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Conygar Investment Company Plc (The) NEX:CIC.GB NEX Ordinary Share GB0033698720
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Conygar Investment Company PLC(The) Interim Results

30/04/2020 7:00am

UK Regulatory (RNS & others)


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Conygar Investment Company PLC(The)

30 April 2020

30 April 2020

The Conygar Investment Company PLC

Interim Results for the six months ended 31 March 2020

Summary

   --    Net asset value per share 177.8 pence at 31 March 2020. 

-- Total cash available of GBP36.1 million (67.3 pence per share) as at 31 March 2020 and no debt.

-- Good progress made on designs for the early phase developments of our mixed-use scheme at The Island Quarter, Nottingham.

-- Construction of the Lidl store at Cross Hands, Carmarthenshire completed and development of the Burger King restaurant and drive through underway.

   --    Planning permission submitted for a student accommodation scheme at Selly Oak, Birmingham. 

-- Bought back 2.93 million shares (5.2% of ordinary share capital) at an average price of 135.3 pence per share.

Summary Group Net Assets as at 31 March 2020

 
                                               Per Share 
                                       GBP'm       Pence 
 Investment Properties                  16.4        30.6 
 Trading and Development Properties     41.9        78.3 
                                      ------  ---------- 
 Total Properties                       58.3       108.9 
 Cash                                   36.1        67.3 
 Other Net Assets                        0.9         1.6 
                                      ------  ---------- 
 Net Assets                             95.3       177.8 
                                      ======  ========== 
 
 

Robert Ware, Chief Executive of The Conygar Investment Company, commented:

"We believed the outlook for the economy was positive following the general election at the end of 2019 and were looking forward to progressing our projects. The COVID-19 shutdown has fundamentally changed the outlook, and it is neither possible nor sensible to attempt to predict the future. No one can be certain of the impact of the virus on the carrying values of our development and trading properties at this time. However, as a business with low overheads, no debt and a strong cash position, Conygar is well placed to weather the downturn which has already begun.

We will monitor opportunities in the marketplace carefully as they will undoubtedly appear in the coming months. At the same time, we are well placed to advance our projects and hope to make announcements later this year to that effect."

Enquiries:

The Conygar Investment Company PLC

Robert Ware: 07771 757320 (email: robertware@conygar.com )

David Baldwin 07803 724850 (email: davidbaldwin@conygar.com )

Liberum Capital Limited (Nominated Adviser and Broker)

Richard Bootle: 020 3100 2222

Jamie Richards 020 3100 2222

Ed Phillips: 020 3100 2222

Laura Hamilton: 020 3100 2222

Temple Bar Advisory (Public Relations)

Alex Child-Villiers: 07795 425580

Will Barker: 07827 960151

This announcement is released by The Conygar Investment Company PLC and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Robert Ware, Chief Executive.

Chairman's and Chief Executive's Statement

Results Summary

We present the Group's results for the six months ended 31 March 2020. The net asset value per share at that date decreased to 177.8p from 178.2p at 30 September 2019 (178.6p at 31 March 2019) and the loss after tax was GBP1.5 million (period ended 31 March 2019: loss of GBP13.7 million, year ended 30 September 2019: loss of GBP14.0 million). The loss for the current period includes a GBP1.3 million write down of our project at Cross Hands, as a result of the current economic impact of COVID-19.

The reporting period has coincided with a number of significant external events, beginning with the general election and ending with the COVID-19 related shutdown. Despite this volatility, the Company has made good operational progress, which should benefit the Group in the future.

At The Island Quarter, Nottingham, we have made good progress with the design of the early phases of the development and hope to be able to make announcements later this year.

At Haverfordwest in Pembrokeshire, we are continuing with our plans to build the first phase of houses. Reserved matters consent was received in September 2019 for 115 houses. Construction will begin when the COVID-19 situation permits work to be carried out safely.

