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Benchmark Group PLC (BMK)

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Monday 05 March, 2001

Benchmark Group PLC

Interim Results

Benchmark Group PLC
5 March 2001



5 March 2001

                               INTERIM RESULTS

                        Six months to 31 December 2000

Benchmark Group PLC ('Benchmark'), the specialist Central London property
investment and development company, announces its Interim Results for the six
months to 31 December 2000.

Highlights

  * NAV per share increased 5.9% to 363.2p (343.1p as at 30 June 2000)

  * Investment properties showed net increase of 3.2% or £23.9 million based
    on independent valuation

  * Net rental income increased by 52.6% to £14.8 million (1999: £9.7
    million)

  * Pre-tax profit increased by 44.0% to £14.4 million (1999: £10.0 million)

  * Basic earnings per share up 30.9% to 8.9p (1999: 6.8p)

  * Interim dividend of 1.95p (1999: 1.85p) - increase of 5.4%

  * Net gearing as at 31 December 2000 of 64.4% (86.7% including joint
    venture funding) compared to 64.3% as at 30 June 2000

  * £152.3 million spent on acquisitions in Central London during the period
    including 6/10 Bruton Street; Melrose House, Savile Row and our 50% share
    in the joint venture with JER Partners for the acquisition of a portfolio
    from MEPC.

  * £68.9 million of sales achieved during the period providing a net profit
    above book value of £3.1 million (4.8%) - £22.5 million over historic cost

  * Sale of majority interest in Nexus Estates, realising a pre-tax profit
    of £6.5 million



Tan Sri Quek Leng Chan, Chairman of Benchmark, said: 'We have now established
a strong Central London portfolio.  We will continue to concentrate on the
Central London market, making sales when attractive prices can be obtained and
seeking to expand our portfolio by development and acquisitions, on our own or
in joint ventures, where we can see opportunities to add value using our
specialist expertise.



'The prospects are good but must be tempered because of general concerns about
a downturn in the US economy, from which we cannot be totally insulated in the
UK.  However, the potential for lower interest rates may make property at
current price levels an attractive asset for investment.'



For further information, please contact:


Benchmark Group PLC                      Tavistock Communications Ltd
Nigel Kempner, Chief Executive           Jeremy Carey / Bella Pagdin
Tel: 020 7287 6881                       Tel: 020 7600 2288





Chairman's Statement



The Central London property market has remained strong in all sectors in which
we specialise, with demand and supply being fairly well balanced.  Having
regard to the latest low vacancy factor in the office market, there is a
marked absence of speculative space being developed.  However, it remains to
be seen whether the current level of tenant demand is sustainable.  At the
present time, the prospects for rental and capital growth continue to be good.



We now control and manage around £1 billion of offices and commercial space in
Central London comprising some 2 million sq ft.  In this strong market the
Company has enjoyed a busy and successful first half of our current financial
year.



NET ASSET VALUE

Our freehold and leasehold investment properties, including those investment
properties held in joint ventures, were valued as at 31 December 2000 by our
external valuers, DTZ Debenham Tie Leung Limited, Chartered Surveyors.  This
showed a net increase of £23.9m, a 3.2% uplift since 30 June 2000.



Consequently, the net asset value per share at 31 December 2000 rose to 363.2p
(1999: 299.0p) compared with 343.1p at 30 June 2000, an increase of 5.9%.



RESULTS

Pre-tax profits for the six months to 31 December 2000 were £14.4m (1999: £
10.0m), an increase of 44.0% over the same period last year.  They reflect a £
3.1m profit on property disposals achieved during the period and a £6.5m
profit on the sale of the majority of our interest in Nexus Estates PLC.
Earnings per share were 8.9p (1999: 6.8p) representing an increase of 30.9%
over the same period last year.



Net rental income for the period increased by 52.6% from £9.7m to £14.8m,
principally due to the expiry of rent free periods granted on the successful
letting of completed developments, such as Stirling Square in St James's.



The net rental income on an annualised basis at the date of this report
including our share in the joint venture is now £48.2m, compared with £39.7m
at 26 September 2000, the date of our last report.



