TIDMCIC
RNS Number : 1732G
Conygar Investment Company PLC(The)
25 May 2017
25 May 2017
The Conygar Investment Company PLC
Interim Results for the six months ended 31 March 2017
Highlights
-- Net asset value per share 201p at 31 March 2017 increased from 197p at 30 September 2016.
-- Disposed of the majority of our investment properties for GBP129.8 million.
-- Acquired a 40 acre development site close to Nottingham train station for GBP13.5 million.
-- Received planning permission for the first phase of the Fishguard Marina development.
-- Started construction work at our sites in Cross Hands and Ashby de la Zouch.
-- Total cash available of GBP46 million and no debt.
Summary Group Net Assets as at 31 March 2017
Per Share
GBP'm p
Investment Properties Under Construction 28 40
Development Projects 40 56
Investment in Regional REIT Limited 27 38
Cash 46 65
Other Net Assets 1 2
------ ----------
Net Assets 142 201
Robert Ware, Chief Executive of The Conygar Investment Company,
commented:
"This has been an extremely busy and transformational six month
period for the Group and the Board is pleased to have disposed of
the majority of the investment property portfolio which
crystallises the significant capital growth achieved over the past
eight years.
The attention of the team now turns to the investment properties
under construction and the development projects we currently hold
and to sourcing further investment opportunities, such as the
recent Nottingham acquisition. The Group is in a strong position to
bring these projects to fruition with cash of GBP46 million
available for investment and no debt."
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
Henry Freeman: 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 2017
Chairman's and Chief Executive's Statement
Progress and Results Summary
We present the Group's results for the six months ended 31 March
2017. The net asset value per share increased to 201.0p from 196.9p
at 30 September 2016 (201.0p at 31 March 2016).
The profit before taxation of GBP0.5 million compares with a
loss of GBP2.1 million for the six months ended 31 March 2016. The
main reason for this increase in profit is that in the prior year
period there was a decrease in valuation of our investment
properties of GBP2.4 million.
On 24 March 2017, the Group completed the disposal of the
majority of the investment property portfolio, including the TAP,
Lamont and Edinmore portfolios, along with our asset in Mochdre,
North Wales to Regional Commercial Midco Limited, a wholly owned
subsidiary of Regional REIT Limited, for a consideration which
attributed a value of GBP129.8 million to the portfolio. The Group
sold the relevant property owning subsidiaries at their net asset
value and the net consideration amounted to GBP28 million, which
was satisfied by the issue of 26.3 million Regional REIT shares at
a price of 106.3p. This disposal resulted in the investment
properties being transferred to Regional REIT along with the debt
facilities held with Lloyds Banking Group and HSBC. In addition,
Regional REIT also acquired Conygar ZDP PLC and thereby, the
Group's obligation to fund the ZDP capital entitlement, which
equates to GBP39.9 million payable on 9 January 2019.
The transaction results in the Group being debt free and it is
anticipated that this will remain the case until the investment
properties under construction and the development programme require
further finance beyond our cash deposits, which are presently GBP46
million.
The disposal is a significant transaction for the Group and the
team worked hard to minimise the associated costs. This has
resulted in a profit on disposal of GBP1.5 million in the period.
More importantly, the disposal crystallises the substantial capital
gains which have been made across the portfolio since the
acquisitions of the TAP, Lamont and Edinmore portfolios during the
period following the global financial crisis of 2008. Through our
asset management and transaction structuring skills, we took
undervalued and distressed portfolios and transformed them into a
high yielding portfolio, which is well supported by competitive
bank finance and hence, was attractive to purchasers looking for
income producing assets.
The portfolios were acquired for a total cost of GBP113.4
million and the total capital gains realised over the period from
2008 to March 2017 were GBP48.2 million, subject to the disposal of
the Regional REIT shares. In addition to these capital gains, net
income of GBP47.0 million was generated over the same period,
excluding tax.
On 22 December 2016, the Group acquired the Nottingham Island
site, which was the former Boots headquarters and is now a cleared
city centre development site, for GBP13.5 million. It is located
within a short distance of Nottingham train station, to the
southeast of the city centre and measures approximately 40 acres.
Nottingham Island represents an exciting investment and development
opportunity with the potential for a mixture of office,
residential, leisure and student housing accommodation. The site
has a lapsed planning consent for a mixed-use scheme of over 2
million square feet and the Company is currently conducting a
master planning exercise and expects to submit a planning
application before the end of the calendar year.
