TIDMWSP
RNS Number : 1985Q
Wynnstay Properties PLC
15 June 2015
Wynnstay Properties PLC
Preliminary Results for Year Ended 25th March 2014
CHAIRMAN'S STATEMENT
On behalf of the Board, I am delighted to report on another
encouraging year for Wynnstay. We have ended the year with the
portfolio being virtually fully-let and benefitting from an
enhanced lease profile, with the annual revaluation producing a
significant increase over the prior year and with net asset value
per share rising substantially. We made two additions to the
portfolio during the financial year and, since the year-end, we
have exchanged contracts to make a further substantial
acquisition.
Overview of financial performance
Wynnstay's financial performance for the year may be summarised
as follows:
Change 2015 2014
3.4% GBP1,663,000 GBP1,609,000
* Property income
(11.1%) GBP899,000 GBP1,011,000
* Profit before movement in fair value of investment
properties and taxation
* Earnings per share 81.8p 34.9p
* Dividends per share, paid and proposed 4.2% 12.3p 11.8p
* Net asset value per share 15.2% 531p 461p
* Net gearing 45.7% 41.4%
Property income for the year, at just over GBP1.66 million, was
slightly higher than last year, 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 under GBP900,000 were slightly lower than in the prior year
largely due to higher overall finance costs.
Our annual property revaluation delivered an increase over the
value for the prior year and the resulting surplus of GBP1,530,000
has contributed to an increase of over 15% in net asset value per
share.
Property Management and Portfolio
Wynnstay currently has a geographically dispersed portfolio
focussed in various towns in the South and East of England with 59
tenants occupying over 71 separate properties in 19 locations. At
the end of the financial year, the portfolio was virtually
fully-let, with just one small vacant unit at our Quarry Wood
Industrial Estate in Aylesford.
A considerable proportion of our tenants have been in occupation
for many years; some tenants have joined us more recently. We aim
to build strong, constructive relationships with our tenants and to
meet their changing property needs, for instance by enlargement or
reduction in space required, by undertaking alterations and
improvements to the properties or by varying lease terms, where
these are commercially practicable and beneficial.
During the course of the year, we have agreed lease renewals or
extensions of leases with 8 tenants in 4 locations and have
welcomed 7 new tenants. I reported on a number of these when I
wrote to you in November 2014 with the interim results. Since then,
we have also agreed new leases or lease extensions on one unit at
Hailsham and on two units at St Neots and we have agreed lease
variations that defer tenant breaks on two units at Basingstoke.
However, the main focus in the second half of the year has been on
our estate in Aylesford and on our property at Chessington.
At Aylesford, we are in the course of negotiations with a number
of our existing tenants with a view to facilitating moves within
the estate to accommodate their requirements which should lead to
lease extensions or new leases on a number of units. I anticipate
that these negotiations will be completed shortly and I will report
to you further with our interim results in November.
The tenant of two of our units at Chessington vacated at the
year-end following the disposal of that part of their business
occupying these premises. I am pleased to report that we negotiated
a satisfactory cash settlement with them regarding the
dilapidations that needed to be undertaken. The units are being
actively marketed and there has been some interest, but it is too
early to say whether this will lead to successful lettings. In the
meantime, we are carrying out an extensive refurbishment of the
property funded by the monies received from the outgoing tenant. I
hope that there will be progress to report to you at the time of
our interim results in November.
In addition to the trade counter acquisition in Ipswich on which
I reported to you in my statement last year, we also acquired
towards the end of the financial year a freehold retail warehouse
unit with car parking in an established out-of-town location in
Weston-super-Mare, Somerset. This is occupied by Majestic Wine on a
full repairing and insuring lease until October 2020 at an annual
rent of GBP41,500 subject to an upward only review. The price of
GBP625,000 provides, after costs, a net initial yield of 6.3%.
Shortly after the end of the financial year, we entered into
negotiations to acquire off-market an industrial estate in
Hampshire and I am pleased to report that contracts have recently
been exchanged, with completion due in the near future. The
acquisition price of GBP2.6 million will be funded from our
borrowing facility and our cash resources. Further details will be
provided with the interim results in November and in our Accounts
for the current year in due course.
Portfolio Valuation
As at 25 March 2015, our Independent Valuers, BNP Paribas Real
Estate (who have succeeded Sanderson Weatherall), have undertaken
the annual revaluation of the company's portfolio at GBP21,780,000
representing, as already mentioned, a revaluation surplus of
GBP1,530,000. The Board considers this to be an excellent
outcome.
Following the revaluation, as at the year-end, the industrial
sector within the portfolio accounted for 58% by value, with the
retail and office elements comprising 24% and 18% respectively.
