RNS Number:6610W
Marylebone Warwick Balfour Grp PLC
18 March 2004
FOR IMMEDIATE RELEASE
18th March 2004
MARYLEBONE WARWICK BALFOUR GROUP PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED
31st DECEMBER 2003
Contact: Marylebone Warwick Balfour Group Plc Tel: 020 7706 2121
Richard Balfour-Lynn, Chief Executive
Andrew Blurton, Joint Finance Director
Baron Phillips Associates Tel: 020 7920 3161
Baron Phillips
MARYLEBONE WARWICK BALFOUR GROUP PLC
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31st DECEMBER 2003
CHAIRMAN'S STATEMENT
Corporately, this has been a relatively quiet six month period for the Group as
we have focused on developing and maturing our core businesses in a testing
economic environment. I indicated in my statement a yearago that shareholders
should not expect further major disposals under our realisation programme while
market conditions did not favour such sales and this has been the case. The life
of this programme has been extended by two years to December 2007,although the
concept of asset realisations and return of cash to shareholders continues as
planned.
I can report that quite significant progress has been achieved in developing our
core businesses which comprise hotels, serviced offices and retailing.
During the period under review we withdrew from our European serviced offices
business and closed our operations in France, Holland, Germany and Spain. This
insulated the Group from the significant losses being incurred by those
operations and enabled us to adopt a more focused approach to our UK operations.
Today, MWB Business Exchange, our serviced offices business, is entirely focused
on the UK's main commercial centres. During the first half of our financial
year, we achieved occupancy levels of 76% which were reasonable. Although
competition has been strong, we are successfully introducing rate increases.
Revenue per Occupied Workstation ("REVPOW") ran at an average of #7,838 for the
six months and closed at #7,970 at 31st December 2003. This compares to #7,907
at 30th June 2003. Demand from prospective licensees is encouraging with
enquiries during January 2004 being up on the levels achieved over the previous
12 months.
We are exploring more ways of taking advantage of these improved market
conditions without creating additional long term commitments for the Group. One
opportunity is to establish new business centres in modern well located but
unlet office buildings by entering into Operating and Management Agreements
("OMAs") with landlords. OMAs enable Business Exchange to receive revenue driven
management fees without committing to long term leases or to substantial capital
expenditure. These agreements could, therefore, set the template for a valuable
increase in our operating capability.
I am pleased to report that the OMA concept is being met with enthusiasm by
landlords and we are currently negotiating terms on a number of buildings where
we hope to create new business centres, without either the Group or Business
Exchange having to enter into long term lease commitments.
Today MWB operates a total of 35 business centres around the UK, with more than
a third of them located within Central London and the balance in major towns and
cities. Together these business centres provide a total of 10,000 workstations.
Business Exchange generated total revenue of #30.5m during the six months ended
31st December 2003. This produced positive EBITDA of #3.5m although, after
interest and depreciation, the division incurred a pre-tax loss of #1.2m. This
was an improvement on the results for the year ended 30th June 2003, when the UK
operations produced pre-tax losses before exceptional items of #3.2m.
I am very pleased to announce that we have appointed John Spencer as the new
Chief Executive of Business Exchange. He joins us at the start of April from
Chubb Fire where he was Managing Director, having been with them for more than
10 years. He has a wealth of management and financial experience and we are
confident he will make a significant contribution to the division.
Our Hotels division, which includes the boutique life-style chain Malmaison, two
five-star hotels, the Marriott Park Lane and The Howard on London's Victoria
Embankment, and the four-star Radisson operated hotel in Argyll Street, Glasgow,
were all affected during the period under review by the threat of terrorism and
the Gulf war. Recently however, occupancy levels have reflected a strengthening
market and revenues are beginning to improve.
At Malmaison we recently launched our latest hotel in the historic Charterhouse
Square, on the edge of the City of London. This new Malmaison is our first hotel
in London and is proving to be a huge success bringing some much needed style
and panache to this City location.
In Oxford a new 87 room hotel is currently under construction and should be
completed in the last quarter of 2005. In this case, Malmaison has taken a 35
year turnover lease ratherthan acquiring the freehold interest. We are also
evaluating further opportunities in other major cities including Belfast,
Cambridge and Bristol.
Occupancy levels at Malmaison picked up strongly in the Autumn with an average
of 80% across the division and average room rates being maintained at #90. The
New Year has started well for Malmaison, helped by the opening of the new hotel
in London and a good increase in business at our Birmingham hotel. EBITDA for
the six months ended 31st December 2003 was #3.8m (2002: #3.2m), although after
interest, depreciation and new hotel opening costs, Malmaison produced a pre-tax
loss of #1.6m (2002: #1.2m).
At The Howard, on London's Victoria Embankment, occupancy also improved after
the Summer lull and peaked at 90% shortly before Christmas, while average room
rates are now over #140 per night. After a slower start, the Marriott Park Lane
occupancy levels have stabilised at 80% with average room rates of #190. Both
hotels recorded a strong start for 2004. Argyle Street, Glasgow is well
established, although occupancy levels are lower than originally anticipated.
