RNS Number:2600N
Halladale Group PLC
08 July 2003
For immediate release 07.00 8 July 2003
Halladale Group plc ("Halladale" or "the Company")
Preliminary Results for the Year Ended 30 April 2003
Highlights
*Profit before tax increased by 47 per cent to #1,691,000 (2002:
#1,151,000)
*Significant increase in activity - total value of acquisitions and
disposals up 46 per cent to #120 million (2002: #82 million)
*Total portfolio under management increased by 25 per cent to #145 million
(2002: #116 million)
*Recommended final dividend increased by 39 per cent to 1.04p, making a
total dividend of 1.6p - a 28 per cent increase (2002: 1.25p)
*Earnings per share increased by 35 per cent to 7.21p (2002: 5.34p)
*NAV increased on a proforma basis by 5.9 per cent to 82.2p per share
(2002: 77.6p), triple NAV on a proforma basis up 7.5 per cent to 68.41p per
share (2002: 63.65p)
*Continued expansion of joint venture activity. Completion of largest
acquisition to date, #32 million retail portfolio with Citigroup Alternative
Investments, and establishment of a #50m fund with Kodak Pension Fund
David Lockhart, Chief Executive of Halladale Group plc, said:
"As we passed our second anniversary of admission to the AIM, the company has
demonstrated substantial growth in all its key indicators of performance. We are
committed to delivering shareholder value and we are particularly pleased to
report significant increases in earnings and dividends.
"As a trading company we place more emphasis on the earnings performance of the
group as a barometer of achievement and in this respect the increases in profit
before tax and total dividend of 47% and 28% respectively reflect the strong
performance of the company in the year under review.
"Our strategy continues to be the creation of value through active and
entrepreneurial management and risk controlled development of commercial
property assets. We are an earnings driven knowledge and skill based business
and not a conventional property investor."
- ends -
For further information, please contact:
David Lockhart, Halladale Group plc 0141 204 4633
David Rydell/Charles Reynolds, Bell Pottinger 020 7861 3232
Financial
Stuart Lane, Collins Stewart 020 7523 8000
CHAIRMAN'S STATEMENT
This has been an excellent year of continued progress for Halladale, reflecting
the success of the Group's strategy of active asset management and risk
controlled development. Profit before tax for the year to 30 April 2003 rose to
#1,691,000, an increase of 47% over last year. Earnings per share increased by
35% to 7.21p and net asset value per share, based on a pro forma unaudited
balance sheet, grew by 5.9% to 82.2p. Details of this calculation and further
analysis of performance are included in the Financial Review.
Your Board is recommending a final dividend of 1.04p per share. Taken together
with the interim dividend of 0.56p per share paid on 14 February 2003 this
represents an increase of 28% on the dividends paid for the year ended 30 April
2002. Subject to shareholders' approval at the Annual General Meeting, the final
dividend will be paid on 16 September 2003 to shareholders on the register on 18
July 2003. The significant increase in the total dividend demonstrates our
commitment to a progressive dividend policy as part of our wider aim to deliver
shareholder value.
Halladale is determined to grow its business and the high level of activity
referred to in our Interim Report continued in the second half of the year. For
the full year the aggregate value of acquisitions and disposals, including joint
ventures, was #120m, compared with #82m last year, an increase of 46%. Details
of some of the key transactions are contained in the Operational Review. At 30
April 2003 Halladale's total portfolio under management, including joint
ventures, exceeded #145m, an increase of 25 % on the comparable figure last
year.
I am particularly pleased with the Group's financial performance because it was
achieved against the backdrop of an uncertain UK economy which faltered as the
year progressed. Occupational demand became increasingly patchy but the low
interest rate environment and a continuing lack of interest in other asset
classes combined to keep investor demand for well let properties at a high
level.
Latest economic forecasts make it difficult to be certain about the pace and
scale of global economic recovery. In relative terms the UK economy is expected
to perform reasonably well although significant regional and sectoral variations
will persist. In recent years Halladale's focus on the retail sector has played
a large part in our success. Whilst we remain very comfortable with our level of
commitment to the retail sector we are also poised to take advantage of
opportunities in other sectors as sentiment changes. In an era of low inflation
a flexible, active and entrepreneurial approach is required to give shareholders
the returns they are seeking. That will continue to be Halladale's approach and
on that basis I am confident that we can build on this year's success.
