FOR IMMEDIATE RELEASE
24 August 2018
LONDON & ASSOCIATED PROPERTIES PLC
RESULTS FOR THE
SIX MONTHS TO 30 JUNE 2018
London & Associated
Properties PLC (“LAP” or “the Group”) is a main market listed group
which invests in UK retail and other property whilst also managing
property assets for institutional clients.
It holds a substantial investment in Bisichi Mining PLC (main
market listed) which operates coal mines in South Africa and owns UK property
investments.
HIGHLIGHTS
- Sale of Brixton Markets for £37.3 million completed during
period:
- £16.7 million of loans repaid
- LAP’s cash available for investment stood at £20.9 million at
half year
- Group net assets of £58.3 million compared to £48.3 million and
those attributable to shareholders rose 22% to £46.5 million
against £38.0 million
- Business strategy broadened to invest in non-retail
property
- Total property assets under management stand at £186
million
- £3.0 million 11.6% Prudential debenture repaid in August saving
annualised interest cost of £0.3 million
- Retail property portfolio continues to perform satisfactorily:
- Group occupancy levels of 97% by rental income (2017: 97%)
- Formed a new JV with Metroprop Real Estate Limited:
- Contracts exchanged on £5.6 million property in Ealing,
West London
- Retail parade with consent for 8 residential flats at first
floor level
- New planning application to be made for substantial increase in
number of residential units
- Under offer on £10.0 million of industrial assets in North West
(net income of £1.0 million pa)
“In future, we will broaden our investment remit so that
we do not rely entirely on retail property. We have been less
impacted by the proliferation of CVAs and other forms of insolvency
seen recently, principally because of the type of community-focused
retail property we own. However, it is not possible completely to
avoid negative market sentiment. Therefore, we are widening our
search for new assets and, over time, we will pivot away from
having the majority of our portfolio comprised of retail assets,”
Sir Michael Heller, Chairman and
John Heller, Chief Executive.
-more-
Contact:
London & Associated Properties
PLC
Tel: 020 7415 5000
John Heller, Chief
Executive
Baron Phillips Associates
Tel: 07767 444193
Baron Phillips
Half year results for the period ended
30 June 2018
Half year review
We are pleased to report on a satisfactory first half at
London & Associated Properties
PLC (LAP). Group revenue, including our IFRS 10 subsidiaries
Bisichi Mining PLC (Bisichi) and Dragon Retail Properties Limited
(Dragon), increased by 31% to £26.6 million from £20.2 million as
compared with the same period last year. Profits before tax
increased to £3.7 million from a break-even position last year.
This improvement was due to improved trading at Bisichi. LAP, which
will benefit in the future from its recently improved cash
position, and Dragon operated at breakeven in this period. Group
net assets rose 20% to £58.3 million compared with £48.3 million at
30 June 2017 and net assets
attributable to shareholders rose 22% to £46.5 million as compared
with £38.0 million.
The Group’s property activities were boosted significantly by
completion of the £37.25 million sale of our two Brixton markets in
April. The net cash received, after payment of fees due to
agents and lawyers, was £36.4 million. We have repaid £13.41
million of our Santander loan and £3.27 million of our Europa
Mezzanine loan. The balance has been added to LAP’s cash
reserves which, at the half year amounted to £20.9 million.
As a result of selling Brixton Markets, LAP’s rental income
dipped slightly to £3.2 million from £3.5 million in the comparable
period. On an annualised basis, the loss of income from that
property is around £1.0 million but this is mostly offset by
interest expense savings of £0.8 million resulting from the loan
repayments mentioned above.
The Brixton Markets’ sale generated a taxable gain but we are
able to offset most of this gain by utilising brought-forward
capital and other taxation losses. However, new UK taxation
rules restrict the utilisation of other taxation losses. This means
that corporation tax will be payable on 2018 net taxable income and
£0.56 million has been provided in the half year
accounts.
Since the half-year end, I am pleased to report that, in August,
we repaid the remaining £3.0 million of a 1988 Prudential
debenture. This historical debenture carried a coupon of
11.6%. We are in the final stages of negotiating a
replacement loan with a lender with whom we have not worked
previously. The portfolio to be charged to the new lender
includes the properties that were collateral for the Prudential
debenture, plus a nightclub that we own in Coldharbour Lane,
Brixton. Drawdown will take place in the second half of this
year and we expect net interest savings for the Group to be
approximately £0.25 million per annum.
