| Thu 12 Nov 2009, 13:25 | | TDH - Tradehold Limited Group Results For the six months to 31 August 2009 |
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TDH
TDH
TDH - Tradehold Limited Group Results For the six months to 31 August 2009
Tradehold Limited
(Incorporated in the Republic of South Africa)
(Registration number 1970/009054/06)
JSE share code: TDH
ISIN: ZAE000026902
("Tradehold")
Tradehold Limited Group Results For the six months to 31 August 2009
BUSINESS REVIEW
Both 2008 and 2009 have been traumatic years for the property industry across
Europe and particularly in the United Kingdom. During the period under review,
however, the fall in yields and therefore also in prices started to stabilise
although the market remains highly volatile and in certain areas such as the
prime retail sector there seems to be the first signs of a recovery.
Moorgarth
The Moorgarth group focuses on property investment, development and management.
During the six months under review the group`s performance reflected the general
malaise in the market. With banks still extremely wary of lending money for
development, funding remained difficult to come by. At the same time few
properties were offered for sale because of the unwillingness of owners to sell
into a depressed market and facing losses as a result. Those that did become
available were bought mainly by parties with available cash.
Owners of commercial and retail properties were confronted during the review
period by tenant losses caused by bankruptcies and companies going into
administration. Being in a strong bargaining position the remaining tenants have
been exerting strong pressure on landlords for rental concessions with
consequent pressure on their profit margins. Due to the compounding effect of
reduced rents and greater incentives, many development projects have been put on
hold as they are not considered viable under present circumstances.
To conserve the group`s cash resources management decided to focus for the
foreseeable future on enhancing the value of the existing portfolio and securing
tenants to fill the vacant space. Some success has been achieved in this regard.
No acquisitions were consequently made but one property sold to bring the number
of properties in the portfolio to 20. In the light of present market conditions
a further valuation was done and the value of the portfolio reduced by GBP860
000 to GBP45,8 million.
Moorgarth reported a net loss of GBP1,0 million after the revaluation compared
to a loss of GBP1,7 million in the corresponding six months in 2008.
Comments on the results
During the reporting period stability returned to the financial markets. This
aided the return of Tradehold to profitability as it offered the company the
opportunity to mark up its listed investments to market value. These mark-ups
are reported as exceptional items as detailed below:
Exceptional items
Exceptional items are made up as follows:
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
(GBP`000) 31/08/09 31/08/08 28/02/09
Fair value adjustment:
Instore investment 0,6 (0,9) (1,3)
Fair value adjustment:
UBS AG investment 3,0 (2,2) (5,9)
Loss on disposal of
Instore shares - (1,2) (1,2)
Legal and professional
expenditure - (1,2) (0,6)
Impairment of loans - - (0,5)
Total 3,6 (5,5) (9,5)
DIVIDEND
In order to preserve cash and given the uncertainties in the market the board
does not recommend paying a dividend to shareholders.
OUTLOOK
Predictions for the UK market remains highly speculative and no sustained
recovery is expected in the property sector until late 2010 and into 2011.
ACCOUNTING POLICY
The interim report is prepared in accordance with the recognition and
measurement principles of International Financial Reporting Standards, including
IAS34: Interim Financial Reporting, and in accordance with the requirements of
the Companies Act of South Africa, and the Listings Requirements of the JSE
Limited and has not been reviewed or reported on by the auditors. The accounting
policies are consistent with those applied in the annual financial statements
for the year ended 28 February 2009 except for the adoption of IAS 1 (revised) -
Presentation of Financial Statements and IFRS 8 - Operating Segments, the impact
of both of which is on the presentation of the information rather than the
measurement.
PRIOR YEAR ADJUSTMENTS
Discontinued operations
At the end of July 2008, Tradehold sold 46,5 million shares in Instore plc
("Instore") reducing the interest in Instore to 15,9%. Due to this reduction in
shareholding, Tradehold`s attributable interest in the results of Instore for
the period March 2008 to July 2008 has been reclassified as discontinued
operations.
Restatement of headline earnings
During May and July 2009, Tradehold made announcements regarding the calculation
of the headline loss for the year ended 28 February 2009. Tradehold was informed
that in the calculation of the headline loss, fair value adjustments relating to
two financial assets, impairment losses on loans and legal and professional
expenditure, were erroneously excluded. In terms of Circular 3/2009, as issued
by the South African Institute of Chartered Accountants, items of this nature
should be included in headline earnings. The correct application of Circular
3/2009 results in a headline loss of 1,8 pence per share in respect of the six
months ended 31 August 2008, calculated as follows:
Unaudited Unaudited
6 months to 6 months to
31/08/08 31/08/08
(GBP`million) Restated As reported
Net loss for the period (8,2) (8,2)
Loss on disposal of investment in associate 1,2 1,2
Shortfall on revaluation of investment
properties after taxation and
minority interest 0,9 0,9
Fair value adjustment: Instore investment - 0,9
Fair value adjustment: UBS investment - 2,2
Legal and professional expenditure - 1,2
Headline loss for the period (6,1) (1,8)
Headline loss per share (pence) (1,8) (0,5)
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
Luxembourg,
11 November 2009
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 listed UK retailing group Instore plc, in which it has a
15,9% shareholding. Moorgarth owns and manages a portfolio of mostly retail
properties as well as a growing number of commercial and industrial buildings.
STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
(GBP`000) 31/08/09 31/08/08 28/02/09
Continued operations
Revenue 1 688 1 518 3 425
Trading loss (94) (354) (6 044)
Exceptional items 3 617 (5 540) (9 472)
Operating profit/(loss) 3 523 (5 894) (15 516)
Net interest (paid)/received (882) 26 (1 515)
Profit/(loss) before taxation 2 641 (5 868) (17 031)
Taxation (12) 30 111
Profit/(loss) after taxation 2 653 (5 898) (17 142)
Loss of associated companies (16) (107) (247)
Profit/(loss) from continuing
operations 2 637 (6 005) (17 389)
Discontinued operations
Loss from discontinued
operations - (2 382) (2 382)
Profit and loss for the period 2 637 (8 387) (19 771)
Other comprehensive income
Currency translation differences (2) - (10)
Total comprehensive income
for the period 2 635 (8 387) (19 781)
Profit and loss attributable to:
Ordinary shareholders 2 637 (8 184) (19 494)
Resulting from continuing
Operations 2 637 (5 802) (17 112)
Resulting from
discontinued operations - (2 382) (2 382)
Minority interest - (203) (277)
2 637 (8 387) (19 771)
Total comprehensive income attributable to:
Ordinary shareholders 2 635 (8 184) (19 504)
Resulting from continuing
Operations 2 635 (5 802) (17 122)
Resulting from discontinued
Operations - (2 382) (2 382)
Minority interest - (203) (277)
2 635 (8 387) (19 781)
Earnings per share (pence)
- before exceptional items (0,3) (0,8) (2,9)
- basic 0,8 (2,4) (5,6)
- headline earnings 1,0 (1,8) (3,1)
Earnings per share from continuing operations (pence)
- before exceptional items (0,3) (0,1) (2,2)
- basic 0,8 (1,7) (4,9)
- headline earnings 1,0 (1,1) (2,5)
Number of shares for calculation of earnings
per share (`000) 347 330 347 330 347 330
STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
(GBP`000) 31/08/09 31/08/08 28/02/09
Non-current assets 48 314 54 690 48 027
Investment properties 45 790 51 382 46 445
Property, plant and
equipment 355 58 47
Interest in associated
companies - 1 015 -
Financial assets 2 169 2 235 1 535
Current assets 23 735 27 995 22 851
Listed investments 7 204 7 689 4 222
Accounts receivable 1 413 3 936 2 381
Cash and cash equivalents 15 118 16 370 16 248
Total assets 72 049 82 685 70 878
Equity 29 758 38 517 27 123
Ordinary shareholders`
equity 29 385 38 070 26 750
Preference share capital 12 12 12
Minority interest 361 435 361
Non-current liabilities:
long-term loans 31 047 34 974 31 440
Current liabilities 11 244 9 194 12 315
Short-term loans 8 635 6 408 9 824
Other current liabilities 2 609 2 786 2 491
Total equity and liabilities 72 049 82 685 70 878
STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
(GBP`000) 31/08/09 31/08/08 28/02/09
Cash flows from
operating activities 990 (1 056) (2 337)
Cash flows from
investing activities (538) (17 999) (16 722)
Net acquisition of
investment property (205) (7 491) (9 004)
Net acquisition of
listed investments - (10 049) (7 814)
Other investment activities (333) (459) 96
Net cash flow 452 (19 055) (19 059)
Cash flows from financing activities
- Net debt (repaid)/raised (1 582) 9 755 9 637
Net decrease in cash and
cash equivalents (1 130) (9 300) (9 422)
Cash and cash equivalents at
beginning of the period 16 248 25 670 25 670
Cash and cash equivalents at
end of the period 15 118 16 370 16 248
STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
(GBP`000) 31/08/09 31/08/08 28/02/09
Balance at beginning
of the period 27 123 46 904 46 904
Total comprehensive
income for the period 2 635 (8 387) (19 781)
Balance at end of the period 29 758 38 517 27 123
SUPPLEMENTARY INFORMATION
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
(GBP`000) 31/08/09 31/08/08 28/02/09
1. Depreciation for the period 10 13 25
2. Capital expenditure for
the period 523 7 536 9 426
3. Calculation of headline earnings
Net profit/(loss) 2 637 (8 184) (19 494)
Loss on disposal of
investment in associate - 1 236 1 236
Shortfall on revaluation of
investment properties 860 1 010 7 460
(Profit)/loss on sale and
scrapping of property,
plant and equipment (21) (12) 142
Taxation - - -
Minority interest - (152) (236)
3 476 (6 102) (10 892)
Unaudited Unaudited Audited
31/08/09 31/08/08 28/02/09
4. Number of shares in
issue (`000) 347 330 347 330 347 330
5. Net asset value per
share (pence) 8,5 11,0 7,7
6. Financial assets
Listed investments at
fair value: Instore 2 084 1 920 1 449
Loans 85 315 86
2 169 2 235 1 535
7. Contingent liabilities 9 008 3 212 8 525
SEGMENTAL ANALYSIS
Trading
(GBP`000) Revenue profit/(loss) Total assets
Six months to 31 August 2009 (unaudited)
Property 1 688 421 48 764
Treasury - (515) 23 285
1 688 (94) 72 049
Six months to 31 August 2008 (unaudited)
Property 1 518 140 53 640
Treasury - (494) 29 045
1 518 (354) 82 685
Twelve months to 28 February 2009 (audited)
Property 3 425 (6 319) 49 890
Treasury - 275 20 988
3 425 (6 044) 70 878
Date: 12/11/2009 13:25:01 Produced by the JSE SENS Department.
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