TIDMHCFT
RNS Number : 7842P
Highcroft Investments PLC
22 August 2014
22 August 2014
Highcroft Investments PLC
Interim Report for the six months ended 30 June 2014
Key highlights
-- Net rental income increased 17% to GBP1,412,000 (2013 GBP1,206,000)
-- Operating profit from revenue activities up 88% to GBP2,143,000 (2013 GBP1,139,000)
-- Total earnings per share rose 167% to 85.7p (2013 32.0p)
-- Realised gains on investment property of GBP736,000 (2013 GBPnil)
-- Net valuation gains on investment property of GBP2,435,000 (2013 GBP15,000)
-- Net assets per share of 886p (June 2013 770p, Dec 2013 821p)
-- Interim property income distribution up 6% to 13.25p (2013 12.50p)
-- Since the period end a freehold retail warehouse has been
purchased for GBP3,125,000 net of costs
Dear Shareholder,
I am pleased to report that in the six months ended 30 June
2014, rental income, operating profits and net asset value have all
increased. In recognition of this, we are continuing our
long-established policy of raising dividends ahead of
inflation.
Results for the period
Property: Gross rental income has risen by 18% and net rental
income by 17%. These increases result primarily from the rental
income from our Bicester and Cardiff properties purchased in the
second half of 2013, net of the rental income foregone from the
sale of our Reigate and Petersfield properties at the end of 2013
and our Bristol property in April 2014. Property expenses continued
to remain low as there were only a small number of lease events in
progress. We have no void units and are actively managing lease
events to minimise costs and voids and maximise yield. During the
period we sold our multi-let office building in Bristol for a gain
of GBP742,000 on the year-end valuation and one vacant residential
unit for a loss of GBP4,000 on the year-end valuation. Our period
end valuation showed a gain of 6% on a like for like basis. This
arose from lease events together with an improving market and is a
reflection of the strength and quality of our portfolio. After the
period end there have been a number of property transactions. We
completed the purchase of a freehold retail warehouse in Ash Vale,
Aldershot, let to Buildspan, for a consideration of GBP3,125,000
net of costs. The initial yield, lease length and good covenant
enhances and complements our portfolio. We completed the sale of
our Beckenham property that was sold at auction in July for a
consideration of GBP1,000,000, an uplift of GBP150,000 on the
year-end valuation. In addition we sold the ground rental income on
two residential properties for GBP51,000.
Equities: Dividend income from our equity portfolio increased to
GBP154,000 (2013 GBP110,000) due to the effect of a one-off special
income distribution of GBP64,000 arising from the demerger of our
Vodafone holding. We have made no disposals from our equity
portfolio during the period and have made modest purchases
totalling GBP51,000. The net loss on valuation of GBP63,000 in the
half year is a reflection of the market remaining at the same level
at the beginning and end of the period coupled with the effect of
the Vodafone demerger. After the period end we have disposed of a
small proportion of our equities realising GBP302,000.
Financial: Total earnings per share rose by 167% to 85.7p (2013
32.0p). This increase resulted from the growth in net rental income
of GBP206,000 coupled with the realised gains on investment
property of GBP736,000 (2013 GBPnil) and the net valuation gains on
investment property of GBP2,435,000 (2013 GBP15,000).
The cash position at 30 June 2014 increased to GBP5,863,000
(2013 GBP4,586,000) partially due to the sale of properties
referred to above. Since the period end this has been augmented by
the proceeds of the disposal of Beckenham and reduced by the
purchase of our Ash Vale, Aldershot property for GBP3,125,000 net
of costs. We have taken no new borrowings and our medium term loans
total GBP4,000,000.
At the date of this report our cash balance is GBP3,700,000.
Dividend
I am pleased to report that we will be paying an interim
property income distribution of 13.25p (2013 12.50p) per share,
payable on 17 October 2014 to shareholders registered on 19
September 2014.
Outlook
As a consequence of our post period end property transactions we
expect to be able to report an increase in gross rental income in
the second half of our financial year. Profits on capital
activities are likely to moderate in the second half of the year,
as the growth in commercial property valuations is unlikely to
continue at the same rate as witnessed in the first six months of
the year.
