Register
Login:
Share:
Email Facebook Twitter

RNS VIDEO: Reabold Resources #RBD raise £6 million and take stake in Danube Petroleum Watch here

EXCLUSIVE: HemoGenyx are creating blood cancer treatments with US$9 billion market potential


Regulatory News


Interim Results

Thu, 7th Dec 2017 07:00


RNS Number : 6252Y
Circle Property PLC
07 December 2017

7 December 2017

Circle Property Plc

("Circle", "Company" or the "Group")

Interim Results for the six months ended 30 September

CONTINUED LEASING AND ASSET MANAGEMENT MOMENTUM DRIVES STRONG FINANCIAL PERFORMANCE

Circle Property Plc (AIM: CRC), the specialist regional UK property investment, development and management company today announces its results for the six months to 30September 2017. The results show continued strong operational performance driven by asset management translating to growth in portfolio valuation, NAV and rental income and leading to a proposed further increase in dividend.

Financial Highlights

11.3% increase in portfolio valuation to 103.5 million (31 March 2017: 93 million), driven primarily by the Company's ongoing asset management initiatives

15.3% increase in NAV per share to 2.11 (31 March 2017: 1.83) contributing to 40% growth in NAV since IPO in February 2016

26% increase in rental income to 2.9 million for the first six months to 30 September 2017 (30 September 2016: 2.3 million)

57% increase in net operating profit to 1.8 million which excludes gains on investment properties (six months to 30 September 2016: 1.1 million) leading to a 3.6% increase in profit before tax to 8.6 million (six months to 30 September 2016: 8.3 million)

Loan to value ratio reduced to 47% (31 March 2017: 49%)

6.9% increase in earnings per share to 31 pence (30 September 2016: 29 pence)

8.3% increase in interim dividend to 2.6 pence per share (30September2016:2.4pence) reflecting the Board's ongoing confidence in the Company's prospects and outlook. The dividend will be paid on 18 January 2018 to shareholders on the register on 15 December 2017, with an ex-dividend date of 14 December 2017.

WAULT of 11.29 years to expiry, up from 7.39 years

Operational Highlights

Building on the 648,300 of annualised rent which was signed over the second half of last year, three further significant lease contracts were secured during the period, adding 378,841 or 7.2% to the annualised rent roll and comprising:

o Signing a new 20 year lease without break to Las Iguanas, the popular Latin American restaurant chain owned by Casual Dining Group Limited, for 220,000 per annum at one of our two newly developed restaurant units in Somerset House, Temple Street, Birmingham.

o Securing Topps Tiles as a new tenant at the Baildon Bridge Retail Park in Shipley on a 10 year lease with a 5 year break option, at a rent of 52,585 per annum.

o Achieving full occupancy at the Group's newly refurbished offices at Powerhouse in Milton Keynes by letting all 6,641 sq ft of the remaining space to Stephen Eagell Ltd, one of the UK's leading Toyota dealerships, on a 10 year lease at a rent of 106,256 per annum, equating to a rent of 16 per square foot.

Further leasing progress has been made subsequent to the end of the first half year:

o The second of the two restaurant units located in Somerset House, Birmingham, is now under offer.

o Grant Thornton has removed its August 2018 break clause at 300 Pavilion Drive, Northampton Business Park, Northampton, which extends the lease by five years to 2023.

o At the One Castlepark offices in Bristol, a 10 year lease renewal has been agreed on 13,143sqft of space on two equal leases at a rent of 22 per sq ft, with a five year break option.

o In November, the Group completed a 1,350 sq ft letting of the 5th floor at 141 Moorgate for five years at a rent of 59,444 per annum.

o 5,500 sq ft in K2 at the Company's Kents Hill Park business park, Milton Keynes, is now under offer.

o At 36 Great Charles Street, Birmingham, following the rolling refurbishment of 25,000 sq ft of offices, one office suite is under offer at 18.50 per sq ft with another under negotiation.

