TIDMWSP
RNS Number : 3415T
Wynnstay Properties PLC
14 November 2019
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this information is considered to be in the public
domain.
WYNNSTAY PROPERTIES PLC
("Wynnstay" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHSED 29TH SEPTEMBER 2019
Chairman's Statement
I am pleased to report to you on an excellent set of financial
results at Wynnstay for the period ending 29th September 2019
during which, as further described below, we completed three
transactions for the portfolio and made preparations for
forthcoming functional changes.
The financial results may be summarised as follows:
2019 2018
Property Income +11.2% GBP1,188,000 GBP1,068,000
Operating Income +11.3% GBP843,000 GBP757,000
Income before Taxation +82.4% GBP1,072,000 GBP588,000
Earnings per share +99.6% 35.1p 17.6p
Net Asset Value per share +9.2% 830p 760p
Interim Dividend per share +7.1% 7.5p 7.0p
Property Income for the half-year rose by over 11% compared to
the same period last year to GBP1,188,000 (2018 - GBP1,068,000)
with a similar percentage increase in Operating Income at
GBP843,000 (2018 - GBP757,000). This is a very creditable result,
particularly given the income foregone at Basingstoke and at
Chessington as a result of the decisions by our tenants there to
exercise break options of which I have advised you in previous
statements. On the other hand, compared to last year, we have
benefitted from a full half-year's income from our new investment
at Petersfield Trade Park, which we acquired just over a year ago,
and on which I reported this time last year.
Pre-tax Profit of GBP1,072,000 (2018 - GBP588,000) almost
doubled compared to the same period last year, reflecting two
successful disposals from the portfolio which delivered profits on
sale of GBP440,000, whereas there were no disposals in the same
period last year.
In late August, we announced that, following negotiations under
the previously reported lease and option to purchase arrangement
with our tenant at Basingstoke, we had completed the sale of the
property to the tenant for GBP1,775,000. This realised a revised
pre-tax profit, after costs, of GBP372,000. Although the process
for the sale became extended due to the planning permission
required by the purchaser, the outcome for Wynnstay was extremely
satisfactory so the wait was worthwhile.
During the half-year, having successfully sold most of our
property in St Neots for redevelopment last year, of which you are
aware from previous statements, we sold the remaining unit there to
our tenant realising a pre-tax profit, after costs, of
GBP68,000.
In late September, we announced the purchase for GBP1,840,000 of
a property adjoining our existing 18-unit industrial estate at Lake
Road, Quarry Wood, Aylesford, Kent. The property was constructed at
a similar time and to a similar specification as our estate and has
been occupied by a longstanding tenant as a single, secure
industrial unit, with an extensive yard, for many years. The
current lease runs until 24th December 2023 and the passing rent is
GBP76,000 per annum subject to an outstanding upward-only rent
review effective from 25th December 2018. Wynnstay will retain the
benefit of any increased rent from that date following settlement
of the rent review and has taken over responsibility for the rent
review negotiations.
We had been interested for some time in adding this property to
our excellent investment in Aylesford. As with our acquisition of
last year in Petersfield, it makes good commercial sense to acquire
adjoining assets where we have an existing significant and
well-established presence and can see continuing growth and/or
development opportunities.
The total acquisition cost at Aylesford of approximately GBP1.95
million, which includes stamp duty and other acquisition costs, was
funded from the Company's existing cash resources, enhanced from
the Basingstoke sale, and borrowing facilities with
Handelsbanken.
As noted in the interim financial accounts, following this
acquisition our borrowings from Handelsbanken now stand at GBP12.5
million (2018 - GBP13.5 million).
It will be recalled that in September 2018 we acquired a
development site, with planning permission for three units, next to
our trade counter estate at Petersfield. As reported in my
statement in June, we decided to make a new planning application
using a slightly different and more up-to-date design and
configuration that we consider improves the appearance and
maximises the use of the units for tenants. As with the Basingstoke
property, the planning process became rather protracted. However, I
am pleased to report that we finally received permission for the
development just before the end of this half-year and are currently
progressing the next stages to prepare for the development. In the
meantime, we continue the negotiation of agreements for leases with
prospective tenants for two of the three units.