After the sharp rise in activity and prices in the commercial
property market over the last 12 months, we anticipate that there
may now be something of a pause in the light of economic and
political uncertainties. Given our financial strength (cash, liquid
equity holdings and low gearing levels) we hope this will provide
further opportunity for us to continue to improve the quality,
lease profile and yield of our property portfolio. While we remain
cautious about the outlook for medium term interest rates, suitable
buying opportunities may lead us to alter the equity/property
balance and to consider other forms of financing including
increasing gearing.
John Hewitt
Chairman
22 August 2014
For further information, contact:
Highcroft Investments PLC
John Hewitt/Roberta Miles 01865 840023
Charles Stanley Securities
Dugald Carlean / Karri Vuori 0207 149 6000
Condensed consolidated interim statement of comprehensive income
(unaudited)
for the six months ended 30 June 2014
Unaudited Unaudited Audited
---------------------- ---- ---------------------------- ---------------------------- ----------------------------
First half 2014 First half 2013 Full year 2013
---------------------- ---- ---------------------------- ---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Continuing operations
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Gross rental income 1,482 - 1,482 1,258 - 1,258 2,731 - 2,731
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Property operating
expenses (70) - (70) (52) - (52) (151) - (151)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net rental income 1,412 - 1,412 1,206 - 1,206 2,580 - 2,580
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Realised gains on
investment property 736 - 736 - - - 415 - 415
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Realised losses on
investment property - - - - - - - - -
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net gain on disposal
of investment
property 736 - 736 - - - 415 - 415
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Valuation gains on
investment property - 2,585 2,585 - 335 335 - 1,833 1,833
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Valuation losses on
investment property - (150) (150) - (320) (320) - (590) (590)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net valuation gains
on investment
property - 2,435 2,435 - 15 15 - 1,243 1,243
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Dividend income 154 - 154 110 - 110 234 - 234
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Gains on investments - 236 236 - 568 568 - 832 832
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Losses on investments - (299) (299) - (132) (132) - (63) (63)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net investment
income/(loss) 154 (63) 91 110 436 546 234 769 1,003
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Administrative
expenses (159) - (159) (177) - (177) (345) - (345)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Operating profit
before
net financing costs 2,143 2,372 4,515 1,139 451 1,590 2,884 2,012 4,896
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Finance income 6 - 6 5 - 5 7 - 7
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Finance expenses (88) - (88) - - - (61) - (61)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net finance costs (82) - (82) 5 - 5 (54) - (54)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit before tax 2,061 2,372 4,433 1,144 451 1,595 2,830 2,012 4,842
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Income tax
(expense)/credit 4 - (5) (5) 88 (29) 59 91 (77) 14
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total profit and
comprehensive
income for the
financial
period 2,061 2,367 4,428 1,232 422 1,654 2,921 1,935 4,856
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Basic and diluted
earnings
per share 6 39.9p 45.8p 85.7p 23.9p 8.1p 32.0p 56.5p 37.5p 94.0p
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Condensed consolidated interim statement of financial
position (unaudited)
as at 30 June 2014
Unaudited Unaudited Audited
30 June 30 June 31 December
2014 2013 2013
Note GBP'000 GBP'000 GBP'000
-------------------------------------- ---- --------- --------- ------------
Assets
-------------------------------------- ---- --------- --------- ------------
Investment property 7 40,076 31,624 39,415
-------------------------------------- ---- --------- --------- ------------
Equity investments 8 5,216 4,872 5,227
-------------------------------------- ---- --------- --------- ------------
Total non-current assets 45,292 36,496 44,642
-------------------------------------- ---- --------- --------- ------------
Current assets
-------------------------------------- ---- --------- --------- ------------
Trade and other receivables 390 369 422
-------------------------------------- ---- --------- --------- ------------
Cash at bank and in hand 5,863 4,586 3,128
-------------------------------------- ---- --------- --------- ------------
Total current assets 6,253 4,955 3,550
-------------------------------------- ---- --------- --------- ------------
Total assets 51,545 41,451 48,192
-------------------------------------- ---- --------- --------- ------------
Liabilities
-------------------------------------- ---- --------- --------- ------------
Current liabilities
-------------------------------------- ---- --------- --------- ------------
Current corporation tax 5 - -
-------------------------------------- ---- --------- --------- ------------
Trade and other payables 1,178 1,019 1,160
-------------------------------------- ---- --------- --------- ------------
Total current liabilities 1,183 1,019 1,160
-------------------------------------- ---- --------- --------- ------------