During the period under review, LAP’s directors have reviewed
the business strategy and concluded that, in future, we will
broaden our investment remit so that we do not rely entirely on
retail property. We have been less impacted by the
proliferation of CVAs and other forms of insolvency seen recently,
principally because of the type of community-focused retail
property that we own. However, it is not possible completely to
avoid negative market sentiment. Therefore, we are widening
our search for new assets and, over time, we will pivot away from
having the majority of our portfolio comprised of retail
assets.
Property assets under management including those of LAP,
Bisichi, Dragon and our joint ventures
Our property portfolio continues to perform
satisfactorily. The largest asset in our directly owned
portfolio is Orchard Square shopping centre in Sheffield.
This centre continues to trade successfully, and we are carrying
out a number of lettings to enhance further the retail and leisure
offer there. Our strategy is to complement the fashion retail
outlets with a number of leisure and food offerings, particularly
with local operators who have distinct and independent
concepts. Currently, we are under offer to two exciting
restaurant operators and I will update shareholders as matters
progress.
Elsewhere at Orchard Square, we have a number of lease renewals
underway and I am pleased to say that, so far, almost all of our
retailers have asked for new leases. The only exceptions are
two national retailers who are implementing a programme of
retrenchment throughout the country. We believe that this
demonstrates the ongoing appeal of the Centre, although we are
firmly of the opinion that introducing new facias to keep a
shopping centre fresh is a positive development.
At West Bromwich, we will be
fully let again following the imminent completion of two leases to
a restaurant and a coffee shop. This Centre continues to
trade at a high level of occupancy with a number of independent
traders to complement the national retailers there. The
centre also houses the town’s council-run market and principal
transport hub, which ensures that it remains a relevant place to
shop.
The rest of the portfolio continues to trade well with group
occupancy levels of 97% by rental income (2017: 97%).
In May, along with Bisichi, we formed a new joint venture with
Metroprop Real Estate Limited, an established and successful
developer, and exchanged contracts on a property in West Ealing,
London. LAP and Bisichi will each
own 45% of the joint venture. The agreed price for the
property is £5.6 million, and LAP and Bisichi each will invest
c£1.0 million.
The property is a parade of five shops with a service yard which
has an existing planning consent for eight flats at the first-floor
level. We are looking to increase substantially the number of
flats and will be making a new planning application in due
course. West Ealing is on the new Elizabeth Rail Line that will cut journey times
to the West End to just 15 minutes, and we believe the flats will
be highly desirable. We anticipate that the flats will have a
gross development value of sub £500,000 per unit. Completion
is scheduled for late August.
We are also under offer on two separate multi-let industrial
assets in the North West offering good asset management
opportunities. The combined value of both investments is
c£10.0 million and the net income will be c£1.0 million per
annum. While these assets represent something of a departure
from our traditional retail portfolio, we believe that our skills
will be relevant to multi-let industrial estates. In
addition, we are acquiring one of these assets in conjunction with
an experienced asset manager who will manage the estate and
development for a fee.
Project Harrogate, our joint
venture with Oaktree Capital Management, continues to trade
satisfactorily.
At Kings Lynn, we are making
progress on the development of the former Beales Department store
to create a new unit for H&M to open in spring 2019 together
with four other units. The remainder of the shopping centre
trades consistently well, although income there will be adversely
affected in the short term by the insolvency of Poundworld who have
vacated their store.
The Rushes, Loughborough will
similarly suffer in the short term from the loss of its Poundworld
store, although the Centre is otherwise effectively fully let and
is trading well.
At Kingsgate, Dunfermline, occupancy levels remain constant, and
will be boosted as we are close to putting one of the large stores
under offer to an international retailer.
Following a refinancing at the end of last year, our equity
interest in the joint venture is now 3.17% of the total. The
impact of any drop in income at the Harrogate Shopping Centres to
LAP is therefore strictly limited. However, we continue to receive
fees for our asset and property management contracts.
Bisichi Mining PLC, our 41.5% IFRS 10 subsidiary, had a strong
first half with profit before tax of £4.0 million (2017: £0.24
million). Black Wattle, its coal mine in South Africa, continued to benefit from
infrastructure improvements to the coal washing plant. These have
enabled it to deliver a higher rate of production from its opencast
areas and achieve an increased overall yield compared to the first
half of 2017. The mine’s total production was 670,000 metric tonnes
(2017: 582,000 metric tonnes) during the period under review. The
increased revenues were due to higher coal prices, along with a
stable South African Rand and improved production.
Bisichi’s UK retail property portfolio, which is managed by LAP,
continues to perform well.