As regards the small vacant site at the Beaver Industrial Estate
at Liphook, I explained in my statement in June that we were
advised to withdraw our original application. After taking further
expert planning advice and discussions with the planning
authorities, we expect to submit a new application shortly.
In my statement in June, I updated you on the position in
relation to our Chessington property where the tenant exercised a
break option in relation to two of the three units in June. Since
then, we have concluded satisfactory dilapidations negotiations
with the former tenant of the vacated units. These units are now
being actively marketed, both individually and together and also
with the possibility of an assignment or a new lease of the third
unit, which presently remains let until June 2021. While there has
been interest from a variety of prospective tenants in all or parts
of the property, we have yet to receive firm offers for leases.
At the time of writing, the portfolio is 94% let and we have
collected all rental income due for the current quarter commencing
29th September 2019.
In the light of the financial results, I am pleased to say that
the Board has decided to pay an increased interim dividend of 7.5p
per share (2018 - 7.0p) on 20th December 2019 to those Shareholders
on the register on 22nd November 2019. Any future increases will,
of course, depend on our financial results and our assessment of
future prospects in the light of economic conditions.
Just before the end of the half-year, we announced changes to
the Board and to our finance and company secretarial functions as a
result of Toby Parker, Finance Director and Company Secretary,
advising us of his wish to retire. Following discussions, he
resigned as a Director and as Company Secretary with effect from
30th September 2019 and agreed to be available as a consultant
until 30th October 2019 in order to effect a smooth handover to his
successors.
Toby's twelve years with Wynnstay have witnessed great changes
in our property portfolio and substantial growth in value for
shareholders. I would like to express my thanks to him for his
contribution over that period.
In reviewing our present and future needs, and taking account of
the part-time nature of our requirements, we decided to implement a
number of changes to the finance and company secretarial functions
to ensure that Wynnstay continues to have an efficient structure
and appropriate skills and resources for the size and nature of its
business.
We appointed The FD Centre Limited, a specialist provider of
part-time finance director services to small and medium-sized
("SME") businesses, to perform these services for Wynnstay from 1
October 2019. Wynnstay will be working directly with Alan Palmer
B.Bus.Sc., a Chartered Accountant and a Principal at The FD Centre
Limited. Alan has extensive experience of the commercial property
sector, with former senior roles in finance, treasury and corporate
finance in quoted property companies and now pursues a portfolio
career in finance and advisory roles for a number of SME
businesses.
We appointed Susan Wallace FCIS as Company Secretary from 1st
October 2019. Susan is a Chartered Secretary and a founding partner
of Bruce Wallace Associates Limited, a specialist provider of
company secretarial and compliance services to SME businesses and
quoted companies, which will provide her services to Wynnstay.
Both Alan Palmer and Susan Wallace will report directly to the
Board to ensure an effective and dynamic management framework that
will continue to deliver growth in long-term shareholder value.
In each statement, I draw the attention of shareholders to the
risk of "share scams", arising from unsolicited telephone calls or
online offers or approaches. Such calls, offers and approaches
typically come from fraudsters and I urge shareholders to be
vigilant. Wynnstay's website (www.wynnstayproperties.co.uk)
includes a warning and a link to other information about
unsolicited calls on the Financial Conduct Authority's website.
Next year's Annual General Meeting will be held at 150
Aldersgate Street, London EC1A 4AB on Tuesday 14th July 2020 at
11.30 a.m. As this year, refreshments will be offered prior to the
meeting. Please note the date in your diaries now and try to make
arrangements to attend the meeting. While we are pleased that a
high proportion of our shareholders take the trouble to vote at our
meetings through proxies, we welcome the opportunity to meet with
and talk to our shareholders.
