REG - Panther Securities - Interim Report - six months ended 30 June 2023
27/09/2023 07:00
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RNS Number : 7445N Panther Securities PLC 27 September 2023
27 September 2023
Panther Securities PLC
(the "Company" or the "Group")
Interim Report for the six months ended 30 June 2023
Chairman's Statement
I am pleased to present the results for the half year ended 30 June 2023,
which produced a profit of £7,049,000 compared to £9,958,000 for the
previous half year, both after tax.
As usual, there are large non-cash items that affect our reported profits and
this year is no exception. The majority of our investment portfolio was
independently revalued by Messrs. Carter Jonas, which showed a £5,041,000
improvement based on their current draft values, compared to the 2022 year-end
directors' valuation. This is the net increase from numerous individual
property revaluations. There were no real trends to speak of as we mainly
saw increases across the board but we did see large decreases on two
residential sites.
Of course, the other large item to have given increased value to our balance
sheet is the improvement in the interest rate swap valuations.
For many years, these arrangements which fixed our interest rate at above the
then current value of interest rates, became a heavy liability on our balance
sheets - BUT now with the advent of much higher interest rates plus the
alterations we negotiated, our swap arrangements are now extremely beneficial
as they fix our borrowing rate considerably below current rates, thus making
our swap arrangements a valuable commodity having increased in value by
£3,184,000 within the period ended 30 June 2023, and a balance sheet asset
value of £7,651,000 at the period end.
Our detailed derivative arrangements shown in note 7 are currently very
beneficial to our Group. It must always be remembered that swap arrangements
can have volatile values dependent on the movement of interest rates and other
factors.
Rents Receivable
Rents receivable for the current period were £6,736,000 compared to
£6,387,000 for the comparable period. It is pleasing to see that they are
moving in the right direction.
Acquisitions
In March 2023 the Group purchased the freehold of 192/194 Northdown,
Cliftonville. This property is mostly occupied by Boots PLC, at £25,000 per
annum. We have possession of the upper part. This property adjoins our
existing corner building and is close to other units, which we have owned for
many years.
Disposals
There were no disposals during the period.
Developments
Peterborough
The former Beales store in Peterborough was vacated by New Start 2020 Limited,
trading as Beales, in February 2023. The store was uneconomical for them due
to high business rates applied to the trading area. We had made a planning
application for a mixed-use development of shops/offices and 124 residential
units. I am pleased to say full planning permission was granted on 18 July
2023, subject to agreement of Section 106. This permission has reasonable
conditions that we should be able to satisfy. This property is currently
having marketing brochures prepared for its freehold sale.
Swindon
I have previously reported on our two planning permissions on this central
Swindon site and proposed new 250 year lease. As a reminder the first
planning permission is for a leisure/ restaurant two storey development and
the second planning permission is a ground floor leisure/ restaurant only but
with a tower block with 8 floors above, which would contain circa 68
residential units. I thought full permission and a lease extension agreement
was practically a 'fait accompli'. It was, but the buffers appeared due to a
new political council in control of the administration after recent council
elections, and thus we await their proposals if any!
Directors
We now have two new non-executive directors:
Jonathan Rhodes - has over 34 years of experience in the property sector and
is a RICS Registered Valuer. He is currently a partner and National Head of
Valuation at Cluttons LLP, having previously held similar roles at GL Hearn,
DTZ, Donaldsons, Chesterton and Colliers. He joined us in November 2022.
Paul Saunders - has over 40 years of experience at HSBC, predominately in
investment and development within the real estate sector. His most recent role
within HSBC was as a Director within the Real Estate Corporate Capital
Origination team at HSBC from 2014 until 2022. He is an Associate of the
Chartered Institute of Bankers (ACIB) and joined us in January 2023.
Both Jonathan Rhodes and Paul Saunders have a wealth of experience to add to
our Board, which should prove invaluable to our future growth, and some of
their ideas and advice are already proving beneficial to our Group.
