TIDMWSP
RNS Number : 2242G
Wynnstay Properties PLC
19 November 2015
WYNNSTAY PROPERTIES PLC
INTERIM REPORT
SIX MONTHS ENDED 29TH SEPTEMBER 2015
WYNNSTAY PROPERTIES PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 29TH SEPTEMBER 2015
CHAIRMAN'S STATEMENT
I am delighted to report on your company's performance for the
first half of the financial year to 29th September 2015, which can
be summarised as follows:
2015 2014
Operating income (2.0)% GBP555,000 GBP562,000
Income before Taxation (7.1)% GBP405,000 GBP436,000
Earnings per share (7.1)% 11.8p 12.7p
Net Asset value per share 14.8% 535p 466p
Interim Dividend per
share 11.1% 5.0p 4.5p
Property income for the half-year increased over the same period
last year to GBP860,000 (2014 - GBP808,000), reflecting the
contribution from the recent acquisitions as well as rent increases
from recently relet units. Operating income at
GBP555,000 (2014 - GBP562,000), and pre-tax profit of GBP405,000
(2013 - GBP436,000) were slightly lower, compared to the same
period last year, largely due to the costs incurred on our recent
acquisitions and in upgrading certain vacant properties within the
portfolio. The benefits of this expenditure should flow through to
rental income, profit and asset value later this financial year and
in the future.
The significant focus of the management and the Board over the
past six months has been on the completion of the acquisition of
the Beaver Industrial Estate, Liphook in Hampshire and on the
refurbishment and marketing of the two vacant units at Chessington,
both of which I mentioned in my statement accompanying last year's
annual report.
We completed the off-market acquisition of the Liphook estate in
late June following a period of negotiation with the
privately-owned vendor. It attracted us for a number of reasons. We
had been looking for some time to acquire another complete
industrial estate with opportunities for active management and
improvement similar to our estate at Aylesford and we consider the
Beaver Industrial Estate to be a very good fit for us in terms of
size, quality, tenant profile and location. The estate is very
close to Liphook town centre and adjacent to a substantial new
housing development. It was constructed in the 1980's and comprises
17 units of varying sizes. At the time of purchase it was let to 9
tenants on 12 separate leases with 3 units being vacant. Since June
we have let one of the vacant units and are continuing to market
the two other units. The rental income at the time of purchase was
just over GBP172,000 p.a. and is now almost GBP186,000 p.a.
following the recent letting, and with an anticipated rent roll
when fully let in the region of GBP225,000 p.a. As reported
previously the price paid was GBP2,600,000.
As mentioned in my statement at the end of last year the tenant
of two of the three units at our estate in Chessington vacated at
the year-end in March following the disposal of part of their
business. We negotiated a satisfactory cash settlement with them
regarding dilapidations and over the spring and summer have carried
out an extensive refurbishment funded by the settlement monies
received. These works were completed, within budget, by our
contractors at the end of September. There is a shortage of smaller
mixed-use flexible space of this nature in the area following a
change in planning policy permitting the conversion of offices to
residential use. This means that the remaining commercial space
potentially becomes more valuable. The two refurbished units which
now present well have been actively marketed over the summer as the
works progressed and the level of enquiries and viewings has been
encouraging. We have recently entered into negotiations with a
potential tenant for both units. I hope that we will have a
positive outcome before the year-end on which I can report to you
next June.
We have also enjoyed a busy period of management activity at our
estate at Aylesford. The largest tenant has renewed the lease of
its main premises, comprising four units, for a further five years
to 2020, whilst giving up a fifth unit, which it leased a couple of
years ago, that is now surplus to its current requirements. This
unit was immediately
relet, again for five years, to a new tenant requiring space to
operate as a sub-contractor to a larger distribution business
located nearby. The one unit at Aylesford that was vacant at the
year-end and to which I referred in June has now been relet, again
for five years, to another longstanding tenant of the estate who
required space to expand its business; and, at the same time, that
tenant has also agreed to extend the lease of its existing two
units to 2020. Finally, to complete the picture, another unit which
became vacant on the departure of the previous tenant has been
relet for ten years, at a higher rent than we previously received,
to a new tenant. Thus all the units on the Aylesford estate are
fully let and we have the benefit of an increased rental income for
a longer period.
