Interim Results
Hammerson PLC
30 August 2000
Hammerson Half Year Results
Hammerson plc announces unaudited results for the six months to 30 June 2000.
Financial highlights:
2000 1999 Change
Net rental income £69.3m £62.3m +11.2%
Profit before taxation £47.5m £35.9m +32.3%
Adjusted profit before taxation(1) £38.1m £37.1m +2.7%
Earnings per share 14.8p 10.2p +45.1%
Adjusted earnings per share(1) 11.5p 10.6p +8.5%
Dividend per share 4.4p 4.19p +5.0%
30 June 31 Dec
2000 1999
Net asset value per share 612p 586p +4.4%
Diluted net asset value per share(2) 596p 573p +4.0%
Diluted net asset value per share 615p 583p +5.5%
including developments at current
market value(2)
Notes:
(1) Excluding exceptional items
(2) Diluted net asset value per share assumes the exercise of conversion
rights relating
to convertible bonds and of options granted over shares
The Chairman, Ronald Spinney, said today:
Hammerson has continued to strengthen its position as a leading European real
estate company. During the first six months of the year, the group acquired
major investment properties in France and Germany, providing opportunities
for value enhancement. It also effected a number of disposals and progressed
its programme of high quality developments.
The group's portfolio offers good growth potential. Two major developments
will be completed in the remaining months of this year and other projects are
being advanced. Despite some uncertainties in the UK retail market, economic
conditions remain favourable in all the areas in which the group operates. I
believe Hammerson is well positioned for the future.
For further information:
John Richards Tel: 020 7887 1000
Chief Executive Fax: 020 7887 1010
Simon Melliss
Group Finance Director
Christopher Smith
Director of Corporate Affairs
CHAIRMAN'S STATEMENT
Introduction
Hammerson has continued to strengthen its position as a leading European real
estate company. During the first six months of the year, the group acquired
major investment properties in France and Germany, providing opportunities
for value enhancement. It also effected a number of disposals and progressed
its programme of high quality developments.
When I last reported to you at the time of our 1999 preliminary results in
March this year, I referred to the fact that the UK publicly-quoted property
sector was out of favour with investors. At that time the share price stood
at 330 pence, whilst the Company's diluted net asset value per share at 31
December 1999 was 573 pence. Following our results announcement in March,
4.37 million ordinary shares of Hammerson were repurchased in the market at
an average price of 354 pence and have subsequently been cancelled.
Recent months have seen renewed investor interest in the property sector and
Hammerson's share price is now around 445 pence against a diluted net asset
value per share at 30 June 2000 of 596 pence.
Results and Dividend
Net rental income for the six months to 30 June 2000 was £69.3 million
compared with £62.3 million for the corresponding period in 1999, which on a
like-for-like basis represented an increase of 2.0%. Adjusted profit before
taxation, which excludes exceptional items of £9.4 million, rose by £1.0
million to £38.1 million, whilst the group's adjusted earnings per share
increased by 8.5% to 11.5 pence.
In the first six months of 2000, diluted net asset value per share increased
by 4.0% to 596 pence and by 5.5% to 615 pence if unrealised development
surpluses are included. Over the same period, the annualised return on
shareholders' equity was 8.7%.
The directors have declared an interim dividend of 4.4 pence per share
payable on 1 November 2000, an increase of 5.0%.
Portfolio
At 30 June the group's portfolio had a book value of nearly £3.0 billion, of
which £2.6 billion represented income producing investments and the balance
development properties. There was an underlying increase in the value of the
group's properties in the first six months of the year of 1.5%.
In the UK, which accounts for 67% of the total portfolio, there was an
underlying valuation increase in the first half of the year of 0.8% overall.
A rise in the value of the office properties of 3.4% was partially offset by
a decline of 1.4% in the value of the group's UK shopping centres. The latter
reflects current uncertainties in the UK retail market and the consequent
effect on investor sentiment.
The group's French properties, which represent 25% of the total portfolio,
showed an underlying valuation increase of 4.1%. The retail portfolio rose by
3.6% and offices by 6.2%. In Germany, which accounts for 8% of the group's
portfolio, the underlying values were virtually unchanged.
