RNS Number:4657H
Trust of Property Shares PLC
14 February 2003
PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 31ST DECEMBER, 2002
HIGHLIGHTS
* Net Assets per Share at 31st December, 2002, 99.12p (2001:93.22p)
up 6.33%, compared to a 4.7% reduction in the FTSE Real Estate Price Index. Net
Assets per Share based on Directors value of property stock increases to
104.95p.
* Net Assets per Share at 7th February, 2003, 100.08p and based on
Directors value of property stock increases to 105.91p.
* Gross Revenue of # 361,888 (2001:#368,485).
* Total Return per Ordinary Share 8.5p (2001: 9.64p).
* Dividend per Ordinary Share increased by over 5% to 2.6p.
Chairman's Review
Property was the U.K.'s best performing asset class for the third consecutive
year, followed closely by bonds and then gilts, whilst the FTSE All Share
Equities Index fell for the third successive year, this time by 24.96%.
For the year under review, confidence strengthened in the U.K. direct commercial
property market, helped by attractive property returns, with the retail sector
offering the best performance and gaining most investor attention.
Notwithstanding high returns from the direct market, the FTSE Real Estate Price
Index, which opened at 2012.33, peaked in May at 2497.47, showed an increase at
the half year of 11.1% and closed at 1918.28, reflecting a reduction for the
year of 4.7%. Our net assets meanwhile, increased by 6.33%, due to our portfolio
being primarily weighted in the retail sector, which witnessed another year of
buoyant consumer demand, fuelled by a strong economy. Retail sales appear to be
the least cyclical component of macro-economic demand, as retailers are very
competitive.
The net assets of the Trust at the year end amounted to #6.54m, representing
99.12p per share. This excludes the increased value of property stock, which
has a cost of #1.6m and has been conservatively valued by the Board at #2.15m,
following agreement of a rent review increase of 10%. The property now yields
13.75% on cost and comprises an office block, leased to Lloyds TSB Bank, at
Lancing Business Park, Sussex. A Directors' valuation of the property increases
net assets to 104.95p per share. The subsidiary undertaking, which cost #1,000,
now has a value of #614,000 including a #550,000 uplift arising from the
increased value of our direct property.
Revenue on ordinary activities after taxation amounted to #165,596, as against
#245,014 last year, which included the benefits arising from the disposal of
dealing securities at profits, on their original costs following the write down
of #54,488 in the previous year. Dealing securities written down this year
relate principally to investments formerly in the FTSE 100 Index. The Board
recommends a dividend of 2.6p per share, being an increase for the year in
excess of 5%.
At a time of volatility in global Stock Markets with falling equity values, it
is important to reflect upon the real value of property, which continues to
provide a basic need and occupies a sound and unique investment role. Due to
its defensive strength, it is a stable form of investment and a solid and
tangible asset, providing good value with sound returns. Notwithstanding
growing investor demand in direct real estate, the market value of property
shares remains defensive and continues to reflect significant discounts to NAV's
throughout the sector. This factor has resulted in major companies implementing
share buy-back programmes, which give a positive message about asset values. At
the date of this Report, four property companies are now constituent members of
the FTSE 100 Index.
Our principal portfolio investment is a 4.7% holding in Tops Estates PLC, town
centre shopping and leisure specialists. This Company has consistently
increased its annual net asset values, and both interim and final dividends,
which are well covered.
The U.K. economy has been remarkably robust, with output growth and consumer
spending strong, which is a critical determinant in achieving U.K. GDP growth
forecasts over the next two years. If significant growth is not achieved
through productivity gains, and Government spending does not deliver "real"
growth, but instead is absorbed into higher wages and more management, then
inflationary pressures and a more fragile economy will ensue.
I would like to take this opportunity to express our thanks to the A.I.T.C. and
our professional advisers, for their advice and contributions during 2002.