Our net borrowings at 31 December 2000 were £283.2m resulting in a gearing of
64.4% compared to 64.3% as at 30 June 2000.  If our share of the JER joint
venture funding were included, the gearing would be 86.7%.



DIVIDEND

The Directors have declared an interim dividend of 1.95p (1999: 1.85p) which
will be paid on 10 April 2001 to shareholders on the register at 16 March
2001.  This represents an increase of 5.4% over the interim dividend last
year.



ACQUISITIONS AND DISPOSALS

During the six month period we spent £152.3m on the acquisition of properties
in Central London, including £125m on the acquisition of a portfolio of
properties from MEPC Ltd, as part of our 50% share in a new joint venture
formed with JER Partners, a US fund manager. We also acquired 6/10 Bruton
Street and Melrose House, Savile Row, both in Mayfair.



During the same period we have furthered our policy of converting unrealised
valuation surpluses into realised profits and we made disposals from our
portfolio realising total sales of £68.9m at a net profit of £3.1m.  This
gives a surplus of 4.8% above our book value or £22.5m over historic cost.



We completed the sale of our remaining residential units at Stirling Square,
including one sold just after the end of the calendar year, at an overall
average price of £1,100 per sq ft, which is a satisfactory result.



In addition we have been successful in finding a buyer for Nexus Estates, to
facilitate its expansion in the UK and internationally.  85% of our shares
have been sold to a management buy-out, sponsored by the private equity arm of
Henderson Global Investors.  The existing executive Directors of Nexus
received a 3% stake and we retained our freehold or long leasehold interests
in the centres at 1 Cornhill, 147 Leadenhall Street and 8 Grafton Street on
new market leases.  We achieved a pre-tax profit of £6.5m on the sale and have
received a 12% stake in the business.



DEVELOPMENT

Medius in Wardour Street, W1 will provide 67,000 sq ft of new offices and will
be available for hand-over to a tenant in June 2001.  Much interest has been
expressed and the 10,000 sq ft of retail space has already been let to YHA plc
on a 15 year lease at an annual rental of £240,000.



At our Belgravia Estate, we are still waiting to finalise our Section 106
agreement with Westminster City Council before commencing works on the new
Waitrose store and the road improvement scheme.  We are also awaiting
Westminster's decision on our planning application to redevelop 41,500 sq ft
of offices, 5,000 sq ft of leisure use, 12,000 sq ft of retail space and 7,200
sq ft of residential accommodation on the south side of Golden Square.  We
hope to receive the decision later this year.



At 6/10 Bruton Street we are now marketing the 17,000 sq ft of newly
refurbished offices above The Square restaurant and for which we have already
received many enquiries.



CONCLUSION

We have now established a strong Central London portfolio.  We will continue
to concentrate on the Central London market, making sales when attractive
prices can be obtained and seeking to expand our portfolio by development and
acquisitions, on our own or in joint ventures, where we can see opportunities
to add value using our specialist expertise.



The prospects are good but must be tempered because of general concerns about
a downturn in the US economy, from which we cannot be totally insulated in the
UK.  However, the potential for lower interest rates may make property at
current price levels an attractive asset for investment.





Tan Sri Quek Leng Chan

Chairman

2 March 2001





                     Consolidated Profit and Loss Account

                      Six months ended 31 December 2000


                                                 Six months Six months  Year to
                                                         to         to   30 Jun
                                                  31 Dec 00  31 Dec 99       00
                                           Note (unaudited)(unaudited)(audited)