Our Annual General Meeting takes place on 9 September 2003. As always there will
be formal business to be dealt with, but David Lockhart, our Chief Executive,
will also give a presentation on the Company's recent activities. The AGM is an
important opportunity for the Board to meet the shareholders and I hope that you
will be able to attend.
In the meantime may I thank my fellow Directors and the entire Halladale team
for their tremendous efforts during what has been a very exciting and an
extremely busy year for everyone.
Fred Shedden, MA LLB
Chairman
CHIEF EXECUTIVE'S REVIEW
The year under review was one of considerable achievement. As we passed our
second anniversary of admission to the AIM, the company has demonstrated
substantial growth in all its key indicators of performance. We are a company
committed to delivering shareholder value and we are particularly pleased to
report significant increases in earnings and dividends.
As a trading company we place more emphasis on the earnings performance of the
group as a barometer of achievement and in this respect the increase in profit
before tax and total dividend of 47% and 28% respectively reflects the strong
performance of the company in the year under review. We also place more emphasis
in terms of shareholder valuation on triple net asset value per share, which,
based on the proforma unaudited balance sheet, has grown by 7.5% to 68.41p at
the year end. Details of how this is calculated can be found in the Financial
Review.
As an asset class, commercial property has again performed well, reflecting
strong investor demand but occupational demand remains weak compared to a year
ago especially for office occupiers. This is having an adverse effect on rental
growth but this does not daunt Halladale. The key to delivering attractive
returns in this market is the ability to identify asset enhancement
opportunities in those sectors that we believe will out-perform and our decision
to build a strong exposure to retail assets, which was the top performing sector
in 2002, is good evidence of this.
Property
There has been a significant increase in the level of activity on all fronts in
the past year. Total acquisitions during the year were #66.6m and these included
a #32m mainly retail portfolio in a joint venture with Citigroup Alternative
Investments and a #17.2m retail warehouse purchase in a joint venture with Kodak
Pension Plan. At the year end retail property accounted for 88% of our total
portfolio under management.
Although consumer spending has slowed during the year, we believe the retail
sector will continue to provide opportunities, particularly through our focus on
good secondary locations with an emphasis on convenience as opposed to
comparison shopping. Disposals during the year of #53.5m reflected both the
strong investment market and our strategy of realising profit once we have
implemented a pre-determined asset enhancement strategy and recycling the equity
into new projects.
Our development activities continue to grow and the successful completion of the
development at Queen Street in central Glasgow and the imminent commencement of
development of a 25,000 sq ft fast food and trade counter retail park at
Woolwich, south east London, following pre-letting agreements for over 50% of
the new space, are good examples of our risk controlled approach to development.
We continue to monitor opportunities within other sectors and with the recent
fall in rental and capital values in the office sector, particularly in London
and the south east, prices are starting to look attractive, albeit the sector
remains out of favour. As our performance shows, that is often the time to start
making selective acquisitions.
Joint Ventures
Joint ventures are an increasingly important part of our business, representing
75.5% of the total portfolio under management at the year end. The term "joint
ventures" includes all associate and joint venture companies as disclosed in
Note 9 to the accounts.
The principles of our joint ventures are based on co-investment with a range of
investors who are seeking the attractive returns that our entrepreneurial asset
management and risk controlled development activities can deliver. Co-investment
is also an effective use of our capital through generating management fees and
incentivised equity returns. The company will typically take stakes ranging from
10% to 50% in off balance sheet joint ventures and non-recourse senior debt is
put in place at a level the project can sensibly service.
In February 2003 we announced our second joint venture with Kodak Pension Plan
through the formation of an equally owned limited partnership with #1m of equity
from each partner. Kodak also put in place a mezzanine financing facility of
#11m which with non-recourse senior debt should provide a total fund of #50m. At
the same time Kodak subscribed for 500,000 new ordinary shares in the company at
a price of 51p and agreed to subscribe for a further 500,000 new ordinary shares
in the company at the same price in July 2003. We also raised #7.55m of new
equity off balance sheet for our third joint venture with Citigroup Alternative
Investments. More information on our joint ventures is contained in the
Financial Review.
Strategy
Whilst the property market at the macro level normally follows the UK economic
cycle, within that there are locations and sectors that will perform in
different cycles. We have a strong knowledge base across the UK and our core
strategy is to identify opportunities within these sub-markets where we can
generate attractive returns through our entrepreneurial asset management and
development skills.
Opportunities we identify must have the potential of adding value through our
own efforts and within a reasonable timescale. Once that has been achieved we
re-cycle the equity released into new projects. This is an important part of our
business strategy because firstly, the disposal of properties validates the
valuation of our portfolio and secondly, it provides resources to take advantage
of new opportunities in a constantly changing market place.
