TIDMPNS
RNS Number : 0024L
Panther Securities PLC
28 September 2016
PANTHER SECURITIES PLC
Panther Securities PLC has today announced its interim results
for the six months ended 30 June 2016.
For further information contact:
Tel: 01707
Panther Securities plc 667300
Andrew Perloff/ Simon Peters
Allenby Capital Limited (Nomad Tel: 020
and Joint Broker) 3328 5656
David Worlidge
Capital Access Group (Financial Tel: 020
PR) 3763 3400
Simon Courtenay / Jessica Bradford
CHAIRMAN'S STATEMENT
I am pleased to report our results for the six months ending 30
June 2016, which although it shows a loss of GBP4,880,000 (after a
tax credit of GBP1,747,000), obscures the progress of the company.
This is due to the inclusion of nearly an GBP8 million increase in
our swap liability compared to a GBP2.75 million reduction last
year. The volatility in the valuations of financial derivatives is
notorious for its sudden changes, which can be due to practically
any world event or political pronouncements. It is, however, a
non-cash item.
Our rents receivable during the current period amount to
GBP6,333,000 compared to GBP6,463,000 for the same period last year
(i.e. 30 June 2015). This decrease was due to the reduction in
income after the sale of the Wembley and Sutton properties. There
was also some loss of rental from two Beales stores due to their
CVA and also, loss of income from tenants vacating The Quadrangle,
Glasgow where we have plans to obtain permitted development rights
for a residential scheme for this property.
I am, however, hopeful that the full year's figures will redress
this hiccup in an ever rising rent roll which is, of course, the
bread and butter of our business. This loss of income will be
substantially rebalanced by our acquisition of Lord Street
Properties (Southport) Limited, where we only benefited from one
quarter's rent in these figures.
DISPOSALS
Old Inn House, Sutton
In January, we completed the sale of the entire upper part of
Old Inn House for GBP3,900,000, which comprised of 18,000 sq ft of
offices. We sold the entire freehold building but retained the
ground floor and part basement on a 999 year lease at a peppercorn
as this part of the property produces GBP129,000 pa and with
further growth potential, it being in a prime position in Sutton
High Street. A substantial part of the increase in value was
reflected in the last year's revaluation, but it still produced a
profit of GBP350,000 over the revalued figure.
Queens Road, Southend
This was sold for GBP1,050,000, which was a good price for this
freehold long-term vacant and non-income producing property.
Sparkbrook, Birmingham
In April, we sold a cleared site in Sparkbrook for GBP500,000,
which was non-income producing and was equal to its December 2015
revalued figures, although much higher than its original cost some
years ago.
Coatbridge, Scotland
This freehold property is unconnected to our main larger holding
in Coatbridge and came with our purchase of Eurocity Properties
many years ago. Although this property was vacant, it was under
offer for letting but unfortunately was seriously damaged by fire
in August 2015, which resulted in us receiving insurance claim
proceeds of GBP476,000 which approximated to its book value. Of
course, we still own the site's freehold, which has some value that
we hope to be able to realise.
LORD STREET PROPERTIES (SOUTHPORT) LTD
I announced in last year's accounts the acquisition of this
company under Post Balance Sheet Events in reasonable detail and
so, I will only repeat the basic details.
This family company was established over 100 years ago to own
and operate Broadbents Department Store. Subsequently, it acquired
Wayfarers Arcade, the best arcade in Southport and possibly in
northern England.
The total freehold site is about two acres comprising 75,000 sq
ft of retail space with two car parks at the rear of the site. The
major part is now occupied by Beales (about 40,000 sq ft) who
acquired the trading business some years ago and currently, is one
of their profitable stores. The Arcade contains 48 units of which
only 11 are still vacant.
The property produces approximately GBP580,000 pa with potential
for increases, when fully let.
The cost of this Company, which had no debt, was GBP4,538,000
including acquisition costs. This was purchased out of our existing
cash resources but was subsequently charged under our loan
facilities.
DEVELOPMENT PROGRESS
Holloway Head, Birmingham
Having received full and detailed planning permission for this
site to include the Girl Guides building, we are still awaiting a
proposal for lease extension on two sections of the site where the
freeholder is Birmingham City Council and we hold 100 year leases
at fixed ground rents, one subject to slight ground rent reviews.
We had a meeting with them and their agents about six months ago
and expect the council to be able to provide a proposal soon!!
Perhaps Birmingham is the only conurbation in England that does
not have a housing shortage.
However, we have had a number of approaches to purchase the
entire development site. If a sale took place, due to the strong
interest, it could be at a significant increase over book
value.
Bruce Grove, Wickford
The planning details have been amended which could enable the
scheme to start prior to acquisition of the adjoining owner's site
and them being re-housed. This should enable us to sell the site
sooner rather than later.
