TIDMTHG
RNS Number : 5976V
Terrace Hill Group PLC
14 July 2009
14 July 2009
Terrace Hill Group PLC
("Terrace Hill" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS TO 30 APRIL 2009
Terrace Hill Group plc (AIM: THG), a leading UK property investment and
development group, today announces interim results for the six months to 30
April 2009.
Financial highlights
·Adjusted Diluted Net Asset Value per share (EPRA) of 44.4p (31 October 2008:
58.0p)
-Triple Net Asset Value per share of 40.4p (31 October 2008: 53.4p)
·Loss before tax of GBP30.8 million including unrealised revaluation losses of
GBP29.7 million
-Operating loss for the period, excluding property write-downs, was GBP1.1
million, reflecting a period of limited trading activity
·Substantial re-financing of GBP344 million agreed in principle
-Maturity profile improved to an average of 32 months.
Operational highlights
·Detailed planning consents gained at:
-Howick Place, for 135,000 sq ft of offices and 33 apartments
-A 92,333 sq ft Sainsburys food store at Bishop Auckland
-A 45,000 sq ft Design Centre at the Baltic Business Quarter in Gateshead
·Planning approvals also received for two housebuilding sites in Scotland
·Value of the Groups residential investment portfolios fell by 6.1% in the
period, outperforming the Halifax HPI, which reported a reduction of 8.0%
·Substantial capital available from new and established joint venture partners
for new business
·Since the period end the Group has also :
-Pre-let a 38,500 sq ft office building on Teesside to Middlesbrough Primary
Care Trust at an initial rent of GBP635,000 per annum
-Let the fifth floor of 8,100 sq ft at 129 Wilton Road for GBP364,500 per annum
-Completed the sale of an 8,000 sq ft office building in north Bristol to
Sovereign Housing for GBP1.8 million
-Let 7,900 sq ft of industrial space to Menzies in Eastbourne at an initial rent
of GBP59,317 per annum
-Achieved various lettings at Canningford House in Bristol equivalent to
GBP95,000 per annum
Commenting, Robert Adair, Chairman of Terrace Hill, said: "Our ability to manage
our debt position, re-finance loans and implement cost control measures, coupled
with the successful management of our existing assets and the profitable new
business we continue to transact, gives me confidence that we are well
positioned to outperform in the medium term."
Philip Leech, Terrace Hill's chief executive, added: "We believe the current
market conditions play to our established strategy of buying secondary
properties and sites and applying our development and letting skills to create
prime investment properties.Where appropriate, we will also continue our
business model of carrying out commercial development projects in joint venture
with financial partners, which allows us to make a higher return on our equity
committed while minimising our exposure to risk. In addition, we continue to
experience strong demand from food retailers for new stores and from Government
backed office occupiers for pre-lets, as evidenced by our recently announced
successes."
For further information:
Terrace Hill Group plc Tel: +44 (0)20 7631
1666
Robert Adair, Chairman
Philip Leech, Chief Executive
Oriel Securities (Nominated Adviser) Tel: +44 (0)20 7710 7600
Richard Crawley
Daniel Conti
Financial Dynamics Tel: +44 (0)20 7831 3113
Stephanie Highett/Richard Sunderland/Rachel Drysdaleterracehill@fd.com
CHAIRMAN'S STATEMENT
I am pleased to report our unaudited results for the six months ended 30 April
2009. The period has continued to be one of difficulty for the property markets
with capital values declining, occupational markets suffering and rental values
falling across all sectors. Notwithstanding this, we have achieved some notable
successes with lettings of our existing stock and the pre-letting of new
developments. During the reporting period, we made good progress across our
areas of operation, including a number of important planning gains, and with
re-financing and extending our debt facilities as they fall due. This progress
continued into the second half and in recent weeks we have concluded a large
38,500 sq ft office pre-letting to a Primary Care Trust; let an 8,100 sq ft
floor at 129 Wilton Road, our office development in Victoria, London; let 7,900
sq ft of industrial space to Menzies in Eastbourne; and completed the sale of an
office building to Sovereign Housing in Bristol. We are also continuing to work
on a significant number of supermarket development opportunities following on
from the success of our recent transactions with Sainsbury's.
In line with most in the sector, during the six months under review, adjusted
diluted net asset value (as defined by EPRA, the European Public Real Estate
Association) has declined by 23.5% to 44.4 pence per share (31 October 2008:
58.0 pence per share) and our triple net asset value (TNAV) has fallen by 24.4%
to 40.4 pence per share (31 October 2008: 53.4 pence per share). The TNAV takes
account of any valuation uplifts above book costs, as well as contingent tax on
prospective gains and adjustments for financial instruments.
Our dividend policy, as outlined in my last statement with the accounts for the
year ended 31 October 2008, has been to vary the amount of our dividend in line
with the movement in our TNAV. We paid a dividend of 0.54 pence per share to
shareholders in April 2009 in accordance with this policy. Given the further
reduction in our TNAV and the restricted trading conditions, the board has
decided not to pay a dividend at this interim stage. We will review this policy
again at the year-end and remain committed to resuming a progressive dividend
policy once market conditions have improved.
The Group's loss before tax for the period amounted to GBP30.8 million (six
months to 30 April 2008: GBP4.4 million profit). Excluding property write downs,
our loss before tax for the period was GBP1.1 million, reflecting a period of
limited trading activity.
We have also continued to make good progress with our re-financings. Since 31
October 2008, GBP30.1 million of Group debt has been re-financed and terms have
been agreed in principle on GBP39.3 million of Group debt where the maturity has
been extended for an average period of 30 months. Terms have also been agreed in
principle in respect of GBP260.4 million of associate/JV debt. The Group has a
further GBP9.5 million of re-financings still to agree where the existing
maturity falls in 2009. We continue to enjoy good relationships with all of our
lending banks and remain confident that acceptable terms will be agreed for the
remaining loans.
Outlook
There are encouraging signs of values stabilising in the prime commercial market
although the value of secondary properties continues to fall. This presents a
clear opportunity for us to generate good development margins by recycling
secondary investments and sites into prime assets. Our recent successes in
concluding pre-lettings to supermarket retailers and Government backed office
occupiers demonstrates our ability to create new business, despite difficult
economic conditions.
In addition, we are continuing to have discussions with new, as well as
established financial partners regarding potential co-investments in our new
development pipeline. This will ensure that the Group is well placed, with
sufficient capital available to fully exploit opportunities as they arise.
The value of residential property continues to decline, albeit at a much slower
rate than before. The specific locations and intentionally affordable nature of
our portfolios has led to outperformance of most House Price Indices and I
foresee stability returning as liquidity and availability of mortgage financing
improves in the medium term.
Our ability to manage our debt position, re-finance loans and implement cost
control measures, coupled with the successful management of our existing assets
and the profitable new business we continue to transact, gives me confidence
that we are well positioned to outperform in the medium term.
Robert Adair
Chairman
14 July 2009
REVIEW OF OPERATIONS AND FINANCE REVIEW
Commercial Property
The recession and the low availability of bank debt continue to affect the
commercial property market. Capital values have fallen by more than 45% since
the start of the downturn, although the pace of decline has slowed markedly in
recent months.
