TIDMHCFT
RNS Number : 5011U
Highcroft Investments PLC
30 July 2015
30 July 2015
Highcroft Investments PLC
Interim Report for the six months ended 30 June 2015
Key Highlights:
*Gross rental income increased 7% to GBP1,585,000 (2014
GBP1,482,000)
*Net rental income reduced 1% to GBP1,394,000 (2014
GBP1,412,000)
*Total earnings per share of 64.2p (2014 85.7p)
*Net assets per share of 965p (June 2014 886p, December 2014
923p)
*Interim property income distribution up 8% to 14.30p (2014
13.25p)
*Post period-end property sales in excess of period-end
valuation.
Dear Shareholder
I am pleased to report that in the 6 months ended 30 June 2015,
despite short-term profits being lower, the group has been
strengthened by further re-shaping of its property portfolio. Our
confidence in the near and medium term is reflected by a proposed
interim property income distribution of 14.30p per share - an
increase of 8% on 2014. This continues our policy of raising our
dividend ahead of inflation.
Results for the period
Property
Gross rental income has risen by 7%. This increase arises
primarily from the rental income from our Ash Vale and Crawley
properties purchased in the second half of 2014 and our recent
acquisition at Wisbech, net of the rental income forgone from the
sale of our Bristol property in April 2014 and our Beckenham
property in July 2014. In addition we have benefitted from two
positive rent reviews. However, three properties in our portfolio
have been vacant for part of this period, resulting in a reduced
rental income. I am pleased to report that two new leases were
completed in the period and the third was completed after the
period-end. Our property expenses for the six month period
increased to GBP191,000 (2014 GBP70,000). The increase arose from
significant one-off works, including asbestos removal, which had to
be carried out at our Norwich and Leamington Spa retail units. The
majority of the works have been completed in the period ended 30
June 2015.
The external, independent valuation of our property portfolio at
30 June 2015 showed a gain of 3.4% on a like-for-like basis arising
from positive lease events and an improving market, and is a
reflection of the strength and quality of our portfolio. As
announced on 6 July 2015, after the period-end, we sold our
Warrington unit at auction for a gross consideration of
GBP1,100,000. We also exchanged contracts in July on one
residential property yielding GBP835,000 gross. Both transactions,
which were in excess of their year-end valuations, are expected to
complete during August 2015 and we intend to invest these funds
back into the commercial portfolio as and when a sound investment
is identified.
The upgrading of the property portfolio continues with the aim
of improving the weighted unexpired lease term, strengthening
covenants and increasing the average lot-size. On 15 May 2015 we
announced the purchase of our largest property asset, a multi-let
retail park in Wisbech for GBP8.5 million. This was an unusually
complex transaction as the purchase was of a corporate entity which
resulted in higher than usual professional fees and a lengthy
acquisition timetable. We are optimistic that this asset will
perform well within our portfolio.
Our property portfolio is now valued at GBP57.0 million (2014
GBP40.0 million).
Equities
Equity markets have undergone considerable volatility in the
period, and we took advantage of this to reduce our portfolio a
little further in line with our stated long-term strategy. In
keeping with this approach, dividend income from our equity
portfolio reduced to GBP87,000 (2014 GBP154,000) due to a scaling
back of our exposure to equities since 1 January 2014, and also the
fact that the 2014 result was augmented by the Vodafone de-merger.
We raised GBP622,000 from the sale of equities at a loss of
GBP12,000 to the year-end valuation and made a small purchase, as a
result of a de-merger, costing GBP7,000. The net loss on valuation
of GBP210,000 in the half year is a reflection of the challenging
market conditions, with only seven of our twenty-six holdings
showing gains.
Financial
Earnings per share on revenue activities reduced to 21.8p (2014
39.9p) as 2014 was enhanced by the disposal of our Bristol
property. In addition the company benefited from a gain on the
property valuations of GBP2,329,000 net of the reduction in the
equity portfolio valuation of GBP210,000. The more volatile measure
of total earnings per share which includes capital profits and
valuation gains was 64.2p (2014 85.7p).
