REG - Wynnstay Properties - Final Results <Origin Href="QuoteRef">WSP.L</Origin> - Part 2
14/06/2016 07:05
- Part 2: For the preceding part double click ID:nRSN0640Ba
loss.
A 0.5% increase or decrease in the yield would result in a corresponding
decrease or increase of £0.89 million in the fair value movement through
profit or loss.
10. OTHER PROPERTY, PLANT AND EQUIPMENT
2016 £'000 2015£'000
CostBalance at 25th March 2015 and 25th March 2016 47 47
Depreciation
Balance at 25th March 2015 47 47
Charge for the Year - -
Balance at 25th March 2016 47 47
Net Book Values at 25th March 2015 - -
and 25th March 2016
11. OPERATING LEASES RECEIVABLE
2016 2015
The following are the future minimum lease payments receivable under non-cancellable operating leases which expire: £'000 £'000
Not later than one year 1,696 1,422
Between 2 and 5 years 3,719 2,973
Over 5 years 654 997
6,069 5,392
Rental income under operating leases recognised in the profit or loss amounted
to £1,778,000 (2015: £1,663,000).
Typically, the properties were let for a term of between 5 and 15 years at a
market rent with rent reviews every 5 years. The above maturity analysis
reflects future minimum lease payments receivable to the next break clause in
the operating lease. The properties are leased on terms where the tenant has
the responsibility for repairs and running costs for each individual unit with
a service charge payable to cover common services provided by the landlord on
certain properties.
12. INVESTMENTS Quoted investments 2016£'0003 2015£'0003
13. ACCOUNTS RECEIVABLE Trade receivables 2016£'000 316 2015£'000486
Other receivables 3 3
319 489
Trade receivables include an allowance for bad debts of £nil (2015: £28,000).
Trade receivables of
£13,000 (2015: £22,600) are considered past due but not impaired.
14. ACCOUNTS PAYABLE 2016 2015
£'000 £'000
Trade payables 24 7
Other creditors 129 107
Accruals and deferred income 788 972
941 1,086
15. BANK LOANS PAYABLE 2016 2015
£'000 £'000
Non-current position 10,000 7,658
Less: deferred finance costs (28) (37)
9,972 7,621
In December 2013, the bank loan was re-financed providing a credit facility of
up to £10 million. Interest was charged at 2.65% per annum over LIBOR for the
refinanced facility.
The loan is repayable in one instalment on 18 December 2018. The bank loan
includes the following financial covenants:
• Rental income shall not be less than 2.25 times the interest costs
• The bank loan shall at no time exceed 50% of the market value of the
properties secured.
15. BANK LOANS PAYABLE (Continued)
The borrowing facility is secured by fixed charges over the freehold land and
buildings owned by the Company, which at the year end had a combined value of
£25,230,000 (2015: £21,780,000). The undrawn element of the borrowing facility
available at 25th March 2016 was £nil (2015: £2.3million). A commitment fee of
1% per annum was payable on the undrawn amount.
16. DEFERRED TAX
A deferred tax liability of £3,000 has been recognised in respect of the
investment property (2015: Deferred tax asset of £44,000 was not recognised as
it was not considered to be recoverable).
17. SHARE CAPITAL Authorised8,000,000 Ordinary Shares of 25p each: 2016£'000 2,000 2015£'000 2,000
Allotted, Called Up and Fully Paid
3,155,267 Ordinary shares of 25p each 789 789
All shares rank equally in respect of Shareholder rights.
In March 2010, the company acquired 443,650 Ordinary shares of Wynnstay
Properties Plc from Channel Hotels and Properties Ltd at a price of £3.50 per
share. These shares, representing in excess of 14% of the total shares in
issue, are held in Treasury.
18. FINANCIAL INSTRUMENTS
The objective of the Company's policies is to manage the Company's financial
risk, secure cost effective funding for the Company's operations and minimise
the adverse effects of fluctuations in the financial markets on the value of
the Company's financial assets and liabilities, on reported profitability and
on the cash flows of the Company.
