Final Results

Conygar Investment Company PLC(The) 10 December 2007 10 December 2007 The Conygar Investment Company PLC Preliminary Results for the year ended 30 September 2007 The Conygar Investment Company PLC, the property trading and development company, announces its results for the year ended 30 September 2007. Highlights • Significant growth in net asset value and profit before tax • Pro forma NAV increased by 45% to 170p per share from 117p at 30 September 2006 • Two successful share placings raised £42.3 million net of expenses • Entered into a joint venture with Stena Line Ports in order to develop Holyhead Waterfront • Submitted planning application on the £100 million Pembroke Dock Waterfront marina development proposal • Group has £38.1 million of cash at the year end. All bank debt repaid • Properties valued at £36.9 million at year end • Property trading continued apace with the sale of £70.6 million of properties Enquiries: The Conygar Investment Company PLC Robert Ware: 020 7408 2322 Peter Batchelor: 020 7408 2322 Oriel Securities Limited (Nominated Adviser) Malcolm Strang: 020 7710 7600 Michael Shaw: 020 7710 7600 About Conygar • Conygar is a trading and development group dealing primarily in UK commercial property • The group aims to invest in property assets when we can add significant value using our property management, development and transaction structuring skills • A major focus for the group is the proposed Pembroke Dock marina scheme. Other exciting port and marina opportunities are also being actively pursued including a joint venture with Stena Line Ports to develop Holyhead Waterfront • Conygar was formed in 2003 by Chief Executive, Robert Ware together with Finance Director, Peter Batchelor and Property Director, Steven Vaughan • Conygar raised £4.4 million upon admission to AIM in 2003 and has subsequently raised £53.1 million through the issue of new ordinary shares • Further information can be found at www.conygar.com Chairman's & Chief Executive's Statement Results We are pleased to be able to report another excellent year for the Group with significant progress made on all fronts. Net asset value per share increased 83% to 162p as at 30 September 2007 from 88p the previous year. Net asset value per share on a pro forma basis is 170p compared to 117p at 30 September 2006. Profit before tax for the year ended 30 September 2007 increased to £8,173,000 from £1,037,000 the previous year. Having raised some £42.3 million through two successful share placings, our market capitalisation is now over £70 million. With £38.1 million of cash and no indebtedness we are well placed to further expand the business and take advantage of the opportunities which will undoubtedly arise in an increasingly difficult economic environment. Conygar Stena Line Limited In October 2007, we were pleased to announce the creation of a joint venture, Conygar Stena Line Limited, with Stena Line Ports Limited ('Stena') in order to develop surplus land previously owned by Stena at Holyhead, Anglesey, Wales. It is intended that the land, which has in excess of half a mile of water frontage, will be redeveloped as a mixed use scheme incorporating residential, leisure, tourist and retail facilities together with an expanded marina development with associated commercial and marine engineering elements. We believe this will be an exciting regeneration scheme which will complement our multi-use Pembroke Dock Waterfront development and further continue our strategy of expansion into waterfront projects. We have committed £7 million to the joint venture company comprising £4.9 million of additional and adjacent development land already acquired and £2.1 million in cash which will fund the planning application and other associated costs. Stena will contribute its land in exchange for 50% of the joint venture. Work has already commenced on the project plans and planning application process. Trading Properties In October 2006, we announced the acquisition of eight properties in Buckingham Street, London WC2 for £33.91 million. The Royal Bank of Scotland plc provided a non-recourse structured facility of £29 million and the Group invested £3.46 million of the equity which entitles us to 70% of any profit realised. The properties comprise approximately 54,000 square feet of freehold single and multi-let office accommodation. To date, three properties have been sold for a total consideration of £13.81 million. We are currently in the process of re-letting a number of the remaining properties and undertaking some refurbishment work prior