Helical Bar Regulatory News (HLCL)

17 Nov 2005 07:02

Helical Bar PLC17 November 2005 17 November 2005 HELICAL BAR PLC ("Helical"/"Company") Interim Results For the half year to 30 September 2005 HELICAL - 80% PROFIT JUMP AT HALF YEAR • Profit before tax of £15.1m (2004: £8.4m) - up 80% • No interim valuation of trading or investment stock • Adjusted diluted net asset value of 231p per share (31.3.2005: 221p) - up 5% • Interim dividend of 1.45p per share (2004: 1.32p) - up 10% • 40 active projects over a diverse range of property sectors. Giles Weaver, Chairman, commented: "The first half year has produced a good result. We are recycling cash out ofan expensive investment market building up our liquidity to accelerate ourdevelopment programme. With 40 active projects spread over the differentproperty sectors we view the prospects, for this year and thereafter, withconfidence." Further information, please contact: Helical Bar plc 020 7629 0113 Michael Slade (Managing Director) Nigel McNair Scott (Finance Director) Address: 11-15 Farm Street, London W1J 5RS Fax: 020 7408 1666 Website: www.helical.co.uk Financial Dynamics 020 7831 3113 Stephanie Highett/Dido Laurimore FINANCIAL HIGHLIGHTS *Restated *Restated Half Year To Half Year To Year To 30 September 30 September 31 March 2005 2004 2005 £m £m £m Net rental income 8.2 11.2 20.4 Development profits 3.9 0.2 12.7 Trading profits 6.8 1.3 5.8 Other gross profits 0.5 2.0 2.9 Gain on investment properties 7.2 0.7 44.2 Profits before tax 15.1 8.4 64.8 Adjusted profits before tax 1 7.9 7.7 20.6 pence pence pence Basic earnings per share 4 21.4 9.6 54.3 Diluted earnings per share 4 20.5 9.3 52.1 Adjusted diluted earnings per share 3/4 6.0 3.8 10.3 Dividends per share -ordinary dividend 4 1.45 1.32 3.32 -return of Cash 4 - - 80.00 Adjusted diluted net assets per share 2/4 231 183 221 £m £m £m Value of investment portfolio 239.2 251.7 271.3 Net borrowings 77.5 77.6 125.0 Net assets 202.0 225.7 185.4 Net gearing 38% 34% 67% Notes 1. After excluding the gain on investment properties. 2. After adding back deferred taxation arising from the clawback of capital allowances on sale of investment properties, the deferred taxation on the revaluation surpluses of the investment portfolio and the fair value of financial instruments. 3. After deducting the gain on investment properties, the associated deferred tax and the deferred tax on capital allowances. 4. Comparative figures have been adjusted to reflect the 5 for 1 share split on 1 September 2005. * Restated under IFRS CHAIRMAN'S STATEMENT Introduction The results for the first six months of the year, showing profits before tax of£15.1m (2004:£8.4m), have been marked by big increases in profits from trading,development and sales of investment properties, all areas where Helical hasadded substantial value over the last two years. The trading profits weremainly due to the partial sale of the Unwins portfolio, acquired at the end oflast year. The forward sale of our £100m mixed use retail and studentaccommodation scheme in Nottingham produced most of the development profits.The disposal of our retail park at Weston-super-Mare contributed the majority ofthe gain on investment properties. Further profits are anticipated on all thesesales. International Financial Reporting Standards (IFRS) In common with all companies listed on European Union stock exchanges, Helicaladopted IFRS with effect from 1 January 2005, although for practical purposesthese interim accounts are the first to be prepared in accordance with IFRS.Included in these accounts are restated comparative figures for the half year to30 September 2004 and the year to 31 March 2005. Reconciliations to, andexplanations of the differences between these figures and those previouslyreported under UK GAAP, are provided in the notes to these accounts. The adoption of IFRS has changed the presentation and format of the interimreport. However, it has no impact on the cash flows of the business or itsunderlying performance. We believe that the adjusted earnings per share and adjusted net asset value pershare are the best comparative figures for the Company. Share capital On the 31 August 2005 shareholders approved a 5 for 1 share split effective from1 September 2005. As a consequence the 18,424,385 ordinary 5p shares inexistence on 1 September 2005 were divided into 92,121,925 ordinary 1p shares.The net asset value per share and earnings per share calculations for thecurrent and comparative periods have all been adjusted accordingly. Results Profits before tax for the half year to 30 September 2005 increased by 80% to£15.1m (2004: £8.4m). Rental income for the period fell to £10.1m (2004:£12.4m) following the sale of investment property, in particular the sale ofAycliffe and Peterlee in October 2004. Trading profits of £6.8m (2004: £1.3m)and development profits of £3.9m (2004: £0.2m) augmented the gain on the sale ofinvestment properties of £7.2m (2004:£0.7m). Diluted earnings per share increased by 120% to 20.5p (2004: 9.3p) and adjustedearnings per share by 58% to 6.0p (2004: 3.8p). Basic net assets per share rose to 225p per share (31.3.2005: 211p) and thefully diluted net assets per share adjusted for the add back of the deferred taxprovision rose to 231p per share (31.3.2005: 221p). There has been no interim revaluation of the investment portfolio as at 30September 2005. The interim revaluation at 30 September 2004, undertaken forthe purposes of the Return of Cash in December 2004, has been excluded from thecomparative figures for that period, to be consistent with the accounts for theyear to 31 March 2005. Financing Further sales of investment, trading and development properties contributed to areduction in net debt to £77.5m (31.3.2005: £125.0m). Gearing has reduced to38% from 67% at 31 March 2005. Outlook The first half year has produced a good result. We are recycling cash out of anexpensive investment market building up our liquidity to accelerate ourdevelopment programme. With 40 active projects spread over the differentproperty sectors we view the prospects, for this year and thereafter, withconfidence. Giles WeaverChairman17 November 2005 DEVELOPMENT PROGRAMME In the half year under review the major components of development profitsrecognised have come from the retail development at Commercial Road, Bournemouthand the mixed use