RNS Number:9975P
Property Fund Management plc
22 September 2003
FOR IMMEDIATE RELEASE
22nd September 2003
PROPERTY FUND MANAGEMENT PLC:
INTERIM RESULTS FOR SIX MONTHS TO 30TH JUNE 2003
HIGHLIGHTS
Property Fund Management plc is the only fully quoted property fund manager
specialising in establishing and acting for institutional funds focused on
management intensive industrial property both within the UK and Europe.
* Interim dividend of 2p a share (2002: 1.5p)
* PFM now manages #870m of gross property assets - #492m in
UK and #378m (Euro540m) in Europe
* Acquisition of the 50% in The iO Group Netherlands BV not
already owned
* Subsidiary company established in Denmark to provide base
for future expansion
* Joint venture insurance brokers established with Prudential
Property Investment Managers Limited
-more-
Contacts:
Property Fund Management Plc Glyn Hirsch, Chairman
Tel: 020 7535 1818 Andrew Yates, Finance Director
John Sims, Chief Executive
Baron Phillips Associates Baron Phillips
Tel: 020 7920 3161
PROPERTY FUND MANAGEMENT PLC
CHAIRMAN'S STATEMENT
The six months to 30 June 2003 has seen the Group make further significant
progress in the expansion of funds under management, with new funds underway
which we anticipate closing in the late Autumn 2003 that will have a capacity,
when fully invested, to increase this to over #1.5bn from the current #870m.
With fund acquisition activity planned for the second half of the year, the
Group was expected to break even in the first half, profit before taxation
amounted to #12,000 (2002: #866,000).
In demonstration of our high level of continued confidence we are declaring an
increased interim dividend of 2p per share (2002: 1.5p per share). This will be
payable on 29 October 2003 to shareholders on the register on 3 October 2003.
The Group continues to occupy a unique position in the quoted arena as a
specialised independent property fund manager. We are continuing to benefit from
the increased interest in this asset class for investment. Our asset management
skills are in dealing with complex multi-let property and to date we have
focussed this skill base on the industrial property sub sector. However, as a
result of appetite from our institutional client base, we are starting to look
at other sub sectors to which our skills can be applied.
The creation of Ascent, through the merger of our Thames insurance subsidiary
and the insurance of Prudential Property Investment Managers Limited, gives us a
50% interest in a significant new player in the property insurance industry
insuring approximately #15bn of property by reinstatement value.
Our European asset management platform provides us with a strong market
position. We have further strengthened this position by buying-in the
outstanding 50% of our Netherlands joint venture and establishing a Danish
subsidiary, already with funds under management of approximately #25m, to
provide a base for future expansion in the Oresund region. We are in advanced
negotiations to acquire a majority share of a management company based in
Warsaw, Poland, to serve as platform for a Central European fund initiative.
We are carefully building what we believe can be a substantial business and the
Board is pleased with progress. We look forward to the future with confidence.
Glyn Hirsch
Chairman
22 September 2003
PROPERTY FUND MANAGEMENT PLC
CHIEF EXECUTIVE'S REVIEW
The first half-year has seen substantial progress in the Group's expansion
plans.
The period saw the effective completion of acquisition programmes for our main
UK fund, The Industrial Trust, and our mainland European fund, The European
Industrial Partnership, which took total property assets under management to
#870m, with a further #50m in the process of acquisition.
Business plans for expansion of these activities have been finalised, with
equity investors identified to establish further property under management of
circa #650m for the combined territories. When fully invested total property
under management will exceed #1.5bn. This should be substantially achieved by
the end of 2004.
Ahead of closing these initiatives, we have identified, and are currently
negotiating on, substantial acquisitions for both funds. This rolling programme
is therefore establishing a pipeline of acquisitions, which will stimulate
substantial increases in long term management fee income.
The Industrial Trust portfolio is performing well with returns on the core
properties held for more than 12 months recording a total return of 12.6%
compared with IPD monthly valued fund index of 10.9%. The Trust has also
achieved a level of 8.3% PA distribution on equity.
