REG - Conygar Investmnt Co - Preliminary Results
22/11/2022 07:00
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RNS Number : 1296H Conygar Investment Company PLC(The) 22 November 2022
22 November 2022
THE CONYGAR INVESTMENT COMPANY PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2022
SUMMARY
· Net asset value ("NAV") increased by £10.5 million to £124.6
million (208.9p per share; 2021: 217.4p per share), comprising a £10.5
million uplift from the placing of 7,138,998 of the Company's own shares net
of a £53,000 loss in the year.
· NAV per share decreased by 8.5p per share as a result of issuing the
placing shares.
· Total cash deposits of £17.4 million (29.1p per share).
· No debt and no borrowings.
· A further £23.6 million was invested in The Island Quarter,
Nottingham during the year, to progress the various phases of this mixed-use
development. This has resulted in a valuation of £93 million, as at 30
September 2022, equating to approximately £2.5 million per acre.
· Development completed, and trading commenced in September 2022, for
the first phase of The Island Quarter comprising the restaurant and events
venue at 1 The Island Quarter.
· Construction commenced on the 693 bed The Island Quarter student
accommodation development planned for completion in the summer of 2024.
· Resolution passed by Nottingham City Council in May 2022 to grant
planning consent for a further phase of The Island Quarter development
comprising 247 build to rent apartments, 223 hotel rooms and 400 co-working
desks, as well as a food and beverage provision.
· Disposal of the retail park at Cross Hands, Carmarthenshire for
£18.28 million to realise a £0.53m surplus over the 30 September 2021
valuation and a £0.38m profit for the year after sales costs.
· Disposal of two development sites at Selly Oak, Birmingham and Parc
Cybi, Holyhead completed in the year, realising a combined net profit of
£3.64 million.
· A further planning application was submitted in October 2021 for the
proposed waterfront development in Holyhead, Anglesey, supplementing the
outline consent previously granted in 2014, which includes a 250-berth marina,
259 townhouses and apartments and associated retail and public realm.
Group net assets summary
30 September 2022 30 September 2021
Per share Per share
£'m p £'m p
Properties 110.1 184.7 108.4 206.6
Cash 17.4 29.1 13.7 26.0
Other 0.2 0.3 (0.7) (1.3)
Provisions (3.1) (5.2) (7.3) (13.9)
Net assets 124.6 208.9 114.1 217.4
Robert Ware, Chief Executive commented:
"The repercussions from the ongoing macroeconomic and geo-political
uncertainty will inevitably have a significant impact on the Group's ability
to raise finance for, and realise value from, its real estate portfolio in the
near term.
Furthermore, sustained inflation, as a result of the combined effects from
commodity and supply chain shortages, liberal government spending and tight
labour markets, compounded by the Russian invasion of Ukraine, has inevitably
resulted in an acceleration of the Bank of England's monetary policy
tightening and subsequent expansion of commercial property yields.
Whilst we cannot isolate ourselves from the consequences of this market
uncertainty, we will continue to cautiously move our development programme
forward with a particular focus on the targeted and efficient use of the
Group's existing and anticipated cash deposits. This will include the further
advancement of the detailed designs and planning submissions for The Island
Quarter, in order that the Group is well positioned to take advantage of these
opportunities as and when our cash flows and market sentiment allows."
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
Temple Bar Advisory (public relations)
Alex Child-Villiers: 07795 425580
Will Barker: 07827 960151
Chairman's and Chief Executive's Statement
Overview
We started the year with a degree of optimism, post pandemic, but what has
followed both globally and domestically has inevitably tested even the most
robust and resilient of economies and companies. Against this very challenging
backdrop, we have progressed realising the value from our property portfolio
by way of sales and further investment, as well as advancing and sourcing
additional funding to start to open up the significant opportunities offered
by our mixed-use development site at The Island Quarter in Nottingham.
Results summary
During the year, the Group completed the sales of its industrial units at
Selly Oak, Birmingham, a retail park at Cross Hands, Carmarthenshire and 2.4
acres of development land in Parc Cybi, Holyhead. The total net profits from
these sales of £4 million, in addition to property revaluation surpluses of
£0.3 million have been offset by property operating and administrative costs,
including £1.2 million of start-up costs for the initial phase of The Island
Quarter in Nottingham, to result in a net loss for the year of £53,000.
The Group's NAV increased in the year by £10.5 million as a result of placing
7.1 million of the Company's own shares. However, the placing of these shares
at a discounted price of 150p in addition to the small loss for the year has
resulted in a reduction of the Group's net asset value per share of 8.5p
(3.9%) to 208.9p per share as at 30 September 2022.
The property sales and share placing generated total net cash proceeds of
£36.1 million in the year which have been, and continue to be, substantially
utilised to progress the ongoing and anticipated future phases of The Island
Quarter which was valued at £93m, by Knight Frank LLP, as at 30 September
2022.
The Island Quarter, Nottingham
In mid-September 2022, we were delighted to have the first of many planned
developments opened to the public at 1 The Island Quarter on the north-west
corner of the site, to the south of Nottingham's historic lace market. This
venue, which occupies just over 1 acre, currently comprises an outdoor
performance area, an indoor event space for private hire, two dining
experiences, and, in due course, a roof top terrace planned for opening next
year which will provide stunning views over the city.
"Binks Yard" occupies the ground floor providing an all-day, dining, drinking
and entertainment venue whilst "Cleaver and Wake" offers a modern dining
experience, using the finest nationally-sourced produce, with both restaurants
under the leadership of Laurence Henry, the 2018 MasterChef: The Professionals
winner. The strength of this development lies in the variety of the offer,
incorporating not only the restaurants, but also the outside bandstand and
plaza, to provide live music and events for up to 500 guests, and the upper
floor events space available for private hire for a further 120 guests. All of
which, we believe, provide a number of compelling reasons to visit this new
destination within the city as we continue with our regeneration of the rest
of the site. Whilst we are acutely aware of the current challenges faced by
the hospitality industry, the initial trading performance for Canal Turn, when
compared with our own forecasts, has been encouraging.
In May 2022, the adjacent plot, which incorporates two hotels to be managed by
Intercontinental Hotels Group, co-working space, 247 build to rent apartments,
plus a food and beverage offering, was granted detailed planning permission.
