RNS Number:6175H
Teesland Plc
18 February 2003
Teesland plc
INTERIM RESULTS
For the six months to 31 December 2002
18 February 2003
CHAIRMAN'S STATEMENT
I am pleased to introduce my first Interim Report as Chairman of Teesland plc.
On 7 August 2002, by virtue of a court sanctioned scheme of arrangement, the
Company became the new holding company of Semple Cochrane plc (Semple) and
acquired Teesland Holdings plc, a property fund and asset management business.
The consideration for Teesland Holdings plc was #10 million, satisfied by the
issue of new shares in Teesland plc.
Immediately upon the acquisition of Semple its business with net liabilities of
#25.009m was sold to a third party, for #1.producing a 'book' gain on sale of
#25.009 million.
Teesland invested #7.75 million in Semple from debt provided by the Bank of
Scotland, of this debt #2.75 million was converted by the Bank into ordinary
share capital of Teesland and #5.0m remains outstanding as a long term loan.
At the same time as the reorganisation, #4 million less expenses was raised by
way of a placing and offer for subscription of shares to provide Teesland with
funds for co - investment in limited partnerships and to repay a facility drawn
to fund an existing co-investment.
Equity Partnerships Capital Ventures (EPCV) is the subsidiary of Teesland, which
invests in the new funds we create and promote alongside the capital of
principal investors. EPCV takes the position of founder partner in limited
partnership (LP) funds, usually investing around #1 million. This assists in
attracting other investors.As founder partner EPCV enjoys a carried interest or
fee based on the fund's performance. EPCV has to date invested #1m in The
Osprey Limited Partnership (Osprey), and a further #1m investment and #450k
short term loan has been made in a new product, Thorpe Park Limited Partnership
(TPLP) both of which are described in more detail below.
Results and Dividend
Profit before tax and goodwill amortisation of the acquired business for the
five months since their acquisition was #587,000. This was in line with
expectations at the time of the scheme of arrangement.
No interim dividend is proposed. No dividends can be paid whilst the profit and
loss account has a deficit. We intend to seek shareholders consent at the
annual general meeting and thereafter seek Court approval to reduce the share
premium account and apply the reserve thereby created to eliminate the
accumulated deficit on the profit and loss account.
New Products and Projects
Teesland has successfully launched new products during the period and increased
fees from assets under management and project management contracts.
Our project management division has made a substantial contribution to both
turnover and profit over the period and is engaged in over 20 major projects at
the present time.
Equity Partnerships, the specialist fund management subsidiary of Teesland plc,
has strengthened its market position with the launch of new products including:
The Osprey Limited Partnership (Osprey), a high yielding mixed commercial
property fund, was launched on 30 September 2002 attracting four institutional
investors, The Post Office Pension Fund, British Telecom Pension Fund, Bradford
and Bingley Pension Funds and Clerical Medical Life Fund. Commencing with the
acquisition of assets valued at #65m, the fund has purchased further properties
for #20m, and has exchanged contracts on #40m of additional properties. These
activities attracted partnership establishment, acquisition, fund and asset
management fees. In addition Osprey produced a maiden distribution for EPCV as a
co-investor / founder limited partner. Osprey is now positioned to secure new
investors in the second half of the year enabling the fund to make further
acquisitions as it progresses towards its target level of #300 million funds
under management.
Thorpe Park has been set up as a single asset LP.Contracts have recently been
exchanged to acquire six office investments worth #31m forming the core of this
prime business park. It is located to the east of Leeds city centre and has
direct access from the M1 motorway. Of the six properties being acquired, three
have been acquired from Thorpe Park Developments Ltd, a company controlled by
Severn Trent Water plc, and in which my family company has a 24% interest. The
other three were acquired from Remote Properties Limited in which my family
trust has a 50% interest. A forward funding agreement with the developers for
the remainder of the park is under negotiation, which will secure new
investments on the park, once they are developed and let. The planned total
area is 650,000 sq ft of offices with an estimated final value of c.#120m. The
fund is currently at the warehouse stage and over the next two years new
investors will be introduced so that a long term fund can be established.
Our residential investment LP, Oystercatcher Limited Partnership (Oystercatcher)
now worth #35m, has provided a total return for 2002 of 25%. The LP contains
some 621 units let mainly on assured tenancies and to students. It has
benefited from a geographical spread predominantly outside the South East.
