RNS Number:1725Z
Off-Plan Fund Limited (The)
28 June 2007
For Immediate Release 28 June 2007
The Off-plan Fund Limited
Interim Results for the six months ending 31 March 2007
The Off-plan Fund Limited, which specialises in providing forward finance to UK
housebuilders, is pleased to announce its interim results for the period to 31
March 2007.
The Fund is managed by Development Capital Management (Jersey) Limited.
Copies of the Financial Statements are currently being printed and will be sent
to shareholders shortly. They may also be obtained free of charge from
Development Capital Management Limited, 84 Grosvenor Street, London, W1K 3JZ.
List of Contacts
Development Capital Management
Roger Hornett
Andy Gardiner
020 7355 7600
Numis Securities
Iain McDonald
Bruce Garrow
020 7260 1000
Buchanan Communications
Charles Ryland
Isabel Podda
020 7466 5000
Chairman's Statement
The key events in the six months to 31 March 2007 for the Fund were the
investments in two sites in the Home Counties, the exchange of half of the units
at the Oldham Place site in Liverpool and the exit from the investment in
Nottingham. This was followed shortly after the period end by a capital increase
and share issue to Elsina, a company ultimately owned by the Tchenguiz family
trust.
Portfolio
At the period end the Fund held contracts in respect of 113 units in Liverpool
and the Home Counties and owned six units in Leicester. Of the 51 contracts in
Liverpool 26 have been assigned to end buyers and 8 are under offer. Marketing
of the units at Tring and Hayes has yet to commence. The independent Red Book
valuation for the entire property portfolio at the end of March was #23.1m.
At Oldham Place in Liverpool, building work has now commenced with the
foundations underway and the site on track for completion in December 2008. At
the period end the 26 units which have been sold had a sales value of #4.2m and
8 units worth #1.2m are under offer. The expected return on all these units
before costs is estimated to be #293,000 on a deposit of #217,000. A number of
offers on the remaining 17 units have been received by the Manager. However none
of these have as yet been at sufficiently attractive prices, which we expect to
rise as the development progresses.
In the rental sector Liverpool continues to perform well, as the appetite for
city centre living continues to expand. The impact of higher capital values in
the purchase market has lead to potential first time buyers renting for longer
periods prior to purchasing and rental values remain buoyant, especially below
the #1,000pcm segment.
At the time of writing, all of the six units the Fund owns at Wimbledon House in
Leicester have now been let. Given the current weak sales conditions in
Leicester, particularly for buy-to-let apartments, the Fund intends to hold and
let for the foreseeable future. The stock has been financed from the Fund's cash
reserves and may be refinanced should the need arise.
Towards the end of the period the Fund made two further investments both in the
Home Counties. The first in Tring, Hertfordshire is a development consisting of
38 new-build two bedroom apartments over
a total of 26,860 square feet with parking. A number of units may fall under the
s106 affordable housing requirement and the Fund has arranged the right to
rescind any of these contracts should it wish to.
The site is located near Brook Street; within half a mile of Tring town centre,
approximately 15 miles north of Watford and 40 minutes commute by train into
London Euston station. Aging stock in Tring remains the limiting factor in the
rental market and the Manager anticipates that the Brook Street
development will offer a product appealing to both buyers and tenants alike.
The agreed purchase price is #218 per square foot (a total of #5.9m) on
completion, a discount of 27.1% to the Red Book valuation provided by
independent valuers, Douglas Duff, of #299 per square foot (#8.0m). Construction
at the site is expected to commence over the summer and take 12 to 18 months.
The second investment with the same developer is at a proposed development in
Hayes, Middlesex. The Fund has agreed to purchase 31 apartments with parking,
comprising 18,063 square feet. The site has good commuting links being close to
the M4, M40 and Heathrow Airport together with easy rail and underground links
to central London.
The rental market in the area remains strong. Continual demand for all property
types being driven by high profile companies located in several business parks
nearby and by the ongoing development of terminal 5 at Heathrow.
The agreement, conditional upon the Developer obtaining planning permission, is
for the Fund to pay #253 per square foot (#4.6m) on completion. This represents
a discount of 31.6% to the Red Book valuation of #393 per square foot (#7.1m)
also provided by Douglas Duff. Construction of the development is expected to
commence later in the year, once all preconditions are satisfied, and take 18
months.
