Final Results

Cardiff Property PLC 30 November 2006 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES FOR RELEASE 7.00 AM 30 NOVEMBER 2006 THE CARDIFF PROPERTY PLC (The group, including Campmoss, specialises in property investment and development in the Thames Valley. The portfolio, valued in excess of Â£34m, is primarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire.) PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2006 Highlights: 2006 2005 Revenue Â£'000 2,442 1,672 Property sales Â£'000 1,927 1,113 Net assets per share pence 1,123 990 Profit before tax Â£'000 2,549 3,201 Earnings per share pence 137.6 193.6 Dividend per share - paid and proposed pence 10.05 9.0 Gearing % nil nil Richard Wollenberg, Chairman, commented: 'The group has reported another successful year. The air of optimism regarding the Thames Valley commercial property market remains evident. Certainly new letting enquires have improved and the fundamentals for rental growth remain positive. The real question is whether these will be translated into completed transactions which, if evident, will encourage new development to take place.' For further information: The Cardiff Property plc Richard Wollenberg 01784 437444 Arbuthnot Securities Richard Wood 020 7012 2000 THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY AND ITS SUBSIDIARIES (The group, including Campmoss, specialises in property investment and development in the Thames Valley. The portfolio, valued in excess of Â£34m, is primarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire.) PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2006 Chairman's statement Dear shareholder During the early part of the year, an increase in tenant demand, reducing supply of new Grade A office space and positive attitude towards rental growth sustained optimism within the western M4 corridor and surrounding areas. This encouraged investment deals to be transacted, as evidenced by our sales last year, yet I have to report that whilst the fundamentals remain positive, the market still awaits the anticipated upturn in take up of new office space needed to sustain speculative development and rental growth. Within the Thames Valley some benchmark lettings have been completed during the last six months and the gradual take up of second hand stock is evident but there is still an imbalance between supply and demand, although locations such as Maidenhead are experiencing an upturn in rental levels where the availability of new high grade office space is at a low point. The investment market remains firm reflecting the volume of money available to both UK and overseas institutions to acquire commercial property. Investor confidence in the expectation of rental growth continues to support current yields. New grade A office buildings let to leading covenants on medium term leases remain highly sought after thus maintaining the downward pressure on yields. Twelve months ago investors were focusing their attention towards commercial property with 10 to 15 years of the tenancy term remaining, however there is now growing interest in those buildings where the lease term is less than 5 years. A number of leading economists have recently voiced their concern over the future performance of the commercial property market, arguing that the relative returns currently available on equities or bonds would appear to offer a better option. The expectation of rental growth, however, continues to underline investors' confidence. The likelihood of higher interest rates remains a concern although counterbalanced by inflationary pressures continuing to exceed targets. Activity within the commercial property market may well slow down in the short term which will place greater emphasis on the quality of buildings, their location, availability of general facilities and the local labour market and, as always, transport access and car parking facilities, despite the efforts of local authorities to reduce the latter. In Surrey and Berkshire residential and land values have seen a small increase over the year although the actual number of transactions have reduced. Planning permissions continue to be difficult to achieve and therefore restrict the availability of new high quality stock. Many factors affect the level of supply and more recently the increasing overall cost of moving has become prominent in individuals' decisions to move home. Residential values are unlikely to suffer a major fall as suggested in some quarters. Financial The consolidated results for the year to 30 September 2006 are the first full year results to be prepared by the group