AGP.L Regulatory News (AGP)

4 Sep 2006 18:30

Asian Growth Properties Limited04 September 2006 4 September 2006 Asian Growth Properties Limited (the "Company") Immediate Release Results for the period ended 30 June 2006 The Company announced today the Group's results for the period ended 30 June2006. Highlights - Total operating revenue of HK$7.4 million (up 26%). - Total profit before taxation of HK$5.0 million (up 4%). - Net profit of HK$4.4 million (up 12%). - Shareholders' equity as at 30 June 2006 of HK$1,575.2 million - Net asset value per share as at 30 June 2006 of HK$7.24 (51 pence per share). Miscellaneous The results for the period ended 30 June 2006 included in this announcement areextracted from the unaudited financial statements for the period ended 30 June2006 which were approved by the Directors on 4 September 2006. The 2006 Interim Report is expected to be posted to shareholders in September2006. For further information, please contact: Don Fletcher, Chief Executive Officer TEL: +852 2828 3263 Richard Gray TEL: +44 (0) 207 459 3600Andrew PottsPanmure Gordon & Co Abigail Singleton TEL: +44 (0) 207 429 6666Leesa PetersConduit PR leesa@conduitpr.com / abigail@conduitpr.com Attached: Chairman's ReviewChief Executive's ReviewCondensed Consolidated Income StatementCondensed Consolidated Balance SheetCondensed Consolidated Statement of Changes in EquityCondensed Consolidated Cash Flow StatementNotes to the Condensed Consolidated Financial Statements CHAIRMAN'S REVIEW I am pleased to report a pre-tax profit of HK$5.0 million for the period ended30 June 2006, an increase of 4% over the corresponding period. Net profit aftertax for the period was HK$4.4 million (2005: HK$3.9 million). During the period, the Group has continued the development of the Wanchai Roadand San Po Kong projects. The pre-sale of apartments for both these developmentprojects is targeted to commence within the coming months. Planning works forthe development of the Group's substantial development site at Sha Tin, NewTerritories continued to be progressed. The Group's developments are in progress. As such, the Group's revenues havebeen derived from rental, interest and investment income during the first sixmonths of 2006. The Group's stated intention is to invest in the property sectors within theGreater Asia region. The Group continues to seek further investmentopportunities principally in Hong Kong and China where the Group has acompetitive advantage by virtue of the experience of the Board and seniormanagement. The Group has significant cash reserves for this purpose. The Board does not propose the payment of an interim dividend for the periodended 30 June 2006 and will retain all earnings to finance future growth. The Board would like to take this opportunity to thank the executive andmanagement team for the execution of the Group's strategy and their on-goingsupport. David MathewsonNon-Executive ChairmanUnited Kingdom, 4 September 2006 CHIEF EXECUTIVE'S REVIEW FINANCIAL SUMMARY As at 30 June 2006, the Group has property assets of HK$1.618 billion and cashreserves of HK$598.3 million. The Group's development projects at Wanchai Roadand San Po Kong are partially funded by secured bank loans of HK$198 million andHK$386 million respectively. The Group's third development site at Sha Tin, NewTerritories is unencumbered. The Group's retail investment property at ExcelsiorPlaza is leased, and partially funded by a secured bank loan of HK$19.8 million. The Group has net assets of HK$1.575 billion, an increase of HK$4.4 million over31 December 2005, as a result of the net profit retained for the period. Netasset value per share as at 30 June 2006 is HK$7.24 (approximately 51 pence). THE AGP ASSETS The majority of the Group's property assets are located in Hong Kong, and are aslisted below: Wanchai Road, Wanchai In April 2006, the Group completed the purchase of an adjoining property at 2Morrison Hill Road for HK$77.2 million, which was financed by an increase in theexisting bank debt facility. Upon amalgamation of the two sites, the total grossfloor area of the development will increase to approximately 5,100 sq.m. andwill incorporate an additional four floors to the existing tower development. Foundation works have been completed and the superstructure works contract hasbeen awarded. The pre-sale campaign for the project, now known as "TheMorrison", is expected to commence in the fourth quarter of 2006. Thedevelopment is expected to be completed by the third quarter of 2007. San Po Kong, Kowloon The superstructure construction works commenced in April 2006. The developmentcomprises a 48-storey composite building consisting of 304 residential unitsabove a 7-level podium incorporating retail tenancies, a clubhouse and carparks. The Group is planning to launch the pre-sale campaign in early 