Overall, these hotels produced EBITDA for the six months ended 31st December
2003 of #6.0m (2002: #2.0m), although after interest and depreciation, they
produced a pre-tax loss of #1.0m (2002: #1.4m).
At Liberty, the department store we own through our 68% holding in Retail Stores
plc, the period of transition is coming to an end, as the new management team
assembled bythe Chief Executive Iain Renwick begins to produce results. Over
the past year, Iain has recruited key people at senior management level, and
focused the business on offering the right product mix and making shopping at
Liberty a more exciting and dynamic experience.
His efforts, however, should be set against an increasingly difficult retail
environment in which a combination of factors, such as congestion charging and
fewer tourists, combined to dampen spending habits. Despite these negative
factors, the changes implemented at Liberty increased footfall and generated
positive media comment about both the store's look and its content.
During the period under review, the areas of great success included Liberty's
Christmas offer, whichdespite a late-starting Christmas shopping period
performed well. We are continuing our work on the first stages to capitalise on
the unique Liberty brand, which we expect to deliver value in the years ahead.
The external factors referred to above, combined with the short term impact of
repositioning the store held sales at #21.9m during the period in comparison to
#23.1m last year, although gross margins were maintained at 45%. The reduction
in sales restricted EBITDA to #0.5m (down from last year's #1.1m) and losses
after depreciation and interest for the period were #2.0m (2002: #1.5m).
Implementing change in a retailing operation such as Liberty can only be a
gradual process and it is only when we move through 2004 that the full benefits
are expected to be felt. These changes include a revitalised fashion accessories
department in the Tudor House ground floor area together with more commercially
focused, and more visually exciting, ladies and menswear offerings. This month
also sees the launch of a new and exciting outdoor living range which we expect
to be another major draw for the store.
Elsewhere, improved product ranges will begin to appear in furniture and
homeware as the new buying strategy is implemented throughout 2004. There will
also be a more integrated approach to the introduction of Liberty branded
products throughout the store, particularly in homeware, giftware, ladies
fashion and accessories.
Our final remaining development, the #135m third phase of West India Quay, is
close to completion with the hotel and serviced apartments pre-let to Marriott
International on a 25 year OMA and 106 out of the 158 apartments already forward
sold at 31st December 2003. This final element of the West IndiaQuay
development is due for practical completion in May 2004 and the financial
results will therefore commence to be included in our June 2004 figures.
Elsewhere, and in line with our programme of realising fully matured assets, we
are planning to dispose of Marble Arch Tower, the 160,000 sq ft retail, leisure
and office building which the Group acquired three years ago.
The difficult trading conditions encountered by our main operating divisions
have, naturally, impacted on the Group's results for the six months to 31st
December 2003. While we achieved positive EBITDA of #10.8m, the Group made an
overall retained loss of #12.5m against a profit of #2.5m in the comparable
period a year ago. Last year's results however contained one-off profits of
#16.5m from the sale of our fund management business and investment properties,
and the underlying results are therefore similar for both periods.
There has been a consequent impact on our balance sheet with a fall in Equity
Shareholders' Funds to #89.9m compared to #102.3m at 30th June 2003. This
equates to Equity Shareholders' Funds of 82p per share against 93p at the June
2003 year end. At 31st December 2003, net assets of the Group totalled #114.4m,
which reflects a similar reduction from the amount of #128.2m at 30th June 2003.
Since the beginning of January 2004 there has been some improvement in trading
conditions within our three key operating divisions although at this stage it is
not possible to forecast whether this will continue throughout the current
financial year. Nevertheless, we believe our main activities are built on solid
foundations and we are confident of their long term viability. Going forwards
the results will reflect any upturn in the economic climate and I therefore view
the future with a degree of cautious optimism.
