RNS Number:2540Q
Property Acquisition & ManagementLd
26 September 2003
PROPERTY ACQUISITION AND MANAGEMENT LIMITED
Results for the period ended 30 June 2003
CHAIRMAN'S STATEMENT
Chairman's statement
Following the decision to withdraw from investment in the corporate bond market
in early 2002, the Group has concentrated its activities solely on the property
market.
The Group generated a return on ordinary activities after tax of #22,295,000 (30
June 2002: loss of #2,473,000). After non-equity minority interests and
non-equity dividends, #21,397,000 was transferred to reserves (30 June 2002:
#4,590,000 transferred from reserves). A Convertible Redeemable Preference
Share dividend of 2.85p per share was declared on 8 May and paid on 30 June 2003
in respect of the four month period ended 30 April 2003 (30 June 2002: 2.85p).
On 3 September 2003, the Board declared a further Convertible Redeemable
Preference Share dividend of 2.85p per share in respect of the four month period
ended 31 August 2003 (2002: 2.85p). No Ordinary Share dividends were declared
during the period.
Property
For the six months ended 30 June 2003, CNC Properties Limited ("CNC")
contributed profits before tax of #5,071,000 (30 June 2002: #3,319,000). After
provision for United Kingdom corporation tax and deferred tax, distributable
profits for the period totalled #3,197,000 (30 June 2002: #2,338,000).
Dividends of #3,007,000 (30 June 2002: #2,844,000) were paid to Property
Acquisition and Management Limited leaving a balance of #190,000 transferred to
reserves (30 June 2002: loss of #506,000 transferred from reserves).
In my statement in the 2002 Report and Accounts, I referred to the continued
optimism of private investors and house builders which had enabled the Group to
conclude a number of advantageous sales in the period ended 30 June 2003. In
total, sales were completed on 16 properties for a total consideration of
#14.9m, yielding prices comfortably in excess of year end valuations and
resulting in profits of #2,633,000 (30 June 2002: #854,000) which are included
in the results for the six months.
As a result of these sales, the Group paid down certain elements of its bank
borrowings (in particular the #15m revolving credit facility), resulting in long
term borrowings of approximately #97m as at the period end (30 June 2002:
#114m) and leaving the Group comfortably within its bank covenant requirements.
Funds can be re-drawn under the revolving credit facility arrangements should
suitable opportunities arise for the Group.
My year end statement also mentioned that we expected the uncertain property
market conditions to continue. While certain areas of the office market
continue to fall, through active management of our high yielding industrial and
secondary retail sites, tenant demand has remained more resilient across these
sectors than had been expected, and this has resulted in improved valuations on
certain properties. I would, however, highlight a new trend that is emerging
of an increasing number of tenants becoming owner occupiers of properties.
While this puts an additional strain on the letting of our properties, we
believe this may provide new opportunities in the future.
The effect of the positive return in our industrial, secondary retail and
residential portfolios, and in particular a total review of our 580 acre land
holding in Northumberland, has been reflected in the valuation undertaken by DTZ
Debenham Tie Leung at 30 June 2003. At that date, the valuation of our
properties totalled #184,747,000 compared to #181,960,000 at 31 December 2002
(30 June 2002: #182,434,000). After allowing for additions and sales, the
revaluation surplus of our investment and trading property portfolios during the
period amounted to #18,089,000, representing 32.54p per Ordinary Share.
Bonds
The bond portfolio now consists of 15 holdings valued in total at #526,402 as at
30 June 2003. The rise in the number of holdings since the year end is
attributable to corporate actions, whereby existing holdings have split into
several new instruments, and not as a result of additions to this portfolio.
Since the year end, 8 holdings have been disposed of realising #1,295,672 and it
remains the intention of the Board to liquidate the remaining holdings over
time.
Net Asset Value
At 30 June 2003 the pro forma net assets of the Group amounted to #71,611,000
(31 December 2002: #50,541,000, 30 June 2002: #53,754,000) which, after allowing
for the Convertible Redeemable Preference Shares of #9,728,000 (31 December
2002: same, 30 June 2002: #10,945,000), resulted in a net asset value per
Ordinary Share of 111.33p (31 December 2002: 73.43p, 30 June 2002: 74.34p).
