TIDMHCFT
RNS Number : 6476R
Highcroft Investments PLC
26 August 2010
HIGHCROFT INVESTMENTS PLC
Interim report
30 June 2010
Chairman's Statement for the six months ended 30 June 2010
Highlights
· Net rental income up 6.3% to GBP926,000 (2009 GBP871,000).
· An improved profit before tax of GBP1,212,000 (2009 loss GBP489,000).
· Basic earnings per share on all activities was 25.4p (2009 loss per share
8.8p).
· Net asset value per share increased to 676p (June 2009 591p and December
2009 666p).
· Interim property income distribution will be 11.00p per share compared
with 10.00p in 2009.
· No gearing and net cash GBP3,065,000 (2009 GBP573,000) equivalent to 59p
per share (2009 11p per share).
Dear Shareholder
The results for the six months ended June 2010 continue to reflect the vagaries
of the marketplace - both as regards the property and the equity markets. The
property market, having seen something of a bounce in 2009 after the sharp falls
of a year earlier, now seems generally to be marking time and this has certainly
been our own experience. Whilst our property portfolio has risen some 11% from
the valuation of a year earlier, increases have moderated since December 2009.
Equally, we took the opportunity of equity market volatility to reduce our
portfolio albeit at levels lower than the 2009 year end and we have incurred
some revaluation losses on our portfolio at 30 June 2010. Both of these factors
help to explain the minimal rise in our net asset value to 676p from a year end
figure of 666p but nonetheless this is a 14.4% increase on the June 2009 figure
of 591p.
In revenue terms, net rental income rose by 6.3% - reflecting a small rise in
gross rentals and a reduction in property operating expenses. This rise was
offset at the group operating profit level by the fall in equity dividend income
as a result of our reduced investment in equities. The underlying earnings per
share (excluding capital and revaluation movements) was 16.7p against 16.6p a
year earlier.
Shareholders will remember that, following our move to REIT status, the interim
dividend last year rose substantially from 7.0p to 10.0p per share. We are
pleased to report a further increase this year to 11.0p.
We have taken the opportunity in the last few months to strengthen our financial
position both by working towards having a fully-let property portfolio (which we
hope to achieve with the letting of our only vacant property in Yeovil, during
the second half) and by reducing our equity portfolio.
While our cash and borrowing capability give us the capacity to enhance our
property portfolio, we are still cautious about the sustainability of many
current valuations, especially where rents are under pressure. We are in a
strong financial position and continue to seek ways of ensuring that we lay the
foundations of medium term growth and continuing to deliver value to
shareholders.
Yours sincerely
J Hewitt
Chairman
26 August 2010
For further information, contact:
Highcroft Investments PLC
John Hewitt / Roberta Miles 01865 840 023
Charles Stanley Securities
Dugald Carlean 0207 149 6000
Condensed consolidated interim statement of comprehensive income
for the six months ended 30 June 2010
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| | | | Unaudited | | | | Unaudited | | | | Audited | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| | | | First | | | | First | | | | Full | | |
| | | | Half | | | | Half | | | | Year | | |
| | | | 2010 | | | | 2009 | | | | 2009 | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+-------------+
| | Note | Revenue | Capital | Total | | Revenue | Capital | Total | | Revenue | Capital | Total | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| | | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Continuing operations | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Gross rental income | | 1,002 | - | 1,002 | | 983 | - | 983 | | 1,943 | - | 1,943 | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Property operating | | (76) | - | (76) | | (112) | - | (112) | | (253) | - | (253) | | |
| expenses | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Net rental income | | 926 | - | 926 | | 871 | - | 871 | | 1,690 | - | 1,690 | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Realised gains on | | - | 42 | 42 | | - | - | - | | - | - | - | | |
| investment property | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Net gain on disposal | | - | 42 | 42 | | - | - | - | | - | - | - | | |
| of investment property | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Valuation gains on | | - | 755 | 755 | | - | 293 | 293 | | - | 1,616 | 1,616 | | |
| investment property | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Valuation losses on | | - | (25) | (25) | | - | (1,460) | (1,460) | | - | (416) | (416) | | |
| investment property | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Net valuation | | - | 730 | 730 | | - | (1,167) | (1,167) | | - | 1,200 | 1,200 | | |
| gains/(losses) on | | | | | | | | | | | | | | |
