| Tue 16 Nov 2010, 15:04 | | TDH - Tradehold Limited - Results for the six months to 31 August 2010 and |
|
TDH
TDH
TDH - Tradehold Limited - Results for the six months to 31 August 2010 and
cautionary announcement
Tradehold Limited
("Tradehold" or "the Group")
(Registration number 1970/009054/06)
JSE share code: TDH, ISIN: ZAE000026902
Results for the six months to 31 August 2010 and cautionary announcement
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%
shareholding. Moorgarth owns and manages a portfolio of commercial properties
throughout the UK.
BUSINESS REVIEW
The property market, and in particular the commercial sector, continued to
function in a difficult, low-margin environment. In the first quarter of 2010
there were signs of positive growth fuelled mainly by investment funds. However,
as demand outstripped the number of properties for sale, prices rose as a
result. This resulted in a considerable slowdown in activity in the second
quarter. Since then the market has steadied further and is starting to achieve
some stability.
Moorgarth
The Moorgarth group, which focuses on property investment and development, has
experienced a slow six months. In line with the rest of the market, occupancy
levels declined further - the centre of London was the only area where demand
for commercial and retail space remained steady. The drop in occupancy levels
increased the demands of the remaining tenants for cash incentives and other
concessions, further eroding the margins needed by landlords to fund their
properties. Banks remained extremely cautious of granting loans for
refurbishments or acquisitions and when persuaded to do so, required loan to
value ratios of 50% to 70% while charging 200 to 300 basis points above standard
interbank lending rates.
In the last months of the reporting period, clearing banks started releasing
some of the toxic assets they were holding. The first releases were in the form
of very substantial lot sizes outside the financial reach of companies such as
Moorgarth. However, indications are that increased stock in smaller lot sizes
would be coming on the market in the next six to twelve months. The size of the
Group`s portfolio remained unchanged at 22 properties. It is the Group`s policy
to acquire new properties only if there is an opportunity to enhance value or to
acquire a property at a discount to market value. Although constantly on the
look-out for such properties, the focus continued to be on enhancing the
attractiveness and value of the existing holding.
Moorgarth reported an attributable loss of GBP213 000 for the period compared to
a loss of GBP1,0 million in the corresponding six months in 2009.
There are certain property asset management initiatives that may significantly
improve the financial results of Moorgarth for this financial year.
COMMENTS ON THE RESULTS
Despite the difficult market conditions and the loss suffered by Moorgarth,
Tradehold reported a net profit of GBP560 000 mainly due to a fair-value
adjustment of Tradehold`s investment in UBS AG. This adjustment is reported as
an exceptional item below:
Exceptional items
Exceptional items are made up as follows:
Unaudited Unaudited Audited
6 months 6 months 12 months
(GBP`million) to 31/08/10 to 31/08/09 to 28/02/10
Fair value adjustment: UBS AG investment 1,2 3,0 1,5
Fair value adjustment: Instore investment - 0,6 0,4
Legal and professional expenditure (0,3) - (0,5)
Total 0,9 3,6 1,4
DIVIDEND
In order to preserve cash and given the uncertainties in the market, the Board
does not recommend paying a dividend to shareholders.
OUTLOOK
Although there are indications that the property market is starting to recover,
it is hard to fathom to what extent this is sustainable. Management is of the
view that general market conditions will remain largely unchanged for the next
twelve months whereafter they should start improving.
ACCOUNTING POLICY
The interim report has been prepared in accordance with IAS 34: Interim
Financial Reporting, International Financial Reporting Standards, the AC500
Standards as issued by the Accounting Practices Board, the requirements of the
South African Companies Act, Act 61 of 1973, 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
2010. 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
Group is reporting its results in the former currency.
CH Wiese C Moore
Chairman Director
Luxembourg
10 November 2010
Sponsor
Barnard Jacobs Mellet Corporate Finance (Pty) Ltd
CAUTIONARY ANNOUNCEMENT
On 10 November 2010 the Board approved Tradehold pursuing an equity raising
through a rights offer of up to R650 million. This equity raising is intended to
strengthen the balance sheet, allow for the repayment of loans and provide
working capital for future expansion. To implement the rights offer a
shareholders` meeting will be held to increase the authorised share capital in
Tradehold, place such authorised but unissued shares under the authority of the
directors and such other resolutions required to implement the rights issue.
Details of the shareholders` meeting and the terms of the rights issue will be
communicated to shareholders in due course.
Accordingly, shareholders are advised to exercise caution when dealing in
Tradehold`s securities until a detailed announcement is made.
STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months 12 months
(GBP`000) to 31/08/10 to 31/08/09 to 28/02/10
Revenue 3 111 1 688 4 783
Trading profit/(loss) 653 (94) 2 448
Exceptional items 936 3 617 1 393
Operating profit 1 589 3 523 3 841
Interest received 58 98 418
Interest paid (1 124) (980) (2 262)
Profit before taxation 523 2 641 1 997
Taxation 1 (12) (354)
Profit after taxation 522 2 653 2 351
Loss of associated companies - (16) -
Profit for the period 522 2 637 2 351
Other comprehensive income
Currency translation differences - (2) -
Total comprehensive income for the period 522 2 635 2 351
Profit attributable to:
Owners of the parent 560 2 637 2 371
Non-controlling interest (38) - (20)
522 2 637 2 351
Total comprehensive income attributable to:
Owners of the parent 560 2 635 2 371
Non-controlling interest (38) - (20)
522 2 635 2 351
Earnings/(loss) per share (pence): basic and diluted
- before exceptional items (0,2) (0,3) 0,3
- basic earnings 0,2 0,8 0,7
- headline earnings 0,2 1,0 0,4
Number of shares for calculation of
earnings per share (`000) 346 542 347 330 346 762
STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
(GBP`000) 31/08/10 31/08/09 28/02/10
Non-current assets 52 063 48 314 52 221
Investment properties 45 167 45 790 45 167
Property, plant and equipment 6 720 355 6 900
Financial assets 176 2 169 154
Current assets 22 099 23 735 20 652
Financial assets 8 923 7 204 7 679
Trade and other receivables 1 765 1 413 2 026
Non-current assets held for sale 332 - 332
Inventories 28 - 26
Cash and cash equivalents 11 051 15 118 10 589
Total assets 74 162 72 049 72 873
Equity 29 958 29 746 29 436
Ordinary shareholders` equity 29 655 29 385 29 095
Non-controlling interest 303 361 341
Non-current liabilities 28 445 31 059 26 545
Preference share capital 12 12 12
Long-term borrowings 28 433 31 047 26 533
Current liabilities 15 759 11 244 16 892
Short-term borrowings 13 420 8 635 14 678
Other current liabilities 2 339 2 609 2 214
Total equity and liabilities 74 162 72 049 72 873
STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months 6 months 12 months
(GBP`000) to 31/08/10 to 31/08/09 to 28/02/10
Balance at beginning of the period 29 436 27 111 27 111
Purchase of treasury shares - - (26)
Total comprehensive income for the period 522 2 635 2 351
Balance at end of the period 29 958 29 746 29 436
STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 months 6 months 12 months
(GBP`000) to 31/08/10 to 31/08/09 to 28/02/10
Cash flows from operating activities (158) 990 (745)
Cash flows from investing activities (22) (538) (4 861)
Acquisition of investment properties - (658) (4 459)
Acquisition of property, plant and equipment - - (430)
Proceeds on disposal of investment properties - 453 453
Other investment activities (22) (333) (425)
Net cash flow (180) 452 (5 606)
Cash flows from financing activities 642 (1 582) (53)
Proceeds from borrowings 3 279 - 7 664
Repayment of borrowings (2 637) (1 582) (7 717)
Net increase/(decrease) in cash and
cash equivalents 462 (1 130) (5 659)
Cash and cash equivalents at
beginning of the period 10 589 16 248 16 248
Cash and cash equivalents at
end of the period 11 051 15 118 10 589
SUPPLEMENTARY INFORMATION
Unaudited Unaudited Audited
6 months 6 months 12 months
(GBP`000) to 31/08/10 to 31/08/09 to 28/02/10
1. Depreciation for the period 180 10 234
2. Capital expenditure for the period - 523 5 527
3. Calculation of headline earnings
Net profit 560 2 637 2 371
Shortfall/(surplus) on revaluation
of investment properties - 860 (1 046)
Profit on disposal of investment properties - (21) (21)
Taxation - - -
Non-controlling interest - - -
560 3 476 1 304
Unaudited Unaudited Audited
31/08/10 31/08/09 28/02/10
4. Number of shares in issue
(net of treasury shares) (`000) 346 542 347 330 346 542
5. Net asset value per share (pence) 8,6 8,5 8,4
6. Financial assets
Listed investments at fair value 7 111 9 288 5 867
Unlisted investments at fair value 1 812 - 1 812
Loans 176 85 154
9 099 9 373 7 833
7. Contingent liabilities 7 942 9 008 7 722
SEGMENTAL ANALYSIS
Trading
profit/ Total
(GBP`000) Revenue (loss) assets
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
Six months to 31 August 2009 (unaudited)
Property - retail 1 112 680 22 764
- commercial 119 (447) 8 095
- offices 194 259 6 447
- leisure 263 67 8 312
- other - (138) 3 146
Treasury - (515) 23 285
1 688 (94) 72 049
Twelve months to 28 February 2010 (audited)
Property - retail 2 162 4 285 30 462
- commercial 303 (525) 8 094
- offices 437 (271) 6 146
- leisure 1 881 402 7 973
- other - (287) 1 685
Treasury - (1 156) 18 513
4 783 2 448 72 873
Date: 16/11/2010 15:04:01 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.
