TIDMCRF
RNS Number : 0694D
Ciref PLC
25 November 2009
Ciref Plc ("Ciref", "the Group" or "the Company")
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2009
SALIENT FEATURES
* Net loss of GBP39.71m (2008: GBP28.04 loss).
* Losses on property investments of GBP41.69m and interest rate swaps of GBP6.13m,
comprising realised losses of GBP18.64m and unrealised losses of GBP29.18m.
* Profit from core operations increased by 21.9% to GBP6.67m (2008: GBP5.47m).
* Net loss per share of 54.20p (2008: 39.69p loss).
* Earnings per share based on underlying profit from core operations of 9.11p
(2008: 7.74p).
* Strong cash management, with 21.06p or 36.0% of NAV per share in cash.
* Proposed final dividend of 1.31p per share (2008: 2.51p), consistent with the
Group's current target dividend payment ratio.
* NAV per share of 58.43p (2008: 108.65p).
* Favourable restructuring agreed in principle with Aviva for shopping centre
senior debt.
* GBP38m fully placed capital raising announced, conditional on shareholder
approval.
* Redefine Properties to become Ciref's largest shareholder.
* Shareholders asked to support a change of name to Redefine International Plc.
Gavin Tipper, chairman, commented:
"The global banking and credit crisis which began in late 2007 continued to
impact the Group in the year under review. The crisis, which led to the value
and liquidity of many asset classes being severely affected, significantly
impacted the availability of finance for real estate acquisitions and
investment.
Against this backdrop Ciref performed solidly at an operational level and
continues to be managed conservatively, with an emphasis on preserving cash. The
Group remains financially sound despite the significant write-downs in asset
values, the substantial mark to market losses on interest rate swaps and the
demise of its former development joint venture partner, the Modus group."
For further information please contact:
Ciref Plc
+ 27 (0)21 683 3829
Gavin Tipper - Chairman
www.ciref.je
POWERSCOURT
Matthew Fletcher/Karen Le Cannu
+44 (0)207 250 1446
www.powerscourtmedia.com
SINGER CAPITAL MARKETS LIMITED
Nicholas How/Richard Savage
+44 (0)203 205 7500
www.singercm.com
About Ciref Plc
1. Ciref is a property investment and development company which invests in
commercial real estate primarily in the UK and Europe, with a focus on retail
and commercial assets. Ciref's current investments are in the UK, Europe, the
Channel Islands and the British Virgin Islands and it will continue to source
value-enhancing opportunities in these markets.
2. As at 30 September 2009 the portfolio consisted of 25 investments,
including:
-A large integrated town centre redevelopment project;
- Four UK shopping centres;
-A portfolio of 27 Kwik-Fit properties located throughout the UK;
- 22 UK petrol filling stations;
-Office buildings in London and Jersey;
-Five German portfolios which consist of inter alia, shopping centres,
supermarkets, petrol stations and a medical centre; and
- A supermarket and home depot centre in Switzerland.
3. The strategy of the Group comprises four distinct yet complementary
elements: stable income investments; major development projects; value-enhancing
projects and investments in property collective investment vehicles. The
resources of the Group are intended to be allocated across all four elements
with the aim of providing shareholders with a balanced exposure to lower risk,
income-generating assets and assets that have the potential to provide a higher
capital return.
4. The Ciref Group has an experienced board of eight non-executive
directors. Five of the directors are connected to the Investment Manager.
5. Further information on Ciref can be found at www.ciref.je
CHAIRMAN'S STATEMENT
The Global banking and credit crisis which began in late 2007 continued to
impact the Group in the year under review. The crisis, which led to the value
and liquidity of many asset classes being severely affected, significantly
impacted the availability of finance for real estate acquisitions and
investment.
Against this backdrop Ciref performed solidly at an operational level and
continues to be managed conservatively, with an emphasis on preserving cash. The
Group remains financially sound despite the significant write-downs in asset
values, the substantial mark to market losses on interest rate swaps and the
demise of its former development joint venture partner, the Modus Group.
I am pleased to announce a significant capital raising and strengthening of the
relationship with the Company's largest shareholder, Redefine Properties
("Redefine"). The circular which is being released simultaneously with these
results sets out the salient details of the capital raising and the future
strategy of the Company. The board fully supports the larger role being played
by Redefine and looks forward to a long and rewarding relationship.
Operations
At an operating level, the Group produced a profit from core operations of
GBP6.67m (2008: GBP5.47m).
Net earnings were however affected by an aggregate deficit on investment
property valuations, losses on interest rate swap valuations and the write-off
of the investments in Trinity Walk Wakefield, Houndshill Blackpool and Friars
Walk Newport. Full details of the impact of the administration of these
investments and the strategy going forward are set out in the Investment
Manager's review.
The Group's stable income portfolios in both the UK and Europe performed well in
difficult trading conditions. Cash flows were very strong and tenant
delinquencies and voids minimal.
The UK shopping centre portfolio suffered from declining rental levels and
higher vacancy rates but at an operational level, performed to expectation.
Dividends
The Board of Directors has resolved to declare a dividend of 1.31p per share.
This equates to 4.5% of net asset value pro-rated for the half-year period, and
is consistent with the Group's current dividend target payment ratio.
The dividend will be offered to the shareholders as a scrip dividend, with the
ability to elect to receive a cash dividend alternative. Further details
surrounding the terms of the scrip dividend will be set out in a
separate circular and form of election which will be sent to all shareholders in
due course.
The circular for the capital raising contains a proposal by the board to change
the dividend policy to distributing a minimum of 80% of core earnings.
Prospects
After 27 months of declining asset prices, the IPD all property index turned
positive in August 2009. The directors believe that the overwhelming consensus
is that in the UK the worst of the decline in asset prices has passed. In
Europe, both Germany and France appear to have emerged from recession and
positive economic growth looks set to return.
The Company will focus on protecting existing assets and look to make
opportunistic acquisitions where appropriate. The outcome of the enhanced
relationship with Redefine is expected to be beneficial to the future of the
Group.
Gavin Tipper
Chairman
INVESTMENT MANAGER'S REVIEW
The Group owns investments in commercial and retail properties in the UK,
Switzerland, Germany, the Channel Islands and the British Virgin Islands, which
provide sustainable occupancy rates and income flows, together with
opportunities for development and significant value enhancement.
Ciref has an investment management agreement with Corovest Fund Managers Limited
("CFM"), a British Virgin Islands registered and regulated Fund Manager. Under
the agreement with the Group, CFM is responsible for the investment and
management of the Group's assets.
Group Strategy
The Group's strategy is to provide investors with strong investment returns and
a balanced exposure to lower risk income-generating assets and opportunities
that will provide a higher capital return.
This is achieved by acquiring property investments that are selected on the
basis of four distinct yet complementary criteria:
Stable income investments
Part of the resources of the Group are applied to investment in properties that
provide a stable, predictable and low risk income stream and which have limited,
if any, associated development opportunities. The Group will typically only
invest in such properties where there are opportunities to enhance the value of
the investment, for example where the properties are under-rented and where rent
reviews are due, or where yield compression is expected.
Major development projects
The investments that fall into this category provide an opportunity for
considerable redevelopment in which the future post-redevelopment income is
expected to be underpinned by pre-letting major parts of the development to
businesses with strong rental covenants on a long-term basis and from existing
tenants occupying the properties.
These are multi-year projects which generally require high levels of funding and
which may be delayed in difficult markets to reduce risk.
These investments provide the Group with exposure to potentially high return
projects but without being overly speculative in nature.
Value enhancing projects
The projects that fall into this category are smaller properties which can be
converted on a relatively low risk basis to provide premium commercial space.
These projects may also include an element of residential or mixed use
development to enhance the returns.
Investments in property collective investment vehicles
The Group will explore opportunities to invest in property securities when the
value is considered to be superior to that of physical property.
The investments will often be of a strategic nature in which shareholding can be
used to unlock value in underlying property assets.
Portfolio Details
The Group's portfolio consisted of twenty-five investments at 30 September
2009 in a range of fixed and listed property assets located within the UK,
Switzerland, Germany, the Channel Islands and the British Virgin Islands.