Present market conditions have led to price escalation in some sectors. We are
currently focusing on new investment in the student and key worker sectors.
Equity Partnerships set up the Frenchgate Limited Partnership in early 2002
attracting four investors to acquire the Frenchgate Shopping Centre in Doncaster
for #58m. The investment has produced a return of over 35% per annum.
Pre-contract preparations are underway to extend the Centre to 800,000 sq ft,
making it one of the top 20 UK shopping centres by size. The asset management
fees for this project have provided a major contribution to returns for
Teesland, as will the first stage project management fee receivable in the
second half of the year, providing the project commences on schedule.
Team
I would like to thank my fellow Directors, staff and advisers who worked
extremely hard in both the rescue of Semple Cochrane plc and on the continued
expansion of Teesland's Property Fund and Asset Management business.
Likewise I express my gratitude to the Bank of Scotland for their continued
constructive input, which greatly assists us as we push ahead with our expansion
plans.
In addition to the Directors appointed at the time of the reorganisation, I
welcome to the board, Mickola Wilson as Joint Chief Executive and David Pickard
as a Non Executive Director. David is a former Managing Director of Colliers
CRE, and Mickola was in charge of the fund management division of MWB and former
Managing Director of Guardian Properties.
Outlook
The strategy for Teesland reflects the structural changes occurring in the
property industry - moving away from the traditional property company approach
towards the separation of skills from assets. Through Equity Partnerships,
Teesland is leading the way in specialist property fund management, providing
investors with products which are intended to produce above average returns. The
indirect property market continues to grow, and the investor base is broadening
from large institutions to smaller pension funds and private equity investors.
Market conditions for property are likely to be volatile during 2003, but
Teesland will continue to identify and exploit opportunities to grow our
existing funds and create new ones. During this period of growth, we will
continue to benefit from the well-established core fee stream from our principal
clients and expand our client base by providing tailor made solutions for
investors.
Kevin McCabe
Chairman
18 February 2003
For further information please contact
Mickola Wilson, Joint Chief Executive Jeremy Carey/Marylene Guernier
Stephen McBride, Finance Director Tavistock Communications
Teesland plc Tel: 020 7600 2288
Tel: 020 7493 4636
Teesland plc
Profit and loss account for the 6 months ended 31 December 2002
(Unaudited)
Acquired
Businesses Discontinued
Teesland Businesses
Holdings plc Semple Cochrane Total Total
PLC
five months one month six months six months
to 31.12.02 to 31.7.02 to 31.12.02 to 31.12.01
Notes #'000 #'000 #'000 #'000
Turnover - group
Acquisitions 1,781 - 1,781 -
Discontinued operations - 2,216 2,216 22,801
Total group turnover 2 1,781 2,216 3,997 22,801
Operating Profit / (Loss)
Acquisitions 382 - 382 -
Discontinued operations - (871) (871) (1,225)
Group operating profit / (loss)
before goodwill amortisation 382 (871) (489) (1,225)
Goodwill amortisation (221) - (221) (1,752)
Group operating profit / (loss)
after goodwill amortisation 161 (871) (710) (2,977)
Investment income 178 - 178 -
Operating profit / (loss) 339 (871) (532) (2,977)
Profit on disposal of subsidiary
undertakings - 25,009 25,009 -
Profit / (Loss) on ordinary
activities before interest & tax 339 24,138 24,477 (2,977)
Net interest
Group 27 (207) (180) (745)
Profit / (Loss) on ordinary
activities before taxation 366 23,931 24,297 (3,722)
Taxation on profit on ordinary
activities 3 (128) - (128) -
Profit / (Loss) on ordinary 238 23,931 24,169 (3,722)
activities after taxation
