30 Jun 2009 07:00
30 June 2009
CARECAPITAL GROUP PLC
("CareCapital" or "the Company")
Financial statements for the year to 31 December 2008
CareCapital plc (AIM: CARE), the healthcare real estate developer and owner, is pleased to announce its audited financial statements for the year to 31 December 2008.
Highlights
• Group rental income up 35% to £2.86 million (2007: £2.12 million).
• Portfolio value up 31% to £52.3 million (2007: £39.9 million).
• Rent reviews for the year have produced an average increase of 10.4%.
• Completion of two developments with a combined value of £8.9 million.
• Development programme in the UK and Germany with a value of £87 million.
Chairman's statement
I am pleased to present the 2008 financial results for CareCapital Group Plc and report on activities during the year and since my last year end statement published on 25 June 2008.
Good progress has been achieved during the period under review despite the prevailing economic conditions. In the UK, the 1,200m sq. dental/medical facility in Folkestone has been completed and the projects in Southampton and Coventry are being progressed with the objective of construction commencing in the late summer/early autumn this year. Additionally, the other projects in our development pipeline are being moved forward in line with their projected timetables in both the UK and Germany. In Germany, we have completed the 3,300m sq. development in Marktredwitz, Northern Bavaria, which is fully let and also commenced construction on a 3,600m sq. medical office building south east of Berlin; this pre-let facility is scheduled for completion in the early spring next year. Pre-letting is well advanced on a further development project in central Berlin.
At 31 December 2008 the value of our completed investment properties had increased to £52.3 million (2007: £39.9 million) and developments in progress to £3.5 million (2007: £3.1 million). We now have 103 tenants in 26 completed buildings generating £3.06 million (2007: £2.36 million) in rental income on an annualised basis.
Independent valuation reviews have been conducted in respect of both the UK and German property portfolios. Although the valuation of the German properties (representing 48.9% of the overall portfolio) was in line with previous valuations, the UK value was reduced by £2.03 million as a consequence of the then current market conditions. This adjustment, offset to an extent by uplifts in value on completed developments and increases in value resulting from rent reviews, has been charged against profit and is largely the reason for reporting a loss for 2008 of £1.69 million after tax (2007: £1.51 million profit).
The underlying strength in terms of tenant covenant and the requirement to expand services at the community level has meant that the perceived softening of capital yields in the medical office building sector has had a far lesser impact than the property market generally and this is reflected in our continuing ability to secure development funding and long term debt financing from our panel of banks on competitive terms and at relatively high loan to value ratios.
In order to maintain the momentum of our development programme we successfully completed two general financings for the Company during 2008; raising £3.9 million through the refinancing of a substantial part of the UK portfolio and a further £4 million by way of a short term mezzanine loan.
We are currently negotiating an additional financing which will ensure the fulfilment of our current developments and enable further expansion beyond that programme. It is anticipated this funding will be completed before the end of September.
The past twelve months have been a challenge in a number of ways for the Company not least as a result of the prevailing economic conditions. It is a reflection of the skills and experience of our staff that these challenges are overcome and the Company continues to make significant progress."
Dr. Michael Sinclair
Chairman
29 June 2009
Consolidated income statement
For the year ended 31 December 2008
| Group 2008 | Group 2007 | |
| £ | £ | |
| Continuing operations | ||
| Revenue | 2,856,110 | 2,115,026 |
| Cost of sales | (416,025) | (162,806) |
| Gross profit | 2,440,085 | 1,952,220 |
| Administrative expenses | (1,750,826) | (1,845,788) |
| Other operating income | - | 126,180 |
| Net (deficit)/surplus on revaluation of investment properties | (1,655,932) | 2,507,319 |
