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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Property FD Mgt | LSE:PFM | London | Ordinary Share | GB0031581449 | ORD 5P |
| 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 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:5451I
Property Fund Management plc
11 March 2003
FOR IMMEDIATE RELEASE
11th March 2003
PROPERTY FUND MANAGEMENT PLC:
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31ST DECEMBER 2002
Property Fund Management plc is the UK's only quoted specialist property fund
manager, establishing and managing funds both in the UK and continental Europe
HIGHLIGHTS:
* Turnover up 21% to #10m
* Pre-tax profits up 30% to #2m
* Final dividend of 2p a share making 3.5p in total
* Earnings per share 7.23p (6.44p)
* Property assets under management increased by 52% to #835m
- #575m in UK and #260m in Europe
John Sims, Chief Executive, commented:
"2002 was a year of significant achievement for Property Fund Management plc and
2003 provides a real opportunity to build on that achievement.
"Our confidence for expanding the Group's operations is based upon a 16-year
track record of high-income distribution yield, an important element of total
returns which are bankable and qualified.
"In a market where investor return expectations are reducing, we are very well
placed to achieve and exceed return targets, with the benefit of low cost debt
in our geared funds."
CHAIRMAN'S STATEMENT
The Board of Property Fund Management plc is pleased to announce its results for
the year ended 31 December 2002.
The Group increased profits before tax by 30% to #2.0m (2001: #1.54m) on
turnover up 21% to #10.05m (2001: #8.28m). Earnings per share were up 12% to
7.23p (2001: 6.44p).
We are pleased to declare a final dividend of 2p per share which will be payable
on 30 April 2003, to shareholders on the register at 4 April 2003. Combined with
the interim dividend this makes a total of 3.5p per share.
Property assets under management have continued to grow strongly and at the
year-end were #835m, up 52% from #550m, of which #575m (2001: #470m) were in the
UK and #260m (2001: #80m) in Europe. In addition a further #130m of properties
were under offer at the year-end.
Turnover growth reflects rising core management fees as properties under
management increase as well as acquisition fees received for the high volume of
business in the period. In the year we acquired #154m of properties in the UK
and #180m in Europe.
Operating expenses have risen for the reasons set out in my statement for the
first half, primarily the strengthening of the European team to administer
growth in European activities. Costs rose in the second half as we continued to
grow our European activities and were also increased by one-off costs relating
to aborted transactions.
Our business continues to grow strongly and our European network gives us a
unique platform from which we can build in this area.
The current year has started well and we are confident in its outlook. We are
unlikely to enjoy the significant one-off profits experienced in the last two
years and therefore 2003 will see our normal trend of profits heavily biased to
the second half of the year.
I would like to thank our employees, shareholders, fund investors and advisers
for all their support during the year.
Glyn Hirsch
Chairman
CHIEF EXECUTIVE'S REVIEW
OVERVIEW
2002 was a year of significant achievement for Property Fund Management plc and
2003 provides a real opportunity to build on that achievement.
Whilst the general economic environment continues to be uncertain, with
conflicting views as to whether the main risk is inflation or deflation, there
is common agreement that it is difficult to identify areas for investment
growth.
This places even greater emphasis on the importance of the income component of
total returns.
The Group's focus and specialisation is qualified risk management of high-income
yield, derived from multi-let industrial estates in the UK and mainland Europe.
Our confidence for expanding the Group's operations is based upon a 16-year
track record of high-income distribution yield, an important element of total
returns which are bankable and qualified.
In a market where investor return expectations are reducing, we are very well
placed to achieve and exceed return targets, with the benefit of low cost debt
in our geared funds.
Growth in property under management is ahead of target, due to estate
acquisition programmes in both the UK and mainland Europe being ahead of plan.
This is largely due to the researched database of stock ownership under our "
Road Runner" system, where further substantial quantities of "off market"
opportunities have already been identified as a future pipeline of stock for
expansion of existing fund initiatives and new funds.
At the year-end property assets under management were #575m in the UK and #260m
in mainland Europe, while a further #130m was under offer, which, when
contracted will see both The Industrial Trust in the UK and the European
Industrial Partnership substantially invested. This has advanced the timetable
for expansion discussions with investors ahead of schedule.
GROUP DIVISIONAL REVIEW
UK Investment
The Industrial Partnership ('IP1').
IP1 was a UK limited partnership, and was established in October 1996 in
collaboration with fund manager PRICOA P.I.M. (Regulated) Ltd (PPIM). Investors
included Barclays Nominees, Britel Fund Trustees, Coal Pension Properties Ltd,
NPI, WH Smith Pension Fund, Scottish Widows, Norwich Union Life & Pensions Ltd,
Clerical Medical Investment Group and Pensionenfonds PGGM.
IP1 acquired 49 properties between December 1996 and March 1999 for #127.7m and
a further #6.5m was invested in refurbishments. Full investment was achieved
within two and a half years against the three-year target period through the
pivotal use of iOG's 'Roadrunner' database identifying over 70% of acquisitions.
