Final Results
GRESHAM HOUSE plc
36 Elder Street, London E1 6BT
Telephone: 020 7588 7352, Facsimile: 020 7377 2946
CHAIRMAN'S STATEMENT
I am pleased to report another improved performance for this
financial year.
Our results for the year to 31st December 2004 show a return
attributable to equity shareholders for the revenue account of
£1,465,000 compared with £1,153,000 for last year and a loss
of £46,000 on the capital account compared with a gain of
£2,000 last year. Overall the basic return per ordinary
share was 29.5p compared with 25.1p for the previous year.
The Group's property portfolio, which stood at £37.2 million
at the end of last year, was reduced to a value of £28.6
million as at 31st December, 2004. This was as a result of the
sale of property units at Knowsley, Lancashire for a net £15.7
million and the purchase of an estate of industrial and
commercial property units at Speke, Liverpool, close to the
John Lennon Airport for £6.35 million. This new investment has
been subsequently revalued by independent valuers at the year
end to £8 million.
For 2004 the performance of the property portfolio improved
with rental income increasing from £3,193,000 last year to
£3,266,000 this year. As a result of the acquisition and
disposal referred to above, this level is unlikely to be
maintained during 2005 and is dependent upon the success of
the letting programme which is underway at Speke with a number
of potential tenants.
Shareholders will note that the Capital Account includes a
deficit on the disposal of property investments of £1.767
million. This has arisen as a result of the net proceeds of
the sale of the Knowsley property units being less than the
valuation as at 31st December, 2003 reflecting improvements to
the property units of approximately £400,000, the costs of
breaking related fixed loans of approximately £500,000 and
certain provisions which the Board felt were prudent to make.
Overall however the transaction resulted in a net gain from
the original cost of the investment which has been reflected
in the Statement of Total Recognised Gains and Losses in
previous years, as detailed in note 9 of the accounts. The
reason your Board decided to sell at that time was to ensure
that the Group was in a position to acquire the property units
at Speke which they believe offer greater potential in the
long term.
The Group's basic net asset value per ordinary share has thus
risen from 572.3p to 625.2p an increase of 52.9p or 9.24%
being the same percentage increase as the FTSE All Share Index
over the same period.
The greatest value of your company's investments in securities
is attributable to those securities dealt in under AIM,
representing approximately 43.5% of the total share portfolio.
The most significant of these investments were as follows:
Transense Technologies plc, which represents 8.6% of the
share portfolio, continues to make progress with its
innovative tyre pressure monitoring system and electric
power steering system. During the year its share price
increased from 46p to 89.5p.
InvestinMedia plc is an investment company specialising
in the media sector whose principle assets are a 49%
share in Complete Communications Corporation Limited,
owner of the worldwide rights to "Who Wants To Be A
Millionaire?" and "You Are What You Eat" and a 16.7%
holding in Medal Entertainment & Media Plc, which is an
AIM quoted media company. The share price has increased
from 84.6p to 94.5p at the year end and represents 3.2%
of the share portfolio
Image Scan Holdings plc. This company's strategy remains
the commercialisation of its expertise and products
relating to acquiring, interpreting and presenting single
and multi-view digital x-ray images. During the year the
share price fell from 37p to 11p in October, 2004 at
which time we provided this company with additional
support and finance which, together with changes in
management and advisers and the introduction of new
members to the board, has provided the company with new
opportunities particularly in the field of industrial
inspection culminating in a placing of shares at 7p a
share subsequent to the year end. I am pleased to be
able to report that this reorganisation is now completed.
This investment currently represents 1.4% of the
portfolio.
SpaceandPeople Plc, which specialises in the marketing
of promotional areas in leading shopping centres,
progressed well during the year and was introduced to the
AIM market at the end of the year at a price of 50p
against an original cost price of 1p per share in October
2000.
Other significant unquoted investments include Hallin Marine
Subsea International Plc. At the year end this company was
valued at £562,000, representing over 40% of the value of all
unlisted securities.
Hallin specialises in offshore sub-sea intervention primarily
for the oil, gas and telecommunications industries operating
in the Far East. The work involves use of marine vessels,
diving systems of various types, remotely controlled
intervention systems and survey positioning systems to conduct
underwater inspection, construction and maintenance
operations. This company made substantial progress during the
year and I am pleased to report that it was introduced to the
AIM Market after the year end at a price of 64p against a year
end valuation of 14p per share.
We continue with our strategy of seeking innovative early
stage investments and during the year we have subscribed for
equity interests in a number of start-up situations which
appear to have significant potential for future expansion and
return.
In particular shareholders will note from the balance sheet
that the net current assets have increased from just over £2
million to nearly £9 million, an increase of £7 million, which
is largely accounted for by the increase in cash reserves from
£1.2 million to £7.2 million at year end. Given these
increased reserves your board has taken the opportunity to
repay bank borrowings of £3 million since the year end.
As a consequence your Board recommends a final dividend of 4p
per share against 3.1p last year, an increase of 29%.
