REG - Wynnstay Properties - Interim Results for six months ended 29 Sept 2024
06/11/2024 07:00
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RNS Number : 0565L Wynnstay Properties PLC 06 November 2024
The information communicated within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of the
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WYNNSTAY PROPERTIES PLC
("Wynnstay" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 29 SEPTEMBER 2024
6 November 2024
CHAIRMAN'S STATEMENT
I am pleased to report that over the six-month period ended 29 September 2024
the portfolio has continued to perform well and thus deliver beneficial
financial results for the Company.
Interim Financial Results
The unaudited results are summarised in the table below and should be read in
conjunction with the following commentary and financial statements:
29 September 29 September
2024 2023
Rental Income +12.6% £1,369,000 £1,216,000
Property Income +12.9% £1,378,000 £1,221,000
Operating Income +23.8% £1,081,000 £873,000
Income before Taxation +25.2% £824,000 £658,000
Earnings per share +19.0% 21.9p 18.4p
Net Asset Value per share +2.5% 1,142p 1,114p
Interim Dividend per share +5.3% 10.0p 9.5p
Rental Income for the half-year increased by 12.6% compared to the same period
last year to £1,369,000 (2023: £1,216,000), reflecting higher passing rents
negotiated on rent reviews, new lettings and changes in the portfolio arising
from acquisitions and disposals.
Operating Income increased by 23.8% to £1,081,000 (2023: £873,000)
reflecting both the increased Rental Income and the net profit on the property
disposals reported in the Managing Director's Review below of £52,000 (2023:
£nil).
Borrowings from Handelsbanken of £9.971 million at the end of the half-year
(2023: £9.958 million) reflect our five-year loan fixed at a rate of 3.61%
from December 2021. At the end of the half-year, we held cash balances of
£1.435 million available for future use in the business. In addition, we have
available the undrawn £5.0 million revolving credit facility with
Handelsbanken.
Portfolio activity
Chris Betts, our Managing Director, describes the portfolio activity over the
past six months in his Managing Director's Review below.
Dividend
In light of the financial results, the Board has decided to pay an increased
interim dividend of 10.0p per share (2023: 9.5p) on 13 December 2024 to those
shareholders on the register at the close of business on 15 November 2024.
The shares will become ex-dividend on 14 November 2024.
The Board appreciates the importance of rising investment income and of
providing an attractive yield on the Company's shares for shareholders. The
increase in the interim dividend for this half-year is 5.3% compared to the
same period last year.
Outlook
Since my last statement to shareholders in the Annual Report in June
2024, the UK economic news was broadly positive for the short-term, with a
return to economic growth, the rate of inflation falling below the UK
Government's 2% target and a first reduction since 2020 in the Bank of England
base rate to 5%. Looking forward, the economic outlook will now be largely
determined by the emerging plans, policies and priorities of the new
government on growth, job creation, spending, taxation and debt. At the
present time their impact on the UK economy is uncertain. External events,
such as the conflicts in Ukraine and the Middle East may also impact the UK
economy, notably in relation to energy prices.
Against this uncertain background, the Board remains cautiously positive about
the current outlook for Wynnstay's business.
We will provide further updates to shareholders in our next Annual
Report, which will be published in mid-June 2025. The 2025 Annual General
Meeting will take place, as usual, at the RAC Club on Wednesday 16 July 2025.
On behalf of the Board, I would like to express our appreciation to
shareholders for their continued interest in and support for Wynnstay. We wish
you all a Happy Christmas and a prosperous New Year in 2025.
Philip Collins
Chairman
5 November 2024
MANAGING DIRECTOR'S REVIEW
There has been further change to the composition of the Company's portfolio
during the six months period ended 29 September 2024.
The property at North Street, Midhurst was sold on 6 June 2024 for £345,000
realising a gross profit of £15,000 before costs over the net book value of
£330,000 as at 25 March 2024. The Grade II Listed building is let as a
café until September 2026 and was bought by a private investor.
