Final Results

Helical Bar PLC 6 June 2002 6 June 2002 HELICAL BAR PLC ('Helical'/'Company') PRELIMINARY RESULTS FOR THE YEAR TO 31 MARCH 2002 HELICAL'S OUTPERFORMANCE RECORD CONTINUES HIGHLIGHTS * 14 per cent growth in net assets per share, before Special Dividend * Pre-tax profits of £22.6m (2001: £25.8m) * Special Dividend of 100p per share paid in April 2002 * Total ordinary dividend of 13.75p per share (2001: 12.5p) - up 10 per cent * Total Shareholder Return (share price growth plus dividends) of 161p: 22 per cent John Southwell, Chairman, commented: 'By de-gearing and, effectively, stepping aside during this cyclical period of uncertainty, the Company is in a strong position to take advantage of opportunities as they arise. Whilst the short term outlook is clouded by weaker tenant demand the Company faces the medium term future with optimism that it will be able to maintain its record of outperformance.' Further information: Helical Bar plc Tel: 020 7629 0113 (after 2.00 p.m.) Michael Slade (Managing Director) Nigel McNair Scott (Finance Director) Issued by: Financial Dynamics Tel: 020 7831 3113 Stephanie Highett/Dido Laurimore CHAIRMAN'S STATEMENT The year to 31 March 2002 was another year of outperformance for Helical culminating in the Company winning the Company of the Year Award at the annual PLC Awards and the declaration of a 100 pence per share special dividend, the second in four years. The Company of the Year Award is sponsored by Pricewaterhouse Coopers and held in association with the London Stock Exchange and the Financial Times. It is presented each year to a business that has demonstrated its success over the short, medium and long term and has a professional management team, a clear and consistent strategy and sound finances. Helical is widely acknowledged by the investment community as a core holding amongst small to mid cap property stocks. The Company has consistently outperformed its peers, sector benchmarks and indices and is ranked 1st against all other funds in the IPD Universe (the main industry sector benchmark) over the past three, five, ten and twelve years. The year to 31 March 2002 was yet another good one for Helical, although profits and revaluation surpluses did not match the quite exceptional levels achieved last year. The good level of profits enables the Board to recommend to shareholders a final dividend of 8.25p per share (2001: 7.50p) an increase of 10%. This proposed dividend, together with the interim dividend of 5.50p (2001: 5.00p) paid in December 2001, makes a total of 13.75p per share (2001: 12.50p). This is an increase of 10% on last year not taking into account the special dividend of 100p per share paid in April 2002. The total of 13.75p per share (excluding the special dividend) is covered over four times by profits after tax. Net asset value Before accruing for the 100p special dividend the net asset value per share of the Company rose by 14% (2001: restated 31%) to 888p, on an undiluted basis, and by 13% (2001: restated 30%) to 854p on a diluted basis. After accruing for the special dividend, paid in April 2002, the net asset value per share of the Company rose by 2% on both an undiluted and diluted basis to 793p (2001: restated 779p) and 766p (2001: restated 754p) respectively. These figures take no credit for any surplus of value in the trading and development stock. However, the net asset value per share figures do reflect the impact of the adoption of FRS19 on Deferred Tax. The effect of adopting FRS19 has been to recognise in the group's balance sheet the deferred tax liability relating to accelerated capital allowances, the deferred tax asset relating to tax losses and the consequent recognition of negative goodwill arising from the acquisition of a subsidiary company. During the year the Company's share price rose from 742.5p to a closing 790p (which reflects the ex-dividend adjustment after the 100p special dividend was declared). This share price performance, taken together with the dividends paid in the year by the Company, gave a total shareholder return of 8% in the year to 31 March 2002. This increases to 22% if the special dividend declared in March 2002 and paid in April 2002 is taken into account. The future In June 2000 we noted that we operated in an increasingly volatile world where a stop in the strong growth in the United States economy could impact unfavourably in the UK and particularly in London and the South East. In anticipation of this the Company de-risked its development programme and, where appropriate, sold investment properties reducing gearing in the process. The comments proved all too prescient and the downturn in the US and UK economies, which were exacerbated by events last Autumn, have had an impact on the UK property market. Recent reductions in rental levels in Central London and a