On the financing side, the Group used GBP10.7 million surplus
cash to buy back 8.7% of its shares at a discount to net asset
value, at an average price of GBP1.61 per share and this has
enhanced net asset value per share by 3.4 pence. Since 31 March
2017, the Group has acquired another 1.9% of its share capital and
so, for the financial year to date, has bought back 10.6% of its
share capital at an average price of GBP1.63 per share.
As referred to above, the Group received 26.3 million shares in
Regional REIT as consideration for the disposal of the investment
properties. As at 31 March 2017, Regional REIT's share price was
101p and this resulted in a paper loss of GBP1.4 million as
reported in the income statement but the share price has since
recovered to 106.5p and as at the close of business on 23 May 2017,
the value of the investment was GBP28.0 million. The shares are
currently yielding 6% per annum and the dividend income we are due
to receive from this investment will substantially cover our
administrative expenses.
Development Projects
We continue to make good progress on our development projects
since we last reported.
Construction on our site at Cross Hands, south west Wales, began
in December 2016 after we received planning permission in September
2016 for a 106,000 square foot retail development. We have signed
legal agreements for leases with B&M Retail, Iceland and Costa
Coffee and negotiations are ongoing with four other national
retailers.
In December 2016, we received planning permission for an 11,000
square foot Marks & Spencer "Food Hall" at our development site
in Nottingham Road, Ashby-de-la-Zouch. This "Food Hall" is pre-let
to Marks & Spencer on a 15 year lease and we started
construction of this in February 2017, with completion expected to
take place in September of this year. There are another two acres
available for development at the site and discussions are ongoing
with potential occupiers.
At Fishguard Harbour, we received Reserved Matters planning
permission for the marine-based infrastructure and development
platform in February 2017. During the summer, we will submit our
applications to the Harbour Revision Order, in conjunction with
Stena Line Ltd, and once these permissions have been achieved, we
will be able to start the development of the marine platform and
marina. Simultaneously, we will continue to prepare the detailed
Reserved Matters application in respect of the 253 homes.
At Holyhead Waterfront, the Town and Village Green Application,
submitted by the Waterfront Action Group to prevent the development
from progressing, was rejected by the appointed Inspector and,
subsequently, acting on the Inspector's recommendation, Ynys Mon
County Council resolved to formally refuse the application at its
March 2017 planning committee. The period, during which this
decision can be called in for judicial review, ends at the
beginning of June 2017 and assuming that this impediment for the
development is removed, we will progress to the detailed design
stage of the scheme.
The Truckstop at Parc Cybi continues to trade well and we are
forecasting a modest uplift in transport/visitor numbers over the
summer months. Separate to our Truckstop joint venture, we are
continuing to progress our plans for an 80 bedroom hotel on our
land and expect to submit a planning application within the next 3
months.
In December 2016, we signed two option agreements with Horizon
Nuclear Power, the first enabling them to instruct us to build a
logistics centre on our 6.9 acre site at Parc Cybi. The second
option agreement covers all of our 203 acre site at Rhosgoch and
marks the site as a potential location for housing the temporary
workers required for the construction of the Wylfa B Nuclear Power
Station.
At Haverfordwest, we submitted two planning applications in June
2016 for approximately 124,000 square feet of retail floorspace, a
60 bedroom hotel, a 5 screen cinema and 602 car parking spaces. We
are continuing to speak to housebuilders on the residential element
of the wider development, with a view to bringing this forward as
soon as possible. We hope that these applications will be heard at
planning committee meetings in June 2017.
At Llandudno Junction, we continue to work with Conwy County
Council to bring this development site forward.
Dividend Policy
Given that the Group has sold the majority of its investment
property portfolio in the period, it is likely that a dividend will
not be declared for this financial year. The Board will continue to
review our dividend policy each year but our primary focus is, and
will continue to be, growth in net asset value per share.
Summary Group Net Assets
The Group net assets as at 31 March 2017 may be summarised as
follows:
Per Share
GBP'm p
Investment Properties Under Construction 28 40
Development Projects 40 56
Investment in Regional REIT Limited 27 38
Cash 46 65
Other Net Assets 1 2
------ ----------
Net Assets 142 201
Outlook
This has been an extremely busy and transformational six month
period for the Group and the Board is pleased to have disposed of
the majority of the investment property portfolio which
crystallises the significant capital growth achieved over the past
eight years.
