TIDMCIC
RNS Number : 0667Z
Conygar Investment Company PLC(The)
24 May 2016
24 May 2016
The Conygar Investment Company PLC
Interim Results for the six months ended 31 March 2016
Highlights
-- Net asset value per share 201.0p at 31 March 2016 decreased
from 203.3p at 30 September 2015. EPRA NAV per share decreased 1.1%
to 201.0p from 203.2p.
-- The development pipeline is advancing. The Haverfordwest
infrastructure works have completed and we are making significant
progress on the approvals for the other projects.
-- Acquired a 9.96 acre site from Sainsbury's at Cross Hands,
west of Swansea, for GBP2.25 million plus an overage provision, and
the 203 acre freehold of the former gas storage facility site near
Rhosgoch, Anglesey, for GBP3 million.
-- In April 2016, completed the refinancing of the TAPP, TOPP
and Lamont portfolios with a new GBP48.1 million facility with
Lloyds Bank, Jersey, releasing GBP21 million after repayment of the
two existing RBS loans and transaction costs.
-- Total cash available for acquisitions and development funding
of GBP60 million after the refinancing in April 2016. Net debt of
GBP26.1 million as at March 2016, representing gearing of 16.8%
against net asset value and 20.6% on loan to value basis. Post
refinancing, net debt of GBP27.2 million representing gearing of
17.5% against net asset value and 21.4% on loan to value basis.
-- Investment property portfolio valuation of GBP126.7 million
at 31 March 2016. Due to a fall in the value of our asset in
Aberdeen, there is a reduction of GBP2.4 million on a like for like
basis.
-- Disposed of three investment properties in the period for a
total consideration of GBP5.4 million after costs, a deficit of
GBP0.1 million to the September 2015 valuation.
-- Bought back 5.3 million shares (6.4% of ordinary share
capital) at an average price of 167 pence per share, enhancing NAV
per share by 2.5p.
Summary Group Net Assets as at 31 March 2016
Per Share
GBP'm p
Investment Properties 126.7 164.1
Investment Properties Under Construction 9.0 11.6
Development Projects 46.2 59.8
Cash 41.6 53.9
Other Net Liabilities (1.0) (1.3)
------- ----------
222.5 288.1
ZDP Liability (33.4) (43.2)
Bank Loans (33.9) (43.9)
Net Assets 155.2 201.0
------- ----------
Robert Ware, Chief Executive, commented:
"We envisage that the markets we trade in will be volatile over
the summer months, and potentially the rest of this year, due to
the EU referendum, continuing economic problems in the Eurozone and
the US presidential election and we are cautious about the growth
prospects of the UK economy over the medium term.
Historically, we have performed strongly in difficult markets
and following the recent refinancing of a large portion of the
investment property portfolio, we hold cash of more than GBP60
million and are therefore well positioned to take advantage of
opportunities, should they arise."
Enquiries:
The Conygar Investment Company PLC
Robert Ware: 020 7258 8670
Ross McCaskill: 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 2016
Chairman's and Chief Executive's Statement
Progress and Results Summary
We present the Group's results for the six months ended 31 March
2016. The net asset value per share decreased to 201.0p from 203.3p
at 30 September 2015 (199.2p at 31 March 2015). On an EPRA basis,
net asset value per share decreased to 201.0p from 203.2p at 30
September 2015 (198.8p at 31 March 2015).
The loss before taxation of GBP2.1 million compares with a
profit before taxation of GBP4.1 million in the six months ended 31
March 2015. The main reason for this was a fall in valuation of the
investment properties of GBP2.4 million on a like for like basis in
the six months ended 31 March 2016, compared with a GBP1.2 million
uplift for the six months ended 31 March 2015. The fall in
valuation is solely due to our asset in Aberdeen and this market
has been hit hard by the crisis in the oil industry and this is
reflected in the valuation.
The Group also disposed of three investment properties in the
current period and these sales, along with the disposals of nine
assets during the year ended 30 September 2015, have reduced net
property income to GBP3.6 million, before financing and overheads,
compared with GBP5.0 million for the same period last year.
The three disposals in the period were at Hinckley, Horsham and
Runcorn for a consideration of GBP5.4 million after costs, a
deficit of GBP0.1 million to the September 2015 valuation. These
disposals have resulted in a reduction in the contracted rent roll
to GBP9.2 million at 31 March 2016, compared with GBP9.8 million at
30 September 2015.
The development pipeline continues to make good progress and we
have acquired two sites during the period. The first is a 9.96 acre
site which was acquired in October 2015 from Sainsbury's for
GBP2.25 million plus an overage provision and is situated at Cross
Hands, west of Swansea. In April 2016, a planning application was
submitted to Carmarthenshire Council for a 106,000 square foot
retail development, which, along with a 562 space car park, will
include a family pub/restaurant, food stores, a drive-through
restaurant and other retail stores.