On 12 September 2024 we completed the sale of Wynnstay House, High Street,
Cosham, Hampshire also to a private investor at a price of £1,470,000.
Wynnstay developed this 13,600 sq ft office building in 1991 and it is let to
the government for use as a Jobcentre Plus until April 2028. The sale
realised a gross profit of £70,000 before costs over the net book value of
£1,400,000 as at 25 March 2024.
The sale prices secured were pleasing and in both cases were achieved at
auction. The properties were sold because following analysis, we concluded
that the capital would be better deployed in other assets with greater
potential for growth. Pending reinvestment, part of the proceeds has been used
to repay short-term borrowings.
We continue to monitor and evaluate new investment opportunities in line with
our strategy of investing in light industrial / trade counter warehouses with
strong rental growth characteristics. There has been a noticeable increase in
properties available to purchase since the beginning of September 2024.
As noted in my review in the Annual Report, our one vacant unit at year-end
was successfully relet in April 2024. The underlying rent receivable on this
small warehouse in Aylesford is 22% above the rent paid by the previous tenant
set in January 2021.
We have successfully completed a lease renewal at Riverdale Industrial Estate
in Tonbridge where the passing rent has increased by 49% over the five years
since the prior rent review, which is better than anticipated at the time of
purchase.
At Liphook, five leases have been subject to rent reviews. Two have now been
completed at levels showing a 10% increase over a three-year period with the
others expected to be settled shortly.
None of the six lease break options falling due in the first half of the year
have been exercised by the tenants, further demonstrating the resilience of
our income stream.
The portfolio is fully let and rent collection continues to be highly
satisfactory with 100% of the rent receivable during this period having been
collected. 99.5% of the rent due for the third quarter has been received to
date.
Christopher Betts
Managing Director
5 November 2024
1. STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months ended
Six months ended
Year ended
29 September 29 September 25 March
2024 2023 2024
£'000 £'000 £'000
Property Income 1,378 1,221 2,599
Property Costs (39) (26) (138)
Administrative Costs (310) (328) (671)
Net Property Income 1,029 867 1,790
Movement in Fair Value of Investment Properties - 6 (3)
Profit on Sale of Investment Properties 52 - 282
Operating Income 1,081 873 2,069
Investment Income 9 11 29
Finance Costs (266) (226) (455)
Income before Taxation 824 658 1,643
Taxation (233) (162) (287)
Income after Taxation and Total Comprehensive Income 591 496 1,356
Basic and diluted earnings per share 21.9p 18.4p 50.3p
The Company has no other items of Comprehensive Income.
2. STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
29 September 29 September 25 March
2024 2023 2024
£'000 £'000 £'000
Non-Current Assets
Investment Properties 42,185 41,819 43,915
Investments 3 3 3
42,188 41,822 43,918
Current Assets
Trade and Other Receivables 461 382 413
Cash and Cash Equivalents 1,435 996 397
1,896 1,378 810
Current Liabilities
Trade and Other Payables (646) (698) (828)
Income Taxes Payable (596) (484) (347)
(1,242) (1,182) (1,175)
Net Current Assets / (Liabilities) 654 196 (365)
Total Assets less Current Liabilities 42,842 42,018 43,553
Non-Current Liabilities
Bank Loans Payable (9,971) (9,958) (10,843)
Deferred Tax Payable (2,083) (2,034) (2,083)
(12,054) (11,992) (12,926)
Net Assets 30,788 30,026 30,627
Capital and Reserves
Share Capital 789 789 789
Capital Redemption Reserve 205 205 205
Share Premium Account 1,135 1,135 1,135
Treasury Shares (1,732) (1,732) (1,732)
Retained Earnings 30,391 29,629 30,230
30,788 30,026 30,627
Net Asset Value pence per share 1,142p 1,114p 1,136p
3. STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
Six months ended Six months ended Year
ended
29 September 29 September 2023 25 March
2024 2024
£'000 £'000 £'000
Cash flows from operating activities
