Interim Results

Peel Hldgs PLC 22 December 2003 Chairman's Statement Results Profit on ordinary activities before taxation for the half year ended 30th September 2003 increased marginally to £11.77m compared with £11.27m for the corresponding period in the previous year. Turnover for the half year increased by £24.26m from £76.91m to £101.17m. The Ports division increased turnover by £15.63m, which included a full half year contribution from Clydeport for the first time. Turnover increased by £7.79m at the Airport division, which included a full half year contribution from Teesside International Airport and an improvement in charter passenger income and rental income at Liverpool John Lennon Airport. Turnover at The Trafford Centre increased by £2.07m due to higher rental income from new lettings and rent reviews, and turnover from the Land and Property division decreased by £1.23m largely due to a reduction in trading property sales. The uplift in turnover led to an increase in operating profit of £8.99m to £53.55m (2002: £44.56m), which included an increase of £4.67m from the Ports division, £1.70m from the Airports division, £1.63m from The Trafford Centre and £0.99m from the Land and Property division. The increase in operating profit was offset by a fall in profits from the disposal of fixed assets of £2.09m to £1.41m (2002: £3.50m), and an increase of £6.40m in net interest payable to £43.20m (2002: £36.80m) as a result of increased borrowings to fund the acquisition of Clydeport. Profit on ordinary activities after taxation increased to £7.33m (2002: £7.13m), to give diluted earnings per ordinary share of 10.96p (2002: 10.52p). The Board has declared an interim dividend of 4.8p per ordinary share (2002: 4.8p). This will be paid on 6th April 2004 to ordinary shareholders on the register at the close of business on 5th March 2004. Balance Sheet Consolidated shareholders' funds increased slightly during the half year by £1.44m to £874.64m, compared to £873.20m at 31st March 2003, producing fully diluted net assets per ordinary share of 1,303p, compared to 1,301p at 31st March 2003, an increase of 2p. The increase in shareholders' funds was due to the retained profit for the half year of £4.01m, together with a foreign exchange loss of £2.57m. Finances Net Group borrowings at 30th September 2003 stood at £1,070.25m compared to £1,044.18m at 31st March 2003, an increase of £26.07m. Borrowings totalling £266.04m were classified as repayable within one year at 30th September 2003. Subsequent to the half year, £219.81m of these borrowings have been refinanced and replaced with new facilities, which are for periods greater than one year. Gearing, based on shareholders' funds, at the half year increased to 122.4% (31st March 2003: 119.6%) following the increase in borrowings at 30th September 2003. The Trafford Centre Visitor numbers for the six months to 30th September 2003 were comparable with the same period in the previous year. This was largely due to the exceptionally good weather in the summer as well as the inevitability that visitor numbers must begin to level off at some stage. However, returns from retailers indicate trading figures have remained positive with sales approximately 6% higher than for the same period last year. At the half year, the annualised rent roll including turnover rents stood at £53.47m (2002: £53.03m). This figure does not include the full effects of the ongoing rent reviews, most of which fell due in July 2003, and on which satisfactory progress is being made. In July 2003, the Centre entered into an agreement for lease with John Lewis PLC in respect of that part of the Centre known as the Festival Village. The new 225,000 sq. ft. department store will be the largest unit in the Centre and is due to open for business in mid 2005. Work has almost been completed on the new direct vehicular access into the Centre from the M60 junction 9 which will open in early 2004. Peel Land and Property The property investment department has continued with its strategy of expanding key land holdings and property investments around existing investments. Sales produced capital receipts of £8.91m and purchases amounted to £16.65m during the period and included the purchase of properties in Hyndburn, Lancashire adjacent to an existing retail park and an industrial property adjacent to The Trafford Centre. As at 30th September 2003, annualised rental income for the UK property investment portfolio was £37.63m compared to £36.26m at 31st March 2003. The majority of this increase emanated from new lettings which created additional rental income of £1.35m per annum, whilst rent