We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Mwb Wertpapier | TG:MWB | Tradegate | Ordinary Share |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
Hot Features
Premium
RNS Number:3213Q
Marylebone Warwick Balfour Grp PLC
30 September 2003
FOR IMMEDIATE RELEASE
30th September 2003
MARYLEBONE WARWICK BALFOUR GROUP PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED
30th JUNE 2003
Contact: Marylebone Warwick Balfour Group Plc Tel: 020 7706 2121
Richard Balfour-Lynn, Chief Executive
Andrew Blurton, Joint Finance Director
Baron Phillips Associates Tel: 020 7920 3150
Baron Phillips
CHAIRMAN'S STATEMENT
Introduction
During the year we have focused our efforts on restructuring our businesses and
funding, to ensure the Group is capable of withstanding the current
uncertainties while being able to take advantage of the upturn when it occurs.
This consolidation has been against a background of a poor economy and uncertain
geopolitical environment and as a result our principal operating activities have
continued to be adversely affected.
Our restructuring included refinancing bank facilities in all our major
operating businesses and #150m of disposals, including the sale of our fund
management division. At Malmaison, we acquired the outstanding 50% interest in
the brand and opened a new 189 bed hotel in Birmingham. We also completed and
opened two new luxury hotels in London and Glasgow, managed for the Group by
Marriott International and Radisson respectively, as well as completing the
final phase of The Howard refurbishment. At MWB Business Exchange, our serviced
office business, we have acquired the interests of our principal minority
shareholder, taking our stake to 85%. We also demerged the UK and European
operations into separate companies, subsequently closing the European business
after the year end. We anticipate this closure will result in annual cost
savings to the Group of approximately #9m a year.
During the period we have returned #14m cash to shareholders through a
substantial share buy-back programme, resulting from a total of 31.2m shares
being purchased during the year at a significant discount to their underlying
value.
Results
Group results for the year ended 30th June 2003 have been significantly affected
by restructuring costs and property write-downs. Losses attributable to
shareholders of #61.4m comprised #30.4m of net exceptional items and #31.0m of
ordinary losses after finance costs. Against this, most of our hotel
developments are now complete and this has been reflected in positive
revaluation surpluses this year, the majority being in the hotel division,
totalling #31m. Therefore, equity shareholders' funds have been reduced by
#30.3m, as a result of revaluation surpluses of #31m offsetting losses of #61.3m.
In addition, the cost of share buy-backs of #14m, less other equity gains of
#2.1m, gives a further reduction in equity shareholders' funds of #11.9m. This
gives a total reduction of #42.2m in shareholders' funds for the year, reducing
them from #144.5m last year to #102.3m at this year end. This translates into a
reduction in shareholders' funds per share of 11%, down from 104p last year to
93p per share at 30th June 2003.
It is important to understand fully the composition of these results and I have
therefore commented upon them in some detail below.
Our results this year not only incorporate the significant loss making
activities of our European serviced office business which was closed shortly
after the year end, but also include the cost of termination of onerous leases
associated with the European business, as well as significant write-downs of the
UK Business Centre property assets. Therefore the losses for the year to 30th
June 2003 are not representative of the ongoing business, and indeed we expect
the Business Centre division to have returned to cash break even after interest
and loan amortisation, during the second half of 2004.
Financing
We continue to finance each division of the Group with project specific bank
loans. In addition to this, the Board restructured the Group's Unsecured Loan
Stock in November 2002, so that it is now no longer convertible into ordinary
shares and is instead redeemable at the Company's option between June 2005 and
June 2006. Also, shortly after the year end, a further #15m of Unsecured Loan
Stock was issued at par on the same terms as the existing stock. This
restructuring and further issue provides increased flexibility to the Group.
During the second six months of the year, we supplemented the Group's funding by
arranging an additional #40m mezzanine loan facility from GMAC. Part of this
facility has been drawn to fund the buy-out of the principal minority interest
in Business Exchange, the exit from the European operations of Business
Exchange, and to repay certain previous group debt. I have commented on these
developments in further detail in this statement. The remainder of the facility
provides the Group with additional working capital, flexibility and protection
against downside risk from any further deterioration in the UK economy.
Business Centres
Results at our serviced offices division MWB Business Exchange have been
adversely affected by softer demand in the UK and very weak European economies.
This has affected both the profitability and resultant capital values of our
business centre interests. At the EBITDA level, the performance of our UK
centres showed a positive #7.5m compared to #9.6m last year, while Europe
produced negative EBITDA of #8.2m against negative EBITDA of #8.7m last year. In
addition, we realised a surplus of #2.1m this year on disposal of four of our
smaller UK Business Centres, resulting in total EBITDA this year of #1.4m
against #0.9m last year.
Over the past few months, we have restructured our serviced office business.
Shortly before the year end we completed the acquisition of DLJ Real Estate
Capital Partners' near 20% equity holding and its #23m preference share and loan
stock interest in Business Exchange, for an initial consideration of #16m. This
takes our holding to 85% of the equity of Business Exchange and the majority of
its preference share capital.
Shareholders will also be aware that on 1st July 2003 we demerged our serviced
office operations into separate UK and European divisions, and since the year
end we have closed our European operations. The value of the UK operations in
our accounts reflects the external valuation by DTZ Debenham Tie Leung Limited
of the property assets at that time, which was substantially lower than its
previous book value.
The accounts for the year ended 30th June 2003 include provision for Business
Exchange's remaining obligations under its operating and finance leases in
Europe. These provisions mean that the cessation of operations in Europe should
no longer impact on the Group Balance Sheet, providing downside protection and
further enhancing the future value of the business.
Annual turnover of the combined UK and European operations was #2.2m lower this
year at #75.9m, of which #63.5m related to the UK.
Losses in Business Exchange this year comprise #11.1m of operational losses and
#47.3m of exceptional property write-downs and provisions, giving a total
pre-tax loss of #58.4m. These losses have eliminated the remaining minority
interests in Business Exchange, and the resultant loss has therefore been
charged directly to equity shareholders' funds.
At the year end, our 10,000 available workstations in the UK achieved occupancy
levels of 76%. This mirrors the level that we achieved throughout the year, and
is a useful improvement from the figure of 68% for the UK at the previous year
end. This produced annual revenue per available work station ("REVPAW") of
#6,044 for our UK operations against #5,320 for the previous year, and revenue
per occupied work station ("REVPOW") of #7,907, slightly up on last year's
#7,807.
While it is difficult to give a clear indication of future performance, the
first two months of the new financial year have been consistent with these
levels of occupancy in our 35 UK centres. Generally, we are looking to increase
prices and occupancy in the UK now that the market has stabilised. This, coupled
with our rationalised business, improved management, reduction in central
overhead and operating costs, and a generally more focused strategy for the UK
business, augers well for the future of our UK serviced office business.
Hotels
Our hotels division, comprising the Malmaison boutique lifestyle group, The
Howard, the Park Lane Marriott International and the Radisson Glasgow, have all
endured difficult trading conditions, although we consider the situation has now
largely stabilised.
The hotels outside the Malmaison group are all managed under 20 year Operating
and Management Agreements with guaranteed minimum income arrangements, providing
certainty of operating profit in the years ahead. These increase from #8m in the
year ending 31st December 2003, to #10m the following year, and #11m the year
thereafter. These guaranteed minimum levels, accompanied by the stabilisation
and underpinning of our hotels by their experienced management teams, should
assist in driving revenue levels in the years ahead.
All of our hotels, with the exception of the Radisson Glasgow, produced positive
EBITDA returns this year, although after interest they produced a loss for the
year. In the case of The Howard, we will be drawing #1m from the minimum income
guarantee provided by Raffles. After interest and depreciation totalling #4.2m,
the Howard produced a loss before tax this year of #1.3m after taking account of
the guarantee payment. As we expected, both the Park Lane and Radisson Glasgow
hotels which opened during the year, made post interest losses, amounting to
#2.1m and #2.8m respectively. However, it will be easier to judge their
performance in 12 months' time, once they have both completed a full year's
trading.
