Last checked at 27 Mar 2007 07:05
FOR IMMEDIATE RELEASE
27th March 2007 LONDON & ASSOCIATED PROPERTIES PLC: PRELIMINARY RESULTS FOR 12 MONTHS TO 31ST DECEMBER 2006 HIGHLIGHTS
London & Associated Properties PLC the fully listed UK shopping centre and central London property specialist, owns and manages ‚£301m of retail investments.
* Fully diluted net assets per share rose 15% to 133.5p under IFRS * Under UK GAAP NAV per share would have been 165.1p up 22% * Total value of directly owned portfolio rose 65% to ‚£192.8m * Overall portfolio including properties owned in joint venture and with associates now stands at ‚£301.5m * Pre-tax profits up to ‚£18.3m from ‚£17.9m
* 1.25p final dividend recommended - making a total of 1.85p for year up 7%
* Cash reserves anticipated to be ‚£25m following completion of recent sales
* Gearing at year end only 84.6%
"We go into 2007 with a number of successful deals already completed this yearand the financial capacity to carry out further substantial acquisitions anddevelopments. For this reason I look forward to the coming year withconsiderable confidence," Michael Heller, Chairman
Contact: London & Associated Properties PLC. Tel: 020 7415 5000
John Heller, Chief Executive
Robert Corry, Finance Director
Baron Phillips Associates Tel: 020 7920 3161
Baron Phillips27 March 2007Chairman's StatementI am pleased to report once again on a year of considerable progress for London& Associated Properties in 2006. During this year, we focused our portfoliofurther on properties in which we see opportunities for future growth inCentral London and the South East. We achieved this through the acquisition ofThe London Portfolio, a number of mainly retail properties in four areas in thecapital, and through the disposal of a number of properties, all in excess ofpreviously published valuations. We also maintained our successful record ofinvesting in and improving our existing properties, and our cash balancesreached record levels.As a result, I am pleased to report excellent levels of capital growth. Ourfully diluted net assets per share rose by 15% to 133.5p under IFRS, whileunder UK GAAP net assets per share rose by 22% to 165.1p. These numbers wouldhave been higher still had we not written off goodwill and costs associatedwith the acquisition of The London Portfolio of ‚£9.3m. The total value of ourdirectly owned portfolio of retail property has risen by 65% to ‚£192.8m, whilethe overall property portfolio, including the gross values of the properties ofjoint ventures and associates, now stands at ‚£301.5m. Our net assets are now ‚£101.9m under IFRS while under UK GAAP they are ‚£125.9m.As I reported last year, we embarked on an exciting development programme whichinvolved the creation of some 150,000 sq ft of new, state-of-the-art retailspace across our portfolio. These developments were all commenced with thesignificant majority of new space pre-let to substantial internationalretailers. During 2006, we spent ‚£17.2m on these developments which are now forthe most part completed or coming to an end. The completed units are incomeproducing and will have a positive effect on cash flow in the coming months andyears.The largest of these developments, which should complete in the summer, is atKing Edward Court, Windsor which we own through Analytical Properties, ourjoint venture with Bank of Scotland. A fuller account of progress to date iscovered in the Chief Executive's Report but we have been affected at Windsor bythe failure at a critical time of a highly-specialised sub-contractor who couldnot be quickly replaced.We remain extremely pleased with the positive impact on the rest of the centrethat we are already seeing from the imminent arrival in this new block ofretailers such as Zara, Hennes and New Look along with a brand new Waitrose andTravelodge hotel.
Our development of a new 20,000 sq ft flagship store for River Island in Orchard Square, Sheffield is now completed and the tenant is fitting out. We are also about to submit a planning application for a further 45,000 sq ft anchor store to the rear of the centre.
During 2006 and since the year end we have disposed of two of our shoppingcentres. These were Church Square, St Helens which was owned in AnalyticalProperties and for which we achieved a sale price ‚£75.0m, and thedirectly-owned Mall in Dagenham on which we have exchanged contracts and forwhich we will receive ‚£18.7m at completion. Both sale prices are considerablyin advance of the December 2005 valuations of ‚£65.0m and ‚£14.9m respectively.In September we completed the acquisition of the Atlantic Group of Companieswhich owns The London Portfolio, a ‚£50.3m portfolio of mainly retail propertiesin prime and established parts of Central London. This portfolio is attractiveto us because the properties for the most part have large footprints andunder-utilised space, particularly in the upper parts. They will also benefitfrom our intensive management style in the short-term.