Elsewhere in the portfolio, during the first-half of the year we
have negotiated new leases, lease extensions or lease variations
which should enhance investment value on units at Basingstoke,
Colchester, Norwich and St Neots. At the time of writing, we have
collected over 99% of the rental income due for the current quarter
commencing 29 September 2015.
During the second half of the year, we will concentrate on the
assimilation of the Liphook estate into the portfolio and on
continuing to explore opportunities to add value to the existing
portfolio, such as by change of use, by the acquisition of
neighbouring land or properties and by further development of
existing sites. We continue to seek suitable further acquisitions
although, in contrast to recent years, we have not made any firm
offers as those properties that were available did not meet our
criteria.
You will recall that last year we were able to increase both the
interim and the final dividends, with the total dividend for the
year increasing by 4.2%. The larger proportion of the increase was
paid on the interim dividend with a view to aligning further the
overall balance between the interim and final payments. In the
light of the satisfactory performance reported above, I am pleased
to say that the Directors have decided to pay an increased interim
dividend of 5.00p per share (2014 - 4.5p). The interim dividend
will be paid on 18th December 2015 to those Shareholders on the
register on 27th November 2015. However, this increase should not
be taken as any indication that the final dividend will also be
increased.
Advances in communications and technology bring great benefits.
But they also provide opportunities for unscrupulous criminals to
seek access to personal information in order to steal an
individual's financial assets. There have been several recent cases
reported in the press. One form of this fraud is unsolicited
telephone approaches to shareholders about their investments in
which the caller mentions individual holdings, such as Wynnstay
Properties. There is nothing that we can do to deter or stop these
approaches and I would urge all shareholders to be vigilant. On
Wynnstay's website (www.wynnstayproperties.co.uk), shareholders
will also find a warning and a link to other information about
unsolicited approaches regarding shares on the Financial Conduct
Authority's website.
Our Annual General Meeting next year will again be held at the
Royal Automobile Club, 89 Pall Mall, London SW1 on Wednesday 13th
July 2016 at 12 noon. I encourage shareholders to make plans to
attend the meeting and meet the Board and fellow shareholders. The
meeting provides an important forum to learn more about Wynnstay's
activities and plans, its performance and its future, formally and
informally, as well as to socialise with other shareholders. We
benefit consistently from high levels of participation in formal
voting at our meeting through proxies lodged by shareholders who
are unable to attend, but it is always encouraging to have the
opportunity to meet and talk to shareholders in person.
Finally, on behalf of the Board, I wish all shareholders a very
Happy Christmas and good health and happiness in 2016.
19th November 2015 Philip G.H. Collins
Chairman
1. ACCOUNTING POLICIES
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.
Basis of Preparation
These unaudited condensed interim financial statements have been
prepared in accordance with International Financial Reporting
Standard (IFRS) IAS 34 Interim Financial Reporting. They do not
constitute statutory accounts within the meaning of section 435 of
the Companies Act 2006.
The unaudited condensed interim financial statements should be
read in conjunction with the financial statements of the Company as
at and for the year ended 25th March 2015 which were prepared in
accordance with IFRS as adopted by the European Union and those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS, and have been reported on by the Company's auditors.
The financial information for the interim periods ended 29th
September 2015 and 29th September 2014 has not been audited and the
auditors have not reported on or reviewed these interim financial
statements. The information for the year ended 25th March 2014 has
been extracted from the latest published audited financial
statements.
Key Sources of Estimation Uncertainty
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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.
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 recognised through the
statement of comprehensive income.
