TIDMWNER
RNS Number : 3532S
Warner Estate Holdings PLC
29 November 2012
Warner Estate Holdings PLC
Warner Estate Holdings PLC ("Warner Estate" or "Group"), the
property investment and management company has today announced its
results for the half year ended 30 September 2012.
Performance Summary
-- Revenue GBP11.3million (September 2011: GBP13.9million).
-- Total loss before income tax GBP15.5million (September 2011: GBP15.1million loss).
-- September quarter day cash collection remains at or above 98% within 28 days.
Key Business Events
-- Consensual appointment of joint fixed charge receivers in
Warner Estate Investments Limited and Warner Estate Development
(Folkestone) Limited, to dispose of certain secured property assets
to maxmise the return to the lender.
-- Disposal of 50% equity interest in Agora Shopping Centres
Limited, completing the divestment programme of the Group's
property investment joint ventures.
Date: 29 November 2012
For further information contact:
Warner Estate Holdings PLC
Philip Warner, Chairman
Mark Keogh, Group Managing Director
Robert Game, Group Managing
Director, Property
Tel: 020 7907 5100
Web: www.warnerestate.co.uk
Chairman's Statement
The Group's primary focus continues to be negotiations with its
three lenders; Barclays Bank PLC ("Barclays"), Lloyds Banking Group
("Lloyds") and an affiliate of The Royal Bank of Scotland ("the RBS
Affiliate") (in which a Blackstone fund has a minority interest and
which is advised by Blackstone Real Estate Debt Advisors ("BREDA"))
(together the "Lenders"). As previously announced during these
negotiations the Group remains reliant on the continuing support of
the Lenders and the outcome of the negotiations will determine the
Group's future. Further detail on these negotiations is given
below.
As previously reported the Board believes that there is little
or no value to existing shareholders, whatever the outcome of the
negotiations with the Lenders.
Financing Negotiations and Going Concern
In anticipation of the maturity of the Group's facilities on 31
December 2012 and the inability of the Group to meet repayment
obligations at that date, the Group's negotiations with its Lenders
continue and there remains uncertainty as to what will happen after
that date.
From the Group's perspective, the ultimate aim of these
negotiations is to dispose of the investment property business and,
subject to addressing any remaining security charges, continue
thereafter as an asset management business, initially based on the
existing asset management contracts for the Ashtenne Industrial
Fund ("AIF") and the Apia Regional Offices Fund ("Apia").
As previously announced on 17 August 2012, the directors of two
of the Group subsidiaries, Warner Estate Investments Limited
("WEI")and Warner Estate Development (Folkestone) Limited ("WDF"),
consensually agreed with the RBS Affiliate to appoint fixed charge
receivers over certain secured real estate assets of those two
companies as the preferred option to maximise the return to the
lender. The Group continues negotiations with the RBS Affiliate in
relation to the remaining assets over which it has security. The
Group agreed with Barclays and Lloyds last year to market and
dispose of secured properties in order to repay some of the
outstanding debt by 31 December 2012. If the disposals are
completed by 31 December 2012 then it is expected that any
outstanding debt, exit fees and accrued interest will be treated in
a way that will allow the relevant subsidiary companies to be put
into members' voluntary liquidation on a solvent basis. If the
disposals are not completed by 31 December 2012 then the Group will
be reliant on reaching an alternative agreement with the relevant
lender.
The fixed charge receivers of WEI and WDF are responsible for
the day to day management of certain property assets and the
disposal plans and intentions for the remaining property assets of
these subsidiaries. Having relinquished control, the Directors have
concluded that the assets and liabilities of these companies should
be derecognised, in accordance with IAS 27, and the results for the
period classified on the income statement as discontinued
operations. The Directors have also concluded that certain other
assets and liabilities of the Group's property investment business,
used as security for the Lenders, are classified as a disposal
group held for sale, in accordance with IFRS 5, and that the
results for the period are classified as discontinued
operations.
As previously announced on 17 August 2012, the Group completed
the divestment of its joint venture property investments with the
disposal of its 50% equity interest in Agora Shopping Centres
Limited for GBP1 to 24 Bruton Place Limited. The investment has
been held at GBPNil on the Company's balance sheet for a number of
years.
Although the Group has net liabilities, mainly due to unrealised
valuation movements, the Board is satisfied that, following a
review of appropriately stress tested cash flow forecasts for both
the property investment and asset management business, subject to
the satisfactory outcome of negotiations with the Lenders and the
continued support of the Lenders and certain other creditors, the
Group will be able to meet its liabilities as and when they fall
due for the foreseeable future. These cash flow forecasts are based
on a number of assumptions and at certain points over the coming
months and beyond, the level of cash held by the business will be
low and headroom will be marginal. The key business risks and
material uncertainties are set out in Note 1 to the financial
statements. The forecasts include the payment by instalments of the
outstanding REIT conversion charge liability, which totalled
GBP0.6million as at September 2012, due to HMRC in relation to the
investment property business. The first instalment of
GBP0.15million, as agreed with HMRC, was paid in October 2012. The
remaining instalments will be settled over the next nine months.
The forecasts exclude any payment in relation to the provision in
the balance sheet for onerous contracts of GBP3.2million as
detailed in Note 13 to the interim financial statements. The
portfolio of onerous contracts was assigned to the Group in 2005
and, given the inability of the relevant entities within the Group
to meet those liabilities, the original assignor has in practice
reassumed the liability for the remaining contracts and has not
sought to pursue any Group entity.
Having taken all the above matters into account, together with
the key business risks and material uncertainties set out in Note 1
to the financial statements and the status of the ongoing
negotiations with the Lenders, the Directors have concluded that,
whilst material uncertainties regarding the Group's future exist,
which may cast significant doubt over the ability of the Group to
continue as a going concern, it remains appropriate to prepare the
financial statements on a going concern basis. Accordingly, the
consolidated financial statements do not include the adjustments
that would result from a failure to remain a going concern.
Results Overview
Total Revenue has fallen from GBP13.9million to GBP11.3million.
This is largely due to a GBP2.1million fall in total rental income
to GBP5.7million. The asset management income has remained broadly
consistent with the prior half year at GBP3.9million, although this
includes a GBP0.4million non-recurring transition fee in relation
to the Agora Shopping Centres Limited management contract. Overall
the Group made a post tax loss of GBP15.5million (September 2011:
GBP15.1million loss), mainly due to fair value adjustments on
investment properties and investments as well as realised losses on
the disposal of investment properties.
The net finance expense for the period has reduced to
GBP5.5million (September 2011: GBP9.2million) primarily driven by
the part repayment of bank loans in the period. Group net debt has
been reduced to GBP80.7million (March 2012: GBP229.4million) as a
result of the disposal of investment properties and derecognising
debt, although a financial guarantee contract of GBP48.9million has
been provided for as per note 15. The net cash outflow for the year
was GBP1.8million primarily arising from interest paid in the
period.
