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2010-03-10 07:05
Terrace Hill Group - Final Results |
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RNS Number : 3362I Terrace Hill Group PLC 10 March 2010 10 March 2010 Terrace Hill Group plc ("Terrace Hill", the "Company" or the "Group")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 OCTOBER 2009 Terrace Hill Group plc (AIM: THG), a leading UK property development and investment group, today announces its preliminary results for the year to 31 October 2009. Financial highlights
· Adjusted pre-tax profit (before property provisions) £2.6 million (31 October 2008: £1.0 million)
Operational highlights
Post period events
· Detailed planning consent obtained for 71 residential units at Carluke, Scotland
Commenting, Robert Adair, Chairman of Terrace Hill, said: "We were very encouraged to see some stability and positive sentiment returning to the market in the second half of the year and, more so, by the fact that this has continued into 2010. We took advantage of this renewed confidence through the sale of Kean House and the forward funding and sale of our Bishop Auckland Sainsbury's development. This trend can be clearly seen by comparing the first half results, which show the impact of the recessionary economic environment at the time, with a more positive second half, during which yields began to harden and we were able to make a small pre-tax profit. We successfully refinanced around £335 million of debt since 31 October 2008, and have noticed a definite increase in appetite for lending from the banks, even for development. "Our commercial focus remains firmly on pre-let developments and we are particularly strong in the foodstore sector, where we concluded three deals during the year, with a further two announced this morning. We are also making solid progress with our strategic landbank in Scotland, with planning permission for 374 units now consented and applications for around 650 more being processed. Our residential investment portfolio continues to perform ahead of its IPD benchmark and we are now actively considering the launch of a residential fund which has the potential to provide further scope to create value." For further information:
Robert Adair, Chairman Philip Leech, Chief Executive Jon Austen, Group Finance Director
Tom Durie/Mark Young/Gareth Price
Stephanie Highett/Richard Sunderland Rachel Drysdale/Olivia Goodhall terracehill@fd.com 1 includes 100% of associate and joint venture undertaking debt re-financed 2 calculated by reference to adjusted NAV Chairman's statement I am pleased to report our financial results for the year ended 31 October 2009. The period saw some stability returning to the economy and a renewed confidence in the prime commercial property investment markets. We took advantage of this with the sale of Kean House, a completed office development in Covent Garden, where we achieved an attractive price, and with the institutional forward funding of our Sainsbury's foodstore scheme at Bishop Auckland. The improved market has resulted in the yields of our commercial property portfolio hardening and values improving in the second half of the year. A similar stabilising of values has also been seen in our residential portfolio. On the banking side we have also continued to be successful in re-financing our debt and extending due dates for repayment. Notwithstanding our operational successes our results were affected by the significant falls in the market value of our assets in the first half of the year. Our adjusted diluted NAV (ADNAV, as defined by EPRA) has decreased by 22.7% to 44.6 pence per share (31 October 2008: 58.0 pence per share) and our triple NAV (TNAV, as defined by EPRA) has fallen by 23.5% to 40.8 pence per share (31 October 2008: 53.4 pence per share). The TNAV takes account of any valuation movements above book value of assets held as trading stock as well as contingent tax on prospective gains and other fair value adjustments. Our dividend policy has been to vary the amount of our dividend in line with the movement in our TNAV. Given the fall in TNAV since 31 October 2008, the Board has decided to continue the suspension of dividend payments which was announced with our interim results. We keep this policy under review and wish to resume a progressive dividend policy when market conditions improve. The Group's loss before tax for the year, stated after accounting for changes in the value of our investment properties and reductions in the value of our trading stock, was £26.7 million. Excluding these, we made a profit before tax in the year of £2.6 million, compared with £1.0 million in the year ended 31 October 2008, calculated on the same basis. The business review contains further analyses of our results and a reconciliation of these amounts. All Group and joint venture and associated undertaking debt that required re-financing in the period has been agreed. The banking climate has been challenging and I am pleased with the achievements we have made and that our bank financings are on a sound footing. We are very focused on our cash flow and have achieved a number of operational efficiencies during the last year, with reductions in headcount and salary reductions for senior staff and directors. We continue to exercise tight control over our discretionary expenditure. Property overview In the commercial arena our focus on new business has been on pre-let developments, in particular foodstores, where we have concluded three deals during the financial year, and offices let to strong covenants such as the Primary Care Trust pre-letting at Teesside. We