| investment property | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Dividend income | | 101 | - | 101 | | 142 | - | 142 | | 292 | - | 292 | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Gains on investments | | - | 105 | 105 | | - | 494 | 494 | | - | 1,679 | 1,679 | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Losses on investments | | - | (527) | (527) | | - | (671) | (671) | | - | (234) | (234) | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Net investment | | 101 | (422) | (321) | | 142 | (177) | (35) | | 292 | 1,445 | 1,737 | | |
| income/(loss) | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| Administrative | | (168) | - | (168) | | (148) | - | (148) | | (283) | - | (283) | | |
| expenses | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
| | | | | | | | | | | | | | | |
+------------------------+------+---------+-----------+---------+-+---------+-----------+---------+-+---------+---------+---------+----------+--+
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
| Operating | | 859 | 350 | 1,209 | | 865 | (1,344) | (479) | | 1,699 | 2,645 | 4,344 | |
| profit/(loss) before | | | | | | | | | | | | | |
| net financing costs | | | | | | | | | | | | | |
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
| | | | | | | | | | | | | | |
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
| Finance income | | 5 | - | 5 | | 2 | - | 2 | | 2 | - | 2 | |
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
| Finance expenses | | (2) | - | (2) | | (12) | - | (12) | | (20) | - | (20) | |
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
| Net finance costs | | 3 | - | 3 | | (10) | - | (10) | | (18) | - | (18) | |
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
| | | | | | | | | | | | | | |
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
| Profit/(loss) before | | 862 | 350 | 1,212 | | 855 | (1,344) | (489) | | 1,681 | 2,645 | 4,326 | |
| tax | | | | | | | | | | | | | |
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
| | | | | | | | | | | | | | |
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
| Income tax | 4 | - | 103 | 103 | | - | 32 | 32 | | (11) | (377) | (388) | |
| credit/(expense) | | | | | | | | | | | | | |
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
| Total profit/(loss) | | 862 | 453 | 1,315 | | 855 | (1,312) | (457) | | 1,670 | 2,268 | 3,938 | |
| and comprehensive | | | | | | | | | | | | | |
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
| income/(expense) for | | | | | | | | | | | | | |
| the financial period | | | | | | | | | | | | | |
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
| Basic and diluted | 6 | 16.7p | 8.7p | 25.4p | | 16.6p | (25.4)p | (8.8)p | | 32.3p | 43.9p | 76.2p | |
| earnings/(loss) per | | | | | | | | | | | | | |
| share | | | | | | | | | | | | | |
+------------------------+----+-------+--------+-------+-+-------+---------+--------+-+-------+-------+-------+----------+
Condensed consolidated interim statement of financial position
as at 30 June 2010
+-------------------------+------+-----------+-+---------+----------+----------+
| | | Unaudited | | Unaudited | Audited |
+-------------------------+------+-----------+-+--------------------+----------+
| | | 30 | | 30 | | 31 |
| | | June | | June | | December |
+-------------------------+------+-----------+-+---------+----------+----------+
| | | 2010 | | 2009 | | 2009 |
+-------------------------+------+-----------+-+---------+----------+----------+
| | Note | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------+------+-----------+-+---------+----------+----------+
| Assets | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Non-current assets | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Investment property | 7 | 28,300 | | 25,458 | | 27,825 |
+-------------------------+------+-----------+-+---------+----------+----------+
| Equity investments | 8 | 5,221 | | 6,530 | | 7,397 |
+-------------------------+------+-----------+-+---------+----------+----------+
| Total non-current | | 33,521 | | 31,988 | | 35,222 |
| assets | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Current assets | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Trade and other | | 83 | | 97 | | 103 |
| receivables | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Cash at bank and in | | 3,065 | | 573 | | 946 |
| hand | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Total current assets | | 3,148 | | 670 | | 1,049 |
+-------------------------+------+-----------+-+---------+----------+----------+
| | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Total assets | | 36,669 | | 32,658 | | 36,271 |
+-------------------------+------+-----------+-+---------+----------+----------+
| | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Liabilities | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Current liabilities | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Interest-bearing loans | | - | | 14 | | - |
| and borrowings | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Current income tax | | 286 | | 100 | | 90 |
+-------------------------+------+-----------+-+---------+----------+----------+
| Trade and other | | 792 | | 792 | | 777 |
| payables | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Total current | | 1,078 | | 906 | | 867 |