Malmaison, our lifestyle hotel group, produced positive EBITDA of #6.8m from
ordinary activities, slightly up on last year's #6.6m. As I mentioned in the
interim results, we have taken a #7m charge for terminating Radisson's long term
management contract at Malmaison, thus bringing this important division within
our direct control. At the same time, we acquired their 50% interest in the
brand, and this is now wholly owned within the Group. The combination of EBITDA
of #6.8m, the cost of buying out the management contract, plus interest and
depreciation, resulted in a pre-tax loss of #10.5m. On the balance sheet, there
was an unrealised valuation surplus of #19.7m on our Malmaison hotels this year,
reflecting improved property values and the underlying value of the brand.
In October 2002, we opened a new 189 bed Malmaison in Birmingham, close to the
city centre, taking the group's number of rooms to 745. Overall total occupancy
levels are slightly lower at 71% for the second six months, down from 73% in the
first half, while average room rates have remained stable at #90.
We expect an improved performance from Malmaison in the current year, as it will
be unencumbered by the above one-off items and enhanced by the opening of
Charterhouse Square at the end of 2003.
We continue our roll out programme for Malmaison. In addition to Birmingham and
Charterhouse Square, we have exchanged agreements for lease on an exciting 87
room Malmaison being developed in the centre of Oxford, and we expect to take
delivery in late 2005.
Liberty
In common with other leading central London retailers, Liberty, our department
store business, has suffered from the impact of the Gulf War, uncertain consumer
spending, the London congestion charge and fewer tourists. During the first half
of the year the store group was making solid progress with sales up by around
10%; however, much of this advance was lost in the second half as shoppers
stayed away from Central London.
At the same time, Liberty undertook a major reorganisation and overhaul led by
Iain Renwick, its new Chief Executive who joined the Group in November 2002.
During the second half of the year, Iain has recruited a number of key senior
managers from other major retailers, who are focusing on improving Liberty's
buying and merchandising operations. The impact of this dynamic and highly
creative team will be felt during the current year as the full effect of their
efforts begins to show through to the trading operations of this division. The
first elements of Liberty's own branded product has been developed and is now
arriving in store. This offers significant bottom line growth potential, both
within the store and more widely through other distribution opportunities.
As a result of the factors outlined above, turnover for the year at Liberty was
flat at #48m, although it produced positive EBITDA of #0.6m for the year ended
30th June 2003, up from #0.3m in the previous year. This translated into a
pre-tax loss of #4.8m for the year to 30th June 2003, similar to the
pre-exceptional pre-tax loss last year of #4.2m.
Within the store itself, significant improvements have been made to the product
offer, merchandising and the quality of store personnel. Whilst there is further
work still to be done, these improvements should underpin Liberty's future
potential. In addition, the refurbished Regent Street building has been complete
for some 12 months and has established itself as a quality offering in a new and
vibrant environment. Significant changes are also taking place in the Tudor part
of the store and we expect these changes to produce positive returns in the
build up to Christmas this year.
Project Management and Asset Management
Our two remaining divisions, Project Management and Asset Management, are now
significantly smaller, as properties have been sold and developments completed.
Currently our Project Management division is focussed primarily on construction
of the residential and hotel component in the third and final phase of West
India Quay, which has an end cost of some #135m.
This scheme comprises a 301 room five star hotel, serviced apartments and
apartments for sale. Pre-sales of the apartments total 102 out of 158, amounting
to more than #55m in sales value. Marriott International has signed a 20 year
Operating and Management Agreement for the hotel and serviced apartments,
that provides minimum guaranteed income of #4.1m, rising to #5.6m by the fourth
year. We expect completion of the project towards the end of 2004.
Our other docklands project at Royal Victoria Docks was sold during the first
half of the year and produced a pre-tax profit of #14.7m. This completed the
sale of all our interests at Royal Victoria Docks, which has been highly
profitable for the Group.
Our Asset Management division has been responsible for approximately half of the
#150m of disposals made by the Group that I referred to above. Marble Arch Tower
now remains the principal asset within our Asset Management division. The
building, located opposite Marble Arch itself, generated #6.3m of total income
in the year to June 2003. During the course of the second half of the year, a
further 14,000 sq ft of space was let in the 164,000 sq ft tower at rents of up
to #57.50 a sq ft. As a result Marble Arch Tower, which includes 23,000 sq ft of
retail and a 45,000 sq ft multiplex cinema, now has vacancy levels of only 5%,
most of which is under offer.
Our other development opportunity is at Old Bailey where we previously secured
consent for a 72,500 sq ft redevelopment on the site of our existing 56,000 sq
ft office building. We are currently in the final stages of securing a new long
lease for this property which should offer some interesting alternatives for the
Group in the future.
Fund Management
As shareholders are aware we sold our successful leisure property fund
management business for #30.3m, a price considerably in excess of market
expectations, generating a pre-tax profit of #15m. These funds were used to pay
down Group debt and represent an exceptional return on this division that we
formed in 1996 and expanded rapidly thereafter.
Conclusion
The economic and business environment in which the Group has operated during the
12 months ended June 2003 has been significantly tougher than we could have
envisaged at the time of our Group restructuring in March 2002. This inevitably
means that our realisation programme will now take longer to achieve than was
originally anticipated. Nevertheless, the Board is committed to creating value
for shareholders and we believe we have made reasonable progress to date.
The decisive action taken at our European Business Centre operations has ensured
their loss making activities have been closed and the costs associated with that
restructuring have been taken in this year. Looking forward, we believe our
Business Exchange division will begin to trade out of the problems that it has
suffered over the last two years.
At Liberty, we now have a strong senior management team in place and we firmly
expect them to produce real improvements in that division's operations in the
years ahead.
In our Malmaison division we have strengthened the management team during the
year, brought on our Birmingham hotel and ensured a pipeline of new hotels. This
division has performed well against its sector peer group and this has been
demonstrated by the increased property values ascribed to our hotels at this
year end.
Our three main operational businesses of hotels, retail and serviced offices,
have been through a tough trading period. Despite this, we have managed the
process in a manner that ensures the Group is now financially and structurally
better placed than at the beginning of the year. Each division is well placed to
take advantage of opportunities and potential upsides in the market.
During this year, with all the prevailing political and economic uncertainties,
we have been able to restructure the Group's operations and finances, enabling
it to look forward with some degree of optimism from a solid asset base. The
nature of the Group's operations means that we are geared to improvements in the
overall economic climate and until this becomes clearer, the Board is continuing
to adopt a cautious and prudent approach.
Brian Myerson
CHAIRMAN
* September 2003
ACCOUNTS REVIEW
for the year ended 30th June 2003
---------------------------------
INTRODUCTION
The Chairman's Statement on pages 1 to 8 provides information on the Group's
operations and the Board's expectations for the future. This Accounts Review
covers in greater depth the more significant features of the accounts for the
year ended 30th June 2003.