All of the properties have been reviewed in detail and plans have been formulated to improve each of them. These plans range from simply more efficient management of the properties on a day-to-day basis, to extension, refurbishment and part-redevelopment.
Where we were unable to identify initiatives to improve the asset, the propertywas earmarked for sale. We have now completed the sale of two properties weacquired in Notting Hill, London. These comprised an antiques market and afreehold house for which the combined proceeds were ‚£4.9m against the ‚£3.9mthat we paid for them. As the purchase of these properties was only completedin September, the surplus achieved is encouraging.The proceeds of this sale, as well as those of St. Helens and Dagenham, will beused in part to reduce outstanding loans while the balance will be added to ourcash reserves. It is expected these will total approximately ‚£25m.Last year, I mentioned that our considerable development programme would impacton rental income while the developments were underway. However, I am pleased toreport that we have been able to maintain net income for 2006 at ‚£7.9m (2005 ‚£7.9m). Our profit before tax, which under IFRS includes the revaluation of ourproperties, increased to ‚£18.3m against ‚£17.9m for 2005. Diluted earnings pershare were 20.0p against 18.8p.The Board is recommending a final dividend this year of 1.25p per share which,if approved by shareholders, will make a total of 1.85p for the year, anincrease of over 7%. This will be paid on 6 July 2007 to all those shareholderson the register at the close of business on 15 June 2007.
2006 was a year of considerable progress during which we invested significantly in new and exciting properties. This was against a difficult backdrop of unprecedented demand from both local and international buyers for shopping centres and retail property.
We have also trimmed our portfolio and disposed of centres where we either sawno further growth potential or where the price on offer was higher than ourpredicted exit values once all our management initiatives had been carried out.For the first time our net assets are over ‚£100m and our total propertyportfolio has passed the ‚£300m mark, all achieved while carrying out thelargest development programme in our history. At the same time, we have managedto maintain cash balances at record levels while carrying out all of theprojects mentioned above.I would like to thank my Board colleagues, LAP staff and advisers for all theirhard work. We go into 2007 with a number of successful deals already completedthis year and the financial capacity to carry out further substantialacquisitions and developments. For this reason, I look forward to the comingyear with considerable confidence.Michael HellerChairman27 March 2007Chief Executive's ReportThe year under review was again a period of considerable growth for theCompany. Our directly owned property portfolio was valued at ‚£192.8m, anincrease of 64.8%. This figure includes last summer's acquisition of The LondonPortfolio for ‚£50.3m. On a like for like basis the value of our wholly ownedproperties advanced by 13.7% to ‚£137.3m. We calculate that approximately 60% ofthis capital growth can be attributed to the continuing strength of theinvestment market while the remainder reflects successful managementinitiatives carried out during the year which grew the future estimated rentalincome at our properties.The acquisition of The London Portfolio was the first major acquisition that wehad made for some time. It was achieved in a highly competitive marketalthough, as evidenced by our December 2006 revaluation and two disposals fromthe portfolio, we believe we managed to acquire the properties at an attractiveprice for shareholders. This acquisition, combined with the selective disposalswe have completed over the last few years, refocuses a considerable proportionof LAP's portfolio towards Central London and the South East where we believeproperty values have good scope for further growth in the right locations andasset classes. This refocusing is enhanced through King Edward Court inWindsor, which we own through Analytical Properties, our joint venture withBank of Scotland. As shareholders know, we are completing a large developmentthere which will further increase our exposure to this area.Disposals during the year include our other shopping centre within this jointventure, Church Square in St Helens. This was sold during the year for ‚£75.0mhaving been originally acquired in 2003 for ‚£50.0m. Net of tax, fees and otherexpenses, both joint venture partners to date have received ‚£11.0m from thisdisposal, a strong return on the original ‚£3.9m that each shareholder invested.There may be further returns should a number of retentions not be required.Since the year end we have also exchanged contracts to sell The Mall, ourDagenham shopping centre, and the adjacent Post Office for a combined ‚£18.7m.We acquired the Mall for ‚£8.0m in 1994, undertook a minor refurbishment in1995, and acquired the adjacent Post Office in 2004 for ‚£550,000. At the timewe put these properties under offer, they were valued at ‚£14.9m.We have also sold two properties from The London Portfolio where we saw limitedopportunities for growth, namely a Saturday-only antiques mall and an adjacentfreehold house in Notting Hill. At the time of acquisition, the antiques mallhad a secondary run of shops in the basement of the house. We vacated thebasement and sold the house to an owner-occupier. The combined price receivedfor both properties was ‚£4.9m against a value at acquisition of ‚£3.9m.During the year we continued to grow rental levels at all our major centres andwe have contracted a net incremental ‚£960,000 pa of rental income. Thisincludes a single letting of ‚£667,500 pa to River Island at Orchard Square,Sheffield. We have also maintained void levels of less than 2% excluding unitsheld for redevelopment at all our Centres and have invested ‚£17.2m in thecentres, including at King Edward Court, to create better configured space.This has also led to enhanced returns for shareholders.
The London Portfolio
We have successfully integrated the portfolio into LAP and all the propertiesare now run from our head office. Rents have grown since acquisition by over 3%while the irrecoverable costs of running the properties have decreased by 15%due to the application of our intensive style of management.The properties comprising The London Portfolio were described in detail at thehalf-year stage. We believe this portfolio represents a series of excitingopportunities. The properties are for the most part located in prime centralLondon and many of the buildings have large footprints with only a singlestorey. Consequently, we are in the process of reviewing opportunities toexpand the amount of lettable retail space as well as creating additionalfloors of residential or office accommodation. I look forward to updatingshareholders on progress over the coming year.At Antiquarius on the Kings Road, we expect to be able to start work soon onrefurbishing a vacant residential unit. Costs are anticipated to be around ‚£250,000 including fees, while the gross rent generated on completion isexpected to be ‚£50 - 60,000 a year.In addition we are about to commence the refurbishment of a house in UpperStreet, Islington at an anticipated cost of ‚£200,000. This house will generatea gross rent of ‚£40-50,000 a year once finished. Both of these units have beenvacant and in a state of disrepair for some time, notwithstanding their primelocationsOrchard Square, Sheffield
The new flagship unit for River Island that we have created from two poorlyconfigured smaller units was completed in December, ahead of schedule and onbudget. River Island is currently fitting out and the unit is now producing ‚£667,500 pa, a Zone A of over ‚£230 per sq ft compared to ‚£200 per sq ftpreviously achieved in this part of Fargate. The adjacent unit, which is let toVirgin at ‚£200 per sq ft Zone A, is subject to a rent review this year.Next to River Island, we have a further shop which will be marketed once thehoardings around the River Island unit are removed. We anticipate letting thisunit at a rent of ‚£80,000 pa. The total cost of this development was ‚£2.2m andthe incremental rent will be around ‚£250,000 pa once all the space created hasbeen let.To the rear of the Centre we have submitted a planning application to create a45,000 sq ft anchor unit. This will incorporate the space currently let to TKMaxx, where there is a lease expiry, and the vacant Stonehouse pub which weacquired in August 2005. We have received strong interest in this large spacefrom retailers, and we are in advanced negotiations with a fashion operator whowishes to take the entire unit.Elsewhere, Orchard Square is fully let apart from one small unit which is beingkept vacant for redevelopment. Demand for space at the centre is the strongestit has been during our seven years of ownership and we have a number ofinitiatives underway to create space to accommodate some of the retailers whowish to trade from this centre.
Kings Square, West Bromwich
We have successfully introduced a number of exciting national retailers to thecentre. These include Claires Accessories, Shoe Zone and BB's Muffins which hasleased the vacant central mall area at ‚£40,000 pa. Gross rents at the centrehave grown by ‚£141,000 pa as a result of these new lettings and successful
rentreviews.Saxon Square, ChristchurchWe continue to pursue our planning application to develop a medium sized unitwith residential upper parts to the rear of the shopping centre. We suffered asetback during the year when the Council refused planning consent for ourapplication but we are appealing this decision. There is strong interest in theproposed unit in any case and it is already under offer to a national foodretailer.Notable deals elsewhere in the centre include the surrender of a lease at ‚£47,500 pa to soft furnishing retailer Zoom the Loom and the re-letting of theunit to HBOS at ‚£62,500 pa, a record rent per square foot .
