RNS Number:3704H
St. Modwen Properties PLC
12 February 2003
Wednesday 12 February 2003
St. Modwen Properties PLC
Preliminary results for the year ended 30 November 2002
"Tenth successive year of profits growth delivers exceptional
shareholder value"
St. Modwen Properties PLC is pleased to announce its results for
the year ended 30 November 2002. Highlights include:
* Profit before tax increased by 18% to #30.0m (2001:
#25.5m)
* Earnings per share up 13% to 17.1p (2001: 15.2p)
* Net assets per share increased by 18% to 160.9p (2001:
136.9p)
* Total dividend per share of 5.7p (2001: 4.9p), an increase
of 16%
* Investment portfolio valuation increase of 5.5% largely
due to adding value
* Net assets per share up 134% and dividends up 90% in the
last five years
* Appointment of Tim Haywood as Finance Director confirms progress
with board succession plans
* Hopper of future opportunities boosted by recent acquisitions
from Alstom, Corus, Goodyear, Invensys and Elephant & Castle
Shopping Centre
* Significant town centre planning consents achieved at Edmonton,
Farnborough and Wembley
* The total value of the income-producing portfolio, including the
post year end acquisition from Alstom and 100% of joint
ventures, now totals #523m
Commenting on the results, Sir Stanley Clarke, Chairman of St.
Modwen, said:
"I am pleased to report these excellent results for 2002 and to
confirm that the Company's current financial year has started
well.
"The Hopper is better topped up than ever and the major schemes in
it are moving through the planning and pre-construction process
in an ordered manner to meet this year's and future years'
programmes.
"I therefore look forward with confidence to achieving another
record year."
- ends -
For further information, please contact:
St. Modwen Properties PLC www.stmodwen.co.uk
Sir Stanley Clarke, Chairman On 12 February - 0207 067 7000
Anthony Glossop, Deputy Chairman & Chief Executive thereafter - 0121 456 2800
Bill Oliver, Finance Director
Weber Shandwick Square Mile 0207 067 0700
Reg Hoare/Katie Hunt 07831 406117
A presentation will be held at 11.15am today at the offices of
Weber Shandwick Square Mile, Fox Court, 14 Gray's Inn Road,
London, WC1X 8WS
Print resolution images are available for the media to view and
download from www.vismedia.co.uk
CHAIRMAN'S STATEMENT
Results
I am pleased to report on the tenth successive year of record
progress for your Company. Profits before tax increased by
18% to #30.0m (2001: #25.5m), earnings per share grew by 13% to
17.1p (2001: 15.2p) and net assets per share increased by 18%
to 160.9p (2001: 136.9p).
These results were achieved on the back of an 81% growth in
development profits and a creditable #13.9m (5.5%) revaluation
uplift on the investment portfolio.
Parts of the property market weakened markedly as the year
progressed, particularly manufacturing and offices. However,
our broad range of development opportunities enabled us to
compensate for this by concentrating on the strengths in the
distribution, convenience retail and residential land sectors.
Investment demand for our development product remained strong.
Our key performance measurement of total pre-tax return on average
shareholder funds remained in excess of 25%.
Dividend
Your board is recommending a final dividend of 3.8p (2001: 3.3p)
per ordinary share, making a total distribution for the year of
5.7p (2001: 4.9p), an increase of 16%. This final dividend
will be paid on 25th April 2003 to shareholders on the register
on 28th March 2003.
Strategy
Your Company continues to benefit from its strategy of adding value
through regeneration in our specialised areas of expertise via
a network of regional offices. The size and geographical
spread of the Company's landbank enabled us to react rapidly to
opportunities that arose within the year.
The revaluation uplift was aided to a small degree by yield shifts
in the retail sector but by far the greater element came from
adding value to specific investment properties by letting or
refurbishment.
We were particularly successful in adding to the Company's hopper
of opportunities during the year. Including the #113m
acquisition of an industrial portfolio from Alstom in December
2002, we have acquired either directly or through joint
ventures 22 additional employment sites totalling some 800
acres with 10.4m sq.ft of existing space. Our total estate
now exceeds 5,000 acres. These acquisitions will further
underpin the Group's long-term growth.
Directors and Employees
These results could not have been achieved without an exceptional
performance by the whole team working for your Company and to
all of them I extend my personal thanks.
Your Company also has a strong board to which in July we appointed
Ian Menzies-Gow, formerly chairman of Geest plc, as a non-
executive director.
During the year, we announced our board succession plans as a
result of which, in due course, I will become life president,
Anthony Glossop will become chairman and Bill Oliver will
succeed him as chief executive. I am pleased to confirm
progress with this plan with the appointment of Tim Haywood as
finance director. Tim has a strong record of financial
experience gained within the manufacturing and distribution
sectors and will, I am sure, contribute to our future success.
