Final Results

RNS Number : 1251X

Conygar Investment Company PLC(The)

01 December 2010

 



30 November 2010

The Conygar Investment Company PLC

Preliminary Results for the Year Ended 30 September 2010

The Conygar Investment Company PLC, the property investment and development company announces its results for the year ended 30 September 2010

Highlights

·             2010 was another good year for Conygar

·             NAV per share of 150p was up 7.1% (2009: 140p)

·             PBT was up 8.8% at £14.9 million (2009: £13.7 million)

·             Sold £58.8 million and acquired £44.8 million of investment properties

·             Progress made on the development land bank, including two new projects at Parc Cybi, Holyhead and Haverfordwest, Pembrokeshire

·             Strong cash flow and debt capacity for future acquisitions, with total cash and undrawn committed facilities exceeding £110 million

·             Board strongly aligned with shareholders, shareholding increased by 2.1 million shares to 6.6%

Summary Group Net Assets As At 30 September 2010

		Per Share
	£'m	p
Investment Properties	151.1	128.7
Development Projects	14.6	12.4
Cash	67.3	57.3
Other Net Liabilities	(9.0)	(7.6)
	224.0
Bank Loans (net of issue costs)	(34.1)	(29.0)
Preference Shares	(13.3)	(11.3)
	176.6	150.5

Robert Ware, Chief Executive, commented:

"The outlook for Conygar remains positive and we are confident about the future prospects of the Group.  Our balance sheet is strong, our development land bank offers considerable upside for relatively low cost and we still have in excess of £110 million available for further acquisitions.  We are continually evaluating a pipeline of opportunities and whilst we have been close on several, we continue to walk away if the fundamentals are not right.  We are frustrated not to have done another significant deal in 2010 but we continue to believe that our strong investment discipline in rejecting overpriced transactions will benefit the prospects for our Company."

Enquiries:

The Conygar Investment Company PLC

Robert Ware:                  020 7258 8670

Peter Batchelor:              020 7258 8670

Oriel Securities Limited (Nominated Adviser)

Michael Shaw:                020 7710 7600

Neil Langford:                 020 7710 7600

Temple Bar Advisory (Public Relations)

Alex Child-Villiers:          07795 425580

Chairman's & Chief Executive's Statement

Results

The year ended 30 September 2010 has been another good year for Conygar and whilst we have not found another large acquisition that meets our investment criteria, the Group has taken the opportunity to sell £58.8 million of the properties acquired in 2009 and to acquire £44.8 million of investment properties from a distressed client of a bank.  We have also made progress on our development land bank and added two new projects at Parc Cybi, Holyhead and Haverfordwest, Pembrokeshire.  We continue to search for opportunities to acquire under-valued assets, and our funds available for investment including cash and undrawn committed facilities now exceed £110 million.  Our bank debt of £98.1 million assumed in 2009 as part of the acquisition of The Advantage Property Income Trust Limited ("TAP") has been reduced to £34.1 million in under a year, which has in turn freed up cash flow and debt capacity for other acquisitions.

The profit before taxation for the year was £14.9 million (2009: £13.7 million), which includes a £5.5 million profit from the sale of properties and a revaluation gain of £7.2 million.  The Group also acquired the remaining minority interests in TAP, realising a further profit of £0.6 million.  The net property income was £12.4 million before financing costs and overheads.

The net asset value per share of 150p compares to 140p per share at 30 September 2009, representing a 7.1% increase.  The net assets are now £176.6 million (2009: £162.0 million), a 9.0% increase over the year reflecting profits made on property disposals and value added to the investment property portfolio.  The Group's investment properties as at 30 September 2010 were independently valued at £151.1 million with an annual contracted rent roll of £13.3 million.  We continue to hold our development land bank at cost of £14.6 million and will revalue it once the various planning issues are resolved.  We consider that there is potential for considerable upside with cost presently representing only 12p per share out of a total net asset value per share of 150p.  

Events since the balance sheet date

In November 2010, we purchased 86 acres of land at Haverfordwest, Pembrokeshire, close to the town centre for £14 million which has outline planning consent for 900 residential units and a comprehensive plan is being prepared for its development.  The purchase was financed out of existing cash resources; and at a cost to the Group of less than £15,000 per unit, there is an opportunity for good returns from this project over the medium term.

Dividend

The Board is pleased to recommend a final dividend of 1p per ordinary share in respect of the year ended 30 September 2010 to be paid on 10 January 2011 to shareholders on the register on 10 December 2010.  The Board has decided against the payment of interim dividends at present.

 Share buy back

The Board is disappointed by the discount of the share price to the net asset value per share.  Having listened to feedback from many of our shareholders, the Board has decided that it will consider using the authority granted to it by shareholders at the last Annual General Meeting and buy back ordinary shares where they become available.  Whilst there are various opinions as to the benefits that arise from a company acquiring its own shares, your Board takes the view that the key consideration should be that the buy back enhances net asset value per share for those remaining shareholders. 

Acquisition

In November 2009, we acquired a portfolio of seven freehold and leasehold buildings for a total cash consideration of £44.8 million (the "Lamont portfolio").  These business park, office and industrial assets have an annual rent roll of approximately £4.41 million, representing a net initial yield on acquisition of 9.8%.  We have undertaken a lease re-gear at the largest asset in Aberdeen, which has extended the lease length by 5 years and resulted in an increase in the value of that asset of 13.1%.  We hope to undertake similar asset management initiatives at several of the other properties to create more value.  We have also agreed a re-financing of these assets with Lloyds Banking Group which is covered in further detail below.

Financing

At 30 September 2010, the Group had cash of £67.3 million or 57p per share, however, following the acquisition of land at Haverfordwest in November 2010, we currently have cash of £53 million or 45p per share.

In addition, we have agreed an amendment to the facility acquired with TAP, whereby Lloyds Banking Group has agreed to include the Lamont portfolio in the security pool.  By drawing down on this facility, we are able to access a further £58 million resulting in the Group having available capital of approximately £110 million to invest in new opportunities.  This excludes further finance that might be released from re-financing any new acquisitions.

The bank debt acquired with TAP in September 2009 was £98.1 million and this has been reduced to £34.1 million as at 30 September 2010.  This remains the only debt within the Group.  The loan to value of the debt is below 23% taking into account the entire investment property portfolio.

The present low returns on cash act as a drag on our income.  However, we remain of the opinion that it is the correct approach to hold cash whilst we continue to look for suitable investment opportunities.  Obtaining bank debt finance is still extremely difficult so to be able to deploy cash quickly has considerable value and we cannot see this changing for the foreseeable future.  We shall reassess our gearing once we are fully invested.

 Summary of Group Net Assets

The Group net assets as at 30 September 2010 may be summarised as follows:

		Per Share
	£'m	p
Investment Properties	151.1	128.7
Development Projects	14.6	12.4
Cash	67.3	57.3
Other Net Liabilities	(9.0)	(7.6)
	224.0
Bank Loans (net of issue costs)	(34.1)	(29.0)
Preference Shares	(13.3)	(11.3)
	176.6	150.5

Outlook

Whilst the outlook for the London property market continues to be fairly positive, the picture for commercial and residential property is less optimistic for the rest of the country.  The market continues to be slow, with few transactions in a difficult and uncertain economic environment.  The banks still have huge and uncomfortable exposures to property.  There are also a considerable number of impending re-financings and de-gearings in the pipeline so we continue to position ourselves, maintain dialogues and remain patient.  It is clear that the country is in for a period of some austerity as public spending is brought under control and taxes rise.  There are few signs that point towards growth in property values and therefore many challenges remain before the economy can recover.