Details are set out below;
+----------------------------------+----------+----------------------+-------------+--------+
| NAME |CATEGORY | USE TYPE |VALUE(GBPM) | % |
| | | | | OWNED |
+----------------------------------+----------+----------------------+-------------+--------+
| DELAMERE PLACE, CREWE (UK) | SII/MDP | RETAIL CENTRE | 27.70 | 90.78 |
+----------------------------------+----------+----------------------+-------------+--------+
| BIRCHWOOD SHOPPING CENTRE, | SII/MDP | RETAIL CENTRE | 30.00 | 33.30 |
| WARRINGTON (UK) | | | | |
+----------------------------------+----------+----------------------+-------------+--------+
| WEST ORCHARDS SHOPPING CENTRE, | SII/MDP | RETAIL CENTRE | 41.00 | 81.07 |
| COVENTRY (UK) | | | | |
+----------------------------------+----------+----------------------+-------------+--------+
| TYS OFFICE DEVELOPMENT (BVI) | MDP | OFFICES | 0.59### | 15.00 |
+----------------------------------+----------+----------------------+-------------+--------+
| STREATHAM RETAIL PARADE & | MDP | OFFICE, RETAIL & | 19.18 |100.00 |
| WENTWORTH HOUSE (UK) | | RESIDENTIAL | | |
+----------------------------------+----------+----------------------+-------------+--------+
| BYRON PLACE SHOPPING CENTRE, | SII | RETAIL CENTRE | 21.67 | 50.00 |
| SEAHAM (UK) | | | | |
+----------------------------------+----------+----------------------+-------------+--------+
| KWIK-FIT PORTFOLIO (UK) | SII | MOTOR & ANCILLARY | 13.04 | 84.23 |
+----------------------------------+----------+----------------------+-------------+--------+
| NEWINGTON HOUSE LTD, SOUTHWARK | SII | OFFICE | 9.82 | 76.73 |
| (UK) | | | | |
+----------------------------------+----------+----------------------+-------------+--------+
| MALTHURST PORTFOLIO (UK) | SII | MOTOR & ANCILLARY | 23.70 | 84.00 |
+----------------------------------+----------+----------------------+-------------+--------+
| 98-100 MAIN STREET, BANSTEAD | SII | RETAIL | 1.10 | 71.43 |
| (UK) | | | | |
+----------------------------------+----------+----------------------+-------------+--------+
| 15-17 THE SQUARE, PETERSFIELD | SII | RESIDENTIAL | 0.91 | 60.42 |
| (UK) | | | | |
+----------------------------------+----------+----------------------+-------------+--------+
| 26 THE ESPLANADE, ST HELIER | SII | OFFICES | 23.70 | 50.00 |
| (JERSEY) | | | | |
+----------------------------------+----------+----------------------+-------------+--------+
| CO-OP STORE (SWITZERLAND) | SII | SUPERMARKET & HOME | 17.84# | 80.46 |
| | | DEPOT | | |
+----------------------------------+----------+----------------------+-------------+--------+
| DRINKGERN, LIDL & AACHEN | SII | RETAIL CENTRES | 19.80## | 92.71 |
| PORTFOLIO (GERMANY) | | | | |
+----------------------------------+----------+----------------------+-------------+--------+
| INKSTONE PORTFOLIO (GERMANY) | SII | RETAIL CENTRES | 9.57## | 52.21 |
+----------------------------------+----------+----------------------+-------------+--------+
| BREMENVORDER PORTFOLIO (GERMANY) | SII | RETAIL CENTRES | 4.29## | 92.71 |
+----------------------------------+----------+----------------------+-------------+--------+
| PREMIUM PORTFOLIO (GERMANY) | SII | RETAIL CENTRES | 31.83## |92.71* |
+----------------------------------+----------+----------------------+-------------+--------+
| LINDENHOF PORTFOLIO (GERMANY) | SII | RETAIL CENTRE | 7.76## | 92.71 |
+----------------------------------+----------+----------------------+-------------+--------+
| CHURCHILL COURT, CRAWLEY (UK) | SII/VEP | OFFICES | 20.45 |50.00* |
+----------------------------------+----------+----------------------+-------------+--------+
| PEARL HOUSE, SWANSEA (UK) | VEP | RETAIL & RESIDENTIAL | 2.07 | 50.00 |
+----------------------------------+----------+----------------------+-------------+--------+
| 7-11 HIGH STREET, REIGATE (UK) | VEP | RETAIL & OFFICES, | 2.73 | 61.36 |
| | | RESIDENTIAL | | |
+----------------------------------+----------+----------------------+-------------+--------+
| REGAL WALK, MARGATE (UK) | VEP | RETAIL CENTRE | 10.00 | 25.00 |
+----------------------------------+----------+----------------------+-------------+--------+
| STAFFORD REDEVELOPMENT (UK) | VEP | DEVELOPMENT PROPERTY | 3.82 |84.23* |
+----------------------------------+----------+----------------------+-------------+--------+
| STOCKPORT REDEVELOPMENT (UK) | VEP | DEVELOPMENT PROPERTY | 0.90 |84.23* |
+----------------------------------+----------+----------------------+-------------+--------+
| ALPHA PROPERTY FUND (UK) | PCIV | UNLISTED PROPERTY | 0.15 | 1.04 |
| | | COMPANY | | |
+----------------------------------+----------+----------------------+-------------+--------+
* % ownership of the group which owns 50% of the property
#Functional currency is Swiss Franc (CHF), converted at a year end closing rate
of 1.66CHF:1GBP
##Functional currency is EURO, converted at a year end closing rate of 1.09
EURO:1GBP
### Functional currency is USD, converted at a year end closing rate of 1.60
USD:1GBP
Key:
MDP - Major Development Project
SII - Stable Income Investment
VEP - Value Enhancing Project
PCIV - Property Collective Investment Vehicle
Market Overview
The global banking and credit crisis which started in late 2007 continued to be
the major driving force on international real estate markets during the year
under review.
During the twelve months to 30 September 2009, UK and European property share
prices initially declined dramatically before staging a strong recovery. The
EPRA (European listed property) index fell 47% from October 2008 to July
2009, before recovering by 76% off the trough to finish 6% down on the year.
Physical property was less volatile, being 22% down from October 2008 to the
trough in July 2009. It then recovered 3% to finish the year down 19%.
While central banks continue to maintain interest rates at unprecedented low
levels with very accommodating monetary policies, the consensus is that the
worst of the decline in asset prices has passed. CFM believes that stability is
returning to the UK and European economies; however the concern now is that the
stimulus packages and low interest rate policies of the central banks will lead
to increased inflation. This should be good for property while interest rates
remain low.
The investment manager is being cautious in its outlook and although in
agreement with the view that the worst may be over, it expects any recovery to
be slow and prolonged.
Acquisitions and Disposals
Acquisitions during the period under review were limited to special
opportunities, specifically assets that became available due to the demise of
the Group's former joint venture development partner, and previously contracted
purchases.
United Kingdom
Byron Place Shopping Centre, Seaham ("Byron Place")
A 50% stake in Byron Place was acquired on 27 April 2009. The investment
comprises a circa 42,000 sq ft ASDA food store as well as a further 15 units
totalling 73,000 sq ft of retail space arranged along an enclosed mall. The
acquisition was done at a yield of 6.5%.
Agreement has been reached in principle post year end to acquire the remaining
50% of the investment.
A 25 year debt facility is in place with Aviva Property Finance at an all in
fixed rate of 6.44%.
Delamere Place, Crewe and West Orchards, Coventry
The Group acquired the controlling stakes in these centres through loan
capitalisations. Group shareholdings in the West Orchards and Delamere Place
property owning companies were increased to 99.78% and 99.23% respectively. The
acquisition of these town centre schemes at relatively low cost is expected to
significantly benefit Ciref in the medium to long term following the recent
signs of stabilisation in the UK property market.
Europe
Bremen - Lindenhof
The acquisition of this newly developed shopping centre in Bremen, Germany
for EUR 7.7m was completed in June 2009 (contracts having been exchanged in
April 2008). The centre is anchored by an Aldi supermarket and several other
multi-national tenants, all on ten year leases, accounting for approximately 65%
of the total rental income. The consideration was funded by senior debt
(provided by a local German bank), vendor finance and equity. The acquisition
was purchased at a yield of 7%.
Disposals
The Company's shareholding in Wichford P.L.C. was disposed of during the period
under review.
Update on Development Projects and Major Retail Schemes
Background
In the interim report for the 6 month period to 31 March 2009, it was stated
that the Group's joint venture development partner, Modus, was in discussion
with its bankers regarding its funding facilities.
Unfortunately these discussions were unsuccessful and Modus Ventures Limited
(the holding company of the Modus group) was placed into administration on 29
May 2009.
This exacerbated the already tenuous financial position of the six joint venture
investments owned between Modus and Ciref.The Ciref Board of Directors took the
decision to salvage those JV investments that were considered sound assets with
good prospects going forward and to jettison those assets with high ongoing
capital requirements and return parameters beyond a 3 to 5 year horizon.
Although these projects were attractive and had potentially high returns, the
risk and capital commitments were beyond the reach of the Group.
Update
The following centres have been retained:
* Birchwood Shopping Centre, Warrington
* Delamere Place, Crewe
* West Orchards Shopping Centre, Coventry
As set out above, the Group has increased its shareholding in Delamere Place,
Crewe and West Orchards Shopping Centre to 99.78% and 99.23%, respectively.
Agreement has also been reached in principle post year end to increase the
Group's shareholding in Birchwood Shopping Centre, Warrington to 100% at
notional cost. In addition agreement in principle has been reached with Royal
Bank of Scotland to acquire its mezzanine finance of GBP4.495m for a payment of
GBP85,000.
The companies owning the following centres have been put into administration:
* Trinity Walk, Wakefield
* Houndshill, Blackpool
* Friars Walk, Newport
A concerted effort was made to acquire the Wakefield scheme out of
administration, but the Company was outbid by a major international property
fund. Discussions continue with KPMG, the administrator, in an attempt to
acquire the Blackpool scheme in some form. It is expected that the Newport
property will be acquired by the Newport City Council under its CPO powers. The
development is then expected to be put out to the market in a re-tender. A
decision will be made on whether the Company submits a bid or not once the
Newport City Council's intentions are made clear.
Financial Impact on Ciref
There is no contagion risk to the Group from the administration of these
companies and all equity in the schemes has been fully written-off. The impact
on Ciref of the write-down of these investments was an attributable loss of
GBP19.1m.
