Interim Results
Capital & Regional PLC
11 September 2001
11th September 2001
2001 INTERIM RESULTS
Capital & Regional plc, the specialist retail and leisure property company,
today announces its interim results for the six months ended 24th June 2001.
Highlights
* Fully diluted net assets per share 362p (December 2000: 361p).
* Pre-tax profit of £4.8m compares to £3.8m in the previous six months.
* Earnings per share on revenue activities increased by 56% from 3.4p in
the previous six months to 5.3p.
* Dividend per share increased by 11% to 2.5p (June 2000: 2.25p).
* Property sales realised £190m (historical cost gain of £25m).
* Capital & Regional's management approach led to its shopping centre
portfolio achieving a 2.8% increase in income and 1.4% estimated rental
growth, with footfall increasing by 7.4%.
* Continued progress on implementation of retail park strategy and related
financing to transform secondary schemes into prime destination parks.
* Following the successful first year's trading of Xscape in Milton
Keynes, this new and unique leisure and retail concept is proving its
formidable potential. Our goal is to create an exciting and innovative
international brand.
Commenting on the results, Martin Barber, Chief Executive said:
'The work undertaken by Capital & Regional over the past two years to create a
strong, focused portfolio of shopping centres, dominant retail parks and
leisure destinations, leaves the Company well positioned to benefit from an
improvement in sentiment towards these sectors. The specialist skills
developed within the Company should lead to out-performance of our assets and
attract new financial partners with whom to develop the business further.'
- ends -
For further information please contact Capital & Regional on 020 7932 8000:
Martin Barber, Chief Executive
Lynda Coral, Financial Director
Sarah Carrell, Head of Corporate Communications
A copy of this statement and the presentation will be available on our
corporate website - www.capreg.com.
CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT
RESULTS AND FINANCIAL POSITION
Fully diluted net assets per share rose to 362p from 361p in December 2000. In
the six months to 24th June 2001, profit before tax was £4.8m. Earnings per
share on revenue activities increased by 56% from 3.4p in the previous six
months to 5.3p (June 2000: 6.1p). In the six months ended 24th June 2000, the
£10.4m profit before tax reported included a £4.2m profit on investment sales
against prior year end valuation. Furthermore the effect of new accounting
requirements reduces profit in the current six month period by £1.2m compared
to last year.
The Directors have resolved to pay an interim dividend of 2.5p, an increase of
11% (June 2000: 2.25p). The dividend will be paid on 19th October 2001 to
shareholders on the register at the close of business on 21st September 2001.
Our facility for dividend reinvestment by shareholders continues.
In the first half, property sales of £190m were completed at December 2000
values realising historic cost gains of £25m. The Company's borrowings at 24th
June 2001 were £477.4m against £615.6m at December 2000. Net cash balances
were £0.9m (December 2000: £6.1m) and the Company had approximately £30m
(December 2000: £10.3m) of undrawn secured facilities.
Fully diluted gearing at 137% has been reduced by disposals from 159% at
December 2000 and reflects the cost of share buy-backs totalling £23.3m.
Since the year end, the Company has acquired a further 9.9 million ordinary
shares bringing the total purchases to date to almost 20% of the issued share
capital a year ago. Shareholder consent has been given to purchase a further
14.3% of the remaining shares, representing 11.2 million ordinary shares. The
Board will continue to review the Company's share purchases in light of the
share price and level of gearing for the long-term interests of shareholders.
The weighted average interest rate cost of total borrowings at 24th June 2001
was 6.8% compared to 7.2% at the end of 2000. Rental income as a ratio to net
interest payable including capitalised interest was maintained at 1.5 times.
STRATEGY
Capital & Regional is focused on the retail and leisure sectors within three
operational divisions.
The first is shopping centres, all of which are located in town centres and
are covered properties to provide a controlled environment. They are either
dominant in a good catchment or a good second centre in a major city
conurbation. Our energies are aimed at increasing relevant footfall, whereby
retailers may take advantage of increased sales. Typically, we acquire older
centres, which have not previously benefited from Capital & Regional's
management style and our innovative approach to marketing and promotion.
Increase in retailer trade is also a result of our reconfiguration and
renovation exercises.
One example is our recently completed Shopping City in Wood Green, North
London where, following significant works carried out last year and recently
completed, footfalls this year are running some 17% above last year. We expect
increased profits for our tenants and a positive effect on rental values.