Prospects
Although the private sector of the economy is clearly weakening, I
am pleased to report that your Company's current financial year
has started well.
I am, therefore, looking forward with confidence to achieving
another record year.
Sir Stanley W. Clarke CBE, Hon. D.Univ.
Chairman
12 February 2003
CHIEF EXECUTIVE'S OPERATIONAL REVIEW
Highlights of the Year
The Company has had an extremely active year in terms of its
developments. Well over one-million sq.ft of buildings were
completed and handed over to occupiers and we enter the current
year with a construction programme already in excess of 500,000
sq.ft. The strongest sectors were distribution, retail -
particularly convenience and discount food, and residential
land.
In distribution, we sold the 178,000 sq.ft distribution facility
constructed in the previous year for H W Plastics at Trentham
Lakes, Stoke-on-Trent and completed the construction and sale
of the 564,000 sq.ft distribution facility for Argos at Barton
Business Park, Staffordshire and a major facility for Dixons at
Shepcote Business Park, Sheffield. Also at Trentham Lakes, we
completed a 152,000 sq.ft facility for Pets at Home, which has
now been sold in the current year and we also started work on a
317,500 sq.ft facility for Screwfix which has been pre-sold.
The major feature in our retail developments was the sale of the
first phase of our Castle Walk, Newcastle-under-Lyme scheme and
the completion of construction of the second phase. Letting
of this latter phase is well advanced and it should be
available for sale early in the present year. In addition, we
constructed the 83,000 sq.ft phase one of Shrub Hill Retail
Park, Worcester, only one unit of which remains to be let.
At the Belle Vale shopping centre, Liverpool which we own in joint
venture with Mars Pension Fund, we acquired a neighbouring site
which enabled us to provide Morrisons with the opportunity to
create a major foodstore.
Our brownfield residential programme continued to perform strongly
with further releases at Hilton, Derbyshire and at Trentham
Lakes where we have now completed the residential element. We
also made major progress at Norton Colliery, Stoke-on-Trent,
where we have substantially completed the ground reclamation
and site modelling and are well advanced with the site
infrastructure which will enable land sales to be made in the
present year. Similar progress was made at the Springfields,
Stoke-on-Trent residential site where reclamation is complete
and we are in the post-reclamation gas monitoring phase.
Outside these sectors of particular strength we took advantage of
profitable opportunities as they arose. We sold the factory
at Trentham Lakes that we had constructed in the previous year
for Remploy and we constructed and sold a contact centre for
Consignia at Etruria Valley, Stoke-on-Trent. At Cranfield, we
acquired the existing innovation centre from the local
authority and have completed a major extension to it, as well
as constructing a second 20,000 sq.ft office building. Both
the new facilities are letting well. At Quinton, Birmingham,
we started work on our M5 / Junction 3 business park,
completing a 50,000 sq.ft, first phase comprising three office
buildings of which one was pre-let, one was pre-sold and one is
still available.
At Orbital, Cannock, we let a major service and sales facility to
Finnings UK on the largest remaining site in that scheme and
completed construction just before the year-end. At
Avonmouth, we are building speculatively two industrial /
distribution buildings totalling 62,000 sq.ft on the first
phase of our joint venture programme with Britannia Zinc which
will be completed in the near future.
Further development has taken place at Coombs Wood, Halesowen, with
an office building being constructed and sold to Redrow Homes
in the year and three pre-sold industrial / office buildings
being under offer as we enter the new year.
In addition, we made good progress in selling or letting the small
unit construction programme that we had undertaken in the
previous year in Burton-upon-Trent, Halesowen and Stoke-on-
Trent.
A number of our town centre schemes took a major step forward with
significant planning consents being achieved at Edmonton,
Farnborough and Wembley. Planning is getting progressively
more difficult as developers such as ourselves, are required to
address an increasing number of ecological, environmental,
social and transport matters. However, our policy of working
closely with local authorities does mean that, although it may
take time, we do achieve viable planning consents which
genuinely give substantial community benefit.
Delay is, unfortunately, a constant factor in today's development
scene and our major heritage schemes have not been unaffected.
Brighton West Pier, Castle Hill, Dudley and Trentham Gardens
have all suffered in this regard for a variety of reasons but,
in each case, real progress has been made during the year.
Largely on the back of our substantial acquisition programme,
rental income increased in the year, with useful increases
achieved on some special rent reviews and new lettings.
However, the churn occasioned by tenant failures or vacations
at the end of lease periods held back overall rental growth.
The surplus on investment property sales of #832,000 was well down
on the previous year on a much reduced disposal programme of
#5m. We continue to aim to dispose of all properties where we
feel we can no longer add exceptional value and, therefore, an
annual disposal programme and a resultant surplus can be
expected to be a regular feature of our activities.
