Worsley Inv Ltd Regulatory News (WINV)

31 Mar 2006 10:58

AXA Property Trust Ld31 March 2006 To: RNSDate: 31 March 2006From: AXA Property Trust Limited AXA Property Trust Limited Further to our announcement on 23 March 2006 there follows the full text of theInterim Results in respect of the period from 5th April 2005 to 31st December2005. Financial highlights 31 December 2005 23 May 2005 (launch) Change since launch Net assetvalue (£thousands) 98,763 100,000 -1.2% Net assetvalue perordinary share(pence) 98.76 100.00 -1.2% Ordinary shareprice (pence) 109.00 100.00 +9.0% Dividend pershare (pence) 1.55 N/A N/A The Chairman Charles Hunter stated; I am delighted to welcome shareholders to this first interim statement of AXAProperty Trust Limited since the successful launch of the Company in May 2005.The Company, through its Real Estate Advisers, AXA Real Estate InvestmentManagers UK (AXA REIM), has made substantial progress in investing the proceedsof the share issue in European property to meet the Company's objectives, as setout in the Portfolio section below. Investment Strategy and Process The Company's investment programme, in accordance with the terms of theprospectus, is on target to invest substantially the issue proceeds in realestate assets within twelve months of Admission. The Company's aim is to create a portfolio that delivers the target income yieldand which is diversified by property type, tenant and geographic region. A keyfocus is to obtain holdings in properties that offer value. This is sought bothin the initial purchase terms and in potential for growth and added value duringownership. The portfolio will consist of medium sized properties in goodlocations with sustainable income flows. A thorough bottom-up process of analysis and due diligence is being applied toeach acquisition. This is enhanced by local knowledge combined with AXA REIM'sEurope-wide presence and perspective. Investment Activity AXA REIM have seen in excess of £4 billion of opportunities in the seven monthssince launch. A significant number have been seriously considered by AXA REIM'slocal offices and over 50 of these properties have been physically inspected bythe UK team. I am particularly pleased to report that in a competitive market, AXA REIM aresucceeding in acquiring quality property which is providing a net rental incomeyield of between 6% and 8%. This is ahead of the target and supports theintended dividend distribution rate. Portfolio In the period of approximately seven months since the Company launch to thebalance sheet date, £10.0 million of purchases were completed and contracts wereexchanged for £23.9 million of properties. The Company is committed to thefollowing holdings as at 31st December 2005: Portfolio as at 31 December 2005 Property Status Type Smakterweg, Venray, Netherlands Completed Logistics Bahnhofstrasse, Karben, Germany Contracted Edge of town retail-food & durables Nurnberger Strasse, Treuchtlingen, Contracted Edge of town retail-foodGermany Frankfurter Strasse, Wurzburg, Germany Contracted Edge of town retail-food & durables Burgermeister-Hess-Strasse, Muhldorf am Contracted Out of town retail-food &Inn, Germany durables Landshuter Strasse, Moosburg, Germany Contracted Out of town retail-food & durables Die Weidenbach, Altenstadt-Lindheim, Contracted Out of town retail-food &Germany durables Braunschweiger Strasse, Berlin, Germany Contracted In town retail-food The tenant covenant profile on these holdings is strong and the weighted averagelease length, term certain, is 10.3 years. This compares favourably with the IPDUK Index average lease length of 9.3 years, particularly considering thenormally shorter lease pattern in Continental Europe. The weighted average net initial yield on the above portfolio is 7.30% beforegearing. Further transactions have been under negotiation since the beginning of 2006which have resulted in the acquisition of a logistics property near Milan, Italywhich was completed for £20.7 million in February 2006 and a property in Bernau,Germany which was been contracted for £5.8 million in March 2006. At the time of writing the Company has contracted acquisitions (including thoseproperties where contracts have been exchanged) of €58.9 million. All figuresare stated before acquisition costs. Including investment activity transacted since the balance sheet date, theportfolio contracted and secured is invested 55.3% in German retail, 33.4% inItalian logistics and 11.3% in Dutch logistics. The German retail exposurecontains significant de facto diversification across the country, both in andout of town centres, and by trade (food retailing and durable goods retailing). A further four properties are under offer totalling £42.4 million. Due diligenceis currently being performed and contracts are expected to exchange on theseproperties in the coming weeks. In AXA REIM's view, in selected parts of the German retail property sector atcurrent pricing there is value and long term potential. Cash funds that have not yet been invested in real estate assets have been heldin accordance with