RNS Number:2743Z
UK Balanced Property Trust Ltd(The)
29 June 2007
THE UK BALANCED PROPERTY TRUST LIMITED
(Registered in Guernsey - Number 39171)
Administrative Office:
C/o BUTTERFIELD FUND SERVICES (GUERNSEY) LIMITED
P.O. BOX 211, REGENCY COURT, GLATEGNY ESPLANADE, ST. PETER PORT,
GUERNSEY, GY1 3NQ, CHANNEL ISLANDS.
___________________________
TELEPHONE: + 44 1481 720321
FACSIMILE: + 44 1481 716117
e-mail: Funds@bfmgl.gg
Immediate Announcement 29th June 2007
The UK Balanced Property Trust Limited
For the year ended 31 March 2007
Re: Final Results
This Preliminary Statement is prepared on the same basis as set out in the
Annual Accounts of the Company for the year ended 31 March 2007
Chairman's Statement
I have pleasure in presenting the preliminary announcement of The UK Balanced
Property Trust Limited (the "Company") for the year ended 31st March 2007.
It is disappointing to report a share price total return of -1.3%* against the
equivalent measure for the FTSE Real Estate 350 of 22.1%*. There was a good deal
of enthusiasm in the market over the period about the advent of real estate
investment trusts (REITS) in January 2007 which generated a positive movement in
share prices of many UK property companies identified as suitable candidates for
conversion. We note, however, that since the introduction of (REITS) on 1st
January the Company's share price total return actually exceeded that of the
FTSE Real Estate Index. It is also important to note that the Company's
underlying property portfolio produced a total return of 15.0%, much more in
line with the All Property market at 15.8%*. The principal objective of the
portfolio is to maximise its income return and I am pleased to report that the
income return derived from the portfolio exceeds the income return on the IPD
Index over the equivalent period, as it has done since the Company was launched.
During the period under review, shareholders will be aware that we announced the
intention to appoint Cordatus Partners Limited as our Investment Managers in
place of Scottish Widows Investment Partnership Limited. That appointment
became effective on 1st May 2007. The circumstances leading to this appointment
have already been explained in earlier announcements. Given the nature of the
particular property portfolio of the Company, the Board felt that it was
important to ensure the continuity of the management team that had previously
been responsible for the portfolio. Through Cordatus Partners Limited, the
Board still has the continuity of the services of Michael Cunningham, Tom
Laidlaw and Mike Channing.
The Board remains grateful to Scottish Widows Investment Partnership Limited for
having initiated and established the Company.
As you will be aware, unfortunately, we suffered the unexpected loss of Frank
Malcolm during the year. Frank had been a Director of the Company since its
inception. He was a well known and respected figure in the Edinburgh investment
community and he brought to the Board an immense wealth of investment experience
and a great element of good humour. His death brings a great loss to the Board
and to its shareholders.
We extend our sympathy and condolences to his widow and family.
By reason of the initiatives taken by your Board in 2006, in refinancing the
Company's core funding facilities and by appointing Cordatus Partners Limited as
Asset Managers in 2007, we have been able to achieve certain material cost
savings for the benefit of the Company. This has enabled the Board to announce
its intention to increase the level of dividends that will be paid for the
period from 1st April 2007, whilst still maintaining a prudent level of dividend
cover.
On 18 May 2007, Scottish Widows Unit Funds Limited ("SWUF") announced that it
had served a requisition on the Company requiring the Company to convene an
extraordinary general meeting to propose resolutions to remove your current
Directors, appoint directors nominated by SWUF and instruct those new directors
to put forward the SWUF proposals which would involve the liquidation of the
Company.
The Company published a circular to shareholders on 8 June 2007 responding to
that requisition and the SWUF proposals and convening an extraordinary general
meeting for 31 July 2007. The Board unanimously recommends that shareholders
vote against the resolutions requisitioned by SWUF at the extraordinary general
meeting to be held on 31 July 2007.
It is your Directors' intention that, subject to the SWUF resolutions being
rejected by shareholders, they will proceed as quickly as possible to implement
suitable proposals that will offer shareholders the opportunity to realise their
investment in the Company for an amount above net asset value and/or the
opportunity to retain or roll-over their investment in a tax efficient manner in
or into a vehicle that offers a similar investment objective to that of the
Company.
The Directors believe that it is likely that any proposals that will be
implemented will involve the winding up of the Company and therefore it is
unlikely that the Company will continue as a going concern. Accordingly, the
Directors are required to prepare these accounts on a break up basis rather than
on a going concern basis.