Aviva Proposal
An agreement has been reached in principle with Aviva Commercial Finance Limited
("Aviva") to restructure the senior debt on the retained shopping centres
(Birchwood, Delamere Place and West Orchards). In addition The Grand Arcade
Shopping Centre in Wigan will be acquired out of administration with the consent
of Aviva and it is expected that Byron Place, once 100% owned by the Group, will
be included in a single ownership vehicle housing all 5 centres. A portion of
the existing Aviva debt is to be repaid, part through the proceeds of the
proposed Placing and part through an issue of convertible preference shares to
Aviva. Aviva will then be the provider of all the debt to the shopping centre
portfolio on terms considered favourable to the Group.
Details of the preference shares to be issued to Aviva will be announced on RNS
as soon as they have been finalised.
The restructuring is expected to be of significant benefit to the Group in the
medium to long term. The long term (average 25 year) nature of the debt in
itself is considered to be a significant asset to Ciref.
Other Facilities
The financing facilities in 9 of the Group's subsidiary and joint venture
entities have either expired or are due to expire in the next twelve months. In
the case of the facilities which have expired, the Group is at an advanced stage
of negotiations with the providers and the Board is confident that the
facilities will be extended, or that alternative facilities will be obtained, on
terms which are reasonable to the Group. Based on preliminary discussions with
the relevant institutions, the Board is confident that facilities which will
expire in the next twelve months will be successfully renegotiated or replaced.
In assessing the Group's ability to renegotiate facilities, the Board took
account of the existing cash reserves and the Group's ability to inject further
equity into investments where necessary.
If all of the facilities were not successfully renegotiated, the going concern
status of the Group would not be affected. The Board does not believe that there
is a risk of not achieving a favourable outcome to the refinancing.
Interest Rate Swaps
The Group has incurred significant mark to market losses on its interest rate
swaps. This is as a result of the application of IFRS and despite the fact that
much of the Group's borrowings are of high quality and could not be replaced in
the current market at the rates that have been secured.
Strategy
Subject to the proposed Placing proceeding, Redefine is expected to increase its
shareholding from 28.6% to 55.5%. Redefine has also increased (subject to South
African Reserve Bank approval) its stake in the Company's Investment Manager to
76%. As a consequence of these increased shareholdings and to reflect the
enhanced commitment of Redefine to the Company, shareholders are being asked to
support a change in the Company's name to Redefine International Plc.
Redefine is committed to increasing its international exposure and has
undertaken to use Ciref as its sole international investment arm, conditional
upon the Placing and name change taking effect.
Redefine has confirmed to Ciref that it has no specific intentions regarding the
future business of the Company other than to support the Directors' existing
strategy for the Company. Redefine has confirmed to the Directors that,
following the Placing, the intention of Redefine is that the business of the
Company will be continued in substantially the same manner as at present.
Following the Placing, Ciref will continue to have a majority of directors who
will be independent of Redefine. Redefine will conduct all transactions and
relationships with Ciref on an arm's length basis and on a normal commercial
basis and will exercise its voting rights in such a manner that Ciref is capable
of carrying on its business independently.
Following the Placing, the Company intends to seek a secondary listing on the
Johannesburg Stock Exchange ("JSE") in South Africa.
The Board believes a secondary listing on the JSE to be a highly attractive
option for the Company. The following factors are considered to be the major
reasons for Ciref to apply, in due course, to the JSE for a secondary listing
and admission to trading of its ordinary shares on the JSE:-
* to provide an additional source of capital to fund the growth aspirations of
Ciref;
* to enhance potential investors' awareness of Ciref;
* to improve the depth and spread of the shareholder base of Ciref, which the
directors believe should improve liquidity in the trading of its securities;
* to provide South African investors, both institutional and private, with an
opportunity to participate directly in any future income streams and capital
growth of Ciref; and
* to provide investors with an additional market for trading Ciref shares.
Additionally, in terms of the current South African tax legislation, the
secondary listing will result in Ciref's dividends being exempt from South
African income tax for South African resident shareholders.
The Ciref board intends to take all steps it considers necessary to effect the
admission of Ciref to trading on the JSE, which is expected to occur in the
first quarter of 2010.
As part of the exercise to secure the secondary listing on the JSE, the Board
will decide whether to seek to raise further capital. If such further capital is
sought to be raised at that time, the Board expects that this will take place
simultaneously with the secondary listing.
The Board of Ciref has stated that Ciref will be managed conservatively in the
future with the focus on protecting existing assets; while the market is
presenting a number of investment opportunities these will be assessed in
accordance with the current strategy of Ciref and available financing. The
current strategy of Ciref is to provide investors with investment returns and a
balanced exposure to income generating assets, selecting investments based on
criteria which include seeking to invest in stable income investments, major
development projects, value enhancing projects and property collective
investment vehicles.
FINANCIAL REVIEW
The 2009 final results reflect an operating gain of GBP6.67m or 9.11p per share.
The effects of realised and unrealised losses on the earnings of the Group are
set out below.
+--------------------------------------------+--------+-----------+--+------------+
| | | Group |
+--------------------------------------------+--------+---------------------------+
| | | 2009 | | 2008 |
+--------------------------------------------+--------+-----------+--+------------+
| | | GBP'000 | | GBP'000 |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Loss for the year as per income statement | | (47,964) | | (34,974) |
+--------------------------------------------+--------+-----------+--+------------+
| Minority interest | | 8,257 | | 6,931 |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Attributable to Equity holders of Ciref | | (39,707) | | (28,043) |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Adjusted for: | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Unrealised items | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Net fair value losses on investment | | 13,261 | | 7,867 |
| property | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Gross | | 16,831 | | 10,090 |
+--------------------------------------------+--------+-----------+--+------------+
| Minorities | | (3,570) | | (2,223) |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Movement in the fair value of derivatives | | 3,874 | | 638 |
+--------------------------------------------+--------+-----------+--+------------+
| Gross | | 4,467 | | 811 |
+--------------------------------------------+--------+-----------+--+------------+
| Minorities | | (593) | | (173) |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Fair value losses on Investment Property | | | | |
| and derivatives | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| included in equity accounted losses | | 12,040 | | 20,727 |
+--------------------------------------------+--------+-----------+--+------------+
| Gross | | 12,233 | | 23,904 |
+--------------------------------------------+--------+-----------+--+------------+
| Minorities | | (193) | | (3,178) |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Realised items | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Impairment of investments * | | 18,637 | | 4,280 |
+--------------------------------------------+--------+-----------+--+------------+
| Gross | | 22,808 | | 6,056 |
+--------------------------------------------+--------+-----------+--+------------+
| Minorities | | (4,171) | | (1,776) |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Negative goodwill | | (1,435) | | - |
+--------------------------------------------+--------+-----------+--+------------+
| Gross | | (1,580) | | - |
+--------------------------------------------+--------+-----------+--+------------+
| Minorities | | 145 | | - |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Core earnings | | 6,670 | | 5,468 |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Core earnings per share | | | | |
+--------------------------------------------+--------+-----------+--+------------+
| Core earnings | | 6,670 | | 5,468 |
+--------------------------------------------+--------+-----------+--+------------+
| Weighted average number of ordinary shares | | 73,261 | | 70,650 |
+--------------------------------------------+--------+-----------+--+------------+
| Core earnings per share | | 9.11 | | 7.74 |
+--------------------------------------------+--------+-----------+--+------------+
* The impairment of investments includes the write-off of Trinity Walk,
Wakefield, Friars Walk, Newport and Houndshill, Blackpool.
Commercial Property Price Risk
The Directors draw attention to the risks associated with commercial property
investments. Although over the long term property is considered a low risk
asset, investors must be aware that significant short and medium term risk
factors are inherent in the asset class.
Investments in property are relatively illiquid and usually more difficult to
realise than listed equities or bonds and this restricts the Group's ability to
realise value in cash in the short term.
The property valuations on which these results are based have been prepared in a
period of market uncertainty. The current turmoil in the world's financial
markets has resulted in commercial and residential properties selling in much
reduced quantities with virtually no market activity in some areas. Many vendors
are choosing not to go to the market until conditions improve. Many purchasers
are choosing not to buy now in the expectation that market conditions will
continue to deteriorate and they will be able to purchase more favourably in the
future. Other transactions are failing due to the current difficulty in funding
acquisitions.
The lack of market activity and the resulting lack of market evidence means that
it is generally not possible to value properties with as high a degree of
certainty as would be the case in a more stable market with a good level of
market evidence.
Estimates of fair value of investment properties
The best evidence of fair value is current prices in an active market for
similar lease and other contracts. In the absence of such information, the Group
determines the amount within a range of reasonable estimates. The Group
considers information from a variety of sources including:
-Independent valuers;
-Current prices in an active market for properties of a different nature,
condition or location, adjusted for those differences;
-Recent prices from similar properties in less active markets, with adjustments
to reflect any changes in economic conditions;
-Discounted cash flow projections based on reliable estimates of future cash
flows, derived from the terms of any existing lease and from external evidence
such as current market rents for similar properties in the same location and
condition, and using discount rates that reflect current market assessments.
The consolidated financial statements are prepared in accordance with
International Financial Reporting Standards ("IFRS") and interpretations adopted
by the International Accounting Standards Board ("IASB"). The accounting
policies have been applied consistently by the Group. The abridged consolidated
financial statements are contained in the following pages.
