Interim Results
Helical Bar PLC
16 November 2000
H E L I C A L B A R P L C
I n t e r i m R e s u l t s
For the half year to 30 September 2000
HELICAL RIDING HIGH ON CENTRAL LONDON
* Interim profits before tax 66 per cent higher at £15.1 million (1999: £
9.1 million)
* Development profits double on City lettings
* Interim dividend 5.00p - up 14 per cent
* Earnings per share increased by 52 per cent to 37.6p (1999: 24.7p)
* Investment property refurbishments boost future rental flows
John Southwell, Chairman said: 'Due to the successful letting at 100 Wood
Street, we have had an exceptionally good six months. The repositioned
investment portfolio and our development programme enable us to benefit from
increased demand for space and rising rent levels in London and the South
East.'
Further information, please contact:
Helical Bar plc
Michael Slade (Managing Director) 020 7629 0113
Nigel McNair Scott (Finance Director)
Financial Dynamics
Emma Denne 020 7831 3113
C h a i r m a n ' s S t a t e m e n t
Results
I am pleased to report the following results.
Helical's turnover for the period was £80.9m (1999: £68.3m). Developments
contributed £60.5m (1999: £53.5m), trading £6.8m (1999: £1.9m) and rental
income £13.6m (1999: £12.9m).
Development profits of £16.8m (1999: £8.7m), net rental income of £12.0m
(1999: £11.4m) and trading profits of £0.6m (1999: loss of £0.7m) contributed
to a gross profit of £29.4m (1999: £19.4m). After accounting for interest and
administration costs, profits before taxation rose by 66 per cent to £15.1m
(1999: £9.1m). Fully diluted earnings per share rose to 37.6p (1999: 24.7p).
Net assets per share increased by 30p to 633p. This figure is based on
investment property values at 31 March 2000. It excludes valuation surpluses
on trading and development stock and potential profits on pre-sold
developments.
There is an increase in the interim dividend of 14 per cent to 5.0p (1999:
4.4p).
Development Programme
During the six months to 30 September 2000 Helical generated a level of
development profits normally achieved only in a full year. This exceptional
performance arose primarily from the letting of 100 Wood Street, London EC2.
This 150,000 sq.ft. office development, built for Despa, was completed in
March of this year. The award winning building was let quickly to Chase
Manhattan Bank, Friends Ivory & Sime Plc, Law Debenture Corporation and
Schroder Investment Management Limited. The building was let at an average
rent of £53 p.s.f.
At 25 Chiswell Street, London EC1 the 260,000 sq.ft. office development,
pre-let to City solicitors Slaughter and May and also funded by Despa, is
nearing completion. Next to this development is 3 Bunhill Row, London EC1
where we have cleared the site in readiness for the construction of 95,000
sq.ft. of offices.
In Hammersmith work continues on our two office developments on the site of
the former West London Hospital. At 200 Hammersmith Road, London W6 we are
constructing 65,000 sq.ft. of offices pre-sold to a Mercury Asset Management/
HQ Global Offices partnership to be run as a serviced office facility. We have
retained the neighbouring Saunders Building for a development which will
comprise around 14,000 sq.ft. of offices. Both buildings will be completed by
late 2001.
At One Plough Place, London EC4 work continues on our 60,000 sq.ft. office
development for Henderson Investors which is due for completion in Spring
2001.
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Looking forward, the 140,000 sq.ft. office development at The Meadows,
Camberley pre-funded by Scottish Widows is due for completion at the end of
2001. In July we announced an office campus development of 340,000 sq.ft. in
five buildings, funded by Prudential, on a 22 acre site at The Heights,
Weybridge, to be completed by Spring 2002. Recently we were selected as
development partner by NCP on the re-development of their car park in Brewer
Street, London W1. This proposed mixed use scheme is likely to comprise 80,000
sq.ft. of offices, 40,000 sq.ft. of residential and 20,000 sq.ft. of retail
space with completion due in 2003. The company has acquired a site in Madrid
for the development, in partnership with occupiers, of a telehousing building.
Helical Retail, our joint venture with Oswin Developments and now led by
Jonathan Cox, has two retail developments under way. At Boltongate Retail Park
a 122,000 sq.ft. retail warehouse is being built for B&Q, funded by HSBC. This
scheme will be completed in Summer 2001. At Oakenshaw Road, Solihull a 12,500
sq.ft. retail warehouse, pre-sold to Nestle Pension Fund, will also be
completed next Summer. In Middlesbrough, a small portfolio of five shops next
to the Captain Cook Square development, completed last year, have been sold,
with a further four shops on the market. Helical Retail are concentrating on
putting together new schemes in Accrington, Wigan, Great Yarmouth and
Dorchester and, in the longer term, in Ipswich, Leicester, Newcastle and
Blackburn.
Investment Portfolio
Over recent years Helical has virtually eliminated its in-town retail exposure
refocusing on the Central London office market where it now has about two
thirds of its assets, all of which have been acquired since 1997.
