TIDMCIC
RNS Number : 7120N
Conygar Investment Company PLC(The)
20 May 2015
20 May 2015
The Conygar Investment Company PLC
Interim Results for the six months ended 31 March 2015
Highlights
-- Net asset value per share increased to 199.2p from 197.5p at
30 September 2014. EPRA NAV per share increased 1.5% to 198.8p from
195.9p.
-- Development pipeline is making good progress and we have
commenced the infrastructure and related works at several sites
which is an important step in attracting interest and realising
value.
-- Completed the construction and opening of a 9 acre, 200 space
truck stop facility at Parc Cybi, Anglesey as part of our Road King
Holyhead joint venture with Mr Fred Done, the co-founder of
Betfred.
-- Reacquired land at Haverfordwest, West Wales for GBP3 million
plus an overage provision. This land was previously sold to
Sainsbury's in 2014.
-- Disposed of three investment properties in the period for a
total consideration of GBP5.8 million, a surplus of GBP0.2 million
over book value. Subsequently, we have disposed of Norfolk House,
Birmingham for a total of GBP12.3 million, a surplus of GBP1.0
million, or 8.8%, over the September 2014 valuation. Vacancy rate
reduced to 11.8% from 18.2% at 30 September 2014.
-- Total cash available for acquisitions in excess of GBP45
million. Net debt of GBP33.6 million representing gearing of 20%
against net asset value and 22% on loan to value basis.
-- Bought back 4.1 million shares (4.7% of ordinary share
capital) at an average price of 182 pence per share, enhancing NAV
per share by 0.8p.
Summary Group Net Assets as at 31 March 2015
Per Share
GBP'm p
Investment Properties 154.4 186.4
Development Projects 45.8 55.3
Cash 45.0 54.3
Other net (liabilities) (2.6) (3.1)
------- ----------
242.6 292.9
Zero dividend preference shares (31.5) (38.0)
Bank loans (net of fees) (46.1) (55.7)
Net assets 165.0 199.2
------- ----------
Robert Ware, Chief Executive, commented:
"We continue to grow net asset value per share and our carefully
managed development projects have the potential to deliver further
significant growth over the next few years. However, we maintain
our disciplined approach to risk management and our balance sheet
remains strong. We anticipate increasing our investment and focus
onto the development projects whilst, at the same time, continuing
to realise value from the investment property portfolio. The
outlook is positive and increasingly so, as the economy continues
to improve."
Enquiries:
The Conygar Investment Company PLC
Robert Ware: 020 7258 8670
Peter Batchelor: 020 7258 8670
Liberum Capital (Nominated Adviser)
Richard Bootle: 020 3100 2222
Temple Bar Advisory (Public Relations)
Alex Child-Villiers: 07795 425 580
The Conygar Investment Company PLC
Interim Results
for the six months ended 31 March 2015
Chairman's and Chief Executive's Statement
Progress and Results Summary
We are pleased to present the Group's results for the six months
ended 31 March 2015. The net asset value per share increased to
199.2p from 197.5p at 30 September 2014 (180.8p at 31 March 2014).
On an EPRA basis, net asset value per share increased to 198.8p
from 195.9p at 30 September 2014 (179.2p at 31 March 2014).
The profit before taxation of GBP4.1 million compares with a
profit before taxation of GBP7.5 million in the six months ended 31
March 2014. The valuation of the investment properties increased by
GBP1.2 million on a like for like basis in the six months ended 31
March 2015, compared with a GBP4.8 million uplift for the six
months ended 31 March 2014, and this is the main reason for the
decrease in profit over the period. Net property income for the
period was GBP5.0 million, before financing and overheads, compared
with GBP5.7 million for the same period last year, reflecting asset
sales.
The development pipeline is making good progress and we are
pleased to have commenced the infrastructure and related works at
several sites which is an important step in attracting interest and
realising value.
The Group disposed of three investment properties in the period,
one at Maidenhead and two units at Mochdre Commerce Park, Colwyn
Bay, Wales, for a total consideration of GBP5.8 million, a surplus
of GBP0.2 million over book value. Subsequent to the balance sheet
date, we have disposed of Norfolk House, Birmingham for a total of
GBP12.3 million, a surplus of GBP1.0 million, or 8.8%, over the
September 2014 valuation. This disposal, along with that of
Geoffrey House, Maidenhead, has resulted in the overall portfolio
vacancy rate falling to 11.8% from 18.2% at 30 September 2014.
On the financing side, the Group has used GBP7.4 million surplus
cash to buy back 4.7% of its shares at a discount to net asset
value. Although we continue to increase investment in the
development programme, the balance sheet remains strong and we have
GBP45 million cash available for further investment and development
funding. Our total debt is GBP78.6 million resulting in net gearing
of 20.3%.
On a sadder note, we announce the departure of our Property
Director, Steven Vaughan who is leaving us to pursue other
projects. As one of our founding directors and shareholders, Steven
has been instrumental in getting the Company to where it is today
and we express our gratitude for his immense contribution and wish
him all the very best for the future. We have an established
property team which will continue the good work.
Property Portfolio
As at 31 March 2015, the Group's investment properties were
independently valued at GBP154.4 million compared to GBP158.3
million at 30 September 2014. The fall in the valuation is due to
the disposals in the period and the portfolio held at 31 March 2015
has increased in value by a net GBP1.2 million on a like for like
basis.