Current Trading and Prospects
The active management of the property portfolio has continued to deliver
excellent returns as reflected in the rise in net asset value. The Board
believes that further opportunities exist to build upon this progress and look
forward to the future with confidence.
Q Spicer
26 September 2003
CONSOLIDATED STATEMENT OF TOTAL RETURN
(Incorporating the revenue account) for the six months ended 30 June 2003 (unaudited)
Six months Year ended 31
Six months ended 30 June ended 30 June December
2003 2002 2002
(unaudited) (audited)
Notes Revenue Capital Total (unaudited)
#'000 #'000 #'000 #'000 #'000
Gain/(loss) on 932 19,494 20,426 (3,093) (4,606)
investment
properties/investments
Income 2 9,114 - 9,114 8,635 16,782
Management fees 3 (1,135) (284) (1,419) (1,839) (3,231)
Other expenses 4 (401) - (401) (746) (2,247)
Gain on cancellation of - - - - 819
shares
Net return on ordinary 8,510 19,210 27,720 2,957 7,517
activities before
finance costs and
taxation
Interest receivable and 45 - 45 383 1,198
similar income
Interest payable and (2,473) (1,123) (3,596) (4,651) (9,561)
similar charges
Return/(loss) on 6,082 18,087 24,169 (1,311) (846)
ordinary activities
before taxation
Tax on ordinary 5 (1,874) - (1,874) (1,162) (1,538)
activities
Return/(loss) on 4,208 18,087 22,295 (2,473) (2,384)
ordinary activities
after tax for the period
Minority interests - 6 - (482) (482) (497) (1,020)
non-equity
Return/(loss) on 4,208 17,605 21,813 (2,970) (3,404)
ordinary activities
after minority interests
Dividends in respect of 7 (416) - (416) (468) (905)
non-equity shares
Return/(loss) 3,792 17,605 21,397 (3,438) (4,309)
attributable to equity
shareholders
Dividends in respect of 7 - - - (1,152) (1,152)
equity shares
Transfer to/(from) 13 3,792 17,605 21,397 (4,590) (5,461)
reserves
Return/(loss) per 8 6.82p 31.68p 38.50p (5.97)p (7.50)p
Ordinary Share - basic
Return/(loss) per 8 6.64p 27.78p 34.42p (4.48)p (5.14)p
Ordinary Share - fully
diluted
The revenue column of this statement represents the revenue account of the Group.
These accounts are unaudited and are not the Group's statutory accounts.
The accompanying notes form an integral part of the interim accounts.
CONSOLIDATED BALANCE SHEET
as at 30 June 2003 (unaudited)
Notes 30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Fixed assets
Intangible fixed assets
Goodwill 586 1,319 733
Tangible fixed assets
Investment properties 9 171,113 168,763 168,310
Other tangible assets 9 10 4 12
Investment in joint ventures 3,937 528 992
175,646 170,614 170,047
Current assets
Listed investments 10 526 2,408 1,437
Property assets 11 11,190 11,864 11,612
Debtors due within one year 6,088 5,739 4,728
Debtors due in more than one year 1,840 1,919 2,792
Cash at bank and in hand 4,615 8,396 5,912
24,259 30,326 26,481
Creditors: amounts falling due within (18,871) (21,157) (20,785)
one year
Net current assets 5,388 9,169 5,696
Total assets less current liabilities 181,034 179,783 175,743
Creditors: amounts falling due after (96,940) (114,112) (114,089)
more than one year
Provisions for liabilities and charges (2,681) (1,840) (2,120)
Minority interests - non-equity shares 6 (11,513) (11,884) (11,031)
Net assets 69,900 51,947 48,503
Capital and reserves
Called up share capital 12 15,287 16,704 15,287
Share premium account 13 22,506 47,520 22,506
Capital redemption reserve 13 1,417 - 1,417
Capital reserve - realised 13 (8,362) (9,399) (4,832)
Capital reserve - unrealised 13 5,964 (12,116) 2,512
Property revaluation reserve 13 23,558 7,105 5,875
Revenue reserve 13 9,433 2,133 5,641
Distributable reserve 13 97 - 97
Total Shareholders' funds 14 69,900 51,947 48,503
Attributable to equity shareholders 14 60,172 41,002 38,775
Attributable to non-equity shareholders 14 9,728 10,945 9,728
Net asset value per Ordinary Share - 15 108.26p 71.20p 69.76p
basic
Pro forma net asset value per Ordinary 15 111.33p 74.34p 73.43p
Share - basic
Net asset value per Ordinary Share - 15 110.31p 78.30p 76.54p
fully diluted
Net asset value per Convertible 15 100.00p 100.00p 100.00p
Redeemable Preference Share
Net asset value per ZDP Share 15 129.53p 118.84p 124.11p
These accounts are unaudited and are not the Group's statutory accounts.