The revaluation of our retail park at Cross Hands in Carmarthenshire at 31 March 2020, at GBP16.4 million, reflects a 10.4% reduction in value since the year end. We completed the construction of the 23,000 square foot Lidl food store in September 2019 which then opened for trading in January 2020. In October 2019, we exchanged an agreement for lease with Union Burger Ltd to construct a 2,750 square foot Burger King restaurant and drive through. Planning was consented in January 2020 and we started construction immediately. On 27 March 2020, the contractor halted construction due to COVID-19 related restrictions. As soon as it is possible safe construction will continue. The park has been trading well and when completed it will offer a mix of high-quality tenants.

At the Holyhead Waterfront scheme in Anglesey, we continue to work on the detailed design and reserved matters application in tandem with the marine consenting process. We expect to submit all applications by the year end.

In April 2019, we exchanged a conditional contract, on a subject to planning basis, to dispose of our industrial property in Selly Oak, Birmingham. The planning application for this student accommodation scheme was submitted in January 2020 and we are awaiting its determination.

Share Buyback

During the six-month period ended 31 March 2020, the Group acquired 2,931,000 ordinary shares representing 5.2% of its ordinary share capital at an average price of 135.3 pence per share and a cost of GBP3.96 million. We continue to see the buyback authority as a useful capital allocation tool and will continue to use it when we believe the stock market value differs too widely from our view of the intrinsic value of the Company.

Outlook

We believed the outlook for the economy was positive following the general election at the end of 2019 and were looking forward to progressing our projects. The COVID-19 shutdown has fundamentally changed the outlook, and it is neither possible nor sensible to attempt to predict the future. No one can be certain of the impact of the virus on the carrying values of our development and trading properties at this time. However, as a business with low overheads, no debt and a strong cash position, Conygar is well placed to weather the downturn which has already begun. We will monitor opportunities in the marketplace carefully as they will undoubtedly appear in the coming months. At the same time, we are well placed to advance our projects and hope to make announcements later this year to that effect.

   N J Hamway                                                   R T E Ware 
   Chairman                                                        Chief Executive 

Financial review

Net Asset Value

During the six months ended 31 March 2020, the net asset value decreased by GBP5.4 million to GBP95.3 million (31 March 2019: GBP101.0 million; 30 September 2019: GBP100.7 million). The primary movements in the period were GBP1.6 million of administrative costs, a GBP1.3 million deficit from the revaluation of Cross Hands and GBP4.0 million spent on purchasing our own shares. These reductions were partly offset by GBP0.8 million of net rental income, profits of GBP0.2 million from the sale of the B&M store in Ashby-de-la-Zouch and GBP0.3 million of tax credits and finance income.

Cash Flow and Financing

At 31 March 2020, the Group had cash of GBP36.1 million and no borrowings (31 March 2019: cash of GBP45.6 million and no borrowings; 30 September 2019: cash of GBP39.9 million and no borrowings).

During the period ended 31 March 2020, the Group used GBP2.8 million cash in operating activities (period ended 31 March 2019: generated GBP0.3 million; year ended 30 September 2019: used GBP2.0 million).

The primary cash outflows in the current period were GBP2.7 million incurred on development projects and investment properties and GBP4.0 million to buy back shares. These were partly offset by cash inflows of GBP3.7 million from the sale of the B&M store in Ashby-de-la-Zouch, resulting in a net cash outflow during the period of GBP3.8 million.

Net Income from Property Activities Six months ended Year ended

 
                                            31 Mar   31 Mar   30 Sep 
                                              2020     2019     2019 
                                             GBP'm    GBP'm    GBP'm 
 
 Rental and other income                       0.9      1.0      1.8 
 Direct property costs                       (0.1)    (0.1)    (0.2) 
                                           -------  -------  ------- 
                                               0.8      0.9      1.6 
 
 Sale of investment properties                 3.7      5.5      5.5 
 Cost of investment properties sold          (3.5)    (5.5)    (5.5) 
 
 Total net surplus arising from property 
  activities                                   1.0      0.9      1.6 
                                           =======  =======  ======= 
 
 
 

Rent collection

Companies operating directly or indirectly in the retail, leisure or hospitality sectors have in many cases been significantly impacted by Covid-19. However, as at the date of signing this report, we have collected 82% of the rents due for the most recent rent quarter day with the two outstanding amounts being paid by monthly instalments.

