RNS Number:6958D
Standard Life Invs Property Inc Tst
11 September 2007
Standard Life Investment Property Income Trust Limited
Interim Report and Unaudited Financial Statements
For the six months ended 30 June 2007
Objective
To provide shareholders with an attractive level of income together with the
prospect of income and capital growth from investing in a diversified UK
commercial property portfolio.
Financial Summary
+-----------------------------------+---------------+-------------------+------------+
| |30 June 2007 |31 December 2006 |% Change |
+-----------------------------------+---------------+-------------------+------------+
|Price per share |118.8p |125.3p |-5.2% |
+-----------------------------------+---------------+-------------------+------------+
|Value of property portfolio* |#241.3m |#239.4m |0.8% |
+-----------------------------------+---------------+-------------------+------------+
|Gearing** |41.6% |42.0% |n/a |
+-----------------------------------+---------------+-------------------+------------+
|IFRS Net Asset Value per share*** |138.8p |134.4p |3.5% |
+-----------------------------------+---------------+-------------------+------------+
|Published IFRS Net Asset Value per |137.2p |132.7p |3.4% |
|share**** | | | |
+-----------------------------------+---------------+-------------------+------------+
* Valued on an open market basis in accordance with the RICS Appraisal and
Valuation Standards.
** Gearing: (Bank borrowings plus redeemable preference shares less cash)/
(Market value of properties).
*** Calculated under International Financial Reporting Standards. The IFRS Net
Asset Value per share for 31 December 2006 has been re-stated following the
change in accounting policy for deferred tax.
**** Calculated under International Financial Reporting Standards and adjusted
to include an accrued dividend in respect of the last quarter.
Chairman's Statement
"I would like to thank shareholders for their support at the recent AGM in June
2007. As a result the Company's investment remit has been broadened, giving the
Investment Manager greater flexibility to improve total return prospects for new
purchases and the portfolio overall. Following the AGM the Company now also has
the ability to hold shares bought back in treasury.
As anticipated in the last annual report, the slow down in UK commercial
property returns that started in the fourth quarter of last year has continued
in the first half of 2007. The net asset value over the six months ended 30 June
2007 increased by 3.4% and the Company's dividends paid increased by 4% to 3.38p
per share.
The primary objective of the Company is to provide an attractive level of
income. I am pleased to report that in respect of the 6 months ended 30 June
2007, the Company's income return from its property portfolio was 3.0% compared
with an income return for the IPD All Quarterly Funds of 2.4%.
The UK commercial property market as measured by the IPD Monthly Index produced
a total return of 4.4% over the first half of 2007. The office sector continued
to produce the strongest returns delivering 6.9% whilst the industrial and
retail sectors produced returns of 4.2% and 2.9% respectively.
Following the sale of a portfolio of six properties for #41.5m, the Company has
repaid #9.85m of debt under the revolving credit facility, so that the Company's
gearing just after the interim period stood at 30%. The Company intends to
utilise the remaining funds to maximise shareholder returns, and is monitoring
opportunities for further acquitisions.
Along with the new REIT sector and the other offshore property trusts, the
rating of the Company's ordinary shares widened over the six month period with
the discount to net asset value widening from 5.6% at the start of the period to
13.4% at 30 June 2007. The general de-rating of the real estate equity sector
has particularly affected the newly launched REITS as well as the offshore
property companies investing in the UK and follows the rises in interest rates
and lower returns forecast from UK commercial property.
The Investment Manager's forecast is for single digit returns for 2007 and
future returns will increasingly be driven more by rental growth and asset
management as capital growth continues to ease, and in some areas declines. That
said, the Company's property portfolio is well placed to continue to produce
attractive and steady absolute investment returns to its shareholders.