All of our shopping centres are focused on the 'value retail' sector, and in
an uncertain economic environment, it is our belief that these centres will
prove to be the most resilient to any overall reduction in the rate of retail
spending growth.
In the first half, despite rental values increasing and interest rates
reducing, there has been a continuing negative movement in investment yields
for this type of property. Recent indications demonstrate that institutions
are again beginning to look favourably at this form of investment.
Retail parks are our second area of operation. At the year end, we reported
that our existing portfolio of 1.4m sq ft is in a transitional phase to
transform secondary schemes into prime destination parks anchored by Big Box
retailers. We expect the benefits of these initiatives to show through over
the next eighteen months.
Capital & Regional has made significant progress in the implementation of a
financing strategy for both the transformation of our existing portfolio and
for the substantial developments at Oldbury and Auchinlea. We hope to provide
further information to shareholders by the year end.
Xscape is our third business area. Our first project in Milton Keynes is
proving to be a great attraction with the longest 'real snow' indoor ski slope
in Europe. We strongly believe that there is more to this building than just a
property transaction and this retailing and leisure concept can be developed
as an international brand.
OPERATING REVIEW
Shopping Centres
The first half of the year has shown a continued increase in the level of
activity by our management team producing a net income of £37.0m, an increase
of 2.8% since the year end and 14.2% from June 2000. Estimated rental value
increased by a further 1.4% to £43.8m.
In the first six months, excluding rent reviews, there were 119 transactions
across the portfolio of 453 units. This compares to 176 transactions across
the portfolio over the whole of last year. The void level has fallen from 3.8%
at the year end to 3%.
Our total footfalls increased by 7.4% to 24 million over the corresponding
period last year, net of The Pallasades in Birmingham and Liberty 2 in
Romford, where temporary reductions due to redevelopment would distort the
trend.
The increase in footfall and rent levels, coupled with low vacancy is evidence
of the continued success of Capital & Regional's management approach.
At The Pallasades, we continue to explore re-development opportunities with
Railtrack and to actively manage the existing centre. During the first half,
we have introduced American Express, Mobile Styles and Bodycare as new
tenants.
As the major refurbishment programme at Shopping City, Wood Green completes,
the centre's popularity improves considerably with footfall up 17% to 4.75
million visitors in the last six months. The centre now offers shoppers
popular high street retailing, an in-door market plus leisure and
entertainment in the form of a 12 screen multiplex cinema and a choice of
cafes and restaurants. Since the year end, we have introduced further new
retailers including Woolworths, All Sports and a new store for fashion
retailer Blue Inc, who have also taken a unit at Selborne Walk in Walthamstow.
At the Ashley Centre in Epsom, we continue to improve the mall environment
through a re-modelling to the West Square of the centre. New retailers, Game,
McDonalds, Starbucks and Vision Express have all taken representation as well
as extending stores for Next, Hammicks, Body Shop and Cafe la Mocha. During
the first half, footfall has increased by 17% to 3.3 million shoppers.
During the first half, we have introduced a new tenant Quiz to the Howgate
Centre in Falkirk and doubled the size of the Clinton Cards unit. At Selborne
Walk, Walthamstow, we have relocated First Sport into a larger unit and let
the space to Millets. The Trinity Centre in Aberdeen remains fully let and the
success of our marketing initiatives has increased footfall by 9% to 4.4
million visitors over the first half.
At Liberty 2 in Romford, we have introduced The Post Office and local retailer
Junior. We are also finalising the planning consent for the extension of the
centre to the adjacent 'Dolphin' site, providing a mixed use development
incorporating retail, a hotel and residential. Footfall has been adversely
effected by the closure of Sainsburys, however is expected to recover when
Wilkinsons opens from the same space during this month.
The success story at The Alhambra Centre in Barnsley continues with footfall
increasing by 10.4% to 4 million visits during the first half. The
introduction of major occupiers Primark and TK Maxx has been the catalyst for
further letting interest and new tenants in the first half are The Perfume
Shop, Bodycare and Adam. An agreement has also been reached with Massarella
Catering for a new Nova Cafe offer in the mall.
Our joint venture with Stannifer to redevelop the Sauchiehall Centre in
Glasgow continues well. The construction phase is on programme with TK Maxx,
WH Smith and Superdrug established in their new store formats. Major occupier
Primark will take possession in October and hopes to commence trading from
Easter 2002.
