REG - Conygar Investmnt Co - Interim Results
10/05/2022 07:00
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RNS Number : 8522K Conygar Investment Company PLC(The) 10 May 2022
10 May 2022
The Conygar Investment Company PLC
Interim results for the six months ended 31 March 2022
Summary
· Net asset value ("NAV") increased by £12.44 million to £126.58
million (212.25p per share), including a £10.52 million uplift from the
placing of 7,139,000 of the Company's own shares.
· NAV per share decreased by 5.16p per share to 212.25p as a result of
8.58p per share dilution from issuing shares at a discount, partly offset by a
3.42p per share increase from the £1.93 million profit realised in the
period.
· Total cash deposits of £30.66 million (51.41p per share).
· No debt and no borrowings.
· Development progressed for the first phase of the mixed-use project
at The Island Quarter, Nottingham, planned for opening in the summer of 2022.
· Disposal of the industrial units at Selly Oak, Birmingham, completed
in December 2021, realising a net profit of £3.42 million.
· Disposal of the retail park at Cross Hands, Carmarthenshire, for
£18.28 million realising a £0.53 million surplus over the 30 September 2021
valuation.
· A further planning application was submitted in October 2021 for the
proposed mixed-use waterfront development in Holyhead, Anglesey, supplementing
the outline consent granted in 2014.
· A non-binding exclusivity agreement was entered into with Wholesale
Fruit Centre (Bristol) Limited in connection with the potential acquisition of
a 14.7-acre development at the Bristol Fruitmarket site in the St Philip's
Marsh area of Bristol.
Group net assets summary
31 Mar 2022 31 Mar 2021 30 Sept 2021
£'m £'m £'m
Properties 99.34 62.24 108.44
Cash 30.66 23.93 13.66
Other 0.57 0.49 (0.66)
Provisions (3.99) - (7.30)
Total 126.58 86.66 114.14
NAV per share 212.25p 163.97p 217.41p
Robert Ware, Chief Executive commented:
"The soon to be opening up and ongoing development programme at The Island
Quarter site in Nottingham in conjunction with the resurgence of interest in a
nuclear capability in Anglesey leaves the Group well placed to benefit from
the post-pandemic economic bounce and strong demand for high quality,
sustainable, UK real estate, particularly in the residential rental market.
Although the further advancement of our development portfolio will require a
substantial investment by third-parties we are confident that there is
significant interest which will become clearer over the year."
Enquiries:
The Conygar Investment Company PLC
Robert Ware: 0207 258 8670
David Baldwin: 0207 258 8670
Liberum Capital Limited (nominated adviser and broker)
Richard Lindley: 0203 100 2222
Jamie Richards: 0203 100 2222
Edward Phillips: 0203 100 2222
Temple Bar Advisory (public relations)
Alex Child-Villiers: 07795 425580
Will Barker: 07827 960151
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit)
Regulations 2019. Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to be in the
public domain.
This announcement is being made on behalf of the Company by David Baldwin,
Finance Director.
Chairman's and Chief Executive's statement
Results summary
The Group achieved a profit of £1.93 million in the period (year ended 30
September 2021: profit of £26.53 million). This arose from completion of the
forward sale of our industrial units at Selly Oak, Birmingham, and the sale of
our retail park at Cross Hands, Carmarthenshire, which gave rise to a combined
net profit, before administrative and other operational costs, of £3.84
million. These sales, in addition to the placing of 7.14 million shares in
December 2021, generated gross cash proceeds in the period of over £36
million.
Whilst this is a pleasing result, that has enabled the continued progression
of our exciting mixed-use development at The Island Quarter site in
Nottingham, it should be noted that the share placing at a discounted price of
150p, after adjusting for realised profits, has resulted in a net reduction of
the Group's net asset value per share in the period of 5.16p (2.37%) to
212.25p per share as at 31 March 2022 (30 September 2021: 217.41p).
The Island Quarter, Nottingham
Just over 5 years since we first acquired The Island Quarter site, we are
delighted to see the first phase of this substantial regeneration project
nearing practical completion with the food, beverage and events venue at Canal
Turn to be fitted out over the coming weeks in advance of a planned opening in
the summer.
Canal Turn comprises an outside performance area, restaurants, bars, extensive
events space for private hire and a rooftop terrace which will provide an
exciting, new and unique destination for the city to be managed and operated
by a local Nottingham team. The venue's two restaurants, "Binks Yard" and
"Cleaver & Wake", will be led by the 2018 MasterChef: The Professionals
winner and chef patron Laurence Henry. Binks Yard will provide an all-day
dining, drinking and entertainment venue whilst the Cleaver & Wake
restaurant will offer a modern dining experience using the best nationally
sourced produce.
We anticipate that the detailed application for the plot adjacent to Canal
Turn, which incorporates proposals for two hotels, to be managed by
Intercontinental Hotels Group, co-working space, 247 build to rent apartments
plus an extensive food and beverage offering, will be granted by the summer.
Furthermore, ground preparation works have been carried out for the now fully
consented 700-bed student accommodation scheme to enable commencement of this
development in the summer of 2022 and completion in good time for the
September 2024 student intake.