o Following Willis Towers Watson exercising its break clause and vacating Unit B at Chapel Lane, Great Blakenham, Nr Ipswich, in July 2017, the Company let both Units A&B at the end of November to Anchor Safety LLP, the long standing tenant of Unit A. Anchor has entered into a new five year lease without break on 45,319 sq ft at a rent of 154,500 per annum.

o The remaining Unit 2 at Baildon Bridge Retail Park, Shipley, has been placed under offer at a similar rent to that achieved on Unit 3.

o Following a 3.5 million refurbishment of the six office floors at Somerset House, Birmingham, the project is now nearing completion. The offices are to be formally launched into the market early in 2018.

"Although there is some degree of caution from tenants making leasing decisions against the backdrop of Brexit uncertainty, we continue to make good leasing progress across our portfolio. Since our IPO in February 2016, we have achieved a 40% increase in NAV and remain confident in our ability to deliver further growth from active asset management. We believe the level of demand for space in our assets is a direct reflection of the location and quality of our assets, as well as the standard of our refurbishments, which places us ahead of the competition. Furthermore, the great majority of our assets are highly reversionary so we have the flexibility to moderate rents or incentives and offer highly attractive terms to secure the tenant, whilst at the same time providing rental income growth for our shareholders.

Circle Property Plc

+44 (0)20 7930 8503

John Arnold, CEO

Edward Olins, COO

Smith & Williamson

+44 (0) 20 7131 4000

Azhic Basirov

Katy Birkin

Radnor Capital

Iain Daly

Joshua Cryer

+44 (0) 20 3897 1830

FTI Consulting

+44 (0)20 3727 1000

Richard Sunderland

Giles Barrie

Eve Kirmatzis

Power House, our 21,400 sq ft office building in Milton Keynes, is now fully let following Stephen Eagell Ltd letting on a 10 year lease at a rent of 106,256 per annum.

Following the completion of the letting of Unit 3 at Baildon Bridge in Shipley to Topps Tiles, Unit 2 is now under offer and, at completion, this 37,200 sq ft retail park will be fully let.

In October 2017, we were pleased to secure a letting on both industrial units (45,000 sq ft) at Great Blakenham, Ipswich, to Anchor Safety.

Developments

Our developments at Milton Keynes and Great Charles Street, Birmingham, are almost complete with marketing well underway, whilst completion of Somerset House, Birmingham, is imminent with marketing due to commence early in January 2018.

Kent's Hill Park

In October we placed the first letting, of 5,500 sq ft, at K2 in solicitors' hands. When we make further progress in the lettings we intend to take back K3 from Compass to undertake a further refurbishment. In the meantime, we are undertaking further landscaping improvements at the property to improve its letting prospects.

Somerset House

Completion of the office refurbishment is expected by the end of the calendar year and we are preparing to launch the asset to agents and begin a wider marketing campaign in January 2018.

Great Charles Street, Birmingham

36 Great Charles Street, Birmingham, is being marketed and we already have one letting in solicitors' hands at 18.50 per sq ft with active negotiations underway with an additional tenant for another half floor.

Outlook

Condensed consolidated statement of comprehensive income

for the 6 months ended 30 September 2017

Note

6 months to
30 September
2017

6 months to
30 September
2016

12 months to
31 March
2017

(unaudited)

(unaudited)

(audited)

Rental income

4

2,943,673

2,340,377

5,265,507

Other income

4

92,736

60,262

138,122

3,036,409

2,400,639

5,403,629

Property expenses

5

(425,210)

(393,726)

(1,037,375)

Net rental income

2,611,199

2,006,913

4,366,254

Administrative expenses

6

(801,185)

(855,991)

(2,114,965)

Operating profit before gains on investment properties

1,810,014

1,150,922

2,251,289

Gains on disposal of investment properties

-

-

278,771

Gains on revaluation of investment properties

11

7,307,151

6,597,429

7,360,657

Negative goodwill on acquisition of CPUT

-

-

195,554

Listing costs

-

-

(107,493)

