RNS Number:4017E
Marylebone Warwick Balfour Grp PLC
25 September 2007
FOR IMMEDIATE RELEASE
25th September 2007
MARYLEBONE WARWICK BALFOUR GROUP PLC:
INTERIM RESULTS FOR SIX MONTHS TO 30th JUNE 2007
HIGHLIGHTS
* Substantial uplift in equity attributable to shareholders increasing by
#132.2m to #231.5m from #99.3m at 31st December 2006.
* Equity shareholders funds per share advance 133% to 287p from 123p at
31st December 2006.
* Adjusted equity shareholders funds per share, after accounting for
stakes in MWB Business Exchange Plc and Liberty Plc, amount to 318p up 72%.
* EBITDA (excluding property profits and transaction costs) up 31% to
#11.4m against #8.7m in the 2006 comparable period.
"The second half of the year is well underway and the indications are extremely
promising, with each Group business looking to build on its first half
achievements and, therefore, I look to the future with optimism."
Eric Sanderson, Chairman
Contact: Marylebone Warwick Balfour Group Plc Tel: 020 7706 2121
Richard Balfour-Lynn, Chief Executive
Andrew Blurton, Group Finance Director
Baron Phillips Associates Tel: 020 7920 3161
Baron Phillips
MALMAISON AND HOTEL DU VIN
--------------------------
* Revenue over the half year grew by 14.5% to #41.9m from #36.6m for the 2006
comparable period.
* Like-for-like revenue (excluding new hotel openings) rose 5% over comparative
period.
* EBITDA grew by 3% before exceptional items from #9.7m to #10.0m despite
major opening programme.
* Full year EBITDA expected to exceed last year's #23.4m.
* 21 operating hotels now open - a further 5 to open over next 12 months
- compared to 17 at 31st December 2006 year end.
* Hotel properties valued at #553m at 30th June 2007 up from #349m at 31st
December 2006
* Average room rate over period rose by 6% to #115 against #108 a year ago.
* Overall occupancy, including new hotels, 77%.
"The six months to 30th June 2007 have been a highly successful period for both
Malmaison and Hotel du Vin. Both businesses demonstrate that well managed brands
can expand and grow profitably without diluting their underlying value. With the
operational evidence of the third quarter, I look forward to the remainder of
the year with confidence."
Robert B. Cook, Chief Executive, Malmaison Group.
MWB BUSINESS EXCHANGE PLC
-------------------------
* Revenue grew 22% to #47.9m over the comparable six month period to
30th June 2006.
* EBITDA rose strongly by 61% to #6.2m compared to the six months to
30th June 2006.
* Pre-tax profits increased 2% to #3.5m compared to the six months to
30th June 2006.
* Annualised Revenue Per Available Workstation (REVPAW) advanced 19% to
#8,600 at 30th June 2007 from #7,250 at 30th June 2006.
* Annualised Revenue Per Occupied Workstation (REVPOW) up 9% to #9,800
at 30th June 2007 compared to #8,960 at 30th June 2006.
* Meeting and conference room division up by more than 50% to #5.1m over the
comparable six month period to 30th June 2006.
* Occupancy increased to 88% at 30th June 2007, up from 81% at
30th June 2006.
* Robust contracted income accounting for over 60% of current 12 month
projections.
* New Business Exchange centre successfully opened at Baker Street -
over 90% occupancy achieved within 5 months.
* Six additional centres to be launched by year end.
* In the 12 weeks since 30th June 2007, MWB Business Exchange has generated
unaudited EBITDA of approximately #3.8m before the positive impact of newly
opened centres.
"This is an exciting time for the business as we continue to go from strength to
strength, exceeding expectations around key performance indicators and
profitability. We have the right business model in place to continue growing and
to deliver enhanced shareholder value."
John Spencer,Chief Executive, MWB Business Exchange Plc.
LIBERTY PLC
-----------
* New Chief Executive joined 1st July 2007 and additional appointments to
executive management team:
o New Human Resources and Change Director appointed from Maybourne Group.
o Director of Internet, Supply Chain and Retail Merchandising joins
from Harrods.
* Further advance in total Group revenue to #20.8m - up from #20.3m in
comparable period.
* Flagship store sales advanced 1.9% to #16.5m.
o Menswear increased sales by 28% to #2.1m.
o Accessories sales rose by 7% to #3.5m.
o Liberty of London luxury brand sales up 23% to #1.2m.
* Further strengthening of Liberty balance sheet through upward valuation
of Great Marlborough Street store to #37m from #35m.
* Pre-tax losses of #2.3m, against #1.9m, reflecting increased brand
investment of #1.6m.
* Independent Liberty of London shop leased in Sloane Street - anticipated
Spring 2008 opening.
"We believe Liberty is entering a new era where it is re-capturing the ethos and
desire to provide cutting edge design in a luxury retail environment for which
the company was once synonymous. Our objective over the next 12 months is to
firmly establish this framework enabling us to make Liberty, which will be led
by the Liberty of London brand, to become a byword for luxury retailing.
"I passionately believe we are establishing a great team and an increasingly
recognised luxury brand with enormous potential. Therefore, I am confident that
we can continue to build on our established foundations and move to the next
stage in our growth strategy. With that in mind I believe the future is
exciting."
Geoffroy de la Bourdonnaye, Chief Executive, Liberty Plc.
CHAIRMAN'S STATEMENT
--------------------
This has been a further period of growth for the Group's principal operating
businesses as they continue to establish themselves as leading companies in
their respective fields. Over the past six months covered by this interim
statement we have seen earnings advance substantially in both our serviced
office business and our hotel operations while retailing has made great progress
in developing its luxury brand offer.
The overall performance of the Group reflects the energy and dynamism of each
company's management team, two of which run listed companies in their own right,
and the results for the period have been impressive.
Since MWB Business Exchange, in which the Group has a 68% interest, was admitted
to trading on AIM in December 2005, it has made rapid strides to consolidate its
position as one of the UK's leading providers of flexible office space. It has
produced a 22% uplift in revenues over this period to 30th June 2007 and seen
occupancy rise by 14% to 88% since the previous year end of 31st December 2006.
Its strategy of focusing on the prime central London and key regional business
markets which are demonstrating strong growth, is delivering excellent
shareholder returns for the Group.
Our two leading lifestyle hotel brands, Malmaison and Hotel du Vin, in which we
own an 82.5% stake, have also made some tremendous advances. Since the start of
2007 we have opened a further four new hotels taking the operating total to 21
with a further 5 in the pipeline that are scheduled to be opened by the end of
2008. The Malmaison Group continues to win well-deserved awards for both quality
and service which have been achieved while continuing to grow earnings.
Liberty, where our interest is also 68%, and which is also quoted on AIM,
continues to expand its luxury brand offer to great acclaim both here in the UK
and abroad. The business is now under the leadership of a new Chief Executive as
it aims to consolidate its position as a key retail destination offering cutting
edge design and fashion. We have strengthened the Executive Team at Liberty with
a number of senior appointments in order to achieve our objective of creating a
true luxury goods business. This also involves us continuing to invest in the
Liberty of London brand through product range development and our new stand
alone store, as well as improved service delivery across the entire Liberty
business, which we anticipate will deliver operational benefits to Liberty in
the future.
For shareholders, the key statistic in these results to 30th June 2007 is the
#165m property valuation uplift over the period since 31st December 2006. At the
heart of this increase has been the rise in value of our Malmaison and Hotel du
Vin property portfolio. With the expansion of our two brands we now have 21
operating hotels and a further 5 hotels due to come on stream during the next 15
months, in comparison to only 17 at 31st December 2006.
As a result of these additional operating hotels, the earnings and future
expectations for these properties are significantly higher than was the case six
months ago. This has led to an increased value of #553m being attributed to the
Malmaison and Hotel du Vin portfolio at 30th June 2007 on a RICS Red Book
valuation basis. This is a valuation of the property elements only of the
individual hotels and as such does not reflect the market value of the
operations, our brands and the goodwill of our business. These are additional
significant components to the actual market value of the Malmaison and Hotel du
Vin business that is owned by the Malmaison group.
This Red Book valuation of #553m, of the Malmaison and Hotel du Vin properties,
represents a surplus of #163.5m during the six months ended 30th June 2007
compared to the valuation at 31st December 2006. It is important to note that
over the next two years, as the five new hotels currently being developed and
the two extensions to existing properties become operational, there should also
be further major uplifts in the value of this portfolio. These would accrue to
the Group either in the value achieved in the proposed sale or in the increased
value of the properties retained.
There has also been a further contribution from Liberty, which has seen the
value of the Tudor building rise by #2.0m from #35.0m at the December 2006 year
end to #37.0m at 30th June 2007.
As a result of these increases in property values, and after taking account of
minority interests, equity attributable to shareholders increased by #132.2m
from #99.3m at 31st December 2006 to #231.5m at 30th June 2007. This represents
an increase of 164p a share, up from 123p to 287p per share.
Whilst these financial statements reflect these property valuations, they do not
take account of the net value of the Group's shareholdings in its two AIM listed
subsidiaries, MWB Business Exchange Plc and Liberty Plc, at 30th June 2007. After
accounting for these net uplifts, calculated by reference to the stock market
values at 30th June 2007, adjusted equity attributable to shareholders at that
date was #256.3m or 318p per share, an increase of 72% over the 185p a share we
reported at 31st December 2006.
Operating EBITDA (which excludes one-off profits on investment property
disposals and the #4.6m costs incurred on the aborted Vector Hospitality
transaction) was #11.4m for the six months ended 30th June 2007, up from #8.7m a
year ago. In addition to this we have made a #5.1m profit on the sale of our
development property at Old Bailey, EC4 to Standard Life. Here we will also
continue to manage the development of the property and will, therefore, receive
further income from this source as the development progresses. At the pre-tax
level we produced a profit of #812,000 for the six months to 30th June 2007
before the one-off costs referred to above, in comparison to #1.3m a year ago.
On 2nd July 2007, we appointed Banc of America Securities to conduct the sale of
the 21 Malmaison and Hotel du Vin hotels currently built and operating, a
further five hotels under development, their unique brands and the hotel
operations of the business. This proposed sale formed part of the Board's long
stated and approved strategy by shareholders of returning cash and cash
equivalents to shareholders by realising high prices for the Group's assets. On
20th September 2007 the Board, having been advised by Banc of America Securities,
announced that it had delayed this sale as a result of the current uncertainties
in the markets.
I am pleased to announce that we recently received confirmation that MWB had won
the EPRA Best Performer Award for 2006 in the small/mid-capitalisation section
of the Stock Market. This is further recognition of the significant increases in
value that we continue to produce for the benefit of Shareholders.
The second half of the year is well underway and the indications are extremely
promising with each Group business looking to build on its first half
achievements and therefore I look to the future with optimism.
Eric Sanderson
Chairman
25th September 2007
MALMAISON AND HOTEL DU VIN OPERATING REVIEW
-------------------------------------------
Once more I am delighted to report on another period of growth and success for
the Malmaison group as it opens new hotels and garners more awards.
During the past six months to 30th June 2007, we have moved substantially
forward in our stated objectives of expanding both the Malmaison and Hotel du
Vin groups into new locations whilst at the same time maintaining the brand
quality for which we are known.
Over the period we opened a new Malmaison hotel in Liverpool and two new Hotel
du Vins in Glasgow and Cheltenham. In addition we acquired the Mansion House
hotel in Poole, which will be converted into a 38 room Hotel du Vin and is due
to open in May 2008. Since the end of June we have opened a new 41 room Hotel du
Vin in Cambridge and a new 75 room Malmaison in Reading, while a further 45 room
Hotel du Vin will open in York during December 2007.
In Edinburgh we purchased a unique building in the Old Town at Bistro Place. The
acquisition is firmly in the Malmaison group tradition of acquiring unusual
buildings for hotel conversion; in this case it is the former Edinburgh asylum.
We intend to convert this into a 47 room Hotel du Vin, opening in August 2008.
Also due to open in Summer 2008 is a 41 room Hotel du Vin in Newcastle, where we
are converting the former Tyne & Wear Shipping Office, while in Aberdeen's
financial district we expect to open an 82 room Malmaison in late 2008.
In June 2007 we exchanged contracts to acquire the former Sussex Arts Club,
adjoining our Brighton Hotel du Vin, which we expect to complete next month. We
will then convert the building to provide a further 13 bedrooms and one suite,
as well as the existing pub which will be branded as a "Pub du Vin" to create a
quintessential English hostelry offering traditional food complemented by our
fine wine culture.