Refinance
We have been in active discussions with our joint lenders since April 2023 and
are close to getting credit approval for a £68 million facility which we
believe will be on better terms and for a longer period than our current loan
facility. You may recall our current loan facility was negotiated during the
pandemic when there was considerable economic uncertainty. Even though these
are now not economically stable times, comparatively to July 2021 (and the
several months prior to the signing of the agreement) they are a much better
environment for our business. In particular, with the higher interest rate
environment, lenders are more concerned about interest cover and due to our
long dated interest swaps and also our varied and diversified high yielding
portfolio, we are considered a stronger counterparty than many of our peers.
In an ideal world, we would have liked to have reported full credit approval
for our proposed facility with this announcement, but that aside we do expect
to be able to get the facility completed by the year end. The current
facility does not expire until July 2024.
Charitable Donations
I believe it is important that successful companies always provide assistance
to charities which often provide benefits to the communities we invest in.
Due to the small size of some charities, they are rarely able to receive
assistance from local or central government. We sponsored Braves Football
Club CIC, (and other local football teams). We donated £10,000 to Land Aid
which is a property industry charity whose goal is to end youth
homelessness.
Political Donations
I consider it even more important to donate to political parties who are
trying to make our country a more successful place from which to trade and
create enterprise.
At last year's AGM, shareholders approved a donation of £20,000 to the Reform
UK Party, who I believe could make a creditable alternative to any of the
currently better known parties.
Dividends
In February 2023, we paid a 10p per share special dividend in relation to the
year ending 31 December 2023.
In July 2023 (after the period end) we also paid a 6p per share final dividend
in relation to the year ended 31 December 2022 which is accrued in these
interim accounts (as it was approved by shareholders at our AGM in June 2023).
We are declaring an interim dividend for the year ending 31 December 2023 of
6p per share to be paid on 27 October 2023 to shareholders on the register at
13 October 2023 (ex-dividend on 12 October 2023).
We expect to maintain our ordinary dividend for the full year of 12p per share
on top of the 10p special already paid.
Prospects
We are comparatively lowly geared with the benefit of a low fixed interest
rate on the majority of our borrowings. The Group benefits from a
diversified high returning asset base. We are in a strong position to take
advantage of any exciting opportunities that become available which the
current economic headwinds might bring to the market.
Andrew S Perloff
Chairman
27 September 2023
Chairman's Ramblings
Taylor Swift is an attractive world class entertainer, singer and dancer with
a worldwide following. Her concerts are sell-outs whenever they are held.
She performs with such gusto and ENERGY, drawing her audience into singing and
dancing that at some venues her and the audience's energy is measurable on the
Richter scale reportedly up to 2.3.
Most of you will know the Richter scale was devised by Mr Richter in 1935 to
measure the strength or energy released by earthquakes which happen naturally
regularly throughout the world. It runs from 0.1 to 9 but each full number
represents an increase of 30 times the strength of the lower number. Up to 2
or 3 it is hardly noticeable but 5-6 is trouble and after that it becomes a
real disaster, especially if near any built up areas.
Whilst widely reported that Taylor Swift's concerts are noticeably measurable,
it appears that causing a Richter scale measurement at her venues has not
drawn one protest that they should be banned because of risk to the
environment.
In my Chairman's Ramblings of last year, I briefly touched on fracking and our
own possibility of self-reliance on energy and the stupidity of not allowing
fracking to proceed when only one out of 300 possible noticeable movements
caused by fracking noted on the Richter scale would be noticeable by people in
the fracking area, i.e., it appears that virtually all fracking is less risky
than a Taylor Swift concert.
Having thought about fracking a lot more I realised that this is only part of
the big picture of energy cost.
The cost of energy is relevant in practically everything and I suspect it is
the cause of our severe inflation problems. I list some areas I can
immediately think of: heating homes, factories, transportation of most of our
goods, manufacturing, the general public's ability to drive cars (one of our
most important freedoms), lighting, electricity to run machines, life-saving
medical machines, production of fertiliser, running farm machinery (so that
farmers are more productive) and making us able to produce our own steel at
less cost so that we don't have to import from far abroad.
I am sure I have missed out many items. They are all major basic causes of
inflation.
Inflation is a money disease invariably caused by poor government policies.
If inflation rises by 12% one year and the next year it falls to 6% for that
second year, it means that if you need £500 per week for your current
standard of living for a year, the next year you need £560 per week and even
after inflation has halved to 6% the next year, you need about £600 per week
as it rarely decreases.
