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TIDMMKLW
RNS Number : 8498X
Mucklow(A.& J.)Group PLC
22 February 2012
Mucklow (A & J) Group plc
Half-Yearly Report
22 February 2012
Embargoed: 7.00am
Rupert Mucklow, Chairman commented: "I am pleased to report good progress being made in the first six months of our financial year, with a 19% improvement in underlying pre-tax profit and a 3% increase in the interim dividend."
Financial Summary
for the six months ended 31 December 2011
Income statement Six months Six months
ended ended
-----------------------------------
31 December 31 December
2011 2010
----------------------------------- ------------ ------------
Underlying pre-tax profit (GBPm)
(1) 6.8 5.7
Net rental income received (GBPm) 9.7 8.5
Basic EPS (p) 3.15 8.02
EPRA EPS (p) (2) 11.30 9.64
Interim dividend per share (p) 8.52 8.27
----------------------------------- ------------ ------------
Balance sheet 31 December 30 June
2011 2011
---------------------------- ------------ --------
Net assets (GBPm) 184.3 188.6
Basic NAV per share (p) 306 314
EPRA NAV per share (p) (3) 309 318
Net debt (GBPm) 61.6 67.7
Gearing (%) 33 36
---------------------------- ------------ --------
Property portfolio 31 December 30 June
2011 2011
---------------------------------------- ------------ --------
Occupancy rate (%) 93.5 92.7
Current passing rent (GBPm pa) 19.9 19.9
Portfolio value (GBPm) (4) 255.8 261.3
Initial yield on investment properties
(%) 7.8 7.5
Equivalent yield (%) 8.5 8.3
---------------------------------------- ------------ --------
The interim dividend of GBP5,127,280 will be paid on 29 June 2012 to holders registered on 1 June 2012.
(1) See the investment/development column in the underlying
financial performance tables in note 7 for details.
(2) Excludes the profit on disposal of investment and
trading properties and the revaluation of investment
and development properties and financial instruments.
See note 8.
(3) Excludes the fair value of financial instruments
and includes the surplus on trading properties. See
note 8.
(4) See note 9.
For further information please contact:
Rupert Mucklow, Chairman Tel: 0121 504 2121 Fiona Tooley Tel: 0121 362 4009
David Wooldridge, Finance Director Tel: 0121 504 2108 Citigate Dewe Rogerson
A & J Mucklow Group plc
Chairman's Statement
50(th) Anniversary
In April 2012, A & J Mucklow Group will be celebrating 50 years as a listed company. Its principal objective has always been to deliver steady, long-term income and capital growth for its shareholders.
The Group's financial performance has been exemplary since it was floated on the London Stock Exchange in 1962. The ordinary dividend has increased in 45 out of the last 50 years and never been cut.
An investment of GBP1,000 in Mucklow shares in 1962 would today be worth around GBP1.6m, assuming dividends were reinvested. The total shareholder return has averaged over 16% per annum for the last 50 years++.
Current overview
I am pleased to report good progress being made in the first six months of our financial year, with a 19% improvement in underlying pre-tax profit and a 3% increase in the interim dividend.
The occupancy level has risen to 93.5%, despite the current economic environment; however, property values have started to drift, reflecting a decline in investor appetite for risk and uncertainty in the debt markets.
Results for the six months to 31 December 2011
The underlying pre-tax profit , which excludes revaluation movements and profits from the sale of investment and trading properties, increased by GBP1.1m during the first six months to GBP6.8m (2010: GBP5.7m). Net rental income received from investment properties rose by GBP1.2m to GBP9.7m (2010: GBP8.5m).
Pre-tax profit for the half year was lower at GBP1.9m (2010: GBP4.8m). The reduction was mainly due to a GBP6.6m deficit on the revaluation of investment properties and development land at 31 December 2011 (2010: deficit GBP1.0m). A trading profit of GBP1.5m was realised in the first six months (2010: GBP0.0m).
EPRA net asset value per share* reduced marginally during the half year from 318p to 309p per share as a result of the decline in property values. Shareholders' funds were GBP184.3m at 31 December 2011 (30 June 2011: GBP188.6m), while borrowings net of cash amounted to GBP61.6m, representing 33% of shareholders' funds (30 June 2011: GBP67.7m and 36%).