| liabilities | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Non-current liabilities | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Interest-bearing loans | 9 | - | | 637 | | - |
| and borrowings | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Deferred tax | | 668 | | 557 | | 969 |
| liabilities | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Total non-current | | 668 | | 1,194 | | 969 |
| liabilities | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Total liabilities | | 1,746 | | 2,100 | | 1,836 |
+-------------------------+------+-----------+-+---------+----------+----------+
| | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Net assets | | 34,923 | | 30,558 | | 34,435 |
+-------------------------+------+-----------+-+---------+----------+----------+
| | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Equity | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Issued share capital | | 1,292 | | 1,292 | | 1,292 |
+-------------------------+------+-----------+-+---------+----------+----------+
| Revaluation reserve - | | 6,442 | | 4,277 | | 5,696 |
| property | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Revaluation reserve - | | 1,630 | | 1,740 | | 2,656 |
| other | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Capital redemption | | 95 | | 95 | | 95 |
| reserve | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Realised capital | | 19,238 | | 18,174 | | 18,229 |
| reserve | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
| Retained earnings | | 6,226 | | 4,980 | | 6,467 |
+-------------------------+------+-----------+-+---------+----------+----------+
| Total equity | | 34,923 | | 30,558 | | 34,435 |
+-------------------------+------+-----------+-+---------+----------+----------+
| | | | | | | |
+-------------------------+------+-----------+-+---------+----------+----------+
Condensed consolidated interim statement of changes in equity
for the six months ended 30 June 2010
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| a) First half 2010 -Unaudited | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| | Equity | | Revaluation reserves | | Capital | | Realised | | Retained | | |
+--------------------------------------+---------+----------+-------------------------------+----------+------------+----------+----------+----------+----------+----------+---------+
| | | | Property | | Other | | Redemption | | Capital | | Earnings | | Total |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| | | | | | | | Reserve | | Reserve | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| At 1 January 2010 | 1,292 | | 5,696 | | 2,656 | | 95 | | 18,229 | | 6,467 | | 34,435 |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Dividends | - | | - | | - | | - | | - | | (827) | | (827) |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Transactions with owners | - | | - | | - | | - | | - | | (827) | | (827) |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Profit for the period | - | | - | | - | | - | | - | | 1,315 | | 1,315 |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Non-distributable items recognised | | | | | | | | | | | | | |
| in income statement: | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Revaluation gains/(losses) | - | | 730 | | (27) | | - | | - | | (703) | | - |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Tax on revaluation gains and losses | - | | - | | 69 | | - | | - | | (69) | | - |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Realised losses | - | | - | | - | | - | | (95) | | 95 | | - |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| (Surplus)/deficit attributable to | - | | (9) | | (1,095) | | - | | 1,104 | | - | | - |
| assets sold in the period | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Excess of cost over revalued amount | - | | 25 | | 27 | | - | | - | | (52) | | - |
| taken to retained earnings | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Total comprehensive income/(expense) | - | | 746 | | (1,026) | | - | | 1,009 | | 586 | | 1,315 |
| for the period | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| At 30 June 2010 | 1,292 | | 6,442 | | 1,630 | | 95 | | 19,238 | | 6,226 | | 34,923 |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| b) First half 2009 -Unaudited | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| | Equity | | Revaluation reserves | | Capital | | Realised | | Retained | | |
+--------------------------------------+---------+----------+-------------------------------+----------+------------+----------+----------+----------+----------+----------+---------+
| | | | Property | | Other | | Redemption | | Capital | | Earnings | | Total |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| | | | | | | | Reserve | | Reserve | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| At 1 January 2009 | 1,292 | | 4,080 | | 2,137 | | 95 | | 17,773 | | 6,227 | | 31,604 |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Dividends | - | | - | | - | | - | | - | | (589) | | (589) |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Transactions with owners | - | | - | | - | | - | | - | | (589) | | (589) |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Loss for the period | - | | - | | - | | - | | - | | (457) | | (457) |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Non-distributable items recognised | | | | | | | | | | | | | |
