TIDMRUGB
RNS Number : 3781J
Rugby Estates Investment Trust PLC
30 March 2010
30 March 2010
RUGBY ESTATES INVESTMENT TRUST Plc
(the "Company"/ "Group"/"REIT Plc")
Results For the Year Ended 31 December 2009
Rugby Estates Investment Trust Plc today announces its results for the year
ended 31 December 2009.
Highlights:
· Profit after tax GBP9.3 million (2008*: GBP20.1 million loss)
· Revenue profit GBP1.2 million (2008*: GBP1.2 million)
· Net asset value per share up 23% to 79p (2008*: 64p)
· Portfolio valued at GBP68.3 million (2008*: GBP60.3 million) -capital
growth 14%
· Portfolio return of 22%, compared with IPD benchmark return of 3%
o REIT Plc ranked equivalent to 4th of 286 funds measured by IPD
· Contracted annual rental income GBP4.6 million
· Estimated rental value GBP5.1 million
· 30 new leases, lease renewals and rent reviews completed during the year
· Voids 9% at year end
*prior period from 7 January 2008 to 31 December 2008
Commenting on the results, Philip Kendall, Chairman, said:
"REIT Plc has significantly outperformed over the year delivering capital growth
on its portfolio of 14%, a total portfolio return of 22% and growth in net
assets per share of 23%. Portfolio performance was ranked equivalent to fourth
out of its peer group of 268 funds for the year reflecting the quality of our
portfolio and the ability of Rugby Asset Management, our Property Adviser, to
successfully manage the assets through a challenging period.
"A strategic review by the Board concluded that a near term exit for
shareholders should be explored in order to maximise value for shareholders.
This conclusion was reached in light of the Group's overall lack of scale and
the fact that the Company's shares continue to trade at a significant discount
to net asset value.
"On 15 February 2010, your Board announced that it was in preliminary
discussions with ING UK Real Estate Investment Trust Limited which may or may
not lead to a formal offer being made to the shareholders of REIT Plc. These
discussions have progressed and the Board expects to update shareholders as to
their outcome shortly. At this stage however, there remains no certainty that
any offer will be forthcoming, nor as to the terms on which any offer might be
made."
+---------------------------+--------------+----------------------+
| Rugby Asset Management | | +44 (0) 20 7016 0050 |
+---------------------------+--------------+----------------------+
| David Tye | | |
+---------------------------+--------------+----------------------+
| Andrew Wilson | | |
+---------------------------+--------------+----------------------+
| | | |
+---------------------------+--------------+----------------------+
| Rugby Estates Investment | | |
| Trust plc | | |
+---------------------------+--------------+----------------------+
| Philip Kendall, Chairman | | +44 (0) 7710 060714 |
+---------------------------+--------------+----------------------+
| | | |
+---------------------------+--------------+----------------------+
| Financial Dynamics | | +44 (0) 20 7831 3113 |
+---------------------------+--------------+----------------------+
| Stephanie Highett | | |
+---------------------------+--------------+----------------------+
| Rachel Drysdale | | |
+---------------------------+--------------+----------------------+
| Richard Sunderland | | |
+---------------------------+--------------+----------------------+
| | | |
+---------------------------+--------------+----------------------+
| Collins Stewart | | +44 (0) 20 7523 8350 |
| | | |
+---------------------------+--------------+----------------------+
| Bruce Garrow | | |
+---------------------------+--------------+----------------------+
| | | |
+---------------------------+--------------+----------------------+
Management Statement
Results
I am pleased to present the results of Rugby Estates Investment Trust Plc ("REIT
Plc", the "Company", the "Group") for the year ended 31 December 2009.
Throughout the year, the Company was a Real Estate Investment Trust ("Reit") in
accordance with UK tax legislation.
During the first three quarters of the year, the UK economy was in recession
with the first half of the year seeing a continued sharp fall in UK commercial
property values before rallying strongly in the final months of 2009. Given the
economic and market conditions, however, REIT Plc did not make any corporate or
property acquisitions during the year, although some minor property disposals
were made. Against this backdrop, the Group's property portfolio performed
exceptionally well in comparison to the market generally.
The result for the year was a profit after tax of GBP9.3 million (prior period
from 7 January 2008 to 31 December 2008: GBP20.1 million loss). This comprised:
· profit arising from recurring items ("revenue profit") of GBP1.2 million
(prior period GBP1.2 million)
· property gains of GBP8.6 million (prior period GBP20.8 million loss)
· costs associated with the offer for the Company by Terra Investments
Limited (the "Terra Offer") of GBP0.6 million (prior period nil) and
· other net gains of GBP0.1 million (prior period GBP0.5 million loss).