have an extensive pipeline of similar developments which should provide highly profitable low-risk returns over a sustained period. Within our existing commercial portfolio we have managed to conclude a number of lettings despite a difficult occupational market as well as selling Kean House at a price above its April 2009 valuation. Our residential investment portfolios fell in value by 4% in the first half but recovered by 1.5% at the year end. I am pleased with the consistently high occupancy levels and with rental levels which have remained constant over the period. I now believe that there is scope for value growth. We are now actively considering launching a residential property fund. During the course of the year we decided to focus our residential development activity on site assembly and planning gain and away from housebuilding in Scotland. As a result of this decision we were able to reduce our central overhead by £0.5 million on an annualised basis and focus investment in our core areas of commercial development and residential investment. The landbank in Scotland now extends to 175 acres with the potential to accommodate over 1,200 units. We continue to work towards obtaining planning consent for development over the remaining un-consented sites. I envisage that these will either be sold or developed in joint venture with other housebuilders. Outlook I view the future with considerably more confidence than I did a year ago. In particular, I am pleased our TNAV increased in the second half of the year and we have been successful in creating value through development. I look forward to further TNAV growth and am confident that we can generate strong returns for our shareholders over the medium term. Robert F M Adair Chairman 10 March 2010 Business review - operations Commercial property strategy During the second half of the year we began to see improving sentiment in the investment markets which translated fairly quickly into an increase in prices paid for well let properties in good locations. This has not been supported by increased occupier demand in most areas but there is now a feeling that the worst of rental falls may be over in some markets, allowing investors to value assets with more certainty. This improvement has allowed us to sell some completed schemes more quickly and at better values than we had expected. It has also opened up an equity funding market for pre-let property to good covenants which is aiding our new development programme. Our pre-let development strategy can be divided into the two defined areas of foodstores and offices. Foodstores Demand from the major foodstore operators has continued unabated and we have been successful in concluding three foodstore development transactions during the year:
Our focus on this sector means that we now have a substantial pipeline of new foodstore development opportunities which will mature over the next few years. Offices Although the office occupational market has been weak, there are a number of occupiers who are unable to satisfy their requirements through existing stock. This is particularly true in the regions outside London where we have seen demand for pre-lets coming from occupiers with strong covenants from a variety of sectors.
Our network of regional offices gives us insight into these requirements and we are now working on a pipeline of similar deals across the UK. The portfolio Commercial property Despite a difficult occupational market we have let and sold further space within our portfolio of completed developments and made progress with our early stage developments. In other areas we have advanced and improved planning consents.
Residential investment In the second half of the year we have seen average values stabilise across our portfolios. The actual movements in value depend very much on the geographical location of the properties, but small rises in the values of our assets in London and the South East, where we have a 50% weighting, have offset declines elsewhere. In addition, through active management, we have maintained healthy occupational rates at consistently steady rental levels. We are cautious about the immediate outlook for the value of residential property but, over the medium-term, we foresee a steady return to capital growth and good opportunities for us to trade parts of our portfolios as well as acquire new, attractively priced properties. Strategic land Following our decision to suspend new housebuilding in Scotland, we have been concentrating on maximising value from the landbank through the planning process. During the period, we have obtained planning for 20 units at our three acre site at Fenwick and for 71 units at our 12 acre site in Carluke. We are expecting to win a new consent at Kilmarnock during the early part of 2010. The total landbank in Scotland now extends to 175 acres with the potential to accommodate over 1,200 residential units and we envisage that these sites will either be sold or developed in joint venture with other housebuilders. Business review - finance Financial results and net asset value The Group's NAV fell by 24.1% in the year to 31 October 2009 to £78.2 million (36.9 pence per share) from £103.0 million (48.6 pence per share) at 31 October 2008 and our adjusted NAV (equivalent to that defined by EPRA) fell by 22.7% to £94.8 million (44.6 pence per share) from £124.2 million (58.0 pence per share) at 31 October 2008. The fall in our adjusted NAV was caused principally by the reduction in the carrying value of our properties and by the reduction in the market value of those properties held on the balance sheet at the lower of cost and market value. Other factors resulting in movements in the adjusted NAV are set out below:
· rise of 0.8 pence per share arising from trading activity. The Group's NAV and adjusted NAV increased by 1% since 30 April 2009, reflecting the hardening of values in the second half of the year and increased trading activity in that period. The Group's 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 other fair value adjustments, fell by 23.5% to £86.8 million (40.8 pence per share) from the £114.3 million (53.4 pence per share) at 31 October 2008. Calculation of ADNAV and TNAV (unaudited)
as current assets
LTIP
of investment properties
value
availability of tax losses
Income statement Revenue for the year is below that recorded in 2008 due largely to lower commercial development activity as a consequence of the economic situation. Commercial property development transactions in the period include the sale of the property in Helston to Sainsbury's and part of the sale of the Bishop Auckland property to Aviva Investors. The Group earned £6.6 million in rental income (2008: £4.8 million), an increase of 37.5%, while development management fees and other income generated £1.3 million (2008: £2.6 million), a decrease of 50.0%. Sales revenue of £4.4 million on the sale of houses is also included in revenue. The year has been characterised by a radical shift in the rate of change in the valuation of our properties, reflecting movement in the underlying property market. This is particularly evident in a comparison of the movements in our property values, wherever held, for the first half year with the same for the second half year. The income statement, as required by accounting standards, includes movements in the carrying value of our investment and trading properties, whether held directly or in joint venture and associated undertakings. The table below sets out the amounts included in the income statement, split between what was reflected in the first and second halves of the year. Administrative expenses for the year were £5.2 million (2008: £6.5 million). Included within administrative expenses is a credit of £0.7 million in respect of the Group's share-based payment scheme (2008: £1.0 million credit). Ignoring this, underlying administrative expenses have reduced by £1.6 million. As noted in the Interim Report, we continue to seek ways of reducing costs while not affecting the operational effectiveness of the business. Executive directors and senior staff agreed to a reduction in their base salaries of 10%. In addition, no bonuses were paid and headcount has reduced by 12 (21%) since 31 October 2008. Net finance costs amounted to £1.2 million (2008: £5.0 million) and reflect the cost of our Group debt. The figure for 2009 includes the reversal of £2.1 million in respect of a development funding agreement which was charged to the income statement in 2008. Ignoring these adjustments, net finance costs increased by £0.4 million (14%) during the period, reflecting the higher average net debt figures and funding costs during the year. A consequence of all these facts is that the Group traded profitability in the second half of the year. Our investment in joint venture and associated undertakings incurred a loss in the year of £5.6 million (2008: £12.4 million). Of the £5.6 million, £5.2 million reflects our share of the downward movement in property valuations which occurred during the period.
Adjusted profit
Write downs in respect of development and investment properties
Movements in the carrying value of our investment and trading properties included in the income statement
Development and investment properties
undertakings3
Notes: 1 included in direct costs; 2 included in loss on revaluation of investment properties; and 3 included in share of joint venture and associated undertakings post tax loss. Balance sheet The Group's total assets at 31 October 2009 were £204.2 million, a decrease of 12.1% on the amount reported at 31 October 2008 of £232.4 million. Net assets, after accounting for minority interests, were £78.2 million at 31 October 2009, a reduction of 24.1% compared to the equivalent figure in 2008 (£103.0 million). Financial resources and capital management The Group's financial resources are principally its cash balances, bank loans and overdrafts. The Group continues to fund itself with retained cash and bank derived debt capital. This debt falls into two categories, loans secured on wholly owned assets and debt secured on assets owned by joint ventures and associated undertakings. All Group and joint venture and associated undertaking debt that required re-financing in the period has been agreed. The loans which have been re-financed during the year are characterised by higher interest rate margins, but with an overall funding cost remaining broadly similar due to reductions in both LIBOR and swap rates. Where these bank loans are in joint ventures they are arranged on an asset-by-asset basis, discrete from each other and with limited recourse to the Group. Where necessary, and where there is a common lender, some of the Group loan facilities have been cross collateralised in order to increase security to that lender and facilitate re-financings. In addition to these re-financings, new development debt of £4.7 million was also negotiated during the year, reinforcing our view that development debt capital for the right pre-let opportunities is more readily available now than this time last year. This has been further evidenced by several banks, with whom we have had no previous relationship, approaching us to fund future developments.