The accompanying notes form an integral part of the interim accounts.
CONSOLIDATED CASHFLOW STATEMENT
for the six months ended 30 June 2003 (unaudited)
Six months ended 30 Six months ended 30 Year ended 31
June 2003 (unaudited) June 2002 December 2002
(unaudited) (audited)
Note #'000 #'000 #'000
Net cash inflow from operating 17 5,273 5,924 12,314
activities
Returns on investments and
servicing of finance
Interest received 42 384 473
Interest paid (3,170) (7,671) (9,027)
Swap breakage costs paid - - (2,357)
Dividends paid on Ordinary Shares - (2,984) (2,993)
Dividends paid on Convertible (554) (624) (945)
Redeemable Preference Shares
Net cash outflow from returns on (3,682) (10,895) (14,849)
investments and servicing of
finance
Taxation
United Kingdom corporation tax (700) (333) (804)
paid
Net cash outflow from taxation (700) (333) (804)
Capital expenditure and financial
investment
Sale of investments 1,296 36,141 36,646
Proceeds from sale of investment 15,611 - 184
properties
Investment property additions (50) (415) (885)
Purchase of tangible fixed assets - - (11)
Net cash inflow from capital 16,857 35,726 35,934
expenditure and financial
investment
Acquisitions and disposals
Investment in joint ventures (1,672) - -
Net cash outflow from (1,672) - -
acquisitions and disposals
Net cash inflow before financing 16,076 30,422 32,595
Financing
Repurchase of Ordinary and - - (1,902)
Convertible Redeemable Preference
Shares
Repurchase of ZDP Shares - - (1,214)
Repayment of loan notes - (741) (2,675)
Repayment of bank loans (17,775) (38,074) -
New borrowings/(repayment of - 1,262 (36,946)
borrowings)
Net cash (outflow) from financing (17,775) (37,553) (42,737)
(Decrease) in cash in the period 16 (1,699) (7,131) (10,142)
These accounts are unaudited and are not the Group's statutory accounts.
The accompanying notes form an integral part of the interim accounts.
NOTES TO THE ACCOUNTS
for the six months ended 30 June 2003 (unaudited)
1. ACCOUNTING POLICIES
A summary of the principal accounting policies, all of which have been applied
consistently throughout the period, are set out below.
Basis of accounting
The accounts are prepared under the historical cost convention, modified to
include the revaluation of investments and investment properties. The accounts
have been prepared in accordance with applicable United Kingdom accounting
standards and with the Statement of Recommended Practice ("SORP") "Financial
Statements of Investment Trust Companies" as it is considered best practice to
do so, although the Company, as an overseas company, does not meet all the
criteria set out in the SORP.
Basis of consolidation
The consolidated statement of total return and consolidated balance sheet
include the financial statements of the Company and its subsidiary undertakings
for the period.
The results of subsidiaries acquired are included in the consolidated statement
of total return from the date control passes. Goodwill arising on consolidation
is capitalised and amortised over a period of five years.
Valuation of investments
Quoted investments are valued at mid-market prices. However, when appropriate
the quoted investments have been valued downwards to take account of high
volatility and poor liquidity in the market.