The cash position at 30 June 2015 was GBP2,010,000 (2014
GBP5,863,000). This will be augmented by the proceeds of the
property disposals, referred to above, of GBP1,935,000 during
August. We have taken GBP7,500,000 of new borrowing in the period
and our medium term loans total GBP11,500,000 at 30 June 2015, a
gearing level of 19%.
Dividend
I am pleased to report that we will be paying an interim
property income distribution of 14.30p (2014 13.25p) per share,
payable on 16 October 2015 to shareholders registered on 18
September 2015.
Outlook
As a consequence of our property acquisition and lease events
during the period, we expect to be able to report an increase in
gross rental income in the second half of our financial year.
However, profits on capital activities are likely to moderate in
the second half of the year as the pace of growth in the commercial
market eases.
Whilst we remain cautious about the outlook for medium-term
interest rates, suitable investment opportunities may lead us to
further alter the equity/property balance and to increase gearing.
We continue to look for suitable commercial properties to enhance
our portfolio and enable us to continue our policy of increasing
dividends above the level of inflation.
John Hewitt
Chairman
29 July 2015
For further information, contact:
Highcroft Investments PLC
John Hewitt/Roberta Miles 01865 840023
Charles Stanley Securities
Dugald Carlean / Karri Vuori 020 7149 6000
Condensed consolidated interim statement of comprehensive income
(unaudited)
for the six months ended 30 June 2015
Unaudited Unaudited Audited
---------------------- ---- ---------------------------- ---------------------------- ----------------------------
First half First half
2015 2014 Full year 2014
---------------------- ---- ---------------------------- ---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Continuing operations
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Gross rental income 1,585 - 1,585 1,482 - 1,482 3,079 - 3,079
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Property operating
expenses (191) - (191) (70) - (70) (158) - (158)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net rental income 1,394 - 1,394 1,412 - 1,412 2,921 - 2,921
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Realised gains on
investment property 22 - 22 736 - 736 941 - 941
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Realised losses on
investment property - - - - - - (4) - (4)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net gain on disposal
of investment
property 22 - 22 736 - 736 937 - 937
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Valuation gains on
investment property - 2,329 2,329 - 2,585 2,585 - 3,785 3,785
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Valuation losses on
investment property - - - - (150) (150) - (150) (150)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net valuation gains
on investment
property - 2,329 2,329 - 2,435 2,435 - 3,635 3,635
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Dividend income 87 - 87 154 - 154 437 - 437
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Gains on investments 4 52 56 - 236 236 - 231 231
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Losses on investments (16) (262) (278) - (299) (299) - (606) (606)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net investment
income/(loss) 75 (210) (135) 154 (63) 91 437 (375) 62
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Administrative
expenses (243) - (243) (159) - (159) (432) - (432)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Operating profit
before
net financing costs 1,248 2,119 3,367 2,143 2,372 4,515 3,863 3,260 7,123
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Finance income 3 - 3 6 - 6 8 - 8
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Finance expenses (128) - (128) (88) - (88) (178) - (178)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net finance costs (125) - (125) (82) - (82) (170) - (170)
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit before tax 1,123 2,119 3,242 2,061 2,372 4,433 3,693 3,260 6,953
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Income tax
credit/(expense) 4 - 73 73 - (5) (5) 65 39 104
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total profit and
comprehensive
income for the
financial
period 1,123 2,192 3,315 2,061 2,367 4,428 3,758 3,299 7,057
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Basic and diluted
earnings
per share 6 21.8p 42.4p 64.2p 39.9p 45.8p 85.7p 72.7p 63.8p 136.5p
---------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Condensed consolidated interim statement of financial position
(unaudited)
as at 30 June 2015
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
Note GBP'000 GBP'000 GBP'000
------------------------------- ---- --------- --------- ------------
Assets
------------------------------- ---- --------- --------- ------------
Investment property 7 57,022 40,076 46,523
------------------------------- ---- --------- --------- ------------
