Interim Results for six months ended 29 Sept 2024

Wynnstay Properties PLC

06 November 2024

 

 The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this information is considered to be in the public domain.

WYNNSTAY PROPERTIES PLC

("Wynnstay" or the "Company")

INTERIM RESULTS FOR THE SIX MONTHS ENDED 29 SEPTEMBER 2024

6 November 2024

CHAIRMAN'S STATEMENT

I am pleased to report that over the six-month period ended 29 September 2024 the portfolio has continued to perform well and thus deliver beneficial financial results for the Company.

Interim Financial Results

The unaudited results are summarised in the table below and should be read in conjunction with the following commentary and financial statements:

		29 September 2024	29 September 2023
Rental Income	+12.6%	£1,369,000	£1,216,000
Property Income	+12.9%	£1,378,000	£1,221,000
Operating Income	+23.8%	£1,081,000	£873,000
Income before Taxation	+25.2%	£824,000	£658,000
Earnings per share	+19.0%	21.9p	18.4p
Net Asset Value per share	+2.5%	1,142p	1,114p
Interim Dividend per share	+5.3%	10.0p	9.5p

Rental Income for the half-year increased by 12.6% compared to the same period last year to £1,369,000 (2023: £1,216,000), reflecting higher passing rents negotiated on rent reviews, new lettings and changes in the portfolio arising from acquisitions and disposals.

Operating Income increased by 23.8% to £1,081,000 (2023: £873,000) reflecting both the increased Rental Income and the net profit on the property disposals reported in the Managing Director's Review below of £52,000 (2023: £nil).   

Borrowings from Handelsbanken of £9.971 million at the end of the half-year (2023: £9.958 million) reflect our five-year loan fixed at a rate of 3.61% from December 2021. At the end of the half-year, we held cash balances of £1.435 million available for future use in the business. In addition, we have available the undrawn £5.0 million revolving credit facility with Handelsbanken.

Portfolio activity

Chris Betts, our Managing Director, describes the portfolio activity over the past six months in his Managing Director's Review below.

Dividend

In light of the financial results, the Board has decided to pay an increased interim dividend of 10.0p per share (2023: 9.5p) on 13 December 2024 to those shareholders on the register at the close of business on 15 November 2024.  The shares will become ex-dividend on 14 November 2024.

The Board appreciates the importance of rising investment income and of providing an attractive yield on the Company's shares for shareholders. The increase in the interim dividend for this half-year is 5.3% compared to the same period last year.

Outlook

Since my last statement to shareholders in the Annual Report in June 2024, the UK economic news was broadly positive for the short-term, with a return to economic growth, the rate of inflation falling below the UK Government's 2% target and a first reduction since 2020 in the Bank of England base rate to 5%. Looking forward, the economic outlook will now be largely determined by the emerging plans, policies and priorities of the new government on growth, job creation, spending, taxation and debt. At the present time their impact on the UK economy is uncertain. External events, such as the conflicts in Ukraine and the Middle East may also impact the UK economy, notably in relation to energy prices.

Against this uncertain background, the Board remains cautiously positive about the current outlook for Wynnstay's business.

We will provide further updates to shareholders in our next Annual Report, which will be published in mid-June 2025. The 2025 Annual General Meeting will take place, as usual, at the RAC Club on Wednesday 16 July 2025.

On behalf of the Board, I would like to express our appreciation to shareholders for their continued interest in and support for Wynnstay. We wish you all a Happy Christmas and a prosperous New Year in 2025.

Philip Collins

Chairman

5 November 2024

MANAGING DIRECTOR'S REVIEW

There has been further change to the composition of the Company's portfolio during the six months period ended 29 September 2024.

The property at North Street, Midhurst was sold on 6 June 2024 for £345,000 realising a gross profit of £15,000 before costs over the net book value of £330,000 as at 25 March 2024.  The Grade II Listed building is let as a café until September 2026 and was bought by a private investor.