As the European Industrial Partnership fund (EIP) completes its acquisition
programme, we are pleased to report a 5.8% increase on the value of assets
acquired and a 7.3% surplus on rental levels achieved over ERVs.
This early performance at the property level reflects the asset management
initiatives that have been applied to the acquired portfolio and contributes to
the strong investor interest in the expansion of PFM activities in mainland
Europe, where the iOG brand is starting to become a recognised brand for
occupiers. A base in Denmark and in Poland to cover Central Europe will add
considerable resource for a wider European expansion to add to the Euro540m of
property assets already under management.
The period also saw the UK development fund operations achieve their first site
stabilisations, with occupancy level exceeding 85%, resulting in development
profits fees of approximately #300k with further sites due to contribute in the
second half-year.
We would like to thank our employees, advisers and investors for their high
levels of support during this expansion period.
John Sims
Chief Executive
22 September 2003
PROPERTY FUND MANAGEMENT PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 30 JUNE 2003
Six months Six months Year ended
to 30 June to 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
unaudited unaudited audited
Note
TURNOVER:
Turnover: Group and
share of joint
venture turnover 4 5,597 5,589 12,014
Less: share of joint venture (597) (864) (1,965)
turnover
---------- ------------ -----------
5,000 4,725 10,049
Cost of sales (731) (933) (1,326)
---------- ------------- ------------
GROSS PROFIT 4,269 3,792 8,723
Other operating expenses (4,208) (3,286) (7,249)
---------- ------------ ------------
OPERATING PROFIT 61 506 1,474
Share of operatin
(loss)/profit in joint
ventures (77) 362 476
----------- ------------ -----------
(LOSS)/PROFIT ON (16) 868 1,950
ORDINARY ACTIVITIES BEFORE
FINANCE CHARGES
Net interest receivable
Group 26 (1) 55
Joint ventures 2 (1) (2)
28 (2) 53
--------------- --------------- ---------------
PROFIT ON ORDINARY 12 866 2,003
ACTIVITIES BEFORE
TAXATION
Tax on profit on 5
ordinary activities:
Group (15) (161) (535)
Joint ventures 11 (158) (154)
(4) (319) (689)
--------------- --------------- ---------------
PROFIT ON ORDINARY
ACTIVITIES
AFTER TAXATION 8 547 1,314
Equity minority interests 1 20 20
--------------- --------------- ---------------
PROFIT FOR THE FINANCIAL PERIOD 9 567 1,334
Equity dividends paid and
proposed 6 (422) (310) (723)
--------------- --------------- ---------------
RETAINED (LOSS)/
PROFIT
FOR THE PERIOD (413) 257 611
=============== =============== ===============
EARNINGS PER SHARE
Basic 7 0.04p 3.44p 7.23p
Diluted 7 0.04p 3.36p 7.05p
=============== =============== ===============
PROPERTY FUND MANAGEMENT PLC
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE SIX MONTHS ENDED 30 JUNE 2003
Six months Six months Year ended
to 30 June to 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
unaudited unaudited audited
Profit/(loss) for the financial
period
Group 73 364 1,014
Joint ventures (64) 203 320
--------------- --------------- ---------------
9 567 1,334
Profit on foreign currency 23 - -
translation
--------------- --------------- ---------------
Total gains and losses
recognised sincelast annual
report and financial statements 32 567 1,334
=============== =============== ===============
PROPERTY FUND MANAGEMENT PLC
CONSOLIDATED BALANCE SHEET
AT 30 JUNE 2003
As at As at As at
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