During the first half of 2000, the group's expenditure on the existing
portfolio and new acquisitions totalled £310 million. Acquisitions included
the completion in January of the purchase for £79 million of Forum Steglitz,
a 22,000 square metres shopping gallery in one of the principal shopping
streets in Berlin and Les Trois Quartiers, 21 boulevard de la Madeleine,
Paris 1er, a 28,500 square metres mixed use office and retail property,
purchased for £127 million in March.
In the six months to 30 June, the group raised £50 million through disposals,
principally three London office properties, Mitre House and Compter House in
the City and 32 St James's Square in the West End.
Since 30 June, Hammerson has exchanged contracts to acquire the majority of
the mall units in Bercy 2, a 35,000 square metres shopping centre situated in
the south-east of Paris. Completion of this acquisition, at a total cost of
£44 million, will take place in September 2000. Bercy 2 occupies an excellent
location, provides good potential for rental growth and strengthens the
group's retail presence in France. Hammerson has also recently sold 16 place
Vendome, Paris 1er, an office property, for £13 million.
Development Programme
The redevelopment of 16 Old Bailey, London EC4, an 8,500 square metres office
building, was successfully completed in June and the property has been handed
over to solicitors, Withers, for fitting out.
Construction is now well underway at the group's 23,200 square metres office
tower building at 280 Bishopsgate, London EC2. Reflecting the continuing
shortage of prime City office space, there has already been an encouraging
level of interest from prospective tenants for the building, completion of
which is scheduled for October 2001. The group continued to progress plans
for the redevelopment of 1 London Wall in the City to create an office
building of 18,600 square metres with its joint venture partner, Kajima.
The development of West Quay in Southampton, the joint venture with Barclays
of a 70,600 square metres shopping centre, is nearing completion and will
open at the end of September. Currently leases have been signed in respect of
76% of the total projected income from the scheme and a further 10% is in
solicitors' hands. Despite the fact that retailers have recently become more
cautious over entering into new lease commitments, we are confident that West
Quay's dominance, its affluent catchment, the high quality flexible space it
provides and the aspirational mix of retailers we have secured, will ensure
that the centre proves an attractive investment.
In Birmingham, excellent progress is being made by The Birmingham Alliance,
in which Hammerson has a one third interest, on this major project to
revitalise the retailing core of the city. The first phase, the modernisation
and expansion of Martineau Place, is scheduled for completion in Autumn 2001.
Currently leases have been signed, or are in solicitors' hands, in respect of
70% of the projected income from the scheme. In respect of phase two, the new
Bull Ring, Selfridges confirmed in February that they would join Debenhams as
an anchor tenant and the new indoor markets building is now nearing
completion. The current programme envisages that this major new regional
shopping centre will open at the end of 2003.
In April, the Secretary of State turned down our planned 27,000 square metres
expansion of the Brent Cross Shopping Centre, although the proposed extension
had been approved in principle by the London Borough of Barnet and received
widespread public support. Following legal advice, Hammerson has recently
instituted an appeal against the Secretary of State's decision, the result of
which is anticipated towards the end of this year. In the meantime, we are
pursuing a number of other initiatives to build on the centre's existing
strong market position.
In Germany, the B5 Designer Outlet Center, in which Hammerson has a 50%
interest, opened in May and initial trading levels are very encouraging.
In Paris, the redevelopment of 54 boulevard Haussmann, 9eme, to create 12,700
square metres of high quality retail and office space is virtually complete.
Pre-let to Galeries Lafayette, H&M and Bouchara, it is anticipated that the
property will generate an annual net rental income of approximately £5.5
million, compared with a total development cost of £75 million.
Also in Paris, we continued to progress plans for a major refurbishment of
51/53 Quai d'Orsay to create 9,900 square metres of offices and a complete
redevelopment of the adjoining 148 rue de l'Universite to create 11,900
square metres of offices. Work is expected to start in January 2001 with
completion scheduled for July 2002 at an estimated total cost of £110 million.
Balance Sheet and Cash Flow
During the first six months of the year net assets increased by £47 million
to £1,741 million. Retained profits of £30 million, valuation surpluses of
£28 million and favourable exchange translation movements of £4 million were
partially offset by £15 million relating to the purchase and cancellation of
shares.
In March, the group raised £200 million through a 20 year unsecured bond
issue at a coupon of 6.875% per annum.