Performance
The NAV over the six months has reported a moderate increase to 84.6p from 83.4p
as the sales from Oldham Place exchanged, hampered a little from the declining
Red Book valuation on the units in Leicester. The Red Book based portfolio
valuation, which gives investors a better indication of the value inherent in
the portfolio from the discounted purchase prices has risen 13% from 88.1p to
99.3p at the period end due to the significant discounts achieved on the units
purchased at Tring and Hayes. It is disappointing to note the lack of movement
in the Fund's share price, particularly following the faith shown by Elsina in
increasing its holding to 20%.
Market
The UK residential property market continued to show resilience in the six month
period despite the two 25 basis point increases in interest rates to 5.25% in
November and January. A further rise to 5.50% since the end of the period has
also yet to make itself felt, although there are signs particularly in the
mortgage market, that demand may be tailing off.
The market in the early part of 2007 remained robust, with the Land Registry
reporting year on year growth of 8.3% for the end of March, nearly twice the
growth reported at the same time a year ago and average monthly volumes rose 10%
year on year to 96,994 for the period ending February 2007 (the latest available
figures). Prices in London continue to outstrip growth seen elsewhere and at end
March were 11.6% ahead, with strong demand both from abroad and the "City". All
regions reported positive growth, with the East Midlands and the North East the
weakest at 4.7% and 5.7% respectively. This gap appears to be widening as London
and the South East continue to grow whilst other regions slip back in line with
the forecast average for 2007.
Buy-to let-demand remains solid, despite average rental yields falling to 6.0%
at the end of December 2006, with RICS reporting tenant demand up 30% in the 3
months to the end of January. Buy-to-let loans now represent 11% of all mortgage
lending and are expected to continue to grow strongly according to Mintel, who
forecast the number of landlords doubling over the next three years. This is
likely to be driven more by fundamentals, as at current interest rate levels
buy-to-let mortgages are no longer self-financing.
The immediate outlook is a little uncertain in the light of the muddled
introduction of Home Information Packs (HIPs). Many observers believe this has
led to a dash both to buy and to sell ahead of the original June 1st deadline,
forcing prices to levels which may not be sustainable. With the postponement of
HIPs until August for properties with four or more bedrooms only, the effect on
stock currently in the market
remains to be seen.
The other uncertainty is obviously the impact of recent interest rate increases,
which take between 12 and 18 months to have any meaningful impact on demand.
Whilst fundamental demand continues to
exceed supply, such uncertainty should not become an issue.
Capital Increase
Shortly after the period end the Fund issued a further 1,858,850 shares at a
price of 95p per share, increasing the number of issued shares by 20%. The issue
price compared with the end of December 2006 Red Book NAV of 87p and the
prevailing share price of 84p.
The issue was made exclusively to Elsina Limited, a company owned by the
trustees for the Tchenguiz Family and advised by Consensus Business Group (CBG).
The new shares increase Elsina's holding from 4.3% to 20.3% of the Fund, and the
Board has agreed to accepting a representative from CBG on to the Board.
In addition to the capital increase CBG bring a number of complementary areas of
activity particularly the group's involvement in mortgage provision, estate
agency and ground rents.
Outlook
The Manager currently has a sizable number of new investments at varying stages
of analysis and is working hard to bring these to fruition. The closer
relationship with CBG should add to the Fund's offering to both developers and
end buyers and can only increase the Fund's opportunities. Over the period a
number of developers have been including the financing model offered by the Fund
as an integral part of their site appraisal and we would hope that as the
results of these appear further investment can be committed.
