TIDMCIC
RNS Number : 0236Z
Conygar Investment Company PLC(The)
12 December 2017
12 December 2017
THE CONYGAR INVESTMENT COMPANY PLC
PRELIMINARY RESULTS FOR THE YEARED 30 SEPTEMBER 2017
SUMMARY
-- Net asset value per share 203.0p at 30 September 2017
increased by 3.1% from 196.9p at 30 September 2016.
-- Disposed of the majority of our investment properties for GBP129.8 million.
-- The disposal crystallised capital gains of GBP48.2 million
realised between 2009 and March 2017 on assets acquired for
GBP113.4 million. Net income before tax of GBP47.0 million was also
received over the same period from these assets.
-- Acquired a 37 acre development site in Nottingham city centre for GBP13.5 million.
-- Total cash available for acquisitions and development funding of GBP37 million and no debt.
-- Bought back 10.3 million shares (13.4% of ordinary share
capital) at an average price of 165 pence per share.
Summary Group Net Assets as at 30 September 2017
Per Share
GBP'm p
Properties and Projects 70.9 106.0
Investment in Regional
REIT Limited 27.6 41.3
Cash and other net
assets 37.3 55.7
Net Assets 135.8 203.0
====== ==========
Robert Ware, Chief Executive, commented:
"The disposal of the investment property portfolio enables us to
concentrate on our goal of maximising the value of the development
pipeline. This area of the business will be the main driver of
shareholder growth in the medium term.
Our strong balance sheet, with cash reserves and no debt, places
us in a good position to take advantage of opportunities as they
arise and we will make further acquisitions if it makes sense to do
so.
In the meantime, we will work hard to deliver the projects and
investments we currently hold."
Enquiries:
The Conygar Investment Company PLC
Robert Ware: 020 7258 8670
Ross McCaskill: 020 7258 8670
Liberum Capital Limited (Nominated Adviser and Broker)
Richard Bootle: 020 3100 2222
Henry Freeman: 020 3100 2222
Temple Bar Advisory (Public Relations)
Alex Child-Villiers: 07795 425580
Will Barker: 020 7002 1080
Chairman's & Chief Executive's Statement
Results
We present the Group's results for the year ended 30 September
2017.
Net asset value per share increased by 3.1% to 203.0p (2016:
196.9p). The key components driving that growth were the profit on
disposal of the investment property portfolio of GBP1.5 million,
net rental and dividend income of GBP4.3 million and the impact of
the share buy back programme. During the year, the Group bought
back 10.34 million shares, or 13.4% of the share capital in issue
as at 30 September 2016, at an average price of 165 pence per
share. These purchases enhanced net asset value per share by 4.9
pence.
The profit before taxation for the year was GBP1.2 million
(2016: loss of GBP4.7 million). The Group had cash balances of
GBP37.2 million (2016: GBP63.7 million) at the year end and no bank
debt (2016: GBP56.4 million). Conygar ZDP PLC was sold to Regional
REIT Limited as part of the disposal of the investment property
portfolio and so the zero dividend preference share liability,
which amounted to GBP34.4 million at 30 September 2016, is no
longer owed by the Group.
The balance sheet is strong and now consists of our investment
properties under construction and development projects totalling
GBP70.9 million, our investment in Regional REIT Limited which was
worth GBP27.6 million at the year end and our cash deposits of
GBP37.2 million.
This places us in a good position to deliver the inherent value
of our development pipeline and also to take advantage of
opportunities should they arise.
Progress
In March 2017, the Group disposed of the investment property
portfolio to Regional REIT Limited, which attributed a value of
GBP129.8 million to the portfolio. The bank facilities were
transferred with the properties together with Conygar ZDP PLC 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 transaction crystallised the substantial capital gains
which had been made across the portfolio since the acquisition of
the assets during the period following the global financial crisis
of 2008. The assets were acquired for a total cost of GBP113.4
million and the total capital gains realised over the period from
2009 to March 2017 were GBP48.2 million, subject to the disposal of
the Regional REIT shares. In addition, net income of GBP47.0
million was generated over the same period, excluding tax.
The development pipeline has progressed well during the year. A
detailed review of the development pipeline can be found within the
Strategic Report, which follows this Statement, but we should
mention a few of the projects here which are either new or have
progressed significantly during the year.
In December 2016, the Group acquired 37 acres in Nottingham city
centre for GBP13.5 million. We expect to submit a planning
application in the New Year. The site provides a unique opportunity
to create a new vibrant district in the centre of a major UK city
and we are working closely with Nottingham City Council to deliver
this exciting project. We expect the application to consist of a
mixed-use scheme of over two million square feet which will include
apartments, student housing, offices, leisure uses and associated
community retail offering along with open public spaces.
Construction of our site at Cross Hands, south west Wales, began
in December 2016 and the works for the initial 65,000 square foot
phase of the retail park completed on time and on budget in October
2017. We have now let 80% of this 106,000 square foot retail
development and the tenants include B&M Retail Ltd, Iceland
Foods Ltd, Pets at Home Ltd, Costa Coffee Ltd, Dominos PLC and
David Jenkins Ltd. We are in discussions with other retailers to
take the remaining space at the park and we aim to have let the
site fully during the course of next year.
We have also completed the construction of the M&S Food Hall
investment at our site in Ashby-de-la-Zouch and subsequently sold
the unit in November 2017 for GBP4.35 million. Although we intended
to hold this asset to provide us with long-term income, the
unsolicited offer we received was compelling and enabled us to take
advantage of the strong market we are seeing for good quality
regional assets. After the year end, on 1 December 2017, we also
agreed a lease with B&M Retail Ltd to construct a 20,000 square
foot store with an additional 7,500 square foot garden centre on
the remaining two acres of this site. The lease and construction of
the store are conditional on planning approval and the planning
application for this development will be submitted in the New
Year.
Lastly, in July 2017, we exchanged a lease agreement with
Premier Inn Hotels Limited to construct an 80-bed hotel, with a
restaurant and bar, at our gateway site at Parc Cybi, on the
outskirts of Holyhead, Anglesey. Ynys Mon County Council (the Isle
of Anglesey County Council) granted detailed planning permission at
the end of October 2017. Construction will commence early in the
New Year and is expected to take approximately ten months.
Dividend
The Board recommends that no dividend is declared in respect of
the year ended 30 September 2017 but it will continue to review the
dividend payments annually. More information on the Group's
dividend policy can be found within the Strategic Report.
Share Buy Back
During the year, the Group acquired 10,340,000 ordinary shares
representing 13.4% of its ordinary share capital, at an average a
price of 165.4p per share. This cost GBP17.1m and, as a result of
the buy backs, net asset value per share has been enhanced by 4.9
pence per share. Following the year end, the Group has acquired a
further 1,070,000 ordinary shares representing 1.4% of its ordinary
share capital at an average price of 158.8p per share. This cost
GBP1.7 million and has enhanced net asset value per share by 1.1
pence per share. The Group will seek to renew the buy back
authority at the forthcoming AGM because we consider it to be a
useful capital management tool.
