RNS Number:6066S
TR Property Investment Trust PLC
28 November 2003
27 November 2003
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
Highlights
* Another strong performance by Property shares
* NAV return beats the Benchmark and All-Share
* Revenue per share up 24.5%
* Interim dividend raised 22.2%
Since the half year end:
* Major share buyback made
* Gearing currently 26%
Alastair Ross Goobey, the Chairman of TR Property Investment Trust, commented:
"The six month period has seen strong growth in global equity prices as
investors have become more confident in the scale and certainty of the world
economic recovery. Your Trust's asset value per share and share price have
benefited accordingly and both have risen to new all-time high levels. The
Trust's revenue returns have again risen markedly."
Dividend
An interim dividend of 1.10p (2002: 0.90p) per ordinary share has been declared
payable on 7 January 2004 to shareholders on the register on 12 December 2003.
The shares will be quoted ex-dividend on 10 December 2003.
- MORE -
- 2 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
Financial Highlights
(Unaudited) (Unaudited) %
Half year ended Half year ended Change
Revenue 30 September 30 September
2003 2002
Gross revenue (#'000) 10,711 9,850 +8.7
Net return pre-tax (#'000) 8,561 7,335 +16.7
Revenue return per share 1.78p 1.43p +24.5
Net dividend per share 1.10p 0.90p +22.2
(Unaudited) (Audited) %
Balance Sheet As at As at Change
30 September 31 March 2003
2003
Fixed asset investments (#'000) 427,416 358,178 +19.3
Shareholders' funds (#'000) 362,329 304,127 +19.1
Shares in issue at end of period (m) 410.2 416.5 -1.5
Gearing 16% 15%
Net asset value per share 88.33p 73.02p +21.0
Performance
Half year ended Half year ended
Assets, Benchmarks and Share Price 30 September 30 September
2003 2002
Benchmark performance (price only) 18.3% (13.0)%
NAV change 21.0% (9.6)%
Benchmark performance (total return)* 22.0% (10.6)%
NAV total return 22.5% (8.1)%
IPD Monthly Index total return** 5.6% 5.9%
Total return from direct property 2.8% 3.7%
Share price at 30 September 74.25p 57.25p
Share price total return* 28.1% (10.1)%
Market capitalisation at 30 September #304.6m #245.9m
Sources: Henderson Global Investors/ *Datastream/ **IPD
- MORE -
- 3 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
Chairman's Statement
Introduction
The six month period has seen strong growth in global equity prices as investors
have become more confident in the scale and certainty of the world economic
recovery. Your Trust's asset value per share and share price have benefited
accordingly and both have risen to new all-time high levels. The Trust's revenue
returns have again risen markedly.
Since the half year end, the Trust has been able to take advantage of an
opportunity to buy back a further 13% of the share capital. This transaction, on
which I comment in more detail later in my report, has used up most of the
repurchase powers granted to the board by shareholders at the last AGM.
Therefore the board is calling an EGM to renew its buy-back powers and the
notice of the meeting is enclosed with the interim report. I hope shareholders
will support the motion.
Equity Market Background and Return Performance
Property company shares, which form the vast bulk of the Trust's assets, proved
to be strongly defensive investments during the collapse of equity prices that
ended in February 2003. It might therefore have been expected that they would
underperform other sectors of the market as sentiment recovered. I am happy to
report that this has not been the outcome to date. Indeed, over the six month
period ending on 30 September 2003, your share price total return has been
28.1%. This compares with total returns of 22.0% from our benchmark index and of
18.9% shown by the FTSE All-Share Index.
In the UK we have seen a significant reduction in the discounts to net asset
value at which property shares are trading. This has been spurred by strong
investor demand, by actual and potential corporate activity and by the hope that
the Government might give corporation tax-free status to property shares within
the next two years. In Europe property share prices have risen, but with less
speed. The total returns shown by our benchmark (for UK only of 28.4% and Europe
ex UK of 16.5%) illustrate this differential. The Trust's continued overweight
position in the UK relative to the benchmark has therefore worked to our
benefit.
