TIDMCIC
RNS Number : 8522K
Conygar Investment Company PLC(The)
10 May 2022
10 May 2022
The Conygar Investment Company PLC
Interim results for the six months ended 31 March 2022
Summary
-- Net asset value ("NAV") increased by GBP12.44 million to
GBP126.58 million (212.25p per share), including a GBP10.52 million
uplift from the placing of 7,139,000 of the Company's own
shares.
-- NAV per share decreased by 5.16p per share to 212.25p as a
result of 8.58p per share dilution from issuing shares at a
discount, partly offset by a 3.42p per share increase from the
GBP1.93 million profit realised in the period.
-- Total cash deposits of GBP30.66 million (51.41p per share).
-- No debt and no borrowings.
-- Development progressed for the first phase of the mixed-use
project at The Island Quarter, Nottingham, planned for opening in
the summer of 2022.
-- Disposal of the industrial units at Selly Oak, Birmingham,
completed in December 2021, realising a net profit of GBP3.42
million.
-- Disposal of the retail park at Cross Hands, Carmarthenshire,
for GBP18.28 million realising a GBP0.53 million surplus over the
30 September 2021 valuation.
-- A further planning application was submitted in October 2021
for the proposed mixed-use waterfront development in Holyhead,
Anglesey, supplementing the outline consent granted in 2014.
-- A non-binding exclusivity agreement was entered into with
Wholesale Fruit Centre (Bristol) Limited in connection with the
potential acquisition of a 14.7-acre development at the Bristol
Fruitmarket site in the St Philip's Marsh area of Bristol.
Group net assets summary
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'm GBP'm GBP'm
Properties 99.34 62.24 108.44
Cash 30.66 23.93 13.66
Other 0.57 0.49 (0.66)
Provisions (3.99) - (7.30)
Total 126.58 86.66 114.14
NAV per share 212.25p 163.97p 217.41p
Robert Ware, Chief Executive commented:
" The soon to be opening up and ongoing development programme at
The Island Quarter site in Nottingham in conjunction with the
resurgence of interest in a nuclear capability in Anglesey leaves
the Group well placed to benefit from the post-pandemic economic
bounce and strong demand for high quality, sustainable, UK real
estate, particularly in the residential rental market.
Although the further advancement of our development portfolio
will require a substantial investment by third-parties we are
confident that there is significant interest which will become
clearer over the year."
Enquiries:
The Conygar Investment Company PLC
Robert Ware: 0207 258 8670
David Baldwin: 0207 258 8670
Liberum Capital Limited (nominated adviser and broker)
Richard Lindley: 0203 100 2222
Jamie Richards: 0203 100 2222
Edward Phillips: 0203 100 2222
Temple Bar Advisory (public relations)
Alex Child-Villiers: 07795 425580
Will Barker: 07827 960151
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as amended by The
Market Abuse (Amendment) (EU Exit) Regulations 2019. Upon the
publication of this announcement via the Regulatory Information
Service, this inside information is now considered to be in the
public domain.
This announcement is being made on behalf of the Company by
David Baldwin, Finance Director.
Chairman's and Chief Executive's statement
Results summary
The Group achieved a profit of GBP1.93 million in the period
(year ended 30 September 2021: profit of GBP26.53 million). This
arose from completion of the forward sale of our industrial units
at Selly Oak, Birmingham, and the sale of our retail park at Cross
Hands, Carmarthenshire, which gave rise to a combined net profit,
before administrative and other operational costs, of GBP3.84
million. These sales, in addition to the placing of 7.14 million
shares in December 2021, generated gross cash proceeds in the
period of over GBP36 million.
Whilst this is a pleasing result, that has enabled the continued
progression of our exciting mixed-use development at The Island
Quarter site in Nottingham, it should be noted that the share
placing at a discounted price of 150p, after adjusting for realised
profits, has resulted in a net reduction of the Group's net asset
value per share in the period of 5.16p (2.37%) to 212.25p per share
as at 31 March 2022 (30 September 2021: 217.41p).
The Island Quarter, Nottingham
Just over 5 years since we first acquired The Island Quarter
site, we are delighted to see the first phase of this substantial
regeneration project nearing practical completion with the food,
beverage and events venue at Canal Turn to be fitted out over the
coming weeks in advance of a planned opening in the summer.
Canal Turn comprises an outside performance area, restaurants,
bars, extensive events space for private hire and a rooftop terrace
which will provide an exciting, new and unique destination for the
city to be managed and operated by a local Nottingham team. The
venue's two restaurants, "Binks Yard" and "Cleaver & Wake",
will be led by the 2018 MasterChef: The Professionals winner and
chef patron Laurence Henry. Binks Yard will provide an all-day
dining, drinking and entertainment venue whilst the Cleaver &
Wake restaurant will offer a modern dining experience using the
best nationally sourced produce.
We anticipate that the detailed application for the plot
adjacent to Canal Turn, which incorporates proposals for two
hotels, to be managed by Intercontinental Hotels Group, co-working
space, 247 build to rent apartments plus an extensive food and
beverage offering, will be granted by the summer.
