REG - Panther Securities - Half-year Results <Origin Href="QuoteRef">PNS.L</Origin> - Part 2
28/09/2016 07:05
- Part 2: For the preceding part double click ID:nRSb0024La
Unaudited Unaudited Audited
Cash flows generated from operating activities
Profit from operating activities 3,204 3,956 7,373
Add: Depreciation charges for the period 53 51 135
Less: Rent paid treated as interest (262) (272) (520)
Profit before working capital change 2,995 3,735 6,988
(Increase)/ decrease in inventory (56) (13) 5
Decrease/ (increase) in receivables 828 (92) 292
Increase/ (decrease) in payables 181 (1,165) (1,139)
Cash generated from operations 3,948 2,465 6,146
Interest paid (2,139) (2,234) (4,572)
Income tax paid 2 49 (95)
Net cash generated from operating activities 1,811 280 1,479
Cash generated from investing activities
Purchase of plant and equipment - - (38)
Purchase of investment properties (39) (2,123) (2,224)
Purchase of available for sale investments (shares) (10) - -
Corporate acquisition (net of cash received) (4,481) - -
Proceeds from sale of investment property 5,189 225 4,019
Proceeds from sale of plant and equipment - 1 -
Proceeds from sale of available for sale investments (shares) - 244 244
Dividend income received 91 11 23
Interest income received 2 8 8
Net cash generated from / (used in) investing activities from continuing operations 752 (1,634) 2,032
Financing activities
New loans received 2,000 1,000 1,000
Loan arrangement fees and associated set up costs (407) - -
Repayments of loans (76) (76) (3,152)
Dividends paid (1,775) - (2,307)
Net cash (used in)/ generated from financing activities from continuing operations (258) 924 (4,459)
Net increase/ (decrease) in cash and cash equivalents 2,305 (430) (948)
Cash and cash equivalents at the beginning of period 4,387 5,335 5,335
Cash and cash equivalents at the end of period* 6,692 4,905 4,387
*Of this balance £716,000 (30 June 2015: £239,000, 31 December 2015:
£1,110,000) is restricted by the Group's lenders i.e. it can only be used for
purchase of investment property (or otherwise by agreement).
Panther Securities P.L.C.
NOTES TO THE INTERIM FINANCIAL REPORT
for the six months ended 30 June 2016
1. Basis of preparation of interim financial statements
The results for the year ended 31 December 2015 have been audited whilst the
results for the six months ended 30 June 2015 and 30 June 2016 are unaudited.
The financial information set out in this interim financial report does not
constitute statutory accounts as defined in Section 434 of the Companies Act
2006. The Group's statutory accounts for the year ended 31 December 2015
which were prepared under International Financial Reporting Standards ("IFRS")
as adopted for use in the European Union, were filed with the Registrar of
Companies. The auditors reported on these accounts, their report was
unqualified and did not include reference to any matters to which the auditors
drew attention by way of emphasis without qualifying their report and did not
contain any statements under Section 498 (2) or Section 498 (3) of the
Companies Act 2006.
These condensed consolidated interim financial statements are for the six
month period ended 30 June 2016. They have been prepared using accounting
policies consistent with IFRS as adopted for use in the European Union. IFRS
is subject to amendment and interpretation by the International Accounting
Standards Board ("IASB") and the IFRS Interpretations Committee and there is
an ongoing process of review and endorsement by the European Commission. The
financial information has been prepared on the basis of IFRS that the Board of
Directors expect to be applicable as at 31 December 2016.
There are no new standards, interpretations and amendments, effective for the
first time from 1 January 2016, that have had a material effect on the
financial statements of the Group.
2. Revenue and cost of sales
The Group's main operating segment is investment and dealing in property and
securities. The majority of the revenue, cost of sales and profit or loss
before taxation being generated in the United Kingdom.
MRG Systems Ltd is an operating business segment whose principal activity is
that of electronic designers, engineers and consultants. 60% of its revenue
arose in the United Kingdom and 100% of its cost of sales.
The split of assets, tax effect and cash flow of each segment is not shown as
these are not material in relation to MRG Systems Ltd.
30 June 30 June 31 December
2016 2015 2015
£'000 £'000 £'000
Turnover arose as follows: Unaudited Unaudited Audited
Rental income 6,333 6,463 12,840
Income from trading (MRG Systems Ltd) 889 830 1,603
7,222 7,293 14,443
30 June 30 June 31 December
2016 2015 2015
£'000 £'000 £'000
Cost of sales arose as follows: Unaudited Unaudited Audited
Cost of sales from rental income 1,694 2,049 3,272
Cost of sales from trading (MRG Systems Ltd) 343 323 552
2,037 2,372 3,824
3. Income tax expense
The charge for taxation comprises the following:
30 June 30 June 31 December
2016 2015 2015
£'000 £'000 £'000
Unaudited Unaudited Audited
Current period UK corporation tax 163 320 441
Prior period UK corporation tax - - (91)
163 320 350
Current period deferred tax (1,908) 1,102 1,307
Income tax (credit)/ expense for the period (1,745) 1,422 1,657
The taxation charge is calculated by applying the Directors' best estimate of
the annual effective tax rate to the profit for the period. The deferred tax
credit during the period primarily arises due to the fair value loss on the
Group's interest rate swap.
