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PNS Panther Securities Plc

300.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Panther Securities Plc LSE:PNS London Ordinary Share GB0005132070 ORD 25P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 300.00 280.00 320.00 300.00 300.00 300.00 0.00 08:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Lessors Of Real Property,nec 13.41M 16.99M 0.9721 3.09 52.42M

Panther Securities PLC Half-year Results (0024L)

28/09/2016 7:00am

UK Regulatory


Panther Securities (LSE:PNS)
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TIDMPNS

RNS Number : 0024L

Panther Securities PLC

28 September 2016

PANTHER SECURITIES PLC

Panther Securities PLC has today announced its interim results for the six months ended 30 June 2016.

For further information contact:

 
                                      Tel: 01707 
 Panther Securities plc                667300 
 Andrew Perloff/ Simon Peters 
 
 Allenby Capital Limited (Nomad       Tel: 020 
  and Joint Broker)                    3328 5656 
 David Worlidge 
 
 Capital Access Group (Financial      Tel: 020 
  PR)                                  3763 3400 
 Simon Courtenay / Jessica Bradford 
 

CHAIRMAN'S STATEMENT

I am pleased to report our results for the six months ending 30 June 2016, which although it shows a loss of GBP4,880,000 (after a tax credit of GBP1,747,000), obscures the progress of the company. This is due to the inclusion of nearly an GBP8 million increase in our swap liability compared to a GBP2.75 million reduction last year. The volatility in the valuations of financial derivatives is notorious for its sudden changes, which can be due to practically any world event or political pronouncements. It is, however, a non-cash item.

Our rents receivable during the current period amount to GBP6,333,000 compared to GBP6,463,000 for the same period last year (i.e. 30 June 2015). This decrease was due to the reduction in income after the sale of the Wembley and Sutton properties. There was also some loss of rental from two Beales stores due to their CVA and also, loss of income from tenants vacating The Quadrangle, Glasgow where we have plans to obtain permitted development rights for a residential scheme for this property.

I am, however, hopeful that the full year's figures will redress this hiccup in an ever rising rent roll which is, of course, the bread and butter of our business. This loss of income will be substantially rebalanced by our acquisition of Lord Street Properties (Southport) Limited, where we only benefited from one quarter's rent in these figures.

DISPOSALS

Old Inn House, Sutton

In January, we completed the sale of the entire upper part of Old Inn House for GBP3,900,000, which comprised of 18,000 sq ft of offices. We sold the entire freehold building but retained the ground floor and part basement on a 999 year lease at a peppercorn as this part of the property produces GBP129,000 pa and with further growth potential, it being in a prime position in Sutton High Street. A substantial part of the increase in value was reflected in the last year's revaluation, but it still produced a profit of GBP350,000 over the revalued figure.

Queens Road, Southend

This was sold for GBP1,050,000, which was a good price for this freehold long-term vacant and non-income producing property.

Sparkbrook, Birmingham

In April, we sold a cleared site in Sparkbrook for GBP500,000, which was non-income producing and was equal to its December 2015 revalued figures, although much higher than its original cost some years ago.

Coatbridge, Scotland

This freehold property is unconnected to our main larger holding in Coatbridge and came with our purchase of Eurocity Properties many years ago. Although this property was vacant, it was under offer for letting but unfortunately was seriously damaged by fire in August 2015, which resulted in us receiving insurance claim proceeds of GBP476,000 which approximated to its book value. Of course, we still own the site's freehold, which has some value that we hope to be able to realise.

LORD STREET PROPERTIES (SOUTHPORT) LTD

I announced in last year's accounts the acquisition of this company under Post Balance Sheet Events in reasonable detail and so, I will only repeat the basic details.

This family company was established over 100 years ago to own and operate Broadbents Department Store. Subsequently, it acquired Wayfarers Arcade, the best arcade in Southport and possibly in northern England.

The total freehold site is about two acres comprising 75,000 sq ft of retail space with two car parks at the rear of the site. The major part is now occupied by Beales (about 40,000 sq ft) who acquired the trading business some years ago and currently, is one of their profitable stores. The Arcade contains 48 units of which only 11 are still vacant.

The property produces approximately GBP580,000 pa with potential for increases, when fully let.

The cost of this Company, which had no debt, was GBP4,538,000 including acquisition costs. This was purchased out of our existing cash resources but was subsequently charged under our loan facilities.

DEVELOPMENT PROGRESS

Holloway Head, Birmingham

Having received full and detailed planning permission for this site to include the Girl Guides building, we are still awaiting a proposal for lease extension on two sections of the site where the freeholder is Birmingham City Council and we hold 100 year leases at fixed ground rents, one subject to slight ground rent reviews. We had a meeting with them and their agents about six months ago and expect the council to be able to provide a proposal soon!!

Perhaps Birmingham is the only conurbation in England that does not have a housing shortage.

However, we have had a number of approaches to purchase the entire development site. If a sale took place, due to the strong interest, it could be at a significant increase over book value.

Bruce Grove, Wickford

The planning details have been amended which could enable the scheme to start prior to acquisition of the adjoining owner's site and them being re-housed. This should enable us to sell the site sooner rather than later.

Swindon

A planning application to redevelop our market building into a modern restaurant and leisure scheme was submitted and recommended for approval by the Planning Officers, who agreed it complied with all the town planning requirements. It was, however, turned down by the committee!! We have appealed against this decision and as a separate matter are currently producing a bigger and possibly more profitable scheme to include a multi-storey block of residential units above the former market building to be submitted for planning.

