Scholes model (with the contractual life of the option and
expectations of early exercise built into the model). The option vests after a
period of 3 years and in addition, the average of the previous three years net
asset value per share must exceed the corresponding increase in the FT Property
Index over the same period, by at least 3%.
The terms and condition of outstanding share options are as follows:
Date granted Amount paid No. of Option Exercisable
ordinary price between
shares per share
------------- -------- --------- --------- ----------
14 January 2003 £1 10,000 515p 2006-2013
The principal assumptions used in assessing the fair value of the options are as
follows:
• share price - 515p;
• exercise price - 515p;
• option life - 10 years;
• expected dividends - 1.4%; and
• risk-free interest rate - 4.3%.
8. Reconciliation of UK GAAP to IFRS
To illustrate the changes introduced by IFRS and the impact on the group results
when compared to UK GAAP, the transitional requirements are for a set of
detailed reconciliations going back to the balance sheet date at 1 October 2004.
In the subsequent pages, reconciliations are set out for the six months ended 31
March 2006 and also for the restated comparative results for the year ended 30
September 2005 and the six months ended 31 March 2005. The balance sheet as at 1
October 2004 is also included.
The IFRS accounting standards that impact on the group's results are identified
in the reconciliations and are as follows:
Reconciliation of UK GAAP to IFRS
Consolidated Income Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2006
UK GAAP Share Adjusted Dividends Revaluations IFRS
(under IFRS option share of under and related
presentation) expense profit of IAS 10 deferred
IFRS 2 jointly taxation
controlled taken to
entity consolidated
income
statement
£'000 £'000 £'000 £'000 £'000 £'000
------ ------ ------ ------ ------ ------
Revenue 259 259
Cost of sales (19) (19)
------ ------ ------ ------ ------ ------
Gross profit 240 240
Administrative
expenses (218) (25) (243)
Other
operating 209 209
income
------ ------ ------ ------ ------ ------
Operating
profit
before gains 231 (25) 206
on investment
properties
Profit on sale - -
of other
investments
Surplus on - -
revaluation of
investment
properties
------ ------ ------ ------ ------ ------
Profit before
financing 231 (25) 206
Financing:
Interest
receivable and
similar income 78 78
Interest - -
payable
Share of
jointly 168 168
controlled
entity
------ ------ ------ ------ ------ ------
Profit before
taxation 477 (25) 452
Tax on profit
on ordinary (85) (85)
activities
------ ------ ------ ------ ------ ------
Profit for the
period 392 (25) 367
------ ------ ------ ------ ------ ------
Dividends 48 67 115
------ ------ ------ ------ ------ ------
Earnings per share - pence
On profit for
the six months
Basic 22.1 20.7
Diluted 22.0 20.6
------ ------
Reconciliation of UK GAAP to IFRS
Consolidated Balance Sheet
AS AT 31 MARCH 2006
UK GAAP Share Adjusted Dividends Revaluations IFRS
(under IFRS option share of under and related
presentation) expense profit of IAS 10 deferred
IFRS 2 jointly taxation
controlled taken to
entity consolidated
income
statement
£'000 £'000 £'000 £'000 £'000 £'000
------ ------ ------ ------ ------ ------
Non-current assets
Investment
properties 5,576 5,576
Investment in
jointly
controlled entity 7,393 (229) 7,164
Property, plant
and equipment 3 3
Other financial
assets 393 393
------ ------ ------ ------ ------ ------
Total non-current
assets 13,365 (229) 13,136
------ ------ ------ ------ ------ ------
Current assets
Stock and work in
progress 2,701 2,701
Trade and other
receivables 250 250
Cash and cash
equivalents 3,101 3,101
------ ------ ------ ------ ------ ------
6,052 6,052
------ ------ ------ ------ ------ ------
Total assets 19,417 (229) 19,188
------ ------ ------ ------ ------ ------
Current
liabilities
Trade and other
payables (736) 48 (688)
Non-current
liabilities
Provisions and
deferred tax (289) (496) (785)
------ ------ ------ ------ ------ ------
Total liabilities (1,025) 48 (496) (1,473)
------ ------ ------ ------ ------ ------
Net assets 18,392 (229) 48 (496) 17,715
------ ------ ------ ------ ------ ------
Capital and reserves
Called up share
capital 352 352
Share premium
account 4,946 4,946
Investment
property
revaluation
reserve 4,486 (4,486) -
Other reserves 2,295 2,295
Profit and loss
account -
non-distributable - 3,990 3,990
Profit and loss
account -
distributable 6,313 (229) 48 6,132
------ ------ ------ ------ ------ ------
Shareholders'
funds - equity 18,392 (229) 48 (496) 17,715
------ ------ ------ ------ ------ ------
Net assets per
share 1,044p 1,006p
------ ------
Reconciliation of UK GAAP to IFRS