the prospectus, mainly in certificates of deposit. Throughthe yield obtained from this investment dividends have been declared to date atan annualised rate of approximately 4.19%. Financing Facility and Hedging Negotiations are currently being finalised for a Group loan facility at agearing level aligned with the prospectus at 35%. It is anticipated that thisfacility will be signed in the coming weeks and, where appropriate, drawingswill occur thereafter. The money market yield curve, particularly in Eurodenominated countries, is upward sloping, and consequently the Company is awareof the risk of interest rates rising in the future. The Company is currentlyimplementing an interest rate hedging strategy in order to mitigate such a risk. Market Background Real estate investment markets remain strong across Europe with increased demanddriven, in particular, by foreign buyers, both institutional and private. Theincreased competition has impacted pricing and over the past six monthsinvestment yields have, in general, been falling. This trend is likely tocontinue in the coming year. The Company expects to benefit from this yieldcompression for the properties it has already contracted to acquire. I amconfident that, with AXA REIM's considerable access to attractive opportunitiesacross Europe through their extensive network of offices, the Company willperform well even in these competitive market conditions. Summary AXA REIM have made excellent progress since launch and expect to complete theconstruction of the portfolio this summer. Prospects in the European marketsgenerally and for the holdings both acquired and those being acquired are good,and I am confident about the future of the Company. Charles HunterChairman22nd March 2006 All enquiries to: The Company SecretaryNorthern Trust International Fund Administration Services (Guernsey) LimitedTrafalgar CourtLes BanquesSt Peter PortGuernsey GY1 3QLTel: 01481 745001Fax: 01481 745051 KPMG Channel Islands Limited 20 New Street, St Peter Port, Guernsey, Channel Islands, GY1 4AN Independent auditors' report to the members of AXA Property Trust Limited oninterim financial statements for the period ended 31 December 2005 Introduction We have been engaged by the Company to review the financial information set outon pages 5 to 11 and we have read the other information contained in thisinterim report and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. This report is made solely to the Company in accordance with the terms of ourengagement contained within our engagement letter dated 16 March 2006 to assistthe Company in meeting the requirements of the Listing Rules of the London StockExchange as issued by the UK Financial Services Authority. Our review has been undertaken so that we might state to the Company thosematters we are requested to state to it in this review report and for no otherpurpose. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the Company for our review work, for thisreview report, or for the conclusions we have reached. Directors' responsibilities This interim report, including the financial information contained therein, isthe responsibility of and has been approved by the Directors. The Directors areresponsible for preparing this consolidated interim report in accordance withthe Listing Rules. The accounting policies that have been adopted in preparing the financialinformation are consistent with those that the Directors currently intend to usein the next annual financial statements. There is however, a possibility thatthe Directors may determine that some changes to these policies are necessarywhen preparing the full annual financial statements. Review work performed We have reviewed the accompanying consolidated balance sheet of AXA PropertyTrust Limited at 31 December 2005, and the related statements of income and cashflows for the period then ended. We conducted our review in accordance with the International Standard on ReviewEngagements 2400. This Standard requires that we plan and perform the review toobtain moderate assurance as to whether the interim financial statements arefree of material misstatement. A review is limited primarily to enquiries ofgroup management and analytical procedures applied to financial data and thisprovides less assurance than an audit. We have not performed an audit and,accordingly, we do not express an audit opinion. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the period ended 31December 2005. KPMG Channel Islands LimitedGuernsey Consolidated Income Statement (Unaudited) For the period from 5 April 2005 to 31 December 2005 Total £'000RevenueGross rental income 116Investment income 2,337Interest income 391Other income 10Total income 2,854 Valuation losses on investmentsUnrealised losses on revaluation of investment properties (327)Unrealised losses on revaluation of short term investments (3)Total valuation losses (330) ExpensesFormation expenses (1,061)Directors' fees (48)Administration fees (54)Audit fees (34)General expenses (37)Legal and professional fees (73)Total expenses (1,307) Net profit before taxation 1,217Taxation (1)Net profit after taxation 1,216Basic and diluted profit per ordinary share (pence) 0.12 Consolidated Statement of Changes in Equity (Unaudited) For the period from 5 April 2005 to 31 December 2005 Share Share Revenue Distributable Foreign Total capital premium reserve reserve exchange £'000 £'000 £'000 £'000 £'000 £'000 Balance at 5 - - - - - -April 2005 Movementsduring theperiodShare premiumon issue - 100,000 - - - 100,000Cancellationof sharepremium (Note5) - (100,000) - 100,000 - -Placing fees - - - (981) - (981)Unrealisedloss onrevaluation ofinvestmentproperties - - (327) - - (327)Unrealisedloss onrevaluation ofshort terminvestments - - (3) - - (3)Net profitafter taxationand beforeunrealisedlosses - - 1,546 - - 1,546Dividends paid(Note 3) - - (1,216) (334) - (1,550)Foreignexchange gains - - - - 78 78 Balance at 31December 2005 - - - 98,685 78 98,763 Consolidated Statement of Assets and Liabilities (Unaudited) For the period from 5 April 2005 to 31 December 2005 £'000Non-current assetsInvestment properties 33,860Other assets 21Total non-current assets 33,881 Current assetsCash and cash equivalents 5,119Short term investments (Note 4) 82,747Receivables 1,595Total current assets 89,461Total assets 123,342 Current liabilitiesPayables 24,579Total liabilities 24,579Net Assets 98,763 EquityShare capital -Reserves (Note 5) 98,763Total equity 98,763 Number of ordinary shares 100,000,000Net asset value per ordinary share (pence) 98.76 Consolidated Statement of Cash Flows (Unaudited) For the period from 5 April 2005 to 31 December 2005 £'000Operating activitiesNet profit for the period 1,216Unrealised losses on revaluation of investment properties 327Unrealised losses on revaluation of short term investments 3Investment income (1,468)Bank interest (55)Increase in trade and other receivables (73)Increase in trade and other payables 1,693Net cash inflow from operating activities 1,643 Investing activitiesPurchase of investment property (11,321)Purchase of property, plant and equipment (3)Purchase of certificates of deposit (152,000)Proceeds from sale of certificates of deposit 69,250Net cash outflow from investing activities (94,074) Financing activitiesProceeds from issue of shares 100,000Issue costs (981)Dividends paid (Note 3) (1,550)Net cash inflow from financing activities 97,469 Effect of exchange rate fluctuations on cash held 81Increase in cash and cash equivalents 5,119 Cash and cash equivalents at start of period -Cash and cash equivalents at 31 December 2005 5,119 Notes to the Unaudited Consolidated Financial Statements 1. Operations AXA Property Trust Limited is a limited liability, closed-ended investmentcompany incorporated in Guernsey. The Company invests in commercial property inEurope which is held through its subsidiaries. The consolidated financialstatements of the Company for the period ended 31 December 2005 comprise thefinancial statements of the Company and its subsidiaries (together referred toas the "Group"). 2. Principal Accounting Policies (a) Basis of preparation The consolidated financial statements have been prepared on a going concernbasis, on the basis of International Financial Reporting Standards ("IFRS") andthe accounting policies set out below. (b) Foreign currency translation (i) Functional and presentation currency The financial statements are presented in sterling, which is the Company'sfunctional and presentation currency as this is the currency in which the fundswere raised and in which investors are seeking a return. (ii) Foreign currency transactions Transactions in foreign currencies are translated to sterling at the spotforeign exchange rate ruling at the date of the transaction. Monetary assets andliabilities denominated in foreign currencies at the balance sheet date aretranslated to sterling at the foreign exchange rate ruling at that date. Foreignexchange differences arising on translation are recognised in the consolidatedincome statement. Non-monetary assets and liabilities that are measured in termsof historical cost in a foreign currency are translated using the exchange rateat the date of the transaction. Non-monetary assets and liabilities denominatedin foreign currencies that are stated at fair value are translated to sterlingat foreign exchange rates ruling at the dates the fair value was determined. (iii) Financial statements of foreign operations The assets and liabilities of foreign operations, arising on consolidation, aretranslated to sterling at the foreign exchange rates ruling at the balance sheetdate. The income and expenses of foreign operations are translated to sterlingat an average rate. Foreign exchange differences arising on retranslation arerecognised as a separate component of equity. (c) Basis of consolidation (i) Subsidiaries Subsidiaries are those entities, including special purpose entities, controlledby the Company. Control exists when the Company has the power, directly orindirectly, to govern the financial and operating policies of an entity so as toobtain benefits from its activities. The Company owns 100% of the