Revenue Results and Dividend
Revenue returns per share have risen by 24.5% to 1.78 pence per share. Gross
revenue rose 9% reflecting higher dividends from investee companies and a change
in the timing of our income receipts. This year our managers anticipate that
some two thirds of the Trust's forecast dividend income has been received in the
first half of the financial year compared with five eighths of the dividend
income in the same period last year. Management costs and expenses have fallen
and interest costs are lower due to the reduction in debt levels made during the
autumn of 2002. Returns per share have also benefited from a reduction in the
number of shares outstanding. While your board does not anticipate that this
rate of growth in revenue returns per share will be maintained in the full year,
it has raised the interim dividend by 22% from 0.90 pence per share to 1.10
pence per share.
- MORE -
- 4 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
Discount and Share Repurchases
In my interim statement to shareholders last year I commented that, despite the
outstanding record of the Trust over the past ten years, it was of concern to
the board that the shares still sold at an appreciable discount to the
underlying asset value. I am pleased to report that the discount has narrowed
appreciably over the six month period - illustrated by the fact that the share
price total return over that period has been 28.1% compared with the NAV total
return of 22.5%.
During the half year 6.3m shares were bought for cancellation at a total cost of
#4.4m giving an average cost of 70p per share. These repurchases served to
increase net assets per share by some #0.85m equivalent to 0.2p per share. At
the end of October the board took the opportunity to carry out a significant
on-market share repurchase exercise at a 13% discount to asset value. As a
result the Trust bought back 53.8m shares or 13% of the outstanding equity. The
immediate tangible benefit to remaining shareholders has been a 1.9% increase in
net assets per share. Longer term, the reduction in gross assets is also
expected to have positive performance implications. The Trust operates in a
small sector of the market that has been shrinking for some years due to
takeovers and public-to-private transactions. Your board believes that adjusting
the size of the Trust relative to the benchmark will enhance the managers'
ability to manoeuvre net assets and gearing ratios more effectively within the
Trust's investment parameters. At the time of writing the Trust's net assets are
#345m, compared with #362m at 30 September 2003.
Gearing and Currencies
Over the six month period the Trust's net debt rose from #47m to #60m, though
the growth in the value of our assets was such that the gearing ratio rose only
from 15% to 16%. The large scale share repurchase referred to in the previous
paragraph was financed initially by additional short term variable rate debt.
Some of this has now been repaid. The current debt level is close to #90m and
gearing is currently 26%. Subject to market conditions this higher level of
gearing is likely to be maintained in the immediate future.
All of our debt continues to be denominated in Sterling and the exposure to
foreign currency assets and income continues to be unhedged. During the six
month period the Euro rose against Sterling by 1.5%.
Board
I reported to shareholders in the last Annual Report that it was my intention to
retire as a director of the Trust after the AGM in 2004 when I will have served
on the board for ten years. I am pleased to announce that the board has elected
Peter Salsbury to be my successor.
The board hopes to announce the appointment of a new non-executive director in
the New Year.
Outlook
Across Europe we are seeing strong and sustained levels of investor interest in
commercial property. Much of this interest is coming, not from traditional
buyers but from funds and individuals who have never before considered the
sector as a home for their money. Furthermore it is also coming at a time when
tenant demand is at best modest and often closer to anaemic, and when borrowing
costs have already started to rise.
- MORE -
- 5 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
I have spent many years preaching the advantage that investors can gain by
diversifying a proportion of their assets into commercial property - more often
than not preaching to deaf ears. It is exciting for those of us who have
believed in the asset class to find it now coming in from the cold. The timing
of this surge in investor interest may not be entirely propitious given the very
mixed economic and monetary background, but the driving force behind the demand
does appear to be a growing fear of future inflation and a consequent desire to
diversify out of bonds and into an asset class with proven inflation protection
potential.
In the UK property share market, hopes are high that the Government will revise
the taxation regime for UK quoted investment property companies. News on this
may not come until at least the middle of 2004. In the meantime we continue to
see a regular stream of actual and attempted take-overs for property companies
both here and in Continental Europe. Major real estate buyers find it easier and
more convenient to invest by buying an entire existing business than by piecing
together a portfolio building by building and this is serving to place a floor
under many property share prices.
Extracts from Manager's Report
Performance
In absolute terms the first half total return of 22.5% was a good deal higher
than I would have forecast last April. However in relative terms I am
disappointed that the performance was only in line with the return from the
benchmark. Our equity investments returned over 24%, and would have done better
still if we had not been, as usual, seriously underweight in Canary Wharf shares
which rose 86% in the period. The area of the portfolio that held back our
overall performance was our direct property portfolio. This produced an ungeared
return of only 2.8% after having strongly outperformed our equity investments
through 2001 and 2002.
