TIDMBA59
RNS Number : 2561C
Capital Shopping Centres PLC
27 April 2012
27 April 2012
Capital Shopping Centres PLC ("the company")
ANNUAL FINANCIAL REPORT
Capital Shopping Centres PLC has today published its Annual
Report for the year ended 31 December 2011 ("Annual Report"). The
Annual Report will shortly be available for download at
www.capital-shopping-centres.co.uk.
In accordance with DTR 6.3.5, the following information is
extracted from the company's Annual Report and in unedited full
text.
Management Report
Principal Activities
The Capital Shopping Centres PLC group ("the Group") specialises
in the ownership, management and development of prime UK regional
shopping centres.
The Group's assets comprise four major out-of-town centres being
- Lakeside, Thurrock; Metrocentre, Gateshead; Braehead, Glasgow and
The Mall at Cribbs Causeway, Bristol - and seven in-town centres
including centres in prime destinations such as Cardiff,
Manchester, Norwich and Nottingham. During the year the Potteries
shopping centre was sold to another Capital Shopping Centres Group
PLC company and in November 2011, Broadmarsh shopping centre in
Nottingham was acquired bringing the portfolio to 12 shopping
centres.
With a dedicated and skilled management team, the Group aims to
be the landlord of choice for retailers and to provide compelling
destinations for shoppers. The Group is a responsible and
environmentally conscious participant in the communities where it
invests. The Group focuses on the creation of long term and
sustainable growth in net rental income with a view to generating
superior returns for its parent company.
Review Of Business And Future Developments
The Group's results and financial position for the year ended 31
December 2011 are set out in full in the consolidated income
statement, the consolidated statement of comprehensive income, the
Group and Company balance sheets, the Group and Company statements
of changes in equity, the Group and Company statements of cash
flows and the related notes. The Group's profit before taxation was
GBP52.3 million (2010 GBP474.0 million) with the reduction from
2010 being due to a lower property revaluation gain in 2011. The
Group's net assets attributable to equity shareholders increased
from GBP1,028.1 million to GBP1,080.4 million. Net external debt
increased by GBP66.8 million to GBP2,514.0 million at 31 December
2011.
Prospects And Priorities
The Group's base case assumption is that the UK economy will
continue to experience low growth for some time, with continuing
risk of tenant failures and closures on expiry of leases.
The Group's specialist skills and relationships enable it to
mange those risks while identifying and developing those shopping
centres which have the most potential to produce attractive returns
over the medium to long term.
The Group considers that it is well positioned to create value
as the market recovers.
The Group's strategic priorities for 2012 are:
-- to optimise the performance of its existing assets, prioritising medium-term value creation
-- to identify further initiatives and create the financing
flexibility to advance its business and deliver incremental
returns
Market Review
The Group's focus is the top 50 million sq. ft. of UK shopping
centre locations, less than 5 per cent of the UK's 1.4 billion sq.
ft. of retail space of which it owns 26 per cent by area. Such
centres are and will remain rare and change hands infrequently.
Shopping centres in total represent only around 14 per cent of the
UK's 1.4 billion sq. ft. of retail space, the top 50 centres
representing less than 5 per cent. The highly regulated planning
environment combined with the recent challenging economic
environment for financing of new centres has contributed to a
limited development pipeline.
The Group's centres can offer retailers flagship stores in top
locations. Such stores are increasingly becoming a crucial
marketing tool for the retailer's brand. The development of other
retail channels such as online shopping reinforce the concentration
of physical comparison retailing into the destinations, such as the
Group's, most attractive to the shopper for retail and broader
entertainment. Online sales comprise only a small but growing
proportion of total retail spend. The most successful retailers now
have an integrated approach to online and in-store sales, with
strong evidence of high levels of interaction between the two. This
is highlighted by the popularity of "click and collect" and "return
to store" facilities, both of which reinforce the need for a
physical store and produce incremental sales.
Successful retailers are seeking out the most cost effective
access to their customers, be that through online or physical
footfall, with the best located stores and integration of online
and physical space.
Investment Property Valuations
As income yields appeared attractive relative to risk free
investment returns, the UK property market has in 2011 seen good
demand for prime assets and vendors reluctant to sell other than at
robust levels. As a result, yields for prime assets such as CSC's
have remained stable to slightly tightening.
By comparison secondary retail property, a category in which
none of CSC's regional shopping centres would be classified, has
had more variable pricing. Yields have increased during 2011 as
purchasers allowed for their expectation of falling rents (see
Market review), as the pool of potential lenders reduced by well
publicised withdrawals from UK real estate lending and with the
unresolved overhang of defaulted property in the hands of
lenders.
The valuation outcome for the Group's assets for the year was
positive, rising by 0.7 per cent for the full year. This is
marginally ahead of the IPD UK monthly retail capital growth index
which produced an increase of 0.6 per cent for the year.
Net Rental Income
The Group's net rental income which increased by 1.9 per cent to
GBP268.4 million in the year Like-for-like net rental income for
2011 is 3.7 per cent above that of 2010.
Occupancy
Occupancy remains high at 97.0 per cent (31 December 2010 97.4
per cent).
Footfall
Estimated footfall across the Group's 11 centres was over 244
million in the year, up 2 per cent in the year.
Major Centres
Lakeside, Thurrock, (market value GBP1,081 million) Successful
new openings in the autumn include the 25,000 sq. ft. new concept
Topshop/Topman flagship store to be followed in late 2012 by
Forever 21's fourth UK store. A planning application was submitted
in December for a 325,000 sq. ft. extension including a new
department store, 30 to 40 new shops and restaurants and a new
transport hub. Discussions are progressing with major
retailers.
Metrocentre, Gateshead, (market value GBP864 million). A 15,000
sq. ft. terrace of restaurants, "MetrOasis", is now pre-let to 3
catering operators with the final unit in solicitors hands.
Construction started last month and the development is expected to
open in the autumn. This will further strengthen the ambience of
the retail park and improve the connections between the main centre
and the retail park.
Braehead, Glasgow, (market value GBP583 million) With Apple and
Hollister plus a new restaurant cluster open and trading well,
plans have been drawn up to improve impact and sight lines on the
upper mall by increasing the height of shop fronts and moving
escalators. We continue to work with the local authority on a
master plan for the mix of uses in the broader Braehead area and,
as part of these plans, have acquired an adjacent 31 acre site,
currently a working dock, with future development potential.
Nottingham (Victoria Centre market value GBP333 million,
Broadmarsh market value GBP65 million): Nottingham ranks sixth in
the UK in terms of available comparison shopping expenditure but
has suffered relative to other cities from a lack of modernisation
of its shopping centre provision. Following the acquisition of
Broadmarsh in the last quarter of 2011, we are optimistic about the
city's potential assuming a pragmatic approach by the local
authority. We aim to bring forward proposals for complementary
development to upgrade both centres and the city centre
overall.
Bromley (The Glades market value GBP174 million): we are in the
process of obtaining planning consent for a terrace of five
restaurants overlooking the adjacent gardens. We received 10 offers
from catering operators for the five units and have comfortably
exceeded the target rent for the project.
Cash Flow
The Group cash flow shows a total outflow of GBP53.0 million in
2011, reflecting the acquisition of The Broadmarsh Shopping Centre,
Nottingham for GBP72.8m
Financial Position
The Group's debt is largely arranged on an asset-specific basis,
with limited or non-recourse from the borrowing entities to other
Group companies. This structure permits the Group a high degree of
financial flexibility in dealing with debt issues and importantly
avoids the concentration of covenant and refinancing risk
associated with a single group-wide borrowing.
Net external debt, which excludes the Metrocentre compound
financial instrument of GBP146.6 million, increased from GBP2,447.2
million at 31 December 2010 to GBP2,514.0 million at 31 December
2011. The Group had cash of GBP34.4 million at 31 December 2011
(2010 GBP87.4 million).
Financial Covenants
Financial covenants apply to GBP2.5 billion of secured
asset-specific debt. The two main covenants are Loan to Value (LTV)
and Interest Cover (IC). The actual requirements vary and are
specific to each loan. The Group is in compliance with all of its
corporate and asset-specific loan covenants.
Key Performance Indicators
The performance of the business is monitored through a number of
Key Performance Indicators (KPI's) including both financial and
non-financial measures. The main KPI's used by the Board to monitor
the business are like-for-like net rental income, occupancy and
prime property asset performance. These KPI's can be found in this
Directors' Report containing details of our portfolio and
operational performance and additionally in the notes to these
financial statements, in particular, note 22.
