TIDMKEIF
RNS Number : 6153I
Kenmore Euro Industrial Fund Ltd
16 March 2010
16 March 2010
KENMORE EUROPEAN INDUSTRIAL FUND LIMITED ("KEIF"/ "Company")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2009
KENMORE'S ACTIVE ASSET MANAGEMENT CONTINUES WITH SIGNIFICANT LEASING ACTIVITY
Kenmore European Industrial Fund, a Guernsey registered closed-ended investment
company focusing on industrial property assets in Western Europe and
Scandinavia, today announces preliminary results for the year ended 31 December
2009.
Highlights:
· Adjusted net asset value* per share at 31 December 2009 of 79.8 pence,
down 28.8 pence from 108.6 pence at 31 December 2008 but up 0.6 pence from 79.2
pence at 30 September 2009
· Successfully sold 31 assets for GBP92.1 million
· Net gearing if all cash balances were applied would be 60.2%
· Underlying portfolio values have decreased by 9.58% over the year
· Further 0.75 pence dividend announced bringing total dividend announced
in respect of 2009 to 1.50 pence per share
· Intensive asset management and ongoing leasing activity resulted in 61
new leases signed and 88 leases renewed representing over 140,000 sq m of space
and GBP7.4 million of gross annualised income.
Giles Weaver, Chairman, commented:
"Over the past year, mainland European property markets have continued to see
values reduce although the last quarter of 2009 showed a slight upturn. The
Board remains satisfied that, through the Investment Manager's strong local
network and specialist in-house property expertise, the Fund maintains close
links with tenants and both local and national markets and is well placed to
consider and mitigate the impact of likely future adjustments.
"At 31 December 2009 the portfolio continues to have a strong defensive income
profile. The key asset management focus for the coming year is centred on a
highly proactive asset management approach by staying close to tenants and
assisting them where possible as they deal with the prevailing economic climate.
"The financial year under review saw the continued pro-active management of the
portfolio through significant leasing activity, with 61 new leases and 88
renewals signed. The disposals effected this year contributed to the net
repayment of GBP100.4m of debt, giving the Fund a degree of flexibility with
which to address the necessary refinancing."
* Adjusted net assets of GBP111,693,000 (2008 - GBP152,017,000): net asset
value of GBP116,366,000 (2008 - GBP137,032,000) less deferred tax assets of
GBP10,140,000 (2008 - plus deferred tax liabilities of GBP375,000) plus
unrecognised deferred tax adjusted for within initial purchase price
consideration of GBP5,779,000 (2008 - GBP14,922,000) less unrecognised deferred
tax contingently adjusted for within initial purchase price consideration
GBP312,000 (2008 - GBP312,000)
For further information:
+--------------------------------------+---------------------+
| Kenmore Financial Services Limited | +44 20 7629 4480 |
| Rob Brook | |
+--------------------------------------+---------------------+
| Financial Dynamics | +44 20 7831 3113 |
| Stephanie Highett / Dido Laurimore / | |
| Olivia Goodall | |
+--------------------------------------+---------------------+
CHAIRMAN'S STATEMENT
2009 saw Kenmore European Industrial Fund ("KEIF"/the "Fund"/"Company")
successfully sell 31 assets generating a positive return (before disposal costs)
against the pre-sale valuations. The valuations of the Fund's remaining
properties also saw an increase in the last quarter of 2009 which, combined with
the increased transaction volumes towards the end of 2009, hopefully indicates
that markets have now passed the bottom of one of the worst property downturns
on record.
Following on from these disposals, a key focus of the Fund is the Company's
capital structure including the debt financing in place. The Fund's loan
facilities, currently amounting to GBP198.6m, expire in three tranches in
October 2010, April 2011 and November 2011. The Fund is currently in discussions
with a number of lenders and is hopeful that a refinancing deal can be achieved
at a gearing level that is both attractive to the Fund and in line with current
market trends. Further disposals may be required to achieve appropriate gearing
levels under any revised facilities.
The Fund's overall investment objective, as stated at admission in September
2006, remains to provide investors with an attractive level of income together
with the potential for capital growth. It is focused on industrial assets in
Western and Northern Europe, excluding the UK, concentrated primarily in France,
Germany, Scandinavia and the Benelux countries.
The financial year under review saw the continued pro-active management of the
portfolio through significant leasing activity, with 61 new leases and 88
renewals signed. The disposals effected this year contributed to the net
repayment of GBP100.4m of debt, giving the Fund a degree of flexibility with
which to address the necessary refinancing.