shortage of potential tenants in the Thames Valley are testimony to that impact. All the Company's schemes under construction are forward funded by institutions. A number of new sites in Central London and the South East under the Company's control, are proceeding through the planning process before development. In this period of slower tenant demand it is unlikely that the Company will generate the substantial level of profits seen in recent years until these future developments come on stream. On the investment side we are seeing a growing surplus of rental income over finance costs as void space is let up and reversions fall in at rent review. At the same time, the reduction in gearing has reduced the finance costs of holding investment properties. Since the year end we have been in discussions with potential purchasers of over £100m of Central London properties. Should these sales proceed, our gearing level and our exposure to Central London will reduce accordingly. By de-gearing and, effectively, stepping aside during this cyclical period of uncertainty, the Company is in a strong position to take advantage of opportunities as they arise. Whilst the short term outlook is clouded by weaker tenant demand the Company faces the medium term future with optimism that it will be able to maintain its record of outperformance. John Southwell Chairman 6 June 2002 DEVELOPMENT PROGRAMME It is our objective to provide a continuing flow of development profits from pre-let and speculative office, retail and industrial schemes in partnership with funding institutions. Whilst a small number of schemes are financed with bank funding and, therefore, remain on our balance sheet, the majority of our schemes are forward sold to institutional investors. This policy has a significant effect on our return on capital employed and has enabled us to create and sustain one of the largest development programmes in the country. Development programme - end values Office Retail Industrial Total £m £m £m £m ______ ______ ______ ______ Completed programme Let and sold 1993-2002 631 232 37 900 Current programme For completion in year to: 31 March 2003 125 12 - 137 31 March 2004 140 51 - 191 31 March 2005+ 70 - - 70 ______ ______ ______ ______ 335 63 - 398 ______ ______ ______ ______ Offices The office development programme at Helical continues to provide high quality office accommodation to meet the needs of the professional and service sectors in London and the South East. Offices at One Plough Place London EC4, The Saunders Building London W6, 200 Hammersmith Road London W6, and The Meadows Camberley were all completed during the year. New office developments were started at 3 Bunhill Row London EC1, The Heights Brooklands Weybridge and The Waterfront Fleet. Since the year end we have started work on our prime development at 40 Berkeley Square London W1. Completed programme Since Helical recommenced its development activity in 1993 it has completed and let new office buildings with a value at completion, of over £630m. The most recent additions to this list have all contributed to the profits for this year and are at: One Plough Place, London EC4 One Plough Place is an office building of 53,000 sq ft with 5,000 sq ft of restaurant space located at the junction of Plough Place and Fetter Lane in the heart of Midtown, Central London. Forward funded by Henderson Investors on behalf of one of their clients, this building was completed in May 2001. The restaurant space was quickly let to Chez Gerard for one of its Livebait seafood restaurants. Shortly afterwards the whole of the office space was let to The New Opportunities Fund, a Government Organisation distributing lottery funding. The Saunders Building, Hammersmith Road, London W6 The Saunders Building is an office development of 15,000 sq ft newly constructed behind an existing facade in the heart of Hammersmith in West London. Funded using internal resources this development was completed in October 2001. The Saunders Building was subsequently let to a joint venture between Sony and Ericsson and then sold to Royal & Sun Alliance. 200 Hammersmith Road, London W6 Next to The Saunders Building is a 65,000 sq ft new headquarters office development at 200 Hammersmith Road. This development was forward sold in advance of construction to a Merrill Lynch Investment Managers/HQ Global Offices Limited partnership for operation as a serviced office centre. The building was completed in November 2001. Current programme Helical currently has five office developments either in the course of construction or completed awaiting letting. The Meadows, Camberley This 140,000 sq ft office development was completed in March 2002 and is currently available to let. Funded by Scottish Widows the development is a joint venture with Morgan Grenfell Property Unit Trust. Comprising four