RNS Number:1109O
Hampton Trust PLC
29 July 2003
29 July 2003
HAMPTON TRUST PLC
UNAUDITED PRELIMINARY RESULTS FOR YEAR
ENDED 31 MARCH 2003
HIGHLIGHTS
* Pre-tax losses reduced by approximately 34% to #7.3 million
* Net cash inflow from operating activities increased by #5.5 million to #7.2
million
* Sale of Southend Property Holdings PLC resulted in elimination of #53.2
million 10.5% debenture and nominal annual weighted average cost of
servicing fixed long term liabilities reduced from approximately 9.2% to
approximately 7.5%
* Net debt reduced by approximately 43% to #85.6 million
* Property portfolio, including developments, valued at #97.3 million
* Group has approximately #75 million development pipeline - mainly in
joint venture with financially strong partners
"Against the current background of uncertain market conditions and the
resolution of the Group's fixed rate debt it would be prudent not to be over
enthusiastic. If we can resolve the outstanding issue of the fixed rate debt
then we can wholeheartedly commence the process of rebuilding Hampton Trust into
a dynamic and expanding property company," Graeme Jackson, Chairman.
Contact:
Graeme Jackson
Chairman & Chief Executive, Hampton Trust PLC Tel: 020 7499 4994
Baron Phillips
Tavistock Communications Tel: 020 7600 2288
CHAIRMANS STATEMENT
As shareholders are aware the principal event during the year was the disposal,
on 19 March 2003, of Southend Property Holdings PLC ("Southend"), a wholly owned
subsidiary, which relieved the Group of its most significant long-term
liability, being the #53.2 million Debenture fixed at 10.5% until 2025.
Consequently the nominal annual weighted average cost of servicing fixed long
term liabilities reduced from approximately 9.2% to approximately 7.5%.
This disposal is a key event in laying the foundations for the Group's future
strategy. The principal focus for the past 18 months has been to unravel the
Group's two fixed rate debt instruments, which have been holding back our
progress and, consequently, have had a negative impact on results over the past
few years.
We are pleased to have been able to resolve satisfactorily the first of these
onerous debt instruments and we are seeking to rationalise the second, an 8%
Convertible Unsecured Loan Stock 2020 ("CULS") with a book value of #29.7
million.
Operating profit has fallen by #883,000 in the year to 31 March 2003 to #4.4
million due principally to an increased goodwill charge of #467,000 and the
impact of property disposals on net rental income.
As Southend was disposed of close to the year end our results reflect the full
impact of the Debenture for almost the whole period resulting in total interest
charges of #11.3 million (2002: #13.0 million). Stripping out the interest
charge on the Debenture would result in an interest charge of #5.9 million from
continuing operations, of which #2.4 million relates to the CULS.
As a result Hampton Trust has produced a loss before taxation of #7.3 million
compared to a loss of #11.1 million in the previous year, which included one-off
costs amounting to #3.0 million on redemption of borrowings. The Directors are
not recommending a final dividend. The net cash inflow from operating activities
has increased by #5.5 million to #7.2 million in the year due principally to the
decision to take the property management function back in-house. Of the #7.2
million inflow in the year #3.2 million was contributed by Southend.
Together with the disposal of Southend, other property sales and an improvement
in the level of rent collection, net debt has fallen from #150.3 million at 31
March 2002 to #85.6 million at 31 March 2003.
Although considerable time was spent during the year negotiating the sale of
Southend, we also continued our stated strategy of focusing our investment
portfolio on the industrial property sector. Following the disposal of Southend
the Group's remaining portfolio, including developments, has a book value of
#97.3 million and the rent roll from our continuing operations is #7.1 million.
During the year we disposed of investment properties that were either non-core
holdings or where we believed there was little prospect of future growth,
raising approximately #8.7 million, which was used to further reduce the Group's
debt. The majority of these sales were retail properties that generated total
profits on disposal of #126,000. Since the year end, a further property has been
sold for #5.2 million and a further disposal has been agreed, for which
contracts have been exchanged, for #3.6 million.
At the same time we have concentrated on improving the core portfolio and
particularly the management of our core properties. This has been reflected in a
stronger cash flow from our investment properties as rent collection has
improved dramatically.
The systems we have developed in-house, to create improved management tools,
have encouraged us to establish a new business, Hampton Property Management
Limited, which will manage property for third parties. Our first client is the
purchaser of the Southend portfolio. We have therefore sold a loss making
subsidiary for which we now receive property management income for no change in
the overhead base.
We believe there is a market for our property management expertise and this area
will, I am sure, become an additional extremely useful revenue earner in the
future. Obvious potential clients include larger property owning institutions
that may not wish to bear the overhead of managing their own portfolios and
would prefer to contract out the management to an incentivised highly skilled
and experienced team.