The uplift in the revaluation of the Group's investment property
portfolio of 5.5% resulted, as usual, from specific action on
individual properties. This year, we did experience a market
movement in the revaluation of our shopping centres but this
was modest compared with the increase from management action.
Properties whose value particularly increased included a
distribution facility at Telford where we let over 200,000 sq
ft to Wincanton; - Thurleigh Airfield business park which saw
useful rent reviews; - Wythenshawe shopping centre which
benefited from lettings, rent reviews and the expiry of rent-
free periods - and Edmonton shopping centre which benefited
from the reconfiguration of its market in the previous year,
together with new lettings and lease renewals.
Strategy and The Hopper
We have continued with the consistent strategy of regeneration
through a network of regional offices in a limited number of
specialisations. This strategy which is based on expertise in
the process of regeneration across a wide range of markets
enables us to react to market movements effectively.
A key element of that strategy is "the Hopper" which is our term
for the bank of opportunities whether in land or buildings,
which we hold. In some cases, development may be more than a
decade away but the ability to draw-down from a wide range of
opportunities over a long period, provides a considerable
degree of comfort to a future programme. In aggregate,
therefore, we should always be able to roll out a meaningful
annual programme even if any individual opportunity may suffer
delay or disappointment
Regular acquisitions are an important ingredient to match or exceed
those opportunities used or abandoned in the year. The past
year was particularly fruitful in this regard. Either
directly or through joint ventures, we acquired 22 employment
complexes from major industrial concerns such as Alstom, Corus,
Goodyear, Invensys and Vokes. We were also selected by the
South West of England Regional Development Agency as its
preferred development partner for the creation of an urban
village in Dursley, Gloucestershire and acquired the Elephant &
Castle shopping centre through our joint venture company Key
Property Investments Limited.
We also acquired an interest in a Ministry of Defence site at
Borehamwood let to Marconi which we subsequently sold into a
joint venture with Legal & General which also includes other
interests held by Legal & General and Marconi.
We are still seeking further similar opportunities in our areas of
specialisation where our record of performing on challenging
sites is benefiting us.
The Future
Once again, we move into the current year with a solid development
programme. Much of the programme is based on schemes that are
well advanced and we are already sketching in a programme for
2004.
In terms of built schemes, we take forward the Pets at Home
distribution facility, now sold; Phase two of Castle Walk,
Newcastle-under-Lyme; Phase one of Shrub Hill retail park,
Worcester; the unsold element of Phase one of Quinton business
park; Finnings unit at Orbital, Cannock; and speculative units
including those just being completed at Avonmouth.
In addition, we have pre-sold the Screwfix facility at Trentham
Lakes which will be completed on construction of the building.
We also have a number of pre-sold / pre-let opportunities
either exchanged or in solicitors' hands across a range of our
sites.
The brownfield land programme is scheduled to make a further
significant contribution and sales have already been agreed in
respect of the early part of that programme.
The Hopper is better topped up than ever and the major schemes in
it are moving through the planning and pre-construction process
in an ordered manner to meet this year's and future years'
programmes. We have continued to recruit in our main regional
offices and our team is stronger than it has ever been.
Anthony Glossop
Deputy Chairman and Chief Executive
FINANCIAL REVIEW 2002
Results Summary
2002 was our tenth consecutive year of profits growth. The pre-
tax profit for the year to 30th November 2002 increased by 18%
to #30.0m (2001: #25.5m; 1992: #1.7m).
Earnings per share increased by 13% to 17.1p (2001: 15.2p), and
total dividends increased by 16% to 5.7p per share (2001:
4.9p).
Retained profits of #13.7m combined with #15.3m of revaluation
surpluses to produce an 18% increase in net assets per share
to 160.9p (2001: 136.9p; 1992: 34.8p).
Our corporate objective remains to double net asset value per
share every five years and to pay an increasing dividend in
line with the growth in recurring profits. Net asset value
per share has increased by 134% in the last five years and
dividends per share have increased by 90%.
Operating Profit
Gross rental income received in the year, including our share of
rent from joint ventures, increased by 13% (#3.4m) to #30.7m.
Properties acquired or constructed during the year, net of
disposals, accounted for #3.0m of this increase.
On an annualised basis, the gross portfolio rent receivable as at
30th November 2002, including our share of rent from joint
ventures, increased by 25% (#6.9m) to #34.5m. Acquisitions
net of disposals added #4.9m with new lettings and rent
reviews net of vacations and surrenders, increasing the
portfolio rent by #2.0m.
The type of property that we aim to purchase invariably includes a
significant proportion of short-term income and void space.
Hence under current market conditions where lettings are
undoubtedly more difficult to obtain and to retain, our hands-
on approach to asset and tenant management is proving vital in
maintaining growth in the rental portfolio.