King Edward Court, Windsor
The development which comprises over 100,000 sq ft of retail space and a newhotel block to include Waitrose, Zara, H&M, New Look, and Travelodge isunfortunately going to cost more than previously stated. At the end of lastyear, I reported that costs had risen to ‚£18.2m from the ‚£16.5m anticipated atthe start of the contract. Since then a nominated specialist sub-contractorfailed shortly before going on site causing considerable delay and expense. Areplacement sub-contractor was found and the work has now been completed. As aresult of this delay we expect final development costs to be over ‚£20m. Westill expect the development to be profitable, and the interest shown in therest of the Centre is strong in anticipation of the opening of the new block.This delay means we will not be able to hand over the retail units forfitting-out by the tenants until July against a previous target date of April.We were monitoring progress very closely when this sub-contractor failed andfeel there were no extra controls that we could have applied to avoid thishappeningMarketing of the final unit in the development and the cafƒ© at road level isnow underway. Interest is strong and I expect to be able to announce furtherlettings in the near future.
The rest of the centre is trading well. There are no vacant units and we have good interest from retailers who wish to trade from the Centre now that the development is almost compete.
Following the sale of Church Square, St Helens, the two properties in NottingHill and The Mall, Dagenham we will have unencumbered cash on deposit of ‚£25m.Although in the last 12 months we have been unable to identify any shoppingcentre investments that meet our strict acquisition criteria, we were able toacquire other types of retail property. We continue to look hard at everyshopping centre that comes to market and believe that the slowdown in consumerspending being experienced and the lower rental growth that this causes maywell lead to a softening of the shopping centre market in which we havetraditionally specialised. We are in a strong position due to our high cashreserves and undrawn facilities to take advantage of this and we can movequickly to acquire any suitable centres that come to the market.The year to date is going well and I remain confident of a successful 2007.
John HellerChief Executive27 March 2007Financial Director's Report2006 was a strong year for London & Associated Properties as its cash reserveswere bolstered by the proceeds from the sale of Church Square, St. Helens, andtwo properties in Notting Hill, London, and will be further swelled followingcompletion of the sale of the Mall, Dagenham. In fact following the sale of theMall, we expect to have ‚£25m available in unencumbered cash, a record high.We also signed a new ‚£90m 5 year Revolving Credit Facility with the Royal Bankof Scotland in August. This replaced two facilities of ‚£20m each. ‚£50m of thenew facility was subsequently drawn down for the purchase of The LondonPortfolio, taking the total drawn from this new facility to ‚£80m.
Cash Flow
As stated we have strengthened the group's cash position over the year. The principal events that affected cash in the year were:
* The purchase of The London Portfolio for ‚£50.3m.
* The sale of Church Square, our shopping centre in St Helens held in
Analytical Properties, our joint venture with the Bank of Scotland. This
has enabled the group to receive some ‚£11.0m in cash from an investment of
‚£3.9m three years ago;
* The sale of the two properties in Notting Hill for which we received ‚£4.9m
in total; and * Capital investment of ‚£3.5m from our existing cash into our property portfolio. These events, combined with the contracted disposal of The Mall, Dagenham for ‚£18.7m, are expected to give us cash and facilities of over ‚£45m, leaving thegroup in an extremely strong position for the future.
Interest paid in 2006 was covered 1.8 times by the cash generated from continuing operations.
Income Statement
The group generated a profit before taxation of ‚£18.3m (2005: ‚£17.9m). Thisfigure would have been higher but we took the decision to write off ‚£9.3m ofgoodwill and acquisition costs arising on the purchase of The London Portfolio.
The average cost of debt has fallen to 6.9% (2005: 7.3%). Interest payable (excluding the interest on obligations under finance leases) in the year increased to ‚£5.0m (2005: ‚£4.0m). This increase follows the funding of the acquisition of The London Portfolio.
The effective tax rate in the year was 17.0% (2005: 17.0%), although the current year's charge was ‚£Nil (2005: ‚£0.5m) due to the utilisation of tax losses in the group. The deferred tax charge was ‚£3.1m (2005: ‚£2.5m).