David Moore
Chairman of the Board
11 September 2007
All Enquiries to:
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Ltd
Trafalgar Court
Les Banques
St Peter Port
Guernsey
Tel: 01481 745529
Richard England
Gordon Humphries
Jason Baggaley
Standard Life Investments
Tel: 0131 225 2345
Investment Manager's Report
UK Property Market
Total returns from the UK direct property market continue to moderate towards
levels that are closer to their long term average. Annual returns from IPD's
Monthly Index to the end of June were running at 12.4% p.a. Yield compression
eased over the quarter and capital growth for UK direct property slowed to a
still very respectable 7.1% p.a. from the recent highs in the middle of last
year. Rental growth continues to trends upwards and was 3.9% p.a. to the end of
June.
The economic fundamentals underpinning the commercial property market remain
intact, i.e. robust economic growth, strong financial and business services
output and employment, significant business investment and healthy employment
levels. Similarly, survey data suggests that institutions are intent on
increasing their allocation to commercial property and are yet to reach their
target levels. Despite the strong fundamentals, real estate equities have
underperformed over the period with total returns of -18.7% since the peak in
early January 2007 and heightened volatility in the sector. The increased
volatility looks to be mainly a result of changes in equity investor sentiment.
As a consequence of the recent fiscal tightening, debt backed buyers remain
under pressure and bond yields and 5 year swap rates tightened over the quarter
by 50 basis points and 58 basis points respectively to 5.5% p.a. and 6.2% p.a.
In this environment, debt backed buyers are increasingly retreating from the
market and consequently secondary assets pricing has therefore moved out over
the quarter reflecting this retreat.
Portfolio Valuation
The investment portfolio is valued quarterly by DTZ Debenham Tie Leung. At the
end of June 2007 the portfolio's value was #241.3m. This shows an increase in
value of #1.9m over the reporting period, during which no purchases were made.
The increase in capital value was driven by Central London and in particular the
refurbishment and re-letting of an office in Clerkenwell. The constant inward
yield shift across all sectors seen in 2005 and 2006 has come to an end, and
capital values remained broadly static in the first half of 2007.
The primary aim of the Trust remains to provide an attractive level of income,
and the investments in the portfolio have been selected for their income
characteristics foremost. The portfolio has an average unexpired lease term of
8.9 years as at the end of June 2007, and for the 12 months to 30 June provided
an income return of 6.3% (compared to the IPD universe income return of 4.5%).
Investment Activity
Since its launch in December 2003, the Company has achieved its aim of being
fully invested in a diversified portfolio providing a high income return. The
portfolio now consists of 34 properties with over 100 tenants spread across the
UK.
In 2007 the focus has changed slightly, with a desire to reduce gearing and
ensure capital protection as the UK commercial property market moves through a
cycle to one of lower total returns. During the second half of the period we
exchanged on the sale of a portfolio of six properties for #41.5m. The sale
completed in early July, just after the reporting period. Funds from the sale
are being used to reduce borrowing (#9.85m of debt will be repaid under the
revolving credit facility with no penalty) and we intend to invest the remaining
monies into good quality investments that have strong reversionary potential and
offer an attractive income return.
Asset Management
The property portfolio has continued to have very low voids as we seek to
maximise the income. As at the end of June the void level stood at just under 1%
of the portfolio's Estimated Rental Value following lettings at the Courtyards,
St Albans and 7 Back Hill, London. The letting of 7 Back Hill in particular was
beneficial to the Company as it followed a surrender from the old tenant and
refurbishment of the accommodation at a time of strong tenant demand. We had
expected a 12 month void following refurbishment and a new rent of #27.50 per sq
ft, however the property was let on completion of the works at #35 per sq ft
with only 6 months incentive.
Following the purchase of a multi-let industrial estate in Aberdeen in December
2006 we have refurbished 2 vacant units (which are subject to a rent guarantee
from the vendor) and have extended the lease on 3 units with terms agreed on the
renewal of 3 other leases, all above ERV.
Gearing
The gearing level at 30 June 2007 stood at 41.6% of the market value of
investment properties.