On 12 September 2024 we completed the sale of Wynnstay House, High Street, Cosham, Hampshire also to a private investor at a price of £1,470,000. Wynnstay developed this 13,600 sq ft office building in 1991 and it is let to the government for use as a Jobcentre Plus until April 2028.  The sale realised a gross profit of £70,000 before costs over the net book value of £1,400,000 as at 25 March 2024.

The sale prices secured were pleasing and in both cases were achieved at auction. The properties were sold because following analysis, we concluded that the capital would be better deployed in other assets with greater potential for growth. Pending reinvestment, part of the proceeds has been used to repay short-term borrowings.

We continue to monitor and evaluate new investment opportunities in line with our strategy of investing in light industrial / trade counter warehouses with strong rental growth characteristics. There has been a noticeable increase in properties available to purchase since the beginning of September 2024.

As noted in my review in the Annual Report, our one vacant unit at year-end was successfully relet in April 2024.  The underlying rent receivable on this small warehouse in Aylesford is 22% above the rent paid by the previous tenant set in January 2021.  

We have successfully completed a lease renewal at Riverdale Industrial Estate in Tonbridge where the passing rent has increased by 49% over the five years since the prior rent review, which is better than anticipated at the time of purchase.

At Liphook, five leases have been subject to rent reviews. Two have now been completed at levels showing a 10% increase over a three-year period with the others expected to be settled shortly.

None of the six lease break options falling due in the first half of the year have been exercised by the tenants, further demonstrating the resilience of our income stream.

The portfolio is fully let and rent collection continues to be highly satisfactory with 100% of the rent receivable during this period having been collected. 99.5% of the rent due for the third quarter has been received to date.

Christopher Betts

Managing Director

5 November 2024

1. STATEMENT OF COMPREHENSIVE INCOME
	Unaudited Six months ended		Unaudited Six months ended		Audited Year ended
	29 September		29 September		25 March
	2024		2023		2024
	£'000		£'000		£'000
Property Income	1,378		1,221		2,599
Property Costs	(39)		(26)		(138)
Administrative Costs	(310)		(328)		(671)
Net Property Income	1,029		867		1,790
Movement in Fair Value of Investment Properties	-		6		(3)
Profit on Sale of Investment Properties	52		-		282
Operating Income	1,081		873		2,069
Investment Income	9		11		29
Finance Costs	(266)		(226)		(455)
Income before Taxation	824		658		1,643
Taxation	(233)		(162)		(287)
Income after Taxation and Total Comprehensive Income	591		496		1,356
Basic and diluted earnings per share	21.9p		18.4p		50.3p
The Company has no other items of Comprehensive Income.

2. STATEMENT OF FINANCIAL POSITION
	Unaudited		Unaudited		Audited
	29 September		29 September		25 March
	2024		2023		2024
	£'000		£'000		£'000
Non-Current Assets
Investment Properties	42,185		41,819		43,915
Investments	3		3		3
	42,188		41,822		43,918
Current Assets
Trade and Other Receivables	461		382		413
Cash and Cash Equivalents	1,435		996		397
	1,896		1,378		810
Current Liabilities
Trade and Other Payables	(646)		(698)		(828)
Income Taxes Payable	(596)		(484)		(347)
	(1,242)		(1,182)		(1,175)
Net Current Assets / (Liabilities)	654		196		(365)
Total Assets less Current Liabilities	42,842		42,018		43,553
Non-Current Liabilities
Bank Loans Payable	(9,971)		(9,958)		(10,843)
Deferred Tax Payable	(2,083)		(2,034)		(2,083)
	(12,054)		(11,992)		(12,926)
Net Assets	30,788		30,026		30,627
Capital and Reserves
Share Capital	789		789		789
Capital Redemption Reserve	205		205		205
Share Premium Account	1,135		1,135		1,135
Treasury Shares	(1,732)		(1,732)		(1,732)
Retained Earnings	30,391		29,629		30,230
	30,788		30,026		30,627
Net Asset Value pence per share	1,142p		1,114p		1,136p

