TIDMHCFT
RNS Number : 9574S
Highcroft Investments PLC
23 March 2016
Highcroft Investments PLC
Preliminary results for the year ended 31 December 2015
KEY HIGHLIGHTS
-- Gross property income increased by 12% to GBP3,435,000 (2014 GBP3,079,000)
-- Total profit for the year up 3% to GBP7,235,000 (2014 GBP7,057,000)
-- Unadjusted earnings per share up 3% to 140.0p (2014 136.5p)
-- Net asset value per share up 11% to 1026p (2014 923p)
-- Total property income distribution up 8% to 38.8p per share (2014 36.0p)
-- Medium term debt GBP11,500,000 (2014 GBP4,000,000)
-- Property acquisitions of GBP8,500,000 (net of costs) and disposal proceeds of GBP2,361,000
-- Investment property valuation up 25% to GBP57,964,000 (2014 GBP46,523,000)
-- Cash and liquid equity investments GBP8,007,000 (2014 GBP6,571,000)
Dear Shareholder,
I am pleased to announce our preliminary results for the year
ended 31 December 2015 and to invite you to our Annual General
Meeting on 12 May 2016 which will be held at Thomas House, Langford
Locks, Kidlington, Oxon, OX5 1HR at 12 noon.
Results for the year
I am delighted to report that, following a successful year in
2014, we have continued to make progress in delivering our
strategy. Through targeted acquisitions focused on larger lot
sizes, combined with a prudent use of gearing, we have been able to
increase operating profits from our property assets. We have made
further returns from the sale of property assets and realisations
from equities.
Property: Gross property rental income rose 12% to GBP3,435,000
(2014 GBP3,079,000), with all of this increase arising from the
performance of our commercial properties. This growth includes the
effect of a full year's income from the Ash Vale and Crawley
properties purchased in July 2014 and August 2014 respectively. It
also includes a partial year of income from the new acquisition in
Wisbech, and allowing for reduced income from properties which we
sold in the year and where we had lease expiries and a tenant in
administration. All our properties are currently let and there were
no bad debts in the period. Operating expenses increased by
GBP171,000 to GBP329,000; primarily due to one-off costs at two
properties where we undertook programmes of repair and removal of
asbestos. We made one acquisition in the year of a freehold
multi-let retail park in Wisbech for GBP8,500,000 in May 2015. The
property is let to Currys PC World, Carpetright, Halfords, Dunelm
and Pets at Home. We have been very pleased with the performance of
our assets, with the combination of one rent review and a fixed
increase also helping to increase gross rental income and capital
values.
The sale of the Warrington property, together with two
residential units, yielded gross proceeds of GBP2,361,000 that were
23% in excess of the December 2014 valuations. These proceeds will
be re-invested in line with our strategy. We have been successful
in identifying property investments at attractive yields and
positioned, as we are, between private investors and larger
corporate property investors. We intend to continue to take
advantage of our strong financial position and ability to move fast
to exploit such opportunities. An improved credit market combined
with the company's strong financial position allows us to increase
the return on our investments through a prudent use of debt. Our
properties showed a net valuation gain of GBP4,765,000 for the
year, partly due to the strength of the warehouse sector which
performed well in 2015, and also due to the strategic corporate
acquisition of the Wisbech property which showed a significant
valuation gain. Since the year end we have completed on the sale of
the Kingston property realising gross proceeds of GBP1,125,000.
Equities: Income of GBP182,000, coupled with a realised net loss
of GBP68,000 and an unrealised net loss of GBP347,000, is a result
of the market conditions and the reduction in the level of our
holdings. We released GBP962,000 in net cash from equities during
the year and have released a further GBP493,000 since the year
end.
Administrative expenses: Ongoing administrative expenses
increased by GBP101,000 in 2015, due to a combination of
step-changes in certain costs, as the complexity of the business
increased, including audit and professional fees and directors'
remuneration. Finance costs increased by GBP187,000 due to the
effect of increased bank borrowings in the year.