to sale. With regard to Bedford Square, we can report that all but one of the properties have now been sold for a total of £66.97million representing a gross surplus of £11.71million over cost in eighteen months. All associated bank debt has been repaid. Pembroke Dock A major focus for the Group is the proposed Pembroke Dock Waterfront marina scheme. This is a £100 million development of the Pembroke Dock Waterfront in West Wales. It is a partnership between Conygar, Welsh based developers and Vinci Project Development Limited (part of the Vinci Group). Following a competitive tender, the Conygar group was appointed as developer by a client group comprising Pembrokeshire County Council, the Welsh Assembly Government, the Crown Estate and The Milford Haven Port Authority. Whilst we are pleased to report that most of the planning issues have been successfully dealt with, it is somewhat frustrating that we are unable to report that our planning application has been approved. We are not aware of any major issues outstanding and remain confident of a positive result notwithstanding the lengthy planning process. Financing In October 2006, we placed 1,000,000 ordinary shares at 140p per share raising £1.39 million after expenses and in January 2007, we placed 20,498,500 ordinary shares at 200p per share raising £40.88 million after expenses. These placings broadened the shareholder base, provided funding for Pembroke Dock waterfront and will enable us to pursue other opportunities. As at 30 September 2007, the Group had cash of £38.12 million and no indebtedness. The disposals during the year together with funds raised enabled us to repay £76.43 million of bank debt. The balance sheet is looking robust and provides an excellent platform to move forward. International Financial Reporting Standards ('IFRS') This is the first year that the Group has prepared its financial statements under IFRS. Pro-forma Net Asset Value As a trading Group, properties are carried at the lower of cost and net realisable value. In order to show a clearer position of our value we have calculated a pro-forma net asset value using a Knight Frank LLP valuation of the portfolio. Knight Frank LLP have valued the remaining trading properties at £32.28 million and the land held for development at £4.70 million totalling £36.98 million. NAV Pence Per £'000 Share Net asset value per accounts at 30 September 2007 64,968 161.8 Group share of increase after tax in property valuation 3,500 8.7 ----------- ---------- Pro-forma net asset value at 30 September 2007 68,468 170.5 ----------- ---------- Pembroke Dock Waterfront remains valued at cost but will be revalued at the period end following the outcome of the planning application. Holyhead Waterfront development will be valued every six months. Strategy and The Future Our strategy for the next year: 1. To finalise the planning permissions at Pembroke Dock and to commence development; 2. To commence the planning permission process at Holyhead; 3. To complete the realisation of the Bedford Square and Buckingham Street trading assets; 4. To carry on appraising our continuing pipeline of transactions including ports, marinas and general property opportunities; and 5. To raise additional finance as necessary. In terms of progress, the Bedford Square portfolio now consists of one property whilst three out of the eight Buckingham Street properties have been sold. The planning application for Pembroke Dock Waterfront continues to make progress albeit at a frustrating pace. The joint venture with Stena for Holyhead Waterfront development is the culmination of many months work but is potentially much larger than Pembroke Dock. Finally, we have raised a considerable amount of new finance which puts us on an extremely secure footing. Prospects The sub-prime credit crisis in the US seems to have been the catalyst for significant credit and property market concerns which are ongoing. As of today these markets are extremely volatile with numerous stories, reported and hearsay, depicting a significant crash. History shows that such prophesies can be self-fulfilling and accordingly we believe that it will take several months to quantify the true extent of the crisis. However, we have an excellent pipeline of opportunities and are well positioned financially to take advantage of the situations that will undoubtedly arise from the current credit and property market difficulties. As ever, we shall keep shareholders informed of progress. N J Hamway R T E Ware Chairman Chief Executive CONSOLIDATED INCOME STATEMENT For the year ended 30 