Panther Securities Regulatory News (PNS)

26 Apr 2005 09:30

Panther Securities PLC26 April 2005 CHAIRMAN'S STATEMENT IntroductionIt has been an exciting and busy year. I am delighted to report that our pre taxprofit for the year ended 31st December 2004 amounted to £3,139,000 compared to£3,413,000 last year. However, these figures do not include the £6,670,000realised profit transferred from revaluation reserves. This realised profit previously shown in our reserves arose from the sale of ourlargest asset, the Panther House complex, together with some other smaller salesmentioned below. Despite these sales, our rental income receivable increased toa very healthy level of slightly over £9 million for the year. Eurocity Properties PLCOn 27th May 2004 we sold Eurocity (Crawley) Limited, a wholly owned subsidiaryof Eurocity Properties PLC. The company was sold for £718,000 less selling costswhich was satisfied by a cash payment of £68,000 and £650,000 in shares and loannotes in Real Estate Investors PLC which was a new AIM listed property company.In addition the purchasers repaid the inter-company debt due of £634,000 incash. The ordinary shares were issued to us at the placing price of 10p each.The current market price is 10.5p per share which means that if sold at thesevalues we would recoup most of the cost of Eurocity Properties PLC from onethird of its assets. Panther House/Gray's Inn Road/Churchills public housePanther House, Mount Pleasant and 156/164 Gray's Inn Road, London WC1 were soldat auction in July 2004. They sold for £8,810,000, a figure which matched ourmost optimistic expectations and Churchills public house in Mount Pleasant wassold after the auction at £940,000. Yardworth Limited, our wholly ownedsubsidiary, took a 5 year management lease (with an option to break at the endof the 2nd year) on Panther House at £400,000 per annum. This is mostly coveredby income from sub-licensees but includes a rent for the use of the offices weoccupy. Most shareholders will know that Panther House was the company's Head Office for70 years. It was initially bought by the original Levers Optical Company when itwent public in 1934 and, since my involvement with the company in 1972 we havestrenuously endeavoured to maximize its value. Our first step was to create London's first business centre offering smalllicensed units available at affordable terms to developing/embryonic businesses.We subsequently acquired an adjoining leasehold and negotiated for 25 years withLondon Regional Transport to acquire their freehold interest of this leaseholdproperty. At the same time we started to put forward various applications forplanning permission to further develop the site - all to little avail but muchfrustration. The final outcome was financially successful after years of effort. Hawtin PLCOn 21st June we acquired 15% of Hawtin PLC, an AIM listed company, at a cost of£1,487,976 (Portnard Limited, one of my private companies, having previouslyacquired 14.5%). The purchase price in both instances was 13p per share. HawtinPLC was previously a conglomerate which, in recent years, had sold off all ofits trading businesses whilst retaining its freehold factories as investments.In addition it holds 35 acres of land in Blackwood/Gwent, South Wales which iszoned for residential and industrial use. The latest revalued book value ofHawtin PLC's net assets is approximately 16p per share. I have been appointed toits Board have confidence that our investment will be successful. Wickford, EssexFor some years we have owned a factory estate in Wickford, Essex which was heldon a long lease at a low fixed ground rent from Basildon District Council. InMay we purchased the freehold at auction for approximately £650,000 includingcosts and whilst this expenditure produces little extra income, the factoryestate is now freehold and the quality of the investment is much improved. Burslem, Stoke-on-TrentIn November 2004 we purchased a 1.6 acre freehold town centre factory investmentfor £900,000, producing £70,000 per annum rent from The Royal StaffordshireTableware Limited. The property comprises over 100,000 square feet ofaccommodation. AbraxusOn 17th November 2004 we acquired approximately 25% of the equity of this smallAIM listed shell company for about £300,000. Post Balance Sheet Trading EventsWe sold the Abraxus holding for £90,000 profit on 17th January 2005. Shareholders have been advised that on 28th February 2005 we completed the saleof Copthall House, Coventry, at a price of £9,250,000, which was £4,000,000 inexcess of its December 2003 independent valuation. We consider this was anexcellent result. Towards the end of February 2005, we also sold 14-18 King Street, Stirling,Scotland for £525,000. This was one of the Eurocity Properties portfolio andrealized approximately 10% in excess of its book value. The profits on all of these transactions will come into the current year'sfigures. FinanceIn December 2004 we completed arrangements for