Administrative Expenses

The administrative expenses for the period ended 31 March 2020 were GBP1.6 million (period ended 31 March 2019: GBP1.3 million; year ended 30 September 2019: GBP2.6 million). The major items were salary costs of GBP1.2 million (period ended 31 March 2019: GBP0.8 million; year ended 30 September 2019: GBP1.6 million) which includes redundancy payments of GBP0.3 million and various costs arising as a result of the Group being quoted on AIM.

Taxation

The tax credit for the period ended 31 March 2020 is GBP0.2 million on the pre-tax loss of GBP1.7 million (period ended 31 March 2019: tax charge of GBP0.1 million; year ended 30 September 2019: tax charge of GBP0.1 million). Current tax is payable, at a rate of 19% for UK registered companies and 20% for those registered in Jersey, on net rental income after deduction of finance costs and administrative expenses.

Summary of Investment Properties

 
                          31 Mar   31 Mar   30 Sep 
                            2020     2019     2019 
                           GBP'm    GBP'm    GBP'm 
 
 Cross Hands ( 1 )         16.40    15.85    18.30 
 Ashby-de-la-Zouch (2)         -     1.34     3.13 
 
 Total investment          16.40    17.19    21.43 
                         =======  =======  ======= 
 
   (1)   External valuations provided by Knight Frank LLP at each period end. 

(2) The development of the 20,000 square foot store and 7,500 square foot garden centre, let to B&M Retail Limited, was completed in October 2019. The asset was forward sold and the balancing cash proceeds of GBP3.7m received on completion.

Summary of Development Projects

 
                                       31 Mar   31 Mar   30 Sep 
                                         2020     2019     2019 
                                        GBP'm    GBP'm    GBP'm 
 
 The Island Quarter, Nottingham (3)     16.76    15.28    15.52 
 Holyhead Waterfront                     9.56     8.96     9.23 
 Haverfordwest                           7.71     7.37     7.33 
 Selly Oak                               3.57     3.57     3.57 
 Rhosgoch                                3.00     3.00     3.00 
 King's Lynn                             0.76     0.87     0.78 
 Parc Cybi, Holyhead                     0.50     0.49     0.50 
 Fishguard Lorry Stop                    0.07     0.07     0.07 
 
 Total investment                       41.93    39.61    40.00 
                                      =======  =======  ======= 
 

(1) No one can be certain of the economic impact of the Covid-19 virus on the carrying values of our development and trading properties at this time. However, it remains our intention, once both the individual projects are significantly advanced and there is more clarity on the economy going forward, to introduce third party valuations as soon as it is practical.

   (2)   Development projects are stated at the lower of cost and net realisable value. 

(3) The costs incurred at The Island Quarter, Nottingham during the period ended 31 March 2020 relate primarily to planning and design fees for the early phases of the mixed-use development.

Consolidated Statement of Comprehensive Income

For the six months ended 31 March 2020

 
                                                      Six months ended                Year ended 
                                                                 31 Mar      31 Mar      30 Sept 
                                                                   2020        2019         2019 
                                                       Note     GBP'000     GBP'000      GBP'000 
 
 Rental income                                                      876         889        1,661 
 Other property income                                                -         110          116 
 
 Revenue                                                            876         999        1,777 
                                                              ---------  ----------  ----------- 
 
 Direct costs of: 
 Rental income                                                     (51)        (84)        (179) 
 Development costs written back / (off)                8             63    (18,759)     (19,084) 
 
 Direct Costs                                                        12    (18,843)     (19,263) 
                                                              ---------  ----------  ----------- 
 
 Gross Profit / (Loss)                                              888    (17,844)     (17,486) 
 