While our aim is to generate long-term income streams both from managing our own
and other portfolios, shareholders should also be aware that Hampton Trust has a
substantial #75 million property development pipeline.
It should also be borne in mind that most of our development programme is in
joint venture with financially strong partners, such as AWG Developments, part
of AWG plc, and our downside should therefore be protected. In all but one, the
Group has an equity stake in each development as well as the benefit of a
management fee arrangement. The one exception is the Birmingham development site
where we provide consultancy services and continue to hold a profit share in the
completed project.
We and our development partners take great care in the current market to ensure
each scheme is positioned to reflect the local market in terms of use, planning,
design and specification. However we remain cautious about commencing
construction of any schemes in the present environment unless we have tenants or
buyers in place.
The Board appreciates that having sold Southend more than half the restructuring
of the Group has been completed. However, the Directors continue to concentrate
on the remainder of the task. When it has been finished we will be able to
reposition Hampton Trust and build for growth, the foundations of which, as I
have already indicated, are in the process of being laid.
Against the current background of uncertain market conditions and the resolution
of the Group's fixed rate debt it would be prudent not to be over enthusiastic.
If we can resolve the outstanding issue of the fixed rate debt then we can
wholeheartedly commence the process of rebuilding Hampton Trust into a dynamic
and expanding property company.
Graeme Jackson
29 July 2003
Consolidated profit and loss account
for the year ended 31 March
Notes 2003 2002
Unaudited Audited
#'000 #'000
Turnover
Continuing operations 12,129 8,172
Discontinued operations 5,411 10,015
__________ __________
17,540 18,187
Cost of sales (8,246) (7,507)
__________ __________
Gross profit 9,294 10,680
Administrative expenses (4,889) (5,392)
Operating profit (loss)
Continuing operations 4 (1,884)
Discontinued operations 4,401 7,172
4,405 5,288
Share of associates' operating loss (30) -
Profit (loss) on disposal of investment properties 126 (433)
Profit on sale of fixed asset investments 28 -
Loss on sale of subsidiary undertakings (12) -
__________ __________
Profit on ordinary activities before finance costs 4,517 4,855
Investment income 121 266
Amounts written off investments (652) (332)
Premium on redemption of borrowings (net) - (2,953)
Interest payable and similar charges (11,332) (12,969)
__________ __________
Loss on ordinary activities before taxation (7,346) (11,133)
Tax on loss on ordinary activities (45) (31)
__________ __________
Loss for the financial year (7,391) (11,164)
Dividends paid and appropriated on non-equity 2 (479) (479)
shares
__________ __________
Loss for the year deducted from reserves (7,870) (11,643)
__________ __________
Loss per share
Basic 3 (5.94p) (9.49p)
Diluted 3 (5.98p) (9.56p)
__________ __________
Consolidated balance sheet
as at 31 March
2003 2002
Unaudited Audited
#'000 #'000
Fixed assets
Goodwill 6,160 6,935
Tangible assets 82,611 166,264
Investments 2,342 2,720
__________ __________
91,113 175,919
__________ __________
Current assets
Stocks 10,313 19,851
Properties held for resale 4,690 5,253
Debtors
due within one year 3,586 9,758
due after one year 6,354 -
Cash at bank and in hand 862 1,298
__________ __________
25,805 36,160
Creditors: Amounts falling due within one year (19,170) (52,231)
__________ __________
Net current assets (liabilities) 6,635 (16,071)
__________ __________
Total assets less current liabilities 97,748 159,848
__________ __________
Creditors: Amounts falling due after more than
one year
Convertible debt (29,650) (29,650)
Other creditors (51,963) (104,793)
__________ __________
(81,613) (134,443)
__________ __________
Net assets 16,135 25,405
__________ __________
Capital and reserves
Called-up share capital 16,189 15,509
Share premium account 670 670
Revaluation reserve 5,103 15,541
Capital redemption reserve 31,106 31,106
Other reserve 780 780
Profit and loss account (37,713) (38,201)
__________ __________
Shareholders' funds
Equity interests 6,709 16,458
Non-equity interests 9,426 8,947
__________ __________
16,135 25,405
__________ __________
Consolidated cash flow statement
for the year ended 31 March
Notes 2003 2002
Unaudited Audited
#'000 #'000
Net cash inflow from operating activities 4 7,209 1,730
Returns on investments and servicing of (10,017) (12,707)
finance
Taxation (46) (129)
Capital expenditure and financial 7,609 6,284
investment
Acquisitions and disposals 2,457 (391)
__________ __________
Cash inflow (outflow) before management of 7,212 (5,213)
liquid resources and financing
Financing 5 (6,575) (23)
__________ __________
Increase (decrease) in cash in the year 5 637 (5,236)
__________ __________
Consolidated statement of total recognised gains and losses
2003 2002
Unaudited Audited
#'000 #'000
Loss for the financial year (7,391) (11,164)
Unrealised deficit on revaluation of investment (2,559) (1,182)
properties
__________ __________
Total recognised gains and losses relating to the (9,950) (12,346)
year __________ __________
Reconciliation of movements in Group shareholders' funds
2003 2002
Unaudited Audited
#'000 #'000
Loss for the financial year (7,391) (11,164)
Other recognised gains and losses relating to the year (2,559) (1,182)
(net)
__________ __________
(9,950) (12,346)
Issue of ordinary share capital 680 926
Dividends paid on non-equity shares - (240)
__________ __________
Net reduction to shareholders' funds (9,270) (11,660)
Opening shareholders' funds 25,405 37,065
__________ __________
Closing shareholders' funds 16,135 25,405
__________ __________
Notes
1 Basis of preparation
The company confirms that:
a) these preliminary financial statements do not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985.
