interim results for the six months ended 31 st march 2002 20 june 2002
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Interim Results for the Six Months ended 31 st March 2002 20 June 2002. Contents. Corporate Statement Financial Highlights for Six Months ended 31st March 2002 Summary Profit and Loss Account Market Value Balance Sheet NAV Movements Cashflow Debt/Gearing Tenanted Residential - PowerPoint PPT PresentationTRANSCRIPT
Interim Results
for the Six Months
ended 31st March 2002
20 June 2002
Page 2
Contents
Corporate Statement
Financial Highlights for Six Months ended 31st March 2002
Summary Profit and Loss Account
Market Value Balance Sheet
NAV Movements
Cashflow
Debt/Gearing
Tenanted Residential
Bromley Joint Venture
Development and Trading
Management Structure
Way Forward
Page 3
Corporate Statement
Grainger Trust is the UK’s largest quoted residential property investor, directly owning and managing some 5,000 units. Through its joint venture in BPT Limited it has exposure to a further 11,000 units
Its tenanted residential and development activities are strongly cash generative, producing operating cash flows of some £80m pa
Current investment value of tenanted residential portfolio is £324m compared to a vacant possession value of £442m
It also acquires, develops and trades residential and commercial property sites
Page 4
Financial Highlights for Six Months ended 31st March 2002
Pre tax profit (2001: pre exceptional item)
NAV per share *
NNNAV per share
Dividend per share
Tenanted residential sales
Market value of all properties *
VP value of tenanted residential stock *
BPT rationalisation continues - £151m of sales achieved since acquisition
Tenanted residential spend in the first half of £54m
* Note: Properties last revalued 30th September 2001
2002 2001(restated
)
Increase
£16.8m
£13.12
£9.03
3.05p
£26.1m
£466m
£442m
£13.7m
£13.56
£9.00
2.65p
£15.1m
£428m
£389m
+23%
-3%
-
+15%
+73%
+9%
+14%
Page 5
Summary Profit and Loss Account
54.4
9.911.5
-
21.4
(7.7)(3.5)
-
(11.2)
10.2
Turnover
Operating Contributions:-Tenanted ResidentialDevelopment and TradingBromley Joint Venture
Net Interest Payable:-Group Exceptional charge Bromley Joint Venture
Profit before Tax
104.9
16.75.0
15.0
36.7
(4.1)
-
(15.8)
(19.9)
16.8
2002£m
(Restated)
2001
£m
Page 6
Market Value Balance Sheet (Prior to contingent tax)
Properties at market value
31st March 2002£m
30th Sept 2001£m
324142466
1093
24602
(257)(16)
(5)
(278)
(335)(7)
-11
7
(324)
(602)
288140428
1261
23578
(224)(14)
(5)
(243)
(241)(8)
2(25)(63)
(335)
(578)
Tenanted ResidentialDevelopment and TradingTotal Properties
Investments Other AssetsCash Total Assets
Formal Debt Net Current Liabilities Deferred Tax
Total Liabilities
Equity Brought ForwardRetained EarningsTaxation taken to reserves Valuation MovementsGoodwill
Equity Carried Forward
Total Liabilities plus Equity
(Restated)
Page 7
NAV Movements
Opening at 30th September 2001
FRS 19 adjustments
Restated at 30th September 2001
Retained earningsValuation movements on salesTax through reservesGoodwill movements
Total movement
Closing NAV
Less FRS 13Contingent taxTotal adjustments
Closing NNNAV
GT£
Bromley£
Total£
Total£m
(0.04)
0.42 (0.34) (0.02)(0.01)
0.05
(0.15) (1.93) (2.08)
12.22
1.34
13.56
0.27 (0.42
)(0.02
)(0.27
)
(0.44)
13.12
(0.18)
(3.91)
(4.09)
9.03
301.5
33.0
334.5
6.6 (10.2)
(0.4)(6.6)
(10.6)
323.9
(4.3) (96.6) (100.9
)
223.0
1.38
(0.15) (0.08)
(0.26)
(0.49)
(0.03) (1.98) (2.01)
Page 8