distinct buildings the development is close to Blackwater Station, Camberley with views overlooking the River Blackwater and adjacent meadows towards The Meadows Retail Park. 3 Bunhill Row, London EC1 3 Bunhill Row is a 95,000 sq ft office development due for completion in December 2002. In June 2001 the building was pre-let to solicitors Linklaters. Shortly after the pre-letting Helical forward sold the development for £63.5m, reflecting a yield of 6.65%, to a limited partnership formed by Matrix Securities on behalf of its investors. Under the terms of the sale to Matrix Securities the total sale proceeds were paid to Helical in advance of construction with certain outstanding contingent liabilities. Consequently, the Company's cash balances at the year end include a sum of £28,300,000 payable to the construction team over the remaining period of construction. The Heights, Weybridge, Surrey The Heights, Weybridge, Surrey is a 340,000 sq ft office campus development currently under construction next to the UK headquarter buildings of Proctor & Gamble and Sony. Spread over a 22 acre site acquired from Proctor & Gamble the development was forward funded by Prudential Portfolio Managers. The development will comprise five separate buildings and is expected to be completed in March 2003. The Waterfront Business Park, Fleet The Waterfront Business Park, Fleet comprises 40,000 sq ft of 1990's built offices and 50,000 sq ft of 1960s built industrial buildings all held by Helical as an investment. Adjacent to the Business Park is a 4.5 acre site which is currently being developed. This development will comprise three buildings totalling 56,000 sq ft of office space. Forward funded by Aberdeen Property Investors, the development is due to be completed in October 2002. 40 Berkeley Square, London W1 40 Berkeley Square is a prime office development. This former London headquarters of advertising agency J. Walter Thompson is to be demolished and replaced by a high specification modern office building overlooking the Square. Comprising eight floors of offices, the site is to be redeveloped in a joint venture with current owners, Morley Fund Management. Future programme Looking to the future we are in discussions on a number of new development opportunities in Central London and the South East in conjunction with some of the leading institutions with whom we have created strong relationships in the past. Retail developments During the year Helical Retail concluded negotiations to redevelop Accrington town centre and has now started work on the development. This 60,000 sq ft redevelopment of the market square has been pre-sold to Bilsdale, a local investment fund, with 40,000 sq ft of the space pre-let to Wilkinsons and JJB Sports. It is expected that the development will be completed in early Spring 2003. In Wigan, long running negotiations with land owners have now been concluded to enable a site to be sold with planning permission to B&Q for the construction of a 135,000 sq ft superstore. Completion of this retail warehouse is expected to be in Spring 2003. In addition to these two retail developments which are under construction, negotiations continue in respect of developments in Blackburn, Hanley, Ipswich and Wigston. Industrial developments During the year, the Company completed a 104,300 sq ft warehouse at Hayes, near Heathrow, London. Pre-let to Allport Limited, the building was forward funded by Hill Samuel Property Unit Trust. INVESTMENT PORTFOLIO Our investment philosophy is based on four guiding principles. Helical actively manages its investment portfolio, rotating between sectors to maximise its exposure to growth stock. Gearing is used on a tactical basis, being raised to accentuate property performance when property returns are judged to materially outperform the cost of debt. The average number of properties held is kept small to facilitate fast repositioning of the portfolio and encourage management focus on key assets. Finally, there is a preference for multi-let stock where value can be added through refurbishment and lease restructuring. During the course of the financial year, we continued to rationalise our portfolio, raising just under £70m from the sale of 17 of our smallest properties in two portfolios together with a retail park at Nottingham and a City office at 48 Gracechurch Street. All sales were concluded above valuation, producing a net surplus of circa £2.5m or 4%. 