Furthermore, ground preparation works have been carried out for
the now fully consented 700-bed student accommodation scheme to
enable commencement of this development in the summer of 2022 and
completion in good time for the September 2024 student intake.
We continue to progress the designs for subsequent phases and
are in advanced discussions with potential lenders to finance both
the student accommodation development as well as later phases of
the project and expect to make announcements in that regard over
the coming months.
For this Interim Report we have not sourced a third-party
valuation for The Island Quarter site. The Conygar Board have,
however, considered its fair value by reference to any changes in
the assumptions set out in the reported 30 September 2021 valuation
provided by Knight Frank LLP, progression of the project and the
recoverability of costs incurred since that date. During the
period, no planning permissions have been granted or buildings
completed and whilst we recognise the impact that price inflation
is currently having upon property construction costs, we are seeing
these increases being offset by a corresponding uplift in market
rents, particularly within the residential build to rent and
student accommodation sectors. However, there have been significant
cash outlays in the period to bring electricity to the site and
progress the construction of Canal Turn. As such the fair value at
31 March 2022 has been increased by GBP11.91 million to GBP82.41
million to reflect the development costs incurred in the six-months
since 30 September 2021.
Other projects
At Cross Hands, Carmarthenshire, we were able to benefit from
the pandemic bounce in retail warehousing values by accepting an
offer to purchase our retail park for net proceeds of GBP18.28
million. The sale, which completed in February 2022, generated a
profit in the period, after final development and sale costs, of
GBP0.42 million. Further capital profits of GBP3.51 million were
recognised, by way of revaluation surpluses, in prior periods
which, in addition to GBP1.22 million of post development rental
surpluses, has resulted in a total profit from the park of GBP5.15
million.
The granting, by Birmingham City Council, of their consent to a
student home scheme at our site at Selly Oak enabled completion of
the sale to a specialist provider of student accommodation for
gross proceeds of GBP7.04 million. The sale realised a profit in
the current period, after costs, of GBP3.42 million in addition to
GBP0.66 million of prior period rental surpluses realised since our
acquisition of these industrial units in April 2018.
At Holyhead Waterfront, Anglesey, the detailed application and
marine licence applications, submitted in October 2021, for a
proposed development to include a 250-berth marina, 259 townhouses
and apartments, marine commercial and additional A1/A3 retail
units, were validated in January 2022. We expect a determination by
the Local Authority in the autumn of this year.
Whilst it is difficult to predict the impact that the ongoing
war in Ukraine will have on the real estate sector, its occurrence,
in conjunction with the global shift towards low carbon energy, has
strongly influenced the Government's desire for more UK sourced
power. The release, in April 2022, of their Energy Security
Strategy sets out proposals for the provision of greater energy
independence and security, by way of supercharging the deployment
of cleaner and more affordable energy. This includes the provision
of a GBP120 million Future Nuclear Enabling Fund to progress a
series of projects as soon as possible this decade, including the
Wylfa site in Anglesey, where talks were already ongoing between
the UK and Welsh Governments and US energy and engineering firms
Westinghouse and Bechtel.
If the UK and Welsh Governments eventually decide to support
nuclear and / or other energy forms on Anglesey, our site on the
Holyhead Waterfront and over 200 acres of currently brownfield but
developable land at Rhosgoch and Parc Cybi are well positioned to
support the significant residential and logistical provisions which
will be required.
In December 2021, we announced that the Company had entered into
a non-binding exclusivity agreement with Wholesale Fruit Centre
(Bristol) Limited regarding the potential acquisition of a
14.7-acre development at the Bristol Fruitmarket Site in the St
Philip's Marsh area of Bristol, one mile to the east of Bristol
Temple Meads. The initial agreement lasted for up to 5 months,
which has now been extended to 24 May 2022. During the exclusivity
period we will establish whether or not to proceed with the
proposed acquisition. If the acquisition were to go ahead, it would
be subject to us obtaining an agreeable planning permission for the
site and as such the completion is unlikely to occur in the near
term.
ESG Programme and electronic financial reporting
The impact that the real estate sector has on carbon emissions
has been extensively reported and is increasingly affecting
occupier and investor decisions. In order to guide our approach to
sustainability for the development portfolio, the Board have
established an ESG programme which forms a key part of each project
and its constituent components - from project brief, through to
design/specification, construction, operation and renovation. At
all stages, the development, operations and asset management teams
are required to assess their performance, innovate, evolve and
perfect all practices against the ESG framework. Further details of
the programme will be set out in the Group's 2022 Annual
Report.
As part of these arrangements, to avoid where possible the
distribution in paper format of the Company's Interim and Annual
Report's each year, the shareholders passed a resolution at the
Company's AGM in December 2021 to authorise the Company to serve
notices or supply other documentation by electronic means. For
those individual shareholders that specifically requested to
continue to receive such documents in paper format the arrangements
will continue as before. For all others these reports will be made
available, as soon as practically possible after the Group's
results are announced each period, via the Company's website.