Outlook
The disposal of the investment property portfolio enables us to
concentrate on our goal of maximising the value of the development
pipeline. This area of the business will be the main driver of
shareholder growth in the medium term.
Our strong balance sheet, with cash reserves and no debt, places
us in a good position to take advantage of opportunities as they
arise and we will make further acquisitions if it makes sense to do
so.
In the meantime, we will work hard to deliver the projects and
investments we currently hold.
N J Hamway R T E Ware
Chairman Chief Executive
Strategic Report
The Group's Strategic Report provides a review of the business
for the financial year; discusses the Group's financial position at
the year end and explains the principal risks and uncertainties
facing the business and how we manage those risks. We also outline
the Group's business model and strategy.
Strategy and Business Model
Conygar is an AIM quoted property investment and development
group dealing primarily in UK property. Our aim is to invest in
property assets and companies where we can add significant value
using our property management, development and transaction
structuring skills.
The business operates three major strands being, property
investment, property development and investment in companies which
trade or invest in property or hold substantial property assets.
The property portfolio and the investment in Regional REIT Limited
generate cash flows sufficient to maintain the Group's
administrative costs while at the same time we are creating a
pipeline of investment properties and development projects that are
well positioned to deliver good returns in the medium term. We
continue to focus upon positive cash flow and are prepared to use
modest levels of gearing to enhance returns. Assets are recycled to
release capital as opportunities present themselves and we will
continue to buy back shares where appropriate. The Group is content
to hold cash and adopt a patient strategy unless there is a
compelling reason to invest.
Position of the Company at the year end
The make-up of the Company has changed during the year with the
sale of the investment property portfolio. The portfolio of
investment properties under construction and the development
pipeline are progressing and construction is about to start at
several more locations this year. The construction of these assets
will provide income as will the shareholding in Regional REIT
Limited. The balance sheet remains strong with cash of GBP37.2
million and there is no debt in the Group. The Group has adequate
resources to maintain and develop its business and the balance
sheet remains both liquid and robust.
Events since the balance sheet date
There have been no significant events since the balance sheet
date apart from the granting of detailed planning permission for an
80-bedroom hotel at Parc Cybi, Holyhead, by Ynys Mon County Council
and the sale of the M&S Food Hall in Ashby-de-la-Zouch for
GBP4.35m.
Summary of Group Net Assets
The Group net assets as at 30 September 2017 may be summarised
as follows:
Per Share
GBP'm p
Properties and Projects 70.9 106.0
Investment in Regional
REIT Limited 27.6 41.3
Cash and other net
assets 37.3 55.7
Net Assets 135.8 203.0
====== ==========
Investment properties and Investment in Regional REIT
Limited
The Group completed the disposal of various Group undertakings
on 24 March 2017 which, with the exception of the investment
properties under construction, comprised the Group's entire
investment property portfolio. The net consideration was satisfied
by the issue of 26,326,644 ordinary shares in Regional REIT Limited
at a price of 106.3 pence per share. The shares were valued at 105
pence per share at 30 September 2017 and this gave rise to a paper
loss of GBP355,000 for the year. We will continue to monitor the
performance of Regional REIT and its share price but at present, we
are pleased with the progress of the company. We have received
dividend income to date of GBP948,000 which is equivalent to a
yield of more than 7% per annum. Annualised, this income covers the
majority of our overheads.
Investment Properties Under Construction and Development
Projects
Good progress has been made on most of our development projects
and investment properties under construction since we last
reported.
Nottingham
In December 2016, the Group acquired 37 acres in Nottingham city
centre for GBP13.5 million. The mainly cleared site was formerly
Boots, the Chemists' headquarters and laboratories and has been
vacant for twenty years. A masterplan is currently being prepared
and will include offices, residential, student accommodation and
leisure facilities comprising some two million square feet. We
believe that this is a very exciting opportunity to help shape a
major UK city and will look to submit an outline application in
early 2018.
Fishguard Harbour
At Fishguard Harbour, we received Reserved Matters planning
permission for the marine-based infrastructure and development
platform in February 2017. We are currently in the process of
preparing our Harbour Revision Order application and intend to
submit this to the Marine Management Organisation shortly. Once the
Order has been formalised and we acquire some outstanding land, we
will be in a position to start the development of the marine
platform and marina. Simultaneously, we continue to prepare the
detailed Reserved Matters application in respect of the 253
homes.
Haverfordwest
With disappointment and frustration, we withdrew our two
planning applications for 100,000 square feet of retail units, a
hotel, a 5-screen cinema and 602 car parking spaces in June 2017.
We are working on fresh planning applications which we intend to
submit in the coming year.
We have been working with a national housebuilder on a
masterplan for the entire residential scheme and, jointly with
them, we intend to submit a Reserved Matters application next year
for the first phase of the development.
Cross Hands
We completed the construction of the initial 65,000 square foot
phase of the retail park at Cross Hands, South West Wales in
October 2017. The construction was delivered on time and on budget.
We have let 80% of the 106,000 square foot development to a number
of national retailers including B&M Retail Ltd, Iceland Foods
Limited, Pets at Home Ltd, Costa Coffee Ltd, Dominos PLC and David
Jenkins Ltd. We are in discussions with potential tenants on the
remaining units and aim to have the scheme fully let during
2018.
Holyhead Waterfront
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 his recommendation, Ynys Mon County Council
resolved to formally refuse the application in March 2017. The
Judicial Review period ended in June 2017 and the decision is now
completely free from challenge. We will now progress the detailed
design and Reserved Matters application for the development over
the coming year.
Ashby-de-la-Zouch
At Ashby-de-la-Zouch, we completed the construction of an 11,000
square foot Marks and Spencer Food Hall, that was pre-let for a
fixed term of 15 years. Having received an unsolicited offer of
GBP4.35m, we disposed of the property in November 2017 for a net
initial yield to the purchaser of 4.75%. On the further 2 acres of
the site, we have exchanged an agreement for lease with B&M
Retail Ltd for fifteen years. Subject to securing planning
permission, we intend to construct a 20,000 square foot store with
a 7,500 square foot garden centre and 79 car parking spaces. The
planning application will be submitted in the New Year with the aim
of starting construction on site in early spring.
Parc Cybi Business Park, Holyhead and Rhosgoch
At Parc Cybi, Anglesey, we have exchanged an agreement for lease
with Premier Inn Hotels Ltd to construct an 80-bedroom hotel with a
restaurant and bar. We submitted a detailed application and
received planning permission from Ynys Mon County Council in
November 2017. The pre-let to Premier Inn is on a 25 year lease,
with a first break clause at year 20. We are currently out to
tender on the building contract and will look to start on site in
the New Year.