Adopting iOG's management approach, the portfolio has been intensively managed
to achieve its target ahead of schedule. All assets have been sold to either
owner-occupiers or investment companies - the final disposal being completed in
December 2002.
The total un-geared return of the portfolio was 16% per annum as compared with
the industrial segment of the Investment Property Databank ('IPD') monthly index
of 13.2% over the period to September 2002. (Source: IPD)
The Second Industrial Partnership ('IP2'),
The total un-geared return of the portfolio in the three years to September 2002
is in line with the industrial segment of the IPD monthly index at 11.5%, but
outperforming the index over last two years. (Source: IPD)
IP2 is a seven-year UK limited partnership established in 1998 with PPIM. The
limited partners included, NPI, Barclays Nominees, Britel Fund Trustees, Coal
Pension Properties Ltd, Norwich Union Life & Pensions Ltd, Clerical Medical
Investment Group and Pensionenfonds PGGM.
IP2 acquired 65 properties between December 1998 and December 2000 for #168m,
while an additional #7.7m has been invested in refurbishments. Full investment
was achieved within two years against the target period of two and a half years
- once again utilising the iOG 'Roadrunner' to good effect.
The IP2 portfolio is currently in the management phase, and approximately #48m
of assets have been sold at healthy margins over cost.
The Industrial Trust ('IT')
IT is an onshore-unauthorised property unit trust, created in 2001 in
collaboration with PPIM. Investors include Barclays Nominees, Britel Fund
Trustees, Coal Pension Properties Ltd, Clerical Medical Investment Group,
Pensionenfonds PGGM and Bass Pension Fund.
Full investment of the initial phase is likely to be completed well within the
target of three years. By December 2002 #134m had been invested with 49
properties having been acquired.
The income return of the portfolio for the year to December 2002 was 9.1%
compared with the industrial segment of the IPD monthly valued funds benchmark
of 8.5%. (Source: IPD)
UK Development
In July 1998 the Group launched the first of its development funds The
Industrial Development Partnership I. The fund is a limited partnership
closed-end fund, established for an initial term of eight years and formed to
acquire land throughout mainland UK suitable for the development of multi-let
industrial estates in one or two phases. A total of #40m equity was raised on
its launch with the intention to take on debt on completion of each scheme
phase.
Four development sites have been acquired in Avonmouth, Swindon, Redditch and
Waltham Cross. The first phase of all the schemes has been completed.
The investors in this first fund are clients of LaSalle Investment Management
and Hermes.
The Industrial Development Partnership II was launched in July 2000. This is a
limited partnership closed-end fund, established for an initial term of ten
years. This fund was also formed to acquire land throughout mainland UK suitable
for the development of multi-let industrial estates in one or two phases. A
total of #105 m equity was raised on its launch with the intention to take on
debt on completion of each scheme phase.
This second fund has acquired 15 sites and completed the construction of phase
one on five of the schemes. It is forecast that a further five sites will
complete Phase I development during 2003. In 2002 of the 102 units across both
funds available, 29 were sold and 21 let.
International Investment
In July 2001, the Group launched its first European fund, The European
Industrial Partnership. The fund is a Luxembourg based Fonds Commun de
Placement, qualifying as a institutional fund under the relevant laws of
Luxembourg, established to invest in multi-let industrial estates through
special purpose corporate entities, with initial investments in France, The
Netherlands and Germany.
It was formed in July 2001 for an initial term of ten years. The fund has so far
raised a total of Euro232m of equity for investment in built assets across three
Euro-zone countries, which after the application of debt at 60% loan to asset
value will generate Funds Under Management when fully invested, of Euro580m.
The fund is in the latter stages of its acquisition phase and has acquired Euro400m
of property in 33 estates throughout France, The Netherlands and Germany. It is
scheduled to be fully invested in early 2003
Investors include GIC, PGGM, TPG-KPN, The Wellcome Trust, AXA Funds and BEGG
through F &C.
In addition to the established offices in the above countries, our unique local
asset management capability is attracting considerable interest, the joint
venture signed with Grupo Lar Grosvenor in the first half of 2002 concluded its
research mandate for Spain and discussions are now well advanced for the funding
of a substantial development programme in this country.
Grupo Lar Grosvenor also has a strong presence in Portugal and this territory
along with Italy, focusing on the northern industrial region of Lombardia, are
targeted as the next research territories for possible expansion of the Group's
activities dependent upon our findings.
General Prospects 2003
With the core operational divisions now well established and advanced
discussions for expansion of existing programmes now underway, an allocation of
senior executive time will now be invested in identifying new and additional
areas in which to create fund products that are complementary and
non-conflicting to existing mandates.
The Group's business is the establishment and onward management of property
funds. Specific attention is being given to corporate property dispositions and
European territories where investor funds should be represented in identifying
growth prospects from today's pricing of assets.
The above areas of complementary diversification require little if any
additional overhead expenditure and particularly in the mainland European
offices the acquisition and asset management resource can accommodate far higher
volumes of business than currently under management.
Through these initiatives the Board is focused on enhancing earnings per share
through long-term management contracts.