Construction has also commenced on the 693 bed student accommodation
development, targeted for completion in the spring of 2024, with the buildings
expected to be available to students for the academic year commencing in
September 2024. The Group has progressed the early stages of this substantial
development by utilising its existing cash deposits.
Whilst we anticipate a substantial amount of the Group's existing cash
deposits will be utilised to progress the student accommodation development,
we are very encouraged by the continuing positive sentiment from investors
towards this asset class with demand currently outweighing the supply of
stock. Furthermore, domestic student demand is at an all-time high which,
coupled with the contracting supply of stock from private renters, provides an
opportunity for purpose built student accommodation ("PBSA") owners to meet
that excess demand.
We are currently finalising a detailed planning application, and are
progressing discussions with a potential funding partner, for approximately
190,000 square feet of bioscience space on The Island Quarter and expect to
submit the application in the coming weeks. The building will include both
laboratory and office space, as well as conference facilities and car parking
and be located adjacent to an existing bioscience hub.
We continue to progress the detailed designs for subsequent phases and are in
advanced discussions with potential investors in connection with further
commercial and residential developments and would hope to make announcements
in that respect over the coming months.
Other projects
At Cross Hands, Carmarthenshire, we sold our retail park in February 2022 for
net proceeds of £18.3 million, to benefit from the post-pandemic bounce in
retail warehousing values, generating a profit in the year of £0.4 million.
Further gains of £3.5 million were recognised, by way of revaluation
surpluses, in prior periods which, in addition to £1.1 million of post
development rental surpluses, has resulted in a total profit from the park of
£5.0 million.
The granting, by Birmingham City Council, of their consent to a student home
scheme at our site at Selly Oak, Birmingham enabled completion of the sale to
a specialist provider of student accommodation for gross proceeds of £7.0
million. The sale realised a profit in the year of £3.4 million.
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. The
determination of this application has been delayed by a lack of available
planning officers, but is now progressing and we expect it to be considered by
the planning committee early in 2023.
We continue to hold substantial plots of land at Rhosgoch and Parc Cybi on
Anglesey. During the year we achieved a sale of 2.4 acres of the land at Parc
Cybi for a net consideration of £0.3m, realising a profit over cost of £0.2
million. There has also been further interest from the renewables sector, in
particular for the site at Rhosgoch. However, we will continue to retain these
sites and wait to see whether the UK and Welsh Government's announcements
earlier this year, for their suggested support of nuclear and / or other
energy forms on Anglesey, actually translate to a full commitment.
At Haverfordwest in Pembrokeshire, where we have outline consent for 729
residential units and 90,000 square feet of implemented A1 retail, we
completed construction of a 300-metre spine road and associated infrastructure
in the year and are progressing discussions for the possible sale of the whole
site or individual plots and hope to make further announcements in that regard
later this year.
ESG Vision
The Board acknowledges the important role and impact that it, and the wider
real estate sector, has in connection with Environmental, Social and
Governance ("ESG") matters. As such, we have included for the first time in
the Annual Report the Board's vision and approach to ESG.
Dividend
The Board recommends that no dividend is declared in respect of the year ended
30 September 2022. More information on the Group's dividend policy can be
found within the Strategic Report.
Share buy back authority
The Board will seek to renew the buy back authority of 14.99% of the issued
share capital of the Company at the forthcoming AGM as we consider the buy
back authority to be a useful capital management tool and will continue to use
it, as our cash flows allow, when we believe the stock market value differs
too widely from our view of the intrinsic value of the Company.
Outlook
The repercussions from the ongoing macroeconomic and geo-political uncertainty
will inevitably have a significant impact on the Group's ability to raise
finance for, and realise value from, its real estate portfolio in the near
term.
Furthermore, sustained inflation, as a result of the combined effects from
commodity and supply chain shortages, liberal government spending and tight
labour markets, compounded by the Russian invasion of Ukraine, has inevitably
resulted in an acceleration of the Bank of England's monetary policy
tightening and subsequent expansion of commercial property yields.
Whilst we cannot isolate ourselves from the consequences of this market
uncertainty, we will continue to cautiously move our development programme
forward with a particular focus on the targeted and efficient use of the
Group's existing and anticipated cash deposits. This will include the further
advancement of the detailed designs and planning submissions for The Island
Quarter, in order that the Group is well positioned to take advantage of these
opportunities as and when our cash flows and market sentiment allows.
N J
Hamway
R T E Ware
Chairman
Chief
Executive
Strategic report
The Group's strategic report provides a review of the business for the
financial year, discusses the Group's financial position at the year end and
explains the principal risks and uncertainties facing the business and how we
manage those risks. We also outline the Group's strategy and business model.
Strategy and business model
The Conygar Investment Company PLC ("Conygar") is an AIM quoted property
investment and development group dealing in UK property. Our aim is to invest
in property assets and companies where we can add significant value using our
property management, development and transaction structuring skills.
The business operates two major strands, being property investment and
property development where we are prepared to use modest levels of gearing to
enhance returns. Assets are recycled to release capital as opportunities
present themselves and we will continue to buy back shares where appropriate.
The Group is content to hold cash and adopt a patient strategy unless there is
a compelling reason to invest.
Position of the Group at the year end
The Group net assets as at 30 September 2022 may be summarised as follows:
Per share
£'m p
Properties 110.1 184.7
Cash 17.4 29.1
Other 0.2 0.3
Provisions (3.1) (5.2)
Net assets 124.6 208.9
The Group's balance sheet remains both liquid and robust with cash deposits at
30 September 2022 of £17.4 million and no borrowings. We have utilised part
of the Group's cash deposits, including cash generated from the share placing
and property sales in the year, to complete the construction and connection of
The Island Quarter electricity sub-station, to substantially complete the
construction of the restaurant and events venue at 1 The Island Quarter and
commence construction of the 693 bed The Island Quarter student accommodation
development. However, the continuation of future phases requires us to seek
either debt funding, joint venture partners or to sell assets to take best
advantage of the opportunities presented by this significant development and
discussions are ongoing in this regard.
The Group is party to a letter of intent which provides total funding
commitments of £31.2m to the contractor of the student accommodation
development to enable the continued progression of its construction whilst
debt financing arrangements are put into place. The Group's commitments in
this regard are expected to be ultimately financed partly out of its own cash
deposits and partly from debt, for which we expect to provide a further update
in the coming weeks.
