TIDMCDFF
RNS Number : 7595U
Cardiff Property PLC
27 November 2019
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
LEI: 213800GE3FA4C52C1N05
FOR RELEASE 7.00 AM 27 November 2019
THE CARDIFF PROPERTY PLC
(The group, including Campmoss, specialises in property
investment and development in the Thames Valley. The total
portfolio including the jointly controlled Campmoss investment and
development portfolio, valued in excess of GBP30m, is primarily
located to the west of London, close to Heathrow Airport and in
Surrey and Berkshire.)
PRELIMINARY RESULTS FOR THE YEARED 30 SEPTEMBER 2019
Highlights:
2019 2018
Net Assets GBP'000 28,343 27,290
Net Assets Per Share GBP 22.85 21.78
Profit Before Tax GBP'000 1,653 1,114
Earnings Per Share -
Basic and diluted pence 123.1 80.6
Dividend Per Share pence 17.1 16.6
Gearing % Nil Nil
Richard Wollenberg, Chairman, commented:
"The uncertain environment fuelled by political and economic
turbulence has stalled activity in the Thames Valley commercial
property market.
During the year office lettings remained at a low level and as a
consequence rental levels have marginally declined. Office and
retail rents have marginally declined, whilst business units
incorporating a high proportion of industrial space have proved far
more resilient with minor increases in rent being achieved.
Consequently, both developers and investors have been reluctant to
commit towards new commercial property schemes and until confidence
returns this position is likely to continue.
The commercial property investment market remains active with
investors in search of secure income as interest rates remain
low."
For further information:
The Cardiff Property plc Richard Wollenberg 01784 437444
Shore Capital Patrick Castle 020 7468 7923
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
PRELIMINARY RESULTS FOR THE YEARED 30 SEPTEMBER 2019
Chairman's Statement and Property Review
Dear Shareholder,
The uncertain environment fuelled by political and economic
turbulence has stalled activity in the Thames Valley commercial
property market.
During the year office lettings remained at a low level and as a
consequence rental levels have marginally declined. Office and
retail rents have marginally declined, whilst business units
incorporating a high proportion of industrial space have proved far
more resilient with minor increases in rent being achieved.
Consequently, both developers and investors have been reluctant to
commit towards new commercial property schemes and until confidence
returns this position is likely to continue.
The commercial property investment market remains active with
investors in search of secure income as interest rates remain
low.
The Thames Valley retail market continues to be under pressure
as retailers face increasing competition from internet-based users
and the resultant change in shopping habits and delivery of goods
and food. It is encouraging to note that certain towns are
reporting an increase in footfall following investment in their
infrastructure and retail environment. This is particularly
relevant to our assets in Maidenhead and Bracknell.
Sales of new homes in the Thames Valley have suffered from a
general lack of confidence in the market despite being supported by
the ongoing availability of government initiatives, including Help
to Buy and low interest rates. The situation may well change for
the better once uncertainty is out of the way as the supply
imbalance is still evident and consumer demand needs to be
satisfied. Enquiries for new residential lettings are reasonably
active with rents remaining unchanged.
FINANCIAL
For the year to 30 September 2019, the group's profit before tax
was GBP1.65m (2018: GBP1.11m). This figure includes a revaluation
increase of GBP0.022m (2018: GBP0.025m) for the group and a profit
of GBP0.90m (2019: GBP0.34m) in respect of our post tax profit and
pre-dividend share of Campmoss Property Company Limited, our 47.62%
owned joint venture. During the current year Campmoss Property paid
a dividend of which Cardiff's share was GBP0.5m.
Revenue for the year which represented gross rental income,
excluding Campmoss, totalled GBP0.65m (2018: GBP0.65m).
The profit after tax attributable to shareholders for the
financial year was GBP1.54m (2018: GBP1.01m) and the earnings per
share was 123.1p (2018: 80.6p).
At the year-end, the Company's commercial and residential
portfolio was valued by Kempton Carr Croft and Nevin & Wells,
totalling GBP5.96m (2018: GBP5.93m). This value excludes own use
freehold property, which is included under property, plant and
equipment in the balance sheet and held at valuation.