Encouragingly, prime property values show signs of stabilising although
secondary values are continuing to fall. According to IPD, "All Property"
equivalent yields have reached 9.3%, the highest since 1993 and reflect a record
premium of almost 600 basis points over five year swaps and 10 year gilt yields.
These high yields are encouraging investors to re-enter the market and demand
from overseas investors has increased as they take advantage of sterling's
weakness.
We intend to take advantage of the current market conditions by pursuing our
established strategy of buying secondary properties and sites and applying our
development skills to create prime investment properties. In addition, we
continue to experience strong demand from food retailers for new stores and from
Government backed office occupiers for pre-lets. We have had recent success in
both of these areas and are actively pursuing a number of similar transactions.
Our business model for commercial development is to carry out projects in joint
venture with financial partners, with us making a higher return on our equity
committed while minimising our exposure to risk. Both existing and new partners
are keen to work with us on new projects and we are confident that we will have
sufficient capital to take full advantage of new opportunities.
The operational highlights since October 2008 are as follows:
· A new 38,500 sq ft office building has been pre-let to Middlesbrough
Primary Care Trust at Middlehaven on Teesside for a 15 year term at an initial
rent of GBP635,000 per annum (GBP16.50 per sq ft).
· At 129 Wilton Road, Victoria, AFEX has leased the whole of the 8,100 sq
ft fifth floor for a 10 year term at an initial rent of GBP364,500 per annum
(GBP45.00 per sq ft).
· The sale of the 8,000 sq ft office building which was forward sold to
Sovereign Housing for GBP1.8 million at Brabazon Business Park, Bristol has
completed.
· At the Eastbourne industrial and trade park, we have recently let 7,900
sq ft to Menzies for a new distribution unit.
· Detailed planning consents were granted at:
- Howick Place, Victoria for 135,000 sq ft of offices, 23 private apartments
and 10 affordable housing units. This is a joint venture project with Doughty
Hanson;
- Bishop Auckland, where a resolution to grant detailed planning consent was
given for a 92,333 sq ft food superstore which has been pre-let to Sainsburys;
and
- Baltic Business Quarter, Gateshead for a 45,000 sq ft Design Centre jointly
sponsored by Gateshead Council and One North East.
Residential investment portfolios
At 30 April 2009, our residential investment portfolios comprised 1,957 units
and were valued at GBP260.3 million (31 October 2008: GBP275.0 million). 1,714
of these units are held within the Terrace Hill Residential PLC associate, in
which we hold a 49% stake. Overall, the value of the portfolios fell by 6.1%
since 31 October 2008, significantly outperforming the Halifax HPI, which
recorded a fall of 8.0% over the same period. Occupancy levels have remained
satisfactory at 89.3%, slightly below the level at 31 October 2008 of 91.8%.
This change is largely a consequence of our rolling maintenance programme, which
causes slight occupancy level fluctuations where we take the opportunity to
refurbish units when lease terms end, rather than resulting from any changing
trend. The Terrace Hill Residential PLC associate has outperformed the IPD Index
(Residential Market Lets) for the period to 31 December 2008 by 7.3% and was in
the top quartile performance of the databank.
Clansman Homes
We continue to operate this business cautiously with very few new project
starts. However, we are encouraged by our continued success in selling inventory
units and by the fact that we have recently seen increased interest from
potential purchasers. Additionally, we have also created further value through
the recently received planning consents on our sites at Fenwick and Carnwath,
increasing the total number of consented plots by 20 and we expect to receive
planning for a further 340 units at two other sites during the course of the
year.
Financial results and net asset value
The Group's NAV fell by 26.7% in the period to GBP75.6 million (35.7 pence per
share) from GBP103.0 million (48.6 pence per share) at 31 October 2008 and our
adjusted NAV (equivalent to that defined by EPRA) fell by 23.5% to
GBP94.1 million (44.4 pence per share) from GBP124.2 million (58.0 pence per
share) at 31 October 2008.
The fall in Group NAV was principally caused by the reduction in the carrying
value of our properties, which on an ungeared basis has fallen GBP22.9 million
or 13.5% since 31 October 2008 (year to 31 October 2008: GBP16.4 million, 9.1%).
Our TNAV, which takes into account any tax payable on profits arising if all the
Group's properties were sold at the values used for our adjusted NAV, the
write-off of goodwill and fair value adjustments, fell by 24.4% to GBP85.6
million (40.4 pence per share) from the GBP114.3 million (53.4 pence per share)
at 31 October 2008.
Income statement
Revenue is significantly lower compared with the year to 31 October 2008 as no
property sales were completed in the period.
The income statement includes the valuation write-downs of the carrying value of
our properties mentioned above, as follows:
* Development properties (and included in cost of sales): GBP19.5 million
* Investment properties: GBP3.4 million
* Development and investment properties held in off-balance sheet undertakings
(and included in the share of joint venture and associated undertakings): GBP6.8
million.
Administrative expenses were GBP3.1 million in the period under review, which is
in line with our expected annualised administrative expenses mentioned in our
last Annual Report. We continue to seek ways of reducing costs. Executive
directors and senior staff have agreed to a reduction in base salaries of 10%,
no bonuses have been paid and we have reduced our headcount by 11 (19%) since 31
October 2008. Finance costs for the period include the cost of our Group debt
which was reduced by a credit of GBP2.1 million in respect of a development
funding agreement and GBP0.6 million in respect of a discount on settlement of a
loan.
Our investment in joint ventures and associated undertakings generated a loss in
the period of GBP8.1 million (six months to 30 April 2008: GBP4.8 million). This
loss is primarily due to the results of Terrace Hill Residential PLC of which
our share is 49%. The loss of GBP8.1 million includes our share of the non-cash
and unrealised pre-tax loss on property revaluations of GBP6.8 million (six
months ended 30 April 2008: GBP4.8 million) and a trading loss in the period of
GBP1.3 million (six months ended 30 April 2008: loss GBP2.7 million).
Balance sheet
The Group's total assets at 30 April 2009 were GBP198.1 million, a decrease of
14.7% on the amount as reported at 31 October 2008 of GBP232.4 million. Net
assets, after deducting minority interests, were GBP75.6 million (31 October
2008: GBP103.0 million), a reduction of 26.6%.
Financial resources and capital management
Our debt position as at 30 April 2009 is summarised in the table below:
+--------------------------------------------+--------------+-------------+
| | April 2009 | October |
| | | 2008 |
+--------------------------------------------+--------------+-------------+
| Net debt | GBP101.0 | GBP85.9 |
| | million | million |
+--------------------------------------------+--------------+-------------+
| Net gearing | 107.3% | 69.1% |
+--------------------------------------------+--------------+-------------+
| Net debt (including share of associate/JV | GBP237.7 | GBP231.1 |
| debt) | million | million |
+--------------------------------------------+--------------+-------------+
| Total net gearing | 252.5% | 186.1% |
+--------------------------------------------+--------------+-------------+
| Loan to value | 60.9% | 45.7% |
+--------------------------------------------+--------------+-------------+
| Loan to value (including share of | 74.2% | 63.3% |
| associate/JV debt) | | |
+--------------------------------------------+--------------+-------------+
The Group's net debt has increased since last October largely due to expenditure
in respect of:
* the buy-out of our partner at Kean House in Covent Garden (GBP4.3 million);
* expenditure in our housebuilding division less sales income (GBP4.0 million);
* carrying costs of our commercial development sites (GBP2.0 million);
* the Group's share of the operating deficit in Terrace Hill Residential PLC
(GBP1.3 million); and
* general working capital less rental income (GBP3.5 million).