We acquired a second site in October 2015 for a consideration of
GBP3 million and this is the freehold of a former gas storage
facility site near Rhosgoch, Anglesey. This 203 acre brownfield
site is situated 6.5 miles from the existing and proposed Wylfa
Nuclear Power Station. Horizon Nuclear Power has identified this
site as a potential location to house approximately 4,000 temporary
workers and discussions are ongoing to make our land available for
this facility.
On the financing side, the Group has used GBP8.9 million surplus
cash to buy back 6.4% of its shares at a discount to net asset
value and this has enhanced net asset value per share by 2.5
pence.
In April 2016, we refinanced part of our investment property
portfolio with a new GBP48.1 million loan with Lloyds Bank, Jersey.
This has released GBP21 million to pursue other opportunities and
the funding rates have been reduced to 1.9% margin plus Bank of
England base rate, thus currently 2.4% per annum.
Although we continue to increase investment in the development
programme, the balance sheet remains strong and we have GBP60
million available after the refinancing for further investment and
development funding. Our total pre-refinancing debt was GBP67.7
million, resulting in net gearing of 16.8% and post refinancing is
GBP89.9 million, resulting in net gearing of 17.5%.
Property Portfolio
As at 31 March 2016, the Group's investment properties were
independently valued at GBP126.7 million compared to GBP133.2
million at 30 September 2015. The fall in valuation is a result of
disposals in the period and a decrease in value on a like for like
basis of GBP2.4 million. As referred to above, this fall on a like
for like basis is due to the difficult Aberdeen market which has
been adversely affected by the volatility in global oil prices. Our
exposure to Aberdeen was significantly greater not very long ago,
but we recognised the risks and disposed of our two other buildings
there in the year ended 30 September 2014 for a consideration of
GBP15.5 million, which was a significant surplus to our book cost
and GBP1.24 million over the previous valuation in September 2013.
Nevertheless, the building we still hold is exposed to the oil
industry and we will continue to mitigate the risks as best we
can.
The contracted annual rent roll is GBP9.2 million as at 31 March
2016, which is GBP0.6 million lower than at 30 September 2015,
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. We continue to recycle assets and realise
value where opportunities arise and when assets are mature and we
cannot add further value through asset management initiatives. The
vacancy rate has increased to 17.0% as at 31 March 2016 from 14.1%
as at September 2015 but it should be noted that the vacancy rate
is skewed by the refurbishment projects which are taking place at
both Brennan House, Farnborough and the Links, Warrington. If these
projects are excluded and the new letting at Mochdre to Conwy
County Council, which is described below, is taken into account,
the vacancy rate reduces to 8.6%. The refurbishments of Farnborough
and Warrington are progressing well and will be completed during
the summer and the total expenditure on these projects is over GBP3
million.
Progress is being made with asset management initiatives across
the portfolio. In May 2016, we announced the letting of 60,000
square feet of industrial space and 3.2 acres of "open storage"
land at Mochdre Commerce Park in Colwyn Bay, North Wales. The new
tenant is Conwy County Council and they have taken a 35 year lease
with a first break clause in year 15, at an initial rent of
GBP240,000 per annum.
Also in May 2016, we announced that a planning application has
been submitted for the development site at Nottingham Road,
Ashby-de-la-Zouch for a Marks and Spencer's "Food Hall" measuring
approximately 11,000 square feet, with associated parking, services
and landscaping. The construction of the spine road and utility
services has been completed and this will enhance the marketability
of the remaining 2 acre plot at this site.
Development Projects
Continued progress has been made on our development projects
since we last reported.
At Haverfordwest, the substantial infrastructure works to
service the 729 residential units and 9.6 acre retail site were
completed on budget at a cost of GBP3.7 million and ahead of
schedule at the beginning of the calendar year. Marketing of the
housing land is being undertaken now that these infrastructure
works have been completed. A new planning application will be
submitted shortly for a 100,000 square foot retail development,
together with a multiplex cinema and hotel on the 9.6 acre retail
site.
In April 2016, we submitted a planning application for our 9.96
acre development site at Cross Hands, South West Wales, for a
106,000 square foot retail development and a 562 space car park. We
are in detailed negotiations with various potential tenants and are
planning to commence construction later this year.
At Fishguard Waterfront, the detailed planning and marine
consent licenses, to bring about the development platforms, marina
basin and new port facilities, were submitted in January 2016. We
hope to have a positive determination of these by the end of the
calendar year.
The Harbour Revision Order and marine license applications for
the Pembroke Dock development are still progressing. The proposed
60,000 square feet of leisure and retail development has attracted
significant interest from potential tenants and we expect to make
further announcements this year.
At Holyhead Waterfront, Ynys Mon council has decided to hold an
inquiry to consider the Village Green application. Whilst we do not
believe that there is any merit in the claim, we will be pushing
for a positive decision which will put the matter beyond any
further doubt. The application only covers a small part of our land
and does not prevent us starting construction on the vast majority
of the site. We are in discussions with parties involved in the
proposed Wylfa Newydd project in respect of providing substantial
residential accommodation and also the use of our marine facilities
at Soldiers Quay and adjoining land.
