Canary Wharf Group - Final Results - Part 3
RNS Number:9229J
Canary Wharf Group PLC
13 September 2001
PART 3
16 SHARE CAPITAL
Authorised Issued, allotted and fully paid
30 June 30 June 30 June 30 June
2001 2000 2001 2000
£m £m £m £m
Ordinary
shares 10.0 10.0 6.9 6.9
of 1p
each
Movements in issued share capital:
Number
Number of ordinary shares in issue at 30 June 2000 685,714,629
Issue on exercise of options (see footnote (3)) 3,381,500
Cancelled under share buy back scheme (2,474,708)
Number of ordinary shares in issue at 30 June 2001
(1) Warrants over 26,867,000 ordinary shares are held by
IPC Advisors Limited, a company owned by a trust for the
benefit of amongst others the Paul Reichmann family. These
warrants are exercisable until 31 December 2005 at a price of
450 pence per share.
(2) In December 1997, the Company granted to European
Investment Bank warrants to subscribe for shares in the
Company in the event of admission to a recognised stock
exchange. Pursuant thereto a total of 8,925,233 such warrants
were issued and became exercisable on 2 April 1999. In April
2000 these warrants were transferred to IPC Advisors Limited.
They remain exercisable until 1 April 2006 at a price of 330
pence per share.
The subscription price for, and the number of shares subject
to, both issues of warrants are subject to adjustment in
certain circumstances, such as capitalisation or rights
issues.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE
2001
(3) On 3 March 1998 options were granted to 17 senior
executives including two existing executive directors under
the Canary Wharf Group plc 1997 Executive Share Option Plan to
subscribe for 4,977,000 ordinary shares. As a result of a
bonus issue of shares on 1 April 1999, and in accordance with
the terms of this Plan, the number of ordinary shares under
option doubled to 9,954,000 shares and the option price was
halved to 79.5 pence per share. During the year ended 30 June
2001, 3,297,500 ordinary shares were issued following the
exercise of options under the Plan, taking the total number of
options exercised to that date to 5,136,000.
(4) Under the terms of an agreement with a former director
of CWHL, options over 184,417 shares were granted to him on 23
March 1999 at a price of 330 pence per share. These options
are exercisable until 31 March 2004. During the year ended 30
June 2001 84,000 ordinary shares were issued following the
exercise of share options by the former director.
(5) On 31 March 1999 options over 10,354,167 shares, with
an option price of 400 pence per share, were granted to
fifteen senior executives, including two existing executive
directors. Also on 31 March 1999 an award of 455,579 shares
was made to 43 executives under the terms of the Canary Wharf
Long Term Incentive Plan (LTIP). These awards are subject to
performance criteria.
(6) On 12 April 1999 176,129 ordinary shares were issued at
a subscription price of 331.5 pence per share to Canary Wharf
Trustees Limited as trustee of the Canary Wharf Share
Participation Plan on behalf of 409 participants.
(7) An award of 14,285 shares was made to an employee on 25
October 1999 under the terms of the LTIP. This award is subject
to performance criteria.
(8) On 31 October 2000 a further award of 1,313,637 shares
was made to 192 employees under the terms of the LTIP.
(9) In January 2001 the group introduced an All Employee
Share Plan. Under the terms of the Plan, over the period to 30
June 2001 employees had acquired 65,659 shares which were held
in trust on their behalf and the group had acquired a further
130,826 shares which were also held in trust on behalf of
these employees.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2001
At 30 June 2001 the following warrants to subscribe for,
options over and rights to receive ordinary shares, remained
outstanding.
