Final Results - Part 3
Quintain Estates & Development PLC
4 June 2001
PART 3
14. Short term investments
2001 2000 2001 2000
Group Group Company Company
£000 £000 £000 £000
Treasury stock 19 17 - -
Listed shares - 1,123 - -
______ ______ ______ ______
19 1,140 - -
====== ====== ====== ======
15. Creditors: amounts due within one year
2001 2000 2001 2000
Group Group Company Company
£000 £000 £000 £000
Bank and other loans
(secured) 25,489 169,752 - 62,927
Trade creditors 2,238 1,209 124 242
Other creditors 4,026 4,939 122 361
Amounts due to subsidiary
undertakings - - 50,791 -
Dividend proposed 5,116 4,610 5,116 4,610
Corporation tax payable 5,106 5,520 - -
Other taxation and social
security 536 53 543 44
Accruals and deferred income 21,703 16,440 4,984 2,846
______ ______ ______ ______
64,214 202,523 61,680 71,030
====== ====== ====== ======
16. Creditors: amounts falling due after more than one year
2001 2000 2001 2000
Group Group Company Company
£000 £000 £000 £000
Bank and other loans
(secured) 339,279 219,710 34,800 28,000
Convertible unsecured loan
stock 3,000 3,000 3,000 3,000
10% First Mortgage
Debenture
Stock 2011 9,251 9,469 - -
______ ______ ______ ______
351,530 232,179 37,800 31,000
Net obligations under hire
purchase contracts 16 27 16 27
______ ______ ______ ______
351,546 232,206 37,816 31,027
Deferred finance costs (3,272) (3,736) (44) (35)
______ ______ ______ ______
348,274 228,470 37,772 30,992
====== ====== ====== ======
The loans are secured by fixed and floating charges over assets owned by
subsidiary undertakings. In addition, the Company has guaranteed the bank
loans, undertaking a minimum net worth covenant for the Group of £170,000,000.
The unlisted convertible unsecured loan stock is repayable on 1 April 2007 and
interest is charged at 8% per annum. The loan stock is convertible at any time
at the option of the holder into ordinary shares of the Company at a
conversion price of 150p per share.
The 10% First Mortgage Debenture Stock 2011 issued by Estates Property
Investment Company Limited is secured by fixed and floating charges over the
assets of the subsidiary undertaking and has a redemption value of £8,250,000.
The premium over par arising from fair valuing the debenture on acquisition is
amortised over its remaining life.
17. Borrowings
The Group is subject to interest rate, liquidity and foreign currency risk.
The Group does not speculate in treasury products but uses these only to limit
potential interest rate fluctuations. It usually borrows at floating rates of
interest and uses hedging mechanisms to achieve an interest rate profile where
the majority of borrowings are fixed or capped. At the year end 77% (2000 :
58%) of the Group's net debt was fixed or protected, and the weighted average
rate of debt was 7.18% (2000 : 7.36%).
The Group's policy is to finance its activities with equity and long term
debt, with a gearing target of 100%. The weighted average tenure of the
Group's sterling debt is now 8 years (2000 : 5 years).
The Group borrows in the same currency as the assets being financed to
minimise foreign currency risk. No currency derivatives are used.
The maturity profile of the Group's debt was as follows:
Bank loans 2001 2000
and Other Total Total
overdrafts loans debt debt
£000 £000 £000 £000
Up to one year 15,989 9,500 25,489 169,752
Between one and
two years 77,527 - 77,527 2,909
Between two and
five years 117,735 - 117,735 73,228
Over five years 144,017 12,251 156,268 156,042
______ ______ ______ ______
355,268 21,751 377,019 401,931
====== ====== ====== ======
continued...
2001 2000
Undrawn Undrawn
facilities facilities
£000 £000
Up to one year - -
Between one and
two years 17,000 -
Between two and
five years 48,751 9,633
Over five years 68,357 79,880
______ ______
134,108 89,513
====== ======
After taking account of interest rate swap arrangements, the risk profile of
the Group's borrowings as at 31 March 2001 was as follows:
2001
Fixed Capped Floating Total
£000 £000 £000 £000
Sterling 145,706 90,000 122,181 357,887
French francs 4,218 - - 4,218
United States dollars 14,914 - - 14,914
______ ______ ______ ______
164,838 90,000 122,181 377,019
====== ====== ====== ======
continued...