Property when completed and held for re-sale is held as stock at
the lower of cost or net realisable value. At the year-end this
represented commercial property at The Windsor Business Centre.
The group's total property portfolio, including the Campmoss
investment and development portfolio, was valued at GBP30.0m (2018:
GBP26.8m). The company's share of the net assets of Campmoss was
GBP15.6m (2018: GBP15.2m). During the year Campmoss was successful
in receiving two planning approvals which have contributed to the
uplift in the carrying value of this investment.
The group's net assets as at the year-end were GBP28.34m (2018:
GBP27.29m) equivalent to GBP22.85 per share (2018: GBP21.78) an
increase of 4.9% over the year (2018: 2.5%). The group, including
Campmoss, has adequate financial facilities and resources to
complete works in progress and the proposed development programme.
Cash balances are held on short term deposit. At the year-end the
company had nil gearing (2018: nil). During the year the company
purchased and cancelled 12,567 (2018: 10,809) ordinary shares at a
total cost of GBP220,062 (2018: GBP194,175).
The company may hold in treasury any of its own shares
purchased. This gives the company the ability to reissue treasury
shares and provides greater flexibility in the management of its
capital base. Any shares purchased by the company not held in
treasury will be cancelled and the number of shares in issue
reduced accordingly. The company intends to continue its policy of
purchasing its own shares, whether to be held in treasury or to be
cancelled, and a resolution renewing the directors' authority will
be placed before the forthcoming Annual General Meeting on 16
January 2020. This authority will only be exercised in
circumstances where the directors regard such purchases to be in
the best interests of shareholders as a whole and is subject to the
waiver under Rule 9 of the Takeover Code being approved by
shareholders as set out in the document accompanying this report.
Full details of the Rule 9 Waiver are set out in the document
accompanying this report and are also available on the company's
website www.cardiff-property.com.
Current IFRS accounting recommends that deferred tax is
chargeable on the difference between the indexed cost of properties
and quoted investments and their current market value. However,
IFRS accounting does not require the same treatment in respect of
the group's unquoted investment in Campmoss Property, our 47.62%
owned joint venture. The investment in Campmoss is a substantial
part of the company's net assets and, for indicative purposes, a
disposal of this investment based on the value in the company's
balance sheet at the year-end would realise a tax liability of
GBP2.65m (2018: GBP2.58m) equivalent to GBP2.14 (2018: GBP2.06) per
share calculated using a tax rate of 17%. This information is
provided to shareholders as an additional non-statutory
disclosure.
DIVID
The directors recommend a final dividend of 12.5p per share
(2018: 12.2p) making a total dividend for the year of 17.1p (2018:
16.6p). an increase of 3.0%. The final dividend will be paid on 14
February 2020 to shareholders on the register at 24 January
2020.
THE PROPERTY PORTFOLIO
The group continues to concentrate its property activities in
the Thames Valley, primarily west of London, close to Heathrow
Airport, and in Surrey and Berkshire.
The group's property portfolio is predominantly let. During the
year Cardiff negotiated a number of new leases achieving a small
overall rental increase and furthered its development plans for
property in Windsor and Cardiff. Campmoss completed the development
of commercial and residential units at Alston House, Bracknell and
achieved two important planning permissions at Britannia Wharf,
Woking and Clivemont House, Maidenhead, details of which are
included in the strategic report. The group is well placed to take
advantage of any upturn in the property market and to react quickly
to opportunities as they arise.
QUOTED INVESTMENTS
The company retains a small portfolio of quoted retail bonds and
equity investments the former providing an attractive medium-term
income stream. The value of the portfolio has marginally decreased
over the year and is in excess of original cost. The equity
investments include Galileo Resources plc and Aquila Services Group
plc, I remain as a non-executive director of both.
RELATIONSHIP AGREEMENT
The company has entered into a written and legally binding
relationship agreement with myself, its controlling shareholder, to
address the requirements of LR9.2.2AD of the Listing Rules.