under applicable International Financial Reporting Standards ('IFRS' as adopted by the EU). The key changes resulting from the introduction of IFRS are set out in the report which is available in full from the company's website at www.cardiff-property.com. The principal one affecting the group is the inclusion in profit before tax of any surplus on revaluation of investment properties during the year, less a related charge for deferred tax which was previously shown by way of a note to the accounts. For the year to 30 September 2006, under IFRS, profit before tax amounted to Â£2.55m (2005: Â£3.20m) which included an after tax contribution from Campmoss Property Company Limited, our 47.62% jointly controlled entity, of Â£0.96m (2005: Â£2.12m). Revenue totalled Â£2.44m (2005: Â£1.67m) representing gross rental income of Â£0.52m (2005: Â£0.56m) and sales of development property of Â£1.92m (2005: Â£1.11m). Shareholders should note that under UK GAAP, results for Campmoss were identified under all the component parts of the income statement (formerly the profit and loss account). Under IFRS, however, profit before tax includes a single line item 'share of jointly controlled entity'. The net effect is the same but the presentation is significantly different. Profit after tax attributable to shareholders for the financial year amounted to Â£2.43m (2005: Â£3.43m). Earnings per share was 137.6p (2005: 193.6p). The company's commercial and residential portfolio valued annually by Cushman & Wakefield and Aitchison Rafferty respectively totalled Â£5.73m. The portfolio excludes property under development or refurbishment and held for resale which is held as stock or work in progress in the balance sheet at the lower of cost or market value. At the year end these included 2 houses at Rusham Road, Egham and The Windsor Business Centre, Windsor. Total assets of the group at the year end were Â£20.71m (2005: Â£19.13m) including the company's share of the net assets of Campmoss of Â£7.96m (2005: Â£7.00m). Net assets under IFRS at 30 September 2006, including the share of Campmoss, totalled Â£19.56m (2005: Â£17.58m) equivalent to 1,123p per share (2005: 990p), an increase of 13.43% over the year. The total property portfolio under management at the year end, including the Campmoss portfolio was valued at Â£34.46m (2005: Â£33.93m). The group has renewed its bank borrowing facilities of up to Â£3.27m which were not utilised during the year. Cash balances are placed on short term deposit and together with bank borrowing facilities remain available to increase the group's property portfolio or pursue other suitable acquisitions. During the year the company purchased for cancellation 34,000 ordinary shares for a total consideration of Â£335,704. The directors are proposing the annual renewal of their authority to acquire shares and to renew the Rule 9 authority both of which will be included in the resolutions to be placed before shareholders at the Annual General Meeting and Extraordinary General Meeting respectively to be held on 11 January 2007. A copy of the Rule 9 waiver document is also available from the company's website. Dividend The directors recommend a final dividend of 7.3p per share (2005: 6.5p), making a total dividend paid and proposed for the year of 10.05p an increase of 11.7%. The final dividend will be payable on 8 February 2007 to shareholders on the register on 19 January 2007. Commercial portfolio The investment portfolio continues to be primarily located in the M4 western corridor and close to Heathrow Airport. At Egham, two separate buildings known as The White House and Heritage Court, which include office and retail units, are all let on medium term leases. The letting of a vacant retail unit at Heritage Court was completed during the year. At The Maidenhead Enterprise Centre, building works were completed early in the year, and a number of lettings are under negotiation. This property comprises 5 individual business units totalling 14,000 sq ft which have been rebuilt to a high standard. At The Windsor Business Centre, 4 similar type business units are let on medium term leases. One unit is vacant and currently undergoing refurbishment. The unit is being marketed either for reletting or freehold sale. At Cowbridge Road, Cardiff we are investigating the possibility of submitting a residential planning permission. The 14,650 sq ft property is let on a medium term lease to The Royal Mail as a sorting centre. The year end valuation for the investment properties excluding stock showed an increase of 7.3% over the year. Residential At Egham the company retains 