Key Risks and Uncertainties
The key risks and uncertainties facing the Group are set out in
the table below:
Risk and Mitigation Change 2011 Commentary
Impact
------------- ------------------------------------------------------------ ------- ------------------------------------------------------------
Property Market
--------------------------------------------------------------------------------------------------------------------------------------------------
Macro
environment * Focus on prime assets e * Despite macro concerns and reducing consumer
weakness confidence from early summer 2011, positive valuation
could movement of 1 per cent for the year reflecting prime
undermine * Covenant headroom monitored and stress tested nature of assets
rental
income
levels and * Regular monitoring of tenant strength and diversity * Covenant headroom on individual properties increased
property during 2011
values,
reducing
return
on
investment
and covenant
headroom
------------- ------------------------------------------------------------ ------- ------------------------------------------------------------
Financing
--------------------------------------------------------------------------------------------------------------------------------------------------
Reducing
availability * Regular internal reporting to Board of current and - * Renewed uncertainty in banking and debt markets,
of funds projected funding position although the Group has no major loan maturities until
could 2015.
limit
liquidity * Effective treasury management aimed at balancing long
leading to debt maturity profile and diversification of sources
restriction of finance
of investing
and
operating
activities
and/or
increase
in funding
cost
------------- ------------------------------------------------------------ ------- ------------------------------------------------------------
Operations
------------- ------------------------------------------------------------ -----------------------------------------------------------
Accident,
system * Strong business process and procedures supported by e * Seamless transition to "Facilities Alliance", CSC
failure regular training and exercises innovative property management partnership, with
or external efficiency savings reinvested in fabric improvements
factors
could * Annual audits of operational standards carried out by
threaten the internal and external consultants * Mid year riots provided test of existing procedures:
safe and generally well managed, learning points implemented
secure including new policies on monitoring and use of
environment * Culture of visitor safety social media
provided for
shoppers and
retailers, * Retailer liaison and briefings * Regulatory change: good ranking in Carbon Reduction
leading to Commitment "early action metrics"
financial
and/or * Appropriate levels of insurance
reputational
loss
------------- ------------------------------------------------------------ -----------------------------------------------------------
Strategy and execution
--------------------------------------------------------------------------------------------------------------------------------------------
Misjudged
or poorly * Annual strategic review informed by external research - * Focus on optimising performance of pre-eminent
executed and advice centres to benefit from ongoing structural shift in
project UK retail, including broader offer of leisure and
results in catering and inclusion of "theatre"
increased * Management team experienced in shopping centre and
cost or broader retail industry
income * Fresh perspective from new management has enhanced
foregone, debate while maintaining our long term sustainable
hence fails * Engagement with national and international retailers growth objective
to create
shareholder
value * Key staff succession planning, performance-based
incentives
------------- ------------------------------------------------------------ -----------------------------------------------------------
Development and acquisitions
-----------------------------------------------------------------------------------------------------------------------------------------
Misjudged -
or poorly * Access to the expertise and knowledge in the CSC * Increased focus on pre-let space before committing
executed Group's Capital Projects Committee, which reviews capital projects
project detailed appraisals before and monitors progress
results in during significant projects
increased * Unprecedented number of planning applications
cost or including local consultations, positioning the Gro
income * Research and third party due diligence undertaken for up
foregone, transactions for next phase of growth
hence fails
to create
shareholder
value
------------ ------------------------------------------------------------ ---------------------------------------------------------
Share Capital
Details of share capital are set out in note 23.
Going Concern
The directors have reasonable expectation that the Company and
the Group have adequate resources to continue in operational
existence for the foreseeable future. For this reason they continue
to adopt the going concern basis in preparing the financial
statements.
Attention is drawn to the Going Concern disclosure included in
Note 1 to the consolidated financial statements.
Dividends
The directors do not recommend a final dividend for the year
(2010 nil).
Creditor Payment Policy
The Group's policy and practice is to pay creditors in
accordance with agreed terms of business. The company does not
ordinarily pay its creditors directly as this is carried out by
other companies in Capital Shopping Centres Group PLC. As a result,
the company has a nil trade payable balance and it is not practical
to calculate creditor days for the company as at 31 December 2011
(2010 nil trade payable balance).
Directors' Indemnity Provision
A qualifying indemnity provision (as defined in S234 of the
Companies Act 2006) is in force for the benefit of the Directors of
the Company and its associated companies. The company's parent,
Capital Shopping Centres Group PLC, maintains Directors' and
Officers' insurance which is reviewed annually.
Charitable Donations
During the year the Group made charitable donations of GBP68,508
(2010 GBP79,810) and no political donations (2010 GBPnil).
Directors
The directors who held office during the year and until the date
of this report are given below:
Mike Butterworth appointed 11 March 2011
Martin Ellis
David Fischel
Hugh Ford appointed 3 November 2011
Trevor Pereira
Matthew Roberts
Peter Weir appointed 3 November 2011
Kay Chaldecott resigned 30 September 2011
Caroline Kirby resigned 17 October 2011
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the Group and parent Company financial
statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union. Under company
law the Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state
of affairs of the Group and the Company and of the profit or loss
of the Group and Company for that period. In preparing these
financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether applicable IFRSs as adopted by the European
Union have been followed, subject to any material departures
disclosed and explained in the financial statements;
-- prepare the financial statements on the going concern basis,
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and the Group and enable them to
ensure that the financial statements comply with the Companies Act
2006 and, as regards the Group financial statements, Article 4 of
the IAS Regulation. They are also responsible for safeguarding the
assets of the Company and the Group and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
Each of the Directors, whose names and functions are listed in
the Directors' Report confirm that, to the best of each their
knowledge:
(a) the Group financial statements, which have been prepared in
accordance with IFRSs as adopted by the EU, give a true and fair
view of the assets, liabilities, financial position and profit of
the Group and Company; and
(b) the Directors' report contained in the annual report
includes a fair review of the development and performance of the
business and the position of the Group and Company, together with a
description of the principal risks and uncertainties that they
face.
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit
information of which the auditors are unaware and each Director has
taken all reasonable steps to make himself or herself aware of any
relevant audit information and to establish that the auditors are
aware of that information.
Independent Auditors
The auditors, PricewaterhouseCoopers LLP, have indicated their
willingness to continue in office and a resolution seeking to
reappoint them will be proposed at the forthcoming Annual General
Meeting.
On behalf of the Board on
Matthew Roberts
Director
26 April 2012
Peter Weir
Director
26 April 2012
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF
CAPITAL SHOPPING CENTRES PLC
We have audited the financial statements of Capital Shopping
Centres PLC (company number 2893329) for the year ended 31 December
2011 which comprise the Consolidated Income Statement, the
Consolidated Statement of Comprehensive Income, the Group and
Company Balance Sheets, the Group and Company Statements of Changes
in Equity, the Group and Company Statements of Cash Flows and the
related notes. The financial reporting framework that has been
applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European
Union and, as regards the Company financial statements, as applied
in accordance with the provisions of the Companies Act 2006.
Respective responsibilities of Directors and auditors
As explained more fully in the Statement of Directors'
Responsibilities set out on page 8, the Directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board's Ethical Standards for
Auditors.
This report, including the opinions, has been prepared for and
only for the Company's members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose. We
do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Group's and Parent company's circumstances and
have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the
Directors; and the overall presentation of the financial
statements.
Opinion on financial statements
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Company's affairs as at 31 December
2011 and of the Group's profit and Group's and Company's cash flows
for the year then ended;
-- the Group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the Company financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union and as
applied in accordance with the provisions of the Companies Act
2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006 and, as regards the
group financial statements, Article 4 of the IAS Regulation.
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF
CAPITAL SHOPPING CENTRES PLC
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report
for the financial year for which the financial statements are
prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the Company financial statements are not in agreement with
the accounting records and returns; or
-- certain disclosures of Directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Alison Morris (Senior Statutory Auditor)
for and on behalf of
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
26 April 2012
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2011
2011 2010
Notes GBPm GBPm
Revenue 3 381.7 389.9
======= =======
Net rental income 4 268.4 263.3
Net other income (0.5) 0.7
Revaluation and sale of investment and
development
property 6 30.0 479.0
Administration expenses - ongoing (9.2) (11.1)
Administration expenses - exceptional (3.3) -
Impairment of goodwill - (3.1)
------- -------
Operating profit 285.4 728.8
------- -------
Finance costs 7 (164.7) (173.1)
Finance income 8 2.8 2.3
Other finance costs 9 (42.3) (50.6)
Change in fair value of derivative financial
instruments (28.9) (33.4)
------- -------
Net finance costs (233.1) (254.8)
------- -------
Profit before tax 10 52.3 474.0
------- -------
Current tax 11 - 1.2
Deferred tax 11 - (0.1)
REIT entry charge 11 - (3.0)
------- -------
Taxation - (1.9)
------- -------
Profit for the year 52.3 472.1
======= =======
Attributable to:
Equity shareholders of Capital Shopping
Centres PLC 48.7 455.3
Non-controlling interest 3.6 16.8
------- -------
52.3 472.1
======= =======
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2011
2011 2010
GBPm GBPm
Profit for the year 52.3 472.1
Total comprehensive income for the year 52.3 472.1
==== =====
Attributable to:
Equity shareholders of Capital Shopping Centres
PLC 48.7 455.3
Non-controlling interest 3.6 16.8
---- -----
Total comprehensive income for the year 52.3 472.1
==== =====
BALANCE SHEETS
AS AT 31 DECEMBER 2011
Group Group Company Company
2011 2010 2011 2010
Notes GBPm GBPm GBPm GBPm
Non-current assets
Goodwill 29 8.8 - - -
Investment and development
property 14 4,770.5 4,807.5 - -
Investment in group companies 15 - - 1,014.5 1,024.4
Derivative financial instruments 22 - 4.6 - -
Trade and other receivables 18 77.0 69.5 - -
4,856.3 4,881.6 1,014.5 1,024.4
--------- --------- --------- ---------
Current assets
Trading property 17 7.5 25.5 - -
Trade and other receivables 18 49.1 48.2 1,905.9 1,911.8
Cash and cash equivalents 34.4 87.4 0.2 52.3
--------- --------- --------- ---------
91.0 161.1 1,906.1 1,964.1
--------- --------- --------- ---------
Total assets 4,947.3 5,042.7 2,920.6 2,988.5
--------- --------- --------- ---------
Current liabilities
Trade and other payables 19 (893.6) (1,085.1) (1,653.1) (1,739.7)
Borrowings 20 (48.1) (45.5) - -
Derivative financial instruments 22 (1.9) - - -
--------- --------- --------- ---------
(943.6) (1,130.6) (1,653.1) (1,739.7)
--------- --------- --------- ---------
Non-current liabilities
Borrowings 20 (2,646.9) (2,627.8) (26.8) (26.7)
Derivative financial instruments 22 (271.3) (251.0) - -
Other payables (5.1) (5.2) (5.0) (4.9)
--------- --------- --------- ---------
(2,923.3) (2,884.0) (31.8) (31.6)
--------- --------- --------- ---------
Total liabilities (3,866.9) (4,014.6) (1,684.9) (1,771.3)
Net assets 1,080.4 1,028.1 1,235.7 1,217.2
========= ========= ========= =========
Equity
Share capital 23 197.3 197.3 197.3 197.3
Share premium 1,146.9 1,146.9 1,146.9 1,146.9
Other reserves 8.3 8.3 8.3 8.3
Retained earnings (295.6) (344.3) (116.8) (135.3)
--------- --------- --------- ---------
Attributable to equity
shareholders of
Capital Shopping Centres
PLC 1,056.9 1,008.2 1,235.7 1,217.2
Non-controlling interest 23.5 19.9 - -
--------- --------- --------- ---------
Total equity 1,080.4 1,028.1 1,235.7 1,217.2
========= ========= ========= =========
Notes on pages 17 to 50 form part of these consolidated
financial statements.