The attention of the team now turns to the investment properties
under construction and the development projects we currently hold
and to sourcing further investment opportunities, such as the
recent Nottingham acquisition. The Group is in a strong position to
bring these projects to fruition with cash of GBP46 million
available for investment and no debt.
N J Hamway R T E Ware
Chairman Chief Executive
24 May 2017
Financial review
Net Asset Value
The net asset value at 31 March 2017 was GBP141.8 million (31
March 2016: GBP155.2 million; 30 September 2016: GBP152.0 million).
The primary movements in the six month period were GBP3.5 million
net rental income plus a GBP1.5m profit on the sale of Group
undertakings to Regional REIT Limited offset by GBP3.1 million of
finance and administrative costs, a GBP1.4 million write down of
the value of our investment in Regional REIT Limited and GBP10.7
million spent on purchasing our own shares. Excluding the amounts
incurred purchasing Conygar shares, net asset value increased by
0.3% in the period.
Cash Flow
The Group used GBP1.8 million cash in operating activities (31
March 2016: generated GBP0.4 million; 30 September 2016: generated
GBP2.5 million).
The primary cash outflows in the period were GBP13.5 million
incurred on purchasing the Nottingham Island site, GBP8.3 million
to repay Barclays debt and GBP10.2 million to buy back shares.
These were partly offset by cash inflows of GBP20.8 million (net of
costs) from the HSBC debt, resulting in a net cash outflow during
the period of GBP17.6 million (31 March 2016: GBP15.8 million
outflow; 30 September 2016: GBP6.3 million inflow).
Net Income From Investment Property Activities
31 Mar 30 31
2017 Sept Mar
2016 2016
GBP'm GBP'm GBP'm
Rental income 4.9 9.4 4.8
Direct property costs (1.4) (2.9) (1.2)
------- ------ ------
Rental surplus 3.5 6.5 3.6
------- ------ ------
Profit on sale of group 1.5 - -
undertakings*
Loss on sale of investment
properties - (0.3) (0.1)
Total net income arising
from
investment property activities 5.0 6.2 3.5
======= ====== ======
*Profit arising from the sale of the investment property
portfolio to Regional REIT Limited.
Administrative Expenses
The administrative expenses for the six month period ended 31
March 2017 were GBP1.3 million (six month period ended 31 March
2016: GBP1.3 million). The major items were salary costs of GBP0.8
million and various costs arising as a result of the Group being
quoted on AIM.
Financing
At 31 March 2017, the Group had cash of GBP46.0 million (31
March 2016: GBP41.6 million; 30 September 2016: GBP63.7 million).
The decrease has resulted mainly from the cash used in buying back
shares, administrative costs and investing in the investment
properties under construction and developments projects.
All of the undertakings that were party to the Group's bank
loans were sold on 24 March 2017. As at 31 March 2017, the Group no
longer maintains any bank loan facilities.
Summary of Investment Properties Under Construction
31 March 30 September 31 March
2017 2016 2016
GBPm GBPm GBPm
Nottingham Island site 13.71 - -
Haverfordwest Retail 3.49 3.40 3.18
Cross Hands 5.06 2.68 2.55
Rhosgoch 3.45 3.40 3.23
Parc Cybi, Holyhead(2) 1.47 - -
Ashby Retail 1.33 - -
Total investment to date 28.51 9.48 8.96
========= ============= =========
Summary of Development Projects
31 March 30 September 31 March
2017 2016 2016
GBPm GBPm GBPm
Haverfordwest(1) 22.03 22.18 23.11
Holyhead Waterfront 10.77 10.48 10.25
Holyhead Truckstop 3.18 3.18 3.35
Parc Cybi, Holyhead(2) - 1.44 1.25
Fishguard Waterfront 1.54 1.52 1.46
Fishguard Lorry Stop 0.54 0.54 0.54
King's Lynn 0.87 0.87 0.87
Llandudno Junction 0.66 0.61 0.54
Pembroke Dock Waterfront
and Other - - 4.79
--------- ------------- ---------
Total investment to date 39.59 40.82 46.16
========= ============= =========
(1) The reduction in the Haverfordwest investment from 31 March
2016 arises due to the reimbursement of retention funds from
Pembrokeshire County Council following the completion of the
infrastructure works at Haverfordwest.