Brian Myerson
Chairman
18th March 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 31st December 2003
Year ended 30th June 2003
Six months Six months
ended ended Before
31st December 31st December exceptional
2003 2002 items Exceptional Total
Restated Restated items Restated
Notes #'000 #'000 #'000 #'000 #'000
----------------------------------------------------------------------------------------------
Turnover
Group and
share of joint
ventures 90,834 135,064 199,057 23,179 222,236
Less share of
joint venture
turnover - (1,393) (1,392) - (1,392)
----------------------------------------------------------------------------------------------
Group turnover 2 90,834 133,671 197,665 23,179 220,844
Cost of sales (79,639) (121,781) (189,062) (64,714) (253,776)
----------------------------------------------------------------------------------------------
Gross profit/(loss) 11,195 11,890 8,603 (41,535) (32,932)
Administrative
expenses (8,280) (10,771) (18,237) - (18,237)
----------------------------------------------------------------------------------------------
Group operating
profit/(loss) 2,915 1,119 (9,634) (41,535) (51,169)
Share of operating
profit of joint
ventures - 1,274 1,273 - 1,273
Total operating
profit/(loss):
Group and share
of joint
ventures 2,915 2,393 (8,361) (41,535) (49,896)
Profit on disposal
of investment
properties and
other fixed assets 3 - 16,480 3,428 14,954 18,382
Amount written
off investments - (321) - (321) (321)
----------------------------------------------------------------------------------------------
Profit/(loss)
on ordinary
activities
before
interest 2,915 18,552 (4,933) (26,902) (31,835)
Net interest
payable and
similar items 4 (18,143) (16,413) (32,053) - (32,053)
----------------------------------------------------------------------------------------------
Profit/(loss)
on ordinary
activities
before
taxation 2 (15,228) 2,139 (36,986) (26,902) (63,888)
Taxation
credit on loss
on ordinary
activities 5 1,611 475 401 - 401
----------------------------------------------------------------------------------------------
Profit/(loss)
on ordinary
activities
after taxation (13,617) 2,614 (36,585) (26,902) (63,487)
Equity
minority
interests 6 1,077 696 5,677 (2,528) 3,149
Non-equity
minority
interests 80 (809) (80) (932) (1,012)
----------------------------------------------------------------------------------------------
Profit/(loss)
attributable
to ordinary
shareholders
retained for
the period (12,460) 2,501 (30,988) (30,362) (61,350)
==============================================================================================
Earnings/(loss)
per share 7 (11.3p) 2.2p (25.0p) (24.4p) (49.4p)
==============================================================================================
The results for the six months ended 31st December 2003 and the year ended 30th
June 2003 have been restated to accord with the amendment to FRS5 that was
published in November 2003. This has no effect on the gross profit/(loss) or
results below that level in the profit and loss account.
All results relate to continuing operations.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 31st December 2003
Year ended 30th June 2003
Six months Six months
ended ended Before
31st December 31st December exceptional Exceptional
2003 2002 items items Total
#'000 #'000 #'000 #'000 #'000
------------------------------------------------------------------------------------------
Profit/(loss) retained
for the financial
period
Group (12,460) 2,079 (31,409) (30,362) (61,771)
Joint ventures - 422 421 - 421
------------------------------------------------------------------------------------------
Total
profit/(loss)
for the
financial
period (12,460) 2,501 (30,988) (30,362) (61,350)
Net revaluation
surplus/(deficit)
on fixed
assets charged
to revaluation
reserve - - 31,034 - 31,034
Currency
translation
differences on
foreign
currency net
investments 40 78 (465) - (465)
Other movements - (162) 163 - 163
------------------------------------------------------------------------------------------
Total
recognised
gains and
losses for the
period (12,420) 2,417 (256) (30,362) (30,618)
==========================================================================================
All recognised gains and losses are attributable to equity shareholders'
interests.
RECONCILIATIONS OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
for the six months ended 31st December 2003
Six months Six months
ended ended Year ended
31st December 31st December 30th June
2003 2002 2003
#'000 #'000 #'000
------------------------------------------------------------------------------
Opening equity
shareholders' funds 102,341 144,493 144,493
Profit/(loss) for the financial
year
- before exceptional items (12,460) 2,501 (30,988)
- exceptional items - - (30,362)
Net revaluation
surplus on fixed
assets credited to
revaluation reserve - - 31,034
Purchase of own
shares for
cancellation during
the period - (9,192) (14,030)
Currency translation
differences on
foreign currency net
investments 40 78 (465)
Other movements - (162) 2,659
------------------------------------------------------------------------------
Closing equity
shareholders' funds 89,921 137,718 102,341
==============================================================================
CONSOLIDATED BALANCE SHEET
at 31st December 2003
31st December 31st December 30th June
2003 2002 2003
Notes #'000 #'000 #'000
------------------------------------------------------------------------------
Fixed assets
Intangible assets 18,200 29,722 18,200
Tangible assets 8 609,921 558,810 605,062