Equity investments 8 3,695 5,216 4,532
------------------------------- ---- --------- --------- ------------
Total non-current assets 60,717 45,292 51,055
------------------------------- ---- --------- --------- ------------
Current assets
------------------------------- ---- --------- --------- ------------
Trade and other receivables 612 390 415
------------------------------- ---- --------- --------- ------------
Cash at bank and in hand 2,010 5,863 2,039
------------------------------- ---- --------- --------- ------------
Total current assets 2,622 6,253 2,454
------------------------------- ---- --------- --------- ------------
Total assets 63,339 51,545 53,509
------------------------------- ---- --------- --------- ------------
Liabilities
------------------------------- ---- --------- --------- ------------
Current liabilities
------------------------------- ---- --------- --------- ------------
Current corporation tax 5 5 -
------------------------------- ---- --------- --------- ------------
Trade and other payables 1,570 1,178 1,312
------------------------------- ---- --------- --------- ------------
Total current liabilities 1,575 1,183 1,312
------------------------------- ---- --------- --------- ------------
Non-current liabilities
------------------------------- ---- --------- --------- ------------
Interest-bearing loans and
borrowings 9 11,500 4,000 4,000
------------------------------- ---- --------- --------- ------------
Deferred tax liabilities 423 604 495
------------------------------- ---- --------- --------- ------------
Total non-current liabilities 11,923 4,604 4,495
------------------------------- ---- --------- --------- ------------
Total liabilities 13,498 5,787 5,807
------------------------------- ---- --------- --------- ------------
Net assets 49,841 45,758 47,702
------------------------------- ---- --------- --------- ------------
Equity
------------------------------- ---- --------- --------- ------------
Issued share capital 1,292 1,292 1,292
------------------------------- ---- --------- --------- ------------
Revaluation reserve - property 13,661 9,938 11,332
------------------------------- ---- --------- --------- ------------
Revaluation reserve - other 785 1,932 1,335
------------------------------- ---- --------- --------- ------------
Capital redemption reserve 95 95 95
------------------------------- ---- --------- --------- ------------
Realised capital reserve 25,137 24,220 24,785
------------------------------- ---- --------- --------- ------------
Retained earnings 8,871 8,281 8,863
------------------------------- ---- --------- --------- ------------
Total equity 49,841 45,758 47,702
------------------------------- ---- --------- --------- ------------
Condensed consolidated interim statement of changes in
equity
for the six months ended 30 June 2015
a) First half 2015 - Unaudited
Revaluation reserves
--------------------------- -------- -------------------------- ----------- -------- --------- --------
Capital Realised Retained
Equity Property Other redemption capital earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
At 1 January 2015 1,292 11,332 1,335 95 24,785 8,863 47,702
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Dividends - - - - - (1,176) (1,176)
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Reserve transfers:
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Non-distributable
items recognised
in income statement:
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Revaluation gains/(losses) - 2,329 (210) - - (2,119) -
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Tax on revaluation
gains/(losses) - - - - - - -
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Realised gains - - - - 12 (12) -
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Surplus attributable
to assets sold - - (340) - 340 - -
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Excess of cost
over revalued amount
taken to retained
earnings - - - - - - -
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Transactions with
owners - 2,329 (550) - 352 (3,307) (1,176)
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
Profit and total
comprehensive income
for the period - - - - - 3,315 3,315
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
At 30 June 2015 1,292 13,661 785 95 25,137 8,871 49,841
--------------------------- -------- ------------ ------------ ----------- -------- --------- --------
b) First half 2014 - Unaudited
Revaluation reserves
---------------------- -------- -------------------------- ----------- -------- --------- --------
Capital Realised Retained
Equity Property Other redemption capital earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
At 1 January 2014 1,292 7,353 1,972 95 24,220 7,496 42,428
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
Dividends - - - - - (1,098) (1,098)
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
Reserve transfers:
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
Non-distributable
