Cardiff Property Regulatory News (CDFF)

THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY

AND ITS SUBSIDIARIES

LEI: 213800GE3FA4C52C1N05

THE CARDIFF PROPERTY PLC

(The Group, including Campmoss, specialises in property investment and development in the Thames Valley. The total portfolio including the jointly controlled Campmoss investment and development portfolio, valued in excess of £22m, is primarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire.)

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2022

Richard Wollenberg, Chairman, commented:

"During the financial year under review the Thames Valley property market saw a marked upturn in activity with new lettings and investment sales reaching pre-pandemic levels. The last few months have however, seen a downturn in confidence following rising inflation worries and increases in interest rates and building costs.

In the current economic climate, the property market will be sensitive to economic and fiscal projections. Whilst the Thames Valley has historically remained resilient compared to the general market, the impact of current uncertainties cannot be underestimated."

For further information:

THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY

AND ITS SUBSIDIARIES

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2022

Chairman's Statement

Dear Shareholder,

During the financial year under review the Thames Valley property market saw a marked upturn in activity with new lettings and investment sales reaching pre-pandemic levels. The last few months have however, seen a downturn in confidence following rising inflation worries and increases in interest rates and building costs.

In the current economic climate, the property market will be sensitive to economic and fiscal projections. Whilst the Thames Valley has historically remained resilient compared to the general market, the impact of current uncertainties cannot be underestimated.

The Group, including Campmoss Property Company Limited "Campmoss" our 47.62% joint venture, completed a number of new lettings and agreed rent increases as a result of rent reviews.

Office rental levels remained firm over the year with lease terms on new leases being agreed for periods of between 5-10 years. A number of our leases include increases in rent and service charges linked to the Retail Price Index.

The majority of our retail tenants in Bracknell and Egham remained open during the pandemic and during the year new and existing lettings achieved marginal increases.

The Thames Valley residential market remained firm as evidenced by the successful sale of all apartments at Britannia Wharf, Surrey. Residential rental levels have also benefitted from increased demand over the year.

The Company's business units at Maidenhead, which offer ground floor industrial use with first floor offices, achieved small rental increases as leases expired or rents were reviewed. Business and warehouse space in the Thames Valley remained in demand although it should be remembered that the trend of working from home continues to place a strain on the office rental market.

Business units at the Windsor Business Centre, Windsor are let on a short-term basis whilst detailed plans are being prepared for submission.

Following the grant of planning for Affordable Housing, the Company's freehold property at Cowbridge Road, Cardiff, was sold to a local Housing Association in excess of book value.

At Burnham and Maidenhead, commercial property owned by Campmoss is let on a short-term basis whilst development proposals are discussed with the Local Authority.

FINANCIAL

For the year to 30 September 2022, the Group profit before tax was £2.70m (2021: £1.26m). This figure includes an investment property value increase of £0.30m (2021: £0.53m) for the Group and an after tax profit of £0.87m (2021: £0.07m) from our share in Campmoss and its subsidiary. The major contribution to the increase in Campmoss profit resulted from the sale of all apartments at the recently completed residential development at Britannia Wharf, Woking. The Company also received a dividend of £3.0m (2021: £0.50m) from its investment in Campmoss.

Revenue for the year, which represented gross rental income, excluding Campmoss, totalled £0.70m (2021: £0.60m). The sale of property in Cowbridge Road, Cardiff realised £1.02m.

The profit after tax attributable to shareholders for the financial year was £2.41m (2021: £1.08m) and the earnings per share was 218.23p (2021: 91.91p).

At the year-end, the Company's commercial portfolio was valued by Kempton Carr Croft at a total of £5.97m (2021: £5.92m) this valuation excludes the Company's freehold office property which was also valued by Kempton Carr Croft and is included in the balance sheet at valuation classified as property, plant and equipment.

The increase in the value of the commercial portfolio results from the increase in valuation less the carrying value of our investment property at Cowbridge Road, Cardiff, as mentioned earlier.

Property when completed and retained for re-sale is held as stock at the lower of cost or net realisable value. At the year-end this related to commercial property at The Windsor Business Centre owned by First Choice Estates plc, the Company's wholly owned subsidiary.

The Group's total property portfolio, including the jointly controlled Campmoss Group, was valued at £22.3m (2021: £34.8m). The majority of the reduction in value relates to the sale of Britannia Wharf, Woking by Campmoss.

The Company's share of the net assets of Campmoss Group, after receipt of the £3.0m dividend from Campmoss group, was £13.76m (2021: £15.9m).

