TIDMPNS
RNS Number : 0008M
Panther Securities PLC
25 April 2018
PANTHER SECURITIES PLC
(the "Company" or the "Group")
Preliminary Results
Panther Securities has today announced its preliminary
results for the year ended 31 December 2017.
For further information;
Panther Securities plc
+44 (0) 1707 667 300
Andrew Perloff (Chairman)
Simon Peters (CFO)
Allenby Capital Limited (NOMAD & Joint Broker)
+44 (0) 20 3328 5656
David Worlidge
Alex Brearley
CHAIRMAN'S STATEMENT
Although I am always pleased to report our year end accounts I
am particularly delighted with the result for the year ended 31
December 2017 which shows our profit before tax of GBP24,791,000
which is truly a record to be proud of.
I have previously bemoaned that the property or financial
derivatives valuation movements should be left out of our income
statement, as they are non-cash items, so even when they swing our
way favourably then it is incumbent of me to point them out.
For our year end accounts our entire property portfolio was
independently valued by GL Hearn and assessed to be worth an
additional GBP16,776,000 which is of course pleasing to note. Our
derivative liability (SWAPS) reduced by GBP1,850,000 at that date
and is certainly a step in the right direction.
If we disregarded these items from our annual profits, it still
leaves GBP6,165,000 profit from our bread and butter business of
collecting rents, buying and selling properties at strategically
opportune times and subsequently reinvesting surplus funds for the
longer term.
Our rental income receivable for this accounting year amounted
to GBP12,946,000 compared to a similar figure of GBP12,965,000 last
year.
Development Progress
Maldon - Surrender Premium
This freehold factory contains approximately 200,000 sq. ft. of
high bay, brick built warehouse on a site of about 9.5 acres.
During March 2017 we received GBP1,995,000 for the surrender of the
tenant's lease. This payment was in lieu of the remaining four
years rental payments of GBP500,000 p.a. and dilapidations. The
refurbishment of the building should make the property more
attractive for letting to potential tenants at hopefully a higher
rent.
Holloway Head, Birmingham
In June 2017 our wholly owned subsidiary, Panther Developments
Limited, exchanged contracts for the sale of the entire freehold
and long leasehold interests in this major development opportunity.
We had built up this site over thirty years and had twice received
planning permission for redevelopment. We could not unfortunately
take advantage of this at those times.
Panther Developments Limited exchanged contracts to sell its
entire interests for GBP11,000,000 and agreed a delayed completion
of six months to enable a lease extension to be progressed between
the purchaser and Birmingham Council. Technically this became
unconditional in July 2017. At the year-end GBP9,980,000 was
outstanding.
The seller has extended the completion date for three times and
we are contracted to a special purpose vehicle company that was set
up only to pursue this transaction with no financial status. Given
its uncertain nature, we have not brought the profit from this
potential transaction into our accounts. We have already received a
non-returnable deposit and extra consideration for the delays. We
are very hopeful that completion will take place at the end of July
2018.
In the 2017 income statement we recognise GBP750,000 in profit
on disposal relating to the non-refundable deposit. We also
recognise GBP400,000 in other income relating to a fee paid to
extend the contract in December 2017 (separate to the sales
proceeds).
High Street, Croydon
In March 2017 we announced that we had exchanged contracts for
the sale of our 105 year- long leasehold interest at High Street,
Croydon for GBP800,000 for the vacant upper parts alone, which had
permission for 8 flats.
As part of the deal we leased back, for the full term at a
nominal ground rent, the ground floor retail element which is fully
let to Sainsbury's and Princess Alice Hospice at a total rent of
GBP100,000 p.a.
A delayed completion to enable certain conditions to be
completed was agreed, and although delayed further than
anticipated, this was completed after the year end.
Swindon Market Site
A revised planning application on this site has been submitted
for ground floor restaurants, leisure uses and a fifteen storey
upper part which could contain one hundred residential apartments.
There has been an extensive consultation throughout the planning
process and to date we have had favourable comments on the proposed
scheme from all parties concerned. Shareholders will remember we
had previously won planning permission for a two storey restaurant
scheme following a successful appeal.
Unfortunately, although the planners and Council like our
proposals, due to the much, much higher building costs for a high
rise scheme, the development is not viable and certainly unable to
provide all of the community benefits that the Council negotiators
believe are required i.e., Section 106 payments, Community
Infrastructure Levy (CIL) payments, excessively high ground rents
(payable to the Council) for the residential units, etc., etc.
The proposed development is beneficial to the improvement of the
town centre, and we are continuing our dialogue with the Council to
see if we can mitigate the add-ons that currently make it a 'no go
scheme'.
Bruce Grove, Wickford
The application for approval of some outstanding conditions has
been submitted and if successful we have a builder/buyer in hand
who is keen to purchase the currently vacant site and ready to
start building the first phase of the development of 28 houses. We
have just received permission for this scheme's reserved matters
and now have one final hurdle left.
Property Disposals
In April 2017 we sold 25 Victoria Street, Wolverhampton for
GBP90,000 at a small profit. This was a vacant semi derelict
freehold previously held for development.
In July 2017 we sold a commercial freehold ground rent in Palm
Street, Nottingham, to the tenant for GBP350,000. This was slightly
above book value and although we lost GBP20,000 p.a. rent, it
showed a good profit on the original cost.
In August 2017 we sold the freehold shop and commercial upper
part in the centre of Glasgow, 27-35 Union Street, for GBP925,000.
Our book cost was GBP710,000 and after expenses this showed a
GBP196,000 profit for the loss of GBP75,000 p.a. rent.
In September 2017 we sold 50 The Kingsway, Swansea for
GBP95,000. A leasehold ground rent shop lease with 38 years
remaining. Again, this property was in poor condition after a
tenant absconded a few years ago, but despite this we received
nearly double its book value.
Also in September 2017, we sold 29 and 30 Victoria Street,
Wolverhampton for GBP200,000 which was at book value. This property
was in poor condition and had, like our other holdings in Victoria
Street, been held for redevelopment.
SHARE DISPOSALS
MRG Systems Ltd was sold to its employees and management in
December 2017. (We held 75% of the shares and now hold 15%). We
received a GBP35,000 management fee during the year, and received
GBP115,000 for our shares which were mainly sold to the employees
and management, with some bought in for cancellation by MRG. We
remained the freehold landlords of the premises but sold this
property after our current year end for GBP900,000.
In April 2017 we sold 826,000 William Nash PLC unlisted ordinary
shares for GBP1,486,000. Our book cost was GBP627,000. The bulk of
our holding was purchased in 2004. During our holding period we
received two large special dividends and regular smaller
dividends.
Elektron PLC - We sold 3.3m shares in September 2017 for
GBP559,000. Original cost was about GBP291,000 showing a GBP268,000
profit. We bought the bulk of our shares in 2003 and sold a major
part of our holding at a much higher price for a proportionately
larger profit in 2010/ 2011 and this final balance was a
satisfactory conclusion.
