Caledonian Tst. Regulatory News (CNN)

28 Mar 2007 13:30

Caledonian Trust PLC28 March 2007 For immediate release 28 March 2007 Caledonian Trust plc ("Caledonian Trust" or the "Group") Interim results for the six months ended 31 December 2006 CHAIRMAN'S STATEMENT The Group made a pre-tax loss of £399,000 in the six months to 31 December 2006compared with a profit of £155,125 for the same period last year. Losses pershare were 3.35p and NAV per share was 219.2p compared to earnings and NAVs of1.09p and 222.5p and 1.31p and 205.3p at 30 June 2006 and 31 December 2005respectively. There were no property sales in the six months to 31 December2006, but rental income increased by £92,000. Continuing investment indevelopment properties resulted in increases of £263,000 in net interest payableand most of the £69,000 increase in administration costs. An unchanged interimdividend of 1.0p will be paid. The Group's current major strategy continues to be the acquisition and creationof development opportunities, particularly those with a reasonable probabilityof achieving high returns and a small probability of a nil or, at worst, anegative return. Since June 2006 we have acquired four such developmentopportunities, three of which are rural properties. These acquisitions comprisea further four-acre development site near Dunbar; a two-acre site in Lochdon,Mull; a 1.5ha steading site in Fife, a few miles from St Andrews; and a farmnear Kinross comprising a farmhouse, 257 acres of land, mostly arable, and alarge steading with buildings extending to 27,580ft2. The Group now owns twelverural development opportunities, and has two further large rural propertiesunder offer. Several planning consents have been gained, others have been submitted and moreare being prepared. Near Dunbar our four-acre site gained permission for 24detached houses and four affordable houses. At Wallyford in August 2006, fiveyears after submission, we eventually gained consent for eight detached housesand at Brunstane, in east Edinburgh, we obtained an improved consent for tenhouses over 14,000ft2, including some "new build", in the charming Georgiansteading. At Ardpatrick, Argyll, we have obtained consents to convert and extenda bothy for residential use, to enlarge the gate lodge by 100% and to divide themansion house into four individual properties ranging from 1760ft2 to 3478ft2.Application has been made for four new or converted additional houses in oraround the walled garden. Sites for several other new houses in the ruraldevelopment area are under discussion. Planning applications have been made forten houses at Balnaguard, Perthshire and for a large steading development offifteen houses at Ardonachie near Bankfoot, Perthshire. Other applications willbe made this year. Our joint development of 39 small detached and semi-detachedhouses at Herne Bay continues successfully with only three houses remainingunsold. There are few changes to our investment portfolio. The leases of our twoproperties in Young Street, Edinburgh adjacent to Charlotte Square, determinedon 28 August 2006. 17 Young Street, the smaller of the two properties, togetherwith its two garages has been re-let to the former tenants at a slightlyenhanced rent. We have re-let the garages associated with 19 Young Street and,after agreeing a satisfactory dilapidations settlement, have marketed theproperty for sale un-refurbished. Planning permission has been obtained toreconvert the ground and 1st floor of 61 North Castle Street to residential useand warrant should be obtained to incorporate the Edwardian extension at therear of 61 North Castle Street into the existing office space in Hill Street. UK economic prospects appear propitious. GDP growth in 2006 increased to 2.6%from 1.9% in 2005 and is forecast to be 2.7% in 2007 by the Economist Poll ofForecasters and between 2.5% and 3.0% in 2008 according to the Budget Statement.The major domestic risk to the economy is of long-term inflationary trendsresulting in further increases in interest rates and the consequent damagingeffects on house prices and on consumption. Fortunately the CPI has fallen froma high of 3.0%, the upper prescribed limit, but the RPI, often used in wagecomparisons, has risen to 4.6%. Most commentators