In the current economic climate we manage development risk through thoroughly
researching occupational demand and by securing an appropriate level of
pre-lets. Increasingly we are seeking to identify larger and more complex mixed
use development opportunities such as our project at Brentwood, Essex which is
referred to in the Operational Review. These developments require the range of
planning, development and project management skills that we possess and as our
track record shows, the rewards for success can be high.
In a market where there is significant investor demand for property but limited
rental growth, our proven asset management and development skills are at a
premium. We believe there will be increasing opportunities for us to out-source
these skills to passive investors and secure for Halladale a growing income
stream from asset management and incentivised fees.
Prospects
It is our view that the UK property market will continue to be underpinned by
strong investor demand, particularly with interest rates at their current level.
An increase in occupational demand and the prospects of rental growth should
also materialise when we see evidence of stronger economic growth. Local
economic factors will vary across the country and it is in this type of market
that our skills and depth of knowledge and our nimble, entrepreneurial approach
become even more vital.
We have a strong and dedicated management team who are committed to growth and
we remain confident that our soundly developed business model will ensure that
profitability will continue to grow as the business grows.
David AS Lockhart, CA NP
Chief Executive
OPERATIONAL REVIEW
During the calendar year to 31 December 2002 property, as an asset class,
produced a resilient performance with total returns improving on an ungeared
basis as measured by the Investment Property Database from 6.7% in 2001 to 9.7%
in 2002. Returns improved despite rental values falling by 0.9% in 2002 as
yields continued to strengthen, reflecting strong investment interest from
investors seeking a safe haven in property. This strong performance from
property last year means that property currently ranks as the top performing UK
asset class over 3, 5 and 10 years.
Over the last 2 to 3 years we have deliberately taken an overweight position in
the retail sector which had been out of favour. Market sentiment has now changed
and retail is the favoured sector producing a total return of 13.1% in 2002
compared with the office sector at only 3.3%. We believe there are still
opportunities in the retail sector, particularly in centres with historic low
rental levels of under #60 per sq. ft. Our opportunistic rather than sector
specific approach to property should also begin to see some activity in the
office sector to take advantage of significant falls in capital values over the
past 12 months.
As at 30 April 2003, the value of the total portfolio was #145m (2002 #116m) of
which shopping centres represented 50.2%, unit shops 20.5%, out of town retail
17.7%, industrials 4.5% and offices 7.1%. DTZ Debenham Tie Leung valued the
majority of the portfolio as at 30 April 2003. The property at Queen Street,
Glasgow was valued by Knight Frank.
Acquisitions
Acquisitions remained at a significant level at #66.6m (2002 #63.5m) throughout
the UK. The largest purchase was the acquisition of the Opportunity Fund for
just over #32m in the third joint venture with Citigroup Alternative Investment.
The portfolio comprised 15 properties, mainly retail, reflecting an initial
yield of 7.5%. Seven of these properties have since been sold, achieving a
significant surplus over book cost.
In the second Kodak Pension Plan joint venture, a large retail warehouse of
130,000 sq ft in Stockton, Teeside, let to Woolworths, was purchased for #17.2m,
at an initial yield of 7.5%. In addition to asset management opportunities with
the existing store, the purchase included an adjoining development site with
planning permission for 24,000 sq ft of retail warehousing.
Two retail investments in Stafford and Penkridge, near Wolverhampton, were
purchased for #6m, at an initial yield of 8.25%. Both properties provide a
number of value adding opportunities through rent reviews, lease renewals and
reconfiguration of units.
At Woodley, Reading, the opportunity was taken to purchase the freehold interest
from the local council, at a price of #4.7m releasing marriage value by
combining the two interests. This also gives greater flexibility and in
particular allows part disposals from the holding. The purchase was financed
through the second joint venture with Citigroup Alternative Investments.
Disposals
The group has had a particularly active year on the sales front taking advantage
of an extremely strong market from investors seeking to purchase secure income
streams. Sales of #53.5m (2002 #18.23m) from the portfolio under management were
completed at a significant surplus over book cost.
Out of the Opportunity Fund with Citigroup Alternative Investments four
properties were immediately sold in Edinburgh, Glasgow, Staines and Swindon, for
a total of just over #9.3m. In addition, two properties in Liverpool and one in
Theale have also been sold for #6.65m and #3.1m respectively.