I am pleased to report that absolute and relative performance since September
has been strong and I am optimistic that your managers can deliver a sixth
consecutive year of relative outperformance for shareholders.
Distribution of Assets
There has been only a slight change in the general shape of the portfolio. UK
property shares have risen from 45.8% to 48.4% of gross assets, European
property shares have moved from 33.7% to 34.8% while UK directly held property
has dropped from 20.5% to 16.8%, principally as a result of property value
growth lagging equity price appreciation. The current target distribution of the
portfolio remains unaltered at 35% to 55% in UK equities, 35% to 55% in
Continental equities and 10% to 30% in UK direct property.
- MORE -
- 6 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
Property Market Background
Commercial property markets across Europe are currently displaying great
similarity. Almost everywhere there is a dearth of office tenant demand.
Lettings are hard to negotiate, vacancy levels have doubled or trebled since
2001 and underlying rental values have generally fallen by 20% or more. By
contrast retail tenant demand has been stable and so have retail rents.
Vacancies in good centres are minimal. Tenant demand for industrial and
distribution space has been better than we expected with smaller and medium
sized businesses more active than big corporations. Rental values have generally
weakened slightly but not as much as might have been expected given the state of
manufacturing industry in Europe. The most unexpected and uniform trend across
Europe this summer has been the great strength of the investment market. An
enormous weight of money is trying to find a home in commercial property. So
despite the very cautious occupational market, capital values of let retail and
industrial buildings have increased while prices for office buildings have not
fallen by even a quarter of the extent that might reasonably have been expected
given the significant decline in office rental values.
Property Share Background
As the Chairman notes, property shares again outperformed the general equity
market. In the UK they returned 28.4% while the FTSE All-Share Index produced a
total return of 18.9%. On the Continent the picture was reversed with property
shares returning 16.5% compared with 24.9% for the FTSE World Europe (ex UK)
Index.
In the UK there were three factors driving property share prices forward. The
first was the underlying strength of property investment demand, which has
raised asset value expectations. The second was corporate activity and in
particular the attempted privatisation of Canary Wharf and Chelsfield. The third
and most important factor was the increasing optimism that the UK Government
will change the tax law and create a corporation tax free structure for UK based
property companies - the so called "UK REIT" structure (where REIT stands for
Real Estate Investment Trust).
Under current tax law, rental income from buildings and capital gains on
investment properties sold by property companies are taxed both at the company
level and at the shareholder level. This double taxation makes it more tax
efficient for large investors to own their own property portfolios and for small
investors to own shares or units in property funds located off-shore. This is
one of the main reasons why UK quoted property companies almost always stand at
discounts to their net asset value. REITs have now been introduced in all the
other G7 countries and most recently in France. The UK property industry has
campaigned for a tax change before with no success. The difference today is that
the French system was introduced by making the property companies buy their
future tax freedom through a one-off capital payment of half their inherent
capital gains. The UK Government, short of tax receipts, has spotted this fund
raising potential and has now stated that it is investigating the creation of a
UK REIT structure. No announcement is expected until 2004 and if the Government
does act it is likely to be in 2005. Nevertheless the commentators are now
seeing the chances of a tax change as probable rather than possible.
- MORE -
- 7 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
If UK REITs are introduced in a workable format, the major impact should be on
the dividend yields of the leading property companies. REIT status is likely to
demand high earnings payout ratios and I expect that the dividend yields from
some of the bigger property companies could rise to over 6% assuming the shares
stood at asset value. The result would be that shareholders would effectively
collect a dividend return at the same level or close to the yield they might
expect if they owned the portfolio outright and that discounts to net asset
value would diminish or even disappear. In the USA, where there are over 150
quoted REITs, the sector stands at more than a 15% premium to asset value and
yields 5.8%.
The Trust would clearly benefit from the arrival of UK REITs both in terms of
increased dividend income and from the potential increased capital value of our
shareholdings. A word of caution is valid. The Government investigation into
REITs is just that, and not a guarantee that any workable system will be
introduced. I think that legislation is only likely if the Treasury are
satisfied that any potential diminution of the annual tax take from property
companies will be more than compensated for by the value of the initial entry
fee plus the ongoing additional revenue from higher dividend income paid to
shareholders. This is by no means clear.
