RNS Number:9500A
Property Fund Management plc
10 September 2002
FOR IMMEDIATE RELEASE
10th September 2002
PROPERTY FUND MANAGEMENT PLC:
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2002
Property Fund Management plc is the only fully quoted property fund manager
specialising in establishing and acting for institutional funds focused on
management intensive industrial property both within the UK and Europe. PFM
gained its listing in May 2002 through a Placing that raised #4.797m net of
expenses.
HIGHLIGHTS
* First results since flotation in May 2002
* Turnover more than doubled at #4.725m - up from #2.293m
* Pre-tax profits of #866,000 against losses of #420,000
* Interim dividend of 1.5p a share declared
* PFM now manages #729m of gross property assets - #541m in UK and #188m
(Euro298m) in Europe
* Funding in place to take property under management to over #1bn
* Joint venture company established with Grupo Lar Grosvenor to research
Spanish industrial property market
CHAIRMAN'S STATEMENT
The Board of Property Fund Management plc is pleased to announce its interim
results for the six months ended 30 June 2002.
These first results following our successful flotation on 22 May 2002 show
continued improvement in our business performance, and particularly justify the
high level of investment in our European infrastructure over the last few years.
The Group's flotation was the most significant event in the first half, dealings
commenced on 22 May and we raised #4.797m net of expenses. We trade profitably
and cash generatively and this money is earmarked for seed capital in a number
of new funds we have under discussion and negotiation.
The Group made profits before tax of #866,000 (2001: #420,000 loss) on turnover
of #4.725m (2001: #2.293m). Turnover rose substantially in the first half,
largely due to the fees generated by our investment programme in The European
Industrial Partnership and The Industrial Trust. The increased assets under our
management have added to our core management fees.
The Group's cost base has increased over the same period last year as a result
of the strengthened European team to administer the growth in European
activities. We anticipate that this level will be maintained prior to increasing
further due to additional areas of activity and territories of operation.
We are pleased to declare a dividend of 1.5 pence per share which will be
payable on 30 September 2002 to shareholders on the register at 9 September
2002.
Glyn Hirsch
Executive Chairman
10 September 2002
CHIEF EXECUTIVE'S REVIEW
The trend for institutional indirect investment in property is now well
established and specialist managers like Property Fund Management are well
placed to service this demand. The asset class in which we specialise continues
to provide high income yield and stable long term returns which are extremely
attractive in the current economic environment and our in-house systems continue
to provide us with privileged access to market opportunities.
The management of The European Industrial Partnership is carried out through our
joint venture offices in France, Germany and the Netherlands. These are
corporate entities owned 50% by the company and 50% by the in-territory local
management. Our profit and loss account therefore shows our 50% share of the
joint venture's operating profits.
The Industrial Trust in the UK and The European Industrial Partnership are both
in acquisition phase and the benefits of our "Road Runner" system (direct stock
sourcing) have continued to help us to access markets in the UK and Europe on
behalf of our investors. In the UK acquisitions totalled #68.4m and in Europe
totalled #79.1m(Euro 125.5m).
In addition we completed several single client mandates on behalf of
institutions in the UK. In aggregate these amounted to #39.6m of gross property
assets.
The Development Fund partnerships have benefited from good occupier take up in
the South East of England, with particularly strong interest in unit sales.
Preliminary research continues into expansion territories for European
activities and the period saw the signing of a joint venture agreement with
Grupo Lar Grosvenor based in Madrid.
We are currently in active negotiation on a number of asset purchases both in
the UK and Europe for institutional investors where these assets do not meet the
investment criteria of our existing managed funds. These opportunities have the
potential to expand our assets under management substantially.
At today's date we manage #729m of gross property assets, #541m in the UK and
#188m (Euro298m) in Europe, with funding in place to increase this to over #1bn.
The current level of property under offer and in negotiation indicate that we
are ahead of target for full subscription in both The Industrial Trust in the UK
and The European Industrial Partnership.
We are growing funds under management and maintaining cost control, which should
provide future growth for our shareholders.
During this very busy period we would like to thank our employees, advisers and
investors for their high levels of support.