Graham Berry
Chairman
June 2007
Consolidated Balance Sheet
As at 31 March 2007
As at As at As at
31 March 31 March 30 September
2007 2006 2006
Non-current assets Notes # # #
Quoted investments 4 5,666,608 7,351,126 5,941,738
Property contracts yet to 4 172,806 362,905 336,602
complete
Investment property 4 971,000 - 1,025,000
6,810,414 7,714,031 7,303,340
Current assets
Debtors 530,815 127,835 366,419
Cash and cash equivalents 593,145 147,350 136,200
1,122,635 275,185 502,619
Creditors - amounts falling due
within one year
Other payables (73,978) (79,243) (54,826)
Net current assets 1,049,982 195,942 447,793
Total net assets 7,860,396 7,909,973 7,751,133
Equity
Stated capital 8,739,246 8,739,246 8,739,246
Realised capital reserve 128,456 2,232 (108,348)
Unrealised capital reserve (60,856) (18,489) (51,719)
Investment property - - 42,107
revaluation reserve
Issue costs reserve (609,232) (609,232) (609,232)
Revenue reserve (337,218) (203,784) (260,921)
Total shareholders' funds (all 7 7,859,071 7,909,973 7,751,133
equity)
Net asset value per share 84.57 85.11 83.40
(pence)
The financial statements were approved by the Board of Directors on 26 June 2007
and signed on its behalf by:
Graham Berry
Consolidated Income Statement
For the six months ended 31 March 2007
Six months ended Six months ended Year ended
31 March 2007 31 March 2006 30 September 2006
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes # # # # # # # # #
Realised gains/ - 238,645 238,645 - - - - (109,308) (109,308)
(losses) on
property
contracts yet to
complete
Deficit on (11,893) - (11,893) - - - - - -
investment
property
Realised losses - (1,841) (1,841) - - - - - -
on investments
Unrealised - (9,137) (9,137) - (30,943) (30,943) - (65,445) (65,445)
losses on
investments
Income 145,995 - 145,995 109,433 - 109,433 269,039 - 269,039
Investment (74,228) - (74,228) (41,298) - (41,298) (119,196) - (119,196)
management fee
Other expenses (136,171) - (136,171) (75,219) - (75,219) (214,064) - (214,064)
Net (loss)/gain (76,297) 227,667 149,999 (7,084) (30,943) (38,027) (64,221) (174,753) (238,974)
on ordinary
activities
before
finance costs
and taxation
Net (loss)/gain 2 (76,297) 227,667 149,999 (7,084) (30,943) (38,027) (64,221) (174,753) (238,974)
for the period
before and after
taxation
(Loss)/gain per (0.82) 2.45 1.63 (0.11) (0.49) (0.60) (0.82) (2.23) (3.05)
share (pence)
Notes
(a) The total column of this statement represents the profit and loss of the
Company and the Group.
(b) All items in the above statement derive from continuing operations.
(c) The Company has no recognised gains or losses other than those disclosed in
the Income Statement and Reconciliation of Movements in Shareholders' Funds.
Consolidated Cash Flow Statement
For the six months ended 31 March 2007
For the six For the six For the six
months months months ended
ended ended
31 March 31 March 30 September
2007 2006 2006
Cash flows from operating
activities
Investment income received 244,863 (17,612) 96,408
Rental income received 1,371 - -
Deposit interest received 6,792 44,350 46,185
Investment management fees paid (74,228) (41,298) (119,196)
Secretarial fees paid (19,513) (1,691) (3,651)
Other cash payments (132,066) (42,088) (190,818)
Net cash inflow/(outflow) from 27,219 (58,339) (171,072)
operating activities
Capital expenditure and investment
activities
Deposits and acquisition costs - - (1,258,442)
relating to property
Proceeds from sale of property 183,777 - -
contracts
Purchase of investments (905,749) (6,252,812) (6,253,664)
Sale of investments 1,151,698 149,492 1,510,369
Net cash inflow/(outflow) from 429,726 (6,103,320) (6,001,737)
investment activities
Net cash inflow/(outflow) before 456,945 (6,161,659) (6,172,809)
financing
Financing
Issue of shares - 6,769,246 6,769,246
Expenses of share issue - (609,232) (609,232)
Net cash inflow from financing - 6,160,014 6,160,014
Increase/(decrease) in cash 456,945 (1,645) (12,795)
Consolidated Statement of Total Recognised Gains and Losses
As at 31 March 2007
As at As at As at
31 March 31 March 30
2007 2006 September
2006
# # #
Gain/(loss) for the financial period 149,999 (38,027) (238,974)
(Loss)/gain on revaluation of investment (42,107) - 42,107
properties
Total gains and losses recognised since 107,892 (38,027) (196,867)
last annual report
The Group has no other recognised gains or losses that are not shown in the
income statement.
