Canary Wharf Group - Final Results - Part 1
RNS No 6217b
CANARY WHARF GROUP PLC
17 September 1999
Part 1
PRELIMINARY ANNOUNCEMENT OF RESULTS
YEAR ENDED 30 JUNE 1999
FINANCIAL HIGHLIGHTS
Year Year
ended ended
30 June 30 June Change
1999 1998
£m £m %
Turnover - rents and 79.6 52.3 52.2
service charges
Gross profit 51.7 27.0 91.5
Operating profit 25.0 8.5 194.1
Net interest payable (67.6) (104.7) 35.4
Loss on ordinary
activities before and
after tax (42.8) (96.3) 55.6
Basic and diluted loss per
share (7.9)p (51.8)p
At At
30 June 30 June
1999 1998 Change
£m £m %
Investment properties (1) 1,479.0 1,341.6 10.2
Properties under
construction and
properties held for
development (2) 535.4 170.9
Net debt (155.3) (772.0)
Deferred income (539.3) (109.2)
Other net liabilities (3) (112.1) (37.3)
------- -------
Net assets at net book
value 1207.7 594.0
At Per
30 June Listing
1999 Particu- Change
lars
£m £m %
Properties under
construction and
properties held for
development
- at Open Market Value 1,377.5 1,194.0 15.4
- at present value of Net
Realisable Value (4) 2,572.0 2,436.0 5.6
(1) Investment properties stated at Open Market Value
(2) Properties under construction and properties held for
development stated at cost
(3) Including accrual for final contribution to the Jubilee
Line Extension of £50.2 million
(4) Refer to Valuations on pages 4 and 5 of the preliminary
announcement for an explanation of the basis of valuation
AT 30 JUNE 1999:
- The group's investment portfolio (totalling 3.4 million
square feet) was 99% let
- Properties under construction totalled 3.6 million square
feet of which 2.8 million square feet was pre-let or
subject to agreements to be sold upon completion.
DURING THE YEAR
- An agreement to construct a 1.1 million square foot
headquarters building for the HSBC Group was signed in
October 1998.
- An agreement for the lease of approximately 600,000
square feet in a new 1.2 million square foot tower was
signed with Citigroup.
- Infrastructure works commenced on the former Heron Quays.
- The company's shares were admitted for listing on the
London Stock Exchange generating net proceeds of £572.5
million.
- The principal and accrued interest on the group's senior
secured and capital notes totalling £366.6 million was
repaid.
- Concurrent with the flotation Sir Martin Jacomb, Sir John
Carter, Christopher Jonas, Michael Price, Robert Speirs
and Andrew Tisch were appointed as non-executive
directors.
- The company entered into an agreement with London
Underground Limited (LUL) whereby all of the remaining
land and security mortgaged in connection with the
group's contributions to the Jubilee Line Extension were
released and the company agreed to pay LUL in full and
final satisfaction of all monies due to it £50.2 million
in November 2000.
Paul Reichmann, the Chairman, stated:
Our flotation last spring considerably strengthened our
financial position. Part of the flotation proceeds were used
to reduce debt and the rest will be put towards future
development expenditure. As we head into the new millennium,
we are optimistic and confident not only about Canary Wharf
but also about the future of London as the premier business
centre of Europe and the future of the London property market.
CONTACTS
George Iacobescu
Chief Executive
Peter Anderson
Managing Director, Finance
Canary Wharf Group plc
Telephone: 0207 418 2000
David Beck
Bell Pottinger Financial
Telephone: 0207 353 9203
A copy of the annual report will be sent to shareholders and
copies will be made available to the public on request to the
Company Secretary at the registered office, One Canada Square,
Canary Wharf, London, E14 5AB.
CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT
Canary Wharf achieved three important milestones this year. In
April, the company completed the initial public offering of
its shares on the London Stock Exchange and we are extremely
pleased to be reporting to you for the first time as a public
company.
The second milestone is the commencement of construction of
two new towers at Canary Wharf. In November last year HSBC
committed to acquire a 1.1 million square foot tower to
consolidate their U.K. and worldwide headquarters operations.