EQUITY SHAREHOLDERS' FUNDS
During the year ended 30th June 2002 there has been a reduction in shareholders'
funds from #144.5m at 30th June 2002 to #102.3m at this year end. One third of
this arose from share buy-backs which, whilst reducing shareholders' funds, have
had a positive impact on equity shareholders' funds per share. As a result,
equity shareholders funds per share have fallen during the year by the much
smaller amount of 11p to 93p per share. This is summarised as follows:-
Year
6 months 6 months Year ended
ended ended ended 30th June
31st December 30th June 30th June 2003
2002 2003 2003 pence per
#'000 #'000 #'000 share
Equity shareholders'
funds at beginning of
period 144,493 137,718 144,493 104p
Purchase of own shares
for cancellation (9,192) (4,838) (14,030) 15p
Revaluation surplus on
Group property
portfolio - 31,034 31,034 28p
Retained profit/(loss)
for period before
exceptional items 2,501 (33,489) (30,988) (28p)
Exceptional items - (30,362) (30,362) (28p)
Other equity movements (84) 2,278 2,194 2p
------- ------- ------- ------
Equity shareholders'
funds at end of the
period 137,718 102,341 102,341 93p
======= ======= ======= ======
NET ASSET VALUE
The net assets of the Group are financed by equity shareholders' funds, equity
minority interests and preference share minority interests. During the year,
much of the preference share minority interests in the Business Exchange
division were purchased in by the Company. Accordingly, this element of funding
is greatly reduced from the position at the previous year end and is not
expected to be a significant element of Group funding in future years. At 30th
June 2003, and at the previous year end, these sources of finance amounted to
the following:-
30th June 30th June
2003 2002
#'000 #'000
Equity shareholders' funds 102,341 144,493
Equity minority interests 24,641 19,687
Preference share minority interests 1,209 21,138
------- -------
Net asset value at 30th June 2003 128,191 185,318
======= =======
Analysis of net assets at 30th June 2003
The analysis of net assets across of the Group's operations at 30th June 2003,
and at the previous year end is as follows:-
30th June 30th June
2003 2002
#'000 #'000
MWB Business Exchange (14,840) 21,953
Hotels 91,812 53,844
Fund management - 11,886
Asset management 14,412 40,021
Liberty 54,537 57,014
Project management 4,675 8,780
Cash holdings and other assets, less loan stock (22,405) (8,180)
------- -------
128,191 185,318
======= =======
REVIEW OF BALANCE SHEET
Portfolio analysis by division
The Group holds its direct property interests principally as tangible fixed
assets, with smaller amounts held as developments in progress and properties
held for resale. In addition, the Group held certain indirect property and
related interests through investments in its joint ventures.
As disclosed in the consolidated balance sheet at 30th June 2003:-
30th June 30th June
2002 2002
#'000 #'000
Tangible fixed assets 605,062 594,905
Developments in progress 34,985 46,549
Properties held for resale 3,467 -
Investment in joint ventures - 38,773
------- -------
Total property interests at 30th June 2003 643,514 680,227
======= =======
The above interests are analysed as follows:-
Percentage
30th June of 30th June 30th June
2003 2003 2002
Total Total Total
MWB Business Exchange
---------------------
Total MWB Business Exchange
portfolio 84,804 13 113,865
------- ------ -------
Hotels
------
140 Park Lane, London 83,300 13 82,956
Howard Hotel, London 62,500 10 50,775
Argyle Street, Glasgow 43,250 7 28,500
Seven Malmaison hotels 146,234 23 103,175
------- ------ -------
Total hotel portfolio 335,284 53 265,406
------- ------ -------
Fund management
---------------
MWB Leisure Fund I - - 18,021
MWB Leisure Fund II Pool A - - 13,518
MWB Leisure Fund II Pool B - - 7,234
------- ------ -------
Total fund management
portfolio - - 38,773
------- ------ -------
Asset management
----------------
Marble Arch Tower, London 65,000 10 70,000
Cannon Centre, London - - 53,500
Commercial & industrial
portfolio properties 4,938 1 28,796
------- ------ -------
Total asset management
portfolio 69,938 11 152,296
------- ------ -------
Liberty
-------
Liberty store 47,425 7 46,490
Offices 28,334 4 27,760
Other properties and
fittings 3,142 - 3,594
------- ------ -------
Total Liberty portfolio 78,901 11 77,844
------- ------ -------
Project management
------------------
West India Quay, London 74,587 12 26,748
Royal Victoria Docks - - 5,295
------- ------ -------
Total project management
portfolio 74,587 12 32,043
------- ------ -------
Total property interests at 30th
June 2003 643,514 100 680,227
======= ====== =======
Net debt
The Group's loans, borrowings and cash are included in the consolidated balance
sheet at 30th June 2003 as follows:-
30th June 30th June
2003 2002
#'000 #'000
Total loans and overdrafts 466,903 458,443
Hire purchase and leasing contracts 18,252 25,060
------- -------
Total loans 485,155 483,503
Less cash (52,359) (45,759)
------- -------
Total net debt 432,796 437,744
======= =======
The Group's total loan and borrowing position at 30th June 2003, and at the
previous year end had the following maturity profiles:-
30th June 30th June
2003 2002
#'000 #'000
Repayable:
Within one year or on demand 24,235 39,686
Between one and two years 109,370 42,823
Between two and five years 280,217 297,766
After more than five years 71,333 103,228
------- -------
Total loans 485,155 483,503
Less cash (52,359) (45,759)
------- -------
Total net debt 432,796 437,744
======= =======
Gearing
Gearing of the Group at the year end, being net debt as above of #433m, as a
percentage of the net assets of the Group of #128m, amounted to 338%. The
increase from the figure of 236% at the June 2002 year end principally reflects
the debt drawn down for the Group's development programme and the reduction in
net asset value from property write-downs in the Business Exchange division and
share buy-backs during the year.
REVIEW OF EARNINGS
Earnings before interest, taxation, depreciation and amortisation ("EBITDA") of
the Group
The Board's prime measure of return used to monitor results is the level of
earnings before interest, taxation, depreciation and amortisation, or EBITDA.
The EBITDA of the Group for the year ended 30th June 2003, with comparatives for
the previous year, was as follows:-
Year ended Year ended
30th June 30th June
2003 2002
#'000 #'000
MWB Business Exchange 1,387 906
Hotels 3,844 8,748
Fund management 18,615 4,383
Asset management 6,199 11,622
Liberty 574 358
Project management 14,727 5,127
Cash holdings and other assets (11,691) (16,898)
------ ------
Total EBITDA of the Group 33,655 14,246
====== ======
Exceptional items
For the year ended 30th June 2003, earnings before interest and tax ("EBIT") and
the profit/(loss) before taxation of the Group's business centres, hotels, fund
management and project management divisions, were materially affected by
positive and negative exceptional items. Further details of these exceptional
items are included in note 2 to the accounts. After incorporating these
exceptional items totalling a net negative #26.9m, the Group produced negative
EBIT of #31.8m and a loss before taxation of #63.9m for the year ended 30th June
2003.
For the year ended 30th June 2002, the EBIT and the profit/(loss) before
taxation for three of the Group's segments, namely business centres, Liberty and
the cash holdings and other assets, were materially affected by exceptional
items. After incorporating these exceptional items totalling #76.5m, the Group
produced negative EBIT of #77.8m and a loss before taxation of #109.5m for the
year ended 30th June 2002.