Operating profit

9,117,165

7,748,351

9,978,778

Finance income

7

1,293

46,542

48,511

Finance costs

8

(553,225)

(752,895)

(1,293,384)

Effective interest rate adjustment on borrowings

-

1,232,304

1,232,304

Net finance costs

(551,932)

525,951

(12,569)

Profit for the period before taxation

8,565,233

8,274,302

9,966,209

Taxation

9

99,030

(61,897)

(21,912)

Profit after taxation

8,664,263

8,212,405

9,944,297

Earnings per share

10

0.31

0.29

0.35

There is no comprehensive income other than that included in the profit for the period. All of the profit for the period is attributable to the owners of the Company.

All items in the above statement derive from continuing operations.

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Condensed consolidated statement of financial position

30 September 2017

Note

30 September 2017

30 September 2016

31 March
2017

(unaudited)

(unaudited)

(audited)

Non-current assets

Investment properties

11

96,287,600

83,734,663

86,054,336

Property plant and equipment

26,080

32,894

29,158

Trade and other receivables

12

6,768,045

6,312,535

6,518,077

Deferred tax

1,314,814

908,553

1,141,887

Financial instruments at fair value through profit and loss

86

-

710

104,396,625

90,988,645

93,744,168

Current assets

Trade and other receivables

12

1,352,137

1,757,277

1,195,372

Deferred tax

148,626

102,736

128,240

Cash and cash equivalents

5,161,605

2,991,506

4,893,807

6,662,368

4,851,519

6,217,419

Total assets

111,058,993

95,840,164

99,961,587

Equity

Stated capital

42,542,179

42,542,179

42,542,179

Treasury share reserve

(380,001)

(380,001)

(380,001)

Retained earnings

17,588,004

8,606,688

9,659,457

Total equity

59,750,182

50,768,866

51,821,635

Non-current liabilities

Borrowings

13

48,800,835

44,085,159

45,590,423

48,800,835

44,085,159

45,590,423

Current liabilities

Trade and other payables

14

2,507,976

986,139

2,549,529

2,507,976

986,139

2,549,529

Total liabilities

51,308,811

45,071,298

48,139,952

Total liabilities and equity

111,058,993

95,840,164

99,961,587

The condensed consolidated interim financial statements were approved by the Board of Directors on 6 December 2017.

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Condensed consolidated statement of cash flows

for the 6 months ended 30 September 2017

6 months to 30 September 2017

6 months to 30 September 2016

12 months to 31 March
2017

(unaudited)

(unaudited)

(audited)

Cash flows from operating activities

Profit for the period before taxation

8,565,233

8,274,302

9,966,209

Adjustments for:

Finance income

(1,293)

(46,542)

(48,511)

Finance expense

553,225

752,895

1,293,384

Depreciation

3,077

3,678

7,414

Gains on revaluation of investment properties

(7,307,151)

(6,597,429)

(7,360,657)

Gains on disposal of investment properties

-

-

(278,771)

Amortisation of loan arrangement fees

29,406

11,049

40,136

Fair value movement on interest rate swaps

625

(94,872)

(95,565)

Effective interest rate adjustment on borrowings

-

(1,232,304)

(1,232,304)

Negative goodwill on acquisition of CPUT

-

-

(195,554)

Increase in trade and other receivables

(406,733)

(3,700,877)

(3,409,020)

Decrease in trade and other payables

(113,253)

(1,327,035)

(103,177)

Cash generated from operating activities

1,323,136

(3,957,135)

(1,416,416)

Interest and other finance costs paid

(553,312)

(821,386)

(1,416,942)

Interest received

1,293

4,055

70,513

Net cash from operating activities

771,117

(4,774,466)

(2,762,845)

Cash flows from investing activities

Cost of additions to investment properties

(2,948,608)