Realised surpluses or deficits on the disposal of investments, impairments in
the value of investments and unrealised surpluses or deficits on the revaluation
of investments are taken to the consolidated statement of total return as
capital-realised or unrealised as applicable.
Period-end exchange rates are used to translate the value of investments, which
are denominated in foreign currencies.
Investment properties
Investment properties are revalued quarterly at open market value in accordance
with Statement of Standard Accounting Practice 19 "Investment Properties". As
such, no depreciation is provided on investment properties. The surplus or
deficit is included in the consolidated statement of total return and the
property revaluation reserve (to the extent that any deficit is temporary).
Permanent deficits are written off to the revenue reserve via the consolidated
statement of total return.
Properties held for resale, land and developments in progress
Properties held for resale, land and developments in progress are valued at the
lower of cost and net realisable value.
Interest
Interest on loans specifically granted for the purchase and development of new
development sites is capitalised up to the date of completion of the property.
Joint ventures
The consolidated statement of total return includes the Group's share of
operating profit, interest and attributable taxation of joint ventures. The
investment in joint ventures disclosed in the consolidated balance sheet
reflects the Group's share of net assets of those companies.
Depreciation
No depreciation is provided on investment properties. The Directors consider
that these properties should be included in the financial statements at their
open market values in order to give a true and fair view and therefore consider
it necessary to adopt Statement of Standard Accounting Practice 19 "Investment
Properties". It would be neither practical nor of real value to determine the
depreciation charge taken into account in arriving at open market values.
Plant, machinery and motor vehicles are depreciated by the straight-line method
over periods of between four and five years.
Investment income
Fixed returns on debt securities are recognised on a time apportionment basis so
as to reflect the effective yield on the debt security. Interest on overseas
debt securities is shown gross of any overseas withholding tax. Interest on
United Kingdom securities is shown net of the tax credit in accordance with
Financial Reporting Standard 16 "Current Taxation". The debt securities are
accounted for on a clean basis. Bank interest is accounted for on an accruals
basis.
Expenses
All expenses are accounted for on an accruals basis. Expenses are charged
through the revenue reserve except as follows: - expenses which are incidental
to the acquisition of an investment are included within the cost of the
investment; - expenses which are incidental to the disposal of an investment
are deducted from the disposal proceeds of the investment; - expenses are
charged to the capital reserve - realised where a connection with the
maintenance or enhancement of the value of the investments can be
demonstrated. In this respect, part of the management fee, insofar as it
relates to the property, has been allocated 30% to the capital reserve -
realised and 70% to the revenue reserve, in line with the Board's expected
long-term split of returns, in the form of capital gains and income
respectively, from the property portfolio (see note 2); and - expenses which
are incurred in respect of the raising of capital are taken to the capital
reserve - realised.
Finance costs
Finance costs, including dividends and other finance costs of non-equity shares,
are accounted for on an accruals basis, and in accordance with the provisions of
Financial Reporting Standard 4 "Capital Instruments".
Finance costs of debt, insofar as they relate to the financing of the Group's
property portfolio, are allocated 30% to capital and 70% to revenue, in line
with the Board's expected long-term split of returns, in the form of capital
gains and income respectively, from the property portfolio (see note 2).
Pension costs
Contributions to the defined benefit scheme are assessed with regard to advice
from qualified actuaries and are charged to the revenue reserve. The defined
benefit scheme closed on 21 April 2001. Contributions to money purchase pension
schemes are charged to the revenue account immediately upon payment to the
scheme trustees.
Since 21 April 2001, any deficits arising from actuarial valuations of the
defined benefit scheme are provided for in full.
Financial instruments
Derivative financial instruments utilised by the Group are interest rate swaps,
caps and floors. The Group does not enter into speculative derivative
contracts. All such instruments are used for hedging purposes to alter the risk
profile of an existing underlying exposure of the Group in line with the Group's
risk management policies. Amounts payable or receivable in respect of interest
rate swaps are recognised as adjustments to interest expenses over the period of
the contracts.