 (Deficit) / surplus on revaluation 
  of investment properties                             7        (1,284)       5,270        5,996 
 Profit on sale of investment property                              168           -            - 
 Administrative expenses                                        (1,591)     (1,256)      (2,615) 
                                                              ---------  ----------  ----------- 
 
 Operating Loss                                                 (1,819)    (13,830)     (14,105) 
 Finance income                                        4            120         144          252 
                                                              ---------  ----------  ----------- 
 
 Loss Before Tax                                                (1,699)    (13,686)     (13,853) 
 Tax credit / (charge)                                              210        (61)        (119) 
                                                              ---------  ----------  ----------- 
 
 Loss and Total Comprehensive 
  Charge for the Period                                         (1,489)    (13,747)     (13,972) 
                                                              =========  ==========  =========== 
 
 Loss per share                                        6        (2.74)p    (24.03)p     (24.57)p 
 
 
 

All amounts are attributable to equity shareholders.

All of the activities of the Group are classed as continuing.

Consolidated Statement of Changes in Equity

For the six months ended 31 March 2020

 
                                                   Capital 
                                       Share    Redemption    Treasury    Retained      Total 
                                     Capital       Reserve      Shares    Earnings     Equity 
                                     GBP'000       GBP'000     GBP'000     GBP'000    GBP'000 
 
 Changes in equity for the 
  six months ended 31 March 2019 
 
 At 1 October 2018                     2,988         3,565           -     113,731    120,284 
 Loss for the period                       -             -           -    (13,747)   (13,747) 
                                   ---------  ------------  ----------  ----------  --------- 
 
 Total comprehensive charge for 
  the period                               -             -           -    (13,747)   (13,747) 
 Purchase of own shares                    -             -     (5,582)           -    (5,582) 
 
 At 31 March 2019                      2,988         3,565     (5,582)      99,984    100,955 
                                   =========  ============  ==========  ==========  ========= 
 
 Changes in equity for the 
  year ended 30 September 2019 
 
 At 1 October 2018                     2,988         3,565           -     113,731    120,284 
 Loss for the year                         -             -           -    (13,972)   (13,972) 
                                   ---------  ------------  ----------  ----------  --------- 
 
 Total comprehensive charge for 
  the year                                 -             -           -    (13,972)   (13,972) 
 Purchase of own shares                    -             -     (5,582)           -    (5,582) 
 Cancellation of treasury shares       (162)           162       5,582     (5,582)          - 
 
 At 30 September 2019                  2,826         3,727           -      94,177    100,730 
                                   =========  ============  ==========  ==========  ========= 
 
 Changes in equity for the 
  six months ended 31 March 2020 
 At 1 October 2019                     2,826         3,727           -      94,177    100,730 
 Loss for the period                       -             -           -     (1,489)    (1,489) 
                                   ---------  ------------  ----------  ----------  --------- 
 
 Total comprehensive charge for 
  the period                               -             -           -     (1,489)    (1,489) 
 Purchase of own shares                    -             -     (3,965)           -    (3,965) 
 
 At 31 March 2020                      2,826         3,727     (3,965)      92,688     95,276 
                                   =========  ============  ==========  ==========  ========= 
 

Consolidated Balance Sheet

As at 31 March 2020

 
 
                                                31 Mar    31 Mar   30 Sept 
                                                  2020      2019      2019 
                                        Note   GBP'000   GBP'000   GBP'000 
 Non-Current Assets 
 Investment properties                   7      16,400    17,185    21,429 
 
   Current Assets 
 Development and trading properties      8      41,934    39,609    39,999 
 Trade and other receivables             9       1,848     1,506     1,470 
 Tax asset                                          70         -         - 
 Cash and cash equivalents                      36,079    45,622    39,911 
 
                                                79,931    86,737    81,380 
                                              --------  --------  -------- 
 
 Total Assets                                   96,331   103,922   102,809 
 
 Current Liabilities 
 Trade and other payables                10      1,005     1,612       788 
 Tax liabilities                                     -       105       141 
 