Cashflow
Income from: Net rentalsTenanted Residential sales Development and Trading salesWorking capital movements/administration
expenses
Gross operating cashflow
Interest paid (net of loanstock interest) Tax/dividends paid Net new loans
Available for property spend
Tenanted Residential acquisitions Development and trading acquisitions Net receipts from JV/other investments
Increase in cash in the period
62520
(4)
47
(3)(5)32
71
(54) (19)
3
1
2002£m
81439
3
64
(13)(4)(3)
44
(9) (17)
-
18
2001£m
Page 9
Debt/Gearing at 31st March 2002
Fixed Rate
Fixed Over One Year
Hedged Loans
Variable/Fixed Under One Year
Fixed Rate
Fixed Over One Year
Hedged Loans
Variable/Fixed Under One Year
£257m
£224mGross Debt
7.2%
Blended Interest Rate
£233m
£201mNet Debt
£324m
£335mMarket Value Adjusted Equity
72% 60%Gearing
£24m £23mLess: Cash
£54m @
10.24%
£54m @
10.24%
£67m @
6.59%
£67m @
6.59%£62m @
5.64%
£62m @
5.64%
£74m
@5.68%
£74m
@5.68%
£55m @
10.3%
£55m @
10.3%
£53 @
6.2%
£53 @
6.2%£47m @
6.2%
£47m @
6.2%
£69m @
6.1%
£69m @
6.1%
6.9%
31.03.02
30.09.01
31st March 2002 30th September 2001
Page 10
Tenanted Residential - Overview
Stock units up from 4,946 at 30th September 2001 to 5,128
VP value up to £442m from £389m, average VP £86,000 (£75,000)
Investment value up to £324m from £288m – no revaluation performed
Sales performance reflects strong housing market:-
Total return from tenanted residential division up by £6.8m (69%)
Cash spend of £54m (2001:£9m) on tenanted residential properties in first half
No of units sold
Average sale price
Trading profits realised
31.03.02
395
£66K
£13.2m
31.03.01
335
£45K
£7.6m
Page 11
Tenanted Residential Regional VP Summary
London
Other South
Midlands/ North
31st March 2002
30th September 2001
London
Other South
Midlands/ North
£137.7m 31.2%
£137.7m 31.2%
£50.8m 11.5%
£50.8m 11.5%
£253.1m 57.3%
£253.1m 57.3%
£242.1m62.3%
£242.1m62.3%£45.9
m
11.8%
£45.9m
11.8%
£100.5m 25.9%
£100.5m 25.9%
Total £441.6m Total £388.5m
Page 12
Bromley Joint Venture
Rationalisation programme continues, since acquisition to 31st March £151m of properties sold
Major transactions at an advanced stage
- Sale of £70m assured tenancies to an institutional fund
- Refinancing of significant proportion (£45m) of life tenancy portfolio
Both transactions will enable BPT to retain a meaningful interest in the properties
BPT and GT working together to improve working practices and realise operating synergies
Page 13
Development and Trading - Overview
Turnover of £19.5m down from £31.6m – no land sales in the period
Gross rentals down to £2.7m from £4.7m- rationalisation of investment portfolio last year continuing with further sales of £7m to 31st March 2002
Operating profits down to £5.0m from £11.5m – no land sales but profits from residential development and commercial trading
Good progress being made on major development sites:-
- Thurrock, three out of four units sold
- Slough, construction due to complete mid 2003
- Pimlico, forward sale of some 50 out of 79 units proceeding
Construction of final stage of the spine road at Kennel Farm now under way - sale of a 7 acre site prior to the year end likely
Grainger Homes has commenced operations, 27 units under construction, potential to develop 354 new units
Page 14
Management Structure
Stephen Dickinson to become non-executive Deputy Chairman with responsibility for Land Development
Rupert Dickinson to become Managing Director
Sean Slade appointed to the board
