TIDMWSP
RNS Number : 7468J
Wynnstay Properties PLC
17 June 2014
Wynnstay Properties PLC
Preliminary Results for Year Ended 25th March 2014
CHAIRMAN'S STATEMENT
I am pleased to be able to report another year of steady
progress for your Companyagainst the background of more optimistic
news of the UK economy.We continue to add to the portfolio and to
capitalise on the opportunities which arise to retain
existingtenants and to attract new ones. At the year-end,the
portfolio was fully let.
Overview of financial performance
Wynnstay's financial performance for the year may be summarised
as follows:
Change 2014 2013
-- Property income (1.2%) GBP1,609,000 GBP1,628,000
-- Profit before movement in (8.3%) GBP1,011,000 GBP1,103,000
fair value of
investment properties and taxation
-- Earnings per share 34.9p (7.1p)
-- Dividends per share, paid
and proposed: +9.3% 11.8p 10.8p
-- Net asset value per share: +5.3% 461p 438p
-- Net gearing +2.0% 41.4% 40.6%
Property income for the year, at just over GBP1.6 million, was
at a similar level to last year, albeit reflecting a number of
underlying changes arising from the active management of the
portfolio. Profits before fair value movement and taxation for the
year, at just over GBP1 million were slightly lower than in the
prior year as a result of additional administrative costs noted
below.
Our annual property revaluation delivered an increase over the
value for the prior year and the resulting surplus of
GBP170,000 has contributed, along with retained earnings and the
profit on the property disposal noted below, to an increase of over
5% in net asset value per share.
Property Management and Portfolio
It has been another very active year in the management of the
portfolio. We currently have 53 tenants occupying over 70 separate
properties on 66 leases in 18 locations. During the course of the
year we renewed or extended the existing leases of 8 tenants and
welcomed 3 new ones.
I noted two significant management achievements when I reported
to you in November: the extension until 2018 of the lease of our
office premises at Cosham to a Government Department and the
granting of a new ten year lease to a national retail business of a
vacant unit at Hertford. I reported on other changes in November
and since then we have also extended the lease of one of the
industrial units at Heathfield, renewed another lease at Norwich
and granted a lease to a new business on one of our retail units in
Colchester, which was vacated by a longstanding tenant in January
2014.
During the year, there have been two noteworthy changes in the
portfolio. As I reported in my last annual Chairman's Statement,
early in the financial year we acquired Crown Close Industrial
Estate in Hailsham, West Sussex details of which are set out in
that statement. Secondly, as foreshadowed in my statement in
November, we have successfully sold the other vacant unit at
Hertford to an owner-occupier at a price that was 17% above the net
book value.
A number of potential acquisitions have been explored and I am
pleased to report that shortly after the end of the year we agreed
and completed the purchase of a freehold trade counter investment
to the east of the centre of Ipswich, in close proximity to the
Neptune Marina development and residential development areas. The
five units comprising 18,300 square feet are fully let to three
tenants, one being part of a national chain and the two others
being regional businesses. The total passing rent is GBP86,500 and
with the price paid of GBP1,037,500, the net initial yield is 7.9%.
This acquisition, having been made after the year-end, is not
reflected in these financial statements.
Portfolio Valuation
As at 25 March 2014, our Independent Valuers, Sanderson
Weatherall, have undertaken the annual valuation of the company's
portfolio at GBP18,515,000 representing, as mentioned above, a
revaluation increase of GBP170,000. The Board consider this to be a
satisfactory outcome and it is particularly pleasing to note a
modest increase in the value of our most recent acquisitions at
Hailsham, Lewes and Surbiton.
Following the revaluation, as at the year-end, the industrial
sector within the portfolio accounted for 62% by value, with the
retail and office elements comprising 18% and 20% respectively.
Borrowings and Gearing
Total borrowings at the year-end were GBP6.0 million (2013:
GBP5.4 million) and net gearing at the year-end was 41.4% compared
to 40.6% last year. The increased borrowings reflect the drawdown
under our borrowing facility made to facilitate the purchase of our
Hailsham property in May 2013.
