TIDMWSP
RNS Number : 6560S
Wynnstay Properties PLC
07 November 2023
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement, this information is considered to
be in the public domain.
WYNNSTAY PROPERTIES PLC
("Wynnstay" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHSED 29 SEPTEMBER 2023
7 November 2023
CHAIRMAN'S STATEMENT
I am pleased to report to shareholders on the six-month period
ended 29 September 2023. In this period, our plans for management
succession that we announced last summer have been successfully
completed and the portfolio has continued to deliver good financial
results for shareholders.
Interim Financial Results
The unaudited results are summarised in the table below and
should be read in conjunction with the following commentary and
financial statements:
29 September 29 September
2023 2022
Rental Income +12.4% GBP1,216,000 GBP1,082,000
Property Income +12.8% GBP1,221,000 GBP1,082,000
Operating Income +9.1% GBP873,000 GBP800,000
Income before Taxation +12.1% GBP658,000 GBP587,000
Earnings per share +7.0% 18.4p 17.2p
Net Asset Value per share +1.9% 1,114p 1,093p
Interim Dividend per share +5.6% 9.5p 9.0p
Rental income for the half-year increased by 12.4% compared to
the same period last year, to GBP1,216,000 (2022: GBP1,082,000).
This increase reflects principally the acquisition in May 2023 of
Riverdale Industrial Estate, Tonbridge.
Other property income of GBP5,000, being service charge related
management fees, were received in the half-year (2022: GBPnil).
While overall operating costs were at a slightly higher level than
in the same period last year due to one-off costs associated with
management succession, operating income increased by 9.1% to
GBP873,000 (2022: GBP800,000).
Borrowings from Handelsbanken of GBP9.958 million at the end of
the half-year (2022: GBP9.945 million) reflects our five-year loan
fixed at a rate of 3.61% from December 2021. At the end of the
half-year, we held cash balances of GBP1.0 million available for
use in the business. In addition, we have available the undrawn
GBP5.0 million revolving credit facility with Handelsbanken.
Management Succession
I reported in my statement in June that Paul Williams had
decided to retire as Managing Director and that Christopher Betts,
a Chartered Surveyor with over 30 years' experience, had been
appointed to succeed him following a short handover period.
Chris joined Wynnstay, as planned, in mid-July and worked
alongside Paul over the following weeks familiarising himself with
the portfolio and business, and finally taking over fully from Paul
as Managing Director in early September when he also joined the
Board. The handover was completed smoothly, on schedule and without
any issues.
In his first Managing Director's Review following below, Chris
describes the handover from Paul and portfolio activity over the
past six months.
Dividend
In light of the financial results, the Board has decided to pay
an increased interim dividend of 9.5p per share (2022: 9.0p) on 15
December 2023 to those shareholders on the register at the close of
business on 17 November 2023.
In the current inflationary conditions, the Board appreciates
the importance to many shareholders of their investment income and
of providing an attractive yield on the Company's shares. The
increase in the interim dividend for this half-year is 5.6%
compared to the same period last year.
Outlook
In the period following my statement in June, the economic
outlook in the UK appeared to be improving to some extent, with
reduced inflation and better performance data than many forecasters
had expected earlier in the year. This reduced the threat of
imminent recession and its consequences.
It did not, however, remove the underlying concerns about
economic growth, the level of public debt, business investment and
consumer spending. The direction and medium-term level of interest
rates, now at their highest rate for seventeen years, remain
unclear. In recent weeks, the mood has changed again with
increasing concerns about the economy compounded by international
conflicts and anticipated future energy prices. In addition,
political uncertainty in the UK, which impacts the economic
outlook, now seems likely to prevail until after the forthcoming
general election.