Development profits increased by 81% in the year to #23.2m (2001:
#12.8) with joint ventures contributing particularly strongly.
Once again, there was a broad base to the development
programme with 40 schemes contributing to profit, of which six
made profits of in excess of #1m. Continuity of this level of
activity has been maintained into 2003 with profits of #7.0m
on transactions which have exchanged or completed since the
year-end.
Overheads increased significantly during the year by #3.3m to
#8.8m, principally as a result of increased staff costs as we
continue to expand our team and we also made a provision of
#1.8m for share option costs. The Company had a total of
5.6m share options outstanding as at 30th November 2002. The
Board has adopted the policy of satisfying these options, when
exercised, by purchasing the required number of shares in the
market place, rather than issuing new share capital. As it
is our current intention to maintain this approach, it is
appropriate to make provision within the accounts over the
period of the option for these future costs.
Finance Costs
Net interest payable has increased to #13.2m (2001: #10.7m).
Group net borrowings increased by #33.1m during the year, the
cost of which was partially offset by falling interest rates.
The weighted average rate of interest payable as at 30th
November 2002 has now fallen to 6.3% (2001: 6.8%).
The Group's borrowings are at variable rates of interest and we
manage our interest rate exposure by way of interest rate
swaps and cap and collar transactions. At the year-end, 62%
of net borrowings were hedged in this way (2001: 77%).
The Group does not capitalise interest on its developments or its
investments, but expenses all interest as it arises straight
to the profit & loss account.
Taxation
The effective rate of taxation for the year, including provision
for deferred taxation, was 28.1% (2001: 25.6%). The actual
rate of tax payable was 24.9% (2001: 28.3%) and it is
anticipated that with the continued utilisation of capital
allowances the actual rate of tax payable will remain below
the standard rate of Corporation Tax.
Investment Properties
The total value of the income-producing portfolio, including 100%
of joint ventures, increased by #87m during the year to #410m.
Expenditure on the portfolio totalled #82m of which #30m was
within our 50% joint venture company, Key Property Investments
Limited, in respect of the purchase of the Elephant & Castle
shopping centre. The acquisition in December 2002, following
the Company's financial year end, of a portfolio of industrial
properties from Alstom, by Key Property Investments Limited
for #113m, has increased the portfolio value to #523m.
The majority of the revaluation increase represents real added
value from the management and development of specific assets
within the portfolio, although it did include #2m as a result
of small yield shifts on the retail properties.
The Group measures the ungeared returns from its investment
portfolio against the Investment Property Data Bank (IPD) all
property total return index. St. Modwen continues strongly
to out-perform the index.
Gearing And Financing
Group net borrowings have increased to #173.8m (2001: #140.7m),
representing a gearing ratio of 89%, up modestly from 85% last
year. This continues to be at the lower end of our preferred
gearing range, leaving ample headroom for further acquisitions
and development.
In addition, the Group's share of debt within joint ventures and
which is secured solely upon the assets within the relevant
joint venture was #42.1m (2001: #31.1m).
The Group is financed by shareholders' funds and bank debt of
varying maturity profiles. This is felt to be appropriate to
the needs of the Group and reflects the type of assets in
which it invests. At 30th November 2002, the weighted
average debt maturity was 8 years (2001: 7 years).
Bank facilities, excluding joint ventures, totalled #228m at the
year-end (2001: #205m), with additional and increased
facilities having been provided in the period by Northern
Rock, HSBC and Bank of Scotland.
The effect of the fair value adjustment (FRS13) of marking the
Group's interest rate derivatives to current market value
would be to produce a notional liability after tax of #2.0m or
1.7p per share (2001: #1.8m or 1.5p per share).
Shareholders Returns
The analysis of total shareholder returns for the property sector
published by HSBC, ranks St. Modwen 2nd for the ten-year
period ended December 2002. Our total shareholder return was
32.7% per annum compared with a 6.8% per annum return for the
FTSE All Share Index and 10.3% for the FTSE Real Estate Index.
The 41% increase in the share price during the year to 151.5p as
at 30 November 2002 places the Company's shares on a high
rating relative to the Real Estate sector when measured in
terms of NAV per share. In contrast, the Group's historic
price earnings ratio is one of the lowest in the sector,
albeit increasing to 8.7 during the year.
