TIDMWSP
RNS Number : 5101H
Wynnstay Properties PLC
15 November 2018
WYNNSTAY PROPERTIES PLC
INTERIM RESULTS FOR THE SIX MONTHSED 29TH SEPTEMBER 2018
CHAIRMAN'S STATEMENT
Wynnstay has enjoyed an excellent half year and I am delighted
to be able report on the financial results and recent significant
transactions for the period ending 29th September 2018.
The financial results may be summarised as follows:
2018 2017
GBP GBP
Property Income -4.3% 1,068,000 1,116,000
Operating Income -2.7% 757,000 778,000
Income before Taxation -18.9% 588,000 725,000
Earnings per share -18.0% 17.6p 21.4p
Net Asset value per share +11.0% 760p 685p
Interim Dividend per share +8.0% 7.0p 6.5p
Property Income for the half-year fell slightly over the same
period last year to GBP1,068,000 (2017 - GBP1,116,000) and
Operating Income at GBP757,000 (2017 - GBP778,000) was also
slightly lower than in the prior year. Both figures reflect the
income foregone following the sales of our three small retail
premises last year together with the loss of income following the
decision of our tenant at Basingstoke to vacate the premises in
April and the decision of our tenant at Lewes, Carpetright, to
enter into a Creditors Voluntary Arrangement and to cease trading
at the location.
Operating Income, as reported above, and Pre-tax Profit of
GBP588,000 (2017 - GBP725,000) are also both lower when compared to
the same period last year as there have been no disposals from the
portfolio in the period, whereas in the same period last year our
results reflected profits from property disposals. The figures for
the first-half this year do not, of course, reflect the planned or
anticipated disposals mentioned below that will or may be completed
subsequently.
Since the Annual Report was published in mid-June, we have
announced two significant transactions. In late July, we announced
the exchange of contracts for the acquisition of a freehold
multi-let trade counter estate comprising six units in Petersfield
at a total gross cost of GBP4.1 million and, in late August, the
grant to our new tenant of an option to purchase our Basingstoke
property for GBP1.85 million.
The Petersfield acquisition was completed in early August. This
estate is fully let, generating current net rental income of just
over GBP203,500 per annum. At the time that we announced the
acquisition, I expressed the hope that further opportunities to
build on our presence in Petersfield would arise. This hope has now
been realised since, shortly after our acquisition was announced,
we became aware that an adjacent cleared site with planning consent
for three units comprising 13,500 square feet was available for
purchase. I am pleased to say that we have negotiated the purchase
of this site for a gross cost of GBP756,000 and the transaction
completed at the end of September.
We are in the course of preparing a planning application for a
revised scheme for four units which we hope to submit before the
end of the year. We have serious interest from prospective tenants
for two of the proposed units and will be marketing the other two
units once these agreements are signed and planning permission has
been obtained. Assuming planning permission is obtained in the
spring then we would hope to complete construction by the end of
2019.
The two acquisitions at Petersfield have been funded from a
combination of existing cash resources and debt facilities. As
noted in the interim financial accounts, our borrowings from
Handelsbanken now stand at GBP13.5 million (2017 - GBP10.24
million).
At Basingstoke, the tenant to whom we have let two units with
the option, but not the obligation, to acquire all three units, has
been undertaking the various studies and preparation of reports
that are necessary for their planning application and we have been
informed that it hopes to submit the application by the end of the
year. As previously stated, there is no certainty that planning
permission will be obtained or that, if it is obtained, the tenant
will exercise the option to purchase. I hope that there will be
more news by the end of the financial year and, if so, it will be
included in any Trading Update issued at that time.
As regards the small vacant site adjacent to the Beaver
Industrial Estate at Liphook, as noted in the AGM Trading Update in
July, the planning application for two additional units providing
around 5,500 square feet has been submitted, with a decision
expected shortly. It is also worth mentioning that, following the
completion of the adjacent commercial development at Liphook by
East Hants District Council, the Council have significantly
improved the access from the main road to our estate. This,
together, with new signage, has considerably improved the approach
to, and the visibility of, our estate, which has been well received
by our tenants.
In other significant developments in the portfolio, I am pleased
to report that we have secured a new tenant for the unit vacated by
Carpetright. The new tenant has an established business that has
been operating from premises in Lewes that are to be redeveloped
and thus had to relocate within the town. It has taken a new ten
year lease, with a break option and upward only rent review after
five years, at a market rent which is similar to that being paid by
the previous tenant.