TENANT ACTIVITY DURING THE HALF YEAR PERIODING 30(th) JUNE 2016

During this period we gained 69 new tenants (30 residential and 39 commercial) producing GBP1,068,000. We lost 70 tenants (29 residential and 41 commercial) producing GBP917,000. The net effect results in an extra GBP151,000 in rent receivable.

BUSINESS RATES

The new commercial property rating values for April 2015 will be announced shortly and I am cynically expecting that they will be deliberately higher than a fair market assessment would produce. However, if one's rateable value is considered too high, one can of course appeal against its valuation, but this is a difficult process and requires the help of experts.

Previously, rate changes were phased in over a few years, for both those that have increases and also those that have reductions. It will be remarkably unfair if they once again utilise this system, as those that should have reductions have already paid over the odds for two years because of the delayed revaluation by government dictat.

A sensible proposal would also be to reduce vacant rate charges to 25% and all properties awaiting planning permission have nil rates payable if vacant and awaiting development, which may encourage Local Authorities to move a little faster than the snail's pace at which they currently proceed.

We have, today, been advised by one of the leading business rate consultants that, in their opinion, "firms are set to overpay millions of pounds under the latest government proposals".

"Proposed government changes will virtually outlaw most appeals in England, leaving most businesses with no means of challenging their assessments".

"If passed, regulations will grant power to dismiss appeals, which fall within the bounds of reasonable professional judgement of the Valuation Officer. There is no definition of what reasonable professional judgement is".

If approved, this legislation will be one of the most disgraceful abuses of the system from this new government team, and tantamount to deceit.

POLITICAL DONATIONS

At our AGM on 15 June, the resolution to donate GBP25,000 to the UK Independence Party was passed without as much dissent as usual.

I like to think that our last minute donation helped to get the message across, producing one of the most dramatic results our voting system has seen in many years. Whilst our government's unpreparedness is not unusual, in due course I believe, we will see long term change to the benefit of the UK.

DIVIDS

An interim dividend of 3p per share will be paid on 29 November 2016 (ex-dividend on 10 November 2016) and we expect to be able to recommend to pay a further final dividend of 9p per share next year after our Annual General Meeting.

FINANCE RENEWAL

On 19 April 2016, we completed the renewal of our GBP75 million joint facility with HSBC and Santander for a further 5 year term. This loan also gives us the option of drawing a further GBP10 million with bank approval. In total, we potentially have an additional GBP15 million extra purchasing capacity plus our cash balances. The loan is better in most aspects than before including keener margins, lower arrangement and non-utilisation fees.

PROSPECTS

I have long expressed the view that our wide spread of properties, by location, use, size and range of covenants with a rent roll that easily covers our interest payments, even at the high rates fixed by our swaps, management costs and dividends, justifies my usual optimism.

In the meantime, as an entrepreneurial company, we hope to take advantage of any of the uncertainties in the market place that may occur.

However in the future, I look forward to the better times that will flow from being a more independent country, with significant less red tape and an export-led revival in manufacturing that will lead to greater requirement for space.

Andrew S Perloff

Chairman 27 September 2016

CHAIRMAN'S RAMBLINGS

EXTRA! EXTRA!

READ ALL ABOUT IT!

Billionaire leaves thousands of employees in the lurch!

"After over 3 years at the boatyard, the magnificent GBP100 million super yacht has finally been delivered to Knight of the Realm and ex-owner of a huge store group. He then set off to enjoy a lengthy and hedonistic holiday around the Mediterranean with GBP450 million leaving 11,000 widows and orphans jobless and 20,000 pensioners impoverished."

This was the implicit story in practically all of our national newspapers, every single one gave a similar but ludicrously biased and deliberately inaccurate story about the recent demise of the much loved retail institution - the British Home Stores.

The furore that the press created gave the opportunity for our parliamentarians to see that there was some political capital to be made from this retail and human financial disaster. With uncharacteristic speed, a select committee was quickly assembled to investigate the matter.

When its findings were eventually published, it was soon apparent that it was not easily understandable - indeed I had to read it several times. I did, however, persevere and after other research, I now offer my take on the matter.

British Home Stores was founded in 1928, by a group of American investors to trade in the United Kingdom after they saw the success of Mr Woolworth and his sixpenny stores but their view was they should bring a higher quality selection of goods to the British public.

For the next 72 years it was a success, becoming a familiar and trusted presence in high streets throughout the country, owning or occupying large, prestigious buildings in the finest positions in all major towns.

British Home Stores quickly became part of the fabric of retail life, not only for its army of loyal customers, but also for the many thousands of employees who enjoyed secure, fairly paid long-term jobs with pensions attached, which created a loyal, long-term family of staff.

The world, however, changes and sometime towards the middle of the 1990s, during a time of take-over frenzy, the British Home Stores became absorbed into a conglomerate, which was then at the apex of its expansion. In due course, however, this group would suffer heavy losses and unfortunately the British Home Stores was a major part of the cause.

The British Home Stores had substantial assets and thus, Storehouse Plc was able to obtain GBP200 million from its purchaser, Philip Green & Associates in May 2000. In that year, the British Home Stores lost over GBP40 million but under its new ownership, for the subsequent eight full years, it made profits ranging from GBP18 million to GBP70 million per year. Most people who understand business would consider this a remarkable achievement, especially in light of the fact that its turnover remained flat.

Obviously something drastic must have happened after then - but what?

