RNS Number:1440J
Marylebone Warwick Balfour Grp PLC
25 March 2003
FOR IMMEDIATE RELEASE
25th March 2003
MARYLEBONE WARWICK BALFOUR GROUP PLC:
INTERIM RESULTS
FOR SIX MONTHS ENDED 31ST DECEMBER 2002
CHAIRMAN'S STATEMENT
The last year has witnessed some major changes to values in both the property
and equity markets and we can expect property values in general to fall further
over the coming twelve months. Even as I write, global unrest continues to
create greater uncertainty in world markets.
The six months ended 31st December 2002 have been an eventful period for MWB, as
we have had to operate in a market dramatically different from anything that
could have been envisaged in March 2002 when we announced our cash realisation
programme and #20m placing. I believe it is a tremendous credit to all our
employees that so much has been achieved against this backdrop.
The Group has now successfully completed the first phase of its cash realisation
programme with the sale of a number of mature property assets and the disposal
of our fund management division; in this respect sales totalling #150m have been
realised since the June 2002 year end.
However, shareholders should not expect major disposals over the next 12-18
months as we continue to mature our operating businesses. Equally, the current
economic climate is not conducive to sales at values that maximise shareholder
returns.
As part of this first phase the Company has returned cash to shareholders
through a substantial share buy-back programme, resulting in 21.8m of the
Company's ordinary shares being purchased during the period, and a further 4.4m
shares being purchased since the half year end. These purchases were at a
significant discount to the underlying net asset value per share and were the
primary driver for the increase in equity shareholders' funds per share by 12%
to 116p at 31st December 2002.
In addition we have also refinanced or enhanced the banking facilities available
to the Group. At MWB Business Exchange, for example, we have reduced borrowings
from available funds to #23m and have removed the requirement for banking
covenant tests on this facility for the next 18 months. At the same time we
have refinanced Malmaison with a ten year #110m loan from Bank of Scotland,
raising additional funds for our hotel operations in the process. At Marble
Arch Tower, we have paid off the majority of the mezzanine loan drawn down for
its acquisition.
While there is still much work to do to re-establish the Group's core operating
income, it is worth noting some key achievements since the June 2002 year end:
* The sale of the Group's remaining holdings in the Royal Victoria Docks
project for #20m, being well in excess of book cost;
* The sale of our fund management business for #30.3m in December 2002, a
price considerably above market expectations and showing a #15m profit to the
Group;
* The sale of our Cannon Street office building in the heart of the City
for #53.5m, reflecting book value. This sale price produced a surplus of #21.1m
over historical cost, and resulted in a significant reduction in Group debt;
* The sale of 14 out of the 18 penthouse apartments in our Park Lane
development for over #20m, in line with our expectations, at an average sale
price of over #1,000 per sq ft; and
* Completion of the industrial and London & Regional portfolio sales
programme, producing a further #17.3m of realisation proceeds.
In addition to the above sales, we have successfully completed the following:
* Redeemed #8.5m of the Convertible Unsecured Loan Stock and restructured
the balance as an unsecured loan with nominal value of #13m;
* Purchased Radisson's 50% interest in the Malmaison brand for #6m and
bought out its management agreement for #7m. In the future, this will
significantly enhance Malmaison's income attributable to the Group;
* Opened the largest Malmaison hotel, in Birmingham, comprising 189 beds,
and completed the refurbishment programme of the existing Malmaison portfolio;
* Completed and opened our five-star Marriott Park Lane hotel and our 250
bed Radisson hotel in Glasgow which are both underpinned by 20 year Operating
and Management Agreements with minimum guaranteed income levels; and
* Completed the refurbishment and extension of the Howard Hotel
increasing the number of bedrooms to 189, again underpinned by a 20 year OMA
with a minimum guaranteed income level.
It is against this background that I am pleased to report a pre tax profit of
#2.1m for the six months ended 31st December 2002, compared to a loss after
exceptional items of #88.8m for the same period a year ago and total losses of
#109.5m for the 12 months ended 30th June 2002.
As I mentioned earlier, this #2.1m pre-tax profit has been achieved after
surpluses totalling #29m from the sale of our fund management division and our
interests in the Royal Victoria Docks project. Including the #7m buy-out of the
Malmaison management contract referred to above, we have written off one off
costs totalling #9m in acquiring and developing our hotel interests. The
results for the six months ended 31st December 2002 therefore incorporate
non-recurring profits totalling a net #20m. Shareholders should expect further
operating losses from some of our businesses while we continue to turn round
Business Exchange and Liberty.