Consolidated Income Statement
FOR THE YEAR ENDED 30 SEPTEMBER 2005
UK GAAP Share Adjusted Dividends Revaluations IFRS
(under IFRS option share of under and related
presentation) expense profit of IAS 10 deferred
IFRS 2 jointly taxation
controlled taken to
entity consolidated
income
statement
£'000 £'000 £'000 £'000 £'000 £'000
------ ------ ------ ------ ------ ------
Revenue 1,672 1,672
Cost of sales (722) (722)
------ ------ ------ ------ ------ ------
Gross profit 950 950
Administrative
expenses (523) (50) (573)
Other
operating 282 282
income
------ ------ ------ ------ ------ ------
Operating
profit
before gains 709 (50) 659
on investment
properties
Profit on sale of 1 1
other investments
Surplus on
revaluation of
investment
properties - 225 225
------ ------ ------ ------ ------ ------
Profit before
financing 710 (50) 225 885
Financing:
Interest
receivable and
similar income 197 197
Interest (5) (5)
payable
Share of
jointly 1,733 391 2,124
controlled
entity
------ ------ ------ ------ ------ ------
Profit before
taxation 2,635 (50) 391 225 3,201
Tax on profit
on ordinary (88) 321 233
activities
------ ------ ------ ------ ------ ------
Profit for the
period 2,547 (50) 391 546 3,434
------ ------ ------ ------ ------ ------
Dividends 163 (14) 149
------ ------ ------ ------ ------ ------
Earnings per share - pence
On profit for the year
Basic 143.6 193.6
Diluted 142.4 192.0
------ ------
Reconciliation of UK GAAP to IFRS
Consolidated Balance Sheet
AS AT 30 SEPTEMBER 2005
UK GAAP Share Adjusted Dividends Revaluations IFRS
(under IFRS option share of under and related
presentation) expense profit of IAS 10 deferred
IFRS 2 jointly taxation
controlled taken to
entity consolidated
income
statement
£'000 £'000 £'000 £'000 £'000 £'000
------ ------ ------ ------ ------ ------
Non-current assets
Investment
properties 5,444 5,444
Investment in
jointly
controlled entity 7,225 (229) 6,996
Property, plant
and equipment 4 4
Other financial
assets 303 303
------ ------ ------ ------ ------ ------
Total non-current
assets 12,976 (229) 12,747
------ ------ ------ ------ ------ ------
Current assets
Stock and work in
progress 2,701 2,701
Trade and other
receivables 328 328
Cash and cash
equivalents 3,356 3,356
------ ------ ------ ------ ------ ------
6,385 6,385
------ ------ ------ ------ ------ ------
Total assets 19,361 (229) 19,132
------ ------ ------ ------ ------ ------
Current
liabilities
Trade and other
payables (890) 115 (775)
Non-current
liabilities
Provisions and
deferred tax (285) (496) (781)
------ ------ ------ ------ ------ ------
Total liabilities (1,175) 115 (496) (1,556)
------ ------ ------ ------ ------ ------
Net assets 18,186 (229) 115 (496) 17,576
------ ------ ------ ------ ------ ------
Capital and reserves
Called up share
capital 355 355
Share premium
account 4,946 4,946
Investment
property
revaluation
reserve 4,486 (4,486) -
Other reserves 2,292 2,292
Profit and loss
account -
non-distributable - 3,990 3,990
Profit and loss
account -
distributable 6,107 (229) 115 5,993
------ ------ ------ ------ ------ ------
Shareholders'
funds - equity 18,186 (229) 115 (496) 17,576
------ ------ ------ ------ ------ ------
Net assets per
share 1,025p 990p
------ ------
Reconciliation of UK GAAP to IFRS
Consolidated Income Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2005
UK GAAP Share Adjusted Dividends Revaluations IFRS
(under IFRS option share of under and related
presentation) expense profit of IAS 10 deferred
IFRS 2 jointly taxation
controlled taken to
entity consolidated
income
statement
£'000 £'000 £'000 £'000 £'000 £'000
------ ------ ------ ------ ------ ------
Revenue 1,364 1,364
Cost of sales (712) (712)
------ ------ ------ ------ ------ ------
Gross profit 652 652
Administrative
expenses (247) (25) (272)
Other
operating 168 168
income
------ ------ ------ ------ ------ ------
Operating
profit
before gains 573 (25) 548
on investment
properties
Profit on sale of 1 1
other investments
Surplus on - -
revaluation of
investment
properties
------ ------ ------ ------ ------ ------
Profit before
financing 574 (25) 549
Financing:
Interest
receivable and
similar income 113 113
Interest - -
payable
Share of
jointly 341 20 361
controlled
entity
------ ------ ------ ------ ------ ------
Profit before
taxation 1,028 (25) 20 1,023
Tax on profit
on ordinary (86) (86)
activities
------ ------ ------ ------ ------ ------
Profit for the
period 942 (25) 20 937
------ ------ ------ ------ ------ ------
Dividends 47 56 103
------ ------ ------ ------ ------ ------
Earnings per share - pence
On profit for the six months
Basic 53.4 53.1
Diluted 53.2 52.9
------ ------
Reconciliation of UK GAAP to IFRS
Consolidated Balance Sheet
