26 Nov 2008 11:59
26 November 2008-----------------------------------------------------------------------------------------------
DAEJAN HOLDINGS PLC
INTERIM RESULTS ANNOUNCEMENT for the half year ended 30 September 2008
The Board is pleased to present the Interim Statement for the half year ended 30 September 2008.
| 30/9/08 | 30/9/07 | ||
| £000 | £000 | ||
| Profit before Investment Property Valuation Movements (Loss)/Profit before tax | 16,216 (118,814) | 16,117 16,117 | |
| (Loss)/Profit after tax | (86,021) | 28,707 | |
Profit from the underlying business of the Group has been maintained at a similar level to the previous year.
In view of the current unusual economic conditions and the significant downturn in property values the half year accounts include for the first time a Directors' valuation of investment properties. After consulting the Group's valuers the Directors' have estimated that property values have declined by some £135 million; equivalent to a reduction of 10.7% since the last valuation. An independent professional valuation of all properties will be undertaken as at 31st March 2009.
An interim dividend of 25p per share will be paid on 6 March to shareholders on the register on 6 February 2009.
There have been no significant property sales in the period; profits on disposal relate mainly to lease extensions.
The refurbishment of 164 Shaftesbury Avenue was completed during March 2008 and progress on letting has been satisfactory.
Refurbishment projects at Worship Street in the City of London and Great Marlborough Street in the West End are scheduled to be completed early in January and June 2009 respectively.
During the period contracts for the freehold purchase and leaseback of nine care homes from Southern Cross Healthcare Group Plc were successfully concluded for £31.1 million resulting in net rental income of £2.5 million per annum subject to review.
There have been no material changes in overall vacancy and rental levels within the portfolio since March 2008 and total rental income has continued in line with expectations.
The principal risk factor affecting the remainder of the financial year continues to be exposure to movements in the valuation of the Group's investment properties. With the UK and US economies moving into broadly based recessions, it is difficult to foresee any overall valuation movements for the immediate future.
We remain alert for well priced buying opportunities generated by the downturn.
The turmoil in financial markets and the slowdown in general economic activity are combining to create the most testing commercial environment that has been seen for many years. However, our financial position and our prudent business approach mean that we are well placed to deal with the challenges ahead.
B S E Freshwater
Chairman
26 November 2008
For further information please contact:
| Mark Jenner | Terry Garrett |
| Company Secretary | Weber Shandwick Financial |
| Daejan Holdings PLC | |
| Tel: 020 7836 1555 | Tel: 020 7067 0700 |
| Consolidated Income Statement for the six months ended 30 September 2008 | |||||||||||||
| Unaudited | Unaudited | Audited | |||||||||||
| 6 Months | 6 Months | Year | |||||||||||
| Ended | Ended | ended | |||||||||||
| 30/9/08 | 30/9/07 | 31/3/08 | |||||||||||
| £000 | £000 | £000 | |||||||||||
| Total Rental & Related Income | 43,352 | 42,670 | 86,952 | ||||||||||
| Property Operating Expenses | (25,213) | (22,951) | (46,464) | ||||||||||
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| Net Rental & Related Income | 18,139 | 19,719 | 40,488 | ||||||||||
| Profit on Disposal of Investment Properties | 3,684 | 3,335 | 6,578 | ||||||||||
| Administrative Expenses | (4,792) | (4,596) | (8,629) | ||||||||||
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| Operating Profit before Net Financing Costs | 17,031 | 18,458 | 38,437 | ||||||||||
| Fair Value Gains/(Losses) on Financial Instruments and current investments | 2,762 | 601 | (6,496) | ||||||||||
| Financial Income | 1,063 | 1,053 | 2,287 | ||||||||||
| Financial Expenses | (4,640) | (3,995) | (7,825) | ||||||||||
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| Net Financing Costs | (815) | (2,341) | (12,034) | ||||||||||
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| Profit Before Investment Property Valuation Movements | 16,216 | 16,117 | 26,403 | ||||||||||
| Valuation Gains on Investment Properties | - | - | 46,646 | ||||||||||
| Valuation Losses on Investments Properties | (135,030) | - | (25,982) | ||||||||||
| Net Valuation (Losses)/Gains on Investment Properties | (135,030) | - | 20,664 | ||||||||||
| (Loss)/Profit Before Taxation | (118,814) | 16,117 | 47,067 | ||||||||||