As a result of the outstanding capital gains in the year, net asset value per
share increased by 23 per cent over the year to 79p as at 31 December 2009 (31
December 2008: 64p).
Portfolio Performance
The portfolio was valued at 31 December 2009 at GBP68.3 million, a substantial
increase over the valuation at 31 December 2008 of GBP60.3 million. The like for
like increase in valuation, including increases realised on disposal, was GBP8.6
million. This takes into account property disposals which realised GBP0.7
million and capital expenditure on properties during the year of GBP0.1 million.
Investment Property Databank Ltd ("IPD") have analysed the Group's portfolio
performance and I am delighted to report that total portfolio return for the
year, as calculated by IPD, was 22%. This is a major achievement compared with
the IPD universe which achieved a 3% benchmark total portfolio return for the
same period, and reflects well on the quality of the portfolio and the ability
of Rugby Asset Management Limited ("RAM"), the Group's Property Adviser, to
successfully manage the assets through a challenging period. REIT Plc's total
return outperformance comprised capital growth of 14.4% and income return of
6.7%, against the IPD benchmarks of minus 3.8% and 7.0% respectively.
The Group's portfolio return was ranked equivalent to fourth out of the 286
funds measured by IPD for 2009.
The Portfolio
Portfolio statistics at 31 December 2009:
· Valuation - GBP68.3 million
· 33 properties
· Average lot size - GBP2.1 million
· 135 lettable units let to 105 tenants
· Capital value split by sector : retail 46%, industrial 38%, offices
16%
· Capital value split by region : London 56%, South East 19%, South West 5%,
North 16%, N. Ireland 4%
· Contracted annual rental income - GBP4.6 million, comprising GBP4.3
million rent passing and GBP0.3 million in rent free periods
· Estimated rental value ("ERV") - GBP5.1 million per annum, with additional
potential rental income from reversions and letting vacant units of GBP0.5
million per annum
· 37% of income is from leases with more than five years to expiry
· Weighted average unexpired lease term is five years
· Portfolio initial yield is 6.0% with an equivalent yield of 6.7%
· Voids represent 9% of ERV
· The focus of RAM has been on maintaining income, with 30 new leases, lease
renewals and rent reviews completed during the year.
Financing
Net debt at the year end was GBP19.1 million (31 December 2008: GBP20.1 million)
and total equity was GBP46.8 million (31 December 2008: GBP37.5 million),
representing a gearing ratio of 41% (31 December 2008: 53%). Total borrowings
before deducting cash balances were GBP22.8 million (31 December 2008: GBP24.8
million), comprising loan notes of GBP6.0 million and a bank loan from Royal
Bank of Scotland Group ("RBS") of GBP16.8 million.
During the year, the bank loan facility with RBS was restructured to provide a
new, increased facility on more flexible terms. The total facility was increased
by GBP7 million to GBP23.5 million in order to cover loan note redemptions and
to provide additional working capital headroom. The loan is repayable in 2013
and is secured over certain of the Group's properties. An interest rate swap on
a notional principal of GBP12 million has been entered into for the term of the
bank loan; including the margin of 175 basis points, the effective interest rate
payable on this tranche of borrowings is 6.85% per annum. The financial
covenants under the bank loan include a loan to value ratio of 65% and an income
cover ratio of 175%. As at 31 December 2009 the properties charged as security
to RBS were valued at GBP53.7 million, giving a loan to value ratio of 31% and
the income cover ratio was 261%.
The weighted average interest cost of borrowings calculated on rates as at 31
December 2009 was 5.0% per annum (31 December 2008: 4.4%).
The Group's freely available cash balances, excluding blocked deposits and
tenant rent deposit accounts at 31 December 2009 were GBP2.2 million (31
December 2008: GBP2.2 million).
Dividend
Despite the increase in the value of the Group's property portfolio in 2009, the
valuation reductions of 2008 have not been fully recovered and there remain
deficits on the Group's and the Company's distributable reserves as at 31
December 2009. Under UK company law, the Company will be unable to pay a
Property Income Dividend ("PID"), or make any other distribution payments to
shareholders, until such time as the deficit on the Company's distributable
reserves has been made good.