2000
Fixed Capped Floating Total
£000 £000 £000 £000
Sterling 100,093 90,000 194,335 384,428
French francs - - 4,285 4,285
United States dollars 13,218 - - 13,218
______ ______ ______ ______
113,311 90,000 198,620 401,931
====== ====== ====== ======
The sterling benchmark rate for floating rate liabilities is LIBOR.
The interest rate profile of the Group's fixed rate debt was as follows:
Percent 2001 2000
£000 £000
3.0-4.0 - 10,000
5.0-6.0 4,218 -
6.0-7.0 89,500 46,829
7.0-8.0 49,869 44,482
8.0-9.0 21,251 12,000
______ ______
164,838 113,311
====== ======
The weighted average rate and the weighted average period of the Group's fixed
rated debt as at 31 March 2001 were as follows:
2001 2000
% Years % Years
Sterling 7.13 8 6.90 5
French francs 5.63 5 - -
United States dollars 7.74 8 7.74 9
Group 7.14 8 6.96 6
The weighted average rate of the Group debt as at 31 March 2001 was 7.18%
(2000 : 7.36%).
The fair value of the Group's financial liabilities as at 31 March 2001 was as
follows:
Book value/ Fair 2001 2000
notional principal value Difference Difference
£000 £000 £000 £000
Fixed rate debt 31,383 32,071 (688) 930
Interest rate swaps 133,455 139,331 (5,876) 826
Caps 90,000 89,955 45 537
______ ______ ______ ______
254,838 261,357 (6,519) 2,293
====== ====== ====== ======
The fair values were calculated by JC Rathbone Associates as at 31 March 2001
and reflect the replacement values of the financial instruments used to manage
the Group's exposure as at that date.
The Group has taken advantage of the exemption under FRS13 to exclude short
term debtors and creditors from these disclosures. As at 31 March 2001, the
Group had financial assets comprising cash at bank and in hand of £46,513,000.
The fair value of the Group's cash at bank and in hand approximates to the
carrying value because of its short maturity.
The maturity profile of the Group's share of floating rate debt held within
its joint ventures as at 31 March 2001 was as follows:
2001 2000
£000 £000
Up to one year 9,735 1,103
Between one and two years - 8,661
Between two and five years 14,438 9,445
______ ______
24,173 19,209
====== ======
18. Provisions for liabilities and charges
The movement in the year in provisions for liabilities and charges was as
follows:
£000
Balance 1 April 2000 2,101
Exchange movement 29
Release to profit and loss
account (155)
______
Balance 31 March 2001 1,975
======
The provisions represent deferred tax comprising:
Group 2001 2000
Provided Not provided Provided Not provided
£000 £000 £000 £000
Accelerated timing
differences and
revaluation surplus 881 25,138 819 26,388
Other timing differences 1,094 - 1,282 -
______ ______ ______ ______
1,975 25,138 2,101 26,388
====== ====== ====== ======
Other timing differences relate to swap breakage costs where a deduction has
been claimed in one of the Group's subsidiaries in an earlier year but a
corresponding credit is being released to the profit and loss account of
another subsidiary over the life of a new swap arrangement.
19. Called up share capital
£000
Authorised
200,000,000 shares of 25p each 50,000
======
Allotted, called up and
fully paid
In issue at 1 April 2000:
131,710,317 ordinary shares of
25p each 32,928
Issue on exercise of options
over 36,765 shares at 136p 9
Purchase and cancellation of
3,840,000 own shares at
between 160p and 181p (960)
______
In issue at 31 March 2001:
127,907,082 ordinary shares
of 25p each 31,977
======
At year end, the following options granted under the Company's Share Option
Schemes remained outstanding:
Date of grant Number of Exercise
ordinary price Exercise
shares per share period from to
26.07.94 130,000 110.0p 26.07.97 26.07.04
18.08.95 270,000 114.0p 18.08.98 18.08.05
23.07.96 158,494 113.0p 23.07.99 23.07.06
06.08.97 253,747 136.0p 06.08.00 06.08.07
22.02.99 1,257,752 151.5p 22.02.02 22.02.09
28.05.99 399,596 163.2p 28.05.02 28.05.09
13.06.00 442,070 155.3p 13.06.03 13.06.10
12.07.00 47,059 170.0p 12.07.03 12.07.10
________
2,958,718
=======
On 6 December 1993, Scottish Equitable PLC and The Standard Life Assurance
Company were granted options over 1,500,000 ordinary shares each. The options
may be exercised at any time, in whole or in part, before 6 December 2003 at
an exercise price of 110p per ordinary share.
Scottish Equitable PLC holds £3,000,000 of the Company's unlisted convertible
unsecured loan stock repayable by 1 April 2007. The loan stock is convertible
into ordinary shares at a conversion price of 150p per ordinary share.