In March, in addition to the 560,000 square foot building they
had already agreed to acquire, Citigroup committed to an
additional 600,000 square feet in a new 1.2 million square
foot tower on Canada Square. This will bring Citigroup's
total occupancy to over 1.1 million square feet.
Finally, we virtually completed the letting of the existing
buildings at Canary Wharf with a 100,000 square foot lease to
the Bank of New York. We are now over 99% let and only the
top floor of the One Canada Square Tower remains available.
The triptych of towers formed by One Canada Square, the Norman
Foster designed HSBC tower and the Cesar Pelli designed
Citigroup tower will form a dramatic centrepiece to Canary
Wharf and is an important step in development terms.
These commitments underscore two clear trends in the London
market. First, the need for large space users to consolidate
from multiple locations to improve business efficiencies and
reduce overall occupancy costs. Second, the continuing
consolidation in the financial services sector is driving the
need to combine the businesses, not just for operating
efficiency, but perhaps more importantly to bring together key
people and cultures to achieve the synergies anticipated by
the mergers.
The Citigroup, HSBC and One Canada Square towers are located
to the north of the new Jubilee Line station. To the south of
the station we have redesigned Jubilee Park in order to create
a 6 acre park, the largest public space yet at Canary Wharf,
and give significantly greater prominence to the two towers
that are planned for that area.
We are undertaking the coffer dams and related infrastructure
work necessary to create the foundations for the 2.5 million
square foot development site to the south of the Tower. By
progressing this work now, we will be able to reduce by 18
months the development period of these buildings once they are
committed. This strategy is an important step in maintaining
our development timetable. We are determined to complete the
development of the future phases within five to seven years,
and in our judgement we are on track to achieve that goal.
We currently have seven buildings totalling 3.6 million square
feet in the course of construction, of which 2.8 million
square feet have been committed. All of the projects are on
or ahead of schedule and are on or below budget. Two buildings
totalling 473,000 square feet developed for CSFB reached
practical completion in May and September respectively. The
first building is already partially occupied, and the second
building is expected to be occupied within 14 months of
signing of the lease commitment in July 1998. These two
buildings will bring CSFB's total occupancy at Canary Wharf to
over 1 million square feet.
A new 65,000 square foot retail mall and 950 space parking
complex, Canada Place, will open in March 2000. The retail
mall is over 90% let, and, we expect, will be fully occupied
at the time of opening. The complex has been built at the
concourse level under the new Canada Square Park and
pedestrian passageways will link directly into the new Jubilee
Line station and all of the buildings surrounding Canada
Square, including the One Canada Square Tower and the existing
retail space in Cabot Place.
Citibank's 560,000 square foot UK headquarters building is
expected to reach practical completion in December, with
occupation in early 2000. The two new towers for HSBC and
Citigroup are on schedule for completion incrementally from
late 2001 to early 2002. We are also constructing the
foundations and basement levels up to grade in the building
adjoining the HSBC tower in Canada Square, which will reduce
the development time for that building once it is committed to
a tenant by over 12 months.
As part of these works we are completing two major new public
spaces, Canada Square Park and Columbus Courtyard. Canada
Square will be a two acre, fully landscaped park with mature
trees and landscaping. A central focal point will be a
specially commissioned skylight into the retail mall below,
designed by Ron Arad. Columbus Courtyard will be an Italinate
courtyard incorporating water elements and major sculptures.
Our flotation last spring considerably strengthened our
financial position. Part of the flotation proceeds were used
to reduce debt and the rest will be put towards future
development expenditure. As at 30 June we had reduced our
balance sheet gearing, taking net debt (disregarding
prepayments on building contracts) as a percentage of net
assets, to 39.4%. The additional liquidity provided by the
flotation, coupled with our debt capacity, means we should
have sufficient liquidity to pursue all of our planned
development activities, even allowing for any future
acquisitions.
At Canary Wharf we are committed to a number of charitable
causes, including those involving the local community. We
believe it is important to support local schools and community
projects, a sentiment shared by many of our tenants and
reflected in their extensive community support. We are also
active in promoting job training schemes and have provided
space for a Skillsmatch office, which seeks to find jobs for
the local community with Canary Wharf companies.
