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RNS Number : 7022F Panther Securities PLC 26 September 2024
26 September 2024
Panther Securities PLC
(the "Company" or the "Group")
Interim Report for the six months ended 30 June 2024
Chairman's Statement
Once again, I am pleased to announce our results for the half year ended 30
June 2024. Our profit for this period was £3,351,000 compared to
£7,049,000 for the previous year's equivalent period.
Last year's six-month period was helped by a revaluation gain on investment
properties of £5,041,000 which, whilst flattering profits in 2023, obscures
the underlying improvement in 2024 on the Group's underlying financial
performance shown by its rental growth.
Rents Receivable
During this 2024 interim accounting period, rents receivable amounted to
£7,231,000 compared to £6,736,000 for the equivalent period in the previous
year.
Our rental income is gradually increasing, in some part due to the
refurbishing works and splitting up of some of our larger vacant units, with
more manageable and attractive units which are easier to let. Whilst the
current period shows a decline in expenditure, this will rise in our second
half year period, as some larger works proceed, some with pre-lets signed.
Interest Costs
Our interest costs are approximately £218,000 lower in the current period,
mainly due to the swap rearrangements which took effect on 1 September 2023
(see note 7) but also due to our bank loans' lower margins following the
refinance that was completed in March 2024.
Bad Debts
This period's bad debts appear to have over doubled to £482,000 although the
last period had a historically low bad debt charge and I can only speculate
that some of the additional difference may reflect a timing situation, as many
of our tenants were nervous of the probable (and now in effect) change of
political direction and held onto their cash longer than usual.
Property Values
The Directors have taken the view that there is no overall change in the value
of the Group's total property portfolio as at 30 June 2024.
Derivative Value
As at 30 June 2024, our derivative financial asset's value was £5.02m, an
increase of £2.52m relative to 31 December 2023. Our derivative
arrangements have very volatile values but are currently providing continuous
positive cash flow benefits to our Group.
Tax
Our future tax payable is now at a rate of 25% on profits whereas it was 19%
up to 31 March 2023.
Property Lettings/Improvements
Padholme Road, Peterborough
This 50,000 sq ft warehouse was purchased vacant and let towards the end of
2023 at £345,000 pa. It was refurbished by our new tenants, Anglia Home
Furnishing Limited, with our financial assistance. However, the AHF Group
was sold to a much larger group who believed they may need a larger warehouse
in due course. They therefore negotiated a three-month rolling break clause
to be inserted into their lease for which we received £500,000. We believe
that due to the improvements made to the property, as and when they decide to
vacate this property, it should hopefully achieve a higher rental value. At
the time of publishing this statement they had not exercised their break
clause.
53/55 High Street, St Neots
After splitting this former Beales unit into two or three units, approximately
half the space has been let to Poundstretcher on a 10-year lease at £90,000
pa.
Unit 10, Chorley Industrial Estate
This unit has been re-let at £95,000 pa. Previously this was vacant for
almost a year.
Small units
There are also many small units that have been let or have had lease
extensions granted, several of which are at slightly increased rentals.
Post 30 June 2024 improvements in lettings/sales
Chorley Industrial Estate
Whilst only producing a slight increase in rents payable, a new lease has been
agreed with a very substantial European company on four units, with two
already occupied by them. However, it will soon become a 15-year lease (with
a break at 10) with £318,000 pa to be receivable from this strong covenant.
Their main existing unit lease was due to expire in two years' time. This
extra security of a longer-term lease should give added value to this estate.
Brackla Shopping Centre
We have agreed a lease, subject to the Group spending £500,000 on repairs and
improvements, and with planning permission for a change of use to a medical
use already obtained by the incoming tenant. This lease will be at circa
£95,000 pa for 20 years (with break at 15) to a global healthcare company.
This unit is currently vacant and was previously let at £45,000 pa (a couple
of years ago). This will substantially improve the value of the Brackla
Shopping Centre.