Bill Oliver
Finance Director
St. Modwen Properties PLC
Group Profit and Loss Account
For the year ended 30 November
2002 2001
Notes #'000 #'000
---------- -----------
Turnover
Group and share of joint ventures 1 136,893 74,427
Less share of joint ventures (28,728) (8,459)
turnover
----------- ----------
108,165 65,968
----------- ----------
Operating profit
Group operating profit 28,561 27,823
Share of operating profit in
joint ventures 12,687 4,387
Share of operating profit in
associates 1,093 735
----------- ----------
1 42,341 32,945
Profit on sale of investment
properties 1 832 3,268
Net interest payable 2 (13,161) (10,716)
----------- ----------
Profit on ordinary activities 30,012 25,497
before taxation
Taxation on profit on ordinary 3 (8,448) (6,516)
activities
----------- ----------
Profit on ordinary activities
after taxation 21,564 18,981
Equity minority interest (1,016) (755)
----------- ----------
Profit attributable to shareholders 20,548 18,226
Dividends 4 (6,846) (5,891)
----------- ----------
Transferred to reserves 13,702 12,335
----------- ----------
Basic earnings per ordinary share 5 17.1p 15.2p
Diluted earnings per ordinary 5 17.1p 15.0p
share
Dividend per ordinary share 4 5.7p 4.9p
All activities derive from continuing operations.
A statement of the movement in reserves is shown in note 9.
St. Modwen Properties PLC
Group Balance Sheet
As at 30 November
2002 2001
Notes #'000 #'000
---------- ----------
Fixed assets
Tangible assets 6 270,007 212,222
Investments
Joint ventures
Share of gross assets 77,348 49,453
Share of gross liabilities (53,650) (37,073)
Share of net assets 7 23,698 12,380
Associated companies 7 7,514 5,543
Other investments 7 6,615 6,130
---------- ----------
307,834 236,275
---------- ----------
Current assets
Stocks 8 101,179 94,040
Debtors 10,072 10,417
Cash at bank and in hand 2,927 200
---------- ----------
114,178 104,657
Current liabilities
Creditors: amounts falling due
within one year (53,091) (33,933)
---------- ----------
Net current assets 61,087 70,724
---------- ----------
Total assets less current
liabilities 368,921 306,999
Creditors amounts falling due after more
than one year (168,020) (136,734)
Provisions for liabilities and charges (3,979) (2,994)
Equity minority interests (2,605) (1,910)
---------- ----------
Net assets 194,317 165,361
---------- ----------
Capital and reserves
Called up share capital 12,077 12,077
Share premium account 9 9,167 9,167
Merger reserve 9 9 9
Capital redemption reserve 9 356 356
Revaluation reserve 9 80,191 63,280
Profit and loss account 9 92,517 80,472
---------- ----------
Equity shareholders' funds 194,317 165,361
---------- ----------
Net assets per ordinary share 160.9p 136.9p
Gearing 89% 85%
St. Modwen Properties PLC
Group Cash Flow Statement
For the year ended 30 November
2002 2001
Notes #'000 #'000 #'000 #'000
------ ------- ------- -------
Net cash inflow/(outflow) from
operating activities 10(a) 38,805 (6,242)
Dividends received from joint
ventures - 3,635
Returns on investments and servicing
of finance
Interest received 72 213
Interest paid (10,312) (9,898)
-------- ---------
Net cash outflow from returns on
investments and servicing of finance (10,240) (9,685)
Taxation (7,170) (5,689)
Capital expenditure and financial
investment
Additions to investment properties (48,848) (29,535)
Additions to operating properties
and other tangible assets (112) (564)
Acquisition of investment - (6,000)
Sale of investment properties 5,612 21,863
Sale of operating properties and
other tangible assets 36 -
-------- ---------
(43,312) (14,236)
Acquisitions and disposals
Investment in joint ventures and
associates (4,861) (1,744)
Equity dividends paid (6,278) (5,408)
-------- ---------
Cash outflow before use of liquid
resources and financing (33,056) (39,369)
Financing
(Redemption)/issue of loan notes (48) 333
Increase in debt 36,046 30,437
-------- ---------
Net cash inflow from financing 10(b) 35,998 30,770
-------- ---------
Increase/(decrease) in cash in 10(b)
the year 2,942 (8,599)
-------- ---------
Reconciliation of net cash flow
to movement in net debt
Increase/(decrease) in cash in the year 2,942 (8,599)
Cash inflow from increase in debt (36,046) (30,437)
Loan notes redeemed /(issued)
during the year 48 (333)
-------- ---------
Change in net debt resulting from
cash flows (33,056) (39,369)
Net debt at 1 December (140,718) (101,349)
-------- ---------
Net debt at 30 November (173,774) (140,718)
-------- ---------
St. Modwen Properties PLC
Supplementary Statements
For the year ended 30 November
2002 2001
#'000 #'000
---------- ------------
Group Statement of Total Recognised
Gains and Losses
Profit for the year 20,548 18,226
Unrealised surplus on revaluation of
group investment properties (net of
minority interests) 13,837 11,904
Unrealised surplus on revaluation of