Financial highlights: Total profit for the year showed a 3%
improvement on 2014, which was itself an excellent year. This
profitability was driven by the capital performance of our property
investments. Excluding the realised gains on investment property,
the underlying profit on revenue activities showed a 13% fall to
GBP368,000 due to the effect of one-off property costs and
increased administration costs, net of the positive effect of the
special dividend income of GBP221,000 received in 2014 as a result
of the Vodafone demerger. This underlying decline was caused by
one-off factors and timings of asset sales and purchases. The
directors make decisions on the balance of our property investments
based upon maximising the medium and long-term position for
shareholders. The year-end net asset value per share increased to
1026p (2014 923p) and our year-end cash position was GBP4,852,000
(2014 GBP2,039,000), whilst readily realisable equity investments
totalled GBP3,155,000 (2014 GBP4,532,000). Our year end bank loans
totalled GBP11,500,000 (2014 GBP4,000,000).
Dividend
We are recommending a final property income distribution of
24.50p per share (2014 22.75p) to be paid on 3 June 2016 to
shareholders registered on 6 May 2016 (with an ex-dividend date of
5 May 2016) making a total of 38.8p for the year (2014 36.0p). This
increase of 8% for the year continues the recent record of
increases well in excess of inflation.
Board
We were pleased to welcome our new senior independent director,
Simon Costa, to the board on 16 May 2015; his particular breadth of
experience provides us with a greater range of market knowledge and
skills which are particularly relevant to our growth
aspirations.
Outlook
We are very pleased with the results for the year and remain
optimistic that we start 2016 from a position of strength upon
which we hope to build through further attractive acquisitions. We
will continue to reduce our investment in equities in line with our
medium term strategy. We have set ourselves some challenging
objectives for 2016 and we expect that our actions will continue to
improve shareholder value via increased dividends and asset
values.
John Hewitt
Chairman
22 March 2016
Enquiries:
Highcroft Investments PLC
John Hewitt / Roberta Miles
01865 840023
Panmure Gordon (UK) Limited
Karri Vuori / Fabien Holler / Jonathan Surr
020 7886 2500
Consolidated statement of comprehensive income
for the year ended 31 December 2015
Note 2015 2014
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gross rental revenue 3,435 - 3,435 3,079 - 3,079
Property operating
expenses (329) - (329) (158) - (158)
-------- -------- -------- -------- -------- --------
Net rental income 3,106 - 3,106 2,921 - 2,921
-------- -------- -------- -------- -------- --------
Realised gains on
investment property 418 - 418 941 - 941
Realised losses
on investment property - - - (4) - (4)
-------- -------- -------- -------- -------- --------
Net gains on investment
property 418 - 418 937 - 937
-------- -------- -------- -------- -------- --------
Valuation gains
on investment property - 4,840 4,840 - 3,785 3,785
Valuation losses
on investment property - (75) (75) - (150) (150)
-------- -------- -------- -------- -------- --------
Net valuation gains
on investment property - 4,765 4,765 - 3,635 3,635
-------- -------- -------- -------- -------- --------
Dividend revenue 182 - 182 437 - 437
Gains on equity
investments - 87 87 - 231 231
Losses on equity
investments - (502) (502) - (606) (606)
-------- -------- -------- -------- -------- --------
Net investment income/(expense) 182 (415) (233) 437 (375) 62
-------- -------- -------- -------- -------- --------
Administration expenses (533) - (533) (432) - (432)
-------- -------- -------- -------- -------- --------
Net operating profit
before net finance
income 3,173 4,350 7,523 3,863 3,260 7,123
-------- -------- -------- -------- -------- --------
(MORE TO FOLLOW) Dow Jones Newswires
March 23, 2016 03:00 ET (07:00 GMT)
Finance income 7 - 7 8 - 8
Finance expense (365) - (365) (178) - (178)
Net finance expense (358) - (358) (170) - (170)
-------- -------- -------- -------- -------- --------
Profit before tax 2,815 4,350 7,165 3,693 3,260 6,953
Income tax credit 1 56 14 70 65 39 104
Total profit and
comprehensive income
for the year attributable
to the owners of
the parent 2,871 4,364 7,235 3,758 3,299 7,057
-------- -------- -------- -------- -------- --------
Basic and diluted
earnings per share 55.6p 84.4p 140.0p 72.7p 63.8p 136.5p
Consolidated statement of financial position
at 31 December 2015
Note 2015 2014
GBP'000 GBP'000
Assets
Non-current assets
Investment property 4 57,964 46,523
Equity investments 5 3,155 4,532
-------- --------
Total non-current assets 61,119 51,055
-------- --------
Current assets
Trade and other receivables 641 415
