Interim Results

Wynnstay Properties PLC 23 November 2004 23 NOVEMBER 2004 Wynnstay Properties PLC Interim Results for the six months ended 29 September 2004 Chairman's Statement I am pleased to report interim results which reflect further significant progress by your Company and, accordingly, the Board has again declared an increase in the interim dividend. The results may be summarised as follows:- 2004 2003 - Profit on Ordinary Activities before taxation: - 1.2% £318,000 £322,000 - Profit after taxation: - 0.9% £223,000 £225,000 - Interim dividend per share: + 4.5% 2.3p 2.2p - Net asset value per share: + 11.3% 336p 302p The portfolio remained fully let and income producing throughout the period with the exception of a short void at one property. Rental income rose to £828,000 (2003: £748,000), despite the disposal of our property in Sheffield in March 2004, reflecting the inclusion of the Oakcroft Business Centre at Chessington acquired in November 2003, together with the benefit of rent reviews on a number of properties within the portfolio. As a result we expect satisfactory growth in rental income for the full year. The increase in property outgoings reflects a provision for repairs at one property which will become vacant shortly. Net finance costs rose to £207,000 (2003: £171,000) reflecting increased average borrowings as a result of the recent additions to the portfolio and higher interest rates compared with the same period last year. Retained profits of £150,000 resulted in net asset value increasing to 336p per share compared with 302p per share at the same time last year. In accordance with our normal practice, the portfolio has not been revalued at the half-year stage but a full revaluation will be carried out at 25th March 2005. There have been two significant developments in the portfolio since I last reported to shareholders in the summer. Firstly, on 16th August 2004, we announced the purchase of a self-contained industrial investment at Basingstoke for a cash consideration of £1.5 million. This freehold property comprises three adjoining industrial/warehouse units, totalling 22,495 square feet. It is fully let on leases expiring between January 2005 and May 2011, currently producing an income of £128,150 per annum, equivalent to a yield of 8% per annum, after taking account of acquisition costs. This property is located approximately one mile from Basingstoke town centre and is adjacent to Chineham Business Park, which has over 750,000 square feet of high quality business space, occupied predominantly by blue chip and high-tech companies. It is also well placed for convenient access to Basingstoke's other industrial estates and to the A33 trunk road and the M3 motorway. The acquisition, which was funded from our existing loan facilities, was completed on 31st August 2004. We have subsequently agreed provisional terms for a 15 year lease with a new tenant for the unit which becomes vacant next January. The Board believes this acquisition marks a further important stage in the continuing enhancement of Wynnstay's portfolio. Secondly, shortly after the end of the half-year, we announced that contracts had been exchanged for the sale of our freehold office and retail property interests in York Road, Bognor Regis, West Sussex for a cash consideration of £1.475 million. This compares with their combined valuation of £1.025 million at 25th March 2004, resulting in a surplus of £450,000 before costs and taxation. Completion is scheduled to take place on 25th February 2005. This transaction is not, therefore, reflected in the results now being reported, but will be included in the full year's results to be announced in June 2005. As a result of the increased borrowings relating to the Basingstoke acquisition, net gearing rose to 71% (2003: 56%) but the Company's strong positive cash flow, coupled with growth in net asset value over recent years, continue to provide us with the opportunity to finance and make further selective acquisitions, where we believe these will further enhance shareholder value in the medium to longer term. We will also continue to keep under review opportunities to dispose of properties in the portfolio where, as in the case of the Bognor Regis properties, future growth in value or income appears limited and a significant profit can be realised, thereby providing additional funds for new investments. When I reported at this time last year, I noted that the interest rate cycle had turned, with rates having started to rise from their 48 year historic lows. Over the past year, the Bank of England's base rate has risen in five steps from 3.5% to 4.75% per annum. Some commentators continue to forecast one or two further increases in interest rates possibly next month or early next year; whilst others maintain that economic uncertainties make it more likely that the next move may be downwards. However, more than half Wynnstay's borrowings are at fixed rates, and we also fixed the rate of the variable portion of our loan facilities until January next year. Thus, whichever forecast on interest rates proves to be correct, any changes will not have a material impact on our results for the full year. In the light of these results, the Board has decided to increase the interim dividend by 4.5% from 2.2p per share to 2.3p per share. This will be paid on 16th December 2004 to those shareholders on the register on 3rd December 2004. The Alternative Investment Market, on which Wynnstay's shares are quoted, continues to be very active, with a large number of new companies coming to the market and greater interest by investors in smaller quoted companies. It is pleasing to note that the Company's share price continues to reflect a narrower discount to underlying net asset value than in the past and that more new shareholders have been appearing on the register. Philip G.H. Collins Chairman 23 November 2004 UNAUDITED CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE SIX MONTHS ENDED 29 SEPTEMBER 2004 Six months ended Year ended 29 