- Part 2: For the preceding part double click ID:nRSO1213Ia
370 316
6. TAXATION 2017£'000 2016£'000
(a) Analysis of the tax charge for the year:UK Corporation tax at 20% (2016: 20%) 195 180
Overprovision in previous year - (28)
Total current tax charge 195 152
Deferred tax - temporary differences 205 3
Tax charge for the year 401 155
(b) Factors affecting the tax charge for the year: Net Income before taxation 3,198 1,951
Current Year:Corporation tax thereon at 20% (2016 - 20%) 640 390
Expenses not deductible for tax purposes 14 7
Excess of capital allowances over depreciation (2) (3)
Investment gain on fair value not taxable (440) (189)
Investment gain not taxable - (25)
Other timing differences (16) 3
Overprovision in previous year - (28)
Current tax charge 195 155
7. DIVIDENDS 2017£'000 2016£'000
Final dividend paid in year of 8.2p per share(2016: 7.8p per share) 222 212
Interim dividend paid in year of 5.5p per share(2016: 5.0p per share) 149 135
371 347
The Board recommends the payment of a final dividend of 10.25p per share,
which will be recorded in the Financial Statements for the year ending 25th
March 2018.
8. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing Income after Taxation
attributable to Ordinary Shareholders of £2,797,000 (2016: £1,796,000) by the
weighted average number of 2,711,617 (2016: 2,711,617) ordinary shares in
issue during the period excluding shares held as treasury. There are no
instruments in issue that would have the effect of diluting earnings per
share.
9. INVESTMENT PROPERTIES 2017£'000 2016£'000
Investment Properties
Balance at 25th March 2016 25,230 21,780
Additions 2,086 2,739
Disposals - (235)
27,316 24,284
Revaluation Surplus 2,199 946
Balance at 25th March 2017 29,515 25,230
The Company's freehold investment properties are carried at fair value as at
25th March 2017. The fair value of the properties has been calculated by
independent valuers, BNP Paribas Real Estate, on the basis of market value,
defined as:
"The estimated amount for which a property should exchange on the date of
valuation between a willing buyer and a willing seller in an arm's-length
transaction, after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion."
These recurring fair value measurements for non-financial assets use inputs
that are not based on observable market data, and therefore fall within level
3 of the fair value hierarchy.
The significant unobservable market data used is property yields which range
from 5.51% to 9.66%, with an average yield of 7.44% and an average weighted
yield of 6.75% for the portfolio.
There have been no transfers between levels of the fair value hierarchy.
Movements in the fair value are recognised in profit or loss.
A 0.5% increase or decrease in the yield would result in a corresponding
decrease or increase of £1.78 million in the fair value movement through
profit or loss.
10. OTHER PROPERTY, PLANT AND EQUIPMENT
2017£'000 2016£'000
Cost
Balance at 25th March 2016 and 25th March 2017 47 47
Depreciation
Balance at 25th March 2016 47 47
Charge for the Year - -
Balance at 25th March 2017 47 47
Net Book Values at 25th March 2016 and 25th March 2017 - -
11. OPERATING LEASES RECEIVABLE
2017£'000 2016£'000
The following are the future minimum lease payments receivable under non-cancellable operating leases which expire
Not later than one year 2,026 1,696
Between 2 and 5 years 4,061 3,719
Over 5 years 245 654
6,332 6,069
Rental income under operating leases recognised through profit or loss
amounted to £2,028,000 (2016: £1,778,000).
Typically, the properties were let for a term of between 5 and 10 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 generally 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 2017£'0003 2016£'0003
13. ACCOUNTS RECEIVABLE Trade receivables 2017£'000451 2016£'000316
Other receivables 4 3
455 319
Trade receivables include an allowance for bad debts of £nil (2016: nil).
Trade receivables of £10,000 (2016: £13,000) are considered past due but not
impaired.
14. ACCOUNTS PAYABLE Trade payables 2017£'0007 2016£'00024
Other creditors 134 129
Accruals and deferred income 898 788
1,039 941
15. BANK LOANS PAYABLE Non-current position 2017£'00011,340 2016£'00010,000
Less: deferred finance costs - (28)
11,340 9,972
In December 2016, a new five year facility comprising both a Fixed Rate
Facility and a Revolving Credit Facility was entered into providing a total
credit facility of £11.34 million. Interest was charged at 3.35% per annum
over LIBOR for the Fixed Rate Facility of £10million and 2.49% over 3 month
LIBOR for the Revolving Credit Facility of £1.34million.
The loan is repayable in one instalment on 18 December 2021. 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.
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
£29,515,000 (2016: £25,230,000). The undrawn element of the borrowing facility
available at 25th March 2017 was £nil (2016: nil).
