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REG - Wynnstay Properties - Final Results <Origin Href="QuoteRef">WSP.L</Origin> - Part 2

- 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

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