The contracted annual rent roll is GBP11.8 million as at 31
March 2015, which is GBP0.4 million lower than at 30 September
2014, mainly owing to the disposals already discussed. We continue
to work hard at letting vacant space, retaining tenants and pushing
down irrecoverable property costs and so the cash yield on the
portfolio remains strong. As mentioned previously, the portfolio
vacancy rate is 11.8% following the disposal of Norfolk House,
Birmingham. We will continue to recycle assets and realise value
where opportunities arise.
We are also making progress with various refurbishment and
redevelopment opportunities at several of our investment
properties. At the Ashby Gateway site at Ashby Park, Ashby de la
Zouch, terms are agreed with a food store operator for a pre-let of
a new store and with a leisure operator for the sale of a site for
a new pub/diner. Planning applications for both are to be submitted
shortly. A planning application for the site infrastructure is with
the Council awaiting determination. At Network House,
Wolverhampton, outline planning permission has been obtained for a
redevelopment of the existing building to provide a three-storey
retail and leisure development. At Mochdre Industrial Park in North
Wales, we have completed the refurbishment of the buildings,
satisfactorily addressed all the outstanding planning issues and
are in detailed discussions for a letting of a substantial part of
the available space. We have also realised GBP1 million from the
sale of two of the smaller units. Finally, we have decided to
undertake a major refurbishment of the 30,000 square foot Brennan
House, Farnborough which will cost approximately GBP2.5
million.
Development Projects
We continue to make good progress on our development projects
since we last reported.
Following Sainsbury's decision not to develop their 60,000
square foot store at Haverfordwest, West Wales, which we had sold
to them for GBP13.75 million in 2014, we have acquired their
interest for GBP3 million plus an overage provision. We will now
develop the 9.6 acre site for a retail/leisure commercial
development. Work is now well underway with the infrastructure and
highways works to service the 729 residential units and the 9.6
acre retail site and this should be completed by December 2015.
Good progress is being made with our partners, Stena Line, at
Fishguard Waterfront on the detailed planning and the marine
consent licences to bring about the development platform, marina
basin, and new port facilities. The various planning applications
should be submitted before the end of the calendar year.
In February 2015, we obtained detailed planning permission for
the construction of a 6 acre, 24 hour lorry stop on part of the
land we own in Fishguard, West Wales. Discussions continue with
both hauliers and the port operator and we will now proceed to
install the infrastructure to bring it forward for development.
In April 2015, we completed the construction of a 9 acre, 200
space truck stop facility at Parc Cybi, Anglesey as part of our
GBP6 million joint venture with Road King, a company controlled by
Mr Fred Done, the co-founder of Betfred. The facility opened for
business on 7 May 2015 and should now act as a catalyst for further
development at this site, aside from being a profitable venture in
its own right.
Infrastructure work will soon begin at Holyhead Waterfront to
bring the site forward for development on the land unaffected by
the Village Green application. We continue to await the outcome of
the Village Green application which was submitted fourteen months
ago and relates to part of our site. We are also awaiting further
news regarding the potential replacement Nuclear Power Station at
Wylfa, a project which would greatly benefit the development of our
site and the island.
At Pembroke Dock Waterfront, having re-engineered the original
design to reduce costs and facilitate a faster construction
process, we are now applying for the necessary statutory marine
licences for the marina construction. We are also finalising the
design to reflect positive retailer interest and we hope to enter
into agreements to lease as soon as possible.
As Conwy County Council's preferred developer at Llandudno
Junction, we have now submitted a planning application for up to
90,000 square feet of A1 retail use on the Council owned site and
are hopeful of a decision before the end of the year.
Our total expenditure to date on development projects amounts to
GBP45.8 million, having spent a further GBP8.8 million since 30
September 2014. We continue to carry the development projects in
our books at cost and they will be revalued, once the projects are
at a sufficiently advanced stage to produce a meaningful valuation.
We continue to seek suitable pre-lets or forward sales prior to
commencing any significant development though we will undertake
infrastructure and other preparatory works where they add to the
value and/or marketability of the respective site.
Financing and Cash Management
At 31 March 2015, the Group had cash of GBP45 million available
to pursue investment opportunities. The Group has bank debt of
GBP47.1 million with total debt of GBP78.6 million, including the
zero dividend preference liability of GBP31.5 million. Total
gearing is 20.3% against net asset value and 21.7% on a loan to
value basis. This is a comfortable level of gearing and combined
with our cash, the Group is able to pursue additional investment
opportunities and to fund our development commitments.
All of the Group debt is hedged or fixed and the weighted
average cost of all debt, including margin is 4.6% with an average
debt maturity of 2.7 years.
During the period, the Group acquired 4,072,350 ordinary shares,
representing 4.7% of its ordinary share capital, at an average
price of 182 pence per share. This cost approximately GBP7.4
million and, as a result of the buy backs, net asset value per
share has been enhanced by 0.8 pence per share.
