Final Results

Helical Bar PLC 09 June 2004 9 June 2004 HELICAL BAR PLC ('Helical'/'Company' / 'Group') PRELIMINARY RESULTS FOR THE YEAR TO 31 MARCH 2004 HELICAL WELL PLACED FOR THE FORTHCOMING CYCLE HIGHLIGHTS * Adjusted diluted net asset value of 874p per share (2003: 770p) - up 14 per cent * 'Triple net' asset value of 797p per share (2003: 702p) - up 14 per cent * Profit before tax Â£13.7m (2003: Â£25.2m) owing to lull in development profits as a result of planned 'de-risking' * Total ordinary dividend of 16.60p per share (2003: 15.00p) - up 11 per cent * Strong performance in investment portfolio underpins results * 11.3% of the Company's shares bought in for cancellation for Â£25.4m (Â£3.9m since 31/03/2004) * Over 30 active projects spread across the sectors John Southwell, Chairman, commented; 'Helical has completed the repositioning started in 2001. It has the skills, money and flexibility to act quickly to take advantage of opportunities. We look forward to the forthcoming cycle and aim to produce significant development and trading profits as we have done in the past.' Further information: Helical Bar plc Tel: 020 7629 0113 Michael Slade (Managing Director) after 2.00 p.m. Nigel McNair Scott (Finance Director) Issued by: Financial Dynamics Tel: 020 7831 3113 Stephanie Highett/Dido Laurimore FINANCIAL HIGHLIGHTS Year Ended Year Ended 31 March 31 March 2004 2003 Notes Â£m Â£m _____ _____ Net rental income 23.0 25.6 Development profits 0.0 4.6 Trading profits 1.0 0.3 Other gross profits 0.6 0.6 Profits before tax 13.7 25.2 Adjusted profits before tax 1 11.7 16.7 pence pence Diluted earnings per share 39.6 59.2 Total dividends per share 16.60 15.00 Adjusted diluted net assets per share 2 874 770 Adjusted diluted 'triple net' assets per share 3 797 702 Â£m Â£m Value of investment portfolio 334.9 342.5 Net borrowings 129.8 140.9 Equity shareholders' funds 245.0 235.9 Net gearing 52% 59% Notes 1. Excludes profit on sale of investment properties, loss on sale of subsidiary and negative goodwill. 2. After adding back additional deferred taxation arising from the clawback of capital allowances on sale of investment properties. 3. Adjusted for contingent liabilities of deferred taxation on chargeable gains on investment properties and the market value of financial instruments but after adding back the deferred taxation referred to in 2 above. Chairman's Statement This year has seen the completion of the repositioning started in 2001. Then we stopped new office development and began reducing the proportion that our portfolio represented in Central London offices from 80 per cent down to below 40 per cent today. As a result we have avoided development losses and by a judicious sale and reinvestment programme shielded our balance sheet from the effect of falling rental levels in Central London. At the same time our move into new sectors has provided us with a portfolio of properties, both trading and investment, capable of producing further substantial uplifts over the next three years. Future returns to shareholders should be further enhanced by Â£25m spent buying back over 11 per cent of our share capital at an average price of 753p per share, a discount of 6 per cent to our triple net asset value and 14 per cent to our adjusted net asset value. Results Profits after tax this year fell to Â£11.5m from Â£17.6m mainly because, as foreseen, we made no development profits (2003: Â£4.6m). Diluted earnings per share as a result fell to 39.6p (2003: 59.2p). The revaluation surplus on the investment portfolio was Â£24m (2003: deficit Â£13m). The Group's adjusted net asset value per share rose by 14 per cent to 874p (2003: 770p) and the adjusted triple net asset value (taking account of the contingent liabilities of deferred tax and the market value of financial instruments) also rose by 14 per cent to 797p per share (2003: 702p). These figures take no account of any surplus on the Â£70m trading and development stock which are valued, in accordance with normal practice, at the lower of cost and net realisable value. The encouraging prospects for 2004/2005 enable the Board to recommend to shareholders a final dividend of 10.0p per share (2003: 9.0p), an increase of 11 per cent. This proposed dividend, together with the interim dividend of 6.6p (2003: 6.0p) paid in December 2003 makes a total dividend of 16.6p per share (2003: 15.0p). This is an increase of 11 per cent on last year. The total dividend is covered over 2.5 times by profits after tax. Government Policy We welcome the prospective introduction of Property Investment Funds (PIFs) which have the potential to give retail investors long overdue exposure to commercial property in a tax neutral manner. As we move through the consultation process, there is much still to be resolved. Too high a conversion tax charge or too many restrictions on subsequent activities such as development could yet leave this excellent initiative still-borne. Meanwhile, continued high levels of stamp duty and the threat of intervention in the structure of leases only serve to undermine the efficient workings of the market place. In addition the Government is increasingly trying to use the planning system to raise revenue beyond the immediate impact of the proposed development in question. The future The world has come out of the slowdown of the early 2000s and is set for a year of good growth. Most importantly availability of vacant space in what has historically been our main market, London offices, is now beginning to fall. Commercial property is in increasing favour with institutions and there is considerable money seeking a home therein. Through a mixture of investments and developments we now have over 30 active projects spread across all commercial property sectors. The retail, industrial and change of use schemes should deliver good growth over the next two to three years while in the longer term we look to our office development programme which we are building up in London and the South East. Despite the current raft of economic good news, the world is still an uncertain place where shocks may happen. Should they arise, Helical has the skills, money and flexibility to act quickly to take advantage of such opportunities. In the meantime we look forward to the forthcoming cycle and aim to produce significant development and trading profits as we have done in the past. John Southwell Chairman 9 June 2004 Development programme Helical's development objective is clear. The Group seeks to recreate the profit streams achieved from office and retail development over the last ten years by focusing on large Central London office schemes, major mixed use developments and retail schemes. As in the last cycle it is anticipated that the retail schemes will contribute to development profits before the larger office and mixed use schemes come on stream. Development schemes Completed developments available to let Completion Size Funding Tenants Space Offices Sq ft Institution Let Sq ft West End 40 Berkeley Square, March 2004 75,000 Morley The Blackstone 28,500 London W1 Group, Caxton Europe Asset Management Thames Valley The Meadows, Camberley March 2002 140,000 Scottish Widows British Cement 23,000 Association The Waterfront Business Oct 2002 56,000 Aberdeen One building sold 18,000 Park, Fleet Property Investors to Conair, Hedra Plc The Heights, Weybridge April 2003 337,000 Prudential Kia Motors 16,000 Portfolio Managers Development schemes Future programme