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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bulgarian Prop. | LSE:BPD | London | Ordinary Share | GB00B058TT05 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 16.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
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RNS Number : 5783V
Bulgarian Property DevelopmentsPLC
30 May 2008
For Release 07.00am Friday 30th MAY 2008
BULGARIAN PROPERTY DEVELOPMENTS PLC
("BPD" or "the Group")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31st DECEMBER 2007
Six months ended Year ended
31st December 30th June
2007 2007
Turnover
£457,000 £483,000
(Loss) on ordinary activities before
taxation £(594,000) £(979,000)
(Loss) for the financial year £(982,000) £(1,060,000)
Basic (Loss) per share (0.92p) (1.46p)
Key Points
* Exceptional Distribution of 19 p per share due at end of June / beginning of July
* Current NAV after payment of 19p per share
o NAV of 56p per share on Current Value basis
o NAV of between 64p and 69p per share on discounted Gross Development Value basis
* Assuming that the increase in density at the Sofia Central Commercial Site is approved and following the payment of the 19 pence
per share the NAV of the Group would be as follows:
o NAV of 71p per share on Current Value basis
o NAV of between 70p and 79 p per share on discounted Gross Development Value basis
(Assuming the exchange rate £1=EUR1.36p)
Enquiries:
Bulgarian Property Developments
Ivo Hesmondhalgh (Joint Chief Executive) +44 (0) 20 7243 1336
Matrix Corporate Capital LLP (Nominated Adviser)
Ken Vere Nicoll +44 (0) 20 7925 3388
Cubitt Consulting Ltd
James Verstringhe +44 (0) 20 7367 5100
Brian Coleman-Smith
Background Note:
Since BPD was incorporated in May 2004 and floated on AIM in January 2005, it has raised a total of £62.22 million in equity. This has
been used to acquire and develop land for commercial property use across Bulgaria, in particular for building distribution centres, retail
centres and offices.
BPD's portfolio currently includes properties in Sofia, Varna, Plovdiv, Vidin, Ruse, Bansko, Pleven and Sandanski.
http://www.bpdplc.com
BULGARIAN PROPERTY DEVELOPMENTS PLC
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31st DECEMBER 2007
CHAIRMAN'S STATEMENT
It gives me pleasure to report the Group's results for the six months ended 31st December 2007.
The results for the period show a loss after tax of £982,000. The costs of the defence of the Windsorville bid were approximately
£680,000.
On 24th December 2007 Windsorville Investments Limited announced its offer for the Group's shares at 64p per share. Your Board was of
the belief that this offer significantly undervalued the Company and recommended that shareholders reject the offer. The offer was, in the
event, rejected by shareholders.
In the defence documentation, the Directors suggested that the Group would, if the offer was not accepted, hold a general meeting to
approve the cancellation of BPD's Share Premium Account, which would allow BPD to make a distribution of 19p per share to shareholders. This
General Meeting was held on 7th April 2008 and at the meeting the cancellation of BPD's Share Premium Account was approved. Since then BPD
has been going through the necessary legal procedure to allow it to make this distribution. Following a successful application to the
courts, the cancellation of the Share Premium Account became effective on 28 May 2008. Once BPD has satisfied or provided for any creditors
outstanding at this date, the Board will be permitted to declare the dividend of 19p per share. It expects to be able to do this at the end
of June or the beginning of July.
In light of the Windsorville offer, BPD appointed Colliers CRE to value the Group's portfolio on two different bases: firstly, on
Current Value and, secondly, on Gross Development Value. On a Current Value basis Colliers CRE valued the Group's property portfolio as at
26 November 2007 at Euros 75 million which would give (were the Group's assets to be shown on a revalued basis in the Group's accounts,
which they are not as such assets are carried as investment property at cost) NAV per share of 75p The Gross Development Value of the
Group's portfolio was calculated by Colliers CRE at Euros 412 million which (after deducting costs and applying discount rates of 14.0% and
12.5% p.a. respectively) gave a Net Present Value of between Euros 111 million and Euros 119 million. Adjusting for current cash and
liabilities, this equates to a NAV per share of between 84p and 88p. The Gross Development Value did not take into account future
appreciation in the value of land and buildings and was, in the Board's view, prepared on the basis of conservative assumptions as to rental yields and re-zoning.