Throughout an exciting and progressive year I would like to thank all employees,
advisers and investors for their high level of support.
John Sims
Chief Executive
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 2002
2002 2001
Notes #'000 #'000
TURNOVER: 2
Turnover: Group and share of joint venture 12,014 9,324
turnover
Less: share of joint venture turnover (1,965) (1,045)
------------------------ ----------------------
10,049 8,279
Cost of sales (1,326) (892)
------------------------ ----------------------
GROSS PROFIT 8,723 7,387
Other operating expenses (7,249) (5,778)
------------------------ ----------------------
OPERATING PROFIT 1,474 1,609
Share of operating profit/(loss) in joint ventures 476 (29)
------------------------ ----------------------
PROFIT ON ORDINARY ACTIVITIES BEFORE FINANCE CHARGES 1,950 1,580
Net interest receivable/(payable) 3
Group 55 (34)
Joint ventures (2) (2)
53 (36)
------------------------ ----------------------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2, 4 2,003 1,544
Tax on profit on ordinary activities 7 (689) (541)
------------------------ ----------------------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 1,314 1,003
Equity minority interests 20 (42)
------------------------ ----------------------
PROFIT FOR THE FINANCIAL YEAR 8 1,334 961
Equity dividends paid and proposed 9 (723) (832)
------------------------ ----------------------
RETAINED PROFIT FOR THE YEAR 19 611 129
=========== ===========
EARNINGS PER SHARE
Basic 10 7.23p 6.44p
Diluted 10 7.05p 6.22p
=========== ===========
CONSOLIDATED BALANCE SHEET AS AT 31ST DECEMBER 2002
2002 2001
Notes #'000 #'000
FIXED ASSETS
Intangible assets - Goodwill 11 41 -
Tangible assets 12 755 738
Investments in joint ventures 13
Share of gross assets 1,486 545
Share of gross liabilities (1,125) (523)
361 22
-------------------- ---------------------
1,157 760
-------------------- ---------------------
CURRENT ASSETS
Debtors 14 4,519 2,949
Cash at bank and in hand 16 3,858 389
-------------------- ----------------------
8,377 3,338
CREDITORS: Amounts falling due within one year 15 (2,978) (3,203)
-------------------- ----------------------
NET CURRENT ASSETS 5,399 135
-------------------- ----------------------
TOTAL ASSETS LESS CURRENT LIABILITIES 6,556 895
PROVISIONS FOR LIABILITIES AND CHARGES 17 (34) (43)
EQUITY MINORITY INTERESTS - (7)
-------------------- ----------------------
NET ASSETS 2 6,522 845
=========== ==========
CAPITAL AND RESERVES
Called-up share capital 18 1,033 1
Share premium account 19 4,793 -
Other reserves 19 93 92
Profit and loss account 19 603 752
-------------------- ----------------------
EQUITY SHAREHOLDERS' FUNDS 20 6,522 845
=========== ==========
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER 2002
2002 2001
Notes #'000 #'000
NET CASH INFLOW FROM OPERATING ACTIVITIES 21 546 1,444
Returns on investments and servicing of finance
Interest received 75 11
Interest paid (22) (44)
Dividends paid to minority interest - (42)
-------------------- ----------------------
Net cash inflow/ (outflow) from returns on investments and 53 (75)
servicing of finance
=========== ==========
Taxation (888) (214)
Capital expenditure and financial investment
Purchase of tangible fixed assets (268) (393)
Sale of tangible fixed assets 9 -
-------------------- ----------------------
Net cash outflow from capital expenditure and financial (259) (393)
investment
=========== ==========
Acquisitions and disposals
Purchase of subsidiary undertaking (50) -
Investment in joint venture (19) -
-------------------- ----------------------
Net cash outflow from acquisitions and disposals (69) -
=========== ==========
Equity dividends paid (587) (463)
-------------------- ----------------------
CASH (OUTFLOW)/INFLOW BEFORE MANAGEMENT OF LIQUID RESOURCES (1,204) 299
AND FINANCING
Management of liquid resources
Cash put on 1 month deposit (2,000) -
Financing
Issue of ordinary share capital 6,268 -
Repayment of loan (55) -
Flotation costs (1,203) -
-------------------- ----------------------
Net cash inflow from financing 5,010 -
=========== ==========
INCREASE IN CASH IN THE YEAR 22 1,806 299
=========== ==========
NOTES FOR THE YEAR ENDED 31ST DECEMBER 2002
1. ACCOUNTING POLICIES
The accounting policies are as stated in the last annual accounts of the Group
and are in accordance with the Accountant's Report on Property Fund Management
plc contained in the listing particulars, dated 16 May 2002.
