Daejan Holdings (DJAN)

 

LSE:DJAN: Final Results

Daejan Holdings

06 Jul 2016 07:00:06

Daejan Hldgs PLC

RNS Number : 3389D
Daejan Holdings PLC
06 July 2016
 

6 July 2016

 

DAEJAN HOLDINGS PLC

UNAUDITED PRELIMINARY RESULTS ANNOUNCEMENT for the year ended 31 March 2016

 

The Chairman, Mr B S E Freshwater, today announced Preliminary Results for the year to 31 March 2016.

 

The financial highlights for the year ended 31 March 2016 are as follows:

                                                                                                                                               


2016


2015



£000


£000





(Restated)


 

 

Investment property

2,009,361


 

1,855,230


Net rental and related income from investment property

 

68,189


 

58,935

     

Profit before taxation

173,242


277,539


Total equity

1,480,094


1,345,874


Equity shareholders' funds per share

£90.82


        £82.59


Earnings per share

£8.77


£13.95












The revaluation of the investment property portfolio at the year end has resulted in a net valuation surplus for the year of £117,947,000 (2015 - £229,722,000). The board has recommended a final dividend of 58p per share in respect of the year ended 31 March 2016 payable on 11 November 2016 to shareholders on the register on 14 October 2016.  This will make a total dividend for the year of 93p (2015 - 88p).

 

Earnings per share is calculated by reference to profit on ordinary activities after taxation attributable to equity holders of the parent of £142,900,000 (2015 - £227,395,000) and 16,295,357  (2015 - 16,295,357) ordinary shares being the weighted average number of ordinary shares in issue during the year.

 



 

 

DAEJAN HOLDINGS PLC

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 MARCH 2016

 


Year


Year


ended


ended


31 March


31 March


2016


2015


£000


£000




(Restated)





Gross rental income

117,733


112,847

Service charge income

20,464


16,129

Total rental and related income from investment property

138,197


128,976





Property operating expenses

(70,008)


(70,041)

Net rental and related income from investment property

68,189


58,935





Profit on disposal of investment property

11,725


12,036

Net valuation gains on investment property

117,947


229,722

Administrative expenses

(13,041)


(11,821)

Net operating profit before net financing costs

184,820


288,872





Fair value gains on derivative financial instruments

788


 137

Fair value (losses)/gains on current investments

(10)


7

Other financial income

336


286

Financial expenses

(12,692)


(11,763)

Net financing costs

(11,578)


(11,333)





Profit before taxation

173,242


277,539

Income tax

(30,237)


(49,979)

Profit for the year

143,005


227,560





Attributable to:-




Equity holders of the parent

142,900


227,395

Minority interest

105


165

Profit for the year

143,005


227,560





Basic and diluted earnings per share

£8.77


£13.95

 

 



 

 

 

DAEJAN HOLDINGS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2016

 


Year ended

Year ended


31 March

31 March


2016

2015


£000

£000



(Restated)




Profit for the year

143,005

227,560

Foreign exchange translation differences

5,649

14,273

Total comprehensive income for the year

148,654

241,833




Attributable to:



Equity holders of the parent

148,547

Minority interest

107

186

Total comprehensive income for the year

148,654

241,833

 

 

 


DAEJAN HOLDINGS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2016

 


Issued share capital

Share premium

Translation reserve

Retained earnings

Equity shareholders' funds

Minority interest

Total equity


£000

£000

£000

£000

£000

£000

£000









Balance at 1 April 2014

4,074

555

12,796

1,093,043

1,110,468

169

1,110,637

Restatement

-

-

(644)

7,709

7,065

-

7,065


4,074

555

12,152

1,100,752

1,117,533

169

1,117,702

Profit for the year

-

-

-

227,395

227,395

165

227,560

Foreign exchange translation differences

-

-

14,252

-

14,252

21

14,273

Movements in minority interest

-

-

-

-

-

(299)

(299)

Dividends to equity shareholders

-

-

-

(13,362)

(13,362)

-

(13,362)

Balance at 1 April 2015

4,074

555

26,404

1,314,785

1,345,818

56

1,345,874

Profit for the year

-

-

-

142,900

142,900

105

143,005

Foreign exchange translation differences

-

-

 5,647

-

5,647

2

5,649

Movements in minority interest

-

-

-

-

-

 (94)

(94)

Dividends to equity shareholders

-

-

-

(14,340)

(14,340)

-

(14,340)

Balance at 31 March 2016

4,074

555

32,051

1,443,345

1,480,025

69

1,480,094

 

 


DAEJAN HOLDINGS PLC

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2016

 


31 March


31 March


2016


2015


£000


£000




(Restated)