As you may recall, the five-year term of our borrowing facility
of GBP8.5 million with Svenska Handelsbanken expired in December
2013. In December, we signed a new five year facility of GBP10
million, the main terms of which are broadly the same as those
under the previous facility, other than an increase in the margin
to 2.65% and an increase in the non-utilization fee to 1%. This
higher margin, coupled with the increase in borrowings mentioned
above, is reflected in higher financing costs for the year compared
to the prior year.
While interest rates will undoubtedly rise as the economic
recovery becomes established, starting perhaps later in the year,
they are currently not forecast by experts to return to the
historic levels of the pre-financial crisis period.
Costs
Our property costs this year were less than in the prior year,
mainly due to the saving in the payment of business rates on vacant
premises in the year. Administrative costs are higher than in the
previous year, as we incurred some professional fees in examining
the formalities of raising further equity finance from
shareholders. These fees have been fully accrued for in these
accounts, as the Board's current intention is only to progress this
further, if conditions are then appropriate, once it appears that
the new borrowing facility will be fully utilised.
Dividend
The Board is recommending a total dividend for the year of 11.8p
per share being an increase over the 10.8p paid in the last year.
An increased interim dividend of 4.2p per share was paid in
December 2013 and the Board has considered carefully whether the
final dividend for the year should also be increased, but has
decided against doing so. Accordingly, subject to approval of
Shareholders at the Annual General Meeting, a final dividend of
7.6p per share will be paid on 18th July 2014 to Shareholders on
the register on 27th June 2014.
However, assuming favourable conditions at the end of the
half-year, the Board will again consider increasing the interim
dividend for payment in December 2014, with a view to aligning
further the overall balance between the interim and final
dividends.
Outlook
As mentioned in the opening paragraph of this statement, there
appears now to be greater optimism about the UK economy than has
been the case for more than six years. The economic outlook, and
particularly the prospects for small and medium-sized businesses,
inevitably affects the value of the commercial property in which we
invest and the terms that can be agreed with tenants. If this
improvement in optimism and outlook is sustained it should lead to
a return to rental growth which will in turn result in a further
increase in the value of your Company's portfolio.
As the UK emerges from the difficult economic conditions of
recent years, Wynnstay is in good shape and, in the Board's view,
continues to offer opportunities for profitable growth. We will
continue to make changes to enhance the value of the portfolio as
and when opportunities to do so arise.
Unsolicited approaches to Shareholders
Shareholders are reminded that unsolicited approaches regarding
their shares may be from fraudsters. If you are in any doubt,
please refer to my letter sent to all Shareholders in January this
year (also available on our website: www.wynnstayproperties.co.uk)
or to the website of the Financial Conduct Authority
(www.fca.org.uk/ consumers/scams).
Annual General Meeting
Our Annual General Meeting will be held at the Royal Automobile
Club on Thursday 10th July 2014. As always, I hope that as many
Shareholders as possible will attend to meet the Board and other
Shareholders informally before and after the meeting to discuss the
Company's affairs as well as to take part in the formal
business.
Colleagues and Advisers
Finally I would like to express my appreciation for the
contributions of our two executive directors - Paul Williams, our
Managing Director, and Toby Parker, our Finance Director - who
manage Wynnstay's affairs efficiently and effectively, as well as
with flair and determination. The two executive directors and I, as
your Chairman, also benefit from the long experience in commercial
property of our two non-executive directors - Charles Delevingne
and Terence Nagle. I would like to thank all four of them, as well
as our advisers, for their contributions over the past year.
Philip G.H. Collins
Chairman
16th June 2014
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
WYNNSTAY PROPERTIES PLC
STATEMENT OF COMPREHENSIVE INCOME FOR YEAR ENDED 25TH MARCH
2014
Notes 2014 2013
GBP'000 GBP'000
Property Income 1,609 1,628
Property Costs 2 (79) (125)
Administrative Costs 3 (443) (384)
---------- ----------
1,087 1,119
Movement in fair value of: Investment
Properties 9 170 (937)
Profit on Sale of Investment
Property 52 100
---------- ----------
Operating Income 1,309 282
Investment Income 5 1 1
Finance Costs 5 (129) (117)
---------- ----------
Income before Taxation 1,181 166
Taxation 6 (235) (359)
---------- ----------
Income/(Loss) after Taxation 946 (193)
---------- ----------
Basic and diluted earnings per
share 8 34.9p (7.1p)
The company has no items of other comprehensive income.