Our country's inflation is about double that of the US. Why? I believe it
is simple. They are keen on fracking and also maximise their oil and gas
production to protect their own interests whereas our government is hell bent
on gesture politics "to save the world".
This is why the UK has introduced policies to reduce CO(2) emissions
substantially to 0% if possible, within 30 years or so and expecting to
eliminate fossil fuels in the production of our energy. New policies
invariably mean new taxes, extra onerous regulations that cost money, many
falling on owners of homes/properties based on science produced by scientists
who are usually paid for research from taxpayer's funds. Whilst they, of
course, could be correct that global warming is happening, I feel it is
worrying that those with different opinions are often prevented from
presenting them for consideration.
Even if scientists are correct and government policies do reduce the UK's
CO(2) (the most common greenhouse gas) to nil, it will reduce world CO(2)
pollution by 1%, i.e., 99% still being produced and this assumes all other
countries have no increased production.
This is not going to happen. The non-fully developed countries will continue
to stretch their economies to increase their national wealth towards the
Western economies who have done so well from the free enterprise capitalist
system.
We know Russia takes no notice of our good world intention. I doubt if
China, or India, or North Korea, or some South American countries, or a number
of Middle Eastern countries, or African countries take notice of our useless
good intentions but merely take advantage of the trading opportunities
provided by the way our bureaucrats shackle our businesses with regulations
and taxes that make our products less competitive.
Whilst I believe most of our MPs are only wanting to improve our country's
situation (not the bureaucrats who provide backup), I feel the following story
is relevant.
Just over 30 years ago my wife and I took a long nature watching cruise
starting from Buenos Aires, round the Falkland Islands, Antarctica and
finishing at Ushuaia at the tip of Argentina. It was also the first British
cruise ship to stop at Buenos Aires after our war with Argentina before
sailing on to Port Stanley in the Falkland Islands. There was, of course, a
protest waiting for the ship but as we were taken round to see the important
sights there were no problems.
One other memorable moment was during an excursion trip to an Antarctic island
of penguins. Due to choppy water, the shuttle boat (similar to a lifeboat),
which was moored against the cruise ship, was washed a few feet out just as my
wife was boarding. She slipped between the boats and would have fallen into
the icy waters but the magnificent burly Norwegian sailors, one either side of
her, caught each arm and lifted her onto the shuttle boat instantly.
We saw thousands of penguins, various different types, amazing birds, seals,
sea lions, large fish and our ship passed pods of whales at least three
times. We both missed seeing the whales as they breached the water and were
visible only for 30 seconds or so. Each time my wife and I were on the wrong
side of the ship looking the other way.
Our politicians are likewise, whilst not looking for whales but for voters
(which are currently more difficult to find), are looking the wrong way.
They pander to the most vociferous protestors like many Green Party voters,
who are cushioned from reality, often by government largesse or even its free
enterprise system.
To woke policies which are only of interest to a minority of people.
Deliberately taxing those who can only just manage.
They cannot see that their expensive costly tax and regulations to achieve nil
CO(2) emissions are causing millions of people in our own country hardship by
their inflation creating policies and surreptitious extra taxes, costly
regulation and fantastically large amounts of wasted money from that given to
covid support loans to allowing civil servants who pretend to work full-time
from home even if that is a beach on the Scilly Isles!
They cannot see that the war on motorists comes at an enormous cost on
productivity and support of the high street.
Destroying the high streets by a massive unwarranted tax on retail property
that is out of date with modern times, thus reducing Northern towns to 'Dodge
City' status with tumbleweed blowing down the deserted shopping streets.
High Streets are plagued by shoplifters, some aggressive. A new law should
be passed that shoplifters caught in store by store staff can be arrested and
securely detained in a store's locked cell until the end of the day's trading,
then released with a warning. There will be a fixed complaint and
compensation system entitling them to go to court and, if proved innocent,
fixed compensation payments.
They cannot see that preventing foreign tourists being able to purchase high
value goods without tax reduces the tourist industry overall, thus reducing
the overall tax paid by them. Having been to Paris recently, I have
personally witnessed the extra benefits one of our major competitor cities
receives (see photos at back of accounts).