(2) Parc Cybi Business Park, Holyhead has been reclassified in
the period to an investment property under construction.
The Conygar Investment Company PLC
Consolidated Statement of Comprehensive Income
For the six months ended 31 March 2017
Note Six months ended Year ended
31 March 31 March 30 Sept
2017 2016 2016
GBP'000 GBP'000 GBP'000
Rental income 4,492 4,555 9,222
Other property income 363 242 213
Revenue 4,855 4,797 9,435
------------ ----------- -----------
Direct costs of:
Rental income 1,387 1,237 2,909
Development costs written
off 76 - 1,581
Direct Costs 1,463 1,237 4,490
------------ ----------- -----------
Gross Profit 3,392 3,560 4,945
Share of results of
joint ventures 27 (2) (3)
Profit on sale of group 1,496 - -
undertakings
Movement on revaluation
of investment in Regional (1,408) - -
REIT
Loss on sale of investment
properties - (126) (308)
Movement on revaluation
of investment properties 7 - (2,423) 992
Loss on impairment of
goodwill - - (3,173)
Other gains and losses 72 (10) (880)
Administrative expenses (1,298) (1,259) (2,440)
------------ ----------- -----------
Operating Profit/(Loss) 2,281 (260) (867)
Finance costs 3 (1,779) (1,920) (4,135)
Finance income 3 115 126 259
------------ ----------- -----------
Profit/(Loss) Before
Taxation 617 (2,054) (4,743)
Taxation (122) (229) (706)
------------ ----------- -----------
Profit/(Loss) and Total
Comprehensive Income/(Charge)
for the Period 495 (2,283) (5,449)
============ =========== ===========
Attributable to:
- equity shareholders 495 (2,283) (5,449)
- minority interests - - -
------------ ----------- -----------
495 (2,283) (5,449)
============ =========== ===========
Basic earnings/(loss)
per share 5 0.68p (2.83)p (6.90)p
Diluted earnings/(loss)
per share 5 0.68p (2.83)p (6.90)p
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 2017
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
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
At 1 October
2015 4,985 125,371 1,568 (23,321) 59,173 167,776 20 167,796
Loss for
the year - - - - (5,449) (5,449) - (5,449)
--------- ---------- ------------ --------- ---------- --------- ---------------- ---------
Total
comprehensive
chanrge
for the
year - - - - (5,449) (5,449) - (5,449)
Cancellation
of share
premium
account - (125,371) - _- 125,371 - - -
Dividend
paid - - - - (1,415) (1,415) - (1,415)
Purchase
of own
shares - - - (8,873) - (8,873) - (8,873)
Purchase
of
non-controlling
interest - - - - - - (20) (20)
At 30
September
2016 4,985 - 1,568 (32,194) 177,680 152,039 - 152,039
========= ========== ============ ========= ========== ========= ================ =========
Changes
in equity
for six
months
ended
31 March
2017
At 1 October
2016 4,985 - 1,568 (32,194) 177,680 152,039 - 152,039
Profit
for the
period - - - - 495 495 - 495
--------- ---------- ------------ --------- ---------- --------- ---------------- ---------
Total
recognised
income
and expense
for the
period - - - - 495 495 - 495
Purchase
of own
shares - - - (10,741) - (10,741) - (10,741)
At 31
March
2017 4,985 - 1,568 (42,935) 178,175 141,793 - 141,793
========= ========== ============ ========= ========== ========= ================ =========
The Conygar Investment Company PLC
Consolidated Balance Sheet
As at 31 March 2017
31 March 31 March 30 Sept
2017 2016 2016
Note GBP'000 GBP'000 GBP'000
Non-Current Assets
Property, plant and
equipment 28 15 21
Investment in Regional
REIT 6 26,590 - -
Investment properties 7 - 126,710 130,680
Investment properties
under construction 8 28,513 8,957 9,476
Investment in joint
ventures 9 10,365 10,152 10,110
Goodwill - 3,173 -
65,496 149,007 150,287
--------- --------- ---------
Current Assets
Development and trading
properties 10 29,230 32,912 30,739
Trade and other receivables 3,452 3,922 3,675
Derivatives - 8 44
Cash and cash equivalents 46,031 41,621 63,662
--------- --------- ---------
78,713 78,463 98,120
--------- --------- ---------
Total Assets 144,209 227,470 248,407
Current Liabilities
Trade and other payables 2,416 2,990 4,263
