TIDMOPF
RNS Number : 7169U
Off-Plan Fund Limited (The)
30 June 2009
+-------------------------------------+---------------------------------------------+
| For Immediate Release | 30 June 2009 |
+-------------------------------------+---------------------------------------------+
THE OFF-PLAN FUND LIMITED
Interim Results for the six months ended 31 March 2009
The Off-plan Fund Limited ("the Fund" or "the Company") announces its interim
results for the six months ended 31 March 2009.
Chairman's Statement
In my new role as Chairman, I am pleased to present the unaudited financial
statements for the six months ended 31 March 2009.
The Fund's annual general meeting was held on 29 April 2009 and all resolutions
were duly passed, including the resolution in respect of the Fund continuing to
pursue its existing investment strategy for another 12 months until the next AGM
when shareholders will have another opportunity to vote on a similar resolution.
Performance
The unaudited net asset value ("NAV") of the Fund at 31 March 2009 was GBP9.1
million (30 September 2008: GBP9.1 million). The NAV per ordinary share has
increased to 81.9p at period end from 81.2p at 30 September 2008, largely due to
the revaluation of the investment properties at The Heart in Walton, described
in note 5 to the financial statements.
In respect of the Fund's share price in March 2009 we commented on the
significant discount to NAV per share and there has been little improvement in
the intervening period.
Portfolio Review
The current property portfolio comprises three investments, which are summarised
below:
The Heart, Walton-on-Thames: During the period, the Fund completed the purchase
of 10 one-bedroom apartments with parking in this major regeneration development
project for GBP1.65 million, equating to a 24 per cent. discount to the
prevailing Red Book value. The purchase was in line with the Fund's refocused
investment strategy of purchasing high quality completed units in the Home
Counties and inner M25 markets with good rental prospects which can be held and
let until the sales and mortgage markets improve.
In February 2009, one unit was sold for GBP190,000 (a 10 per cent. profit after
deducting all transaction costs) and further offers have been considered at
around this level. The other units are all currently let at an average annual
yield of 6.2 per cent.
Canon House, Wallington: The Fund's investment adviser is in regular contact
with the developer and has recently been made aware that the developer is having
considerable difficulties with respect to its obligations to its lending bank
and the freehold owner of the site. Indeed, the Fund has today been given
notice that the lending bank, Bank of Scotland Plc, has appointed a receiver
under the Law of Property Act 1925 in respect of its charge over the developer's
leasehold interest in the site. The Fund is in discussions with its advisers
and the board expects to be in a position to make a further announcement in the
near future when it has fully ascertained both the Fund's and the related
parties' rights in respect of the development and the contractual position.
Construction has yet to commence.
Since the period end, the Fund announced that the beneficial owner of the
developer, Mr Nigel Henry, acquired a large stake in the Fund taking his
interest in the Fund's shares to 19.4 per cent.
Wimbledon House, Leicester: The six apartments are currently let, at an average
yield of 4.3%, and have been revalued at GBP764,000 (30 September 2008:
GBP805,000).
During the period the Fund rescinded contracts for the purchase of 51 units in a
development in Oldham Place, Liverpool, further details of which were provided
in the last annual report.
Market
There appears to have been a material change in sentiment towards the UK
residential housing market in the three months since the annual report and
accounts were published and the board believes there is increasing evidence that
the worst may be behind us. Mortgage approvals have risen in each of the last
five months, enquiries are at a ten year high and lenders are gradually
re-introducing more attractive products.
Recently, HBOS, the Nationwide and Rightmove all reported average monthly price
increases for May, allowing the year-on-year rate of house price falls to
decline and indicating that the peak to trough fall may be nearer 20 per cent.
than the more pessimistic forecasts of 35 per cent. Leading estate agents are
currently suggesting that the market is unrecognisable from six months ago and
that most importantly the media has reported positive signs in the last three
months. It would appear that London and its surrounding areas, on which the Fund
has concentrated in the period under review, is leading the recovery.
On a more cautionary note the availability of credit, although better than it
was, remains strained and the level available is a fraction of peak levels.
Mortgage approvals and lending are increasing but well down on their peak levels
and the board believes will take a long time to recover fully, particularly as
fixed rate deals are becoming more expensive.
Outlook
The improving news flow, statistics and signs of returning confidence referred
to above should clearly have a positive impact on the Fund's existing investment
property portfolio, particularly The Heart. It may also prove beneficial on
Wallington if construction does commence in time (with the Fund's long-stop
completion commitment date of January 2012 in mind) as an improving backdrop can
only be helpful to the Fund in terms of securing onward sales.
Perversely the prevailing optimism in the market may prove restrictive to the
Fund's investment advisers in terms of sourcing new investment opportunities as
those previously considered "forced sellers" that fit the Fund's investment
criteria, i.e. suppliers of new build properties, are either given greater
leeway by their lending banks or else simply feel they can hold out for better
deals. Developers in general have slowed down their speed of development to
allow the market to catch-up and preserve cash, which together with other
bulk-buyers entering the market, has increased competition. Unfortunately, the
Fund was unable to add to its portfolio in the months preceding the AGM as there
was material uncertainty as to whether or not shareholders would vote to
continue for another 12 months. However with this situation resolved the Fund's
investment adviser has built up a substantial list of opportunities in the
Fund's target markets and continues to pursue the most attractive pipeline deals
that remain available.
Whilst we hope to be able to announce further news on investment opportunities
in due course, our key priority is resolving the Wallington situation, if at all
possible, in short order.
Board
As previously announced, I am pleased to welcome Donald Reid to the Board and
would also like to take this opportunity to thank Graham Berry for his
significant contribution during his tenure as Chairman and wish him well for the
future.
Roger King
Chairman
29 June 2009
Restated Investing Policy
In accordance with the requirements of the AIM Rules (as revised on 1 June
2009), the Company's investing policy (as derived from the original AIM
admission document dated 1 December 2005) is as follows:
* to seek to generate long-term capital gains for shareholders through the
acquisition, at discounts to their prevailing market values, and onward sale of
a diversified portfolio of UK residential properties either before they are
built ("off-plan") or where recently built but unsold on completion.
* to hold and seek to rent out properties where market conditions dictate.
In respect of "off-plan" purchases the Company will put down a deposit with the
balance payable on completion if no onward sale has been secured, which may take
the form (wholly or partly) of mortgage finance. The Company will typically
agree a profit-share on onward sales with the vendor developer, in return for a
significant discount on the purchase.
In respect of the purchase of recently completed properties the Company may
utilise cash reserves and mortgage finance.
