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TDH - Tradehold Limited - Unaudited interim results for the 6 months

Release Date: 21/11/2011 10:45
Code(s): TDH
Wrap Text

TDH - Tradehold Limited - Unaudited interim results for the 6 months ended 31 August 2011 Tradehold Limited ("Tradehold" or "the company") (Registration number 1970/009054/06) JSE share code: TDH ISIN: ZAE000152658 Unaudited interim results for the 6 months ended 31 August 2011 Tradehold is an investment holding company with interests mainly in the Moorgarth group of property companies in which it holds the controlling interest, and in the UK retailing group Instore Limited, in which it has a 15,9% share-holding. Moorgarth owns and manages a portfolio of commercial properties throughout the UK. Business review The commercial property sector in the UK continues to reflect the turmoil that has characterised the country`s economy since 2008. The property market showed positive signs of recovery at the end of 2010 and the beginning of 2011. However, in recent months the all-pervading sense of uncertainty in the economy saw the tentative recovery falter. Occupier demand especially in the area of retail space declined and rental income came under increasing pressure as the amount of vacant space grew across the spectrum. Capital growth in the commercial property sector slowed to just 0,3% in the third quarter. Moorgarth The stuttering British economy severely depressed business confidence and thereby also the demand for office and retail space while investment in new developments dwindled. Under these conditions management during the period under review focused primarily on marketing and managing the group`s portfolio of 23 buildings as effectively as possible to minimise the amount of vacant space. Rental income increased well above budget and the group ended the period under review with a net profit of GBP0,4 million due to an increase of GBP0,6 million in the valuation of the portfolio to GBP71,2 million. Moorgarth continues to search for new investment opportunities that offer value enhancement potential over a relatively short period. In June the group acquired a retail park at a cost of GBP12 million in Perth in Scotland and several other potential acquisitions are being pursued. During the review period Moorgarth repaid GBP12,9 million in bank loans with further repayments planned for the remainder of the year. Bank funding will again be considered at an opportune time. Moorgarth does not expect the environment in which the group operates to change materially in the second half of the year and will thus continue its present strategies in managing the portfolio. Opportunities for further acquisitions might arise as clearing banks start offering repossessed portfolios in the market. As in the past, each potential opportunity will be evaluated against management`s acquisition criteria. Comments on the results Included in the trading profit are: - An unrealised currency loss of GBP0,9 million on a Swiss Franc denominated loan, and - Valuation gains on Moorgarth investment properties of GBP0,6 million. Exceptional items Exceptional items are made up as follows: Unaudited Unaudited Audited 6 months 6 months 12 months (GBP`million) to 31/08/11 to 31/08/10 to 28/02/11 Fair value adjustment: UBS AG investment (2,1) 1,2 2,0 Lease repair liabilities - - (2,9) Legal and professional expenditure (0,4) (0,3) (1,6) Recovery of lease guarantee payments - - 0,6 Impairment of loans - - (0,2) Total (2.5) 0.9 (2,1) During the reporting period the company successfully completed a rights issue in South Africa of 103 833 866 new shares at R6,26 per share raising R650 million. This bolstered the group balance sheet by GBP59 million during the period. Dividend In order to preserve cash and given the uncertainties in the market the board does not recommend paying a dividend to shareholders. Outlook With the property market in the sway of political developments in Europe it would be imprudent to venture any predictions as to where it will be moving in the second half of the year. Management policies will therefore continue to be mainly defensive with the accent on maximising the existing portfolio`s income potential. Accounting policy The interim report has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) and the AC 500 Standards as issued by the Accounting Practices Board, including IAS 34: Interim Financial Reporting, and in accordance with the requirements of the South African Companies Act, Act 71 of 2008, as amended, and the Listings Requirements of the JSE Limited. The accounting policies are consistent with those applied in the annual financial statements for the year ended 28 February 2011, except as set out below. During the period Tradehold adopted the following revised accounting standards: - IFRS 7: Financial Instruments - Disclosures (amendments resulting from May 2010 Annual Improvements to IFRS); - IAS 1: Presentation of Financial Statements (amendments resulting from May 2010 Annual Improvements to IFRS); - IAS 24: Related Party Disclosures (revised definition of related parties); - IAS 34: Interim Financial Reporting (amendments resulting from May 2010 Annual Improvements to IFRS). The adoption of these standards has had no significant effect on these results. These results have not been audited nor have they been reviewed by the group`s auditors, PricewaterhouseCoopers Inc. Reporting currency As the operations of