| Income Tax Credit | 32,793 | 12,590 | 7,040 | ||||||||||
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| (Loss)/Profit for the Period | (86,021) | 28,707 | 54,107 | ||||||||||
| Attributable to : | |||||||||||||
| Equity holders of the parent | (86,019) | 28,665 | 54,064 | ||||||||||
| Minority Interest | (2) | 42 | 43 | ||||||||||
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| (Loss)/Profit for the Period | (86,021) | 28,707 | 54,107 | ||||||||||
| Basic Diluted(Loss)/Earnings per Share | (527.9) | p | 175.9 | p | 331.8 | p | |||||||
| Consolidated Interim Statement of Recognised Income & Expense for the six months ended 30 September 2008 | ||||||||||
| Unaudited | Unaudited | Audited | ||||||||
| 6 Months | 6 Months | Year | ||||||||
| ended | ended | ended | ||||||||
| 30/9/08 | 30/9/07 | 31/3/08 | ||||||||
| £000 | £000 | £000 | ||||||||
| Foreign Exchange Gains/( Losses) | 14,039 | (4,671) | (1,606) | |||||||
| Income & Expense Recognised Directly in Equity | 14,039 | (4,671) | (1,606) | |||||||
| (Loss)/Profit for the Period | (86,021) | 28,707 | 54,107 | |||||||
| Total Recognised Income & Expense for the Period | (71,982) | 24,036 | 52,501 | |||||||
| Attributable to : | ||||||||||
| Equity Holders of the Parent | (71,980) | 23,994 | 52,458 | |||||||
| Minority Interest | (2) | 42 | 43 | |||||||
| Total Recognised Income & Expense for the Period | (71,982) | 24,036 | 52,501 | |||||||
| Consolidated Balance Sheet as at 30 September 2008 | |||||||||||
| Unaudited | Unaudited | Audited | |||||||||
| 30/9/08 | 30/9/07 | 31/3/08 | |||||||||
| £000 | £000 | £000 | |||||||||
| Assets | |||||||||||
| Investment Properties & Other Investments | 1,184,023 | 1,230,834 | 1,258,940 | ||||||||
| Deferred Tax Assets | 2,755 | 1,551 | 8,148 | ||||||||
| Total Non-Current Assets | 1,186,778 | 1,232,385 | 1,267,088 | ||||||||
| Trade & Other Receivables | 33,029 | 36,972 | 29,701 | ||||||||
| Investments | 263 | 231 | 213 | ||||||||
| Cash at Bank | 33,029 | 41,711 | 31,295 | ||||||||
| Total Current Assets | 66,321 | 78,914 | 61,209 | ||||||||
| Total Assets | 1,253,099 | 1,311,299 | 1,328,297 | ||||||||
| Equity | |||||||||||
| Issued Capital | 4,074 | 4,074 | 4,074 | ||||||||
| Share Premium Account | 555 | 555 | 555 | ||||||||
| Retained Earnings | 826,169 | 881,092 | 898,149 | ||||||||
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| Total Equity Attributable to Equity | |||||||||||
| Holders of the Parent | 830,798 | 885,721 | 902,778 | ||||||||
| Minority Interest | 115 | 125 | 118 | ||||||||
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| Total Equity | 830,913 | 885,846 | 902,896 | ||||||||
| Liabilities | |||||||||||
| Interest Bearing Loans & Borrowings | 148,350 | 114,312 | 114,378 | ||||||||
| Deferred Tax Liabilities | 219,326 | 246,976 | 261,994 | ||||||||
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| Total Non-Current Liabilities | 367,676 | 361,288 | 376,372 | ||||||||
| Bank Overdrafts | 303 | 183 | 358 | ||||||||
| Interest Bearing Loans & Borrowings | 5,045 | 117 | 1,117 | ||||||||
| Trade & Other Payables | 44,230 | 40,720 | 41,955 | ||||||||
| Taxation | 4,932 | 23,145 | 5,599 | ||||||||
| Total Current Liabilities | 54,510 | 64,165 | 49,029 | ||||||||
| Total Liabilities | 422,186 | 425,453 | 425,401 | ||||||||
| Total Equity & Liabilities | 1,253,099 | 1,311,299 | 1,328,297 | ||||||||
| Equity Shareholders Funds Per Share | £50.98 | £54.35 | £55.40 | ||||||||
| Consolidated Statement of Cash Flows for the six months ended 30 September 2008 | ||||||||||||||||||||||||
| Unaudited | Unaudited | Audited | ||||||||||||||||||||||
| 6 Months | 6 Months | Year | ||||||||||||||||||||||
| Ended | ended | ended | ||||||||||||||||||||||
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| 30/9/08 | 30/9/07 | 31/3/08 | |||||||||||||||||||||
| £000 | £000 | £000 | £000 | £000 | £000 | |||||||||||||||||||
| Cash Flows From Operating Activities | ||||||||||||||||||||||||
| Net Cash Generated from Operations | 15,420 | 15,697 | 32,026 | |||||||||||||||||||||
| Interest Received | 1,053 | 1,053 | 2,279 | |||||||||||||||||||||
| Interest Paid | (4,826) | (3,755) | (7,661) | |||||||||||||||||||||
| Drawings by Minority Interests in USA partnership | (1) | (52) | (60) | |||||||||||||||||||||
| U.K. Corporation Tax Paid | (4,970) | (5,085) | (17,506) | |||||||||||||||||||||
| Overseas Tax Paid | (178) | (91) | (466) | |||||||||||||||||||||
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| Net Cash from Operating Activities | 6,498 | 7,767 | 8,612 | |||||||||||||||||||||
| Cash Flows from Investing Activities | ||||||||||||||||||||||||