These consolidated financial statements have been approved for
issue by the Board of Directors on 26 April 2012 and signed on its
behalf by
Matthew Roberts
Director
Peter Weir
Director
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2011
Group Share Non-
Share premium Other Retained controlling Total
capital account reserves earnings Total interest equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January 2010 197.3 646.9 8.3 (799.6) 52.9 - 52.9
Profit for the year - - - 455.3 455.3 16.8 472.1
-------- -------- --------- --------- -------- ------------ --------
Total comprehensive
income for the year - - - 455.3 455.3 16.8 472.1
-------- -------- --------- --------- -------- ------------ --------
Ordinary shares
issued - 500.0 - - 500.0 - 500.0
Non-controlling
interest
additions - - - - - 3.1 3.1
-------- -------- --------- --------- -------- ------------ --------
At 31 December 2010 197.3 1,146.9 8.3 (344.3) 1,008.2 19.9 1,028.1
======== ======== ========= ========= ======== ============ ========
At 1 January 2011 197.3 1,146.9 8.3 (344.3) 1,008.2 19.9 1,028.1
Profit for the year - - - 48.7 48.7 3.6 52.3
-------- -------- --------- --------- -------- ------------ --------
Total comprehensive
income for the year - - - 48.7 48.7 3.6 52.3
-------- -------- --------- --------- -------- ------------ --------
At 31 December 2011 197.3 1,146.9 8.3 (295.6) 1,056.9 23.5 1,080.4
======== ======== ========= ========= ======== ============ ========
Company Share
Share premium Other Retained Total
capital account reserves earnings equity
GBPm GBPm GBPm GBPm GBPm
At 1 January 2010 197.3 646.9 8.3 (259.8) 592.7
Profit for the year - - - 124.5 124.5
-------- -------- --------- --------- --------
Total comprehensive
income for the year - - - 124.5 124.5
-------- -------- --------- --------- --------
Ordinary shares issued - 500.0 - - 500.0
-------- -------- --------- --------- --------
At 31 December 2010 197.3 1,146.9 8.3 (135.3) 1,217.2
======== ======== ========= ========= ========
At 1 January 2011 197.3 1,146.9 8.3 (135.3) 1,217.2
Profit for the year - - - 18.5 18.5
-------- -------- --------- --------- --------
Total comprehensive
income for the year - - - 18.5 18.5
-------- -------- --------- --------- --------
At 31 December 2011 197.3 1,146.9 8.3 (116.8) 1,235.7
======== ======== ========= ========= ========
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2011
Group Group Company Company
2011 2010 2011 2010
Notes GBPm GBPm GBPm GBPm
Cash generated from operations 24 242.1 388.4 (52.8) 58.2
Interest paid (200.5) (210.2) (63.7) (63.8)
Interest received 2.8 2.3 64.4 56.0
Tax received - 1.4 - -
REIT entry charge paid (18.9) (36.6) - -
Cash flows from operating
activities 25.5 145.3 (52.1) 50.4
-------- -------- -------- --------
Purchase and development
of
property (20.0) (27.4) - -
Sale of property 1.7 64.4 - -
Acquisition of businesses (72.8) - -
Other derivative instruments - (7.3) - -
Cash flows from investing
activities (91.1) 29.7 - -
-------- -------- -------- --------
Borrowings repaid (43.8) (663.2) - -
Borrowings drawn 56.4 518.7 - -
Cash transferred to restricted
accounts - 19.8 - -
Partnership equity introduced - 3.1 - -
Cash flows from financing
activities 12.6 (121.6) - -
-------- -------- -------- --------
Net (decrease)/increase
in cash
and cash equivalents (53.0) 53.4 (52.1) 50.4
Cash and cash equivalents
at
1 January 87.4 34.0 52.3 1.9
-------- -------- -------- --------
Cash and cash equivalents
at
31 December 34.4 87.4 0.2 52.3
======== ======== ======== ========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
1. Principal accounting policies
Accounting convention and basis of preparation
These financial statements have been prepared in accordance with
International Financial Reporting Standards, as adopted by the
European Union (IFRS), IFRIC interpretations and with those parts
of the Companies Act 2006 applicable to companies reporting under
IFRS. The directors have taken advantage of the exemption offered
by Section 408 of the Companies Act not to present a separate
income statement for the company.
The financial statements have been prepared under the historical
cost convention as modified by the revaluation of properties,
available-for-sale investments, financial assets and liabilities
held for trading. A summary of the more important group accounting
policies is set out below.
The accounting policies used are consistent with those applied
in the last annual financial statements, as amended to reflect the
adoption of new standards, amendments, and interpretations which
became effective in the year. During 2011, the following standards,
amendments and interpretations endorsed by the EU became effective
for the first time for the Group's 31 December 2011 year end:
-- IFRS 24 Related Party Disclosures;
-- IFRS 32 Financial Instruments: Presentation (amendment);
-- IFRIC 14 IAS 19 - The limit on a Defined Benefit Asset,
Minimum Funding Requirements and their Interaction;
-- IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments; and
Amendments arising from 2010 annual improvements project.
These either had no material impact on the financial statements
or resulted in changes to presentation and disclosure only.
The following standard has been issued and adopted by the EU but
is not effective for the year ended 31 December 2011 and has not
been adopted early:
-- IFRS 7 Financial Instruments: Disclosures (amendment)
This pronouncement is not expected to have a material impact on
the financial statements, but may result in changes to presentation
or disclosure.
The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of
estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period. Although these estimates are based on management's best
knowledge of the amount, event or actions, actual results
ultimately may differ from those estimates. Where such judgements
are made they are included within the accounting policies given in
note 1.
The group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Directors' Report on pages 1 to 8 The financial
position of the group, its cash flows, liquidity position and
borrowing facilities are described in the Directors' Report on
pages 1 to 8. In addition note 22 includes the group's risk
management objectives, details of its financial instruments and
hedging activities, its exposures to liquidity risk and details of
its capital structure.
Accounting convention and basis of preparation
The Directors have undertaken a review of the projected
financial position of the Company and the Group, which includes
reasonable assumptions about future trading and cash flows. This
review included an assessment of cash balances, the debt maturity
profile, the economic conditions faced by tenants and the financial
position of the Group's parent company, Capital Shopping Centres
Group PLC.
Based on the Group's forecasts and projections and taking into
account reasonably possible changes in trading performance along
with the factors listed above, the Directors have concluded that
there is a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. Thus they continue to adopt the going concern basis of
accounting in preparing the annual financial statements.
Accounting policies - group and company
Basis of consolidation
The consolidated financial information includes the company and
its subsidiaries and their interests in joint ventures and
associates.
All intra-group transactions, balances and unrealised gains on
transactions between group companies are eliminated on
consolidation.
- subsidiaries
A subsidiary is an entity for which the company has the ability,
either directly or indirectly, to govern the financial and
operating policies, whether through a majority of the voting rights
or otherwise. Subsidiaries are fully consolidated from the date on
which control is transferred to the group and are de-consolidated
from the date that control ceases.
The company's investment in group companies is carried at cost
less accumulated impairment losses.
- joint ventures
A joint venture is an entity or operation for which the company,
either directly or indirectly, is in a position to jointly control
the financial and operating policies of the entity or
operation.
The group's interest in a joint venture is accounted for using
proportional consolidation. The group's share of the assets,
liabilities, income and expenses are combined with the equivalent
items in the consolidated financial statements on a line-by-line
basis.
- associates
An associate is an entity over which the company, either
directly or indirectly, is in a position to exercise significant
influence by participating in, but without control or joint control
of the financial and operating policies of the entity.
The Group's interest in an associate is accounted for using the
equity method.
- non-controlling interest
A non-controlling interest is the equity in a subsidiary not
attributable, directly or indirectly, to the company.
Non-controlling interests are presented within equity, separately
from the amounts attributable to equity shareholders of the
company. Profit or loss and each component of other comprehensive
income is attributed to equity shareholders of the company and to
non-controlling interests in the appropriate proportions.
Revenue recognition
The group recognises revenue when the amount of revenue can be
reliably measured and it is probable that future economic benefits
will flow to the group.
- property revenue
Rental income receivable is recognised on a straight line basis
over the term of the lease. Directly attributable lease incentives
are recognised within rental income on the same basis.
Contingent rents, being those lease payments that are not fixed
at the inception of a lease, for example increases arising on rent
reviews or rents linked to tenant revenues, are recorded as income
in the periods in which they are earned. Rent reviews are
recognised as income from the date of the rent review, based on
management's estimates. Estimates are derived from knowledge of
market rents for comparable properties determined on an individual
property basis and updated for progress of negotiations.
Service charge income is recognised on an accruals basis in line
with the service being provided.