2. SEGMENT INFORMATION
Classes of business: Property fund Insurance broking Group
management
2002 2001 2002 2001 2002 2001
#'000 #'000 #'000 #'000 #'000 #'000
Turnover:
Group and share of joint 10,294 7,994 1,720 1,330 12,014 9,324
venture turnover
Less: share of joint venture (1,965) (1,045) - - (1,965) (1,045)
turnover
------------- ------------- ------------- ------------- ------------- ---------------
8,329 6,949 1,720 1,330 10,049 8,279
======== ======== ======== ======== ======== ========
Profit on ordinary activities
before taxation:
Group profit 1,157 1,374 372 201 1,529 1,575
Share of joint ventures' 474 (31) - - 474 (31)
profit/(loss)
------------- ------------- ------------- ------------- ------------- ---------------
1,631 1,343 372 201 2,003 1,544
======== ======== ======== ======== ======== ========
Net assets:
Group net 6,135 804 26 18 6,161 822
assets
Share of joint ventures' net 361 23 - - 361 23
assets
------------- ------------- ------------- ------------- ------------- ---------------
6,496 827 26 18 6,522 845
======== ======== ======== ======== ======== ========
Geographical segments: United Kingdom Europe Group
2002 2001 2002 2001 2002 2001
#'000 #'000 #'000 #'000 #'000 #'000
Turnover by destination:
Group and share of joint 8,851 7,470 3,163 1,854 12,014 9,324
venture turnover
Less: share of joint venture - - (1,965) (1,045) (1,965) (1,045)
turnover
------------- ------------- ------------- ------------- ------------- ---------------
8,851 7,470 1,198 809 10,049 8,279
======== ======== ======== ======== ======== ========
Turnover by origin:
Group and share of joint 10,049 8,279 1,965 1,045 12,014 9,324
venture turnover
Less: share of joint venture - - (1,965) (1,045) (1,965) (1,045)
turnover
------------- ------------- ------------- ------------- ------------- ---------------
10,049 8,279 - - 10,049 8,279
======== ======== ======== ======== ======== ========
Profit on ordinary activities
before taxation:
Group profit 1,529 1,575 - - 1,529 1,575
Share of joint ventures' - - 474 (31) 474 (31)
profit/(loss)
------------- ------------- ------------- ------------- ------------- ---------------
1,529 1,575 474 (31) 2,003 1,544
======== ======== ======== ======== ======== ========
Net assets:
Group net assets 6,161 822 - - 6,161 822
Share of joint ventures' net - - 361 23 361 23
assets
------------- ------------- ------------- ------------- ------------- ---------------
6,161 822 361 23 6,522 845
======== ======== ======== ======== ======== ========
3. NET INTEREST RECEIVABLE/(PAYABLE)
2002 2001
#'000 #'000
INVESTMENT INCOME
Interest receivable and similar income 77 10
Share of joint ventures' interest receivable 1 1
--------------------- ---------------------
78 11
========== ==========
INTEREST PAYABLE AND SIMILAR CHARGES
Bank loans and overdrafts 19 38
Other loans 3 6
--------------------- ---------------------
22 44
Share of joint ventures' interest payable 3 3
--------------------- ---------------------
25 47
========== ==========
NET INTEREST RECEIVABLE/(PAYABLE)
Investment income 78 11
Less: interest payable and similar charges (25) (47)
--------------------- ---------------------
53 (36)
========== ==========
4. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
2002 2001
#'000 #'000
Profit on ordinary activities before taxation is stated after
charging/(crediting):
Depreciation 247 230
Amortisation of goodwill 21 -
Operating lease rentals
- plant and machinery 231 105
- other 317 293
Auditors' remuneration for audit services 39 20
Net foreign currency gains and (21) 2
losses
========== ==========
Amounts payable to haysmacintyre by the Company and its UK subsidiary
undertakings in respect of non-audit services were #42,000 (2001: #31,000). In
addition, fees of #125,000 were paid to haysmacintyre for work carried out in
relation to the flotation.
5. STAFF COSTS
2002 2001
Number Number
The average monthly number of employees (including executive
directors) was:
Property fund management 56 43
Insurance brokers 12 10
--------------------- ---------------------
68 53
========== ==========
2002 2001
#'000 #'000
Their aggregate remuneration comprised:
Wages and salaries 3,675 2,804
Social security costs 426 301
Other pension costs (see note 24) 444 446
--------------------- ---------------------
4,545 3,551
========== ==========
The Group operates an Inland Revenue approved employee share option scheme and
has taken advantage of the exemption given in UITF Abstract 17 Employee share
schemes from recognising a charge in the profit and loss account for the
discount on the options.
6. DIRECTORS' REMUNERATION AND TRANSACTIONS
AGGREGATE REMUNERATION
2002 2001
#'000 #'000
The total amounts for directors' remuneration and other benefits were
as follows:
Emoluments 658 836
Money purchase contributions 113 114
--------------------- ---------------------
771 950
========== ==========
DIRECTORS' TRANSACTIONS
The following transactions have taken place with directors:
At 31st December 2002 the Group owed #nil (2001: #55,000) to the io Management
Services Limited Pension Scheme. Both Mr Sims and Mr Yates are trustees of the
scheme, which is primarily for their benefit. During the year the Group paid
interest of #nil (2001: #6,600) relating to this loan.
