TIDMWSP
RNS Number : 7291F
Wynnstay Properties PLC
09 November 2022
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement, this information is considered to
be in the public domain.
WYNNSTAY PROPERTIES PLC
("Wynnstay" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHSED 29 SEPTEMBER 2022
9 November 2022
CHAIRMAN'S STATEMENT
Against the background of serious international and domestic
events, economic uncertainties and turmoil in financial markets, I
am pleased to report that Wynnstay has continued to perform well
for shareholders over the six-month period ending 29 September
2022.
Interim Financial Results
The unaudited results are summarised in the table below and
should be read in conjunction with the following commentary and
financial statements:
29 September 29 September
2022 2021
Rental Income -0.2% GBP1,082,000 GBP1,084,000
Property Income -4.3% GBP1,082,000 GBP1,131,000
Operating Income -4.6% GBP800,000 GBP839,000
Income before Taxation -9.7% GBP587,000 GBP650,000
Earnings per share -11.3% 17.2p 19.4p
Net Asset Value per share +19.1% 1,093p 918p
Interim Dividend per share +5.9% 9.0p 8.5p
While rental income for the half-year was broadly static,
decreasing by just 0.2% compared to the same period last year, at
GBP1,082,000 (2021: GBP1,084,000), that total reflects significant
changes within the portfolio. These include the loss of income
following the sale towards the end of the last financial year of
our office property in Surbiton, offset by new income arising from
the successful completion and letting of our three units at
Petersfield Trade Park 2 late last calendar year and increased
income from a number of successful rent reviews, lease renewals and
new lettings within the portfolio mentioned in last year's Annual
Report as well as those completed in the first half of this
financial year which are mentioned below.
No other property income, such as tenant payments for
dilapidations, was received in the half-year (2021: GBP47,000). As
a consequence, and with overall operating costs being at a similar
level to the same period last year, operating income decreased by
4.6% to GBP800,000 (2021: GBP839,000).
In my statement in July, I reported that we had collected all of
the rental income due for the first quarter of the financial year.
I am pleased to report that we have collected 99% of the rental
income due for the second quarter and over 93% of the quarterly and
monthly rental income due to date for the third quarter commencing
29 September 2022.
Borrowings from Handelsbanken of GBP9.945 million at the end of
the half-year (2021: GBP10.0 million) reflect our new refinanced
five-year loan at a fixed rate of 3.61% from December 2021. At the
end of the half-year, we held cash balances of GBP3.2 million
available for use in the business. In addition, we have available
the undrawn GBP5m revolving credit facility with Handelsbanken.
Portfolio
The portfolio was fully let at the end of the half-year, which
is consistent with our past record of high occupancy and low voids.
Stability within our tenant base and fewer rent reviews and lease
renewals has resulted in rather less management activity compared
to the same period last year. However, as already indicated, the
results of the activity to date have been beneficial in generating
increased rental income and in establishing comparable evidence to
support future negotiations and valuations.
For instance, at Quarry Wood Industrial Estate, Aylesford, we
completed the rent review with our longstanding public authority
tenant of one of the larger units on the estate resulting in a
significantly increased rent.
At our office premises at Cosham, the lease to our government
tenant was varied by mutual agreement to remove a tenant break
option that could have been implemented in April 2023. At the same
time we pre-agreed the April 2023 rent review at the existing rent,
which reflected the current estimated rental value adopted by our
valuers, thereby securing our rental income from the property for a
further five years.
Lease renewals have also been successfully completed on two
units at Hailsham, one unit at Ipswich, two units at Lichfield, two
units at Petersfield Business Park and one unit at Uckfield. On the
Beaver Industrial Estate at Liphook, a vacated unit was immediately
relet to a new tenant at a rent that was significantly higher than
that paid by the previous tenant and which should therefore
establish a new rental level for the other units on the estate.
In the majority of cases, it is encouraging to report that the
rents achieved were above, and in some cases significantly above,
the estimated rental values adopted by our valuers in their latest
valuation in March 2022.
Dividend
In light of the financial results, the Board has decided to pay
an increased interim dividend of 9.0p per share (2021: 8.5p) on 16
December 2022 to those shareholders on the register at the close of
business on 18 November 2022.
In the current inflationary conditions, the Board appreciates
the importance to many shareholders of their investment income and
of providing an attractive yield on the Company's shares. The
increase in the interim dividend for this half-year is 5.9%
compared to the same period last year.
Annual General Meeting 2022
At our first fully open Annual General Meeting for three years
due to the impact of Covid-19, attendance was nevertheless
restricted due to the weather conditions, including a record high
temperature in Central London. A number of shareholders who had
indicated their intention to attend the meeting nevertheless
decided not to do so on the day due to the heatwave.