They cannot see that excessive high taxes on the highest earners are driving
people away to less taxing shores (thus the UK raises less tax from them).
Raising corporation tax by a total of over 30% means foreign
investors/manufacturers are disincentivised to invest in the UK and existing
UK based businesses have less money to reinvest in productivity producing
strategies.
It is quite clear the Conservative government has lost the plot on what they
are meant to stand for and thus I give some suggestions for their future
budgets.
Firstly, abolish inheritance tax. It is abhorrent that after a lifetime of
high taxes on both income and profits and inflation created gains, families
should lose 40% of their assets to a profligate state.
This will allow a substantial part of the 7 trillion pound of homes wealth to
trickle down to the lower generation towards assisting their natural
aspirational needs.
Increase tax-free earnings to £15,000 per person paying for this by freezing
benefits for the next five years. This will encourage many of the 7 million
currently unemployed or economically inactive into gainful employment, with a
more vigorous investigation of those long-term benefit receivers to help them
into employment.
Reduce capital gains tax to 15% and raise the nil rate band to £15,000.
This will encourage enterprise/investment and the realising of inherent gains,
thus producing a higher tax take.
Rearrange Stamp Duty to a fixed low percentage of the price paid. This would
free up the market which is currently clogged up by complicated and massive
stamp duty rates for higher priced properties.
Reduce the business rates for retail and leisure industries by at least 50%
and have a 10% token levy payable on vacant properties.
Cancel all CO(2) reduction taxation laws, but continue to emphasise the
eventual benefits and savings to be made by advertising the types of fuel
changes where the public can willingly help to cut down on CO(2) emissions.
To pay for some of these measures the civil service could be reduced by 25% as
there would be less laws to enforce.
Cancel over half the quangos that cost huge amounts to maintain but would not
be missed as most have lost their purpose.
Stop the war on motorists which is an attack on personal freedom and mostly
affects those who are often the lower income members of society.
Removing the heavy legislation and taxation on production of greenhouse gases
will probably reduce current and future inflation by 2% to 3% thus this will
save the government about £25 billion they have to pay out per year to comply
with their promises made when issuing inflation linked gilt edged securities,
and also in due course reduce general interest rates to more normal levels.
They should also announce that that top rate of tax should be reduced by 2%
each year for the next five years at the same time as raising the start point
for higher rates of tax.
Of recent times it is becoming fashionable for various countries to ask for
special items, formerly owned by their own country, to be returned to them,
i.e., the Elgin Marbles, the Benin Bronzes and many other items of antique
interest sold to collectors many years ago.
Has anyone asked on behalf of the UK "Can we have our 44% share of the Suez
Canal back"?
It would be a nice start!
Andrew S Perloff
Chairman
27 September 2023
Panther Securities P.L.C.
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2023
Six months Six months Year
Notes
ended ended ended
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
Revenue 2 6,736 6,387 13,411
Cost of sales 2 (2,953) (2,891) (5,749)
Gross profit 3,783 3,496 7,662
Other income 204 325 1,009
Administrative expenses (784) (699) (1,638)
Bad debt expense (207) (858) (702)
Operating profit 2,996 2,264 6,331
Profit on disposal of investment properties - - 461
Movement in fair value of investment properties 6 5,041 2,050 1,384
8,037 4,314 8,176
Finance costs - interest (2,585) (1,385) (3,265)
Finance costs - swap interest 118 (954) (1,481)
Investment income 33 10 28
Loss realised on the disposal of investments (shares) - - (278)
Fair value gain on derivative financial liabilities 7 3,184 11,329 19,722
Profit before income tax 8,787 13,314 22,902
Income tax expense 3 (1,738) (3,356) (5,917)
Profit for the period 7,049 9,958 16,985
Earnings per share
Basic and diluted - continuing operations 5 40.3p 56.5p 96.6p
Panther Securities P.L.C.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2023
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
Profit for the period 7,049 9,958 16,985
Items that will not be reclassified subsequently to profit or loss
Movement in fair value of investments taken to equity 26 (47) (59)
Deferred tax relating to movement in fair value of investments taken to equity (6) 12 15