Dragon Retail Properties Limited, our IFRS 10 subsidiary company
owned jointly with Bisichi, repaid some £65,000 of its loan to
Santander. This leaves a loan outstanding of £1.2 million
(31 December 2017: £1.3
million).
Other
We do not intend to pay a dividend at the half year point;
however, our strategy is to maximise income over the medium term
and our dividend policy will reflect this once our cash has been
reinvested and our income has returned to previous levels.
Following approval at the June
2018 Annual General Meeting, the 2017 final and special
dividends of 0.3 pence are payable on
14 September 2018.
We would like to thank our colleagues for all their hard work
over the period under review. LAP is at an exciting juncture
in its development and we look forward to keeping shareholders
informed as matters progress.
Sir Michael Heller
John
Heller
Chairman
Chief Executive
23 August 2018
Consolidated income statement
for the six months ended 30 June
2018
|
|
6 months |
6
months |
Year |
|
|
ended |
ended |
ended |
|
|
30 June |
30
June |
31
December |
|
|
2018 |
2017 |
2017 |
|
|
(unaudited) |
(unaudited) |
(audited) |
|
Notes |
£’000 |
£’000 |
£’000 |
Group revenue |
1 |
26,557 |
20,237 |
44,979 |
Operating costs |
|
(21,064) |
(18,276) |
(37,428) |
Operating profit |
1 |
5,493 |
1,961 |
7,551 |
Finance income |
2 |
25 |
61 |
105 |
Finance expenses |
2 |
(1,975) |
(2,177) |
(4,268) |
Debenture break cost |
|
- |
- |
(14) |
Result before valuation and other
movements |
|
3,543 |
(155) |
3,374 |
|
|
|
|
|
Non–cash changes in valuation of
assets and liabilities and other movements |
|
|
|
|
Increase in value of investment
properties |
|
- |
- |
9,373 |
Write off investment in joint
venture |
|
- |
- |
(1,827) |
(Decrease)/increase in securities
investments held at fair value |
|
(31) |
(1) |
3 |
Adjustment to interest rate
derivative |
|
168 |
179 |
355 |
Result including revaluation and
other movements |
|
3,680 |
23 |
11,278 |
Profit for the period before
taxation |
1 |
3,680 |
23 |
11,278 |
Income tax charge |
3 |
(941) |
(7) |
(2,982) |
Profit for the period |
|
2,739 |
16 |
8,296 |
|
|
|
|
|
Attributable to: |
|
|
|
|
Equity holders of the Company |
|
961 |
(104) |
7,686 |
Non–controlling interest |
|
1,778 |
120 |
610 |
Profit for the period |
|
2,739 |
16 |
8,296 |
|
|
|
|
|
Profit/(loss) per share – basic and
diluted |
4 |
1.13p |
(0.12)p |
9.01p |
Consolidated statement of comprehensive income
for the six months ended 30 June
2018
|
30 June |
30 June |
31 December |
|
2018 |
2017 |
2017 |
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
|
|
£'000 |
£'000 |
£’000 |
|
|
|
|
Profit for the
period |
2,739 |
16 |
8,296 |
Other comprehensive
income: |
|
|
|
|
|
|
|
Items that may be subsequently
recycled to the income statement: |
|
|
|
Exchange differences on translation
of foreign operations |
(226) |
7 |
91 |
Gain on available for sale
investments |
- |
28 |
103 |
Taxation |
- |
(3) |
(20) |
Other comprehensive
(expense)/income for the period, net of tax |
(226) |
32 |
174 |
Total comprehensive income for
the period, net of tax |
2,513 |
48 |
8,470 |
Attributable to: |
|
|
|
Equity shareholders |
885 |
(91) |
7,753 |
Non–controlling interest |
1,628 |
139 |
717 |
|
2,513 |
48 |
8,470 |
Consolidated balance sheet
at 30 June 2018
|
|
30 June |
30 June |
31 December |
|
|
2018 |
2017 |
2017 |
|
|
(unaudited) |
(unaudited) |
(audited) |
|
Notes |
£'000 |
£'000 |
£'000 |
Non–current assets |
|
|
|
|
Market value of properties
attributable to Group |
|
78,040 |
105,100 |
78,025 |
Present value of head leases |
|
3,228 |
4,763 |
3,233 |
Property |
5 |
81,268 |
109,863 |
81,258 |
Mining reserves, plant and
equipment |
|
8,089 |
8,949 |
8,735 |