2007 whenpre-sale consent has been obtained from the Government. Construction is expectedto be completed by the fourth quarter of 2007. Sha Tin, Fo Tan, New Territories Planning works for the development of the Sha Tin project continue. Severalmaster layout plans have been submitted to the Town Planning Board forconsideration. The property is currently leased as an industrial site atapproximately HK$13 million per annum. Excelsior Plaza Shop, Causeway Bay The retail sector in Hong Kong continues to prosper. A new two-year lease hasbeen concluded for the Shop at an annual rental approximately 22% above theprior lease rate. FINANCING AND TREASURY POLICIES The two development projects, Wanchai Road and San Po Kong, are partiallyfinanced by bank loans. These facilities provide sufficient funding to completethe two projects without any further equity requirements by the Group. The Group adheres to prudent treasury policies. As at 30 June 2006, all of theGroup's borrowings were raised through its wholly-owned subsidiaries. Currently,borrowings are principally based on floating rate terms. International Financial Reporting Standards ("IFRS") The Group has adopted IFRS and the accounts included in this report have beenprepared in accordance with IFRS. OUTLOOK The Group continues to focus on the two development projects in progress toensure that they are completed on time and in accordance with theirspecifications. Pre-sales campaigns for both developments are to be launched inthe coming months. The Board expects that the developments will be positivelyreceived by the market. The Board is intent on growing AGP and the Group will continue to seekinvestment opportunities within the Greater Asia region and at the present time,more specifically in Hong Kong and China, in order to enhance the overall netasset value of the Group. Don FletcherChief Executive Officer and Executive DirectorHong Kong, 4 September 2006 CONDENSED CONSOLIDATED INCOME STATEMENTFOR THE SIX MONTHS ENDED 30 JUNE 2006 Six months ended 30 June 2006 2005 HK$'000 HK$'000 (unaudited) (unaudited) NOTES Rental income from investment property 909 930Other rental income 6,480 4,920Bank interest income 11,557 638Staff cost (2,586) -Professional fees incurred in relationto AIM listing (6,080) -Other expenses (4,828) (1,444)Interest expense 5 (490) (256) --------- -------- --------- -------- Profit before taxation 6 4,962 4,788Income tax expense (548) (841) --------- -------- ========= ========Profit for the period 4,414 3,947 ========= ======== HK$ HK$Earnings per share - basic 8 0.02 197,350 ========= ======== CONDENSED CONSOLIDATED BALANCE SHEETAS AT 30 JUNE 2006 NOTES As at 30 June 2006 As at 31 December HK$'000 2005 (unaudited) HK$'000 (unaudited) Non-current AssetInvestment property 9 56,000 56,000 ---------- ---------- Current AssetsProperties under developmentheld for sale 10 1,561,702 1,440,725Debtors and deposits 11 4,729 2,764Bank balances and deposits 598,335 619,958 ---------- ---------- 2,164,766 2,063,447 ---------- ----------Current LiabilitiesCreditors, deposits receivedand accrued charges 12 11,335 9,137Income tax payable 1,296 989Bank borrowings - due withinone year 13 1,200 1,200 ---------- ---------- 13,831 11,326 ---------- ----------Net Current Assets 2,150,935 2,052,121 ---------- ---------- 2,206,935 2,108,121 ========== ==========Capital and ReservesShare Capital 14 84,429 84,429Share Premium 1,461,924 1,461,924Retainer profits 28,855 24,441 ---------- ---------- 1,575,208 1,570,794 ---------- ---------- Non-current LiabilitiesBank borrowings - due afterone year 13 602,600 508,200Deferred taxation 29,127 29,127 ---------- ---------- 631,727 537,327 ---------- ---------- 2,206,935 2,108,121 ========== ========== The financial statements were approved and authorised for issue by the Board ofDirectors on 4 September 2006 and are signed on its behalf by David Mathewson Don FletcherDIRECTOR DIRECTOR The accompanying notes form an integral part of these financial statements. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 30 JUNE 2006 SHARE CAPITAL SHARE PREMIUM RETAINED PROFITS TOTAL HK$'000 HK$'000 HK$'000 HK$'000At 1 January 2005 - - 10,029 10,029Profit for theperiod,representing totalrecognised incomefor the period - - 3,947 3,947 --------- --------- --------- --------- At 30 June 2005 - - 13,976 13,976 --------- --------- --------- --------- At 1 July 2005 - - 13,947 13,976Issues of shares 84,429 1,461,924 - 1,546,353Profit for theperiod,representing totalrecognised incomefor the period - - 10,465 10,465 --------- --------- --------- --------- At 31 December 2005 84,429 1,461,924 24,441 1,570,794 --------- --------- --------- --------- At 1 January 2006 84,429 1,461,924 24,441 1,570,794Profit for theperiod,representing totalrecognised incomefor the period - - 4,414 4,414 --------- --------- --------- --------- At 30 June 2006 84,429 1,461,924 28,855 1,575,208 ========= ========= ========= ========= CONDENSED CONSOLIDATED CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 30 JUNE 2006 Six months ended 30 June 2006 2005 HK$'000 HK$'000 (unaudited) (unaudited)NET CASH USED IN OPERATING ACTIVITIES (102,883) (5,902) --------- --------- FINANCING ACTIVITIESProceeds from bank loans 95,000 4,000Funds received from immediate holding company - 194,747Funds repaid to fellow subsidiaries - (15,051)Repayment of bank loans (600) (600)Interest paid (13,140) (5,512) --------- --------- NET CASH FROM FINANCING ACTIVITIES 81,260 177,584 NET (DECREASE) INCREASE IN CASH AND CASHEQUIVALENTS (21,623) 171,682 CASH AND CASH EQUIVALENTS AT BEGINNING OFPERIOD 619,958 38,655 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD 598,335 210,337Represented by bank balances and deposits ========= ========= Notes to the Condensed Consolidated Financial Statements 1. GENERAL The Company is a public limited company incorporated in the British VirginIslands. On 16 January 2006, the Company was listed on the AlternativeInvestment Market operated by London Stock Exchange plc. The Company is an investment holding company. The principal subsidiaries of theCompany are engaged in property investment and development. 2. BASIS OF PREPARATION The condensed consolidated financial statements have been prepared in accordancewith International Accounting Standard (IAS) 34 "Interim Financial Reporting". 3. PRINCIPAL ACCOUNTING POLICIES The condensed consolidated financial statements have been prepared on thehistorical cost basis except for investment property, which is measured at fairvalue. The accounting policies adopted are consistent with those followed in thepreparation of the Group's annual financial statements for the year ended 31December 2005. In the current interim period, the Group has applied, for the first time, anumber of new standards, amendments and interpretations issued by theInternational Accounting Standards Board and the International FinancialReporting Interpretations Committee, which are effective for accounting periodsbeginning on or after 1 December 2005 or 1 January 2006 respectively. The adoption of the new standards, amendments and interpretations has had nomaterial effect on how the results for the current or prior accounting periodsare prepared and presented. Accordingly, no prior period adjustment has beenrequired. The Group has not early applied the following new standard, amendment andinterpretations that have been issued but are not yet effective. The directorsof the Company anticipate that the application of these new standard, amendmentand interpretations will have no material impact on the results and financialpositions of the Group. IAS 1 (Amendment) Capital Disclosures 1IFRS 7 Financial Instruments: Disclosures 1IFRIC-Int 7 Applying the Restatement Approach Under IAS 29 Financial Reporting in Hyperinflationary Economies 2IFRIC-Int 8 Scope of IFRS 2 3IFRIC-Int 9 Reassessment of Embedded Derivatives 4IFRIC-Int 10 Interim Financial Reporting and Impairment 5 1 Effective for annual periods beginning on or after 1 January 20072 Effective for annual periods beginning on or after 1 March 20063 Effective for annual periods beginning on or after 1 May 20064 Effective for annual periods beginning on or after 1 June 20065 Effective for annual periods beginning on or after 1 November 2006 4. SEGMENT INFORMATION Business segments The Group is currently organised into two operating divisions - propertydevelopment and property investment. These divisions are the basis on which theGroup reports its primary segment information. Principal activities are:Property development - development of propertiesProperty investment - leasing of properties Revenue and results Six months ended 30 June 2006 Six months ended 30 June 2005 Property Property Total Property Property Total development investment development investment HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 Rentalincomefrominvestment - 909 909 - 930 930property -------- ------- ------- -------- ------- -------Segment - 909 909 - 930 930Revenue ======== ======= ======= ======== ======= ======= Other rentalincome 6,480 - 6,480 4,920 - 4,920 ======== ======= ======= ======== ======= ======= Segment 4,020 690 4,710 3,531 882 4,413Results Bankinterest 11,557 638income Professionalfeesincurredin relation (6,080) -toAIM listing Unallocatedcorporateexpense (4,735) (7) Interestexpense (490) (256) ------- -------Profitbefore 4,962 4,788taxation Income taxexpense (548) (841) ------- -------Profit forthe 4,414 3,947period ======= ======= Geographical segments The Group operates in Hong Kong only. 5. INTEREST EXPENSES Six months ended 30 June 2006 2005 HK$'000 HK$'000Interest on: 12,453 5,257 - Bank borrowings wholly repayable within 5 years - Bank borrowings not wholly repayable within 5 years 490 256 ---------- --------- 12,943 5,513Less: Amounts capitalised to properties underdevelopment held for sale (12,453) (5,257) ---------- --------- 490 256 ========== ========= Borrowing costs capitalised arose on borrowings specifically for the propertydevelopment projects. 