a new £75,000,000 seven year loanfacility with HSBC Holdings plc, who are our main lenders, and with whom we havehad an extremely good business relationship for over 24 years. The interest ratemargin was on slightly better terms than previously and £50,000,000 of this loanis now on a fixed rate. We still have approximately £24,000,000 of this facilityundrawn and available towards future investment acquisitions. DividendsAn Interim Dividend of 4p per share was paid on 29th October 2004 and theDirectors are recommending a final dividend of 4p per share for the year ended31st December 2004. In view of the sale of Copthall House in February 2005, theDirectors will be paying a special Interim Dividend of 10p per share for theyear in progress on the same date as the final dividend payment. My PensionA personal self-administered pension fund was set up for me in 1985 by theCompany which has made total contributions of approximately £280,000 (only onefifth of the maximum under the new lifetime limits). My fund has been verysuccessful and as is usual with this Government under the new "pensionsimplification process" I will be penalized for success with an extremely heavy55% tax charge should I wish to draw the maximum pension available to me in duecourse. To rectify this problem I am being paid a bonus of £350,000 for the yearending 31st December 2004, and again for the current year. I am proposing towaive my personal entitlement to the special 10p dividend payable in 2005 whichamounts to £426,000 so that other shareholders will not be unduly disadvantagedby my bonuses. The net cost to the company for the two years would be about£126,000. DirectorsIt is with much sadness that I have to report that Peter Rowson will be retiringafter this AGM. Peter has been with the Company for 32 years and throughout thattime has shown a loyalty, diligence and work ethic that is an example to us all.His ability to deal with all types of people and difficult situations calmly andfairly has long been a source of amazement to me. On behalf of all staff andshareholders I wish him well in his retirement. For some years now at our AGM I have been asked about succession on myretirement from active work, usually by shareholders who are much older than me.I have no intention of retiring at present, but to ensure continuity of theBoard, I am pleased to announce that we are appointing to our Board as from 1stJuly 2005 John Doyle (age 32), manager of our surveying department, John Perloff(age 36), letting manager, and Simon Peters (age 28), as finance director andcompany secretary. WHAT A SHAMBLESShareholders will by now be very well aware of my immense irritation at both thepervasive bureaucratic nightmare caused by ludicrous regulations imposed upon usall by those who claim to be "protecting our interests" and the excessiveamounts of taxation levied. Whilst I have only ever had shareholders comment that they agree with my views,I am sure some do not and are not interested in reading about some of myexperiences and views as they are not strictly relevant to the company'saccounts or progress. For this reason I have written a supplement to mystatement and shareholders thus can read or ignore my views. OutlookI comment at length in my supplement on the political situation which I believecreates the greatest risks and burdens to a small company such as ours. Your Board, however, are unanimous in its view that whilst caution is the orderof the day, our group, which holds over £20,000,000 in cash and with our undrawnfacilities is well equipped to take advantage of any opportunities that may comeour way or indeed the stormy financial conditions that are sure to arise afterthe next election. Finally I would like to thank all our staff, professional advisors and thenumerous firms we deal with and of course our tenants who have helped to makethis another successful year. A. S. PerloffChairman26th April 2005 WHAT A SHAMBLESPlanning /HousingIn the current climate with low interest rates and strong demand, builders anddevelopers could easily provide more housing at lower cost more affordably forfirst time buyers. There is a popular misconception that there is insufficientland on which to build. This statement is utter rubbish. The only bottleneck isthe incompetence in the planning process accompanied by local authorities'political correctness and their barely legal blackmail of developers with theirridiculous demands for money payments under section 106 agreements for socialhousing provision. Ministers have shed bucket-loads of crocodile tears over the lack of suitablelow cost housing for essential workers and first time buyers, and in an effortto shift the blame from themselves, commissioned a leading economist to reporton the housing market. Before Kate Barker even put her pen to paper I knew what conclusion thisgovernment will take from her report - TAX IT! - this is of course not theanswer to the problem. An investigation of the property market should also