Principal Risks and Uncertainties
The Board considers the principal risks and uncertainties facing the Group to be
the following:
· the timing and extent of the recovery from economic recession is highly
uncertain but may well be weak and there is a risk of a "double dip" recession
leading to increased probability of tenant default and more difficult letting
conditions, thus adversely affecting rental income and capital values;
· increases in investment yields which would adversely affect the value of
the Group's portfolio;
· falls in the rental income from or the capital value of properties charged
as security for loans which could result in a breach of loan covenants. This in
turn could result in the loans becoming immediately repayable or the loan
conditions being renegotiated on terms which are more favourable to the lenders;
· increases in interest rates which would increase the Group's borrowing
costs;
· inability to dispose of properties at acceptable prices or within
acceptable timescales in the event that financing needs or corporate objectives
require such disposals;
· inability to agree corporate acquisitions, or inability to secure debt
finance on acceptable terms to assist with acquisitions, thus inhibiting longer
term growth of the Group's property portfolio and market capitalisation; and
· inability or failure to comply with the Reit conditions. For example,
major tenant default leading to loss of rental income and/or substantial
increases in borrowing costs may breach the interest cover condition, thus
jeopardising the Group's tax-exempt status.
Whilst the Board does not consider it to be a principal risk or uncertainty,
shareholders should be aware that all of the executive functions of the Group
are carried out by RAM. In the event of a failure by RAM to carry out its duties
effectively and in accordance with its terms of appointment, there could be
operational difficulties until the Board can establish alternative executive
management.
There is no single tenant with whom the Group has contractual or other
arrangements which are considered to be essential to the Group's business. The
largest single tenant accounts for 15% of the Group's contracted rental income.
Outlook
In October, Terra Investment Limited ("Terra") announced an unsolicited offer
for the Company at 41 pence per share. This offer was rejected by the Board and
lapsed in November as a result of lack of shareholder support. In rejecting
Terra's offer, the Board conducted a strategic review. This review concluded
that a near term exit for shareholders should be explored in order to maximise
value for shareholders. This conclusion was reached in light of the Group's
overall lack of scale and the fact that the Company's shares continue to trade
at a significant discount to net asset value.
On 15 February 2010, your Board announced that it was in preliminary discussions
with ING UK Real Estate Investment Trust Limited ("ING UK REIT") which may or
may not lead to a formal offer being made to the shareholders of REIT Plc. These
discussions have progressed and the Board expects to update shareholders as to
their outcome shortly. At this stage however, there remains no certainty that
any offer will be forthcoming, nor as to the terms on which any offer might be
made.
Philip Kendall
Chairman
30 March 2010
Responsibility Statement of the Directors
The Directors confirm, in relation to the 2009 Annual Report and Accounts, that
to the best of their knowledge:
· the financial statements, prepared in accordance with the International
Financial Reporting Standards as adopted by the EU, give a true and fair view of
the assets, liabilities, financial position and profit or loss of the company
and the undertakings included in the consolidation taken as a whole; and
· the "Business and Financial Review" includes a fair review of the
development and performance of the business and the position of the Company and
the undertakings included in the consolidation taken as a whole and that the
section "Principal Risks and Uncertainties" includes a description of the
principal risks and uncertainties that the Group faces.
