Interim Results
25 November 2003 - 11:00PM
UK Regulatory
RNS Number:4654S
Wynnstay Properties PLC
25 November 2003
WYNNSTAY PROPERTIES PLC
25 November 2003
CHAIRMAN'S STATEMENT
Shareholders will recall that in my annual statement I cautioned that emulating
last year's record performance would be challenging. It is very pleasing to
report, therefore, that profit before property disposals and taxation for the
first half of the present financial year actually showed a modest increase from
#316,000 to #322,000. However, last year's interim pre-tax results included a
surplus of #101,000 on the disposal of an investment property, whereas in the
half year now under review no such disposals were made.
The results may be summarised as follows:-
2003 2002
Profit before property disposals and taxation +1.9% #322,000 #316,000
Profit before taxation: -22.8% #322,000 #417,000
Profit after taxation: -27.4% #225,000 #310,000
Interim dividend per share: +4.8% 2.2p 2.1p
Net asset value per share: +16.6% 302p 259p
The portfolio remained fully let and income producing, with the small decline in
rental income reflecting the property disposal last year. However, with the
significant addition to the portfolio to which I refer below, and with further
rent reviews falling due in the second half of the year, I expect satisfactory
growth in rental income for the full year.
Property outgoings, together with administration and other costs remained under
tight control. Net finance costs were again lower reflecting reduced
borrowings, coupled with lower interest rates throughout the period.
In the light of these results, the Directors have decided to increase the
interim dividend by 4.8% from 2.1p per share to 2.2p per share. This will be
paid on 18th December 2003 to Shareholders on the register on 5th December 2003.
Retained profits of #156,000 have contributed to net asset value increasing to
302p per share compared with 259p per share at the same time last year.
On 14th October 2003, we announced the acquisition of the Oakcroft Business
Centre in Chessington, Surrey for #1.9 million and the transaction, which was
funded from our existing bank facilities, was completed on 10th November 2003.
This freehold property comprises three 2-storey modern units, totaling just over
15,000 square feet including open plan office accommodation, surrounding a
secure central courtyard car parking area. The units are fully let on leases
expiring between March 2011 and February 2013, currently producing an income of
#150,568 per annum, equivalent to a yield, after costs, of approximately 7.5%
per annum. Located about three miles south of Kingston-upon-Thames, the
property is conveniently positioned for access to the A3 primary trunk road and
M25 motorway as well as to Heathrow and Gatwick airports. The Board believes
this substantial acquisition marks a further important stage in the enhancement
of Wynnstay's portfolio.
It has become clear in recent weeks that the present interest rate cycle has
turned, with rates beginning to rise again from their 48-year historic low.
However, it seems common ground amongst economists and analysts that, whilst
rates are likely to rise again in several steps over the next year, there is no
sign at present that we will return to the high rates experienced during the
1980's and early 1990's. Interest rates on our variable rate borrowings,
currently #3.5 million, have been fixed until April 2004 and on the fixed rate
borrowings of #4.0 million until June 2006. The Company's strongly positive
cash flow, coupled with growth in net asset value of 43% over the previous four
financial years is reflected in the decrease in net gearing to the modest level
of 56% at the half year end. This provides us with a platform to finance and
make further selective acquisitions, where we believe that these will increase
Shareholder value in the medium to longer term. We will also continue to keep
under review opportunities to sell properties in the portfolio where future
growth in value or income appears limited and realised surpluses on disposals
can be reinvested in new acquisitions.
It is pleasing to note the significant rise in Wynnstay's share price over
recent months, which has considerably narrowed the discount to the underlying
net asset value. It has also been encouraging of late to see a number of new
Shareholders appearing on the Company's register to whom I extend a warm welcome
as well as thanking those existing Shareholders who have demonstrated their
confidence by adding to their investments in Wynnstay.
Our Annual General Meeting in the summer was attended by a record number of
Shareholders and produced an interesting dialogue during the question and answer
session which covered a broad range of subjects concerning the Company's
affairs. May I remind Shareholders that next year's meeting will be held on
Thursday 22nd July 2004 at the Royal Automobile Club, Pall Mall, London SW1.
Finally, on behalf of the Board, I send all Wynnstay's Shareholders and their
families our best wishes for a peaceful and happy Christmas and for the New
Year.
Philip G.H. Collins
25th November 2003
Chairman
UNAUDITED CONSOLIDATED PROFIT & LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 29TH SEPTEMBER 2003
Six Months ended 29th September Year ended 25th
March
2003 2002 2003
(Unaudited) (Audited)
#'000 #'000 #'000
Turnover
Gross Rental Income 748 762 1,504
Fees and Commissions 10 10 18
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758 772 1,522
Property Outgoings (31) (34) (63)
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727 738 1,459
Administration and Other Costs (234) (229) (452)
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Operating Profit 493 509 1,007
Profit on Disposal of Investment Properties - 101 101
------ ------ ------
493 610 1,108
Finance Costs (Net) (171) (193) (353)
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Profit on Ordinary Activities
before Taxation 322 417 755
Taxation (97) (107) (171)
------ ------ ------
Profit on Ordinary Activities
after Taxation 225 310 584
Interim Dividend
2003: 2.2p per share, 2002: 2.1p per share (69) (66)
Total Dividend 2002-2003: 7.2p per share (227)
------ ------ ------
Profit Retained 156 244 357
------ ------ ------
Basic Earnings per share (see note below) 7.1p 9.8p 18.5p
Note
Basic earnings per share have been calculated on profits after taxation
attributable to ordinary shareholders of #225,000 (2002: #310,000) and on
3,155,267 ordinary shares, being the weighted average number in issue during
both periods.