Cash and cash equivalents 4,852 2,039
--------
Total current assets 5,493 2,454
Total assets 66,612 53,509
-------- --------
Liabilities
Current liabilities
Trade and other payables 1,664 1,312
-------- --------
Total current liabilities 1,664 1,312
-------- --------
Non-current liabilities
Interest bearing loan 6 11,500 4,000
Deferred tax liabilities 425 495
-------- --------
Total non-current liabilities 11,925 4,495
-------- --------
Total liabilities 13,589 5,807
Net assets 53,023 47,702
Equity
Issued share capital 1,292 1,292
Revaluation reserve
- property 14,764 11,332
- other 667 1,335
Capital redemption reserve 95 95
Realised capital reserve 25,586 24,785
Retained earnings 10,619 8,863
-------- --------
Total equity attributable
to the owners of the
parent 53,023 47,702
--------
Consolidated statement of changes in equity
2015 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
2015 1,292 11,332 1,335 95 24,785 8,863 47,702
-------- --------- -------- ----------- --------- --------- --------
Dividends - - - - - (1,914) (1,914)
Reserve transfers:
Non-distributable
items recognised
in income
statement:
Revaluation
gains - 4,765 (278) - - (4,487) -
Tax on revaluation
gains/(losses) - - 14 - - (14) -
Realised gains - - - - 364 (364) -
Surplus attributable
to assets
sold in the
year - (33) (404) - 437 - -
Excess of
cost over
revalued amount
taken to retained
earnings - (1,300) - - - 1,300 -
-------- --------- -------- ----------- --------- --------- --------
Transactions
with owners - 3,432 (668) - 801 (5,479) (1,914)
-------- --------- -------- ----------- --------- --------- --------
Profit and
total comprehensive
income for
the year - - - - - 7,235 7,235
-------- --------- -------- ----------- --------- --------- --------
At 31 December
2015 1,292 14,764 667 95 25,586 10,619 53,023
======== ========= ======== =========== ========= ========= ========
2014 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
2014 1,292 7,353 1,972 95 24,220 7,496 42,428
-------- --------- -------- ----------- --------- --------- --------
Dividends - - - - - (1,783) (1,783)
Reserve transfers:
Non-distributable
items recognised
in income
statement:
Revaluation
losses - 3,635 (65) - - (3,570) -
Tax on revaluation
gains/(losses) - - (7) - - 7 -
Realised gains - - - - 756 (756) -
Surplus attributable
to assets
sold in the
year - 756 (565) - (191) - -
Excess of
cost over
revalued amount
taken to retained
earnings - (412) - - - 412 -
Transactions
with owners - 3,979 (637) - 565 (5,690) (1,783)
-------- --------- -------- ----------- --------- --------- --------
Profit and
total comprehensive
income for
the year - - - - - 7,057 7,057
-------- --------- -------- ----------- --------- --------- --------
At 31 December
2014 1,292 11,332 1,335 95 24,785 8,863 47,702
======== ========= ======== =========== ========= ========= ========
Consolidated statement of cash flows
for the year ended 31 December 2015
2015 2014
GBP'000 GBP'000
Operating activities
Profit before tax on ordinary
activities 7,165 6,953
Adjustments for:
Net valuation gains on investment
property (4,765) (3,635)
Net gain on disposal of investment
property (418) (937)
Net loss on investments 415 375
Finance income (7) (8)
Finance expense 365 178
Operating cash flow before
changes in working capital
and provisions 2,755 2,926
(Increase)/decrease in trade
and other receivables (226) 7
Increase in trade and other
payables 352 152
-------- --------
Cash generated from operations 2,881 3,085
Finance income 7 8
Finance expense (365) (178)
Income taxes received - (5)
-------- --------
Net cash flows from operating
activities 2,523 2,910
-------- --------
Investing activities
Purchase of non-current assets
- investment property (8,590) (6,084)
(MORE TO FOLLOW) Dow Jones Newswires
March 23, 2016 03:00 ET (07:00 GMT)
- equity investments (7) (649)
Sale of non-current assets
- investment property 2,332 3,548
- equity investments 969 969
-------- --------
Net cash flows from investing
activities (5,296) (2,216)
-------- --------
Financing activities
Dividends paid (1,914) (1,783)
New bank borrowings 7,500 -
-------- --------
Net cash flows from financing
activities 5,586 (1,783)
-------- --------
Net increase/(decrease) in
cash and cash equivalents 2,813 (1,089)
Cash and cash equivalents at
1 January 2015 2,039 3,128
-------- --------
Cash and cash equivalents at
31 December 2015 4,852 2,039
-------- --------
Notes
for the year ended 31 December 2015
1 Income tax credit
2015 2014
GBP'000 GBP'000
Current tax:
On revenue profits (13) (65)
On capital profits (43) (51)
Prior year underprovision/(overprovision)
on capital profits - 5
-------- --------
(56) (111)
Deferred tax 14 7
-------- --------
Income tax credit (70) (104)
-------- --------
The tax assessed for the year differs from the standard rate of
corporation tax in the UK of 20% (2014 21.5%).
