REG - Cardiff Property PLC - Half-year Report
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
FOR RELEASE 7.00 AM 8 May 2019
THE CARDIFF PROPERTY PLC
LEI: 213800GE3FA4C52CIN05
The group, including Campmoss, specialises in property investment and development in the Thames Valley. The total portfolio under management, valued in excess of £26m, is primarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 MARCH 2019
Highlights:
Six months
31 March
2019
(Unaudited)
Six months
31 March
2018
(Unaudited)
Year
30 September
2018
(Audited)
Revenue
£'000
320
336
650
Net assets per share
£
21.84
21.67
21.78
Profit before tax
£'000
304
715
1,114
Earnings per share (basic and diluted)
pence
20.1
52.4
80.6
Interim/total dividend
per share
Pence
4.6
4.4
16.6
Gearing
%
Nil
Nil
Nil
Richard Wollenberg, Chairman, commented:
Investment and letting activity in the Thames Valley commercial property market has seen a slowdown during the first half of the year. Businesses and investors are understandably reluctant to commit expenditure until the current political and economic uncertainties are resolved.
As a result, rental growth in the office market has taken a pause with tenants benefitting from competitive rentals. The first few months of the second half of the financial year has not seen any obvious improvement.
For further information:
The Cardiff Property plc
Richard Wollenberg
01784 437444
Shore Capital
Richard Johnson
020 7601 6100
THE CARDIFF PROPERTY PLC
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 MARCH 2019
INTERIM MANAGEMENT REPORT
Dear Shareholder,
Investment and letting activity in the Thames Valley commercial property market has seen a slowdown during the first half of the year. Businesses and investors are understandably reluctant to commit expenditure until the current political and economic uncertainties are resolved.
As a result, rental growth in the office market has taken a pause with tenants benefitting from competitive rentals. The first few months of the second half of the financial year has not seen any obvious improvement.
The commercial property investment market continues to remain firm as private and overseas investors are attracted to the high rate of return available compared to other asset classes. As always location, covenant and length of term remain an important factor in determining demand and values. Large industrial units used as distribution centres and located on the outskirts of major conurbations are sought after, especially as planning continues to restrict the availability of such new developments.
The Thames Valley retail market is mainly unchanged with some towns suffering increased vacant property whilst others continue to trade well despite obvious pressures. The group's retail assets are primarily based in Egham and Bracknell with both locations benefitting from recent town centre developments.
Activity in the residential market has experienced further slowdowns although with asking prices having already reduced typically by some 10% it is yet to be seen if this will stimulate demand. Although subject to recent criticism, various government Help to Buy schemes and the availability of lower cost mortgage finance continues to offer an attractive package to first time buyers. The group's residential activity falls very much within this category. The letting market remains fairly active with rental values holding firm.
Financial
For the six months ended 31 March 2019 profit before tax amounted to £0.30m (March 2018: £0.72m; September 2018: £1.11m). This figure includes an after-tax loss from Campmoss Property Company Limited, our 47.62% joint venture, of £0.05m (March 2018: after-tax profit £0.36m; September 2018: after-tax profit £0.34m).
Revenue for the six months to 31 March 2019, represented by rental income, totalled £0.32m (March 2018: £0.34m; September 2018: £0.65m). The group's share of revenue from Campmoss was £0.27m (March 2018: £0.80m; September 2018: £1.37m), represented by rental income of £0.27m (March 2018: £0.59m; September 2018: £0.47m) and property sales of nil (March 2018: £0.21m; September 2018: £0.90m). Rental income and sales figures for Campmoss are not included in group revenue.
The comparable figures in brackets relate to the periods six months ending 31 March 2018 and the year ended 30 September 2018.
Net assets of the group as at 31 March 2019 were £27.20m (March 2018: £27.26m; September 2018: £27.29m), equivalent to £21.84 per share (March 2018: £21.67; September 2018: £21.78). The company's share of net assets of Campmoss, included on the group balance sheet, amounted to £15.15m (March 2018: £15.22m; September 2018: £15.20m).
Your directors are of the opinion that, other than as mentioned in this report, there is no material change in the value of the group's property portfolio as at 31 March 2019.
During the six months to 31 March 2019 the company purchased 6,950 of its own shares (March 2018: 5,809; September 2018: 10,809 shares). There have been no material events or material changes in assets, liabilities or related party relationships since 30 September 2018.