3. STATEMENT OF CASH FLOWS
	Unaudited Six months ended		Unaudited Six months ended		Audited Year ended
	29 September 2024		29 September   2023		25 March 2024
	£'000		£'000		£'000
Cash flows from operating activities
Income before Taxation	824		658		1,643
Adjusted for:
Decrease in Fair Value of Investment Properties	-		-		3
Interest Receivable	(9)		(11)		(29)
Interest and Finance Costs payable	266		226		455
Amortised loan fees	18		7		15
Profit on Sale of Investment Properties	(52)		-		(282)
Changes in:
(Increase) / decrease in Trade and Other Receivables	(48)		100		69
Increase / (decrease) in Trade and Other Payables	68		30			25
Cash generated from operations	1,067		1,010		1,899
Income taxes paid	(238)		(162)		(238)
Net cash from operating activities	829		848		1,661
Cash flows from investing activities
Interest and other income received	9		11		29
Sale of Investment Properties	1,783		-		891
Purchase of Investment Properties	-		(2,499)		(5,213)
Net cash generated from investing activities	1,792		(2,488)		(4,293)
Cash flows from financing activities
Interest paid	(266)		(226)		(457)
Dividends paid	(430)		(406)		(661)
Drawdown / (repayment) of loans net of fees	(887)		-		879
Net cash used in financing activities	(1,583)		(632)		(239)
Increase / (decrease) in Cash and Cash Equivalents	1,038		(2,272)		(2,871)
Cash and Cash Equivalents at beginning of period	397		3,268		3,268
Cash and Cash Equivalents at end of period	1,435		996		397

4. STATEMENT OF CHANGES IN EQUITY
UNAUDITED SIX MONTHS ENDED 29 SEPTEMBER 2024
	Share Capital	Capital Redemption Reserve	Share Premium Account	Treasury Shares	Retained Earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 26 March 2024	789	205	1,135	(1,732)	30,230	30,627
Total Comprehensive Income for the period	-	-	-	-	591	591
Dividends	-	-	-	-	(430)	(430)
Balance at 29 September 2024	789	205	1,135	(1,732)	30,391	30,788
UNAUDITED SIX MONTHS ENDED 29 SEPTEMBER 2023
	Share Capital	Capital Redemption Reserve	Share Premium Account	Treasury Shares	Retained Earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 26 March 2023	789	205	1,135	(1,732)	29,541	29,938
Total Comprehensive Income for the period	-	-	-	-	496	496
Dividends	-	-	-	-	(406)	(406)
Balance at 29 September 2023	789	205	1,135	(1,732)	29,631	30,028
AUDITED YEAR ENDED 25 MARCH 2024
	Share Capital	Capital Redemption Reserve	Share Premium Account	Treasury Shares	Retained Earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 26 March 2023	789	205	1,135	(1,732)	28,541	29,938
Total Comprehensive Income for the year	-	-	-	-	1,356	1,356
Revaluation movement	-	-	-	-	(6)	(6)
Dividends	-	-	-	-	(661)	(661)
Balance at 25 March 2024	789	205	1,135	(1,732)	30,230	30,627

5. ACCOUNTING POLICIES

Wynnstay Properties PLC is a public limited company incorporated and domiciled in England and Wales. The principal activity of the Company is property investment, development and management. The Company's ordinary shares are traded on the AIM, part of The London Stock Exchange (ISIN: GB0009842898).  The Company's registered number is 00022473 and registered address is Riverbank House, 2 Swan Lane, London EC4R 3TT. The material accounting policies are summarised below.

Basis of preparation

These unaudited condensed interim financial statements have been prepared in accordance with UK adopted International Accounting Standards ("IAS") IAS 34 Interim Financial Reporting. They do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006.

The unaudited condensed interim financial statements should be read in conjunction with the financial statements of the Company as at and for the year ended 25 March 2024 which were prepared in accordance with IAS. The financial information for the six-month periods ended 29 September 2024 and 29 September 2023 have not been audited and the auditors have not reported on or reviewed these interim financial statements.

Comparative information

The information for the year ended 25 March 2024 has been extracted from the latest published audited financial statements.

Investment Properties

All the Company's Investment Properties are independently revalued annually and stated at fair value at 25 March. The aggregate of any resulting increases or decreases are taken to Operating Income within the Statement of Comprehensive Income.