Income before Taxation 824 658 1,643
Adjusted for:
Decrease in Fair Value of Investment Properties - - 3
Interest Receivable (9) (11) (29)
Interest and Finance Costs payable 266 226 455
Amortised loan fees 18 7 15
Profit on Sale of Investment Properties (52) - (282)
Changes in:
(Increase) / decrease in Trade and Other Receivables (48) 100 69
Increase / (decrease) in Trade and Other Payables 68 30 25
Cash generated from operations 1,067 1,010 1,899
Income taxes paid (238) (162) (238)
Net cash from operating activities 829 848 1,661
Cash flows from investing activities
Interest and other income received 9 11 29
Sale of Investment Properties 1,783 - 891
Purchase of Investment Properties - (2,499) (5,213)
Net cash generated from investing activities 1,792 (2,488) (4,293)
Cash flows from financing activities
Interest paid (266) (226) (457)
Dividends paid (430) (406) (661)
Drawdown / (repayment) of loans net of fees (887) - 879
Net cash used in financing activities (1,583) (632) (239)
Increase / (decrease) in Cash and Cash Equivalents 1,038 (2,272) (2,871)
Cash and Cash Equivalents at beginning of period 397 3,268 3,268
Cash and Cash Equivalents at end of period 1,435 996 397
4. STATEMENT OF CHANGES IN EQUITY
UNAUDITED SIX MONTHS ENDED 29 SEPTEMBER 2024
Share Capital Capital Redemption Reserve Share Premium Account Treasury Shares Retained Earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 26 March 2024 789 205 1,135 (1,732) 30,230 30,627
Total Comprehensive Income for the period - - - - 591 591
Dividends - - - - (430) (430)
Balance at 29 September 2024 789 205 1,135 (1,732) 30,391 30,788
UNAUDITED SIX MONTHS ENDED 29 SEPTEMBER 2023
Share Capital Capital Redemption Reserve Share Premium Account Treasury Shares Retained Earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 26 March 2023 789 205 1,135 (1,732) 29,541 29,938
Total Comprehensive Income for the period - - - - 496 496
Dividends - - - - (406) (406)
Balance at 29 September 2023 789 205 1,135 (1,732) 29,631 30,028
AUDITED YEAR ENDED 25 MARCH 2024
Share Capital Capital Redemption Reserve Share Premium Account Treasury Shares Retained Earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 26 March 2023 789 205 1,135 (1,732) 28,541 29,938
Total Comprehensive Income for the year - - - - 1,356 1,356
Revaluation movement - - - - (6) (6)
Dividends - - - - (661) (661)
Balance at 25 March 2024 789 205 1,135 (1,732) 30,230 30,627
5. ACCOUNTING POLICIES
Wynnstay Properties PLC is a public limited company incorporated and domiciled
in England and Wales. The principal activity of the Company is property
investment, development and management. The Company's ordinary shares are
traded on the AIM, part of The London Stock Exchange (ISIN: GB0009842898).
The Company's registered number is 00022473 and registered address is
Riverbank House, 2 Swan Lane, London EC4R 3TT. The material accounting
policies are summarised below.
Basis of preparation
These unaudited condensed interim financial statements have been prepared in
accordance with UK adopted International Accounting Standards ("IAS") IAS 34
Interim Financial Reporting. They do not constitute statutory accounts within
the meaning of section 435 of the Companies Act 2006.
The unaudited condensed interim financial statements should be read in
conjunction with the financial statements of the Company as at and for the
year ended 25 March 2024 which were prepared in accordance with IAS. The
financial information for the six-month periods ended 29 September 2024 and 29
September 2023 have not been audited and the auditors have not reported on or
reviewed these interim financial statements.
Comparative information
The information for the year ended 25 March 2024 has been extracted from the
latest published audited financial statements.
Investment Properties
All the Company's Investment Properties are independently revalued annually
and stated at fair value at 25 March. The aggregate of any resulting increases
or decreases are taken to Operating Income within the Statement of
Comprehensive Income.
Investment Properties are recognised as acquisitions or disposals based on the
date of contract completion.