------------------------------------------------------------------------------
628,121 588,532 623,262
------------------------------------------------------------------------------
Current assets
Developments in progress 42,156 25,559 34,985
Properties held for resale 1,705 - 3,467
Stocks 6,463 7,938 6,246
Debtors: amounts falling due
- after more than one year 1,309 4,783 5,771
- within one year 42,593 103,935 39,053
Cash 46,158 43,421 52,359
------------------------------------------------------------------------------
140,384 185,636 141,881
Creditors: amounts falling
due within one year 9 (101,793) (136,265) (126,809)
------------------------------------------------------------------------------
Net current assets 38,591 49,371 15,072
------------------------------------------------------------------------------
Total assets less current
liabilities 666,712 637,903 638,334
Creditors: amounts falling due
after more than one year 10 (524,369) (449,035) (472,329)
Provisions for liabilities
and charges 11 (27,964) (12,556) (37,814)
------------------------------------------------------------------------------
Net assets 114,379 176,312 128,191
==============================================================================
Capital and reserves
Called up share capital 54,900 59,600 54,900
Share premium account 79,364 79,185 79,364
Capital redemption reserve 15,650 10,950 15,650
Revaluation reserve 12 78,070 33,348 80,347
Merger reserve 9,403 9,403 9,403
Other reserves 1,379 1,379 1,379
Profit and loss account 12 (148,845) (56,147) (138,702)
------------------------------------------------------------------------------
Equity shareholders' funds 89,921 137,718 102,341
Equity minority interests 13 23,33816,218 24,641
Non-equity minority interests 1,120 22,376 1,209
------------------------------------------------------------------------------
114,379 176,312 128,191
==============================================================================
Equity shareholders' funds
per share 14 82p 116p 93p
==============================================================================
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31st December 2003
Six months Six months Year
ended ended ended
31st December 31st December 30th June
2003 2002 2003
Notes #'000 #'000#'000
------------------------------------------------------------------------------
Net cash inflow/(outflow)
from operating activities 15 (8,893) (3,638) 51,047
Returns on investments and
servicing of finance (20,228) (17,525) (36,407)
Corporation tax paid (537) (372) (166)
Capital expenditure,
financial investment
and sales of fixed assets (20,869) 43,329 9,920
Acquisitions and disposals (8,689) (6,614) 14,454
------------------------------------------------------------------------------
Net cash inflow/(outflow)
before financing (59,216) 15,180 38,848
Financing 16 53,015 (17,518) (32,248)
------------------------------------------------------------------------------
Increase/(decrease) in cash
during the period (6,201) (2,338) 6,600
==============================================================================
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
for the six months ended 31st December 2003
Six months Six months Year
ended ended ended
31st December 31st December 30th June
2003 2002 2003
Notes #'000 #'000 #'000
-------------------------------------------------------------------------------
Increase/(decrease) in cash
during the period (6,201) (2,338) 6,600
Net decrease in hire purchase
and leasing contracts 7,955 3,391 6,808
Net (increase)/decrease in
loans during the period (61,298) 417 (8,460)
-------------------------------------------------------------------------------
Decrease/(increase) in net
debt during the period 17 (59,544) 1,470 4,948
-------------------------------------------------------------------------------
Opening net debt (432,796) (437,744) (437,744)
-------------------------------------------------------------------------------
Closing net debt 17 (492,340) (436,274) (432,796)
===============================================================================
NOTES TO THE ACCOUNTS
1. BASIS OF CONSOLIDATION AND ACCOUNTING POLICIES
The interim results of the Group for the six months ended 31st December 2003
incorporate the results of the Company, its subsidiary undertakings and its
joint ventures for the period then ended. Apart from the adoption of the
amendment to FRS5, the accounting standard relating to revenue recognition
referred to below, the results have been prepared on the basis of the accounting
policies adopted in the accounts of the Group for the year ended 30th June 2003,
consistently applied in all material respects.
The amendment to FRS5 was published in November 2003. The only impact that this
has had on the results for the Group for the six months ended 31st December 2003
relates to the classification of retail concession income in the profit and loss
account.At a gross profit level, the net amount is unaffected. However,
concession turnover and concession cost of sales were included previously in
Group turnover and cost of sales respectively, but now only the net concession
income is included within Group turnover. The comparative figures for turnover
and cost of sales have been restated accordingly.
2. DIVISIONAL ANALYSIS
The analysis of Group turnover is as follows:-
Six months Six months Year ended 30th June 2003
ended ended
31st December 31st December
2003 2002 Total Joint Group
Group turnover Group turnover turnover ventures Turnover
- Restated Restated - Restated