Borrowings and Gearing
Total borrowings at the year-end were GBP7.6 million (2014 -
GBP6.0 million) and net gearing at the year-end was 45.7% compared
to 41.4% last year. The increased borrowings reflect the drawdown
under our borrowing facility made to facilitate the purchase of the
Ipswich and Weston-super-Mare properties during the year.
In December 2013, you will recall that 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.
Interest rates remain at an historic low level and the outlook,
according to most commentators, seems to be for limited prospect of
any meaningful increase in rates in the near future and rates are
currently not forecast in the medium term to return to the levels
prevailing in the pre-financial crisis period.
Costs
Our property costs in this year were marginally higher than in
the prior year as we invested in some improvements jointly with
tenants which are generally reflected in better lease terms. These
costs remain under strict control, as do our administrative
costs.
Dividend
In the light of the satisfactory results for the year, the Board
is recommending a total dividend for the year of 12.3p per share
(2014 - 11.8p). An increased interim dividend of 4.5p per share
(2014 - 4.2p) was paid in December
2014. Accordingly, subject to approval of Shareholders at the
Annual General Meeting, a final dividend of 7.8p per share (2014 -
7.6p) will be paid on 17th July 2015 to Shareholders on the
register on 26th June 2015.
The increase in dividends this year should not be taken as an
indication of further increases in the current year as this will
depend on performance during the year, including our ability to
maintain high levels of occupancy as well as to find suitable
additions to the portfolio.
Outlook
Along with many other businesses, Wynnstay has undoubtedly
benefitted from the greatly improved economic conditions and
prospects that have developed over the recent past. Whether these
prevail depends to a large extent upon political decisions taken by
the new government following the outcome of the recent general
election and developments affecting the UK economy, particularly
anything that affects the prospects for small and medium- sized
businesses and for consumer spending.
It is to be hoped that the election of the new government with
broadly similar economic objectives to the previous government, but
without the complications resulting from a coalition, will provide
a sound basis for continued economic growth and further increases
in employment. If this proves to be the case, it should greatly
assist both our tenants and growth prospects in the commercial
property market. Against this encouraging background, Wynnstay is
in robust health 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
In common with warnings issued by many other companies and by
regulators and in the media, I remind Shareholders that unsolicited
approaches regarding their shares may be from fraudsters. If you
are in any doubt, please refer to the letter I sent to all
Shareholders in January 2014 (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 16th July 2015. As always, I hope that as many
Shareholders as possible will take the opportunity to come to
London for the meeting and to meet the Board and other Shareholders
informally to discuss the Company's affairs as well as to take part
in the formal business.
Colleagues and Advisers
Our two executive directors - Paul Williams, our Managing
Director, and Toby Parker, our Finance Director - have continued to
manage Wynnstay with their customary efficiency and insight. The
two executive directors and I, as your Chairman, also benefit from
the wisdom and experience 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
12th June 2015
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
STATEMENT OF COMPREHENSIVE INCOME FOR YEAR ENDED 25TH MARCH
2015
Notes 2015 2014
GBP'000 GBP'000
Property Income 1,663 1,609
Property Costs 2 (87) (79)
Administrative Costs 3 (414) (443)
========= =======
1,162 1,087
Movement in Fair Value of: Investment
Properties 9 1,530 170
Profit on Sale of Investment
Property - 52
========= =======
Operating Income 2,692 1,309
Investment Income 5 2 1
Finance Costs 5 (265) (129)
========= =======
Income before Taxation 2,429 1,181
Taxation 6 (210) (235)
========= =======
Income after Taxation 2,219 946
========= =======
Basic and diluted earnings per
share 8 81.8p 34.9p
The company has no items of other comprehensive income.
