Worsley Inv Ltd Regulatory News (WINV)

29 Feb 2008 18:15

AXA Property Trust Ld29 February 2008 To: Company AnnouncementsDate: 29 February 2008Company: AXA Property Trust Limited Subject: Half Year Report and Accounts for the six month period ended 31December 2007 The Board are pleased to publish the Half Year Report and Accounts for the sixmonth period ended 31 December 2007. A pdf version of the Half Year Report and Accounts is available on the AXAInvestment Managers' website: http://www.axa-im.co.uk Please follow the prompts to 'Literature' and 'Report and Accounts'. All Enquiries: The Company SecretaryNorthern Trust International Fund Administration Services (Guernsey) LimitedTrafalgar CourtLes BanquesSt Peter PortGuernseyGY1 3QL Tel: 01481 745529Fax: 01481 745085 AXA Property Trust LimitedHalf Year Report and Accountsfor the six month period ended 31 December 2007 Financial Highlights and Performance Summary Financial HighlightsTotal return on Net Asset Value (NAV) was 11.2%NAV per share increased by 9.2%Earnings per share grew by 7.7% to 3.6 pence per shareDividends paid amounting to 2 pence per shareGearing (2) maintained at relatively low level of 37.0%(40.6% including Porto Kali investment on a "look through" basis)Completion of acquisition of retail asset in Pankower Allee, Berlin on 3 Augustfor a gross purchase price of £4.2 million€40 million equity hedge executed after the period end on 21 February 2008 Performance Summary+-----------------------------+---------------+-------------+-----------+| |31 December |30 June 2007 |% Change || |2007 | | |+-----------------------------+---------------+-------------+-----------+|Net Asset Value (NAV) (£000) |109,160 |99,979 |9.2% |+-----------------------------+---------------+-------------+-----------+|NAV per share |109.16p |99.98p |9.2% |+-----------------------------+---------------+-------------+-----------+|Earnings per share |3.60p |3.35p |7.7% |+-----------------------------+---------------+-------------+-----------+|Dividend paid in the period |2.00p |2.70p |(25.9%) |+-----------------------------+---------------+-------------+-----------+|Share price Note 1 |74.13p |99.75p |(25.7%) |+-----------------------------+---------------+-------------+-----------+|Share price discount to NAV |(32.1%) |(0.2%) |(13,910.4%)|+-----------------------------+---------------+-------------+-----------+|Gearing Note 2 |37.0% |35.6% |3.8% |+-----------------------------+---------------+-------------+-----------+|Total assets less current |170,547 |150,974 |13.0% ||liabilities (£000) | | | |+-----------------------------+---------------+-------------+-----------+ Total Return+------------------------------+---------------+| |31 December || |2007 |+------------------------------+---------------+|AXA Property Trust |(23.9%) |+------------------------------+---------------+|FTSE All Share Index |(2.1%) |+------------------------------+---------------+|FTSE Real Estate Index |(23.8%) |+------------------------------+---------------+ Note 1: Mid market share priceNote 2: Bank debt/property portfolio excluding Porto Kali investment Source: AXA Investment Managers UK Limited and Datastream Chairman's Statement I am pleased to report that your Company, AXA Property Trust Limited, hasperformed well during the six month period ended 31 December 2007. The portfolioacquired over the previous two years has provided a stable income yield andcapital growth, despite the more uncertain markets of recent months. Results Note 1 The Group (the Company and its subsidiaries) generated a net profit of £3.6million for the six months to 31 December 2007. The net valuation uplift onproperties was 1.2% (£1.6 million). Excluding revaluation gains after deferredtax, net profit was £2.2 million. The gross rental yield was 7.1% based on an independent market valuation of£153.4 million as at 31 December 2007. A detailed yield analysis based on costis included in the Investment Manager's Report on page 6. This income stream iswell secured both in terms of tenant covenant and in duration, with an averageunexpired weighted lease length of 6.7 years. Net asset value at 31 December 2007 was £109.16 million (109.16 pence perordinary share). In the previous financial year, translation losses reduced netasset value by £2.6 million as a result of adverse movements in the Sterling/Euro exchange rate. During the first half of the current financial year, theSterling/Euro exchange rate has moved in the Company's favour, resulting ingains of £9.0 million. The Board has "locked in" some of these translation gainsthrough net investment ("Euro equity") hedging which is outlined in theInvestment Manager's Report on page 9. Dividend The Board has approved two quarterly interim dividends in respect of thefinancial year to 30 June 2008. The first dividend was paid 30 November 2007 andthe second dividend is scheduled for payment 29 February 2008. Each dividendamounted to 1 pence per share, giving an annualised dividend yield of 4.0% onthe issue price. This is below the distribution target of around 5.0% as aresult of higher financing costs arising from increases in the Euribor interestrate between 2005 and 2007. The dividends declared in the six month period are virtually fully covered bythe operating profit excluding capital items for the six month period. Fund Management Team The Board are pleased to welcome Martin McGuire as head of the Company's fundmanagement team at the Company's Investment Manager, AXA Investment Managers UKLimited. Mr. McGuire was appointed in December 2007. He is an experiencedproperty fund manager in both the UK and Europe, most recently as InvestmentDirector at Standard Life Investments where he was Fund Manager of Standard LifeInvestment's £2 billion Unit Linked Life Property Fund. From the early 1990s Mr.McGuire led Standard Life's expansion into Europe where he built up and managedthe property investment and development programme taking total investment toover €1.5 billion and was Fund Manager of Standard Life Investment's €800million European Property Growth Fund. The Board would like to take this opportunity to thank Hitesh Patel, the formerhead of the