As we head into the new millennium, we are optimistic and
confident not only about Canary Wharf but also about the
future of London as the premier business centre of Europe and
the future of the London property market. The demand for space
in London is well balanced. Media, telecoms, information
technology, and professional firms are all assessing their
space requirements. The financial services industry continues
to grow and consolidate, driving a continual reassessment of
not only space requirements but also space configuration.
Canary Wharf and the City are complementary providers of space
and both markets must grow to meet successfully the demands of
a dynamic business environment in London.
The supply and demand equation in London has not been
distorted by bank lending to speculative schemes. Rental
levels are firm with an upward bias but have not raced ahead
as in previous cycles, which can make occupiers reluctant to
commit to new space. Canary Wharf is particularly well placed
to provide the large buildings and floorplates required by
major users. Our continued investment in infrastructure and
foundations to cut delivery times, coupled with a moderate
amount of speculative construction, also means we can offer
tenants assured occupancy more quickly than many competing
schemes. With the opening of the Jubilee Line Extension this
autumn, Canary Wharf will be fully integrated into London's
transport infrastructure. Green Park, in the heart of the
West End, will be only 15 minutes travel time away and
Waterloo and London Bridge will be within 11 and 7 minutes'
reach respectively. Based on this combination of positive
factors, we are looking forward to the continued growth and
success of your company.
In conclusion, on behalf of the board we express our thanks
and appreciation to all the company's executives and
employees, who have worked with great dedication and drive in
the past year and whose efforts contributed in no small
measure to the company's successful flotation.
OPERATING AND FINANCIAL REVIEW
Property portfolio
The activities of the group are concentrated on the Canary
Wharf development (on the former Canary Wharf and Heron
Quays). The group has two principal business streams:
property investment and property development. The investment
arm comprises seven completed properties (out of the eleven
originally constructed) totalling 3.4 million square feet of
net internal area ('NIA'). As well as the rental income
generated from the seven completed properties, 99.2% of which
have been leased, the group generates income from managing the
entire Canary Wharf estate which, in addition to the completed
properties in the ownership of the group, includes four
properties totalling 1.4 million square feet which are in
other ownerships.
At the time of approving the group's this announcement seven
buildings (totalling 3.6 million square feet NIA) were under
construction. In addition the group owns land on which it
proposes to build a further 5.2 million square feet.
The group's investment property portfolio at 30 June 1999
comprised:
Approx. External
Net % Valuation
Property Address Internal Leased £m Principal Tenants
Area (sq
ft)
7 Westferry 175,000 98.3 67.0 EDS, EMEA,
Circus Texaco, Edward S
Jones
10 Cabot Square 635,900 100.0 233.0 Barclays Bank,
WPP Group
20 Cabot Square 558,400 99.8 233.0 Morgan Stanley
Dean Witter,
Barclays Bank
One Canada 1,235,200 98.1 615.0 Daily Telegraph,
Square KPMG, Mirror
Group Newspapers,
State Street
Bank, Bear
Stearns, Bank of
New York
25 North 359,800 100.0 146.0 Financial
Colonnade Services
Authority
30 South 294,500 100.0 123.0 London
Colonnade Underground
Cabot Place 96,300 100.0 42.0 Various retail
tenants including
leading high
street names
Car Parks - - 20.0
--------- ------ --------
Total 3,355,100 99.2 1,479.0
========= ====== ========
Properties under construction at 30 June 1999 comprised:
Approx
Net Expected
Property Address Internal Completion Date Status
Area (sq
ft)
17 Columbus 198,000 September 1999 Pre-let to CSFB
Courtyard
20 Columbus 275,000 December 1999 Agreed to be sold
Courtyard to CSFB
33 Canada Square 560,000 December 1999 Agreed to be leased
to Citibank
Canada Place 65,000 March 2000 Partially pre-let
Retail Centre
15 Westferry 175,000 November 2000 Unlet
Circus
10 Canada Square 1,100,000 April 2002 Agreed to be sold
to HSBC Group
25 Canada Square 1,220,000 May 2002 600,000 sq ft
agreed to be leased
to Citigroup
---------
3,593,000
=========
Construction work on the new 560,000 square foot headquarters
building for Citibank (33 Canada Square) began in the first
quarter of 1997 and the building was topped out in May 1998.