(1,356,410)

(3,520,046)

Proceeds from disposal of investment properties

-

-

1,278,770

Cost of additions of property plant and equipment

-

(14,200)

(14,200)

Net cash from investing activities

(2,948,608)

(1,370,610)

(2,255,476)

Cash flows from financing activities

Repayment of borrowings

-

(38,966,135)

(39,775,343)

Drawdown of borrowings

3,181,005

44,244,177

46,529,563

Dividends paid

(735,716)

(657,613)

(1,358,245)

Net cash used in financing activities

2,445,289

4,620,429

5,395,975

Net increase / (decrease) in cash and cash equivalents

267,798

(1,524,647)

377,654

Cash and cash equivalents at the beginning of the period

4,893,807

4,516,153

4,516,153

Cash and cash equivalents at the end of the period

5,161,605

2,991,506

4,893,807

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Condensed consolidated statement of changes in equity

for the 6 months ended 30 September 2017

Share
capital

Treasury shares reserve

Retained earnings

Total

As at 1 April 2016

42,542,179

(380,001)

1,073,405

43,235,583

Profit for the period

-

-

8,212,405

8,212,405

Dividends

-

-

(679,122)

(679,122)

As at 30 September 2016

42,542,179

(380,001)

8,606,688

50,768,866

Profit for the period

-

-

1,731,892

1,731,892

Dividends

-

-

(679,123)

(679,123)

As at 31 March 2017

42,542,179

(380,001)

9,659,457

51,821,635

Profit for the period

-

-

8,664,263

8,664,263

Dividends

-

-

(735,716)

(735,716)

As at 30 September 2017

42,542,179

(380,001)

17,588,004

59,750,182

Notes to the condensed consolidated interim financial statements

for the 6 months ended 30 September 2017

1 General information

These condensed consolidated interim financial statements are for Circle Property Plc ("the Company") and its subsidiary undertakings (together referred to as the "Group").

The Company's shares are admitted to trading on AIM, a market operated by the London Stock Exchange plc. The Company is domiciled and registered in Jersey, Channel Islands. The address of its registered office is 3rd Floor, Standard Bank House, 47-49 La Motte Street, St Helier, Jersey, JE2 4SZ.

The nature of the Company's operations and its principal activities are that of property investment in the UK.

2 Principal accounting policies

Basis of accounting

The condensed consolidated interim financial statements have been prepared in accordance with the IAS 34 "Interim Financial Reporting", and should be read in conjunction with the Group's last consolidated financial statements as at and for the year ended 31 March 2017. They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last financial statements.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chief Executive's statement. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in these financial statements.

The Group has adequate financial resources together with long term rental contracts with a wide range of tenants. As a consequence, the Directors believe that the Group is well placed to manage its business risk successfully.

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 have adopted the going concern basis in preparing the interim financial statements.

Estimates and judgements

In preparing these condensed consolidated interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 March 2017.

3 Operating segments

During the period the Group operated in one geographical segment, which is the United Kingdom, and one reporting segment, which is investment in commercial property. Therefore no segmental reporting is required.

4 Revenue

6 months to
30 September 2017

6 months to 30 September 2016

12 months to 31 March
2017

(unaudited)

(unaudited)

(audited)

Rental income

2,676,937

2,099,171

4,743,974

SIC 15 adjustment (spreading of lease incentives)

266,736

241,206

521,533

2,943,673

2,340,377

5,265,507

Insurance recovery

48,053

60,036

118,647

Other income

44,683

226

19,475

92,736

60,262

138,122

3,036,409

2,400,639

5,403,629

5 Property expenses

6 months to
30 September 2017

6 months to 30 September 2016

12 months to 31 March
2017

(unaudited)

(unaudited)

(audited)