At Parc Cybi, the truckstop is attracting increased usage month
on month and our restaurant has been voted the second best eatery
in Holyhead. The truckstop is a joint venture with Fred Done, the
founder and owner of Betfred and the construction was completed
last year. At our 6.9 acre logistics centre, which is not part of
the joint venture but is located next to the lorry park, we are at
an advanced stage of negotiations with Horizon Nuclear to provide
facilities to handle all inward road-borne material for the
construction of Wylfa Newydd.
Our 205 acre site at Rhosgoch, which we purchased in October
2015, has been identified by Horizon Nuclear, through public
consultation, as a potential location to house approximately 4,000
temporary workers. We are in discussions with Horizon Nuclear to
make our land available for this facility.
At Llandudno Junction, Conwy Borough Council has approved our
90,000 square foot retail application and in partnership with them,
we are now moving forward to progress the development.
The planning and development progress is always difficult to
predict but we anticipate significant progress on the projects
throughout the year.
Financing and Cash Management
At 31 March 2016, the Group had cash of GBP41.6 million
available to pursue investment opportunities and bank debt of
GBP34.3 million, with total debt of GBP67.7 million, including the
zero dividend preference liability of GBP33.4 million. Net debt
amounted to GBP26.1 million, resulting in gearing of 16.8% against
net asset value and 20.6% on a loan to value basis. After the
recent refinancing in April 2016, total debt increased to GBP89.9
million and net debt to GBP27.2 million, resulting in gearing of
17.5% against net asset value and 21.4% on a loan to value
basis.
As at 31 March 2016, all of the Group debt was hedged or fixed
and the weighted average cost of all debt, including margin was
3.9% with an average debt maturity of 1.1 years. Post refinancing,
the weighted average cost of debt decreased to 2.4% and average
debt maturity increased to 4.3 years.
During the period, the Group acquired 5,299,819 ordinary shares,
representing 6.4% of its ordinary share capital, at an average
price of 167 pence per share. This cost approximately GBP8.9
million and, as a result of the buy backs, net asset value per
share has been enhanced by 2.5 pence per share.
Dividend Policy
As referred to in the Strategic Report within the Report and
Accounts for the year ended 30 September 2015, we have continued
our policy of selling down our investment property portfolio where
appropriate, and, as expected, the rental income we receive has
decreased. We anticipate that the portfolio will become smaller in
the medium term but remain sufficient to fund the operations of the
business.
The funds created by investment property sales will be, in the
main, redeployed within the development portfolio, where we believe
there is substantial inherent future value. This further investment
will be of significant benefit to our ultimate return.
As discussed within this statement, the rental income has
decreased in the six month period ended 31 March 2016. The Board
will review our dividend policy annually and our primary focus
continues to be growth in net asset value per share.
Summary Group Net Assets
The Group net assets as at 31 March 2016 may be summarised as
follows:
Per Share
GBP'm p
Investment Properties 126.7 164.1
Investment Properties Under Construction 9.0 11.6
Development Projects 46.2 59.8
Cash 41.6 53.9
Other Net Liabilities (1.0) (1.3)
------- ----------
222.5 288.1
ZDP Liability (33.4) (43.2)
Bank Loans (33.9) (43.9)
Net Assets 155.2 201.0
------- ----------
Outlook
We envisage that the markets we trade in will be volatile over
the summer months, and potentially the rest of this year, due to
the EU referendum, continuing economic problems in the Eurozone and
the US presidential election and we are cautious about the growth
prospects of the UK economy over the medium term.
Historically, we have performed strongly in difficult markets
and following the recent refinancing of a large portion of the
investment property portfolio, we hold cash of more than GBP60
million and are therefore well positioned to take advantage of
opportunities, should they arise.
N J Hamway R T E Ware
Chairman Chief Executive
23 May 2016
Financial review
Net Asset Value
The net asset value at 31 March 2016 was GBP155.2 million (31
March 2015: GBP165.0 million; 30 September 2015: GBP167.8 million).
The primary movements in the six month period were GBP8.9 million
used to buy back shares, GBP3.6 million net rental income, GBP2.4
million property revaluation deficit, GBP1.9 million spent on
finance costs and GBP1.4 million of dividends paid. Excluding the
amounts incurred paying dividends and buying back shares, net asset
value decreased in the period by 1.4%.
On an EPRA basis, the net asset value is:
31 Mar 30 31
2016 Sept Mar
2015 2015
GBP'm GBP'm GBP'm
Net asset value 155.2 167.8 165.0
Exercisable share
options 4.1 4.1 6.8
Diluted net asset
value 159.3 171.9 171.8
Fair value of hedging
instruments - - (0.1)
------- ------- -------
EPRA net asset
value 159.3 171.9 171.7
======= ======= =======
EPRA NAV per share 201.0p 203.2p 198.8p
======= ======= =======
Basic NAV per share 201.0p 203.3p 199.2p
======= ======= =======
Diluted NAV per
share 201.0p 203.3p 198.9p
======= ======= =======
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 with any associated tax effect provided for
at the period end. 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 2016. In their opinion, the open
market value of the investment property portfolio was GBP126.7
million. The total portfolio decreased in value by GBP6.5 million
during the period as a result of three disposals and a decrease in
the underlying portfolio valuation on a like for like basis.
