REG-Lon.&Assoc.Props PLC: Annual Results <Origin Href="QuoteRef">LAS.L</Origin> - Part 5
29/04/2016 08:05
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191 201
Staff costs are included in overheads.
3. Listed investments held for trading
2015 2014
£'000 £'000
Dealing loss (6) -
Dividends receivable 9 3
Net profit from listed investments 3 3
4. Directors' emoluments
2015 2014
£'000 £'000
Emoluments 1,199 1,367
Defined contribution pension scheme contributions 73 69
1,272 1,436
Details of directors' emoluments and share options are set out in the
remuneration report.
5. Finance income and expenses
2015 2014
£'000 £'000
Finance income 123 115
Finance expenses
Interest on bank loans and overdrafts (2,258) (2,366)
Unwinding of discount (Bisichi) (79) (87)
Other loans (1,359) (1,508)
Interest on derivatives (295) (655)
Interest on obligations under finance leases (230) (259)
Total finance expenses (4,221) (4,875)
(4,098) (4,760)
6. Income tax
2015 2014
£'000 £'000
Current tax
Corporation tax on profit of the period 10 17
Corporation tax on profit of previous periods (20) 29
Total current tax (10) 46
Deferred tax
Origination of timing differences 864 (1,554)
Revaluation of investment properties (1,035) 192
Accelerated capital allowances (97) 299
Fair value of interest derivatives 22 4,702
Adjustment in respect of prior years 209 17
Total deferred tax (notes 24 and 25) (37) 3,656
Tax on profit on ordinary activities (47) 3,702
Factors affecting tax charge for the year
The corporation tax assessed for the year is different from that at the
effective rate of corporation tax in the United Kingdom of 20.25 per cent
(2014: 21.5 per cent). The differences are explained below:
2015 2014
£'000 £'000
Loss for the year before taxation (2,093) (2,693)
Taxation at 20.25 per cent (2014: 21.5 per cent) (424) (579)
Effects of:
Other differences (701) 4,051
Joint ventures 94 (14)
Adjustment in respect of prior years 189 46
Deferred tax rate adjustment 795 198
Income tax (credit)/charge for the year (47) 3,702
The main component of other differences in the reconciliation relates to
capital gains of £1.1 million (2014: (£0.1 million)), indexation allowances of
(£0.1 million) (2014: (£0.5 million)), fair value of interest derivatives of £
Nil (2014: (£4.7 million)) and others (£0.3 million) (2014: £Nil).
Factors that may affect future tax charges:
Based on current capital expenditure plans, the Group expects to continue to be
able to claim capital allowances in excess of depreciation in future years, but
at a slightly lower level than in the current year.
A deferred tax provision has been made for gains on revaluing investment
properties. At present it is not envisaged that any tax will become payable in
the foreseeable future.
7. Discontinued operations
A. Disposals
As part of the Group's strategy to focus on core assets, the Group disposed of
King Edward Court, Windsor in 2013. The profits and losses arising from this
disposal were classified as discontinued operations. Contracts for the sale of
King Edward Court had been exchanged in 2013 and completion took place in
January 2014. Following the settlement of a dispute additional proceeds are
payable to the Group as below.
B. Result for the year of discontinued operations
2015 2014
£'000 £'000
Gross property income - 464
Direct property costs - (144)
Net property income - 320
Overheads 8 (70)
Net revenue from property 8 250
Profit on sale of investment properties 424 -
432 250
Finance expenses 87 (164)
Profit before tax attributable to shareholders 519 86
C. Cash flows from discontinued operations
2015 2014
£'000 £'000
Cash flows from 432 250
operating activities
Cash flows from - 102,670
investing activities
Cash flows from 87 (85,766)
financing activities
Net cash inflow from 519 17,154
discontinued
operations
8. Dividend
2015 £ 2014 £
Per '000 Per '000
share share
Dividends paid during the year relating to the 0.156p 133 0.125p 106
prior period
Dividends to be paid:
Proposed final dividend for 0.16p 136 0.156p 133
9. (Loss)/profit per share and net assets per share
(Loss)/ profit per share has been calculated as follows:
2015 2014
Loss for the year for the purposes of basic and diluted (1,899) (7,140)
profit per share (£'000)
Weighted average number of ordinary shares in issue for the 84,951 84,500
purpose of basic profit per share ('000)
Basic loss per share (2.24)p (8.45)p
Weighted average number of ordinary shares in issue for the 84,951 84,500
purpose of diluted profit per share ('000)
Fully diluted loss per share (2.24)p (8.45)p
Weighted average number of shares in issue is calculated after excluding
treasury shares of 734,816 (2014: 1,032,991).
The loss for continuing operations was £2,418,000 (2014: £7,226,000) and the
profit for discontinued operations was £519,000 (2014: £86,000).
Net assets per share have been calculated as follows:
2015 2014
Net assets (£'000) 40,078 42,547
Shares in issue ('000) 84,808 84,510
Basic net assets per share 47.26p 50.35p
Net assets diluted (£'000) 40,078 42,547
Shares in issue ('000) 84,808 84,510
Diluted net assets per share 47.26p 50.35p
10. Investment properties
Total Freehold Leasehold Leasehold
£000 £000 over 50 under 50
years years
£000 £000
Cost or valuation at 1 January 108,443 85,080 21,591 1,772
2015
Acquisition of property 960 960 - -
Additions in year 357 210 147 -
Disposals (400) (400) - -
Decrease in present value of head (3) - - (3)
leases
Increase/ (decrease) on (185) 618 (678) (125)
revaluation
At 31 December 2015 109,172 86,468 21,060 1,644
Representing assets stated at:
Valuation 104,388 86,468 16,920 1,000
Present value of head leases 4,784 - 4,140 644
109,172 86,468 21,060 1,644
At 31 December 2015 109,172 86,468 21,060 1,644
At 31 December 2014 108,443 85,080 21,591 1,772
Total Freehold Leasehold Leasehold
£'000 £'000 over under
50 years 50 years
£'000 £'000
Cost or valuation at 1 January 106,911 82,644 23,986 281
2014
Reclassification - - (1,493) 1,493
Additions 684 684 - -
Decrease in present value of head (4) - (2) (2)
leases
Increase/(decrease) on 852 1,752 (900) -
revaluation
Cost or valuation at 31 December 108,443 85,080 21,591 1,772
2014
Representing assets stated at:
Valuation 103,655 85,080 17,450 1,125
Present value of head leases 4,788 - 4,141 647
108,443 85,080 21,591 1,772
At 1 January 2014 106,911 82,644 23,986 281
At 31 December 2014 108,443 85,080 21,591 1,772
The leasehold and freehold properties, excluding the present value of head
leases and directors' valuations, were valued as at 31 December 2015 by
external professional firms of chartered surveyors. The valuations were made at
fair value. The directors' property valuations were made at fair value.
2015 2014
£'000 £'000
Allsop LLP 87,095 87,145
Carter Towler 12,800 11,575
Directors' valuations 4,493 4,935
104,388 103,655
Add: present value of headleases 4,784 4,788
109,172 108,443
The historical cost of investment properties, including total capitalised
interest of £1,161,000 (2014: £1,161,000) was as follows:
2015 2014
Leasehold Leasehold Leasehold Leasehold
Over 50 under 50 Over 50 under 50
Freehold years years Freehold years years
£000 £000 £000 £000 £000 £000
Cost at 1 71,601 17,506 1,939 70,917 18,660 785
January
Reclassification - - - - (1,154) 1,154
Acquisition of 960 - - - - -
property
Additions 210 147 - 684 - -
Disposals (220) - - - - -
Cost at 31 72,551 17,653 1,939 71,601 17,506 1,939
December
Each year external valuers are appointed by the Executive Directors on behalf
of the Board. The valuers are selected based upon their knowledge, independence
and reputation for valuing assets such as those held by the Group.
Valuations are performed annually and are performed consistently across all
properties in the Group's portfolio. At each reporting date appropriately
qualified employees of the Group verify all significant inputs and review the
computational outputs. Valuers submit their report to the Board on the outcome
of each valuation.
Valuations take into account tenure, lease terms and structural condition. The
inputs underlying the valuations include market rent or business profitability,
likely incentives offered to tenants, forecast growth rates, yields, EBITDA,
discount rates, construction costs including any specific site costs (for
example section 106), professional fees, developer's profit including
contingencies, planning and construction timelines, lease regear costs,
planning risk and sales prices based on known market transactions for similar
properties to those being valued.
Valuations are based on what is determined to be the highest and best use. When
considering the highest and best use the valuer will consider, on a property by
property basis, its actual and potential uses which are physically, legally and
financially viable. Where the highest and best use differs from the existing
use, the valuer will consider the cost and likelihood of achieving and
implementing this change in arriving at its valuation.
