REG - Wynnstay Properties - Interim Results for six months ended 29 Sept 2022
09/11/2022 07:01
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RNS Number : 7291F Wynnstay Properties PLC 09 November 2022
The information communicated within this announcement is deemed to constitute
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WYNNSTAY PROPERTIES PLC
("Wynnstay" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 29 SEPTEMBER 2022
9 November 2022
CHAIRMAN'S STATEMENT
Against the background of serious international and domestic events, economic
uncertainties and turmoil in financial markets, I am pleased to report that
Wynnstay has continued to perform well for shareholders over the six-month
period ending 29 September 2022.
Interim Financial Results
The unaudited results are summarised in the table below and should be read in
conjunction with the following commentary and financial statements:
29 September 29 September
2022 2021
Rental Income -0.2% £1,082,000 £1,084,000
Property Income -4.3% £1,082,000 £1,131,000
Operating Income -4.6% £800,000 £839,000
Income before Taxation -9.7% £587,000 £650,000
Earnings per share -11.3% 17.2p 19.4p
Net Asset Value per share +19.1% 1,093p 918p
Interim Dividend per share +5.9% 9.0p 8.5p
While rental income for the half-year was broadly static, decreasing by just
0.2% compared to the same period last year, at £1,082,000 (2021:
£1,084,000), that total reflects significant changes within the portfolio.
These include the loss of income following the sale towards the end of the
last financial year of our office property in Surbiton, offset by new income
arising from the successful completion and letting of our three units at
Petersfield Trade Park 2 late last calendar year and increased income from a
number of successful rent reviews, lease renewals and new lettings within the
portfolio mentioned in last year's Annual Report as well as those completed in
the first half of this financial year which are mentioned below.
No other property income, such as tenant payments for dilapidations, was
received in the half-year (2021: £47,000). As a consequence, and with overall
operating costs being at a similar level to the same period last year,
operating income decreased by 4.6% to £800,000 (2021: £839,000).
In my statement in July, I reported that we had collected all of the rental
income due for the first quarter of the financial year. I am pleased to report
that we have collected 99% of the rental income due for the second quarter and
over 93% of the quarterly and monthly rental income due to date for the
third quarter commencing 29 September 2022.
Borrowings from Handelsbanken of £9.945 million at the end of the half-year
(2021: £10.0 million) reflect our new refinanced five-year loan at a fixed
rate of 3.61% from December 2021. At the end of the half-year, we held cash
balances of £3.2 million available for use in the business. In addition, we
have available the undrawn £5m revolving credit facility with Handelsbanken.
Portfolio
The portfolio was fully let at the end of the half-year, which is consistent
with our past record of high occupancy and low voids. Stability within our
tenant base and fewer rent reviews and lease renewals has resulted in rather
less management activity compared to the same period last year. However, as
already indicated, the results of the activity to date have been beneficial in
generating increased rental income and in establishing comparable evidence to
support future negotiations and valuations.
For instance, at Quarry Wood Industrial Estate, Aylesford, we completed the
rent review with our longstanding public authority tenant of one of the larger
units on the estate resulting in a significantly increased rent.
At our office premises at Cosham, the lease to our government tenant was
varied by mutual agreement to remove a tenant break option that could have
been implemented in April 2023. At the same time we pre-agreed the April 2023
rent review at the existing rent, which reflected the current estimated rental
value adopted by our valuers, thereby securing our rental income from the
property for a further five years.
Lease renewals have also been successfully completed on two units at Hailsham,
one unit at Ipswich, two units at Lichfield, two units at Petersfield Business
Park and one unit at Uckfield. On the Beaver Industrial Estate at Liphook, a
vacated unit was immediately relet to a new tenant at a rent that was
significantly higher than that paid by the previous tenant and which should
therefore establish a new rental level for the other units on the estate.
In the majority of cases, it is encouraging to report that the rents achieved
were above, and in some cases significantly above, the estimated rental values
adopted by our valuers in their latest valuation in March 2022.
Dividend
In light of the financial results, the Board has decided to pay an increased
interim dividend of 9.0p per share (2021: 8.5p) on 16 December 2022 to those
shareholders on the register at the close of business on 18 November 2022.
In the current inflationary conditions, the Board appreciates the importance
to many shareholders of their investment income and of providing an attractive
yield on the Company's shares. The increase in the interim dividend for this
half-year is 5.9% compared to the same period last year.