We continue to progress the designs for subsequent phases and are in advanced
discussions with potential lenders to finance both the student accommodation
development as well as later phases of the project and expect to make
announcements in that regard over the coming months.
For this Interim Report we have not sourced a third-party valuation for The
Island Quarter site. The Conygar Board have, however, considered its fair
value by reference to any changes in the assumptions set out in the reported
30 September 2021 valuation provided by Knight Frank LLP, progression of the
project and the recoverability of costs incurred since that date. During the
period, no planning permissions have been granted or buildings completed and
whilst we recognise the impact that price inflation is currently having upon
property construction costs, we are seeing these increases being offset by a
corresponding uplift in market rents, particularly within the residential
build to rent and student accommodation sectors. However, there have been
significant cash outlays in the period to bring electricity to the site and
progress the construction of Canal Turn. As such the fair value at 31 March
2022 has been increased by £11.91 million to £82.41 million to reflect the
development costs incurred in the six-months since 30 September 2021.
Other projects
At Cross Hands, Carmarthenshire, we were able to benefit from the pandemic
bounce in retail warehousing values by accepting an offer to purchase our
retail park for net proceeds of £18.28 million. The sale, which completed in
February 2022, generated a profit in the period, after final development and
sale costs, of £0.42 million. Further capital profits of £3.51 million were
recognised, by way of revaluation surpluses, in prior periods which, in
addition to £1.22 million of post development rental surpluses, has resulted
in a total profit from the park of £5.15 million.
The granting, by Birmingham City Council, of their consent to a student home
scheme at our site at Selly Oak enabled completion of the sale to a specialist
provider of student accommodation for gross proceeds of £7.04 million. The
sale realised a profit in the current period, after costs, of £3.42 million
in addition to £0.66 million of prior period rental surpluses realised since
our acquisition of these industrial units in April 2018.
At Holyhead Waterfront, Anglesey, the detailed application and marine licence
applications, submitted in October 2021, for a proposed development to include
a 250-berth marina, 259 townhouses and apartments, marine commercial and
additional A1/A3 retail units, were validated in January 2022. We expect a
determination by the Local Authority in the autumn of this year.
Whilst it is difficult to predict the impact that the ongoing war in Ukraine
will have on the real estate sector, its occurrence, in conjunction with the
global shift towards low carbon energy, has strongly influenced the
Government's desire for more UK sourced power. The release, in April 2022, of
their Energy Security Strategy sets out proposals for the provision of greater
energy independence and security, by way of supercharging the deployment of
cleaner and more affordable energy. This includes the provision of a £120
million Future Nuclear Enabling Fund to progress a series of projects as soon
as possible this decade, including the Wylfa site in Anglesey, where talks
were already ongoing between the UK and Welsh Governments and US energy and
engineering firms Westinghouse and Bechtel.
If the UK and Welsh Governments eventually decide to support nuclear and / or
other energy forms on Anglesey, our site on the Holyhead Waterfront and over
200 acres of currently brownfield but developable land at Rhosgoch and Parc
Cybi are well positioned to support the significant residential and logistical
provisions which will be required.
In December 2021, we announced that the Company had entered into a non-binding
exclusivity agreement with Wholesale Fruit Centre (Bristol) Limited regarding
the potential acquisition of a 14.7-acre development at the Bristol
Fruitmarket Site in the St Philip's Marsh area of Bristol, one mile to the
east of Bristol Temple Meads. The initial agreement lasted for up to 5 months,
which has now been extended to 24 May 2022. During the exclusivity period we
will establish whether or not to proceed with the proposed acquisition. If the
acquisition were to go ahead, it would be subject to us obtaining an agreeable
planning permission for the site and as such the completion is unlikely to
occur in the near term.
ESG Programme and electronic financial reporting
The impact that the real estate sector has on carbon emissions has been
extensively reported and is increasingly affecting occupier and investor
decisions. In order to guide our approach to sustainability for the
development portfolio, the Board have established an ESG programme which forms
a key part of each project and its constituent components - from project
brief, through to design/specification, construction, operation and
renovation. At all stages, the development, operations and asset management
teams are required to assess their performance, innovate, evolve and perfect
all practices against the ESG framework. Further details of the programme will
be set out in the Group's 2022 Annual Report.
As part of these arrangements, to avoid where possible the distribution in
paper format of the Company's Interim and Annual Report's each year, the
shareholders passed a resolution at the Company's AGM in December 2021 to
authorise the Company to serve notices or supply other documentation by
electronic means. For those individual shareholders that specifically
requested to continue to receive such documents in paper format the
arrangements will continue as before. For all others these reports will be
made available, as soon as practically possible after the Group's results are
announced each period, via the Company's website.
Share placing
At the Company's Annual General Meeting, held on 20 December 2021, resolutions
were passed to enable the Company to complete the placing of 7,138,998
Ordinary shares of 5p each at a placing price of 150p per share, to enable the
further progression of The Island Quarter project. This includes the continued
development and fitting out of the first phase of the scheme at Canal Turn,
bringing a new electricity substation to the site and, later this year, to
part fund the equity component of the student accommodation development.
