RNS Number:6397N
UK Balanced Property Trust Ltd(The)
16 July 2003
THE UK BALANCED PROPERTY TRUST LIMITED
CHAIRMAN'S STATEMENT
I have pleasure in presenting the Annual Report of your Company for the
financial period ended 31st March 2003.
As you will be aware, your Company was successfully launched in March 2002 when
it raised #150 million in ordinary share capital. The equity raised together
with use of the loan facility, provided by The Royal Bank of Scotland, enabled
your Company to complete the initial purchases of properties having a portfolio
value of over #216 million. The Company completed its initial investment
programme ahead of its original target date. During the period under review,
your Directors were able to declare and pay a total dividend of 7p in line with
the yield indicated at the time of the original launch. The fact that the
Company has been able to achieve its investment programme ahead of target means
that your Directors have felt comfortable to indicate their intention to pay an
increased dividend during the forthcoming financial year.
The success of the initial launch meant that your Directors were able to bring
forward proposals for further equity capital fund raising earlier this calendar
year in order to take advantage of further investment opportunities. Against
difficult market conditions, your Directors were pleased that the Company was
able to raise a further #41.5 million of ordinary share capital.
This further fund raising enabled your Company to complete the acquisition of a
further portfolio of 21 properties with a value of #73.7 million. Your Company
now has a property portfolio as at July 2003 of 89 properties with a wide and
diverse spread by sector, by regions and by tenant covenant. In particular, it
should be noted that your Company's exposure to the office sector in London and
the South East represents only 11.3% of the total portfolio values and that your
Company has no exposure to the office sector in Central London.
The Accounts are presented in accordance with International Financial Reporting
Standards. The application of these standards require the Company to recognise
on its balance sheet, as a liability, the fair value of the interest rate swap
of #8.48 million hedging its bank loan and hence reducing net assets by #8.48
million as further described in note 13 and (along with the effects of other
differences in accounting standards) note 16 to the Accounts. In an investment
trust, prepared in accordance with United Kingdom Accounting Standards, this
item would not normally be recognised as a liability, since the fair value would
only crystallise in the event that the Company elected to repay its bank loan
before maturity. Your Directors have no intention of repaying the bank loans
before the maturity of the corresponding interest rate swap contracts.
At the Annual General Meeting, the shareholders will be asked to pass a
resolution authorising the Company to buy back up to 14.99% of the Company's
issued share capital. The Directors would only exercise that authority if the
market price of shares was at a discount to the Company's Net Asset Value.
THE UK BALANCED PROPERTY TRUST LIMITED
CHAIRMAN'S STATEMENT (continued)
In the past 12 months, there has been adverse press comment aimed both at
investment trusts and the property sector. The fact that your Company has
enjoyed a successful launch and has been able to raise additional ordinary share
capital earlier this calendar year serves to emphasise, I believe, the
importance of the role of investment trusts and investment funds in assisting
private investors to achieve balance through participation in a wide range of
different investments. In particular, an investment fund, such as your Company,
has enabled investors to achieve an exposure to investment in commercial
property, which has shown considerable resilience and robustness when measured
against other investment assets. No doubt, there may be some short-term
corrections in particular classes of commercial property, but your Directors
remain confident that the diversity of your Company's property portfolio will
enable your Company and its Shareholders to continue to achieve sustained
dividends and modest levels of capital growth over the medium-term.
Yours sincerely
Peter Harwood
Chairman
THE UK BALANCED PROPERTY TRUST LIMITED
Consolidated Income Statement
for the period from incorporation on 22 January 2002 to 31 March 2003
Period to
31 March 2003
GBP
Income
Rental income from investment properties 17,259,950
Expenditure
Set-up costs (3,386,773)
Investment Manager's fee (2,631,804)
Issue costs (969,774)
Property management expenses (309,895)
Legal & professional fees (619,824)
Provision for bad debts (322,715)
Amortisation on (162,523)
leasehold properties
Administration fee (118,652)
Valuers' fees (114,944)
Directors' fees (73,500)
Registrar & Sub-Registrar fees (45,000)
Tax exemption, compliance and stock exchange fees (23,809)
Other expenses (60,871)
---------
(8,840,084)
---------
Net operating profit for the period before finance costs 8,419,866
Finance costs
Interest receivable 455,340
Interest payable (3,430,733)
Facility fee and bank loan cost amortisation (73,419)
---------
(3,048,812)
---------
Net profit on ordinary activities before taxation 5,371,054
Taxation on profit on ordinary activities (126,299)
---------
Net profit on ordinary activities after taxation 5,244,755
Gain from investments
Realised gain on disposal of investment properties 1,386,057
Unrealised gain on revaluation of investment properties 4,043,979
---------
5,430,036
---------
Net profit for the period 10,674,791
=========
Pence
Earnings per ordinary share 7.06
All items in the above statement derive from continuing
operations.
The Company was incorporated on 22 January 2002 and commenced
operations on 20 March 2002.
THE UK BALANCED PROPERTY TRUST LIMITED
Consolidated Balance Sheet
At 31 March 2003
31 March 2003
GBP
Non-current assets
Freehold properties: at market value 263,485,000
Leasehold properties: at amortised cost 25,566,588
---------
289,051,588
Current assets
Debtors and prepayments 6,092,353
Cash and cash equivalents 7,980,692
---------
14,073,045
---------
Total assets 303,124,633
Non-current liabilities
Bank loan (100,132,486)
Interest rate swap liability (8,482,772)
Deferred income tax liability (62,299)
---------
(108,677,557)
Current liabilities
Creditors and accruals (12,200,130)
Income tax payable (21,702)
---------
(12,221,832)
---------
Total liabilities (120,899,389)
---------
NET ASSETS 182,225,244
=========
Equity
Share capital 47,780,250
Share premium 142,403,475
Revenue reserves (4,905,745)
Capital reserves (3,052,736)
---------
TOTAL EQUITY 182,225,244
=========
Pence
Adjusted net asset value per ordinary share 95.35
Approved by the directors on 16 July 2003
Peter Harwood Director
Nichola Adamson Director
THE UK BALANCED PROPERTY TRUST LIMITED
Consolidated Cash Flow Statement
for the period from incorporation on 22 January 2002 to 31 March 2003
Period to
31 March 2003
GBP
OPERATING ACTIVITIES
Net operating profit for the period 8,419,866
Adjustment for:
Non cash item: amortisation of long leasehold properties 162,523
Increase in operating debtors and prepayments (6,086,353)
Increase in operating creditors and accruals 8,401,211
---------
2,477,381
Income tax paid (42,298)
Interest received 449,340
Interest paid (3,363,960)
---------
(2,914,620)
---------
Net cash inflow from operating activities 7,940,329
=========
INVESTING ACTIVITIES
Purchases of investment properties (291,582,568)
Proceeds on sale of investment properties 7,798,493
---------
Net cash outflow from investing activities (283,784,075)
=========
FINANCING ACTIVITIES
Proceeds from issue of ordinary share capital 191,943,420
Less: directly attributable set-up costs (334,724)
Draw down of bank loan 100,700,000
Bank loan arrangement fees (609,258)
Dividends paid (7,875,000)
---------
Net cash inflow from financing activities 283,824,438
=========
---------
Cash and cash equivalents at end of period 7,980,692
=========
This information is provided by RNS
The company news service from the London Stock Exchange
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