From 2009 onwards, the British Home Stores started making substantial losses and it eventually became clear to Philip Green Enterprises that this company was dragging down the rest of its otherwise successful group.

In March 2015, after six years of heavy losses, it was sold for GBP1 to Retail Acquisitions Ltd, whose owner's CV was more Arthur Daly in Minder than Gordon Gekko in Wall Street.

It is not unusual for a successful group to sell a loss making subsidiary for nil consideration or even hand over a substantial dowry to a suitor; the suitor normally has more money, more success and experience or a similar business with which it can be merged to great advantage. It was patently obvious none of these existed. Nevertheless, the ability to place GBP35 million with the purchaser's solicitors is not to be sneezed at.

To an outsider or with hindsight, it was obvious that the British Home Stores was now in the hands of the vultures and its death was imminent and indeed, just over a year later, this treasured retail giant died.

At that time, the British Home Stores had 11,000 employees and 20,000 current and future pensioners to differing degrees reliant on its survival. This corporate failure was indeed a sad event for thousands of families and the press, quite rightly, started to investigate the stories.

This naturally had all the ingredients of a top story. The former owner was a billionaire, knighted for his services to the retail industry and who was just about to take delivery of his third mega yacht, which had reportedly cost GBP100 million. A man who had been feted by the press and government for many years, basking in the limelight, frequently photographed at all top events surrounded by celebrities.

With an eye on circulation, the press realised they had their ideal villain to parade before the increasingly outraged multitude and like Nero 2000 years ago - throwing sometimes innocent people to the lions always provided great entertainment for the masses. The press did all they could to stir up feelings of resentment, anger, jealousy and fury at allegedly being cheated, knowing full well that these type of stories sold newspapers.

Every journalist had a say; from those who had never even bought a skimpy t-shirt from Top Shop to experienced financial journalists, who had a reasonable understanding of the financial and business world. They were all able to carefully arrange the facts to discredit the billionaire they had previously placed upon a pedestal.

In their entirety, the press reports were deliberately misreporting figures and facts and timelines (i.e. reporting payment of big dividends and missing out the fact they were paid 10 years before the company started to fail and that substantial financial help was given when it was needed at a later date) and other important factors in the death of this institution. The press knew they could sell more papers if they had a rich, wicked villain to blame.

It was not surprising that with enormous public interest created by the excessive zeal of the press that politicians could see they could make some political capital out of this event and swiftly appointed a select committee to investigate.

This select committee had eleven members of the Work & Pensions Committee with ten staff to assist. There were in addition eleven members of the Business Innovation and Skills Committee assisted by seven staff.

Heading the committee was Frank Field, the Chairman of the Work & Pensions Committee and probably the only member known to the public. He seemed to make the most of the public attention (and I wish him success with his newly published book). He has had a long but not particularly spectacular career in politics. He is said to be an honourable person and the other twenty one members all being MPs, we must assume they are also all honourable people.

However, their honour is not the question. Are all, or any of them, competent to investigate a huge retail business? THAT IS THE QUESTION!!

I ask this, because a brief glance at all twenty two MP committee members' history, appears to show none had ever been in business for themselves or indeed ever worked for a commercial trading business or had any sort of background experience in how a business can be run. Having read the report twice, I am not surprised that these unknown unknowns produced such an unfair and biased report that showed how little knowledge they had of why the business failed. Surprisingly, however, hidden away in the report there are some gems of information and suggestions, which may give us hope for the future. If they are not resorting to Orwellian speech in their final paragraphs i.e:-

Report para 174 "Its lessons merit broader consideration of the framework in which companies operate. We will do so from a pro-capitalist perspective". SOME HOPES!!

Report para 176 "It is equally important, however, that a balance is found to enable otherwise viable companies to continue to operate. The jobs of those currently in employment are inevitably in some competition with the pension entitlements of their forebears". SOMEONE HAS TO LOSE OUT, SO DON'T HOLD YOUR BREATH!!

If I had produced the report, I would not have failed to give the following a detailed mention.

Obviously, the main problem is the pension fund shortfall, so I will start with this.

Pensions were first created for civil servants in about 1880 (of course they would be first) and by 1920-30s by paternalistic businesses, as an added payment to staff to encourage long term loyalty to their employers. Monies were set aside and invested separately from the company's own funds, so that the natural up and down cycles and sometimes failure of business life would not lose the savings of the employees. The pension payments and amounts were PROMISES but could be adjusted if the parent company had severe problems that jeopardised the very existence of the enterprise.

Originally, pension fund money was nearly always invested in government securities for safety, although it produced lower returns than equities or property (but much higher than current gilt yields). Sometime in the 1950s, a fund manager, Mr Ross Goobey of the Imperial Tobacco pension fund, decided that equities and property would produce better long term returns for its pensioners. It did so in spectacular fashion and thus, the cult of "the equity" was born.

In the 1980s, most pension funds were sitting on considerable surplus funds beyond their actuarially calculated needs and were not too troubled, when the government of its day, brought in pensions bills as acts of Parliament that changed a slightly flexible promised pension to strictly inflexible contractual obligations.

Most pension funds could survive this slow motion time bomb but in 1997, Gordon Brown removed pension funds tax free status on dividend income and collectively, they lost income of GBP5 billion per year, which they had previously been able to reclaim. This was a capital value at that time of about GBP100 billion and allowing for increases in dividends would be GBP6 billion per annum today and due to the contrived reduction in interest rates since 2008 would probably have an actuarial capital value of GBP200 billion.