Investments in joint ventures |
|
- |
455 |
- |
Loan to joint venture |
|
- |
1,398 |
- |
Held to maturity investments |
|
1,748 |
1,748 |
1,748 |
Other investments at fair value |
|
32 |
46 |
51 |
Deferred tax |
|
- |
1,139 |
- |
|
|
91,137 |
123,598 |
91,792 |
Current assets |
|
|
|
|
Inventories |
|
985 |
842 |
828 |
Assets held for sale |
5 |
- |
- |
36,441 |
Trading property |
|
560 |
- |
- |
Trade and other receivables |
|
9,190 |
6,352 |
7,132 |
Interest rate derivatives |
6 |
- |
2 |
1 |
Investments in listed securities at
fair value (previously listed as Available for sale
investments) |
|
1,032 |
779 |
1,050 |
Investments in UK listed securities
held at fair value |
|
17 |
18 |
19 |
Cash and cash equivalents |
|
27,549 |
5,329 |
7,528 |
|
|
39,333 |
13,322 |
52,999 |
Total assets |
|
130,470 |
136,920 |
144,791 |
Current liabilities |
|
|
|
|
Trade and other payables |
|
(13,866) |
(14,268) |
(12,909) |
Borrowings |
|
(4,783) |
(806) |
(4,288) |
Current tax liabilities |
|
(839) |
(117) |
(358) |
|
|
(19,488) |
(15,191) |
(17,555) |
Non–current liabilities |
|
|
|
|
Borrowings |
|
(45,110) |
(64,544) |
(61,661) |
Interest rate
derivatives |
6 |
(267) |
(612) |
(435) |
Present value of head leases on
properties |
|
(3,228) |
(4,763) |
(3,233) |
Provisions |
|
(1,276) |
(1,283) |
(1,349) |
Deferred tax liabilities |
|
(2,837) |
(2,239) |
(3,848) |
|
|
(52,718) |
(73,441) |
(70,526) |
Total liabilities |
|
(72,206) |
(88,632) |
(88,081) |
Net assets |
|
58,264 |
48,288 |
56,710 |
Equity attributable to the owners
of the parent |
|
|
|
|
Share capital |
|
8,554 |
8,554 |
8,554 |
Share premium account |
|
4,866 |
4,866 |
4,866 |
Translation reserve (Bisichi Mining
PLC) |
|
(772) |
(725) |
(695) |
Capital redemption reserve |
|
47 |
47 |
47 |
Retained earnings (excluding treasury shares) |
|
33,948 |
25,413 |
33,227 |
Treasury shares |
|
(145) |
(145) |
(145) |
Retained earnings |
|
33,803 |
25,268 |
33,082 |
Total equity attributable to
equity shareholders |
|
46,498 |
38,010 |
45,854 |
Non – controlling interest |
|
11,766 |
10,278 |
10,856 |
Total equity |
|
58,264 |
48,288 |
56,710 |
|
|
|
|
|
Net assets per share |
7 |
54.50p |
44.55p |
53.74p |
Diluted net assets per
share |
7 |
54.50p |
44.55p |
53.74p |
Consolidated statement of changes in shareholders’ equity
for the six months ended 30 June
2018
|
Share
capital
£’000 |
Share
premium
£’000 |
Translation
reserves
£’000 |
Capital
redemption
reserve
£’000 |
Treasury
shares
£’000 |
Retained
earnings
excluding
treasury
shares
£’000 |
Total
excluding
Non–
Controlling
Interests
£’000 |
Non–controlling
Interests
£’000 |
Total
equity
£’000 |
Balance at 1 January 2017 |
8,554 |
4,866 |
(728) |
47 |
(145) |
25,648 |
38,242 |
10,389 |
48,361 |
(Loss)/profit for the period |
- |
- |
- |
- |
- |
(104) |
(104) |
120 |
16 |
Other comprehensive
income: |
|
|
|
|
|
|
|
|
|
Currency translation |
- |
- |
3 |
- |
- |
- |
3 |
4 |
7 |
Gain on available for sale
investments (net of tax) |
- |
- |
- |
- |
- |
10 |
10 |
15 |
25 |
Total other comprehensive
income |
- |
- |
3 |
- |
- |
10 |
13 |
19 |
32 |
Total comprehensive
income/(expense) |
- |
- |
3 |
- |
- |
(94) |
(91) |
139 |
48 |
Transactions with
owners: |
|
|
|
|
|
|
|
|
|
Dividends – equity holders |
- |
- |
- |
- |
- |
(141) |
(141|) |
- |
(141) |
Dividends –
non–controlling
interests |
- |
- |
- |
- |
- |
- |
- |
(250) |
(250) |
Transactions with owners |
- |
- |
- |
- |
- |
(141) |
(141) |
(250) |
(250) |
Balance at 30 June 2017
(unaudited) |
8,554 |
4,866 |
(725) |
47 |
(145) |
25,413 |
38,010 |
10,278 |
48,288 |
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2017 |
8,554 |
4,866 |
(728) |
47 |
(145) |
25,648 |
38,242 |
10,389 |
48,631 |
Profit for year |