Wynnstay's portfolio and financial performance have proved
resilient despite the continuing economic and political
uncertainties and conditions that affect the commercial property
market as well as business and consumer sentiment and activity. The
Board remains optimistic about the current outlook for Wynnstay's
business and considers that we are well positioned to take
advantage of opportunities to continue to enhance the portfolio. I
will report to shareholders again in our Annual Report, which will
be published in mid-June 2024. Our Annual General Meeting next year
will be held, as usual, at the RAC Club on Tuesday 16 July
2024.
Finally, on behalf of the Board, I take this opportunity to
thank shareholders for their continued interest in and support for
Wynnstay and send our best wishes for a Happy Christmas and for
2024 .
Philip Collins
Chairman
7 November 2023
MANAGING DIRECTOR'S REVIEW
It is with great pleasure that I set out my first report to
shareholders as Managing Director. The handover by Paul Williams
over an eight-week period from mid-July was very effective. The
result is that I have been able to settle into the role with the
benefit of a good period of time to familiarise myself with the
properties, tenants, suppliers and the Company's way of working. In
addition, I have been briefed on current and upcoming issues and
opportunities.
Portfolio Activity
As reported in our last Annual Report, we completed the purchase
of Riverdale Industrial Estate, Tonbridge in May 2023. The initial
rental income of GBP140,350 p.a. on acquisition has been boosted by
the rent reviews on three of the five units which have now been
agreed at the levels anticipated on purchase, effective from
September 2022. These settlements set a good base for the ongoing
negotiations for renewal of the lease of the prominently situated
Unit 1 which are expected to conclude later this year.
Earlier this year the tenant of the Hertford property served
notice of their intention to vacate on expiry of the lease in
October 2023. Agents were instructed to market the property and an
offer to purchase the freehold was received from a regional motor
trade business. Opportunities for owner-occupiers are rare and we
were able to agree an attractive price of GBP910,000, generating a
profit before tax and costs over the investment value at March 2023
of GBP295,000. Completion took place simultaneously with exchange
of contracts on 25 October.
Two other units became vacant in the first half of the year. A
tenant in Uckfield decided, on retirement of the owner from his
business, not to renew its lease in June. However, we were able to
quickly agree terms for a new open market letting and this
completed in August 2023 at a rent ahead of the estimated rental
value used by the valuers in the March 2023 valuation. In the face
of rent arrears, the lease of a unit in Hailsham was forfeited in
May 2023 and the tenant was subsequently declared insolvent.
Remarketing brought several expressions of interest, and the unit
is now under offer at a rent in excess of the estimated rental
value used by the valuers in the March 2023 valuation, conditional
on some external maintenance works and an updated planning use
permission.
Two tenants of single units in Aylesford have exercised lease
break clauses effective in the second half of the year. Whilst
these decisions are disappointing, we remain confident of reletting
prospects in the light of past experience, limited supply in the
area and our constructive and pragmatic approach to attracting new
tenants. This optimism is borne out by the successful creation of a
new long-term tenancy at Aylesford from the desire of a tenant to
assign their short-term lease. We have also successfully renewed
the leases held by the main tenant at Heathfield with a significant
increase in rent.
In the Managing Director's review in the Annual Report in June,
we reported that all rental income due for the first quarter of the
financial year had been received. I am pleased to report that no
rent is outstanding for the second quarter except for a small
element that is subject to a loss of rent insurance claim following
water ingress. For the third quarter, commencing 29 September 2023,
we have collected 99% of the aggregate quarterly and monthly rents
due by 1 November.
We continue to monitor the market and consider suitable
investment opportunities. With our principal borrowing being at a
fixed rate, our low loan-to-value ratio and with both cash and a
further borrowing facility available, we remain in a good position
to take advantage of market opportunities.