The net cash outflow in the first six months of 2000 was £221 million. Net
capital expenditure totalled £241 million. A tax refund of £22 million was
received in respect of the 1998 disposal of Hammerson Canada and there were
other net cash outflows of £2 million.
Gearing was 64% at 30 June 2000, compared with 51% at 31 December 1999.
Markets and Outlook
The central London office occupational market was buoyant with take up of
space at a record level and limited supply. Rents in the West End and
Docklands continued to increase strongly and there was a resumption of growth
in rents in the City. Reflecting this, investment demand remained strong,
especially for buildings with good rental growth potential and opportunities
to add value through active management. The outlook for the central London
market is encouraging.
In the UK retail property market, recent months have seen increased caution
on the part of retailers. This is partly due to pressure on retailers'
margins and the restructuring of a number of chains such as Arcadia and C&A,
which has released a significant amount of existing retail space onto the
market. This has been reflected in investors' sentiment towards retail
property with a slight adverse movement in investment yields. Nevertheless,
Hammerson's portfolio is heavily weighted towards major shopping centres
which dominate their catchment areas and provide a broad range of retail and
leisure facilities. We believe this type of centre will show relatively good
performance in the medium term.
In the French retail sector, a shortage of prime units at a time of rising
consumer confidence and retailer demand, has led to further growth in rents
and a strengthening of investment values. The Paris office market also
performed very strongly in the first half of the year with prime rents
increasing by over 20% and investment demand remaining strong. The outlook
remains favourable for the markets in which Hammerson operates in France.
In Germany, consumer demand grew modestly and there was some pick up in
demand for prime retail space and rents. The outlook continues to improve,
particularly in the context of the relatively limited supply of large prime
units. Investment demand for shopping centres remains strong, both from
domestic and international institutions.
Hammerson's portfolio offers good growth potential. Two major developments
will be completed in the remaining months of this year and other projects are
being advanced. Despite some uncertainties in the UK retail market, economic
conditions remain favourable in all the areas in which the group operates. I
believe Hammerson is well positioned for the future.
Ronald Spinney
Chairman
30 August 2000
Unaudited Consolidated Profit and Loss Account
Six months Six months
Year ended ended ended
31 December 1999 30 June 2000 30 June 1999
£m Notes £m £m
123.3 Net rental income 1 69.3 62.3
(14.3) Administration (7.9) (7.5)
expenses
109.0 Operating profit 61.4 54.8
Exceptional items:
18.0 Profit/(Loss) on 2 9.4 (1.2)
the sale of
investment
properties
3.3 Profit on the sale - -
of Canadian operations
130.3 Profit on ordinary 70.8 53.6
activities before interest
(35.8) Cost of finance (net) 3 (23.3) (17.7)
94.5 Profit on ordinary 47.5 35.9
activities before taxation
0.1 Taxation 4 (4.6) (5.2)
94.6 Profit on ordinary 42.9 30.7
activities after taxation
(6.1) Equity minority interests (0.6) (1.4)
88.5 Profit for the period 42.3 29.3
(38.4) Dividends 5 (12.5) (12.1)
50.1 Retained profit for 29.8 17.2
the period
30.7p Earnings per share 6 14.8p 10.2p
30.2p Diluted earnings 6 14.8p 10.2p
per share
21.6p Adjusted earnings 6 11.5p 10.6p
per share
All income was derived from continuing operations.