Group Statement of Comprehensive Income
-for the year ended 31 December 2009
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| | | Year ended 31/12/2009 | | Period ended 31/12/2008* |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| | Notes | GBP'000 | | GBP'000 |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| | | | | |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Rental income | | 4,405 | | 4,518 |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Property expenses | | (692) | | (387) |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| | | | | |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Net rental income | | 3,713 | | 4,131 |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Recurring administrative expenses | | (1,463) | | (1,539) |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Administrative expenses incurred in relation to offers for the company | | (643) | | - |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Total administrative expenses | | (2,106) | | (1,539) |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| | | | | |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Profit on disposal of investment properties | | 235 | | - |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Gain/(loss) on revaluation of investment properties | 6 | 8,350 | | (20,826) |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Negative goodwill arising on acquisition | | - | | 319 |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| | | | | |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Net profit/(loss) from operating activities | | 10,192 | | (17,915) |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| | | | | |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Finance income | | 48 | | 454 |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Change in fair value of derivative financial instruments | 8 | 92 | | (864) |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Other finance costs | | (1,094) | | (1,810) |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Total finance costs | | (1,002) | | (2,674) |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| | | | | |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Net finance costs | | (954) | | (2,220) |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| | | | | |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Profit/(loss) before taxation | | 9,238 | | (20,135) |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Taxation credit | 4 | 58 | | 68 |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| | | | | |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Profit/(loss) and total comprehensive income/(expense) for the period attributable to equity owners of the parent | | 9,296 | | (20,067) |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| | | | | |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| | | | | |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
| Basic and diluted earnings/(loss) per share (pence) | 5 | 15.8p | | (34.1)p |
+-------------------------------------------------------------------------------------------------------------------+----------------+-----------------------+----------------+--------------------------+
* prior period from 7 January 2008 to 31 December 2008
Group Statement of Changes in Equity
- for the year ended 31 December 2009
+---------------+---------+---------+---------+---------+----------+---------------+-----------+---------+
| | Share | Share | Shares | Merger | Retained | Shareholders' | Minority | Total |
| | capital | premium | to be | reserve | earnings | equity | interests | equity |
| | | account | issued | | | | | |
+---------------+---------+---------+---------+---------+----------+---------------+-----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+---------+---------+---------+---------+----------+---------------+-----------+---------+
| At 1 | 589 | 46,953 | - | 5,354 | (15,367) | 37,529 | - | 37,529 |
| January | | | | | | | | |
| 2009 | | | | | | | | |
+---------------+---------+---------+---------+---------+----------+---------------+-----------+---------+
| Profit and | - | - | - | - | 9,296 | 9,296 | - | 9,296 |
| total | | | | | | | | |
| comprehensive | | | | | | | | |
| income for | | | | | | | | |
| the period | | | | | | | | |
+---------------+---------+---------+---------+---------+----------+---------------+-----------+---------+
| At 31 | 589 | 46,953 | - | 5,354 | (6,071) | 46,825 | - | 46,825 |
| December | | | | | | | | |
| 2009 | | | | | | | | |
+---------------+---------+---------+---------+---------+----------+---------------+-----------+---------+
- for the period from 7 January 2008 to 31 December 2008
+---------------+---------+---------+---------+---------+----------+---------------+-----------+----------+
| | Share | Share | Shares | Merger | Retained | Shareholders' | Minority | Total |
| | capital | premium | to be | reserve | earnings | equity | interests | equity |
| | | account | issued | | | | | |
+---------------+---------+---------+---------+---------+----------+---------------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+---------+---------+---------+---------+----------+---------------+-----------+----------+
| At 7 | 504 | 46,953 | 4,657 | 399 | 4,700 | 57,213 | 1,621 | 58,834 |
| January | | | | | | | | |
| 2008 | | | | | | | | |
+---------------+---------+---------+---------+---------+----------+---------------+-----------+----------+
| Share | 85 | - | (4,657) | 4,955 | - | 383 | - | 383 |
| issues on | | | | | | | | |
| company | | | | | | | | |
| acquisitions | | | | | | | | |
+---------------+---------+---------+---------+---------+----------+---------------+-----------+----------+
| Minority | - | - | - | - | - | - | (1,621) | (1,621) |
| interests | | | | | | | | |
| acquired | | | | | | | | |
+---------------+---------+---------+---------+---------+----------+---------------+-----------+----------+
| Loss and | - | - | - | - | (20,067) | (20,067) | - | (20,067) |
| total | | | | | | | | |
| comprehensive | | | | | | | | |
| expense for | | | | | | | | |
| the period | | | | | | | | |
+---------------+---------+---------+---------+---------+----------+---------------+-----------+----------+
| At 31 | 589 | 46,953 | - | 5,354 | (15,367) | 37,529 | - | 37,529 |
| December | | | | | | | | |
| 2008 | | | | | | | | |
+---------------+---------+---------+---------+---------+----------+---------------+-----------+----------+
- as at 31 December 2009
+----------------------------------------+-------+------------+------------+
| | | 31/12/2009 | 31/12/2008 |
+----------------------------------------+-------+------------+------------+
| | Notes | GBP'000 | GBP'000 |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Non-current assets | | | |
+----------------------------------------+-------+------------+------------+
| Investment properties | 6 | 68,295 | 60,280 |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Total non-current assets | | 68,295 | 60,280 |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Current assets | | | |
+----------------------------------------+-------+------------+------------+
| Trade and other receivables | | 1,325 | 1,073 |
+----------------------------------------+-------+------------+------------+
| Cash and cash equivalents | | 3,729 | 4,740 |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Total current assets | | 5,054 | 5,813 |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Total assets | | 73,349 | 66,093 |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Current liabilities | | | |
