REG - Wynnstay Properties - Interim Results <Origin Href="QuoteRef">WSP.L</Origin>

Wynnstay PropertiesAnnouncement

19/11/2015 07:01

RNS Number : 2242G
Wynnstay Properties PLC
19 November 2015
WYNNSTAY PROPERTIESPLC
INTERIMREPORT
SIX MONTHS ENDED 29TH SEPTEMBER2015

WYNNSTAY PROPERTIESPLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 29TH SEPTEMBER2015
CHAIRMAN'SSTATEMENT
I am delighted to report on your company's performance for the first half of the financial year to 29th September 2015,whichcanbesummarisedasfollows:

2015
2014
Operatingincome
(2.0)%
555,000
562,000
Income beforeTaxation
(7.1)%
405,000
436,000
Earnings pershare
(7.1)%
11.8p
12.7p
Net Asset value pershare
14.8%
535p
466p
Interim Dividend pershare
11.1%
5.0p
4.5p
Property income for the half-year increased over the same period last year to 860,000 (2014 - 808,000), reflecting the contribution from the recent acquisitions as well as rent increases from recently relet units. Operating incomeat
555,000 (2014 - 562,000), and pre-tax profit of 405,000 (2013 - 436,000) were slightly lower, compared to the same period last year, largely due to the costs incurred on our recent acquisitions and in upgrading certain vacant propertieswithintheportfolio.Thebenefitsofthisexpenditureshouldflowthroughtorentalincome,profitandasset valuelaterthisfinancialyearandinthefuture.
The significant focus of the management and the Board over the past six months has been on the completion of the acquisitionoftheBeaverIndustrialEstate,LiphookinHampshireandontherefurbishmentandmarketingofthetwo vacantunitsatChessington,bothofwhichImentionedinmystatementaccompanyinglastyear'sannualreport.
We completed the off-market acquisition of the Liphook estate in late June following a period of negotiation with the privately-owned vendor. It attracted us for a number of reasons. We had been looking for some time to acquire another complete industrial estate with opportunities for active management and improvement similar to our estate at Aylesford and we consider the Beaver Industrial Estate to be a very good fit for us in terms of size, quality, tenant profile and location. The estate is very close to Liphook town centre and adjacent to a substantial new housing development.Itwasconstructedinthe1980'sandcomprises17unitsofvaryingsizes.Atthetimeofpurchaseitwas letto9tenantson12separateleaseswith3unitsbeingvacant.SinceJunewehaveletoneofthevacantunitsandare continuing to market the two other units. The rental income at the time of purchase was just over 172,000 p.a. and isnowalmost186,000p.a.followingtherecentletting,andwithananticipatedrentrollwhenfullyletintheregion of225,000p.a.Asreportedpreviouslythepricepaidwas2,600,000.
As mentioned in my statement at the end of last year the tenant of two of the three units at our estate in Chessington vacated at the year-end in March following the disposal of part of their business. We negotiated a satisfactory cash settlement with them regarding dilapidations and over the spring and summer have carried out an extensive refurbishment funded by the settlement monies received. These works were completed, within budget, by our contractorsattheendofSeptember.Thereisashortageofsmallermixed-useflexiblespaceofthisnatureinthearea following a change in planning policy permitting the conversion of offices to residential use. This means that the remaining commercial space potentially becomes more valuable. The two refurbished units which now present well have been actively marketed over the summer as the works progressed and the level of enquiries and viewings has been encouraging. We have recently entered into negotiations with a potential tenant for both units. I hope that we willhaveapositiveoutcomebeforetheyear-endonwhichIcanreporttoyounextJune.
We have also enjoyed a busy period of management activity at our estate at Aylesford. The largest tenant has renewedtheleaseofitsmainpremises,comprisingfourunits,forafurtherfiveyearsto2020,whilstgivingupafifth unit,whichitleasedacoupleofyearsago,thatisnowsurplustoitscurrentrequirements.Thisunitwasimmediately