28 June 2007
Consolidated Income Statement for the year ended 31 March 2007
2007 2006
#'000 #'000
Income
Gains arising on adjustment to realisable 29,817 56,656
Value on investment properties
Rental Income 24,775 24,810
Total income and realisable value gains 54,592 81,466
Expenditure
Investment management fee (4,476) (4,133)
Property management expenses (1,614) (1,348)
Other expenses (625) (318)
Provision for bad debts (161) (176)
Valuers' fees (161) (143)
Directors' fees (92) (74)
Estimated liquidation costs (3,354) -
Total expenditure (10,483) (6,192)
Operating profit 44,109 75,274
Finance costs
Finance costs (8,236) (13,392)
Interest receivable 1,701 860
Net finance cost (6,535) (12,532)
Profit before taxation 37,574 62,742
Taxation (1,169) (56)
Profit for the year 36,405 62,686
pence pence
Earnings per share for the year attributable to the equity
shareholders of the Company
Basic and diluted
19.05 32.80
Consolidated Balance Sheet as at 31 March 2007
2007 2006
#'000 #'000
Assets
Non-current assets
Investment property - 362,945
Interest rate swap - 1,296
- 364,241
Current assets
Investment property 398,746 -
Interest rate swap 6,698 -
Trade and other receivables 2,290 3,999
Cash and cash equivalents 32,174 38,311
439,908 42,310
Total assets 439,908 406,551
Equity
Capital and reserves attributable to the equity
Shareholders of the Company
Share capital 47,780 47,780
Share premium 142,403 142,403
Revenue reserve (10,168) (7,326)
Capital reserves 120,556 94,926
Other reserve 6,698 1,296
Total equity 307,269 279,079
Liabilities
Non-current liabilities
Interest-bearing notes - 118,857
Deferred income tax - 476
- 119,333
Current liabilities
Interest-bearing notes 121,513 -
Deferred income tax 1,010 -
Trade and other payables 8,282 8,139
Provisions 1,834 -
132,639 8,139
Total Liabilities 132,639 127,472
Total equity and liabilities 439,908 406,551
pence pence
Net Asset Value per share 160.77 146.02
Consolidated Statement of Changes in Equity for the year ended 31 March 2007
Issued Share Capital Other Retained Revenue
Capital Premium Reserves reserve Earnings Reserve Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Balanced at 1 47,780 142,403 43,987 (3,879) - (5,456) 224,835
April 2005
Profit for - - - - 62,686 - 62,686
the year
Dividends - - - - (13,617) - (13,617)
paid and
declared
Transfer in - - 56,656 - (56,656) - -
respect of
gains arising
on adjustment
to realisable
value on
investment
properties
Transfer of - - - - 1,870 (1,870) -
retained
earnings
Movement in - - - (1,838) - - (1,838)
realisable
value on the
cash flow
hedge
(loan
interest rate
swap)
Termination - - (5,717) 5,717 5,717 - 5,717
of loan
interest rate
swap
Movement in - - - 1,296 - - 1,296
realisable
value on the
cash flow
hedge (notes
interest rate
swap)
Balance at 31 47,780 142,403 94,926 1,296 - (7,326) 279,079
March 2006
Profit for - - - - 36,405 - 36,405
the year
Dividends - - - - (13,617) - (13,617)
paid and
declared
Transfer in - - 29,817 - (29,817) - -
respect of
gains arising
on adjustment
to realisable
value on
investment
properties
Transfer in - - (300) - 300 - -
respect of
advisory fees
in assocation
with the
change of
investment
manager
Amortisation - - (1,733) - 1,733 - -
of the notes
issue costs
Transfer in - - (2,154) - 2,154 - -
respect of
estimated
disposal fees
on the sale
of investment
properties on
liquidation
Transfer in - - - 1,200 (1,200) -
respect of
estimated
liquidation
costs
Transfer of - - - - 1,642 (1,642) -
retained
earnings
Movement in - - - 5,402 - - 5,402
realisable
value on the
cash flow
hedge (notes
interest rate
swap)
Balance at 31 47,780 142,403 120,556 6,698 - (10,168) 307,269
March 2007
Consolidated Cash Flow Statement for the year ended 31 March 2007
2007 2006
#'000 #'000
Cash flows from operating activities
Operating profit 44,109 75,274
Adjustment for:
Gains arising on adjustment to realisable value on (29,817) (56,656)
investment properties
Decrease in trade and other receivables 599 5,025
(Increase/decrease) in trade and other payables 3,458 (586)
(25,760) (52,217)
Finance costs (5,295) (6,516)
Interest received 1,299 745
Tax refunded - 100
(3,996) (5,671)
Net cash generated from operating activities 14,353 17,386
Cash flows from investing activities
Purchases of investment properties (33,550) (7,150)
Proceeds from the sale of investment properties 26,720 47,337
Capital expenditure on investment property (7) (351)
Net cash (used) / earned in investing activities (6,837) 39,836
Cash flows from financing activities
Dividends paid to the Company's shareholders (13,617) (13,617)
Repayment of bank loan - (123,400)
Termination of the loan interest rate swap - (5,717)
Interest-bearing notes issue proceeds - 120,000
Issue costs of the notes (36) (1,826)
Net cash used in financing activities (13,653) (24,560)
Net (decrease) / increase in cash and cash equivalents (6,137) 32,662
for the year
Opening cash and cash equivalents 38,311 5,649
Closing cash and cash equivalents 32,174 38,311
Notes to the Financial Statements
1. Accounting policies
A summary of the principal accounting policies, all of which have been
consistently applied throughout the year, is set out below. The accounts have
been prepared on the same basis as the prior year except for the adjustments
required to prepare them on a break up basis.