The Board has considered the likely future headroom under the
remaining financial covenants and concluded that, based on best
current estimates and the Group's income and positive cash
generation, the Group will have adequate headroom for the
foreseeable future.
There will be no payment of an interim dividend (2011: nil).
Asset Management Review
The decline in total assets under management to just over
GBP660million since March 2012 has arisen through a combination of
the appointment of fixed charged receivers over certain assets held
at GBP54.3million, sales of GBP58.8million and adverse valuation
movements of GBP7.1million. The wholly owned investment properties
held for sale, GBP41.5million as at 30 September 2012, are not
included in assets under management.
As at 30 September Annualised
2012 Gross
Number Number Capital Rental
of Properties of Units Value Income
--------------------- --------------- ---------- --------- -----------
GBPm GBPm
Ashtenne Industrial
Fund 317 3,657 510.88 46.80
Apia Regional
Office Fund 11 149 94.60 8.24
Space Northwest 23 433 57.72 4.76
--------------------- --------------- ---------- --------- -----------
Total 351 4,239 663.20 59.80
--------------------- --------------- ---------- --------- -----------
The recent refinancing of AIF has provided a stable basis for
the continuation of the Group's intensive asset management of the
Fund. In challenging occupational markets, the Ashtenne asset
management business has completed a total of 586 new lettings or
lease renewals across the UK, securing c.GBP6.5millon of annual
income. Sales amounted to GBP19.4million across 14 transactions, on
average 14% ahead of December 2011 valuations.
Set against the backdrop of weak overall take up in the regional
office market in 2012, the Group's continued asset management of
Apia has, during the last six months, secured income of
GBP1.67million (114,100 sq ft), through a mixture of new lettings
and renewals. There have been several significant asset management
initiatives. In Brighton, the comprehensive Grade A refurbishment
of One Gloucester Place (37,700 sq ft) led to the letting of 21,500
sq ft within three months of practical completion at GBP20.00 per
sq ft, the largest letting in Brighton for 18 months; in Leeds, the
tired 1960s office building, Yorkshire House, was transformed,
retaining law firm, Lupton Fawcett LLP, in 30,000 sq ft; and, in
the face of surplus Government space being available elsewhere, the
Crown Prosecution Service was retained at Sunlight House,
Manchester in 37,700 sq ft.
Within the Space Northwest business, a joint venture partnership
between AIF and the Home and Communities Agency, the asset
management team has successfully delivered GBP5.92million of sales
from five transactions. Since April 2012, an additional
GBP0.75million of rental income has been secured from 39 letting
transactions (181,000 sq ft). Ongoing asset refurbishment and
remodelling projects to the partnership's two dominant assets, when
completed, are expected to enhance their market profile with a view
to attracting new and retaining existing occupiers.
Board Changes
The Board has reviewed its own structure in the light of the
considerable changes to the Group's strategy and outlook. Mr J R
Avery and Mr K A Holman have given notice that they will resign
with effect from 31 December 2012. Their counsel and expertise have
been great assets to the Board and I thank them for their
contribution to our deliberations.
Outlook
Following the completion of the divestment of the Group's
property assets and satisfactory arrangements being reached with
the Lenders along the lines described above, the Group's objective
is to continue as an asset management business. Initially this
would be based on the existing asset management contracts for the
Ashtenne Industrial Fund and Apia Regional Offices Fund. Addressing
the security over the asset management business is fundamental and
the continuing viability of the asset management business is
dependent on the timing and quantum of management fee income and
the implementation of further cost savings.
Philip Warner
Chairman
UNAUDITED INTERIM CONSOLIDATED INCOME STATEMENT
For the six months ended 30 September 2012
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
Notes 2012 2011 2012
--------------------------------------- -------- -------------- -------------- ----------
Revenue - continuing operations 4.2 4.3 8.8
Revenue - discontinued operations 7.1 9.6 20.7
--------------------------------------- -------- -------------- -------------- ----------
Revenue - total 11.3 13.9 29.5
Continuing operations GBPm GBPm GBPm
Rental and similar income 0.3 0.2 0.5
Property management expenses - - (0.2)
--------------------------------------- -------- -------------- -------------- ----------
Net rental income 0.3 0.2 0.3
-------------- -------------- ----------
Revenue from asset management
activities 3.9 4.1 8.3
Asset management expenses (3.5) (3.5) (7.0)
--------------------------------------- -------- -------------- -------------- ----------
Net income from asset management
activities 0.4 0.6 1.3
-------------- -------------- ----------
Other operating expenses (0.2) (0.7) (0.6)
--------------------------------------- -------- -------------- -------------- ----------
Operating profit before net
movements on investments 3 0.5 0.1 1.0
-------------- -------------- ----------
Impairment of goodwill 8 (0.2) (0.4) (2.0)
Net loss from fair value adjustment
on investments 10 (4.7) (1.9) (4.2)
Operating loss (4.4) (2.2) (5.2)
-------------- -------------- ----------
Finance income 4 0.2 0.5 1.1
--------------------------------------- -------- -------------- -------------- ----------
Loss before income tax (4.2) (1.7) (4.1)
-------------- -------------- ----------
Taxation - current 6 - - (0.1)
Loss for the period from continuing
operations (4.2) (1.7) (4.2)
-------------- -------------- ----------
Discontinued operations
Rental and similar income 5.4 7.6 16.8
Property management expenses (2.2) (1.7) (5.1)
Service charge and similar
income 1.7 2.0 3.9
Service charge expense and
similar charges (2.1) (2.4) (4.8)
-------------- -------------- ----------
Net rental income 2.8 5.5 10.8
-------------- -------------- ----------
Other operating expenses (0.1) (0.1) (0.1)
Operating profit before net
movements on investments 3 2.7 5.4 10.7
-------------- -------------- ----------
Net loss from fair value adjustments
on investment properties 9 (7.1) (6.4) (21.0)
Loss on sale of investment
properties (1.4) (1.4) (3.9)
Operating loss (5.8) (2.4) (14.2)
-------------- -------------- ----------
Finance expense 5 (5.7) (9.7) (22.4)
Change in fair value of derivative
financial instruments 0.2 (1.3) 2.1
Loss for the period from discontinued
operations (11.3) (13.4) (34.5)
-------------- -------------- ----------
Total loss for the period
from continuing and discontinued
operations attributable to
owners of the parent (15.5) (15.1) (38.7)
--------------------------------------- -------- -------------- -------------- ----------
P p p
Loss per share - continuing
operations 7 (7.63) (3.18) (7.68)
Loss per share - discontinued
operations 7 (20.51) (24.34) (62.52)
------------------------------- -------- -------- --------
Loss per share - total 7 (28.14) (27.52) (70.20)
------------------------------- -------- -------- --------
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the six months ended 30 September 2012
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2012 2011 2012
------------------------------------ -------------- -------------- ----------
GBPm GBPm GBPm
Loss for the period (15.5) (15.1) (38.7)
Other comprehensive income
Actuarial losses on retirement