6. INCOME TAX EXPENSE Hong Kong Profits Tax is calculated at 17.5% (30 June 2005: 17.5%) of theestimated assessable profit for the period. 7. DIVIDENDS No dividend was paid during the period. The directors do not recommend thepayment of an interim dividend. 8. EARNINGS PER SHARE The calculation of the basic earnings per share is based on the following data: Six months ended 30 June 2006 2005 HK$'000 HK$'000 Earnings for the purposes of basic earnings pershare 4,414 3,947 ========== ========= NUMBER OF SHARES Six months ended 30 June 2006 2005 Weighted average number of ordinary shares for thepurposes of basic earnings per share 217,693,995 20 ========== ========= For the six months ended 30 June 2005, the basic earnings per share iscalculated based on profit attributable to equity holders of the Company ofapproximately HK$3,947,000 and an aggregate of 20 shares in issue pursuant tothe share split on 2 November 2005 on the assumption that the issue of shares ofthe Company had been completed on 1 January 2005. 9. MOVEMENT IN INVESTMENT PROPERTY During the period, there was no movement in the Group's investment propertylocated in Hong Kong. Based on the advice of independent professional valuers, the directors believethat the fair market value of the investment property as at 30 June 2006 wasapproximately HK$56,000,000. 10. PROPERTIES UNDER DEVELOPMENT HELD FOR SALE All the Group's properties under development held for sale are carried at costand the amounts are expected to be recovered more than twelve months after thebalance sheet date. 11. DEBTORS AND DEPOSITS As at As at 30 June 31 December 2006 2005 HK$'000 HK$'000 Trade debtors 137 -Deposits 3,771 75Other debtors 821 2,689 ---------- --------- 4,729 2,764 ========== ========= 12. CREDITORS, DEPOSITS RECEIVED AND ACCRUED CHARGES As at As at 30 June 31 December 2006 2005 HK$'000 HK$'000 Trade creditors 7,883 5,901Deposits received 2,115 1,285Accrued charges 1,337 1,951 ---------- --------- 11,335 9,137 ========== ========= 13. BORROWINGS During the period, the Group repaid bank loans amounting to HK$600,000 andobtained new bank loans in the amount of HK$95,000,000. The new loans bearinterest at 0.55% over Hong Kong Interbank Offered Rate and are repayable on 26March 2008 or five months after the issuance of an occupation permit of theproperty at Wanchai Road project. The proceeds were used to finance theacquisition of the adjoining property at Wanchai Road project. 14. SHARE CAPITAL Number of shares Nominal Value US$'000Ordinary share of US$0.05 each: Authorised:At 31 December 2005 and 30 June 2006 500,000,000 25,000 =========== ========== Issued and fully paid:At 31 December 2005 and 30 June 2006 217,693,995 10,885 =========== ========== SHOWN IN THE CONDENSED FINANCIAL STATEMENTS AS Number of shares Nominal Value HK$'000 Issued and fully paid capital at 31December 2005 and 30 June 2006 217,693,995 84,429 =========== ========== All ordinary shares rank equally with one vote attached to each fully paidordinary share. 15. PLEDGE OF ASSETS At the reporting date, the Group had the following mortgages and/or pledges overits assets to secure banking facilities granted to the Group: (a) Fixed and floating charges on investment property with an aggregatecarrying amount of HK$56,000,000 (31 December 2005: HK$56,0000,000); (b) Fixed and floating charges on properties under development held for salewith an aggregate carrying amount of HK$973,116,000 (31 December 2005:HK$862,586,000); and (c) Unlisted shares of certain subsidiaries with assets principallycomprised of investment property and properties under development held for saleincluded in (a) and (b) above. 16. RELATED PARTY TRANSACTIONS a. Project management fees charged by an indirect subsidiary company of theintermediate holding company for provision of project management services forthe six months ended 30 June 2006 of HK$5,140,000 (30 June 2005: HK$107,000). b. The directors' fees and remuneration paid for the six months ended 30 June2006 were HK$548,000 and HK$2,029,000 respectively. No compensation of the keymanagement personnel expenses for the six months ended 30 June 2005 as eithersome of the directors had not been appointed or had not entered into the serviceagreement with the Company and an indirect subsidiary company of theintermediate holding company provided the project management services on behalfof the Company. This information is provided by RNS The company news service from the London Stock Exchange