- trading property income
Revenue on the sale of trading property is recognised when the
significant risks and rewards of ownership have been transferred to
the buyer. This will normally take place on exchange of
contracts.
Interest income
Interest income is accrued on a time basis, by reference to the
principal outstanding and the effective interest rate.
Dividend income
Dividend income is recognised when the right to receive payment
has been established.
Exceptional items
Exceptional items are those items that in the directors' view
are required to be separately disclosed by virtue of their size or
incidence to enable a full understanding of the Group's financial
performance.
Taxation
Current tax is the amount payable on the taxable income for the
year and any adjustment in respect of prior years. It is calculated
using rates that have been enacted or substantively enacted by the
balance sheet date.
Deferred tax is provided using the balance sheet liability
method in respect of temporary differences between the carrying
amounts of assets and liabilities in the balance sheet and their
tax bases.
Temporary differences are not provided on the initial
recognition of assets or liabilities that affect neither accounting
nor taxable profit, and differences relating to investments in
subsidiaries to the extent that they will not reverse in the
foreseeable future.
Deferred tax is determined using tax rates that have been
enacted or substantively enacted by the balance sheet date and are
expected to apply when the related deferred tax asset is realised
or the deferred tax liability is settled.
Deferred tax assets are recognised only to the extent that
management believe it is probable that future taxable profit will
be available against which the temporary differences can be
utilised. Deferred tax assets and liabilities are offset only when
they relate to taxes levied by the same authority and the group
intends to settle them on a net basis.
Tax is included in the income statement except when it relates
to items recognised directly in other comprehensive income or
equity, in which case the related tax is also recognised directly
in other comprehensive income or equity.
Investment and development property
Investment and development property is owned or leased by the
Group and held for long-term rental income and capital
appreciation.
The group has elected to use the fair value model. Properties
are initially recognised at cost and subsequently revalued at the
balance sheet date to fair value as determined by professionally
qualified external valuers on the basis of market value. Valuations
conform with the Royal Institution of Chartered Surveyors ("RICS"),
Valuation Standards 7th Edition and IVS1 of International Valuation
Standards.
The main estimates and judgements underlying the valuations are
in relation to market rent, taking into account forecast growth
rates and yields based on known transactions for similar properties
and likely incentives offered to tenants.
Properties held under leases are stated gross of the recognised
finance lease liability.
The cost of investment and development property includes
capitalised interest and other directly attributable outgoings
incurred during development. Interest is capitalised on the basis
of the average rate of interest paid on the relevant debt
outstanding. Interest ceases to be capitalised on the date of
practical completion.
Gains or losses arising from changes in the fair value of
investment and development property are recognised in the income
statement. Depreciation is not provided in respect of investment
and development property.
When the use of a property changes from that of investment to
trading, the property's deemed cost for subsequent accounting in
accordance with IAS 2 Inventories is its fair value at the date of
change in use.
Gains or losses arising on the sale of investment and
development property are recognised when the significant risks and
rewards of ownership have been transferred to the buyer. This will
normally take place on exchange of contracts. The gain or loss
recognised is the proceeds received less the carrying value of the
property and costs directly associated with the sale.
Leases
Leases are classified according to the substance of the
transaction. A lease that transfers substantially all the risks and
rewards of ownership to the lessee is classified as a finance
lease. All other leases are normally classified as operating
leases.
- Group as lessee
Finance leases of investment property are accounted for as
finance leases and recognised as an asset and an obligation to pay
future minimum lease payments. The investment property asset is
included in the balance sheet at fair value, gross of the
recognised finance lease liability. Contingent rents are recognised
as they accrue.
Other finance lease assets are capitalised at the lower of the
fair value of the leased asset or the present value of the minimum
lease payments and depreciated over the shorter of the lease term
and the useful life of the asset.
Lease payments are allocated between the liability and finance
charges so as to achieve a constant financing rate.
Rentals payable under operating leases are charged to the income
statement on a straight-line basis over the lease term.
- Group as lessor
Investment properties are leased to tenants under operating
leases, with rental income being recognised on a straight-line
basis over the lease term. For more detail see the revenue
recognition accounting policy.
Plant and equipment
Plant and equipment consists of vehicles, fixtures, fittings and
other equipment. Plant and equipment is stated at cost less
accumulated depreciation and any accumulated impairment losses.
Depreciation is charged to the income statement on a
straight-line basis over an asset's estimated useful life up to a
maximum of five years.
Other investments
Available-for-sale investments, being investments intended to be
held for an indefinite period, are initially and subsequently
measured at fair value. For listed investments, fair value is the
current bid market value at the reporting date. For unlisted
investments where there is no active market, fair value is assessed
using an appropriate methodology.
Gains or losses arising from changes in fair value are included
in other comprehensive income, except to the extent that losses are
considered to represent a permanent impairment, in which case they
are recognised in the income statement.
Upon disposal, accumulated fair value adjustments are recycled
from reserves to the income statement.
Goodwill
Goodwill arising on business contributions is carried at cost
less accumulated impairment losses. Goodwill is assessed for
impairment on an annual basis.
Impairment of assets
The group's assets are reviewed at each balance sheet date to
determine whether events or changes in circumstances exist that
indicate that their carrying amount may not be recoverable. If such
an indication exists, the asset's recoverable amount is estimated.
The recoverable amount is the higher of an asset's fair value less
costs to sell and its value in use. An impairment loss is
recognised in the income statement for the amount by which the
asset's carrying amount exceeds its recoverable amount. For the
purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows.
Trading property
Trading property comprises those properties either intended for
sale or in the process of construction for sale. Where such
properties were previously categorised as investment and
development property they are transferred at their fair value which
forms their deemed cost. Trading property is carried at the lower
of cost and net realisable value.
Trade receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost.
The directors' exercise judgement as to the collectability of
trade receivables and determine if it is appropriate to impair
these assets. Factors such as days past due, credit status of the
counterparty and historical evidence of collection are
considered.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, deposits with
banks, whether restricted or unrestricted and other short-term
liquid investments with original maturities of three months or
less.
Trade payables
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost.
Provisions
Provisions are recognised when the group has a current
obligation arising from a past event and it is probable that the
group will be required to settle that obligation. Provisions are
measured at the directors' best estimate of the expenditure
required to settle that obligation at the balance sheet date.
Pensions
The costs of defined contribution schemes and contributions to
personal plans are charged to the income statement in the year in
which they are incurred.
Borrowings
Borrowings are recognised initially at their net proceeds on
issue and subsequently carried at amortised cost. Any transaction
costs and premiums or discounts are recognised over the contractual
life using the effective interest method.
In the event of early repayment, all unamortised transaction
costs are recognised immediately in the income statement.
Derivative financial instruments
The group uses derivative financial instruments to manage
exposure to interest rate and foreign exchange risk. They are
initially recognised on the trade date at fair value and
subsequently re-measured at fair value based on market price.
Changes in fair value are recognised directly in the income
statement, except for the effective portion of gains or losses on
derivative financial instruments designated as a hedge of net
investment in foreign operations, in which case they are recognised
in other comprehensive income. Where derivative financial
instruments are designated as a fair value hedge, the relevant fair
value movements on the hedged item are also taken to the income
statement.
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new ordinary shares are shown
in equity as a deduction, net of tax, from the proceeds.
2. Segmental reporting
The Group operates a single business activity in a single
economic environment, namely the development and management of
regional shopping centres within the United Kingdom.
The principal profit indicator used to measure performance is
net rental income. An analysis of net rental income is given in
note 4.
3. Revenue
2011 2010
GBPm GBPm
Rent receivable and service charge income 374.2 379.6
Sale of trading property 7.5 10.3
----- -----
381.7 389.9
===== =====
4. Net rental income
2011 2010
GBPm GBPm
Revenue 381.7 389.9
======= =======
Rent receivable 321.3 326.0
Service charge income 52.9 53.6
------- -------
374.2 379.6
Rent payable (17.3) (15.1)
Service charge costs (56.6) (60.5)
Other non-recoverable costs (31.9) (40.7)
------- -------
Net rental income 268.4 263.3
======= =======
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
5. Operating leases
The Group earns rental income by leasing its investment
properties to tenants under operating leases.
In the UK, the standard shopping centre lease is for a term of
10 to 15 years. Standard lease provisions include service charge
payments, recovery of other direct costs and review every five
years to market rent. Standard revenue based leases have a revenue
percentage agreed with each lessee which is applied to a retail
unit's annual sales and any excess between the resulting revenue
rent and the minimum rent is receivable by the Group.
The future minimum lease amounts receivable under
non-cancellable operating leases are as follows:
2011 2010
GBPm GBPm
Not later than one year 301.6 325.7
Later than one year and not later than five years 960.4 1,062.2
Later than five years 892.4 1,359.7
2,154.4 2,747.6
======= =======
6. Revaluation and sale of investment and development property
2011 2010
GBPm GBPm
Revaluation of investment and development
property 30.0 482.4
Sale of investment property - (3.4)
----- ------
30.0 479.0
===== ======
7. Finance costs
2011 2010
GBPm GBPm
On bank loans and overdrafts 130.0 134.2
On amounts due to related companies 31.1 36.2
On obligations under finance leases 3.6 3.7
------ ------
Gross finance costs 164.7 174.1
Interest capitalised on development - (1.0)
------ ------
164.7 173.1
====== ======
8. Finance income
2011 2010
GBPm GBPm
On amounts due from related companies 2.3 2.2
Other 0.5 0.1
----- -----
2.8 2.3
===== =====
9. Other finance costs
2011 2010
GBPm GBPm
Amortisation of Metrocentre compound financial
instrument 7.9 8.8
Costs of termination of derivative financial
instruments 34.4 41.8
42.3 50.6
===== =====
10. Profit/(loss) before tax
Group:
The profit before tax of GBP52.3 million (2010 GBP474.0 million)
is arrived at after charging:
Auditors' remuneration is in respect of the statutory audit of
the company and consolidated accounts. Auditors' remuneration of
GBP77,000 (2010 GBP70,000) was settled on behalf of the company by
its ultimate parent Capital Shopping Centres Group PLC and has not
been recharged.