As usual, the government had consulted specialists, then despite the experts' genuine concerns expressed to them, took no notice.

These concerns now bring me to a shortened relevant story of my own.

55 years ago, soon after I first started work in an estate agents' office, I was advised to go to a night school for surveyors.

I had to buy some course study books and the one I remember best was called Parry's Valuation Tables. This book had numerous tables of valuations for property freehold/leasehold, allowing for tax at different rates etc. It also had a few pages on life expectancy for men and women for that time. It showed I would make it to my early seventies. I was seventeen at that time and, as far as I was concerned, this information was a load of useless tosh.

However, fast forward thirty five years when I became a beneficiary and executor of the last of my uncles. He had left a substantial estate to me and three other relatives, one older and two much younger than me. We were to have the income for life and then, as we each popped off, six charities would receive our share of the capital. It transpired that this arrangement suited neither the relatives nor any of the charities - everyone wanted their share of the pot immediately. I asked the largest charitable beneficiary to choose an actuary firm acceptable to all the charities to value the respective interests, which they did and a scheme of rearrangement for the estate was entered into acceptable to all parties.

As always, my personal stories seem to go slightly off kilter to my main ramblings, but not in this case, as luckily the actuaries were not using my 35 years old Parry's tables but up to date figures.

They gave me an extra 10 years of life. Was I happy to receive this news!!! Now, of course, you will all realise it was not just me who received the benefit of this actuarial life enhancement but on average the whole of the UK population. Life expectancy has improved even more in the 20 years since my story, (a further 5 years)!

Pension funds were mostly set up when people survived, maybe 6 to 10 years after retirement, now it is probably 15-25 years. It is pretty obvious the pension pots need to be much larger.

In 2008, a severe banking crisis came along and forced the government to create extra money and reduce interest rates to practically nil. Because pension funds are forced to invest most of their funds in government securities, which now have the lowest interest rates ever known in this country, the calculations of the capital required to provide for the pension commitments thus rises considerably.

Agatha Christie's favourite detective, Hercule Poirot, would often start his investigations by looking to see who benefits most from a crime. With this 8 year hiatus in interest rate movement from 1/2 %, it is most definitely our government and secondly, the banks who have the most benefits.

If interest rates rose to 2%, which to me seems a more realistic figure for the current state of the UK economy, most pension funds would see their deficits melt away.

Not apparently mentioned in the report was the fact that the British Home Stores pension fund has over GBP500,000,000 set aside for its pensioners. Nor that between 2013 & 2014, the rate of return it expected to receive on its investments, halved from 6% to 3% p.a., which would have increased the deficit considerably.

The next area of concern to me, hardly mentioned in the select committee report, is business rates. I understand that the British Home Stores was paying about GBP80 million per year in business rates. This GBP80 million was paid whether they made a profit or not and of course, they failed to make a profit for their last six years. This disastrous scenario was exacerbated by a government decree by delaying the revaluation of the rateable values for two years from 2015 to 2017. This property tax was equivalent to GBP16,000 pa for each full time job at BHS.

In its wisdom recently, again, by government decree, the minimum wage was increased considerably. This did not help the future planning at BHS and would make any successful sale of the business less likely.

Happening over the last 10 years or so, one further tsunami of adversity to the British Home Stores, was the rapid expansion of the internet, which allowed new companies to sell direct to the consumer, products at lower prices than retailers. Retailers were burdened by high shop rents, higher labour costs and of course, an unyielding heavy property tax on their necessary use of shops from which to sell their goods and I repeat a heavy tax, whether they make a profit or not.

The autopsy on the death of this much loved retailer will, if properly conducted, come to the conclusion the main culprit is our chosen government of the day by their:

   1.   Changing the pension funds flexibility under times of stress. 

2. When the funds were investing successfully and were cautiously overfunded taking away a major part of their income (tax credit refund).

3. Charging an outdated and disproportionate property tax on retailers, without allowing any concession for non-profitability.

4. Failing to see what a devastating effect the internet market selling was having on the UK land based retail industry and thus, failing to make any tax adjustments to compensate.

5. Encouraging the Bank of England to keep interest rates at virtually nil for three years or more, longer than necessary. This will make pension funds demand more from their employer, thereby restricting funds for investment in the trading company.

6. Failing to allow adjustments to the recipient of pension payments to take some account of peoples much welcomed but extended life expectancy.

This select committee report has produced much comment on the last few years of the British Home Stores, most of which is irrelevant to the death of this institution.

This was part of a business grouping that it should never have been part of. British Home Stores was dragging the whole group down and the owner was desperate to dispose of it and floundering in his efforts to rid himself of this Jonah of a corporation, he was led into the hands of a former bankrupt, who somehow managed to conjure up GBP35 million, which was enough to lure the then owner to proceed further, until the deal probably had to be done.

In the new hands, huge professional fees were extracted, the new management arranged for themselves to be excessively well paid and borrowings and deals were done at usurious terms.

That old stalwart of the high street, British Home Stores, was already a zombie nearly dead on the High Street with the vultures picking at the formerly plump carcass until its finances ran out.

REST IN PEACE BRITISH HOME STORES

You, who served this country so well for over 80 years:-

That is until the rapacious capacity of our elected leaders, to suck ever increasing taxes from successful companies drained your life blood out of you, our much loved Behemoth.

Perhaps in time governments will learn that there is a limit to how much taxes companies can bear?