| in income statement: | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Revaluation gains/(losses) | - | | (1,167) | | (254) | | - | | - | | 1,421 | | - |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Tax on revaluation gains and losses | - | | - | | 51 | | - | | - | | (51) | | - |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Realised gains | - | | - | | - | | - | | 59 | | (59) | | - |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| (Surplus)/deficit attributable to | - | | - | | (342) | | - | | 342 | | - | | - |
| assets sold in the period | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Excess of cost over revalued amount | - | | 1,364 | | 148 | | - | | - | | (1,512) | | - |
| taken to retained earnings | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Total comprehensive income/(expense) | - | | 197 | | (397) | | - | | 401 | | (658) | | (457) |
| for the period | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| At 30 June 2009 | 1,292 | | 4,277 | | 1,740 | | 95 | | 18,174 | | 4,980 | | 30,558 |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| c) Full year 2009 -Audited | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| | Equity | | Revaluation reserves | | Capital | | Realised | | Retained | | |
+--------------------------------------+---------+----------+-------------------------------+----------+------------+----------+----------+----------+----------+----------+---------+
| | | | Property | | Other | | Redemption | | Capital | | Earnings | | Total |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| | | | | | | | Reserve | | Reserve | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| At 1 January 2009 | 1,292 | | 4,080 | | 2,137 | | 95 | | 17,773 | | 6,227 | | 31,604 |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Dividends | - | | - | | - | | - | | - | | (1,107) | | (1,107) |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Transactions with owners | - | | - | | - | | - | | - | | (1,107) | | (1,107) |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Profit for the period | - | | - | | - | | - | | - | | 3,938 | | 3,938 |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Non-distributable items recognised | | | | | | | | | | | | | |
| in income statement: | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Revaluation gains/(losses) | - | | 1,200 | | 1,230 | | - | | - | | (2,430) | | - |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Tax on revaluation gains and losses | - | | | | (343) | | - | | - | | 343 | | - |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Realised gains | - | | - | | - | | - | | 88 | | (88) | | - |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| (Surplus)/deficit attributable to | - | | - | | (368) | | - | | 368 | | - | | - |
| assets sold in the period | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Excess of cost over revalued amount | - | | 416 | | - | | - | | - | | (416) | | - |
| taken to retained earnings | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| Total comprehensive income for the | - | | 1,616 | | 519 | | - | | 456 | | 1,347 | | 3,938 |
| period | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| At 31 December 2009 | 1,292 | | 5,696 | | 2,656 | | 95 | | 18,229 | | 6,467 | | 34,435 |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
| | | | | | | | | | | | | | |
+--------------------------------------+---------+----------+----------+----------+---------+----------+------------+----------+----------+----------+----------+----------+---------+
Condensed consolidated interim statement of cash flows
for the six months ended 30 June 2010
+--------------------------------+-----------+----------+---------------------+----------+---------+
| | Unaudited | | Unaudited | | Audited |
| | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| | First | | First | | Full |
| | Half | | Half | | Year |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| | 2010 | | 2009 | | 2009 |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 |
| | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Operating activities | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Profit/(loss) for the period | 1,315 | | (457) | | 3,938 |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Adjustments for: | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Net valuation (gains)/losses | (730) | | 1,167 | | (1,200) |
| on investment property | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Gain on disposal of investment | (42) | | - | | - |
| property | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Net losses/(gains) on | 422 | | 177 | | (1,445) |
| investments | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Finance income | (5) | | (2) | | (2) |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Finance expense | 2 | | 12 | | 20 |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Income tax (expense)/credit | (103) | | (32) | | 388 |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Operating cash flow before | 859 | | 865 | | 1,699 |