The office building in Ealing, London, which was purchased in the first Kodak
joint venture, was sold for just over #7.1m, creating a substantial profit
following the extension of the existing lease and regearing of the rent which
completed the asset management strategy for that property. Also out of the first
Kodak joint venture the office building in Birmingham was sold to an owner
occupier for #3.35m, following a partial refurbishment of the building, at a
surplus over book cost.
At Queen Street, Glasgow, 22 of the 23 residential flats were sold prior to
completion of the development for just over #3.3m and the remaining flat was
sold for #235,000 before the year end. The investments created by the lettings
to Sainsbury and the Clydesdale Bank have been sold to a private investor for a
total consideration of #4.7m, the former before and the latter since the year
end.
The district shopping centre in Erskine, part of the Bank of Scotland joint
venture, was sold for #2.35m following the satisfactory completion of rent
reviews. Other disposals included the industrial estate in Hawkhill, Dundee,
sold for #1.2m following lettings of void units, the Cowlairs Industrial Estate
in Glasgow, sold for #2.846m and the mixed use retail and office building at
Bath Street, Glasgow, which was sold for #1.35m following the refurbishment and
letting of vacant space.
Development & Asset Management
The large mixed use development at Queen Street, Glasgow, was completed at the
end of the last calendar year. All of the residential flats have been sold and
the student residence development was forward sold to Jarvis UPP. Out of the
four retail units in Queen Street, the largest was let to Sainsbury's
Supermarkets Ltd. at a rent of #144,000 per annum on a long lease and
subsequently sold to a private investor. The other large retail unit in Queen
Street has been let to Clydesdale Bank on a long lease at a rent of #141,900 per
annum and since the year end has been sold to the same private investor.
After various delays due to land assembly, the building contract for development
of part of the shopping centre at Daventry has been awarded. The property was
purchased in 2000, in our first joint venture with Citigroup Alternative
Investments, for #10.6m with rental levels at just under #30 per sq. ft. and we
believed we could move the rents upwards. Within the existing units in Bowen
Square, we have succeeded in increasing rents by 20% to #36 per sq. ft. We also
identified the opportunity to demolish and redevelop part of the Centre to
create 4 new retail units and introduce good quality new tenants on long leases
at rents close to #40 per sq. ft. Upon Practical Completion, expected in Spring
2004, the strategy for this property will be completed and it will be available
for sale.
At Woolwich, following the completion of four pre-lets to trade counter
operators, the building contract should shortly be awarded allowing a site start
to take place on the first phase of development. Further pre-lets are being
sought for subsequent phases.
At Brentwood significant progress has been made in the design of the new Bay
Tree Shopping Centre, culminating in submission of a planning application for
the refurbishment and extension of the shopping centre and also the change of
use of the former offices at Becket House into residential to provide over 100
units. It is anticipated that planning will be achieved during the summer of
this year to facilitate a site start towards the end of the year. Significant
progress has also been made in acquiring the freehold interest to combine this
with the company's existing leasehold interest to release marriage value and
give greater flexibility in achieving the desired value added activities. There
is early tenant interest in the new retail anchor stores to be created as part
of the proposed extensive development of the existing shopping centre.
The company has secured an option to develop a substantial site in Newport, Isle
of Wight, to form a large retail development for which planning is currently
being pursued. Following the successful negotiations with the existing tenant at
Woking to extend the term of that lease at an increased rent, work has commenced
on a major refurbishment of the building and work should be completed later this
year.
Future Activities
The company is in a strong position in terms of our portfolio weighting in the
favoured retail sector and we have no exposure to the Central London office
market where rents are in decline. Looking ahead, we will continue to monitor
other sectors including offices, particularly in the south east, with a view to
entering that market when suitable properties, in terms of price and asset
enhancement opportunities, are identified.
The asset management and development skills of the team will continue to be the
key drivers of performance. All our existing joint venture partners are keen to
expand their activities with us and, with our UK wide experience, I believe we
are well placed to continue identifying interesting opportunities.
Ken F Lindsay, FRICS
Property Director
FINANCIAL REVIEW
Operating Performance
The Group's profit before tax has increased by 47% from #1.15m last year to
#1.69m this year. This substantial increase has been achieved through a
combination of increased fees receivable from managing joint venture properties
and a significant contribution from property sales. The term joint venture is
used to include all Associated and Joint Venture Companies.