Summary Group Net Assets
The Group net assets as at 31 March 2015 may be summarised as
follows:
Per Share
GBP'm P
Investment Properties 154.4 186.4
Development Projects 45.8 55.3
Cash 45.0 54.3
Other net (liabilities) (2.6) (3.1)
------- ----------
242.6 292.9
Zero dividend preference shares (31.5) (38.0)
Bank loans (net of fees) (46.1) (55.7)
Net assets 165.0 199.2
------- ----------
Outlook
We continue to grow net asset value per share and our carefully
managed development projects have the potential to deliver further
significant growth over the next few years. However, we maintain
our disciplined approach to risk management and our balance sheet
remains strong. We anticipate increasing our investment and focus
onto the development projects whilst, at the same time, continuing
to realise value from the investment property portfolio.
The outlook is positive and increasingly so, as the economy
continues to improve.
N J Hamway R T E Ware
Chairman Chief Executive
19 May 2015
Financial review
Net Asset Value
The net asset value at the period end was GBP165.0 million (31
March 2014: GBP160.8 million; 30 September 2014: GBP169.4 million).
The primary movements in the period were GBP7.4 million used to buy
back shares, GBP5.0 million net rental income, GBP1.2 million
property revaluation surplus, GBP2.3 million spent on finance costs
and GBP1.5 million of dividends paid. Excluding the amounts
incurred paying dividends and buying back shares, net asset value
increased by 2.6% in the period.
On an EPRA basis, the net asset value is:
31 Mar 30 31
2015 Sept Mar
2014 2014
GBP'm GBP'm GBP'm
Net asset value 165.0 169.4 160.8
Exercisable share
options 6.8 8.1 1.7
Diluted net asset
value 171.8 177.5 162.5
Fair value of hedging
instruments (0.1) (0.4) (0.6)
------- ------- -------
EPRA net asset
value 171.7 177.1 161.9
======= ======= =======
EPRA NAV per share 198.8p 195.9p 179.2p
======= ======= =======
Basic NAV per share 199.2p 197.5p 180.8p
======= ======= =======
Diluted NAV per
share 198.9p 196.3p 179.8p
======= ======= =======
The EPRA net asset value is calculated on a fully diluted basis
and excludes the impact of hedging instruments, as these are held
for long term benefit and not expected to crystallise at the
balance sheet date.
The NNNAV or "triple net asset value" is the net asset value
taking into account asset revaluations, the mark to market costs of
debt and hedging instruments and any associated tax effect. Our
investment properties are carried on our balance sheet at
independent valuation and there is no associated tax liability. Our
development and trading assets are carried at the lower of cost and
net realisable value. We have not sought to value these assets as,
in our opinion, they are still at too early a stage in their
development to provide a meaningful figure, so cost is equated to
fair value for these purposes. On this basis, there is no material
difference between our stated net asset value and NNNAV.
Revaluation
The Group's investment properties were independently valued by
Jones Lang LaSalle at 31 March 2015. In their opinion, the open
market value of the investment property portfolio was GBP154.4
million. The total portfolio decreased in value by GBP3.9 million
during the period due to three disposals, but the underlying
portfolio increased in value on a like for like basis by GBP1.2
million.
Cash Flow
The Group used GBP13.8 million cash from operating activities
(31 March 2014: generated GBP0.6 million; 30 September 2014:
generated GBP12.0 million), of which GBP7.9 million was incurred as
expenditure on development and trading properties.
The Group used GBP8.7 million repaying RBS and Barclays debt and
GBP7.4 million on buying back shares. The Group generated cash
inflows of GBP5.7m from the sales of investment properties and
GBP1.3 million from issue of shares. These movements result in an
overall cash outflow of GBP25.7 million (31 March 2014: GBP32.3
million inflow; 30 September 2014: GBP39.1 million inflow).
Net Income From Property Activities
31 Mar 30 31
2015 Sept Mar
2014 2014
GBP'm GBP'm GBP'm
Rental income 6.1 13.1 7.4
Direct property costs (1.2) (2.9) (1.6)
------- ------- ------
Rental surplus 4.9 10.2 5.8
------- ------- ------
Sale of investment properties 5.8 25.7 9.5
Cost of investment properties
sold (5.6) (24.1) (8.9)
------- ------- ------
Gain on sale of investment
properties 0.2 1.6 0.6
------- ------- ------
Total net income arising
from property activities 5.1 11.8 6.4
======= ======= ======
Administrative Expenses
The administrative expenses for the six month period ended 31
March 2015 were GBP(0.2) million. In the year ended 30 September
2014, 20% of the 2014 profit share had been deferred at the
discretion of the remuneration committee. After due consideration,
the remuneration committee decided that the deferred amount will
not be paid and therefore administrative expenses have been
credited by GBP1.75 million. If this credit is ignored,
administrative expenses amount to GBP1.6 million and the major
items were salary costs (GBP0.9 million) and various costs arising
as a result of the Group being quoted on AIM.
Financing
At 31 March 2015, the Group had cash of GBP45.0 million (31
March 2014: GBP63.9 million; 30 September 2014: GBP70.8 million).
The decrease has resulted mainly from the cash used in buying back
shares, repaying bank debt, administrative costs and investing in
the developments projects.
The bank debt at 31 March 2015 was GBP47.1 million. Taking into
account the ZDP liability, total debt increases to GBP78.6 million.
The net debt is currently 22% by loan to value and 20% against net
asset value.
The interest rate risk on the facility continues to be managed
by way of interest rate swaps and caps, with 100% of debt protected
by hedging. The weighted average cost of all debt, including
margin, is 4.6%. The fair value of these derivative financial
instruments is provided for in full on the balance sheet.