Approximate Start Date Size Offices Sq ft City Mitre Square, London EC3 350,000 Ropemaker Place, London EC2 2004/05 500,000 Central London - Mixed Use Wood Lane, White City 2006+ 43 acres Thames Valley Amen Corner, Bracknell 2007 500,000 Retail/Mixed Use Friary Retail Park, Stafford 2004 38,500 Bluebrick, Wolverhampton 2005 170,000 Hatters Retail Park, Luton 2005 105,000 Shrub Hill, Worcester 2005 35,000 Shirley, Solihull 2006 155,000 Trinity Square, Nottingham 2005 235,000 Commercial Road, Bournemouth 2005 47,000 Offices The year to 31 March 2004 marked both the end of one office development cycle and further progress in preparation for the next one. The completion of 40 Berkeley Square London W1, in March 2004, was notable for two reasons. The building is the most prime office building yet constructed by Helical and good progress has been made in letting the space. The Group is now busy looking for tenants for its completed developments at The Meadows Camberley, The Heights Weybridge, The Waterfront Business Park Fleet and 40 Berkeley Square London W1. At the same time it is progressing plans for exciting new development opportunities in London and the South East. Completed office developments The Meadows, Camberley The Meadows, Camberley funded by Scottish Widows, comprises four office buildings totalling 140,000 sq ft located by the Blackwater railway station, Camberley opposite the Meadows Retail Park. During the year one building, of 23,000 sq ft, was let to the British Cement Association. The other three buildings remain available to let. The development was forward funded on a profit erosion basis and no loss is expected to arise. The Heights, Weybridge The Heights, Weybridge is a 22 acre office campus development of the highest quality comprising 337,000 sq ft of speculative space in five distinct buildings. The scheme which is adjacent to the UK headquarters of Proctor & Gamble was completed in April 2003 and is forward funded with Prudential Portfolio Managers. During the year, 16,000 sq ft was let to Kia Motors with terms agreed with another party for a further 24,000 sq ft. Funded on a profit erosion basis there is an exposure to a small loss subject to the outcome of future lease negotiations. The Waterfront Business Park, Fleet Since completing the three building office scheme in October 2002 the smallest building of 12,000 sq ft was sold to the Conair Group for its own occupation. The second floor of Building I has been let to Hedra Plc leaving two floors still available. In addition, Building II, which overlooks the Fleet Pond Nature Reserve, and comprises 26,700 sq ft is also available. Funded on a profit erosion basis no provision for future losses is considered necessary. 40 Berkeley Square, London W1 40 Berkeley Square is a prime office development of 75,000 sq ft on the west side of Berkeley Square. Comprising eight floors of high specification offices, the building has been developed in a joint venture with owners Morley Fund Management. The top three floors, comprising 19,500 sq ft, were let to The Blackstone Group in December 2002 at a rent of Â£80 psf. Since the development was completed in March 2004, a further floor of 9,000 sq ft has been let to Caxton Europe Asset Management at the same rent. Future office development programme Mitre Square, London EC3 A joint planning application, with Ansbacher Property Development Ltd, has been submitted to the City Planning Department for an office scheme comprising 350,000 sq ft. Ropemaker Place, London EC2 A joint planning application, with owners DB Real Estate, for a new building of approximately 500,000 sq ft gross was approved by the London Borough of Islington in December 2003. Helical are acting as Development Manager for DB Real Estate. Wood Lane, White City Helical, jointly with Morley Fund Management, acquired a 10 acre site from Dairy Crest in late 2002. Since then Helical and Morley have teamed up with neighbouring landowners to form the White City Partnership promoting the regeneration of 43 acres of land at White City for a major mixed use development. The adjoining landowners include the BBC and Land Securities, Marks & Spencer and Lattice Group Pension Fund. The sites lie immediately to the north of Chelsfield's proposed 1.3m sq ft shopping centre at White City between the West Cross Route and Wood Lane. Since the sites' designation as an Opportunity Area in the London Plan the Greater London Authority and Hammersmith & Fulham have published 'White City Opportunity Area -A Framework For Development' which has been out for public consultation. The document proposes supplementary planning guidance to the Unitary Development Plan promoting their vision that the area be transformed into a thriving new, mixed use, urban quarter. The White City Partnership is now working to develop a comprehensive masterplan for the site. Amen Corner, Bracknell Helical acquired a number of residential properties and options over land at Amen Corner, Bracknell. The company has been working with Bracknell Forest Borough Council to promote the site for development and this resulted in the publication of the draft 'Policy and Planning Framework for Amen Corner' in December 2003. Negotiations are continuing with the authority to bring this site forward for commercial/residential development. Retail developments Helical's retail development programme has expanded significantly in the last year. The joint ventures with Oswin Developments and Overton Developments have made good progress in respect of a number of promising opportunities. The two retail developments completed by Oswin Developments were at Accrington and Carmarthen. Market Square, Accrington Market Square, Accrington is a new town centre development of 62,000 sq ft comprising 11 shops including stores for Wilkinsons, JJB and Poundland. Forward sold to private investor Bilsdale Properties Ltd the scheme was completed and handed over at the end of 2003. Towy Retail Park, Carmarthen Towy Retail Park, Carmarthen is a development of two stores totalling 35,000 sq ft for PC World and Currys. Funded by private Irish investors the scheme was completed in January 2004. Future Retail Development Programme Retail developments planned with Oswin Developments are as follows: Friary Retail Park, Stafford Friary Retail Park, Stafford is a retail scheme where building work commenced in May 2004. The scheme comprises 38,500 sq ft of open A1 retail warehousing and pre-lets have been secured with PC World, T K Maxx and Choices Video. The scheme is due for completion in November 2004. Bluebrick, Wolverhampton The former Low Level Station site comprising 11 acres was purchased in November 2003 and a mixed use scheme is being progressed to comprise a car showroom, hotel, public house and approximately 140 residential units. A planning application is due to be submitted in summer 2004 with a view to commencing on site in early 2005. Hatters Retail Park, Luton A planning application is being progressed for a retail park of 80,000 sq ft and industrial units of 25,000 sq ft. The proposals are due to be considered by the Local Planning Authority in summer 2004. Shrub Hill, Worcester A contract has been signed with First Bus subject to relocating the existing bus depot. The site has the benefit of a planning consent for 35,000 sq ft of retail warehousing and a residential development of 46 units. Negotiations are in hand for a joint venture development with neighbours, St