WYNNSTAY PROPERTIES PLC
STATEMENT OF FINANCIAL POSITION 25TH MARCH 2014
2014 2013
Notes GBP'000 GBP'000
Non Current Assets
----------- ----------
Investment Properties 9 18,515 17,700
----------- ----------
Investments 12 3 3
----------- ----------
18,518 17,703
Current Assets
Accounts Receivable 13 267 191
Cash and Cash Equivalents 776 571
----------- ----------
1,043 762
Current Liabilities
Accounts Payable 14 (876) (816)
Bank Loans Payable 15 - (5,396)
Income Taxes Payable (235) (380)
----------- ----------
(1,111) (6,592)
----------- ----------
Net Current Liabilities (68) (5,830)
----------- ----------
Total Assets Less Current Liabilities 18,450 11,873
Non-Current Liabilities
Bank Loans Payable 15 (5,951) -
----------- ----------
Net Assets 12,499 11,873
----------- ----------
Capital and Reserves
Share Capital 17 789 789
Treasury Shares (1,570) (1,570)
Share Premium Account 1,135 1,135
Capital Redemption Reserve 205 205
Retained Earnings 11,940 11,314
----------- ----------
12,499 11,873
----------- ----------
WYNNSTAY PROPERTIES PLC
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 25TH MARCH 2014
2014 2013
GBP'000 GBP'000
Cashflow from operating activities
Income before taxation 1,181 166
Adjusted for:
Amortisation of deferred finance costs 3 -
Allowance for trade receivables - 28
(Increase)/decrease in fair value of
investment properties (170) 937
Interest income (1) (1)
Interest expense 129 117
Profit on disposal of investment properties (52) (100)
Changes in:
Trade and other receivables (93) 100
Trade and other payables 31 14
Income taxes paid (380) (208)
Interest paid (129) (117)
Net cash from operating activities 519 936
========== ==========
Cashflow from investing activities
Interest and other income received 1 1
Purchase of investment properties (945) (1,672)
Sale of investment properties 352 2,424
Net cash from investing activities (592) 753
========== ==========
Cashflow from financing activities
Dividends paid (320) (293)
Repayments on bank loans (5,998) (2,850)
Drawdown on bank loans 6,596 1,059
Net cash from financing activities 278 (2,084)
========== ==========
Net (decrease)/increase in cash and
cash equivalents 205 (395)
Cash and cash equivalents at beginning
of period 571 966
Cash and cash equivalents at end of
period 776 571
========== ==========
WYNNSTAY PROPERTIES PLC
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 25th MARCH
2014
YEAR ENDED 25 MARCH
2014 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
2013 789 205 1,135 (1,570) 11,314 11,873
Total comprehensive
income for the year- - - - - 946 946
Dividends - note 7- - - - - (320) (320)
--------- ------------ --------- ----------- ---------- ----------
Balance at 25 March
2014 789 205 1,135 (1,570) 11,940 12,499
--------- ------------ --------- ----------- ---------- ----------
YEAR ENDED 25 MARCH
2013
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
2012 789 205 1,135 (1,570) 11,800 12,359
Total comprehensive
loss for the year Dividends
- note 7
Balance at 25 March
2013 - - - - (193) (193)
- - - - (293) (293)
--------- ------------ --------- ----------- ---------- ----------
789 205 1,135 (1,570) 11,314 11,873
--------- ------------ --------- ----------- ---------- ----------
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH
2014
1. BASIS OF PREPARATION, ACCOUNTING POLICIES AND ESTIMATES
Wynnstay Properties Plc is a public limited company incorporated
and domiciled in England and 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.
