Adams Regulatory News (ADA)

28 Sep 2007 07:05

Dawnay, Day Carpathian PLC28 September 2007 Dawnay, Day Carpathian PLC ('DDC' or the 'Company') Unaudited Interim results for the six months ended 30th June 2007 Highlights • Successful secondary Placing raising a further £100 million (before expenses) completed in May 2007 • Diversified portfolio spread across 6 countries in Central and Eastern Europe • During the six-month period ended 30th June 2007, the Company committed £29 million of equity to a forward purchase of 55% of a development in Riga. Since 30th June 2007, announced a further two development transactions for a combined equity commitment of £30 million (including the Arad development announced today) • On track to meet the investment targets timetable set in May 2007 supported by a robust pipeline of some ten transactions which includes a balanced mix of development and income producing opportunities • On track to deliver dividend targets of 10p for 2007 and 2008 • Net rental income of £11.11 million (30th June 2006: £4.42 million) • Net profit grew to £7.16million (30th June 2006: £5.18 million) excludes any new revaluation surplus as the properties are only revalued on an annual basis • Basic earnings per share is 3.7 pence, while diluted earnings per share is 3.6 pence • NAV per share of 112.41 pence (31 December 2006: 114.15 pence). Adjusted NAV per share of 119.67 pence (31 December 2006: 126.68 pence). The change in NAV values largely reflects the impact of the £100m secondary Placing and dividend declared of £10.7 million during the period. Rupert Cottrell, Chairman of Dawnay, Day Carpathian, said: "We are pleased toreport that the Company remains in a good position with a strong andgeographically diverse portfolio. While global market conditions have unsettledspecific markets, revenues from our operations have been unaffected and in timeshould generate acquisition opportunities for the Company as some of the lessestablished buyers fall away thereby reducing competition. The additional fundsraised in May 2007 will enable the continued expansion of the portfolio and theCompany is pleased to confirm it remains on track to deliver on its dividendtargets of 10p for 2007 and 2008." Enquiries: Dawnay, Day Carpathian PLC Paul Rogers 020 7834 8060 Balazs Csepregi Cardew Group Tim Robertson 020 7930 0777 Catherine Maitland Chairman's statement I am pleased to report that following the successful secondary Placing completedin May 2007, the Company is on track to build a substantial retail portfolio inCentral and Eastern Europe, within the timetable set. While market conditionshave become less predictable, the property investment manager, Dawnay, DayPanTerra ("PanTerra") believes that the Company is well positioned given thecurrent transaction pipeline which in itself is sufficient to meet the Company'sinvestment targets together with the expectation of being able to take advantageof more opportunistic purchases arising from reduced competition as lessestablished buyers find it harder to operate. During the six-month period, the Company delivered a solid financial performancegenerated currently from the income producing property portfolio which benefitssignificantly from being diversified geographically as well as by targetcustomer groups. The Company's investment strategy remains focused on enhancing thediversification of the present portfolio through acquiring or developing newproperties in new locations as well as continuing to pursue the significantasset management opportunities across the existing portfolio. Ultimately, theCompany is committed to providing shareholders with a resilient propertyportfolio and delivering reliable dividend income and capital growth. Financial results The Company generated net rental income for the period of £11.11 million (30thJune 2006: £4.42 million) which led to a profit before tax of £7.16 million(30th June 2006: £5.18 million). The basic earnings per share of the Company were 3.7 pence, while the dilutedearnings per share were 3.6 pence. NAV per share was 112.41 pence (31 December2006: 114.15 pence) and the adjusted NAV per share was 119.67 pence (31 December2006: 126.68 pence). The change in NAV values largely reflects the impact of the£100 million secondary Placing and dividend declared of £10.7 million during theperiod. As