48 Gracechurch Street was a notable success. Having been acquired in early 2000 for just over £7m, it was refurbished, let to seven tenants and sold for £14.55m to show a profit of over 50% on cost. Over £42m was invested through a combination of capital expenditure on the existing portfolio and, more significantly, on nine purchases mainly in the industrial and out of town retail sectors. Last year we commented that the process of letting up voids and securing reversions at rent review should generate capital uplifts even in a flat market. This proved to be the case during the year, as our portfolio produced a 4.4% valuation increase at a time when market indices showed no underlying capital growth in the property market. Until we see stronger economic activity and a recovery in rental values, the principal drivers of future performance will continue to be asset management initiatives together with stock selection on new purchases. The current valuation yields on the portfolio of 7.2% initial with a reversionary yield of 9.2% allow for notional purchasers' costs of 5.75%. In practice, Helical earns a yield of 7.6%, anticipated to rise to 9.7%, which compares favourably against the current cost of finance. Since the year end, we have acquired two more industrial estates in the south-east, with asset management potential for just under £10m. We also have a number of Central London offices in the course of sale which could potentially raise over £100m. The net result of these transactions, if concluded, will be to raise our reversionary yield towards 10%, and move our London weighting nearer to 60% and our industrial weighting up to 25%. At a time of little rental growth, we are targeting acquisitions that are not dependent on market momentum to deliver attractive returns. These tend to be ' turnaround' situations where physical and planning improvements, lettings and lease restructurings create value. In the meantime, we continue to focus on releasing the reversionary potential of our existing portfolio, a process which should continue to deliver further capital uplifts. Sector weightings West End Offices 36% South East Offices 5% City Offices 15% Industrial 18% Other Central London Offices 20% Out of Town Retail 6% ____ ____ Total Central London Offices 71% Total Other Sectors 29% Valuation Statistics Capital Valuation Valuation Valuation Valuation Value Yields Yields Yields Yields Increases Year Ended True 31.03.02 Initial Reversionary Equivalent Equivalent West End Offices 7% 6.8% 8.5% 7.8% 8.2% City Offices 2% 7.2% 9.0% 8.5% 9.0% Other Central London 6% 6.1% 9.8% 9.2% 9.7% Offices South East Offices 3% 8.5% 9.2% 8.7% 9.2% Industrial 4% 9.0% 10.6% 10.1% 10.7% Out of town retail 3% 6.8% 8.1% 7.9% 8.3% Total portfolio 4.4% 7.2% 9.2% 8.6% 9.1% PROPERTIES WITH VALUE IN EXCESS OF £8m (92% OF INVESTMENT ASSETS) All freehold except Rex House ADDRESS COMMENTS ACQUIRED GROWTH GROWTH CURRENT SINCE SINCE AVERAGE ACQUISITI- ACQUISITI- PASSING ON % p.a. ON % p.a. RENT p.s.f RENTAL CAPITAL VALUE VALUE City Offices Cheapside House, 70,000 sq. ft. of multi-let 1997 14.3% 10.9% £33.00 Cheapside, offices refurbished and let London EC2 in 1998 plus prime retail. 5-10 Bury Street, London 28,000 sq. ft. of multi-let 1997 13.2% 13.0% £29.00 EC3 offices subject to rolling refurbishment. 66 Prescot Street, London 110,000 sq.ft. top 2001 0% 9.2% £22.00 E1 specification office built in 1992. 50% share. West End Offices 60 Sloane Avenue, 75,000 sq. ft. flagship office 1999 15.3% 7.3% £35.00 Brompton building built in 1994, let Cross, London SW3 to Leo Burnett plus 32,000 sq. ft. of retail and restaurant accommodation. Capital House, Marylebone 90,000 sq.ft. 1991 built 1998 10.2% 14.1% £32.00 Road, Paddington, London multi-let offices plus NW1 47,000 sq. ft. let to Marks & Spencer at £0.60 p.s.f. until December 2002. Rex House, Lower Regent 63,000 sq. ft. of newly 2000 17.3% 27.3% £57.00 Street, London SW1 refurbished offices plus 28,000 sq.ft. retail and gym. Leasehold expiring 2035. 141-143 Drury Lane, 40,000 sq. ft. multi-let 1998 14.3% 13.3% £23.50 Covent office building scheduled for Garden, London WC2 refurbishment or residential conversion after 2002. 71 Kingsway, London WC2 30,000 sq. ft. office building 1998 12.6% 13.9% £34.00 subject to rolling refurbishment. Other Central London 61 Southwark Street, 65,000 sq. ft. of multi-let 1998 25.7% 24.5% £17.00 London offices subject to rolling SE1 refurbishment programme. 4 & 5 Paris Gardens, 45,000 sq. ft. offices 2000 11.0% 17.3% £24.50 Southwark, acquired vacant and London SE1 simultaneously pre-let to Guardian IT. Refurbished in 2000. The Interchange, Camden 65,000 sq. ft. of loft 1999 14.7% 13.9% £32.00 Lock, offices let to Associated NW1 Press Television News. 90% share. The Rotunda Complex, Oval 50,000 sq. ft. of multi-let 1998 20.3% 18.0% £19.00 Road, Camden NW1 loft office village. Shepherds Building, 155,000 sq. ft. of loft 2000 11.8% 10.7% £25.00 London offices refurbished in 2001. W14 South East Offices Waterfront Business Park, 40,000 sq. ft. of 1990s 2000 4.5% 7.6% £21.00 Fleet offices plus 50,000 sq. ft. of 1960s industrial capable of office redevelopment. Out of Town Retail Weston Retail Park, 140,000 sq. ft. anchored 1999 16.6% 13.3% £6.50 Weston by Great Mills, Super Mare Comet and Carpetright. 