As a result of this strategic expansion, at the date of this statement, the
Malmaison group now operates a total of 21 hotels, 11 Malmaison and 10 Hotel du
Vin; with a further 5 pipeline properties that should all open during the
course of 2008 taking our total to 26. Additional sites have been identified for
both brands and we are in advanced negotiations to purchase these sites. For
Hotel du Vin, sites in Exeter for a 53 bedroom development, in London's West End
a 45 bedroom development and a 40 bedroom development in Southport have all been
identified. For Malmaison, a second site in London with 180 bedrooms, a
development in Milton Keynes for 120 bedrooms and a city centre site in
Sheffield for 85 bedrooms have all been identified. All of these reflect
the style and panache of the existing portfolio and will be created from
historic or iconic buildings in each of the destinations. Furthermore, we
continue to look for suitable sites and unusual buildings to continue to
strengthen our hard won brand image and recognition, which is widely known
within the industry.
At the operating level we have achieved great success with our "Provenance
Menus". In January 2007 we launched our "Home Grown and Local" menus in all of
our Malmaison restaurants where we focus on sourcing all the ingredients from
within a 30-mile radius. Hotel du Vin launched its similarly based "Land, Sea
and Local" menus in March to great acclaim. In both cases these menus have done
much to stimulate our lunchtime food and beverage business, especially within
the Hotel du Vin restaurants which have traditionally been a stronger dinner
market than Malmaison.
Recognition of our increasingly improved food offer, especially through the
"Provenance Menus", came earlier this year when we were voted AA Hotel of The
Year. As a result our hotels have been awarded a further rosette reflecting this
offer.
Over the period we received several other awards including "Best Place to Work"
at the Catey Awards, with the Oxford Malmaison being voted best Group Hotel of
the Year. It should always be borne in mind that these awards reflect as much on
the staff as they do on senior management and I believe these, and the other
many awards we have received indicate that customer service is uppermost in the
minds of all our staff.
The Malmaison group's hotels have become not only fantastic places to stay and
dine but, equally important, great places to work. This is not always the case
in our industry and I would like to congratulate everyone within the Malmaison
and Hotel du Vin team for consistently achieving the high standards that they
set for themselves. This is the culmination of the unique touch points of our
business; a distinctive design edge, first class food and beverage provision, a
dynamic people development strategy and regular guerrilla marketing campaigns,
all with that high octane voice that is adopted as our brand style, that sets
these two brands apart and well ahead of the mainstream UK hotel market.
Our development programme, whether it is new hotels or staff training, is about
driving growth. It is pleasing to note that our "new" hotels, such as Henley,
Oxford and Belfast, have become well established in their respective areas and
are producing double-digit growth.
Across the Malmaison group, occupancy for our established hotels has remained
consistently strong over the six months to 30th June 2007 at 79% and even when
the newly opened hotels are included, overall occupancy has been an extremely
creditable 77%.
At the important revenue level we continue to make excellent progress. Average
Room Rates ("ARR") across the Malmaison group, including the new hotels,
improved by 6% to #115 against #108 a year ago, but if the new hotels are
excluded the ARR was 10% higher at #119. Revenue per Available Room
(REVPAR) also grew by around 6% to #91 compared to #86 a year ago.
During the six months ended 30th June 2007 there has been strong growth in our
key areas of Revenue and EBITDA. Total revenue across the Malmaison group rose
14% to #41.9m compared to #36.6m a year ago. EBITDA for the six months to 30th
June 2007, excluding the one-off costs relating to the aborted Vector
Hospitality transaction, grew by 3% to #10.0m against #9.7m for the 6 month
period to 30th June 2006. This is despite the new openings at Liverpool, Glasgow
and Cheltenham. During this period we also rolled out our new front of house
operating system, the cost of which we expensed entirely in the results for the
period. We also conducted major refurbishments at certain hotels during the six
months to 30th June 2007, which reduced operating availability but will provide
enhanced operating capability for future periods. Accordingly, we confidently
expect a substantial increase in EBITDA for this year over the record #23.4m we
achieved last year.
As our new hotels become established they become net contributors to the
Malmaison group, producing cash flow which we use to continue our investment in
our established portfolio throughout the year.
As mentioned above, this expansion means that we now have 21 operating hotels
and a further 5 hotels coming on stream over the next twelve months, in
comparison to 17 at December 2006. As a result, earnings and future expectations
of this portfolio are significantly higher than was the case six months ago.
This has led to an increased value of #553m being attributed to the Malmaison
and Hotel du Vin portfolio at 30th June 2007 on a RICS Red Book valuation basis.
This is a valuation of the property elements only of the individual hotels and
as such does not reflect the market value of the operations, our brands and the
goodwill of our business. These are additional significant components to the
market value of the Malmaison and Hotel du Vin business that is owned by the
Malmaison group.
This Red Book valuation of #553m represents a surplus of #163.5m during the six
months ended 30th June 2007 against the valuation at 31st December 2006. It is
important to note that over the next two years, as the five new hotels currently
being developed and the two extensions to existing properties become
operational, there should also be further uplifts in the value of this
portfolio. At 30th June 2007, external debt was #229m, which is forecast to
increase to approximately #255m after these developments and extensions have
been completed.
The six months to 30th June 2007 have been a highly successful period for both
Malmaison and Hotel du Vin. Both businesses demonstrate that well-managed brands
can expand and grow profitably without diluting their underlying value. With the
operational evidence of the third quarter, I look forward to the remainder of
the year with confidence.
Robert B. Cook
Chief Executive
Malmaison Group
25th September 2007
MALMAISON AND HOTEL DU VIN - KEY FINANCIAL HIGHLIGHTS
-----------------------------------------------------
Malmaison has expanded organically and by acquisition of further operating
hotels during the period under review. The key performance indicators for the
business, together with its trading and balance sheet performance in recent
periods, are summarised below:-
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
Malmaison
---------
Total revenue #'000 26,213 23,144 48,912
Average occupancy for period % 76 78 79
Average room rate for period # 112 108 107
EBITDA #'000 7,097 7,012 9,670
Number of operating hotels at
period end 10 9 9
====== ====== ======
Hotel du Vin
------------
Total turnover #'000 15,729 13,413 30,189
Average occupancy for period % 83 84 84
Average room rate for period # 124 96 118
EBITDA #'000 2,939 2,701 13,719
Number of operating hotels at
period end 9 7 8
====== ====== ======
Combined Malmaison and Hotel du Vin
-----------------------------------
EBITDA (before costs of Vector
Hospitality transaction in six
months to June 2007) #'000 10,036 9,713 23,389
Pre-tax (loss)/profit (before
costs of Vector Hospitality
transaction in six months to
June 2007) #'000 (2,711) 585 5,101
Total recognised income and
expense #'000 155,524 12,609 25,953
======= ====== ======
30th June 30th June 31st December
2007 2006 2006
Balance sheet composition
-------------------------
Property, plant and equipment #'000 525,877 286,973 336,958
Debt #'000 (224,285) (181,187) (199,093)
Equity attributable to
shareholders of MWB Group in
Malmaison and Hotel du Vin #'000 236,197 88,188 106,380
Equity attributable to
shareholders of MWB Group in
Malmaison and Hotel du Vin, in
pence per MWB Group share Pence 293p 93p 132p
======= ======= =======
MWB BUSINESS EXCHANGE PLC OPERATING REVIEW
------------------------------------------
This has been another period of excellent growth for the business with advances
in all our key areas of performance.
Over the six months under review we have continued to develop the business in
line with our stated strategy of generating attractive returns from sustainable
income streams resulting in a dramatic increase in EBITDA. We have continued to
concentrate on fulfilling our defined growth plan by taking occupational leases
in the London market whilst expanding in targeted regional cities through
operating and management agreements (OMAs).
During the period since flotation in December 2005, we have either opened or are
in the process of opening 15 new centres, of which seven are London leases, four
are London OMAs, one is a regional lease and three are regional OMAs. Typically
our new centres are un-branded and have been designed with a more contemporary
feel to maximise appeal to our clients. We also closed eight underperforming
centres to improve our overall business model and improve returns to
shareholders. As a result of this activity, we now have 58 centres at the date
of this statement, half of which are in London. We have been rigorous in the
management of mature centres, with particular emphasis placed on margin
improvement; enhancing EBITDA through improved yield management; growing
existing as well as new income; and continuing to mitigate risk.
Our meeting venues offering has continued to perform strongly over the last six
months with revenues across our 250 meeting rooms increasing by more than 50% over
the same period last year. This increase is a result of continued targeted
marketing and higher client retention. The outlook on growth in this area
remains strong.
The Company has made significant progress in a number of key areas as we
continue to develop and improve the MWB Business Exchange offer to meet the
requirements of our increasingly expanding and diverse client base.
Our dedicated acquisition and launch teams are highly experienced in finding new
locations as well as project managing the design and fit out processes. The
group has a proven track record of acquiring and developing commercial
properties into operational business centres and typically we can make the
process of conversion of an acquired location to a business centre in as little
as three months. This enables pre-sales and marketing activity to begin as soon
as the acquisition of the relevant centre has been completed and the key
objectives can be delivered by our teams.
A particular strength is our ability to ensure sales and marketing activity is
focused on generating committed occupancy before new centres become operational.
This is illustrated by the fact that on average, our new locations are achieving
occupancy levels in excess of 85% within five months of opening, which is
comparable to occupancy levels for mature centres which are already well
established.
There is little doubt that the impact of our strategy of concentrating on key
business markets and locations, which has also improved our brand awareness, is
a major factor in the upsurge in demand and interest in our products and
services. Over the past six months we have expanded our Central London portfolio
significantly with new centres reaching maturity in the West End - Baker Street,
Tottenham Court Road and Cavendish Square - and in the City - Cannon Street,
London Bridge and London Wall.
This expansion is further supported by new centres which are expected to come on
stream during the course of the current six months to the end of December 2007,
including Liverpool Street, Basinghall Street, Threadneedle Street and Finch
Lane in the City, while Basil Street (the former Basil Street hotel) in
Knightsbridge will become a fully operational business centre in the Summer of
2008. Currently we have a total of 58 centres open, or set to open within the
next few months, providing more than 15,500 workstations and 250 meeting rooms,
compared to approximately 14,000 workstations and 200 meeting rooms at
December 2006.
Growth has been focused around the London market where 11 centres have been
opened since flotation in December 2005, seven of which were new leases. The
demand for space in London has been and continues to be strong while available
office accommodation is becoming scarce. London's position as the financial
capital of the world and the run up to the 2012 Olympics leads us to believe
that demand will remain very strong looking forward. Office rents in London are
continuing to increase with record levels being achieved in the West End,
particularly in Mayfair and St James's. Rents in the City are likewise
increasing and this is having a positive effect on the workstation rates we are
achieving.
OMAs have shown particularly strong growth. Over the last six months, we have
taken on or are in the process of acquiring five OMAs taking our total to 18. Of
the five new centres, three are in London, one is in Newcastle and one is in the
heart of Manchester's vibrant business district.
A key aspect of our OMA growth is that they help expand the portfolio without
exposing the Company to substantial capital expenditure or to long term lease
liabilities, while still generating significant management fees and share of
profits for the Company.
This is an increasingly powerful aspect of our business as it enables us to work
closely with property owners to generate income quickly from their vacant space
which may be surplus to the owner/occupier's current needs.
Typically these OMAs run for up to 10 years but the length of the contract can
be tailored to the individual landlord's or tenant's requirements. We will
continue to pursue OMAs, especially outside London, as they generate attractive
returns for relatively low risk.
OMAs are also a stepping stone to exploring other growth opportunities with
landlords, for example back-to-back leases, turnkey solutions, fit-out services
and facilities management, thereby generating further valuable returns for both
parties.
The financial results for the six months to 30th June 2007 show a significant
improvement over the comparable period to 30th June 2006. Total revenue advanced
by 22% to #47.9m compared to #39.3m for the six month period to 30th June 2006.
This has produced a healthy increase in EBITDA, which rose 61% to #6.2m over the
six month period to 30th June 2007, compared with #3.9m during the six months to
30th June 2006. Pre tax profits for the six months to 30th June 2007 grew to
#3.5m, a 2% increase from #3.4m over the comparable period. The differential
between growth in EBITDA and growth in pre tax profits is a result of higher
depreciation in this half, emanating from the significant investment made in new
centres and in our existing buildings. As these new centres mature during the
second half of 2007, the results will demonstrate the truer benefit of this capital
investment which we expect will be demonstrated in further growth in EBITDA and
pre tax profits compared to these first six months.
