Panther Securities Regulatory News (PNS)

28 Apr 2008 07:00

Panther Securities PLC28 April 2008 Panther Securities P.L.C. Preliminary Announcement - Year ended 31 December 2007 RESULTS Wow, it has been a great year. Our pre-tax profits for the year ending 31stDecember 2007 are £9.089 million compared to £9.269 million for the previousyear, but that year benefited from approximately £6.081 million revaluationprofits, whilst the current year reflects almost entirely realised profits. Rental income for the current year was maintained at £7.526 million (2006 -£7.510 million) despite our continued policy of selling some of our matureinvestments. The year was an extremely active one for our group and I shall briefly mentionthe most significant events. Disposals In February 2007, we sold at auction the following properties: 191-199 RusheyGreen, Catford, London; Hainton House, Hainton Square, Grimsby; 74 KilmarnockRoad, Glasgow; 63/65 High Street, Dumbarton; and Units 1 and 2, 4 High Street,Paisley In May 2007, we also sold 107/109 George Street, Oban. Theseproperties, which were producing £277,000 per annum, were sold for approximately£5,400,000; the profit on disposal was approximately £1,150,000. We also sold asmall property held as trading stock, which was a vacant shop at 35/37 BridgeStreet, Dumbarton, for £237,000, showing a good profit. Oldfield Road, Maidenhead This freehold property was a 15,000 sq ft single storey industrial type buildingthat had established office use on a site of approximately half an acre and ithad been vacant for some time. It was sold on 17th October 2007 forredevelopment to Henry Boot P.L.C. for £2,250,000 with a profit on disposal of£945,000. Neil House, 1-15 Whitechapel Road & 2/10 Osborn Street, London E1 This freehold property, also sold in October, was a 1960's mixed-use building onthe corner of Whitechapel Road and Osborn Street, comprising approximately40,000 sq ft, multi let, and producing £450,000 per annum with approximately10,000 sq ft of the offices vacant. This property was sold to the Workspace Group plc for £10,800,000, the profit ondisposal being £3,494,000. Real Estate Investors PLC We sold our entire ordinary shareholding in Real Estate Investors PLC for£740,000, realising a profit of £92,000. We retained the convertible loan notein this company with a face value of £325,000, repayable in about one year'stime or convertible into ordinary shares in the company. The total amount realised from these sales was £19,026,000, £9,324,000 of whichhas been reinvested in property and £3,158,000 in Stock Exchange securities,mainly in listed property shares shares. Acquisitions In February 2007, we purchased three freehold factories at Boraston Lane,Burford, Tenbury Wells, Worcestershire; Picts Lane, Princes Risborough,Buckinghamshire and Valley Road, Clacton-on-Sea, Essex, all occupied bysubsidiary companies of Elektron PLC. The costs (including stamp duty) were£4,600,000 and simultaneously leaseback arrangements were entered into so that atotal annual rental of £343,500 was immediately receivable. These threefactories have a total net lettable area of 120,000 sq ft on seven acres ofland. 14,000 sq ft of which is vacant, with the potential for an additionalrental income of £50,000 per annum. In August 2007, we purchased two freehold factories at Woodland Road andWoodland Close, Torquay, Devon, which comprised approximately 68,000 sq ft on3.5 acres, subject to a leaseback to Sifam Limited at £215,000 per annum forterms of 10 years and 7 years respectively, after a one year rent free period.The cost, including stamp duty, was £2,430,000. Sifam Limited had immediatelybefore this transaction been purchased by Elektron PLC. We also purchased in August three further freeholds, namely a part vacant shopinvestment at 86-88 High Street, Margate, producing £20,000 per annum, for£549,000, a 10,000 sq ft factory investment in Harwood Road, Littlehamptonproducing £45,000 per annum for £567,000 and a former branch of Lloyds Bank at216/218 Northdown Road, Cliftonville, Margate, for £308,000. This was a vacantproperty and, after minor works, will be offered for letting. A freehold groundrent on 2 acres of industrial land at Newton Abbot was purchased for £170,000. Progress Report 21/27 Guildhall Street, Folkestone Our development of residential units above our shops in Folkestone was increasedto a development of 20 units and is now completed. We are offering them forsale, but the residential market is extremely slow and they won't "fly out ofthe window" as we had originally hoped. 177-195 High Street, Scunthorpe We have let approximately half of our 20,000 sq ft property in Scunthorpe, on a25 year lease to Barracuda Pubs & Bars Limited at a commencing rental of £68,000per annum, increasing to £72,500 in five years, and when the remaining two unitsin this property are let, its current value should increase considerably. Pyewipe Industrial Estate, Grimsby After the tenant of this 25,000 sq ft single storey factory failed, we decidedto internally divide the building into smaller, individual industrial units, of1,250 to 2,500 sq ft. There is a strong demand for small industrial units, whichin turn attract higher rents per sq ft when let. Rather surprisingly, this needed planning permission, which we obtained afterspending nearly a year dealing with the local authority. Our works on thedevelopment have started and, when finished, the property should produce over£100,000 per annum income, compared to £55,000 per annum from the previoustenant. We are already receiving enquiries for some of these units. 