Andrew S Perloff

Chairman 28 September 2016

 
        Panther Securities P.L.C. 
 
 CONDENSED CONSOLIDATED INCOME STATEMENT 
  for the six months ended 30 June 2016 
 
 
                                                         Six 
                                           Notes      months       Six months                       Year 
                                                       ended            ended                      ended 
                                                     30 June          30 June                31 December 
                                                        2016             2015                       2015 
                                                     GBP'000          GBP'000                    GBP'000 
 
                                                   Unaudited        Unaudited                    Audited 
 
 Revenue                                    2          7,222            7,293                     14,443 
 Cost of sales                              2        (2,037)          (2,372)                    (3,824) 
                                                  ----------      -----------      --------------------- 
 Gross profit                                          5,185            4,921                     10,619 
 
 Other income                                            355              270                        294 
 Administrative expenses                             (2,336)          (1,235)                    (3,540) 
                                                  ----------      -----------      --------------------- 
                                                       3,204            3,956                      7,373 
 
 Profit / (loss) on disposal 
  of investment properties                               364             (25)                      1,074 
 Movement in fair value of investment 
  properties                                             263                -                      3,859 
                                                  ----------      -----------      --------------------- 
                                                       3,831            3,931                     12,306 
 
 Finance costs                                       (2,556)          (2,620)                    (5,186) 
 Investment income                                        93               16                         31 
 Loss (realised) on the disposal 
  of available for sale investments 
  (shares)                                                 -            (244)                      (244) 
 (Impairment of)/ reversal of 
  impairment of available for 
  sale investments (shares)                             (12)              128                          - 
 Movement in derivative financial 
  liabilities                                        (7,983)            2,747                      1,563 
 
 (Loss)/ profit before income 
  tax                                                (6,627)            3,958                      8,470 
 
 Income tax credit/ (expense)               3          1,747          (1,422)                    (1,657) 
 (Loss)/ profit for the period                       (4,880)            2,536                      6,813 
                                                  ==========      ===========      ===================== 
 
 Attributable to: 
 Equity holders of the parent                        (4,896)            2,541                      6,815 
 Non-controlling interest                                 16              (5)                        (2) 
                                                  ----------      -----------      --------------------- 
 (Loss)/ profit for the period                       (4,880)            2,536                      6,813 
                                                  ----------      -----------      --------------------- 
 
 
 
 (Loss) / earnings per share 
 Basic and diluted - continuing 
  business                                            (27.6)   p         14.5   p                  38.7p 
                                                  ----------      -----------      --------------------- 
 
 
 
 
                 Panther Securities P.L.C. 
 
 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
          for the six months ended 30 June 2016 
 
 
 
                                       Six months   Six months          Year 
                                            ended        ended         ended 
                                          30 June      30 June   31 December 
                                             2016         2015          2015 
                                          GBP'000      GBP'000       GBP'000 
 
                                        Unaudited    Unaudited       Audited 
 
 (Loss)/ profit for the period            (4,880)        2,536         6,813 
 Other comprehensive income 
 
  Items that may be reclassified 
  subsequently to profit or 
  loss 
 Movement in fair value of 
  available for sale investments 
  (shares) taken to equity                      -            -            45 
 Deferred tax relating to movement 
  in fair value of available 
  for sale investments (shares) 
  taken to equity                               -            -           (8) 
 
 Other comprehensive income 
  for the period, net of tax                    -            -            37 
 Total comprehensive income 
  for the period                          (4,880)        2,536         6,850 
                                      -----------  -----------  ------------ 
 
 Attributable to: 
 Equity holders of the parent             (4,896)        2,541         6,852 
 Non-controlling interest                      16          (5)           (2) 
                                          (4,880)        2,536         6,850 
                                      -----------  -----------  ------------ 
 
 
 
                              Panther Securities P.L.C. 
 
              CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
                               Company number 293147 
                                 As at 30 June 2016 
 
                                      Notes     30 June     30 June   31 December 
                                                   2016        2015          2015 
                                                GBP'000     GBP'000       GBP'000 
 
  ASSETS                                      Unaudited   Unaudited       Audited 
  Non-current assets 
  Plant and equipment                                86         187           145 
  Investment property                     6     175,623     175,285       176,133 
  Deferred tax asset                              1,810         113             - 
  Available for sale investments 
   (shares)                                         733         818           736 
                                             ----------  ----------  ------------ 
                                                178,252     176,403       177,014 
  Current assets 
  Inventories (MRG)                                 116          79            60 
  Stock properties                                  991         991           991 
  Trade and other receivables                     3,725       4,937         4,553 
  Cash and cash equivalents*                      6,692       4,905         4,387 
                                             ----------  ----------  ------------ 
                                                 11,524      10,912         9,991 
 
  Total assets                                  189,776     187,315       187,005 
                                             ----------  ----------  ------------ 
 
  EQUITY AND LIABILITIES 
  Equity attributable to equity 
   holders of the parent 
  Capital and reserves 
  Share capital                                   4,437       4,372         4,437 
  Share premium account                           5,491       4,692         5,491 
  Equity shares to be issued                          -         863             - 
  Capital redemption reserve                        604         604           604 
  Retained earnings                              58,282      62,771        65,485 
                                             ----------  ----------  ------------ 
                                                 68,814      73,302        76,017 
 
  Non-controlling interest                           96          77            80 
 
  Total equity                                   68,910      73,379        76,097 
                                             ----------  ----------  ------------ 
 
