Lon.&Metropolitan - Final Results
March 13 1998 - 10:10AM
UK Regulatory
RNS No 4107e
LONDON & METROPOLITAN PLC
13th March 1998
LONDON & METROPOLITAN PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 1997
London & Metropolitan announces its results for the year ended 31 December
1997.
Operating profits were #3.0 million compared with a loss of #0.8 million in
1996. Net interest payable in the year amounted to #1.2 million (1996: #2.5
million). After the write back of losses taken in prior years of #4.9 million
(1996: Nil), the profit attributable to shareholders was #6.7 million compared
with a loss of #3.3 million in 1996.
During 1997, the recovery in the UK property market created the commercial
environment in which it was possible to seek the agreement of the Group's
bankers to a further financial restructuring. As a result, London &
Metropolitan made substantial progress towards resolving the financial
problems it has faced over the previous six years.
This financial restructuring was announced on 12 May 1997 and comprised three
key elements:
- a debt reduction programme under which most of the Group's properties and
development sites would be sold;
- the conversion of #15.4 million of medium-term indebtedness into one
ordinary share of 5p; and
- the acquisition for a nominal consideration of the non-equity minority
interests in two subsidiary undertakings.
The debt reduction programme was completed by the end of October 1997. As a
result, the repayment date of the Group's residual indebtedness of #2.2
million was extended to 2004 and recourse limited to the realisation of
certain specified assets.
Sales in the year totalled #25.8 million (1996: #3.6 million) and largely
comprised the sale of fourteen properties with an aggregate value of #23.7
million, all of which were sold at or above book value. Of particular note is
that two of the property sales, namely a two hectare B1 site in Sale,
Manchester and an office site in Uxbridge, West London, could deliver future
income to the Group, depending on the successful outcome of the redevelopment
of these sites by the relevant purchasers. Management fee income for the year
was #0.9 million (1996: #0.4 million) and rental income #1.2 million (1996:
#1.7 million). Settlement of an action against a former client for breach of
contract was also satisfactorily concluded.
As a result of the combined impact of the debt reduction programme and the
debt conversion, the Group Balance Sheet position has also improved markedly
in the year, with net debt having been reduced by #33.2 million and
Shareholders Funds have returned to a small, but nevertheless positive, #0.8
million.
Progress continues to be made on developing the Group's retained assets.
At Bicester Park, the eighteen hectare distribution scheme being managed by
the Group, construction of a 8,547m2 warehouse building was completed in June
1997. The building had earlier been pre-let to Bibby Distribution and pre-
sold to BICC Group Pension Fund. On the eight hectare Business and Science
Park at Emersons Green, Bristol, following the securing in May 1997 of a
resolution to grant, discussions have continued towards converting this to a
full planning consent during the first half of 1998.
The Value Retail factory outlet consortium, of which the Group is a member,
continues to move forward. The first phase of the La Roca project, north of
Barcelona, will open this summer and another development in Spain at Las Rozas
on the outskirts of Madrid will commence construction in the autumn. Building
will also commence during 1998 on two other European schemes at Disneyland
Paris and Ingolstadt, near Munich. A number of other projects in Europe have
either been secured, or are under negotiation, by Value Retail.
Prospects
The management of London & Metropolitan continues to pursue a number of new
business opportunities. Preparation for development is well in hand on a
4,500 m2 headquarters office building in Paseo de la Castellana, Madrid and a
project team has been appointed to consider the redevelopment of a 73 hectare
site adjacent to Junction 36 of the M4 at Bridgend.
London & Metropolitan believes that the new business opportunities available
to the Group, when taken together with the potential value of its retained
assets, give the Group a positive future. However, for the foreseeable
future, progress will continue to be constrained by the current size of the
Group and its limited financial resources; both of working capital and of
project financing. In these circumstances, and with the objective of
accelerating the achievement of the Group's full potential, the Board of
London & Metropolitan is recommending an offer from Granchester Holdings PLC
to acquire all the share capital of the Group and a separate announcement has
been made today concerning this offer. Those shareholders who accept the
offer and receive shares in Granchester Holdings PLC will continue to see the
benefits of London & Metropolitan's development programme, but with the added
security which the combined companies will possess.