Equity minority interests - - - (4)
Profit / (Loss) for the financial
period 238 23,931 24,169 (3,726)
Dividends paid & proposed - - - -
Profit / (Loss) for the financial
period transferred to / (from)
reserves 238 23,931 24,169 (3,726)
Basic earnings per share / (loss
per share) 4 0.79 pence 79.62 pence 80.41 pence (272.37) pence
Diluted earnings per share / (loss
per share) 4 0.79 pence 79.62 pence 80.41 pence (272.37) pence
Adjusted earnings per share (pre
goodwill) 4 1.52 pence 79.62 pence 81.14 pence (144.30) pence
Teesland plc
Group Balance Sheet
As at 31 December 2002
As at 31.12.02 As at 31.12.01
#'000 #'000 #'000 #'000
Fixed assets
Intangible assets 10,402 5,544
Tangible assets 66 2,591
Investments 1,001 -
Total fixed assets 11,469 8,135
Current assets
Stocks - 2,725
Debtors 968 15,459
Cash at bank 2,362 487
3,330 18,671
Creditors - amounts falling due within one year (643) (28,945)
Net current assets / (liabilities) 2,687 (10,274)
Total assets less current liabilities 14,156 (2,139)
Creditors - amounts falling due after more than one year (5,000) (6,691)
Net assets / (liabilities) 9,156 (8,830)
Capital & reserves
Called up equity share capital 3,597 137
Share premium account 13,268 -
Revaluation reserve - 153
Capital reserve - 257
Merger reserve - 9,316
Profit & loss account (7,709) (30,327)
Equity Shareholders' funds / (deficit) 9,156 (20,464)
Minority Interest - 11,634
9,156 (8,830)
Teesland plc
Consolidated Cash Flow Statement
Six months to 31 December 2002
Semple
Teesland Cochrane
Holdings plc PLC
five months one month Total Six months
to to to to
31.12.02 31.07.02 31.12.02 31.12.01
Notes #'000 #'000 #'000 #000
Net cash inflow / (outflow) from operating activities 5 (a) 173 (1,187) (1,014) (7,048)
Net cash inflow / (outflow) from returns on investments & 25 (207) (182) (671)
servicing of finance
Tax (paid) / received (59) - (59) 40
Net cash (outflow) from capital expenditure & financial (53) - (53) (172)
investment
Net cash (outflow) / inflow from acquisitions & disposals (1,594) 13,684 12,090 -
Cash (outflow) / inflow before financing (1,508) 12,290 10,782 (7,851)
Financing 3,869 - 3,869 114
Increase / (decrease) in cash for the period 5 (c) 2,361 12,290 14,651 (7,737)
Teesland plc
Statement of Total Recognised Gains & Losses
Six months to 31 December 2002
Restated
Six months Six months
to 31.12.02 to 31.12.01
#'000 #'000
Profit / (Loss) for the financial period
Group 24,169 (3,726)
Curency translation differences on foreign currency net investments - 2
Total recognised gains & (losses) 24,169 (3,724)
Reconciliation of Movements in Shareholders' Funds / (Deficit)
Restated
Six months Six months
to 31.12.02 to 31.12.01
#'000 #'000
Profit / (Loss) for the financial period 24,169 (3,726)
Issue of share capital 16,668 -
Conversion of Minority Interest 603
Increase in Merger Reserve 3,281
Curency translation differences - 2
Net increase/(decrease) in shareholders' funds/(deficit) 44,721 (3,724)
Shareholders' funds / (deficit) at :
1 July 2002 (unaudited) (35,565) -
1 January 2001 - (5,083)
Shareholders' funds / (deficit) at end of period 9,156 (8,807)
Teesland plc
Notes
1. Basis of Preparation
The unaudited accounts for the six month period ended 31 December 2002 have been
prepared under the historical cost convention.
Financial Reporting Standard No. 19 - 'Deferred Tax' (FRS 19) has been adopted
for the first time by the Group in this interim report. It has had no material
effect on the prior year results.
Under Court approval dated 7th August 2002 Semple Cochrane PLC implemented a
scheme of arrangement under Section 425 of the Companies Act 1985 which inter
alia introduced Teesland plc as a new holding company. for the Group; acquired
Teesland Holdings plc via an Offer for Subscription of new shares; and approved
the disposal by Teesland plc of Semple Cochrane PLC. Details of the scheme
arrangement are contained in the circulars to shareholders dated 31 May 2002.