Share placing
At the Company's Annual General Meeting, held on 20 December
2021, resolutions were passed to enable the Company to complete the
placing of 7,138,998 Ordinary shares of 5p each at a placing price
of 150p per share, to enable the further progression of The Island
Quarter project. This includes the continued development and
fitting out of the first phase of the scheme at Canal Turn,
bringing a new electricity substation to the site and, later this
year, to part fund the equity component of the student
accommodation development.
The premium received from each placing share over their 5p
nominal value, net of fees paid in connection with the placing,
resulted in a GBP10.16 million credit to the Company's share
premium account. At a General Meeting of the Company on 28 March
2022 a further resolution was passed to enable the cancellation of
the share premium account, subject to approval of the Court, such
that the amount cancelled can be credited to a distributable
reserve. On 22 April 2022, an application was submitted to the
Court to request the cancellation which is expected to be
considered in late May 2022.
Outlook
The soon to be opening up and ongoing development programme at
The Island Quarter site in Nottingham in conjunction with the
resurgence of interest in a nuclear capability in Anglesey leaves
the Group well placed to benefit from the post-pandemic economic
bounce and strong demand for high quality, sustainable, UK real
estate, particularly in the residential rental market.
Although the further advancement of our development portfolio
will require a substantial investment by third-parties we are
confident that there is significant interest which will become
clearer over the year.
N J Hamway R T E Ware
Chairman Chief Executive
Financial review
Net asset value
During the six months ended 31 March 2022, the net asset value
increased by GBP12.44 million to GBP126.58 million (31 March 2021:
GBP86.66 million; 30 September 2021: GBP114.14 million). The
primary movements in the period were net proceeds of GBP10.52
million from the placing of 7,139,000 ordinary shares, a GBP3.42
million profit on completion of the forward sale agreement for
Selly Oak and a further GBP0.42 million profit from the sale of
Cross Hands retail park. This has been offset by GBP1.04 million of
administrative costs, GBP0.20 million of development costs written
off and GBP0.68 million of net operating costs.
Conversely, the net asset value per share has decreased in the
period by 5.16p per share to 212.25p as at 31 March 2022. The
placing of shares at a discount to NAV, to provide additional
capital to further progress The Island Quarter project in
Nottingham, resulted in a dilution of 8.58p per share. This was
partly offset by the GBP1.93 million profit realised in the period
which increased the net asset value per share by 3.42p.
Cash flow and financing
At 31 March 2022, the Group had cash deposits of GBP30.66
million and no debt (31 March 2021: cash of GBP23.93 million and no
debt; 30 September 2021: cash of GBP13.66 million and no debt).
The primary cash inflows in the current period were gross
proceeds of GBP18.54 million from the sale of Cross Hands, GBP7.04
million from the sale of Selly Oak and GBP10.52 million from the
share placing. These were partly offset by GBP18.02 million
incurred on development projects and investment properties,
including GBP14.33 million to progress the development at The
Island Quarter and GBP2.81 million to pay the Nottingham
introductory fee provided for at 30 September 2021, resulting in a
net cash inflow during the period of GBP17.00 million.
Net income from property activities Six months ended Year
ended
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'm GBP'm GBP'm
Rental income (0.51) 0.82 1.59
Direct property costs (0.18) (0.16) (0.29)
(0.69) 0.66 1.30
Sale of properties 25.58 1.05 1.05
Cost of properties sold (21.74) (0.62) (0.62)
3.84 0.43 0.43
Total net income arising from property activities 3.15 1.09 1.73
Administrative expenses
The administrative expenses for the period ended 31 March 2022
were GBP1.04 million (period ended 31 March 2021: GBP0.97 million;
year ended 30 September 2021: GBP2.06 million). The major items
were salary costs of GBP0.71 million (period ended 31 March 2021:
GBP0.69 million; year ended 30 September 2021: GBP1.41 million) and
various costs arising as a result of the Group being listed on
AIM.
Taxation
No current tax is payable on the profit for the six months ended
31 March 2022 (period ended 31 March 2021: GBPnil; year ended 30
September 2021: GBPnil) as the group has tax losses available to
offset against any resulting taxable profit.
As set out in note 6 of the Interim Report, the Directors have
assessed the potential deferred tax liability of the Group as at 31
March 2022 in respect of chargeable gains that would be payable if
the investment properties were sold at their reported values at
each period end. Based on the unrealised chargeable gain of
GBP18.48 million arising in the year ended 30 September 2021, and
remaining at 31 March 2022, a deferred tax liability of GBP4.62
million has been recognised.
The Directors have also recognised a deferred tax asset of
GBP2.93 million at 31 March 2022 and 30 September 2021 for tax
losses, held by various group undertakings, where the Directors
believe it is probable that these assets will be recovered.
As at 31 March 2022, the Group has further unused tax losses of
GBP19.10 million (31 March 2021: GBP42.00 million; 30 September
2021: GBP20.10 million) for which no deferred tax asset has been
recognised in the consolidated balance sheet.