reviews and lease renewals added annualised rental income of £0.79m. Offset against these increases was lost rent due to new vacancies totalling £0.98m per annum. At the half year, voids represented annualised rental income of £1.73m compared with £1.88m at 31st March 2003. The property development department continues to progress extensions to retail parks at Barnsley, 70,000 sq. ft., and Straiton, Edinburgh, 50,000 sq. ft. During the period a 14,000 sq. ft. unit at Stockport has been completed and let, whilst 20,000 sq. ft. of office space at Wakefield has also been completed, let and sold. Construction is also well underway on land adjacent to The Trafford Centre on a 130,000 sq. ft. retail warehouse unit pre-let to B&Q and on a high quality 108,000 sq. ft. office development at Trafford Quays. The land investment, development and planning department continues to be extremely active in representing the Group's landholdings and appearing at numerous Unitary Development Plan and Local Plan reviews, as well as promoting the Group's views on the planning system at a national and regional level to encourage change that would benefit the Group. The planning system is becoming increasingly complicated and successful planning consents are proving difficult to achieve. Despite the difficult planning circumstances that prevail, the department contracted and completed on land sales totalling £1.22m producing a profit of £0.74m. Successful acquisitions were completed on 1,200 acres which complement the existing portfolio. The environment and resource development department income for this period was in line with forecasts at £0.55m (2002: £1.01m). The reduction relative to the same period last year was due to a number of one-off settlements in 2002, which were not repeated. The objective of the department is to grow its ongoing income base to create sustainable expansion. Accordingly there are now a number of mineral extraction, waste management and renewable energy schemes in the planning process. Peel Ports The results for the half year include the full six months results from Clydeport. Performance from the Scottish ports in the first half year was positive, with tonnages through the Hunterston coal importation facility at 1.70m tonnes. Tonnages at Glasgow and Greenock were up in the period with Glasgow benefiting from increased levels of animal feed and new cargoes of plywood, plasterboard and fish food, while Greenock handled increased volumes of containers. Trading conditions on the Ship Canal were difficult in the six months, and tonnages were marginally down over the half year at 3.19m tonnes (2002: 3.23m tonnes). The decrease resulted mainly from a further drop in traffic handled for the Shell UK refinery adjacent to the canal. In the rest of the Lower Reaches of the canal, Eastham to Runcorn, tonnage remained almost identical to the equivalent period in the previous year. There was an increase in traffic to the Upper Reaches of the canal, where tonnage increased by 2.3%. Property investment activities in Scotland were in line with expectations, whilst there were no development property sales in the period, the first housing phase of the Glasgow Harbour project was marketed. The level of sales by the three house builders were encouraging, with deposits being taken on all 450 residential units released in this phase. Peel Airports Passenger throughput at Liverpool John Lennon Airport for the six months increased to 1.74m (2002: 1.59m) an increase of 9.4% on the same period last year. Charter passenger numbers during the summer season exceeded expectations, and Liverpool welcomed JetMagic, which commenced a new twice daily service to Cork. The cargo market continued to experience difficult conditions, and tonnages for the period fell to 13,800 tonnes, a reduction of 11.2% compared to the equivalent period in 2002. Work is well underway on the extension to the terminal building to cater for up to 4.5m passengers per annum and on new aircraft parking areas, improvements to road infrastructure and a new car park. On 1st April 2003, a 75% shareholding was acquired in Teesside International Airport and passenger numbers for the six months were 0.43m. In the coming years substantial investment will be needed in the Airport to improve facilities to attract both new airlines and additional passengers. In October 2003 the low cost carrier bmibaby launched new services from Teesside with aircraft to be based at the Airport from March 2004. At Doncaster Finningley Airport planning continues to prepare the site for the commencement of commercial flights in Spring 2005. A detailed planning application