The strength of our financial performance in the six months to 30th June 2007 is
reflected in our key performance indicators. Revenue per available workstation
rose by 19% to #8,600 at 30th June 2007 compared to 30th June 2006 and revenue
per occupied workstation grew by 9% to #9,800 over the same period. Occupancy
has increased from 81% to 88% at period end 30th June 2007 compared to period
end 30th June 2006.
We remain financially strong with no finance leases or bank loans, allied with
rapid conversion of EBITDA into cashflow. This results in the business being
highly cash generative with the ability to expand organically from its own
resources. Strong operational cashflow remains a prime focus for the business.
As I have mentioned, market conditions remain strong for our distinctive
unbranded flexible proposition. Leads have increased by 14% over the previous 6
months and by 17% over the same time last year. In addition, we have secured 33%
more workstation sales over the last 6 months, compared to the period ended 30th
June 2006. Pricing has continued to increase and we have achieved a 5% uplift in
the year to date.
Our clients initially contract with us for 8 months on average, with over 70%
renewing at least once leading to an average stay of almost 2 years. Our strong
contracted income equates to over 60% of our current 12 month projections. When
taking account of client renewals, this level of committed income increases to
over 85%, demonstrating the stability of our business.
Currently we have in excess of 1,500 clients contracted with the average client
using eight workstations at the point of sale. Our client base is predominately
small and medium enterprises (SMEs) that are attracted to the contemporary,
bright and non-branded interiors of our properties which are typically based in
prime locations.
Even though our centres are largely unbranded, we have a powerful corporate
brand reinforced by highly motivated and committed centre teams, who are at the
forefront of the business. These client facing employees are trained rigorously
through our 'We're the Business' programme to support the needs of our clients
so that they can focus on what they do best - their business. Our mission is to
give our clients and employees the freedom to excel; we continue to experience
feedback from our clients stating they are very satisfied with the service we
provide and our employee engagement statistics remain exceptionally high.
We have an ongoing objective in our recruitment and talent development policy
which is to attract and retain the very best employees. This means we have a
dynamic and dedicated employee base led by our Talent Development Director. The
well established management team's ongoing pledge to improving the client
experience is supported by the role of the Client Service Director who is
responsible for the delivery of this strategy.
As a result of our scalable business model, we become business incubators for
many of our clients. This is supported by the fact that 30% of new workstation
sales each month derive from expansion of existing clients. The rest of the
portfolio is taken by companies who require outsourced space for specific
projects, temporary relocation or overflow offices. It is noticeable that a
growing number of corporates are planning to use flexible office space on an
ongoing basis or as part of their property strategy. Given the changing view
taken by businesses away from long-term leases, serviced offices are an
increasingly attractive property solution.
Investment in the general maintenance and upkeep of our business centres remains
important in addition to the ongoing development and provision of our IT and
Telecoms infrastructure. It is important to our clients that they have access to
the latest technology alongside new products and services and the management
team places significant emphasis on this. In both of these areas, we feel it is
important to keep looking to the future, adapting to the changing needs of our
clients and keeping abreast of advances in products and service delivery.
Our strategy of focusing on SMEs continues to ensure a low level of risk in our
business. Less than 18% of our available space is taken by clients who occupy
more than 15% of any building and no client has more than 2% of our total
portfolio of workstations, in line with our previously highlighted strategy. In
order to manage our business in these instances, we have phased exit
arrangements in the contracts of our larger clients. Across the portfolio, this
strategy enables us to develop a pipeline of prospective clients in order to
immediately fill space once the first phase of departure occurs. This is
important as it reduces the business' vulnerability to large move-outs.
Equally important is the fact that no industry dominates our client base. Our
sector diversification includes IT and Telecoms at 13% of workstations, followed
by Real Estate at 9%, Banking and Finance at 8% and Recruitment at 7%. This
ensures that we are not over-exposed to any sector downturn or client move,
which lies at the heart of our commitment to build sustainable income and
enhanced profit generation.
The recent corrections in the financial markets are not expected to affect our
2007 full year results. In the 12 weeks since 30th June 2007, MWB Business
Exchange generated unaudited EBITDA of approximately #3.8m before the impact of
newly opened centres. Given our strong contracted income, current levels of
business activity and new centres which are expected to open by December 2007,
the Board of MWB Business Exchange looks forward to 2008 with increasing
confidence.
The Company is also reviewing a number of further growth opportunities, both
acquisitive and organic, in line with our stated strategy. This is an exciting
time for the business as we continue to go from strength to strength, exceeding
expectations around our key performance indicators and profitability. We have
the right business model in place to continue growing and to deliver enhanced
shareholder value.
John Spencer
Chief Executive
MWB Business Exchange Plc
25th September 2007
MWB BUSINESS EXCHANGE PLC - KEY FINANCIAL HIGHLIGHTS
----------------------------------------------------
The key performance indicators for this business and the trading and balance
sheet performance in recent periods, are summarised below:-
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
Operating statistics
--------------------
Revenue #'000 47,910 39,285 82,306
Occupancy at period end % 88 81 77
Revenue per available
workstation ("REVPAW") per
month at period end # 8,600 7,250 6,870
Revenue per occupied
workstation ("REVPOW") per
month at period end # 9,800 8,960 8,830
EBITDA #'000 6,231 3,878 9,307
Number of operating centres
at period end Number 40 34 39
Number of operating and
management agreements at
period end Number 15 16 16
====== ====== ======
Financial performance
---------------------
Pre-tax profit/(loss) #'000 3,481 3,421 8,043
Recognised income and expense #'000 3,481 3,426 8,048
====== ====== ======
30th June 30th June 31st December
2007 2006 2006
Balance sheet composition
-------------------------
Property, plant and equipment #'000 35,369 20,711 30,691
Net cash/(debt) #'000 (32) 7,398 2,162
Adjusted equity attributable
to shareholders of MWB Group
in MWB Business Exchange Plc #'000 64,776 44,369 68,212
Adjusted equity attributable
to shareholders of MWB Group
in MWB Business Exchange Plc,
in pence per MWB Group share Pence 80p 46p 85p
====== ====== ======
LIBERTY PLC OPERATING REVIEW
----------------------------
I am pleased to report further progress at Liberty as we continue our strategy
of re-positioning the business into a highly focused luxury goods retailer.
Over the six months to 30th June 2007, sales have continued to grow, especially
within our Liberty of London luxury brand, and we have made great strides in
restructuring the management team that will help us meet our key objective of
making Liberty a global brand.
The increased success of our Liberty of London label, which saw its total sales
within the flagship store rise by 23% to #1.2m, is extremely encouraging and is
beginning to define how we believe Liberty will look and feel in the future. As
part of this process we are examining every aspect of the flagship store so that
all products sold will reflect the luxury goods approach that we are achieving
with the Liberty of London brand. This improving product mix should be another
driver to our successful transformation of the business.
To help achieve this we have made, and continue to make, significant management
appointments. The first has been the appointment of Geoffroy de la Bourdonnaye
as Chief Executive who joined us in July from Christian Lacroix where he was
instrumental in reviving and developing that established brand. Geoffroy brings
a wealth of brand management and development experience to Liberty. He is
already having a significant impact and is beginning to restructure Liberty's
senior management to enable the business to deliver its objective of becoming a
globally recognised luxury goods retailer.
Earlier this month, we announced the appointment of Sara Edwards as Human
Resources and Change Director. Sara is a highly regarded Senior HR Executive
within the hospitality industry and understands how to refocus a team to deliver
service within a luxury goods environment. This will involve major change across
the whole Liberty Group to drive improved service delivery, management
performance and overall financial results. We have also recently announced the
appointment of Guy Hipwell as Director of Internet, Supply Chain and Retail
Merchandising. Guy will develop Liberty's e-commerce offer to reflect the
growing international awareness of the Liberty of London luxury brand,
streamlining the supply chain and leading the merchandising function. Guy joined
Liberty from Harrods where he had contributed significantly to the development
of its merchandising and e-commerce offer.
Retailing continues to reflect the polarisation that we have seen over the past
couple of years. Successful retailers are those who focus on specific areas of
the market. At Liberty we are aiming firmly at the luxury goods market and this
is attracting those consumers seeking quality and good design in a retail
destination environment.
We continue to invest heavily in our luxury brand, Liberty of London, as we look
to capitalise on the global demand for well-designed and high value products.
Apart from continuing to expand the label's range of products, we are also
beginning to introduce Liberty of London to a wider, more international
audience. We have shown our Liberty of London menswear range at the Milan
fashion week earlier in the year and later this month we are taking our Liberty
of London womens' accessories and swimwear range to Paris. As a result the label
will start being seen in the world's luxury stores enabling us to build a far
wider platform of brand recognition and awareness.
In the UK we have already taken two key steps in the development of the brand.
First, we have created Liberty of London's own dedicated space within the
flagship store. With specifically trained and recruited staff, this area,
located in the central atrium, is already proving very popular among customers.
Secondly, and perhaps more importantly, we have leased a shop in the prime
Knightsbridge end of Sloane Street for no premium and at advantageous rental
level to ourselves. This is planned to open in Spring 2008 and will be a
stand-alone Liberty of London retail unit enabling us to showcase our product
range in a prime shopping environment. It will also help us to establish a
benchmark not only for how Liberty of London retail units will look and operate,
but also help us establish the design and feel we believe necessary to bring the
flagship store up to a similar level.
Our fabrics business is also enjoying a new lease of life. As referred to in my
previous statements, our 50:50 Japanese joint venture is coming to an end and
therefore in the future we will be able to incorporate all of these results into
a new wholly owned subsidiary. The remaining business will continue to be
managed from the UK, where we are already identifying new markets for our fabric
as well as diversifying into new base cloths and special designs. At the same
time we are re-introducing our range of Liberty silks, for which the Company was
once noted, and we see important growth potential in this area of our business.
Revenue from our fabrics division improved by 4% to #6.6m, despite the impact of
a weak Yen against Sterling, and contributed an operating profit of #1.5m for
the period. As the changes we have implemented begin to take effect, we
anticipate this division will grow markedly over the medium term, contributing
an increasing level of pre-tax profits to the group.
Overall total net sales at the flagship store including concessions improved to
#16.5m for the six months to 30th June 2007 from #16.2m this time last year.
Some of our key drivers over the period included menswear which recorded a 28%
increase in sales to almost #2.1m, while accessories' sales rose by almost 7% to
#3.5m. However ladieswear endured tougher trading conditions and sales dipped 4%
to #3.9m while our Home department delivered sales of #4.2m, down 3% against the
corresponding period ended 30th June 2006.
Across the entire Liberty business, revenue for the six months to 30th June 2007
increased slightly to #20.8m, against #20.3m for the same period last year,
while gross profits were #9.5m against #9.1m last time. Pre-tax losses for the
half-year were #2.3m compared to a loss of #1.9m a year ago, reflecting an
increased investment in the brand of #1.6m, up from #1.1m in the comparable
period a year ago.
Liberty's balance sheet has been further strengthened by an increase in the Red
Book value of our flagship store in Great Marlborough Street. This has risen to
a gross property value of #39.2m, which after assumed purchaser's costs of #2.2m,
translates into a value for accounts purposes of #37.0m, up from #35.0m at 31st
December 2006. As a result, Liberty's net assets are now #51.5m against #43.6m a
year ago.
We believe Liberty is entering a new era where it is re-capturing the ethos and
desire to provide cutting edge design in a luxury retail environment for which
the Company was once synonymous. Our objective over the next 12 months is to
firmly establish this framework enabling Liberty, which will be led by the
Liberty of London brand, to become a byword for luxury retailing. This
will be reflected in not only the products we sell, but also how we present and
sell them, together with the service our customers receive, whether in the store
or our on-line shop.
In the current market it is hard to be completely certain of the future, but I
passionately believe we are establishing a great team and an increasingly
recognised luxury brand with enormous potential. We are intent on achieving
achieve our goals and attracting new talent to the business. Contrary to certain
press opinion, I would also like to confirm that we have held no discussions
concerning the sale of the business during the period and none are currently
in progress. We are committed to taking Liberty into the next stage of its
development and creating a truly global luxury brand.
I am confident that we can continue to build on our established foundations and
to move to the next stage in our growth strategy. With that in mind I believe
the future for Liberty is exciting.
