TIDMHCFT
RNS Number : 3783Z
Highcroft Investments PLC
15 March 2012
Highcroft Investments PLC
Preliminary results for the year ended 31 December 2011
KEY HIGHLIGHTS
-- Gross property income increased by 4% to GBP2,129,000
-- Profit for the year on revenue activities up 5% to GBP2,066,000
-- Adjusted earnings per share (on revenue activities) up 6% to 40.1p
-- Net asset value per share up to 720p from 716p
-- Total property income distribution up 5% to 30.0p per share
-- Cash and liquid equity investments GBP7,524,000 (2009: GBP8,080,000)
Enquiries:
Highcroft Investments PLC
John Hewitt / Roberta Miles 01865 840023
Charles Stanley Securities
Dugald J. Carlean / Karri Vuori 0207 149 6000
Dear Shareholder,
I am pleased to introduce our Preliminary Results for the year
ended 31 December 2011. I fear that shareholders reading this
statement may experience a sense of deja vu as my cautionary
comments a year ago - about the national economy, the lack of
prospects for growth, the subdued consumer attitude and resultant
impact on retailers and commercial rents - apply equally today,
with a European sovereign debt crisis thrown in for good measure.
That said, I think I can echo my words of last year in that we have
acquitted ourselves reasonably well in the circumstances.
Results for the year
I am pleased to report that we have made further, albeit modest,
progress in a number of areas.
Property: Our gross property income rose 4% to GBP2,129,000
(2010: GBP2,053,000), despite falling residential property income
as a result of disposals. Sales of vacant residential houses and
flats produced nearly GBP2,086,000 of cash, very significantly
above cost and GBP393,000 above the December 2010 valuations. Our
commercial property in Yeovil, which had been vacant since 2009,
was re-let in July and we then disposed of it in November. We
benefited from a full year of rental income from the freehold
industrial unit in Warwick that we purchased at the end of 2010. I
can now confirm the completion of the purchase of an industrial
unit in Andover which was mentioned in our interim report. This has
a strong covenant, is let on a 23 year lease, and currently yields
6.4%, Again, we have to express our disappointment at the relative
lack of success in being able to buy properties of the quality
which we are seeking for our portfolio. The general recession in
national property prices has tended to result in lower-quality
portfolios being sold, often by banks, while the competition for
properties matching our criteria (lot size, lease length, yield,
and tenant strength) is still quite strong.
Equities: Our average income yield of 4.7% on the portfolio,
coupled with a realised net gain of GBP57,000 and an unrealised net
loss of GBP247,000, are a result of the strength of our portfolio
during what has been a turbulent period for the equities
markets.
Administrative expenses: Our ongoingadministrative expenses
declined by 4% when normalised for the GBP20,000 of one-off costs
associated with the General Meeting in May.
Financial highlights: Profit on revenue activities showed a 5%
improvement on 2010. Turning to our capital performance, both our
property and equity portfolios showed net valuation losses for the
year, although the defensive strength of the underlying assets in
both classes cushioned us from the significant losses that have
been seen in some sectors.
Our year end net asset value edged ahead very marginally to 720p
(2010: 716p), held back by the fall in property valuations in the
second half of the year. Our year-end cash position was
GBP1,926,000 (2010: GBP2,472,000), whilst readily realisable equity
investments totalled GBP5,598,000 (2010: GBP5,608,000).
Dividend
We are recommending a final dividend of 18.5p per share (17.6p
2010) to be paid on 1 June 2012, making a total of 30p for the year
(2010: 28.6p). This increase of 5% for the year continues our
recent record of dividend increases in excess of inflation.
Board
It is with regret that I inform you that Christopher Clark has
given notice that he wishes to retire from the Board on 31 May
2012, having reached his 70(th) birthday. Christopher has served on
the Board, as chairman of the audit committee and as a member of
the nomination and remuneration committees since 1 January 2006,
and I would like to thank him for his loyal and diligent service
during this period and wish him well in his retirement.
Outlook
Our property portfolio currently has no voids, the ground floor
at Victoria having been let as from 1 March. Recent industry
surveys show that retail voids are running nationally at 14.3% with
evidence of trading stress in many High Streets. We continue to
monitor closely the health of our existing and potential tenants.