Equity Shareholders' Funds per share, reflecting the #9m share buy-back
programme during the first half, rose by 12% to 116p from 104p at the June 2002
year-end. Despite sales of approximately #150m during the six month period,
property assets still stand at over #580m as a result of our hotel development
programme, which provides a solid base for future performance. A key
contributor to this possible future growth in the Group's underlying assets is
likely to come from our hotels division following the opening of the majority of
our hotels, namely the Park Lane Marriott International, the Glasgow Radisson
and the refurbished five-star Howard Hotel.
As shareholders are aware, two new Malmaison hotels have been under construction
during this period, in Birmingham and in London. At Birmingham the new
Malmaison has opened and forms part of the Mailbox development close to the city
centre. Construction work continues on our first London Malmaison, in
Charterhouse Square on the edge of the City, and we expect this to open towards
the end of 2003.
I am pleased to report that Malmaison has been able to maintain room rates at
approximately #90 during the six months ended 31st December 2002. However
overall occupancy during this period was 73%, down 5% from the level in the six
months ended 30th June 2002, impacted by our newly opened hotel in Birmingham.
January and February 2003 started slowly, although March has shown signs of
improvement.
Most of the Group's other divisions are performing in line with expectations,
considering the economic climate. However, MWB Business Exchange, despite a
solid performance from our UK centres, continues to suffer from its exposure to
Continental European markets. We are continuing to devote significant effort
and time to reduce this exposure, especially in Germany and the Netherlands.
Our business centres produced a positive EBITDA of #1.2m in the first half
compared with #2.0m for the six months ended 30th June 2002. In the UK we
produced EBITDA of #4.6m for the six months ended 31st December 2002, with
revenue per occupied workstation ("REVPOW") for the period of #7,368 and
occupancy in December 2002 of 79%. For the same period, our European business
centres incurred a negative EBITDA of #3.4m, with REVPOW of #5,720 and occupancy
in December 2002 of 53%. In both regions, these figures show an improvement in
occupancy, but a lower REVPOW over the previous six months, reflecting the
challenging environment in which we operate.
After financing costs, Business Exchange contributed a first half pre-tax loss
of #10.2m, against a pre-tax loss of #6.5m before exceptional items in the six
months ended 30th June 2002. Turnover for the first two months of 2003 was
#12.7m, which is the same level as the two month average for the six months
ended 31st December 2002.
Liberty, our retailing business, is recovering after the impact of 11th
September 2001 with a 16% increase in turnover from #23.2m in the comparable
period to #26.8m in the six months to December 2002. Underlying the rise in
retail sales and reduced losses was last March's opening of the revamped Regent
Street part of the store, resulting in a 40% upsurge in footfall. Liberty
traded well during the Christmas period and through the New Year Sale although
trading over the past few weeks has become increasingly tough due to the build
up and commencement of war in the Gulf.
A more focussed approach together with significant improvements to product
lines, merchandising and service has led to a much improved EBITDA of #1.1m
compared to a negative EBITDA of #0.2m for the same period a year ago. After
the cost of financing the Regent Street refurbishment and other financing costs,
the loss before tax has been reduced to #1.5m against a loss of #2.4m before
exceptional items for the previous six months.
During this period, Fiona Harrison formally resigned from the Board of Liberty
due to ill health having worked tirelessly to create and implement a revised
strategy to restore Liberty's standing as an international brand. Nevertheless,
during the period there has been a very significant strengthening of the overall
senior management team at Liberty following the appointment of Iain Renwick as
Chief Executive and Lucille Lewin as Creative Director. Their impact will be
felt during the course of 2003 and we consider that Liberty is well placed to
return to profitability in the near future.
Our remaining two divisions - Asset Management and Project Management - are
progressively completing their activities as either the underlying properties
are sold, or the developments are completed and become income producing in line
with our expectations.
Within Asset Management, the only material asset is Marble Arch Tower. In
Project Management, the Group's only remaining major development is the #130m
final phase at West India Quay, comprising a 301 room five-star hotel, serviced
apartments and apartments for sale. Pre-sales of the apartments are progressing
well with 100 out of the 158 already sold, amounting to more than #50m in sales
value, while Marriott International have signed a 20 year OMA for the hotel and
serviced apartments element of the project. We expect this final phase of our
West India Quay project to be completed by Autumn 2004.