Assets




Investment property

2,009,361


1,855,230

Deferred tax assets

571


792

Total non-current assets

2,009,932


1,856,022





Trade and other receivables

63,119


55,586

Current investments

159


187

Cash and cash equivalents

84,863


52,293

Total current assets

148,141


108,066

Total assets

2,158,073


1,964,088





Equity




Issued capital

4,074


4,074

Share premium

555


555

Translation reserve

32,051


26,404

Retained earnings

1,443,345


1,314,785

Total equity attributable to equity holders of the parent

1,480,025


1,345,818

Minority interest

69


56

Total equity

1,480,094


1,345,874





Liabilities




Loans and borrowings

306,412


285,747

Deferred tax liabilities

255,296


232,210

Total non-current liabilities

561,708


517,957









Loans and borrowings

15,516


18,663

Trade and other payables

55,987


45,879

Current taxation

44,768


35,715

Total current liabilities

116,271


100,257

Total liabilities

677,979


618,214

Total equity and liabilities

2,158,073


1,964,088

 

 



 

DAEJAN HOLDINGS PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2016

 


Year

Year


ended

ended


31 March

31 March


2016

2015

 


£000

£000

£000

£000

Cash flows from operating activities





Cash receipts from rent and service charges

141,487


134,113


Cash paid to suppliers and employees

(79,958)


(92,908)


Cash generated from operations

61,529


41,205


Interest received

336


289


Interest paid

(12,598)


(11,731)


Distributions to minority interest

Tax paid

(94)

(772)


(299)

(3,383)

 

 






Net cash from operating activities


48,401


26,081






Cash flows from investing activities





Acquisition and development of investment property

(26,939)


(43,460)


Proceeds from sale of investment property

12,807


16,772


Net cash absorbed by investing activities


(14,132)


(26,688)






Cash flows from financing activities





Repayment of bank loans                                     

(1,302)


(33,353)


New bank loans and overdrafts                                                                                                  

-


36,611


Repayment of mortgages

(21,341)


(23,793)


New mortgages

34,379


25,085


Dividends paid

(14,340)


(13,362)


Net cash generated from financing activities


(2,604)


(8,812)






Net increase/(decrease) in cash and cash equivalents


31,665


(9,419)

Cash and cash equivalents brought forward


52,293


59,149

Effect of exchange rate fluctuations on cash held


 

905

 

 

 

2,563

Cash and cash equivalents


84,863


52,293

 

 



 

 

DAEJAN HOLDINGS PLC

 

Notes

1.   The financial information set out in this Preliminary Announcement does not constitute the Company's statutory accounts for the years ended 31 March 2016 or 2015.  The financial information for 2015 is derived from the statutory accounts for 2015 which have been delivered to the Registrar of Companies, except as set out below. The Auditors have reported on the 2015 accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.  The statutory accounts for 2016 will be finalised on the basis of the financial information presented by the Directors in this Preliminary Announcement and using policies consistent in all material respects with the policies applied in the Company's statutory accounts for 2015, as set out in those accounts as delivered to the Registrar of Companies, except as set out below.  The statutory accounts for 2016 will be delivered to the Registrar of Companies following the Company's next Annual General Meeting.

 

2.   During the year ended 31 March 2016 the Group changed its accounting policy for loans and borrowings. Prior to the change, the Group initially recognised and subsequently recorded fixed rate loans and borrowings at fair value. Following the change, the Group will continue to initially recognise loans and borrowings at fair value, but will subsequently record them at amortised cost.

 

The Directors believe that the change in accounting policy will be beneficial to users of the financial statements as most, if not all, other large property investment companies in the United Kingdom have adopted this policy. This will provide more reliable and relevant comparisons between the Group's financial position and results with that of other property investment companies.

 

To maintain consistency between reporting periods, the Group has applied this change retrospectively. The Group has therefore adjusted the comparative figures for the year ended 31 March 2015 so that these figures are presented as if the change in accounting policy had always applied.

 

The impact of the change in policy affects the carrying value of loans and borrowings, the fair value of gains and losses recognised and the associated deferred tax credits and assets.

 

Loans and borrowings cumulatively decreased by £18,380,000 at 31 March 2015 and by £11,679,000 at 1 April 2014. Deferred tax assets cumulatively decreased by £6,155,000 at 31 March 2015 and by £4,614,000 at 1 April 2014. The translation reserve cumulatively decreased by £39,000 at 31 March 2015 and by £644,000 at 1 April 2014. Retained earnings cumulatively increased by £12,264,000 at 31 March 2015 and by £7,709,000 at 1 April 2014.

 

The fair value losses on fixed rate loans and borrowings recognised in the consolidated income statement were eliminated in each period. The impact was a gain of £5,599,000 for the year ended 31 March 2015. The income tax charge increased by £1,045,000 for the year ended 31 March 2015.