The Group continues to finance its projects with dedicated debt facilities where
an individual project provides the security to the lender, ensuring the project
and related debt are ring-fenced. Where loan expiries have approached we have
successfully negotiated with our lenders in advance to extend facilities for up
to three further years.
Since 31 October 2008, GBP30.1 million of Group debt has been re-financed. The
Group has a further GBP48.8 million of debt and GBP260.4 million of associate/JV
debt to re-finance during 2009. Of this, terms have been agreed in principle in
respect of GBP39.3 million of Group debt and all of the associate/JV debt. Each
bank has indicated that they believe the revised financing arrangements will be
completed in accordance with the terms which have been agreed. The
re-financings in all cases are characterised by higher margins but, due to the
lower levels of current interest rates, our funding costs remain broadly as
before. The maturity profile of the re-financed debt (including where terms have
been agreed but not documented) is greatly improved, with the average term to
expiry for this debt now 32 months (Group debt: 30 months).
Notwithstanding our success in dealing with our maturing bank facilities, we
continue to monitor our loans and our rolling 24 month cash forecast very
closely. The Group has been successful in constraining project expenditure such
that, in respect of its projects, outgoings are largely limited to funding costs
and some professional fees. In respect of associate/JV projects, all project
expenditure is funded by related bank facilities.
There are no bank facilities in place which measure Group loan to value ratios.
We have a number of loans with loan to value covenants based on the assets used
as security for those loans. In many cases, the loan to value covenants have
been amended in order allow the Group to focus its efforts on commercial
property development. We believe that this demonstrates the continuing
willingness of our relationship banks to support the Group during the current
global economic recession. The Group has also been approached by a number of
banks with whom we have had no previous corporate relationship and who are keen
to advance debt capital for our new developments.
Philip Leech, Chief Executive
Jon Austen, Group Finance Director
14 July 2009
INDEPENDENT REVIEW REPORT TO TERRACE HILL GROUP PLC
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30 April
2009 which comprises the unaudited consolidated income statement, the unaudited
consolidated statement of changes in equity, the unaudited consolidated balance
sheet, the unaudited consolidated cash flow statement and related notes.
We have read the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the rules of the
London Stock Exchange for companies trading securities on the Alternative
Investment Market which require that the half-yearly report be presented and
prepared in a form consistent with that which will be adopted in the company's
annual accounts having regard to the accounting standards applicable to such
annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Our report has been prepared in accordance with the terms of our engagement to
assist the company in meeting the requirements of the rules of the London Stock
Exchange for companies trading securities on the Alternative Investment Market
and for no other purpose. No person is entitled to rely on this report unless
such a person is a person entitled to rely upon this report by virtue of and for
the purpose of our terms of engagement or has been expressly authorised to do so
by our prior written consent. Save as above, we do not accept responsibility for
this report to any other person or for any other purpose and we hereby expressly
disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity", issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 April 2009 is not prepared, in all material
respects, in accordance with the rules of the London Stock Exchange for
companies trading securities on the Alternative Investment Market.
BDO Stoy Hayward LLP
Chartered Accountants and Registered Auditors
55 Baker Street
London
W1U 7EU
14 July 2009
Unaudited consolidated income statement
for the six months ended 30 April 2009
+---------------------------------------------+-----------+-----------+-----------+
| Unaudited | Audited | Unaudited |
+---------------------------------------------------------+-----------+-----------+
| six months | year to | six |
| | | months to |
+---------------------------------------------------------+-----------+-----------+
| to 30 April | 31 | 30 April |
| | October | |
+---------------------------------------------------------+-----------+-----------+
| 2009 | 2008 | 2008 |
+---------------------------------------------------------+-----------+-----------+
| GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------------------+-----------+-----------+
| Revenue | 5,946 | 63,366 | 55,360 |
+---------------------------------------------+-----------+-----------+-----------+
| Direct costs | (23,372) | (67,438) | (40,102) |
+---------------------------------------------+-----------+-----------+-----------+
| Gross (loss)/profit | (17,426) | (4,072) | 15,258 |
+---------------------------------------------+-----------+-----------+-----------+
| Administrative expenses | (3,109) | (6,195) | (4,749) |
+---------------------------------------------+-----------+-----------+-----------+
| (Loss)/profit on disposal of investment | - | (20) | 132 |
| properties | | | |
+---------------------------------------------+-----------+-----------+-----------+
| Loss on revaluation of investment | (3,376) | (3,846) | (440) |
| properties | | | |
+---------------------------------------------+-----------+-----------+-----------+
| Operating (loss)/profit | (23,911) | (14,133) | 10,201 |
+---------------------------------------------+-----------+-----------+-----------+
| Finance income | 1,158 | 467 | 853 |
+---------------------------------------------+-----------+-----------+-----------+
| Finance costs | 23 | (5,488) | (1,805) |
+---------------------------------------------+-----------+-----------+-----------+
| Share of joint venture and associated | (8,082) | (12,448) | (4,803) |
| undertakings post tax loss | | | |
+---------------------------------------------+-----------+-----------+-----------+
| (Loss)/profit before tax | (30,812) | (31,602) | 4,446 |
+---------------------------------------------+-----------+-----------+-----------+
| Tax | 4,763 | 4,327 | (2,650) |
+---------------------------------------------+-----------+-----------+-----------+
| (Loss)/profit for the period | (26,049) | (27,275) | 1,796 |
+---------------------------------------------+-----------+-----------+-----------+
| Attributable to |
+---------------------------------------------------------------------------------+
| Equity holders of the parent | (26,030) | (27,253) | 1,805 |
+---------------------------------------------+-----------+-----------+-----------+
| Minority interest | (19) | (22) | (9) |
+---------------------------------------------+-----------+-----------+-----------+
| (26,049) | (27,275) | 1,796 |
+---------------------------------------------------------+-----------+-----------+
| | | | |
+---------------------------------------------+-----------+-----------+-----------+
| | | | |
+---------------------------------------------+-----------+-----------+-----------+
| Basic earnings per share | (12.28)p | (12.90)p | 0.85p |
+---------------------------------------------+-----------+-----------+-----------+
| Diluted earnings per share | (12.28)p | (12.90)p | 0.84p |
+---------------------------------------------+-----------+-----------+-----------+
Unaudited consolidated statement of changes in equity
for the six months ended 30 April 2009
+-----------------+----+----+----+---------+---------+------------+---------+----+---------+----------+----+----------+----------+----------+-+
| Capital | Unrealised | |
+-----------------------------------------------------------------+------------------------+--------------------------------------------------+
| Share | Share | Own | redemption | Merger | gains | Retained | Minority | |
+---------------------------+--------------+---------+------------+---------+--------------+----------+--------------------------+------------+
| capital | premium | shares | reserve | reserve | and losses | earnings | Total | interest | Total | |
+---------------------------+--------------+---------+------------+---------+--------------+----------+---------------+----------+----------+-+
| GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | |
+---------------------------+--------------+---------+------------+---------+--------------+----------+---------------+----------+----------+-+