Results
The underlying performance of the Fund has been impacted by the continued fall
in the commercial property market over the year. As such, since 31 December
2008, net assets per share, excluding deferred tax, decreased by 28.8 pence to
79.8 pence, a fall of 26.5%. However, in the last quarter of 2009, the net
assets per share, excluding deferred tax, have actually risen by 0.8 pence.
The table below shows the movement in adjusted net asset value per share for the
current financial year and for the period since admission:
+-----------------------+--------------+------------+--------------+----------+
| NAV per share (Pence) | Since admission | |
| | 2009 | |
+-----------------------+------------------------------------------+----------+
| Opening, excluding deferred tax and | 95.5 | 108.6 |
| after listing costs | | |
+--------------------------------------+------------+-------------------------+
| Movement in portfolio valuations | (45.3) | (28.3) |
+--------------------------------------+------------+-------------------------+
| Expensing of acquisition costs | (6.1) | - |
+--------------------------------------+------------+-------------------------+
| Uplift from balance of retained | 11.1 | 2.1 |
| profits | | |
+--------------------------------------+------------+-------------------------+
| Movement from mark to market of | (6.2) | 2.5 |
| derivatives | | |
+--------------------------------------+------------+-------------------------+
| Dividends paid | (12.1) | (1.5) |
+--------------------------------------+------------+-------------------------+
| Foreign exchange movements | 36.2 | (0.2) |
+--------------------------------------+------------+-------------------------+
| Movement on deferred tax compensated | 6.7 | (3.4) |
| for at acquisition | | |
+--------------------------------------+------------+-------------------------+
| As at 31 December 2009, excluding | 79.8 | 79.8 |
| deferred tax | | |
+--------------------------------------+------------+-------------------------+
| | | | | |
+-----------------------+--------------+------------+--------------+----------+
After deducting all deferred tax, whether recognised on the balance sheet or
not, NAV at 31 December 2009 was 53.7 pence (31 December 2008 - 68.8 pence).
Losses before tax in the year to 31 December 2009 were GBP28.5m. Key components
of this include:
· operating profits less interest GBP7.7m
· unrealised revaluation losses GBP(39.7)m
· unrealised gains on derivatives GBP3.5m
Portfolio
During the year, the Company successfully sold 31 assets for GBP92.1m,
generating a small profit (before disposal costs) against valuation. As at the
balance sheet date, the Company held 74 properties at a market value of GBP299m.
Further information on the portfolio is contained within the Investment
Manager's Review.
Gearing
Fund policy, as stated in the prospectus, was to keep borrowings at
approximately 70% of gross assets when fully invested. This is no longer
appropriate in light of changes in the market and the Board's stated policy is
now to selectively sell assets in order to keep borrowings below this level with
a medium term target of maintaining gearing between 50% and 60%. As at 31
December 2009, the Company had drawn GBP198.6m of debt from its total
facilities. If all cash balances within the Fund were to be applied to reduce
the drawn debt facilities it would reduce gearing to 60.2%. The loan to value
covenants on the Company's banking facilities currently range from 70% to 75%
(averaging 69.6% based on debt drawn).
The Company has hedged the risk of interest rate increases by the use of
interest rate swaps. As at 31 December 2009, a total of 109% of the Company's
debt has been protected in this way for a weighted average period of 1.6 years
(see note 18). The blended cost of money based on debt drawn to date is
currently 4.08% (5.07% including margin). The fair value of those hedges
improved by GBP3.5m over the course of the year.
Dividends
In light of the current economic climate, the Board has reviewed its dividend
policy and has decided to declare a further interim dividend of 0.75 pence for
the current financial year. This will be paid on 30 April 2010 to shareholders
on the register on 16 April 2010. An interim dividend of 0.75 pence per share
was paid on 25 September 2009, bringing the total announced dividends for 2009
to 1.50 pence (GBP2.1m).
Investment Manager
During the last quarter of 2009 the ultimate holding company of the Company's
investment manager, Kenmore Property Group Limited ("Kenmore"), went into
administration although the subsidiary that actually managed KEIF's affairs,
Kenmore Financial Services Limited ("KFSL"), continued trading with the use of
staff as agreed by the administrators. Continuity of management for the
portfolio was clearly a priority for the Board to establish at a time when there
was a real possibility of your company suffering a lack of hands-on management
whilst a new competent investment manager was sought.
In the event, a new investment management company, Tamar Capital ("Tamar") was
established and provides continuity of the management of the Fund's assets.
