TIDMHTI
RNS Number : 3582Y
Hawtin PLC
02 September 2009
HawTIN PLC ("Hawtin" or the "company")
INTERIM results
for the SIX MONTHS ended 30 jUNE 2009
The Company is pleased to announce its results for the six months ended 30 June
2009
CHAIRMAN'S STATEMENT:
Since we issued our Annual Report for 2008 and held our Annual General Meeting,
we have experienced an active period of negotiating lettings for our empty units
and are continuing to pursue some sales and further opportunities in the market.
The larger property companies have called the bottom of the market; this mirrors
our current thinking. Property indices have shown growth which is the first time
for almost two years.
Over the past few years, the Board has striven to broaden the geographical and
occupational base of the portfolio. As a result, the Board is able to see a
stabilisation of the Group property portfolio and considers values as a whole
are unchanged at the half year. This has resulted in demand for our commercial
units and we are now hopeful of being able to announce further lettings in the
coming months. We have announced the letting of our former Head Office,
Beechwood House, to ADT. We have sold some of the residential units we bought in
the Holywell portfolio as these were non-core to our normal business activities.
Our current void space now amounts to some 41% of the total portfolio which will
progressively fall as we actively market and deal with space currently under
offer or in legals during the coming months. Property companies in normal
markets achieve an industry norm of 90% occupancy levels and if Hawtin achieves
90%, which is some 30% over current lettings, this would add over GBP1m to our
profits.
Importantly we have narrowed the Loan to Value deficit and are working hard at
fully restoring our compliance with the lenders gearing covenants in the second
half of this year. We are also in advanced discussions with our main bankers,
Bank of Scotland (now part of Lloyds Banking Group), to extend our existing
facilities for a further three years beyond the current expiry date of May 2010.
The agreement of an extended term of facilities will underwrite our growth
strategy and enable us to go forward with great confidence. I am pleased to
advise that Bank of Scotland have recently approved a GBP10.85m loan advance
under the GBP50m facility in respect of a corporate acquisition, which is now in
legals, and we are moving forward towards completion which will probably take
place later this autumn. The acquisition would enhance our Loan to Value
position as well as offering good rental and capital growth opportunities.
Over the six months to 30th June we have achieved an operating profit of some
GBP1.95m (2008 - GBP1.15m) and the accounting treatment of our Interest Rate
Swaps has worked in our favour adding GBP2.0m to make an overall profit before
tax of GBP3.0m (2008 - GBP1.1m). The accounting treatment for the acquisition of
the companies that comprise the Holywell portfolio has recorded a 'profit' of
GBP1.0 million included in Other operating income, which represents the excess
of value of net assets acquired over the consideration paid of cash and Hawtin
Ordinary shares valued at 5 pence. The vendors clearly valued the shares higher
than the market value at the time based on expected future growth.The results
for the half year also include a revaluation surplus of GBP756,000 which
represents the discount to current value on the acquisition of the Nantgarw
property in January 2009. The acquisition demonstrates the Group's ability to
take advantage of opportunities and the 'discount' reflects our hard work and
expertise. Despite losing tenants because of the economic situation, turnover is
marginally up on 2008 as income and opportunity has been added to the Group's
portfolio through the Holywell and Nantgarw portfolios. Since the 31st December
2008 the Group has improved its deficit on net assets by GBP4m from the GBP6m
negative position through a combination of hard work, targeted acquisitions and
the partial reversal of the market value of the Swap adjustments. Your Board is
committed to continue these advances and maintain that the return to orderly
markets will leave the Group well placed.
We have always said that the current market offers excellent opportunities and
we hope that with the support of our bankers, Bank of Scotland, Anglo Irish Bank
and Principality Building Society, we can maximise our potential. Your Board
will not be recommending an interim dividend as it remains our view that
cash-flow is best left in the business. In view of the interest in directors'
remuneration I would advise that your board has not had any increase in salaries
since they were set in 2007 by the Remuneration Committee and no bonuses have
been authorised or taken.
A great deal of work has been undertaken in the planned re-development of
Millennium Plaza and we expect to see changes in the tenancy line up, lower
floors layout and for refurbishment to commence in the coming months. The VUE
Cinema is seeing improved trading as well and as our key anchor tenant we are
pleased with this news. The continuing development of the centre of Cardiff is
bringing increased footfall to the area and we expect not only to see a secure
role for the Plaza in this but also to play a part in this renaissance. Once St.
David's II is complete, the Cardiff City Development Team will turn its
attention to the area surrounding the Plaza and we are engaging in early
discussions.