While market conditions have worked against us over the past twelve months and
particularly more recently, we believe we have made considerable progress in
generating cash for the Group through the cash realisation programme. We will
however continue to adopt a cautious, prudent approach during this uncertain
economic outlook and competitive business environment. It is too early to
accurately assess the impact that the war in Iraq might have on the prospects
for our businesses and in particular the effect on the property market.
Nevertheless the Board believes the foundations we have laid, together with what
has been achieved, will hold the Group in good stead as the year progresses.
Brian Myerson
Chairman
25th March 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 31st December 2002
Six months ended Six months ended Year ended
31st December 31st December 30th June
2002 2001 2002
(Note 2) (Note 2)
Notes #'000 #'000 #'000
Turnover
Group and share of joint ventures 3 138,450 96,700 195,941
Less share of joint venture turnover 3 (1,393) (1,714) (3,419)
Group turnover 3 137,057 94,986 192,522
Cost of sales (125,167) (142,427) (231,192)
Gross profit/(loss) 11,890 (47,441) (38,670)
Administrative expenses (10,771) (11,948) (26,769)
Group operating profit/(loss) 1,119 (59,389) (65,439)
Share of operating profit of joint
ventures 1,274 998 2,112
Total operating profit/(loss):
Group and share of joint ventures 2,393 (58,391) (63,327)
Profit on disposal of investment
properties and other fixed assets 4 16,480 - 279
Amounts written off investments (321) (14,793) (14,793)
Profit/(loss) on ordinary activities
before interest 18,552 (73,184) (77,841)
Net interest payable and similar 5 (16,413) (15,595) (31,649)
items
Profit/(loss) on ordinary activities
before taxation 3 2,139 (88,779) (109,490)
Taxation credit on profit/(loss) on
ordinary activities 6 475 121 2,318
Profit/(loss) on ordinary activities
after taxation 2,614 (88,658) (107,172)
Equity minority interests 7 696 24,230 26,873
Non-equity minority interests (809) (470) (1,167)
Profit/(loss) attributable to
ordinary shareholders and retained
for the period 2,501 (64,898) (81,466)
Earnings/(loss) per share 8 2.2p (57.1p) (64.8p)
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 31st December 2002
Six months ended Six months ended Year ended
31st December 31st December 30th June
2002 2001 2002
#'000 #'000 #'000
Profit/(loss) for the financial period
Group 2,079 (65,073) (82,009)
Joint ventures 422 175 543
Total profit/(loss) for the financial period 2,501 (64,898) (81,466)
Net revaluation deficit on fixed assets charged to
revaluation reserve - (41,307) (58,281)
Share of net revaluation deficit on assets in
joint ventures charged to revaluation reserve - (693) (305)
Currency translation differences on foreign
currency net investments 78 501 84
Other movements (162) (6) (60)
Total recognised gains and losses for the period 2,417 (106,403) (140,028)
All recognised gains and losses are attributable to equity shareholders'
interests.
RECONCILIATIONS OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
for the six months ended 31st December 2002
Six months ended Six months ended Year ended
31st December 31st December 30th June
2002 2001 2002
#'000 #'000 #'000
Opening equity shareholders' funds 144,493 266,828 266,828
Profit/(loss) for the financial period
- before exceptional items 2,501 (12,536) (27,592)
- exceptional items - (52,362) (53,874)
Net revaluation deficit on fixed assets charged to
revaluation reserve - (41,307) (58,281)
Share of net revaluation deficit on assets in
joint ventures charged to revaluation reserve - (693) (305)
Issue of shares during the period - - 17,693
Purchases of own shares for cancellation during
the period (9,192) - -
Currency translation differences on foreign
currency net investments 78 501 84
Other movements (162) (6) (60)
Closing equity shareholders' funds 137,718 160,425 144,493