Summary of investment properties
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'm GBP'm GBP'm
Nottingham - (1) 82.41 26.88 70.50
Cross Hands - (2) - 15.85 17.75
Total 82.41 42.73 88.25
(1) The Group's investment in Nottingham was valued by the
Directors at 31 March 2022 and by Knight Frank LLP, in their
capacity as external valuers at 30 September 2021. In accordance
with IAS 40, as this project was not sufficiently advanced, such
that a fair value could be readily determined at 31 March 2021, the
investment in Nottingham was reported at cost on that date.
(2) Cross Hands was sold in February 2022. External valuations
for the other reported periods were provided by Knight Frank
LLP.
Summary of development and trading properties
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'm GBP'm GBP'm
Haverfordwest 8.93 7.93 8.62
Holyhead Waterfront 5.00 5.00 5.00
Selly Oak - (2) - 3.57 3.57
Rhosgoch 2.50 2.50 2.50
Parc Cybi 0.50 0.50 0.50
Total 16.93 19.50 20.19
(1) Development and trading properties are stated at the lower of cost and net realisable value.
(2) The sale of Selly Oak completed in December 2021.
Consolidated statement of comprehensive income
For the six months ended 31 March 2022
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022 2021 2021
Note GBP'000 GBP'000 GBP'000
Rental income 3 (506) 824 1,592
Proceeds on sale of development and
trading properties 7,040 1,050 1,050
Revenue 6,534 1,874 2,642
Direct costs of rental income (178) (155) (288)
Costs on sale of development and
trading properties (3,620) (620) (620)
Development costs written off 12 (202) (367) (675)
Direct costs (4,000) (1,142) (1,583)
Gross profit 2,534 732 1,059
Profit on sale of investment property 423 - -
(Deficit) / surplus on revaluation
of investment property 9 - (1,151) 459
Surplus on revaluation of investment
properties
under construction - - 28,718
Administrative expenses (1,036) (973) (2,058)
Operating profit/ (loss) 1,921 (1,392) 28,178
Finance costs 5 - (1) (2)
Finance income 5 5 25 34
Profit / (loss) before taxation 1,926 (1,368) 28,210
Taxation 6 - - (1,685)
Profit / (loss) and total comprehensive
income / (loss) for the period 1,926 (1,368) 26,525
Basic and diluted profit / (loss) per
share 8 3.42p (2.55)p 49.99p
All amounts are attributable to equity shareholders of the
Company.
All of the activities of the Group are classed as
continuing.
Consolidated statement of changes in equity
For the six months ended 31 March 2022
Share Capital
Share premium redemption Treasury Retained Total
capital account reserve shares earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Changes in equity for the
six months ended 31 March
2021
At 1 October 2020 2,680 - 3,873 - 82,280 88,833
Loss for the period - - - - (1,368) (1,368)
Total comprehensive charge
for the period - - - - (1,368) (1,368)
Purchase of own shares - - - (807) - (807)
At 31 March 2021 2,680 - 3,873 (807) 80,912 86,658
Changes in equity for the
year ended 30 September 2021
At 1 October 2020 2,680 - 3,873 - 82,280 88,833
Profit for the year - - - - 26,525 26,525
Total comprehensive income
for the year - - - - 26,525 26,525
Purchase of own shares - - - (1,217) - (1,217)
Cancellation of treasury shares (55) - 55 1,217 (1,217) -
At 30 September 2021 2,625 - 3,928 - 107,588 114,141
Changes in equity for the
six months ended 31 March
2022
At 1 October 2021 2,625 - 3,928 - 107,588 114,141
Profit for the period - - - - 1,926 1,926
Total comprehensive income
for the period - - - - 1,926 1,926
Gross proceeds from placing
of own shares 357 10,352 - - - 10,709
Fees paid on placing of own
shares - (193) - - - (193)
At 31 March 2022 2,982 10,159 3,928 - 109,514 126,583
Consolidated balance sheet
As at 31 March 2022
31 Mar 31 Mar 30 Sept
2022 2021 2021
Note GBP'000 GBP'000 GBP'000
Non-current assets
Investment properties 9 - 15,850 17,750
Investment properties under construction 10 82,411 26,882 70,500
Fixtures, fittings and equipment 11 182 - -
Right of use asset 7 100 53
Deferred tax asset 6 2,935 - 2,935
85,535 42,832 91,238
Current assets
Development and trading properties 12 16,926 19,503 20,192
Trade and other receivables 13 1,258 1,453 2,661
Tax asset 28 31 28
Cash and cash equivalents 30,661 23,933 13,657
48,873 44,920 36,538
Total assets 134,408 87,752 127,776
Current liabilities
Trade and other payables 14 904 995 3,367
Provision for liabilities and
charges 15 - - 5,614
Lease liability for right of
use asset - 99 34
904 1,094 9,015
Non-current liabilities
Deferred tax liability 6 4,620 - 4,620
Provision for liabilities and
charges 15 2,301 - -
6,921 - 4,620
Total liabilities 7,825 1,094 13,635
Net assets 126,583 86,658 114,141
Equity
Called up share capital 16 2,982 2,680 2,625
Share premium account 16 10,159 - -
Capital redemption reserve 3,928 3,873 3,928
Treasury shares - (807) -
Retained earnings 109,514 80,912 107,588
Total equity 126,583 86,658 114,141
Net assets per share 17 212.25p 163.97p 217.41p
Consolidated cash flow statement
For the six months ended 31 March 2022
