TAP.L Regulatory News (TAP)

26 Sep 2007 07:00

Teesland Advantage Property Inc Tst26 September 2007 TEESLAND ADVANTAGE PROPERTY INCOME TRUST LIMITED (the "Company") PRELIMINARY ANNOUNCEMENT OF INTERIM RESULTS The Directors announce the statement of results for the period from 1 January to30 June 2007 (the "Period") as follows:- CHAIRMAN'S STATEMENT I am pleased to report another successful half year, with gross assetsincreasing to £274 million. Activity has been high with five property acquisitions made during the periodand five sales at a combined increase of 8.4% over the prevailing valuations. Inaddition eleven new lettings were completed during the period as well as tenlease renewals and rent reviews. The property portfolio now has an income yieldon value of 6.00%, well above the IPD Monthly Index level of 4.92%. This yieldtogether with an average unexpired lease term of 7. 41 years and an averagevacancy rate of 3.3% provides the TAP portfolio with strong income generatingcharacteristics. In recent months there has been a significant decline in the value of REITs andother UK listed property companies. This appears to reflect a shift in sentimentaway from the sector in the light of lower forecasts for returns over the nextfew years. Yield compression in the UK property market has come to an end andsome parts of the market have already seen modest increases in yields. The offshore listed sector, of which TAP is part, has seen share price fallsthat are less substantial than those suffered by UK companies, the higher yieldsavailable from offshore property companies being an attraction to investors. TAP's shares were trading at a discount of around 13% to net asset value as at14 August 2007. Whilst it is disappointing to observe this, the companies withinthe sector are generally trading at similar discounts. Your Board is mindful ofthe authority it has to buy back the Company's shares, but has decided that thisis not appropriate at the present time. The Board will monitor the situation andinstitute buy backs if it is considered to be in the best interests ofshareholders. After the end of the period under review, on 3 September 2007 Trefick Limitedannounced that it had acquired 29.12% of the Company's shares. RESULTS The net asset value of the Company at 30 June 2007 has increased to 119.3p anincrease from 117.3p as at 31 December 2006. Profit before tax, excludingunrealised gains on investments, for the first half of the year totalled £2.59million. Unrealised gains on the investment properties amounted to £1.65 millionduring the period. The NAV total return, defined as change in NAV plus dividendspaid, was 4.5% over the same period. GEARING TAP currently has approximately 72% of its debt fixed until at least 2013. TheCompany has long term debt of £113.4 million from two lenders, and a further£22.4 million of undrawn debt capacity. The average total cost of all debt, bothfixed and floating and inclusive of margin, with LIBOR at 6%, is estimated at5.97%. With a substantial proportion of its debt hedged, TAP is well protected againsta fluctuating interest rate environment. FUTURE PROSPECTS The property market in the UK has delivered reasonable performance in the firsthalf of the year, with a total return of 4.4%1 . Slowing market conditions havehowever reduced consensus2 total return expectations for the whole of 2007 are8.1%. The forecasts for 2008 are more subdued with five year total returns to2011 forecast to be 5.7% p.a. Whilst these expectations point to morechallenging investment conditions, TAP is well positioned with a diversifiedportfolio and undrawn debt facilities to enable the Company to take advantage ofnew opportunities as and when they arise. Christopher FishChairman 25 September 2007 1 IPD Monthly Index2 Investment Property Forum Consensus Forecast Survey, August 2007 GROUP INCOME STATEMENTFOR THE SIX MONTHS ENDED 30 JUNE 2007(UNAUDITED) Year to Six months to Six months to 31 December 30 June 2007 30 June 2006 2006 £ £ £RevenueRental income from investmentproperties 8,039,702 7,078,455 15,065,627 ExpenditureProperty outgoings (1,007,262) (537,345) (1,657,059)Asset manager's fee (1,156,429) (982,986) (2,105,646)Other expenses (334,176) (285,118) (468,956) (2,497,867) (1,805,449) (4,231,661) Net operating profit for the periodbeforefinance costs 5,541,835 5,273,006 10,833,966 Finance income / (costs)Interest receivable 159,836 523,248 741,207Interest payable and similarcharges (2,982,705) (3,331,239) (5,851,906)Amortised debt issue costs (120,491) (127,612) (243,560) (2,943,360) (2,935,603) (5,354,259) Net profit on ordinary activitiesbeforetaxation 2,598,475 2,337,403 5,479,707 Taxation on net profit on ordinaryactivities (99,656) (76,273) (265,536)Net profit on ordinary activitiesaftertaxation 2,498,819 