RNS No 3003m
CAPITAL AND REGIONAL PROPERTIES PLC
13 July 1999
1999 INTERIM RESULTS
Capital and Regional Properties plc, the specialist retail and leisure
property company, today announces its interim results for the six months
ended 24th June 1999.
Highlights
Fully diluted net assets per share increased by 8% over six months to
347p (December 1998: 321p) compared to 7% in the same period last year
Over twelve months the net assets per share increased by 20% (June 1998:
290p)
Net rental income up 43% to #21.8m (1998: #15.2m)
Profit on revenue activities up 58% to #5.7m (1998: #3.6m)
Earnings per share on revenue activities up 35% to 5.4p (1998: 4.0p)
Dividend per share up 33% to 2.0p (1998: 1.5p)
On a same store basis, that is property we owned at December 1998 through
to June 1999, capital growth of 2.2% was achieved in six months, compared
to 1.4% IPD's Monthly Index of Capital Value for All Property November
1998 to May 1999
Total trading and investment property acquisitions of #93.7m and
disposals of #27.9m. Refurbishment and development costs of #24.5m
Acquisition of Westway Cross Shopping Park, Greenford in February for
#33m. Recent major letting to Next, supporting our view that this will
become a leading fashion park
Unveiled re-branding of #60m Xscape, formerly Sports Village, retail and
entertainment destination in Milton Keynes. Progressing selective roll-out
of Xscape concept in Europe
Entered into a conditional agreement with Glasgow City Council to develop
a major 500,000 sq ft retail and leisure project adjacent to our
existing 100,000 sq ft Junction 10 Retail Park
Commenting on the results, Martin Barber, Chairman of Capital and Regional
said:
"Once again, these results demonstrate the value we are creating for
shareholders by Capital and Regional's partnership approach with its
tenants. We believe the innovative and dynamic management of our portfolio is
unique in the UK. The focus is on assisting our retailers to trade more
profitably and this strategy will sustain our strong growth."
For further information please contact:
Martin Barber, Chairman, Capital and Regional 0171 730 5565
Lynda Coral, Financial Director, Capital and Regional 0171 730 5565
Sarah Carrell, Corporate Communications, Capital and Regional 0171 730 5565
or 0585 059212
CHAIRMAN'S STATEMENT
RESULTS
I am pleased to report in the six months to 24th June 1999, fully diluted
net assets per share increased by 8% to 347p (December 1998: 321p) compared to
7% in the same period last year. Over twelve months the net assets per share
increased by 20% (June 1998: 290p).
Profit on revenue activities over the six months are up 58% to #5.7m
(1998:#3.6m) and net rental income has increased by 43% to #21.8m (1998:
#15.2m). Earnings per share on revenue activities of 5.4p (1998: 4.0p).
DIVIDEND
The Directors have resolved to pay an interim dividend of 2.0p (1998: 1.5p)
per share on 23rd August 1999 to shareholders on the register at the close
of business on 23rd July 1999.
I am pleased to inform you that the Company is offering shareholders a
service whereby you can use your cash dividends to buy more shares in the
Company at competitive dealing rates. A circular explaining this Dividend
Reinvestment Plan will be sent to all shareholders on 19th July 1999.
REVIEW OF ACTIVITIES
During the first half, we had a very active period and our portfolio
performed extremely well. On a same store basis, that is property we owned
at December 1998 through to June 1999, capital growth of 2.2% was achieved in
six months, compared to 1.4% IPD's Monthly Index of Capital Value for All
Property November 1998 to May 1999.
It is worth noting that our portfolio is highly reversionary. The
estimated rental value being approximately #14m higher than the #51m rents
passing as at 24th June 1999. This does not take into account the
significant expansion and development opportunities within the portfolio
outlined in this statement.
Trading and investment property acquisitions totalled #93.7m and we
completed disposals of #27.9m. Refurbishment and development costs were
#24.5m.
