REG - Cardiff Property PLC - Final Results
23/11/2022 07:00
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RNS Number : 2742H Cardiff Property PLC 23 November 2022
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
LEI: 213800GE3FA4C52C1N05
FOR RELEASE 7.00 AM 23 November 2022
THE CARDIFF PROPERTY PLC
(The Group, including Campmoss, specialises in property investment and
development in the Thames Valley. The total portfolio including the jointly
controlled Campmoss investment and development portfolio, valued in excess of
£22m, is primarily located to the west of London, close to Heathrow Airport
and in Surrey and Berkshire.)
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2022
Highlights:
2022 2021
Net Assets £'000 29,812 28,442
Net Assets Per Share £ 27.56 25.49
Profit Before Tax £'000 2,697 1,259
Earnings Per Share - Basic and diluted pence 218.23 91.91
Dividend Per Share pence 20.5 18.5
Gearing % Nil Nil
Richard Wollenberg, Chairman, commented:
"During the financial year under review the Thames Valley property market saw
a marked upturn in activity with new lettings and investment sales reaching
pre-pandemic levels. The last few months have however, seen a downturn in
confidence following rising inflation worries and increases in interest rates
and building costs.
In the current economic climate, the property market will be sensitive to
economic and fiscal projections. Whilst the Thames Valley has historically
remained resilient compared to the general market, the impact of current
uncertainties cannot be underestimated."
For further information:
The Cardiff Property plc Richard Wollenberg 01784 437444
Shore Capital Patrick Castle 020 7468 7923
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2022
Chairman's Statement
Dear Shareholder,
During the financial year under review the Thames Valley property market saw a
marked upturn in activity with new lettings and investment sales reaching
pre-pandemic levels. The last few months have however, seen a downturn in
confidence following rising inflation worries and increases in interest rates
and building costs.
In the current economic climate, the property market will be sensitive to
economic and fiscal projections. Whilst the Thames Valley has historically
remained resilient compared to the general market, the impact of current
uncertainties cannot be underestimated.
The Group, including Campmoss Property Company Limited "Campmoss" our 47.62%
joint venture, completed a number of new lettings and agreed rent increases as
a result of rent reviews.
Office rental levels remained firm over the year with lease terms on new
leases being agreed for periods of between 5-10 years. A number of our leases
include increases in rent and service charges linked to the Retail Price
Index.
The majority of our retail tenants in Bracknell and Egham remained open during
the pandemic and during the year new and existing lettings achieved marginal
increases.
The Thames Valley residential market remained firm as evidenced by the
successful sale of all apartments at Britannia Wharf, Surrey. Residential
rental levels have also benefitted from increased demand over the year.
The Company's business units at Maidenhead, which offer ground floor
industrial use with first floor offices, achieved small rental increases as
leases expired or rents were reviewed. Business and warehouse space in the
Thames Valley remained in demand although it should be remembered that the
trend of working from home continues to place a strain on the office rental
market.
Business units at the Windsor Business Centre, Windsor are let on a short-term
basis whilst detailed plans are being prepared for submission.
Following the grant of planning for Affordable Housing, the Company's freehold
property at Cowbridge Road, Cardiff, was sold to a local Housing Association
in excess of book value.
At Burnham and Maidenhead, commercial property owned by Campmoss is let on a
short-term basis whilst development proposals are discussed with the Local
Authority.
FINANCIAL
For the year to 30 September 2022, the Group profit before tax was £2.70m
(2021: £1.26m). This figure includes an investment property value increase of
£0.30m (2021: £0.53m) for the Group and an after tax profit of £0.87m
(2021: £0.07m) from our share in Campmoss and its subsidiary. The major
contribution to the increase in Campmoss profit resulted from the sale of all
apartments at the recently completed residential development at Britannia
Wharf, Woking. The Company also received a dividend of £3.0m (2021: £0.50m)
from its investment in Campmoss.
Revenue for the year, which represented gross rental income, excluding
Campmoss, totalled £0.70m (2021: £0.60m). The sale of property in Cowbridge
Road, Cardiff realised £1.02m.
The profit after tax attributable to shareholders for the financial year was
£2.41m (2021: £1.08m) and the earnings per share was 218.23p (2021: 91.91p).