The option agreement we signed with Horizon Nuclear Power (HNP)
in December 2016, enabling them to instruct us to build a logistics
centre on our 6.9 acre site at Parc Cybi is still in place.
Similarly, the second option agreement that covers the 203 acre
site at Rhosgoch for use during the construction of Wylfa B stands
until December 2022. Rhosgoch is one of several sites that HNP are
considering as a location for housing the temporary construction
workers. The Development Consent Order for the entire Wylfa scheme
and associated infrastructure is due to be submitted by Horizon
Nuclear in the New Year.
In September 2017, we disposed of our 50% interest in the
Roadking Holyhead Limited truck stop to our joint venture partners
for GBP3.13 million. The cash generated will be used to fund the
other projects at this location.
Llandudno Junction
In May 2016, Conwy County Borough Council approved our outline
planning application for 90,000 square feet of retail floor space.
We continue to work in partnership with Conwy County Council as its
preferred development partner to bring forward this 90,000 square
foot retail park. We are in discussions with a number of national
retailers and we will provide further updates in the New Year.
King's Lynn, Norfolk
This is a six acre residential development site with planning
permission for 94 dwellings near to King's Lynn, Norfolk. We are
continuing to market this site and are in discussions with a number
of interested parties.
Summary of Investment Properties Under Construction
2017 2016
GBP'm GBP'm
Nottingham 14.01 -
Cross Hands 8.14 2.68
Ashby-de-la-Zouch 3.55 -
Haverfordwest
(Retail) 3.52 3.40
Rhosgoch 3.46 3.40
Parc Cybi, Holyhead 1.61 -
(1)
Total investment
to date 34.29 9.48
====== ======
Summary of Development Projects
It remains our intention, once the individual projects are
significantly advanced, to introduce third party valuations as soon
as it is practical to do so. We remain confident that there is
significant upside in these projects which will become evident over
the medium term.
2017 2016
GBP'm GBP'm
Haverfordwest
2 22.03 22.18
Holyhead Waterfront 10.86 10.31
Fishguard Waterfront 1.57 1.52
Fishguard Lorry
Stop 0.54 0.54
King's Lynn 0.87 0.87
Llandudno Junction 0.71 0.61
Holyhead Truck
Stop 3 - 3.18
Parc Cybi, Holyhead
1 - 1.61
Total investment
to date 36.58 40.82
====== ======
1. Parc Cybi Business Park, Holyhead has been reclassified in
the year to an investment property under construction.
2. The reduction in the Haverfordwest investment from 30
September 2016 arises due to the reimbursement of retention funds
from Pembrokeshire County Council following completion of the
infrastructure works at Haverfordwest.
3. On 29 September 2017, the Company disposed of its 50%
interest in the Holyhead truck stop joint venture and assigned to
the purchaser the GBP3.2m loan previously advanced to the operating
company, Roadking Holyhead Limited.
Financial review
Net Asset Value
The net asset value at the year end was GBP135.8 million (2016:
GBP152.0 million). The primary movements in the year were GBP3.4
million net rental income plus a GBP1.5 million profit on the sale
of Group undertakings to Regional REIT Limited and GBP0.9m of
dividend income from the Regional REIT investment, offset by GBP4.5
million of finance and administrative costs, a GBP0.4 million write
down of our investment in Regional REIT Limited, and GBP17.1
million spent on purchasing Conygar shares. Excluding the amounts
incurred purchasing Conygar shares, net asset value increased by
0.6% in the year.
2017 2016
GBP'm GBP'm
Net asset value 135.8 152.0
Share options - 4.1
------- -------
Diluted net asset value 135.8 156.1
======= =======
Basic NAV per share 203.0p 196.9p
======= =======
Diluted NAV per share 203.0p 196.9p
======= =======
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. Our investment properties under construction
are carried at fair value and the 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 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.
Cash flow
The Group used GBP0.2 million cash in operating activities
(2016: generated GBP2.5 million).
The primary cash outflows in the year were GBP13.5 million
incurred on purchasing the Nottingham Island site, GBP8.3 million
to repay Barclays debt and GBP16.7 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 cash outflow during the
year of GBP26.5 million (2016: cash inflow of GBP6.3 million).
Net Income From Investment Property Activities
2017 2016
GBP'm GBP'm
Rental income 5.0 9.4
Direct property costs (1.6) (2.9)
------ ------
Rental surplus 3.4 6.5
------ ------
Profit on sale of group 1.5 -
undertakings*
Sale of investment properties - 7.0
Cost of investment properties
sold - (7.3)
Total net income arising
from investment property
activities 4.9 6.2
====== ======
*Profit arising from the sale of the investment property
portfolio to Regional REIT Limited.
Administrative Expenses
The administrative expenses for the year ended 30 September 2017
were GBP2.7 million compared with GBP2.4 million the previous year.
The major items were salary costs of GBP1.7 million (2016: GBP1.4
million) and various costs arising as a result of the Group being
listed on AIM.
Financing
At 30 September 2017, the Group had cash of GBP37.2 million
(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 development
projects.
As at 30 September 2017, the Group no longer maintains any bank
loan facilities.
Taxation
The tax charge for the year is GBP0.4 million on the pre-tax
profit of GBP1.2 million and comprises GBP0.3 million of current
tax and GBP0.1 million of deferred tax. Current tax is payable, at
a rate of 19.5% for UK registered companies and 20% for those
registered in Guernsey and Jersey, on net rental income after
deduction of finance costs and administrative expenses. A deferred
tax liability of GBP0.2 million has been recognised in respect of
the surplus of the carrying value of the Regional REIT limited
shares over their indexed base cost and Group capital losses. This
charge has been partly offset by a GBP0.1 million deferred tax
credit arising from movements in the carrying value of investment
properties, held by UK registered subsidiaries, over their indexed
base costs up to their sale on 24 March 2017.
Capital management
Capital Risk Management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital.
While the Group does not have a formally approved gearing ratio,
the objective above is actively managed through the direct linkage
of borrowings to specific property. The Group seeks to ensure that
secured borrowing stays within agreed covenants with external
lenders.
Treasury Policies
The objective of the Group's treasury policies is to manage the
Group's financial risk, secure cost effective funding for the
Group's operations and to minimise the adverse effects of
fluctuations in the financial markets on the value of the Group's
financial assets and liabilities, on reported profitability and on
the cash flows of the Group.
The Group finances its activities with a combination of bank
loans, cash and short term deposits. Other financial assets and
liabilities, such as trade receivables and trade payables, arise
directly from the Group's operations. The Group may also enter into
derivative transactions to manage the interest rate risk arising
from the Group's operations and its sources of finance. Derivative
instruments may be used to change the economic characteristics of
financial instruments in accordance with the Group's treasury
policies.