assets held by joint ventures and
associated companies
1,417 1,396
---------- ------------
Total recognised gains and losses since
last annual report 35,802 31,526
---------- ------------
2002 2001
#'000 #'000
---------- ------------
Note of Historical Cost Profits and Losses
Reported profit on ordinary activities
before taxation 30,012 25,497
Realisation of property revaluation
(losses)/gains of earlier years (1,657) 645
---------- ------------
28,355 26,142
---------- ------------
Historical cost profit for the year after
taxation, minority interests and dividends 12,045 12,980
---------- ------------
2002 2001
#'000 #'000
---------- ------------
Group Reconciliation of Movements in Shareholders'Funds
Profit attributable to shareholders 20,548 18,226
Dividends (6,846) (5,891)
---------- ------------
13,702 12,335
Unrealised surplus on revaluation of
group investment properties (net of
minority interests) 13,837 11,904
Unrealised surplus on revaluation of
assets held by joint ventures and
associated companies 1,417 1,396
---------- ------------
Net additions to shareholders' funds 28,956 25,635
Opening shareholders' funds 165,361 139,726
---------- ------------
Closing shareholders' funds 194,317 165,361
---------- ------------
St. Modwen Properties PLC
Notes to the Financial Statements
1.Turnover and Profit Analysis
2002 2001
-------------------- ----------------------
Cost of Cost of
Turnover sales Profit Turnover sales Profit
#'000 #'000 #'000 #'000 #'000 #'000
Rental income ------- ------ ------ ------- ------- -------
Group 25,835 (3,532) 22,303 24,456 (2,861) 21,595
Share of joint ventures 4,852 (799) 4,053 2,816 (325) 2,491
Property development
Group 79,777 (65,351) 14,426 39,059(28,241) 10,818
Share of joint ventures 23,876 (15,135) 8,741 5,643 (3,668) 1,975
Other activities 2,553 (1,920) 633 2,453 (1,541) 912
------- ------ ------ ------- ------- -------
136,893 (86,737) 50,156 74,427(36,636) 37,791
------- ------ ------- -------
Share of operating profit in
associates 1,093 735
Administrative and other operating
expenses
Group (8,801) (5,502)
Share of joint ventures (107) (79)
--------- ---------
Operating profit 42,341 32,945
Profit on sale of investment properties
- group 832 1,673
- joint ventures - 1,595
--------- ---------
Profit before interest 43,173 36,213
--------- ---------
2. Net Interest Payable
2002 2001
#'000 #'000
------------ ----------
Interest payable on bank and other
loans and overdrafts 10,742 9,552
Interest receivable (72) (206)
------------ ----------
Group interest charge 10,670 9,346
Share of joint ventures' net interest 2,320 1,250
Share of associated companies' net interest 171 120
------------ ----------
13,161 10,716
------------ ----------
3.Taxation on Profit on Ordinary Activities
(a) Analysis of Charge in Period
2002 2001
#'000 #'000 #'000 #'000
------- ------- ------- -------
Current tax
UK corporation tax on profits of the period 4,513 6,071
Adjustments in respect of previous periods (192) (215)
--------- ---------
4,321 5,856
Share of joint ventures' taxation 3,122 1,486
Adjustments in respect of previous periods 20 (132)
--------- ---------
3,142 1,354
--------- ---------
Total current tax (note(b)) 7,463 7,210
Deferred tax
Origination and reversal of timing
differences (note 11) 985 (694)
Taxation on profits on ordinary
activities 8,448 6,516
--------- ---------
(b) Factors Affecting Tax Charge For Period
2002 2001
#'000 #'000
--------- ---------
Profit on ordinary activities before tax 30,012 25,497
--------- ---------
Profit on ordinary activities at the standard rate of
UK Corporation Tax of 30% (2001: 30%) 9,004 7,649
Disallowed expenses and non-taxable income (207) (55)
Capital allowances for the period in excess of depreciation (443) (257)
Short term timing differences (636) 575
Net capital gains on disposal of investment properties (115) (442)
Other 32 87
Adjustments to tax charge in respect of previous periods
(including joint ventures) (172) (347)
--------- ---------
7,463 7,210
========= ==========
4.Dividends
2002 2001
#'000 #'000
--------- ----------
Ordinary 10p shares
- proposed final dividend of 3.8p (2001: 3.3p) 4,547 3,967
- interim of 1.9p (2001: 1.6p) 2,299 1,924
--------- ----------
6,846 5,891
--------- ----------
5.Earnings per Share
Earnings per ordinary share are calculated as follows:
(a) Basic earnings per ordinary share are calculated by
dividing the profit attributable to ordinary shareholders
of #20,548,000 (2001: #18,226,000) by the weighted
average number of shares during the year (excluding the
shares held for share incentive schemes which are owned
by the company) of 120,310,795 (2001: 120,213,493).
(b) As the group has decided not to issue shares to
satisfy outstanding share options, there will be no
dilution of earnings arising from the exercise of
employee share options.