b) the figures for the year ended 31 March 2003 are unaudited and have been
prepared using accounting policies consistent with the previous year.
c) the figures for the year ended 31 March 2002 have been extracted from the
statutory accounts which have been filed with the Registrar of Companies
and which received an unqualified audit report.
2 Dividends paid and appropriated on non-equity shares
2003 2002
Unaudited Audited
#'000 #'000
Non-equity shares:
- 51/2% (net) cumulative convertible redeemable - 240
preference dividend paid
- 51/2% (net) cumulative convertible redeemable 479 239
preference dividend appropriated
__________ __________
479 479
__________ __________
The 2nd 6 monthly dividend in 2002 of #239,000 and both 6 monthly dividends in
2003 totalling #479,000 on the 51/2% (net) cumulative convertible redeemable
preference shares have not been paid as the Company had no distributable
reserves on the due dates for payment. These amounts can only be paid once the
Company has sufficient distributable reserves and consequently these amounts
have been appropriated to non-equity interests at 31 March 2003.
3 Loss per share
The calculations of loss per share are based on the following losses and numbers
of shares.
Basic Diluted
2003 2002 2003 2002
Unaudited Audited naudited Audited
#'000 #'000 #'000 #'000
Loss for the financial year (7,391) (11,164) (7,391) (11,164)
Preference dividends (479) (479) (479) (479)
__________ __________ __________ __________
(7,870) (11,643) (7,870) (11,643)
__________ __________ __________ __________
2003 2002
Unaudited Audited
Number of Number of
shares shares
Weighted average number of shares:
For basic earnings per share 132,455,878 122,694,913
Exercise of share options (880,000) (880,000)
__________ __________
For diluted earnings per share 131,575,878 121,814,913
__________ __________
The weighted average number of shares does not include the shares owned by the
ESOP which has waived its entitlement to dividends.
4 Reconciliation of operating profit to net cash inflow from operating
activities
2003 2002
Unaudited Audited
#'000 #'000
Operating profit 4,405 5,288
Depreciation charges 249 477
Loss on sale of plant and equipment 18 132
Amortisation of goodwill 778 311
Increase in work-in-progress (1,486) (3,653)
Decrease (increase) in properties held for resale 563 (34)
Decrease (increase) in debtors 2,872 (761)
Decrease in creditors (190) (30)
__________ __________
Net cash inflow from operating activities 7,209 1,730
__________ __________
5 Analysis and reconciliation of net debt
Disposed Other
1 April with non-cash 31 March
2002 Cash flow Subsidiaries Changes 2003
Audited Unaudited Unaudited Unaudited Unaudited
#'000 #'000 #'000 #'000 #'000
Debt due after (133,136) 1,919 53,213 (78,004)
one year
Debt due within (16,998) 4,642 4,227 (8,129)
one year
Finance leases (4) 14 (16) (6)
__________
6,575
__________
Overdrafts (1,415) 1,073 (342)
Cash at hand 1,298 (436) 862
and in bank __________
637
__________ __________ __________ __________ __________
Net debt (150,255) 7,212 57,440 (16) (85,619)
__________ __________ __________ __________ __________
2003 2002
Unaudited Audited
#'000 #'000
Increase (decrease) in cash in the year 637 (5,236)
Cash outflow from decrease in debt and 6,575 23
lease financing
__________ __________
Change in net debt arising from cash flows 7,212 (5,213)
New hire purchase obligations (16) -
Loans and finance leases disposed with
(acquired with) subsidiaries 57,440 (1,501)
__________ __________
Movement in net debt in the year 64,636 (6,714)
At 1 April 2002 (150,255) (143,541)
__________ __________
At 31 March 2003 (85,619) (150,255)
__________ __________
The ordinary shares issued in the year, with a nominal and market value of
#680,000, represented consideration for reducing the ground rent on a long
leasehold investment property and therefore was a major non-cash transaction.
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END
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