                                                      £'000      £'000    £'000
GROSS RENTAL INCOME

Group and share of joint venture                     19,258     11,814   25,129
Less:  share of joint venture                        (1,740)          -        -
                                                     17,518     11,814   25,129
Ground rents                                           (874)      (681)  (1,398)
Irrecoverable property costs                         (1,440)    (1,195)  (3,009)
Amortisation of leasehold properties                   (400)      (216)    (464)
NET RENTAL INCOME                                    14,804      9,722   20,258
Net operating profit/(loss) from serviced      2        593       (588)  (1,064)
offices
Profit on disposal of trading properties       3        645      2,504    3,193
Administration expenses                              (1,577)    (1,536)  (3,903)
GROUP OPERATING PROFIT                               14,465     10,102   18,484
Share of operating profit in joint venture            1,660          -        -
TOTAL OPERATING PROFIT                               16,125     10,102   18,484
Profit on disposal of investment               3      2,474      4,140    8,790
properties
Profit on disposal of shares in subsidiary            6,500          -        -
undertaking
PROFIT ON ORDINARY ACTIVITIES BEFORE
INTEREST                                             25,099     14,242   27,274
Net interest payable and similar charges       4    (10,678)    (4,248) (11,790)
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION                                             14,421      9,994   15,484
Taxation                                       5     (3,999)    (1,840)  (2,220)
PROFIT ON ORDINARY ACTIVITIES AFTER
TAXATION                                             10,422      8,154   13,264
Minority interests                                      363         73      236
PROFIT FOR THE FINANCIAL PERIOD                      10,785      8,227   13,500
Dividends                                      6     (2,362)    (2,230)  (5,014)
RETAINED PROFIT FOR THE PERIOD                        8,423      5,997    8,486
EARNINGS PER SHARE EXCLUDING NET PROFITS
ON DISPOSALS                                   7       3.3p       2.8p     3.5p
EARNINGS PER SHARE  - BASIC                    7       8.9p       6.8p    11.2p
- DILUTED                                      7       8.6p       6.7p    11.2p





                          Consolidated Balance Sheet

                            As at 31 December 2000


                                                      As at      As at    As at
                                                  31 Dec 00  31 Dec 99   30 Jun
                                                (unaudited) (unaudited)      00
                                            Note                       (audited)
                                                      £'000      £'000  £'000
FIXED ASSETS
Tangible assets
Investment and development properties          8   707,766     585,282  690,802
Other tangible assets                                  258       2,451    2,979
Joint venture
Share of gross assets                              136,860           -        -
Share of gross liabilities                        (104,506)          -        -
                                               9    32,354           -        -
Investments                                          3,213       3,048    1,953
                                                   743,591     590,781  695,734
CURRENT ASSETS
Trading properties                                       -       7,656    4,892
Debtors                                       10    37,921      10,443   26,510
Investments                                            916         750      750
Cash at bank and in hand                             4,731       1,977    1,317
                                                    43,568      20,826   33,469
CREDITORS - AMOUNTS FALLING DUE WITHIN ONE
YEAR                                               (39,854)    (22,914) (55,573)
NET CURRENT ASSETS/(LIABILITIES)                     3,714      (2,088) (22,104)
TOTAL ASSETS LESS CURRENT LIABILITIES              747,305     588,693  673,630
CREDITORS - AMOUNTS FALLING DUE AFTER MORE
THAN ONE YEAR                                     (238,617)  (173,610)(192,095)
CONVERTIBLE UNSECURED LOAN STOCK                   (49,291)   (49,237) (49,265)
PROVISIONS FOR LIABILITIES AND CHARGES        11    (3,234)    (3,669)  (3,234)
NET ASSETS                                          456,163    362,177  429,036
CAPITAL AND RESERVES
Called up share capital                              60,543     60,280   60,518
Share premium account                         12    150,297    149,737  150,234
Revaluation reserve                           12    146,569     95,781  145,040
Other reserves                                12         51         51       51
Profit and loss account                       12     82,336     54,573   59,452
SHAREHOLDERS' FUNDS                                 439,796    360,422  415,295
Minority interests                                   16,367      1,755   13,741
TOTAL CAPITAL EMPLOYED                              456,163    362,177  429,036
NET ASSETS PER SHARE                           7    363.2p      299.0p   343.1p





             Group Statement of Total Recognised Gains and Losses

                      Six months ended 31 December 2000


                                                 Six months Six months  Year to
                                                         to         to   30 Jun
                                                  31 Dec 00  31 Dec 99       00
                                               (unaudited) (unaudited) (audited)

                                                      £'000      £'000    £'000
Profit for the financial period                      10,785      8,227   13,500
Share of surplus arising on revaluation of
investment properties                                20,862     29,812   82,290
Revaluation surplus arising from part disposal
of investment property                                    -      1,870    1,870
Tax on realisation of revaluation surpluses on
investment property disposals                        (4,872)    (3,383)  (4,212)
Total recognised gains and losses for the period     26,775     36,526   93,448