I have to report that our colleague Stephen Morgan has resigned from his
positions as Finance Director and Company Secretary, to pursue other interests.
Steve has been with the Company for some 20 years and was a key part of the
transformation of the Group from one with retail divisions to its current
property basis. We thank him for his past services and the advice he will
continue to provide during the period of passing over his responsibilities to
Nicola Crickmore who joined as Company Secretary and Financial Accountant on 1st
July. Nicola was previously the Finance Director of Newport Holdings plc, a
fully listed property investment and development company and has spent most of
her career in the property sector.
I would like to add my thanks to all those who work for or advise the Group and
who have provided stalwart support in the past months. We look forward to a more
positive year.
Bob Carlton-Porter
1 September 2009
+------------------------------------------+------+-----------+-----------+
| HAWTIN PLC | | | |
| Consolidated Income Statement for the | | | |
| six months ended 30 June 2009 | | | |
| | | | |
+------------------------------------------+------+-----------+-----------+
| | note | Six | Six |
| | | months | months |
| | | 30 June | 30 June |
| | | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+------------------------------------------+------+-----------+-----------+
| Continuing operations | | | |
+------------------------------------------+------+-----------+-----------+
| Revenue | | 2,181 | 1,994 |
+------------------------------------------+------+-----------+-----------+
| Cost of sales | | (252) | (155) |
+------------------------------------------+------+-----------+-----------+
| Gross profit | | 1,929 | 1,839 |
+------------------------------------------+------+-----------+-----------+
| | | | |
+------------------------------------------+------+-----------+-----------+
| Other operating income | 3 | 1,061 | - |
+------------------------------------------+------+-----------+-----------+
| Revaluation gain | | 756 | - |
+------------------------------------------+------+-----------+-----------+
| Administrative expenses | | (1,029) | (690) |
+------------------------------------------+------+-----------+-----------+
| | | | |
+------------------------------------------+------+-----------+-----------+
| Profit from operations | | 2,717 | 1,149 |
+------------------------------------------+------+-----------+-----------+
| | | | |
+------------------------------------------+------+-----------+-----------+
| Financial income | 4 | 2,093 | 1,809 |
+------------------------------------------+------+-----------+-----------+
| Financial expenses | 4 | (1,772) | (1,884) |
+------------------------------------------+------+-----------+-----------+
| | | | |
+------------------------------------------+------+-----------+-----------+
| Profit before taxation | | 3,038 | 1,074 |
+------------------------------------------+------+-----------+-----------+
| | | | |
+------------------------------------------+------+-----------+-----------+
| Taxation | 5 | (511) | (94) |
+------------------------------------------+------+-----------+-----------+
| | | | |
+------------------------------------------+------+-----------+-----------+
| Profit for the year | | 2,527 | 980 |
+------------------------------------------+------+-----------+-----------+
| | | | |
+------------------------------------------+------+-----------+-----------+
| Attributable to: | | | |
+------------------------------------------+------+-----------+-----------+
| Ordinary shareholders | | 2,527 | 978 |
+------------------------------------------+------+-----------+-----------+
| Minority interests | | - | 2 |
+------------------------------------------+------+-----------+-----------+
| | | | |
+------------------------------------------+------+-----------+-----------+
| Net profit | | 2,527 | 980 |
+------------------------------------------+------+-----------+-----------+
| | | | |
+------------------------------------------+------+-----------+-----------+
| Basic and diluted profit per ordinary | 6 | 2.65p | 1.32 p |
| share | | | |
+------------------------------------------+------+-----------+-----------+
| | | | |
+------------------------------------------+------+-----------+-----------+
+-------------------------------------+----------+-----------+-----------+
| HAWTIN PLC | | | |
| Consolidated Balance Sheet | | | |
| At 30 June 2009 | | | |
| | | | |
+-------------------------------------+----------+-----------+-----------+
| | 30 June | 30 June | 31 |
| | 2009 | 2008 | December |
| | GBP'000 | GBP'000 | 2008 |
| | | | GBP'000 |
+-------------------------------------+----------+-----------+-----------+
| Non-current assets | | | |
+-------------------------------------+----------+-----------+-----------+
| Investment properties | 64,096 | 60,728 | 49,539 |
+-------------------------------------+----------+-----------+-----------+
| Deferred tax asset | - | 1,549 | 1,751 |
+-------------------------------------+----------+-----------+-----------+
| | 64,096 | 62,277 | 51,290 |