at 30th June 2007, the Company's borrowings totalled £256.2 million,representing a loan to value ratio of 69%. The weighted average lengths of theloans are approximately 2.7 years. The weighted average interest rate of theborrowings is 5.21% for the period. The Company has hedged its interest rateexposure by swapping the variable Euribor rate to an average fixed rate of3.57%. Dividends The Board has declared its first dividend in respect of the financial year ended31 December 2007 of 3.33 pence per share on 23 April 2007. This will be paid on28 September 2007 to ordinary shareholders on the register at the close ofbusiness on 4 May 2007. The Company's intention is to pay an additional interim dividend of 3.33 penceper share, together with a final dividend for the financial year ended 31December 2007, which is intended to result in an aggregate dividend payment of10 pence per share for the financial year ended 31 December 2007. Property portfolio During the period, the Company committed £29 million of equity to the forwardpurchase of 55% of the Riga development and since then we have announced afurther two development transactions for a combined equity commitment of £30million. In addition, all conditions were met in the early part of 2007, withregard to the final completion of the £57.75 million acquisition of theInterfruct portfolio in Hungary first announced in November 2006. The underlying market conditions reflect increasing consumer spending andaffordable rents. This is feeding through to more prompt rental payments. The development of the Galleria Patollo shopping centre in Riga, Latvia, iscontinuing on track, this is a substantial project which on completion in 2009is expected to be worth in excess of £170 million. The Company's largest asset,the Promenada Shopping Centre in Poland is currently being extended by 7,600 sqmto incorporate further retail space and this is also progressing to plan. Today the Company announced the acquisition of a retail development site inArad, Romania for £8.3 million. This acquisition follows on from the acquisitionof the development site in Cluj-Napoca, Romania announced in August 2007 and isthe second of the four pipeline deals identified by PanTerra at the time of thesecond fund raising completed in May 2007. Share buy back The Company continues to actively monitor share buy back opportunities, but isequally conscious of conserving existing cash resources for its investmentcommitments. Outlook The macroeconomic outlook within our target markets is still attractive and theBoard believe it provides the Company with excellent growth prospects in theconsumer sector in the medium and short term. The present market turbulence experienced in the credit markets of primarily USAand Western Europe has so far only had a slight impact on our target markets. Inaddition, the slight adjustments in pricing on new debt instruments forprospective deals are compensated by the favourable changes in the Euro swaprates. The Board feels that the present market conditions paired with the Company'sresources and its experience in these markets provides us with excellentopportunities to deliver outstanding value to our shareholders. UNAUDITED CONSOLIDATED INCOME STATEMENT 30-Jun-07 30-Jun-06 31-Dec-06For the six months ended 30 June 2007GROUP Note £'000 £'000 £'000Gross rental income 13,146 4,635 15,799Service charge income 4,825 1,449 5,946Service charge expense (5,606) (1,355) (6,712)Property operating expenses (1,621) (491) (2,679)Other property income 367 184 335 _________________________________ Net rental and related income 11,111 4,422 12,689 Changes in fair value of investment property 2 - - 36,792 Changes in fair value of financial assets and liabilities (841) (174) (1,147) Net Foreign Exchange (loss) / gain 1,186 (341) 1,388 Administrative expenses (1,561) (911) (2,140) _________________________________Net operating profit before net financing income 9,895 2,996 47,582 _________________________________ Financial income 4,888 4,115 6,839Financial expense (7,624) (1,935) (7,660) _________________________________ Net financing (expense)/income 3 (2,736) 2,180 (821) _________________________________ Net profit before tax 7,159 5,176 46,761 Tax (1,182) (618) (10,739) _________________________________ PROFIT FOR THE PERIOD 5,977 4,558 36,022 ================================= Attributable to:Equity holders of the Company 5,977 4,460 30,706Minority Interests - 99 5,316 Basic and diluted earnings per share for profit attributable to the equity holders of the Company during the period Basic earnings per share 4 3.7 3.1 21.1Diluted earnings per share 4 3.6 3.0 21.0 UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the six months ended 30 June 2007 Share Share Minority Translation Retained Capital Premium Interest Reserve Earnings TotalGROUP Note £'000 £'000 £'000 £'000 £'000 £'000 _______________________________________________________ Balance as at 1 January 2006 1,454 125,556 230 (95) 14,675 141,820Profit for the period - - - - 36,022 36,022Minority interest - - 460 - (460) -Dividend paid - - - - (2,909) (2,909)Carried interest allocation tominorityshareholders - - 4,856 - (4,856) -Translation into presentationcurrency - - - (3,372) - (3,372) _______________________________________________________ Balance as at 31 December 2006 1,454 125,556 5,546 (3,467) 42,472 171,561 ======================================================= Balance as at 1 January 2007 1,454 125,556 5,546 (3,467) 42,472 171,561Profit for the period - - - - 5,977 5,977Purchase of minority shareholders'interest - - (690) - - (690)Dividend Paid 8 - - - - (5,841) (5,841)Dividend Declared 8 - - - - (4,868) (4,868)Translation into presentationcurrency - - - (758) - (758)Issue of shares 6 839 99,761 - - - 100,600Costs of issue of shares 6 - (3,304) - - - (3,304) _______________________________________________________ Balance as at 30 June 2007 2,293 222,013 4,856 (4,225) 37,740 262,677 ======================================================= 30-Jun-07 30-Jun-06 31-Dec-06 UNAUDITED CONSOLIDATED BALANCE SHEETFor the six months ended 30 June 2007 GROUP Note £'000 £'000 £'000ASSETSNon current assetsInvestment property 371,148 227,459 368,692Goodwill 18,139 9,727 16,578Costs relating to future acquisitions 266 - 436Deferred income tax assets 937 734 964Other Investments 5 4,970 - -Loans receivable 5 1,685 - - ________________________________ 397,145 237,920 386,670 ________________________________ Current assetsTrade and other receivables 6,809 5,462 10,368Cash and cash equivalents 164,623 94,350 75,131Financial assets 4,814 2,035 2,666 ________________________________ 176,246 101,847 88,165 ________________________________ TOTAL ASSETS 573,391 339,767 474,835 ================================ EQUITYIssued Capital 6 2,293 1,454 1,454Share Premium 6 222,013 125,556 125,556Retained Earnings 37,740 19,135 42,472Translation reserve ( 4,225) 672 ( 3,467) ________________________________Total equity attributable to equity holders of the parent 257,821 146,817 166,015 ________________________________ Minority Interest 4,856 329 5,546 ________________________________ TOTAL EQUITY 262,677 147,146 171,561 ================================ LIABILITIESNon-current liabilitiesBank loans 213,529 159,726 189,535Deferred income tax liabilities 35,801 11,586 35,336 ________________________________ 249,330 171,312 224,871 ________________________________ Current liabilitiesTrade and other payables 11,290 17,097 11,838Bank loans 42,651 4,038 64,702Dividend Payable 4,868 - -Provisions 729 - 729Financial liabilities 1,846 174 1,134 ________________________________ 61,384 21,309 78,403 ________________________________ TOTAL LIABILITIES 310,714 192,621 303,274 ________________________________ TOTAL EQUITY AND LIABILITIES 573,391 339,767 474,835 ________________________________ UNAUDITED CONSOLIDATED CASH FLOW STATEMENT 30-Jun-07 30-Jun-06 31-Dec-06For the six months ended 30 June 2007 GROUP Note £'000 £'000 £'000Cash flows from operating activitiesCash generated from operations 7 12,678 1,282 2,940Income taxes paid (1,168) - (797) ________________________________ Net cash generated from operating activities 11,510 1,282 2,143 ________________________________ Cash flows from investing activitiesCapital expenditure on investment properties (2,259) (2,287) (34,486)Capital expenditure on incomplete acquisitions - - (436)Investment in unconsolidated entities (1,685) - -Loans advanced to unconsolidated entities (4,970) - -Interest received 2,273 2,598 4,593Acquisition of subsidiaries (1,094) (6,824) (70,937)Acquisition of minority interest in subsidiaries (987) - -Loans advanced to Subsidiaries before