199-205 High Street, Perth We are currently carrying out a rear ground floor extension and majorrefurbishment of the property, which has been vacant for some time. We havecurrent interest from potential occupiers wanting either to buy or rent thecompleted scheme. Brackla Shopping Centre, Bridgend This is a small out of town shopping centre which was acquired with theNorthstar Group some years ago. It has always been fully let and has providedgood rental growth. We have secured planning permission for five extra shopunits, which we are hoping to start building soon. We are already receivingenquiries for these units from some major retailers. Elektron PLC Our shareholders will be aware that we are significant shareholders in thiscompany, where we are optimistic that they will continue to prosper and thattheir expansion policy will enable us to occasionally acquire factoryinvestments off-market to our mutual benefit. Valuation of properties Our entire portfolio was revalued by the independent valuers DTZ and althoughthere were numerous changes to the assessed values of the approximately 80separate individual blocks of property valuations (about 30 up and about 30down). The result is a small increase in the overall value of our portfolio!PHEW!! Finance As at 31st December 2007, our group had over £12,500,000 in cash and a further£7,500,000 of undrawn loan facilities not requiring additional security. The £35,000,000 of our current borrowings are on a term loan at a favourableinterest rate owing to our having entered into swap arrangements in December2006 on £50,000,000. Our borrowings are currently only £35,000,000, and due tothe current uncertainty, short-term money rates are disproportionately expensiveand, because of this, our group benefits more than was anticipated. In our interim statement under the IFRS rules the capital value of our swaps hadto be brought into our income statement and amounted to £2.5 million. At thattime, I felt that this was inappropriate as its capital value was so volatile.This notional value has now vanished and there is currently no overall capitalvalue to our swaps and thus included in this year's income statement as a netloss of £3,000. General Overheads My salary waiver has reduced overheads by over £522,000 in the period underreview, compared to the year ended 31st December 2006, and I am continuing thiswaiver for the current year, as I am fed up of personally paying so much tax! Dividends An interim dividend of 6p per share was paid on 28th September 2007, and a finaldividend of 6p per share is proposed for shareholder approval at the AGM. With our substantial profits from some extremely successful sales, your boardwould normally have expected to pay a special dividend. These are not normaltimes and the business community, property, and financial companies inparticular, would be wise to adopt a cautionary stance for the near future. Wefeel low borrowings and high liquidity are the order of the day and therefore aspecial dividend is not being paid. Political Donation Those thieves at Westminster who seem answerable to no-one continue to feathertheir own nests at John Lewis while the general populace suffer. I thereforecontinue to propose that the company support the Conservative party, who can'tbe any more profligate and must be more competent than the current bunch of"N'er do wells". Of course, I will not vote my personal interests on theresolution as one or two shareholders may disagree with me on the point ofprinciple that companies should not involve themselves in politics. Due to arecently introduced stealth tax in the year ending 31st December 2008, we willprobably have approximately £410,000 of vacant rates payable (compared to£237,000 for this year ended 31st December 2007) even when we are in the processof improving these properties, our efforts delayed by slow planning proceduresand decisions. About 10 years ago, my favourite uncle died aged 90. He was wise from the schoolof life, having been taken out of education at the age of 12 to help in mygrandfather's small cabinet-making factory. A life long bachelor, he lived afinancially successful and comfortable life of self-centred indulgence and yetof parsimony. From his teens, his one great love was the London Theatre and hewas able to attend nearly every first night production for nearly 70 years.Although extremely careful with his pennies, his one financial anomaly was hishabit of regularly entertaining his friends, family, nieces and nephews, and inhis earlier years, his business clients in groups of six to ten people to anevening at the theatre and afterwards to a dinner at a nice restaurant. I was a favoured nephew and often accompanied him. Sometimes, the plays weredreadful but afterwards the meal and company were always good. In his lateryears after the show, his group often dined at the restaurant in the VictoriaSporting Club Casino. I knew he never gambled, so I asked him why he joined. "Itwas free" was his reply. He then explained how, when the Casino was seekingplanning permission, they offered a number of nearby residents including himfree membership and he had never refused anything that was "free". When theCasino opened, those members were invited to sample the fayre at the restaurant"free". He