benefit obligations - (0.2) (0.2)
Deferred tax arising on retirement
benefit obligations - - (0.1)
Total comprehensive income for
the period attributable to owners
of the parent (15.5) (15.3) (39.0)
------------------------------------ -------------- -------------- ----------
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
Unaudited Unaudited Audited
At At At
30 September 30 September 31 March
Notes 2012 2011 2012
------------------------------------- ------ ----------------------------- -------------- ----------
GBPm GBPm GBPm
ASSETS
Non-current assets
Goodwill 8 0.6 2.4 0.8
Investment properties 9 - 183.8 70.9
Plant and equipment 0.1 0.1 0.1
Investments in funds 10 29.1 36.1 33.8
Investments in unlisted shares 11 0.3 0.3 0.3
Deferred income tax assets 12 0.1 0.2 0.1
Trade and other receivables - 3.8 3.6
------------------------------------- ------ ----------------------------- -------------- ----------
30.2 226.7 109.6
------------------------------------- ------ ----------------------------- -------------- ----------
Current assets
Trade and other receivables 4.1 5.6 5.1
Cash and cash equivalents 13 1.8 6.2 9.8
------------------------------------- ------ ----------------------------- -------------- ----------
5.9 11.8 14.9
------------------------------------- ------ ----------------------------- -------------- ----------
Investment properties classified
as held for sale 9 - - 90.8
------------------------------------- ------ ----------------------------- -------------- ----------
Assets of disposal group classified
as held for sale 2 48.8 - -
------------------------------------- ------ ----------------------------- -------------- ----------
Total assets 84.9 238.5 215.3
------------------------------------- ------ ----------------------------- -------------- ----------
LIABILITIES
Non-current liabilities
Borrowings, including finance
leases 13 - (231.7) (3.8)
Trade and other payables - (11.1) (1.5)
Derivative financial liabilities - (3.9) (0.5)
Retirement benefit obligations (0.4) (0.7) (0.6)
Provisions for other liabilities
and charges 14 (2.4) (2.7) (2.4)
------------------------------------- ------ ----------------------------- -------------- ----------
(2.8) (250.1) (8.8)
------------------------------------- ------ ----------------------------- -------------- ----------
Current liabilities
Borrowings, including finance
leases 13 - (1.0) (229.1)
Trade and other payables (5.4) (12.3) (26.6)
Current income tax liabilities (0.1) - (0.1)
Provisions for other liabilities
and charges 14 (0.8) (1.5) (0.9)
Financial guarantee contract 15 (48.9) - -
(55.2) (14.8) (256.7)
------------------------------------- ------ ----------------------------- -------------- ----------
Liabilities of disposal group
classified as held for sale 2 (92.6) - -
------------------------------------- ------ ----------------------------- -------------- ----------
Total liabilities (150.6) (264.9) (265.5)
------------------------------------- ------ ----------------------------- -------------- ----------
Net liabilities (65.7) (26.4) (50.2)
------------------------------------- ------ ----------------------------- -------------- ----------
EQUITY
Capital and reserves attributable
to the owners of the Parent
Company
Share capital 2.8 2.8 2.8
Other reserves (67.9) (28.5) (52.4)
Investment in own shares (0.6) (0.7) (0.6)
------------------------------------- ------ ----------------------------- -------------- ----------
Total deficit (65.7) (26.4) (50.2)
------------------------------------- ------ ----------------------------- -------------- ----------
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
For the six months ended 30 September 2012
Share Investment
Share Share Based Revaluation Other Treasury Retained Warrant in own
Capital Premium Payments Reserve Reserve Shares Earnings reserve shares Total
--------------- --------- --------- --------- ------------- --------- --------- ---------- --------- ----------- -------
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 31 March
2011
(audited) 2.8 40.7 1.0 (188.7) 8.0 (1.5) 126.5 0.8 (0.8) (11.2)
Loss for the
period - - - - - - (15.1) - (15.1)
Other
comprehensive
expense - - - - - - (0.2) - - (0.2)
Movement on
revaluation - - - (4.2) - - 4.2 - - -
--------------- --------- --------- --------- ------------- --------- --------- ---------- --------- ----------- -------
Transactions
with owners:
Disposal of
investment
in own shares - - - - - - - 0.1 0.1
Transfer - - - - - 1.5 (1.5) - - -
--------------- --------- --------- --------- ------------- --------- --------- ---------- --------- ----------- -------
At 30
September
2011
(unaudited) 2.8 40.7 1.0 (192.9) 8.0 - 113.9 0.8 (0.7) (26.4)
--------------- --------- --------- --------- ------------- --------- --------- ---------- --------- ----------- -------
Loss for the
period - - - - - - (23.6) - - (23.6)
Other
comprehensive
expense - - - - - - (0.1) - - (0.1)
Movement on
revaluation - - - (62.5) - - 62.5 - - -
--------------- --------- --------- --------- ------------- --------- --------- ---------- --------- ----------- -------
Transactions
with owners:
Disposal of
investment
in own shares - - - - - - - - 0.1 0.1
Cost of share
based
payments - - (0.5) - - - 0.3 - - (0.2)
At 31 March
2012
(audited) 2.8 40.7 0.5 (255.4) 8.0 - 153.0 0.8 (0.6) (50.2)
--------------- --------- --------- --------- ------------- --------- --------- ---------- --------- ----------- -------
Loss for the
period - - - - - - (15.5) - - (15.5)
Movement on
revaluation - - - 145.2 - - (145.2) - - -
--------------- --------- --------- --------- ------------- --------- --------- ---------- --------- ----------- -------
At 30
September
2012
(unaudited) 2.8 40.7 0.5 (110.2) 8.0 - (7.7) 0.8 (0.6) (65.7)
--------------- --------- --------- --------- ------------- --------- --------- ---------- --------- ----------- -------
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 September 2012
Unaudited Unaudited
6 month period 6 month period Audited
to to year to
30 September 30 September 31 March
Note 2012 2011 2012
----------------------------------------- ----- ---------------- ---------------- ----------
GBPm GBPm GBPm
Cash flows from continuing operating
activities
Cash generated from operations 16 - (1.3) -
Net cash outflow from continuing -
operating activities - (1.3)
----------------------------------------- ----- ---------------- ---------------- ----------
Cash flows from discontinued operating
activities
Cash generated from operations 16 2.0 5.4 10.2
Interest paid (3.2) (4.4) (8.4)
----------------------------------------- ----- ---------------- ---------------- ----------
Net cash (outflow) / inflow from
discontinued operating activities (1.2) 1.0 1.8
----------------------------------------- ----- ---------------- ---------------- ----------
Total net cash flows from operating
activities (1.2) (0.3) 1.8
----------------------------------------- ----- ---------------- ---------------- ----------
Cash flows from continuing investing
activities
Distributions received from funds 0.2 0.7 1.3
----------------------------------------- ----- ---------------- ---------------- ----------
Net cash inflow from continuing
investing activities 0.2 0.7 1.3
----------------------------------------- ----- ---------------- ---------------- ----------
Cash flows from discontinued investing
activities
Purchase of investment properties
and related capital expenditure - (0.4) (0.4)
Net proceeds on sale of investment
properties 56.7 21.0 25.5
----------------------------------------- ----- ---------------- ---------------- ----------
Net cash inflow from discontinued
investing activities 56.7 20.6 25.1
----------------------------------------- ----- ---------------- ---------------- ----------