For Conygar, the outlook remains positive and we are confident about the future prospects of the Group.  Our balance sheet is strong, our development land bank offers considerable upside for relatively low cost and we have in excess of £110 million available for further acquisitions.  We are continually evaluating a pipeline of opportunities and whilst we have been close on several, we continue to walk away if on further examination the fundamentals are not right.  We are frustrated not to have done another significant deal in 2010 but we continue to believe that our strong investment discipline in rejecting overpriced transactions will benefit the prospects for our company.

N J Hamway                                                    R T E Ware

Chairman                                                          Chief Executive

Business Review

Investment Properties

Summary of portfolio

Valuation at 30 September 2010 - £151,145,000

Number of properties - 45

Contracted rent (pa) - £13,350,440

Current ERV (pa) - £14,704,211

Net initial yield - 8.25%

Equivalent yield - 8.84%

Reversionary yield - 9.18%

ERV of vacant units (pa) - £2,063,236

Vacancy rate - 14.03%

Average unexpired lease lengths - 5.92 years

Introduction

This has been a busy period for the Company, with a number of asset management initiatives, asset sales, acquisitions and progress on the various development projects.  Further details are set out below.

Asset management

As at 30 September 2010, the contracted rent for the investment property portfolio was £13.3 million with an ERV of £14.7 million.  The ERV of vacant space is £2.06 million of which two properties, AdVantage, Reading and Brunswick Point, Leeds, account for 71% by rental value.  We are proposing an extensive £2 million refurbishment of Brunswick Point, Leeds, to bring the property up to the contemporary specification that occupiers require, whilst an extensive marketing campaign is underway for AdVantage, Reading. Occupier demand outside London remains weak so the challenge should not be under-estimated but we can be competitive and are certainly focused on the task.

We have made excellent progress on new lettings, having agreed 14 new lettings generating £694,103 per annum of new income at an aggregate premium to ERV of 2.53%.  The highlights were Hemel Hempstead where a ten year lease was entered into at £250,000 per annum in return for a six month rent free period and a tenant break after six years.  This created a 36% increase in the value of that asset from the 30 September 2009 valuation.  In addition, we have let Advantage One, Milton Keynes, for a term of ten years at £142,420 per annum in return for a twelve month rent free period and a tenant break after five years, which created a 24% increase in the value of that asset from the 30 September 2009 valuation.

Furthermore, we have agreed a number of lease renewals to retain some £2,718,830 of income per annum at 6.69% above ERV albeit at a 1.12% discount to passing rent.  The highlight was a lease re-gear at Aker Village, Kirkhill Industrial Estate, Aberdeen, whereby the tenant, Aker Solutions SA, agreed to remove a lease break effectively extending the lease length by five years in exchange for a twelve month rent free period spread over two years.  This resulted in an increase in the value of that asset of 13.1% from the valuation on acquisition.

Other highlights were Units 3, 16 and 18 Freebournes Road, Witham, where new leases were completed to June 2011 at a total rent of £505,000 per annum reducing to £473,000 per annum to June 2012 and thereafter the tenant will take a new five year lease at a guaranteed minimum rent of £420,000 per annum until the revised lease expiry in June 2017.  As an incentive, a capital payment of £75,000 was paid in consideration for entering into the longer lease term commitment which was commuted into an equivalent rent free period.  This is an excellent result for Conygar as it secures an income stream at an otherwise challenging asset.

We also agreed a lease re-gear at Waterfront Business Park, Fleet, whereby the existing tenant agreed to extend their two leases from expiry in 2014 to 2021 at the current passing rent of £464,000 per annum in exchange for some fit-out works and a rent free period costing a total of £607,500.

Finally, we settled 7 rent reviews securing a 5.77% uplift on passing rent and at an aggregate 6.78% premium to ERV.

Whilst most of the transactions are relatively small, it is vital that the portfolio is pro-actively managed and protection of income and cash flow is essential.  The portfolio continues to perform well and rent collection is generally prompt, albeit our occupiers are themselves under considerable pressure.  We have a diverse portfolio mostly consisting of small lot sizes, so we ensure close contact with tenants is maintained and debts are chased promptly.  We have five tenants where arrears exceed £40,000, totalling £378,405, with the largest write-off being £112,000 arising from the administration of Land of Leather.  These arrears are provided for in full albeit we may make some recoveries.

In terms of costs, we have recently renegotiated the property management contract for the TAP portfolio with Valad who managed the portfolio prior to the takeover by Conygar.  Having refocused Valad to concentrate on our priorities and approach, we were pleased to renew the contract.  That said, we have reduced the basic management fee, whilst at the same time introducing some performance related incentives to encourage new lettings and for identifying new opportunities.  On a like for like basis, the fee should halve from previous years.

Acquisitions and disposals

In November 2009, we acquired a portfolio of seven freehold and leasehold buildings for £44.8 million (the "Lamont portfolio").  These business park, office and industrial assets have an annual rent roll of £4.41 million, representing a net initial yield on acquisition of 9.8%.  The portfolio has been valued at £48.4 million at 30 September 2010, representing a net initial yield of 8.62% with an unexpired lease length of approximately 6.25 years.  The buildings comprise 562,000 square feet of lettable space and occupy some 47 acres so there is some scope for development opportunities.  The properties offer significant active management and development potential and the first major value creating initiative has been completed.

During the year, the Group disposed of 26 TAP properties for a gross consideration of £58.8 million generating a 10.4% surplus of £5.53 million net of costs over the 30 September 2009 valuation of £53.3 million.  All net proceeds have been applied towards repayment of associated bank debt.  The Group will continue to dispose of assets where the offer is at an acceptable premium to valuation or where no further value can be added by the Group.

The Advantage Property Income Trust Limited ("TAP")

TAP was acquired by the Group in September 2009 following a hostile reverse takeover.  Having acquired a strategic 28.9% stake in January 2009, we made a successful offer for the whole company and took control.  Our cash position and our in-house experience with corporate transactions meant we could move rapidly and decisively.  We had no banks to satisfy and undertook our own due diligence.

We acquired £151.6 million of property assets and net assets of £49.9 million for a total consideration of £28.8 million.  However, the bank debt acquired was relatively high at £99.6 million with both loan to value and interest cover covenants under pressure.  The priority was to realise cash, repay debt and cut outgoings - all quite straightforward but speed was of the essence.

Since the acquisition of TAP in September 2009, we have now disposed of assets for a total of £59.3 million, realising a total profit of £5.9 million over and above the property valuation at 30 September 2009, applying all of the funds realised towards repayment of bank debt.  The present bank debt of £34.1 million stands at 33% loan to value whereas it was over 66% upon acquisition and interest cover was close to its covenant limits.

We have also cut TAP's administrative costs by over 60% which combined with the debt reduction, results in TAP now having a positive cash flow. 