fund management team, for his highly valued work in successfullylaunching the Fund in 2005, bringing it to full investment and achieving itssubsequent growth and wish him every success in his new role within AXA RealEstate Investment Managers UK Limited. Prospects The fall in the Company's share price since the summer of 2007 contrasts withthe underlying growth in its Net Asset Value and the valuation of the propertyportfolio. In light of the Real Estate Adviser's view of market prospects, Ibelieve the current share price undervalues the Company. AXA Real Estate Investment Manager UK Limited, the "Real Estate Adviser",believe that there will be continuing pricing corrections in some localContinental markets, particularly in secondary real estate. As the Company'sportfolio is well located with a focus in the relatively strong German economyand benefits from well secured income streams, they consider it reasonablysheltered from these trends. They do not believe that the main Continentalproperty markets will suffer the severe pricing corrections seen in the UKmarkets. Despite the more challenging environment since the summer of 2007, the Companyis well-placed to deliver stable income as its position is backed by therelatively "core" nature of the majority of the property portfolio and strongtenant profile. Continuing focus by the Company and its Real Estate Adviser on anumber of active asset management initiatives should help to enhance theportfolio. Charles HunterChairman28 February 2008 Investment Manager's Report Investment Manager AXA Investment Managers UK Limited (the "Investment Manager") is the UKsubsidiary of AXA Investment Managers, a dedicated asset manager within the AXAGroup. AXA Investment Managers is an innovative and fast-growing multi-expertiseinvestment manager with €548 billion of assets under management and 2,919employees in 19 countries as at 31 December 2007. AXA Real Estate Investment Managers UK Limited (the "Real Estate Adviser") ispart of real estate management arm of AXA Investment Managers S.A. ("AXA REIM").AXA REIM is a specialist in European real estate investment management withapproximately €41.4 billion of real estate assets under management in 17European countries as at 31 December 2007, of which the Real Estate Advisermanages approximately €9.6 billion. Real Estate Market Tighter credit conditions in the Eurozone, resulting from the US sub-primecrisis, mean that prime real estate is likely to experience a modest pricingadjustment in some local markets. The most significant adverse short termpricing pressure is likely to be in secondary assets and second tier markets.Eurozone economic growth expectations have moderated since the summer of 2007and this is expected to dampen occupier demand to some degree, particularly forthe office sector. Nevertheless, the Eurozone remains one of the most attractive regions for realestate investment, particularly over the longer term. Income yields arerelatively appealing compared to 10 year government bond yields, rental incomeis typically linked to inflation and 5 year swap rates have fallen since thecredit crisis. Germany is still notching up some of its best growth rates for a decade withthird quarter GDP growth increasing by 0.7% and unemployment falling to asix-year low. However, growth prospects may be moderated going forward due to arise in the Euro and slowdown in exports. Retail Retailer confidence remains positive, although it fell in the final quarter of2007. Most of the major cross-border retailers are continuing to expand into newmarkets across Europe and are trading relatively well, in contrast to the UKwhere retailers are struggling to maintain profit margins. Consumer confidence in the Eurozone has fallen since the second half of 2007.While prospects of interest rate cuts should help alleviate consumer anxiety,sentiment is likely to remain fragile while the full impact of the credit crunchof 2007 is being assessed. Out-of-town retail warehouses, supermarkets and hypermarkets with strong foodanchors are expected to outperform in 2008, particularly in Germany, Spain andthe Nordics. Office Economic growth in the Eurozone for 2008 is expected at a rate of 2.1%, whichshould continue to support employment levels and occupier demand. Overall, netabsorption is expected to outstrip new supply and rental growth over 2008 isexpected to remain positive. Eurozone office yields have started to driftoutwards since mid 2007 (Note 1), although not to the extent seen in the UK. Industrial Yield compression has come to a halt, although outward yield movement has notbeen seen, with the exception of the UK and Ireland where market cycles are moreadvanced. Rental growth is expected to remain below inflation with limitedvariance between territories. Investment Activity The Company has now completed the construction of a bespoke portfolio of 20properties located across Europe, as well as holding an interest in a Dutchoffice portfolio. The property portfolio has been acquired at a cost of £143.7million, including acquisition costs of £7.1 million. As at 31 December 2007 theproperty portfolio was independently valued at £153.4 million. In addition, theCompany holds a 12% interest in a joint investment holding Dutch officeproperties valued at £217.1 million at 31 December 2007. A site which forms part of a retail park held in the property portfolio is to bedeveloped in 2008. Note 1 Source: Property Market Analysis LLP Property Portfolio at 31 December 2007+----------------------+-----------+----------+--------+--------+------------+|Property |Country |Sector |Current |Current |% of total || | | |gross |net |assets (less|| | | |rental |rental |current || | | |yield |yield |liabilities)|| | | |Note 1 |Note 2 | |+----------------------+-----------+----------+--------+--------+------------+| | | | | | |+----------------------+-----------+----------+--------+--------+------------+|Phoenix Centre, Furth |Germany |Retail |7.66% |6.86% |12.1% |+----------------------+-----------+----------+--------+--------+------------+|Rothenburg |Germany |Retail |6.94% |6.36% |11.4% |+----------------------+-----------+----------+--------+--------+------------+|Bergamo |Italy |Leisure |6.98% |6.59% |8.2% |+----------------------+-----------+----------+--------+--------+------------+|SS Bergamina, |Italy |Industrial|7.67% |7.20% |7.3% ||Agnadello | | | | | |+----------------------+-----------+----------+--------+--------+------------+|Am Birkfeld, Dasing |Germany |Industrial|8.75% |7.83% |5.3% |+----------------------+-----------+----------+--------+--------+------------+|Smakterweg, Venray |Netherlands|Industrial|9.49% |8.36% |4.9% |+----------------------+-----------+----------+--------+--------+------------+|Bahnhofstrasse, Karben|Germany |Retail |7.61% |6.75% |4.8% |+----------------------+-----------+----------+--------+--------+------------+|Montabaur-Heiligenroth|Germany |Retail |6.90% |6.07% |4.8% |+----------------------+-----------+----------+--------+--------+------------+|Bernau |Germany |Retail |9.81% |8.75% |4.4% |+----------------------+-----------+----------+--------+--------+------------+|Keyser Center, Antwerp|Belgium |Retail |7.17% |6.73% |3.6% |+----------------------+-----------+----------+--------+--------+------------+|Other |- |- |- |- |23.1% |+----------------------+-----------+----------+--------+--------+------------+|Total property | | |7.88% |7.11% |89.9% ||portfolio | | | | | |+----------------------+-----------+----------+--------+--------+------------+|Porto Kali Investment | | | | |6.0% |+----------------------+-----------+----------+--------+--------+------------+|Other non current | | | | |4.1% ||assets and net current| | | | | ||assets | | | | | |+----------------------+-----------+----------+--------+--------+------------+|Total assets less | | | | |100% ||current liabilities | | | | | |+----------------------+-----------+----------+--------+--------+------------+ Note 1: Gross rental yield excludes property and acquisition costs.Note 2: Net rental yield includes acquisition costs and an estimated 5% of grossrent as property operating costs.Note 3: Gross rental yield based on market valuation was 7.1%. Source: AXA Investment Managers UK Limited Geographic Analysis at 31 December 2007 by market value In the portfolio analyses below, the Porto Kali investment is included as a 12%share of the market value of properties held by the Porto Kali consortium. ThePorto Kali independent property valuation was undertaken by CB Richard EllisB.V. as at 31 December 2007. +------------+------+|Germany |63% |+------------+------+|Italy |15% |+------------+------+|Netherlands |19% |+------------+------+|Belgium |3% |+------------+------+ Within Germany, properties are split as follows: 61.1% in Bavaria, 13.8% inHessia, 7.2% in Rhineland-Palatinate, 6.7% in Brandenburg, 6.6% in Berlin, 2.6%,Saxony Anhalt and 2.0% in Saxony. Sector Distribution at 31 December 2007 by market value +-----------+-----+|Retail |60% |+-----------+-----+|Industrial |17% |+-----------+-----+|Office |15% |+-----------+-----+|Leisure |8% |+-----------+-----+ Source: AXA Investment Managers UK Limited Covenant Strength Analysis at 31 December 2007 +----------+------+---------------------------------------+|Grade A |67.0% |Nationally and internationally || | |recognised companies |+----------+------+---------------------------------------+|Grade B |14.0% |Regionally recognised companies |+----------+------+---------------------------------------+|Grade C |13.1% |Locally recognised companies |+----------+------+---------------------------------------+|Vacant |5.9% |Calculated using market rent |+----------+------+---------------------------------------+ The Company's covenant profile is strong, with the majority of tenants ratedGrade A or B. The weighted effective unexpired lease length for the completedportfolio as at 31 December 2007 was 6.7 years, with 57.2% of income secured fora term of over five years. Rental income from Grade A covenants represents 67.0%of income and has a weighted unexpired lease length of 8.1 years. Vacant spacein the portfolio, measured using market rent, represented 5.9% of the totalgross rental income. 66% of vacant space within the property portfolio relatesto Porto Kali, a 'working' portfolio with a focus on capital value growth ratherthan rental income. Average Unexpired Lease Length Profile weighted by rental income +----------+--------------+----------------+| |30 June 2007 |31 December 2007|+----------+--------------+----------------+|Grade A |8.5 years |8.1 years |+----------+--------------+----------------+|Grade B |5.6 years |4.9 years |+----------+--------------+----------------+|Grade C |4.6 years |4.2 years |+----------+--------------+----------------+|Average |7.1 years |6.7 years |+----------+--------------+----------------+ Lease Expiry Profile weighted by rental income(as a % of total gross rental income) +----------+--------------+----------------+| |30 June 2007 |31 December 2007|+----------+--------------+----------------+|Vacant |5.3% |5.9% |+----------+--------------+----------------+|0-5 years |37.5% |36.9% |+----------+--------------+----------------+|5-10 |24.5% |28.6% |+----------+--------------+----------------+|10-15 |24.7% |20.9% ||years | | |+----------+--------------+----------------+|15-20 |8.0% |7.7% ||years | | |+----------+--------------+----------------+ Financing The Board has opted to maintain loan to value gearing at relatively conservativelevels: 40.6% including the 12% interest in the Porto Kali Dutch officeportfolio and 37.0% excluding Porto Kali. This is well within the Company'sgearing limits of 45% currently approved by the Board and 50% under the terms ofboth the Prospectus (issued by the Company on 18 April 2005) and the Company'smain financing facility. The Company's main financing facility is in place until 2011, with the interestrate risk fully hedged via interest rate swaps for three years and interest ratecaps in the final year. Cross currency swaps have been executed to coverquarterly net Euro cash flows to the value of £1.0 million (€1.4 million) forfive years. To reduce the volatility of the Net Asset Value arising fromfluctuations in the Euro/Sterling exchange rate, the Company hedged €40 millionof its net investment in Euros ("Euro equity") on 