of course accepted. He told me not only was the size of the portionsand variety of the menu excellent, but he noticed that the prices were extremelylow and instantly realised that the Casino heavily subsidised the restaurant.From that moment, it became his favourite restaurant. After dinner, on one of our family outings, me and my mother and aunt wanted toplay the tables, but they were put off as the cheapest gambling chip was abovetheir normal low self- imposed limit. I offered to give them £100 each to play,but they refused to take a gift. I then said, "Both of you, take the £100 eachand gamble for me. If you win, you can keep half the winnings, and if you loseI'll carry all the loss". This they found acceptable and an enjoyable eveningwas had by all. I cannot remember the final result of our gambling spree, but with hindsight, Inow realise I had probably conceived the basic idea behind the first hedge fund. Once again I have separated off my personal ramblings (which seem to be morerambling than usual) which follow this statement and are not strictly, as youwill have gathered, related to our operations so that those shareholders who arenot interested in my views may ignore them. Finally, I would like to thank our small dedicated team of staff, our financialadvisers, legal advisers, agents, accountants and , of course, our tenants - toall of whom I am most grateful. As ever, notwithstanding the many uncertainties, I view our future with optimismand confidence. A. S. PerloffChairman28th April 2008 CHAIRMAN'S RAMBLINGS In recent years, I have occasionally taken travelling holidays with my wife andyoung daughter. On one such occasion, we were travelling north along the coastalroute from southern Spain. Rarely booking hotels in advance, we took our chancesas to what was available at suitable stopping times, usually between 6.30 and8pm. Having reached a medium sized non-tourist town, we looked in our Michelinguide to find the best of a mediocre group of possible stopover places. Thisfound, we parked outside and leaving my wife to guard the luggage in the car,but taking my daughter inside with me I went in to enquire as to availability.The receptionist spoke passable English and explained that it was at their busytime and they only had a few small rooms available. I asked, "Have you anysuites?". "No sir," came the reply. I persisted "Are you sure you haven't evenone large suite that may have been cancelled". "No sir, not even one suite, onlythe standard room left". So we took the standard room. As soon as we decamped into the room, our daughter as usual jumped up and downon the bed and then ran round and examined the room. She finally found the minibar. Suddenly she was excitedly running up to me waving a packet of M&Ms,"Daddy, Daddy, that man was wrong, he does have SWEETS". The last part of that holiday we spent a few days in Paris and hoping to instilin our daughter an appreciation of the arts, most of our last day was taken upby a visit to the Louvre. We trooped round a huge number of their galleries,seeing an unimaginable amount of masterpieces of sculpture, paintings and otherworks of art. The greatest moment, however, was, after queuing with hoards ofpeople, and going through the Long Gallery, when we were able to see the "MonaLisa". We left the Louvre much pleased with the artistic education of ourdaughter. We arrived back in England with some days left before school started,so my daughter, as a special treat, stayed with her adored "Nana". Of course, "Nana" loves to spoil her, so the very next day, she asked hergranddaughter "Would you like to go to the pictures?". She was astonished withthe response. My daughter clasped her hands over her eyes and exclaimed veryloudly, "OH NO NO, not more pictures!". Nana took a few moments to realise thatit was not Disney or Dreamworks, but Rubens, Rembrandt and Leonardo da Vincithat the child had overdosed on. My final child story occurred only last year. My wife and daughter had just finished a nice afternoon on Antibes beach andpacked their belongings to walk back to our holiday home. As they reached thepavement, our nine year old daughter noticed a green wine bottle that had beensmashed to smithereens on the side of the road. "That reminds me of Crystal Night" she told my wife. My wife was shocked. "Wheredid you hear about "Krystalnacht"" she asked. "Can't remember", came the usualreply. My wife worried about what may have been instilled in her still formativebrain, went on a long and child-friendly explanation, telling how, a long timeago in Germany, those in charge of running the country did not like Jewishpeople who had so many shops including many book shops, and so the local leadersarranged for soldiers to smash the Jewish shop owners' windows, throw all thebooks into the street and make a bonfire of them. The fire made the broken glasssparkle like crystals and from that time on that terrible night was called"Krystalnacht". She then explained how terrible it is to be nasty to peoplebecause they are different to you, either by religion or colour or any otherreason. My daughter, who rather surprisingly had listened quietly and patientlyuntil then, said "Don't be silly mummy, I meant the stuff that makes Superman goweak" - for the uninitiated, that's KRYPTONITE. Of course, these are amusing stories and have little relevance to my "BeteNoire". Except..... they are all based on verbal misunderstanding