CONSOLIDATED BALANCE SHEET
at 31st December 2002
31st 31st 30th
December December June
2002 2001 2002
Notes #'000 #'000 #'000
Fixed assets
Intangible asset 9 29,722 18,200 18,200
Tangible assets 10 558,810 609,730 594,905
588,532 627,930 613,105
Investment in joint ventures
Share of gross assets - 45,151 46,802
Share of gross liabilities - (27,496) (28,628)
Share of net assets - 17,655 18,174
Other investments - 701 701
- 18,356 18,875
588,532 646,286 631,980
Current assets
Developments in progress 25,559 32,027 46,549
Stocks 7,938 8,251 6,627
Debtors: amounts falling due
- after more than one year 4,783 5,423 5,547
- within one year 103,935 55,402 58,588
Cash 43,421 25,661 45,759
185,636 126,764 163,070
Creditors: amounts falling due within one year (136,265) (128,042) (139,017)
Net current assets 49,371 (1,278) 24,053
Total assets less current liabilities 637,903 645,008 656,033
Creditors: amounts falling due after more than one year 11 (449,035) (418,020) (457,514)
Provisions for liabilities and charges (12,556) (17,323) (13,201)
Net assets 176,312 209,665 185,318
Capital and reserves
Called up share capital 59,600 58,000 70,500
Share premium account 12 79,185 74,002 79,201
Capital redemption reserve 12 10,950 50 50
Revaluation reserve 12 33,348 69,417 56,516
Merger reserve 9,403 9,403 9,403
Other reserves 12 1,379 7,092 7,092
Profit and loss account 12 (56,147) (57,539) (78,269)
Equity shareholders' funds 137,718 160,425 144,493
Equity minority interests 16,218 28,799 19,687
Non-equity minority interests 22,376 20,441 21,138
176,312 209,665 185,318
Equity shareholders' funds per share 13 116p 141p 104p
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31st December 2002
Six months Six months Year
ended ended ended
31st December 31st December 30th June
2002 2001 2002
Notes #'000 #'000 #'000
Net cash inflow/(outflow) from operating activities 14 (3,638) 6,887 (2,405)
Returns on investments and servicing of finance (17,525) (14,366) (36,559)
Corporation tax (paid)/refunded (372) 1,927 4,281
Capital expenditure and financial investment 43,329 (45,937) (61,310)
Acquisitions and disposals (6,614) (2,657) (3,701)
Equity dividends paid - (1,570) (1,577)
Net cash inflow/(outflow) before financing 15,180 (55,716) (101,271)
Financing 15 (17,518) 37,342 121,339
Increase/(decrease) in cash during the period (2,338) (18,374) 20,068
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
for the six months ended 31st December 2002
Six months Six months Year
ended ended ended
31st December 31st December 30th June
2002 2001 2002
Notes #'000 #'000 #'000
Increase/(decrease) in cash during the period 16 (2,338) (18,374) 20,068
Net decrease/(increase) in hire purchase and leasing
contracts 16 3,391 (8,102) (5,379)
Net decrease/(increase) in loans during the period 417 (25,141) (94,794)
Decrease/(increase) in net debt during the period 16 1,470 (51,617) (80,105)
Opening net debt 16 (437,744) (357,639) (357,639)
Closing net debt 16 (436,274) (409,256) (437,744)
NOTES TO THE ACCOUNTS
1. BASIS OF CONSOLIDATION AND ACCOUNTING POLICIES
The interim results of the Group for the six months ended 31st December 2002
incorporate the results of the Company, its subsidiary undertakings and its
joint ventures for the period then ended. The results have been prepared on the
basis of the accounting polices adopted in the accounts of the Group for the
year ended 30th June 2002, consistently applied in all material respects.
2. ANALYSIS OF PROFIT AND LOSS ACCOUNT
6 months to 6 months to Year to
31st December 31st December 30th June
2002 2001 2002
#'000 #'000 #'000
Turnover 138,450 96,700 195,941
Less share of joint venture turnover (1,393) (1,714) (3,419)
Group turnover 137,057 94,986 192,522
Cost of sales
Ordinary activities (125,167) (85,240) (171,899)
Exceptional items - (57,187) (59,293)
(125,167) (142,427) (231,192)
Gross profit/(loss)