Realised fair value on disposal of investments previously taken to equity - - 309
Realised deferred tax relating to disposal of investments previously taken to - -
equity
(77)
Other comprehensive (loss)/income for the period, net of tax 20 (35)
188
Total comprehensive income for the period 7,069 9,923 17,173
Attributable to:
Equity holders of the parent 7,069 9,923 17,173
7,069 9,923 17,173
Panther Securities P.L.C.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Company number 293147
As at 30 June 2023
30 June 30 June 31 December
Notes
2023 2022 2022
£'000 £'000 £'000
ASSETS Unaudited Unaudited Audited
Non-current assets
Plant and equipment 58 - 64
Investment properties 6 182,442 177,723 176,937
Derivative financial asset 7,651 - 4,467
Right of use asset 258 296 258
Investments 535 304 256
190,944 178,323 181,982
Current assets
Asset held for sale - - 191
Stock properties 350 350 350
Investments 29 29 29
Trade and other receivables 2,978 3,383 3,178
Cash and cash equivalents (restricted) 4 4 4
Cash and cash equivalents 5,605 5,534 4,454
8,966 9,300 8,206
Total assets 199,910 187,623 190,188
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Capital and reserves
Share capital 4,437 4,437 4,437
Share premium account 5,491 5,491 5,491
Treasury shares (772) (482) (772)
Capital redemption reserve 604 604 604
Retained earnings 105,741 95,265 101,467
Total equity 115,501 105,315 111,227
Non-current liabilities
Long-term borrowings 7 60,704 58,910 58,807
Derivative financial liability 7 - 3,926 -
Deferred tax liability 8 4,987 1,092 3,371
Leases 8,249 8,353 8,249
73,940 72,281 70,427
Current liabilities
Trade and other payables 8,628 8,202 7,869
Accrued dividend payable 4 1,048 1,061 -
Short-term borrowings 7 500 500 500
Current tax payable 293 264 165
10,469 10,027 8,534
Total liabilities 84,409 82,308 78,961
Total equity and liabilities 199,910 187,623 190,188
Panther Securities P.L.C.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2023
Share Share premium Capital redemption Retained earnings Total
capital Treasury shares reserve
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2022 (audited) 4,437 5,491 604
(213) 87,464 97,783
Total comprehensive income for the period - - - 9,923 9,923
-
Treasury shares purchased - - (269) - - (269)
Dividends paid - - - - (1,061) (1,061)
Dividends due - - - - (1,061) (1,061)
Balance at 30 June 2022 (unaudited) 4,437 5,491 604 95,265 105,315
(482)
Balance at 1 January 2022 (audited) 4,437 5,491 604
(213) 87,464 97,783
Total comprehensive income for the period - - - 17,173 17,173
-
Dividends paid - - - - (3,170) (3,170)
Treasury share purchase - - (559) - - (559)
Balance at 1 January 2023 (audited) 4,437 5,491 604
(772) 101,467 111,227
Total comprehensive income for the period - - - 7,069 7,069
-
Dividends paid - - - - (1,747) (1,747)
Dividends due - - - - (1,048) (1,048)
Balance at 30 June 2023 (unaudited) 4,437 5,491 604 105,741 115,501
(772)
Panther Securities P.L.C.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2023
30 June 30 June 31 December
Notes
2023 2022 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
Cash flows from operating activities
Operating profit 2,996 2,264 6,331
Add: Depreciation 6 - 45
Less: Rent paid treated as interest (343) (343) (687)
Profit before working capital change 2,659 1,921
5,689
Decrease in assets held for resale 191 - -
Decrease/(increase) in receivables 200 (387) (182)
Increase/(decrease) in payables 755 (573) (1,149)
Cash generated from operations 3,805 961 4,358
Interest paid (1,972) (1,848) (3,766)
Income tax paid - (208) (662)
Net cash (used in)/generated from operating activities 1,833 (1,095)
(70)
Cash flows from investing activities
Purchase of investment properties (464) (8,529) (8,947)
Purchase of investments** (254) (60) (66)
Purchase of plant and equipment - - (300)
Proceeds from sale of investment property - - 1,176
Proceeds from sale of investments** - - 74
Dividend income received 4 8 21
Interest income received 29 2 7
Net cash (used in)/generated from investing activities (685) (8,579) (8,035)
Cash flows from financing activities
New loans received 2,000 8,500 8,500
Repayments of loans - (5,060) (5,060)
Loan amortisation repayments (250) (250) (500)
Purchase of own shares - (269) (559)
Dividends paid (1,747) (1,061) (3,170)
Net cash generated from/ (used in) financing activities 3 1,860 (789)
Net increase/(decrease) in cash and cash equivalents 1,151 (7,814) (8,894)
Cash and cash equivalents at the beginning of period* 4,458 13,352 13,352
Cash and cash equivalents at the end of period* 5,609 5,538 4,458
* Of this balance £4,000 (30 June 2022: £4,000, 31 December 2022: £4,000)
is restricted by the Group's lenders i.e. it can only be used for the purchase
of investment property (or otherwise by agreement).