The net assets of the TAP Group at 30 September 2010 were £61.7 million compared with a total acquisition cost of £28.8 million representing a 114% return in just over a year.  The remaining TAP portfolio is valued at £102.7 million, with an annual rent roll of £8.9 million and it remains our intention to make disposals where no further value can be added by the Group.

Valuation

The investment property portfolio has been independently valued by King Sturge LLP at £151.1 million as at 30 September 2010, comprising £102.7 million for the TAP portfolio and £48.4 million for the Lamont portfolio. 

The total portfolio increased in value by £7.2 million or 5.01% over the year.  The Lamont portfolio increased by 8.04% primarily reflecting the value created through the re-gear of the Aberdeen property, whilst the TAP portfolio increased by 3.64%.  It is clear that active asset management is required to add or protect value in the absence of any notable yield shift and with continued downward pressure on rental values.

Development Projects

Significant progress continues to be made on our waterfront development land bank at Pembroke Dock, Holyhead and Fishguard.  Furthermore, we have taken the opportunity to make a number of acquisitions which will complement and enhance this existing land bank.

Holyhead

At Holyhead, our joint venture with Stena Line, the planning application is now complete and following a month of public consultations will be submitted to the local authority.  The ambitious proposal consists of 380 apartments and town houses, a 500 berth marina, 43,470 square feet of office, commercial and retail/leisure facilities in addition to a hotel.  We have also included a number of amenities such as a maritime museum, a visitor centre and a youth sailing club and with marine workshop and apprenticeship training facilities, the development should generate much needed real employment opportunities in the area.  The team has undertaken a vast amount of work to get to this position and so far we have been pleased at the level of support and encouragement from local, central government and others.

In May 2010, we were pleased to announce that we had submitted and obtained a planning consent for two developments totalling 110,000 square feet at the 120 acre strategic employment and regeneration site, Parc Cybi, on the outskirts of Holyhead in Anglesey.  The development will consist of distribution and warehousing space for the transport operators who use Holyhead port and provide facilities not currently available to commercial users of the port.  We have secured a three year option on the site from the Welsh Assembly Government and are now undertaking marketing of the site to potential tenants with a particular focus on the logistics industry.  The development is expected to create 450 jobs and discussions are taking place with the Welsh Assembly Government and the Wales European Funding Office to determine what funding options might be available to the Group.  In addition, the new Government has reaffirmed the commitment to build the proposed nuclear reactor at Wylfa, Anglesey, which will bring enormous benefit to the port and many opportunities for our Parc Cybi project.  Holyhead is the second largest trailer port in the UK with over 350,000 crossings per annum and currently it has no warehousing or support for the logistics industry, so the opportunity to benefit from this is, in our view, quite clear.

 Fishguard

Following meetings with the First and Deputy Ministers at the Welsh Assembly Government, a planning application is being prepared for a mixed use marina development at Fishguard which will now incorporate the reconfiguration of Stena Line's existing port facilities.  This will supercede our existing planning consent and provide for a development of greater scale and opportunity.  Further details will be provided once the planning application has been submitted.

We have also exchanged contracts to acquire an eleven acre site for a lorry stop and distribution park on the perimeter of the Stena Line owned port at Fishguard.  A planning application for this much needed facility will be submitted very shortly in partnership with Stena Line.  Completion is subject to receipt of suitable planning consents.

Pembroke Dock

At Pembroke Dock, we have acquired a 1.1 acre waterfront freehold site formerly occupied by Jewsons.  This completes the land assembly process for our Martello Quays development, and whilst compulsory purchase procedures could have been implemented, we are pleased that the remaining land has been acquired through negotiation.  Discussions are now underway with potential tenants for the leisure element of the scheme to act as the catalyst for this exciting mixed use waterfront scheme.  The whole site comprises approximately 41.5 acres and has a planning consent to create a 260 berth marina with 21,500 square feet of marina and boat servicing facilities; 146 houses; 304 apartments; a new public promenade; 32,300 square feet of retail; 19,400 square feet of restaurant and pub facilities; and a 120 bed hotel.  We continue to progress and optimise the design and engineering solutions and through this commitment, we are now able to consider a phased approach to the development.  Given current market conditions, in our view this is the only sensible way to proceed.

Haverfordwest

Finally, we have recently purchased for £14 million, 86 acres of land at Haverfordwest, Pembrokeshire, close to the town centre, which has outline planning consent for 900 residential units.  A comprehensive plan is now being prepared for its development.  We believe that the acquisition of such a large percentage of the allocation of residential consents in the administrative centre of Pembrokeshire gives us an opportunity to make good returns.  With a proactive and supportive County Council, which encourages inward investment and development, we are convinced Pembrokeshire is an attractive place in which to do business.

Summary

Our expenditure in the year on our development land bank amounted to £2.48 million and our total investment to date is £14.63 million at cost (analysed below).  Representing a commitment of less than 13p per share, we take the view that our approach provides potentially significant upside.  Our three waterfront developments are expected to develop in excess of 1,200 waterside homes and 1,000 marina berths, together with mixed use supporting development.  Our Haverfordwest acquisition adds the potential for another 900 homes plus associated development and our Parc Cybi site puts us in a fine position to develop a much needed 120 acre business park.

	2010 £'m	2009 £'m
Pembroke Dock	4.40	3.86
Holyhead	8.47	8.04
Fishguard	0.35	0.25
Haverfordwest	1.41	-
Total investment to date	14.63	12.15

Financial Review

Net Asset Value

The net asset value for the year was £176.6 million (2009: £162.0 million) representing a £14.6 million (9.0%) increase over the year.  The primary movements were total net income arising from property activities of £17.9 million, a revaluation uplift of £7.2 million less finance costs and administrative expenses of £7.6 million and £3.6 million respectively.  As this is the first full year of ownership of TAP, it is not, in our view, possible to draw meaningful comparisons in respect of these movements with the year ended 30 September 2009, when the Group was considerably different prior to such a significant acquisition.

On an EPRA basis, the net asset value is:

	2010 £'m	2009 £'m
Net asset value	176.6	160.9
Fair value of hedging instruments	5.0	4.4
EPRA net asset value	181.6	164.3
EPRA NAV per share	155p	142p

The EPRA net asset value excludes the impact of hedging instruments as these are held for long term benefit and not expected to crystallise at the balance sheet date.

The NNNAV or "triple net asset value" is the net asset value taking into account asset revaluations, the mark to market costs of debt and hedging instruments and any associated tax effect.  Our investment properties are carried on our balance sheet at independent valuation and there is no associated tax liability.  Our development and trading assets are carried at the lower of cost and net realisable value. We have not sought to value these assets as, in our opinion, they are at too early a stage in their development to provide a meaningful figure, so cost is equated to fair value for these purposes.  On this basis, there is no material difference between our stated net asset value of £176.6 million and NNNAV.

Revaluation

The Group's investment properties were independently valued by King Sturge LLP as at 30 September 2010. In their opinion, the open market value of the investment property portfolio was £151.1 million.  The total portfolio increased in value by £7.2 million or 5.01% over the year.