Dividend
The directors have declared an interim dividend of 8.52p per Ordinary share, an increase of 3% over last year (31 December 2010: 8.27p), which will be paid as a PID on 29 June 2012 to shareholders on the register at the close of business on 1 June 2012.
Property review
After a very quiet summer, letting activity surprisingly picked up a little before Christmas and has continued into the New Year. As a consequence, we managed to reduce our void rate to 6.5% at 31 December 2011 (30 June 2011: 7.3%), our lowest level since 2007.
Most of our lettings were to existing tenants, looking to consolidate or expand into modern properties. A shortage of good quality industrial space in the Midlands continues to help us maintain rental levels and a high occupancy rate.
The regional investment market was relatively quiet during the first half year, with few properties becoming available or transactions being concluded. Towards the end of the period, there was an increase in the number of older, secondary properties being released by Banks and distressed sellers, at heavily discounted prices, which started to affect property values.
The yield gap between prime and non-prime assets is widening, as concerns grow over the risk of secondary properties becoming vacant and potentially difficult to re-let. The values of modern properties with short leases (less than 5 years) have also deteriorated over the last few months, due to a lack of available bank finance to fund short-term income.
Prime properties with long leases (20 years +) are hotly contested by institutional investors, but very little stock is available. A modern building, in a prime location, could be valued on a yield of between 5% and 15% in the current market, depending on the lease terms.
DTZ Debenham Tie Leung reviewed the value of our investment properties at 31 December 2011. The investment portfolio, including development land was valued at GBP255.8m, which showed a revaluation deficit for the period of GBP6.7m (2.5%).
The initial yield on our investment properties was 7.8% (30 June 2011: 7.5%), increasing to 8.1% on the expiry of rent free periods, while the equivalent yield was 8.5% (30 June 2011: 8.3%).
We did not acquire any investment properties during the period. However, since the half year end, we have bought a 15,800 sq ft office building in Coventry, with 81 car parking spaces, for GBP1.5m. The property is adjacent to an existing holding and was built in 2000 to a high specification and is currently let at a rent of GBP237,500 pa, on a lease expiring in 2015. The initial yield was 14.7%.
A joint outline planning application with Helical Retail has been submitted for a mixed use development including our 20 acre site at Tyseley, in Birmingham. The combined area of the land is 33 acres and the proposal is to regenerate the area with much needed highway improvements; a supermarket; non food retail; housing and industrial units, which would create over 1,000 jobs.
DTZ Debenham Tie Leung also reviewed the value of our trading properties at 31 December 2011. The total value was GBP1.9m, which showed an unrecognised surplus of GBP1.4m over book value. We sold a farm at Penn, near Wolverhampton, in September 2011 for GBP1.7m, realising a trading profit of GBP1.5m. The property comprised a farm house, barn and approximately 270 acres of land.
Our total net borrowings reduced at our half year end, from GBP67.7m at the beginning of the period, to GBP61.6m at 31 December 2011. Undrawn banking facilities totalled GBP21.5m and net debt to equity gearing was 33% (30 June 2011: 36%).
Principal risks and uncertainties
There have been no changes to the principal risks and uncertainties of the Group, which remain as disclosed on page 20 of the Annual Report for the year ended 30 June 2011.
Outlook
We are entering our second half century as a listed company in very good shape. We are not anticipating any significant change in occupancy levels during the next six months and remain on target for another satisfactory year to 30 June 2012.
Property values may fluctuate a little during these uncertain times, but current market conditions provide us with opportunities to acquire modern investment properties on attractive yields and allow us to continue to maximise income and value from our other assets.
Rupert J Mucklow
Chairman
21 February 2012
++ Source: Daily Official List and Datastream.
See the investment/development column in the underlying financial performance tables in note 7 for details.
* EPRA (European Public Real Estate Association) net asset value, including the surplus on trading properties and excluding the mark to market of debt and the fair value of financial instruments. See note 8 for details.