John Sims
Chief Executive
10 September 2002
FOR FURTHER INFORMATION PLEASE CONTACT:
PROPERTY FUND MANAGEMENT PLC TEL: 020 7535 1818
Glyn Hirsch, Chairman
John Sims, Chief Executive
Andrew Yates, Finance Director
BARON PHILLIPS ASSOCIATES TEL: 020 7397 8932
Baron Phillips
PROPERTY FUND MANAGEMENT PLC
GROUP PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 30 JUNE 2002
Six months Six months Year ended
to 30 June to 30 June 31 December
2002 2001 2001
#'000 #'000 #'000
unaudited unaudited audited
Note
TURNOVER:
Turnover: group and share of joint venture turnover 4 5,589 2,293 9,324
Less: share of joint venture turnover (864) - (1,045)
------------- ------------- -------------
4,725 2,293 8,279
Sub agents fees (933) (195) (892)
------------- ------------- -------------
GROSS PROFIT 3,792 2,098 7,387
Operating expenses (3,286) (2,507) (5,778)
------------- ------------- -------------
GROUP OPERATING PROFIT/(LOSS) 506 (409) 1,609
Share of operating profit/(loss) in joint ventures 362 - (29)
------------- ------------- -------------
TOTAL OPERATING PROFIT/(LOSS) 868 (409) 1,580
Interest receivable 17 7 11
Interest payable and similar charges (19) (18) (47)
------------- ------------- -------------
PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION 866 (420) 1,544
Tax on profit on ordinary activities: 5
Parent and subsidiaries (161) 147 (541)
Joint ventures (158) - -
------------- ------------- -------------
PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTER TAXATION 547 (273) 1,003
Equity minority interests 20 (4) (42)
------------- ------------- -------------
PROFIT/(LOSS) FOR THE FINANCIAL PERIOD ATTRIBUTABLE TO THE 567 (277) 961
SHAREHOLDERS OF THE PARENT COMPANY
Ordinary dividends on equity shares 6 (310) - (832)
------------- ------------- -------------
RETAINED PROFIT/(LOSS) FOR THE PERIOD 257 (277) 129
====== ====== ======
BASIC EARNINGS PER ORDINARY SHARE 7 3.44p (1.86p) 6.44p
====== ====== ======
DILUTED EARNINGS PER ORDINARY SHARE 7 3.36p (1.86p) 6.22p
====== ====== ======
PROPERTY FUND MANAGEMENT PLC
GROUP BALANCE SHEET
AT 30 JUNE 2002
As at As at As at
30 June 30 June 31 December
2002 2001 2001
#'000 #'000 #'000
unaudited unaudited audited
Note
FIXED ASSETS
Intangible assets 8 56 - -
Tangible assets 754 644 738
Investments in joint ventures 9 406 54 22
------------- ------------- -------------
1,216 698 760
------------- ------------- -------------
CURRENT ASSETS
Debtors 3,548 1,507 2,949
Cash in bank and in hand 4,769 354 389
------------- ------------- -------------
8,317 1,861 3,338
CREDITORS: amounts falling due within one year (3,322) (2,187) (3,203)
------------- ------------- -------------
NET CURRENT ASSETS/(LIABILITIES) 4,995 (326) 135
------------- ------------- -------------
TOTAL ASSETS LESS CURRENT LIABILITIES 6,211 372 895
PROVISION FOR LIABILITIES AND CHARGES:
Deferred taxation (43) (43) (43)
EQUITY MINORITY INTERESTS - 18 (7)
------------- ------------- -------------
NET ASSETS 6,168 347 845
====== ====== ======
CAPITAL AND RESERVES
Called up share capital 10 1,033 1 1
Share premium account 11 4,793 - -
Merger reserve 11 93 - 92
Profit and loss account 11 249 346 752
------------- ------------- -------------
EQUITY SHAREHOLDERS' FUNDS 6,168 347 845
====== ====== ======
PROPERTY FUND MANAGEMENT PLC
GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2002
Six months Six months Year ended
to 30 June to 30 June 31 December
2002 2001 2001
#'000 #'000 #'000
unaudited unaudited audited
NET CASH INFLOW FROM OPERATING ACTIVITIES
Operating profit/(loss) 506 (409) 1,609
Depreciation and amortisation 130 101 230
Loss on disposal of fixed assets 2 - -
(Increase)/decrease in debtors (599) 789 (800)
Increase/(decrease) in creditors 220 (258) 405
------------- ------------- -------------
259 223 1,444
RETURNS ON INVESTMENT AND SERVICING OF FINANCE
Dividends paid to minority interest - (30) (42)
Interest paid (19) (18) (44)
Interest received 17 7 11
------------- ------------- -------------
NET CASH OUTFLOW FROM RETURNS ON (2) (41) (75)
INVESTMENT AND SERVICING OF FINANCE
TAXATION (60) (139) (214)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire tangible fixed assets (144) (170) (393)
Proceeds from sale of fixed assets 2 - -
------------- ------------- -------------