The Valuations assumed planning consent for the Group's major Sofia Central Commercial site (see below) of 130,000 square metres.
However, the Group has applied for an increase to over 250,000 square metres, and is confident it will receive approval for this
application. Colliers consider that such planning consent would increase the Current Value of the site by Euros 21.4 million to Euros
57,900,000. This would have the effect of increasing the NAV per share on a Current Value basis to 90p and the NAV per share on the basis of
the discounted Gross Development Value (after deducting costs and applying discount rates of 14.0% and 12.5% pa respectively) to between 89p
and 98p.
The Sofia Central Commercial Site
On 1st February 2007 the Group purchased approximately 87,000 square metres of land and buildings in the capital, Sofia, at a price of
Euros 24,653,000. The site is situated adjacent to the upmarket residential district of Lozenets. Approximately 2/3rds of the site is
occupied by run down industrial buildings. These are fully occupied on short term leases by some 90 tenants and following rental increases
the property currently yields approximately 4% on the purchase cost. Since then the Group has purchased two neighbouring plots, which means
that the site now totals 91,500 square metres.
The Group has applied for permission to increase the permitted build area on the site from 130,000 square metres to in excess of 250,000
square metres. The process is slightly more than halfway completed and the Directors believe that permission should be granted for the
increase in density by the end of the year. The effect of such an increase in density would be that the value of the site would increase
from the value ascribed to it by Colliers in November 2007 of Euros 36,500,000 to Euros 57,900,000.
The Varna Logistics Park
On 4th October 2006 the Group completed the purchase of 50% of the shares of Varna Logistics AD for a consideration of Euros 6,366,000.
The other 50% of the shares was simultaneously purchased by FairPlay International AD at the same price. The sole asset of Varna Logistics
AD is a 132,500 square metres income producing industrial site in the city of Varna, the third largest city in Bulgaria. The site is partly
occupied by a number of run down industrial buildings, which are tenanted and produce a net return of 5.3 % per annum.
The Group has started the development of the vacant portion of the site with the construction of two warehouses. Warehouse A1 is
completed and fully let. It is awaiting the issue of Act 16 (which grants permission for a building to be used) from Varna municipality.
This should be granted within the next few weeks and the tenants are scheduled to move in in the first week of July. Warehouse A2 is due to
be completed in the first week of September. The majority of this warehouse is already let.
Works to construct Warehouse A6 and buildings A3 and A4 (showrooms with offices above situated on Perla Street) are scheduled to
commence towards the end of the year.
Sofia Ring Road Sites
Ring Road Site One
This is a site of approximately 92,000 square metres. Prices in the area have continued to rise and there are indications that,
following other developments in the area, the site could be used for a mixture of retail and warehousing rather than just warehousing, which
should enhance the site's value.
Ring Road Site Two
Ring Road Site Two which is approximately 20,000 square metres has received re-zoning from agricultural use to commercial use for the
front half of the site, which is adjacent to the ring road. Re-zoning of the rear portion of the site has been applied for and is now
awaiting final approval by the Sofia planning authorities.
The Group intends to build a warehouse and associated offices of approximately 11,000 square metres on the site. It has received a
letter of intent from a major international distribution Group to lease half of the proposed building. The Group has been unable to enter
into a binding contract with this company due to a failure by the local statutory authority to guarantee power to the site. It is hoped that
this situation should be resolved shortly.
Sofia Airport
The Group owns two sites near the airport in Sofia, totalling 38,000 square metres. The masterplan for the airport area has still to be
completed and this has delayed the rezoning of the sites. However, the new airport terminal is now operational and work has now commenced on
an adjacent site belonging to Tishman and GE. These factors have contributed to a significant growth in site values in this area. Rezoning
on its larger site has now reached the second announcement stage so it is believed that rezoning is imminent.
Ruse
The Group owns a 53,676 square metre plot of land in Ruse, which it purchased at a total price of Euros 1,396,000.