Group Condensed Statement of Comprehensive Income
for the six months to 31 December 2011
Unaudited Unaudited Audited
six months six months year
to to to
31 December 31 December 30 June
2011 2010 2011
Notes GBP000 GBP000 GBP000
-------------------------------------- ------ ------------ ------------ --------
Revenue 2 11,827 8,757 18,349
-------------------------------------- ------ ------------ ------------ --------
Gross rental income relating
to investment properties 10,127 8,752 18,344
Property outgoings (460) (263) (645)
-------------------------------------- ------ ------------ ------------ --------
Net rental income relating
to investment properties 9,667 8,489 17,699
-------------------------------------- ------ ------------ ------------ --------
Proceeds on sale of trading
properties 1,700 5 5
Carrying value of trading properties (165) - -
sold
Property outgoings relating
to trading properties (5) (2) (2)
-------------------------------------- ------ ------------ ------------ --------
Net income from trading properties 1,530 3 3
-------------------------------------- ------ ------------ ------------ --------
Administration expenses (1,418) (1,459) (2,884)
-------------------------------------- ------ ------------ ------------ --------
Operating profit before net
(losses)/gains on investments 9,779 7,033 14,818
Profit on disposal of investment
properties 238 15 1,348
Revaluation of investment and
development properties (6,558) (955) (369)
-------------------------------------- ------ ------------ ------------ --------
Operating profit 3 3,459 6,093 15,797
Net finance costs 4 (1,562) (1,281) (2,905)
-------------------------------------- ------ ------------ ------------ --------
Profit before tax 3 1,897 4,812 12,892
-------------------------------------- ------ ------------ ------------ --------
Tax (charge)/credit 5 (3) - 576
-------------------------------------- ------ ------------ ------------ --------
Profit for the financial period 1,894 4,812 13,468
-------------------------------------- ------ ------------ ------------ --------
Other comprehensive income:
Revaluation of owner occupied
property (128) (14) (11)
-------------------------------------- ------ ------------ ------------ --------
Total comprehensive income
for the period 1,766 4,798 13,457
-------------------------------------- ------ ------------ ------------ --------
All operations are continuing.
Basic and diluted earnings per
share 8 3.15p 8.02p 22.43p
-------------------------------- ------ ------ -------
Group Condensed Statement of Changes in Equity
for the six months ended 31 December 2011
Ordinary Capital Share-based
share redemption Revaluation payment Retained Total
capital reserve reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- --------- ----------- ------------ ------------ --------- ---------
Balance at 1 July
2011 15,021 11,162 262 261 161,912 188,618
--------------------- --------- ----------- ------------ ------------ --------- ---------
Profit for the
period - - - - 1,894 1,894
Other comprehensive
income - - (128) - - (128)
--------------------- --------- ----------- ------------ ------------ --------- ---------
Total comprehensive
income - - (128) - 1,894 1,766
--------------------- --------- ----------- ------------ ------------ --------- ---------
Share-based payment - - - 86 - 86
Ordinary share
issue 23 - - - - 23
Exercise of share
options - - - (154) 154 -
Dividends paid - - - - (6,162) (6,162)
--------------------- --------- ----------- ------------ ------------ --------- ---------
Balance 31 December
2011 (unaudited) 15,044 11,162 134 193 157,798 184,331
--------------------- --------- ----------- ------------ ------------ --------- ---------
Balance 1 July
2010 14,998 11,162 273 239 159,236 185,908
--------------------- --------- ----------- ------------ ------------ --------- ---------
Profit for the
period - - - - 4,812 4,812
Other comprehensive
income - - (14) - - (14)
--------------------- --------- ----------- ------------ ------------ --------- ---------
Total comprehensive
income - - (14) - 4,812 4,798
--------------------- --------- ----------- ------------ ------------ --------- ---------
Share-based payment - - - 82 - 82
Ordinary share
issue 23 - - - - 23
Exercise of share
options - - - (140) 140 -
Dividends paid - - - - (5,963) (5,963)
--------------------- --------- ----------- ------------ ------------ --------- ---------
Balance 31 December
2010 (unaudited) 15,021 11,162 259 181 158,225 184,848
--------------------- --------- ----------- ------------ ------------ --------- ---------
Balance 1 July
2010 14,998 11,162 273 239 159,236 185,908
--------------------- --------- ----------- ------------ ------------ --------- ---------
Profit for the
period - - - - 13,468 13,468
Other comprehensive
income - - (11) - - (11)
--------------------- --------- ----------- ------------ ------------ --------- ---------
Total comprehensive
income - - (11) - 13,468 13,457
--------------------- --------- ----------- ------------ ------------ --------- ---------
Share-based payment - - - 162 - 162
Ordinary share
issue 23 - - - - 23
Exercise of share
options - - - (140) 140 -
Dividends paid - - - - (10,932) (10,932)
