Preliminary Results
Wynnstay Properties PLC
20 June 2000
WYNNSTAY PROPERTIES PLC ('the Company' or 'Wynnstay')
PRELIMINARY RESULTS FOR THE YEAR ENDED 25 MARCH 2000
CHAIRMAN'S STATEMENT
I am pleased to report a year of solid achievement and a set
of excellent results for your Company:
Profit before exceptional items and taxation up 45.1%
to £520,673 (£358,737)
Net asset value per share up 5.3% to 218p (207p)
Earnings per share up 16.7% to 12.6p (10.8p)
Recommended total dividend up 6.2% to 6.0p per share(5.65p)
During the year, we have continued to pursue the strategy
outlined to you in last year's report of disposing of a
number of properties with a view to reinvesting funds in new
investments where the principal emphasis will be on securing
longer term asset growth.
To this end, we disposed of our two remaining trading
properties at Colchester and Chelmsford. In my report to
you at the half year, I explained the unexpected
difficulties that we had experienced during the latter
stages of an exciting retail development on the Colchester
site. We therefore decided it was prudent to make a
substantial provision against the value of the site. In the
event, we were able subsequently to effect a sale at a price
that was substantially over the value as written down at the
interim stage. In addition, we were successful in securing
a sale at a figure well in excess of book value for our
retail premises at Chelmsford.
During the year, we also disposed of two of our three retail
properties at Swindon. These sales were achieved at auction
last December where the prices realised were slightly below
book value. Since the year end, we have instructed local
agents to market the third property. Based on offers
received, the sale price achievable appears likely to be
substantially in excess of both its current book value and
the highest offer made at auction when it failed to reach
its reserve.
These disposals reduced the Company's net gearing to 85%.
Our unutilised borrowing facilities together with available
cash deposits provide us with substantial funds for
investment in appropriate properties where, as I have
explained previously, our strategy is to invest a greater
proportion in industrial premises in central southern
England. At the half-year, I reported on our acquisition of
a modern well-let industrial property of over 11,000 square
feet at Aldershot. We have also considered a number of
other potential investments but in a very competitive market
where there is a dearth of suitable properties, none thus
far have met our criteria.
It is pleasing to note the improvement since last year in
the value of our industrial investments as determined by our
valuers, Messrs Chesterton, which rose by 5.6% whilst the
total value of the investment portfolio increased to
£13,050,000. Values were again adversely affected by the
further increases in stamp duty announced in the March
Budget.
We are progressively improving and re-orientating the
property portfolio and the Board remains determined to grow
the Company further. In my letter to shareholders dated
18th April I explained that your Board had been examining
ways in which the Company could be repositioned thereby
attracting a more favourable rating than currently applies.
I also commented that I had recently spent considerable time
in discussions with several parties and that certain of
these were continuing with the principal objective of
improving shareholder value. I will, of course, write to
you again should these reach a stage where your Board is in
a position to make a recommendation to shareholders.
Our profits for the year benefited significantly from the
lower prevailing interest rates compared with the previous
year and by continuing to pay careful attention to
containing property and administration costs, which showed
only a minimal increase of 1.4% this year compared with
1999. Although interest rates began to rise during the
final months of the year, it does not appear that they will
reach the 7.5% level last seen in 1998. Indeed, at the time
of writing, some commentators are suggesting that rates may
be approaching their peak in the current cycle. Longer
term, rates will no doubt be influenced by events in Europe
and the UK Government's attitude to joining EMU.
In summary, we have entered the present year in a stronger
position and we shall continue to pursue opportunities in
order to provide longer term benefits for all shareholders.
Despite my personal efforts to maintain an open dialogue
with Panther Securities PLC, shortly after the year end this
shareholder requisitioned an Extraordinary General Meeting,
appealing to you over the heads of your Directors to support
its own agenda including, inter alia, the liquidation of the
entire property portfolio and a fundamental change in the
nature of your Company. It was especially gratifying that
so many shareholders took the time and trouble to register
their votes and, as a result, valid proxies were cast for no
less than 87% of the shares in issue - and this figure would
have been 91.5% but for the fact that further shares, all
voted in favour of the Board, were received too late for
inclusion.