At 25th March 2016 the Company's financial instruments comprised borrowings,
cash and cash equivalents, short term receivables and short term payables. The
main purpose of these financial instruments was to raise finance for the
Company's operations. Throughout the period under review, the Company has not
traded in any other financial instruments. The Board reviews and agrees
policies for managing each of these risks and they are summarised below:
Credit Risk
The risk of financial loss due to a counterparty's failure to honour its
obligations arises principally in connection with property leases and the
investment of surplus cash.
Tenant rent payments are monitored regularly and appropriate action is taken
to recover monies owed or, if necessary, to terminate the lease. Funds are
invested and loan transactions contracted only with banks and financial
institutions with a high credit rating.
The Company has no significant concentration of credit risk associated with
trading counterparties (considered to be over 5% of net assets) with exposure
spread over a large number of tenancies.
Concentration of credit risk exists to the extent that at 25th March 2016 and
2015, current account and short term deposits were held with two financial
institutions, Svenska Handelsbanken AB and C Hoare & Co. Maximum exposure to
credit risk on cash and cash equivalents at 25th March 2016 was £1,383,000
(2015: £1,050,000).
Currency Risk
As all of the Company's assets and liabilities are denominated in Pounds
Sterling, there is no exposure to currency risk.
Interest Rate Risk
The Company is exposed to cash flow interest rate risk as it currently borrows
at floating interest rates. The Company monitors and manages its interest rate
exposure on a periodic basis but does not take out financial instruments to
mitigate the risk. The Company finances its operations through a combination
of retained profits and bank borrowings.
18. FINANCIAL INSTRUMENTS (Continued)
Interest Rate Sensitivity
Financial instruments affected by interest rate risk include loan borrowings
and cash deposits. The analysis below shows the sensitivity of the statement
of comprehensive income and equity to a 0.5% change in interest rates:
0.5% decrease in interest rates 0.5% increase in interest rates
Impact on interest payable - gain/(loss) 2016£'00050 2015£'00038 2016£'000 (50) 2015£'000(38)
Impact on interest receivable - (loss)/gain (7) (6) 7 6
Total impact on pre tax profit and equity 43 32 (43) (32)
The net exposure of the Company to interest rate fluctuations was as follows: 2016 2015
Floating rate borrowings (bank loans) £'000 (10,000) £'000(7,658)
Less: cash and cash equivalents 1,383 1,050
(8,617) (6,608)
Fair Value of Financial Instruments
Except as detailed in the following table, management consider the carrying
amounts of financial assets and financial liabilities recognised at amortised
cost approximate to their fair value.
2016Book Value£'000 2016Fair Value£'000 2015Book Value£'000 2015Fair Value£'000
Interest bearing borrowings (note 15) (9,972) (9,998) (7,621) (7,672)
Total (9,972) (9,998) (7,621) (7,672)
18. FINANCIAL INSTRUMENTS (Continued)
Categories of Financial Instruments
2016 2015
£'000 £'000
Financial assets:
Quoted investments 3 3
Loans and receivables 319 489
Cash and cash equivalents 1,383 1,050
Total financial assets 1,705 1,542
Non-financial assets 25,230 21,780
Total assets 26,935 23,322
Financial liabilities at amortised cost 11,096 8,932
Total liabilities 11,096 8,932
Shareholders' equity 15,839 14,390
Total shareholders' equity and liabilities 26,935 23,322
The only financial instruments measured subsequent to initial recognition at
fair value as at 25th March are quoted investments. These are included in
level 1 in the IFRS 7 hierarchy as they are based on quoted prices in active
markets.
18. FINANCIAL INSTRUMENTS (Continued)
Capital Management
The primary objectives of the Company's capital management are:
• to safeguard the Company's ability to continue as a going concern, so
that it can continue to provide returns for shareholders: and
• to enable the Company to respond quickly to changes in market conditions
and to take advantage of opportunities.
