TAP.L Regulatory News (TAP)

25 Apr 2007 07:01

Teesland Advantage Property Inc Tst25 April 2007 TEESLAND ADVANTAGE PROPERTY INCOME TRUST LIMITED PRELIMINARY ANNOUNCEMENT OF ANNUAL RESULTS The Directors announce the statement of results for the year ended 31 December2006 as follows:- CHAIRMAN'S STATEMENT Commenting on the results for the year the Chairman said: "I am pleased to beable to report good progress for the year, a secondary equity raising almostdoubled the size of the Company and the net asset value total return was 14.0%. The Company has significantly increased both its gross assets during the yearand its investor base. TAP continues to offer among the highest dividend yields of all UK listedproperty investment companies at 5.65%. TAP's shares were trading at a modestdiscount to net asset value at the end of the year, in common with most of itspeer group. The advent of Real Estate Investment Trusts ("REITs") does notappear to have had any significant impact on other listed property investmentcompanies, most of which continue to offer higher yields than REITs. RESULTS During the year the Company successfully completed a placing of C Shares (the"Placing"), raising an additional £71 million of equity capital. The purpose ofthe Placing was to improve the long term prospects for the Company's investmentportfolio by increasing the liquid assets available to invest in properties withopportunities to generate capital gains through active asset management, toincrease the level of diversification within the portfolio and to expand theshareholder base. TAP was, prior to the Placing, the smallest company withinits peer group and the Board of Directors believed that this was dissuadingcoverage being given to the Company by the investment community, resulting in alack of liquidity in the Company's shares. The shareholder base has increasedsubstantially since the Placing. The net asset value of TAP's shares increased from 107.89p to 117.29p over thecourse of the year. This is equivalent to capital growth of 8.7%. Whilst thispercentage increase is lower than that of the wider property market, it doesinclude the costs associated with the Placing and reflects the Company's limitedexposure to the Central London office sector, which generated strong capitalgains during the year under review. TAP remains focused on income and incomegrowth. The enlarged portfolio is higher yielding than the market average at6.1% on value and shows good prospects for income growth. Most of the additional capital raised pursuant to the Placing was investedimmediately in a portfolio of properties with a book value of £79.2 million attime of purchase. Many of the assets within this portfolio had opportunities toadd value through active management and a detailed report on the progressachieved on this and other investments will be included in the Property FundAdviser's report in the Company's report and financial statements, which areexpected to be published shortly. DIVIDENDS TAP has continued to pay dividends at a rate of 6.5p per annum per share, givingrise to a current dividend yield of 5.65%, based on the year end share price. The Directors propose to maintain the current policy of paying four quarterlydividends and intend to declare such dividends in each of February, May, Augustand November. GEARING At the end of December, the Company had bank debt of £96.5 million equivalent to37.2% of gross property assets. Of this debt, the interest rate on £82.2million has been fixed at an average of 4.89% (before margin) and the interestrate on the remaining £14.3 million is floating. The total cost of servicingthis debt is currently approximately 5.8% per annum. Interest rates may have alittle further to rise but with UK inflation expected to fall back towards 2% inthe coming months interest rates are judged to be close to the top of thecurrent cycle. The bank debt is made up of two facilities: one from HBOS for £73.3 million, ofwhich £58.1 million had been drawn down at the financial reporting date and onefrom Capmark for £38.4 million, which has been fully drawn down. FUTURE PROSPECTS The property market completed another year of strong capital growth in 2006 and,despite the fall in yields that has occurred, continues to provide investorswith relatively high income compared with other investment classes. Theconsensus forecast for UK property remains reasonably attractive, with predictedtotal returns of 7-8% for 2007 and over the medium term. TAP has a diversified, balanced portfolio, which is well let with few voids and,considered together with the pro-active asset-management style of the PropertyFund Adviser, your Board believes that attractive returns can be generated overthe coming year through a combination of anticipated increases in capital valueacross the property sector as a whole and the release of value created fromasset management opportunities within the portfolio. DIRECTORS AND ADVISORS Firstly, I must record my appreciation of our professional advisers for theircontinued help and support. I would also like to thank my fellow directors andthe Property Fund