+----------------------------------------+-------+------------+------------+
| Trade and other payables | | (2,743) | (2,685) |
+----------------------------------------+-------+------------+------------+
| Interest bearing loans and borrowings | 7 | (5,953) | (10,696) |
+----------------------------------------+-------+------------+------------+
| Derivative financial instruments | 8 | (978) | (1,070) |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Total current liabilities | | (9,674) | (14,451) |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Total assets less current liabilities | | 63,675 | 51,642 |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Non-current liabilities | | | |
+----------------------------------------+-------+------------+------------+
| Interest bearing loans and borrowings | 7 | (16,850) | (14,113) |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Total non-current liabilities | | (16,850) | (14,113) |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Total liabilities | | (26,524) | (28,564) |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Net assets | | 46,825 | 37,529 |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Equity | | | |
+----------------------------------------+-------+------------+------------+
| Called up share capital | 9 | 589 | 589 |
+----------------------------------------+-------+------------+------------+
| Share premium account | | 46,953 | 46,953 |
+----------------------------------------+-------+------------+------------+
| Merger reserve | | 5,354 | 5,354 |
+----------------------------------------+-------+------------+------------+
| Retained earnings | | (6,071) | (15,367) |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Total Equity | | 46,825 | 37,529 |
+----------------------------------------+-------+------------+------------+
| | | | |
+----------------------------------------+-------+------------+------------+
| Net assets per share (pence) | 10 | 79p | 64p |
+----------------------------------------+-------+------------+------------+
Group Statement of Cash Flows
- for the year ended 31 December 2009
+----------------------------------------------+------------+------------+
| | Year | Period |
| | ended | ended |
| | 31/12/2009 | 31/12/2008 |
+----------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------+------------+------------+
| | | |
+----------------------------------------------+------------+------------+
| Cash flows from operating activities | | |
+----------------------------------------------+------------+------------+
| Loss for the period before taxation | 9,238 | (20,135) |
+----------------------------------------------+------------+------------+
| Adjustments for non-cash items | - | |
+----------------------------------------------+------------+------------+
| Gain on disposal of investment | (235) | - |
| property | | |
+----------------------------------------------+------------+------------+
| (Gain)/loss on revaluation of investment | (8,350) | 20,826 |
| properties | | |
+----------------------------------------------+------------+------------+
| Negative goodwill arising on acquisition | - | (319) |
+----------------------------------------------+------------+------------+
| Change in fair value of derivative | (92) | 864 |
| instruments | | |
+----------------------------------------------+------------+------------+
| (Increase)/decrease in receivables | (280) | 153 |
+----------------------------------------------+------------+------------+
| Increase/(decrease) in payables | 248 | (573) |
+----------------------------------------------+------------+------------+
| Finance income | (48) | (454) |
+----------------------------------------------+------------+------------+
| Finance costs | 1,094 | 1,810 |
+----------------------------------------------+------------+------------+
| Tax received/( paid) | 12 | (1,889) |
+----------------------------------------------+------------+------------+
| | | |
+----------------------------------------------+------------+------------+
| Net cash from operating activities | 1,587 | 283 |
+----------------------------------------------+------------+------------+
| | | |
+----------------------------------------------+------------+------------+
| Cash flows from investing activities | | |
+----------------------------------------------+------------+------------+
| Finance income | 76 | 535 |
+----------------------------------------------+------------+------------+
| Capital expenditure in investment properties | (80) | (66) |
+----------------------------------------------+------------+------------+
| Purchase of subsidiary companies net of cash | - | (317) |
| acquired | | |
+----------------------------------------------+------------+------------+
| Proceeds from disposal of investment | 650 | - |
| property | | |
+----------------------------------------------+------------+------------+
| Net cash from investing activities | 646 | 152 |
+----------------------------------------------+------------+------------+
| | | |
+----------------------------------------------+------------+------------+
| Cash flows from financing activities | | |
+----------------------------------------------+------------+------------+
| Bank loans drawn | 3,435 | 1,000 |
+----------------------------------------------+------------+------------+
| Bank loans repaid | (506) | - |
+----------------------------------------------+------------+------------+
| Loan notes repaid | (4,657) | (5,507) |
+----------------------------------------------+------------+------------+
| Finance costs paid | (1,516) | (1,536) |
+----------------------------------------------+------------+------------+
| | | |
+----------------------------------------------+------------+------------+
| Net cash (used in) financing activities | (3,244) | (6,043) |
+----------------------------------------------+------------+------------+
| | | |
+----------------------------------------------+------------+------------+
| Net (decrease) in cash and cash equivalents | (1,011) | (5,608) |
| in the period | | |
+----------------------------------------------+------------+------------+
| Cash and cash equivalents at 1 January 2009 | 4,740 | 10,348 |
+----------------------------------------------+------------+------------+
| | | |
+----------------------------------------------+------------+------------+
| Cash and cash equivalents at 31 December | 3,729 | 4,740 |
| 2009 | | |
+----------------------------------------------+------------+------------+
Notes to the Financial Statements
- for the year ended 31 December 2009
1 Status of Financial Information
The financial information does not constitute the company's statutory accounts
for 2008 or 2009. Statutory accounts for the year ended 31 December 2009 and the
period from 7 January 2008 to 31 December 2008 have been reported on by the
Independent Auditors. The Independent Auditors' Report on the Annual Report and
Financial Statements for 2008 was unqualified, did not draw attention to any
matters by way of emphasis, and did not contain a statement under section 237(2)
or 237(3) of the Companies Act 1985. The Independent Auditors' Report on the
Annual Report and Financial Statements for 2009 is unqualified, did not draw
attention to any matters by way of emphasis, and did not contain a statement
under section 498(2) or 498(3) of the Companies Act 2006.