Summary of debt position
undertaking debt
associated undertaking debt The net gearing and loan to value percentages shown above are in relation to our adjusted NAV. The majority of joint venture and associated undertaking debt is of limited recourse to the Group.
Debt expiry profile
At 31 October 2009, 39.3% of Group debt and 38.3% of debt in joint venture and associated undertakings was subject to interest rate hedging. Last year these figures were 16.8% and 74.8% respectively. The reason for the large change in joint venture and associated undertaking debt is that hedging expired during the year on a £208.1 million loan. The interest rate risk associated with this expiry has been actively managed and we have benefited from prevailing low LIBOR rates. There are no loans in place measuring on an aggregated basis loan to value ratios. A number of loans have loan to value covenants based on the value of the assets secured against them and where required, these have been amended or removed entirely. Again, we believe this is further evidence of our relationship banks' continued desire to support the Group.
Summary of average loan to value ratios of Group property
Cash is monitored using a 24-month rolling forecast and the Group, together with its joint venture and associated undertakings, have no unfunded commitments. The Group undertakes regular stress tests to determine the effects on our cash forecast of falls in value and potential capital calls on debt. The Group believes it has adequate resources to continue trading for the foreseeable future. Dividends The final 2008 dividend of 0.54 pence per share was paid to shareholders on 7 April 2009. Since then the Group has decided to conserve its cash and has therefore not paid an interim dividend in respect of the current year and will not recommend a final dividend. The Board hopes to resume its progressive dividend policy as soon as market conditions allow.
Chief executive Group finance director 10 March 2010 Consolidated income statement For the year ended 31 October 2009
2009 2008
post tax loss
Attributable to:
The notes below form part of this financial information. Consolidated statement of changes in equity For the year ended 31 October 2009
Unrealised losses on
Total recognised income
interest
Loss on investments transferred
disposal
Total recognised income
Consolidated balance sheet At 31 October 2009
2009 2008
Non-current assets
ventures
Current assets
Non-current liabilities
Current liabilities
Equity
The financial information was approved and authorised for issue by the board of directors on 10 March 2010 and was signed on its behalf by:
P A J Leech J M Austen
Consolidated cash flow statement For the year ended 31 October 2009
2009 2008
Cash flows from operating activities
Adjustments for:
tax loss
working capital
Investing activities
Financing activities
1 Accounting policies Basis of preparation While the financial information included in the preliminary announcement has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as endorsed for use in the European Union (IFRSs), this announcement does not contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in March 2010. Changes in accounting policies The accounting policies adopted are consistent with those of the previous financial year. New standards and interpretations not applied IASB and IFRIC have issued the following standards and interpretations relevant to the Group. These standards and interpretations are mandatory for accounting periods beginning on or after the date of these financial statements and will become effective for future reporting periods:
The directors currently anticipate that the adoption of certain of these standards and interpretations will have a material impact on the Group's financial statements in the period of initial application primarily in terms of presentation and disclosure. The significant changes are: IAS 1 will introduce a single "statement of comprehensive income" incorporating both realised profits and losses currently reported in the income statement and unrealised profits and losses currently reported in the statement of changes in equity. The revised statement of changes in equity will only in future report transactions with shareholders, for example capital raised and dividends. The standard is a presentational standard and adoption will not affect reported results. IFRS 8 introduces a management approach that will require segment disclosure based on the components of the Group that management monitors in making decisions about operating matters. No significant differences in the identification of segments is envisaged as a result of the implementation of IFRS 8. The impact of the other standards and interpretations are not considered to be significant either because their impact is not likely to be material or that the Group already adopts the accounting policy proposed in the new or revised standard or interpretation. Going concern The directors are required to make an assessment of the Group's ability to continue to trade as a going concern. Due to 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 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; and possible reductions in anticipated cash flows from re*financing properties after planning permission has been obtained. Having considered the headroom in the Group's forecasts and its previous success in extending finance terms when required, the Group believes that it has sufficient resources to continue trading for the foreseeable future. Bank facilities - the Group maintains a regular dialogue with its lenders and keeps them informed of how the Group is trading. Since 31 October 2008, £88.5 million of Group debt and £247.1 million of joint venture and associated undertaking debt has been refinanced. The Group has a further £47.2 million of debt and overdraft facilities due to be re*financed in 2010, of which £11.7 million is due to be re-financed by 31 October 2010. In the normal course of business, developments will be completed and disposed of and so the actual requirement to renew financing is expected to be at a lower level than this. None of the facilities have reached their due dates for renewal but the Group has opened discussions with each lender to gauge their appetite for their renewal. In all cases the lenders concerned have been supportive and have indicated their desire to renew the facilities subject to mutually acceptable terms being agreed. Investment and development property In relation to the investment and development properties, the directors have relied upon the external valuations and advice provided by professionally qualified valuers in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors.