retail and student accommodation scheme at Trinity Square,Nottingham, with a contribution from a second phase at Stafford. It isanticipated that this picture will be repeated in the second half of the year. On the offices side, the Company has continued to work up schemes at RopemakerPlace EC2, Clareville House SW1 and looking longer term at schemes in WhiteCity, Mitre Square EC3 and Amen Corner, Bracknell. OFFICE DEVELOPMENTS Wood Lane, White City At Wood Lane, White City the Company is one of a number of landowners promotingthe regeneration of 43 acres of land into a major mixed use development. Thescheme is likely to comprise a high density mix of offices, retail, residential,leisure and community uses. The masterplanning process, being undertaken by Rem Koolhaas and The Office ofMetropolitan Architecture, is well underway and should be completed by the endof the year. We have held a number of consultations with stakeholder forumgroups and a public exhibition at various sites in the White City area. Mitre Square, London EC3 At Mitre Square we are planning a 350,000 sq. ft. office scheme in a jointventure with Ansbacher Property Development Ltd. In July 2005 the City resolvedto grant detailed planning consent for the scheme subject to completion of aS.106 agreement, which is currently being negotiated. Ropemaker Place, London EC2 At Ropemaker Place we are acting as Development Manager for DB Real Estate andhave received approval for a new building of approximately 500,000 sq. ft.Demolition of the existing building has been completed and we await asubstantial pre-let before commencing work on the new building. Clareville House, London SW1 At Clareville House we are acting as Development Manager for Lattice GroupPension Scheme. Discussions continue with Westminster City Council with regardto our proposed refurbishment of the existing building. Once completed therefurbished building will house 35,000 sq. ft. of offices, a nightclub of 17,000sq. ft., restaurant of 4,000 sq. ft. and retail of 2,000 sq. ft. JOINT VENTURES The Asset Factor The Company recently announced a new outsourcing joint venture called The AssetFactor. The Asset Factor is a joint venture with Matthew Punshon and OliverJones, both of whom have considerable experience of outsourcing. The venturewill offer organisations integrated property asset management solutions with theaim of reducing costs, increasing efficiency and making their accommodation workfor their business. RETAIL DEVELOPMENTS 56-76 Commercial Road, Bournemouth Building works on this £40m scheme are well advanced and the units will behanded over to the retailers by the end of this year for fitting out. Theredeveloped section, comprising 48,000 sq. ft. has been pre-let to Hennes, Zaraand Republic. The last remaining unit is now under offer to a nationalretailer. The scheme has been pre-sold to Irish investors, and also includes threeretained shops let to Wallis, Dixons and Carphone Warehouse. Trinity Square, Nottingham The £45m building contract was awarded to Shepherds earlier this summer, andwork is now well under way on this 10 storey scheme divided into two blocks.Completion of the works and trading by retailers is expected by the summer of2007. The development comprises nearly 200,000 sq. ft. of retail accommodation,plus 700 student units and a multi storey car park. Nearly 60% of the retailaccommodation has been pre-let to Borders, TK Maxx and Dixons, and early talksare now underway with national retailers on the remainder. The entire schemehas been pre-sold to Morley for over £100m and their Beech Fund will operate thestudent accommodation. Friary Retail Park, Stafford Phase 2 of the Friary Retail Park is currently on site with completion due March2006. The 4,000 sq. ft. unit is pre-let to Laura Ashley and pre-sold toArlington as an extension to the main funding deal on Phase 1. Bluebrick, Wolverhampton The former Low Level Station comprising 11 acres was purchased in November 2003. Planning consent is awaited for a major mixed use scheme comprising 25,000 sq.ft. car showroom, 88 bed hotel, 7,500 sq. ft. public house, five restaurants and208 apartments. Demolition work and the provision of a spine road to provideserviced sites will commence in early 2006. Hatters Retail Park, Luton The eight acre site has now been purchased following receipt of planning consentfor 80,000 sq. ft. of bulky goods retail warehousing and 25,000 sq. ft. ofindustrial units. Marketing of the retail units is underway and terms have beenagreed on a number of pre-lettings. Work has begun on an infrastructurecontract to prepare the site for construction of the units to commence in Spring2006. Town Centre, Shirley, Solihull The scheme, which comprises 175,000 sq. ft. of retail anchored by a 75,000 sq.ft. food store and some 200 apartments, is being progressed through a 50:50joint venture with Coltham Developments. A development agreement is in placewith Solihull Metropolitan Borough Council and a planning application is to besubmitted early in 2006. Solicitors are instructed for the forward sale of thefood store. Shrub Hill Retail Park, Worcester A purchase contract is in place with First Bus subject to their relocation to anew site and once this has been achieved the site, which has planning consentfor 35,000 sq. ft. of retail warehousing and 38 canal side apartments, can beprogressed. RESIDENTIAL DEVELOPMENTS Lime Tree Village, Dunchurch, Rugby At Lime Tree Village, Dunchurch, Rugby we have refurbished, with our jointventure partners, a Victorian country house and are in the process ofconstructing a retirement village of 153 bungalows, cottages and apartments.Phases I and II have been completed with 53 sold and reservations on a further14 units of the 21 unsold. It is anticipated that the final phase will becompleted in spring 2007. Bramshott Place, Liphook At Bramshott Place, Liphook we are progressing planning negotiations for aretirement village of 144 bungalows, cottages and apartments. The local PlanInspector has recommended that part of the site be included in the Local Plan ashousing land and his recommendations have been accepted by East HampshireDistrict Council. We have submitted two outline planning applications and theseare being processed by the local authority. We anticipate a planning consentfor around 150 residential units in early 2006. Maudsley