and over thelast ten years or so it seems to me that our elected leaders have managed analmost Orwellian transformation of our language and often deliberately utilisewords or phrases that have different meanings for each listener and thuspromises can be wriggled out of. In many budgets, the words "fairer, prudent,hard working, resources, simplify, abolish" attached to changes that soundedreasonable on verbal presentation turn out to be the exact opposite upon properdetailed inspection of that which was being proposed. Whilst you can fool all ofthe people some of the time you cannot fool all of the people all of the time.The general public have come to realise that the spoken word from any politicianis twistable. An oleaginous politician might have said, "So what?" It does,however, explain why immediately after our current chancellor said "Your moneyis safe in the Northern Rock" all and sundry ran to the nearest branch towithdraw their funds. Creating the first run on a British bank in over 100 yearsand necessitating a full blown Government guarantee on all of its deposits. Mostof you will know of my antipathy for most bureaucrats, but occasionally I feelmaybe, just possibly, individually they could be nice people, but I ask myself,what could possibly explain the hopeless shambles in practically everythingconnected to or associated with them? Having mentioned Superman, I recall his most difficult antagonist was not reallya villain, but a mischievous imp named Mr MXYZPTLK, who, having superhumanpowers, somehow broke into our world from the fifth dimension. He always triedto wreak havoc everywhere, which took all of Superman's super duper abilitiesand efforts to remedy or prevent. Mr MXYZPTLK did it because he was bored andwanted excitement. Perhaps, we have a Mr MXYZPTLK roaming the corridors and thecomputers of Whitehall. A lot of people who have read my ramblings have probably thought I'm half mad. Ihate doing things by halves, so now I must try to achieve full status. I am definitely not qualified to give an authoritative opinion on GlobalWarming. But with forty five years' experience of our administrators, I feel Ihave to comment. Taxes have been raised substantially to improve Education, the Health Service,Transport and other services and failed miserably, the public being no longerprepared to countenance more money being spent on these matters. It is obviousthose geniuses of the Treasury have had to invent a new Tax that will havegeneral support - will raise huge amounts of money now, and will make people whooppose it look nasty and selfish; it should also be capable of producingwonderful slogans and have no possibility of being regarded as completelyuseless until 40 to 100 years' have passed, when all current administrators arelong gone and buried, having sucked out the last of their fat pensions. "Global Warming", "Greenhouse Gases" and "Save the Planet" and "Green Taxes"fill this role perfectly. With the vast amount of information out there, numerous scientists,meteorologists all of whom receive huge funding grants from Central Governmentsfor research into the troubles of the world would stop receiving grants if theystated everything was running nicely; thus long-term disaster suits them nicely- the Government mouthpiece, the BBC, whose entire livelihood is dependent onGovernment caprice, is happy to repeatedly show the same iceberg falling intothe sea or a solitary lonely polar bear floating away on the ice-flowaccompanied by a selected dose of possibly incorrect facts. Nothing sells newspapers (other than sex scandals) like a disaster or potentialdisaster, and even better if it has graphics of cities under water or other hugenatural disasters. Well, of course, experts could be right that human activity may well begenerating excessive amounts of carbon dioxide that will warm the planet by one,two or three degrees over the next 50 years or so. But carbon dioxide only accounts for 0.25% of the earth's atmosphere - it isgenerally a very beneficial gas which can attach itself to many other elementsand is vital for plant and food production. The fact is that humanity is sittingon a huge intensely hot ball of molten metal covered by a thin crust of rocks,spinning round at thousands of miles per hour with the entire planet separatelyspinning around our sun a gigantic ball of continually exploding unimaginablyhot star, galactically not that far away yet 400,000 times bigger than earthwith this star often sending off monumental bursts of heat that can affectearth. Some scientists even suggest that other uninhabited planets in our solarsystem have also warmed up (slightly) at the same time as earth. I could findmore facts that can be unearthed which may give one cause to reconsider thecurrent general consensus - but I won't, I am going to give the doom merchantsthe benefit of the doubt and look at their remedy. The partial remedy after loads of more Green Rules, Green Regulations and GreenTaxes is to produce a carbon dioxide or methane trading scheme where allproducers of these greenhouse gases will be issued with green allowancecertificates and will have to buy allowances from someone who is not using theirfull allowance, ie like wartime rationing in the past. In short, it appears that a "load of old gasbags" will ration us (I guaranteenot themselves), pretend to measure an invisible floating gas by weight, withallowances calculated by Government