RNS Number:3457V
Property Acquisition & ManagementLd
30 April 2002
CHAIRMAN'S STATEMENT
The second year of operation for the Company has brought mixed returns from our
chosen areas of investment. Our property portfolio, operating under the CNC
Properties banner ("CNC"), has continued to perform strongly, producing revenue
and capital returns which met our best expectations. The bond portfolio, which
consisted of approximately 85 high yielding holdings, continued to under-perform
significantly, as a result of well documented problems in the telecoms industry
and wider economic uncertainties. The revenue and capital returns from the bond
portfolio have been extremely disappointing. From July 2000, when the bond
portfolio was first established, to 29 April 2002, it has incurred capital
losses of approximately £12,600,000, equivalent to approximately 22p per
Ordinary Share.
The Company's principal investment objective is to provide Ordinary and
Convertible Redeemable Preference shareholders with a high income and a direct
capital exposure to UK office, retail and industrial property and high yield
bonds, and to provide Zero Dividend Preference shareholders with a predetermined
capital return. The total Ordinary Share and Convertible Redeemable Preference
Share dividends paid in respect of the year ended 31 December 2001 amounted to
9.6p and 8.55p respectively. The trading results for the year produced a return
before tax of £1,405,000 (2000 - six months: £4,806,000) against which a tax
charge of £1,080,000 (2000 - six months: £220,000) has been incurred, leaving a
£325,000 (2000 - six months: £4,586,000) return after tax. After non-equity
minority interests of £940,000 (2000 - six months: £446,000) and equity and
non-equity dividends of £6,459,000 (2000 - six months: £3,337,000) £7,074,000
has been transferred from reserves (2000 - six months: £803,000 transferred to
reserves).
CNC PROPERTIES LIMITED
CNC earned a profit after tax of £4,592,000, of which £4,353,000 was paid by way
of dividend to the Company and £158,000 transferred to reserves, together with a
further £6,342,000 arising from the increase in value of the property portfolio
and investments in joint ventures. This represents a total return in the year of
£10,853,000 being approximately 17% on the Group's investment in CNC at 31
December 2000 of £65,382,000. These results, an improvement on expectations, are
the continuation of long established policies of seeking high yielding
opportunities and spreading risk by balancing the property portfolio by both use
class and geographical location and follow a total return from CNC of
approximately £9,000,000 in the period from its acquisition on 29 June 2000 to
31 December 2000.
The profits include £1,206,000 from the sale of properties, (2000: £1,428,000),
with the largest contributor being the sale of the Wimbledon property where A3
planning was obtained and a 25 year lease entered into with Luminar Leisure.
The property portfolio, with the exception of £2,483,000 development work in
progress, was valued by DTZ Debenham Tie Leung at 31 December 2001 and totalled
£186,900,000 (2000: £152,081,000) of which £2,007,000 (2000: £2,225,000)
represented the difference between the DTZ Debenham Tie Leung valuation and the
carrying value of the properties held for resale in current assets for which
accounting conventions do not permit a revaluation in statutory accounts.
The acquisitions during the year totalled approximately £30,500,000, the funding
for which was totally provided by additional bank borrowing made possible by the
revaluation increases achieved since 29 June 2000. The single largest
acquisition, amounting to approximately £17,200,000, was the purchase of a
property investment company of primarily industrial properties mainly located in
South Wales. This provided additional balance to the CNC portfolio.
Good revaluation increases have been achieved on the year's acquisitions and
generally across the whole portfolio in the first 6 months of 2001. The second
half of 2001 saw more modest increases in the valuation of the property
portfolio, and a relatively flat start is also expected for the first 6 months
of 2002.
Letting activity has remained generally strong with the exception of offices in
the M3/M40 corridor, which have been hit by a lack of demand from American and
technology companies in particular. A strong level of enquiry in South Wales and
Birmingham has countered this. The opportunity has also been taken to sell some
of the development stock completed over the last 12 months at prices comfortably
in excess of the cost carrying value in the accounts. In 2002, the focus of our
efforts will be concentrated on the continuing refurbishment and letting of void
space, particularly in Newport, Birmingham and Newcastle, where valuation gains
can be achieved by new lettings rather than any rent increases, together with
the review and implementation of asset management strategies in respect of the
properties acquired during 2001.