Capital comprises Shareholders' equity plus net borrowings. The Company
monitors capital using loan to value and gearing ratios. The former is
calculated by reference to total net debt as a percentage of the year end
valuation of the investment property portfolio. Gearing ratio is the
percentage of net borrowings divided by Shareholders' equity. Net borrowings
comprise total borrowings less cash and cash equivalents.
The Company's policy is that the loan to value ratio should not exceed 50% and
the gearing ratio should not exceed 100%.
Net borrowings and overdraft 2016£'000 9,972 2015£'0007,621
Cash and cash equivalents (1,383) (1,050)
Net borrowings 8,589 6,571
Shareholders' equity 15,839 14,390
Investment properties 25,230 21,780
Loan to value ratio 34.0% 30.2%
Net gearing ratio 54.2% 45.7%
19. COMMITMENTS UNDER OPERATING LEASES
Future rental commitments at 25th March 2016 under non-cancellable operating
leases are as follows:-
Within one year 2016£'00024 2015£'00020
Between two to five years 28 3
52 23
20. RELATED PARTY TRANSACTIONS
The Company has entered into an agreement with T.J.C.P. Consultants Ltd, a
company owned and controlled by T.J.C. Parker which during the year was paid
£41,617 (2015: £40,404). There were no other related party transactions other
than with the Directors, which have been disclosed under Directors' Emoluments
in the Directors' Report on page 8.
21. EVENTS AFTER THE END OF THE REPORTING PERIOD
In early June, the Company exchanged contracts to purchase four adjoining
trade counter and industrial units in Lichfield, with completion due in the
near future. The acquisition price of £1.95million will be funded from an
additional facility of £1.34million from the Company's bank with the remainder
from cash resources.
22. SEGMENTAL REPORTING
Industrial Retail Office
Total
Rental Income 2016£'000 1,253 2015£'0001,015 2016£'000 245 2015£'000351 2016£'000 280 2015£'000297 2016£'000 1,778 2015£'0001,663
Profit/(loss) on property investments at fair value 773 1,142 15 210 158 178 946 1,530
Total income and gain/(loss) 2,027 2,157 260 561 437 475 2,724 3,193
Property expenses (122) (87) - - - - (122) (87)
Segment profit/(loss) 1,905 2,070 260 561 437 475 2,602 3,106
Unallocated corporate expenses (462) (414)
Profit on sale of investment property - - 127 - - - 127 -
Operating income 2,267 2,692
Interest expense (all relating to property loans) (320) (265)
Interest income and other income 4 2
Income before taxation 1,951 2,429
Other information Industrial
Retail Office Total
2016£'000 2015£'000 2016£'000 2015£'000 2016£'000 2015£'000 2016£'000 2015£'000
Segment assets 16,117 12,605 5,025 5,245 4,088 3,930 25,230 21,780
Segment assets held 16,117 12,605 5,025 5,245 4,088 3,930 25,230 21,780
as security
WYNNSTAY PROPERTIES PLCFIVE YEAR FINANCIAL REVIEW
IFRS
Years Ended 25th March: 2016£'000 2015£'000 2014£'000 2013£'000 2012£'000
STATEMENT OF COMPREHENSIVE INCOME
Property Income 1,778 1,663 1,609 1,628 1503
Profit before movement in fair value of investment properties and taxation 878 899 1,011 1,103 1,157
Income before Taxation 1,951 2,429 1,181 166 292
Income/(Loss) after Taxation 1,796 2,219 946 (193) 117
STATEMENT OF FINANCIAL POSITION
Investment Properties 25,230 21,780 18,515 17,700 19,289
Equity Shareholders' Funds 15,839 14,390 12,499 11,873 12,359
PER SHARE
Basic earnings 66.2p 81.8p 34.9p (7.1p) 4.3p
Dividends paid and proposed 13.2p 12.3p 11.8p 10.8p 10.5p
Net Asset Value 584p 531p 461p 438p 456p
This information is provided by RNS
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