Despite this positive activity within our shopping centre portfolio, there was
a valuation decrease in the first half of 2.8%.
Retail Parks
Our retail park strategy continues to focus on destination retail parks of
over 150,000 sq ft by either transforming our existing portfolio or through
new development. In the first half, steady progress has been made on the
implementation of this strategy on a number of our parks. There was no net
valuation movement in the six month period on the portfolio.
At Aylesbury, a detailed planning application has been submitted for a 190,000
sq ft scheme and pre-lets have been agreed for half of this floor space
including a Big Box anchor tenant. Planning consent is anticipated during the
first half of 2002.
At Beckton, detailed planning consent has now been obtained to redevelop and
refurbish this secondary park into a 190,000 sq ft destination park. The
latest letting has been achieved at £20.00 per sq ft, compared to the highest
previous rent of £18.25 per sq ft.
Completion of the new 100,000 sq ft B&Q unit at Hull is on programme for
October, when the refurbishment of the balance of the existing retail park
will commence. The latest letting of £20.00 per sq ft, compared to £8.00 per
sq ft upon acquisition in December 1999, illustrates the extremely positive
effect on rental values as a direct result of the inclusion of destination
retailers, B&Q, DFS and Comet. Plans are well advanced for the next phase
totalling a further 100,000 sq ft.
An agreement to lease has been exchanged with Matalan at the 155,000 sq ft
retail park at Stratford upon Avon, which we own in partnership with Hermes,
to extend their existing 30,000 sq ft store to 44,000 sq ft. A detailed
planning application has been submitted. Terms have also been agreed for a new
45,000 sq ft destination store.
At Auchinlea/Junction 10 in Glasgow, significant progress has been made in the
financing of this 600,000 sq ft shopping park and we anticipate announcing
details during the fourth quarter.
A detailed planning application is being prepared for submission by the year
end to commence the first phase of our park at Oldbury.
Xscape
Our first Xscape in Milton Keynes is fully let and continues to exceed our
expectations with over four million visitors since opening last year. The 16
screen cinema is in the top 25 in the country, there are numerous and
innovative retailing concepts, which one would not expect to find outside
London, together with many bars and restaurants. We are currently reviewing
marketing initiatives to significantly improve fooftall for the benefit of our
occupiers.
We have now received full planning permission for our second Xscape at
Castleford on the M62, adjacent to the Freeport factory outlet centre. To
date, 27% of the floor space is now pre-let with a further 41% in solicitor's
hands. We hope to commence construction during the early part of 2002.
Alongside our joint venture partner, Capital Shopping Centres, we have
submitted a planning application for our third Xscape at Braehead in Glasgow.
Planning zoning approval for our major Xscape at Castrop-Rauxel in the Ruhr,
Germany, is anticipated during the first half of 2002.
With this successful start and our substantial expansion plans, we now believe
the time has come to add further senior management expertise, to move the
unique Xscape concept to a new level and establish it as a standalone business
and create a successful international brand. We expect to make an announcement
in the near future.
OUTLOOK
Within our shopping centre portfolio, we have seen improved confidence from a
number of our major tenants in the last twelve months, with many reporting
increased performance as they reposition themselves in the retail market. We
strongly believe that this type of property should be viewed as an operating
business as well as a property investment, a belief increasingly being shared
by financial institutions and other investors.
Retailers continue to expand their latest formats on retail parks with new
development activity being at an all time low due to planning restrictions. We
are already seeing significant rental growth on the destination parks which we
are creating and are confident that this will continue.
Within our Xscape operation, we are seeing increased interest from leisure and
lifestyle retailers wanting to participate in this exciting and new leisure
destination. We are confident of rental and capital growth in the years to
come from existing and new opportunities to exploit this brand.
Therefore, Capital & Regional faces the future with optimism. The Company is
well positioned to take advantage of its strong portfolio and management
expertise.