There are often restrictions on Freehold and Leasehold property which could
have a material impact on the realisation of these assets. The most significant
of these occur when planning permission or lease extension and renegotiation of
use are required or when a credit facility is in place. These restrictions are
factored in the property's valuation by the external valuer.
The methods of fair value measurement are classified into a hierarchy based on
the reliability of the information used to determine the valuation, as follows:
Level 1: valuation based on inputs on quoted market prices in active markets.
Level 2: valuation based on inputs other than quoted prices included within
level 1 that maximise the use of observable data directly or from market prices
or indirectly derived from market prices.
Level 3: where one or more inputs to valuations are not based on observable
market data.
Class of property Carrying / Valuation Key Range
Level 3 Fair value technique unobservable (weighted
2015 inputs average)
£'000 2015
Freehold - external 81,975 Income Estimated £5 - £37
valuation capitalisation Rental Value (£18)
Per sq ft 5% - 15%
p.a (8%)
Equivalent
Yield
Leasehold over 50 years - 16,920 Income Estimated £5 - £11
external valuation capitalisation Rental Value (£10)
Per sq ft 7% -18%
p.a (11%)
Equivalent
Yield
Leasehold under 50 years - 1,000 Income Estimated £4 - £5
external valuation capitalisation Rental Value (£4)
Per sq ft 23% - 26%
p.a (25%)
Equivalent
Yield
Freehold - Directors' 4,493 Income Estimated £5 - £24
valuation capitalisation Rental Value (£16)
Per sq ft 6% - 6%
p.a (6%)
Equivalent
Yield
At 31 December 2015 104,388
There are interrelationships between all these inputs as they are determined by
market conditions. The existence of an increase in more than one input would be
to magnify the input on the valuation. The impact on the valuation will be
mitigated by the interrelationship of two inputs in opposite directions, for
example, an increase in rent may be offset by an increase in yield.
10. Investment properties continued
The table below illustrates the impact of changes in key unobservable inputs on
the carrying / fair value of the Group's properties.
Estimated Equivalent
rental yield
value 25 basis
10% point
increase contraction
or or
(decrease) (expansion)
£'000 £'000
Freehold - external valuation 8,064/ 3,288/
(8,064) (3,027)
Leasehold over 50 years - external valuation 1,692/ 440/(418)
(1,692)
Leasehold under 50 years - external valuation 100/(100) 10/(10)
Freehold - Directors' valuation 443/(443) 183/(169)
11. Mining reserves, plant and equipment
Office
Equipment
Mining Mining and motor
Total reserves equipment vehicles
£'000 £'000 £'000 £'000
Cost at 1 January 2015 19,536 1,266 17,539 731
Exchange adjustment (4,361) (271) (4,048) (42)
Additions 2,022 - 1,964 58
Disposals (9) - (2) (7)
At 31 December 2015 17,188 995 15,453 740
Accumulated depreciation at 1 13,279 1,149 11,705 425
January 2015
Exchange adjustment (2,963) (256) (2,679) (28)
Charge for the year 1,329 56 1,177 96
Disposals in year (9) - (2) (7)
Accumulated depreciation at 31 11,636 949 10,201 486
December 2015
Net book value at 31 December 5,552 46 5,252 254
2015
Cost at 1 January 2014 18,985 1,310 16,328 1,347
Exchange adjustment (600) (44) (550) (6)
Additions 1,917 - 1,838 79
Disposals (766) - (77) (689)
Cost at 31 December 2014 19,536 1,266 17,539 731
Accumulated depreciation at 1 11,667 1,184 9,470 1,013
January 2014
Exchange adjustment (369) (38) (329) (2)
Charge for the year 2,732 3 2,641 88
Disposals (751) - (77) (674)
Accumulated depreciation at 31 13,279 1,149 11,705 425
December 2014
Net book value at 31 December 6,257 117 5,834 306
2014
12. Investment in joint ventures
Shares in joint ventures:
2015 2014
£'000 £'000
At 1 January 3,434 2,310
Share of (loss)/profit after tax (Langney) 71 1,124
Dividends received (Langney) (210) -
Loss on reclassification of asset held for sale (276) -
(Langney)
Exchange adjustment (359) -
Transfer to assets held for sale (Langney) (note 14) (2,335) -
At 31 December 325 3,434
Results of joint ventures:
Langney Ezimbokodweni 2015 2014
25% 49% £'000 £'000
£'000 £'000
Turnover 344 - 344 1,048
(Loss)/profit before tax (204) - (204) 4,496
(Loss)/profit after taxation (204) - (204) 4,496
Balance sheet
Non-current assets 4,572 895 5,467 21,808
Current assets 204 2 206 3,086
Current liabilities (92) (897) (989) (3,502)
Non-current liabilities (2,349) - (2,349) (10,392)
Share of net assets at 31 2,335 - 2,335 11,000
December
Reconciliation to amounts included in the financial statements:
Group share of: Ezimbokodweni 2015 2014
49.00% £'000 £'000
£'000
Net assets at 1 January - - 1,626
Profit/(loss) before and after taxation - - 1,124
Share of net assets at 31 December - - 2,750
Investment not represented by net assets 325 325 684
Shares in joint venture 325 325 3,434
Ezimbokodweni Mining (Pty) Limited (Ezimbokodweni) - unlisted coal production
company. The Group owns, via Bisichi Mining PLC, 49% of the issued share
capital. The company is incorporated in South Africa. It has issued share
capital of 100 (2014: 100) ordinary shares of ZAR1 each.