PROPERTY ACQUISITION AND MANAGEMENT HIGH INCOME LIMITED ("PAM HIGH")
My last report on the bond portfolio came in the period immediately following
the terrorist attacks in the United States. At that time, I noted that the bond
portfolio, which had not been performing well up to the half year, had fallen in
value by a further £1.9m (net of the effects of the associated Euro loan
movement), in the immediate aftermath of the events on September 11. The Board
has been closely monitoring the performance of the bond portfolio and has seen
no material improvement in the value of the holdings (net of the Euro loan
movement) in the remaining period up to the year-end. Indeed, since the year
end, the well publicised troubles of companies such as Energis, coupled with the
continuing uncertainty of economic recovery, has seen the value of the bond
portfolio decline by approximately a further £2,652,000 (net of the Euro loan
movement). As previously mentioned, from July 2000, when the bond portfolio was
first established, to 29 April 2002, it has incurred capital losses of
approximately £12,600,000, equivalent to approximately 22p per Ordinary Share.
Full provision for all capital losses incurred to date, associated with the
disposal of the bond portfolio, has been made in these accounts. Coupled with
this has been continuing erosion of the income produced by the bond portfolio,
as some investments have suspended interest payments and other holdings have
been sold in order to increase PAM High's cash balances in support of its loan
covenant requirements. For the year ended 31 December 2001, PAM High produced an
income shortfall of approximately £900,000 against original budgeted figures, a
shortfall which progressively worsened as further defaults occurred and the need
to raise further cash balances continued.
These further declines in the value of the bond portfolio led to a marginal
breaching of the Company's loan to value covenant with Royal Bank of Scotland
International (the "Bank"). Following discussions with the Bank, the Manager and
Aberdeen Asset Managers, the Directors concluded that the risks of continuing to
hold a significant amount of the Company's assets in the current bond portfolio
outweighed the potential rewards. Accordingly, the Directors have instigated a
substantial liquidation of the bond portfolio and, as at 29 April 2002, the
value of the bond holdings held by PAM High was £2,655,000 and cash on deposit
was £47,560,000. On the same date, the total Sterling and Euro loan outstanding
with the Bank was £35,314,000.
NET ASSET VALUE
At 31 December the net assets of the Group amounted to £57,942,000 (2000:
£64,670,000) which after allowing for the Convertible Redeemable Preference
Shares resulted in a net asset value per Ordinary share of 81.61p (2000:
93.89p). After allowing for the true value of properties held for resale as
noted above, the pro forma net asset value per Ordinary share was 85.10p (2000:
97.76p). Full provision for all capital losses incurred to date, associated with
the disposal of the bond portfolio, has been made in these accounts, the effects
of which are reflected in the above net asset values.
CURRENT TRADING AND PROSPECTS
As detailed above, the Company's property assets have continued to deliver
positive returns on a consistent basis. Whilst sounding a cautionary note on the
prospects for a general upward movement in property values during 2002, the
Board believes that the active management of the Company's property portfolio
will continue to deliver good returns for the Company. Rental income continues
to meet our expectations. The bond portfolio however has proved to be a volatile
asset class since July 2000, and continued to perform extremely poorly during
the early part of 2002. The Directors have concluded therefore that it would be
in the best interests of the Company to discontinue investment in a high
yielding bond portfolio and to concentrate solely on property investment.
Accordingly, the Directors intend to seek permission from the shareholders to
implement this change to the investment policy of the Company at the forthcoming
Annual General Meeting, expected to be held in July.