Key performance indicators
The key measures considered when monitoring progress towards the Board's
objective of providing attractive shareholder returns include the headway made
during the year on its development and investment property portfolio, the
movements in net asset value per share, levels of uncommitted cash and its
monitoring of and performance against its ESG targets.
The Chairman's and Chief Executive's Statement provides a detailed update on
the progress made during the year on the Group's property assets. Matters
considered by the Audit Committee and Remuneration Committee are set out in
the Corporate Governance section of the Annual Report. The Board's approach
and responsibilities in connection with environmental, social and governance
matters are set out in the ESG section of the Annual report. The other key
performance measures are considered below.
Summary of investment properties
2022 2021
£'m £'m
Nottingham - (1) 93.0 70.5
Cross Hands - (2) - 17.8
Total 93.0 88.3
1 The Group's investment in Nottingham was valued by Knight Frank LLP,
in their capacity as external valuers, as at 30 September 2022 and 30
September 2021.
2 The Group's investment in Cross Hands, which was sold in February
2022, was independently valued by Knight Frank LLP in the prior year.
Summary of development projects
We remain confident that there is significant upside in these projects, but
this will only become evident over the medium term.
2022 2021
£'m £'m
Haverfordwest 9.26 8.62
Holyhead Waterfront 5.00 5.00
Rhosgoch 2.50 2.50
Parc Cybi - (1) 0.38 0.50
Selly Oak - (1) - 3.57
Total 17.14 20.19
1 The Group's industrial units at Selly Oak and 2.4 acres of development
land at Parc Cybi were sold in the year.
Financial review
Net asset value
The net asset value increased in the year by £10.5 million to £124.6 million
at 30 September 2022. The primary movements were net proceeds of £10.5
million from the placing of 7,138,998 ordinary shares, a £3.6 million profit
from the sale of development properties at Selly Oak and Park Cybi, a £0.4
million profit from the sale of Cross Hands retail park and a revaluation
surplus of £0.3m for The Island Quarter. These gains have been offset by
£1.2 million of recruitment, training and start-up costs for 1 The Island
Quarter, £2.2 million of other administrative costs, £0.3 million of
development costs written off and £0.8 million of net property operating
costs.
Conversely, the net asset value per share has decreased in the period by 8.5p
per share to 208.9p as at 30 September 2022 primarily as a result of the
placing of shares at a discount to NAV, to provide additional capital to
further progress The Island Quarter project in Nottingham.
Cash flow and financing
At 30 September 2022, the Group had cash deposits of £17.4 million and no
debt (2021: cash of £13.7 million and no debt).
During the year, the Group generated £3.9 million of cash in its operating
activities (2021: used £1.8 million).
The other primary cash inflows for the year were net proceeds of £18.3
million from the sale of Cross Hands retail park and £10.5m from the placing
of the Company's own shares.
These cash inflows were offset by capital costs of £30.2 million. Capital
expenditure includes the construction costs and associated professional fees
for the infrastructure works, 1 The Island Quarter and student accommodation
developments at The Island Quarter, completion of a spine road on the
residential site at Haverfordwest and statutory fees to advance the proposed
development at Holyhead Waterfront.
Net income from property activities
2022 2021
£'m £'m
Rental and other income - (note 1) (0.3) 1.6
Direct property costs - (note 2) (1.6) (0.3)
(1.9) 1.3
Proceeds from property sales 25.7 1.0
Cost of property sales (21.7) (0.6)
Total net income arising from property activities 2.1 1.7
1 Rental and other income for the year ended 30 September 2022 includes
the reversal of a £1.4 million accrued rent debtor following the sales of
Cross Hands and Selly Oak. 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.
2 Direct property costs include £1.2 million for the upfront
consultancy, set up, recruitment, operational and administrative costs in
connection with the restaurant and events venue at 1 The Island Quarter to
ensure its successful opening in September 2022.
Administrative expenses
The administrative expenses for the year ended 30 September 2022, excluding 1
The Island Quarter, were £2.2 million (2021: £2.1 million). The major items
were salary costs of £1.4 million (2021: £1.4 million), head office running
costs and various costs arising as a result of the Group being listed on AIM.
Taxation
Current tax is payable at a rate of 19% on net rental income and profits from
the sale of development properties after deduction of finance costs and
administrative expenses.
Deferred tax is calculated at a rate of 25%, being the rate that has been
enacted or substantively enacted by the balance sheet date and which is
expected to apply when the tax liability, resulting from unrealised chargeable
gains arising on revaluation of the Group's investment properties, is
projected to be settled.
Capital management
Capital risk management
The Board's primary objective when managing capital is to preserve the Group's
ability to continue as a going concern, in order to safeguard its equity and
provide returns for shareholders and benefits for other stakeholders, whilst
maintaining an optimal capital structure to reduce the cost of capital.
As at the balance sheet date, the Group does not have any borrowings, but is
expected to utilise borrowings in the future to fund development projects.
When doing so the Group will seek to ensure that it can stay within agreed
covenants with its lenders.
Treasury policies
The objective of the Group's treasury policies is to manage the Group's
financial risk, secure cost effective funding for the Group's operations and
to minimise the adverse effects of fluctuations in the financial markets on
the value of the Group's financial assets and liabilities, reported
profitability and cash flows.
The Group finances its activities with a combination of cash and short term
deposits. Other financial assets and liabilities, such as trade receivables
and trade payables, arise directly from the Group's operations. The Group may
also finance its activities with bank loans and enter into derivative
transactions to manage the interest rate risk arising from its operations and
sources of finance. Throughout the year, and as at the balance sheet date, no
group undertakings were party to any bank loans or derivative instruments.
The management of cash is monitored weekly with summary cash statements
produced on a monthly basis and discussed regularly in management and board
meetings. The approach is to provide sufficient liquidity to meet the
requirements of the business in terms of funding developments and potential
acquisitions. Surplus funds are invested with a broad range of institutions.
At any point in time, at least half of the Group's cash is held on instant
access or short term deposit of less than 30 days.
Dividend policy
The Board recommends that no dividend is paid in respect of the year ended 30
September 2022 (2021: £nil).
Our dividend policy is consistent with the overall strategy of the business:
namely to invest in property assets and companies where we can add significant
value using our property management, development and transaction structuring
skills.