+-------------------------------------+----------+-----------+-----------+
| | | | |
+-------------------------------------+----------+-----------+-----------+
| Current assets | | | |
+-------------------------------------+----------+-----------+-----------+
| Trade and other receivables | 1,093 | 680 | 919 |
+-------------------------------------+----------+-----------+-----------+
| Derivative financial instruments | - | 1,375 | - |
+-------------------------------------+----------+-----------+-----------+
| Cash and cash equivalents | 2,157 | 2,640 | 1,809 |
+-------------------------------------+----------+-----------+-----------+
| | 3,250 | 4,695 | 2,728 |
+-------------------------------------+----------+-----------+-----------+
| | | | |
+-------------------------------------+----------+-----------+-----------+
| Current liabilities | | | |
+-------------------------------------+----------+-----------+-----------+
| Trade and other payables | (3,047) | (2,591) | (2,417) |
+-------------------------------------+----------+-----------+-----------+
| Derivative financial instruments | (3,425) | - | (5,510) |
+-------------------------------------+----------+-----------+-----------+
| Short-term borrowings and | (59,590) | (300) | (47,917) |
| overdrafts | | | |
+-------------------------------------+----------+-----------+-----------+
| | (66,062) | (2,891) | (55,844) |
+-------------------------------------+----------+-----------+-----------+
| | | | |
+-------------------------------------+----------+-----------+-----------+
| Net current (liabilities)/assets | (62,812) | 1,804 | (53,116) |
+-------------------------------------+----------+-----------+-----------+
| | | | |
+-------------------------------------+----------+-----------+-----------+
| Non-current liabilities | | | |
+-------------------------------------+----------+-----------+-----------+
| Long-term borrowings | (3,088) | (50,707) | (3,505) |
+-------------------------------------+----------+-----------+-----------+
| Cumulative preference shares | (549) | (549) | (549) |
+-------------------------------------+----------+-----------+-----------+
| | (3,637) | (51,256) | (4,054) |
+-------------------------------------+----------+-----------+-----------+
| | | | |
+-------------------------------------+----------+-----------+-----------+
| Net (liabilities)/assets | (2,353) | 12,825 | (5,880) |
+-------------------------------------+----------+-----------+-----------+
| | | | |
+-------------------------------------+----------+-----------+-----------+
| Capital & reserves | | | |
+-------------------------------------+----------+-----------+-----------+
| Equity share capital | 5,017 | 4,017 | 4,017 |
+-------------------------------------+----------+-----------+-----------+
| Equity reserve | 900 | 900 | 900 |
+-------------------------------------+----------+-----------+-----------+
| Other reserves | 3,283 | 3,265 | 3,265 |
+-------------------------------------+----------+-----------+-----------+
| Retained earnings | (11,553) | 4,643 | (14,062) |
+-------------------------------------+----------+-----------+-----------+
| Total equity | (2,353) | 12,825 | (5,880) |
+-------------------------------------+----------+-----------+-----------+
| | | | |
+-------------------------------------+----------+-----------+-----------+
| | | | |
+-------------------------------------+----------+-----------+-----------+
+--------------------------------------+-----------+-----------+------------+
| HAWTIN PLC | Six | Six | Year ended |
| Consolidated Cash Flow Statement | months | months | |
| for the six months ended 30 June | | | |
| 2009 | | | |
| | | | |
+--------------------------------------+-----------+-----------+------------+
| | 30 June | 30 June | 31 |
| | 2009 | 2008 | December |
| | GBP'000 | GBP'000 | 2008 |
| | | | GBP'000 |
+--------------------------------------+-----------+-----------+------------+
| | | | |
+--------------------------------------+-----------+-----------+------------+
| Net cash inflow from operating | 578 | 408 | 1,596 |
| activities | | | |
+--------------------------------------+-----------+-----------+------------+
| | | | |
+--------------------------------------+-----------+-----------+------------+
| Investing activities | | | |
+--------------------------------------+-----------+-----------+------------+
| Interest received | 7 | 108 | 124 |
+--------------------------------------+-----------+-----------+------------+
| Acquisition of subsidiary | (2,116) | - | - |
| undertaking | | | |
+--------------------------------------+-----------+-----------+------------+
| Cash acquired with subsidiary | 65 | - | - |
| undertaking | | | |
+--------------------------------------+-----------+-----------+------------+
| Purchase of property and equipment | (4,639) | (362) | (509) |
+--------------------------------------+-----------+-----------+------------+
| Proceeds of disposal of property | 421 | - | 138 |
+--------------------------------------+-----------+-----------+------------+
| Net cash outflow from investing | (6,262) | (254) | (247) |
| activities | | | |