items recognised
in income statement:
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
Revaluation gains/(
losses) - 2,435 (63) - - (2,372) -
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
Tax on revaluation
gains/(losses) - - - - - - -
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
Realised gains - - - - - - -
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
Surplus attributable
to assets sold - - - - - - -
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
Excess of cost
over revalued amount
taken to retained
earnings - 150 23 - - (173) -
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
Transactions with
owners - 2,585 (40) - - (3,643) (1,098)
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
Profit and total
comprehensive income
for the period - - - - - 4,428 4,428
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
At 30 June 2014 1,292 9,938 1,932 95 24,220 8,281 45,758
---------------------- -------- ------------ ------------ ----------- -------- --------- --------
Condensed consolidated interim statement of
changes in equity continued
for the six months ended 30 June 2015
c) Full year 2014 - Audited
Revaluation
reserves
--------------------------- -------- --------------------- ----------- -------- --------- --------
Capital Realised Retained
Equity Property Other redemption capital earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
At 1 January 2014 1,292 7,353 1,972 95 24,220 7,496 42,428
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
Dividends - - - - - (1,783) (1,783)
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
Reserve transfers:
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
Non-distributable
items recognised
in income statement:
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
Revaluation gains/(losses) - 3,635 (65) - - (3,570) -
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
Tax on revaluation
gains/(losses) - - (7) - - 7 -
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
Realised gains - - - - 756 (756) -
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
(Surplus)/deficit
attributable to
assets sold - 756 (565) - (191) - -
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
Excess of cost
over revalued amount
taken to retained
earnings - (412) - - - 412 -
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
Transactions with
owners - 3,979 (637) - 565 (5,690) (1,783)
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
Profit and total
comprehensive income
for the period - - - - - 7,057 7,057
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
At 31 December
2014 1,292 11,332 1,335 95 24,785 8,863 47,702
--------------------------- -------- ---------- --------- ----------- -------- --------- --------
Condensed consolidated interim statement of cash flows
for the six months ended 30 June 2015
Unaudited Unaudited Audited
First First Full
half half year
2015 2014 2014
GBP'000 GBP'000 GBP'000
---------------------------------------------------------- --------- --------- --------
Operating activities
---------------------------------------------------------- --------- --------- --------
Profit for the period 3,315 4,428 7,057
---------------------------------------------------------- --------- --------- --------
Adjustments for:
---------------------------------------------------------- --------- --------- --------
Net valuation gains on investment
property (2,329) (2,435) (3,635)
---------------------------------------------------------- --------- --------- --------
Gain on disposal of investment property (22) (736) (937)
---------------------------------------------------------- --------- --------- --------
Net losses on investments 222 63 375
---------------------------------------------------------- --------- --------- --------
Finance income (3) (6) (8)
---------------------------------------------------------- --------- --------- --------
Finance expense 128 88 178
---------------------------------------------------------- --------- --------- --------
Income tax (credit)/expense (73) 5 (104)
---------------------------------------------------------- --------- --------- --------
Operating cash flow before changes
in working capital and provisions 1,238 1,407 2,926
---------------------------------------------------------- --------- --------- --------
(Increase)/decrease in trade and
other receivables (197) 32 7
---------------------------------------------------------- --------- --------- --------
Increase in trade and other payables 263 18 152
---------------------------------------------------------- --------- --------- --------
Cash generated from operations 1,304 1,457 3,085
---------------------------------------------------------- --------- --------- --------
Finance income 3 6 8
---------------------------------------------------------- --------- --------- --------
Finance expense (128) (88) (178)
---------------------------------------------------------- --------- --------- --------
Income tax paid - - (5)