75% share. 1 & 2 Sprucefield Retail 50,000 sq. ft. Currys and 2001 0% 0% £15.00 Park, PC World. 50% share. Lisburn Sainsbury, Wednesfield 70,000 sq. ft. 2001 0% 0% £11.00 superstore. 75% share. Industrial Aycliffe & Peterlee 2m sq. ft of industrial 1987 4.8% 10.7% £2.50 assets. Mill Street, Slough 185,000 sq. ft. with 2002 - - £6.50 refurbishment potential. FINANCIAL REVIEW RESTATED PRIOR YEAR FIGURES Following the adoption of FRS19 on Deferred Tax the group has restated its taxation charge for the year to 31 March 2001 and the provision for liabilities and charges at that date. The Company has also restated a prior year acquisition of a property investment subsidiary, Glenlake Limited. This company was acquired with tax losses with a fair value, under FRS19 principles, of £6.9m. In recognising the value of these tax losses the Company has accounted for negative goodwill of £6.9m. These restated figures have also resulted in changes to prior years' net asset values per share and earnings per share. PROFITS Gross profits for the year were £45.0m. These compare with gross profits for the year to 31 March 2001 of £56.3m and include net rental income after property overheads of £27.8m (2001: £25.5m) and trading profits of £0.2.m (2001: £0.9m). Our development programme contributed £17.1m (2001: £29.5m). The share of associated companies profits were £1.0m (2001: £0.1m) The surplus over book value on sale of investment properties was £2.5m (2001: £0.7m) with a loss of £0.2m (2001: nil) on the sale of an investment property holding subsidiary. Interest paid on borrowings, net of interest received on cash balances reduced from £19.2m to £14.8m. This was after capitalisation of £1.0m of interest (2001: £1.6m). Pre-tax profits fell by 12.4% from £25.8m to £22.6m. With an effective tax charge of 24% (2001: restated 21%) and minority interest of £0.2m (2001: £0.1m), profits before dividends fell by 15.7% to £17.1m. Earnings per share on a diluted basis fell by 9% to 57.8p per share. DIVIDENDS The Board is recommending to members at the Annual General Meeting on 24 July 2002 a final dividend of 8.25p per share (2001: 7.50p) to be paid on 25 July 2002 which, with the interim dividend of 5.50p, makes a total of 13.75p. This is an increase of 10% on the previous period's dividend of 12.50p. This is covered over four times by profits after tax. During the year, a special dividend of 100.00p was declared as payable to shareholders on the Company's share register on 2 April 2002. This dividend was paid on 26 April 2002. NET ASSETS As noted above, the net assets of the Company reflect the adoption of FRS19 on Deferred Tax and the recognition of negative goodwill in respect of the acquisition of Glenlake Limited in June 1999. An adjustment of £7.1m has been made to the balance sheet at 31 March 2001 reducing net assets to £234.8m from £241.9m previously stated in the financial statements for that year. The increase in value of investment properties of £19.4m (2001: £39.1m) less the retained losses (after special dividend of £28.4m) of £15.3m (2001: restated retained profits of £16.7m) led to a rise in net assets to £239.1m (2001: restated £234.8m). Net assets per share of 793p compare with a restated 779p in 2001. Diluted net assets per share rose from 754p (restated) to 766p and, after taking account of the value ascribed to financial instruments under FRS13 and unprovided deferred tax, rose from a restated 654p to 661p. BORROWINGS AND FINANCIAL RISK Net debt fell to £152.4m from £232.8m and, with the rise in net assets, Helical reduced its net gearing at 31 March 2002 to 64% from 99% (restated). The Company seeks to manage financial risk by ensuring that there is sufficient financial liquidity to meet foreseeable needs and to invest surplus cash safely and profitably. At the year end, Helical had £106m of undrawn bank facilities and cash of £75.5m (2001: £31.8m). Helical insures against adverse movements in interest rates through the use of a number of interest rate hedging instruments. Borrowings of £160m are capped until 2004 and £111m until 2006 at interest rates between 6.00% and 7.50%. A further £80m is capped at 7.00% from January 2006 until September 2009. £50m is fixed at a rate of 6.89% until October 2002 and £9.2m reducing to £5.0m at 9.05% until 2009. The Company has interest rate floors at 4.78% on £160m until January 2006 and on £80m at 4.80% from January 2006 until September 2009. FRS13 requires disclosure of financial instruments on a fair value basis and at 31 March 2002 an adjustment to reflect this basis would reduce net assets, after tax relief, by £2.0m (2001: £2.3m) which, if provided for, would reduce diluted net assets by 6p (2001: 7p) per share. FRS19 - DEFERRED TAX FRS19, which applies to accounting