Six months ended Year
ended
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Operating profit / (loss) 1,921 (1,392) 28,178
Development costs written off 202 367 675
Deficit / (surplus) on revaluation of
investment properties - 1,151 (29,177)
Profit on sale of investment property (423) - -
Profit on sale of development and trading
properties (3,420) (430) (430)
Depreciation of right of use assets 46 46 93
Cash flows from operations before changes
in working capital (1,674) (258) (661)
Decrease / (increase) in trade and other
receivables 1,403 202 (1,006)
Additions to development and trading
properties (712) (686) (1,438)
Net proceeds from sale of development
and trading properties 6,990 1,033 1,025
(Decrease) / increase in trade and other
payables (577) (296) 287
Cash flows generated from / (used in)
operations 5,430 (5) (1,793)
Tax received - - 3
Cash flows generated from / (used in)
operating activities 5,430 (5) (1,790)
Cash flows from investing activities
Additions to investment properties (14,501) (7,737) (15,496)
Proceeds from the sale of investment
property 18,465 - -
Payment of introductory fee (note 15) (2,807) - -
Additions to fixtures, fittings and equipment (104) - -
Finance income 5 25 34
Cash flows generated from / (used in)
investing activities 1,058 (7,712) (15,462)
Cash flows from financing activities
Net proceeds from placing of own shares 10,516 - -
Purchase of own shares - (476) (1,217)
Cash flows generated from / (used in)
financing activities 10,516 (476) (1,217)
Net increase / (decrease) in cash and
cash equivalents 17,004 (8,193) (18,469)
Cash and cash equivalents at start of
period 13,657 32,126 32,126
Cash and cash equivalents at end of
period 30,661 23,933 13,657
Notes to the interim results
1. General information
The Conygar Investment Company PLC ("the Company") is
incorporated in the United Kingdom and domiciled in England and
Wales, is registered at Companies House under registration number
04907617, listed on the AIM market of the London Stock Exchange and
limited by shares.
The financial information set out in this report covers the six
months to 31 March 2022, with comparative amounts shown for the six
months to 31 March 2021 and the year to 30 September 2021, and
includes the results and net assets of the Company and its
subsidiaries, together referred to as the Group.
Further information about the Group and Company can be found on
its website www.conygar.com.
2. Basis of preparation
The accounting policies used in preparing the condensed
financial information are consistent with those of the annual
financial statements for the year ended 30 September 2021 other
than the mandatory adoption of new standards, revisions and
interpretations that are applicable to accounting periods
commencing on or after 1 October 2021, as detailed in the annual
financial statements.
The condensed financial information for the six-month period
ended 31 March 2022 and the six-month period ended 31 March 2021
has been reviewed but not audited and does not constitute full
financial statements within the meaning of section 435 of the
Companies Act 2006.
The financial information for the year ended 30 September 2021
does not constitute the Group's statutory accounts for that period
but it is derived from those accounts. Statutory accounts for the
year ended 30 September 2021 have been delivered to the Registrar
of Companies. Saffery Champness LLP reported on those accounts,
their report was unqualified and did not contain statements under
section 498(2) or (3) of the Companies Act 2006.
The board of directors approved the above results on 10 May
2022.
Copies of the interim report may be obtained from the Company
Secretary, The Conygar Investment Company PLC, First Floor, Suite
3, 1 Duchess Street, London, W1W 6AN.
3. Rental income
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
Income from operating leases 898 804 1,552
Reversal of rent spreading adjustment (1,424) - -
Option fee income 20 20 40
(506) 824 1,592
The Group's revenue for the period ended 31 March 2022 includes
the reversal of a GBP1.4 million accrued rent debtor following the
sales of Cross Hands and Selly Oak in the current period. This
debtor arose from the even spreading of rental income, derived from
operating leases, over each tenant's respective minimum lease term
after allowing for rent free periods.
4. Segmental information
IFRS 8 "Operating Segments" requires the identification of the
Group's operating segments which are defined as being discrete
components of the Group's operations whose results are regularly
reviewed by the Board. The Group divides its business into the
following segments:
-- Investment properties held for capital appreciation, rental income or both;
-- Development and trading properties, which include sites and
developments under construction held for sale in the ordinary
course of business; and,
-- Food, beverage and events operations, which are planned to commence in July 2022.