I would like to thank all those shareholders who took the
trouble to complete their proxy forms. All the resolutions before
the meeting were duly passed.
Share buy-back
Following the Annual General Meeting, a General Meeting was held
to consider two resolutions to authorise the Company to make market
purchases of its own shares. Both resolutions were duly passed.
Following the granting of this authority, the Company purchased
15,000 Ordinary Shares at a price of 710p per share at the
beginning of September 2022.
The Directors continue to monitor the availability of shares in
the market through the Company's brokers and should further
opportunities arise may exercise the authority to make further
market purchases of its own shares at an appropriate price where
this is in the best interests of shareholders generally.
Outlook
When I reported to you in the middle of June, I noted that the
UK had entered a further period of uncertainty following the
difficulties resulting from Brexit, Covid-19 and the ongoing war in
Ukraine.
Since then, we have witnessed unexpected political events at
home, forecasts of significantly reduced growth or serious
recession for the UK economy and other world economies, high
inflation for businesses and consumers, especially in the cost of
energy, as well as turmoil in financial markets.
Shareholders may have read commentary in the press about the
potential impact of these events and forecasts on the UK commercial
property market and on the ability of businesses to survive.
As in the financial crisis of 2008-10 and the Covid-19 crisis of
2020-22, we continue to monitor the portfolio and will work closely
with our tenants in these extremely challenging times. In the
previous crises we saw how small business tenants, who are most
likely to be adversely affected, demonstrated their ability to
adapt to conditions. In the portfolio we have a broad spread of
tenants, many of whom are longstanding, across different business
sectors in areas of the country where there is a record of strong
occupational demand and limited supply.
We remain well placed with our principal borrowing being at a
fixed rate, our low loan-to-value ratio and with both cash and a
further borrowing facility available to acquire any suitable
properties which may come to the market unexpectedly as a result of
the current conditions.
Finally, despite the gloom and uncertainties arising from recent
events, I would like to convey to all shareholders and their
families the Board's best wishes for a Happy Christmas and for good
health and happiness in 2023.
Philip Collins
Chairman
9 November 2022
1. STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 25 March
29 September 29 September 2022
2022 2021 GBP'000
GBP'000 GBP'000
Property Income 1,082 1,131 2,308
Property Costs (24) (25) (125)
Administrative Costs (258) (267) (614)
-------------- -------------- ------------
Net Property Income 800 839 1,569
Movement in fair value
of
Investment Properties - - 5,887
Profit on Sale of
Investment Property - - 125
Operating Income 800 839 7,581
Investment Income 5 - -
Finance Costs (218) (189) (379)
-------------- -------------- ------------
Income before Taxation 587 650 7,202
Taxation (121) (123) (1,784)
-------------- -------------- ------------
Income after Taxation 466 527 5,418
============== ============== ============
Basic and diluted
earnings per share 17.2p 19.4p 199.8p
The company has no
other items of comprehensive
income.
2. STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 25 March
29 September 29 September 2022
2022 2021
GBP'000 GBP'000
GBP'000
Non-Current Assets
Investment Properties 38,975 34,871 38,975
Investments 3 3 3
-------------- -------------- ------------
38,978 34,874 38,978
-------------- -------------- ------------
Current Assets
Accounts Receivable 362 262 301
Cash and Cash Equivalents 3,207 1,586 3,491
-------------- -------------- ------------
3,569 1,848 3,792
-------------- -------------- ------------
Current Liabilities
Trade and other payables (766) (1,001) (1,048)
Income Taxes Payable (404) (374) (284)
Bank Loans Payable - (10,000) -
-------------- -------------- ------------
(1,170) (11,375) (1,332)
-------------- -------------- ------------
Net Current Assets / (Liabilities) 2,399 (9,527) 2,460
-------------- -------------- ------------
Total Assets less Current
Liabilities
Less Current
LLiabilities 41,377 25,347 41,438
Non-Current Liabilities
Bank Loans Payable (9,945) - (9,938)
Deferred Tax Payable (1,962) (461) (1,953)
-------------- -------------- ------------
(11,907) (461) 11,891)
)
Net Assets 29,470 24,886 29,547
============== ============== ============
Capital and Reserves
Share Capital 789 789 789
Capital Redemption Reserve 205 205 205
Share Premium Account 1,135 1,135 1,135
Treasury Shares (1,733) (1,570) (1,570)
Retained Earnings 29,074 24,327 28,988
-------------- -------------- ------------
29,470 24,886 29,547
============== ============== ============
Net Asset Value pence per
share 1,093p 918p 1,090p
3. STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 25 March
29 September 29 September 2022
2022 2021
GBP'000 GBP'000
GBP'000
Cash flows from operating activities
Income before taxation 587 650 7,202
Adjusted for:
(Increase) in fair value of investment
properties - (866) (5,887)
Interest received (5) - -
Interest paid 218 189 379
Profit on disposal of investment properties - - (125)
Changes in:
(Increase) / decrease in trade and
other receivables (61) 80 41
(Decrease) / increase in trade and
other payables (162) 197 153
------------- ------------- --------
Cash generated from operations 577 250 1,763
Income taxes paid (111) (123) (284)
------------- ------------- -------------
Net cash from operating activities 466 127 1,479
============= ============= =============
Cash flows from investing activities
Interest and other income received 5 - -
Purchase of investment properties - - (1,583)
Sale of investment properties - - 2,618
Net cash generated from investing
activities 5 -- 1,035
============= ============= =============
Cash flows from financing activities
Interest paid (218) (189) (379)
Dividends paid (380) (353) (583)
Drawdown on bank loans 6 - 9,938
Treasury Shares buy-back costs (163) - -
Repayment of bank loans - - (10,000)
------------- ------------- -------------
Net cash used in financing activities (755) (542) (1,024)
============= ============= =============
(Decrease) / increase in cash and
cash equivalents (284) (415) 1,490
------------- ------------- -------------
Cash and cash equivalents at beginning
of period 3,491 2,001 2,001
------------- ------------- -------------
Cash and cash equivalents at end of
period 3,207 1,586 3,491
============= ============= =============
4. STATEMENT OF CHANGES IN EQUITY
UNAUDITED SIX MONTHSED 29 SEPTEMBER 2022
Share Capital Share Treasury Retained Total
Capital Redemption Premium Shares Earnings
Reserve Account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 26 March 2022 789 205 1,135 (1,570) 28,988 29,547
Total comprehensive income
for the period - - - - 466 466
Changes in Treasury Shares - - - (163) - (163)
Dividends - - - - (380) (380)
--------------------------- -------- ----------- -------- --------- --------- -------
Balance at 29 September
2022 789 205 1,135 (1,733) 29,074 29,470
=========================== ======== =========== ======== ========= ========= =======
UNAUDITED SIX MONTHSED 29 SEPTEMBER 2021
Share Capital Share Treasury Retained Total
Capital Redemption Premium Shares Earnings
Reserve Account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 26 March 2021 789 205 1,135 (1,570) 24,153 24,712
Total comprehensive income
for the period - - - - 527 527
Dividends - - - - (353) (353)
--------------------------- -------- ----------- -------- --------- --------- -------
Balance at 29 September
2021 789 205 1,135 (1,570) 24,327 24,886
=========================== ======== =========== ======== ========= ========= =======
AUDITED YEARED 25 MARCH 2022
Share Capital Share Treasury Retained Total
Capital Redemption Premium Shares Earnings
Reserve Account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 26 March 2021 789 205 1,135 (1,570) 24,153 24,712
Total comprehensive income
for the year - - - - 5,418 5,418
Dividends - - - - (583) (583)
--------------------------- -------- ----------- -------- --------- --------- -------
Balance at 25 March 2022 789 205 1,135 (1,570) 28,988 29,547
=========================== ======== =========== ======== ========= ========= =======
5. ACCOUNTING POLICIES
Wynnstay Properties PLC is a public limited company incorporated
and domiciled in England and Wales (registered no: 22473). The
principal activity of the company is property investment,
development and management. The Company's ordinary shares are
traded on AIM, part of the London Stock Exchange (ISIN:
GB0009842898).
Basis of preparation
These unaudited condensed interim financial statements have been
prepared in accordance with International Financial Reporting
Standard ("IFRS") IAS 34 Interim Financial Reporting. They do not
constitute statutory accounts within the meaning of section 435 of
the Companies Act 2006.
The unaudited condensed interim financial statements should be
read in conjunction with the financial statements of the Company as
at and for the year ended 25 March 2022 which were prepared in
accordance with IFRS. The financial information for the six month
periods ended 29 September 2022 and 29 September 2021 have not been
audited and the auditors have not reported on or reviewed these
interim financial statements. The information for the year ended 25
March 2022 has been extracted from the latest published audited
financial statements.
Key sources of estimation uncertainty and judgements
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that may affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expenses.
Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that
period. The key sources of estimation uncertainty that have a
significant risk of causing material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are those relating to the fair value of investment properties.
Investment properties
All the Company's investment properties are independently
revalued annually and stated at fair value at 25 March. The
aggregate of any resulting increases or decreases are taken to
operating income within the Statement of Comprehensive Income.
Investment properties are recognised as acquisitions or disposals
based on the date of contract completion. Values of investment
properties undergoing development or improvements are stated at
cost until practical completion.
Depreciation
In accordance with IAS 40, freehold investment properties are
included in the Statement of Financial Position at fair value and
are not depreciated. The Company has no other plant and
equipment.