Swindon
A planning application to redevelop our market building into a
modern restaurant and leisure scheme was submitted and recommended
for approval by the Planning Officers, who agreed it complied with
all the town planning requirements. It was, however, turned down by
the committee!! We have appealed against this decision and as a
separate matter are currently producing a bigger and possibly more
profitable scheme to include a multi-storey block of residential
units above the former market building to be submitted for
planning.
TENANT ACTIVITY DURING THE HALF YEAR PERIODING 30(th) JUNE
2016
During this period we gained 69 new tenants (30 residential and
39 commercial) producing GBP1,068,000. We lost 70 tenants (29
residential and 41 commercial) producing GBP917,000. The net effect
results in an extra GBP151,000 in rent receivable.
BUSINESS RATES
The new commercial property rating values for April 2015 will be
announced shortly and I am cynically expecting that they will be
deliberately higher than a fair market assessment would produce.
However, if one's rateable value is considered too high, one can of
course appeal against its valuation, but this is a difficult
process and requires the help of experts.
Previously, rate changes were phased in over a few years, for
both those that have increases and also those that have reductions.
It will be remarkably unfair if they once again utilise this
system, as those that should have reductions have already paid over
the odds for two years because of the delayed revaluation by
government dictat.
A sensible proposal would also be to reduce vacant rate charges
to 25% and all properties awaiting planning permission have nil
rates payable if vacant and awaiting development, which may
encourage Local Authorities to move a little faster than the
snail's pace at which they currently proceed.
We have, today, been advised by one of the leading business rate
consultants that, in their opinion, "firms are set to overpay
millions of pounds under the latest government proposals".
"Proposed government changes will virtually outlaw most appeals
in England, leaving most businesses with no means of challenging
their assessments".
"If passed, regulations will grant power to dismiss appeals,
which fall within the bounds of reasonable professional judgement
of the Valuation Officer. There is no definition of what reasonable
professional judgement is".
If approved, this legislation will be one of the most
disgraceful abuses of the system from this new government team, and
tantamount to deceit.
POLITICAL DONATIONS
At our AGM on 15 June, the resolution to donate GBP25,000 to the
UK Independence Party was passed without as much dissent as
usual.
I like to think that our last minute donation helped to get the
message across, producing one of the most dramatic results our
voting system has seen in many years. Whilst our government's
unpreparedness is not unusual, in due course I believe, we will see
long term change to the benefit of the UK.
DIVIDS
An interim dividend of 3p per share will be paid on 29 November
2016 (ex-dividend on 10 November 2016) and we expect to be able to
recommend to pay a further final dividend of 9p per share next year
after our Annual General Meeting.
FINANCE RENEWAL
On 19 April 2016, we completed the renewal of our GBP75 million
joint facility with HSBC and Santander for a further 5 year term.
This loan also gives us the option of drawing a further GBP10
million with bank approval. In total, we potentially have an
additional GBP15 million extra purchasing capacity plus our cash
balances. The loan is better in most aspects than before including
keener margins, lower arrangement and non-utilisation fees.
PROSPECTS
I have long expressed the view that our wide spread of
properties, by location, use, size and range of covenants with a
rent roll that easily covers our interest payments, even at the
high rates fixed by our swaps, management costs and dividends,
justifies my usual optimism.
In the meantime, as an entrepreneurial company, we hope to take
advantage of any of the uncertainties in the market place that may
occur.
However in the future, I look forward to the better times that
will flow from being a more independent country, with significant
less red tape and an export-led revival in manufacturing that will
lead to greater requirement for space.
Andrew S Perloff
Chairman 27 September 2016
CHAIRMAN'S RAMBLINGS
EXTRA! EXTRA!
READ ALL ABOUT IT!
Billionaire leaves thousands of employees in the lurch!
"After over 3 years at the boatyard, the magnificent GBP100
million super yacht has finally been delivered to Knight of the
Realm and ex-owner of a huge store group. He then set off to enjoy
a lengthy and hedonistic holiday around the Mediterranean with
GBP450 million leaving 11,000 widows and orphans jobless and 20,000
pensioners impoverished."
This was the implicit story in practically all of our national
newspapers, every single one gave a similar but ludicrously biased
and deliberately inaccurate story about the recent demise of the
much loved retail institution - the British Home Stores.
The furore that the press created gave the opportunity for our
parliamentarians to see that there was some political capital to be
made from this retail and human financial disaster. With
uncharacteristic speed, a select committee was quickly assembled to
investigate the matter.
When its findings were eventually published, it was soon
apparent that it was not easily understandable - indeed I had to
read it several times. I did, however, persevere and after other
research, I now offer my take on the matter.
British Home Stores was founded in 1928, by a group of American
investors to trade in the United Kingdom after they saw the success
of Mr Woolworth and his sixpenny stores but their view was they
should bring a higher quality selection of goods to the British
public.