Largest Equity Investments
I made few changes to our major equity investments during the six months so the
list of the top twenty equity investments at the end of September is very
similar to the list six months earlier. (I hope shareholders won't see this
lethargy as a symptom of idleness.) Though the Trust's long term investment
policy tends to favour investment in small and medium sized businesses, the top
twenty list is currently biased towards big companies - chiefly ones based in
the UK and France. I put these holdings in place some time ago to improve the
liquidity of the portfolio, and have stayed with this bias for two principal
reasons. Larger property companies tend to outperform early in a bull phase of
the market and big companies are seen as the major gainers from the actual
introduction of REITs in France and the potential introduction of REITs in the
UK. Amongst our top twenty, the best and worst performers in total return terms
were St Modwen +52.1% and Cofinimmo +7.8%.
Gearing
Over the half year I increased the Trust's net debt level from #47m to #60m
though the gearing ratio rose by only 1% to 16% because of the sharp increase in
the value of our assets. As the Chairman noted, since the end of September we
have borrowed to fund the majority of the #42m spend on repurchase and
cancellation of 53.8m shares at 77.5p per share. This extra debt combined with a
reduction in net assets arising from the buy-back has taken gearing to a current
level of 26%. Subject to market conditions this higher level of gearing is
likely to be maintained in the immediate future.
Direct Property Portfolio
The Trust's direct property portfolio produced a total return of only 2.8% over
the half year, reflecting an income return of 2.7% and a capital value increase
of 0.1%. This was a little disappointing given that the total return from the
IPD Monthly Index was 5.6% (income return 3.6% and capital growth of 2.0%)
during the same period, but understandable given that the portfolio is
overweight in offices and holds no specialist retail buildings.
- MORE -
- 8 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
Our returns were adversely affected by lower income and valuations at Piccadilly
and Battersea. These two properties - which together represent nearly 40% of the
direct portfolio by value - have planning consents for redevelopment and are
therefore let in suites on short leases. To keep the buildings as full as
possible we have had to reduce asking rents over the summer. Both buildings
showed modest falls in value at the half year end. I hope that these valuation
trends will be reversed in the not too distant future when West End office and
inner London residential site values start to improve.
Our strategy is to reduce the direct portfolio and switch capital into equities.
The only sale completed in the half year was at Swanley, which was under offer
in March. Since the half year end we have completed two further sales totalling
#7.5m. At Southampton the price achieved was 29% ahead of the March valuation
and 57% ahead of the valuation this time last year. The sale price for Tavern
Quay was 10% ahead of the March valuation and 33% ahead of the valuation this
time last year. Further sales are planned.
At Piccadilly, we are working on the outstanding conditions attached to our
planning consent and have opened negotiations with our freeholder, the Crown
Estate, for a new ground lease. At the Colonnades complex in Paddington we are
converting 3,600 sq ft of surplus storage space to air-conditioned offices with
a new access. We are focusing on minimising voids, even where we are only able
to offer tenants relatively short occupancies. The rental value of our vacant
space at the end of September was 10.6% of the rental value of the entire direct
property portfolio. The equivalent figure at end March 2003 was 10.4%. Almost
100% of the vacant space is accounted for by voids at the redevelopment
opportunities in Battersea and Piccadilly and by a 36,000 sq ft modern warehouse
at Swindon.
Unquoted Investments
We have made no investments in unquoted companies during the period and
Controlrun, the petrol filling station owner and operator, remains the Trust's
only unquoted investment. Here our strategy is to sell the portfolio. We
completed two sales in the first half at prices exceeding the most recent
independent valuations. The remaining two properties, both in Milton Keynes, are
currently being marketed.
Looking ahead to 2004
The recovery in the global economy will ensure some improvement in tenant demand
for offices, however the timing and extent of this is keenly argued. The
optimists (of which property markets have their fair share) believe that job
growth in government, financial and service industries will be rapid through
2004 and 2005, vacancy rates will fall fast and rental values will start to rise
again within the next year. The pessimists predict a much slower recovery in the
demand for office space with fitful job growth following slowly in the wake of
economic growth, and they point to the growing trend of moving service sector
jobs to locations outside Europe. The office optimists also tend to be retail
pessimists. They foresee retail sales volumes and retail tenant demand declining
as base rates are increased to ward off a threatened rise in inflation. These
base rate rises would hit the disposable incomes of those shoppers with high
levels of credit card and mortgage debt. Such an outlook is possible, but I find
it hard to visualise strong economic growth, sufficient to create a large number
of new office jobs, in a period when consumer expenditure is seriously in
decline.