Following regulatory approval KFSL was acquired by Tamar in January 2010. Tamar
is ultimately owned by the family interests of Mr Joe Lewis and employs
substantially the same team as had been in place managing the European
investments for Kenmore. The administrator of Kenmore assigned the management of
KEIF and other largely European investments, previously managed by Kenmore, to
the newly established Tamar. Rob Brook was appointed chief executive of Tamar
and remains lead fund manager to KEIF and responsible for "end to end" strategy
across all aspects of the fund management. Rob continues to be supported by
Chris Pope, head of the French office, and the same regional managers KEIF
enjoyed previously, delivering local expertise and knowledge in managing KEIF.
During the last quarter your Board discussed with their advisers a variety of
possible options for the management of KEIF's assets including taking the
management of the assets in house, appointing a new manager or considering
whether to sell the company to an external purchaser. However since Tamar was
able to appoint largely the same team of key local individuals, who had
previously been managing the assets, the Board decided to continue with KFSL as
your Investment Manager in the knowledge that it would be ably supported by
Tamar. The Board have confidence in the team that have been managing your assets
on account of both the speed with which they were able to invest cash after the
initial flotation as outlined in the Offer Document and their ability to effect
sales at good value in the unexpected very weak market that has unfortunately
transpired.
At the forthcoming AGM, the company will put a resolution to shareholders
changing the name of the Company to Tamar European Industrial Fund Limited in
line with the new marketing brand of the Company's fund manager.
Hansteen Offer
During the last quarter of 2009, after Kenmore had been placed into
administration, the Company announced that it had received an indicative
preliminary offer of approximately 40.6p per share from Hansteen Holdings plc,
which the Board considered seriously with its advisors. However, no due
diligence took place and the Board notes that on 11 March 2010 Hansteen
announced that it was no longer considering making an offer.
Shareholder Communication
The Board considers it important that shareholders are kept regularly informed
of the progress of the Fund. The adjusted Net Asset Value per share will
continue to be published quarterly.
Corporate Governance
The Company is registered in Guernsey. As such, it is not formally required to
comply with the Combined Code on Corporate Governance. However, the Directors
intend to comply with the Code, and our statement on compliance is contained in
the annual report.
Prospects
Over the past year, mainland European property markets have continued to see
values reduce although the last quarter of 2009 showed a slight upturn. The
Board remains satisfied that, through the Investment Manager's strong local
network and specialist in-house property expertise, the Fund maintains close
links with tenants and both local and national markets and is well placed to
consider and mitigate the impact of likely future adjustments.
At 31 December 2009 the portfolio continues to have a strong defensive income
profile. The key asset management focus for the coming year is centred on a
highly proactive asset management approach by staying close to tenants and
assisting them where possible as they deal with the prevailing economic climate.
In addition, the Board continues to work on a selective disposal programme where
it believes the pro-active asset management has created sufficient return for
shareholders.
Giles Weaver
Chairman
15 March 2009
INVESTMENT MANAGER'S REVIEW
Property Market Review
Investment trading continued to pick up pace in the final quarter of 2009.
Investment volumes increased by almost 20% on the previous quarter to EUR25
billion and up 49% on the same quarter in 2008. This was the third consecutive
quarter of increasing volumes after seven consecutive quarters of decline
following the global financial crisis. Overall, Europe saw EUR70 billion of
commercial real estate change hands in 2009, which was down 38% on 2008. The
2009 figure broadly compares to trading numbers in 2001, but remains well below
the record EUR253 billion recorded in 2006. Increasing investor confidence and
trading has translated into compressing yields in some prime markets.
Occupier sentiment in the European warehousing sector strongly improved over the
last few months of the year. Leasing activity continued to improve, albeit
accelerating take-up in the final quarter of 2009 was achieved on the back of
low volumes. Overall, take-up in 2009 has significantly declined year-on-year
and take-up levels in 2010 are anticipated to remain on a similar level.
Occupier demand remained most resilient in the core Western European markets, in
particular Germany and France, which offer the largest modern logistics stock in
combination with an excellent transport network. In 2010, both markets expect to
record an annual take-up in line with the previous year (Source JLL).
Belgium
Overall industrial investment volumes fell over the fourth quarter of 2009.
Existing interest amongst investors for Belgian industrial assets is
concentrated around prime property. Nevertheless, yields have remained stagnant
over the last three quarters ranging between 7.75% and 8.25% particularly due to
a shortage of preferred assets.
Overall industrial and logistics take-up increased by approximately 20,000 sqm
over the fourth quarter and assets in the Brussels-Antwerp-Ghent region are most
keenly sought after.
Finland
The transaction market improved slightly during the fourth quarter from a near
halt earlier in the year with domestic institutions buying mainly prime office
and retail assets. Poor access to funding remains the main reason with most
banks still closed for business. In addition the slow export trade markets have
also hampered the demand for industrial and logistics buildings.