These results are summarised below:-
Summary of earnings
Profit/(loss)
on ordinary
Group activities
Year ended 30th June turnover EBITDA EBIT before tax
2003 #'000 #'000 #'000 #'000
MWB Business Exchange
Operating results 75,867 1,387 (6,459) (11,114)
Property write-downs and
other exceptional
items - - (47,279) (47,279)
Hotels
Operating income 62,214 12,538 7,756 (7,640)
Buy-out of Malmaison
management contract - (7,000) (7,000) (7,000)
Pre-opening costs - (1,694) (1,694) (1,694)
Malmaison property
write-down - - (211) (211)
Fund management
Operating income 2,406 3,661 3,661 2,725
Profit on disposal of fund
management division - 14,954 14,954 14,954
Asset management 11,100 6,199 5,713 186
Liberty 48,281 574 (2,160) (4,786)
Project management 23,214 14,727 14,727 14,877
Cash holdings and other
assets, less loan stock
and head office
administration 4,210 (11,691) (13,843) (16,906)
------- ------ ------ ------
227,292 33,655 (31,835) (63,888)
======= ====== ====== ======
EBIT = Earnings before interest and tax
Profit/(loss)
on ordinary
Year ended 30th June Group activities
2002 turnover EBITDA EBIT before tax
#'000 #'000 #'000 #'000
MWB Business
Exchange 78,107 906 (56,937) (58,581)
Hotels 28,283 8,748 6,089 (4,289)
Fund management 2,466 4,383 3,283 2,815
Asset management 18,258 11,622 9,770 (95)
Liberty 48,387 358 (15,722) (15,609)
Project management 12,056 5,127 1,127 5,270
Cash holdings and 4,965 (16,898) (25,451) (39,001)
other assets ------- ------ ------ -------
192,522 14,246 (77,841) (109,490)
======= ====== ====== =======
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 30th June 2003
------------------------------------
Year ended 30th June 2003 Year ended 30th June 2002
Continuing operations Continuing operations
Before Exceptional Before Exceptional
exceptional items exceptional Items
items (Note 2) Total items (Note 2) Total
Notes #'000 #'000 #'000 #'000 #'000 #'000
----------------------------------------------------------------------------------------------------------
Turnover
Group and share
of joint
ventures 1 205,505 23,179 228,684 195,941 - 195,941
Less share of
joint venture
turnover 1 (1,392) - (1,392) (3,419) - (3,419)
----------------------------------------------------------------------------------------------------------
Group turnover 204,113 23,179 227,292 192,522 - 192,522
Cost of sales (195,510) (64,714) (260,224) (171,899) (59,293) (231,192)
----------------------------------------------------------------------------------------------------------
Gross profit/
(loss) 8,603 (41,535) (32,932) 20,623 (59,293) (38,670)
Administrative
expenses (18,237) - (18,237) (26,769) - (26,769)
----------------------------------------------------------------------------------------------------------
Group operating
loss (9,634) (41,535) (51,169) (6,146) (59,293) (65,439)
Share of
operating profit
of joint
ventures 1,273 - 1,273 2,112 - 2,112
Total operating
loss:
Group and share
of joint
ventures (8,361) (41,535) (49,896) (4,034) (59,293) (63,327)
Profit on
disposal of
investment
properties and
other fixed
assets 3 3,428 14,954 18,382 279 - 279
Amounts written
off investments - (321) (321) - (14,793) (14,793)
----------------------------------------------------------------------------------------------------------
Loss on ordinary
activities before
interest (4,933) (26,902) (31,835) (3,755) (74,086) (77,841)
Net interest
payable and
similar items 4 (32,053) - (32,053) (30,151) (1,498) (31,649)
----------------------------------------------------------------------------------------------------------
Loss on ordinary
activities before
taxation 1 (36,986) (26,902) (63,888) (33,906) (75,584) (109,490)
Taxation credit
on loss on
ordinary
activities 401 - 401 2,318 - 2,318
----------------------------------------------------------------------------------------------------------
Loss on ordinary
activities after
taxation (36,585) (26,902) (63,487) (31,588) (75,584) (107,172)
Equity minority
interests 5 5,677 (2,528) 3,149 5,163 21,710 26,873
Non-equity
minority
interests (80) (932) (1,012) (1,167) - (1,167)
----------------------------------------------------------------------------------------------------------
Loss attributable
to ordinary
shareholders
retained for the
year (30,988) (30,362) (61,350) (27,592) (53,874) (81,466)
==========================================================================================================
Loss per share 6 (25.0p) (24.4p) (49.4p) (21.9p) (42.9p) (64.8p)
==========================================================================================================
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 30th June 2003
-----------------------------------------------------------
Year ended 30th June 2003 Year ended 30th June 2002
Continuing operations Continuing operations
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
#'000 #'000 #'000 #'000 #'000 #'000
----------------------------------------------------------------------------------------------------
Loss for the
financial year
Group (31,409) (30,362) (61,771) (28,135) (53,874) (82,009)
Joint ventures 421 - 421 543 - 543
----------------------------------------------------------------------------------------------------
Total loss for the
financial year (30,988) (30,362) (61,350) (27,592) (53,874) (81,466)
Net revaluation
surplus/(deficit) on
fixed assets charged
to revaluation
reserve 33,221 - 33,221 (58,281) - (58,281)
Share of net
revaluation deficit
on assets in joint
ventures charged to
revaluation
reserve - - - (305) - (305)
Currency translation
differences on
foreign currency net
investments (465) - (465) 84 - 84
Other movements 163 - 163 (60) - (60)
----------------------------------------------------------------------------------------------------
Total recognised
gains and losses for
the year 1,931 (30,362) (28,431) (86,154) (53,874) (140,028)
====================================================================================================
All recognised gains and losses are attributable to equity shareholders'
interests.
RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
for the year ended 30th June 2003
---------------------------------------------------------
2003 2002
#'000 #'000
------------------------------------------------------------------------------
Opening equity shareholders' funds 144,493 266,828
Profit/(loss) for the financial year
- before exceptional items (30,988) (27,592)
- exceptional items (30,362) (53,874)
Net revaluation surplus/(deficit) on fixed assets
credited/(charged) to revaluation reserve 31,034 (58,281)
Purchase of own shares for cancellation during the
period (14,030) -
Currency translation differences on foreign currency
net investments (465) 84
Share of net revaluation deficit on assets in joint
ventures charged to revaluation reserve - (305)
Issues of shares during the year - 17,693
Other movements 2,659 (60)
------------------------------------------------------------------------------
Closing equity shareholders' funds 102,341 144,493
==============================================================================
CONSOLIDATED BALANCE SHEET
at 30th June 2003
--------------------------
2003 2002
Notes #'000 #'000
------------------------------------------------------------------------------
Fixed assets
Intangible asset 7 18,200 18,200
Tangible assets 8 605,062 594,905
------------------------------------------------------------------------------
623,262 613,105
------------------------------------------------------------------------------
Investment in joint ventures
Share of gross assets - 46,802
Share of gross liabilities - (28,628)
------------------------------------------------------------------------------
Share of net assets - 18,174
Other investments - 701
------------------------------------------------------------------------------
- 18,875
------------------------------------------------------------------------------
623,262 631,980
------------------------------------------------------------------------------
Current assets
Developments in progress 34,985 46,549
Properties held for resale 3,467 -
Stocks 6,246 6,627