Reconciliation of Movements in Shareholders' Funds
For the six months ended 31 March 2007
Stated Capital Investment Issue Revenue Total
caital reserves costs reserve
property reserve
revaluation
reserve
# # # # # #
For the six months ended 31 March 2007
At 1 October 2006 8,739,246 (160,067) 42,107 (609,232) (260,921) 7,751,133
Revaluation of - - (42,107) - (11,893) (54,000)
investment
property
Gain/(loss) for - 227,667 - - (64,404) 163,263
the period
At 31 March 2007 8,739,246 67,600 - (609,232) (337,218) 7,860,396
For the six months ended 31 March 2006
At 1 October 2005 1,970,000 14,686 - - (196,700) 1,787,986
Issue of shares 6,769,246 - - - - 6,769,246
Expenses of share - - - (609,232) - (609,232)
issue
Loss for the - (30,943) - - (7,084) (38,027)
period
At 31 March 2006 8,739,246 (16,257) - (609,232) (203,784) 7,909,973
For the year ended 30 September 2006
At 1 October 2005 1,970,000 14,686 (196,700) 1,787,986
Issue of shares 6,769,246 6,769,246
Expenses of share (609,232) (609,232)
issue
(Loss)/gain for (174,753) 42,107 (64,221) (196,867)
the year
At 30 September 8,739,246 (160,067) 42,107 (609,232) (260,921) 7,751,133
2006
The accompanying notes are an integral part of the financial statements.
Notes to the Consolidated Financial Statements
For the six months ended 31 March 2007
1 Accounting policies
The financial statements have been prepared under the historical cost
convention, as mdified to include the revaluation of quoted investments and
investment properties and in accordance with applicable Accounting Standards and
the Statement of Recommended Practice for "Financial Statements of Investment
Trust Companies" issued in January 2003 and amended in December 2005. For the
accounting period beginning on 1 October 2004 the Company had the option to
prepare its financial statements in accordance with International Financial
Reporting Standards (IFRS), as adopted by the International Accounting Standards
Board (IASB). The Board has elected to continue to adopt UK Generally Accepted
Accounting Principles (UK GAAP) and therefore with the new Financial Reporting
Standards issued as part of the programme to converge UK GAAP with IFRS.
(a) Basis of consolidation
The financial statements incorporate the financial statements of the Company and
entities controlled by the Company (its subsidiaries) made up to 31 March.
Control exists when the Company has the power, directly or indirectly, to govern
the financial and operating policies of an entity so as to obtain benefits from
its activities. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences up to the
date that control ceases.
(b) Income
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount. Interest receivable
on cash and short-term deposits is accrued to the end of the financial year.
(c) Rental income
Rental income from investment properties is based on a short term tenancy
agreement and is recognised in the period earned. Property operating costs are
expensed as incurred including any element of expenditure not recovered from
tenants.
(d) Quoted investments
Purchases of investments are recognised on a trade date basis and included in
the balance sheet at fair value. Sales of investments are also recognised on a
trade date basis. Proceeds are measured at fair value, which is regarded as the
proceeds of any sale less any transaction costs. The fair value of the financial
instruments is based on their quoted bid prices at the balance sheet date,
without any deduction for any estimated future selling costs. Changes in the
value of investments and gains and losses on disposal are recognised in the
income statement as "gains/losses on investments" and are allocated to realised/
unrealised capital reserves as appropriate.
(e) Property contracts yet to complete
The Company has contractual obligations to purchase property that is currently
being constructed, i.e. it has entered into contracts to purchase the property
"off-plan". Under these contracts the Company is obliged to purchase these
properties at a contracted price, but has the right to sell or transfer the
contract to a third party. The "Property contracts yet to complete" are included
in the balance sheet at the lower of cost and net realisable value. Cost
includes legal and other expenses incurred to acquire the contracts. The
Directors are of the opinion that it is inappropriate to account for these
contracts using fair value accounting methods because their fair value cannot be
estimated with sufficient reliability. Realised gains and losses arising on the
disposal of these contracts are taken to the realised capital reserve.
(f) Investment property
Investment properties are measured initially at cost, and subsequently
remeasured to market value, reflecting market conditions at the balance sheet
date. Gains or losses arising from the changes in fair values of investment
properties are included in the consolidated statement of recognised gains and
losses, as movements on the investment property revaluation reserve. Deficits
arising from valuations are eliminated against any revaluation reserves in
respect of that property with any excess, to the extent that it represents an
impairment, being charged to the profit and loss account.
2 Returns per share
The revenue return per share is based on the net loss for the period of #76,297
(March 2006: (#7,084); September 2006: (#64,221)) and on 9,294,248 shares (March
2006: 6,356,500; September 2006: 7,829,398), being the weighted average number
of shares in issue.