Auction Properties
In July 2024 we sold three mature freehold property investments at auction.
These were in Blackburn, Hull and Widnes. A total of £1,336,000 was
received compared to the book valuation of £1,235,000.
Having owned these properties for many years, we felt that as the leases ended
in a year or two, that if vacated by the tenants their values would fall
considerably. Building our cash reserves seems a sensible policy under our
new government.
Developments in limbo
I have mentioned several times our potential developments at Swindon and Barry
Parade, Peckham when I previously optimistically believed that we had jumped
through all the hoops necessary to obtain planning permission, but it has
proved impossible to deal with the respective local authorities'
requirements. Thus, we are looking at alternative ways of making these two
central sites productive.
Political Donation
At our AGM the resolution to pay £25,000 to the Reform UK party was passed by
13 shareholders representing 84% of those voting and eight shareholders who
voted against this resolution representing the remaining 16%. This is, of
course, without any of my personal holding being voted.
Dividends
On 27 July 2024 (after the period end) we paid a 6p per share final dividend
in relation to the year ended 31 December 2023 which is accrued in these
interim accounts (as it was approved by shareholders at our AGM in June 2024).
We are declaring an interim dividend for the year ending 31 December 2024 of
6p per share to be paid on 29 October 2024 to shareholders on the register at
11 October 2024 (ex-dividend on 10 October 2024).
We expect to maintain our ordinary dividend for the 2024 full year totalling
12p per share.
Prospects
With a new government comprised of mostly business inexperienced politicians,
it is hard to be too optimistic about the country's successful progress, but
despite some of the dreadful ideas being promoted in our new government's
first few months, I believe that our Group is in a sound financial position,
i.e., substantial cash, spare bank facilities, growing income from a large
spread of tenants, which will enable us to take up any potential profitable
opportunities that will very likely come our way.
Andrew S Perloff
Chairman
26 September 2024
Chairman's Ramblings
As I have mentioned several times through previous ramblings, a Chinese quote
sometimes said on departing from business meetings, "May you live in exciting
times", is often thought of as a blessing, but it is really a curse upon you.
In this country, we are now living in exciting times. Since July 4(th),
Independence Day in United States of America but in our Dis-United Kingdom,
that date should be named Serfdom Day.
From the moment the new government walked through the door of 'No. 10' in
their freebie designer clothes and phenomenally overpriced reality blurred
spectacles, a plethora of new rules, regulations, taxes and vindictive
proposals have been issued, promised or suggested by the new team.
There is no doubt the Conservatives, R.I.P., deserved to lose any election.
They were so politically inept for so many years by destroying the High
Street, attacking high end tourist trade, attacking successful high earners
and pandering to tiny minorities who were very loud protestors, hanging their
hat on green policies and taxes which only impoverish the already poorer
members of our own population and becoming energy reliant on foreign nations
by not utilising our own energy sources and thus paying billions of pounds
elsewhere to meet our own energy demands.
The Tory leadership failed to oversee our own bureaucracy effectively, so that
whatever government service we need or require is dealt with badly and
inefficiently, thus expensively. Failing to halt the huge increase in
immigration, the enormity of which is such that many migrants to the UK cannot
be properly housed, educated, medically looked after, fed or clothed without
substantially further impoverishing the UK's own lower income families. The
tensions this causes build up and I believe that this will cause social
problems.
However, it seems that the new teams of government leaders' paymasters, the
unions, will be lavishly rewarded, which I believe will encourage others to
demand unreasonable and unaffordable pay demands. This may cause inflation
to stay higher than expected thus interest rates may remain higher than
anticipated.
Now the new team have discovered 'black holes' in this country's finances, we
have been promised brutal tax increases on those with the 'broadest
shoulders'. There may still be a few first-class seats left on planes flying
to a more pleasant economic climate than here, but I suspect many of those
'broad shoulders' will have left this country by the time our new seemingly
vindictive administration can put the plans into full action, thus making it
necessary for extra money to be raised from the 'working class' who are
already just managing.