Non-current liabilities
-------------------------------------- ---- --------- --------- ------------
Interest-bearing loans and borrowings 9 4,000 - 4,000
-------------------------------------- ---- --------- --------- ------------
Deferred tax liabilities 604 560 604
-------------------------------------- ---- --------- --------- ------------
Total non-current liabilities 4,604 560 4,604
-------------------------------------- ---- --------- --------- ------------
Total liabilities 5,787 1,579 5,764
-------------------------------------- ---- --------- --------- ------------
Net assets 45,758 39,872 42,428
-------------------------------------- ---- --------- --------- ------------
Equity
-------------------------------------- ---- --------- --------- ------------
Issued share capital 1,292 1,292 1,292
-------------------------------------- ---- --------- --------- ------------
Revaluation reserve - property 9,938 7,265 7,353
-------------------------------------- ---- --------- --------- ------------
Revaluation reserve - other 1,932 1,704 1,972
-------------------------------------- ---- --------- --------- ------------
Capital redemption reserve 95 95 95
-------------------------------------- ---- --------- --------- ------------
Realised capital reserve 24,220 22,829 24,220
-------------------------------------- ---- --------- --------- ------------
Retained earnings 8,281 6,687 7,496
-------------------------------------- ---- --------- --------- ------------
Total equity 45,758 39,872 42,428
-------------------------------------- ---- --------- --------- ------------
Condensed consolidated interim statement of
changes in equity
for the six months ended 30 June 2014
a) First half 2014 - Unaudited
Revaluation reserves
---------------------------------- -------- -------------------------- ----------- -------- --------- --------
Capital Realised Retained
Equity Property Other redemption capital earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
At 1 January 2014 1,292 7,353 1,972 95 24,220 7,496 42,428
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Dividends - - - - - (1,098) (1,098)
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Reserve transfers:
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Non-distributable items
recognised in income
statement:
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Revaluation gains and
losses - 2,435 (63) - - (2,372) -
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Tax on revaluation gains/(losses) - - - - - - -
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Realised gains - - - - - - -
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
(Surplus)/deficit attributable
to assets sold - - - - - - -
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Excess of cost over
revalued amount taken
to retained earnings - 150 23 - - (173) -
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Transactions with owners - 2,585 (40) - - (3,643) (1,098)
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Profit and total comprehensive
income for the period - - - - - 4,428 4,428
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
At 30 June 2014 1,292 9,938 1,932 95 24,220 8,281 45,758
---------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
b) First half 2013 - Unaudited
Revaluation reserves
------------------------------- -------- -------------------------- ----------- -------- --------- --------
Capital Realised Retained
Equity Property Other redemption capital earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
At 1 January 2013 1,292 7,050 1,746 95 22,366 6,692 39,241
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Dividends - - - - - (1,023) (1,023)
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Reserve transfers:
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Non-distributable items
recognised in income
statement:
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Revaluation gains/(losses) - 15 267 - - (282) -
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Tax on revaluation gains
and losses - - - - - - -
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Realised gains - - - - 130 (130) -
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
(Surplus)/deficit attributable
to assets sold - - (333) - 333 - -
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Excess of cost over
revalued amount taken
to retained earnings - 200 24 - - (224) -
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Transactions with owners - 215 (42) - 463 (1,659) (1,023)
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Profit and total comprehensive
income for the period - - - - - 1,654 1,654
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
At 30 June 2013 1,292 7,265 1,704 95 22,829 6,687 39,872
------------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Condensed consolidated interim statement of
changes in equity continued
for the six months ended 30 June 2014
c) Full year 2013 - Audited
Revaluation
reserves
------------------------------- -------- --------------------- ----------- -------- --------- --------
Capital Realised Retained
Equity Property Other redemption capital earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
At 1 January 2013 1,292 7,050 1,746 95 22,366 6,692 39,241
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
Dividends - - - - - (1,669) (1,669)
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
Reserve transfers:
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
Non-distributable items
recognised in income
statement:
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
Revaluation gains - 1,243 610 - - (1,853) -
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
Tax on revaluation gains