Deferred taxation
The Group has adopted Financial Reporting Standard 19 "Deferred Tax". In
accordance with this accounting standard, deferred tax is provided in full on
timing differences that result in an obligation at the balance sheet date to pay
more tax, or a right to pay less tax, at a future date, at rates expected to
apply when they crystallise, based on current tax rates and on law.
Timing differences arise from the inclusion of items of income and expenditure
in taxation computations in periods different from those in which they are
included in financial statements. Deferred tax is not provided on timing
differences arising from the revaluation of fixed assets where there is no
commitment to sell the asset, or on unremitted earnings of subsidiaries and
associates where there is no commitment to remit these earnings. Deferred tax
assets are recognised to the extent that it is regarded as more likely than not
that they will be recovered. Deferred tax assets and liabilities are not
discounted.
Operating leases
Annual rentals under operating leases are charged to the revenue reserve as
incurred.
Foreign currency
Transactions denominated in foreign currencies are recorded in the local
currency at actual exchange rates as at the date of the transaction or, where
appropriate, at the rate of exchange in a related forward exchange contract.
Monetary assets and liabilities denominated in foreign currencies at the period
end are reported at the rates of exchange prevailing at the period end or, where
appropriate, at the rate of exchange in a related forward exchange contract.
Any gain or loss arising from a change in exchange rates subsequent to the date
of the transaction is included as an exchange gain or loss in the consolidated
statement of total return as capital or revenue depending on whether the gain or
loss is of a capital or revenue nature respectively.
Capital reserves
Capital reserve - realised
The following are accounted for in this reserve:
- gains and losses on the realisation of investments;
- realised exchange differences of a capital nature; and
- expenses and finance, together with the relaxed taxation effect, charged to
this reserve in accordance with the above policies.
Capital reserve - unrealised
The following are accounted for in this reserve:
- increases and decreases in the valuation of investments held at the
period-end; and
- unrealised exchange differences of a capital nature.
2. INCOME
Six months ended Six months ended Year ended
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Interest on fixed interest 28 946 938
securities (gross)
Sale of properties 7,745 3,199 3,231
Rental income 8,391 8,519 17,351
Share of joint ventures 270 113 768
Management fees 155 218 450
Group income 16,589 12,995 22,738
Cost of sales (7,475) (4,360) (5,956)
Income 9,114 8,635 16,782
3. MANAGEMENT FEES
On 12 August 2002 the Company announced that the Manager had agreed to rebate part of the management fee and,
with effect from 1 July 2002, the basis of calculating the management fee changed with the amount being paid to
the Manager being calculated on an ad valorem basis of 1.5% based on total assets under management or, if
lower, the amount derived under the formula contained in the Management Agreement. The fees of the Property
Adviser are paid from the management fee.
4. OTHER EXPENSES
Six months ended Six months ended Year ended
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Depreciation of tangible fixed 2 2 5
assets
Amortisation of goodwill 147 37 623
Auditors' remuneration 63 32 242
Directors' remuneration 34 28 83
(Gain)/Loss on foreign exchange (1) 15 1
Costs of aborted fundraising - 400 503
Administration and sundry 156 232 240
expenses
Pension provisions - - 550
401 746 2,247
5. TAX ON PROFIT ON ORDINARY ACTIVITIES
Six months ended Six months ended Year ended
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
United Kingdom corporation tax 997 794 890
Recognition of deferred tax 877 368 648
liability
1,874 1,162 1,538
The Company and its Guernsey based subsidiaries Property Acquisition and
Management High Income Limited ("PAM High"), Property Acquisition and Management
Securities Limited ("PAM Securities") and PAM Offshore Properties Limited are
exempt from Guernsey Income Tax under the Income Tax (Exempt Bodies) (Guernsey)
Ordinances 1989 and 1992 and are charged an annual exemption fee of #600. CNC,
a subsidiary company registered in England and Wales, is subject to United
Kingdom corporation tax.