MANAGEMENT AND TEAM
The group's small management team and joint venture partner have
been extremely busy over the year and I wish to take this
opportunity to thank them for their support and achievements over
the year. The intensive day to day management of the group's
portfolio remains essential in achieving continued success.
OUTLOOK
The group's assets are located in prime Thames Valley locations
which should benefit from a return of confidence in the market. The
next few months will hopefully allow current political and economic
uncertainties to be unravelled and encourage industry and the
property market to move positively forward.
I therefore look forward to reporting to you further at the half
year.
J. Richard Wollenberg
Chairman
26 November 2019
Consolidated Income Statement
FOR THE YEARED 30 SEPTEMBER 2019
2019 2018
GBP'000 GBP'000
Revenue 647 650
Cost of sales (70) (30)
Gross profit 577 620
Administrative expenses (488) (536)
Other operating income 577 671
Operating profit before gains
on investment
properties and other properties 666 755
Surplus/(deficit) on revaluation
of investment properties 22 (25)
Operating profit 688 730
Financial income 61 48
Share of profit of joint
venture 904 336
Profit before taxation 1,653 1,114
Taxation (117) (101)
Profit for the financial
year attributable to equity
holders 1,536 1,013
Earnings per share on profit
for the
financial year - pence
Basic and diluted 123.1 80.6
Dividends
Final 2018 paid 12.2p (2017:
11.5p) 153 145
Interim 2019 paid 4.6p (2018:
4.4p) 57 55
210 200
Final 2019 proposed 12.5p
(2018: 12.2p) 155 153
These results relate entirely to continuing operations. There
were no acquisitions or disposals in either year.
Consolidated statement of comprehensive income and expense
FOR THE YEARED 30 SEPTEMBER 2019
2019 2018
GBP'000 GBP'000
Profit for the financial year 1,536 1,013
Items that may be reclassified subsequently
to profit or loss
Net change in fair value of available
for sale financial assets (43) (185)
Net change in fair value of other
properties (10) (4)
Total comprehensive income and expense
for the year
attributable to the equity holders
of the parent company 1,483 824
Consolidated Balance Sheet
AT 30 SEPTEMBER 2019
2019 2018
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Freehold investment properties 5,995 5,927
Property, plant and equipment 284 298
Investment in joint venture 15,604 15,200
Other financial assets 843 886
22,726 22,311
Current assets
Inventory and work in
progress 674 672
Trade and other receivables 139 142
Held to maturity cash
deposits 3,084 200
Cash and cash equivalents 2,473 4,718
6,370 5,732
Total assets 29,096 28,043
Current liabilities
Trade and other payables (528) (498)
Corporation tax (131) (147)
Non-current liabilities (659) (645)
Deferred tax liability (94) (108)
Total liabilities (753) (753)
Net assets 28,343 27,290
Equity
Called up share capital 248 251
Share premium account 5,076 5,076
Other reserves 2,535 2,585
Investment property revaluation
reserve 1,814 827
Retained earnings 18,670 18,551
Total equity 28,343 27,290
Net assets per share GBP22.85 GBP21.78
Consolidated Cash Flow Statement
FOR THE YEARED 30 SEPTEMBER 2019
2019 2018
GBP'000 GBP'000
Cash flows from operating activities
Profit for the year 1,536 1,013
Adjustments for:
Depreciation 5 5
Financial income (61) (48)
Share of profit of joint venture (904) (336)
Fair value movement on revaluation
of investment properties (22) 25
Taxation 117 101
Cash flows from operations before
changes in working capital 671 760
Acquisition of inventory and work (2) -
in progress
Decrease/(increase) in trade and other
receivables 4 (51)
Increase/(decrease) in trade and other
payables 30 (19)
Cash generated from operations 703 690
Tax paid (147) (112)
Net cash flows from operating activities 556 578
Cash flows from investing activities
Interest received 62 47
Dividend from joint venture 500 -
Acquisition of investments, investment
property, and plant and equipment (49) (168)
(Increase)/decrease in held to maturity
deposits (2,884) 1,170
Net cash flows from investing activities (2,371) 1,049
Cash flows from financing activities
Purchase of own shares (220) (194)
Dividends paid (210) (200)
Net cash flows (used in)/from financing
activities (430) (394)
Net (decrease)/increase in cash and
cash equivalents (2,245) 1,233
Cash and cash equivalents at beginning