relet, again for five years, to a new tenant requiring space to operate as a sub-contractor to a larger distribution business located nearby. The one unit at Aylesford that was vacant at the year-end and to which I referred in June has now been relet, again for five years, to another longstanding tenant of the estate who required space to expand its business; and, at the same time, that tenant has also agreed to extend the lease of its existing two units to 2020. Finally, to complete the picture, another unit which became vacant on the departure of the previous tenant has been relet for ten years, at a higher rent than we previously received, to a new tenant. Thus all the units on the Aylesford estatearefullyletandwehavethebenefitofanincreasedrentalincomeforalongerperiod.
Elsewhere in the portfolio, during the first-half of the year we have negotiated new leases, lease extensions or lease variations which should enhance investment value on units at Basingstoke, Colchester, Norwich and St Neots. At the time of writing, we have collected over 99% of the rental income due for the current quarter commencing 29 September2015.
During the second half of the year, we will concentrate on the assimilation of the Liphook estate into the portfolio and on continuing to explore opportunities to add value to the existing portfolio, such as by change of use, by the acquisition of neighbouring land or properties and by further development of existing sites. We continue to seek suitable further acquisitions although, in contrast to recent years, we have not made any firm offers as those propertiesthatwereavailabledidnotmeetourcriteria.
Youwillrecallthatlastyearwewereabletoincreaseboththeinterimandthefinaldividends,withthetotaldividend for the year increasing by 4.2%. The larger proportion of the increase was paid on the interim dividend with a view to aligning further the overall balance between the interim and final payments. In the light of the satisfactory performancereportedabove,IampleasedtosaythattheDirectorshavedecidedtopayanincreasedinterimdividend of 5.00p per share (2014 - 4.5p). The interim dividend will be paid on 18th December 2015 to those Shareholders on the register on 27th November 2015. However, this increase should not be taken as any indication that the final dividendwillalsobeincreased.
Advances in communications and technology bring great benefits. But they also provide opportunities for unscrupulous criminals to seek access to personal information in order to steal an individual's financial assets. There have been several recent cases reported in the press. One form of this fraud is unsolicited telephone approaches to shareholders about their investments in which the caller mentions individual holdings, such as Wynnstay Properties. There is nothing that we can do to deter or stop these approaches and I would urge all shareholders to be vigilant. On Wynnstay's website (www.wynnstayproperties.co.uk), shareholders will also find a warning and a link to other informationaboutunsolicitedapproachesregardingsharesontheFinancialConductAuthority'swebsite.
Our Annual General Meeting next year will again be held at the Royal Automobile Club, 89 Pall Mall, London SW1 on Wednesday 13th July 2016 at 12 noon. I encourage shareholders to make plans to attend the meeting and meet the Board and fellow shareholders. The meeting provides an important forum to learn more about Wynnstay's activities and plans, its performance and its future, formally and informally, as well as to socialise with other shareholders. We benefit consistently from high levels of participation in formal voting at our meeting through proxies lodged by shareholders who are unable to attend, but it is always encouraging to have the opportunity to meetandtalktoshareholdersinperson.
Finally, onbehalfoftheBoard,IwishallshareholdersaveryHappyChristmasandgoodhealthandhappinessin2016.
19thNovember2015  Philip G.H.Collins
Chairman

1. ACCOUNTINGPOLICIES
Wynnstay Properties PLC is a public limited company incorporated and domiciled in England and Wales. The principal activity of the Company is property investment, development and management. The Company's ordinary shares are traded on the Alternative InvestmentMarket.
Basis ofPreparation
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 oftheCompaniesAct2006.
The unaudited condensed interim financial statements should be read in conjunction with the financial statements of the Company asatandfortheyearended25thMarch2015whichwerepreparedinaccordancewithIFRSasadoptedbytheEuropeanUnionand thosepartsoftheCompaniesAct2006applicabletocompaniesreportingunderIFRS,andhavebeenreportedonbytheCompany's auditors. The financial information for the interim periods ended 29th September 2015 and 29th September 2014 has not been auditedandtheauditorshavenotreportedonorreviewedtheseinterimfinancialstatements.Theinformationfortheyearended25th March 2014 has been extracted from the latest published audited financialstatements.
Key Sources of EstimationUncertainty
Thepreparationofthefinancialstatementsrequiresmanagementtomakejudgements,estimatesandassumptionsthatmayaffectthe applicationofaccountingpoliciesandthereportedamountsofassetsandliabilities,incomeandexpenses.
Revisionstoaccountingestimatesarerecognisedintheperiodinwhichtheestimateisrevisediftherevisionaffectsonlythatperiod. Thekeysourcesofestimationuncertaintythathaveasignificantriskofcausingmaterialadjustmenttothecarryingamountsofassets andliabilitieswithinthenextfinancialyeararethoserelatingtothefairvalueofinvestmentproperties.
InvestmentProperties
AlltheCompany'sinvestmentpropertiesarerevaluedannuallyandstatedatfairvalueat25thMarch.Theaggregateofanyresulting surplusesordeficitsarerecognisedthroughthestatementofcomprehensiveincome.
Depreciation
InaccordancewithIAS40,freeholdandleaseholdinvestmentpropertiesareincludedatthereportingdateatfairvalue,andarenot depreciated.
Depreciation of other plant and equipment is on a straight line basis calculated at annual rates estimated to write off each asset over its useful life of 5years.
Disposal ofInvestments
Thegainsandlossesonthedisposalofinvestmentpropertiesandotherinvestmentsareincludedinthestatementofcomprehensive income in the year ofdisposal.
PropertyIncome
Property income represents the value of accrued charges under operating leases for rental of the Company's properties. Revenue is measuredatthefairvalueoftheconsiderationreceived.AllincomeisderivedintheUnitedKingdom.
Taxation
Thetaxexpenserepresentsthesumofthetaxcurrentlypayableanddeferredtax.Currenttaxistheexpectedtaxpayableonthetaxable incomefortheyearbasedonthetaxrateenactedorsubstantiallyenactedatthereportingdate,andanyadjustmenttotaxpayablein respectofprioryears.Taxableprofitdiffersfromincomebeforetaxasreportedintheincomestatementbecauseitexcludesitemsof incomeorexpensethataredeductibleinotheryears,anditfurtherexcludesitemsthatarenevertaxableordeductible.