6. Tangible Fixed Assets
a) Group Long Plant
Freehold leasehold machinery
investment investment Operating and
properties properties properties equipment Total
#'000 #'000 #'000 #'000 #'000
-------- --------- -------- -------- --------
Cost or valuation
At 30 November 2001 138,838 70,882 2,210 1,081 213,011
Additions 24,658 24,020 170 112 48,960
Disposals (4,047) (733) - (167) (4,947)
Surplus on revaluation 7,866 5,996 - - 13,862
-------- --------- -------- -------- --------
At 30 November 2002 167,315 100,165 2,380 1,026 270,886
-------- --------- -------- -------- --------
Depreciation
At 30 November 2001 - - 30 759 789
Charge for the year - - 68 153 221
Disposals - - - (131) (131)
-------- --------- -------- -------- --------
At 30 November 2002 - - 98 781 879
-------- --------- -------- -------- --------
Net book value
At 30 November 2002 167,315 100,165 2,282 245 270,007
-------- --------- -------- -------- --------
At 30 November 2001 138,838 70,882 2,180 322 212,222
-------- --------- -------- -------- --------
Tenure of operating properties
Freehold 482
Long leasehold 1,800
--------
2,282
--------
(b) Freehold and long leasehold investment properties were valued as
at 30 November 2002 by King Sturge & Co., Chartered Surveyors in
accordance with the Appraisal and Valuation Manual of the Royal
Institution of Chartered Surveyors, on the basis of open market value.
(c) Historical cost of investment properties
Group
2002 2001
#'000 #'000
-------- --------
Freehold investment properties 116,145 95,534
Long leasehold investment properties 77,021 53,734
-------- --------
193,166 149,268
-------- --------
7. Investments Held as Fixed Assets
a) Group Investment Investment Investment
in joint in associated in own Other
ventures companies shares investments Total
#'000 #'000 #'000 #'000 #'000
-------- --------- -------- -------- -------
At 30 November 2001 12,380 5,543 130 6,000 24,053
Investments in year 3,725 - 1,136 - 4,861
Share of revaluation of assets 368 1,049 - - 1,417
Share of post tax profits less losses7,225 922 - - 8,147
Amortisation and appropriation - - (651) - (651)
-------- --------- -------- -------- -------
At 30 November 2002 23,698 7,514 615 6,000 37,827
-------- --------- -------- -------- -------
(b) Group Share of the Net Assets of the Joint Ventures
Great
Key Barton British
Property Holaw Business Clarke Kitchen
Investments (462) Park London Sowcrest Company
Limited Limited Limited Limited Limited Limited Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
---------- -------- -------- -------- ------- ------- -------
Fixed assets 41,365 3,850 - - - 73 45,288
Current assets 18,729 48 11,313 21 1,939 10 32,060
Current liabilities (5,828) (451) (4,895) - (170) (176) (11,520)
Non-current liabilities (37,490) (2,965) - - (1,675) - (42,130)
---------- -------- -------- -------- --------- ------- -------
16,776 482 6,418 21 94 (93) 23,698
---------- -------- -------- -------- --------- ------- -------
8. Stocks
2002 2001
#'000 #'000
------------ -----------
Work in progress (including freehold land
for development):
Developments in progress 81,339 69,901
Income producing development property 19,803 24,077
------------ -----------
101,142 93,978
Goods for resale 37 62
------------ -----------
101,179 94,040
------------ -----------
9. Group Reserves
Share Capital Profit
Premium Merger Redemption Revaluation & Loss
Account Reserve Reserve Reserve Account
#'000 #'000 #'000 #'000 #'000
-------- -------- ---------- ---------- ---------
At 30 November 2001 9,167 9 356 63,280 80,472
Surplus on revaluation of
investment properties - - - 13,837 -
Prior years' revaluation deficits
realised - - - 1,657 (1,657)
Share of revaluation of assets held
by joint ventures and associated companies - - - 1,417 -
Retained profit for the year - - - - 13,702
-------- -------- ---------- ---------- ---------
At 30 November 2002 9,167 9 356 80,191 92,517
-------- -------- ---------- ---------- ---------
10. Group Cash Flow Statement
(a) Reconciliation of operating profit to operating cash flows
2002 2001
#'000 #'000
-------- --------
Operating profit 28,561 27,823
Depreciation and amortisation charges 872 336
Decrease/(increase) in debtors 345 (2,586)
Increase in stocks (7,139) (31,994)
Increase in creditors 16,166 179
-------- --------
Net cash inflow/(outflow) from
operating activities 38,805 (6,242)
-------- --------
(b) Analysis of net debt At At
30 November Cash 30 November
2001 Flows 2002
#'000 #'000 #'000
---------- -------- -----------
Cash
Cash at bank and in hand 200 2,727 2,927
Bank overdraft (662) 215 (447)
---------- -------- ------------
(462) 2,942 2,480
---------- -------- ------------
Debt
Debt due within one year (3,522) (4,712) (8,234)