The location of the bulk of our property investments, both in terms
of dominance in the southern counties and location within prime
areas of most cities and towns in which we are represented,
continues to result in a better than average experience in values,
rents and voids. We continue to manage our assets well and are
alert to possible opportunities within the portfolio. We see our
principal task in the next year or two as being to take advantage
of the weak market to invest in properties which will enable us to
continue to grow revenues and asset values over the medium term. We
have the financial strength and the borrowing capacity; we continue
though to be prudent and do not want to compromise on our criteria.
In continuing uncertain times, I hope shareholders will draw
comfort from our strategy.
J HEWITT
Chairman
14 March 2012
Consolidated statement of comprehensive income
for the year ended 31 December 2011
Note 2011 2010
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gross rental revenue 2,129 - 2,129 2,053 - 2,053
Property operating
expenses (303) - (303) (245) - (245)
-------- -------- -------- -------- -------- --------
Net rental income 1,826 - 1,826 1,808 - 1,808
-------- -------- -------- -------- -------- --------
Realised gains on
investment property 360 - 360 108 - 108
Realised losses
on investment property (82) - (82) (8) - (8)
-------- -------- -------- -------- -------- --------
Net gains on investment
property 278 - 278 100 - 100
-------- -------- -------- -------- -------- --------
Valuation gains
on investment property - 801 801 - 1,735 1,735
Valuation losses
on investment property - (1,072) (1,072) - (158) (158)
-------- -------- -------- -------- -------- --------
Net valuation (losses)/gains
on investment property - (271) (271) - 1,577 1,577
-------- -------- -------- -------- -------- --------
Dividend revenue 261 - 261 234 - 234
Gains on equity
investments - 397 397 - 718 718
Losses on equity
investments - (587) (587) - (209) (209)
-------- -------- -------- -------- -------- --------
Net investment income/(expense) 261 (190) 71 234 509 743
-------- -------- -------- -------- -------- --------
Administration expenses (335) - (335) (330) - (330)
-------- -------- -------- -------- -------- --------
Net operating profit
before net finance
income/(expense) 2,030 (461) 1,569 1,812 2,086 3,898
-------- -------- -------- -------- -------- --------
Finance income 15 - 15 10 - 10
Finance expenses - - - (1) - (1)
-------- -------- -------- -------- -------- --------
Net finance income 15 - 15 9 - 9
-------- -------- -------- -------- -------- --------
Profit/(loss) before
tax 2,045 (461) 1,584 1,821 2,086 3,907
Income tax credit/(expense) 1 21 119 140 144 (89) 55
Total profit and
comprehensive income
for the year 2,066 (342) 1,724 1,965 1,997 3,962
-------- -------- -------- -------- -------- --------
Basic and diluted
earnings per share 3 40.1p (6.7p) 33.4p 38.0p 38.7p 76.7p
Consolidated statement of financial position
at 31 December 2011
Note 2011 2010
GBP'000 GBP'000
Assets
Non-current assets
Investment property 4 30,787 30,705
Equity investments 5 5,598 5,608
-------- --------
Total non-current assets 36,385 36,313
-------- --------
Current assets
Trade and other receivables 217 93
Cash and cash equivalents 1,926 2,472
--------
Total current assets 2,143 2,565
Total assets 38,528 38,878
-------- --------
Liabilities
Current liabilities
Current income tax - 215
Trade and other payables 681 897
-------- --------
Total current liabilities 681 1,112
-------- --------
Non-current liabilities
Deferred tax liabilities 624 764
-------- --------
Total non-current liabilities 624 764
-------- --------
Total liabilities 1,305 1,876
-------- --------
Net assets 37,223 37,002
--------
Equity
Issued share capital 1,292 1,292
Revaluation reserve
- property 4,904 6,670
- other 1,592 1,750
Capital redemption reserve 95 95
Realised capital reserve 21,428 19,810
Retained earnings 7,912 7,385
--------
Total equity 37,223 37,002
--------
Consolidated statement of changes in equity
2011 Issued Revaluation Capital Realised Retained
reserves
share Property Other redemption capital earnings Total
capital reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2011 1,292 6,670 1,750 95 19,810 7,385 37,002
-------- --------- -------- ----------- --------- --------- --------
Dividends - - - - - (1,503) (1,503)
Reserve transfers:
Non-distributable
items recognised
in income
statement:
Revaluation
losses - (271) (238) - - 509 -
Tax on revaluation
gains/(losses) - - 109 - - (109) -
Realised gains - - - - (40) 40 -
Surplus attributable
to assets
sold in the
year - (1,629) (29) - 1,658 - -