Ciref Plc
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2009
+--------------------------------------------+--------+---------------+---------------+
| | | 2009 | 2008 |
+--------------------------------------------+--------+---------------+---------------+
| | Notes | GBP'000 | GBP'000 |
+--------------------------------------------+--------+---------------+---------------+
| | | | |
+--------------------------------------------+--------+---------------+---------------+
| INCOME | | | |
+--------------------------------------------+--------+---------------+---------------+
| Gross rental income | | 10,198 | 7,579 |
+--------------------------------------------+--------+---------------+---------------+
| Other income | | 2,225 | 1,206 |
+--------------------------------------------+--------+---------------+---------------+
| Net fair value losses on investment | 6 | (16,831) | (10,090) |
| property | | | |
+--------------------------------------------+--------+---------------+---------------+
| | | | |
+--------------------------------------------+--------+---------------+---------------+
| TOTAL INVESTMENT LOSS | | (4,408) | (1,305) |
+--------------------------------------------+--------+---------------+---------------+
| | | | |
+--------------------------------------------+--------+---------------+---------------+
| EXPENSES | | | |
+--------------------------------------------+--------+---------------+---------------+
| Administrative expenses | | (425) | (424) |
+--------------------------------------------+--------+---------------+---------------+
| Property operating expenses | | (3,297) | (2,480) |
+--------------------------------------------+--------+---------------+---------------+
| Amortisation of intangible assets | | (188) | - |
+--------------------------------------------+--------+---------------+---------------+
| | | | |
+--------------------------------------------+--------+---------------+---------------+
| TOTAL EXPENSES | | (3,910) | (2,904) |
+--------------------------------------------+--------+---------------+---------------+
| | | | |
+--------------------------------------------+--------+---------------+---------------+
| OPERATING LOSS | | (8,318) | (4,209) |
+--------------------------------------------+--------+---------------+---------------+
| | | | |
+--------------------------------------------+--------+---------------+---------------+
| Finance income | | 4,975 | 6,467 |
+--------------------------------------------+--------+---------------+---------------+
| Finance expenses | | (9,210) | (7,359) |
+--------------------------------------------+--------+---------------+---------------+
| Losses from financial assets and | 3 | (202) | (2,821) |
| liabilities | | | |
+--------------------------------------------+--------+---------------+---------------+
| Equity accounted losses | | (11,398) | (15,321) |
+--------------------------------------------+--------+---------------+---------------+
| Impairment of loans to joint ventures | | (23,773) | (11,647) |
+--------------------------------------------+--------+---------------+---------------+
| | | | |
+--------------------------------------------+--------+---------------+---------------+
| LOSS FOR THE YEAR BEFORE TAX | | (47,926) | (34,890) |
+--------------------------------------------+--------+---------------+---------------+
| | | | |
+--------------------------------------------+--------+---------------+---------------+
| Taxation | 4 | (38) | (84) |
+--------------------------------------------+--------+---------------+---------------+
| | | | |
+--------------------------------------------+--------+---------------+---------------+
| LOSS FOR THE YEAR AFTER TAX | | (47,964) | (34,974) |
+--------------------------------------------+--------+---------------+---------------+
| | | | |
+--------------------------------------------+--------+---------------+---------------+
| ATTRIBUTABLE TO: | | | |
+--------------------------------------------+--------+---------------+---------------+
| Equity holders of parent | | (39,707) | (28,043) |
+--------------------------------------------+--------+---------------+---------------+
| Minority interest | | (8,257) | (6,931) |
+--------------------------------------------+--------+---------------+---------------+
| | | | |
+--------------------------------------------+--------+---------------+---------------+
| LOSS FOR THE YEAR AFTER TAX | | (47,964) | (34,974) |
+--------------------------------------------+--------+---------------+---------------+
| | | | |
+--------------------------------------------+--------+---------------+---------------+
| BASIC AND DILUTED LOSS PER SHARE (PENCE) | 5 | (54.20) | (39.69) |
+--------------------------------------------+--------+---------------+---------------+
CONSOLIDATED & COMPANY BALANCE SHEET
AS AT 30 SEPTEMBER 2009
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | GROUP | COMPANY |
+--------------------------------------+-------+-------------------------+----------------------+
| | | 2009 | 2008 | 2009 | 2008 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | Notes | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| ASSETS | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| NON-CURRENT ASSETS | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Investment property | 6 | 186,021 | 106,636 | - | - |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Long-term receivables | | 39,210 | 52,894 | 18,463 | 36,771 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Other investments | | 290 | 735 | - | - |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Intangible assets | | 7,329 | - | - | - |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Investment in subsidiaries | | - | - | 40,621 | 39,643 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Investments in joint ventures | | 5,008 | 13,003 | 1,693 | 693 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Investments in associates | | - | 6,859 | - | 6,601 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| TOTAL NON-CURRENT ASSETS | | 237,858 | 180,127 | 60,777 | 83,708 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| CURRENT ASSETS | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Trade and other receivables | | 11,533 | 8,828 | 5,027 | 2,842 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Cash and cash equivalents | | 15,532 | 17,940 | 11,298 | 13,013 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| TOTAL ASSETS | | 264,923 | 206,895 | 77,102 | 99,563 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| EQUITY AND LIABILITIES | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| CAPITAL AND RESERVES | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Share capital | 7 | 739 | 727 | 739 | 727 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Share premium | | 104,127 | 103,294 | 104,127 | 103,294 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Treasury shares | | (61) | - | (61) | - |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Retained earnings | | (69,717) | (26,816) | (32,312) | (8,680) |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Non-distributable reserve | | 3,912 | - | - | - |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Currency translation reserve | | 4,098 | 1,769 | - | - |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| TOTAL EQUITY ATTRIBUTABLE TO EQUITY | | 43,098 | 78,974 | 72,493 | 95,341 |
| SHAREHOLDERS | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| MINORITY INTEREST | | 2,512 | 9,588 | - | - |
+--------------------------------------+-------+------------+------------+----------+-----------+
| TOTAL EQUITY | | 45,610 | 88,562 | 72,493 | 95,341 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| NON-CURRENT LIABILITIES | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Loans and borrowings | 8 | 195,523 | 107,737 | 585 | 771 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| CURRENT LIABILITIES | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Loans and borrowings | 8 | 10,790 | 3,425 | - | - |
+--------------------------------------+-------+------------+------------+----------+-----------+
| Trade and other payables | | 13,000 | 7,171 | 4,024 | 3,451 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| TOTAL CURRENT LIABILITIES | | 23,790 | 10,596 | 4,024 | 3,451 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| TOTAL LIABILITIES | | 219,313 | 118,333 | 4,609 | 4,222 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| | | | | | |
+--------------------------------------+-------+------------+------------+----------+-----------+
| TOTAL EQUITY AND LIABILITIES | | 264,923 | 206,895 | 77,102 | 99,563 |
+--------------------------------------+-------+------------+------------+----------+-----------+
| NET ASSET VALUE PER SHARE (PENCE) | | 58.43 | 108.65 | - | - |
+--------------------------------------+-------+------------+------------+----------+-----------+
| NUMBER OF ORDINARY SHARES IN ISSUE | 5 | 73,760,277 | 72,685,751 | - | - |
+--------------------------------------+-------+------------+------------+----------+-----------+
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2009
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| | Share | Share | Treasury | Retained | Non- | Currency | Total | Minority | Total |
| | capital | premium | shares | earnings | Distributable | translation | equity | interest | equity |
| | | | | | reserves | reserve | attributable | | |
| | | | | | | | to equity | | |
| | | | | | | | shareholders | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| GROUP | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| BALANCE AT 1 | 549 | 76,579 | - | 5,328 | - | 139 | 82,595 | 14,994 | 97,589 |
| OCTOBER 2007 | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Net loss for the | - | - | - | (28,043) | - | - | (28,043) | (6,931) | (34,974) |
| period | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Foreign currency | - | - | - | - | - | 1,630 | 1,630 | 133 | 1,763 |
| translation | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Total recognised | - | - | - | (28,043) | - | 1,630 | (26,413) | (6,798) | (33,211) |
| (loss)/income for | | | | | | | | | |
| 2008 | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Shares issued | 197 | 30,510 | - | - | - | - | 30,707 | - | 30,707 |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Shares issued to | - | - | - | - | - | - | - | 956 | 956 |
| minorities | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Share issue costs | - | (1,247) | - | - | - | - | (1,247) | - | (1,247) |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Redemption of | (19) | (2,548) | - | - | - | - | (2,567) | - | (2,567) |
| issued shares | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Dividend paid to | - | - | - | (4,113) | - | - | (4,113) | - | (4,113) |
| equity | | | | | | | | | |
| stakeholders | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Dividends paid to | - | - | - | - | - | - | - | (66) | (66) |
| minorities | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Dilution of | - | - | - | 12 | - | - | 12 | (118) | (106) |
| minority interest | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Derecognition of | - | - | - | - | - | - | - | 1,346 | 1,346 |