Park, Great Alne Maudsley Park, Great Alne is a 314,000 sq. ft. industrial estate on a 20 acresite with potential for a retirement home use. The Local Plan Inspector hasrecommended that the planning brief for this site is relaxed to include, inpart, a retirement village. Stratford District Council has accepted hisfindings. An outline planning application has been submitted together with adesign brief which has been prepared in collaboration with the local authorityand the local villagers. The scheme comprises a 230,000 sq. ft. retirementvillage, country club facility and an element of low rise starter commercialunits. INVESTMENT AND TRADING Whilst the strong investment market presents a challenge to secure new deals atattractive prices, we continue to focus on sourcing properties where we can addvalue via redevelopment, refurbishment, or change of use. Out of Town Retail Our retail park investment in Weston-super-Mare was sold for £35m, 20% abovevaluation and approximately two and a half times 1999 historic cost. The buyerhas also entered into a £7.65m forward commitment to acquire a new 27,000 sq.ft. Wickes to be constructed next year. In Milton Keynes we have completed an 80,000 sq. ft. retail warehouse pre-let toHomebase and forward sold to Arlington Investors for £24.5m to show a profit ofover 40% on cost. Also in Milton Keynes we have exchanged contracts to acquirea site called C4.1 where a 110,000 sq. ft. Sainsbury's supermarket and 400residential units are planned. Both these deals are in partnership with localdevelopers Abbeygate. We have acquired a 24,000 sq. ft. solus retail warehouse with open A1 consent inPaignton with medium term redevelopment potential. In Town Retail At the half year end we had sold, for a total consideration of £19.71m, 40 ofthe 95 Unwins off licences acquired earlier in the year to show a net profit of£5.25m. A further 33 have subsequently exchanged at auction with the remaining22 lots to be auctioned prior to Christmas. In Chiswick we secured a new 15 year lease to WH Smith at a 30% increase in rentwhilst obtaining planning consent for a residential development at the rear ofthe site. The combined sale proceeds of £4.1m were 26% above valuation andabout two and a half times 2000 historic cost. In Glasgow we have acquired a portfolio of eight small city centre propertieswith asset management or trading potential. Since the half year end we have acquired a parade of shops in East Grinstead leton a long lease to Sainsbury's where the pitch has the potential to improvedramatically as a result of a proposed new shopping centre. At our Letchworth Shopping Centre we have signed three further lettings leadingto a 50% increase in rental value of the secondary mall, matching the increasewe secured in the prime pitch last year. Offices We have completed the refurbishment of Battersea Studios acquired this year toprovide 55,000 sq. ft. of media friendly accommodation for multiple occupation.One letting is signed with five more in solicitors' hands. Our first project ofthis nature, Shepherds Building, comprises 150,000 sq. ft. fully let to over 50businesses with a waiting list of occupiers seeking space. At 61 Southwark Street we have just completed the refurbishment of an officefloor and taken a surrender of a part floor which is now under offer to anadjoining occupier. The building is close to the Tate Modern and the higherfloors have views over to St Paul's. Industrial We continue to make good progress in our joint ventures with Dencora andChancerygate building small industrial units for owner occupation. Our final profits on Harlow have been taken with the sale of the remaining fiveunits. At Edenbridge four units were sold during the half year with the finalfour sold subsequently. Both these completed projects showed geared IRRs inexcess of 20% per annum. Nine more units were sold at Sawston, Cambridgeleaving seven of the initial 26 to sell of which three are under offer. Asecond phase of 12 units has now commenced. A site was bought and sold inNewmarket to show a gross profit of about 40%. Our largest scheme at Slough was awarded the IAS Industrial Development of theYear Award following practical completion in March. Here four more units weresold and a further unit placed under offer leaving 16% of the scheme by floorarea (two units out of 13) to sell. After the half year end we sold the existing office element of our scheme atCowley, Oxford to an owner occupier and have now commenced construction of tenindustrial units and four office units. We have two further site purchases insolicitors' hands to maintain our level of exposure as existing schemes havecompleted and sold. Further industrial sales during the year included Preston for £3.97m, 16% abovevaluation and over double historic cost. In North Woolwich we sold 55% of theestate by floor area in two transactions for a total of £9m, £2m more than thepurchase price of the whole in 2002 and all subsequent refurbishment costs. In Sandiacre, Nottingham we have acquired a 150,000 sq. ft. distribution complexlet on a short term basis with active management opportunities. Portfolio split (by value) Offices Retail Retail Industrial Other Total in town out of town Investment 31.3% 23.3% 9.7% 12.2% 0.1% 76.6%Trading 0.6% 4.6% 0.7% 6.8% 2.6% 15.3%Development 2.3% 0.0% 3.8% 0.0% 2.0% 8.1% -------- -------- -------- -------- ------- ---------Total 34.2% 27.9% 14.2% 19.0% 4.7% 100.0% Independent Review Report to Helical Bar plc Introduction We have been instructed by the Company to review the financial information forthe six months ended 30 September 2005 which comprises the consolidated incomestatement, the consolidated balance sheet, the consolidated cash flow statement,the consolidated statement of recognised income and expense and the relatednotes 1 to 24. We have read the other information contained in the interimreport and considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the Company, in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our review work has been undertaken sothat we might state to the Company those matters we are required to state to itin an independent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe Company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority, which require that the accountingpolicies and presentation applied to the interim figures should be consistentwith those applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. International Financial Reporting Standards As disclosed in note 2, the next annual financial statements of the group willbe prepared in accordance with International Financial Reporting Standards asadopted for use in the European Union. Accordingly, the interim report has beenprepared in accordance with the recognition and measurement criteria of IFRS andthe disclosure requirements of the Listing Rules. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 September 2005. Grant Thornton UK LLPChartered AccountantsLondon17 November 2005 Unaudited Consolidated Income StatementFor the half year to 30 September 2005 *Restated *Restated Half Year To Half Year To Year To 30 September 30 September 31 March 2005 2004 2005 Notes £000 £000 £000 Revenue 5 52,394 30,948 101,469 _____ _____ _____ Net rental income 6 8,229 11,203 20,440Trading profits 6,813 1,264 5,771Development profits 3,866 239 12,664Share of operating profit of joint 324 1,934 2,699ventures after taxSundry income 140 48 235 _____ _____ _____ Gross profit before gain on investment 19,372 14,688 41,809properties Gain on investment properties 7 7,245 695 44,204 _____ _____ _____ Gross profit 26,617 15,383 86,013 Administration costs (7,354) (4,562) (15,634) _____ _____ _____ Operating profit 19,263 10,821 70,379 Finance costs 8 (4,469) (3,368) (7,509)Finance income 330 963 1,948 _____ _____ _____ Profit before taxation 15,124 8,416 64,818 Taxation 9 3,069 3,971 (1,584) _____ _____ _____ Profit on ordinary activities after 18,193 12,387 63,234taxation _____ _____ _____ - attributable to minority interests (124) 116 17- attributable to equity shareholders 18,317 12,271 63,217 _____ _____ _____ 18,193 12,387 63,234Dividend (1,831) (2,524) (60,798) _____ _____ _____ Retained profit for the period 16,362 9,863 2,436 _____ _____ _____ Earnings per 1p share 10- basic 21.4p 9.6p 54.3p- fully diluted 20.5p 9.3p 52.1p- adjusted 6.0p 3.8p 10.3p * Restated under IFRS Unaudited Consolidated Balance SheetAt 30 September 2005 *Restated At *Restated At 30 September 30 September 31 March 2005 2004 2005 Notes £000 £000 £000 Non-current assetsInvestment properties 11 239,210 251,714 271,315Plant, equipment and owner occupied 471 509 540propertyInvestment in joint ventures 2,519 1,222 2,195Goodwill 182 258 182 _____ _____ _____ 242,382 253,703 274,232Current assetsLand, developments and trading 12 71,043 67,994 95,568propertiesAvailable for sale investments 13 82 263 123Trade and other receivables 14 38,200 39,388 41,528 Cash and cash equivalents 15 31,230 63,851 28,203 _____ _____ _____ 140,555 171,496 165,422 _____ _____ _____ Total assets 382,937 425,199 439,654 Current liabilitiesTrade and other payables 16 (52,624) (35,251) (75,711)Taxation (6,318) (3,340) (5,787)Borrowings 17 (4,286) (26,291) (21,136) _____ _____ _____ (63,228) (64,882) (102,634)Non-current liabilitiesBorrowings 17 (104,404) (115,116) (132,043)Financial instruments 18 (823) (1,773) (1,657)Deferred tax 9 (12,266) (17,537) (17,746)Obligation under finance leases (182) (182) (182) _____ _____ _____ (117,675) (134,608) (151,628) _____ _____ _____ Total liabilities (180,903) (199,490) (254,262) _____ _____ _____ Net assets 202,034 225,709 185,392 _____ _____ _____ * Restated under IFRS Unaudited Consolidated Balance SheetAt 30 September 2005 *Restated At *Restated At 30 September 30 September 31 March 2005 2004 2005 Notes £000 £000 £000Equity Called up share capital 19 1,204 1,358 3,621Share premium account 42,052 38,196 39,110Revaluation reserve 41,910 53,625 54,530Capital redemption reserve 7,467 7,273 7,467Other reserves 291 291 291Retained earnings 112,704 135,318 83,598Investment in own shares 21 (7,139) (14,051) (6,893) _____ _____ _____ Equity shareholders funds 198,489 222,010 181,724 Minority interests 3,545 3,699 3,668 _____ _____ _____ Total equity 202,034 225,709 185,392 _____ _____ _____ Net assets per share Basic 23 225p 175p 211pDiluted 23 219p 170p 201pAdjusted diluted 23 231p 183p 221p * Restated under IFRS Unaudited Consolidated Cash Flow StatementFor the half year to 30 September 2005 *Restated *Restated Half Year To Half Year To Year To 30 September 30 September 31March 2005 2004 2005Cash flows from operating activitiesNet operating profit before net finance costs (note 24) 11,694 8,192 23,476Depreciation and amortisation 87 98 190Adjustments for other non-cash items (85) (201) (852) _____ _____ _____Cash flows from operations before changes in working 11,696 8,089 22,814capital _____ _____ _____Change in trade and other receivables 1,904 4,166 (14,375)Change in trading properties 25,826 3,543 (21,366)Change in trade and other payables (22,743) (1,936) 45,545 _____ _____ _____Cash generated from operations 4,987 5,773 9,804 _____ _____ _____ Interest paid (6,849) (5,148) (10,408)Interest received 330 960 1,942Minority interest dividends paid - - (1,249)Dividends from joint ventures - 1,078 846(Acquisitions)/disposals - (350) (124)Tax paid (424) (464) (42) _____ _____ _____ (6,943) (3,924) (9,035) _____ _____ _____ _____ _____ _____Cash flows from operating activities 9,740 9,938 23,583 Cash flows from investing activitiesPurchase of investment property (15,909) (8,857) (57,872)Sale of investment property 55,353 59,807 138,305Purchase of investments (175) (3,503) (4,078)Sale of tangible fixed assets - 24 47Purchase of tangible fixed assets (18) (109) (231) _____ _____ _____ 39,251 47,362 76,171 _____ _____ _____Cash flows from financing activitiesIssue of shares 2,976 2,323 3,965Net borrowings drawn down - - 4,859Net borrowings repaid (44,623) (7,009) -Equity dividends paid (1,831) (2,532) (60,798)Repurchase of shares - (4,467) (4,467)Return of cash - B share repurchase (2,451) - (32,465) - expenses - - (709) Refinancing costs (35) (48) (220) _____ _____ _____ (45,964) (11,733) (89,835) _____ _____ _____Net increase in cash and cash equivalents 3,027 45,567 9,919Cash and cash equivalents at 1 April 2005 28,203 18,284 18,284 _____ _____ _____Cash and cash equivalents at 30 September 2005 31,230 63,851 28,203 _____ _____ _____ * Restated under IFRS Unaudited Consolidated Statement of Recognised Income and ExpenseFor the half year to 30 September 2005 *Restated *Restated Half Year To Half Year To Year To 30 September 30 September 31 March 2005 2004 2005 £000 £000 £000 