bureaucrats and issue certificates, possiblyfavourably to their friends or Government controlled enterprises. To me, theimportant question is: which department of Government? Will it be the department who organised the Millennium Dome, or the one now incontrol of the cost of our forthcoming Olympic Games. Perhaps, it will be thedepartment which calculated that 7,000 immigrants might arrive from an ExtendedEurope, when over 700,000 people actually arrived. Perhaps, it will be the HomeOffice dealing with prisons, who haven't the slightest idea of who should be inor out of prison or who found out that over 25,000 British overseas convictedfelons had no record when they came home. Perhaps, the Treasury, who deal withthe Tax Dis-Credit system, when over 50% of payments and receipts are wrong, orthose that have made the system so complex that even their own specialist taxinspectors do not understand the rules. Maybe the DHSS who regularly makepayments to 2,500,000 disabled when most of us know over half aren't. Perhaps,it will be the department that destroyed the private sector pensions, with theirfinancial rape and "simplification", or those bureaucrats who negotiated thedoctors' funding arrangements so generously that doctors no longer need to workso hard. Or maybe they will pass the licensing to our unelected Europeanoverlords, whose accounts are never signed off because they are too fraudulent;who managed to create "wine lakes, butter mountains, olive oil lagoons" alsopaying grants to farmers not to grow anything, whilst a good proportion of theworld is starving. Already the encouragement to use and produce bio-fuels haspushed up the prices of basic foods to allow more of the poor to starve. In fact, to my mind there is not one endeavour that our present politicalleaders (elected or unelected) have attempted that has been successful. If the current bunch of leaders think they are capable of SAVING THE WORLD,they've not yet recovered from the excessive use of cannabis in their earlieryears, and I'm going to stock up my larder with long life tinned food and sitback and remember some more sensible years. In 1969, I was negotiating to buy a parade of four large shops in High Street,Bromley, held by an old-fashioned grocery company on a long lease at a nominalground rent. The company was in voluntary liquidation. Simultaneously, I wasnegotiating with the Prudential Assurance Society via their area manager to buythe freehold interest. Eventually, it was verbally agreed that if I couldincrease my last offer by £5,000, he would recommend his board to accept. I saidI would probably be able to reach his figure, but I needed a little more time toprogress my leasehold acquisition from the receivers. When at last I wrote tohim saying I was ready to proceed, I was disappointed to receive a reply from anew fund manager saying he had taken over the South East area from his colleagueand he no longer felt it was likely they would sell at the price previouslydiscussed. In earlier years, when I had dealt with the "Pru", first as an estate agent andsubsequently as a property investor, on a number of occasions I dealt with oneparticular property investment manager who had gradually been promoted to becomethe "Head" of the entire property department. I wrote to him complaining that Ihad spent a long time working on the transaction and verbally agreed terms withthe predecessor manager. As is usual with my letters, despite my irritation Ifinished off in a slightly humorous vein with "Surely the Pru does not need meto value their properties". His response was prompt; the very next day he phoned me. After the usualpleasantries, he explained that the previous manager who dealt with me had leftthe organisation. He then asked me, and I definitely remember his words "Did youagree terms or even believe that you had agreed terms to purchase?". I, ofcourse said yes. He then said, "In that case, we will proceed with the sale toyou as our reputation for straight dealings is important." The purchases werecompleted shortly thereafter and we still hold these properties, which haveproved a wonderful investment. In the early 70s, my then wife invited a girlfriend from "up North" to live withus until she found a job in Central London and then suitable livingaccommodation. She stayed with us for about six months. It certainly was nohardship as she was beautiful, good-natured and always cheerful. Whilst I can'tremember any of her job interviews, she certainly had a succession of suitorsand one such suitor I remember well. One Sunday morning, I heard a noise like Concorde taking off, looked out of thedoor and saw a car, such a bright red, I needed sunglasses and so low one couldhave driven it under my gates. That day's beau sprang out of his car and camein. He was of medium height, slim, remarkably good-looking with long black hair,dressed immaculately in a sharp dark suit, shirt and tie. I invited him in towait as my house-guest was not yet ready, having after all had only three and ahalf hours to do so. I considered myself in "loco parentis" and so, I questioned him about hisprospects and where and what he did for a living. He was very amiable and talkedabout his dress shop off Bond Street where he sold designer dresses at adiscount, explaining that all women love designer clothes and everybody likes adiscount. He told us (my business partner Malcolm was there at the time) howwell he was doing and that