Construction is expected to have been completed in December
1999.
In January 1998 construction commenced on a 275,000 square
foot building (20 Columbus Courtyard) which reached practical
completion to shell and core in May 1999. Upon completion
later in the year, the building will be sold to CSFB to
provide expansion space for their existing headquarters at
Canary Wharf. In May 1998 the group commenced construction of
a 198,000 square foot building (17 Columbus Courtyard) which
was subsequently let in its entirety to CSFB. Construction of
this building was completed in September 1999.
In April 1998 the group commenced construction of the Canada
Place retail centre which will provide 65,000 square feet of
retail space and a further 950 parking spaces. Negotiations
for the pre-letting of this facility are well advanced and at
the date of approving this announcement 90% of the available
retail space had been committed or was in solicitors' hands.
The centre is expected to open in the spring of 2000.
In October 1998 the group entered into an agreement for the
sale upon completion of a new 1.1 million square foot building
for the HSBC Group (10 Canada Square). Construction commenced
in January 1999 with the completion forecast for April 2002.
In February 1999 the group entered into an agreement for lease
with Citigroup of 600,000 square feet in a new 1.2 million
square foot building (25 Canada Square). Construction
commenced in March 1999 with completion forecast for May 2002.
The group has also commenced construction of one other
building (15 Westferry Circus) which, when completed in the
autumn of 2000, will provide approximately 175,000 square feet
of office space.
As well as construction of the seven buildings referred to
above, work has commenced on piling and the construction of
coffer dams along the southern boundary of the former Heron
Quays, as a preliminary to the development of that part of the
estate. Construction of further buildings will commence as
and when market conditions allow.
The investment properties of the group are under lease to high
quality tenants which provide a diversified income stream. At
30 June 1999 the weighted average un-expired lease term for
the office portfolio was 19.6 years (or 14.3 years after
taking account of break options). Only 21.6% of the square
footage under lease will expire or be capable of being
terminated by the tenant during the next ten years. As a
result of the expiry of rent free periods, stepped rents and
rent reviews, the group's aggregate rental income is expected
to increase significantly over the coming years.
Valuations
The net assets of the group, as stated in its consolidated
balance sheet as at 30 June 1999, were £1,207.7 million. In
arriving at this total:
(i) properties held as investments were carried at £1,479.0
million, which represents the Open Market Value of those
properties at that date as determined by the Company's
external valuers, FPDSavills or CB Hillier Parker;
(ii) properties under construction and properties held for
development, shown as fixed assets, were carried at £84.8
million and £140.6 million respectively, representing
their cost to the group; and
(iii)properties under construction and properties held for
development, shown as current assets, were carried at
£310.0 million, representing their cost to the group.
However, on the basis of Open Market Value at 30 June 1999,
FPDSavills and CB Hillier Parker have jointly valued all
properties under construction at £727.5 million and they have
given a joint opinion that the present value at that date of
the Net Realisable Value of the properties under construction
was £1,023.0 million.
The valuers have in addition provided joint opinions as at 30
June 1999 of properties held for development. The Open Market
Value has been given at £650.0 million and the present value
of the Net Realisable Value at £1,549.0 million.
We first reported the present value of the Net Realisable
Value in the Listing Particulars issued in March 1999. We
instructed the joint valuers to update their valuation to
reflect the position at 30 June 1999 using a consistent
approach and methodology to that used for the purposes of the
Listing Particulars.
Net Realisable Value is defined in Statement of Standard
Accounting Practice 9 as 'the actual or estimated selling
price (net of trade but before settlement discounts) less:
(a) all further costs to completion; and (b) all costs to be
incurred in marketing, selling and distributing'. This same
definition of Net Realisable Value is reproduced in Practice
Statement 21 of the RICS Manual 'Valuations of Trading Stock
and Work in Progress, including Land and Buildings'. The Net
Realisable Value of the group's properties under construction
and properties held for development comprises an assessment of
the total value to the group, arising from owning and
developing those properties, being the aggregate of:
a. the Open Market Value of the land;
b. developer's profit;
c. the effect of Enterprise Zone Allowances; and
d. the saving in financing holding costs on the site arising
from the fact that the land is already in the ownership
of the group.