In previous years we have used the surplus cash flow from the then much larger
investment property portfolio to enhance these properties by refurbishment,
re-letting and extending tenancies, fund the operations of the business,
create a medium term pipeline of development opportunities, pay a modest
dividend and buy back shares where appropriate.
The Board will continue to review the dividend policy each year. Our focus is,
and will primarily continue to be, growth in net asset value per share.
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. 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 was duly confirmed by the Court on 10
May 2022 and completed on 12 May 2022.
Principal risks and uncertainties
Managing risk is an integral element of the Group's management activities and
a considerable amount of time is spent assessing and managing risks to the
business. Responsibility for risk management rests with the Board, with
external advisers used where necessary.
Strategic risks
Strategic risks are risks arising from an inappropriate strategy or through
flawed execution of a strategy that could threaten the future performance,
solvency or liquidity of the Group. By definition, strategic risks tend to be
longer term than most other risks and, as has been amply demonstrated in the
last few years, the economic and wider environment can alter quickly and
significantly. Strategic risks identified include global or national events,
regulatory and legal changes, market or sector changes and key staff
retention. As set out in the Chairman's and Chief Executive's Statement, the
ongoing macroeconomic and geo-political uncertainty, in addition to sustained
inflation, will inevitably have a significant impact on the Group's ability to
raise finance for, and realise value from, its real estate portfolio in the
near term.
The Board continually monitors and discusses the potential impact that changes
to the environment in which we operate can have upon the Group. We are
confident we have sufficiently high calibre Directors and managers to manage
strategic risks.
We are content that the Group has the right approach toward strategy and our
strong balance sheet is good evidence of that.
Operational risks
Operational risks are essentially those risks that might arise from inadequate
internal systems, processes, resources or incorrect decision making. Clearly,
it is not possible to eliminate operational risk. However, by ensuring we have
the right calibre of staff and external support in place we look to minimise
such risks, as most operational risks arise from people-related issues. Our
Executive Directors are very closely involved in the day-to-day running of the
business to ensure sound management judgement is applied.
Market risks
Market risks primarily arise from the possibility that the Group is exposed to
fluctuations in the values of, or income from, its cash deposits, investment
properties and development projects. This is a key risk to the principal
activities of the Group and the exposures are continuously monitored through
timely financial and management reporting and analysis of available market
intelligence.
Where necessary, management takes appropriate action to mitigate any adverse
impact arising from identified risks and market risks continue to be monitored
closely.
Estimation and judgement risks
To be able to prepare accounts according to generally accepted accounting
principles, management must make estimates and assumptions that affect the
asset and liability items and revenue and expense amounts recorded in the
accounts. These estimates are based on historical experience and various other
assumptions that management and the Board believe are reasonable under the
circumstances. The results of these considerations form the basis for making
judgements about the carrying value of assets and liabilities that are not
readily available from other sources.
The key sources of estimation uncertainty that have a significant risk of
causing material adjustment to the carrying amounts of assets and liabilities
within the next financial year are the following:
Investment properties
The fair values of investment properties are based upon open market value and
calculated, where applicable, using a third party valuation provided by an
external valuer.
Development properties
The net realisable value of properties held for development requires an
assessment of the value for the underlying assets using property appraisal
techniques and other valuation methods. Such estimates are inherently
subjective and actual values can only be determined in a sales transaction.
Financial assets
The interest rate profile of the Group's cash at the balance sheet date was as
follows:
30 Sep 22 30 Sep 21
£'000 £'000
Floating rate 17,109 13,281
Performance bond deposits 252 376
17,361 13,657
Fixed and floating rate financial assets comprise cash and short term
performance bond deposits held with banks whose credit ratings are acceptable
to the Board.
Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty fails
to meet its contractual obligations. The Group's principal financial assets
include its financial interest in property assets, cash deposits and trade and
other receivables. The carrying amount of financial assets recorded in the
financial statements represents the Group's maximum exposure to credit risk
without taking account of the value of any collateral obtained.
In the event of default by an occupational tenant, the Group will suffer a
rental shortfall and incur additional costs. The Directors continually monitor
tenant arrears in order to anticipate, and minimise the impact of, defaults by
occupational tenants and if necessary, where circumstances allow, will apply
rigorous credit control procedures to facilitate the recovery of trade
receivables.
Under IFRS 9, the Group is required to provide for any expected credit losses
arising from trade receivables. For all assured shorthold tenancies, credit
checks are performed prior to acceptance of the tenant. Regulated tenants are
incentivised through the benefit of their tenancy agreement to avoid default
on their rent and rent deposits are held where applicable. Taking these
factors into account, the risk to the Group of individual tenant default and
the credit risk of trade receivables are considered low, albeit that risk
increased as a result of the impact of COVID-19, as is borne out by the level
of trade receivables written off in the current and prior years.
The Directors have provided for rental and other arrears due from various
tenants impacted by, amongst other factors, the economic downturn and COVID-19
pandemic which amount to £200,000 at 30 September 2022 and which remain
outstanding at the date of signing the financial statements. The impaired
receivables are based on a review of expected credit losses. Impaired
receivables and receivables not considered to be impaired are not material to
the financial statements and, therefore, no further analysis is provided.
The credit risk on cash deposits is managed through the Company's policies of
monitoring counterparty exposure and the use of counterparties of good
financial standing. At 30 September 2022, the credit exposure from cash held
with banks was £17.4 million which represents 13.9% of the Group's net
assets. All cash deposits at the balance sheet date are placed with banks,
whose credit ratings are acceptable to the Board, on instant access accounts.
Should the credit quality or the financial position of the banks currently
utilised significantly deteriorate, cash deposits would be moved to
alternative banks.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. The Group seeks to manage its
liquidity risk by ensuring that sufficient cash is available to meet its
foreseeable needs. The Group has cash deposits at the balance sheet date of
£17.4 million. However, we will need to raise substantial amounts either as
debt, or through joint ventures or further asset sales, in order to
significantly progress The Island Quarter development in Nottingham and expect
to make announcements in that respect over the coming months.