Debtors: amounts falling due
- after more than one year 5,771 5,547
- within one year 9 39,053 58,588
Cash 52,359 45,759
------------------------------------------------------------------------------
141,881 163,070
Creditors: amounts falling due within one 10 (126,809) (139,017)
year
------------------------------------------------------------------------------
Net current assets 15,072 24,053
------------------------------------------------------------------------------
Total assets less current liabilities 638,334 656,033
Creditors: amounts falling due after more
than one year 11 (472,329) (457,514)
Provisions for liabilities and charges 12 (37,814) (13,201)
------------------------------------------------------------------------------
Net assets 128,191 185,318
==============================================================================
Capital and reserves
Called up share capital 54,900 70,500
Share premium account 13 79,364 79,201
Capital redemption reserve 13 15,650 50
Revaluation reserve 13 80,347 56,516
Merger reserve 13 9,403 9,403
Other reserves 13 1,379 7,092
Profit and loss account 13 (138,702) (78,269)
------------------------------------------------------------------------------
Equity shareholders' funds 1 102,341 144,493
Equity minority interests 24,641 19,687
Non-equity minority interests 1,209 21,138
------------------------------------------------------------------------------
1 128,191 185,318
==============================================================================
Equity shareholders' funds per share 14 93p 104p
==============================================================================
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30th June 2003
---------------------------------
Notes 2003 2002
#'000 #'000
------------------------------------------------------------------------------
Net cash inflow/(outflow) from operating
activities 16 51,047 (2,405)
Returns on investments and servicing of
finance 17 (36,407) (36,559)
Corporation tax (paid)/refunded (166) 4,281
Capital expenditure, financial investment and
sales of fixed assets 18 9,920 (61,310)
Acquisitions and disposals 14,454 (3,701)
Equity dividends paid - (1,577)
------------------------------------------------------------------------------
Net cash inflow/(outflow) before financing 38,848 (101,271)
Financing 19 (32,248) 121,339
------------------------------------------------------------------------------
Increase in cash during the year 6,600 20,068
==============================================================================
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
for the year ended 30th June 2003
2003 2002
#'000 #'000
Increase in cash during the year 20 6,600 20,068
Net decrease/(increase) in hire purchase and
leasing contracts 20 6,808 (5,379)
Net increase in loans during the year 20 (8,460) (94,794)
------------------------------------------------------------------------------
Decrease/(Increase) in net debt during the
year 20 4,948 (80,105)
Opening net debt 20 (437,744) (357,639)
------------------------------------------------------------------------------
Closing net debt 20 (432,796) (437,744)
==============================================================================
NOTES TO THE ACCOUNTS
---------------------
1. DIVISIONAL ANALYSIS
-------------------
The turnover of the Group analysed over its six main divisions, is as follows:-
Year ended 30th June 2003 Year ended 30th June 2002
Continuing operations Continuing operations
Total Joint Group Total Joint Group
Turnover Turnover ventures Turnover turnover ventures turnover
#'000 #'000 #'000 #'000 #'000 #'000
-------------------------------------------------------------------------------------------------------
MWB Business Exchange 75,867 - 75,867 78,107 - 78,107
Hotels 62,251 (37) 62,214 28,937 (654) 28,283
Fund management 3,761 (1,355) 2,406 5,231 (2,765) 2,466
Asset management 11,100 - 11,100 18,258 - 18,258
------- ------ ------- ------- ------ -------
152,979 (1,392) 151,587 130,533 (3,419) 127,114
------- ------ ------- ------- ------ -------
Liberty 48,281 - 48,281 48,387 - 48,387
------- ------ ------- ------- ------ -------
Other 4,210 - 4,210 4,965 - 4,965
------- ------ ------- ------- ------ -------
Project management
Royal Victoria
Dock 23,179 - 23,179 9,464 - 9,464
West India Quay 35 - 35 200 - 200
Other - - - 2,392 - 2,392
------- ------ ------- ------- ------ -------
23,214 - 23,214 12,056 - 12,056
------- ------ ------- ------- ------ -------
228,684 (1,392) 227,292 195,941 (3,419) 192,522
======= ====== ======= ======= ====== =======
By geographical origin:
United Kingdom 210,719 (1,392) 209,327 178,833 (3,419) 175,414
Europe, excluding UK 12,411 - 12,411 10,470 - 10,470
Japan 5,554 - 5,554 6,526 - 6,526
USA - - - 112 - 112
------- ------- ------- ------- ------ -------
228,684 (1,392) 227,292 195,941 (3,419) 192,522
======= ======= ======= ======= ====== =======
Year ended 30th June 2003
Before
Earnings before interest, taxation, exceptional Exceptional Group
depreciation and amortisation items items EBITDA
("EBITDA") #'000 #'000 #'000
------------------------------------------------------------------------------
Loss on ordinary activities before (4,933) (26,902) (31,835)
interest for the year
Add back depreciation, amortisation and 16,005 49,485 65,490
write-downs for the year ------ ------- ------
Total EBITDA for the year 11,072 22,583 33,655
====== ======= ======
Year ended 30th June 2002
Before
Earnings before interest, taxation, exceptional Exceptional Group
depreciation and amortisation items items EBITDA
("EBITDA") #'000 #'000 #'000
------------------------------------------------------------------------------
Loss on ordinary activities before
interest for the year (3,755) (74,086) (77,841)
Add back depreciation, amortisation and
write-downs for the year 18,001 74,086 92,087
------ ------- -------
Total EBITDA for the year 14,246 - 14,246
====== ======= =======
Year ended Year ended
30th June 30th June
2003 2002
Analysis of EBITDA #'000 #'000
------------------------------------------------------------------------------
MWB Business Exchange
UK operating income 7,477 9,585
Sale of UK Centres 2,074 -
European operating income (8,164) (8,679)
Hotels
Operating income 12,538 8,748
Buyout of Malmaison management contract (7,000) -
Pre-opening costs (1,694) -
Fund management
Operating income 3,661 4,383
Profit on disposal of fund management division 14,954 -
Asset management 6,199 11,622
Liberty 574 358
Project management 14,727 5,127
Cash holdings and other assets, less loan stock and
head office administration (11,691) (16,898)
------- -------
Total EBITDA for the year 33,655 14,246
======= =======
Year ended 30th June 2003
Year ended
Before 30th June
Profit/(loss) on exceptional Exceptional 2002
ordinary activities items items Total Total
before taxation #'000 #'000 #'000 #'000
---------------------------------------------------------------------------------------
MWB Business Exchange
UK
Ordinary (3,173) - (3,173) 1,301
Exceptional (40,486) (40,486) (13,562)
Europe
Ordinary (7,941) - (7,941) (17,272)
Exceptional - (6,793) (6,793) (29,048)
Hotels
Operating income (7,640) - (7,640) (4,289)
Buyout of Malmaison
management contract - (7,000) (7,000) -
Pre-opening costs (1,694) - (1,694) -
Exceptional - (211) (211) -
Fund management
Operating income 2,725 - 2,725 2,815
Profit on disposal of
fund management
division - 14,954 14,954 -
Asset management
Operating income (360) - (360) (512)
Exceptional - - - 417
Sales of other
properties 546 - 546 -
Liberty
Ordinary (4,786) - (4,786) (4,232)
Exceptional - - - (11,377)
Cash holdings and other
assets
Ordinary 1,242 - 1,242 (4,132)
Exceptional - (1,992) (1,992) (20,515)
Project management
West India Quay 174 - 174 (467)
Royal Victoria Docks 77 14,626 14,703 3,611
Others - - - 2,126
------- ------- ------- -------
Profit before head
office administration
cost (20,830) (26,902) (47,732) (95,136)
Head office
administration cost (16,156) - (16,156) (14,354)
------- ------- ------- -------
Loss on ordinary
activities before
taxation (36,986) (26,902) (63,888) (109,490)