2 Revenue
2009 2008
Sales of development properties 21,195 55,982
Sales of development properties includes £7,088,000 (2008: £Nil) of revenue recognised on the project management of the construction of a property on behalf of a third party. 3 Segmental information
The Group operates in three principal segments being commercial property development and investment, residential property investment and strategic land. The Group does not operate outside the UK.
2009 2009 2009 2009 2009 2008 2008 2008 2008 2008
Income statement
Loss on disposal of
investment properties
venture before tax
Share of results of associated
Balance sheet
joint ventures
4 Finance costs and finance income 2009 2008
agreement
assets
Interest is capitalised at the same rate as the Group is charged on the respective borrowings. Fair value adjustments to financial liabilities totalled £962,000 (2008: £Nil), comprising losses on interest rate swaps. 5 Administrative expenses 2009 2008
Fees paid to BDO LLP in respect of: 6 Tax on loss on ordinary activities (a) Analysis of charge in year 2009 2008
Current tax
Deferred tax
Origination and reversal of temporary differences (3,821) (4,747)
(b) Factors affecting the tax credit for the year The tax assessed for the year is lower than the standard rate of corporation tax in the UK of 28% (2008: 28%). The differences are explained below: 2009 2008
of 28% (2008: 28.83%)
(c) Associates and joint ventures The Group's share of tax on the associates is £Nil (2008: £3,439,000 credit). No tax charge arises on the results of the joint ventures. 7 Dividends 2009 2008
Ordinary shares
Final dividend of 0.54 pence (2008: final dividend for 2007 of 1.3 pence)
Interim dividend paid of 0.0 pence (2008: interim dividend for 2008 of 0.8 pence) per share
pence) per share 8 Earnings per ordinary share The calculation of basic earnings per ordinary share is based on a loss of £23,517,000 (2008 loss: £27,253,000) and on 210,951,299 (2008: 211,187,902) ordinary shares, being the weighted average number of shares in issue during the period. The calculation of diluted earnings per ordinary share for 2009 and 2008 is the same as the calculation of the basic earnings per ordinary share.
9 Property, plant and equipment
Cost
Depreciation
Net book value
At the year end there were no assets held under finance leases.
10 Investment properties
Valuation
The investment properties situated in Scotland owned by the Group have been valued as at 31 October 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 31 October 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 as at 31 October 2009 by suitably qualified valuers from Allsops LLP, 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. 11 Investments
Associates and joint venture
Cost or valuation
long-term receivables forming part of net
investment
The Group's interest in its principal associates which have been equity accounted in the consolidated financial statements were as follows:
Terrace Hill Development Partnership 20% Property development
Terrace Hill Residential PLC is incorporated in Scotland.
