Final Results - Year Ended 31 December 1999
Gresham House PLC
27 April 2000
CHAIRMAN'S STATEMENT
The results for the year show a return on ordinary activities after taxation for
the combined Revenue and Capital accounts of £1,040,000 against £1,474,000 last
year. This fall was anticipated as a result of the non-recurring increase in
rents received last year following settlement of the long outstanding rent
review at Newton-Le-Willows. If the figures are compared on a like for like
basis, excluding the non-recurring rental income, the results show a combined
increase of £251,000 over last year.
Shareholders will also see an appreciation in net asset value, allowing for
dilution, from 94.8p per share to 202.3p per share, which has largely been due
to the revaluation of the Group's investment property portfolio by £3,740,000.
In September Deacon Knowsley Limited, a 75% subsidiary undertaking, purchased 38
acres of industrial property in Knowsley, Lancashire for a consideration of
£10,870,000 which was funded by increasing the Group's borrowings by a similar
amount.
As a result shareholders can expect a substantial increase in the Group's
property rental flow during the year to 31st December, 2000, and in subsequent
years; however there will be a commensurate increase in interest costs. As
reported in my Interim Statement we have, during the year, replaced previous
loan facilities secured on existing properties with longer term funding
arrangements at lower rates of interest.
In December, Transense Technologies plc, a company we have supported for five
years, was admitted to the Alternative Investment Market ('AIM') at a price of
100p per share. The Accounts reflect that the price had risen to 300p by the
year end and, since then, has risen substantially to a price of 1512p as at 26th
April, 2000. Gresham's original investment was at 23p per share which was also
the price paid for 325,000 shares upon exercise of its option subsequent to the
year end. Since admission to AIM we have sold part of our holding at a mean
price of 1928p, raising £4,100,000, which will provide liquidity and enable us
to invest further in new young companies. As at today Gresham still holds
210,000 ordinary shares in Transense. Taking account of the increase in value of
Transense since the year end, the net asset value at 26th April, 2000 now
exceeds 400p per share.
We are currently examining proposals to alter the terms of the 2.5% Gresham
House Finance plc 2001 Secured Loan Stock, £6,062,000 of which is still
outstanding to holders other than Group companies, so as to give the Loan
Stockholders alternative options for extending the period of the loan beyond the
repayment date of 31st December, 2001.
As a result of the continued improvement in the overall position of the Group
your Board proposes that the final dividend be increased from 0.5p to 1.0p per
share.
A P Stirling
27th April, 2000
GRESHAM HOUSE plc
PRELIMINARY FINAL STATEMENT
CONSOLIDATED STATEMENT OF TOTAL RETURN
for the Year ended 31st December, 1999
1999 1998
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains on Investments - 313 313 - 500 500
Income:
Dividend and Interest
Income 388 - 388 206 - 206
Rental Income 1,659 - 1,659 2,014 - 2,014
Other operating income 195 - 195 8 - 8
Other Expenses (694) - (694) (587) - (587)
Net return before
finance costs and taxation 1,548 313 1,861 1,641 500 2,141
Interest payable and
similar charges (822) - (822) (579) - (579)
Return on ordinary
activities before taxation 726 313 1,039 1,062 500 1,562
Taxation 1 1 (88) - (88)
Return on ordinary
activities after
taxation attributable to
equity shareholders 727 313 1,040 974 500 1,474
Dividend - Equity shares (42) - (42) (21) - (21)
Transfer to reserves 685 313 998 953 500 1,453
Basic return per
Ordinary Share 17.2p 7.4p 24.6p 23.0p 11.8p 34.8p
Diluted return per
Ordinary Share 16.6p 7.1p 23.7p 22.8p 11.7p 34.5p
Notes
(i) The revenue column of this statement is the consolidated profit and loss
account of the group.
(ii) In accordance with the Company's accounting policies the above figures
take into account the results of significant investments only to the
extent of dividends received amounting to £36,549.
(iii) Dividends - Ordinary shares:
- proposed final dividend of 1.0p per
share (1998: 0.5p) payable on 23rd June,
2000 to shareholders on the register at
19th May, 2000. 42 21
(iv) The summary of results for the year ended 31st December, 1999 does not
constitute statutory accounts within the meaning of s240 of the Companies
Act 1985. The full statutory accounts which will be available to
shareholders by 12th May, 2000 have not been reported on by the Company's
auditors and have not been delivered to the Registrar of Companies. Full
accounts in respect of the year ended 31st December, 1998 have been
delivered to the Registrar of Companies and the Auditor's Report
on those accounts was unqualified.
(V) Basic revenue and capital returns per ordinary share are based on the net
revenue return on ordinary activities before deduction of dividends of
£727,000 (1998: £974,000) and on the capital return of £313,000 (1998:
£500,000) respectively, and on 4,238,000 (1998: 4,238,000) ordinary
shares in issue during the year.
The diluted revenue and capital returns per ordinary share are based on
the net revenue return on ordinary activities before deduction of
dividends of £727,000 (1998: £974,000) and on the net capital return of
£313,000 (1998: £500,000) respectively, and on 4,390,507 (1998:
4,266,203) shares. The number of shares is based upon the number of
shares in issue during the year together with 152,507 (1998: 28,203)
shares deemed to have been issued at nil consideration pursuant to
options outstanding.