Geoffroy de la Bourdonnaye
Chief Executive
Liberty Plc
25th September 2007
LIBERTY PLC - KEY FINANCIAL HIGHLIGHTS
--------------------------------------
During the six months ended 30th June 2007, Liberty Plc has continued its
transformation into a dynamic retail destination, underpinned by a strong and
expanding retail brand. The historical trading and balance sheet performance of
Liberty Plc is summarised below:-
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
Financial performance
---------------------
Total revenue #'000 20,758 20,279 44,575
Operating EBITDA before brand #'000 378 (68) 1,091
expenditure
Operating loss before brand
expenditure #'000 (721) (821) (676)
Brand expenditure #'000 (1,554) (1,085) (1,971)
Pre-tax loss #'000 (2,275) (1,906) (2,647)
Recognised income and expense #'000 114 620 8,859
===== ===== =====
30th June 30th June 31st December
2007 2006 2006
Balance sheet composition
-------------------------
Intangible asset - brand #'000 18,200 18,200 18,200
Property, plant and equipment #'000 38,810 30,083 36,587
Net debt #'000 (7,316) (882) (1,191)
Adjusted equity attributable to #'000 48,407 40,164 44,887
shareholders of MWB Group in
Liberty Plc
Adjusted equity attributable to
shareholders of MWB Group in
Liberty Plc, in pence per MWB
Group Plc share Pence 60p 43p 56p
===== ===== =====
FINANCIAL REVIEW
for the six months ended 30th June 2007
---------------------------------------
INTRODUCTION
------------
The Chairman's Statement and Operational Reviews provide information on the
Group's principal operations and the Board's expectations for the future.
This Financial Review covers in greater depth the more significant
features of the financial statements for the six months ended 30th June 2007,
which include an independent valuation of the Group's properties at that date.
OBJECTIVES
----------
The strategy of the Company, led by the activities of the Board, is to realise
the Group's assets in cash or cash equivalents over the remainder of the period
of its Business Plan to 31st December 2008. This emanates from the proposals set
out in the May 2002 Circular which were approved by shareholders at an
extraordinary general meeting held in May 2002. This provides a clear focus for
all activities of the Group.
At an extraordinary general meeting held in May 2002, Shareholders approved
implementation of the Cash Distribution Programme. At the time, the Company's
share price was 92p and the Board set itself the target of returning at least
200p per share or #220m in cash or cash equivalent to Shareholders, initially by
December 2005. This was subsequently extended a further three years to December
2008 in order to enable Shareholders to benefit from the significant increase in
value being created in the Company's operating businesses.
Throughout this time, the Board has remained highly focused in delivering the
Cash Distribution Programme in the manner originally envisaged. This has
involved property sales totalling more than #600 million by the date of this
review, all at prices well in excess of recent valuations and original cost. As
a result, the Group has paid down the majority of its debt from the time of
implementation of the programme, the Group's three core operating businesses
have been significantly enhanced, we have created a strong and vibrant Group
going forward and the Company's share price has increased from 99p immediately
prior to the issue of the May 2002 Circular, to 275p at the date of this report.
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF MWB GROUP PLC
----------------------------------------------------
During the six months ended 30th June 2007, the Group produced an increase in
equity attributable to shareholders by growth achieved across all areas of the
Group. As a result there was a net increase in equity attributable to
shareholders of MWB Group Plc. At the per share level, this resulted in a net
increase in equity attributable to shareholders by 164p from 123p to 287p per
share.
The movement in Equity attributable to shareholders of MWB during the period is
summarised in the following table:-
Six months ended
30th June 2007
Pence
#'000 per share
Equity attributable to shareholders of MWB Group Plc at 99,322 123p
1st January 2007
Movements during the period:
Revaluation surplus on Group property portfolio 135,902 168p
Less minority interest in Malmaison Holdings Limited (390) -
Retained loss (3,682) (5p)
Changes in fair value of derivative financial instruments (644) -
Actuarial gain on defined benefit pension schemes 857 1p
Other movements 124 -
------- ---
Equity attributable to shareholders of MWB Group Plc at
30th June 2007 231,489 287p
======= ===
ADJUSTED EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF MWB GROUP PLC
-------------------------------------------------------------
Under Adopted IFRS, the Company's interests in its two listed subsidiaries, MWB
Business Exchange Plc and Liberty Plc, continue to be consolidated in the Group
financial statements inclusive of their freehold and short leasehold properties
at current valuation or cost. However, these property valuations reflect only
the values of the properties themselves and the financial statements do not
reflect the current market value of the Group's shareholdings in these two
listed subsidiaries.
Both subsidiaries are quoted on AIM of the London Stock Exchange and, therefore,
a market value for the Group's shareholding in each of the two companies is
readily available.
In order that shareholders are aware of the underlying value of the Group, the
increase in Equity attributable to shareholders of MWB Group Plc as a result of
assessing these two investments by reference to their market value at 30th June
2007 and 31st December 2006, is set out below.
30th June 2007 31st December 2006
Pence Pence
per per
#'000 share #'000 share
Equity attributable to shareholders of
MWB Group Plc per financial statements 231,489 287p 99,322 123p
Unrealised surplus of market value of
MWB Group's shareholding in MWB Business
Exchange Plc(1) 55,405 69p 60,378 75p
Unrealised surplus of market value of
MWB Group's shareholding in Liberty Plc(2) 14,782 18p 11,431 14p
------- --- ------- ---
301,676 374p 171,131 212p
Less Central Incentive Scheme and Bonus
Plan amounts that would become payable
on realisation at this value (45,347) (56p) (22,049) (27p)
------- --- ------- ---
Total Adjusted equity attributable to
shareholders of MWB Group Plc 256,329 318p 149,082 185p
======= === ======= ===
Notes
-----
(1) The unrealised surplus of market value of MWB Group's 67.9% shareholding in
MWB Business Exchange Plc is based on the share price of MWB Business Exchange
Plc at 30th June 2007 of 171p (31st December 2006: 179p) per share, and is after
deducting deferred consideration that would become payable on realisation of the
Group's investment in MWB Business Exchange and divisional bonuses payable on
realisation at this value.
(2) The unrealised surplus of market value of MWB Group's 68.3% shareholding in
Liberty Plc is based on the share price of Liberty Plc at 30th June 2007 of 320p
(31st December 2006: 295p) per share, after deducting divisional bonuses that
would become payable on realisation at this value.
In addition to the assessment above, shareholders should be aware that the
Adjusted equity attributable to shareholders of MWB Group Plc of 318p (31st
December 2006: 185p) per share above does not reflect the market value of the
Malmaison and Hotel du Vin business, as this is not a listed subsidiary for
which a market value can be readily confirmed. The Board is confident that the
value of the Group's 82.5% interest in the Malmaison and Hotel du Vin business
is significantly higher than the #236m or 293p per share for this business
within Adjusted equity attributable to shareholders of MWB Group Plc, thus
demonstrating a further enhancement in underlying equity value of the Group
above the adjusted figure of 318p per share in the table above. The Chairman has
referred to this further in his Statement.
The Adjusted equity attributable to shareholders of MWB Group Plc is analysed as
follows:-
30th June 2007 31st December 2006
Pence Pence
per per
#'000 share #'000 share
Malmaison and Hotel du Vin 236,197 293p 106,380 132p
MWB Business Exchange Plc 64,776 80p 68,212 85p
Liberty Plc 48,407 60p 44,887 56p
Hotel investments and West India Quay
apartments - - 4,173 5p
Group debt and incentives payable, less
cash and other assets (93,051) (115p) (74,570) (93p)
------ --- ------ ---
Total Adjusted equity attributable to
shareholders of MWB Group Plc 256,329 318p 149,082 185p
======= === ======= ===
NET ASSET VALUE
---------------
The net assets of the Group are financed by Equity attributable to shareholders
of MWB Group Plc and minority interests. The sources of finance of the Group at
31st December 2006 in the consolidated balance sheet and at previous period ends
were as follows:-
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
Equity attributable to shareholders of
MWB Group Plc 231,489 118,488 99,322
Minority interests 90,781 57,988 53,963
------- ------- -------
Net asset value at period end 322,270 176,476 153,285
======= ======= =======
The analysis of net assets in the consolidated balance sheet across the Group's
operations as revealed by the Consolidated Balance Sheet at 30th June 2007, and
at previous period ends, is as follows:-
Equity
Net assets/ attributable to
(liabilities) Net Less shareholders
before (Net debt)/ assets/ minority of MWB
net debt cash (liabilities) interests Group Plc
#'000 #'000 #'000 #'000 #'000
At 30th June 2007
-----------------
Malmaison and Hotel du Vin 526,979 (224,285) 302,694 (66,497) 236,197
MWB Business Exchange Plc 13,974 (32) 13,942 (4,571) 9,371
Liberty Plc 58,793 (7,316) 51,477 (17,852) 33,625
Group debt, less cash
and other assets (116) (45,727) (45,843) (1,861) (47,704)
------- ------- ------- ------ -------
599,630 (277,360) 322,270 (90,781) 231,489
======= ======= ======= ====== =======
Equity attributable to
shareholders of
MWB Group Plc in pence
per share 287p
===
Equity
Net assets/ attributable to
(liabilities) Net Less shareholders
before (Net debt)/ assets/ minority of MWB
net debt cash (liabilities) interests Group Plc
#'000 #'000 #'000 #'000 #'000
At 31st December 2006
---------------------
Malmaison and Hotel du Vin 335,956 (199,093) 136,863 (30,483) 106,380
Hotel investments (660) 374 (286) (1,909) (2,195)
MWB Business Exchange Plc 9,515 2,162 11,677 (3,843) 7,834
Liberty Plc 52,423 (1,191) 51,232 (17,776) 33,456
West India Quay apartments 2,721 3,647 6,368 - 6,368
Group debt, less cash and
other assets (2,297) (50,272) (52,569) 48 (52,521)
------- ------- ------- ------ -------
397,658 (244,373) 153,285 (53,963) 99,322
======= ======= ======= ====== =======
Equity attributable to
shareholders of
MWB Group Plc in pence
per share 123p
===
Equity
Net assets/ attributable to
(liabilities) Net Less shareholders
before (Net debt)/ assets/ minority of MWB
net debt cash (liabilities) interests Group Plc
#'000 #'000 #'000 #'000 #'000
At 30th June 2006
-----------------
Malmaison and Hotel du Vin 285,141 (181,187) 103,954 (15,766) 88,188
Hotel investments 71,592 (45,197) 26,395 (17,536) 8,859
MWB Business Exchange Plc (120) 7,398 7,278 (2,193) 5,085
Liberty Plc 44,516 (882) 43,634 (15,359) 28,275
West India Quay apartments 28,255 (541) 27,714 (6,996) 20,718
Group debt, less cash and
other assets (4,820) (27,679) (32,499) (138) (32,637)
------- ------- ------- ------ -------
424,564 (248,088) 176,476 (57,988) 118,488
======= ======= ======= ====== =======
Equity attributable to
shareholders of
MWB Group Plc in pence
per share 125p
===
REVIEW OF PROPERTY, PLANT AND EQUIPMENT
---------------------------------------
Valuation surplus on property portfolio at 30th June 2007
A valuation of the Group's freehold and long leasehold interests in its property
at 30th June 2007 was undertaken by DTZ Debenham Tie Leung. This valuation was
performed on the basis of Market Value. The net surplus over previous book value
before minority interests for the six months ended 30th June 2007 totalled
#165m, which has been included in these financial statements.
In accordance with normal valuation practice, the valuations of the Group's
hotel interests include value ascribed for plant, machinery, fixtures and
fittings forming part of the service installations of the building. They
therefore represent a valuation of the total interest of the Group in those
properties. The valuations exclude the value of any goodwill that may arise from
the present occupation of the properties and this is not recorded separately in
the financial statements of the Group.
In accordance with normal valuation practice, the valuation of the Group's
retail interests includes value ascribed to plant, machinery and fittings
forming part of the services and installation of the building, but excludes
moveable shop fittings.
All property interests owned by MWB Business Exchange Plc are short leasehold
interests; these interests are not revalued at each period end and are recorded
at the lower of cost and net realisable value.
Surpluses or deficits arising on valuation of the Group's operational properties
are transferred to revaluation reserve, while impairment of operational
properties to below their historical cost is charged directly to the income
statement.
Trading properties and operational properties in the course of construction are
recorded at the lower of cost and net realisable value and are therefore not
revalued upwards in the Group financial statements.