Unaudited Consolidated Balance Sheet
31 December Notes 30 June 2000 30 June 1999
1999
£m £m £m
Fixed assets
2,656.7 Land and buildings 7 2,979.8 2,417.4
0.6 Fixtures, fittings 0.6 0.7
and equipment
2,657.3 Tangible assets 2,980.4 2,418.1
13.0 Investments 8 14.7 6.1
2,670.3 2,995.1 2,424.2
Current assets
94.7 Debtors 9 81.3 46.7
146.2 Cash and short 10 297.2 102.3
term deposits
240.9 378.5 149.0
Creditors falling
due within one year
(28.9) Borrowings 11 (47.2) (6.0)
(175.6) Other 12 (177.9) (117.1)
36.4 Net current assets 153.4 25.9
2,706.7 Total assets less 3,148.5 2,450.1
current liabilities
Creditors falling due
after more than one year
(975.8) Borrowings, 11 (1,363.0) (851.2)
including
convertible bonds
(11.1) Other 12 (13.0) (12.9)
(25.9) Equity minority (31.9) (66.4)
interests
1,693.9 1,740.6 1,519.6
Capital and reserves
72.2 Called up share 71.2 72.2
capital
528.1 Share premium 528.9 527.3
account
717.0 Revaluation 739.6 629.9
reserve
1.5 Other reserves 2.6 1.5
375.1 Profit and loss 398.3 288.7
account
1,693.9 Equity 1,740.6 1,519.6
shareholders'
funds
586p Net asset value 6 612p 526p
per share
573p Diluted net asset 6 596p 519p
value per share
Unaudited Statement of Total Recognised Gains and Losses
Six months Six months
Year ended ended ended
31 December 1999 30 June 2000 30 June 1999
£m £m £m
88.5 Profit for the 42.3 29.3
period
240.3 Unrealised surplus 27.7 109.6
on revaluation of
properties
13.3 Taxation on - -
realisation of
previous years'
revaluation gains
(10.8) Exchange translation 3.9 (7.4)
movements
331.3 Total recognised 73.9 131.5
gains and losses for
the period
Unaudited Note of Historical Cost Profits and Losses
Six months Six months
Year ended ended ended
31 December 1999 30 June 2000 30 June 1999
£m £m £m
94.5 Profit on ordinary 47.5 35.9
activities before
taxation
8.8 Realisation of previous 7.4 (33.4)
years' revaluation
gains/(losses)
103.3 Historical cost profit 54.9 2.5
on ordinary activities
before taxation
72.2 Historical cost 37.2 (16.2)
profit/(loss) for the
period after taxation,
equity minority
interests and dividends
Unaudited Reconciliation of Movements in Shareholders' Funds
Six months Six months
Year ended ended ended
31 December 1999 30 June 2000 30 June 1999
£m £m £m
50.1 Retained profit for 29.8 17.2
the period
242.8 Other recognised 31.6 102.2
gains and losses
- Purchase and (15.6) -
cancellation of own
shares
2.3 Issue of shares 0.9 1.5
295.2 Net increase in 46.7 120.9
shareholders' funds
1,398.7 Shareholders' funds 1,693.9 1,398.7
at 1 January
1,693.9 Closing 1,740.6 1,519.6
shareholders' funds
Unaudited Consolidated Cash Flow Statement
Year ended Six months Six months
31 December ended ended
1999 30 June 30 June
2000 1999
£m Notes £m £m
120.4 Net cash flow from 14 61.1 57.0
operating activities
(55.3) Returns on investment 14 (35.7) (22.2)
and servicing of
finance
(52.9) Corporation tax 21.3 (20.3)
received/(paid)
(366.7) Capital expenditure 14 (174.6) (193.8)
400.1 Acquisitions and 14 (66.6) 320.7
disposals
(49.0) Equity dividends paid (26.1) (36.8)
(3.4) Cash (outflow)/inflow (220.6) 104.6
14.6 (Increase)/Decrease in (150.2) 100.5
short term deposits
(15.5) Net cash 15 370.2 (167.4)
inflow/(outflow) from
financing
(4.3) (Decrease)/Increase in (0.6) 37.7
cash in the period
Unaudited Reconciliation of Net Cash Flow to Movement in Net Debt
Year ended Six months Six months
ended ended
31 December 30 June 2000 30 June 1999
1999
£m £m £m
(4.3) (Decrease)/Increase in (0.6) 37.7
cash in the period
17.8 (Increase)/Decrease in (384.9) 168.9
debt
(14.6) Increase/(Decrease) in 150.2 (100.5)
short term deposits
(1.1) Change in net debt (235.3) 106.1
resulting from cash
flows
- Adoption of secured bank (10.6) -
debt on acquisition of
property
41.2 Exchange adjustment (8.6) 37.6
40.1 Movement in net debt in (254.5) 143.7
the period
(898.6) Opening net debt (858.5) (898.6)
(858.5) Closing net debt (1,113.0) (754.9)
Notes to the Accounts
1 NET RENTAL INCOME
Year ended Six months ended Six months ended
31 December 1999 30 June 2000 30 June 1999
£m £m £m
94.7 United Kingdom 49.1 47.1
20.7 France 14.7 10.9
7.9 Germany 5.5 4.3
123.3 69.3 62.3
The net rental income of £62.3m for the six months ended 30 June 1999 was
equivalent to £61.8m translated at 30 June 2000 exchange rates.