The continued growth of joint venture activity has helped to increase fee income
from #370,000 in 2002 to #582,000 this year. The profit contribution recognised
in the year from joint venture activity is #233,000 (2002 - #45,000) but this
under-emphasises the importance of these projects in terms of resources and time
committed. Many of these projects also include an incentivised return to
Halladale. By its nature this return cannot be calculated or accounted for until
the respective properties are realised, but it is anticipated that these
projects will make significant contributions in future years. There is more
detail on joint venture projects later in this report
From properties held on balance sheet there have been 40 property sales in the
year (2002 - 21 property sales) totalling #26.96m (2002 - #18.23m) contributing
profits at the operating level of #2.96m (2002 - #1.85m). This level of sales
has resulted in a fall in rental income from #3.38m in 2002 to #2.68m. As the
vast majority of properties are income-producing, this is a natural result of
the recycling of equity through property sales. At the year end the total rent
roll under management was #10.3m, of which #7.9m was from properties held by
joint venture vehicles and #2.4m was from properties held on-balance sheet.
Net interest cost, excluding joint ventures, in the year fell from #2.65m last
year to #1.95m. This decrease is a combination of falling interest rates, to the
extent the Group benefits from floating interest rates, the reduction in net
borrowings following the sales referred to above, and the fact that not all
sales proceeds had been fully reinvested at the year end. The average interest
rate on property debt at 30 April 2003 was 7.57% compared to 7.29% last year.
This increase, against a climate of falling interest rates reflects the higher
percentage of fixed rate debt to floating rate debt at the year end.
Earnings per share have increased from 5.34p last year to 7.21p. 500,000 new
shares were issued in the year, which had a modest impact on the calculation of
earnings per share.
Net Asset Value
As the Group holds all its property as trading stock, it is required by
accounting convention to carry these assets at cost. In accordance with previous
years a proforma balance sheet is included to reflect the increase in value of
these properties based on independent valuations at 30th April 2003. These
valuations included properties held in joint venture vehicles. The impact of
adopting value rather than cost is to increase the net asset value from the
statutory figure of 52.5p per share to 82.2p per share. All figures in this
Report referred to as "proforma" are based on the substitution of value for cost
of properties held on balance sheet as well as attributing an uplift to
investments for the Group's share of increase in value of properties held in
joint venture vehicles.
Table 1 below shows the impact on net assets per share
Table 1 Net Asset Pence Per
Value Share
#'000
Equity shareholders' funds as shown in
the Group balance sheet 9,770 52.5
Uplift to market value of properties held
as trading stock 4,029 21.7
Group's share of uplift to market value
of properties held as trading stock in
associate companies 1,491 8.0
________ ________
Proforma Net Assets 15,290 82.2
======= =======
As stated in the Chief Executive's Review, the company's focus is more on triple
net asset value. This is calculated by reducing proforma net asset value by the
inherent deferred tax in the property revaluations and the FRS13 adjustment (net
of tax) and the relevant calculation for the Group is as follows:
Table 2 2003 2002
#'000 #'000
Proforma Net Assets 15,290 14,053
Estimate of tax on revalued properties (1,655) (1,758)
FRS13 adjustment (net of tax) (906) (770)
_______ ______
Proforma Triple Net Asset Value 12,729 11,525
====== ======
Proforma Triple Net Asset Value per
share 68.41p 63.65p
The company issued 500,000 new shares in February 2003 at 51p per share. At that
time an unconditional contract was entered into, with the same party, to issue a
further 500,000 new shares in July 2003 also at 51p per share. This latter issue
is not reflected in the financial statements to 30 April 2003. The dilution
caused by the issue of shares was minimal.
Joint Ventures
Over the last 3 years the company has substantially increased its involvement in
joint projects with partners, either of a financial nature or of an operational
nature. Of the entire portfolio under management with a proforma value of
#145.1m at 30 April 2003, #35.6m (24.5%) is accounted for on balance sheet, with
the balance of #109.5m (75.5%) being held in joint ventures.
Many of these joint projects are described in the Operational Review. A summary
of each of the major projects is included at Table 3.
Table 3
Vehicle Partner Property Gross Debt Halladale
Assets at at 30 April Share of
Value 2003 Equity
30 April
2003
#'000 #'000 %
Halladale Ventures Bank of
Ltd. Scotland 19,045 16,444 50
Bowen Square Citigroup
Properties Ltd. Alternative
Investments 14,810 11,470 10
Woodley Finance Citigroup
Ltd. Alternative
Investments 17,420 13,596 20
Halladale Portfolio Citigroup
Finance Ltd. Alternative
Investments 16,365 15,041 10.1
Halladale Kodak Pension
Opportunity Fund Plan 17,200* 17,604 50
Limited
Partnership
Halladale Haworth Kleinwort
(Newton Abbot) Benson 13,000 10,357 15
Ltd.