1.1 Basis of Preparation
The financial statements 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 financial statements comprise the results of the Company
drawn up to 25th March each year.
(a) New Interpretations and Revised Standards Effective for the
year ended 25th March 2014 The Directors have adopted all new and
revised standards and interpretations issued by the International
Accounting Standards Board ("IASB") and the International Financial
Reporting Interpretations Committee ("IFRIC") of the IASB that are
relevant to the operations and effective for accounting periods
beginning on or after 26th March 2013.
(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 an
existing standard.
IFRS 9: Financial Instruments
The standard makes substantial changes to the recognition and
measurement of financial assets and liabilities and derecognition
of financial assets. In the future, there will only be two
categories of financial assets, although there are current
proposals in issue to increase these to three. Under the current
issue, financial assets are recognised at either fair value through
profit and loss or measured at amortised cost. On adoption of the
standard, the Company will have to redetermine the classification
of its financial assets, specifically those classified as available
for sale and held to maturity financial assets. Most financial
liabilities will continue to be carried at amortised cost, however,
some financial liabilities will require to be measured at fair
value through profit or loss, for example derivative financial
instruments, with changes in the liabilities' credit risk
recognised in other comprehensive income.
The standard currently has no mandatory effective date.
1.2 ACCOUNTING POLICIES Investment Properties
All the Company's investment properties are revalued annually
and stated at fair value at 25th March. The aggregate of any
resulting surpluses 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 accordance with IAS 40, freehold investment properties are
included in the Statement of Financial Position at fair value, and
are not depreciated.
Other plant and equipment is recognised at cost and depreciated
on a straight line 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 profit or loss in the year of
disposal.
Property Income
Property income is recognised on a straight line basis over the
period of the lease. 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
available against 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 the
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 to
profit or loss, 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 are subject to an insignificant risk of
change in value.
Trade and Other Accounts Payable
Trade and other payables are initially measured at fair value.
All trade and other accounts payable are not 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.
Borrowings
Interest rate borrowings are recognised at fair value, being
proceeds received less any distributable transaction costs.
Borrowings are subsequently stated at amortised cost. Any
difference between the proceeds (net of transaction costs) and the
redemption value is recognised in profit or loss over the period of
the borrowings using the effective interest method. Borrowings are
classified as current liabilities unless the Company has an
unconditional right to defer settlement of the liability for at
least 12 months after the reporting date.
1.2 Key Sources of Estimation Uncertainty and Judgements
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 accounting estimates 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 investment properties.
There are no judgemental areas identified by management that
could have a material effect on the financial statements at the
reporting date.
2. PROPERTY COSTS 2014 2013
GBP'000 GBP'000
3 4
Rents payable
Empty rates 12 7
Twickenham costs - 1
Property management 9 43
-----------
24 55
Legal fees 26 22
-----------
Agents fees 29 20
Allowance for trade receivables - 28
-----------
79 125
----------- -----------
2013
3. ADMINISTRATIVE COSTS 2014 GBP'000
GBP'000 18
20
Rents payable - operating lease rentals
General administration, including staff costs 358 330
Fees relating to potential equity issue 26 -
Auditors' remuneration: Audit fees 32 32
Tax services 4 4
Amortisation of deferred finance costs 3 -
-----------
443 384
----------- -----------
2013
4. STAFF COSTS 2014 GBP'000
GBP'000
Staff costs, including Directors, during the
year were as follows:
Wages and salaries 178 170
Social security costs 21 22
Other pension costs 10 10
----------- -----------
209 202
----------- -----------
Details of Directors' emoluments, totaling GBP189,393 (2013:
GBP180,479), are shown in the Strategic Report on page 11. There
are no other key management personnel.