Cashflow

The Group generated £15.5 million cash from operating activities (2009: £(0.7) million), of which £20.7 million was generated by the Group's property operations before financing costs and taxation.  In addition, a total of £57.9 million cash was generated from the sale of investment properties.

The Group invested £44.8 million in acquiring further investment properties and repaid bank debt of £64 million resulting in an overall cash outflow of £35.5 million during the year.

Net Income From Property Activities

	2010 £'m	2009 £'m
Rental income	15.4	2.6
Direct property costs	(3.0)	(0.7)
Rental surplus	12.4	1.9
Sale of trading properties	3.1	13.9
Direct cost of trading property sold	(3.2)	(15.7)
Trading (deficit) / surplus	(0.1)	(1.8)
Sale of investment properties	58.8	0.5
Cost of investment properties sold	(53.3)	(0.1)
Gain on sale of investment properties	5.5	0.4
Total net income arising from property activities	17.8	0.5

Administrative Expenses

The administrative expenses for the year ended 30 September 2010 were £3.0 million, down 62% from the previous year.  Directors' remuneration fell from £5.5 million to £0.9 million as no bonus was paid under the profit sharing plan for 2010, having not achieved the hurdle rate.  Excluding directors' remuneration, the major components were £1.0 million (2009: £0.1 million) of fees incurred in respect of transactions that did not progress and £0.4 million (2009: £1.0 million) share based payments charge.  The majority of other costs are incurred as a result of the Group being quoted on AIM.

 Taxation

The tax charge for the year of £0.6 million on the pre-tax profit of £14.9 million represents an effective tax rate of 4.0% (2009: -2.5%).  Tax is payable at the full UK corporation tax rate of 28% on net rent income after deduction of finance costs and administrative expenses.  There is no tax payable in respect of investment property capital gains or any revaluation uplift, which is the main reason for the low effective tax rate.

Financing

At 30 September 2010, the Group had cash of £67.3 million and following the acquisition of land at Haverfordwest in November 2010, the cash is currently £53 million or 45p per share.

In addition, we have agreed an amendment to the £78 million facility acquired with TAP whereby Lloyds Banking Group has agreed to include the Lamont portfolio in the security pool.  By drawing down on this committed facility, we are able to access a further £58 million resulting in the Group having around £110 million to invest in new opportunities.  This excludes any further finance that might be released from re-financing those new acquisitions.

The bank debt acquired with TAP in September 2009 was £99.6 million and this has been reduced to £34.1 million as at 30 September 2010.  This remains the only debt within the Group and is non-recourse to the parent company.  The loan to value of the debt is 23% taking into account the entire investment portfolio so there is capacity to raise further funding should it be required.

The interest rate risk on the facility is managed by way of interest rate swaps.  The fair value of these derivative financial instruments is provided for in full on the balance sheet.  

The finance costs for the year amounted to £7.6 million (2009: £0.7 million) primarily consisting of £4.3 million bank loan interest (2009: £0.6 million) equating to an average interest rate over the period of 6.3% together with non-recurring  costs arising from early loan repayment of £2.2 million (2009: £nil).  Finance income amounted to £0.3 million (2009: £0.7 million) reflecting the low returns on short term cash deposits.

 

                                          CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 September 2010

Note	Year Ended 30 Sep 10 £'000	Year Ended 30 Sep 09 £'000
Sales of properties	3,100	13,924
Rental income	15,415	2,544
Revenue	18,515	16,468
Direct costs of:
Sales of properties	5,052	16,338
Rental income	2,955	728
Write-down of property inventory	(1,830)	(647)
Direct Costs	6,177	16,419
Gross Profit	12,338	49
Gain in respect of acquisition                                          24	608	21,798
Income from trading investments	-	335
Share of results of joint ventures                                     13	(10)	(39)
Gain on sale of investment properties                              12	5,529	427
Movement on revaluations of investment properties         12	7,205	(468)
Other gains and losses                                                   6	(475)	(414)
Administrative expenses	(3,011)	(7,950)
Operating Profit                                                          3	22,184	13,738
Finance costs                                                                7	(7,586)	(702)
Finance income                                                             7	280	652
Profit Before Taxation	14,878	13,688
Taxation                                                                       8	(637)	348
Profit And Total Comprehensive Income For The Year	14,241	14,036
Attributable to:
-           equity shareholders	14,219	14,004
-           minority shareholders	22	32
	14,241	14,036
Basic earnings per share                                                            10	12.13p	32.27p
Diluted earnings per share                                              10	11.57p	31.51p

All of the activities of the Group are classed as continuing.

CONSOLIDATED Statement of Changes in Equity

For the year ended 30 September 2010

	Attributable to the equity holders of the Company
	Share Capital	Share Premium	Merger Reserve	Equity Reserve	Retained Earnings	Total	Non-Controlling Interests	Total Equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Group
At 1 October 2008	2,082	57,990	-	-	8,133	68,205	5	68,210
Changes in equity for the year ended 30 September 2009
Profit for the year	-	-	-	-	14,004	14,004	32	14,036
Total recognised income and expense for the year	-	-	-	-	14,004	14,004	32	14,036
Credit to equity for equity settled share based payment	-	-	-	-	1,000	1,000	-	1,000
Issue of share capital	3,725	67,250	7,595	-	-	78,570	-	78,570
Expenses of issue of equity shares	-	(2,146)	-	-	-	(2,146)	-	(2,146)
Issue of preference shares	-	-	-	1,258	-	1,258	-	1,258
Preference share conversion	2	-	45	(4)	-	43	-	43
Acquisition of subsidiary	-	-	-	-	-	-	1,085	1,085
Other movement	-	-	-	-	(11)	(11)	-	(11)
At 30 September 2009	5,809	123,094	7,640	1,254	23,126	160,923	1,122	162,045
Changes in equity for year ended 30 September 2010
At 1 October 2009	5,809	123,094	7,640	1,254	23,126	160,923	1,122	162,045
Profit for the year	-	-	-	-	14,219	14,219	22	14,241
Total recognised income and expense for the year	-	-	-	-	14,219	14,219	22	14,241
Credit to equity for equity settled share based payment	-	-	-	-	434	434	-	434
Issue of share capital	56	896	-	-	-	952	-	952
Issue of preference shares	-	-	-	2	-	2	-	2
Preference share conversion	5	99	-	(9)	-	95	-	95
Purchase of non-controlling interests	-	-	-	-	-	-	(1,124)	(1,124)
At 30 September 2010	5,870	124,089	7,640	1,247	37,779	176,625	20	176,645

CONSOLIDATED BALANCE SHEET           

At 30 September 2010

Note	30 Sep 2010 £'000	30 Sep 2009 £'000
Non-Current Assets
Property, plant and equipment                                        11	219	7
Investment properties                                                    12	151,145	151,589
Investment in joint ventures                                            13	5,344	5,087
Goodwill                                                                       15	3,173	3,173
Deferred tax asset                                                         23	-	92
	159,881	159,948
Current Assets
Development and trading properties                                16	6,111	7,088
Trade and other receivables                                           17	2,230	19,077
Tax receivable	-	941
Cash and cash equivalents	67,322	102,827
	75,663	129,933
Total Assets	235,544	289,881
Current Liabilities
Trade and other payables                                               18	5,766	12,669
Tax liabilities	677	-
	6,443	12,669
Non-Current Liabilities
Bank loans                                                                    19	34,090	98,124
Preference shares                                                         20	13,324	12,612
Derivatives                                                                   26	5,042	4,431
	52,456	115,167
Total Liabilities	58,899	127,836
Net Assets	176,645	162,045
Equity
Called up share capital                                                   21	5,870	5,809
Share premium account	124,089	123,094
Merger reserve	7,640	7,640
Equity reserve	1,247	1,254
Retained earnings	37,779	23,126
Equity Attributable to Equity Holders	176,625	160,923
Non-controlling interests	20	1,122
Total Equity	176,645	162,045