For the next 72 years it was a success, becoming a familiar and
trusted presence in high streets throughout the country, owning or
occupying large, prestigious buildings in the finest positions in
all major towns.
British Home Stores quickly became part of the fabric of retail
life, not only for its army of loyal customers, but also for the
many thousands of employees who enjoyed secure, fairly paid
long-term jobs with pensions attached, which created a loyal,
long-term family of staff.
The world, however, changes and sometime towards the middle of
the 1990s, during a time of take-over frenzy, the British Home
Stores became absorbed into a conglomerate, which was then at the
apex of its expansion. In due course, however, this group would
suffer heavy losses and unfortunately the British Home Stores was a
major part of the cause.
The British Home Stores had substantial assets and thus,
Storehouse Plc was able to obtain GBP200 million from its
purchaser, Philip Green & Associates in May 2000. In that year,
the British Home Stores lost over GBP40 million but under its new
ownership, for the subsequent eight full years, it made profits
ranging from GBP18 million to GBP70 million per year. Most people
who understand business would consider this a remarkable
achievement, especially in light of the fact that its turnover
remained flat.
Obviously something drastic must have happened after then - but
what?
From 2009 onwards, the British Home Stores started making
substantial losses and it eventually became clear to Philip Green
Enterprises that this company was dragging down the rest of its
otherwise successful group.
In March 2015, after six years of heavy losses, it was sold for
GBP1 to Retail Acquisitions Ltd, whose owner's CV was more Arthur
Daly in Minder than Gordon Gekko in Wall Street.
It is not unusual for a successful group to sell a loss making
subsidiary for nil consideration or even hand over a substantial
dowry to a suitor; the suitor normally has more money, more success
and experience or a similar business with which it can be merged to
great advantage. It was patently obvious none of these existed.
Nevertheless, the ability to place GBP35 million with the
purchaser's solicitors is not to be sneezed at.
To an outsider or with hindsight, it was obvious that the
British Home Stores was now in the hands of the vultures and its
death was imminent and indeed, just over a year later, this
treasured retail giant died.
At that time, the British Home Stores had 11,000 employees and
20,000 current and future pensioners to differing degrees reliant
on its survival. This corporate failure was indeed a sad event for
thousands of families and the press, quite rightly, started to
investigate the stories.
This naturally had all the ingredients of a top story. The
former owner was a billionaire, knighted for his services to the
retail industry and who was just about to take delivery of his
third mega yacht, which had reportedly cost GBP100 million. A man
who had been feted by the press and government for many years,
basking in the limelight, frequently photographed at all top events
surrounded by celebrities.
With an eye on circulation, the press realised they had their
ideal villain to parade before the increasingly outraged multitude
and like Nero 2000 years ago - throwing sometimes innocent people
to the lions always provided great entertainment for the masses.
The press did all they could to stir up feelings of resentment,
anger, jealousy and fury at allegedly being cheated, knowing full
well that these type of stories sold newspapers.
Every journalist had a say; from those who had never even bought
a skimpy t-shirt from Top Shop to experienced financial
journalists, who had a reasonable understanding of the financial
and business world. They were all able to carefully arrange the
facts to discredit the billionaire they had previously placed upon
a pedestal.
In their entirety, the press reports were deliberately
misreporting figures and facts and timelines (i.e. reporting
payment of big dividends and missing out the fact they were paid 10
years before the company started to fail and that substantial
financial help was given when it was needed at a later date) and
other important factors in the death of this institution. The press
knew they could sell more papers if they had a rich, wicked villain
to blame.
It was not surprising that with enormous public interest created
by the excessive zeal of the press that politicians could see they
could make some political capital out of this event and swiftly
appointed a select committee to investigate.
This select committee had eleven members of the Work &
Pensions Committee with ten staff to assist. There were in addition
eleven members of the Business Innovation and Skills Committee
assisted by seven staff.
Heading the committee was Frank Field, the Chairman of the Work
& Pensions Committee and probably the only member known to the
public. He seemed to make the most of the public attention (and I
wish him success with his newly published book). He has had a long
but not particularly spectacular career in politics. He is said to
be an honourable person and the other twenty one members all being
MPs, we must assume they are also all honourable people.
However, their honour is not the question. Are all, or any of
them, competent to investigate a huge retail business? THAT IS THE
QUESTION!!
I ask this, because a brief glance at all twenty two MP
committee members' history, appears to show none had ever been in
business for themselves or indeed ever worked for a commercial
trading business or had any sort of background experience in how a
business can be run. Having read the report twice, I am not
surprised that these unknown unknowns produced such an unfair and
biased report that showed how little knowledge they had of why the
business failed. Surprisingly, however, hidden away in the report
there are some gems of information and suggestions, which may give
us hope for the future. If they are not resorting to Orwellian
speech in their final paragraphs i.e:-
Report para 174 "Its lessons merit broader consideration of the
framework in which companies operate. We will do so from a
pro-capitalist perspective". SOME HOPES!!