At the year-end, the Company's commercial portfolio was valued by Kempton Carr
Croft at a total of £5.97m (2021: £5.92m) this valuation excludes the
Company's freehold office property which was also valued by Kempton Carr Croft
and is included in the balance sheet at valuation classified as property,
plant and equipment.
The increase in the value of the commercial portfolio results from the
increase in valuation less the carrying value of our investment property at
Cowbridge Road, Cardiff, as mentioned earlier.
Property when completed and retained for re-sale is held as stock at the lower
of cost or net realisable value. At the year-end this related to commercial
property at The Windsor Business Centre owned by First Choice Estates plc, the
Company's wholly owned subsidiary.
The Group's total property portfolio, including the jointly controlled
Campmoss Group, was valued at £22.3m (2021: £34.8m). The majority of the
reduction in value relates to the sale of Britannia Wharf, Woking by Campmoss.
The Company's share of the net assets of Campmoss Group, after receipt of the
£3.0m dividend from Campmoss group, was £13.76m (2021: £15.9m).
The Group's total net assets as at the year-end were £29.81m (2021: £28.44m)
equivalent to £27.56 per share (2021: £25.49) an increase of 8.1% over the
year (2021: 4.7%). The Group, including Campmoss, has adequate financial
facilities and resources to complete works in progress as well as the
envisaged development programme. Cash balances are held on instant access or
short-term deposit. At the year-end, the Company had nil gearing (2021: nil).
During the year the Company purchased and cancelled 34,199 (2021: 78,525)
ordinary shares at a total cost of £0.79m (2021: £1.49m).
The Company may hold in treasury any of its own shares purchased. This gives
the Company the ability to reissue treasury shares and provides greater
flexibility in the management of its capital base. At the year end the Company
held nil (2021 : nil) shares in treasury. Any shares purchased by the Company
not held in treasury will be cancelled and the number of shares in issue
reduced accordingly.
The Company proposes to continue its policy of purchasing its own shares,
whether to be held in treasury or to be cancelled, and a resolution renewing
the directors' authority will be placed before the forthcoming Annual General
Meeting to be held on 19 January 2023. This authority will only be exercised
in circumstances where the directors regard such purchases to be in the best
interests of shareholders as a whole. Full details are available on the
Company's website www.cardiff-property.com (http://www.cardiff-property.com) .
Current IFRS accounting requires that deferred tax is recognised on the
difference between, the cost of properties, including applicable indexation
and quoted investments and their current market value. However, IFRS
accounting does not require the same treatment in respect of the Group's
unquoted investment in Campmoss, our 47.62% owned joint venture, which
represents a substantial part of the Company's net assets. Whilst provision is
made in Campmoss accounts for deferred tax, should the shares held in Campmoss
be disposed of, for indicative purposes, based on the value in the Company's
balance sheet at the year-end this would result in a tax liability of £3.44m
(2021 : £3.9m) equivalent to £3.18 (2021: £3.56) per share calculated using
a tax rate of 25% (2021: 25%). This information is provided to shareholders as
an additional non-statutory disclosure.
DIVIDEND
The Directors recommend a final dividend of 15.0p per share (2021: 13.5p)
making a total dividend for the year of 20.5p (2021: 18.5p), an increase of
10.8%. The final dividend will be paid on 3 February 2023 to shareholders on
the register at 20 January 2023.
THE PROPERTY PORTFOLIO
The Group including Campmoss continues to concentrate its property activities
in the Thames Valley, to the west of London, close to Heathrow Airport and in
Surrey, Berkshire and Buckinghamshire.
During the year the Company completed lettings at Egham and Maidenhead whilst
progressing development plans at Windsor.
Campmoss achieved new lettings at Burnham and Bracknell whilst planning
applications are being prepared in respect of The Priory, Burnham and Highway
House, Maidenhead.
Close liaison with our tenants remains a priority and continuing arrangements
allowing some of our retail tenants to pay rental monthly rather than
quarterly will remain in place. Most of the rental invoiced over the last
two quarters has been received.
The Group (including Campmoss) total property portfolio contains: 43% retail
sector, 8% business units, 14% residential and 35% offices (by value).
A number of property acquisitions in the Thames Valley were considered but not
progressed as asking prices were considered to be unviable.
QUOTED INVESTMENTS
The Company retains a small portfolio of quoted short-term retail bonds and
equity investments, with the former providing an attractive income stream. The
value of the portfolio marginally decreased over the year primarily due to a
number of bond holdings approaching their maturity date and increases in
interest rates.