Adviser, Teesland Asset Management Limited, for theircontributions to the successful progress of the Company." CHRISTOPHER N FISHChairman 24 April 2007 GROUP INCOME STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2006 Year to 31 Year to 31 December 2006 December 2005 £ £RevenueRental income from investment properties 15,065,627 9,385,211 ExpenditureProperty outgoings (1,657,059) (485,623)Asset manager's fee (2,105,646) (1,075,034)Other expenses (468,956) (428,132)Set up costs - (514,254) (4,231,661) (2,503,043) Net operating profit for the year before 10,833,966 6,882,168finance costs Finance income / (costs)Interest receivable 741,207 238,588Interest payable and similar charges (5,851,906) (3,202,871)Amortised debt issue costs (243,560) (85,707) (5,354,259) (3,049,990) Net profit on ordinary activities before 5,479,707 3,832,178taxation Taxation on net profit on ordinary (265,536) (366,005)activities Net profit on ordinary activities after 5,214,171 3,466,173taxation Profit from investmentsProfit on sale of investment properties 406,360 -Profit on revaluation of investment 15,556,112 11,482,293properties Net profit for the year 21,176,643 14,948,466 Dividend per share 5.66 p 4.16 p Earnings per share (diluted & undiluted) 15.72 p 21.95 p GROUP BALANCE SHEET AS AT 31 DECEMBER 2006 As at 31 As at 31 December 2006 December 2005 £ £Non-current assetsInvestment properties 255,124,902 137,087,117Reverse lease premium 4,041,098 4,527,883 259,166,000 141,615,000 Current assetsCash and cash equivalents 5,083,342 2,983,110Debtors 4,394,653 2,371,722 9,477,995 5,354,832Total assets 268,643,995 146,969,832 Current liabilitiesCreditors due within one year (6,517,091) (5,336,200)Income tax payable - (94,460) (6,517,091) (5,430,660) Non-current liabilitiesBank loan (96,538,600) (58,062,000)Fair value of swap instrument 104,854 (2,266,253)Debt issue costs 1,735,824 785,980 (94,697,922) (59,542,273)Net Assets 167,428,982 81,996,899 Represented by:Share capital 1,427,473 760,002Share premium 68,844,113 -Reserves 97,157,395 81,236,897 Shareholders' funds 167,428,982 81,996,899 117.29 p 107.89 pNet asset value per share GROUP STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2006 Issued Share Share Revenue Other Capital Premium Reserve Reserve Total £ £ £ £ £ Opening at 1 760,002 - 72,630,577 8,606,320 81,996,899January2006Shares 667,471 70,332,529 - - 71,000,000issued inthe yearShare issue - (1,488,416) - - (1,488,416)expensesNet results - - 5,214,171 15,962,472 21,176,643for theyearFair Valuegain onhedginginstrument - - - 2,371,107 2,371,107Dividends - - (7,627,251) - (7,627,251)paid At 31 1,427,473 68,844,113 70,217,497 26,939,899 167,428,982December2006 GROUP STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2005 Issued Share Share Revenue Other Capital Premium Reserve Reserve Total £ £ £ £ £ Opening at 1 2 - (1,193,977) (609,720) (1,803,695)January2005Shares 760,000 75,240,000 - - 76,000,000issued inthe yearShare issue - (1,721,532) - - (1,721,532)expensesShare - (73,518,468) 73,518,468 - -premiumreductionNet results - - 3,466,173 11,482,293 14,948,466for theyearFair Valueloss onhedginginstrument - - - (2,266,253) (2,266,253)Dividends - - (3,160,087) - (3,160,087)paid At 31 760,002 - 72,630,577 8,606,320 81,996,899December2005 GROUP CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2006 Year to 31 Year to 31 December 2006 December 2005 £ £ Operating activities Net operating profit for the period before finance 10,833,966 6,882,168costsAdjustment for:Increase in operating debtors (50,429) (626,053)(Decrease) / Increase in operating creditors (2,423,263) 352,421Reverse premium amortisation 486,785 159,963 8,847,059 6,768,499Interest received 741,207 238,588Interest paid (6,627,542) (4,234,080)Taxation paid (103,494) (178,341)Deferred tax 7,289 - Net cash inflow from operating activities 2,864,519 2,594,666 Investing activitiesPurchase of investment properties (24,163,950) (20,709,824)Purchase of subsidiary undertaking (100) -Cash acquired with subsidiary undertaking 2,076,052 -Reverse premium paid - (3,287,846)Proceeds from sale of investment properties 3,113,816 - Net cash outflow from investing activities (18,974,184) (23,997,670) Financing activitiesProceeds from issue of ordinary share capital 71,000,000 76,000,000Share issue costs (1,488,416) (1,721,532)Loans from shareholders (5,334,436) (10,890,500)Repayment of bank loans (38,340,000) (35,603,807)Dividends paid (7,627,251) (3,160,086)Debt issue costs - (871,687) Net cash inflow from financing activities 18,209,897 23,752,388 Net increase in cash and cash equivalents 2,100,232 2,349,384Opening cash and cash equivalents 2,983,110 633,726 Closing cash and cash equivalents 5,083,342 2,983,110 For further information: Brett Robinson, Teesland plc: 020 7659 6666Darren Fennell, Teesland plc 020 7659 6666Jeremy Carey/Richard Sunderland Tavistock Communications Limited 020 7920 3150Anson Fund Managers Limited, Company Secretary 01481 722260 24 April 2007 END OF ANNOUNCEMENT E&OE - in transmission This information is provided by RNS The company news service from the London Stock Exchange