unaudited unaudited audited
Note
FIXED ASSETS
Intangible assets -
Goodwill 8 2,392 56 41
Tangible assets 964 754 755
Investments in joint 9
ventures
Share of gross assets 2,074 1,011 1,486
Share of gross liabilities (1,900) (605) (1,125)
174 406 361
--------------- --------------- ---------------
3,530 1,216 1,157
--------------- --------------- ---------------
CURRENT ASSETS
Debtors 5,631 3,548 4,519
Cash at bank and in 511 4,769 3,858
hand
--------------- --------------- ---------------
6,142 8,317 8,377
CREDITORS: Amounts
falling due within one year (2,799) (3,322) (2,978)
--------------- --------------- ---------------
NET CURRENT ASSETS 3,343 4,995 5,399
--------------- --------------- ---------------
TOTAL ASSETS LESS 6,873 6,211 6556
CURRENT LIABILITIES
PROVISION FOR LIABILITIES AND
CHARGES (34) (43) (34)
EQUITY MINORITY INTERESTS (22) - -
--------------- --------------- ---------------
NET ASSETS 6,817 6,168 6,522
=============== =============== ==============
CAPITAL AND RESERVES
Called-up share capital 10 1,056 1,033 1,033
Share premium account 11 4,793 4,793 4,793
Other reserves 11 755 93 93
Profit and loss account 11 213 249 603
--------------- --------------- ---------------
EQUITY SHAREHOLDERS'
FUNDS 6,817 6,168 6,522
=============== =============== ===============
PROPERTY FUND MANAGEMENT PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2003
Six months Six months Year ended
to 30 June to 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
unaudited unaudited audited
NET CASH INFLOW FROM OPERATING
ACTIVITIES
Operating profit 61 506 1,474
Depreciation and amortisation 231 130 268
Loss/(profit) on disposal of - 2 (5)
fixed assets
(Increase)/decrease in debtors (1,243) (599) (1,570)
(Decrease)/increase in creditors (332) 220 379
--------------- --------------- ---------------
(1,283) 259 546
RETURNS ON INVESTMENT AND
SERVICING OF FINANCE
Interest received 26 17 75
Interest paid - (19) (22)
--------------- --------------- ---------------
RETURNS ON INVESTMENT AND
SERVICING OF FINANCE 26 (2) 53
TAXATION (222) (60) (888)
CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT
Purchase of intangible fixed
assets (75) - -
Purchase of tangible fixed assets (187) (144) (268)
Proceeds from sale of fixed assets - 2 9
--------------- --------------- ---------------
NET CASH OUTFLOW FROM INVESTING
ACTIVITIES (262) (142) (259)
ACQUISITIONS AND DISPOSALS
Purchase of subsidiary
undertakings (635) (50) (50)
Net cash acquired with
subsidiary undertakings 239 - -
Net cash disposed of with
subsidiary undertaking (796) (20) (19)
--------------- --------------- ---------------
NET CASH OUTFLOW FROM
ACQUISITIONS
AND DISPOSALS (1,192) (70) (69)
EQUITY DIVIDENDS PAID (413) (278) (587)
--------------- --------------- ---------------
NET CASH OUTFLOW BEFORE
MANAGEMENT OF LIQUID RESOURCES
AND FINANCING (3,346) (293) (1,204)
MANAGEMENT OF LIQUID RESOURCES
Cash withdrawn/(put) on 1 month
deposit 2,000 - (2,000)
FINANCING
Issue of ordinary share
capital - 6,268 6,268
Repayment of loan - (55) (55)
Flotation costs - (1,203) (1,203)
--------------- --------------- ---------------
(DECREASE)/INCREASE IN CASH IN
THE PERIOD (1,346) 4,717 1,806
=============== =============== ===============
PROPERTY FUND MANAGEMENT PLC
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2003
RECONCILIATION OF NET CASH FLOW
TO NET FUNDS
Six months Six months Year ended
to 30 June to 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
unaudited unaudited audited
(Decrease)/Increase in cash in
the period (1,346) 4,717 1,806
Cash outflow from decrease in