A P Stirling 28th April, 2005
GRESHAM HOUSE plc
PRELIMINARY FINAL STATEMENT
CONSOLIDATED STATEMENT OF TOTAL RETURN
for the Year ended 31st December, 2004
2004 2003
evenue Capital Total Revenue Capital Total
£' 000 £' 000 £' 000 £' 000 £' 000 £' 000
Gain on
investments - 1,620 1,620 - 2 2
Deficit on
disposal of property - (1,767) (1,767) - - -
Income:
Dividend and
Interest Income 224 - 224 234 - 234
Rental Income
3,266 - 3,266 3,193 - 3,193
Other operating
income 370 - 370 444 - 444
_____ _____ _____ ___
3,860 (147) 3,713 3,871 2 3,873
Other expenses (1,634) - (1,634) (1,204) - (1,204)
Net return before _____ ____ _____ _____ ____ ___
finance costs and 2,226 (147) 2,079 2,667 2 2,669
taxation
Interest payable
and similar (1,252) - (1,252) (1,458) - (1,458)
charges
Return on ordinary ____ _____ _____ _____ ___ ____
activities before 974 (147) 827 1,209 2 1,211
taxation
Taxation 550 (550) - - - -
Return on ordinary
activities after _____ ____ ___ _____ ___ _____
Taxation 1,524 (697) 827 1,209 2 1,211
Minority interest (59) 651 592 (56) - (56)
Return _____ ____ _____ _____ ___
attributable to 1,465 (46) 1,419 1,153 2 1,155
equity
shareholders
Dividend -Equity shares (195) - (195) (149) - (149)
Transfer to _____ ____ _____ ___
reserves 1,270 (46) 1,224 1,004 2 1,006
_____ ____ _____ __
Basic return per 30.4p (0.9)p 29.5p 25.1p - 25.1p
Ordinary Share
Diluted return 30.4p (0.9)p 29.5p 24.9p - 24.9p
per Ordinary Share
Consolidated Statement of Total Recognised Gains and Losses
Group
2004 2003
£'000 £'000
Profit for the financial year
attributale to equity shareholders 1,465 1,153
Net movement on capital reserves (46) 2
Surplus on property revaluation 1,854 5,298
Minority interest in reserves (204) (1,006)
_____ _____
Total net gains
recognised in the year 3,069 5,447
_____ ______
Notes
(i) In accordance with the Company's accounting policies the revenue return in the
above figures take into account the results of significant investments only to
the extent of dividends received amounting to £23,767.
(ii) 2004 2003
Dividends - Ordinary shares £'000 £'000
-proposed final dividend of 4.0p per share
(2003: 3.1p) payable on 24th June, 2005 to
shareholders on the register at 20th May, 2005 195 149
___ ___
(iii) The summary of results for the year ended 31st December, 2004 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 13th May, 2005 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, 2003 have been delivered to the Registrar of
Companies and the Auditor's Report on those accounts was unqualified.
(iv) Basic revenue and capital returns per ordinary share are based on
the return attributable to equity shareholders of £1,465,000
(2003: £1,153,000) and on the net capital return of £(46,000) (2003:
£2,000) respectively and on 4,812,498 (2003: 4,597,976) ordinary shares
being the weighted average number of those in issue during the year.
(v) The diluted revenue and capital returns per ordinary share are based
on the return attributable to equity shareholders of £1,465,000
(2003: £1,153,000) and on the net capital return of £(46,000) (2003:
£2,000) respectively. Both diluted revenue and capital returns are
calculated on 4,819,227 (2003: 4,631,941) shares being the
weighted average number of shares in issue during the year
together with 6,728 (2003: 33,965) shares deemed to have been issued at nil
consideration pursuant to the maximum number of shares that can be
issued under the terms of the 8% Secured Loan Stock issued by
Gresham House Finance plc.
GRESHAM HOUSE plc
PRELIMINARY FINAL STATEMENT
CONSOLIDATED BALANCE SHEET
as at 31st December, 2004
2004 2003
£'000 £'000
Investments
Securites
8,762 6,746
Properties 28,600 37,200
Tangible assets 525 539
______ ______
37,887 44,485
Current assets 14,955 8,397
Creditors amounts falling due
within one year (5,962) (6,350)
______ _____
Net current assets 8,993 2,047
______ _____
Total assets less current liabilities 46,880 46,532
Creditors - amounts falling due
after more than one year (15,645) (18,013)
Deferred income (245) (245)
______ ______
30,990 28,274
Capital and reserves
Called up share 1,212 1,189
capital
Share premium account 761 554
Other reserves
Revaluation reserve 10,614 12,800
Capital erserve - realsied 24,550 22,671
Capital erserve - unrealised 1,741 (170)
Revenue reserves (8,562) (9,832)
______ ______
Equity shareholders' funds 30,316 27,212
Minority interests 674 1,062
______ ______
30,990 28,274
______ ______
Basic net asset value per ordinary share 625.2p 572.3p
Diluted net asset value per ordinary 624.3p 568.3p
______ _____
Notes: Basic net asset value per ordinary share is based on equity shareholders'
funds at the year end and on 4,848,919 (2003: 4,754,641) ordinary shares
being the number of ordinary shares in issue at the year end.