  Non-current liabilities 
  Long-term borrowings                           71,308      72,107           591 
  Derivative financial liability                 30,895      21,728        22,912 
  Deferred tax liability                              -           -           100 
  Obligations under finance 
   leases                                         6,641       7,037         6,640 
                                             ----------  ----------  ------------ 
                                                108,844     100,872        30,243 
  Current liabilities 
  Trade and other payables                       10,820      10,733        10,663 
  Accrued dividend payable                          532         711             - 
  Short-term borrowings                             140       1,140        69,637 
  Current tax payable                               530         480           365 
                                             ----------  ----------  ------------ 
                                                 12,022      13,064        80,665 
 
  Total liabilities                             120,866     113,936       110,908 
                                             ----------  ----------  ------------ 
 
  Total equity and liabilities                  189,776     187,315       187,005 
                                             ----------  ----------  ------------ 
 
 
                *Of this balance GBP716,000 (30 June 2015: GBP239,000, 
             31 December 2015: GBP1,110,000) is restricted by the Group's 
             lenders i.e. it can only be used for purchase of investment 
                        property (or otherwise by agreement). 
 
                              Panther Securities P.L.C. 
 
               CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
                       for the six months ended 30 June 2016 
 
 
 
                                                Equity 
                             Share     Share    Shares      Capital   Retained      Total 
                                                 to be 
                           Capital   Premium    issued   Redemption   Earnings 
                           GBP'000   GBP'000   GBP'000      GBP'000    GBP'000    GBP'000 
 Balance at 1 
  January 2015 
  (audited)                  4,372     4,692         -          604     61,804     71,472 
 Total comprehensive 
  income for the 
  period                         -         -         -            -      2,541      2,541 
 Dividends due                   -         -       863            -    (1,574)      (711) 
                          --------  --------  --------  -----------  ---------  --------- 
 Balance at 30 
  June 2015 (unaudited)      4,372     4,692       863          604     62,771     73,302 
                          --------  --------  --------  -----------  ---------  --------- 
 
 
 Balance at 1 
  January 2015 
  (audited)                  4,372     4,692         -          604     61,804     71,472 
 Total comprehensive 
  income for the 
  period                         -         -         -            -      6,852      6,852 
 Dividends                      65       799         -            -    (3,171)    (2,307) 
                          --------  --------  --------  -----------  ---------  --------- 
 Balance at 1 
  January 2016 
  (audited)                  4,437     5,491         -          604     65,485     76,017 
 Total comprehensive 
  income for the 
  period                         -         -         -            -    (4,896)    (4,896) 
 Dividends due                   -         -         -            -    (2,307)    (2,307) 
 
 Balance at 30 
  June 2016 (unaudited)      4,437     5,491         -          604     58,282     68,814 
                          ========  ========  ========  ===========  =========  ========= 
 
 
           Panther Securities P.L.C. 
 
 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 
     for the six months ended 30 June 2016 
 
 
 
                                            Notes     30 June     30 June   31 December 
                                                         2016        2015          2015 
                                                      GBP'000     GBP'000       GBP'000 
 
                                                    Unaudited   Unaudited       Audited 
 Cash flows generated from operating 
  activities 
 Profit from operating activities                       3,204       3,956         7,373 
 Add: Depreciation charges for 
  the period                                               53          51           135 
 Less: Rent paid treated as interest                    (262)       (272)         (520) 
 
 Profit before working capital 
  change                                                2,995       3,735         6,988 
 (Increase)/ decrease in inventory                       (56)        (13)             5 
 Decrease/ (increase) in receivables                      828        (92)           292 
 Increase/ (decrease) in payables                         181     (1,165)       (1,139) 
                                                   ----------  ----------  ------------ 
 Cash generated from operations                         3,948       2,465         6,146 
 
 Interest paid                                        (2,139)     (2,234)       (4,572) 
 Income tax paid                                            2          49          (95) 
                                                   ----------  ----------  ------------ 
 Net cash generated from operating 
  activities                                            1,811         280         1,479 
 
 Cash generated from investing 
  activities 
 Purchase of plant and equipment                            -           -          (38) 
 Purchase of investment properties                       (39)     (2,123)       (2,224) 
 Purchase of available for sale 
  investments (shares)                                   (10)           -             - 
 Corporate acquisition (net of 
  cash received)                                      (4,481)           -             - 
 Proceeds from sale of investment 
  property                                              5,189         225         4,019 
 Proceeds from sale of plant and 
  equipment                                                 -           1             - 
 Proceeds from sale of available 
  for sale investments (shares)                             -         244           244 
 Dividend income received                                  91          11            23 
 Interest income received                                   2           8             8 
                                                   ----------  ----------  ------------ 
 Net cash generated from / (used 
  in) investing activities from 
  continuing operations                                   752     (1,634)         2,032 
 
 Financing activities 
 New loans received                                     2,000       1,000         1,000 
 Loan arrangement fees and associated 
  set up costs                                          (407)           -             - 
 Repayments of loans                                     (76)        (76)       (3,152) 
 Dividends paid                                       (1,775)           -       (2,307) 
 
 Net cash (used in)/ generated 
  from financing activities from 
  continuing operations                                 (258)         924       (4,459) 
 
 Net increase/ (decrease) in cash 
  and cash equivalents                                  2,305       (430)         (948) 
 
 Cash and cash equivalents at 
  the beginning of period                               4,387       5,335         5,335 
 
 Cash and cash equivalents at 
  the end of period*                                    6,692       4,905         4,387 
                                                   ----------  ----------  ------------ 
 

*Of this balance GBP716,000 (30 June 2015: GBP239,000, 31 December 2015: GBP1,110,000) is restricted by the Group's lenders i.e. it can only be used for purchase of investment property (or otherwise by agreement).