Ruse is located in northern Bulgaria at a point where the strategically important Pan European Transport Corridor 9 crosses the river
Danube by a rail and road bridge. The transport corridor connects Romania and north-eastern Europe with Bulgaria, Turkey and eastern Greece.
This makes Ruse an excellent location for distribution warehousing.
The plot is in the new Ruse Industrial Park, approximately one kilometre from the bridge, and has already been provided with modern
infrastructure by the municipality of Ruse. This will reduce the cost of any development on the site.
The Group intends to construct two warehouses (with associated offices) totalling approximately 23,000 square metres on the site over
the next two years.
King Sturge has been appointed as the sole letting agent.
The masterplan for the site has been prepared by the UK commercial architectural firm of Fletcher & Associates. In Bulgaria, Pro-Consult
have been appointed as project architects with Sofia Estates Developments as project managers.
Plans are in the process of being submitted to Ruse municipality.
It is intended that building works commence towards the end of 2008.
Sandanski
The Group owns a 50% stake in the proposed development of a shopping centre in Sandanski, south west Bulgaria, which it purchased at a
cost of Euros 588,000. The shopping centre will be developed in partnership with FairPlay Commercial which retains the other 50% of the
project.
Sandanski is a regional hub for this part of Bulgaria. It is a prosperous small city and is a significant destination for Greek tourists
who are attracted by the healthy climate, the mineral waters and the cheap cost of living. The location of the site (on the E79 from Greece
to Sofia and opposite the turning to Sandanski) makes it convenient for both the inhabitants of Sandanski (and neighbouring towns) as well
as road traffic passing through on its way to Sofia or Greece.
The site is approximately 17,000 square metres on which it is proposed to build a shopping centre on 3 floors totalling approximately
15,000 square metres. The land was originally designated for agricultural purposes but change of zoning has now been approved. Detailed
consultations are in process over road access and the provision of utilities.
Construction is anticipated to commence in late 2008.
Bansko
The Group has now obtained full planning permission and building permission for the site. Having carefully considered its options, the
Group decided that it would not make sense for it to develop the site itself. It, therefore, marketed the site as a development opportunity
with the benefit of the various permissions. As has been widely reported in the press, the market for apartments in Bansko has weakened
significantly and, as a result, it has proved more difficult than expected to sell this site. Rather than sell the site at a very low level,
the Group has decided to mothball the site and wait for the market to improve. The cost to the Group of the site is approximately Euros
506,000 so this represents only a small percentage of the Group's portfolio.
Pleven
The Group is part of a consortium that purchased a plot of 36,500 square metres from the municipality of Pleven in October 2006 for
Euros 1,618,000. The Group has a 38% share of the consortium. Pleven is a busy town of 120,000 inhabitants in the north of Bulgaria. The
site has planning permission for retail use.
The project has been delayed, principally due to a change in the scale of the proposed development. As a result, Pleven municipality has
the right to impose certain penalties on the consortium. Negotiations are in progress with the municipality for these penalties to be waived
on the basis that the project is now significantly larger than originally proposed. The Board has felt it prudent, as these negotiations
have not been concluded, to make a provision in the accounts of £92,000.
Vidin
The Group purchased a 50% stake on 19th June 2007 in the proposed development of a shopping centre in Vidin, North West Bulgaria from
Fairplay International for Euros 1,555,000. The shopping centre will be developed in partnership with Fairplay Commercial who retain the
other 50% of the project. The size of the site is just under 12,000 square metres and is located close to the centre of Vidin.
Vidin is a regional hub for this part of Bulgaria. The Group believes that the prosperity of the town will be enhanced by the
construction of a new bridge across the Danube adjacent to Vidin, which will make Vidin one of the main entry points for traffic coming from
the rest of Europe to Bulgaria. This is scheduled for completion in 2010-2011. It is not intended to develop this site until it is clear
when the completion date of the bridge is finalised.
A combination of a change of regional government and a successful court case by a neighbour has led to the planning status of this site
being revoked by the new administration and the possibility that part of the site may be used for a new road. For this reason the Board has
felt it prudent to make an impairment provision for this property in the accounts of £729,000.