Balance Sheet
The overall property portfolio, which includes those properties held by Analytical, Bisichi and Dragon Retail, grew by 10.0% to ‚£301.5m.
The net assets of the group grew by 15.5% to ‚£101.9m (2005: ‚£88.3m). Under UKGAAP the net assets would have been ‚£125.9m (‚£103.5m), an increase of 21.6%.The principal reason for the increase was the revaluation of our propertyportfolio. Of the growth, some 60% resulted from increases in values in thegeneral property market while the remainder was due to our managementinitiatives.
Fully diluted net assets per share rose by 15.3% to 133.7p per share (2005: 115.9p).
Gearing at 31 December 2006 was 86.4% (2005: 50.1%). This increase was again aresult of the purchase of The London Portfolio, although gearing remains modestby property company standards.To minimise the effect of adverse movements in interest rates, London &Associated Properties took out a hedge against interest rates to cover ‚£40m ofthe revolving credit. This is in the form of a collar with a 5.5% cap and a4.5% floor. LAP now has 57.7% of its debt at the 31 December 2006 either at afixed rate or protected.Under IFRS our long term debenture debt is not shown at fair value. Anadjustment to fair value of the debenture debt would be 4.0p per share (2005:5.6p). It remains our policy not to repay this long term debt early. Bankingdebt and associated derivatives are shown in the balance sheet at fair value.
Dividends
The proposed final dividend of 1.25p, payable to shareholders on 6th July 2007,gives a total dividend for the year of 1.85p, an increase on 2005 of 7.2%. Thedividend is covered 2.9 times if the revaluation surpluses are excluded and thegoodwill and acquisition costs are added back.Analytical Properties, our joint venture with the Bank of Scotland, had anotherstrong year. Following the sale of Church Square, it has to date been able toreturn some ‚£11m in cash to shareholders.Analytical also increased its development facility with the Bank of Scotland inthe year to ‚£25.0m. This is to cover the additional building costs and delaysat King Edward Court, Windsor, as outlined the Chief Executive's Report.Our associated company, Bisichi Mining, in which we hold a 42% stake, producedprofits before tax of ‚£2.6m (2005: ‚£4.2m) following some difficulties at itsmining operation in the first half of the year. However, the second half wasthe most profitable in its history. Dragon Retail Properties, our joint venturewith Bisichi, also had a good year with net assets increasing by 8.8% to ‚£4.8m(as reported under UK GAAP). This increase was, in part, from the sale at aprofit of a property in Brighton during the year.With available cash and undrawn facilities of approximately ‚£45m, London &Associated Properties is in a strong position to take advantage at short noticeof any opportunities that arise. It remains our policy to manage the financesof the Group on a prudent basis, and I feel confident as we enter into 2007.Robert CorryFinance Director27 March 2007
London & Associated Properties PLC Consolidated income statement for the year ended 31 December 2006
2006 2005 Notes ‚£'000 ‚£'000 Gross rental income Group and share of joint 11,840 12,392 ventures
Less: joint ventures - share of (3,949)
(4,525) rental income 7,891 7,867 Less: property overheads: Direct property expenses (1,107) (894) Attributable overheads (3,623) (2,516) Property overheads (4,730) (3,410) Net rental income 3,161 4,457 Listed investments 264 169 Operating profit before 3,425 4,626 adjustments Lease surrender - (173) Costs on acquisition of (1,849) - subsidiary investments Goodwill impairment (7,483) -
Costs in relation to acquisition 1 (9,332) - Profit on sale of subsidiary 52
- investments
Profit on sale of investment -
1,230 properties Net gain on revaluation of 21,610 10,078 investment properties Net increase in value of 680 831
investments held for trading
Operating profit after 16,435 16,592 adjustments Share of profit of joint 4,358 3,659 ventures
Share of profit of associate 972
1,232 21,765 21,483 Interest receivable 2 742 820 Interest payable 2 (4,182) (4,408) Profit before taxation 18,325 17,895 Income tax 3 (3,107) (3,046) Profit for the year 15,218 14,849 Basic earnings per share 4 20.00p 18.83p