The equity investments include Aquila Services Group plc (the largest UK based
affordable housing consultancy group) and Galileo Resources plc (a mining
exploration company). I remain a Non-Executive Director of both.
RELATIONSHIP AGREEMENT
The Company has entered into a written and legally binding relationship
agreement with myself, its controlling shareholder, to address the
requirements of LR9.2.2AD of the Listing Rules.
MANAGEMENT AND TEAM
In a challenging environment the Group's continued success is dependent upon
our small management team and our joint venture partner. I therefore wish to
take this opportunity to thank them all for their support and achievements
over the year.
OUTLOOK
Political and economic uncertainty together with rising inflation and
increased interest rates will inevitably affect the property market. In the
short-term activity in the property market will be limited as companies will
not commit to investment decisions until clarity can be given. The fall in the
value of the pound against other currencies will certainly attract some
overseas investors but current uncertainties will limit their interest.
The next few months will prove challenging with events in the UK economy
eagerly watched by investors.
I look forward to reporting to you further at the half year.
J. Richard Wollenberg
Chairman
22 November 2022
Consolidated Income Statement
FOR THE YEAR ENDED 30 SEPTEMBER 2022
2022 2021
£'000 £'000
Revenue 703 596
Cost of sales (64) (33)
Gross profit 639 563
Administrative expenses (461) (502)
Other operating income 574 553
Operating profit before fair value movement on investment
properties 752 614
Fair value movement on investment properties 299 533
Operating profit 1,051 1,147
Financial income 80 54
Financial expense (8) (9)
Profit on sale of investment properties 706 -
Share of profit of Joint Venture 868 67
Profit before taxation 2,697 1,259
Taxation (291) (181)
Profit for the financial year attributable to equity holders
2,406 1,078
Earnings per share on profit for the
financial year - pence
Basic and diluted 218.23 91.91
Dividends
Final 2021 paid 13.5p (2020: 12.8p) 150 152
Interim 2022 paid 5.5p (2021 5.0p) 60 59
210 211
Final 2022 proposed 15.0p (2021: 13.5p) 162 151
These results relate entirely to continuing operations.
Consolidated statement of comprehensive income and expense
FOR THE YEAR ENDED 30 SEPTEMBER 2022
2022 2021
£'000 £'000
Profit for the financial year
2,406 1,078
Items that cannot be reclassified subsequently to profit or loss
Net change in fair value of other properties 59 8
Net change in fair value of investments at fair value through comprehensive (94) (21)
income
Total comprehensive income and expense for the year attributable
to the equity holders of the Parent Company 2,371 1,065
Consolidated Balance Sheet
AT 30 SEPTEMBER 2022
2022 2022 2021 2021
£'000 £'000 £'000 £'000
Non-current assets
Freehold investment properties 5,985 5,968
Property, plant, and equipment 300 240
Right of use asset 145 155
Investment in Joint Venture 13,758 15,890
Other financial assets 898 1,073
21,086 23,326
Current assets
Inventory and work in progress 694 689
Trade and other receivables 223 140
Term deposits 4,041 1,907
Cash and cash equivalents 4,912 3,594
9,870 6,330
Total assets 30,956 29,656
Current liabilities
Trade and other payables (599) (752)
Corporation tax (198) (158)
(797) (910)
Non-current liabilities
Lease liability (172) (178)
Deferred tax liability (175) (126)
Total liabilities (1,144) (1,214)
Net assets 29,812 28,442
Equity
Called up share capital 216 223
Share premium account 5,076 5,076
Other reserves 2,450 2,478
Investment property fair value reserve 2,095 1,814
Retained earnings 19,975 18,851
Total equity 29,812 28,442
Net assets per share £27.56 £25.49
Consolidated Cash Flow Statement
FOR THE YEAR ENDED 30 SEPTEMBER 2022
2022 2021
£'000
£'000
Cash flows from operating activities
Profit for the year 2,406 1,078
Adjustments for:
Depreciation right of use assets 10 10
Financial income (80) (54)
Financial expense 8 9
Profit on sale of investments (706) -
Share of profit of Joint Venture (868) (67)
Fair value movement on investment properties (299) (533)
Taxation 291 181
Cash flows from operations before changes in working capital 762 624
Acquisition of inventory and work in progress (5) (1)
(Increase)/decrease in trade and other receivables (67) 97
(Decrease)/increase in trade and other payables (128) 223
Cash generated from operations 562 943