Turnover #'000 #'000 #'000 #'000 #'000
------------------------------------------------------------------------------------
MWB Business
Exchange 30,496 37,607 75,867 - 75,867
Hotels 32,673 38,315 62,251 (37) 62,214
Fund management - 2,406 3,761 (1,355) 2,406
Asset management 3,980 6,428 11,100 - 11,100
Liberty 21,924 23,462 41,833 - 41,833
Other 1,761 2,355 4,210 - 4,210
Project management - 23,098 23,214 - 23,214
------ ------- ------- ----- -------
90,834 133,671 222,236 (1,392) 220,844
====== ======= ======= ===== =======
By geographical
origin:
United Kingdom 88,435 125,590 204,271 (1,392) 202,879
Europe,
excluding UK - 5,893 12,411 - 12,411
Japan 2,399 2,188 5,554 - 5,554
------ ------- ------- ----- -------
90,834 133,671 222,236 (1,392) 220,844
====== ======= ======= ===== =======
Six months Six months
ended ended
31st December 31st December
Earnings before interest, taxation, 2003 2002
depreciation and amortisation ("EBITDA") #'000 #'000
------------------------------------------------------------------------------
The EBITDA of the Group is calculated as
follows:-
Profit on ordinary activities before interest
for the period 2,915 18,552
Add back depreciation and other non-cash items 7,904 12,543
------ ------
Total EBITDA for the period 10,819 31,095
====== ======
Year ended 30th June 2003
Before
exceptional Exceptional Group
items items EBITDA
#'000 #'000 #'000
------------------------------------------------------------------------------
Loss on ordinary activities before
interest for the period (4,933) (26,902) (31,835)
Addback depreciation, amortisation and
write-downs for the period 16,005 49,482 65,487
------ ------ ------
Total EBITDA for the period 11,072 22,580 33,652
====== ====== ======
Six months Six months
ended ended Year ended
31st December 31st December 30th June
2003 2002 2003
Analysis of EBITDA #'000 #'000 #'000
------------------------------------------------------------------------------
The analysis of the EBITDA of the
Group is as follows:-
MWB Business Exchange
UK operating income 3,472 3,567 7,477
Sale of UK Centres - 1,081 2,074
European operating income - (3,402) (8,164)
Hotels
Operating income 10,318 6,916 12,538
Buyout of Malmaison management - (7,000) (7,000)
contract
Pre-opening costs (547) (1,694) (1,694)
Fund management
Operating income - 3,625 3,661
Profit on disposal of fund
management - 14,954 14,954
division
Asset management 2,812 3,943 6,199
Liberty 542 1,106 574
Project management - 14,001 14,727
Cash holdings and other assets,
less loan stock and head office (5,778) (6,002) (11,694)
administration ------ ------ ------
Total EBITDA for the period 10,819 31,095 33,652
====== ====== ======
Year ended 30th June 2003
Six months Six months
Profit/(loss) ended ended Before
on ordinary 31st December 31st December exceptional Exceptional
activities 2003 2002 items items Total
before taxation #'000 #'000 #'000 #'000 #'000
-------------------------------------------------------------------------------------------
The analysis of the
Group loss on ordinary
activities before
taxation is as
follows:-
MWB Business Exchange
UK
Ordinary (1,204) (3,168) (3,173) - (3,173)
Exceptional - - - (40,486) (40,486)
Europe
Ordinary - (7,023) (7,941) - (7,941)
Exceptional - - - (6,793) (6,793)
Hotels
Operating income (2,084) (579) (7,640) - (7,640)
Buyout of Malmaison
management contract - (7,000) - (7,000) (7,000)
Pre-openingcosts (547) (1,694) (1,694) - (1,694)
Exceptional - (292) - (211) (211)
Fund management
Operating income - 2,731 2,725 - 2,725
Profit on disposal of
fund management division - 14,954 - 14,954 14,954
Asset management
Operating income 1,058 250 (360) - (360)
Sales of other properties - 445 546 - 546
Liberty
Ordinary (2,029) (1,542) (4,786) - (4,786)
Project management
West India Quay - (39) 174 - 174
Royal Victoria Docks - 14,071 77 14,626 14,703
Cash holdings and
other assets
Ordinary (4,313) (2,560) (1,713) - (1,713)
Exceptional - - - (1,992) (1,992)
------ ------ ------ ------ ------
Profit before head office
administration cost (9,119) 8,554 (23,785) (26,902) (50,687)
Head office administration
cost (6,109) (6,415) (13,201) - (13,201)
------ ------ ------ ------ ------
Profit/(loss) on ordinary
activities before taxation (15,228) 2,139 (36,986) (26,902) (63,888)
====== ====== ====== ====== ======
By geographical
origin:
United Kingdom (15,782) 8,788 (30,153) (20,106) (50,259)
Europe,
excluding
United Kingdom - 374 (7,938) (6,796)(14,734)
Japan 554 (7,023) 1,105 - 1,105
------ ------ ------ ------ ------
(15,228) 2,139 (36,986) (26,902) (63,888)
====== ====== ====== ====== ======
Equity Equity Non-equity
shareholders' minority minority Net
funds interests interests assets
Net assets #'000 #'000 #'000 #'000
--------------------------------------------------------------------------------
The analysis of the Equity
Shareholders' funds, minority
interests and net assets of
the Group is as follows:-
31st December 2003
MWB Business Exchange (5,657) - - (5,657)
Hotels 93,120 6,429 - 99,549
Asset management 15,463 (166) 3 15,300
Liberty 34,903 16,234 1,117 52,254
Project management 3,747 651 - 4,398
Cash holdings, and other
assets, less loan stock (51,655) 190 - (51,465)
------ ------ ----- -------
89,921 23,338 1,120 114,379
====== ====== ===== =======
Equity shareholders' funds per
share 82p
======
31st December 2002
MWB Business Exchange 9,882 (11,016) 21,214 20,080
Hotels 45,366 5,871 - 51,237
Asset management 13,883 (167) 4 13,720
Liberty 37,204 17,583 1,158 55,945
Project management 9,312 3,535 - 12,847
Cash holdings, and other assets,