| changes in working capital and | | | | | |
| provisions | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Decrease in trade and other | 20 | | 126 | | 120 |
| receivables | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Increase/(decrease) in trade | 13 | | (34) | | (49) |
| and other payables | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Cash generated from operations | 892 | | 957 | | 1,770 |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Finance income | 5 | | 2 | | 2 |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Finance expense | (2) | | (12) | | (20) |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Income tax paid | - | | (440) | | (457) |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Net cash flows from operating | 895 | | 507 | | 1,295 |
| activities | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Investing activities | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Purchase of fixed assets - | - | | (281) | | (281) |
| investment property | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| | (727) | | (161) | | (515) |
| - equity investments | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Sale of fixed assets | 297 | | - | | - |
| - investment property | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| | 2,481 | | 737 | | 1,845 |
| - equity investments | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Net cash flows from investing | 2,051 | | 295 | | 1,049 |
| activities | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Financing activities | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Loan repayments | - | | (603) | | (1,254) |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Dividends paid | (827) | | (589) | | (1,107) |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Net cash flows used in | (827) | | (1,192) | | (2,361) |
| financing activities | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Net increase/(decrease) in | 2,119 | | (390) | | (17) |
| cash and cash equivalents | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Cash and cash equivalents at 1 | 946 | | 963 | | 963 |
| January 2010 | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| Cash and cash equivalents at | 3,065 | | 573 | | 946 |
| 30 June 2010 | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
| | | | | | |
+--------------------------------+-----------+----------+---------------------+----------+---------+
NOTES
1. Nature of operations and general information
Highcroft Investments PLC ('Highcroft') and its subsidiary (together 'the
group') principal activities are investment in property and equities. It is
incorporated and domiciled in Great Britain. The address of Highcroft
Investments PLC's registered office, which is also its principal place of
business, is Thomas House, Langford Locks, Kidlington, OX5 1HR. Highcroft's
condensed consolidated interim financial statements are presented in Pounds
Sterling (GBP), which is also the functional currency of the parent company.
These condensed consolidated interim financial statements have been approved for
issue by the directors on 26 August 2010. The financial information for the year
ended 31 December 2009 set out in this interim report does not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31 December 2009 have
been filed with the Registrar of Companies. The auditor's report on those
financial statements was unqualified and did not contain statements under
Section 498(2) or Section 498(5) of the Companies Act 2006.
2. Basis of preparation
These condensed consolidated interim financial statements are for the six months
ended 30 June 2010. They have been prepared in accordance with IAS 34, Interim
Financial Reporting as adopted by the European Union. They do not include all
of the information required for full annual financial statements, and should be
read in conjunction with the consolidated financial statements of the Group for
the year ended 31 December 2009.
These condensed consolidated interim financial statements have been prepared
under the historical cost convention, as modified by the revaluation of
investment properties and the measurement of equity investments at fair value.
These condensed consolidated interim financial statements have been prepared in
accordance with the accounting policies adopted in the last annual financial
statements for the year to 31 December 2009.
The accounting policies have been applied consistently throughout the group for
the purposes of preparation of these condensed consolidated interim financial
statements.
3. Segmental reporting
The operating segment reporting format identifies the operating segments, the
performance of which is monitored by the group's management using a consistent
internal reporting structure. Segment results include items directly
attributable to a segment as well as those that can be allocated on a reasonable
basis.
The group is comprised of the following main operating segments:
· Commercial property comprising retail outlets, offices and warehouses.
· Residential property comprising mainly single-let houses.
· Financial assets comprising exchange-traded equity investments.