Property Information
Summary of Investment property portfolio
31 March 30 September 31 March
2015 2014 2014
Valuation GBP154,430,000 GBP158,340,000 GBP161,170,000
Number of properties 42 43 43
Contracted rent (pa) GBP11,842,000 GBP12,182,000 GBP13,319,000
Current ERV (pa) GBP14,278,000 GBP14,914,000 GBP15,578,000
Net initial yield 7.25% 6.51% 7.11%
Equivalent yield 8.16% 8.33% 8.66%
Reversionary yield 8.46% 8.74% 9.07%
Vacancy rate 14.3% 18.2% 17.8%
Average unexpired lease 4.3 years 4.4 years 4.1 years
lengths
Summary of Development Projects
31 March 30 September 31 March
2015 2014 2014
GBPm GBPm GBPm
Haverfordwest 24.17 17.21 15.42
Holyhead Waterfront 9.52 9.47 9.65
Pembroke Dock Waterfront 4.65 4.51 4.44
Fishguard Waterfront 1.26 1.02 0.94
King's Lynn 0.85 0.83 0.83
Fishguard Lorry Stop 0.54 0.52 0.52
Parc Cybi, Holyhead 4.34 3.00 0.79
Other 0.43 0.39 0.34
--------- ------------- ---------
Total investment to date 45.76 36.95 32.93
========= ============= =========
The Conygar Investment Company PLC
Consolidated Statement of Comprehensive Income
For the six months ended 31 March 2015
Note Six months ended Year ended
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Rental income 5,908 7,275 12,838
Other property income 209 20 214
Sale of trading investments 160 56 14,374
--------- --------- -----------
Revenue 6,277 7,351 27,426
--------- --------- -----------
Direct costs of:
Rental income 1,192 1,618 2,921
Sale of trading investments 60 - 2,812
Direct Costs 1,252 1,618 5,733
--------- --------- -----------
Gross Profit 5,025 5,733 21,693
Share of results of
joint ventures (2) (6) 45
Gain on sale of investment
properties 157 568 1,624
Movement on revaluation
of investment properties 6 1,217 4,783 14,044
Other gains and losses (262) 151 (32)
Administrative expenses 153 (1,341) (12,328)
--------- --------- -----------
Operating Profit 6,288 9,888 25,046
Finance costs 3 (2,332) (2,521) (4,793)
Finance income 3 142 88 257
--------- --------- -----------
Profit Before Taxation 4,098 7,455 20,510
Taxation (992) (571) 239
--------- --------- -----------
Profit and Total Comprehensive
Income for the Period 3,106 6,884 20,749
========= ========= ===========
Attributable to:
- equity shareholders 3,106 6,884 20,749
- minority interests - - -
--------- --------- -----------
3,106 6,884 20,749
========= ========= ===========
Basic earnings per share 5 3.70p 7.75p 23.53p
Diluted earnings per
share 5 3.69p 7.72p 23.43p
All of the activities of the Group are classed as
continuing.
The Conygar Investment Company PLC
Consolidated Statement of Changes in Equity
For the six months ended 31 March 2015
Share Share Capital Treasury Retained Total Non-controlling Total
Capital Premium Redemption Shares Earnings Interests Equity
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October
2013 4,925 124,017 1,568 (10,173) 34,768 155,105 20 155,125
Profit
for the
period - - - - 6,884 6,884 - 6,884
--------- --------- ------------ --------- ---------- -------- ---------------- --------
Total
recognised
income
and expense
for the
period - - - - 6,884 6,884 - 6,884
Dividend
paid - - - - (1,332) (1,332) - (1,332)
Issue
of share
capital 7 111 - - - 118 - 118
At 31
March
2014 4,932 124,128 1,568 (10,173) 40,320 160,775 20 160,795
At 1 October
2013 4,925 124,017 1,568 (10,173) 34,768 155,105 20 155,125
Profit
for the
year - - - - 20,749 20,749 - 20,749
--------- --------- ------------ --------- ---------- -------- ---------------- --------
Total
comprehensive
income
for the
year - - - - 20,749 20,749 - 20,749
Dividend
paid - - - - (1,332) (1,332) - (1,332)
Purchase
of own
shares - - - (5,211) - (5,211) - (5,211)
Issue
of share
capital 7 111 - - - 118 - 118
At 30
September
2014 4,932 124,128 1,568 (15,384) 54,185 169,429 20 169,449
========= ========= ============ ========= ========== ======== ================ ========
Changes
in equity
for six
months
ended
31 March
2015
At 1 October
2014 4,932 124,128 1,568 (15,384) 54,185 169,429 20 169,449
Profit
for the
period - - - - 3,106 3,106 - 3,106
--------- --------- ------------ --------- ---------- -------- ---------------- --------
Total
recognised
income
and expense
for the
period - - - - 3,106 3,106 - 3,106
Dividend
paid - - - - (1,450) (1,450) (1,450)
Purchase
of own
shares - - - (7,423) - (7,423) - (7,423)
Issue
of share
capital 53 1,243 - - - 1,296 - 1,296
At 31
March
2015 4,985 125,371 1,568 (22,807) 55,841 164,958 20 164,978
========= ========= ============ ========= ========== ======== ================ ========
The Conygar Investment Company PLC
Consolidated Balance Sheet
As at 31 March 2015
31 March 31 March 30 Sept
2015 2014 2014
Note GBP'000 GBP'000 GBP'000
Non-Current Assets
Property, plant and
equipment 43 73 62
Investment properties 6 154,430 161,170 158,340
Investment in joint
ventures 7 6,114 5,957 6,087
Loan to joint venture 3,110 355 2,204
Goodwill 3,173 3,173 3,173