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 30 September 2010

	Year Ended 30 Sep 10 £'000	Year Ended 30 Sep 09 £'000
Cash Flows From Operating Activities
Operating profit	22,184	13,738
Depreciation and amortisation	35	2
Share of results of joint ventures	(10)	39
Other gains and losses	(136)	414
Gain on sale of investment properties	(5,529)	-
Movement on revaluation of investment properties	(7,205)	-
Gain in respect of acquisition	(608)	(21,798)
Share based payment charge	434	1,000
Cash Flows From Operations Before Changes In Working Capital	9,165	(6,605)
Change in trade and other receivables	16,845	(12,994)
Change in land, development and trading properties	977	15,807
Change in trade and other payables	(6,326)	3,341
Cash Generated From / (Used In) Operations	20,661	(451)
Finance costs	(6,457)	(627)
Finance income	280	652
Dividends from joint ventures	-	10
Tax received / (paid)	1,054	(303)
Cash Flows Generated From / (Used In) Operating Activities	15,538	(719)
Cash Flows From Investing Activities
Acquisition of investment properties	(44,763)	-
Acquisition of subsidiary	-	(2,826)
Sale proceeds of investment properties	57,937	-
Investment in joint ventures	(243)	(89)
Acquisition of non-controlling interests	(76)	-
Purchase of plant and equipment	(99)	(1)
Leasehold improvements	(148)	-
Cash Flows Generated From / (Used In) Investing Activities	12,608	(2,916)
Cash Flows From Financing Activities
Bank loans repaid	(64,023)	-
Issue of shares	372	70,318
Issue cost of shares	-	(2,146)
Cash Flows (Used In) / Generated From Financing Activities	(63,651)	68,172
Net (decrease) / increase in cash and cash equivalents	(35,505)	64,537
Cash and cash equivalents at 1 October	102,827	38,290
Cash and Cash Equivalents at 30 September	67,322	102,827

NOTES TO THE ACCOUNTS

For the year ended 30 September 2010

1.    The financial information set out in this announcement is abridged and does not constitute statutory accounts for the year ended 30 September 2010 but is derived from those financial statements.  The financial information is not audited.  The auditors have reported on the statutory accounts for the year ended 30 September 2010, their report was unqualified and did not contain statements under sections 498(2) or (3) of the Companies Act 2006, and these 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 principle of IFRS.

2.    The comparative financial information for the year ended 30 September 2009 was derived from information extracted from the annual report and accounts for that period, which was prepared under IFRS and which has been filed with the UK Registrar of Companies.  The auditors have reported on those accounts, their report was unqualified and did not contain statements under sections 498 (2) or (3) of the Companies Act 2006.

3.    Operating Profit

Operating profit is stated after charging:

	Year ended	Year ended
	30 Sep 10	30 Sep 09
	£'000	£'000
Audit services - fees payable to the parent company auditors for the audit of the company and the consolidated financial statements	23	27
Non-audit services - fees payable to the company auditor for the audit of the company's subsidiaries pursuant to legislation.	35	16
Non-audit services - fees payable to the company auditor for tax services	11	6
Depreciation of owned assets	31	2
Operating lease rentals - land and buildings	148	76
Share based payments charge	434	1,000
Cost of inventories recognised as an expense	5,052	16,338
Write downs of inventories recognised as an expense	(1,830)	(647)
Movement on provision for doubtful debts	(183)	428

        Additionally, the company's auditors were paid £nil (2009 - £51,000) in connection with the group's acquisition of The Advantage Property Income Trust Limited.  These fees were incurred in connection with the enlarged group's re-admission to the Alternative Investment Market and are included as issue costs charged to share premium in respect of shares issued in accordance with that acquisition.

4.     Particulars of Employees

        The aggregate payroll costs of the above were:

	Year ended	Year ended
	30 Sep 10	30 Sep 09
	£'000	£'000
Wages and salaries	1,054	5,525
Social security costs	125	787
Pension costs	20	-
	1,199	6,312

The average monthly number of persons, including executive directors, employed by the Company during the year was seven (2009 - five).

5.     Directors' Emoluments

	Year ended	Year ended
	30 Sep 10	30 Sep 09
	£'000	£'000
Emoluments (excluding pension contributions)	899	5,459
Pension contributions	20	-
Emoluments of highest paid director	280	2,871
Pension contributions of highest paid director	20	-

       Emoluments includes a £nil payment under the Conygar profit sharing plan (2009 - £4.674 million).  One (2009: no) director received a contribution to a defined contribution pension scheme in the year as part of a salary sacrifice arrangement.  £306,000 of gains were made on the exercise of the share options, none of which were made by the highest paid director.

The board of directors comprise the only persons having authority and responsibility for planning, directing and controlling the activities of the Group.  In addition to the emoluments disclosed above, the Group incurred share based payment charges of £434,000 (2009:  £1,000,000).  The aggregate compensation of key management personnel as defined by IAS 24 "Related Party Disclosures" was therefore £1,333,000 (2009:  £6,459,000).

6.       Other Gains And Losses

	30 Sep 10 £'000	30 Sep 09 £'000
Movement in fair value of interest rate swaps	(611)	-
Other provision	136	(414)
	(475)	(414)

7.     Finance Income / Costs

	Year ended	Year ended
Finance Income	30 Sep 10	30 Sep 09
	£'000	£'000
Bank interest	280	652
Finance Costs
Bank loans	(4,266)	(627)
Loan repayment costs	(2,191)	-
Amortisation of arrangement fees	(339)	-
Notional interest on preference shares	(790)	(75)
	(7,586)	(702)

8.    Taxation on Ordinary Activities

        (a)            Analysis of charge / (credit) in the year

	Year ended 30 Sep 10 £'000	Year ended 30 Sep 09 £'000
UK Corporation tax based on the results for the period	589	-
Over provision in prior periods	(44)	(560)
Current tax	545	(560)
Deferred tax	92	212
	637	(348)
(b)          Factors affecting tax charge
The tax assessed on the profit for the year differs from the standard rate of corporation tax in the UK of 28% (2009 - 28%)

	Year ended 30 Sep 10 £'000	Year ended 30 Sep 09 £'000
Profit before taxation	14,878	13,688
Profit multiplied by rate of tax	4,166	3,833
Effects of:
Expenses not deductible for tax purposes	123	71
UK dividend income	-	(94)
Gain on acquisition not taxable	(170)	(6,103)
Losses carried forward	-	2,013
Over provision in prior periods	(44)	(560)
Share based payment not deductible for tax purposes	121	492
Schedule 23 deduction in respect of share options	(86)	-
Deferred tax no longer required	92	-
Gains not subject to UK taxation	(1,548)	-
Revaluation gains not taxable	(2,017)	-
Tax charge / (credit) for the year	637	(348)

9.       Dividends

          The directors have recommended a final dividend of 1 pence per ordinary share in respect of the year ended 30 September 2010 (2009 - nil pence).  This final dividend will amount to £1,174,000, if approved at the AGM.  In accordance with IFRS it has not been included as a liability in the financial statements.