The Board has considered the income forecasts of the Company in the light of the
problems experienced with the bond portfolio, and the necessity to liquidate a
substantial proportion of the holdings for loan covenant purposes. The Board has
concluded that the current annual dividend of 9.6p per Ordinary Share cannot be
maintained, and is actively considering proposals to raise further funds to
replace the losses incurred by the bond portfolio. A further announcement will
be made in due course, at which time an indication of the dividend prospects of
the Ordinary Shares will be given. In the meantime, the Board, having considered
the interests of all classes of shareholders, has decided to recommend a first
interim dividend of 2p per Ordinary Share (2001: 3.2p) in respect of the year
ending 31 December 2002. The level of any subsequent Ordinary Share dividends
will be substantially dependent on the extent to which any fundraising proposals
are successfully completed. The Company is also paying a Convertible Redeemable
Preference Share dividend of 2.85p per share in respect of the four month period
ending 30 April 2002 (2001: 2.85p). Both classes of share will be marked ex
dividend on 15 May 2002.
I look forward to welcoming shareholders to our second Annual General Meeting,
expected to be held in July, at the Company's registered office at TSB House, Le
Truchot, St Peter Port, Guernsey.
Roger Alcock
The financial information set out in this announcement does not constitute the
Company's statutory accounts for the year ended 31 December 2001 and the period
ended 31 December 2000. The financial information for the period ended 31
December 2000 is derived from the financial statements delivered to the UK
Listing Authority. The auditors reported on those accounts, their report was
unqualified and did not contain a statement under section 65(3) of The Companies
(Guernsey) Law, 1994.
The accounts for the year ended 31 December 2001 will be finalised on the basis
of the financial information presented by the directors in this preliminary
announcement and will be delivered to the UK Listing Authority following
approval.
CONSOLIDATED STATEMENT OF TOTAL RETURN
(incorporating the revenue account for the year ended 31 December 2001)
Notes 2001 Period from incorporation to 31 December 2000
(as restated)
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) 906 (1,643) (737) 895 1,141 2,036
on investment
properties/
investments
Income 3 18,869 - 18,869 9,996 - 9,996
Management fee 4 (2,343) (619) (2,962) (234) (216) (450)
Other expenses (1,931) - (1,931) (948) (332) (1,280)
Return / 15,501 (2,262) 13,239 9,709 593 10,302
(loss) on
ordinary
activities
before finance
costs and
taxation
Interest 250 - 250 758 - 758
receivable and
similar income
Interest 5 (7,538) (4,546) (12,084) (5,526) (728) (6,254)
payable and
similar
charges
Return / 8,213 (6,808) 1,405 4,941 (135) 4,806
(loss) on
ordinary
activities
before
taxation
Tax on 6 (1,080) - (1,080) (220) - (220)
ordinary
activities
Return /
(loss) on 7,133 (6,808) 325 4,721 (135) 4,586
ordinary
activities
after tax for
the year/
period
Minority 7 - (940) (940) - (446) (446)
interests -
non-equity
Return on
ordinary 7,133 (7,748) (615) 4,721 (581) 4,140
activities
after minority
interests
Dividends in 8 (933) - (933) (610) - (610)
respect of
non-equity
shares
Return /
(loss) 6,200 (7,748) (1,548) 4,111 (581) 3,530
attributable
to equity
shareholders
Dividends in 8 (5,526) - (5,526) (2,727) - (2,727)
respect of
equity shares
Transfer to / 674 (7,748) (7,074) 1,384 (581) 803
(from)
reserves
Return per 9 10.77p (13.46)p (2.69)p 7.16p (1.01)p 6.15p
Ordinary Share
- basic
Dividend per
Ordinary Share 9.60p - 9.60p 4.75p - 4.75p
(distributed)
Return per
Ordinary Share 9 10.77p (11.70)p (0.93)p 7.16p (0.88)p 6.28p
(retained) -
fully diluted
The revenue columns of this statement represent the revenue account of the Group.
The Statement of Total Return is presented in accordance with the Statement of
Recommended Practice for Financial Statements of Investment Trust Companies.