6. MINORITY INTERESTS
(Zero Dividend Preference Shares issued by PAM Securities)
Rights attached to shares
Zero Dividend Preference ("ZDP") Shareholders shall not be entitled to receive
and shall not participate in any dividends or other distributions out of the
profits of PAM Securities, a wholly owned subsidiary of the Company, available
for dividend and resolved to be distributed in respect of any accounting period
or any other income or right to participate therein.
On a return of assets on liquidation, after payment of all debts and
satisfaction of all creditors of PAM Securities, there shall be paid to ZDP
Shareholders from the surplus assets of PAM Securities an amount equal to 100p
per ZDP Share as increased daily at a compound rate as will give an entitlement
to 153.86p on the ZDP Redemption Date (five years after admission to trading),
the first increase occurring on the date the ZDP Shares are first admitted to
the Official List of the United Kingdom Listing Authority and the last on the
actual date of payment.
ZDP Shareholders will not have the right to receive notice of any general
meeting of PAM Securities or to attend or vote at any such meeting except in
respect of any resolution altering, modifying or abrogating any of the rights
and privileges attached to the ZDP Shares or to wind up PAM Securities.
7. DIVIDENDS
Six months ended Six months ended Year ended
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
#0.10 Ordinary Shares
First interim - nil per share - 1,152 1,152
(2002: 2.00p per share)
- 1,152 1,152
#1 Convertible Redeemable
Preference Shares
Four months ended 30 April 277 312 312
2003: 2.85p per share (2002:
2.85p per share)
Four months ended 31 August 139 156 312
2003: 2.85p per share (2002:
2.85p per share) - pro rated
for 2 months
Four months ended 31 December - - 281
2003: n/a (2002: 2.85p per
share)
416 468 905
Total dividends 416 1,620
2,057On 12 August 2002, the Board announced that it did not expect to declare
any further dividends on the Company's Ordinary Shares in respect of the
financial periods ending 31 December 2002 and 31 December 2003. On 3 September
2003, the Board declared a dividend of 2.85p per Convertible Redeemable
Preference Share for the four month period ended 31 August 2003.
8. RETURN PER ORDINARY SHARE AND DILUTED RETURN PER ORDINARY SHARE
The revenue return per Ordinary Share is based on the net revenue after non-
equity dividends of #3,792,000 (30 June 2002; #943,000, 31 December 2002;
#4,451,000) and on 55,583,795 (30 June 2002; 57,583,795, 31 December 2002;
57,479,685) Ordinary Shares, being the weighted average number of shares in
issue.
The capital return per Ordinary Share is based on a net capital gain of
#17,605,000 (30 June 2002; loss of #4,381,000, 31 December 2002; loss of
#8,760,000) and on 55,583,795 (30 June 2002; 57,583,795, 31 December 2002;
57,479,685) Ordinary Shares, being the weighted average number of shares in
issue.
The fully-diluted returns per Ordinary Share have been calculated on the
assumption that the Convertible Redeemable Preference Shares were fully
converted on the first day of the period and on each subsequent issue at a rate
of 8 Ordinary Shares for every 10 Convertible Redeemable Preference Shares,
giving a weighted average of 63,366,405 (30 June 2002; 66,340,005, 31 December
2002; 66,197,826). The revenue return of 6.64p (30 June 2002; 2.13p, 31
December 2002; 8.09p) per Ordinary Share includes the savings of the finance
costs on the Convertible Redeemable Preference Shares.
9. TANGIBLE FIXED ASSETS
Investment properties Other tangible assets Total
(unaudited) (unaudited) (unaudited)
#'000 #'000 #'000
Cost or valuation:
As at 1 January 2003 168,310 26 168,336
Additions 50 - 50
Disposals (14,930) - (14,930)
Movement on revaluation 17,683 - 17,683
As at 30 June 2003 171,113 26 171,139
Depreciation
As at 1 January 2003 - 14 14
Charge for the period - 2 2
As at 30 June 2003 - 16 16
Net book value:
At 30 June 2003 171,113 10 171,123
At 30 June 2002 168,763 4 168,767
At 31 December 2002 168,310 12 168,3222
Other tangible assets consist of equipment and motor vehicles.