As announced in the AGM Trading Update, the residential
developer exercised the option to purchase our four units at St
Neots and we expect completion to take place just prior to
Christmas when we will receive the consideration of GBP950,000. In
addition, we have agreed terms for the sale of the remaining small
unit to the existing tenant and we expect to exchange contracts
early in the new year.
As also reported in the AGM Trading Update, we successfully
applied for a variation of our planning permission at Aylesford in
order to be able to carry out the development in stages. However,
further investigatory work confirmed that there were issues with
the ground conditions which meant that the likely construction
costs were not only higher but could not be determined with
sufficient certainty. As a consequence, the project's financial
viability was impacted and, in the light of the other developments
mentioned above which are forecast to deliver higher returns, we
have decided not to proceed with this project for the time
being.
At the time of writing, the portfolio is 99% let and we have
collected all of the rental income due.
In the light of the financial results, I am pleased to say that
the Board has decided to pay an increased interim dividend of 7.0p
per share (2017 - 6.5p) on 21st December 2018 to those Shareholders
on the register on 23rd November 2018. Any future increases will,
of course, depend on our financial results and our assessment of
future prospects in the light of economic conditions.
Despite the uncertainties arising from the Brexit negotiations,
our future relationship with the EU and many tensions affecting
world trade, the underlying data for the UK economy remains
encouraging. Our recent acquisitions have increased the quality of
our portfolio and the range of our tenants, both of which will be
enhanced further when the development projects described above are
completed.
In September, we heard from a number of shareholders about a
further wave of unsolicited telephone calls from callers, often
with American accents and using business names somewhat similar to
established businesses, about their investments including mention
of Wynnstay. Such calls typically come from fraudsters and I would
urge caution in responding to them. Wynnstay's website
(www.wynnstayproperties.co.uk) includes a warning and a link to
other information about unsolicited calls on the Financial Conduct
Authority's website.
Next year's Annual General Meeting will be held at 150
Aldersgate Street, London EC1A 4AB on Tuesday 16th July 2019 at
11.30 a.m. As this year, refreshments will be offered prior to the
meeting. Please note the date in your diaries now and try to make
arrangements to attend the meeting. While we are pleased that a
high proportion of our shareholders take the trouble to vote at our
meetings through proxies, we welcome the opportunity to meet with
and talk to our shareholders.
Finally, on behalf of the Board, I wish all our shareholders a
very Happy Christmas and send our best wishes for the New Year.
Philip G.H. Collins
Chairman
15th November 2018
1. STATEMENT OF COMPREHENSIVE INCOME
Unaudited Audited
Six months ended Year ended
29th September 29th September 25th March
2018 2017 2018
GBP'000 GBP'000 GBP'000
Property Income 1,068 1,116 2,182
Property Costs (50) (88) (148)
Administrative Costs (261) (250) (520)
--------------- --------------- -----------
757 778 1,514
Movement in fair value of:
Investment Properties - - 1,631
Profit on Sale of Investment Property - 132 210
--------------- --------------- -----------
Operating Income 757 909 3,355
Investment Income 2 - 1
Finance Costs (171) (185) (365)
--------------- --------------- -----------
Income before Taxation 588 725 2,991
Taxation (111) (143) (359)
--------------- --------------- -----------
Income after Taxation 477 581 2,632
--------------- --------------- -----------
The company has no other items of comprehensive income
2. STATEMENT OF FINANCIAL POSITION
Unaudited Audited
29th September 29th September 25th March
2018 2017 2018
GBP'000 GBP'000 GBP'000
Non Current Assets
Investment Properties 33,593 28,765 28,770
Investments 3 3 3
---------------- ---------------- --------------
33,596 28,768 28,773
Current Assets
Assets held for Sale 1,300 - 1,300
Accounts Receivable 194 355 808
Cash and Cash Equivalents 871 1,202 1,434
---------------- ---------------- --------------
2,365 1,557 2,242
Current Liabilities
Accounts Payable (1,174) (971) (1,075)
Income Taxes Payable (322) (338) (211)
---------------- ---------------- --------------
(1,496) (1,309) (1,286)
Net Current Assets 869 248 2,256
Total Assets Less Current Liabilities 34,467 29,016 31,029
Non-Current Liabilities
Bank Loans Payable (13,500) (10,240) (10,240)