Langney Shopping Centre Unit Trust (Langney) - Prior to 11 March 2016, the
Group owned 25% of the units of Langney Shopping Centre Unit Trust, an unlisted
property unit trust incorporated in Jersey. 25% of the units in the trust were
held by London & Associated Properties PLC and 75% were held by Columbus UK GP
limited, a partner acting on behalf of Columbus UK Real Estate Fund. On the 11
March 2016, the Group disposed of its investment in Langney Shopping Centre
Unit Trust. The net proceeds from the sale were £2,335,000 which includes £60k
dividends repaid post year end. At 31 December 2015, the investment was
transferred from investment in joint ventures to assets held for sale in the
balance sheet. At year end, the share of the net assets of the trust held by
the Group were £2,335,000 (2014: £2,750,000) which includes a loss on the
reclassification of the asset to held for sale in the amount of £276,000.
13. Loan to joint venture
2015 2014
£'000 £'000
Loan to Ezimbokodweni Mining (Pty) Limited
At 1 January 1,040 984
Exchange adjustment (235) (36)
Additions 95 92
At 31 December 900 1,040
14. ASSETS HELD FOR SALE
2015 2014
£'000 £'000
Investment in Langney Shopping Centre Unit Trust
At 1 January - -
Transfer from investment in joint venture (note 12) 2,335 -
At 31 December 2,335 -
On the 11 March 2016, the Group disposed of its investment in Langney Shopping
Centre Unit Trust, an unlisted property unit trust incorporated in Jersey. At
year end, the company owned 25% of the units of the trust. The net proceeds
from the sale were £2,335,000 (including dividend). At year end, the Group's
share of the net assets of the trust was £2,335,000 (2014: £2,750,000).
15. Subsidiary companies
In accordance with Section 409 of the Companies Act 2006 a full list of
subsidiaries, the principal activity, the country of incorporation and the
percentage of equity owned, as at 31 December 2015 is disclosed below:
ENTITY ACTIVITY PERCENTAGE COUNTRY OF
OF SHARE INCORPORATION
CAPITAL
Analytical Investments Limited Dormant 100% England and
Wales
Analytical Portfolios Limited Dormant 100% England and
Wales
Analytical Properties Holdings Property 100% England and
Limited Wales
Analytical Properties Limited Property 100% England and
Wales
Analytical Ventures Limited Property 100% England and
Wales
Analytical Ventures (Halifax) Property 100% England and
Limited Wales
24 Bruton Place Limited Dormant 100% England and
Wales
24 BPL (Harrogate) Limited Investment 88% England and
Wales
24 BPL (Harrogate ) Two Limited Investment 100% England and
Wales
Brixton Village Limited Property 100% England and
Wales
Market Row Limited Property 100% England and
Wales
Newincco 1243 Limited Property 100% England and
Wales
Newincco 1244 Limited Property 100% England and
Wales
Newincco 1245 Limited Property 100% England and
Management Wales
Services
Newincco 1299 Limited Property 100% England and
Wales
Newincco 1300 Limited Property 100% England and
Wales
LAP Ocean Holdings Limited Property 100% England and
Wales
London & Associated Limited Dormant 100% England and
Wales
London & Associated (Rugeley) Dormant 100% England and
Limited Wales
London & Associated Securities Dormant 100% England and
Limited Wales
London & Associated Management Property 100% England and
Services Limited Management Wales
Services
London & African Investments Dormant 100% England and
Limited Wales
Orchard Chambers Residential Dormant 100% England and
Limited Wales
Bisichi Mining PLC (note D) Coal mining 41.52% England and
Wales
Mineral Products Limited (note A) Share dealing 100% England and
Wales
Bisichi (Properties) Limited (note Property 100% England and
A) Wales
Bisichi Mining (Exploration) Holding company 100% England and
Limited (note A) Wales
Black Wattle Colliery (Pty) Limited Coal mining 62.5% South Africa
(note A)