expect the CPI to fall rapidlywithin the next two months, and to only 1.6% by 2008, as the rise in energycosts that occurred last year drops out of the comparison and as gas pricesfall. However it is the MPC's projection of future inflation that determinespolicy: 3 month LIBOR rates indicate, and the Royal Bank of Scotland predict, afurther 0.25% point increase before interest rates fall back. The recent increases in interest rates do not appear to have significantlyaffected house prices. The FT House Price Index has risen 6.9% in the year toJanuary 2007, a monthly change of 0.7%, broadly similar to the second half of2006 but up from 3.7% in January 2006. The Nationwide and Halifax report risesof 9.3% and 9.6% respectively. The Lloyds TSB Scotland Price Index rose by 11.0%in 2006 following increases of 13.3% in 2005 and 18.8% in 2004. Lloyds say"increases continue at a robust pace propelled by a favourable economicbackground and demand for houses exceeding supply". Given the favourableeconomic outlook, including stable interest rates, the housing market continuesto be attractive, especially in Scotland. I reported last year that the Group prospects for profit and for asset growthcontinue to be asymmetrical: rental income is less than administrative expensesand net interest payable, and profits are determined by relatively volatileasset sales. The Group reported no property sales in the last six months butduring the balance of the current year asset and development sales, togetherwith other income, should be sufficient to fund the ongoing investment indevelopment properties. Larger more profitable projects should commence nextyear which will materially improve the Group's profitability as they mature andthe Group now has a "production line" of developments which should help maintainfuture profitability. Alternatively, the Group has the option to realisedevelopment sites, many of which are carried as stock at values far below marketvalue. Almost all our development properties are unencumbered and will provideexcellent collateral for any development. In addition to building our physicalassets the Group has established excellent relationships with its professionaladvisors who form a cohesive team in evaluating and promoting the Group'sdevelopment interests. John Little and Bryan Rankin retired as non-executivedirectors at the AGM and I would like to thank them for their significantcontribution to the Group. I welcome Roddy Pearson, a wise and experiencedsurveyor who has advised the Group formally and informally over many years tothe Board. Roddy joins us as a non-executive director as we start to exploit themany development opportunities now available. I D LoweChairman 28 March 2007 For further information please contact: Douglas Lowe, Chairman and Chief Executive Officer Tel: 0131 220 0416 Mike Baynham, Finance Director Tel: 0131 220 0416 Alasdair Robinson, Noble & Company Limited Tel: 0131 225 9677 Unaudited Consolidated Profit & Loss Account for the six months to 31 December 2006 6 Months to 6 Months Year to 31 Dec to 31 Dec 30 June 2006 2005 2006 (unaudited) (unaudited) (audited) £000 £'000 £'000INCOME-continuing operationsRental Income 477 385 871Trading property sales - - 410Other trading sales 31 61 108 508 446 1389 OPERATING COSTSCost of trading property sales - - (305)Cost of other sales (45) (61) (113)Administrative Expenses (578) (509) (993) (623) (570) (1411) OPERATING PROFIT/(LOSS) (115) (124) (22)Profit on disposal of investment property - 300 190Profit on disposal of investment - - -Interest receivable 37 125 275Interest payable (321) (146) (319) PROFIT/LOSS ON ORDINARY ACTIVITIESBEFORE TAXATION (399) 155 124Taxation - - 5 PROFIT/LOSS ON ORDINARY ACTIVITIESAFTER TAXATION (399) 155 129 Earnings per ordinary share (3.35p) 1.31p 1.09p Diluted earnings per ordinary share (3.35p) 1.31p 1.09p Unaudited Consolidated Balance Sheet as at 31 December 2006 As at 31 As at 31 As at 30 Dec 2006 Dec 2005 June 2006 (unaudited ) (unaudited) (audited) £'000 £'000 £'000Fixed assetsInvestment Properties 24,057 24,487 24,031Investments 43 - 43Equipment & vehicles 27 4 21 24,127 24,491 24,095Current assetsStock of development property 8,965 - 7,034Debtors 756 1,044 968Cash at bank and in hand 1,316 3,579 