Section 172 statement
Directors' duty to promote the success of the Company under Section 172
Companies Act 2006
The strategic report is required to include a statement that describes how the
Directors have had regard to the matters set out in section 172(1) (a) to (f)
of the Companies Act 2006 when performing their duty under section 172. Some
of the matters identified in Section 172(1) are already covered by similar
provisions in the QCA Code and have thus been previously reported by the
Company in the corporate governance statement, the corporate governance report
and the QCA statement of compliance on our website. In order to avoid
unnecessary duplication, the relevant parts of those documents are identified
below and are to be treated as expressly incorporated by reference into this
strategic report. Under section 172 (1) of the Companies Act 2006, each
individual Director must act in the way he considers, in good faith, would be
the most likely to promote the success of the Company for the benefit of its
members as a whole, and in doing so have regard (amongst other matters) to six
matters detailed in the section. In discharging their duties, the Directors
seek to promote the success of Conygar for the benefit of members as a whole
and have regard to all the matters set out in Section 172(1), where applicable
and relevant to the business, taking account of its size and structure and the
nature and scale of its activities in the commercial property market. The
following paragraphs address each of the six matters in Section 172(1) (a) to
(f).
(a) The likely consequences of any decision in the long term: The commercial
property market is cyclical by nature. Investing in commercial property is a
long term business. The decisions taken must have regard to long term
consequences in terms of success or failure and managing risks and
uncertainties. The Directors cannot expect that every decision they take will
prove, with the benefit of hindsight, to be the best one - external factors
may affect the market and thus change conditions in the future, after a
decision has been taken. However, the Group's investment decisions are
undertaken by a Board with a wide range of experience, over many years, in
both the property and finance sectors.
(b) The interests of the Company's and Group's employees: The Company has five
full time employees, including the Chief Executive, two Property Directors and
the Finance Director. These Executive Directors sit on the Board with the
Non-Executive Directors. The Group also has a growing workforce to support its
operations at The Island Quarter, all of which are employed by a wholly-owned
group company. The commitment of the Board to its employees is set out in the
ESG section of the Annual Report.
(c) The need to foster the Company's business relationships with suppliers,
customers and others: The Directors have regularly reported in the Company's
annual reports on the constructive relationships that Conygar seeks to build
with its tenants and the mutual benefits that this brings to both parties; and
this reporting has been extended over the past two years following Principle 3
of the QCA Code to include suppliers and others. This is therefore addressed
under Principle 3 in the QCA compliance statement. In recent years, it has
been vital to foster our business relationships with tenants given external
factors, such as political and economic
uncertainty.
(d) The impact of the Company's operations on the community and the
environment: This is also addressed under Principle 3 of the QCA Code in the
QCA compliance statement. Due to its size and structure and the nature and
scale of its activities, the Board considers that the impact of Conygar's
operations as a landlord on the community and the environment is low. With the
exception of 1 The Island Quarter, Conygar's assets are used by its tenants
for their own operations rather than by Conygar itself. In the past year, the
Company has not been made aware of any tenant operations that have had a
significant impact on the community or the environment. In relation to 1 The
Island Quarter, as well as ongoing and future planned developments, Conygar
seeks to ensure that designs and construction comply with all relevant
environmental standards and with local planning requirements and building
regulations so as not to adversely affect the community or the environment.
Further details of which are set out in the ESG section of the Annual
Report.
(e) The desirability of the Company maintaining a reputation for high
standards of business conduct: This is addressed under Principle 8 of the QCA
Code in the corporate governance statement and in the QCA compliance
statement. The Board considers that maintaining Conygar's reputation for high
standards of business conduct is not just desirable - it is a valuable asset
in the competitive commercial property market.
(f) The need to act fairly as between members of the Company: The Company has
only one class of shares, thus all shareholders have equal rights and,
regardless of the size of their holding, every shareholder is, and always has
been, treated equally and fairly. Relations with shareholders are further
addressed under Principles 2, 3 and 10 of the QCA Code in the corporate
governance report and the QCA compliance statement. We have been reviewing how
we communicate with shareholders and are encouraging shareholders to adopt
electronic communications and proxy voting in place of paper documents where
this suits them, as well as to raise questions in writing if they are unable
to attend AGMs.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 September 2022
Note Year ended Year ended
30 Sep 22 30 Sep 21
£'000 £'000
Rental income 12/13 (404) 1,592
Other income 73 -
Proceeds on sale of development and trading properties 7,390 1,050
Revenue 7,059 2,642
Direct costs of rental income 395 288
Direct costs of other income 572 -
Costs on sale of development and trading properties 3,749 620
Development costs written 15 289 675
off
Direct costs 5,005 1,583
Gross profit 2,054 1,059
Surplus on revaluation of investment property 12 - 459
Surplus on revaluation of investment properties 13 320 28,718
under construction
Profit on sale of investment property 380 -
Administrative expenses (2,851) (2,058)
Operating (loss) / 3 (97) 28,178
profit
Finance 6 - (2)
costs
Finance 6 73 34
income
(Loss) / profit before taxation (24) 28,210
Taxation 8 (29) (1,685)
(Loss) / profit and total comprehensive (53) 26,525
(charge) / income for the year
Basic and diluted (loss) / profit per 10 (0.09p) 49.99p
share
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 year ended 30 September 2022
Attributable to the equity holders of the Company
Share Capital
premium
Share
account redemption Treasury Retained Total
capital reserve shares earnings equity
£'000 £'000 £'000 £'000 £'000 £'000
Changes in equity for the year ended 30 September 2021
2,680 - 3,873 - 82,280 88,833
At 1 October 2020
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 year ended 30 September 2022
At 1 October 2021 2,625 - 3,928 - 107,588 114,141
Loss for the year - - - - (53) (53)
Total comprehensive - - - - (53) (53)
charge for the year
Gross proceeds from 357 10,352 - - - 10,709