UNAUDITED CONSOLIDATED BALANCE SHEET AS AT 29TH SEPTEMBER 2003
29th September 25th March
2003 2002 2003
(Unaudited) (Audited)
#'000 #'000 #'000
Fixed Assets
Tangible Assets 15,514 14,410 15,517
Investments 1 56 1
------ ------ ------
15,515 14,466 15,518
Current Assets
Debtors 86 89 69
Cash at Bank and in Hand 330 526 287
------ ------ ------
416 615 356
Creditors: Amounts falling due
within one year (613) (684) (712)
------ ------ ------
Net Current Liabilities (197) (69) (356)
------ ------ ------
Total Assets Less Current Liabilities 15,318 14,397 15,162
Creditors: Amounts falling due after more than one year (5,700) (6,200) (5,700)
------ ------ ------
9,618 8,197 9,462
Provision for Liabilities and Charges (86) (38) (86)
------ ------ ------
Net Assets 9,532 8,159 9,376
------ ------ ------
Capital and Reserves
Share Capital 789 789 789
Capital Redemption Reserve 205 205 205
Share Premium Account 1,135 1,135 1,135
Capital Reserve 151 151 151
Revaluation Reserve 3,797 2,742 3,797
Distributable Reserves 3,455 3,137 3,299
------ ------ ------
Equity Shareholders' Funds 9,532 8,159 9,376
------ ------ ------
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 29TH SEPTEMBER 2003
Six Months ended 29th September Year ended 25th
March
2003 2002 2003
(Unaudited) (Audited)
#'000 #'000 #'000
Cash Flow from Operating Activities (Note 1) 422 523 1,081
------ ------ ------
Returns on Investment and Servicing
of Finance
Interest Received 4 4 7
Interest Paid (170) (158) (374)
------ ------ ------
Net Cash (Outflow) from Returns on
Investment and Servicing of Finance (166) (154) (367)
------ ------ ------
Taxation Paid (52) (61) (144)
------ ------ ------
Capital Expenditure and Financial
Investment
Purchase of Tangible Fixed Assets - (1) (1)
Disposal of Tangible Fixed Assets - 266 266
Sinking Fund Policy Redemption - - 65
------ ------ ------
Net Cash Inflow from
Investing Activities - 265 330
------ ------ ------
Equity Dividends Paid (161) (150) (216)
------ ------ ------
Net Cash Inflow before Financing 43 423 684
Financing
Repayment of Bank Loan - (250) (750)
------ ------ ------
Increase/(Decrease) in Cash in the Period 43 173 (66)
------ ------ ------
Reconciliation of Net Cash Flow to
Movement in Net Debt
Increase/(Decrease) in Cash in the Period 43 173 (66)
Cash Inflow from Debt Financing - 250 750
------ ------ ------
Movement in Net Debt in the Period 43 423 684
Net Debt at 25th March 2003 (5,413) (6,097) (6,097)
------ ------ ------
Net Debt at 29th September 2003 (Note 2) (5,370) (5,674) (5,413)
------ ------ ------
Notes To Cash Flow Statement
1. Reconciliation of Operating Profit to Net Cash Inflow from Operating
Activities
Six Months ended Year ended 25th
29th September March
2003 2002 2003
#'000 #'000 #'000
Operating Profit 493 508 1,007
Depreciation and Amortisation 3 3 7
(Increase)/Decrease in Debtors (16) 14 32
(Decrease)/Increase in Creditors (58) (2) 35
------ ------ ------
Net Cash Inflow from Operating Activities 422 523 1,081
------ ------ ------
2. Analysis of Net Debt
29th September Cash Movement 25th March
2003 2003
#'000 #'000 #'000
Cash at Bank and in Hand 330 43 287
Debt due after more than one year (5,700) - (5,700)
------ ------ ------
Net Debt (5,370) 43 (5,413)
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Notes
1. The figures in these statements do not constitute statutory accounts;
those for the year ended 25th March 2003 are extracted from the Group Accounts
which have been filed with the Registrar of Companies and which received an
unqualified report from the Auditors and did not contain a statement under
Section 237(2) or (3) of the Companies Act 1985 as amended.
2. The interim dividend of 2.2p per share will be paid on 18th December 2003
to those Shareholders on the register at 5th December 2003.
3. This interim report is being posted to all Shareholders and will be
available on application to the Company's registered office at Cleary Court, 21
St. Swithin's Lane, London EC4N 8AD.
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