Investment Outlook
We anticipate total returns from commercial property will continue to moderate
further in the short term particularly as fiscal tightening increases. In this
environment, our expectation is that the office sector will continue to provide
investors with the vest returns. Investors will focus on good quality assets
where rental income can be maximised. We forecast that returns will be single
digit this year and will increasingly be driven more by rental growth as capital
growth continues to ease. In an increasingly challenging retail environment
going forward, fundamentally strong centres with asset management opportunities,
particularly the better prime and super prime assets will continue to maintain
their current pricing. Shopping centre vacancy rates continue to compare very
favourably with other sectors. We anticipate that prime and super prime will
continue to outperform secondary assets as investors continue to embark on a
"flight to quality" as returns from UK direct property continue to ease."
Property Investments as at 30 June 2007
+--------------------------------------+------------------+---------------+
|Name (Sector) |Town | Capital Value |
| | | (#) |
+--------------------------------------+------------------+---------------+
|Wellington House (Standard Office) |London |20-22m |
+--------------------------------------+------------------+---------------+
|Clough Road (Retail Warehouse) |Hull |16-18m |
+--------------------------------------+------------------+---------------+
|Hollywood Green (Leisure) |London |16-18m |
+--------------------------------------+------------------+---------------+
|Whitebear Yard (Standard Office) |London |10-12m |
+--------------------------------------+------------------+---------------+
|2-4 Bucknall Street (Standard Office) |London |10-12m |
+--------------------------------------+------------------+---------------+
|Drakes Way (Standard Industrial) |Swindon |8-10m |
+--------------------------------------+------------------+---------------+
|Solution Hall (Standard Office) |Welwyn Garden City|8-10m |
+--------------------------------------+------------------+---------------+
|Wellesley House (Standard Office) |Harlow |8-10m |
+--------------------------------------+------------------+---------------+
|The Axys (Office Park) |Nantgarw |8-10m |
+--------------------------------------+------------------+---------------+
|Chancellors Place (Standard Office) |Chelmsford |8-10m |
+--------------------------------------+------------------+---------------+
|Century Plaza (High Street Retail) |Edgware |8-10m |
+--------------------------------------+------------------+---------------+
|Ocean Trade Centre (Industrial Park) |Aberdeen |8-10m |
+--------------------------------------+------------------+---------------+
|Bathgate Retail Park (Retail |Bathgate |8-10m |
|Warehouses) | | |
+--------------------------------------+------------------+---------------+
|Interfleet House (Office Park) |Derby |6-8m |
+--------------------------------------+------------------+---------------+
|Foxhills Industrial Park (Distribution|Scunthorpe |6-8m |
|Warehouse) | | |
+--------------------------------------+------------------+---------------+
|The Courtyard (Office Park) |St Albans |4-6m |
+--------------------------------------+------------------+---------------+
|Farah Unit, Crittal Road (Standard |Witham |4-6m |
|Industrial) | | |
+--------------------------------------+------------------+---------------+
|Phase II, Telelink (Office Park) |Swansea |4-6m |
+--------------------------------------+------------------+---------------+
|Pity Hey Place (Distribution |Skelmersdale |4-6m |
|Warehouse) | | |
+--------------------------------------+------------------+---------------+
|Turin Court (Standard Office) |Manchester |4-6m |
+--------------------------------------+------------------+---------------+
|Windsor Court & Crown Farm (Standard |Mansfield |4-6m |
|Industrial) | | |
+--------------------------------------+------------------+---------------+