Property Acquisitions
Springburn Shopping Centre, Glasgow
In October 2017 we acquired the Springburn Shopping Centre in
Scotland which is a northern suburb of Glasgow. It is a 78,110 sq.
ft. covered shopping centre, including a 24,500 sq. ft. anchor
store let to B&M Bargains and some 270 car parking spaces. The
site is approximately five acres and is occupied by a combination
of national and local businesses. There is significant additional
housing proposed for the area which should assist the future
prosperity of both the area and the shopping centre.
The centre is let to 26 good quality tenants, with a diversified
income profile, including a mixture of national and local covenants
such as Scotmid Co-operative, Betfred, Card Factory, Brighthouse,
Greggs, Santander, B&M, William Hill and Farmfoods.
The net income, after deduction of the ground lease rent of
GBP60,000 p.a. and void costs is currently GBP300,000 p.a. The
property is held on an 88 year unexpired long leasehold from
Glasgow City Council. The price paid for our long leasehold
interest was GBP2.3 million.
Britannia Shopping Centre, Hinckley
We acquired the Britannia Shopping Centre (the "Centre"), a
freehold shopping centre in a prime position in Hinckley,
Leicestershire.
Hinckley is a busy, vibrant market town located approximately 13
miles south west of Leicester. The Centre comprises 16 retail units
arranged over ground and first floors totalling circa 82,000 sq.
ft. on a site of two acres.
The Centre is the town's only covered shopping mall together
with the town's principal shoppers' car park, boasting 272 parking
spaces which is leased to National Car Parks (NCP) on a long lease.
The majority of occupiers are national brands including Wilko,
Peacocks, Boots, Greggs, Card Factory, and Poundworld amongst
others. Annual footfall in the centre in 2016 was over
2,800,000.
The freehold was purchased for GBP5,333,000, plus an enormous
GBP256,000 stamp duty, and it has a gross rental income of
GBP908,000 p.a. and net rental income of GBP737,000 p.a.,
representing a net initial annual yield of 13.83%. Nearly 37% of
income is secured from Wilko and NCP.
The Board believes that there are several opportunities to
further improve the Centre.
Former McEwen's of Perth
In early September 2017 we completed the purchase of the
freehold former department store, McEwen's of Perth. This
attractive listed property is located in the centre of Perth.
Purchased mainly vacant, it contains one national tenant on the
corner of the building who pays an inclusive rent of circa
GBP50,000 p.a. We have pre-let the balance of 35,000 sq. ft. to JE
Beale PLC who have been promised financial assistance by the local
council to establish their first store in Scotland.
We own other properties in High Street, Perth and have
previously worked with the council who provided substantial grants
to bring long-vacant upper parts back into use as flats, which are
now let and rent producing. We expect to receive grants to
redecorate the listed façade of this older building. In due course,
this property is expected to produce double figure returns for our
Group on our initial cost of approximately GBP700,000 but we will
initially have to spend money on the property for outside
refurbishments towards which the council has indicated they will
contribute.
Post Balance Sheet Transactions
In January 2018 we sold 34 Marine Terrace, Margate for
GBP450,000, which had only just been revalued at GBP250,000, thus
we received a generous price from a special purchaser for a loss of
only GBP16,000 p.a. rent.
In February 2018, we sold Stonehouse, Gloucester, 19 Queen
Street, Ramsgate and High Street, Dudley at auction.
Stonehouse - Gloucester
MRG (which I mentioned earlier) has a freehold office at The
Mill at Stonehouse, Gloucester. This former mill of 15,000 sq ft
had been let to MRG Systems at GBP93,000 p.a. The letting assisted
them in being independent before the employee and management
buyout. We received GBP900,000 which shows a very good profit on
original cost.
Ramsgate
19 Queen Street, Ramsgate a small freehold shop investment
producing GBP12,000 p.a. sold for GBP147,000 producing a small
profit on book value.
Dudley
High Street Dudley a large freehold vacant shop in very poor
condition held for development realised GBP276,000 which was
considerably in excess of its recently revalued book value.
Stockport
In March 2018 we completed the sale of Grove House, Stockport, a
vacant freehold shop and office building which we had held for many
years during most of which time it had always produced a good
rental return for us. Whilst the building was in good condition, a
developer purchased it to convert to residential units. We received
GBP900,000 which was well above the recently revalued book
figure.
Holloway Head, Birmingham
As mentioned above, the completion of the sale of the Company's
development site in Holloway Head, Birmingham has been deferred
again until 31 July 2018.
As well as a payment of GBP1,020,000 received last year, the
Company received GBP400,000 in part payment on 9 April 2018 and it
is expecting to receive a further GBP470,000 of the purchase
consideration at the end of May 2018, with the balance payable on
completion.
As a result, most of the profit on this transaction will be
brought into the 2018 accounts after the actual completion takes
place. Because the purchasers have expended a considerable
non-recoverable amount, we are very hopeful that this sale will
complete.
Sale of St Nicholas House, St Nicholas Road, Sutton
In April 2018, we exchanged contracts to sell the joint
freehold/leasehold interest in St Nicholas House. Surrey Motors
Limited is a wholly owned subsidiary of Panther Securities PLC
which was acquired in 1987. Its sole asset is the freehold of St
Nicholas House, St Nicholas Road, Sutton, which is a building of
approximately 140,000 sq ft gross accommodation. The basement and
ground floor are used for retail/ancillary storage and parking. The
nine upper floors are offices.
The building was originally constructed in the early 1960s with
the offices purpose built for the Crown Agents, a quasi-government
organisation, which originally took a 99 year lease at a ground
rent which had proportionate rental reviews every 21 years. This
lease had an option to extend for 25 years (on the same terms), but
ignoring the option, had approximately 44 years to run at a low
ground rent and thus had a significant value.
Early last year, the Crown Agents approached the Company
indicating that it wanted to dispose of its interest in the
building and it was agreed that the Company and the Crown Agents
should offer for sale their joint interests which would enable the
freehold of the site to be offered with vacant possession at an
early date, giving it development possibilities.
After a marketing campaign by the joint agents, Carter Jonas, a
number of offers were received and the Company exchanged contracts
to sell the joint freehold/leasehold interest to Saint Nicholas
House Ltd, with a completion due in about three months' time. The
Group's share of the gross sale price proceeds amounts to
approximately GBP7,837,500, with a possible small overage that is
to be confirmed, but is not currently anticipated to be material.
This compares to a recent revalued book figure of GBP5,540,000 for
the Company's interests alone. The total consideration receivable
by both the Group and the Crown Agents for the total joint
freehold/leasehold interest in St. Nicholas House is
GBP12,750,000.
Following completion, the Company will no longer receive the
GBP320,000 p.a. rental income on this investment property.
Following our usual policy on deferred completions, the Company
insisted on receiving the deposit of approximately GBP783,000.
Finances
Our finances are in good shape and have been so for some time.
They currently include a potential GBP10 million of additional loan
facilities agreed in April 2016, being an option to extend the loan
limit within the current loan agreement, subject to usual
formalities. We have significant spare cash available and a steady
flow of rental income.