Cash Flow
The Group generated GBP0.4 million cash from operating
activities (31 March 2015: used GBP13.8 million; 30 September 2015:
used GBP12.9 million).
The primary cash outflows in the period were GBP7.3 million
incurred on investment properties under construction and
development and trading properties, GBP3.9 million to repay RBS
debt and GBP8.9 million to buy back shares. These were partly
offset by cash inflows of GBP5.4m from the sales of investment
properties, resulting in a net cash outflow during the period of
GBP15.8 million (31 March 2015: GBP25.7 million outflow; 30
September 2015: GBP13.4 million outflow).
Net Income From Property Activities
31 Mar 30 31
2016 Sept Mar
2015 2015
GBP'm GBP'm GBP'm
Rental income 4.8 11.4 6.1
Direct property costs (1.2) (2.9) (1.2)
------- ------- ------
Rental surplus 3.6 8.5 4.9
------- ------- ------
Proceeds from sale of
investment properties 5.5 31.3 5.8
Cost of investment properties
sold (5.6) (28.9) (5.6)
------- ------- ------
(Loss) / gain on sale
of investment properties (0.1) 2.4 0.2
------- ------- ------
Total net income arising
from property activities 3.5 10.9 5.1
======= ======= ======
Administrative Expenses
The administrative expenses for the six month period ended 31
March 2016 were GBP1.3 million. The major items were salary costs
of GBP0.6 million and various costs arising as a result of the
Group being quoted on AIM. The credit for the six months ended 31
March 2015 of GBP0.2 million included GBP1.75 million for the
reversal of 20% of the 2014 profit share, as previously reported in
the annual report for the year ended 30 September 2015. If this
credit is ignored, administrative expenses for the six months to 31
March 2015 amounted to GBP1.6 million.
Financing
At 31 March 2016, the Group had cash of GBP41.6 million (31
March 2015: GBP45.0 million; 30 September 2015: GBP57.4 million).
The decrease has resulted mainly from the cash used in buying back
shares, repaying bank debt, administrative costs and investing in
the investment properties and developments projects.
The bank debt at 31 March 2016 was GBP34.3 million. Taking into
account the ZDP liability, total debt was GBP67.7 million, with net
debt 20.6% by loan to value and 16.8% against net asset value.
The interest rate risk on the facilities continues to be managed
by way of interest rate swaps and caps, with 100% of debt protected
by hedging at 31 March 2016. The weighted average cost of all debt,
including margin, was 3.9%. The fair value of these derivative
financial instruments is provided for in full on the balance
sheet.
Post the refinancing in April 2016, the Group's cash increased
to GBP62.7 million and total debt, including the ZDP liability,
increased to GBP89.9 million, resulting in gearing of 21.4% by loan
to value and 17.5% against net asset value. Furthermore, the
weighted average cost of debt, including margin, reduced to
2.4%.
Property Information
Summary of Investment property portfolio
31 March 30 September 31 March
2016 2015 2015
Valuation GBP126.7 GBP133.2 GBP154.4
million million million
Number of properties 33 36 42
Contracted rent (pa) GBP9.2 GBP9.8 million GBP11.8
million million
Current ERV (pa) GBP11.5 GBP11.9 million GBP14.3
million million
Net initial yield 6.66% 7.16% 7.25%
Equivalent yield 8.16% 8.02% 8.16%
Reversionary yield 8.58% 8.35% 8.46%
Vacancy rate 17.0% 14.1% 14.3%
Average unexpired lease 4.7 years 4.8 years 4.3 years
lengths
Summary of Development Projects
31 March 30 September 31 March
2016 2015 2015
GBPm GBPm GBPm
Haverfordwest 23.11 23.91 24.17
Holyhead Waterfront 10.25 10.19 9.52
Pembroke Dock Waterfront 4.71 4.68 4.65
Parc Cybi, Holyhead 4.60 4.59 4.34
Fishguard Waterfront 1.46 1.36 1.26
Fishguard Lorry Stop 0.54 0.54 0.54
King's Lynn 0.87 0.85 0.85
Llandudno Junction 0.54 0.43 0.25
Other 0.08 0.07 0.18
--------- ------------- ---------
Total investment to date 46.16 46.62 45.76
========= ============= =========
The reduction in total investment to date arises due to the
reimbursement of retention funds from Pembrokeshire County Council
following completion of the infrastructure works at
Haverfordwest.