Finally, on behalf of the Board, I thank you for your interest
in and support for Wynnstay, which in the case of many shareholders
is longstanding. I wish all shareholders a peaceful Happy Christmas
and convey our best wishes for 2020.
Philip G.H. Collins
14th November 2019 Chairman
1. STATEMENT OF COMPREHENSIVE INCOME
Unaudited Audited
Six months ended Year ended
29th September 29th September 25th March
2019 2018 2019
GBP'000 GBP'000 GBP'000
Property Income 1,188 1,068 2,216
Property Costs (46) (50) (81)
Administrative Costs (299) (261) (544)
--------------- --------------- -----------
Operating Income 843 757 1,591
Movement in fair value of
Investment Properties - - 771
Profit on Sale of Investment
Property 440 - 280
1,283 757 2,642
Investment Income 1 2 3
Finance Costs (212) (171) (399)
--------------- --------------- -----------
Income before Taxation 1,072 588 2,246
Taxation (119) (111) (318)
--------------- --------------- -----------
Income after Taxation 953 477 1,928
=============== =============== ===========
The company has no other items of comprehensive income.
2. STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
29th September 29th September 25th March
2019 2018 2019
GBP'000 GBP'000 GBP'000
Non-Current Assets
Investment Properties 35,519 33,593 33,695
Investments 3 3 3
-------------------------- -------------------------- -------------------------
35,522 33,596 33,698
Current Assets
Accounts Receivable 108 194 157
Cash and Cash Equivalents 882 871 959
-------------------------- -------------------------- -------------------------
990 1,065 1,116
Assets held for sale - 1,300 1,400
-------------------------- -------------------------- -------------------------
990 2,365 2,516
Current Liabilities
Accounts Payable (728) (1,174) (1,178)
Income Taxes Payable (352) (322) (232)
-------------------------- -------------------------- -------------------------
(1,080) (1,496) (1,410)
Net Current Assets (90) 869 1,106
Total Assets Less Current
Liabilities 35,432 34,467 34,804
Non-Current Liabilities
Bank Loans Payable (12,500) (13,500) (12,500)
Deferred Tax Payable (421) (346) (421)
-------------------------- -------------------------- -------------------------
(12,921) (13,846) (12,921)
Net Assets 22,511 20,621 21,883
========================== ========================== =========================
Share Capital 789 789 789
Capital Redemption
Reserve 205 205 205
Share Premium Account 1,135 1,135 1,135
Treasury shares (1,570) (1,570) (1,570)
Retained Earnings 21,952 20,062 21,324
-------------------------- -------------------------- -------------------------
22,511 20,621 21,883
========================== ========================== =========================
3. STATEMENT OF CASHFLOW
Unaudited Audited
Six months ended Year ended
29th September 29th September 25th March
2019 2018 2019
GBP'000 GBP'000 GBP'000
Cashflow from operating activities
Income before taxation 1,072 588 2,247
Adjusted for:
Increase in fair value of investment
properties - - (771)
Interest income (1) (2) (3)
Interest expense 212 171 398
Profit on disposal of investment
properties (440) - (280)
Changes in:
Trade and other receivables 49 613 651
Trade and other payables (451) 99 102
-------------- -------------- ----------
Cash generated from operations 441 1,469 2,344
Income taxes paid - - (222)
Interest paid (212) (171) (398)
-------------- -------------- ----------
Net cash from operating activities 229 1,298 1,724
============== ============== ==========
Cashflow from investing activities
Interest and other income received 1 2 3
Purchase of investment properties (1,952) (4,823) (4,924)
Sale of investment properties 1,970 - 950
Net cash from investing activities 19 (4,821) (3,971)
============== ============== ==========
Cashflow from financing activities
Dividends paid (325) (298) (488)
Drawdown on bank loans 2,000 3,260 3,260
Repayment of bank loans (2,000) - (1,000)
-------------- -------------- ----------
Net cash from financing activities (325) 2,962 1,772
============== ============== ==========
Net (decrease)/increase in cash
and cash equivalents (77) (563) (475)
Cash and cash equivalents at beginning
of period 959 1,434 1,434
-------------- -------------- ----------
Cash and cash equivalents at end
of period 882 871 959
============== ============== ==========
4. STATEMENT OF CHANGES IN EQUITY
UNAUDITED SIX MONTHSED 29TH SEPTEMBER 2019
Share Capital Share Treasury Retained Total
Capital Redemption Premium Shares Earnings