Report para 176 "It is equally important, however, that a
balance is found to enable otherwise viable companies to continue
to operate. The jobs of those currently in employment are
inevitably in some competition with the pension entitlements of
their forebears". SOMEONE HAS TO LOSE OUT, SO DON'T HOLD YOUR
BREATH!!
If I had produced the report, I would not have failed to give
the following a detailed mention.
Obviously, the main problem is the pension fund shortfall, so I
will start with this.
Pensions were first created for civil servants in about 1880 (of
course they would be first) and by 1920-30s by paternalistic
businesses, as an added payment to staff to encourage long term
loyalty to their employers. Monies were set aside and invested
separately from the company's own funds, so that the natural up and
down cycles and sometimes failure of business life would not lose
the savings of the employees. The pension payments and amounts were
PROMISES but could be adjusted if the parent company had severe
problems that jeopardised the very existence of the enterprise.
Originally, pension fund money was nearly always invested in
government securities for safety, although it produced lower
returns than equities or property (but much higher than current
gilt yields). Sometime in the 1950s, a fund manager, Mr Ross Goobey
of the Imperial Tobacco pension fund, decided that equities and
property would produce better long term returns for its pensioners.
It did so in spectacular fashion and thus, the cult of "the equity"
was born.
In the 1980s, most pension funds were sitting on considerable
surplus funds beyond their actuarially calculated needs and were
not too troubled, when the government of its day, brought in
pensions bills as acts of Parliament that changed a slightly
flexible promised pension to strictly inflexible contractual
obligations.
Most pension funds could survive this slow motion time bomb but
in 1997, Gordon Brown removed pension funds tax free status on
dividend income and collectively, they lost income of GBP5 billion
per year, which they had previously been able to reclaim. This was
a capital value at that time of about GBP100 billion and allowing
for increases in dividends would be GBP6 billion per annum today
and due to the contrived reduction in interest rates since 2008
would probably have an actuarial capital value of GBP200
billion.
As usual, the government had consulted specialists, then despite
the experts' genuine concerns expressed to them, took no
notice.
These concerns now bring me to a shortened relevant story of my
own.
55 years ago, soon after I first started work in an estate
agents' office, I was advised to go to a night school for
surveyors.
I had to buy some course study books and the one I remember best
was called Parry's Valuation Tables. This book had numerous tables
of valuations for property freehold/leasehold, allowing for tax at
different rates etc. It also had a few pages on life expectancy for
men and women for that time. It showed I would make it to my early
seventies. I was seventeen at that time and, as far as I was
concerned, this information was a load of useless tosh.
However, fast forward thirty five years when I became a
beneficiary and executor of the last of my uncles. He had left a
substantial estate to me and three other relatives, one older and
two much younger than me. We were to have the income for life and
then, as we each popped off, six charities would receive our share
of the capital. It transpired that this arrangement suited neither
the relatives nor any of the charities - everyone wanted their
share of the pot immediately. I asked the largest charitable
beneficiary to choose an actuary firm acceptable to all the
charities to value the respective interests, which they did and a
scheme of rearrangement for the estate was entered into acceptable
to all parties.
As always, my personal stories seem to go slightly off kilter to
my main ramblings, but not in this case, as luckily the actuaries
were not using my 35 years old Parry's tables but up to date
figures.
They gave me an extra 10 years of life. Was I happy to receive
this news!!! Now, of course, you will all realise it was not just
me who received the benefit of this actuarial life enhancement but
on average the whole of the UK population. Life expectancy has
improved even more in the 20 years since my story, (a further 5
years)!
Pension funds were mostly set up when people survived, maybe 6
to 10 years after retirement, now it is probably 15-25 years. It is
pretty obvious the pension pots need to be much larger.
In 2008, a severe banking crisis came along and forced the
government to create extra money and reduce interest rates to
practically nil. Because pension funds are forced to invest most of
their funds in government securities, which now have the lowest
interest rates ever known in this country, the calculations of the
capital required to provide for the pension commitments thus rises
considerably.
Agatha Christie's favourite detective, Hercule Poirot, would
often start his investigations by looking to see who benefits most
from a crime. With this 8 year hiatus in interest rate movement
from 1/2 %, it is most definitely our government and secondly, the
banks who have the most benefits.
If interest rates rose to 2%, which to me seems a more realistic
figure for the current state of the UK economy, most pension funds
would see their deficits melt away.
Not apparently mentioned in the report was the fact that the
British Home Stores pension fund has over GBP500,000,000 set aside
for its pensioners. Nor that between 2013 & 2014, the rate of
return it expected to receive on its investments, halved from 6% to
3% p.a., which would have increased the deficit considerably.