Number of Exercise price
ordinary per ordinary
Nature shares share (p)
of
Person entitled Right Exercise period
IPC Advisors Ltd Warrant 26,867,000 450.0 01.04.99 to 31.12.05
IPC Advisors Ltd Warrant 8,925,233 330.0 01.04.99 to 01.04.06
Share Option
Plans
17 employees Option 4,818,000 79.5 03.03.98 to 02.03.08
(including 2
directors)
15 employees Option 10,354,167 400.0 Phased, commencing on
(including 2 01.04.02 all to
directors) 31.03.09
Former director Option 100,417 330.0 01.04.99 to 31.03.04
of CWHL
Long Term
Incentive Plan
44 employees Shares 455,479 - 01.04.02 to 31.03.09
1 employee Shares 14,285 - 25.10.02 to 24.10.09
192 employees Shares 1,313,637 - 31.10.03 to 30.10.10
17. RESERVES
Capital
Share Revaluation Capital Redemption Profit Total
Premium Reserve Reserve Reserve &
Account Loss
Equity reserves: £m £m £m £m £m £m
At 1 July 2000 572.6 971.1 61.3 - (91.8)1,513.2
Revaluation of - 84.4 - - - 84.4
investment properties
Reserve movement in - - - - 1.6 1.6
respect of share
option schemes
Issue of shares under 2.9 - - - - 2.9
Share Option Plans
Acquisition and - - - 0.1(13.7) (13.6)
cancellation of own
shares
Movement for the - - - - 42.5 42.5
financial year
At 30 June 2001 575.5 1,055.5 61.3 0.1(61.4) 1,631.0
The capital reserve arose on the company's acquisition of the CWHL group
on 27 December 1995.
The capital redemption reserve arises from the cancellation of own shares
acquired in connection with the group's share re-purchase programme.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2001
18. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
£m
Shareholders' funds as at 1 July 2000 1,520.1
Issue of share capital 2.9
Credit in respect of share option schemes 1.6
Cancellation of shares (13.6)
Profit for the financial year 42.5
Revaluation surplus 84.4
Shareholders' funds as at 30 June 2001 1,637.9
19 PENSION SCHEMES
The group operates two defined contribution pension schemes. The
assets of these schemes are held in independently administered funds.
The pension cost charge, which amounted to £2,054,165 in the year
(year ended 30 June 2000 - £1,455,744) represents contributions
payable by the group to the schemes.
20 RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
Year ended Year ended
30 June 30 June
2001 2000
£m £m
Operating profit 91.7 102.0
Net profit on disposal of properties - (39.1)
Depreciation charges 0.3 0.3
Amortisation of share option costs 0.7 -
(Increase)/decrease in debtors (53.4) 5.4
Increase in creditors 34.4 15.0
Decrease in provisions (2.6) (0.4)
Net cash inflow from operating activities 71.1 83.2
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2001
21 ANALYSIS OF CASH FLOWS Year ended Year ended
30 June 30 June
2001 2000
£m £m
Returns on investments and
servicing of finance
Interest received 53.4 38.4
Interest paid (66.7) (40.8)
Interest element of finance lease rentals (44.2) (44.7)
Financing expenses (13.1) (6.0)
Net cash inflow/(outflow) (70.6) (53.1)
Capital expenditure and financial investment
Year ended Year ended
30 June 30 June
2001 2000
£m £m
Additions to properties (511.1) (323.7)
Purchase of tangible fixed assets (8.3) (4.6)
Purchase of investment properties - (373.8)
Acquisitions of development properties (92.1) -
Acquisition of own shares to support share
option schemes (8.1) -
Settlement of deferred acquisition (2.1) (15.5)
costs (see note below)
Disposal of properties - 235.0
Deferred income relating to agreements
for sale of property 42.4 19.1
Net cash outflow (579.3) (463.5)
In accordance with the arrangements agreed for the acquisition of the
CWHL Group in December 1995, further deferred payments of £2.1 million
(year ended 30 June 2000 - £15.5 million) were made during the year
ended 30 June 2001 to the vendor (the selling bank group) from funds
set aside for this purpose at the time of acquisition.