| Operating (loss)/profit | (966,673) | 2,739,931 |
| Finance income | 1,208,929 | 257,872 |
| Finance costs | (2,548,868) | (1,351,164) |
| Change in fair value of financial instruments | 92,256 | 7,239 |
| Net finance costs | (1,247,683) | (1,086,053) |
| (Loss)/profit before tax | (2,214,356) | 1,653,878 |
| Taxation | 524,195 | (144,290) |
| (Loss)/profit after taxation | (1,690,161) | 1,509,588 |
| Discontinued operations | ||
| Loss from discontinued operations | - | (27,965) |
| (Loss)/profit for the period | ||
| - attributable to equity shareholders | (1,688,027) | 1,353,187 |
| - attributable to minority interest | (2,134) | 128,436 |
| (1,690,161) | 1,481,623 | |
| (Loss)/earnings per ordinary share | ||
| Basic - total | (2.20)p | 1.76p |
| - continuing operations | (2.20)p | 1.76p |
| - discontinued operations | - | - |
| Diluted - total | (2.20)p | 1.72p |
| - continuing operations | (2.20)p | 1.72p |
| - discontinued operations | - | - |
| Weighted average number of shares (000') | 76,754 | 76,754 |
Consolidated balance sheet
As at 31 December 2008
| Group 2008 | Group 2007 | |
| £ | £ | |
| Non-current assets | ||
| Goodwill | 1,751,959 | 1,751,959 |
| Investment properties | 52,331,824 | 39,931,316 |
| Development properties | 3,512,716 | 3,086,413 |
| Leasehold improvements | 79,914 | 89,315 |
| Plant and equipment | 58,941 | 56,467 |
| 57,735,354 | 44,915,470 | |
| Current assets | ||
| Trade and other receivables | 465,181 | 546,145 |
| Cash and cash equivalents | 2,519,519 | 118,680 |
| 2,984,700 | 664,825 | |
| Total assets | 60,720,054 | 45,580,295 |
| Current liabilities | ||
| Trade and other payables | (1,940,940) | (790,472) |
| Borrowings, including finance leases | (4,438,452) | (2,393,676) |
| Derivative financial instruments | - | (92,256) |
| (6,379,392) | (3,276,404) | |
| Non-current liabilities | ||
| Borrowings, including finance leases | (38,327,667) | (24,745,982) |
| Deferred tax | (2,103,420) | (2,627,615) |
| (40,431,087) | (27,373,597) | |
| Total liabilities | (46,810,479) | (30,650,001) |
| Net assets | 13,909,575 | 14,930,294 |
| Equity | ||
| Share capital | 767,541 | 767,541 |
| Share premium account | 1,397,500 | 1,397,500 |
| Share option reserve | 390,606 | 209,332 |
| Reverse acquisition reserve | 11,038,204 | 11,038,204 |
| Exchange movements reserve | 443,404 | 4,053 |
| Profit and loss account | (303,469) | 1,384,558 |
| Equity attributable to shareholders of the Parent | 13,733,786 | 14,801,188 |
| Minority Interest | 175,789 | 129,106 |
| Total equity | 13,909,575 | 14,930,294 |
Consolidated cash flow statement
For the year ended 31 December 2008
| Group 2008 | Group 2007 | |
| £ | £ | |
| Cash flows from operating activities | ||
| (Loss)/profit after taxation | (1,690,161) | 1,481,623 |
| Adjustments: | ||
| Taxation | (524,195) | 144,290 |
| Change in fair value of financial instruments | (92,256) | (7,239) |
| Finance costs | 2,548,868 | 1,351,164 |
| Finance income | (1,208,929) | (257,872) |
| Unrealised net revaluation losses/(gains) on investment properties | 1,655,932 | (2,507,319) |
| Profit on sale of property | - | (126,180) |
| Depreciation | 38,460 | 33,709 |
| Write off of development costs incurred | 16,933 | 15,456 |
| Share based payments | 21,649 | 66,277 |
| Cash flows from operations before changes in working capital | 766,301 | 193,909 |
| Change in trade and other receivables | (13,770) | 13,325 |
| Change in trade and other payables | 808,538 | (281,429) |
| Cash generated/(used) from operations | 1,561,069 | (74,195) |
| Interest paid | (2,186,557) | (1,338,024) |
| Cash flows from operating activities | (625,488) | 1,412,219) |
| Cash flows from investing activities | ||
| Purchase of investment property | (520,845) | 7,349,714) |
| Sale of non-current asset held for sale | - | 1,626,180 |
| Capital expenditure on development properties | (8,461,421) | (2,596,953) |
| Purchase of leasehold improvements | (400) | (96,305) |
| Purchase of plant and equipment | (31,133) | (55,470) |
| Sale of plant and equipment | - | 440 |
| Interest received | 10,933 | 59,564 |
| Cash flows from investing activities | (9,002,866) | (8,412,258) |
| Cash flows from financing activities | ||
| New mortgage loans raised (net of transaction costs) | 22,868,788 | 6,519,028 |
| Repayment of loans | (12,588,154) | (403,651) |
| Repayment of finance leases | - | (8,041) |
| Repayment of loan on non-current asset held for sale | - | (468,539) |