Plovdiv
I reported in December that an offer had been received for part of the site from an international retailer. This offer did not proceed
to exchange. The Group and its 50% joint venture partner, Fairplay International, have decided to place the whole site on the market. The
market in Plovdiv remains good and I hope to be able to report a sale in my next Chairman's letter.
Sofia Estates Development OOD ("SED")
The Group has purchased a 50% stake (32% at the balance sheet date) of the share capital of a project management company, SED, a company
managed by Bulgarian project management veteran, Trifon Trifonov. The cost of this purchase was Euros 500,000. The registration of the
purchase has yet to be completed, but should be in the near future.
SED has over 50 staff and is project managing the Group's developments in Varna and Ruse and at its Ring Road Site Two in Sofia. The
purchase of this stake should significantly improve the Group's ability to deliver projects on time and on budget. SED should, in time,
become a separate profit centre. The Board believes that BPD will be able to assist SED in growing over the years by providing a stable
income stream and by providing a wider, western European, method of working, management controls and financial reporting. This investment of
£261,000 was written down to zero because the available statutory balance sheet showed a negative net asset value.
Staffing
The Group has continued to recruit staff at all levels. In particular, it has recruited a British project manager who has extensive
building experience in Europe, Russia and the Middle East and is negotiating to recruit an in-house lawyer.
Year End
The Group has changed its accounting reference date from 30th June to 31st December. Accordingly, the next set of results to be
announced will be the interim results for the six months to 30th June 2008.
Summary
Notwithstanding the issues at Pleven and Vidin and the slower than hoped for progress at some other sites, the Group has continued to
make good progress. In particular, the Board believes that an increase in density on the Group's main site in Sofia will be achieved within
a matter of months, and that this should have a significant impact on the NAV of the Group. I look forward to reporting further progress in
due course.
Christian Williams
Chairman
30 May 2008
BULGARIAN PROPERTY DEVELOPMENTS PLC
CONSOLIDATED INCOME STATEMENT
for the six months ended 31
December 2007
Six months
ended Year ended
31-Dec-07 30-Jun-07
Interests in Interests in
Group Joint ventures Total Group Joint ventures Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 347 110 457 237 246 483
Administrative expenses (808) (112) (920) (1,301) (133) (1,434)
Other expenses (941) - (941) (404) - (404)
Impairment of investment (75) (819) (894) - -
properties
Foreign exchange 1,051 - 1,051 (295) - (295)
gains/(losses)
Results from operating (426) (821) (1,247) (1,763) 113 (1,650)
activities
Share of operating profit in (821) 113
joint ventures
Total results from operating (1,247) (1,650)
activities
Group and share of joint
ventures
Investment Revenues
Group 727 760
Joint ventures - -
727 760
Finance costs
Group - -
Joint ventures (74) (89)
(74) (89)
(Loss) before tax for the (594) (979)
period
Taxation
Group (380) (65)
Joint ventures (8) (16)
(388) (81)
Loss for the period (982) (1,060)
Loss per share - basic and (1.46p)
diluted ( 0.92p)
BULGARIAN PROPERTY DEVELOPMENTS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 31 December 2007
Equity
Share Share premium Shares to Retained Total
capital be issued earnings equity
£'000 £ '000 £ '000 £ '000 £'000
Balance at 1 July 2006 18,135 19,035 - (345) 36,825
Loss for the year to 30 June - (1,060) (1,060)
2007
18,135 19,035 - (1,405) (35,765)
Exchange differences on - - - 5 5
translating
Foreign operations
Share based payments - (201) 201 - -
Issue of equity share capital 8,563 13,357 - - 21,920
Costs of Issue - (840) - - (840)
Balance at 30 June 2007 26,698 31,351 201 (1,400) 56,850
Loss for the period to 31 - - - (982) (982)
December 2007
26,698 31,351 201 (2,382) 55,868
Exchange differences on - - - 2,740 2,740