--------------------- --------- ----------- ------------ ------------ --------- ---------
Balance 30 June
2011
(audited) 15,021 11,162 262 261 161,912 188,618
--------------------- --------- ----------- ------------ ------------ --------- ---------
Group Condensed Balance Sheet
at 31 December 2011
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
Notes GBP000 GBP000 GBP000
---------------------------------- ------ ------------ ------------ ---------
Non-current assets
Investment and development
properties 9 254,814 247,763 260,200
Property, plant and equipment 1,240 1,421 1,404
Derivative financial instruments 56 324 164
Trade and other receivables 373 559 508
---------------------------------- ------ ------------ ------------ ---------
256,483 250,067 262,276
Current assets
Trading properties 447 553 559
Trade and other receivables 2,195 3,546 3,066
Cash and cash equivalents 6,571 6,774 1,453
---------------------------------- ------ ------------ ------------ ---------
9,213 10,873 5,078
Total assets 265,696 260,940 267,354
---------------------------------- ------ ------------ ------------ ---------
Current liabilities
Trade and other payables (12,909) (12,496) (8,693)
Tax liabilities (294) - (914)
---------------------------------- ------ ------------ ------------ ---------
(13,203) (12,496) (9,607)
---------------------------------- ------ ------------ ------------ ---------
Non-current liabilities
Borrowings (68,162) (63,596) (69,129)
---------------------------------- ------ ------------ ------------ ---------
Total liabilities (81,365) (76,092) (78,736)
---------------------------------- ------ ------------ ------------ ---------
Net assets 184,331 184,848 188,618
---------------------------------- ------ ------------ ------------ ---------
Equity
Called up ordinary share
capital 15,044 15,021 15,021
Revaluation reserve 134 259 262
Share-based payment reserve 193 181 261
Redemption reserve 11,162 11,162 11,162
Retained earnings 157,798 158,225 161,912
---------------------------------- ------ ------------ ------------ ---------
Total equity 184,331 184,848 188,618
---------------------------------- ------ ------------ ------------ ---------
Net asset value per share
- Basic and diluted 8 306p 308p 314p
- EPRA 8 309p 312p 318p
---------------------------------- ------ ------------ ------------ ---------
Group Condensed Cash Flow Statement
for the six months to 31 December 2011
Unaudited Unaudited Audited
six months six months year
to to to
31 December 31 December 30
June
2011 2010 2011
GBP000 GBP000 GBP000
----------------------------------------------- ------------ ------------ ---------
Cash flows from operating activities
Operating profit 3,459 6,093 15,797
Adjustments for non-cash items
Unrealised net revaluation losses
on investment and development
- properties 6,558 955 369
Profit on disposal of investment
- properties (238) (15) (1,348)
- Depreciation 44 50 97
- Share-based payment 86 82 162
- Profit on sale of fixed assets - (3) (7)
- Other non-cash items (1,165) (1,278) (1,403)
Other movements arising from operations
Decrease/(increase) in trading
- properties 112 - (11)
- Decrease in receivables 970 1,439 699
- (Decrease)/increase in payables (2,606) (1,000) 1,812
---- ----------------------------------------- ------------ ------------ ---------
Net cash inflow from operations 7,220 6,323 16,167
Interest received 40 - 218
Interest paid (1,398) (1,189) (2,635)
Preference dividends paid (24) (24) (47)
Corporation tax refunded 34 - 838
----------------------------------------------- ------------ ------------ ---------
Net cash inflow from operating activities 5,872 5,110 14,541
Cash flows from investing activities
Acquisition and property development (7) (14,084) (26,210)
Sales of investment properties 238 1,865 4,838
Expenditure on property, plant and
equipment (8) (25) (49)
----------------------------------------------- ------------ ------------ ---------
Net cash inflow/(outflow) from investing
activities 223 (12,244) (21,421)
Cash flows from financing activities
Net (decrease)/increase in borrowings (1,000) 13,000 18,500
Equity share issue 23 23 23
Payment for derivative financial
instrument - - (143)
Equity dividends paid - - (10,932)
----------------------------------------------- ------------ ------------ ---------
Net cash (outflow)/inflow from financing
activities (977) 13,023 7,448
Net increase in cash and cash equivalents 5,118 5,889 568
----------------------------------------------- ------------ ------------ ---------
Cash and cash equivalents at beginning
of period 1,453 885 885
----------------------------------------------- ------------ ------------ ---------
Cash and cash equivalents at end
of period 6,571 6,774 1,453
----------------------------------------------- ------------ ------------ ---------
Notes to the Half-Yearly Report
1 Accounting policies
Basis of preparation of half-yearly financial information
The annual financial statements of A & J Mucklow Group plc are prepared in accordance with IFRS's as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting", as adopted by the European Union and the disclosure requirements of the Listing Rules.