11. Taxation
Tax expense for the year
2011 2010
GBPm GBPm
Current UK corporation tax at 26.5% (2010 28%) - -
Prior year items - (1.2)
------ ------
Current tax - (1.2)
Deferred tax - 0.1
REIT entry charge - 3.0
Total tax expense - 1.9
====== ======
The tax expense for the year is lower (2010 lower) than the
standard rate of corporation tax in the UK. The differences are
explained below:
2011 2010
GBPm GBPm
Profit before tax 52.3 474.0
------- --------
Profit before tax multiplied by the standard
rate in the UK of 26.5% (2010 28%) 13.9 132.7
Capital allowances not reversing on sale - (3.7)
Disposal of properties and investments 0.1 (18.3)
Prior year corporation tax items - (1.2)
Prior year deferred tax items (2.0) -
Expenses disallowed, net of capitalised interest 1.5 3.1
UK transfer pricing adjustment 3.4 3.3
Group relief (without payment) 0.9 1.3
REIT exemption - corporation tax (16.7) 7.3
REIT exemption - deferred tax (3.1) (125.7)
REIT exemption - entry charge - 3.0
Losses utilised in the period - 0.1
Unprovided deferred tax 1.9 -
Reduction in tax rate 0.1 -
Total tax expense - 1.9
======= ========
Tax items that are taken directly to equity are shown in the
consolidated statement of comprehensive income.
12. Dividends
The Board has not proposed a final dividend in respect of 2011
(2010 nil).
13. Profit for the financial year attributable to shareholders of Capital Shopping Centres PLC
A profit of GBP18.5 million is dealt with in the accounts of the
holding company in respect of the year (2010 GBP124.5 million). No
income statement is presented for the company as permitted by
Section 408 of the Companies Act 2006.
14. Investment and development property
Group Freehold Leasehold Total
GBPm GBPm GBPm
At 1 January 2010 2,374.8 1,986.4 4,361.2
Addition from acquisition of subsidiary
companies 27.0 - 27.0
Additions from subsequent expenditure 12.1 8.1 20.2
Transferred to trading property - (16.1) (16.1)
Disposals (36.1) (31.1) (67.2)
Surplus on revaluation 302.1 180.3 482.4
--------- ---------- --------
At 31 December 2010 2,679.9 2,127.6 4,807.5
Addition from acquisition of subsidiary
companies - 65.0 65.0
Additions from subsequent expenditure 12.1 42.2 54.3
Transferred from trading property 11.5 - 11.5
Disposal of subsidiary company (196.2) - (196.2)
Disposals - (1.6) (1.6)
Surplus on revaluation 9.4 20.6 30.0
--------- ---------- --------
At 31 December 2011 2,516.7 2,253.8 4,770.5
========= ========== ========
Included within additions is GBPnil million (2010 GBP1.0
million) of interest capitalised on developments in progress.
Group 2011 2010
GBPm GBPm
Balance sheet carrying value of investment
and development property 4,770.5 4,807.5
Adjustment in respect of tenant incentives 86.2 79.0
Adjustment in respect of head leases (36.0) (36.7)
Market value of investment and development property 4,820.7 4,849.8
======= =======
The fair value of the Group's investment and development
properties as at 31 December 2011 was determined by independent
external valuers at that date. The valuations conform with the
Royal Institution of Chartered Surveyors ("RICS") Valuation
Standards 7th Edition and with IVS 1 of International Valuation
Standards, and were arrived at by reference to market transactions
for similar properties.
The main assumptions underlying the valuations are in relation
to market rent, taking into account forecast growth rates and
yields based on known transactions for similar properties and
likely incentives offered to tenants.
There are certain restrictions on the realisability of
investment property when a credit facility is in place. In most
circumstances the Group can realise up to 50 per cent without
restriction providing the Group continues to manage the asset.
Realising an amount in excess of this would trigger a change of
control and mandatory repayment of the facility.
15. Investments in group companies
Accumulated
Cost impairment Net
GBPm GBPm GBPm
At 1 January 2010 1,280.8 (362.2) 918.6
Acquisitions 9.9 - 9.9
Impairment reversal for the year - 95.9 95.9
-------- ------------ --------
At 31 December 2010 1,290.7 (266.3) 1,024.4
Additions 1.0 - 1.0
Disposal (25.1) 25.1 -
Impairment charge for the year - (10.9) (10.9)
-------- ------------ --------
At 31 December 2011 1,266.6 (252.1) 1,014.5
======== ============ ========
IAS 36 Impairment of Assets allows for reversal of impairment
charges providing the reversal is calculated on a consistent basis
to the original impairment. At 31 December 2010, this resulted in a
reversal of GBP95.9 million.
The principal subsidiary undertakings are listed below. All
subsidiaries are wholly owned by the company and are registered in
England and Wales unless otherwise stated. All subsidiary
undertakings have been included in the consolidated results.
Company and principal activity Class of share capital % held
Ordinary shares of
Belside Limited (property) (Jersey) GBP1 each 100
"A" ordinary shares
of GBP1 each 100
"B" ordinary shares
Braehead Glasgow Limited (property) of 1.3 Euros each 100
Ordinary shares of
Braehead Park Investments Limited (property) GBP1 each 100
Ordinary shares of
Braehead Park Estates Limited (property) GBP1 each 100
"A" Ordinary shares
Broadmarsh Retail General Partner Limited of GBP1 each 100
acting as General Partner of The Broadmarsh "B" Ordinary shares
Retail Limited Partnership of GBP1 each 100
Chapelfield GP Limited acting as General
Partner of The Chapelfield Partnership Ordinary shares of
(property) GBP1 each 100
Ordinary shares of
CSC Harlequin Limited (property) GBP1 each 100
Ordinary shares of
CSC Lakeside Limited (property) GBP1 each 100
Ordinary shares of
CSC Enterprises (commercial promotion) GBP1 each 100
CSC Properties Investments Limited Ordinary shares of
(property) GBP1 each 100
Ordinary shares of
CSC Bromley Limited (property) GBP1 each 100
CSC Uxbridge (Jersey) Limited (property) Ordinary shares of
(Jersey) GBP1 each 100
Ordinary shares of
Curley Limited (property) (Jersey) GBP1 each 100
Metrocentre (GP) Limited acting as
General Partner of The Metrocentre Ordinary shares of
Partnership (property) GBP1 each 100 1
VCP (GP) Limited acting as General Ordinary shares of
Partner of The Victoria Centre Partnership GBP1 each 100
Ordinary shares of
WRP Management Limited (property) GBP1 each 100
1 By virtue of their 40% interest in The Metrocentre
Partnership, GIC Real Estate is entitled to appoint 40 per cent of
the Directors of Metrocentre (GP) Limited. The non-controlling
interest balance of GBP23.5 million balance shown in the Group
balance sheet as at 31 December 2011 relates to GIC Real Estate's
interest and is calculated in accordance with IAS 27 Consolidated
and Separate Financial Statements.
16. Joint ventures
2011
St David's Xscape
Limited Braehead
Partnership Partnership Other Total
GBPm GBPm GBPm GBPm
Summarised income statements
Gross rental income 13.5 2.0 - 15.5
------------ ------------ ------ --------
Net rental income 9.4 1.6 0.2 11.2
Net other income 0.6 - - 0.6
Revaluation and sale of investment
and
development property 5.3 1.4 6.7
Net finance costs (7.5) (1.3) - (8.8)
------------
Profit for the year 7.8 1.7 0.2 9.7
============ ============ ====== ========
Summarised balance sheets
Investment and development property 272.6 24.1 - 296.7
Other non-current assets 1.0 2.6 - 3.6
Current assets 31.5 1.4 0.3 33.2
Partners' loans (38.6) (8.4) - (47.0)
Current liabilities (65.1) (3.4) - (68.5)
Non-current liabilities (96.3) (22.7) - (119.0)
------------
Net assets/(liabilities) 105.1 (6.4) 0.3 99.0
============ ============ ====== ========
2010
St David's Xscape
Limited Braehead
Partnership Partnership Other Total
GBPm GBPm GBPm GBPm
Summarised income statements
Gross rental income 13.4 0.9 0.9 15.2
------------ ------------ ------ --------
Net rental income 6.6 0.5 0.2 7.3
Net other income 1.0 - - 1.0
Revaluation and sale of investment
and 39.3 0.6 - 39.9
development property (0.1) - - (0.1)
Net finance costs (3.1) (1.5) - (4.6)
------------
Profit/(loss) for the year 43.7 (0.4) 0.2 43.5
============ ============ ====== ========
Summarised balance sheets
Investment and development property 231.0 22.6 - 253.6
Other non-current assets 0.2 2.4 - 2.6
Current assets 35.9 1.9 0.2 38.0
Partners' loans (102.3) (8.4) - (110.7)
Current liabilities (28.5) (2.9) - (31.4)
Non-current liabilities (37.8) (24.0) - (61.8)
------------
Net assets/(liabilities) 98.5 (8.4) 0.2 90.3
============ ============ ====== ========
Joint ventures are accounted for in the consolidated accounts
using proportional consolidation. The Group's share of the assets,
liabilities, income and expenditure shown above are included in the
consolidated financial statement on a line-by-line basis.