periods ending on or after 23 January 2002, has been adopted in these financial statements. This new standard requires deferred tax to be provided on most types of timing differences including accelerated capital allowances. In addition to the recognition of negative goodwill of £6.9m, the adoption of FRS19 has resulted in an adjustment to the balance sheet at 31 March 2001 of £0.2m representing the discounted value of the potential clawback of capital allowances as at that date, net of the discounted value of the deferred tax asset arising in respect of tax losses. PERFORMANCE MEASURES Helical uses various measures to evaluate its returns. It has compared its ungeared property performance against that of portfolios within the Investment Property Databank ('IPD') for the last twelve years. During this period Helical has consistently outperformed its peers as shown by the tables below. IPD (monthly and quarterly valued funds) Ungeared Returns '0' means the top ranking fund Total Returns % - In the year to 3/02 3/01 3/00 3/99 3/98 _____ _____ _____ _____ _____ Helical 15.6 23.2 23.6 20.1 28.3 IPD Benchmark 7.0 9.9 15.1 10.9 16.6 Percentile rank 1 0 2 1 2 Total Returns % - Annualised over 3 yrs 5 yrs 10 yrs 12 yrs _____ _____ _____ _____ Helical 20.8 22.1 19.0 18.2 IPD Benchmark 10.6 11.8 10.3 7.4 Percentile rank 0 0 0 0 Total Shareholder Return Total shareholder return measures the return to shareholders from share price movements and dividend income. The returns were as follows: 3 years 5 years 10 years 15 years 20 years from from from from from 1999 1997 1992 1987 1982 % pa % pa % pa % pa % pa Helical 25.3 24.3 32.6 17.7 37.1 UK Equity Market (1.7) 6.7 11.9 11.0 15.4 Listed Real Estate Sector Index 7.1 6.1 13.4 7.6 11.3 Direct Property 9.2 10.4 9.9 8.4 10.1 Source: HSBC Research Note 5 April 2002 Returns on capital employed In order to evaluate its overall performance against other small to mid size capital companies, both here and abroad, Helical looks at equity value added and returns on equity. The internal calculations for the last five years are shown in the tables below. The calculations for the two years to 31 March 2002 reflect the adoption of FRS19 on Deferred Tax. Equity Value Added Year ended 31 March 2002 2001 2000 1999 1998 _____ _____ _____ _____ _____ Capital employed £m 390 466 430 316 260 Return on capital % 10.5 18.2 19.8 18.6 18.7 Weighted average cost of capital % 6.3 5.9 6.0 6.2 8.1 Spread % 4.2 12.3 13.8 12.4 10.6 Equity value added £m 19.6 52.9 43.7 32.2 29.6 Price/Value Added 2002 2001 2000 1999 1998 £m £m £m £m £m _____ _____ _____ _____ _____ Earnings after tax 17.1 20.2 16.0 16.1 14.6 Revaluation surpluses 19.4 39.5 30.4 19.8 23.6 _____ _____ _____ _____ _____ Value added 36.5 59.7 46.4 35.9 38.2 Market capitalisation 236.3 222.1 167.6 141.6 152.7 Price/value added - times 6.5X 3.7X 3.6 X 3.9 X 4.0 X GROUP PROFIT AND LOSS ACCOUNT UNAUDITED Restated Notes Year Year Ended Ended 31 March 31 March 2002 2001 £000 £000 _______ _______ Turnover 2 136,632 165,259 Cost of Sales (91,646) (108,958) _______ _______ GROSS PROFIT 2 44,986 56,301 Administrative expenses 3 (10,888) (12,031) _______ _______ OPERATING PROFIT 34,098 44,270 Share of associated companies profits 986 86 Profit on sale of investment properties 4 2,463 709 Loss on sale of subsidiary (195) - Net interest payable 5 (14,779) (19,241) _______ _______ PROFIT BEFORE TAX 22,573 25,824 Taxation 6 (5,353) (5,471) Minority interest (164) (126) _______ _______ PROFIT FOR YEAR 17,056 20,227 Ordinary dividends (1,563) (1,438) Special Interim (28,420) - Final proposed 7 (2,345) (2,132) _______ _______ TRANSFER (FROM)/TO RESERVES (15,272) 16,657 _______ _______ EARNINGS PER SHARE - Basic 60.0p 70.0p - Diluted 57.8p 63.6p ORDINARY DIVIDENDS PER SHARE Interim - paid 21 December 2001 5.50p 5.00p Special - paid 26 April 2002 100.00p - Final - payable 25 July 2002 8.25p 7.50p _______ _______ TOTAL 113.75p 12.50p _______ _______ Net assets per share - Basic 793p 779p - Diluted 766p 754p - Diluted for FRS13 adjustment and unprovided deferred tax 661p 654p Restated Year Year Ended Ended 31 March 31 March 2002 2001 £000 £000 _______ _______ RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Profit for the year 17,056 20,227 Dividends paid and proposed (32,328) (3,570) _______ _______ RETAINED (LOSSES)/PROFITS (15,272) 16,657 Revaluation of investment property 20,269 39,467 Minority interest in revaluation surplus (905) (385) Issue of shares 8 777 _______ _______ Net addition to shareholders' funds 4,100 56,516 Opening shareholders' funds 233,152 176,636 _______ _______ Closing shareholders' funds 237,252 233,152 _______ _______ Statement of Total Recognised Gains and Losses Restated Year Year Ended Ended 31 March 31 March 2002 2001 £000 £000 _______ _______ Profit for the year after taxation 17,220 20,353 Minority