STATEMENT OF FINANCIAL POSITION 25TH MARCH 2015
2015 2014
Notes GBP'000 GBP'000
Non-Current Assets
Investment Properties 9 21,780 18,515
Investments 12 3 3
======= =======
21,783 18,518
Current Assets
Accounts Receivable 13 489 267
Cash and Cash Equivalents 1,050 776
======= =======
1,539 1,043
Current Liabilities
Accounts Payable 14 (1,086) (876)
Income Taxes Payable (225) (235)
======= =======
(1,311) (1,111)
======= =======
Net Current Assets 228 68
======= =======
Total Assets Less Current Liabilities 22,011 18,450
Non-Current Liabilities
Bank Loans Payable 15 (7,621) (5,951)
======= =======
Net Assets 14,390 12,499
======= =======
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 13,831 11,940
======= =======
14,390 12,499
======= =======
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 25TH MARCH 2015
2015 2014
GBP'000 GBP'000
Cashflow from operating activities
Income before taxation 2,429 1,181
Adjusted for:
Amortisation of deferred finance costs - 3
Increase in fair value of investment properties (1,530) (170)
Interest income (2) (1)
Interest expense 265 129
Profit on disposal of investment properties - (52)
Changes in:
Trade and other receivables (221) (93)
Trade and other payables 210 31
Income taxes paid (221) (380)
Interest paid (255) (129)
========== ==========
Net cash from operating activities 675 519
========== ==========
Cashflow from investing activities
Interest and other income received 2 1
Purchase of investment properties (1,735) (945)
Sale of investment properties - 352
========== ==========
Net cash from investing activities (1,733) (592)
========== ==========
Cashflow from financing activities
Dividends paid (328) (320)
Repayments on bank loans - (5,998)
Drawdown on bank loans 1,660 6,596
========== ==========
Net cash from financing activities 1,332 278
========== ==========
Net increase in cash and cash equivalents 274 205
Cash and cash equivalents at beginning of
period 776 571
========== ==========
Cash and cash equivalents at end of period 1,050 776
========== ==========
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 25th MARCH
2015
YEAR ENDED 25 MARCH 2015
Capital Share
Share Capital Redemption Premium Treasury Retained
Reserve Account Shares Earnings Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
Balance at 26 March
2014 789 205 1,135 (1,570) 11,940 12,499
Total comprehensive
income for the year - - - - 2,219 2,219
Dividends - note
7 - - - - (328) (328)
================= ================= ========== ========== ========
Balance at 25 March
2015 789 205 1,135 (1,570) 13,831 14,390
================= ================= ========== ========== ========
YEAR ENDED 25 MARCH 2014
Capital Share Premium
Share Capital Redemption Account Treasury Retained
Reserve 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
================= ================= ========== ========== ========
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH
2015
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 and
financial assets 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 2015 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 2014.
(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:
IFRS 9: Financial Instruments
The standard makes substantial changes to the recognition and
measurement of financial assets and liabilities and de-recognition
of financial assets.
There will only be three categories of financial assets whereby
financial assets are recognised at either fair value through profit
or loss, fair value through other comprehensive income or measured
at amortised cost. On adoption of the standard, the Company will
have to re-determine the classification of its financial assets
based on the business model for each category of financial asset.
This is not considered likely to give rise to any significant
adjustments.
Financial liabilities of the Company are expected to continue to
be recognised at amortised cost. The standard is effective for
accounting periods beginning on or after 1 January 2018.
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
and subsequently measured at amortised cost 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
and subsequently measured at amortised cost. 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.
Borrowings
Interest rate borrowings are recognised at fair value, being
proceeds received less any directly attributable 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.
1.3 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 2015 2014
GBP'000 GBP'000
Rents payable - 3
Empty rates - 12
Property management 12 9
======= =======
12 24
Legal fees 22 26
Agents fees 53 29
======= =======
87 79
======= =======
3. ADMINISTRATIVE COSTS 2015 2014
GBP'000 GBP'000
Rents payable - operating lease rentals 21 20
General administration, including staff costs 357 357
Fees relating to potential equity issue - 26
Auditors' remuneration: Audit fees 32 32
Tax services 4 4
Amortisation of deferred finance costs - 3
======= =======
414 443
======= =======
4. STAFF COSTS 2015 2014
GBP'000 GBP'000
Staff costs, including Directors, during the year
were as follows:
Wages and salaries 189 178
Social security costs 21 21
Other pension costs 11 10
======= =======
221 209
======= =======
Details of Directors' emoluments, totaling GBP199,260 (2014: GBP189,393),
are shown in the Directors' Report on page 8. 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) 2015 2014
GBP'000 GBP'000
Interest payable on bank loans 265 129
Less: Bank interest receivable (2) (1)
======= =======
263 128
======= =======
6. TAXATION 2015 2014
(a) Analysis of the tax charge for the year: GBP'000 GBP'000
UK Corporation tax at 21% (2014: 23%) 225 235
Overprovision in previous year (15) -
======= =======
Total current tax charge 210 235
Deferred tax - temporary differences - -
======= =======
Tax charge for the year 210 235
======= =======
(b) Factors affecting the tax charge for the
year:
======= =======
Net Income before taxation 2,429 1,181
======= =======
Current Year:
Corporation tax thereon at 21% (2014 - 23%) 510 27
Expenses not deductible for tax purposes 19 18
Excess of capital allowances over depreciation (3) (3)
Investment gain on fair value not taxable (321) (39)
Investment gain not taxable - (13)
Other timing differences 20 -
Overprovision in previous year (15) -
======= =======
Current tax charge 210 235
======= =======
7. DIVIDENDS 2015 2014
Final dividend paid in year of 7.6p per share GBP'000 GBP'000
(2014: 7.6p per share) 206 206
Interim dividend paid in year of 4.5p per
share
======= =======
(2014: 4.2p per share) 122 114
======= =======
328 320
======= =======
The Board recommends the payment of a final dividend of 7.8P per
share, which will be recorded in the Financial Statements for the
year ending 25(th) March 2016.
8. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing Income after
Taxation attributable to Ordinary Shareholders of GBP2,219,000
(2014: GBP946,000) by the weighted average number of 2,711,617
(2014: 2,711,617) ordinary shares in issue during the period
excluding shares held as treasury. There are no instruments in
issue that would have the effect of diluting earnings per
share.
9. INVESTMENT PROPERTIES 2015 2014
GBP'000 GBP'000
Investment Properties
Balance at 25th March 2014 18,515 17,700
Additions 1,735 945
Disposals - (300)
======= =======
20,250 18,345
Revaluation Surplus 1,530 170
======= =======
Balance at 25th March 20 21,780 18,515
======= =======
The Company's freehold investment properties are carried at fair
value as at 25th March 2015. The fair value of the properties has
been calculated by independent valuers, BNP Paribas Real Estate, 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 5.5% to 10%, with an average yield of 7.89% and an
average weighted yield of 7.61% 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 decrease or increase of GBP1.36 million in the fair
value movement through profit or loss.
10. OTHER PROPERTY, PLANT AND EQUIPMENT
2015 2014
GBP'000 GBP'000
Cost
Balance at 25th March 2015 and
at 25th March 2014 47 47
Depreciation
Balance at 25th March 2014 47 41
Charge for the Year - 6
======== ========
Balance at 25th March 2015 47 47
Net Book Values at 25th March 2014 - -
and 25th March 2015
====================================== ======== ========
11. OPERATING LEASES RECEIVABLE
2015 2014
The future minimum lease payments GBP'000 GBP'000
receivable under non-cancellable operating leases
which expire:
Not later than one year 1,422 1,494
Between 2 and 5 years 2,973 2,922
Over 5 years 997 1,102
========= =========
5,392 5,518
========= =========
Rental income under operating leases recognised in the profit or
loss amounted to GBP1,663,000 (2014:
GBP1,609,000).
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 2015 2014
GBP'000 GBP'000
Quoted investments 3 3
======= =======
13. ACCOUNTS RECEIVABLE 2015 2014
GBP'000 GBP'000
Trade receivables 486 264
Other receivables 3 3
======= =======
489 267
======= =======
Trade receivables include an allowance for bad debts of
GBP28,000 (2014: GBP28,000). Trade receivables of
GBP22,600 (2014: GBP18,000) are considered past due but not
impaired.
14. ACCOUNTS PAYABLE 2015 2014
GBP'000 GBP'000
Trade payables 7 40
Other creditors 107 163
Accruals and deferred income 972 673
======= =======
1,086 876
======= =======
15. BANK LOANS PAYABLE 2015 2014
GBP'000 GBP'000
Non-current position 7,658 5,998
===========
less: deferred finance costs (37) (47)
======== ===========
7,621 5,951
======== ===========
In December 2013, the bank loan was re-financed 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 GBP21,780,000 (2014:
GBP17,155,000). The undrawn element of the borrowing facility
available at 25th March 2015 was GBP2.3million (2014:
GBP4.0million). A commitment fee of 1% per annum is payable on the
undrawn amount.
16. DEFERRED TAX
A deferred tax asset of GBP44,145 (2014: GBP250,286) in respect
of the investment property has not been recognised, as the
Directors do not intend to sell the properties and therefore
crystallise the potential deferred tax assets. If the investment
properties were to be sold, the Directors believe it is unlikely
that there would be suitable taxable profits from which the future
reversal of the underlying timing differences could be
deducted.
17. SHARE CAPITAL 2015 2014
GBP'000 GBP'000
Authorised
8,000,000 Ordinary Shares of 25p each: 2,000 2,000
Allotted, Called Up and Fully Paid
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 2015 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. 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 2015 and 2014, 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 2015 was GBP1,050,000 (2014:
GBP776,000).