Business Rates
I am not sure how long it will take for it to sink in to our
government administrators that retail business rates are EXCESSIVE
and are causing distress to many hundreds of multiple retail and
restaurant traders and their tens of thousands of employees and
causing degeneration of many town centres and other adverse side
effects. Much of this is caused by poorly thought out government
policy, failing to deal with the unfair competition from the
internet retailers, who pay little business rates, employ less
staff (thus less national insurance tax), and are able to divert
some of their huge profits to less taxing climates. Even Donald
Trump seems to be well aware of this situation and may seek to
change US taxation policy to more direct taxation on the cyber
economy.
My cure for the retail desolation that is coming due to
government neglect would be to immediately remove the downward
phasing of rates payable, so occupiers receive the current rates
assessed under the recent revaluation and immediately give all
retail units a two year 25% reduction on their bills and then
observe the benefits. To make up for the revenue lost, tax all
sales over the internet at an extra 10% which will probably
retrieve most of the lost revenue. This may help to make a more
level playing field for older established retailers who bear the
brunt of this government's aggressive taxation of land based
traders.
Political Donations
I have not submitted my resolution to provide a donation to UKIP
this year. I feel they seem to have lost their way slightly having
secured the support of over 50% of the British voters for exiting
the European Union (their most important policy) and we are seeing
progress albeit slowly with this decision. I will personally
provide them with a smaller donation as I believe it is important
we have another political party as the three other main parties are
failing to offer what the country needs.
Dividends
The Board will recommend a final dividend of 7p per share for
the year ended 31 December 2017 at our Annual General Meeting on 22
June 2018. The payment date will be 5 September 2018, to
shareholders on the register at close of business on 3 August 2018
(ex-dividend 2 August 2018).
Additionally, we are paying a special interim dividend of 10p
per share on 18 May 2018 to shareholders on the register at close
of business on 27 April 2018 (ex-dividend 26 April 2018) to reflect
the 2017 year's success and the continued progress in 2018.
Future Prospects
We had a very good trading year ended 31 December 2017 and the
current year has started well. I therefore expect our prospects for
the near future will be positive with a stable but growing rental
income with the potential to add value to our portfolio.
My only concern is the damage that can be done comparatively
quickly by our bureaucratic legislators who have so little business
experience that they haven't the slightest idea how their taxes,
laws and regulatory edicts impact on all businesses creating huge
extra costs and problems which eventually the customer or the
taxpayer has to pay for.
Finally I would like to thank our small but dedicated team of
staff, growing team of financial advisers, legal advisers, agents
and accountants for all their hard work during the past year, which
has been extremely busy and even more demanding than usual and, of
course, our tenants, most of whom pay their rents and excessive and
high and often unfair business rates.
Andrew S Perloff
CHAIRMAN
24 April 2018
CHAIRMAN'S RAMBLINGS
This year was difficult for me to choose a suitable topic for my
ramblings as there was such a plethora of subjects. Indeed I have
been spoilt for choice.
Of course, high on its list would be the housing crisis. We all
know the cause, but the cure? Various Ministers have made speeches
about how they will deal with the problem. They have increased tax
on buy to let, and massively increased stamp duty on high end value
houses. They will punish builders who hold back sites that already
have planning permission, but expect higher prices and profits.
They will insist on larger Section 106 payments, larger Community
Infrastructure Levy payments, a larger proportion of social
housing, their demands ever growing in the direct opposite
direction to the amount of new homes built.
Pension problems are also high on the list of Ministers'
speeches of how they will punish directors who do not anticipate a
downturn in trade with sufficient protection for company pension
funds who cannot afford them due to numerous extra taxes levied
and, often, when a company makes a profit or not.
Whenever I hear speeches like these it pleasantly reminds me of
my favourite uncle who died twenty years ago who once, when I asked
him about some then current topic in all the newspapers, would not
give an opinion. I asked why? He said "If I do not open my mouth
and say nothing, people may think I am stupid. However, if I do
speak and give my opinion, they will know I am stupid!"
These are our ministers, very few of whom have the slightest
idea or experience of the subject they are talking about and,
unfortunately, are advised by similar unknowing, bureaucrats who
often remain anonymous, highly paid, lucratively pensioned, and
unaffected by the negative effects of the remedies proposed.
The private pensions' scandal is where one now celebrity MP is
held up as a crusader for private company pensioners rights. He
has, however, conveniently forgotten he was part of the Government
that was instrumental in the major cause of the deficit problem,
caused by the deprivation of the ability to reclaim tax levied on
pension stock exchange investments from 1998 (Gordon Brown's Budget
1997).
The massive antagonism to the New President Trump whose policies
have already probably halved the British companies' pension deficit
and which I believe will almost certainly bring a boost to British
jobs and business by showing the way with massive tax cuts in
America. It appears he even believes in a special tax on internet
sales to even up the tax burden for retailers who are huge
employers.
Or the business rates scandal where the bureaucratic Baldricks
who devised the process for payments find it sensible that
provincial struggling department stores in essence have to
subsidise stores like Harrods and Selfridges whom may be two of the
most profitable department stores in the world AND are foreign
owned.
These are all interesting subjects but when I think of business
rates I am reminded of my wife who sometimes finds it difficult to
get to sleep at night. When this happens I begin to explain to her
about the unfairness of commercial rates, how ludicrous it is, the
complicated systems of phasing in changes, the appeals system which
has been gerrymandered by deceitful bureaucrats, how it destroys
town centres and jobs - this usually does the trick and gets her
off to sleep!
However, if this medicine is not enough, I start explaining to
her the swap arrangement we have made with our Company's loans and
how it does not change our business costs but somehow shows up in
our Income Statement with large figures which can be positive or
negative and can change substantially in a single day, but as the
accounts are always produced a few months later than the accounting
cut-off date, are usually no longer relevant to the printed
accounts. This always works!
I finally set my sights on banks as they are so relevant to all
businesses and also it is 10 years since I wrote my ramblings about
Barclays Bank.
You may recall I wrote about why, after three generations of
Perloffs as their customers totalling about 100 years, I felt
obliged to close my personal account with them due to their
incompetence.
Well, as fortune would have it, about two Christmases later I
was invited to an intimate Conservative Christmas party for a "few
selected supporters" but attended by most of its leading cabinet
members (at that time I supported them). This sounded interesting
so I decided to attend.
At a magnificent and huge listed home on the banks of the
Thames, I arrived to find that of the two to three hundred people
attending this 'intimate party', there were about a dozen people I
knew, which was of course pleasing. After circulating for half an
hour with my cranberry juice, I latched on to one of them, a very
successful London property developer, who was talking to a tall,
slim and smart fellow Conservative supporter.
"Hello, Andrew. How are you keeping, are you busy?". I replied
in the affirmative. "Have you met --------- ----------? He used to
be a Director/Chairman of Barclays Bank"
I said "Nice to meet you" and the conversation continued on
banking problems of that time. I told the ex-Barclays gentleman
that my family had banked with Barclays for nearly one hundred
years, he smiled and asked, "How did you find them?". "Oh, absolute
rubbish", I replied. He smiled then laughed and said "Oh dear". My
friend commented "Well that tells you".