+-----------------------------+---------+--+---------+--+---------+
| | First | | First | | Full |
| | Half | | Half | | Year |
+-----------------------------+---------+--+---------+--+---------+
| | 2010 | | 2009 | | 2009 |
+-----------------------------+---------+--+---------+--+---------+
| | GBP'000 | | GBP'000 | | GBP'000 |
| | | | | | |
+-----------------------------+---------+--+---------+--+---------+
| Commercial property | | | | | |
+-----------------------------+---------+--+---------+--+---------+
| Gross income | 970 | | 950 | | 1,877 |
+-----------------------------+---------+--+---------+--+---------+
| Profit/(loss) for the | 1,212 | | (491) | | 2,236 |
| period | | | | | |
+-----------------------------+---------+--+---------+--+---------+
| Assets | 29,024 | | 24,038 | | 26,485 |
+-----------------------------+---------+--+---------+--+---------+
| Liabilities | 630 | | 1,238 | | 656 |
+-----------------------------+---------+--+---------+--+---------+
| Residential property | | | | | |
+-----------------------------+---------+--+---------+--+---------+
| Gross income | 32 | | 33 | | 66 |
+-----------------------------+---------+--+---------+--+---------+
| Profit for the period | 338 | | 54 | | 375 |
+-----------------------------+---------+--+---------+--+---------+
| Assets | 2,423 | | 2,077 | | 2,386 |
+-----------------------------+---------+--+---------+--+---------+
| Liabilities | 10 | | 11 | | 3 |
+-----------------------------+---------+--+---------+--+---------+
| Financial assets | | | | | |
+-----------------------------+---------+--+---------+--+---------+
| Gross income | 101 | | 142 | | 292 |
+-----------------------------+---------+--+---------+--+---------+
| (Loss)/profit for the | (235) | | (20) | | 1,327 |
| period | | | | | |
+-----------------------------+---------+--+---------+--+---------+
| Assets | 5,222 | | 6,543 | | 7,400 |
+-----------------------------+---------+--+---------+--+---------+
| Liabilities | 1,106 | | 851 | | 1,177 |
+-----------------------------+---------+--+---------+--+---------+
| Total | | | | | |
+-----------------------------+---------+--+---------+--+---------+
| Gross income | 1,103 | | 1,125 | | 2,235 |
+-----------------------------+---------+--+---------+--+---------+
| Profit/(loss) for the | 1,315 | | (457) | | 3,938 |
| period | | | | | |
+-----------------------------+---------+--+---------+--+---------+
| Assets | 36,669 | | 32,658 | | 36,271 |
+-----------------------------+---------+--+---------+--+---------+
| Liabilities | 1,746 | | 2,100 | | 1,836 |
+-----------------------------+---------+--+---------+--+---------+
| | | | | | |
+-----------------------------+---------+--+---------+--+---------+
22% of gross commercial property income arises from two tenants each
representing more than 10% of income.
+--------------------+---------+------+---------+------+---------+
| 4. Taxation | | | | | |
+--------------------+---------+------+---------+------+---------+
| | First | | First | | Full |
| | Half | | Half | | Year |
+--------------------+---------+------+---------+------+---------+
| | 2010 | | 2009 | | 2009 |
+--------------------+---------+------+---------+------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+--------------------+---------+------+---------+------+---------+
| Current tax: | | | | | |
+--------------------+---------+------+---------+------+---------+
| On revenue profits | - | | - | | - |
+--------------------+---------+------+---------+------+---------+
| On capital profits | (34) | | 19 | | 34 |
+--------------------+---------+------+---------+------+---------+
| Prior year | - | | - | | 11 |
| underprovision | | | | | |
+--------------------+---------+------+---------+------+---------+
| | (34) | | 19 | | 45 |
+--------------------+---------+------+---------+------+---------+
| Deferred tax | (69) | | (51) | | 343 |
+--------------------+---------+------+---------+------+---------+
| | (103) | | (32) | | 388 |
+--------------------+---------+------+---------+------+---------+
| | | | | | |
+--------------------+---------+------+---------+------+---------+
The taxation charge has been based on the estimated effective tax rate for the
full year. As a Real Estate Investment Trust the group does not pay corporation
tax on its profits and gains from its commercial and residential property
activities.