The valuation surplus credited to the revaluation reserve for the six months
ended 30th June 2007 was #135.9m and arose as follows:-
Less Credited
previous Less to
Gross book Gross minority revaluation
valuation value surplus interests reserve
#'000 #'000 #'000 #'000 #'000
Malmaison 314,542 (216,634) 97,908 (17,134) 80,774
Hotel du Vin 187,080 (121,492) 65,588 (11,478) 54,110
Liberty Plc 37,000 (35,510) 1,490 (472) 1,018
------- ------- ------- ------ -------
538,622 (373,636) 164,986 (29,084) 135,902
======= ======= ======= ====== =======
Portfolio analysis by division
------------------------------
At 30th June 2007, the Group held the majority of its direct property interests
as non-current assets. These are disclosed in the consolidated balance sheet at
30th June 2007 as follows:-
30th June 31st December
2007 2006
#'000 #'000
Operational properties 503,894 336,150
Operational properties in the course of
construction 40,740 27,144
Plant and equipment 55,639 43,558
Trading properties 8,100 -
------- -------
Total property interests at end of period 608,373 406,852
======= =======
The above interests are analysed as follows:-
Percentage of
30th June 30th June 31st December
2007 2007 2006
#'000 % #'000
Hotels
Malmaison 319,754 53 212,064
Hotel du Vin 206,123 34 124,894
------- --- -------
525,877 87 336,958
MWB Business Exchange Plc 35,369 5 30,691
Liberty Plc
Liberty store, offices and other
properties 38,810 7 36,587
Other 8,317 1 2,616
------- --- -------
Total property interests at end of
period 608,373 100 406,852
======= === =======
REVIEW OF FUNDING AND LOAN FACILITIES
-------------------------------------
Net debt
--------
The Group's loans, borrowings and cash are included in the consolidated balance
sheet at 30th June 2007 as follows:-
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
Composition at period end
-------------------------
Total loans and overdrafts in
note 12 299,106 272,983 260,832
Fair value of derivative
financial instruments 46 883 (1,462)
Long leasehold obligations 706 712 710
------- ------- -------
Total loans 299,858 274,578 260,080
Less cash net of overdrafts (22,498) (26,490) (15,707)
------- ------- -------
Total net debt at period end 277,360 248,088 244,373
======= ======= =======
Analysis by operating business
------------------------------
Malmaison and Hotel du Vin 224,285 181,187 199,093
Hotel investments - net cash - 45,197 (374)
MWB Business Exchange Plc
- net cash 32 (7,398) (2,162)
Liberty Plc 7,316 882 1,191
Central debt 45,727 28,220 46,625
------- ------- -------
277,360 248,088 244,373
======= ======= =======
Movement in net debt during the period
--------------------------------------
The movement in total net debt during the six month period ended 30th June 2007
arose as follows:-
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
Total net debt at start of the period 244,373 302,067 302,067
Debt drawn on expansion of Malmaison
and Hotel du Vin 19,707 8,074 14,903
Net proceeds received from sales of
properties, including Old Bailey, West
India Quay, Argyle Street
and Park Lane (5,077) (72,250) (158,058)
Net debt repaid on West India Quay
development - (2,082) (46,896)
Buy back of ordinary shares - - 56,382
Net cash outflow/(inflow) from other
Group operations during the period 18,357 12,279 75,975
------- ------- -------
Total net debt at period end 277,360 248,088 244,373
======= ======= =======
Average cost of borrowings at period
end, inclusive of margin 7.9% 6.4% 6.4%
======= ======= =======
Net debt relating to Equity attributable to shareholders of MWB
---------------------------------------------------------------
Certain elements of the Group's net debt have been drawn by subsidiaries that
are not wholly owned by the Group. These comprise the Group's majority interests
in its three operating businesses of MWB Malmaison Holdings Limited, MWB
Business Exchange Plc and Liberty Plc.
The net debt relating to equity attributable to shareholders of MWB Group Plc at
30th June 2007 amounted to #235.8m, calculated as follows:-
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
Total net debt as above 277,360 248,088 244,373
Less net debt attributable to minority
interests (41,568) (45,080) (33,310)
------- ------- -------
Total net debt attributable to equity
attributable to shareholders of MWB Group 235,792 203,008 211,063
======= ======= =======
Gearing
-------
At 30th June 2007, gearing was 86%, calculated as follows:-
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
Total net debt 277,360 248,088 244,373
Net assets 322,270 176,476 153,285
Gearing - total net debt divided by
net assets 86% 141% 159%
======= ======= =======
REVIEW OF EARNINGS
------------------
Results
-------
The total recognised income and expense for the six months ended 30th June 2007,
analysed between the share attributable to shareholders of MWB Group Plc and the
share attributable to minority interests, is as follows:-
Equity
Shareholders
Total for Minority of MWB
the period interest Group Plc
Six months ended 30th June 2007 #'000 #'000 #'000
Income statement
Loss for the period (4,029) (347) (3,682)
Credited to equity through reserves
Unrealised gains on property revaluations
net of tax 164,986 29,084 135,902
Actuarial gain on defined benefit pension
scheme net of tax 1,255 398 857
Effective portion of changes in fair value
of derivative financial hedges (658) (14) (644)
Net foreign exchange translation
differences (118) (78) (40)
------- ------ -------
Total recognised income and expense for
the period 161,436 29,043 132,393
======= ====== =======
Equity
Shareholders
Total for Minority of MWB
the period interest Group Plc
Six months ended 30th June 2006 #'000 #'000 #'000
Income statement
Profit for the period 1,072 (923) 1,995
Credited to equity through reserves
Unrealised gains on property revaluations
net of tax 7,378 1,437 5,941
Deferred tax released on sale of
properties 8,462 7,345 1,117
Actuarial gain on defined benefit pension
scheme net of tax 1,497 347 1,150
Effective portion of changes in fair value
of derivative financial hedges 1,652 290 1,362
Net foreign exchange translation
differences 184 157 27
------ ----- ------
Total recognised income and expense for
the period 20,245 8,653 11,592
====== ===== ======
Equity
Shareholders
Total for Minority of MWB
the year interest Group Plc
Year ended 31st December 2006 #'000 #'000 #'000
Income statement
Profit for the period 9,013 8,031 982
Credited to equity through reserves
Unrealised gains on property revaluations
net of tax 19,949 4,511 15,438
Deferred tax released on sale of properties 8,462 7,345 1,117
Actuarial gain on defined benefit pension
scheme net of tax 4,935 1,570 3,365
Effective portion of changes in fair value
of derivative financial hedges 3,997 700 3,297
Net foreign exchange translation differences (169) (304) 135
------ ------ ------
Total recognised income and expense for the
period 46,187 21,853 24,334
====== ====== ======
Summary of earnings
-------------------
The Board's prime measure of return used to monitor the results of the operating
divisions is the level of earnings before interest, taxation, depreciation and
amortisation, or EBITDA. The results before minority interests for the six
months ended 30th June 2007, together with comparative information for previous
periods is summarised below:-
Profit/ Recognised
Group (loss) income and
revenue EBITDA EBIT before tax expense
Six months ended 30th June 2007 #'000 #'000 #'000 #'000 #'000
Malmaison and Hotel du Vin
Operating income 41,942 10,036 6,873 (2,711) 160,134
Costs incurred on abortive
Vector transaction - (4,610) (4,610) (4,610) (4,610)
------- ------ ----- ----- -------
41,942 5,426 2,263 (7,321) 155,524
------- ------ ----- ----- -------
Liberty Plc
Operating income 20,758 378 (570) (721) 1,668
Expenditure on brand - (1,554) (1,554) (1,554) (1,554)
------- ------ ----- ----- -------
20,758 (1,176) (2,124) (2,275) 114
------- ------ ----- ----- -------
MWB Business Exchange Plc 47,910 6,231 3,526 3,481 3,481
------- ------ ----- ----- -------
Others - 6,547 6,547 6,551 6,551
Group debt less cash and
other assets - - - (1,880) (1,880)
------- ------ ----- ----- -------
- 6,547 6,547 4,671 4,671
Head office administration - (2,253) (2,354) (2,354) (2,354)
------- ------ ----- ----- -------
- 4,294 4,193 2,317 2,317
------- ------ ----- ----- -------
110,610 14,775 7,858 (3,798) 161,436
======= ====== ===== ===== =======
Notes
-----
1. The components of recognised income and expense are shown in the Group
primary statement of the financial statements.
2. EBITDA = Earnings before interest, taxation, depreciation and amortisation.
3. EBIT = Earnings before interest and taxation.
Profit/ Recognised
Group (loss) income and
revenue EBITDA EBIT before tax expense
Year ended 31st December 2006 #'000 #'000 #'000 #'000 #'000
Malmaison and Hotel du Vin
Operating income 79,101 23,389 17,598 5,101 25,953
------- ------ ------ ------ ------
Hotel investments
Operating income 16,563 5,825 3,653 (11) (1,495)
Sale of Park Lane hotel - 3,729 3,729 3,729 5,318
Sale of West India Quay hotel - 5,825 5,825 5,825 10,177
------- ------ ------ ------ ------
16,563 15,379 13,207 9,543 14,000
------- ------ ------ ------ ------
Liberty Plc
Operating income 44,575 1,091 (451) (676) 10,830
Expenditure on brand - (1,971) (1,971) (1,971) (1,971)
------- ------ ------ ------ ------
44,575 (880) (2,422) (2,647) 8,859
------- ------ ------ ------ ------
MWB Business Exchange Plc 82,306 9,307 7,827 8,043 8,048
------- ------ ------ ------ ------
West India Quay - apartment sales 9,364 3,320 3,320 2,970 2,909
Others 3,305 (1,680) (1,836) (1,843) 103
Group debt less cash and
other assets - - - (3,213) (3,213)
------- ------ ------ ------ ------
12,669 1,640 1,484 (2,086) (201)
Head office administration - (9,148) (9,288) (9,288) (10,472)
------- ------ ------ ------ ------
12,669 (7,508) (7,804) (11,374) (10,673)
------- ------ ------ ------ ------
235,214 39,687 28,406 8,666 46,187
======= ====== ====== ====== ======
Profit/ Recognised
Group (loss) income and
revenue EBITDA EBIT before tax expense
Six months ended 30th June 2006 #'000 #'000 #'000 #'000 #'000
Malmaison and Hotel du Vin
Operating income 36,557 9,713 6,900 585 12,609
------- ------ ------ ----- ------
Hotel investments
Operating income 14,086 3,542 1,535 (2,130) 2,941
Sale of Park Lane hotel - 3,729 3,729 3,729 3,729
------- ------ ------ ----- ------
14,086 7,271 5,264 1,599 6,670
Liberty Plc
Operating income 20,279 (68) (818) (821) 1,705
Expenditure on brand - (1,085) (1,085) (1,085) (1,085)
------- ------ ------ ----- ------
20,279 (1,153) (1,903) (1,906) 620
MWB Business Exchange Plc 39,285 3,878 3,307 3,421 3,426
------- ------ ------ ----- ------
West India Quay - apartment sales 5,093 4,012 4,012 3,858 3,181
Others 1,579 241 130 117 117
Group debt less cash and
other assets - - - (2,285) (2,350)
------- ------ ------ ----- ------
6,672 4,253 4,142 1,690 948
Head office administration - (4,005) (4,077) (4,077) (4,028)
------- ------ ------ ----- ------
6,672 248 65 (2,387) (3,080)
------- ------ ------ ----- ------
116,879 19,957 13,633 1,312 20,245
======= ====== ====== ===== ======
Taxation
--------
The net tax charge for the six months ended 30th June 2007 primarily reflects
the MWB Group's share of tax incurred on profits in the Group's minority
interest in Japan. This arose as follows:-
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
Net tax (charge)/credit per income
statement (231) (240) 347
49% minority interest in tax charge of
Japanese subsidiary of Liberty Plc,
resulting in a credit to MWB
Shareholders 98 117 214
--- --- ---
(133) (123) 561
32% minority interest in tax charge of
Liberty Plc resulting in a credit to
MWB Shareholders 31 39 71
--- --- ---
Net tax (charge)/credit received by
Equity shareholders of MWB Group Plc (102) (84) 632
=== === ===
Earnings per share and recognised income and expense per share
--------------------------------------------------------------
The earnings per share and recognised income and expense per share figures have
been calculated as follows:-
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
Earnings/(loss) per Income
Statement attributable to
shareholders of
MWB Group Plc #'000 (3,682) 1,995 982
Weighted average number of shares
in issue during period '000 80,522 103,271 61,810
Earnings/(loss) per share based
on Income Statement Pence (4.6p) 1.9p 1.6p
====== ======= ======
Recognised income and expense
attributable to shareholders of
MWB Group Plc #'000 132,393 11,592 24,334
Weighted average number of shares
in issue during period '000 80,522 103,271 61,810
Recognised income per share based
on recognised income and
expense Pence 164.4p 11.2p 39.4p
====== ======= ======
Dividend
--------
Shareholders approved implementation of the Cash Distribution Programme and
associated cessation of annual revenue distributions at a meeting of
shareholders held in May 2002. The Board is continuing to implement the Cash
Distribution Programme and to direct disposal proceeds to the repayment of net
debt and to the buy-back of shares by the Company, thus returning cash to
shareholders.