In February, we acquired Westway Cross Shopping Park in Greenford from Sears
for #33m and have subsequently let a major unit to Next, the fashion
retailer. During that month, we also acquired the PDFM interests in the
Easter Industrial portfolios for #28.3m and these portfolios have since been
rationalised with the sale of seven properties for #11m.
During June, we launched the re-branding of Xscape, formerly Sports Village,
in Milton Keynes, one of our most exciting developments to date. Costing
#60m,Xscape is a 550,000 sq ft integrated retail and entertainment
destination on schedule to open in May 2000. The project is a 50:50
partnership between Capital and Regional Properties and two funds
managed by PRICOA Property Investment Management, TransEuropean Property
Limited Partnership II and Hanover Property Unit Trust.
We are pleased to announce that the Company has entered into a
conditional agreement with Glasgow City Council to co-operate in the
development of a major retail and leisure project of approximately 500,000
sq ft adjacent to our existing Junction 10 Retail Park.
MARKET AND STRATEGY
Our confidence at the beginning of 1999 in both the investment and tenant
markets was justified as sentiment in both markets improved strongly.
Consumer confidence returned with retail sales improving. Our strategy is to
enable our properties to outperform the overall market through active
management, branding and improvement of the tenant mix. We continue to
explore the right opportunities where Capital and Regional can add value and
benefit from the economies of scale and close relationships with our tenants.
SHOPPING CENTRES
The first six months of 1999 has seen a high level of activity in all our
centres. Our management style is being vigorously applied to all of our
businesses. This includes tenancy restructuring and concept planning at The
Pallasades, Birmingham and Selborne Walk, Walthamstow; major regeneration at
Shopping City, Wood Green, London and the Howgate Centre, Falkirk with re-
branding at the Alhambra, Barnsley. Our tenants, shoppers, local authority
and other partners continue to respond well and support our energetic
management approach. In association with our Centre Managers, Capital and
Regional Facilities Management Limited (CRFM) continues to provide value for
money for our tenants through economies derived from utility and supplier bulk
purchasing.
At The Pallasades in Birmingham, the 27,500 sq ft JJB Sports flagship store is
open and trading successfully. In addition, lettings to Simply Internet, Time
Computers and Grinders Coffee have all been completed. Solicitors are
instructed on two further major lettings, which once concluded will yet again
establish a record rental level for the scheme. The development teams of
Railtrack and the Company continue to jointly progress scheme design for the
regeneration of New Street Station and the expansion of the retail provision.
An integral part of these discussions is the renegotiation of the present
ground lease. The teams are expected to finalise these proposals during the
Summer and launch the scheme by the end of the year. Work on site is expected
to commence by Spring 2001.
The Trinity Centre, Aberdeen, is now fully let with the last remaining unit
being taken by Clinton Cards who are upsizing within the scheme. The unit
they are vacating is under offer and when concluded will establish a rent
level more than double that passing at acquisition in 1993. The Centre's
continuing trading success is further reinforced by Ottakars expanding their
bookstore by an additional 20% within the first year of opening. Work is
underway to install the frontage canopy and branding which will be complete in
the Autumn.
Within the half year, lettings have been concluded at The Howgate Centre,
Falkirk, to Bodycare, Going Places, Olivers and MVC. We also purchased a long
leasehold interest within the scheme.
Work is underway on the remodelling of the Marks and Spencer's atrium, which
will extend and revitalise the Centre's catering offer and produce an
additional 6,000 sq ft of retail. In addition, a new Collection Cafe will be
introduced in the mall's central square, together with a new entrance canopy
and frontage branding. It is hoped that the refurbishment of the car park
will be completed prior to the year end.
In addition to introducing MVC to Falkirk, we were also able to provide them
with representation at The Alhambra Centre, Barnsley, letting almost 4,500 sq
ft. The first phase of re-branding and signage has been completed, with an
increase in footfall of almost 12% year on year being recorded.