10.     Earnings per Share

          The calculation of earnings per ordinary share is based on the profit after tax attributable to equity shareholders of £14,219,000 (2009 - £14,004,000) and on the number of shares in issue being the weighted average number of shares in issue during the period of 117,203,241 (2009 - 43,398,022).  The diluted earnings per share is based on profit for the year of £15,009,000 (2009 - £14,079,000) and on 129,720,010 (2009 - 44,687,082) ordinary shares, calculated as follows:

	2010	2009
	No.	No.
Basic weighted average number of shares	117,203,241	43,398,022
Diluting potential ordinary shares: Employee share options	27,057	292,926
Preference shares	12,489,712	996,134
Total diluted	129,720,010	44,687,082

11.     Property, Plant and Equipment

	Premises Lease £'000	Office Equipment £'000	Furniture & Fittings £'000	Total £'000
Cost
At 1 October 2008	-	20	-	20
Additions	-	1	-	1
At 30 September 2009 and 1 October 2009	-	21	-	21
Additions	148	23	76	247
At 30 September 2010	148	44	76	268
Depreciation / Amortisation
At 1 October 2008	-	12	-	12
Provided during the year	-	2	-	2
At 30 September 2009 and 1 October 2009	-	14	-	14
Provided during the year	4	15	16	35
At 30 September 2010	4	29	16	49
Net book value at 30 September 2010	144	15	60	219
Net book value at 30 September 2009	-	7	-	7

NOTES TO THE ACCOUNTS

For the year ended 30 September 2010

12.     Investment Properties

	Freehold £'000	Long Leasehold £'000	Reverse Lease Premiums £'000	Total £'000
Valuation at 30 October 2008	-	-	-	-
Fair value with subsidiary	141,357	7,805	2,427	151,589
Addition	-	-	81	81
Disposals	-	-	(41)	(41)
Reverse lease premium amortisation	-	-	(40)	(40)
Valuation at 30 September 2009	141,357	7,805	2,427	151,589
Fair value acquired with subsidiaries	12,593	32,170	-	44,763
Additions	75	(8)	-	67
Disposals	(49,447)	(1,050)	(1,760)	(52,257)
Reverse lease premium amortisation	-	-	(222)	(222)
Movement on revaluation	4,119	3,086	-	7,205
Valuation at 30 September 2010	108,697	42,003	445	151,145

The historical cost of the properties acquired in the year is £73,254,000 (2009 - £226,842,000).  The historical cost of properties held at 30 September 2010 is £233,328,000 (2009: £226,842,000).

The properties were valued by King Sturge, independent valuers not connected with the Group, at 30 September 2010 at market value in accordance with the Practice Statements contained in the RICS Appraisal and Valuation Standards published by the Royal Institution of Chartered Surveyors which conform to international valuation standards.

The Group has pledged £112,310,000 (2009 - £107,935,000) of investment property to secure Lloyds Banking Group debt facilities and £35,235,000 (£2009 - £43,654,000) to secure Capita debt facilities. 

The property rental income earned from investment property, which is leased out under operating leases amounted to £15,098,935 (2009 - £1,235,552).

Gain on sale of investment properties	30 Sep 10	30 Sep 09
	£'000	£'000
Gross proceeds on sales of investment properties	58,755	500
Costs of sales	(818)	-
Net proceeds on sales of investment properties	57,937	500
Book value	(52,408)	(73)
Gain on sale	5,529	427

13.     Investments

          Joint Ventures

	30 Sep 10 £'000	30 Sep 09 £'000
At 1 October 2009	5,087	5,047
Share of loss retained by joint ventures	(10)	(39)
Investment in joint venture	267	89
Dividends received	-	(10)
At 30 September 2010	5,344	5,087

        The Group has a 50% interest in a joint venture, Conygar Stena Line Limited, which is a property development company.  It also has a 50% interest in a joint venture, CM Sheffield Limited, which is a property trading company.

        The following amounts represent the Group's 50% share of the assets and liabilities, and results of the joint ventures.  They are included in the balance sheet and income statement:

	Year ended 30 Sep 10 £'000	Year ended 30 Sep 09 £'000
Assets
Current assets	5,348	5,093
	5,348	5,093
Liabilities
Current liabilities	(4)	(6)
	(4)	(6)
Net Assets	5,344	5,087
Operating loss	(10)	(39)
Finance income	-	-
Loss before tax	(10)	(39)
Tax	-	-
Loss after tax	(10)	(39)

          There are no contingent liabilities relating to the Group's interest in joint ventures, and no contingent liabilities of the ventures themselves.

14.   Fixed Asset Investments

        Subsidiaries

        The principal companies in which the Company's interest is more than 10% are as follows:

Company name	Principal activity	Country of registration	% of Equity held
Conygar Holdings Ltd	Holding Company	England	100%
Martello Quays Limited	Property trading and development	England	100%
Conygar Wales PLC	Holding Company	England	60%*
Conygar Bedford Square Ltd	Property trading and development	England	100%*
Conygar Properties Ltd	Property trading and development	England	100%*
Conygar Developments Ltd	Property trading and development	England	100%*
Conygar Strand Ltd	Property trading and development	England	100%*
Conygar Hanover Street Ltd	Property trading and development	England	100%*
The Advantage Property Income Trust Ltd	Property investment	Guernsey	100%*
TAPP Property Ltd	Property investment	Guernsey	100%*
TOPP Holdings Ltd	Property investment	Guernsey	100%*
TAPP Maidenhead Ltd	Property investment	Guernsey	100%*
TOPP Bletchley Ltd	Property investment	Guernsey	100%*
TOPP Property Ltd	Property investment	Guernsey	100%*
Conygar Stena Line Ltd	Property trading and development	England	50%*
CM Sheffield Ltd	Property trading and development	England	50%*
Conygar Haverfordwest Ltd	Property trading and development	England	60%*
Lamont Property Acquisition (Jersey) I Ltd	Property investment	Jersey	100%*
Lamont Property Acquisition (Jersey) II Ltd	Property investment	Jersey	100%*
Lamont Property Acquisition (Jersey ) III Ltd	Property investment	Jersey	100%*
Lamont Property Acquisition (Jersey) IV Ltd	Property investment	Jersey	100%*
Lamont Property Acquisition (Jersey) V Ltd	Property investment	Jersey	100%*
Lamont Property Acquisition (Jersey) VII Ltd	Property investment	Jersey	100%*

        *  Indirectly owned 

15.   Goodwill

	30 Sep 10	30 Sep 09
	£'000	£'000
At 1 October 2009 and 30 September 2010	3,173	3,173

          The goodwill arose upon the acquisition of the non-controlling interests in Martello Quays Limited and represents the excess of the consideration over the fair value of the identifiable net assets acquired.  The goodwill has been wholly allocated to the development project within Martello Quays Limited, which is considered to represent a single income generating unit.  The development project is still at an early stage, but management have prepared forecasts indicating that the net present value of the project exceeds its carrying value when discounted at the Group's weighted average cost of capital.