issued sharecapital of Property Trust Luxembourg 1 Sarl and Property Trust Luxembourg 2Sarl, companies incorporated in Luxembourg whose principal business is that ofan investment and property company. The financial statements of thesesubsidiaries are included in the consolidated financial statements. (ii) Transactions eliminated on consolidation Intra-group balances and any unrealised gains and losses arising fromintra-group transactions are eliminated in preparing the consolidated financialstatements. (d) Investments in debt and equity securities Security investments held are held at fair value with any resultant gain or lossrecognised in the income statement. Where these investments are interestbearing, interest calculated using the effective interest method is recognisedin the consolidated income statement. (e) Income Interest receivable is included in the financial statements on an accrualsbasis. Rental income from investment property leased out under operating leases isrecognised in the consolidated income statement on a straight-line basis overthe term of the lease. (f) Expenses Expenses are accounted for on an accruals basis. Any ongoing annual fees andexpenses payable by the Company, including but not limited to the InvestmentManager, the Sponsor, the Administrator and the Directors, will be borne by theCompany. (g) Formation and placing expenses Formation expenses include fees arising from the establishment of the Company,the offer for subscription and admission. These include the Sponsor's fee, setup costs, legal and accounting fees, and any other initial expenses. An amountequal to two per cent of the subscription proceeds has been set aside to meetthe expenses. Any excess will be borne by the Investment Manager. The excesswill then be paid as a commission by the Company to the Investment Manager forits services in connection with the issue. A total of £1,061,000 has beenexpensed to the consolidated income statement in respect of formation expenses. Placing expenses are the expenses incurred in the raising of share capital.Placing expenses amounted to £981,000 and have been set off against the specialdistributable reserve. (h) Taxation The Company has obtained exempt company status in Guernsey under the terms ofthe Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 and accordingly issubject to an annual fee of £600. The Directors intend to conduct the Group'saffairs such that it continues to remain eligible for exemption. Income tax on the profit relates to current tax of the subsidiaries which isrecognised in the consolidated income statement. There is no material deferred tax. Current tax isthe expected tax payable on the taxable income for the period, using ratesenacted or substantially enacted at the balance sheet date. (i) Cash and cash equivalents Cash and cash equivalents comprises cash balances and call deposits carried atcost. (j) Dividends Interim dividends are recognised as a liability in the period in which they arepaid. Final dividends are recognised once they are approved by shareholders. (k) Investment properties Investment properties are those which are held to earn rental income and capitalappreciation. They are initially recognised at cost, being the fair value of theconsideration, including transaction costs associated with the property. Afterinitial recognition, investment properties are measured at fair value using thefair value model. Quarterly valuations are carried out by Knight Frank LLP,external independent valuers, in accordance with the RICS Appraisal andValuation Standards. The properties have been valued on the basis of marketvalue, which is the estimated amount for which a property should exchange on thedate of valuation in an arms-length transaction. (l) Short term investments Certificates of deposit are measured at market value, all having a maturity ofless than one year. 3. Dividends No. of ordinary shares Rate (pence) £'000 Dividend paid 25 August 2005 100,000,000 0.45 450Dividend paid 30 November 2005 100,000,000 1.10 1,100 Total 1.55 1,550 A further interim dividend of £1,000,000 (1.00 pence per share) was approved on1 February 2006. The ex-dividend date was 8 February 2006 and the pay date was28 February 2006. 4. Short term investments Maturity Interest Rate Cost Market Value Certificates of deposit % £'000 £'000Societe Generale 5 January 2006 4.50 12,000 11,999Northern Rock 5 January 2006 4.52 12,500 12,500Uni Credito 31 January 2006 4.59 11,000 11,000Lloyds 31 January 2006 4.74 15,750 15,750Norddeutsches Landesbank 31 March 2006 4.73 15,750 15,749Nordea 31 May 2006 4.70 15,750 15,749 Total 82,750 82,747 5 Reserves On 24 June 2005 the Royal Court of Guernsey confirmed the reduction of capitalby way of cancellation of the Company's share premium account. The amountcancelled (£100,000,000) has been credited as a distributable reserve and shallbe available as distributable profits to be used for all purposes permittedunder Guernsey law including the payment of dividends. This information is provided by RNS The company news service from the London Stock Exchange