The major regeneration of Shopping City, Wood Green, London, is now well
underway. Construction of the new market hall and major anchor store for
Wilkinsons is scheduled to complete in August. The twelve screen multiplex
cinema will be handed over to Cine UK for their fit-out at the end of the
year. Construction is also underway on the reconfiguration of the major Boots
store, as is the re-modelling works to the malls. Tenant interest in the
Centre is strong and discussions are underway with new retailers seeking
representation in Shopping City.
At the Sauchiehall Centre, Glasgow, planning consent for a major health and
fitness facility has been achieved and pre-let to Healthlands, who are shortly
to commence fitting out for opening in November. In addition, a letting to
Pocket Phone Shop has been concluded, together with the restructuring of a
lease to the Royal Bank of Scotland. Encouraged by pre-letting interest, we
are submitting a planning application for the reconfiguration of the Centre,
designed to focus value on prime Sauchiehall Street. Subject to consent, it is
hoped construction can commence during the first half of year 2000.
Selborne Walk, Walthamstow remains fully let. Our planning application to
integrate a multiplex-based leisure component plus the retail space has been
favourably considered by the local authority, whose formal notification is
anticipated during the Summer. Pre-letting discussions for the cinema and the
majority of the space are at an advanced stage.
We continue to explore the possibilities at Liberty 2, Romford, to improve
retail visibility by reconfiguring the central area space. This should
improve the prospects for letting the remaining units, presently obscured by
escalators and provide a contemporary catering offer. Negotiations continue
with the local authority and others on opportunities to improve the Centre's
critical mass.
At Eldon Garden, Newcastle, a major letting to the Pier of the remaining 7,000
sq ft of the former Debenhams space has been agreed. They are presently
fitting out and hope to trade in the Autumn. This letting necessitated the
relocation of Tribal within the Centre. The central catering offer has been
re-branded 'Cafe in the Garden' and Richard Sinton Jewellers has expanded
their retail space by an additional 30%.
RETAIL AND LEISURE PARKS
Progress on our major acquisition during the first half at Westway Cross
Shopping Park, Greenford, is encouraging. Since acquisition, we have let a
10,000 sq ft vacant unit to Next and are at an advanced stage of negotiation
for two further units. These lettings support our view that Westway Cross
will become a leading fashion park. New marketing initiatives, re-branding
and estate improvements are all underway.
Tenant demand for our other retail parks improved during the second quarter,
which has led to a number of lettings being agreed, which should be realised
during the second half of the year.
At Blythswood Retail Park, Glasgow, progress continues to be made on the next
phase, which could include up to 70,000 sq ft of further retail space. A re-
branding exercise is progressing well.
Refurbishment and reconfiguration works have commenced at Junction 10 Retail
Park, Glasgow, and marketing of the final unit will commence during the second
half.
We have entered into a conditional agreement with Glasgow City Council to co-
operate in the development of a major retail and leisure project of
approximately 500,000 sq ft adjacent to our existing 100,000 sq ft retail park
at Junction 10 of the M8. The proposed development will include a 170,000 sq
ft retail park, a 130,000 sq ft foodstore and a leisure park to include a
multiplex cinema, family entertainment centre, healthclub, hotel, restaurants
and bars. Our aim is to create a landmark development for Glasgow and
Scotland.
At Beckton Retail Park, London E6, we have exchanged an Agreement for Lease
with Matalan for up to 30,000 sq ft and a refurbishment, reconfiguration and
re-branding programme of this 170,000 sq ft park will commence during the
second half.
We have let a 10,000 sq ft unit to Poundstretcher at the Bognor Regis Retail
Park, subject to planning consent and the refurbished units let to Lidl and
Landmark are now open and trading well.
At the Lancaster Retail Park, letting negotiations are at an advanced stage in
respect of two units totalling 40,000 sq ft. Following completion of these
negotiations, works will commence on the extension and refurbishment of the
park.
Construction is progressing well at the Wyrley Brook Retail Park in Cannock
for the new B&Q and Kingsway stores, together with other estate improvements.
At the Channons Hill Retail Park, Bristol, a 10,000 sq ft unit has been let to
Dixons at a new market rent of #12.00 per sq ft and refurbishment works have
commenced.