Current IFRS accounting recommends that deferred tax is chargeable on the difference between the indexed cost of properties and quoted investments and their current market value. However, current IFRS accounting does not require the same treatment in respect of the Group's unquoted investment in Campmoss Property, our 47.62% owned joint venture. The investment in Campmoss is a substantial part of the company's net assets and for indicative purposes a disposal of this investment based on the value in the company's balance sheet at the 31 March 2019 could generate a tax liability of £2.58m (March 2018: £2.59m, September 2018: £2.58m), equivalent to £2.07 per share (March 2018: £2.06, September 2018: £2.06). This information is provided to shareholders as an additional, non-statutory disclosure.
Dividend
Your directors have declared an interim dividend of 4.6p (interim March 2018: 4.4p; final September 2018: 12.2p), an increase of 5% which will be paid on 4 July 2019 to shareholders on the register at 31 May 2019.
The Investment and Development Portfolio
The group's freehold property portfolio, including those held by Campmoss, continues to be concentrated in the Thames Valley close to Heathrow Airport and to the west of London.
The office and retail investment at The White House, Egham, consists of five ground floor retail units and 5,100 sq. ft. net of air-conditioned office space on the upper floor. All retail units are fully occupied. Part of the upper floor office area has recently undergone extensive refurbishment and is now available to let.
The Windsor Business Centre, Windsor, comprises four business units totalling 9,500 sq. ft. and The Maidenhead Enterprise Centre, Maidenhead, six business units totalling 14,000 sq. ft. All units are fully let on medium term leases. A recent planning application to extend three of the business units at Windsor has been granted and whilst these units continue to be occupied and available for sale, future development plans are currently being advanced and a decision on works will be made when the opportunity arises.
At Cowbridge Road, Cardiff, the property comprises a 14,650 sq. ft. commercial property and is currently let to Royal Mail for use as a mail sorting office. The lease is due to expire shortly and discussions with the tenant are in progress for a renewal of their lease. A planning application to extend the upper floor was submitted last year and discussions with the local authority are being progressed.
A freehold residential property in Egham has recently been refurbished and following the grant of planning permission additional space has been created in the roof area as well as an extension of the living space. The property has recently been placed on the market for sale.
At Tilehurst, Reading, detailed discussions are taking place with the local planning authority for a revised residential scheme.
At Heritage Court, Egham four ground floor retail units are all let on medium term leases. The upper floors were previously sold on a long leasehold basis.
Campmoss Property Company Limited and subsidiaries
Campmoss continues to implement its development programme and work towards achieving planning permissions for existing assets in the portfolio. As expected rental income has been affected by obtaining vacant possession of Britannia Wharf, Woking, ahead of achieving a planning permission. The building has now been demolished. New lettings at The Priory Burnham are for similar reasons being restricted to short lease terms.
At Alston House, Market Street, Bracknell the development of 10 retail units on ground and first floor and 12 residential units on the 2nd and 3rd floor is expected to complete shortly. Long term leases for five of the retail units have been contracted and the apartments will be marketed for sale following completion of the show home.
In Bracknell development of the adjoining building to Alston House known as Westview, Market Street, was completed last year and all retail units on ground and first floor are now let on medium term leases to national and local businesses.
At Gowring House, Market Street, Bracknell, three apartments are let on Assured Shorthold Tenancies with two available for sale. The three ground floor retail units are all let on medium term leases.
At Britannia Wharf, Woking, Campmoss has been successful in achieving planning permissions for a 83-bedroom care home and as an alternative a residential scheme for 52 apartments. The residential scheme has attracted a number of approaches from developers and discussions are in progress with regard to a joint venture scheme. As mentioned previously vacant possession of the building was achieved last year and the building subsequently demolished.
At Clivemont House and Highway House, Maidenhead planning permissions were previously granted for separate office schemes of 48,000 sq. ft. net and 45,000 sq. ft. net. respectively. At Clivemont House as an alternative to a speculative office scheme further discussion are taking place with the local authority with regard to a residential scheme. The cleared site at Highway House is currently let as car parking to a local business.
At the Priory, Burnham the 26,000 sq. ft. building comprises new office premises on three floors totalling 17,000 sq. ft. and an adjoining grade II Listed Office Building of 9,000 sq. ft. used as a Business Centre. Part of the offices and Business Centre are currently available on a short-term basis whilst the company is preparing a planning application for re-development of the property.
Quoted Investments
The company retains a small portfolio of quoted retail bonds and equity investments. The market value of the portfolio marginally declined in value over the period under review.
Relationship Agreement
The company has entered into a written and legally binding relationship agreement with myself, its controlling shareholder, to address the requirements of LR9.2.2AR of the Listing Rules.
Outlook
The group continues to work towards achieving beneficial planning grants for existing property assets and to complete lease renewals. Completion of the retail and residential scheme at Alston House, Bracknell is expected to provide additional income and plans to develop the residential scheme at Britannia Wharf, Woking are being advanced.