The investment properties were valued on the basis of open market value as at 30
June 2003 by DTZ Debenham Tie Leung, international property advisers, based on
the Royal Institute of Chartered Surveyors, Practice Statement 20.
10. LISTED INVESTMENTS
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Opening valuation 1,437 38,607 38,607
Proceeds on sale of investments (1,296) (36,140) (36,646)
Realised losses on sales (2,241) (1,935) (2,552)
Movement in unrealised loss on foreign exchange - - 270
Movement in unrealised loss on investments 2,626 1,876 1,758
Closing valuation 526 2,408 1,437
Opening book cost 4,404 8,793 7,941
Unrealised loss (3,878) (6,385) (6,504)
Closing valuation 526 2,408 1,437
During 2002, a decision was taken by the Directors that the risks of continuing
to hold a significant amount of the Group's assets in the bond portfolio was
outweighed by the risks. Accordingly the Directors instigated a substantial
liquidation of the bond portfolio held by PAM High.
Due to the liquidation of the bond portfolio, with effect from 31 July 2002,
Aberdeen Asset Managers Limited ceased to act as Investment Adviser and control
over the liquidation of the bond portfolio passed to the Manager.
11. PROPERTY ASSETS
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Land and properties held for resale 8,986 8,750 8,548
Developments in progress 2,204 3,114 3,064
11,190 11,864 11,612
Land and properties held for resale have been valued at 30 June 2003 by DTZ
Debenham Tie Leung, international property advisers. The effect of this
valuation increases the carrying value of property assets by #2,444,000 (30 June
2002: #1,807,000, 31 December 2002: #2,038,000) to #13,634,000 (30 June 2002:
#13,671,000, 31 December 2002: #13,650,000). A deferred tax provision has been
made on the unrealised gain amounting to #733,200 (30 June 2002: Nil, 31
December 2002: Nil)
12. CALLED UP SHARE CAPITAL
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Authorised:
200,000,000 Ordinary Shares of #0.10 each 20,000 20,000 20,000
50,000,000 Convertible Redeemable Preference Shares of #1each 50,000 50,000 50,000
70,000 70,000 70,000
Allotted and fully paid:
55,583,795 (30 June 2002; 57,583,795) Ordinary Shares of #0.10 each 5,559 5,759 5,559
9,728,262 (30 June 2002; 10,945,262) Convertible Redeemable 9,728 10,945 9,728
Preference Shares of #1 each
15,287 16,704 15,287
Buy back of Ordinary Shares and Convertible Redeemable Preference Shares
During 2002 the Group announced its intention to buy back Ordinary Shares and
Convertible Redeemable Preference Shares, in addition to ZDP Shares, for
cancellation. At an Extraordinary General Meeting of the Company and at class
meetings of the Ordinary Shareholders, Convertible Redeemable Preference
Shareholders and ZDP Shareholders on 3 October 2002, resolutions were passed to
authorise the Company to purchase and subsequently cancel up to 14.99%
(8,631,811 shares) of the Ordinary Shares in issue and 50.00% (5,472,632 shares)
of the Convertible Redeemable Preference Shares in issue.
The Company purchased 2,000,000 Ordinary Shares and 1,217,000 Convertible
Redeemable Preference Shares during December 2002 for #870,147 and #1,032,452
respectively. As the shares were purchased for less than their net asset
values, the Company made a gain upon cancellation of the Ordinary Shares of
#437,450 and a gain upon cancellation of the Convertible Redeemable Preference
Shares of #219,230.
13. RESERVES
Capital Capital Capital Property Other Revenue Total
redemption reserve - reserve - revaluation distributable reserve
Share reserve realised unrealised reserve reserves
premium
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
As at 1 22,506 1,417 (4,832) 2,512 5,875 97 5,641 33,216
January 2003
Return for the - - (3,530) 3,452 17,683 - 3,792 21,397
period
As at 30 June
2003 22,506 1,417 (8,362) 5,964 23,558 97 9,433 54,613
14. TOTAL SHAREHOLDERS' FUNDS
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Equity 60,172 41,002 38,775
Non-equity - Convertible Redeemable Preference Shares 9,728 10,945 9,728
69,900 51,947 48,503
Total shareholders' funds have been apportioned between equity and non-equity
shareholders in accordance with Financial Reporting Standard 4 "Capital
Instruments". However, the net asset value per share figures in note 15 has
been calculated on the basis of shareholders' rights to reserves as specified in
the Articles of Association of the Company.
