Final Results

Conygar Investment Company PLC(The) 19 December 2006 19 December 2006 The Conygar Investment Company PLC Preliminary Results for the year ended 30 September 2006 Highlights â€¢ Significant growth in profit before tax and net asset value â€¢ Profit before tax increased by 123% to Â£1.177 million (2005: Â£0.527 million) â€¢ Basic earnings per share increased by 54% to 5.65p (2005: 3.66p) â€¢ Proforma triple NAV increased by 116% to 117p per share (2005 : 54p) â€¢ Successful share placing post year end raising Â£1.395 million net of expenses, making a total of Â£11.7 million raised in calendar year 2006 â€¢ Continued progress on the Â£100 million Pembroke Dock marina development proposal â€¢ Acquisition during the year of fourteen office properties in Bedford Square, London WC1 for Â£58.3 million â€¢ Acquisition post-year end of eight properties in Buckingham Street, London WC2 for Â£33.9 million â€¢ Property trading continues apace with contracts exchanged for the sale of Â£32.85 million post-year end Enquiries: The Conygar Investment Company PLC Robert Ware 020 7408 2322 Peter Batchelor 020 7408 2322 About Conygar â€¢ Conygar is a trading and development group dealing primarily in UK commercial property â€¢ The group aims to invest in property assets when we can add significant value using our property management, development and transaction structuring skills â€¢ A major focus for the group during 2007 is the proposed Pembroke Dock marina scheme and we are on track to submit a planning application early in the New Year. Other exciting port and marina opportunities are also being actively pursued â€¢ Conygar was formed in 2003 by Chief Executive, Robert Ware together with Finance Director, Peter Batchelor and Property Director, Steven Vaughan â€¢ Conygar raised Â£4.4 million upon admission to AIM in 2003 and has subsequently raised Â£12.2 million through the issue of new ordinary shares Chairman's & Chief Executive's Statement Results Profit before tax for the year ended 30 September 2006 increased 123% to Â£1,177,000 from Â£527,000 the previous year with undiluted earnings per share increasing 54% from 3.66p to 5.65p. Net asset value per share increased from 54p to 88p as at 30 September 2006. Business and Transactions We are delighted to report an increase in profit, the development of both the business and balance sheet over the last twelve months has been significant and transforming. Pembroke Dock Last December we announced the acquisition of 50% of the share capital of Martello Quays Limited ('Martello') for a nominal sum. Martello, which is a partnership between Conygar, Welsh based developers and Vinci Project Development Limited, a Vinci PLC subsidiary, has been appointed as preferred developer by a client group comprising Pembrokeshire County Council, the Welsh Assembly Government, the Crown Estate and The Milford Haven Port Authority to obtain planning permission and develop an area known as Pembroke Dock Waterfront. As stated at the time, it was anticipated that the planning application would include 450 houses and apartments, 300 marina berths and associated car parking, a factory outlet, a pub, restaurant, shop, hotel and multiplex cinema. Conygar is committed to fund the planning application costs which will be in the order of Â£350,000. Costs incurred to the year end amount to Â£153,190. We are pleased to report that the scheme was recently presented to The Design Commission for Wales, who have responded that they support the proposed use, choice of site and our proposal to create a strong and robust design code for ensuring a quality development. This positive reaction from the Commission is welcomed, which together with our excellent working relationship with the client group takes us a significant step forward in the planning process. Whilst we are dealing with a myriad of planning issues that are typical of such a major development proposal in an historic and environmentally sensitive area we remain on track for the submission of a planning application early in the New Year. Bedford Square In April we announced the acquisition of a terrace of fourteen office properties in Bedford Square, London WC1 for Â£58.3 million. The Royal Bank of Scotland plc provided a non-recourse structured finance facility of Â£52.75 million and the Company invested Â£5.4 million which entitles us to 75% of any profit realised. The balance of the consideration was satisfied by a third party. The properties comprise approximately 95,516 square feet of freehold office accommodation and at the time of the acquisition three of the buildings were empty which offered us refurbishment opportunities. Our intention is to add value through active asset management and realise the value created within a two year period. We are delighted to be able to report that at the year end two properties have been sold realising Â£9.22 million with a further property under exchange for Â£4.7 million, and that after the year end a further two properties have been exchanged for sale for Â£19.05 million. Assuming the post balance sheet exchanged contracts complete our share of profit before