21 February 2008. The status of interest rate, currency and equity hedging is regularly reviewedby the Investment Manager to adjust for variables such as property valuationsand predicted cash flows. Outlook In the next year the Investment Manager will concentrate on enhancing andprotecting the investment portfolio's income stream, which is already wellsecured against strong covenants. A focus on diligent asset management, executedvia the Real Estate Adviser's in-territory asset management teams, aims to bothstrengthen rental income and enhance the portfolio value. Although the Company has some capacity to raise further funds via increasedgearing, no further debt financed property acquisitions are planned in the shortterm. The Company may undertake selective disposals from within the portfolio,depending upon the identification of sufficiently attractive reinvestmentopportunities and the ability to realise maximum value of the currentproperty portfolio. Due to the strong fundamentals of the constructed property portfolio, togetherwith a conservative level of gearing, we are confident that the Company iswell positioned to deliver dependable income while at the same time protectingvalue. Responsibility Statement of the Directors in respect of the Condensed Half YearFinancial Report We confirm that to the best of our knowledge: the Condensed Half Year Financial Statements have been prepared in accordancewith IAS 34 Interim Financial Reporting; and this Half Year Report provides a fair review of the information required by: a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication ofimportant events that have occurred during the first six months of the financialyear and their impact on the Condensed Half Year Financial Statements; and adescription of the principal risks and uncertainties for the remaining sixmonths of the year; and b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related partytransactions that have taken place in the first six months of the currentfinancial year and that have materially affected the financial position orperformance of the entity during that period; and any changes in the relatedparty transactions described in the last annual report that could do so. By order of the Board Charles HunterChairman28 February 2008 John MarrenDirector28 February 2008 Independent Review Report Independent review report of KPMG Channel Islands Limited to AXA Property TrustLimited on the Interim Financial Statements for the six month period ended 31December 2007 Introduction We have been engaged by the Company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 31December 2007 which comprises the Consolidated Balance Sheet as of 31 December2007, and the related Consolidated Income Statement, Consolidated Statement ofChanges in Equity, Consolidated Statement of Cash Flows and the relatedexplanatory notes that have been reviewed. We have read the other informationcontained in the half-yearly financial report and considered whether it containsany apparent misstatements or material inconsistencies with the information inthe condensed set of financial statements. Directors' Responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. As disclosed in note 2, the annual financial statements of the Company areprepared in accordance with International Financial Reporting Standards. Thecondensed set of financial statements included in this half-yearly financialreport has been prepared in accordance with International Accounting Standard34, "Interim Financial Reporting". Our Responsibility Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. Scope of Review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making inquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 31 December 2007 is not prepared, in allmaterial respects, in accordance with International Accounting Standard 34 andthe Disclosure and Transparency Rules of the United Kingdom's Financial ServicesAuthority. KPMG Channel Islands LimitedGuernsey28 February 2008 Condensed Half Year ConsolidatedIncome Statement(Unaudited) For the period from 1 July 2007 to 31 December 2007 +----------------------------------------+------+-------------+-------------+| |Notes |1 July 2007 |1 July 2006 || | |to 31 |to 31 || | |December 2007|December 2006|+----------------------------------------+------+-------------+-------------+| | |£000s |£000s |+----------------------------------------+------+-------------+-------------+|Gross rental income | |5,135 |3,435 |+----------------------------------------+------+-------------+-------------+|Service charge income | |422 |244 |+----------------------------------------+------+-------------+-------------+|Property operating expenses | |(1,002) |(458) |+----------------------------------------+------+-------------+-------------+|Net rental and related income | |4,555 |3,221 |+----------------------------------------+------+-------------+-------------+|Interest income | |409 |220 |+----------------------------------------+------+-------------+-------------+|Other | |- |(28) |+----------------------------------------+------+-------------+-------------+|Net foreign exchange gains | |98 |16 |+----------------------------------------+------+-------------+-------------+|Net investment income | |507 |208 |+----------------------------------------+------+-------------+-------------+|Gains on derivatives | |146 |- |+----------------------------------------+------+-------------+-------------+|Valuation gains on investment properties| |2,070 |2,766 |+----------------------------------------+------+-------------+-------------+|Valuation losses on investment | |(423) |(404) ||properties | | | |+----------------------------------------+------+-------------+-------------+|Gain on fair value of financial assets | |119 |- |+----------------------------------------+------+-------------+-------------+|Net valuation gains on investment | |1,912 |2,362 ||properties and derivatives | | | |+----------------------------------------+------+-------------+-------------+|Formation expenses | |- |(115) |+----------------------------------------+------+-------------+-------------+|Investment management fees | |(813) |(414) |+----------------------------------------+------+-------------+-------------+|Sponsor's fees | |(179) |- |+----------------------------------------+------+-------------+-------------+|Administrative expenses |3 |(908) |(1,071) |+----------------------------------------+------+-------------+-------------+|Finance costs | |(1,396) |(164) |+----------------------------------------+------+-------------+-------------+|Total expenses | |(3,296) |(1,764) |+----------------------------------------+------+-------------+-------------+|Other income | |139 |5 |+----------------------------------------+------+-------------+-------------+|Profit before tax | |3,817 |4,032 |+----------------------------------------+------+-------------+-------------+|Income tax expense | |(215) |(686) |+----------------------------------------+------+-------------+-------------+|Profit for the period | |3,602 |3,346 |+----------------------------------------+------+-------------+-------------+|Basic and diluted earnings per Ordinary | |3.60 |3.35 ||Share (pence) | | | |+----------------------------------------+------+-------------+-------------+ Condensed Half Year ConsolidatedStatement of Changes in Equity(Unaudited) For the period from 1 July 2007 to 31 December 2007 +----------------------+-----------+--------+--------+-------------+--------+-------+| |Revaluation|Hedging |Revenue |Distributable|Foreign |Total || |reserve |reserve |reserve |reserve |exchange| || | | | | |reserve | |+----------------------+-----------+--------+--------+-------------+--------+-------+| |£000s |£000s |£000s |£000s |£000s |£000s |+----------------------+-----------+--------+--------+-------------+--------+-------+| | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+|Balance at 1 July 2007 |7,226 |412 |- |94,469 |(2,128) |99,979 |+----------------------+-----------+--------+--------+-------------+--------+-------+| | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+|Movements during the | | | | | | ||period | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+| | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+|Net profit for the |1,912 |- |1,690 |- |- |3,602 ||period | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+|Fair value of |- |(1,452) |- |- |- |(1,452)||derivatives | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+|Dividends paid |- |- |(1,690) |(310) |- |(2,000)|+----------------------+-----------+--------+--------+-------------+--------+-------+|Foreign exchange |- |- |- |- |9,031 |9,031 ||translation gains | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+|Balance at 31 December|9,138 |(1,040) |- |94,159 |6,903 |109,160||2007 | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+ For the period from 1 July 2006 to 31 December 2006 +----------------------+-----------+--------+--------+-------------+--------+-------+| |Revaluation|Hedging |Revenue |Distributable|Foreign |Total || |reserve |reserve |reserve |reserve |exchange| || | | | | |reserve | |+----------------------+-----------+--------+--------+-------------+--------+-------+| |£000s |£000s |£000s |£000s |£000s |£000s |+----------------------+-----------+--------+--------+-------------+--------+-------+| | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+|Balance at 1 July 2006|287 |- |- |98,137 |446 |98,870 |+----------------------+-----------+--------+--------+-------------+--------+-------+| | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+|Movements during the | | | | | | ||period | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+| | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+|Net profit for the |2,362 |- |984 |- |- |3,346 ||period | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+|Fair value of |109 |- |- |- |- |109 ||derivatives | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+|Other reserve |- |- |39 |- |- |39 |+----------------------+-----------+--------+--------+-------------+--------+-------+|Dividends paid |- |- |(1,023) |(1,677) |- |(2,700)|+----------------------+-----------+--------+--------+-------------+--------+-------+|Foreign exchange |- |- |- |- |(2,492) |(2,492)||translation gains | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+|Balance at 31 December|2,758 |- |- |96,460 |(2,046) |97,172 ||2007 | | | | | | |+----------------------+-----------+--------+--------+-------------+--------+-------+ Condensed Half Year ConsolidatedBalance Sheet(Unaudited) As at 31 December 2007+-------------------------------+-----+--------------+-------------+| |Notes|31 December |30 June 2007 || | |2007 | |+-------------------------------+-----+--------------+-------------+| | |£000s |£000s |+-------------------------------+-----+--------------+-------------+|Non-current assets | | | |+-------------------------------+-----+--------------+-------------+|Investment properties |5 |153,427 |134,111 |+-------------------------------+-----+--------------+-------------+|Property, plant and equipment | |1 |2 |+-------------------------------+-----+--------------+-------------+|Non-group loan receivables | |10,047 |9,109 |+-------------------------------+-----+--------------+-------------+|Derivative financial | |553 |465 ||instruments | | | |+-------------------------------+-----+--------------+-------------+|Other investments |6 |119 |- |+-------------------------------+-----+--------------+-------------+|Other assets | |359 |523 |+-------------------------------+-----+--------------+-------------+|Deferred tax assets | |597 |975 |+-------------------------------+-----+--------------+-------------+| | | | |+-------------------------------+-----+--------------+-------------+|Current assets | | | |+-------------------------------+-----+--------------+-------------+|Cash and cash equivalents | |7,417 |6,158 |+-------------------------------+-----+--------------+-------------+|Trade and other receivables |7 |3,258 |3,572 |+-------------------------------+-----+--------------+-------------+|Total assets | |175,778 |154,915 |+-------------------------------+-----+--------------+-------------+| | | | |+-------------------------------+-----+--------------+-------------+|Current liabilities | | | |+-------------------------------+-----+--------------+-------------+|Trade and other payables |8 |5,231 |3,941 |+-------------------------------+-----+--------------+-------------+| | | | |+-------------------------------+-----+--------------+-------------+|Non-current liabilities | | | |+-------------------------------+-----+--------------+-------------+|Deferred tax liability | |3,245 |3,215 |+-------------------------------+-----+--------------+-------------+|Long term loan | |56,709 |47,762 |+-------------------------------+-----+--------------+-------------+|Derivative financial | |1,433 |18 ||instruments | | | |+-------------------------------+-----+--------------+-------------+|Total liabilities | |66,618 |54,936 |+-------------------------------+-----+--------------+-------------+|Net assets | |109,160 |99,979 |+-------------------------------+-----+--------------+-------------+| | | | |+-------------------------------+-----+--------------+-------------+|Equity | | | |+-------------------------------+-----+--------------+-------------+|Share capital | |- |- |+-------------------------------+-----+--------------+-------------+|Reserves | |109,160 |99,979 |+-------------------------------+-----+--------------+-------------+|Total equity | |109,160 |99,979 |+-------------------------------+-----+--------------+-------------+| | | | |+-------------------------------+-----+--------------+-------------+| | | | |+-------------------------------+-----+--------------+-------------+|Number of Ordinary Shares | |100,000 |100,000 ||(thousands) | | | |+-------------------------------+-----+--------------+-------------+|Net Asset Value per Ordinary | |109.16p |99.98p ||Share (pence) | | | |+-------------------------------+-----+--------------+-------------+ Charles HunterChairman28 February 2008 John MarrenDirector28 February 2008 Condensed Half Year ConsolidatedStatement of Cash Flows(Unaudited) For the period from 1 July 2007 to 31 December 2007+----------------------------------------------+---------+---------+| |1 July |1 July || |2007 to |2006 to || |31 |31 || |December |December || |2007 |2006 |+----------------------------------------------+---------+---------+| |£000s |£000s |+----------------------------------------------+---------+---------+|Operating activities | | |+----------------------------------------------+---------+---------+|Profit before tax |3,817 |4,032 |+----------------------------------------------+---------+---------+|Adjustments for: | | |+----------------------------------------------+---------+---------+|Unrealised gain on revaluation of investment |(1,912) |(2,362) ||property and derivatives | | |+----------------------------------------------+---------+---------+|Decrease in trade and other receivables |1,180 |1,954 |+----------------------------------------------+---------+---------+|Increase in trade and other payables |1,680 |3,908 |+----------------------------------------------+---------+---------+|Investment income |(327) |(132) |+----------------------------------------------+---------+---------+|Bank interest |(83) |(88) |+----------------------------------------------+---------+---------+|Interest expenses |1,396 |165 |+----------------------------------------------+---------+---------+|Net foreign exchange gains |(98) |(16) |+----------------------------------------------+---------+---------+|Other |39 |61 |+----------------------------------------------+---------+---------+|Net cash generated from operations |5,692 |7,522 |+----------------------------------------------+---------+---------+| | | |+----------------------------------------------+---------+---------+|Investment income received |327 |- |+----------------------------------------------+---------+---------+|Interest paid |(851) |(45) |+----------------------------------------------+---------+---------+|Interest received |88 |192 |+----------------------------------------------+---------+---------+|Tax paid |(315) |(654) |+----------------------------------------------+---------+---------+|Net cash inflow from operating activities |4,941 |7,015 |+----------------------------------------------+---------+---------+| | | |+----------------------------------------------+---------+---------+|Investing activities | | |+----------------------------------------------+---------+---------+|Acquisition of investment properties |(6,604) |(29,561) |+----------------------------------------------+---------+---------+|Acquisition of other investments |39 |- |+----------------------------------------------+---------+---------+|Proceeds from disposal of subsidiaries |- |1,585 |+----------------------------------------------+---------+---------+|Loans to Group companies |- |(10,850) |+----------------------------------------------+---------+---------+|Loan to third party |(108) |- |+----------------------------------------------+---------+---------+|Net cash outflow from investing activities |(6,673) |(38,826) |+----------------------------------------------+---------+---------+| | | |+----------------------------------------------+---------+---------+|Financing activities | | |+----------------------------------------------+---------+---------+|Finance costs |40 |- |+----------------------------------------------+---------+---------+|Calyon loan facility |4,592 |18,865 |+----------------------------------------------+---------+---------+|Dividends paid |(2,000) |(2,700) |+----------------------------------------------+---------+---------+|Net cash inflow from financing activities |2,632 |16,165 |+----------------------------------------------+---------+---------+| | | |+----------------------------------------------+---------+---------+|Effect of exchange rate fluctuations on cash |359 |(492) ||held | | |+----------------------------------------------+---------+---------+|Increase/(decrease) in cash and cash |1,259 |(16,138) ||equivalents | | |+----------------------------------------------+---------+---------+|Cash and cash equivalents at start of period |6,158 |22,077 |+----------------------------------------------+---------+---------+|Cash and cash equivalents at end of period |7,417 |5,939 |+----------------------------------------------+---------+---------+ Notes to the Condensed Half YearConsolidated Financial Statements(Unaudited) For the period 1 July 2007 to 31 December 2007 1. Operations AXA Property Trust Limited (the "Company") is a limited liability, closed-endedinvestment company incorporated in Guernsey. The Company invests in commercialproperties in Europe which are held through its subsidiaries. The Condensed HalfYear Financial Statements of the Company for the six month period ended 31December 2007 comprise the Consolidated Financial Statements of the Company andits subsidiaries (together referred to as the "Group"). 