The capital return per share is based on the net gain for the period of #227,667
(March 2006: loss of #30,943; September 2006: loss of #174,753) and on 9,294,248
shares (March 2006: 6,356,500; September 2006: 7,829,398), being the weighted
average number of shares in issue.
3 Management fee
Six months Six months Year ended
ended ended 30 September
31 March 2007 31 March 2006 2006
# # #
Management fee 74,228 41,298 119,196
The management fee paid to Development Capital Management (Jersey) Limited (DCM)
is 2% per annum of the net asset value of the fixed income portfolio held by the
Company, plus any cash amount of deposits paid and outstanding in respect of
property contracts yet to complete. The management agreement between the Company
and DCM is terminable by either party on 12 months notice.
4 Quoted Investments
Six months Six months Six months
ended ended ended
31 March 2007 31 March 2006 30 September
2006
# # #
Opening valuation 5,941,738 1,280,973 1,280,973
Opening unrealised appreciation 51,719 (13,116) (13,116)
Opening book cost 5,993,457 1,267,857 1,267,857
Movements during the period:
Purchases 895,425 6,253,664 6,253,664
Sales - proceeds (1,148,640) (150,344) (1,510,369)
Amortisation of fixed income (10,938) (2,224) (17,085)
book costs
Sales - realised gains (1,841) 662 (610)
Closing book cost 5,727,463 7,369,615 5,993,457
Closing unrealised appreciation (60,855) (18,489) (51,719)
Closing valuation 5,666,608 7,351,126 5,941,738
Six months Six months Six months
ended ended ended
31 March 2007 31 March 2006 30 September
2006
# # #
Property contracts yet to
complete
Opening book cost 336,602 362,905 362,905
Movements during the period
Purchases 5,875 - 336,602
Reclassification to Investment - - (58,689)
Properties
Sales - proceeds (169,671) (194,908)
Sales - realised losses (109,308)
Closing book cost 172,806 362,905 336,602
The book costs above refer to Oldham Place, Liverpool (51 apartments).
The table below summarises the costs incurred to date with these contracts and
applies the 'Red Book' valuation, prepared by independant valuers at 31 March
2007, of the underlying properties as a basis of valuation for these contracts.
The 'Red Book' value may not represent the 'fair value' of the contracts as
explained in the 'market price risk' section of note 8.
Waterfront Oldham Yeading Brook Total
Plaza Place Lane Hayes Street
Tring
# # # # #
Deposits paid 217,906 336,602 - - 554,508
Legal and acquisition 86,310 - 2,938 2,938 92,185
costs
Proceeds on disposal (194,908) (169,671) - - (364,579)
Loss on disposal (109,308) - - - (109,308)
Book cost as at 31 - 166,931 2,938 2,938 172,806
March 2007
Outstanding completion 3,135,000 3,135,000
payments
Total historic cost 3,301,931 2,938 2,938 3,307,806
Red Book' valuation NA 8,250,000 7,100,000 6,780,889 22,130,889
Approximate completion NA Dec 2008 Jun 2009 Dec 2008
date
Investment property
31 March 2007 31 March 2006 30 Sept 2006
# # #
Opening book cost 982,893 - -
Movements during the - - -
period:
Reclassification from - - 58,689
properties yet to
complete
Completion payment - - 924,204
Closing book cost 982,893 - 982,893
Closing unrealised (11,893) - 42,107
appreciation
Closing valuation 971,000 - 1,025,000
5 Stated Capital
31 March 31 March 30 Sept
2007 2006 2006
Authorised:
The Company is a no par value
('NPV') company
Founder shares 10 10 10
99,999,990 participating shares 99,999,990 99,999,990 99,999,990
100,000,000 100,000,000 100,000,000
Issued:
Founder shares 2 2 2
Participating shares 9,294,248 9,294,248 9,294,248
Post balance sheet events
On 17 April 2007, 1,858,850 participating shares were issued at 95p raising
proceeds of #1,765,908.
6 Transaction costs
There were no transaction costs charged to the Company during the period. A
one-off
fee, including brokerage costs, is charged by the custodian to the Manager.