(a) Basis of preparation
The consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards ('IFRS') issued by, or adopted
by, the International Accounting Standards Board ('IASB') interpretations issued
by the International Financial Reporting Interpretations Committee ('IFRIC'),
applicable legal and regulatory requirements of Guernsey Law and the Listing
Rules of the UK Listing Authority.
The consolidated financial statements have been prepared on a break up
basis due to the Directors' belief that the Company will be unable to continue
as a going concern. As such, all financial assets and liabilities have been
classed as current and provisions have been included in the financial statements
for the estimated liquidation expenses. Investment properties have been written
down to their realisable value.
IFRS 7, Financial Instruments: Disclosures, and the complementary
amendment to IAS 1, Presentation of Financial Statements - Capital Disclosures
were not early adopted by the Company as they are mandatory for companies with
accounting periods beginning on or after 1 January 2007. The Company will apply
these standards from 1 April 2007. The adoption of IFRS 7 will introduce new
disclosures relating to financial instruments.
(b) Basis of consolidation
The consolidated financial statements comprise the financial
statements of the Company and all of its subsidiary undertakings up to 31 March
each year. Subsidiaries are entities, including special purpose entities, over
which the Company has control. Control is deemed to exist when the Company has
the power, directly or indirectly, to govern the financial and operating
policies of any entity so as to obtain benefits from its activities.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group and cease to be consolidated from the date on which
control is transferred out of the Group. Inter-company transactions, balances
and unrealised gains on transactions between the Group companies are eliminated.
Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.
2. Earnings per ordinary share
The basic and diluted earnings per share is based on the net earnings for the
year of #36,405,000 (2006: #62,686,000) and on 191,121,000 ordinary shares
(2006: 191,121,000), being the weighted average number of ordinary shares in
issue throughout the year.
3. Shares in issue
The closing number of shares in issue at 31st March 2007 is 191,121,000 (2006:
191,121,000).
4. Dividends on ordinary shares
During the year the following dividends were paid:
Final interim dividend paid on 26 April 2006 of 1.78125 pence per share,
totalling #3,404,000
First interim dividend paid on 26 July 2006 of 1.78125 pence per share,
totalling #3,404,000
Second interim dividend paid on 25 October 2006 of 1.78125 pence per share,
totalling #3,404,000
Third interim dividend paid on 31 January 2007 of 1.78125 pence per share,
totalling #3,405,000
A final interim dividend of 1.78125 pence per share, #3,404,000, was declared on
3 April 2007. The ex-dividend date was 11 April 2007 and the pay date was 25
April 2007.
5. Annual financial statements
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the year ended 31 March 2007. Statutory
accounts for the year ended 31 March 2006 have been delivered to the Registrar
of Companies. The auditors have reported on those accounts; their report was
unqualified and did not contain statements under section 237(2) or (3) of the
Companies Act 1985. Statutory accounts for the year ended 31 March 2007 have
been approved, audited but not yet filed with the Registrar of Companies.
Full accounts for the year to 31 March 2007 will be sent to shareholders in July
2007 and will be available for inspection at Regency Court, Glategny Esplanade,
St Peter Port, Guernsey, the registered office of the Company.
The financial information for the year ended 31 March 2006 is derived from the
statutory accounts delivered to the Registrar of Companies.
6. Annual General Meeting (AGM)
The AGM is to be held at 12 noon on Friday 31 August 2007 at Regency Court,
Glategny Esplanade, St Peter Port, Guernsey, GY1 3NQ.
All Enquiries:
The Company Secretary
Butterfield Fund Services (Guernsey) Limited
PO Box 211
Regency Court
Glategny Esplanade
St Peter Port,
Guernsey
GY1 3NQ
Tel: 01481 720321
Fax: 01481 716117
This information is provided by RNS
The company news service from the London Stock Exchange
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