Summarised information 2009
Opening carrying amount
method
Share of results for period applied
against long-term receivables
Closing carrying amount
method
Summarised information 2008
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
Available-for-sale investments and other investments
Valuation
2009 2008
147 551 12 Development properties 2009 2008
Amounts written off the value of development properties (22,032) (12,565)
No amounts are held in development properties in respect of construction contracts and retentions on such contracts is nil. 13 Trade and other receivables 2009 2008
Provision for amounts due from associates and joint ventures (8,888) (7,776)
Included in other receivables and prepayments and accrued income is a balance due from Howick Place JV S.a.r.l. of £4.3 million that has a final maturity date of 31 December 2014. The ageing of trade and other receivables was as follows: 2009 2008
No amounts were overdue at the year end. 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
The allowance is based on falling asset values in the associates. 14 Trade and other payables 2009 2008
15 Other payables (non-current) 2009 2008
Other payables 3,370 3,370 16 Bank overdrafts and loans 2009 2008
Amounts due:
An analysis of interest rates and information on fair value and security is given in note 18. 17 Deferred tax Details of the deferred tax credited to the Consolidated income statement are as follows: 2009 2008
The Consolidated balance sheet deferred tax assets and liabilities are as follows: 2009 2008
Deferred tax provision
(73) (782)
Deferred tax asset
Under IAS 12, deferred tax is recognised for tax potentially payable on the realisation of investment properties at fair values at the balance sheet date. No deferred tax asset is recognised in respect of losses if there is uncertainty over future recoverability. 18 Financial instruments The Group's principal financial instruments comprise loans, overdrafts, cash and short-term deposits. The main purpose of these financial instruments is to provide finance for the Group's operations. Further information on the Group's financial resources and capital management is given in the Business Review - Finance. The Group has various other financial instruments such as trade receivables and trade payables that arise directly from its operations, listed and unlisted investments. The main risks arising from the Group's financial instruments are interest rate risk, credit risk and liquidity risk. The board reviews and agrees policies for managing each of these risks and they are summarised below. The magnitude of the risk that has arisen over the period is detailed below. Interest rate risk The Group holds cash balances on short-term deposit. The Group's policy is to monitor the level of these balances to ensure that funds are available as required, recognising that interest earnings will be subject to interest rate fluctuations. The Group borrows cash in the form of loans and overdrafts, which are subject to interest at floating rates, recognising that rates will fluctuate according to changes in libor and the bank base rate. The Group is cognisant at all times of movements in interest rates and will, as appropriate, enter into interest rate swaps to maintain a balance between borrowings that are subject to floating and fixed rates. Credit risk The Group's principal financial assets are cash and trade receivables. Our cash deposits are placed with a range of banks to minimise the risk to the Group. The principal risk therefore arises from trade receivables. Trade receivables from the sale of properties are secured against those properties until the proceeds are received. Rental receivables are unsecured but the Group's exposure to tenant default is limited as no tenant accounts for more than 10% of total rent. Rental cash deposits and third party guarantees are obtained as a means of mitigating financial loss from defaults. Liquidity risk The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank balances and loans. Cash flow and funding needs are regularly monitored. Further information is given in note 1. Categories of financial assets and financial liabilities 2009 2008
Current financial assets
Amounts due from associates and joint ventures 15,633 22,555
Financial liabilities measured at amortised cost 2009 2008
Current financial liabilities
Non-current financial liabilities
The maximum exposure to credit risk in financial assets is £31,479,000 (2008: £44,920,000). The maximum amount due from any single party is £14,948,000 (2008: £14,595,000) included in amounts due from associates and joint ventures. Financial liabilities measured at fair value amount to £962,000 (2008: £Nil) in respect of financial derivatives. Interest rate risk profile of financial assets and liabilities
The interest rate profile of financial assets and liabilities of the Group at 31 October 2009 was as follows:
Floating rate financial liabilities bear interest at LIBOR or base rate plus margins of between 1% and 4%. Included in floating rate financial liabilities is £40,660,000 (2008: £17,517,000) subject to interest rate swaps. The interest rate profile of financial assets and liabilities of the Group at 31 October 2008 was as follows:
The floating rate financial assets comprise: · cash on deposit. The floating rate financial liabilities comprise: · Sterling denominated bank loans that bear interest based on LIBOR and bank base rates; and · Sterling denominated bank overdrafts that bear interest based on bank base rates. The fair value of the financial assets and liabilities is equal to the book value. Borrowings The Group's bank borrowings and overdrafts are repayable as follows: 2009 2008
The bank overdraft is secured by way of debenture and cross guarantee from certain subsidiaries. The bank loans are secured by legal charges over the Group's investment and development properties together with guarantees from certain subsidiary undertakings with a limited guarantee from the parent company and in one case a floating charge from the parent company. Borrowing facilities The Group has the following undrawn committed bank borrowing facilities available to it at the year end: 2009 2008
Guarantees The Group has given a guarantee of £15.0 million as part of the security arrangements for the bank facilities of Terrace Hill Residential PLC, one of its associated undertakings. Market rate sensitivity analysis Financial instruments affected by market risk include borrowings, deposits and derivative financial instruments. The analysis below shows the sensitivity of the income statement and net assets to a 0.5% change in interest rates on the Group's financial instruments.