The next area of concern to me, hardly mentioned in the select
committee report, is business rates. I understand that the British
Home Stores was paying about GBP80 million per year in business
rates. This GBP80 million was paid whether they made a profit or
not and of course, they failed to make a profit for their last six
years. This disastrous scenario was exacerbated by a government
decree by delaying the revaluation of the rateable values for two
years from 2015 to 2017. This property tax was equivalent to
GBP16,000 pa for each full time job at BHS.
In its wisdom recently, again, by government decree, the minimum
wage was increased considerably. This did not help the future
planning at BHS and would make any successful sale of the business
less likely.
Happening over the last 10 years or so, one further tsunami of
adversity to the British Home Stores, was the rapid expansion of
the internet, which allowed new companies to sell direct to the
consumer, products at lower prices than retailers. Retailers were
burdened by high shop rents, higher labour costs and of course, an
unyielding heavy property tax on their necessary use of shops from
which to sell their goods and I repeat a heavy tax, whether they
make a profit or not.
The autopsy on the death of this much loved retailer will, if
properly conducted, come to the conclusion the main culprit is our
chosen government of the day by their:
1. Changing the pension funds flexibility under times of stress.
2. When the funds were investing successfully and were
cautiously overfunded taking away a major part of their income (tax
credit refund).
3. Charging an outdated and disproportionate property tax on
retailers, without allowing any concession for
non-profitability.
4. Failing to see what a devastating effect the internet market
selling was having on the UK land based retail industry and thus,
failing to make any tax adjustments to compensate.
5. Encouraging the Bank of England to keep interest rates at
virtually nil for three years or more, longer than necessary. This
will make pension funds demand more from their employer, thereby
restricting funds for investment in the trading company.
6. Failing to allow adjustments to the recipient of pension
payments to take some account of peoples much welcomed but extended
life expectancy.
This select committee report has produced much comment on the
last few years of the British Home Stores, most of which is
irrelevant to the death of this institution.
This was part of a business grouping that it should never have
been part of. British Home Stores was dragging the whole group down
and the owner was desperate to dispose of it and floundering in his
efforts to rid himself of this Jonah of a corporation, he was led
into the hands of a former bankrupt, who somehow managed to conjure
up GBP35 million, which was enough to lure the then owner to
proceed further, until the deal probably had to be done.
In the new hands, huge professional fees were extracted, the new
management arranged for themselves to be excessively well paid and
borrowings and deals were done at usurious terms.
That old stalwart of the high street, British Home Stores, was
already a zombie nearly dead on the High Street with the vultures
picking at the formerly plump carcass until its finances ran
out.
REST IN PEACE BRITISH HOME STORES
You, who served this country so well for over 80 years:-
That is until the rapacious capacity of our elected leaders, to
suck ever increasing taxes from successful companies drained your
life blood out of you, our much loved Behemoth.
Perhaps in time governments will learn that there is a limit to
how much taxes companies can bear?
Andrew S Perloff
Chairman 28 September 2016
Panther Securities P.L.C.
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2016
Six
Notes months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Revenue 2 7,222 7,293 14,443
Cost of sales 2 (2,037) (2,372) (3,824)
---------- ----------- ---------------------
Gross profit 5,185 4,921 10,619
Other income 355 270 294
Administrative expenses (2,336) (1,235) (3,540)
---------- ----------- ---------------------
3,204 3,956 7,373
Profit / (loss) on disposal
of investment properties 364 (25) 1,074
Movement in fair value of investment
properties 263 - 3,859
---------- ----------- ---------------------
3,831 3,931 12,306
Finance costs (2,556) (2,620) (5,186)
Investment income 93 16 31
Loss (realised) on the disposal
of available for sale investments
(shares) - (244) (244)
(Impairment of)/ reversal of
impairment of available for
sale investments (shares) (12) 128 -
Movement in derivative financial
liabilities (7,983) 2,747 1,563
(Loss)/ profit before income
tax (6,627) 3,958 8,470
Income tax credit/ (expense) 3 1,747 (1,422) (1,657)
(Loss)/ profit for the period (4,880) 2,536 6,813
========== =========== =====================
Attributable to:
Equity holders of the parent (4,896) 2,541 6,815
Non-controlling interest 16 (5) (2)
---------- ----------- ---------------------
(Loss)/ profit for the period (4,880) 2,536 6,813
---------- ----------- ---------------------
(Loss) / earnings per share
Basic and diluted - continuing
business (27.6) p 14.5 p 38.7p
---------- ----------- ---------------------
Panther Securities P.L.C.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2016
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
(Loss)/ profit for the period (4,880) 2,536 6,813
Other comprehensive income
Items that may be reclassified
subsequently to profit or
loss
Movement in fair value of
available for sale investments
(shares) taken to equity - - 45
Deferred tax relating to movement
in fair value of available