Excess of
cost over
revalued amount
taken to retained
earnings - 134 - - - (134) -
-------- --------- -------- ----------- --------- --------- --------
Transactions
with owners - (1,766) (158) - 1,618 (1,197) (1,503)
-------- --------- -------- ----------- --------- --------- --------
Profit and
total comprehensive
income for
the year - - - - - 1,724 1,724
-------- --------- -------- ----------- --------- --------- --------
At 31 December
2011 1,292 4,904 1,592 95 21,428 7,912 37,223
======== ========= ======== =========== ========= ========= ========
2010 Issued Revaluation Capital Realised Retained
reserves
share Property Other redemption capital earnings Total
capital reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2010 1,292 5,696 2,656 95 18,229 6,467 34,435
-------- --------- -------- ----------- --------- --------- --------
Dividends - - - - - (1,395) (1,395)
Reserve transfers:
Non-distributable
items recognised
in income
statement:
Revaluation
gains - 1,577 572 - - (2,149) -
Tax on revaluation
gains/(losses) - - (93) - - 93 -
Realised gains - - - - (58) 58 -
Surplus attributable
to assets
sold in the
year - (254) (1,385) - 1,639 - -
Excess of
cost over
revalued amount
taken to retained
earnings - (349) - - - 349 -
Transactions
with owners - 974 (906) - 1,581 (3,044) (1,395)
-------- --------- -------- ----------- --------- --------- --------
Profit and
total comprehensive
income for
the year - - - - - 3,962 3,962
-------- --------- -------- ----------- --------- --------- --------
At 31 December
2010 1,292 6,670 1,750 95 19,810 7,385 37,002
======== ========= ======== =========== ========= ========= ========
Consolidated statement of cash flows
for the year ended 31 December 2011
2011 2010
GBP'000 GBP'000
Operating activities
Profit for the year 1,724 3,962
Adjustments for:
Net valuation losses/(gains)
on investment property 271 (1,577)
Gain on disposal of investment
property (278) (100)
Loss/(gain) on investments 191 (509)
Finance income (15) (10)
Finance expense - 1
Income tax (credit)/expense (140) (55)
-------- --------
Operating cash flow before
changes in working capital
and provisions 1,753 1,712
(Increase)/decrease in trade
and other receivables (124) 10
(Decrease)/increase in trade
and other payables (216) 120
-------- --------
Cash generated from operations 1,413 1,842
Finance income 15 10
Finance expenses - (1)
Income taxes paid (216) (25)
-------- --------
Net cash flows from operating
activities 1,212 1,826
-------- --------
Investing activities
Purchase of non-current
assets - investment property (2,871) (1,558)
- equity investments (423) (1,028)
Sale of non-current assets
- investment property 2,796 355
- equity investments 243 3,326
-------- --------
Net cash flows from investing
activities (255) 1,095
-------- --------
Financing activities
Dividends paid (1,503) (1,395)
-------- --------
Net cash flows from financing
activities (1,503) (1,395)
-------- --------
Net (decrease)/increase
in cash and cash equivalents (546) 1,526
Cash and cash equivalents
at 1 January 2011 2,472 946
-------- --------
Cash and cash equivalents
at 31 December 2011 1,926 2,472
-------- --------
Notes
for the year ended 31 December 2011
1 Income tax credit
2011 2010
GBP'000 GBP'000
Current tax:
On revenue profits (20) (60)
On capital profits 15 (19)
Prior year overprovision (1) (69)
-------- --------
(6) (148)
Deferred tax (134) 93
-------- --------
Income tax credit (140) (55)
-------- --------
The tax assessed for the year differs from the standard rate of
corporation tax in the UK of 26.25% (2010 28%). The differences are
explained as follows:
2011 2010
GBP'000 GBP'000
Profit before tax 1,584 3,907
-------- --------
Profit before tax multiplied
by standard rate of corporation
tax in the UK of 26.25% (2010
28%). 416 1,094
Effect of:
Tax exempt revenues (69) (66)
Profit not taxable as a result
of REIT status (431) (976)
Chargeable gains/losses less/(more)
than accounting profit 20 (38)
Losses carried forward (25) -
Effect of change in tax rate (50) -
on deferred tax liability
Adjustments to tax charge
in respect of prior periods (1) (69)
Income tax credit (140) (55)
-------- --------
2 Dividends
In 2011 the following dividends have been paid by the
company:
2011 2009
GBP'000 GBP'000
2010 Final: 17.6p per ordinary
share (2009 16.0p) 909 827
2011 Interim: 11.5p per ordinary
share (2010 11.0p) 594 568
----------- -----------
1,503 1,395
----------- -----------
On 14 March 2012 the directors declared a property income
distribution of GBP956,000, 18.5p per share (2010 GBP909,000, 17.6p
per share) payable on 1 June 2012 to shareholders registered at 4
May 2012.