September 25 March 2004 2003 2004 (Unaudited) (Audited) £'000 £'000 £'000 Turnover Gross Rental Income 828 748 1,555 Fees and Commissions 9 10 20 -------------- -------------- -------------- 837 758 1,575 Property Outgoings (51) (31) (82) -------------- -------------- -------------- 786 727 1,493 Administration and Other Costs (261) (234) (474) -------------- -------------- -------------- Operating Profit 525 493 1,019 Profit on Disposal of Investment Properties - - 81 -------------- -------------- -------------- 525 493 1,100 Finance Costs (Net) (207) (171) (368) -------------- -------------- -------------- Profit on Ordinary Activities before Taxation 318 322 732 Taxation (95) (97) (198) -------------- -------------- -------------- Profit on Ordinary Activities after Taxation 223 225 534 Interim Dividend 2004: 2.3p per share, 2003: 2.2p per share (73) (69) Total Dividend 2003-2004: 7.6p per share (240) -------------- -------------- -------------- Profit Retained 150 156 294 -------------- -------------- -------------- Basic Earnings per share (see note below) 7.1p 7.1p 16.9p Note Basic earnings per share have been calculated on profits after taxation attributable to ordinary shareholders of £223,000 (2003: £225,000) and on 3,155,267 ordinary shares, being the weighted average number in issue during both periods. UNAUDITED CONSOLIDATED BALANCE SHEET AS AT 29 SEPTEMBER 2004 29 September 29 September 25 March 2004 2003 2004 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Fixed Assets Tangible Assets 19,037 15,514 17,470 Investments 1 1 1 --------------- --------------- --------------- 19,038 15,515 17,471 Current Assets Debtors 81 86 60 Cash at Bank and in Hand 217 330 515 --------------- --------------- --------------- 298 416 575 Creditors: Amounts falling due within one year (785) (613) (837) --------------- --------------- --------------- Net Current Liabilities (487) (197) (262) --------------- --------------- --------------- Total Assets Less Current Liabilities 18,551 15,318 17,209 Creditors: Amounts falling due after more than one year (7,792) (5,700) (6,600) --------------- --------------- --------------- 10,759 9,618 10,609 Provision for Liabilities and Charges (160) (86) (160) --------------- --------------- --------------- Net Assets 10,599 9,532 10,449 --------------- --------------- --------------- Capital and Reserves Share Capital 789 789 789 Capital Redemption Reserve 205 205 205 Share Premium Account 1,135 1,135 1,135 Capital Reserve 151 151 151 Revaluation Reserve 4,505 3,797 4,505 Distributable Reserves 3,814 3,455 3,664 --------------- --------------- --------------- Equity Shareholders' Funds 10,599 9,532 10,449 --------------- --------------- --------------- UNAUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 29 SEPTEMBER 2004 Six months ended Year ended 29 September 25 March 2004 2003 2004 (Unaudited) (Audited) £'000 £'000 £'000 Cash Flow from Operating Activities (Note 1) 507 422 1,073 -------------- -------------- -------------- Returns on Investment and Servicing of Finance Interest Received 6 4 10 Interest Paid (209) (170) (306) -------------- -------------- -------------- Net Cash (Outflow) from Returns on Investment and Servicing of Finance (203) (166) (296) -------------- -------------- -------------- Taxation Paid (54) (52) (118) -------------- -------------- -------------- Capital Expenditure and Financial Investment Purchase of Tangible Fixed Assets (1,570) - (2,006) Disposal of Tangible Fixed Assets - - 905 -------------- -------------- -------------- Net Cash (Outflow) from Investing Activities (1,570) - (1,101) -------------- -------------- -------------- Equity Dividends Paid (170) (161) (230) -------------- -------------- -------------- Net Cash (Outflow)/Inflow before Financing (1,490) 43 (672) Financing Drawdown of Bank Loan 1,192 - 1,800 Repayment of Bank Loan - - (900) -------------- -------------- -------------- (Decrease)/Increase in Cash in the Period (298) 43 228 -------------- -------------- -------------- Reconciliation of Net Cash Flow to Movement in Net Debt (Decrease)/Increase in Cash in the Period (298) 43 228 Cash (Outflow) from Debt Financing (1,192) - (900) -------------- -------------- -------------- Movement in Net Debt in the Period (1,490) 43 (672) Net Debt at 25 March 2004 (6,085) (5,413) (5,413) -------------- -------------- -------------- Net Debt at 29 September 2004 (Note 2) (7,575) (5,370) (6,085) -------------- -------------- -------------- Notes To Cash Flow Statement 1. Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities Six Months ended Year ended 29 September 25 March 2004 2003 2004 £'000 £'000 £'000 Operating Profit 525 493 1,019 Depreciation and Amortisation 3 3 7 (Increase)/Decrease in Debtors (22) (16) 10 (Decrease)/Increase in Creditors 1 (58) 37 ------------ ------------ ------------ Net Cash Inflow from Operating Activities 507 422 1,073 ------------ ------------ ------------ 2. Analysis of Net Debt 29 September Cash 25 March 2004 Movement 2004 £'000 £'000 £'000 Cash at Bank and in Hand 217 (298) 515 Debt due after more than one year (7,792) (1,192) (6,600) ------------ ------------ ------------ Net Debt (7,575) (1,490) (6,085) ------------ ------------ ------------ Notes 1. The figures in these statements do not constitute statutory accounts; those for the year ended 25 March 2004 are extracted from the Group Accounts which have been filed with the Registrar of Companies and which received an unqualified report from the Auditors and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985 as amended. 2. The interim dividend of 2.3 p per share will be paid on 16 December 2004 to those Shareholders on the register at 3 December 2004. 3. This interim report is being posted to all Shareholders and will be available on application to the Company's registered office at Cleary Court, 21 St. Swithin's Lane, London EC4N 8AD. This information is provided by RNS The company news service from the London Stock Exchange

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