Material interest of director in contracts with the Company:
The Group manages certain properties for wholly owned subsidiaries of Sunley
Holdings plc, a company of which Mr Tice is a director. A wholly owned
subsidiary of Sunley Holdings plc owns 8.7% (2001: 20%) of the issued share
capital of Property Fund Management plc. During the year the Group supplied
services to Sunley Holdings plc, on an arm's length basis, amounting to #68,000
(2001: #78,000). The amount outstanding to the Group at the year-end was #nil
(2001: #20,000).
7. TAX ON PROFIT ON ORDINARY ACTIVITIES
The tax charge comprises:
2002 2001
#'000 #'000
Current tax
UK corporation tax 522 518
UK corporation tax adjustment in respect of prior years 22 -
--------------------- ---------------------
544 518
Foreign tax - share of joint ventures' tax 154 -
--------------------- ---------------------
Total current tax 698 518
Deferred tax
Origination and reversal of timing difference (note 17) (9) 23
--------------------- ---------------------
Total tax on profit on ordinary activities 689 541
========== ==========
The differences between the total current tax shown above and the amount
calculated by applying the standard rate of UK corporation tax to the
profit before tax is as follows:
2002 2001
#'000 #'000
Tax on profit on ordinary activities at standard UK corporation tax 601 463
rate of 30% (2001: 30%)
Effects of:
Expenses not deductible for tax purposes 62 68
Capital allowances less than depreciation 4 (23)
Marginal relief (2) -
Losses of joint ventures - 10
Higher tax rates on overseas 12 -
earnings
Lower tax rate on subsidiary earnings (1) -
Adjustments to tax charge in respect of previous periods 22 -
--------------------- ---------------------
Current tax charge for period 698 518
========== ==========
8. PROFIT ATTRIBUTABLE TO PROPERTY FUND MANAGEMENT PLC
The profit for the financial year dealt with in the financial statements of
the parent company, Property Fund Management plc, was #1,091,000
(2001: #1,206,000). As permitted by section 230 Companies Act 1985, no
separate profit and loss account is presented in respect of the Company.
9. DIVIDENDS PAID AND PROPOSED ON EQUITY SHARES
2002 2001
#'000 #'000
Interim paid of 1.5p (2001: 3.35p) per ordinary share 310 555
Final proposed of 2p (2001: 2p) per ordinary share 413 277
--------------------- ---------------------
723 832
========== ==========
In 2001 Mr Sims waived his entitlement to dividends on 71/2 % (#37,000 interim
and #23,000 final) of the ordinary share capital of the Company.
The 2001 dividend per share is an adjusted dividend per share and has been
computed on the following basis:
a) Adjusted dividend - the dividend after adding back the dividends waived
and excluding a dividend in specie of #92,000 included in the interim paid,
which formed part of a group reconstruction.
b) Adjusted shares in issue - the shares in issue being 10,000 ordinary
shares of 10p each adjusted to reflect the share splits, bonus issues, share
consolidations and the share issue on the re-acquisition of The io Group Limited
resulting in 14,920,000 ordinary shares of 5p each being in issue.
10. EARNINGS PER SHARE
The calculations for earnings per share are based on the following profits
and numbers of shares.
2002 2001
#'000 #'000
Profit for the financial year 1,334 961
========== ==========
2002 2001
Number of shares Number of shares
Weighted average number of shares:
For basic earnings per share 18,451,987 14,922,939
Exercise of share options 480,408 533,355
--------------------- ---------------------
For diluted earnings per share 18,932,395 15,456,294
========== ==========
11. INTANGIBLE FIXED ASSETS - GOODWILL
Total positive
goodwill
#'000
Cost
At 1 January 2002 -
Additions 62
---------------------
At 31 December 2002 62
==========
Amortisation
At 1 January 2002 -
Charge for the year 21
---------------------
At 31 December 2002 21
==========
Net book value
At 31 December 2002 41
==========
At 31 December 2001 -
==========
12. TANGIBLE FIXED ASSETS
Freehold land and Premises Furniture and
buildings refurbish-ment equipment Motor vehicles Total
Group #'000 #'000 #'000 #'000 #'000
Cost
At 1st January 2002 18 224 1,012 47 1,301
Additions - 23 245 - 268
Disposals - (4) (96) (47) (147)
----------------- ----------------- ----------------- ----------------- ------------------
At 31st December 2002 18 243 1,161 - 1,422
========== ========== ========== ========== ==========
Depreciation
At 1st January 2002 1 61 464 37 563
Charge for the year 1 26 214 6 247
Disposals - (4) (96) (43) (143)
----------------- ----------------- ----------------- ----------------- ------------------
At 31st December 2002 2 83 582 - 667
========== ========== ========== ========== ==========
Net book value
At 31st December 2002 16 160 579 - 755
========== ========== ========== ========== ==========
At 31st December 2001 17 163 548 10 738
========== ========== ========== ========== ==========
13. FIXED ASSET INVESTMENTS
PRINCIPAL GROUP INVESTMENTS
The Company and the Group have investments in the following subsidiary
undertakings and joint ventures which principally affected the profits or
net assets of the Group. To avoid a statement of excessive length, details
of investments that are not significant have been omitted.