placing of own shares
Fees paid on placing - (193) - - - (193)
of own shares
Cancellation of share - (10,159) - - 10,159 -
premium account
At 30 September 2022 2,982 - 3,928 - 117,694 124,604
CONSOLIDATED BALANCE SHEET
at 30 September 2022
Note 30 Sep 2022 £'000 30 Sep 2021
£'000
Non-current assets
Plant, machinery and office equipment 11 991 -
Investment properties 12 - 17,750
Investment properties under construction 13 93,000 70,500
Right of use asset 7 - 53
Deferred tax asset 8 2,986 2,935
96,977 91,238
Current assets
Development and trading 15 17,137 20,192
properties
Inventories 16 32 -
Trade and other 17 770 2,661
receivables
Tax asset 28 28
Cash and cash equivalents 17,361 13,657
35,328 36,538
Total assets 132,305 127,776
Current liabilities
Trade and other 18 1,605 3,367
payables
Provision for liabilities and charges 19 - 5,614
Lease liability for right of use asset 7 - 34
1,605 9,015
Non-current liabilities
Deferred tax liability 8 4,700 4,620
Provision for liabilities and charge 19 1,396 -
6,096 4,620
Total liabilities 7,701 13,635
Net assets 124,604 114,141
Equity
Called up share 20 2,982 2,625
capital
Capital redemption reserve 3,928 3,928
Retained earnings 117,694 107,588
Total equity 124,604 114,141
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 September 2022
Year ended 30 Sep 22 £'000 Year ended
30 Sep 21
£'000
Cash flows from operating activities
Operating (loss) / profit (97) 28,178
Development costs written off 289 675
Surplus on revaluation of investment properties (320) (29,177)
Profit on sale of investment property (380) -
Profit on sale of development and trading properties (3,641) (430)
Depreciation of right of use assets 53 93
Cash flows from operations before changes in working capital (4,096) (661)
Increase in inventories (32) -
Decrease / (increase) in trade and other receivables 1,892 (1,006)
Additions to development and trading properties (1,115) (1,438)
Net proceeds from sale of development and trading properties 7,337 1,025
(Decrease) / increase in trade and other payables (94) 287
3,892 (1,793)
Cash flows generated from / (used in) operations
Tax received - 3
Net cash flows generated from / (used in) operations 3,892 (1,790)
Cash flows from investing activities
Additions to investment properties (28,085) (15,496)
Net proceeds from sale of an investment property 18,278 -
Additions to plant, machinery and office equipment (970) -
Finance income 73 34
Cash flows used in investing activities (10,704) (15,462)
Cash flows from financing activities
Net proceeds from placing of own shares 10,516 -
Purchase of own shares - (1,217)
Cash flows generated from / (used in) financing activities 10,516 (1,217)
Net increase / (decrease) in cash and cash equivalents 3,704 (18,469)
Cash and cash equivalents at 1 October 13,657 32,126
Cash and cash equivalents at 30 September 17,361 13,657
NOTES TO THE ACCOUNTS
for the year ended 30 September 2022
1. The financial information set out in this announcement is abridged and
does not constitute statutory accounts for the year ended 30 September 2022
but is derived from the financial statements. The auditors have reported on
the statutory accounts for the year ended 30 September 2022, their report was
unqualified and did not contain statements under sections 498(2) or (3) of the
Companies Act 2006, and these will be delivered to the registrar of companies
following the Company's Annual General Meeting. The financial information has
been prepared using the recognition and measurement principle of IFRS.
2. The comparative financial information for the year ended 30 September
2021 was derived from information extracted from the annual report and
accounts for that period, which was prepared under IFRS and which has been
filed with the UK registrar of companies. The auditors have reported on those
accounts, their report was unqualified and did not contain statements under
section 498 (2) or (3) of the Companies Act 2006.
3. Operating (LOSS) / PROFIT
Operating (loss) / profit is stated after charging: Year ended Year ended
30 Sep 22 30 Sep 21
£'000 £'000
Audit of the Company's consolidated and individual financial statements 47 47
Audit of subsidiaries, pursuant to legislation 56 24
Amortisation of right of use asset 53 93
4. PARTICULARS OF EMPLOYEES
The aggregate payroll costs were: Year ended Year ended
30 Sep 22 30 Sep 21
£'000 £'000
Wages and salaries 1,674 1,247
Social security costs 203 161
Other pension costs 8 -
1,885 1,408
The weighted average monthly number of persons, including Executive Directors,
employed by the Group during the year was twenty two (2021: seven). The
increase in the year is a result of the additional employees that have been
recruited to operate and manage the restaurant and events venue at 1 The
Island Quarter.
5. DIRECTORS' EMOLUMENTS
Year ended Year ended
30 Sep 22 30 Sep 21
£'000 £'000
Basic salary and total emoluments 1,035 929
Emoluments of the highest paid Director 400 400
The Board, being the key management personnel, comprises the only
persons having authority and responsibility for planning, directing and
controlling the activities of the Group.
6. FINANCE INCOME AND COST
Year ended Year ended
30 Sep 22 30 Sep 21
£'000 £'000
Bank interest receivable 73 34
Interest cost under IFRS 16
- 2
7. LEASES
Group as lessor:
The Group receives income from investment properties and existing
tenants located at several development sites. At 30 September 2022, the
minimum lease payments receivable under non-cancellable operating leases were
as follows:
30 Sep 22 30 Sep 21
£'000 £'000
Less than one year 134 1,385
Between one and five years 607 5,873
Over five years 1,320 6,249
2,061 13,507
The amounts above represent total rental income up to the next
tenant only break date for each lease.
Group as lessee:
The Group was party to a three-year lease which terminated on 28
April 2022. On 11 March 2022, the Group entered into a subsequent one-year
lease, for the same premises, which terminates on 28 April 2023. The rental
charge in connection with the new lease, for the period from 28 April 2022 to
30 September 2022, amounted to £40,617.
IFRS 16 requires lessees to record all leases on the balance
sheet as liabilities, along with an asset reflecting the right of use of the
asset over the lease term, so long as they are not for a low value or less
than 12 months whereby the lease could be recognised as an expense on a
straight line basis over the lease term.
The lease liability for three-year term was calculated as the
present value of the remaining lease payments, discounted at an incremental
borrowing rate of 2.7%. The right of use asset was measured at the amount
equal to the lease liability adjusted for rent prepaid on the date of
implementation. Depreciation of the right of use asset was on a straight line
basis over the lease term.
The modified retrospective approach was adopted for transition
purposes such that comparatives were not restated and the difference between
the right of use asset and lease liability at the start of the prior year was
recognised within the Group's opening retained earnings.
The current one-year lease is considered to be of low value and
as such will be recognised as an expense over the lease term on a straight
line basis.