                                                 1,005     1,717       929 
                                              --------  --------  -------- 
 
 Non-Current Liabilities 
 Provision for liabilities and 
  charges                                11         50     1,250     1,150 
 
 Total Liabilities                               1,055     2,967     2,079 
                                              --------  --------  -------- 
 
 Net Assets                                     95,276   100,955   100,730 
                                              ========  ========  ======== 
 
 Equity 
 Called up share capital                         2,826     2,988     2,826 
 Capital redemption reserve                      3,727     3,565     3,727 
 Treasury shares                               (3,965)   (5,582)         - 
 Retained earnings                              92,688    99,984    94,177 
 
 Total Equity                                   95,276   100,955   100,730 
 
 Net Assets Per Share                    12     177.8p    178.6p    178.2p 
 
 

Consolidated Cash Flow Statement

For the six months ended 31 March 2020

 
                                    Six months ended                                Year ended 
                                                         31 Mar     31 Mar             30 Sept 
                                                           2020       2019                2019 
                                                        GBP'000    GBP'000             GBP'000 
 Cash Flows From Operating Activities 
 Operating loss                                         (1,819)   (13,830)            (14,105) 
 Development costs (written back) / written 
  off                                                      (63)     18,759              19,084 
 Deficit / (surplus) on revaluation of investment 
  properties                                              1,284    (5,270)             (5,996) 
 Profit on sale of investment property                    (168)          -                   - 
 
  Cash Flows From Operations Before Changes 
  In 
  Working Capital                                         (766)      (341)             (1,017) 
 Change in trade and other receivables                    (378)       (81)                (45) 
 Change in land, developments and trading 
  properties                                            (1,790)      (183)               (932) 
 Change in trade and other payables and 
  provisions                                                134        924                  93 
                                                       --------  ---------  ------------------ 
 
 Cash Flows (Used In) / Generated From Operations       (2,800)        319             (1,901) 
 
 Tax paid                                                     -       (66)                (88) 
 
 Cash Flows (Used In) / Generated From Operating 
  Activities                                            (2,800)        253             (1,989) 
 
 Cash Flows From Investing Activities 
 Additions to investment properties                       (925)    (3,954)             (7,531) 
 Proceeds from sale of investment properties              3,738      5,499               5,499 
 Finance income                                             120        144                 252 
 
 Cash Flows Generated From / (Used In) Investing 
  Activities                                              2,933      1,689             (1,780) 
 
 Cash Flows From Financing Activities 
 Purchase of own shares                                 (3,965)    (5,582)             (5,582) 
 
 Cash Flows Used In Financing Activities                (3,965)    (5,582)             (5,582) 
 
 Net decrease in cash and cash equivalents              (3,832)    (3,640)             (9,351) 
 Cash and cash equivalents at start of period            39,911     49,262              49,262 
 
 Cash and Cash Equivalents at End of Period              36,079     45,622              39,911 
                                                       ========  =========  ================== 
 
 

Notes to the Interim Results

   1.     General information 

The Conygar Investment Company PLC ("the Company") is incorporated in the United Kingdom and domiciled in England and Wales, is registered at Companies House under registration number 04907617 and listed on the AIM market of the London Stock Exchange.

The financial information set out in this report covers the six months to 31 March 2020, with comparative amounts shown for the six months to 31 March 2019 and the year to 30 September 2019, and includes the results and net assets of the Company and its subsidiaries, together referred to as the Group.

Further information about the Group and Company can be found on its website www.conygar.com.

   2.     Basis of Preparation 

The accounting policies used in preparing the condensed financial information are consistent with those of the annual financial statements for the year ended 30 September 2019 other than the mandatory adoption of new standards, revisions and interpretations that are applicable to accounting periods commencing on or after 1 October 2019, as detailed in the annual financial statements.