September 2007 Year Ended Year Ended 30 Sep 07 30 Sep 06 £'000 £'000 Sales of properties 70,603 9,225 Rental income 3,492 831 --------- --------- Revenue 74,095 10,056 --------- --------- Direct costs of: Sales of properties 60,747 7,664 Rental income 517 28 --------- --------- Direct Costs 61,264 7,692 --------- --------- Gross Profit 12,831 2,364 Income from trading investments 233 - Share of results of joint ventures 12 13 Other gains and losses 137 - Administrative expenses (3,149) (465) --------- --------- Operating Profit 10,064 1,912 Finance costs (3,613) (1,232) Finance income 1,722 357 --------- --------- Profit Before Taxation 8,173 1,037 Taxation (2,557) (353) --------- --------- Profit For The Period 5,616 684 ========= ========= Attributable to: - equity shareholders 5,616 684 - minority shareholders - - ========= ========= Basic earnings per share 16.94p 4.72p Diluted earnings per share 14.36p 4.50p All of the activities of the Group are classed as continuing. Statement of Changes in Equity For the year ended 30 September 2007 Attributable to the equity holders of the Company Share Capital Share Premium Retained Total Minority Total Earnings Interests Equity £'000 £'000 £'000 £'000 £'000 £'000 Group At 1 October 486 4,427 319 5,232 - 5,232 2005 Profit for the - - 684 684 - 684 period Share based - - 135 135 - 135 payment Issue of share 446 9,909 - 10,355 - 10,355 capital Share issue - (42) - (42) - (42) costs Other - - - - 5 5 movement -------- --------- -------- ------- --------- --------- At 30 September 932 14,294 1,138 16,364 5 16,369 2006 ======== ========= ======== ======= ========= ========= At 1 October 932 14,294 1,138 16,364 5 16,369 2006 Profit for the - - 5,616 5,616 - 5,616 period Share based - - 710 710 - 710 payment Issue of share 1,075 41,322 - 42,397 - 42,397 capital Share issue - (124) - (124) - (124) costs -------- --------- -------- -------- --------- --------- At 30 September 2,007 55,492 7,464 64,963 5 64,968 2007 ======== ========= ======== ======== ========= ========= CONSOLIDATED BALANCE SHEET At 30 September 2007 30 Sep 2007 30 Sep 2006 £'000 £'000 Non-Current Assets Property, plant and equipment 11 7 Investment in joint ventures 91 445 Deferred tax assets 243 - --------- --------- 345 452 Current Assets Development and trading properties 30,848 49,988 Trade and other receivables 2,850 3,536 Derivative financial instruments 137 - Cash and cash equivalents 38,123 13,001 --------- --------- 71,958 66,525 --------- --------- Total Assets 72,303 66,977 Current Liabilities Trade payables and other payables 5,535 2,827 Tax liabilities 1,800 353 --------- --------- 7,335 3,180 Non-Current Liabilities Borrowings - 47,428 --------- --------- - 47,428 --------- --------- Total Liabilities 7,335 50,608 --------- --------- Net Assets 64,968 16,369 ========= ========= Equity Called up share capital 2,007 932 Share premium account 55,492 14,294 Retained earnings 7,464 1,138 --------- --------- Equity Attributable to Equity Holders 64,963 16,364 Minority interests 5 5 --------- --------- Total Equity 64,968 16,369 ========= ========= Net Assets Per Share 162p 88p CONSOLIDATED CASH FLOW STATEMENT For the year ended 30 September 2007 Year ended 30 Year ended 30 Sep 07 Sep 06 £'000 £'000 Cash Flows From Operating Activities Operating profit 9,927 1,912 Depreciation 5 2 Share of results of joint ventures (12) (13) Share based payment charge 710 135 ---------- --------- Cash Flows From Operations Before Changes In Working Capital 10,630 2,036 Change in trade and other receivables 549 (3,640) Change in land, developments and trading properties 19,140 (49,988) Change in trade and other payables 3,398 2,002 ---------- --------- Cash Used In / Generated From Operations 33,717 (49,590) Finance costs (2,897) (452) Finance income 1,709 357 Dividends from joint ventures 200 200 Tax paid (1,352) - ---------- --------- Cash Flows From Operating Activities 31,377 (49,485) ---------- --------- Cash Flows From Investing Activities Purchase of plant and equipment (9) (5) ---------- --------- Cash Flows From Investing Activities (9) (5) ---------- --------- Cash Flows From Financing Activities Issue of shares 42,397 10,355 Issue costs of shares (124) (42) Borrowings drawn down 29,000 52,750 Issue costs of borrowings (205) (471) Borrowings repaid (76,428) (4,940) Exit fees paid (886) - ---------- --------- Cash Flows From Financing Activities (6,246) 57,652 ---------- --------- Net increase in cash and cash equivalents 25,122 8,162 Cash and cash equivalents at 1 October 13,001 4,839 ---------- --------- Cash and Cash Equivalents