166,870 170,728 169,866
--------- --------- ---------
Current Assets
Development and trading
properties 8 33,358 23,449 25,485
Trade and other receivables 4,198 4,223 3,778
Derivatives 96 559 377
Cash and cash equivalents 45,029 63,896 70,753
--------- --------- ---------
82,681 92,127 100,393
--------- --------- ---------
Total Assets 249,551 262,855 270,259
Current Liabilities
Trade and other payables 4,632 4,884 13,832
Bank loans 9 300 742 1,035
Tax liabilities 2,319 2,779 1,797
--------- --------- ---------
7,251 8,405 16,664
--------- --------- ---------
Non-Current Liabilities
Bank loans 9 45,811 63,928 53,525
Zero dividend preference
shares 10 31,511 29,727 30,621
77,322 93,655 84,146
--------- --------- ---------
Total Liabilities 84,573 102,060 100,810
--------- --------- ---------
Net Assets 11 164,978 160,795 169,449
========= ========= =========
Equity
Called up share capital 4,985 4,932 4,932
Share premium account 125,371 124,128 124,128
Capital redemption
reserve 1,568 1,568 1,568
Treasury Shares (22,807) (10,173) (15,384)
Retained earnings 55,841 40,320 54,185
--------- --------- ---------
Equity Attributable
to Equity Holders 164,958 160,775 169,429
Minority interests 20 20 20
Total Equity 164,978 160,795 169,449
========= ========= =========
Net Assets Per Share 199.2p 180.8p 197.5p
The Conygar Investment Company PLC
Consolidated Cash Flow Statement
For the six months ended 31 March 2015
Six months ended Year ended
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Cash Flows From Operating
Activities
Operating profit 6,288 9,888 25,046
Depreciation and amortisation 18 24 47
Amortisation of reverse
lease premium 87 - 188
Share of results of joint
ventures 2 6 (45)
Other gains and losses 280 (14) 45
(Gain) / loss on sale of
investment properties (157) (568) (1,624)
Movement on revaluation
of investment properties (1,217) (4,783) (14,044)
Cash Flows From Operations
Before Changes In Working
Capital 5,301 4,553 9,613
Change in trade and other
receivables (420) (124) 554
Change in land, developments
and trading properties (7,873) (607) (2,405)
Change in trade and other
payables (9,333) (553) 8,242
----------- --------- -----------
Cash (Used In ) / Generated
From Operations (12,325) 3,269 16,004
Finance costs (1,178) (2,169) (3,445)
Finance income 142 88 186
Tax paid (470) (633) (774)
----------- --------- -----------
Cash Flows (Used In) /
Generated From Operating
Activities (13,831) 555 11,971
----------- --------- -----------
Cash Flows From Investing
Activities
Acquisition of and additions
to investment properties (580) (491) (3,524)
Disposal of trading investments 160 - -
Sale proceeds of investment
properties 5,760 9,343 25,429
Investment in joint ventures (38) (92) (1)
Loans to joint venture (906) - (2,204)
Purchase of plant and equipment - (1) (12)
Cash Flows Generated From
Investing Activities 4,396 8,759 19,688
----------- --------- -----------
Cash Flows From Financing
Activities
Bank loan drawdown - 37,195 37,195
Bank loans repaid (8,712) (41,590) (51,944)
Dividend paid (1,450) (1,332) (1,332)
ZDP share issue - 29,332 29,332
Purchase of own shares (7,423) - (5,211)
Issue of shares 1,296 - 118
Re-couponing of interest
rate swaps - - (41)
Purchase of interest rate
cap - (652) (652)
----------- --------- -----------
Cash Flows (Used In) /
Generated From Financing
Activities (16,289) 22,953 7,465
----------- --------- -----------
Net (decrease) / increase
in cash and cash equivalents (25,724) 32,267 39,124
Cash and cash equivalents
at 1 October 70,753 31,629 31,629
----------- --------- -----------
Cash and Cash Equivalents
at 31 March 45,029 63,896 70,753
----------- --------- -----------
The Conygar Investment Company PLC
Notes to the Interim Results
For the six months ended 31 March 2015
1. Basis of Preparation
The accounting policies used in preparing the condensed
financial information are consistent with those of the annual
financial statements for the year ended 30 September 2014 other
than the mandatory adoption of new standards, revisions and
interpretations that are applicable to accounting periods
commencing on or after 1 October 2014, as detailed in the annual
financial statements.
The condensed financial information for the six month period
ended 31 March 2015 and the six month period ended 31 March 2014
has been reviewed but not audited and does not constitute full
financial statements within the meaning of section 435 of the
Companies Act 2006.
The financial information for the year ended 30 September 2014
does not constitute the Group's statutory accounts for that period
but it is derived from those accounts. Statutory accounts for the
year ended 30 September 2014 have been delivered to the Registrar
of Companies. The auditors have reported on these accounts; their
report was unqualified and did not contain statements under section
498(2) or (3) of the Companies Act 2006.