The management of cash and similar instruments is monitored
weekly with summary cash statements produced on a fortnightly basis
and discussed regularly in management and Board meetings. The
overall aim is to provide sufficient liquidity to meet the
requirements of the business in terms of funding developments and
potential acquisitions. Surplus funds are invested with a broad
range of institutions with a range of maturities up to a maximum of
180 days. At any point in time, at least half of the Group's cash
is held on instant access or short term deposit of less than 30
days.
Dividend policy
The Board recommends that no dividend is paid in respect of the
year ended 30 September 2017.
Our dividend policy is consistent with the overall strategy of
the business: namely to invest in property assets and companies
where we can add significant value using our property management,
development and transaction structuring skills.
Over the past eight years we have used the surplus cash flow
from the investment property portfolio to enhance these properties
by refurbishment, re-letting and extending tenancies, fund the
operation of the business, create a medium term pipeline of
development opportunities, pay a modest dividend and buy back
shares where appropriate.
Given that the Group has made only a modest profit for the year
ended 30 September 2017, the Board recommends that no dividend
should be declared for this period. The Board will continue to
review our dividend policy each year. Our focus is, and will
continue to be, primarily growth in net asset value per share.
Share buy backs
During the year, the Group acquired 10,340,000 ordinary shares
at an average price of 165.4p which represents 13.4% of its
ordinary share capital. This cost GBP17.1 million and net asset
value per share has been enhanced by approximately 4.9 pence per
share. The Group will seek to renew the buy back authority at the
forthcoming Annual General Meeting.
Principal risks and uncertainties
Managing risk is an integral element of the Group's management
activities and a considerable amount of time is spent assessing and
managing risks to the business. Responsibility for risk management
rests with the Board, with external advisers used where
necessary.
Strategic risks
Strategic risks are risks arising from an inappropriate strategy
or through flawed execution of a strategy. By definition,
strategies tend to be longer term than most other risks and, as has
been amply demonstrated in the last few years, the economic and
wider environment can alter quickly and significantly. Strategic
risks identified include global or national events, regulatory and
legal changes, market or sector changes and key staff
retention.
The Board devotes a considerable amount of time and resource to
continually monitoring and discussing the environment in which we
operate and the potential impacts upon the Group. We are confident
we have sufficiently high calibre directors and managers to manage
strategic risks.
We are content that the Group has the right approach toward
strategy and our financial performance and strong balance sheet are
good evidence of that.
Operational risks
Operational risks are essentially those risks that might arise
from inadequate internal systems, processes, resources or incorrect
decision making. Clearly, it is not possible to eliminate
operational risk, however a considerable amount of time and
resource is applied towards ensuring we have the right calibre of
staff and external support to minimise such risks, as most
operational risks arise from people-related issues. We have also
invested in improved IT systems to support the business and protect
data. Our executive directors are very closely involved in the
day-to-day running of the business to ensure sound management
judgement is applied.
The Group has not suffered any material loss from operational
risks during the year.
Market risks
Market risks primarily arise from the possibility that the Group
is exposed to fluctuations in the values of, or income from, its
investment property portfolio and development land bank. This is a
key risk to the principal activities of the Group and the exposures
are continuously monitored through timely financial and management
reporting and analysis of available market intelligence.
Where necessary, management takes appropriate action to mitigate
any adverse impact arising from identified risks and market risks
continue to be monitored closely.
Estimation and judgement risks
To be able to prepare accounts according to generally accepted
accounting principles, management must make estimates and
assumptions that affect the asset and liability items and revenue
and expense amounts recorded in the accounts. These estimates are
based on historical experience and various other assumptions that
management and the board of directors believe are reasonable under
the circumstances. The results of these considerations form the
basis for making judgements about the carrying value of assets and
liabilities that are not readily available from other sources.
The key sources of estimation uncertainty that have a
significant risk of causing material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are the following:
Properties held for Development
The net realisable value of properties held for development
requires an assessment of fair value of the underlying assets using
property appraisal techniques and other valuation methods. Such
estimates are inherently subjective and actual values can only be
determined in a sales transaction.
Investment in Joint Ventures
The net realisable value of properties held for development
within the joint ventures requires an assessment of fair value of
the underlying assets using property appraisal techniques and other
valuation methods. Such estimates are inherently subjective and in
particular, during the early stages of the development process.
Investment Properties under Construction
The fair value of investment properties under construction rests
in 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.
Financial Liabilities
The Group's policy is to manage the cost of borrowing using
variable rate debt. Whilst floating rate borrowings are not exposed
to changes in fair value, the Group is exposed to cash flow risk as
costs increase if market rates rise. The Group's policy is to use
derivative financial instruments to mitigate at least 50% of this
risk in order to
achieve a sensible and appropriate level of interest rate
protection whilst maintaining flexibility to match the commercial
trading strategy.
All of the undertakings that were party to the Group's bank
loans were sold on 24 March 2017. As at 30 September 2017, the
Group no longer maintains any bank loan facilities or derivative
financial instruments.
Financial Assets
The interest rate profile of the Group's cash at the balance
sheet date was as follows:
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Floating rate 37,170 63,662
======= =======
Floating rate financial assets comprise cash and short term
deposits at call and money market rates for up to thirty days and
institutional cash funds.
Credit Risk
The risk of financial loss due to a counterparty's failure to
honour its obligations arises principally in connection with
property leases, the investment of surplus cash and transactions
where the Group sells properties with an element of deferred
consideration.
Tenant rent payments are monitored regularly and appropriate
action is taken to recover monies owed or if necessary, to
terminate the lease. Deferred consideration terms are only agreed
with counterparties approved by the Board or where some additional
security is available, and there were none as at 30 September 2017
(2016: none).
The Group policy has been to invest funds with a broad range of
institutions having investment grade low risk credit ratings and a
strong or superior ability to repay short term debt obligations.
The unprecedented credit and banking market disruption of the
global financial crisis had a significant impact upon the ability
to rely upon either credit ratings or the ability of financial
institutions to honour their commitments and the widespread nature
of the financial crisis introduced considerable uncertainty into
the process. As at 30 September 2017, the Group had a single
balance of GBP59,000 (2016: GBP67,000) where the counter-party had
failed to honour a notice deposit and a full impairment provision
has been recorded against the balance. There are no other
receivables which are past due but not impaired.
Liquidity Risk
The Group's objective is to maintain a balance between
continuity of funding and flexibility through the use of bank loans
secured on the Group's properties. The Group is exposed to
liquidity risk should it encounter difficulties in realising assets
mainly through the sale of properties. However, the Group maintains
a prudent approach to financing and cash flow such that the adverse
impact of this can be mitigated.