Ordinary activities 11,890 9,746 20,623
Exceptional items - (57,187) (59,293)
11,890 (47,441) (38,670)
Administrative expenses (10,771) (11,948) (26,769)
Group operating profit/(loss)
Ordinary activities 1,119 (2,202) (6,146)
Exceptional items - (57,187) (59,293)
1,119 (59,389) (65,439)
Share of operating profit in joint ventures 1,274 998 2,112
Total operating profit/(loss): Group and share of joint ventures
Ordinary activities 2,393 (1,204) (4,034)
Exceptional items - (57,187) (59,293)
2,393 (58,391) (63,327)
Profit on disposal of investment properties and other fixed assets 16,480 - 279
Amounts written off investments
Ordinary activities (321) - -
Exceptional items - (14,793) (14,793)
(321) (14,793) (14,793)
Profit/(loss) on ordinary activities before interest
Ordinary activities 18,552 (1,204) (3,755)
Exceptional items - (71,980) (74,086)
18,552 (73,184) (77,841)
Net interest payable and similar charges
Ordinary activities (16,413) (14,080) (30,151)
Exceptional items - (1,515) (1,498)
(16,413) (15,595) (31,649)
Profit/(loss) on ordinary activities before taxation
Ordinary activities 2,139 (15,284) (33,906)
Exceptional items - (73,495) (75,584)
2,139 (88,779) (109,490)
Tax on profit/(loss) on ordinary activities 475 121 2,318
Profit/(loss) on ordinary activities after taxation
Ordinary activities 2,614 (15,163) (31,588)
Exceptional items - (73,495) (75,584)
2,614 (88,658) (107,172)
Equity minority interests
Ordinary activities 696 3,097 5,163
Exceptional items - 21,133 21,710
696 24,230 26,873
Non-equity minority interests (809) (470) (1,167)
Profit/(loss) attributable to ordinary shareholders and retained
for the period
Ordinary activities 2,501 (12,536) (27,592)
Exceptional items - (52,362) (53,874)
2,501 (64,898) (81,466)
3. DIVISIONAL ANALYSIS
For the purposes of exercising day-to-day managerial and budgetary control, the
business is divided internally into divisions. The turnover of the Group
analysed over its main divisions is as follows:-
Six months ended 31st December 2002 Six months Year
ended 31st ended 30th
December 2001 June
Total Joint Group Group 2002
Turnover ventures Turnover turnover Group
Turnover
Turnover #'000 #'000 #'000 #'000 #'000
MWB Business Exchange 37,607 - 37,607 39,670 78,107
Hotels 38,353 (38) 38,315 14,397 28,283
Fund management 3,761 (1,355) 2,406 1,605 2,466
Asset management 6,428 - 6,428 8,487 18,258
86,149 (1,393) 84,756 64,159 127,114
Liberty 26,848 - 26,848 23,192 48,387
Other 2,355 - 2,355 2,542 4,965
Project management
Royal Victoria Dock 23,079 - 23,079 4,005 9,464
West India Quay 19 - 19 - 200
Other - - - 1,088 2,392
23,098 - 23,098 5,093 12,056
138,450 (1,393) 137,057 94,986 192,522
By geographical origin:
United Kingdom 130,369 (1,393) 128,976 88,159 175,414
Europe, excluding UK 5,893 - 5,893 4,364 10,470
Japan 2,188 - 2,188 2,463 6,526
USA - - - - 112
138,450 (1,393) 137,057 94,986 192,522
Six months ended Six months ended 31st Year ended
Earnings before interest, taxation, 31st December 2002 December 2001 30th June
depreciation and amortisation 2002
("EBITDA") #'000 #'000 #'000
Profit/(loss) on ordinary activities before
interest for the period 18,552 (73,184) (77,841)
Add back depreciation, amortisation and
write-downs for the period 12,543 79,939 92,087
Total EBITDA for the period 31,095 6,755 14,246
Six months ended Six months ended 31st Year ended
31st December 2002 December 2001 30th June
2002
#'000 #'000 #'000
MWB Business Exchange 1,246 (1,089) 906
Hotels
Operating income 6,916 4,708 8,748
Buyout of Malmaison management
Contract (7,000) - -
Pre-opening costs (1,694) - -
Fund management
Operating income 3,625 2,502 4,383
Profit on disposal of fund management
Division 14,954 - -
Asset management 3,943 6,491 11,622
Liberty 1,106 (150) 358
Project management 14,001 2,303 5,127
Cash holdings and other assets, less loan stock
and head office administration (6,002) (8,010) (16,898)
Total EBITDA for the period 31,095 6,755 14,246
