TIDMWSP
RNS Number : 6276F
Wynnstay Properties PLC
19 June 2012
Wynnstay Properties PLC
Preliminary Results for Year Ended 25th March 2012
CHAIRMAN'S STATEMENT
Since I wrote to you at this time last year, despite the
unsettled macro-economic environment prevailing throughout 2011 and
2012 which has undoubtedly adversely affected the commercial
property market, your company has been very active in its core
business of property asset management. Where lease expiries are
approaching, we have generally been able to retain existing tenants
who might otherwise have been tempted to move, thereby keeping
vacancies and associated non-recoverable costs together with bad
debts to a minimum; we have relet vacantspace to newtenants; we
havedisposed of properties that are non-coreto our long term
portfolio and where future rental and capital growth are limited in
prospect; and we have acquired new properties for the portfolio
which meet our investment criteria within our preferred geographic
area of operation. As a result, the Board is confident that its
management and investment strategy place your company in a stronger
position to continue to prosper for your benefit.
Overview of financial performance
Against this background, the financial performance for the year
may be summarised as follows:
Change 2012 2011
+31% GBP1,158,000 GBP886,000
* Profit before movement in fair value of investment
properties and taxation
* Earnings per share -74% 4.3p 16.6p
* Dividends per share, paid and proposed: - 10.5p 10.5p
* Net asset value per share: -1.3% 456p 462p
* Gearing -4.2% 50.3% 52.5%
Profit before the movement in fair value of investment
properties for the year was significantly higher than last year,
principally as a result of the sale of investment properties at
above net book value and reduced financing costs, both discussed
further below. Earnings per share were however substantially
reduced compared to the previous year due to the impact of the
reduction in the valuation of the property portfolio, which is
required to be reflected in the statement of comprehensive income
(thus affecting earnings), as well as in the statement of financial
position (thus affecting net asset value per share), as shown
above. It will be noted from this table that whilst modest changes
in the value of the portfolio from year to year can have a dramatic
impact on earnings, the impact on net asset value is far less
pronounced.
Property Management and Portfolio
As anticipated in my interim statement, property income was
somewhat lower than the previous year at GBP1.50 million (2011 -
GBP1.69 million), principally as a result of the loss of rental
income from vacant properties and from properties formerly in the
portfolio that had been sold in the previous year.
Shareholders will recall that, followingthe grant of planning
consent for the change of use of the upper floors of our office
building in Colchester, and with little prospect of future rental
and capital growth, we marketed the freehold of the property for
sale and accepted an offer. Unfortunately the sale process became
very protracted and did not eventually proceed to completion.
However, we were successful in achieving a sale at an improved
price, to another purchaserwith completion on 23rd March 2012.
Towards the end of the year, we also began negotiations to sell
our development site at Twickenham and our industrial unit at Alton
and I am pleased to report that terms have been agreed and that
since the year end the sale of Twickenham has been completed.
The proposals for our site at Twickenham had become rather drawn
out. Shareholders will recall that we obtained planning consent in
2008 for the redevelopment of the site, which then comprised four
industrial units. After considering various options, we obtained
vacant possession of the units, which had been let on a short-term
basis. To preserve our planning permission we commenced the
development by demolishing the units last Autumn whilst we
continued to explore various alternatives for the development of
the site. There was interest in the site from a number of
developers and we have recently completed the sale at a price of
GBP1.62m.Whilst this is very slightly below the year end net book
value, it is worth noting that prior to preparing our plans for its
redevelopment the book value of the property with the industrial
units was GBP900,000. As a result, even though we have incurred
some property costs, we consider that the outcome is an excellent
one for Shareholders. The sale contract also provides that, should
the purchaser obtain an improved planning consent in the next five
years, then a further payment will be due to Wynnstay.
In relation to the industrial unit at Alton, our tenants vacated
the property some time ago, leaving a sub-tenant in occupation of
part of the premises. Whilst continuing to pay rent until the end
of their lease and accepting responsibility for dilapidations, our
tenants indicated that they would not renew the lease. However, the
sub- tenants expressed an interest in purchasing the premises and
terms have been agreed for them to purchase the freehold. I hope to
have further news at the time of the Annual General Meeting.