Bank loans 11 - 33,857 8,335
Tax liabilities - 516 243
--------- --------- ---------
2,416 37,363 12,841
--------- --------- ---------
Non-Current Liabilities
Bank loans 11 - - 47,210
Zero dividend preference
shares 12 - 33,427 34,415
Deferred tax - 1,455 1,902
- 34,882 83,527
--------- --------- ---------
Total Liabilities 2,416 72,245 96,368
--------- --------- ---------
Net Assets 13 141,793 155,225 152,039
========= ========= =========
Equity
Called up share capital 4,985 4,985 4,985
Share premium account - 125,371 -
Capital redemption
reserve 1,568 1,568 1,568
Treasury Shares (42,935) (32,194) (32,194)
Retained earnings 178,175 55,475 177,680
--------- --------- ---------
Equity Attributable
to Equity Holders 141,793 155,205 152,039
Minority interests - 20 -
Total Equity 141,793 155,225 152,039
========= ========= =========
Net Assets Per Share 201.0p 201.0p 196.9p
The Conygar Investment Company PLC
Consolidated Cash Flow Statement
For the six months ended 31 March 2017
Six months ended Year ended
31 March 31 March 30 Sept
2017 2016 2016
GBP'000 GBP'000 GBP'000
Cash Flows From Operating
Activities
Operating profit/(loss) 2,281 (260) (867)
Depreciation and amortisation 5 14 21
Amortisation of reverse
lease premium - 51 104
Share of results of joint
ventures (27) 2 3
Other gains and losses 25 17 17
Profit on sale of group (1,496) - -
undertakings
Movement on revaluation 1,408 - -
of investments
Loss on sale of investment
properties - 126 308
Movement on revaluation
of investment properties - 2,423 (992)
Loss on impairment of goodwill - - 3,173
Development costs written
off 76 - 1,581
Cash Flows From Operations
Before Changes In Working
Capital 2,272 2,373 3,348
Change in trade and other
receivables (859) 1,047 1,294
Change in land, developments
and trading properties (47) (325) 267
Change in trade and other
payables (2,394) (1,595) (320)
----------- ---------- -----------
Cash Flows (Used In)/Generated
From Operations (1,028) 1,500 4,589
Finance costs (687) (713) (1,450)
Finance income 67 81 167
Tax paid (137) (512) (815)
----------- ---------- -----------
Cash Flows (Used In)/Generated
From
Operating Activities (1,785) 356 2,491
----------- ---------- -----------
Cash Flows From Investing
Activities
Acquisition of and additions
to investment properties (15,617) (7,290) (9,759)
Sale proceeds of investment
properties - 5,424 6,842
Cash transfer on disposal (1,896) - -
of group undertakings
Costs paid on disposal (269) - -
of group undertakings
Investment in joint ventures (255) (81) (215)
Loans repaid by joint venture - - 175
Purchase of plant and equipment (12) (1) (14)
Cash Flows Used In
Investing Activities (18,049) (1,948) (2,971)
----------- ---------- -----------
Cash Flows From Financing
Activities
Bank loans drawn down 21,298 - 48,100
Bank loans repaid (8,335) (3,885) (29,816)
Costs paid on new bank
loan (548) - (971)
Purchase of interest rate
cap - - (269)
Dividend paid - (1,415) (1,415)
Purchase of own shares (10,212) (8,873) (8,873)
Cash Flows Generated From/(Used
In)
Financing Activities 2,203 (14,173) 6,756
----------- ---------- -----------
Net (decrease) / increase
in cash and cash equivalents (17,631) (15,765) 6,276
Cash and cash equivalents
at Start of Period 63,662 57,386 57,386
----------- ---------- -----------
Cash and Cash Equivalents
at End of Period 46,031 41,621 63,662
----------- ---------- -----------
Notes to the Interim Results
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 2016 other
than the mandatory adoption of new standards, revisions and
interpretations that are applicable to accounting periods
commencing on or after 1 October 2016, as detailed in the annual
financial statements.
The condensed financial information for the six month period
ended 31 March 2017 and the six month period ended 31 March 2016
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 2016
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 2016 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 24 May
2017.
