HCFT.L Regulatory News (HCFT)

24 Mar 2005 07:00

Highcroft Investments PLC24 March 2005 Highcroft Investments PLC Preliminary results for the year ended 31 December 2004 Highlights • Gross property income up 6.2% to £1,667,000 • Operating profit up 4.8% to £1,624,000 • Basic earnings per share down 3.6% to 24.2p • Adjusted earnings per share up 6.3% to 23.5p • Two attractive additions to the property portfolio • Net asset value per share up 7.8% to 707p, another new high • Total dividends up 6.3% to 11.7p per share • Final dividend of 7.65p payable on 8 June 2005 • Annual General Meeting on Wednesday 25 May 2005 Mr Gavin Kingerlee, Chairman of Highcroft Investments plc, commented: "Our trading performance in 2004 has improved further by comparison with 2003.Dividends for 2004 are up 6.3%, while net asset value has risen 7.8% to 707p;this is a continuation of a pleasing trend and we look forward to furthersuccess in 2005." Enquiries:Gavin Kingerlee, Chairman 01865 840 023 Highcroft Investments plcFreddy Crossley 020 7739 8200 Charles Stanley & Co Ltd Financial results - operating activities Operating profit rose to £1,624,000 from £1,549,000 in 2003, an increase of4.8%. Total income was £1,829,000 as compared with £1,758,000 in 2003. Netproperty income rose from £1,457,000 to £1,540,000, an increase of 5.7%. Gross rents receivable were up 6.2% on 2003 reflecting the impact of the newinvestments and of rent reviews in both 2003 and 2004. Property incomerepresented 84.2% of total income compared with 82.9% in 2003. Residentialrepair costs were relatively high in 2004 and so property expenses rose from£112,000 in 2003 to £127,000 in 2004. Financial results - capital activities As we anticipated last year, the cash reserves of £1,079,000 which were held on31 December 2003 were used on fresh property acquisitions and on 31 December2004 the group had a medium term loan of £1,568,000 plus a short term overdraftof £146,000. Net cash inflow from operations was at £1,851,000 in 2004 (2003£1,977,000), because of the lower decrease in debtors for 2004, and the highercapital expenditure and financial investment in 2004 led to a decrease in cashof £1,225,000. Net assets increased by 7.8% during the year from £33.9 million to £36.6million. The increase was a steady one throughout the year and stemmed fromboth our property and listed investment portfolios. During the course of the year, the group invested £4,089,000 in property assets(2003 £1,596,000) and invested £1,016,000 (2003 £624,000) in stock markets. Thenet proceeds from property disposals during the year amounted to £246,000 (2003£660,000) while investment disposals raised £1,249,000 (2003 £1,334,000). The net gains on these disposals amounted to £48,000 (2003 £158,000), comprising£9,000 of gains on property disposals and £39,000 of gains on disposal ofinvestments. The net gain after taxation of £42,000 (2003 £158,000) wastransferred to realised capital reserve. Property The property valuation showed a rise from £25.4 million to £30.5 million. Thoseproperties that remained in the portfolio throughout the period show a rise invalue equivalent to 5.8% (2003 6.1%). There are 20 (2003 18) commercialproperties in the portfolio with an average value of £1,376,000 (2003£1,244,000). There are 14 residential properties in the portfolio (2003 15).The average value of these residential investments is £215,000 (2003 £203,000). Listed investments 2004 was again a better year for equity markets and the FTSE 100 was up from4,477 to 4,814 a rise of 7.5%. Those listed investments that remained in ourportfolio throughout the period showed a rise in value of 12.0% (2003 12.8%fall). We continued to review the portfolio in order to make tax efficientdisposals while protecting our dividend income stream. Summary Our equity portfolio valuation has risen by 8.3%, having realised net cash of£233,000. The property portfolio valuation has risen 20.0%, having invested anet £3,852,000. As a result we are pleased to report that the net asset valueper