Shortly before the end of the year, as I reported in my interim
statement, we completed the purchase of two retail warehouse units
on an estate just outside Lewes in Sussex. The units are let to two
well-known national chains, with significant unexpired terms on the
leases, and are on an established out-of-town retailing location,
with other well-known retail outlets located nearby. The
consideration of GBP1.26 million was funded from our existing
facility and the net initialyield is 7.8%.
Since the year end, we have also completedthe purchase of a
freeholdoffice property opposite the railway station in Surbiton,
Surrey. The building is let to part of the YMCA network which has
taken a new 10 year lease from December 2011 without breaks. The
consideration of GBP1.6 million was also funded from our existing
facility and the net initial yield is 7.8%. We continue to actively
seek other investment opportunities which will add shareholder
value to the portfolio.
In a busy year on the management side we have been successful in
reletting or renewing 10 leases across the estate.
As has always been the case, we believe that strong proactive
relationships with our tenants are important and we continue to
work closely with them to understand their current and future needs
and thus to reduce the incidence of tenant defaults and vacant
premises arising in the portfolio, with their attendant costs and
loss of income. As a result of this attention to detail our vacancy
rate remains low at only 2% on a rental basis and we suffered no
bad debts during the year under review.
Portfolio Valuation
As at 25 March 2012, our independent Valuers, Sanderson
Weatherall and Chesterton Humberts, have undertaken the annual
valuation of the company'sportfolio at GBP19,325,000, representing
as mentioned above, a modest fall, on a like-for-like basis of 4%,
over the valuation at the end of the prior year. This valuation is
before adjusting for estimated costs to sell of GBP36,400 for those
properties classified as non current assets held for sale at the
year end and is a satisfactory outcome given the conditions in the
commercial property market and the economy as a whole.
Following the revaluation at the year-end, the industrial sector
within the portfolio accounted for 68% by value, with the office
and retail elementscomprising 12% and 20% respectively.
Borrowings and Gearing
Net borrowings at the year-end were GBP7.19 million (2011 -
GBP7.45 million)and net gearing at the year-end was 50.7%
comparedto 52% last year.
As I have previously observed, the Company benefits from the
historically very low levels of interest payable under our
borrowing facility where the rate of interest is variable and is
linked to Libor. At present, there seems to be limited prospectof
an increase in interest rates in the immediate future, but the
Board continues to keep the position under close review. The Board
has commenced outline discussions with its bankers as regards the
refinancing of the loans that fall due in December2013. The Board
considers that the properties recently added to the portfolio and
the new leases recently completed will assist in negotiating
satisfactory terms.
Costs
As last year, our propertycosts this year have been
significantly impacted by a numberof one off costs relating to the
Twickenham site. Administrative costs were held at about the same
level as in the previous year.
Dividend
The Directors are recommending a total dividend for the year at
the same level as last year, namely 10.5p per share. An
interimdividend of 2.9p per share was paid in December 2011 and,
subject to approval of Shareholders at the Annual General Meeting,
a final dividend of 7.6p per share will be paid on 23rd July 2012
to Shareholders on the register on 29th June 2012.
The Directorshave decided to maintain their fees, together with
salary and consultancy fees in the current year, at the same level
as last year. This commitment, together with the holding of the
dividend, demonstrates the alignment of the Directors' interests
with those of the Shareholders.
Outlook
It is difficultto give a clear view given that the prospectsfor
the United Kingdom economy are uncertain, even in the medium to
long-term. Nevertheless, your Company has performed well in the
difficult conditions over the past few years and it remains in
robust health. The changes that we have made to the portfolio
should add to the quality of our earnings and the value of our
assets, delivering an improved income stream and net asset value
for Shareholders in the longer term.
Unsolicited approaches to shareholders
Shareholders are remindedthat unsolicited approaches regarding
their shares may be from fraudsters. Your attention is drawn to the
letter enclosed.
Annual General Meeting
Our Annual General Meeting will be held at the Royal Automobile
Club on Thursday 19th July 2012. As always, I would encourage as
many Shareholders as possible to attend so that they can both take
part in the formal business and meet the Board and other
Shareholders informally before and after the meeting and discuss
the Company's activities.
