IMPT.L Regulatory News (IMPT)

27 Sep 2006 17:34

Close High Income Properties PLC27 September 2006 Close High Income Properties PLC INTERIM REPORT AND FINANCIAL STATEMENTS For the six month period ended 30 June 2006 HIGHLIGHTS Published Net Asset Value per share has increased for the period on the OrdinaryShares and "C" Ordinary Shares by 6.15% and 7.42% respectively. Successful launch of new 'D' Ordinary Share which had raised in excess of £26.2million at the date of the final allotment of shares on 9 August 2006. Dividends for the period equivalent to 7.75 pence per annum per Ordinary Share,7.25 pence per annum per "C" Ordinary Share and 6.5 pence per "D" Ordinary Sharemaintained. Total return to Ordinary Share holders of 62.6% since launch on 25 October 2002and total return to "C" Ordinary Share holders of 22.7% since launch on 6November 2003. DIRECTORS' REPORT For the six month period from 1 January to the 30 June 2006 Introduction The directors present herewith the Report and Financial Statements of theCompany and its subsidiaries (together "the Group") for the six months ended 30June 2006. In the period the company successfully raised £24.57million for an issue of 'D'Ordinary Shares. The Company The Company is an Isle of Man closed-ended investment company. The Company wasincorporated on 10 June 2002 and its principal activity is that of investment incommercial property. The directors confirm that: • no one property represents more than 15% of the gross assets of the Group; • income receivable from any one tenant, or tenants within the same group, in any one financial year does not exceed 20% of the total rental income of the Group; • at least 90% by value of properties are held in the form of freehold or long leasehold; and • the proportion of the Group's property portfolio which is unoccupied or not producing income or which is in the course of substantial redevelopment or refurbishment does not exceed 25% of the value of the portfolio. Results and dividends The consolidated profit after taxation of the Group for the period ended 30 June2006 amounted to £7,659,799 (30 June 2005: £10,218,957). Interim dividends of3.875 pence per Ordinary Share, 3.625 pence per "C" Ordinary Share and up to2.17 pence per "D" Ordinary Share have been declared and paid. The Company haspaid the quarterly dividends on all three classes of shares equal to theoriginal annual targets of 7.75 pence per Ordinary Share, 7.25 pence per "C"Ordinary Share and 6.5 pence per "D" Ordinary Share. As at 30 June 2006 the net asset value of the Ordinary Shares of the Company was£46.19 million; this is equivalent to 139.57 pence per Ordinary Share (2005;124.25p). The equivalent net asset value for "C" Ordinary Shares was £54.27million or 108.25 pence per "C" Ordinary Share (2005: 96.79p). The net assetvalue for "D" Ordinary Shares was £22.19 million or 90.34 pence per "D" OrdinaryShare. Company Secretary Philip Scales resigned as Company Secretary on 4 January 2006 and was succeededby David Parnell. David Parnell resigned as Company Secretary on 24 April 2006and was succeeded by Martin Katz. Going concern The directors confirm that the Group continues to be a going concern. Auditors In accordance with section 12(2) of the Companies Act 1982, Ernst & Young LLChave indicated their willingness to continue in office. By order of the board Jonathan Clague Chairman 25 September 2006 INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF CLOSE HIGH INCOME PROPERTIESPLC For the six month period from 1 January to the 30 June 2006 Introduction We have been instructed by the Company to review the financial information setout on pages 9 to 28 and we have read the other information contained in theinterim report and considered whether it contains any apparent misstatements ormaterial inconsistencies within the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The Listing Rulesof the London Stock Exchange require that the accounting policies andpresentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accounts except where any changes, andthe reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board. A review consists principally of makingenquiries of management and applying analytical procedures to the financialinformation and underlying financial data and based thereon, assessing whetherthe accounting policies and presentation have been consistently appliedotherwise disclosed. A review excludes audit procedures such as tests ofcontrols and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance with AuditingStandards 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 June 2006. Ernst & Young LLC Chartered Accountants Isle of Man 26 September 2006 CONSOLIDATED INCOME STATEMENT For the six month period from 1 January to the 30 June 2006 (Audited) Notes 30 June 30 June 31 December 2006 2005 2005 £ £ £INCOMERental income from investment properties 7,095,510 6,015,416 12,275,758Other income 14,092 - - 7,109,602 6,015,416 12,275,758EXPENDITUREProperty investment adviser's fee (1,437,829) (1,108,493) (2,260,867)Property expenses (509,179) (525,860) (1,156,548)Goodwill amortisation 3 - (435,736) -Other expenses (184,310) (243,813) (421,811)Impairment of Goodwill - - (518,360) (2,131,318) (2,313,902) (4,357,586) Net operating profit for the period before 4,978,284 3,701,514 7,918,172finance costs Interest receivable 7,511 154,435 232,019Interest payable and similar charges (3,017,950) (2,277,982) (4,621,506) (3,010,439) (2,123,547) (4,389,487) Gains from investmentsRealised gain on disposal of investment 236,221 129,687 613,938propertiesUnrealised gain on revaluation of investment 5,455,733 8,564,254 13,180,846properties 5,691,954 8,693,941 13,794,784 Net profit from ordinary activities before 7,659,799 10,271,908 17,323,469taxation Taxation on profit of ordinary activities 4 - (52,951) (110,972) - (52,951) (110,972) Net profit from ordinary activities after 7,659,799 10,218,957 17,212,497taxation attributable to members Dividends - paid Ordinary 5 (1,282,350) (1,282,350) (2,564,699) C Ordinary 5 (1,817,420) (1,817,420) (3,634,839) D Ordinary 5 (30,003) - - (3,129,773) (3,099,770) (6,199,538) CONSOLIDATED BALANCE SHEET As at 30 June 2006 Notes 30 June 30 June 31 December 2006 2005 2005 £ £ £NON-CURRENT ASSETSFixed Investment properties 6 217,305,000 163,645,000 174,490,000 INTANGIBLE ASSETSGoodwill 3 - 82,625 - - 82,625 - CURRENT ASSETSTrade and other receivables 6,937,902 4,550,366 3,418,747Cash and cash equivalents 10,218,402 4,924,598 1,490,286 17,156,304 9,474,964 4,909,033 TOTAL ASSETS 234,461,304 173,202,589 179,399,033 NON-CURRENT LIABILITIESProvision for Incentive fees 7 2,155,735 1,088,752 1,537,378Bank loans 8 105,214,607 76,911,781 79,479,017 107,370,342 78,000,533 81,016,395 CURRENT LIABILITIESTrade and other payables 4,434,962 5,554,397 4,350,319 4,434,962 5,554,397 4,350,319 Total Liabilities 111,805,304 83,554,930 85,366,714 CAPITAL AND RESERVESShare capital - Ordinary 9 330,928 330,928 330,928 - C Ordinary 9 501,357 501,357 501,357 - D Ordinary 9 245,689 - -Share premium - Ordinary - 30,859,127 30,859,127 - C Ordinary - 46,751,511 46,751,511 - D Ordinary 22,890,938 - -Capital reserve - Ordinary 30,859,127 - - - C Ordinary 46,751,511 - -Revenue reserves 20,728,063 12,304,265 16,198,037Hedge reserves 348,387 (1,099,529) (608,641) 122,656,000 89,647,659 94,032,319 234,461,304 173,202,589 179,399,033 These financial statements were approved by the Board of Directors on 25September 2006 signed on its behalf by: J D Clague P P Scales CONSOLIDATED STATEMENT OF CASHFLOW For the six month period from 1 January to the 30 June 2006 (Audited) Notes 30 June 30 June 31 December 2006 2005 2005 £ £ £Cash flows from operating activitiesNet operating profit before financing 4,397,676 3,701,514 7,918,172Goodwill amortised/impaired 3 - 435,736 518,360Amortised borrowing costs 58,530 53,202 107,937(Increase)/Decrease in debtors (3,128,880) 90,946 1,517,625Increase/(Decrease) in creditors 587,210 (613,242) (747,577) Cash generated from operating activities 1,914,536 3,668,156 9,314,517 Interest received 7,511 154,435 232,019Interest paid (2,944,278) (2,278,029) (4,628,640)Taxation paid - - (299,306) Net Cash inflow from operations (1,022,231) 1,544,562 4,618,590 Cash flow from investing activitiesPayment for the purchase of properties (39,125,000) (5,985,000) (10,990,000)Proceeds from the sale of property 5,141,132 7,001,687 8,685,488Subsequent expenditure (1,949,701) (1,020,363) (3,443,321) Net cash outflow from investing activities (35,933,569) (3,676) (5,747,833) Cashflow from financingProceeds from the issue of "D" Ordinary Shares 24,568,948 - -Proceeds from the issue of "C" Ordinary Shares - 176,915 -Share issue costs paid (1,432,319) - -Equity dividends paid (3,129,773) (3,099,770) (6,199,538)Proceeds from long term borrowing 25,725,000 4,912,500 7,425,000Issue costs of long term borrowing 8 (47,940) (11,500) (11,500) Net cash inflow from financing activities 45,683,916 1,978,145 1,213,962 Net increase in cash 8,728,116 3,519,031 84,719 Cash at 1 January 1,490,286 1,405,567 1,405,567 Cash at 30 June/31 December 10,218,402 4,924,598 1,490,286 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six month period from 1 January to the 30 June 2006 Share Share Premium Capital Hedge Reserve Retained Total Capital Reserve Profit £ £ £ £ £ £ As at 1 January 2004 330,928 30,859,127 - 835,900 1,486,697 33,512,652 Net profit for the year - - - - 6,504,020 6,504,020 Dividends declared and - - - - (3,691,445) (3,691,445) paid Adjustment to include - - - - 885,806 885,806 leasehold property at fair value as at 31/12/ 03 Issue of "C" Ordinary 501,357 49,634,360 - - - 50,135,717 Shares Share issue costs - (2,882,849) - - - (2,882,849) Movement in unrealised - - - (1,004,541) - (1,004,541) gain on revaluation of interest rate swaps As at 31 December 2004 832,285 77,610,638 - (168,641) 5,185,078 83,459,360 Net profit for the year - - - - 17,212,497 17,212,497 Dividends declared and - - - - (6,199,538) (6,199,538) paid Movement in unrealised - - - (440,000) - (440,000) gains on revaluation of interest rate swaps As at 31 December 2005 832,285 77,610,638 - (608,641) 16,198,037 94,032,319 Cancellation of share - (77,610,638) 77,610,638 premium Net profit for the - - - - 7,659,799 7,659,799 period Dividends declared and - - - - (3,129,773) (3,129,773) paid Issue of "D" Ordinary 245,689 24,323,259 - - - 24,568,948 Shares Share issue costs - (1,432,321) - - - (1,432,321) Movement in unrealised - - - 957,028 - 957,028 gains on revaluation of interest rate swaps As at 30 June 2006 1,077,974 22,890,938 77,610,638 348,387 20,728,063 122,656,000 In accordance with the Articles of Association and by order of the High Court ofJustice of the Isle of Man Chancery Division pursuant to section 56 of theCompanies Act 1931, the share capital of the company was reduced by cancelling£77,610,638 of the amount standing to the credit of the share premium accountand re-designated as capital reserve, a reserve capable of distribution to themembers of the company. COMPANY BALANCE SHEET As at 30 June 2006 Notes 30 June 30 June 31 December 2006 2005 2005 £ £ £FIXED ASSETSFixed asset investments 10 18,403,629 15,137,449 14,828,451 18,403,629 15,137,449 14,828,451 CURRENT ASSETS Cash at bank 8,428,860 3,644,999 527,896Trade and other 92,326,349 63,594,468 66,608,783receivables 100,755,209 67,239,467 67,136,679 TOTAL ASSETS 119,158,838 82,376,916 81,965,130 CURRENT LIABILITIES Trade and other payables 120,213 979,755 131,216 120,213 979,755 131,216 CAPITAL AND RESERVESShare Capital - Ordinary 9 330,928 330,928 330,928 - C Ordinary 9 501,357 501,357 501,357 - D Ordinary 9 245,689 - -Share Premium - Ordinary - 30,859,127 30,859,127 - C Ordinary - 46,751,511 46,751,511 - D Ordinary 22,890,938 - -Capital reserve - Ordinary 30,859,127 - - - C Ordinary 46,751,511 - -Revenue reserves 17,459,075 2,954,238 3,390,991 119,038,625 81,397,161 81,833,914 119,158,838 82,376,916 81,965,130 This financial statement was approved by the Board of Directors on 22 September2006 and signed on its behalf by: J D Clague P P Scales ORDINARY SHARES CONSOLIDATED INCOME STATEMENT For the six month period from 1 January to the 30 June 2006 30 June 30 June 31 December 2006 2005 2005 £ £ £INCOMERental Income from investment properties 2,657,172 2,688,416 5,461,137 2,657,172 2,688,416 5,461,137EXPENDITUREProperty investment adviser's fee (897,645) (735,774) (1,495,362)Property expenses (315,331) (291,603) (507,524)Goodwill amortisation - (435,736) -Other expenses (108,834) (103,077) (208,847)Impairment of goodwill - - (518,360) (1,321,810) (1,566,190) (2,730,093) Net operating profit for the period before 1,335,362 1,122,226 2,731,044finance costs Interest receivable 272,405 138,439 215,895Interest payable and similar charges (1,133,112) (970,381) (1,947,748) (860,707) (831,942) (1,731,853) Gains from investmentsRealised gain on disposal of investment 74,998 - 125,801propertiesUnrealised gain on revaluation of investment 3,148,724 4,056,074 6,836,458properties 3,223,722 4,056,074 6,962,259 Net profit from ordinary activities before 3,698,377 4,346,358 7,961,450taxation Taxation on profit of ordinary activities - (52,951) (110,972) - (52,951) (110,972) Net profit from ordinary activities after 3,698,377 4,293,407 7,850,478taxation attributable to members Dividends - paid (1,282,350) (1,282,350) (2,564,699) Basic and diluted earnings per Ordinary Share 11.18 12.97 23.72(pence) ORDINARY SHARES CONSOLIDATED BALANCE SHEET As at 30 June 2006 30 June 30 June 31 December 2006 2005 2005 £ £ £NON-CURRENT ASSETSFixed Investment properties 79,950,000 74,335,000 76,805,000 79,950,000 74,335,000 76,805,000INTANGIBLE ASSETSGoodwill - 82,625 - - 82,625 - CURRENT ASSETSTrade and other receivables 1,852,985 1,955,958 1,667,190Cash and cash equivalents 3,512,029 789,454 1,222,053 5,365,014 2,745,412 2,889,243 Total Assets 85,315,014 77,163,037 79,694,243 NON-CURRENT LIABILITIESProvision for incentive fee 2,108,399 1,088,752 1,537,378Bank loans 35,298,984 32,986,047 33,018,282 37,407,383 34,074,799 34,555,660 CURRENT LIABILITIESTrade and other payables 1,719,067 1,969,364 1,626,854 1,719,067 1,969,364 1,626,854 Total liabilities 39,126,450 36,044,163 36,182,514 CAPITAL AND RESERVESShare capital 330,928 330,928 330,928Share premium - 30,859,127 30,859,127Capital reserves 30,859,127 - -Revenue reserves 14,512,339 9,821,592 12,096,312Hedge reserves 486,170 107,227 225,362 46,188,564 41,118,874 43,511,729 85,315,014 77,163,037 79,694,243 "C" ORDINARY SHARES CONSOLIDATED INCOME STATEMENT For the six month period from 1 January to the 30 June 2006 30 June 30 June 31 December 2006 2005 2005 INCOME £ £ £ Rental Income from investment properties 3,385,895 3,327,000 6,814,621 3,385,895 3,327,000 6,814,621EXPENDITUREProperty investment adviser's fee (459,542) (372,719) (765,505)Property expenses (99,530) (234,257) (649,025)Other expenses (54,976) (140,736) (212,963) (614,048) (747,712) (1,627,493) Net operating profit for the period before 2,771,847 2,579,288 5,187,128finance costs Interest receivable (72,896) 15,996 16,124Interest payable and similar charges (1,390,554) (1,307,601) (2,673,758) (1,463,450) (1,291,605) (2,657,634) Gains from investmentsRealised gain on disposal of investment 161,223 129,687 488,137propertiesUnrealised gain on investment properties 3,532,340 4,508,180 6,344,388 3,693,563 4,637,867 6,832,525 Net profit from ordinary activities before 5,001,960 5,925,550 9,362,019taxation Taxation on profit of ordinary activities - - - - - - Net profit from ordinary activities after 5,001,960 5,925,550 9,362,019taxation attributable to members Dividends - paid (1,817,420) (1,817,420) (3,634,839) Basic and diluted earnings per "C" Ordinary 9.98 11.82 18.67Share (pence) "C" ORDINARY SHARES CONSOLIDATED BALANCE SHEET As at 30 June 2006 30 June 30 June 31 December 2006 2005 2005 £ £ £NON-CURRENT ASSETSFixed Investment properties 97,435,000 89,310,000 97,685,000 97,435,000 89,310,000 97,685,000 CURRENT ASSETSTrade and other receivables 1,121,868 2,655,464 1,767,781Cash and cash equivalents 4,184,262 4,135,144 268,233 5,306,130 6,790,608 2,036,014 Total Assets 102,741,130 96,100,608 99,721,014 NON-CURRENT LIABILITIESProvision for incentive fee 47,336 - -Bank loans 46,483,235 43,925,734 46,460,735 46,530,571 43,925,734 46,460,735 CURRENT LIABILITIESTrade and other payables 1,938,678 3,646,089 2,739,691 1,938,678 3,646,089 2,739,691 Total liabilities 48,469,249 47,571,823 49,200,426 CAPITAL AND RESERVESShare capital 501,357 501,357 501,357Share premium - 46,751,511 46,751,511Capital reserve 46,751,511 - -Revenue reserves 7,286,263 2,482,673 4,101,723Hedge reserves (267,250) (1,206,756) (834,003) 54,271,881 48,528,785 50,520,588 102,741,130 96,100,608 99,721,014 "D" ORDINARY SHARES CONSOLIDATED INCOME STATEMENT For the six month period from 1 January to the 30 June 2006 30 June 2006INCOME £ Rental Income from investment properties 1,052,443Other income 14,092 1,066,535EXPENDITUREProperty investment adviser's fee (80,642)Property expenses (94,318)Other expenses (20,500) (195,460) Net operating profit for the period before 871,075finance costs Interest receivable 22,902Interest payable and similar charges (709,184) (686,282) Gains from investmentsUnrealised loss on investment properties (1,225,331) (1,225,331) Net profit from ordinary activities before (1,040,538)taxation Taxation on profit of ordinary activities - Net profit from ordinary activities after (1,040,538)taxation attributable to members Dividends - paid (30,003) Basic and diluted earnings per "D" Ordinary (4.24)Share (pence) "D" ORDINARY SHARES CONSOLIDATED BALANCE SHEET As at 30 June 2006 30 June 2006 £NON-CURRENT ASSETSFixed Investment properties 39,920,000 CURRENT ASSETSTrade and other receivables 4,179,374Cash and cash equivalents 2,522,111 6,701,485 Total Assets 46,621,485 NON-CURRENT LIABILITIESBank loans 23,432,388 CURRENT LIABILITIESTrade and other payables 993,542 993,542 Total liabilities 24,425,930 CAPITAL AND RESERVESShare capital 245,689Share premium 22,890,938Revenue reserves (1,070,539)Hedge reserves 129,467 22,195,555 46,621,485 This information is provided by RNS The company news service from the London Stock Exchange