Country of Principal activity Holding %
incorporation
Subsidiary undertakings:
The io Group Limited * England Holding company 93,840 #1 100
ordinary
shares
io Management Services Limited * England Management of industrial 2 #1 ordinary 100
estates shares
io Management Limited * England Management of industrial 2 #1 ordinary 100
estates shares
io Ground Rents (Ship) Limited England Holding of freehold on 2 #1 ordinary 100
long leasehold properties shares
Thames Insurance Brokers Limited England Registered insurance 14,101 #1 100
brokers ordinary
shares
Joint ventures:
GVio SARL France Management of industrial 2,500 Euro16 50
estates ordinary
shares
io Management Germany GmbH Germany Management of industrial 12,500 Euro1 50
estates ordinary
shares
The io Group Netherlands BV Netherlands Management of industrial 9,999 Euro1 'A' 50
estates ordinary
shares
io Grupo Lar Grosvenor Management Spain Management of industrial 301 Euro100 50
S.L. estates ordinary
shares
* Held directly by Property Fund Management plc.
SUBSIDIARY UNDERTAKINGS
On 3 May 2002, the Group acquired for cash of #49,707 the 30% of Thames
Insurance Brokers Limited not already owned by it. The acquisition created
goodwill of #62,000, which is being amortised over 2 years.
JOINT VENTURES
Group
#'000
Share of net assets/Cost
At 1 January 2002 22
Additions 19
Share of retained profit for the year 320
---------------------
At 31 December 2002 361
==========
Net book value 361
==========
On 25 June 2002 the Group acquired 50% of io Grupo Lar Grosvenor Management
S.L. (a Spanish corporation) for cash of Euro30,100.
The following information is given in respect of the Group's share of all
joint ventures.
2002 2001
#'000 #'000
Fixed assets 165 51
Current assets 1,321 494
--------------------- ---------------------
Share of gross assets 1,486 545
Liabilities due within one year (1,125) (523)
--------------------- ---------------------
Share of net assets 361 22
========== ==========
GROUP RECONSTRUCTION
On 9 July 2001 the Company disposed of the whole of the issued share
capital of The io Group Limited by way of a dividend in specie. On 3 May
2002 the Company re-acquired The io Group Limited by way of a share for
share exchange comprising the issue of 8,700 ordinary shares of 1p each and
1,500 A ordinary shares of 1p each in the Company. A similar offer was made
to the option holders in The io Group Limited. Throughout the period from 9
July 2001 until 3 May 2002 the Company and The io Group Limited had
identical shareholders and option holders. The re-acquisition was thus a
group reconstruction within the terms of paragraph 13 of Financial
Reporting Standard 6: Acquisitions and Mergers and the combination has been
accounted for using the merger accounting method.
14. DEBTORS Group
2002 2001
#'000 #'000
Amounts falling due within one year:
Trade debtors 1,010 682
Amounts recoverable on contracts 1,187 890
Amounts owed by group undertakings - -
Amounts owed by joint ventures 963 276
Corporation tax - -
Other debtors 184 153
Prepayments and accrued income 1,009 781
--------------------- ---------------------
4,353 2,782
Amounts falling due after more than one year:
Amounts recoverable on contracts 166 167
--------------------- ---------------------
4,519 2,949
========== ==========
15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Group
2002 2001
#'000 #'000
Bank loans and overdrafts - 393
Trade creditors 1,297 1,206
Amounts owed to group undertakings - -
Corporation tax 230 575
Other taxation and social security 329 159
Other creditors 298 251
Accruals and deferred income 395 342
Defined contribution pension scheme accrual 16 -
Proposed dividends to equity shareholders 413 277
--------------------- ---------------------
2,978 3,203
========== ==========
A bank overdraft #nil (2001: #338,000) is secured by a fixed and floating charge
over the assets of a subsidiary company.
In addition, the Company and one of its subsidiaries have provided an unlimited
guarantee to Barclays Bank plc.
16. FINANCIAL INSTRUMENTS
The numerical disclosures in this note deal with financial assets as defined
in Financial Reporting Standard 13 Derivatives and Other Financial
Instruments: Disclosures (FRS 13). Certain financial assets such as
investments in subsidiary and joint venture companies are excluded from the
scope of these disclosures.
As permitted by FRS 13, short-term debtors and creditors have been excluded
from the disclosures, other than currency disclosures.
INTEREST RATE AND CURRENCY PROFILES
The Group has no financial assets other than cash. The no interest financial
assets comprise cash held in current accounts. The floating rate financial
assets comprise cash and deposits placed on money market at call, seven-day
and monthly rates.
As at 31st December 2002, the Group's financial assets comprised cash
balances as set out below:
2002 2001
Total Floating rate No interest Total Floating rate No interest
#'000 #'000 #'000 #'000 #'000 #'000
Sterling 3,828 3,424 404 389 103 286
Euros 30 24 6 - - -
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
3,858 3,448 410 389 103 286
========== ========== ========== ========== ========== ===========
Surplus cash balances are invested in money market deposits and other interest
bearing accounts, taking advantage of group offset arrangements, in order to
optimise interest income while also retaining flexibility in respect of the
Group's expected cash requirements.