The Company's Annual Report & Accounts for the year ended
25th March 2012 will be posted to shareholders on Thursday and are
available to download on the Company's website
http://www.wynnstayproperties.co.uk
Colleagues and Advisers
I opened this statement with reference to the amount of activity
that has taken place this year. Wynnstay relies on the commitment,
expertiseand enthusiasm of our two executive directors - Paul
Williams,our Managing Director, and Toby Parker,our Finance
Director- to manage the company's affairs effectively
andefficiently subject tothe Board's oversight with the modest
resources made available to them. The two executive directors and
I, as your Chairman, benefit from the experience and wisdom of our
two non-executive directors - Charles Delevingne and Terence Nagle,
both of whom have spent their entire careers in commercial
property. I would like to thank all of them as well as our
advisersfor their professionalism, wise counsel and support
throughout the past year.
18th June 2012
Philip G.H. Collins
Chairman
For further information please contact:
Wynnstay Properties Plc
Toby Parker, Finance Director 020 7554 8766
Charles Stanley Securities
- Nominated Adviser 020 7149 6000
Dugald J. Carlean / Carl
Holmes
STATEMENT OF COMPREHENSIVE INCOME FOR YEAR ENDED 25TH MARCH
2012
Notes 2012 2011
GBP'000 GBP'000
Property Income 1 1,503 1,691
Property Costs 2 (182) (136)
Administrative Costs 3 (389) (389)
932 1,166
Movement in Fair Value of:
Investment Properties 9 (866) (225)
Profit/(Loss) on Sale of Investment
Property 346 (39)
Operating Income 412 902
Investment Income 5 3 6
Finance Costs 5 (123) (247)
Income before Taxation 292 661
Taxation 6 (175) (212)
Income after Taxation 117 449
Basic and diluted earnings per
share 8 4.3p 16.6p
The company has no other items of comprehensive
income.
STATEMENT OF FINANCIAL POSITION 25TH MARCH 2012
2012 2011
Notes GBP'000 GBP'000
Non Current Assets
Investment Properties 9 16,965 18,825
Other Property, Plant
and Equipment 10 - 6
Investments 12 3 3
16,968 18,834
Current Assets
Accounts Receivable 14 319 26
Cash and Cash Equivalents 966 881
1,285 907
Current Liabilities
Accounts Payable 15 (808) (757)
Income Taxes Payable (217) (240)
(1,025) (997)
Net Current Assets 2,584 1,205
Total Assets Less Current
Liabilities 19,552 20,039
Non-Current Liabilities
Bank Loans Payable 16 (7,187) (7,455)
Deferred Taxation 17 (6) (56)
Net Assets 12,359 12,528
Capital and Reserves
Share Capital 18 789 789
Treasury shares (1,570) (1,570)
Share Premium Account 1,135 1,135
Capital Redemption Reserve 205 205
Retained Earnings 11,800 11,969
12,359 12,528
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 25TH MARCH 2012
2012 2011
GBP'000 GBP'000
Cashflow from operating
activities
Income before taxation 292 661
Adjusted for:
Depreciation 6 2
Decrease in fair value of
investment properties 866 225
Interest income (3) (6)
Interest expense 123 312
Profit on financial liabilities
at fair value - (65)
(Profit)/loss on disposal
of investment properties (346) 39
Changes in:
Trade and other receivables (293) 77
Trade and other payables 51 (120)
Income taxes paid (248) (266)
Interest paid (123) (312)
Net cash from operating
activities 325 547
Cashflow from investing
activities
Interest and other income
received 3 6
Purchase of investment properties (1,330) -
Sale of investment properties 1,641 906
Net cash from investing
activities 314 912
Cashflow from financing
activities
Dividends paid (286) (286)
Repayments on bank loans (1,605) (1,045)
Drawdown on bank loans 1,337 -
Net cash from financing
activities (554) (1,331)
Net increase in cash and
cash equivalents 85 128
Cash and cash equivalents
at beginning of period 881 753
Cash and cash equivalents
at end of period 966 881
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 25th MARCH
2012
YEAR ENDED 25 MARCH 2012
Capital Share
Share Redemption Premium Treasury Retained
Capital Reserve Account Shares Earnings Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
Balance at
26 March
2011 789 205 1,135 (1,570) 11,969 12,528
Total comprehensive
income for
the year - - - - 117 117
Dividends - - - - (286) (286)
Balance at
25 March
2012 789 205 1,135 (1,570) 11,800 12,359
YEAR ENDED 25 MARCH 2011
Capital Share
Share Redemption Premium Treasury Retained
Capital Reserve Account Shares Earnings Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
Balance at
26 March
2010 789 205 1,135 (1,570) 11,806 12,365
Total comprehensive
income for
the year - - - - 449 449
Dividends
- note 7 - - - - (286) (286)
Balance at
25 March
2011 789 205 1,135 (1,570) 11,969 12,528
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH
2011
1. ACCOUNTING POLICIES
Wynnstay Properties PLC is a public limitedcompany incorporated
and domiciled in England & Wales. The principal activity of the
company is property investment, development and management. The
Company's ordinary shares are traded on the Alternative Investment
Market. The Company's registered number is 00022473.