Disposal of investments
The gains and losses on the disposal of investment properties
and other investments are included in the Statement of
Comprehensive Income in the year of disposal.
Property income
Property income is recognised on a straight-line basis over the
period of the lease and is measured at the fair value of the
consideration receivable. Lease deposits are held in separate
designated deposit accounts and are thus not treated as assets of
the Company in the financial statements. All income is derived in
the United Kingdom. Other property income includes dilapidations,
lease surrender premiums and other property related receipts.
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 25 March
29 September 29 September 2022
2022 2021 GBP'000
GBP'000 GBP'000
Rental income 1,082 1,084 2,252
Other property income - 47 56
------------- ------------- -----------
1,082 1,131 2,308
------------- ------------- -----------
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax. Current tax is the expected tax payable on the
taxable income for the period based on the tax rate enacted or
substantively enacted at the reporting date, and any adjustment to
tax payable in respect of prior years. Taxable profit differs from
income before tax because it excludes items of income or expense
that are deductible in other years, and it further excludes items
that are never taxable or deductible.
Deferred taxation is the tax expected to be payable or
recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding
tax bases used in the computation of taxable profits; and is
accounted for using the statement of financial position liability
method. Deferred tax liabilities are recognised for all taxable
temporary differences (including unrealised gains on revaluation of
investment properties) and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be
utilised.
The Company provides for deferred tax on investment properties
by reference to the tax that would be due on the sale of the
investment properties. Deferred tax is calculated at the rates that
are expected to apply in the period when the liability is settled,
or the asset is realised. Deferred tax is charged or credited to
Income after Taxation, including deferred tax on the revaluation of
investment properties.
Trade and other accounts receivable
Trade and other receivables are initially measured at fair value
and subsequently measured at amortised cost as reduced by
appropriate allowances for expected credit losses. All receivables
do not carry any interest and are short term in nature.
Cash and cash equivalents
Cash comprises cash at bank and on demand deposits. Cash
equivalents are short term (less than three months from inception),
repayable on demand and are subject to an insignificant risk of
change in value.
Trade and other accounts payable
Trade and other payables are initially measured at fair value
and subsequently measured at amortised cost. All trade and other
accounts payable are non-interest bearing.
Comparative information
The information for the year ended 25 March 2022 has been
extracted from the latest published audited financial
statements.
Pensions
Pension contributions towards an employee's pension plan are
charged to the Statement of Comprehensive Income as incurred. The
pension plan is a defined contribution scheme.
Borrowings
Interest rate borrowings are recognised at fair value, being
proceeds received less any directly attributable transaction costs.
Borrowings are subsequently stated at amortised cost. Any
difference between the proceeds (net of transaction costs) and the
redemption value is recognised in profit or loss over the period of
the borrowings using the effective interest method. Borrowings are
classified as current liabilities unless the Company has an
unconditional right to defer settlement of the liability for at
least 12 months after the reporting date.
Dilapidations
Dilapidations receipts are recognised in the Statement of
Comprehensive Income when the right to receive them arises. They
are recorded in revenue as other property income unless a property
has been agreed to be sold whereby the receipt is treated as part
of the proceeds of sale of the property.
Share Buy-Back and Treasury Shares
During the period the Company acquired 15,000 Ordinary Shares
(2021: nil) under the authority to make market purchases of its
shares approved at the General Meeting on 19 July 2022. The shares
acquired are held in treasury and all the costs directly associated
with the share buy-back are included within Treasury Shares in the
Statement of Financial Position.
6. DIVIDS
Period Payment Per share Amount paid/proposed
Date (pence) GBP'000
6 months to 29 September 2022 16 December 2022 9.0 244
6 months to 29 September 2021 17 December 2021 8.5 230
Year ended 25 March 2022 27 July 2022 14.0 380
7. EARNINGS PER SHARE AND NET ASSET VALUE PER SHARE
Basic earnings per share are calculated by dividing income after
taxation attributable to Ordinary Shareholders of GBP466,000 (2021:
GBP527,000) by the weighted average number of 2,709,692 (2021:
2,711,617) Ordinary Shares in issue during the period excluding
shares held in treasury. Net Asset value per share is calculated by
dividing net assets of GBP 29,470,000 (2021: GBP24,886,000) by the
number of 2,711,617 Ordinary Shares in issue at the reporting date
excluding shares held in treasury. There are no options and no
instruments in issue that would have the effect of diluting
earnings per share.
For further information please contact:
Wynnstay Properties plc
Philip Collins (Chairman)
020 7554 8766
WH Ireland Limited (Nominated Adviser and Broker):
Chris Hardie, Ben Thorne, Megan Liddell
020 7220 1666
LEI number: 2138006MASI24JYW5076
For more information on Wynnstay visit:
www.wynnstayproperties.co.uk
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