Property expenses

140,501

81,627

260,705

Property service charges

144,397

167,185

337,635

Property repairs and maintenance costs

13,376

26,059

25,960

Property insurance

62,496

70,615

144,276

Property rates

39,440

48,240

68,799

Lease variation costs

25,000

-

200,000

425,210

393,726

1,037,375

6 Administrative expenses

6 months to
30 September 2017

6 months to 30 September 2016

12 months to 31 March
2017

(unaudited)

(unaudited)

(audited)

Staff costs

397,675

318,218

1,060,222

Administration fees

124,248

126,000

251,829

Legal and professional fees

210,474

290,853

564,685

Audit fees

1,300

30,639

65,724

Accountancy fees

3,221

4,769

9,918

Rent, rates and other office costs

31,533

26,531

57,219

Other overheads

29,657

54,862

97,954

Depreciation of tangible fixed assets

3,077

4,119

7,414

801,185

855,991

2,114,965

7 Finance income

6 months to
30 September 2017

6 months to 30 September 2016

12 months to 31 March
2017

(unaudited)

(unaudited)

(audited)

Bank interest

1,293

4,055

5,220

Loan interest

-

42,487

43,291

1,293

46,542

48,511

8 Finance costs

6 months to
30 September 2017

6 months to 30 September 2016

12 months to 31 March
2017

(unaudited)

(unaudited)

(audited)

Swap interest

-

70,880

70,880

Loan interest

512,518

566,679

1,060,234

Loan commitment fees

10,676

24,159

42,699

Loan arrangement fees

29,406

186,049

215,136

Fair value movement on interest rate swaps

625

(94,872)

(95,565)

553,225

752,895

1,293,384

9 Taxation

6 months to
30 September 2017

6 months to 30 September 2016

12 months to 31 March
2017

(unaudited)

(unaudited)

(audited)

Current tax

171,315

53,733

77,031

Over provision of current tax in prior year

(77,031)

-

-

Deferred tax charge / (credit)

57,942

8,164

(55,119)

Under provision of deferred tax credit in prior year

(251,256)

-

-

(99,030)

61,897

21,912

10 Earnings per share

Basic earnings per share has been calculated on profit after tax attributable to ordinary shareholders for the period (as shown on the condensed consolidated statement of comprehensive income) and the weighted average number of ordinary shares in issue during the period.

6 months to
30 September 2017

6 months to 30 September 2016

12 months to 31 March
2017

(unaudited)

(unaudited)

(audited)

Profit for the period

8,664,263

8,212,405

9,944,297

Weighted average number of shares

28,296,762

28,296,762

28,296,792

Earnings per ordinary share:

0.31

0.29

0.35

In the opinion of the Board, treasury shares held to satisfy share awards to management currently do not have any material value and hence do not have any dilutive effect. Therefore no diluted earnings per share has been presented.

11 Investment properties

30 September 2017

30 September 2016

31 March
2017

(unaudited)

(unaudited)

(audited)

Balance brought forward

93,025,000

77,735,000

77,735,000

Cost of additions to investment properties

2,926,114

1,356,410

3,912,856

Disposal of investment properties

-

-

(1,000,000)

Gains on revaluation of investment properties

7,307,151

6,597,429

7,360,657

Lease incentive amortisation

266,735

4,736,161

5,016,487

Fair value of investment properties per valuation report

103,525,000

90,425,000

93,025,000

Unamortised lease incentives

(7,237,400)

(6,690,337)

(6,970,664)

Closing fair value

96,287,600

83,734,663

86,054,336

The fair value of the Group's investment properties per the Valuation Report amounted to 103,525,000. The difference between the fair value of the investment properties per the Valuation Report and the fair value per the balance sheet of 7,237,400 relates to unamortised lease incentives which are recorded in the financial statements within non-current and current assets.

The Group has pledged all of its investment properties to secure banking facilities granted to the Group as detailed in note 13.