|Esporta (Leisure) |Chislehurst |4-6m |
+--------------------------------------+------------------+---------------+
|Viscount Way (Office Park) |Swindon |4-6m |
+--------------------------------------+------------------+---------------+
|31/32 Queen Square (Standard Office) |Bristol |4-6m |
+--------------------------------------+------------------+---------------+
|De Ville Court (Standard Office) |Weybridge |4-6m |
+--------------------------------------+------------------+---------------+
|Coal Road (Standard Industrial) |Leeds |4-6m |
+--------------------------------------+------------------+---------------+
|Wardley Industrial Estate (Retail |Manchester |2-4m |
|Warehouses) | | |
+--------------------------------------+------------------+---------------+
|Halfords (Retail Warehouses) |Paisley |2-4m |
+--------------------------------------+------------------+---------------+
|Gemini Court (Distribution Warehouse) |Port Talbot |2-4m |
+--------------------------------------+------------------+---------------+
|Eurolink Normanton (Industrial Park) |Leeds |2-4m |
+--------------------------------------+------------------+---------------+
|Easter Park (Distribution Warehouse) |Bolton |2-4m |
+--------------------------------------+------------------+---------------+
|Lister House (Standard Office) |Leeds |2-4m |
+--------------------------------------+------------------+---------------+
|Unit 14 Interlink Park (Distribution |Bardon |2-4m |
|Warehouse) | | |
+--------------------------------------+------------------+---------------+
|Portrack Lane (Distribution Warehouse)|Stockton on Tees |1-2m |
+--------------------------------------+------------------+---------------+
Standard Life Investments Property Income Trust Limited
Unaudited Consolidated Income Statement for the period ended 30 June 2007
Restated
01-Jan-07 01-Jan-06
to to
30-Jun-07 30-Jun-06
Note # #
Income
Unrealised gain arising on adjustment to fair 1,772,856 11,048,950
value of investment properties
Rental income 7,635,900 7,125,791
Total income and fair value gains 9,408,756 18,174,741
Expenditure
Investment management fees 3 (1,023,772) (917,033)
Head lease (142,484) (140,346)
payments
Valuation fees (42,500) (39,681)
Other direct property costs (188,889) (129,382)
Directors' fees and (41,992) (41,166)
subsistence
Other administration (149,870) (115,880)
expenses
(1,589,507) (1,383,488)
Operating profit 7,819,249 16,791,253
Finance costs - net
Interest payable (2,964,522) (2,601,463)
Interest 80,932 210,415
receivable
(2,883,589) (2,391,047)
Profit for the period before 4,935,660 14,400,206
tax
Taxation 4 - -
Profit for the 4,935,660 14,400,206
period
Earnings per share for the period
attributable to the equity holders of
the company
Basic and diluted 4.75 pence 14.4 pence
(restated)
All items in the above income statement derive from continuing operations
Standard Life Investments Property Income Trust Limited
Unaudited Consolidated Balance Sheet as at 30 June 2007
Restated
30-Jun-07 31-Dec-06
Note # #
ASSETS
Non-current assets
Freehold investment 5 204,265,662 195,915,863
properties
Leasehold investment 5 41,110,750 47,984,258
properties
Interest rate swap 3,715,809 501,862
249,092,221 244,401,983
Current assets
Trade and other 2,935,396 3,734,872
receivables
Cash and cash equivalents 5,082,435 5,214,503
8,017,831 8,949,375
Total assets 257,110,052 253,351,358
EQUITY
Equity capital and reserves attributable
to company's equity holders
Share capital 1,040,000 1,040,000
Share premium 5,217,022 5,217,022
Retained earnings 6 2,611,320 2,748,875
Capital reserves 40,948,582 35,961,779
Other distributable 94,586,418 94,801,259
reserves
Total equity 144,403,342 139,768,935
Liabilities
Non-current liabilities
Bank borrowings 84,432,692 84,432,692
Redeemable preference 7,376,206 7,161,365
shares
Leasehold obligations 4,077,302 4,544,339
95,886,200 96,138,396
Current liabilities
Trade and other payables 6,687,062 7,310,579
Bank borrowings 9,850,000 9,850,000
Leasehold obligations 283,448 283,448
16,820,510 17,444,027