2,261,130 5,214,171 Profit from investmentsProfit on sale of investmentproperties 472,975 - 406,360Crystallised revaluation gains 571,408 - -Profit on revaluation of investmentproperties 1,650,914 7,909,722 15,556,112 Net result for the period 5,194,116 10,170,852 21,176,643Earnings per share 3.64p 8.11p 15.72pDividend per share 3.25p 3.25p 5.66p GROUP BALANCE SHEET AS AT 30 JUNE 2007(UNAUDITED) As at As at As at 30 June 30 June 31 December 2007 2006 2006 £ £ £Non-current assetsInvestment properties 270,205,294 241,807,080 255,124,902Reverse lease premium 3,807,706 4,367,920 4,041,098 274,013,000 246,175,000 259,166,000 Current assetsDebtors 4,727,438 2,937,835 4,394,653Cash and cash equivalents 8,046,580 12,817,183 5,083,342 12,774,018 15,755,018 9,477,995 Total assets 286,787,018 261,930,018 268,643,995 Current liabilitiesCreditors due within one year (7,219,872) (6,285,565) (6,517,091) (7,219,872) (6,285,565) (6,517,091) Non-current liabilitiesBank loans (113,354,572) (96,472,000) (96,538,600)Fair value of swap instrument 2,356,325 (295,326) 104,854Debt issue costs 1,700,319 1,785,171 1,735,824 (109,297,928) (94,982,155) (94,697,922) Net assets 170,269,218 160,662,298 167,428,982 Represented by:Share capital 1,427,473 1,427,473 1,427,473Share premium 68,878,048 68,844,113 68,844,113Reserves 99,963,697 90,390,712 97,157,396Shareholders' funds 170,269,218 160,662,298 167,428,982 Net Asset Value per share 119.28p 112.55p 117.29p Approved by: Christopher N Fish Nicholas C M RennyDirector Director 25 September 2007 GROUP STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2007(UNAUDITED) Issued share Share Revenue Other capital premium reserves reserves Total £ £ £ £ £Opening at 1January 2007 1,427,473 68,844,113 70,217,497 26,939,899 167,428,982Share issueexpenses - 33,935 - - 33,935Net result forthe period - - 3,543,202 - 3,543,202Dividend paid - - (4,639,286) - (4,639,286)Prior yearcrystallisation - - 397,321 (397,321) -Revaluationgain - - - 1,650,914 1,650,914Fair valuegain onhedginginstruments - - - 2,251,471 2,251,471 At 30 June 1,427,473 68,878,048 69,518,734 30,444,963 170,269,2182007 GROUP STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2006(UNAUDITED) Issued share Share Revenue Other capital premium reserves reserves Total £ £ £ £ £Opening at1 Jannuary 760,002 - 72,630,577 8,606,320 81,996,8992006Shares issued in the period 667,471 70,332,529 - - 71,000,000Share issueexpenses - (1,488,416) - - (1,488,416)Net resultfor the period - - 2,261,130 7,909,722 10,170,852Fair valueloss onhedging instruments - - - 1,970,927 1,970,927Dividend paid - - (2,987,964) - (2,987,964) At 30 June 1,427,473 68,844,113 71,903,743 18,486,969 160,662,2982006 GROUP CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2007 (UNAUDITED) Six months Six months Year ended ended ended 31 December 30 June 2007 30 June 2006 2006 Operating activities £ £ £Net operating profit for the period before finance costs 5,541,835 5,273,006 10,833,966 Adjustment for:(Increase) / decrease inoperating debtors (330,079) 1,406,389 (50,429)Decrease in operating creditors (716,327) (2,487,998) (2,423,263)Reverse premium amortisation 233,392 159,963 486,785 4,728,821 4,351,360 8,847,059 Interest received 157,130 523,248 741,207Interest paid (2,045,328) (4,432,020) (6,627,542)Taxation paid - (32,072) (103,494)Deferred Tax - 7,289 Net cash (outflow) / inflow from operating activities 2,840,623 410,516 2,864,519 Investing activitiesPurchase of investment properties (21,298,849) (15,501,579) (24,163,950)Purchase of subsidiaryundertaking - (100) (100)Cash acquired with subsidiaryundertaking - 2,076,052 2,076,052Proceeds from sale of investmentproperties 9,383,828 - 3,113,816 Net cash outflow from investingactivities (11,915,021) (13,425,627) (18,974,184) Financing activitiesProceeds from issue of ordinaryshare capital - 71,000,000 71,000,000Share issue costs (4,065) (1,488,416) (1,488,416)Bank loans drawn 17,764,723 - -Repayment of loans fromshareholders - (5,334,436) (5,334,436)Repayment of bank loans (948,750) (37,213,197) (38,340,000)Debt issue costs paid (134,986) (1,126,803) -Dividends paid (4,639,286) (2,987,964) (7,627,251) Net cash inflow from financingactivities 12,037,636 22,849,184 18,209,987 Net increase in cash an cashequivalents 2,963,238 9,834,073 2,100,232Opening cash and cash equivalents 5,083,342 2,983,110 2,983,110 Closing cash and cash equivalents 8,046,580 12,817,183 5,083,342 For further information: Brett Robinson, Teesland plc: 020 7659 6666Darren Fennell, Teesland plc: 020 7659 6666Chris CarterKeall, Teesland plc: 020 7659 6666Jeremy Carey/Richard SunderlandTavistock Communications Limited 020 7920 3150Anson Fund Managers Limited,Company Secretary 01481 722260 25 September 2007 E&OE - 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