Total net cash flows from investing
activities 56.9 21.3 26.4
----------------------------------------- ----- ---------------- ---------------- ----------
Cash flows from discontinued financing
activities
Repayment of bank loans (57.5) (21.9) (22.7)
Finance fees paid - (0.1) (2.9)
----------------------------------------- ----- ---------------- ---------------- ----------
Net cash outflow from discontinued
financing activities (57.5) (22.0) (25.6)
----------------------------------------- ----- ---------------- ---------------- ----------
Total net cash flows from financing
activities (57.5) (22.0) (25.6)
----------------------------------------- ----- ---------------- ---------------- ----------
Net increase / (decrease) in cash
and cash equivalents from continuing
operations 0.2 (0.6) 1.3
Net (decrease) / increase in cash
and cash equivalents from discontinued
operations (2.0) (0.4) 1.3
----------------------------------------- ----- ---------------- ---------------- ----------
Total net (decrease) / increase
in cash and cash equivalents (1.8) (1.0) 2.6
----------------------------------------- ----- ---------------- ---------------- ----------
Cash and cash equivalents at beginning
of period 9.8 7.2 7.2
Cash and cash equivalents at end
of period 13 8.0 6.2 9.8
----------------------------------------- ----- ---------------- ---------------- ----------
UNAUDITED NOTES TO THE FINANCIAL STATEMENTS
1. basis of preparation & accounting policies
Basis of preparation
These condensed consolidated interim financial statements for
the six months ended 30 September 2012 have been prepared on a
going concern basis and in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and with IAS
34 'Interim financial reporting' as adopted by the European Union
("EU"), and on the basis of accounting policies set out in the
Group's Annual Report and Accounts for the year ended 31 March
2012.
The condensed consolidated interim financial statements do not
comprise statutory accounts within the meaning of section 434 of
the Companies Act 2006. Statutory accounts for the year ended 31
March 2012 were approved by the Board of Directors on 31 July 2012
and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified and did not contain any
statement under section 498(2) of the Companies Act 2006. The
condensed consolidated interim financial information has been
reviewed, not audited.
The condensed consolidated interim financial statements should
be read in conjunction with the annual financial statements for the
year ended 31 March 2012, which have been prepared in accordance
with IFRSs as adopted by the EU.
There is no material seasonal impact on the Group's financial
performance.
These unaudited condensed interim consolidated financial
statements have been prepared on a going concern basis. In doing
so, the Directors have produced cash flow forecasts which indicate
that the Group will continue to be able to meet its liabilities as
and when they fall due until the facilities mature on 31 December
2012, at which time the borrowings, exit fees and accrued interest
become payable. The Directors have taken into account the following
key business risks and uncertainties in preparing their going
concern assessment:
-- whether there will be a satisfactory outcome to the
negotiations with BREDA, regarding the debt held by the RBS
affiliate, which the Group will be unable to repay upon its
maturity in December 2012;
-- whether a satisfactory agreement can be reached with BREDA to
address the security charge over the Group's asset management
business;
-- whether the Lenders, which currently control the bank
accounts into which net rental income is received, continue to
authorise all the necessary payments in relation to the investment
property business;
-- the ability of the Group to successfully execute the disposal
plans in relation to the secured assets under the Lloyds and
Barclays facilities prior to 31 December 2012 or, if this is not
achieved, reaching an alternative agreement with those lenders;
-- in relation to the asset management business cash flow forecast:
o whether the levels of asset management fee income will be
adversely affected by property valuation movements in the funds
which the Group manages and on which the Group's fees are
based;
o whether the volume of future asset management transactions,
such as lettings and disposals, will impact the timing and quantum
of asset management fee income;
o whether the original party to the onerous leases will take on
all future obligations resulting in no further payments being
required from the Group as has been assumed in the cash flow
forecast;
o whether the actual timing and quantum of asset management
expenditure conforms with the assumed timing and amounts; and
o the ability to execute certain cost saving initiatives, and
the timing of these initiatives;
-- whether the Lenders and certain other creditors will continue to be supportive.
Having taken into account these key business risks and
uncertainties and the ongoing discussions with the Lenders in
relation to potential solutions, the Directors have concluded that,
whilst material uncertainty exists which may cast significant doubt
over the ability of the Group to continue as a going concern,
having identified the asset management business as continuing
operations, it is appropriate to prepare the interim consolidated
financial statements on a going concern basis. Accordingly, the
unaudited condensed interim consolidated financial statements do
not include the adjustments that would result from a failure to
remain a going concern.
Accounting policies
Except as described below, the condensed consolidated interim
financial statements have been prepared on the basis of the
accounting policies, methods of computation, significant
judgements, key assumptions, estimates and presentation as set out
in note 1 of the Group's Annual Report for the year ended 31 March
2012.
-- IFRS 5 'Non-current Assets Held for Sale and Discontinued
Operations' - assets that meet the criteria to be classified as
held for sale to be presented separately in the statement of
financial position and the results of discontinued operations to be
presented separately in the statement of comprehensive income.
-- IAS 39 'Financial Instruments: Recognition and Measurement' -
a financial guarantee contract is a contract that requires the
issuer to make specified payments to reimburse the holder for a
loss it incurs because a specified debtor fails to make payment
when due in accordance with the original or modified terms of a
debt instrument. Such financial liabilities are initially measured
at fair value and subsequently measured at the higher of the amount
determined in accordance with IAS 37 and the amount initially
recognised.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
The following Accounting Standards or Interpretations are not
yet effective and have not been early adopted by the Group:
-- IFRS 9 'Financial Instruments' (effective 1 January 2015)
-- IFRS 10 'Consolidated Financial Statements' (effective 1
January 2014)
-- IFRS 11 'Joint Arrangements' (effective 1 January 2014)
-- IFRS 12 'Disclosure of Interests in Other Entities'
(effective 1 January 2014)
-- IFRS 13 'Fair Value Measurement' (effective 1 January
2014)
-- Amendment to IAS 19 'Employee Benefits' (effective 1 January
2013)
2. Discontinued operations
In anticipation of the maturity of the Group's debt facilities
on 31 December 2012 and the inability of the Group to meet
repayment obligations at that date, the Group's negotiations with
its Lenders continue and there remains uncertainty as to what will
happen after that date.