| Balance at 1 | 4,240 | 43,208 | -- | 849 | 8,386 | -- | 80,196 | 136,879 | 306 | 137,185 | |
+-----------------+---------+--------------+---------+------------+---------+--------------+----------+---------------+----------+----------+-+
| November 2007 | |
+-----------------+---------------------------------------------------------------------------------------------------------------------------+
| Loss for the | -- | -- | -- | -- | -- | -- | (27,253) | (27,253) | (22) | (27,275) | |
+-----------------+--------------+---------+---------+------------+---------+--------------+---------------+----------+----------+----------+-+
| period | |
+-----------------+---------------------------------------------------------------------------------------------------------------------------+
| Unrealised | -- | -- | -- | -- | -- | (498) | -- | (498) | -- | (498) | |
+-----------------+--------------+---------+---------+------------+---------+--------------+---------------+----------+----------+----------+-+
| losses on | |
+-----------------+---------------------------------------------------------------------------------------------------------------------------+
| Available-for- | |
+-----------------+---------------------------------------------------------------------------------------------------------------------------+
| sale | |
+-----------------+---------------------------------------------------------------------------------------------------------------------------+
| investments |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| Total recognised | -- | -- | -- | -- | -- | (498) | (27,253) | (27,751) | (22) | (27,773) |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| income and |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| expense for the |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| period |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| Acquisition of | -- | -- | -- | -- | -- | -- | -- | -- | (26) | (26) |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| minority interest |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| Own shares | -- | -- | (609) | -- | -- | -- | -- | (609) | -- | (609) |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| Share-based | -- | -- | -- | -- | -- | -- | (997) | (997) | -- | (997) |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| payment |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| Merger reserve | -- | -- | -- | -- | (1,298) | -- | 1,298 | -- | -- | -- |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| release |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| Interim ordinary | -- | -- | -- | -- | -- | -- | (1,684) | (1,684) | -- | (1,684) |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| dividends |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| Final ordinary | -- | -- | -- | -- | -- | -- | (2,791) | (2,791) | -- | (2,791) |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| dividends |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| Balance at 31 | 4,240 | 43,208 | (609) | 849 | 7,088 | (498) | 48,769 | 103,047 | 258 | 103,305 |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| October 2008 | | | | | | | | | | |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| Loss for the | -- | -- | -- | -- | -- | -- | (26,030) | (26,030) | (19) | (26,049) |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| period |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| Losses on | -- | -- | -- | -- | -- | 498 | -- | 498 | -- | 498 |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| investments |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| transferred to |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| income |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| statement on |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| disposal |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| Total recognised | -- | -- | -- | -- | -- | 498 | (26,030) | (25,532) | (19) | (25,551) |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| income and |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| expense for the |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| period |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| Share-based | -- | -- | -- | -- | -- | -- | (789) | (789) | -- | (789) |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| payment |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| Final ordinary | -- | -- | -- | -- | -- | -- | (1,155) | (1,155) | -- | (1,155) |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| dividends |
+---------------------------------------------------------------------------------------------------------------------------------------------+
| Balance at | 4,240 | 43,208 | (609) | 849 | 7,088 | -- | 20,795 | 75,571 | 239 | 75,810 |
+----------------------+---------+---------+---------+------------+--------------+---------+---------------+----------+----------+------------+
| 30 April 2009 |
+-----------------+----+----+----+---------+---------+------------+---------+----+---------+----------+----+----------+----------+----------+-+
Unaudited consolidated balance sheet
as at 30 April 2009
+-----------------------------------------------+-----------+-----------+-----------+
| Unaudited | Audited | Unaudited |
+-----------------------------------------------------------+-----------+-----------+
| 30 April | 31 | 30 |
| | October | April |
+-----------------------------------------------------------+-----------+-----------+
| 2009 | 2008 | 2008 |
+-----------------------------------------------------------+-----------+-----------+
| GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------------------------+-----------+-----------+
| Non-current assets |
+-----------------------------------------------------------------------------------+
| Investment properties | 45,789 | 49,160 | 55,031 |
+-----------------------------------------------+-----------+-----------+-----------+
| Property plant and equipment | 511 | 590 | 606 |
+-----------------------------------------------+-----------+-----------+-----------+
| Investments in equity - accounted associates | 2,710 | 7,145 | 14,813 |
| and joint ventures | | | |
+-----------------------------------------------+-----------+-----------+-----------+
| Available-for-sale investments | - | 442 | 2,251 |
+-----------------------------------------------+-----------+-----------+-----------+
| Other investments | 133 | 109 | 131 |
+-----------------------------------------------+-----------+-----------+-----------+
| Intangible assets | 3,393 | 3,456 | 3,519 |
+-----------------------------------------------+-----------+-----------+-----------+
| Deferred tax assets | 8,429 | 4,327 | 388 |
+-----------------------------------------------+-----------+-----------+-----------+
| | 60,965 | 65,229 | 76,739 |
+-----------------------------------------------+-----------+-----------+-----------+
| Current assets |
+-----------------------------------------------------------------------------------+
| Property inventories | 103,877 | 120,488 | 124,333 |
+-----------------------------------------------+-----------+-----------+-----------+
| Trade and other receivables | 26,940 | 28,612 | 51,938 |
+-----------------------------------------------+-----------+-----------+-----------+
| Cash and cash equivalents | 6,336 | 18,022 | 25,499 |
+-----------------------------------------------+-----------+-----------+-----------+
| 137,153 | 167,122 | 201,770 |
+-----------------------------------------------------------+-----------+-----------+
| Total assets | 198,118 | 232,351 | 278,509 |
+-----------------------------------------------+-----------+-----------+-----------+
| Non-current liabilities |
+-----------------------------------------------------------------------------------+
| Bank loans | (56,589) | (40,890) | (57,147) |
+-----------------------------------------------+-----------+-----------+-----------+
| Other payables | (3,370) | (3,370) | (8,980) |
+-----------------------------------------------+-----------+-----------+-----------+
| Deferred tax liabilities | - | (782) | (2,182) |
+-----------------------------------------------+-----------+-----------+-----------+
| | (59,959) | (45,042) | (68,309) |
+-----------------------------------------------+-----------+-----------+-----------+
| Current liabilities |
+-----------------------------------------------------------------------------------+
| Trade and other payables | (10,945) | (20,878) | (32,980) |
+-----------------------------------------------+-----------+-----------+-----------+
| Current tax liabilities | (611) | (153) | (2,581) |
+-----------------------------------------------+-----------+-----------+-----------+
| Bank overdrafts and loans | (50,793) | (62,973) | (41,287) |
+-----------------------------------------------+-----------+-----------+-----------+