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 in the shares of Regional REIT Limited;
-- 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
investment in Regional REIT Limited is the fair value movement from
acquisition until the balance sheet date. The only item of revenue
or profit/loss relating to the development properties was the write
off of development costs in the year ended 30 September 2016 and
therefore only the segmented balance sheet is reported.
Balance Sheet
31-Mar-17 31-Mar-16
Investment Development Group Investment Development Group
Investment Properties Properties Other Total Properties Properties Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment
in
Regional
REIT
Limited 26,590 - - - 26,590 - - - -
Investment
properties - 28,513 - - 28,513 135,667 - - 135,667
Investment
in
joint
ventures - - 10,365 - 10,365 - 10,152 - 10,152
Goodwill - - - - - - 3,173 - 3,173
Development
&
trading
properties - - 29,230 - 29,230 - 32,912 - 32,912
----------- ----------- ------------ -------- -------- ----------- ------------ --------- ---------
26,590 28,513 39,595 - 94,698 135,667 46,237 - 181,904
Other assets - 3,245 28 46,238 49,511 25,055 - 20,511 45,566
----------- ----------- ------------ -------- -------- ----------- ------------ --------- ---------
Total assets 26,590 31,758 39,623 46,238 144,209 160,722 46,237 20,511 227,470
Liabilities - (966) - (1,450) (2,416) (38,618) - (33,627) (72,245)
----------- ----------- ------------ -------- -------- ----------- ------------ --------- ---------
Net assets 26,590 30,792 39,623 44,788 141,793 122,104 46,237 (13,116) 155,225
=========== =========== ============ ======== ======== =========== ============ ========= =========
3. Finance Income/Costs
Six months ended Year ended
31 March 31 March 30 Sept
2017 2016 2016
GBP'000 GBP'000 GBP'000
Finance income
Bank interest 115 126 259
=============== ============== ================
Finance costs
Bank loans (751) (713) (1,584)
Amortisation of arrangement
fees (127) (251) (741)
ZDP interest payable (901) (956) (1,810)
(1,779) (1,920) (4,135)
=============== ============== ================
4. Dividend
No dividend was paid in respect of the year ended
30 September 2016 (year ended 30 September 2015:
1.75 pence per share amounting to GBP1,415,000).
5. Earnings per Share
The calculation of earnings per ordinary share is based on the
profit after tax of GBP495,000 (31 March 2016: loss of
GBP2,283,000; 30 September 2016: loss of GBP5,449,000) and on the
number of shares in issue being the weighted average number of
shares in issue during the period of 72,708,193 (net of 29,172,688
shares purchased by the Company and held as treasury shares) (31
March 2016: 80,618,599; 30 September 2016: 78,920,377). The
weighted average number of shares on a fully diluted basis was
72,708,193 (31 March 2016: 80,618,599; 30 September 2016:
78,920,377) and profit after tax of GBP495,000 (31 March 2016: loss
of GBP2,283,000; 30 September 2016: loss of GBP5,449,000). No
adjustment has been made for anti-dilutive potential ordinary
shares. The total number of ordinary shares in issue (net of
29,172,688 shares purchased by the Company and held as treasury
shares) at the date of this report was 70,541,435.
6. Investment in Regional REIT
As set out in the Chairman's and Chief Executive's Statement,
the Group completed the disposal of various Group undertakings on
24 March 2017. The net consideration was satisfied by the issue of
26,326,644 ordinary shares in Regional REIT Limited at a price of
106.347 pence per share.
Regional REIT is a United Kingdom based real estate investment
trust whose shares were admitted to the premium segment of the
Official List and to trading on the main market of the London Stock
Exchange on 6 November 2015. Regional REIT is managed by London
& Scottish Investments Limited, as asset manager, and Toscafund
Asset Management LLP, as investment manager.
The consideration is subject to adjustment by reference to
completion accounts which at the date of signing this interim
report are yet to be agreed. To the extent that the net assets of
the disposed companies have decreased, the Company is obliged to
pay any shortfall in cash and to the extent that the net assets
have increased, Regional REIT Limited is obliged to issue further
consideration shares (at an issue price of 106.347p per
consideration share) or pay the amount of the increase in cash at
its election.