The condensed financial information for the six month period ended 31 March 2020 and the six month period ended 31 March 2019 has been reviewed but not audited and does not constitute full financial statements within the meaning of section 435 of the Companies Act 2006.

The financial information for the year ended 30 September 2019 does not constitute the Group's statutory accounts for that period but it is derived from those accounts. Statutory accounts for the year ended 30 September 2019 have been delivered to the Registrar of Companies. Rees Pollock, who were the Group's auditors as at 30 September 2019, reported on these accounts; their report was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006.

The board of directors approved the above results on 29 April 2020.

Copies of the interim report may be obtained from the Company Secretary, The Conygar Investment Company PLC, First Floor, Suite 3, 1 Duchess Street, London, W1W 6AN.

   3.      Segmental Information 

IFRS 8 "Operating Segments" requires the identification of the Group's operating segments which are defined as being discrete components of the Group's operations whose results are regularly reviewed by the Board of directors. The Group divides its business into the following segments:

   --    Investment properties held for capital appreciation, rental income or both; and, 

-- Development properties, which include sites, developments in the course of construction and sites available for sale.

Balance Sheet

 
                                        31 Mar                                          31 Mar 
                                            20                                              19 
                      Investment   Development               Group    Investment   Development               Group 
                      Properties    Properties     Other     Total    Properties    Properties     Other     Total 
                         GBP'000       GBP'000   GBP'000   GBP'000       GBP'000       GBP'000   GBP'000   GBP'000 
 Investment properties    16,400             -         -    16,400        17,185             -         -    17,185 
 Development & 
 trading properties            -        41,934         -    41,934             -        39,609         -    39,609 
                         -------  ------------  --------  --------  ------------  ------------  --------  -------- 
                          16,400        41,934         -    58,334        17,185        39,609         -    56,794 
 
 Other assets              1,196           265    36,536    37,997           972            29    46,127    47,128 
                         -------  ------------  --------  --------  ------------  ------------  --------  -------- 
 Total assets             17,596        42,199    36,536    96,331        18,157        39,638    46,127   103,922 
 Liabilities               (273)         (228)     (554)   (1,055)       (1,792)             -   (1,175)   (2,967) 
 Net assets               17,323        41,971    35,982    95,276        16,365        39,638    44,952   100,955 
                         =======  ============  ========  ========  ============  ============  ========  ======== 
 
 

Revenue

 
 
                                      Six months ended        Year ended 
                                          31 Mar    31 Mar       30 Sept 
                                            2020      2019          2019 
                                         GBP'000   GBP'000       GBP'000 
 
 Investment properties                       474       323           646 
 Development and trading properties          402       676         1,131 
                                        --------  --------  ------------ 
                                             876       999         1,777 
                                        ========  ========  ============ 
 
 
   4.   Finance Income 
 
 
                                     Six months ended               Year ended 
                                    31 Mar         31 Mar              30 Sept 
                                      2020           2019                 2019 
                                   GBP'000        GBP'000              GBP'000 
 
 Bank interest                         120            144                  252 
                             =============  =============  =================== 
 
 
 5. Dividends 
 
  No dividends were paid in the period ended 31 March 2020 (period 
  ended 31 March 2019: GBPnil; year ended 30 September 2019: GBPnil). 
 
 
   6.   Loss per Share 

Loss per share is calculated as the loss attributable to ordinary shareholders of the Company for the period ended 31 March 2020 of GBP1,489,000 (period ended 31 March 2019: loss of GBP13,747,000; year ended 30 September 2019: loss of GBP13,972,000) divided by the weighted average number of shares in issue throughout the period of 54,424,398 (31 March 2019: 57,201,182; 30 September 2019: 56,860,879). There are no diluting amounts in either the current or prior periods.