4. Dividends
Amounts recognised as distributions to equity holders in the period:
30 June 30 June 31 December
2016 2015 2015
£'000 £'000 £'000
Unaudited Unaudited Audited
Final dividend for the year ended 31 December 2014 of 9p (see below) - 1,574 1,574
Interim dividend for the year ended 31 December 2015 of 9p per share - - 1,597
Special dividend for the year ended 31 December 2015 of 10p per share 1,775 - -
Final dividend for the year ended 31 December 2015 of 3p per share 532 - -
2,307 1,547 3,171
On 31 July 2015 the final dividend for the year ended 31 December 2014 of 9p
per share, had a scrip alternative (see note 8). Pursuant to the scrip
dividend 259,634 new ordinary shares were issued in 2015.
The final dividend of 3p per year for the year ended 31 December 2015 was not
paid at the period end (being accrued in these accounts) and was paid on 5
September 2016.
The Directors have declared an interim dividend of 3p per share to be paid on
29 November 2016 to shareholders on the register at 11 November 2016
(ex-dividend 10 November 2016).
5. Earnings 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 operations,
being a loss of £4,896,000 (30 June 2015 - profit of £2,541,000 and 31
December 2015 - profit of £6,852,000).
The basic earnings per share is based on the weighted average of the ordinary
shares in existence throughout the period, being 17,746,929 to 30 June 2016
(17,617,112 to 31 December 2015 and 17,502,944 to 30 June 2015). There are no
potential shares in existence for any period therefore diluted and basic
earnings per share are equal.
6. Investment Properties
30 June 30 June 31 December
2016 2015 2015
£'000 £'000 £'000
Unaudited Unaudited Audited
Fair value of investment properties
At 1 January 176,133 173,412 173,412
Additions 4,551 2,123 2,224
Fair value adjustment on property held on operating leases - - (417)
Disposals (5,324) (250) (2,945)
Revaluation increase 263 - 3,859
175,623 175,285 176,133
7. 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
2016 2015 2015
£'000 £'000 £'000
Bank loans Unaudited Rate Unaudited Rate Audited Rate
Interest is charged as to:
Fixed/ Hedged
HSBC Bank plc* 35,000 7.03% 35,000 7.06% 35,000 7.06%
HSBC Bank plc** 25,000 6.60% 25,000 6.63% 25,000 6.63%
Unamortised loan arrangement fees (704) (58) -
Floating element
HSBC Bank plc 11,497 12,497 9,497
Natwest Bank plc 654 808 731
71,447 73,247 70,228
Bank loans totalling £60,000,000 (2014 - £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 Rate (without margin) Duration of contract remaining 30 June 2016Fair value 30 June 2015Fair value 31 December 2015Fair value
£'000 years £'000 £'000 £'000
Unaudited Unaudited Audited
Derivative Financial Liability
Interest rate swap 35,000 5.06% 22.19 (25,530) (17,400) (18,541)
Interest rate swap 25,000 4.63% 5.42 (5,365) (4,328) (4,371)
(30,895) (21,728) (22,912)
Movement in derivative financial liabilities (7,983) 2,747 1,563
* Fixed rate came into effect on 1 September 2008. The rate includes a blend
of 2% and 1.95% margin. The contract includes mutual breaks, the next one
being on 23 December 2019 (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
includes a blend of 2% and 1.95% 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 statement of
financial position, with charges in fair value taken to the income statement.
Interest rate swaps 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.
8. Issue of equity/ scrip dividend
As stated in note 4 the final dividend of 9p per share for the year ended 31
December 2014 was paid on 31 July 2015 and had a scrip dividend alternative.
The last day for electing to take the scrip alternative was 3 July 2015 and
the reference price was 332.5p.
Shareholders holding 9,592,088 Ordinary Shares, representing 54.9% of the
issued share capital of the Company, elected to take the scrip dividend.
Accordingly on 6 August 2015 the Company issued 259,634 new Ordinary Shares
which rank pari passu with the existing issued ordinary shares of the
Company.
No dividends paid since have had a scrip alternative so no further shares have
been or currently intend to be issued.
9. Net asset value per share
30 June 30 June 31 December
2016 2015 2015
£'000 £'000 £'000
Unaudited Unaudited Audited
Basic and diluted 388p 413p 428p
10. 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
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