2,204 11,037 4,623 10,206Creditors: Amounts falling due withinone year (2,119) (3,594) (2,177) Net current assets 8,918 1,029 8,029 Total assets less current liabilities 33,045 25,520 32,124 Creditors: Amounts falling due aftermore than one year (7,000) (1,006) (5,680) Net assets 26,045 24,514 26,444 Capital and reservesCalled up share capital 2,377 2,377 2,377Share premium account 2,745 2,745 2,745Capital redemption reserve 175 175 175Revaluation reserve 6,625 4,551 6,625Profit and loss account 14,123 14,666 14,522 Shareholders' funds equity 26,045 24,514 26,444 Unaudited Consolidated Cash Flow Statement for the six months to 31 December 2006 6 Months to 6 Months to Year to 31 Dec 2006 31 Dec 2005 30 June 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000Net cash inflow/(outflow) fromoperating activities (1,854) 218 (5,695)Returns on investments andservicing of finance (337) (34) (35)Equity dividends paid - (178) (297)Capital expenditure and financialinvestment (31) (1,142) 6Tax paid - - (29) Cash inflow/(outflow) before managementof liquid resources and financing (2,222) (1,136) (6,050) Financing 1,334 (42) 3,572 Decrease in cash in period (888) (1,178) (2,478) Reconciliation of net cash flow tomovement in net funds Decrease in cash in the period (888) (1,178) (2,478) Cash (outflow)/inflow frommovement in debt (1,334) (42) (3,572) Movement in net funds in the period (2,222) (1,220) (6,050) Net (debt)/funds at the start of the period (5,172) 878 878 Net (debt)/funds at the end of the period (7,394) (342) (5,172) Notes to the unaudited consolidated cash flow statement (a)Reconciliation of operating profit to net cash flow from operating activities 6 Months to 6 Months to Year to 31 Dec 2006 31 Dec 2005 30 June 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000Operating (loss)/profit (115) (124) (22)Depreciation - - 5(Increase)/decrease in debtors 212 (25) 50Increase/(decrease) in creditors (21) 367 97(Increase)/decrease in stock (1,930) - (5,825) Net cash inflow/(outflow) fromoperating activities (1,854) 218 (5,695) (b)Analysis of cash flows Returns on investment andServicing of FinanceInterest received 37 125 275Interest paid (374) (159) (310) (337) (34) (35) Capital expenditure andfinancial investmentPurchase of tangible fixed assets (5) (1) (866)Purchase of investment property (26) (2,070) 915Sale of investment property - 929 -Purchase of investments - - (43) (31) (1,142) 6 FinancingDebt due within one yearIncrease/(decrease) in short term debt (14) (338) (3,969)Debt due beyond one yearIncrease(Decrease) in long-term debt (1,320) 296 397 1,334 (42) (3,572) Unaudited Statement of Total Recognised Gains and Losses for the six months to 31 December 2006 6 Months to 6 Months to Year to 31 Dec 2006 31 Dec 2005 30 June 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000Profit/(Loss) for period (399) 155 129Unrealised surplus on revaluationof properties - - 1,979Prior year adjustment - - 178Total gains and losses recognisedrelating to the period (399) 155 2,286 Notes 1 The figures for the six months to 31 December 2006 and 31 December 2005 do not constitute the company's statutory accounts within the meaning of Section 240 of the Companies Act 1985 (as amended) and are unaudited. The figures for the year to 30 June 2006 do not constitute full accounts. The audited accounts for that year were unqualified and have been delivered to the Registrar of Companies. 2 The interim statement has been prepared in accordance with the accounting policies set out in the group's statutory accounts for the year ended 30 June 2006. 3 The calculation of earnings per ordinary share is based on thereported loss for the six months to 31 December 2006 and on the weighted averagenumber of ordinary shares in issue in the period, being 11,882,923. 4 An interim dividend of 1p per share will be paid on 4 May 2007 toshareholders on the register on 10 April 2007. 5 Copies of the Interim Results for the six months to 31 December 2006 will be posted to shareholders shortly and will be available, free of charge, from the company's Nominated Adviser, Noble & Company Limited, 76 George Street, Edinburgh, EH2 3BU, for a period of one month from the date thereof. 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