CONSOLIDATED BALANCE SHEET
as at 31 December 2001
2001 2000
(as restated)
Notes £'000 £'000
Fixed assets
Intangible fixed assets
Goodwill 1,356 1,429
Other fixed assets
Investment properties 170,929 133,982
Other tangible assets 6 132
Investment in joint ventures 526 1,151
Listed investments - 52,545
172,817 189,239
Current assets
Listed investments 10 38,607 -
Property assets 11 13,965 15,874
Debtors due within one year 5,515 6,289
Debtors due in more than one year 1,809 1,399
Cash at bank and in hand 21,873 9,545
81,769 33,107
Creditors - amounts falling due within one year (71,479) (20,274)
Net current assets 10,290 12,833
Total assets less current liabilities 183,107 202,072
Creditors - amounts falling due after more than one year (113,778) (126,956)
Minority interests - non-equity shares (11,387) (10,446)
Net assets 57,942 64,670
Share capital and reserves
Called-up share capital 12 16,704 16,454
Share premium account 13 47,509 47,413
Capital reserve - realised 13 (6,218) 798
Capital reserve - unrealised 13 (13,550) (6,476)
Property revaluation reserve 13 9,740 4,417
Revenue reserve 13 3,757 2,064
Total shareholders' funds 57,942 64,670
Attributable to equity shareholders 46,997 53,963
Attributable to non-equity shareholders 10,945 10,707
Net asset value per Ordinary Share - basic 14 81.61p 93.89p
Pro forma net asset value per Ordinary share - basic 14 85.10p 97.76p
Net asset value per Ordinary Share - fully diluted 14 87.47p 98.07p
CONSOLIDATED CASH FLOW STATEMENT
for the year to 31 December 2001 (unaudited)
Period from
incorporation
2001 to 31 December
2000
(as restated)
£'000 £'000 £'000
Net cash inflow from operating activities 12,009 3,164
Returns on investments and servicing of finance
Interest received 13 9
Interest paid (11,266) (4,208)
Dividends paid on Ordinary Shares (4,872) (1,313)
Dividends paid on Convertible Redeemable Preference (685)
Shares (305)
Net cash outflow from returns on investments and (16,810) (5,817)
servicing of finance
Taxation
United Kingdom corporation tax paid - (52)
Withholding tax paid - (22)
Net cash outflow from taxation - (74)
Capital expenditure and financial investment
Purchase of investments (5,007) (60,194)
Sale of investments 10,166 3,692
Proceeds from sale of investment properties 3,774 11,370
Investment property additions (666) (1,096)
Proceeds from disposal of tangible fixed assets (7) (52)
Sale of tangible fixed assets 118 13
Net cash inflow/(outflow) from capital expenditure and 8,378 (46,267)
financial investment
Acquisitions and disposals
Purchase of subsidiary undertakings (3,499)
Net cash outflow from acquisitions and disposals (3,499) (61,602)
Net cash inflow/(outflow) before financing 78 (110,596)
Financing
Issue of shares - 74,283
Expenses paid in connection with share issue - (4,315)
Repayment of loan notes (313) -
New borrowings 3,905 47,327
Net cash inflow from financing 3,592 117,295
Increase in cash in the year/period 3,670 6,699
NOTES TO THE PRELIMINARY ANNOUNCEMENT
For the year ended 31 December 2001
1. ACCOUNTING POLICIES
A summary of the principal accounting policies, all of which have been applied
consistently throughout the year, is set out below.
Basis of accounting
The accounts are prepared under the historical cost convention, modified to
include the revaluation of investments and investment properties. The accounts
have been prepared in accordance with applicable United Kingdom accounting
standards and with the Statement of Recommended Practice "Financial Statements
of Investment Trust Companies".
Basis of consolidation
The consolidated statement of total return and consolidated balance sheet
include the financial statements of the Company and its subsidiary undertakings
for the year.
The results of subsidiaries acquired are included in the consolidated statement
of total return from the date control passes. Goodwill arising on consolidation
is capitalised and amortised over a period of 20 years.
Valuation of investments
Quoted investments had been valued at mid-market prices. However, the Board,
after discussion with the Investment Manager, have valued the investments
downwards to take account of the high volatility and poor liquidity in the
market.