2 EXCEPTIONAL ITEMS
Exceptional items includes £4.0m received in settlement of a legal claim
against a former tenant of a US property which was sold in 1995.
3 COST OF FINANCE (NET)
Six months Six months
Year ended ended ended
31 December 1999 30 June 2000 30 June 1999
£m £m £m
Interest payable on:
7.8 Bank loans and 7.4 4.0
overdrafts
55.2 Other loans 35.1 26.8
63.0 Interest payable and 42.5 30.8
similar charges
Less:
19.0 Interest payable 11.3 7.5
capitalised
8.2 Interest receivable 7.9 5.6
35.8 23.3 17.7
The net cost of finance of £17.7m for the six months ended 30 June 1999 was
equivalent to £17.4m translated at 30 June 2000 exchange rates.
4 TAXATION
The tax charge for the six months ended 30 June 2000 is based on the
projected effective tax rate for the full year. The charge reflects the
recovery of advance corporation tax previously written off and allowances for
capital expenditure. The charge includes overseas taxation of £0.3m (30 June
1999: £0.3m). No tax has been charged on the sale of investment properties in
the period. The net tax credit for the year ended 31 December 1999 included a
credit of £9.1m on disposals which mainly related to the disposal of
Hammerson Canada Inc.
Notes to the Accounts
5 DIVIDENDS
The directors have declared an interim dividend of 4.4 pence per share
payable on 1 November 2000 to shareholders on the register at the close of
business on 29 September 2000.
6 EARNINGS PER SHARE
Earnings per share have been calculated on the profit for the financial
period of £42.3m and the weighted average number of shares in issue during
the six months ended 30 June 2000 of 286.4m. Net asset value per share is
calculated from the value of net assets at 30 June 2000 of £1,740.6m and the
number of shares in issue at that date of 284.4m. Diluted earnings per share
and net asset value per share reflect the exercise of conversion rights
relating to the convertible bonds and of options relating to shares. Adjusted
earnings per share excludes exceptional items and tax on property disposals
and is calculated on the adjusted profit for the period of £32.9m.
Exceptional items increased earnings per share by 3.3 pence in the six months
to 30 June 2000.
7 LAND AND BUILDINGS
Fully developed Properties in
properties the course of
at valuation development at cost Total
£m £m £m
Movements in the period
Balance at 1 January 2,288.6 368.1 2,656.7
2000
Exchange adjustment 10.5 2.5 13.0
Additions at cost 252.7 57.2 309.9
Transfers at cost 13.1 (13.1) -
Disposals (39.9) - (39.9)
Development outgoings - 11.3 11.3
capitalised
Revaluation surplus 28.8 - 28.8
Balance at 30 June 2000 2,553.8 426.0 2,979.8
Fully developed properties are stated at market value as at 30 June 2000,
valued by professionally qualified external valuers. With the exception of
the properties shown below they have been valued by Jones Lang LaSalle,
Chartered Surveyors. In the United Kingdom the valuation was performed
jointly with Donaldsons, Chartered Surveyors. The group's interests in the
Birmingham Alliance properties were valued by DTZ Debenham Tie Leung,
Chartered Surveyors and the group's interest in the Oracle Shopping Centre
was valued by Donaldsons. The valuations have been prepared in accordance
with the Appraisal and Valuation Manual of The Royal Institution of Chartered
Surveyors.
At 30 June 2000 the market value of properties held for development was
£484m. The total amount of interest included in development properties at 30
June 2000 was £24.5m.
Should the group's properties be sold at their book value a tax liability of
approximately £91m would arise, and if the unrecognised surpluses on
developments are included the tax liability would be £108m. No provision for
these contingent liabilities has been made as it is not expected that any
liability will arise in the foreseeable future.