Basis of Preparation
The Accounts have been prepared in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the EU. The
financial statements have been presented in pounds sterling being
the functional currency of the company. The financial statements
have been prepared under the historical cost basis modified for the
revaluation of investment properties, financial assets and
financial liabilities measured at fair value through profit or
loss, and investments.
The financialstatements comprise the results of the Company
drawn up to 25th March each year.
(a) New interpretations and revised standards effective for the
year ended 25 March 2012
The directors have adopted all new and revised standards and
interpretations issued by the International Accounting Standards
Board("IASB") and the International Accounting Standards Board
("IASB") and International Financial Reporting Interpretations
Committee ("IFRIC") of the IASB that are relevant to the operations
and effective for periods beginning or before 26 March 2011.
(b) Standards and Interpretations in issue but not yet
effective
The International Accounting Standards Board ("IASB") and
International Financial Reporting Interpretations Committee
("IFRIC") have issued revisions to a number of existing standards
and new interpretations with an effective date of implementation
after the date of these financial statements.
It is not anticipated that the adoption of these revised
standards and interpretations will have a material impact on the
figures included in the financial statements in the period of
initial application other than the following revisions to existing
standards.
IFRS 9: Financial Instruments - The standard makes substantial
changes to the recognition and measurement of financial assets and
financial liabilities and de-recognition of financial assets. In
the future there will only be two categories of financial assets;
those at fair value through profit and loss and those measured at
amortised cost.
Most financial liabilities will continue to be carried at
amortised cost, however, some financial liabilities will be
required to be measured at fair value through profit and loss, for
example derivative financial instruments, with changes in the
liabilities' credit risk recognised in other comprehensive
income.
The standardis effective for accounting periods beginning on or
after 1 January 2015.
IFRS 13: Fair Value Measurement - The standardoutlines a single
frameworkfor measuring fair value and the required disclosure
thereof when required or permitted by other International Financial
Reporting Standards. The standard is unlikely to impact the fair
value measurement of assets and liabilities that are currently
recognised at fair value, however there will be greater disclosure
given.
The standardis effective for accounting periods beginning on or
after 1 January 2013.
Key Sources of Estimation Uncertainty
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that may affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expenses.
Revisions to accountingestimates are recognised in the period in
which the estimate is revised if the revision affects only that
period. The key sources of estimation uncertainty that have a
significant risk of causing material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are those relating to the fair value of investmentproperties.
Investment Properties
All the company's investment properties are revalued annually
and stated at fair value at 25th March. The aggregate of any
resultingsurpluses or deficits are taken to profit or loss.
Non-current assets are classified as held for sale if their
carrying amount will be recovered through a sale transaction rather
than through continuing use. This condition is regarded as met only
when the sale is highly probable and the asset is available for
immediate sale in its present condition. Management must be
committed to the sale, which should be expected to qualify for
recognition as a completed sale within one year from the date of
classification. Non-current assets classified as held for sale are
measured at the lower of the assets' previous carrying amount and
fair value less cost to sell.
Depreciation
In accordancewith IAS 40, freehold investment properties are
included in the statement of financial position at fair value, and
are not depreciated.
Other plant and equipmentis recognised at cost and depreciated
on a straightline basis calculated at annual rates estimated to
write off each asset over its useful life of 5 years.
Disposal of Investments
The gains and losses on the disposal of investment properties
and other investments are included in the statement of
comprehensive income in the year of disposal.
Property Income
Property Income represents the value of accrued charges under
operating leases for rental of the Company's properties. Revenue is
measured at the fair value of the consideration receivable. All
income is derived in the United Kingdom.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax. Current tax is the expected tax payable on the
taxable income for the year based on the tax rate enacted or
substantially enacted at the reporting date, and any adjustment to
tax payable in respect of prior years. Taxable profit differs from
income before tax because it excludes items of income or expense
that are deductible in other years, and it further excludes items
that are never taxable or deductible.