Realised surpluses or deficits on the disposal of investments, impairments in
the value of investments and unrealised surpluses or deficits on the revaluation
of investments are taken to the consolidated statement of total return as
capital-realised or unrealised as applicable.
Year end exchange rates are used to translate the value of investments which are
denominated in foreign currencies.
Investment properties
Investment properties are revalued quarterly at open market value in accordance
with Statement of Standard Accounting Practice 19 "Investment Properties". As
such, no depreciation is provided on investment properties. The surplus or
deficit is included in the consolidated statement of total return and the
property revaluation reserve (to the extent that any deficit is temporary).
Permanent deficits are written off to the revenue reserve via the consolidated
statement of total return.
Properties held for resale, land and developments in progress
Properties held for resale, land and developments in progress are valued at the
lower of cost and net realisable value.
Interest
Interest on loans specifically granted for the purchase and development of new
development sites is capitalised up to the date of completion of the property.
Joint ventures
The consolidated statement of total return includes the Group's share of
operating profit, interest and attributable taxation of joint ventures. The
investment in joint ventures disclosed in the consolidated balance sheet
reflects the Group's share of net assets of those companies.
Depreciation
No depreciation is provided on investment properties. The Directors consider
that these properties should be included in the financial statements at their
open market values in order to give a true and fair view and therefore consider
it necessary to adopt Statement of Standard Accounting Practice 19 "Investment
Properties". It would be neither practical nor of real value to determine the
depreciation charge taken into account in arriving at open market values.
Plant, machinery and motor vehicles are depreciated by the straight line method
over periods of between four and five years.
Investment income
Fixed returns on debt securities are recognised on a time apportionment basis so
as to reflect the effective yield on the debt security. Interest on overseas
debt securities is shown gross of any overseas withholding tax. Interest on
United Kingdom securities is shown net of the tax credit in accordance with
Financial Reporting Standard 16 "Current Taxation". The debt securities are
accounted for on a clean basis. Bank interest is accounted for on an accruals
basis.
Expenses
All expenses are accounted for on an accruals basis. Expenses are charged
through the revenue account except as follows:
- expenses which are incidental to the acquisition of an investment are
included within the cost of the investment;
- expenses which are incidental to the disposal of an investment are
deducted from the disposal proceeds of the investment; and
- expenses are charged to the capital reserve - realised where a connection
with the maintenance or enhancement of the value of the investments can be
demonstrated. In this respect, part of the management fee, insofar as it
relates to the property, has been allocated 30 per cent to the capital
reserve - realised and 70 per cent to the revenue account, in line with
the Board's expected long-term split of returns, in the form of capital
gains and income respectively, from the property portfolio.
Finance costs
Finance costs, including dividends and other finance costs of non-equity shares,
are accounted for on an accruals basis, and in accordance with the provisions of
Financial Reporting Standard 4 "Capital Instruments".
Finance costs of debt, insofar as they relate to the financing of the Group's
properties are allocated 30 per cent to capital and 70 per cent to revenue, in
line with the Board's expected long-term split of returns, in the form of
capital gains and income respectively, from the property portfolio.
Pension costs
The expected cost of providing pensions, as calculated periodically by
professional qualified actuaries, is charged to the revenue account so as to
spread the cost over the service lives of the employees in the scheme, in such a
way that the pension cost is a substantially level percentage of current and
expected future pensionable payroll.
Financial instruments
Derivative financial instruments utilised by the Group are interest rate swaps,
caps and floors. The Group does not enter into speculative derivative contracts.
All such instruments are used for hedging purposes to alter the risk profile of
an existing underlying exposure of the Group in line with the Group's risk
management policies. Amounts payable or receivable in respect of interest rate
swaps are recognised as adjustments to interest expenses over the period of the
contracts.
Termination payments made or received are spread over the life of the underlying
exposure in cases where the underlying exposure continues to exist. In other
cases, termination payments are taken to the capital account. It is planned to
terminate the €52,300,000 loan and the £3,000,000 loans in 2002. Therefore, the
break costs to be incurred have been provided for in the 2001 financial
statements in order to take account of the fair value of these financial
instruments.