Total liabilities 112,706,710 113,582,423
Total equity and 257,110,052 253,351,358
liabilities
Approved by the board of directors on 11
September 2007
John Hallam David Moore
Director Director
Standard Life Investments Property Income Trust Limited
Unaudited Consolidated Statement of Changes in Equity for the period ended 30
June 2006
Share Share Retained Capital Other Total
capital premium earnings reserves distributable equity
reserves
Note # # # # #
Opening balance 1 1,000,000 - (2,334,373) 19,734,918 95,206,619 113,607,164
January 2006
Movement on revaluation
of interest rate swap - - - 2,841,598 - 2,841,598
Profit for the period - - 11,974,950 - - 11,974,950
Transfer between - - 202,680 - (202,680) -
reserves *
Unrealised gain on
adjustment to
fair value of - - (11,048,950) 11,048,950 - -
investment properties
Dividends - - (3,250,000) - - (3,250,000)
Balance at 30 June 2006
as previously reported 1,000,000 - (4,455,693) 33,625,466 95,003,939 125,173,712
Prior year adjustment :
Taxation - - 6,871,553 - - 6,871,553
Balance at 30 June 2006 as 1,000,000 - 2,415,860 33,625,466 95,003,939 32,045,265
restated
Standard Life Investments Property Income Trust Limited
Unaudited Consolidated Statement of Changes in Equity for the period ended 30
June 2007
Share Share Retained Capital Other Total
capital premium earnings reserves distributable equity
reserves
Note # # # # #
Opening balance 1 1,040,000 5,217,022 (4,146,647) 35,961,779 94,801,259 132,873,413
January 2007 as
previously reported
Prior year adjustment:
Taxation - - 6,895,522 - - 6,895,522
Opening balance 1 1,040,000 5,217,022 2,748,875 35,961,779 94,801,259 139,768,935
January 2007 as restated
Movement on revaluation
of interest rate - - - 3,213,947 - 3,213,947
swap
Profit for the - - 4,935,660 - - 4,935,660
period
Transfer between - - 214,841 - (214,841) -
reserves *
Unrealised gain on
adjustment to
fair value of 5 - - (1,772,856) 1,772,856 - -
investment properties
Dividends 7 - - (3,515,200) - - (3,515,200)
Balance at 30 June 1,040,000 5,217,022 2,611,320 40,948,582 94,586,418 144,403,342
2007
* this is a transfer to move preference share finance costs from the retained
earnings reserve to the other distributable reserves.
Standard Life Investments Property Income Trust Limited
Unaudited Consolidated Cash Flow Statement
for the period ended 30 June 2007
01-Jan-07 01-Jan-06
to to
30-Jun-07 30-Jun-06
Note # #
Cash flows from operating activities
Cash generated from operations 8 6,222,353 5,648,465
Interest paid (2,749,681) (2,398,783)
Net cash generated from operating 3,472,672 3,249,682
activities
Cash flows from investing activities
Capital expenditure 5 (170,472) (4,715,920)
Interest received 80,932 210,415
Net cash used in investing activities (89,540) (4,505,505)
Cash flows from financing activities
Dividends paid 7 (3,515,200) (3,250,000)
Net decrease in cash and cash (132,068) (4,505,823)
equivalents in the period
Cash and cash equivalents at beginning 5,214,503 13,711,633
of period
Cash and cash equivalents at end of 5,082,435 9,205,810
period
Standard Life Investments Property Income Trust Limited
Notes to the Consolidated Financial Statements for the period ended 30 June 2007
1. GENERAL INFORMATION
Standard Life Investments Property Income Trust Limited ("the Company") and its
subsidiaries (together the "Group") carry on the business of property investment
through a portfolio of freehold and leasehold investment properties located in
the United Kingdom. The Company is a limited liability company incorporated and
domiciled in Guernsey, Channel Islands. The Company has its primary listing on
the Channel Islands Stock Exchange with a secondary listing on the London Stock
Exchange. These unaudited consolidated financial statements have been approved
for issue by the Board of Directors on 11 September 2007.
The address of the registered office is Trafalgar Court, Les Banques, St Peter
Port, Guernsey. The audited consolidated financial statements of the Company for
the year ending 31 December 2006 are available on request from this registered
address.