Summary of Investment Properties Under Construction
31 March 30 September 31 March
2016 2015 2015
GBPm GBPm GBPm
Haverfordwest Retail 3.18 3.16 -
Cross Hands 2.55 - -
Rhosgoch 3.23 - -
Total investment to date 8.96 3.16 -
========= ============= =========
The Conygar Investment Company PLC
Consolidated Statement of Comprehensive Income
For the six months ended 31 March 2016
Note Six months ended Year ended
31 March 31 March 30 Sept
2016 2015 2015
GBP'000 GBP'000 GBP'000
Rental income 4,555 5,908 10,957
Other property income 242 209 484
Sale of trading investments - 160 300
---------- --------- -----------
Revenue 4,797 6,277 11,741
---------- --------- -----------
Direct costs of:
Rental income 1,237 1,192 2,932
Sale of trading investments - 60 211
Direct Costs 1,237 1,252 3,143
---------- --------- -----------
Gross Profit 3,560 5,025 8,598
Share of results of
joint ventures (2) (2) (19)
(Loss) / gain on sale
of investment properties (126) 157 2,436
Movement on revaluation
of investment properties 6 (2,423) 1,217 2,742
Other gains and losses (10) (262) (309)
Administrative expenses (1,259) 153 (1,541)
---------- --------- -----------
Operating (Loss) / Profit (260) 6,288 11,907
Finance costs 3 (1,920) (2,332) (4,379)
Finance income 3 126 142 226
---------- --------- -----------
(Loss) / Profit Before
Taxation (2,054) 4,098 7,754
Taxation (229) (992) (1,316)
---------- --------- -----------
(Loss) / Profit and
Total Comprehensive
(Charge) / Income for
the Period (2,283) 3,106 6,438
========== ========= ===========
Attributable to:
- equity shareholders (2,283) 3,106 6,438
- minority interests - - -
---------- --------- -----------
(2,283) 3,106 6,438
========== ========= ===========
Basic (loss) / earnings
per share 5 (2.83)p 3.70p 7.72p
Diluted (loss) / earnings
per share 5 (2.83)p 3.69p 7.72p
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 2016
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
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
At 1 October
2014 4,932 124,128 1,568 (15,384) 54,185 169,429 20 169,449
Profit
for the
year - - - - 6,438 6,438 - 6,438
--------- --------- ------------ --------- ---------- -------- ---------------- --------
Total
comprehensive
income
for the
year - - - - 6,438 6,438 - 6,438
Dividend
paid - - - - (1,450) (1,450) - (1,450)
Purchase
of own
shares - - - (7,937) - (7,937) - (7,937)
Issue
of share
capital 53 1,243 - - - 1,296 - 1,296
At 30
September
2015 4,985 125,371 1,568 (23,321) 59,173 167,776 20 167,796
========= ========= ============ ========= ========== ======== ================ ========
Changes
in equity
for six
months
ended
31 March
2016
At 1 October
2015 4,985 125,371 1,568 (23,321) 59,173 167,776 20 167,796
Loss for
the period - - - - (2,283) (2,283) - (2,283)
--------- --------- ------------ --------- ---------- -------- ---------------- --------
Total
recognised
income
and expense
for the
period - - - - (2,283) (2,283) - (2,283)
Dividend
paid - - - - (1,415) (1,415) (1,415)
Purchase
of own
shares - - - (8,873) - (8,873) - (8,873)
At 31
March
2016 4,985 125,371 1,568 (32,194) 55,475 155,205 20 155,225
========= ========= ============ ========= ========== ======== ================ ========
The Conygar Investment Company PLC
Consolidated Balance Sheet
As at 31 March 2016
31 March 31 March 30 Sept
2016 2015 2015
Note GBP'000 GBP'000 GBP'000
Non-Current Assets
Property, plant and
equipment 15 43 28
Investment properties 6 126,710 154,430 133,190
Investment properties
under construction 7 8,957 - 3,156
Investment in joint
ventures 8 6,742 6,114 6,660
Loan to joint venture 3,410 3,110 3,410
Goodwill 3,173 3,173 3,173
149,007 166,870 149,617
--------- --------- ---------
Current Assets
Development and trading
properties 9 32,912 33,358 33,373
Trade and other receivables 3,922 4,198 4,969
Derivatives 8 96 37
Cash and cash equivalents 41,621 45,029 57,386
--------- --------- ---------
78,463 82,681 95,765
--------- --------- ---------
Total Assets 227,470 249,551 245,382
Current Liabilities
Trade and other payables 2,990 4,632 5,370
Bank loans 10 33,857 300 17,768
Tax liabilities 516 2,319 2,254
--------- --------- ---------
37,363 7,251 25,392
--------- --------- ---------
Non-Current Liabilities
Bank loans 10 - 45,811 19,723
Zero dividend preference
shares 11 33,427 31,511 32,471
Deferred tax 1,455 - -
34,882 77,322 52,194
--------- --------- ---------
Total Liabilities 72,245 84,573 77,586
--------- --------- ---------
Net Assets 12 155,225 164,978 167,796
========= ========= =========
Equity
Called up share capital 4,985 4,985 4,985
Share premium account 125,371 125,371 125,371
Capital redemption
reserve 1,568 1,568 1,568
Treasury Shares (32,194) (22,807) (23,321)
Retained earnings 55,475 55,841 59,173
--------- --------- ---------
Equity Attributable
to Equity Holders 155,205 164,958 167,776
Minority interests 20 20 20