Christopher Betts
Managing Director
7 November 2023
1. STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended
29 September 29 September 25 March
2023 2022 2023
GBP'000 GBP'000 GBP'000
Property Income 1,221 1,082 2,312
Property Costs (26) (24) (96)
Administrative Costs (328) (258) (719)
------------- ------------- ------------
Net Property Income 867 800 1,497
Movement in fair value
of
Investment Properties 6 - 345
Operating Income 873 800 1,842
Investment Income 11 5 27
Finance Costs (226) (218) (439)
------------- ------------- ------------
Income before Taxation 658 587 1,430
Taxation (162) (120) (288)
------------- ------------- ------------
Income after Taxation
and Total Comprehensive
Income 496 467 1,142
============= ============= ============
Basic and diluted
earnings per share 18.4p 17.2p 42.2p
The company has no other items of comprehensive income.
2. STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
29 September 29 September 25 March
2023 2022 2023
GBP'000 GBP'000 GBP'000
Non-Current Assets
Investment Properties 41,819 38,975 39,320
Investments 3 3 3
------------- ------------- ---------
41,822 38,978 39,323
------------- ------------- ---------
Current Assets
Trade and other receivable 382 362 482
Cash and Cash Equivalents 996 3,207 3,268
------------- ------------- ---------
1,378 3,569 3,750
------------- ------------- ---------
Current Liabilities
Trade and other payables (698) (766) (844)
Income Taxes Payable (484) (404) (308)
(1,182) (1,170) (1,152)
------------- ------------- ---------
Net Current Assets / (Liabilities) 196 2,399 2,598
------------- ------------- ---------
Total Assets less Current
Liabilities
Less Current
LLiabilities 42,018 41,377 41,921
Non-Current Liabilities
Bank Loans Payable (9,958) (9,945) (9,951)
Deferred Tax Payable (2,034) (1,962) (2,034)
------------- ------------- ---------
(11,992) (11,907) (11,985)
) )
Net Assets 30,026 29,470 29,936
============= ============= =========
Capital and Reserves
Share Capital 789 789 789
Capital Redemption Reserve 205 205 205
Share Premium Account 1,135 1,135 1,135
Treasury Shares (1,734) (1,734) (1,734)
Retained Earnings 29,631 29,075 29,541
------------- ------------- ---------
30,026 29,470 29,936
============= ============= =========
Net Asset Value pence per
share 1,114p 1,093p 1,110p
3. STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
29 September 29 September 25 March
2023 2022 2023
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Income before taxation 658 587 1,430
Adjusted for:
(Increase) in fair value of investment
properties - - (345)
Interest receivable (11) (5) (27)
Interest and finance costs payable 226 218 439
Amortised loan fees 7 7 13
Revaluation movement - - 33
Changes in:
Decrease / (increase) in trade and
other receivables 100 (61) (181)
Increase / (decrease) in trade and
other payables 30 (162) (181)
------------ ------------------- --------
Cash generated from operations 1,010 584 1,181
Income taxes paid (162) (111) (206)
------------ ------------------- --------
Net cash from operating activities 848 473 975
============ =================== ========
Cash flows from investing activities
Interest and other income received 11 5 27
Purchase of investment properties (2,499) - -
Net cash generated from investing
activities (2,488) 5 27
============ =================== ========
Cash flows from financing activities
Interest paid (226) (218) (439)
Dividends paid (406) (380) (622)
Repurchase of shares into treasury - (164) (164)
Net cash used in financing activities (632) (762) (1,225)
============ =================== ========
(Decrease) / increase in cash and
cash equivalents (2,272) (284) (223)
------------ ------------------- --------
Cash and cash equivalents at beginning
of period 3,268 3,491 3,491
------------ ------------------- --------
Cash and cash equivalents at end
of period 996 3,207 3,268
============ =================== ========
4. STATEMENT OF CHANGES IN EQUITY
UNAUDITED SIX MONTHSED 29 SEPTEMBER 2023
Share Capital Share Treasury Retained Total
Capital Redemption Premium Shares Earnings
Reserve Account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 26 March 2023 789 205 1,135 (1,734) 29,541 29,936
Total comprehensive income
for the period - - - - 496 496
Dividends - - - - (406) (406)
--------------------------- -------- ----------- -------- -------- --------- -------
Balance at 29 September
2023 789 205 1,135 (1,733) 29,631 30,026
=========================== ======== =========== ======== ======== ========= =======
UNAUDITED SIX MONTHSED 29 SEPTEMBER 2022
Share Capital Share Treasury Retained Total
Capital Redemption Premium Shares Earnings