tax will amount to Â£3.68 million. We have decided that each six months our trading properties will be re-valued by an independent firm of valuers, so that shareholders will have a better idea as to the current value. Knight Frank LLP have valued the remaining Bedford Square properties at the year end at Â£60.35 million which, after attributable tax, would be an increase in net asset value of Â£5.44 million. Buckingham Street After the year end we announced the acquisition of eight properties in Buckingham Street, London WC2 for Â£33.9 million. The Royal Bank of Scotland plc provided a non-recourse structured facility of Â£29 million and the Company invested Â£3.46 million which entitles us to 70% of any profit realised. The balance of the consideration was satisfied by a third party. The properties comprise approximately 54,000 square feet of freehold single and multi-let office accommodation, of which 36,000 square feet is currently let. The properties offer significant active management potential which we intend to exploit and realise over the next two years. We are pleased to report that as of today's date, three properties have been exchanged for sale amounting to Â£13.8 million and negotiations are underway on several others. Assuming all exchanged contracts complete, our share of profit realised before attributable tax since acquisition amounts to Â£3.08 million. Any remaining properties will be independently valued as at the end of March in line with our new policy. Share Placings and Board Restructuring Last March we placed 8,927,405 new 5p ordinary shares at 116 pence per share and after expenses of some Â£42,000, raised just over Â£10.3 million. In order to reflect a more appropriate board structure once the fundraising had completed Nigel Hamway, our Senior Non-Executive Director became Chairman and Robert Ware moved from Chairman to Chief Executive. At the end of October, in order to satisfy investor demand, we placed an additional one million 5p ordinary shares at 140p per share and after expenses of Â£5,000 raised Â£1,395,000. Proforma Net Asset Value As a trading Group, properties are carried at the lower of cost and net realisable value. In order to show a clearer position of our current net asset value we have calculated our Proforma net asset value using the Knight Frank valuation of the portfolio: NAV Pence per Â£'000 Share Audited net asset value as at 30 September 2006 16,369 87.8 Net increase after tax in Bedford Square valuation 5,440 29.2 Proforma net asset value as at 30 September 2006 21,809 117.0 Taking into account the 27 October 2006 share placing which raised Â£1.395 million, Proforma net asset value per share increased to 118.1p. Pembroke Dock and Buckingham Street remain valued at cost but will be revalued at 31 March 2007 in accordance with our new policy. Strategy and The Future Our strategy for the coming year is fourfold: 1. To complete and continue the realisation of the trading assets located in Bedford Square and Buckingham Street, London, 2. To finalise the planning permissions at Pembroke Dock and to commence development, and 3. To carry on appraising our continuing pipeline of transactions including ports, marinas and general property opportunities, acquiring when appropriate. 4. To raise additional finance as necessary. As always we will continue to keep shareholders fully informed of progress and of any material transactions. IFRS (International Financial Reporting Standards) Following a review, it has been decided that the company will adopt IFRS with effect from 1 October 2006. Prospects The Board is confident about the future prospects of the company and we look forward to reporting progress on all fronts at the end of the year. N J Hamway R T E Ware Chairman Chief Executive CONSOLIDATED PROFIT AND LOSS ACCOUNT For the year ended 30 September 2006 Year Ended Year Ended 30 Sep 06 30 Sep 05 Â£'000 Â£'000 TURNOVER Group and share of joint venture's turnover 10,056 9,691 Less share of joint venture's turnover - (9,179) 10,056 512 Cost of Sales (7,664) (397) Gross Profit 2,392 115 Administrative Expenses (358) (399) Operating Profit/(Loss) 2,034 (284) Share of operating (loss)/profit of joint ventures (7) 963 2,027 679 Income from current asset investments - 24 Interest receivable and similar income Group 357 121 Joint Ventures 25 23 382 144 Interest payable and similar charges Group (1,232) - Joint Ventures - (320) (1,232) (320) Profit on ordinary activities before taxation 1,177 527 Taxation on profit on ordinary activities (358) (171) Profit for the financial period 819 356 Earnings per share Undiluted 5.65p 3.66p Diluted 5.39p 3.43p All of the activities of the Group are classed as continuing. The Group has no recognised gains or losses other than the results for the period as set out above. CONSOLIDATED BALANCE SHEET At 30 September 2006 30 Sep 2006 30 Sep 2005 Â£'000 Â£'000 Â£'000 Â£'000 FIXED ASSETS Tangible fixed assets 7 4 7 4 Investment in joint ventures Share of gross assets 463 687 Share of gross liabilities (18) 445 (223) 464 452 468 CURRENT ASSETS Stocks 49,988 - Debtors 3,536 60 Cash at bank 13,001 4,839 66,525 4,899 