Profit for the period after taxation 18,193 12,387 63,234Minority interest 124 (116) (17)Minority interest in revaluation surplus - 191 (960) _____ _____ _____Total recognised income and expense 18,317 12,462 62,257 _____ _____ _____ * Restated under IFRS Unaudited Notes to the Interim Statement 1. Financial Information The financial information contained in this report does not constitute statutoryaccounts within the meaning of section 240 of the Companies Act 1985. The fullaccounts for the year ended 31 March 2005, which were prepared under UK GAAP andwhich received an unqualified report from the Auditors, and did not contain astatement under s237(2) or (3) of the Companies Act 1985, have been filed withthe Registrar of Companies. The interim report was approved by the Board on 16 November 2005 and this reportis being sent to shareholders and will be available from the Company'sRegistered Office at 11-15 Farm Street, London W1J 5RS and on the Company'swebsite at www.helical.co.uk. The income statement and balance sheet have been prepared on the basis ofrecognition and measurement requirements of International Financial ReportingStandards (IFRS) issued by the International Accounting Standards Board (IASB)that are expected to be applicable for the full year accounts. 2. Transition to IFRS All listed companies in the European Union are required to present theirconsolidated financial statements for accounting periods beginning on or after 1January 2005 in accordance with IFRS as adopted by the European Union.Therefore, the Group's consolidated financial statements for the year ending 31March 2006 will be presented on this basis with IFRS comparative figures. Theseinterim financial statements have been prepared on the basis of the IFRSaccounting policies expected to be adopted in the year-end consolidatedfinancial statements. The Group's transition date for adoption of IFRS is 1 April 2004. IAS 32 andIAS 39, dealing with financial instruments, have been adopted from 1 April 2005. The provisions of IFRS 2 "Share-Based Payments" have been applied in respectof equity settled awards granted since 7 November 2002 that had not vested by 1January 2005. These transition dates have been selected in accordance with IFRS1, "First time adoption of International Financial Reporting Standards". Prior to the adoption of IFRS, the financial statements of Helical Bar plc hadbeen prepared in accordance with the United Kingdom accounting standards (UKGAAP). UK GAAP differs in certain respects from IFRS and certain accounting,valuation and consolidation methods have been amended, when preparing thesefinancial statements, to comply with IFRS. The comparative figures in respectof 30 September 2004 and 31 March 2005 have been restated to reflect theseamendments. Reconciliation and description of the effect of the transition fromUK GAAP to IFRS on the Group's reported financial position and financialperformance are set out in note 4. A full restatement of the accounts for theyear to 31 March 2005 is available on the Company's website at www.helical.co.uk 3. Principal Accounting Policies Basis of consolidation The consolidated financial information includes financial information in respectof the Company and its subsidiary undertakings. The group's interest in jointly controlled entities is accounted for using theequity method of accounting. Goodwill Goodwill arising on acquisition of group undertakings is carried as anintangible asset at cost less accumulated impairment losses. Investment properties Investment properties are properties owned or leased by the group which are heldfor long-term rental income and for capital appreciation. Investment propertyis initially recognised at cost and revalued at the balance sheet date to fairvalue as determined by professionally qualified external valuers. In accordancewith IAS40, investment property held under the leases is stated gross of therecognised finance lease liability. Gains or losses arising from changes in the fair value of investment propertyare included in other operating income in the income statement of the period inwhich they arise. In accordance with IAS 40, as the group uses the fair value model, nodepreciation is provided in respect of investment properties including integralplant. When the group redevelops an existing investment property for continued futureuse as investment property, the property remains an investment property measuredat fair value and is not reclassified. Interest is capitalised before taxrelief until the date of practical completion. Leases Leases are classified according to the substance of the transaction. A leasethat transfers substantially all the risks and rewards of ownership to thelessee is classified as a finance lease. All other leases are classified asoperating leases. In accordance with IAS 40, finance and operating leases of investment propertyare accounted for as finance leases and recognised as an asset and an obligationto pay future minimum lease payments. The investment property asset is includedin the balance sheet at fair value, gross of the recognised finance leaseliability. Lease payments are allocated between the liability and financecharges so as to achieve a constant financing rate. Assets leased out under operating leases are included in investment property,with rental income recognised on a straight-line basis over the lease term. Depreciation Plant and equipment is depreciated to its residual value on a straight-linebasis over its expected useful life. Trading properties Properties and land held for sale are included in the balance sheet at the lowerof cost and net realisable value. Investments Investments are classified as available-for-sale investments or tradinginvestments dependent on the purpose for which they were acquired.Available-for-sale investments, being investments intended to be held for anindefinite period, are revalued to fair value at the balance sheet date. Forlisted investments, fair value is the bid market listed value ruling at thebalance sheet date. Gains or losses arising from changes in fair value areincluded in the revaluation reserve except to the extent that losses areattributable to impairment, in which case they are recognised in the incomestatement. Upon disposal, accumulated fair value adjustments are included inthe income statement. Trading investments, acquired principally for the purpose of generating a profitfrom short-term fluctuations in price, are included in current assets andrevalued to fair value. Realised and unrealised gains or losses arising fromchanges in fair value are included in the income statement in the period inwhich they arise. Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. For thepurposes of the cash flow statement, cash and cash equivalents comprise cash inhand, deposits with banks, other short term, highly liquid investments withoriginal maturities of three months or less, net of bank overdrafts. Revenue recognition Property revenue consists of gross rental income on an accruals basis, togetherwith sales of trading and development properties, excluding sales of investmentproperties. Rental income receivable in the period from lease commencement tothe earlier of lease expiry and any tenant option to break is spread evenly overthat period. Any incentive for lessees to enter into a lease agreement and anycosts associated with entering into the lease are spread over the same period. Revenue in respect of investment and other income represents investment income,fees and commissions earned on an accruals basis and profits or lossesrecognised on investments held for the short-term. Dividends are recognisedwhen the shareholders' right to receive payment has been established. Interestincome is accrued on a time basis, by reference to the principal outstanding andthe effective interest rate. A property is regarded as sold when the significant risks and returns have beentransferred to the buyer. For conditional exchanges, sales are recognised asthe conditions are satisfied. Income tax The charge for current taxation is based on the results for the year as adjustedfor items which are non-assessable or disallowed. It is calculated using ratesthat have been enacted or substantively enacted by the balance sheet date. Taxpayable upon realisation of revaluation gains recognised in prior periods isrecorded as a current tax charge with a release of the associated deferredtaxation. Deferred tax is provided using the balance sheet liability method in respect oftemporary differences between the carrying amount of assets and liabilities inthe financial statements and the corresponding tax bases used in computation oftax profit with the exception of deferred tax on the revaluation surpluses wherethe tax basis used is the accounts historical cost. Deferred tax is provided on all temporary differences. Deferred tax is determined using tax rates that have been enacted orsubstantively enacted by the balance sheet date and are expected to apply whenthe related deferred tax asset is realised or the deferred tax liability issettled. It is recognised in the income statement except when it relates toitems credited or charged directly to equity, in which case the deferred tax isalso dealt with in equity. Derivative financial instruments The group enters into derivative transactions such as interest, caps and floorsin order to manage the risks arising from its activities. Derivatives areinitially recorded at cost and are subsequently remeasured to fair value basedon market prices, estimated future cash flows and forward rates as appropriate.Any change in the fair value of such derivatives is recognised immediately inthe income statement as a finance cost. Share based payments The cost of granting share options, awards under the performance share plan andthe other share-based remuneration to Directors and other employees isrecognised through the income statement. The Company uses the Stochasticvaluation model and the resulting value is amortised through the incomestatement over the vesting period of the options, awards and shares. Dividends Dividend distributions to the Company's shareholders are recognised as aliability in the financial statements in the period in which dividends aredeclared. 4. Reconciliation between UK GAAP and IFRS The principal changes arising from the presentation of the 30 September 2004 and31 March 2005 results under IFRS are: (a) Profit before tax Restated Restated Year To Half Year To 31 March 30 September 2005 2004 £000 £000 As previously reported under UK GAAP 34,851 9,474 Goodwill impairment 87 (356)Amortisation of rent free periods and other lease incentives (1,029) (1,183)Amortisation of letting costs (82) (404)Share based payments 47 (151)Joint venture share of taxation (570) (73)Revaluation gains on investment properties reported as income - subsidiaries 30,098 - - associated companies 191 - Movement in fair value of derivative financial instruments 1,225 1,109 _____ _____IFRS profit before tax 64,818 8,416 _____ _____ (b) Taxation Current tax Restated Restated Year To Half Year To 31 March 30 September 2005 2004 £000 £000 As previously reported under UK GAAP 8,583 3,162Joint venture share of current tax (570) (496) _____ _____As restated under IFRS 8,013 2,666 Deferred tax As previously reported under UK GAAP (546) (1,118)Investment property surpluses (5,825) (5,681)Capital allowances (93) (118)Financial instruments 368 333Tenants incentives (309) (355)Letting costs (24) (121)Joint venture share of deferred tax - 423 _____ _____As restated under IFRS (6,429) (6,637) _____ _____Taxation as restated under IFRS 1,584 (3,971) _____ _____ (c) Profit after tax Restated Restated Year To Half Year To 31 March 30 September 2005 2004 £000 £000 As previously reported under UK GAAP 26,814 7,429IFRS adjustments to profit before taxation 29,967 (1,058)IFRS adjustments to taxation 6,453 6,016 _____ _____IFRS profit after tax 63,234 12,387 _____ _____ (d) Net assets Restated At Restated At 31 March 31 March 2005 2004 £000 £000 As previously reported under UK GAAP 196,712 238,615 Amortisation of rent free periods and other lease incentives 3,240 4,269Amortisation of letting costs 1,606 1,687Fair value of financial instruments (1,657) (2,882)Tax effect of the above (957) (923)Goodwill impairment (491) (575)Share based payment 98 51Exclusion of provision for proposed dividend 1,831 2,524Provision for contingent tax liability - on revaluation surplus (14,684) (20,509) - on capital allowances (306) (399) _____ _____ (11,320) (16,757) _____ _____As at 31 March under IFRS 185,392 221,858 _____ _____ (e) Adjusted net asset value per share Restated Restated 31 March 30 September 2005 2004 pence pence As previously reported 