Panther Securities P.L.C.

NOTES TO THE INTERIM FINANCIAL REPORT

for the six months ended 30 June 2016

   1.     Basis of preparation of interim financial statements 

The results for the year ended 31 December 2015 have been audited whilst the results for the six months ended 30 June 2015 and 30 June 2016 are unaudited.

The financial information set out in this interim financial report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory accounts for the year ended 31 December 2015 which were prepared under International Financial Reporting Standards ("IFRS") as adopted for use in the European Union, were filed with the Registrar of Companies. The auditors reported on these accounts, their report was unqualified and did not include reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain any statements under Section 498 (2) or Section 498 (3) of the Companies Act 2006.

These condensed consolidated interim financial statements are for the six month period ended 30 June 2016. They have been prepared using accounting policies consistent with IFRS as adopted for use in the European Union. IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the IFRS Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission. The financial information has been prepared on the basis of IFRS that the Board of Directors expect to be applicable as at 31 December 2016.

There are no new standards, interpretations and amendments, effective for the first time from 1 January 2016, that have had a material effect on the financial statements of the Group.

   2.     Revenue and cost of sales 

The Group's main operating segment is investment and dealing in property and securities. The majority of the revenue, cost of sales and profit or loss before taxation being generated in the United Kingdom.

MRG Systems Ltd is an operating business segment whose principal activity is that of electronic designers, engineers and consultants. 60% of its revenue arose in the United Kingdom and 100% of its cost of sales.

The split of assets, tax effect and cash flow of each segment is not shown as these are not material in relation to MRG Systems Ltd.

 
                          30 June     30 June   31 December 
                             2016        2015          2015 
                          GBP'000     GBP'000       GBP'000 
 Turnover arose as      Unaudited   Unaudited       Audited 
  follows: 
 
 Rental income              6,333       6,463        12,840 
 Income from trading 
  (MRG Systems Ltd)           889         830         1,603 
                            7,222       7,293        14,443 
                       ==========  ==========  ============ 
 
 
                            30 June     30 June   31 December 
                               2016        2015          2015 
                            GBP'000     GBP'000       GBP'000 
 Cost of sales arose      Unaudited   Unaudited       Audited 
  as follows: 
 
 Cost of sales from 
  rental income               1,694       2,049         3,272 
 Cost of sales from 
  trading (MRG Systems 
  Ltd)                          343         323           552 
                              2,037       2,372         3,824 
                         ==========  ==========  ============ 
 
   3.     Income tax expense 

The charge for taxation comprises the following:

 
 
                                  30 June     30 June   31 December 
                                     2016        2015          2015 
                                  GBP'000     GBP'000       GBP'000 
                                Unaudited   Unaudited       Audited 
 Current period UK 
  corporation tax                     163         320           441 
 Prior period UK corporation 
  tax                                   -           -          (91) 
                               ----------  ----------  ------------ 
                                      163         320           350 
 
 Current period deferred 
  tax                             (1,908)       1,102         1,307 
                               ----------  ----------  ------------ 
 Income tax (credit)/ 
  expense for the period          (1,745)       1,422         1,657 
                               ==========  ==========  ============ 
 
 

The taxation charge is calculated by applying the Directors' best estimate of the annual effective tax rate to the profit for the period. The deferred tax credit during the period primarily arises due to the fair value loss on the Group's interest rate swap.

   4.     Dividends 

Amounts recognised as distributions to equity holders in the period:

 
                          30 June     30 June   31 December 
                             2016        2015          2015 
                          GBP'000     GBP'000       GBP'000 
                        Unaudited   Unaudited       Audited 
 
 Final dividend for 
  the year ended 31 
  December 2014 of 
  9p (see below)                -       1,574         1,574 
 Interim dividend 
  for the year ended 
  31 December 2015 
  of 9p per share               -           -         1,597 
 Special dividend 
  for the year ended        1,775           -             - 
  31 December 2015 
  of 10p per share 
 Final dividend for 
  the year ended 31           532           -             - 
  December 2015 of 
  3p per share 
 
                            2,307       1,547         3,171 
                       ==========  ==========  ============ 
 

On 31 July 2015 the final dividend for the year ended 31 December 2014 of 9p per share, had a scrip alternative (see note 8). Pursuant to the scrip dividend 259,634 new ordinary shares were issued in 2015.

The final dividend of 3p per year for the year ended 31 December 2015 was not paid at the period end (being accrued in these accounts) and was paid on 5 September 2016.

The Directors have declared an interim dividend of 3p per share to be paid on 29 November 2016 to shareholders on the register at 11 November 2016 (ex-dividend 10 November 2016).

   5.     Earnings per ordinary share (basic and diluted) 

The calculation of basic and diluted earnings per ordinary share is based on earnings, after excluding non-controlling interests on continuing operations, being a loss of GBP4,896,000 (30 June 2015 - profit of GBP2,541,000 and 31 December 2015 - profit of GBP6,852,000).

The basic earnings per share is based on the weighted average of the ordinary shares in existence throughout the period, being 17,746,929 to 30 June 2016 (17,617,112 to 31 December 2015 and 17,502,944 to 30 June 2015). There are no potential shares in existence for any period therefore diluted and basic earnings per share are equal.