At the Eureka Leisure Park, formerly Ashford Leisure Park, practical
completion of the first phase is anticipated in August. The second phase will
comprise a larger healthclub unit of 35,000 sq ft let to Stakis, a 60 bedroom
hotel and a 7,000 sq ft public house for Allied Domecq. Subject to obtaining
detailed planning consent, construction should commence on this phase in the
Autumn, with completion due in Summer 2000.
At the Cardiff International Sports Village, where we are the leading partner
in a development consortium, planning consent has been obtained, subject to
legal agreement. The proposed development will include a new sports arena and
swimming pool, 110,000 sq ft of retail and 100,000 sq ft of leisure floor
space, together with hotels, offices and residential. Pre-lets and pre-sales
for the major elements of the scheme are currently being sought.
Construction is well advanced at Xscape, formerly Sports Village, Milton
Keynes, and currently on budget and programme to complete in May 2000. The
new branding and marketing launch in early June has resulted in a further
three units being placed under offer. Following extensive research, the
company intends to selectively roll out the Xscape concept in Europe and two
potentially suitable sites have already been identified.
INDUSTRIAL
Continued positive progress has been made by Easter Group in the first
six months of the year and after a slow start, a number of lettings
within the investment portfolio have been concluded. After our recent
acquisition of the PDFM interests in the Easter Industrial portfolios for
#28.3m, these portfolios have been rationalised with the sale of seven
properties for #11m. This was followed by the acquisition of an industrial
estate near Chepstow for #6.2m.
Development trading activity continues to be buoyant with the sale of one
scheme and the completion of the letting at another.
FINANCIAL POSITION
The Company's borrowings at 24th June 1999 were #444.4m against #366.1m
at December 1998. Net cash balances were #6.4m (December 1998: #5.5m) and
the Company had approximately #78m (December 1998: #59.8m) of undrawn
secured facilities.
Net debt to capital employed has risen to 119% at the end of the first half
of 1999 compared to 107% at December 1998. Assuming the conversion of the
loan stock to equity net debt to capital employed was 106% at June 1999
(December 1998: 93%).
The weighted average interest rate cost of total borrowings at 24th June
1999 has reduced to 7.25% compared to 7.8% at the end of 1998. Rental income
as a ratio to net interest payable including capitalised interest was
maintained at the 1998 level of 1.6 times for the first half of 1999.
The market value of fixed rate debt instruments at 24th June 1999 on
a replacement basis and the expiry profile of the resulting fair value
adjustment is set out in note 12 of the accounts. The fair value adjustment
of #2.4m at 24th June 1999 has reduced from #11.1m at previous year
end representing approximately 0.5% (December 1998: 3%) of Company
borrowings. This has a notional adverse effect on net asset value per
share of 1.5p at 24th June 1999 that has reduced from 7p at December 1998
due to time expiry and increases in market interest rates.
YEAR 2000 UPDATE
As reported at the year end, the programme to ensure that any issues
arising from the 'Millennium Bug' is substantially completed. It is
anticipated that action identified to confirm Year 2000 compliance will be
implemented by 31st August 1999 and contingency plans to deal with
unforeseen failure will be in place.
OUTLOOK
Once again, these results demonstrate the value we are creating for
shareholders by Capital and Regional's partnership approach with its
tenants. We believe the innovative and dynamic management of our portfolio
is unique in the UK. The focus is on assisting our retailers to trade
more profitably and this strategy will sustain our strong growth.
We continue to seek actively opportunities where we can continue to add value
to previously under managed assets.