Price Risk
The Group's exposure to changing market prices on the value of
financial instruments may have an impact on the carrying value of
financial instruments and would arise principally as a result of
entering into swaps or similar transactions to fix interest rates
on the Group's borrowings. The Group's policies for managing this
risk are to control the levels of fixed rate debt. As the Group's
assets and liabilities are all denominated in Pounds Sterling,
there is currently no exposure to currency risk.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 September 2017
Note Year Year Ended
Ended 30 Sep
30 Sep 16
17 GBP'000
GBP'000
Rental income 4,641 9,222
Other property income 367 213
Revenue 5,008 9,435
--------- -----------
Direct costs of:
Rental income 1,608 2,909
Development costs written off 77 1,581
Direct Costs 1,685 4,490
--------- -----------
Gross Profit 3,323 4,945
Profit on sale of group undertakings 1,496 -
Movement on revaluation
of investment in Regional REIT 12 (355) -
Share of results of joint ventures
15 29 (3)
Profit on sale/assignment of interest 3 -
in joint venture
Loss on sale of investment properties
13 - (308)
Revaluation of investment properties
13 - 992
Loss on impairment of goodwill - (3,173)
Dividends received from Regional 948 -
REIT
Other gains and losses 6 92 (880)
Administrative expenses (2,710) (2,440)
--------- -----------
Operating Profit/(Loss) 3 2,826 (867)
Finance costs 7 (1,785) (4,135)
Finance income 7 174 259
--------- -----------
Profit/(Loss) Before Taxation 1,215 (4,743)
Taxation 8 (360) (706)
--------- -----------
Profit/(Loss) And Total Comprehensive
Income/(Charge) for the Year 855 (5,449)
--------- -----------
All amounts are attributable to
equity shareholders
Basic earnings/(loss) per share
10 1.21p (6.90)p
Diluted earnings/(loss) per share
10 1.21p (6.90)p
All of the activities of the Group are classed as
continuing.
CONSOLIDATED Statement of Changes in Equity
for the year ended 30 September 2017
Attributable to the equity holders of the Company
Capital Non-Controlling
Share Share Redemption Treasury Retained Interests Total
Capital Premium Reserve Shares Earnings Total Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group
Changes
in equity
for the
year ended
30 September
2016
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
charge 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 the
year ended
30 September
2017
At 1 October
2016 4,985 - 1,568 (32,194) 177,680 152,039 - 152,039
Profit for
the year - - - - 855 855 - 855
---------- ---------- ----------- ---------- ----------- ---------- ---------------- ----------
Total
comprehensive
income for
the year - - - - 855 855 - 855
Purchase
of own shares - - - (17,104) - (17,104) - (17,104)
Cancellation
of treasury
shares (1,629) - 1,629 48,909 (48,909) - - -
---------- ---------- ----------- ---------- ----------- ---------- ---------------- ----------
At 30 September
2017 3,356 - 3,197 (389) 129,626 135,790 - 135,790
========== ========== =========== ========== =========== ========== ================ ==========
CONSOLIDATED BALANCE SHEET
at 30 September 2017
Note 30 Sep 30 Sep
2017 GBP'000 2016
GBP'000
Non-Current Assets
Property, plant and equipment 11 24 21
Investment in Regional REIT 12 27,643 -
Investment properties 13 - 130,680
Investment properties under
construction 14 34,293 9,476
Investment in joint ventures 15 7,267 10,110
69,227 150,287
-------------- ---------
Current Assets
Development and trading properties 17 29,311 30,739
Trade and other receivables 18 1,166 3,675
Derivatives 26 - 44
Cash and cash equivalents 37,170 63,662
-------------- ---------
67,647 98,120
-------------- ---------
Total Assets 136,874 248,407
Current Liabilities
Trade and other payables 19 879 4,263
Bank loans 20 - 8,335
Tax liabilities - 243
879 12,841
-------------- ---------
Non-Current Liabilities
Bank loans 20 - 47,210
Zero dividend preference
shares 21 - 34,415
Deferred tax 24 205 1,902
205 83,527
-------------- ---------
Total Liabilities 1,084 96,368
-------------- ---------
Net Assets 135,790 152,039
============== =========
Equity
Called up share capital 22 3,356 4,985
Capital redemption reserve 3,197 1,568
Treasury shares 23 (389) (32,194)
Retained earnings 129,626 177,680
-------------- ---------
Total Equity Attributable
to Equity Holders 135,790 152,039
============== =========
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 September 2017
Year Ended Year Ended
30 Sep 30 Sep
17 GBP'000 16
GBP'000
Cash Flows From Operating Activities
Operating profit/(loss) 2,826 (867)
Depreciation and amortisation of
reverse lease premium 66 125
Profit on sale of group undertakings (1,496) -
Loss on revaluation of listed investment 355 -
Share of results of joint ventures (29) 3
Profit on sale of interest in joint (3) -
venture
Development costs written off 77 1,581
Other gains and losses 25 17
Loss on sale of investment properties - 308
Surplus on revaluation of investment
properties - (992)
Loss on impairment of goodwill - 3,173
------------ -----------
Cash Flows From Operations Before
Changes In Working Capital 1,821 3,348
Change in trade and other receivables (659) 1,294
Change in land, development and
trading properties (127) 267
Change in trade and other payables (436) (320)
------------ -----------
Cash Flows From Operations 599 4,589
Finance costs (693) (1,450)
Finance income 74 167
Tax paid (181) (815)
------------ -----------
Cash Flows (Used In)/Generated From
Operating Activities (201) 2,491
------------ -----------
Cash Flows From Investing Activities
Acquisition of and additions to
investment properties (22,149) (9,759)
Proceeds from sale of investment
properties - 6,842
Cash transferred on sale of group (1,881) -
undertakings
Costs paid on sale of group undertakings (792) -
Investment in joint ventures (282) (215)
Proceeds from sale/assignment of 3,125 -
interest in joint venture
Loans repaid by joint venture - 175
Purchase of plant and equipment (12) (14)
------------ -----------
Cash Flows Used In Investing Activities (21,991) (2,971)
------------ -----------
Cash Flows From Financing Activities
Bank loans drawn down 21,298 48,100
Bank loans repaid (8,335) (29,816)
Costs paid on new bank loan (548) (971)
Purchase of interest rate cap - (269)
Dividend paid - (1,415)
Purchase of own shares (16,715) (8,873)
Cash Flows (Used In)/Generated From
Financing Activities (4,300) 6,756
------------ -----------
Net (decrease)/increase in cash
and cash equivalents (26,492) 6,276
Cash and cash equivalents at 1 October 63,662 57,386
Cash and Cash Equivalents at 30
September 37,170 63,662
------------ -----------
NOTES TO THE ACCOUNTS
For the year ended 30 September 2017
1. The financial information set out in this announcement is
abridged and does not constitute statutory accounts for the year
ended 30 September 2017 but is derived from those financial
statements. The financial information is not audited. The auditors
have reported on the statutory accounts for the year ended 30
September 2017, their report was unqualified and did not contain
statements under sections 498(2) or (3) of the Companies Act 2006,
and these will be delivered to the Registrar of Companies following
the Company's annual general meeting. The financial information has
been prepared using the recognition and measurement principle of
IFRS.