Debt due after one year (136,734) (31,286) (168,020)
---------- -------- ------------
(140,256) (35,998) (176,254)
---------- -------- ------------
(140,718) (33,056) (173,774)
---------- -------- ------------
11.Deferred Taxation
Provided Unprovided
------ ------- ------- ------
2002 2001 2002 2001
#'000 #'000 #'000 #'000
------ ------- ------- ------
The amounts of deferred taxation provided
and unprovided in the accounts are:
Capital allowances in excess of
depreciation 3,655 3,569 - -
Other timing differences 324 (575) - -
------ ------- ------- --------
3,979 2,994 - -
Revaluation of properties (including
share of joint ventures) - - 17,091 14,498
------ ------- ------- --------
3,979 2,994 17,091 14,498
------ ------- ------- --------
Reconciliation of movement on
deferred tax liability
Balance as at 30 November 2001 2,994
Profit and loss account 985
-------
Balance as at 30 November 2002 3,979
-------
12.Financial Instruments
a) Maturity Profile of Committed Financial Liabilities
2002 2001
Drawn Undrawn Total Drawn Undrawn Total
#000 #000 #000 #000 #000 #000
------- -------- ------- -------- -------- ---------
One year 8,681 5,053 13,734 4,184 4,838 9,022
One to two years 2,963 1,797 4,760 260 - 260
Two to five years 115,057 44,228 159,285 98,974 59,601 158,575
More than five years 50,000 - 50,000 37,500 - 37,500
------- -------- ------- -------- -------- -----------
Gross financial
liabilities 176,701 51,078 227,779 140,918 64,439 205,357
------- -------- ------- -------- -------- -----------
Interest payable on loans repayable in more than five years is 1.425%
above LIBOR. The weighted average period to maturity of borrowings was
8 years (2001: 7 years).
b) Interest Rate Profile
The following interest rate profiles of the group's financial
liabilities are after taking into account interest rate swaps entered
into by the group.
Fixed Rate Borrowings
Weighted
Floating rate Fixed rate Weighted average
financial financial average time for which
Total liabilities* liabilities interest rate rate is fixed
#000 #000 #000 % (years)
------- ---------- -------- ---------- ------------
At 30 November 2002 176,701 96,701 80,000 5.64 3
------- ---------- -------- ---------- ------------
At 30 November 2001 140,918 61,918 79,000 5.83 4
------- ---------- -------- ---------- ------------
* Of which #28,100,000 was hedged by interest rate options (2001:
#29,340,000). Interest rates on floating rate liabilities is based on
LIBOR.
c) Fair Values of Financial Assets and Liabilities
2002 2001
Book Fair Book Fair
Value Value Value Value
#000 #000 #000 #000
-------- ---------- --------- ----------
Primary financial instruments:
Fixed asset investments 6,000 6,000 6,000 6,000
Loans to joint ventures and associates 4,086 4,086 3,996 3,996
Income due from other investments 1,032 1,032 880 880
Cash 2,927 2,927 200 200
Loans from joint ventures
and associates (9,456) (9,456) (825) (825)
Short-term loans (8,681) (8,681) (4,184) (4,184)
Long-term loans (168,020) (168,020) (136,734) (136,734)
Derivative financial instruments:
Interest rate swaps and options - (2,863) - (2,585)
--------------------------------------------------------------------------------------------
Other information
(a) The proposed final dividend will be paid on 25 April 2003 to
ordinary shareholders on the register at the close of business on 28
March 2003.
(b) The annual report and accounts will be posted to all shareholders
on 10 March 2003 and copies will be available to the public from that
date at the company's registered office, Lyndon House, 58/62 Hagley
Road, Edgbaston, Birmingham B16 8PE, during normal business hours or
by post.
(c) The balance sheet at 30 November 2002 and the results for the
year then ended and comparative figures for 2001 do not
constitute statutory accounts in accordance with Section 240 of
the Company's Act 1985. The financial information for the year
ended 30 November 2001 is derived from the statutory accounts for
that year which have been delivered to the Registrar of
Companies. The auditors reported on the accounts; their report
was unqualified and did not contain a report under section 237
(2) or (3) of the Company's Act 1985.
The statutory accounts of the year ended 30 November 2002 will be
finalised on the basis of the financial information presented by
the directors in this preliminary announcement, and will be
delivered to the Registrar of Companies following the company's
Annual General Meeting.
(d) This announcement is prepared on the basis of accounting policies
stated in the previous year's financial statements.
(e) This announcement was approved by the board of directors on 10
February 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAEAFFALDEAE
