30 Sep 2009 07:00
30 September 2009
Hansteen Holdings PLC
('Hansteen', 'the Company', 'the Group')
Half Year Results
Hansteen Holdings PLC (AIM: HSTN), the pan European property investment company, announces Half Year Results for the six months ended 30 June 2009.
Financials
Normalised profit increased by 50% to £8.7 million (HY08: £5.7 million)*
Net Asset Value down 16% to 107 pence per share (31 December 2008: 128 pence)**
Portfolio €496 million yielding 8.7% compared with 3.3% cost of borrowing
Annualised net rental income of €43.1 million (HY08: €41.3 million)
Corporate Developments after 30 June 2009
£200 million new equity raised
Launch of £90 million UK Industrial Property Unit Trust
Move to the Official List expected on 6 October 2009
Announcement of intention to become a REIT
Adjusted NAV** post issue of new ordinary shares 87 pence per share
Net debt to value 7%***
Jamie Hambro, Chairman of Hansteen commented: "The outlook for all the European economies, including the UK, is still uncertain but there is some cause for believing further downside should be limited. The occupational market will doubtless continue to be very challenging but your Board believes that high yielding industrial property with low capital values and a broad spread of tenants is a resilient and defensive investment medium. The high income returns from the portfolio will provide a beneficial backdrop as the Group deploys the new capital".
For further information:
| Morgan Jones/Ian Watson Hansteen Holdings plc Tel: 020 7016 8820 | David Davies/Matt Goode KBC Peel Hunt Tel: 020 7418 8900 | Jeremy Carey/Gemma Bradley Tavistock Communications Tel: 020 7920 3150 |
*Normalised profit comprises pre-tax profit excluding gains and losses on investment properties, foreign currency and interest rate derivatives hedge valuations. (Note 6)
**Diluted EPRA basis (Note 7 and 8)
*** Net debt at 30 June 2009 adjusted for net cash from £200m new equity raised
Chairman's Statement
During 2009 Hansteen has focused on three key objectives; first, to maintain the strong and secure financial position of the Group; secondly, to grow the normalised profits; and thirdly, to position the business for growth. Despite a difficult economic environment we are able to report solid results and considerable success in meeting these objectives.
Results
Normalised profits for the six months to 30 June 2009 were £8.7 million compared with £5.7 million in the first half of 2008. This is the result of a 50% increase in the income surplus generated by the underlying business. Under IFRS rules, however, Hansteen shows a £9.7 million accounting loss principally as a result of the decline in the value of the Group's investment properties and the weakening of the Euro during the period.
The decline in the value of Hansteen's property portfolio meant that net asset value per share measured on a diluted EPRA basis as at 30 June 2009 fell by 16% to 107 pence, compared to 128 pence and on an IFRS basis fell by 16% to 103 pence compared to 119 pence at 31 December 2008. Property values in Continental Europe may continue to fall for the rest of the year but we believe that this would be caused by the limited number of comparable transactions and scarcity of credit rather than a fundamental change in values. The valuation at 30 June 2009 reflected a yield of 8.7% compared to the Group's average cost of borrowings including margin, at the same date of 3.3%. Historically, there has always been a closer correlation between the total cost of borrowing and industrial property yields and the Board believes that when the market normalises that relationship will return.
Since 30 June, the Group has announced a substantial equity capital raising and a move from AIM to the Official List, described in more detail below. On an adjusted basis, including the new capital, the diluted EPRA Net Asset Value per share would be 87 pence as at 30 June 2009.
As in 2008, the Board paid a fully covered dividend of 3.2 pence per share in May 2009, reflecting the Directors' belief in the ongoing strength of the business.
Property Portfolio
At 30 June 2009, the Group's portfolio comprised 954,000 sqm of property with a value of €496 million. The Group started the year with 134,000 sqm of vacant property and an annualised rent roll from the let property of €42.9 million. At the half year, occupancy slipped 2% increasing vacancy to 142,821 sqm, but the annualised rent roll from let properties increased to €43.1 million. This was partly due to indexed rents and partly due to the sale of one property in Germany and a second in the Netherlands at an 8 % yield and the purchase of two properties in Germany at a blended yield of 14 %. Hansteen's primary focus is on retaining occupancy and rental income as far as possible. The Board expects the occupational market in Continental Europe to be very challenging for some time to come but believe that the Group should be able to outperform its peers in terms of attracting and retaining occupiers.
Set out below is a schedule of property on a country-by-country basis.
| No. Properties | Area sqm | Rent | Valuation | Yield | |||
| Euros €m | Sterling £m | Euros €m | Sterling £m | ||||
| Germany | 51 | 446,285 | 20.0 | 17.1 | 226.8 | 193.2 | 8.9% |
| Holland | 33 | 370,168 | 16.3 | 13.9 | 192.9 | 164.3 | 8.5% |
| Belgium | 13 | 49,973 | 3.9 | 3.3 | 44.2 | 37.7 | 8.7% |
| France | 4 | 79,042 | 2.4 | 2.0 | 22.7 | 19.3 | 10.5% |
| Other Assets | 5 | 8,909 | 0.5 | 0.4 | 9.7 | 8.3 | 5.0% |
| Total | 106 | 954,377 | 43.1 | 36.7 | 496.3 | 422.8 | 8.7% |
Hedging
Of the €283 million of borrowings which Hansteen currently has, €150 million is capped at an average rate 4.7% and €100 million is fixed at an average rate of 4.3%. The substantial element of caps means that the Group has benefited to a large extent from the very low interest rates currently prevailing.
The Group is currently unhedged as to currency. This means that with regard to the element of Hansteen's capital invested in Euro denominated assets the net asset value of the Group will fluctuate as the relationship between Sterling and the Euro changes.
New Equity
In 2008 and 2009 values in the UK property market fell considerably as companies and institutions that had over-borrowed in the boom period, saw the value of their properties fall. This has created an opportunity for Hansteen to invest in the UK market at prices which represent fundamentally good value.
On 9 July 2009 Hansteen raised an additional £194.6 million net of expenses through the issue of 267,768,451 new shares. This provides the Group with the financial firepower to benefit from depressed prices. The monies were raised at a narrow discount to the share price and to the Net Asset Value.
During the period, Hansteen also launched the Hansteen UK Industrial Property Unit Trust ('HIPUT'), a fund of £90 million of equity of which £30 million is provided by Hansteen and the remainder from five institutional investors. HIPUT will be prudently geared to a maximum of 50% loan to value giving a total fund size of £180 million and will only buy industrial properties with a maximum lot size of £15 million and, until fully invested, will be Hansteen's dedicated vehicle for such purchases. As asset manager, as well as substantial investor, Hansteen will receive an ongoing management fee, a performance fee, and a return on its investment.
The result of the Company's fundraising has been to reduce Net Debt to Value to below 10%. Under reasonable assumptions for new borrowing, including HIPUT, we have the ability to invest in the order of £500 million at a time when the market in the UK and Europe is at or near to a low point in the property cycle.
Move to the main market and adoption of REIT status
On 7 September 2009 Hansteen announced its intention to move from AIM to the Official List subject to receiving the necessary regulatory approvals. This move reflects the growing size and maturity of the business and the Board's belief that the Official List will be a more appropriate platform for continued growth. The move is expected to increase the Group's profile, improve the liquidity of its shares, and attract a wider range of potential investors. It is expected that Hansteen will publish a Prospectus shortly and that admission to the Official List will occur on 6 October 2009.
The move will also enable Hansteen to convert to a REIT which the Board intends to do as soon as possible after the shares are admitted to the Official List. The proposed conversion to a REIT will be a change in Hansteen's tax status which will have tax consequences for Hansteen and its shareholders. The change required certain changes to the Company's Articles of Association which were approved by Shareholders in a General Meeting held on 25 September 2009.
The cost of moving to the Official List and becoming a REIT is estimated to be approximately £4.5 million, which is primarily the 2% entry tax charge, payable on the market value of properties subject to UK tax at the time of conversion to a REIT. The benefits will be that the Group will not pay any corporation tax on its UK investments as well as saving UK tax paid on its European investments. The Board believes that a REIT will be the most efficient structure for Hansteen Shareholders.
Outlook
In addition to its existing conservatively financed and income generative portfolio Hansteen now has very substantial capital available to take advantage of the outstanding opportunities to which the current downturn will undoubtedly give rise. One such opportunity is Warner Estate Holdings Plc, the Company which acquired Ashtenne Holdings Plc the previous Company founded and managed by the Hansteen executive directors. Hansteen announced on 17 August 2009 that it acquired a strategic stake of approx 18.5% in Warner in exchange for the issue to the vendors of Hansteen shares to the value of £2.8 million.
The outlook for all the European economies, including the UK, is still uncertain but there is some cause for believing further downside should be limited. The occupational market will doubtless continue to be very challenging but your Board believes that high yielding industrial property with low capital values and a broad spread of tenants is a resilient and defensive investment medium. The high income returns from the portfolio will provide a beneficial backdrop as the Group deploys the new capital.
Jamie Hambro
Chairman
30 September 2009
HANSTEEN HOLDINGS PLC
Condensed consolidated income statement
for the six months ended 30 June 2009
| Year ended 31 December 2008 £'000 Audited | Note | Six months ended 30 June 2009 £'000 Unaudited | Six months ended 30 June 2008 £'000 Unaudited | |
| Continuing operations | ||||
| 34,884 | Revenue | 4 | 19,809 | 16,150 |
| (8,174) | Cost of sales | (2,979) | (2,321) | |
| 26,710 | Gross profit | 16,830 | 13,829 | |
| (3,934) | Administrative expenses | (3,358) | (3,080) | |
| 22,776 | Operating profit before gains on investment properties | 13,472 | 10,749 | |
| (41,655) | (Losses)/gains on investment properties | (16,434) | 5,094 | |
| 161 | Gain on sale of subsidiary | - | - | |
| (18,718) | Operating (loss)/profit | (2,962) | 15,843 | |
| (45,006) | Gains/(losses) on forward currency contracts | 5,713 | (16,165) | |
| 2,111 | Finance income | 477 | 750 | |
| (13,050) | Finance costs | (5,242) | (5,809) | |
| (4,579) | Changes in fair value of interest rate derivatives | (1,189) | 2,863 | |
| 18,299 | Foreign exchange (losses)/gains | (6,486) | 936 | |
| (60,943) | Loss before tax | (9,689) | (1,582) | |
| 1,388 | Tax credit/(charge) | 5 | 9,094 | (1,602) |
| (59,555) | Loss for the period | (595) | (3,184) | |
| Attributable to: | ||||
| (59,571) | Owners of the parent | (444) | (3,256) | |
| 16 | Non-controlling interests | (151) | 72 | |
| (59,555) | Loss for the period | (595) | (3,184) | |
| Loss per share | ||||
| (33.4)p | Basic | (0.2)p | (1.8)p | |
| (33.4)p | Diluted | (0.2)p | (1.8)p |
HANSTEEN HOLDINGS PLC
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2009
| Year ended 31 December 2008 £'000 Audited | Six months ended 30 June 2009 £'000 Unaudited | Six months ended 30 June 2008 £'000 Unaudited | |
| (59,555) | Loss for the period | (595) | (3,184) |
| Other comprehensive income: | |||
| 45,855 | Exchange differences arising on translation of foreign operations | (23,300) | 17,293 |
| 211 | Translation differences recognised on sale of subsidiary | - | - |
| 1,275 | Income tax relating to components of other comprehensive income | - | (847) |
| 47,341 | Total other comprehensive income for the period (net of income tax) | (23,300) | 16,446 |
| (12,214) | Total comprehensive (expense)/income for the period | (23,895) | 13,262 |
| Total comprehensive (expense)/income attributable to: | |||
| (12,375) | Owners of the parent | (23,653) | 13,165 |
| 161 | Non-controlling interests | (242) | 97 |
| (12,214) | (23,895) | 13,262 |
HANSTEEN HOLDINGS PLC
Condensed consolidated balance sheet
as at 30 June 2009
| 31 December 2008 £'000 Audited | Note | 30 June 2009 £'000 Unaudited | 30 June 2008 £'000 Unaudited | |
| Non-current assets | ||||
| 2,241 | Goodwill | 2,241 | 2,252 | |
| 32 | Property, plant and equipment | 27 | 38 | |
| 492,357 | Investment property | 419,991 | 439,695 | |
| 273 | Derivative financial instruments | 208 | 3,718 | |
| 494,903 | 422,467 | 445,703 | ||
| Current assets | ||||
| 2,750 | Trading properties | 2,844 | 5,353 | |
| 5,831 | Trade and other receivables | 9,231 | 4,032 | |
| 80,240 | Cash and cash equivalents | 62,705 | 49,025 | |
| 13,747 | Derivative financial instruments | - | - | |
| 102,568 | 74,780 | 58,410 | ||
| 597,471 | Total assets | 497,247 | 504,113 | |
| Current Liabilities | ||||
| (9,919) | Trade and other payables | (8,858) | (7,534) | |
| (4,907) | Current tax liabilities | (752) | (5,129) | |
| (926) | Borrowings | (4,203) | (781) | |
| (372) | Obligations under finance leases | (328) | (348) | |
| (68,407) | Derivative financial instruments | (49,635) | - | |
| (84,531) | (63,776) | (13,792) | ||
| Non-current liabilities | ||||
| (280,318) | Borrowings | (235,235) | (205,263) | |
| (4,071) | Obligations under finance leases | (3,513) | (4,290) | |
| (4,509) | Derivative financial instruments | (4,559) | (25,874) | |
| (10,678) | Deferred tax liabilities | (6,389) | (15,411) | |
| (299,576) | (249,696) | (250,838) | ||
| (384,107) | Total liabilities | (313,472) | (264,630) | |
|
| ||||
| 213,364 | Net assets | 183,775 | 239,483 | |
| Equity | ||||
| 17,843 | Share capital | 17,843 | 17,843 | |
| 114,312 | Share premium account | 114,312 | 114,312 | |
| 60,483 | Translation reserves | 37,274 | 29,708 | |
| 19,907 | Retained earnings | 13,762 | 76,957 | |
| 212,545 | Equity shareholders' funds | 183,191 | 238,820 | |
| 819 | Equity minority interests | 584 | 663 | |
| 213,364 | Total equity | 183,775 | 239,843 | |
| 119.1p | Diluted net asset value per share | 7 | 102.5p | 133.8p |
| 127.6p | Diluted EPRA net asset value per share | 7 | 107.3p | 144.8p |
HANSTEEN HOLDINGS PLC
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2009
| Six month period to 30 June 2009 Unaudited | |||||||
| Share capital £'000 | Share premium £'000 | Translation reserves £'000 | Retained earnings £'000 | Total £'000 | Non-controlling interest £'000 | Total £'000 | |
| Balance at 1 January 2009 | 17,843 | 114,312 | 60,483 | 19,907 | 212,545 | 819 | 213,364 |
| Changes in equity for the six months ended 30 June 2009: | |||||||
| Dividends | - | - | - | (5,710) | (5,710) | - | (5,710) |
| Share-based payments | - | - | - | 9 | 9 | - | 9 |
| Total comprehensive income for the period | - | - | (23,209) | (444) | (23,653) | (242) | (23,895) |
| Capital invested by non-controlling interests | - | - | - | - | - | 7 | 7 |
| Balance at 30 June 2009 | 17,843 | 114,312 | 37,274 | 13,762 | 183,191 | 584 | 183,775 |
| Six month period to 30 June 2008 Unaudited | |||||||
| Share capital £'000 | Share premium £'000 | Translation reserves £'000 | Retained earnings £'000 | Total £'000 | Non-controlling interest £'000 | Total £'000 | |
| Balance at 1 January 2008 | 17,843 | 174,312 | 13,287 | 25,772 | 231,214 | 179 | 231,393 |
| Changes in equity for the six months ended 30 June 2008: | |||||||
| Reduction of share premium account | - | (60,000) | - | 60,000 | - | - | - |
| Costs of reduction of share premium account | - | - | - | (22) | (22) | - | (22) |
|
| |||||||
| Dividends | - | - | - | (5,710) | (5,710) | - | (5,710) |
| Share-based payments | - | - | - | 173 | 173 | - | 173 |
| Total comprehensive income for the period | - | - | 16,421 | (3,256) | 13,165 | 97 | 13,262 |
| Capital invested by non-controlling interests | - | - | - | - | - | 387 | 387 |
| Balance at 30 June 2008 | 17,843 | 114,312 | 29,708 | 76,957 | 238,820 | 663 | 239,483 |
HANSTEEN HOLDINGS PLC
Condensed consolidated cash flow statement
for the six months ended 30 June 2009
| Year ended 31 December 2008 £'000 Audited | Note | Six months ended 30 June 2009 £'000 Unaudited | Six months ended 30 June 2008 £'000 Unaudited | |
| 17,925 | Net cash inflow from operating activities | 9 | 7,956 | 6,050 |
| 2,111 | Interest received | 477 | 749 | |
| (25) | Additions to property, plant and equipment | (5) | (19) | |
| (30,461) | Additions to investment properties | (7,673) | (14,483) | |
| 22,659 | Proceeds from sale of investment properties | 5,686 | 18,344 | |
| 531 | Disposal of subsidiaries | - | - | |
| (5,185) | Net cash (used in)/from investing activities | (1,515) | 4,591 | |
| (5,710) | Dividends paid | (5,710) | (5,710) | |
| (22) | Costs of reduction of share premium account | - | (22) | |
| (138) | Repayments of obligations under finance leases | (77) | (64) | |
| 165,839 | New bank loans raised (net of expenses) | - | 130,476 | |
| (114,566) | Bank loans repaid (net of expenses) | (9,182) | (105,432) | |
| (2,041) | Decrease in bank overdrafts | - | (1,925) | |
| (464) | Additions to derivative financial instruments | - | (444) | |
| 493 | Capital contribution from minority shareholders | 7 | 387 | |
| (14) | Dividend paid to minority shareholders | - | - | |
| 43,377 | Net cash (used in)/from financing activities | (14,962) | 17,266 | |
| 56,117 | Net (decrease)/increase in cash and cash equivalents | (8,521) | 27,907 | |
| 19,562 | Cash and cash equivalents at beginning of period | 80,240 | 19,562 | |
| 4,561 | Effect of foreign exchange rate changes | (9,014) | 1,556 | |
| 80,240 | Cash and cash equivalents at end of period | 62,705 | 49,025 |
HANSTEEN HOLDINGS PLC
Notes to the condensed set of financial statements for the six months ended 30 June 2009
1. General information
Hansteen Holdings plc is incorporated in the United Kingdom under the Companies Act 1985. The address of the registered office is 1 Berkeley Street, London W1J 8DJ.
The Group's principal activities are those of a property group investing mainly in industrial properties in continental Europe.
2. Basis of preparation
The annual financial statements of Hansteen Holdings PLC are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim report has been prepared in accordance with International accounting standard 34 'Interim Financial Reporting', as adopted by the European Union.
The financial information for the year ended 31 December 2008 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. This information was derived from the statutory accounts for the year ended 31 December 2008, a copy of which has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis of matter and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985.
The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements, with the exception that the Group has adopted IFRS8 'Operating Segments and the amendments to IAS 1 'Presentation of Financial statements'
The interim report was approved by the Board on 29 September 2009.
3. Going concern
The group has considerable financial resources following the subsequent fund raising in July 2009. As a consequence, the directors believe that the group is well placed to manage its business risks successfully despite the potential impact of the current uncertain economic outlook on the Group's operating cash flows and the possibility of tenancy failures and increased vacancies. After consideration of the Group's forecast cash flows and covenant compliance, including the impact of potential further reductions in property valuations, rental income and increases in interest rates, the directors have a reasonable expectation that the group will continue to have adequate resources to continue in operational existence for the foreseeable future and therefore continue to adopt the going concern basis in preparing these condensed financial statements.
4. Operating segments
The Group has adopted IFRS 8 Operating Segments with effect from 1 January 2009. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Joint Chief Executives to allocate resources to the segments and to assess their performance. In contrast, the predecessor Standard (IAS 14 Segment Reporting) required the Group to identify two sets of segments (business and geographical), using a risks and rewards approach, with the Group's system of internal financial reporting to key management personnel serving only as the starting point for the identification of such segments. As a result, following the adoption of IFRS 8, the identification of the Group's reportable segments has changed.
In prior periods, segment information reported externally was analysed primarily on the basis of the classification of its properties based on whether they were held for investment or trading and secondly on the basis of geographic location. However, information reported to the Group's Joint Chief Executives for the purposes of resource allocation and assessment of segment performance is more specifically focused on the Group's level of investment in property assets and the related net rental income according to geographic location. The Group's reportable segments under IFRS 8 are therefore determined by geographic location.
Information regarding the Group's operating segments is reported below. Amounts reported for the prior period have been restated to conform to the requirements of IFRS 8.
Segment revenues and results
The following is an analysis of the Group's revenue and results by reportable segment:
| Six month period ended 30 June 2009 Unaudited | Six month period ended 30 June 2008 Unaudited | ||||
| Revenue £'000 | Result £'000 | Revenue £'000 | Result £'000 | ||
| Belgium | 1,722 | 1,565 | 1,628 | 1,540 | |
| France | 1,053 | 1,027 | 855 | 825 | |
| Germany | 9,437 | 7,208 | 7,546 | 5,985 | |
| Netherlands | 7,597 | 7,062 | 6,121 | 5,509 | |
| UK | - | (32) | - | (30) | |
| 19,809 | 16,830 | 16,150 | 13,829 | ||
| Administrative expenses | (3,358) | (3,080) | |||
| Operating profit before losses and gains on investment properties | 13,472 | 10,749 | |||
| (Losses)/gains on investment properties | (16,434) | 5,094 | |||
| Operating (loss)/profit | (2,962) | 15,843 | |||
| Net finance costs | (6,727) | (17,425) | |||
| Loss before tax | (9,689) | (1,582) | |||
Segment assets
The following is an analysis of the Group's assets by reportable segment:
| 30 June 2009 Unaudited | |||||
| Investment properties £'000 | Trading properties £'000 | Total properties £'000 | Other assets £'000 | Total assets £'000 | |
| Belgium | 37,668 | - | 37,668 | 5,037 | 42,705 |
| France | 19,366 | - | 19,366 | 661 | 20,027 |
| Germany | 198,607 | - | 198,607 | 15,554 | 214,161 |
| Netherlands | 164,350 | - | 164,350 | 5,914 | 170,264 |
| UK | - | 2,844 | 2,844 | 24 | 2,868 |
| 419,991 | 2,844 | 422,835 | 27,190 | 450,025 | |
| Corporate and unallocated assets | 47,222 | ||||
| Entity total | 497,247 | ||||
| 31 December 2008 Audited | |||||
| Investment properties £'000 | Trading properties £'000 | Total properties £'000 | Other assets £'000 | Total assets £'000 | |
| Belgium | 46,074 | - | 46,074 | 5,072 | 51,146 |
| France | 23,442 | - | 23,442 | 1,157 | 24,599 |
| Germany | 229,392 | - | 229,392 | 19,522 | 248,914 |
| Netherlands | 193,449 | - | 193,449 | 6,614 | 200,063 |
| UK | - | 2,750 | 2,750 | 58 | 2,808 |
| 492,357 | 2,750 | 495,107 | 34,243 | 527,530 | |
| Corporate and unallocated assets | 69,940 | ||||
| Entity total | 597,471 | ||||
5. Tax on profit on ordinary activities
| Year ended 31 December 2008 £'000 Audited | Six months ended 30 June 2009 £'000 Unaudited | Six months ended 30 June 2008 £'000 Unaudited | ||
| (8,073) | UK current tax | 7,835 | (871) | |
| (932) | Foreign current tax | (541) | (996) | |
| (7,141) | Total current tax | 7,294 | (1,867) | |
| 8,529 | Deferred tax | 1,800 | 265 | |
| 1,388 | Tax credit/(charge) | 9,094 | (1,602) |
6. Normalised Profit
In addition to the IFRS measures, the Group has presented a normalised profit measure as a supplementary measure of its performance. Normalised Profit is stated before gains and losses on investment properties, gains and losses on forward currency contracts and foreign exchange and changes in fair value of interest rate derivatives, as follows:
| Year ended 31 December 2008 £'000 Audited | Six months ended 30 June 2009 £'000 Unaudited | Six months ended 30 June 2008 £'000 Unaudited | ||
| 34,884 | Revenue | 19,809 | 16,150 | |
| (8,174) | Cost of sales | (2,979) | (2,321) | |
| (3,934) | Administrative expenses | (3,358) | (3,080) | |
| 2,111 | Finance income | 477 | 750 | |
| (13,050) | Finance costs | (5,242) | (5,809) | |
| 11,837 | Normalised Profit | 8,707 | 5,690 |
7. Net asset value per share
The calculations for net asset value ("NAV") per share are shown in the table below.
The European Public Real Estate Association ('EPRA') has issued recommended bases for the calculation of certain per share information and these are included in the following tables:
| 31 December 2008 Audited | 30 June 2009 Unaudited | 30 June 2008 Unaudited | |||||||
| Equity share- holders' funds £'000 | Number of shares 000's | Net asset value per share p | Equity share- holders' funds £'000 | Number of shares 000's | Net asset value per share p | Equity share- holders' funds £'000 | Number of shares 000's | Net asset value per share p | |
| 212,545 | 178,435 | 119.1 | Basic NAV | 183,191 | 178,435 | 102.7 | 238,820 | 178,435 | 133.8 |
| - | - | n/a | Unexercised share options | 604 | 850 | (0.2) | - | - | - |
| 212,545 | 178,435 | 119.1 | Diluted NAV | 183,795 | 179,285 | 102.5 | 238,820 | 178,435 | 133.8 |
| Adjustments: | |||||||||
| (2,241) | Goodwill | (2,241) | (2,252) | ||||||
| - | Fair value of trading properties | - | 647 | ||||||
| 4,180 | Fair value of interest rate derivatives | 4,983 | - | ||||||
| 13,193 | Deferred tax | 5,841 | 21,224 | ||||||
| 227,677 | 127.6 | Diluted EPRA NAV | 192,378 | 107.3 | 258,439 | 144.8 | |||
8. Adjusted net asset value per share
The calculations for adjusted diluted EPRA net asset value per share are shown in the table below:
| Equity share- holders' funds £'000 | Number of shares 000's | Net asset value per share p | |
| Diluted EPRA NAV at 30 June 2009 (see note 6) | 192,378 | 179,285 | 107.3 |
| Shares issued for cash on 9 July 2009 (net of expenses) | 194,600 | 267,769 | |
| Shares issued in exchange for shares in Warner Estates Holdings plc On 20 August 2009 | 2,868 | 3,296 | |
| Adjusted diluted EPRA NAV | 389,846 | 450,350 | 86.6 |
9. Notes to the cash flow statement
| Year ended 31 December 2008 £'000 Audited | Six months ended 30 June 2009 £'000 Unaudited | Six months ended 30 June 2008 £'000 Unaudited | ||
| (59,555) | Loss for the period | (595) | (3,184) | |
| Adjustments for: | ||||
| (562) | Share-based employee remuneration | 9 | 173 | |
| 24 | Depreciation of property, plant and equipment | 10 | 11 | |
| 2,802 | Impairment of trading properties | - | - | |
| (41,655) | Losses/(gains) on investment properties | 16,434 | (5,094) | |
| (161) | Gain on sale of subsidiary | - | - | |
| 45,006 | (Gains)/losses on forward currency contracts | (5,713) | 16,165 | |
| 6,678 | Net finance income | 12,564 | 1,769 | |
| (1,388) | Tax | (9,094) | 1,602 | |
| 34,499 | Operating cash flows before movements in working capital | 13,615 | 11,442 | |
| (292) | Increase in trading properties | (94) | (93) | |
| (305) | Decrease/(increase) in receivables | 290 | (61) | |
| 764 | Increase in payables | 62 | 154 | |
| 34,666 | Cash generated by/(used in) operations | 13,873 | 11,442 | |
| (4,339) | Income taxes paid | (1,164) | (83) | |
| (12,402) | Interest paid | (4,753) | (5,309) | |
| 17,925 | Net cash inflow from operating activities | 7,956 | 6,050 |
10. Events after the balance sheet date
On 9 July 2009, an ordinary resolution passed by the Shareholders approved the increase in the Company's share capital from £25,000,000 to £60,000,000 by the creation of 350,000,000 new Ordinary Shares of ten pence each in the share capital of the Company ranking pari passu for all purposes with the existing Ordinary Shares of ten pence each in the share capital of the Company.
On 10 July 2009 pursuant to a Placing and Open Offer the Company raised gross proceeds of £200.8 million (approximately £194.6 million net of expenses) through the issue of 267,768,451 new Ordinary Shares at a price of 75 pence per new Ordinary Share. As a result, the Company's issued share capital was increased from 178,435,117 Ordinary Shares to 446,203,568 Ordinary Shares.
On 20 August 2009, Hansteen issued 3,296,347 new Ordinary Shares in consideration for the acquisition of 10,377,389 ordinary shares in the capital of Warner Estate Holdings plc which were acquired from Trefick Limited, representing a strategic stake of approximately 18.5 per cent. As a result, the Company's issued share capital was increased from 446,203,568 Ordinary Shares to 449,499,915 Ordinary Shares.
The Company announced on 3 August 2009 that it had committed £30 million in launching Hansteen UK Industrial Property Unit Trust (the "Fund") which will be seeking to invest up to £180 million in UK industrial property. The Fund is managed by a wholly owned subsidiary of the Company, Hansteen Limited, and is the Group's vehicle for investing in UK industrial property with a value of £15 million or less, or portfolios under £30 million. The Fund, which has a life of 6 years, is focussed on both high income generation as well as growth in net assets. It is targeting annual returns, after fees and expenses, of 12-15% with net income to be distributed quarterly. As property adviser to the Fund, the Group will receive an asset management fee and a performance based fee equal to 20% of returns above a hurdle of 10% per annum rising to 30% above a hurdle of 15% per annum. Of the Company's total commitment of £30 million, the sum of £15 million was drawn down by the Fund on 14 August 2009 and the remaining £15 million will be drawn down on 14 January 2010.
On 28 September 2009 the Group repaid €110 million of its revolving credit facility from its cash balances.
11. The Interim Report and condensed set of financial statements will be posted to shareholders and will be available from the Company's Registered Office at 1 Berkeley Street, London W1J 8DJ.