There are no borrowing limits in the Company's articles of association. In
addition to securing mortgage finance on its properties, the Company may also be
highly geared through the effect of purchasing "off-plan" properties by way of
initial deposits, with liability to provide completion monies where properties
are not onsold prior to their completion.
The Company's investing policy is constrained by the following investment
restrictions:
* deposits on properties in a single development must not exceed 20 per cent. of
the value of the gross assets of the Company.
* investment in developments of a single developer must not exceed 30 per cent. of
the value of the gross assets of the Company.
* purchases must be at minimum discount of 10 per cent. to a property's market
value.
* no investment will be made unless the property acquired is suitable for a
letting portfolio.
* no deposit will be paid if, as a result, the total value of deposits in place is
more than two-thirds of the value of the gross assets of the Company.
Enquiries:
Development Capital Management
Roger Hornett
Andy Gardiner
020 7355 7600
John East & Partners Limited, a subsidiary of Merchant Securities Plc
Nominated Adviser
Bidhi Bhoma/Simon Clements
020 7628 2200
Corporate Broking
Graeme Cull
020 7628 2200
Buchanan Communications
Charles Ryland
Isabel Podda
020 7466 5000
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Consolidated Income Statement | | (unaudited) |
+-------------------------------------------------+-------+-----------------------------------+
| | | Six months ended |
+-------------------------------------------------+-------+-----------------------------------+
| | | 31 March 2009 |
+-------------------------------------------------+-------+-----------------------------------+
| | | Revenue | Capital | Total |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| |Notes | GBP | GBP | GBP |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Unrealised gains/(losses) on investment | | - | 209,800 | 209,800 |
| property | | | | |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Profit on off-plan sales or write back on | | - | - | - |
| rescinded sales | | | | |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Realised losses on property contracts yet to | | - | - | - |
| complete | | | | |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Realised gains on investment property | | - | 18,108 | 18,108 |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Realised gains on investments held at fair | | - | 8,907 | 8,907 |
| value through profit or loss | | | | |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Unrealised gains on investments held at fair | | - | 32,132 | 32,132 |
| value through profit or loss | | | | |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Interest income | | 48,186 | - | 48,186 |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Rental income | | 33,920 | - | 33,920 |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Investment management fee | 4 | (92,890) | - | (92,890) |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Rental expenses | | (15,177) | - | (15,177) |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Other expenses | | (160,710) | - | (160,710) |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Net (loss)/gain on ordinary activities before | | (186,671) | 268,947 | 82,276 |
| taxation | | | | |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Taxation | 2 | (3,243) | - | (3,243) |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| Net (loss)/gain for the period after taxation | 3 | (189,914) | 268,947 | 79,033 |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| (Loss)/gain per share (pence) | | (1.7) | 2.4 | 0.7 |
+-------------------------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+-------------------------------------------------+-------+-----------+-----------+-----------+
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 Group has no recognised gains or losses other than those disclosed in
the Consolidated Income Statement.
The accompanying notes are an integral part of the financial statements.
+-----------+-------------+-----------+-----------+-----------+-----------+
| |(unaudited) | | |(audited) | |
+-----------+-------------+-----------+-----------+-----------+-----------+
| Six months ended | Year ended |
+-------------------------------------+-----------------------------------+
| 31 March 2008 | 30 September 2008 |
+-------------------------------------+-----------------------------------+
| Revenue | Capital | Total | Revenue | Capital | Total |
+-----------+-------------+-----------+-----------+-----------+-----------+
| GBP | GBP | GBP | GBP | GBP | GBP |
+-----------+-------------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------+-------------+-----------+-----------+-----------+-----------+
| - | (38,000) | (38,000) | - | (106,500) | (106,500) |
+-----------+-------------+-----------+-----------+-----------+-----------+
| - | - | - | (240,870) | - | (240,870) |
+-----------+-------------+-----------+-----------+-----------+-----------+
| - | - | - | (4,113) | - | (4,113) |
+-----------+-------------+-----------+-----------+-----------+-----------+
| - | - | - | - | - | - |
+-----------+-------------+-----------+-----------+-----------+-----------+
| - | 11,668 | 11,668 | - | 11,668 | 11,668 |
+-----------+-------------+-----------+-----------+-----------+-----------+
| - | 34,284 | 34,284 | - | 20,769 | 20,769 |
+-----------+-------------+-----------+-----------+-----------+-----------+
| 148,280 | - | 148,280 | 339,315 | - | 339,315 |
+-----------+-------------+-----------+-----------+-----------+-----------+
| 18,236 | - | 18,236 | 36,411 | - | 36,411 |
+-----------+-------------+-----------+-----------+-----------+-----------+
| (93,531) | - | (93,531) | (182,477) | - | (182,477) |
+-----------+-------------+-----------+-----------+-----------+-----------+
| (2,095) | - | (2,095) | (11,537) | - | (11,537) |
+-----------+-------------+-----------+-----------+-----------+-----------+
| (103,518) | - | (103,518) | (295,060) | - | (295,060) |
+-----------+-------------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------+-------------+-----------+-----------+-----------+-----------+
| (32,628) | 7,952 | (24,676) | (358,331) | (74,063) | (432,394) |
+-----------+-------------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------+-------------+-----------+-----------+-----------+-----------+
| (3,537) | - | (3,537) | (6,514) | - | (6,514) |
+-----------+-------------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------+-------------+-----------+-----------+-----------+-----------+
| (36,165) | 7,952 | (28,213) | (364,845) | (74,063) | (438,908) |
+-----------+-------------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------+-------------+-----------+-----------+-----------+-----------+
| (0.3) | 0.1 | (0.3) | (3.3) | (0.6) | (3.9) |
+-----------+-------------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------+-------------+-----------+-----------+-----------+-----------+
+----------------------------------------+-------+-------------+-------------+--------------+
| Consolidated Balance Sheet | | (unaudited) | (unaudited) | (audited) |
+----------------------------------------+-------+-------------+-------------+--------------+
| | | 31 March | 31 March | 30 |
| | | | | September |
+----------------------------------------+-------+-------------+-------------+--------------+
| | | 2009 | 2008 | 2008 |
+----------------------------------------+-------+-------------+-------------+--------------+
| |Notes | GBP | GBP | GBP |
+----------------------------------------+-------+-------------+-------------+--------------+
| | | | | |
+----------------------------------------+-------+-------------+-------------+--------------+
| Non-current assets | | | | |
+----------------------------------------+-------+-------------+-------------+--------------+
| Investment property | 5 | 2,519,000 | 873,000 | 804,500 |