The premium received from each placing share over their 5p nominal value, net
of fees paid in connection with the placing, resulted in a £10.16 million
credit to the Company's share premium account. At a General Meeting of the
Company on 28 March 2022 a further resolution was passed to enable the
cancellation of the share premium account, subject to approval of the Court,
such that the amount cancelled can be credited to a distributable reserve. On
22 April 2022, an application was submitted to the Court to request the
cancellation which is expected to be considered in late May 2022.
Outlook
The soon to be opening up and ongoing development programme at The Island
Quarter site in Nottingham in conjunction with the resurgence of interest in a
nuclear capability in Anglesey leaves the Group well placed to benefit from
the post-pandemic economic bounce and strong demand for high quality,
sustainable, UK real estate, particularly in the residential rental market.
Although the further advancement of our development portfolio will require a
substantial investment by third-parties we are confident that there is
significant interest which will become clearer over the year.
N J
Hamway
R T E Ware
Chairman
Chief Executive
Financial review
Net asset value
During the six months ended 31 March 2022, the net asset value increased by
£12.44 million to £126.58 million (31 March 2021: £86.66 million; 30
September 2021: £114.14 million). The primary movements in the period were
net proceeds of £10.52 million from the placing of 7,139,000 ordinary shares,
a £3.42 million profit on completion of the forward sale agreement for Selly
Oak and a further £0.42 million profit from the sale of Cross Hands retail
park. This has been offset by £1.04 million of administrative costs, £0.20
million of development costs written off and £0.68 million of net operating
costs.
Conversely, the net asset value per share has decreased in the period by 5.16p
per share to 212.25p as at 31 March 2022. The placing of shares at a discount
to NAV, to provide additional capital to further progress The Island Quarter
project in Nottingham, resulted in a dilution of 8.58p per share. This was
partly offset by the £1.93 million profit realised in the period which
increased the net asset value per share by 3.42p.
Cash flow and financing
At 31 March 2022, the Group had cash deposits of £30.66 million and no debt
(31 March 2021: cash of £23.93 million and no debt; 30 September 2021: cash
of £13.66 million and no debt).
The primary cash inflows in the current period were gross proceeds of £18.54
million from the sale of Cross Hands, £7.04 million from the sale of Selly
Oak and £10.52 million from the share placing. These were partly offset by
£18.02 million incurred on development projects and investment properties,
including £14.33 million to progress the development at The Island Quarter
and £2.81 million to pay the Nottingham introductory fee provided for at 30
September 2021, resulting in a net cash inflow during the period of £17.00
million.
Net income from property
activities
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022 2021 2021
£'m £'m £'m
Rental income (0.51) 0.82 1.59
Direct property costs (0.18) (0.16) (0.29)
(0.69) 0.66 1.30
Sale of properties 25.58 1.05 1.05
Cost of properties sold (21.74) (0.62) (0.62)
3.84 0.43 0.43
Total net income arising from property activities 3.15 1.09 1.73
Administrative expenses
The administrative expenses for the period ended 31 March 2022 were £1.04
million (period ended 31 March 2021: £0.97 million; year ended 30 September
2021: £2.06 million). The major items were salary costs of £0.71 million
(period ended 31 March 2021: £0.69 million; year ended 30 September 2021:
£1.41 million) and various costs arising as a result of the Group being
listed on AIM.
Taxation
No current tax is payable on the profit for the six months ended 31 March 2022
(period ended 31 March 2021: £nil; year ended 30 September 2021: £nil) as
the group has tax losses available to offset against any resulting taxable
profit.
As set out in note 6 of the Interim Report, the Directors have assessed the
potential deferred tax liability of the Group as at 31 March 2022 in respect
of chargeable gains that would be payable if the investment properties were
sold at their reported values at each period end. Based on the unrealised
chargeable gain of £18.48 million arising in the year ended 30 September
2021, and remaining at 31 March 2022, a deferred tax liability of £4.62
million has been recognised.
The Directors have also recognised a deferred tax asset of £2.93 million at
31 March 2022 and 30 September 2021 for tax losses, held by various group
undertakings, where the Directors believe it is probable that these assets
will be recovered.
As at 31 March 2022, the Group has further unused tax losses of £19.10
million (31 March 2021: £42.00 million; 30 September 2021: £20.10 million)
for which no deferred tax asset has been recognised in the consolidated
balance sheet.
Summary of investment properties
31 Mar 2022 31 Mar 2021 30 Sept 2021
£'m £'m £'m
Nottingham - (1) 82.41 26.88 70.50
Cross Hands - (2) - 15.85 17.75
Total 82.41 42.73 88.25
(1) The Group's investment in Nottingham was valued by the Directors at 31
March 2022 and by Knight Frank LLP, in their capacity as external valuers at
30 September 2021. In accordance with IAS 40, as this project was not
sufficiently advanced, such that a fair value could be readily determined at
31 March 2021, the investment in Nottingham was reported at cost on that date.
(2) Cross Hands was sold in February 2022. External valuations for the
other reported periods were provided by Knight Frank LLP.