2 houses, 1 of which is let on a short term lease, the other is currently being refurbished for reletting. The sale of Ashleigh House, Virginia Water was completed during the first half of the year and achieved a figure of Â£1.72m. An ongoing planning interest has been retained over adjacent land which was sold with the property. The freehold sale of a property in Egham was completed after the year end. Campmoss Property As reported at the half year, freehold property at Market Street, Bracknell, Tangley Place, Worplesdon, Highway House, Maidenhead and Datchet Meadows (formerly Jubilee Court), Datchet, are all subject to planning applications. In the case of Datchet Meadows planning permission for 24 residential units was granted last year and a revised application for 35 units has been lodged. In the event this application is unsuccessful the Campmoss directors' current intention is to commence construction of the smaller scheme in the New Year. At Highway House, Maidenhead post the year end, the local authority indicated their intention to grant planning permission for demolition of the existing 10,000 sq ft office building to be replaced with a new 40,000 sq ft office scheme, subject to agreeing certain minor details. Ongoing discussions are taking place with a view to obtaining full planning permission. At Clivemont House, Maidenhead plans to demolish the existing 30,000 sq ft building and replace with a new 40,000 sq ft office building are currently being prepared. The building is currently let to 3 tenants on short term leases and a decision will be made next year as to a development timetable. At the year end the portfolio, which includes the above properties plus investment properties in Woking, Bracknell and Burnham, has been valued by the directors, taking account of external advice where available and assessed at a current market value of Â£27.53m (2005: Â£25.71). The rental income from over 20 individual tenants totalled Â£1.95m (2005: Â£2.20m). The reduction in rental income results from sales of property. At the year end Campmoss had net borrowings of Â£7.00m (2005: Â£7.07m). Gearing was 40% (2005: 47%). Quoted investments The group has retained its small equity portfolio which includes Tribal Group Plc, ImmuPharma Plc, Wadharma Investments Plc and General Industries Plc. During the year the holding of IFX Group was sold following a successful cash takeover offer. I remain a director of Wadharma and General Industries, quoted on AIM and Plus Markets respectively. Management and staff The group has reported another successful year and on behalf of shareholders I wish to thank my fellow board members, joint venture partners and our small management team based in Egham for their support and achievements during the year. Shareholders telephone dealing service A number of shareholders have taken advantage of the company's low commission share dealing facility provided by our registrars, Computershare Investor Services Plc, and therefore these services have been renewed. The company is continuing to offer its free share sale service to those shareholders who wish to dispose of holdings of 500 shares or less. Shareholders should be aware that this service should not be construed as an encouragement to buy or sell the company's shares. If in any doubt shareholders should contact their own financial advisors. Computershare can be contacted on 0870 703 0084. Outlook The air of optimism regarding the Thames Valley commercial property market remains evident. Certainly new letting enquires have improved and the fundamentals for rental growth remain positive. The real question is whether these will be translated into completed transactions which, if evident, will encourage new development to take place. The group's portfolio of investment property and development schemes all located in the important M4 corridor is well placed to benefit from further recovery. Planning permissions and new lettings are important to the future growth of the group and, although the planning process is a long and arduous process, I remain confident that progress is being made. J Richard Wollenberg Chairman 29 November 2006 Consolidated Income Statement FOR THE YEAR ENDED 30 SEPTEMBER 2006 2006 2005 Â£'000 Â£'000 Revenue 2,442 1,672 Cost of sales (1,467) (722) ______ ______ Gross profit 975 950 Administrative expenses (493) (573) Other operating income 337 282 ______ ______ Operating profit before gains on investment properties and other investments 819 659 Profit on sale of investment property 139 - Profit on sale of other investments 34 1 Surplus on revaluation of investment