+----------------------------------------+-------+-------------+-------------+--------------+
| Investments held at fair value through | 6 | 97,834 | 2,925,713 | 3,012,365 |
| profit or loss | | | | |
+----------------------------------------+-------+-------------+-------------+--------------+
| Property contracts yet to complete | 7 | 1,353,573 | 1,781,927 | 1,508,823 |
+----------------------------------------+-------+-------------+-------------+--------------+
| Debtors | | - | 253,532 | - |
+----------------------------------------+-------+-------------+-------------+--------------+
| | | 3,970,407 | 5,834,172 | 5,325,688 |
+----------------------------------------+-------+-------------+-------------+--------------+
| Current assets | | | | |
+----------------------------------------+-------+-------------+-------------+--------------+
| Debtors | | 18,419 | 279,889 | 533,450 |
+----------------------------------------+-------+-------------+-------------+--------------+
| Cash in escrow | 8 | 3,000,000 | 3,000,000 | 3,000,000 |
+----------------------------------------+-------+-------------+-------------+--------------+
| Cash and cash equivalents | | 2,215,242 | 402,320 | 274,200 |
+----------------------------------------+-------+-------------+-------------+--------------+
| | | 5,233,661 | 3,682,209 | 3,807,650 |
+----------------------------------------+-------+-------------+-------------+--------------+
| Creditors - amounts falling due within | | | | |
| one year | | | | |
+----------------------------------------+-------+-------------+-------------+--------------+
| Other payables | | (69,939) | (50,590) | (78,242) |
+----------------------------------------+-------+-------------+-------------+--------------+
| | | | | |
+----------------------------------------+-------+-------------+-------------+--------------+
| Net current assets | | 5,163,722 | 3,631,619 | 3,729,408 |
+----------------------------------------+-------+-------------+-------------+--------------+
| | | | | |
+----------------------------------------+-------+-------------+-------------+--------------+
| Total net assets | | 9,134,129 | 9,465,791 | 9,055,096 |
+----------------------------------------+-------+-------------+-------------+--------------+
| | | | | |
+----------------------------------------+-------+-------------+-------------+--------------+
| Equity | | | | |
+----------------------------------------+-------+-------------+-------------+--------------+
| Stated capital | 9 | 10,505,154 | 10,505,154 | 10,505,154 |
+----------------------------------------+-------+-------------+-------------+--------------+
| Capital reserve | | (46,808) | (233,740) | (315,755) |
+----------------------------------------+-------+-------------+-------------+--------------+
| Issue costs reserve | | (679,868) | (679,868) | (679,868) |
+----------------------------------------+-------+-------------+-------------+--------------+
| Revenue reserve | | (644,349) | (125,755) | (454,435) |
+----------------------------------------+-------+-------------+-------------+--------------+
| | | | | |
+----------------------------------------+-------+-------------+-------------+--------------+
| Total shareholders' funds (all equity) | 10 | 9,134,129 | 9,465,791 | 9,055,096 |
+----------------------------------------+-------+-------------+-------------+--------------+
| | | | | |
+----------------------------------------+-------+-------------+-------------+--------------+
| Net asset value per share (pence) | | 81.9 | 84.9 | 81.2 |
+----------------------------------------+-------+-------------+-------------+--------------+
The financial statements were approved by the Board of Directors on 29 June 2009
and signed on its behalf by:
Donald Reid
The accompanying notes are an integral part of the financial statements.
+---------------------------------------+------+-------------+-------------+--------------+
| Consolidated Cash Flow Statement | | (unaudited) | (unaudited) | (audited) |
+---------------------------------------+------+-------------+-------------+--------------+
| | | Six months | Six months | Year |
| | | ended | ended | ended |
+---------------------------------------+------+-------------+-------------+--------------+
| | | 31 March | 31 March | 30 September |
| | | 2009 | 2008 | 2008 |
+---------------------------------------+------+-------------+-------------+--------------+
| | | GBP | GBP | GBP |
+---------------------------------------+------+-------------+-------------+--------------+
| | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| Cash flow from operating activities | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| Deposits and acquisition costs | | - | (1,628,623) | (1,502,948) |
| relating to property contracts | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| Cash deposited in escrow | | - | (3,000,000) | (3,000,000) |
+---------------------------------------+------+-------------+-------------+--------------+
| Expenses from sale of property | | - | (2,290) | (2,290) |
| contracts | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| Rental income received | | 46,862 | 13,684 | 34,854 |
+---------------------------------------+------+-------------+-------------+--------------+
| Deposit interest received | | 104,015 | 28,147 | 67,958 |
+---------------------------------------+------+-------------+-------------+--------------+
| Investment management fees paid | | (92,890) | (93,531) | (182,477) |
+---------------------------------------+------+-------------+-------------+--------------+
| Secretarial fees paid | | (2,343) | (1,975) | (4,614) |
+---------------------------------------+------+-------------+-------------+--------------+
| Rental expenses | | (20,925) | (1,849) | (13,072) |
+---------------------------------------+------+-------------+-------------+--------------+
| Other expenses | | (174,931) | (115,370) | (232,864) |
+---------------------------------------+------+-------------+-------------+--------------+
| Net cash outflow from operating | | (140,212) | (4,801,807) | (4,835,453) |
| activities | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| Taxation paid | | (3,532) | (2,239) | (6,226) |
+---------------------------------------+------+-------------+-------------+--------------+
| | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| Cash flow from investing activites | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| Interest income received | | 98,999 | 236,335 | 247,087 |
+---------------------------------------+------+-------------+-------------+--------------+
| Purchase of investments | | - | (1,428,060) | (1,529,299) |
+---------------------------------------+------+-------------+-------------+--------------+
| Sale of investments | | 2,984,640 | 4,569,920 | 4,569,920 |
+---------------------------------------+------+-------------+-------------+--------------+
| Proceeds from rescission of Oldham | | 332,489 | - | - |
| Place | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| Purchase of investment property | | (1,516,634) | - | - |
+---------------------------------------+------+-------------+-------------+--------------+
| Proceeds from sale of investment | | 185,292 | - | - |
| property | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| Net cash inflow from investing | | 2,084,786 | 3,378,195 | 3,287,708 |
| activities | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| Increase/(decrease) in cash | | 1,941,042 | (1,425,851) | (1,553,971) |
+---------------------------------------+------+-------------+-------------+--------------+
| | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| Cash and cash equivalents at the | | 274,200 | 1,828,171 | 1,828,171 |
| start of the period | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| Cash and cash equivalents at the end | | 2,215,242 | 402,320 | 274,200 |
| of the period | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
| | | | | |
+---------------------------------------+------+-------------+-------------+--------------+
The accompanying notes are an integral part of the financial statements.