Enquiries:
Christopher Harris, Chairman and Managing Director
John Aiton, Finance Director
London & Metropolitan PLC
Telephone: 0171 925 2383
Michael Sandler
Hudson Sandler Limited
Telephone: 0171 796 4133
LONDON & METROPOLITAN PLC
SUMMARY CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 1997
Audited Audited
year to year to
31 Dec 97 31 Dec 96
#'000 #'000
Turnover - continuing operations 25,759 3,628
---------- ----------
Operating profit/(loss) - continuing operations 3,025 (811)
Write back of prior years' losses (note 1) 4,975 -
---------- ----------
Profit/(loss) after write back of prior years'
losses 8,000 (811)
Interest receivable and similar income 112 201
Interest payable and similar charges (1,342) (2,709)
---------- ----------
Retained profit/(loss) for the year 6,770 (3,319)
====== ======
Earnings/(loss) per ordinary share (note 3) 14.2p (7.0)p
====== ======
LONDON & METROPOLITAN PLC
SUMMARY CONSOLIDATED BALANCE SHEET
Audited at Audited at
31 Dec 97 31 Dec 96
#'000 #'000
Fixed assets
Tangible assets 45 72
Investments 1,114 1,104
---------- ----------
1,159 1,176
---------- ----------
Current assets 3,472 25,218
Creditors: amounts falling due within one year (1,599) (16,933)
---------- ----------
Net current assets 1,873 8,285
---------- ----------
Total assets less current liabilities 3,032 9,461
Creditors: amounts falling due after more than
one year (2,216) (25,888)
---------- ----------
816 (16,427)
========== =========
Share capital 2,388 2,388
Share premium account 15,457 -
Profit and loss account deficit (17,029) (23,790)
---------- ----------
Equity shareholders' funds/(deficit) 816 (21,402)
Non equity minority interests - 4,975
---------- ----------
816 (16,427)
====== ======
NOTES TO THE PRELIMINARY STATEMENT
1. The write back of prior years' losses arose as a result of the
acquisition, for nominal consideration, of non-equity minority interests
represented by all of the issued preference shares of two subsidiary
companies. This was agreed as part of the financial restructuring.
2. The Directors have received, and have recommended acceptance of, an offer
from Granchester Holdings PLC for the entire issued share capital of the
Company. Subject to acceptance of the offer by shareholders,
Granchester Holdings PLC have indicated that they will provide adequate
working capital support. Consequently, the Directors consider
that it is appropriate for the financial statements to be
prepared on a going concern basis.
3. The earnings/(loss) per share is calculated on the profit/(loss)
attributable to shareholders of #6,769,956 (1996 loss - #3,318,881)
divided by 47,747,589 (1996 - 47,747,588), being the weighted average
number of shares in issue during the year.
4. The above audited results for the year ended 31 December 1997 are an
abridged version of the Group's statutory financial statements which have
not yet been filed with the Registrar of Companies and on which the
auditors, Deloitte & Touche, have given an unqualified report, although
their report makes reference to the fact that in forming their opinion
they have considered the adequacy of the disclosure in the financial
statements concerning the carrying value of developments in progress
and the uncertainty regarding the recoverability of certain costs. The
profit and loss account and balance sheet statements do not constitute
statutory financial statements within the meaning of Section 240 of
the Companies Act 1985 (as amended).
5. The figures for the year ended 31 December 1996 are based on the audited
financial statements for that year, which have been delivered to the
Registrar of Companies and on which the auditors, Deloitte & Touche,
gave an unqualified report, although their report did refer to the
adequacy of the notes to the accounts regarding going concern.
6. The annual report will be posted to shareholders on 27 March 1998.
Copies will be obtainable on request from the Secretary, London &
Metropolitan PLC, Buchanan House, 3 St. James's Square, London, SW1Y 4JU.
END
FR JJMIBLLABBRP
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