Year ended Year ended
30 Sep 22
30 Sep 21
Right of use asset £'000 £'000
At the start of the year 53 146
Depreciation (53) (93)
At the end of the year - 53
Lease liability £'000 £'000
At the start of the year 34 123
Lease payments (34) (91)
Interest on lease liability - 2
At the end of the year - 34
Lease liability maturity 30 Sep 22 30 Sep 21
analysis
£'000
£'000
Gross lease payments due within one year - 34
Less future financing charges - -
At end of the year - 34
8. TAX
Year ended Year ended
30 Sep 22 30 Sep 21
£'000 £'000
Current tax charge - -
Deferred tax charge 29 1,685
Total tax charge 29 1,685
The tax assessed on the (loss) / profit for the year differs from the standard
rate of tax in the UK of 19% (2021: 19%). The differences are explained below:
Year ended Year ended
30 Sep 22 30 Sep 21
£'000 £'000
(Loss) / profit before tax (24) 28,210
(Loss) / profit before tax multiplied by the standard rate of UK tax (5) 5,360
Effects of:
Investment property revaluation not taxable (61) (5,543)
Capital loss not taxable (72) -
Utilisation of tax losses brought forward (96) -
Movement in tax losses carried forward 224 186
Expenses not deductible for tax purposes 15 10
Capital allowances utilised (5) (13)
Deferred tax charge 29 1,685
Total tax charge for the year 29 1,685
Deferred tax asset
Year ended Year ended
30 Sep 22 30 Sep 21
£'000 £'000
Deferred tax asset at the start of the year 2,935 -
Deferred tax credit for the year 51 2,935
Deferred tax asset at the end of the year 2,986 2,935
The Group has recognised a deferred tax asset for tax losses, held by group
undertakings, where the Directors believe it is probable that this asset will
be recovered.
As at 30 September 2022, the Group has further unused losses of £22.1 million
(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 properties Year ended Year ended
30 Sep 22 30 Sep 21
£'000 £'000
Deferred tax liability at the start of the year 4,620 -
Deferred tax charge for the year 80 4,620
Deferred tax liability at the end of the year 4,700 4,620
The Directors have assessed the potential deferred tax liability of the Group
as at 30 September 2022 in respect of chargeable gains that would be payable
if the investment properties were sold at their financial year end valuations.
Based on the unrealised chargeable gains of £18,798,000 (2021: £18,478,000)
a deferred tax liability of £4,700,000 (2021: £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 or substantively enacted by
the balance sheet date and which is expected to apply when the liability is
settled and the asset realised.
9. DIVIDENDS
No dividend will be paid in respect of the year ended 30
September 2022 (2021: nil).
10. (LOSS) / PROFIT PER SHARE
(Loss) / profit per share is calculated as the (loss) /
profit attributable to ordinary shareholders of the Company for the year of
£53,000 (2021: profit of £26,525,000) divided by the weighted average number
of shares in issue throughout the year of 58,015,099 (2021: 53,064,275). There
are no diluting amounts in either the current or prior years.
11. PLANT, MACHINERY AND OFFICE EQUIPMENT
30 Sep 22 30 Sep 21
£'000 £'000
At the start of the year - -
Additions 991 -
At the end of the year 991 -
During the year, the Group acquired plant, machinery and
office equipment that will be required to operate the restaurant, beverage and
events businesses at 1 The Island Quarter.
Depreciation is recognised so as to write off the cost of
these assets, over their estimated useful economic lives, using the straight
line method at 25% per annum. As the venue at 1 The Island Quarter was only
partly operational from 14 September 2022 no depreciation has been recognised
in the period to 30 September 2022.
12. INVESTMENT PROPERTIES
Freehold investment properties
30 Sep 22 30 Sep 21
£'000 £'000
At the start of the year 17,750 16,500
Additions 148 791
Disposals (17,898) -
Revaluation surplus - 459
At the end of the year - 17,750
The Group's retail park in Cross Hands, Carmarthenshire was sold in the year
for net proceeds of £18.3m realising a profit in the year of £0.4m.
As at 30 September 2021, Cross Hands was valued by Knight Frank LLP in their
capacity as external valuers. The 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 Cross Hands was determined using an income capitalisation
technique whereby contracted rent and market rental values were 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 Cross Hands, the key unobservable inputs were the net initial
yields and expiry void periods. Net initial yields were estimated for the
individual units at between 5.0% and 9.5% and expiry void periods were
projected at between 6 and 12 months. The principal sensitivity of measurement
to variations in the significant unobservable outputs was that decreases in
net initial yields and void periods would increase the fair value.
The historical cost of the Group's investment properties as at 30 September
2022 was £nil (2021: £14,242,000).
The Group's revenue for the year includes £433,000 derived from properties
leased out under operating leases (2021: £1,152,000). The Group's revenue
also includes the reversal of a £1,194,000 rent spreading debtor following
the sale of Cross Hands.
13. INVESTMENT PROPERTIES UNDER CONSTRUCTION
Freehold land and buildings
30 Sep 22 30 Sep 21
£'000 £'000
At the start of the year 70,500 19,761
Additions 23,591 16,407
Revaluation surplus 320 28,718
Movement in introductory fee provision (1,411) 5,614
At the end of the year 93,000 70,500
Investment properties under construction comprise the freehold land and
buildings at The Island Quarter in Nottingham which are held for current or
future development as investment properties and reported in the balance sheet
at fair value.
The valuations of the Group's investment properties are inherently subjective
as they are based on the valuers' assumptions which may not prove to be
accurate and which, as a result, are subject to material uncertainty. This is
particularly true for The Island Quarter given its scale, lack of comparable
evidence and the early stage position of this substantial development where
relatively small changes to the underlying assumptions of key parameters, such
as rental levels, net initial yields, construction costs, finance costs and
void periods can have a significant impact both positively and negatively on
the resulting valuation.
In preparing their valuation, Knight Frank have 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 have also been reviewed for overall reasonableness by the
Conygar Board. Inevitably in a complex model like this, and as noted above,
variations in assumptions can lead to widely differing values. The Board have
considered the valuation in the context of their experience and believe the
value of approximately £2.5 million per acre is justifiable.
The 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 assumes a willing buyer and a
willing seller in an arm's length transaction and reflects usual deductions in
respect of purchaser's costs and SDLT as applicable at the valuation date. The
independent valuer makes 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 has been classified in all periods 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,
construction financing costs and expiry void periods. Net initial yields have
been estimated for the individual units at between 4.35% and 7.0%. The
principal sensitivity of measurement to variations in the significant
unobservable outputs is that decreases in net initial yields, construction
costs, financing costs and void periods will increase the fair value whereas
reductions to rental income rates would decrease the fair value.