+------------+-------+------+---------------------+-------------+-----------+-----------+-----------+------------+
| Consolidated statement of changes in equity | | | Issue | | |
+-------------------------------------------------+-------------+-----------+-----------+-----------+------------+
| | | | Stated | Capital | costs | Revenue | |
| | | | | | | | |
+------------+-------+----------------------------+-------------+-----------+-----------+-----------+------------+
| | | | capital | reserves | reserve | reserve | Total |
+------------+-------+----------------------------+-------------+-----------+-----------+-----------+------------+
| | | | GBP | GBP | GBP | GBP | GBP |
+------------+-------+----------------------------+-------------+-----------+-----------+-----------+------------+
| For the six months ended 31 March 2009 (unaudited) | | | | |
+---------------------------------------------------------------+-----------+-----------+-----------+------------+
| At 1 October 2008 | | 10,505,154 | (315,755) | (679,868) | (454,435) | 9,055,096 |
+--------------------+----------------------------+-------------+-----------+-----------+-----------+------------+
| Revaluation of investment property | - | 209,800 | - | - | 209,800 |
+-------------------------------------------------+-------------+-----------+-----------+-----------+------------+
| Gain/(loss) for the period | - | 59,147 | - | (189,914) | (130,767) |
+-------------------------------------------------+-------------+-----------+-----------+-----------+------------+
| | | | | | | | |
+------------+-------+----------------------------+-------------+-----------+-----------+-----------+------------+
| At 31 March 2009 | | 10,505,154 | (46,808) | (679,868) | (644,349) | 9,134,129 |
+--------------------+----------------------------+-------------+-----------+-----------+-----------+------------+
| | | | | | | | |
+------------+-------+----------------------------+-------------+-----------+-----------+-----------+------------+
| For the six months ended 31 March 2008 (unaudited) | | | | |
+---------------------------------------------------------------+-----------+-----------+-----------+------------+
| At 1 October 2007 | | 10,505,154 | (241,692) | (679,868) | (89,590) | 9,494,004 |
+--------------------+----------------------------+-------------+-----------+-----------+-----------+------------+
| Revaluation of investment property | - | (38,000) | - | - | (38,000) |
+-------------------------------------------------+-------------+-----------+-----------+-----------+------------+
| Gain/(loss) for the period | - | 45,952 | - | (36,165) | 9,787 |
+-------------------------------------------------+-------------+-----------+-----------+-----------+------------+
| | | | | | | | |
+------------+-------+----------------------------+-------------+-----------+-----------+-----------+------------+
| At 31 March 2008 | | 10,505,154 | (233,740) | (679,868) | (125,755) | 9,465,791 |
+--------------------+----------------------------+-------------+-----------+-----------+-----------+------------+
| | | | | | | | |
+------------+-------+----------------------------+-------------+-----------+-----------+-----------+------------+
| For the year ended 30 September 2008 (audited) | | | | | |
+-------------------------------------------------+-------------+-----------+-----------+-----------+------------+
| At 1 October 2007 | | 10,505,154 | (241,692) | (679,868) | (89,590) | 9,494,004 |
+--------------------+----------------------------+-------------+-----------+-----------+-----------+------------+
| Revaluation of investment property | - | (106,500) | - | - | (106,500) |
+-------------------------------------------------+-------------+-----------+-----------+-----------+------------+
| Gain/(loss) for the year | | - | 32,437 | - | (364,845) | (332,408) |
+---------------------------+---------------------+-------------+-----------+-----------+-----------+------------+
| | | | | | | | |
+------------+--------------+---------------------+-------------+-----------+-----------+-----------+------------+
| At 30 September 2008 | | 10,505,154 | (315,755) | (679,868) | (454,435) | 9,055,096 |
+---------------------------+---------------------+-------------+-----------+-----------+-----------+------------+
| | | | | | | | |
+------------+-------+------+---------------------+-------------+-----------+-----------+-----------+------------+
The accompanying notes are an integral part of the financial statements
Notes to the financial statements
1. Accounting Policies
(a) Basis of preparation
The consolidated interim financial statements have been prepared under the
historical cost convention, as modified 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 2009.
(i) IFRS applied
For the accounting period beginning on 1 October 2007 the Company has prepared
its financial statements in accordance with International Financial Reporting
Standards ("IFRS"), as adopted by the International Accounting Standards Board
("IASB"). Prior to the period beginning 1 October 2007, the Board had 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. The principle differences arising from
this change to IFRS is that fair value movements are now recognised through the
income statement whereas these were previously accounted for through reserve
movements under UK GAAP. All other differences have resulted in presentational
changes only and have not required the restatement of any prior period numbers.
The accounting policies adopted in the preparation of the interim financial
statements are consistent with those followed in the preparation of the annual
financial statements for the year ended 30 September 2008. New accounting
standards have been issued since the year end 30 September 2008 but none of
these are yet effective.
(ii) Going concern
The Company contracted to purchase 118 off-plan units in a new development in
Wallington for GBP25 million for which the Red Book valuation at 31 March 2009
was GBP26.1 million. Due to the on-going delay in the commencement of the
construction as explained in the Chairman's Statement, which has impacted the
marketing strategy, none of the units have been sold. Whilst there is clearly
some uncertainty over the commencement of the development, there is a long-stop
date of January 2012, by which time the Company will require completed units of
satisfactory standard to be delivered by the developer or else be entitled to a
return of its deposits. The Company intends to commence its sales strategy for
the Wallington development once construction has started. Current market
conditions, falling house prices and a significant reduction in new mortgage
approvals give rise to uncertainties concerning the ability of the Company to
sell the properties and the sales price.
If properties prices fall by a further 4 per cent. or more by the date of
completion of the units (which is expected to be at least 18 months from now)
from the independent valuation undertaken by CB Richard Ellis as of 31 March
2009, the Company would only be able to on-sell any remaining unsold units at a
loss. In this case the Company may choose to acquire and retain some or all
units with a view to achieving better long term returns through rental, but
would need to seek financing to do so. Although there can be no certainty that
such financing would be available, particularly if property values fall even
further, the Directors anticipate a successful outcome to the project or a
return of its deposits.
These factors, some of which arise in 18 months time or more, indicate the
existence of material uncertainties which cast significant doubt about the
ability of the Company to continue as a going concern. Having considered these
uncertainties, and the options available to the Company, the Directors have a
reasonable expectation that the Company has adequate resources to continue in
operation for the foreseeable future. The financial statements do not include
the adjustments that would result if the company was unable to continue as a
going concern.
(b) Use of estimates and judgments
The preparation of financial statements requires management to make judgments,
estimates and assumptions that affect the application of accounting polices and
the reporting amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the estimate is
revised and in any future periods affected.