The Group's condensed set of financial statements for the period ended 31 December 2011 were authorised for issue by the Board of directors on 21 February 2012. The half-yearly financial information is unaudited but has been reviewed by Deloitte LLP and their report appears on page 17 of this half-yearly report.
The information for the year ended 30 June 2011 does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The condensed set of financial statements are prepared under the historical cost convention, except for the revaluation of investment and development properties and owner-occupied properties and deferred tax thereon and certain financial assets, with consistent accounting policies to the prior year.
As at 31 December 2011 the Group had GBP21.5m of undrawn banking facilities, comprising the GBP5.0m overdraft and GBP16.5m of the GBP40.0m 2014 Revolving Credit Facility, and had fully drawn down GBP20.0m from its HSBC 2014 Term Loan. The Group's GBP5.0m overdraft is the only banking facility due for renewal within 12 months of the date of this document. The GBP20.0m 2023 Lloyds Bank Term Loan remains fully drawn. Given these facilities, the Group's low gearing level of 33% and GBP110.2m of unencumbered properties, significant capacity exists to raise additional finance or to provide additional security for existing facilities, should property values fall. Accordingly, the directors continue to adopt the going concern basis in preparing the condensed set of financial statements.
The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements, except that in accordance with IAS 1 "Presentation of Financial Statements" the Group has elected to present a single statement of comprehensive income.
2 Revenue
Unaudited Unaudited Audited
six months six months year
to to to
31 December 31 December 30
June
2011 2010 2011
GBP000 GBP000 GBP000
----------------------------------------- ------------ ------------ --------
Total rental income from investment
and development properties 10,127 8,752 18,344
Income received from trading properties 1,700 5 5
----------------------------------------- ------------ ------------ --------
11,827 8,757 18,349
Finance income (note 4) 40 8 233
----------------------------------------- ------------ ------------ --------
Total revenue 11,867 8,765 18,582
----------------------------------------- ------------ ------------ --------
3 Segmental analysis
The Group has two reportable segments: investment and development properties and trading property.
Unaudited Unaudited Audited
six months six months year
to to to
31 December 31 December 30
June
2011 2010 2011
GBP000 GBP000 GBP000
------------------------------------------- ------------ ------------ --------
Investment and development properties
- Net rental income 9,667 8,489 17,699
- Profit on disposal 238 15 1,348
Deficit on revaluation of investment
- and development properties (6,558) (955) (369)
3,347 7,549 18,678
------------------------------------------- ------------ ------------ --------
Trading properties
Income received from trading
- properties 1,700 5 5
- Carrying value on sale (165) - -
- Property outgoings (5) (2) (2)
--- -------------------------------------- ------------ ------------ --------
1,530 3 3
------------------------------------------- ------------ ------------ --------
Net income from property portfolio
before administration expenses 4,877 7,552 18,681
Administration expenses (1,418) (1,459) (2,884)
------------------------------------------- ------------ ------------ --------
Operating profit 3,459 6,093 15,797
Net financing costs (1,562) (1,281) (2,905)
------------------------------------------- ------------ ------------ --------
Profit before tax 1,897 4,812 12,892
------------------------------------------- ------------ ------------ --------
The property revaluation deficit has been recognised as follows:
Unaudited Unaudited Audited
six months six months year
to to to
31 December 31 December 30
June
2011 2010 2011
GBP000 GBP000 GBP000
-------------------------------------- ------------ ------------ --------
Statement of comprehensive income
- Investment properties (6,558) (954) (369)
- Development properties - (1) -
---- -------------------------------- ------------ ------------ --------
(6,558) (955) (369)
Other comprehensive income
- Owner-occupied properties (128) (14) (11)
Total revaluation deficit for the
period (6,686) (969) (380)
-------------------------------------- ------------ ------------ --------
3 Segmental analysis (continued)
Segmental information on assets and liabilities, including a reconciliation to the results reported in the group condensed balance sheet, are as follows:
Unaudited Unaudited Audited
six months six months year
to to to
31 December 31 December 30
June
2011 2010 2011
GBP000 GBP000 GBP000
------------------------------------------ ------------ ------------ ---------
Balance sheet - segment assets
Investment and development properties
- Segment assets 256,597 251,082 262,941
- Segment liabilities (4,471) (4,453) (5,655)
- Net borrowings (61,591) (56,822) (67,676)
---- ------------------------------------ ------------ ------------ ---------
190,535 189,807 189,610
------------------------------------------ ------------ ------------ ---------
Trading properties
- Segment assets 447 553 559
- Segment liabilities - - -
---- ------------------------------------ ------------ ------------ ---------
447 553 559
------------------------------------------ ------------ ------------ ---------
Other activities
- Unallocated assets 2,081 2,531 2,401
- Unallocated liabilities (8,732) (8,043) (3,952)
---- ------------------------------------ ------------ ------------ ---------
(6,651) (5,512) (1,551)
------------------------------------------ ------------ ------------ ---------
Net assets 184,331 184,848 188,618
------------------------------------------ ------------ ------------ ---------
Capital expenditure
Investment and development properties 7 13,432 27,007
Other activities 8 51 84
------------------------------------------ ------------ ------------ ---------
15 13,483 27,091
------------------------------------------ ------------ ------------ ---------
Depreciation
Other activities 44 50 97
------------------------------------------ ------------ ------------ ---------
44 50 97
------------------------------------------ ------------ ------------ ---------
All operations and income are derived from the United Kingdom and therefore no geographical segmental information is provided.
4 Net finance costs
Unaudited Unaudited Audited
six months six months year
to to to
31 December 31 December 30
June
2011 2010 2011
GBP000 GBP000 GBP000
---------------------------------- ------------ ------------ --------
Finance cost on:
Debenture stock 242 242 483
Preference share dividend 24 24 47
Capitalised interest - (55) (55)
Fair value movement of financial
instrument 108 35 338
Bank overdraft and loan interest
payable 1,228 1,043 2,325
---------------------------------- ------------ ------------ --------
Total finance costs 1,602 1,289 3,138
---------------------------------- ------------ ------------ --------
Finance income on:
Short-term deposits - 1 16
Other interest receivable 40 7 217
---------------------------------- ------------ ------------ --------
Total finance income 40 8 233
---------------------------------- ------------ ------------ --------
Net finance costs 1,562 1,281 2,905
---------------------------------- ------------ ------------ --------
5 Taxation
Unaudited Unaudited Audited
six months six months year
to to to
31 December 31 December 30
June
2011 2010 2011
GBP000 GBP000 GBP000
----------------------------------------- ------------ ------------ --------
Tax charge/(credit)
Current tax
- Corporation tax 143 - -
- Prior year adjustment (140) - (576)
----- ---------------------------------- ------------ ------------ --------
Total tax charge/(credit) recognised
in the statement of comprehensive
income 3 - (576)
----------------------------------------- ------------ ------------ --------
There is no deferred tax charge or credit for any of the periods stated.
The Company elected to become a Real Estate Investment Trust (REIT) with effect from 1 July 2007. As a result of this, rental income and capital gains of the REIT business are not subject to tax. The tax charge for the six months ended 31 December 2011 shown above represents the tax payable on the non-REIT business, mainly profits on the disposal of trading properties and interest receivable.
6 Dividends
Unaudited Unaudited Audited
six months six months year
to to to
31 December 31 December 30
June
2011 2010 2011
GBP000 GBP000 GBP000
--------------------------------------- ------------ ------------ --------
Amounts recognised as distributions
to equity holders in the period:
Final dividend for the year ended
30 June 2011 of 10.24p (2010: 9.94p)
per share 6,162 5,963 5,963
Interim dividend for the year ended
30 June 2011 of 8.27p per share - - 4,969
--------------------------------------- ------------ ------------ --------
6,162 5,963 10,932
--------------------------------------- ------------ ------------ --------
The directors propose an interim dividend of 8.52p (2010: 8.27p) per Ordinary share. This dividend has not been included as a liability in these financial statements.