properties 391 225 ______ ______ Operating profit 1,383 885 Financing: Interest receivable and similar income 203 197 Interest payable - (5) Share of results of jointly controlled entity 963 2,124 ______ ______ Profit before taxation 2,549 3,201 Taxation (121) 233 ______ ______ Profit for the financial year attributable to 2,428 3,434 equity holders ______ ______ Earnings per share on profit for the financial year - pence Basic 137.6 193.6 Diluted 136.4 192.0 ______ ______ Dividends Final 2005 paid 6.5p (2004: 5.8p) 115 104 Interim 2006 paid 2.75p (2005 2.5p) 48 45 ______ ______ 163 149 ______ ______ Final 2006 proposed 7.5p (2005: 6.5p) 127 115 ______ ______ The above results relate entirely to continuing activities. There were no acquisitions or disposals of businesses during the period. Consolidated Balance Sheet AT 3O SEPTEMBER 2006 2006 2005 Â£'000 Â£'000 Non-current assets Investment properties 5,730 5,444 Investment in jointly controlled entity 7,959 6,996 Property, plant and equipment 4 4 Other financial assets 357 303 Deferred tax asset 37 112 ______ _______ Total non-current assets 14,087 12,859 ______ _______ Current assets Stock and work in progress 1,132 2,701 Trade and other receivables 1,497 216 Cash and cash equivalents 3,990 3,356 ______ ______ 6,619 6,273 ______ ______ Total assets 20,706 19,132 ______ ______ Current liabilities Corporation tax (316) (118) Trade and other payables (447) (657) ______ ______ (763) (775) ______ ______ Non-current liabilities Provisions (115) (277) Deferred tax liability (272) (504) ______ ______ (387) (781) ______ ______ Total liabilities (1,150) (1,556) ______ ______ Net assets 19,556 17,576 ______ ______ Capital and reserves Called up share capital 348 355 Share premium account 4,946 4,946 Other reserves 2,299 2,292 Revaluation reserv 4,892 3,990 Retained earnings 7,071 5,993 ______ _______ Shareholders' funds attributable to 19,556 17,576 equity holders ______ _______ Net assets per share 1,123p 990p ______ ______ Consolidated Cash Flow Statement FOR THE YEAR ENDED 30 SEPTEMBER 2006 2006 2005 Â£'000 Â£'000 Cash flows from operating activities Profit for the year 2,428 3,434 Adjustments for: Depreciation, amortisation and impairment 3 3 Financial income (203) (197) Financial expense - 5 Share of profit of jointly controlled entity (963) (2,124) Profit on sale of investment property (139) - Profit on sale of other investments (34) (1) Surplus on revaluation of investment properties (391) (225) Equity settled share based payment expenses 50 50 Taxation 121 (233) Decrease in provisions (162) (136) ______ ______ Cash flows from operations before changes in working capital 710 576 Decrease in stock 1,569 722 (Increase)/decrease in trade and other receivables (1,283) 1,986 (Decrease)/increase in trade and other payables (212) 139 ______ ______ Cash generated from operations 784 3,423 Tax paid (81) (132) ______ ______ Net cash flows from operating activities 703 3,291 ______ ______ Cash flows from investing activities Interest received 209 155 Interest paid - (5) Acquisition of property, investments and plant and equipment (238) (1,286) Proceeds of disposal of property, investments and plant and equipment 458 9 ______ ______ Net cash flows from investing activities 429 (1,127) ______ ______ Cash flows from financing activities Proceeds from the issue of share capital - 105 Purchase of own shares (335) (76) Dividends paid (163) (149) ______ ______ Net cash flows from financing activities (498) (120) ______ ______ Net increase in cash and cash equivalents 634 2,044 Cash and cash equivalents brought forward 3,356 1,312 ______ ______ Cash and cash equivalents at year end 3,990 3,356 ______ ______ Other Primary Statements FOR THE YEAR ENDED 30 SEPTEMBER 2006 Consolidated statement of changes in equity 2006 2005 Â£'000 Â£'000 Opening shareholders' funds 17,576 14,213 Share capital on options exercised - 9 Share premium on options exercised - 95 Own shares purchased (335) (76) Fair value of share options granted 50 50 Profit for the financial year 2,428 3,434 Dividends (163) (149) ______ ______ Closing shareholders' funds 19,556 17,576 ______ ______ Notes to the Financial Statements FOR THE YEAR ENDED 30 SEPTEMBER 2006 1. International Financial Reporting Standards The consolidated results for the year ended 30 September 2006 are the first full year results to be prepared by the group under applicable International Financial Reporting Standards adopted by the European Union (adopted 'IFRS') which have been adopted and incorporated into the principal accounting policies. The comparative figures for the financial year ended 30 