The Group's total net assets as at the year-end were £29.81m (2021: £28.44m) equivalent to £27.56 per share (2021: £25.49) an increase of 8.1% over the year (2021: 4.7%). The Group, including Campmoss, has adequate financial facilities and resources to complete works in progress as well as the envisaged development programme. Cash balances are held on instant access or short-term deposit. At the year-end, the Company had nil gearing (2021: nil). During the year the Company purchased and cancelled 34,199 (2021: 78,525) ordinary shares at a total cost of £0.79m (2021: £1.49m).

The Company may hold in treasury any of its own shares purchased. This gives the Company the ability to reissue treasury shares and provides greater flexibility in the management of its capital base. At the year end the Company held nil (2021 : nil) shares in treasury. Any shares purchased by the Company not held in treasury will be cancelled and the number of shares in issue reduced accordingly.

The Company proposes to continue its policy of purchasing its own shares, whether to be held in treasury or to be cancelled, and a resolution renewing the directors' authority will be placed before the forthcoming Annual General Meeting to be held on 19 January 2023. This authority will only be exercised in circumstances where the directors regard such purchases to be in the best interests of shareholders as a whole. Full details are available on the Company's website www.cardiff-property.com.

Current IFRS accounting requires that deferred tax is recognised on the difference between, the cost of properties, including applicable indexation and quoted investments and their current market value. However, IFRS accounting does not require the same treatment in respect of the Group's unquoted investment in Campmoss, our 47.62% owned joint venture, which represents a substantial part of the Company's net assets. Whilst provision is made in Campmoss accounts for deferred tax, should the shares held in Campmoss be disposed of, for indicative purposes, based on the value in the Company's balance sheet at the year-end this would result in a tax liability of £3.44m (2021 : £3.9m) equivalent to £3.18 (2021: £3.56) per share calculated using a tax rate of 25% (2021: 25%). This information is provided to shareholders as an additional non-statutory disclosure.

DIVIDEND

The Directors recommend a final dividend of 15.0p per share (2021: 13.5p) making a total dividend for the year of 20.5p (2021: 18.5p), an increase of 10.8%. The final dividend will be paid on 3 February 2023 to shareholders on the register at 20 January 2023.

THE PROPERTY PORTFOLIO

The Group including Campmoss continues to concentrate its property activities in the Thames Valley, to the west of London, close to Heathrow Airport and in Surrey, Berkshire and Buckinghamshire.

During the year the Company completed lettings at Egham and Maidenhead whilst progressing development plans at Windsor.

Campmoss achieved new lettings at Burnham and Bracknell whilst planning applications are being prepared in respect of The Priory, Burnham and Highway House, Maidenhead.

Close liaison with our tenants remains a priority and continuing arrangements allowing some of our retail tenants to pay rental monthly rather than quarterly will remain in place. Most of the rental invoiced over the last two quarters has been received.

The Group (including Campmoss) total property portfolio contains: 43% retail sector, 8% business units, 14% residential and 35% offices (by value). 

A number of property acquisitions in the Thames Valley were considered but not progressed as asking prices were considered to be unviable.

QUOTED INVESTMENTS

The Company retains a small portfolio of quoted short-term retail bonds and equity investments, with the former providing an attractive income stream. The value of the portfolio marginally decreased over the year primarily due to a number of bond holdings approaching their maturity date and increases in interest rates.

The equity investments include Aquila Services Group plc (the largest UK based affordable housing consultancy group) and Galileo Resources plc (a mining exploration company). I remain a Non-Executive Director of both.

RELATIONSHIP AGREEMENT

The Company has entered into a written and legally binding relationship agreement with myself, its controlling shareholder, to address the requirements of LR9.2.2AD of the Listing Rules.

MANAGEMENT AND TEAM

In a challenging environment the Group's continued success is dependent upon our small management team and our joint venture partner. I therefore wish to take this opportunity to thank them all for their support and achievements over the year.

OUTLOOK

Political and economic uncertainty together with rising inflation and increased interest rates will inevitably affect the property market. In the short-term activity in the property market will be limited as companies will not commit to investment decisions until clarity can be given. The fall in the value of the pound against other currencies will certainly attract some overseas investors but current uncertainties will limit their interest.

The next few months will prove challenging with events in the UK economy eagerly watched by investors.

I look forward to reporting to you further at the half year.

J. Richard Wollenberg

Chairman

22 November 2022

Consolidated Income Statement

FOR THE YEAR ENDED 30 SEPTEMBER 2022

These results relate entirely to continuing operations.