** Shares in listed and/or unlisted companies. These were held for longer term
growth and dividend return.
Panther Securities P.L.C.
NOTES TO THE INTERIM FINANCIAL REPORT
for the six months ended 30 June 2023
1. Basis of preparation of interim financial statements
The results for the year ended 31 December 2022 have been audited whilst the
results for the six months ended 30 June 2022 and 30 June 2023 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 2022
which were prepared in accordance with UK-adopted international accounting
standards ("IFRS"), were filed with the Registrar of Companies. The auditors
reported on these accounts, their report was unqualified and did not included
a 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 2023. They have been prepared in accordance with
UK adopted international accounting standards in conformity with the
requirements of the Companies Act 2006.
A number of new and amended standards and interpretations are effective from 1
January 2023 but they do not have a material effect on the Group's financial
statements.
2. Revenue and cost of sales
The Group's only operating segment is investment and dealing in property and
securities. All revenue, cost of sales and profit or loss before taxation is
generated in the United Kingdom. The Group is not reliant on any key
customers.
3. Income tax expense
The charge for taxation comprises the following:
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
Current period UK corporation tax (128) - (436)
Prior period UK corporation tax - - 80
(128) - (356)
Current period deferred tax expense (1,610) (3,356) (5,561)
Income tax expense for the period (1,738) (3,356) (5,917)
The taxation charge is calculated by applying the Directors' best estimate of
the annual effective tax rate to the profit for the period.
4. Dividends
Amounts recognised as distributions to equity holders in the period:
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
Special dividend for the year ended 31 December 2023 of 10p per share
1,747 - -
Final dividend for the year ended 31 December 2022 of 6p (2021 - 6p) per share
1,048* 1,061* 1,054
Interim dividend for the year ended 31 December 2022 of 6p per share
- - 1,054
Interim dividend for the year ended 31 December 2021 of 6p per share
- 1,061 1,062
2,795 2,122 3,170
The final dividend of 6p per share for the year ended 31 December 2022 (and
2021) was not paid during the period to 30 June 2023 but declared and approved
(being accrued in these accounts) and was paid on 19 July 2023 (20 July 2022).
*Accrued at half year and paid after period end.
5. Earnings per share (basic and diluted)
The calculation of basic and diluted earnings per ordinary share is based on
earnings being a profit of £7,049,000 (30 June 2022 - £9,958,000 and 31
December 2022 - £16,985,000).
The basic earnings per share is based on the weighted average of the ordinary
shares in existence throughout the period, being 17,471,929 to 30 June 2023
(17,577,699 to 31 December 2022 and 17,628,469 to 30 June 2022). There are
no potential shares in existence for any period and therefore diluted and
basic earnings per share are equal.
Panther Securities PLC owns 275,000 ordinary shares in the Company which are
currently held in treasury (31 December 2022 - 275,000 and 30 June 2022 -
173,460).
6. Investment properties
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
Fair value of investment properties
At 1 January 176,937 167,384 167,384
Additions 464 8,289 8,947
Disposals - - (715)
Fair value adjustment on investment properties held on leases
- - (63)
Revaluation increase/ (decrease) 5,041 2,050 1,384
At period end 182,442 177,723 176,937
The Directors undertook the valuation as at 30 June 2023, 30 June 2022 and 31
December 2022. However a draft independent valuation by Carter Jonas was
available in July 2023 which was used as the basis for the Directors
valuation.