From the Group's perspective, the ultimate aim of these
negotiations is to dispose of the investment property business and
continue thereafter as an asset management business, initially
based on the asset management contracts for the Ashtenne Industrial
Fund and the Apia Regional Offices Fund.
The Group agreed with Barclays and Lloyds last year to market
and dispose of secured properties in order to repay some of the
outstanding debt by 31 December 2012. In accordance with IFRS 5
'Non-current Assets Held for Sale and Discontinued Operations', the
assets and liabilities, comprehensive income and cash flows of the
companies which own these properties are presented as discontinued
operations.
On the 17 August 2012, it was consensually agreed with the RBS
Affiliate that joint fixed charge receivers were to be appointed
over the assets of Warner Estate Investment Limited and Warner
Estate Development (Folkestone) Limited. The joint fixed charge
receivers are responsible for the day to day running of the
companies, in order to realise value through the disposal of the
assets. This has resulted in a loss of control for the Directors
and in accordance with IAS 27 'Consolidated and Separate Financial
Statements', the assets and liabilities have been derecognised from
the interim consolidated financial statements. The comprehensive
income and cash flows to 17 August 2012 have been presented in
discontinued operations. GBP48.9million has been provided for as a
financial guarantee contract arising from the group cross guarantee
and being the estimated fair value of the residual amount of The
Royal Bank of Scotland loan at 17 August 2012, after deducting the
other assets and liabilities which have been derecognised, which is
considered to be an ongoing liability of the group.
The Group continues negotiations with the RBS Affiliate in
relation to the remaining assets over which it has security. In
line with the group strategy to continue as an asset management
business, the associated assets and liabilities, comprehensive
income and cash flows of the companies that own these properties
are presented as discontinued operations.
On 30 August 2012, at a meeting of the members of Principal
Leasehold Properties Limited, a group company with a number of
onerous leases assigned to it, resolutions were passed to wind up
the company voluntarily and to appoint joint liquidators for this
purpose. This has resulted in a loss of control for the Directors
and in accordance with IAS 27 'Consolidated and Separate Financial
Statements', the assets and liabilities of this company have been
derecognised from the interim consolidated financial statements.
The comprehensive income and cash flows to 30 August 2012 have been
presented in discontinued operations. GBP3.2 million has been
provided for in continuing operations, being the estimate of the
liability of the onerous lease portfolio, which will remain a
liability until settled or discharged.
The post tax profit or loss of discontinued operations has been
disclosed in the interim consolidated income statement, with
comparison against prior periods.
The cash flows of discontinued operations have been presented in
the interim consolidated cash flow statement and note 16.
The following table presents the assets and liabilities of the
various disposal groups within Warner Estate Holdings PLC,
classified as assets and liabilities held for sale in the
consolidated statement of financial position.
Unaudited
At
Note 30 September 2012
------------------------------------------ ----- -------------------
GBPm
Assets of disposal group classified
as held for sale
Investment properties classified as
held for sale 9 41.5
Trade and other receivables 1.1
Cash and cash equivalents 13 6.2
------------------------------------------ ----- -------------------
48.8
------------------------------------------ ----- -------------------
Liabilities of disposal group classified
as held for sale
Borrowings, including finance leases 13 (83.7)
Trade and other payables (8.5)
Derivative financial liabilities (0.4)
(92.6)
------------------------------------------ ----- -------------------
Net liabilities classified as held
for sale (43.8)
------------------------------------------ ----- -------------------
3. segmental reporting
business segments
The business has been divided into Discontinued Property
Investment, Asset Management, Investments in Funds and Unallocated
and Other Continuing Activities.
Discontinued Asset Management Investment Unallocated
Property in Funds and other Total
Investment continuing
activities
-------------------- ------------------------ ----------------------- ----------- ------------ ------------------
GBPm GBPm GBPm GBPm GBPm
Six months to 30
September
2012 (unaudited)
Rental and similar
income 5.4 - - 0.3 5.7
Property management
expenses (2.2) - - - (2.2)
Service charge and
similar
income 1.7 - - - 1.7
Service charge
expense and
similar charges (2.1) - - - (2.1)
-------------------- ------------------------ ----------------------- ----------- ------------ ------------------
Net rental income 2.8 - - 0.3 3.1
Asset management
fee income - 3.9 - - 3.9
Asset management
expenses - (3.5) - - (3.5)
Other operating
expenses (0.1) (0.2) - - (0.3)
Operating profit
before net
gain on
investments 2.7 0.2 - 0.3 3.2
Net loss from fair
value adjustments
on investment
properties (7.1) - - - (7.1)
Net loss from fair
value adjustments
on investments - - (4.7) - (4.7)
Loss on sale of
investment
properties (1.4) - - - (1.4)
Impairment of
goodwill - (0.2) - - (0.2)
-------------------- ------------------------ ----------------------- ----------- ------------ ------------------
Operating (loss) /
profit (5.8) - (4.7) 0.3 (10.2)
Net interest
expense and change
in fair value of
derivative
financial
instruments (5.5) - 0.2 - (5.3)
(Loss) / profit
before income
tax (11.3) - (4.5) 0.3 (15.5)
-------------------- ------------------------ ----------------------- ----------- ------------ ------------------
Taxation - current - - - - -
Taxation - deferred - - - - -
-------------------- ------------------------ ----------------------- ----------- ------------ ------------------
(Loss) / profit for
the period (11.3) - (4.5) 0.3 (15.5)
-------------------- ------------------------ ----------------------- ----------- ------------ ------------------
Total assets 48.8 2.3 29.1 4.4 84.9
Total liabilities excluding
borrowings and finance leases (8.9) (1.3) - (56.4) (66.9)
Borrowing, including finance
leases (83.7) - - (83.7)
-------------------------------- ---------------------- ------ ----- ------- -------
Net (liabilities) / assets (43.8) 1.0 29.1 (52.0) (65.7)
-------------------------------- ---------------------- ------ ----- ------- -------
Discontinued Asset Management Investment Unallocated
Property in Funds and other Total
Investment continuing
activities
-------------------------------------- ------------- ----------------- ----------- ------------ --------
GBPm GBPm GBPm GBPm GBPm
Six months to 30 September
2011 (unaudited)