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (142) (170) (393)
ACQUISITIONS AND DISPOSALS
Purchase of subsidiary undertaking (50) - -
Purchase of interest in joint venture (20) - -
------------- ------------- -------------
NET CASH OUTFLOW FROM ACQUISITIONS AND DISPOSALS (70) - -
EQUITY DIVIDENDS PAID (278) - (463)
------------- ------------- -------------
NET CASH (OUTFLOW)/INFLOW BEFORE MANAGEMENT OF LIQUID RESOURCES (293) (127) 299
AND FINANCING
FINANCING
Issue of ordinary share capital 6,268 - -
Repayment of loan (55) - -
Flotation costs (1,203) - -
------------- ------------- -------------
INCREASE/(DECREASE) IN CASH IN THE PERIOD 4,717 (127) 299
====== ====== ======
PROPERTY FUND MANAGEMENT PLC
NOTES TO THE GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2002
RECONCILIATION OF NET CASH FLOW TO NET FUNDS
Six months Six months Year ended
to 30 June to 30 June 31 December
2002 2001 2001
#'000 #'000 #'000
unaudited unaudited audited
Increase/(decrease) in cash in the period 4,717 (127) 299
Cash outflow from repayment of loan 55 - -
Movement in net funds in the period - - -
Net debt at the beginning of the period (3) (302) (302)
------------- ------------- -------------
Net funds/(debt) at the end of the period 4,769 (429) (3)
====== ====== ======
ANALYSIS OF NET FUNDS/(DEBT)
Cash at bank and in hand 4,769 354 389
Bank overdraft - (728) (337)
------------- ------------- -------------
Net cash/(debt) 4,769 (374) 52
Debt due within one year - (55) (55)
------------- ------------- -------------
Total 4,769 (429) (3)
====== ====== ======
PROPERTY FUND MANAGEMENT PLC
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
FOR THE SIX MONTHS ENDED 30 JUNE 2002
Six months Six months Year ended
to 30 June to 30 June 31 December
2002 2001 2001
#'000 #'000 #'000
unaudited unaudited audited
Profit for the financial period attributable to shareholders 567 (277) 961
Dividends (310) - (832)
------------- ------------- -------------
Retained profit for the period 257 (277) 129
New share capital issued (net of issue costs) 5,066 - 92
------------- ------------- -------------
Net increase 5,323 (277) 221
At beginning of period 845 624 624
------------- ------------- -------------
At end of period 6,168 347 845
====== ====== ======
PROPERTY FUND MANAGEMENT PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2002
1. BASIS OF PREPARATION
The financial information is prepared on the historical cost
basis and in accordance with applicable UK accounting standards. It comprises
consolidated financial information on two companies under common ownership and
management control, Property Fund Management plc and io Group Limited. The
results and net assets of these two entities have been aggregated using merger
accounting principles.
2. BASIS OF CONSOLIDATION
Subsidiary undertakings are accounted for from the effective
date of acquisition.
Entities in which the Group holds an interest on a long-term
basis and which are jointly controlled by the Group and one, or more, other
ventures under a contractual arrangement are treated as joint ventures.
3. ACCOUNTING POLICIES
The six months' figures are unaudited and accounting policies
are as stated in the last annual accounts of the Group and are in accordance
with the Accountants' Report on Property Fund Management Plc contained in the
listing particulars, dated 16 May 2002.
4. SEGMENTAL INFORMATION
Six months to Six months to 30 Year ended
30 June June 31 December
2002 2001 2001
#'000 #'000 #'000
unaudited unaudited audited
Turnover
Property management:
Management fees and commissions 5,064 1,455 6,006
Performance related fees (10) 402 1,988
------------- ------------- -------------
5,054 1,857 7,994
Insurance broking 535 436 1,330
------------- ------------- -------------
5,589 2,293 9,324
Less share of joint venture turnover:
Property management (864) - (1,045)
------------- ------------- -------------
4,725 2,293 8,279
====== ====== ======
Group Turnover
Group turnover was derived from the following
geographical areas:
United Kingdom 4,178 2,293 7,470
Other European Union countries 547 - 809
------------- ------------- -------------
4,725 2,293 8,279
====== ====== ======
5. TAXATION
The tax charge for the six months to 30 June 2002 has been
provided at the estimated rate applicable for the year.