Diluted earnings per share 4 19.97p
18.79p
Consolidated balance sheet at 31
December 2006 2006 2005 Notes ‚£'000 ‚£'000 Non-current assets
Value of properties attributable 192,788
116,971 to group Present value of head leases 9,340 8,582 Property 7 202,128 125,553 Plant and equipment 1,033 975 Investments in joint ventures 15,263 18,033 Investments in associated 6,872 6,495 company Held to maturity investments 1,834 3,784 227,130 154,840 Current assets Trade and other receivables 3,849 4,608 Financial assets-investments 4,992 4,586 held for trading Cash and cash equivalents 14,555 6,212 23,396 15,406 Total assets 250,526 170,246 Current liabilities
Financial liabilities-borrowings (5,693)
(2,446) Trade and other payables (11,434) (6,724) Current tax liabilities - (177) (17,127) (9,347) Non current liabilities
Financial liabilities-borrowings (99,976) (52,494) Present value of head leases on (9,340)
(8,582) properties Deferred tax (22,223) (11,482) (131,539) (72,558) Total liabilities (148,666) (81,905) Net assets 101,860 88,341 Equity Share capital 8,232 8,232 Share premium account 5,236 5,228 Capital redemption reserve 47 47 Other reserves 429 429 Retained earnings (excluding 94,449 81,037 treasury shares) Treasury shares (6,533) (6,632) Retained earnings 87,916 74,405 Total shareholders' equity 101,860 88,341 Net assets per share 5 133.62p 116.04p Diluted net assets per share 5 133.47p 115.88p Consolidated statement of recognised income and expenses for the year ended 31 December 2006 2006 2005 ‚£'000 ‚£'000 Profit for the year 15,218 14,849 Currency translation (541) (35) Transitional adjustment on - 948 adoption of IAS 39 Deferred tax thereon - (311) Total recognised income and 14,677 15,451 expense for the year Consolidated statement of changes in shareholders' equity for the year ended 31 December 2006 Retained Earnings Share Share Other Treasury Earnings Total capital premium reserves shares excluding equity treasury ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Balance at 1 January 2006 8,232 5,228 476 (6,632) 81,037 88,341
Investment valuation in Joint
24 24Venture Equity share options in 44 44Associate Acquisition of own shares (40) (40) Disposal of own shares 139 139
Gain/(loss) on disposal of own 8
(20) (12)shares Currency translation (541) (541) Dividend (1,313) (1,313) Profit for year 15,218 15,218 Balance at 31 December 2006 8,232 5,236 476 (6,533) 94,449 101,860
Consolidated cash flow statement for the year
ended 31 December 2006 2006 2005 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Operating activities Operating profit after 16,435 16,592 adjustments Depreciation 178 125 Goodwill impairment 7,483 - Costs on acquisition of 1,849 - subsidiary investments
Costs in relation to acquisition 9,332 - Gain on disposal of non-current (30) (1)
assets Profit on sale of investment - (1,230) properties Profit on sale of subsidiary (52) - investments Net gain on revaluation of (21,610) (10,078) investment properties Net increase in value of (680) (831) investments held for trading
Increase in net current assets (129) (695) Cash generated from operations 3,444 3,882
Interest paid (4,980) (4,360) Interest received 757 535 Income tax paid (359) (843)
Cash flows after interest and (1,138)
(786) tax Investing activities
Repayment of investment in loan 1,950 -
stock in joint ventures Acquisition of subsidiary (27,313) - investments (net of cash acquired) Costs on acquisition of (1,849) - subsidiary investments
Sale of subsidiary investments 1,695 -
Property acquisitions and (2,656) (3,455) improvements Sale of properties 1,453 4,726
Purchase of office equipment and (204) (578)
motor cars Sale of office equipment and 61 6 motor cars Dividends received 7,248 87 Cash flows from investing (19,615) 786 activities Financing activities Shares issued for cash - - Issue expenses - (1) Purchase of Treasury shares (40) (6,721) Sale of Treasury shares 127 367 Equity dividends paid (1,313) (1,355) Cash attributable as agents - (2,520) Debt repaid on acquisition of (23,375) - subsidiary investments
Drawdown of short term loan from 2,600 -
joint ventures Drawdown of medium term bank 47,850 2,650 loan Cash flows from financing 25,849 (7,580) activities
Net increase/(decrease) in cash 5,096