Reserve Account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 26 March 2022 789 205 1,135 (1,570) 28,988 29,547
Total comprehensive income
for the period - - - - 467 467
Treasury share repurchases - - - (164) - (164)
Dividends - - - - (380) (380)
--------------------------- -------- ----------- -------- -------- --------- -------
Balance at 29 September
2022 789 205 1,135 (1,734) 29,075 29,470
=========================== ======== =========== ======== ======== ========= =======
AUDITED YEARED 25 MARCH 2023
Share Capital Share Treasury Retained Total
Capital Redemption Premium Shares Earnings
Reserve Account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 26 March 2022 789 205 1,135 (1,570) 28,988 29,547
Total comprehensive income
for the year - - - - 1,142 1,142
Treasury share repurchases - - - (164) - (164)
Revaluation movement - - - - 33 33
Dividends - - - - (622) (622)
--------------------------- -------- ----------- -------- -------- --------- -------
Balance at 25 March 2023 789 205 1,135 (1,734) 29,541 29,936
=========================== ======== =========== ======== ======== ========= =======
5. ACCOUNTING POLICIES
Wynnstay Properties PLC is a public limited company incorporated
and domiciled in England and Wales (registered no: 22473). The
principal activity of the company is property investment,
development and management. The Company's ordinary shares are
traded on AIM, part of the London Stock Exchange (ISIN:
GB0009842898).
Basis of preparation
These unaudited condensed interim financial statements have been
prepared in accordance with International Financial Reporting
Standard ("IFRS") IAS 34 Interim Financial Reporting. They do not
constitute statutory accounts within the meaning of section 435 of
the Companies Act 2006.
The unaudited condensed interim financial statements should be
read in conjunction with the financial statements of the Company as
at and for the year ended 25 March 2023 which were prepared in
accordance with IFRS. The financial information for the six month
periods ended 29 September 2023 and 29 September 2022 have not been
audited and the auditors have not reported on or reviewed these
interim financial statements. The information for the year ended 25
March 2023 has been extracted from the latest published audited
financial statements.
Key sources of estimation uncertainty and judgements
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that may affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expenses.
Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that
period. The key sources of estimation uncertainty that have a
significant risk of causing material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are those relating to the fair value of investment properties.
Investment properties
All the Company's investment properties are independently
revalued annually and stated at fair value at 25 March. The
aggregate of any resulting increases or decreases are taken to
operating income within the Statement of Comprehensive Income.
Depreciation
In accordance with IAS 40, freehold investment properties are
included in the Statement of Financial Position at fair value and
are not depreciated. The Company has no other plant and
equipment.
Disposal of investments
The gains and losses on the disposal of investment properties
and other investments are included in Operating Income in the year
of disposal. Gains and losses are calculated on the net difference
between the carrying value of the properties and the net proceeds
from their disposal.
Property income
Property income is recognised on a straight-line basis over the
period of the lease and is measured at the fair value of the
consideration receivable. Lease deposits are held in separate
designated deposit accounts and are thus not treated as assets of
the Company in the financial statements. All income is derived in
the United Kingdom. Other property income includes dilapidations,
lease surrender premiums and other property related receipts.
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
29 September 29 September 25 March
2023 2022 2023
GBP'000 GBP'000 GBP'000
Rental income 1,216 1,082 2,304
Other property income 5 - 8
------------ ------------ --------
1,221 1,082 2,312
------------ ------------ --------
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax. Current tax is the expected tax payable on the
taxable income for the period based on the tax rate enacted or
substantively enacted at the reporting date, and any adjustment to
tax payable in respect of prior years. Taxable profit differs from
income before tax because it excludes items of income or expense
that are deductible in other years, and it further excludes items
that are never taxable or deductible.