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) 2014 2013
GBP'000 GBP'000
129
117
Interest payable on bank loans
Less: Bank interest receivable (1) (1)
----------- -----------
128 116
----------- -----------
6. TAXATION 2014 2013
GBP'000 GBP'000
(a) Analysis of the tax charge for the year:
UK Corporation tax at 23% (2013: 24%) 235 380
Overprovision in previous year - (15)
----------- -----------
Total current tax charge 235 365
Deferred tax - temporary differences - (6)
----------- -----------
Tax charge for the year 235 359
----------- -----------
(b) Factors affecting the tax charge for the
year: Net Income before taxation 1,181 166
----------- -----------
Current Year:
Corporation tax thereon at 23% (2013 - 24%) 272 40
Expenses not deductible for tax purposes 18 7
Excess of capital allowances over depreciation (3) (5)
Investment (gain)/loss on fair value allowable (39) 225
Investment gain not taxable (13) (24)
Investment gain taxable - 137
Overprovision in previous year - (15)
Deferred tax - (6)
----------- -----------
Current tax charge 235 359
----------- -----------
7. DIVIDENDS 2014 2013
GBP'000 GBP'000
Final dividend paid in year of 7.6p per share
206 206
(2013: 7.6p per share)
Interim dividend paid in year of 4.2p per
share (2013: 3.2p per share) 114 87
----------- -----------
320 293
----------- -----------
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 2015.
8. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing Income after
Taxation attributable to Ordinary Shareholders of GBP946,000 (2013:
loss GBP193,000) by the weighted average number of 2,711,617 (2013:
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 2014 2013
GBP'000 GBP'000
Investment Properties
Balance at 25th March 2013 17,700 19,289
Additions 945 1,672
Disposals (300) (2,324)
18,345 18,637
Revaluation Surplus/ (Deficit) 170 (937)
Balance at 25th March 2014 18,515 17,700
Less:
Assets Held for Sale
Balance at 25th March 2013 - 2,324
Disposals - (2,324)
Balance at 25th March 2014 18,515 -
Investment properties at 25th March 2013 18,515 17,700
The Company's freehold investment properties are carried at fair
value as at 25th March 2014. The fair value of the properties has
been calculated by independent valuers, Sanderson Weatherall, on
the basis of market value, defined as:
"The estimated amount for which a property should exchange on
the date of 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."
These recurring fair value measurements for non-financial assets
use inputs that are not based on observable market data, and
therefore fall within level 3 of the fair value hierarchy.
The significant unobservable market data used is property yields
which range from 6% to 11%, with an average yield of 8.44% and an
average weighted yield of 5.56% for the portfolio.
There have been no transfers between levels of the fair value
hierarchy. Movements in the fair value are recognised in profit or
loss.
A 0.5% increase or decrease in the yield would result in a
corresponding increase or decrease of GBP92,575 in the fair value
movement through profit or loss.
10. OTHER PROPERTY, PLANT AND EQUIPMENT
2014 2013
GBP'000 GBP'000
Cost
Balance at 25th March 2013 and
at 25th March 2014 47 47
Depreciation
Balance at 25th March 2013 47 41
Charge for the Year - 6
Balance at 25th March 2014 47 47
Net Book Values at 25th March 2013
and 25th March 2014 - -
11. OPERATING LEASES RECEIVABLE
2014 2013
The future minimum lease payments GBP'000 GBP'000
receivable under non-cancellable operating
leases which expire:
Not later than one year 1,494 1,366
Between 2 and 5 years 2,922 2,583
Over 5 years 1,102 1,141
----------- -----------
5,518 5,090
----------- -----------
Rental income recognised in the profit or loss amounted to
GBP1,609,000 (2013: GBP1,628,000).
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 maturity 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 2014 2013
GBP'000 GBP'000
3 3
Quoted investments
----------- -----------
13. ACCOUNTS RECEIVABLE 2014 2013
GBP'000 GBP'000
264 182
Trade receivables
Other receivables 3 9
----------- -----------
267 191
----------- -----------
Trade receivables include an allowance for bad debts of
GBP28,000 (2013: GBP28,000). Trade receivables of
GBP18,000 (2013: GBP8,000) are considered past due but not
impaired.
