TIDMCDFF
RNS Number : 2335G
Cardiff Property PLC
24 November 2020
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
LEI: 213800GE3FA4C52C1N05
FOR RELEASE 7.00 AM 24 November 2020
THE CARDIFF PROPERTY PLC
(The group, including Campmoss, specialises in property
investment and development in the Thames Valley. The total
portfolio including the jointly controlled Campmoss investment and
development portfolio, valued in excess of GBP35m, is primarily
located to the west of London, close to Heathrow Airport and in
Surrey and Berkshire.)
PRELIMINARY RESULTS FOR THE YEARED 30 SEPTEMBER 2020
Highlights:
2020 2019
Net Assets GBP'000 29,099 28,343
Net Assets Per Share GBP 24.36 22.85
Profit Before Tax GBP'000 1,959 1,653
Earnings Per Share -
Basic and diluted pence 148.2 123.1
Dividend Per Share pence 17.6 17.1
Gearing % Nil Nil
Richard Wollenberg, Chairman, commented:
" During the financial year under review the UK property market
suffered a difficult and unprecedented trading period.
Political and economic uncertainties surrounding the UK's final
exit from the European Union together with current and ongoing
concerns regarding the effects of Covid-19 undermined the
confidence of occupiers and investors. The Thames Valley property
market our key business area, reflected these concerns.
Inevitably letting and development activity in the retail and
office market has been challenging, placing rental levels and lease
negotiations under pressure. Working from home, internet
procurement and the requirement for flexible office space is
determining strategy and future trends will depend on the speed of
the UK economic recovery.
Sales of new homes in the Thames Valley, despite government
initiatives, declined in the third quarter of the year leading to
lower asking prices. Increased activity is being reported over the
last few weeks with pricing in certain locations returning to
previous levels. The demand for residential lettings has remained
high with rents remaining similar to last year."
For further information:
The Cardiff Property plc Richard Wollenberg 01784 437444
Shore Capital Patrick Castle 020 7468 7923
THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY
AND ITS SUBSIDIARIES
PRELIMINARY RESULTS FOR THE YEARED 30 SEPTEMBER 2020
Chairman's Statement and Property Review
Dear Shareholder,
During the financial year under review the UK property market
suffered a difficult and unprecedented trading period.
Political and economic uncertainties surrounding the UK's final
exit from the European Union together with current and ongoing
concerns regarding the effects of Covid-19 undermined the
confidence of occupiers and investors. The Thames Valley property
market our key business area, reflected these concerns.
Inevitably letting and development activity in the retail and
office market has been challenging, placing rental levels and lease
negotiations under pressure. Working from home, internet
procurement and the requirement for flexible office space is
determining strategy and future trends will depend on the speed of
the UK economic recovery.
Sales of new homes in the Thames Valley, despite government
initiatives, declined in the third quarter of the year leading to
lower asking prices. Increased activity is being reported over the
last few weeks with pricing in certain locations returning to
previous levels. The demand for residential lettings has remained
high with rents remaining similar to last year.
FINANCIAL
For the year to 30 September 2020, the Group profit before tax
was GBP1.96m (2019: GBP1.65m). This figure includes a fair value
decrease of GBP0.148m (2019: GBP0.022m increase) for the Group and
a profit of GBP1.36m (2019: GBP0.90m) in respect of our post tax
profit and pre-dividend share of Campmoss Property Company Limited,
our 47.62% owned Joint Venture. During the year, the Company
received a dividend of GBP0.64m (2019: GBP0.5m) from its investment
in Campmoss Property.
Revenue for the year which represented gross rental income,
excluding Campmoss, totalled GBP0.65m (2019: GBP0.65m).
The profit after tax attributable to shareholders for the
financial year was GBP1.81m (2019: GBP1.54m) and the earnings per
share was 148.2p (2019: 123.1p).
At the year-end, the Company's commercial portfolio was valued
by Kempton Carr Croft. The residential property at 14 Runnymede
Road was based on a memorandum for sale. The total portfolio was
valued at GBP5.81m (2019: GBP5.96m). This value excludes the
Company's freehold office property, which was also valued by
Kempton Carr Croft and is included in the balance sheet at
valuation under property, plant and equipment..
Property when completed and held for re-sale is held as stock at
the lower of cost or net realisable value. At the year-end this
relates to commercial property at The Windsor Business Centre.