Halladale Haworth Kleinwort
(Carlisle) Ltd. Benson 7,100 4,893 15
* This is the purchase price of the property which has not been revalued as it
was only acquired in late January 2003.
Group Borrowings
At 30 April 2003 the Group had total borrowings of #26.52m (2002 - #41.13m) and
cash in hand of #2.44m (2002 - #1.91m). Gearing at 30 April 2003 was 246% (2002
- 479%) on a statutory basis and 157% (2002 - 279%) on a proforma basis. The
level of gearing at 30 April 2003 is consistent with Halladale's business model
which utilises financial leverage to maximise returns and will therefore
fluctuate from time to time.
Of total property borrowings, #12.66m (52%) is at fixed rates averaging 8.68%
pa, including a loan from Sun Life of Canada at a fixed rate of 10.29% referred
to below, which if excluded, reduces the average fixed rate debt to 7.81%. The
balance of #11.86m (48%) is at floating rates, based on either LIBOR or base
rate, at an average rate of 6.39% pa. Additionally there is an unsecured loan of
#2m (2002 - #2.25m) from The Throgmorton Trust plc, a shareholder in the
company, amortising over the next 3 years, at a fixed rate of 8% pa. In all
cases the rates quoted include relevant bank margins.
The company seeks to adopt a pro-active role in interest rate hedging both for
loans on balance sheet and to joint venture vehicles. The over-riding criterion
is to balance, on a project basis, the need to provide a sensible level of
protection against increases in interest rates over the project life while
maintaining sufficient flexibility to allow sales to proceed without prohibitive
breakage costs.
At 30 April 2003 interest cover, being rental income and fees, compared to net
interest cost, was 1.74 times (2002 - 1.49 times) for the Group excluding joint
ventures.
FRS13
The FRS13 fair value adjustment for the current year is #1.294m (2002 - #1.1m).
If this liability were to crystallise then, after tax it would reduce net assets
per share by 4.87p (2002 - 4.25p). The main constituent part of the adjustment
in both years is a loan from Sun Life of Canada amortising by 50% over the
period to maturity in 2014, at a fixed rate of 10.29%. The Company has no
current intention to seek to make early repayment of this debt.
Mark J Harkin, BAcc CA
Finance Director
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year Ended 30 April 2003
2003 2002
# # # #
TURNOVER:
group and
share of joint
ventures #34,141,410 #22,332,295
Less share of
joint
ventures'
turnover (#3,786,174) (#90,901)
-------- --------
GROUP
TURNOVER #30,355,236 #22,241,394
Cost of
sales (#23,994,177) (#16,439,359)
-------- ---------
GROSS PROFIT #6,361,059 #5,802,035
Administrative
Expenses (#2,949,097) (#2,099,234)
-------- ---------
OPERATING
PROFIT #3,411,962 #3,702,801
Share of
operating
profit in
joint venture
companies #1,058,179 #32,263
Share of
operating
profit in
associated
companies #603,677 #335,304
-------- ---------
#5,073,818 #4,070,368
Profit on the
sale of an
operation #0 #59,400
Interest
receivable and
similar
income
Group #180,452 #122,489
Joint venture
companies #10,443 #4,262
Associated
companies #9,653 #0
-------- --------
#200,548 #126,751
Interest
payable and
similar
charges
Group (#2,134,319) (#2,778,770)
Joint venture
companies (#1,003,351) (#70,152)
Associated
companies (#445,409) (#256,268)
-------- --------
(#3,583,079) (#3,105,190)
-------- ---------
PROFIT ON
ORDINARY
ACTIVITIES
BEFORE
TAXATION #1,691,287 #1,151,329
Tax on profit
on ordinary
activities (#376,000) (#185,262)
-------- ---------
PROFIT ON
ORDINARY
ACTIVITIES
AFTER
TAXATION #1,315,287 #966,067
Minority
interest #0 (#27,991)
-------- ---------
PROFIT FOR THE
FINANCIAL
YEAR #1,315,287 #938,076
Dividends (#294,920) (#223,982)
-------- ---------
RETAINED
PROFIT FOR THE
FINANCIAL
YEAR #1,020,367 #714,094
======== =========
EARNINGS PER
ORDINARY
SHARE 7.21p 5.34p
Turnover and operating profit in both years relate wholly to continuing
activites.