PROPERTY FUND MANAGEMENT PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2002
6. DIVIDENDS TO EQUITY SHAREHOLDERS
Six months to 30 Six months to Year ended 31
June 30 June December 2001
2002 2001 #'000
#'000 #'000 audited
unaudited unaudited
Interim dividends paid in the period - - 555
Interim dividend proposed 310 - 277
------------- ------------- -------------
310 - 832
====== ====== ======
7. EARNINGS PER SHARE
The earnings per share calculation is based on the profit on ordinary activities
after taxation and minority interests of #567,000 (6 months to 30 June 2001 -
loss #277,000, year ended 31 December 2001 - #961,000) and on the weighted
average of 16.50 million (June 2001 and December 2001 - 14.92m) shares in issue.
The number of shares in issue in 2001 has been adjusted to reflect the share
division, consolidation and bonus issues in May 2002.
The calculation of diluted earnings per share is based on the profit on ordinary
activities after taxation and minority interests and the diluted weighted
average of 16.86 million (June 2001 - 14.92m, December 2001 - 15.46m) shares
calculated as follows:
Number of shares
As at As at As at
30 June 30 June 31 December 2001
2002 2001 #'000
#'000 #'000 audited
unaudited unaudited
Basic weighted average number of shares 16,503,687 14,922,939 14,922,939
Dilutive potential ordinary shares:
Share options 354,677 - 533,355
--------------------- --------------------- ---------------------
Diluted weighted average number of shares 16,858,364 14,922,939 15,456,294
========== ========== ==========
8. ACQUISITIONS
On 3 May 2002, the Group acquired for cash of #49,707 the 30% of Thames
Insurance Brokers Limited not already owned by it. The acquisition has created
goodwill of #62,000, which is being amortised over 2 years.
On 25 June 2002 the Group acquired 50% of io Grupo Lar Grosvenor Management S.L.
(a Spanish corporation) for cash of Euro30,100.
PROPERTY FUND MANAGEMENT PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2002
9. INVESTMENTS IN JOINT VENTURES
As at As at As at
30 June 30 June 31 December
2002 2001 2001
#'000 #'000 #'000
unaudited unaudited audited
Fixed assets 131 2 51
Current assets 880 108 494
------------- ------------- -------------
Share of gross assets 1,011 110 545
Liabilities due within one year (605) (56) (523)
------------- ------------- -------------
Share of net assets 406 54 22
====== ====== ======
Net investment at beginning of period 22 54 54
Additions at cost 20 - -
Share of profit/(losses) for the period 364 - (32)
------------- ------------- -------------
Net investment at the end of period 406 54 22
====== ====== ======
10. SHARE CAPITAL
Date Number of shares Allotted, called up
and fully paid
#
1 January 2002 Brought forward 10,000 1,000
7 March 2002 New shares issued 200 20
--------------- ---------------
10,200 1,020
3 May 2002 Split into 1p shares 102,000 -
89 for 10 bonus issue 907,800 9,078
New shares issued 10,200 102
--------------- ---------------
1,020,000 10,200
10 May 2002 4 for 1 bonus issue 4,080,000 40,800
Consolidated into 5p shares 1,020,000 -
New share issued 1 -
--------------- ---------------
1,020,001 51,000
15 May 2002 348 for 25 bonus issue 14,198,400 709,920
Share options exercised 1,447,240 72,362
New shares issued 3,999,753 199,988
--------------- ---------------
Carried forward 20,665,394 #1,033,270
============== ==============
PROPERTY FUND MANAGEMENT PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2002
11. RESERVES
Share premium Merger reserve Profit and Loss
account
#'000 #'000 #'000
As at 1 January 2002 - 92 752
Bonus shares issued - - (760)
Share issue re options 196 - -
Shares issued re float 5,800 1 -
Flotation costs (1,203) - -
Retained profit for six months - - 257
------------- ------------- -------------
As at 30 June 2002 4,793 93 249
====== ====== ======
INDEPENDENT REVIEW REPORT TO PROPERTY FUND MANAGEMENT PLC
We have been instructed by the company to review the financial information for
the six months ended 30 June 2002 which comprise the Group Profit and Loss
Account, the Group Balance Sheet, the Group Cash Flow Statement and the related
notes. We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial statements contained therein, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data and based thereon, assessing whether
the accounting policies and presentation have been consistently applied and
adequately disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2002.
haysmacintyre
Chartered Accountants Southampton House
Registered Auditors 317 High Holborn
London
WC1V 7NL
10 September 2002
This information is provided by RNS
The company news service from the London Stock Exchange
END
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