Balance sheet
As at 31 Mar As at 31
2022 Mar 2021
Food,
Investment Development beverage Group Investment Development Group
properties properties and events Other total properties properties Other total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment
properties 82,411 - - - 82,411 42,732 - - 42,732
Development
and
trading
properties - 16,926 - - 16,926 - 19,503 - 19,503
Fixtures,
fittings
and
equipment - - 182 - 182 - - - -
82,411 16,926 182 - 99,519 42,732 19,503 - 62,235
Other assets 3,777 42 - 31,070 34,889 1,205 256 24,056 25,517
Total assets 86,188 16,968 182 31,070 134,408 43,937 19,759 24,056 87,752
Liabilities (7,513) (54) - (258) (7,825) (516) (48) (530) (1,094)
Net assets 78,675 16,914 182 30,812 126,583 43,421 19,711 23,526 86,658
Statement of comprehensive income
Six months Six months
ended ended
31 March 2022 31 March 2021
Investment Development Group Investment Development Group
properties properties Other total properties properties Other total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue (524) 7,058 - 6,534 640 1,234 - 1,874
Direct costs (78) (3,922) - (4,000) (99) (1,043) - (1,142)
Gross (loss) / profit (602) 3,136 - 2,534 541 191 - 732
Revaluation of investment
properties - - - - (1,151) - - (1,151)
Profit on sale of
investment property 423 - - 423 - - - -
Administrative expenses - - (1,036) (1,036) - - (973) (973)
Operating (loss)
/ profit (179) 3,136 (1,036) 1,921 (610) 191 (973) (1,392)
Finance costs - - - - - - (1) (1)
Finance income - - 5 5 - - 25 25
(Loss) / profit
before taxation (179) 3,136 (1,031) 1,926 (610) 191 (949) (1,368)
Taxation - - - - - - - -
(Loss) / profit
after taxation (179) 3,136 (1,031) 1,926 (610) 191 (949) (1,368)
5. Finance income and cost
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
Bank interest receivable 5 25 34
Interest cost under IFRS 16 - 1 2
6. Taxation
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
Current tax - - -
Deferred tax charge - - 1,685
Total tax charge - - 1,685
Deferred tax asset
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
At start of the period 2,935 - -
Credit for the period - - 2,935
At end of the period 2,935 - 2,935
The Group has recognised a deferred tax asset for tax losses,
held by various group undertakings, where the Directors believe it
is probable that this asset will be recovered.
As at 31 March 2022, the Group has further unused losses of
GBP19.1 million (31 March 2021: GBP42.0 million; 30 September 2021:
GBP20.1 million) for which no deferred tax asset has been
recognised in the consolidated balance sheet.
Deferred tax liability -
in respect of chargeable gains Six months ended Year ended
on investment properties
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
At start of the period 4,620 - -
Charge for the period - - 4,620
At end of the period 4,620 - 4,620
The Directors have assessed the potential deferred tax liability
of the Group as at 31 March 2022 in respect of chargeable gains
that would be payable if the investment properties were sold at
their reported values at each period end. Based on the unrealised
chargeable gain of GBP18,478,000 arising in the year ended 30
September 2021, and remaining at 31 March 2022, a deferred tax
liability of GBP4,620,000 has been recognised.
The deferred tax asset and liability have been calculated at a
corporation tax rate of 25% being the rate that has been enacted by
the balance sheet date and which is expected to apply when the
liability is settled and the asset realised.
7. Dividends
No dividends were paid in the six-month periods ended 31 March
2022 and 31 March 2021 or the year ended 30 September 2021.
8. Profit / (loss) per share
Profit / (loss) per share is calculated as the profit / (loss)
attributable to ordinary shareholders of the Company for the period
ended 31 March 2022 of GBP1,926,000 (period ended 31 March 2021:
loss of GBP1,368,000; year ended 30 September 2021: profit of
GBP26,525,000) divided by the weighted average number of shares in
issue throughout the period of 56,382,891 (31 March 2021:
53,569,832; 30 September 2021: 53,064,275). There are no diluting
amounts in either the current or prior periods.
9. Investment properties
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
At the start of the period 17,750 16,500 16,500
Additions 109 501 791
Disposals (17,859) - -
Revaluation (deficit) / surplus - (1,151) 459
At the end of the period - 15,850 17,750
The investment property at Cross Hands was sold on 10 February
2022 for net proceeds of GBP18.3 million. As at 31 March 2021 and
30 September 2021, Cross Hands was valued by Knight Frank LLP in
their capacity as external valuers. The valuations were prepared on
a fixed fee basis, independent of the property value and undertaken
in accordance with the RICS Valuation - Global Standards on the
basis of fair value, supported by reference to market evidence of
transaction prices for similar properties. They assume a willing
buyer and a willing seller in an arm's length transaction and
reflect usual deductions in respect of purchaser's costs and SDLT
as applicable at each valuation date. The independent valuer made
various assumptions including future rental income, anticipated
void costs and the appropriate discount rate or yield.
The fair values were determined using an income capitalisation
technique whereby contracted rent and market rental values are
capitalised with a market capitalisation rate. This technique is
consistent with the principles in IFRS 13 and uses significant
unobservable inputs, such that the fair value has been classified
in all periods as Level 3 in the fair value hierarchy as defined in
IFRS 13.
The historical cost of the Group's investment properties as at
31 March 2022 was GBPnil (31 March 2021: GBP13,952,000; 30
September 2021: GBP14,242,000).