Tradehold`s subsidiaries are conducted in pound sterling and because of the distortion caused by the fluctuating value of the rand, the company is reporting its results in the former currency. CH Wiese C Moore Chairman Director Malta 16 November 2011 Sponsor: One Capital Statement of comprehensive income Unaudited Unaudited Audited 6 months 6 months 12 months (GBP`000) to 31/08/11 to 31/08/10 to 28/02/11 Revenue 3 116 3 111 5 929 Trading profit 281 653 6 110 Exceptional items (2 589) 936 (2 112) Operating (loss)/profit (2 308) 1 589 3 998 Interest received 120 58 216 Interest paid (1 099) (1 124) (2 281) (Loss)/profit before taxation (3 287) 523 1 933 Taxation 34 1 (15) (Loss)/profit for the period (3 321) 522 1 948 Other comprehensive income Currency translation differences - - (11) Total comprehensive (loss)/income for the period (3 321) 522 1 937 (Loss)/profit attributable to: Owners of the parent (3 392) 560 1 220 Non-controlling interest 71 (38) 728 (3 321) 522 1 948 Total comprehensive (loss)/income attributable to: Owners of the parent (3 392) 560 1 209 Non-controlling interest 71 (38) 728 (3 321) 522 1 937 (Loss)/earnings per share (pence): basic and diluted - before exceptional items (0,8) (1,1) 9,6 - basic (loss)/earnings (3,4) 1,6 3,5 - headline (loss)/earnings (4,0) 1,6 (9,7) Number of shares for calculation of earnings per share (`000) 99 550 34 654 34 654 Statement of financial position Unaudited Unaudited Audited (GBP`000) 31/08/11 31/08/10 28/02/11 Non-current assets 71 844 52 063 57 530 Investment properties 65 800 45 167 51 385 Property, plant and equipment 6 029 6 720 6 126 Financial assets 15 176 19 Current assets 49 698 22 099 20 874 Financial assets 7 484 8 923 9 762 Trade and other receivables 1 932 1 765 2 054 Non-current assets held for sale - 332 - Inventories 35 28 29 Cash and cash equivalents 40 247 11 051 9 029 Total assets 121 542 74 162 78 404 Equity 86 884 29 958 31 349 Ordinary shareholders` equity 85 768 29 655 30 304 Non-controlling interest 1 116 303 1 045 Non-current liabilities 12 28 445 7 855 Preference share capital 12 12 12 Long-term borrowings - 28 433 7 843 Current liabilities 34 646 15 759 39 200 Short-term borrowings 28 659 13 420 33 707 Other current liabilities 5 987 2 339 5 493 Total equity and liabilities 121 542 74 162 78 404 Statement of changes in equity Unaudited Unaudited Audited 6 months 6 months 12 months (GBP`000) to 31/08/11 to 31/08/10 to 28/02/11 Balance at beginning of the period 31 349 29 436 29 436 Proceeds from rights issue 58 856 - - Transactions with non-controlling shareholders - - (24) Total comprehensive (loss)/income for the period (3 321) 522 1 937 Balance at end of the period 86 884 29 958 31 349 Statement of cash flows Unaudited Unaudited Audited 6 months 6 months 12 months (GBP`000) to 31/08/11 to 31/08/10 to 28/02/11 Cash flows from operating activities (865) (158) (1 582) Cash flows from investing activities (13 882) (22) (293) Acquisition of investment properties (15 072) - (82) Acquisition of property, plant and equipment (113) - (57) Proceeds on disposal of investment properties 1 300 - - Proceeds on disposal of property, plant and equipment - - 6 Other investment activities 3 (22) (160) Net cash flow (14 747) (180) (1 875) Cash flows from financing activities 45 965 642 315 Proceeds from rights issue 58 856 - - Proceeds from borrowings - 3 279 3 467 Repayment of borrowings (12 891) (2 637) (3 128) Transactions with non-controlling shareholders - - (24) Net increase/(decrease) in cash and cash equivalents 31 218 462 (1 560) Cash and cash equivalents at beginning of the period 9 029 10 589 10 589 Cash and cash equivalents at end of the period 40 247 11 051 9 029 Supplementary information Unaudited Unaudited Audited
6 months 6 months 12 months (GBP`000) to 31/08/11 to 31/08/10 to 28/02/11 1. Depreciation for the period 210 180 403 2. Capital expenditure for the period1 5 185 - 139 3. Calculation of headline earnings Net (loss)/profit (3 392) 560 1 220 Surplus on revaluation of investment properties (642) - (5 804) Profit on disposal of investment properties - - (6) Impairment of property, plant and equipment - - 428 Taxation - - - Non-controlling interest 96 - 806 (3 938) 560 (3 356)
Unaudited Unaudited Audited 31/08/11 31/08/10 28/02/11 4. Number of shares in issue (net of treasury shares) (`000) 138 488 34 654 34 654 5. Net asset value per share (pence) 61,9 85,6 87,4 6. Financial assets Listed investments at fair value 5 672 7 111 7 832 Unlisted investments at fair value 1 812 1 812 1 812 Loans 133 176 137 7 617 9 099 9 781 7. Contingent liabilities 5 349 7 942 5 428 Segmental analysis Trading Total (GBP`000) Revenue profit/(loss) assets Six months to 31 August 2011 (unaudited) Property - retail 1 325 1 893 56 167 - commercial 171 (38) 7 133 - offices 283 191 5 178 - leisure 1 337 99 7 112 - other - (133) 154 Treasury - (1 731) 45 798 3 116 281 121 542 Six months to 31 August 2010 (unaudited) Property - retail 1 216 898 29 956 - commercial 129 (63) 8 168 - offices 305 253 6 135 - leisure 1 461 322 7 851 - other - (133) 1 674 Treasury - (624) 20 378 3 111 653 74 162 Twelve months to 28 February 2011 (audited) Property - retail 2 361 9 316 38 634 - commercial 268 (972) 7 283 - offices 542 (397) 5 545 - leisure 2 708 (31) 7 376 - other 50 3 1 831 Treasury - (1 809) 17 735 5 929 6 110 78 404 Date: 21/11/2011 10:45:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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