Inevitably prospects will be influenced by the resolution or otherwise of the current political and economic uncertainty. The group's strong financial position will allow it to both manage its property assets within a difficult environment and take advantage of opportunities that might become available.
I look forward to reporting progress at the financial year end.
J Richard Wollenberg
Chairman
8 May 2019
Condensed Consolidated Interim Income Statement
FOR THE SIX MONTHS ENDED 31 MARCH 2019
Six months
31 March
2019
(Unaudited)£'000
Six months
31 March
2018
(Unaudited)£'000
Year
30 September
2018
(Audited)
£'000
Revenue
320
336
650
Cost of sales
(25)
(25)
(30)
______
______
______
Gross profit
295
311
620
Administrative expenses
(256)
(295)
(536)
Other operating income
287
314
671
______
______
______
Operating profit before gains on investment properties and other investments
326
330
755
(Deficit)/surplus on revaluation of investment properties
-
-
(25)
______
______
______
Operating profit
326
330
730
Financial income
29
25
48
Share of results of joint venture
(51)
360
336
______
______
______
Profit before taxation
304
715
1,114
Taxation
(53)
(53)
(101)
______
______
______
Profit for the period attributable to equity holders
251
662
1,013
______
______
______
Earnings per share on profit for the period - pence
Basic and diluted
20.1
52.4
80.6
______
______
______
Dividends
Final 2018 paid 12.2p (2017: 11.5p)
153
145
145
Interim 2018 paid 4.4p
-
-
55
______
______
______
153
145
200
______
______
______
Final 2018 proposed 12.2p
-
-
153
Interim 2019 proposed 4.6p (2018: 4.4p)
57
55
-
______
______
______
57
55
153
______
______
______
These results relate entirely to continuing operations. There were no acquisitions or disposals during these periods.
Condensed Consolidated Interim Statement of Comprehensive Income and Expense
FOR THE SIX MONTHS ENDED 31 MARCH 2019
Six months
31 March
2019
(Unaudited)
£'000Six months
31 March
2018
(Unaudited)£'000
Year
30 September
2018
(Audited)£'000
Profit for the financial period
251
662
1,013
Other items recognised directly in equity
Net change in fair value of available for sale assets
(62)
(13)
(185)
Net change in fair value of other properties
-
-
(4)
______
______
______
Total comprehensive income and expense for the period attributable to equity holders of the parent company
189
649
824
______
______
______
Condensed Consolidated Interim Balance Sheet
AT 31 MARCH 2019
31 March
2019
(Unaudited)
£'00031 March
2018
(Unaudited)
£'00030 September
2018
(Audited)
£'000
Non-current assets
Freehold investment properties
5,962
5,863
5,927
Property, plant and equipment
296
301
298
Investment in joint venture
15,150
15,224
15,200
Other financial assets
824
1,058
886
______
______
______
Total non-current assets
22,232
22,446
22,311
______
______
______
Current assets
Stock and work in progress
675
668
672
Trade and other receivables
108
150
142
Financial assets
3,597
1,851
200
Cash and cash equivalents
1,375
2,991
4,718
______
______
______
Total current assets
5,755
5,660
5,732
______
______
______
Total assets
27,987
28,106
28,043
______
______
______
Current liabilities
Trade and other payables
(685)
(701)
(645)
______
______
______
Total current liabilities
(685)
(701)
(645)
______
______
______
Non-current liabilities
Deferred tax liability
(98)
(143)
(108)
______
______
______
Total non-current liabilities
(98)
(143)
(108)
______
______
______
Total liabilities
(783)
(844)
(753)
______
______
______
Net assets
27,204
27,262
27,290
______
______
______
Equity
Called up share capital
249
252
251
Share premium account
5,076
5,076
5,076
Other reserves
2,525
2,760
2,585
Investment property revaluation reserve
827
997
827
Retained earnings
18,527
18,177
18,551
______
______
______
Shareholders' funds attributable to equity holders
27,204
27,262
27,290
______
______
______
Net assets per share
£21.84
£21.67
£21.78
______
______
______
Condensed Consolidated Interim Statement of Cash Flows
FOR THE SIX MONTHS ENDED 31 MARCH 2019
Six months
31 March
2019
(Unaudited)
£'000Six months
31 March
2018
(Unaudited)£'000
Year
30 September
2018
(Audited)£'000
Cash flows from operating activities
Profit for the period
251
662
1,013
Adjustments for:
Depreciation
2
3
5
Financial income
(29)
(25)
(48)
Share of loss/(profit) of joint venture
51
(360)
(336)
(Deficit)/surplus on revaluation of investment properties
-
-
25
Taxation
53
53
101