The Group's revenue for the period ended 31 March 2022 includes
GBP898,000 derived from properties leased out under operating
leases (period ended 31 March 2021: GBP804,000; year ended 30
September 2021: GBP1,552,000). The Group's revenue for the period
ended 31 March 2022 also includes the reversal of a GBP1.4 million
accrued rent debtor as set out in note 3.
10. Investment properties under construction
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
At the start of the period 70,500 19,761 19,761
Additions 12,417 7,121 16,407
Revaluation surplus - - 28,718
Movement in introductory fee provision
(note 15) (506) - 5,614
At the end of the period 82,411 26,882 70,500
Investment properties under construction comprise freehold land
and buildings at The Island Quarter, Nottingham which are held for
current or future development as investment properties and reported
in the balance sheet at fair value as at 31 March 2022 and 30
September 2021 and cost as at 31 March 2021.
As set out in the Chairman's and Chief Executive's statement,
the reported fair value of The Island Quarter site as at 31 March
2022 has been provided by the Conygar Board by reference to any
changes in the assumptions set out in the reported 30 September
2021 valuation provided by Knight Frank LLP, progression of the
project and the recoverability of costs incurred since that date.
During the period, no planning permissions have been granted or
buildings completed and whilst we recognise the impact that price
inflation is currently having upon property construction costs, we
are seeing these increases offset by a corresponding uplift in
market rents, particularly within the residential build to rent and
student accommodation sectors. However, there have been significant
cash outlays in the period to bring electricity to the site and
progress the construction of Canal Turn. As such the fair value at
31 March 2022 has been increased by GBP11.91 million to GBP82.41
million to reflect the development costs incurred in the six-months
since 30 September 2021.
In preparing their valuation at 30 September 2021, Knight Frank
utilised market and site specific data, their own extensive
knowledge of the real estate sector, professional judgement and
other market observations as well as information provided by the
Company's Executive Directors. The resulting models and assumptions
therein were also reviewed for overall reasonableness by the
Conygar Board. Inevitably, with complex modelling like this,
variations in assumptions can lead to widely differing values. The
Board considered the valuation in the context of their experience
and believed the value of approximately GBP2 million per acre was
justifiable at that date.
The Knight Frank LLP valuation was prepared on a fixed fee
basis, independent of the property value and undertaken in
accordance with RICS Valuation - Global Standards on the basis of
fair value, supported by reference to market evidence of
transaction prices for similar properties. It assumed a willing
buyer and a willing seller in an arm's length transaction and
reflected usual deductions in respect of purchaser's costs and SDLT
as applicable at the valuation date. The independent valuer made
various assumptions including future rental income, anticipated
void costs and the appropriate discount rate or yield.
The fair value of Nottingham has been determined using an income
capitalisation technique whereby contracted rent and market rental
values are capitalised with a market capitalisation rate. This
technique is consistent with the principles in IFRS 13 and uses
significant unobservable inputs, such that the fair value was
classified as Level 3 in the fair value hierarchy as defined in
IFRS 13. For Nottingham, the key unobservable inputs are the net
initial yields, construction costs, rental income rates and expiry
void periods. The principal sensitivity of measurement to
variations in the significant unobservable outputs is that
decreases in net initial yields, construction costs and void
periods and higher rental income rates will increase the fair value
whereas increases in net initial yields, construction costs and
void periods and lower rental income rates would decrease the fair
value.
The historical cost of the Group's investment properties under
construction as at 31 March 2022 was GBP51,392,000 (31 March 2021:
GBP26,882,000; 30 September 2021: GBP36,168,000).
11. Fixtures, fittings and equipment
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
At the start of the period - - -
Additions 182 - -
At the end of the period 182 - -
During the six-month period to 31 March 2022 the Group acquired
some of the furniture and equipment that will be required to
operate the restaurant, beverage and events businesses, planned for
opening in the summer of 2022, at The Island Quarter site.
The cost of these assets will be depreciated over their useful
economic lives from the date they become available for use.
12. Development and trading properties
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
At the start of the period 20,192 19,952 19,952
Additions 506 513 1,510
Disposals (3,570) (595) (595)
Development costs written off (202) (367) (675)
At the end of the period 16,926 19,503 20,192
Development and trading properties are reported in the balance
sheet at the lower of cost and net realisable value. The net
realisable value of properties held for development requires an
assessment of the underlying assets using property appraisal
techniques and other valuation methods. Such estimates are
inherently subjective as they are made on assumptions which may not
prove to be accurate and which can only be determined in a sales
transaction.
The Group completed the sale of its property at Selly Oak in
December 2021.
13. Trade and other receivables
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
Trade receivables 162 87 127
Other receivables 887 293 1,229
Prepayments and accrued income 209 1,073 1,305
1,258 1,453 2,661
Trade and other receivables are measured on initial recognition
at fair value, and are subsequently measured at amortised cost
using the effective interest rate method, less any impairment.
Impairment is calculated using an expected credit loss model.
14. Trade and other payables
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
Social security and payroll taxes 54 56 55
Trade payables 692 685 2,300
Accruals and deferred income 158 254 1,012
904 995 3,367
Trade and other payables are recognised initially at fair value,
and are subsequently measured at amortised cost using the effective
interest rate method.