The most significant estimates and judgements relate to the determination of
fair value of investment property and the disclosed fair value of properties
that are the subject of property contracts yet to complete. The fair values of
both kinds of properties are determined by independent valuers and are based
upon a market approach methodology, using assumptions on local markets prices,
comparable units and transaction levels.
(c) Basis of consolidation
The consolidated interim financial statements incorporate the financial
statements of the Company and entities controlled by the Company (its
subsidiaries) made up for the six months ended 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 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.
The Company has only one subsidiary, OPF Investment Properties Limited, which it
acquired during the year ended 30 September 2007. As this subsidiary has not yet
commenced trading and remained dormant throughout the period, the Company's
financial statements are materially similar in all respects to the Group's
financial statements, therefore the Company has presented only consolidated
financial statements for the six months ended 31 March 2009 and 31 March 2008
and the year ended 30 September 2008.
(d) Revenue recognition
(i) Interest income
Interest receivable on fixed interest securities is recognised in "Interest
income" using the effective interest method. The effective interest method is a
way of calculating the amortised cost of a financial asset or a financial
liability (or groups of financial assets or financial liabilities) and of
allocating the interest income or interest expense over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future
cash receipts or payments through the expected life of the financial instrument
or, where appropriate, a shorter period, to the net carrying amount of the
financial asset or financial liability. When calculating the effective interest
rate, the Group estimates cash flows considering all contractual terms of the
financial instrument but not future credit losses. The calculation includes all
amounts paid or received by the Group that are an integral part of the effective
interest rate, including transaction costs and all other premiums or discounts.
(ii) Profit on off-plan sales
Profit on off-plan sales is recognised once contracts with onward buyers have
become unconditional. The profit or loss is calculated in line with the
profit-share arrangement with each developer based on the difference between the
amount agreed with the buyer and the Company's purchase price.
(iii) Rental income
Rental income from investment properties is based on a short term tenancy
agreements and is recognised in the period earned. Property operating costs are
expensed as incurred including any element of expenditure not recovered from
tenants.
(e) Expenses
Expenses are charged through the income statement, except for expenses which are
attributable to the disposal of an investment, which are deducted from the
disposal proceeds of the investment. In addition, certain expenses associated
with the acquisition of an investment have been capitalised.
(f) Investments
(i) General
Assets are recognised at the trade date of acquisition, and are recognised
initially at fair value plus any directly attributable transaction costs.
The Group does not hold, or intends to hold, any financial instruments for the
purpose of trading.
(ii) Investments at fair value through profit or loss
An instrument is classified as at fair value through profit or loss if it is
held as at fair value through profit or loss. Financial instruments are
designated at fair value through the profit or loss if the Group manages such
investments and makes purchase and sale decisions based on their fair value.
Fair value is the amount at which an investment could be exchanged between
knowledgeable willing parties in an arms length transaction.
Purchases of investments are recognised on the trade date, being the date that
amounts are due for payment. Investments are derecognised when the rights to
receive cash flows from the investments have expired or the Group has
transferred substantially all risks and rewards of ownership. Investments are
initially recognised at fair value being the transaction price. Transaction
costs for all financial assets carried at fair value through profit and loss are
expensed as incurred.
Subsequent to initial recognition, all financial assets at fair value through
the profit or loss are measured at fair value. Gains and losses arising from
changes in fair value are presented in the income statement in the year in which
they arise. On disposal, realised gains and losses are also recognised in the
income statement.
Fair values of financial instruments traded in active markets are based on
quoted market prices as at the balance sheet date. The quoted market price used
for financial assets held by the Group is the current bid price.
(iii) Property contracts yet to complete
The Group 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 Group 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.
Realised gains and losses arising on the disposal of these contracts are taken
to the realised capital reserve.
(iv) Investment property
Property that is held for capital appreciation, and that is not occupied by the
companies in the Group, is classified as investment property.
Investment property is measured initially at its cost, including related
transaction costs. After initial recognition, investment property is carried at
fair value, although the property may not be revalued in the year of
acquisition. Changes in fair values are recorded in the income statement.
Fair value is based on active market prices, adjusted if necessary for any
difference in the nature, location or condition of the specific asset. If this
information is not available, the Group uses alternative valuation methods. The
valuations are prepared annually by Savills (L&P) Limited for Wimbledon House
and Edwin Evans Surveyors Limited for The Heart.
Realised gains and losses on the disposal of investment property are recognised
once sale contracts have been exchanged and the purchaser's deposit has been
received.
(g) Cash and cash equivalents
Cash and cash equivalents comprise current deposits with banks. Cash equivalents
comprises of current deposits with banks.
(h) Taxation
The taxation charge arises from income tax deducted at source on the net rental
income.
Deferred tax is recognised in respect of all temporary differences that have
originated but not reversed at the balance sheet date, where transactions or
events that result in an obligation to pay more tax in the future or right to
pay less tax in the future have occurred at the balance sheet date. This is
subject to deferred tax assets only being recognised if it is considered more
likely than not that there will be suitable profits from which the future
reversal of the temporary differences can be deducted.
(i) Share capital
Founder shares
Founder shares are classified as equity. Founder shares are not eligible for
participation in Company investments and carry no voting rights at general
meetings of the Company.
(j) Currency
The results and financial position of the Group are expressed in Pounds
Sterling, which is the Group's functional currency.
2. Taxation
Under Article 123A of the Income Tax (Jersey) Law 1961, as amended, the Company
had obtained Jersey exempt company status and is therefore exempt for Jersey
income tax on non Jersey source income and bank interest (by concession). A
GBP600 (2008 - GBP600) annual exempt company fee is payable by the Company. From
January 2009 the exempt company regime no longer applies. The general rate of
corporation tax for companies resident in Jersey will be 0 per cent. from that
date onwards. The taxation charge arises from income tax deducted at source on
the net rental income. UK tax has been deducted at source on all properties at
the current rate of tax (2008/09 - 20 per cent.; 2007/08 - 22 per cent.).
3. Returns per share
The return per share is based on the net gain for the period of GBP79,033 (31
March 2008: net loss GBP28,213; 30 September 2008 net loss: GBP438,908) and on
11,153,098 shares (31 March 2008: 11,153,098; 30 September 2008: 11,153,098),
being the weighted average number of shares in issue.