2. Principal Accounting Policies (a) Statement of compliance The Condensed Half Year Financial Statements have been prepared in accordancewith International Financial Reporting Standards ('IFRS') issued by, or adoptedby, the International Accounting Standards Board (the 'IASB'), interpretationsissued by the International Financial Reporting Interpretations Committee,applicable legal and regulatory requirements of Guernsey Law, the Disclosure andTransparency Rules and the Listing Rules of the UK Listing Authority. In the current financial year, the Group has adopted IFRS 7, FinancialInstruments: Disclosures for the first time. As IFRS 7 is a disclosure standard,there is no impact on the Condensed Half Year Financial Statements. Full detailswill be disclosed in the annual report for the year ended 30 June 2008. (b) Basis of preparation The Condensed Half Year Financial Statements have been prepared in accordancewith the Disclosure Transparency Rules of the Financial Services Authority andwith IAS 34, 'Interim Financial Reporting'. The same accounting policies and methods of computation have been applied to theCondensed Half Year Consolidated Financial Statements as in the annual financialstatements at 30 June 2007. The Condensed Half Year Financial Statements are presented in Sterling which isalso the functional currency of the Company. The Condensed Half Year FinancialStatements have been prepared on a historical cost basis except for themeasurement of the investment properties, derivative financial instruments andfinancial assets designated at fair value through profit or loss. The preparation of the Condensed Half Year Financial Statements in conformitywith IFRS requires management to make judgements, estimates and assumptions thataffect the application of policies and the reported amounts of assets andliabilities, income and expense. The estimates and associated assumptions arebased on historical experience and various other factors that are believed to bereasonable under the circumstances, the results of which form the basis ofmaking the judgements about carrying values of assets and liabilities that arenot readily apparent from other sources. Actual results may differ from thoseestimates. 3. Administrative Expenses and Directors' Fees +------------------------+-------------+-----------+| |1 July 2007 |1 July 2006|| |to 31 |to 31 || |December 2007 |December || | |2006 |+------------------------+-------------+-----------+| |£000s |£000s |+------------------------+-------------+-----------+|Directors' fees |49 |47 |+------------------------+-------------+-----------+|Administration fees |170 |92 |+------------------------+-------------+-----------+|Audit fees |111 |174 |+------------------------+-------------+-----------+|Acquisition costs |- |168 |+------------------------+-------------+-----------+|Legal and professional |310 |228 ||fees | | |+------------------------+-------------+-----------+|Commitment fees |66 |- |+------------------------+-------------+-----------+|General Expenses |202 |362 |+------------------------+-------------+-----------+|Total |908 |1,071 |+------------------------+-------------+-----------+ Each of the Directors of the Company receives a fee of £15,000 per annum fromthe Company. The Chairman receives a fee of £20,000 per annum. The aggregateremuneration and benefits in kind of the Directors in respect of the periodending 31 December 2007 amounted to £40,000 (2006: £40,000) in respect of theCompany and £49,067 (2006: £46,773) in respect of the Group. 4. Dividends +------------------------+-------------+-----------+------------+------------+| |No. of |Rate |1 July 2007 |1 July 2006 || |Ordinary | |to 31 |to 31 || |shares | |December |December || | | |2007 |2006 |+------------------------+-------------+-----------+------------+------------+| | |pence |£000s |£000s |+------------------------+-------------+-----------+------------+------------+|Dividend paid 4 |100,000,000 |1.45 |- |1,450 ||September 2006 | | | | |+------------------------+-------------+-----------+------------+------------+|Dividend paid 15 |100,000,000 |1.25 |- |1,250 ||December 2006 | | | | |+------------------------+-------------+-----------+------------+------------+|Dividend paid 29 August |100,000,000 |1.00 |1,000 |- ||2007 | | | | |+------------------------+-------------+-----------+------------+------------+|Dividend paid 30 |100,000,000 |1.00 |1,000 |- ||November 2007 | | | | |+------------------------+-------------+-----------+------------+------------+|Total | | |2,000 |2,700 |+------------------------+-------------+-----------+------------+------------+ A further dividend of £1,000,000 (1 pence per share) was approved by the Boardof Directors on 7 February 2008. The ex-dividend date was 13 February 2008 andthe payment date was 29 February 2008. 