- |
- |
- |
- |
- |
7,686 |
7,686 |
610 |
8,296 |
Other comprehensive
income: |
|
|
|
|
|
|
|
|
|
Currency translation |
- |
- |
33 |
- |
- |
- |
33 |
58 |
91 |
Gain on available for sale
investments (net of tax) |
- |
- |
- |
- |
- |
34 |
34 |
49 |
83 |
Total other comprehensive
income |
- |
- |
33 |
- |
- |
34 |
67 |
107 |
174 |
Total comprehensive
income |
- |
- |
33 |
- |
- |
7,720 |
7,753 |
717 |
8,470 |
Transaction with owners: |
|
|
|
|
|
|
|
|
|
Dividends – equity holders |
- |
- |
- |
- |
- |
(141) |
(141) |
- |
(141) |
Dividends –
non–controlling
interests |
- |
- |
- |
- |
- |
- |
- |
(250) |
(250) |
Transactions with owners |
- |
- |
- |
- |
- |
(141) |
(141) |
(250) |
(391) |
Balance at 31 December 2017
(audited) |
8,554 |
4,866 |
(695) |
47 |
(145) |
33,227 |
45,854 |
10,856 |
56,710 |
Consolidated statement of changes in shareholders’ equity -
continued
for the six months ended 30 June
2018
|
|
|
|
|
|
|
|
|
|
Share
capital
£’000 |
Share
premium
£’000 |
Translation
reserves
£’000 |
Capital
redemption
reserve
£’000 |
Treasury
shares
£’000 |
Retained
earnings
excluding
treasury
shares
£’000 |
Total
excluding
Non–
Controlling
Interests
£’000 |
Non–controlling
Interests
£’000 |
Total
equity
£’000 |
Balance at 1 January 2018 |
8,554 |
4,866 |
(695) |
47 |
(145) |
33,227 |
45,854 |
10,856 |
56,710 |
Profit for the period |
- |
- |
- |
- |
- |
961 |
961 |
1,778 |
2,739 |
Other comprehensive
income: |
|
|
|
|
|
|
|
|
|
Currency translation |
- |
- |
(77) |
- |
- |
- |
(77) |
(149) |
(226) |
Total other comprehensive
income |
- |
- |
(77) |
- |
- |
- |
(77) |
(149) |
(226) |
Total comprehensive
(expense)/income |
- |
- |
(77) |
- |
- |
961 |
884 |
1,629 |
2,513 |
Transactions with
owners: |
|
|
|
|
|
|
|
|
|
Dividends – equity holders |
- |
- |
- |
- |
- |
(256) |
(256) |
- |
(256) |
Dividends – non-controlling
interests |
- |
- |
- |
- |
- |
- |
- |
(742) |
(742) |
Equity share options |
- |
- |
- |
- |
- |
16 |
16 |
23 |
39 |
Transactions with owners |
|
|
|
|
|
(240) |
(240) |
(719) |
(959) |
Balance at 30 June 2018
(unaudited) |
8,554 |
4,866 |
(772) |
47 |
(145) |
33,948 |
46,498 |
11,766 |
58,264 |
Consolidated cash flow statement
for the six months ended 30 June
2018
|
6
months |
6 months |
Year |
|
ended |
ended |
ended |
|
30
June |
30 June |
31 December |
|
2018 |
2017 |
2017 |
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
|
|
£'000 |
£'000 |
£'000 |
Operating activities |
|
|
|
Profit for the year before
taxation |
3,680 |
23 |
11,278 |
Finance income |
(25) |
(61) |
(105) |
Finance expense |
1,975 |
2,177 |
4,268 |
Debenture break cost |
– |
– |
14 |
Realised gain on disposal of other
investments |
– |
– |
(3) |
Increase in value of investment
properties |
– |
– |
(9,373) |
Write off investments in joint
venture |
– |
– |
1,827 |
Expenditure on trading property |
(560) |
– |
– |
Adjustment to interest rate
derivative |
(168) |
(179) |
(355) |
Depreciation |
1,082 |
962 |
1,804 |
(Loss)/profit on disposal of
non–current assets |
37 |
(3) |
(3) |
Share based payment expense |
39 |
– |
– |
Exchange adjustments |
63 |
28 |
258 |
Change in inventories |
(233) |
881 |
896 |
Change in
receivables
|
(2,530) |
689 |
196 |
Change in payables |
969 |
970 |
(415) |
Cash generated from
operations |
4,329 |
5,487 |
10,287 |
Income tax paid |
(1,328) |
23 |
(14) |
Cash inflows from operating
activities |
3,001 |
5,510 |
10,273 |
Investing activities |
|
|
|
Disposal of shares and loans held to
maturity |
– |
126 |
– |
Disposal of assets held for
sale |
– |
– |
(56) |
Acquisition of investment
properties, mining reserves, plant and equipment |
(1,143) |
(1,282) |
(1,771) |
Sale of investment properties, plant
and equipment – continuing operations |