have looked at all theproperty auctions of the previous two or three years and seen what a huge amountof housing, developed buildings and land had been sold by local authorities,N.H.S. or other unaccountable bureaucratic bodies - much of this could have beenutilised towards solving the social housing and essential worker accommodationproblem. The reason why they sell outright is that the money is needed to pay for theBloated Payrolls & Pensions of all planners, town centre improvement officers/Bat/Spider/Newt protection officers, licensing officers, shopfront inspectors,ethnic advice/legal aid centres etc etc. These people are all very well paid,very well pensioned, have very good working conditions as well as having a workabsenteeism rate much higher than the private sector and of course well paidholidays, all of which are risk free and paid for by the general taxes/counciltax mostly provided by the private sector for whom they have so little regard. Our Company owns a vacant, derelict site in the centre of Ramsgate, which wouldbe ideal for 24/26 flats. Our architects consulted meticulously with theplanners as to what would be an acceptable development. Numerous revisions weremade until the planner was satisfied. The application was submitted withoptimistic expectation by our architects (not by me though!) and sure enoughthree or four months later the senior planning officer recommended theapplication should be refused, and it was. Almost as annoyingly, a week later Ireceived a letter, from a Ramsgate Town Centre's Improvement Officer,complaining about the derelict site and threatening us that if we did not bringit into use soon they might compulsorily purchase the property. They had a shortsharp answer to their letter which unfortunately required me to show someself-restraint in the way I normally express myself. I am currently in the process of trying to obtain planning permission to rebuildmy own house. This is normally a simple process as new for old is allowed evenin the "green belt" where I live. My application was submitted after longconsultation. After a suitable interval I phoned to ascertain when theapplication would be submitted to the planning committee and I was told it wasgoing to be refused by way of "delegated powers" by the senior planning officer.The reasons given were so patently incorrect that it was clear that the planningdepartment had not investigated the scheme at all. I phoned my local councillorto complain and to ask him to request that it be heard by the planning committee(only a councillor can make this request). It seemed the democratic processbegan to work. The councillor investigated the matter and the "delegatedrefusal" was abandoned and a thorough investigation was implemented whichrevealed the new house was only 10% bigger than the old house - not the 30% theplanning officer had actually believed. The planning officer did not believe theindependent computer calculations of cubic content and required hand writtencalculations. To further complicate matters we received a letter from "Batwoman"(Hertfordshire environment officer) who informed us that our area was known tohave bats and a bat survey was required. This we did and the "Batologist" lookedin the rafters, up the eaves, down the nooks and round the crannies. He did notfind Bats, but concluded that because it was hibernation time it was possible aBat family could be hidden almost anywhere. He did however find two tiny piecesof old bat droppings and thus a new survey will have to be carried out when MrBat Van Winkle wakes up. It appears a Bat family has the right to claim asylumin my rafters and would have to be provided with suitable alternativeaccommodation if I wish to redevelop. To date, no rare spiders, newts, frogs orflora have been found, all of whom appear to have "rights" which human CouncilTax payers do not appear to have. For 18 years I have owned an old cinema in Hyde, south of Manchester, which wasalways slightly unprofitable, but about 9 years ago, a multiplex cinema openednearby and thereafter I doubt if we even had 50 customers each week. The cinemawas closed and a planning application was made and granted for alternativeleisure uses and despite extensive marketing no user was forthcoming. EventuallyI obtained a new planning permission to demolish and rebuild with 29 much neededassisted flats on the site. Within four or five months a number of localresidents petitioned the heritage department - which after a cursory inspection- listed the property. The local residents are intent on converting the cinemaback to its original use as a theatre. The cost of this would be £2 to £3million and the losses on running this venture would be hundreds of thousands ofpounds a year. The theatre-lover promoters want lottery money for the capital costs and thelosses presumably to be paid by the local authority (none of their own money, ofcourse). I am a great believer in protecting our heritage, but this cinema is aparticularly