Although Teesland plc was incorporated on 30 April 2002, merger accounting has
been adopted, in accordance with Financial Reporting Standard No.6 - '
Acquisitions and Mergers', to account for the transaction as if Teesland plc
owned Semple Cochrane PLC from 1 July 2001. Teesland plc acquired Teesland
Holdings plc on 7 August 2002 via an issue of shares and disposed of Semple
Cochrane PLC and its subsidiaries on that date.
Consequently these interim results contain the trading results of Teesland
Holdings plc from 7 August 2002 until31 December 2002 and the results of Semple
Cochrane PLC from 1 July 2002 until 7 August 2002. The comparative results
contain the trading of Semple Cochrane PLC from 30 June 2001 to 31 December
2001.
The financial information in this statement does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985.
The accounts of Semple Cochrane PLC for the year to 30 June 2002 have not been
signed by their auditors as at the date of this report and thus have been
omitted from being disclosed as a comparative.
The interim results were approved by the Directors on 17th February 2003.The
interim statement , which is available at the Company's Registered Office will
be sent to shareholders before the end of February 2003.
2. Turnover
All turnover derives from within the United Kingdom. The directors have taken
the view that the company has one class of business, deriving from integrated
property management services.
3. Taxation
The tax charge has been calculated at the estimated effective tax rate for the
year.
4. Earnings per share
The calculation of earnings per share is based on the following weighted average
number of shares:
Six months Six months
Continuing Operations to 31.12.02 to 31.12.01
Number of shares Number of shares
Basic earnings per share 30,058,033 1,368,000
Diluted earning per share 30,058,033 1,368,000
Adjusted earning per share 30,058,033 1,368,000
Issued share capital has been weighted to reflect the date the shares were
issued.
Reconciliation of the calculation of the Basic earnings per share to the
Adjusted earnings per share
Teesland (Holdings)
PLC 5 Months to Total Six months Six months
31.12.02 to 31.12.02 to 31.12.01
#'000 #'000 #'000
Profits after tax used to calculate
Basic earnings per share 238 16,222 (3,726)
Amortisation of goodwill 221 221 1,752
Profits before amortisation, after tax
used to calculate Adjusted EPS 459 16,443 (1,974)
5. Notes to consolidated cash flow statement
(a) Reconciliation of operating profit to net cash inflow from operating
activities
Teesland Semple
(Holdings) plc Cochrane PLC Teesland plc
Five months to One month six months Six months
to 31.12.02 to 31.07.02 to 31.12.02 Total to 31.12.01
#'000 #'000 #'000 #'000 #'000
Operating Profit / (loss) 339 (871) - (532) (2,977)
Depreciation Charges 9 35 - 44 287
Amortisation of Goodwill 221 - - 221 1,752
Loss on the sale of fixed assets - - - - (1)
(Increase)/decrease in work in - 445 - 445 (392)
progress
(Increase)/decrease in debtors (301) 10 - (291) 2,487
(Decrease) in creditors (95) (806) - (901) (8,204)
Net cash inflow/(outflow) from 173 (1,187) - (1,014) (7,048)
operating activities
(b) Reconciliation of net cash flows to net debt
Six months to Six months
31.12.02 to 31.12.01
#'000 #'000
Increase/(Decrease) in cash 14,651 (7,737)
Cash inflow from increase in debt (7,750) (114)
Conversion of debt to ordinary shares 2,750 -
Capital element of finance leases repaid - 18
Decrease in liquid resources - (49)
Loans dispensed with subsidiaries 11,997 -
Exchange movements - 11
21,648 (7,871)
Net debt at beginning of period (24,287) (14,539)
Net debt at end of period (2,639) (22,410)
(c) Analysis of changes in net debt
(Unaudited) 01.07.02 - 31.12.02 Disposals (excluding At 31.12.02
At 01.07.02 Movement cash & overdraft)
#'000 #'000 #'000 #'000
Net cash (12,290) 14,651 - 2,361
Debt
Due within one year
Due after one year (8,233) (5,000) 8,233 (5,000)
Deferred loan (3,692) - 3,692 -
Finance Leases (72) - 72 -
Net debt (24,287) 9,651 11,997 (2,639)
Debt due after one year comprises a term loan of #5.0m repayable in ten equal
annual instalments commencing 30 June 2005. The loan carries interest at 0%
until 30 June 2004 and at 2% per annum thereafter.
This information is provided by RNS
The company news service from the London Stock Exchange
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