– |
36 |
29 |
Sale of assets held for sale |
36,441 |
– |
– |
Interest
received |
94 |
228 |
137 |
Cash inflows/(outflows) from
investing activities |
35,392 |
(892) |
(1,661) |
Financing activities |
|
|
|
Interest
paid |
(2,027) |
(2,056) |
(3,963) |
Interest on obligation under finance
leases |
(91) |
(96) |
(178) |
Debenture stock break costs
paid |
– |
– |
(14) |
Repayment of bank loan – Dragon
Retail Properties Limited |
(65) |
– |
– |
Receipt of bank loan – Bisichi
Mining PLC |
63 |
11 |
23 |
Repayment of bank loan – Bisichi
Mining PLC |
(3) |
(58) |
(25) |
Repayment of bank loan |
(16,674) |
– |
– |
Short term loan from joint ventures
and related parties |
– |
– |
(30) |
Repayment of debenture stocks |
– |
(750) |
(750) |
Equity dividends paid |
– |
– |
(141) |
Equity dividends paid –
non–controlling interests |
(63) |
(63) |
(250) |
Cash outflows from financing
activities |
(18,860) |
(3,012) |
(5,328) |
Consolidated cash flow statement - continued
for the six months ended 30 June
2018
|
6
months |
6 months |
Year |
|
ended |
ended |
ended |
|
30
June |
30 June |
31 December |
|
2018 |
2017 |
2017 |
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
|
|
£'000 |
£'000 |
£'000 |
Net increase in cash and cash
equivalents |
19,533 |
1,606 |
3,284 |
Cash and cash equivalents at
beginning of period |
6,266 |
2,931 |
2,931 |
Exchange adjustment |
(11) |
(2) |
51 |
Cash and cash equivalents at end
of period |
25,788 |
4,535 |
6,266 |
The cash flows above relate to continuing and discontinued
operations.
Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash
equivalents comprise the following balance sheet amounts:
|
|
|
|
Cash and cash equivalents (before
bank overdrafts) |
27,549 |
5,329 |
7,528 |
Bank overdrafts |
(1,761) |
(794) |
(1,262) |
Cash and cash equivalents at end
of period |
25,788 |
4,535 |
6,266 |
£120,000 cash deposits at 30 June
2018 were charged as security to debenture stocks.
Notes to the half year report
for the six months ended 30 June
2018
|
|
|
|
1. Segmental
analysis |
6 months |
6
months |
Year |
|
ended |
ended |
ended |
|
30
June |
30
June |
31
December |
|
2018 |
2017 |
2017 |
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
|
|
£'000 |
£'000 |
£'000 |
Revenue |
|
|
|
LAP |
|
|
|
- Rental Income |
2,799 |
3,136 |
6,825 |
- Management income
from third parties |
268 |
286 |
542 |
Bisichi |
|
|
|
- Rental Income |
549 |
558 |
1,112 |
- Mining |
22,858 |
16,174 |
36,334 |
Dragon |
|
|
|
- Rental Income |
83 |
83 |
166 |
|
26,557 |
20,237 |
44,979 |
Operating
profit |
|
|
|
LAP |
1,182 |
1,400 |
3,556 |
Bisichi |
4,240 |
500 |
3,995 |
Dragon |
71 |
61 |
- |
|
5,493 |
1,961 |
7,551 |
|
|
|
|
(Loss)/profit
before taxation |
|
|
|
LAP |
(308) |
(237) |
9,614 |
Bisichi |
3,939 |
221 |
1,696 |
Dragon |
49 |
39 |
(32) |
|
3,680 |
23 |
11,278 |
|
|
|
|
2. Finance
costs |
6 months |
6
months |
Year |
|
ended |
ended |
ended |
|
30
June |
30
June |
31
December |
|
2018 |
2017 |
2017 |
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
Finance income |
25 |
61 |
105 |
Finance expenses: |
|
|
|
Interest on bank loans
and overdrafts |
(1,051) |
(1,109) |
(2,223) |
Other loans |
(659) |
(726) |
(1,414) |
Unwinding of discount
(Bisichi Mining PLC) |
- |
(48) |
(92) |
Interest on
derivatives |
(141) |
(166) |
(337) |
Interest on
obligations under finance leases |
(124) |
(128) |
(202) |
Total finance
expenses |
(1,975) |
(2,177) |
(4,268) |
|
(1,950) |
(2,116) |
(4,163) |
Notes to the half year report - continued
|
3. Income
tax |
6 months |
6
months |
Year |
|
ended |
ended |
ended |
|
30
June |
30
June |
31
December |
|
2018 |
2017 |
2017 |
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
|
|
£'000 |
£'000 |