Summary of development and trading properties
31 Mar 2022 31 Mar 2021 30 Sept 2021
£'m £'m £'m
Haverfordwest 8.93 7.93 8.62
Holyhead Waterfront 5.00 5.00 5.00
Selly Oak - (2) - 3.57 3.57
Rhosgoch 2.50 2.50 2.50
Parc Cybi 0.50 0.50 0.50
Total 16.93 19.50 20.19
(1) Development and trading properties are stated at the lower of cost and
net realisable value.
(2) The sale of Selly Oak completed in December 2021.
Consolidated statement of comprehensive income
For the six months ended 31 March 2022
Year ended
Six months ended
31 Mar 31 Mar 30 Sept
2022
2021
2021
Note £'000 £'000 £'000
Rental income 3 (506) 824 1,592
Proceeds on sale of development and
trading properties 7,040 1,050 1,050
Revenue 6,534 1,874 2,642
Direct costs of rental income (178) (155) (288)
Costs on sale of development and (3,620) (620) (620)
trading properties
Development costs written off 12 (202) (367) (675)
Direct costs (4,000) (1,142) (1,583)
Gross profit 2,534 732 1,059
Profit on sale of investment property 423 - -
(Deficit) / surplus on revaluation of investment property 9 - (1,151) 459
Surplus on revaluation of investment properties - - 28,718
under construction
Administrative expenses (1,036) (973) (2,058)
Operating profit/ (loss) 1,921 (1,392) 28,178
Finance costs 5 - (1) (2)
Finance income 5 5 25 34
Profit / (loss) before taxation 1,926 (1,368) 28,210
Taxation 6 - - (1,685)
Profit / (loss) and total comprehensive 1,926 (1,368) 26,525
income / (loss) for the period
Basic and diluted profit / (loss) per share 8 3.42p (2.55)p 49.99p
All amounts are attributable to equity shareholders of the Company.
All of the activities of the Group are classed as continuing.
Consolidated statement of changes in equity
For the six months ended 31 March 2022
Share capital Share Capital redemption reserve Treasury Retained earnings Total equity
premium account
shares
£'000 £'000 £'000 £'000 £'000 £'000
Changes in equity for the
six months ended 31 March 2021
At 1 October 2020 2,680 - 3,873 - 82,280 88,833
Loss for the period - - - - (1,368) (1,368)
Total comprehensive charge for the period - - - - (1,368) (1,368)
Purchase of own shares - - - (807) - (807)
At 31 March 2021 2,680 - 3,873 (807) 80,912 86,658
Changes in equity for the
year ended 30 September 2021
At 1 October 2020 2,680 - 3,873 - 82,280 88,833
Profit for the year - - - - 26,525 26,525
Total comprehensive income for the year - - - - 26,525 26,525
Purchase of own shares - - - (1,217) - (1,217)
Cancellation of treasury shares (55) - 55 1,217 (1,217) -
At 30 September 2021 2,625 - 3,928 - 107,588 114,141
Changes in equity for the
six months ended 31 March 2022
At 1 October 2021 2,625 - 3,928 - 107,588 114,141
Profit for the period - - - - 1,926 1,926
Total comprehensive income for the period - - - - 1,926 1,926
Gross proceeds from placing of own shares 357 10,352 - - - 10,709
Fees paid on placing of own shares - (193) - - - (193)
At 31 March 2022 2,982 10,159 3,928 - 109,514 126,583
Consolidated balance sheet
As at 31 March 2022
31 Mar 31 Mar 30 Sept
2022
2021
2021
Note £'000 £'000 £'000
Non-current assets
Investment properties 9 - 15,850 17,750
Investment properties under construction 10 82,411 26,882 70,500
Fixtures, fittings and equipment 11 182 - -
Right of use asset 7 100 53
Deferred tax asset 6 2,935 - 2,935
85,535 42,832 91,238
Current assets
Development and trading properties 12 16,926 19,503 20,192
Trade and other receivables 13 1,258 1,453 2,661
Tax asset 28 31 28
Cash and cash equivalents 30,661 23,933 13,657
48,873 44,920 36,538
Total assets 134,408 87,752 127,776
Current liabilities
Trade and other payables 14 904 995 3,367
Provision for liabilities and charges 15 - - 5,614
Lease liability for right of use asset - 99 34
904 1,094 9,015
Non-current liabilities
Deferred tax liability 6 4,620 - 4,620
Provision for liabilities and charges 15 2,301 - -
6,921 - 4,620
Total liabilities 7,825 1,094 13,635
Net assets 126,583 86,658 114,141
Equity
Called up share capital 16 2,982 2,680 2,625
Share premium account 16 10,159 - -
Capital redemption reserve 3,928 3,873 3,928
Treasury shares - (807) -
Retained earnings 109,514 80,912 107,588
Total equity 126,583 86,658 114,141
Net assets per share 17 212.25p 163.97p 217.41p
Consolidated cash flow statement
For the six months ended 31 March 2022
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022
2021
2021
£'000 £'000 £'000
Cash flows from operating activities
Operating profit / (loss) 1,921 (1,392) 28,178
Development costs written off 202 367 675
Deficit / (surplus) on revaluation of investment properties - 1,151 (29,177)
Profit on sale of investment property (423) - -
Profit on sale of development and trading properties (3,420) (430) (430)