   6.     Investment Properties 
 
                               30 June     30 June     31 December 
                                  2016        2015            2015 
                               GBP'000     GBP'000         GBP'000 
 
                             Unaudited   Unaudited         Audited 
 
 Fair value of investment 
  properties 
 
 At 1 January                  176,133     173,412         173,412 
 Additions                       4,551       2,123           2,224 
 Fair value adjustment 
  on property 
  held on operating 
  leases                             -           -           (417) 
 Disposals                     (5,324)       (250)         (2,945) 
 Revaluation increase              263           -           3,859 
                               175,623     175,285       176,133 
                            ==========  ==========  ============ 
 
 
   7.     Derivative financial instruments 

The main risks arising from the Group's financial instruments are those related to interest rate movements. Whilst there are no formal procedures for managing exposure to interest rate fluctuations, the Board continually reviews the situation and makes decisions accordingly. Hence, the Company will, as far as possible, enter into fixed interest rate swap arrangements. The purpose of such transactions is to manage the interest rate risks arising from the Group's operations and its sources of finance.

 
                               30 June          30 June           31 December 
                                2016             2015                2015 
                               GBP'000          GBP'000             GBP'000 
 Bank loans             Unaudited    Rate     Unaudited    Rate   Audited    Rate 
 Interest is charged 
  as to: 
 Fixed/ Hedged 
 HSBC Bank plc*            35,000   7.03%        35,000   7.06%    35,000   7.06% 
 HSBC Bank plc**           25,000   6.60%        25,000   6.63%    25,000   6.63% 
 Unamortised loan 
  arrangement fees          (704)                  (58)                 - 
 
 Floating element 
 HSBC Bank plc             11,497                12,497             9,497 
 Natwest Bank plc             654                   808               731 
                       ----------          ------------          -------- 
                           71,447                73,247            70,228 
                       ==========          ============          ======== 
 
 

Bank loans totalling GBP60,000,000 (2014 - GBP60,000,000) are fixed using interest rate swaps removing the Group's exposure to interest rate risk. Other borrowings are arranged at floating rates, thus exposing the Group to cash flow interest rate risk.

The derivative financial assets and liabilities are designated as held for trading.

 
                       Hedged           Rate          Duration       30 June     30 June   31 December 
                        amount        (without      of contract         2016        2015          2015 
                                       margin)       remaining          Fair        Fair    Fair value 
                                                                       value       value 
                       GBP'000                         years         GBP'000     GBP'000       GBP'000 
                                                                   Unaudited   Unaudited       Audited 
 Derivative 
  Financial 
  Liability 
 Interest 
  rate swap               35,000            5.06%      22.19        (25,530)    (17,400)      (18,541) 
 Interest 
  rate swap               25,000            4.63%       5.42         (5,365)     (4,328)       (4,371) 
                                                                                          ------------ 
                                                                   (30,895)     (21,728)      (22,912) 
                                                                  ----------  ----------  ------------ 
            Movement in derivative financial 
             liabilities                                             (7,983)       2,747         1,563 
                                                                  ==========  ==========  ============ 
 
 

* Fixed rate came into effect on 1 September 2008. The rate includes a blend of 2% and 1.95% margin. The contract includes mutual breaks, the next one being on 23 December 2019 (and every 5 years thereafter).

** This arrangement came into effect on 1 December 2011 when HSBC exercised an option to enter the Group into this interest swap arrangement. The rate includes a blend of 2% and 1.95% margin. This contract includes a mutual break on the fifth anniversary and its duration is until 1 December 2021.

Interest rate derivatives are shown at fair value in the statement of financial position, with charges in fair value taken to the income statement. Interest rate swaps are classified as level 2 in the fair value hierarchy specified in IFRS 13.

The vast majority of the derivative financial liabilities are due in over one year and therefore they have been disclosed as all due in over one year.

The above fair values are based on quotations from the Group's banks and Directors' valuation.

Treasury management

The long-term funding of the Group is maintained by three main methods, all with their own benefits. The Group has equity finance, has surplus profits and cash flow which can be utilised, and also has loan facilities with financial institutions. The various available sources provide the Group with more flexibility in matching the suitable type of financing to the business activity and ensure long-term capital requirements are satisfied.

   8.     Issue of equity/ scrip dividend 

As stated in note 4 the final dividend of 9p per share for the year ended 31 December 2014 was paid on 31 July 2015 and had a scrip dividend alternative. The last day for electing to take the scrip alternative was 3 July 2015 and the reference price was 332.5p.

Shareholders holding 9,592,088 Ordinary Shares, representing 54.9% of the issued share capital of the Company, elected to take the scrip dividend.

Accordingly on 6 August 2015 the Company issued 259,634 new Ordinary Shares which rank pari passu with the existing issued ordinary shares of the Company.

No dividends paid since have had a scrip alternative so no further shares have been or currently intend to be issued.

   9.     Net asset value per share 
 
                        30 June     30 June   31 December 
                           2016        2015          2015 
                        GBP'000     GBP'000       GBP'000 
 
                      Unaudited   Unaudited       Audited 
 Basic and diluted         388p        413p          428p 
                     ==========  ==========  ============ 
 

10. Copies of this report are to be sent to all shareholders and are available from the Company's registered office at Deneway House, 88-94 Darkes Lane, Potters Bar, EN6 1AQ and will also be available for download from our website www.pantherplc.com.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR QDLFLQKFZBBL

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