£'000 |
Current tax |
1,810 |
108 |
364 |
Deferred tax |
(869) |
(101) |
2,618 |
|
941 |
7 |
2,982 |
4. Earnings per share |
6 months |
6
months |
Year |
|
ended |
ended |
ended |
|
30
June |
30
June |
31
December |
|
2018 |
2017 |
2017 |
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
|
Group
profit/(loss) after tax (£’000) |
961 |
(104) |
7,686 |
|
|
|
|
Weighted average
number of shares in issue for the period ('000) |
85,322 |
85,322 |
85,322 |
Basic
earnings per share |
1.13p |
(0.12)p |
9.01p |
Diluted number
of shares in issue ('000) |
85,322 |
85,322 |
85,322 |
Diluted
earnings per share |
1.13p |
(0.12)p |
9.01p |
5. Properties
Properties at 30 June 2018 are
included at valuation as at 31 December
2017, plus additions in the period.
No properties were sold during the six months ended 30 June 2018.
£36.441 million of assets held for sale (Brixton markets) at
31 December 2017, were sold in
April 2018.
6. Interest rate derivatives
At 30 June 2018 the fair value
liability was £267,000 as valued by the hedge provider
(30 June 2017: £612,000, 31 December 2017: £435,000).
At 30 June 2018 the fair value
asset was nil as valued by the hedge provider (30 June 2017: £2,000, 31
December 2017: £1,000).
Under IFRS 13 the hedges are not deemed to be eligible for hedge
accounting and any movement in the value of the hedge is charged
directly to the consolidated income statement.
Notes to the half year report - continued
7. Net assets per
share |
30
June |
30
June |
31
December |
|
2018 |
2017 |
2017 |
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
|
Shares in issue
('000) |
85,322 |
85,322 |
85,322 |
Net assets per balance
sheet (£'000) |
46,498 |
38,010 |
45,854 |
Basic net assets
per share |
54.50p |
44.55p |
53.74p |
|
|
|
|
Shares in issue
diluted by outstanding share options ('000) |
85,322 |
85,322 |
85,322 |
Net assets after issue
of share options (£'000) |
46,498 |
38,010 |
45,854 |
Fully diluted net
assets per share |
54.50p |
44.55p |
53.74p |
8. Related party transactions
The related parties and the nature of costs recharged are as
disclosed in the group’s annual financial statements for the year
ended 31 December 2017.
9. Dividends
There is no interim dividend payable for the period
(30 June 2017: Nil).
The final and special dividend in respect of 2017 of 0.3p per
share, amounting to £256,000, is payable on 14 September
2018. As the 2017 final dividend was approved by the
shareholders at the Annual General Meeting held on 19 June 2018, it is included as a liability in
these interim financial statements.
10. Risks and uncertainties
The group’s principal risks and uncertainties are reported on
pages 7 and 8 in the 2017 Annual Report. They have been
reviewed by the Directors and remain unchanged for the current
period.
The largest area of estimation and uncertainty in the interim
financial statements is in respect of the valuation of investment
properties (which are not revalued at the half year) and the
valuation of interest rate derivatives.
For our subsidiary, Bisichi Mining PLC, it also relates to
currency movements and coal mining activities in South Africa, including depreciation,
impairment and the provision for rehabilitation (relating to
environmental rehabilitation of mining areas).
11. Financial information
The above financial information does not constitute statutory
accounts within the meaning of section 434 of the Companies Act
2006. The figures for the year ended 31 December 2017 are based upon the latest
statutory accounts, which have been delivered to the Registrar of
Companies; the report of the auditor’s on those accounts was
unqualified and did not contain a statement under Section 498(2) or
(3) of the Companies Act 2006.