(7,580) and cash equivalents Cash and cash equivalents at 3,766 11,346 beginning of period
Cash and cash equivalents at end 8,862
3,766 of period Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise the following balance sheet amounts:
2006 2005 ‚£'000 ‚£'000 Cash and cash equivalents 14,555 6,212 Bank overdraft (5,693) (2,446)
Cash and cash equivalents at end 8,862
3,766 of period
Notes to the preliminary announcement for the year ended 31 December 2006
Basis of Accounting
The results for the year ended 31 December 2006 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The principal accounting policies applied are the same as those set out in the Financial Statements for the year ended 31 December 2005. 1. Exceptional items 2006 2005 ‚£'000 ‚£'000 Costs in relation to acquisition: Costs on acquisition of (1,849) - subsidiary investments Goodwill impairment (7,483) - (9,332) -
The costs on acquisition represent fees incurred prior to unconditional agreement being reached to acquire APL Ocean Limited. Goodwill impairment arose on the acquisition of APL Ocean Limited on 22 September 2006. This goodwill arose primarily as a result of recognising the deferred tax which would arise if the properties within APL Ocean Limited were realised at the fair valuation applied on acquisition. This goodwill is immediately written off to the income statement.
2. Net finance costs 2006 2005 ‚£'000 ‚£'000 Interest receivable 742 820 Interest payable - Interest on bank loans and (2,839) (1,923) overdrafts Other loans (2,124) (2,106)
Interest on obligations under 36 (442)
finance leases Interest capitalised 745 63 (4,182) (4,408) (3,440) (3,588) 3. Income tax 2006 2005 ‚£'000 ‚£'000 Current tax - (524) Deferred tax (3,107) (2,522) (3,107) (3,046) 4. Earnings per share 2006 2005 ‚£'000 ‚£'000 Group profit after tax 15,218 14,849 Weighted average number of 76,102 78,839
shares in issue for the period
(`000) Basic earnings per share 20.00p 18.83p Diluted number of shares in 76,205 79,021 issue re. outstanding share options(`000)
Fully diluted earnings per share 19.97p 18.79p
5.Net assets per share 2006 2005 ‚£'000 ‚£'000 Shares in issue (`000) 76,229 76,129 Net assets per balance sheet 101,860 88,341 Basic net assets per share 133.62p 116.04p Shares in issue diluted by 76,349 76,279
outstanding share options (`000) Net assets after issue of share 101,900 88,393
options Fully diluted net assets per 133.47p 115.88p share 6. Dividend 2006 2005 Per share ‚£'000 Per share ‚£'000
Dividends paid during the year 1.725p 1,313 1.65p
1,355 relating to the prior year
An interim dividend for 2006 of 0.6p amounting to ‚£457,000 was paid on 26
January 2007 (2005: 0.55p amounting to ‚£419,000). The directors recommend the payment of a final dividend for 2006 of 1.25p per ordinary share (2005: 1.175p) amounting to ‚£953,000 (2005: ‚£895,000), making the total dividend for 2006
1.85p amounting to ‚£1,410,000 (2005:1.725p amounting to ‚£1,314,000). The final dividend will be payable on 6 July 2007 to shareholders registered at the close of business on 15 June 2007.
Dividends are now accounted for only in the financial year in which they are paid, in accordance with revised accounting standards. 7. Revaluation of investment properties 99.9% of freehold and long leasehold properties were valued as
at 31 December 2006 by external professional firms of chartered surveyors, the balance being valued by the directors.
The valuations were made at open market value on the basis of existing use.
8. Financial information
The figures for the year ended 31 December 2005 are based on the
audited accounts for that year, which have been delivered to the Registrar of
Companies and on which the Auditors gave an unqualified report and did not contain a statement under Section 237(2) and (3) of the Companies Act 1985.
and did not contain a statement under Section 237 (2) and (3) of the Companies Act 1985.
The financial information set out in this preliminary announcement, which was approved by the Board of London & Associated Properties PLC on 26th March 2007, is unaudited and does not constitute the Company's statutory accounts for the year ended 31 December 2006, but is derived from those accounts.
LONDON AND ASSOCIATED PROPERTIES PLC