Consolidated statement of comprehensive income and expense

FOR THE YEAR ENDED 30 SEPTEMBER 2022

Consolidated Balance Sheet

AT 30 SEPTEMBER 2022

Consolidated Cash Flow Statement

FOR THE YEAR ENDED 30 SEPTEMBER 2022

Consolidated statement of changes in equity FOR THE YEAR ENDED 30 SEPTEMBER 2022

* - Includes fair value movements on investment properties held by Campmoss Group, our Joint Venture, which are presented in investment property fair value reserve to demonstrate these are unrealised. 

Notes to the Financial Statements

FOR THE YEAR ENDED 30 SEPTEMBER 2022

The consolidated results for the year ended 30 September 2022 and 2021 are prepared in accordance with UK-adopted international accounting standards ("UK-adopted IAS") and those parts of the Companies Act 2006 applicable to companies reporting under IFRS and have been incorporated into the principal accounting policies.

The financial information set out above does not constitute the company's statutory financial statements for the years ended 30 September 2022 or 30 September 2021 but is derived from those financial statements. Statutory financial statements for 2021 have been delivered to the Registrar of Companies and those for 2022 will be delivered in due course. The auditor has reported on those financial statements; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the financial statements for 2022 nor 2021.

Going concern

The financial statements have been prepared on a going concern basis, which assumes that the Group will continue to meet its liabilities as they fall due. The Group's activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Statement and Strategic Report. The financial position of the Group, its property portfolio under management, asset base, liquidity and key performance indicators.

The Group has sufficient financial resources to enable it to continue to trade and to complete the current maintenance and development programme. The Group is ungeared, and the cash flow forecasts do not assume any debt being required. Therefore, the Directors believe that the Group is well placed to manage its business risks successfully despite the current economic uncertainty.

The Group is in the enviable position of having significant cash balances at 30 September 2022, the Cardiff Group had cash balances of £4.9m and a further £4.0m term deposits (with maturity dates of 95 days), in addition the Company has investments of £0.9m of which £0.8m are readily marketable. The Group has an operating cost base including tax and dividends of under £1m per annum so even with no income for several years the Group would remain solvent. 

Notes to the Financial Statements

FOR THE YEAR ENDED 30 SEPTEMBER 2022 (continued)

The Cardiff Group receives a management fee from Campmoss of around £0.5m per annum, there is no reason to assume this income would not be received as the Campmoss Group had cash balances at 30 September 2022, of £6.6m and a further £9.6m term deposits (with maturity dates of 95 days). Campmoss have an annual operating cost base excluding development but including the Cardiff management fee of under £1.5m, so Campmoss Group similarly has a strong balance sheet.

New, revised or changes to existing financial reporting standards

Subject to the adoption of the IFRS's available for application noted below, this announcement is prepared on the basis of the accounting policies as set out in the most recently published set of annual financial statements.

IFRS

A number of new standards and amendments to standards and interpretations have been issued but are not yet effective for the current accounting period. None are expected to have a material impact on the consolidated financial statements of the Group.

2. Segmental analysis

The Group manages its operations in two segments, being property and other investment and property development. Property and other investment relates to the results for The Cardiff Property Company Limited where properties are held as investment property with Property Development relating to the results of First Choice Estates Plc and Thames Valley Retirement Homes Limited. The results of these segments are regularly reviewed by the Board as a basis for the allocation of resources, in conjunction with individual site investment appraisals, and to assess their performance. Information regarding the results and net operating assets for each reportable segment are set out below:

Notes to the Financial Statements

FOR THE YEAR ENDED 30 SEPTEMBER 2022 (continued)

 "Eliminations" relate to inter segment transactions and balances which cannot be specifically allocated but are eliminated on consolidation.

3. Earnings per share

Earnings per share has been calculated in accordance with IAS 33 - Earnings Per Share using the profit after tax for the financial year of £2,406,000 (2021 : £1,078,000) and the weighted average number of shares as follows:

There is no difference between basic and diluted shares as the Company has no potentially dilutive instruments in issue.

Financial Calendar

23 November 2022 Results announced for the year ended 30 September 2022

19 January 2023 Annual General Meeting/General Meeting

19 January 2023 Ex-dividend date for the final dividend

20 January 2023 Record date for the final dividend

3 February 2023 Final dividend to be paid

May 2023 Interim results for 2023 to be announced

30 September 2023 Year end

Directors and Advisers