Deferred taxation
Deferred taxation is provided on timing differences, arising from the treatment
of items for accounts and taxation purposes, which are expected to reverse in
future, calculated at rates which it is estimated that tax will arise.
Operating leases
Annual rentals under operating leases are charged to the revenue account as
incurred.
Foreign currency
Transactions denominated in foreign currencies are recorded in the local
currency at actual exchange rates as at the date of the transaction or, where
appropriate, at the rate of exchange in a related forward exchange contract.
Monetary assets and liabilities denominated in foreign currencies at the period
end are reported at the rates of exchange prevailing at the period end or, where
appropriate, at the rate of exchange in a related forward exchange contract. Any
gain or loss arising from a change in exchange rates subsequent to the date of
the transaction is included as an exchange gain or loss in the consolidated
statement of total return as capital or revenue depending on whether the gain or
loss is of a capital or revenue nature respectively.
Capital reserves
Capital reserve - realised
The following are accounted for in this reserve:
- gains and losses on the realisation of investments;
- realised exchange differences of a capital nature; and
- expenses and finance, together with the related taxation effect, charged
to this reserve in accordance with the above policies.
Capital reserve - unrealised
The following are accounted for in this reserve:
- increases and decreases in the valuation of investments held at the year
end; and
- unrealised exchange differences of a capital nature.
2. CHANGE OF ACCOUNTING POLICY
Management fees and finance costs of debt, insofar as they relate to the
management and financing of the Group's listed investments, had previously been
allocated 80 per cent to capital and 20 per cent to revenue, in line with the
Board's expected long-term split of returns, in the form of capital gains and
income respectively, from the bond portfolio. However, due to the performance of
the bond portfolio during 2001, the Board has reassessed this split and feels it
is inappropriate to allocate any costs related to the Group's listed investments
to capital. Therefore, the accounting policy has been amended so that 100 per
cent of finance costs relating to the Group's listed investments have been
allocated to revenue.
The management fees and finance costs of debt, insofar as they relate to the
management and financing of the Group's property, had previously been allocated
100 per cent to revenue. However, the Board consider it more appropriate to
allocate 30 per cent of these costs to the capital reserve, in line with the
Board's expected long-term split of returns, in the form of capital gains and
income respectively from the property portfolio.
The comparative figures have been amended to reflect the changes to accounting
policy noted above. The impact due to the change in accounting policy is as
noted below:
2001 2000 (6 months)
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Transfer to/(from) reserves under the previous (1,119) (5,955) (7,074) 2,318 (1,515) 803
accounting policy / as previously stated
Adjustment as a result of now allocating 100% of
finance costs and management fees relating to the
bond portfolio to the revenue account (1,072) 1,072 - (2,210) 2,210 -
Adjustment as a result of now allocating 30% of
finance costs and management fees relating to the
property portfolio to the capital account 2,865 (2,865) - 1,276 (1,276) -
Transfer to/(from) reserves under the current 674 (7,748) (7,074) 1,384 (581) 803
accounting policy
3. ANALYSIS OF INCOME
2001 2000
(6 months)
£'000 £'000
Bond income 4,888 2,762
Sale of properties 2,230 1,571
Rental income 15,524 7,090
Management fees 658 344
Share of joint ventures 379 538
Group income 23,679 12,305
Cost of sales (4,810) (2,309)
18,869 9,996
4. MANAGEMENT FEE
The Manager of PAM High, Collins Stewart Fund Management Limited, is entitled,
under its Management Agreement with PAM High and the Company, to receive a fee
equal to 1.5 per cent of the net asset value of PAM High, paid quarterly in
arrears. Out of this fee the Manager must pay the Investment Adviser a fee equal
to 1 per cent of the net asset value of PAM High.The Manager, Collins Stewart
Fund Management Limited, is entitled under its Management Agreement to receive a
fee of £3,500,000 per annum from the Group. £900,000 per annum is charged to PAM
High, out of which the Investment Adviser to PAM High is paid a fee equal to 1
per cent per annum of the value of the investments managed. Of the balance of
£2,600,000 per annum, £800,000 per annum is charged by the Manager to CNC and,
until the conclusion of the CNC "hive-out" on 19 April 2001, the balance of
£1,800,000 per annum was offset against the continuing administration costs of
CNC. Following the conclusion of the hive-out, Collins Stewart Property Fund
Management Limited have commenced charging CNC a management fee at a rate of
£1,800,000 per annum, pro rated for the period to 31 December 2001.