2. The comparative financial information for the year ended 30
September 2016 was derived from information extracted from the
annual report and accounts for that period, which was prepared
under IFRS and which has been filed with the UK Registrar of
Companies. The auditors have reported on those accounts, their
report was unqualified and did not contain statements under
sections 498 (2) or (3) of the Companies Act 2006.
3. Operating PROFIT
Operating profit is stated after charging:
Year ended Year ended
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Audit services - fees payable to
the parent company auditor for the
audit of the Company and the consolidated
financial statements 20 25
----------- -----------
Other services - fees payable to
the Company auditor for the audit
of the Company's subsidiaries pursuant
to legislation. 25 60
----------- -----------
Other services - fees payable to
the Company auditor for tax services 20 20
----------- -----------
Depreciation of owned assets 9 3
----------- -----------
Lease amortisation - 18
----------- -----------
Operating lease rentals - land and
buildings 223 184
----------- -----------
Movement on provision for doubtful
debts 40 107
----------- -----------
4. PARTICULARS OF EMPLOYEES
The aggregate payroll costs of the above were:
Year ended Year ended
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Wages and salaries 1,516 1,264
Social security costs 196 165
1,712 1,429
========== ==========
The average monthly number of persons, including executive
directors, employed by the Company during the year was seven (2016:
seven).
5. DIRECTORS' EMOLUMENTS
Year ended Year ended
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Emoluments 1,013 834
========== ==========
Emoluments of highest paid director 354 352
========== ==========
The board of directors comprise the only persons having
authority and responsibility for planning, directing and
controlling the activities of the Group.
6. OTHER GAINS AND LOSSES
Year ended Year ended
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Movement in fair value of interest
rate swaps 59 (262)
Transaction costs - (650)
Other 33 32
92 (880)
================== ===========
7. FINANCE INCOME/COSTS
Year ended Year ended
Finance Income 30 Sep 30 Sep
17 16
GBP'000 GBP'000
Bank interest and interest receivable 174 259
========== ==========
Finance Costs
Bank loans (757) (1,584)
Amortisation of arrangement fees (127) (741)
ZDP interest payable (901) (1,810)
---------- ----------
(1,785) (4,135)
========== ==========
8. TAXATION ON ORDINARY ACTIVITIES
(a) Analysis of tax charge in the year
Year ended Year ended
30 Sep 30 Sep
17 16
GBP'000 GBP'000
UK Corporation tax based on the
results for the year 313 577
Over provision in prior years (11) (1,773)
----------- -----------
Current tax 302 (1,196)
Deferred tax 58 1,902
360 706
=========== ===========
(b) Factors affecting tax charge
The tax assessed on the profit/(loss) for the
year differs from the standard rate of corporation
tax in the UK of 19.5% (2016: 20.0%).
Year ended Year ended
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Profit/(loss) before taxation 1,215 (4,743)
=========== ===========
Profit/(loss) multiplied by rate
of tax 237 (949)
Effects of:
Tax impact of unrealised revaluation
movements 69 (198)
Utilisation of tax losses (98) (129)
Movement in tax losses carried
forward 304 607
Non-taxable items (189) 1,314
Joint venture losses not taxable - 10
Capital allowances (76) (78)
Impact of differing tax rates for 66 -
offshore entities
Over provision in prior years (11) (1,773)
----------- -----------
Current tax charge/(credit) for
the year 302 (1,196)
=========== ===========
9. DIVIDS
No dividend was paid in respect of the year ended 30 September
2017 (2016: nil).
10. EARNINGS PER SHARE
The calculation of earnings per ordinary share is based on the
profit after tax of GBP855,000 (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 70,684,860 (2016: 78,920,377).
There are no diluting amounts in either the current or prior
years.
11. PROPERTY, PLANT AND EQUIPMENT
Premises Office Furniture
Lease Equipment & Fittings Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 October 2015 157 75 95 327
Additions - 14 - 14
---------- ------------ ------------- -----------
At 30 September 2016
and 1 October 2016 157 89 95 341
Additions - 12 - 12
---------- ------------ ------------- -----------
At 30 September 2017 157 101 95 353
---------- ------------ ------------- -----------
Depreciation/Amortisation
At 1 October 2015 139 65 95 299
Provided during the
year 18 3 - 21
---------- ------------ ------------- -----------
At 30 September 2016
and 1 October 2016 157 68 95 320
Provided during the
year - 9 - 9
---------- ------------ ------------- -----------
At 30 September 2017 157 77 95 329
---------- ------------ ------------- -----------
Net book value at 30
September 2017 - 24 - 24
========== ============ ============= ===========
Net book value at 30
September 2016 - 21 - 21
========== ============ ============= ===========
12. 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 receipt
of 26,326,644 ordinary shares in Regional REIT, at a price of
106.347 pence per share, which represented 8.76% of the issued
share capital of Regional REIT at the balance sheet date.
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 was subject to adjustment by reference to
completion accounts, which were agreed in July 2017, with a
balancing cash settlement of GBP3,407 paid by the Group to Regional
REIT.
The movement in the market value of the shares during the period
was as follows:
GBP'000
Consideration shares at issue price 27,998
Movement in market value (355)
--------
Valuation at 30 September 2017 27,643
========
Under the terms of the sale agreement, the Company has agreed a
lock-in arrangement in respect of the consideration shares.
Specifically, the Company is not permitted to dispose (directly or
indirectly) of the legal or beneficial ownership of one-third of
the consideration shares until 24 March 2018 and a further
one-third of the consideration shares until 24 September 2018.
13. INVESTMENT PROPERTIES
With the exception of the investment properties under
construction, set out in note 14, the Group's investment property
portfolio was disposed of on 24 March 2017 as part of the corporate
sale to Regional REIT. The movement in fair value of the investment
properties up to the date of disposal was as follows:
Reverse
Long Lease
Freehold Leasehold Premiums Total
GBP'000 GBP'000 GBP'000 GBP'000
Valuation at 1 October
2015 112,552 20,146 492 133,190
Additions 1,446 2,226 - 3,672
Disposals (7,150) - - (7,150)
Lease incentive granted 80 - - 80
Reverse lease premium
amortisation - - (104) (104)
Movement on revaluation (538) 1,530 - 992
----------- ------------ ---------- ----------
Valuation at 30 September
2016 106,390 23,902 388 130,680
Additions 11 64 - 75
Reclassification to investment
Properties under construction (1,170) - - (1,170)
Reverse lease premium
amortisation - - (57) (57)
Disposal of group undertakings (105,231) (23,966) (331) (129,528)
----------- ------------ ---------- ----------
At 30 September 2017 - - - -
=========== ============ ========== ==========
The historical cost of properties held at 30 September 2016 was
GBP161,164,000.