Depreciation of right of use assets 46 46 93
Cash flows from operations before changes in working capital (1,674) (258) (661)
Decrease / (increase) in trade and other receivables 1,403 202 (1,006)
Additions to development and trading properties (712) (686) (1,438)
Net proceeds from sale of development and trading properties 6,990 1,033 1,025
(Decrease) / increase in trade and other payables (577) (296) 287
Cash flows generated from / (used in) operations 5,430 (5) (1,793)
Tax received - - 3
Cash flows generated from / (used in) operating activities 5,430 (5) (1,790)
Cash flows from investing activities
Additions to investment properties (14,501) (7,737) (15,496)
Proceeds from the sale of investment property 18,465 - -
Payment of introductory fee (note 15) (2,807) - -
Additions to fixtures, fittings and equipment (104) - -
Finance income 5 25 34
Cash flows generated from / (used in) investing activities 1,058 (7,712) (15,462)
Cash flows from financing activities
Net proceeds from placing of own shares 10,516 - -
Purchase of own shares - (476) (1,217)
Cash flows generated from / (used in) financing activities 10,516 (476) (1,217)
Net increase / (decrease) in cash and cash equivalents 17,004 (8,193) (18,469)
Cash and cash equivalents at start of period 13,657 32,126 32,126
Cash and cash equivalents at end of period 30,661 23,933 13,657
Notes to the interim results
1. General information
The Conygar Investment Company PLC ("the Company") is incorporated in the
United Kingdom and domiciled in England and Wales, is registered at Companies
House under registration number 04907617, listed on the AIM market of the
London Stock Exchange and limited by shares.
The financial information set out in this report covers the six months to 31
March 2022, with comparative amounts shown for the six months to 31 March 2021
and the year to 30 September 2021, and includes the results and net assets of
the Company and its subsidiaries, together referred to as the Group.
Further information about the Group and Company can be found on its website
www.conygar.com.
2. Basis of preparation
The accounting policies used in preparing the condensed financial information
are consistent with those of the annual financial statements for the year
ended 30 September 2021 other than the mandatory adoption of new standards,
revisions and interpretations that are applicable to accounting periods
commencing on or after 1 October 2021, as detailed in the annual financial
statements.
The condensed financial information for the six-month period ended 31 March
2022 and the six-month period ended 31 March 2021 has been reviewed but not
audited and does not constitute full financial statements within the meaning
of section 435 of the Companies Act 2006.
The financial information for the year ended 30 September 2021 does not
constitute the Group's statutory accounts for that period but it is derived
from those accounts. Statutory accounts for the year ended 30 September 2021
have been delivered to the Registrar of Companies. Saffery Champness LLP
reported on those accounts, their report was unqualified and did not contain
statements under section 498(2) or (3) of the Companies Act 2006.
The board of directors approved the above results on 10 May 2022.
Copies of the interim report may be obtained from the Company Secretary, The
Conygar Investment Company PLC, First Floor, Suite 3, 1 Duchess Street,
London, W1W 6AN.
3. Rental income
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022
2021
2021
£'000 £'000 £'000
Income from operating leases 898 804 1,552
Reversal of rent spreading adjustment (1,424) - -
Option fee income 20 20 40
(506) 824 1,592
The Group's revenue for the period ended 31 March 2022 includes the reversal
of a £1.4 million accrued rent debtor following the sales of Cross Hands and
Selly Oak in the current period. This debtor arose from the even spreading of
rental income, derived from operating leases, over each tenant's respective
minimum lease term after allowing for rent free periods.
4. Segmental information
IFRS 8 "Operating Segments" requires the identification of the
Group's operating segments which are defined as being discrete components of
the Group's operations whose results are regularly reviewed by the Board. The
Group divides its business into the following segments:
· Investment properties held for capital appreciation, rental income or
both;
· Development and trading properties, which include sites and
developments under construction held for sale in the ordinary course of
business; and,
· Food, beverage and events operations, which are planned to commence
in July 2022.