======= ======= ======= =======
By geographical origin:
United Kingdom (30,153) (20,106) (50,259) (70,305)
Europe, excluding
United Kingdom (7,938) (6,796) (14,734) (40,229)
Japan 1,105 - 1,105 1,077
USA - - - (33)
------- ------- ------- --------
(36,986) (26,902) (63,888) (109,490)
======= ======= ======= ========
Equity Equity Non-equity Net assets
shareholders' minority minority 30th June
Funds interests interests 2003
Net assets #'000 #'000 #'000 #'000
------------------------------------------------------------------------------
30th June 2003
--------------
MWB Business Exchange (14,840) - - (14,840)
Hotels 85,053 6,759 - 91,812
Fund management - - - -
Asset management 14,575 (167) 4 14,412
Liberty 36,231 17,101 1,205 54,537
Project management 3,876 799 - 4,675
Cash holdings, and
other assets, less
loan stock (22,554) 149 - (22,405)
------- ------ ----- -------
102,341 24,641 1,209 128,191
======= ====== ===== =======
Equity shareholders' 93p
funds per share =======
Equity Equity Non-equity Net assets
shareholders' minority minority 30th June
funds interests interests 2002
Net assets #'000 #'000 #'000 #'000
------------------------------------------------------------------------------
30th June 2002
--------------
MWB Business 8,748 (6,811) 20,016 21,953
Exchange
Hotels 48,123 5,721 - 53,844
Fund management 11,886 - - 11,886
Asset management 40,184 (167) 4 40,021
Liberty 37,533 18,363 1,118 57,014
Project management 6,658 2,122 - 8,780
Cash holdings, and (8,639) 459 - (8,180)
other assets, less
loan stock
------- ------ ------ -------
144,493 19,687 21,138 185,318
======= ====== ====== =======
Equity shareholders'
funds per share 104p
=======
2. EXCEPTIONAL ITEMS
-----------------
Year ended Year ended
30th June 30th June
2003 2002
#'000 #'000
Within gross profit
-------------------
Property write-downs
Fixed assets (15,115) (22,832)
Provisions (22,951) (12,312)
Fixtures and fittings written off (2,624) (10,269)
Other write-downs and provisions (4,172) (2,503)
Buy-out of Malmaison management contract (7,000) -
Goodwill written off on buy-out of minority interests in
Business Exchange and other subsidiaries (4,299) -
Profit on disposal of Royal Victoria Docks interest 14,626 -
Write-down of Liberty brand - (11,377)
------- -------
Total within gross profit (41,535) (59,293)
------- -------
Within profit on disposal of investment properties and other fixed
assets
------------------------------------------------------------------
Profit on the disposal of the Leisure Fund 14,954 -
------- -------
Within investments written off
--------------------------------
Write-off of investment in Clubhaus PLC - (8,169)
Write-down of investment in Illuminator Plc (321) (1,347)
Write-off of investment in MWB Konnect Limited - (5,277)
------- -------
Total within investments written off (321) (14,793)
------- -------
Within net interest payable - (1,498)
--------------------------- ------- -------
Total exceptional items in the profit and loss account (26,902) (75,584)
======= =======
Analysis of exceptional items
Year ended Year ended
30th June 30th June
2003 2002
#'000 #'000
Business Exchange (47,279) (44,109)
Hotels (7,211) -
Leisure Fund 14,954 -
Liberty - (11,377)
Project management 14,626 -
Other assets (1,992) (20,098)
------- -------
(26,902) (75,584)
======= =======
3. PROFIT ON DISPOSAL OF INVESTMENT PROPERTIES AND OTHER FIXED ASSETS
------------------------------------------------------------------
Year ended Year ended
30th June 2003 30th June 2002
#'000 #'000
------------------------------------------------------------------------------
Profit on disposal of fund management
division 14,954 -
Profit on disposal of investment properties 546 279
Profit on disposal of other fixed assets 2,882 -
------ ---
18,382 279
====== ===
4. NET INTEREST PAYABLE AND SIMILAR CHARGES
----------------------------------------
Year ended 30th June 2002
Year ended Before
30th June exceptional Exceptional
2003 items items Total
#'000 #'000 #'000 #'000
-------------------------------------------------------------------------------
Unsecured Loan Stock 2005/
2006 609 - - -
Convertible Unsecured
Loan Stock 2020,
including redemption
premium 2,621 1,610 - 1,610
Bank loans and
overdrafts 34,841 32,332 - 32,332
Finance leases and hire
purchase contracts 919 1,693 1,498 3,191
Bank charges, debt issue 1,614 3,017 - 3,017
and debt repayment costs ------ ------ ----- ------
40,604 38,652 1,498 40,150
Less interest capitalised
before tax relief (7,222) (7,632) - (7,632)
Less interest receivable (2,181) (2,438) - (2,438)
and similar income ------ ------ ----- ------
31,201 28,582 1,498 30,080
Share of joint ventures 852 1,569 - 1,569
------ ------ ----- ------
Total net interest
payable and similar
charges 32,053 30,151 1,498 31,649
====== ====== ===== ======
Interest payable is sourced from the Group's operating cash flows and from its
available bank facilities.
5. EQUITY MINORITY INTERESTS
-------------------------
Equity minority interests in the Group profit/(loss) on ordinary activities
after taxation arose in the following divisions of the Group:-
2003 2002
#'000 #'000
MWB Business Exchange Limited 5,686 21,016
Hotels - 140 Park Lane Limited 634 119
Liberty - Retail Stores plc 1,434 4,900
Project Management - Royal Victoria Dock (4,660) (1,281)
Project Management - West India Quay (37) 128
Leisure Box Limited 92 1,837
Others - 154
------ ------
3,149 26,873
====== ======
6. LOSS PER SHARE
--------------
The loss per share figures are calculated by dividing the loss for the year by
the weighted average number of shares in issue during the year, as follows:-
Before Before
exceptional Exceptional Total exceptional Exceptional
items items basic items items Total
2003 2003 2003 2002 2002 2002
#'000 #'000 #'000 #'000 #'000 #'000
Loss on
ordinary
activities
after
taxation
and
minority
interests (30,988) (30,362) (61,350) (27,592) (53,874) (81,466)
======= ======= ======= ======= ======= =======
'000 '000 '000 '000 '000 '000
Weighted
average
number of
ordinary
shares in
issue
during the
year 124,237 124,237 124,237 125,784 125,784 125,784
======= ======= ======= ======= ======= =======
Loss per
share (25.0p) (24.4p) (49.4p) (21.9p) (42.9p) (64.8p)
======= ======= ======= ======= ======= =======
7. INTANGIBLE ASSET
----------------
2003 2002
#'000 #'000
At 1st July 2002 18,200 29,577
Acquisition of Malmaison brand 11,522 -
------- -------
29,722 29,577
Less transfer to fixed assets (11,522) (11,377)
------- -------
At 30th June 2003 18,200 18,200
======= =======
An impairment review of the carrying value of the brand was undertaken by the
Directors at 30th June 2003, which confirmed the value of the Liberty brand at
#18.2m.
During the year ended 30th June 2003, the Group acquired the remaining 50%
interest in the Malmaison brand for a consideration of #5.2m. As a result of
this acquisition, the original interest previously held in joint ventures,
together with the new acquisition, were initially recorded as additions to
intangible fixed assets as the Group owns the entire Malmaison brand.
Royalty payments are now no longer made as the brand is wholly owned by the
Group. Accordingly, the projected net income generated by the Malmaison
properties has increased and the brand is effectively reflected in the value of
the properties concerned. In these circumstances, the cost of the Malmaison
brand was transferred from Intangible Fixed Assets to Tangible Fixed Assets
during the year ended 30th June 2003.
This has meant that the surplus arising on valuation of the Malmaison properties
has been reduced as it has been assessed by reference to the increased book
value of the properties concerned. For these reasons, the Directors have
overridden the requirements of FRS11 which would normally require any reduction
in value of a brand to be charged to the profit and loss account, in order to
ensure that the accounts show a true and fair view. The impact of this override
has been to reduce the surplus on revaluation of properties for the year ended
30th June 2003 by #11.5m and to reduce losses for the year by the same amount of
#11.5m.