Modwen Developments. Town Centre Scheme, Shirley, Solihull Working jointly with Coltham Developments Ltd, Helical Retail and Oswin Developments have been appointed by Solihull Metropolitan Borough Council to promote a regeneration of Shirley Town Centre. The mixed use scheme is likely to comprise a 75,000 sq ft anchor foodstore, 80,000 sq ft of retail units, restaurants, community facilities and 150 apartments. The design of the scheme is being worked up with a view to submitting a planning application in late 2004. Future retail developments planned with Overton Developments are at Nottingham and Bournemouth. Trinity Square, Nottingham Trinity Square is a retail led mixed-use development in the heart of the city centre shopping district adjoining the Victoria Centre. Comprising approximately 175,000 sq ft of retail space, 60,000 sq ft of leisure and restaurants, 500 residential units and 450 parking spaces it will be a dramatic landmark building constructed of glass and steel offering double height retail frontages. Planning permission was obtained in March 2004 for the development, and construction is due to commence at the beginning of next year in time for trading at Christmas 2006. Contracts have already been exchanged with T K Maxx (55,000 sq ft) and Borders Books (25,000 sq ft) and there is considerable interest from other retailers. Commercial Road, Bournemouth Commercial Road, Bournemouth is an existing retail property bought in September 2003. The property, which had passing rent of just under Â£1m on completion, is to be substantially redeveloped once vacant possession has been obtained of most of the units. It is expected that work will start on site in October 2004 and in anticipation of this negotiations are continuing with a number of high street retailers with a view to agreeing pre-lets. Once redeveloped, the property will consist of 4 units comprising 47,000 sq ft of prime retail space. Residential Developments The Group has from time to time acquired sites and created value through obtaining planning consents for retirement villages. Lime Tree Village, Dunchurch, Rugby This development involves the refurbishment of a Victorian country house and the construction of 150 bungalows, cottages and apartments for retirement. The first phase of 50 homes is under construction with 28 sold or reserved. Bramshott Place, Liphook Planning negotiations continue for a retirement village development comprising 144 apartments, cottages and bungalows. Subject to planning, work is due to start in 2005. Investment Portfolio The investment portfolio had a satisfactory year with a valuation uplift of 8.4%, an unleveraged total return of 16.8% and a fifth percentile ranking as measured by IPD (against all quarterly and monthly valued funds for the year to 31 March 2004). Retail property performed particularly well with a total return of 26.2%, with industrials 16.2% and offices 14.4%. Valuation Average movement ERV movement Total return unexpired term Offices +5.7% -5.9% 14.4% 9.8 Industrial +6.0% +1.0% 16.2% 7.8 Out-of-town retail +19.0% +8.9% 26.7% 16.2 In-town retail +16.1% +18.8% 25.2% 8.6 --------- --------- --------- ----- Total +8.4% +0.5% 16.8% 9.7 VALUATION YIELDS True Initial 2005 2006 Reversionary Equivalent Equivalent Offices 7.7% 8.4% 9.2% 7.8% 8.0% 8.4% Industrial 8.2% 8.9% 9.1% 9.8% 9.2% 9.7% Out-of-town retail 5.9% 6.3% 6.6% 6.9% 6.7% 7.0% In-town retail 6.1% 7.1% 7.6% 9.0% 8.1% 8.6% ------- ------- ------- ------- ------- ------- Total 7.4% 8.1% 8.6% 8.4% 8.2% 8.6% Over the last seven years we have sold Â£516 million of investment property representing turnover of 174% based on the current size of the investment portfolio. In every year we have exceeded valuations on sales, but the average surplus of just 2% over book values emphasises the accuracy of our valuations. Retail Asset management has been the key driver to our returns. At our shopping centre in Letchworth we have carried out a number of lettings at 40% above levels pertaining at the time of our purchase in 2003 following the change of anchor tenant from Kwik Save to Marks & Spencer. In our retail park at Weston we have secured lease extensions with Focus and Dunelm, the two anchor tenants, and increased their rents in aggregate by 79%. In our park in Sevenoaks, we have also extended the lease to Wickes, the anchor tenant, and guaranteed an uplift of 33% in rent passing in 2006. At Chiswick we have secured planning consent for a residential development to the rear of our holding and agreed terms for a new long lease to WH Smith with a 28% rental increase. The final strong retail performer was our supermarket at Wednesfield where the valuation increased by 40% to reflect the terms of an agreed sale. The property has now been sold for Â£18.36 million, 60% above the purchase price of Â£11.5 million in December 2001. We also sold a retail park in Sprucefield (in which we had a 50% interest) for Â£16.2 million (4% above valuation and 26% above the 2001 purchase price). Offices The uplift in value in our office portfolio was due to covenant enhancements, lease restructurings and lettings. At the Interchange in Camden we secured Associated Press as surety to the lease in consideration for five months rent free and subsequently exchanged contracts to sell the property for Â£21.5 million. This was 10% above last year's valuation and 52% above the purchase price of Â£14.4 million in 1999. At Paris Gardens in Southwark, SE1 we secured the main UK subsidiary of the world's leading disaster recovery company, Sungard Systems Data Inc, as tenant for a further sixteen years. This has led to a valuation increase of 30%. Our only provincial office building in High Wycombe gained an 18% valuation increase following a lease restructuring of the main lease to Staples. At Rex House, SW1 a restaurant has been sold on a long lease for Â£1.9 million resulting in a small increase in value. At Shepherds Building in Shepherds Bush we have opened a bar and created some smaller studio units. During the year we have let over 32,000 sq ft with a further 8,000 sq ft under offer, leaving a residual vacancy rate of 40% - our only office void in London. Sales of office buildings completed during the year were Capital House NW1 for Â£41 million (in line with valuation, 75% over purchase price in 1998), a portfolio comprising the Rotunda Camden, 71 Kingsway WC2 and the Waterfront in Fleet for Â£33.25 million (4% above valuation and 45% above purchase prices 1998-2000) and 5-10 Bury Street EC3 for Â£8.5 million (10% above valuation and 100% above the 1997 purchase price). Industrial and trading properties Our industrial investment property had a steady year with rental values edging forward. Capital appreciation was driven by the market's yield re-rating for higher yielding property. Many of our more active industrial assets are trading properties, held at the lower of cost or value, and where the performance will only be crystallised on sale. These include refurbishment and redevelopments designed for owner occupier sales at premium prices. Schemes in progress are 127,000 sq ft in Harlow (39% sold, 32% under offer), 135,000 sq ft in Slough (20% under offer), 46,000 sq ft in Sawston, Cambridge (38% under offer) and 36,000 sq ft in Edenbridge (15% under offer). We also hold industrial assets in Fleet (5 acres), Dunstable (5 acres) and Great Alne, Warwickshire (20 acres) where we are hopeful of crystallising value by obtaining residential