for sale investments (shares)
taken to equity - - (8)
Other comprehensive income
for the period, net of tax - - 37
Total comprehensive income
for the period (4,880) 2,536 6,850
----------- ----------- ------------
Attributable to:
Equity holders of the parent (4,896) 2,541 6,852
Non-controlling interest 16 (5) (2)
(4,880) 2,536 6,850
----------- ----------- ------------
Panther Securities P.L.C.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Company number 293147
As at 30 June 2016
Notes 30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
ASSETS Unaudited Unaudited Audited
Non-current assets
Plant and equipment 86 187 145
Investment property 6 175,623 175,285 176,133
Deferred tax asset 1,810 113 -
Available for sale investments
(shares) 733 818 736
---------- ---------- ------------
178,252 176,403 177,014
Current assets
Inventories (MRG) 116 79 60
Stock properties 991 991 991
Trade and other receivables 3,725 4,937 4,553
Cash and cash equivalents* 6,692 4,905 4,387
---------- ---------- ------------
11,524 10,912 9,991
Total assets 189,776 187,315 187,005
---------- ---------- ------------
EQUITY AND LIABILITIES
Equity attributable to equity
holders of the parent
Capital and reserves
Share capital 4,437 4,372 4,437
Share premium account 5,491 4,692 5,491
Equity shares to be issued - 863 -
Capital redemption reserve 604 604 604
Retained earnings 58,282 62,771 65,485
---------- ---------- ------------
68,814 73,302 76,017
Non-controlling interest 96 77 80
Total equity 68,910 73,379 76,097
---------- ---------- ------------
Non-current liabilities
Long-term borrowings 71,308 72,107 591
Derivative financial liability 30,895 21,728 22,912
Deferred tax liability - - 100
Obligations under finance
leases 6,641 7,037 6,640
---------- ---------- ------------
108,844 100,872 30,243
Current liabilities
Trade and other payables 10,820 10,733 10,663
Accrued dividend payable 532 711 -
Short-term borrowings 140 1,140 69,637
Current tax payable 530 480 365
---------- ---------- ------------
12,022 13,064 80,665
Total liabilities 120,866 113,936 110,908
---------- ---------- ------------
Total equity and liabilities 189,776 187,315 187,005
---------- ---------- ------------
*Of this balance GBP716,000 (30 June 2015: GBP239,000,
31 December 2015: GBP1,110,000) is restricted by the Group's
lenders i.e. it can only be used for purchase of investment
property (or otherwise by agreement).
Panther Securities P.L.C.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2016
Equity
Share Share Shares Capital Retained Total
to be
Capital Premium issued Redemption Earnings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2015
(audited) 4,372 4,692 - 604 61,804 71,472
Total comprehensive
income for the
period - - - - 2,541 2,541
Dividends due - - 863 - (1,574) (711)
-------- -------- -------- ----------- --------- ---------
Balance at 30
June 2015 (unaudited) 4,372 4,692 863 604 62,771 73,302
-------- -------- -------- ----------- --------- ---------
Balance at 1
January 2015
(audited) 4,372 4,692 - 604 61,804 71,472
Total comprehensive
income for the
period - - - - 6,852 6,852
Dividends 65 799 - - (3,171) (2,307)
-------- -------- -------- ----------- --------- ---------
Balance at 1
January 2016
(audited) 4,437 5,491 - 604 65,485 76,017
Total comprehensive
income for the
period - - - - (4,896) (4,896)
Dividends due - - - - (2,307) (2,307)
Balance at 30
June 2016 (unaudited) 4,437 5,491 - 604 58,282 68,814
======== ======== ======== =========== ========= =========
Panther Securities P.L.C.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2016
Notes 30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Cash flows generated from operating
activities
Profit from operating activities 3,204 3,956 7,373
Add: Depreciation charges for
the period 53 51 135
Less: Rent paid treated as interest (262) (272) (520)
Profit before working capital
change 2,995 3,735 6,988
(Increase)/ decrease in inventory (56) (13) 5
Decrease/ (increase) in receivables 828 (92) 292
Increase/ (decrease) in payables 181 (1,165) (1,139)
---------- ---------- ------------
Cash generated from operations 3,948 2,465 6,146
Interest paid (2,139) (2,234) (4,572)
Income tax paid 2 49 (95)
---------- ---------- ------------
Net cash generated from operating
activities 1,811 280 1,479
Cash generated from investing
activities
Purchase of plant and equipment - - (38)
Purchase of investment properties (39) (2,123) (2,224)
Purchase of available for sale
investments (shares) (10) - -
Corporate acquisition (net of
cash received) (4,481) - -
Proceeds from sale of investment
property 5,189 225 4,019
Proceeds from sale of plant and
equipment - 1 -
Proceeds from sale of available
for sale investments (shares) - 244 244
Dividend income received 91 11 23
Interest income received 2 8 8
---------- ---------- ------------
Net cash generated from / (used
in) investing activities from
continuing operations 752 (1,634) 2,032
Financing activities
New loans received 2,000 1,000 1,000
Loan arrangement fees and associated
set up costs (407) - -
Repayments of loans (76) (76) (3,152)
Dividends paid (1,775) - (2,307)
Net cash (used in)/ generated
from financing activities from
continuing operations (258) 924 (4,459)
Net increase/ (decrease) in cash
and cash equivalents 2,305 (430) (948)
Cash and cash equivalents at
the beginning of period 4,387 5,335 5,335
Cash and cash equivalents at
the end of period* 6,692 4,905 4,387
---------- ---------- ------------
*Of this balance GBP716,000 (30 June 2015: GBP239,000, 31
December 2015: GBP1,110,000) is restricted by the Group's lenders
i.e. it can only be used for purchase of investment property (or
otherwise by agreement).