Notes to the Accounts
8 INVESTMENTS
31 December 1999 30 June 2000 30 June 1999
£m £m £m
13.0 Other investments 13.3 6.1
- Own shares 1.4 -
13.0 14.7 6.1
Other investments represent a 57.2% interest in Value Retail Investors
Limited Partnership which has an interest in a designer outlet centre in
Bicester, United Kingdom. The interest was acquired during 1999 at a cost of
£11.3m. The investment is included at its market value at 30 June 2000 of
£13.3m, the property element of which has been reviewed by Donaldsons,
Chartered Surveyors.
The Company's own shares were acquired by the trustees of the Hammerson
Deferred Share Plan at a cost of £1.7m (nominal value £0.1m) and may be
awarded to participants in accordance with the terms of the Plan. The cost of
the shares is currently being amortised over three years.
9 DEBTORS
31 December 1999 30 June 2000 30 June 1999
£m £m £m
Due within one year
20.9 Trade debtors 29.2 18.7
34.7 Other debtors 36.2 23.4
37.8 Corporation tax 11.7 0.1
1.3 Prepayments 4.2 4.5
94.7 81.3 46.7
10 CASH AND SHORT TERM DEPOSITS
Cash and short term deposits includes a deposit of £56.0m, the use of which
is restricted to settling outstanding consideration for 51/53 Quai d'Orsay
and 148 rue de l'Universite, Paris. Settlement is expected to take place in
November 2000.
11 BORROWINGS
31 December 1999 30 June 2000 30 June 1999
£m £m £m
238.1 Bank loans and 427.3 71.6
overdrafts
632.4 Other loans: Unsecured 836.8 635.8
26.3 Secured 38.0 42.0
107.9 Convertible bonds 108.1 107.8
1,004.7 1,410.2 857.2
On 27 March 2000 the Company issued £200m 6.875% bonds. The bonds are
redeemable at par on 31 March 2020.
Notes to the Accounts
11 BORROWINGS (continued)
Maturity
31 December 30 June 30 June
1999 Bank loans Other 2000 1999
Total and overdrafts loans Total Total
£m £m £m £m £m
679.7 After 5 - 914.5 914.5 700.6
years
295.6 From 2-5 261.1 71.4 332.5 150.0
years
0.5 From 1-2 129.0 (13.0) 116.0 0.6
years
975.8 Due after 390.1 972.9 1,363.0 851.2
more than
1 year
28.9 Due within 1 37.2 10.0 47.2 6.0
year
1,004.7 427.3 982.9 1,410.2 857.2
Analysis by currency
31 December 1999 30 June 2000 30 June 1999
£m £m £m
449.2 Sterling 648.7 408.9
555.5 Euro currencies 761.5 448.3
1,004.7 1,410.2 857.2
Undrawn committed facilities
31 December 1999 30 June 2000 30 June 1999
£m £m £m
2.1 Expiring in 2000 - 3.6
228.7 Expiring after 2001 48.7 365.5
230.8 48.7 369.1
12 CREDITORS - OTHER
31 December 1999 30 June 2000 30 June 1999
£m £m £m
Falling due within one
year
32.8 Trade creditors 44.1 35.9
72.6 Other creditors 78.2 18.7
5.9 Taxation 5.5 23.9
26.3 Dividends payable 12.5 12.1
38.0 Accruals 37.6 26.5
175.6 177.9 117.1
Falling due after more
than one year
11.1 Other creditors 13.0 12.9
Notes to the Accounts
13 FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
31 December 1999 30 June 2000 30 June 1999
Book Fair Book Fair Book Fair
value value value value value value
£m £m £m £m £m £m
(924.3) (989.1) Borrowings (1,327.7) (1,338.1) (779.9) (867.5)
(107.9) (105.5) Convertible (108.1) (121.0) (107.8) (127.1)
bonds
- (14.7) Interest rate - (11.1) - (15.3)
rate swaps
27.5 26.7 Currency 25.6 32.1 30.5 31.0
swaps
(1,004.7) (1,082.6) Total (1,410.2) (1,438.1) (857.2) (978.9)
borrowings
The fair value of financial assets is the same as their book value. The fair
value of financial liabilities represents the market value of all outstanding
bonds in issue and existing swap contracts together with the cost of repaying
all other debt at par.