Deferred Tax Payable (346) (208) (346)
---------------- ---------------- --------------
(13,846) (10,448) (10,586)
Net Assets 20,622 18,568 20,443
================ ================ ==============
Capital and Reserves
Share Capital 789 789 789
Treasury Shares (1,570) (1,570) (1,570)
Share Premium Account 1,135 1,135 1,135
Capital Redemption Reserve 205 205 205
Retained Earnings 20,062 18,010 19,884
--------------- ----------- -------------
20,622 18,568 20,443
=============== =========== =============
3. STATEMENT OF CASHFLOW
Audited
Unaudited
Six months ended Year ended
29th September 29th September 25th March
2018 2017 2018
GBP'000 GBP'000 GBP'000
Cashflow from operating activities
Income before taxation 588 725 2,991
Adjusted for:
Increase in fair value of investment
properties - - (1,631)
Interest income (2) - (1)
Interest expense 171 185 365
Profit on disposal of investment
properties - (210)
Changes in:
Trade and other receivables 613 100 (353)
Trade and other payables 99 (68) 36
--------------- -------------------- ----------------
Cash generated from operations 1,468 942 1,197
=============== ==================== ================
Income taxes paid - (294)
Interest paid (172) (188) (365)
Net cash from operating activities 1,296 754 538
=============== ==================== ================
Cashflow from investing activities
Interest and other income received 2 - 1
Purchase of investment properties (4,823) - (98)
Sale of investment properties - 750 1,473
Net cash from investing activities (4,821) 750 1,376
=============== ==================== ================
Cashflow from financing activities
Dividends paid (298) (278) (454)
Drawdown on bank loans 3,260 - -
Repayment of bank loans - (1,100) (1,100)
--------------- -------------------- ----------------
Net cash from financing activities 2,962 (1,378) (1,554)
=============== ==================== ================
Net (decrease)/ increase in
cash and cash equivalents (563) 127 359
Cash and cash equivalents at
beginning of period 1,434 1,075 1,075
Cash and cash equivalents at
end of period 871 1,202 1,434
=============== ==================== ================
4. STATEMENT OF CHANGES IN EQUITY
UNAUDITED SIX MONTHSED 29TH SEPTEMBER 2018
Capital
Redemption Share Premium Treasury Retained
Share Capital Reserve Account Shares Earnings Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
Balance at 26 March
2018 789 205 1,135 (1,570) 19,884 20,443
Total comprehensive
income for the period - - - - 477 477
Dividends - - - - (298) (298)
-------------- ------------ -------------- ------------ ---------- --------
Balance at 29 September
2018 789 205 1,135 (1,570) 20,063 20,622
============== ============ ============== ============ ========== ========
UNAUDITED SIX MONTHSED 29TH SEPTEMBER 2017
Capital
Redemption Share Premium Treasury Retained
Share Capital Reserve Account Shares Earnings Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
Balance at 26 March
2017 789 205 1,135 (1,570) 17,706 18,265
Total comprehensive
income for the period - - - - 581 581
Dividends - - - - (278) (278)
-------------- ------------ -------------- ------------ ---------- --------
Balance at 29 September
2017 789 205 1,135 (1,570) 18,009 18,568
============== ============ ============== ============ ========== ========
AUDITED YEARED 25TH MARCH 2018
Capital
Redemption Share Premium Treasury Retained
Share Capital Reserve Account Shares Earnings Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
Balance at 26 March
2017 789 205 1,135 (1,570) 17,706 18,265
Total comprehensive
income for the year - - - - 2,632 2,632
Dividends - - - - (454) (454)
-------------- ------------ -------------- ------------ ---------- --------
Balance at 25 March
2018 789 205 1,135 (1,570) 19,884 20,443
============== ============ ============== ============ ========== ========
5. ACCOUNTING POLICIES
Wynnstay Properties PLC is a public limited company incorporated
and domiciled in England and Wales. The principal activity of the
company is property investment, development and management. The
Company's ordinary shares are traded on the Alternative Investment
Market.
Basis of Preparation
These unaudited condensed interim financial statements have been
prepared in accordance with International Financial Reporting
Standard (IFRS) IAS 34 Interim Financial Reporting. They do not
constitute statutory accounts within the meaning of section 435 of
the Companies Act 2006.
The unaudited condensed interim financial statements should be
read in conjunction with the financial statements of the Company as
at and for the year ended 25th March 2018 which were prepared in
accordance with IFRS as adopted by the European Union and those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS, and have been reported on by the Company's auditors.