5. Dividends
On 26 August 2010, the directors declared a property income dividend of 11.00p
per share (2009 10.00p interim dividend) payable on 20 October 2010 to
shareholders registered at 24 September 2010.
The following property income distributions have been paid by the company.
+----------------------------+---------+------+---------+------+---------+
| | | | | | |
+----------------------------+---------+------+---------+------+---------+
| | First | | First | | Full |
| | Half | | Half | | Year |
+----------------------------+---------+------+---------+------+---------+
| | 2010 | | 2009 | | 2009 |
+----------------------------+---------+------+---------+------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 |
| | | | | | |
+----------------------------+---------+------+---------+------+---------+
| | | | | | |
+----------------------------+---------+------+---------+------+---------+
| 2009 final: 16.00p per | 827 | | 589 | | 589 |
| ordinary share (2008 final | | | | | |
| 11.40p ) | | | | | |
+----------------------------+---------+------+---------+------+---------+
| 2009 interim: 10.00p per | - | | - | | 518 |
| ordinary share | | | | | |
+----------------------------+---------+------+---------+------+---------+
| | 827 | | 589 | | 1,107 |
+----------------------------+---------+------+---------+------+---------+
| | | | | | |
+----------------------------+---------+------+---------+------+---------+
6. Earnings per share
The calculation of earnings per share is based on the profit for the period of
GBP1,315,000 (2009 loss GBP457,000) and on 5,167,240 shares (2009 5,167,240)
which is the weighted average number of shares in issue during the period ended
30 June 2010 and throughout the period since 1 January 2009.
In order to draw attention to the impact of valuation gains and losses which are
included in the income statement but not available for distribution under the
company's articles of association, an adjusted earnings per share based on the
profit available for distribution of GBP862,000 (2009 GBP855,000) has been
calculated.
+-------------------------+---------+--+---------+----------+---------+
| | First | | First | | Full |
| | Half | | Half | | Year |
+-------------------------+---------+--+---------+----------+---------+
| | 2010 | | 2009 | | 2009 |
+-------------------------+---------+--+---------+----------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------+---------+--+---------+----------+---------+
| Earnings: | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| Basic earnings | 1,315 | | (457) | | 3,938 |
+-------------------------+---------+--+---------+----------+---------+
| Adjustments for: | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| Net valuation | (772) | | 1,167 | | (1,200) |
| (profits)/losses on | | | | | |
| investment property | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| Gains and losses on | 422 | | 177 | | (1,445) |
| investments | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| Income tax on | (103) | | (32) | | 377 |
| (gains)/losses | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| Adjusted earnings | 862 | | 855 | | 1,670 |
+-------------------------+---------+--+---------+----------+---------+
| | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| Per share amount: | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| Basic earnings per | 25.4p | | (8.8)p | | 76.2p |
| share | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| Adjustments for: | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| Net valuation gains on | (14.9)p | | 22.6p | | (23.2)p |
| investment property | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| Gains and losses on | 8.2p | | 3.4p | | (28.0)p |
| investments | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| Income tax on gains and | (2.0)p | | (0.6)p | | 7.3p |
| losses | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| Adjusted earnings per | 16.7p | | 16.6p | | 32.3p |
| share | | | | | |
+-------------------------+---------+--+---------+----------+---------+
| | | | | | |
+-------------------------+---------+--+---------+----------+---------+
7. Investment property
+---------------------+---------+---+---------+--+---------+
| | First | | First | | Full |
| | Half | | Half | | Year |
+---------------------+---------+---+---------+--+---------+
| | 2010 | | 2009 | | 2009 |
+---------------------+---------+---+---------+--+---------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------+---------+---+---------+--+---------+
| | | | | | |
+---------------------+---------+---+---------+--+---------+
| Valuation at 1 | 27,825 | | 26,344 | | 26,344 |
| January 2010 | | | | | |
+---------------------+---------+---+---------+--+---------+
| Additions | - | | 281 | | 281 |
+---------------------+---------+---+---------+--+---------+
| Disposals | (255) | | - | | - |
+---------------------+---------+---+---------+--+---------+
| Gain/(loss) on | 730 | | (1,167) | | 1,200 |
| revaluation | | | | | |
+---------------------+---------+---+---------+--+---------+
| Valuation at 30 | 28,300 | | 25,458 | | 27,825 |
| June 2010 | | | | | |
+---------------------+---------+---+---------+--+---------+
| | | | | | |
+---------------------+---------+---+---------+--+---------+
The directors have used an external independent valuation of properties at 30
June 2010 which has been carried out consistently with the annual valuation.