The movement in the value of the shares during the period was as
follows:
GBP'000
Consideration shares at
issue price 27,998
Movement in fair value of
investment (1,408)
Valuation at 31 March 2017 26,590
========
Under the terms of the sale agreement, the Company has agreed a
lock-in arrangement in respect of the consideration shares.
Specifically, the Company will not be permitted to dispose
(directly or indirectly) of the legal or beneficial ownership
of:
- one-third of the consideration shares until the date falling 6
months after completion;
- one-third of the consideration shares until the date falling
12 months after completion;
- one third of the consideration shares until the date falling
18 months after completion.
7. Investment Properties
Reverse
Long- Lease
Freehold Leasehold Premiums Total
GBP'000 GBP'000 GBP'000 GBP'000
Valuation at 30 September
2016 106,390 23,902 388 130,680
Reclassification to investment
properties under construction (1,170) - - (1,170)
Reverse lease premium amortisation - - (57) (57)
Disposal of group undertakings (105,220) (23,902) (331) (129,453)
At 31 March 2017 - - - -
========== =========== ========== ==========
With the exception of the investment properties under
construction, set out in note 8, the Group's investment property
portfolio was disposed of on 24 March 2017. The historical cost of
properties held at 31 March 2016 was GBP160,744,000 (30 September
2016: GBP161,164,000).
The property rental income earned from investment property up
until the date of disposal, all of which was leased out under
operating leases, amounted to GBP4,855,000 (March 2016:
GBP4,797,000; September 2016: GBP9,435,000).
As at 31 March 2017, the Group had pledged GBPnil (31 March
2016: GBPnil; 30 September 2016 GBP89,955,000) of investment
property to secure Lloyds Bank, Jersey debt facilities and GBPnil
(31 March 2016: GBP32,920,000; 30 September 2016: GBP33,260,000) to
secure Barclays Bank PLC debt facilities. Further details of these
facilities are provided in note 11.
The properties were valued by Jones Lang La Salle, independent
valuers not connected with the Group, at 31 March 2016 and 30
September 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.
8. Investment properties under construction
Investment properties under construction are freehold land and
buildings representing investment properties under development or
construction and they amount to GBP28,513,000 as at 31 March 2017
(31 March 2016: GBP8,957,000; 30 September 2016: GBP9,476,000).
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. Additions during the
year include the acquisition of the Nottingham Island site for
GBP13.5m including costs.
9. 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 2017 31 30 Sept
March 2016 2016
GBP'000 GBP'000 GBP'000
Assets
Current assets 10,395 10,222 10,203
Liabilities
Current liabilities (30) (70) (93)
Net assets 10,365 10,152 10,110
========= ========= ===========
Six months ended Year ended
31 March 31 March 30 Sept
2017 2016 2016
GBP'000 GBP'000 GBP'000
Operating profit/(loss) 27 (2) (3)
Finance income - - -
--------- --------- -----------
Profit/(loss) before tax 27 (2) (3)
Tax - - -
--------- --------- -----------
Profit/(loss) after tax 27 (2) (3)
========= ========= ===========
10. Property Inventories
31 March 31 March 30 Sept
2017 2016 2016
GBP'000 GBP'000 GBP'000
Properties held for resale
or development 29,230 32,912 30,739
========= ========= ========
The above amounts relate to development properties, which
include sites, developments in the course of construction and sites
available for sale.
11. Bank Loans
31 March 2017 31 30 Sept
March 2016 2016
GBP'000 GBP'000 GBP'000
Bank loans - 34,266 56,435
Debt issue costs - (409) (890)
---------- -------- --------
- 33,857 55,545
========== ======== ========
All of the undertakings that were party to the Group's bank
loans were sold on 24 March 2017 and therefore, as at the balance
sheet date, the Group no longer maintains any bank loan
facilities.
As at 30 September 2016 and up to the date of disposal of the
Group undertakings, TAPP Property Limited, TOPP Property Limited,
TOPP Bletchley Limited, Lamont Property Acquisition (Jersey) I
Limited, Lamont Property Acquisition (Jersey) II Limited and Lamont
Property Acquisition (Jersey) IV Limited ("the borrowers") jointly
maintained a facility with Lloyds Bank, Jersey of GBP48,100,000 (31
March 2016: GBPnil) under which GBP48,100,000 had been drawn down.
This facility was repayable on or before 27 April 2021 and was
secured by fixed and floating charges over the assets of the
borrowers. The facility was subject to a maximum loan to value
covenant of 65%, a historical interest cover ratio covenant of 200%
and a historical debt service cover ratio of 110%.