and losses - - (43) - - 43 -
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
Realised gains - - - - 527 (527) -
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
(Surplus)/deficit attributable
to assets sold - (986) (341) - 1,327 - -
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
Excess of cost over
revalued amount taken
to retained earnings - 46 - - - (46) -
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
Transactions with owners - 303 226 - 1,854 (4,052) (1,669)
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
Profit and total comprehensive
income for the period - - - - - 4,856 4,856
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
At 31 December 2013 1,292 7,353 1,972 95 24,220 7,496 42,428
------------------------------- -------- ---------- --------- ----------- -------- --------- --------
Condensed consolidated interim statement
of cash flows
for the six months ended 30 June 2014
Unaudited Unaudited
First First Audited
half half Full year
2014 2013 2013
GBP'000 GBP'000 GBP'000
---------------------------------------------------------- --------- --------- ----------
Operating activities
---------------------------------------------------------- --------- --------- ----------
Profit for the period 4,428 1,654 4,856
---------------------------------------------------------- --------- --------- ----------
Adjustments for:
---------------------------------------------------------- --------- --------- ----------
Net valuation gains on investment property (2,435) (15) (1,243)
---------------------------------------------------------- --------- --------- ----------
Gain on disposal of investment property (736) - (415)
---------------------------------------------------------- --------- --------- ----------
Net losses/(gains) on investments 63 (436) (769)
---------------------------------------------------------- --------- --------- ----------
Finance income (6) (5) (7)
---------------------------------------------------------- --------- --------- ----------
Finance expense 88 - 61
---------------------------------------------------------- --------- --------- ----------
Income tax expense/(credit) 5 (59) (14)
---------------------------------------------------------- --------- --------- ----------
Operating cash flow before changes in working
capital and provisions 1,407 1,139 2,469
---------------------------------------------------------- --------- --------- ----------
Increase in trade and other receivables 32 (115) (168)
---------------------------------------------------------- --------- --------- ----------
Increase in trade and other payables 18 19 126
---------------------------------------------------------- --------- --------- ----------
Cash generated from operations 1,457 1,043 2,427
---------------------------------------------------------- --------- --------- ----------
Finance income 6 5 7
---------------------------------------------------------- --------- --------- ----------
Finance expense (88) - (27)
---------------------------------------------------------- --------- --------- ----------
Income tax received - 10 7
---------------------------------------------------------- --------- --------- ----------
Net cash flows from operating activities 1,375 1,058 2,414
---------------------------------------------------------- --------- --------- ----------
Investing activities
---------------------------------------------------------- --------- --------- ----------
Purchase of fixed assets - investment property - - (8,488)
---------------------------------------------------------- --------- --------- ----------
- equity investments (52) (20) (125)
---------------------------------------------------------- --------- --------- ----------
Sale of fixed assets - investment property 2,510 - 2,340
---------------------------------------------------------- --------- --------- ----------
- equity investments - 1,297 1,382
---------------------------------------------------------- --------- --------- ----------
Net cash flows from investing activities 2,458 1,277 (4,891)
---------------------------------------------------------- --------- --------- ----------
Financing activities
---------------------------------------------------------- --------- --------- ----------
New bank borrowings - - 4,000
---------------------------------------------------------- --------- --------- ----------
Dividends paid (1,098) (1,023) (1,669)
---------------------------------------------------------- --------- --------- ----------
Net cash flows from financing activities (1,098) (1,023) 2,331
---------------------------------------------------------- --------- --------- ----------
Net increase/(decrease) in cash and cash equivalents 2,735 1,312 (146)
---------------------------------------------------------- --------- --------- ----------
Cash and cash equivalents at 1 January 2014 3,128 3,274 3,274
---------------------------------------------------------- --------- --------- ----------
Cash and cash equivalents at 30 June 2014 5,863 4,586 3,128
---------------------------------------------------------- --------- --------- ----------
Notes (Unaudited)
for the six months ended 30 June 2014
1. Nature of operations and general information
Highcroft Investments PLC ('Highcroft') and its subsidiary's
(together 'the group') principal activities are investment in
property and equities. It is incorporated and domiciled in Great
Britain. The address of Highcroft Investments PLC's registered
office, which is also its principal place of business, is Thomas
House, Langford Locks, Kidlington, OX5 1HR. Highcroft's condensed
consolidated interim financial statements are presented in Pounds
Sterling (GBP), which is also the functional currency of the group.