Rental and similar income 7.6 - - 0.2 7.8
Property management expenses (1.7) - - - (1.7)
Service charge and similar
income 2.0 - - - 2.0
Service charge expense and
similar charges (2.4) - - - (2.4)
-------------------------------------- ------------- ----------------- ----------- ------------ --------
Net rental income 5.5 - - 0.2 5.7
Asset management fee income - 4.1 - - 4.1
Asset management expenses - (3.5) - - (3.5)
Other operating expenses (0.1) (0.7) - - (0.8)
Operating profit / (loss)
before net gain on investments 5.4 (0.1) - 0.2 5.5
Net loss from fair value adjustments
on investment properties (6.4) - - - (6.4)
Net loss from fair value adjustments
on investments - - (1.9) - (1.9)
Loss on sale of investment
properties (1.4) - - - (1.4)
Impairment of goodwill - (0.4) - - (0.4)
-------------------------------------- ------------- ----------------- ----------- ------------ --------
Operating loss (2.4) (0.5) (1.9) 0.2 (4.6)
Net interest expense and change
in fair value of derivative
financial instruments (11.0) - 0.4 0.1 (10.5)
Loss before income tax (13.4) (0.5) (1.5) 0.3 (15.1)
-------------------------------------- ------------- ----------------- ----------- ------------ --------
Taxation - current - - - - -
Taxation - deferred - - - - -
-------------------------------------- ------------- ----------------- ----------- ------------ --------
Loss for the period (13.4) (0.5) (1.5) 0.3 (15.1)
-------------------------------------- ------------- ----------------- ----------- ------------ --------
Total assets 189.9 3.9 36.4 8.3 238.5
Total liabilities excluding
borrowings and finance leases (23.7) (1.2) (0.2) (7.1) (32.2)
Borrowing, including finance
leases (232.7) - - - (232.7)
-------------------------------- -------- ------ ------ ------ --------
Net (liabilities) / assets (66.5) 2.7 36.2 1.2 (26.4)
-------------------------------- -------- ------ ------ ------ --------
Other segment items:
Capital expenditure 0.4 - - - 0.4
-------------------------------- -------- ------ ------ ------ --------
Discontinued Asset Management Investment Unallocated
Property in Funds and other Total
Investment continuing
activities
--------------- ------------------------- ----------------------- ----------- -------------------------- ------------------
GBPm GBPm GBPm GBPm GBPm
Year ended 31
March 2012
Rental and
similar
income 16.8 - - 0.5 17.3
Property
management
expenses (5.1) - - (0.2) (5.3)
Service charge
and similar
income 3.9 - - - 3.9
Service charge
expense and
similar
charges (4.8) - - - (4.8)
--------------- ------------------------- ----------------------- ----------- -------------------------- ------------------
Net rental
income 10.8 - - 0.3 11.1
Asset
management
fee income - 8.3 - - 8.3
Asset
management
expenses - (7.0) - - (7.0)
Other
operating
expenses (0.1) (0.6) - - (0.7)
--------------- ------------------------- ----------------------- ----------- -------------------------- ------------------
Operating
profit before
net
gain on
investments 10.7 0.7 - 0.3 11.7
Net loss from
fair value
adjustments
on investment
properties (21.0) - - - (21.0)
Net loss from
fair value
adjustments
on
investments - - (4.2) - (4.2)
Loss on sale
of investment
properties (3.9) - - - (3.9)
Impairment of
goodwill - (2.0) - - (2.0)
--------------- ------------------------- ----------------------- ----------- -------------------------- ------------------
Operating loss (14.2) (1.3) (4.2) 0.3 (19.4)
Net interest
expense (20.3) - 1.0 0.1 (19.2)
--------------- ------------------------- ----------------------- ----------- -------------------------- ------------------
Loss before
income tax (34.5) (1.3) (3.2) 0.4 (38.6)
--------------- ------------------------- ----------------------- ----------- -------------------------- ------------------
Taxation -
current - (0.1) - - (0.1)
Taxation - - - - - -
deferred
--------------- ------------------------- ----------------------- ----------- -------------------------- ------------------
Loss for the
year (34.5) (1.4) (3.2) 0.4 (38.7)
--------------- ------------------------- ----------------------- ----------- -------------------------- ------------------
Total assets 167.8 2.2 33.9 11.4 215.3
Total
liabilities
excluding
borrowings
and finance
leases (27.4) (0.9) - (4.1) (32.6)
Borrowing,
including
finance
leases (232.9) - (0.2) - (232.9)
--------------- ------------------------- ----------------------- ----------- -------------------------- ------------------
Net
(liabilities)
/ assets (92.5) 1.3 33.7 7.3 (50.2)
--------------- ------------------------- ----------------------- ----------- -------------------------- ------------------
Other segment
items:
Capital
expenditure 0.4 - - - 0.4
--------------- ------------------------- ----------------------- ----------- -------------------------- ------------------
4. finance income
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2012 2011 2012
--------------------------------------------- -------------- -------------- ----------
GBPm GBPm GBPm
Income from investments
Distributions from funds 0.2 0.4 1.0
Other - 0.1 0.1
Other finance income
-------------- -------------- ----------
Expected return on pension scheme
assets 0.2 0.2 0.4
Interest on pension scheme liabilities (0.2) (0.2) (0.4)
-------------- -------------- ----------
- - -
--------------------------------------------- -------------- -------------- ----------
0.2 0.5 1.1
--------------------------------------------- -------------- -------------- ----------
5. Finance expense for discontinued operations
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2012 2011 2012
--------------------------------------- -------------- -------------- ----------
GBPm GBPm GBPm
Interest payable on bank loans
and overdrafts 5.4 7.7 14.7
Accrued exit fees - 0.1 1.2
Termination of derivative financial
instruments - - 2.9
Charges in respect of cost of raising
finance 0.2 1.3 2.8
--------------------------------------- -------------- -------------- ----------
5.6 9.1 21.6
Other interest payable - 0.4 0.5
--------------------------------------- -------------- -------------- ----------
5.6 9.5 22.1
Interest payable under finance
leases 0.1 0.2 0.3
--------------------------------------- -------------- -------------- ----------
5.7 9.7 22.4
--------------------------------------- -------------- -------------- ----------
6. taxation
The taxation charge for the period of GBPnil has been estimated
from the expected taxable profits of the Group's non-REIT
activities after taking account of capital allowances
available.
7. earnings per share
Basic losses per share on continuing operations of 7.63p (six
months to 30 September 2011: losses 3.18p; year to 31 March 2012:
losses 7.68p) are calculated on the loss for the period from
continuing operations of GBP4.2million (six months to 30 September
2011: loss GBP1.7million; year to 31 March 2012: loss
GBP4.2million) and the weighted average of 55,089,902 (six months
to 30 September 2011: 55,054,373; year to 31 March 2012:
55,180,538) shares in issue throughout the period.