5. Investment Properties +-----------------------------------------+-------------+-------------+| |1 July 2007 |1 July 2006 || |to 31 |to 31 || |December 2007|December 2006|+-----------------------------------------+-------------+-------------+| |£000s |£000s |+-----------------------------------------+-------------+-------------+|Cost of investment properties at |128,169 |77,152 ||beginning of period | | |+-----------------------------------------+-------------+-------------+|Additions during the period at cost |4,098 |61,147 |+-----------------------------------------+-------------+-------------+|Disposal proceeds during the period |- |(10,130) |+-----------------------------------------+-------------+-------------+|Cost of investment properties at end of |132,267 |128,169 ||period | | |+-----------------------------------------+-------------+-------------+|Fair value adjustments |9,548 |7,901 |+-----------------------------------------+-------------+-------------+|Foreign exchange translation |11,612 |(1,959) |+-----------------------------------------+-------------+-------------+|Market value of investment properties at |153,427 |134,111 ||end of period | | |+-----------------------------------------+-------------+-------------+ 6. Other Investments +-----------------------------------------+-------------+-------------+| |1 July 2007 |1 July 2006 || |to 31 |to 31 || |December 2007|December 2006|+-----------------------------------------+-------------+-------------+| |£000s |£000s |+-----------------------------------------+-------------+-------------+|Financial assets designated at fair value|- |- ||through profit or loss | | |+-----------------------------------------+-------------+-------------+|Additions during the period |- |1,016 |+-----------------------------------------+-------------+-------------+|Fair value adjustments |119 |(1,016) |+-----------------------------------------+-------------+-------------+|Total |119 |- |+-----------------------------------------+-------------+-------------+ 7. Trade and Other Receivables +-----------------------------------------+-------------+-------------+| |1 July 2007 |1 July 2006 || |to 31 |to 31 || |December 2007|December 2006|+-----------------------------------------+-------------+-------------+| |£000s |£000s |+-----------------------------------------+-------------+-------------+|Accrued income |336 |292 |+-----------------------------------------+-------------+-------------+|VAT receivable |823 |2,095 |+-----------------------------------------+-------------+-------------+|Rent receivable |290 |139 |+-----------------------------------------+-------------+-------------+|Prepayments |1,383 |749 |+-----------------------------------------+-------------+-------------+|Tax receivable |299 |119 |+-----------------------------------------+-------------+-------------+|Other receivables |127 |178 |+-----------------------------------------+-------------+-------------+|Total |3,258 |3,572 || | | || | | |+-----------------------------------------+-------------+-------------+ 8. Trade and Other Payables +---------------------------------+--------+-------------+-------------+| | |1 July 2007 |1 July 2006 || | |to 31 |to 31 || | |December 2007|December 2006|+---------------------------------+--------+-------------+-------------+| |Notes |£000s |£000s |+---------------------------------+--------+-------------+-------------+|Property acquisition costs | |182 |484 |+---------------------------------+--------+-------------+-------------+|Investment Manager's fee | |795 |1,066 |+---------------------------------+--------+-------------+-------------+|Legal and professional fees |9 |251 |358 |+---------------------------------+--------+-------------+-------------+|Rent prepaid | |177 |181 |+---------------------------------+--------+-------------+-------------+|Audit fee | |106 |174 |+---------------------------------+--------+-------------+-------------+|VAT payable | |1,923 |750 |+---------------------------------+--------+-------------+-------------+|Sponsor's fees | |13 |124 |+---------------------------------+--------+-------------+-------------+|Tax | |135 |51 |+---------------------------------+--------+-------------+-------------+|Administration and company |9 |93 |72 ||secretarial fees | | | |+---------------------------------+--------+-------------+-------------+|Directors' fees | |20 |2 |+---------------------------------+--------+-------------+-------------+|Interest payable on Calyon loan | |545 |318 |+---------------------------------+--------+-------------+-------------+|Other | |991 |361 |+---------------------------------+--------+-------------+-------------+|Total | |5,231 |3,941 |+---------------------------------+--------+-------------+-------------+ 9. Related Party Transactions Mr. Farrell, a director of the Company, is also a partner of Ozannes, theGuernsey legal advisers to the Company. The total charge to the Income Statementduring the period in respect of Ozannes' legal fees was £713 (2006: £2,230)which was settled in full during the period (2006 creditor: nil). Mr. Marren, a director of the Company, is also a director of Northern TrustInternational Fund Administration Services (Guernsey) Limited ("NorthernTrust"), the Administrator, Secretary and Registrar for the Company. The totaladministration fees charged to the Income Statement in respect of Northern Trustadministration fees was £81,001 (2006: £82,179) for the period of which £40,012(2006: £51,504) remained payable at the period end. 10. Post Balance Sheet Events On 21 February 2008 the Company purchased a forward for the Sterling equivalentof €40 million with a maturity date of 2015. 2015 coincides with the earliestpossible date for termination of the Company, as foreseen in the Company'sProspectus at launch. The purpose of the hedging instrument is to reduce volatility in the Company'sNet Asset Value arising from fluctuations in the Euro/Sterling exchange rate, aswell as "locking in" significant foreign exchange gains the Company hasexperienced in recent months as a result of the favourable foreign exchangemovements. The Board will continue to keep the status of equity hedging under review andexpects to enter into further transactions to increase the proportion of hedgedequity in the coming months. 11. Contingent Liabilities The joint venture Property Trust Agnadello s.r.l. is committed to carry outrepairs and improvements to enhance the capital value of the building at anestimated cost of £1.7 million (€2.5 million) for which the Group will provide50% of the funding. £0.2 million (€0.3 million) costs had been incurred andrecorded as a creditor at 31 December 2007. Payment of the full amount isanticipated in the first half of 2008. This information is provided by RNS The company news service from the London Stock Exchange