As required by the Disclosure and Transparency Rules of the UK's
Financial Services Authority, the interim financial statements have
been prepared in accordance with the International Financial
Reporting Standards (IFRS) and in accordance with both IAS 34
'Interim Financial Reporting' as adopted by the European Union and
the disclosure requirements of the Listing Rules.
The half year results have not been audited or subject to review
by the company's auditor.
The annual financial statements of London & Associated Properties PLC are
prepared in accordance with IFRS as adopted by the European
Union. The same accounting policies are used for the six
months ended 30 June 2018 as were
used for the year ended 31 December
2017.
As stated in the 2017 Annual Report in the group accounting
policies, Bisichi Mining PLC and Dragon Retail Properties Limited
are consolidated with LAP, as required by IFRS 10.
The assessment of new standards, amendments and interpretations
issued but not effective, is that these are not anticipated to have
a material impact on the financial statements.
The following new and revised standards that are applicable to
the group were issued but not yet effective:
IFRS 16 – Leases
The following new standards have become effective and have been
adopted by the Group during the year:
IFRS 15 – Revenue from Contracts with Customers
The Group has applied IFRS 15 retrospectively and the new
standard had no material financial impact on the
accounts.
IFRS 9 – Financial Instruments
The adoption of IFRS 9 has resulted in changes in the Group's
accounting policies for the recognition, classification and
measurement of financial assets and financial liabilities and
impairment of financial assets. The only material impact of IFRS 9
on the Group financial statements related to the movement in fair
value of the Groups held for trading (previously available for
sale) investments and non-current other investments (“the
investments”). Under IAS 39 the movement in the investments was
measured at fair value through other comprehensive income and taken
to an available for sale reserve. Under IFRS 9 the movements are
measured at fair value through profit and loss and taken to
retained earnings. The Group has not restated prior periods as
allowed by the transition provisions of IFRS 9.
There is no material seasonal impact on the group’s financial
performance.
Taxes on income in the interim periods are accrued using tax
rates expected to be applicable to total annual earnings.
The interim financial statements have been prepared on the going
concern basis as the Directors are satisfied the group has adequate
resources to continue in operational existence for the foreseeable
future.
12. Board approval
The half year results were approved by the Board of London & Associated Properties PLC on 23
August
2018.
Directors' responsibility statement
The Directors confirm that to the best of their knowledge:
(a) the condensed set of financial statements have been prepared
in accordance with applicable accounting standards and IAS 34
Interim Financial Reporting as adopted by the
EU;
(b) the interim management report includes a fair review of the
information required by:
(1) DTR 4.2.7R of the Disclosure and Transparency Rules,
being an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements ; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
(2) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do
so.
This report contains forward-looking statements. These
statements are based on current estimates and projections of
management and currently available information. Future statements
are not guarantees of the future developments and results outlined
therein. Rather, future developments and results are dependent on a
number of factors; they involve various risks and uncertainties and
are based upon assumptions that may not prove to be accurate. Risks
and uncertainties identified by the Group are set out on pages 7
and 8 of the 2017 Annual Report & Accounts. We do not assume
any obligation to update the forward-looking statements contained
in this report.
Signed on behalf of the Board on 23 August
2018
Sir Michael
Heller
Anil
Thapar
Director
Director
Directors and
advisors |
|
Directors |
Executive
directors |
* Sir Michael
Heller MA FCA (Chairman) |
John A Heller
LLB MBA (Chief Executive) |
Anil K Thapar
FCCA (Finance Director) |
|
|
Non-executive
directors |
† Howard D
Goldring BSC (ECON) ACA |
#†Clive A
Parritt FCA CF FIIA |
Robin
Priest MA |
|
* Member of the
nomination committee |
# Senior independent
director |
† Member of the audit,
remuneration and nomination |
committees. |
|
|
Secretary &
registered office |
Anil K Thapar
FCCA |
24 Bruton Place, |
London W1J 6NE |
|
|
Registrars &
transfer office |
Link
Asset Services
Shareholder Services |
The Registry, 34
Beckenham Road |
Beckenham, Kent
BR3 4TU |
|
UK
Telephone: 0871 664 0300
(Calls cost 12p per minute plus network access charges; lines are
open Monday to Friday between 9.00am and 5.30pm)
International Telephone: +44 371 664 0300
(Calls outside the United Kingdom will be charged at applicable
international rate)
Website: www.linkassetservices.com
E-mail: shareholderenquiries@linkgroup.co.uk |
|
Company
registration number |
341829 (England and
Wales) |
|
|
Website |
www.lap.co.uk |
|
E-mail |
admin@lap.co.uk |