Basic losses per share on discontinued operations of 20.51p (six
months to 30 September 2011: losses 24.34p; year to 31 March 2012:
losses 62.52p) are calculated on the loss for the period from
discontinued operations of GBP11.3million (six months to 30
September 2011: loss GBP13.4million; year to 31 March 2012: loss
GBP34.5million) and the weighted average of 55,089,902 (six months
to 30 September 2011: 55,054,373; year to 31 March 2012:
55,180,538) shares in issue throughout the period.
Total basic losses per share of 28.14p (six months to 30
September 2011: losses 27.52p; year to 31 March 2012: losses
70.20p) are calculated on the loss for the period of GBP15.5million
(six months to 30 September 2011: loss GBP15.1million; year to 31
March 2012: loss GBP38.7million) and the weighted average of
55,089,902 (six months to 30 September 2011: 55,054,373; year to 31
March 2012: 55,180,538) shares in issue throughout the period.
Dilution by employee incentive shares and share warrants would
decrease the loss per share, so only the basic loss per share has
been reported.
8. Goodwill
GBPm
------------------------------------------- -------
Cost
At 31 March 2012 (audited) 11.2
Additions -
------------------------------------------- -------
At 30 September 2012 11.2
------------------------------------------- -------
Impairment
At 31 March 2012 (audited) (10.4)
Charge for period (0.2)
------------------------------------------- -------
At 30 September 2012 (10.6)
------------------------------------------- -------
Net book value at 30 September 2012 0.6
------------------------------------------- -------
Net book value at 31 March 2012 (audited) 0.8
------------------------------------------- -------
Goodwill is not amortised but is subject to an half yearly
impairment test. Goodwill of GBP0.6million is derived from the cash
generating unit ("CGU") defined as the asset management business of
Ashtenne Asset Management Limited. The recoverable amount of the
asset management business has been used to assess whether the
goodwill is impaired. The recoverable amount of the CGUs has been
calculated based on the value-in-use calculations. These
calculations use cash flow projections based on financial
projections approved by management covering the period to the
termination of the asset management contract. Year 1 is based on
the budget as approved by management. This is determined by past
experience and management's expectations of the current market
conditions. Cash flows beyond year 1 are based on the assumption of
nil growth in management fee income and no increase or decrease in
associated administrative costs. A discount rate of 2.78% has been
used to calculate the recoverable amount. The impairment arises
from the Group reassessing a number of factors including the
maturity of the contract in 2016 and the potential impact on
management fees of uncertain capital values given that the fees of
this business are based on gross asset values.
9. investment properties
Freehold Leasehold Total Investment
with over Properties
50 years
unexpired
---------------------------------------- --------- ----------- -----------------
GBPm GBPm GBPm
At 1 April 2012 (audited) 94.7 67.0 161.7
Disposals (35.0) (29.3) (64.3)
Assets derecognised on appointment
of joint fixed charge receivers (note
2) (41.9) (6.9) (48.8)
Net loss from fair value adjustments
on investment property (2.1) (5.0) (7.1)
At 30 September 2012 (unaudited) 15.7 25.8 41.5
---------------------------------------- --------- ----------- -----------------
Investment properties have been analysed between non-current and
held for sale as follows:
30 September 31 March
2012 2012
-------------------------------- ------------- ---------
GBPm GBPm
Non-current - 70.9
Investment properties held for
sale 41.5 90.8
41.5 161.7
-------------------------------- ------------- ---------
10. investments in funds
GBPm
As at 31 March 2012 (audited) 33.8
Net loss from fair value adjustments (4.7)
At 30 September 2012 (unaudited) 29.1
-------------------------------------- --------------------------
AIF 11.5
Apia 17.6
-------------------------------------- --------------------------
At 30 September 2012 (unaudited) 29.1
-------------------------------------- --------------------------
Barclays Bank PLC has a combination of a charge and negative
pledge over the investment in AIF, relating to the debt which is
held in Warner Estate Property Limited.
The Royal Bank of Scotland has a charge over the investment in
Apia, relating to the debt which is held in Warner Estate
Investments Limited and which has been derecognised, as per note
2.
11. investments in unlisted shares
Unaudited Unaudited Audited
At At At
30 September 30 September 31 March
2012 2011 2012
---------------------- -------------- -------------- ----------
GBPm GBPm GBPm
Unlisted investments 0.3 0.3 0.3
---------------------- -------------- -------------- ----------
12. deferred taxation
Unaudited Unaudited Audited
At At At
30 September 30 September 31 March
2012 2011 2012
--------------------------------- -------------- -------------- ----------
GBPm GBPm GBPm
Deferred taxation assets
Deferred taxation arising from:
Retirement benefit obligations 0.1 0.2 0.1
--------------------------------- -------------- -------------- ----------
13. borrowings, cash and cash equivalents
Unaudited Unaudited Audited
At At At
30 September 30 September 31 March
2012 2011 2012
------------------------------------------ -------------- -------------- ----------
GBPm GBPm GBPm
Amounts falling due after more
than one year:
Bank loans - 229.2 -
Future finance costs - (1.8) -
------------------------------------------ -------------- -------------- ----------
- 227.4 -
Finance lease obligations - 4.3 3.8
- 231.7 3.8
------------------------------------------ -------------- -------------- ----------
Amounts falling due within one
year:
Bank loans - continuing operations - 1.0 229.4
Bank loans - discontinued operations 80.7
Future finance costs - continuing
operations - - (0.3)
Future finance costs - discontinued
operations (0.1)
80.6 1.0 229.1
Finance lease obligations - discontinued 3.1 - -
operations
------------------------------------------ -------------- -------------- ----------
83.7 1.0 229.1
------------------------------------------ -------------- -------------- ----------
Total borrowings, including finance
leases 83.7 232.7 232.9
Cash and cash equivalents at end
of period - continuing operations 1.8 6.2 9.8
Cash and cash equivalents at end 6.2 - -
of period - discontinued operations
------------------------------------------ -------------- -------------- ----------
Total cash and cash equivalents
at end of period 8.0 6.2 9.8
------------------------------------------ -------------- -------------- ----------
During the period GBP57.5million of bank loans were repaid.
On the 17 August 2012, joint fixed charge receivers were
appointed over the assets of Warner Estate Investment Limited and
Warner Estate Development (Folkestone) Limited. The joint fixed
charge receivers are responsible for the day to day running of the
companies, in order to realise value through the disposal of the
assets. This has resulted in a loss of control for the Directors
and on this basis the assets and liabilities have been
derecognised, in accordance with IAS 27 'Consolidated and Separate
Financial Statements'. The bank debt owed to the Royal Bank of
Scotland at 17 August 2012 has therefore also been derecognised and
GBP48.9million has been provided for as a financial guarantee
contract arising from the group cross guarantee and being the
estimated fair value of the residual amount of debt, after
deducting the other assets and liabilities of the disposal group,
which is considered to be an ongoing liability of the group. The
following table is a reconciliation of the movement in debt for the
period.