The results of the poll, as circulated to shareholders,
represented an overwhelming rejection of Panther's
proposals. My sincere hope for the future is that having
been defeated on three occasions, they will heed the wishes
of the large majority of shareholders and pursue a more
positive and constructive stance towards the Wynnstay Board.
One way of doing so would be to support the Special
Resolution we have again included in the Notice of Meeting
which, if approved, would enable the Company to purchase its
own shares. As I explained in my statement last year, this
arrangement is one now commonly adopted by many quoted
companies, including Panther and others in the property
sector, with a view to improving net asset value and
earnings per share. I know that Panther's opposition to
this resolution last year caused considerable concern
amongst a number of shareholders.
I look forward to seeing as many shareholders as possible at
the Annual General Meeting to be held on 27th July 2000 but
please note that due to refurbishment currently in progress
at The Royal Automobile Club they have cancelled all
bookings during this period. We have therefore transferred
this year's meeting to the Royal Air Force Club, 128
Piccadilly, London W1, the previous venue for our meetings
over a number of years. Shareholders might also like to
note that next year's meeting will be held on 26th July
2001.
Finally, I would like to pay tribute to our small team of
full-time staff. They have worked tremendously hard
throughout the year and continue to devote their unstinted
effort towards improving and growing the Company for your
benefit.
Philip G. H. Collins
Chairman
WYNNSTAY PROPERTIES PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT YEAR ENDED 25TH MARCH
2000
2000 1999
£ £
Gross Rental Income 1,424,475 1,341,647
Fees and Commissions 18,249 22,579
Sales of Trading Properties 590,000 -
------------ ------------
2,032,724 1,364,226
Cost of Sales of Trading 595,070 -
Properties
Property Outgoings 56,705 62,063
------------ ------------
1,380,949 1,302,163
Administration and Other Costs 383,558 372,151
------------ ------------
OPERATING PROFIT 997,391 930,012
Finance Costs (Net) 476,718 571,275
------------ ------------
PROFIT ON ORDINARY ACTIVITIES
BEFORE EXCEPTIONAL ITEMS AND 520,673 358,737
TAXATION
Exceptional Items (20,611) 40,898
------------ ------------
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 500,062 399,635
Taxation on Profit from
Ordinary Activities 102,808 58,498
------------ ------------
PROFIT AFTER TAXATION
ATTRIBUTABLE TO ORDINARY 397,254 341,137
SHAREHOLDERS
Appropriations:
Dividends per share
Interim Paid:1.80p 1999:1.70p 56,795 53,639
Final Payable:4.20p 1999:3.95p 132,521 124,633
------------ ------------
Total:6.0p 1999:5.65p 189,316 178,272
------------ ------------
RETAINED PROFIT FOR THE
FINANCIAL YEAR
Wynnstay Properties PLC 170,125 110,352
Subsidiary Companies 37,813 52,513
------------ ------------
207,938 162,865
============ ============
BASIC AND DILUTED EARNINGS PER 12.6p 10.8p
SHARE
NORMALISED EARNINGS PER SHARE 13.4p 9.6p
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
2000 1999
£ £
Profit for the Financial Year
after Taxation 397,254 341,137
Unrealised Surplus on
Revaluation of Investment 146,206 303,043
Properties
------------ ------------
Total Recognised Gains and
Losses for the Year 543,460 644,180
============ ============
NOTE OF HISTORICAL COST PROFITS
AND LOSSES
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 500,062 399,635
Realisation of Property
Revaluation Gains on Previous 125,247 687,052
Years
------------ ------------
Historical Cost Profit on
Ordinary Activities before 625,309 1,086,687
Taxation
============ ============
Historical Cost Profit for the
Year Retained after Taxation
and Dividends 333,185 849,917
============ ============
WYNNSTAY PROPERTIES PLC
CONSOLIDATED BALANCE SHEET AT 25TH MARCH 2000
2000 1999
£ £
FIXED ASSETS
Tangible Assets 13,089,548 12,348,279