The Group's total property portfolio, including the jointly
controlled Campmoss investment and development portfolio, was
valued at GBP35.7m (2019: GBP30m). The increase in the property
value attributable to Campmoss is as a result of the increase in
fair value of Clivemont House, Maidenhead, which was sold post the
year end and construction costs during the year at Britannia Wharf,
Woking, offset by the fair value decrease of approximately 5% of
the remaining property in the Group. Residential property at Alston
House and Gowring House, Bracknell and the residential development
at Britannia Wharf, Woking are held as stock in Campmoss. The
Company's share of the net assets of Campmoss was GBP16.3m (2019:
GBP15.6m).
The Group's net assets as at the year-end were GBP29.10m (2019:
GBP28.34m) equivalent toGBP24.36 per share (2019: GBP22.85) an
increase of 6.6% over the year (2019: 4.9%). The Group, including
Campmoss, has adequate financial facilities and resources to
complete works in progress and the current development programme.
Cash balances are held on short term deposit. At the year-end, the
Company had nil gearing (2019: nil). During the year the Company
purchased and cancelled 45,694 (2019: 12,567) ordinary shares at a
total cost of GBP773,143 (2019: GBP220,062).
The Company may hold in treasury any of its own shares
purchased. This gives the Company the ability to reissue treasury
shares and provides greater flexibility in the management of its
capital base. At the year end the Company held nil (2019 : nil)
shares in treasury. Any shares purchased by the Company not held in
treasury will be cancelled and the number of shares in issue
reduced accordingly. The Company intends to continue its policy of
purchasing its own shares, whether to be held in treasury or to be
cancelled, and a resolution renewing the Directors' authority will
be placed before the forthcoming Annual General Meeting on 14
January 2021. This authority will only be exercised in
circumstances where the Directors regard such purchases to be in
the best interests of shareholders as a whole and is subject to the
waiver under Rule 9 of the Takeover Code being approved by
shareholders as set out in the document accompanying this report.
Full details of the Rule 9 Waiver are also available on the
Company's website www.cardiff-property.com .
Current IFRS accounting recommends that deferred tax is
chargeable on the difference between, the cost of properties,
including applicable indexation and quoted investments and their
current market value. However, IFRS accounting does not require the
same treatment in respect of the Group's unquoted investment in
Campmoss Property, our 47.62% owned Joint Venture, which represents
a substantial part of the Company's net assets. Whilst provision is
made in Campmoss accounts for deferred tax, should the shares held
in Campmoss be disposed of, for indicative purposes, based on the
value in the Company's balance sheet at the year-end this would
result in a tax liability of GBP3.10m (2019 : GBP2.65m) equivalent
to GBP2.60 (2019: GBP2.14) per share calculated using a tax rate of
19% (2019: 17%). This information is provided to shareholders as an
additional non-statutory disclosure.
DIVID
The Directors recommend a final dividend of 12.8p per share
(2019: 12.5p) making a total dividend for the year of 17.6p (2019:
17.1p). an increase of 2.9%. The final dividend will be paid on 29
January 2021 to shareholders on the register at 15 January
2021.
THE PROPERTY PORTFOLIO
The Group's investment and development activities continue to be
primarily located in the Thames Valley to the West of London, close
to Heathrow Airport and in Surrey and Berkshire. Further details
are set out in the strategic report.
Despite the difficult circumstances experienced by the UK
property market the Group's portfolio continues to be primarily let
with a number of new leases being completed during the current
quarter.
The majority of rents due for the last two quarters to September
this year have been received which reflects our policy of early
liaising with tenants and assisting where sensible with a deferment
of rent, primarily agreeing to monthly payments in arrears rather
than quarterly in advance. Inevitably government measures to help
small businesses has assisted tenants to meet their lease
commitments., At the time of writing this report, new lettings have
been completed where units have become available.
During the year we secured planning for our property in Windsor
and plans are being updated for our property in Cardiff. Campmoss,
our Joint Venture Company, successfully let a number of retail
units at Alston House, Bracknell with the majority of the new
apartments on the 2nd and 3rd floors let on Assured Tenancy
Agreements. Following the planning permissions granted at Britannia
Wharf, Woking and Clivemont House, Maidenhead a Joint Venture to
develop the residential project at Britannia Wharf, Woking was
entered into with the site at Clivemont House, Maidenhead sold to a
National House Builder. The contract for sale of Clivemont House
was exchanged prior to the year end and completed post the year end
with the proceeds of sale being recognised in October 2020.