The Group does not hedge exchange rate movements on the translation of overseas
joint venture profits.
17. PROVISIONS FOR LIABILITIES AND CHARGES
Deferred taxation
#'000
Group
At 1 January 2002 43
Credited to profit and loss account (9)
--------------
At 31 December 2002 34
==========
Deferred tax is provided as
follows:
2002 2001
#'000 #'000
Group
Accelerated capital allowances 39 46
Other timing differences (5) (3)
--------------------- ---------------------
Undiscounted provision for deferred tax 34 43
========== ==========
18. CALLED-UP SHARE CAPITAL
Allotted, called-up
and fully paid
Authorised
Date Number #'000 Number #'000
31 December 2001 'A' ordinary shares of 10p 1,500 - 1,500 -
each
Ordinary shares of 10p each 18,500 2 8,500 1
7 March 2002 New ordinary shares issued - - 200 -
-------------------- --------------- --------------------- -----------
'A' ordinary shares of 10p 1,500 - 1,500 -
each
Ordinary shares of 10p each 18,500 2 8,700 1
-------------------- --------------- -------------------- -----------
3 May 2002 Split into 1p shares:
'A' ordinary shares of 1p 15,000 - 15,000 -
each
Ordinary shares of 1p each 185,000 2 87,000 1
Authorised share capital
increased:
'A' ordinary shares of 1p 135,000 1 - -
each
Ordinary shares of 1p each 1,665,000 17 - -
89 for 10 bonus issue:
'A' ordinary shares of 1p - - 133,500 1
each
Ordinary shares of 1p each - - 774,300 8
New shares issued:
'A' ordinary shares of 1p - - 1,500 -
each
Ordinary shares of 1p each - - 8,700 -
-------------------- --------------- -------------------- -----------
'A' ordinary shares of 1p 150,000 1 150,000 1
each
Ordinary shares of 1p each 1,850,000 19 870,000 9
10 May 2002 Authorised share capital
increased:
'A' ordinary shares of 1p 600,000 6 - -
each
Ordinary shares of 1p each 3,400,000 34 - -
4 for 1 bonus issue:
'A' ordinary shares of 1p - - 600,000 6
each
Ordinary shares of 1p each - - 3,480,000 35
-------------------- --------------- -------------------- -----------
'A' ordinary shares of 1p 750,000 7 750,000 7
each
Ordinary shares of 1p each 5,250,000 53 4,350,000 44
-------------------- ---------------- --------------------- -----------
Consolidated into 5p
shares:
'A' ordinary shares of 150,000 7 150,000 7
5p each
Ordinary shares of 5p 1,050,000 53 870,000 44
each
-------------------- ---------------- --------------------- -----------
Ordinary share
re-designated as a 'B'
ordinary share of 5p:
'A' ordinary shares of 150,000 7 150,000 7
5p each
'B' ordinary shares of 1 - - -
5p each
Ordinary shares of 5p 1,049,999 53 870,000 44
each
New 'B' ordinary share - - 1 51
issued
------------------- ---------------- --------------------- -----------
10 May 2002 'A' ordinary shares of 150,000 7 150,000 7
5p each
'B' ordinary shares of 1 - 1 -
5p each
Ordinary shares of 5p 1,049,999 53 870,000 44
each
15 May 2002 Authorised share
capital increased:
'B' ordinary shares of 824,693 41 - -
5p each
------------------- ---------------- --------------------- -----------
'A' ordinary shares of 150,000 7 150,000 7
5p each
'B' ordinary shares of 824,694 41 1 -
5p each
Ordinary shares of 5p 1,049,999 53 870,000 44
each
----------------------- ---------------- --------------------- -----------
'A' and 'B' share 2,024,693 101 1,020,001 51
re-designated as
ordinary shares of 5p
each
Authorised share 27,975,307 1,399 - -
capital increased:
348 for 25 bonus issue - - 14,198,400 710
Share options - - 1,447,240 72
exercised
New shares issued - - 3,999,753 200
----------------------- ---------------- --------------------- -----------
31 December Ordinary shares of 5p 30,000,000 1,500 20,665,394 1,033
2002 each
=========== ======= =========== =======
Options have been granted under the Unapproved Scheme, Company Share Option
Plan, the Sharesave Scheme and to HSBC to subscribe for ordinary shares of
the Company as follows:
Scheme Number of shares under option Subscription price Exercise period
per share
Unapproved share option scheme 511,112 #1.50 21/05/02 - 20/05/12
86,957 #1.84 18/10/02 - 17/10/12
Company share option plan 216,666 #1.50 21/05/02 - 20/05/12
2,717 #1.84 18/10/02 - 17/10/12
Sharesave scheme 99,918 #1.50 22/10/05 - 21/04/06
HSBC 206,654 #1.50 22/05/03 - 21/05/06
Property Fund Management plc Employee Benefit Trust (the 'EBT')
The EBT is a discretionary trust established by the Company with the
purpose of encouraging and facilitating the holding of shares in the
Company by or for the benefit of employees. Capita Trust Company (Jersey)
Limited who are independent, offshore trustees operate the EBT. The
beneficiaries under the EBT are the employees and former employees of
group companies (and for these purposes, executive directors are treated
as employees) and certain of their relatives.