These condensed consolidated interim financial statements have been
approved for issue by the directors on 21 August 2014. The
financial information for the period ended 30 June 2014 set out in
this interim report does not constitute statutory accounts as
defined in Section 404 of the Companies Act 2006. The group's
statutory financial statements for the year ended 31 December 2013
have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unqualified and did not
contain statements under Section 498(2) or Section 498(5) of the
Companies Act 2006.
2. Basis of preparation
These condensed consolidated interim financial statements are
for the six months ended 30 June 2014. They have been prepared in
accordance with IAS 34, Interim Financial Reporting. They do not
include all of the information required for full annual financial
statements, and should be read in conjunction with the consolidated
financial statements of the group for the year ended 31 December
2013.
These condensed consolidated interim financial statements have
been prepared under the historical cost convention, as modified by
the revaluation of investment properties and the measurement of
equity investments at fair value. These condensed consolidated
interim financial statements have been prepared in accordance with
the accounting policies adopted in the last annual financial
statements for the year to 31 December 2013.
The accounting policies have been applied consistently
throughout the group for the purposes of preparation of these
condensed consolidated interim financial statements.
3. Segment reporting
Segmental information is presented in the condensed consolidated
interim financial statements in respect of the group's business
segments. The business segment reporting format reflects the
group's management and internal reporting structure. Segment
results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. All gross income
is from external tenants or external investments.
The group is comprised of the following main business
segments:
Commercial property comprising retail outlets, offices,
warehouses and retail warehouses.
Residential property comprising single and multi-let houses and
a multi-occupied block of flats.
Financial assets comprising exchange-traded equity
investments.
3. Segment reporting continued
First First
half half Full year
2014 2013 2013
GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- ---------
Commercial property
----------------------------- -------- -------- ---------
Gross income 1,461 1,237 2,691
----------------------------- -------- -------- ---------
Profit/(loss) for the period 4,209 917 3,633
----------------------------- -------- -------- ---------
Assets 44,924 35,172 41,397
----------------------------- -------- -------- ---------
Liabilities 4,963 818 5,012
----------------------------- -------- -------- ---------
Residential property
----------------------------- -------- -------- ---------
Gross income 21 21 40
----------------------------- -------- -------- ---------
Profit for the period 148 148 236
----------------------------- -------- -------- ---------
Assets 1,401 1,402 1,482
----------------------------- -------- -------- ---------
Liabilities 2 2 -
----------------------------- -------- -------- ---------
Financial assets
----------------------------- -------- -------- ---------
Gross income 154 110 233
----------------------------- -------- -------- ---------
Profit/(loss) for the period 70 589 987
----------------------------- -------- -------- ---------
Assets 5,220 4,877 5,313
----------------------------- -------- -------- ---------
Liabilities 813 759 751
----------------------------- -------- -------- ---------
Total
----------------------------- -------- -------- ---------
Gross income 1,636 1,368 2,964
----------------------------- -------- -------- ---------
Profit for the period 4,427 1,654 4,856
----------------------------- -------- -------- ---------
Assets 51,545 41,451 48,192
----------------------------- -------- -------- ---------
Liabilities 5,778 1,579 5,763
----------------------------- -------- -------- ---------
No tenant represented more than 10% of gross commercial property
income.