Currency Risk
As all of 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 but does
not take out financial instruments to mitigate the risk. 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:
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
2015 2014 2014 2014
GBP'000 GBP'000 GBP'000 GBP'000
38 30 (38) (30)
Impact on interest payable -
gain/(loss)
Impact on interest receivable
- (loss)/gain (6) (4) 6 4
----------- ----------- ---------- ------------
Total impact on pre tax profit
and equity 32 26 (32)26 (26)
----------- ----------- ---------- ------------
The net exposure of the Company to interest rate fluctuations
was as follows:
2015 2014
GBP'000 GBP'000
Floating rate borrowings (bank loans) (7,658) (5,998)
Less: cash and cash equivalents 1,050 776
---------- ----------
(6,608) (5,222)
---------- ----------
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
2015 2015 2014 Fair Value
Book Value Fair Value Book Value GBP'000
GBP'000 GBP'000 GBP'000
Interest bearing borrowings
(note 15) (7,621) (7,672) (5,951) (5,998)
============ ============ ===========
Total (7,621) (7,672) (5,951) (5,998)
============ ============ ===========
Categories of Financial Instruments
2015 2014
GBP'000 GBP'000
Financial assets:
Quoted investments 3 3
Loans and receivables 489 267
Cash and cash equivalents 1,050 776
======= =======
Total financial assets 1,542 1,046
Non-financial assets 21,780 18,515
======= =======
Total assets 23,322 19,561
======= =======
Financial liabilities at amortised
cost 8,932 7,062
======= =======
Total liabilities 8,932 7,062
Shareholders' equity 14,390 12,499
======= =======
Total shareholders' equity and liabilities 23,322 19,561
======= =======
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'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 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%.
2015 2014
GBP'000 GBP'000
Net borrowings and overdraft 7,621 5,951
Cash and cash equivalents (1,050) (776)
======= =======
Net borrowings 6,571 5,175
======= =======
Shareholders' equity 14,390 12,499
======= =======
Investment properties 21,780 18,515
======= =======
Loan to value ratio 30.2% 28.0%
Net gearing ratio 45.7% 41.4%
19. STATEMENT OF CASH FLOWS
Analysis of Net Debt 25th March Cash 26th March
2015 Movement 2014
GBP'000 GBP'000 GBP'000
Cash and cash equivalents (1,050) (274) (776)
Bank loan 7,658 1,660 5,998
Net Debt 6,608 1,386 5,222
20. COMMITMENTS UNDER OPERATING LEASES
Future rental commitments at 25th March 2015 under non-cancellable
operating leases are as follows:-
2015 2014
GBP'000 GBP'000
Within one year 20 19
Between two to five years 3 24
23 43
21. RELATED PARTY TRANSACTIONS
The Company had 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 2015, I.F.M.
Consultants Ltd was paid GBPnil (2014: GBP38,480). 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.P. Consultants Ltd,
a company owned and controlled by T.J.C. Parker which during the
year was paid GBP40,404 (2014: GBP38,480). There were no other
related party transactions other than with the Directors, which
have been disclosed under Directors' Emoluments in the Directors'
Report on page 8.
22. EVENTS AFTER THE END OF THE REPORTING PERIOD
Shortly after the end of the financial year, the Directors
entered into negotiations off the market to acquire an industrial
estate in Hampshire. Contracts have recently been exchanged, with
completion due in the near future. The acquisition price of GBP2.6
million will be funded from the borrowing facility and cash
resources.
23. SEGMENTAL REPORTING
Industrial Retail Office Total
2015 2014 2015 2014 2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Rental Income 1,015 1,107 351 163 297 339 1,663 1,609
======== ======== ======== ======== ======== ======== ======== ========
Profit/(loss) on property
investments at fair value 1,143 230 210 25 178 (85) 1,530 170
======== ======== ======== ======== ======== ======== ======== ========
Total income and gain/(loss) 2,157 1,337 561 188 475 254 3,193 1,779
Property expenses (87) (79) - - - - (87) (79)
======== ======== ======== ======== ======== ======== ======== ========
Segment profit/(loss) 2,070 1,258 561 188 475 254 3,106 1,700
======== ======== ======== ======== ======== ========
Unallocated corporate
expenses (414) (443)
Profit on sale of investment
property 52 - - - - - 52
======== ========
Operating income 2,692 1,309
Interest expense (all
relating to property
loans) (265) (129)
Interest income and other
income 2 1
======== ========
Income before taxation 2,429 1,181
======== ========
Other information Industrial Retail Office Total
2015 2014 2015 2014 2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========== ======= ======= ======= ======== ========
Segment assets 12,605 11,462 5,245 3,300 3,930 3,753 21,780 18,515
========== ======== ======= ======= ======= ======= ======== ========
Segment assets held
as security 12,605 10,102 5,245 3,300 3,930 3,753 21,780 17,155
========== ======== ======= ======= ======= ======= ======== ========
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PKPDNNBKDBAD
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