Martin Barber
Chairman
13th July 1999
CONSOLIDATED PROFIT AND LOSS ACCOUNT
(Unaud- (Unaud- (Audited)
ited) ited)
6 6 Year to
months months 25th
Notes to to December
24th 24th 1998
June June #000
1999 1998
#000 #000
Turnover: group rental income and
share of joint ventures' turnover 27,190 19,046 52,732
Less: share of joint ventures' (1,662) (875) (7,822)
turnover
Group rental income 25,528 18,171 44,910
Net property costs (3,716) (2,942) (6,403)
Net rental income 21,812 15,229 38,507
Profit on the sale of trading and 4 910 - 517
development properties
22,722 15,229 39,024
Administrative expenses (3,097) (2,295) (6,259)
19,625 12,934 32,765
Other operating income 468 629 669
Group operating profit 20,093 13,563 33,434
Share of operating profit in 18 621 1,473
joint ventures and associates
20,111 14,184 34,907
Income from listed investments 649 538 1,095
Interest receivable and similar 308 431 807
income
Interest payable and similar
charges 5 (15,366) (11,563) (25,290)
Profit on revenue activities 5,702 3,590 11,519
Profit/(loss) on sale of 4 893 (9) (38)
investment properties
Profit on ordinary activities 6,595 3,581 11,481
before taxation
Taxation 6 (149) (158) (347)
Profit on ordinary activities 6,446 3,423 11,134
after taxation
Equity minority interests (222) (56) (42)
Profit attributable to the 6,224 3,367 11,092
shareholders of the Company
Equity dividends paid and payable (1,965) (1,474) (4,176)
Profit retained in the period 4,259 1,893 6,916
Earnings per share 7 6.3 p 4.0 p 12.1 p
Earnings per share - diluted 7 6.3 p 3.9 p 12.1 p
Earnings per share on revenue 7 5.4 p 4.0 p 12.2 p
activities
CONSOLIDATED BALANCE SHEET
(Unaudi (Audited) (Unaudi
ted) ted)
As at As at As at
24th 25th 24th
Notes June December June
1999 1998 1998
#000 #000 #000
Fixed assets
Property assets 8 756,549 654,606 569,353
Other fixed assets 779 844 1,032
Tangible assets 757,328 655,450 570,385
Other investments 9 23,877 22,000 21,597
Investment in joint ventures
Share of gross assets 6,090 7,715 9,039
Share of gross liabilities (4,356) 5,448) (6,438)
1,734 2,267 2,601
Investment in associates 5 3,446 3,495
782,944 683,163 598,078
Current assets
Property assets 8 38,420 24,412 23,254
Debtors:
amounts falling due after 3,804 3,914 -
more than one year
amounts falling due within 17,716 18,802 28,925
one year
Cash at bank and in hand 6,404 5,476 356
66,344 52,604 52,535
Creditors: amounts falling due (38,935) (35,120) (29,124)
within one year
Net current assets 27,409 17,484 23,411
Total assets less current 810,353 700,647 621,489
liabilities
Creditors: amounts falling due
after more than one year
(including convertible unsecured
loan stock) (443,559) (364,480) (323,260)
Net assets 366,794 336,167 298,229
Capital and reserves
Called up share capital 9,826 9,826 9,826
Share premium account 161,863 161,863 161,869
Revaluation reserve 154,197 131,553 103,515
Other reserves 591 591 591
Profit and loss account 33,227 26,983 21,463
Equity shareholders' funds 359,704 330,816 297,264
Equity minority interests 3,090 2,101 965
Non-equity funding by joint 4,000 3,250 -
arrangement partners
Capital employed 366,794 336,167 298,229
Net assets per share adjusted for
minority interests 10 366.1 p 336.7 p 302.5 p
and non-equity funding
Net assets per share adjusted for
minority interests 10 346.7 p 320.6 p 290.2 p
and non-equity funding - diluted
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
(Unaudi (Unaudi (Audited)
ted) ted)
6 6 Year to
months months 25th
to to December
24th 24th 1998
June June #000
1999 1998
#000 #000
Share of unrealised surplus on 22,752 20,422 48,694
valuation of investment properties
Share of unrealised surplus on
valuation of investment properties - - 87
in joint ventures
Share of unrealised surplus on
valuation of investment properties - 168 113
in associates
Revaluation surplus/(deficit) on other 1,877 (1,383) (979)