The sensitivity analysis is based on the sensitivity of interest to movements in interest rates and is calculated on net floating rate exposures on debt and deposits.
19 Called up share capital 2009 2008
Authorised:
500,000,000 (2008: 500,000,000) ordinary shares of 2 pence each 10,000 10,000
Allotted, called up, and fully paid:
20 Reserves
available-for-sale investments
Loss on investments
transferred to income
expense for the year
The following describes the nature and purpose of each reserve within owners' equity: Share premium - represents the excess of value of shares issued over their nominal amount. Own shares - represents amount paid to purchase issued shares for the employee share-based payment plan. Capital redemption reserve - represents amount paid to purchase issued shares for cancellation at their nominal value. Merger reserve - the Merger reserve has arisen following acquisitions where the Group's equity has formed all or part of the consideration and represents the premium on the issued shares less costs. Unrealised gains and losses - represents unrealised loss on available-for-sale investments. Retained earnings - represents cumulative net gains and losses recognised in the Consolidated income statement. 21 Contingent liabilities and capital commitments On the acquisition by Terrace Hill Group PLC of a subsidiary company, amounts were repayable in the event of: (a) disposal of the property/ies prior to an agreed cut-off point; or (b) the discontinuation of rental income from the property/ies. The directors are of the opinion that neither of these contingencies will crystallise, since the principal activity of the subsidiary concerned is the letting of the properties for rental income and it is not anticipated that the properties will be disposed of within the timeframe of (a) above. In the event of crystallisation of (a) and/or (b), the subsidiary concerned will be obligated to pay an amount calculated with reference to the properties disposed of/not let out. The maximum sum repayable is £337,000 (2008: £381,000). Capital commitments relating to development sites are as follows: 2009 2008
22 Leases Operating lease commitments where the Group is the lessee
The future aggregate minimum lease rentals payable under non-cancellable operating leases are as follows:
2009 2008
Operating lease commitments where the Group is the lessor
The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:
2009 2008
Statutory information The financial information set out in this announcement does not constitute the company's statutory accounts for 2008 or 2009. Statutory accounts for the years ended 31 October 2008 and 31 October 2009 have been reported on by the Independent Auditors. The Independent Auditors' Report on the Annual Report and Financial Statements for 2008 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 237(2) or 237(3) of the Companies Act 1985. The Independent Auditors' Report on the Annual Report and Financial Statements for 2009 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. Statutory accounts for the year ended 31 October 2008 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 October 2009 will be delivered to the Registrar in due course. Copies of the full financial statements will be posted to those shareholders who requested them as soon as possible and will also be available on the company's website, www.terracehill.co.uk. The financial statements for the year ended 31 October 2009 will be delivered to the Registrar of Companies following the Annual General Meeting CURRENT Schemes Developments completed or under construction
Office Development Programme
Retail Development Programme
Industrial Development Programme
CONSENTED SCHEMES Sites with detailed planning permission
Office Development Programme
Teesdale Business Park
138/143 Redcliff Street
Sites with detailed planning permission
Retail Development Programme
Sites with detailed planning permission
Industrial Development Programme
Broadwater Road
PENDING SCHEMES Medium term developments held prior to detailed planning
Office Development Programme
Baltic Business Quarter
Aerospace Park Medium term developments held prior to detailed planning
Retail Development Programme
Medium term developments held prior to detailed planning
Industrial Development Programme
COMMERCIAL INVESTMENTS
38 Victoria Street
Total Commercial investment
Residential Investment
Strategic Land
Sites completed or with detailed planning permission
Patna
Sites held pending detailed planning consent
This information is provided by RNS The company news service from the London Stock Exchange END
FR UKSKRRVAORAR |
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