Six months ended 31st December 2002 Six months Year
ended 31st ended 30th
Before December 2001 June
Joint Joint 2002
Profit/(loss) on ordinary activities Ventures ventures Total Total Total
before taxation #'000 #'000 #'000 #'000 #'000
MWB Business Exchange
Ordinary (10,191) - (10,191) (7,927) (14,472)
Exceptional - - - (44,623) (44,109)
Hotels
Operating income (579) - (579) (866) (4,289)
Buyout of Malmaison management
Contract (7,000) - (7,000) - -
Goodwill on acquisition of
Malmaison brand written off (292) - (292) - -
Pre-opening costs (1,694) - (1,694) - -
Fund management
Operating income 1,457 1,274 2,731 1,626 2,815
Profit on disposal of fund
management division 14,954 - 14,954 - -
Asset management
Operating income
Ordinary 250 - 250 (95) (512)
Exceptional - - - 431 417
Sales of other properties 445 - 445 - -
Liberty
Ordinary (1,542) - (1,542) (1,788) (4,232)
Exceptional - - - (11,377) (11,377)
Cash holdings and other assets (579) - (579) (2,788) (4,132)
Project management
West India Quay (39) - (39) - (467)
Royal Victoria Dock 14,071 - 14,071 1,339 3,611
Pall Mall - - - 1,013 2,126
Profit before head office
administration cost 9,261 1,274 10,535 (65,055) (74,621)
Less head office administration cost
Ordinary (8,396) (5,798) (14,354)
Exceptional - (17,926) (20,515)
Profit/(loss) on ordinary activities
before taxation 2,139 (88,779) (109,490)
By geographical origin:
United Kingdom 8,788 (50,390) (70,305)
Japan 374 685 1,077
Europe, excluding United Kingdom (7,023) (39,074) (40,229)
USA - - (33)
2,139 (88,779) (109,490)
Equity Net assets
shareholders' 31st December
funds 2002
Net assets #'000 #'000
31st December 2002
MWB Business Exchange 9,882 20,080
Hotels 45,366 51,237
Fund management - -
Asset management 13,883 13,720
Liberty 37,204 55,945
Project management 9,312 12,847
Cash holdings and other assets, less loan stock 22,071 22,483
137,718 176,312
Equity shareholders' funds per share 116p
Equity Net assets
shareholders' 31st December
Funds 2001
#'000 #'000
31st December 2001
MWB Business Exchange 23,387 44,325
Hotels 49,301 55,493
Fund management 10,177 10,177
Asset management 49,008 48,844
Liberty 39,743 58,966
Project management 2,352 4,155
Cash holdings and other assets, less loan stock (13,543) (12,295)
160,425 209,665
Equity shareholders' funds per share 141p
Equity Net assets
shareholders' 30th June
funds 2002
#'000 #'000
30th June 2002
MWB Business Exchange 8,748 21,953
Hotels 48,123 53,844
Fund management 11,886 11,886
Asset management 40,184 40,021
Liberty 37,533 57,014
Project management 6,658 8,780
Cash holdings and other assets, less loan stock (8,639) (8,180)
144,493 185,318
Equity shareholders' funds per share 104p
4. PROFIT ON DISPOSAL OF INVESTMENT PROPERTIES AND OTHER FIXED ASSETS
Six months ended Six months ended Year ended
31st December 31st December 30th June
2002 2001 2002
#'000 #'000 #'000
Profit on disposal of fund management division 14,954 - -
Profit on disposal of investment properties 445 - 279
Profit on disposal of other fixed assets 1,081 - -
16,480 - 279
5. NET INTEREST PAYABLE AND SIMILAR CHARGES
Six months ended Six months ended Year ended
31st December 31st December 30th June
2002 2001 2002
#'000 #'000 #'000
Unsecured Loan Stock 2005/2006 598 - -
Convertible Unsecured Loan Stock 2020 1,928 812 1,610
Bank loans and overdrafts 15,684 14,733 32,332
Finance leases and hire purchase contracts 582 1,081 3,191
Bank charges, debt issue and debt
repayment costs 1,245 2,194 3,017
20,037 18,820 40,150
Less interest capitalised before tax relief (3,382) (2,984) (7,632)
Less interest receivable and similar income (1,094) (1,064) (2,438)
15,561 14,772 30,080
Share of interest on bank loans and
overdrafts in joint ventures 852 823 1,569
Total net interest payable and similar
charges 16,413 15,595 31,649
Interest payable is sourced from the Group's operating cash flows and from its
available bank facilities.