4. Income tax expense/(credit)
First First
half half Full year
2014 2013 2013
GBP'000 GBP'000 GBP'000
--------------------------------- -------- -------- ---------
Current tax:
--------------------------------- -------- -------- ---------
On revenue profits - (88) (82)
--------------------------------- -------- -------- ---------
On capital profits - 87 34
--------------------------------- -------- -------- ---------
Prior year under/(over)provision 5 (9) (9)
--------------------------------- -------- -------- ---------
5 (10) (57)
--------------------------------- -------- -------- ---------
Deferred tax - (49) 43
--------------------------------- -------- -------- ---------
5 (59) (14)
--------------------------------- -------- -------- ---------
The taxation charge has been based on the estimated effective
tax rate for the full year. As a Real Estate Investment Trust the
group does not pay corporation tax on its profits and gains from
its commercial and residential property activities.
5. Dividends
On 22 August 2014, the directors declared a property income
dividend of 13.25p per share (2013 12.50p interim dividend) payable
on 17 October 2014 to shareholders registered at 19 September
2014.
The following property income distributions have been paid by
the company:
First First
half half Full year
2014 2013 2013
GBP'000 GBP'000 GBP'000
-------------------------------------------- -------- -------- ---------
2013 final: 21.25p per ordinary share (2012
final 19.8p) 1,098 1,023 1,023
-------------------------------------------- -------- -------- ---------
2013 interim: 12.5p per ordinary share - - 646
-------------------------------------------- -------- -------- ---------
1,098 1,023 1,669
-------------------------------------------- -------- -------- ---------
6. Earnings per share
The calculation of earnings per share is based on the profit for
the period of GBP4,428,000 (2013 GBP1,654,000) and on 5,167,240
shares (2013 5,167,240) which is the weighted average number of
shares in issue during the period ended
30 June 2014 and throughout the period since 1 January 2013.
In order to draw attention to the impact of valuation gains and
losses which are included in the income statement but not available
for distribution under the company's articles of association, an
adjusted earnings per share based on the profit available for
distribution of GBP2,061,000 (2013 GBP1,232,000) has been
calculated.
First First
half half Full year
2014 2013 2013
GBP'000 GBP'000 GBP'000
--------------------------------------------- -------- -------- ---------
Earnings:
--------------------------------------------- -------- -------- ---------
Basic earnings 4,428 1,654 4,856
--------------------------------------------- -------- -------- ---------
Adjustments for:
--------------------------------------------- -------- -------- ---------
Net valuation profits on investment property (2,435) (15) (1,243)
--------------------------------------------- -------- -------- ---------
Gains and losses on investments 63 (436) (769)
--------------------------------------------- -------- -------- ---------
Income tax on gains and losses 5 29 77
--------------------------------------------- -------- -------- ---------
Adjusted earnings 2,061 1,232 2,921
--------------------------------------------- -------- -------- ---------
Per share amount:
--------------------------------------------- -------- -------- ---------
Basic earnings per share 85.7p 32.0p 94.0p
--------------------------------------------- -------- -------- ---------
Adjustments for:
--------------------------------------------- -------- -------- ---------
Net valuation gains on investment property (47.1)p (0.3)p (24.1)p
--------------------------------------------- -------- -------- ---------
Gains and losses on investments 1.2p (8.4)p (14.9)p
--------------------------------------------- -------- -------- ---------
Income tax on gains and losses 0.1p 0.6p 1.5p
--------------------------------------------- -------- -------- ---------
Adjusted earnings per share 39.9p 23.9p 56.5p
--------------------------------------------- -------- -------- ---------
7. Investment property
First First
half half Full year
2014 2013 2013
GBP'000 GBP'000 GBP'000
============================ ======== ======== =========
Valuation at 1 January 2014 39,415 31,609 31,609
---------------------------- -------- -------- ---------
Additions - - 8,488
---------------------------- -------- -------- ---------
Disposals (1,775) - (1,925)
---------------------------- -------- -------- ---------
Gain on revaluation 2,436 15 1,243
============================ ======== ======== =========
Valuation at 30 June 2014 40,076 31,624 39,415
============================ ======== ======== =========
The directors have used an external independent valuation of
properties at 30 June 2014 which has been carried out consistently
with the annual valuation.