For some inexplicable reason our conversation did not continue
much longer so I had no time to tell him a little more about why,
and despite the massive failings on Barclays' part, I still
retained an account at Barclays in France, which I had then had for
10 years.
At that time, this branch had had the same manager for 27 years,
most of its staff were long term, knew their customers and were
always helpful. They could provide you with your own cash on a
signature, because of course they knew your face, voice and
signature.
However, two or three years ago they brought in new rules which
meant you could only take out EUR2,000 (of your own money) without
a week's notice. Well, this can cause difficulties if you are
travelling to Italy for a family hotel break of 3 or 4 days as
cards have insufficient limits, but we managed to survive this
problem. Last year I was informed that Barclays was selling their
French banks and in due course I would have to close my account
unless I put most of my French funds into one of their investment
funds. "Non, non, non" I replied bilingually, "Not on your Nellie",
I said that I intended to move the account. When I arrived early
this year to deal with the changeover, I was told I could only
withdraw 10,000 Euros in cash in a month, even though I had
considerably more than that in the current account, without
expecting any interest.
I thus approached HSBC, with whom I have had a London personal
account for 30 years and who have a branch 200 yards from the
Barclays branch in Antibes. I consider I have an excellent
relationship with HSBC and know they have all the information and
details that could possibly be required of my family and me. I
thought they merely had to pass on these details (with my
permission) etc. and a new account would be opened. Oh No, No, No -
they were different departments. Despite being in France, they had
'Chinese walls'. I consequently had to go through the whole
paraphernalia as though I was an unknown client, a possible money
laundering drug dealer approaching the bank and, what's more, it
proved necessary to attend the bank in person, which luckily we
were able to do without disrupting our holiday plans.
I found this particularly irritating as over the previous two
years HSBC had felt it necessary to "update" their "K.Y.C."* on me
and unfortunately it was not the provision of beautiful pieces of
fried chicken in breadcrumbs with eleven secret spices, but finding
out practically all of my financial and personal life.
Their "chicken" moment started off innocuous enough asking about
my income and assets and sources of wealth. I gave them an
abbreviated version pointing out my income was mainly from my
Panther dividends which had been regular, rising and substantial
for over 30 years. I thought that would satisfy the "KYC" Forms,
but no, they then asked where I had acquired the money to buy my
Panther shareholding. As this was over 45 years earlier I was
initially caught off-guard. However, one of the benefits of being a
hoarder of nearly everything I had an auction catalogue of 1971
where we had sold 16 secondary freehold shop investments to enable
us to move on to bigger and better properties. I explained how we
had purchased these properties individually vacant over the
previous five years and let them to produce high returns. This
satisfied them for a while. Then two other banks we used started
asking the same questions and luckily I was able to offer the same
formulaic answer and that seemed to satisfy the other banks.
This was going on over a protracted period and one day whilst at
the office I received an unknown caller on my private mobile phone,
who asked for me. The caller said he was calling from HSBC, his
accent and English were difficult to understand, but I ascertained
he was calling from somewhere in India and he wanted to check some
cheque payments Panther had made. Fair enough - so I asked him to
give me the details of the payments - he said he could not until I
had given him some security information. I surprisingly kept my
cool and pointed out that he was someone I had never met or spoken
to before, phoning from a country halfway round the world, where I
was unlikely to visit, asking me secret information in an
unintelligible accent before he would tell me what the so called
problem was. I told him to get someone from their London office to
phone me!
A few days later I found out what the problem was, after the
bank had bounced about a dozen cheques. A co-director's signature
was not as instantly recognisable in India as it should have been.
All the cheques were comparatively small, and if I had been told
who the recipients were I could have instantly approved them. This
caused disproportionate embarrassment and panic as we are known for
our reliability.
We recently sold some properties by auction. The auctioneer whom
I have dealt with as buyer/seller over a period of nearly 50 years
who knows me/my family and most of my personal and business life,
etc., was forced to ask for my latest passport details/utility
bills, etc. Likewise, the solicitors acting on our behalf needed
personal information that should have already been known to them as
they have also acted on and off for us for many years.
The world has gone mad on mistrust.
To carry out business in any normal way is becoming more and
more tortuous.
It's easy to blame the banks and their very expensive and slow
lawyers, but the reality is that new and fearsome rules and
regulations to prevent money laundering or tax fraud have been
produced ostensibly to protect the public or public coffers and if
accidentally breached, entail massively disproportionate fines on
the banks.
But, of course, our bureaucratic legislators have little idea of
the real business and crooked world and by focusing on all 30
million+ bank customers the 10/20,000 villains allow many to slip
through the net. If they allowed banks/solicitors/accountants to
use their professional discretion and common sense on KYC they
could concentrate on strange transactions more likely to be by the
villains which would stand out like a sore thumb.
So, let's hope some common sense comes to our legislators -
eventually - but I doubt it.
Yours
Andrew S Perloff
CHAIRMAN
24 April 2018
P.S. *KYC is not Kentucky Yummy Chicken but Know Your
Client!
GROUP STRATEGIC REPORT
About the Group
Panther Securities PLC ("the Company") is a property investment
company listed on the AIM market (AIM). Prior to 31 December 2013
the Company was fully listed and included in the FTSE fledgling
index. It was first fully listed as a public company in 1934. The
Group owns and manages over 950 individual property units within
approximately 135 separately designated buildings over the mainland
United Kingdom. The Group specialises in property investing and
managing of good secondary retail, industrial units and offices,
and also owns and manages many residential flats in several town
centre locations.
Strategic objective
The primary objective of the Group is to maximise long-term
returns for our shareholders by stable growth in net asset value
and dividend per share, from a consistent and sustainable rental
income stream.
Progress indicators
Progress will be measured mainly through financial results, and
the Board considers the business successful if it can increase
shareholder return and asset value in the long-term, whilst keeping
acceptable levels of risk by ensuring gearing covenants are well
maintained.
Key Ratios and measures
2017 2016 2015 2014
Restated
Gross Profit Margin
(gross profit/ turnover) 71% 77% 73% 66%
Gearing (debt*/(debt*
+ equity)) 45% 49% 48% 50%
Interest Cover** 2.37 1.66 times 1.65 1.22
times times times
Finance cost rate (finance
costs/ average borrowings
for the year) 6.4% 6.6% 6.6% 6.6%
Yield (rents investment
properties/ average
market value investment
properties) 7.1% 7.7% 7.5% 7.5%
Net assets value per
share 516p 407p 428p 409p
Earnings/ (loss) per
share - continuing 120.2p (5.5)p 38.7p 26.1p
Dividend per share 12.0p 12.0p 22p*** 12.0p
Investment property GBP8.9m GBP5.0m GBP2.2m GBP3.2m
acquisitions
Investment property GBP2.2m GBP5.8m GBP4.0m GBP1.2m
disposal proceeds
* Debt in short and long term loans, excluding any liability on
financial derivatives
**Profit before taxation excluding interest, less movement on
investment properties and on financial instruments and impairments,
divided by interest
*** Includes 10p per share special dividend
Business Review
2017 has been an exceptionally good year financially. Group
turnover is now rental income only and does not include trading
turnover derived from MRG Systems Ltd ("MRG") which was sold in the
year. The 2016 consolidated income statement has been restated to
remove the results of MRG. Rental income has held up in a tough
environment for retailers which is pleasing as a large proportion
of our tenants are retailers, however we benefit from having more
neighbourhood parades which are usually convenience, service or
leisure led, which have been less affected by changes to consumer
habits, as well as diversification from light industrial and office
units.