4. Management fee
+--------------------------------------+--------------+--------------+--------------+
| | Six months | Six months | Year |
| | ended | ended | ended |
+--------------------------------------+--------------+--------------+--------------+
| | 31 March | 31 March | 30 September |
| | 2009 | 2008 | 2008 |
+--------------------------------------+--------------+--------------+--------------+
| | GBP | GBP | GBP |
+--------------------------------------+--------------+--------------+--------------+
| Management fee | 92,890 | 95,531 | 182,477 |
+--------------------------------------+--------------+--------------+--------------+
The management fees paid to Development Capital Management (Jersey) Limited are
two per cent. per annum of the net asset value of the fixed income portfolio
held by the Company, plus any cash amount paid, and outstanding, in respect of
property contracts yet to complete and investment property. The management
agreement between the Company and the Manager is terminable by either party on
12 months notice.
5. Investment property
+----------------------------------------+--------------+--------------+--------------+
| | Wimbledon | The Heart | Total |
| | House | | |
+----------------------------------------+--------------+--------------+--------------+
| | GBP | GBP | GBP |
+----------------------------------------+--------------+--------------+--------------+
| Opening book cost | 989,183 | - | 989,183 |
+----------------------------------------+--------------+--------------+--------------+
| Transfer from property contracts yet | - | 165,000 | 165,000 |
| to complete | | | |
+----------------------------------------+--------------+--------------+--------------+
| Movements during the period: | | | |
+----------------------------------------+--------------+--------------+--------------+
| Completion payment | - | 1,506,884 | 1,506,884 |
+----------------------------------------+--------------+--------------+--------------+
| Sales - net proceeds | - | (185,292) | (185,292) |
+----------------------------------------+--------------+--------------+--------------+
| Sales - realised gain | - | 18,108 | 18,108 |
+----------------------------------------+--------------+--------------+--------------+
| Closing book cost | 989,183 | 1,504,700 | 2,493,883 |
+----------------------------------------+--------------+--------------+--------------+
| Closing | (225,183) | 250,300 | 25,117 |
| unrealized (depreciation)/appreciation | | | |
+----------------------------------------+--------------+--------------+--------------+
| Closing valuation | 764,000 | 1,755,000 | 2,519,000 |
+----------------------------------------+--------------+--------------+--------------+
Both investment properties were fair valued at the period-end by Savills (L&P)
Limited for Wimbledon House and Edwin Evans Surveyors Limited for The Heart on a
market approach basis taking into account transactions and asking prices for
comparable properties in the relevant location and applying a value adjustment
where thought appropriate by the valuer. The rental income arising from these
properties in the period was GBP33,920 (2008 - GBP18,236) with direct expenses
of GBP15,177 (2008 - GBP2,095).
6. Investments held at fair value through profit or loss
+--------------------------------------+---------------+---------------+---------------+
| | 31 March | 31 March | 30 September |
| | 2009 | 2008 | 2008 |
+--------------------------------------+---------------+---------------+---------------+
| | GBP | GBP | GBP |
+--------------------------------------+---------------+---------------+---------------+
| Opening valuation | 3,012,365 | 5,985,007 | 5,985,007 |
+--------------------------------------+---------------+---------------+---------------+
| Opening unrealised loss | 32,551 | 53,320 | 53,320 |
+--------------------------------------+---------------+---------------+---------------+
| Opening book cost | 3,044,916 | 6,038,327 | 6,038,327 |
+--------------------------------------+---------------+---------------+---------------+
| Movements during the period: | | | |
+--------------------------------------+---------------+---------------+---------------+
| Purchases | - | 1,378,132 | 1,476,152 |
+--------------------------------------+---------------+---------------+---------------+
| Sales - proceeds | (2,951,762) | (4,486,169) | (4,486,169) |
+--------------------------------------+---------------+---------------+---------------+
| Amortisation of fixed income book | (3,808) | 2,791 | 4,938 |
| costs | | | |
+--------------------------------------+---------------+---------------+---------------+
| Sales - realised gains | 8,907 | 11,668 | 11,668 |
+--------------------------------------+---------------+---------------+---------------+
| Closing book cost | 98,253 | 2,944,749 | 3,044,916 |
+--------------------------------------+---------------+---------------+---------------+
| Closing unrealized loss | (419) | (19,036) | (32,551) |
+--------------------------------------+---------------+---------------+---------------+
| Closing fair value | 97,834 | 2,925,713 | 3,012,365 |
+--------------------------------------+---------------+---------------+---------------+
7. Property contracts yet to complete
+--------------------------------------+---------------+---------------+---------------+
| | 31 March | 31 March | 30 September |
| | 2009 | 2008 | 2008 |
+--------------------------------------+---------------+---------------+---------------+
| | GBP | GBP | GBP |
+--------------------------------------+---------------+---------------+---------------+
| Opening book cost | 1,508,823 | 446,078 | 446,078 |
+--------------------------------------+---------------+---------------+---------------+
| Movements during the period: | | | |
+--------------------------------------+---------------+---------------+---------------+
| Write back of Oldham Place sales | - | - | 430,043 |
| proceeds recognised in prior year | | | |
+--------------------------------------+---------------+---------------+---------------+
| Write back of Oldham Place sales | - | - | (240,870) |
| realised gain recognised in prior | | | |
| year | | | |
+--------------------------------------+---------------+---------------+---------------+
| | - | - | 189,173 |
+--------------------------------------+---------------+---------------+---------------+
| Proceeds for rescission of Oldham | - | - | (332,489) |
| Place | | | |
+--------------------------------------+---------------+---------------+---------------+
| Write off of capitalised costs of | - | - | (4,113) |
| Oldham Place | | | |
+--------------------------------------+---------------+---------------+---------------+
| Oldham Place deposit refunded | - | - | (147,429) |
+--------------------------------------+---------------+---------------+---------------+
| | | | |
+--------------------------------------+---------------+---------------+---------------+
| Rescission of Tring and Hayes | - | - | (304,524) |
| contracts | | | |
+--------------------------------------+---------------+---------------+---------------+
| Purchases | 9,750 | 1,335,849 | 1,514,698 |
+--------------------------------------+---------------+---------------+---------------+
| Reclassification of The Heart to | (165,000) | - | - |
| Investment property | | | |
+--------------------------------------+---------------+---------------+---------------+
| Closing book cost | 1,353,573 | 1,781,927 | 1,508,823 |
+--------------------------------------+---------------+---------------+---------------+
The reclassification shown in the table above shows the reclassification during
the period of The Heart from "Property contracts yet to complete" to "Investment
property" on completion of the construction. This has been reclassified at the
book cost of GBP165,000.