The board of directors approved the above results on 19 May
2015.
Copies of the interim report may be obtained from the Company
Secretary, The Conygar Investment Company PLC, Fourth Floor, 110
Wigmore Street, London, W1U 3RW.
2. Segmental Information
IFRS 8 requires the identification of the Group's operating
segments which are defined as being discrete components of the
Group's operations whose results are regularly reviewed by the
board of directors. The Group divides its business into the
following segments:
-- Investment properties, which are owned or leased by the Group
for long-term income and for capital appreciation, and trading
properties, which are owned or leased with the intention to sell;
and,
-- Development properties, which include sites, developments in
the course of construction and sites available for sale.
The only item of revenue or profit / loss relating to the
development properties is the part disposal in the period and
therefore only the segmented balance sheet is reported.
Balance Sheet
31 March 2015 31 March 2014
Investment Development Other Group Investment Development Other Group
Properties Properties Total Properties Properties Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment
properties 154,430 - - 154,430 161,170 - - 161,170
Investment
in joint
ventures - 9,224 - 9,224 - 6,312 - 6,312
Goodwill - 3,173 - 3,173 - 3,173 - 3,173
Development
& trading
properties - 33,358 - 33,358 - 23,449 - 23,449
------------ ------------ --------- ---------- ------------ ------------ --------- ----------
154,430 45,755 - 200,185 161,170 32,934 - 194,104
Other
assets 36,463 - 12,903 49,366 32,527 - 36,224 68,751
------------ ------------ --------- ---------- ------------ ------------ --------- ----------
Total
assets 190,893 45,755 12,903 249,551 193,697 32,934 36,224 262,855
Liabilities (52,509) - (32,064) (84,573) (68,687) - (33,373) (102,060)
------------ ------------ --------- ---------- ------------ ------------ --------- ----------
Net assets 138,384 45,755 (19,161) 164,978 125,010 32,934 2,851 160,795
============ ============ ========= ========== ============ ============ ========= ==========
3. Finance Income / Costs
Six months ended Year ended
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Finance income
Bank interest 142 88 257
========= ========= ================
Finance costs
Bank loans (1,159) (1,609) (2,687)
Loan repayment costs (19) (12) (54)
Amortisation of arrangement
fees (264) (504) (762)
ZDP interest (823) (366) (1,193)
Amortisation of ZDP costs (67) (30) (97)
(2,332) (2,521) (4,793)
========= ========= ================
4. 4. Dividend
The final dividend of 1.75 pence per ordinary share
in respect of the year ended 30 September 2014 (2013
- 1.5 pence) was approved at the AGM and paid in
February 2015. This final dividend amounted to GBP1,450,000
(2013: GBP1,332,000).
5. Earnings per Share
The calculation of earnings per ordinary share is based on the
profit after tax of GBP3,106,000 (March 2014: GBP6,884,000;
September 2014: GBP20,749,000) and on the number of shares in issue
being the weighted average number of shares in issue during the
period of 84,053,739 (net of 16,882,869 shares purchased by the
Company and held as treasury shares) (March 2014: 88,844,875;
September 2014: 88,174,984). The weighted average number of shares
on a fully diluted basis was 84,157,452 (March 2014: 89,187,326;
September 2014: 88,563,656) and profit after tax of GBP3,106,000
(March 2014: GBP6,884,000; September 2014 profit: GBP20,749,000).
No adjustment has been made for anti-dilutive potential ordinary
shares. The total number of ordinary shares in issue (net of
16,882,869 shares purchased by the Company and held as treasury
shares) at the date of this report was 82,831,254.
6. Investment Properties
Freehold Long-Leasehold Reverse Total
Lease
Premiums
GBP'000 GBP'000 GBP'000 GBP'000
Valuation at 30 September
2014 136,672 20,996 672 158,340
Additions 573 - 7 580
Reverse lease premium amortisation - - (87) (87)
Disposals (5,620) - - (5,620)
Revaluation movement 1,312 (95) - 1,217
--------- --------------- ---------- --------
Valuation at 31 March 2015 132,937 20,901 592 154,430
========= =============== ========== ========
The historical cost of properties held at 31 March 2015 is
GBP183,496,000 (March 2014: GBP208,593,000; September 2014:
GBP192,162,000).
The properties were valued by Jones Lang LaSalle, independent
valuers not connected with the Group, at 31 March 2015 at market
value in accordance with the Practice Statements contained in the
RICS Appraisal and Valuation Standards published by the Royal
Institution of Chartered Surveyors which conform to international
valuation standards.
The Group has pledged GBP101,170,000 (March 2014:
GBP117,665,000; September 2014: GBP106,500,000) of investment
property to secure Royal Bank of Scotland debt facilities and
GBP49,020,000 (March 2014: GBP43,505,000; September 2014:
GBP47,090,000) to secure Barclays debt facilities. Further details
of these facilities are provided in note 9.
The property rental income earned from investment property, all
of which is leased out under operating leases, amounted to
GBP6,117,000 (March 2014: GBP7,295,000; September 2014:
GBP13,052,000).
