Panther Securities - Interim Report - Part 2
25/09/2014 07:00
- Part 2: For the preceding part double click ID:nRSY5316Sa
1,547 1,518 2,034
On 31 July 2014 the final dividend for the year ended 31 December 2014 of 9p
per share, (approved by shareholders on 18 June 2014), was paid to
shareholders on the register at the close of business on 20 June 2014 (Ex
dividend on 18 June 2014). This dividend had a scrip alternative (see note
11). Pursuant to the scrip dividend 301,008 new ordinary shares were issued.
The Directors have proposed an interim dividend of 3p per share to be paid on
27 November 2014 to shareholders on the register at 14 November 2014
(ex-dividend 13 November 2014) for the year ending 31 December 2014.
5. Earnings/ (loss) per ordinary share (basic and diluted)
The calculation of basic and diluted earnings per ordinary share is based on
earnings, after excluding non-controlling interests on continuing and
discounting operations. Being a profit from continuing operations of
£2,990,000 (30 June 2013 - £4,017,000 and 31 December 2013 -£7,159,000),
profit from discontinuing operations of £75,000 (30 June 2013 - loss of
£121,000 and 31 December 2013 - loss of £65,000).
The basic earnings per share is based on 17,186,287 (30 June 2013 and 31
December 2013 - 17,186,287) ordinary shares. The diluted earnings assume that
the 301,008 ordinary shares to be issued were in existence at 30 June 2014,
making a total of 17,487,295 ordinary shares at this time.
Both calculations use the weighted average number of ordinary shares in issue
throughout the six months ended 30 June 2014, with the diluted calculation
assuming that the additional shares are in existence when the obligation
arises. The Company had the obligation for 12 days during the accounting
period as they were issued on 18 June 2014.
6. Investment Properties
30 June 30 June 31 December
2014 2013 2013
£'000 £'000 £'000
Unaudited Unaudited Audited
Fair value of investment properties
At 1 January 158,184 153,156 153,156
Additions 1,965 3,750 5,326
Fair value adjustment on property held on operating leases - - (2)
Properties transferred to Stock properties - (253) (253)
Properties transferred from Stock properties - - 1,005
Disposals - (1,650) (1,790)
Revaluation increase 2,992 - 742
163,141 155,003 158,184
7. Related party transactions
Wimbledon Studios Ltd, an independent film studios business, is an associate
undertaking of Panther Securities PLC as the Group owns 25% of its share
capital.
In accordance with IAS 28 (revised 2008) Investment in Associates, where the
Group's share of losses in the associate exceeds its equity investment, the
carrying value of that equity investment is reduced to £nil and the remaining
loss is taken against any further long term interest that in substance forms
part of the investors net investment in the associate.
Accordingly, the Group's share of net liabilities as at 30 June 2014 of
£548,000 has been allocated against the carrying value of the £622,000
overdraft provided by the Group to the associate as noted below. The balance
of the overdraft has also been provided against in the usual way.
Group transactions with associate:
30 June 30 June 31 December
2014 2013 2013
£'000 £'000 £'000
Unaudited Unaudited Audited
Rent receivable from associate recognised in year 245 223 501
Trade receivables and accrued income 1,642 1,038 1,330
Trade receivables and accrued income - overdue 1,520 999 1,208
Provision (1,418) (916) (1,208)
Other receivables - overdraft facility drawn 622 547 622
Provision on overdraft (622) (395) (404)
Included in Group trade and other receivables is a loan to one independent
director of Wimbledon Studios Limited of £62,500 (2013: £62,500), in order
that he could purchase his shareholdings in that company. The loan is
unsecured for a maximum term of 3 years and attracts interest of 4% per annum.
Fair value of this loan is assessed to be the same as its carrying value.
Transactions between the Company and its subsidiaries, which are related
parties of the Company, have been eliminated on consolidation and are not
disclosed in this note. There were no other material related party
transactions in the period under review or within the comparative periods.
The Directors of Wimbledon Studios Ltd placed the company into administration
on 5 August 2014. It is very unlikely that the Group will receive any
creditor distributions resulting from the administration and have provided a
guarantee up to £150,000 towards the cost of administration, and also
purchased plant and equipment owned directly by Wimbledon Studios Limited for
£75,000.
8. Discontinuing operations
M.R.G. Systems Limited, an information display system developers business, is
a subsidiary of Panther Securities PLC as the Group owns 75% of its share
capital. M.R.G. Systems Limited was an operating segment whose principal
activity is that of electronic designers, engineers and consultants. 71% of
its revenues arose in the United Kingdom and 100% of its cost of sales.
The Group is currently marketing M.R.G. Systems Limited and as such its
results have been separated out and it has been shown as discontinuing
operations. The Group instructed business brokers before the period end.
The financial information of MRG Systems Limited for the period ended 30 June
2014 is set out below:
30 June 30 June 31 December
2014 2013 2013
£'000 £'000 £'000
Unaudited Unaudited Audited
Profit and loss account
Revenue and other income 1,380 908 1,827
Cost of sales (685) (487) (834)
Administrative expenses (592) (582) (1,076)
Finance costs (3) - (3)
Profit/ (loss) for the period 100 (161) (86)
Balance sheet
Non-current assets 71 46 137
Current assets 629 471 399
700 517 536
Non-current liabilities (67) - (86)
Current liabilities (373) (433) (290)
Net assets 260 84 160
Within M.R.G. Systems Limited's creditors, there are two intercompany loans
with Panther Securities PLC, one considered long-term of £67,000 which accrues
interest at 8% per annum, and the other considered short term (non-interest
bearing) totalling £90,000 at the period end. These loans are removed on
consolidation and are currently unsecured. Fair value of these loans are
assessed to be the same as its carrying value.