Balance sheet
As at 31 Mar 2022 As at 31 Mar 2021
Investment Development Food, beverage and events Other Group Investment Development Other Group
properties
properties
total
properties
properties
total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investment properties 82,411 - - - 82,411 42,732 - - 42,732
Development and - 16,926 - - 16,926 - 19,503 - 19,503
trading properties
Fixtures, fittings and equipment - - 182 - 182 - - - -
82,411 16,926 182 - 99,519 42,732 19,503 - 62,235
Other assets 3,777 42 - 31,070 34,889 1,205 256 24,056 25,517
Total assets 86,188 16,968 182 31,070 134,408 43,937 19,759 24,056 87,752
Liabilities (7,513) (54) - (258) (7,825) (516) (48) (530) (1,094)
Net assets 78,675 16,914 182 30,812 126,583 43,421 19,711 23,526 86,658
Statement of comprehensive income
Six months ended Six months ended
31 March 2022
31 March 2021
Investment Development Other Group Investment Development Other Group
properties
properties
total
properties
properties
total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue (524) 7,058 - 6,534 640 1,234 - 1,874
Direct costs (78) (3,922) - (4,000) (99) (1,043) - (1,142)
Gross (loss) / profit (602) 3,136 - 2,534 541 191 - 732
Revaluation of investment properties - - - - (1,151) - - (1,151)
Profit on sale of investment property 423 - - 423 - - - -
Administrative expenses - - (1,036) (1,036) - - (973) (973)
Operating (loss) / profit (179) 3,136 (1,036) 1,921 (610) 191 (973) (1,392)
Finance costs - - - - - - (1) (1)
Finance income - - 5 5 - - 25 25
(Loss) / profit before taxation (179) 3,136 (1,031) 1,926 (610) 191 (949) (1,368)
Taxation - - - - - - - -
(Loss) / profit after taxation (179) 3,136 (1,031) 1,926 (610) 191 (949) (1,368)
5. Finance income and cost
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022
2021
2021
£'000 £'000 £'000
Bank interest receivable 5 25 34
Interest cost under IFRS 16 - 1 2
6. Taxation
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022
2021
2021
£'000 £'000 £'000
Current tax - - -
Deferred tax charge - - 1,685
Total tax charge - - 1,685
Deferred tax asset Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022
2021
2021
£'000 £'000 £'000
At start of the period 2,935 - -
Credit for the period - - 2,935
At end of the period 2,935 - 2,935
6. Taxation
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022
2021
2021
£'000 £'000 £'000
Current tax - - -
Deferred tax charge - - 1,685
Total tax charge - - 1,685
Deferred tax asset Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022
2021
2021
£'000 £'000 £'000
At start of the period 2,935 - -
Credit for the period - - 2,935
At end of the period 2,935 - 2,935
The Group has recognised a deferred tax asset for tax losses, held by various
group undertakings, where the Directors believe it is probable that this asset
will be recovered.
As at 31 March 2022, the Group has further unused losses of £19.1 million (31
March 2021: £42.0 million; 30 September 2021: £20.1 million) for which no
deferred tax asset has been recognised in the consolidated balance sheet.
Deferred tax liability - in respect of chargeable gains on investment Six months ended Year ended
properties
31 Mar 31 Mar 30 Sept
2022
2021
2021
£'000 £'000 £'000
At start of the period 4,620 - -
Charge for the period - - 4,620
At end of the period 4,620 - 4,620
The Directors have assessed the potential deferred tax liability of the Group
as at 31 March 2022 in respect of chargeable gains that would be payable if
the investment properties were sold at their reported values at each period
end. Based on the unrealised chargeable gain of £18,478,000 arising in the
year ended 30 September 2021, and remaining at 31 March 2022, a deferred tax
liability of £4,620,000 has been recognised.
The deferred tax asset and liability have been calculated at a corporation tax
rate of 25% being the rate that has been enacted by the balance sheet date and
which is expected to apply when the liability is settled and the asset
realised.
7. Dividends
No dividends were paid in the six-month periods ended 31 March 2022 and 31
March 2021 or the year ended 30 September 2021.
8. Profit / (loss) per share
Profit / (loss) per share is calculated as the profit / (loss) attributable to
ordinary shareholders of the Company for the period ended 31 March 2022 of
£1,926,000 (period ended 31 March 2021: loss of £1,368,000; year ended 30
September 2021: profit of £26,525,000) divided by the weighted average number
of shares in issue throughout the period of 56,382,891 (31 March 2021:
53,569,832; 30 September 2021: 53,064,275). There are no diluting amounts in
either the current or prior periods.
9. Investment properties
31 Mar 31 Mar 30 Sept 2021
2022 2021
£'000 £'000 £'000
At the start of the period 17,750 16,500 16,500
Additions 109 501 791
Disposals (17,859) - -
Revaluation (deficit) / surplus - (1,151) 459
At the end of the period - 15,850 17,750
The investment property at Cross Hands was sold on 10 February 2022 for net
proceeds of £18.3 million. As at 31 March 2021 and 30 September 2021, Cross
Hands was valued by Knight Frank LLP in their capacity as external valuers.
The valuations were prepared on a fixed fee basis, independent of the property
value and undertaken in accordance with the RICS Valuation - Global Standards
on the basis of fair value, supported by reference to market evidence of
transaction prices for similar properties. They assume a willing buyer and a
willing seller in an arm's length transaction and reflect usual deductions in
respect of purchaser's costs and SDLT as applicable at each valuation date.
The independent valuer made various assumptions including future rental
income, anticipated void costs and the appropriate discount rate or yield.
The fair values were determined using an income capitalisation technique
whereby contracted rent and market rental values are capitalised with a market
capitalisation rate. This technique is consistent with the principles in IFRS
13 and uses significant unobservable inputs, such that the fair value has been
classified in all periods as Level 3 in the fair value hierarchy as defined in
IFRS 13.
The historical cost of the Group's investment properties as at 31 March 2022
was £nil (31 March 2021: £13,952,000; 30 September 2021: £14,242,000).
The Group's revenue for the period ended 31 March 2022 includes £898,000
derived from properties leased out under operating leases (period ended 31
March 2021: £804,000; year ended 30 September 2021: £1,552,000). The Group's
revenue for the period ended 31 March 2022 also includes the reversal of a
£1.4 million accrued rent debtor as set out in note 3.