Bisichi Coal Mining (Pty) Limited Coal mining 100% South Africa
(note A)
Urban First (Northampton) Limited Dormant 100% England and
(note A) Wales
Bisichi Trustee Limited (note A) Property 100% England and
Wales
Bisichi Mining Management Services Dormant 100% England and
Limited (note A) Wales
Ninghi Marketing Limited (note A) Dormant 90.1% England and
Wales
Bisichi Northampton Limited (note Property 100% England and
A) Wales
Amandla Ehtu Mineral Resource Dormant 70% South Africa
Development (Pty) Limited (note A)
Ezimbokodweni Mining (Pty) Limtied Dormant 49% South Africa
(note A)
Black Wattle Klipfontein (Pty) Coal mining 62.5% South Africa
Limited (note A)
Dragon Retail Properties Limited Property 50% England and
(note B)(note D) Wales
Newincco 1338 Limited (note C) Property 100% England and
Wales
Details on the non-controlling interest in subsidiaries are shown under note
27.
Note A: these companies are owned by Bisichi and the equity shareholdings
disclosed relate to that company.
Note B: this entity is a joint venture owned 50% by LAP and 50% by Bisichi.
Note C: this company is owned by Dragon and the equity shareholdings disclosed
relate to that company.
Note D: these entities are included in the consolidated financial statements
from 2014 as a result of the adoption of IFRS 10.
16. Inventories
2015 2014
£'000 £'000
Coal
Washed 778 606
Run of mine 110 1,070
Work in progress 122 45
Other 39 39
1,049 1,760
17. Held to maturity investments and other investments
Held to maturity investments:
2015 Unlisted Loan 2014 Unlisted Loan
Total shares stock Total shares stock
£000 £000 £000 £000 £000 £000
At 1 January 2,196 1 2,195 2,200 2,200
Reclassification - - - 300 (2,199) 2,499
Repayments (201) - (201) (304) - (304)
At 31 December 1,995 1 1,994 2,196 1 2,195
The Group owns a 6.95% interest in the equity and loans of HRGT Shopping
Centres LP (HRGT), a limited partnership set up in England to acquire and own 3
shopping centres in Dunfermline, Kings Lynn and Loughborough. 92.10% of the
equity and loans are owned by Oaktree Capital Management and 0.95% by Gooch
Cunliffe Whale LLP. London & Associated Management Services Limited has a
management contract to manage the properties on behalf of HRGT.
Other investments:
2015 2014
£'000 £'000
Net book and market value of investments 14 26
listed on overseas stock exchange
Net book value of unquoted investments - 126
14 152
18. Trade and other receivables
2015 2014
£'000 £'000
Trade receivables 4,129 4,790
Amounts due from joint ventures - 338
Other receivables 1,385 669
Prepayments and accrued income 988 977
6,502 6,774
The directors consider that the carrying amount of trade and other receivables
approximates to their fair value.
19. Investments available for sale and held for trading
2015 2014
£'000 £'000
Market bid value of the listed investment portfolio - available 594 796
for sale
Market bid value of the listed investment portfolio - held for 20 122
trading
Unrealised (loss)/gain of market value over cost (146) 54
Listed investment portfolio at cost 760 763
Investments are listed on the London Stock Exchange with the exception of £
26,000 (2014: £38,000) listed outside Great Britain.
20 Trade and other payables
2015 2014
£'000 £'000
Trade payables 2,289 1,905
Amounts owed to joint venture - 7
Other taxation and social security costs 661 896
Other payables 2,687 3,229
Accruals and deferred income 4,860 5,286
10,497 11,323
The directors consider that the carrying amount of trade and other payables
approximates to their fair value.
21. Borrowings
2015 2015 2014 2014
£'000 £'000 £'000 £'000
Current Non-current Current Non-current
Other loans 33 - 20 -
(Bisichi)
£1.25 million term - 1,196 - -
bank loan (secured)
repayable for 2020
(Dragon)*
£3.75 million first - 3,750 1,250
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