216 193Amortisation period of lease incentives (net of tax) 2 2Amortisation of letting costs (net of tax) 1 1Dividend adjustment 2 1Interim revaluation surplus (net of tax) - (11)Adoption of UITF 38 - Accounting for ESOP Trusts - (3) _____ _____Restated under IFRS 221 183 _____ _____ 5. Revenue Restated Restated Half Year To Half Year To Year To 30 September 30 September 31 March 2005 2004 2005 £000 £000 £000 Trading property sales 30,694 9,608 25,432Rental income 10,135 12,441 22,745Developments 11,356 8,850 52,916Other income 209 49 376 _____ _____ _____ 52,394 30,948 101,469 _____ _____ _____ 6. Net rental income Restated Restated Half Year To Half Year To Year To 30 September 30 September 31 March 2005 2004 2005 £000 £000 £000 Gross rental income 10,135 12,441 22,745Rents payable (307) (233) (396)Other property outgoings (1,599) (1,005) (1,909) _____ _____ _____Net rental income 8,229 11,203 20,440 _____ _____ _____ 7. Gain on investment properties Restated Restated Half Year To Half Year To Year To 30 September 30 September 31 March 2005 2004 2005 £000 £000 £000 Net proceeds from the sale of investment properties 55,353 71,140 140,183Book value (48,108) (68,578) (124,210)Lease incentive and letting costs adjustment - (1,867) (1,867) _____ _____ _____Profit on sale of investment properties 7,245 695 14,106Revaluation gains on investment properties - - 30,098 _____ _____ _____Gain on investment properties 7,245 695 44,204 _____ _____ _____ 8. Finance costs Restated Restated Half Year To Half Year To Year To 30 September 30 September 31 March 2005 2004 2005 £000 £000 £000 Interest payable on bank loans and overdrafts 4,483 4,260 8,330Other interest payable and similar charges 2,046 1,119 2,243Finance arrangement costs 169 381 457Interest capitalised (1,395) (1,283) (2,296)Change in fair value of interest rate swaps (834) (1,109) (1,225) _____ _____ _____Finance costs 4,469 3,368 7,509 _____ _____ _____ 9. Taxation Restated Restated Half Year To Half Year To Year To 30 September 30 September 31 March 2005 2004 2005 £000 £000 £000 The tax charge is based on the profit for the periodand represents:United Kingdom corporation tax at 30%(2004: 30%) - group corporation tax 2,411 2,666 6,100 - adjustments in respect of prior periods - - 1,913 _____ _____ _____Current tax charge 2,411 2,666 8,013 Deferred tax - capital allowances (688) (813) (639) - other timing differences 248 (143) 35 - revaluation surpluses (5,040) (5,681) (5,825) _____ _____ _____Deferred tax (5,480) (6,637) (6,429) _____ _____ _____Tax on profit on ordinary activities (3,069) (3,971) 1,584 _____ _____ _____ Deferred tax Capital gains 9,644 14,827 14,684Capital allowances 1,417 1,931 2,105Other taxing differences 1,205 779 957 _____ _____ _____Deferred tax provision 12,266 17,537 17,746 _____ _____ _____ Under IAS 12, deferred tax provisions are made for the tax that wouldpotentially be payable on the realisation of investment properties and otherassets at book value. This potential tax payable is reduced by indexation ofthe capital gains. If upon sale of the investment properties the group retained all the capitalallowances the deferred tax provision in respect of capital allowances of £1.4mwould be released and further capital allowances of £18.9m would be available toreduce future tax liabilities. 10. Earnings per share The calculation of the basic earnings per share is based on the earningsattributable to ordinary shareholders divided by the weighted average number ofshares in issue during the year. Shares held by the ESOP, which has waived itsentitlement to receive dividends, are treated as cancelled for the purposes ofthis calculation. The calculation of diluted earnings per share is based on the basic earnings pershare, adjusted to allow for the issue of shares and the post tax effect ofdividends on the assumed exercise of all dilutive options. Reconciliations of the earnings and weighted average number of shares used inthe calculations are set out below. Half Year To 30 September 2005 Weighted average Per share Earnings no of shares amount £000 000 pence Basic earnings per share 18,317 85,716 21.4Dilutive effect of share options 3,512 _____ _____ _____Diluted earnings per share 18,317 89,228 20.5 Adjustments - gain on investment properties (7,245) - deferred tax on revaluation surpluses (5,040) - deferred tax on capital allowances (688) _____ _____ _____Adjusted diluted earnings per share 5,344 89,228 6.0 _____ _____ _____ Restated Half Year To 30 September 2004 Weighted average Per share Earnings no of shares amount £000 000 pence Basic earnings per share 12,271 127,619 9.6Dilutive effect of share options 5,025 _____ _____ _____Diluted earnings per share 12,271 132,644 9.3 Adjustments - gain on investment properties (695) - deferred tax on revaluation surpluses (5,681) - deferred tax on capital allowances (813) _____ _____ _____Adjusted diluted earnings per share 5,082 132,644 3.8 _____ _____ _____ 11. Investment properties Valuation £000 At 1 April 2005 271,315Additions 16,003Disposals (48,108) _____As at 30 September 2005 239,210 _____ All properties are stated at market value as at 31 March 2005, as adjusted foradditions and disposals in the half year to 30 September 2005. Interest capitalised in respect of investment properties at 30 September 2005amounted to £1,107,000 (31 March 2005 £1,013,000). 12. Land, developments and trading properties At Restated At 30 September 31 March 2005 2005 £000 £000 Development sites 24,015 34,711Properties held as trading stock 47,028 60,857 _____ _____ 71,043 95,568 _____ _____ Interest capitalised in respect of the development of sites is included in stockto the extent of £2,431,000 (31.03.2005: £2,185,000). Interest capitalisedduring the period in respect of development sites amounted to £1,301,000. 