for a 145,000 sq. ft. terminal building was submitted in September 2003 and it is hoped that permission will be granted shortly. At Sheffield City Airport, the strategy of forming a general aviation business has reduced operating losses. Outlook Although the planning environment is increasingly restrictive, demanding more investment in time and resources, we believe the mix of the Group's assets and businesses should continue to create opportunities to meet our longer term growth objectives. John Whittaker 22nd December 2003 Chairman Group Profit and Loss Account for the half year ended 30th September 2003 Unaudited Unaudited Audited Year to 6 months to 6 months to 31st March 30th September 30th September 2003 2003 2002 Note £'000 £'000 £'000 Turnover 101,173 76,907 161,181 ------------------------- ------ ----------- ------------ --------- Operating profit 53,555 44,559 99,533 Profit on disposal of fixed assets 1,415 3,504 6,431 ------------------------- ------ ----------- ------------ --------- Profit on ordinary activities before 54,970 48,063 105,964 interest and taxation Net interest payable and similar charges (43,202) (36,798) (75,813) ------------------------- ------ ----------- ------------ --------- Profit on ordinary activities before taxation 11,768 11,265 30,151 Tax on profit on ordinary activities (4,437) (4,136) (12,743) ------------------------- ------ ----------- ------------ --------- Profit on ordinary activities after taxation 7,331 7,129 17,408 Minority interests 24 (68) (101) ------------------------- ------ ----------- ------------ --------- Profit for the period 7,355 7,061 17,307 Dividends on non-equity share capital (361) (362) (725) ------------------------- ------ ----------- ------------ --------- Profit for the financial period attributable to ordinary shareholders 6,994 6,699 16,582 Dividends on equity share capital 1 (2,986) (2,986) (9,332) ------------------------- ------ ----------- ------------ --------- Retained profit for the financial period 4,008 3,713 7,250 ------------------------- ------ ----------- ------------ --------- Earnings per ordinary share 2 Basic earnings 11.24p 10.77p 26.66p Diluted earnings 10.96p 10.52p 25.78p ------------------------- ------ ----------- ------------ --------- Group Balance Sheet as at 30th September 2003 Unaudited Unaudited Audited As at As at As at 30th September 30th September 31st March 2003 2002 2003 Note £'000 £'000 £'000 Fixed assets Intangible assets 38,337 2,092 39,336 Tangible assets Investment properties 1,739,197 1,637,856 1,707,819 Other fixed assets 217,269 109,782 202,886 Investments 62,969 43,296 62,731 ---------------------------- ------ ----------- ------------ --------- 2,057,772 1,793,026 2,012,772 ---------------------------- ------ ----------- ------------ --------- Current assets Stocks 11,803 5,781 11,234 Debtors 39,346 27,748 44,257 Cash at bank and in hand 106,558 127,746 103,883 ---------------------------- ------ ----------- ------------ --------- 157,707 161,275 159,374 Creditors (amounts falling due within one year) (346,369) (105,793) (239,825) ---------------------------- ------ ----------- ------------ --------- Net current (liabilities)/assets (188,662) 55,482 (80,451) ---------------------------- ------ ----------- ------------ --------- Total assets less current liabilities 1,869,110 1,848,508 1,932,321 Creditors (amounts falling due after more than one year) (910,768) (972,193) (986,221) Provision for liabilities and charges (46,513) (32,978) (43,546) Accruals and deferred income (20,228) (15,742) (19,347) ---------------------------- ------ ----------- ------------ --------- Net assets excluding pension (liability)/asset 891,601 827,595 883,207 Pension (liability)/asset (12,010) 78 (7,798) ---------------------------- ------ ----------- ------------ --------- Net assets including pension (liability)/asset 879,591 827,673 875,409 ---------------------------- ------ ----------- ------------ --------- Financed by capital and reserves Called-up share capital 39,276 39,276 39,276 Share premium account 103,789 103,789 103,789 Capital redemption reserve 115,676 115,672 115,676 Revaluation reserve 715,164 696,644 715,164 Capital reserve 45,065 45,065 45,065 Merger relief reserve 7,954 7,954 7,954 Profit and loss account (91,953) (122,575) (93,391) ---------------------------- ------ ----------- ------------ --------- Consolidated capital and reserves 934,971 885,825 933,533 Shares held by Largs Limited in Peel Holdings p.l.c. (60,328) (60,328) (60,328) ---------------------------- ------ ----------- ------------ --------- Shareholders' funds 3 874,643 825,497 873,205 Equity minority