| Acquisitions and Additions to Investment Properties | (39,476) | (3,609) | (7,761) | |||||||||||||||||||||
| Proceeds from Sale of Investment Properties | 4,072 | 3,774 | 8,403 | |||||||||||||||||||||
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| Net cash from Investing Activities | (35,404) | 165 | 642 | |||||||||||||||||||||
| Cash Flows from Financing Activities | ||||||||||||||||||||||||
| New Secured Loans | 25,000 | 0 | 0 | |||||||||||||||||||||
| Repayment of Secured Loans | (500) | 0 | (2,000) | |||||||||||||||||||||
| Repayment of Mortgage Advances | (4,294) | (5,363) | (87) | |||||||||||||||||||||
| New Mortgage Advances | 8,976 | 7,513 | 3,429 | |||||||||||||||||||||
| Dividends Paid | 0 | 0 | (11,407) | |||||||||||||||||||||
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| Net Cash from Financing Activities | 29,182 | 2,150 | (10,065) | |||||||||||||||||||||
| Net Increase/(Decrease) in Cash & Cash Equivalents | 276 | 10,082 | (811) | |||||||||||||||||||||
| Cash & Cash Equivalents Brought Forward | 30,937 | 31,896 | 31,896 | |||||||||||||||||||||
| Effect of Exchange Rate Fluctuations on Cash Held | 1,513 | (450) | (148) | |||||||||||||||||||||
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| Cash & Cash Equivalents | 32,726 | 41,528 | 30,937 | |||||||||||||||||||||
Basis of preparation
This interim financial information has been prepared in accordance with International Financial Reporting Standard 34 (IFRS) interim financial reporting, applying the accounting policies and presentation that were applied in the preparation of the company's published consolidated financial statements for the year ended 31 March 2008. As required by the Listing Rules of the Financial Services Authority, the directors have considered the result of the endorsement by the EU of new or changed IFRSs that are applicable or available for early adoption in the preparation of the company's next consolidated financial statements for the year ending 31 March 2009 and concluded that they have no material effect on either the current or prior periods.
The interim financial information in this statement has not been audited or reviewed by auditors pursuant to the Auditing Practices Board guidance on review of interim financial information and does not constitute statutory accounts, as defined in section 240 of the Companies Act 1985. The auditors' report on the statutory accounts for the year to 31 March 2008 was unqualified and did not contain a statement under section 237 of the Companies Act 1985. Statutory accounts for the year to 31 March 2008 have been delivered to the Registrar of Companies. The interim financial statements were approved by the Board of Directors on 28 November 2008. The preparation of the interim financial statements requires management to make assumptions and estimates about future events which are uncertain, the actual outcome of which may result in a materially different outcome from that anticipated.
Dividends
No dividends were paid in the 6 months to 30 September 2008(6 months to 30 September 2007 (Nil).
Investment Properties
The Directors have estimated the value of the investment properties at the half-year after consultation with the Group's valuers. A full valuation of all the Group's properties will be carried out by independent professional valuers at 31 March 2009.
Related Party Transactions
Day-to-day management of the Group's properties in the United Kingdom is mainly carried out by Highdorn Co Limited and by Freshwater Property Management Limited. Mr BSE Freshwater and Mr SI Freshwater are directors of both companies and are also interested in the share capital of Highdorn Limited.
Mr BSE Freshwater, Mr SI Freshwater and Mr D Davis are also directors of the parent company of Freshwater Property Management Limited but have no beneficial interest in either company.
The net amounts payable for the provision of various management services charged by the Group's managing agents Highdorn Co Limited and Freshwater Property Management Limited were £1.5 million (year to 31 March 2008 £3.7million).
At 30 September 2008 £3.0 million was due to Highdorn Co Limited and Freshwater Property Management Limited (31 March 2008 due from £2.1million).
Statement of Director's Responsibilities
The Directors confirm that this condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 427 and DTR 428.
The Directors of Daejan Holdings PLC are listed in the Daejan Holdings PLC Annual Report for 31 March 2008. A list of current directors is maintained on the Daejan Holdings PLC website www.daejanholdings.com.
B S E Freshwater
Chairman
26 November 2008
Solomon I Freshwater
26 November 2008