or retirement home consents. At the Bus Depot at Winterhill, Milton Keynes a planning consent has been obtained for a new 80,000 sq ft retail warehouse which has been prelet to Homebase. This scheme is in the course of institutional funding with construction scheduled to start later this year. Purchases The current highly competitive investment market has made high margin acquisitions difficult to achieve. During the year we acquired a 235,000 sq ft industrial estate at Sawston, Cambridge for Â£10 million yielding 9% but including a 3 acre site which we are now developing. Industrial trading purchases were acquired at Edenbridge for a refurbishment scheme and at Great Alne where we are making good progress in securing a consent for a retirement homes village. We purchased three separate long leasehold interests in the Leisure Plaza at Milton Keynes to consolidate the ownership of this 119,000 sq ft scheme on a 5 acre site with residential and retail potential. We acquired a Wickes retail warehouse in Worthing with an open A1 consent where the passing rent of Â£10.75 per sq ft is much lower than rental evidence emerging along the south coast. We have also exchanged conditional contracts subject to receiving retail planning consent on a motor trade site in Weston Super Mare where we have prelet the proposed development to Wickes DIY. The most significant acquisition of the year was the Morgans department store together with Morgans and Royal Arcades in Cardiff. This 235,000 sq ft holding has been in family ownership for 124 years and presents an opportunity to subdivide the department store to create larger shop units and actively manage the arcades. The property is directly opposite Land Securities and Capital Shopping Centres' proposed 750,000 sq ft St Davids 2 retail development which we believe will transform the trading pitch over the next five years. The purchase price of Â£29 million is payable in March 2005. Whilst we would like to step up the pace of our acquisitions we are unwilling to rely on further yield shift to underpin returns. We do, however, take heart in the gradual recovery of the occupational markets which should, over time, provide more opportunities in our usual sphere of high margin added-value deals. Entire portfolio - cashflow yields to Helical Initial Reversionary Equivalent True equivalent Investment 7.8% 8.8% 8.6% 9.0% Trading 3.3% 11.1% 9.4% 10.0% Development 1.9% 7.7% 7.3% 7.7% ------- ------- ------- ------- Total 6.7% 8.8% 8.5% 8.9% Portfolio split (by value) Offices Retail Retail Industrial Other Total in-town out-of-town Investment 35.4% 6.3% 12.1% 26.8% 0.1% 80.7% Trading 0.5% 0.0% 0.1% 5.6% 0.9% 7.1% Development 3.4% 5.5% 2.1% 0.0% 1.2% 12.2% ------ ------ ----- ------ ----- ------- Total 39.3% 11.8% 14.3% 32.4% 2.2% 100.0% Office split West End 26.8% City 11.0% West London 19.8% Southwark 21.6% Camden 13.5% South East 7.3% ------- 100.0% INVESTMENT PROPERTIES Address Average Size passing Vacancy Year (sq ft) rent (psf) rate acquired Comments LONDON OFFICES Rex House SW1 80,000 Â£56 0% 2000 Leasehold expires 2035 Shepherds Building W14 152,000 Â£22 40% 2000 66 Prescot St E1 110,000 Â£22 0% 2001 50% ownership 61 Southwark St SE1 65,000 Â£18 0% 1998 Rent reviews 2004 on 32,000 sq. ft 4/5 Paris Gardens SE1 45,000 Â£25 0% 1998 Rent increases to Â£30 p.s.f. 06/05 Interchange NW1 65,000 Â£32 0% 1999 Sale exchanged. Completion 09/05 ----------- ----- ------ 517,000 Â£29 12% SOUTH EAST OFFICES Westfields House 27,000 Â£16 7% 2001 High Wycombe OUT OF TOWN RETAIL Weston Retail Pk, Weston 140,000 Â£11 0% 1999 75% ownership Super Mare Sainsbury Superstore, 69,000 Â£10 0% 2001 Sold 4 June 2004 Wednesfield 75% ownership Otford Road Retail Pk, 43,000 Â£14 0% 2003 75% ownership Sevenoaks Homebase, St Austell 36,000 Â£8 0% 2002 75% ownership Wickes, Worthing 26,000 Â£11 0% 2003 75% ownership ----------- ----- ----- 314,000 Â£11 0% TOWN CENTRE RETAIL Morgans Department Store, 170,000 - 100% 2005 Purchase completes 03/05 Cardiff Morgan & Royal Arcades, 65,000 Â£40ZA 0% 2005 Purchase completes 03/05 Cardiff Garden Square, Letchworth 165,000 Â£35ZA 10% 2003 New lettings @ Â£50 p.s.f. ZA WH Smiths, Chiswick 5,000 Â£85ZA 0% 2000 Residential site at rear ----------- -------- ----- 405,000 Â£40ZA 46% Average Size passing Vacancy Year Address (sq ft) rent (psf) rate acquired Comments INDUSTRIAL Aycliffe Portfolio 1,570,000 Â£2.70 21% 1987 Peterlee Portfolio 700,000 Â£3.00 26% 1987 Hawtin Park, Blackwood 251,000 Â£2.85 0% 2003 Sawston, Cambridge 235,000 Â£4.30 0% 2003 67% ownership Avonbridge, Avonmouth 234,000 Â£4.85 14% 1995 Leasehold expires 2071 Walton Summit, Preston 143,000 Â£4.00 0% 1990 Standard Estate, Woolwich 105,000 Â£7.40 44% 2002 70% ownership Golden Cross, Hailsham 102,000 Â£5.00 0% 2001 Waterside, Fleet 54,000 Â£7.00 9% 1999 Residential potential ------------- ------- ----- 3,394,000 Â£3.40 17% OTHER Cardiff Royal Infirmary Vacant hospital on a peppercorn lease with redevelopment potential. TRADING PROPERTIES Address Description Year % acquired ownership Bus Depot, Optioned site, pre-let to Homebase 2001 50% Milton Keynes (80,000 sq ft) with planning consent Leisure Plaza, 119,000 sq ft leisure scheme with potential for 2003 50% Milton Keynes residential or retail use Mill Street, Slough 164,000 sq ft industrial in course of 2002 90% redevelopment to create 13 units Barrows Road, Harlow 125,000 sq ft industrial estate in course of 2002 80% refurbishment and redevelopment for owner occupier sales Great Alne 314,000 sq ft industrial estate on a 20 acre site 2004 100% with potential for a retirement home village use Edenbridge 36,000 sq ft industrial estate in course of 2004 50% refurbishment for owner occupier sales. Southfield Road, Dunstable 103,000 sq ft vacant shed with residential 2002 100% potential plus a let 34,000 sq ft office 2/6 Curtain Road, 7,000 sq ft office forming part of a 700,000 sq ft 2001 50% London EC2 development site Computer Centre, 111,000 sq ft mainly vacant computer centre. 2002 50% Wythenshawe Leasehold expiring 2067 Financial Review Profits Adjusted profits before tax, excluding exceptional items and negative goodwill fell to Â£11.7m (2003: Â£16.7m). Profits after tax and minority interest fell to Â£11.2m (2003: Â£17.4m). Rental income Net rental income for the year fell to Â£23.0m (2003: Â£25.6m) as the Group sold further Central London office investments. During the year Â£82m of investment properties, yielding Â£7.1m of rental income were sold. Â£45m was used to add to the investment portfolio of which Â£29m was the cost of buying the Morgan Department Store in Cardiff, not payable until March 2005. Â£25m was used to purchase income producing properties to be re-developed or traded. Excluding the Morgan Department Store these produce a passing rent of Â£2.1m. Rent reviews and new lettings, net of lease expiries and rent free periods, added rental income of Â£1.4m on the remaining portfolio. Rental costs fell from Â£3.7m to Â£2.3m, reflecting lower voids at Shepherds Building W14 and recovery of costs from tenants. Trading and other profits Trading profits of Â£1.0m were up on last year (2003: Â£0.3m) and came from the sale of a number of small industrial units in Harlow purchased in 2002 and refurbished during the year. The company also sold Tudor House, Cardiff, a refurbished office building of 14,000 sq ft. Development profits Negligible profits were generated by the Group's funded development programme (2003: Â£4.6m) which continued to reflect the downturn in the Central London office market. The only contributor to profits was the pre-let and pre-funded retail development at Towy Retail Park, Carmarthen. 