13. Available for sale investments At Restated At 30 September 31 March 2005 2005 £000 £000 UK listed investments at fair value 82 123 _____ _____ 82 123 _____ _____ 14. Trade and other receivables At Restated At 30 September 31 March 2005 2005 £000 £000 Trade receivables 12,954 16,056Other receivables 6,219 11,979Prepayments 19,027 13,493 _____ _____ 38,200 41,528 _____ _____ 15. Cash and cash equivalents At Restated At 30 September 31 March 2005 2005 £000 £000 Rent deposits and cash held at managing agents 1,882 2,612Cash secured against debt and cash held at solicitors 414 2,368Cash held to fund future development costs 374 364Free cash 28,560 22,859 _____ _____ 31,230 28,203 _____ _____ 16. Trade and other payables At Restated At 30 September 31 March 2005 2005 £000 £000 Trade payables 5,500 32,149Other payables 19,410 8,788Accruals 27,714 34,774 _____ _____ 52,624 75,711 _____ _____ 17. Borrowings At Restated At 30 September 31 March 2005 2005 £000 £000Bank overdraft and loans - maturityDue within one year 4,286 21,136Due after more than one year 104,404 132,043 _____ _____ 108,690 153,179 _____ _____ Gearing At Restated At 30 September 31 March 2005 2005 £000 £000 Total borrowings 108,690 153,179Cash (31,230) (28,203) _____ _____Net borrowings 77,460 124,976 _____ _____ Net assets 202,034 185,392 Gearing 38% 67% 18. Fair value of financial assets and financial liabilities: At Restated At 30 September 31 March 2005 2005 £000 £000 Book value 126,214 153,587Fair value (127,037) (155,244) _____ _____ (823) (1,657) _____ _____ The fair value of financial assets and financial liabilities represents themarket valuations at 30 September 2005 and 31 March 2005. 19. Share capital At Restated At 30 September 31 March 2005 2005 £000 £000Authorised- the authorised share capital of the Company is £39,576,626.60divided into ordinary shares of 1p each, 5.25p convertible cumulativeredeemable preference shares 2012 of 70p each and deferred shares of 1/8p each 39,577 39,577 _____ _____ 39,577 39,577 _____ _____Allotted, called up and fully paidAttributable to equity interests: 939 905- 93,871,925 ordinary shares of 1p each _____ _____Attributable to non-equity interest - 612,704 non-cumulative preference shares - 2,451 - 212,145,300 deferred shares of 1/8 p each 265 265 _____ _____ 1,204 3,621 _____ _____ As at 1 April 2005 the Company had 18,101,164 ordinary 5p shares in issue. On17 June 2005 options over 323,221 ordinary 5p shares were exercised increasingthe issued share capital of the Company to 18,424,385 ordinary 5p shares. On 1September 2005, following approval by shareholders at an EGM on 31 August 2005,each 5p share was split into five 1p shares. Following this share split therewere 92,121,925 ordinary 1p shares in issue. On 7 September options over1,750,000 ordinary 1p shares were exercised increasing the issued share capitalof the Company to 93,871,925 ordinary 1p shares. Share options At 30 September 2005 unexercised options over 4,155,510 (31 March 2005:7,521,615) new ordinary 1p shares in the Company and 6,234,695 (31 March 2005:6,484,695) purchased ordinary 1p shares held by the ESOP had been granted todirectors and employees under the Company's share option schemes. During theperiod no new options were granted. Options over 323,221 ordinary 5p shares and2,000,000 ordinary 1p shares were exercised. 20. Dividends Restated Restated Half Year To Half Year To Year To 30 September 30 September 31 March 2005 2004 2005 £000 £000 £000Attributable to equity share capital Ordinary - interim paid 1.32p per share - 1,702 - final paid 2.20p (2004: 2.00p) per share 1,831 2,524 2,524 A Shares - Return of Cash - - 56,572 _____ _____ _____ 1,831 2,524 60,798 _____ _____ _____ The interim dividend of 1.45p (30 September 2004: 1.32 pence per share) wasapproved by the board on 16 November 2005 and is payable on 22 December 2005 toshareholders on the register on 2 December 2005. The dividend has not beenincluded as a liability as at 30 September 2005. The final dividend for the year to 31 March 2005 of £2,524,000, representing2.20 pence per share, was paid on 21 July 2005 and is included in theConsolidated Statement of Change in Equity. 21. Investment in own shares Following approval at the 1997 Annual General Meeting the Company establishedthe Helical Bar Employees' Share Ownership Plan Trust (the "Trust") to be usedas part of the remuneration arrangements for employees. The purpose of theTrust is to facilitate and encourage the ownership of shares by or for thebenefit of employees by the acquisition and distribution of shares in theCompany. The Trust purchases shares in the Company to satisfy the Company's obligationsunder its Share Option Schemes and Performance Share Plan. At 30 September 2005 the Trust held 5,648,080 (31 March 2005: 5,695,580)ordinary shares in Helical Bar plc. At 30 September 2005 options over 6,234,695 (31 March 2005: 6,484,695) ordinaryshares in Helical Bar plc had been granted through the Trust. At 30 September2005 awards over 4,514,380 (31 March 2005: 2,549,760) ordinary shares in HelicalBar plc had been made under the terms of the Performance Share Plan. 22. Consolidated statement of changes in equity Notes Restated Restated Half Year To Half Year To Year To 30 September 30 September 31 March 2005 2004 2005 £000 £000 £000Opening equity shareholders' funds- as previously reported 193,044 234,918 234,918- effect of adopting IFRS 4 (11,320) (16,757) (16,757) _____ _____ _____Opening shareholders funds restated 181,724 218,161 218,161Issue of shares 2,976 2,323 3,965Purchase of shares - (4,467) (4,467)Return of cash (2,451) - (40,607)(Investment)/amortisation of investment in own (246) (3,945) 3,213shares _____ _____ _____ 182,003 212,072 180,265Total recognised income and expense 18,317 12,462 62,257 _____ _____ _____ 200,320 224,534 242,522Dividends 19 (1,831) (2,524) (60,798) _____ _____ _____Closing equity shareholders' funds 198,489 222,010 181,724 _____ _____ _____ 23. Net assets per share Number of p.p.s. Change since Shares 31.03.2005 £000 000's + % Basic 198,224 88,224 225 6.4Unexercised share options 3,949 4,155 _____ _____ _____ _____Diluted 202,173 92,379 219 8.7 Adjustment for: - Deferred tax on capital allowances 1,417 - Deferred tax on chargeable gains 9,644 - Fair value of financial instruments 576 _____ _____ _____ _____Adjusted diluted net asset value 213,810 92,379 231 4.8 _____ _____ _____ _____ 24. Net operating profit before net finance costs Half Year To Restated Restated 30 September Half Year To Year To 2005 30 September 31 March £000 2004 2005 £000 £000 Operating profit 19,263 10,821 70,379Share of operating profit of joint ventures (324) (1,934) (2,699)Gain on investment properties (7,245) (695) (44,204) _____ _____ _____Net operating profit before net finance costs 11,694 8,192 23,426 _____ _____ _____ This information is provided by RNS The company news service from the London Stock Exchange