7. Investment Properties

 
                                                 31 Mar    31 Mar   30 Sept 
                                                   2020      2019      2019 
                                                GBP'000   GBP'000   GBP'000 
 
 At the start of the period                      21,429     3,570     3,570 
 Additions                                          904         -     3,617 
 Movement in profit share provision             (1,100)     1,250     1,150 
 Disposals                                      (3,549)         -         - 
 Revaluation movement                           (1,284)     5,270     5,996 
 Reclassification from investment properties 
 under construction                                   -    10,665    10,666 
 Reclassification to trading properties               -   (3,570)   (3,570) 
                                               --------  --------  -------- 
 At the end of the period                        16,400    17,185    21,429 
                                               ========  ========  ======== 
 

As at 31 March 2020, Cross Hands is the Group's only investment property which was valued by Knight Frank LLP in their capacity as external valuers. The valuation was prepared on a fixed fee basis, independent of the property value and was undertaken in accordance with the RICS Valuation - Global Standards 2018 on the basis of fair value, supported by reference to market evidence of transaction prices for similar properties. It assumes a willing buyer and a willing seller in an arm's length transaction and reflects usual deductions in respect of purchaser's costs and SDLT as applicable at the valuation date. The independent valuer makes various assumptions including future rental income, anticipated void costs and the appropriate discount rate or yield.

The valuers have confirmed that the valuation as at 31 March 2020, in accordance with industry practice, is subject to a material uncertainty clause as follows:

The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organisation as a "Global Pandemic" on the 11 March 2020, has impacted global financial markets. Travel restrictions have been implemented by many countries. Market activity is being impacted in many sectors. As at the valuation date, we consider that we can attach less weight to previous market evidence for comparison purposes, to inform opinions of value. Indeed, the current response to COVID-19 means that we are faced with an unprecedented set of circumstances on which to base a judgement. Our valuation is therefore reported on the basis of 'material valuation uncertainty' as set out in VPS 3 and VPGA 10 of the RICS Valuation - Global Standards. Consequently, less certainty - and a higher degree of caution - should be attached to our valuation than would normally be the case. Given the unknown future impact that COVID-19 might have on the real estate market, we recommend that you keep the revaluation under frequent review.

The fair value of Cross Hands has been determined using an income capitalisation technique whereby contracted rent and market rental values are capitalised with a market capitalisation rate. This technique is consistent with the principles in IFRS 13 and uses significant unobservable inputs, such that the fair value has been classified in all periods as Level 3 in the fair value hierarchy as defined in IFRS 13. For Cross Hands, the key unobservable input is the net initial yield which has been estimated for the individual units at between 5.25% and 9.00%. The principle sensitivity of measurement to variations in the significant unobservable outputs is that decreases in net initial yield will increase the fair value.

Ashby-de-la-Zouch was revalued as at 30 September 2019 to reflect the forward sale as confirmed by the completion of the sale in October 2019.

The historical cost of the Group's investment properties as at 31 March 2020 was GBP12,863,000 (31 March 2019: GBP10,665,000; 30 September 2019: GBP14,283,000).

The Group's revenue for the period ended 31 March 2020 includes GBP856,000 derived from properties leased out under operating leases (period ended 31 March 2019: GBP999,000; year ended 30 September 2019: GBP1,315,000).

During the year ended 30 September 2019, the Group reclassified all of its investment properties under construction as either investment properties or development and trading properties.

   8.     Development and Trading Properties 
 
                                                 31 Mar     31 Mar    30 Sept 
                                                   2020       2019       2019 
                                                GBP'000    GBP'000    GBP'000 
 
 At the start of the period                      39,999     31,931     31,931 
 Additions                                        1,872        183        933 
 Reclassification from investment properties          -      3,570      3,570 
 Reclassification from investment properties 
  under construction                                  -     22,389     22,649 
 Development costs written back / (written 
  off)                                               63   (18,464)   (19,084) 
                                               --------  ---------  --------- 
 At the end of the period                        41,934     39,609     39,999 
                                               ========  =========  ========= 
 

The net realisable value of properties held for development requires an assessment of the underlying assets using property appraisal techniques and other valuation methods. Such estimates are inherently subjective as they are made on assumptions which may not prove to be accurate and which can only be determined in a sales transaction.