The leasing market remained challenging during the third and fourth quarters
with several negotiations underway. The amount of stock available on the market
is currently swaying landlords to offer generous incentives to let premises in
the short term.
France
In 2009, approximately EUR7 billion was invested in standard commercial real
estate, the lowest volume since 2000. Investment volume fell by 40% during the
year and was three and a half times lower than in 2007. In the first quarter the
market was dominated by small transactions (averaging EUR10 million and none above
EUR100 million). Over the last three months the average lot size rose to EUR28
million.
Occupier interest in office space in the fourth quarter of 2009 followed the
same pattern as the rest of the year and was significantly down on 2008's level.
The slowdown was less severe in the second half of 2009. Rents started falling
in July 2008 and have continued to do so.
Take-up in Ile de France's industrial market continued falling, a trend started
in 2008. At 979,200 sqm, it was 14% down on the previous year's overall figures,
dropping 17% for industrial space and 7% for small and medium sized warehouses.
Germany
A total of EUR550 million was invested in industrial and logistics real estate in
Germany in 2009 representing a decline of 70% in comparison to 2008. This
decline is much higher than other asset categories such as office, residential
or retail in Germany. For 2009 there was only one portfolio deal with a value of
EUR50m or greater. The market was dominated by local German investors being 86% in
2009 in comparison to 43% in 2008. The main focus was and remains on core and
core plus assets with only 20% of deals in the value-add or opportunistic
category. Prime yields are currently around 7.5% but are expected to come under
downward pressure as prime assets are limited.
Total German warehouse take-up in 2009 amounted to over 3.25 million sqm,
representing a decline of 10% compared to 2008, but still 3% above the 5-year
average rate. The majority of deals for more than 2 million sqm were closed
outside the "big five" centres (Hamburg, Düsseldorf, Munich, Berlin and
Frankfurt).
Netherlands
Prime yields have moved out from 7.5% to 7.75% over the course of 2009, however
they are expected to stabilise throughout 2010. Secondary yields have moved by
at least as much and are now at around 10.0% to 10.25%.
The Netherlands had seen four quarters of negative growth until the third
quarter of 2009 when it recorded growth of 0.4%, showing the start of some
recovery in the economy. However, the Dutch Gross Domestic Product decreased by
4.0% overall in 2009, primarily due to a sharp fall in exports. The Netherlands
Bureau for Economic Policy Analysis (CPB) forecasts a revival of the Dutch
economy by 1.5% in 2010 and upwards revisions have been made compared with the
previous mid-2009 estimates.
There is still relatively steady occupier activity and demand for logistics
space as modern, well-designed logistics facilities remain in short supply and
the current available space consists mostly of outdated, poorly accessible
stock.
Norway
The transaction market for industrial property has picked up during the fourth
quarter of 2009 with investors showing increased interest in the few assets that
are on the market. Furthermore, investors are becoming more creative and
solution-orientated in their investment strategies looking at the options to
take over existing financing from the owners or accepting sellers' credits to
reduce risks if there is doubt over a tenant's viability as well as making the
financiers more comfortable in their lending position.
In the industrial sector the focus remains on localization, centralization and
improved efficiency. The general demand for high quality premises is moderate to
strong and it appears that downward pressure on rental values for these quality
assets has subsided. Assets of lesser quality may continue to see downward
pressure on rents and subsequently values throughout 2010. However, occupational
markets are expected to stabilise, if not strengthen in the better-located
markets.
Sweden
Transaction volumes were down 26% in 2009 compared to 2008 with SEK 78.9bn
transacted in the year. The largest transaction involved the creation of a
residentially orientated property company by Kungsleden PLC and the state owned
pension fund AP3 for SEK 7.3bn.
Commercial property investment demand has picked up somewhat from the fourth
quarter of 2009 onwards, with domestic investors and pension funds showing the
most interest. Prime assets are most in demand within the office and logistics
sectors. The demand for secondary properties is still weak with supply
increasing.
Portfolio Overview
During the year, the portfolio has seen 61 new leases signed representing 10.93%
of gross income (GBP3,287,000) and 7.52% or 60,987 sqm of total area.
Furthermore, 88 lease renewals were signed representing 12.87% of gross income
(GBP4,073,000) and 13.05% or 80,237 sqm of total area. Vacating tenants during
this quarter amounted to 68 tenants representing GBP4,003,000 of ERV and 77,589
sqm.