interest (164) (126) Revaluation of investment property - subsidiaries 18,792 39,320 - associates 1,477 147 Minority interest in revaluation surplus (905) (385) _______ _______ Total recognised gains and losses 36,420 59,309 Prior year adjustment (7,079) - _______ _______ Total recognised gains and losses since last financial statements 29,341 59,309 _______ _______ STATEMENT OF NET ASSETS UNAUDITED Restated Notes 31 March 31 March 2002 2001 £000 £000 _______ _______ SHAREHOLDERS' FUNDS 237,252 233,152 _______ _______ Represented by: FIXED ASSETS Intangible assets - goodwill 122 127 - negative goodwill 8 (6,362) (6,362) Tangible assets 774 973 Investment property 439,911 453,607 Investments 9,599 9,546 Investment in associate 1,937 185 _______ _______ 445,981 458,076 CURRENT ASSETS Fixed assets for resale - 525 Stock 9 29,585 27,861 Debtors 21,289 36,439 Investments 1 1 Cash 10 75,514 31,841 Creditors: amounts falling due within one year (107,936) (88,331) _______ _______ TOTAL ASSETS LESS CURRENT LIABILITIES 464,434 466,412 Creditors: amounts falling due after more than one year (224,597) (231,395) Provision for liabilities and charges - deferred tax (728) (187) _______ _______ NET ASSETS 239,109 234,830 Equity minority interests (1,857) (1,678) _______ _______ SHAREHOLDERS' FUNDS 237,252 233,152 _______ _______ CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2002 UNAUDITED Year ended Year ended 31 March 31 March 2002 2001 £000 £000 _______ _______ Net cash inflow from operating activities 65,634 56,615 Returns on investment and servicing of finance (16,062) (20,582) Taxation (4,967) (5,785) Capital expenditure and financial investment 40,068 (16,779) Acquisitions (178) - Equity dividends paid (3,694) (3,389) _______ _______ Cash flow before management of liquid resources and financing 80,801 10,080 Management of liquid resources (20,285) (15,553) Financing - issue of shares 8 777 - (decrease)/increase in debt (37,046) 4,141 - refinancing costs (96) - _______ _______ Increase/(decrease) in cash in the year 23,382 (555) _______ _______ Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash in the year 23,382 (555) Cash outflow from management of liquid resources 20,285 15,553 Cash outflow/(inflow) from change in debt 37,142 (4,141) Debt arrangement expenses (408) (572) _______ _______ Movement in net debt in the year 80,401 10,285 Net debt at beginning of the year (232,800) (243,085) _______ _______ Net debt at end of the year (152,399) (232,800) _______ _______ Notes to the Preliminary Announcement 1. Reconciliation of operating profit to net cash inflow from operating activities Year ended Year ended 31 March 31 March 2002 2001 £000 £000 _______ _______ Operating profit 34,098 44,270 Depreciation of fixed assets 267 253 Loss on sale of fixed assets 7 16 Profit on sale of investments - (1,144) Release of provisions (53) - Dividends from associates 179 - Amortisation of goodwill 52 64 Decrease in debtors 10,429 20,770 Increase/(decrease) in creditors 22,212 (6,766) Increase in stock (1,557) (848) _______ _______ Net cash inflow from operating activities 65,634 56,615 _______ _______ 2. Turnover and gross profit on ordinary activities before taxation The analysis of turnover and gross profit by function is as follows: Turnover Year ended Year ended 31 March 31 March 2002 2001 £000 £000 _______ _______ Trading property sales 2,282 14,552 Rental income 31,384 28,642 Developments 102,803 115,176 Other income and provisions 163 6,889 _______ _______ 136,632 165,259 _______ _______ Gross Profit Year ended Year ended 31 March 31 March 2002 2001 £000 £000 _______ _______ Trading property sales 154 920 Rental income 27,827 25,532 Developments 17,072 29,507 Other income and provisions (67) 342 _______ _______ Gross profit 44,986 56,301 Central overheads (10,888) (12,031) Interest payable less receivable (14,779) (19,241) Share of associated company profits 986 86 _______ _______ Profit before taxation, profit on sale of investment properties and loss on sale of subsidiary 20,305 25,115 _______ _______ 3. Administrative expenses Year Year Ended Ended 31 March 31 March 2002 2001 £000 £000 _______ _______ Operating profit on ordinary activities is stated after: Staff costs 8,294 9,225 Depreciation 267 253 Auditors remuneration 106 85 Amortisation 52 64 _______ _______ Included in directors remuneration are directors' salaries, benefits in kind and bonuses totalling £6.6m (2001: £7.6m). 4. Profit on sale of investment properties Year Year Ended Ended 31 March 31 March 2002 2001 £000 £000 _______ _______ Net proceeds from sale of investment properties 67,525 30,333 Book value (65,062) (29,624) _______ _______ Profit on disposal 2,463 709 _______ _______ Net proceeds from the sale of investment properties and their associated book value include £22,360,000 of properties disposed of at book value on the sale of a subsidiary, Helical (TE) Limited. 