QUOTED INVESTMENTS
The Company retains a small portfolio of quoted retail bonds and
equity investments the former providing an attractive medium-term
income stream. The value of the portfolio has marginally decreased
over the year but remains in excess of original cost. The equity
investments include Aquila Services Group plc and Galileo Resources
plc both of which I remain as a Non-Executive Director.
RELATIONSHIP AGREEMENT
The Company has entered into a written and legally binding
relationship agreement with myself, its controlling shareholder, to
address the requirements of LR9.2.2AD of the Listing Rules.
MANAGEMENT AND TEAM
The unprecedented circumstances surrounding the property market
and the Group's continued success indicates the strength and
professionalism of our small management team. In the current
environment, day to day management of the Group's portfolio places
immense pressure on the team and I wish to take this opportunity of
thanking them and our Joint Venture partner for their support and
achievements over the year.
OUTLOOK
Continuing government measures to mitigate the physical and
economic consequences of Covid-19 will impact the property market.
It is encouraging to read that potential vaccines may become
available next year and predicting the next few months will be
extremely difficult. It will be essential for investors and
businesses to retain confidence for the future.
The anticipated further government support for the residential
market will be important to the Group and with interest rates
having moved even lower yields available in the commercial property
market remain attractive.
Activity in both the residential and commercial market has seen
an increase over the last few weeks and I look forward to reporting
to you further at the half year.
J. Richard Wollenberg
Chairman
23 November 2020
Consolidated Income Statement
FOR THE YEARED 30 SEPTEMBER 2020
2020 2019
GBP'000 GBP'000
Revenue 650 647
Cost of sales (115) (70)
Gross profit 535 577
Administrative expenses (497) (488)
Other operating income 579 577
Operating profit before fair
value movement on investment
properties and other properties 617 666
Fair value movement on investment
properties (148) 22
Operating profit 469 688
Financial income 54 61
Profit on sale of investment 74 -
Share of profit of joint
venture 1,362 904
Profit before taxation 1,959 1,653
Taxation (148) (117)
Profit for the financial
year attributable to equity
holders 1,811 1,536
Earnings per share on profit
for the
financial year - pence
Basic and diluted 148.2 123.1
Dividends
Final 2019 paid 12.5p (2018:
12.2p) 155 153
Interim 2020 paid 4.8p (2019:
4.6p) 58 57
213 210
Final 2020 proposed 12.8p
(2019: 12.5p) 153 155
These results relate entirely to continuing operations. There
were no acquisitions or disposals in either year.
Consolidated statement of comprehensive income and expense
FOR THE YEARED 30 SEPTEMBER 2020
2020 2019
GBP'000 GBP'000
Profit for the financial year 1,811 1,536
Items that may be reclassified subsequently
to profit or loss
Net change in fair value of other
properties (55) (10)
Net change in fair value of available
for sale financial assets (14) (43)
Total comprehensive income and expense
for the year
attributable to the equity holders
of the parent company 1,742 1,483
Consolidated Balance Sheet
AT 30 SEPTEMBER 2020
2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Freehold investment properties 5,857 5,995
Property, plant and equipment 228 284
Investment in joint venture 16,323 15,604
Other financial assets 925 843
23,333 22,726
Current assets
Inventory and work in
progress 688 674
Trade and other receivables 238 139
Term deposits 1,748 3,084
Cash and cash equivalents 3,773 2,473
6,447 6,370
Total assets 29,780 29,096
Current liabilities
Trade and other payables (529) (498)
Corporation tax (50) (147)
(579) (659)
Non-current liabilities
Deferred tax liability (102) (94)
Total liabilities (681) (753)
Net assets 29,099 28,343
Equity
Called up share capital 239 248
Share premium account 5,076 5,076
Other reserves 2,475 2,535
Investment property revaluation
reserve 3,139 1,814
Retained earnings 18,170 18,670
Total equity 29,099 28,343
Net assets per share GBP24.36 GBP22.85
Consolidated Cash Flow Statement
FOR THE YEARED 30 SEPTEMBER 2020
2020 2019
GBP'000 GBP'000
Cash flows from operating activities
Profit for the year 1,811 1,536
Adjustments for:
Depreciation 3 5
Financial income (54) (61)
Profit on sale of investment (74) -
Share of profit of joint venture (1,362) (904)
Fair value movement on revaluation
of investment properties 148 (22)
Taxation 148 117
Cash flows from operations before
changes in working capital 630 671