less loan stock 22,071 412 - 22,483
------- ------ ------ -------
137,718 16,218 22,376 176,312
======= ====== ====== =======
Equity shareholders' funds per
share 116p
=======
Equity Equity Non-equity
shareholders' minority minority Net
funds interests interests assets
--------------------------------------------------------------------------------
Net assets #'000 #'000 #'000 #'000
--------------------------------------------------------------------------------
30th June 2003
MWB Business Exchange (14,840) - - (14,840)
Hotels 85,053 6,759 - 91,812
Fund management 14,575 (167) 4 14,412
Asset management 36,231 17,101 1,205 54,537
Liberty 3,876 799 - 4,675
Project management (22,554) 149 - (22,405)
------- ------ ----- -------
Cash holdings, and other
assets, less loan stock 102,341 24,641 1,209 128,191
======= ====== ===== =======
Equity shareholders' funds
per share 93p
=======
3. PROFIT ON DISPOSAL OF INVESTMENT PROPERTIES AND OTHER FIXED ASSETS
Six months Six months
ended ended Year ended
31st December 31st December 30th June
2003 2002 2003
#'000 #'000 #'000
------------------------------------------------------------------------------
The profit on disposal of
investment properties and other
fixed assets arose as follows:-
Profit on disposal of fund
management division - 14,954 14,954
Profit on disposal of investment
properties - 445 546
Profit on disposal of other fixed
assets - 1,081 2,882
--- ------ ------
- 16,480 18,382
=== ====== ======
4. NET INTEREST PAYABLE AND SIMILAR ITEMS
Six months Six months
ended ended Year ended
31st December 31st December 30th June
2003 2002 2003
#'000 #'000 #'000
----------------------------------------------------------------------------------------
The net interest payable and similar charges
arose as follows:-
Unsecured Loan Stock 2005/2006 -
including accrued redemption premium 1,959 598 1,705
Convertible Unsecured Loan Stock 2020 -
including redemption premium - 1,525 1,525
Bank loans and overdrafts 16,81116,087 34,841
Finance leases and hire purchase
contracts 302 582 919
Bank charges, debt issue and debt
repayment costs 1,736 1,245 1,614
------ ------ ------
20,808 20,037 40,604
Less interest capitalised before tax
relief (2,086) (3,382) (7,222)
Less interest receivable and similar
income (579) (1,094) (2,181)
------ ------ ------
18,143 15,561 31,201
Share of joint ventures - 852 852
------ ------ ------
Total net interest payable and similar
charges 18,143 16,413 32,053
====== ====== ======
Interest payable is sourced from the Group's operating cash flows and from its
available bank facilities.
5. TAXATION CREDIT ON LOSS ON ORDINARY ACTIVITIES
Six months Six months
ended ended Year ended
31st December 31st December 30th June
2003 2002 2003
#'000 #'000 #'000
------------------------------------------------------------------------------
The taxation credit for the year
arose as follows:-
UK Corporation tax
Adjustment in respect of prior
periods 1,978 620 868
Foreign tax
Tax on profit for the period (367) (178) (498)
Adjustment in respect of prior
periods - 33 31
----- --- ---
Total corporation tax and similar
taxes credited to profit and loss
account 1,611 475 401
===== === ===
6. EQUITY MINORITY INTERESTS
Equity minority interests in the Group loss on ordinary activities after
taxation arose in the following divisions of the Group:-
Six months Six months Year
ended ended ended
31st December 31st December 30th June
2003 2002 2003
#'000 #'000 #'000
------------------------------------------------------------------------------
MWB Business Exchange Limited - 4,761 5,686
Hotels - 140 Park Lane Limited 330 (150) 634
Liberty - Retail Stores plc 669 480 1,434
Project Management - Royal
Victoria Dock 58 (4,429) (4,660)
Project Management - West India
Quay 61 (12) (37)
Leisure Box Limited (41) 46 92
----- ----- -----
1,077 696 3,149
===== ===== =====
7. EARNINGS/(LOSS) PER SHARE
The earnings/(loss) per share figures are calculated by dividing the loss for
the period by the weighted average number of shares in issue during the period,
as follows:-
Year ended 30th June 2003
Six months Six months Before
ended ended exceptional Exceptional Total
31st December 31st December items items basic
2003 2002 2003 2003 2003
#'000 #'000 #'000 #'000 #'000
-------------------------------------------------------------------------------
Profit/
(loss) on
ordinary
activities
after
taxation
and
minority
interests (12,460) 2,501 (30,988) (30,362) (61,350)
====== ====== ====== ====== ======
'000 '000 '000 '000 '000
Weighted
average
number of
ordinary
shares in
issue
during
the period 109,800 115,215 124,237 124,237 124,237
======= ======= ======= ======= =======
Earnings/
(loss) per
share (11.3p) 2.2p (25.0p) (24.4p) (49.4p)
======= ======= ======= ======= =======
8. TANGIBLE FIXED ASSETS
Investment
-------properties------- ---------Operational properties---------
Plant &
machinery,
Long Long Short fixtures &
Freehold leasehold Freehold leasehold leasehold equipment Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
---------------------------------------------------------------------------------------------------------------
Cost or valuation
At 1st July 2003 42,100 68,731 238,448 140,122 67,942 73,362 630,705
Additions 16,291 - 2,390 3,848 357 (930) 21,956
Disposals - - - - (5,049) (6,871) (11,920)
Reclassification - (14,513) - 9,564 - 4,949 -
Currency movements - - - - - 7 7
------ ------ ------- ------ ------ ------ -------
At 31st
December 2003 58,391 54,218 240,838 153,534 63,250 70,517 640,748
------ ------- ------- ------- ------ ------ -------
Depreciation