of year 4,718 3,485
Cash and cash equivalents at end of
year 2,473 4,718
Consolidated statement of changes in equity
FOR THE YEARED 30 SEPTEMBER 2019
Consolidated statement of changes in equity
Share Share Other Investment Retained Total
capital premium reserves property earnings equity
account revaluation
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2017 253 5,076 2,772 997 17,762 26,860
Profit for the year - - - - 1,013 1,013
Other comprehensive
income - revaluation
of investments
net change in fair
value of own use freehold
property - - (185) - - (185)
- - (4) - - (4)
Transactions with
equity holders
Dividends - - - - (200) (200)
Purchase of own shares (2) - 2 - (194) (194)
Total transactions
with equity holders (2) - 2 - (394) (394)
Transfer on revaluation
of investment properties
- Cardiff - - - (25) 25 -
Transfer on revaluation
of investment properties
- Campmoss - - - (145) 145 -
At 30 September 2018
and
1 October 2018 251 5,076 2,585 827 18,551 27,290
Profit for the year - - - - 1,536 1,536
Other comprehensive
income - revaluation
of investments
net change in fair
value of own use freehold
property - - (43) - - (43)
- - (10) - - (10)
Transactions with
equity holders
Dividends - - - - (210) (210)
Purchase of own shares (3) - 3 - (220) (220)
Total transactions
with equity holders (3) - 3 - (430) (430)
Transfer on revaluation
of investment properties
- Cardiff - - - 22 (22) -
Transfer on revaluation
of investment properties
- Campmoss - - - 965 (965) -
At 30 September 2019 248 5,076 2,535 1,814 18,670 28,343
______ ______ ______ ______ ______ ___ ___
Notes to the Financial Statements
FOR THE YEAR ENDED 30 SEPTEMBER 2019
1. Basis of preparation
The consolidated results for the year ended 30 September 2019
and 2018 are prepared by the group under applicable International
Financial Reporting Standards adopted by the EU ("adopted IFRS")
and applicable law.
The financial information set out above does not constitute the
company's statutory financial statements for the years ended 30
September 2019 or 30 September 2018 but is derived from those
financial statements. Statutory financial statements for 2018 have
been delivered to the Registrar of Companies and those for 2019
will be delivered in due course. The auditor has reported on those
financial statements; their reports were (i) unqualified, (ii) did
not include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006 in respect of the financial statements for
2018 nor 2019.
Going concern
The group has sufficient financial resources to enable it to
continue to trade and to complete the current maintenance and
development programme. As a consequence, the directors believe that
the group is well placed to manage its business risks successfully
despite the current uncertain economic outlook.
After making enquiries, the directors have a reasonable
expectation that the company and the group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the annual report and financial statements.
New, revised or changes to existing financial reporting
standards
Subject to the adoption of the IFRS's available for application
noted below, this announcement is prepared on the basis of the
accounting policies as set out in the most recently published set
of annual financial statements.
IFRS
The group has adopted IFRS 9 - Financial Instruments and IFRS 15
- Revenue from contracts with customers for the year ended 30
September 2019. These standards were applied using the modified
retrospective approach.
IFRS 9 did not result in any measurement changes and did not
result in the recognition of any additional credit losses. The
group elected to present in other comprehensive income subsequent
changes in the fair value of certain equity investments.
IFRS 15 combines several previous standards and sets out a five
step model for the recognition of revenue and establishing
principles for reporting useful information to users of financial
statements about the nature, timing and uncertainty of revenue and
cash flows arising from an entity's contracts with customers. IFRS
15 does not apply to rental income or ground rent, which is in the
scope of IFRS 16 - Leases, but does apply to service charge income,
management fees and trading property disposals. The changes
introduced by IFRS 15 have not had a quantative impact on the
consolidated financial statements of the group.