______
______
______
Cash flows from operations before changes in
working capital
328
333
760
Decrease/(increase) in trade and other receivables
36
(57)
(51)
(Decrease)/increase in trade and other payables
(24)
6
(19)
______
______
______
Cash generated from operations
340
282
690
Tax paid
-
-
(112)
______
______
______
Net cash flows from operating activities
340
282
578
______
______
______
Cash flows from investing activities
Interest received
28
23
47
Acquisition of investments, and property, plant and equipment
(39)
(71)
(168)
(Increase)/decrease in financial assets
(3,397)
(481)
1,170
______
______
______
Net cash flows from investing activities
(3,408)
(529)
1,049
______
______
______
Cash flows from financing activities
Purchase of own shares
(122)
(102)
(194)
Dividends paid
(153)
(145)
(200)
______
______
______
Net cash flows from financing activities
(275)
(247)
(394)
______
______
______
Net (decrease)/increase in cash and cash equivalents
(3,343)
(494)
1,233
Cash and cash equivalents at beginning of period
4,718
3,485
3,485
______
______
______
Cash and cash equivalents at end of period
1,375
2,991
4,718
______
______
______
Condensed Consolidated Interim Statement of Changes in Equity
FOR THE SIX MONTHS ENDED 31 MARCH 2019
Share
capital£'000
Share
premium
account£'000
Other
reserves£'000
Investment
property
revaluation
reserve£'000
Retained
earnings£'000
Total
equity£'000
At 1 October 2017
253
5,076
2,772
997
17,762
26,860
Profit for the period
-
-
-
-
662
662
Other comprehensive income - revaluation of investments
-
-
(13)
-
-
(13)Transactions with equity holders
Dividends
-
-
-
-
(145)
(145)Purchase of own shares
(1)
-
1
-
(102)
(102)
______
______
______
______
______
______
Total transactions with equity holders
(1)
-
1
-
(247)
(247)
______
______
______
______
______
______
At 31 March 2018
252
5,076
2,760
997
18,177
27,262
Profit for the period
-
-
-
-
351
351
Other comprehensive income - revaluation of investments
(172)
-
-
(172)Revaluation of other property
-
-
(4)
-
-
(4)
Transactions with equity holders
Dividends
-
-
-
-
(55)
(55)Purchase of own shares
(1)
-
1
-
(92)
(92)
______
______
______
______
______
______
Total transactions with equity holders
(1)
-
1
-
(147)
(147)
______
______
______
______
______
______
Transfer on revaluation of investment properties - Cardiff
-
-
-
(25)
25
-Transfer on revaluation of investment properties - Campmoss
-
-
-
(145)
145
-
______
______
______
______
______
______
At 30 September 2018
251
5,076
2,585
827
18,551
27,290
Profit for the period
-
-
-
-
251
251
Other comprehensive income - revaluation of investments
-
-
(62)
-
-
(62)Transactions with equity holders
Dividends
-
-
-
-
(153)
(153)Purchase of own shares
(2)
-
2
-
(122)
(122)
______
______
______
______
______
______
Total transactions with equity holders
(2)
-
2
-
(275)
(275)
______
______
______
______
______
______
At 31 March 2019
249
5,076
2,525
827
18,527
27,204
______
______
______
______
______
______
Statement of Responsibility
FOR THE SIX MONTHS ENDED 31 MARCH 2019
The directors are responsible for preparing the condensed consolidated interim financial statements for the six months ended 31 March 2019 and they confirm, to the best of their knowledge and belief, that:
· the condensed consolidated set of interim financial statements for the six months ended 31 March 2019 has been prepared in accordance with IAS 34 - Interim Financial Reporting, as adopted by the EU;
· the interim management report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of interim financial statements and a description of the principal risks and uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the group during that period; and any changes in the related party transactions described in the last annual report that could do so.
J Richard Wollenberg, Chairman
Karen L Chandler, Finance director
Nigel D Jamieson, Independent non-executive director
8 May 2019
Notes to the Condensed Consolidated Interim Financial Statements
FOR THE SIX MONTHS ENDED 31 MARCH 2019
1. Basis of preparation
This condensed set of financial statements has been prepared in accordance with IAS 34 - Interim Financial Reporting as adopted by the EU.
The annual financial statements of the group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, the condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the group's published consolidated financial statements for the year ended 30 September 2018.