The Red Book valuations of the underlying properties, on which the Group holds
contracts are based primarily upon "The estimated amount for which a property
should exchange on the date of the date of the valuation, between a willing
buyer and a willing seller in an arm's-length transaction after proper marketing
wherein the parties had each acted knowledgeably, prudently and without
compulsion." This valuation methodology is designed to encapsulate the fair
value of the properties were they complete and held for investment purposes. The
Group however holds contracts to purchase these properties once complete and
therefore is exposed to additional risks such as the risk that the development
fails to complete or completes in a sub-standard fashion not accounted for in
the Red Book assumptions. The Group is also exposed to changes in the value of
properties caused by other economic factors.
The table below summarises the costs associated with these contracts and refers
to the latest update to the original Red Book valuation, prepared by CB Richard
Ellis for Canon House, Wallington, of the underlying properties as a basis of
valuation for these contracts.
+------------------------------------------------------------------+---------------+
| | Canon House |
+------------------------------------------------------------------+---------------+
| | GBP |
+------------------------------------------------------------------+---------------+
| Deposits paid | 1,250,000 |
+------------------------------------------------------------------+---------------+
| Legal and acquisition costs | 103,573 |
+------------------------------------------------------------------+---------------+
| Book cost as at 31 March 2009 | 1,353,573 |
+------------------------------------------------------------------+---------------+
| Outstanding completion payments | 23,750,000 |
+------------------------------------------------------------------+---------------+
| Total historic cost | 25,103,573 |
+------------------------------------------------------------------+---------------+
| 'Red Book' valuation | 26,068,293 |
+------------------------------------------------------------------+---------------+
8. Cash in escrow
The Company holds a deposit of GBP3,000,000 (31 March 2008: GBP3,000,000; 30
September 2008: GBP3,000,000) with AIB Bank (CI) as a guarantee to HBOS. Under
the terms of the guarantee a minimum of GBP3,000,000 balance needs to be
maintained at all times. This guarantee will reduce in line with the sale of
units at Canon House, Wallington and released on a quarterly basis.
9. Stated capital
The Company is a no par value ('NPV') company
+---------------------------------------+--------------+--------------+--------------+
| | 31 March | 31 March | 30 September |
| | 2009 | 2008 | 2008 |
+---------------------------------------+--------------+--------------+--------------+
| Authorised: | Number | Number | Number |
+---------------------------------------+--------------+--------------+--------------+
| 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 and fully paid: | Number | Number | Number |
+---------------------------------------+--------------+--------------+--------------+
| Founder shares | 2 | 2 | 2 |
+---------------------------------------+--------------+--------------+--------------+
| Participating shares | 11,153,098 | 11,153,098 | 11,153,098 |
+---------------------------------------+--------------+--------------+--------------+
All costs associated with the issue of shares have been taken to the issue costs
reserve.
10. Net asset value per share
+---------------------------------------+--------------+---------------+--+--------------+
| | Net asset value |
+---------------------------------------+------------------------------------------------+
| | attributable per share |
+---------------------------------------+------------------------------------------------+
| | 31 March | 31 March | 30 September |
| | 2009 | 2008 | 2008 |
+---------------------------------------+--------------+------------------+--------------+
| | p | p | p |
+---------------------------------------+--------------+------------------+--------------+
| Participating shares | 81.9 | 84.9 | 81.2 |
+---------------------------------------+--------------+------------------+--------------+
| | | | |
+---------------------------------------+--------------+------------------+--------------+
| | Net asset value |
+---------------------------------------+------------------------------------------------+
| | 31 March | 31 March | 30 September |
| | 2009 | 2008 | 2008 |
+---------------------------------------+--------------+---------------+-----------------+
| | GBP | GBP | GBP |
+---------------------------------------+--------------+---------------+-----------------+
| | 9,134,129 | 9,465,791 | 9,055,096 |
+---------------------------------------+--------------+---------------+--+--------------+
11. Financial instruments
The Group'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 main risks the Group faces from its financial instruments are (i)
market price risk (comprising interest rate risk and other price risk), (ii)
liquidity risk, and (iii) credit risk.
The Board regularly reviews and agrees on 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.
(i) Market price risk
Market price risk arises mainly from uncertainty about future prices of
financial instruments used in the Group's operations. It represents the
potential loss the Group might suffer through holding market positions as a
consequence of price movements.
The portfolio of fixed interest investments has been reduced to 1 bond during
the period.
The Manager monitors market prices throughout the year and reports to the Board,
which meets regularly in order to review investment strategy.
Interest rate risk
Interest rate movements may affect: (i) the fair value of the investments in
fixed interest rate securities, and (ii) the level of income receivable on cash
deposits.
The interest rate profile of the Group excluding short term debtors and
creditors, as at 31 March 2009 was as follows:
+--------------------+------------+------------+------------+------------+--------------+
| | Weighted | | | | |
| | average | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| | period | Weighted | Fixed | Floating | Non-interest |
| | for which | average | | | |
+--------------------+------------+------------+------------+------------+--------------+
| | rate is | interest | rate | rate | bearing |
| | fixed | rate | | | |
+--------------------+------------+------------+------------+------------+--------------+
| 31 March 2009 | Years | % | GBP | GBP | GBP |
+--------------------+------------+------------+------------+------------+--------------+
| Assets | | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| Fixed interest | 1.86 | 4.50 | 97,834 | - | - |
| securities | | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| Sterling cash | - | - | - | 5,215,242 | - |
| deposit | | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| Debtors | - | - | - | - | - |
+--------------------+------------+------------+------------+------------+--------------+
| Total assets | 1.86 | 4.50 | 97,834 | 5,215,242 | - |
+--------------------+------------+------------+------------+------------+--------------+
| | | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| | Weighted | | | | |
| | average | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| | period | Weighted | Fixed | Floating | Non-interest |
| | for which | average | | | |
+--------------------+------------+------------+------------+------------+--------------+
| | rate is | interest | rate | rate | bearing |
| | fixed | rate | | | |
+--------------------+------------+------------+------------+------------+--------------+
| 31 March 2008 | Years | % | GBP | GBP | GBP |
+--------------------+------------+------------+------------+------------+--------------+
| Assets | | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| Fixed interest | 1.00 | 5.00 | 2,925,713 | - | - |
| securities | | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| Sterling cash | - | - | - | 3,402,320 | - |
| deposit | | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| Debtors | - | - | - | - | 253,352 |
+--------------------+------------+------------+------------+------------+--------------+
| Total assets | 1.00 | 5.00 | 2,925,713 | 3,402,320 | 253,352 |
+--------------------+------------+------------+------------+------------+--------------+
| | | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| | Weighted | | | | |
| | average | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| | period | Weighted | Fixed | Floating | Non-interest |
| | for which | average | | | |
+--------------------+------------+------------+------------+------------+--------------+
| | rate is | interest | rate | rate | Bearing |
| | fixed | rate | | | |
+--------------------+------------+------------+------------+------------+--------------+
| 30 September 2008 | Years | % | GBP | GBP | GBP |
+--------------------+------------+------------+------------+------------+--------------+
| Assets | | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| Fixed interest | 0.58 | 4.90 | 3,012,365 | - | - |
| securities | | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| Sterling cash | - | - | - | 3,274,200 | - |
| deposit | | | | | |
+--------------------+------------+------------+------------+------------+--------------+
| Debtors | - | - | - | - | - |
+--------------------+------------+------------+------------+------------+--------------+
| Total assets | 0.58 | 4.90 | 3,012,365 | 3,274,200 | - |
+--------------------+------------+------------+------------+------------+--------------+
The floating rate assets consist of cash deposits on call earning interest at
prevailing market rates.