| subsidiary | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Decrease in | - | - | - | - | - | - | - | (726) | (726) |
| minority | | | | | | | | | |
| shareholders loans | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| BALANCE AT 30 | 727 | 103,294 | - | (26,816) | - | 1,769 | 78,974 | 9,588 | 88,562 |
| SEPTEMBER 2008 | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| BALANCE AT 1 | 727 | 103,294 | - | (26,816) | - | 1,769 | 78,974 | 9,588 | 88,562 |
| OCTOBER 2008 | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Net loss for the | - | - | - | (39,707) | - | - | (39,707) | (8,257) | (47,964) |
| period | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Foreign currency | - | - | - | - | - | 2,329 | 2,329 | 1,000 | 3,329 |
| translation | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Total recognised | - | - | - | (39,707) | - | 2,329 | (37,379) | (7,257) | (44,635) |
| (loss)/income for | | | | | | | | | |
| 2009 | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Shares issued | 4 | 261 | - | - | - | - | 265 | - | 265 |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Shares taken into | - | - | (380) | - | - | - | (380) | - | (380) |
| treasury | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Share issued from | - | - | 319 | - | - | - | 319 | - | 319 |
| treasury | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Dividend paid to | 8 | 572 | - | (3,104) | - | - | (2,524) | - | (2,524) |
| equity | | | | | | | | | |
| stakeholders | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Dividends paid to | - | - | - | - | - | - | - | (31) | (31) |
| minorities | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Arising on | - | - | - | - | 3,912 | - | 3,912 | 25 | 3.937 |
| reclassification | | | | | | | | | |
| from joint venture | | | | | | | | | |
| to subsidiary | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Dilution of | - | - | - | (90) | - | - | (90) | 90 | - |
| minority interest | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Decrease in | - | - | - | - | - | - | - | (5,132) | (5,132) |
| minority | | | | | | | | | |
| shareholders loans | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| Impairment of | - | - | - | - | - | - | - | 5,229 | 5,229 |
| minority | | | | | | | | | |
| shareholders loans | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
| BALANCE AT 30 | 739 | 104,127 | (61) | (69,717) | 3,912 | 4,098 | 43,098 | 2,512 | 45,610 |
| SEPTEMBER 2009 | | | | | | | | | |
+--------------------+---------+----------+----------+----------+---------------+-------------+--------------+----------+----------+
STATEMENT OF CHANGES IN EQUITY CONTINUED
FOR THE YEAR ENDED 30 SEPTEMBER 2009
+--------------+----------+----------+----------+------------+----------+
| | Share | Share | Treasury | Retained | Total |
| | Capital | Premium | shares | earnings | equity |
+--------------+----------+----------+----------+------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------+----------+----------+----------+------------+----------+
| COMPANY | | | | | |
+--------------+----------+----------+----------+------------+----------+
| | | | | | |
+--------------+----------+----------+----------+------------+----------+
| BALANCE | 549 | 76,579 | - | 2,316 | 79,444 |
| AT 1 | | | | | |
| OCTOBER | | | | | |
| 2007 | | | | | |
+--------------+----------+----------+----------+------------+----------+
| | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Net loss | - | - | - | (6,883) | (6,883) |
| for the | | | | | |
| period | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Total | - | - | - | (6,883) | (6,883) |
| recognised | | | | | |
| loss for | | | | | |
| 2008 | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Shares | 197 | 30,510 | - | - | 30,707 |
| issued | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Share | - | (1,247) | - | - | (1,247) |
| issue | | | | | |
| costs | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Dividend | - | - | - | (4,113) | (4,113) |
| paid to | | | | | |
| equity | | | | | |
| stakeholders | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Redemption | (19) | (2,548) | - | - | (2,567) |
| of issued | | | | | |
| shares | | | | | |
+--------------+----------+----------+----------+------------+----------+
| | | | | | |
+--------------+----------+----------+----------+------------+----------+
| BALANCE | 727 | 103,294 | - | (8,680) | 95,341 |
| AT 30 | | | | | |
| SEPTEMBER | | | | | |
| 2008 | | | | | |
+--------------+----------+----------+----------+------------+----------+
| | | | | | |
+--------------+----------+----------+----------+------------+----------+
| BALANCE | 727 | 103,294 | - | (8,680) | 95,341 |
| AT 1 | | | | | |
| OCTOBER | | | | | |
| 2008 | | | | | |
+--------------+----------+----------+----------+------------+----------+
| | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Net loss | | | - | (20,528) | (20,528) |
| for the | | | | | |
| period | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Total | | | - | (20,528) | (20,528) |
| recognised | | | | | |
| loss for | | | | | |
| 2009 | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Shares | 4 | 261 | - | - | 265 |
| issued | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Shares | - | - | (380) | - | (380) |
| taken | | | | | |
| into | | | | | |
| treasury | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Shares | - | - | 319 | - | 319 |
| issued | | | | | |
| from | | | | | |
| treasury | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Dividend | 8 | 572 | - | (3,104) | (2,524) |
| paid to | | | | | |
| equity | | | | | |
| stakeholders | | | | | |
+--------------+----------+----------+----------+------------+----------+
| | | | | | |
+--------------+----------+----------+----------+------------+----------+
| BALANCE | 739 | 104,127 | (61) | (32,312) | 72,493 |
| AT 30 | | | | | |
| SEPTEMBER | | | | | |
| 2009 | | | | | |
+--------------+----------+----------+----------+------------+----------+
| | | | | | |
+--------------+----------+----------+----------+------------+----------+
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2009
+----------------------+----------+------------+-------------+
| | Notes | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+----------------------+----------+------------+-------------+
| CASH | | | |
| FLOWS | | | |
| FROM | | | |
| OPERATING | | | |
| ACTIVITIES | | | |
+----------------------+----------+------------+-------------+
| Loss | | (47,926) | (34,890) |
| before | | | |
| tax | | | |
+----------------------+----------+------------+-------------+
| Adjusted | | | |
| for: | | | |
+----------------------+----------+------------+-------------+
| Reversal | | - | (294) |
| of | | | |
| provision | | | |
| against | | | |
| loans to | | | |
| joint | | | |
| ventures | | | |
+----------------------+----------+------------+-------------+
| Negative | | (1,580) | (26) |
| goodwill | | | |
+----------------------+----------+------------+-------------+
| Amortisation | | 188 | - |
| of | | | |
| intangible | | | |
| assets | | | |
+----------------------+----------+------------+-------------+
| Net fair | 6 | 16,831 | 10,090 |
| value | | | |
| losses | | | |
| on | | | |
| investment | | | |
| property | | | |
+----------------------+----------+------------+-------------+
| Realised | | - | (10) |
| gain | | | |
| from | | | |
| sale of | | | |
| subsidiary | | | |
+----------------------+----------+------------+-------------+
| Foreign | | (37) | (9) |
| exchange | | | |
| gains | | | |
+----------------------+----------+------------+-------------+
| Losses | 3 | 202 | 2,821 |
| from | | | |
| financial | | | |
| assets | | | |
| and | | | |
| liabilities | | | |
+----------------------+----------+------------+-------------+
| Equity | | 11,398 | 15,321 |
| accounted | | | |
| losses | | | |
+----------------------+----------+------------+-------------+
| Impairment | | 23,773 | 11,647 |
| of loans | | | |
| to joint | | | |
| ventures | | | |
+----------------------+----------+------------+-------------+
| Finance | | (4,975) | (6,467) |
| income | | | |
+----------------------+----------+------------+-------------+
| Finance | | 9,210 | 7,359 |
| expense | | | |
+----------------------+----------+------------+-------------+
| Cash | | 7,084 | 5,542 |
| generated | | | |
| by | | | |
| operations | | | |
+----------------------+----------+------------+-------------+
| Changes | | (1,300) | 806 |
| in | | | |
| working | | | |
| capital | | | |
+----------------------+----------+------------+-------------+
| Cash | | 5,784 | 6,348 |
| generated | | | |
| by | | | |
| operations | | | |
+----------------------+----------+------------+-------------+
| Interest | | (8,762) | (8,656) |
| paid | | | |
+----------------------+----------+------------+-------------+
| Taxation | | (38) | (84) |
| paid | | | |
+----------------------+----------+------------+-------------+
| NET CASH | | (3,016) | (2,392) |
| UTILISED | | | |
| IN | | | |
| OPERATING | | | |
| ACTIVITIES | | | |
+----------------------+----------+------------+-------------+
| | | | |
+----------------------+----------+------------+-------------+
| CASH | | | |
| FLOWS | | | |
| FROM | | | |
| INVESTING | | | |
| ACTIVITIES | | | |
+----------------------+----------+------------+-------------+
| Dividend | | 750 | 559 |
| income | | | |
+----------------------+----------+------------+-------------+
| Interest | | 4,193 | 7,560 |
| income | | | |
+----------------------+----------+------------+-------------+
| Purchase | 6 | (7,576) | (3,970) |
| of | | | |
| investment | | | |
| properties | | | |
+----------------------+----------+------------+-------------+
| Sale of | 6 | - | 4,717 |
| investment | | | |
| properties | | | |
+----------------------+----------+------------+-------------+
| Investment | | (4,180) | (18,565) |
| in | | | |
| associates | | | |
| and joint | | | |
| ventures | | | |
+----------------------+----------+------------+-------------+
| Acquisition | | 734 | - |
| of | | | |
| subsidiaries | | | |
+----------------------+----------+------------+-------------+
| Sale of | | - | 318 |
| investments | | | |
| in | | | |
| subsidiaries | | | |
+----------------------+----------+------------+-------------+
| Increase | | (1,274) | (5,642) |
| in loans | | | |
| to joint | | | |
| ventures | | | |
| & | | | |
| associates | | | |
+----------------------+----------+------------+-------------+
| Sale of | | 8,089 | - |
| investments | | | |
| in | | | |
| associates | | | |
| and joint | | | |
| ventures | | | |
+----------------------+----------+------------+-------------+
| Increase | | (879) | (2,030) |
| in loans | | | |
| to | | | |
| related | | | |
| parties | | | |
+----------------------+----------+------------+-------------+
| Proceeds | | 532 | - |
| on sale | | | |
| of | | | |
| financial | | | |
| assets | | | |
+----------------------+----------+------------+-------------+
| Acquisition | | - | (209) |
| of minority | | | |
| interest | | | |
+----------------------+----------+------------+-------------+
| NET CASH | | 389 | (17,262) |
| GENERATED/(UTILISED) | | | |
| IN INVESTING | | | |
| ACTIVITIES | | | |