The joint ventures include the St David's Limited Partnership
and the Xscape Braehead Partnership. The St David's Limited
Partnership was established in 2004 for investment in the existing
St David's shopping centre, Cardiff, and development of a 967,500
sq. ft. retail-led mixed--use extension. The Xscape Braehead
Partnership was established in 2004, for investment in the Xscape
Leisure Scheme at Braehead, Renfrew, Glasgow.
All joint ventures are held with other joint venture investors
on a 50:50 basis.
17. Trading property
Group 2011 2010
GBPm GBPm
Undeveloped sites - 11.5
Property in development 3.2 11.1
Completed properties 4.3 2.9
---- ----
7.5 25.5
==== ====
The estimated replacement of cost of trading properties, based
on their market value at 31 December 2011, is GBP7.5 million (2010
GBP27.4 miliion). GBP11.5 million in respect of undeveloped sites
was transferred to investment and development property during the
year.
18. Trade and other receivables
Group Group Company Company
2011 2010 2011 2010
GBPm GBPm GBPm GBPm
Current:
Trade receivables 12.1 13.7 - -
Amounts owed by subsidiary
undertakings - - 1,904.1 1,908.9
Amounts owed by related companies 2.5 5.0 - -
Other receivables 12.7 10.0 0.9 2.4
Prepayments and accrued income 21.8 19.5 0.9 0.5
49.1 48.2 1,905.9 1,911.8
===== ===== ======= =======
Non-current:
Prepayments and accrued income 77.0 69.5 - -
===== ===== ======= =======
Amounts owed by subsidiary undertakings and related companies
are unsecured, repayable on demand and for amounts falling within
formalised loan agreements, interest bearing.
Included within prepayments and accrued income are tenant lease
incentives of GBP86.2 million (2010 GBP79.0 million).
19. Trade and other payables
Group Group Company Company
2011 2010 2011 2010
GBPm GBPm GBPm GBPm
Current:
Rents received in advance 66.6 69.1 - -
Amounts owed to subsidiary
undertakings - - 814.3 805.7
Amounts owed to related companies 718.1 926.4 834.0 926.1
Accruals and deferred income 75.3 38.8 2.0 3.1
Other payables 17.9 17.0 1.7 3.6
Other tax and social security 15.7 33.8 1.1 1.2
893.6 1,085.1 1,653.1 1,739.7
===== ======= ======= =======
Amounts owed to subsidiary undertakings and related companies
are unsecured and payable on demand.
20. Borrowings
Group 2011
Carrying Un- Fixed Floating Fair
value Secured secured rate rate value
GBPm GBPm GBPm GBPm GBPm GBPm
Current
Bank loans and
overdrafts 18.5 18.5 - - 18.5 18.5
Commercial
mortgage backed
securities
("CMBS") notes 26.7 26.7 - - 26.7 20.2
Borrowings excluding
finance leases 45.2 45.2 - - 45.2 38.7
Finance lease
obligations 2.9 2.9 - 2.9 - 2.9
--------- -------- -------- ------ --------- --------
48.1 48.1 - 2.9 45.2 41.6
========= ======== ======== ====== ========= ========
Non-current
CMBS notes 2015 1,083.9 1,083.9 - - 1,083.9 818.3
Bank loans 2014 114.8 114.8 - - 114.8 114.8
Bank loans 2016 734.9 734.9 - - 734.9 734.9
Bank loans 2017 506.8 506.8 - - 506.8 506.8
CSC bonds 2013 26.8 - 26.8 26.8 - 26.9
--------- -------- -------- ------ --------- --------
Borrowings
excluding
finance leases
and Metrocentre
compound
instrument 2,467.2 2,440.4 26.8 26.8 2,440.4 2,201.7
Metrocentre
compound
financial
instrument 146.6 - 146.6 146.6 - 146.6
Finance lease
obligations 33.1 33.1 - 33.1 - 33.1
--------- -------- -------- ------ --------- --------
2,649.9 2,473.5 173.4 206.5 2,440.4 2,381.4
========= ======== ======== ====== ========= ========
Total borrowings 2,695.0 2,521.6 173.4 209.4 2,485.6 2,423.0
========= ======== ======== ====== ========= ========
Cash and cash
equivalents (34.4)
---------
Net debt 2,660.6
=========
Net external debt (adjusted for the Metrocentre compound
financial instrument) at 31 December 2011 was GBP2,514.0
million.
The Group substantially eliminates its interest rate exposure to
floating rate debt as illustrated in note 22.
Company 2011
Carrying Un- Fixed Floating Fair
value Secured secured rate rate value
GBPm GBPm GBPm GBPm GBPm GBPm
Non-current
CSC bonds 2013 26.8 - 26.8 26.8 - 26.9
--------- -------- -------- ------ --------- ------
Total borrowings 26.8 - 26.8 26.8 - 26.9
========= ======== ======== ====== ========= ======
Cash and cash
equivalents (0.2)
Net cash 26.6
=========
Group 2010
Carrying Un- Fixed Floating Fair
value Secured secured rate rate value
GBPm GBPm GBPm GBPm GBPm GBPm
Current
Bank loans and overdrafts 16.5 16.5 - - 16.5 16.5
Commercial
mortgage
backed securities
("CMBS") notes 25.4 25.4 - - 25.4 20.0
Borrowings
excluding
finance leases 41.9 41.9 - 41.9 36.5
Finance lease
obligations 3.6 3.6 - 3.6 - 3.6
--------- -------- -------- ------ --------- --------
45.5 45.5 - 3.6 41.9 40.1
========= ======== ======== ====== ========= ========
Non-current
CMBS notes 2015 1,110.7 1,110.7 - - 1,110.7 852.7
Bank loans 2014 58.4 58.4 - - 58.4 58.4
Bank loans 2016 749.1 749.1 - - 749.1 749.1
Bank loans 2017 511.1 511.1 - - 511.1 511.1
CSC bonds 2013 26.7 - 26.7 26.7 - 27.3
--------- -------- -------- ------ --------- --------
Borrowings excluding
finance leases and
Metrocentre
compound
instrument 2,456.0 2,429.3 26.7 26.7 2,429.3 2,198.6
Metrocentre
compound
financial
instrument 138.7 - 138.7 138.7 - 138.7
Finance lease
obligations 33.1 33.1 - 33.1 - 33.1
--------- -------- -------- ------ --------- --------
2,627.8 2,462.4 165.4 198.5 2,429.3 2,370.4
========= ======== ======== ====== ========= ========
Total borrowings 2,673.3 2,507.9 165.4 202.1 2,471.2 2,410.5
========= ======== ======== ====== ========= ========
Cash and cash
equivalents (87.4)
---------
Net debt 2,585.9
=========
Net external debt (adjusted for the Metrocentre compound
financial instrument) at 31 December 2010 was GBP2,447.2
million.
The Group substantially eliminates its interest rate exposure to
floating rate debt as illustrated in note 22.
Company 2010
Carrying Un- Fixed Floating Fair
value Secured secured rate rate value
GBPm GBPm GBPm GBPm GBPm GBPm
Non-current
CSC bonds 2013 26.7 - 26.7 26.7 - 27.3
--------- -------- -------- ------ --------- ------
Total borrowings 26.7 - 26.7 26.7 - 27.3
========= ======== ======== ====== ========= ======
Cash and cash
equivalents (52.3)
Net cash (25.6)
=========
21. Finance lease obligations
Group Group
2011 2010
GBPm GBPm
Minimum lease payments under finance leases fall due:
Not later than one year 4.4 3.6
Later than one year and not later than five years 16.6 17.8
Later than five years 63.1 65.9
------ ------
84.1 87.3
Future finance charges on finance leases (48.1) (50.6)
------ ------
Present value of finance lease liabilities 36.0 36.7
====== ======
Present value of minimum finance lease obligations
Not later than one year 2.9 3.6
Later than one year and not later than five years 12.0 14.0
Later than five years 21.1 19.1
36.0 36.7
====== ======
Finance lease liabilities are in respect of leasehold investment
property. A number of the Group's head leases provide for payment
of contingent rent, usually a proportion of net rental income, in
addition to the rents above.
22. Financial risk management
The Group is exposed to a variety of risks arising from the
Group's operations, these are principally market risk (including
interest rate risk and market price risk), liquidity risk and
credit risk.
The majority of the Group's financial risk management is carried
out by Capital Shopping Centres Group PLC's treasury department and
the policies for managing each of these risks and the principal
effects of these policies on the results for the year are
summarised below.
Market risk
Interest rate risk
Interest rate risk comprises both cash flow and fair value
risks:
Cash flow interest rate risk is the risk that the future cash
flows of a financial instrument will fluctuate due to changes in
market interest rates. Fair value interest rate risk is the risk
that the fair value of financial instruments will fluctuate as a
result of changes in market interest rates.
The Group's interest rate risk arises from borrowings issued at
variable rates that expose the Group to cash flow interest rate
risk, whereas borrowings issued at fixed interest rates expose the
Group to fair value interest rate risk.
Bank debt is typically issued at floating rates linked to LIBOR.
Bond debt and other capital market debt are generally issued at
fixed rates.
It is Group policy, and often a requirement of the Group's
lenders, to eliminate substantially all short and medium-term
exposure to interest rate fluctuations in order to establish
certainty over medium-term cash flows by using floating to fixed
interest rate swaps. Such swaps have the economic effect of
converting borrowings from floating to fixed rates. As a
consequence, the Group is exposed to market price risk in respect
of the fair value of its fixed interest rate swaps.
The below table shows the effects of interest rate swaps on the
Group borrowings profile of the Group:
Fixed Floating Fixed Floating
2011 2011 2010 2010
GBPm GBPm GBPm GBPm
Borrowings 209.4 2,485.6 202.1 2,471.2
Derivative impact 2,436.0 (2,436.0) 2,222.4 (2,222.4)
-------- ---------- -------- ----------
Net borrowings profile 2,645.4 49.6 2,424.5 248.8
-------- ---------- -------- ----------
Interest rate protection
on floating debt 98.0% 89.9%
========== ==========
The weighted average rate of interest rates contracted through
interest rates swaps is 4.4 per cent (2010 4.9 per cent).