10. Investment properties under construction
31 Mar 31 Mar 30 Sept 2021
2022 2021
£'000 £'000 £'000
At the start of the period 70,500 19,761 19,761
Additions 12,417 7,121 16,407
Revaluation surplus - - 28,718
Movement in introductory fee provision (note 15) (506) - 5,614
At the end of the period 82,411 26,882 70,500
Investment properties under construction comprise freehold land and buildings
at The Island Quarter, Nottingham which are held for current or future
development as investment properties and reported in the balance sheet at fair
value as at 31 March 2022 and 30 September 2021 and cost as at 31 March 2021.
As set out in the Chairman's and Chief Executive's statement, the reported
fair value of The Island Quarter site as at 31 March 2022 has been provided by
the Conygar Board by reference to any changes in the assumptions set out in
the reported 30 September 2021 valuation provided by Knight Frank LLP,
progression of the project and the recoverability of costs incurred since that
date. During the period, no planning permissions have been granted or
buildings completed and whilst we recognise the impact that price inflation is
currently having upon property construction costs, we are seeing these
increases offset by a corresponding uplift in market rents, particularly
within the residential build to rent and student accommodation sectors.
However, there have been significant cash outlays in the period to bring
electricity to the site and progress the construction of Canal Turn. As such
the fair value at 31 March 2022 has been increased by £11.91 million to
£82.41 million to reflect the development costs incurred in the six-months
since 30 September 2021.
In preparing their valuation at 30 September 2021, Knight Frank utilised
market and site specific data, their own extensive knowledge of the real
estate sector, professional judgement and other market observations as well as
information provided by the Company's Executive Directors. The resulting
models and assumptions therein were also reviewed for overall reasonableness
by the Conygar Board. Inevitably, with complex modelling like this, variations
in assumptions can lead to widely differing values. The Board considered the
valuation in the context of their experience and believed the value of
approximately £2 million per acre was justifiable at that date.
The Knight Frank LLP valuation was prepared on a fixed fee basis, independent
of the property value and undertaken in accordance with RICS Valuation -
Global Standards on the basis of fair value, supported by reference to market
evidence of transaction prices for similar properties. It assumed a willing
buyer and a willing seller in an arm's length transaction and reflected usual
deductions in respect of purchaser's costs and SDLT as applicable at the
valuation date. The independent valuer made various assumptions including
future rental income, anticipated void costs and the appropriate discount rate
or yield.
The fair value of Nottingham has been determined using an income
capitalisation technique whereby contracted rent and market rental values are
capitalised with a market capitalisation rate. This technique is consistent
with the principles in IFRS 13 and uses significant unobservable inputs, such
that the fair value was classified as Level 3 in the fair value hierarchy as
defined in IFRS 13. For Nottingham, the key unobservable inputs are the net
initial yields, construction costs, rental income rates and expiry void
periods. The principal sensitivity of measurement to variations in the
significant unobservable outputs is that decreases in net initial yields,
construction costs and void periods and higher rental income rates will
increase the fair value whereas increases in net initial yields, construction
costs and void periods and lower rental income rates would decrease the fair
value.
The historical cost of the Group's investment properties under construction as
at 31 March 2022 was £51,392,000 (31 March 2021: £26,882,000; 30 September
2021: £36,168,000).
11. Fixtures, fittings and equipment
31 Mar 31 Mar 30 Sept 2021
2022 2021
£'000 £'000 £'000
At the start of the period - - -
Additions 182 - -
At the end of the period 182 - -
During the six-month period to 31 March 2022 the Group acquired some of the
furniture and equipment that will be required to operate the restaurant,
beverage and events businesses, planned for opening in the summer of 2022, at
The Island Quarter site.
The cost of these assets will be depreciated over their useful economic lives
from the date they become available for use.
12. Development and trading properties
31 Mar 31 Mar 30 Sept 2021
2022 2021
£'000 £'000 £'000
At the start of the period 20,192 19,952 19,952
Additions 506 513 1,510
Disposals (3,570) (595) (595)
Development costs written off (202) (367) (675)
At the end of the period 16,926 19,503 20,192
Development and trading properties are reported in the balance sheet at the
lower of cost and net realisable value. The net realisable value of properties
held for development requires an assessment of the underlying assets using
property appraisal techniques and other valuation methods. Such estimates are
inherently subjective as they are made on assumptions which may not prove to
be accurate and which can only be determined in a sales transaction.
The Group completed the sale of its property at Selly Oak in December 2021.
13. Trade and other receivables
31 Mar 31 Mar 30 Sept 2021
2022 2021
£'000 £'000 £'000
Trade receivables 162 87 127
Other receivables 887 293 1,229
Prepayments and accrued income 209 1,073 1,305
1,258 1,453 2,661
Trade and other receivables are measured on initial recognition at fair value,
and are subsequently measured at amortised cost using the effective interest
rate method, less any impairment. Impairment is calculated using an expected
credit loss model.
14. Trade and other payables
31 Mar 31 Mar 30 Sept 2021
2022 2021
£'000 £'000 £'000
Social security and payroll taxes 54 56 55
Trade payables 692 685 2,300
Accruals and deferred income 158 254 1,012
904 995 3,367
Trade and other payables are recognised initially at fair value, and are
subsequently measured at amortised cost using the effective interest rate
method.