The financial information for the interim periods ended 25th
September 2018 and 25th September 2017 has not been audited and the
auditors have not reported on or reviewed these interim financial
statements. The information for the year ended 25th March 2018 has
been extracted from the latest published audited financial
statements.
Key Sources of Estimation Uncertainty
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that may affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expenses.
Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that
period. The key sources of estimation uncertainty that have a
significant risk of causing material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are those relating to the fair value of investment properties.
Investment Properties
All the Company's investment properties are revalued annually
and stated at fair value at 25th March. The aggregate of any
resulting surpluses or deficits are recognised through the
statement of comprehensive income.
Depreciation
In accordance with IAS 40, freehold and leasehold investment
properties are included at the reporting date at fair value, and
are not depreciated. Leasehold improvements are amortised over the
period of the underlying lease.
Depreciation of other plant and equipment is on a straight line
basis calculated at annual rates estimated to write off each asset
over its useful life of 5 years.
Disposal of Investments
The gains and losses on the disposal of investment properties
and other investments are included in the statement of
comprehensive income in the year of disposal.
Property Income
Property income represents the value of accrued charges under
operating leases for rental of the Company's properties. Revenue is
measured at the fair value of the consideration received. All
income is derived in the United Kingdom.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax. Current tax is the expected tax payable on the
taxable income for the year based on the tax rate enacted or
substantially enacted at the reporting date, and any adjustment to
tax payable in respect of prior years. Taxable profit differs from
income before tax as reported in the income statement because it
excludes items of income or expense that are deductible in other
years, and it further excludes items that are never taxable or
deductible.
Deferred taxation is the tax expected to be payable or
recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding
tax bases used in the computation of taxable profits, and is
accounted for using the financial position liability method.
Deferred tax liabilities are recognised for all taxable temporary
differences (including unrealised gains on revaluation of
investment properties) and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be
utilised.
Deferred tax is calculated at the rates that are expected to
apply in the period when the liability is settled, or the asset is
realised. Deferred tax is charged or credited in the statement of
comprehensive income, including deferred tax on the revaluation of
the asset.
Investments
Quoted investments are recognised as held at fair value, and are
measured at subsequent reporting dates at fair value, which is
either at the bid price, or the latest traded price, depending on
the convention of the exchange on which the investment is quoted.
Changes in fair value are recognised in profit or loss.
Trade and other accounts receivable
Trade and other receivables are initially measured at fair value
as reduced by appropriate allowances for estimated irrecoverable
amounts. All receivables do not carry any interest and are short
term in nature.
Cash and cash equivalents
Cash comprises cash at bank and on demand deposits. Cash
equivalents are short term (less than three months from inception),
repayable on demand and which are subject to an insignificant risk
of change in value.
Trade and other accounts payable
Trade and other payables are initially measured at fair value.
All trade and other accounts payable are not interest bearing.
Comparative information
The information for the year ended 25 March 2018 has been
extracted from the latest published audited financial
statements.
Pensions
Pension contribution towards employees' pension plans are
charged to the statement of comprehensive income as incurred. The
pension scheme is a defined pension contribution scheme.
Financial Instruments
Derivative financial instruments are initially measured at fair
value at the contract date entered into, and subsequently measured
to their fair value at each reporting date. Embedded derivatives
are recognised separately on the statement of financial position,
when not closely related to the host contract. Changes in the fair
value of derivative financial instruments are recognised in profit
or loss.
6. DIVIDENDS
Payment Per share Amount absorbed
Period Date (pence) GBP'000
6 months to 29th September 2018 21st Dec 2018 7.00 190
6 months to 29th September 2017 17th Dec 2017 6.50 176
22nd July
Year ended 25th March 2018 2018 11.00 298
7. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing income after
taxation attributable to Ordinary Shareholders of GBP477,000 (2017:
GBP581,000) by the weighted average number of 2,711,617 ordinary
shares in issue during the period (2017: 2,711,617). There are no
instruments in issue that would have the effect of diluting
earnings per share.
For further information please contact:
Wynnstay Properties Plc
Toby Parker, Finance Director
020 7554 8766
Panmure Gordon (UK) Limited
Andrew Potts
020 7886 2500
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LELFFVFFEFBK
(END) Dow Jones Newswires
November 15, 2018 08:04 ET (13:04 GMT)
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