Deferred taxation is the tax expected to be payable or
recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding
tax bases used in the computation of taxable profits, and is
accounted for using the statement of financial position liability
method. Deferred tax liabilities are recognised for all taxable
temporary differences (including unrealised gains on revaluation of
investment properties) and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be
availableagainst which deductible temporary differences can be
utilised.
The Company provides for deferred tax on investment properties
by reference to the tax that would be due on the sale of investment
properties. Deferred tax is calculated at the rates that are
expected to apply in the period when the liability is settled, or
the asset is realised. Deferred tax is charged or credited in the
statement of comprehensive income,including deferred tax on the
revaluation of investment property.
Trade and other accounts receivable
Trade and other receivables are initially measured at fair value
as reduced by appropriate allowances for estimated irrecoverable
amounts. All receivables do not carry any interest and are short
term in nature.
Cash and cash equivalents
Cash comprises cash at bank and on demand deposits. Cash
equivalents are short term (less than three months from inception),
repayable on demand and which are subject to an insignificant risk
of change in value.
Trade and other accounts payable
Trade and other payables are initiallymeasured at fair value.
All trade and other accounts payable are non-interest bearing.
Pensions
Pension contributions towards employees' pension plans are
charged to the statement of comprehensive income as incurred. The
pension scheme is a defined contribution scheme.
Financial Instruments
Derivative financial instruments are initially measured at fair
value at the contract date entered into, and subsequently measured
to their fair value at each reporting date. Derivatives are
recognised separately on the statement of financial position, when
not closely related to the host contract. Changes in the fair value
of derivativefinancial instruments that do not qualify for hedge
accounting are recognised in profit or loss.
2. PROPERTY COSTS 2012 2011
GBP'000 GBP'000
Rents payable 5 5
Empty rates 44 46
Twickenham costs 66 -
Property management 18 29
133 80
Legal fees 39 37
Agents fees 10 12
Bad debts - 7
182 136
3. ADMINISTRATIVE COSTS 2012 2011
GBP'000 GBP'000
Rents payable - operating lease
rentals 17 20
General administration, including
staff costs 329 330
Auditors' remuneration: Audit
fees 32 32
Tax services 5 5
Depreciation and amortisation 6 2
389 389
Included within General administration costs
above are pension payments made to a former
director of GBPnil (2011: GBP5,724).
4. STAFF COSTS 2012 2011
GBP'000 GBP'000
Staff costs, including Directors,
during the year were as follows:
Wages and salaries 167 166
Social security costs 18 18
Other pension costs 10 15
195 199
Details of Directors' emoluments,
totalling GBP180,479 (2011:
GBP174,989), are shown in the
Report of the Directors
No. No.
The average number of employees,
including Directors,
engaged wholly in management
and administration was: 5 5
The number of Directors for
whom the Company paid pension
benefits during the year was: 1 1
5. FINANCE COSTS (NET) 2012 2011
GBP'000 GBP'000
Interest payable on bank loans 123 312
(Profit)/Loss on financial
liabilities at fair value
through profit or loss (note
19) ...- (65)
123 247
Less: Bank interest receivable (3) (6)
120 241
6. TAXATION 2012 2011
GBP'000 GBP'000
(a) Analysis of the tax charge
for the year:
UK Corporation tax at 26% (2011:
28%) 225 237
Deferred tax - temporary differences (50) (25)
Current tax charge for the
year 175 212
(b) Factors affecting the tax
charge for the year:
Net Income before taxation 292 661
Current Year:
Corporation tax thereon at
26% (2011 - 28%) 76 185
Expenses not deductible for
tax purposes 14 8
Excess of capital allowances
over depreciation - (7)
Investment loss on fair value
not taxable 225 63
Investment gain not taxable (90) -
Marginal rate relief - (12)
225 237
7. DIVIDENDS 2012 2011
GBP'000 GBP'000
Final dividend paid in year
of 7.6p per share
(2011: 7.6 per share) 206 206
Interim dividend paid in year
of 2.9p per share
(2011: 2.9p per share) 80 80
286 286
The Board recommends the payment of a final
dividend of 7.6p per share, which will be recorded
in the Financial Statements for the year ending
25th March 2013.
8. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing
Income after Taxation attributable to Ordinary
Shareholders of GBP117,000 (2011: GBP449,000)
by the weighted average number of 2,711,617
(2011: 2,711,617) ordinary shares in issue during
the period. There are no instruments in issue
that would have the effect of diluting earnings
per share.
9. INVESTMENT PROPERTIES 2012 2011
GBP'000 GBP'000
Cost
Balance at 25th March 2011 18,825 21,290
Additions 1,330 -
Disposals - (945)
Revaluation deficit (866) (225)
19,289 18,825
Less:
Assets held for sale (note
13)
Balance at 25(th) March 2011 1,295 -
Additions 2,324 1,295
Disposals (1,295) -
Balance at 25(th) March 2012 2,324 1,295
Investment properties as at
25(th) March 2012 16,965 18,825
The Company's freehold investment properties were valued at
GBP19,325,000 by Independent Valuers, Sanderson Weatherall and
Chesterton Humberts Chartered Surveyors, as at 25th March 2012,in
accordance with the RICS Appraisal and Valuation Standards, on the
basis of Market Value, defined as:
"The estimatedamount for which a propertyshould exchange on the
date of valuationbetween a willing buyer and a willingseller in an
arm's-length transaction, after proper marketing wherein the
partieshad each acted knowledgeably, prudently and without
compulsion".
Assets held for sale of GBP2,324,000included an adjustmentto
exclude the estimated costs to sell of GBP36,400 from the
valuation.
Freehold investment properties, including assetsheld for sale
(Note 13), would have been shownat an historical cost of
GBP15,187,400 (2011: GBP16,613,000) if revaluations had not been
undertaken.
10. OTHER PROPERTY, PLANT AND EQUIPMENT
2012 2011
GBP'000 GBP'000
Cost
Balance at 25th March
2011 and
at 25th March 2012 47 47
Depreciation
Balance at 25th March
2011 41 39
Charge for the Year 6 2
Balance at 25th March
2012 47 41
Net Book Values at
25th March 2012 - 6
11. OPERATING LEASES RECEIVABLE
2012 2011
The future minimum GBP'000 GBP'000
lease payments receivable
under non-cancellable
operating leases
which expire:
Not later than one
year 1,361 1,389
Between 2 and 5 years 2,646 2,439
Over 5 years 144 197
4 4,025
Rental Income recognised in the statement of
comprehensive income amounted to GBP1,503,000
(2011: GBP1,691,000).
Typically, the properties were let for a term
of between 5 and 15 years at a market rent with
rent reviews every 5 years. The above analysis
reflects future minimum lease payments receivable
to the next break clause in the operating lease.
The properties are leased on terms where the
tenant has the responsibility for repairs and
running costs for each individual unit with
a service charge payable to cover common services
provided by the landlord on certain properties.
12. INVESTMENTS 2012 2011
GBP'000 GBP'000
Quoted investments 3 3
13. NON CURRENT ASSETS HELD 2012 2011
FOR SALE
GBP'000 GBP'000
Investment properties held for
sale 2,324 1,295
The Company anticipates that it will sell two
commercial properties within the current financial
year and, as a result, these properties have
been re-classified as held for sale. Since the
year end, the Company has completed on the sale
of a development site at Twickenham.
14. ACCOUNTS RECEIVABLE 2012 2011
GBP'000 GBP'000
Other receivables 319 26
319 26
15. ACCOUNTS PAYABLE 2012 2011
GBP'000 GBP'000
Other creditors 184 153
Accruals and deferred income 624 604
808 757
16. BANK LOANS PAYABLE 2012 2011
GBP'000 GBP'000
Bank Loan: Repayable on 17 December
2013 7,187 7,455
Interest is being charged at 1.25% per annum
over LIBOR on the loan until 17 December 2013.
The loan facility is secured by fixed charges
over a number of freehold land and buildings
owned by the Company, which at the year end
had a combined value of GBP13,443,800 (2011:
GBP11,590,000). The undrawn element of the loan
facility available at 25th March 2012 was GBP1.3million
(2011: GBP1.05million). The loan is additionally
secured by a memorandum of security over cash
deposits of GBPnil (2011: GBP300,000).