8. Equity investments
First First
half half Full year
2014 2013 2013
GBP'000 GBP'000 GBP'000
=========================================== ======== ======== =========
Valuation at 1 January 2014 5,227 5,713 5,713
------------------------------------------- -------- -------- ---------
Additions 52 20 127
------------------------------------------- -------- -------- ---------
Disposals - (1,128) (1,236)
------------------------------------------- -------- -------- ---------
(Deficit)/surplus on revaluation in excess
of cost (40) 291 610
------------------------------------------- -------- -------- ---------
Revaluation decrease below cost (25) (24) (4)
------------------------------------------- -------- -------- ---------
Revaluation increase still below cost 2 - 17
=========================================== ======== ======== =========
Valuation at 30 June 2014 5,216 4,872 5,227
=========================================== ======== ======== =========
9. Interest bearing loans
First First
half half Full year
2014 2013 2013
GBP'000 GBP'000 GBP'000
============================================ ======== ======== =========
Medium term loans 4,000 - 4,000
============================================ ======== ======== =========
The medium term bank loans comprise amounts
falling due as follows:
-------------------------------------------- -------- -------- ---------
Over five years 4,000 - 4,000
============================================ ======== ======== =========
10. Related party transactions
Kingerlee Holdings Limited owns, through its wholly owned
subsidiaries, 25.5% (2013 25.4%) of the company's shares and D H
Kingerlee is a director of both the company and Kingerlee Holdings
Limited.
During the period, the group made purchases from Kingerlee
Holdings Limited or its subsidiaries, being a service charge in
relation to services at Thomas House, Kidlington of GBP7,000 (2013
GBP7,000). The amount owed at 30 June 2014 was nil (2013 nil). All
transactions were undertaken on an arm's length basis.
11. Events after the reporting date
On 21 July 2014 the group exchanged and completed on the
purchase of a freehold warehouse investment in Ash Vale, Aldershot.
The property comprises a warehouse constructed in 2001 and provides
approximately 24,853 sq ft on a site of 1.5 acres (0.61 hectares)
representing a site cover of 35%. The property is let in its
entirety to Buildspan Limited, a wholly owned subsidiary of
Sheffield Insulation Group, for a term of years expiring in 2027 at
a current rent of GBP225,000 per annum. The purchase price was
GBP3,125,000 representing a net yield of 6.8%. The acquisition was
made from cash resources.
On 31 July 2014 the group completed on the sale of its Beckenham
property for GBP1,000,000, an uplift of GBP150,000 on the year-end
valuation.
In addition, after the period end the ground rental income on
two residential properties has been sold for a total consideration
of GBP51,000.
12. Net assets per share
First First
half half Full year
2014 2013 2013
=========================== ============= ============= =============
Net assets GBP45,758,000 GBP39,872,000 GBP42,428,000
--------------------------- ------------- ------------- -------------
Ordinary shares in issue 5,167,240 5,167,240 5,167,240
--------------------------- ------------- ------------- -------------
Basic net assets per share 886p 770p 821p
=========================== ============= ============= =============
Statement of directors' responsibilities
The directors confirm that, to the best of their knowledge, this
condensed consolidated set of half-year financial statements has
been prepared in accordance with IAS 34. The half-year management
report includes a fair review of the information required by 4.2.7
and 4.2.8 of the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority, namely:
-- an indication of the important events that have occurred
during the first six months of the financial year ending 31
December 2014 and their impact on the condensed consolidated set of
half-year financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the
financial year; and
-- disclosure of material related party transactions in the
first six months of the financial year, and any material changes in
the related party transactions described in the last Annual
Report.
A list of current directors is maintained on the Highcroft
Investments PLC website: www.highcroftplc.com.
By order of the board
John Hewitt
Chairman
22 August 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
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