Total Equity 155,225 164,978 167,796
========= ========= =========
Net Assets Per Share 201.0p 199.2p 203.3p
The Conygar Investment Company PLC
Consolidated Cash Flow Statement
For the six months ended 31 March 2016
Six months ended Year ended
31 March 31 March 30 Sept
2016 2015 2015
GBP'000 GBP'000 GBP'000
Cash Flows From Operating
Activities
Operating (loss) / profit (260) 6,288 11,907
Depreciation and amortisation 14 18 34
Amortisation of reverse
lease premium 51 87 180
Share of results of joint
ventures 2 2 19
Other gains and losses 17 280 340
Loss / (gain) on sale of
investment properties 126 (157) (2,436)
Movement on revaluation
of investment properties 2,423 (1,217) (2,742)
Cash Flows From Operations
Before Changes In Working
Capital 2,373 5,301 7,302
Change in trade and other
receivables 1,047 (420) (1,191)
Change in land, developments
and trading properties (325) (7,873) (7,102)
Change in trade and other
payables (1,595) (9,333) (9,248)
--------- ----------- -----------
Cash Generated From / (Used
In ) Operations 1,500 (12,325) (10,239)
Finance costs (713) (1,178) (2,020)
Finance income 81 142 207
Tax paid (512) (470) (859)
--------- ----------- -----------
Cash Flows Generated From
/ (Used In) Operating Activities 356 (13,831) (12,911)
--------- ----------- -----------
Cash Flows From Investing
Activities
Acquisition of and additions
to investment properties (7,290) (580) (3,979)
Disposal of trading investments - 160 -
Sale proceeds of investment
properties 5,424 5,760 30,971
Investment in joint ventures (81) (38) (573)
Loans to joint venture - (906) (1,206)
Purchase of plant and equipment (1) - -
Cash Flows (Used In) /
Generated From Investing
Activities (1,948) 4,396 25,213
--------- ----------- -----------
Cash Flows From Financing
Activities
Bank loans repaid (3,885) (8,712) (17,578)
Dividend paid (1,415) (1,450) (1,450)
Purchase of own shares (8,873) (7,423) (7,937)
Issue of shares - 1,296 1,296
Cash Flows Used In Financing
Activities (14,173) (16,289) (25,669)
--------- ----------- -----------
Net decrease in cash and
cash equivalents (15,765) (25,724) (13,367)
Cash and cash equivalents
at 1 October 57,386 70,753 70,753
--------- ----------- -----------
Cash and Cash Equivalents
at 31 March 41,621 45,029 57,386
--------- ----------- -----------
The Conygar Investment Company PLC
Notes to the Interim Results
For the six months ended 31 March 2016
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 2015 other
than the mandatory adoption of new standards, revisions and
interpretations that are applicable to accounting periods
commencing on or after 1 October 2015, as detailed in the annual
financial statements.
The condensed financial information for the six month period
ended 31 March 2016 and the six month period ended 31 March 2015
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 2015
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 2015 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 23 May
2016.
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 ended 31
March 2015 and therefore only the segmented balance sheet is
reported.
Balance Sheet
31 March 2016 31 March 2015
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 135,667 - - 135,667 154,430 - - 154,430
Investment
in joint
ventures - 10,152 - 10,152 - 9,224 - 9,224
Goodwill - 3,173 - 3,173 - 3,173 - 3,173
Development
& trading
properties - 32,912 - 32,912 - 33,358 - 33,358
------------ ------------ --------- ---------- ------------ ------------ --------- ----------
135,667 46,237 - 181,904 154,430 45,755 - 200,185
Other
assets 25,055 - 20,511 45,566 36,463 - 12,903 49,366
------------ ------------ --------- ---------- ------------ ------------ --------- ----------
Total
assets 160,722 46,237 20,511 227,470 190,893 45,755 12,903 249,551
Liabilities (38,618) - (33,627) (72,245) (52,509) - (32,064) (84,573)
------------ ------------ --------- ---------- ------------ ------------ --------- ----------
Net assets 122,104 46,237 (13,116) 155,225 138,384 45,755 (19,161) 164,978
============ ============ ========= ========== ============ ============ ========= ==========
3. Finance Income / Costs
Six months ended Year ended
31 March 31 March 30 Sept
2016 2015 2015
GBP'000 GBP'000 GBP'000
Finance income
Bank interest 126 142 226
========= ========= ================
Finance costs
Bank loans (713) (1,159) (2,021)
Loan repayment costs - (19) -
Amortisation of arrangement
fees (251) (264) (508)
ZDP interest (889) (823) (1,716)
Amortisation of ZDP costs (67) (67) (134)
(1,920) (2,332) (4,379)
========= ========= ================
4. 4. Dividend
The final dividend of 1.75 pence per ordinary share
in respect of the year ended 30 September 2015 (year
ended 30 September 2014: 1.75 pence) was approved
at the AGM and paid in February 2016. This final
dividend amounted to GBP1,415,000 (30 September 2014:
GBP1,450,000).