---------------------------------------------------------- --------- --------- --------
Net cash flows from operating activities 1,179 1,375 2,910
---------------------------------------------------------- --------- --------- --------
Investing activities
---------------------------------------------------------- --------- --------- --------
Purchase of fixed assets - investment
property (8,574) - (6,084)
---------------------------------------------------------- --------- --------- --------
- equity investments (7) (52) (649)
---------------------------------------------------------- --------- --------- --------
Sale of fixed assets - investment
property 426 2,510 3,548
---------------------------------------------------------- --------- --------- --------
- equity investments 623 - 969
---------------------------------------------------------- --------- --------- --------
Net cash flows from investing activities (7,532) 2,458 (2,216)
---------------------------------------------------------- --------- --------- --------
Financing activities
---------------------------------------------------------- --------- --------- --------
New bank borrowings 7,500 - -
---------------------------------------------------------- --------- --------- --------
Dividends paid (1,176) (1,098) (1,783)
---------------------------------------------------------- --------- --------- --------
Net cash flows from financing activities 6,324 (1,098) (1,783)
---------------------------------------------------------- --------- --------- --------
Net (decrease)/increase in cash
and cash equivalents (29) 2,735 (1,089)
---------------------------------------------------------- --------- --------- --------
Cash and cash equivalents at 1 January
2014 2,039 3,128 3,128
---------------------------------------------------------- --------- --------- --------
Cash and cash equivalents at 30
June 2015 2,010 5,863 2,039
---------------------------------------------------------- --------- --------- --------
Notes (Unaudited)
for the six months ended 30 June 2015
1. Nature of operations and general information
Highcroft Investments PLC ('Highcroft') and its subsidiaries'
(together 'the group') principal activity is 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 group. These
condensed consolidated interim financial statements have been
approved for issue by the directors on 29 July 2015. The financial
information for the period ended 30 June 2015 set out in this
interim report does not constitute statutory accounts as defined in
Section 404 of the Companies Act 2006. The group's statutory
financial statements for the year ended 31 December 2014 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 2015. They have been prepared in
accordance with IAS 34, Interim Financial Reporting. 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
2014.
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 2014.
The accounting policies have been applied consistently
throughout the group for the purposes of preparation of these
condensed consolidated interim financial statements.
In accordance with IAS 40 'Investment Property', management have
assessed whether the acquisition of B L (Wisbech) Limited and its
subsidiary Belgrave Land (Wisbech) Limited during the period
represented an asset purchase or a business combination within the
scope of IFRS 3. Management have determined that the acquisition
represented an asset purchase since it did not meet the IFRS 3
definition of a business, specifically since the related services
transferred are considered to be administrative functions rather
than processes as defined by IFRS 3.
The financial statements are drawn up on a going concern basis.
The directors have a reasonable expectation that the group has
adequate resources to continue in operational existence for the
foreseeable future, and consider that there are no material
uncertainties that lead to significant doubt upon the group's
ability to continue as a going concern. Cash flow forecasts are
prepared annually as part of the planning and budgeting process and
are monitored and reworked regularly. The group has fixed term non
amortising borrowing and has additional headroom available. In
addition the group has relatively liquid assets in the form of
listed equity investments on which it can draw if necessary.
3. Segment reporting
Segmental information is presented in the condensed consolidated
interim financial statements in respect of the group's business
segments. The business segment reporting format reflects the
group's management and internal reporting structure. Segment
results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. All gross income
is from external tenants or external investments.
The group is comprised of the following main business
segments:
Commercial property comprising retail outlets, offices,
warehouses and retail warehouses in England and Wales
Residential property comprising single-let houses and flats in
England
Financial assets comprising exchange-traded equity
investments.