Acquisitions Year ended Year ended
30 June 30 June
2001 2000
£m £m
Acquisition of investment (2.1) -
Net cash outflow (2.1) -
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2001
Management of liquid resources
Year ended Year ended
30 June 30 June
2001 2000
£m £m
Cash placed on deposit not available on
demand (224.3) (195.8)
Cash withdrawn from deposit accounts 253.0 155.8
Net cash outflow 28.7 (40.0)
Financing Year ended Year ended
30 June 30 June
2001 2000
£m £m
Issue of shares 2.9 1.4
Purchase of own shares for cancellation (13.7) -
Repayment of secured loans (161.7) (171.2)
Issue of securitised debt 1,029.5 385.0
Drawdown of secured loan and finance lease
premia 161.7 221.9
Net cash inflow 1,018.7 437.1
22 ANALYSIS AND RECONCILIATION OF NET DEBT
1 July Other non-cash 30 June
2000 Cash flow changes 2001
£m £m £m £m
Cash at bank 1,020.6 437.8 - 1,458.4
Amounts on
deposit not (784.1) 28.7 - (755.4)
available
on demand
236.5 466.5 - 703.0
Debt due (923.9) (1,019.9) 0.2 (1,943.6)
after 1 year
Debt due (17.9) - (11.8) (29.7)
within 1 year
Finance (675.1) 44.2 (45.9) (676.8)
leases
(1,616.9) (975.7) (57.5) (2,650.1)
Amounts on 784.1 (28.7) - 755.4
deposit not
available
on demand
Net debt (596.3) (537.9) (57.5) (1,191.7)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2001
Year ended
30 June
2001
£m
Increase in cash in the year 437.8
Increase in debt and lease financing (975.7)
Change in net debt resulting from cash flows (537.9)
Non-cash movement in net debt (57.5)
Movement in net debt in year (595.4)
Net debt at 1 July 2000 (596.3)
Net debt at 30 June 2001 (1,191.7)
23 CONTINGENT LIABILITIES AND FINANCIAL COMMITMENTS
As at 30 June 2001 certain members of the group had given fixed
and floating charges over substantially all of their assets as
security for certain of the group's borrowings and finance lease
obligations as referred to in Note 14. In particular, various members
of the group had, at 30 June 2001, given fixed first ranking charges
over cash deposits totalling £707.2 million and may be called upon to
make a further cash deposit of up to £14.2 million.
As security for the issue of £675 million of securitised debt
(see Note 14) the company has granted a first fixed charge over the
shares of CWF and a first floating charge has been given over all of
the assets of CWF.
As security for the issue of up to £1,850 million of securitised
debt (see Note 14) the company's indirect subsidiary, Canary Wharf
Finance Holdings Limited, has granted a first fixed charge over the
shares of CWFII and a first floating charge has been given over all of
the assets of CWFII.
In October 1998 the group entered into an agreement for the
construction of a headquarters building for the HSBC Group. Liquidated
damages are payable by the group in the event that it fails to comply
with certain contractual obligations in this agreement by a specified
date, which may be extended by force majeure and delay by the HSBC
Group. The directors believe that, on the basis of current progress
and the building programme, no liability to the HSBC Group will arise
under the above provisions.
Commitments of the group for future expenditure:
30 June 30 June
2001 2000
£m £m
Under contract 1,165.8 699.6
The commitments for future expenditure relate to the completion
of development properties where construction was committed at 30 June
2001.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2001
Commitments of the group for the next financial year in respect of
operating leases are analysed as follows:
Land and buildings Land and buildings
30 June 30 June
2001 2000
£m £m
Annual commitment for which the leases expire:
Within one year 0.1 -
Between two and five years - 0.7
After five years 16.7 0.2
24 POST BALANCE SHEET EVENTS
In August 2001, 92,000 sq ft was pre-let to Reebok in the Canada Place
Retail extension (parcel DS8).
In September 2001, the group reached an agreement in principle with
Barclays Plc for the leasing of 650,000 sq ft in a new 1 million sq ft
building (parcel BP1).
Also in September 2001 the group announced that it has agreed terms,
subject to contract, with Allen & Overy for 60,000 sq ft and is in
advanced discussions with Skadden, Arps, Slate, Meagher & Flom LLP for
140,000 sq ft, both lettings being in the new 600,000 sq ft building
at parcel HQ3.
END
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