2004 2003 2002 2001 2000 Developments Â£ 000 Â£ 000 Â£ 000 Â£ 000 Â£ 000 Profits 38 4,630 17,072 29,507 19,345 Administrative expenses Administrative expenses, before the exceptional negative goodwill credit in 2003, increased by 25% from Â£6.4m to Â£8.0m due to an increased level of performance related bonuses. Administrative expenses, before goodwill and executive bonuses increased slightly to Â£6.0m (2003: Â£5.9m). Profit on sale of investment properties During the year to 31 March 2004 the Group sold Â£82.2m (2003: Â£131.2m) of investment property on which it made Â£2.0m (2003: Â£2.1m) of profit over book value and sale costs. The properties sold included office investments at Capital House, London NW1, The Rotunda Camden NW1, 67-75 Kingsway London WC2, Bury Street London EC3 and the Waterfront Business Park, Fleet. Net interest payable The sale programme started in 2001 and the subsequent lower level of gearing has resulted in a much reduced interest charge of Â£9.3m (2003: Â£11.9m). Interest received fell from Â£2.2m to Â£1.1m as interest was no longer received on the cash held on deposit against the pre-sale of 3 Bunhill Row, EC1. Interest of Â£1.8m (2003: Â£0.8m) was capitalised reflecting the much increased holding of non-income producing development sites. 2004 2003 2002 2001 2000 Net interest payable Â£ 000 Â£ 000 Â£ 000 Â£ 000 Â£ 000 Interest payable on bank loans 7,548 9,543 14,804 19,514 17,893 Other interest payable 1,741 2,351 3,215 1,343 2,350 Finance arrangement costs 170 783 408 572 365 Interest capitalised (1,817) (795) (1,006) (1,597) (2,661) Interest receivable (1,070) (2,244) (2,642) (591) (1,563) Loan termination costs - - - - (36) 6,572 9,638 14,779 19,241 16,348 Taxation The corporation tax charge for the year is less than the standard rate of 30% due to the use of capital allowances, tax losses and the impact of indexation allowances against chargeable gains arising on the sale of investment properties. The deferred tax credit for the year reflects a full provision for capital allowances claimed in previous years which is more than offset by a reduction in previous years provisions where investment properties have been sold and there is no longer a potential for the clawback of the allowances claimed to date. Dividends The Board is recommending to shareholders at the Annual General Meeting on 28 July 2004 a final dividend of 10.00p per share (2003: 9.00p) to be paid on 29 July 2004 which, with the interim dividend of 6.60p, makes a total of 16.60p. This is an increase of 11% on the previous year's dividend of 15.00p. This is covered over 2.5 times by profits after tax. 2004 2003 2002 2001 2000 Dividends pence pence pence pence pence Interim 6.60 6.00 5.50 5.00 4.40 Final 10.00 9.00 8.25 7.50 6.75 _____ _____ _____ _____ _____ 16.60 15.00 13.75 12.50 11.15 Special - - 100.00 - - _____ _____ _____ _____ _____ 16.60 15.00 113.75 12.50 11.15 _____ _____ _____ _____ _____ Earnings per share Earnings per share in the year to 31 March 2004 were 40.9p (2003: 61.2p) per share and on a diluted basis were 39.6p (2003: 59.2p) per share. 2004 2003 2002 2001 2000 Earnings per share pence pence pence pence pence Earnings per share 40.9 61.2 60.0 70.0 55.0 Diluted earnings per share 39.6 59.2 57.8 67.7 53.7 Investment portfolio During the year the Group continued to replace Central London offices with retail and industrial properties with greater potential for capital growth. Investment properties with a book value of Â£82m were sold and partly replaced by Â£45m of new properties at Sawston Cambridge, Cardiff and Worthing. In addition around Â£5m of capital expenditure was spent on refurbishing various office, industrial and retail buildings. At 31 March 2004 there was a revaluation surplus of Â£24.2m (2003: deficit Â£13.4m) on the investment portfolio. 2004 2003 2002 2001 2000 Investment portfolio Â£ 000 Â£ 000 Â£ 000 Â£ 000 Â£ 000 Cost or valuation at 1 April 342,484 439,911 453,607 419,570 332,457 Additions at cost 50,464 47,175 32,838 24,341 163,029 Disposals (82,178) (131,168) (65,062) (29,624) (106,320) Revaluation 24,162 (13,434) 18,528 39,320 30,404 Cost or valuation at 31 March 334,932 342,484 439,911 453,607 419,570 Net asset values The retained profits of Â£7.0m (2003: Â£13.1m) plus the revaluation surplus of Â£24.2m (2003: deficit Â£13.4m) and movements in minority interest less the purchase of own shares of Â£21.5m led to an increase in net assets to Â£248.7m (2003 Â£238.5m). In calculating the net assets per share a provision has been made for the deferred tax which would become payable should all the capital allowances claimed to date be clawed back as a taxable adjustment in the Group's tax computations. The Group believes this clawback is unlikely and accordingly, has calculated the diluted net asset value assuming this not to be the case in line with current practice. Adjusted diluted net assets per share of 874p compare to 770p in 2003. After allowing for the unprovided deferred tax on revaluation surpluses and the value ascribed to financial instruments, the adjusted diluted triple net asset value of the Group has increased from 702p to 797p at 31 March 2004. 2004 2003 2002 2001 2000 Net asset values per share pence pence pence pence pence Diluted net asset value - 1 874 770 769 754 581 Diluted net asset value - 2 797 702 663 655 516 1 - net asset value diluted for share options but adding back the provision of deferred tax on clawback of capital allowances. 2 - net asset value diluted for share options and adjusted for unprovided deferred tax, FRS 13 value of financial instruments but adding back the provision of deferred tax on clawback of capital allowances. Borrowings and financial risk The Group's ongoing reduction in its exposure to the Central London office market has continued the reduction in debt and, at 31 March 2004, net debt had fallen to Â£129.8m from Â£140.9m. The Group's net gearing fell to 52% from 59% at 31 March 2003. 2004 2003 2002 2001 2000 Net debt and gearing Net debt Â£129.8m Â£140.9m Â£152.4m Â£232.8m Â£243.1m Gearing 52% 59% 64% 99% 131% The Group 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 Â£37m of undrawn bank facilities and cash of Â£18.3m (2003: Â£16.1m). In addition it had Â£135m of uncharged property on which the Group could borrow funds. As at 9 June 2004 Helical's average interest rate was 5.6%. FRS13 requires disclosure of financial instruments on a fair value basis and at 31 March 2004 an adjustment to reflect this basis would reduce net assets, after tax relief, by Â£2.0m (2003: Â£5.1m) which, if provided for, would reduce diluted net assets by 7p per share (2003: 15p). Shares purchased for cancellation Using the authority granted at the 2002 AGM, the Company purchased, in July 2003, 150,000 ordinary 5p shares at 680p per share for cancellation. Following the renewal of the authority at the 2003 AGM the Company embarked on a share purchase programme and in the year to 31 March 2004 increased the numbers of shares purchased to 2,905,951 at a cost of Â£21.5m, an average price of 740p per share. On 31 March 2004 the Company gave instructions to its broker, Cazenove, to commence an irrevocable non-discretionary programme to repurchase its own shares during the close period from 8 April 2004 to 21 May 2004 