CURRENT LIABILITIES Creditors: amounts falling due within one year 3,180 63,345 135 4,764 Total assets less current liabilities 63,797 5,232 Creditors: amounts falling due after more than one year 47,428 - NET ASSETS 16,369 5,232 CAPITAL AND RESERVES Called-up equity share capital 932 486 Share premium account 14,294 4,427 Profit and loss account 1,138 319 Shareholders' funds 16,364 5,232 Minority interests 5 - TOTAL EQUITY 16,369 5,232 COMPANY BALANCE SHEET At 30 September 2006 30 Sep 2006 30 Sep 2005 Â£'000 Â£'000 Â£'000 Â£'000 FIXED ASSETS Tangible fixed assets 7 4 4 CURRENT ASSETS Debtors 9,389 60 Cash at bank 6,267 4,839 15,656 4,899 CURRENT LIABILITIES Creditors: amounts falling due within one year 160 15,496 135 4,764 Total assets less current liabilities 15,503 4,768 CAPITAL AND RESERVES Called-up equity share capital 932 486 Share premium account 14,294 4,427 Profit and loss account 277 (145) SHAREHOLDERS' FUNDS 15,503 4,768 CONSOLIDATED CASHFLOW STATEMENT For the year ended 30 September 2006 Year ended 30 Sep Year ended 30 06 Sep 05 Â£'000 Â£'000 Net cash (outflow) / inflow from operating activities (49,590) 231 Returns on the investments and servicing of finance Dividends received from joint ventures 200 - Other dividends received - 34 Interest received 357 127 Interest paid (452) - Issue costs of new long-term loans (471) - Net cash flow from returns on investments and servicing of finance (366) 161 Cash (outflow) / inflow before management of liquid resources and financing (49,956) 392 Management of liquid resources (Increase) / decrease in funds placed on short term deposit (98) 2,308 Acquisitions and disposals Investment in joint venture - (1) Capital expenditure (5) (4) Financing Issue of equity share capital 10,355 - Issue costs (42) - Cash inflow from increase in loans 52,750 - Repayment of long term loans (4,940) - Net cash inflow from financing 58,123 - Increase in cash 8,064 2,695 CONSOLIDATED CASHFLOW STATEMENT For the year ended 30 September 2006 NOTES TO THE CASH FLOW STATEMENT a) RECONCILIATION OF OPERATING PROFIT TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Year Ended 30 Sep Year Ended 30 06 Sep 05 Â£'000 Â£'000 Operating profit /(loss) 2,034 (284) Depreciation 2 - Increase in stocks (49,988) - (Increase) / Decrease in debtors (3,640) 9 Decrease in current asset investments - 397 Increase in creditors 2,002 109 Net cash (outflow) / inflow from operating activities (49,590) 231 b) RECONCILIATION OF net cash flow to movement in net funds 30 Sep 06 30 Sep 05 Â£'000 Â£'000 Increase in cash in the period 8,064 2,695 Cash outflow / (inflow) from short term deposits 98 (2,308) Cash inflow from long term loans (52,750) - Issue costs of new long term loans 471 - Repayment of long term loans 4,940 - Change in net debt resulting from cashflows (39,177) 387 Amortisation of loan issue costs (89) - Movement in net debt (39,266) 387 Net cash at 1 October 2005 4,839 4,452 Net debt at 30 September 2006 (34,427) 4,839 c) ANALYSIS OF CHANGES IN NET FUNDS At At 1 Oct 2005 Cash flows Other 30 Sept 2006 Â£'000 Â£'000 Â£'000 Â£'000 Cash in hand and at bank 2,747 8,064 - 10,811 Short term deposits* 2,092 98 - 2,190 Cash 4,839 8,162 - 13,001 Loans - (47,339) (89) (47,428) 4,839 (39,177) (89) (34,427) * Short-term deposits are included within cash at bank in the balance sheet Notes: 1. The financial information above does not constitute statutory accounts within the meaning of Section 240 Companies Act 1985 as amended (the ' Act'). Full accounts in respect of the year ended 30 September 2006, will be delivered to the Registrar of Companies in due course. 2. Basic and fully diluted earnings per share have been calculated on the basis of a profit after tax of Â£819,000 and on the number of shares in issue being the weighted average number of shares in issue during the period of 14,491,437. The weighted average number of shares on a fully diluted basis was 15,203,895 which assumes the exercise of options over 712,458 shares at the state of the period. No adjustment has been made in respect of the exercise of options which were anti-dilutive throughout the period. 3. The directors are not proposing that a dividend payment be made. 4. The Report and Accounts for the year ended 30 September 2006 will be posted to shareholders shortly and copies may be obtained free of charge for at least one month following their posting by writing to The Secretary, The Conygar Investment Company PLC, Fourth Floor, Bond House, 19-20 Woodstock Street, London W1C 2AN. 5. The Company's Annual General Meeting will be held at 11.30 am on Thursday, 11 January 2007 at the offices of the Company, Fourth Floor, Bond House, 19-20 Woodstock Street, London W1C 2AN. The directors of Conygar accept responsibility for the information contained in this announcement. The best of the knowledge and belief of the directors of Conygar (who have taken all reasonable care to ensure that such is the case) the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information. This information is provided by RNS The company news service from the London Stock Exchange

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