debt and lease financing - 55 55
Cash (inflow)/outflow from
increase in liquid resources (2,000) - 2,000
--------------- --------------- ---------------
Movement in net funds in the
period (3,346) 4,772 3,861
Net funds/(debt)at the beginning
of the period 3,857 (3) (4)
--------------- --------------- ---------------
Net funds at the end of the
period 511 4,769 3,857
=============== =============== ===============
ANALYSIS OF NET FUNDS
Liquid resources - - 2,000
Cash in hand, at bank 522 4,769 1,857
Overdrafts (11) - -
--------------- --------------- ---------------
Net funds at the end of the
period 511 4,769 3,857
=============== =============== ===============
PROPERTY FUND MANAGEMENT PLC
RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS' FUNDS
FOR THE SIX MONTHS ENDED 30 JUNE 2003
Six months Six months Year ended
to 30 June to 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
unaudited unaudited audited
Profit for the financial 9 567 1,334
period
Other recognised gains and
losses relating
to the year (net) 23 - -
--------------- --------------- ---------------
32 567 1,334
Dividends paid and proposed on
equity shares (422) (310) (723)
New shares issued (net of issue
costs) 685 5,066 5,066
--------------- --------------- ---------------
Net addition to shareholders'
funds 295 5,323 5,677
Opening shareholders' funds 6,522 845 845
--------------- --------------- ---------------
Closing shareholders' funds 6,817 6,168 6,522
=============== =============== ===============
PROPERTY FUND MANAGEMENT PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2003
1. BASIS OF PREPARATION
The financial information is prepared on the historical cost basis
and in accordance with applicable UK accounting standards. It comprises
consolidated financial information on two companies under common ownership and
management control, Property Fund Management plc and iO Group Limited. The
results and net assets of these two entities have been aggregated using merger
accounting principles.
2. BASIS OF CONSOLIDATION
Subsidiary undertakings are accounted for from the effective date of
acquisition.
Entities in which the Group holds an interest on a long-term basis
and which are jointly controlled by the Group and one, or more, other ventures
under a contractual arrangement are treated as joint ventures.
3. ACCOUNTING POLICIES
The six months' figures are unaudited and accounting policies are as
stated in the last annual accounts of the Group and are in accordance with the
Accountants' Report on Property Fund Management plc contained in the listing
particulars, dated 16 May 2002.
4. SEGMENTAL INFORMATION
Six months Six months Year ended
to to 30 June 31
30 June 2002 December
2003 #'000 2002
#'000 unaudited #'000
unaudited audited
Turnover by class of
business
Property fund management 4,897 5,054 10,294
Insurance broking 700 535 1,720
--------------- --------------- ---------------
5,597 5,589 12,014
Less share of joint venture
turnover:
Property management (597) (864) (1,965)
--------------- --------------- ---------------
5,000 4,725 10,049
=============== =============== ===============
Turnover by geographical
segment
United Kingdom 3,607 4,178 8,851
Europe 1,990 1,411 3,163
--------------- --------------- ---------------
5,597 5,589 12,014
Less share of joint venture
turnover:
Europe (597) (864) (1,965)
--------------- --------------- ---------------
5,000 4,725 10,049
=============== =============== ===============
5. TAXATION
The tax charge for the six months to 30 June 2003 has been provided
at the estimated rate applicable for the year.