Deferred taxation is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilitiesinthefinancialstatementsandthecorrespondingtaxbasesusedinthecomputationoftaxableprofits,andisaccountedfor using the 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 taxableprofitswillbeavailableagainstwhichdeductibletemporarydifferencescanbeutilised.TheCompanyprovidesfordeferred taxoninvestmentpropertiesbyreferencetothetaxthatwouldbedueonthesaleoftheinvestmentproperties.
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. Deferredtaxischargedorcreditedinthestatementofcomprehensiveincome,includingdeferredtaxontherevaluationoftheasset.
Investments
Quotedinvestmentsarerecognisedasheldatfairvalue,andaremeasuredatsubsequentreportingdatesatfairvalue,whichiseither atthebidprice,orthelatesttradedprice,dependingontheconventionoftheexchangeonwhichtheinvestmentisquoted.Changes infairvaluearerecognisedinprofitorloss.
Trade and other accountsreceivable
Trade and other receivables are initially measured at fair value as reduced by appropriate allowances for estimated irrecoverable amounts.Allreceivablesdonotcarryanyinterestandareshortterminnature.
Cash and cashequivalents
Cash comprises cash at bank and on demand deposits. Cash equivalents are short term (less than three months from inception), repayableondemandandwhicharesubjecttoaninsignificantriskofchangeinvalue.
Trade and other accountspayable
Tradeandotherpayablesareinitiallymeasuredatfairvalue.Alltradeandotheraccountspayablearenotinterestbearing.
Comparativeinformation
Theinformationfortheyearended25March2015hasbeenextractedfromthelatestpublishedauditedfinancialstatements.
Pensions
Pension contribution towards employees' pension plans are charged to the statement of comprehensive income as incurred. The pension scheme is a defined contributionscheme.
2.DIVIDENDS
Payment
Pershare
Amountabsorbed
Period
Date
(pence)
'000
6 months to 29th September2015
18th Dec2015
5.00
137
6 months to 29th September2014
19th Dec2014
4.50
122
Year ended 25th March2015
17th July2015
7.8
211
3. EARNINGS PERSHARE



Basic earnings per share are calculated by dividing income after taxation attributable to Ordinary Shareholders of321,000 (2014:
345,000) by the weighted average number of 2,711,617 ordinary shares in issue during the period (2014: 2,711,617). There are no instruments in issue that would have the effect of diluting earnings pershare.