Tom Chandos Martin Barber
Chairman Chief Executive
CONSOLIDATED PROFIT AND LOSS ACCOUNT
(Restated) (Restated)
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year to
24 June 24 June 25
December
Notes 2001 2000 2000
£000 £000 £000
Turnover: group rental income and 31,680 34,766 79,495
share of joint ventures' turnover
Less: share of joint ventures' (2,091) (1,866) (11,877)
turnover
Group rental income 29,589 32,900 67,618
Net property costs (4,296) (4,877) (9,687)
Net rental income 25,293 28,023 57,931
Profit on the sale of trading and 4 35 1,006 306
development properties
25,328 29,029 58,237
Administrative expenses (3,321) (3,520) (7,955)
22,007 25,509 50,282
Other operating income 581 577 502
Group operating profit 22,588 26,086 50,784
Share of operating profit / (loss) in 331 (396) 476
joint ventures and associates
22,919 25,690 51,260
Profit on sale of investment 4 370 4,196 4,092
properties and investments
Profit on ordinary activities before 23,289 29,886 55,352
interest
Income from listed investments - 659 659
Interest receivable and similar income 1,182 453 824
Interest payable and similar charges 5 (19,650) (20,577) (42,667)
Profit on ordinary activities before 4,821 10,421 14,168
taxation
Taxation 6 (290) (416) (413)
Profit on ordinary activities after 4,531 10,005 13,755
taxation
Equity minority interests 298 (135) (431)
Profit attributable to the 4,829 9,870 13,324
shareholders of the Company
Equity dividends paid and payable (1,971) (2,211) (5,070)
Profit retained in the period 2,858 7,659 8,254
Earnings per share 7 5.6p 10.0p 13.7p
Earnings per share - diluted 7 5.6p 9.7p 13.7p
Earnings per share on revenue 7 5.3p 6.1p 9.5p
activities
The 2000 comparative amounts have been restated in accordance with Urgent
Issues Task Force Abstract 28 'Operating lease incentives' (see note 1).
CONSOLIDATED BALANCE SHEET
(Restated) (Restated)
(Unaudited) (Unaudited) (Audited)
As at As at As at
24 June 24 June 25 December
Notes 2001 2000 2000
£000 £000 £000
Fixed assets
Property assets 8 721,782 976,004 916,485
Other fixed assets 14,542 14,139 14,521
736,324 990,143 931,006
Investment in joint ventures 9
Share of gross assets 86,878 9,168 68,084
Share of gross liabilities (58,996) (7,373) (38,270)
27,882 1,795 29,814
764,206 991,938 960,820
Current assets
Property assets 8 22,529 30,191 18,846
Debtors:
amounts falling due after more than 7,816 1,069 5,541
one year
amounts falling due within one year 35,179 36,176 42,272
Cash at bank and in hand 935 744 6,091
66,459 68,180 72,750
Creditors: amounts falling due within (61,280) (66,159) (129,705)
one year
Net current assets / (liabilities) 5,179 2,021 (56,955)
Total assets less current liabilities 769,385 993,959 903,865
Creditors: amounts falling due after (463,333) (590,920) (556,582)
more than one year
(including convertible unsecured loan
stock)
Provision for liabilities and charges - - (2,952)
Net assets 306,052 403,039 344,331
Capital and reserves
Called up share capital 7,886 9,827 8,874
Share premium account 161,927 161,876 161,895
Revaluation reserve 95,148 162,531 130,770
Other reserves 2,535 591 1,545
Profit and loss account 38,556 59,168 37,533
Equity shareholders' funds 306,052 393,993 340,617
Equity minority interests - 5,046 3,714
Non-equity funding by joint - 4,000 -
arrangement partners
Capital employed 306,052 403,039 344,331
Net assets per share adjusted for 10 388.1p 400.9p 383.9p
minority interests
and non-equity funding
Net assets per share adjusted for 10 361.8p 377.8p 360.6p
minority interests
and non-equity funding - diluted
The 2000 comparative amounts have been restated in accordance with Urgent Issues
Task Force Abstract 28 'Operating lease incentives' (see note 1).
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
(Restated) (Restated)
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year to
24 June 24 June 25
December
2001 2000 2000
£000 £000 £000
Share of unrealised deficit on valuation of (14,309) (4,178) (32,852)
investment properties
Share of unrealised surplus on valuation of 341 73 512
other fixed assets
Share of unrealised deficit on valuation of (653) - (561)
properties in joint ventures
Share of tax on revaluation surpluses 489 (2,130) (3,614)
realised in period
Deferred tax provided on unrealised - - (2,952)
revaluation surpluses
Exchange differences - 3 3
(14,132) (6,232) (39,464)
Profit attributable to the shareholders of 4,829 9,870 13,324
the Company
Total recognised gains and losses relating (9,303) 3,638 (26,140)
to the period
The 2000 comparative amounts have been restated in accordance with Urgent
Issues Task Force Abstract 28 'Operating lease incentives' (see note 1).