8. TANGIBLE FIXED ASSETS
---------------------
Investment
-----properties----- -------Operational properties-------
Long Short Fixtures &
Freehold leasehold Freehold Leasehold leasehold equipment Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Cost or valuation
At 1st July 2002 117,074 170,128 115,668 74,152 85,509 50,955 613,486
Additions 17,323 10,024 40,555 3,512 1,151 6,226 78,791
Transfer from - - 7,367 4,155 - - 11,522
intangible assets
Reclassifications (114,047) - 108,423 - - 5,624 -
Write-offs - - - - - (5,764) (5,764)
Disposals (15,825) (53,500) (748) (6,650) (1,068) (710) (78,501)
Currency - - - - (336) 464 128
movements
Revaluation (2,025) 2,732 22,593 7,330 (17,314) (4,075) 9,241
-------- ------- ------- ------ ------- ------ -------
At 30th June 2003 2,500 129,384 293,858 82,499 67,942 52,720 628,903
-------- ------- ------- ------ ------- ------ -------
Depreciation
At 1st July 2002 - - - - (269) (18,312) (18,581)
Charge for the - (80) (2,604) (1,271) (4,377) (9,310) (17,642)
year
Reclassifications - - (566) - - 566 -
Currency - - - - - (288) (288)
movements
Disposals - - 10 30 45 580 665
Write-offs - - - - - 3,140 3,140
Revaluation - 80 3,160 1,241 4,384 - 8,865
-------- ------- ------- ------ ------- ------- -------
At 30th June 2003 - - - - (217) (23,624) (23,841)
-------- ------- ------- ------ ------- ------- -------
Net book value
At 30th June 2003 2,500 129,384 293,858 82,499 67,725 29,096 605,062
======== ======= ======= ====== ======= ======= =======
At 30th June 2002 117,074 170,128 115,668 74,152 85,240 32,643 594,905
======== ======= ======= ====== ======= ======= =======
Analysis of valuation deficit for the year
Included within table above:-
Profit and loss
account
-exceptional
items - 1,323 59 (1,406) (11,016) (4,075) (15,115)
Revaluation reserve
before minority
interests (2,025) 1,489 25,694 9,977 (1,914) - 33,221
------ ----- ------ ------ ------- ------ -------
Total included
within tangible
fixed assets (2,025) 2,812 25,753 8,571 (12,930) (4,075) 18,106
Included within
provisions (note 12)
- exceptional - - - (527) (22,424) - (22,951)
items ------ ----- ------ ----- ------- ------ -------
Total revaluation
deficit (2,025) 2,812 25,753 8,044 (35,354) (4,075) (4,845)
------ ----- ------ ----- ------- ------ -------
Valuation
---------
All of the Group's Investment and Operational properties were valued as at 30th
June 2003 by qualified professional valuers working for the company of DTZ
Debenham Tie Leung Limited, Chartered Surveyors, ("DTZ") acting in the capacity
of External Valuers. All such valuers are Chartered Surveyors, being members of
the Royal Institution of Chartered Surveyors ("RICS").
All properties were valued on the basis of Market Value. All valuations were
carried out in accordance with the RICS Appraisal and Valuation Standards 5th
Edition ("the Red Book"). The value of the properties reported by DTZ totalled
#607.5m. Most of these properties are included in the net book value of fixed
assets of #605.1m at 30th June 2003 and the balance are reflected in current
assets. The net book value is gross of provisions of #33.6m in respect of
onerous short term lease liabilities, which have been classified as provisions
in note 12. The valuation resulted in a deficit for the year of #4.8m, of which
a surplus of #18.1m is reflected in the table above and a deficit of #22.9m is
reflected within provisions.
Market Value is defined in the Red Book as the estimated amount for which a
property should exchange on the date of valuation between a willing buyer and a
willing seller in an arm's-length transaction after proper marketing wherein the
parties had each acted knowledgeably, prudently and without compulsion. The DTZ
valuation is not qualified by any reference to existing or alternative use and
implies the value to which a property will derive, having regard to its most
valuable use.
In valuing the business centres, leisure properties and hotels of the Group, DTZ
have had regard to the valuation of the properties fully equipped as operational
entities, and to their trading potential. The valuation therefore includes the
land and buildings; the trade fixtures, fittings, furniture, furnishings and
equipment; and the market's perception of the trading potential excluding
personal goodwill; together with an assumed ability to renew existing licences,
consents, certificates and permits. The value excludes consumables and stock in
trade.
The valuations of the business centres and leisure properties are based on
estimates of the annual maintainable earnings before interest, tax, depreciation
and amortisation ("EBITDA") for each property over a ten year cash flow period.
These estimates are based on the historic, current and budgeted trading
information provided by the Group to DTZ. At the end of the cash flow, DTZ apply
a multiplier to the then EBITDA to establish an exit value which reflects the
characteristics of the property at that date. The multiplier adopted for
leasehold properties reflects the term remaining before lease expiry, the
obligation contained within the lease and the possibility that the landlord
might seek repossession at expiry of the contracted term on statutory grounds.
The valuation by DTZ excludes any goodwill associated with the management of the
Company or any of its subsidiaries but recognises that the business centre and
hotel assets would probably be sold as trading entities. In addition, the
valuation represents individual property values and does not reflect any premium
value which may be attributable to an acquisition of the properties as a
portfolio.
DTZ applied a market discount rate to the cash flow to assess the net present
value of each property asset, which is in line with the method currently used by
the market for the valuation of this type of property. For those business
centres which are held as freehold or on a long leasehold basis, DTZ also
considered the value of the asset on a traditional basis by applying a market
rent and investment yield assuming the property was available for alternative
office use. Where this value was greater than the value attributable to the
EBITDA approach, DTZ adopted this higher figure within their valuation.
The majority of the Group's tangible fixed assets are located within the United
Kingdom. The historic cost of the Group's properties in the table above includes
capitalised interest at 30th June 2003 of #23.5m (2002: #16.3m). This includes
interest capitalised for properties prior to the date of the Group's acquisition
of the companies concerned.
9. DEBTORS : amounts falling due within one year
---------------------------------------------
2003 2002
#'000 #'000
Trade debtors 9,490 12,586
Amounts due from joint ventures - 1,761
Amounts due from other related parties 2,466 2,870
Other debtors
Other taxes and social security 1,960 5,403
Other debtors 4,534 16,630
Prepayments and accrued income 20,603 19,338
------ ------
39,053 58,588
====== ======
10. CREDITORS : amounts falling due within one year
-----------------------------------------------
2003 2002
#'000 #'000
Current portion of secured bank and other loans 16,497 32,569
Hire purchase and leasing contracts 7,738 7,117
Trade creditors 15,318 20,190
Amounts due to other related parties 125 14
Deferred consideration on purchase of properties 875 1,475
Other creditors
Corporation tax 4,037 4,378
Other taxes and social security 2,388 642
Other creditors 43,411 28,889
Accruals 35,070 40,290
Deferred income 1,350 3,453
------- -------
126,809 139,017
======= =======
11. CREDITORS: amounts falling due after more than one year
-------------------------------------------------------
2003 2002
#'000 #'000
7.5% Convertible Unsecured Loan Stock 2020 - 21,472
7.5% Unsecured Loan Stock 2005/2006 13,488 -
Bank loans (secured) 426,916 383,118
Other loan borrowings 14,595 26,000
Less issue costs (4,593) (4,716)
------- -------
450,406 425,874
Hire purchase and leasing contracts 10,514 17,943
Deferred consideration on purchase of properties - 875
Amount due to other related parties 1,482 1,363
Other creditors 9,927 11,459
------- -------
472,329 457,514
======= =======
Analysed as:
Loans due after more than one year 450,406 425,874
Other long term liabilities 21,923 31,640
------- -------
472,329 457,514
======= =======
12. PROVISIONS FOR LIABILITIES AND CHARGES
--------------------------------------
The movement on the deferred tax balances and other provisions during the year
ended 30th June 2003 were as follows:-
Deferred
Taxation Other Total Total
2003 2003 2003 2002
#'000 #'000 #'000 #'000
At 1st July 2002 - 13,201 13,201 444
Utilisation of provision during - - - (109)
the year
Potential tax on short-term 1,185 - 1,185 6,995
timing differences
Trading tax losses and (1,185) - (1,185) (7,257)
accelerated capital
allowances
Other provisions - 1,662 1,662 816
Provision for properties - 22,951 22,951 12,312
carried at negative values
------ ------ ------ ------
At 30th June 2003 - 37,814 37,814 13,201
====== ====== ====== ======
Analysis
Properties held at negative - 33,626 33,626 12,312
values
Other provisions - 4,188 4,188 889
------ ------ ------ ------
- 37,814 37,814 13,201
====== ====== ====== ======
Certain short leasehold interests in the Group's business centre operations had
negative values at 30th June 2003 and at the previous year end. These
principally reflect the onerous cost of future lease obligations and accordingly
were provided in the profit and loss accounts for the years ended 30th June 2002
and 30th June 2003, and are recorded as provisions above. During the year ended
30th June 2003, amortisation of onerous lease provisions totalled #1,637,000.