6. TAXATION CREDIT ON PROFIT/(LOSS) ON ORDINARY ACTIVITIES
Six months ended Six months ended Year ended
31st December 31st December 30th June
2002 2001 2002
#'000 #'000 #'000
UK Corporation tax
Corporation tax charge at 30% for the period - - -
Adjustments in respect of prior years (620) (125) (2,533)
(620) (125) (2,533)
Foreign tax
Tax on profit for the period 178 204 415
Adjustment in respect of prior years (33) 62 62
(475) 141 (2,056)
Deferred taxation - (262) (262)
Total corporation tax and similar taxes charged in the
profit and loss account (475) (121) (2,318)
7. EQUITY MINORITY INTERESTS
The credit from equity minority interests in the profit and loss account arose
in the following divisions of the Group:-
Six months ended Six months ended Year ended
31st December 31st December 30th June
2002 2001 2002
#'000 #'000 #'000
MWB Business Exchange Limited 4,761 19,227 21,016
Hotels - 140 Park Lane Limited (150) 53 119
Liberty - Retail Stores plc 480 4,194 4,900
Project Management - Royal Victoria Dock (4,429) (446) (1,281)
Project Management - West India Quay (12) 34 128
Leisure Box Limited 46 1,048 1,837
Others - 120 154
696 24,230 26,873
8. EARNINGS/(LOSS) PER SHARE
The earnings/(loss) per share figures have been calculated by dividing the
profit/(loss) attributable to shareholders by the weighted average number of
shares in issue during the period, as follows:-
Six months ended Six months ended Year ended
31st December 31st December 30th June
2002 2001 2002
#'000 #'000 #'000
Profit/(loss) attributable to shareholders for the
period 2,501 (64,898) (81,466)
'000 '000 '000
Weighted average number of ordinary shares in
issue during the period 115,215 113,676 125,784
Earnings/(loss) per share 2.2p (57.1p) (64.8p)
9. INTANGIBLE ASSET
31st December 31st December 30th June
2002 2001 2002
Group #'000 #'000 #'000
At 1st July 2002 - Liberty brand 18,200 29,577 29,577
Cost of Malmaison brand transferred from joint
ventures 11,522 - -
Write-down of Liberty brand during the period - (11,377) (11,377)
At 31st December 2002 29,722 18,200 18,200
During the six months ended 31st December 2002, the Group acquired the remaining
50% interest in MWB SAS Hotels Limited that was previously not owned by the
Group. As a result this company, and the Malmaison brand that it owns at a book
value of #11.5m previously held in the Group's joint ventures, is now wholly
owned and is included in the table above.
10. TANGIBLE FIXED ASSETS
Investment
____properties____ _____Operational properties_______
Long Short Fixtures &
Freehold Leasehold Freehold Leasehold Leasehold equipment Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Group
Cost or valuation
At 1st July 2002 117,074 170,128 115,668 74,152 85,509 50,955 613,486
Additions 15,574 4,769 22,277 1,539 512 6,762 51,433
Reclassifications (112,518) - 101,841 - - 10,677 -
Disposals (15,825) (53,500) - (6,650) (233) (6,399) (82,607)
Currency movements - - - - 29 66 95
At 31st December 2002 4,305 121,397 239,786 69,041 85,817 62,061 582,407
Depreciation
At 1st July 2002 - - - - (269) (18,312) (18,581)
Charge for the period - (40) (999) (658) (2,358) (4,742) (8,797)
Currency movements - - - - - (30) (30)
Disposals - - - 30 (4) 3,785 3,811
At 31st December 2002 - (40) (999) (628) (2,631) (19,299) (23,597)
Net book value
At 31st December 2002 4,305 121,357 238,787 68,413 83,186 42,762 558,810
At 31st December 2001 116,150 176,900 113,733 65,050 104,225 33,672 609,730
At 30th June 2002 117,074 170,128 115,668 74,152 85,240 32,643 594,905
11. CREDITORS: amounts falling due after more than one year
31st December 31st December 30th June
2002 2001 2002
#'000 #'000 #'000
7.5% Convertible Unsecured Loan Stock 2020 - 21,472 21,472
7.5% Unsecured Loan Stock 2005/2006 13,108 - -
Bank loans (secured) 396,264 344,169 383,118
Other loan borrowings 10,000 21,000 26,000
Less issue costs (3,662) (4,016) (4,716)
415,710 382,625 425,874
Hire purchase and leasing contracts (note 17) 14,258 21,340 17,943
Deferred consideration 6,875 1,750 875
Amount due to related parties 1,401 1,363 1,363
Other creditors 10,791 10,942 11,459
449,035 418,020 457,514
Analysed as:
Loans due after more than one year 415,710 382,625 425,874
Other long term liabilities 33,325 35,395 31,640
449,035 418,020 457,514
12. MOVEMENT ON RESERVES
The movements on reserves during the six months ended 31st December 2002 arose