Page 15
Way Forward
Continued focus on high margin tenanted residential activities
Use strong cashflow to invest in entrepreneurial development activities
Continue to maximise cash flows from Kennel Farm land sales
Complete rationalisation of BPT to core regulated business
Page 16
Appendices
Detailed Profit and Loss Account
Analysis of Profit and Loss Account
NNNAV Analysis
Effect of FRS 19
Tenanted Residential Performance
Tenanted Residential Stock Analysis
Development and Trading Division
Land Development
Investment in Bromley JV
Page 17
Detailed Profit and Loss Account
Turnover
Gross rents and other income
Property expenses
Net rents
Trading profits
Release of negative goodwill
Administration costs
Operating profit
Share of JV operating profit
Capital profits
Release of negative goodwill
Operating Contribution
Interest payable
Loan stock interest received
Total interest
Net profit before tax and exceptional
Exceptional interest
Net profit before tax
Taxation
Net profit after tax
TenantedResidential
GTTotal
BromleyJV
TotalGT
Group
TotalGT£m
Development
and Trading
TenantedResidential
Developmentand Trading34.3
8.1
(3.4)
4.7
13.2
17.9
(1.2)
16.7
16.7
19.5
2.7
(1.1)
1.6
3.9
5.5
(0.7)
4.8
0.2
5.0
53.8
10.8
(4.5)
6.3
17.1
23.4
(1.9)
21.5
0.2
21.7
(8.1)
4.0
(4.1)
17.6
-
17.6
(6.4)
11.2
51.1
9.7
(2.0)
7.7
3.2
5.8
16.7
(2.9)
13.8
0.4
0.7
14.9
(11.7)
(4.0)
(15.7)
(0.8)
-
(0.8)
(3.1)
(3.9)
104.9
10.8
(4.5)
6.3
17.1
23.4
(1.9)
21.5
13.8
0.6
0.7
36.6
(19.8)
-
(19.8)
16.8
-
16.8
(9.5)
7.3
22.8
7.7
(4.0)
3.7
7.6
11.3
(1.4)
9.9
9.9
31.6
4.8
(0.9)
3.9
7.3
11.2
(0.7)
10.5
1.0
11.5
54.4
12.5
(4.9)
7.6
14.9
22.5
(2.1)
20.4
1.0
21.4
(7.7)
-
(7.7)
13.7
(3.5)
10.2
(3.7)
6.5
Six Months to 31st March 2002 £m Six Months to 31st March 2001 (restated) £m
Page 18
Analysis of Profit and Loss Account
Operating contribution
Write back of negative goodwill
External interest
Contribution before tax and loan stock interest
Loan stock interest received/paid
Exceptional interest charge
Net profit before tax
Tax
Tax from FRS 19
Profit after tax
Earnings per share (p)
21.7
(8.1)
13.6
4.0
17.6
(5.6)
(0.8)
11.2
45.2
8.4
(11.7)
(3.3)
(4.0)
(7.3)
2.2
(5.1)
(20.4)
6.5
6.5
6.5
(5.3)
1.2
4.9
30.1
6.5
(19.8)
16.8
16.8
(3.4)
(6.1)
7.3
29.8
21.4
(7.7)
13.7
13.7
(4.5)
(0.3)
8.9
36.1
(3.5)
(3.5)
1.1
2.4
(9.9)
21.4
(7.7)
13.7
(3.5)
10.2
(3.4)
(0.3)
6.5
26.2
Grainger Trust Bromley
BromleyGoodwill Total
Grainger
Trust8.4
6.5
(11.7)
3.2
(4.0)
(0.8)
2.2
(5.3)
(3.9)
(15.5)
TotalBromley Exceptional
TotalGroup
31st March 2002 £m
31st March 2001 £m
Page 19
NNNAV Analysis
Net asset value (restated)
FRS 13 adjustment
Quoted DebentureInstitutional debtFixed rate debtDerivatives (including BPIL)
Total
Contingent tax
NNNAV
£m
£m
31st March 2002
30th September 2001
per share £
per share £13.12
0.08 0.07 0.03
-
0.18
3.91
9.03
323.9
2.0 1.7 0.6
-
4.3
96.6
223.0
13.56
0.09 0.10 0.03 0.07
0.29
42.7
9.00
334.6
2.2 2.3 0.7 2.0
7.2
105.5
221.9
Page 20
Effect of FRS 19
Provisions made for contingent tax liabilities arising on corporate acquisitions to be reversed
Restatement of opening NAV at 30th September 2001 from £301.5m to £334.6m (12.22p per share to 13.56p per share)
Negative goodwill at 30th September 2001 increased to £63m
Goodwill released to profit and loss account in line with sales. Release in first half of the year £6.5m
Group tax charge increases because of lack of provision. “Excess” tax charge amounts to £6.1m, of which £5.3m relates to the Bromley JV.