unattractive building with a low level of Grade Listing. Theproposed squandering of so much public money is absurd as the building next doorto mine is a modern theatre which more than adequately provides for Hyde'sthespian needs. What is urgently required in Hyde is "Tuppence worth" of commonsense. Whilst these restrictions to develop are going on throughout the country, itappears that if you are a scruffy, mess making group of people who pay nocouncil tax, probably don't pay road tax or car insurance, but live (probably onstate benefits) in caravans, you can do as you like. The caravans you plonk downon green belt land, in nice areas, which have been bought cheaply because of thelack of possible planning permission, and if you call yourself "travellers",then judges override all the objections and planning laws and grant "livingrights" under the "human rights" act. That's the shambles of the planning system. TransportWe all know that there are too many cars on roads laid out before the fullimpact of the car transport revolution was fully understood. But how do ourrepresentatives deal with the problem? They employ thousands of road plannersand specialist traffic consultants who after much thought and deliberation onhow to improve traffic flow find the solution - BUS LANES - which reduce theuseable road space into major towns by 25%. This alone causes major delays andconfusion. However, once bus lanes had been implemented, many traffic plannersmay be out of a job - thus bicycle lanes are devised reducing fluidity andcreating more congestion. Further havoc is created by humps - bumps - bollardsand barricades being instigated - these of course have the added benefit ofneeding regular changes, when a new more efficient design for road impediment isdesigned. In the first three miles of my journey home (mainly through Islington) I go over60 bumps/humps - ie one every 100 yards. I calculate the extra cost to repairs/servicing the nation's stock of motor vehicles because of this persistentshaking is probably over £6 billion per year - I doubt if there are any netbenefits and probably explains why some of the 2.7 million people are able toclaim disability benefits because their bodies are being regularly jolted!!! Iam sure it is nothing to do with the fact that being classified as disabledmeans the state pays you £20 a week more than if you are on the dole or that ithelps to keep unemployment figures looking impressively low. This is bad enough, but in an effort to punish the motorist still further, notonly do local authorities forever carry out minor road works, they also allowany Tom, Dick or Harry of a utility company to dig up the road for their ownpurposes without proper consultation. These bodies do not liaise with eachother, thus making journeys on the roads far longer and more traumatic thannecessary. I am sure you will have noticed that the majority of road works whichare coned off, causing restricted traffic, rarely have any builders working. Ibelieve this is because jobs are awarded at lowest cost to contractors who takeon three or four times the work they have staff to immediately carry out - thushaving to take much longer on each job by moving workers from job to job to job.There is no consultation or consideration for the road user. This is the shambles of the roads. The local authority has to devise ways to allocate street parking for its ownresidents. It extracts more money from its residents by charging a fee for apermit to park near their own home on the roads already paid for out ofexorbitant petroleum taxes. Most people are happy to accept this allocationarrangement, but if a council creates 30,000 resident spaces it sells 40,000permits. (I understand this is the case with all London Boroughs, but obviouslythe figures vary): I call this fraud. It could be said "Airlines do the same". Yes of course this does happen andoccasionally we may get "bumped off a flight" but then compare what happens.Airline staff apologise profusely, offer alternative arrangements, free meals,compensate you with money or put you up at their cost at a nice hotel. Thecouncil's attitude to a resident who finds all the "resident spaces" full andwho either has to stop to take their children into school or collect a slowwalking elderly relative, or rush into a local chemist for an urgentprescription is to issue a parking ticket for £50 if you pay without question,the fine doubles if you dispute the situation. (This payment method I call softfraud) To escalate this fraud councils directly or indirectly employ a uniformed armyof people most of whom unfortunately seem uninterested in your personal parkingpredicament when you point out that you are a resident whose space has been soldtwice and used by someone else. Whilst still on roads it's worth mentioning that police forces up and down thecountry became jealous of the huge amounts of cash that local authorities weremilking from motorists and then realised they had the technology