I seem to recall a part of a song by Ron and the Rude Boys appropriate for the
grand finale of our new leaders' conference.
♬ ♬
The pensioners and working class
Can kiss my ****
We've got all the government jobs at last!
Yours
Andrew S Perloff
Chairman
26 September 2024
Panther Securities P.L.C.
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2024
Six months Six months Year
Notes
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Unaudited Unaudited Audited
Revenue 2 7,231 6,736 14,457
Cost of sales 2 (2,452) (2,953) (6,630)
Gross profit 4,779 3,783 7,827
Other income 671 204 1,043
Administrative expenses (826) (784) (1,843)
Bad debt expense (482) (207) (680)
Operating profit 4,142 2,996 6,347
Profit on disposal of investment properties - - 305
Movement in fair value of investment properties 6 - 5,041 5,534
4,142 8,037 12,186
Finance costs - interest (2,989) (2,585) (5,586)
Finance costs - swap interest 740 118 757
Investment income 61 33 108
Loss realised on the disposal of investments (shares) - - (4)
Fair value gain / (loss) on derivative financial liabilities 7 2,518 3,184 (1,962)
Profit before income tax 4,472 8,787 5,499
Income tax expense 3 (1,121) (1,738) (1,076)
Profit for the period 3,351 7,049 4,423
Earnings per share
Basic and diluted - continuing operations 5 19.2p 40.3p 25.3p
Panther Securities P.L.C.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2024
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Unaudited Unaudited Audited
Profit for the period 3,351 7,049 4,423
Items that will not be reclassified subsequently to profit or loss
Movement in fair value of investments taken to equity 9 26 19
Deferred tax relating to movement in fair value of investments taken to equity (2) (6) (5)
Realised fair value on disposal of investments previously taken to equity - - 43
Realised deferred tax relating to disposal of investments previously taken to - -
equity
(10)
Other comprehensive income for the period, net of tax 7 20
47
Total comprehensive income for the period 3,358 7,069 4,470
Attributable to:
Equity holders of the parent 3,358 7,069 4,470
3,358 7,069 4,470
Panther Securities P.L.C.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Company number 293147
As at 30 June 2024
30 June 30 June 31 December
Notes
2024 2023 2023
£'000 £'000 £'000
ASSETS Unaudited Unaudited Audited
Non-current assets
Plant and equipment 30 58 42
Investment properties 6 185,143 182,442 185,169
Derivative financial asset 5,023 7,651 2,505
Right of use asset 221 258 221
Investments 173 535 165
190,590 190,944 188,102
Current assets
Stock properties 350 350 350
Investments 21 29 26
Trade and other receivables 3,147 2,978 3,250
Cash and cash equivalents (restricted) 4 4 954
Cash and cash equivalents 6,062 5,605 4,198
9,584 8,966 8,778
Total assets 200,174 199,910 196,880
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 (855) (772) (772)
Capital redemption reserve 572 604 572
Retained earnings 104,454 105,741 102,144
Total equity 114,099 115,501 111,872
Non-current liabilities
Long-term borrowings 7 62,906 60,704 -
Deferred tax liability 8 4,858 4,987 4,225
Leases 8,087 8,249 8,113
75,851 73,940 12,338
Current liabilities
Trade and other payables 8,719 8,628 8,528
Accrued dividend payable 4 1,048 1,048 -
Short-term borrowings 7 - 500 64,101
Current tax payable 457 293 41
10,224 10,469 72,670
Total liabilities 86,075 84,409 85,008
Total equity and liabilities 200,174 199,910 196,880
Panther Securities P.L.C.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2024
Share Share premium Capital redemption Retained earnings Total
capital Treasury shares reserve
£'000 £'000 £'000 £'000 £'000 £'000
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)
Balance at 1 January 2023 (audited) 4,437 5,491 604
(772) 101,467 111,227
Total comprehensive income for the period - - - 4,470 4,470
-
Dividends paid - - - - (3,844) (3,844)
Consolidation adjustment - - - (32) 51 19
Balance at 1 January 2024 (audited) 4,437 5,491 572