Deferred taxation is the tax expected to be payable or
recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding
tax bases used in the computation of taxable profits; and is
accounted for using the statement of financial position liability
method. Deferred tax liabilities are recognised for all taxable
temporary differences (including unrealised gains on revaluation of
investment properties) and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be
utilised.
The Company provides for deferred tax on investment properties
by reference to the tax that would be due on the sale of the
investment properties. Deferred tax is calculated at the rates that
are expected to apply in the period when the liability is settled,
or the asset is realised. Deferred tax is charged or credited to
Income after Taxation, including deferred tax on the revaluation of
investment properties.
Trade and other accounts receivable
Trade and other receivables are initially measured at the
operating lease measurement value and subsequently measured at
amortised cost as reduced by appropriate allowances for expected
credit losses. All receivables do not carry any interest and are
short term in nature.
Cash and cash equivalents
Cash comprises cash at bank and on demand deposits. Cash
equivalents are short term (less than three months from inception),
repayable on demand and are subject to an insignificant risk of
change in value.
Trade and other accounts payable
Trade and other payables are initially measured at fair value
and subsequently measured at amortised cost. All trade and other
accounts payable are non-interest bearing.
Comparative information
The information for the year ended 25 March 2023 has been
extracted from the latest published audited financial
statements.
Pensions
Pension contributions towards an employee's pension plan are
charged to the Statement of Comprehensive Income as incurred. The
pension plan is a defined contribution scheme.
Borrowings
Interest rate borrowings are initially recognised at fair value,
being proceeds received less any directly attributable transaction
costs. Borrowings are subsequently stated at amortised cost. Any
difference between the proceeds (net of transaction costs) and the
redemption value is recognised in profit or loss over the period of
the borrowings using the effective interest method. Borrowings are
classified as current liabilities unless the Company has an
unconditional right to defer settlement of the liability for at
least 12 months after the reporting date.
Dilapidations
Dilapidations receipts are recognised in the Statement of
Comprehensive Income when the right to receive them arises. They
are recorded in revenue as other property income unless a property
has been agreed to be sold whereby the receipt is treated as part
of the proceeds of sale of the property.
Share Buy-Back and Treasury Shares
During the period the Company did not acquire any Ordinary
Shares (2022: 15,000 shares acquired) under the authority to make
market purchases of its shares approved at the General Meeting on
19 July 2022. The shares acquired are held in treasury and all the
costs directly associated with the share buy-back are included
within Treasury Shares in the Statement of Financial Position.
6. DIVIDS
Period Payment Per share Amount paid/proposed
Date (pence) GBP'000
6 months to 29 September 2023 15 December 2023 9.5 256
6 months to 29 September 2022 16 December 2022 9.0 244
Year ended 25 March 2023 27 July 2023 15.0 406
7. EARNINGS PER SHARE AND NET ASSET VALUE PER SHARE
Basic earnings per share are calculated by dividing income after
taxation and Total Comprehensive Income attributable to Ordinary
Shareholders of GBP496,000 (2022: GBP467,000) by the weighted
average number of 2,696,617 (2022: 2,709,692) Ordinary Shares in
issue during the period excluding shares held in treasury. Net
Asset value per share is calculated by dividing net assets of
GBP30,026,000 (2022: GBP29,470,000) by the number of 2,696,617
Ordinary Shares in issue at the reporting date excluding shares
held in treasury. There are no options and no instruments in issue
that would have the effect of diluting earnings per share.
For further information please contact:
Wynnstay Properties PLC
Philip Collins (Chairman)
020 7554 8766
WH Ireland Limited (Nominated Adviser and Broker)
Hugh Morgan, Chris Hardie, Sarah Mather
020 7220 1666
LEI number: 2138006MASI24JYW5076
For more information on Wynnstay visit:
www.wynnstayproperties.co.uk
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