There are no recognised gains or losses in the current or prior period other
than the profits disclosed above.
CONSOLIDATED BALANCE SHEET
As at 30 April 2003
2003 2002
# #
FIXED ASSETS
Tangible assets #118,214 #125,532
---------- ----------
Investments in Joint Venture
Companies
Goodwill #60,050 #60,470
Share of gross assets #21,210,002 #10,935,243
Share of gross liabilities (#19,982,977) (#9,958,732)
---------- ----------
#1,287,075 #1,036,981
Investment in associated companies #728,594 #598,864
Other investments #5,314 #5,314
---------- ----------
#2,020,983 #1,641,159
TOTAL FIXED ASSETS #2,139,197 #1,766,691
---------- ----------
CURRENT ASSETS:
Stocks #31,627,943 #45,120,070
Debtors #3,071,272 #2,529,121
Cash at bank and in hand #2,440,837 #1,909,156
---------- ----------
#37,140,052 #49,558,347
CREDITORS:
amounts falling due within one year (#7,081,091) (#9,040,138)
---------- ----------
NET CURRENT ASSETS #30,058,961 #40,518,209
---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES #32,198,158 #42,284,900
CREDITORS
amounts falling due after more than
one year (#22,427,712) (#33,961,792)
Provisions for liabilities and
charges #0 (#81,058)
Minority interest #0 (#47,971)
---------- ----------
#9,770,446 #8,194,079
========== ==========
CAPITAL AND RESERVES
Called up share capital #4,651,875 #4,526,875
Share premium account #2,241,536 #2,111,536
Capital redemption reserve #1,771,875 #1,771,875
Capital reserve #225,836 #0
Profit and loss account #879,324 (#216,207)
---------- ----------
TOTAL EQUITY SHAREHOLDERS' FUNDS #9,770,446 #8,194,079
========== ==========
PRO FORMA UNAUDITED CONSOLIDATED BALANCE SHEET
As at 30 April 2003
2003 2002
# #
Fixed assets
Tangible assets #118,214 #125,532
Investments #3,511,902 #2,184,606
----------- ---------
#3,630,116 #2,310,138
----------- ---------
Current assets
Stocks (stated at open market value) #35,656,540 #50,436,050
Debtors #3,071,272 #2,529,121
Cash at bank and in hand #2,440,837 #1,909,156
----------- ---------
#41,168,649 #54,874,327
----------- ---------
Creditors: Amounts falling due within
one year (#7,081,091) (#9,040,138)
----------- ---------
Net current assets #34,087,558 #45,834,189
----------- ---------
Total assets less current liabilities #37,717,674 #48,144,327
Creditors: Amounts falling due after
more than one year (#22,427,712) (#33,961,792)
Provisions for liabilities and charges #0 (#81,058)
Minority interest #0 (#47,971)
----------- ---------
#15,289,962 #14,053,506
=========== =========
Capital and reserves
Called up share capital #4,651,875 #4,526,875
Capital redemption reserve #1,771,875 #1,771,875
Capital reserve #225,836 #0
Share premium account #2,241,536 #2,111,536
Revaluation reserve #4,529,516 #4,869,427
Profit and loss account #1,869,324 #773,793
----------- ---------
Total shareholders' funds #15,289,962 #14,053,506
=========== =========
The unaudited proforma balance sheet was prepared using the applicable
accounting standards and contains such adjustments as the directors consider
appropriate to reflect the impact of open market valuations arising from an
independent valuation of properties held for resale including the appropriate
share of the properties held in joint ventures and associate companies as at 30
April 2003. This is the only amendment to net assets.