Annual General Meeting 2022
At our first fully open Annual General Meeting for three years due to the
impact of Covid-19, attendance was nevertheless restricted due to the weather
conditions, including a record high temperature in Central London. A number of
shareholders who had indicated their intention to attend the meeting
nevertheless decided not to do so on the day due to the heatwave.
I would like to thank all those shareholders who took the trouble to complete
their proxy forms. All the resolutions before the meeting were duly passed.
Share buy-back
Following the Annual General Meeting, a General Meeting was held to consider
two resolutions to authorise the Company to make market purchases of its own
shares. Both resolutions were duly passed.
Following the granting of this authority, the Company purchased 15,000
Ordinary Shares at a price of 710p per share at the beginning of September
2022.
The Directors continue to monitor the availability of shares in the market
through the Company's brokers and should further opportunities arise may
exercise the authority to make further market purchases of its own shares at
an appropriate price where this is in the best interests of shareholders
generally.
Outlook
When I reported to you in the middle of June, I noted that the UK had entered
a further period of uncertainty following the difficulties resulting from
Brexit, Covid-19 and the ongoing war in Ukraine.
Since then, we have witnessed unexpected political events at home, forecasts
of significantly reduced growth or serious recession for the UK economy and
other world economies, high inflation for businesses and consumers, especially
in the cost of energy, as well as turmoil in financial markets.
Shareholders may have read commentary in the press about the potential impact
of these events and forecasts on the UK commercial property market and on the
ability of businesses to survive.
As in the financial crisis of 2008-10 and the Covid-19 crisis of 2020-22, we
continue to monitor the portfolio and will work closely with our tenants in
these extremely challenging times. In the previous crises we saw how small
business tenants, who are most likely to be adversely affected, demonstrated
their ability to adapt to conditions. In the portfolio we have a broad spread
of tenants, many of whom are longstanding, across different business sectors
in areas of the country where there is a record of strong occupational demand
and limited supply.
We remain well placed with our principal borrowing being at a fixed rate, our
low loan-to-value ratio and with both cash and a further borrowing facility
available to acquire any suitable properties which may come to the market
unexpectedly as a result of the current conditions.
Finally, despite the gloom and uncertainties arising from recent events, I
would like to convey to all shareholders and their families the Board's best
wishes for a Happy Christmas and for good health and happiness in 2023.
Philip Collins
Chairman
9 November 2022
1. STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months ended
Six months ended
Year ended
29 September 29 September 25 March
2022
2021
£'000
£'000 2022
£'000
Property Income 1,082 1,131 2,308
Property Costs (24) (25) (125)
Administrative Costs (258) (267) (614)
Net Property Income 800 839 1,569
Movement in fair value of
Investment Properties - - 5,887
Profit on Sale of Investment Property - - 125
Operating Income 800 839 7,581
Investment Income 5 - -
Finance Costs (218) (189) (379)
Income before Taxation 587 650 7,202
Taxation (121) (123) (1,784)
Income after Taxation 466 527 5,418
Basic and diluted earnings per share 17.2p 19.4p 199.8p
The company has no other items of comprehensive income.
2. STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
Six months ended
Six months ended
Year ended
29 September 29 September 25 March
2022
2021
£'000
£'000 2022
£'000
Non-Current Assets
Investment Properties 38,975 34,871 38,975
Investments 3 3 3
38,978 34,874 38,978
Current Assets
Accounts Receivable 362 262 301
Cash and Cash Equivalents 3,207 1,586 3,491
3,569 1,848 3,792
Current Liabilities
Trade and other payables (766) (1,001) (1,048)
Income Taxes Payable (404) (374) (284)
Bank Loans Payable - (10,000) -
(1,170) (11,375) (1,332)
Net Current Assets / (Liabilities) 2,399 (9,527) 2,460
Total Assets less Current Liabilities 41,377 25,347 41,438
Less Current
LLiabilities
Non-Current Liabilities
Bank Loans Payable (9,945) - (9,938)
Deferred Tax Payable (1,962) (461) (1,953)
(11,907) (461) 11,891)
)
Net Assets 29,470 24,886 29,547
Capital and Reserves
Share Capital 789 789 789
Capital Redemption Reserve 205 205 205
Share Premium Account 1,135 1,135 1,135
Treasury Shares (1,733) (1,570) (1,570)
Retained Earnings 29,074 24,327 28,988
29,470 24,886 29,547
Net Asset Value pence per share 1,093p 918p 1,090p
3. STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
Six months ended
Six months ended
Year ended