Thus, Net Realisable Value allows consideration to be given to
the enhancement in value arising from (b), (c) and (d) which
do not form part of Open Market Value. As the net figure so
produced represents the value at the end of the project, the
Net Realisable Value is discounted back to the date of
assessment, in order to arrive at the present value of the Net
Realisable Value. The discount rate adopted for this purpose
is 7.1%. This compares with a discount rate of 6.6% adopted
in the Listing Particulars, the increase reflecting movements
in money market rates over the period to 30 June 1999.
Operating results
In the following review of operating results, references to
1999 and 1998 should be read as references to the years ended
30 June 1999 and 30 June 1998 respectively.
The group's turnover is generated primarily by the rents and
service charges it levies on its tenants at Canary Wharf.
Turnover increased from £52.3 million in 1998 to £79.6 million
in 1999, an increase of £27.3 million or 52.2%. Rental income
increased from £29.0 million to £50.0 million, an increase of
£21.0 million or 72.4%, due primarily to the letting of
substantially all of the remaining space in the completed
properties and the expiry of rent-reduced and rent-free
periods. Service charge income increased from £15.9 million
to £21.4 million, an increase of £5.5 million or 34.6%, due
primarily to the increased level of occupancy on the estate.
Miscellaneous income, comprising ground rents, insurance
recoveries and tenant service income over and above standard
service charge recoveries, increased from £7.4 million to £8.2
million, an increase of £0.8 million, again due primarily to
the increased level of occupancy on the estate.
Rents payable and property management costs increased from
£25.3 million to £27.9 million, an increase of £2.6 million or
10.3%, due primarily to the increase in occupancy on the
estate. After allowing for service charge and other
recoveries included within turnover, the service charge void
was eliminated for the first time in 1999.
Gross profits increased from £27.0 million in 1998 to £51.7
million in 1999, an increase of £24.7 million or 91.5% over
the previous year. The gross profit percentage for the year
was 64.9% in comparison with 51.6% for 1998. The increase in
the gross profit percentage was attributable to the increase
in turnover.
Administrative expenses increased from £21.5 million in 1998
to £27.8 million in 1999, an increase of £6.3 million. The
directors estimate that £14.4 million (or approximately 51.8%
of the total for 1999) was attributable to the group's
corporate and property investment activities. For the
previous year administrative expenses attributable to these
activities were estimated at £15.0 million, or 69.8% of the
total. Corporate administrative expenses have therefore
remained at a broadly similar level with the previous year.
The remainder of the administrative expenses are attributable
to unallocated overheads associated with the group's
development programme which are expensed to the profit and
loss account (as opposed to costs directly attributable to and
capitalised as part of the cost of construction of particular
buildings). For the year ended 30 June 1999 such unallocated
development overheads totalled £13.4 million representing
approximately 48.2% of administrative expenses. For the
previous year development overheads totalled £6.5 million or
30.2% of the total. The increase in development overheads
over the previous year was partly attributable to letting
costs associated with the agreements relating to 10 and 25
Canada Square. The increased pace of development has also
been a contributory factor. The directors consider that these
development overheads will in due course reduce to an
insignificant level upon completion of the development
programme.
Operating profit increased from £8.5 million in 1998 to £25.0
million in 1999, an increase of £16.5 million. The
improvement in the operating profit earned by the group was
largely attributable to the increase in turnover. Furthermore,
the operating results for the second half of the year
continued the favourable trend established by the first six
months ended 31 December 1998.
Net interest payable reduced from £104.7 million in 1998 to
£67.6 million in 1999. This reduction was the result of the
lower level of long term debt finance following the repayment
of the group's Senior Secured and Capital Notes (see
Borrowings below) and also reflects the fact that an
exceptional charge of £27.1 million was incurred in 1998
relating to the early prepayment of certain of the group's
indebtedness. The repayment of the Senior Secured and Capital
Notes contributed to a lower net interest charge for the
second half of the year in comparison with the first six
months ended 31 December 1998.
After interest, the loss on ordinary activities for the year
was £42.8 million, down by £53.5 million from 1998, driven by
the increase in turnover and reduction in net interest
expense.