The fair value of the Group's investment properties at 30 September 2017 has been arrived at on the basis of valuation carried out by Savills (UK) Limited. The valuation was carried out in accordance with the Practice Statements contained in the Appraisal and Valuation Standards as published by the RICS. In forming their opinion of the fair value, the independent valuer's had regard to the current best use of the property, its investment attributes and recent comparable transactions. The valuation was carried out using the "All Risks Yield" method taking into consideration both sales and rental evidence and formulating the opinion of market value taking into account the properties' locations, specifications and specific characteristics.

12 Trade and other receivables

30 September 2017

30 September 2016

31 March
2017

(unaudited)

(unaudited)

(audited)

Non-current

Lease incentives

6,768,045

6,312,535

6,518,077

Current

Circle Property Trading (Maidstone) Limited

-

148,398

-

Loan interest due from Circle Property Trading (Maidstone) Limited

-

64,489

-

Lease incentives

469,355

377,802

452,587

Amounts due from property agents

92,421

8,951

68,767

Amounts due from tenants

173,707

241,063

153,123

VAT

463,076

783,394

352,717

Other receivables

153,578

133,180

168,178

1,352,137

1,757,277

1,195,372

13 Borrowings

30 September 2017

30 September 2016

31 March
2017

(unaudited)

(unaudited)

(audited)

Brought forward

45,720,355

38,966,135

38,966,135

Loan repayments

-

(39,775,343)

(39,775,343)

Loan drawdowns

3,181,005

45,053,385

46,529,563

Facility drawn down

48,901,360

44,244,177

45,720,355

Unamortised lending costs

(100,525)

(159,018)

(129,932)

Total borrowings

48,800,835

44,085,159

45,590,423

The Group is party to a 50 million revolving facility with National Westminster Bank plc. The facility has a three year term with two options to extend for a further year, with a drawdown loan to value of up to 55% of the gross portfolio value and an interest rate of 1.85% over LIBOR.

Interest is charged at a rate of 0.74% on the undrawn loan facility of 1,098,640 (2016: 5,755,823).

14 Trade and other payables

30 September 2017

30 September 2016

31 March
2017

(unaudited)

(unaudited)

(audited)

Trade payables

638,437

332,247

384,092

Property improvement costs

498,364

-

471,375

Wages and salaries

54,459

-

411,948

Deferred income

782,446

401,836

760,364

Rental deposit accounts

129,622

135,620

129,591

Loan interest payable

215,333

23,194

215,243

Valuation fee

18,000

18,000

36,000

Current taxation

171,315

53,733

77,031

Dividends payable

-

21,509

-

Listing costs

-

-

63,885

2,507,976

986,139

2,549,529

15 Post balance sheet events

There have been no post balance sheet events that would require disclosure or adjustment to these financial statements.

Registered Office, Officers and Registrars

Directors

Ian Henderson

Non-Executive Chairman

John Arnold

Chief Executive

Edward Olins

Chief Operating Officer

The Duke of Roxburghe

Non-Executive Director

James Hambro

Non-Executive Director

Michael Farrow

Non-Executive Director

Richard Hebert

Non-Executive Director

Resigned 21 September 2017

Timothy Scott Warren

Non-Executive Director

Appointed 21 September 2017

Company Secretary

Consortia Secretaries Limited

Registered Office

3rd Floor

Standard Bank House

47-49 La Motte Street

St Helier

Jersey

JE2 4SZ

Registrars

Computershare Investor Services (Jersey) Limited

Queensway House

Hillgrove Street

St Helier

Jersey

JE1 1ES


This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFIAFELRIID


Related Shares:
Circle Property (CRC)



Back to Regulatory News


Share Price, Share Chat, Stock Market news at lse.co.uk
FREE Member Services
- Setup a personalised Watchlist and Virtual Portfolio.
- Gain access to LIVE real-time Regulatory News (RNS).
- View more Trades, Directors' Deals, and Broker Ratings.
Share Price, Share Chat, Stock Market news at lse.co.uk




Datafeed and UK data supplied by NBTrader and Digital Look. While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.