The approximate impact of a 50 basis point shift upwards in the
level of interest rates would be a positive movement of GBP44.4
million (2010 GBP53.6 million) in the fair value of derivatives.
The approximate impact of a 50 basis point shift downwards in the
level of interest rates would be a negative movement of GBP45.3
million (2010 GBP54.6 million) in the fair value of derivatives. In
practice, a parallel shift in the yield curve is highly unlikely.
However, the above sensitivity analysis is a reasonable
illustration of the possible effect from the changes in slope and
shifts in the yield curve that may actually occur. Because the
fixed rate derivative financial instruments are matched by floating
rate debt, the overall effect on Group cash flow of such a movement
would be very small.
Liquidity risk
Liquidity risk is managed to ensure that the Group is able to
meet future payment obligations when financial liabilities fall
due. Liquidity analysis is conducted to ensure that sufficient
headroom is available to meet the Group's operational requirements
and committed investments. The Group treasury policy aims to meet
this objective through maintaining adequate cash, marketable
securities and committed facilities to meet these requirements. The
Group's policy is to seek to optimise its exposure to liquidity
risk by balancing its exposure to interest rate risk and to
refinancing risk. In effect the Group seeks to borrow for as long
as possible at the lowest acceptable cost.
The maturity profile of Group debt showed an average maturity of
4 years (2010 - five years). The Group regularly reviews the
maturity profile of its financial liabilities and seeks to avoid
bunching of maturities through the regular replacement of
facilities and by using a selection of maturity dates. Refinancing
risk may be reduced by re-borrowing prior to the contracted
maturity date, effectively switching liquidity risk for market
risk.
The Group may pre-fund capital expenditure by arranging
facilities or raising debt in the capital markets and then placing
surplus funds on deposit until required for the project. Efficient
treasury management and strict credit control minimise the costs
and risk associated with this policy which ensures that funds are
available to meet commitments as they fall due.
The tables below set out the maturity analysis of the Group's
financial liabilities based on the undiscounted contractual
obligations to make payments of interest and to repay principal.
Where interest payment obligations are based on a floating rate the
rates used are those implied by the par yield curve.
Group 2011
Within Over
1 1-2 3-5 5
year years years years Totals
GBPm GBPm GBPm GBPm GBPm
Borrowings (including
interest) (95.1) (94.4) (2,023.1) (494.3) (2,706.9)
Tax and other payables (35.4) (1.0) (2.4) - (38.8)
Finance lease obligations (3.0) (2.9) (9.0) (21.1) (36.0)
Derivatives payments (97.5) (100.5) (188.3) (3.4) (389.7)
Derivative receipts 24.4 24.5 60.2 2.1 111.2
-------- -------- ---------- -------- -----------
(206.6) (174.3) (2,162.6) (516.7) (3,060.2)
======== ======== ========== ======== ===========
Group 2010
Within Over
1 1-2 3-5 5
year years years years Totals
GBPm GBPm GBPm GBPm GBPm
Borrowings (including
interest) (89.6) (101.2) (1,547.2) (1,148.3) (2,886.3)
Tax and other payables (50.8) (1.9) (2.8) (0.5) (56.0)
Finance lease obligations (3.7) (4.4) (13.4) (65.9) (87.4)
Derivatives payments (103.8) (105.9) (279.6) (31.8) (521.1)
Derivative receipts 19.4 28.1 187.6 33.8 268.9
-------- -------- ---------- ---------- -----------
(228.5) (185.3) (1,655.4) (1,212.7) (3,281.9)
======== ======== ========== ========== ===========
Company 2011
Within
1 1-2 3-5 Over 5
year years years years Totals
GBPm GBPm GBPm GBPm GBPm
Borrowings (including
interest) (1.8) (27.7) - - (29.5)
Tax and other payables (4.5) (0.9) (2.4) - (7.8)
------- ------- ------- ------- -----------
(6.3) (28.6) (2.4) - (37.3)
======= ======= ======= ======= ===========
Company 2010
Within Over
1 1-2 3-5 5
year years years years Totals
GBPm GBPm GBPm GBPm GBPm
Borrowings (including
interest) (1.8) (1.8) (27.8) - (31.4)
Tax and other payables (4.8) (1.7) (2.8) (0.4) (9.7)
------- ------ ------- ------ ---------
(6.6) (3.5) (30.6) (0.4) (41.1)
======= ====== ======= ====== =========
Credit risk
Credit risk is the risk of financial loss if a tenant or
counterparty fails to meet an obligation under a contract. Credit
risk arises primarily from trade receivables relating to tenants
but also from the Group's holdings of assets with counterparties
such as cash deposits, loans and derivative instruments.
Credit risk associated with trade receivables is actively
managed; tenants are managed individually by asset managers, who
continuously monitor and work with tenants, anticipating and,
wherever possible, identifying and addressing risks prior to
default.
Prospective tenants are assessed via a review process, including
obtaining credit ratings and reviewing financial information which
is conducted internally. As a result deposits or guarantors may be
obtained. The amount of deposits held as collateral at 31 December
2011 is GBP2.2 million (2010 GBP2.2 million).
Due to the nature of tenants being managed individually by asset
managers, it is Group policy to calculate any impairment
specifically on each tenant receivable balance.
The ageing analysis of the Group's trade receivables is as
follows:
Group Group
2011 2010
GBPm GBPm
Up to three months 11.2 11.0
Three to six months 0.9 2.7
Trade receivables 12.1 13.7
===== =====
At 31 December 2011 trade receivables are shown net of provision
totalling GBP3.8 million (2010 GBP2.5 million)
The credit risk relating to cash, deposits and derivative
financial instruments is actively managed by the Group's treasury
department. Relationships are maintained with a number of tier one
institutional counterparties, ensuring compliance with Group policy
relating to limits on the credit ratings of counterparties (between
BBB+ and AAA).
Excessive credit risk is avoiding through adhering to authorised
limits for all counterparties.
Classification of financial assets and liabilities
The table below sets out the Group's accounting classification
of each class of financial assets and liabilities, and their fair
values at 31 December 2011 and 31 December 2010.
The fair values of quoted borrowings are based on the ask price.
The fair values of derivative financial instruments are determined
from observable market prices or estimated using appropriate yield
curves at 31 December each year by discounting the future
contractual cash flows to the net present values.
Gain/(loss)
Carrying Fair to income
value value statement
2011 GBPm GBPm GBPm
Derivative financial
instrument assets - - -
---------- ---------- ------------
Total held for trading assets - - -
---------- ---------- ------------
Trade and other receivables 126.1 126.1 -
Cash and cash equivalents 34.4 34.4 -
---------- ---------- ------------
Total cash and receivables 160.5 160.5 -
Derivative financial instrument
liabilities (273.2) (273.2) (28.9)
---------- ---------- ------------
Total held for trading liabilities (273.2) (273.2) (28.9)
---------- ---------- ------------
Trade and other payables (898.7) (898.7) -
Borrowings (2,695.0) (2,423.0) -
---------- ---------- ------------
Total loans and payables (3,593.7) (3,321.7) -
========== ========== ============
Gain/(loss)
Carrying Fair to income
value value statement
2010 GBPm GBPm GBPm
Derivative financial instrument
assets 4.6 4.6 -
---------- ---------- ------------
Total held for trading assets 4.6 4.6 -
---------- ---------- ------------
Trade and other receivables 117.7 117.7 -
Cash and cash equivalents 87.4 87.4 -
---------- ---------- ------------
Total cash and receivables 205.1 205.1 -
---------- ---------- ------------
Derivative financial instrument
liabilities (251.0) (251.0) (33.4)
---------- ---------- ------------
Total held for trading liabilities (251.0) (251.0) (33.4)
---------- ---------- ------------
Trade and other payables (1,090.3) (1,090.3) -
Borrowings (2,673.3) (2,410.5) -
---------- ---------- ------------
Total loans and payables (3,763.6) (3,500.8) -
========== ========== ============
Capital structure
The company is a wholly owned subsidiary of Capital Shopping
Centres Group PLC and owns the majority of Capital Shopping Centres
Group PLC's property investments.
The company's capital structure has been designed to ensure an
appropriate balance is achieved between permitting all subsidiary
companies to operate effectively and allowing the ultimate parent
company the ability to allocate capital across the larger group in
a flexible and efficient manner. The Group uses a mix of equity,
third party and intergroup debt to achieve these aims.
The only financial assets and liabilities of the company
recognised at fair value are derivative financial instruments.
These are all held at fair value through profit or loss and are
categorised as level 2 in the fair value hierarchy as explained
below.
Fair value hierarchy
Level 1: valuation based on quoted market prices traded in
active markets.
Level 2: valuation techniques are used, maximising the use of
observable market data, either directly from market prices or
derived from market prices.
Level 3: where one or more inputs to valuation are not based on
observable market data. Valuations at this level are more
subjective and therefore more closely managed, including
sensitivity analysis of inputs to valuation models. Such testing
has not indicated that any material difference would arise due to a
change in input variables.
23. Share capital
Share capital
GBPm
Issued and fully paid
At 31 December 2011 and 2010 - 394,651,178 ordinary
shares of
50p each 197.3
==============
The concept of authorised share capital was abolished by the
Companies Act 2006 with effect from 1 October 2009.
Under saving provisions, the current maximum number of shares
which may be issued by the company is 600,000,000 ordinary shares
of 50p each.