Of the leasing activity undertaken during the year, the more prominent leases
signed include: Food Broker AS (Holterkollveien, Norway) who took 5,900 sqm for
an annual rent of GBP414,717; Amplitude (Lisses Bois Chaland, France) who leased
1,700 sqm at a rent of GBP125,000 and Hygiatec (Argenteuil, France) who have
rented 1,453 sqm for an annual rent of GBP58,855. Significant lease renewals
include 2,171 sqm to Rema at Ostmarkveien 27 (Norway) for a rent of GBP319,783
and 7,148 sqm to Coloplast (Lisses, France) at an annual rent of GBP385,962.
+--------------+----------+----------+----------+----------+-------------+----------+----------+----------+
| | Belgium | Finland | France | Germany | Netherlands | Norway | Sweden | TOTAL |
+--------------+----------+----------+----------+----------+-------------+----------+----------+----------+
| Number of | 8 | 7 | 35 | 4 | 3 | 10 | 7 | 74 |
| Assets | | | | | | | | |
+--------------+----------+----------+----------+----------+-------------+----------+----------+----------+
| Number of | 59 | 15 | 175 | 26 | 2 | 57 | 57 | 391 |
| Tenants | | | | | | | | |
+--------------+----------+----------+----------+----------+-------------+----------+----------+----------+
| Total | 108,533 | 34,173 | 168,280 | 92,155 | 20,001 | 86,063 | 103,916 | 613,121 |
| Area | | | | | | | | |
| (sqm) | | | | | | | | |
+--------------+----------+----------+----------+----------+-------------+----------+----------+----------+
| Average | GBP5,537 | GBP3,288 | GBP2,864 | GBP6,157 | GBP2,685 | GBP6,701 | GBP4,585 | GBP4,045 |
| Lot Size | | | | | | | | |
| GBP'000 | | | | | | | | |
+--------------+----------+----------+----------+----------+-------------+----------+----------+----------+
| Value | GBP408 | GBP673 | GBP596 | GBP267 | GBP403 | GBP779 | GBP309 | GBP488 |
| (per sqm) | | | | | | | | |
+--------------+----------+----------+----------+----------+-------------+----------+----------+----------+
| Area/Tenancy | 1,840 | 2,278 | 962 | 3,544 | 10,001 | 1,510 | 1,823 | 1,568 |
| (sqm) | | | | | | | | |
+--------------+----------+----------+----------+----------+-------------+----------+----------+----------+
| Area/Asset | 13,567 | 4,882 | 4,808 | 23,039 | 6,667 | 8,606 | 14,845 | 8,285 |
| (sqm) | | | | | | | | |
+--------------+----------+----------+----------+----------+-------------+----------+----------+----------+
| Vacancy | 26.91% | 4.22% | 15.17% | 28.94% | 20.13% | 3.15% | 13.57% | 16.91% |
| by Area | | | | | | | | |
+--------------+----------+----------+----------+----------+-------------+----------+----------+----------+
| Average | 2.81 | 9.59 | 2.00 | 5.83 | 3.90 | 4.44 | 4.13 | 3.81 |
| Lease | | | | | | | | |
| Term | | | | | | | | |
+--------------+----------+----------+----------+----------+-------------+----------+----------+----------+
| Running | 6.21% | 4.78% | 8.05% | 6.69% | 7.43% | 6.94% | 7.11% | 7.03% |
| Yield | | | | | | | | |
+--------------+----------+----------+----------+----------+-------------+----------+----------+----------+
As at 31 December 2009, the Fund's total portfolio was valued at GBP299,042,000.
By value this breaks down across seven countries as follows: France 33%, Norway
22%, Belgium 15%, Sweden 11%, Germany 8%, Finland 8% and Netherlands 3%.
The portfolio comprised 74 properties totalling 613,121 sqm with 391 individual
leases. The current portfolio gross rent is GBP27,640,000 with an NOI of
GBP23,587,000 (Q4 NOI annualised) reflecting a yield of 7.03% with a void of
16.91% by area and reversionary yield of 7.61%. In the final quarter of 2009,
the void increased from 16.18% due to higher net vacancies from leasing
activity.
Outlook
Investment markets appear to have now passed the bottom of one of the worst
property investment downturns on record. However, the weak economic recovery is
playing into a slow and uneven rebound in corporate demand, which means
investors are remaining cautious in underwriting investment deals and are
looking closely at lease length and covenant strength. Refinancing remains a
concern although banks now have more clarity around their real estate strategies
than at the start of 2009 and a steady release of saleable assets onto the
market is expected.