7 Net asset value per share
Net asset value
attributable per share
31 March 2007 31 March 2006 30 September 2006
p p p
Participating 84.56 85.11 83.40
shares
Net asset value
31 March 2007 31 March 2006 30 September 2006
# # #
7,860,396 7,909,973 7,751,133
8 Financial instruments
The Company's financial instruments comprise fixed interest securities, cash
balances and debtors and creditors that arise directly from its operations, for
example, in respect of sales and purchases awaiting settlement, and debtors for
accrued income. The property contracts yet to complete are not 'financial
instruments' but appropriate disclosures have been given below. The main risks
the Company faces from its financial instruments are (i) market price risk,
being the risk that the value of investment holdings will fluctuate as a result
of changes in market prices caused by factors other than interest rate or
currency movement, (ii) credit risk, (iii) interest rate risk and (iv) liquidity
risk. The Board regularly reviews and agrees policies for managing each of these
risks. The Manager's policies for managing these risks are summarised below and
have been applied throughout the period. The numerical disclosures exclude
short-term debtors and creditors.
Market price risk
Market price risk arises mainly from uncertainty about future prices of
financial instruments used in the Company's operations. It represents the
potential loss the Company might suffer through holding market positions as a
consequence of price movements. It is the Board's policy to hold a broad spread
of fixed interest investments in the portfolio in order to reduce risk arising
from factors specific to a particular location or sector. The Manager monitors
market prices throughout the year and reports to the Board, which meets
regularly in order to review investment strategy.
The contracts are highly leveraged such that small changes in the values of the
underlying properties can generate large changes in the unrealised values of the
contracts. By way of an example the change in value of a contract using a 5%
deposit could be affected by approximately twenty times the change in value of
the underlying asset.
It is the Board's policy to value each of the property contracts yet to complete
at the lower of cost and net realisable value as set out in note 1(d). This
eliminates to a significant degree the effect of market movements in the
underlying property on the value of the contracts. The total purchase price
including acquisition costs, of the 51 contracts is #6,649,702 and the Red Book
valuation of the properties as at 31 March 2007 is #8,250,000. Should the
Company complete on all the contracts and subsequent Red Book valuations fall by
more than 19%, the Company would then be exposed to any further falls in the
market, as the net realisable values would then be below cost.
Credit risk
As part of the fixed interest portfolio the Company places funds with third
parties and is therefore potentially at risk from the failure of any such third
party of which it is a creditor. The Company expects to place any such funds on
a short-term basis only and spread these over a number of different providers.
The deposits in respect of the property contracts yet to complete are held in
escrow with the developers' solicitors. This money is only released to the
developer on satisfactory completion of the property. Should a developer default
on the contract the deposit and any interest earned would be returned to the
Company.
Interest rate risk
Financial Assets
The interest rate risk profile of financial assets at the balance sheet date was
as follows:
Fixed Interest
31 March 2007 31 March 2006 30 September 2006
# # #
Financial Assets 5,666,608 7,351,126 5,941,738
Property contracts yet
to complete
5,666,608 7,351,126 5,941,738
Floating Rate
31 March 2007 31 March 2006 30 September 2006
# # #
Financial Assets 593,145 147,350 136,200
Property contracts yet
to complete
593,145 147,350 136,200
Non-Interest Bearing
31 March 2007 31 March 2006 30 September 2006
# # #
Financial Assets 172,806 340,933 366,602
Property contracts yet
to complete
172,806 340,933 366,602
All short-term debtors and creditors have been excluded from this disclosure.
The fixed interest assets have a weighted average maturity of 1.2 years (31
March 2006: 1.7 years; 30 September 2006: 1.4 years) and a weighted average
yield of 5.1% (31 March 2006: 5.2%; 30 September 2006: 5.1%) per annum.
The floating rate assets consist of cash deposits on call earning interest at
the prevailing market rates.
Changes in interest rates will impact on the value of fixed interest securities
and future cash flows from floating rate holdings. It will have no impact on the
property contracts yet to complete.
Liquidity risk
The Company's assets mainly comprise cash balances and readily realisable
securities, which can be sold to meet funding commitments if necessary. They
also comprise property contracts yet to complete, which are illiquid. The Board
has the ability to sell on the property contracts yet to complete. However,
should they decide not to, if for example there was insufficient liquidity in
the market, the Company would be liable to pay the remaining commitments set out
in the contracts which is currently #2,948,120.
Contingent liability
The company has entered into conditional contracts to purchase 68 units at sites
in Tring and Hayes. When these conditions are met, deposits totalling #467,337
will become due with a further #8,879,390 due on completion.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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