3 Earnings per share
The calculation of earnings per share is based on the total
profit for the year of GBP1,724,000 (2010 GBP3,962,000) and on
5,167,240 shares (2010 5,167,240) which is the weighted average
number of shares in issue during the year ended 31 December 2011
and throughout the period since 1 January 2011. There are no
dilutive instruments.
In order to draw attention to the impact of valuation gains and
losses which are included in the income statement but not available
for distribution under the company's articles of association, an
adjusted earnings per share based on the profit available for
distribution of GBP2,066,000 (2010 GBP1,965,000) has been
calculated.
2011 2010
GBP'000 GBP'000
Earnings:
Basic profit for the year 1,724 3,962
Adjustments for:
Net valuation losses/(gains)
on investment property 271 (1,577)
Losses/(gains) on investments 190 (509)
Income tax on(losses)/gains (119) 89
------------------- -----------
Adjusted earnings 2,066 1,965
------------------- -----------
Per share amount:
Earnings per share (unadjusted) 33.4p 76.7p
Adjustments for:
Net valuation losses/(gains)
on investment property 5.3p (30.5p)
Losses/(gains) on investments 3.7p (9.9p)
Income tax on (losses)/gains (2.3p) 1.7p
------------------- -----------
Adjusted earnings per share 40.1p 38.0p
------------------- -----------
4 Investment property
2011 2010
GBP'000 GBP'000
Valuation at 1 January 30,705 27,825
Additions 2,871 1,558
Disposals (2,518) (255)
Revaluation (losses)/gains (271) 1,577
----------- ----------
Valuation at 31 December 30,787 30,705
----------- ----------
In accordance with IAS 40 the carrying value of investment
properties is their fair value as determined by external valuers.
This valuation has been conducted by Jones Lang LaSalle, and
Cluttons (for our new 2011 acquisition only), as external valuers
and has been prepared as at 31 December 2011, in accordance with
the Appraisal & Valuation Standards of the Royal Institution of
Chartered Surveyors, on the basis of market value. This value has
been incorporated into the financial statements.
The independent valuation of all property assets includes
assumptions regarding income expectations and yields that investors
would expect to achieve on those assets over time. Many external
economic and market factors, such as interest rate expectations,
bond yields, the availability and cost of finance and the relative
attraction of property against other asset classes, could lead to a
reappraisal of the assumptions used to arrive at current
valuations. In adverse conditions, this reappraisal can lead to a
reduction in property values and a loss in net asset value.
5 Equity investments
2011 2010
GBP'000 GBP'000
Valuation at 1 January 5,608 7,397
Additions 423 1,028
Disposals (186) (3,393)
(Deficit)/surplus on revaluation
in excess of cost (238) 572
Revaluation decrease below cost (15) (6)
Revaluation increase still less
than cost 6 10
-------- --------
Valuation at 31 December 5,598 5,608
-------- --------
6 Basis of preparation
The preliminary announcement has been prepared in accordance
with applicable accounting standards as stated in the financial
statements for the year ended 31 December 2010, The accounting
policies remain unchanged except in respect of the new amended
standard IFRS 24 which has no impact on this announcement.
7 Annual General Meeting
The Annual General Meeting will be held on 10 May 2012.
8 Publication of non-statutory accounts
The above does not constitute statutory accounts within the
meaning of the Companies Act 2006. It is an extract from the full
accounts for the year ended 31 December 2011 on which the auditor
has expressed an unqualified opinion and does not include any
statement under section 498 of the Companies Act 2006. The accounts
will be posted to shareholders on or before 11 April 2012 and
subsequently filed at Companies House.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR USSBRUBAOAAR
Highcroft Investments (LSE:HCFT)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Highcroft Investments (LSE:HCFT)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024