to grab theirshare of the loot - speed cameras. Under the false pretext of making roads safer, speed cameras proliferated. Thecameras are hidden away behind bridges or placed unobtrusively on dualcarriageway roads that should have higher speed limits or placed a few hundredyards before or after a fast road speed limit changes - especially placed tocatch the unwary. In the last three years numbers of speeding fines have gone upto an estimated 2.5 million per annum. Does this mean the public have taken upformula one racing on our streets? - of course not. It just means bettertechnology has allowed for more motorists to be milked of their cash. Thisadvanced camera/computer technology could easily be focused on "real" criminalswith stolen cars, non-taxed, non-insured, non-registered vehicles or convoys oftravellers moving towards some scenic area. But it won't happen - there is no money in catching criminals. TaxationWe have a grossly unjust taxation system upon which I have written at length inprevious reports but I still feel repetition is not amiss. Higher rate taxpayers, who as entrepreneurs substantially own the company theywork for, pay 40% income tax and over 20% National Insurance Tax on part oftheir income. The profit in the company is further taxed at 30%. The companyalso has paid: 3% or 4% stamp duty tax on property purchases; 5% insurancepremium tax; VAT at 17.5%, some of which is irrecoverable, and commercialproperty rates even on empty properties. After these deductions and corporation tax having been paid, if any money ispaid out in dividends a further 25% is paid by most recipient shareholders andwhen this money is spent by them a further 17.5% is paid in VAT on mostpurchases. In cases of purchases of petrol, cigarettes or alcohol, approximately80% is tax. Additionally, very high Local Council Taxes have to be paid. When one retires and sells one's assets, up to 40% tax can be taken in one hiton the capital appreciation even if it has taken 40 years to accumulate.Ultimately a further 40% tax is taken when you die. The government spending is over £8,000 per year for every single person in theUK. This level of taxation as well as being inequitable is a disincentive toenterprise and detrimental to the economy. Capital taxation on disposal of shareholdings in a large diversified propertyinvestment company such as ours which provides huge benefits to the smallbusiness and entrepreneurial economy of the country is taxed at the highestrate, whereas if one manufactured guns, land mines, poisons, flick-knives orparking warden uniforms one would receive the most favourable tax treatment. New legislation shortly coming into force will allow same sex marriages, whereleaving aside the potential for a "Brian Rix" theatrical farce out of this, oneasks why? - it is so some people whose sexual predilection is different from themajority can benefit from the tax benefits that married couples enjoy, egexemption from inheritance tax to one's partner on death, together with pensionand asset transfer rights. A widow and widower who choose to live together forcompanionship and to possibly ease the heavy cost of normal every day life andcouncil tax, or an elderly widow wanting to leave her home to a son, daughter orfriend who lives with her and looks after her don't get similar tax concessions- What a disgrace! It is truly ludicrous that inheritance tax payments can be different because ofone's sexual predilections. Morally repugnant is an inadequate description forsuch a tax system. Because same sex marriage is really only a tax concession, I would not besurprised in due course to see the Inland Revenue investigate "civilpartnership" agreements to test that it is not an "avoidance scheme" and to askfor visible proof that the partnership has been "properly consummated". With so much publicity recently of the 60th anniversary of the liberation ofAuschwitz I am reminded of many years ago when this company was still tryinghard to make a profit in our optical business, our top salesman was a EuropeanHolocaust survivor who spoke with a thick mid European accent, worked very hardand produced profitable sales for the company. I often felt that he had had morethan his fair share of misfortune in life. He had iron leg braces, his onlydaughter was disabled and when he rolled up his sleeves to collect the boxes ofspectacle frames he was selling, you could clearly see the tattooed number onhis arm which said volumes for the hardship he had suffered under ademocratically elected government. He never ever talked or complained aboutthese previous hardships - which was in some ways surprising considering hisnon-stop complaints about what was happening in our optical business. One day he stormed into my office complaining, about what, I cannot remember !but I remember his words well "Ven de fish shtinks it shtinks from de head". Atthat time I thought he meant that the two optical directors were letting himdown on supplying the goods he had