14. ACCOUNTS PAYABLE 2014 2013
GBP'000 GBP'000
40 20
Trade payables
Other creditors 163 125
Accruals and deferred income 673 671
----------- -----------
876 816
----------- -----------
15. BANK LOANS PAYABLE 2014 2013
GBP'000 GBP'000
- 5,396
Current position
Non-current position 5,998 -
less: deferred finance costs (47) -
----------- --- -----------
5,951 5,396
----------- --- -----------
The bank loan was re-financed in the year providing a credit
facility of up to GBP10 million. Interest was charged at 1.25% per
annum over LIBOR on funds drawn down until 17th December 2013 and
at 2.65% per annum over LIBOR thereafter.
The loan is repayable in one instalment on 18 December 2018. The
bank loan includes the following financial covenants:
-- Rental income shall not be less than 2.25 times the interest costs
-- The bank loan shall at no time exceed 50% of the market value
of the properties secured.
The borrowing 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 GBP17,155,000 (2013:
GBP13,380,000). The undrawn element of the borrowing facility
available at 25th March 2014 was GBP4.0million (2013:
GBP3.1million). A commitment fee of 1% per annum is payable on the
undrawn amount. In the accounts for the year ended 25th March 2013,
as the borrowing facility expired and the funds drawn down were
repayable on 17th December 2013, it was treated as a current
liability.
16. DEFERRED TAX
A deferred tax asset of GBP250,286 (2013: GBP291,751) has not
been recognised, as the Directors believe it is unlikely that there
will be suitable taxable profits in the foreseeable future from
which the future reversal of the underlying timing differences can
be deducted.
17. SHARE CAPITAL
2014 2013
GBP'000 GBP'000
Authorised
8,000,000 Ordinary Shares of 25p each:
Allotted, Called Up and Fully Paid 2,000 2,000
3,155,267 ordinary shares of 25p each 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.
18. 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 2014 the Company's financial instruments comprised
borrowings and cash at bank and in hand, 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 2014 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 regularly and appropriate
action is taken to recover monies owed or, if necessary, to
terminate the lease. Funds are invested and loan transactions
contracted only with banks and financial institutions with a high
credit rating.
The Company 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 exists to the extent that at 25th
March 2014 and 2013, 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 2014 was GBP776,000 (2013:
GBP571,000).
Currency Risk
As the Company's assets and liabilities are denominated in
Pounds Sterling, there is no exposure to currency risk.
Interest Rate Risk
The Company is exposed to cash flow interest rate risk as it
currently borrows at floating interest rates. The Company monitors
and manages its interest rate exposure on a periodic basis. The
Company finances its operations through a combination of retained
profits and bank borrowings.
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% increase 0.5% decrease
in interest rates in interest rates
2014 2013 2014 2013
GBP'000 GBP'000 GBP'000 GBP'000
30 27 (30) (27)
Impact on interest payable -
gain/(loss)
Impact on interest receivable
- (loss)/gain (4) (3) 4 3
---------- ---------- ---------- ----------
Total impact on pre tax profit
and equity 26 24 (26) (24)
---------- ---------- ---------- ----------
2014 2013
The net exposure of the Company to interest
rate fluctuations was as follows:
GBP'000 GBP'000
Floating rate borrowings (bank loans) (5,998) (5,396)
Less: cash and cash equivalents 776 571
---------- ----------
(5,222) (4,825)
---------- ----------
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.
2014 2014 2013 2013
Book Value Fair Value Book Value Fair Value
GBP'000 GBP'000 GBP'000 GBP'000
Interest bearing
borrowings (note
15) (5,951) (5,998) (5,396) (5,411)
Total (5,951) (5,998) (5,396) (5,411)
Categories of Financial Instruments
Financial assets:
2014 2013
GBP'000 GBP'000
Financial assets:
Quoted investments 3 3
Loans and receivables 267 191
Cash and cash equivalents 776 571
Total financial assets 1,046 765
Non-financial assets 18,515 17,700
Total assets 19,561 18,465
Financial liabilities at amortised
cost 7,062 6,592
Total liabilities 7,062 6,592
Shareholders' equity 12,499 11,873
Total shareholders' equity and liabilities 19,530 18,465
The only financial instruments measured subsequent to initial
recognition at fair value as at 25th March are quoted investments.