Acquisition of inventory and work
in progress (14) (2)
(Increase)/decrease in trade and other
receivables (98) 4
Increase/(decrease) in trade and other
payables 1 30
Cash generated from operations 509 703
Tax paid (228) (147)
Net cash flows from operating activities 281 556
Cash flows from investing activities
Interest received 61 62
Dividend from joint venture 643 500
Acquisition of investment property,
and plant and equipment (13) (49)
Acquisition of investments (100) -
Decrease/(increase) in term deposits 1,336 (2,884)
Net cash flows from investing activities 2,005 (2,371)
Cash flows from financing activities
Purchase of own shares (773) (220)
Dividends paid (213) (210)
Net cash flows (used in)/from financing
activities (986) (430)
Net increase/(decrease) in cash and
cash equivalents 1,300 (2,245)
Cash and cash equivalents at beginning
of year 2,473 4,718
Cash and cash equivalents at end of
year 3,773 2,473
Consolidated statement of changes in equity
FOR THE YEARED 30 SEPTEMBER 2020
Consolidated statement of changes in equity
Share Share Other Investment Retained Total
capital premium reserves property earnings equity
account revaluation
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2018 251 5,076 2,585 827 18,551 27,290
Profit for the year - - - - 1,536 1,536
Other comprehensive
income - Revaluation
of investments
Net change in fair
value of own use freehold
property - - (43) - - (43)
- - (10) - - (10)
Transactions with
equity holders
Dividends - - - - (210) (210)
Purchase of own shares (3) - 3 - (220) (220)
Total transactions
with equity holders (3) - 3 - (430) (430)
Fair value movements
on investment properties
- Cardiff - - - 22 (22) -
Fair value movements
on investment properties
- Campmoss - - - 965 (965) -
At 30 September 2019
and
1 October 2019 248 5,076 2,535 1,814 18,670 28,343
Profit for the year - - - - 1,811 1,811
Other comprehensive
income - Revaluation
of investments
Net change in fair
value of own use freehold
property - - (14) - - (14)
- - (55) - - (55)
Transactions with
equity holders
Dividends - - - - (213) (213)
Purchase of own shares (9) - 9 - (773) (773)
Total transactions
with equity holders (9) - 9 - (986) (986)
Fair value movements
on investment properties
- Cardiff - - - (148) 148 -
Fair value movements
on investment properties
- Campmoss - - - 1,473 1,473 -
At 30 September 2020 239 5,076 2,475 3,139 18,170 29,099
______ ______ ______ ______ ______ ___ ___
Notes to the Financial Statements
FOR THE YEARED 30 SEPTEMBER 2020
1. Basis of preparation
The consolidated results for the year ended 30 September 2020
and 2019 are prepared by the group under applicable International
Financial Reporting Standards adopted by the EU ("adopted IFRS")
and applicable law.
The financial information set out above does not constitute the
company's statutory financial statements for the years ended 30
September 2020 or 30 September 2019 but is derived from those
financial statements. Statutory financial statements for 2019 have
been delivered to the Registrar of Companies and those for 2020
will be delivered in due course. The auditor has reported on those
financial statements; their reports were (i) unqualified, (ii) did
not include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006 in respect of the financial statements for
2019 nor 2020.
Going concern
The financial statements have been prepared on a going concern
basis, which assumes that the Group will continue to meet its
liabilities as they fall due. The Group's activities, together with
the factors likely to affect its future development, performance
and position are set out in the Chairman's Statement and Strategic
Report.
The Group has sufficient financial resources to enable it to
continue to trade and to complete the current maintenance and
development programme. The Group is ungeared, and the cash flow
forecasts do not assume any debt being required. As a consequence,
the Directors believe that the Group is well placed to manage its
business risks successfully despite the current uncertain economic
uncertainty linked to Brexit and the uncertain impact of the
Covid-19 pandemic and the impact on the Group's tenants.
The Group is in the enviable position of having significant cash
balances at 30 September 2020, the Cardiff Group had cash balances
of GBP3.8m and a further GBP1.7m term deposits (generally with
maturity dates of 90-180 days), in addition the Company has
investments of GBP0.9m of which GBP0.8m are readily marketable. The
Group has an operating cost base including tax and dividends of
under GBP1m per annum so even with no income for a number of years
the Group would remain solvent.