he was about to take his second shop also in the WestEnd. He was also looking for lots more shops and said "one day I will be thebiggest retailer in the country". After this flashy young lad left with hisdate, Malcolm and I laughed and joked about how from one short leasehold shop hewas going to be the biggest retailer in the country. Over the next 20 years I began to read about him and his many business successesand failures until on one such occasion I read he had acquired a small retailgroup which included freehold ownership of some properties that interested me.Via a mutual friend, I arranged to meet him. He did not recall our originalmeeting. However, since that meeting he had put on about two stone in weight,had slightly thinning hair going grey at the temples, and wore his shirtopen-necked. We once again, due to our mutual interest in business and property,got on quite well and discussed the subject for nearly two hours. It wasobvious, however, that he was too "on the ball" for me to acquire any bargains.So eventually, we said our goodbyes. A few years later I was out with my wife who was shopping in Oxford Street. Itwas a nice sunny summer day and whilst my wife was foraging in a large shop nearthe corner of New Bond Street, I was casually standing in the street outsidewatching the world go by. I suddenly noticed amongst the crowds of pedestrians my successful retailerfriend, who was then a little heavier with a little less hair, walking at atremendous pace towards me with grim determination on his face. I stopped him"What's the rush, are you late for a date?" This time he recognised me, brokeinto a big smile and stopped for a general business chat. He explained he hadjust bought a very large countrywide group of shoe shops and from his two bigshops at either end of Oxford Street, he could tell what stock sold well. If thestyle of shoes did not sell well, he arranged for all shops throughout thecountry to immediately halve the price until they started to sell. He explainedthe stock that came with the group purchased had been written down prior to hispurchase by so much that practically any selling price was a profit. We chatted for about half an hour until my wife had finished examining thecomplete contents of the shop and returned. Business conversation over, he thenhad to rush off to his other shop. That was about seven or eight years ago, andI have not met him since as he has gone onto much bigger and better deals wayout of my league. The person in my first story was a Mr Peter Green, who with great propertyknowledge and integrity over the years had worked his way up to the top propertyposition in the Pru and jealously guarded the integrity and reliability andtrustworthiness of his institution. I often admire people who can work their way up a huge organisation to achievesuccess and someone else I have never met but who fits the bill perfectly andhas succeeded over 26 years doing a magnificent job in one of my favourite banksof steering it through troubled times is Stephen Green, Group Chairman of HSBCPLC. The person in my second story was Britain's own home grown favourite,billionaire Phillip Green, whose early and continual dedication, determination,energy and love of the cut and thrust of business life has helped him achievewhat he said he would do some 34 years ago. Now these are the type of "Greens" this country needs more of, not the "NambyPamby" selective fact stating, fact bending, self proclaimed do-gooders,rule-makers, rubbish-separators, environmentalist, world-saving, bossy-boots,who seem to have infected all areas of public life, whose usually publicly-paidincome appears to be directly related to the amount of rubbish they spout forth. Oh, for a few thousand more of the useful Greens. For further information, please contact: Andrew Perloff, ChairmanSimon Peters, Finance DirectorPanther SecuritiesTel: 020 7278 8011 William AttwellCity Profile020 7448 3244 CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2007 Notes 31 December 31 December 2007 2006 £'000 £'000 Revenue 2 9,516 9,722 Cost of sales 2 (2,576) (2,930) -----------------------------Gross profit 6,940 6,792 Other income 86 153Administrative expenses (2,291) (2,503) ----------------------------- 4,735 4,442 Profit on the disposal of investment properties 5,457 438Movement in fair value of investment properties 182 6,081 ----------------------------- 10,374 10,961 Finance costs (1,847) (2,669)Investment income 488 490Profit on disposal of available for saleinvestments (shares) 77 497Fair value loss on derivative financial assets (3) -Surplus of assets acquired over consideration given - 15Share of results from Associate - (25) -----------------------------Profit before income tax 9,089 9,269 Income tax expense 3 (1,646) (1,924) -----------------------------Profit for the year 7,443 7,345 =============================Attributable to:Equity holders of the parent 7,509 7,387Minority interest (66) (42) -----------------------------Profit for the year 7,443 7,345 =============================Earnings per shareBasic and diluted 5 44.3p 43.5p ============================= CONSOLIDATED BALANCE SHEET As at 31 December 2007 Notes 31 December 31 December 2007 2006ASSETS £'000 £'000Non-current assets:Property, plant and equipment 24 21Investment property 7 101,200 104,521Derivative financial asset 572 -Available for sale investments (shares) 5,209 2,051 ----------------------------- 107,005 106,593 -----------------------------Current assets:Inventories 376 269Stock properties 9,165 9,374Available for sale investments (shares) - 423Trade and other receivables 2,992 3,369Cash and cash equivalents 12,572 7,736 ----------------------------- 25,105 21,171 -----------------------------Total assets 132,110 127,764 ============================= EQUITY AND LIABILITIESEquity attributable to equity holders of theparentCapital and reserves:Share capital 4,230 4,250Share premium account 2,886 2,886Capital redemption reserve 591 571Retained earnings 9 70,901 65,562 ----------------------------- 78,608 73,269Minority interest 27 93 -----------------------------Total equity 78,635 73,362 -----------------------------Non-current liabilities:Long-term borrowings 35,011 36,989Derivative financial liability 575 -Deferred tax liabilities 9,321 12,272 ----------------------------- 44,907 49,261 -----------------------------Current liabilities:Trade and other payables 4,696 4,364Short-term borrowings - 135Current tax payable 3,872 642 ----------------------------- 8,568 5,141 -----------------------------Total liabilities 53,475 54,402 -----------------------------Total equity and liabilities 132,110 127,764 ============================= CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE For the year ended 31 December 2007 Notes 31 December 31 December 2007 2006 £'000 £'000 Movement in fair value of available forsale investments (shares) taken to equity 227 276 Deferred tax relating to movement in fairvalue of available for sale investments(shares) taken to equity (60) (156) -----------------------------Net income taken directly to equity 167 120 Profit for the year 7,443 7,345 -----------------------------Total recognised income and expense for the year 7,610 7,465 ============================= Attributable to:Equity holders of the parent 7,676 7,507Minority interest (66) (42) ----------------------------- 7,610 7,465 ============================= CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2007 Notes 31 December 31 December 2007 2006 £'000 £'000CASH FLOWS FROM OPERATING ACTIVITIESProfit before interest, investment income and tax 4,735 4,442Less: Profit on sale of non current assets (4) -Add: Depreciation charges for the year 12 9Less: Provisions against available for sale - (12)investments (shares) - current assets -------------------------Profit before working capital change 4,743 4,439(Increase) in inventory (107) (70)Decrease in available for sale investments (shares) 99 -Decrease in stock properties 209 160Decrease in receivables 377 25Increase / (Decrease) in payables 565 (203) -------------------------Cash generated from operations 5,886 4,351 Interest paid (2,080) (2,730)Income tax paid (1,427) (1,424) -------------------------Net cash from operating activities 2,379 197 CASH FROM INVESTING ACTIVITIESPurchase of plant and equipment (15) (10)Purchase of investment properties (9,324) (1,648)Purchase of available for sale investments (shares) - current assets - (1) - non current assets (3,158) (200)Net cash acquired with subsidiary - 361Proceeds from sale of fixed assets 4 -Proceeds from sale of investment properties 18,284 3,527Proceeds from the disposal of available for sale investments (shares) - non current assets 628 1,969Dividend income received 53 45Interest income received 435 445 -------------------------Net cash from investing activities 6,907 4,488 FINANCING ACTIVITIESRepayment of loan (2,113) (9,625)Investment in own shares for cancellation (297) -Dividends paid (2,040) (1,870) -------------------------Net cash used in financing activities 4,450 (11,495) Net increase / (decrease) in cash and cash equivalents 4,836 (6,810) Cash and cash equivalents at the beginning of year 7,736 14,546 -------------------------Cash and cash equivalents at the end of year 12,572 7,736 ========================= NOTES TO THE PRELIMINARY ANNOUNCEMENT For the year ended 31 December 2007 1. General Information While the financial information included in this preliminary announcement hasbeen prepared in accordance with International Financial Reporting Standards(IFRSs), this announcement does not itself contain sufficient information tocomply with IFRSs. The Company expects to publish full financial statements thatcomply with IFRSs in May 2008. The financial information set out in the announcement does not constitute thecompany's statutory accounts for the years ended 31 December 2007 or 2006. Thefinancial information for the year ended 31 December 2006 is derived from thestatutory accounts for that year, which were prepared under IFRSs, which havebeen delivered to the Registrar of Companies. The auditors' opinion on thoseaccounts was unqualified and did not contain a statement under s237(2) or (3)Companies Act 1985. The statutory accounts for the year ended 31 December 2007 will be finalised onthe basis of the financial information presented by the directors in thispreliminary announcement and will be delivered to the Registrar of Companiesfollowing the company's annual general meeting. The accounting policies adopted in the preparation of these condensedconsolidated preliminary results are consistent with those set out in theGroup's Annual financial statements for the year ended 31 December 2006, with the exception of the adoption of IFRS 7 'Financial Instruments: Disclosures'. There is no material seasonality associated with the Group's activities. 