Our cost of sales has increased, as we incurred one-off fees on
Birmingham (Holloway Head) and a partly un-provided fine relating
to Ramsgate (these combined total circa GBP300,000), as well as
having higher service charges due to our shopping centres purchased
which will be ongoing (an increase of circa GBP250,000).
The Income Statement also shows considerably higher 'other
income', this includes the large surrender premium on Maldon (not
spent on refurbishing the unit) of circa GBP1,400,000 and a large
GBP400,000 fee to extend our Birmingham completion date.
The administration costs have reduced as there was a large
one-off provision relating to Beale Ltd, a major tenant, last year
which was not repeated in 2017.
The Group benefited significantly from improvements in the
property market with the portfolio showing a very large GBP16.8
million uplift (2016 - GBP0.3 million uplift) following an
independent valuation. The increases were mainly seen on our well
let "wider" south east or city centre retail, industrial portfolio
and our residential development schemes (either completed or sites
with planning potential).
The year also saw disposal gains, including our entire share
portfolio and good profits on investment properties. The interest
rate swaps also recovered helping the overall profitability for the
year, but not fully making up for last year's loss on this
instrument.
MRG Systems Ltd ("MRG")
This was an associate company (at 45% ownership) since the 70's
and latterly, in about 2005, it became a subsidiary when the
founder exited the business, as such we had a very long-term
investment in this trading business. MRG provide digital signage
solutions with the majority of their supply still to the book maker
market.
We tended to leave the business alone as it was not a familiar
industry, assisting every now and then with either a small element
of finance or property advice but the company was self-sufficient
and didn't require much attention. We carried out an extensive
exercise in 2014/2015 when the economy improved but were unable to
find a purchaser.
Since then we have formalised our property relationship with
them i.e. we let them their property on an FRI standard commercial
lease. This property has been sold after the year end at just above
its independent valuation (based on the 10 year lease entered
into), but at a very good profit on our original purchase cost in
2013.
We have now sold the business to the management and employees of
MRG and all but a few of them took this offer up. Panther still
holds 15% of the issued share capital, as an investment and we of
course wish them well for the future under its new employee
ownership.
We received circa GBP150,000 from MRG in the year, mainly for
our shares (GBP115,000), and a small management fee received
intergroup (GBP35,000). We received rent of GBP93,000 on the
property, which as mentioned above, was just sold for GBP900,000.
Whilst this may not be the most exciting deal in the financial
year, it was good for all parties, and simplifies our Group going
forward, as well as generating some profit for our long-term
hold.
Going forward
We are looking to sell properties where we can achieve a high
return or they are non-core to save up a "cash pile", as we expect
uncertain times in the near to medium term and as an
entrepreneurial company expect to fair well.
Even through there are uncertainties going forward which may
affect property prices, we will be protected by our portfolio's
diversity, experienced management team and ability to adapt.
Financing
The Group entered into a GBP75 million club loan facility (GBP60
million term and GBP15 million revolving), which was renewed on 19
April 2016 with a five year term. The loan had GBP0.5m available to
draw at the year end, but currently is fully drawn. We plan to pay
back some of our revolver using proceeds from the sale of Holloway
Head, Birmingham if/ when it completes, which can be redrawn. The
loan was also drafted with the option of increasing our facilities
by a further GBP10 million (subject to banks approval).
At the statement of financial position date the Group had GBP5.9
million of cash funds.
The Group has not offered a scrip dividend option for its latest
dividends and has no plans for the current proposed dividend to
provide shareholders with this option.
Financial derivative
We have seen an improvement (of a non-cash nature) in our long
term liability on derivative financial instruments of GBP1.85
million (2016: GBP5.34 million fair value loss). Following this
gain the total derivative financial liability on our Consolidated
Statement of Financial Position is GBP26.4 million (2016: GBP28.3
million).
These financial instruments (shown in note 5) are our interest
rate swaps that were entered into to remove the cash flow risk of
interest rates increasing, by fixing our interest costs. We have
seen that in uncertain economic times there can be large swings in
the accounting valuations. Small movements in the expectation of
future interest rates can have a significant impact on their fair
value; this is partly due to their long dated nature.
These contracts were entered into in 2008 when long term
interest rates were significantly higher. In a hypothetical world
if we could fix our interest at current rates and term we would
have much lower interest costs. Of course we cannot undo these
contracts that were entered into historically, without a
significant financial cost, but for accounting purposes these
financial instruments are compared to current market rates, with
the additional liability compared to the market rates, as shown on
our Statement of Financial Position.
Financial Risk Management
The Company and Group operations expose it to a variety of
financial risks, the main two being the effects of changes in
credit risk of tenants and interest rate movement exposure on
borrowings. The Company and Group have in place a risk management
programme that seeks to limit the adverse effects on the financial
performance of the Company and Group by monitoring and managing
levels of debt finance and the related finance costs. The Company
and Group also use interest rate swaps to protect against adverse
interest rate movements with no hedge accounting applied.
Mark-to-market valuations on our financial instruments have been
erratic due to current low market interest rates and due to their
long term nature. These large mark-to-market movements are shown
within the Income Statement.
However, the actual cash outlay effect is nil when considered
alongside the term loan, as the instruments have been used to fix
the risk of further cash outlays due to interest rate rises or can
be considered as a method of locking in returns (difference between
rent yield and interest paid at a fixed rate).
Given the size of the Company and Group, the Directors have not
delegated the responsibility of monitoring financial risk
management to a sub-committee of the Board. The policies set by the
Board of Directors are implemented by the Company and Group's
finance department.
Credit risk
The Company and Group have implemented policies that require
appropriate credit checks on potential tenants before lettings are
agreed. In many cases a deposit is requested unless the tenant can
provide a strong personal or other guarantee. The amount of
exposure to any individual counterparty is subject to a limit,
which is reassessed annually by the Board.
Exposure is reduced significantly due to the Group having a
large spread of tenants who operate in different industries.
Price risk
The Company and Group are exposed to price risk due to normal
inflationary increases in the purchase price of the goods and
services it purchases in the UK. The exposure of the Company and
Group to inflation is low due to the low cost base of the Group and
natural hedge we have from owning "real" assets. Price risk on
income is protected by the rent review clauses contained within our
tenancy agreements and often secured by medium or long-term
leases.
Liquidity risk
The Company and Group actively manage liquidity by maintaining a
long-term finance facility, strong relationships with many banks
and holding cash reserves. This ensures that the Company and Group
have sufficient available funds for operations and planned
expansion or the ability to arrange such.
Interest rate risk
The Company and Group have both interest bearing assets and
interest bearing liabilities. Interest bearing assets consist of
cash balances which earn interest at fixed rate when placed on
deposit. The Company and Group have a policy of only borrowing debt
to finance the purchase of cash generating assets (or assets with
the potential to generate cash). The Directors revisit the
appropriateness of this policy annually.