Investments 52,641 51,677
---------- -----------
13,142,189 12,399,956
---------- -----------
CURRENT ASSETS
Trading Properties at
Directors' Valuation - 570,000
Debtors 351,429 112,735
Cash at Bank and in Hand 601,863 229,667
---------- -----------
953,292 912,402
CREDITORS: Amounts falling
due within one year (731,973) (558,293)
---------- -----------
NET CURRENT ASSETS 221,319 354,109
---------- -----------
TOTAL ASSETS LESS CURRENT
LIABILITIES 13,363,508 12,754,065
CREDITORS: Amounts falling
due after more than one (6,481,956) (6,226,657)
year
---------- -----------
NET ASSETS 6,881,552 6,527,408
========== ===========
CAPITAL AND RESERVES:
SHARE CAPITAL 788,817 788,817
RESERVES
Capital Redemption Reserve 204,528 204,528
Share Premium Account 1,135,249 1,135,249
Capital Reserve 151,400 151,400
Revaluation Reserve 2,362,641 2,341,682
---------- -----------
Non-Distributable Reserves 3,853,818 3,832,859
Distributable Reserves 2,238,917 1,905,732
---------- -----------
EQUITY SHAREHOLDERS' FUNDS 6,881,552 6,527,408
========== ===========
WYNNSTAY PROPERTIES PLC
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 25TH
MARCH 2000
2000 1999
£ £
CASH FLOW FROM OPERATING 1,335,337 1,009,051
ACTIVITIES
----------- -----------
RETURNS ON INVESTMENT AND
SERVICING OF FINANCE
Dividends Received 66 56
Interest Received 18,489 10,497
Interest Paid (402,783) (715,022)
----------- -----------
NET CASH (OUTFLOW) FROM RETURNS
ON INVESTMENT AND SERVICING OF (384,228) (704,469)
FINANCE
----------- -----------
Taxation Paid (27,963) (62,624)
Taxation Refunded 534 31,283
----------- -----------
(27,429) (31,341)
----------- -----------
CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT
Purchase Of Tangible Fixed Assets (787,934) -
Disposal Of Tangible Fixed Assets 163,489 844,093
Purchase Of Sinking Fund Policy (910) (910)
Premium
Costs Relating To Aborted Merger
Negotiations - (8194)
----------- -----------
NET CASH (OUTFLOW)/INFLOW FROM
INVESTING ACTIVITIES (625,355) 834,989
----------- -----------
EQUITY DIVIDENDS PAID (181,428) (167,228)
----------- -----------
NET CASH INFLOW BEFORE FINANCING 116,897 941,002
FINANCING
Drawdown of Bank Loan 764,747 -
Repayment Of Bank Loan (509,448) (632,164)
----------- -----------
INCREASE IN CASH IN THE PERIOD 372,196 308,838
=========== ===========
RECONCILIATION OF NET CASH FLOW
TO MOVEMENT IN NET DEBT
Increase In Cash In The Period 372,196 308,838
Cash (Inflow)/Outflow From
(Increase)/Decrease In Debt (255,299) 632,164
Financing
----------- -----------
Movement In Net Debt In The 116,897 941,002
Period
NET DEBT AT 25TH MARCH 1999 (5,996,990) (6,937,992)
----------- -----------
NET DEBT AT 25TH MARCH 2000 (5,880,093) (5,996,990)
=========== ===========
NOTES
1. The financial information above does not constitute
full accounts within the meaning of Section 240
Companies Act 1985 as amended (the 'Act'). Full
accounts in respect of the year ended 25th March 1999,
on which the auditors reported without qualification
and which contained no statement under Section 237(2)
or (3) of the Act, have been delivered to the Registrar
of Companies.
2. Basic and diluted earnings per share have been
calculated on profits after taxation attributable to
shareholders of £397,254 (1999: £341,137) and on
3,155,267 ordinary shares being the weighted average
number of shares in issue in both periods. Normalised
earnings per share have been calculated on profits
after taxation attributable to shareholders excluding
exceptional items, of £423,512 (1999: £303,829) on the
same weighted average 3,155,267 shares.
3. A final dividend of 4.20p (1999: 3.95p) per share is
being recommended and will be paid on 1st August 2000
to shareholders on the register at the close of
business on 14th July 2000.
4. The 2000 Annual Report & Financial Statements will be
posted to shareholders shortly and copies may be
obtained by writing to the Secretary, Wynnstay
Properties PLC, Cleary Court, 21 St. Swithin's Lane,
London EC4N 8AD.