2. ACCOUNTING POLICIES
Basis of preparation
The unaudited consolidated financial statements of the Group have been prepared
in accordance with IAS 34 on Interim Financial Reporting, and all applicable
requirements of Guernsey Company Law. They do not contain all the information
required for full annual statements and should be read in conjunction with the
audited consolidated financial statements of the Company for the year ending 31
December 2006. Except as noted below, the same accounting policies and methods
of computation are followed in these interim financial statements as compared
with the audited consolidated financial statements prepared for the year ending
31 December 2006.
Implementation of IFRS 7
International Financial Reporting Standard (''IFRS'') 7, Financial Instruments:
Disclosures, and the complementary Amendment to IAS 1, Presentation of Financial
Statements - Capital Disclosures, will be adopted in the full audited year end
financial statements. IFRS 7 introduces new disclosures to improve the
information about financial instruments. It requires the disclosure of
qualitative and quantitative information about exposure to risks from financial
instruments including specified minimum disclosure about credit risk, liquidity
risk and market risk including sensitivity to market risk. The amendment to IAS
1 introduced disclosures about the level of an entity's capital and how it
manages capital. This standard does not have any impact on the classification
and valuation of the Group's financial instruments.
Standards and interpretations not yet effective
The following standards and interpretations have been evaluated and have been
assessed as not being relevant or not having a significant effect on the Group.
- IAS 23 Capitalisation of borrowing costs
- IFRS 8 Operating Segments
- IFRIC 7 - 12
Deferred Tax
The audited consolidated financial statements for the year ending 31 December
2006 provided for deferred income tax in full, using the liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. The estimate of deferred
taxation assumed that all of the temporary difference was recoverable through
use of the asset which was considered an appropriate accounting policy at the
time of preparing the financial statements.
In light of the evolving interpretation of IAS 12 it is now considered more
appropriate to apply a 'blended' approach when estimating the amount of deferred
income tax arising from the temporary difference between the tax bases of the
assets and liabilities and their carrying amounts in the financial statements.
This blended approach involves assessing the expected manner of recovery of this
temporary difference. The depreciable amount of the temporary difference is
treated as recoverable through use of the asset and the residual value element
of the temporary difference is treated as recoverable through disposal of the
asset. Recovery through use of the asset implies the appropriate tax rate is the
income tax rate applicable to the Group's schedule A business whereas recovery
through disposal of the asset implies the appropriate tax rate is the capital
gains tax rate applicable to the Group. This approach is considered to provide a
better estimate of the Group's deferred tax position.
Deferred income tax is determined using tax rates (and laws) that have been
enacted or substantially enacted by the balance sheet date and are expected to
apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
3 RELATED PARTY DISCLOSURES
Parties are considered to be related if one party has the ability to control the
other party or exercise significant influence over the other party in making
financial or operational decisions.
Redeemable preference shares
On 29 December 2003 the Company issued 6,000,000 25p redeemable zero dividend
preference shares for #6,000,000 to The Standard Life Assurance Company. On 10
July 2006 these shares were transferred to Standard Life Assurance Limited.
These shares have a nominal value of #1,500,000 and are redeemable by the
Company at a price of #1.7908. These shares do not carry any voting rights.
Ordinary share capital
Standard Life Investment Funds Limited has held 21,769,609 of the issued
ordinary shares throughout the period on behalf of its Unit Linked Property
Funds (December 2006: 21,769,609). This equates to 20.9% (December 2006: 20.9%)
of the ordinary share capital, however, Standard Life Investment Funds Limited
is not considered to exercise control of the Group. Those parties related to the
Investment Manager waived their rights to commission on the initial purchase of
these shares in order to maintain the fairness of the transaction to all
parties.
Cash held on deposit with related parties
As at 30 June 2007, #634,439 (December 2006: #617,974) was held on deposit with
Standard Life Investments Global Liquidity Funds plc. This deposit was invested
in AAA bonds and an interest accrued on this deposit daily. The interest earned
on this deposit during the period was #16,465 (period ended June 2006: #128,047)
representing an average rate of 5.3% (period ended June 2006: 4.5%).
Standard Life plc is the ultimate controlling party of the Investment Manager,
Standard Life Investments (Corporate Funds) Limited. Standard Life Investments
Global Liquidity Funds plc is an entity that is also managed within the Standard
Life plc group.