Reserve Account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 26 March 2019 789 205 1,135 (1,570) 21,324 21,883
Total comprehensive income
for the period - - - - 953 953
Dividends - - - - (325) (325)
--------------------------- ----------- ----------- ----------- ----------- --------- -------
Balance at 29 September
2019 789 205 1,135 (1,570) 21,952 22,511
=========================== =========== =========== =========== =========== ========= =======
UNAUDITED SIX MONTHSED 29TH SEPTEMBER 2018
Share Capital Share Treasury Retained Total
Capital Redemption Premium Shares Earnings
Reserve Account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 26 March 2018 789 205 1,135 (1,570) 19,884 20,443
Total comprehensive income
for the period - - - - 477 477
Dividends - - - - (299) (299)
--------------------------- ----------- ----------- ----------- ----------- --------- -------
Balance at 29 September
2018 789 205 1,135 (1,570) 20,062 20,621
=========================== =========== =========== =========== =========== ========= =======
AUDITED YEARED 25TH MARCH 2019
Share Capital Share Treasury Retained Total
Capital Redemption Premium Shares Earnings
Reserve Account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 26 March 2018 789 205 1,135 (1,570) 19,884 20,443
Total comprehensive income
for the year - - - - 1,928 1,928
Dividends - - - - (488) (488)
--------------------------- ----------- ----------- ----------- ----------- --------- -------
Balance at 25 March 2019 789 205 1,135 (1,570) 21,324 21,883
=========================== =========== =========== =========== =========== ========= =======
5. 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 2019 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 6 months periods ended 25th
September 2019 and 25th September 2018 have not been audited and
the auditors have not reported on or reviewed these interim
financial statements. The information for the year ended 25th March
2019 has been extracted from the latest published audited financial
statements.
Key Sources of Estimation Uncertainty
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that may affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expenses.
Revisions to 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, leasehold investment properties are
included at the reporting date at fair value, and are not
depreciated.
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 is recognised on a straight line basis over the
period of the lease. Revenue is measured at the fair value of the
consideration received and the company reflects any rent-free
period as and when it has been taken at the outset of the lease
rather than accounting for the lease incentives over the term of
the lease. Lease deposits are held in separate designated deposit
accounts. 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 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.
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 the statement of
comprehensive income.
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 deposits and highly liquid investments
(usually 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 25th March 2019 has been
extracted from the latest published audited financial
statements.
Pensions
Pension contributions towards an employee's pension plan are
charged to the statement of comprehensive income as incurred. The
pension plan is a defined contribution scheme.
6. DIVIDS
Payment Per share Amount absorbed
Date (pence) GBP'000
Period
6 months to 29th September 2019 21st Dec 2019 7.50 203
6 months to 29th September 2018 17th Dec 2018 7.00 190
19th July
Year ended 25th March 2019 2019 12.00 325
7. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing income after
taxation attributable to Ordinary Shareholders of GBP953,000 (2018
- GBP477,000) by the weighted average number of 2,711,617 (2018 -
2,711,617) ordinary shares in issue during the period excluding
shares held in treasury. There are no options and no instruments in
issue that would have the effect of diluting earnings per
share.
For further information please contact:
Wynnstay Properties Plc:
Paul Williams, Managing Director
020 7554 8766
paul.williams@wynnstayproperties.co.uk
Panmure Gordon (UK) Limited (Nominated Adviser and Broker):
Alina Vaskina / Ryan Lever
020 7886 2500
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR DXLFFKFFEFBL
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November 14, 2019 02:00 ET (07:00 GMT)
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