- MORE -
- 9 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
Property investment demand looks set to remain strong well into 2004. Pessimists
predict that the level of buying interest thereafter may decline if long bond
yields rise and equity markets are strong. Optimists see the current level of
investment demand being so strong and the supply of investments so static that
the buying interest will only wane after yields have been driven down still
further. If base rate and long bonds are to rise then this is likely to be
caused by a general increase in inflationary expectations, which in turn will
make commercial property a more attractive asset class.
My belief is that, while conditions will vary from location to location, office
markets will generally take longer to recover than the optimists believe.
Equally I foresee good quality retail property remaining attractive. I also
expect property investment demand to remain strong through 2004.
The portfolio remains overweight in the UK, reflecting the better outlook for
economic growth relative to the Eurozone. The major upside here will be the
introduction of UK REITs. If the Government rejects the idea, share prices will
have some downside protection from potential corporate activity, and we would
expect that there would continue to be a steady stream of take-overs and
attempted take-overs as the portfolios of the quoted companies were carved up
and taken offshore to avoid the impact of double taxation.
- MORE -
- 10 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
Group Statement of Total Return (Incorporating the Revenue Account)
for the half year ended 30 September 2003
(Unaudited) (Unaudited) (Audited)
Half year ended 30 September Half year ended 30 September Year ended 31 March
2003 2002 2003
Revenue Capital Total Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Total capital gains/ - 60,162 60,162 - (36,887) (36,887) - (25,633) (25,633)
(losses) from investments
Repurchase of warrants - - - - (8,885) (8,885) - (8,885) (8,885)
Investment income 8,705 - 8,705 7,195 - 7,195 11,529 - 11,529
Net rental income 1,889 - 1,889 2,514 - 2,514 4,938 - 4,938
----------- --------- ---------- ----------- --------- ---------- ----------- ---------
10,594 60,162 70,756 9,709 (45,772) (36,063) 16,467 (34,518) (18,051)
Interest receivable and 117 - 117 141 - 141 209 - 209
similar income
----------- --------- ---------- ----------- --------- ---------- ----------- ---------
Gross revenue and 10,711 60,162 70,873 9,850 (45,772) (35,922) 16,676 (34,518) (17,842)
capital gains/(losses)
Management and (801) (401) (1,202) (906) (453) (1,359) (1,702) (851) (2,553)
performance fees
Other administrative (276) - (276) (303) - (303) (570) - (570)
expenses
----------- --------- ---------- ----------- --------- ---------- ----------- ---------
Net return/(loss) on 9,634 59,761 69,395 8,641 (46,225) (37,584) 14,404 (35,369) (20,965)
ordinary activities
before interest payable
and taxation
Interest payable and (1,073) (1,073) (2,146) (1,306) (1,306) (2,612) (2,433) (2,433) (4,866)
similar charges
----------- --------- ---------- ----------- --------- ---------- ----------- ---------
Net return/(loss) on 8,561 58,688 67,249 7,335 (47,531) (40,196) 11,971 (37,802) (25,831)
ordinary activities
before taxation
Taxation on net return/ (1,194) 442 (752) (1,319) 347 (972) (2,237) 696 (1,541)
(loss) on
Ordinary activities
--------- --------- ---------- ----------- --------- ---------- ----------- --------- --
Net return/(loss) on 7,367 59,130 66,497 6,016 (47,184) (41,168) 9,734 (37,106) (27,372)
ordinary activities
after taxation
Ordinary dividends
Interim of 1.10p (2002: (3,899) - (3,899) (3,823) - (3,823) (3,823) - (3,823)
0.90p)
Final (year ended 31 - - - - - - (4,774) - (4,774)
March 2003: 1.15p)
----------- --------- ---------- ----------- --------- ---------- ----------- ---------
(3,899) - (3,899) (3,823) - (3,823) (8,597) - (8,597)
----------- --------- ---------- ----------- --------- ---------- ----------- ---------
Transfer to/(from) 3,468 59,130 62,598 2,193 (47,184) (44,991) 1,137 (37,106) (35,969)
reserves
====== ====== ====== ====== ====== ====== ======= ===== ======
Return/(loss) per 1.78p 14.29p 16.07p 1.43p (11.19)p (9.76)p 2.30p (8.78)p (6.48)p
ordinary share (Note 1)
The revenue columns of this statement represent the revenue accounts of the
Group.