CONSOLIDATED CASH FLOW STATEMENT
Year ended 30 April 2003
Notes 2003 2002
# #
Net cash inflow from operations i. #17,752,847 #3,679,047
Returns on investments and
servicing of finance ii (#1,944,903) (#3,094,167)
Taxation (#180,756) (#123,135)
Capital expenditure and financial
investment ii (#36,771) (#67,374)
Acquisitions and disposals ii (#466,810) (#1,527,521)
Equity dividends paid (#237,208) (#88,176)
------------ -----------
Cash outflow before use of liquid
resources and financing #14,886,399 (#1,221,326)
Financing ii (#14,354,718) #75,104
------------ -----------
Increase/(decrease) in cash #531,681 (#1,146,222)
============ ===========
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
Year ended 30 April 2003
i. Reconciliation of operating profit to net cash inflow from operations
2003 2002
# #
Operating profit #3,411,962 #3,702,801
Depreciation #44,089 #61,905
Goodwill amortised #37,499 #0
Profit not recognised on sale to joint
venture #225,836 #0
Transfer to capital reserve #301,000 #0
Gain on sale of tangible fixed assets #0 (#9,421)
Decrease/(increase) in stocks #13,492,127 (#3,032,419)
(Increase)/decrease in debtors (#373,278) #4,273,944
Increase/(decrease) in creditors #613,612 (#1,317,763)
------------ -----------
Net cash inflow from operations #17,752,847 #3,679,047
============ ===========
ii. Gross cash flows
2003 2002
# #
Returns on investments and servicing of
finance
Interest received #173,890 #122,446
Interest paid (#2,118,793) (#3,216,613)
------------ -----------
(#1,944,903) (#3,094,167)
------------ -----------
Capital expenditure and financial
investment
Purchase of fixtures, equipment and
motor vehicles (#36,771) (#87,774)
Sale of fixed assets #0 #20,400
------------ -----------
(#36,771) (#67,374)
------------ -----------
Acquisitions and disposals
Investments in associated companies (#401,810) (#1,587,521)
Acquisition of minority interest in
subsidiary company (#65,000) #0
Sale of an operation #0 #60,000
------------ -----------
(#466,810) (#1,527,521)
------------ -----------
Financing
Issue of ordinary shares #255,000 #721,975
Expenses of share issue #0 (#50,000)
Loans received #7,641,590 #15,734,079
Loans repaid (#22,251,308) (#16,307,861)
Hire purchase repaid #0 (#23,089)
------------ -----------
(#14,354,718) #75,104
============ ===========
iii. Analysis of changes in net debt
Other
At 1st May non-cash At 30th April
2002 Cash Flows movements 2003
--------- -------- --------- ---------
# # # #
Cash in hand
and in bank #1,909,156 #531,681 #0 #2,440,837
Debt due
within 1
year (#7,169,007) #3,075,638 #0 (#4,093,369)
Debt due after
1 year (#33,961,792) #11,534,080 #0 (#22,427,712)
--------- -------- --------- ---------
(#39,221,643) #15,141,399 #0 (#24,080,244)
========= ======== ========= =========
iv. Reconciliation of net cash to movement in net debt
2003 2002
# #
Increase/(decrease) in cash in the
period #531,681 (#1,146,222)
Cash flow from debt and lease
financing #14,609,718 #596,871
------------ -----------
Change in net debt resulting from cash
flows #15,141,399 (#549,351)
Net debt at 1st May 2002 (#39,221,643) (#38,672,292)
------------ -----------
Net debt at 30th April 2003 (#24,080,244) (#39,221,643)
============ ===========
Notes:
1. With the exception of the pro forma unaudited consolidated balance sheet,
the above results have been extracted from the audited accounts of Halladale
Group plc, which have been prepared by the Directors. They do not represent
statutory accounts as defined by Section 240 of the Companies Act 1985 (as
amended). The statutory accounts were adopted by the Board of Directors on 7
July 2003 and will be filed with the Registrar of Companies. They received
an unqualified audit report, which did not contain a statement under Section
237(2) or 237(3) of the Companies Act 1985 (as amended).
The results for the year ended 30 April 2002 are an abridged version of
the Group's statutory accounts for that year, which received an
unqualified auditor's report which did not contain a statement under
Section 237(2) or Section 237(3) of the Companies Act 1985 (as amended)
and have been filed with the Registrar of Companies.
2. Earnings per share are calculated on the Group profit after tax and
dividend to preference shareholders and minority interest, divided by
the weighted average number of shares in issue during the year, as
follows:
2003 2002
Profit Number of Pence per share Profit Number of Pence per share
shares shares
# p # p
Earnings
per
share #1,315,287 18,232,500 7.21 #938,076 17,569,116 5.34
3. An interim dividend of 0.56p per share, amounting to #101,402 was
paid in February 2003 and it is proposed that a final dividend of 1.04p
per share, amounting to #193,518 be paid in September 2003.
4. A copy of the audited Report and Accounts will be sent to the
shareholders on or before 15 August 2003 and additional copies will be
available free of charge for a month from the offices of the Company's
Nominated Adviser, Collins Stewart, 8th Floor, 88 Wood Street, London
EC2V 7QR. The Annual General Meeting will be held at The Hilton Hotel,
William Street, Glasgow G3 8HT on 9 September 2003 at 11.00am.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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