Four empty office buildings have been acquired for refurbishment during 2000
with a projected end value approaching £100m. Rex House, Regent Street, SW1
(70,000 sq.ft.) is a head leasehold interest with 35 years remaining scheduled
for completion in December 2000. 31,345 sq.ft. has been pre-let to Russell
Systems Limited, whose ultimate parent is The North Western Mutual Life
Assurance Company, on a 20 year lease at £54 p.s.f. 4/5 Paris Gardens,
Southwark SE1 (48,000 sq. ft.) has been pre-let to Guardian IT on a 20 year
lease at £24.50p.s.f. 48 Gracechurch Street, EC3 (18,000sq. ft.) includes a
retail conversion and 80% of the space is under offer at rents of up to £49
p.s.f. Finally, Shepherds Building, Shepherds Bush (155,000 sq. ft.) has a
third of the space due for completion at Christmas with the remainder
scheduled for May next year. About a quarter of the accommodation is under
offer.
Turning to the existing portfolio, new rental highs have been achieved at the
Rotunda, Camden and 61 Southwark Street, SE1 following rolling refurbishment
programmes and both are now fully let. Similar refurbishments are being
completed at 71 Kingsway, WC2 and 5/10 Bury Street, EC3 with lettings in
solicitors' hands.
The principal sale during the first half was CBXII, Milton Keynes for £26m.
Helical's profit of over £6m on this transaction was already reflected through
its revaluation reserve in the 31 March 2000 year end figures.
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Financing
Helical seeks to manage financial risk by ensuring that there is sufficient
liquidity to meet foreseeable needs and to invest surplus cash safely and
profitably. Earlier this year the company saw an opportunity to invest surplus
cash in shares of other property companies as share prices reflected
substantial discounts to net asset value. As these discounts narrowed, the
shares were sold at prices which provided a good return on equity.
Whilst short term interest rates have remained relatively stable over the last
six months, long term rates have edged downwards, reducing the FRS13 net asset
surplus from £2.4m (7p per share) to £0.9m (3p per share).
The high level of Stamp Duty has reduced trading activity. The unfair
discrimination against property as an asset class reduces the flow of funds
into the market and discourages the provision of up to date commercial space
vital to our position as a trading nation. Sadly, so far, the Government has
recognised the effect of its actions only on deprived inner city areas.
Summary
Due to the successful letting at 100 Wood Street, we have had an exceptionally
good six months. The repositioned investment portfolio and our development
programme enable us to benefit from increased demand for space and rising rent
levels in London and the South East.
John Southwell
CHAIRMAN
16 November 2000
- 3 -
Independent Review Report to Helical Bar plc
Introduction
We have been instructed by the company to review the financial information set
out on pages 5 to 8 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing
Rules of the Financial Services Authority require that the accounting policies
and presentation applied to the interim figures should be consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999
/4 'Review of Interim Financial Information' issued by the Auditing Practices
Board. A review consists principally of making enquiries of management and
applying analytical procedures to the financial information and underlying
financial data and, based thereon, assessing whether the accounting policies
and presentation have been consistently applied unless otherwise disclosed. A
review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than
an audit performed in accordance with Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2000.
Grant Thornton
Registered Auditors
Chartered Accountants
16 November 2000
- 4 -
Group Profit and Loss Account
For the half year to 30 September 2000
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2000 1999 2000
Notes £000 £000 £000
Turnover 1 80,892 68,291 149,922
Cost of sales (51,467) (48,907) (106,440)
Gross profit 1 29,425 19,384 43,482
Administrative expenses (4,759) (3,295) (9,669)
Operating profit 24,666 16,089 33,813
Profit on sale of investment 157 1,166 4,555
properties
Profit on ordinary activities before 24,823 17,255 38,368
interest
Net interest payable and similar (9,687) (8,138) (16,348)
charges
Profit on ordinary activities before 9,117 22,020
taxation 15,136
Taxation (3,918) (1,520) (6,032)
Profit on ordinary activities after 11,218 7,597 15,988
taxation
Minority interest (13) (306) (77)
Profit for the period 11,205 7,291 15,911
Ordinary dividends - 5.0p (4.4p) (1,445) (1,272) (3,223)
Retained profit for the period 9,760 6,019 12,688
Earnings per 5p share 2
- basic 38.8p 25.2p 55.0p
- fully diluted 37.6p 24.7p 53.7p
- 5 -
Summary Group Balance Sheet
At 30 September 2000
Unaudited Audited
At At
30 September 31 March
2000 2000
£000 £000
Fixed assets 412,484 424,693
Fixed assets for resale 525 525
Stock 35,928 22,020
Investments 1 5,236
Debtors 55,763 54,786
Cash 7,234 16,991
Creditors falling due within one year (61,205) (80,515)
Creditors falling due after one year (255,359) (257,384)
Provisions for liabilities and charges - (1,500)