4. UNAUDITED STATEMENT OF FINANCIALPOSITION
Sixmonthsended Year ended

29thSeptember
2015
'000

29thSeptember
2014
'000

25thMarch
2015
'000
PropertyIncome
860

808

1,663
PropertyCosts
(84)

(31)

(87)
AdministrativeCosts
(221)

(214)

(414)

555

562

1,162
Movement in fair value of: InvestmentProperties




1,530
Profit on Sale of InvestmentProperty





OperatingIncome
555

562

2,692
Investment Income
2



2
FinanceCosts
(152)

(126)

(265)
Income beforeTaxation
405

436

2,429
Taxation
(84)

(91)

(210)
Income afterTaxation
321

345

2,219
The company has no other items of comprehensiveincome






5. UNAUDITED STATEMENT OF COMPREHENSIVEINCOME

29th September
2015

29th September
2014

25th March
2015
'000

'000

'000
Non CurrentAssets
InvestmentProperties
24,495

19,595

21,780
Investments
3

3

3

24,498

19,598

21,783
CurrentAssets
Accounts Receivable
273

226

489
Cash and Cash Equivalents
920

683

1,050

1,192

909

1,539
CurrentLiabilities
Accounts Payable
(902)

(503)


Income Taxes Payable
(309)

(330)

(223)

(1,212)

(833)

(1,309)
Net CurrentLiabilities
(19)

75

230
Total Assets Less CurrentLiabilities
24,479

19,672

22,013
Non-CurrentLiabilities
Bank Loans Payable
(9,967)

(7,034)

(7,621)
NetAssets
14,511

12,639

14,392
Capital andReserves





ShareCapital
789

789

789
TreasuryShares
(1,570)

(1,570)

(1,570)
Share PremiumAccount
1,135

1,135

1,135
Capital Redemption Reserve
205

205

205
Retained Earnings
13,952

12,080

13,833

14,511

12,639

14,392

6. UNAUDITED STATEMENT OFCASHFLOW
Six monthsended Yearended

29th September
2015
'000

29th September
2014
'000

25March
2015
'000
Cashflow from operatingactivities





Income before taxation Adjusted for:
Amortisation of deferred finance costs (Increase)/Decrease in fair value of investmentproperties
405
-

436
-

2,429
(1,530)
Interest income
(2)

-

(2)
Interest expense
Profit on disposal of investmentproperties Changes in:
Trade and otherreceivables
147
-
191

126
-
41

267
-
(222)
Trade and otherpayables
(146)

(373)

210
Income taxes paid


-

(235)
Interest paid
(150)

(105)

(253)
Net cash from operatingactivities
445

125

664
Cashflow from investingactivities
Interest and other incomereceived
2

-

-
Purchase of investmentproperties
(2,705)

(1,080)

2
Sale of investmentproperties
-

-

(1,735)
Net cash from investingactivities
(2,703)

(1,080)

(1,733)
Cashflow from financingactivities Dividendspaid
(212)

(206)

(328)
Repayments on bank loans Drawdown on bank loans
2,340

1,083

1,670
Net cash used in financingactivities
2,129

877

1,342
Net (decrease)/ increase in cash and cashequivalents
(128)

(78)

273
Cash and cash equivalents at beginning of period
1,049

776

776
Cash and cash equivalents at end of period
920

683

1,049

7. UNAUDITED STATEMENT OF CHANGES INEQUITY
SIX MONTHS ENDED 29 SEPTEMBER2015

Share Capital
Capital Redemption
Reserve
Share Premium Account
Treasury Shares
Retained Earnings
Total
000
000
000
000
000
000
Balance at 26 March2015
789
205
1,135
(1,570)
13,833
14,392
Total comprehensive income for theperiod
-
-
-
-
321
321
Dividends
-
-
-
-
(212)
(212)
Balance at 29 September2015
789
205
1,135
(1,570)
13,952
14,511
SIX MONTHS ENDED 29 SEPTEMBER2014

Share Capital
Capital Redemption
Reserve
Share Premium Account
Treasury Shares
Retained Earnings
Total
000
000
000
000
000
000
Balance at 26 March2014
789
205
1,135
(1,570)
11,940
12,499
Total comprehensive income for theperiod
-
-
-
-
345
345
Dividends
-
-
-
-
(206)
(206)
Balance at 29 September2014
789
205
1F,135
(1,570)
11,524
12,639
YEAR ENDED 25 MARCH2015

Share Capital
Capital Redemption
Reserve
Share Premium Account
Treasury Shares
Retained Earnings
Total
000
000
000
000
000
000
Balance at 26 March2014
789
205
1,135
(1,570)
11,940
12,499
Total comprehensive income for theyear
-
-
-
-
2,219
2,219
Dividends - note2
-
-
-
-
(328)
(328)
Balance at 25 March2015
789
205
1,135
(1,570)
13,833
14,392

Wynnstay PropertiesPLC
Hamilton House Mabledon Place London WC1H9BB
Tel: +44 (0)20 75548766
E-mail: info@wynnstayproperties.co.uk

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