On 26 October 2016, Conygar Dundee Limited, Conygar Hanover
Street Limited, Conygar Stafford Limited and Conygar St Helens
Limited repaid the outstanding balances of their facilities with
Barclays Bank PLC of GBP8,335,000 (31 March 2016:
GBP8,335,000).
From 2 December 2016 and up to the date of disposal of the Group
undertakings, Conygar Dundee Limited, Conygar Hanover Street
Limited, Conygar Strand Limited and Conygar St Helens Limited
jointly maintained a facility with HSBC Bank PLC of GBP21,397,500
(31 March 2016: GBPnil) under which GBP21,397,500 had been drawn
down. This facility was repayable on or before 2 December 2021 and
was secured by fixed and floating charges over the assets of
Conygar Dundee Limited, Conygar Hanover Street Limited, Conygar
Strand Limited and Conygar St Helens Limited. The facility was
subject to a maximum loan to value covenant of 65%, a historical
and projected interest cover ratio covenant of 200% and a
historical and projected debt service cover ratio of 120%.
All of the undertakings that were party to the Group's
derivative financial instruments were sold on 24 March 2017,
therefore, as at the balance sheet date, the Group no longer
maintains any derivative financial instruments.
At 30 September 2016, the Group had the following derivative
financial instruments:
An interest rate cap was in place relating to the loan with
Lloyds Bank, Jersey. The cap had a notional amount of GBP37,000,000
(31 March 2016: 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 loan with
Lloyds Bank, Jersey. The cap had a notional amount of GBP36,075,000
(31 March 2016: GBPnil), a strike rate of 2.5% and a termination
date of 27 April 2021.
At 30 September 2016, the fair value of the hedging instruments
was GBP44,000 (31 March 2016: GBP8,000). The valuation of the
hedging instruments was provided by JC Rathbone Associates and
represented the change in fair value since execution.
12. Zero Dividend Preference Shares
Part of the consideration for the sale of its investment
property portfolio was the transfer to Regional REIT Limited of the
Group's interest in and obligations under the 30,000,000 zero
dividend preference shares ("ZDP Shares").
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. During the period ended 24 March 2017, the Group
accrued for GBP901,000 (31 March 2016: GBP889,000; 30 September
2016 GBP1,810,000) of additional capital.
The movement on the zero dividend preference share liability
during the period was as follows:
Six months
ended
31 March
2017
GBP'000
Balance at start of period 34,415
Amortisation of share issue costs 64
Accrued capital 901
Transfer of obligation on sale of group
undertakings (35,380)
-----------
Balance at end of period -
===========
13. 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.
31 March 31 March 30 Sept
2017 2016 2016
GBP'000 GBP'000 GBP'000
Diluted net asset value 141,793 159,275 156,089
Adjustments:
Fair value of hedging instruments - (8) (44)
Adjusted net asset value 141,793 159,267 156,045
=========== =========== ===========
No. No. No.
Shares in issue 70,541,435 79,256,435 79,256,435
=========== =========== ===========
Adjusted net asset value
per share 201.0p 201.0p 196.9p
=========== =========== ===========
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.
14. 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
2017 2016 2016
GBP'000 GBP'000 GBP'000
Joint Ventures
Conygar Stena Line Limited 8,023 7,554 7,733
CM Sheffield 2 2 2
Roadking Holyhead Limited 3,235 3,410 3,235
--------- --------- --------
11,260 10,966 10,970
========= ========= ========
The loans to Conygar Stena Line Limited may be analysed as
follows:
31 March 31 March 30 Sept
2017 2016 2016
GBP'000 GBP'000 GBP'000
Secured interest bearing
loan 5,003 4,534 4,713
Unsecured non-interest
bearing shareholder loan 3,020 3,020 3,020
--------- --------- --------
8,023 7,554 7,733
========= ========= ========
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
2017 2016 2016
GBP'000 GBP'000 GBP'000
Short term employee benefits 467 417 834
467 417 834
========= ========= ===========
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 2017 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 ("the AIM rules"). 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.
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 2017 is not prepared, in all material aspects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the AIM Rules.
Rees Pollock
Chartered Accountants and Registered Auditors
London
24 May 2017
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 BZLLLDEFLBBF
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