investments
Tax on revaluation surpluses realised - - (165)
in year
24,629 19,207 47,750
Profit for the period attributable to 6,224 3,367 11,092
the shareholders of the Company
Total recognised gains and losses 30,853 22,574 58,842
relating to the period
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
(Unaudi (Unaudi (Audited)
ted) ted)
6 6 Year to
months months 25th
to to December
24th 24th 1998
June June #000
1999 1998
#000 #000
Profit for the period attributable to 6,224 3,367 11,092
the shareholders of the Company
Equity dividends paid and payable (1,965) (1,474) (4,176)
Profit retained in the period 4,259 1,893 6,916
Share capital and share premium issued - 59,133 59,128
in year (net of expenses)
Goodwill written off - (268) (277)
Other recognised gains and losses 24,629 19,207 47,750
relating to the period (see above)
Net addition to shareholders' funds 28,888 79,965 113,517
Opening shareholders' funds 330,816 217,299 217,299
Closing shareholders' funds 359,704 297,264 330,816
SUMMARY CASH FLOW STATEMENT
(Unaudit (Unaudit (Audited)
ed) ed)
6 months 6 months Year to
to to 25th
Notes 24th 24th December
June June 1998
1999 1998 #000
#000 #000
Net cash inflow from 11 25,536 12,965 31,303
operating activities
Dividends received from 300 313 3,526
joint ventures
Dividends received from 714 180 660
associates
Net cash outflow from
returns on investments (14,393) (9,611) (22,854)
and servicing of finance
12,157 3,847 12,635
Taxation (2) (366) (880)
Net operating cash flow 12,155 3,481 11,755
Capital expenditure and (85,371) (131,639) (176,204)
financial investment
(73,216) (128,158) (164,449)
Acquisitions and disposals - (665) (725)
(73,216) (128,823) (165,174)
Equity dividends paid (4,176) (1,910) (1,910)
Cash outflow before (77,392) (130,733) (167,084)
financing
Financing 78,319 121,860 163,331
Increase/(decrease) in cash 927 (8,873) (3,753)
in the period
Reconciliation of net cash flow to movement in net debt
(Unaudit (Unaudit (Audited)
ed) ed)
6 months 6 months Year to
to to 25th
24th 24th December
June June 1998
1999 1998 #000
#000 #000
Increase/(decrease) in cash in the 927 (8,873) (3,753)
period
Cash inflow from increase in debt (78,319) (63,017) (104,203)
financing
Change in net debt resulting from (77,392) (71,890) (107,956)
cash flows
Net debt at beginning of period (360,591) (252,635) (252,635)
Net debt at end of period (437,983) (324,525) (360,591)
Analysis of net debt
(Unaudit (Unaudit (Audited)
ed) ed)
6 months 6 months Year to
to to 25th
24th 24th December
June June 1998
1999 1998 #000
#000 #000
Cash in hand and at bank 6,404 356 5,476
Debt due within one year - (760) (760)
Debt due after one year (444,387) (324,121) (365,307)
(437,983) (324,525) (360,591)
NOTES TO THE ACCOUNTS
1. Accounting policies
The financial information included in the Interim Report comprises
consolidated profit and loss account and balance sheet, statement of total
recognised gains and losses, reconciliation of movement in shareholders' funds
and summary cash flow statement. These have been prepared in accordance with
the normal accounting policies of the Group, and do not constitute statutory
accounts.
2. Financial information and presentation
The financial information for the year to 25th December 1998 does not
constitute statutory accounts within the meaning of Section 240 of the
Companies Act 1985. It is extracted from the statutory accounts for that
year, on which the auditors Deloitte & Touche gave an unqualified report under
Section 236 of the Companies Act 1985 which did not contain a statement under
Section 237(2) or Section 237(4) of the Companies Act 1985. Statutory
accounts for the year ended 25th December 1998 have been delivered to the
Registrar of Companies. The financial information for the six months to 24th
June 1999 is unaudited and has not been reviewed by the Group's auditors.