24. Cash generated from operations
Group Group Company Company
2011 2010 2011 2010
GBPm GBPm GBPm GBPm
Profit before tax 52.3 474.0 18.5 125.5
Adjustments for:
Revaluation and sale of
investment and development
property (30.0) (479.0) - -
Amortisation of lease incentives
and other direct costs (0.2) (1.2) 1.0 0.5
Impairment of investments in
group companies - - 10.9 (95.9)
Finance costs 164.7 173.1 63.8 63.8
Finance income (2.8) (2.3) (64.4) (56.0)
Other finance costs 42.3 50.6 - -
Impairment of goodwill - 3.1 - -
Change in fair value of derivative
financial instruments 28.9 33.4 - -
Changes in working capital:
Change in trading property 6.5 4.5 - -
Change in trade and other
receivables (11.0) (27.4) (0.5) (130.0)
Change in trade and other
payables (8.6) 159.6 (82.1) 150.3
------- -------- -------- --------
Cash generated from
operations 242.1 388.4 (52.8) 58.2
======= ======== ======== ========
25. Directors' emoluments
The aggregate emoluments of the directors were GBPnil (2010
GBP1,388,694).
The highest paid director received aggregate emoluments of
GBPnil (2010 GBP532,798).
As highlighted in note 26, employees, including directors, are
contracted with a related company, CSC Management Services Limited,
and the salary and related costs are shown in the accounts of CSC
Management Services Limited.
26. Employees information
At 31 December 2011 the number of persons employed was 71 (2010
nil). The average number of employees during the year was 16 (2010
1).
UK salaried employees are contracted with a related company, CSC
Management Services Limited, and the salary and related costs are
shown in the accounts of CSC Management Services Limited. One
company within the Group company employs individuals on behalf of
other companies in the wider Capital Shopping Centres Group PLC
group.
Costs of individuals employed by Group companies are.
2011 2010
GBPm GBPm
Wages and salaries 0.5 -
Social security costs - -
Pension contributions - -
---- ----
0.5 -
==== ====
27. Pensions
The company participates in Group pension arrangements as
disclosed in the notes to the report and accounts of Capital
Shopping Centres Group PLC, the ultimate parent company. Pension
costs, representing contributions payable by the company to the
Group pension arrangements, totalled GBP16,000 (2010 GBP89).
28. Capital commitments
At 31 December 2011 the Group was contractually committed to
GBP32.4 million (2010 GBP86.2 million) of future expenditure for
the purchase, construction, development and enhancement of
investment property. The majority of this is expected to be spent
in 2012.
29. Business combinations
Acquisition of Broadmarsh
On 1 December 2011 the Group acquired a 100% interest in The
Broadmarsh Retail Limited Partnership for an initial cash
consideration of GBP72.8 million. In March 2012 the final
consideration was subsequently adjusted for the agreed net assets
value of the business at 1 December 2011 which resulted in a
reduction to the purchase price of GBP2.6 million. The fair value
of the consideration is therefore assessed as GBP70.2 million.
Exceptional administration costs of GBP3.3 million associated with
the acquisition have been recognised in the income statement.
The Broadmarsh Retail Limited Partnership owns and manages the
Broadmarsh shopping centre, Nottingham.
The fair value of assets and liabilities acquired is set out in
the table below.
Fair value
Book value adjustment Fair value
GBPm GBPm GBPm
Investment and development
property 63.9 1.1 65.0
Trade and other receivables 1.6 (1.1) 0.5
Trade and other payables (4.1) - (4.1)
----------- ----------- -----------
Net assets 61.4 - 61.4
----------- ----------- -----------
Fair value of consideration paid 70.2
-----------
Goodwill recognised on acquisition 8.8
===========
The fair value of the consideration exceeds the fair value of
the assets and liabilities acquired and as a result goodwill of
GBP8.8 million is recognised in the balance sheet on acquisition.
This goodwill represents future cash flows which the Group expects
to receive as a result of the acquisition.
During the year the acquired business contributed GBP0.3 million
to the revenue of the Group and GBP0.1 million to the profit for
the year. Had the acquisition taken place at 1 January 2011 the
revenue of the Group for the year would have been GBP397.9 million
and the profit for the year would have been GBP71.6 million.
30. Disposal of group company
On 30 September 2011 the Group disposed of its interest in CSC
Potteries Limited to another Capital Shopping Centres Group PLC
company for consideration of GBP29.8m which was equal to the net
assets sold and so resulted in a nil gain on disposal. The value of
assets and liabilities disposed of is set out in the table
below.
GBPm
Investment and development property 196.2
Trade and other receivables 3.8
Trade and other payables (170.2)
--------
Net assets 29.8
Consideration received 29.8
--------
Profit on disposal of group company -
========
31. Key management compensation
2011 2010
GBPm GBPm
Salaries and short-term employee benefits - 1.5
Pensions and other post-employment benefits - 0.1
Share based payment - 0.2
Long term incentives - -
Termination benefits - 0.2
------ -----
- 2.0
=============================================================== =====
As highlighted in note 26, key management are contracted with a
related company, CSC Management Services Limited, and the salary
and related costs are shown in the accounts of CSC Management
Services Limited.
32. Related party transactions
Transactions between the company and its subsidiaries, which are
related parties, have been eliminated on consolidation for the
Group.
Group
Transactions between the Group and related companies are shown
below:
Nature of 2011 2010
Related company transaction GBPm GBPm
Liberty International Group Interest receivable 2.3 2.2
Treasury Limited Interest payable 31.1 36.2
Company
Transactions between the parent company and its subsidiaries and
related companies are shown below:
Nature of 2011 2010
Subsidiary transaction GBPm GBPm
CSC Bromley Limited Interest receivable 2.6 2.1
CSC Harlequin Limited Interest receivable 16.3 14.9
CSC Lakeside Limited Interest receivable 21.4 20.7
CSC Metrocentre Limited Interest receivable 20.1 18.0
CSC Potteries Limited Interest receivable - 2.6
WRP Management Limited Interest receivable 0.5 0.3
Whitesun Limited Interest receivable 0.2 0.1
Xscape Braehead Partnership Interest receivable 0.6 0.5
Braehead Glasgow Limited Interest payable 0.8 2.1
Braehead Park Estates Limited Interest payable 1.1 0.9
CSC Properties Limited Interest payable 44.9 42.1
The Metrocentre Partnership Interest payable 3.1 3.4
CSC Uxbridge (Jersey) Limited Interest payable - 1.0
Dividend receivable - 66.0
Braehead Glasgow Limited Dividend receivable - 10.0
Braehead Park Investments Limited Dividend receivable - 2.8
Nature of 2011 2010
Related company transaction GBPm GBPm
Liberty International Group Interest receivable 2.3 2.2
Treasury Limited Interest payable 31.1 36.2
Group
Balances outstanding between the Group and related companies are
shown below:
Amounts owed Amounts owed
by related to related
companies companies
2011 2010 2011 2010
Related company GBPm GBPm GBPm GBPm
Capital Shopping Centres Group
PLC - - (2.2) (5.1)
Liberty International Group
Treasury Limited - - (711.8) (921.3)
CSC Payments Limited 5.0 -
CSC Potteries Limited - - (4.1) -
CSC Trafford Centre Group (UK)
Limited 2.5 - - -
Company
Significant balances outstanding between the parent company and
its subsidiaries and related companies are shown below:
Amounts owed Amounts owed
by subsidiary to subsidiary
2011 2010 2011 2010
Subsidiary GBPm GBPm GBPm GBPm
Belside Limited 135.7 134.8 - -
Braehead Glasgow Limited - - (5.4) (8.1)
Braehead Park Estates Limited - - (18.6) (17.8)
Broadway Retail Leisure Limited 11.1 10.9 - -
Chapelfield LP Limited - - (10.1) (14.0)
Chelmsford Property Investments
Limited - 2.6 -
Cribbs Causeway JV Limited - - (7.4) (5.9)
CSC Braehead Leisure Limited 8.1 7.9 - -
CSC Bromley Limited 44.1 37.3 - -
CSC Chapelfield Residential Limited 7.3 7.3 - -
CSC Enterprises Limited 2.8 2.8 - -
CSC Harlequin Limited 273.0 252.2 - -
CSC Lakeside Limited 350.3 346.8 - -
CSC Metrocentre Limited 331.5 304.7 - -
CSC Nottingham Investments Limited 76.4 - -
CSC Potteries Limited - 174.2 - -
CSC Properties Investment Limited - - - (48.1)
CSC Properties Limited - - (752.3) (702.1)
CSC The Hayes Limited 387.9 383.7 - -
CSC Uxbridge (Jersey) Limited 2.2 5.3 - -
Curley Limited 201.6 201.2 - -
Manchester JV Limited - - (10.5) (8.2)
Westgate Oxford Investments Limited - 16.9 (7.1) -
Whitesun Limited 2.6 2.4 - -
WRP Management Limited 8.0 8.1 - -
Xscape Braehead Partnership 9.9 9.4 - -
Amounts owed Amounts owed
by related to related
company company
Related company 2011 2010 2011 2010
GBPm GBPm GBPm GBPm
Capital Shopping Centres Group
PLC - - (2.2) (5.1)
Liberty International Group
Treasury Limited - - (824.8) (921.0)
CSC Potteries Limited - - (4.1) -
CSC Trafford Centre Group (UK)
Limited 2.5 - - -
33. Contingent liabilities
As at 31 December 2011, the Group has no material contingent
liabilities other than those arising in the normal course of
business.
34. Ultimate parent company
The immediate and ultimate parent company is Capital Shopping
Centres Group PLC, a company incorporated and registered in England
and Wales, copies of whose consolidated financial statements may be
obtained from the Company Secretary, 40 Broadway, London, SW1H
0BT.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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