EVERARD GOODMAN
Chairman
14th February, 2003
Consolidated Statement of Total Return (incorporating the Revenue Account)
for the year ended 31st December, 2002
2002 2001
Revenue Capital Total Revenue Capital Total
# # # # # #
Total Capital Gains on Investments - 395,167 395,167 - 390,894 390,894
Franked Investment Income 133,043 - 133,043 127,715 - 127,715
Rental Income 215,311 - 215,311 200,000 - 200,000
Security Dealing Gains - - - 18,758 - 18,758
------------ ----------- ----------- ------------ ----------- -----------
348,354 395,167 743,521 346,473 390,894 737,367
Interest Receivable 13,534 - 13,534 22,012 - 22,012
------------ ----------- ----------- ------------ ----------- -----------
Gross Revenue and Capital Gains 361,888 395,167 757,055 368,485 390,894 759,379
(Provision)/Release of Provision for (95,236) - (95,236) 35,516 - 35,516
Diminution in Value of Dealing
Securities
Administrative Expenses (40,876) - (40,876) (26,281) - (26,281)
------------ ----------- ----------- ------------ ----------- -----------
Return on Ordinary Activities before
Interest Payable and Taxation 225,776 395,167 620,943 377,720 390,894 768,614
Interest Payable (50,679) - (50,679) (82,440) - (82,440)
------------ ----------- ----------- ------------ ----------- -----------
Return on Ordinary Activities before 175,097 395,167 570,264 295,280 390,894 686,174
Taxation
Taxation on Ordinary Activities (9,501) - (9,501) (50,266) - (50,266)
------------ ----------- ----------- ------------ ----------- -----------
Return on Ordinary Activities after 165,596 395,167 560,763 245,014 390,894 635,908
Taxation for the financial year
Proposed Dividend (171,600) - (171,600) (163,020) - (163,020)
------------ ----------- ----------- ------------ ----------- -----------
Transfer (from)/to Reserves #(6,004) #395,167 #389,163 #81,994 #390,894 #472,888
======= ======= ======= ======= ======= =======
Basic and Diluted Return per
Ordinary Share 2.509p 5.987p 8.496p 3.712p 5.923p 9.635p
Balance Sheets as at 31st December, 2002
2002 2001
Group Company Group Company
# # # #
FIXED ASSETS
Investments 5,772,637 5,773,637 5,087,374 5,088,374
----------------- ----------------- ----------------- -----------------
CURRENT ASSETS
Property Stock 1,599,850 - 1,599,850 -
Securities Dealing Stock 135,309 - 52,416 -
Debtors 29,163 528,559 12,087 271,481
Cash at Bank 202,509 202,509 733,053 733,053
----------------- ----------------- ----------------- -----------------
1,966,831 731,068 2,397,406 1,004,534
CREDITORS
Amounts falling due within one year (1,197,841) (191,000) (282,316) (174,932)
----------------- ----------------- ----------------- -----------------
NET CURRENT ASSETS 768,990 540,068 2,115,090 829,602
----------------- ----------------- ----------------- -----------------
TOTAL ASSETS LESS CURRENT LIABILITIES 6,541,627 6,313,705 7,202,464 5,917,976
CREDITORS
Amounts falling due after more than one year - - (1,050,000) -
----------------- ----------------- ----------------- -----------------
NET ASSETS #6,541,627 #6,313,705 #6,152,464 #5,917,976
========== ========== ========== ==========
CAPITAL AND RESERVES
Called up Share Capital 330,000 330,000 330,000 330,000
Share Premium Account 229,864 229,864 229,864 229,864
Other Non Distributable Reserves 5,740,495 5,740,495 5,345,328 5,345,328
Revenue Reserve 241,268 13,346 247,272 12,784
----------------- ----------------- ----------------- -----------------
EQUITY SHAREHOLDERS' FUNDS #6,541,627 #6,313,705 #6,152,464 #5,917,976
========== ========== ========== ==========
BASIC AND DILUTED NET ASSET VALUE PER SHARE 99.115p* 95.662p 93.219p 89.666p
*Net Assets per Share based on Directors value of property stock increases to 104.95p.
Consolidated Cash Flow Statement for the year ended 31st December, 2002
2002 2001
# # # #
Net Cash Inflow from Operating Activities 311,424 341,932
Returns on Investments and Servicing of Finance
Interest Received 13,534 22,012
Interest Paid (73,991) (96,053)
-------------- --------------
(60,457) (74,041)
Taxation
Corporation Tax Paid (50,266) (20,283)
Capital Expenditure and Financial Investment
Disposal of Investments 228,368 121,000
Acquisition of Investments (518,464) (2,000)
-------------- --------------
(290,096) 119,000
-------------- --------------
(89,395) 366,608
Equity Dividend Paid (163,020) (155,100)
-------------- --------------
(252,415) 211,508
Management of Liquid Resources
Movement in Dealing Stock (178,129) 146,870
Financing
Loan repayment (100,000) -
-------------- --------------
(Decrease)/Increase in Cash #(530,544) #358,378
======== ========
The financial information set out above does not constitute the Company's
statutory Financial Statements for the years ended 31st December 2002 or 2001
but is derived from those Financial Statements. Statutory Financial Statements
for 2001 have been delivered to the registrar of companies, and those for 2002
will be delivered following the Company's annual general meeting. The auditors
have reported on those Financial Statements; their reports were unqualified and
did not contain statements under section 237 (2) or (3) of the Companies Act
1985.
The Dividend will be paid on 8th April, 2003, to those persons who are
registered Shareholders on 21st March, 2003.
The Annual General Meeting will be held at 77, South Audley Street, London, W1K
1EE on 19th March, 2003, at 11.00 a.m.
Copies of the Report and Financial Statements are being sent to all Shareholders
and will be available at the Registered Office: 77, South Audley Street, London,
W1K 1EE.
For further information, please contact:
EVERARD GOODMAN (EXECUTIVE CHAIRMAN) OR ADAM COHEN (CORPORATE AFFAIRS) ON 020
7355 3000.
14th February, 2003
Anil Thapar, F.C.C.A.
Company Secretary
This information is provided by RNS
The company news service from the London Stock Exchange
END
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