14 ANALYSIS OF CASH FLOWS
Six months Six months
Year ended ended ended
31 December 1999 30 June 2000 30 June 1999
£m £m £m
Reconciliation of operating profit
to net cash inflow from operating
activities
109.0 Operating profit 61.4 54.8
0.4 Depreciation and 0.5 0.2
amortisation
(4.7) Increase in accrued rent (4.1) (2.4)
receivable
12.6 (Increase)/Decrease in (14.7) (5.7)
debtors
3.1 Increase in creditors 18.0 10.1
120.4 61.1 57.0
Returns on investment and
servicing of finance
8.6 Interest received 5.6 5.7
(54.2) Interest paid (41.3) (26.3)
(9.7) Dividends paid to - (1.6)
minorities
(55.3) (35.7) (22.2)
Capital expenditure
(477.5) Purchase and development (224.9) (262.2)
of property
110.8 Sale of property 50.3 68.4
(366.7) (174.6) (193.8)
Acquisitions and disposals
400.1 Disposal of subsidiary (0.2) 320.7
companies
- Purchase of subsidiary (66.4) -
companies
400.1 (66.6) 320.7
Notes to the Accounts
15 ANALYSIS OF CASH FLOW FROM FINANCING
Six months Six months
Year ended ended ended
31 December 1999 30 June 2000 30 June 1999
£m £m £m
193.7 Issue of bonds 198.6 193.7
2.3 Issue of shares 0.9 1.5
- Purchase of own shares (15.6) -
for cancellation
(213.0) Increase/(Decrease) in 181.7 (386.1)
medium and long term
borrowings
1.5 Increase in short term 4.6 23.5
borrowings
(15.5) 370.2 (167.4)
16 OTHER INFORMATION
The financial information contained in this report does not constitute
statutory accounts within the meaning of section 240 of the Companies Act
1985. The results for the year ended 31 December 1999 are an abridged version
of the full accounts for that year which received an unqualified report from
the auditors which did not contain a statement under s237(2) or (3) of the
Companies Act 1985. The full accounts for the year ended 31 December 1999
have been filed with the Registrar of Companies.
The group has adopted Financial Reporting Standard ('FRS') No.15, 'Tangible
Fixed Assets' with effect from 1 January 2000. Comparative figures have not
been restated as any adjustment is not material to the financial statements.
Previously, the group capitalised the interest cost attributable to each
development property until the property was substantially let and income
producing or until income exceeded outgoings. Under the revised policy,
interest will be capitalised only until a property is ready for its intended
use. Where the development is substantially let at completion this change is
unlikely to have a material effect on the financial statements. However, for
developments that are not let at completion, the group will now charge the
costs of unlet space against its profit for the year. At present, the group's
principal unlet development property is 280 Bishopsgate, London EC2, where
completion is not due until October 2001.
Subject to the adoption of FRS 15 referred to above, the unaudited financial
information contained in this report has been prepared on the basis of the
accounting policies set out in the full accounts for the year ended 31
December 1999.
PROPERTY PORTFOLIO INFORMATION
For the six months ended 30 June 2000
Fully
developed Underlying
Development investment valuation Net Vacancy
properties properties at cost rental rate
at valuation income
£m £m % £m %
United Retail London 163.2 609.0 (2.1) 16.6 3.1
Kingdom and South
of England
Midlands 49.7 295.5 Nil 6.9 1.1
and North
of England
212.9 904.5 (1.4) 23.5 2.6
Office City 80.3 369.0 1.1 13.4 -
West End - 305.4 3.6 8.1 0.1
Docklands - 135.1 9.8 4.1 12.9
and other
80.3 809.5 3.4 25.6 5.1
Total UK 293.2 1,714.0 0.8 49.1 3.7
Continental Europe
Retail France 66.6 482.6 3.6 11.5 2.2
Germany - 238.8 Nil 5.5 8.0
66.6 721.4 2.4 17.0 5.1
Office France 66.2 118.4 6.2 3.2 -
Total Continental 132.8 839.8 2.9 20.2 4.5
Europe
Group Retail 279.5 1,625.9 0.2 40.5 3.8
Office 146.5 927.9 3.8 28.8 4.5
Total Group 426.0 2,553.8 1.5 69.3 4.0
Number of fully developed investment properties by value
Above Between Between Below Total
£100m £50m and £25m £25m
£100m and £50m
Retail 7 6 2 6 21
Office 4 3 3 10 20
Total 11 9 5 16 41
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