                  Note of Historical Cost Profits and Losses

                      Six months ended 31 December 2000


                                                 Six months Six months  Year to
                                                         to         to   30 Jun
                                                  31 Dec 00  31 Dec 99       00
                                               (unaudited) (unaudited) (audited)
                                                      £'000      £'000    £'000


Profit on ordinary activities before taxation        14,421      9,994   15,484




Realisation of property revaluation surpluses in
prior periods                                        19,333     19,594   22,813
                                                     


Historical cost profit on ordinary activities
before taxation                                      33,754     29,588   38,297
                                                     


Historical cost profit retained after tax and
dividends                                            22,521     25,518   26,851
                                                     











              Reconciliation of Movements in Shareholders' Funds

                      Six months ended 31 December 2000


                                               Six months   Six months  Year to
                                                       to           to   30 Jun
                                                31 Dec 00    31 Dec 99       00
                                              (unaudited)  (unaudited) (audited)
                                                    £'000        £'000
                                                                          £'000
Total recognised gains and losses for the          26,775       36,526   93,448
period
Dividends                                          (2,362)      (2,230)  (5,014)
Issue of shares                                        88           -       735
Increase in total capital employed                 24,501       34,296   89,169
Opening shareholders' funds                       415,295      326,126  326,126
Closing shareholders' funds                       439,796      360,422  415,295





                       Consolidated Cash Flow Statement

                      Six months ended 31 December 2000


                                                 Six months Six months  Year to
                                                         to         to   30 Jun
                                                  31 Dec 00  31 Dec 99       00
                                          Note (unaudited) (unaudited) (audited)

                                                      £'000      £'000    £'000
OPERATING ACTIVITIES

Net cash inflow before sales of and
additions to trading properties                      20,815      8,952   13,820
Net cash inflow from sales of and
additions to trading properties                       5,537      4,169    7,622
NET CASH INFLOW FROM OPERATING ACTIVITIES  13(a)     26,352     13,121   21,442
RETURNS ON INVESTMENTS AND SERVICING OF
FINANCE
Interest received                                       185        115      368
Interest paid                                       (10,228)    (5,681) (14,085)
NET CASH OUTFLOW FOR RETURNS ON
INVESTMENTS AND SERVICING OF FINANCE                (10,043)    (5,566) (13,717)
TAXATION
Corporation tax paid                                   (180)       (12)  (1,097)
CAPITAL EXPENDITURE
Acquisition of investment properties                (54,518) (119,164) (222,314)
Disposals and other capital receipts                 54,372     70,019  129,176
Purchase of other fixed assets                         (990)    (1,003)  (1,860)
Repayment of loan notes by investment                     -          -    1,095
NET CASH OUTFLOW FOR CAPITAL EXPENDITURE             (1,136)   (50,148) (93,903)
ACQUISITIONS AND DISPOSALS
Purchase of joint venture                           (28,438)          -        -
NET CASH OUTFLOW FOR ACQUISITIONS AND
DISPOSALS                                           (28,438)          -        -
EQUITY DIVIDENDS PAID                                (2,785)    (2,411)  (4,641)
CASH OUTFLOW BEFORE USE OF LIQUID
RESOURCES AND FINANCING                             (16,230)   (45,016) (91,916)
FINANCING
Issue of shares                                          88          -      735
Increase in debt                           13(b)     19,556     46,711   92,216
NET INFLOW FROM FINANCING                            19,644     46,711   92,951
INCREASE IN CASH IN THE PERIOD             13(b)      3,414      1,695    1,035





                            Notes to the Accounts



1      ABRIDGED ACCOUNTS

The results for the six months ended 31 December 2000 do not constitute full
statutory accounts within the meaning of Section 240 of the Companies Act
1985.  The figures for the year to 30 June 2000 are based on the audited
accounts for that year which have been reported on, without qualification, by
the auditors and have been delivered to the Registrar of Companies.