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
2023 2022 2022
£'000 £'000 £'000
Bank loans Unaudited Rate Unaudited Rate Audited Rate
Interest is charged as to:
Fixed/ Hedged
HSBC Bank plc* 35,000 7.76% 35,000 7.76% 35,000 7.76%
Santander Bank plc 25,000 4.71% 25,000 4.71% 25,000 4.71%
Unamortised loan arrangement fees (296) (590) (443)
Floating element 1,500
HSBC Bank plc - - (250)
61,204 59,410 59,307
* Fixed rate came into effect on 1 September 2008 and lasts for 30 years.
The rate includes 2.70% margin (1.95% prior to 16 July 2021). There are no
breaks and the rate drops to 3.40% on 1 September 2023 to the end of its term
on 31 August 2038. The fixed rate financial derivatives (swaps) are
referenced to SONIA.
Bank loans totalling £60,000,000 (2022 - £60,000,000) are fixed using
interest rate swaps removing the Group's exposure to interest rate risk. The
remaining borrowings are arranged at floating rates, thus exposing the Group
to cash flow interest rate risk. The Group at the period end had a
£54,000,000 term facility (after loan amortisation repayments) and a
£11,000,000 revolving (with £7,500,000 drawn).
The derivative financial assets and liabilities are designated as held for
trading.
Hedged amount Rate (without margin) Duration of contract remaining 30 June 2023 30 June 2022 31 December 2022
Fair value Fair value Fair value
£'000 years £'000 £'000 £'000
Unaudited Unaudited Audited
Derivative financial liability
Interest rate swap* 35,000 5.060% 15.19 3,402 (4,676) 1,236
Interest rate swap 25,000 2.013% 8.42 4,249 750 3,231
7,651 (3,926) 4,467
Movement in derivative financial liabilities 3,184 11,329 19,722
*The Group has paid £5 million in February 2021 to vary this long-term swap
agreement. The agreement varied the fixed rate previously at 5.06% until 31
August 2038 on a nominal value of £35 million. Following the variation, the
Group's fixed rate will drop on 1 September 2023 to 3.40% saving the Group
circa £581,000pa in cash flow until the end point of the instrument.
As the Group's new loan facility entered into in July 2021 is referenced to
SONIA rather than LIBOR, the Group recently altered its swap agreements onto
the same basis.
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. Deferred taxation
The following are the major deferred tax assets and liabilities recognised by
the Group, and the movements thereon, during the current and prior reporting
periods.
Total
£'000
Asset at 1 January 2022 2,252
Debit to equity for the year (62)
Debit to Income Statement for the year (5,561)
Liability at 1 January 2023 (3,371)
Debit to equity for the period (6)
Debit to Income Statement for the period (1,610)
Liability at 30 June 2023 (4,987)
Deferred taxation arises in relation to:
Deferred tax
30 June 2023 30 June 2022 31 December 2022
£'000 £'000 £'000
Deferred tax liabilities:
Investment properties (3,373) (2,540) (2,722)
Derivative financial asset (1,913) - (1,117)
Fair value of investments (62) - -
Deferred tax assets:
Tax allowances in excess of book value 361 323 398
Fair value of investments - 143 70
Derivative financial liability - 982 -
Net deferred tax liablity (4,987) (1,092) (3,371)
As at 30 June 2022 the substantively enacted rate was 25% (also 25% as at 30
June 2022 and 31 December 2022) and this has been used for the deferred tax
calculation.
9. Net asset value per share
30 June 30 June 31 December
2023 2022 2022
Unaudited Unaudited Audited
Basic and diluted 661p 599p 637p
10. Copies of this report are to be sent to all shareholders and are
available from the Company's registered office at Unicorn House, Station
Close, Potters Bar, EN6 1TL and will also be available for download from our
website www.pantherplc.com (http://www.pantherplc.com) .
Panther Securities PLC +44 (0) 1707 667 300
Andrew Perloff, Chairman
Simon Peters, CEO & Finance Director
Allenby Capital Limited +44 (0) 20 3328 5656
(Nominated Adviser and Joint Broker)
Alex Brearley
Piers Shimwell
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