At 1st July 2003 - - (674) (69) (217) (24,683) (25,643)
Charge for the
period - (40) (1,429) (754) (2,844) (3,773) (8,840)
Currency movements - - - - - (3) (3)
Disposals - - - - - 3,659 3,659
------ ------- ------- ------- ------ ------ -------
At 31st
December 2003 - (40) (2,103) (823) (3,061) (24,800) (30,827)
------ ------- ------- ------- ------ ------ -------
Net book value
At 31st
December 2003 58,391 54,178 238,735 152,711 60,189 45,717 609,921
====== ======= ======= ======= ====== ====== =======
At 31st
December 2002 4,305 121,357 238,787 68,413 83,186 42,762 558,810
====== ======= ======= ======= ====== ====== =======
At 30th June
2003 42,100 68,731 237,774 140,053 67,725 48,679 605,062
====== ============== ======= ====== ====== =======
9. CREDITORS : amounts falling due within one year
31st December 31st December 30th June
2003 2002 2003
#'000 #'000 #'000
-------------------------------------------------------------------------------------------
Current portion of secured bank
and other loans 11,247 42,316 16,497
Hire purchase and leasing
contracts 5,111 7,411 7,738
Trade creditors 12,426 16,267 15,318
Amounts due to other related
parties 129 - 125
Deferred consideration on purchase
of properties 875 4,475 875
Other creditors
Corporation tax 1,751 3,413 4,037
Other taxes and social security 3,178 346 2,388
Other creditors 37,593 26,614 43,411
Accruals 28,415 31,914 35,070
Deferred income 1,068 3,509 1,350
------- ------- -------
101,793 136,265 126,809
======== ======= =======
10. CREDITORS: amounts falling due after more than one year
31st December 31st December 30th June
2003 2002 2003
#'000 #'000 #'000
-----------------------------------------------------------------------------
7.5% Unsecured Loan Stock
2005/2006 29,398 13,108 13,488
Bank loans (secured) 484,817 396,264 426,916
Other loan borrowings 7,285 10,000 14,595
Less issue costs (4,546) (3,662) (4,593)
------- ------- -------
516,954 415,710 450,406
Hire purchase and leasing
contracts 5,186 14,258 10,514
Deferred consideration on purchase
of properties - 6,875 -
Amounts due to other related
parties 1,562 1,401 1,482
Other creditors 667 10,791 9,927
------- ------- -------
524,369 449,035 472,329
======= ======= =======
Analysed as:
Loans due after more than one year 516,954 415,710 450,406
Other long term liabilities 7,415 33,325 21,923
------- ------- -------
524,369 449,035 472,329
======= ======= =======
11. PROVISIONS FOR LIABILITIES AND CHARGES
The movement on the deferred tax balances and other provisions during the six
months ended 31st December 2003 were as follows:-
31st December 31stDecember 30th June
2003 2002 2003
#'000 #'000 #'000
-----------------------------------------------------------------------------
At beginning of period 37,814 13,201 13,201
Increase/(use of) provision during
the period (4,146) (645) 1,662
Increase/(decrease) in provision
for properties carried at negative
values (9,165) - 22,951
Provision for closure costs of
European business centres 13,061 - -
Utilisation of provision for
closure costsof European business
centres (9,600) - -
Potential tax on short-term timing
differences (2,276) 8,583 1,185
Trading tax losses and accelerated
capital allowances 2,276 (8,583) (1,185)
------ ------ ------
27,964 12,556 37,814
====== ====== ======
Analysis
Properties held at negative values 24,461 11,347 33,626
Other provisions 3,503 1,209 4,188
------ ------ ------
27,964 12,556 37,814
====== ====== ======
On 23rd July 2003, the Board announced it had closed its majority owned
subsidiary MWB Business Exchange Europe Limited ("Business Exchange Europe") and
its nine serviced office centres in Holland, Germany and France.
Certain short leasehold interests in the Group's business centre operations had
negative values at 30th June 2003. These principally related to the onerous cost
of future lease obligations and accordingly were provided for in the profit and
loss account for the year ended 30th June 2003. These are recorded as provisions
above. During the six months ended 31st December 2003, no further provisions
were required and amortisation totalled #0.9m. Of the balance, #8.3m was
transferred to form part of the overall provision for the closure of European
centres referred to below.
At 30th June 2003 the consolidated assets and liabilities of Business Exchange
Europe were included in the consolidated balance sheet at that date, and
amounted to net liabilities of #13m. Following closure of the businesses, the
individual assets and liabilities previously consolidated have been replaced by
a single net provision for the costs of closure. The Directors consider these
costs should not exceed the net liabilities of #13m recorded at 30th June 2003,
and accordingly there should be no further financial impact on the Company as a
result of this event. No additional provisions were therefore required during
the period ended 31st December 2003 and at that date the remaining provision
amounted to #3.5m.
12. MOVEMENT ON RESERVES
Profit
Revaluation and loss
reserve account
#'000 #'000
------------------------------------------------------------------------------
At 1st July 2003 80,347 (138,702)
Loss retained for the period - (12,460)
Transfer of depreciation on revalued tangible fixed
assets (2,277) 2,277
Currency translation differences onforeign currency
net investments - 40
------ -------
At 31st December 2003 78,070 (148,845)
====== =======
During the six months ended 31st December 2003, there was no movement in the
share premium account, the capital redemption reserve, the other reserves and
the merger reserve.