A loan and subscription agreement dated 16 May 2002 between the Company
and Capita Trust Company (Jersey) Limited pursuant to which the Company
agreed to lend up to #1,237,039.50 to the trustee of the EBT and to issue
up to 824,693 ordinary shares at the placing price of #1.50 and pursuant
to which the trustee agreed to satisfy the employer's National Insurance
Contributions arising in respect of options granted by it under the
Unapproved scheme.
19. RESERVES
Share Profit and
premium Other loss account
account reserves Total
Group #'000 #'000 #'000 #'000
At 31 December 2001 - 92 752 844
Share issues 6,084 1 (760) 5,325
Expenses of equity share issues (1,291) - - (1,291)
Retained profit for the year - - 611 611
--------------------- ----------------- ---------------- ---------------
At 31 December 2002 4,793 93 603 5,489
========== ========== ========== ==========
20. RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS' FUNDS
2002 2001
#'000 #'000
Profit for the financial year 1,334 961
Dividends paid and proposed on equity shares (723) (832)
New shares issued 5,066 92
--------------------- ---------------
Net addition to shareholders' funds 5,677 221
Opening shareholders' funds 845 624
--------------------- ---------------
Closing shareholders' funds 6,522 845
========== ==========
21. RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
2002 2001
#'000 #'000
Operating profit 1,474 1,609
Depreciation and amortisation charges 268 230
Profit on sale of tangible fixed assets (5) -
Increase in debtors (1,570) (800)
Increase in creditors 379 405
--------------------- ---------------------
Net cash inflow from operating activities 546 1,444
========== ==========
22. ANALYSIS AND RECONCILIATION OF NET FUNDS/(DEBT)
31 December
1 January 2002
2002 Cash flow
#'000 #'000 #'000
Liquid resources - 2,000 2,000
Cash in hand, at bank 389 1,468 1,857
Overdrafts (338) 338 -
--------------------- --------------------- -----------------
51 3,806 3,857
Debt due within one year (55) 55 -
--------------------- --------------------- -----------------
Net (debt)/cash (4) 3,861 3,857
========== ========== ==========
Liquid resources consist of cash, which is not
available on demand.
2002 2001
#'000 #'000
Increase in cash in the year 1,806 299
Cash outflow from decrease in debt and lease financing 55 -
Cash outflow from increase in liquid resources 2,000 -
--------------------- ---------------------
Movement in net debt in the year 3,861 299
Net debt at 1 January (4) (303)
--------------------- ---------------------
Net cash/(debt) at 31 December 3,857 (4)
========== ==========
23. FINANCIAL COMMITMENTS
Annual commitments under non-cancellable operating leases are as follows:
2002 2001
Land and Land and
buildings Other buildings Other
#'000 #'000 #'000 #'000
GROUP
Expiry date
within one year - 39 - 20
between two and five years 4 159 4 292
after five years 318 - 291 -
--------------------- --------------------- --------------------- ---------------------
322 198 295 312
========== ========== ========== ==========
24. PENSION ARRANGEMENTS
The Group operates a number of defined contribution schemes for which the
pension cost charge for the year amounted to #444,000 (2001: #446,000).
25. RELATED PARTY TRANSACTIONS
Transactions with the directors of the Company are disclosed in note 6.
During the year the Group supplied services in the ordinary course of
business to the joint ventures GVio SARL, io Management Germany GmbH and
The io Group Netherlands BV, at a cost of #521,000 (2001: #337,000),
#104,000 (2001: #75,000) and #497,000 (2001: #348,000) respectively.
Amounts owed by the joint ventures are disclosed in note 14. #735,000
(2001: #276,000) of this amount relates to trading balances and #228,000
(2001: #nil) to short-term loans.
26. FINANCIAL INFORMATION
The financial information set out in this preliminary announcement has
been extracted from the Group's accounts, which have been approved by the
Board of Directors.
The financial information set out above does not comprise the Company's
statutory financial statements for the year ended 31 December 2002 or
2001. Statutory financial statements for 2001 have been delivered to the
Registrar of Companies and those for 2002 will be delivered following the
Company's Annual General Meeting. The auditors have reported on those
financial statements. Their reports were unqualified and did not contain
statements under section 237(2) or (3) of the Companies Act 1985.
CONTACT: PROPERTY FUND MANAGEMENT PLC TEL: 020 7535 1818
John Sims, Chief Executive
Andrew Yates, Finance Director
BARON PHILLIPS ASSOCIATES TEL: 020 7397 8932
Baron Phillips 07050 124119
This information is provided by RNS
The company news service from the London Stock Exchange
END
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