20. Reserves
Capital
Share redemption Merger
premium reserve reserve
£000 £000 £000
Group
Balance 1 April 2000 38,297 - 106,062
Premium on issue of shares 40 - -
Purchase of own shares - 960 -
Surplus (deficit) on revaluation
Investment properties - - -
Joint ventures - - -
Associate - - -
Realisation of property
revaluation gains of
previous years - - -
Tax on realisation of revaluation surplus
- - -
Exchange movement in year - - -
Short leasehold amortisation - - -
Retained profit for the - - -
financial year _____ _____ ______
Balance at 31 March 2001 38,337 960 106,062
===== ===== =====
Company
Balance 1 April 2000 38,297 - 106,062
Premium on issue of shares 40 - -
Purchase of own shares - 960 -
Retained profit for the
financial year - - -
_____ _____ ______
Balance 31 March 2001 38,337 960 106,062
===== ===== =====
continued...
Capital Re-valuation Profit and
reserve reserve loss account
£000 £000 £000
Group
Balance 1 April 2000 2,750 102,446 31,324
Premium on issue of shares - - -
Purchase of own shares - - (6,425)
Surplus (deficit) on revaluation
Investment properties - 44,818 -
Joint ventures - (1,937) -
Associate - 238 -
Realisation of property
revaluation gains of
previous years - (9,786) 9,786
Tax on realisation of
revaluation surplus - (1,361) -
Exchange movement in year - - 496
Short leasehold amortisation - (80) 80
Retained profit for the - - 9,490
financial year _____ ______ ______
Balance at 31 March 2001 2,750 134,338 44,751
===== ====== ======
Company
Balance 1 April 2000 25,688
Premium on issue of shares -
Purchase of own shares (6,425)
Retained profit for the
financial year 8,746
_____
Balance 31 March 2001 28,009
=====
As permitted by section 230 of the Companies Act 1985, the profit and loss of
the Company is not presented as part of these financial statements. The
profit for the year attributable to shareholders dealt with in the financial
statements of the Company was £17,076,000 (2000 : £13,805,000).
21. Capital commitments
As at 31 March 2001, the Group had capital commitments of £27,985,000 (2000 :
£11,181,000).
22. Commitments under operating leases
As at 31 March 2001, the Group had annual commitments under non-cancellable
operating leases as set out below:
2001 2000
Land and Land and
buildings buildings
£000 £000
Operating leases which expire:
Within one year - 15
In two to five years 278 265
_____
_____
278 280
===== =====
23. Contingent liabilities
The Group through Chesterfield Properties Limited has guaranteed the payment
of current interest on a secured bank loan facility of US $27,800,000 (of
which US $27,647,000 was drawn down as at 31 March 2001) in the event of
default by Hanford Mall Partners, a limited partnership in which the Group has
a 50% interest, but is not the general partner.
24. Notes to the Consolidated Cash Flow Statement
a. Reconciliation of operating profit to net cash inflow from operating
activities
2001 2000
£000 £000
Operating profit 36,688 31,546
Depreciation charge 885 135
(Profit) loss on sale of
fixed assets (8) 74
Decrease in debtors 3,119 1,331
Increase (decrease) in creditors 5,475 (6,619)
Decrease in trading stock 24,091 44,491
Write-down of trading stock - 41
_____ _____
70,250 70,999
===== =====
b. Reconciliation of net cash flow movement to net debt
2001 2000
£000 £000
(Decrease) increase in cash
during year (42,590) 33,150
Cash outflow (inflow) from
debt and lease financing 25,834 (81,562)
Cash outflow from increase
in liquid resources 34,963 1,140
_____ ______
Change in net debt resulting
from cash flows 18,207 (47,272)
Costs of issue of non-equity
finance 885 3,349
Amortisation of issue costs (1,350) (1,315)
Net debt acquired with
subsidiaries - (182,601)
Other non-cash movements (910) 490
_____ _______
Movement in net debt during
year 16,832 (227,349)
Net debt, beginning of year (344,063) (116,714)
________ ________
Net debt, end of year (327,231) (344,063)
======= =======
c. Analysis of net debt
As at As at
1 April 31 March
2000 Cash flow Other 2001
£000 £000 £000 £000
Liquid resources 1,140 34,963 - 36,103
Cash 53,019 (42,590) - 10,429
Debt due after more than
one year (228,470) (118,429) (1,375) (348,274)
Debt due within one year (169,752) 144,263 - (25,489)
_______ _____ _____ ________
(344,063) 18,207 (1,375) (327,231)
======= ===== ===== =======
Liquid resources consist of short term investments and cash which is not
available on demand.