Bank loans
------------------------------------- -----------
GBPm
At 31 March 2012 (audited) 229.4
Bank loan derecognised on 17 August
2012 (note 2 & 15) (94.0)
Repayment of bank loans (57.5)
Payment in kind interest rolled
into principal 2.8
At 30 September 2012 (unaudited) 80.7
------------------------------------- -----------
14. provisions for other liabilities and charges
Onerous Performance Total
contracts fees
---------------------------- ----------- ------------ ------
GBPm GBPm GBPm
At 31 March 2012 (audited) 3.2 0.1 3.3
Utilised during the
period - (0.1) (0.1)
At 30 September 2012
(unaudited) 3.2 - 3.2
---------------------------- ----------- ------------ ------
The onerous lease provision is made in relation to onerous
contracts on leasehold properties which are vacant or sublet at a
level which renders the properties loss-making over the remaining
life of the lease. The provision represents the Directors' estimate
of the liability, which will remain a liability until settled or
discharged. Provisions have been analysed between current and
non-current as follows:
Unaudited Unaudited Audited
At At At
30 September 30 September 31 March
2012 2011 2012
------------- -------------- -------------- ----------
GBPm GBPm GBPm
Non-current 2.4 2.7 2.4
Current 0.8 1.5 0.9
3.2 4.2 3.3
------------- -------------- -------------- ----------
15. financial guarantee contract
Financial
guarantee
contract
------------------------------------- -----------
GBPm
At 31 March 2012 -
Bank loan derecognised on 17 August
2012 94.0
Other assets and liabilities of
derecognised companies (45.1)
At 30 September 2012 (unaudited) 48.9
------------------------------------- -----------
In accordance with IAS 39 'Financial Instruments: Recognition
and Measurement', a provision for a financial guarantee contract
was made in the period. This is an estimate of the fair value of
the residual debt in Warner Estate Investments Limited, owed to the
Royal Bank of Scotland, after deducting the property value and
other net assets as at 17 August 2012, of Warner Estate Investment
Limited and Warner Estate Development (Folkestone) Limited. This is
considered to be an ongoing liability of the group.
16. reconciliation of operating profit to net cash flow
The following table presents the reconciliation of operating
profit to net cash flow for continuing operations.
Unaudited Unaudited Audited
At At At
30 September 30 September 31 March
2012 2011 2012
----------------------------------------- -------------- -------------- ----------
GBPm GBPm GBPm
Operating profit before net movements
on investments 0.5 0.1 1.0
Decrease in retirement benefit
obligations (0.2) (0.1) (0.2)
Decrease in trade and other receivables 1.0 0.2 -
Decrease in trade and other payables (1.3) (1.5) (0.8)
----------------------------------------- -------------- -------------- ----------
Cash outflows from operations - (1.3) -
----------------------------------------- -------------- -------------- ----------
The following table presents the reconciliation of operating
profit to net cash flow for discontinued operations.
Unaudited Unaudited Audited
At At At
30 September 30 September 31 March
2012 2011 2012
--------------------------------------- -------------- -------------- ----------
GBPm GBPm GBPm
Operating profit before net movements
on investments 2.7 5.4 10.7
Decrease / (increase) in trade
and other receivables 2.5 (0.7) 0.2
(Decrease) / increase in trade
and other payables (3.2) 0.7 (0.7)
--------------------------------------- -------------- -------------- ----------
Cash inflows from operations 2.0 5.4 10.2
--------------------------------------- -------------- -------------- ----------
17. related party transactions
In accordance with IAS 27 "Consolidated and Separate Financial
Statements," transactions between the company and subsidiaries,
which are related parties, have been eliminated on consolidation
and are not disclosed in this note.
Remuneration of key management personnel:
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 31 March
30 September 30 September 2012
2012 2011
------------------------------ -------------- -------------- ------------
GBPm GBPm GBPm
Short-term employee benefits 0.3 0.4 0.9
Post-employee benefits - - 0.1
0.3 0.4 1.0
------------------------------ -------------- -------------- ------------
Details of transactions between the Group and joint ventures are
as set out below.
There are no outstanding loan balances between the Group and its
joint ventures.
Agora Agora Greater Total
Shopping Max London
Centres Limited Offices
Limited Limited
GBPm GBPm GBPm GBPm
------------------------------ ---------- --------- --------- ------
Amounts receivable by Group
Unaudited 6 months ended
30 September 2012
Asset management fees 0.7 - - 0.7
Unaudited 6 months ended
30 September 2011
Asset management fees 0.4 0.1 0.1 0.6
Audited year ended 31 March
2012
Asset management fees 0.7 0.7 0.1 1.5
------------------------------ ---------- --------- --------- ------
Directors' statement of responsibilities
The Directors confirm that this consolidated interim financial
information has been prepared in accordance with IAS 34 as adopted
by the European Union, and that the Half Yearly Report herein
includes a fair review of the information as required by 4.2.7R and
4.2.8R of the Disclosure and Transparency Rules, namely:
-- An indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- Material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.
The Directors of Warner Estate Holdings PLC are as stated in the
Group's Annual Report for the year ended 31 March 2012.
The Chairman's Statement on pages 2 to 3 refers to important
events which have taken place in the period.
The principal risks and uncertainties facing the business are as
set out on page 9 of the Annual Report and Accounts.
Any material related party transactions which have taken place
in the period are set out in note 17.
By the order of the Board
D J Lanchester
Secretary
29 November 2012
Independent review report to Warner Estate Holdings PLC
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2012 which comprises the consolidated
income statement, the consolidated statement of comprehensive
income, the consolidated statement of financial position, the
consolidated statement of changes in equity, the consolidated cash
flow statement and the related explanatory notes. We have read the
other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with the
terms of our engagement. Our review has been undertaken so that we
might state to the company those matters we are required to state
to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Services Authority.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review
procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2012 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
Emphasis of matter - going concern
In forming our conclusion on the condensed consolidated half
yearly financial statements, which is not modified, we have
considered the disclosures made in Note 1 to the condensed
consolidated half yearly financial statements concerning the
group's ability to continue as a going concern.
These disclosures indicate that there is a material uncertainty
as to whether agreement can be reached with the group's three
lenders in relation to the continuation of various borrowing
facilities. These conditions, along with other matters disclosed in
Note 1, indicate the existence of a material uncertainty which may
cast significant doubt over the group's ability to continue as a
going concern. The condensed consolidated half yearly financial
statements do not include the adjustments that would result if the
group was unable to continue as a going concern.
PKF (UK) LLP
London, UK
29 November 2012
This information is provided by RNS
The company news service from the London Stock Exchange
END
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