Directors
The Directors each hold the following number of Ordinary Shares in the Company:
30 Jun 07 31 Dec 06
David Moore 15,000 15,000
Richard Barfield 15,000 15,000
John Hallam 15,000 15,000
Shelagh Mason 15,000 15,000
Paul Orchard-Lisle 25,000 25,000
No Director has any interest in any transactions which are or were unusual in
their nature or conditions or significant to the business of the Group and which
were effected by any member of the Group since its date of incorporation. Total
fees relating to the directors in the period under review were #41,992 (period
ended 30 June 2006: #41,166), being #40,000 (period ended 30 June 2006: #40,000)
in respect of emoluments and #1,992 (period ended 30 June 2006: #1,166) in
respect of subsistence.
Investment Manager
On 19 December 2003 Standard Life Investments (Corporate Funds) Limited ("the
Investment Manager") was appointed as investment manager to manage the property
assets of the Group. Under the terms of the Investment Management Agreement the
Investment Manager is entitled to receive a fee at the annual rate of 0.85% of
the total assets (less any amounts drawn down under the facility agreement but
not yet invested in property assets), payable quarterly in arrears. Total fees
charged for the period ended 30 June 2007 amounted to #1,023,772 (period ended
30 June 2006: #917,033). The amount due and payable at period end amounted to
#512,816 (period ended 30 June 2006: #463,388).
4 TAXATION
Deferred tax
30-Jun-07 30-Jun-06
# #
Unrealised gain to be recovered through 2,122,156 1,616,520
use of asset
Utilised Schedule A loss (2,122,156) (1,616,520)
Taxable unrealised gain after utilised - -
schedule A losses
At the balance sheet date provision has been made for deferred income on all
temporary differences between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes, in accordance with the
accounting policy detailed above at note 2.
5 FREEHOLD AND LEASEHOLD INVESTMENT PROPERTIES
30-Jun-07 30-Jun-07 30-Jun-07
Freehold Leasehold Total
# # #
Market value as at 31 196,165,000 43,190,000 239,355,000
December 2006
Capital expenditure 170,472 - 170,472
Unrealised gain / loss arising on 2,077,078 (304,222) 1,772,856
adjustment to fair value of investment
properties
Movement in adjustment for 22,449 4,223 26,672
lease incentives
Market value at 30 June 2007 198,434,999 42,890,001 241,325,000
Adjustment for lease (22,449) (4,223) (309,338)
incentives
Discounted present value of minimum - 4,360,750 4,360,750
lease payments
Fair value at 30 June 2007 198,412,550 47,246,528 245,376,412
31-Dec-06 31-Dec-06 31-Dec-06
Freehold Leasehold Total
# # #
Market value as at 31 168,285,000 34,020,000 202,305,000
December 2005
Capital expenditure 18,152,720 6,004,293 24,157,013
Unrealised gain arising on adjustment to 9,568,910 3,132,178 12,701,088
fair value of investment properties
Movement in lease incentive 158,370 33,529 191,899
debtor
Market value at 31 December 196,165,000 43,190,000 239,355,000
2006
Adjustment for lease (249,137) (33,529) (282,666)
incentives
Discounted present value of minimum - 4,827,787 4,827,787
lease payments
Fair value at 31 December 195,915,863 47,984,258 243,900,121
2006
Investment properties were revalued at the period end by DTZ Debenham Tie Leung
Limited, Chartered Surveyors on the basis of the market value for existing use.
The market values of leasehold investment properties have been adjusted to
reflect the discounted present value of minimum lease payments to reflect their
fair value in accordance with IFRS. The market value for existing use provided
by DTZ Debenham Tie Leung Limited at the period end was #241,325,000 (December
2006: #239,355,000).
6 RETAINED EARNINGS
30-Jun-07 31-Dec-06
# #
Opening balance as at 1 January as (4,146,647) (2,334,373)
previously reported
Prior period adjustment in relation to 6,895,522 4,446,297
deferred taxation
Opening balance as at 1 January as 2,748,875 2,111,924
restated
Profit for the period / year 4,935,660 19,630,279
Transfer between reserves 214,841 405,360
Unrealised gain arising on adjustment to
fair value of
investment properties transferred to (1,772,856) (12,701,088)
capital reserve
Realised gain on disposal of investment property - -
transferred to capital reserve
Dividends paid (3,515,200) (6,697,600)
Closing balance 2,611,320 2,748,875
This is a distributable
reserve.