5. Earnings per Share
The calculation of earnings per ordinary share is based on the
loss after tax of GBP2,283,000 (31 March 2015: profit of
GBP3,106,000; 30 September 2015: profit of GBP6,438,000) and on the
number of shares in issue being the weighted average number of
shares in issue during the period of 80,618,599 (net of 22,482,688
shares purchased by the Company and held as treasury shares) (31
March 2015: 84,053,739; 30 September 2015: 83,429,315). The
weighted average number of shares on a fully diluted basis was
80,618,599 (31 March 2015: 84,157,452; 30 September 2015:
83,429,315) and loss after tax of GBP2,283,000 (31 March 2015:
profit of GBP3,106,000; 30 September 2015: profit of GBP6,438,000).
No adjustment has been made for anti-dilutive potential ordinary
shares. The total number of ordinary shares in issue (net of
22,482,688 shares purchased by the Company and held as treasury
shares) at the date of this report was 77,231,435.
6. Investment Properties
Freehold Long-Leasehold Reverse Total
Lease
Premiums
GBP'000 GBP'000 GBP'000 GBP'000
Valuation at 30 September
2015 112,552 20,146 492 133,190
Additions 267 1,270 7 1,544
Reverse lease premium amortisation - - (51) (51)
Disposals (5,550) - - (5,550)
Revaluation movement (2,386) (37) - (2,423)
--------- --------------- ---------- --------
Valuation at 31 March 2016 104,883 21,379 448 126,710
========= =============== ========== ========
The historical cost of properties held at 31 March 2016 is
GBP160,744,000 (31 March 2015: GBP183,496,000; 30 September 2015:
GBP164,890,000).
The properties were valued by Jones Lang LaSalle, independent
valuers not connected with the Group, at 31 March 2016 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.
As at 31 March 2016 the Group had pledged GBP88,460,000 (31
March 2015: GBP101,170,000; 30 September 2015: GBP95,530,000) of
investment property to secure Royal Bank of Scotland debt
facilities and GBP32,920,000 (31 March 2015: GBP49,020,000; 30
September 2015: GBP32,870,000) to secure Barclays debt facilities.
Further details of these facilities are provided in note 10.
The property rental income earned from investment property, all
of which is leased out under operating leases, amounted to
GBP4,797,000 (March 2015: GBP6,117,000; September 2015:
GBP11,441,000).
7. Investment properties under construction
Investment properties under construction are freehold land and
buildings representing investment properties under development or
construction and they amount to GBP8,957,000 as at 31 March 2016
(31 March 2015: GBPnil; 30 September 2015: GBP3,156,000). These
properties comprise landholdings for current or future development
as investment properties. This methodology has been adopted because
the value of these properties is dependent on a detailed knowledge
of the planning status, the competitive position of the assets and
a range of complex development appraisals. The fair value of these
properties rests in the planned developments, and is difficult to
estimate pending confirmation of designs and planning permission,
and hence has been estimated by the directors at cost as an
approximation to fair value.
8. 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 2016 31 30 Sept
March 2015 2015
GBP'000 GBP'000 GBP'000
Assets
Current assets 10,222 9,237 10,158
Liabilities
Current liabilities (70) (13) (88)
Net assets 10,152 9,224 10,070
========= ========= ===========
Six months ended Year ended
31 March 31 March 30 Sept
2016 2015 2015
GBP'000 GBP'000 GBP'000
Operating loss (2) (2) (19)
Finance income - - -
--------- --------- -----------
Loss before tax (2) (2) (19)
Tax - - -
--------- --------- -----------
Loss after tax (2) (2) (19)
========= ========= ===========
9. Property Inventories
31 March 31 March 30 Sept
2016 2015 2015
GBP'000 GBP'000 GBP'000
Properties held for resale
or development 32,912 33,358 33,373
========= ========= ========
The above amounts relate to development properties, which
include sites, developments in the course of construction and sites
available for sale.
10. Bank Loans
31 March 2016 31 30 Sept
March 2015 2015
GBP'000 GBP'000 GBP'000
Bank loans 34,266 47,051 38,151
Debt issue costs (409) (940) (660)
--------- -------- --------
33,857 46,111 37,491
========= ======== ========
The interest rate profile of the Group bank borrowings at 31
March 2016 was as follows:
Interest Maturity 31 Mar 31 Mar 30 Sep
Rate 2016 2015 2015
GBP'000 GBP'000 GBP'000
Royal Bank of
Scotland (TAPP)
(1) LIBOR +3% Feb 2018 19,019 24,171 20,174
LIBOR +
Barclays (2) 3.5% Aug 2016 8,335 13,088 8,335
Royal Bank of
Scotland (TOPP) LIBOR +
(3) 3.5% Apr 2016 6,912 9,792 9,642
34,266 47,051 38,151
======== ======== ========
(1) As at 31 March 2016, TAPP Property Limited maintained a
facility with the Royal Bank of Scotland PLC of up to GBP22,191,000
(31 March 2015: GBP37,195,000; 30 September 2015: GBP23,346,000)
under which GBP19,019,000 (31 March 2015: GBP24,171,000; 30
September 2015: GBP20,174,000) had been drawn down. As at 31 March
2016 this facility was repayable on or before 5 February 2018 and
was secured by fixed and floating charges over the assets of the
TAPP Property Limited group and the Lamont companies. The facility
was 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. As set out in the Chairman's and Chief Executive's
statement the loan was repaid in full on 28 April 2016.