| (62,349) | (84,004) | (76,848) |
+-----------------------------------------------------------+-----------+-----------+
| Total liabilities | (122,308) | (129,046) | (145,157) |
+-----------------------------------------------+-----------+-----------+-----------+
| Net assets | 75,810 | 103,305 | 133,352 |
+-----------------------------------------------+-----------+-----------+-----------+
| Equity |
+-----------------------------------------------------------------------------------+
| Called up share capital | 4,240 | 4,240 | 4,240 |
+-----------------------------------------------+-----------+-----------+-----------+
| Share premium account | 43,208 | 43,208 | 43,208 |
+-----------------------------------------------+-----------+-----------+-----------+
| Own shares | (609) | (609) | (507) |
+-----------------------------------------------+-----------+-----------+-----------+
| Capital redemption reserve | 849 | 849 | 849 |
+-----------------------------------------------+-----------+-----------+-----------+
| Merger reserve | 7,088 | 7,088 | 8,386 |
+-----------------------------------------------+-----------+-----------+-----------+
| Unrealised losses | - | (498) | (1,737) |
+-----------------------------------------------+-----------+-----------+-----------+
| Retained earnings | 20,795 | 48,769 | 78,628 |
+-----------------------------------------------+-----------+-----------+-----------+
| Equity attributable to equity holders of the | 75,571 | 103,047 | 133,067 |
| parent | | | |
+-----------------------------------------------+-----------+-----------+-----------+
| Minority interests | 239 | 258 | 285 |
+-----------------------------------------------+-----------+-----------+-----------+
| Total equity | 75,810 | 103,305 | 133,352 |
+-----------------------------------------------+-----------+-----------+-----------+
Unaudited consolidated cash flow statement
for the six months ended 30 April 2009
+----------------------------------------------+-----------+----------+-----------+
| Unaudited | Audited | Unaudited |
+----------------------------------------------------------+----------+-----------+
| six months | year to | six |
| | | months to |
+----------------------------------------------------------+----------+-----------+
| to 30 April | 31 | 30 April |
| | October | |
+----------------------------------------------------------+----------+-----------+
| 2009 | 2008 | 2008 |
+----------------------------------------------------------+----------+-----------+
| GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------------------+----------+-----------+
| Cash flows from operating activities |
+---------------------------------------------------------------------------------+
| (Loss)/profit before taxation | (30,812) | (31,602) | 4,446 |
+----------------------------------------------+-----------+----------+-----------+
| Adjustments for: |
+---------------------------------------------------------------------------------+
| Finance revenue | (1,158) | (467) | (853) |
+----------------------------------------------+-----------+----------+-----------+
| Finance costs | (23) | 5,488 | 1,805 |
+----------------------------------------------+-----------+----------+-----------+
| Share of joint venture and associated | 8,082 | 12,448 | 4,803 |
| undertakings post tax loss | | | |
+----------------------------------------------+-----------+----------+-----------+
| Depreciation and impairment charge | 19,984 | 20,777 | 176 |
+----------------------------------------------+-----------+----------+-----------+
| Loss on revaluation of investment properties | 3,376 | 3,846 | 440 |
+----------------------------------------------+-----------+----------+-----------+
| Loss/(profit) on disposal of investment | - | 20 | (132) |
| properties | | | |
+----------------------------------------------+-----------+----------+-----------+
| Loss on disposal of tangible fixed assets | 9 | - | - |
+----------------------------------------------+-----------+----------+-----------+
| Share-based payment credit | (789) | (997) | (585) |
+----------------------------------------------+-----------+----------+-----------+
| Cash flows from operating activities before | (1,331) | 9,513 | 10,100 |
| change in | | | |
+----------------------------------------------+-----------+----------+-----------+
| working capital | | | |
+----------------------------------------------+-----------+----------+-----------+
| (Increase)/decrease in property inventories | (2,730) | (3,634) | 10,755 |
+----------------------------------------------+-----------+----------+-----------+
| (Increase)/decrease in trade and other | (2,115) | 6,419 | 3,141 |
| receivables | | | |
+----------------------------------------------+-----------+----------+-----------+
| (Decrease) in trade and other payables | (7,076) | (22,295) | (23,510) |
+----------------------------------------------+-----------+----------+-----------+
| Cash (absorbed by)/generated from operations | (13,252) | (9,997) | 486 |
+----------------------------------------------+-----------+----------+-----------+
| Income from investments | - | 7 | 7 |
+----------------------------------------------+-----------+----------+-----------+
| Finance costs | (1,986) | (4,087) | (1,976) |
+----------------------------------------------+-----------+----------+-----------+
| Finance income | 333 | 1,615 | 941 |
+----------------------------------------------+-----------+----------+-----------+
| Tax received/(paid) | 338 | (1,500) | (700) |
+----------------------------------------------+-----------+----------+-----------+
| Net cash flows from operating activities | (14,567) | (13,962) | (1,242) |
+----------------------------------------------+-----------+----------+-----------+
| Investing activities |
+---------------------------------------------------------------------------------+
| Sale of investment property | - | 1,137 | 778 |
+----------------------------------------------+-----------+----------+-----------+
| Purchase of investments | - | (4,011) | (3,996) |
+----------------------------------------------+-----------+----------+-----------+
| Sale of investments | 447 | 1,982 | - |
+----------------------------------------------+-----------+----------+-----------+
| Sale of tangible fixed assets | 5 | - | - |
+----------------------------------------------+-----------+----------+-----------+
| Purchase of property, plant and equipment | (38) | (236) | (136) |
+----------------------------------------------+-----------+----------+-----------+
| Net cash flows from investing activities | 414 | (1,128) | (3,354) |
+----------------------------------------------+-----------+----------+-----------+
| Financing activities |
+---------------------------------------------------------------------------------+
| Borrowings drawn down | 33,968 | 39,813 | 29,756 |
+----------------------------------------------+-----------+----------+-----------+
| Borrowings repaid | (26,840) | (34,516) | (25,059) |
+----------------------------------------------+-----------+----------+-----------+
| Purchase of own shares | - | (609) | - |
+----------------------------------------------+-----------+----------+-----------+
| Equity dividends paid | (1,155) | (4,475) | (2,788) |
+----------------------------------------------+-----------+----------+-----------+
| Net cash flows from financing activities | 5,973 | 213 | 1,909 |
+----------------------------------------------+-----------+----------+-----------+
| Net decrease in cash and cash equivalents | (8,180) | (14,877) | (2,687) |
+----------------------------------------------+-----------+----------+-----------+
| Cash and cash equivalents at 1 November 2008 | 11,494 | 26,371 | 26,371 |
+----------------------------------------------+-----------+----------+-----------+
| Cash and cash equivalents at 30 April 2009 | 3,314 | 11,494 | 23,684 |
+----------------------------------------------+-----------+----------+-----------+
Notes to the half-yearly financial statements
for the six months ended 30 April 2009
1 Accounting policies
Basis of preparation
The financial information in this half-yearly report does not constitute
statutory accounts within the meaning of Section 434 of the Companies Act 2006.
The comparative financial information for the year ended 31 October 2008 does
not constitute statutory accounts within the meaning of Section 240 of the
Companies Act 1985.
The statutory accounts of Terrace Hill Group plc for the year ended 31 October
2008 have been reported on by the Company's auditors and have been delivered to
the Registrar of Companies. The auditors' report was unqualified, did not
include a reference to matters which the auditors drew attention by way of
emphasis without qualifying their report and did not contain statements under
Section 237(2) or 272(3) of the Companies Act 1985.