8. Equity Investments
+-------------------------------+---------+--+---------+--+---------+
| Listed and unlisted | First | | First | | Full |
| | Half | | Half | | Year |
+-------------------------------+---------+--+---------+--+---------+
| | 2010 | | 2009 | | 2009 |
+-------------------------------+---------+--+---------+--+---------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------------+---------+--+---------+--+---------+
| Valuation at 1 January 2010 | 7,397 | | 7,282 | | 7,282 |
+-------------------------------+---------+--+---------+--+---------+
| Additions | 727 | | 161 | | 515 |
+-------------------------------+---------+--+---------+--+---------+
| Disposals | (2,601) | | (659) | | (1,723) |
+-------------------------------+---------+--+---------+--+---------+
| (Deficit)/surplus on | (290) | | (161) | | 1,230 |
| revaluation in excess of cost | | | | | |
+-------------------------------+---------+--+---------+--+---------+
| Revaluation decrease below | (27) | | (160) | | (18) |
| cost | | | | | |
+-------------------------------+---------+--+---------+--+---------+
| Revaluation increase still | 15 | | 67 | | 111 |
| below cost | | | | | |
+-------------------------------+---------+--+---------+--+---------+
| Valuation at 30 June 2010 | 5,221 | | 6,530 | | 7,397 |
+-------------------------------+---------+--+---------+--+---------+
| | | | | | |
+-------------------------------+---------+--+---------+--+---------+
9. Interest-bearing loans and borrowings
+-------------------------------+---------+--+---------+--+---------+
| | First | | First | | Full |
| | Half | | Half | | Year |
+-------------------------------+---------+--+---------+--+---------+
| | 2010 | | 2009 | | 2009 |
+-------------------------------+---------+--+---------+--+---------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------------+---------+--+---------+--+---------+
| Medium term bank loan | - | | 637 | | - |
+-------------------------------+---------+--+---------+--+---------+
| | | | | | |
+-------------------------------+---------+--+---------+--+---------+
| The medium term bank loan | | | | | |
| comprises amounts falling due | | | | | |
| as follows: | | | | | |
+-------------------------------+---------+--+---------+--+---------+
| Between one and two years | - | | 71 | | - |
+-------------------------------+---------+--+---------+--+---------+
| Between two and five years | - | | 238 | | - |
+-------------------------------+---------+--+---------+--+---------+
| Over five years | - | | 328 | | - |
+-------------------------------+---------+--+---------+--+---------+
| | - | | 637 | | - |
+-------------------------------+---------+--+---------+--+---------+
10. Related party transactions
Kingerlee Holdings Limited owns, through its wholly owned subsidiaries, 25.4%
(2009 25.4%) of the company's shares and D H Kingerlee and J C Kingerlee are
directors of the company, Kingerlee Holdings Limited and its wholly owned
subsidiaries and shareholders of the company and Kingerlee Holdings Limited.
During the period, the group made purchases from Kingerlee Holdings Limited or
its subsidiaries, being a service charge in relation to services at Thomas
House, Kidlington of GBP7,000 (2009 GBP7,000). The amount owed at 30 June 2010
was nil (2009 nil). All transactions were undertaken on an arm's length basis.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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