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
(Restated) (Restated)
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year to
24 June 24 June 25
December
2001 2000 2000
£000 £000 £000
Profit attributable to shareholders of the 4,829 9,870 13,324
Company
Equity dividends paid and payable (1,971) (2,211) (5,070)
Profit retained in the period 2,858 7,659 8,254
Share capital and share premium issued in 34 - 20
period
Share capital purchased and cancelled in (23,325) - (20,759)
period (including expenses)
Other recognised gains and losses relating (14,132) (6,232) (39,464)
to the period (see above)
Net (reduction) / addition to shareholders' (34,565) 1,427 (51,949)
funds
Opening shareholders' funds 340,617 392,566 392,566
Closing shareholders' funds 306,052 393,993 340,617
The 2000 comparative amounts have been restated in accordance with Urgent
Issues Task Force Abstract 28 'Operating lease incentives' (see note 1).
SUMMARY CASH FLOW STATEMENT
(Restated) (Restated)
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year to
24 June 24 June 25
December
Notes 2001 2000 2000
£000 £000 £000
Net cash inflow from operating 11 20,327 29,315 49,514
activities
Dividends received from joint ventures 400 - 180
Dividends received from associates - 5 5
Returns on investments and servicing (17,722) (20,563) (42,960)
of finance
3,005 8,757 6,739
Taxation (2,501) - (622)
Net operating cash flow 504 8,757 6,117
Capital expenditure and financial 171,758 (4,710) (8,160)
investment
172,262 4,047 (2,043)
Acquisitions and disposals (2,882) - (18,716)
169,380 4,047 (20,759)
Equity dividends paid (2,884) (2,948) (5,134)
Cash in / (out) flow before financing 166,496 1,099 (25,893)
Financing:
Issue of ordinary share capital 34 - 20
Purchase of ordinary share capital (33,491) - (10,593)
Cash (out) / in flow from debt (138,195) (7,858) 35,169
financing
Decrease in cash in the period (5,156) (6,759) (1,297)
The 2000 comparative amounts have been restated in accordance with Urgent
Issues Task Force Abstract 28 'Operating lease incentives' (see note 1).
Reconciliation of net cash flow to movement (Unaudited) (Unaudited) (Audited)
in net debt 6 months to 6 months to Year to
24 June 24 June 25
December
2001 2000 2000
£000 £000 £000
Decrease in cash in the period (5,156) (6,759) (1,297)
Cash out / (in) flow from debt financing 138,195 7,858 (35,169)
Change in net debt resulting from cash flows 133,039 1,099 (36,466)
Reclassification of debt in joint - - 22,568
arrangement
Net debt at beginning of period (609,501) (595,603) (595,603)
Net debt at end of period (476,462) (594,504) (609,501)
Analysis of net debt (Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year to
24 June 24 June 25
December
2001 2000 2000
£000 £000 £000
Cash in hand and at bank 935 744 6,091
Bank overdrafts - (115) -
935 629 6,091
Debt due within one year (13,543) (3,340) (58,351)
Debt due after one year (463,854) (591,793) (557,241)
(476,462) (594,504) (609,501)
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies
The financial information included in the Interim Report comprises
consolidated profit and loss account, balance sheet, statement of total
recognised gains and losses, reconciliation of movement in shareholders'
funds and summary cash flow statement. These have been prepared in accordance
with the normal accounting policies of the Group, and do not constitute
statutory accounts.