 

Basic and diluted earnings per share increased by 27 pence for the year ended 31 March 2015.

 

 

 

 

3.   Segmental Analysis


UK

USA

Eliminations

Total

For the year ended 31 March 2016

£000

£000

£000

£000

Rental and related income

97,079

41,118

-

138,197






Property operating expenses

(46,390)

(23,618)

-

(70,008)






Profit on disposal of property

11,352

373

-

11,725






Net valuation movements on property

75,829

42,118

-

117,947






Administrative expenses

(12,341)

(700)

-

(13,041)






Profit before finance costs

125,529

59,291

-

184,820






Net financing expense

(4,306)

(7,272)

-

(11,578)






Profit before taxation

121,223

52,019

-

173,242






Income tax charge

(9,688)

(20,549)

-

(30,237)






Profit for the period

111,535

31,470

-

143,005






Capital expenditure

11,065

15,874

-

26,939

As at 31 March 2016





Investment property

1,522,621

486,740

-

2,009,361

Other assets

98,125

60,761

(10,174)

148,712

Total segment assets

1,620,746

547,501

(10,174)

2,158,073

Total segment liabilities

(361,923)

(326,230)

10,174

(677,979)

Capital employed

1,258,823

221,271

-

1,480,094

 


UK

USA

Eliminations

Total

For the year  ended 31 March  2015

£000

(Restated*)

£000

(Restated*)

£000

£000

(Restated*)

Rental and related income

92,697

36,279

-

128,976






Property operating expenses

(48,096)

(21,945)

-

(70,041)






Profit/(loss) on disposal of property

12,923

(887)

-

12,036






Net valuation movements on property

185,427

44,295

-

229,722






Administrative expenses

(11,167)

(654)

-

(11,821)






Profit before finance costs

231,784

57,088

-

288,872






Net financing expense

(4,676)

(6,657)

-

(11,333)






Profit before taxation

227,108

50,431

-

277,539






Income tax charge

(37,045)

(12,934)

-

(49,979)






Profit for the period

190,063

37,497

-

227,560






Capital expenditure

39,515

3,945

-

43,460

As at 31 March 2015





Investment property

1,437,890

417,340

-

1,855,230

Other assets

69,516

48,863

(9,521)

108,858

Total segment assets

1,507,406

466,203

(9,521)

1,964,088

Total segment liabilities

(341,950)

(285,785)

9,521

(618,214)

Capital employed

1,165,456

180,418

-

1,345,874






 

* See Note 2

 

 





 

4.   Significant judgements and estimates

 

In preparing the financial information the Group must make a number of judgements and estimates. Management consider the following judgements and estimates to be particularly significant because of the level of complexity, judgement or estimation involved in their application and their impact on the financial information.

 

i.    Property valuations

The valuation of the Group's property portfolio is inherently subjective, depending on many factors, including the individual nature of each property, its location and expected future net rental values, market yields and comparable market transactions. Therefore the valuations are subject to a degree of uncertainty and are made on the basis of assumptions which may not prove to be accurate, particularly in periods of difficult market or economic conditions following the EU Referendum. All the Group's properties are valued by external valuers with appropriate qualifications and experience.

 

In the UK the aggregate amount of the valuation is £1,532,817,000 at 31 March 2016 and in the US the aggregate amount of the valuation is £487,872,000 at 31 March 2016. Both are based on the open market values assessed in accordance with professional standards. The aggregate professional valuations included in the balance sheet have been reduced by an amount of £11,328,000 relating to lease incentives included in Trade and other receivables.

 

ii.    Income taxes

The tax treatment of some transactions and calculations cannot be determined until a formal resolution has been reached with the relevant tax authorities. In such cases, a best estimate of the relevant tax charge or credit is made, having regard to the extent of uncertainties associated with it. Where the final outcome of such matters is different from amounts initially recorded, those differences will be reflected in the income and deferred tax amounts at the time of the formal resolution.

 

Additionally, judgement has been exercised in relation to the recognition of deferred tax assets where the utilisation of the underlying tax losses is uncertain. Such resolution can take a long time to achieve due to the complexity of tax legislation.

 

 

5.   The Annual General Meeting will be held at 2:00 pm on Tuesday 13 September 2016 in The Grand Saloon, Theatre Royal, Drury Lane, Catherine Street, London WC2B 5JF.

 

 

 

For further information call:

 

Mark Jenner

Company Secretary

Daejan Holdings PLC

020 7836 1555

 

Nick Oborne

Weber Shandwick Financial

020 7067 0700


This information is provided by RNS
The company news service from the London Stock Exchange
 
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