The properties were valued by Jones Lang LaSalle, independent
valuers not connected with the Group, at 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. The valuations were arrived at
by reference to market evidence of transaction prices and completed
lettings for similar properties. The properties were valued
individually and not as part of a portfolio and no allowance was
made for expenses of realisation or for any tax which might have
arisen. They assumed a willing buyer and a willing seller in an
arm's length transaction. The valuations reflect usual deductions
in respect of purchaser's costs and SDLT as applicable at the
valuation date. The independent valuer made various assumptions
including future rental income, anticipated void cost and the
appropriate discount rate or yield.
As at 30 September 2017, the Group has pledged GBPnil (2016:
GBP89,955,000) of investment property to secure Lloyds Bank, Jersey
debt facilities and GBPnil (2016: GBP33,260,000) to secure Barclays
Bank PLC debt facilities. Further details of these facilities are
provided in note 26.
The property rental income earned from investment properties,
leased out under operating leases, amounted to GBP5,008,000 (2016:
GBP9,435,000). Apart from the corporate sale, there were no other
investment property disposals in the current year. Details of the
loss from the sale of investment properties in the prior year are
set out below.
30 Sep
16
GBP'000
Gross sale proceeds 6,955
Sale fees (113)
---------
Net sale proceeds 6,842
Book value of properties sold (7,150)
---------
Loss on sale of investment properties (308)
=========
14. INVESTMENT PROPERTIES UNDER CONSTRUCTION
Investment properties under construction are freehold land and
buildings representing investment properties under development or
construction and they amount to GBP34,293,000 (2016: GBP9,476,000)
as at 30 September 2017. 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 in the year include the acquisition of the
Nottingham Island site for GBP13.5m including costs.
Investment Properties under Construction 30 Sep 30 Sep
17 16
GBP'000 GBP'000
At 1 October 9,476 3,156
Additions 22,038 6,320
Reclassify from investment properties 1,170 -
Reclassification from development 1,609 -
project
At 30 September 34,293 9,476
========= =========
15. INVESTMENT IN JOINT VENTURES
Investment in Joint Ventures 30 Sep 30 Sep
17 16
GBP'000 GBP'000
At 1 October 10,110 6,660
Share of results of joint ventures 29 (3)
Investment in joint venture 253 218
Proceeds on sale/assignment of interest (3,125) -
in joint venture
Reclassify loan to joint venture - 3,235
At 30 September 7,267 10,110
========= =========
On 29 September 2017, the Group disposed of its 50% interest in
the share capital of Roadking Holyhead Limited and assigned its
loan to Roadking Holyhead Limited for a gross consideration of
GBP3,125,500. Details of the profit from the sale are set out
below:
30 Sep
17
GBP'000
Gross proceeds from sale/assignment 3,125
Sale fees (10)
---------
Net sale proceeds 3,115
Book value of interest sold (3,112)
---------
Profit on sale/assignment of interest in
joint venture 3
=========
As at the balance sheet date, the Group retained a 50% interest
in Conygar Stena Line Limited, a property development company and
CM Sheffield Limited a dormant company.
Loans to Joint Ventures
In accordance with IAS 39, loans to joint venture companies have
not been disclosed separately on the balance sheet as the
investments in those entities are net liabilities when the loans
are excluded.
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Conygar Stena Line Limited 8,098 7,733
C M Sheffield Limited 2 2
Roadking Holyhead Limited - 3,235
--------- ---------
8,100 10,970
========= =========
The following amounts represent the Group's 50% share of the
assets and liabilities, and results of the joint ventures which are
included in the consolidated balance sheet and consolidated
statement of comprehensive income.
As at As at
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Assets
Current assets 7,282 10,203
Liabilities
Current liabilities (15) (93)
Net Assets 7,267 10,110
=========== ===========
Year ended Year ended
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Operating profit/(loss) 29 (3)
Finance income - -
----------- -----------
Profit/(loss) before tax 29 (3)
Tax - -
----------- -----------
Profit/(loss) after tax 29 (3)
=========== ===========
There are no contingent liabilities relating to the Group's
interest in joint ventures, and no contingent liabilities of the
ventures themselves.
16. INVESTMENT IN SUBSIDIARY UNDERTAKINGS
During the year, the directors commenced a programme to strike
off the Group's dormant companies that are no longer required. The
subsidiaries set out below, which as at the balance sheet date, are
wholly owned and controlled by the Group, have been classified
between those to be retained and those planned for striking off in
the next financial year.
Country
Subsidiaries of % of
equity
Company name Principal activity registration held
Conygar Holdings Ltd Holding Company England 100%
Conygar Wales PLC Holding Company England 100%*
Conygar Developments Property trading
Ltd and development England 100%*
Conygar Haverfordwest Property trading
Ltd and development England 100%*
Property trading
Conygar Nottingham Ltd and development England 100%*
Property trading
Conygar Ynys Mon Ltd and development England 100%*
Property trading
Martello Quays Ltd and development England 100%
The Nottingham Island
Site Management Company
Ltd Dormant England 100%*
Lamont Property Holdings
Ltd Property investment Jersey 100%*
Conygar Ashby Ltd Property investment Jersey 100%*
Conygar Cross Hands Ltd Property investment Jersey 100%*
Subsidiaries in the process
of being struck off
Coleridge (Fleet GP)
Ltd Dormant England 100%*
Conygar Bedford Square
Ltd Dormant England 100%*
Conygar Properties Ltd Dormant England 100%*
Conygar Sunley Ltd Dormant England 100%*
Loch (Warrington GP)
Ltd Dormant England 100%*
The Advantage Property
Income Trust Ltd Dormant Guernsey 100%*
TOPP Holdings Ltd Dormant Guernsey 100%*
TAPP Maidenhead Ltd Dormant Guernsey 100%*
Conygar Haverfordwest
Retail Ltd Dormant Jersey 100%*
Lamont Property Acquisition
(Jersey) V Ltd Dormant Jersey 100%*
Lamont Property Acquisition
(Jersey) VII Ltd Dormant Jersey 100%*
* Indirectly owned
17. PROPERTY INVENTORIES
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Properties held for resale
or development 29,311 30,739
======== ========
18. TRADE AND OTHER RECEIVABLES
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Trade receivables 26 834
Provision for doubtful
debts - (48)
-------- --------
26 786
Amounts owed by group - -
undertakings
Other receivables 535 845
Prepayments and accrued
income 605 2,044
-------- --------
1,166 3,675
======== ========
The directors consider that the carrying amount of trade and
other receivables approximates to their fair value due to the short
term nature of these financial assets.
19. TRADE AND OTHER PAYABLES
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Amounts owed to group - -
undertakings
Social security and payroll 66 -
taxes
Trade payables 545 976
Accruals and deferred
income 268 3,287
-------- --------
879 4,263
======== ========
The directors consider that the carrying amounts of the trade
and other payables approximate to their fair value due to the short
period of repayment.