Depreciation
In accordance with IAS 40, freehold Investment Properties are included in the
Statement of Financial Position at fair value and are not depreciated.
Disposal of Investments
The gains and losses on the disposal of Investment Properties and other
investments are included in Operating Income in the year of disposal. Gains
and losses are calculated on the net difference between the carrying value of
the properties and the net proceeds from their disposal.
Property Income
Property Income is recognised on a straight-line basis over the period of the
lease and is measured at the fair value of the consideration receivable. Lease
deposits are held in separate designated deposit accounts and are thus not
treated as assets of the Company in the financial statements. All income is
derived in the United Kingdom. When there are changes to a tenancy agreement
it is considered whether any lease incentives were given. Lease incentives are
amortised over the lease term.
Deferred Income
Deferred Income arises from rents received in advance of the period.
Taxation
Current and deferred tax are recognised and measured in accordance with IAS
12. The Company provides for deferred tax on investment properties by
reference to the tax that would be due on the sale of the investment
properties.
Trade and Other Receivables
All receivables do not carry any interest and are short term in nature.
Cash and Cash Equivalents
Cash and Cash Equivalents comprise cash at bank and on demand deposits.
Trade and Other Payables
All trade and other accounts payable are non-interest bearing.
Pensions
Pension contributions are charged to the Statement of Comprehensive Income as
incurred. The pension scheme is a personal defined contribution scheme.
Borrowings
Borrowings are classified as Other Payables under Current Liabilities unless
the Company has a right to defer settlement of the liability at the end of the
reporting period for at least 12 months, in which case they are classified as
Bank Loans Payable.
Dilapidations
Dilapidations receipts are recognised in the Statement of Comprehensive Income
when the right to receive them arises. They are recorded in revenue as Other
Property Income unless a property has been agreed to be sold whereby the
receipt is treated as part of the proceeds of sale of the property.
Treasury Shares
Shares acquired by the Company under the authority to make market purchases of
its shares approved at the General Meeting on 19 July 2022, including all the
costs directly associated with the share buy-back, are included within
Treasury Shares in the Statement of Financial Position.
6. PROPERTY INCOME
Unaudited Unaudited Audited
Six months ended Six months ended Year
ended
29 September 29 September 2023 25 March
2024 2024
£'000 £'000 £'000
Rental Income 1,369 1,216 2,541
Other Property Income 9 5 58
1,378 1,082 2,599
Rental Income comprises rents earned and apportioned over the lease period
taking into account rent free periods and rents received during the period.
Other Property Income comprises received Dilapidations and miscellaneous
income arising from letting of properties.
7. DIVIDENDS
Period Payment Per share (pence) Amount paid/proposed
Date £'000
6 months to 29 September 2024 13 December 2024 10.0 269
6 months to 29 September 2023 15 December 2023 9.5 256
Year ended 25 March 2024 26 July 2024 16.0 430
8. EARNINGS PER SHARE AND NET ASSET VALUE PER SHARE
Basic earnings per share are calculated by dividing Income after Taxation and
Total Comprehensive Income attributable to Ordinary Shareholders of £591,000
(2023: £496,000) by the weighted average number of 2,696,617 (2023:
2,696,617) Ordinary Shares in issue during the period excluding shares held in
treasury. Net Asset Value per share is calculated by dividing Net Assets of
£30,788,000 (2023: £30,028,000) by the number of 2,696,617 Ordinary Shares
in issue at the reporting date excluding shares held in treasury. There
are no options and no instruments in issue that would have the effect of
diluting Earnings per Share.
For further information please contact:
Wynnstay Properties PLC
Philip Collins (Chairman)
Chris Betts (Managing Director)
Tel: 07469 042389
Zeus (Nominated Adviser and Broker)
Hugh Morgan, Sarah Mather (Investment Banking)
Tel: 020 3829 5000
LEI number: 2138006MASI24JYW5076
For more information on Wynnstay visit: www.wynnstayproperties.co.uk
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