3. Segmental analysis
Net
Profit on assets
Operating ordinary adjusted
Turnover profit activities for
#000 after before minority
interest taxation interests
#000 #000 #000
6 months ended 24th
June 1999
Continuing operations 25,528 5,289 6,182 335,942
- UK
Share of joint 1,662 (174) (174) 1,733
ventures - UK
27,190 5,115 6,008 337,675
Continuing operations - 587 587 22,029
- USA
27,190 5,702 6,595 359,704
6 months ended 24th
June 1998
Continuing operations 18,171 2,859 2,850 275,094
- UK
Share of joint 875 193 193 2,601
ventures - UK
19,046 3,052 3,043 277,695
Continuing operations - 538 538 19,569
- USA
19,046 3,590 3,581 297,264
Year ended 25th
December 1998
Continuing operations 40,375 5,286 5,202 308,104
- UK
Surrender premiums - 4,535 4,535 4,535 -
UK
Share of joint 7,822 628 674 2,267
ventures - UK
52,732 10,449 10,411 310,371
Continuing operations - 1,070 1,070 20,445
- USA
52,732 11,519 11,481 330,816
CONTINUED NOTES TO THE ACCOUNTS
4. Property sales
Fixed property Current property
assets assets
(Unaud (Unaud (Unaud (Unaud
ited) ited) ited) ited)
6 months 6 month 6 months 6 months
ended ended ended ended
24th June 24th 24th June 24th June
1999 June 1999 1998
#000 1998 #000 #000
#000
Net sale proceeds 15,523 37,070 12,347 -
Cost of sales (12,644) (36,553) (11,437) -
Historical cost profit 2,879 517 910 -
Revaluation surplus (1,986) (576) - -
Profit/(loss)
recognised on sale 893 (59) 910 -
of properties
Share of joint ventures
profit on sale of - 50 - -
investment properties
Profit/(loss)
recognised on sale of 893 (9) 910 -
properties
5. Interest payable and similar charges
(Unaudited) (Unaudited) (Audited)
6 months to Year to
6 months 24th June 25th December
to 1998 1998
24th June #000 #000
1999
#000
Bank loans and
overdrafts wholly 15,092 10,720 23,888
repayable within five
years
Other loans 876 868 1,752
15,968 11,588 25,640
Capitalised in period (732) (301) (856)
15,236 11,287 24,784
Share of joint ventures 98 143 237
interest payable
Share of associates 32 133 269
interest payable
15,366 11,563 25,290
6. Taxation
The taxation charge for the period has been estimated from the expected
taxable profits of the Group after taking account of losses brought forward
and capital allowances available.
7. Earnings per share
Earnings per share have been calculated on a weighted average of 98,255,271
Ordinary share of 10p each in issue during the period (year to 25th December
1998: 91,712,962, six months to 24th June 1998: 85,062,217) and have been
based on profit on ordinary activities after taxation and minority interests
of #6,224,000 (year to 25th December 1998: #11,092,000, six months to 24th
June 1998: #3,367,000).
Diluted earnings per share have been calculated after allowing for the
exercise of share options which have met the required exercise conditions and
the full conversion of the Convertible Unsecured Loan Stock, if the effect on
earnings per share is dilutive. The weighted average number of Ordinary
shares of 10p each is 98,546,290 (year to 25th December 1998: 92,048,812, six
months to 24th June 1998: 85,436,677) and the relevant earnings are #6,224,000
(year to 25th December 1998: #11,092,000, six months to 24th June 1998:
#3,367,000).
CONTINUED NOTES TO THE ACCOUNTS
Earnings per share on revenue activities exclude the profit on the sale of
investment properties and investments, and associated tax charge and minority
interests thereon, of #890,000 (year to 25th December 1998 loss: #132,000, six
months to 24th June 1998 loss: #9,000).