at 30 September 38,123 13,001 ---------- --------- TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ('IFRS') This is the first year that the Group has presented its accounts under IFRS. There were no adjustments required to the transition balance sheet at 1 October 2005. The major adjustments from UK GAAP are as follows: Notes Year ended 30 Year ended Sept 2007 30 Sept 2006 £'000 £'000 Equity under UK GAAP 64,591 16,364 --------- --------- IFRS Adjustments: Fair value of interest rate caps b) 137 - Lease incentives and letting costs c) 22 - --------- --------- IFRS Adjustments 159 - --------- --------- Equity under IFRS 64,750 16,364 ========= ========= Notes Year ended 30 Sept 2007 Year ended £'000 30 Sept 2006 £'000 Profit after tax under UK GAAP 5,954 819 --------- --------- IFRS Adjustments: Share based payments a) (497) (135) Fair value of interest rate caps b) 137 - Lease incentives and letting costs c) 22 - --------- --------- IFRS Adjustments (338) (135) --------- --------- Profit after tax under IFRS 5,616 684 ========= ========= The principal reasons for the adjustments shown in the reconciliations between UK GAAP and the IFRS are: a) Under IFRS share based payments to directors and employees such as under the Group's share option scheme are required to be measured at fair value and recognised as an expense in the income statement with an equivalent increase in equity. b) Under IFRS the fair value of interest rate derivative instruments is included in the balance sheet and, when the instrument is not considered to be an effective hedge, changes in fair value are included in the income statement. c) Under UK GAAP, the Group wrote off letting costs when incurred and rent free periods are generally allocated over the period to the first rent review. Under IFRS rent free periods are letting costs are allocated over the period until the first break option or, if it is reasonable certain that the break option will not be exercised, over the full lease term Notes: 1. This financial information set out in this announcement is abridged and does not constitute statutory accounts for the year ended 30 September 2007 but is derived from those draft financial statements. The financial information is not audited. The statutory accounts for the year ended 30 September 2007 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's annual general meeting. The financial information has been prepared using the recognition and measurement principles of IFRS. 2. The comparative financial information for the year ended 30 September 2006 was derived from information extracted from the annual report and accounts for that period, which was prepared under UK GAAP and which has been filed with the UK Registrar of Companies. The auditors have reported on those UK GAAP accounts, their report was unqualified and did not contain statements under sections 237 (2) or (3) of the Companies Act 1985. 3. Basic and fully diluted earnings per share have been calculated on the basis of a profit after tax of £5,616,000 (2006 - £684,000) and on the number of shares in issue being the weighted average number of shares in issue during the period of 33,152,521 (2006 - 14,491,437). The weighted average number of shares on a fully diluted basis was 39,108,698 (2006 - 15,203,895) which assumes the exercise of options over 5,956,177 (2006 - 712,458) shares at the start of the period. No adjustment has been made in respect of the exercise of options which were anti-dilutive throughout the period. 4. The directors are not proposing that a dividend payment be made. 5. The Report and Accounts for the year ended 30 September 2007 will be posted to shareholders shortly and copies may be obtained free of charge for at least one month following their posting by writing to The Secretary, The Conygar Investment Company PLC, Fourth Floor, Bond House, 19-20 Woodstock Street, London W1C 2AN. They are also available on the website www.conygar.com. 6. The Company's Annual General Meeting will be held at 11.00 am on Wednesday, 30 January 2008 at the offices of the Wragge & Co LLP, 3 Waterhouse Square, 142 Holborn, London EC1N 2SW. The directors of Conygar accept responsibility for the information contained in this announcement. The best of the knowledge and belief of the directors of Conygar (who have taken all reasonable care to ensure that such is the case) the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information. This information is provided by RNS The company news service from the London Stock Exchange

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