15. Provision for liabilities and charges
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
At the start of the period 5,614 - -
Paid in the period (2,807) - -
Movement in provision in the period (506) - 5,614
At the end of the period 2,301 - 5,614
As at 30 September 2021, the Group was party to a services
agreement and introduction fee agreement in connection with its
investment property at Nottingham. The fee payable, under the terms
of each agreement, in connection with introductory and other
services, was to be calculated on the earlier of the date of sale
of the property or 22 December 2021 with settlement to follow,
subject to agreement between each party, 31 business days after the
fee calculation has been finalised. In January 2022, the
introductory fee, calculated at GBP2.807 million, was paid and the
longstop date for the services agreement calculation extended until
22 December 2023. The provisions at 31 March 2022 and 30 September
2021 have been calculated by reference to the value of the property
at each balance sheet date after allowing for a priority return and
applicable costs.
16. Share capital
Number of shares: Six months Year ended
ended
31 Mar 31 Mar 30 Sept
2022 2021 2021
At the start of the period 52,499,590 53,591,590 53,591,590
Placing of own shares 7,138,998 - -
Cancellation of treasury shares - - (1,092,000)
At the end of the period 59,638,588 53,591,590 52,499,590
Nominal value of Ordinary shares of 5p Six months Year ended
each: ended
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
At the start of the period 2,625 2,680 2,680
Placing of own shares 357 - -
Cancellation of treasury shares - - (55)
At the end of the period 2,982 2,680 2,625
At the Company's Annual General Meeting held on 20 December
2021, resolutions were passed to enable the Company to complete the
placing of 7,138,998 Ordinary shares of 5p each at a placing price
of 150p per share. The premium received from each placing share
over their 5p nominal value, net of fees paid in connection with
the placing, resulted in GBP10.16 million credit to the Company's
share premium account.
At a General Meeting of the Company on 28 March 2022 a further
resolution was passed to enable the cancellation of the share
premium account, subject to approval of the Court, such that the
amount cancelled can be credited to a distributable reserve. On 22
April 2022, an application was submitted to the Court to request
the cancellation which is expected to be considered in late May
2022.
17. Net assets per share
Net assets per share is calculated as the net assets of the
Group divided by the number of shares in issue. There are no
diluting or adjusting amounts for the reported periods.
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
Net assets 126,583 86,658 114,141
No. No. No.
Shares in issue 59,638,588 53,591,590 52,499,590
Net assets per share 212.25p 163.97p 217.41p
18. Key management compensation
Key management personnel have the authority and responsibility
for planning, directing and controlling the activities of the Group
and are considered to be the Directors of the Company. Amounts paid
in respect of key management compensation were as follows:
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2022 2021 2021
GBP'000 GBP'000 GBP'000
Short term employee benefits 518 430 929
Independent Review Report to The Conygar Investment Company
PLC
Introduction
We have been engaged by The Conygar Investment Company PLC ("the
Company") to review the condensed set of financial statements in
the half-yearly financial report for the six-month period ended 31
March 2022 which comprises the consolidated statement of
comprehensive income, the consolidated statement of changes in
equity, the consolidated balance sheet, the consolidated cash flow
statement and the related notes. We have read the other information
contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of
financial statements.
This report is made solely to the Company in accordance with the
terms of our engagement to assist the Company in meeting the
requirements of the AIM Rules. Our review has been undertaken so
that we might state to the Company those matters we are required to
state to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the AIM Rules.
As disclosed in note 1, the annual financial statements of the
Company are prepared in accordance with UK-adopted International
Accounting Standards. The condensed set of financial statements
included in this half-yearly financial report has been prepared in
accordance with UK-adopted International Accounting Standard 34
"Interim Financial Reporting".
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity". A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six-month period ended
31 March 2022 is not prepared, in all material aspects, in
accordance with UK-adopted International Accounting Standard 34 and
the AIM Rules.
Saffery Champness LLP
Chartered Accountants and Registered Auditors
London
10 May 2022
Notes:
(a) The maintenance and integrity of The Conygar Investment
Company PLC website is the responsibility of the Directors; the
work carried out by the auditors does not involve consideration of
these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the
interim report since it was initially presented on the website.
(b) Legislation in the United Kingdom governing the presentation
and dissemination of financial information may differ from
legislation in other jurisdictions.
The Directors of Conygar accept responsibility for the
information contained in this announcement. To the best of the
knowledge and belief of the Directors of Conygar (who have taken
all reasonable care to ensure that such is the case) the
information contained in this announcement is in accordance with
the facts and does not omit anything likely to affect the import of
such information.
For those individual shareholders that specifically requested to
continue to receive any document issued by the Company in paper
format the arrangements will continue as before whereby the Interim
Report for the period ended 31 March 2022 will be posted to those
shareholders shortly. For all other shareholders, the Interim
Report will be made available, as soon as practically possible, via
the Company's website.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
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END
IR BRGDUUGGDGDC
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