Investment Properties are recognised as acquisitions or disposals based on the date of contract completion.

Depreciation

In accordance with IAS 40, freehold Investment Properties are included in the Statement of Financial Position at fair value and are not depreciated.

Disposal of Investments

The gains and losses on the disposal of Investment Properties and other investments are included in Operating Income in the year of disposal. Gains and losses are calculated on the net difference between the carrying value of the properties and the net proceeds from their disposal.

Property Income

Property Income is recognised on a straight-line basis over the period of the lease and is measured at the fair value of the consideration receivable. Lease deposits are held in separate designated deposit accounts and are thus not treated as assets of the Company in the financial statements. All income is derived in the United Kingdom. When there are changes to a tenancy agreement it is considered whether any lease incentives were given. Lease incentives are amortised over the lease term.

Deferred Income

Deferred Income arises from rents received in advance of the period.

Taxation

Current and deferred tax are recognised and measured in accordance with IAS 12.  The Company provides for deferred tax on investment properties by reference to the tax that would be due on the sale of the investment properties.

Trade and Other Receivables

All receivables do not carry any interest and are short term in nature.

Cash and Cash Equivalents

Cash and Cash Equivalents comprise cash at bank and on demand deposits.

Trade and Other Payables

All trade and other accounts payable are non-interest bearing.

Pensions

Pension contributions are charged to the Statement of Comprehensive Income as incurred. The pension scheme is a personal defined contribution scheme.

Borrowings

Borrowings are classified as Other Payables under Current Liabilities unless the Company has a right to defer settlement of the liability at the end of the reporting period for at least 12 months, in which case they are classified as Bank Loans Payable.

Dilapidations

Dilapidations receipts are recognised in the Statement of Comprehensive Income when the right to receive them arises. They are recorded in revenue as Other Property Income unless a property has been agreed to be sold whereby the receipt is treated as part of the proceeds of sale of the property.

Treasury Shares

Shares acquired by the Company under the authority to make market purchases of its shares approved at the General Meeting on 19 July 2022, including all the costs directly associated with the share buy-back, are included within Treasury Shares in the Statement of Financial Position.

6. PROPERTY INCOME

	Unaudited		Unaudited		Audited
	Six months ended		Six months ended		Year ended
	29 September 2024		29 September   2023		25 March 2024
	£'000		£'000		£'000
Rental Income	1,369		1,216		2,541
Other Property Income	9		5		58
	1,378		1,082		2,599

Rental Income comprises rents earned and apportioned over the lease period taking into account rent free periods and rents received during the period. Other Property Income comprises received Dilapidations and miscellaneous income arising from letting of properties.

7. DIVIDENDS

Period	Payment Date	Per share (pence)	Amount paid/proposed £'000
6 months to 29 September 2024	13 December 2024	10.0	269
6 months to 29 September 2023	15 December 2023	9.5	256
Year ended 25 March 2024	26 July 2024	16.0	430

8. EARNINGS PER SHARE AND NET ASSET VALUE PER SHARE

Basic earnings per share are calculated by dividing Income after Taxation and Total Comprehensive Income attributable to Ordinary Shareholders of £591,000 (2023: £496,000) by the weighted average number of 2,696,617 (2023: 2,696,617) Ordinary Shares in issue during the period excluding shares held in treasury. Net Asset Value per share is calculated by dividing Net Assets of £30,788,000 (2023: £30,028,000) by the number of 2,696,617 Ordinary Shares in issue at the reporting date excluding shares held in treasury. There are no options and no instruments in issue that would have the effect of diluting Earnings per Share.

For further information please contact:

Wynnstay Properties PLC

Philip Collins (Chairman)

Chris Betts (Managing Director)

Tel: [phone]

Zeus (Nominated Adviser and Broker)

Hugh Morgan, Sarah Mather (Investment Banking)

Tel: [phone]

LEI number: 2138006MASI24JYW5076

For more information on Wynnstay visit: www.wynnstayproperties.co.uk

 

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