inclusive. During that period a further 460,000 shares were purchased at an average cost of 834p per share. The total number of shares purchased since 1 April 2003 is 3,365,951, approximately 11.3% of the share capital in issue prior to the start of the purchases, at a total cost of Â£25.4m and an average cost of 753p per share. This average cost is at a 14% discount to adjusted net asset value of 874p per share and a 6% discount to 'triple net' asset value of 797p per share. The number of shares in issue has reduced from 29,913,476 to 26,687,903 (including 140,378 shares issued on the exercise of an option in December 2003). Performance measures 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 total shareholder return ('TSR'). The performance of the property portfolio as measured by the Investment Property Databank ('IPD') is also noted below. Equity value added Year ended 31 March 2004 2003 2002 2001 2000 Capital employed Â£m 348 377 390 466 430 Return on capital % 11.5 3.9 10.5 18.2 19.8 Weighted average cost of capital % 7.0 6.1 6.3 5.9 6.0 Spread % 4.5 (2.2) 4.2 12.3 13.8 Equity value added/(lost) Â£m 15.6 (8.5) 19.6 52.9 43.7 Total shareholder return Total shareholder return measures the return to shareholders from share price movements and dividend income. The returns were as follows: 1 year 3 years 5 years 10 years 15 years 20 years from from from from from from 2003 2001 1999 1994 1989 1984 % pa % pa % pa % pa % pa % pa Helical Bar plc 50.9 11.3 17.0 16.3 13.5 33.1 UK equity market 31.0 (3.8) (2.7) 6.9 8.9 -*1 Listed real estate sector 61.7 8.8 9.8 8.8 5.6 -*1 index Direct property 10.9 9.1 10.5 10.6 8.3 10.3 Source: New Bridge Street Consultants/Datastream *1 Information not available Investment Property Databank ('IPD') Helical has compared its ungeared property performance against that of portfolios within the Investment Property Databank for the last 14 years. Helical has outperformed all parties within the index over 5, 10 and 14 years. The returns on shareholder capital earned by Helical are generally higher than those measured by IPD due to the use of gearing. IPD (monthly and quarterly valued funds) ungeared returns Total Returns % In year to 31 March 2004 2003 2002 2001 2000 Helical 15.5 6.0 15.6 23.2 23.6 IPD benchmark 12.8 9.9 7.0 9.9 15.1 Percentile rank 14 90 1 0 2 Total Returns % Annualised over 3yrs 5 yrs 10 yrs 14 yrs Helical 12.3 16.7 17.7 17.1 IPD benchmark 9.9 10.9 10.3 7.9 Percentile rank 12 0 0 0 '0' means the top ranked fund HELICAL BAR PLC GROUP PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2004 UNAUDITED Notes Year Ended Year Ended 31 March 31 March 2004 2003 Â£000 Â£000 Turnover (including share of joint ventures' turnover) 55,984 136,758 Less: share of joint ventures' turnover (1,418) (1,566) _______ _______ Turnover 1 54,566 135,192 Cost of sales (29,916) (103,968) _______ _______ Gross profit 1 24,650 31,224 Administrative expenses - administration 2 (8,037) (6,391) - negative goodwill - 6,362 _______ _______ Operating profit 16,613 31,195 Share of operating profit in joint ventures 1,636 1,544 Profit on sale of investment properties 3 2,035 2,126 Loss on sale of subsidiary (59) - Net interest payable 4 (6,572) (9,638) _______ _______ Profit before tax 13,653 25,227 Taxation 5 (2,199) (7,660) Minority interest (232) (160) _______ _______ Profit for the year 11,222 17,407 Dividends - interim 6 (1,739) (1,705) - final proposed 6 (2,524) (2,570) _______ _______ Transfer to reserves 6,959 13,132 _______ _______ Earnings per share - Basic 7 40.9p 61.2p - Diluted 7 39.6p 59.2p Ordinary dividends per share _______ _______ Interim - paid 31 December 2003 6.60p 6.00p Final - payable 29 July 2004 10.00p 9.00p _______ _______ Total 16.60p 15.00p _______ _______ Net assets per share -Basic 16 903p 789p -Diluted 16 866p 762p -Adjusted diluted, adding back FRS19 provision 16 874p 770p -Triple net diluted for FRS 13 adjustment and unprovided deferred tax, 16 797p 702p adding back FRS19 provision Reconciliation of movements in shareholders' funds Year Ended Year Ended 31 March 31 March 2004 2003 Â£000 Â£000 Profit for the year 11,222 17,407 Dividends paid and proposed (4,263) (4,275) _______ _______ Retained profits 6,959 13,132 Revaluation of investment property - subsidiaries 23,912 (13,434) - joint ventures - (470) Minority interest in revaluation surplus (849) (599) Issue of shares 635 - Purchase of own shares (21,515) - _______ _______ Net change in shareholders' funds 9,142 (1,371) Opening shareholders' funds 235,881 237,252 _______ _______ Closing shareholders' funds 245,023 235,881 _______ _______ Statement of Total Recognised Gains and Losses Year Ended Year Ended 31 March 31 March 2004 2003 Â£000 Â£000 Profit for the year after taxation 11,454 17,567 Minority interest (232) (160) Revaluation of investment property - subsidiaries 23,912 (13,434) - joint ventures - (470) Minority interest in revaluation surplus (849) (599) _______ _______ Total recognised gains and losses since last financial statements 34,285 2,904 _______ _______ HELICAL BAR PLC BALANCE SHEETS UNAUDITED Notes 31 March 31 March 2004 2003 Â£000 Â£000 Â£000 Â£000 Shareholders' funds 245,023 235,881 _______ _______ Represented by: Fixed assets Intangible assets - goodwill 8 873 912 Tangible assets 9 503 614 Investment property 9 334,932 342,484 Investments 10 10,106 9,011 Investment in joint ventures Share of gross assets 17,684 23,244 Share of gross liabilities (16,965) (21,482) _______ _______ 719 1,762 _______ _______ 347,133 354,783 Current assets Stock 11 70,254 41,112 Debtors 25,573 25,793 Investments 263 13 Cash 12 18,284 16,137 Creditors: amounts falling due within one year (78,662) (85,643) _______ _______ Total assets less current liabilities 382,845 352,195 Creditors: amounts falling due after more than one year 13 (131,779) (110,992) Provision for liabilities and charges - deferred tax 14 (2,345) (2,706) _______ _______ Net assets 248,721 238,497 Equity minority interests (3,698) (2,616) _______ _______ Shareholders' funds 245,023 235,881 _______ _______ HELICAL BAR PLC CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2004 UNAUDITED Year Ended Year Ended 31 March 31 March 2004 2003 Notes Â£000 Â£000 Net cash outflow from operating activities 17 (11,082) (27,283) Dividends from joint ventures 1,415 150 Returns on investment and servicing of finance (6,828) (9,910) Taxation (6,469) (3,945) Capital expenditure and financial investment 19,002 86,588 Disposals/(acquisitions) 40,415 (841) Equity dividends paid (4,309) (32,470) ______ ______ Cash flow before management of liquid resources and financing 32,144 12,289 Management of liquid resources 132 28,634 Financing - issue of shares 635 - - purchase of shares (21,515) - - decrease in debt (9,060) (71,594) - refinancing costs (57) (57) ______ ______ Increase/(decrease) in cash in the year 2,279 (30,728) ______ ______ Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash in the year 2,279 (30,728) Cash inflow from management of liquid resources (132) (28,634) Cash outflow from change in debt 9,117 71,651 Debt arrangement expenses (170) (783) ______ ______ Movement in net debt in the year 11,094 11,506 Net debt at beginning of the year (140,893) (152,399) ______ ______ Net debt at end of the year (129,799) (140,893) ______ ______ Notes to the Preliminary Announcement 1. 