Condensed consolidated interim statement of cash flows (Unaudited)

for the six months ended 30 June 2011

 

 

	First Half		First Half		Full Year
	2011		2010		2010
	£'000		£'000		£'000
Operating activities
Profit/(loss) for the period	1,299		1,315		3,962
Adjustments for:
Net valuation (gains)/losses on investment property	(463)		(730)		(1,577)
Gain on disposal of investment property	(35)		(42)		(100)
Net losses/(gains) on investments	31		422		(509)
Finance income	(7)		(5)		(10)
Finance expense	3		2		1
Income tax (expense)/credit	-		(103)		(55)
Operating cash flow before changes in working capital and provisions	828		859		1,712
(Increase)/decrease in trade and other receivables	(8)		20		10
(Decrease)/increase in trade and other payables	(3)		13		120
Cash generated from operations	817		892		1,842
Finance income	7		5		10
Finance expense	(3)		(2)		(1)
Income tax paid	-		-		(25)
Cash flows from operating activities	821		895		1,826
Investing activities
Purchase of fixed assets   - investment property	-		-		(1,558)
- equity investments	(378)		(727)		(1,028)
Sale of fixed assets          - investment property	1,300		297		355
- equity investments	-		2,481		3,326
Cash flows from investing activities	922		2,051		1,095
Financing activities
Loan repayments	-		-		-
Dividends paid	(909)		(827)		(1,395)
Cash flows used in financing activities	(909)		(827)		(1,395)
Net increase in cash and cash equivalents	834		2,119		1,526
Cash and cash equivalents at 1 January 2011	2,472		946		946
Cash and cash equivalents at 30 June 2011	3,306		3,065		2,472

 

NOTES (unaudited)

 

1.  Nature of operations and general information

Highcroft Investments PLC ('Highcroft') and its subsidiary (together 'the group') principal activities are investment in property and equities. It is incorporated and domiciled in Great Britain.  The address of Highcroft Investments PLC's registered office, which is also its principal place of business, is Thomas House, Langford Locks, Kidlington, OX5 1HR.  Highcroft's condensed consolidated interim financial statements are presented in Pounds Sterling (£), which is also the functional currency of the group. These condensed consolidated interim financial statements have been approved for issue by the directors on 25 August 2011. The financial information for the year ended 31 December 2010 set out in this interim report does not constitute statutory accounts as defined in Section 404 of the Companies Act 2006.  The group's statutory financial statements for the year ended 31 December 2010 have been filed with the Registrar of Companies.  The auditor's report on those financial statements was unqualified and did not contain statements under Section 498(2) or Section 498(5) of the Companies Act 2006.

 

2.  Basis of preparation

These condensed consolidated interim financial statements are for the six months ended 30 June 2011.  They have been prepared in accordance with IAS 34, Interim Financial Reporting.  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2010. 

 

These condensed consolidated interim financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment properties and the measurement of equity investments at fair value. These condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2010. 

 

The accounting policies have been applied consistently throughout the group for the purposes of preparation of these condensed consolidated interim financial statements.

 

3.  Segmental reporting

Segmental information is presented in the condensed consolidated interim financial statements in respect of the group's business segments.  The business segment reporting format reflects the group's management and internal reporting structure. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.  All gross income is from external tenants or external investments.

 

The group is comprised of the following main business segments:

*      Commercial property comprising retail outlets, offices and warehouses.

*      Residential property comprising mainly single-let houses.

*      Financial assets comprising exchange-traded equity investments.

3.  Segmental reporting (continued)

 

	First Half		First Half		Full Year
	2011		2010		2010
	£'000		£'000		£'000
Commercial property
Gross income	1,020		970		1,995
Profit/(loss) for the period	859		1,212		2,690
Assets	31,560		29,024		28,655
Liabilities	713		630		743
Residential property
Gross income	20		32		58
Profit for the period	365		338		654
Assets	1,742		2,423		2,695
Liabilities	10		10		23
Financial assets
Gross income	126		101		234
Profit/(loss) for the period	75		(235)		618
Assets	5,961		5,222		7,528
Liabilities	1,148		1,106		1,110
Total
Gross income	1,166		1,103		2,287
Profit for the period	1,299		1,315		3,962
Assets	39,263		36,669		38,878
Liabilities	1,871		1,746		1,876

 

The largest tenant represents 10% of gross commercial property income.