share has risen by 7.8% to 707p (2003 656p), a record level. Totalshareholders funds were £36,557,000 (2003 £33,901,000). The increase in income and operating profits enables us to propose an increasein dividends which is well above the rate of inflation. Proposed dividends for2004 are up 6.3% on 2003, with dividend cover very much the same. Basicearnings per share, which take account of asset disposals, are down 3.6% to24.2p per share and adjusted earnings per share, adjusted to take out the effectof asset disposals, are up 6.3% to 23.5p per share. Current trading and prospects In 2005, we are continuing to look for good quality property acquisitions whichwill fit well with our present property portfolio, helping us to secure thegroup's long term income and capital prospects. In the early part of 2005, avacant residential property has been sold. Our position on the listedinvestments portfolio is likely to be neutral but we continue to try to takeadvantage of opportunities and the progress of the market so that the combinedportfolio has a good balance of risk and reward. While both property and listed investment markets are never entirelypredictable, the business remains well placed to pursue its strategies and has asolid balance sheet. We look forward to continuing success in 2005 and tomeeting with shareholders at our AGM on 25 May 2005. G J KINGERLEEChairman 23 March 2005 Group Profit and Loss Accountfor the year ended 31 December 2004 2004 2003 £'000 £'000Income from fixed asset investmentsand other interest receivable 1,829 1,758 Administrative expenses 205 209 Operating profit 1,624 1,549 Gains on disposals of assets 1 48 158 Profit on ordinary activities before taxation 1,672 1,707 Taxation 2 419 409 Profit for the financial year 1,253 1,298 Gain on disposals of assets after taxation transferred torealised capital reserve 1 42 158 Profit available for distribution 1,211 1,140 Dividends 3 604 568 Profit retained 607 572 Earnings per share: 4Basic 24.2p 25.1pAdjusted 23.5p 22.1p All operations are continuing. Balance Sheetat 31 December 2004 The Group Note 2004 2003 £'000 £'000Fixed assetsTangible assets 5 30,523 25,436Investments 6 8,731 8,062 39,254 33,498 Current assetsDebtors 369 532Cash at bank - 1,079 369 1,611CreditorsAmounts falling due withinone year 1,567 1,208 Net current (liabilities)/assets (1,198) 403 Total assets less total liabilities 38,056 33,901 CreditorsAmounts falling due after more thanone year 1,499 - Net assets 36,557 33,901 Capital and reservesCalled up share capital 1,292 1,292Revaluation reserve - property 7,538 6,560 - other 4,172 3,542Capital redemption reserve 95 95Realised capital reserve 14,766 14,325Profit and loss account 8,694 8,087 Shareholders' funds - equity 36,557 33,901 Group Cash Flow Statement for the year ended 31 December 2004 Note 2004 2003 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 7 1,851 1,977 Taxation (451) (530) Capital expenditure and financial investmentPurchase of fixed assets - properties (4,089) (1,596) - listed (1,016) (624)investmentsSale of fixed assets - properties 246 660 - listed 1,249 1,334investmentsNet cash outflow from capital expenditure and financial investment (3,610) (226) Equity dividends paid (583) (537) Cash (outflow)/inflow before financing 8 (2,793) 684 FinancingNew medium term loan 1,568 - (Decrease)/increase in cash 8 (1,225) 684 Total Recognised Gains and Losses and Historical Cost Profits and Losses for the year ended 31 December 2004 Statement of total recognised gains and losses 2004 2003 £'000 £'000 Profit for the financial year 1,253 1,298 Unrealised surplus on revaluation of investment properties 1,235 1,320 Unrealised surplus on revaluation of listed and unlisted investments 864 996 Tax on valuation surplus arising in prior years attributable to properties sold in year (92) - Total recognised gains and losses for the year 3,260 3,614 Note of historical cost profits and losses 2004 2003 £'000 £'000 Profit on ordinary activities before taxation 1,672 1,707 Realisation