2      NET OPERATING PROFIT/(LOSS) FROM SERVICED OFFICES


                                  Six months to      Six months to      Year to
                                      31 Dec 00          31 Dec 99    30 Jun 00
                                    (unaudited)        (unaudited)    (audited)
                                          £'000              £'000        £'000
Gross operating income                    2,764                 49          975
Operational overheads                    (1,926)              (423)      (1,657)
Gross operating profit/(loss)               838               (374)        (682)
Central overheads                          (245)              (214)        (382)
Operating profit/(loss)                     593               (588)      (1,064)





3      PROFIT ON DISPOSAL OF TRADING AND INVESTMENT PROPERTIES

The profit on disposal of trading and investment properties for the period
ended 31 December 2000 comprises:


                                                   Trading Investment
                                                properties properties     Total
                                                     £'000      £'000     £'000
Aggregate consideration                              5,650     63,221    68,871
Less:  sales costs                                    (113)      (872)     (985)
Net proceeds                                         5,537     62,349    67,886
Less:  historical cost of properties                (4,892)   (40,542)  (45,434)
Historical cost profit                                 645     21,807    22,452
Less:  revaluation surpluses in prior periods            -    (19,333)  (19,333)
                                                       645      2,474     3,119





4      NET INTEREST PAYABLE AND SIMILAR CHARGES


                                              Six months   Six months   Year to
                                                      to           to 30 Jun 00
                                               31 Dec 00    31 Dec 99 (audited)
                                             (unaudited)  (unaudited)     £'000
                                                   £'000        £'000
Amounts payable on bank loans and                  9,419        5,757    12,881
overdrafts
5.75% Convertible Unsecured Loan Stock 2013        1,469        1,479     2,940
Less:  interest capitalised                       (1,314)      (2,881)   (3,648)
                                                   9,574        4,355    12,173
Interest receivable                                 (175)        (107)     (383)
Group interest charge                              9,399        4,248    11,790
Share of joint venture's net interest              1,279            -         -
                                                  10,678        4,248    11,790





5      TAXATION

The effective rate of taxation of 28% reflects the benefits of capital
allowances claimed.





6      DIVIDENDS

The interim dividend of 1.95p (1999 interim: 1.85p) per share is payable on 10
April 2001 to shareholders on the register at 16 March 2001.  Dividends are
calculated on 121,085,930 (1999 interim: 120,559,542) ordinary shares in
issue.





7      EARNINGS/NET ASSETS PER SHARE

The weighted average number of shares in issue during the period was
121,060,413 (1999: 120,559,542) and the earnings attributable to ordinary
shares was £10,785,000 (1999: £8,227,000).  The earnings on ordinary
activities, excluding net profits on disposal of trading and investment
properties and the disposal of shares in subsidiary undertakings, comprise net
rental income less administration expenses less net interest payable and
attributable taxation and amounted to £3,989,000 (1999: £3,332,000).  The
number of shares in issue at 31 December 2000 was 121,085,930 (1999:
120,559,542) and the net assets attributable to shareholders at 31 December
2000 was £439,796,000 (1999: £360,422,000).



Diluted earnings per share reflect the potential exercise of conversion rights
relating to the 5.75% Convertible Unsecured Loan Stock 2013 ('CULS') and of
share options.  In calculating diluted earnings per share, earnings have been
adjusted to £11,813,000 (1999: £9,242,000) and the weighted average number of
shares increased to 137,645,300 (1999: 137,041,041).



Diluted net assets per share, reflecting the potential exercise of conversion
rights relating to the CULS, were 356.1p as at 31 December 2000 (1999:
299.0p), based on net assets of £489,087,000 (1999: £360,422,000) and shares
in issue of 137,340,117 (1999: 120,559,542).





8           FIXED ASSETS - TANGIBLE ASSETS

The freehold and leasehold investment properties are stated on the basis of
their open market values as at 31 December 2000.  The valuation was carried
out by DTZ Debenham Tie Leung Limited, Chartered Surveyors ('DTZ'), acting as
External Valuers and in accordance with the Appraisal and Valuation Manual of
the Royal Institution of Chartered Surveyors.  The open market values are
contained in the DTZ report dated 12 January 2001 with comparative figures as
at 31 December 1999 also so stated.  Additions and disposals are recognised
upon unconditional exchange of contracts provided that completion takes place
around 30 days thereafter.