The Directors envisage distributing further funds to shareholders by means of
buy-backs of ordinary shares, tender offers to shareholders, cash distributions,
demergers, distributions of assets and similar value distribution programmes in
the years ahead.
Cash flow
---------
The consolidated cash flow statement shows the funds generated by the
Group, those raised from external sources, the investments made and the effect
thereof on the Group's cash position.
This can be summarised as follows:-
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
Net cash inflow/(outflow) from
operating activities (7,563) (3,210) 3,834
Net cash inflow/(outflow) from
investing activities (25,858) 88,958 132,341
Net cash received/(used) in financing
activities 40,212 (100,819) (162,029)
------ ------- -------
Net increase/(decrease) decrease in
cash and cash equivalents 6,791 (15,071) (25,854)
Opening cash and cash equivalents 15,707 41,561 41,561
------ ------- -------
Closing cash and cash equivalents 22,498 26,490 15,707
====== ======= =======
Conclusion
----------
The six months ended 30th June 2007 have been another highly successful period
for the Group. Adjusted equity attributable to shareholders at #256m or 318p per
share, represents a 11% surplus over the consolidated values in our Group
balance sheet. In addition to this, the Board is confident that the value of the
Group's 82.5% equity interest in the Malmaison and Hotel du Vin business is
significantly higher than the #236m at which this is included in the financial
statements.
The share price at the date of approval of these financial statements is 275p,
representing an increase of 14% since 1st January 2007. This is after the
significant increase of 127% in the share price as revealed in the latest
audited financial statements of the Group for the eighteen months ended 31st
December 2006. The asset realisation process is well advanced and the Board
plans this to be substantially completed by the end of December 2008.
Andrew Blurton
Group Finance Director
25th September 2007
CONSOLIDATED INCOME STATEMENT
for the six months ended 30th June 2007
---------------------------------------
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
Notes #'000 #'000 #'000
--------------------------------------------------------------------------------
Revenue 110,610 116,879 235,214
Cost of sales (98,081) (99,728) (200,270)
--------------------------------------------------------------------------------
Gross profit 12,529 17,151 34,944
Administrative expenses (6,773) (7,233) (15,424)
--------------------------------------------------------------------------------
Operating profit 5,756 9,918 19,520
Profit/(loss) on disposal of
property, plant and equipment 6,712 - (668)
Profit/(loss) on disposal of
subsidiary companies 3 (4,610) 3,715 9,554
Finance income 519 799 2,240
Finance expense 5 ( 12,175) (13,120) (21,980)
--------------------------------------------------------------------------------
Profit/(loss) before taxation (3,798) 1,312 8,666
Taxation 6 (231) (240) 347
--------------------------------------------------------------------------------
Profit/(loss) for the period (4,029) 1,072 9,013
================================================================================
Attributable to:
Equity shareholders of the Company (3,682) 1,995 982
Minority interests 7 (347) (923) 8,031
--------------------------------------------------------------------------------
Profit/(loss) for the period (4,029) 1,072 9,013
================================================================================
Earnings/(loss) per share (basic
and diluted) 8 (4.6p) 1.9p 1.6p
================================================================================
All results relate to continuing operations. The notes form part of these
financial statements.
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
for the six months ended 30th June 2007
-------------------------------------------------------
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Unrealised gains on property
revaluations net of tax 164,986 7,378 19,949
Deferred tax released on sale of
properties - 8,462 8,462
Actuarial gain on defined benefit
pension scheme net of tax 1,255 1,497 4,935
Effective portion of changes in fair
value of derivative financial hedges (658) 1,652 3,997
Net foreign exchange translation
differences (118) 184 (169)
--------------------------------------------------------------------------------
Income and expense recognised directly
to equity 165,465 19,173 37,174
(Loss)/profit for the period (4,029) 1,072 9,013
--------------------------------------------------------------------------------
Total recognised income and expense
for the period 161,436 20,245 46,187
================================================================================
Attributable to:
Equity shareholders of the Company 132,393 11,592 24,334
Minority interests 29,043 8,653 21,853
--------------------------------------------------------------------------------
Total recognised income and expense
for the period 161,436 20,245 46,187
================================================================================
Total recognised income and expense
attributable to shareholders of MWB
Group in pence per share (note 8) 164.4p 11.2p 39.4p
================================================================================
CONSOLIDATED BALANCE SHEET
at 30th June 2007
--------------------------
30th June 30th June 31st December
2007 2006 2006
Notes #'000 #'000 #'000
--------------------------------------------------------------------------------
Non-current assets
Intangible asset 18,200 18,200 18,200
Operational properties 9 503,894 304,496 336,150
Operational properties in the
course of construction 9 40,740 - 27,144
Plant and equipment 9 55,639 35,705 43,558
Derivative financial instruments - - 1,462
--------------------------------------------------------------------------------
618,473 358,401 426,514
--------------------------------------------------------------------------------
Current assets
Trading properties 8,100 2,221 -
Inventories 8,804 8,704 9,126
Trade and other receivables 43,609 45,161 41,751
Cash and cash equivalents 22,530 26,490 16,898
--------------------------------------------------------------------------------
83,043 82,576 67,775
--------------------------------------------------------------------------------
Asset classified as held for sale - 93,805 -
--------------------------------------------------------------------------------
Total assets 701,516 534,782 494,289
--------------------------------------------------------------------------------
Current liabilities
Trade and other payables 10 (68,781) (62,995) (64,566)
Tax payable (223) (1,762) (783)
Overdrafts (32) - (1,191)
Loans and borrowings 11 (42,718) (55,318) (23,239)
--------------------------------------------------------------------------------
(111,754) (120,075) (89,779)
--------------------------------------------------------------------------------
Non-current liabilities
Loans and borrowings 12 (257,094) (218,377) (238,303)
Derivative financial instruments (46) (883) -
Employee benefits 4 (97) (4,938) (1,548)
Other provisions 14 - (6,107) (3,400)
Other payables and accruals 15 (10,255) (7,926) (7,974)
--------------------------------------------------------------------------------
(267,492) (238,231) (251,225)
--------------------------------------------------------------------------------
Total liabilities (379,246) (358,306) (341,004)
--------------------------------------------------------------------------------
Net assets 322,270 176,476 153,285
================================================================================
Equity
Called up share capital 40,261 47,446 40,261
Share premium account 79,563 79,563 79,563
Capital redemption reserve 30,663 23,478 30,663
Revaluation reserve 16 202,495 88,115 66,715
Hedging reserve 16 (31) (883) 1,205
Translation reserve 16 (8) 279 37
Merger reserve 9,403 9,403 9,403
Other reserves 1,783 1,783 1,783
Retained earnings 16 (132,640) (130,696) (130,308)
--------------------------------------------------------------------------------
Equity attributable to
shareholders of the Company 17 231,489 118,488 99,322
Minority interests 18 90,781 57,988 53,963
--------------------------------------------------------------------------------
Total equity 322,270 176,476 153,285
================================================================================
Equity attributable to
shareholders of the Company in
pence per share 19 287p 125p 123p
================================================================================
The notes form part of these financial statements.
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30th June 2007
---------------------------------------
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
(Loss)/profit for the period (4,029) 1,072 9,013
Adjustments for non-cash items
Taxation 231 240 (347)
Finance cost 12,175 13,120 21,980
Finance income (519) (799) (2,240)
(Profit)/loss on disposal of property,
plant and equipment (6,712) - 668
Loss/(profit) on disposal of
subsidiary companies 4,610 (3,715) (9,554)
Depreciation and amortisation 6,917 6,324 11,281
Currency translation differences (118) (192) (462)
--------------------------------------------------------------------------------
Cash flows from operations before
changes in working capital 12,555 16,050 30,339
Change in trading properties (8,100) 1,528 3,750
Change in inventories 322 (46) (552)
Change in trade and other receivables (1,636) (3,618) (12,992)
Change in trade and other payables 8,367 (1,936) 12,085
Change in provisions and employee
benefits (4,851) (1,650) (4,812)
--------------------------------------------------------------------------------
Cash generated from operations 6,657 10,328 27,818
Interest paid (14,091) (13,520) (23,505)
Tax paid (129) (18) (479)
--------------------------------------------------------------------------------
Net cash from operating activities (7,563) (3,210) 3,834
--------------------------------------------------------------------------------
Cash flows from investing activities
Interest received 520 806 2,229
Proceeds from sale of property, plant
and equipment 8,776 105,000 -
Cash receipts from sale of subsidiary
companies, net of cash sold - - 208,664
Purchase of property, plant and
equipment (35,154) (16,848) (78,552)
--------------------------------------------------------------------------------
Net cash from investing activities (25,858) 88,958 132,341
--------------------------------------------------------------------------------
Cash flows from financing activities
Purchase of own shares - (26,156) (56,555)
Issue of shares - 173 173
Borrowings drawn 39,830 20,585 69,706
Borrowings repaid (1,560) (87,261) (148,181)
Receipts from/(payments) to minority
interests 7,465 (6,732) (25,462)
Decrease in hire purchase and leasing
contracts (5,523) (1,428) (1,710)
--------------------------------------------------------------------------------
Net cash used in financing activities 40,212 (100,819) (162,029)
--------------------------------------------------------------------------------
Net increase/(decrease) in cash and
cash equivalents 6,791 (15,071) (25,854)
Opening cash and cash equivalents 15,707 41,561 41,561
--------------------------------------------------------------------------------
Closing cash and cash equivalents 22,498 26,490 15,707
================================================================================
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
1. ACCOUNTING POLICIES
----------------------
Basis of preparation and accounting policies
--------------------------------------------
The interim results of the Group for the six months ended 30th June 2007
incorporate the results of the Company and its subsidiary undertakings for the
period then ended. The results have been prepared on the basis of the accounting
policies adopted in the financial statements of the Group for the eighteen
months ended 31st December 2006, consistently applied in all material respects.
2. EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION AND AMORTISATION ("EBITDA")
-------------------------------------------------------------------------------
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
The EBITDA of the Group is calculated as
follows:-
Profit before finance income, finance
expense and taxation 7,858 13,633 28,406
Add back depreciation and amortisation
for the period 6,917 6,324 11,281
------ ------ ------
Total EBITDA for the period 14,775 19,957 39,687
====== ====== ======
3. (LOSS)/PROFIT ON DISPOSAL OF SUBSIDIARY COMPANIES
----------------------------------------------------
The (loss)/profit on disposal of subsidiary companies arose as follows:-
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Profit on disposal of subsidiary
owning the Group's Park Lane hotel,
London - 3,715 3,729
Profit on disposal of subsidiary
owning the Group's West India Quay hotel - - 5,825
Costs of abortive Vector Hospitality
transaction (4,610) - -
----- ----- -----
(4,610) 3,715 9,554
===== ===== =====
On 4th May 2007, the Board of the Company sent a circular to Shareholders
setting out details of a proposed sale to Vector Hospitality Plc of a portfolio
of 24 long leasehold properties comprising the majority of the Malmaison and
Hotel du Vin properties owned by the Group at that date, for a minimum
consideration of #495.1m. That circular also included notice of an extraordinary
general meeting of the Company at which a resolution relating to the proposed
sale to Vector Hospitality was approved by Shareholders. On 7th June
2007, the Group was informed by Vector Hospitality Plc that the fundraising
proposed to be undertaken by it to fund this proposed acquisition would not take
place and that in accordance with the share purchase agreement with the Group,
Vector Hospitality would not be able to complete the acquisition of these long
leasehold interests. The proposed sale therefore terminated on 30th June 2007
and the costs in relation thereto have been written off.