2. Revenue and cost of sales The majority of the revenue cost of sales and profit before taxation isattributable to the principal activity of the Group and all of which iscontinuing. All revenue and cost of sales of this activity arose in the UnitedKingdom. The Groups main business segment, being that of investment and dealingin property and securities. M.R.G. Systems Ltd is a separate business segment whose principal activity isthat of electronic designers, engineers and consultants. 70% of its revenuesarose in the United Kingdom and 100% of its cost of sales. Its net contributionto profits in the year was a loss of £(240,000). The split of assets, and tax effect of each segment is not shown as these arenot material in relation to M.R.G. Systems Ltd.Turnover arose as follows: 2007 2006 £'000 £'000 Rental income from investment properties 6,673 6,648Rental income from stock properties 853 862Income from sale of stock shares 114 -Income from sale of stock properties 237 1,007Income from trading (M.R.G. Systems Ltd) 1,639 1,205 ------------------------- 9,516 9,722 ========================= Cost of sales arose as follows: 2007 2006 £'000 £'000 Cost of sales - from rental income 1,340 1,695Stock shares recognised as an expense 99 -Stock properties recognised as an expense 138 514Cost of sales - trading (M.R.G.Systems Ltd) 999 721 ------------------------- 2,576 2,930 ========================= 3. Taxation The charge for taxation comprises the following: 31 December 31 December 2007 2006 £'000 £'000 Current year UK corporation tax 4,562 1,108Prior year UK corporation tax 95 (290)Current year deferred tax (3,011) 1,106 -------------------------Income tax expense for the year 1,646 1,924 ========================= Corporation tax is calculated at 30% (2006 - 30%) of the estimated assessableprofit for the year. 4. Dividends Amounts recognised as distributions to equity holders in the period: 31 December 31 December 2007 2006 £'000 £'000 Final dividend for the year ended 31 1,020 850December 2006 of 6p (2005 - 5p) per shareInterim dividend for the year ended 1,020 1,02031 December 2007 of 6p (2006 - 6p) per share ------------------------- 2,040 1,870 ========================= The Directors recommend payment of a final dividend of 6p per share (2006 - 6p).The final dividend will be payable on 27 June 2008 to shareholders on theregister at the close of business on 26 May 2008. 5. Earnings per ordinary share (basic and diluted) The calculation of earnings per ordinary share is based on earnings, afterexcluding minority interests, of £7,509,000 (2006 - £7,387,000) and on16,958,402 ordinary shares being the weighted average number of ordinary sharesin issue during the year (2006 - 16,998,151). 6. Net assets per share 31 December 31 December 2007 2006 £'000 £'000 Total equity attributable toshareholders per 25p ordinary share 465p 431p ========================== The calculation of net asset per ordinary share is based on the equityattributable to share holders of the equity in the parent company, and on16,918,651 ordinary shares being number of ordinary shares in issue at 31December 2007 (16,998,151 for 31 December 2006). 7. Investment property Investment Properties £'000Fair valueAt 1 January 2006 99,881Additions 1,648Disposals (3,089)Revaluation increase 6,081 --------------------------At 1 January 2007 104,521Additions 10,864Disposals (14,367)Revaluation increase 182 --------------------------At 31 December 2007 101,200 ==========================Carrying amountAt 31 December 2007 101,200 ==========================At 31 December 2006 104,521 ========================== At 31 December 2007, £78,080,000 (2006 - 79,256,000) and £23,120,000 (2006 -£25,265,000) included within the net book value of land and buildings relates tofreehold and leasehold land and buildings respectively. On the historical cost basis, investment properties would have been included asfollows: 2007 2006 £'000 £'000 Cost 58,567 54,652Cumulative depreciation - - -------------------------Net book amount 58,567 54,652 ========================= At 31 December 2007, the investment properties were independently revalued attheir open market value as at that date by DTZ, Chartered Surveyors inaccordance with the Statement of Asset Valuation Practice and Guidance Notes published by the R.I.C.S. and in accordance with international valuation standards. The property rental income earned by the Group from its investment property, allof which is leased out under operating leases, amounted to £6,673,000 (2006 -£6,648,000). 8. Annual General Meeting The Annual General Meeting will be held on 18 June 2008. 9. Retained earnings 31 December 31 December 2007 2006 £'000 £'000 At 1 January 65,562 59,925Profit for the period 7,509 7,387Movement in fair value of available for sale investments (shares) taken to equity 227 276 Deferred tax relating to movement in fair value of available for sale investments (shares) taken to equity (60) (156) Shares purchased for cancellation (297) -Dividends paid (2,040) (1,870) -------------------------- 70,901 65,562 -------------------------- 10. Copies of the Report and Accounts will be posted to shareholders shortly andwill be available from the Company's registered office at Panther House, 38 Mount Pleasant, London WC1X 0AP and on the Group's website www.panthersecurities.co.uk. This information is provided by RNS The company news service from the London Stock Exchange