Statutory accounts for the period from 7 January 2008 to 31 December 2008 have
been filed with the Registrar of Companies. The statutory accounts for the year
ended 31 December 2009 will be delivered to the Registrar in due course.
The financial statements for the year ended to 31 December 2009 will be posted
to shareholders by 23 April 2010 and will also be available on the Company's
website www.rugbyreit.co.uk from that date.
2 Basis of preparation
The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union as they apply to the financial statements of the Group for the year ended
to 31 December 2009.
The Group's financial statements are also consistent with International
Financial Reporting Standards as issued by the IASB.
The accounts are prepared on the historical cost basis, except that investment
properties and derivative financial instruments are stated at fair value.
The Group accounts consolidate the financial statements of Rugby Estates
Investment Trust Plc and its subsidiary undertakings drawn up to 31 December
2009.
3 Segmental Analysis
The Group provides accommodation to rent in the United Kingdom. The Group's
revenue and property assets can be analysed by use sector as follows:
+--------------------------+----------+----------+------------+---------+
| Year ended 31 December | Retail | Office | Industrial | Total |
| 2009 | | | | |
+--------------------------+----------+----------+------------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+----------+----------+------------+---------+
| Rental income | 1,799 | 747 | 1,859 | 4,405 |
+--------------------------+----------+----------+------------+---------+
| Investment properties | 31,273 | 10,662 | 26,360 | 68,295 |
+--------------------------+----------+----------+------------+---------+
+--------------------------+----------+----------+------------+---------+
| Period ended 31 December | Retail | Office | Industrial | Total |
| 2008 | | | | |
+--------------------------+----------+----------+------------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+----------+----------+------------+---------+
| Rental income | 1,672 | 764 | 2,082 | 4,518 |
+--------------------------+----------+----------+------------+---------+
| Investment properties | 25,725 | 9,960 | 24,595 | 60,280 |
+--------------------------+----------+----------+------------+---------+
The geographical breakdown provided in the Management Statement is provided as
additional information and is not a reportable segment under IFRS 8.
4 Taxation
+------------------------------------------+------------+------------+
| | Year ended | Period |
| | 31/12/2009 | ended |
| | | 31/12/2008 |
+------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+------------------------------------------+------------+------------+
| The taxation credit is made up as | | |
| follows: | | |
| Current tax: | | |
+------------------------------------------+------------+------------+
| UK corporation tax based on profit for | - | - |
| the period | | |
+------------------------------------------+------------+------------+
| Adjustment in respect of previous period | (58) | (68) |
+------------------------------------------+------------+------------+
| Tax credit for the period | (58) | (68) |
+------------------------------------------+------------+------------+
Factors affecting the current tax charge
The tax assessed for the period differs from the standard rate of corporation
tax in the UK (28%).