as follows:-
Share Capital Profit
premium redemption Revaluation Other and loss
account reserve reserve reserves account
#'000 #'000 #'000 #'000 #'000
Group
At 1st July 2002 79,201 50 56,516 7,092 (78,269)
Profit retained for the period - - - - 2,501
Purchase of shares net of expenses - 10,900 - - (9,192)
Transfer on sale of properties and investment - - (21,862) (5,713) 27,575
Transfer of depreciation on revalued tangible
fixed assets - - (1,311) - 1,311
Currency translation differences on foreign
currency net investments - - 5 - 73
Other movements (16) - - - (146)
At 31st December 2002 79,185 10,950 33,348 1,379 (56,147)
13. EQUITY SHAREHOLDERS' FUNDS PER SHARE
The equity shareholders' funds per share figures are calculated by dividing the
equity shareholders' funds figures at each period end, by the number of shares
in issue at that date, as follows:-
31st December 31st December 30th June
Basic Basic Diluted
2002 2001 2001
#'000 #'000 #'000
Equity shareholders' funds per consolidated balance
sheet 137,718 160,425 144,493
'000 '000 '000
Number of ordinary shares in issue at year end,
excluding shares held by the LTIP 118,554 113,676 138,676
Equity shareholders' funds per share 116p 141p 104p
14. NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES
Six months Six months ended Year
ended 31st December ended
31st December 2001 30th June
2002 2002
#'000 #'000 #'000
Group operating profit/(loss) 1,119 (59,389) (65,439)
Write-down of brand - 11,377 11,377
Write-down of fixed assets - 45,810 46,922
Goodwill written off 827 - -
Depreciation 8,018 7,959 18,001
Increase in properties held for resale and
developments in progress (106) (9,002) (24,559)
Decrease/(increase) in debtors (7,381) 20,374 14,629
Decrease/(increase) in stock (1,311) 982 2,606
Decrease in creditors and provisions (4,804) (11,224) (5,942)
Net cash inflow/(outflow) from operating activities (3,638) 6,887 (2,405)
15. FINANCING
Six months Six months Year
ended ended ended
31st December 31st December 30th June
2002 2001 2002
#'000 #'000 #'000
Issue/(purchase) of ordinary shares (9,193) (6) 17,693
Investment by non-equity minority interests 429 4,251 4,202
Distributions and other movements to equity minority
interests (3,310) (146) (729)
Loans drawn down 71,688 27,717 141,698
Loans repaid (63,741) (2,576) (46,904)
Convertible loan stock repaid, including premium (10,000) - -
Net increase/(decrease) in hire purchase and leasing
contracts (3,391) 8,102 5,379
(17,518) 37,342 121,339
16. DECREASE/(INCREASE) IN CASH DURING THE PERIOD
31st Movement 30th Movement 30th
December during June during June
2002 six months 2002 year 2001
#'000 #'000 #'000 #'000 #'000
Cash 43,421 (2,338) 45,759 1,782 43,977
Bank overdrafts - - - 18,286 (18,286)
Net cash 43,421 (2,338) 45,759 20,068 25,691
Hire purchase and leasing contracts (21,669) 3,391 (25,060) (5,379) (19,681)
Bank loans (434,918) (23,947) (410,971) (89,794) (321,177)
Unsecured Loan Stock (13,108) 8,364 (21,472) - (21,472)
Other loan borrowings (10,000) 16,000 (26,000) (5,000) (21,000)
Net debt (436,274) 1,470 (437,744) (80,105) (357,639)
17. FINANCIAL INFORMATION
The financial information set out in this interim statement for the six months
ended 31st December 2002 includes information for the year ended 30th June 2002.
This information does not constitute the Company's statutory accounts for the
year ended 30th June 2002 but is derived from those accounts. Statutory
accounts for 2002 have been delivered to the Registrar of Companies. The
auditors have reported on those accounts; their report was unqualified and did
not contain statements under Section 237(2) or (3) of the Companies Act 1985.
18. ACCOUNTS AND INTERIM ANNOUNCEMENT
A copy of the above document has been submitted to the UK Listing Authority, and
will shortly 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.
The interim accounts of the Company are expected to be sent to shareholders
during March 2003. The audited accounts of Marylebone Warwick Balfour Group Plc
for the year ended 30th June 2002, further copies of this interim statement, and
the interim accounts for the six months ended 31st December 2001 are available
from the Company Secretary, City Group P.L.C. at the Company's registered office
of 25 City Road, London EC1Y 1BQ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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