Panther Securities P.L.C.
NOTES TO THE INTERIM FINANCIAL REPORT
for the six months ended 30 June 2016
1. Basis of preparation of interim financial statements
The results for the year ended 31 December 2015 have been
audited whilst the results for the six months ended 30 June 2015
and 30 June 2016 are unaudited.
The financial information set out in this interim financial
report does not constitute statutory accounts as defined in Section
434 of the Companies Act 2006. The Group's statutory accounts for
the year ended 31 December 2015 which were prepared under
International Financial Reporting Standards ("IFRS") as adopted for
use in the European Union, were filed with the Registrar of
Companies. The auditors reported on these accounts, their report
was unqualified and did not include reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report and did not contain any statements under
Section 498 (2) or Section 498 (3) of the Companies Act 2006.
These condensed consolidated interim financial statements are
for the six month period ended 30 June 2016. They have been
prepared using accounting policies consistent with IFRS as adopted
for use in the European Union. IFRS is subject to amendment and
interpretation by the International Accounting Standards Board
("IASB") and the IFRS Interpretations Committee and there is an
ongoing process of review and endorsement by the European
Commission. The financial information has been prepared on the
basis of IFRS that the Board of Directors expect to be applicable
as at 31 December 2016.
There are no new standards, interpretations and amendments,
effective for the first time from 1 January 2016, that have had a
material effect on the financial statements of the Group.
2. Revenue and cost of sales
The Group's main operating segment is investment and dealing in
property and securities. The majority of the revenue, cost of sales
and profit or loss before taxation being generated in the United
Kingdom.
MRG Systems Ltd is an operating business segment whose principal
activity is that of electronic designers, engineers and
consultants. 60% of its revenue arose in the United Kingdom and
100% of its cost of sales.
The split of assets, tax effect and cash flow of each segment is
not shown as these are not material in relation to MRG Systems
Ltd.
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Turnover arose as Unaudited Unaudited Audited
follows:
Rental income 6,333 6,463 12,840
Income from trading
(MRG Systems Ltd) 889 830 1,603
7,222 7,293 14,443
========== ========== ============
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Cost of sales arose Unaudited Unaudited Audited
as follows:
Cost of sales from
rental income 1,694 2,049 3,272
Cost of sales from
trading (MRG Systems
Ltd) 343 323 552
2,037 2,372 3,824
========== ========== ============
3. Income tax expense
The charge for taxation comprises the following:
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Current period UK
corporation tax 163 320 441
Prior period UK corporation
tax - - (91)
---------- ---------- ------------
163 320 350
Current period deferred
tax (1,908) 1,102 1,307
---------- ---------- ------------
Income tax (credit)/
expense for the period (1,745) 1,422 1,657
========== ========== ============
The taxation charge is calculated by applying the Directors'
best estimate of the annual effective tax rate to the profit for
the period. The deferred tax credit during the period primarily
arises due to the fair value loss on the Group's interest rate
swap.
4. Dividends
Amounts recognised as distributions to equity holders in the
period:
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Final dividend for
the year ended 31
December 2014 of
9p (see below) - 1,574 1,574
Interim dividend
for the year ended
31 December 2015
of 9p per share - - 1,597
Special dividend
for the year ended 1,775 - -
31 December 2015
of 10p per share
Final dividend for
the year ended 31 532 - -
December 2015 of
3p per share
2,307 1,547 3,171
========== ========== ============
On 31 July 2015 the final dividend for the year ended 31
December 2014 of 9p per share, had a scrip alternative (see note
8). Pursuant to the scrip dividend 259,634 new ordinary shares were
issued in 2015.
The final dividend of 3p per year for the year ended 31 December
2015 was not paid at the period end (being accrued in these
accounts) and was paid on 5 September 2016.
The Directors have declared an interim dividend of 3p per share
to be paid on 29 November 2016 to shareholders on the register at
11 November 2016 (ex-dividend 10 November 2016).
5. Earnings per ordinary share (basic and diluted)
The calculation of basic and diluted earnings per ordinary share
is based on earnings, after excluding non-controlling interests on
continuing operations, being a loss of GBP4,896,000 (30 June 2015 -
profit of GBP2,541,000 and 31 December 2015 - profit of
GBP6,852,000).