Depreciation
In accordance with IAS 40, freehold and leasehold investment
properties are included at the reporting date at fair value, and
are not depreciated.
Depreciation of other plant and equipment is 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 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 received. 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 as reported in the income statement 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 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 in the statement of
comprehensive income, including deferred tax on the revaluation of
the asset.
Investments
Quoted investments are recognised as held at fair value, and are
measured at subsequent reporting dates at fair value, which is
either at the bid price, or the latest traded price, depending on
the convention of the exchange on which the investment is quoted.
Changes in fair value are recognised in profit or loss.
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 initially measured at fair value.
All trade and other accounts payable are not interest bearing.
Comparative information
The information for the year ended 25 March 2015 has been
extracted from the latest published audited financial
statements.
Pensions
Pension contribution towards employees' pension plans are
charged to the statement of comprehensive income as incurred. The
pension scheme is a defined contribution scheme.
2. DIVIDENDS
Payment Per share Amount absorbed
Period Date (pence) GBP'000
6 months to 29th
September 2015 18th Dec 2015 5.00 137
6 months to 29th
September 2014 19th Dec 2014 4.50 122
Year ended 25th 17th July
March 2015 2015 7.8 211
3. EARNINGS PER
SHARE
Basic earnings per share are calculated by dividing income after
taxation attributable to Ordinary Shareholders of GBP321,000
(2014:
GBP345,000) by the weighted average number of 2,711,617 ordinary
shares in issue during the period (2014: 2,711,617). There are no
instruments in issue that would have the effect of diluting
earnings per share.
4. UNAUDITED STATEMENT OF FINANCIAL POSITION
Six months ended Year ended
29th September 29th September 25th March
2015 2014 2015
GBP'000 GBP'000 GBP'000
Property Income 860 808 1,663
Property Costs (84) (31) (87)
Administrative Costs (221) (214) (414)
-------------- -------------- ------------------------
555 562 1,162
Movement in fair value of:
Investment Properties 1,530
Profit on Sale of Investment
Property
-------------- -------------- ------------------------
Operating Income 555 562 2,692
Investment Income 2 2
Finance Costs (152) (126) (265)
-------------- -------------- ------------------------
Income before Taxation 405 436 2,429
-------------- -------------- ------------------------
Taxation (84) (91) (210)
-------------- -------------- ------------------------
Income after Taxation 321 345 2,219
-------------- -------------- ------------------------
The company has no other
items of comprehensive income
5. UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
29th September 29th September 25th March
2015 2014 2015
GBP'000 GBP'000 GBP'000
Non Current Assets
Investment Properties 24,495 19,595 21,780
Investments 3 3 3
-------------- -------------- ----------
24,498 19,598 21,783
Current Assets
Accounts Receivable 273 226 489
Cash and Cash Equivalents 920 683 1,050
-------------- -------------- ----------
1,192 909 1,539
Current Liabilities
Accounts Payable (902) (503)
Income Taxes Payable (309) (330) (223)
-------------- -------------- ----------
(1,212) (833) (1,309)
-------------- -------------- ----------
Net Current Liabilities (19) 75 230
Total Assets Less
Current Liabilities 24,479 19,672 22,013
Non-Current Liabilities
Bank Loans Payable (9,967) (7,034) (7,621)
-------------- -------------- ----------
Net Assets 14,511 12,639 14,392
-------------- -------------- ----------
Capital and Reserves
Share Capital 789 789 789
Treasury Shares (1,570) (1,570) (1,570)
Share Premium Account 1,135 1,135 1,135
Capital Redemption
Reserve 205 205 205
Retained Earnings 13,952 12,080 13,833
-------------- -------------- ----------
14,511 12,639 14,392
-------------- -------------- ----------
6. UNAUDITED STATEMENT OF CASHFLOW
Six months ended Year ended
29th September 29th September 25 March
2015 2014 2015
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