The Group has adopted Urgent Issues Task Force Abstract 28 (UITF 28),
'Operating lease incentives', in these financial statements. In accordance
with the requirements of UITF 28, the previous periods' results have been
restated to reflect its application to all affected lease agreements starting
on or after 26 December 1999. The effect of this restatement together with
the impact on the current periods' results are summarised below:
6 months to 6 months to Year to
24 June 24 June 25 December 2000
2001 2000 £000
£000 £000
(Decrease) / increase in (594) 409 914
group rental income
Reduction in share of (187) - (105)
operating profit of joint
ventures
Increase in taxation charge (26) (143) (472)
Increase in equity minority (7) (20) (40)
interests in profit for the
period
(Decrease) / increase in (814) 246 297
profit for the period
attributable to
shareholders of the Company
Reduction in unrealised 184 - 253
deficit on revaluation of
investment properties in
joint ventures
Reduction in unrealised 685 69 509
deficit on revaluation of
investment properties
Increase in shareholders' 55 315 1,059
fund in the period
Increase / (decrease) in 82 (473) (5,196)
carrying value of
investment properties
(Decrease) / increase in (3) - 148
investment in joint ventures
(Decrease) / increase in (225) 1,069 5,541
prepayments and accrued
income due after more than
one year
Increase in prepayments and 440 328 1,572
accrued income due within
one year
Increase in corporation tax (26) (143) (472)
creditor
Increase in accruals and (206) (446) (494)
deferred income
Increase in equity minority (7) (20) (40)
interests
Increase in net assets 55 315 1,059
attributable to the
shareholders' in the period
2. Financial information and presentation
The financial information for the year to 25 December 2000 does not
constitute statutory accounts within the meaning of Section 240 of the
Companies Act 1985. It is extracted from the statutory accounts for that
year, on which the auditors Deloitte & Touche gave an unqualified report
under Section 236 of the Companies Act 1985 which did not contain a statement
under Section 237(2) or Section 237(4) of the Companies Act 1985. Statutory
accounts for the year ended 25 December 2000 have been delivered to the
Registrar of Companies. The financial information for the six months to 24
June 2001 is unaudited and has not been reviewed by the Group's auditors.
3. Segmental analysis
Turnover, profit on ordinary activities before taxation and net assets are
attributable to property investment, development and management. Turnover,
profit on ordinary activities before taxation and operations arise in the UK
except £nil (2000: £659,000) of income from listed investments which
originates from the US. Net assets adjusted for minority interests originate
in the UK.
4. Asset sales
Fixed assets Current assets
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
6 months 6 month ended 6 months ended 6 months
ended 24 June 2000 24 June 2001 ended
24 June £000 £000 24 June
2001 2000
£000 £000
Net sale 189,994 26,288 423 12,178
proceeds
Cost of (164,842) (4,006) (388) (11,172)
sales
Historical 25,152 22,282 35 1,006
cost
profit
Revaluation (24,782) (18,175) - -
surplus
370 4,107 35 1,006
Share of - 89 - -
joint
ventures
Profit 370 4,196 35 1,006
recognised
on sale
of assets
5. Interest payable and similar charges
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year to
24 June 24 June 25 December
2001 2000 2000
£000 £000 £000
Bank loans and overdrafts wholly 17,669 21,540 42,823
repayable within five years
Other loans 863 868 1,663
18,532 22,408 44,486
Capitalised in period (112) (1,947) (2,678)
18,420 20,461 41,808
Share of joint ventures interest 1,230 116 859
payable
19,650 20,577 42,667
6. Taxation
The taxation charge for the period has been estimated from the expected
taxable profits of the Group after taking account of losses brought forward
and capital allowances available.
7. Earnings per share
Earnings per share have been calculated on a weighted average of 85,746,495
Ordinary shares of 10p each in issue during the period (six months to 24 June
2000: 98,265,697, year to 25 December 2000: 97,042,630) and have been based
on profit on ordinary activities after taxation and minority interests of
£4,829,000 (six months to 24 June 2000: £9,870,000, year to 25 December 2000:
£13,324,000).
Diluted earnings per share have been calculated after allowing for the
exercise of share options which have met the required exercise conditions and
the full conversion of the Convertible Unsecured Loan Stock, if the effect on
earnings per share is dilutive. The weighted average number of Ordinary
shares of 10p each is 86,065,241 (six months to 24 June 2000: 110,943,812,
year to 25 December 2000: 97,256,996) and the relevant earnings are
£4,829,000 (six months to 24 June 2000: £10,738,000 year to 25 December 2000:
£13,324,000).
Earnings per share on revenue activities exclude the profit on the sale of
investment properties and investments, and associated tax charge and minority
interests thereon, of £259,000 (six months to 24 June 2000: £3,924,000, year
to 25 December 2000: £4,101,000).