(2) As at 31 March 2016, 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 GBP8,335,000 (31 March 2015: GBP13,088,000; 30 September 2015:
GBP8,335,000) of which GBP8,335,000 (31 March 2015: GBP13,088,000;
30 September 2015: GBP8,335,000) 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 52% and an interest cover ratio covenant
of 225%.
(3) As at 31 March 2016, TOPP Property Limited and TOPP
Bletchley Limited maintained a facility with the Royal Bank of
Scotland PLC of up to GBP6,912,000 (31 March 2015: GBP9,792,000; 30
September 2015: GBP9,642,000) of which GBP6,912,000 (31 March 2015:
GBP9,792,000; 30 September 2015: GBP9,642,000) had been drawn down.
As at 31 March 2016 this facility was repayable on or before 3
April 2016 and was secured by fixed and floating charges over the
assets of the TOPP Property Limited group. The facility was 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. As
set out in the Chairman's and Chief Executive's statement the loan
was repaid in full on 28 April 2016.
At 31 March 2016, the group had the following derivative
financial instruments:
An interest rate cap was in place relating to the TAPP Property
Limited loan with the Royal Bank of Scotland. The cap has a
notional amount of GBP37,000,000 (31 March 2015 and 30 September
2015: GBP37,000,000), a strike rate of 2% and a termination date of
5 February 2018.
An interest rate cap was in place relating to the TOPP Property
Limited loan with the Royal Bank of Scotland The cap has a notional
amount of GBP10,175,000 (31 March 2015: GBP10,475,000; 30 September
2015: GBP10,325,000), a strike rate of 0.75% and a termination date
of 3 April 2016.
An interest rate swap and cap were in place relating to the
Barclays Bank PLC facility. The swap has a notional amount of
GBP4,334,606 (31 March 2015: GBP9,087,642; 30 September 2015:
GBP4,334,606) and a fixed rate of 1.055%. The cap has a notional
amount of GBP4,000,000 (31 March 2015 and 30 September 2015:
GBP4,000,000) and a strike rate of 1%. Both the swap and the cap
expire on 20 August 2016.
At 31 March 2016, the fair value of the hedging instruments was
GBP8,050 (31 March 2015: GBP96,000; 30 September 2015: GBP37,000).
The valuation of the hedging instruments was provided by JC
Rathbone Associates and represents the change in fair value since
execution.
11. Zero Dividend Preference Shares
The Group issued 30,000,000 zero dividend preference shares
('ZDP Shares') at 100 pence per share. 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. The ZDP shares
were listed on the London Stock Exchange on 10 January 2014.
During the period, the Group has accrued for GBP889,000 (31
March 2015: GBP823,000; 30 September 2015 GBP1,716,000) 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:
Six months
ended
31 March
2016
GBP'000
Balance at start of period 32,471
Amortisation of share issue costs 67
Accrued capital 889
-----------
Balance at end of period 33,427
===========
12. 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
2016 2015 2015
GBP'000 GBP'000 GBP'000
Diluted net asset value 159,275 171,759 171,846
Adjustments:
Fair value of hedging instruments (8) (96) (37)
EPRA net asset value 159,267 171,663 171,809
=========== =========== ===========
No. No. No.
Shares in issue 79,256,435 86,356,254 84,556,254
=========== =========== ===========
EPRA net asset value per
share 201.0p 198.9p 203.2p
=========== =========== ===========
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.
13. 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
2016 2015 2015
GBP'000 GBP'000 GBP'000
Joint Ventures
Conygar Stena Line Limited 7,554 6,788 7,406
CM Sheffield 2 2 2
Roadking Holyhead Limited 3,410 3,110 3,410
--------- --------- --------
10,966 9,900 10,818
========= ========= ========
The loans to Conygar Stena Line Limited may be analysed as
follows:
31 March 31 March 30 Sept
2016 2015 2015
GBP'000 GBP'000 GBP'000
Secured interest bearing
loan 4,534 3,768 4,386
Unsecured non-interest
bearing shareholder loan 3,020 3,020 3,020
--------- --------- --------
7,554 6,788 7,406
========= ========= ========
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
2016 2015 2015
GBP'000 GBP'000 GBP'000
Short term employee benefits 417 (905) 140
417 (905) 140
========= ========= ===========
The credit for the six months ended 31 March 2015 of GBP0.9
million includes GBP1.75 million for the reversal of 20% of the
2014 profit share. If this credit is ignored, amounts paid in
respect of key management compensation for the six months to 31
March 2015 was GBP0.8 million.
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 2016 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 2016 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
23 May 2016
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 KXLFLQEFEBBK
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