The Cardiff Group receives a management fee from Campmoss of
around GBP0.5m per annum, there is no reason to assume this income
would not be received as the Campmoss Group had cash balances at 30
September 2020, of GBP2.4m and a further GBP4.6m term deposits
(generally with maturity dates of 90-180 days) and in addition
Campmoss received a further cash receipt of GBP6.95m in October
2020 from property sales. Campmoss have a capital commitment of
GBP6.1m to complete its development programme over the next 18
months and including the Cardiff management fee an annual operating
cost base excluding development of under GBP1.5m, so Campmoss
similarly has a strong balance sheet.
After making enquiries, the Directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the annual report and financial statements.
New, revised or changes to existing financial reporting
standards
Subject to the adoption of the IFRS's available for application
noted below, this announcement is prepared on the basis of the
accounting policies as set out in the most recently published set
of annual financial statements.
IFRS
The Group has adopted IFRS 16 - Leases for the year ended 30
September 2020. IFRS 16 removes the distinction between operating
and financial leases, which for lessees will result in almost all
operating leases being brought on balance sheet. The accounting for
lessors, which is applicable to the Group, did not significantly
change and the impact of the consolidated results was immaterial.
As a lessor the main impact was additional qualitative disclosures
about the Group's leasing arrangements.
A number of new standards and amendments to standards and
interpretations have been issued but are not yet effective for the
current accounting period. None are expected to have a material
impact on the consolidated financial statements of the Group.
Notes to the Financial Statements
FOR THE YEARED 30 SEPTEMBER 2020 (continued)
2. Segmental analysis
The Group manages its operations in two segments, being property
and other investment and property development. Property and other
investment relates to the results for The Cardiff Property Company
Limited where properties are held as investment property with
Property Development relating to the results of First Choice
Estates Plc and Thames Valley Retirement Homes Limited. The results
of these segments are regularly reviewed by the Board as a basis
for the allocation of resources, in conjunction with individual
site investment appraisals, and to assess their performance.
Information regarding the results and net operating assets for each
reportable segment are set out below:
Property Property Eliminations 2020
and other Development Total
investment
2020
GBP'000 GBP'000 GBP'000 GBP'000
Rental income (wholly
in the UK) 468 182 - 650
Property sales - - - -
Profit before taxation 1,686 273 - 1,959
Net operating assets
Assets 26,974 4,718 (1,912) 29,780
Liabilities (2,329) (264) 1,912 (681)
Net assets 24,645 4,454 - 29,099
Property Property Eliminations 2019
and other Development Total
investment
2020
GBP'000 GBP'000 GBP'000 GBP'000
Revenue (wholly
in the UK) 463 184 - 647
Profit before taxation 1,462 191 - 1,653
Net operating assets
Assets 26,600 4,486 (1,900) 29,096
Liabilities (2,498) (245) 1,900 (753)
Net assets 24,102 4,241 - 28,343
"Eliminations" relate to inter segment transactions and balances
which cannot be specifically allocated but are eliminated on
consolidation.
3. Earnings per share
Earnings per share has been calculated in accordance with IAS 33
- Earnings Per Share using the profit after tax for the financial
year of GBP1,811,000 (2019: GBP1,536,000) and the weighted average
number of shares as follows:
Weighted average
number of shares
2020 2019
Basic and diluted basis 1,221,929 1,247,277
Financial Calendar
2020 24 November Final results for 2020 announced
2021 14 January Annual General Meeting/General Meeting
14 January Ex-dividend date for the final dividend
15 January Record date for the final dividend
29 January Final dividend to be paid
May Interim results for 2021 to be announced
July Interim dividend for 2021 to be paid
30 September Year end
Directors and Advisers
Directors Auditor
J Richard Wollenberg Crowe U.K. LLP
Chairman and chief executive
Karen L Chandler FCA
Finance director Stockbrokers and financial adviser
Shore Capital
Nigel D Jamieson BSc, FCSI
Independent non-executive director
Secretary Bankers
Karen L Chandler FCA HSBC Bank Plc
Non-executive director of wholly owned Solicitors
subsidiary
First Choice Estates plc Blake Morgan LLP
Derek M Joseph BCom, FCIS Charsley Harrison LLP
Head office Registrar and transfer office
56 Station Road Neville Registrars Ltd
Egham Neville House
Surrey TW20 9LF Steelpark Road
Telephone: 01784 437444 Halesowen
Fax: 01784 439157 B62 8HD
E-mail: webmaster@cardiff-property.com Telephone: 0121 585 1131
Web: www.cardiff-property.com
Registered office Registered number
56 Station Road 00022705
Egham
Surrey TW20 9LF
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END
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