of revaluation gains of previous years-attributable to investment properties 257 202 -attributable to listed and unlisted investments 234 (445)Historical cost profit on ordinary activities before taxation 2,163 1,464 Historical cost profits retained 1,140 487 Notes for the year ended 31 December 2004 1 Gains on disposals of assets 2004 2003Gains on disposals of assets arising on sales of: £'000 £'000Properties 9 82Investments 39 76Net gain on disposals of assets 48 158Corporation tax on disposals of assets 6 -Net gain on disposals of assets after taxation 42 158 2 Taxation The taxation charge at 30% (2003 30%) is based on the profit for the year and ismade up as follows: 2004 2003 £'000 £'000Corporation tax on operating profit 414 399Corporation tax on disposals of assets 6 -Prior year overprovision (1) 10 419 409 3 Dividends 2004 2003Ordinary shares £'000 £'000Interim dividend of 4.05p per share paid (2003 3.75p) 209 194Proposed final dividend of 7.65p per share (2003 7.25p) 395 374 604 568 4 Earnings per share The calculation of earnings per share is based on the profit for thefinancial year of £1,253,000 (2003 £1,298,000) and on 5,167,240 (2003 5,167,240)ordinary shares of 25p each which is the weighted average number of shares inissue during the year ended 31 December 2004. In view of the uneven nature of capital disposals, an adjusted earnings pershare has also been presented, based on the profit available for distribution of£1,212,000 (2003 £1,140,000). The effect of the adjustment is as follows: 2004 2003 Earnings Weighted Per share Earnings Weighted Per share average amount pence average amount pence number of number of shares shares £'000 £'000Basic earnings per share 1,253 5,167,240 24.2 1,298 5,167,240 25.1Adjustment for gains on disposals of assets (42) - (0.7) (158) - (3.0)Adjusted earnings per share 1,211 5,167,240 23.5 1,140 5,167,240 22.1 5 Tangible assets Land and buildings (Investment properties) Total Freeholds Long leaseholds £'000 £'000 £'000Valuation at 1 January 2004 25,436 23,081 2,355Additions 4,089 4,089 -Disposals (237) (237) -Surplus on revaluation 1,235 1,080 155Valuation at 31 December 2004 30,523 28,013 2,510 6 Investments Total Listed Unlisted £'000 £'000 £'000 Valuation at 1 January 2004 8,062 8,058 4 Additions at cost 1,016 1,016 - Disposals (1,211) (1,211) - Surplus on revaluation 864 864 - Valuation at 31 December 2004 8,731 8,727 4 7 Reconciliation of operating profit to net cash flow from operating activities 2004 2003 £'000 £'000Operating profit 1,624 1,549Decrease in debtors 163 384Increase in creditors 64 44Net cash inflow from operating activities 1,851 1,977 8 Analysis of changes in net funds/ (debt) 1 January Cash flow 31 December 2004 2004 £'000 £'000 £'000Cash at bank 1,079 (1,079) -Overdraft - (146) (146) 1,079 (1,225) (146)Debt:Loans falling due within one year - (69) (69)Loans falling due after more than one year - (1,499) (1,499)Total 1,079 (2,793) (1,714) 9 Accounting convention The preliminary announcement has been prepared in accordance with applicableaccounting standards as stated in the financial statements for the year ended 31December 2004 and under the historical cost convention except for therevaluation of fixed assets. The principal accounting policies of the grouphave remained unchanged from the previous year. 10 Annual General Meeting The Annual General Meeting will be held on 25 May 2005. 11 Final ordinary dividend A final ordinary dividend of 7.65p per share will be paid on 8 June 2005 toshareholders registered at the close of business on 6 May 2005. 12 Limitation The above does not constitute full accounts within the meaning of section240 of the Companies Act 1985. It is an extract from the full accounts for theyear ended 31 December 2004 on which the auditors have expressed an unqualifiedopinion. The accounts will be posted to shareholders on or before 26 April 2005and subsequently filed at Companies House. This information is provided by RNS The company news service from the London Stock Exchange