On 19 April 2001, the CNC hive-out, involving the transfer of the management and
administrative employees of the CNC Group into Collins Stewart Property Fund
Management Limited, was completed.
5. INTEREST PAYABLE AND SIMILAR CHARGES
£2,300,000, provided for in interest payable and similar charges, relates to the
expected break costs of the € 52,300,000 loan and the £3,000,000 loan which are
linked to the bond portfolio.
6. TAX ON PROFIT ON ORDINARY ACTIVITIES
The Company and its Guernsey based subsidiaries PAM High and PAM Securities
Limited are exempt from Guernsey Income Tax under the Income Tax (Exempt Bodies)
(Guernsey) Ordinances 1989 and 1992 and are charged an annual exemption fee of
£600. CNC Properties Limited, a subsidiary company registered in England and
Wales, is subject to United Kingdom corporation tax.
7. MINORITY INTERESTS
(Zero Dividend Preference Shares issued by Property Acquisition and Management
Securities Limited)
2001 2000
(6 months)
£'000 £'000
Amount due to minority interests at 1 January 2001 10,446 -
Initial amount acquired - 10,000
Capital entitlement accrued during the year/period 940 446
Amount due to minority interests at 31 December 2001 11,387 10,446
Rights attached to shares
Zero Dividend Preference ("ZDP") Shareholders shall not be entitled to receive
and shall not participate in any dividends or other distributions out of the
profits of Property Acquisition and Management Securities Limited ("PAM
Securities"), a wholly owned subsidiary of the Company, available for dividend
and resolved to be distributed in respect of any accounting period or any other
income or right to participate therein.
On a return of assets on liquidation, after payment of all debts and
satisfaction of all creditors of PAM Securities, there shall be paid to ZDP
Shareholders from the surplus assets of PAM Securities an amount equal to 100p
per ZDP Share as increased daily at a compound rate as will give an entitlement
to 153.86p on the ZDP Redemption Date (five years after admission to trading),
the first increase occurring on the date the ZDP Shares are first admitted to
the Official List of the United Kingdom Listing Authority and the last on the
actual date of payment.
ZDP Shareholders will not have the right to receive notice of any general
meeting of PAM Securities or to attend or vote at any such meeting except in
respect of any resolution altering, modifying or abrogating any of the rights
and privileges attached to the ZDP Shares or to wind up PAM Securities.
8. DIVIDENDS
2001 2000
(6 months)
£'000 £'000
£1 Convertible Redeemable Preference Shares
First interim - 2.85p per share 309 305
Second interim - 2.85p per share 312 305
Third interim - 2.85p per share 312 -
933 610
£0.10 Ordinary Shares
First interim - 3.20p per share 1,840 1,434
Second interim - 3.20p per share 1,843 1,293
Third interim - 3.20p per share 1,843 -
5,526 2,727
Total dividends 6,459 3,337
9. RETURN PER ORDINARY SHARE AND DILUTED RETURN PER ORDINARY SHARE
The revenue return per Ordinary Share is based on the net revenue after non-
equity dividends of £6,200,184 (2000 - as restated: £4,111,000) and on
57,543,928 Ordinary Shares (2000: 57,377,782), being the weighted average number
of shares in issue.
The capital return per Ordinary Share is based on a net capital loss loss of
£257,748,121 (2000- as restated: £581,000) and on 57,543,928 Ordinary Shares
(2000: 57,377,782), being the weighted average number of shares in issue.