29 September 29 September 25 March
2022
2021
£'000
£'000 2022
£'000
Cash flows from operating activities
Income before taxation 587 650 7,202
Adjusted for:
(Increase) in fair value of investment properties - (866) (5,887)
Interest received (5) - -
Interest paid 218 189 379
Profit on disposal of investment properties - - (125)
Changes in:
(Increase) / decrease in trade and other receivables (61) 80 41
(Decrease) / increase in trade and other payables (162) 197 153
Cash generated from operations 577 250 1,763
Income taxes paid (111) (123) (284)
Net cash from operating activities 466 127 1,479
Cash flows from investing activities
Interest and other income received 5 - -
Purchase of investment properties - - (1,583)
Sale of investment properties - - 2,618
Net cash generated from investing activities 5 -- 1,035
Cash flows from financing activities
Interest paid (218) (189) (379)
Dividends paid (380) (353) (583)
Drawdown on bank loans 6 - 9,938
Treasury Shares buy-back costs (163) - -
Repayment of bank loans - - (10,000)
Net cash used in financing activities (755) (542) (1,024)
(Decrease) / increase in cash and cash equivalents (284) (415) 1,490
Cash and cash equivalents at beginning of period 3,491 2,001 2,001
Cash and cash equivalents at end of period 3,207 1,586 3,491
4. STATEMENT OF CHANGES IN EQUITY
UNAUDITED SIX MONTHS ENDED 29 SEPTEMBER 2022
Share Capital Capital Redemption Reserve Share Premium Account Treasury Shares Retained Earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 26 March 2022 789 205 1,135 (1,570) 28,988 29,547
Total comprehensive income for the period - - - - 466 466
Changes in Treasury Shares - - - (163) - (163)
Dividends - - - - (380) (380)
Balance at 29 September 2022 789 205 1,135 (1,733) 29,074 29,470
UNAUDITED SIX MONTHS ENDED 29 SEPTEMBER 2021
Share Capital Capital Redemption Reserve Share Premium Account Treasury Shares Retained Earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 26 March 2021 789 205 1,135 (1,570) 24,153 24,712
Total comprehensive income for the period - - - - 527 527
Dividends - - - - (353) (353)
Balance at 29 September 2021 789 205 1,135 (1,570) 24,327 24,886
AUDITED YEAR ENDED 25 MARCH 2022
Share Capital Capital Redemption Reserve Share Premium Account Treasury Shares Retained Earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 26 March 2021 789 205 1,135 (1,570) 24,153 24,712
Total comprehensive income for the year - - - - 5,418 5,418
Dividends - - - - (583) (583)
Balance at 25 March 2022 789 205 1,135 (1,570) 28,988 29,547
5. ACCOUNTING POLICIES
Wynnstay Properties PLC is a public limited company incorporated and domiciled
in England and Wales (registered no: 22473). The principal activity of the
company is property investment, development and management. The Company's
ordinary shares are traded on AIM, part of the London Stock Exchange (ISIN:
GB0009842898).
Basis of preparation
These unaudited condensed interim financial statements have been prepared in
accordance with International Financial Reporting Standard ("IFRS") IAS 34
Interim Financial Reporting. They do not constitute statutory accounts within
the meaning of section 435 of the Companies Act 2006.
The unaudited condensed interim financial statements should be read in
conjunction with the financial statements of the Company as at and for the
year ended 25 March 2022 which were prepared in accordance with IFRS. The
financial information for the six month periods ended 29 September 2022 and 29
September 2021 have not been audited and the auditors have not reported on or
reviewed these interim financial statements. The information for the year
ended 25 March 2022 has been extracted from the latest published audited
financial statements.
Key sources of estimation uncertainty and judgements
The preparation of the financial statements requires management to make
judgements, estimates and assumptions that may affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expenses.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period. The key sources
of estimation uncertainty that have a significant risk of causing material
adjustment to the carrying amounts of assets and liabilities within the next
financial year are those relating to the fair value of investment properties.
Investment properties
All the Company's investment properties are independently revalued annually
and stated at fair value at 25 March. The aggregate of any resulting increases
or decreases are taken to operating income within the Statement of
Comprehensive Income. Investment properties are recognised as acquisitions or
disposals based on the date of contract completion. Values of investment
properties undergoing development or improvements are stated at cost until
practical completion.
Depreciation
In accordance with IAS 40, freehold investment properties are included in the
Statement of Financial Position at fair value and are not depreciated. The
Company has no other plant and equipment.