16.   Property Inventories

	30 Sep 10	30 Sep 09
	£'000	£'000
Properties held for resale or development	6,111	8,918
Write-down of property inventory	-	(1,830)
	6,111	7,088

17.   Trade and Other Receivables

	30 Sep 10	30 Sep 09
	£'000	£'000
Trade receivables	2,286	4,244
Provision for doubtful debts	(245)	(428)
	2,041	3,816
Amounts owed by group undertakings	-	-
Other receivables	132	14,276
Prepayments and accrued income	57	985
	2,230	19,077

       The directors consider that the carrying amount of trade and other receivables approximates to their fair value.

18.  Trade and OtherPayables

	30 Sep 10	30 Sep 09
	£'000	£'000
Amounts owed to group undertakings	-	-
Social security and payroll taxes	45	1,171
Trade payables	1,300	421
Other payables	69	5,311
Accruals and deferred income	4,352	5,766
	5,766	12,669

        The directors consider that the carrying amounts of the trade and other payables approximate to their fair value due to the short period of repayment.

19.     Bank Loans

	30 Sep 10	30 Sep 09
	£'000	£'000
Bank loans	35,586	99,609
Debt issue costs	(1,496)	(1,485)
	34,090	98,124

20.     Preference Shares

	30 Sep 10	30 Sep 09
	£'000	£'000
Preference shares	13,324	12,612

        As part of the offer for The Advantage Property Income Trust Limited the Company issued 62,902,335 convertible preference shares of £0.01 each of which 62,313,045 (2009:  62,687,730) were outstanding at the year end.  The preference shares are convertible at any point into ordinary shares at the option of the preference shareholder.  The conversion rate is one ordinary share for five preference shares.  Any preference shares not converted are redeemable for £0.25 each on 31 December 2011.

        Although equity share capital at law, the preference shares are classified as hybrid instruments under IFRS consisting of a discounted debt element of £0.20 per share and an equity element of £0.02 per share which has been credited to an equity reserve.  A notional interest element is charged to the income statement over the period to redemption.

The movement on the preference shares during the year was as follows:

	30 Sep 2010	30 Sep 2009
	£'000	£'000
At 30 September 2009	12,612	-
Fair value of preference shares at date of issue	18	13,839
Equity components	(2)	(1,258)
Liability component at date of issue	12,628	12,581
Conversions to ordinary shares in the period at carrying value	(95)	(44)
Notional interest charge	791	75
At 30 September 2010	13,324	12,612

21.   Share Capital

        Authorised share capital:

	30 Sep 10	30 Sep 09
	£	£
140,000,000 (2009- 140,000,000) Ordinary shares of £0.05 each	7,000,000	7,000,000
150,000,000 (2009 - 150,000,000) Preference shares of £0.01 each	1,500,000	1,500,000

          Allotted and called up:

Amounts recorded as equity:	30 Sep 10		30 Sep 09
	No	£'000	No	£'000
Ordinary shares of £0.05 each	117,391,133	5,870	116,172,721	5,809

          Amounts recorded as liability:

	30 Sep 10		30 Sep 09
	No	£'000	No	£'000
Preference shares of £0.01 each	62,313,045	623	62,687,730	627

The Preference shares were issued in connection with the offer for The Advantage Property Income Trust Limited.  They are convertible at any stage into Ordinary shares.  The conversion rate is one Ordinary share for five Preference shares.  Any Preference shares not converted are redeemable for £0.25 each on 31 December 2011. 

During the year, the Company issued 502,992 ordinary shares of £0.05 each in connection with the offer for The Advantage Property Income Trust Limited.

On 10 December 2009, the Company issued 625,000 ordinary shares of £0.05 each in respect of exercises of options under the Conygar Share Option Plan.  The aggregate consideration was £372,000.

During the year, the Company issued 90,240 ordinary shares of £0.05 each in respect of conversions of 451,200 preference shares.  The carrying value of the liability which was treated as consideration for these issues was £93,000 and £9,000 was transferred from equity reserve to reflect the equity elements of the preference shares.

 The resulting movement on the group's share capital during the year was as follows:

Allotted and Called Up

	Price £	No.	£'000
At 30 September 2008		41,647,906	2,082
Share issue - 17 August 2009	0.500	625,000	31
Share issue - 2-30 September 2009	1.153 (average)	6,887,831	345
Share issue - 18 September 2009	1.050	66,969,063	3,349
Share issue - 18 September 2009	1.100	42,921	2
At 30 September 2009		116,172,721	5,809
Share issue - 7 October 2009	1.140	350,880	18
Share issue - 20 October 2009	1.155	45,696	2
Share issue - 17 November 2009	1.100	18,049	1
Share issue - 26 November 2009	1.100	1,380	-
Share issue - 10 December 2009	0.595 (average)	625,000	31
Share issue - 14 December 2009	1.100	1,532	-
Share issue - 7 January 2010	1.200	106,416	6
Share issue - 7 January 2010	1.100	21,000	1
Share issue - 2 February 2010	1.100	1,316	-
Share issue - 10 February 2010	1.100	43,297	2
Share issue - 18 August 2010	1.100	3,846	-
At 30 September 2010		117,391,133	5,870

22.   Share Based Payments

No options were granted in either the current or prior year.

The Group and Company recognised total expenses of £434,000 (2009 - £1,000,000) in relation to equity settled share-based payment transactions.

23.   Deferred Tax Asset

        Deferred tax assets are recognised in the accounts as follows:

	30 Sep 10		30 Sep 09
	Provided £'000	Not Provided £'000	Provided £'000	Not Provided £'000
Share based payments	-	2	92	-
Losses	-	1,464	-	2,103
	-	1,466	92	2,103

The deferred tax asset in respect of the trading losses carried forward has not been recognised on the basis that it is uncertain when taxable profits will be available for offset.

        Movements on the recognised assets are as follows:

	Share Based Payments £'000
At 1 October 2008	304
Debit to profit and loss account	(212)
At 30 September 2009	92
At 1 October 2009	92
Debit to profit and loss account	(92)
At 30 September 2010	-

24.   Acquisitions

On 24 November 2009, the Group acquired six Jersey-based companies (the "Lamont portfolio") which hold seven freehold and long leasehold buildings for a total cash consideration of £44,763,000 million.  Although effected through the acquisition of separate legal entities, the Lamont portfolio does not in substance constitute a business combination as defined by IFRS 3 and has accordingly been treated as an asset purchase.  The portfolio consists of:

·    Brennan House, Farnborough Aerospace Centre, Hampshire

·    Three units at Aker Village, Kirkhill, Aberdeen

·    Cambridge Road, Whetstone Business Park, Leicester

·    Kelvin II, Kelvin Close, Birchwood Park, Warrington

·    Crystal Drive, Sandwell Business park, Oldbury, West Midlands

The annual rent roll is approximately £4.41 million representing a net initial yield of 9.8%.  The buildings comprise 562,000 sq ft of lettable space and occupy some 47 acres.