7. Investment in Joint Ventures
The group has a 50% interest in a joint venture, Conygar Stena
Line Limited, which is a property development company. It also has
a 50% interest in a joint venture, CM Sheffield Limited, which is a
property trading company, and another 50% interest in a joint
venture, Roadking Holyhead Limited, which is a property development
company and truck-stop operator.
The following amounts represent the group's 50% share of the
assets and liabilities, and results of the joint ventures. They are
included in the balance sheet and income statement:
31 March 2015 31 30 Sept
March 2014 2014
GBP'000 GBP'000 GBP'000
Assets
Current assets 9,237 6,327 8,322
--------- --------- -----------
9,237 6,327 8,322
--------- --------- -----------
Liabilities
Current liabilities (13) (15) (31)
--------- --------- -----------
(13) (15) (31)
--------- --------- -----------
Net assets 9,224 6,312 8,291
========= ========= ===========
Six months ended Year ended
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Operating (loss) / profit (2) (6) 45
Finance income - - -
--------- --------- -----------
(Loss) / profit before
tax (2) (6) 45
Tax - - -
--------- --------- -----------
(Loss) / profit after tax (2) (6) 45
========= ========= ===========
8. Property Inventories
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Properties held for resale
or development 33,358 23,449 25,485
========= ========= ========
The above amounts relate to development properties, which
include sites, developments in the course of construction and sites
available for sale.
9. Bank Loans
31 March 2015 31 30 Sept
March 2014 2014
GBP'000 GBP'000 GBP'000
Bank loans 47,051 66,117 55,764
Debt issue costs (940) (1,447) (1,204)
--------- -------- --------
46,111 64,670 54,560
========= ======== ========
The interest rate profile of the Group bank borrowings at 31
March 2015 was as follows:
Interest Maturity 31 Mar 31 Mar 30 Sep
Rate 2015 2014 2014
GBP'000 GBP'000 GBP'000
Royal Bank of
Scotland (TAPP) LIBOR 2 - 5
(1) +3% years 24,171 37,195 27,367
LIBOR
Barclays (2) + 3.5% 1-4 years 13,088 18,830 18,455
Royal Bank of
Scotland (TOPP) LIBOR
(3) + 3.5% 1-4 years 9,792 10,092 9,942
47,051 66,117 55,764
======== ======== ========
(1) As at 31 March 2015, TAPP Property Limited maintained a
facility with the Royal Bank of Scotland PLC of up to GBP37,195,000
(March and September 2014: GBP37,195,000) under which GBP24,171,000
(March 2014: GBP37,195,000 September 2014: GBP27,367,000) had been
drawn down. This facility is repayable on or before 5 February 2018
and is secured by fixed and floating charges over the assets of the
TAPP Property Limited group and the Lamont companies. The facility
is subject to a maximum loan to value covenant of 60%, an interest
cover ratio covenant of 225% maximum and a debt to rent cover ratio
of 8:1.
(2) As at 31 March 2015, Conygar Dundee Limited, Conygar Hanover
Street Limited, Conygar Stafford Limited and Conygar St Helens
Limited jointly maintained a facility with Barclays Bank PLC of up
to GBP13,088,000 (March 2014: GBP18,830,000; September 2014:
GBP18,455,000) of which GBP13,088,000 (March 2014: GBP18,830,000;
September 2014: GBP18,455,000) had been drawn down. This facility
is repayable on or before 20 August 2016 and is secured by fixed
and floating charges over the assets of Conygar Dundee
Limited, Conygar Hanover Street Limited, Conygar Stafford
Limited and Conygar St Helens Limited. The facility is subject to a
maximum loan to value covenant of 55% and an interest cover ratio
covenant of 225%.
(3) As at 31 March 2015, TOPP Property Limited and TOPP
Bletchley Limited maintained a facility with the Royal Bank of
Scotland PLC of up to GBP9,792,000 (March 2014: GBP10,092,000;
September 2014: GBP9,942,000) of which GBP9,792,000 (March 2014:
GBP10,092,000; September 2014: GBP9,942,000) had been drawn down.
This facility is repayable on or before 3 April 2016 and is secured
by fixed and floating charges over the assets of the TOPP Property
Limited group. The facility is subject to a maximum loan to value
covenant of 55%, interest cover ratio covenant of 225% and a debt
to rent cover ratio covenant of 7:1. The facility is subject to
quarterly repayments of GBP75,000.
Three swaps relating to the TAPP Property Limited facility with
the Royal Bank of Scotland PLC with notional amounts of
GBP12,693,000 (March and September 2014: GBP12,693,000),
GBP9,009,622 (March and September 2014: GBP9,009,622) and
GBP15,297,344 (March 2014: GBP15,297,000; September 2014:
GBP14,500,000), the former two both with fixed rates of 1.329%
(March and September 2014: 1.329%) and the latter swap 0.9925%
(March and September 2013: 0.9925%) expired on 17 February 2015. An
interest rate cap was purchased in February 2014 to hedge the loan
from the date of the expiry of the three swaps referred to above
and has a notional amount of GBP37,000,000 (March 2014: GBPnil
September 2014: GBP37,000,000), a strike rate of 2% and a
termination date of 5 February 2018.