A key focus for the Fund remains to reduce gearing through targeted sales, with
GBP14.9m of assets currently under offer, as well as to maximise leasing and
lease renewals through active asset management initiatives, in order to ride out
the shocks in the occupier markets caused by continuing economic uncertainty and
instability. The Fund's diversity across a number of Western European markets
and the experience of the local management teams puts it in a strong position to
do this.
Kenmore Financial Services Limited
Investment Manager
PORTFOLIO STATISTICS
Geographical Analysis as at 31 December 2009
+------------------------------+------+-------+
| | % Portfolio |
+------------------------------+--------------+
| France | | 33% |
+------------------------------+------+-------+
| Norway | | 22% |
+------------------------------+------+-------+
| Belgium | | 15% |
+------------------------------+------+-------+
| Sweden | | 11% |
+------------------------------+------+-------+
| Germany | | 8% |
+------------------------------+------+-------+
| Finland | | 8% |
+------------------------------+------+-------+
| The Netherlands | | 3% |
+------------------------------+------+-------+
Tenure Analysis as at 31 December 2009
+------------------------------+------+-------+
| | % Portfolio |
+------------------------------+--------------+
| Freehold | | 98% |
+------------------------------+------+-------+
| Leasehold | | 2% |
+------------------------------+------+-------+
Lease Expiry Profile
At 31 December 2009 the average lease length through to expiry for the portfolio
was 3.8 years.
Top Ten Tenants at 31 December 2009
+------------------------------+------+-------+-------------------+
| Tenant | Passing Rent | % Total Portfolio |
| | GBP'000s | Passing Rent |
+------------------------------+--------------+-------------------+
| Machinery Oy | | 1,420 | 5.0% |
+------------------------------+------+-------+-------------------+
| Bauda AS | | 1,401 | 4.9% |
+------------------------------+------+-------+-------------------+
| Compair Drucklufttechnik | | 1,018 | 3.6% |
| GmbH | | | |
+------------------------------+------+-------+-------------------+
| Kuehne + Nagel Chilled | | 820 | 2.9% |
| Logistics | | | |
+------------------------------+------+-------+-------------------+
| Daimler AG | | 734 | 2.6% |
+------------------------------+------+-------+-------------------+
| Blondie Logistics | | 618 | 2.2% |
+------------------------------+------+-------+-------------------+
| Tibnor AB | | 594 | 2.1% |
+------------------------------+------+-------+-------------------+
| Distri-Log | | 589 | 2.1% |
+------------------------------+------+-------+-------------------+
| Ahlsell Norge | | 578 | 2.0% |
+------------------------------+------+-------+-------------------+
| Posten Logistik AB | | 521 | 1.8% |
+------------------------------+------+-------+-------------------+
| | | 8,293 | 29.2% |
+------------------------------+------+-------+-------------------+
STATEMENTS OF COMPREHENSIVE INCOME
Audited
For the year ended 31 December 2009
+------------------------+-------+----------+----------+---------+----------+
| | | 2009 | 2008 |
+------------------------+-------+---------------------+--------------------+
| | Notes | Company | Group | Company | Group |
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------+-------+----------+----------+---------+----------+
| Revenue | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Rental income | | - | 32,814 | - | 35,716 |
+------------------------+-------+----------+----------+---------+----------+
| Other income | | - | 7,632 | - | 7,023 |
+------------------------+-------+----------+----------+---------+----------+
| | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Losses on investments | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Unrealised losses on | 9 | - | (39,662) | - | (46,728) |
| revaluation of | | | | | |
| investment properties | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Realised losses on | | - | (1,052) | - | (972) |
| disposal | 9 | | | | |
| of investment | | | | | |
| properties | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| | | - | (268) | - | (4,961) |
+------------------------+-------+----------+----------+---------+----------+
| | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Expenditure | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Property acquisition | | - | (31) | (184) | (2,106) |
| and related costs | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Other | 2a, | (686) | (19,786) | 2,800 | (16,473) |
| (expenses)/income | 4 | | | | |
+------------------------+-------+----------+----------+---------+----------+
| | | (686) | (19,817) | 2,616 | (18,579) |
+------------------------+-------+----------+----------+---------+----------+
| Net operating | | (686) | (20,085) | 2,616 | (23,540) |
| (loss)/profit before | | | | | |
| finance costs | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Net finance | | | | | |
| income/(costs) | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Interest receivable | | 8,959 | 723 | 8,628 | 1,077 |
+------------------------+-------+----------+----------+---------+----------+
| Finance costs | 5 | (3,928) | (12,610) | (1,425) | (21,114) |
+------------------------+-------+----------+----------+---------+----------+
| Unrealised | | 2,063 | 3,515 | (2,589) | (14,066) |
| gains/(losses) on | | | | | |
| derivatives | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| | | 7,094 | (8,372) | 4,614 | (34,103) |