The Group also acquired the remaining 2.15% of the issued share capital of The Advantage Property Income Trust Limited ("TAP") and thereby owned 100% of the issued share capital of the company by 8 January 2010.

The transaction has been accounted for by the purchase method of accounting:

	30 Sep 2010	30 Sep 2009
	£'000	£'000
Share of net assets acquired	1,281	50,984
Non-controlling interests	-	(1,070)
Gain in respect of acquisition	(608)	(21,798)
Total consideration	673	28,116
Satisfied by:
Ordinary shares at fair value	580	7,939
Preference shares at fair value	17	13,839
Cash	76	5,950
Directly attributable costs	-	388
	673	28,116

25.   Commitments

        Group as lessee:

       At 30 September 2009, the Group and Company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

	30 Sep 10	30 Sep 09
	£'000	£'000
Within one year	187	77
In the second to fifth years inclusive	503	61
	690	138

       Group as lessor:

       In addition, the Group holds retail, office, industrial and leisure buildings as investment properties which are let to third parties.  These are non-cancellable leases and the income profile based upon the unexpired lease length was as follows:

	30 Sep 10	30 Sep 09
	£'000	£'000
Less than one year	13,950	12,427
Between one and five years	36,791	35,623
Over five years	27,269	17,645
	78,010	65,695

       At 30 September 2010, the Group was committed to complete two property transactions.  One was the purchase of land at Haverfordwest and the commitment at the balance sheet date was £11,700,000 plus costs.  The transaction completed on 4 November 2010.

       The Group is still committed to complete a purchase of land at Clun Bach, Fishguard, provided a number of conditions precedent relating to the receipt of suitable planning consents are met.  A deposit of £36,500 was paid on 4 August 2010 and the remaining commitment of £329,500 plus costs is outstanding at the time of the preparation of these accounts.

26.  Financial Instruments

       The interest rate profile of the Group bank borrowings at 30 September 2010 was as follows:

	Interest Rate	Maturity	30 Sep 2010
			£'000
Lloyds Banking Group (1)	LIBOR +2%	2 - 5 years	20,150
Capita (2)	5.24%	2 - 5 years	15,435
			35,585

(1)  Senior bank facility repayable 27 January 2015.  Margin is on sliding scale from 2% to 3.5% subject to loan to value covenants.

(2)  Interest rate fixed until 18 January 2013.

Loans

As at 30 September 2010, TAPP Property Limited maintained a facility with the Lloyds Banking Group of up to £78,000,000 (2009: £78,000,000) under which £20,150,000 (2009 - £67,935,000) had been drawn down.  This facility is repayable on or before 27 January 2015 and is secured by fixed and floating charges over the assets of the TAPP Property Limited group and the Lamont companies.  The facility is subject to a maximum loan to value covenant of 70% and an interest cover ratio covenant of 150%.

As at 30 September 2010, TOPP Property Limited maintained a facility with Capita of £35,267,000 (2009: £35,267,000) of which £15,435,000 (2009 - £31,674,000) had been drawn down.  This facility is repayable on or before 18 January 2013 and is secured by fixed and floating charges over the assets of the TOPP Property Limited group.  The facility is subject to a maximum loan to value covenant of 70% and an interest cover ratio covenant of 135%.

Fair Values of Financial Assets and Financial Liabilities

       The fair values of all the Group's financial assets and liabilities are set out below:

	Book Value	Book Value	Fair Value	Fair Value
	30 Sep 2010	30 Sep 2009	30 Sep 2010	30 Sep 2009
	£'000	£'000	£'000	£'000
Financial Assets
Cash	67,322	102,827	67,322	102,827
Financial Liabilities
Floating rate borrowings	20,150	67,935	20,150	67,935
Fixed rate borrowings	15,435	31,674	15,250	31,690
Interest rate swaps	5,042	4,431	5,042	4,431
Preference share liability	13,324	12,612	13,324	12,612

       Derivative Financial Instruments

	Protected Rate %	Expiry	Market Value at 30 Sep 2010	Market Value at 30 Sep 2009
			£'000	£'000
£21.8 million (2009: £21.8 million) swap	5.135	Feb 2015	(3,182)	(2,234)
£12.7 million (2009: £22.0 million) swap	5.15	Feb 2015	(1,860)	(2,197)
			(5,042)	(4,431)

       The valuation of the swaps was provided by JC Rathbone Associates Limited, is a tier 2 valuation and represents the change in fair value since execution.

       The fair value of the Group's trade debtors and other receivables and trade creditors and other payables is not considered to vary from historic cost due to the short term nature of these financial assets and liabilities.  As such, they are excluded from the disclosure. 

27.  Events Since theBalance Sheet Date

On 4 November 2010, the Group acquired, for £14 million, 86 acres of land at Haverfordwest, Pembrokeshire, close to the town centre which has outline planning consent for 900 residential units.  The consideration was satisfied out of the group's cash resources. 

28.  The Report and Accounts for the year ended 30 September 2010 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, 110 Wigmore Street, London W1U 3RW.  They are also available on the website www.conygar.com.

       The Company's Annual General Meeting will be held at 3.00pm on Wednesday, 5 January 2010 at the offices of 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.

Glossary of Terms 

AIM                                       The Alternative Investment Market of the London Stock Exchange

EPRA                                     European Public Real Estate Association

EPRA EPS                             A measure of earnings per share designed by EPRA to present underlying earnings from core operating activities

EPRA NAV                            A measure of net asset value designed by EPRA presenting net asset value excluding the effects of fluctuations in value in instruments that are held for long term benefit, net of deferred tax

EPS                                         Earnings per share, calculated as the earnings for the period after tax attributable to members of the parent Company divided by the weighted average number of shares in issue in the period

Equivalent Yield                    The constant capitalisation rate which, if applied to all cash flows from an investment property, equates to the market rent

Net Initial Yield                     Annual net rents expressed as a percentage of the investment property valuation

NAV                                       Net asset value

Reversionary Yield                The anticipated yield which the Net Initial Yield will rise to once the rent reaches the ERV

Conygar                                  The Conygar Investment Company PLC

TAP                                        The Advantage Property Income Trust Limited

Loan to Value                         The amount of borrowing divided by the value of investment property expressed as a percentage

PBT                                        Profit before taxation

UK                                          United Kingdom

ERV                                        Estimated Rental Value being the open market rent as estimated by the Company's valuers

NNNAV or Triple Asset Value          A measure of net asset value taking into account asset revaluations, the fair value of debt and any associated tax effects

Passing Rent                          The annual gross rental income excluding the effects of lease incentives

Tenant Break                         An option in a lease for a tenant to terminate that lease early

Lease Re-gear                       A mutual re-negotiation of a lease between landlord and tenant prior to a lease expiry date

Average Unexpired               The average unexpired lease term expressed in years weighted by rental income

Lease Length

Rent-Free Period                   A lease incentive offering the tenant a period without paying rent

Vacancy Rate                         The estimated rental value of vacant properties expressed as a percentage of the total estimated rental value of the portfolio

 

END

 

 

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