The interim dividend will be paid on 29 June 2012 to shareholders on the register at the close of business on 1 June 2012.
7 Underlying financial performance
Presented below is a non-statutory analysis of the underlying rental performance before tax, as shown in the investment/development column, which excludes the profit on sale of investment and trading properties and other items (capitalised interest, property revaluation movements and the fair value movement on derivative financial instruments). The directors consider that this further analysis of our statement of comprehensive income gives shareholders a useful comparison of our underlying performance for the periods shown in the condensed set of financial statements.
Unaudited Unaudited Unaudited
Unaudited Investment/ Trading Other
Total development properties Items
Six months to 31 December GBP000 GBP000 GBP000 GBP000
2011
------------------------------------ ----------- ------------- ----------- ----------
Rental income 10,127 10,127 - -
Property outgoings (460) (460) - -
------------------------------------ ----------- ------------- ----------- ----------
Net rental income 9,667 9,667 - -
------------------------------------ ----------- ------------- ----------- ----------
Proceeds on sale of trading
properties 1,700 - 1,700 -
Carrying value of trading
properties sold (165) - (165) -
Property outgoings on trading
properties (5) - (5) -
------------------------------------ ----------- ------------- ----------- ----------
Net income from trading properties 1,530 - 1,530 -
------------------------------------ ----------- ------------- ----------- ----------
Administration expenses (1,418) (1,418) - -
------------------------------------ ----------- ------------- ----------- ----------
Operating profit before net
losses on investment 9,779 8,249 1,530 -
Net losses on revaluation (6,558) - - (6,558)
Profit on disposal of investment
properties 238 - - 238
Operating profit 3,459 8,249 1,530 (6,320)
Finance income 40 40 - -
------------------------------------ ----------- ------------- ----------- ----------
Gross finance costs (1,494) (1,494) - -
Fair value movement on derivative
financial instruments (108) - - (108)
------------------------------------ ----------- ------------- ----------- ----------
Total finance costs (1,602) (1,494) - (108)
------------------------------------ ----------- ------------- ----------- ----------
Profit before tax 1,897 6,795 1,530 (6,428)
------------------------------------ ----------- ------------- ----------- ----------
7 Underlying financial performance (continued)
Unaudited Unaudited Unaudited
Unaudited Investment/ Trading Other
Total development properties Items
Six months to 31 December GBP000 GBP000 GBP000 GBP000
2010
------------------------------------ ----------- ------------- ----------- ----------
Rental income 8,752 8,752 - -
Property outgoings (263) (263) - -
------------------------------------ ----------- ------------- ----------- ----------
Net rental income 8,489 8,489 - -
------------------------------------ ----------- ------------- ----------- ----------
Proceeds on sale of trading
properties 5 - 5 -
Property outgoings on trading
properties (2) - (2) -
------------------------------------ ----------- ------------- ----------- ----------
Net income from trading properties 3 - 3 -
------------------------------------ ----------- ------------- ----------- ----------
Administration expenses (1,459) (1,459) - -
------------------------------------ ----------- ------------- ----------- ----------
Operating profit before net
losses on investment 7,033 7,030 3 -
Net losses on revaluation (955) - - (955)
Profit on disposal of investment
properties 15 - - 15
------------------------------------ ----------- ------------- ----------- ----------
Operating profit 6,093 7,030 3 (940)
Finance income 8 8 - -
------------------------------------ ----------- ------------- ----------- ----------
Gross finance costs (1,309) (1,309) - -
Capitalised interest 55 - - 55
Fair value movement on derivative
financial instruments (35) - - (35)
------------------------------------ ----------- ------------- ----------- ----------
Total finance costs (1,289) (1,309) - 20
------------------------------------ ----------- ------------- ----------- ----------
Profit before tax 4,812 5,729 3 (920)
------------------------------------ ----------- ------------- ----------- ----------
8 Earnings per share and net asset value per share
Earnings per share
The basic and diluted earnings per share of 3.15p (31 December 2010: 8.02p) has been calculated on the basis of the weighted average of 60,102,542 (31 December 2010: 59,995,572) Ordinary shares and a profit of GBP1.89m (31 December 2010: GBP4.81m).