17. DEFERRED TAX
The movement in the deferred tax liability during
the year is as follows:
Deferred
Tax on
property
revaluation
GBP'000
At 26th March 2011 56
Release of provision in the
year (50)
At 25th March 2012 6
18. SHARE CAPITAL 2012 2011
GBP'000 GBP'000
Ordinary Shares of 25p each:
Authorised: 8,000,000 shares 2,000 2,000
Allotted, Called Up and Fully
Paid 789 789
All shares rank equally in respect
of Shareholder rights.
In March 2010, the company acquired 443,650 Ordinary
shares of Wynnstay Properties plc from Channel
Hotels and Properties Ltd at a price of GBP3.50
per share. These shares, representing in excess
of 14% of the total shares in issue, are held
in Treasury.
19. FINANCIAL INSTRUMENTS
The objective of the Company's policies is to manage the
Company's financial risk, secure cost effective funding for the
Company's operations and minimise the adverse effects of
fluctuations in the financial markets on the value of the Company's
financial assets and liabilities, on reported profitability and on
the cash flows of the Company.
At 25th March 2012 the Company's financial instruments comprised
borrowings and cash and cash equivalents, with short term
receivables and short term payables excluded from IFRS 7. The main
purpose of these financial instruments was to raise finance for the
Company's operations. Throughout the period under review, the
Company has not traded in any other financial instruments and the
fair value of the Company's financial assets and liabilities at
25th March 2012 is not materially different from their book value.
The Board reviews and agrees policies for managing each of these
risks and they are summarised below:
Credit Risk
The risk of financial loss due to a counterparty's failure to
honour its obligations arises principally in connection with
property leases and the investment of surplus cash.
Tenant rent payments are monitored regularlyand appropriate
action is taken to recovermonies owed or, if necessary, to
terminate the lease. Funds may be invested and loan transactions
contracted only with banks and financial institutions with a high
credit rating.
The Group has no significant concentration of credit risk
associated with trading counterparties (considered to be over 5% of
net assets) with exposure spread over a large number of
tenancies.
Concentration of credit risk exist to the extent that at 25th
March 2012 and 2011, current account and short term deposits were
held with two financial institutions, Svenska Handelsbanken AB and
C Hoare & Co . Maximum exposure to credit risk on cash and cash
equivalents at 25th March 2012 was GBP966,000 (2011:
GBP885,000).
Currency Risk
As the Company's assetsand liabilities are denominated in Pounds
Sterling, there is no exposure to currency risk.
Interest Rate Sensitivity
Financial instruments affected by interest rate risk include
loan borrowings and cash deposits. The analysis below shows the
sensitivity of the statement of comprehensive income and equity to
a 0.5% change in interest rates:
0.5% decrease 0.5% decrease
in interest in interest
rates rates
2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
Impact of net interest
payable - gain/(loss) 36 37 (36) (37)
Impact of net interest
receivable - gain/(loss) (5) (4) 5 4
Total impact on pre tax
profit and equity 31 33 (31) (33)
The net exposure of the Company to interest rate
fluctuations was as follows:
2012 2011
GBP'000 GBP'000
Floating rate borrowings (bank
loans) (7,187) (7,455)
Less: cash and cash equivalents 966 881
(6,221) (6,574)
Fair value of financial instruments
Except as detailed in the following table, management consider
the carrying amounts of financial assets and financial liabilities
recognised at amortised cost approximate to their fair value. A
comparison of book values and fair values of the Company's
financial assets and liabilities is set out below:
2012 2012 2011 2011
Book Value Fair Value Book Value Fair Value
GBP'000 GBP'000 GBP'000 GBP'000
Interest bearing borrowings
(note 16) (7,187) (7,037) (7,455) (7,213)
Total (7,187) (7,037) (7,455) (7,213)
Categories of financial instruments
2012 2011
GBP'000 GBP'000
Financial assets:
Loans and receivables 319 26
Cash and cash equivalents 966 881
Quoted investments 3 3
Total financial assets 1,288 910
Non-financial assets 19,289 20,126
Total assets 20,577 21,036
Financial liabilities at Amortised
cost: 8,212 8,452
Non-financial liabilities 6 56
Total liabilities 8,218 8,508
Shareholders' equity 12,359 12,528
Total shareholders' equity
and liabilities 20,577 21,036
The following table provides an analysis of financial
instruments as at 25th March that are measured subsequent to
initial recognition at fair value, grouped into Levels 1 to 3 based
on the degree to which the fair value is observable:
-- Level 1: fair value measurements are those derived from
quoted prices in active markets for identical assets or
liabilities.