No provision for corporation tax has been made in respect of
the year ended 30 June 1999 in view of the loss for the year.
Balance sheet
The group's completed investment property portfolio showed an
underlying increase in value of £137.4 million to £1,479.0
million at 30 June 1999. The increase in value reflects
additions to the investment portfolio, principally as a result
of the fit-out of office space but, more importantly, the
expiry of rent-reduced or rent-free periods and movements in
the property market generally. During the year the central
London office market continued to grow, reflecting a shortage
in availability of high quality office space.
Net assets increased by £613.7 million from £594.0 million at
30 June 1998 to £1,207.7 million at 30 June 1999. Issued
share capital increased during the year from £2.5 million to
£6.8 million as a result of the group's initial public
offering in April 1999 which generated a share premium reserve
of £571.3 million. The group's loss for the year was more than
offset by the increase in the revaluation reserve, amounting
to £125.5 million.
Borrowings
In April 1999 the group issued 183.7 million new ordinary
shares and the group's ordinary shares were admitted for
listing on the London Stock Exchange. The net proceeds from
the issue totalled £572.5 million. Subsequently the group
repaid the balance outstanding on its Senior Secured and
Capital Notes. The balance of the proceeds was retained by the
group for its general corporate purposes and in particular to
fund the commencement of construction of new buildings on the
estate.
At 30 June 1999, net debt (after allowing for cash in hand and
cash collateral) stood at £155.3 million, down from £772.0
million at the previous year end, comprising:
At 30 June At 30
1999 June
1998
£m £m
Senior Secured & Capital Notes - 342.7
Securitised debt 555.9 552.8
Loans 144.5 7.5
Finance lease obligations 471.8 471.9
--------- ---------
Total borrowings 1,172.2 1,374.9
Less: cash collateral for
borrowings (405.9) (408.1)
Less: other cash collateral
excluding prepayments (18.0) (20.1)
--------- ---------
748.3 946.7
Less: cash deposits (272.8) (97.5)
--------- ---------
Net debt excluding prepayments 475.5 849.2
========= =========
Cash deposits arising from
prepayments in respect
of buildings contracted to be sold (320.2) (77.2)
========= =========
The reduction in gross borrowings from £1,374.9 million to
£1,172.2 million reflects the repayment of the Senior Secured
and Capital Notes, offset by drawings under the group's
construction loan facilities and a new facility secured on the
group's retail and parking properties. The reduction in gross
borrowings was accompanied by an increase in cash and term
deposits to £1,016.9 million from £602.9 million as a result
of the group's initial public offering and prepayments in
respect of buildings contracted to be sold upon completion of
development.
At 30 June 1999 the group had undrawn committed construction
facilities of £105.6 million. The group expects initially to
fund its future construction activities either from existing
resources or from additional construction facilities secured
on the completed properties. At the year end the weighted
average cost of debt was 7.5% (1998 8.5%).
Cashflow
Net cashflow from operating activities increased from £9.4
million in 1998 to £42.5 million in 1999, an increase of £33.1
million. Capital expenditure increased from £94.8 million in
1998 to £298.3 million in 1999, reflecting an increase in the
pace of development activity. Capital expenditure was offset
by £426.2 million of prepayments arising from agreements for
the sale of certain buildings upon completion (1998 £100.1
million).
Financing cash flows reduced from £468.8 million in 1998 to
£338.3 million in 1999, a reduction of £130.5 million. In
1998, financing cash flows reflected the completion of certain
finance leasing transactions and the securitisation, net of
the repayment of certain elements of the group's existing
debt. 1999 saw the completion of the initial public offering,
net of the repayment of other elements of the group's existing
debt. This reduction in borrowings has also impacted the net
cash expended on debt service which fell by £13.2 million from
£56.3 million in 1998 to £43.1 million in 1999.
EXTRACTS FROM THE DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE
1999
Dividends and reserves
On 6 April 1999 an interim dividend of £44.6 million was paid
to the shareholders on the register at the close of business
on 31 December 1998 (year ended 30 June 1998 - Nil). The
directors do not recommend the payment of a final dividend
(year ended 30 June 1998 - Nil) and the retained loss of £87.4
million (year ended 30 June 1998 - £96.3 million) is to be
transferred to reserves.