translating
Foreign operations
Share based payments - 26 (26) - -
Issue of equity share capital 44 44 - - 88
Costs of issue - (5) - - (5)
Balance at 31 December 2007 26,742 31,416 175 358 58,691
FIXED ASSET INVESTMENTS
Trakia Vidin Pleven Sandanski Group
Retail Varna Retail Retail Retail Share in
Centre Logistics Centre Centre Centre Joint Ventures
£'000 £'000 £'000 £'000 £'000 £'000
Summarised profit and
loss account for the year
ended 31 December 2007
Turnover - rent receivable - 110 - - - 110
Administrative expenses 1 (19) (6) (87) (1) (112)
Impairment of investment - - (729) - (90) (819)
properties
Results from operating 1 91 (735) (87) (91) (821)
activities
Finance costs - interest (51) (12) - - (11) (74)
payable
Profit /(Loss) before tax (50) 79 (735) (87) (102) (895)
Taxation - (8) - - - (8)
Profit/(Loss) for the period (50) 71 (735) (87) (102) (903)
Summarised balance sheets
as at 31 December 2007
Non current assets
Plant and equipment - 17 - - - 17
Investment Property 1,694 4,688 755 463 332 7,932
Assets under construction - 621 - - - 621
Current assets
Trade and other receivables - 76 1 5 20 102
Cash at bank 10 1 - 3 5 19
1,704 5,403 756 471 357 8,691
Current liabilities - (109) (8) (92) (1) (210)
Current Tax Liabilities - (11) - - - (11)
Long term payables to bank - (289) - - - (289)
Net assets 1,704 4,994 748 379 356 8,181
Represented by:
Capital and reserves 1,704 4,994 748 379 356 8,181
BULGARIAN PROPERTY DEVELOPMENTS PLC
CONSOLIDATED BALANCE SHEET
At 31 December 2007
31 December 2007 30 June 2007 Interests in joint
Interests
in joint
Group ventures Total Group ventures Total
£'000 £'000 £'000 £'000 £'000 £'000
Non-current assets
Plant and Equipment 9 17 26 9 16 25
Investments in joint ventures 8,181 (8,181) - 7,653 (7,653) -
Investment Properties 24,777 7,932 32,709 - - -
Assets under construction - 621 621 - - -
Current assets
Inventories - - - 21,040 7,562 28,602
Trade and other receivables 575 63 638 1,252 80 1,332
Unpaid share capital - - - 21,239 - 21,239
Cash and cash equivalents 26,479 19 26,498 6,039 14 6,053
27,054 82 27,136 49,570 7,656 57,226
Current liabilities
Trade and other payables (948) (207) (1,155) (311) (19) (330)
Current tax liabilities (382) (11) (393) (71) - (71)
Total Current Liabilities (1,330) (218) (1,548) (382) (19) (401)
Net current assets 25,724 49,188
Non current liabilities
Long term payables to bank - (289) (289)
Net assets 58,691 56,850
Represented by:
Equity
Share capital 26,742 26,698
Share premium account 31,416 31,351
Equity shares to be issued 175 201
Profit and loss account 358 (1,400)
Shareholders' funds 58,691 56,850
Bulgarian Property Developments plc
The financial information set out in this announcement is unaudited and does not comprise the Group*s statutory accounts for the period
ended 31 December 2007.
The financial information for the year ended 30 June 2007 is derived from the statutory accounts for that year, which have been delivered to
the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under
either Section 237 (2) or Section 237 (3) of the Companies Act 1985.
The statutory accounts for the six months ended 31 December 2007 will be finalised on the basis of the financial information presented by
the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company*s Annual General
Meeting.
The consolidated financial information included in this announcement is for the six months ended 31 December 2007 and has been prepared
following the recognition and measurement principles of International Financial Reporting Standards (*IFRS*). The consolidated financial
statements in respect of the six months ended 31 December 2007 will be the group*s first financial statements prepared under IFRS.
Previously the group prepared financial statements in accordance with UK GAAP, comparative figures have been restated to reflect the
adoption of IFRS.
The financial information is for the six months ended 31 December 2007 and the comparatives are for the period from 1 July 2006 to 30 June
2007.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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