The half yearly report has been prepared in accordance with the recognition and
measurement principles of International Financial Reporting Standards (IFRSs) as
endorsed by the European Union using accounting policies that are expected to be
applied for the financial year ended 31 October 2009.
Going concern
The directors are required to make an assessment of the Group's ability to
continue to trade as a going concern. Because of the difficult market conditions
prevailing, this assessment has been subject to more uncertainties than are
usual. The directors have given this matter due consideration and have concluded
that it is appropriate to prepare the Group financial statements on a going
concern basis. The two main considerations were as follows:
Cash flow - the Group maintains a rolling 24 month cash forecast that takes
account of all known inflows and outflows. The cash flow includes estimates of
a number of key variables including the assumed dates and amounts relating to
property disposals and amounts that may be required to reduce indebtedness as a
consequence of falling property values and re-financing. The cash flow is
regularly stress tested to ensure that the Group can withstand reasonable
changes in circumstances that could adversely affect its cash flow. The key
potential changes that the Group has considered include: possible falls in value
of the portfolio which could result in margin calls or increased funding costs
if future loan to value covenants were breached; possible delays in the timing
and reductions in proceeds from portfolio sales given the current lack of
liquidity in the market; and, possible reductions in anticipated cash flows from
re-financing properties after planning permission has been obtained. After
considering the potential cash flow sensitivities the Group believes that it has
sufficient resources to continue trading for the foreseeable future.
Support of the Group's banks - Since 31 October 2008, GBP30.1 million of Group
debt has been re-financed. The Group has a further GBP48.8 million of debt and
GBP260.4 million of associate/JV debt to re-finance during 2009. Of this, terms
have been agreed in principle in respect of GBP39.3 million of Group debt and
all of the associate/JV debt. Each bank has indicated that they believe the
revised financing arrangements will be completed in accordance with the terms
which have been agreed. The re-financings in all cases are characterised by
higher margins but, due to the lower levels of current interest rates, our
funding costs remain broadly as before. The maturity profile of the re-financed
debt (including where terms have been agreed but not documented) is greatly
improved, with the average term to expiry for this debt now 32 months (Group
debt: 30 months).
Further information is contained in the review of operations and finance review.
2 Earnings per ordinary share
The calculation of basic earnings per ordinary share is based on a loss of
GBP26,030,000 (31 October 2008: GBP27,253,000 loss and 30 April 2008:
GBP1,805,000 profit) and on 211,971,299 (31 October 2008: 211,187,902 and 30
April 2008: 211,361,386) ordinary shares, being the weighted average number of
shares in issue during the period.
The calculation of diluted earnings per ordinary share for the period to April
2009 and October 2008 is the same as the calculation of the basic earnings per
ordinary share. For April 2008 the calculation of diluted earnings per ordinary
share is based on a profit of GBP1,805,000 and on 214,671,386 ordinary shares,
being the weighted average number of shares in issue during the period adjusted
to allow for the issue of shares in relation to all performance related share
awards.
3 Investment properties
+----------------------------------------------------------------------+---------+
| GBP'000 |
+--------------------------------------------------------------------------------+
| Valuation |
+--------------------------------------------------------------------------------+
| At 1 November 2007 | 53,887 |
+----------------------------------------------------------------------+---------+
| Transfer from inventory | 220 |
+----------------------------------------------------------------------+---------+
| Disposals | (1,101) |
+----------------------------------------------------------------------+---------+
| Loss on revaluation | (3,846) |
+----------------------------------------------------------------------+---------+
| At 31 October 2008 | 49,160 |
+----------------------------------------------------------------------+---------+
| Additions | 5 |
+----------------------------------------------------------------------+---------+
| Loss on revaluation | (3,376) |
+----------------------------------------------------------------------+---------+
| At 30 April 2009 | 45,789 |
+----------------------------------------------------------------------+---------+
Included in additions is capitalised interest of GBPNil (2008: GBPNil).
The investment properties situated in Scotland owned by the Group have been
valued as at 30 April 2009 by qualified valuers from Allied Surveyors, an
independent firm of Chartered Surveyors, on the basis of open market value. The
valuations were carried out in accordance with guidance issued by the Royal
Institution of Chartered Surveyors.
The commercial investment properties situated in England owned by the Group have
been valued as at 30 April 2009 by qualified valuers from CB Richard Ellis, an
independent firm of Chartered Surveyors, on the basis of open market value. The
valuations were carried out in accordance with guidance issued by the Royal
Institution of Chartered Surveyors.
Residential investment properties situated in England owned by the Group have
been valued at open market value by directors, who are suitably qualified or
experienced, at 30 April 2009 having regard to professional advice and/or sales
evidence during the period. The value of these properties was GBP5,051,000
(2008: GBP5,387,000).
4 Investments
Associates and joint ventures
+--------------------------------------------------+----------+---------+----------+
| Joint |
+-----------------------------------------------------------------------+
| Associates | venture | Total |
+-------------------------------------------------------------+---------+----------+
| GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------------------------------+---------+----------+
| Cost or valuation |
+----------------------------------------------------------------------------------+
| At 1 November 2007 | 18,766 | (147) | 18,619 |
+--------------------------------------------------+----------+---------+----------+
| Investment write off | (81) | - | (81) |
+--------------------------------------------------+----------+---------+----------+
| Share of results | (12,310) | (138) | (12,448) |
+--------------------------------------------------+----------+---------+----------+
| Unrealised profit | - | 1,055 | 1,055 |
+--------------------------------------------------+----------+---------+----------+
| At 31 October 2008 | 6,375 | 770 | 7,145 |
+--------------------------------------------------+----------+---------+----------+
| Disposals | (5) | - | (5) |
+--------------------------------------------------+----------+---------+----------+
| Transfer to other investments | (15) | - | (15) |
+--------------------------------------------------+----------+---------+----------+
| Share of results | (8,021) | (61) | (8,082) |
+--------------------------------------------------+----------+---------+----------+
| Share of results for period applied against long | 3,667 | - | 3,667 |
| term receivables forming | | | |
+--------------------------------------------------+----------+---------+----------+
| part of net investment |
+----------------------------------------------------------------------------------+
| At 30 April 2009 | 2,001 | 709 | 2,710 |
+--------------------------------------------------+----------+---------+----------+
The Group's interest in its principal associates which have been equity
accounted in the consolidated financial statements were as follows:
+--------------------------------+--------+--------------------------------------+
| Terrace Hill Residential PLC | 49% | Property investment |
+--------------------------------+--------+--------------------------------------+
| Castlegate House Partnership | 30% | Property development |
+--------------------------------+--------+--------------------------------------+
| Devcap 2 Partnership | 26% | Property development |
+--------------------------------+--------+--------------------------------------+
| Terrace Hill Development | 20% | Property development |
| Partnership | | |
+--------------------------------+--------+--------------------------------------+
| Two Orchards Limited | 20% | Property development |
+--------------------------------+--------+--------------------------------------+
Terrace Hill Residential PLC was incorporated in Scotland.