Principal risks and uncertainties of the Group
The successful management of risk is something the Board takes
very seriously as it is essential for the Group to achieve
long-term growth in rental income, profitability and value. The
Group invests in long term assets and seeks a suitable balance
between minimising or avoiding risk and gaining from strategic
opportunities.
The Group's principal risks and uncertainties are all very much
connected as market strength will affect property values, as well
as rental terms and the Group's finance, or term loan, whose
security is derived primarily from the property assets of the
business. The financial health of the Group is checked against
covenants that measure the value of the property, as a proportion
of the loan, as well as income tests. The two measures of the
Group's finances are to check if the Group can support the interest
costs (income tests) and also the ability to repay (valuation
covenants).
The Group has a successful strategy to deal with these risks,
primarily its long lasting business model and strong management.
This meant the business had little or no issues during the 2008
financial crisis, which some commentators say was the worst
financial crisis since the Great Depression of the 1930s.
Market risk
If we want to buy, sell or let properties there is a market that
governs the prices or rents achieved. A property company can get
caught out if it borrows too heavily on property at the wrong time
in the market, affecting its loan covenants. If loan covenants are
broken, the Company may have to sell properties at non-optimum
times (or worse) which could decrease shareholder value. Property
markets are very cyclical and we in effect have three strategies to
deal with or mitigate the risk, but also take advantage of this
opportunity, 1) strong, experienced management means when the
market is strong we look to dispose of assets and when it is weak
we try and source bargains i.e. an emergent strategy also called an
entrepreneurial approach. 2) The Group has a diversified property
portfolio, and maintains a spread of sectors over, retail,
industrial, office and residential. The other diversification is
having a spread regionally, of the different classes of property
over the UK. Often in a cycle not all sectors or locations are
affected evenly, meaning that one or more sectors could be
performing stronger, maybe even booming, whilst others are
struggling. The strong investment sectors provide the Group with
opportunities that can be used to support slower sectors through
sales or income. 3) We invest in good secondary property, which
tends to be lower value, meaning we can be better diversified than
is possible with the equivalent funds invested in prime property.
There are not many property companies of our size who have over 950
individual units over 135 buildings/ locations. Secondary property
also, very importantly, is much higher yielding which generally
means the investment generates better interest cover and can cope
with drops in rents or loss of tenants more easily.
Property risk
As mentioned above we invest in most sectors in the market to
assist with diversification. Many people consider the retail sector
to be currently in severe flux, considerably affected by changing
consumer habits and of course the internet revolution. Of the
Group's investment portfolio, retail makes up the largest sector
being circa 60% by value at the last time that this was reviewed
(please note our portfolio has changed a lot since this was last
measured), therefore on the face of it we have a lot of exposure to
this fast changing sector. However the retail sector is affected to
lesser degrees in what we would describe as neighbourhood parades,
as opposed to traditional shopping high streets. The large part of
our retail portfolio in these neighbourhood parades, means we are
less affected by consumer habits and even benefit from some of the
changes. Neighbourhood parades provide more leisure, services and
convenience retail.
For example we have undertaken a few lettings to local or
smaller store formats, to big supermarket chains, which would not
have taken place many years ago. Block policy is another key
mitigating force within our property risks. Block policy means we
tend to buy a block rather than one off properties, giving us more
scope to change or get substantial planning if our type of asset is
no longer lettable. The obvious example is turning redundant
regional offices into residential. Also by having a row of shops,
we can increase or reduce the size of retail units to meet the
current requirements of retailers.
Finance risk
The final principal risk, which ties together the other
principal risks and uncertainties, is that if there are severe
adverse market or property risks then these will ultimately affect
our financing, making our lender either force the Group to sell
assets at non-optimal times, or take possession of the Group's
assets. We describe the above factors in terms of management,
business model and diversification to help mitigate against
property and market risks which as a consequence mitigate our
finance risk. The main mitigating factor is to maintain
conservative levels of borrowing, or headroom to absorb downward
movements in either valuation or income cover. The other key
mitigating factor, is to maintain strong, honest and open
relationships with our lenders, and good relationships with their
key competitors. This means if issues arise, there will be enough
goodwill for the Group to stay in control and for the issues to
resolve themselves, and hopefully save the situation. As a Group we
also hold uncharged properties and cash resources, which can be
used to rectify any breaches of covenants.
Other non-financial risks
The Directors consider that the following are potentially
material non-financial risks.
Risk Impact Action taken to mitigate
Reputation Ability to raise Act honourably, invest
capital/ deal well and be prudent.
flow reduced
Regulatory Transactional Seek high returns
changes and holding costs to cover additional
increase costs.
Lobby Government
-"Ramblings". Use
advisers when necessary.
People related Loss of key employees/ Maintain market level
issues low morale/ inadequate remuneration packages,
skills flexible working
and training. Strong
succession planning
and recruitment.
Suitable working
environment.
Computer Loss of data, External IT consultants,
failure debtor history backups, offsite
copies. Latest virus
and internet software.
Asset management Wrong asset mix, Draw on wealth of
asset illiquidity experience to ensure
balance between income
producing and development
opportunities. Continued
spread of tenancies
and geographical
location. Prepare
business for the
economic cycles.