The European Public Real Estate Association (EPRA) has issued recommended bases for the calculation of earnings per share and net asset value per share information and these are included in the tables below.
EPRA earnings per share has been amended from the basic and diluted earnings per share by the following:
Unaudited Unaudited Audited
six months six months year
to to to
31 December 31 December 30 June
2011 2010 2011
GBP000 GBP000 GBP000
----------------------------------------- ------------ ------------ --------
Earnings 1,894 4,812 13,468
Profit on disposal of investment
and development properties (238) (15) (1,348)
Net losses on revaluation of investment
and development properties 6,558 955 369
Profit on sale of trading properties (1,530) (3) (3)
Fair value movement on derivative
financial instruments 108 35 338
----------------------------------------- ------------ ------------ --------
EPRA earnings 6,792 5,784 12,824
----------------------------------------- ------------ ------------ --------
EPRA earnings per share 11.30p 9.64p 21.36p
----------------------------------------- ------------ ------------ --------
8 Earnings per share and net asset value per share (continued)
The Group presents an EPRA earnings per share figure as the directors consider that this is a better indicator of the performance of the Group.
There are no dilutive shares. Options over 137,432 Ordinary shares were granted in the period (2010: 136,172 Ordinary shares) under the 2007 Performance Share Plan. The vesting conditions for these shares have not been met, so they have not been treated as dilutive in these calculations. The second three-year award under the 2007 Performance Share Plan vested in the period, with 93,696 Ordinary shares being issued and 11,715 shares lapsed (2010: 93,656 issued and 26,772 lapsed).
Net asset value per share
The net asset value per share of 306p (31 December 2010: 308p) has been calculated on the basis of the number of equity shares in issue of 60,179,342 (31 December 2010: 60,085,646) and net assets of GBP184.33m (31 December 2010: GBP184.85m). The number of equity shares in issue has increased during the period by 93,696 due to the exercise of share options under the 2007 Performance Share Plan.
The EPRA net asset value per share has been calculated as follows:
Unaudited Unaudited Audited
six months six months year
to to to
31 December 31 December 30 June
2011 2010 2011
GBP000 GBP000 GBP000
------------------------------------ ------------ ------------ --------
Total equity 184,331 184,848 188,618
Valuation of land held as trading
properties 1,871 3,583 3,336
Book value of land held as trading
properties (447) (553) (559)
Fair value of derivative financial
instruments (56) (324) (164)
------------------------------------ ------------ ------------ --------
EPRA net asset value 185,699 187,554 191,231
------------------------------------ ------------ ------------ --------
EPRA net asset value per share 309p 312p 318p
9 Properties
Unaudited
GBP000
------------------------------------------------ ----------
DTZ valuation as at 31 December 2011 255,815
Owner-occupied property included in property,
plant and equipment (953)
Other adjustments (48)
------------------------------------------------ ----------
Investment and development properties as at 31
December 2011 254,814
------------------------------------------------ ----------
The properties are stated at market value as at 31 December 2011 and are valued by DTZ Debenham Tie Leung, professionally qualified external valuers, in accordance with the RICS Appraisal and Valuation Standards published by the Royal Institution of Chartered Surveyors.
10 Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
11 Post-Balance Sheet Events
On 6 February 2012 the Group acquired an investment property for GBP1.5m.
Responsibility Statement
We confirm that to the best of our knowledge:
a) the condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting";
b) the half-yearly report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
c) the half-yearly report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transaction and changes therein).
Signed on behalf of the Board who approved the half-yearly report on 21 February 2012.
Rupert J Mucklow
Chairman
David Wooldridge
Finance Director
Independent Review Report to A & J Mucklow Group plc
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2011 which comprises the Group condensed statement of comprehensive income, the Group condensed statement of changes in equity, the Group condensed balance sheet, the Group condensed cash flow statement and related notes 1 to 11. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410,
"Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2011 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
Birmingham, United Kingdom
21 February 2012
This information is provided by RNS
The company news service from the London Stock Exchange
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