On 31st May 2006 the Company completed the disposal of the entire issued share
capital of its subsidiary MWB Park Lane Hotel Limited and its subsidiary MWB
Park Lane Hotel No. 2 Limited (collectively "PLH"). PLH owned the freehold
interest in a Marriott operated hotel at 140 Park Lane, London W1 and was owned
70% by the Company and 30% by minority interests.
On 21st July 2006, the Company disposed of the entire issued share capital of
its subsidiary MWB West India Quay (Eastern) Limited and its partnership
interests (collectively "West India Quay Eastern"). West India Quay Eastern
owned the freehold interest in a Marriott operated hotel at West India Quay,
London E14. West India Quay Eastern was owned 66.67% by the Company and 33.33%
by minority interests.
4. PENSIONS
-----------
Overall summary
---------------
The Company and its subsidiaries operate defined contribution pension schemes in
most areas of the Group. It also has two defined benefit pension schemes in its
68.3% owned subsidiary Liberty Plc. One of these is for certain UK employees of
its subsidiary Liberty Retail Plc, which has been closed to new entrants since
February 2001 and was closed to future accrual in January 2007. The pension
obligations of this scheme are guaranteed by the Company's 68.3% owned
subsidiary Liberty Plc but not by MWB Group Plc. The other defined benefit
pension scheme is a much smaller scheme for employees of the Japanese subsidiary
of Liberty. The assets of all pension schemes of the Group are held in separate
trust administered funds. The total pension charge of the Group for the six
months ended 30th June 2007 was #0.4m (six months ended 30th June 2006: #0.5m;
year ended 31st December 2006: #0.4m).
Defined benefit schemes of Liberty Retail Plc
---------------------------------------------
For the UK defined benefit scheme, which is closed to new entrants, the current
service cost is expected to increase as members of the scheme approach
retirement. As the scheme is closed to future benefit accrual, there is no
expected contribution rate for future years calculated by reference to
Contribution Earnings of Participating Earnings. The expected contribution for
future years for the UK Scheme is #360,000 per annum, payable by Liberty Plc.
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Summary
Cumulative net liability of UK Scheme (124) (4,993) (1,593)
Cumulative net assets of Japanese
Scheme 27 55 45
--- ----- -----
Total present value of employee
benefits (97) (4,938) (1,548)
=== ===== =====
5. FINANCE EXPENSE
------------------
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
The finance expense arose as follows:-
Unsecured Loan Stock 2009/2012 1,462 1,462 2,924
Bank loans and overdrafts 12,164 10,905 19,035
Finance leases and hire purchase
contracts - 31 37
Amortisation of debt issue costs 478 1,125 1,557
Defined benefit pension scheme net
financing income (13) (8) (36)
------ ------ ------
14,091 13,515 23,517
Less finance costs capitalised in
respect of development expenditure
before tax relief (1,916) (395) (1,537)
------ ------ ------
Total finance expense cost for the
period 12,175 13,120 21,980
====== ====== ======
6. TAXATION
-----------
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
The current taxation for the period arose as
follows:-
UK Corporation tax
Tax on result for the period (39) - -
Adjustment in respect of prior periods
following agreement of tax
liabilities - (1) 784
Foreign tax
Tax on profit for the period (192) (239) (386)
Adjustment in respect of prior periods - - (51)
--- --- ---
Taxation (charge)/credit (231) (240) 347
=== === ===
The taxation has been reduced from the amount that would arise from applying the
prevailing corporation tax rate to the profit/(loss) before taxation in the
consolidated income statement, as follows:-
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
UK corporation tax credit/(charge) at
30% for each period on the (loss)/
profit before taxation in consolidated
income statement 1,139 (394) (2,600)
Excess of capital allowances claimed
over depreciation charged 780 1,091 3,442
Expenditure permanently disallowed for
taxation purposes and unrelieved tax
losses (4,943) (232) (6,179)
Difference between taxation on
chargeable gains on disposals of
properties and accounting profits on
such disposals 1,523 (6,383) (4,146)
Taxation on overseas earnings at
higher rate than UK corporation tax (20) (56) (61)
Profits not taxable and capitalised
expenditure deductible for taxation
purposes 36 489 (1,066)
Tax losses brought forward from
earlier periods utilised in current
period 1,254 5,246 10,224
----- ----- ------
Total corporation tax and similar
taxes charge for the period (231) (239) (386)
Adjustment in respect of prior periods
following agreement of tax liabilities - (1) 733
----- ----- ------
Taxation (charge)/credit (231) (240) 347
===== ===== ======
After deducting all deferred tax liabilities, the Group had unrelieved capital
expenditure and interest payments from current and prior periods of
approximately #47 million at 30th June 2007. At the same date, it had net
trading losses carried forwards in certain parts of the Group of approximately
#60 million.
7. MINORITY INTERESTS
---------------------
Minority interests in the (loss)/profit on ordinary activities after taxation
for the period arose in the following divisions of the Group:-
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Malmaison and Hotel du Vin 840 230 1,442
MWB Business Exchange Plc (1,115) 828 2,459
Liberty Plc 622 (543) (706)
Central - West India Quay hotel - (272) 2,191
Central - 140 Park Lane Limited - (2,627) 290
Other central - 1,461 2,355
----- ----- -----
(347) (923) 8,031
===== ===== =====
8. EARNINGS/(LOSS) PER SHARE AND RECOGNISED INCOME AND EXPENSE PER SHARE
------------------------------------------------------------------------
Earnings/(Loss) per share
-------------------------
The earnings/(loss) per share figures are calculated by dividing the profit/
(loss) attributable to equity shareholders of the Company for the period, by the
weighted average number of shares in issue during the period, as follows:-
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
(Loss)/profit for the period
attributable to equity
shareholders of the Company #'000 (3,682) 1,995 982
====== ===== ======
Weighted average number of
ordinary shares in issue
during the period '000 80,522 103,271 61,810
====== ======= ======
(Loss)/earnings per share
(basic and diluted) Pence (4.6p) 1.9p 1.6p
====== ======= ======
Recognised income and expense per share
---------------------------------------
The figures for recognised income and expense attributable to shareholders of
the Company in pence per share are calculated by dividing the recognised income
and expense attributable to equity shareholders of the Company for the period,
by the weighted average number of shares in issue during the period, as follows:-
Six months Six months Year
ended ended ended
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Recognised income and expense
for the period attributable
to equity shareholders of
the Company #'000 132,393 11,592 24,334
======= ======= ======
Weighted average number of
ordinary shares in issue
during the period '000 80,522 103,271 61,810
======= ======= ======
Recognised income and expense
attributable to equity
Shareholders of the Company,
in pence per share Pence 164.4p 11.2p 39.4p
======= ======= ======
9. PROPERTY, PLANT AND EQUIPMENT
--------------------------------
-------------Operational properties---------------
Plant,
In the Operating machinery,
Long course of leasehold fixtures &
Freehold leasehold construction improvements equipment Total
#'000 #'000 #'000 #'000 #'000 #'000
-----------------------------------------------------------------------------------------------------------------------
Cost or valuation
At 1st January 2007 223,242 88,210 27,144 25,985 81,939 446,520
Additions 1,144 4,082 25,346 4,504 9,950 45,026
Reclassification 9,164 (5,360) (9,280) (929) 6,405 -
Disposals - - (2,470) - (89) (2,559)
Transfer to trading properties - (8,100) - - - (8,100)
Revaluation 113,872 50,202 - - - 164,074
------- ------- ------ ------ ------ -------
At 30th June 2007 347,422 129,034 40,740 29,560 98,205 644,961
------- ------- ------ ------ ------ -------
Depreciation
At 1st January 2007 - - - (1,287) (38,381) (39,668)
Charge for the period (724) (188) - (835) (4,198) (5,945)
Disposals - - - - 13 13
Revaluation 724 188 - - - 912
------- ------- ------ ------ ------ -------
At 30th June 2007 - - - (2,122) (42,566) (44,688)
------- ------- ------ ------ ------ -------
Net book value
at 30th June 2007 347,422 129,034 40,740 27,438 55,639 600,273
======= ======= ====== ====== ====== =======
Analysis of valuation
surplus for the period
Surplus credited to revaluation
reserve (note 16) 94,318 41,584 - - - 135,902
Surplus credited to minority
interests through revaluation
reserve 20,278 8,806 - - - 29,084
------- ------- ------ ------ ------ -------
Revaluation surplus reflected in
property, plant and equipment 114,596 50,390 - - - 164,986
======= ======= ====== ====== ====== =======
Investment
------properties------ -------Operational properties-------
Plant,
machinery,
Long Long Short fixtures &
Freehold leasehold Freehold leasehold leasehold equipment Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
-----------------------------------------------------------------------------------------------------------------------
Cost or valuation
At 1st January 2006 2,639 6,621 365,178 62,821 18,360 87,019 542,638
Additions 8,164 4,641 1,700 10 2,515 5,978 23,008
Reclassification (10,803) (11,262) 10,803 10,762 500 - -
Disposals - - (94,501) 483 (637) (3,782) (98,437)
Transfer to asset
classified as held for sale - - (79,055) - - (18,404) (97,459)
Revaluation - - (496) 6,932 - - 6,436
------ ------ ------- ------ ------ ------ -------
At 30th June 2006 - - 203,629 81,008 20,738 70,811 376,186
------ ------ ------- ------ ------ ------ -------
Depreciation
At 1st January 2006 - - - - (407) (28,589) (28,996)
Charge for the period - - (1,711) (158) (472) (3,927) (6,268)
Disposals - - 256 (23) - (5,548) (5,315)
Transfer to asset
classified as held for sale - - 696 - - 2,958 3,654
Revaluation - - 759 181 - - 940
------ ------ ------- ------ ------ ------ -------
At 30th June 2006 - - - - (879) (35,106) (35,985)
------ ------ ------- ------ ------ ------ -------
Net book value
at 30th June 2006 - - 203,629 81,008 19,859 35,705 340,201
====== ====== ======= ====== ====== ====== =======
-------------Operational properties---------------
Freehold
and long Plant,
leasehold In the Operating machinery,
investment Long course of leasehold fixtures &
properties Freehold leasehold construction improvements equipment Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
-----------------------------------------------------------------------------------------------------------------------
Cost or valuation
At 1st July 2005 4,540 388,915 60,597 - 16,347 93,646 564,045
Additions - 16,440 17,283 27,144 11,911 19,931 92,709
Reclassification (4,540) 2,500 1,753 - 287 - -
Disposals - (210,230) - - (2,560) (31,638) (244,428)
Reversal of prior period - 369 - - - - 369
impairments
Revaluation - 25,248 8,577 - - - 33,825
----- ------- ------ ------ ------ ------ -------
At 31st December 2006 - 223,242 88,210 27,144 25,985 81,939 446,520
----- ------- ------ ------ ------ ------ -------
Depreciation
At 1st July 2005 - - - - - (27,341) (27,341)
Charge for the period - (4,500) (601) - (1,427) (11,467) (17,995)
Disposals - 1,299 - - 140 427 1,866
Revaluation - 3,201 601 - - - 3,802
----- ------- ------ ------ ------ ------ -------
At 31st December 2006 - - - - (1,287) (38,381) (39,668)
----- ------- ------ ------ ------ ------ -------
Net book value
at 31st December 2006 - 223,242 88,210 27,144 24,698 43,558 406,852
===== ======= ====== ====== ====== ====== =======
Valuation
---------
The Group's property, plant and equipment is all located in the United Kingdom.
The Group's Operational properties were valued at 30th June 2007 by qualified
professional valuers working for the company of DTZ Debenham Tie Leung,
Chartered Surveyors, ("DTZ"), acting in the capacity of External Valuers. All
such valuers are Chartered Surveyors, being members of the Royal Institution of
Chartered Surveyors ("RICS").
All valuations were carried out in accordance with the RICS Appraisal and
Valuation Standards 5th Edition ("the Manual") and the properties were valued on
the basis of Market Value of the Properties. Market Value is defined in the
Manual 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, where the parties had each acted
knowledgeably, prudently and without compulsion.
The valuation of the hotels is based on estimates of annual maintainable
earnings before interest, tax, depreciation and amortisation ("EBITDA") for each
property over a 10 year cash flow period. These estimates are based on the
historic, current and budgeted trading information provided by the Group to DTZ.
DTZ apply a market discount rate to the cashflow forecast of the hotels to
assess the net present value of each property asset. This is in line with the
method used by the market for the valuation of this type of property.