Tax paid (218) (43)
Net cash flows from operating activities 344 900
Cash flows from investing activities
Interest received 81 49
Dividend from Joint Venture 3,000 500
Proceeds from sale of investment property 1,000 462
Acquisition of investment property, and plant and equipment (39) (45)
Acquisition of investments - (169)
Proceeds from sale of investments 81 -
Increase in held term deposits (2,134) (159)
Net cash flows from investing activities 1,989 638
Cash flows from financing activities
Purchase of own shares (791) (1,492)
Lease payments (14) (14)
Dividends paid (210) (211)
Net cash flows (used in)/from financing activities (1,015) (1,717)
Net increase/(decrease) in cash and cash equivalents 1,318 (179)
Cash and cash equivalents at beginning of year 3,594 3,773
Cash and cash equivalents at end of year 4,912 3,594
Consolidated statement of changes in equity
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Called up share Share Other Investment Retained Total
capital
premium
reserves
property
earnings
equity
account
fair value
reserve*
£'000
£'000
£'000
£'000 £'000 £'000
At 1 October 2020 239 5,076 2,475 3,139 18,151 29,080
Profit for the year - - - - 1,078 1,078
Other comprehensive income - revaluation of investments - - (21) - - (21)
Net change in fair value of own use freehold property
-
-
8
-
-
8
Transactions with equity holders
Dividends - - - - (211) (211)
Purchase of own shares (16) - 16 - (1,492) (1,492)
Total transactions with equity holders (16) - 16 - (1,703) (1,703)
Fair value movements on investment properties - Cardiff - - - 526 (526) -
Disposal of property - Cardiff - - - (259) 259 -
Fair value movements on investment properties - Campmoss Group - - - (1,592) 1,592 -
At 30 September 2021 223 5,076 2,478 1,814 18,851 28,442
Profit for the year - - - - 2,406 2,406
Other comprehensive income - revaluation of investments - - (94) - - (94)
Net change in fair value of own use freehold property
-
-
59
-
-
59
Transactions with equity holders
Dividends - - - - (210) (210)
Purchase of own shares (7) - 7 - (791) (791)
Total transactions with equity holders (7) - 7 - (1,001) (1,001)
Fair value movements on investment properties - Cardiff - - - 299 (299) -
Disposal of property - Cardiff - - - (171) 171 -
Fair value movements on investment properties - Campmoss Group - - - 153 (153) -
At 30 September 2022 216 5,076 2,450 2,095 19,975 29,812
______ __ ____ ______ ______ ______ ___ ___
* - Includes fair value movements on investment properties held by Campmoss
Group, our Joint Venture, which are presented in investment property fair
value reserve to demonstrate these are unrealised.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1. Basis of preparation
The consolidated results for the year ended 30 September 2022 and 2021 are
prepared in accordance with UK-adopted international accounting standards
("UK-adopted IAS") and those parts of the Companies Act 2006 applicable to
companies reporting under IFRS and have been incorporated into the principal
accounting policies.
The financial information set out above does not constitute the company's
statutory financial statements for the years ended 30 September 2022 or 30
September 2021 but is derived from those financial statements. Statutory
financial statements for 2021 have been delivered to the Registrar of
Companies and those for 2022 will be delivered in due course. The auditor has
reported on those financial statements; their reports were (i) unqualified,
(ii) did not include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies Act 2006 in
respect of the financial statements for 2022 nor 2021.
Going concern
The financial statements have been prepared on a going concern basis, which
assumes that the Group will continue to meet its liabilities as they fall due.
The Group's activities, together with the factors likely to affect its future
development, performance and position are set out in the Chairman's Statement
and Strategic Report. The financial position of the Group, its property
portfolio under management, asset base, liquidity and key performance
indicators.
The Group has sufficient financial resources to enable it to continue to trade
and to complete the current maintenance and development programme. The Group
is ungeared, and the cash flow forecasts do not assume any debt being
required. Therefore, the Directors believe that the Group is well placed to
manage its business risks successfully despite the current economic
uncertainty.