+------------------------+-------+----------+----------+---------+----------+
| Net profit/(loss) | | 6,408 | (28,457) | 7,230 | (57,643) |
| before taxation | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Taxation on | 6 | - | 13,787 | - | 8,900 |
| profit/(loss) | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Net profit/(loss) for | | 6,408 | (14,670) | 7,230 | (48,743) |
| the year | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Other comprehensive | | | | |
| (loss)/income for the year, | | | | |
| after tax: | | | | |
+--------------------------------+----------+----------+---------+----------+
| Exchange differences on | (13,481) | (3,896) | 45,993 | 46,507 |
| translating foreign | | | | |
| operations | | | | |
+--------------------------------+----------+----------+---------+----------+
| Other comprehensive | (13,481) | (3,896) | 45,993 | 46,507 |
| (loss)/income for the year, | | | | |
| net of tax | | | | |
+--------------------------------+----------+----------+---------+----------+
| Total comprehensive | (7,073) | (18,566) | 53,223 | (2,236) |
| (loss)/income for the year | | | | |
+--------------------------------+----------+----------+---------+----------+
| | | | | | |
+------------------------+-------+----------+----------+---------+----------+
| Basic and diluted loss | 8 | | (10.5p) | | (34.8p) |
| per share | | | | | |
+------------------------+-------+----------+----------+---------+----------+
STATEMENTS OF FINANCIAL POSITION
Audited
As at 31 December 2009
+------------------------+-------+----------+-----------+----------+-----------+
| | | | 2009 | | 2008 |
+------------------------+-------+----------+-----------+----------+-----------+
| | Notes | Company | Group | Company | Group |
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------+-------+----------+-----------+----------+-----------+
| Non-current assets | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Property, plant and | | - | 177 | - | 62 |
| equipment | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Investment properties | 9 | - | 293,263 | - | 418,645 |
+------------------------+-------+----------+-----------+----------+-----------+
| Investment in | 10 | 206,846 | - | 239,828 | - |
| subsidiary | | | | | |
| undertakings | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Deferred tax assets | 11a | - | 13,541 | - | 2,111 |
+------------------------+-------+----------+-----------+----------+-----------+
| | | 206,846 | 306,981 | 239,828 | 420,818 |
+------------------------+-------+----------+-----------+----------+-----------+
| Current assets | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Assets classified as | | - | - | - | 15,975 |
| held for sale | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Trade and other | 12 | 1,360 | 17,060 | - | 18,642 |
| receivables | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Cash and cash | 13 | 10,090 | 18,413 | 1,792 | 34,571 |
| equivalents | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| | | 11,450 | 35,473 | 1,792 | 69,188 |
+------------------------+-------+----------+-----------+----------+-----------+
| Total assets | | 218,296 | 342,454 | 241,620 | 490,006 |
+------------------------+-------+----------+-----------+----------+-----------+
| | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Current liabilities | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Trade and other | 14 | (40,461) | (25,802) | (54,612) | (40,628) |
| payables, including | | | | | |
| derivatives | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Current tax | | - | (714) | - | (606) |
| liabilities | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Loans and borrowings | 15 | - | (50,965) | - | (3,035) |
+------------------------+-------+----------+-----------+----------+-----------+
| | | (40,461) | (77,481) | (54,612) | (44,269) |
+------------------------+-------+----------+-----------+----------+-----------+
| Non-current | | | | | |
| liabilities | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Loans and borrowings | 15 | - | (147,595) | - | (308,330) |
+------------------------+-------+----------+-----------+----------+-----------+
| Deferred tax | 11a | - | (1,012) | - | (375) |
| liabilities | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| | | - | (148,607) | - | (308,705) |
+------------------------+-------+----------+-----------+----------+-----------+
| Total liabilities | | (40,461) | (226,088) | (54,612) | (352,974) |
+------------------------+-------+----------+-----------+----------+-----------+
| Net assets | | 177,835 | 116,366 | 187,008 | 137,032 |
+------------------------+-------+----------+-----------+----------+-----------+
| | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Represented by: | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Share capital | 16 | - | - | - | - |
+------------------------+-------+----------+-----------+----------+-----------+
| Share premium | 16 | 2,985 | 2,985 | 2,985 | 2,985 |
+------------------------+-------+----------+-----------+----------+-----------+
| Special distributable | 16 | - | - | 117,716 | 117,716 |
| reserve | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Translation reserve | 16 | - | - | 58,953 | 56,745 |
+------------------------+-------+----------+-----------+----------+-----------+
| Revenue reserve | 16 | 174,850 | 113,381 | 7,354 | (40,414) |
+------------------------+-------+----------+-----------+----------+-----------+