| Directors' loan (net of costs) | 3,666,724 | - |
| Cash flows from financing activities | 13,947,358 | 5,638,797 |
| Increase/(decrease) in cash and cash equivalents | 4,319,004 | (4,185,680) |
| Cash and cash equivalents at 1 January | (1,863,747) | 2,321,933 |
| Cash and cash equivalents at 31 December | 2,455,257 | (1,863,747) |
Consolidated statement of changes in equity
For the year ended 31 December 2008
| Share capital £ | Share premium £ | Share options reserve £ | Reverse acquisition reserve £ | Exchange rate movement reserve £ | Profit and loss account £ | Equity share-holders' interest £ | Minority interest £ | Total £ | |
| Balance at 1 January 2007 | 767,541 | 1,397,500 | 143,055 | 11,038,204 | - | 31,371 | 13,377,671 | - | 13,377,671 |
| Exchange rate movement | - | - | - | - | 4,053 | - | 4,053 | 450 | 4,503 |
| Profit for the year | - | - | - | - | - | 1,353,187 | 1,353,187 | 128,436 | 1,481,623 |
| Total recognised income and expenditure | - | - | - | - | 4,053 | 1,353,187 | 1,357,240 | 128,886 | 1,486,126 |
| Share based payment | |||||||||
| - employee services* | - | - | 66,277 | - | - | - | 66,277 | - | 66,277 |
| Minority interest in subsidiary | - | - | - | - | - | - | - | 220 | 220 |
| Balance at 31 December 2007 | 767,541 | 1,397,500 | 209,332 | 11,038,204 | 4,053 | 1,384,558 | 14,801,188 | 129,106 | 14,930,294 |
| Balance at 1 January 2008 | 767,541 | 1,397,500 | 209,332 | 11,038,204 | 4,053 | 1,384,558 | 14,801,188 | 129,106 | 14,930,294 |
| Exchange rate movement | - | - | - | - | 439,351 | - | 439,351 | 48,817 | 488,168 |
| Loss for the year | - | - | - | - | - | (1,688,027) | (1,688,027) | (2,134) | (1,690,161) |
| Total recognised income and expenditure | - | - | - | - | 439,351 | (1,688,027) | (1,248,676) | 46,683 | (1,201,993) |
| Share based payment | |||||||||
| - employee services | - | - | 21,649 | - | - | - | 21,649 | - | 21,649 |
| - costs of raising finance | - | - | 159,625 | - | - | - | 159,625 | - | 159,625 |
| Balance at 31 December 2008 | 767,541 | 1,397,500 | 390,606 | 11,038,204 | 443,404 | (303,469) | 13,733,786 | 175,789 | 13,909,575 |
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of CareCapital Group Plc ("the Company") will be held at 54 Baker Street, London W1U 7BU on Wednesday, 29 July 2009 at 10.00 a.m. Details of the resolutions proposed are included in the Notice of the Annual General Meeting which will be posted to shareholders on 3 July 2009 and is available on the Company's web site at www.carecapital.co.uk
Financial Statements & Audit Opinion
The financial information included in this preliminary results announcement for the years ended 31 December 2008 and 31 December 2008 does not comprise statutory accounts within the meaning of section 240 of the Companies Act 1985. It represents an extract from the statutory accounts, which have not yet been delivered to the Registrar of Companies. Statutory accounts for the year ended 31 December 2008 were today approved by the Board of directors and delivered to the Registrar of Companies.
In forming their opinion, which was not qualified, the auditors have considered the adequacy of the disclosure made in accounting policy (a) to the financial statements concerning the Group's ability to continue as a going concern. The Group had net current liabilities of £3.4 million at 31 December 2008 and has commitments to develop new properties. As a result, the Group requires further funding to meet it debt repayment, development programme and working capital requirements. These conditions, along with the other matters explained in accounting policy (a) to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.
Publication of the Annual Report & Accounts
Copies of the Annual Report & Accounts have today been posted on the Company's web site at www.carecapital.co.uk. Printed copies of the financial statements will be posted to shareholders on 3 July 2009.
For further information please visit www.carecapital.co.uk or contact:
| Paul Stacey, Managing Director Steve Wilden, Finance Director | Simon Leathers | Simon Hudson, Paul Young |
| CareCapital Group Plc | Daniel Stewart & Co. Plc | Tavistock Communications |
| Tel: 020 7034 1949 | Tel: 020 7776 6566 | Tel: 020 7920 3150 |
| pstacey@carecapital.co.uk | simon.leathers@danielstewart.co.uk | shudson@tavistock.co.uk |
| swilden@carecapital.co.uk | pyoung@tavistock.co.uk |
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