The fully-diluted returns per Ordinary Share have been calculated on the
assumption that the Convertible Redeemable Preference Shares were fully
converted on the first day of the period and on each subsequent issue at a rate
of 8 Ordinary Shares for every 10 Convertible Redeemable Preference Shares,
giving a weighted average of 66,238,968 shares (2000: 65,942,977). The revenue
return of 10.77p per Ordinary Share (2000 - as restated: 7.16p) includes the
savings of the finance costs on the Convertible Redeemable Preference Shares.
10. LISTED INVESTMENTS
After discussion with the Investment Manager, the Directors undertook to take
account of the high volatility and poor liquidity in the high yield bond market
when individually valuing listed investments instead of using mid-market prices.
This has reduced the capital return for 2001 and the net asset value as at 31
December 2001 by £2,333,897.
11. PROPERTY ASSETS
2001 2000
£'000 £'000
Land and properties held for resale 11,482 11,870
Developments in progress 2,483 4,004
13,965 15,874
Land and properties held for resale have been valued at 31 December 2001 by DTZ
Debenham Tie Leung, international property advisers. The effect of this
valuation increases the valuation carrying value of property assets by
£2,007,000 (2000: £2,225,000) to £15,972,000.
12. CALLED UP SHARE CAPITAL
2001 2000
£'000 £'000
Authorised:
200,000,000 Ordinary Shares of £0.10 each 20,000 20,000
50,000,000 Convertible Redeemable Preference Shares of £1each 50,000 50,000
70,000 70,000
Allotted and fully paid:
57,583,795 (2000: 57,477,793) Ordinary Shares of £0.10 each 5,759 5,747
10,945,262 (2000: 10,706,543) Convertible Redeemable 10,945 10,707
Preference Shares of £1 each
16,704 16,454
13. RESERVES
Share Capital Capital Property Revenue Total
premium reserve - reserve - revaluation reserve
realised unrealised reserve
£'000 £'000 £'000 £'000 £'000 £'000
As at 31 December 20001 47,413 (136) (6,476) 4,417 2,998 48,216
January 2001 as previously
stated
Prior year adjustment (note 2) - 934 - - (934) -
At 1 January 2001 as restated 47,413 798 (6,476) 4,417 2,064 48,216
Movements for the period - (7,016) (7,074) 64,269,342 674 (7,074)
Investment properties: - - - (1,019) 1,019 -
Realisation on disposals
Scrip dividend 85 - - - - 85
Purchase of scrip share in 11 - - - - 11
market
As at 31 December 2001 47,509 (6,218) (13,550) 9,740 3,757 41,238
14. NET ASSET VALUE PER SHARE AND DILUTED NET ASSET VALUE PER SHARE
The net asset value per share and the net asset values attributable to each
class of share at the year end are calculated in accordance with the Articles of
Association of the Company:
Basic net asset value per Ordinary Share is based on net assets less the nominal
value of Convertible Redeemable Preference Shares outstanding at the year end
and on 57,583,795 Ordinary Shares (2000: 57,477,793), being the number of
Ordinary Shares in issue at the year end. The analysis of Shareholders' funds
used on the face of the balance sheet has been computed in accordance with the
provisions of Financial Reporting Standard 4 "Capital Instruments".
If the current property assets were included in the accounts at 31 December 2001
at open mMarket value (as valued by DTZ Debenham Tie Leung), the net asset value
per Ordinary Share would increase from 81.61p to a pro forma net asset value per
Ordinary Share of 85.1099.13p.
Fully diluted net asset value per Ordinary Share is 87.47p (2000: 98.07p). This
has been calculated on the assumption that the Convertible Redeemable Preference
Shares were fully converted on the day of issue on the basis of 8 Ordinary
Shares for every 10 Convertible Redeemable Preference Shares held, giving a
weighted average of 66,238,968 shares (2000: 65,942,977).
If you have any queries please contact
Andrew Duquemin
Collins Stewart Fund Management Limited
TSB House
Le Truchot
St Peter Port
Guernsey
GY1 4AE
Tel: 01481 731 987
This information is provided by RNS
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