+--------------------------------------+-----------+-----------+------------+
| | | | |
+--------------------------------------+-----------+-----------+------------+
| Financing activities | | | |
+--------------------------------------+-----------+-----------+------------+
| Interest paid | (1,388) | (1,775) | (3,915) |
+--------------------------------------+-----------+-----------+------------+
| Preference dividend paid | - | (18) | (36) |
+--------------------------------------+-----------+-----------+------------+
| New bank loans raised | 11,780 | - | - |
+--------------------------------------+-----------+-----------+------------+
| Bank loans repaid | (4,347) | (75) | (150) |
+--------------------------------------+-----------+-----------+------------+
| (Decrease)/increase in bank | (13) | (77) | 130 |
| overdrafts | | | |
+--------------------------------------+-----------+-----------+------------+
| Net cash inflow/(outflow)from | 6,032 | (1,945) | (3,971) |
| financing activities | | | |
+--------------------------------------+-----------+-----------+------------+
| | | | |
+--------------------------------------+-----------+-----------+------------+
| Net increase/(decrease) in cash and | 348 | (1,791) | (2,622) |
| cash equivalents | | | |
+--------------------------------------+-----------+-----------+------------+
| Cash and cash equivalents at the | 1,809 | 4,431 | 4,431 |
| beginning of the period | | | |
+--------------------------------------+-----------+-----------+------------+
| Cash and cash equivalents at the end | 2,157 | 2,640 | 1,809 |
| of the period | | | |
+--------------------------------------+-----------+-----------+------------+
| | | | |
+--------------------------------------+-----------+-----------+------------+
| | | | |
+--------------------------------------+-----------+-----------+------------+
+-------------------------------+---------+------+------+------+------+----------+--------------+
| HAWTIN PLC | |
| Consolidated Statement of Changes in Equity | |
| for the six months ended 30 June 2009 | |
+------------------------------------------------+-------------+
| | Equity | Equity | Other |Retained | Total |
| | share | reserve | reserves |earnings |attributable |
| |capital | GBP'000 | GBP'000 | GBP'000 | to equity |
| | | | | |shareholders |
| |GBP'000 | | | | GBP'000 |
+-------------------------------+---------+-------------+-------------+----------+--------------+
| At 1 January 2009 | 4,017 | 900 | 3,265 | (14,062) | (5,880) |
+-------------------------------+---------+-------------+-------------+----------+--------------+
| Shares issued to acquire | 1,000 | - | - | - | 1,000 |
| subsidiaries | | | | | |
+-------------------------------+---------+-------------+-------------+----------+--------------+
| Profit for the financial | - | - | - | 2,527 | 2,527 |
| period | | | | | |
+-------------------------------+---------+-------------+-------------+----------+--------------+
| Transfer to preference | - | - | 18 | (18) | - |
| dividend reserve | | | | | |
+-------------------------------+---------+-------------+-------------+----------+--------------+
| At 30 June 2009 | 5,017 | 900 | 3,283 | (11,553) | (2,353) |
+-------------------------------+---------+------+------+------+------+----------+--------------+
NOTES
1. The interim statement was approved by the Board of Directors on 1 September
2009 and is neither audited nor reviewed.
2. The information for the year ended 31 December 2008 does not constitute
statutory financial statements as defined in section 240 of the Companies Act
1985. A copy of those statutory financial statements for that year has been
delivered to the Registrar of Companies. The auditors' report on those
financial statements was unqualified and did not contain a statement under
section 237(2) or (3) of the Companies Act 1985. The auditors report did
however draw attention to disclosures concerning the groups ability to continue
as a going concern by way of an emphasis of matter.
In the Annual Report for the year ended 31 December 2008, the Directors
described at length the
general economic conditions that have been extremely uncertain for some time.
The comments
included detailed summaries of Loan to Value and Income Covenants associated
with borrowings from the Groups bankers. In the period since the Preliminary
Announcement of the results for the year ended 31 December 2008, the Group has
met all interest payments due and passed all income
covenants to date and have produced profit and cash flow forecasts that indicate
that all interest
payments will continue to be met and that the income covenant for Bank of
Scotland loans (now part of Lloyds Banking Group) is not under threat for the
foreseeable future. As described in the Chairmans Statement in this Interim
Report, the Group are in discussions with Bank of Scotland which are expected to
lead to extension of current facilities and rectification of Loan to Value
breaches. The Board has also continued discussions with Anglo Irish Bank and
expects their continued support in efforts to enhance the property investment
and to grant formal consent to the covenant breaches in due course.