13. EQUITY MINORITY INTERESTS
The movements in equity minority interests of the Group during the six months
ended 31st December 2003 arose as follows:-
Less
Less distributions
minority and other
At share of movements At
1st July result for during the 31st December
2003 the period period 2003
Group #'000 #'000 #'000 #'000
------------------------------------------------------------------------------
MWB Business Exchange
Limited - - - -
Hotels - 140 Park Lane
Limited 6,759 (330) - 6,429
Liberty - Retail Stores
plc 17,101 (669) (198) 16,234
Project management -
Royal Victoria Docks 47 (58) (29) (40)
Project management -
West India Quay 752 (61) - 691
Leisure Box Limited 149 41 - 190
Others (167) - 1 (166)
------ ----- --- ------
24,641 (1,077) (226) 23,338
====== ===== === ======
14. EQUITY SHAREHOLDERS' FUNDS PER SHARE
The equity shareholders' funds per share figures of the Group are calculated by
dividing the relevant equity shareholders' funds figures at the period end by
the number of shares in issue at that date, and are calculated as follows:-
31stDecember 31st December 30th June
2003 2002 2003
#'000 #'000 #'000
-----------------------------------------------------------------------------
Equity shareholders' funds per
consolidated balance sheet 89,921 137,718 102,341
======= ======= =======
'000 '000 '000
Number of ordinary shares in issue
at period end 109,800 118,554 109,800
======= ======= =======
Equity shareholders' funds per
share 82p 116p 93p
======= ======= =======
15. NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES
Six months Six months Year
ended ended ended
31st December 31st December 30th June
2003 2002 2003
#'000 #'000 #'000
------------------------------------------------------------------------------
Group operating profit/(loss) 2,915 1,119 (51,169)
Write-down of fixed assets - - 41,361
Goodwill written off - 827 4,299
Depreciation 7,904 8,018 16,005
(Increase)/decrease in properties
held for resale and developments
in progress (5,427) (106) 8,097
(Increase)/decrease in debtors (2,147) (7,381)18,477
(Increase)/decrease in stock (217) (1,311) 381
(Decrease)/increase in creditors (11,921) (4,804) 13,596
------ ----- ------
(8,893) (3,638) 51,047
====== ===== ======
16. FINANCING
Six months Six months Year
ended ended ended
31st December 31st December 30th June
2003 2002 2003
#'000 #'000 #'000
------------------------------------------------------------------------------
Purchase of ordinary shares - (9,193) (14,030)
Investment by non-equity minority
interests (9) 429 572
Distributions to equity minority
interests (319) (3,310) (6,192)
Unsecured Loan Stock repaid,
including premium - (10,000) (10,000)
Loans drawn down 114,543 71,688 134,684
Loans repaid (53,245) (63,741) (130,474)
Net decrease in hire purchase and
leasing contracts (7,955) (3,391) (6,808)
------ ------ ------
53,015 (17,518) (32,248)
====== ====== ======
17. DECREASE/(INCREASE) IN CASH DURING THE PERIOD
Movement Movement
31st December during 30th June during 30th June
2003 six months 2003 year 2002
#'000 #'000 #'000 #'000 #'000
------------------------------------------------------------------------------
Cash 46,158 (6,201) 52,359 6,600 45,759
Hire purchase
and leasing
contracts (10,297) 7,955 (18,252) 6,808 (25,060)
Bank loans (484,303) (45,483) (438,820) (27,849) (410,971)
Unsecured Loan
Stock (29,398) (15,910) (13,488) 7,984 (21,472)
------- ------ ------- ------ -------
Other loan
borrowings (14,500) 95 (14,595) 11,405 (26,000)
------- ------ ------- ------ -------
Net debt (492,340) (59,544) (432,796) 4,948 (437,744)
======= ====== ======= ====== =======
18. FINANCIAL INFORMATION
The financial information set out in these interim accounts of the Group for the
six months ended 31st December 2003 includes information for the year ended 30th
June 2003. This information does not constitute the Company's statutory accounts
for the year ended 30th June 2003 but is derived from those accounts. Statutory
accounts for the year ended 30th June 2003 have been delivered to the Registrar
of Companies. The auditors have reported on those accounts; their report was
unqualified and did not contain statements under Section 237(2) or (3) of the
Companies Act 1985.
19. ACCOUNTS AND INTERIM ANNOUNCEMENT
A copy of the above document has been submitted to the UK Listing Authority, and
will be available for inspection at the UK Listing Authority's Document Viewing
Facility, which is situated at The Financial Services Authority, 25 The North
Colonnade, Canary Wharf, London E14 5HS, telephone number 020 7676 1000.
These results are expected to be sent to shareholders during March 2004. The
audited accounts of Marylebone Warwick Balfour Group Plc for the year ended 30th
June 2003, further copies of these interim accounts, and the interim accounts
for the six months ended 31st December 2002 are available from the Company
Secretary, City Group P.L.C. at the Company's registered office of 25 City Road,
London EC1Y 1BQ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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