Summarised information 2009
+-----------------------+----------+---------------+-------------+-------------+------------+----------------+
| Terrace Hill | Castlegate | Terrace |
| | | Hill |
+----------------------------------+-----------------------------+-------------+
| Development | Devcap | House | Residential | Two |
| | 2 | | | |
+----------------------------------+---------------+-------------+-------------+------------+
| Partnership | Partnership | Partnership | PLC | Orchards | Total |
+----------------------------------+---------------+-------------+-------------+------------+----------------+
| GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+---------------+-------------+-------------+------------+----------------+
| Revenue | 2,246 | 826 | 309 | 6,233 | - | 9,614 |
+-----------------------+----------+---------------+-------------+-------------+------------+----------------+
| (Loss)/profit after | (109) | (1,178) | 47 | (15,522) | (12,603) | (22,782) |
| taxation | | | | | | |
+-----------------------+----------+---------------+-------------+-------------+------------+----------------+
| Total assets | 55,262 | 45,482 | 9,448 | 233,596 | 60,234 | 404,581 |
+-----------------------+----------+---------------+-------------+-------------+------------+----------------+
| Bank debt | (26,066) | (39,092) | (8,563) | (207,891) | (67,814) | (338,239) |
+-----------------------+----------+---------------+-------------+-------------+------------+----------------+
| Other liabilities | (19,345) | (9,353) | (2,353) | (33,189) | (5,023) | (74,425) |
+-----------------------+----------+---------------+-------------+-------------+------------+----------------+
| Total liabilities | (45,411) | (48,445) | (10,916) | (241,080) | (72,837) | (412,664) |
+-----------------------+----------+---------------+-------------+-------------+------------+----------------+
| Net | 9,851 | (2,963) | (1,468) | (7,484) | (12,603) | (8,083) |
| assets/(liabilities) | | | | | | |
+-----------------------+----------+---------------+-------------+-------------+------------+----------------+
+-----------------------+--------+--------+--------+---------+--------+--------+---------+
| Opening carrying | 2,416 | - | - | 3,938 | 1 | | 6,355 |
| amount of | | | | | | | |
+-----------------------+--------+--------+--------+---------+--------+--------+---------+
| interest under equity method |
+----------------------------------------------------------------------------------------+
| Share of results for | (416) | - | - | (3,938) | - | | (4,354) |
| period (1) | | | | | | | |
+-----------------------+--------+--------+--------+---------+--------+--------+---------+
| Closing carrying | 2,000 | - | - | - | 1 | | 2,001 |
| amount of | | | | | | | |
+-----------------------+--------+--------+--------+---------+--------+--------+---------+
| interest under equity method |
+-----------------------+--------+--------+--------+---------+--------+--------+---------+
+-----------------------+--------+--------+--------+---------+--------+--------+---------+
| Opening long term | - | - | - | 14,306 | - | | 14,306 |
| receivables | | | | | | | |
+-----------------------+--------+--------+--------+---------+--------+--------+---------+
| forming part of net investment |
+----------------------------------------------------------------------------------------+
| Advance during the | - | - | - | 637 | - | | 637 |
| period | | | | | | | |
+-----------------------+--------+--------+--------+---------+--------+--------+---------+
| Share of results for | - | - | - | (3,667) | - | | (3,667) |
| period applied | | | | | | | |
+-----------------------+--------+--------+--------+---------+--------+--------+---------+
| against long term receivables |
+----------------------------------------------------------------------------------------+
| forming part of net investment (2) |
+----------------------------------------------------------------------------------------+
| Closing long term | - | - | - | 11,276 | - | | 11,276 |
| receivables | | | | | | | |
+-----------------------+--------+--------+--------+---------+--------+--------+---------+
| forming part of net investment |
+-----------------------+--------+--------+--------+---------+--------+--------+---------+
+-------------------------+-------+--------+--------+---------+--------+--------+---------+
| Total share of results | (416) | - | - | (7,605) | - | | (8,021) |
| for period (1) & (2) | | | | | | | |
+-------------------------+-------+--------+--------+---------+--------+--------+---------+
+-----------------------+--------+--------+--------+--------+--------+--------+--------+
| Capital commitments | 230 | - | - | - | 916 | | 1,146 |
+-----------------------+--------+--------+--------+--------+--------+--------+--------+
Summarised information 2008
+-----------------------+----------+---------------+--------------+-------------+-----------+----------+-----------+
| Terrace Hill | Castlegate | Terrace |
| | | Hill |
+----------------------------------+------------------------------+-------------+
| Development | Devcap | House | Residential | Two | Howick |
| | 2 | | | | |
+----------------------------------+---------------+--------------+-------------+-----------+----------+
| Partnership | Partnership | Partnership | PLC | Orchards | Place | Total |
+----------------------------------+---------------+--------------+-------------+-----------+----------+-----------+
| GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+---------------+--------------+-------------+-----------+----------+-----------+
| Revenue | 7,012 | 308 | 610 | 12,265 | - | 1,502 | 21,697 |
+-----------------------+----------+---------------+--------------+-------------+-----------+----------+-----------+
| (Loss)/profit after | (2,119) | (1,793) | 92 | (26,043) | - | (1,708) | (31,571) |
| taxation | | | | | | | |
+-----------------------+----------+---------------+--------------+-------------+-----------+----------+-----------+
| Total assets | 56,285 | 46,367 | 9,398 | 247,724 | 59,805 | 72,278 | 491,857 |
+-----------------------+----------+---------------+--------------+-------------+-----------+----------+-----------+
| Bank debt | (27,604) | (38,962) | (8,558) | (207,502) | (52,273) | (50,523) | (385,422) |
+-----------------------+----------+---------------+--------------+-------------+-----------+----------+-----------+
| Other liabilities | (16,602) | (9,190) | (2,355) | (32,184) | (7,531) | (25,530) | (93,392) |
+-----------------------+----------+---------------+--------------+-------------+-----------+----------+-----------+
| Total liabilities | (44,206) | (48,152) | (10,913) | (239,686) | (59,804) | (76,053) | (478,814) |
+-----------------------+----------+---------------+--------------+-------------+-----------+----------+-----------+
| Net | 12,079 | (1,785) | (1,515) | 8,038 | 1 | (3,775) | 13,043 |
| assets/(liabilities) | | | | | | | |
+-----------------------+----------+---------------+--------------+-------------+-----------+----------+-----------+
| Share of results for | - | - | 451 | (12,761) | - | - | (12,310) |
| period | | | | | | | |
+-----------------------+----------+---------------+--------------+-------------+-----------+----------+-----------+
| Share of net assets | 2,416 | - | - | 3,938 | 1 | 20 | 6,375 |
+-----------------------+----------+---------------+--------------+-------------+-----------+----------+-----------+
| Capital commitments | 2,424 | - | - | - | 13,485 | - | 15,909 |
+-----------------------+----------+---------------+--------------+-------------+-----------+----------+-----------+
Summarised information
The Group's interest in its joint venture which has been equity accounted in the
consolidated financial statements was as follows:
+------------------------------------------------+--------+----------------------+
| Achadonn Limited | 50% | Property development |
+------------------------------------------------+--------+----------------------+
+-------------------------------------------------------------+----------+----------+
| 2009 | 2008 |
+------------------------------------------------------------------------+----------+
| Achadonn | Achadonn |
+------------------------------------------------------------------------+----------+
| Limited | Limited |
+------------------------------------------------------------------------+----------+
| GBP'000 | GBP'000 |
+------------------------------------------------------------------------+----------+
| Revenue | 31 | 2,803 |
+-------------------------------------------------------------+----------+----------+
| (Loss)/profit | (122) | 1,834 |
+-------------------------------------------------------------+----------+----------+