+----------------------+----------+------------+-------------+
| | | | |
+----------------------+----------+------------+-------------+
| CASH | | | |
| FLOWS | | | |
| FROM | | | |
| FINANCING | | | |
| ACTIVITIES | | | |
+----------------------+----------+------------+-------------+
| Proceeds | | 5,375 | 2,157 |
| from | | | |
| loans | | | |
| and | | | |
| borrowings | | | |
+----------------------+----------+------------+-------------+
| Repayment | | (2,503) | (1,346) |
| of loans | | | |
| and | | | |
| borrowings | | | |
+----------------------+----------+------------+-------------+
| Dividends | | (31) | (66) |
| paid to | | | |
| minorities | | | |
+----------------------+----------+------------+-------------+
| Dividends | | (2,524) | (4,113) |
| paid to | | | |
| equity | | | |
| shareholders | | | |
+----------------------+----------+------------+-------------+
| Proceeds | | - | 26,892 |
| from | | | |
| issue of | | | |
| share | | | |
| capital | | | |
+----------------------+----------+------------+-------------+
| Treasury | | (380) | - |
| shares | | | |
| sold | | | |
+----------------------+----------+------------+-------------+
| NET CASH | | (63) | 23,524 |
| FROM | | | |
| FINANCING | | | |
| ACTIVITIES | | | |
+----------------------+----------+------------+-------------+
| | | | |
+----------------------+----------+------------+-------------+
| Net | | (2,690) | 3,870 |
| (decrease)/increase | | | |
| in cash | | | |
+----------------------+----------+------------+-------------+
| Effect | | 282 | (644) |
| of | | | |
| exchange | | | |
| rate | | | |
| fluctuations | | | |
| on cash held | | | |
+----------------------+----------+------------+-------------+
| Net cash | | 17,940 | 14,714 |
| at the | | | |
| beginning | | | |
| of the | | | |
| period | | | |
+----------------------+----------+------------+-------------+
| NET CASH | | 15,532 | 17,940 |
| AT THE | | | |
| END OF | | | |
| THE | | | |
| PERIOD | | | |
+----------------------+----------+------------+-------------+
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2009
1.GENERAL INFORMATION
Ciref was incorporated on the 28th of September 2005 under the laws of Jersey.
The Company acted as the listing vehicle for the Corovest International Real
Estate Fund ("the Fund"), and is listed on AIM. The consolidated financial
statements for the period ended 30 September 2009 comprise the Company and its
subsidiaries (together referred to as the "Group") and the Group's interest in
associates and jointly controlled entities.
2.SIGNIFICANT ACCOUNTING POLICIES
2.1. STATEMENT OF COMPLIANCE
The consolidated financial statements are prepared in accordance with
International Financial Reporting Standards ("IFRS") and interpretations adopted
by the International Accounting Standards Board ("IASB"). The Company balance
sheet has been prepared using the recognition and measurement principles of
IFRS. The significant accounting policies adopted by the Group and Company are
set out below:
2.2. BASIS OF PREPARATION
The consolidated and Company financial statements are presented in Great British
Pounds, which is the functional currency of the Company and presentational
currency of the Group and rounded to the nearest thousand pounds. They are
prepared using the historical cost basis except for investment property and
financial instruments at fair value through profit or loss.
The preparation of financial statements in conformity with IFRS requires the use
of accounting estimates. It also requires management to exercise its judgement
in the process of applying the Group's accounting policies. The estimates and
assumptions relating to the fair value of investment properties have a
significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year.
2.3. BASIS OF CONSOLIDATION
2.3.1. Investments in subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group
has the power, directly or indirectly, to govern the financial and operating
policies of an entity so as to obtain benefits from its activities.
Subsidiaries are carried at cost less impairment in the Company financial
statements.
The results of subsidiaries are included in the Group results from the effective
dates of acquisition to the effective dates of disposal. Any difference between
the purchase price of a subsidiary and the Group's share of the fair value of
the identifiable net assets acquired is treated in accordance with the Group's
accounting policy for intangible assets.
All intergroup transactions are eliminated on consolidation. Where necessary,
the accounting policies of subsidiaries are changed to ensure consistency with
the policies applied by the Group.
The initial interest of the minority shareholders is stated at the minority's
proportion of the fair values of the assets and liabilities recognised.
Subsequently, any losses applicable to the minority interest in excess of the
minority interest, are allocated against the interest of the parent.
2.3.2. Investment in associates and joint ventures
Associates are entities over whose financial and operating policies the group
has the ability to exercise significant influence but not control and which are
neither subsidiaries nor joint ventures. Joint ventures are those entities over
which the Group exercises joint control in terms of a contractual agreement.
The equity method of accounting for associates and joint ventures is applied in
the Group financial statements. In applying the equity method, account is taken
of the share of accumulated retained earnings and reserves, from the effective
date on which the entity became an associate or joint venture and up to the
effective date of disposal. Goodwill arising on the acquisition of joint
ventures is identified and accounted for in accordance with the Group's
accounting policy for goodwill.
Associates and joint ventures are carried at cost less impairment in the Company
financial statements. Unrealised gains and losses arising from transactions with
associates and joint ventures are eliminated on consolidation to the extent of
the Group's interest in the entities.
2.4. INVESTMENT PROPERTY
Investment properties are those which are held either to earn rental income or
for capital appreciation or for both. Investment properties are stated at fair
value. An external, independent valuation company, having professionally
qualified valuers and recent experience in the location and category of property
being valued, values the portfolio on an annual basis. The fair values are based
on market values, being the estimated amount for which a property could be
exchanged on the date of valuation between a willing buyer and a willing seller
in an arm's length transaction after proper marketing wherein the parties had
each acted knowledgeably and without compulsion.
The valuations are prepared by considering comparable market transactions for
sales and letting. In the case of lettings this includes considering the
aggregate of the net annual market rents receivable from the properties and
where relevant, associated costs. A yield which reflects the risks inherent in
the net cash flows is then applied to the net annual rentals to arrive at the
property valuation.
Any gain or loss arising from a change in fair value is recognised in the income
statement.
When the Group begins to redevelop an existing investment property for continued
future use as investment property, the property remains an investment property,
which is measured based on a fair value model, and is not reclassified as
property, plant and equipment during the redevelopment.
Property that is being constructed or developed for future use as investment
property is classified as investment property under development (development
projects) and stated at cost until construction or development is complete, at
which time it is reclassified and subsequently accounted for as investment
property. At the date of transfer, the difference between fair value and cost is
recorded as profit or loss in the consolidated income statement.
All costs directly associated with the purchase and construction of a property
are capitalised.
Borrowing costs are capitalised if they are directly attributable to the
acquisition, construction or production of a qualifying asset. Capitalisation of
borrowing costs commences when the activities to prepare the asset are in
progress and expenditures and borrowing costs are being incurred. Capitalisation
of borrowing costs may continue until the assets are substantially ready for
their intended use. If the resulting carrying amount of the asset exceeds its
value, an impairment loss is recognised. The capitalisation rate is arrived at
by reference to the actual rate payable on borrowings for development purposes
or, with regard to that part of the development cost financed out of general
funds, to the average rate.
2.5.DERIVATIVE FINANCIAL INSTRUMENTS
The Group holds derivative financial instruments to hedge its interest rate risk
exposures. Embedded derivatives are separated from the host contract and
accounted for separately if the economic characteristics and risks of the host
contract and the embedded derivative are not closely related, a separate
instrument with the same terms as the embedded derivative would meet the
definition of a derivative, and the combined instrument is not measured at fair
value through profit or loss.
Derivatives are recognised initially at fair value; attributable transaction
costs are recognised in the income statement when incurred. Subsequent to
initial recognition, derivatives are measured at fair value, and changes therein
are accounted for in the income statement and disclosed in losses/gains from
financial assets and liabilities.
3. LOSSES FROM FINANCIAL ASSETS AND LIABILITIES
+----------------------------------------------------------+------------+--------------+
| | |
| | GROUP |
+----------------------------------------------------------+---------------------------+
| | 2009 | 2008 |
+----------------------------------------------------------+------------+--------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------+------------+--------------+
| | | |
+----------------------------------------------------------+------------+--------------+
| Fair value through profit or loss | | |
+----------------------------------------------------------+------------+--------------+
| Equity investments - realised | 3,719 | (2,058) |
+----------------------------------------------------------+------------+--------------+
| - unrealised | 546 | 48 |
+----------------------------------------------------------+------------+--------------+
| Derivative financial instruments | (4,467) | (811) |
+----------------------------------------------------------+------------+--------------+
| | | |
+----------------------------------------------------------+------------+--------------+
| NET LOSS FROM FINANCIAL ASSETS AND LIABILITIES | (202) | (2,821) |
+----------------------------------------------------------+------------+--------------+
Realised gains on equity investments include a gain of GBP3,885k on the disposal
of the Group's investment in Wichford Plc and a loss of GBP166k on the disposal
of the Group's investment in APN European Retail Property Group.