AS AT 31 MARCH 2005
UK GAAP Share Adjusted Dividends Revaluations IFRS
(under IFRS option share of under and related
presentation) expense profit of IAS 10 deferred
IFRS 2 jointly taxation
controlled taken to
entity consolidated
income
statement
£'000 £'000 £'000 £'000 £'000 £'000
------ ------ ------ ------ ------ ------
Non-current assets
Investment
properties 4,719 4,719
Investment in
jointly
controlled entity 5,947 (600) 5,347
Property, plant
and equipment 5 5
Other financial
assets 303 303
------ ------ ------ ------ ------ ------
Total non-current
assets 10,974 (600) 10,374
------ ------ ------ ------ ------ ------
Current assets
Stock and work in
progress 2,799 2,799
Trade and other
receivables 487 487
Cash and cash
equivalents 3,660 3,660
------ ------ ------ ------ ------ ------
6,946 6,946
------ ------ ------ ------ ------ ------
Total assets 17,920 (600) 17,320
------ ------ ------ ------ ------ ------
Current liabilities
Trade and other
payables (955) 45 (910)
Non-current
liabilities
Provisions and
deferred tax (418) (817) (1,235)
------ ------ ------ ------ ------ ------
Total liabilities (1,373) 45 (817) (2,145)
------ ------ ------ ------ ------ ------
Net assets 16,547 (600) 45 (817) 15,175
------ ------ ------ ------ ------ ------
Capital and reserves
Called up share
capital 357 357
Share premium
account 4,944 4,944
Investment
property
revaluation
reserve 4,261 (4,261) -
Other reserves 2,291 2,291
Profit and loss
account -
non-distributable - 3,444 3,444
Profit and loss
account -
distributable 4,694 (600) 45 4,139
------ ------ ------ ------ ------ ------
Shareholders'
funds - equity 16,547 (600) 45 (817) 15,175
------ ------ ------ ------ ------ ------
Net assets per
share 928p 850p
------ ------
Reconciliation of UK GAAP to IFRS
Consolidated Balance Sheet
AS AT 30 SEPTEMBER 2004
UK GAAP Share Adjusted Dividends Revaluations IFRS
(under IFRS option share of under and related
presentation) expense profit of IAS 10 deferred
IFRS 2 jointly taxation
controlled taken to
entity consolidated
income
statement
£'000 £'000 £'000 £'000 £'000 £'000
------ ------ ------ ------ ------ ------
Non-current assets
Investment
properties 3,935 3,935
Investment in
jointly
controlled entity 5,492 (619) 4,873
Property, plant
and equipment 5 5
Other financial
assets 311 311
------ ------ ------ ------ ------ ------
Total non-current
assets 9,743 (619) 9,124
------ ------ ------ ------ ------ ------
Current assets
Stock and work in
progress 3,423 3,423
Trade and other
receivables 2,369 2,369
Cash and cash
equivalents 1,349 1,349
------ ------ ------ ------ ------ ------
7,141 7,141
------ ------ ------ ------ ------ ------
Total assets 16,884 (619) 16,265
------ ------ ------ ------ ------ ------
Current liabilities
Trade and other
payables (923) 101 (822)
Non-current
liabilities
Provisions and
deferred tax (413) (817) (1,230)
------ ------ ------ ------ ------ ------
Total liabilities (1,336) 101 (817) (2,052)
------ ------ ------ ------ ------ ------
Net assets 15,548 (619) 101 (817) 14,213
------ ------ ------ ------ ------ ------
Capital and reserves
Called up share
capital 347 347
Share premium
account 4,850 4,850
Investment
property
revaluation
reserve 4,261 (4,261) -
Other reserves 2,291 2,291
Profit and loss
account -
non-distributable - 3,444 3,444
Profit and loss
account -
distributable 3,799 (619) 101 3,281
------ ------ ------ ------ ------ ------
Shareholders'
funds - equity 15,548 (619) 101 (817) 14,213
------ ------ ------ ------ ------ ------
Net assets per
share 895p 818p
------ ------
Financial Calendar
2006 19 May Interim results for 2006 announced
7 June Ex dividend date for interim dividend
9 June Record date for interim dividend
7 July Interim dividend to be paid
30 September End of accounting year
December Final results for 2006 announced
2007 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
Finance director Stockbrokers and financial
Nigel D Jamieson BSc, MRICS, FSI, advisers
Independent non-executive director Arbuthnot Securities Ltd
Secretary Bankers
David A Whitaker FCA HSBC Bank plc
Non-executive director of wholly owned Solicitors
subsidiary
First Choice Estates plc Charles Russell
Derek M Joseph BCom, FCIS, MSII Morgan Cole
Head office Registrar and transfer office
56 Station Road Computershare Investor Services plc
Egham PO Box 82
Surrey TW20 9LF The Pavilions
Telephone: 01784 437444 Bridgwater Road
Fax: 01784 439157 Bristol BS99 7NH
E-mail: webmaster@cardiff-property.com Telephone: 0870 702 0001
Web: www.cardiff-property.com Dealing line: 0870 703 0084
Registered office Registered number
Marlborough House 22705
Fitzalan Court
Fitzalan Road
Cardiff CF24 0TE
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