Maturity profile
The following table sets out the carrying amount, by maturity, of the Group's
financial instruments that are exposed to interest rate risk:
+--------------------+------------+------------+------------+------------+------------+
| | Within | Within | Within | More than | |
+--------------------+------------+------------+------------+------------+------------+
| | 1 year | 2-3 years | 4-5 years | 5 years | Total |
+--------------------+------------+------------+------------+------------+------------+
| 31 March 2009 | GBP | GBP | GBP | GBP | GBP |
+--------------------+------------+------------+------------+------------+------------+
| Fixed rate | | | | | |
+--------------------+------------+------------+------------+------------+------------+
| Assets | - | 97,834 | - | - | 97,834 |
+--------------------+------------+------------+------------+------------+------------+
| | - | 97,834 | - | - | 97,834 |
+--------------------+------------+------------+------------+------------+------------+
| Floating rate | | | | | |
+--------------------+------------+------------+------------+------------+------------+
| Cash | 2,135,025 | - | - | - | 2,135,025 |
+--------------------+------------+------------+------------+------------+------------+
| Deposits | - | 3,080,217 | - | - | 3,080,217 |
+--------------------+------------+------------+------------+------------+------------+
| | 2,135,025 | 3,080,217 | - | - | 5,215,242 |
+--------------------+------------+------------+------------+------------+------------+
| | | | | | |
+--------------------+------------+------------+------------+------------+------------+
| | Within | Within | Within | More than | |
+--------------------+------------+------------+------------+------------+------------+
| | 1 year | 2-3 years | 4-5 years | 5 years | Total |
+--------------------+------------+------------+------------+------------+------------+
| 31 March 2008 | GBP | GBP | GBP | GBP | GBP |
+--------------------+------------+------------+------------+------------+------------+
| Fixed rate | | | | | |
+--------------------+------------+------------+------------+------------+------------+
| Assets | 2,521,480 | 301,255 | 102,978 | - | 2,925,713 |
+--------------------+------------+------------+------------+------------+------------+
| | 2,521,480 | 301,255 | 102,978 | - | 2,925,713 |
+--------------------+------------+------------+------------+------------+------------+
| Floating rate | | | | | |
+--------------------+------------+------------+------------+------------+------------+
| Cash | 402,320 | - | - | - | 402,320 |
+--------------------+------------+------------+------------+------------+------------+
| Deposits | - | 3,000,000 | - | - | 3,000,000 |
+--------------------+------------+------------+------------+------------+------------+
| | 402,320 | 3,000,000 | - | - | 3,402,320 |
+--------------------+------------+------------+------------+------------+------------+
| | | | | | |
+--------------------+------------+------------+------------+------------+------------+
| Non-interest | | | | | |
| bearing | | | | | |
+--------------------+------------+------------+------------+------------+------------+
| Other receivables | - | 253,352 | - | - | 253,352 |
+--------------------+------------+------------+------------+------------+------------+
| | - | 253,352 | - | - | 253,352 |
+--------------------+------------+------------+------------+------------+------------+
| | | | | | |
+--------------------+------------+------------+------------+------------+------------+
| | Within | Within | Within | More than | |
+--------------------+------------+------------+------------+------------+------------+
| | 1 year | 2-3 years | 4-5 years | 5 years | Total |
+--------------------+------------+------------+------------+------------+------------+
| 30 September 2008 | GBP | GBP | GBP | GBP | GBP |
+--------------------+------------+------------+------------+------------+------------+
| Fixed rate | | | | | |
+--------------------+------------+------------+------------+------------+------------+
| Assets | 2,512,690 | 298,515 | 201,160 | - | 3,012,365 |
+--------------------+------------+------------+------------+------------+------------+
| | 2,512,690 | 298,515 | 201,160 | - | 3,012,365 |
+--------------------+------------+------------+------------+------------+------------+
| Floating rate | | | | | |
+--------------------+------------+------------+------------+------------+------------+
| Cash | 246,200 | - | - | - | 246,200 |
+--------------------+------------+------------+------------+------------+------------+
| Deposits | - | 3,028,000 | - | - | 3,028,000 |
+--------------------+------------+------------+------------+------------+------------+
| | 246,200 | 3,028,000 | - | - | 3,274,200 |
+--------------------+------------+------------+------------+------------+------------+
Interest rate sensitivity
An increase of 100 basis points in interest rates during the year would have
increased the net assets attributable to shareholders and changes in net assets
attributable to shareholders by GBP52,152 (31 March 2008: GBP34,023; 30
September 2008: GBP32,742). A decrease of 100 basis points would have had an
equal but opposite effect.
(ii) Liquidity risk
The Group has a commitment to purchase 118 units in Canon House, Wallington at a
purchase price of GBP25 million, against which the Group has paid a deposit of
GBP4.25 million. The commitment will be reduced by selling the forward purchase
contracts, in line with the Group's strategy, once construction starts with any
shortfall funded by bank financing and the Group's cash balances and readily
realisable securities, which can be sold to meet funding commitments if
necessary. As at 31 March 2009 the Group does not have any significant
liabilities due.
(iii) Credit risk
The Group 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 Group
expects to place any such funds on a short-term basis only and spread these over
a number of years.
Management has a credit policy in place and the exposure to credit risk is
monitored on an ongoing basis.
The Group's principal financial assets are fixed interest securities, other
receivables and cash and cash equivalents. The maximum exposure of the Group to
the credit risk is the carrying amount of each class of financial assets.
Other receivables are represented mainly by prepayments and other debtors where
no significant credit risk is recognised.
12. Availability of Interim Results
The interim results are available on the Company's website (www.offplanfund.com)
and can be obtained in hard copy by request free of charge from Development
Capital Management Limited, 36 Dover Street, London, W1S 4NH.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR CKCKPPBKDBAB
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