interests 4,948 2,176 2,204 ---------------------------- ------ ----------- ------------ --------- 879,591 827,673 875,409 ---------------------------- ------ ----------- ------------ --------- Net assets per ordinary share Fully diluted 4 1,303p 1,230p 1,301p Group Cash Flow Statement for the half year ended 30th September 2003 Unaudited Unaudited Audited 6 months to 6 months to Year to 30th September 30th September 31st March 2003 2002 2003 Note £'000 £'000 £'000 Cash flow from operating activities 5(a) 62,168 44,650 107,165 Returns on investments and servicing of finance 5(b) (43,289) (40,623) (81,876) Taxation (3,536) 2,457 (104) Capital expenditure and financial investment 5(c) (29,923) (15,944) (37,967) Acquisitions and disposals 5(d) 130 - (152,500) Equity dividends paid (9,086) (8,811) (9,330) ----------------------------- ------ ----------- ----------- ---------- Cash flow before management of liquid resources and financing (23,536) (18,271) (174,612) Management of liquid resources (2,622) (1,670) 34,205 Financing 5(e) 27,302 (48,745) 89,746 ----------------------------- ------ ----------- ----------- ---------- Increase/(decrease) in cash in the period 1,144 (68,686) (50,661) ----------------------------- ------ ----------- ----------- ---------- Reconciliation of Cash Flow to Movement in Net Debt for the half year ended 30th September 2003 Unaudited Unaudited Audited 6 months to 6 months to Year to 30th September 30th September 31st March 2003 2002 2003 Note £'000 £'000 £'000 Movement in cash in the period 6 731 (68,736) (53,929) Cash movement from management of liquid resources 6 2,622 1,670 (34,205) Movements in overdrafts 6 413 50 3,268 Net movement in other debt due within one year 6 (26,155) (299) (7,467) Net movement in debt due after more than one year 6 (297) 50,256 (81,924) Translation and other non-cash adjustments 6 (1,035) 1,229 (1,841) Arising on acquisition 6 (2,344) - (2,787) ----------------------------- ------ ----------- ----------- ---------- Change in net debt in the period (26,065) (15,830) (178,885) Net debt at beginning of period (1,044,184) (865,299) (865,299) --------------------------------- ----------- ----------- ---------- Net debt at end of period (1,070,249) (881,129) (1,044,184) --------------------------------- ----------- ----------- ---------- Notes to the Interim Results for the half year ended 30th September 2003 1. Dividends on Equity Share Capital An interim dividend of 4.8p per ordinary share (2002: 4.8p) will be paid on 6th April 2004 to ordinary shareholders on the register at the close of business on 5th March 2004. 2. Earnings per Ordinary Share The calculation of earnings per ordinary share is based on profit after tax, non-equity dividends and minority interests of £6,994,000 (2002: £6,699,000) and on 62,215,827 ordinary shares (2002: 62,205,919) being the weighted average number of ordinary shares in issue during the period ended 30th September 2003. The weighted average number of ordinary shares used in the calculation of diluted earnings per ordinary share is 67,127,727 ordinary shares (2002: 67,136,909). This has been adjusted for the effect of the conversion of all the 5.25% convertible cumulative non-voting preference shares of £1 each. 3. Reconciliation of Movements in Shareholders' Funds Unaudited Unaudited Audited 6 months to 6 months to Year to 30th September 30th September 31st March 2003 2002 2003 £'000 £'000 £'000 Profit for the period 7,355 7,061 17,307 Dividends (3,347) (3,348) (10,057) Unrealised net surplus on revaluation of investment properties - 71,384 125,558 Foreign exchange adjustments (2,570) (5,074) (5,335) Actuarial loss relating to pension funds - - (9,741) Purchase of own shares - (110) (111) --------------------------- ----------- ----------- ---------- Net increase in shareholders' funds 1,438 69,913 117,621 --------------------------- ----------- ----------- ---------- Opening shareholders' funds 873,205 755,584 755,584 --------------------------- ----------- ----------- ---------- Closing shareholders' funds 874,643 825,497 873,205 --------------------------- ----------- ----------- ---------- 4. Fully Diluted Net Assets per Ordinary Share Unaudited Unaudited Audited As at As at As at 30th September 30th September 31st March 2003 2002 2003 £'000 £'000 £'000 Shareholders' funds 874,643 825,497 873,205 --------------------------- ----------- ----------- ---------- Number Number Number Ordinary shares in issue at period end 99,001,243 98,982,154 99,001,243 Shares held by Largs Limited in Peel Holdings p.l.c. (36,785,416) (36,785,416) (36,785,416) --------------------------- ----------- ----------- ---------- 