The deferred taxation balances at 30th June 2003 arose as follows:-
Amount Amount not Amount Amount not
provided provided provided provided
2003 2003 2002 2002
#'000 #'000 #'000 #'000
Short term timing 8,442 - 7,257 -
differences
Accelerated capital 2,864 (7,218) 354 -
allowances
Trading tax (11,306) (16,210) (7,611) (13,805)
losses
Potential tax on - 6,956 - 3,000
property valuation
surplus eligible
for rollover
relief
Potential tax on - - - 1,035
property valuation
surplus not
eligible for
rollover relief
------ ------- ------ ------
At 30th June 2003 - (16,472) - (9,770)
====== ======= ====== ======
13. MOVEMENT ON RESERVES
--------------------
Share Capital Profit
premium redemption Revaluation Other and loss
account reserve reserve reserve account
#'000 #'000 #'000 #'000 #'000
At 1st July 79,201 50 56,516 7,092 (78,269)
2002
Loss retained
for the year
- before
exceptional
items - - - - (30,988)
- exceptional
items - - - - (30,362)
Purchase of
own shares for
cancellation - 15,600 - - (14,030)
Net surplus
arising on
valuation of
properties and
attributable
fixtures and
equipment - - 31,034 - -
Transfer on
sale of
properties and
investments
during the
year - - (11,376) (5,713) 17,089
Transfer of
depreciation
on revalued
tangible fixed
assets - - (2,830) - 2,830
Currency
translation
differences on
foreign
currency net
investments - - (695) - 230
Other
movements 163 - 7,698 - (5,202)
------ ------ ------- ------ --------
At 30th June 79,364 15,650 80,347 1,379 (138,702)
2003 ====== ====== ======= ====== ========
During the year ended 30th June 2003, the merger reserve remained constant at
#9,403,000.
14. EQUITY SHAREHOLDERS' FUNDS PER SHARE
------------------------------------
The equity shareholders' funds per share figures are calculated by dividing the
relevant equity shareholders' funds figures at the year end by the number of
shares in issue at that date, and are calculated as follows:-
2003 2002
#'000 #'000
Equity shareholders' funds per consolidated balance 102,341 144,493
sheet ======= =======
'000 '000
Number of ordinary shares in issue at year end,
excluding shares held by the LTIP 109,800 138,676
======= =======
Equity shareholders' funds per share 93p 104p
======= =======
15. POST BALANCE SHEET EVENT
------------------------
On 23rd July 2003, the Board announced that its majority owned subsidiary MWB
Business Exchange Europe Limited ("Business Exchange Europe") had closed its
five serviced office centres in Holland and Germany and placed its four French
centres into administration. These actions covered Business Exchange Europe's
entire European operations.
In accordance with the definition contained in SSAP17, the cessation of
operations of Business Exchange Europe and its subsidiaries in this manner is a
post balance sheet event affecting the Group, but is not an adjusting post
balance sheet event as defined by that Standard. The assets and liabilities of
Business Exchange Europe and its subsidiaries at 30th June 2003 have therefore
been included in the consolidated results for the year then ended. However, the
Directors consider that full provision against the net value of these companies
had already been included in the accounts for the year ended 30th June 2003, and
accordingly there should be no further financial impact on the Group as a result
of this event.
The consolidated assets and liabilities of the European operations of Business
Exchange at 30th June 2003 that have been included in the Group accounts at that
date are summarised as follows:-
2003
#'000
Current assets 567
Current liabilities (5,363)
Long term liabilities (8,265)
-------
(13,061)
=======
16. NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES
---------------------------------------------------
2003 2002
#'000 #'000
Group operating loss (51,169) (65,439)
Write-down of brand - 11,377
Write-down of fixed assets 41,361 46,922
Goodwill written off 4,299 -
Depreciation 16,005 18,001
Decrease/(increase) in properties held for resale
and developments in progress 8,097 (24,559)
Decrease in debtors 18,477 14,629
Decrease in stock 381 2,606
Increase/(decrease) in creditors 13,596 (5,942)
------ ------
Net cash inflow/(outflow) from operating activities 51,047 (2,405)
====== ======
During the year ended 30th June 2002 and 30th June 2003, the Group incurred
exceptional items as summarised in Note 2 to the accounts. The majority of these
represent provisions against the carrying values of properties and thus have no
cash effect on the Group. These non-cash items have been reflected in the
calculation of net cash inflow/(outflow) from operating activities in the table
above.
17. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
-----------------------------------------------
2003 2002
#'000 #'000
Distributions received from joint ventures - 394
Interest received 2,181 2,438
Interest paid (38,588) (39,391)
------- -------
(36,407) (36,559)
======= =======
18. CAPITAL EXPENDITURE, FINANCIAL INVESTMENT AND SALES OF FIXED ASSETS
-------------------------------------------------------------------
2003 2002
#'000 #'000
Purchase of tangible fixed assets (71,570) (91,664)
Sale of tangible fixed assets 81,490 30,354
------- -------
9,920 (61,310)
======= =======
19. FINANCING
---------
2003 2002
#'000 #'000
Issue/(purchase) of ordinary shares (14,030) 17,693
Investment by non-equity minority interests 572 4,202
Distributions to equity minority interests (6,192) (729)
Unsecured Loan Stock repaid, including premium (10,000) -
Loans drawn down 134,684 141,698
Loans repaid (130,474) (46,904)
Net increase/(decrease) in hire purchase and leasing (6,808) 5,379
contracts
--------- --------
(32,248) 121,339
========= ========
20. INCREASE/(DECREASE) IN CASH DURING THE YEAR
-------------------------------------------
Movement Movement 30th
30th June during 30th June during June
2003 year 2002 year 2001
#'000 #'000 #'000 #'000 #'000
Cash 52,359 6,600 45,759 1,782 43,977
Bank - - - 18,286 (18,286)
overdrafts
------ ------- -------- ------- --------
Net cash 52,359 6,600 45,759 20,068 25,691
Hire (18,252) 6,808 (25,060) (5,379) (19,681)
purchase and
leasing
contracts
Bank loans (438,820) (27,849) (410,971) (89,794) (321,177)
Unsecured (13,488) 7,984 (21,472) - (21,472)
Loan Stock
Other loan (14,595) 11,405 (26,000) (5,000) (21,000)
borrowings
-------- ------- -------- ------- --------
Net debt (432,796) 4,948 (437,744) (80,105) (357,639)
======== ======= ======== ======= ========
21. FINANCIAL INFORMATION
---------------------
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 30th June 2003 or 2002 but is derived
from those accounts. Statutory accounts for 2002 have been delivered to the
Registrar of Companies, and those for 2003 will be delivered following the
Company's Annual General Meeting. The auditors have reported on those accounts;
their reports were unqualified and did not contain statements under Section 237
(2) or (3) of the Companies Act 1985.
22. DESPATCH OF ACCOUNTS
--------------------
The audited accounts of the Company are expected to be sent to shareholders
during October 2003. Thereafter copies will be available from the Company
Secretary, City Group P.L.C. at the Company's registered office, 25 City Road,
London EC1Y 1BQ.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UKUWRORRKUAR
1 Year Mwb Wertpapier Chart |
1 Month Mwb Wertpapier Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