----------------- ------------------------- ---------------------------
The Group Strategic Report set out on the above pages also
includes the Chairman's Statement shown earlier in these accounts
and was approved and authorised for issue by the Board and signed
on its behalf by:
S. J. Peters
Company Secretary
Unicorn House
Station Close
Potters Bar
Hertfordshire EN6 1TL 24 April 2018
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2017
Notes 31 December 31 December
2017 2016
Restated
GBP'000 GBP'000
Revenue 12,946 12,965
Cost of sales (3,779) (3,012)
Gross profit 9,167 9,953
Other income 1,905 466
Administrative expenses (2,105) (2,884)
----------------- ----------------
Operating profit 8,967 7,535
Profit on disposal of investment
properties 1,071 458
Movement in fair value of
investment properties 4 16,776 318
----------------- ----------------
26,814 8,311
Finance costs - bank loan
interest (2,302) (2,472)
Finance costs - swap interest (2,726) (2,625)
Investment income 27 109
Profit (realised) on the
disposal of available for 1,128 -
sale investments (shares)
Fair value gain/ (loss) on
derivative financial liabilities 5 1,850 (5,338)
Profit/ (loss) before income
tax 24,791 (2,015)
Income tax (expense)/ credit (3,490) 995
Profit/ (loss) for the year 21,301 (1,020)
================= ================
(Loss)/ profit for the period
from discontinued operations (59) 67
----------------- ----------------
Profit/ (loss) for the year 21,242 (953)
================= ================
Discontinuing operations
attributable to:
Equity holders of the parent (52) 50
Non-controlling interest (7) 17
(Loss)/profit for the year (59) 67
================= ================
Continuing operations attributable
to:
Equity holders of the parent 21,301 (1,020)
Non-controlling interest - -
----------------- ----------------
Profit/(loss) for the year 21,301 (1,020)
================= ================
Earnings/ (loss) per share
Basic and diluted - continuing
operations 120.2p (5.5)p
Basic and diluted - discontinued
operations (0.3)p 0.3p
================= ================
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2017
31 December 31 December
2017 2016
GBP'000 GBP'000
Restated
Profit/ (loss) for the year 21,242 (953)
----------- -----------
Other comprehensive income
Items that may be reclassified
subsequently to profit or loss
Movement in fair value of available
for
sale investments (shares) taken
to equity 279 87
Realised fair value on disposal
of available for sale investments (269) -
(shares) previously taken to
equity
Deferred tax relating to movement
in fair value of
available for sale investments
(shares) taken to equity (53) (15)
Realised tax relating to disposal
of available for sale investments 51 -
(shares) previously taken to
equity
Other comprehensive income
for the year, net of tax 8 72
Total comprehensive income/
(loss) for the year 21,250 (881)
=========== ===========
Attributable to:
Equity holders of the parent 21,257 (898)
Non-controlling interest (7) 17
21,250 (881)
=========== ===========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Company number 00293147
As at 31 December 2017
Notes 31 December 31 December
2017 2016
ASSETS GBP'000 GBP'000
Non-current assets
Plant and equipment 54 63
Investment properties 4 201,825 176,489
Deferred tax asset - 1,140
Available for sale investments
(shares) 17 908
201,896 178,600
----------- -----------
Current assets
Inventories - 57
Stock properties 448 736
Trade and other receivables 3,677 4,020
Cash and cash equivalents (restricted) - 1,017
Cash and cash equivalents 5,941 3,870
10,066 9,700
----------- -----------
Total assets 211,962 188,300
=========== ===========
EQUITY AND LIABILITIES
Capital and reserves
Share capital 4,437 4,437
Share premium account 5,491 5,491
Treasury shares (213) -
Capital redemption reserve 604 604
Retained earnings 80,893 61,747
Attributable to equity holders
of the parent 91,212 72,279
Non-controlling interest - 96
Total equity 91,212 72,375
----------- -----------
Non-current liabilities
Long-term borrowings 74,270 69,769
Derivative financial liability 5 26,400 28,250
Deferred tax liabilities 1,183 -
Obligations under finance leases 7,552 6,769
----------- -----------
109,405 104,788
----------- -----------
Current liabilities
Trade and other payables 10,945 10,721
Short-term borrowings 159 150
Current tax payable 241 266
----------- -----------
11,345 11,137
----------- -----------
Total liabilities 120,750 115,925
----------- -----------
Total equity and liabilities 211,962 188,300
=========== ===========
The accounts were approved by the Board of Directors and
authorised for issue on 24 April 2018. They were signed on its
behalf by:
A.S. Perloff
Chairman
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2017
Share Share Treasury Capital Retained Total
capital premium shares redemption earnings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
1 January 2016 4,437 5,491 - 604 65,485 76,017
Total comprehensive
income - - - - (898) (898)
Dividends - - - - (2,840) (2,840)
Balance at
1 January 2017 4,437 5,491 - 604 61,747 72,279
Total comprehensive
income - - - - 21,257 21,257
Treasury shares
purchased - - (213) - - (213)
Dividends - - - - (2,111) (2,111)
-------- -------- --------- ----------- --------- --------
Balance at
31 December
2017 4,437 5,491 (213) 604 80,893 91,212
======== ======== ========= =========== ========= ========
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2017
31 December 31 December
2017 2016
Restated
GBP'000 GBP'000
Cash flows from operating activities
Operating profit 8,967 7,536
Depreciation charges for the
year 9 90
Decrease in stock properties 124 -
Rent paid treated as interest (528) (514)
Profit before working capital
change 8,572 7,112
Decrease in receivables 302 478
Increase/(decrease) in payables 293 (383)
----------- -----------
Cash generated from operations 9,167 7,207
Interest paid (4,324) (4,342)
Income tax paid (1,194) (360)
----------- -----------
Net cash generated from continuing
operating activities 3,649 2,505
----------- -----------
Net cash (used in)/ generated
from discontinued operating
activities (35) 159
----------- -----------
Cash flows from investing activities
Purchase of plant and equipment (10) (8)
Purchase of investment properties (8,870) (539)
Purchase of available for sale
investments** - (85)
Corporate acquisition (net
of cash received) - (4,497)
Corporate disposal (net of
cash sold) (12) -
Proceeds from sale of investment
property 2,239 5,793
Proceeds from sale of available
for sale investments** 2,046 -
Dividend income received 21 103
Interest income received 6 6
----------- -----------
Net cash (used in)/ generated
from investing activities (4,580) 773
----------- -----------
Cash flows from financing activities
Repayments of loans (159) (1,655)
Loan arrangement fees and associated
costs - (442)
Purchase of own shares (213) -
Draw down of loan 4,503 2,000
Dividends paid (2,111) (2,840)
----------- -----------
Net cash generated from/ (used
in) financing activities 2,020 (2,937)
----------- -----------
Net increase in cash and cash
equivalents 1,054 500
Cash and cash equivalents at
the beginning of year* 4,887 4,387
----------- -----------
Cash and cash equivalents at
the end of year* 5,941 4,887
=========== ===========
* Of this balance GBPnil (2016: GBP1,017,000) is restricted by
the Group's lenders i.e. it can only be used for purchase of
investment property.
** Shares in listed and unlisted companies.
NOTES:
1. General information
While the financial information included in this preliminary
announcement has been prepared in accordance with International
Financial Reporting Standards (IFRSs), this announcement does not
itself contain sufficient information to comply with IFRSs. The
Group has also published full financial statements that comply with
IFRSs available on its website and to be circulated shortly.
The financial information set out in the announcement does not
constitute the company's statutory accounts for the years ended 31
December 2017 or 2016. The financial information for the year ended
31 December 2016 is derived from the statutory accounts for that
year, which were prepared under IFRSs, and which have been
delivered to the Registrar of Companies. The auditor's report on
those accounts was unqualified, did not contain a statement under
either Section 498(2) or Section 498(3) of the Companies Act 2006
and did not include references to any matters to which the auditors
drew attention by way of emphasis.
The financial information for the year ended 31 December 2017 is
derived from the audited statutory accounts for the year ended 31
December 2017 on which the auditors have given an unqualified
report, that did not contain a statement under section 498(2) or
498(3) of the Companies Act 2006 and did not include references to
any matters to which the auditors drew attention by way of
emphasis. The statutory accounts will be delivered to the Registrar
of Companies following the Company's annual general meeting.
The accounting policies adopted in the preparation of this
preliminary announcement are consistent with those set out in the
latest Group Annual financial statements. There is no material
seasonality associated with the Group's activities.
Going concern
The Group is strongly capitalised, has considerable liquidity
together with a number of long term contracts with its customers
many of which are household names. The Group also has strong
diversity in terms of customer spread, investment location and
property sector.
The Directors believe the Group is very well placed to manage
its business risks successfully and have a good expectation that
both the Company and the Group have adequate resources to continue
their operations. For these reasons they continue to adopt the
going concern basis in preparing the financial statements.