62,215,827 62,196,738 62,215,827 Assumed conversion of 13,753,430 (2002: 13,806,882) 5.25% (plus tax 4,911,900 4,930,990 4,911,900 credit) convertible preference shares ----------- ----------- ---------- --------------------------- Number of ordinary shares deemed to be in issue assuming full conversion of the 5.25% (plus tax credit) convertible cumulative preference shares 67,127,727 67,127,728 67,127,727 --------------------------- ----------- ----------- ---------- Fully diluted net assets per ordinary share 1,303p 1,230p 1,301p --------------------------- ----------- ----------- ---------- 5. Notes to the Cash Flow Statement Unaudited Unaudited Audited 6 months to 6 months to Year to 30th September 30th September 31st March 2003 2002 2003 £'000 £'000 £'000 (a) Cash flow from operating activities Operating profit 53,555 44,559 99,533 Non-cash adjustments 7,559 6,239 8,739 Movement in stocks (587) 819 2,616 Movement in debtors (6,260) (4,643) 3,060 Movement in creditors 7,901 (2,324) (6,783) ------------------------------ ----------- ------------ --------- 62,168 44,650 107,165 ------------------------------ ----------- ------------ --------- (b) Returns on investments and servicing of finance Interest received 1,201 2,886 4,947 Interest paid (including capitalised) (44,011) (39,747) (80,778) Finance lease interest paid (116) (150) (315) Non-equity dividends paid (363) (362) (730) Other costs of finance - (3,250) (5,000) ------------------------------ ----------- ----------- ---------- (43,289) (40,623) (81,876) ------------------------------ ----------- ----------- ---------- (c) Capital expenditure and financial investment Purchase of fixed assets (53,580) (42,488) (80,606) Sale proceeds from fixed assets 23,873 26,661 44,899 Loans to associated undertakings (216) (117) (2,260) ------------------------------ ----------- ----------- ---------- (29,923) (15,944) (37,967) ------------------------------ ----------- ----------- ---------- (d) Acquisitions and disposals Acquisition 130 - (152,495) Purchase of interests in joint venture - - (5) companies ------------------------------ ----------- ----------- ---------- 130 - (152,500) ------------------------------ ----------- ----------- ---------- (e) Financing Purchase of own shares - (110) (111) Movement in loans 26,452 (49,955) 88,743 Grants received 850 1,320 1,114 ------------------------------ ----------- ----------- ---------- 27,302 (48,745) 89,746 ------------------------------ ----------- ----------- ---------- 6. Analysis of Movement in Group Net Debt 1st April Arising on Cash Exchange/ 30th September 2003 Acquisition Reallocations 2003 £'000 £'000 £'000 £'000 £'000 Cash at bank (accessible within 24 47,840 - 731 (678) 47,893 hours) Cash deposits 56,043 - 2,622 - 58,665 Overdrafts (1,572) - 413 - (1,159) Debt due within one year (160,274) (167) (26,155) (78,283) (264,879) (excluding overdrafts) Debt due after more than one year (986,221) (2,177) (297) 77,926 (910,769) --------------------- --------- ---------- ------- ---------- -------------- Net debt (1,044,184) (2,344) (22,686) (1,035) (1,070,249) --------------------- --------- ---------- ------- ---------- -------------- 7. Interim Results The board of directors approved the above results on 22nd December 2003. The interim results for the half year ended 30th September 2003 have been prepared using accounting policies stated in the Group's Report and Accounts for the year ended 31st March 2003 and are unaudited. They do not comprise full financial statements within the meaning of the Companies Act 1985 and have neither been reported upon by the auditors under Section 235 of the Companies Act 1985 nor reviewed in accordance with Accounting Practices Board Bulletin 1999/4. The comparative figures for the year ended 31st March 2003 are an abridged version of the Group's full accounts and, together with other financial information contained in these interim results, do not constitute statutory accounts of Peel Holdings p.l.c. within the meaning of Section 240 of the Companies Act 1985. The statutory accounts for the year ended 31st March 2003 have been delivered to the Registrar of Companies. The report of the auditors was not qualified and did not contain a statement under Section 237 (2) and (3) of the Companies Act 1985. Copies of this interim report will be despatched to shareholders by post. Further copies may be obtained from the Company Secretary, Peel Holdings p.l.c., Peel Dome, The Trafford Centre, Manchester M17 8PL. This information is provided by RNS The company news service from the London Stock Exchange

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