Net Assets 195,371 184,852
Capital & Reserves
Called up share capital 1,496 1,481
Share premium account 35,264 34,502
Revaluation reserve 89,287 95,701
Capital redemption and other reserves 7,392 7,392
Profit and loss account 60,625 44,452
Shareholders' funds 194,064 183,528
Minority interests 1,307 1,324
195,371 184,852
Shareholders' Funds
Attributable to equity interests 194,064 183,528
Net assets per share
basic 649p 620p
fully diluted 633p 603p
- 6 -
Summary Cash Flow Statement
For the half year to 30 September 2000
Unaudited Unaudited Audited
Half Year Half Year Year To
To To
31
30 30 March
September September
Notes 2000
2000 1999
£000
£000 £000
Net cash inflow from 4 2,331 22,597 45,569
operating activities
Returns on investment and servicing (10,221) (8,763) (19,486)
of finance
Taxation (1,512) (429) (4,560)
Capital expenditure and financial (86) (11,984) (4,886)
investment
Acquisitions (40) (12,390) (9,028)
Equity dividends paid (1,951) (16,186) (31,910)
Cash flow before management of
liquid resources and financing (11,479) (27,155) (24,301)
Management of liquid resources 3,062 17,654 30,347
Financing
- issue/(redemption) of shares 777 (20) (20)
- (decrease)/increase in debt (2,285) 14,503 (3,086)
(Decrease)/increase in cash (9,925) 4,982 2,940
Reconciliation of net cash flow to movement
in net debt
(Decrease)/increase in cash in the (9,925) 4,982 2,940
period
Cash flow from management of (3,062) (17,654) (30,347)
liquid resources
Cash flow from change in net debt 2,285 (14,503) 3,086
Liability acquired with subsidiary - (40,382) (43,910)
Debt arrangement expenses (276) (194) (365)
Movement in net debt in the period (10,978) (67,751) (68,596)
Net debt at beginning of the period (243,085) (174,489) (174,489)
Net debt at end of the period (254,063) (242,240) (243,085)
Gearing 133% 163% 131%
- 7 -
Statement of Total Recognised Gains and Losses
For the half year to 30 September 2000
Unaudited Unaudited Audited
Half Year Half Year Year To
To To
31
30 30 March
September September
2000 1999 2000
£000 £000 £000
Profit for the period after taxation 11,218 7,597 15,988
Minority interest (13) (306) (77)
Surplus on revaluation of investment
properties - - 30,404
Minority interest in revaluation
surplus - - (1,068)
Total recognised gains and losses relating to 11,205 7,291 45,247
the period
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Notes to the Interim Statement
1. Turnover and gross profit on ordinary activities before taxation
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2000 1999 2000
Turnover £000 £000 £000
Trading property sales - 1,805 3,890
Rental income 13,561 12,917 26,656
Developments 60,461 53,541 116,243
Share dealing 6,815 - -
Other income 55 28 3,133
80,892 68,291 149,922
Gross Profit
Trading property sales (445) (92) 372
Net rental income 11,977 11,421 23,652
Developments 16,827 8,698 19,345
Share dealing 1,144 - -
Other net income (78) (643) 113
Gross profit 29,425 19,384 43,482
Central overheads (4,759) (3,295) (9,669)
Interest payable less receivable (9,687) (8,138) (16,348)
Profit before taxation and profit on sale of 14,979 7,951 17,465
investment properties
2. Earnings per share
Basic earnings per share have been calculated on the basis of profits after
tax on 28,903,697 (1999 28,903,697) ordinary shares. Fully diluted earnings
per share have been restated to comply with Financial Reporting Standard No.
14 and are calculated on 29,795,977 (1999 29,490,150) ordinary shares which
include the exercise of share options.
- 9 -
3. Notes to the Balance Sheet
Realisations of £6.4m of property revaluation surpluses of prior periods have
been transferred to the profit and loss reserve.
Investment properties within fixed assets are carried at cost or valuation at
31 March 2000.
4. Reconciliation of operating profit to net cash flow from operating
activities
Unaudited Unaudited Audited
Half Year To Half Year To Year To
30 September 30 September 31 March
2000 1999 2000
£000 £000 £000
Operating profit 24,666 16,089 33,813
Depreciation of fixed assets 120 112 226
Deficit in ESOP - - 703
Profit on sale of fixed assets (11) (4) (7)
Profit on sale of investments (1,143) - -
Writedown of goodwill 24 35 612
(Increase)/decrease in debtors (2,667) 1,165 (12,819)
(Decrease)/increase in creditors (5,385) 3,691 7,346
(Increase)/decrease in stocks (13,273) 1,509 15,695
Net cash inflow from operating activities 2,331 22,597 45,569
5. Notes to the Interim Statement
The interim statement was approved by the Board of Directors on 15 November
2000. The foregoing financial information does not represent full accounts
within the meaning of S.240 of the Companies Act 1985, and has been reviewed
but not audited by the auditors, nor filed with the Registrar of Companies.
The results for the 12 months to 31 March 2000 are an abridged version of the
full accounts which received an unqualified auditor's report and have been
filed with the Registrar of Companies.
The interim dividend is payable on 22 December 2000 to shareholders on the
register on 1 December 2000.
This statement is being sent to shareholders and will be available from the
Company's Registered Office at 11-15 Farm Street, London, W1J 5RS.
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