15. Provision for liabilities and charges
31 Mar 31 Mar 30 Sept 2021
2022 2021
£'000 £'000 £'000
At the start of the period 5,614 - -
Paid in the period (2,807) - -
Movement in provision in the period (506) - 5,614
At the end of the period 2,301 - 5,614
As at 30 September 2021, the Group was party to a services agreement and
introduction fee agreement in connection with its investment property at
Nottingham. The fee payable, under the terms of each agreement, in connection
with introductory and other services, was to be calculated on the earlier of
the date of sale of the property or 22 December 2021 with settlement to
follow, subject to agreement between each party, 31 business days after the
fee calculation has been finalised. In January 2022, the introductory fee,
calculated at £2.807 million, was paid and the longstop date for the services
agreement calculation extended until 22 December 2023. The provisions at 31
March 2022 and 30 September 2021 have been calculated by reference to the
value of the property at each balance sheet date after allowing for a priority
return and applicable costs.
16. Share capital
Number of shares: Six months ended Year ended
31 Mar 31 Mar 30 Sept 2021
2022 2021
At the start of the period 52,499,590 53,591,590 53,591,590
Placing of own shares 7,138,998 - -
Cancellation of treasury shares - - (1,092,000)
At the end of the period 59,638,588 53,591,590 52,499,590
Nominal value of Ordinary shares of 5p each: Six months ended Year ended
31 Mar 31 Mar 30 Sept 2021
2022 2021
£'000 £'000 £'000
At the start of the period 2,625 2,680 2,680
Placing of own shares 357 - -
Cancellation of treasury shares - - (55)
At the end of the period 2,982 2,680 2,625
At the Company's Annual General Meeting held on 20 December 2021, resolutions
were passed to enable the Company to complete the placing of 7,138,998
Ordinary shares of 5p each at a placing price of 150p per share. The premium
received from each placing share over their 5p nominal value, net of fees paid
in connection with the placing, resulted in £10.16 million credit to the
Company's share premium account.
At a General Meeting of the Company on 28 March 2022 a further resolution was
passed to enable the cancellation of the share premium account, subject to
approval of the Court, such that the amount cancelled can be credited to a
distributable reserve. On 22 April 2022, an application was submitted to the
Court to request the cancellation which is expected to be considered in late
May 2022.
17. Net assets per share
Net assets per share is calculated as the net assets of the Group divided by
the number of shares in issue. There are no diluting or adjusting amounts for
the reported periods.
31 Mar 2022 31 Mar 30 Sept 2021
2021
£'000 £'000 £'000
Net assets 126,583 86,658 114,141
No. No. No.
Shares in issue 59,638,588 53,591,590 52,499,590
Net assets per share 212.25p 163.97p 217.41p
18. Key management compensation
Key management personnel have the authority and responsibility for planning,
directing and controlling the activities of the Group and are considered to be
the Directors of the Company. Amounts paid in respect of key management
compensation were as follows:
Six Year ended
months ended
31 Mar 31 Mar 2021 30 Sept 2021
2022
£'000 £'000 £'000
Short term employee benefits 518 430 929
Independent Review Report to The Conygar Investment Company PLC
Introduction
We have been engaged by The Conygar Investment Company PLC ("the Company") to
review the condensed set of financial statements in the half-yearly financial
report for the six-month period ended 31 March 2022 which comprises the
consolidated statement of comprehensive income, the consolidated statement of
changes in equity, the consolidated balance sheet, the consolidated cash flow
statement and the related notes. We have read the other information contained
in the half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the
condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the AIM Rules.
Our review has been undertaken so that we might state to the Company those
matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the AIM Rules.
As disclosed in note 1, the annual financial statements of the Company are
prepared in accordance with UK-adopted International Accounting Standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK-adopted International
Accounting Standard 34 "Interim Financial Reporting".
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity". A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and consequently does
not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six-month period ended 31 March 2022 is not prepared,
in all material aspects, in accordance with UK-adopted International
Accounting Standard 34 and the AIM Rules.
Saffery Champness LLP
Chartered Accountants and Registered Auditors
London
10 May 2022
Notes:
(a) The maintenance and integrity of The Conygar
Investment Company PLC website is the responsibility of the Directors; the
work carried out by the auditors does not involve consideration of these
matters and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the interim report since it was initially
presented on the website.
(b) Legislation in the United Kingdom governing the
presentation and dissemination of financial information may differ from
legislation in other jurisdictions.
The Directors of Conygar accept responsibility for the information contained
in this announcement. To the best of the knowledge and belief of the Directors
of Conygar (who have taken all reasonable care to ensure that such is the
case) the information contained in this announcement is in accordance with the
facts and does not omit anything likely to affect the import of such
information.
For those individual shareholders that specifically requested to continue to
receive any document issued by the Company in paper format the arrangements
will continue as before whereby the Interim Report for the period ended 31
March 2022 will be posted to those shareholders shortly. For all other
shareholders, the Interim Report will be made available, as soon as
practically possible, via the Company's website.
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 (mailto:rns@lseg.com)
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