sold to his customers either in theproduction process or delivering late. The words stuck in my memory andgradually I came to realise it referred to me - I was the ultimate head of theorganisation - I did not understand the business, or give it enough attentionand let things run on without proper guidance. I was occupied elsewhere withproblems in our property interests - I WAS THE STINKER! This story conveniently brings me to what is the cause of so many of ourproblems - Central Government. Legislation is enacted on a mass of subjects bypeople who have no experience in the subjects about which they are legislatingand they then compound the problem by not carrying out proper scrutiny. Vastamounts of money are allocated to cure perceived problems in the mistaken beliefthat this alone will create improvements. Increased taxation charges on pension funds have reduced considerably theexpectations of a comfortable retirement for millions. Current younger highachievers have had their ability to build a large pension fund curtailed, whilstthe M.P.s who passed the legislation, gold plate their own pension arrangementswith surreptitious amendments to the Finance Act and thus exclude themselves andthe judiciary from the pension fund limits. Once again it is a case of do what Isay and not as I do. Most business owners are forced to have intricate discussions with the InlandRevenue as to what are allowable business expenses - I doubt if M.P.s,especially M.E.P.s, have the same vigorous inspection for their own large taxfree expenses - wives, girlfriends etc etc all go on the payroll etc. M.P.s areallowed a second home allowance because it is assumed they need a house nearWestminster and one in their constituency. At least one MP claims £20,000 perannum for a second home when it is rented out at £20,000 per annum - THIS ISDISGRACEFUL. M.P.s don't pay the congestion charge. Many M.P.s don't pay the hugeenvironmental tax charge that company car owners have to pay. If an MP uses hisprivate car for his constituency business he is allowed to charge 57p per mile.Private owners using their car for business purposes are only allowed 40p permile - WHY? - most M.P.s have private parking provided for them untaxed - ifcompanies provide this for staff they are taxed as a benefit in kind. SomeLabour M.P.s promote restrictions on private education yet educate their ownchildren privately. They also recommend certain types of vaccination forchildren but almost certainly carry out different, more expensive and probablybetter vaccinations for their own children - in short, many M.P.s seem to bebloody hypocrites. In the early 19th century, the rapidly growing London was having health problemscaused by the huge amount of sewage flowing into the Thames, which at that timestill provided much of London's drinking water. However, when in 1858 a hotsummer produced such smells from the Thames that Parliament had to move out ofWestminster temporarily it was forced to provide the extra funds and impetus toenable Bazalgette to complete the new sewage system throughout London and which,amazingly, is still very much in use today. That year was called "The GreatStink" of 1858. When the populace as a whole realise how they have been ripped off with massiveadditional taxes for no extra benefit; have had over 1,000 new regulations withpotentially imprisonable offences foisted upon them (even Passports for Horses &Asses!!); have had uncontrolled and unquantified immigration to these shoreswithout consultation; have been persecuted insensitively by all and every formof authority, then I believe 2005 or 2006 might become this century's "GreatStink". This is why we are making a £25,000 donation to the Conservative Party -on the basis that they can run the country on a far more efficient, honest andequitable basis than the current bunch of STINKERS. CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31st December 2004 2004 2003 £000 £000 Turnover 9,292 9,791 Cost of sales (1,487) (1,654) ------- ------- Gross profit 7,805 8,137 Administrative expenses (1,988) (1,336) ------- ------- Operating profit 5,817 6,801 Income from current asset investments 45 426 Income from associate 37 (67) Profit on disposal of property 527 - Profit on sale of subsidiary 303 - Profit on disposal of investments 43 (20) ------- ------- Profit on ordinary activities before interest 6,772 7,140 Interest receivable 363 293 Interest payable (3,996) (4,020) ------- ------- Profit on ordinary activities before taxation 3,139 3,413 Taxation (1,605) (880) ------- ------- Profit on ordinary activities after taxation 1,534 2,533 Minority interests (4) 9 ------- ------- Profit attributable to members of the parent undertaking 1,530 2,542 Dividends (1,360) (2,125) ------- ------- Retained profit for the year 170 417 Transferred from revaluation reserve 6,670 - Retained profit brought forward 12,714 12,297 ------- ------- Retained profit carried forward 19,554 12,714 ------- ------- Earnings per share 9.0p 15.0p CONSOLIDATED BALANCE SHEET at 31st December 2004 2004 2003 £000 £000 Fixed assets Tangible assets 87,821 93,996Intangible asset - negative goodwill (571) (793)Investments 2,893 723 -------- -------- 90,143 93,926 -------- -------- Current assetsStock 9,755 8,790Current asset investments 323 797Debtors: due within one year 4,263 5,580Cash at bank and in hand 15,337 2,444 -------- -------- 29,678 17,611 -------- -------- Creditors:amounts falling due within one year (5,814) (5,767) -------- -------- Net current assets 23,864 11,844 -------- -------- Total assets less current liabilities 114,007 105,770 Creditors:amounts falling due after more than one year (58,925) (55,578) Minority interests (94) (90) -------- -------- Net assets 54,988 50,102 -------- -------- Capital and reservesCalled up share capital 4,250 4,250Share premium account 2,886 2,886Revaluation reserve 27,515 29,471Capital redemption reserve 571 571Negative goodwill reserve 212 210Profit and loss account 19,554 12,714 -------- -------- Equity shareholders' funds 54,988 50,102 -------- -------- Net assets per share 323.5p 294.8p CONSOLIDATED CASH FLOW STATEMENT for the year ended 31st December 2004 2004 2003 £000 £000 £000 £000 Cash flow from operating activities 7,360 2,242 Returns on investments and servicing of finance (3,594) (3,727) Taxation (1,353) (1,097) Investing activities 7,436 (3,388) Acquisitions and disposals (42) - Equity dividends paid (1,360) (2,036) ------- -------- Cash outflow before financing 8,447 (8,006) FinancingNet proceeds of share issue - 48 Increase in debt 4,447 750 ------- -------- 4,447 798 ------- -------- (Reduction)/Increase in cash in the period 12,894 (7,208) ------- -------- Reconciliation of net cash flow tomovement in net debt Increase/(Reduction) in cash in theperiod 12,894 (7,208) Cash inflow from increase in debt (4,447) (750) ------- -------- Change in net debt resulting from cash flows 8,447 (7,958) -------- -------- Movement in net debt in the period 8,447 (7,958)Disposal of debt on sale of subsidiary 1,732 -Net debt at 1st January 2003 (53,977) (46,019) -------- -------- Net debt at 31st December 2003 (43,798) (53,977) -------- -------- At 1st At 31st January Cash Other December 2004 Flow Movements 2004 £000 £000 £000 £000Analysis of net debtCash at bank 2,444 12,893 - 15,337Overdrafts (1) 1 - - -------- -------- -------- -------- 2,443 12,894 - 15,337 -------- -------- -------- -------- -Net debt due after 1 year (55,576) (5,087) 1,738 (58,925)Net debt due within 1 year (844) 640 (6) (210) -------- -------- -------- -------- (56,420) (4,447) 1,732 (59,135) -------- -------- -------- -------- Total (53,977) 8,447 1,732 (43,798) CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the year ended 31st December 2004 2004 2003 £000 £000 Profit for the financial year after taxation and minority interest 1,530 2,542 Unrealised surplus on revaluation of properties and investments 4,714 11,399 ------ -------Total gains and losses relating to the year 6,244 13,941 ------ ------- NOTE OF CONSOLIDATED HISTORICAL COST PROFITS AND LOSSES for the year ended 31st December 2004 2004 2003 £000 £000 Reported profit on ordinary activities before taxation 3,139 3,413Realisation of property revaluation gains 6,670 - ------ ------- Historical cost profit before taxation 9,809 3,413 ------ ------- Historical cost retained profit 170 417 ------ ------- Notes 1. Basis of preparation - Report and Accounts The preliminary results of the group, which are not statutory accounts, havebeen prepared on the basis of the accounting policies as set out in the reportand accounts for the year ended 31 December 2003. The financial information for the year ended 31st December 2003 is extractedfrom the group's financial statements to that date which received an unqualifiedauditor's report and have been filed with the Registrar of Companies. The group accounts for the year ended 31st December 2004 have not yet been filedwith the Registrar of Companies or reported on by the auditors. 2. Dividends The company has already paid an interim dividend of 4p per share (net) (2003:3.5p (net)) and the Directors now recommend payment of a final dividend of 4pper share (net) (2003: 4p (net)). The final dividend will be payable on 28thJune 2005 to shareholders on the register at the close of business on 27th May2005. 3. Earnings The calculation of earnings per ordinary share is based on earnings, afterminority interests, of £1,530,000 (2003 - £2,542,000) and on 16,998,151 ordinaryshares being the weighted average number of ordinary shares in issue during theyear (2003 - 16,922,408). 4. Annual General Meeting The Annual General Meeting will be held on 23rd June 2005. 5. Copies of the Report and Accounts will be posted to shareholders shortly andwill be available from the Company's registered office at Panther House, 38Mount Pleasant, London WC1X 0AP. This information is provided by RNS The company news service from the London Stock Exchange