-- Level 2: fair value measurements are those derived from
inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e as
prices) or indirectly (i.e derived from prices).
-- Level 3: fair value measurements are those derived from
valuation techniques that include inputs for the asset or liability
that are not based on observable market data.
Level 1 Level 2 Level 3 Level 4
GBP'000 GBP'000 GBP'000 GBP'000
Financial instruments
at 25 March 2012
Quoted investments 3 - - 3
3 - - 3
Level 1 Level 2 Level 3 Level 4
GBP'000 GBP'000 GBP'000 GBP'000
Financial instruments
at 25 March 2011
Derivative instruments
at fair value through
profit or loss - 65 - 65
Quoted investments 3 - - 3
3 65 - 68
Capital Management
The primary objectives of the Company's capital management
are:
-- to safeguard the Company's ability to continue as a going
concern, so that it can continue to provide returns for
shareholders: and
-- to enable the Company to respond quickly to changes in market
conditions and to take advantage of opportunities
Capital comprises shareholders equity plus net borrowings. The
Company monitors capital using loan to value and gearing ratios.
The former is calculated by reference to net borrowings as a
percentage of the year end valuation of the investment property
portfolio. Gearing ratio is the percentage of net borrowings
divided by shareholders equity. Net borrowings comprises total
borrowings less cash and cash equivalents.
The Company's policy is that the loan to value ratio should not
exceed 60% and that the gearing ratio should not exceed 100%.
2012 2011
GBP'000 GBP'000
Total Borrowings 7,187 7,455
Cash and cash equivalents (966) (881)
Net borrowings 6,221 6,574
Shareholders equity 12,359 12,528
Investment properties 19,289 20,120
Loan to value ratio 32.3% 32.7%
Gearing ratio 50.3% 52.5%
20. STATEMENT OF CASH FLOWS
Analysis of Net Debt 25th March Cash 26th March
2012 Movement 2011
GBP'000 GBP'000 GBP'000
Cash and cash equivalents (966) (85) (881)
Bank loan due after more
than one year 7,187 (268) 7,455
Net Debt 6,221 353 6,574
21. COMMITMENTS UNDER OPERATING LEASES
Future rental commitments at 25th March 2012 under
non-cancellable operating leases are as follows:-
2012 2011
GBP'000 GBP'000
Within one year 21 15
Between two to five years 5 7
26 22
22. RELATED PARTY TRANSACTIONS
The Company has entered into an agreement with
I.F.M.Consultants Ltd, a company owned and controlled
by T.J.C. Parker, a Director of the Company, for
that company to provide certain consultancy services.
During the year to 25th March 2012, I.F.M. Consultants
Ltd was paid GBP36,648 (2011: GBP33,825). There
were no other related party transactions other
than with the Directors, which have been disclosed
under Directors' Emoluments in the Report of the
Directors.
23. EVENTS after the end of the reporting period
On 27th April, the Company completed on the purchase of a
freehold office building in Surbiton for GBP1,600,000 which is let
on a long lease to the YMCA. On 11th June, the Company completed on
the sale of the freehold property in Twickenham for
GBP1,620,000.
24. SEGMENTAL REPORTING
Industrial Retail Office Total
2012 2011 2012 2011 2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Rental Income 1,020 1,100 214 299 269 292 1,503 1,691
Loss on property
investments
at fair value (866) (105) (110) (10) (866) (225)
Total income
and gain 154 995 214 189 269 282 637 1,466
Property expenses (182) (136) - - - - (182) (136)
Segment (loss)/profit (28) 859 214 189 269 282 455 1,330
Unallocated corporate
expenses (389) (389)
Profit/(Loss)
on sale of
investment property 346 (39)
Operating income 412 902
Interest expense
(all relating
to property loans) (123) (247)
Interest income
and
other income 3 6
Income before
taxation 292 661
Other information Industrial Retail Office Total
2012 2011 2012 2011 2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment assets 13,036 14,180 3,960 3,030 2,293 2,910 19,289 20,120
Segment assets
held
as security 7,191 6,015 3,960 3,030 2,293 2,545 13,444 11,590
25. ANNUAL REPORT AND ACCOUNTS
The Annual Report and Accounts for the year ended 25(th) March
2012 will be posted to shareholders on or about 20(th) June
2012.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BKFDNABKDOAD
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