9      JOINT VENTURE

                                                                          £'000
Share of net assets acquired                                             28,438
Surplus on revaluation of investment properties                           3,649
Share of profit for the period                                              267
Share of net assets as at 31 December 2000                               32,354



During the period the Group established a 50% partnership interest in
Benchmark JER 1 Limited Partnership, which operates in the United Kingdom.
The Group's share of that entity's results, assets and liabilities is as
follows:



Profit and loss account

Period from 18 October to 31 December 2000
                                                                          £'000
Operating profit                                                          1,660
Net interest payable                                                     (1,279)
Profit on ordinary activities before taxation                               381
Taxation                                                                   (114)
Retained profit for the period                                              267



Balance sheet

As at 31 December 2000
                                                                          £'000
Investment properties at valuation                                      114,665
Trading properties                                                       18,696
Cash                                                                      2,182
Other current assets                                                      1,317
Current liabilities                                                      (4,328)
Borrowings                                                             (100,178)
                                                                         32,354



10        DEBTORS

Included within debtors at 31 December 2000 are amounts totalling £28,605,000
representing the proceeds receivable from the sale of 27/28 Soho Square, W1
and the sale of 85% of the Group's interest in its serviced offices
subsidiary, Nexus Estates PLC.





11   PROVISIONS FOR LIABILITIES AND CHARGES

Provisions for liabilities and charges comprise deferred tax in respect of
short term timing differences.





12   RESERVES

                                       Share Revaluation    Other  Profit
                                     premium     reserve reserves     and Total
                                       £'000       £'000    £'000    loss £'000
                                                                  account
                                                                    £'000
As at 1 July 2000                    150,234     145,040       51 59,452 354,777
Premium on shares issued                  63           -        -      -      63
Share of surplus arising on
revaluation of investment properties       -      20,862        -      -  20,862
Revaluation surpluses realised on
investment property disposals              -    (19,333)        - 19,333     -
Tax on realisation of revaluation
surpluses on investment property           -           -        -(4,872) (4,872)
disposals
Retained profit for the period             -           -        -  8,423  8,423
As at 31 December 2000               150,297     146,569       51 82,336 379,253





13   NOTES TO THE CONSOLIDATED CASHFLOW STATEMENT



(a)      Reconciliation of operating profit to operating cash flows
                                                 Six months Six months  Year to
                                                         to         to   30 Jun
                                                  31 Dec 00  31 Dec 99       00
                                               (unaudited) (unaudited) (audited)

                                                      £'000      £'000    £'000
Operating profit                                     14,465     10,102   18,484
Depreciation                                            464        116      445
Profit on sale of trading properties                   (645)    (2,504)  (3,193)
Amortisation of leasehold properties                    400        216      464
Decrease/(increase) in debtors                        5,755     (2,208)  (8,013)
Increase in investments                                (166)          -        -
Increase in creditors                                   542      3,230    5,633
Net cash inflow before sales of and additions to
trading properties                                   20,815      8,952   13,820
Net cash inflow from sales of and additions to
trading properties                                    5,537      4,169    7,622
Net cash inflow from operating activities            26,352     13,121   21,442





(b)      Reconciliation of net cash flow to movement in net debt
                                   Six months to    Six months to       Year to
                                       31 Dec 00        31 Dec 99     30 Jun 00
                                     (unaudited)      (unaudited)     (audited)
                                           £'000            £'000         £'000
Increase in cash in the period            3,414            1,695         1,035
Cash inflow from increase in debt       (19,556)         (46,711)      (92,216)
Movement in net debt                    (16,142)         (45,016)      (91,181)
Net debt at start of period            (267,035)        (175,854)     (175,854)
Net debt at end of period              (283,177)        (220,870)     (267,035)



(c)      Analysis of net debt
                                            As at                         As at
                                        31 Dec 00        Cashflow     30 Jun 00
                                      (unaudited)     (unaudited)     (audited)
                                            £'000           £'000         £'000
Cash at bank and in hand                   4,731           3,414         1,317
Debt due within one year                        -         26,992       (26,992)
Debt due after more than one year       (287,908)        (46,548)     (241,360)
Net debt                                (283,177)        (16,142)     (267,035)





14   REPORT CIRCULATION

Copies of the interim report are available from the Company's Registered
Office at 25 Sackville Street, London, W1S  3EL.



                         

a d v e r t i s e m e n t