The Group does not currently charge M.R.G. Systems Limited a rental for the
freehold property owned by the Group, however M.R.G. Systems Limited do pay
the rates for the entire building even though they occupy only part.
9. Financing
In March 2014, the Group drew down £1,197,000 from its existing loan
facilities. Of its agreed facilities it still had available for drawdown a
further £2,503,000 at the period end.
At the balance sheet date £3,000,000 was due as loan amortisation in July 2014
and a further £3,000,000 in July 2015. Post 30 June 2014 the Group agreed a
reduction in the amortisation to £1,000,000 in July 2014 and July 2015, in
return for a £20,000 fee and tightening of certain financial loan covenant
criteria, as well as higher interest rate on the additional amount not repaid
as amortisation.
Note 26 of the statutory accounts for the year ended 31 December 2013 detailed
the financial instruments entered into by the Group. The same financial
instruments held at 31 December 2013 are still held at 30 June 2014.
10. Derivative financial instruments
The main risks arising from the Group's financial instruments are those
related to interest rate movements. Whilst there are no formal procedures for
managing exposure to interest rate fluctuations, the Board continually reviews
the situation and makes decisions accordingly. Hence, the Company will, as far
as possible, enter into fixed interest rate swap arrangements. The purpose of
such transactions is to manage the interest rate risks arising from the
Group's operations and its sources of finance.
30 June 30 June 31 December
2014 2013 2013
£'000 £'000 £'000
Bank loans Unaudited Rate Unaudited Rate Audited Rate
Interest is charged as to:
Fixed/ Hedged
HSBC Bank plc* 35,000 7.06% 35,000 7.06% 35,000 7.06%
HSBC Bank plc** 25,000 6.63% 25,000 6.63% 25,000 6.63%
Unamortised loan arrangement fees (308) (558) (433)
Floating element
HSBC Bank plc 12,497 11,300 11,300
Natwest Bank plc 959 1,107 1,033
73,148 71,849 71,900
Bank loans totalling £60,000,000 (2013 - £60,000,000) are fixed using interest
rate swaps removing the Group's exposure to interest rate risk. Other
borrowings are arranged at floating rates, thus exposing the Group to cash
flow interest rate risk.
The derivative financial assets and liabilities are designated as held for
trading.
Hedged amount Average rate Duration of contract remaining 30 June 2014Fair value 30 June 2013Fair value 31 December 2013Fair value
£'000 'years' £'000 £'000 £'000
Unaudited Unaudited Audited
Derivative Financial Liability
Interest rate swap 35,000 5.06% 24.2 (11,443) (11,919) (10,599)
Interest rate swap 25,000 4.63% 7.4 (3,925) (4,935) (4,063)
(15,368) (16,854) (14,662)
Net fair value (loss)/ gain on derivative financial assets (706) 3,851 6,043
* Fixed rate came into effect on 1 September 2008. Rate includes 2% margin.
The contract includes mutual breaks, the first one being on 23 November 2014
(and every 5 years thereafter).
** This arrangement came into effect on 1 December 2011 when HSBC exercised an
option to enter the Group into this interest swap arrangement. The rate shown
includes a 2% margin. This contract includes a mutual break on the fifth
anniversary and its duration is until 1 December 2021.
Interest rate derivatives are shown at fair value in the income statement, and
are classified as level 2 in the fair value hierarchy specified in IFRS 13.
The vast majority of the derivative financial liabilities are due in over one
year and therefore they have been disclosed as all due in over one year.
The above fair values are based on quotations from the Group's banks and
Directors' valuation.
Treasury management
The long-term funding of the Group is maintained by three main methods, all
with their own benefits. The Group has equity finance, has surplus profits
and cash flow which can be utilised, and also has loan facilities with
financial institutions. The various available sources provide the Group with
more flexibility in matching the suitable type of financing to the business
activity and ensure long-term capital requirements are satisfied.
11. Issue of equity/ scrip dividend
As stated in note 4 the final dividend of 9p per share for the year ended 31
December 2013 was paid on 31 July 2014.
This dividend had a scrip dividend alternative. The last day for electing to
take the scrip alternative was 4 July 2014 and the reference price was 338p.
Shareholders holding 11,305,326 Ordinary Shares, representing 65.8% of the
issued share capital of the Company, elected to take the scrip dividend.
Accordingly on 12 August 2014 the Company issued 301,008 new Ordinary Shares
which rank pari passu with the existing issued ordinary shares of the
Company.
As the obligation to issue these new ordinary shares was present as at 30 June
2014, they have been accounted for as equity shares to be issued as at that
date.
12. Copies of this report are to be sent to all shareholders and are
available from the Company's registered office at Deneway House, 88-94 Darkes
Lane, Potters Bar, EN6 1AQ and will also be available for download from our
website www.pantherplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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