 

4.  Income tax (credit) / expense
	First Half		First Half		Full Year
	2011		2010		2010
	£'000		£'000		£'000
Current tax:
On revenue profits	-		-		(60)
On capital profits	-		(34)		(19)
Prior year underprovision	-		-		(69)
	-		(34)		(148)
Deferred tax	-		(69)		93
	-		(103)		(55)

 

The taxation charge has been based on the estimated effective tax rate for the full year.  As a Real Estate Investment Trust the group does not pay corporation tax on its profits and gains from its commercial and residential property activities.

 

5.  Dividends

 

On 25 August 2011, the directors declared a property income dividend of 11.50p per share (2010 11.00p interim dividend) payable on 20 October 2011 to shareholders registered at 23 September 2011.

 

The following property income distributions have been paid by the company.

 

	First Half		First Half		Full Year
	2011		2010		2010
	£'000		£'000		£'000
2010 final: 17.60p per ordinary share (2009 final 16.00p )	909		827		827
2010 interim: 11.00p per ordinary share	-		-		568
	909		827		1,395

 

6.  Earnings per share

 

The calculation of earnings per share is based on the profit for the period of £1,295,000 (2010 £1,315,000)  and on 5,167,240 shares (2009 5,167,240) which is the weighted average number of shares in issue during the period ended 30 June 2011 and throughout the period since 1 January 2010.

 

The allocation differs to that disclosed in the year end published accounts to better reflect the designation of realised investment gains as capital in nature and to ensure consistency with prior years. There is no impact on the total year end results.

 

In order to draw attention to the impact of valuation gains and losses which are included in the income statement but not available for distribution under the company's articles of association, an adjusted earnings per share based on the profit available for distribution of £828,000 (2010 £862,000) has been calculated.

 

	First Half		First Half		Full Year
	2011		2010		2010
	£'000		£'000		£'000
Earnings:
Basic earnings	1,299		1,315		3,962
Adjustments for:
Net valuation (profits)/losses on investment property	(498)		(772)		(1,677)
Gains and losses on investments	31		422		(509)
Income tax on (gains)/losses	-		(103)		89
Adjusted earnings	832		862		1,865
Per share amount:
Basic earnings per share	25.1p		25.4p		76.7p
Adjustments for:
Net valuation gains on investment property	(9.6)p		(14.9)p		(32.5)p
Gains and losses on investments	0.6p		8.2p		(9.9)p
Income tax on gains and losses	0.0p		(2.0)p		1.7p
Adjusted earnings per share	16.1p		16.7p		36.0p

 

 

 

7.  Investment property

 

	First Half		First Half		Full Year
	2011		2010		2010
	£'000		£'000		£'000
Valuation at 1 January 2011	30,705		27,825		27,825
Additions	-		-		1,558
Disposals	(1,266)		(255)		(255)
Gain on revaluation	463		730		1,577
Valuation at 30 June 2011	29,902		28,300		30,705

 

The directors have used an external independent valuation of properties at 30 June 2011 which has been carried out consistently with the annual valuation.

 

8.  Equity Investments

 

Listed and unlisted	First Half		First Half		Full Year
	2011		2010		2010
	£'000		£'000		£'000
Valuation at 1 January 2011	5,608		7,397		7,397
Additions	378		727		1,028
Disposals	-		(2,601)		(3,393)
(Deficit)/surplus on revaluation in excess of cost	(30)		(290)		572
Revaluation decrease below cost	(11)		(27)		(6)
Revaluation increase still below cost	9		15		10
Valuation at 30 June 2011	5,954		5,221		5,608

 

9.  Related party transactions

 

Kingerlee Holdings Limited owns, through its wholly owned subsidiaries, 25.4% (2010: 25.4%) of the company's shares and D H Kingerlee and J C Kingerlee are directors of the company, Kingerlee Holdings Limited and its wholly owned subsidiaries and shareholders of the company and Kingerlee Holdings Limited. 

 

During the period, the group made purchases from Kingerlee Holdings Limited or its subsidiaries, being a service charge in relation to services at Thomas House, Kidlington of £7,000 (2010: £7,000).  The amount owed at 30 June 2011 was nil (2010: nil).  All transactions were undertaken on an arm's length basis.