A number of new standards and amendments to standards and
interpretations have been issued but are not yet effective for the
current accounting period. None are expected to have a material
impact on the consolidated financial statements of the group,
IFRS 16 Leases (Effective date 1 January 2019) is effective for
the next financial year. IFRS 16 removes the distinction between
operating and financial leases, which for lessees will result in
almost all operating leases being brought on balance sheet. The
accounting for lessors, which is applicable to the group, will
however not significantly change and the impact of the consolidated
results will be immaterial.
As a lessor the main impact will be additional qualitative
disclosures about the groups leasing arrangements.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 SEPTEMBER 2019 (continued)
2. Segmental analysis
The group manages its operations in two segments, being property
and other investment and property development. The results of these
segments are regularly reviewed by the board as a basis for the
allocation of resources, in conjunction with individual site
investment appraisals, and to assess their performance. Information
regarding the results and net operating assets for each reportable
segment are set out below:
2019 2018
GBP'000 GBP'000
Revenue (wholly in the United Kingdom):
Property and other investment being
gross rents receivable 647 650
Profit before taxation:
Property and other investment 1,462 416
Property development 191 698
1,653 1,114
Net operating assets:
Assets
Property and other investment 26,600 26,719
Property development 4,486 4,335
Eliminations (1,990) (3,011)
Total assets 29,906 28,043
Liabilities
Property and other investment (2,498) (3,524)
Property development (245) (240)
Eliminations 1,990 3,011
Total liabilities (753) (753)
Net operating assets 28,343 27,290
Of the group's share of the profit in its joint venture of
GBP904,000 (2018: GBP336,000), GBP11,000 (2018: GBP498,000) relates
to property development and a profit of GBP893,000 (2018: loss
GBP162,000) relates to property investment. The interest income of
GBP58,000 (2018: GBP48,000) relates entirely to property
investment. Of the income tax expense of GBP1,000 (2018: income
GBP21,000), GBP1,000 (2018: GBP21,000) relates to property
investment and GBPnil (2018: GBPnil) to property development. Due
to the reportable segments being accounted for in separate legal
entities it is possible to directly allocate the group results and
net assets to the reportable segments.
"Eliminations" relate to inter segment transactions and balances
which cannot be specifically allocated but are eliminated on
consolidation.
3. Earnings per share
Earnings per share has been calculated in accordance with IAS 33
- Earnings Per Share using the profit after tax for the financial
year of GBP1,536,000 (2018: GBP1,013,000) and the weighted average
number of shares as follows:
Weighted average
number of shares
2019 2018
Basic and diluted basis 1,247,277 1,258,139
Financial Calendar
2019 27 November Final results for 2019 announced
2020 16 January Annual General Meeting/General Meeting
23 January Ex-dividend date for the final dividend
24 January Record date for the final dividend
14 February Final dividend to be paid
May Interim results for 2019 to be announced
July Interim dividend for 2019 to be paid
30 September Year end
Directors and Advisers
Directors Auditor
J Richard Wollenberg Crowe U.K. LLP
Chairman and chief executive
Karen L Chandler FCA
Finance director Stockbrokers and financial adviser
Shore Capital
Nigel D Jamieson BSc, FCSI
Independent non-executive director
Secretary Bankers
Karen L Chandler FCA HSBC Bank Plc
Non-executive director of wholly owned Solicitors
subsidiary
First Choice Estates plc Blake Morgan LLP
Derek M Joseph BCom, FCIS Charsley Harrison
Head office Registrar and transfer office
56 Station Road Neville Registrars Ltd
Egham Neville House
Surrey TW20 9LF Steelpark Road
Telephone: 01784 437444 Halesowen
Fax: 01784 439157 B62 8HD
E-mail: webmaster@cardiff-property.com Telephone: 0121 585 1131
Web: www.cardiff-property.com
Registered office Registered number
56 Station Road 00022705
Egham
Surrey TW20 9LF
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END
FR FEIFWMFUSEDF
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