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 2004 2003 Â£000 Â£000 Trading property sales 5,264 2,588 Rental income 25,283 29,334 Developments 23,418 91,412 Other income and provisions 601 11,858 ______ ______ 54,566 135,192 ______ ______ Gross profit and adjusted profit Year Ended Year Ended 31 March 31 March 2004 2003 Â£000 Â£000 Trading property sales 1,031 349 Rental income 22,980 25,619 Developments 38 4,630 Other income and provisions 601 626 ______ ______ Gross profit 24,650 31,224 Central overheads (8,037) (6,391) Interest payable less receivable (6,572) (9,638) Share of joint venture company profits 1,636 1,544 ______ ______ Adjusted Profit 11,677 16,739 ______ ______ Adjusted profit is profit before taxation, profit on sale of investment properties, loss on sale of subsidiary and negative goodwill 2. Administrative expenses Year Ended 31 March Year Ended 2004 31 March 2003 Â£000 Â£000 Total administrative expenses 8,037 (29) ______ ______ Operating profit on ordinary activities is stated after: Staff costs 5,757 3,853 Depreciation 213 230 Auditors remuneration 110 108 Amortisation 65 51 Negative goodwill - (6,362) Remuneration in respect of directors was as follows: Profit on Pensions Salary/ Benefits Cash exercise of Incentive 2004 2003 2004 2003 Fees in kind bonuses share plan Total Total Total Total options Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Chairman J P Southwell 50 14 - - - 64 58 - - Non-executive directors CGH Weaver 28 - - - - 28 25 - - A R Beevor 28 - - - - 28 25 - - Executive directors M E Slade 511 34 - 576 396 1,517 510 2 2 NG McNair Scott 217 22 - - 132 371 201 40 35 G A Kaye 257 29 - - 132 418 712 - - P M Brown 257 36 1,000 - 132 1,425 603 - - ______ ______ ______ ______ ______ ______ ____ ______ ____ 1,348 135 1,000 576 792 3,851 2,134 42 37 ______ ______ ______ ______ ______ ______ ____ ______ ____ In order to compensate share option holders for the payment of the 100p special dividend in April 2002, the Group pays a cash bonus of 100p per share on the dates option holders exercise their options. The profit on exercise of share options of M E Slade includes a Â£140,378 cash bonus arising out of the exercise on 12 December 2003 of an option over 140,378 shares. The investment director P M Brown has a sector bonus scheme arrangement with the Group which rewards exceptional performance. Under the terms of this arrangement a maximum bonus of Â£1,000,000 is payable. 3. Profit on sale of investment properties Year Ended Year Ended 31 March 31 March 2004 2003 Â£000 Â£000 Net proceeds from sale of investment properties 84,213 133,294 Book value (82,178) (131,168) ______ _____ Profit on sale of investment properties 2,035 2,126 ______ _____ Net proceeds from the sale of investment properties and their associated book value include Â£41,000,000 of properties disposed of at book value on the sale of a subsidiary, Helical Properties (Capital House) Jersey Limited. 4. Net interest payable Year Ended Year Ended 31 March 31 March 2004 2003 Â£000 Â£000 Interest payable on bank loans and overdrafts 7,548 9,543 Finance arrangement costs 170 783 Other interest and similar charges 1,741 2,351 Interest capitalised (1,817) (795) Interest receivable and similar income (1,070) (2,244) ______ _____ 6,572 9,638 ______ _____ Interest payable on bank loans and overdrafts includes the Group's share of interest payable by joint ventures of Â£746,000 (2003: Â£935,000). 5. Taxation on profit on ordinary activities Year Ended Year Ended 31 March 31 March 2004 2003 Â£000 Â£000 The tax charge is based on the profit for the year and represents: - United Kingdom corporation tax at 30% (2003: 30%) 2,456 8,337 - Adjustments in respect of prior periods (67) (2,847) ______ _____ Current tax charge 2,389 5,490 Deferred tax - (reversal)/origination of timing differences (190) 2,170 ______ _____ Tax on profit on ordinary activities 2,199 7,660 ______ _____ The corporation tax charge includes the Group's share of the corporation tax provision of joint ventures of Â£372,000 (2003: Â£ nil). The deferred tax charge includes the Group's share of the deferred tax provision of joint ventures of Â£171,000 (2003 : Â£192,000). 6. Dividends Year Ended Year Ended 31 March 31 March 2004 2003 Â£000 Â£000 Attributable to equity share capital Ordinary - interim paid 6.60p (2003: 6.00p) per share 1,739 1,705 - final proposed 10.00p (2003: 9.00p) per share 2,524 2,570 ______ _____ Total 16.60p (2003: 15.00p) per share 4,263 4,275 ______ _____ The interim dividend of 6.60p was paid on 31 December 2003 to shareholders on the register on 5 December 2003. The final dividend, if approved at the AGM on 28 July 2004, will be paid on 29 July 2004 to shareholders on the register on 18 June 2004. 7. Earnings per share The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. Shares held by the ESOP, which has waived its entitlement to receive dividends, are treated as cancelled for the purposes of this calculation. The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares on the assumed exercise of all dilutive options. Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below. Year ended 31 March 2004 Earnings Weighted average Restated per share Â£ no. of shares amount pence Basic earnings per share 11,222,000 27,413,946 40.9 Dilutive effect of share options 897,915 __________ __________ ______ Diluted earnings per share 11,222,000 28,311,861 39.6 __________ __________ ______ Year ended 31 March 2003 Earnings Weighted average Per share amount Â£ no. of shares pence Basic earnings per share 17,407,000 28,421,537 61.2 Dilutive effect of share options 964,200 __________ __________ ______ Diluted earnings per share 17,407,000 29,385,737 59.2 __________ __________ ______ 8. Intangible fixed assets Goodwill Â£000 Cost at 1 April 2003 1,608 Additions 26 _____ Cost at 31 March 2004 1,634 _____ Amortisation at 1 April 2003 696 Provision for the year 65 _____ Amortisation at 31 March 2004 761 _____ Net book amount at 31 March 2004 873 _____ Net book amount at 31 March 2003 912 _____ 9. Tangible fixed assets Short leasehold Vehicles Investment Investment property & & office Properties Properties improvements equipment Freehold Leasehold Total Â£000 Â£000 Â£000 Â£000 Â£000 Cost or valuation at 1 April 2003 279,684 62,800 646 864 343,994 Additions at cost 50,170 294 - 141 50,605 Disposals (80,278) (1,900) - (185) (82,363) Revaluation 20,606 3,556 - - 24,162 ______ ______ ______ ______ ______ Cost or valuation at 31 March 2004 270,182 64,750 646 820 336,398 ______ ______ ______ ______ ______ Depreciation at - - 366 530 896 1 April 2003 Provision for the year - - 46 167 213 Eliminated on disposals - - - (146) (146) ______ ______ ______ ______ ______ Depreciation at 31 March 2004 - - 412 551 963 ______ ______ ______ ______ ______ Net book amount at 31 March 2004 270,182 64,750 234 269 335,435 ______ ______ ______ ______ ______ Net book amount at 31 March 2003 279,684 62,800 280 334 343,098 ______ ______ ______ ______ ______ Interest capitalised in respect of the development of investment properties is included in tangible fixed assets to the extent of Â£1,013,000 (2003: Â£1,013,000). Interest capitalised during the year in respect of investment properties in the course of development was nil (2003: nil). 10. Investments 31 March 31 March 2004 2003 Â£000 Â£000 Employees' Share Ownership Plan Trust ('ESOP') 10,106 9,011 At 31 March 2004 the ESOP held 1,361,939 (2003: 1,361,939) ordinary shares in Helical Bar plc over which options had been granted. At 31 March 2004 the ESOP held 130,000 (2003: nil) ordinary shares over which no options had been granted. 