+------------------------------------------+------------+------------+
| The differences are explained below: | Year ended | Period |
| | 31/12/2009 | ended |
| | | 31/12/2008 |
+------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+------------------------------------------+------------+------------+
| Profit/(loss) on ordinary activities | 9,238 | (20,135) |
| before tax | | |
+------------------------------------------+------------+------------+
| Profit/(loss) on ordinary activities | 2,587 | (5,638) |
| multiplied by standard rate of | | |
| corporation tax in the UK of 28% (31 | | |
| December 2008: 28%) | | |
+------------------------------------------+------------+------------+
| Effect of: | | |
+------------------------------------------+------------+------------+
| Unrelieved losses of residual business | 58 | 134 |
+------------------------------------------+------------+------------+
| Expenses not deductible for tax purposes | 170 | - |
+------------------------------------------+------------+------------+
| Profit/(loss) on revaluation of | (2,338) | 5,831 |
| investment properties | | |
+------------------------------------------+------------+------------+
| Negative goodwill arising on acquisition | - | (89) |
+------------------------------------------+------------+------------+
| Change in fair value of financial | (26) | 241 |
| instruments | | |
+------------------------------------------+------------+------------+
| Exempt income due to Reit status | (451) | (479) |
+------------------------------------------+------------+------------+
| Adjustment in respect of previous period | (58) | (68) |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Tax credit for the period | (58) | (68) |
+------------------------------------------+------------+------------+
From 1 January 2008, the Group has had Reit status. As a result the Group does
not pay UK corporation tax on profits and gains from qualifying rental business
in the UK providing that it meets certain conditions. Non qualifying profits and
gains of the Group ("residual business") continue to be subject to corporation
tax as normal.
5 Earnings/(loss) per Ordinary Share
+------------------------------------------+------------+------------+
| | Year ended | Period |
| | 31/12/2009 | ended |
| | | 31/12/2008 |
+------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+------------------------------------------+------------+------------+
| Earnings/(loss): profit/(loss) after | 9,296 | (20,067) |
| taxation | | |
+------------------------------------------+------------+------------+
| Weighted average number of shares in | 58,941 | 58,888 |
| issue | | |
+------------------------------------------+------------+------------+
| Earnings/(loss) per share - basic and | 15.8p | (34.1)p |
| diluted | | |
+------------------------------------------+------------+------------+
6 Investment Properties
+----------------+------------+------------+------------+------------+------------+------------+
| Group | Freehold | Leasehold | Total | Freehold | Leasehold | Total |
| | Properties | Properties | | Properties | Properties | |
+----------------+------------+------------+------------+------------+------------+------------+
| | 31/12/2009 | 31/12/2009 | 31/12/2009 | 31/12/2008 | 31/12/2008 | 31/12/2008 |
+----------------+------------+------------+------------+------------+------------+------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------+------------+------------+------------+------------+------------+------------+
| At 1 January | 44,055 | 16,225 | 60,280 | 58,820 | 22,220 | 81,040 |
| 2009 | | | | | | |
+----------------+------------+------------+------------+------------+------------+------------+
| Refurbishments | 12 | 68 | 80 | 61 | 5 | 66 |
+----------------+------------+------------+------------+------------+------------+------------+
| Disposals | (415) | - | (415) | - | - | - |
+----------------+------------+------------+------------+------------+------------+------------+
| Changes on | 6,173 | 2,177 | 8,350 | (14,826) | (6,000) | (20,826) |
| revaluation | | | | | | |
+----------------+------------+------------+------------+------------+------------+------------+
| | | | | | | |
+----------------+------------+------------+------------+------------+------------+------------+
| At 31 | 49,825 | 18,470 | 68,295 | 44,055 | 16,225 | 60,280 |
| December 2009 | | | | | | |
+----------------+------------+------------+------------+------------+------------+------------+
The investment properties were valued on 31 December 2009 on an open market
basis by CB Richard Ellis ("CBRE"), an independent firm of Chartered Surveyors.
The valuations were carried out in accordance with the Appraisal and Valuation
Standards of the Royal Institution of Chartered Surveyors. There are currently
no obligations to purchase, construct or develop investment properties.
During the year GBP4,405,000 (Period ended 31 December 2008: GBP4,518,000) was
recognised in the income statement in relation to rental income from investment
properties.