The Directors have concluded that the reliance on continued support of the
Groups bankers
represents a material uncertainty that casts significant doubt over the Groups
ability to continue as a going concern and may not therefore be able to continue
to operate in the normal course of business. Nevertheless, after making
enquiries and considering the uncertainties described above, the Directors
believe that the situation is improving and have a reasonable expectation that
the Group will have sufficient resources to continue in operational existence
for the foreseeable future.
Accordingly, these financial statements have been prepared on a going concern
basis.
The financial statements do not include any adjustments that would result if the
going concern
assumption were not applicable.
The annual financial statements of Hawtin PLC are prepared in accordance with
IFRS adopted by the European Union. The same accounting policies, presentation
and methods of computation are followed in the condensed set of financial
statements as applied in the Group's latest annual audited financial statements
except as stated below.
Changes in Accounting Policy: in the current financial year, the Group has
adopted International Financial Reporting Statement 8 ("IFRS 8") "Operating
Segments" and International Accounting Standard 1 ("IAS 1") "Presentation of
Financial Statements" (revised 2007). IFRS 8 requires operating segments to be
identified on the basis of internal reports about components of the Group that
are regularly reviewed by the Chief Executive to manage and assess the
performance of the business segments. The financial statements for the year
ended 31 December 2009 will include segmental reporting on this basis. IAS 1
requires the presentation of a statement of changes in equity as a primary
statement. The Group has for some years voluntarily produced such a statement of
changes in equity as a primary statement.
3. Other operating income includes GBP1,026,000 of "negative goodwill" that
arose on the acquisition of the Holywell property portfolio in February 2009 and
represents the excess of net assets acquired over the fair value of the
consideration payable in cash and Hawtin ordinary shares valued at par.
4.
+---------------------------------------+-----------------+-------------------+----------------------+
| | 6 months ended | 6 months | Year ended |
| | 30 June 2009 | ended 30 June | 31 December 2008 |
| | | 2008 | |
+---------------------------------------+-----------------+-------------------+----------------------+
| Financial income | GBP000 | GBP000 | GBP000 |
+---------------------------------------+-----------------+-------------------+----------------------+
| Interest earned | 7 | 108 | 124 |
+---------------------------------------+-----------------+-------------------+----------------------+
| Movement in the value of financial | | | |
| instruments* | 2,086 | 1,701 | - |
+---------------------------------------+-----------------+-------------------+----------------------+
| | 2,093 | 1,809 | 124 |
+---------------------------------------+-----------------+-------------------+----------------------+
| Financial expenses | | | |
+---------------------------------------+-----------------+-------------------+----------------------+
| Interest on bank loans, overdrafts | | | |
| and other borrowings | 1,772 | 1,866 | 3,708 |
+---------------------------------------+-----------------+-------------------+----------------------+
| Movement in the value of financial | | | |
| instruments* | - | - | 5,184 |
+---------------------------------------+-----------------+-------------------+----------------------+
| Interest on preference shares | - | 18 | 36 |
+---------------------------------------+-----------------+-------------------+----------------------+
| | 1,772 | 1,884 | 8,928 |
+---------------------------------------+-----------------+-------------------+----------------------+
| *classed as fair value through profit | | | |
| and loss | | | |
+---------------------------------------+-----------------+-------------------+----------------------+
5. Taxation has been calculated at 28% of profit before taxation as adjusted for
indexation and reinstatement of previously written off losses, and offset
against the deferred tax asset.
6. Basic and Diluted Profit per Ordinary Share of 5 pence is based on the profit
attributable to Ordinary Shareholders of GBP2,527,000 (2008 GBP978,000) being
the Profit after taxation on an average number of shares in issue of 95,477,920
(2008 74,236,318). Diluted Profit per Ordinary Share is the same value as Basic
Profit per Ordinary Share.
7. The Directors do not propose an interim dividend on the Ordinary Shares. The
half year dividend on the 6.5% Cumulative Preference Shares was not paid on 30
June 2009 as there were no distributable reserves.
8. Copies of this statement will be circulated to shareholders and will be
available at the Registered Office of the Company, The Old Baptist Chapel,
Newport Road, Castleton, Cardiff CF3 2UR and from the Companys website
www.hawtin.co.uk, from the 2 September 2009.
Enquiries:
Hawtin PLC:
Nicola Crickmore, Company Secretary Tel: 01633 682130
Seymour Pierce Ltd:
John Depasquale Tel: 020 7107 8000
This information is provided by RNS
The company news service from the London Stock Exchange
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