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued during the period.
- MORE -
- 11 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
Group Balance Sheet
as at 30 September 2003
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
30 September 2003 30 September 2002 31 March 2003
#'000 #'000 #'000
Fixed asset investments 427,416 356,420 358,178
----------- ----------- -----------
Current assets
Debtors 574 6,149 4,267
Cash at bank and short term deposits 2,815 1,180 1,790
----------- ----------- -----------
3,389 7,329 6,057
Creditors - amounts falling due
within one year 28,275 20,550 19,914
----------- ----------- -----------
Net current liabilities (24,886) (13,221) (13,857)
----------- ----------- -----------
Total assets less current liabilities 402,530 343,199 344,321
Creditors - amounts falling due
after more than one year 40,201 40,193 40,194
----------- ----------- -----------
Total net assets 362,329 303,006 304,127
======= ======= =======
Capital and reserves
Called up share capital 102,549 107,367 104,124
Share premium 37,063 37,063 37,063
Other reserves 202,306 140,577 145,997
Revenue reserve 20,411 17,999 16,943
----------- ----------- -----------
Equity shareholders' funds 362,329 303,006 304,127
======= ======= =======
Net asset value per share 88.33p 70.55p 73.02p
- MORE -
- 12 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
Group Cash Flow Statement
for the half year ended 30 September 2003
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
30 September 2003 30 September 2002 31 March 2003
#'000 #'000 #'000
Net cash inflow from operating activities 7,930 5,849 12,483
Net cash outflow from servicing of finance (2,150) (2,500) (4,806)
Net tax recovered 313 124 442
Net cash (outflow)/inflow from financial (9,325) 34,386 46,360
investment
Equity dividends paid (4,774) (4,166) (7,989)
----------- ----------- -----------
Net cash (outflow)/inflow before financing (8,006) 33,693 46,490
Net cash outflow from financing* (4,396) (3,369) (11,270)
----------- ----------- -----------
(Decrease)/increase in cash (12,402) 30,324 35,220
======= ======= =======
Reconciliation of operating revenue to net
cash inflow from operating activities
Net revenue before interest payable and 9,634 8,641 14,404
taxation
Decrease in operating debtors 468 614 1,244
(Decrease)/increase in operating creditors (646) (850) 3
Tax deducted at source (930) (793) (1,007)
Scrip dividends included in investment income (195) - -
Performance fees paid - (1,310) (1,310)
Management fee charged to capital (401) (453) (851)
----------- ----------- -----------
7,930 5,849 12,483
======= ======= =======
Reconciliation of net cash flow to movement in
net debt
(Decrease)/increase in cash as above (12,402) 30,324 35,220
Exchange differences (76) (52) (96)
Other (7) (5) (6)
----------- ----------- -----------
Movement in net debt in the period (12,485) 30,267 35,118
Net debt at the beginning of the period (47,101) (82,219) (82,219)
----------- ----------- -----------
Net debt at the end of the period (59,586) (51,952) (47,101)
======= ======= =======
Represented by:
Bank balances, short term deposits and 2,599 1,180 1,790
overdrafts
Debt falling due within one year (21,984) (12,939) (8,697)
Debt falling due after more than one year (40,201) (40,193) (40,194)
----------- ----------- -----------
(59,586) (51,952) (47,101)
======= ======= =======
* Financing includes cash outflows from share and warrant buy-backs and inflows
from the issue of new shares on conversion of warrants.
- MORE -
- 13 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
Notes to the Accounts
1. Return per ordinary share
Revenue return per ordinary share is calculated by dividing the net
revenue return available for ordinary shareholders of #7,367,000 (half
year ended 30 September 2002: #6,016,000 and year ended 31 March 2003:
#9,734,000) by 413,645,046 (half year ended 30 September 2002:
421,776,535 and year ended 31 March 2003: 422,633,986) being the
weighted average number of ordinary shares in issue.
Capital return per ordinary share is calculated by dividing the net
capital gain attributable to ordinary shareholders of #59,130,000 (half
year ended 30 September 2002: #47,184,000 loss and year ended 31 March
2003: #37,106,000 loss) by the weighted average number of ordinary
shares in issue, as shown above.
2. Changes in share capital
During the period the Company made authorised market purchases for
cancellation of 6,300,000 of its own issued ordinary shares of 25p. As
at 30 September 2003 there were 410,194,500 ordinary shares in issue.