3. Segment reporting continued
First First Full
half half year
2015 2014 2014
GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- --------
Commercial property
----------------------------- -------- -------- --------
Gross income 1,564 1,461 3,044
----------------------------- -------- -------- --------
Profit for the period 3,098 4,210 6,787
----------------------------- -------- -------- --------
Assets 58,456 44,924 47,622
----------------------------- -------- -------- --------
Liabilities 12,798 4,963 5,164
----------------------------- -------- -------- --------
Residential property
----------------------------- -------- -------- --------
Gross income 21 21 35
----------------------------- -------- -------- --------
Profit for the period 293 148 161
----------------------------- -------- -------- --------
Assets 1,182 1,401 1,308
----------------------------- -------- -------- --------
Liabilities - 2 -
----------------------------- -------- -------- --------
Financial assets
----------------------------- -------- -------- --------
Gross income 87 154 437
----------------------------- -------- -------- --------
(Loss)/profit for the period (76) 70 109
----------------------------- -------- -------- --------
Assets 3,701 5,220 4,579
----------------------------- -------- -------- --------
Liabilities 699 813 643
----------------------------- -------- -------- --------
Total
----------------------------- -------- -------- --------
Gross income 1,672 1,636 3,516
----------------------------- -------- -------- --------
Profit for the period 3,315 4,428 7,057
----------------------------- -------- -------- --------
Assets 63,339 51,545 53,509
----------------------------- -------- -------- --------
Liabilities 13,497 5,778 5,807
----------------------------- -------- -------- --------
In 2015 the largest tenant represented 12% (2014 13%) and the
second largest tenant represented 11% (2014 11%) of gross
commercial property income for the period.
4. Income tax (credit)/expense
First First Full
half half year
2015 2014 2014
GBP'000 GBP'000 GBP'000
================================== ======== ======== ========
Current tax:
---------------------------------- -------- -------- --------
On revenue profits - - (65)
---------------------------------- -------- -------- --------
On capital profits - - (51)
---------------------------------- -------- -------- --------
Prior year under/(over) provision - 5 5
================================== ======== ======== ========
- 5 (111)
---------------------------------- -------- -------- --------
Deferred tax (73) - 7
================================== ======== ======== ========
(73) 5 (104)
================================== ======== ======== ========
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 29 July 2015, the directors declared a property income
dividend of 14.30p per share (2014 13.25p interim dividend) payable
on 16 October 2015 to shareholders registered at 18 September
2015.
The following property income distributions have been paid by
the company:
First First Full
half half year
2015 2014 2014
GBP'000 GBP'000 GBP'000
================================== ======== ======== ========
2014 final: 22.75p per ordinary
share (2013 final 21.25p) 1,176 1,098 1,098
---------------------------------- -------- -------- --------
2014 interim: 13.25p per ordinary
share - - 685
================================== ======== ======== ========
1,176 1,098 1,783
================================== ======== ======== ========
6. Earnings per share
The calculation of earnings per share is based on the profit for
the period of GBP3,315,000 (2014 GBP4,428,000) and on 5,167,240
shares (2014 5,167,240) which is the weighted average number of
shares in issue during the period ended
30 June 2015 and throughout the period since 1 January 2014.
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 GBP1,123,000 (2014 GBP2,061,000) has been
calculated.
First First Full
half half year
2015 2014 2014
GBP'000 GBP'000 GBP'000
==================================== ======== ======== ========
Earnings:
------------------------------------ -------- -------- --------
Basic earnings 3,315 4,428 7,057
------------------------------------ -------- -------- --------
Adjustments for:
------------------------------------ -------- -------- --------
Net valuation profits on investment
property (2,329) (2,435) (3,635)
------------------------------------ -------- -------- --------
Gains and losses on investments 210 63 375
------------------------------------ -------- -------- --------
Income tax on gains and losses (73) 5 (39)
==================================== ======== ======== ========
Adjusted earnings 1,123 2,061 3,758
==================================== ======== ======== ========
Per share amount:
------------------------------------ -------- -------- --------
Basic earnings per share 64.2p 85.7p 136.5p
------------------------------------ -------- -------- --------
Adjustments for:
------------------------------------ -------- -------- --------
Net valuation gains on investment
property (45.1)p (47.1)p (70.3)p
------------------------------------ -------- -------- --------
Gains and losses on investments 4.1p 1.2p 7.2p
------------------------------------ -------- -------- --------
Income tax on gains and losses (1.4p) 0.1p (0.7p)
==================================== ======== ======== ========
Adjusted earnings per share 21.8p 39.9p 72.7p
==================================== ======== ======== ========
7. Investment property
First First Full
half half year
2015 2014 2014
GBP'000 GBP'000 GBP'000
============================ ======== ======== ========
Valuation at 1 January 2015 46,523 39,415 39,415
---------------------------- -------- -------- --------
Additions 8,574 - 6,084
---------------------------- -------- -------- --------
Disposals (404) (1,775) (2,611)
---------------------------- -------- -------- --------
Gain on revaluation 2,329 2,436 3,635
============================ ======== ======== ========
Valuation at 30 June 2015 57,022 40,076 46,523
============================ ======== ======== ========
The directors have used an external independent valuation of
properties at 30 June 2015 which has been carried out consistently
with the annual valuation.