GRESHAM HOUSE plc
PRELIMINARY FINAL STATEMENT
CONSOLIDATED BALANCE SHEET
as at 31st December, 1999
1999 1998
£'000 £'000
Investments
Securities 2,580 2,168
Properties 27,045 10,520
Tangible assets 485 396
30,110 13,084
Current assets 6,909 2,016
Creditors - amounts falling due
within one year 2,796 3,059
Net current assets/(liabilities) 4,113 (1,043)
Total assets less current liabilities 34,223 12,041
Creditors - amounts falling due
after more than one year 25,339 7,995
8,884 4,046
Capital and reserves
Called up share capital 1,060 1,060
Share premium account 242 242
Other reserves
Revaluation reserve 7,829 3,989
Capital reserve - realised 17,569 17,610
Capital reserve - unrealised 497 143
Revenue reserves (18,313) (18,998)
Equity shareholders' funds 8,884 4,046
Basic Net Asset Value per
ordinary share 209.6p 95.5p
Diluted Net Asset Value per
ordinary share 202.3p 94.8p
Notes
The basic Net Asset Value per ordinary share is calculated by reference
to the group net assets as at 31st December, 1999 of £8,884,000 (1998:
£4,046,000) and 4,238,000 ordinary shares being the number of ordinary
shares in issue at the year end.
The diluted Net Asset Value per ordinary share is calculated by
reference to the group net assets as at the year end of £8,884,000
(1998: £4,046,000) and 4,390,507 (1998:4,266,203) ordinary shares in
issue. The number of shares is based upon the number of shares in issue
at the year end together with 152,507 (1998:28,203) shares deemed to have
been issued at nil consideration pursuant to the options outstanding
at the year end in accordance with Financial Reporting Standard No. 14.
GRESHAM HOUSE plc
PRELIMINARY FINAL STATEMENT
CONSOLIDATED CASH FLOW STATEMENT
for the Year ended 31st December, 1999
1999 1998
Notes £'000 £'000
Cashflow from operating activities
Investment income received 103 35
Deposit interest received 259 162
Rental income received 1,541 1,962
Other cash payments (766) (316)
Net cash inflow from
operating activities 1 1,137 1,843
Returns on investment and
servicing of finance
Interest paid on 2.5% Secured
Redeemable Loan Stock, 2001 (153) (179)
Interest paid on property loans (607) (400)
Net cash outflow from Investments
and servicing of finance (760) (579)
Capital expenditure and financial
investment
Purchase of tangible fixed assets - (45)
Purchase of investments (376) (110)
Sales of investments 251 109
Net loans (advanced) (13) (145)
Purchase of investment properties (12,785) -
Sale of freehold property - 720
Net cash inflow/(outflow) from capital
expenditure and financial investment (12,923) 529
Corporation tax paid (64) -
Equity dividends paid (21) (16)
Cash inflow before use of liquid
resources and financing (12,631) 1,777
Management of liquid resources
(Acquisition)/sale of listed securities
held for dealing (202) 2
Financing
Acquisition of 2.5% Secured
Redeemable Loan Stock
by group company (44) (625)
Repayment of loans (2,014) (953)
Receipt of loans 19,770 -
Net cash outflow from financing 17,712 (1,578)
Increase/(decrease) in cash 3 4,879 201
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
1999 1998
£'000 £'000
Retained profit for the year 685 953
Revaluation surplus 3,840 -
Net movement on capital reserves 313 500
4,838 1,453
Shareholders' funds at 1st January 4,046 2,593
Shareholders' funds at 31st December 8,884 4,046
GRESHAM HOUSE plc
PRELIMINARY FINAL STATEMENT
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
for the Year ended 31st December, 1999
1 Reconciliation of operating profit to operating cash flows.
1999 1998
£'000 £'000
Return on ordinary activities
before taxation 726 1,062
Interest payable 822 579
1,548 1,641
Depreciation 11 7
Provision against loans and guarantees - 50
Taxation on franked investment income (22) (9)
Corporation tax adjustment 22 -
Increase in debtors (850) (195)
Increase in creditors 428 349
Net cash flow from operating
activities 1,137 1,843
2 Reconciliation of net cash flow to
movement in net debt
Increase in cash for the period 4,879 201
Cash outflow from repayment of debt 2,058 1,578
Cash inflow from loans received (19,770) -
Cash outflow/(inflow) from increase/
(decrease)in liquid resources 202 (2)
Change in net debt resulting from
cash flows (12,631) 1,777
Discount on acquisition of loan stock
by group undertaking 26 375
Movement in net debt in the year (12,605) 2,152
Net debt at beginning of year (8,755) (10,907)
Balance at end of year (21,360) (8,755)
3 Analysis of net debt
At 1st Cash Other At 31st
January flow non-cash December
1999 changes 1999
£'000 £'000 £'000 £'000
Cash in hand and at bank 750 3,828 4,578
Overdrafts (1,158) 1,051 (107)
4,879
Debt due within one year (459) 400 (742) (801)
Debt due after one year (7,995) (18,112) 768 (25,339)
(12,833)
Current asset investments 107 202 309
(8,755) (12,631) 26 (21,360)