The basic earnings per share is based on the weighted average of
the ordinary shares in existence throughout the period, being
17,746,929 to 30 June 2016 (17,617,112 to 31 December 2015 and
17,502,944 to 30 June 2015). There are no potential shares in
existence for any period therefore diluted and basic earnings per
share are equal.
6. Investment Properties
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Fair value of investment
properties
At 1 January 176,133 173,412 173,412
Additions 4,551 2,123 2,224
Fair value adjustment
on property
held on operating
leases - - (417)
Disposals (5,324) (250) (2,945)
Revaluation increase 263 - 3,859
175,623 175,285 176,133
========== ========== ============
7. Derivative financial instruments
The main risks arising from the Group's financial instruments
are those related to interest rate movements. Whilst there are no
formal procedures for managing exposure to interest rate
fluctuations, the Board continually reviews the situation and makes
decisions accordingly. Hence, the Company will, as far as possible,
enter into fixed interest rate swap arrangements. The purpose of
such transactions is to manage the interest rate risks arising from
the Group's operations and its sources of finance.
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Bank loans Unaudited Rate Unaudited Rate Audited Rate
Interest is charged
as to:
Fixed/ Hedged
HSBC Bank plc* 35,000 7.03% 35,000 7.06% 35,000 7.06%
HSBC Bank plc** 25,000 6.60% 25,000 6.63% 25,000 6.63%
Unamortised loan
arrangement fees (704) (58) -
Floating element
HSBC Bank plc 11,497 12,497 9,497
Natwest Bank plc 654 808 731
---------- ------------ --------
71,447 73,247 70,228
========== ============ ========
Bank loans totalling GBP60,000,000 (2014 - GBP60,000,000) are
fixed using interest rate swaps removing the Group's exposure to
interest rate risk. Other borrowings are arranged at floating
rates, thus exposing the Group to cash flow interest rate risk.
The derivative financial assets and liabilities are designated
as held for trading.
Hedged Rate Duration 30 June 30 June 31 December
amount (without of contract 2016 2015 2015
margin) remaining Fair Fair Fair value
value value
GBP'000 years GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Derivative
Financial
Liability
Interest
rate swap 35,000 5.06% 22.19 (25,530) (17,400) (18,541)
Interest
rate swap 25,000 4.63% 5.42 (5,365) (4,328) (4,371)
------------
(30,895) (21,728) (22,912)
---------- ---------- ------------
Movement in derivative financial
liabilities (7,983) 2,747 1,563
========== ========== ============
* Fixed rate came into effect on 1 September 2008. The rate
includes a blend of 2% and 1.95% margin. The contract includes
mutual breaks, the next one being on 23 December 2019 (and every 5
years thereafter).
** This arrangement came into effect on 1 December 2011 when
HSBC exercised an option to enter the Group into this interest swap
arrangement. The rate includes a blend of 2% and 1.95% margin. This
contract includes a mutual break on the fifth anniversary and its
duration is until 1 December 2021.
Interest rate derivatives are shown at fair value in the
statement of financial position, with charges in fair value taken
to the income statement. Interest rate swaps are classified as
level 2 in the fair value hierarchy specified in IFRS 13.
The vast majority of the derivative financial liabilities are
due in over one year and therefore they have been disclosed as all
due in over one year.
The above fair values are based on quotations from the Group's
banks and Directors' valuation.
Treasury management
The long-term funding of the Group is maintained by three main
methods, all with their own benefits. The Group has equity finance,
has surplus profits and cash flow which can be utilised, and also
has loan facilities with financial institutions. The various
available sources provide the Group with more flexibility in
matching the suitable type of financing to the business activity
and ensure long-term capital requirements are satisfied.
8. Issue of equity/ scrip dividend
As stated in note 4 the final dividend of 9p per share for the
year ended 31 December 2014 was paid on 31 July 2015 and had a
scrip dividend alternative. The last day for electing to take the
scrip alternative was 3 July 2015 and the reference price was
332.5p.
Shareholders holding 9,592,088 Ordinary Shares, representing
54.9% of the issued share capital of the Company, elected to take
the scrip dividend.
Accordingly on 6 August 2015 the Company issued 259,634 new
Ordinary Shares which rank pari passu with the existing issued
ordinary shares of the Company.
No dividends paid since have had a scrip alternative so no
further shares have been or currently intend to be issued.
9. Net asset value per share
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Basic and diluted 388p 413p 428p
========== ========== ============
10. Copies of this report are to be sent to all shareholders and
are available from the Company's registered office at Deneway
House, 88-94 Darkes Lane, Potters Bar, EN6 1AQ and will also be
available for download from our website www.pantherplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QDLFLQKFZBBL
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September 28, 2016 02:00 ET (06:00 GMT)
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