In valuing the Group's hotels, DTZ have had regard to the valuation of the
properties as fully equipped operational entities, and to their trading
potential. The valuation therefore includes the land and buildings; the trade
fixtures, fittings, furniture, furnishings and equipment; and the market's
perception of the trading potential excluding personal goodwill; together with
an assumed ability to renew existing licences, consents, certificates and
permits. The value excludes consumables and stock in trade.
The valuation excludes any goodwill associated with the management by the
Company or its subsidiaries but recognises that the hotel property assets would
probably be sold as trading entities. The valuation also represents individual
property values and does not reflect any premium value which may be attributable
to an acquisition of the properties as a portfolio.
Properties valued by DTZ at 30th June 2007 carried in the balance sheet at
valuation included in property, plant and equipment totalled #538.6m. The
carrying value of properties on the balance sheet excludes those revaluation
surpluses attributable to the land element of long leaseholds and developments
which are held at cost. Other minor properties, the short leasehold properties
of MWB Business Exchange Plc, and plant and equipment, are carried at the lower
of cost and realisable value in the table above. These assets had a net book
value of #61.7m at 30th June 2007.
The historic cost of the Group's properties at 30th June 2007 includes
capitalised interest of #7.0m (30th June 2006: #4.0m; 31st December 2006:
#5.1m).
10. TRADE AND OTHER PAYABLES
----------------------------
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Trade payables 14,623 13,052 13,036
Amounts due to related parties 3 49 -
Other payables 14,084 19,058 19,778
Accruals 30,228 24,781 24,401
PAYE, NIC and VAT 5,108 4,413 4,203
Deferred income 4,735 1,642 3,148
------ ------ ------
68,781 62,995 64,566
====== ====== ======
11. CURRENT LIABILITIES - LOANS AND BORROWINGS
----------------------------------------------
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Secured bank loans 41,098 55,034 21,619
Other loans 1,620 - 1,620
------ ------ ------
42,718 55,034 23,239
Current portion of finance lease
liabilities - 284 -
------ ------ ------
Total other interest bearing loans and
borrowings 42,718 55,318 23,239
====== ====== ======
12. NON-CURRENT LIABILITIES - LOANS AND BORROWINGS
--------------------------------------------------
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Non-current liability loans, and borrowings
net of issue costs:
9.75% Unsecured Loan Stock 2009/2012 29,710 29,796 29,602
Bank loans (secured) 225,063 184,634 205,566
Other loan borrowings 1,615 3,235 2,425
------- ------- -------
256,388 217,665 237,593
Long leasehold obligations 706 712 710
------- ------- -------
Total non-current liabilities -loans
and borrowings 257,094 218,377 238,303
======= ======= =======
Summary of loans
----------------
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Repayable within one year:
Current portion of bank loans 41,098 53,414 21,619
Current portion of other loan
borrowings 1,620 1,904 1,620
------- ------- -------
42,718 55,318 23,239
------- ------- -------
Repayable:
In more than one year but not more
than two years 256,388 6,210 7,620
In more than two years but not more
than five years - 53,833 229,973
In more than five years - 157,622 -
------- ------- -------
256,388 217,665 237,593
------- ------- -------
Total loans and borrowings 299,106 272,983 260,832
======= ======= =======
13. DEFERRED TAXATION
---------------------
The deferred taxation liabilities/(assets) at 30th June 2007 and at the previous
period ends arose as follows:-
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Provided - deferred tax liabilities
Potential tax payable on property
valuation surpluses at beginning
of period - - 330
Movement in period attributable to
increase in value/sale of
properties - - (330)
------ ------ ------
Deferred tax liability provided at
period end - - -
====== ====== ======
Unprovided - deferred tax (assets)
Short term temporary differences 525 1,716 525
Accelerated capital allowances (9,684) (2,909) (2,394)
Trading tax losses (18,370) (16,100) (22,289)
Unutilised interest cost net of
potential tax payable on property
valuation surpluses less capital
losses available (5,079) (145) (4,152)
------ ------ ------
Deferred tax asset unprovided at
period end (32,608) (17,438) (28,310)
====== ====== ======
At 30th June 2007 and after deducting all deferred tax liabilities, the Group
had unrelieved capital expenditure and interest payments from current and prior
periods of approximately #47m. At the same date, it had net trading losses
carried forward in certain parts of the Group, which can only be used in those
parts of the Group, of approximately #60 million. These gross tax assets
totalling #107m are reflected at the prevailing tax rate of 30% in the deferred
tax asset of #32.6m referred to above.
14. OTHER PROVISIONS
--------------------
The movements on provisions during the six months ended 30th June 2007 were as
follows:-
Six months ended 30th June 2007 Six months Year
ended ended
European 30th June 31st December
closure Other 2006 2006
provision provisions Total Total Total
#'000 #'000 #'000 #'000 #'000
---------------------------------------------------------------------------------------------
At start of period 2,391 1,009 3,400 5,199 5,191
Increase/(decrease) in
European closure
provision (1,287) - (1,287) (350) 2,500
Payments made (1,104) - (1,104) - (5,009)
Utilisation of other
provisions - (1,009) (1,009) 1,258 718
----- ----- ----- ----- -----
At end of period - - - 6,107 3,400
===== ===== ===== ===== =====
In July 2003 the Group closed its majority owned subsidiary MWB Business
Exchange Europe Limited ("Business Exchange Europe") and its nine serviced
office centres in Holland, Germany and France. Following closure, the individual
assets and liabilities previously consolidated were replaced by a single
European closure provision for the expected costs of closure.
During the six months ended 30th June 2007, a final payment of #1.1m in relation
to the one remaining liability of the European closure was made. No liability
remains after this payment and the remaining provision has therefore been
released.
15. OTHER PAYABLES AND ACCRUALS
-------------------------------
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Other payables 2,200 2,196 2,458
Operating lease incentives 8,055 5,730 5,516
------ ----- -----
10,255 7,926 7,974
====== ===== =====
16. MOVEMENT ON RESERVES
------------------------
During the six months ended 30th June 2007 there was no movement on the share
premium account, the capital redemption reserve, the merger reserve and the
other reserves of the Group.
Revaluation Hedging Translation Retained
reserve reserve reserve earnings
#'000 #'000 #'000 #'000
--------------------------------------------------------------------------------
At 1st January 2007 66,715 1,205 37 (130,308)
Movements during period:
Retained profit for the period - - - (3,682)
Revaluation surplus 135,902 - - -
Transfer on increase in
minority interests in MWB
Malmaison Holdings Ltd - - - (283)
Actuarial gain on Liberty
Retail Plc defined
benefit pension scheme - - - 857
Change in fair value of
financial derivatives - (1,236) - 592
Transfer on sale of
properties (37) - - 37
Transfer of depreciation on
revalued properties (85) - - 85
Write back of option cost
through equity - - - 62
Currency translation and
other differences - - (45) -
------- ----- -- -------
At 30th June 2007 202,495 (31) (8) (132,640)
======= ===== == =======
Retained earnings at 30th June 2007 comprise the following:-
Accumulated net loss in Consolidated Income Statements to
30th June 2007 (62,013)
Purchase by the Company of ordinary shares that have subsequently
been cancelled (70,627)
-------
At 30th June 2007 (132,640)
=======
Revaluation reserve
-------------------
The revaluation reserve at 30th June 2007 arose in the following Operating
Businesses of the Group:-
Revaluation
Valuation Less reserve at
surplus minority 30th June
on property interests 2007
#'000 #'000 #'000
--------------------------------------------------------------------------------
Malmaison and Hotel du Vin 237,052 44,991 192,061
Liberty Plc 15,271 4,837 10,434
------- ------ -------
At 30th June 2007 252,323 49,828 202,495
======= ====== =======
17. RECONCILIATION OF MOVEMENT IN EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF
MWB GROUP PLC
------------------------------------------------------------------------
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Profit/(loss) for the financial period (3,682) 1,995 982
Unrealised gains on property revaluations
credited to revaluation reserve 135,902 5,941 15,438
Purchase of own shares for cancellation
during the period - (26,156) (56,437)
Issue of shares during the period - 173 173
Loss on minority interests in MWB Malmaison
Holdings Limited (283) - (4,006)
Charge in fair value of derivative financial (644) 1,362 3,297
instruments
Actuarial gain on defined benefit pension
schemes 857 1,150 3,365
(Charge)/release of deferred tax on
properties at valuation - (1,280) 1,117
Net exchange translation differences and
other movements 17 (225) (135)
--------------------------------------------------------------------------------
Net addition/(reduction) in equity
attributable to shareholders of
the Company during the period 132,167 (17,040) (36,206)
Opening equity attributable to
shareholders of the Commpany 99,322 135,528 135,528
--------------------------------------------------------------------------------
Closing equity attributable to
shareholders of the Parent 231,489 118,488 99,322
================================================================================
18. MINORITY INTERESTS
----------------------
The movements in minority interests of the Group during the six months ended
30th June 2007 arose as follows:-
Add
Add minority
minority share of Other
At share of valuation movements At
1st January profit for surplus for during 30th June
2007 the period the period the period 2007
#'000 #'000 #'000 #'000 #'000
-------------------------------------------------------------------------------------------
MWB Business Exchange Plc 3,843 1,115 - (387) 4,571
MWB Malmaison Holdings Limited 30,483 (840) 28,612 8,241 66,496
Liberty Plc 17,776 (622) 472 227 17,853
Others 1,861 - - - 1,861
------ --- ------ ----- ------
53,963 (347) 29,084 8,081 90,781
====== === ====== ===== ======
During the six months ended 30th June 2007, the Group drew down further funds
from the minority shareholder in MWB Malmaison Holdings Limited, resulting in
minority interests increasing by the amounts drawn down plus the share of equity
attributable to each increased amount subscribed.
19. EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF MWB GROUP IN PENCE PER SHARE
-----------------------------------------------------------------------
The Equity attributable to shareholders of MWB Group in pence per share is
calculated by dividing the Equity attributable to shareholders of MWB Group at
each period end by the number of ordinary shares in issue at such period end.
The relevant figures are as follows:-
30th June 30th June 31st December
2007 2006 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Equity attributable to shareholders
of MWB Group per consolidated
balance sheet of the
financial statements #'000 231,489 118,488 99,322
======= ======= ======
Number of ordinary shares in issue
at period end '000 80,522 94,891 80,522
======= ======= ======
Equity attributable to shareholders
of MWB Group in pence per share Pence 287p 125p 123p
======= ======= ======
20. CONTINGENT LIABILITIES
--------------------------
In June 2003 the Group bought out the minority interests in the share capital of
MWB Business Exchange Limited ("BusEx"), for an initial consideration of #16m
and deferred consideration of #9.5m. In December 2005, a new holding company for
BusEx, MWB Business Exchange Plc, was floated on AIM and the Group's retained
interest at the date of flotation was valued at #37.6m. This subsidiary has
continued to expand and by 31st December 2006, the Group's interest in MWB
Business Exchange Plc had increased in value to approximately #64.8m. The
deferred consideration of #9.5m referred to above from the acquisition of
minority interests in June 2003 is dependent upon value being distributed out of
MWB Business Exchange Plc to MWB Group or received from a third party sale by
the Group, for the serviced office business of MWB Business Exchange Plc. This
includes value received from income distributions, capital repayments and
proceeds from external sales of MWB Business Exchange Plc or its business before
June 2018.
No provision is included in the financial statements for the deferred
consideration as its payment is contingent on value being distributed out of MWB
Business Exchange Plc and it being received by the MWB Group. However, it would
become payable if the Group's interest in MWB Business Exchange Plc was realised
and it has accordingly been included as a contingent liability of the Group at
30th June 2007.
21. ACCOUNTS AND INTERIM ANNOUNCEMENT
-------------------------------------
A copy of the above document has been submitted to the UK Listing Authority, and
will be available for inspection at the UK Listing Authority's Document Viewing
Facility, which is situated at The Financial Services Authority, 25 The North
Colonnade, Canary Wharf, London E14 5HS, telephone number 020 7676 1000.
This interim announcement will be sent to shareholders during October 2007. The
audited accounts of Marylebone Warwick Balfour Group Plc for the eighteen months
ended 31st December 2006, further copies of these interim accounts, and the
interim accounts for the six months ended 30th June 2006, are available from the
Company Secretary, City Group P.L.C. at the Company's registered office of 30
City Road, London EC1Y 2AG.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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