8. Property assets
Fixed Current Total
property property property
assets assets assets
£000 £000 £000
Cost or valuation
As at 25 December 2000 921,681 18,846 940,527
Less: UITF 28 adjustment (5,196) - (5,196)
As at 25 December 2000 - restated 916,485 18,846 935,331
Refurbishment and development expenditure 9,526 6,301 15,827
Amortisation of short leasehold (86) - (86)
properties
Disposals (189,503) (2,618) (192,121)
Revaluation (14,640) - (14,640)
As at 24 June 2001 721,782 22,529 744,311
Fixed property assets at 24 June 2001
as per balance sheet 721,782
UITF 28 adjustment at 24 June 2001
included in current assets 4,733
Total fixed property assets
as valued below 726,515
The fixed property assets were
valued at 24 June 2001, as follows: £000
DTZ Debenham
Tie Leung Open Market Value 684,060
Insignia Richard
Ellis Limited Open Market Value 33,170
Directors Open Market Value 220
Directors Net sale proceeds of properties 9,065
sold after 24 June 2001
726,515
Valuations are at open market value as defined in the Appraisal and Valuation
Manual of The Royal Institution of Chartered Surveyors.
9. Joint Ventures
The Group's investment in joint ventures is as follows:
Capital Xscape Sauchiehall Easter Others Total
Hill (Milton Centre Holdings
Partnership Keynes) Limited Limited
Partnership
£000 £000 £000 £000 £000 £000
Group
share of:
Investment 17,650 37,387 18,112 2,245 - 75,394
properties
Trading - - - 4,450 686 5,136
properties
Other 581 3,253 365 1,928 221 6,348
current
assets
Gross 18,231 40,640 18,477 8,623 907 86,878
assets
Bank loans - (23,400) (15,150) (3,793) (500) (42,843)
Other - - (2,500) (2,469) - (4,969)
loans
Other (372) (8,379) (713) (1,665) (55) (11,184)
current
liabilities
Gross (372) (31,779) (18,363) (7,927) (555) (58,996)
liabilities
Investment 17,859 8,861 114 696 352 27,882
in joint
venture
Effective 50% 50% 50% 50% 50%
Group
share
10. Net assets per share
Net assets per share have been calculated on 78,855,975 Ordinary shares of
10p each (24 June 2000: 98,265,697, 25 December 2000: 88,734,623) in issue at
24 June 2001 and have been based on net assets attributable to shareholders
of £306,052,000 (24 June 2000: £393,993,000, 25 December 2000: £340,617,000).
Diluted net assets per share assumes that all of the Convertible Unsecured
Loan Stock ('CULS') had been converted at the balance sheet date. Diluted net
assets per share have been calculated on 91,268,146 Ordinary shares of 10p
each and have been based on adjusted net assets attributable to shareholders
of £330,230,000 (24 June 2000: £418,079,000, 25 December 2000: £364,749,000)
by adding the £24,178,000 (24 June 2000: £24,086,000, 25 December 2000;
£24,132,000) balance sheet value of the CULS.
11. Reconciliation of net cash inflow from operating activities
(Restated) (Restated)
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year to
24 June 24 June 25 December
2001 2000 2000
£000 £000 £000
Group operating profit 22,588 26,086 50,784
Profit on sale of trading and (35) (1,006) (306)
development properties
22,553 25,080 50,478
Depreciation of other fixed assets 218 176 567
Amortisation of short leasehold 86 86 173
properties
Amortisation of tenant incentives 1,100 175 914
Amortisation of goodwill on - 72 72
purchase of minority interests
Profit on disposal of fixed assets (31) (14) (52)
Decrease / (increase) in trade 7,567 361 (12,708)
debtors, other debtors and
prepayments
(Decrease) / increase in trade (11,166) 3,379 10,070
creditors, other creditors,
taxation and social security and
accruals
Net cash flow from operating 20,327 29,315 49,514
activities
12. Debt valuation
The table below show the market value of fixed rate debt instruments, and
reflects the difference between the interest yield curve as at 24 June 2001
and the rates historically committed; namely the fair value adjustment.
(Unaudited) (Unaudited) (Audited)
As at As at As at
24 June 24 June 25 December
2001 2000 2000
£000 £000 £000
Book value and notional principal 198,642 261,891 247,880
Fair value (200,854) (261,390) (251,368)
Fair value adjustment (2,212) 501 (3,488)
Minority interests - 41 81
Fair value adjustment (2,212) 542 (3,407)
attributable to the Group
Net of tax at 30% (1,548) 379 (2,385)
Effect on fully diluted net asset (1.7)p 0.3p (2.4)p
per share adjusted for minority
interests and non-equity funding
13. Copies of the Interim Report
Copies of the Interim Report are available from the Company's registered
office at 10 Lower Grosvenor Place, London, SW1W 0EN.
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