An amortising cap was in place relating to the TOPP Property
Limited and TOPP Bletchley Limited facility with the Royal Bank of
Scotland PLC. As at 31 March 2014, the cap had a notional amount of
GBP10,475,000 (31 March 2014: GBP10,775,000; 30 September 2014:
GBP10,600,000) with a strike rate of 0.75% (31 March 2014: 0.75%;
30 September 2014: 0.75%) which expires on 3 April 2016.
A swap and cap were in place relating to the Barclays Bank PLC
facility. The swap has a notional amount of GBP9,087,642 (March
2014: GBP18,430,000; September 2014: GBP14,455,000) with a fixed
rate of 1.055% (March and September 2014: 1.055%). The cap has a
notional amount of GBP4,000,000 (March and September 2014:
GBP4,000,000) with a strike rate of 1%. Both the swap and the cap
expire on 20 August 2016.
At 31 March 2015, the fair value of the hedging instruments was
valued at GBP96,000 (March 2014: GBP559,000; September 2014:
GBP377,000). The valuation of the swaps was provided by JC Rathbone
Associates and represents the change in fair value since
execution.
10. Zero Dividend Preference Shares
The Group issued 30,000,000 zero dividend preference shares
('ZDP Shares') at 100 pence per share and they were listed on the
London Stock Exchange on 10 January 2014. The ZDP shares have an
entitlement to receive a fixed cash amount on 9 January 2019, being
the maturity date, but do not receive any dividends or income
distributions. Additional capital accrues to the ZDP shares on a
daily basis at a rate equivalent to 5.5% per annum, resulting in a
final capital entitlement of 130.7 pence per share.
During the period, the Group has accrued for GBP823,000 (March
2014: GBP366,000; September 2014 GBP1,193,000) of additional
capital. The total amount repayable at maturity is
GBP39,210,000.
The movement on the zero dividend preference share liability
during the period was as follows:
31 March
2015
GBP'000
Balance at 1 October 2014 30,621
Amortisation of share issue costs 67
Accrued capital 823
---------
Balance at 31 March 2015 31,511
=========
11. Net Asset Value per share
Net asset value per share is calculated as the net assets of the
Group divided by the number of shares in issue.
The European Public Real Estate Association ("EPRA") guidelines
provide for a measure of net asset value excluding the effects of
fluctuations in derivative financial instruments, deferred tax and
taking into account the fair value of development properties. EPRA
net asset value per share is calculated as the EPRA net asset value
divided by the number of shares in issue on a fully diluted
basis.
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Diluted net asset value 171,759 162,454 177,500
Adjustments:
Fair value of hedging instruments (96) (559) (377)
EPRA net asset value 171,663 161,895 177,123
=========== =========== ===========
No. No. No.
Shares in issue 86,356,254 90,351,304 90,428,604
=========== =========== ===========
EPRA net asset value per
share 198.9p 179.2p 195.9p
=========== =========== ===========
The above calculations exclude the fair value of
the Group's development properties. We have not sought
to value these assets as, in our opinion, they are
at too early a stage in their development to provide
a meaningful figure.
12. Related Party Transactions
The Group has made advances to the following joint ventures in
order to provide both long term and additional working capital
funding. All amounts are repayable upon demand and will be repaid
from the trading activities of those subsidiaries. No provisions
have been made against the outstanding amounts.
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Joint Ventures
Conygar Stena Line Limited 6,788 6,532 6,709
CM Sheffield 2 2 2
Roadking Holyhead Limited 3,110 355 2,204
--------- --------- --------
9,900 6,889 8,915
========= ========= ========
The loans to Conygar Stena Line Limited may be analysed as
follows:
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Secured interest bearing
loan 3,768 3,512 3,689
Unsecured non-interest
bearing shareholder loan 3,020 3,020 3,020
--------- --------- --------
6,788 6,532 6,709
========= ========= ========
Key Management Compensation
Key management personnel have the authority and responsibility
for planning, directing and controlling the activities of the Group
and are considered to be the directors of the Company. Amounts paid
in respect of key management compensation were as follows:
Six months ended Year ended
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Short term employee benefits (905) 525 8,792
(905) 525 8,792
========= ========= ===========
Independent Review Report to The Conygar Investment Company
PLC
Introduction
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 31 March 2015 which comprises the consolidated
statement of comprehensive income, the consolidated statement of
changes in equity, the consolidated balance sheet, the consolidated
cash flow statement and the related 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 to assist the company in meeting the
requirements of the AIM Rules for Companies issued by the London
Stock Exchange. 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 AIM Rules for Companies issued by the London Stock
Exchange.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRS 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 31
March 2015 is not prepared, in all material aspects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and AIM Rules for Companies issued by the London
Stock Exchange.
Rees Pollock
Chartered Accountants and Registered Auditors
London
19 May 2015
Notes:
(a) The maintenance and integrity of The Conygar Investment
Company PLC website is the responsibility of the directors; the
work carried out by the auditors does not involve consideration of
these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the
interim report since it was initially presented on the website.
(b) Legislation in the United Kingdom governing the presentation
and dissemination of financial information may differ from
legislation in other jurisdictions.
The directors of Conygar accept responsibility for the
information contained in this announcement. To the best knowledge
and belief of the directors of Conygar (who have taken all
reasonable care to ensure that such is the case) the information
contained in this announcement is in accordance with the facts and
does not omit anything likely to affect the import of such
information.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KKLFFEEFBBBK
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