20. BANK LOANS
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Bank loans - 56,435
Debt issue costs - (890)
------- --------
- 55,545
=============================== ========
All of the undertakings that were party to the Group's bank
loans were sold on 24 March 2017 therefore, as at the balance sheet
date, the Group no longer maintains any bank loan facilities.
Further details of the Group's financial liabilities are given in
note 26.
21. ZERO DIVID 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 of additional capital (year ended 30
September 2016: GBP1,810,000).
The movement on the zero dividend preference share liability
during the year was as follows:
Year Year ended
ended 30 Sep
30 Sep 16
17
GBP'000 GBP'000
Balance at start of year 34,415 32,471
Amortisation of share issue costs 64 134
Accrued capital 901 1,810
Transfer of obligation on sale of (35,380) -
group undertakings
--------- -----------
Balance at end of year - 34,415
========= ===========
22. SHARE CAPITAL
Authorised share capital:
30 Sep 30 Sep
17 16
GBP GBP
140,000,000 (2016: 140,000,000) Ordinary
shares of GBP0.05 each 7,000,000 7,000,000
========= =========
Allotted and called
up:
Amounts recorded
as equity:
Ordinary shares of
GBP0.05 each
No GBP'000
As at 30 September
2016 99,714,123 4,985
Cancellation of treasury
shares (32,587,688) (1,629)
------------- --------
As at 30 September
2017 67,126,435 3,356
============= ========
23. TREASURY SHARES
In December 2010, the Group began a share buyback programme and
during the year ended 30 September 2017 purchased 10,340,000 (2016:
5,299,819) shares on the open market at a cost of GBP17,103,676
(2016: GBP8,872,556). As seen in note 22 above, on 19 September
2017, 32,587,688 ordinary shares of 5 pence each were transferred
out of treasury and cancelled. The remaining 235,000 shares bought
back were held in treasury at 30 September 2017.
24. DEFERRED TAX LIABILITY
The Group's deferred tax liabilities comprise amounts arising
from unrealised revaluation movements as follows:
30 Sep 30 Sep
17 16
GBP'000 GBP'000
At the start of the year 1,902 -
Charge to the statement of comprehensive
income 58 1,902
Transfer of obligation on sale of group
undertakings (1,755) -
------- -------
At the end of the year 205 1,902
======= =======
Deferred tax liabilities have been measured at a rate of 19%
(2016: 20%), being the rate substantively enacted at the balance
sheet date. They are calculated on the basis of the chargeable gain
that would crystallise on the sale of the Group's investment
properties and other fixed asset investments at each balance sheet
date. The calculation takes account of any available
indexation.
25. LEASE COMMITMENTS
Group as lessee:
At 30 September 2017, the Group had outstanding commitments for
future minimum lease payments under non-cancellable operating
leases, which fall due as follows:
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Within one year 180 180
In the second to fifth years inclusive 131 311
------- -------
311 491
======= =======
Prior to the sale on 24 March 2017, the Group held retail,
office, industrial and leisure buildings as investment properties
which were let to third parties. These were non-cancellable leases
and the income profile based upon the unexpired lease length was as
follows:
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Less than one year - 10,553
Between one and five years - 21,723
Over five years - 10,926
--------- --------
- 43,202
====================================== ========
The Group receives income under non-cancellable leases from
existing property located at several of the Group's development
sites. The income profile based upon the unexpired lease length was
as follows:
30 Sep 30 Sep
17 16
GBP'000 GBP'000
Less than one year 186 129
Between one and five years 508 404
Over five years 296 338
-------- --------
990 871
======== ========
26. FINANCIAL INSTRUMENTS
The interest rate profile of the Group bank borrowings at 30
September 2016 was as follows:
Interest 30 Sep
Rate Maturity 16
GBP'000
Lloyds Bank, Jersey BOE base
(1) + 1.9% 2-5 years 48,100
Less than
Barclays (2) LIBOR + 3.5% 1 year 8,335
56,435
=========
In addition to the bank debt, as at 30 September 2016, the Group
had a financial liability of GBP34.4 million relating to 30,000,000
zero dividend preference shares ("ZDP Shares"). As set out in note
21, the Group's interest in and obligations under the ZDP shares
were transferred to Regional REIT Limited on 24 March 2017.
Loans
All of the undertakings that were party to the Group's bank
loans were sold on 24 March 2017 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
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 (30 September 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
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%.
Fair Values of Financial Assets and Financial Liabilities
The fair values of all the Group's financial assets and
liabilities are set out below:
Book Value Book Value Fair Value Fair Value
30 Sep 30 Sep 30 Sep 30 Sep
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
Financial Assets
Cash 37,170 63,662 37,170 63,662
Loans to joint ventures 8,100 10,970 8,100 10,970
Interest rate derivatives - 44 - 44
Financial Liabilities
Floating rate borrowings - 56,435 - 56,435
Fixed rate borrowings - 34,719 - 34,719
Derivative Financial Instruments
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. The market value of
the derivative financial instruments as at 30 September 2016 are
set out below:
Market
value
Protected at 30 Sep
2016
Rate Expiry GBP'000
%
GBP37 million cap 2.00 Feb-18 44
GBP36.1 million cap 2.50 Apr-21 -
----------
44
==========
The valuation of the swaps was provided by JC Rathbone
Associates Limited, was a tier 2 valuation and represented the
change in fair value since execution. The fair value was derived
from the present value of the future cash flows discounted at rates
obtained by means of the current yield curve appropriate for those
instruments.
The fair value of the Group's trade debtors and other
receivables and trade creditors and other payables is not
considered to vary from historic cost due to the short term nature
of these financial assets and liabilities. As such, they are
excluded from the disclosure.
The Report and Accounts for the year ended 30 September 2017
will be posted to shareholders shortly and copies may be obtained
free of charge for at least one month following their posting by
writing to The Secretary, The Conygar Investment Company PLC,
Fourth Floor, 110 Wigmore Street, London, W1U 3RW. They are also
available on the website www.conygar.com.
The Company's Annual General Meeting will be held at 4:30pm on
25 January 2018 at the offices of Gowling WLG (UK) LLP, 4 More
London Riverside, London, SE1 2AU.
The directors of Conygar accept responsibility for the
information contained in this announcement. To the best of the
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 announcement is released by The Conygar Investment Company
PLC and contains inside information for the purposes of Article 7
of the Market Abuse Regulation (EU) 596/2014 (MAR), and is
disclosed in accordance with the Company's obligations under
Article 17 of MAR.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of the Company by Ross McCaskill, Finance Director.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAFAFFFEXFAF
(END) Dow Jones Newswires
December 12, 2017 02:00 ET (07:00 GMT)
Conygar Investment (LSE:CIC)
Historical Stock Chart
From Feb 2024 to Mar 2024
Conygar Investment (LSE:CIC)
Historical Stock Chart
From Mar 2023 to Mar 2024