Since 30 September 2003 a further 55,778,214 ordinary shares of 25p have
been repurchased for cancellation. As at 27 November 2003 there were
354,416,286 ordinary shares in issue.
3. Interim statement
The interim accounts were approved by the directors on 27 November 2003.
4. Comparative information
The financial information contained in this interim statement does
not constitute statutory accounts as defined in section 240 of the
Companies Act 1985. The financial information for the six months ended
30 September 2002 and 30 September 2003 has not been audited. The
figures and financial information for the year ended 31 March 2003 are
an extract from the latest published accounts and do not constitute
statutory accounts for that year. Those accounts have been delivered to
the Registrar of Companies and included the report of the auditors,
which was unqualified and did not contain a statement under either
section 237(2) or 237(3) of the Companies Act 1985.
- MORE -
- 14 -
TR PROPERTY INVESTMENT TRUST PLC
Unaudited interim results for the half year ended 30 September 2003
Largest Quoted Investments as at 30 September 2003
Market Market Market
Value Value Value
#'000 #'000 #'000
Land Securities 34,987 Eurocommercial Properties 7,838 Quintain 3,678
(Netherlands)
Rodamco Europe 22,433 Helical Bar 6,938 Inmobiliaria Colonial 3,452
(Netherlands) (Spain)
Hammerson 18,530 Grainger Trust 6,825 Rugby Estates 3,132
British Land 18,260 Ashtenne 6,084 Fonciere Lyonnaise 3,085
(France)
Unibail (France) 18,256 Silic (France) 6,035 Capital & Regional 3,052
Liberty International 16,867 Canary Wharf Group 4,995 Beni Stabili (Italy) 2,836
Slough Estates 16,539 Cofinimmo (Belgium) 4,834 London Merchant 2,811
St Modwen Properties 16,020 Development Securities 4,658 Pirelli Real Estates 2,730
(Italy)
Castellum (Sweden) 14,551 Vastned Retail 4,565 Derwent Valley 2,703
(Netherlands)
Big Yellow Group 10,958 Metrovacesa (Spain) 4,110 Bail Investissement 2,463
(France)
Corio (Netherlands) 10,868 Vallehermoso (Spain) 4,081 Sophia (France) 2,331
Gecina (France) 9,065 Pillar Property Group 4,057 PSP Swiss Property 2,225
(Switzerland)
Klepierre (France) 8,311 Brixton 3,853
Chelsfield 7,903 Wereldhave (Netherlands) 3,817
The above 40 largest quoted investments amount to #330,736,000 or 77% of total
investments (convertibles and all classes of equities in any one company being
treated as one investment).
Principal Investment Properties as at 30 September 2003
Location Sector Tenure Size (sq ft)
Value in excess of #5m
198/202 Piccadilly and 32/34 Jermyn Street, London West End Offices and Leasehold 65,000
W1 Retail
Elizabeth House, Duke Street, Woking, Surrey Offices Freehold 54,150
The Colonnades, Bishops Bridge Road, Mixed Use Freehold 44,000
London W2
Cambridge Science Park, Cambridge Offices Leasehold 38,500
Southbank Commercial Centre, Light Industrial and Freehold 49,000
Battersea Park Road, London SW11 Offices
Value between #2m and #5m
The Quay, Ocean Village, Southampton Offices Virtual Freehold 23,150
Unit 3, Interface Business Park, Wootton Bassett Industrial Freehold 38,249
Ferrier Street Industrial Estate, Ferrier Street, Industrial Freehold 38,500
Wandsworth, London SW18
Tavern Quay Commercial Centre, Rope Street, London Light Industrial and Freehold 20,500
SE16 Offices
Value at under #2m
At 30 September 2003 the Group owned 3 further properties with individual values
of under #2 million. They are located in Addlestone, London W2 and Weybridge.
Their aggregate value was #2.6 million.
- ENDS -
For further information, please contact:
Chris Turner, TR Property Investment Trust plc
Telephone: 020 7818 4348
Stephen Westwood, Head of Investment Trusts, Henderson Global Investors
Telephone: 020 7818 5517
Stephen Phillips, Associate Director, Henderson Global Investors
Telephone: 020 7818 6417
Vicki Staveacre, Henderson Press Office
Telephone: 020 7818 4222
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UBAWRONRAUAA