25. Divisional analysis and performance
Further information on the split between the Group's two divisions, QED and
Q3P, and their performance in the year is set out below.
Q3P
Including joint venture RPI
properties
Total QED Q3P
Group
Investment properties 657,734 559,199 98,535 123,339
(£000)
====== ====== ===== =====
Ungeared return (%) 15.2 16.0 8.8 10.3
(3b)
====== ====== ===== =====
Ungeared return
adjusted for
administrative expenses 14.2 15.0 6.8 8.8
(%)
====== ====== ===== =====
Geared return -
ungeared
return adjusted for
administrative expenses
and 23.0 25.5 4.7 7.7
net interest payable
(%)
====== ====== ===== =====
Financial Summary
Year ended 31 March 2001 2000 1999 1998 1997
£000 £000 £000 £000 £000
Assets employed
Properties 688,886 640,676 322,996 302,182 132,735
Cash at bank 46,513 53,019 19,869 11,240 3,235
Other assets 40,667 57,978 7,888 6,689 3,773
______ ______ ______ ______ ______
776,066 751,673 350,753 320,111 139,743
====== ====== ====== ====== ======
Financed by
Share capital 31,977 32,928 23,020 22,456 11,695
Reserves 327,198 280,879 166,942 128,387 53,202
______ ______ ______ ______ ______
Equity shareholders' funds 359,175 313,807 189,962 150,843 64,897
Borrowings 377,019 401,931 138,285 150,198 67,953
Other liabilities 37,444 31,163 19,431 16,723 6,893
Equity minority interests 2,428 4,772 3,075 2,347 -
______ ______ ______ ______ ______
776,066 751,673 350,753 320,111 139,743
====== ====== ====== ====== ======
Net asset value per share
(pence)
Undiluted 281 238 206 168 139
Diluted 276 236 202 164 136
Gearing (%) 92 111 62 92 100
===== ===== ===== ===== =====
Net rental income 40,288 34,684 22,806 20,221 8,931
===== ===== ===== ===== =====
Revenue profit 14,875 13,223 8,084 7,489 3,289
Profit on sale of properties 5,950 2,945 1,080 3,027 201
_____ _____ _____ _____ _____
Pre-tax profit 20,825 16,168 9,164 10,516 3,490
===== ===== ===== ===== =====
Profit for the financial year 17,820 12,857 7,881 8,660 2,805
Dividends (8,330) (7,244) (4,160) (4,387) (1,404)
_____ _____ _____ _____ _____
Retained profit 9,490 5,613 3,721 4,273 1,401
===== ===== ===== ===== =====
Earnings per share (pence)
Undiluted 13.7 10.5 8.7 10.3 6.6
Diluted 13.5 10.4 8.5 10.0 6.5
Dividends per share (pence) 6.5 5.5 4.5 4.0 3.0
Dividend cover (x) 2.1 1.8 1.9 2.0 2.0
===== ===== ===== ===== =====
Total return (%) 20.8 18.2 25.3 23.7 16.4
===== ===== ===== ===== =====
The total return is calculated by reference to the increase in net asset value
per share with the dividend added back divided by the opening net asset value
per share.
The financial information set out in this announcement does not constitute the
Group's statutory accounts for the years ended 31 March 2001 or 2000 but is
derived from these accounts. Statutory accounts for 2000 have been delivered
to the Registrar of Companies whereas those for 2001 will be delivered
following the Group's Annual General Meeting. The auditors have reported on
those accounts; their reports were unqualified and did not contain a statement
under section 237(2) or (3) of the Companies Act 1985.
1. Subject to approval at the Annual General Meeting, the recommended final
dividend of 4.0p per ordinary share will be paid on 26 July 2001 to
shareholders on the register on 29 June 2001. This will bring the total
dividend for the year to 6.5p, an increase of 18.2%.
2. The 2001 Annual General Meeting of Quintain Estates and Development PLC
will be held at 58 Davies Street, London W1K 5JF on 24 July 2001 at 10.30
hours.
3. The Report and Financial Statements for the year ended 31 March 2001 will
be posted to shareholders shortly. Non-shareholders may request a copy from
the Company Secretary at the registered office, 58 Davies Street, London W1K
5JF.
By order of the Board of Quintain Estates and Development PLC
Rebecca Worthington
Company Secretary
4 June 2001
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