8. Equity investments
First First Full
half half year
2015 2014 2014
GBP'000 GBP'000 GBP'000
================================= ======== ======== ========
Valuation at 1 January 2015 4,532 5,227 5,227
--------------------------------- -------- -------- --------
Additions 7 52 649
--------------------------------- -------- -------- --------
Disposals (634) - (1,205)
--------------------------------- -------- -------- --------
(Deficit)/surplus on revaluation
in excess of cost (210) (40) (65)
--------------------------------- -------- -------- --------
Revaluation decrease below cost (16) (25) (76)
--------------------------------- -------- -------- --------
Revaluation increase still below
cost 16 2 2
================================= ======== ======== ========
Valuation at 30 June 2015 3,695 5,216 4,532
================================= ======== ======== ========
9. Interest bearing loans
First First Full
half half year
2015 2014 2014
GBP'000 GBP'000 GBP'000
==================================== ======== ======== ========
Medium term loans 11,500 4,000 4,000
==================================== ======== ======== ========
The medium term bank loans comprise
amounts falling due as follows:
------------------------------------ -------- -------- --------
Over five years 11,500 4,000 4,000
==================================== ======== ======== ========
During the period GBP7,500,000 of new non-amortising fixed-term
debt was drawn. The debt is secured on certain assets within the
group's property portfolio.
10. Related party transactions
Kingerlee Holdings Limited owns, through its wholly owned
subsidiaries, 27.2% (2014 25.5%) of the company's shares and D H
Kingerlee is a director of both 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 (2014
GBP7,000). The amount owed at 30 June 2015 was nil (2014 nil). All
transactions were undertaken on an arm's length basis.
11. Events after the reporting date
On 6 July 2015 the group exchanged contracts for the sale of its
Warrington property for GBP1,100,000, an uplift of GBP150,000 on
the year-end valuation. The transaction is expected to complete
during August 2015. On 8 July 2015 the group exchanged contracts
for the sale of one of its remaining two residential single-let
units for GBP835,000, an uplift of GBP265,000 on the year-end
valuation. This unit had previously been occupied under a regulated
tenancy.
12. Net assets per share
First First Full
half half year
2015 2014 2014
=========================== ============= ============= =============
Net assets GBP49,841,000 GBP45,758,000 GBP47,702,000
--------------------------- ------------- ------------- -------------
Ordinary shares in issue 5,167,240 5,167,240 5,167,240
--------------------------- ------------- ------------- -------------
Basic net assets per share 965p 886p 923p
=========================== ============= ============= =============
Statement of directors' responsibilities
The directors confirm that, to the best of their knowledge, this
condensed consolidated set of half-year financial statements has
been prepared in accordance with IAS 34. The half-year management
report includes a fair review of the information required by 4.2.7
and 4.2.8 of the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority, namely:
-- an indication of the important events that have occurred
during the first six months of the financial year ending 31
December 2015 and their impact on the condensed consolidated set of
half-year financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the
financial year; and
-- disclosure of material related party transactions in the
first six months of the financial year, and any material changes in
the related party transactions described in the last Annual
Report.
A list of current directors is maintained on the Highcroft
Investments PLC website: www.highcroftplc.com.
By order of the board
John Hewitt
Chairman
29 July 2015
This information is provided by RNS
The company news service from the London Stock Exchange
END
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