7 DIVIDENDS
The interim dividends paid to date in 2007 are as follows (period ended 30 June
2006: #3,250,000):
#1,757,600 (1.69p per ordinary share) paid in February relating to the quarter
ending 31 December 2006
#1,757,600 (1.69p per ordinary share) paid in May relating to the quarter ending
31 March 2007
#3,515,200
A further interim dividend of 1.690p per share in respect of the quarter to 30
June 2007was approved in August 2007. These consolidated financial statements do
not reflect this dividend, however, the published net asset value does.
8 CASH GENERATED FROM OPERATIONS
01-Jan-07 01-Jan-06 to
to
30-Jun-07 30-Jun-06
# #
Profit for the period 4,935,660 14,400,206
Movement in debtors 799,476 (131,264)
Movement in creditors (623,517) 37,425
Interest payable 2,964,522 2,601,463
Interest receivable (80,932) (210,415)
Unrealised gain arising on adjustment to fair value (1,772,856) (11,048,950)
of investment properties
Movement in deferred tax - 2,425,256
provision
Cash generated from 6,222,353 8,073,721
operations
9 SEGMENTAL REPORTING
The group is organised into four main business segments determined in accordance
with the type of investment property:
Retail - Mainly shops and retail warehouse parks
Office - Mainly in large cities
Industrial - distribution warehouses and industrial units
Other - Leisure centres and Cinema complex's
Segmental analysis by business segment
01-Jan-07 to 30-Jun-07
Retail Office Industrial Other Total
# # # # #
Rental income 1,190,855 3,796,710 1,956,511 691,824 7,635,900
Unrealised gain arising on
adjustment
to fair value of investment 1,050,000 1,186,080 (483,224) 20,000 1,772,856
properties
Property related (53,906) (283,330) (34,137) (2,500) (373,873)
expenditure
Segment result 2,186,949 4,699,460 1,439,150 709,324 9,034,883
Non-property related (1,215,634)
expenditure
Operating profit 7,819,249
Finance costs - net (2,883,589)
Profit for the year before 4,935,660
taxation
There were no transactions between the business segments.
Property related expenditure relates to head lease payments, valuation fees and
other direct property costs.
01 Jan 06 to 30 Jun 06
Retail Office Industrial Other Total
# # # # #
Rental income 2,105,489 2,225,013 2,145,877 649,412 7,125,791
Unrealised gain arising on
adjustment
to fair value of investment 1,940,000 6,191,242 2,137,708 780,000 11,048,950
properties
Property related (27,399) (216,255) (54,796) (10,959) (309,409)
expenditure
Segment result 4,018,090 8,200,000 4,228,789 1,418,453 17,865,332
Non-property related (1,074,079)
expenditure
Operating profit 16,791,253
Finance costs - net (2,391,047)
Profit for the period 14,400,206
before taxation
There were no transactions between the business segments.
Property related expenditure relates to head lease payments, valuation fees and
other direct property costs.
10 EVENTS AFTER THE BALANCE SHEET DATE
A portfolio sale of six properties was completed on 30 July 2007. The sale value
of the properties was #41,500,000 which is equal to the value at which these
properties were included in the 30 June 2007 independent valuation referred to
at note 5 above. The properties sold were:
Wellesley House, Harlow
Solution Hall, Welwyn Garden City
The Axys, Nantgarw
The Courtyard, St Albans
Viscount Way, Swindon
Gemini Court, Port Talbot
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DFLFFDKBLBBE
Abrdn Property Income (LSE:API)
Historical Stock Chart
From Jun 2024 to Jul 2024
Abrdn Property Income (LSE:API)
Historical Stock Chart
From Jul 2023 to Jul 2024