Disposal of MRG Systems Limited
In the year the Group entered into a sale agreement to dispose
of MRG Systems Limited. The disposal was effected in order to
generate cash flow for the Group's other businesses. The disposal
was completed on 21 December 2017, on which date, control of MRG
passed to the acquirer.
The results of subsidiaries disposed of are included within the
Income Statement, as Profit/ (loss) from discontinued operations,
to the effective date of disposal. Prior year balances have been
restated to present the performance of these discontinued
operations within this single line.
2. Dividends
Amounts recognised as distributions to equity holders in the
period:
2017 2016
GBP'000 GBP'000
Special dividend for the
year ended 31 December 2015
of 10p per share - 1,776
Final dividend for the year
ended 31 December 2016 of
9p per share (2015: 3p per
share) 1,227 532
Interim dividend for the
year ended 31 December 2017
of 5p per share (2016: 3p
per share) 884 532
2,111 2,840
========= =========
The Directors recommend a payment of a final dividend, for the
year ended 31 December 2017 of 7p per share (2016 - 9p), following
the interim dividend paid on 29 November 2017 of 5p per share. The
final dividend of 7p per share will be payable on 5 September 2018
to shareholders on the register at the close of business on 3
August 2018 (Ex dividend on 2 August 2018).
Also announced in mid-April 2018, we are paying a special
interim dividend of 10p per share payable on 18 May 2018 to
shareholders on the register at the close of business on 27 April
2018 (Ex dividend on 26 April 2018). This special dividend is in
relation to year ending 31 December 2017.
The full ordinary dividend for the year ended 31 December 2017
is anticipated to be 22p per share, being the 5p interim per share
paid, the 10p special dividend per share and the recommended final
dividend of 7p per share.
3. Earnings/(loss) per ordinary share (basic and diluted)
The calculation of profit per ordinary share is based on the
profit, after excluding non-controlling interests, being a profit
of GBP21,301,000 (2016 - a loss of GBP970,000) and on 17,715,199
ordinary shares being the weighted average number of ordinary
shares in issue during the year (2016 - 17,746,929). There are no
potential ordinary shares in existence. The Company holds 63,460
ordinary shares in treasury.
4. Investment property
Investment
Properties
GBP'000
Fair value
At 1 January 2016 176,133
Additions 539
Acquisition of subsidiary 4,462
Disposals (5,335)
Transferred from stock properties 255
Fair value adjustment on property held
on operating leases 117
Revaluation increase 318
At 1 January 2017 176,489
Additions 8,870
Disposals (1,320)
Transferred from stock properties 164
Fair value adjustment on property held
on operating leases 803
Revaluation increase 16,776
At 31 December 2017 201,825
==============
Carrying amount
At 31 December 2017 201,825
==============
At 31 December 2016 176,489
==============
5. Derivative financial instruments
The main risks arising from the Group's financial instruments
are those related to interest rate movements. Whilst there are no
formal procedures for managing exposure to interest rate
fluctuations, the Board continually reviews the situation and makes
decisions accordingly. Hence, the Company will, as far as possible,
enter into fixed interest rate swap arrangements. The purpose of
such transactions is to manage the interest rate risks arising from
the Group's operations and its sources of finance.
2017 2016
Bank loans GBP'000 GBP'000
Interest is charged as to: Rate Rate
Fixed/ Hedged
HSBC Bank plc* 35,000 7.01% 35,000 7.01%
HSBC Bank plc** 25,000 6.58% 25,000 6.58%
Unamortised loan arrangement
fees (489) (654)
Floating element
HSBC Bank plc 14,501 9,997
Natwest Bank plc 417 576
------- -------
74,429 69,919
======= =======
Bank loans totalling GBP60,000,000 (2016 - GBP60,000,000) are
fixed using interest rate swaps removing the Group's exposure to
fair value interest rate risk. Other borrowings are arranged at
floating rates, thus exposing the Group to cash flow interest rate
risk.
Financial instruments for Group and Company
The derivative financial assets and liabilities are designated
as held for trading.
Hedged Average Duration 2017 2016
amount rate of contract Fair Fair
remaining value value
GBP'000 'years' GBP'000 GBP'000
Derivative Financial
Liability
Interest rate
swap 35,000 5.06% 20.69 (22,831) (23,610)
Interest rate
swap 25,000 4.63% 3.92 (3,569) (4,640)
(26,400) (28,250)
========= =========
Net fair value gain/ (loss) on
derivative financial assets 1,850 (5,338)
========= =========
* Fixed rate came into effect on 1 September 2008. Rate includes
1.95% margin. The contract includes mutual breaks, the first
potential one was on 23 November 2014 (and every 5 years
thereafter).
** This arrangement came into effect on 1 December 2011 when
HSBC exercised an option to enter the Group into this interest swap
arrangement. The rate shown includes a 1.95% margin. This contract
includes a mutual break on the fifth anniversary and its duration
is until 1 December 2021.
6. Events after the reporting date
In January 2018 the Group sold Marine Terrace, Margate for
GBP450,000, which had a recently independently valued book value of
GBP250,000 at the year end.
The Group placed three properties in an auction in February
2018, 1) MRG's office, The Mill, Stonehouse, 2) 19 Queen Street,
Ramsgate, and 3) High Street, Dudley, as separate lots for a
combined value of GBP1,323,000, which have exchanged and completed
in April 2018. These had a combined book value, following the
recent valuation, at the year-end of GBP1,115,000.
In March 2018 the Group exchanged on a private treaty disposal
of our vacant shop and office complex in Stockport for GBP900,000,
which was independently valued at the year-end to GBP435,000.
In March 2018, the purchaser of our Holloway Head property, in
Birmingham, approached us to further extend their completion date,
by agreeing a further GBP40,000 per week, of which they paid
GBP80,000 up front in March 2018 with the additional extra to be
collected at exchange. This has been delayed again and we hope that
it will now complete at the end of July 2018. Due to the
uncertainty, and as the completion has been delayed three times,
and our contract is with a company with no real financial strength,
set up especially to buy the property, we have not included the
disposal within our figures.
In April 2018 the Group exchanged on a private treaty disposal
of our freehold of St Nicholas House, Sutton, jointly with our
tenants who have a long-leasehold interest, for GBP12,750,000. Our
share of the proceeds is GBP7,837,500 before costs. Our book cost,
which was independently valued at the year-end to GBP5,540,000, but
of course does not take account of the marriage value which is
achieved by selling with our tenant's interest.
7. Copies of the full set of Report and Accounts
Copies of the Company's report and accounts for the year ended
31 December 2017 will be posted to shareholders shortly, and will
be available from the Company's registered office at Unicorn House,
Station Close, Potters Bar, Hertfordshire, EN6 1TL and will be
available for download on the Group's website
www.pantherplc.com.
+44 (0) 1707
Panther Securities PLC 667 300
Andrew Perloff, Chairman
Simon Peters, Finance Director
Allenby Capital Limited +44 (0) 20 3328 5656
David Worlidge
Alex Brearley
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR USUBRWKASUAR
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