(772) 102,144 111,872
Total comprehensive income for the period - - - 3,358 3,358
-
Dividends due - - - - (1,048) (1,048)
Treasury shares purchased - - (83) - - (83)
Balance at 30 June 2024 (unaudited) 4,437 5,491 572 104,454 114,099
(855)
Panther Securities P.L.C.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2024
30 June 30 June 31 December
Notes
2024 2023 2023
£'000 £'000 £'000
Unaudited Unaudited Audited
Cash flows from operating activities
Operating profit 4,142 2,996 6,347
Add: Depreciation 11 6 22
Add: Loss on write down of stock 6 - -
Less: Rent paid treated as interest (340) (343) (680)
Profit before working capital change 3,819 2,659
5,689
Decrease in assets held for resale - 191 191
Decrease/ (increase) in receivables 103 200 (72)
(Decrease)/ increase in payables (81) 755 690
Cash generated from operations 3,841 3,805 6,498
Interest paid (1,709) (1,972) (3,856)
Income tax paid (74) - (361)
Net cash generated from operating activities 2,058 1,833
2,281
Cash flows from investing activities
Purchase of investment properties - (464) (3,449)
Purchase of investments** - (254) (256)
Proceeds from sale of investment property - - 950
Proceeds from sale of investments** - - 404
Dividend income received 3 4 14
Interest income received 58 29 94
Net cash generated/(used in) from investing activities 61 (685) (2,243)
Cash flows from financing activities
New loans received 1,375 2,000 5,000
Loan arrangement fees and associated costs (522) - -
Loan amortisation repayments (125) (250) (500)
Purchase of own shares (83) - -
Loan repayment (1,850) - -
Dividends paid - (1,747) (3,844)
Net cash (used in)/generated from financing activities (1,205) 3 656
Net increase/(decrease) in cash and cash equivalents 914 1,151 694
Cash and cash equivalents at the beginning of period* 5,152 4,458 4,458
Cash and cash equivalents at the end of period* 6,066 5,609 5,152
* Of this balance £4,000 (30 June 2023: £4,000, 31 December 2023:
£954,000) 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 2024
1. Basis of preparation of interim financial statements
The results for the year ended 31 December 2023 have been audited whilst the
results for the six months ended 30 June 2023 and 30 June 2024 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 2023
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 include 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 2024. 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 2024 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
2024 2023 2023
£'000 £'000 £'000
Unaudited Unaudited Audited
Current period UK corporation tax (490) (128) (41)
Prior period UK corporation tax - - (196)
(490) (128) (237)
Current period deferred tax expense (631) (1,610) (839)
Income tax expense for the period (1,121) (1,738) (1,076)
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
2024 2023 2023
£'000 £'000 £'000
Unaudited Unaudited Audited
Interim dividend for the year ended 31 December 2023 of 6p per share
- - 1,048
Final dividend for the year ended 31 December 2023 of 6p per share (2022 - 6p)
1,048* 1,048* 1,048
Special dividend for the year ended 31 December 2023 of 10p per share
- 1,747 1,748
1,048 2,795 3,844
The final dividend of 6p per share for the year ended 31 December 2023 (and
2022) was not paid during the period to 30 June 2024 but declared and approved
at the AGM held in June 2024 (being accrued in these accounts) and was paid on
17 July 2024 (19 July 2023).
*Accrued at June 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 £3,351,000 (30 June 2023 - £7,049,000 and 31
December 2023 - £4,423,000).
The basic earnings per share is based on the weighted average of the ordinary
shares in existence throughout the period, being 17,456,929 to 30 June 2024
(17,471,929 to 31 December 2023 and 17,471,929 to 30 June 2023). There are
no potential shares in existence for any period and therefore diluted and
basic earnings per share are equal.