15. NET ASSET VALUE PER SHARE
The net asset value per share and the net asset values attributable to each
class of share at the period end calculated in accordance with the Articles of
Association of the Company:
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited) (audited)
Ordinary Shares: - basic 108.26p 71.20p 69.76p
- pro forma basic 111.33p 74.34p 73.43p
- fully diluted 110.31p 78.30p 76.54p
Convertible Redeemable Preference Shares 100.00p 100.00p 100.00p
Net asset value per ZDP Share 129.53p 118.84p 124.11p
Basic net asset value per Ordinary Share is based on net assets less the nominal
value of Convertible Redeemable Preference Shares outstanding at the period end
and on 55,583,795 (30 June 2002; 57,583,795, 31 December 2002; 55,583,795)
Ordinary Shares, being the number of Ordinary Shares in issue at the period end.
The analysis of shareholders' funds used on the face of the balance sheet has
been computed in accordance with the provisions of Financial Reporting Standard
4 "Capital Instruments".
If the current property assets were included in the accounts at 30 June 2003 at
open market value (as valued by DTZ Debenham Tie Leung) referred to in note 11,
the net asset value per Ordinary Share would increase from 108.26p (30 June
2002; 71.20p, 31 December 2002; 69.76p) to a pro forma basic net asset value per
Ordinary Share of 111.33p (30 June 2002; 74.34p, 31 December 2002; 73.43p).
Fully diluted net asset value per Ordinary Share at 30 June 2003 was 110.31p (30
June 2002; 78.30p, 31 December 2002; 76.54p). This has been calculated on the
assumption that the Convertible Redeemable Preference Shares were fully
converted on the day of issue on the basis of 8 Ordinary Shares for every 10
Convertible Redeemable Preference Shares held, giving a weighted average of
63,366,405 (30 June 2002; 66,340,005, 31 December 2002; 63,366,405) shares.
16. ANALYSIS OF CHANGES IN NET FUNDS/DEBT Exchange
1 January 2003 Cashflows difference 30 June 2003
#'000 #'000 #'000 #'000
Cash at bank and in hand 5,912 (1,292) (5) 4,615
Overdraft (1,648) (407) - (2,055)
Net cash at bank and in hand 4,264 (1,699) (5) 2,560
Debt due within one year (1,127) 59 - (1,068)
Debt due after more than one year (113,151) 17,651 - (95,500)
Loan notes within one year (65) 65 - -
Total (110,079) 16,076 (5) (94,008)
17. RECONCILIATION OF NET REVENUE BEFORE FINANCE COSTS AND TAXATION TO NET CASH
INFLOW FROM OPERATING ACTIVITIES
Six months ended Six months ended Year ended
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Net revenue before finance costs 8,056 6,348 12,587
and taxation
Increase in funding on joint - - (1,877)
ventures
Management fee charged to capital (284) (298) (591)
Other charges to capital (440) - (503)
Amortisation of goodwill 147 37 623
Gain on ZDP Interest (162) - -
Depreciation 2 2 5
(Increase)/decrease in accrued - (1,173) 1,261
income
Decrease in property assets 1,694 2,101 1,666
(Decrease) in creditors (4,931) (721) (1,029)
Decrease/(increase) in other 1,191 (372) 172
debtors
Net cash inflow from operating 5,273 5,924 12,314
activities
If you have any queries please contact:
Andrew Duquemin
Collins Stewart Fund Management Limited
2nd Floor
TSB House
Le Truchot
St Peter Port
Guernsey
GY1 4AE
Tel: 01481 731987
Fax: 01481 720018
This information is provided by RNS
The company news service from the London Stock Exchange
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