| Equity shareholders' | | 177,835 | 116,366 | 187,008 | 137,032 |
| funds | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
| Net asset value per | | | 83.1p | | 97.9p |
| share | | | | | |
+------------------------+-------+----------+-----------+----------+-----------+
CASH FLOW STATEMENTS
Audited
For the year ended 31 December 2009
+------------------------+-------+----------+-----------+---------+----------+
| | | 2009 | 2008 |
+------------------------+-------+----------------------+--------------------+
| | Notes | Company | Group | Company | Group |
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------+-------+----------+-----------+---------+----------+
| Cash flows from | | | | | |
| operating activities | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Net profit/(loss) for the | 6,408 | (14,670) | 7,230 | (48,743) |
| year | | | | |
+--------------------------------+----------+-----------+---------+----------+
| Taxation | | - | (13,787) | - | (8,900) |
+------------------------+-------+----------+-----------+---------+----------+
| Adjustments for: | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Unrealised losses on | - | 39,662 | - | 46,728 |
| revaluations of investment | | | | |
| properties | | | | |
+--------------------------------+----------+-----------+---------+----------+
| Realised losses on disposal | - | 1,052 | - | 972 |
| of investment properties | | | | |
+--------------------------------+----------+-----------+---------+----------+
| Movement in financing | | - | (1,580) | - | 13,121 |
| derivatives | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Depreciation | | - | 16 | - | 19 |
+------------------------+-------+----------+-----------+---------+----------+
| Foreign exchange | | - | 5,074 | - | 2,169 |
| movements | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Taxation paid | | - | (1,283) | - | (2,356) |
+------------------------+-------+----------+-----------+---------+----------+
| (Increase)/decrease in | (1,360) | 2,789 | - | (88) |
| trade and other receivables | | | | |
+--------------------------------+----------+-----------+---------+----------+
| (Decrease)/increase in trade | (14,151) | (13,234) | 10,484 | 1,771 |
| and other payables | | | | |
+--------------------------------+----------+-----------+---------+----------+
| Net cash | | (9,103) | 4,039 | 17,714 | 4,693 |
| (outflow)/inflow from | | | | | |
| operating activities | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Cash flows from | | | | | |
| investing activities | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Acquisition of | 9 | - | (8,751) | - | (14,878) |
| investment properties | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Development | 9 | - | (2,059) | - | (7,163) |
| expenditure | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Proceeds from disposal | | - | 92,109 | - | 62,102 |
| of | | | | | |
| investment properties | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Acquisition of | | - | (130) | - | (36) |
| property, plant & | | | | | |
| equipment | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Net change in | 10 | 19,501 | - | (9,532) | - |
| investment in | | | | | |
| subsidiaries | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Net cash | | 19,501 | 81,169 | (9,532) | 40,025 |
| inflow/(outflow) from | | | | | |
| investing activities | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Cash flows from | | | | | |
| financing activities | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Repayment of | | - | (100,448) | - | (18,594) |
| borrowings | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Dividends paid | 7 | (2,100) | (2,100) | (8,484) | (8,484) |
+------------------------+-------+----------+-----------+---------+----------+
| Net cash outflow from | | (2,100) | (102,548) | (8,484) | (27,078) |
| financing activities | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Net | | 8,298 | (17,340) | (302) | 17,640 |
| increase/(decrease) in | | | | | |
| cash | | | | | |
| and cash equivalents | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Cash and cash | | 1,792 | 34,571 | 2,094 | 13,981 |
| equivalents at start | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Foreign exchange | | - | 1,182 | - | 2,950 |
| movements on cash and | | | | | |
| cash equivalents | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
| Cash and cash | | 10,090 | 18,413 | 1,792 | 34,571 |
| equivalents at end | | | | | |
+------------------------+-------+----------+-----------+---------+----------+
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1. Accounting policies - Basis of preparation
This press release contains the financial information of Kenmore European
Industrial Fund Limited (the "Company") and its subsidiaries (together referred
to as the "Group") for the year ended 31 December 2009.
The financial information is prepared on the historical cost basis and is
presented in Sterling rounded to the nearest thousand.
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 December 2009. Statutory accounts for
2009, prepared under IFRS as adopted by the International Accounting Standards
Board, will be delivered in due course. The auditors have reported on those
accounts; their report was (i) unqualified, (ii) did not include references to
any matters to which the auditors drew attention by way of emphasis without
qualifying their reports.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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