During the year ended 30 September 2019, the Group wrote down the carrying value of Haverfordwest by GBP18.6 million as a result of the weakening of the housing market, the rising costs of construction and the fact that our retail development at this site is not currently able to commence.

Further details on progress for each of the development and trading properties is set out in the Chairman's and Chief Executive's Statement.

   9.     Trade and other receivables 
 
                                    31 Mar    31 Mar   30 Sept 
                                      2020      2019      2019 
                                   GBP'000   GBP'000   GBP'000 
 
 Trade receivables                     252       250        74 
 Other receivables                     609       240       494 
 Prepayments and accrued income        987     1,016       902 
                                     1,848     1,506     1,470 
                                  ========  ========  ======== 
 

The directors consider that the carrying amount of trade and other receivables approximates to their fair value due to the short term nature of these financial assets.

   10.     Trade and other payables 
 
                                       31 Mar    31 Mar   30 Sept 
                                         2020      2019      2019 
                                      GBP'000   GBP'000   GBP'000 
 
 Social security and payroll taxes         68        66        65 
 Trade payables                           243     1,061       164 
 Accruals and deferred income             694       485       559 
                                        1,005     1,612       788 
                                     ========  ========  ======== 
 

The directors consider that the carrying amount of trade and other payables approximates to their fair value due to the short term period of payment.

   11.     Provision for liabilities and charges 
 
                                             31 Mar    31 Mar   30 Sept 
                                               2020      2019      2019 
                                            GBP'000   GBP'000   GBP'000 
 
 Amounts payable from development profit         50     1,250     1,150 
                                           ========  ========  ======== 
 

The Group is party to a profit share agreement for one of its properties which would become payable on the earliest of the disposal of the asset or the date upon which the open market value is agreed between the parties following completion of the development.

12. Net Assets per share

Net assets per share is calculated as the net assets of the Group divided by the number of shares in issue. There are no diluting or adjusting amounts for the reported periods.

 
 
                                   31 Mar       31 Mar      30 Sept 
                                     2020         2019         2019 
                                  GBP'000      GBP'000      GBP'000 
 
 Net assets                        95,276      100,955      100,730 
 
                                      No.          No.          No. 
 Shares in issue               53,591,590   56,522,435   56,522,435 
                              ===========  ===========  =========== 
 
 Net assets per share              177.8p       178.6p       178.2p 
                              ===========  ===========  =========== 
 
 
 
 

13. Key Management Compensation

Key management personnel have the authority and responsibility for planning, directing and controlling the activities of the Group and are considered to be the directors of the Company. Amounts paid in respect of key management compensation, including amounts payable of GBP0.3 million to Mr R H McCaskill in advance of his stepping down on 6 April 2020, were as follows:

 
                              Six months ended            Year ended 
                                          31 Mar    31 Mar   30 Sept 
                                            2020      2019      2019 
                                         GBP'000   GBP'000   GBP'000 
 
 Short term employee benefits                881       573     1,145 
                                       =========  ========  ======== 
 
 

Independent Review Report to The Conygar Investment Company PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six month period ended 31 March 2020 which comprises the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated balance sheet, the consolidated cash flow statement and the related notes. 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 the terms of our engagement to assist the Company in meeting the requirements of the AIM Rules ("the AIM Rules"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this 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 reached.

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 AIM Rules.

As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with IFRS 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 Group 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 enquiries, 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 month period ended 31 March 2020 is not prepared, in all material aspects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules.

Saffery Champness LLP

Chartered Accountants and Registered Auditors

London

29 April 2020

Notes:

(a) The maintenance and integrity of The Conygar Investment Company PLC website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim report since it was initially presented on the website.

(b) Legislation in the United Kingdom governing the presentation and dissemination of financial information may differ from legislation in other jurisdictions.

The directors of Conygar accept responsibility for the information contained in this announcement. To the best knowledge and belief of the directors of Conygar (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR EKLFLBZLXBBQ

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