Going forward, release of goodwill will increase pre tax profits; tax charge as a percentage of profits will remain high
Page 21
Tenanted Residential Performance
Overall return up from £9.9m to £16.7m (69%)
Average profit per normal unit sold £51K (2001:£30K) at margin on cost of 54.7% (2001:54.3%)
Gross sales value up to £26.1m from sales of 395 units (2001: £15.1m from 335 units)
London/SE
South/South West
Midlands/North
Management Expenses net of other income
Operating Contribution
1.8
0.6
2.3
4.7
9.2
1.2
2.8
13.2
11.0
1.8
5.1
17.9
(1.2)
16.7
5.8
1.4
4.1
11.3
(1.4)
9.9
Net Rents
£m
Trading
Profits £m
Total£m
31st March 2001
Total£m
31st March 2002
Six Months to 31st March 2002
Page 22
Tenanted Residential Stock Analysis
Regulated
Assured periodic
Assured shorthold
Life tenancies
Vacant
Other properties
Total Stock
30th September 2001
3,902
244
500
153
329
5,128
5,128
4,946
143.9
7.9
25.5
6.5
12.8
196.6
10.7
207.3
163.1
87
70
67
100
65
83
75
339.2
17.1
33.7
15.3
21.3
426.6
15.0
441.6
388.5
No. of
Units
Cost£m
AverageVP£K
TotalVP£m
72
72
81
53
90
73
73
% VP
243.5
12.3
27.4
8.2
19.1
310.5
13.7
324.2
287.7
Total£m
12.3
0.9
2.0
0.1
0.0
15.3
0.4
15.7
14.4
Rent£m
Investment Value
At 31st March 2002
Page 23
Development & Trading Division
Investment
Commercial Trading
Residential Land Development
Commercial Development
Residential Development
31st March 2002
30th September 2001
Total Trading Valuation
£142.3m £140.1m
Cost£101.2m £93.6m
Current net rentroll£4.5m £5.4m
£m
£m
16.2 16.2 20.220.2
38.338.3
42.142.1
25.525.5
Investment
Commercial Trading
Commercial Development
Residential Development
18.4 18.4 27.027.0
37.537.541.341.3
15.9 15.9
31.03.02
31.09.01
Residential Land Development
Page 24
Development & Trading Division Major Projects Landmark Place, Slough 190,000sq.ft. £35m mixed use development. Completion
mid 2003, hotel and leisure units prelet, strong interest in ground floor food unit. Office element 69,000 sq.ft.
Thurrock 157,000sq.ft 4 unit award winning industrial scheme. Three units sold for £11m.
Townsend House 80,000sq.ft mixed use development in Victoria. Approach being revised following Inspector’s rejection, existing buildings reversionary and worth more than cost.
Pimlico Construction commenced on mixed used development. Completion mid 2004. GT interest in 79 private apartments, negotiations for forward sale of two thirds of these well advanced.
Macaulay Road, Clapham Application for 90,000sq.ft mixed use scheme submitted. Construction start date estimated 2004.
Clerkenwell Refurbishment of 12,800sq.ft office building complete and Interest from tenants and purchasers.
Page 25
Land Development
Kennel Farm no sales in period but will resume once final infrastructure works undertaken. 37 acres available of which 26 acres are conditionally sold.
option over 640 acre site, approximately 2000 units allocated in local plan. Reserve of 1,000 units also to be allocated. Masterplanning continues, enquiries in public should commence 2003 with OPP possible in 2005/06.
small scale house building division to maximise returns on land sites, mostly in North East England. Construction of 27 houses in hand, with potential currently to develop a total 354 new units.
West Waterlooville
Grainger Homes
Page 26
Investment in Bromley JV
Opening investment 30th September 2001
Restated for FRS 19
Additional share capitalLoan stock repaymentShare of retained lossValuation movementsGoodwill eliminated
Closing investment 31st March 2002
55.1
0.9
54.21.6
(6.3)(3.8)
0.1-
45.8
Statutor
y Account
s
£m
91.6
34.0
125.61.6
(6.3)(3.8)(1.8)(6.5)
108.8
Market Value Balance Sheet
£m
Note: Underlying investment assets have not been revalued at 31st March 2002.
Interim Results
for the Six Months
ended 31st March 2002
20 June 2002