The Group is in the enviable position of having significant cash balances at
30 September 2022, the Cardiff Group had cash balances of £4.9m and a further
£4.0m term deposits (with maturity dates of 95 days), in addition the Company
has investments of £0.9m of which £0.8m are readily marketable. The Group
has an operating cost base including tax and dividends of under £1m per annum
so even with no income for several years the Group would remain solvent.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 SEPTEMBER 2022 (continued)
The Cardiff Group receives a management fee from Campmoss of around £0.5m per
annum, there is no reason to assume this income would not be received as the
Campmoss Group had cash balances at 30 September 2022, of £6.6m and a further
£9.6m term deposits (with maturity dates of 95 days). Campmoss have an
annual operating cost base excluding development but including the Cardiff
management fee of under £1.5m, so Campmoss Group similarly has a strong
balance sheet.
New, revised or changes to existing financial reporting standards
Subject to the adoption of the IFRS's available for application noted below,
this announcement is prepared on the basis of the accounting policies as set
out in the most recently published set of annual financial statements.
IFRS
A number of new standards and amendments to standards and interpretations have
been issued but are not yet effective for the current accounting period.
None are expected to have a material impact on the consolidated financial
statements of the Group.
2. Segmental analysis
The Group manages its operations in two segments, being property and other
investment and property development. Property and other investment relates to
the results for The Cardiff Property Company Limited where properties are held
as investment property with Property Development relating to the results of
First Choice Estates Plc and Thames Valley Retirement Homes Limited. The
results of these segments are regularly reviewed by the Board as a basis for
the allocation of resources, in conjunction with individual site investment
appraisals, and to assess their performance. Information regarding the results
and net operating assets for each reportable segment are set out below:
Property and other investment Property Development Eliminations 2022
Total
£'000 £'000 £'000 £'000
Rental income (wholly in the UK) 494 209 - 703
Property sales 706 - - 706
Profit before taxation 2,433 264 - 2,697
Net operating assets
Assets 27,006 5,038 (1,088) 30,956
Liabilities (1,936) (296) 1,088 (1,144)
Net assets 25,070 4,742 - 29,812
Notes to the Financial Statements
FOR THE YEAR ENDED 30 SEPTEMBER 2022 (continued)
Property and other investment Property Development Eliminations 2021
Total
£'000 £'000 £'000 £'000
Rental income (wholly in the UK) 434 162 - 596
Property sales 462 - - 462
Profit before taxation 1,096 163 - 1,259
Net operating assets
Assets 26,607 4,851 (1,802) 29,656
Liabilities (2,765) (251) 1,802 (1,214)
Net assets 23,842 4,600 - 28,442
"Eliminations" relate to inter segment transactions and balances which
cannot be specifically allocated but are eliminated on consolidation.
3. Earnings per share
Earnings per share has been calculated in accordance with IAS 33 - Earnings
Per Share using the profit after tax for the financial year of £2,406,000
(2021 : £1,078,000) and the weighted average number of shares as follows:
Weighted average
number of shares
2022 2021
Basic and diluted shares 1,102,357 1,172,532
218.23 91.91
Earnings per share (p)
There is no difference between basic and diluted shares as the Company has no
potentially dilutive instruments in issue.
Financial Calendar
23 November 2022 Results announced for the year ended 30
September 2022
19 January 2023 Annual General Meeting/General
Meeting
19 January 2023 Ex-dividend date for the final
dividend
20 January 2023 Record date for the final dividend
3 February 2023 Final dividend to be paid
May 2023 Interim results
for 2023 to be announced
30 September 2023 Year end
Directors and Advisers
Directors Statutory Auditor
J Richard Wollenberg PKF Littlejohn. LLP
Chairman and chief executive
Karen L Chandler FCA
Finance director Stockbrokers and financial adviser
Shore Capital
Nigel D Jamieson BSc, FCSI
Independent non-executive director
Secretary Bankers
Karen L Chandler FCA HSBC Bank Plc
Non-executive director of wholly owned subsidiary Solicitors
First Choice Estates plc Blake Morgan LLP
Derek M Joseph BCom, FCIS
Charsley Harrison LLP
Head office Registrar and transfer office
56 Station Road Neville Registrars Ltd
Egham Neville House
Surrey TW20 9LF Steelpark Road
Telephone: 01784 437444 Halesowen
Fax: 01784 439157 B62 8HD
E-mail: webmaster@cardiff-property.com Telephone: 0121 585 1131
Website: www.cardiff-property.com
Registered office Registered number
56 Station Road 00022705
Egham
Surrey TW20 9LF
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