8. Property assets
Properties Total Current
Investm fixed property
Cost or valuation ent under property assets
propert construct assets #000
ies ion* #000
#000 #000
At beginning of 646,932 7,674 654,606 24,412
period
Acquisitions 73,328 - 73,328 20,395
Refurbishment and 12,979 6,681 19,660 4,787
development
Disposals (14,630) - (14,630) (11,174)
Revaluation 19,893 3,692 23,585 -
At end of period 738,502 18,047 756,549 38,420
The fixed property assets were valued at 24th June 1999, as follows:
DTZ Debenham Thorpe Open market value 630,660
Open market value -
properties under 18,047
construction*
Richard Ellis St. Quintin Open market value 107,234
Directors Open market value 420
Directors Cost 188
756,549
Valuations are at open market value as defined in the Appraisal and Valuation
Manual of The Royal Institution of Chartered Surveyors.
*The valuation reflects the Group's effective interest in properties under
construction
9. Other investments
The investment in the shares held in CenterPoint Properties Trust is included
in the balance sheet at 24th June 1999 at the market value at that date of
$34.69 per share translated into sterling at the rate of exchange at 24th June
1999 of $1.59 to the #. The effect of the increase since the last balance
sheet date in the share price as quoted on the New York Stock Exchange has
been recognised in the period by a transfer to reserves.
10. Net assets per share
Net assets per share have been calculated on 98,255,271 Ordinary shares of 10p
each and have been based on net assets attributable to shareholders of
#359,704,000 (25th December 1998: #330,816,000, 24th June 1998: #297,264,000).
Diluted net assets per share assumes that all of the Convertible Unsecured
Loan Stock ("CULS") had been converted at the balance sheet date. Diluted net
assets per share have been calculated on 110,667,442 Ordinary share of 10p
each and have been based on adjusted net assets attributable to shareholders
of #383,699,000 (25th December 1998: #354,766,000, 24th June 1998:
#321,168,000) by adding the #23,995,000 (25th December 1998: #23,950,000, 24th
June 1998; #23,904,000) balance sheet value of the CULS.
CONTINUED NOTES TO THE ACCOUNTS
11. Reconciliation of Net cash inflow from operating activities
(Unaudi (Unaudit (Audited)
ted) ed) Year to
6 6 months 25th
months to December
to 24th 1998
24th June #000
June 1998
1999 #000
#000
Group operating profit 20,093 13,563 33,434
Profit on sale of trading and (910) - (517)
development properties
19,183 13,563 32,917
Depreciation 222 267 569
Loss/(profit) on disposal of fixed 3 (28) 113
assets
Amortisation of goodwill arising
on acquisition of joint venture - - 5
Decrease/(increase) in trade
debtors, other debtors and 97 (1,961) (5,305)
prepayments
Increase in trade creditors, other
creditors, taxation and 6,031 1,124 3,004
social security and accruals
Net cash flow from operating 25,536 12,965 31,303
activities
12. Debt Valuation
The table below shows the market value of fixed rate debt instruments, and
reflects the difference between the interest rate yield curve as at 24th June
1999 and the rates historically committed; namely the fair value adjustment.
Book Notional Market Fair
Value principal value value
#000 #000 #000 adjustment
#000
Convertible Unsecured Loan 24,642 n/a 24,642 -
Stock
Bank borrowings 15,250 n/a 15,624 374
Interest rate swaps n/a 254,961 257,099 2,138
39,892 254,961 297,365 2,512
Minority interests 94
Fair Value Adjustment 2,418
attributable to the Group
Net of tax at 30% 1,693
The expiry profile of the fair value adjustment is as follows:
Fair % of
value total
Adjustment
#000
1999 (six months) 2,017 80%
2000 1,621 65%
2001 (325) (13%)
2002 (519) (21%)
2003 (282) (11%)
Total 2,512 100%
13. Copies of the Interim Report
Copies of the Interim Report are available from the Company's registered
office at 22 Grosvenor Gardens, London SW1W ODH. Copies are also available
through the FT Free Annual Reports Services, details of which can be found in
the London Share Service pages of the Financial Times.
END
IR FLFLFKDKEBKQ
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