Disposal of investments
The gains and losses on the disposal of investment properties and other
investments are included in the Statement of Comprehensive Income in the year
of disposal.
Property income
Property income is recognised on a straight-line basis over the period of the
lease and is measured at the fair value of the consideration receivable. Lease
deposits are held in separate designated deposit accounts and are thus not
treated as assets of the Company in the financial statements. All income is
derived in the United Kingdom. Other property income includes dilapidations,
lease surrender premiums and other property related receipts.
Unaudited Unaudited Audited
Six months ended
Six months ended
Year ended
29 September 29 September 25 March
2022
2021
£'000
£'000 2022
£'000
Rental income 1,082 1,084 2,252
Other property income - 47 56
1,082 1,131 2,308
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax. Current tax is the expected tax payable on the taxable income for the
period based on the tax rate enacted or substantively enacted at the reporting
date, and any adjustment to tax payable in respect of prior years. Taxable
profit differs from income before tax because it excludes items of income or
expense that are deductible in other years, and it further excludes items that
are never taxable or deductible.
Deferred taxation is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation
of taxable profits; and is accounted for using the statement of financial
position liability method. Deferred tax liabilities are recognised for all
taxable temporary differences (including unrealised gains on revaluation of
investment properties) and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised.
The Company provides for deferred tax on investment properties by reference to
the tax that would be due on the sale of the investment properties. Deferred
tax is calculated at the rates that are expected to apply in the period when
the liability is settled, or the asset is realised. Deferred tax is charged or
credited to Income after Taxation, including deferred tax on the revaluation
of investment properties.
Trade and other accounts receivable
Trade and other receivables are initially measured at fair value and
subsequently measured at amortised cost as reduced by appropriate allowances
for expected credit losses. All receivables do not carry any interest and are
short term in nature.
Cash and cash equivalents
Cash comprises cash at bank and on demand deposits. Cash equivalents are short
term (less than three months from inception), repayable on demand and are
subject to an insignificant risk of change in value.
Trade and other accounts payable
Trade and other payables are initially measured at fair value and subsequently
measured at amortised cost. All trade and other accounts payable are
non-interest bearing.
Comparative information
The information for the year ended 25 March 2022 has been extracted from the
latest published audited financial statements.
Pensions
Pension contributions towards an employee's pension plan are charged to the
Statement of Comprehensive Income as incurred. The pension plan is a defined
contribution scheme.
Borrowings
Interest rate borrowings are recognised at fair value, being proceeds received
less any directly attributable transaction costs. Borrowings are subsequently
stated at amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in profit or loss
over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Company has an
unconditional right to defer settlement of the liability for at least 12
months after the reporting date.
Dilapidations
Dilapidations receipts are recognised in the Statement of Comprehensive Income
when the right to receive them arises. They are recorded in revenue as other
property income unless a property has been agreed to be sold whereby the
receipt is treated as part of the proceeds of sale of the property.
Share Buy-Back and Treasury Shares
During the period the Company acquired 15,000 Ordinary Shares (2021: nil)
under the authority to make market purchases of its shares approved at the
General Meeting on 19 July 2022. The shares acquired are held in treasury and
all the costs directly associated with the share buy-back are included within
Treasury Shares in the Statement of Financial Position.
6. DIVIDENDS
Period Payment Per share (pence) Amount paid/proposed
Date £'000
6 months to 29 September 2022 16 December 2022 9.0 244
6 months to 29 September 2021 17 December 2021 8.5 230
Year ended 25 March 2022 27 July 2022 14.0 380
7. EARNINGS PER SHARE AND NET ASSET VALUE PER SHARE
Basic earnings per share are calculated by dividing income after taxation
attributable to Ordinary Shareholders of £466,000 (2021: £527,000) by the
weighted average number of 2,709,692 (2021: 2,711,617) Ordinary Shares in
issue during the period excluding shares held in treasury. Net Asset value per
share is calculated by dividing net assets of £29,470,000 (2021:
£24,886,000) by the number of 2,711,617 Ordinary Shares in issue at the
reporting date excluding shares held in treasury. There are no options
and no instruments in issue that would have the effect of diluting earnings
per share.
For further information please contact:
Wynnstay Properties plc
Philip Collins (Chairman)
020 7554 8766
WH Ireland Limited (Nominated Adviser and Broker):
Chris Hardie, Ben Thorne, Megan Liddell
020 7220 1666
LEI number: 2138006MASI24JYW5076
For more information on Wynnstay visit: www.wynnstayproperties.co.uk
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