acquisition - (19,460) (22,476) ________________________________ Net cash used in investing activities (8,722) (25,973) (123,742) ________________________________ Cash flows from financing activitiesDividends Paid (5,841) (4,363) (7,272)New bank loans raised 28,668 - 86,045Proceeds on issue of shares, net of issuance costs 97,296 - -Interest paid (6,279) (1,505) (7,075)Repayments of borrowings (27,354) (1,766) - ________________________________ Net generated / (cash used in) from financing activities 86,490 (7,634) 71,698 ________________________________ Net increase / (decrease) in cash and cash equivalents 89,278 (32,325) (49,900)Cash and cash equivalents at the beginning of the period 75,131 126,145 126,145Exchange gains / (losses) on cash and cash equivalents 214 530 ( 1,114) ________________________________Cash and cash equivalents at the end of the period 164,623 94,350 75,131 ________________________________ Notes to the Unaudited Consolidated financial statements 1 General information Dawnay, Day Carpathian PLC (the "Company") is a company incorporated anddomiciled in the Isle of Man on the 2 June 2005 for the purpose of investing inthe retail property market in Central and Eastern Europe. The interim report of Dawnay, Day Carpathian PLC for the six months ended 30June 2007, comprises the Company and its subsidiaries (together referred to asthe "Group"). The Company's registered address is IOMA House, Hope Street, Douglas Isle ofMan. The Company was admitted to the AIM of the London Stock Exchange and commencedtrading its shares on 26 July 2005. The Company raised approximately £140m atlisting and a further £100m in May 2007 (before admission costs). The functional currency of the consolidated financial statements is the Euro asit is the currency of the primary economic environment in which the Groupoperates. The consolidated financial statements are presented in Pounds Sterling(presentation currency) for the convenience of readers. The translation betweenthe functional and presentation currency is in accordance with the Group'saccounting policies. 2 Significant accounting policies The interim report for the six months ended 30 June 2007 is unaudited and hasbeen prepared based on the accounting policies set out in the statutory accountsfor the year ended 31 December 2006. The Group's policy is to fair value investment properties annually at 31December, as a result no fair value adjustments have been recognised in theincome statement for the six months ended 30 June 2007. 3 Net financing income Net financing income 30-Jun-07 30-Jun-06 31-Dec-06 £'000 £'000 £'000GROUPInterest income from financial institutions 2,254 2,693 4,593Fair value adjustment of interest rate swaps 2,276 1,422 2,246Interest income from related party 358 - - ____________________________ Financial income 4,888 4,115 6,839 ____________________________ Gross interest expenses on bank borrowings (7,130) (1,761) (7,597)Unwinding of unrealised direct issue costs of borrowings (494) (174) (63) ____________________________ Financial expense (7,624) (1,935) (7,660) ____________________________ Net financing costs (2,736) 2,180 (821) ____________________________ 4 Earning per share Basic earning per share The calculation of basic earnings per share at 30 June 2007 was based on theprofit attributable to ordinary shareholders of £5,977,000 and a weightedaverage number of ordinary shares outstanding during the six month period ended30 June 2007 of 162,425,595, calculated as follows: 30-Jun-07 30-Jun-06 31-Dec-06GROUPProfit attributable to ordinary £'000 £'000 £'000shareholdersProfit for the period 5,977 4,558 36,022Minority interest - (99) (5,316) _________________________________ Profit attributable to ordinary shareholders 5,977 4,459 30,706 ================================= Weighted average number of ordinaryshares Shares in Issue at 31 December 2005 and 2006 145,430,015 145,430,015 145,430,015Effect of shares issued on 23 February 2007 420,994 - -Effect of shares issued on 18 May 2007 16,574,586 - - ___________________________________ Weighted average number of ordinary shares 162,425,595 145,430,015 145,430,015 =================================== Basic earnings per share 3.7p 3.1p 21.1p Diluted earning per share The calculation of diluted earnings per share at 30 June 2007 was based on theprofit attributed