These are included in level 1 in the IFRS 7 hierarchy as they are
based on quoted prices in active markets.
Capital Management
The primary objectives of the Company's capital management
are:
-- to safeguard the Company'sability to continueas a going
concern, so that it can continueto provide returns for
shareholders: and
-- to enable the Company to respond quickly to changes in market
conditionsand 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 total net debt 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 comprise total
borrowings less cash and cash equivalents.
The Company's policy is that the loan to value ratio should not
exceed 50% and the gearing ratio should not exceed 100%.
2014 2013
GBP'000 GBP'000
5,951
5,396
Net borrowings and overdraft
Cash and cash equivalents (776) (571)
---------- ----------
Net borrowings 5,175 4,825
---------- ----------
Shareholders' equity 12,499 11,873
---------- ----------
Investment properties 18,515 17,700
---------- ----------
Loan to value ratio 28.0% 27.3%
Net gearing ratio 41.4% 40.6%
19. STATEMENT OF CASH FLOWS
Analysis of Net Debt
25th March Cash 26th March
2014 Movement 2013
GBP'000 GBP'000 GBP'000
Cash and cash equivalents (776) (205) (571)
Bank loan 5,998 602 5,396
Net Debt 5,222 397 4,825
20. COMMITMENTS UNDER OPERATING LEASES
Future rental commitments at 25th March 2014 under
non-cancellable operating leases are as follows:-
2014 2013
GBP'000 GBP'000
Within one year 19 22
Between two to five years 24 3
--------- ---------
43 25
--------- ---------
21. 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 2014, I.F.M. Consultants
Ltd was paid GBP38,480 (2013: GBP36,648). There were no other
related party transactions other than with the Directors, which
have been disclosed under Directors' Emoluments in the Strategic
Report on page 11. As of 26th March 2014, the Company terminated
its agreement with I.F.M. Consultants Ltd and entered into a new
agreement with T.J.C. Consultants Ltd, a company owned and
controlled by T.J.C. Parker.
22. EVENTS AFTER THE END OF THE REPORTING PERIOD
On 29th April 2014, the Company completed the purchase of an
18,300 sq ft trade counter investment in Ipswich at a cost of
GBP1,037,500 with a passing rent of GBP86,500 representing a net
initial yield of 7.9%. This was financed by drawing down funds
available under our borrowing facility.
23. SEGMENTAL REPORTING
Industrial Retail Office Total
2014 2013 2014 2013 2014 2013 2014 2013
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
1,107 163 339 1,609
1,068 195 365 1,628
Rental Income
Profit/(loss)
on
property
investments
at fair value 230 (163) 25 (685) (85) (90) 170 (937)
---------- ---------- ---------- ---------- ---------- ---------- --- ---------- ----------
Total income
and
gain/(loss) 1,337 906 188 (490) 254 275 1,779 691
Property
expenses (79) (125) - - - - (79) (125)
---------- ---------- ---------- ---------- ---------- ---------- --- ---------- ----------
Segment
profit/(loss) 1,258 781 188 (490) 254 275 1,700 566
---------- ---------- ---------- ---------- ---------- ----------
Unallocated
corporate
expenses (443) (384)
Profit on sale
of
investment
property 52 100 - - - - 52 100
---------- ----------
Operating
income 1,309 282
Interest
expense
(all relating
to
property
loans) (129) (117)
Interest income
and
other income 1 1
---------- ----------
Income before
taxation 1,181 166
---------- ----------
Other information Industrial Retail Office Total
2014 2013 2014 2013 2014 2013 2014 2013
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment assets 11,462 10,588 3,300 3,275 3,753 3,837 18,515 17,700
--------- --------- --------- --------- --------- --------- --------- ---------
Segment assets held 6,143 6,268 3,300 3,275 3,753 3,837 13,196 13,380
--------- --------- --------- --------- --------- --------- --------- ---------
as security
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR QKADKABKDFAD
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