The comparative figures for the financial year ended 30 September 2018 are not the group's statutory accounts for that financial year. Those accounts have been reported on by the group's auditor and delivered to the registrar of companies. The report of the auditor was: unqualified; did not give any reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report; and did not contain a statement under sections 498 (2) or (3) of the Companies Act 2006.
Accounting policies
The condensed consolidated interim financial statements have been prepared applying the accounting policies that will be applied in the preparation of the group's financial statements for the year ended 30 September 2019.
The only changes to International Financial Reporting Standards which are relevant to the group which have arisen since the last year end are the implementation of IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from contracts with customers). The directors have concluded that the impact of these new Standards is unlikely to be material to the Group and, consequently, in all other respects these condensed consolidated interim financial statements have been prepared on the same basis as the group's financial statements for the year ended 30 September 2019.
The directors are still evaluating the impact of IFRS 16 (Leases) which is effective from 1 January 2019.
Use of estimates and judgement
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The key areas in which estimates have been used and the assumptions applied are in valuing investment properties and properties in the joint venture, in valuing available for sale assets, in classifying properties and in the calculating of provisions.
An external, independent valuer, having an appropriate recognised professional qualification and recent experience in the location and category of property being valued, values the company's property portfolio at the end of each financial year. The directors of the joint venture value its portfolio each year; such valuation takes into account yields on similar properties in the area, vacant space and covenant strength. The directors of the group and joint venture review the valuations for the interim financial statements.
A provision is recognised in the balance sheet when the group has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefit will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Going concern
The group has sufficient financial resources to enable it to continue in operational existence for the foreseeable future, to complete the current maintenance and development programme and meet its liabilities as they fall due. Accordingly, the directors consider it appropriate to continue to adopt the going concern basis in preparing these interim financial statements.
Notes to the Condensed Consolidated Interim Financial Statements
FOR THE SIX MONTHS ENDED 31 MARCH 2019 (continued)
2. Segmental analysis
The group manages its operations in two segments, being property and other investments and property development. 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 revenue and profit before taxation for each reportable segment is set out below:
Six months
31 March
2019
(Unaudited)
£'000Six months
31 March
2018
(Unaudited)£'000
Year
30 September
2018
(Audited)£'000
Revenue (wholly in the United Kingdom)
Property and other investments being gross rents
Receivable
320
336
650
______
______
______
Profit before taxation
Property and other investments
206
595
416
Property development
98
120
698
______
______
______
304
715
1,114
______
______
______
The operations of the group are not seasonal.
3. Taxation
The tax position for the six-month period is estimated on the basis of the anticipated tax rates applying for the full year.
4. Dividends
The interim dividend of 4.6p per share will be paid on 4 July 2019 to shareholders on the register on 31 May 2019. Under accounting standards this dividend is not included in the condensed consolidated interim financial statements for the six months ended 31 March 2019.
5. Earnings per share
Earnings per share has been calculated using the profit after tax for the period of £251,000 (March 2018: £662,000; September 2018: £1,013,000) and the weighted average number of shares as follows:
Weighted average number of shares
31 March
2019
31 March
2018
30 September
2018
(Unaudited)
(Unaudited)
(Audited)
Basic and diluted
1,250,872
1,261,654
1,258,139
_________
_________
_________
Directors and Advisers
Directors
Auditor
J Richard Wollenberg
Crowe U.K. LLP
Chairman and chief executive
Karen L Chandler FCA
Finance director
Stockbrokers and financial advisers
Nigel D Jamieson BSc, FCSI
Shore Capital
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
Head office
Registrar and transfer office
56 Station Road
Neville Registrars Limited
Egham, TW20 9LF
Neville House
Telephone: 01784 437444
Steelpark Road
Fax: 01784 439157
Halesowen
E-mail: webmaster@cardiff-property.com
B62 8HD
Web: www.cardiff-property.com
Telephone: 0121 585 1131
Registered office
Registered number
56 Station Road
00022705
Egham, TW20 9LF
Financial Calendar
2019
8 May
Interim results for 2019 announced
30 May
Ex-dividend date for interim dividend
31 May
Record date for interim dividend
4 July
Interim dividend to be paid
30 September
End of accounting year
December
Final results for 2019 announced
2020
January
Annual General Meeting
February
Final dividend to be paid
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDIR BRGDUUSGBGCR
Recent news on Cardiff Property
See all newsREG - Cardiff Property PLC - Transaction in Own Shares
AnnouncementREG - Cardiff Property PLC - Transaction in Own Shares
AnnouncementREG - Cardiff Property PLC - Transaction in Own Shares
AnnouncementREG - Cardiff Property PLC - Result of AGM
AnnouncementREG - Cardiff Property PLC - Dividend Timetable
Announcement