11. Stock 31 March 31 March 2004 2003 Â£000 Â£000 Development sites 46,236 20,593 Properties held as trading stock 24,018 20,519 ______ ______ 70,254 41,112 ______ ______ Interest capitalised in respect of the development of sites is included in stock to the extent of Â£1,666,000 (2003: Â£1,141,000). Interest capitalised during the year in respect of development sites amounted to Â£1,817,000 (2003: Â£795,000). 12. Cash 31 March 31 March 2004 2003 Â£000 Â£000 Rent deposits and cash held at managing agents 2,575 4,594 Cash secured against debt and cash held at 1,121 1,105 solicitors Cash held to fund future development costs 1,517 5,088 Free cash 13,071 5,350 ______ ______ 18,284 16,137 ______ ______ 13. Financing and financial instruments 31 March 31 March 2004 2003 Â£000 Â£000 Bank overdraft and loans - maturity Due after more than one year 131,779 110,992 Due within one year 16,304 46,038 ______ ______ 148,083 157,030 ______ ______ The Group has various undrawn committed borrowing facilities. The facilities available at 31 March 2004 in respect of which all conditions precedent had been met were as follows: 13. Financing and financial instruments (continued) 31 March 31 March 2004 2003 Â£000 Â£000 Expiring in one year or less 30,000 9,500 Expiring in more than one year but not more than two years - 10,000 Expiring in more than two years 6,661 33,560 ______ ______ 36,661 53,060 ______ ______ Interest Rates 31 March % Expiry 2004 Â£000 Fixed rate borrowings - fixed 9.050 Feb 2009 8,392 - swap rate plus bank margin 5.656 Sep 2005 9,040 - swap rate plus bank margin 4.965 Mar 2007 5,925 - swap rate plus bank margin 5.846 Jun 2006 3,500 - swap rate plus bank margin 5.721 Sep 2007 3,460 ________ ________ ________ Weighted average 7.044 Apr 2007 30,317 Floating rate borrowings 102,107 ________ ________ ________ Total borrowings 132,424 Deferred arrangement costs (645) ________ 131,779 ________ Floating rate borrowings bear interest at rates based on LIBOR. Hedging In addition to the fixed rates, borrowings are also hedged by the following financial instruments. Instrument Value Rate Start Expiry Â£000 % Current - cap 49,000 6.100 July 2004 - cap 80,000 7.500 Jan 2006 - collar 31,000 4.730-6.500 Jan 2006 - floor 49,000 4.730 Jan 2006 Future - collar 80,000 4.800-7.000 Jan 2006 Sept 2009 Gearing 31 March 31 March 2004 2003 Â£000 Â£000 Total borrowings 148,083 157,030 Cash (18,284) (16,137) _______ ______ Net borrowings 129,799 140,893 _______ ______ Net assets 248,721 238,497 Gearing 52% 59% Net borrowings exclude the Group's share of borrowings in joint ventures of Â£8,984,000 (2003: Â£14,355,000). Fair value of financial assets and financial liabilities 31 March 31 March 31 March 31 March 2004 2004 2003 2003 Book value Fair value Book value Fair value Â£000 Â£000 Â£000 Â£000 Borrowings 148,728 149,639 157,788 159,127 Interest rate swaps - 123 - 555 Other financial instruments - 1,848 (223) 5,185 _______ _______ _______ _______ 148,728 151,610 157,565 164,867 _______ _______ _______ _______ The fair value of financial assets and liabilities represents the mark to market valuations at 31 March 2004 and 31 March 2003. The adjustment to net assets from a recognition of these values would be to reduce diluted net asset value per share by 7p (2003: 15p). 14. Provision for liabilities and charges - deferred taxation Deferred taxation provided for in the financial statements is set out below: 31 March 31 March 2004 2003 Â£000 Â£000 Accelerated capital allowances 2,744 3,124 Other timing differences - 42 _______ _______ 2,744 3,166 Less: - discount (399) (460) _______ _______ Discounted provision for deferred tax 2,345 2,706 _______ _______ The Group 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 Group an obligation to pay more or less tax in the future have occurred by the balance sheet date. In accordance with FRS19, the Group makes full provision for timing differences which are primarily in respect of capital allowances on plant and machinery, industrial buildings allowances, chargeable gains on investment properties sold since the balance sheet date and tax losses. 31 March 31 March 2004 2003 Â£000 Â£000 Amounts unprovided are: _______ _______ Unrealised capital gains 20,509 17,144 _______ _______ No provision has been made for taxation which would accrue if the investment properties were sold at their revalued amounts. The adjustment to net assets resulting from a recognition of these amounts would be to reduce diluted net asset value per share by 70p (2003: 53p). 15. Share capital 31 March 31 March 2004 2003 Â£000 Â£000 Authorised - 688,954,752 ordinary shares of 5p each 34,448 34,448 _______ _______ 34,448 34,448 _______ _______ Allotted, called up and fully paid Attributable to equity interests: - 27,147,903 ordinary shares of 5p each 1,357 1,496 _______ _______ 1,357 1,496 _______ _______ Share options At 31 March 2004 options over 2,412,945 (2003: 2,553,323) new ordinary shares in the Company and 1,361,939 (2003: 1,361,939) purchased shares held by the ESOP had been granted to directors and employees under the Company's share option schemes. During the year no new options were granted and options over 140,378 new shares were exercised. 16. Net assets per share Number of Shares p.p.s. Change since 31.03.2003 000's % Â£000 Net asset value ('NAV') 245,024 27,148 903 +14.5 Add: potential exercise of options 10,889 2,413 _______ _______ _______ _______ Diluted NAV 255,913 29,561 866 +13.6 Adjustment for: - capital allowances provided for but unlikely to be clawed back 2,345 - 8 _______ _______ _______ _______ Adjusted diluted NAV 258,258 29,561 874 +13.5 Adjustment for: - potential capital gains unprovided for (20,509) - (70) - mark to market value of interest rate hedging agreements (2,017) - (7) _______ _______ _______ _______ Adjusted diluted triple NAV 235,732 29,561 797 +13.5 _______ _______ _______ _______ 17. Reconciliation of operating profit to net cash flow from operating activities Year Ended Year Ended 31 March 2004 31 March 2003 Â£000 Â£000 Operating profit 16,613 31,195 Depreciation of fixed assets 213 230 Provision against investments (133) - Profit/(loss) on sale of fixed assets (9) 38 Amortisation of goodwill 65 51 Negative goodwill - (6,362) Increase in debtors (580) (3,704) Increase/(decrease) in creditors 74 (37,999) Increase in stock (27,325) (10,732) _______ _______ Net cash flow from operating activities (11,082) (27,283) _______ _______ 18. Basis of preparation of the preliminary announcement The preliminary announcement includes extracts from the draft statutory accounts for the year to 31 March 2004. The figures relating to the year to 31 March 2004 are unaudited. The comparative figures relating to the year to 31 March 2003 are taken from the audited statutory accounts for that year. This information is provided by RNS The company news service from the London Stock Exchange D FR UUUPUQUPCPPR

Companies

Helical (HLCL)

Thursday, 21st November 2024

COMPANIES COVERED:

HLMA JD. ITH

JD Sports tanks after management tighten profit guidance towards the lower end of expectations, Halma finds support from strong earnings and capital return commitment cheers shareholders in Ithica Energy.

Full Archive

UK 100

Latest directors dealings

5 hours ago Alphawave IP Group
6 hours ago WH Smith
6 hours ago Staffline Group
6 hours ago Manchester & London Investment Trust
7 hours ago Associated British Foods

All directors dealings today