Annual General Meeting
The Annual General Meeting will be held at 11.00 am on
Wednesday 10 November 1999 in Cabot Hall, Cabot Square, Canary
Wharf, London E14.
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30
JUNE 1999
Year Year
ended ended
Notes 30 June 30 June
1999 1998
£m £m
Turnover - rents and service 79.6 52.3
charges
Cost of sales
- rents and property
management costs (27.9) (25.3)
------- -------
GROSS PROFIT 51.7 27.0
Administrative expenses (27.8) (21.5)
Other operating income 1.1 3.0
------- -------
OPERATING PROFIT 2 25.0 8.5
Share of operating loss in 11 (0.2) (0.1)
associates
Interest receivable - group 3 35.6 29.0
Interest payable 4
- group before exceptional item (103.2) (106.6)
- exceptional item - (27.1)
------- -------
LOSS FOR THE FINANCIAL YEAR (42.8) (96.3)
Dividends paid 7 (44.6) -
------- -------
TRANSFERRED TO RESERVES 18 (87.4) (96.3)
======= =======
Loss per share - basic and 8
diluted (7.9)p (51.8)p
======= =======
The above results relate to the continuing activities of the
group and its share of associates.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 30 JUNE 1999
Year Year
ended ended
Notes 30 June 30 June
1999 1998
£m £m
Loss for the financial year of
the group and its share of
associates
- group (87.2) (96.2)
- share of associates (0.2) (0.1)
Unrealised surplus on
revaluation of investment
properties
- group 9 128.0 268.8
------ ------
TOTAL RECOGNISED GAINS AND
LOSSES RELATING TO THE YEAR
40.6 172.5
====== ======
CONSOLIDATED BALANCE SHEET AT 30 JUNE 1999
30 June 30 June
Notes 1999 1998
£m £m
FIXED ASSETS
Investment properties 9 1,479.0 1,341.6
Properties under construction 9 84.8 20.6
Properties held for development 9 140.6 66.7
Other tangible fixed assets 10 0.6 -
Investments 11 6.7 6.9
------- -------
1,711.7 1,435.8
------- -------
CURRENT ASSETS
Properties under construction and 9 310.0 83.6
properties held for development
Debtors 12 32.0 33.6
Cash at bank and in hand 13 1,016.9 602.9
------- -------
1,358.9 720.1
CREDITORS: Amounts falling due
within one year 14 (389.2) (249.8)
------- -------
NET CURRENT ASSETS 969.7 470.3
------- -------
TOTAL ASSETS LESS CURRENT
LIABILITIES 2,681.4 1,906.1
CREDITORS: Amounts falling due
after more than one year 15 (1,470.4) (1,308.1)
Provisions for liabilities and 16
charges (3.3) (4.0)
------- -------
NET ASSETS 1,207.7 594.0
======= =======
CAPITAL AND RESERVES
Called up share capital 17 6.8 2.5
Share premium 18 571.3 -
Reserves
Revaluation reserve 18 714.2 588.7
Capital reserve 18 61.3 61.3
Profit and loss account 18 (145.9) (58.5)
------- -------
SHAREHOLDERS' FUNDS - EQUITY 1,207.7 594.0
======= =======
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE
1999
Year Year
Notes ended ended
30 June 30 June
1999 1998
£m £m
NET CASH INFLOW FROM
OPERATING ACTIVITIES 21 42.5 9.4
------- -------
Returns on investments and
servicing of finance 22 (43.1) (56.3)
Capital expenditure and 22
financial investment 127.9 5.3
Acquisitions 22 (7.0) (2.4)
Equity dividend paid (44.6) -
------- -------
33.2 (53.4)
------- -------
Cash inflow/(outflow) before
management of liquid resources
and financing 75.7 (44.0)
Management of liquid resources 22 (238.7) (361.5)
Financing 22 338.3 468.8
------- -------
INCREASE IN CASH IN THE YEAR 23 175.3 63.3
======= =======
The above cash flows relate to the continuing activities of
the group.
Notes 21 to 23 form an integral part of this consolidated cash
flow statement.
MORE TO FOLLOW
FR LRMBBLLBBMIL
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