16. DEFERRED TAX
A deferred tax liability of £209,000 has been recognised in respect of the
investment properties (2016: £3,000).
17. SHARE CAPITAL Authorised 2017£'000 2016£'000
8,000,000 Ordinary Shares of 25p each: 2,000 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 2017 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 2017 and
2016, 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 2017 was £1,075,000
(2016: £1,383,000).
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.
Liquidity Risk
The Company seeks to manage liquidity risk to ensure sufficient funds are
available to meet the requirements of the business and to invest cash assets
safely and profitably. The Board reviews available cash to ensure there are
sufficient resources for working capital requirements.
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) 2017£'0007 2016£'00050 2017£'000(7) 2016£'000(50)
Impact on interest receivable - (loss)/gain (5) (7) 5 7
Total impact on pre tax profit and equity 2 43 (2) (43)
The net exposure of the Company to interest rate fluctuations was as follows: 2017 2016
Floating rate borrowings (bank loans) £'000(1,340) £'000(10,000)
Less: cash and cash equivalents 1,075 1,383
(265) (8,617)
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.
2017Book Value 2017Fair Value 2016Book Value 2016Fair Value
Interest bearing borrowings (note 15) £'000 (11,340) £'000 (11,340) £'000(9,972) £'000(9,998)
Total (11,340) (11,340) (9,972) (9,998)
Categories of Financial Instruments 2017 2016
£'000 £'000
Financial assets:Quoted investments 3 3
Loans and receivables 455 319
Cash and cash equivalents 1,075 1,383
Total financial assets 1,533 1,705
Non-financial assets 29,515 25,230
Total assets 31,048 26,935
Financial liabilities at amortised cost 12,574 11,096
Total liabilities 12,783 11,096
Shareholders' equity 18,265 15,839
Total shareholders' equity and liabilities 31,048 26,935
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.
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%.
2017£'000 2016£'000
Net borrowings and overdraft 11,340 9,972
Cash and cash equivalents (1,075) (1,383)
Net borrowings 10,265 8,589
Shareholders' equity 18,265 15,839
Investment properties 29,515 25,230
Loan to value ratio 34.8% 34.0%
Net gearing ratio 56.2% 54.2%
19. COMMITMENTS UNDER OPERATING LEASES
Future rental commitments at 25th March 2017 under non-cancellable operating
leases are as follows:-
Within one year 2017£'00028 2016£'00024
Between two to five years 28 28
56 52
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
£43,697 (2016: £41,617). 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 10.
21. SEGMENTAL REPORTING
Industrial Retail Office Total
2017 2016 2017 2016 2017 2016 2017 2016
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Rental Income 1,298 1,253 465 245 335 280 2,028 1,778
Profit/(loss) on property investments at fair value 1,145 773 24 15 1,030 158 2,199 946
Total income and gain/(loss) 2,443 2,027 489 260 1,295 437 4,227 2,724
Property expenses (131) (122) - - - - (131) (122)
Segment profit/(loss) 2,312 1,905 489 260 1,295 437 4,096 2,602
Unallocated corporate expenses (528) (462)
Profit on sale of investment property - - - 127 - - - 127
Operating income 3,568 2,267
Interest expense (all relating to property loans) (373) (320)
Interest income and other income 3 4
Income before taxation 3,198 1,951
Other information Industrial Retail Office Total
2017 2016 2017 2016 2017 2016 2017 2016
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Segment assets 18,483 16,117 5,915 5,025 5,118 4,088 29,515 25,230
Segment assets held 18,483 16,117 5,915 5,025 5,118 4,088 29,515 25,230
as security
WYNNSTAY PROPERTIES PLC
FIVE YEAR FINANCIAL REVIEW
IFRS
Years Ended 25th March: 2017 2016 2015 2014 2013
£'000 £'000 £'000 £'000 £'000
STATEMENT OF COMPREHENSIVE INCOME
Property Income 2,028 1,778 1,663 1,609 1,628
Profit before movement in fair value of investment properties and taxation 999 878 899 1,011 1,103
Income before Taxation 3,198 1,951 2,429 1,181 166
Income/(Loss) after Taxation 2,797 1,796 2,219 946 (193)
STATEMENT OF FINANCIAL POSITION
Investment Properties 29,515 25,230 21,780 18,515 17,700
Equity Shareholders' Funds 18,265 15,839 14,390 12,499 11,873
PER SHARE
Basic earnings 103.1p 66.2p 81.8p 34.9p (7.1p)
Dividends paid and proposed 15.75p 13.2p 12.3p 11.8p 10.8p
Net Asset Value 674p 584p 531p 461p 438p
This information is provided by RNS
The company news service from the London Stock Exchange