4.TAXATION
The Group is exempt from all forms of taxation in Jersey, including income,
capital gains and withholding taxes. In jurisdictions other than Jersey, foreign
taxes will, in some cases, be withheld at source on dividends and interest
received by the Group. Other than Germany and Switzerland capital gains derived
by the Group in such jurisdictions generally will be exempt from foreign income
or withholding taxes at source.
INCOME TAX EXPENSE
The Group invests in UK property and therefore is liable to income tax in the UK
on the net rental profits. The current rate of UK income tax for a non-resident
company is 22%. Based on current UK law, certain joint ventures in the Group
will be subject to UK capital gains tax, or corporation tax on capital gains, on
the realisation of UK investment property gains.
The Group invests in Swiss property and therefore is liable to cantonal and
federal taxes in Switzerland. The rates depend largely on the canton in which
the property is situated and the property values. The effective rate of tax
ranges from 22% to 25%.
The Group also invests in German properties held either in corporates or
partnerships. The effective rate of tax ranges from 18.463% to 25% and the rate
of capital gains tax on any future disposal ranges from 15.825% to 20%.
Provision has been made for deferred capital gains tax in UK joint ventures,
where taxable temporary differences arise.
As all current year taxes arise in jurisdictions outside Jersey, a full tax rate
reconciliation of the relationship between the tax expense and accounting profit
has not been included within these accounts.
+----------------------------------------------------------+-----------+------------+
| | |
| | GROUP |
+----------------------------------------------------------+------------------------+
| | 2009 | 2008 |
+----------------------------------------------------------+-----------+------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------+-----------+------------+
| | | |
+----------------------------------------------------------+-----------+------------+
| Foreign tax | 38 | 84 |
+----------------------------------------------------------+-----------+------------+
5.EARNINGS PER SHARE
+---------------------------------+-------------------+---------------+----------------+
| | | |
| | | GROUP |
+---------------------------------+-------------------+--------------------------------+
| | | 2009 | 2008 |
+---------------------------------+-------------------+---------------+----------------+
| | | GBP'000 | GBP'000 |
+---------------------------------+-------------------+---------------+----------------+
| | | | |
+---------------------------------+-------------------+---------------+----------------+
| Net loss attributable to | | (39,707) | (28,043) |
| shareholders | | | |
+---------------------------------+-------------------+---------------+----------------+
| | | | |
+---------------------------------+-------------------+---------------+----------------+
| Weighted average number of | | 73,261 | 70,650 |
| Ordinary Shares | | | |
+---------------------------------+-------------------+---------------+----------------+
| | | | |
+---------------------------------+-------------------+---------------+----------------+
| Number of Ordinary Shares | - In issue | 73,868 | 74,605 |
+---------------------------------+-------------------+---------------+----------------+
| | - Redeemed | - | (1,919) |
+---------------------------------+-------------------+---------------+----------------+
| | - Treasury | (108) | - |
+---------------------------------+-------------------+---------------+----------------+
| | - Shares in issue | 73,760 | 72,686 |
+---------------------------------+-------------------+---------------+----------------+
| | - Weighted | 73,261 | 70,650 |
| | average | | |
+---------------------------------+-------------------+---------------+----------------+
| | | | |
+---------------------------------+-------------------+---------------+----------------+
| Earnings per share (pence) | - Basic and | (54.20) | (39.69) |
| | diluted | | |
+---------------------------------+-------------------+---------------+----------------+
The Company has no instruments in issue that would dilute earnings per share,
therefore the diluted earnings per share is equal to the basic earnings per
share.
6.INVESTMENT PROPERTY
The book cost of properties as at 30 September 2009 was GBP190,687,813 (2008:
GBP103,361,784). The carrying amount of investment property is the fair value of
the property as determined by a registered independent appraiser having an
appropriate recognised professional qualification and recent experience in the
location and category of the property being valued. Fair values were determined
having regard to recent market transactions for similar properties in the same
location as the Group's investment property. The valuers have also considered
the rental status of each property and current market yields. The valuations
have been prepared in a period of market uncertainty, refer to Commercial
Property Price Risk as disclosed in the Financial Review. The Group is also
exposed to the risks associated with investment property held within joint
venture and associate entities, which are equity accounted.
Investment property comprises a number of commercial and retail properties that
are leased to third parties. All investment properties are income generating, as
is the investment property under development of GBP27,697,989 (2008:Nil) which
was acquired during the year ended 30 September 2009. Its fair value is
represented by the purchase price.
Property operating expenses in the income statement relate solely to income
generating properties.
+------------------------------------------+------------+-----------+----------+---------+
| | GROUP | COMPANY |
+------------------------------------------+------------------------+--------------------+
| | 2009 | 2008 | 2009 | 2008 |
+------------------------------------------+------------+-----------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+------------+-----------+----------+---------+
| | | | | |
+------------------------------------------+------------+-----------+----------+---------+
| | | | | |
+------------------------------------------+------------+-----------+----------+---------+
| Opening balance on 1 October | 106,636 | 121,815 | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Properties acquired during the period | 6,717 | 2,453 | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Capitalised expenditure | 566 | 1,517 | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Capitalised interest | 293 | 172 | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Impact of acquisition of subsidiaries | 80,600 | - | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Impact of disposal of subsidiaries | - | (10,629) | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Reclassification of investment property | - | (637) | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Sale of properties during the period | - | (4,717) | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Net loss from fair value adjustment on | (16,831) | (10,090) | - | - |
| investment property | | | | |
+------------------------------------------+------------+-----------+----------+---------+
| Foreign exchange movements in foreign | 8,040 | 6,752 | - | - |
| operations | | | | |
+------------------------------------------+------------+-----------+----------+---------+
| | | | | |
+------------------------------------------+------------+-----------+----------+---------+
| CLOSING BALANCE ON 30 SEPTEMBER | 186,021 | 106,636 | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| | | | | |
+------------------------------------------+------------+-----------+----------+---------+
| | | | | |
+------------------------------------------+------------+-----------+----------+---------+
| Analysis of additions: | | | | |
+------------------------------------------+------------+-----------+----------+---------+
| | | | | |
+------------------------------------------+------------+-----------+----------+---------+
| NEW ADDITIONS: | | | | |
+------------------------------------------+------------+-----------+----------+---------+
| Gibson Properties Limited | - | 8 | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Ciref Ashtead Limited | - | 611 | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Ciref Reigate Limited | 35 | 16 | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Trito Petersfield Limited | - | 77 | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Ciref Europe Limited | 7,2331 | 3,430 | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| West Orchards Coventry Limited | 4 | - | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Delamere Place Crewe Limited | 304 | - | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| | 7,576 | 4,142 | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| | | - | | |
+------------------------------------------+------------+-----------+----------+---------+
| Additions/(disposals) as a result of a change in control of | | |
| underlying entities: | | |
+-------------------------------------------------------------------+----------+---------+
| | | | | |
+------------------------------------------+------------+-----------+----------+---------+
| Ciref Margate Limited | - | (10,629) | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| West Orchards Coventry Limited | 53,2062 | - | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| Delamere Place Crewe Limited | 27,3942 | - | - | - |
+------------------------------------------+------------+-----------+----------+---------+
| | | | | |
+------------------------------------------+------------+-----------+----------+---------+
| | 80,600 | (10,629) | - | - |
+------------------------------------------+------------+-----------+----------+---------+
1Comprises the Lindenhof Shopping Centre located in Bremen, Germany
2The change in control occurred as a result of these joint venture entities
becoming subsidiaries during the year. These entities are the owners of the West
Orchards Shopping Centre and Delamere Place Shopping Centre respectively.
7. CAPITAL AND RESERVES
+---------------------------------------------+-----------+----------+----------+----------+
| SHARE CAPITAL AND SHARE PREMIUM | GROUP | COMPANY |
+---------------------------------------------+----------------------+---------------------+
| | 2009 | 2008 | 2009 | 2008 |
+---------------------------------------------+-----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------+-----------+----------+----------+----------+
| Authorised | | | | |
+---------------------------------------------+-----------+----------+----------+----------+
| 500,000,000 Ordinary Shares of GBP0.01 each | 5,000 | 5,000 | 5,000 | 5,000 |
| | | | | |
+---------------------------------------------+-----------+----------+----------+----------+
| Issued | | | | |
+---------------------------------------------+-----------+----------+----------+----------+
| (73,867,777 Ordinary Shares of GBP0.01 each | 739 | 727 | 739 | 727 |
| (2008: 72,685,751 shares of GBP0.01 each) | | | | |
+---------------------------------------------+-----------+----------+----------+----------+
| | 739 | 727 | 739 | 727 |
+---------------------------------------------+-----------+----------+----------+----------+
| | | | | |
+---------------------------------------------+-----------+----------+----------+----------+
| IN ISSUE AT 1 OCTOBER 2008 | 72,686 | 54,921 | 72,686 | 54,921 |
+---------------------------------------------+-----------+----------+----------+----------+
| Ordinary Shares issued | 405 | 19,684 | 405 | 19,684 |
+---------------------------------------------+-----------+----------+----------+----------+
| Ordinary shares issued as scrip dividend | 777 | - | 777 | - |
+---------------------------------------------+-----------+----------+----------+----------+
| Gross Shares in issue at 30 September | 73,868 | 74,605 | 73,868 | 74,605 |
+---------------------------------------------+-----------+----------+----------+----------+
| Redemption of issued shares | - | (1,919) | - | (1,919) |
+---------------------------------------------+-----------+----------+----------+----------+
| Shares taken to treasury | (536) | - | (536) | - |
+---------------------------------------------+-----------+----------+----------+----------+
| Ordinary shares issued from treasury | 428 | - | 428 | - |
+---------------------------------------------+-----------+----------+----------+----------+
| NET SHARES IN ISSUE AT 30 SEPTEMBER | 73,760 | 72,686 | 73,760 | 72,686 |
+---------------------------------------------+-----------+----------+----------+----------+
During the financial year, the Company took 536,305 shares into treasury for a
total consideration of GBP379,854.