| Total assets | 13,921 | 14,332 |
+-------------------------------------------------------------+----------+----------+
| Bank debt | (8,110) | (9,436) |
+-------------------------------------------------------------+----------+----------+
| Other liabilities | (4,393) | (3,356) |
+-------------------------------------------------------------+----------+----------+
| Total liabilities | (12,503) | (12,792) |
+-------------------------------------------------------------+----------+----------+
| Net assets | 1,418 | 1,540 |
+-------------------------------------------------------------+----------+----------+
| Share of results for the period | (61) | 917 |
+-------------------------------------------------------------+----------+----------+
| Share of net assets | 709 | 770 |
+-------------------------------------------------------------+----------+----------+
Available-for-sale investments and other investments
+----------------------------------------------------+---------+-------------+---------+
| Available-for-sale | Other |
+--------------------------------------------------------------+-------------+
| investments | investments | Total |
+--------------------------------------------------------------+-------------+---------+
| GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------------------------------+-------------+---------+
| Valuation |
+--------------------------------------------------------------------------------------+
| At 1 November 2007 | - | 147 | 147 |
+----------------------------------------------------+---------+-------------+---------+
| Additions | 3,987 | 1 | 3,988 |
+----------------------------------------------------+---------+-------------+---------+
| Disposals | (3,047) | (15) | (3,062) |
+----------------------------------------------------+---------+-------------+---------+
| Change in fair value | (498) | (24) | (522) |
+----------------------------------------------------+---------+-------------+---------+
| At 31 October 2008 | 442 | 109 | 551 |
+----------------------------------------------------+---------+-------------+---------+
| Additions | - | - | - |
+----------------------------------------------------+---------+-------------+---------+
| Transfer from associates | - | 15 | 15 |
+----------------------------------------------------+---------+-------------+---------+
| Change in fair value | - | 9 | 9 |
+----------------------------------------------------+---------+-------------+---------+
| At 30 April 2009 | - | 133 | 133 |
+----------------------------------------------------+---------+-------------+---------+
+---------------------------------------------------------------+--------+---------+
| 2009 | 2008 |
+------------------------------------------------------------------------+---------+
| GBP'000 | GBP'000 |
+------------------------------------------------------------------------+---------+
| UK unlisted investments at fair value | 60 | 45 |
+---------------------------------------------------------------+--------+---------+
| UK listed investments at fair value | 73 | 506 |
+---------------------------------------------------------------+--------+---------+
| 133 | 551 |
+---------------------------------------------------------------+--------+---------+
5 Property inventories
+--------------------------------------------------------------------+----------+
| GBP'000 |
+-------------------------------------------------------------------------------+
| At 1 November 2007 | 126,950 |
+--------------------------------------------------------------------+----------+
| Additions | 43,301 |
+--------------------------------------------------------------------+----------+
| Disposals | (36,978) |
+--------------------------------------------------------------------+----------+
| Transfer to investment properties | (220) |
+--------------------------------------------------------------------+----------+
| Amounts written off the value of inventories | (12,565) |
+--------------------------------------------------------------------+----------+
| At 31 October 2008 | 120,488 |
+--------------------------------------------------------------------+----------+
| Additions | 4,336 |
+--------------------------------------------------------------------+----------+
| Disposals | (1,435) |
+--------------------------------------------------------------------+----------+
| Amounts written off the value of inventories | (19,512) |
+--------------------------------------------------------------------+----------+
| At 30 April 2009 | 103,877 |
+--------------------------------------------------------------------+----------+
Included in property inventories is capitalised interest of GBP8,583,000 (2008:
GBP8,269,000).
6 Trade and other receivables
+--------------------------------------------------------------+----------+---------+
| 2009 | 2008 |
+-------------------------------------------------------------------------+---------+
| GBP'000 | GBP'000 |
+-------------------------------------------------------------------------+---------+
| Trade receivables | 1,675 | 1,915 |
+--------------------------------------------------------------+----------+---------+
| Other receivables | 6,975 | 2,553 |
+--------------------------------------------------------------+----------+---------+
| Trade and other receivables | 8,650 | 4,468 |
+--------------------------------------------------------------+----------+---------+
| Prepayments and accrued income | 2,891 | 2,247 |
+--------------------------------------------------------------+----------+---------+
| Amounts due from associates and joint ventures | 27,122 | 29,673 |
+--------------------------------------------------------------+----------+---------+
| Provision for amounts due from associates and joint ventures | (11,723) | (7,776) |
+--------------------------------------------------------------+----------+---------+
| 26,940 | 28,612 |
+--------------------------------------------------------------+----------+---------+
Included in other receivables is a balance of GBP3.5 million that has a final
maturity date of 31 December 2014.
The movement in the allowance for impairment in respect of amounts due from
associates and joint ventures during the year was as follows:
+--------------------------------------------------------------+--------+---------+
| 2009 | 2008 |
+-----------------------------------------------------------------------+---------+
| GBP'000 | GBP'000 |
+-----------------------------------------------------------------------+---------+
| At 1 November 2008 | 7,776 | - |
+--------------------------------------------------------------+--------+---------+
| Amounts written off in year | - | - |
+--------------------------------------------------------------+--------+---------+
| Increase in allowance on amounts due from associates | 3,947 | 7,776 |
+--------------------------------------------------------------+--------+---------+
| Closing balance | 11,723 | 7,776 |
+--------------------------------------------------------------+--------+---------+
The allowance is based on falling asset values in the associates.
7 Bank overdrafts and loans
+-----------------------------------------------------------+----------+----------+
| 2009 | 2008 |
+----------------------------------------------------------------------+----------+
| GBP'000 | GBP'000 |
+----------------------------------------------------------------------+----------+
| Bank loans | 104,782 | 97,680 |
+-----------------------------------------------------------+----------+----------+
| Bank overdrafts | 3,022 | 6,528 |
+-----------------------------------------------------------+----------+----------+
| 107,804 | 104,208 |
+----------------------------------------------------------------------+----------+
| Unamortised loan issue costs | (422) | (345) |
+-----------------------------------------------------------+----------+----------+
| 107,382 | 103,863 |
+----------------------------------------------------------------------+----------+
| Amounts due: |
+---------------------------------------------------------------------------------+
| Within one year | 50,793 | 62,973 |
+-----------------------------------------------------------+----------+----------+
| After more than one year | 56,589 | 40,890 |
+-----------------------------------------------------------+----------+----------+
| 107,382 | 103,863 |
+-----------------------------------------------------------+----------+----------+
Half-yearly report
The half-yearly report will be available, free of charge, from the Company
Secretary, Terrace Hill Group PLC, 144 West George Street, Glasgow G2 2HG.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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