to ordinary shareholders of £5,977,000 and a weighted averagenumber of ordinary shares outstanding during the period ended 30 June 2007 of164,995,950 calculated as follows: Profit attributable to ordinary £'000 £'000 £'000shareholders (diluted) Profit for the period 5,977 4,558 36,022Minority interest - (99) (5,316) ________________________________Profit attributable to ordinary shareholders 5,977 4,459 30,706 ================================ Weighted average number of ordinaryshares Weighted average number of ordinary shares 162,425,595 145,430,015 145,430,015Effect of dilutive potential ordinary shares: Share options 2,570,355 1,989,605 1,085,853 ___________________________________Weighted average number of ordinary shares (diluted) 164,995,950 147,419,620 146,515,868 =================================== Diluted earnings per share 3.6p 3.0p 21.0p 5 Other Investments On 2 April 2007 the Group agreed to the purchase of a 55% interest in SIAPatollo, on the completion of the development of Galleria Patollo shoppingcentre in Riga, Latvia. Under the agreement, the Group is committed to makingstaged, conditional payments via debt and equity to partially fund the project.The eventual cost of the acquisition of the investment in SIA Patollo isdependent on the value of the shopping centre on completion of the development. As at 30 June 2007, the funding committed to the project, comprised of£4,970,000 paid for 17.7% of the share in SIA Patollo and a loan of £1,685,000to SIA Patollo bearing interest of 25% per annum. 6 Share capital and share premium AUTHORISED: Number of £'000 Ordinary Shares of 1 p each 30 June 2006 and 31 December 2006 200,000,000 2,00017 May 2007 - Increase of authorised share capital 150,000,000 1,500 ____________ _________ 30 June 2007 350,000,000 3,500 ____________ _________ On the 17th of May 2007 the authorised share capital of the Company wasincreased to £3,500,000 by the creation of 150,000,000 ordinary shares of 1peach ISSUED: Number of Shares Share Share Issued and Capital Premium Fully Paid £'000 £'000 Ordinary shares of 1p each _____________________________Balance at 30 June 2006 and 31 December 2006 145,430,015 1,454 125,556 _____________________________ 23 February 2007 - share option exercised 600,000 6 59418 May 2007 - issue for cash 83,333,334 833 99,16718 May 2007 - placing cost - - (3,304) _____________________________ Balance at 30 June 2007 229,363,349 2,293 222,013 _____________________________ On the 23 February 2007, Numis Securities Limited exercised a portion of theiroption, and purchased 600,000 ordinary shares at £1 per share. On the 18 May 2007, the Company issued 83,333,334 ordinary shares in relation toits public offering at £1.20 per share. The Company incurred costs of £3,304,000 relating to the issue of shares. These equity transaction costs werededucted from equity in accordance with IAS 32, Financial Instruments Disclosureand Presentation. 7 Notes to the Cash Flow Statement 30-Jun-07 30-Jun-06 31-Dec-06GROUPCash generated from operations £'000 £'000 £'000 Profit for the period 5,977 4,558 36,022Adjustments for:Increase in fair value of interest rate swaps (2,276) (1,624) (2,246)Increase in fair value of financial liabilities 841 - 1,147Unwinding of unrealised direct issue costs of borrowings 494 174 63Net other finance (income) / expense 4,518 (556) 3,004Increase in fair value of investment property - - (36,792)Income tax expense 1,183 618 10,739Unrealised foreign exchange (loss)/gain (1,186) - (1,388) _____________________________Operating cash flows before movements in working capital 9,551 3,170 10,549 _____________________________ Decrease/(Increase) in receivables 3,897 1,579 (3,091)Increase in payables (770) (3,467) (4,518) _____________________________ Cash generated from operations 12,678 1,282 2,940 _____________________________ 8 Dividends 30-Jun-07 31-Dec-06 £'000 £'000GROUPDividend paid in 2006 for the year - 2,909Dividend paid in 2007 for the year - 5,841Dividend declared for the year 4,868 - _____________________ 4,868 8,750 _____________________ An interim dividend of 3.33p per share for the year ended 31 December 2007 wasdeclared on the 24 April 2007 and will be paid on 28 September 2007 to ordinaryshareholders on the register at close of business on 4 May 2007. 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