The differences are explained as follows:
2015 2014
GBP'000 GBP'000
Profit before tax 7,165 6,953
-------- --------
Profit before tax multiplied
by the standard rate of corporation
tax in the UK of 20% (2014
21.5%) 1,433 1,495
Effect of:
Tax exempt revenues 33 (64)
Profit not taxable as a result
of REIT status (1,635) (1,611)
Chargeable gains less than
accounting profit 56 116
Losses carried forward 57 (36)
Effect of change in tax rate
on deferred tax liability (14) (9)
Adjustments to tax charge
in respect of prior periods - 5
Income tax credit (70) (104)
-------- --------
2 Dividends
In 2015 the following dividends have been paid by the
company:
2015 2014
GBP'000 GBP'000
2014 Final: 22.75p per ordinary
share (2013 22.75p) 1,175 1,098
2015 Interim: 14.3p per ordinary
share (2014 13.25p) 739 685
----------- -----------
1,914 1,783
----------- -----------
On 22 March 2016 the directors declared a property income
distribution of GBP1,266,000, 24.50p per share (2014 GBP1,176,000,
22.75p per share) payable on 3 June 2016 to shareholders registered
at 6 May 2016.
3 Earnings per share
The calculation of earnings per share is based on the total
profit for the year of GBP7,235,000 (2014 GBP7,057,000) and on
5,167,240 shares (2014 5,167,240) which is the weighted average
number of shares in issue during the year ended 31 December 2015
and throughout the period since 1 January 2014. There are no
dilutive instruments.
In order to draw attention to the impact of valuation gains and
losses which are included in the statement of comprehensive income
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 GBP2,871,000 (2014 GBP3,758,000) has
been calculated.
2015 2014
GBP'000 GBP'000
Earnings:
Basic profit for the year 7,235 7,057
Adjustments for:
Net valuation gains on investment
property (4,765) (3,635)
Losses/(gains) on investments 415 375
Income tax on (losses)/gains (14) (39)
------------------ ------------------
Adjusted earnings 2,871 3,758
------------------ ------------------
Per share amount:
Earnings per share (unadjusted) 140.0p 136.5p
Adjustments for:
Net valuation gains on investment
property (92.2p) (70.3p)
Losses/(gains) on investments 8.0p 7.2p
Income tax on (losses)/gains (0.2p) (0.7p)
------------------ ------------------
Adjusted earnings per share 55.6p 72.7p
------------------ ------------------
4 Investment property
2015 2014
GBP'000 GBP'000
Valuation at 1 January 46,523 39,415
Additions 8,590 6,084
Disposals (1,914) (2,611)
Revaluation gains/(losses) 4,765 3,635
----------- -----------
Valuation at 31 December 57,964 46,523
----------- -----------
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 Knight Frank LLP, as external
valuers, and has been prepared as at 31 December 2015, 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 uses market
evidence and also 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
2015 2014
GBP'000 GBP'000
Valuation at 1 January 4,532 5,227
Additions 7 649
Disposals (1,038) (1,205)
Deficit on revaluation in
excess of cost (277) (65)
Revaluation decrease below
cost (71) (76)
Revaluation increase still
less than cost 2 2
-------- --------
Valuation at 31 December 3,155 4,532
-------- --------
6 Interest bearing loan
2015 2014
GBP'000 GBP'000
Medium term bank loans 11,500 4,000
-------- --------
The medium term bank loans
comprise amounts falling
due as follows:
Between one and two years - -
Between two and five years 4,000 -
Over five years 7,500 4,000
-------- --------
11,500 4,000
-------- --------
7 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 2014. The accounting
policies remain unchanged.
8 Annual General Meeting
The Annual General Meeting will be held on 12 May 2016.
9 Publication of non-statutory accounts
(MORE TO FOLLOW) Dow Jones Newswires
March 23, 2016 03:00 ET (07:00 GMT)
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