7 Group Borrowings
+--------+---------------------------------+------------+------------+
| | 31/12/2009 | 31/12/2008 |
+------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+------------------------------------------+------------+------------+
| Bank loan | 17,095 | 14,166 |
+------------------------------------------+------------+------------+
| Unamortised loan issue costs | (331) | (53) |
+------------------------------------------+------------+------------+
| | 16,764 | 14,113 |
+------------------------------------------+------------+------------+
| Loan | (i) Unsecured guaranteed loan | 982 | 1,940 |
| stock | stock issued 30 August 2007 | | |
| - | | | |
+--------+---------------------------------+------------+------------+
| | (ii) Unsecured loan stock | 5,057 | 8,756 |
| | issued | | |
| | 31 December 2007 | | |
+--------+---------------------------------+------------+------------+
| | 6,039 | 10,696 |
+------------------------------------------+------------+------------+
| Total borrowings | 22,803 | 24,809 |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Amounts falling due: | | |
+------------------------------------------+------------+------------+
| In one year or less | 5,953 | 10,696 |
+------------------------------------------+------------+------------+
| Between one and two years | (86) | 239 |
+------------------------------------------+------------+------------+
| Between two and five years | 16,936 | 3,025 |
+------------------------------------------+------------+------------+
| In five years or more | - | 10,849 |
+------------------------------------------+------------+------------+
| | 22,803 | 24,809 |
+--------+---------------------------------+------------+------------+
8 Derivative Financial Instruments
+---------------------------------------+-------------+-------------+
| | 31/12/2009 | 31/12/2008 |
+---------------------------------------+-------------+-------------+
| Interest rate swap | GBP'000 | GBP'000 |
+---------------------------------------+-------------+-------------+
| At 1 January 2009 | 1,070 | 206 |
+---------------------------------------+-------------+-------------+
| Net (gains)/losses recognised in | (92) | 864 |
| profit and loss | | |
+---------------------------------------+-------------+-------------+
| At 31 December 2009 | 978 | 1,070 |
+---------------------------------------+-------------+-------------+
The group uses an interest rate swap to mitigate its exposure to the cash flow
risks of interest rate movements on its bank loan.
The initial interest rate swap was entered into for a period of seven years and
fixed the interest rate on GBP9.75 million of borrowings until 21 November 2014
at 5.255% per annum excluding the bank's margin of 0.9% per annum. On entry into
the new loan facility agreement the interest rate swap was restructured and is
now for a notional principal of GBP12 million until October 2013 at a fixed rate
of 5.1% per annum excluding the bank's margin of 1.75%. The effective interest
rate on this tranche of borrowings is therefore 6.85% per annum.
The value of the interest rate swap is based upon a model that takes into
account the forward curve provided by the swap and deposit markets. The model
interpolates the rates and computes discount factors to determine a net present
value, which would equate to the fair value, for the future cash flow given the
provided curve.
9 Authorised and Issued Share Capital
+----------------------------------+------------+---------+------------+---------+
| | 31/12/2009 | 31/12/2008 |
+----------------------------------+----------------------+----------------------+
| | GBP'000 | GBP'000 |
+----------------------------------+----------------------+----------------------+
| Authorised: | | |
+----------------------------------+----------------------+----------------------+
| 100,000,000 Ordinary shares of | 1,000 | 1,000 |
| 1p each | | |
+----------------------------------+----------------------+----------------------+
| 50,000 Redeemable shares of GBP1 | 50 | 50 |
| each | | |
+----------------------------------+----------------------+----------------------+
| | 1,050 | 1,050 |
+----------------------------------+----------------------+----------------------+
| |
| |
| |
| |
+--------------------------------------------------------------------------------+
| | 31/12/2009 | 31/12/2008 |
+----------------------------------+----------------------+----------------------+
| | Number | GBP'000 | Number | GBP'000 |
+----------------------------------+------------+---------+------------+---------+
| Issued and fully paid - Ordinary | | | | |
| shares of 1p each | | | | |
+----------------------------------+------------+---------+------------+---------+
| At 1 January 2009 | 58,940,581 | 589 | 50,450,200 | 504 |
+----------------------------------+------------+---------+------------+---------+
| Issued during the period for | - | - | 8,490,381 | 85 |
| company acquisitions | | | | |
+----------------------------------+------------+---------+------------+---------+
| At 31 December 2009 | 58,940,581 | 589 | 58,940,581 | 589 |
+----------------------------------+------------+---------+------------+---------+
10 Net Assets Per Share
At 31 December 2009, the net asset value per ordinary share was 79p (31 December
2008: 64p). This is calculated as Group capital and reserves attributable to
equity holders of the parent company of GBP46,825,000 (31 December 2008:
GBP37,529,000) divided by the number of ordinary shares issued and to be issued
of 58,940,581 (31 December 2008: 58,940,581).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEMFMUFSSELD
Rugby Est It (LSE:RUGB)
Historical Stock Chart
From Jun 2024 to Jul 2024
Rugby Est It (LSE:RUGB)
Historical Stock Chart
From Jul 2023 to Jul 2024