PROPERTY FUND MANAGEMENT PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2003
6. DIVIDENDS PAID AND PROPOSED ON EQUITY SHARES
Six months to Six months to Year ended
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
unaudited unaudited audited
Interim paid - - 310
Interim proposed 422 310 -
Final proposed - - 413
------------- ------------- -------------
422 310 723
============= ============= =============
7. EARNINGS PER SHARE
The calculations for earnings per share are based on the following profits and
numbers of shares:
As at As at As at
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
unaudited unaudited audited
Profit for the financial
period 9 567 1,334
============= ============= =============
Weighted average number of Number of Number of Number of
shares: shares shares shares
For basic earnings per share 20,947,187 16,503,687 18,451,987
Exercise of share options 8,020 354,677 480,408
--------------- --------------- --------------
For diluted earnings per 20,955,207 16,858,364 18,932,395
share
=============== =============== ==============
PROPERTY FUND MANAGEMENT PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2003
8. ACQUISITIONS
On 12 March 2003, the Group acquired for a consideration of up to Euro3.5m the 50%
of The iO Group Netherlands BV not already owned by it. The consideration
consists of an initial payment of Euro1.5m, comprising a cash payment of Euro0.5m and
the issue of 459,501 ordinary shares of 5p each in the Company to the value of
Euro1m and a deferred payment of up to Euro2m dependent on the level of acquisition
fees received by The iO Group Netherlands BV during a period of 36 months from
the date of the agreement. The acquisition has created goodwill of #2,377,255,
which is being amortised over 10 years.
On 27 May 2003, the Group acquired 75.1% of iOG Denmark Aps (a Danish
corporation) for cash of DKK 751,000. The acquisition has created goodwill of
#2,500, which is being amortised over 20 years.
On 30 June 2003, the Group acquired 50% of Ascent Insurance Brokers Limited for
a consideration of #125,000 satisfied by the transfer of the Group's 100%
interest in Thames Insurance Brokers Limited to Ascent Insurance Brokers
Limited.
9. INVESTMENTS IN JOINT VENTURES
As at As at As at
30 June 30 June 31 December
2002
2003 2002 #'000
#'000 #'000 audited
unaudited unaudited
Fixed assets 238 131 165
Current assets 1,836 880 1,321
--------------- --------------- ---------------
Share of gross assets 2,074 1,011 1,486
Liabilities due within one
year (1,900) (605) (1,125)
--------------- --------------- ---------------
Share of net assets 174 406 361
=============== =============== ===============
Net investment at beginning
of period 361 22 22
Additions at cost 125 20 19
Share of retained profit for
the period (232) 364 320
Disposals (80) - -
--------------- --------------- ---------------
Net investment at the end of
period 174 406 361
=============== =============== ===============
10. CALLED-UP SHARE CAPITAL
Date Authorised Allotted, called-up
and fully paid
Number #'000 Number #'000
1 January 2003
Ordinary shares of
5p each 30,000,000 1,500 20,665,394 1,033
12 March 2003
New ordinary shares
issued - - 459,501 23
---------- --------- ----------- -------
30 June 2003
Ordinary shares of
5p each 30,000,000 1,500 21,124,895 1,056
=========== ========= ============ =======
PROPERTY FUND MANAGEMENT PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2003
11. RESERVES
Share premium Merger reserve Profit and loss Total
account
#'000 #'000 #'000 #'000
As at 1 January
2003 4,793 93 603 5,489
Shares issued as
part consideration
forthe acquisition of
50% of The iO Group
Netherlands BV - 662 - 662
Gain on overseas
equity investments - - 23 23
Retained profit for
six months - - (413) (413)
------------ ------------- ---------- ---------
At 30 June 2003 4,793 755 213 5,761
============ ============= ========== =========
12. INTERIM STATEMENT
Copies of this interim statement will be sent to shareholders shortly and will
be available from the Company's head office: Heron Place, 3 George Street,
London W1U 3QG.
INDEPENDENT REVIEW REPORT TO PROPERTY FUND MANAGEMENT PLC
We have been instructed by the company to review the financial information for
the six months ended 30 June 2003, which comprise the Consolidated profit and
loss account, the Consolidated statement of total recognised gains and losses,
the Consolidated balance sheet, the Consolidated cash flow statement and the
related notes. We have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company, for our work,
for this report, or for the conclusions we have formed.
Directors' responsibilities
The interim report, including the financial statements contained therein, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data and based thereon, assessing whether
the accounting policies and presentation have been consistently applied and
adequately disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003.
haysmacintyre Southampton House
Chartered Accountants 317 High Holborn
Registered Auditors London
WC1V 7NL
22 September 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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