September 2005 are not the group's statutory accounts for that financial year. The statutory accounts for the year ended 30 September 2005, prepared in accordance with UK GAAP, have been filed with the Registrar of Companies. The auditor gave an unqualified report, without any statement under section 237(2) or (3) of the Companies Act 1985. The auditor has audited the transition to IFRS in respect of the year ended 30 September 2005. The transition reconciliations of UK GAAP to IFRS were included in the interim report and are repeated in the annual report. Copies can be obtained from the company's website at www.cardiff-property.com. Key changes The main differences from UK GAAP are: â€¢ annual revaluation surpluses or deficits on investment properties are included in the income statement, whereas previously this was reported as a movement on the balance sheet through the revaluation reserve; â€¢ capital gains tax payable in the event that all the group's investment properties were sold at the balance sheet date is included as an additional deferred tax liability in the balance sheet, having previously been disclosed as a note to the accounts. The movement in valuation of the investment properties during the year will affect the tax charge in the income statement; â€¢ the value of lease incentives is spread over the life of a lease rather than to the first rent review; â€¢ no provision is made for proposed dividends; and â€¢ the fair value of options granted is recognised as an employee expense with a corresponding increase in equity. 2. Analysis of revenue, profit before taxation and net operating assets 2006 2005 Â£'000 Â£'000 Revenue (wholly in the United Kingdom): Property and other investment being 515 559 gross rents receivable Property development being sale of 1,927 1,113 development properties ______ ______ 2,442 1,672 ______ ______ Profit before taxation: Property and other investment 1,886 2,666 Property development 663 535 ______ ______ 2,549 3,201 ______ ______ Net operating assets: Assets Property and other investment 19,845 17,466 Property development 2,869 3,656 Eliminations (2,008) (1,990) ______ ______ Total assets 20,706 19,132 ______ ______ Liabilities Property and other investment 2,111 1,124 Property development 483 1,735 Eliminations (1,444) (1,303) ______ ______ Total liabilities 1,150 1,556 ______ ______ Net operating assets 19,556 17,576 ______ ______ 3. Earnings per share Earnings per share has been calculated in accordance with IAS 23 - Earnings Per Share using the profit after tax for the financial year of Â£2,428,000 (2005: Â£3,434,000) and the weighted average number of shares as follows: Weighted average number of shares 2006 2005 Basic 1,763,962 1,773,706 Adjustment to basic for bonus element of shares to be issued on exercise of options 16,046 14,690 _________ _________ Diluted 1,780,008 1,788,396 _________ _________ The Group's Annual Report and Accounts for the year ended 30 September 2006 are expected to be sent to shareholders on 8 December 2006, and will contain notices convening the Company's Annual General Meeting and an Extraordinary General Meeting to approve the renewal of waiver under Rule 9 of the City Code on Takeoves and Mergers, both to be held on 11 January 2007. Financial Calendar 2006 30 November Final results for 2006 announced 2007 11 January Annual General Meeting 17 January Ex dividend date for final dividend 19 January Record date for final dividend 8 February Final dividend to be paid May Interim results for 2007 announced 30 September End of accounting year Directors and Advisers Directors Auditor J Richard Wollenberg, KPMG Audit Plc Chairman and chief executive David A Whitaker FCA Finance director Stockbrokers and financial advisers Nigel D Jamieson BSc, MRICS, FSI, Arbuthnot Securities Ltd Independent non-executive director Secretary Bankers David A Whitaker FCA HSBC Bank plc Non-executive director of wholly owned Solicitors subsidiary First Choice Estates plc Charles Russell Derek M Joseph BCom, FCIS, MSII Morgan Cole Head office Registrar and transfer office 56 Station Road Computershare Investor Services PLC Egham PO Box 82 Surrey TW20 9LF The Pavilions Telephone: 01784 437444 Bridgwater Road Fax: 01784 439157 Bristol BS99 7NH E-mail: webmaster@cardiff-property.com Telephone: 0870 702 0001 Web: www.cardiff-property.com Dealing line: 0870 703 0084 Registered office Registered number Marlborough House 22705 Fitzalan Court Fitzalan Road Cardiff CF24 0TE This information is provided by RNS The company news service from the London Stock Exchange

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