Panther Securities PLC owns 305,000 ordinary shares in the Company which are
currently held in treasury (31 December 2023 and 30 June 2023 - 275,000).
6. Investment properties
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Unaudited Unaudited Audited
Fair value of investment properties
At 1 January 185,169 176,937 176,937
Additions - 464 3,449
Disposals - - (645)
Fair value adjustment on investment properties held on leases
(26) - (106)
Revaluation increase/ (decrease) - 5,041 5,534
At period end 185,143 182,442 185,169
The Directors undertook the valuation as at 30 June 2024 (for 30 June 2023 and
31 December 2023 both were also Director's valuations, however both were
heavily influenced by an independent valuation by Carter Jonas dated July 2023
- on the majority of the portfolio). For 31 December 2023 guidance was also
received on a number of properties not valued by Carter Jonas and adopted as
Director's valuations at the year end.
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
2024 2023 2023
£'000 £'000 £'000
Bank loans Unaudited Rate Unaudited Rate Audited Rate
Interest is charged as to:
Fixed/ Hedged
HSBC Bank plc* 35,000 5.70% 35,000 7.76% 35,000 6.10%
Santander Bank plc 25,000 4.31% 25,000 4.71% 25,000 4.71%
Unamortised loan arrangement fees (743) (296) (149)
Floating element 3,649 1,500 4,250
HSBC Bank plc - - -
62,906 61,204 64,101
* Fixed rate came into effect on 1 September 2008 and lasts for 30 years.
The rate includes 2.30% margin (2.70% margin prior to 28 March 2024). There
are no breaks and the rate dropped to 3.40% from 5.06% on 1 September 2023.
The end of its term is 31 August 2038. The fixed rate financial derivatives
(swaps) are referenced to SONIA.
Bank loans totalling £60,000,000 (2023 - £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
£55,000,000 term facility and a £13,000,000 revolving facility (with
£4,350,000 undrawn at the period end).
The derivative financial assets and liabilities are designated as held for
trading.
Hedged amount Rate (without margin) Duration of contract remaining 30 June 2024 30 June 2023 31 December 2023
Fair value Fair value Fair value
£'000 years £'000 £'000 £'000
Unaudited Unaudited Audited
Derivative financial asset
Interest rate swap* 35,000 3.400% 14.19 2,156 3,402 347
Interest rate swap 25,000 2.013% 7.42 2,867 4,249 2,158
5,023 7,651 2,505
Movement in derivative financial assets 2,518 3,184 (1,962)
*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 dropped on 1 September 2023 to 3.40% saving the Group circa
£581,000pa in cash flow until the end point of the instrument.
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 assets 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
Liability at 1 January 2023 (3,371)
Debit to equity for the period (15)
Debit to Income Statement for the period (839)
Liability at 1 January 2024 (4,225)
Debit to equity for the period (2)
Debit to Income Statement for the period (631)
Liability at 30 June 2024 (4,858)
Deferred taxation arises in relation to:
Deferred tax
30 June 2024 30 June 2023 31 December 2023
£'000 £'000 £'000
Deferred tax liabilities:
Investment properties (4,028) (3,373) (4,028)
Derivative financial asset (1,256) (1,913) (626)
Fair value of investments 50 (62) 53
Deferred tax assets:
Tax allowances in excess of book value 376 361 376
Derivative financial liability - - -
Net deferred tax liability (4,858) (4,987) (4,225)
As at 30 June 2024 the substantively enacted rate was 25% (also 25% as at 30
June 2023 and 31 December 2023) and this has been used for the deferred tax
calculation.
9. Net asset value per share
30 June 30 June 31 December
2024 2023 2023
Unaudited Unaudited Audited
Basic and diluted 654p 661p 640p
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 and Finance Director
Allenby Capital Limited
+44 (0) 20 3328 5656
(Nominated Adviser and Joint
Broker)
Alex Brearley
Piers Shimwell
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