Diluted net asset value per ordinary share is based on equity shareholders'
funds at the year end and on 4,855,647 (2003: 4,788,606) ordinary shares.
The number of shares is based upon the number of shares in issue at the year
end together with 6,728 (2003: 33,965) shares deemed to have been issued at
nil consideration pursuant to the maximum number of shares that can be
issued under the terms of the 8% Secured Loan Stock issued by Gresham
House Finance plc in accordance with Financial Reporting Standard No 14
GRESHAM HOUSE plc
PRELIMINARY FINAL STATEMENT
CONSOLIDATED CASH FLOW STATEMENT
for the Year ended 31st December, 2004
2004 2003
Notes £'000 £'000
Cashflow from operating
activities
Investment income
received 129 133
Interest received 95 101
Rental income received 3,234 2,990
Other cash payments (1,859) (316)
_____ _____
Net cash inflow from
operating activities 1 1,599 2,908
_____ _____
Returns on investment and
servicing of finance
Interest paid on 8%
Secured
Redeemable Loan Stock,
2006 (293) (293)
Interest paid on
property loans (1,201) (1,148)
Net cash outflow from _____ _____
Investments and servicing of finance (1,494) (1,441)
_____ _____
Capital expenditure and financial
investment
Sale of tangible fixed
assets - 6
Purchase of tangible
fixed assets - (19)
Purchase of investments (2,154) (1,415)
Sales of investmenst 2,108 1,320
Net loans advanced (99) -
Purchase of investment
properties (7,011) (1,039)
Disposal of investment properties 15,698 -
Purchase of developments in
hand (280) (2,392)
Net cash inflow/(outflow) from
capital expenditure and financial _____ _____
investment 8,262 (3,539)
Corporation tax paid
- -
Equity dividends paid
(148) (142)
Cash inflow/(outflow) before use
of liquid resources and financing 8,219 (2,214)
_____ _____
Management of liquid resources
Sale/(acquisition) of listed
securities held for dealing 134 (335)
Financing
Repayment of loans (7,613) (889)
Receipt of loans 5,088 1,797
Share capital issued at
par 230 271
Net cash (outflow)/inflow _____ _____
from financing (2,295) 1,179
Increase/(decrease)in cash 3 6,058 (1,370)
_____ _____
GRESHAM HOUSE plc
PRELIMINARY FINAL STATEMENT
STATEMENT OF MOVEMENT IN SHAREHOLDERS' FUNDS
2004 2003
£'000 £'000
Revenue return for the
year 1,270 1,004
Surplus on property
revaluation 1,854 5,298
Net movement on
capital reserves (46) 2
Exercise of options
to subscribe for share capital 230 271
Minority interest in reserves (204) (1,006)
_____ _____
3,104 5,569
Shareholders' funds at 1st
January 27,212 21,643
______ ______
Shareholders' funds at 31st
December 30,316 27,212
_______ ______
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
for the Year ended 31st December, 2004
1 Reconciliation of operating profit
to operating cash flows.
2004 2003
£'000 £'000
Return on ordinary
activities
before taxation 974 1,209
Interest payable 1,252 1,458
_____ _____
2,226 2,667
Depreciation 14 9
Write back of previous
impairment - (40)
(Increase)/decrease in
debtors (622) 64
(Decrease)/increase in
creditors (19) 208
_____ _____
Net cash flow from
operating activities 1,599 2,908
_____ _____
2004 2003
£'000 £'000
2 Reconciliation of net cash flow to
movement in net debt
Increase/(decrease) in cash
for the year 6,058 (1,370)
Cash outflow from repayment
of debt 7,613 889
Cash inflow from loans
received (5,088) (1,797)
Cash (inflow)/outflow
from (decrease)/increase in
liquid resources (134) 335
______ _____
Change in net debt resulting
from cash flows 8,449 (1,943)
Net debt at 1st January (19,833) (17,890)
______ ______
Net debt at 31st December (11,384) (19,833)
______ ______
GRESHAM HOUSE plc
PRELIMINARY FINAL STATEMENT
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT Cont'd
for the Year ended 31st December, 2004
3 Analysis of net debt
Other
At 1st Cash non- At
January flow cash 31st December
2004 changes 2004
£'000 £'000 £'000 £'000
Cash at bank and brokers 1,189 6,041 7,230
Bank overdraft (17) 17 - -
_____ _____ ____ _____
1,172 6,058 - 7,230
Debt due within one
year (3,673) 797 (640) (3,516)
Debt due after one
year (18,013) 1,728 640 (15,645)
______ _____ ____ _______
(21,686) 2,525 - (19,161)
Current asset
investments 681 (134) 547
______ _____ ____ ____
(19,833) 8,449 - (11,384)
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