On 19 February 2009 the Company swapped 404,528 new shares, as well as 428,805
shares from treasury (total consideration of GBP583,333) for 12,500,000 shares
in APN European Retail Property Group.
Distributions
On the basis of the assumptions currently made including as to the yields being
achieved by the Group's properties and subject to the availability of financial
resources, the Directors intend for the Company to pay dividends twice yearly on
an interim and final basis, representing in aggregate approximately 4.5 per
cent. of the net asset value. There can be no guarantee as to the amount of any
dividend payable by the Company.
On 11 February 2009 the Company distributed the 2008 final dividend of 2.51p per
share (2008: 3.18p per share). The dividend was settled by GBP1,341,820 in cash
and by issuing 573,832 shares at a premium of 83.1p per share.
On 11 August 2009 the Company distributed the 2009 interim dividend of 1.74p per
share (2008: 3.30p per share). The dividend was settled by GBP1,182,658 in cash
and by issuing 203,667 shares at a premium of 46.7p per share.
Currency translation reserve
The translation reserve comprises all foreign currency differences arising from
the translation of the financial statements of foreign operations.
8.LOANS AND BORROWINGS
This note provides information about the contractual terms of the Group's loans
and borrowings, which are measured at amortised cost.
TERMS AND DEBT REPAYMENT SCHEDULE
8.1. SECURED
The terms and conditions of outstanding loans were as follows:
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+------+
| | | | | 2009 | 2008 |
+----------------------------+--------------+----------+----------+--------------------+--------------------------+
| | Loan | Currency | Year | Face | Carrying | Face | Carrying |
| | Interest | | of | value | amount | value | amount |
| | rate | | maturity | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+----------------+
| Property | | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Gibson Properties Limited | 6.37%* | GBP | 2029 | 11,348 | 11,331 | 11,348 | 11,348 |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Newington House Limited | LIBOR + | GBP | 2010 | 7,300 | 6,859 | 7,300 | 7,010 |
| | 1.25% | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Ciref Reigate Limited | Base rate + | GBP | 2010 | 2,980 | 2,980 | 2,980 | 2,980 |
| | 1.35% | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Kalihora Holdings Limited | 2.87%* | CHF | 2010 | 12,545 | 12,037 | 10,424 | 10,155 |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Ciref Streatham Limited | LIBOR + | GBP | 2009 | 3,078 | 3,078 | 3,078 | 3,078 |
| | 1.25% | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Ciref Malthurst Limited | LIBOR + | GBP | 2014 | 20,000 | 18,250 | 20,000 | 20,000 |
| | 0.95% | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Tritam Investments Limited | 6.49%* | GBP | 2008** | 17,150 | 17,150 | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Ciref Coventry Limited | 6.29%* | GBP | 2027 | 56,750 | 56,384 | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Ciref Berlin 1 Limited | EURIBOR + | EUR | 2014 | 17,499 | 17,439 | 15,148 | 15,148 |
| | 1.2% | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Ciref German Portfolio | EURIBOR + | EUR | 2014 | 3,672 | 3,663 | 3,179 | 3,179 |
| Limited | 1.2% | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Inkstone | 5.75%* | EUR | 2011 | 4,012 | 3,867 | 3,473 | 3,405 |
| Grundstucksverwaltung | | | | | | | |
| Limited & Co.KG | | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Inkstone Zwei | 5.91%* | EUR | 2011 | 4,536 | 4,317 | 3,927 | 3,830 |
| Grundstucksverwaltung | | | | | | | |
| Limited & Co.KG | | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| CEL Portfolio Limited &Co. | 4.95%* | EUR | 2014 | 4,663 | 4,663 | - | - |
| KG | | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| | | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| TOTAL BANK LOANS | | | | 165,533 | 162,018 | 80,857 | 80,133 |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| | | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Corovest Mezzanine Capital | 7.10%* | GBP | 2012 | 32,225 | 32,225 | 24,000 | 24,000 |
| Limited | | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| Loans secured by cash | 7.00%* | GBP | 2011 | 5,915 | 5,915 | 5,915 | 5,915 |
| deposits | | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| CEL Portfolio Limited & | 0%* | GBP | 2029 | 712 | 712 | | |
| Co. KG | | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| | | | | | | | |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+
| TOTAL SECURED LOANS | | | | 204,385 | 200,870 | 110,772 | 110,048 |
+----------------------------+--------------+----------+----------+---------+----------+---------+---------+------+
All bank loans are secured over investment property, and bear interest at the
specified interest rates.
*Fixed rates
** Please refer to Other Facilities in the Investment Manager's Review for
further details.
8.2.UNSECURED
+----------------------------------+------------+------------+-------------+-------------+
| | GROUP | COMPANY |
+----------------------------------+-------------------------+---------------------------+
| | 2009 | 2008 | 2009 | 2008 |
+----------------------------------+------------+------------+-------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+------------+------------+-------------+-------------+
| | | | | |
+----------------------------------+------------+------------+-------------+-------------+
| Minority shareholder loans | 633 | 561 | 585 | 771 |
+----------------------------------+------------+------------+-------------+-------------+
| Derivatives | 4,810 | 553 | - | |
+----------------------------------+------------+------------+-------------+-------------+
| | | | | |
+----------------------------------+------------+------------+-------------+-------------+
| TOTAL UNSECURED LOANS | 5,443 | 1,114 | 585 | 771 |
+----------------------------------+------------+------------+-------------+-------------+
+------------------------------------------------------------------------------------+
| The shareholders loans are unsecured, bear interest at rates between 5.5% and 7.5% |
| and mature in September 2015. |
+------------------------------------------------------------------------------------+
+----------------------------------+------------+------------+-------------+-------------+
| Non-current liabilities | | | | |
+----------------------------------+------------+------------+-------------+-------------+
| Secured loans | 190,080 | 106,623 | - | - |
+----------------------------------+------------+------------+-------------+-------------+
| Unsecured shareholder loans | 633 | 561 | 585 | 771 |
+----------------------------------+------------+------------+-------------+-------------+
| Derivatives | 4,810 | 553 | - | - |
+----------------------------------+------------+------------+-------------+-------------+
| TOTAL NON-CURRENT LOANS AND | 195,523 | 107,737 | 585 | 771 |
| BORROWINGS | | | | |
+----------------------------------+------------+------------+-------------+-------------+
+----------------------------------+------------+------------+-------------+-------------+
| The maturity of non-current borrowings are as | | | |
| follows: | | | |
+-----------------------------------------------+------------+-------------+-------------+
| Between one year and five years | 110,952 | 51,917 | - | - |
+----------------------------------+------------+------------+-------------+-------------+
| More than five years | 84,571 | 55,820 | 585 | 771 |
+----------------------------------+------------+------------+-------------+-------------+
| | 195,523 | 107,737 | 585 | 771 |
+----------------------------------+------------+------------+-------------+-------------+
| Current liabilities | | | | |
+----------------------------------+------------+------------+-------------+-------------+
| Secured loans | 10,790 | 3,425 | - | - |
+----------------------------------+------------+------------+-------------+-------------+
| | | | | |
+----------------------------------+------------+------------+-------------+-------------+
| TOTAL CURRENT LOANS AND | 10,790 | 3,425 | - | - |
| BORROWINGS | | | | |
+----------------------------------+------------+------------+-------------+-------------+
| | | | | |
+----------------------------------+------------+------------+-------------+-------------+
| TOTAL LOANS AND BORROWINGS | 206,313 | 111,162 | 585 | 771 |
+----------------------------------+------------+------------+-------------+-------------+
Exposure to credit, interest rate and currency risks arise in the normal course
of the Group's business. Derivative financial instruments are used to reduce
exposure to fluctuations in interest rates.
9.POST BALANCE SHEET EVENTS
The Directors of CIREF have resolved to declare a dividend of 1.31 pence per
share. The dividend will be offered to shareholders as a scrip dividend, with
the ability to elect to receive a cash dividend alternative. Further details
surrounding the terms of the scrip dividend will be set out in the notice of the
AGM, which will be sent to shareholders in due course.
The last day to trade "cum" the dividend in order to participate in the dividend
is the 15th of December 2009. The shares will commence trading "ex" dividend on
the 16th of December 2009 and the record date will be the 18th of December 2009.
The dividend will be paid to shareholders on the 10th of February 2010.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR CKPKBBBDDNDB
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