The historical cost of the Group's investment properties under construction as
at 30 September 2022 was £62,566,000 (2021: £36,168,000). The Group's
revenue for the year includes £271,000 derived from properties leased out
under operating leases (2021: £80,000).
14. INVESTMENT IN SUBSIDIARY UNDERTAKINGS
Listed below are the wholly-owned subsidiary undertakings of
the Group at 30 September 2022.
Country of % of
Company name Principal activity Registration equity held
Conygar Holdings Ltd** Holding company England 100%
Conygar Haverfordwest Ltd** Property trading and development England 100%*
Conygar Holyhead Ltd** Property trading and development England 100%*
Conygar Nottingham Ltd** Property investment England 100%*
Nohu Limited** Property investment England 100%*
Parc Cybi Management Management company England 100%
Company Limited**
Conygar Developments Ltd** Dormant England 100%*
Conygar Wales PLC** Dormant England 100%*
The Island Quarter Student Property investment England 100%*
Property Company Ltd**
The Island Quarter Student Dormant England 100%*
Operating Company Ltd**
The Island Quarter Canal Turn Restaurant and events operations England 100%*
Operating Company Ltd**
The Island Quarter Dormant England 100%*
Management Company Ltd**
The Island Quarter Careers Ltd** Recruitment and HR England 100%*
The Island Quarter Propco 2 Ltd** Dormant England 100%*
The Island Quarter Propco 3 Ltd** Dormant England 100%*
The Island Quarter Propco 4 Ltd** Dormant England 100%*
Conygar ZDP PLC** Dormant England 100%
Lamont Property Holdings Ltd*** Holding company Jersey 100%*
Conygar Ashby Ltd*** Property investment Jersey 100%*
Conygar Cross Hands Ltd*** Property investment Jersey 100%*
* Indirectly owned.
** Subsidiaries with the same registered office as the
Company.
*** Subsidiaries incorporated in Jersey with a registered office at 3(rd)
Floor, 44 Esplanade, St Helier, Jersey JE4 9WG.
15. DEVELOPMENT AND TRADING PROPERTIES
30 Sep 22 30 Sep 21
£'000 £'000
At the start of the year 20,192 19,952
Additions 924 1,510
Disposals (3,690) (595)
Development costs written off * (289) (675)
At the end of the year 17,137 20,192
* The costs incurred in connection with the planning and design for our scheme
at Holyhead Waterfront
have been written off in the year to retain the carrying value as at 30
September 2022 at £5.0 million.
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.
16. INVENTORIES
30 Sep 22 30 Sep 21
£'000 £'000
Food and drink 32 -
Inventories recognised as an expense in the year totalled £82,041 (2021:
£nil).
17. TRADE AND OTHER RECEIVABLES
30 Sep 22 30 Sep 21
£'000 £'000
Trade receivables 70 127
Other receivables 423 1,229
Prepayments and accrued income 277 1,305
770 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.
18. TRADE AND OTHER PAYABLES
30 Sep 22 30 Sep 21
£'000 £'000
Social security and payroll taxes 56 55
Trade payables 938 2,300
Accruals and deferred income 611 1,012
1,605 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.
19. PROVISION FOR LIABILITIES AND CHARGES
30 Sep 22 30 Sep 21
£'000 £'000
At the start of the year 5,614 -
Paid in the year (2,807) -
Movement in provision in the year (1,411) 5,614
At the end of the year 1,396 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 30
September 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.
20. SHARE CAPITAL
Authorised share capital: 30 Sep 22 30 Sep 21
£ £
140,000,000 (2021: 140,000,000) Ordinary shares of 5p each 7,000,000 7,000,000
Allotted and called up:
No £'000
As at 30 September 2020 53,591,590 2,680
Cancellation of treasury shares (1,092,000) (55)
As at 30 September 2021 52,499,590 2,625
Placing of own shares 7,138,998 357
As at 30 September 2022 59,638,588 2,982
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 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 was duly confirmed by the Court on 10
May 2022 and completed on 12 May 2022.
In December 2010, the Group began a share buyback programme and during the
year ended 30 September 2022 purchased nil (2021: 1,092,000) shares on the
open market at a cost of £nil (2021: £1,217,000). On 16 September 2021,
1,092,000 ordinary shares of 5p each were transferred out of treasury and
cancelled.
21. CAPITAL COMMITMENTS
As at 30 September 2022, the Group had contracted capital commitments, not
provided for in the financial statements, of £32,060,000 (2021: £12,800,000)
relating to the construction, development or enhancement of the Group's
investment and trading properties. £31,171,000 of which is projected to be
incurred over the next financial year and relates to a letter of intent
provided by a group undertaking to the contractor of the student accommodation
development to enable the continued progression of this development whilst
debt financing arrangements are put into place. The Group's commitments in
this regard are expected to be ultimately financed partly out of the Group's
own cash deposits and partly from debt, for which we expect to provide a
further update in the coming weeks.
22. FINANCIAL INSTRUMENTS
The following tables set out the Group's financial assets and
liabilities, all of which are due within one year. The tables have been drawn
up based on the undiscounted cash flows of financial liabilities, based on the
earliest date on which the Group can be required to pay.
Financial assets:
30 Sep 22 30 Sep 21
£'000 £'000
Cash and cash equivalents 17,361 13,657
Trade receivables and accrued income 92 127
Other receivables (excluding VAT) 199 253
17,652 14,037
Financial liabilities:
30 Sep 22 30 Sep 21
£'000 £'000
Trade payables and other accrued expenses 1,566 3,175
23. EVENTS AFTER THE BALANCE SHEET DATE
There are no significant events since the balance sheet date that require
disclosure in the financial statements.
The report and accounts for the year ended 30 September 2022 will shortly be
available via the Company's website www.conygar.com (http://www.conygar.com)
or, as required, posted to shareholders and copies may be obtained free of
charge for at least one month following their posting by writing to the
Company Secretary, The Conygar Investment Company PLC, 1 Duchess Street,
London W1W 6AN.
The Company's Annual General Meeting (the "AGM") will be held at 10:00am on
Monday, 19 December 2022 at the offices of The Conygar Investment Company PLC,
First Floor, Suite 3, 1 Duchess Street, London W1W 6AN.
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.
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