5. Net interest payable Year Year Ended Ended 31 March 31 March 2002 2001 £000 £000 _______ _______ On bank loans and overdrafts 14,804 19,514 Finance arrangement costs 408 572 Other interest and similar charges 3,215 1,343 Interest capitalised (1,006) (1,597) Interest receivable and similar income (2,642) (591) _______ _______ 14,779 19,241 _______ _______ 6. Taxation on profit on ordinary activities Restated Year Year Ended Ended 31 March 31 March 2002 2001 £000 £000 _______ _______ UK corporation tax at 30% (2001: 30%) 4,812 6,784 Deferred taxation 541 (1,313) _______ _______ 5,353 5,471 _______ _______ The Company has applied the provisions of FRS19 Deferred Tax, which requires that deferred tax be recognised as a liability or asset if the transactions or events that give the Company an obligation to pay more or less tax in the future have occurred by the balance sheet date. In accordance with FRS19, the Company makes full provision for timing differences, other than revaluation gains and losses, which are primarily in respect of capital allowances on plant and machinery, industrial buildings allowances and tax losses. The adoption of FRS19 has resulted in an adjustment to the balance sheet at 31 March 2001 of £187,000 representing the discounted value of the potential clawback of capital allowances, net of available tax losses, as at that date. No provision has been made for taxation which would accrue on capital gains if the investment properties sold at their revalued amounts. The amount for which no provision has been made amounted to £32.1m (2001: restated £30.0m) which, if provided for, would reduce diluted net asset value by 99p (2001: 93p) per share. 7. Final ordinary dividend The final ordinary dividend is payable on 25 July 2002 to shareholders on the share register on 14 June 2002 subject to the approval of shareholders at the Annual General Meeting to be held on 24 July 2002. 8. Negative goodwill Negative goodwill arises as a consequence of the adoption of FRS19 and represents the excess of the value of the restated assets of Glenlake Limited over the consideration paid for those assets in June 1999. The restated assets include a sum of £6,892,000 representing the fair value of tax losses acquired with Glenlake Limited. The net asset value per share of Helical has been reduced at 31 March 2001 by 24p to 779p and, on a fully diluted basis, by 22p to 754p. 9. Stock 31 March 31 March 2002 2001 £000 £000 _______ _______ Development sites 15,464 22,249 Properties held as trading stock 14,121 5,612 _______ _______ 29,585 27,861 _______ _______ 10. Cash 31 March 31 March 2002 2001 £000 £000 _______ _______ Rent deposits and cash secured against debt repayable within one year 3,247 2,314 Cash held to fund future development costs 28,300 - Free cash 43,967 29,527 _______ _______ 75,514 31,841 _______ _______ 11. Gearing Restated 31 March 31 March 2002 2001 £000 £000 _______ _______ Bank overdrafts and loans - due within one year 3,316 33,246 - due after more than one year 224,597 231,395 _______ _______ 227,913 264,641 Cash balances (75,514) (31,841) _______ _______ Net bank borrowings 152,399 232,800 _______ _______ Net assets 239,109 234,830 Gearing 64% 99% If the payment of the special dividend on 26 April 2002 were to be taken into account the Company's gearing level at 31 March 2002 would have been 76%. Net bank borrowings exclude the Company's share of borrowings in associated companies of £13,575,000 (2001: £9,496,000). 12. Financial assets and financial liabilities 31 March 31 March 31 March 31 March 2002 2002 2001 2001 Book Fair Book Fair value value value value £000 £000 £000 £000 _______ _______ _______ _______ Borrowings 229,383 230,256 266,002 267,152 Interest rate swaps - 1,242 - 825 Other financial instruments (223) 565 (223) 1,051 _______ _______ _______ _______ 229,160 232,063 265,779 269,028 _______ _______ _______ _______ The fair value of financial assets is the book value. The fair value of financial liabilities represents the mark to market valuations at 31 March 2001 and 31 March 2002. The adjustment to net assets from a recognition of these values would be to reduce diluted net asset value per share by 6p (2001: restated 7p). 13. Basis of preparation of the preliminary announcement The preliminary announcement includes extracts from the draft statutory accounts for the year to 31 March 2002. The figures relating to the year to 31 March 2002 are unaudited. The comparative figures relating to the year to 31 March 2001 are taken from the audited statutory accounts for that year as restated for the effects of the adoption of FRS19 on Deferred Tax. This information is provided by RNS The company news service from the London Stock Exchange PPA

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