| Thu 15 Feb 2001, 0:00 | | Liberty International Plc - Preliminary Results Fo |
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LIBERTY INTERNATIONAL PLC
2000 PRELIMINARY ANNOUNCEMENT
15 February 2001
The following is the text of the preliminary announcement issued
today by Liberty International PLC:
Preliminary Results for the year to 31 December 2000
Liberty International PLC is a major UK property group owning 100 per
cent of Capital Shopping Centres PLC ("CSC"), the leading regional
shopping centre business, and Capital & Counties plc, a commercial and
retail property investment and development company. Liberty
International's investment portfolio now exceeds GBP4.0 billion.
Net asset value per share increased
- by 14.4% to 796p diluted (1999 - 696p)
- by 18.6% to 843p before dilution (1999 - 711p)
Earnings per share increased
- by 20% to 32.1p excluding exceptional profits
- by 54% to 39.0p including exceptional profits
Profit before tax increased by 24% to GBP153.0 million including
- GBP20.2m of exceptional profits, mostly from financial services
disposals and
- GBP24.3m of realised profits on listed property company share
transactions
Total return for the year of 17.4%, including dividend
Proposed final dividend of 11.5p, bringing the full year dividend
to 21.75p, up 6%
Radical transformation during the year
- repurchase and cancellation of over 106 million shares, including
29.8% interest held by Liberty Group and Standard Bank of South Africa
- merger with CSC, resulting in 100% ownership
- exit from substantially all remaining financial services businesses
recent completion of over GBP1 billion of long term debt
facilities, refinancing short term debt and providing funds for
expansion
* GBP400 million development and investment programme underway at
CSC, with The Chimes, Uxbridge, scheduled to open in March 2001
enhanced focus on the London West End and M25 orbital motorway
areas by Capital & Counties, with 226,000 sq.ft. of new office
developments under construction
Donald Gordon, Chairman of Liberty International, commented:
"The complex reorganisation embarked upon in 1999 by the unbundling of
the major proportion of the interest of our former parent group is
largely complete. We are now a focused, dynamic and independent
property enterprise, positioned to play a leading role in the UK
property industry, especially regional shopping centres, in the
challenging years ahead."
Dividends:
The directors of Liberty International PLC have proposed a final
ordinary dividend per share of 11.5p (1999 - 11.0p) to bring the
total ordinary dividend per share for the year to 21.75p (1999 -
20.5p).
The following are the salient dates for the payment of the final
dividend:
4 April 2001 Ordinary shares listed ex-dividend on the London and
Johannesburg Stock Exchanges.
6 April 2001 Record date for final dividend in London and
Johannesburg.
Sterling/Rand exchange rate struck.
8 May 2001 Dividend cheques posted to shareholders.
9 May 2001 Dividend payment day. Where previously requested,
dividend cheques available for collection from Registrar.
Further information:
The full text of the Chairman's statement and the Review of
Operations for the year ended 31 December 2000 are also being
released to the London Stock Exchange today but do not form part of
this preliminary statement.
Liberty International PLC is today making a presentation to
property analysts in London. The full text of this presentation,
which does not form part of this preliminary announcement, is
available today on Liberty International PLC's website at
www.liberty-international.co.uk.
Liberty International PLC
Consolidated profit and loss account
Year ended 31 December 2000 Year
ended
Continuing Discontinued 31 Dec
Notes Operations Operations Total 1999
Unaudited Unaudited Unaudited Restated
GBP' m GBP' m GBP' m GBP' m
Turnover 2 356.6 5.4 362.0 283.1
Cost of sales (120.0) (4.7) (124.7) (105.5)
Gross profit 236.6 0.7 237.3 177.6
Administrative expenses (18.4) (2.7) (21.1) (18.7)
Operating profit 2 218.2 (2.0) 216.2 158.9
Exceptional profit on
disposal of investments 4 26.0 6.4
Exceptional reorganisation costs - (5.0)
Profit before interest and tax 242.2 160.3
Interest payable less receivable 5 (83.4) (33.5)
Exceptional finance costs 4 (5.8) (3.6)
Profit on ordinary activities before taxation 153.0 123.2
Taxation on profit on
ordinary activities 6 (27.0) (19.0)
Taxation on profit on exceptional items (1.4) (1.7)
Profit on ordinary activities after taxation 124.6 102.5
Equity minority interests (19.1) (20.7)
Profit for the financial year 105.5 81.8
Ordinary dividends - paid and proposed (62.8) (69.4)
Transfer to retained profit 42.7 12.4
Dividends per ordinary share 21.75p 20.50p
Earnings per share before exceptional items 32.05p 26.61p
Earnings per share (basic) 39.02p 25.40p
Weighted average number of shares 270.4m 322.0m
Liberty International PLC
Consolidated balance sheet As at As at
31 December 31 December
2000 1999
Notes Unaudited Restated
GBP' m GBP' m
Fixed assets :
UK shopping centres 3,099.8 2,970.5
Other investment properties 831.1 787.4
7 3,930.9 3,757.9
Other tangible assets and investments 8 76.6 16.6
Intangible assets 6.0 12.7
4,013.5 3,787.2
Insurance assets - 3,210.7
4,013.5 6,997.9
Current assets :
Cash and near cash investments 106.2 259.6
Investments 17.7 36.3
Other current assets 10 144.6 100.2
268.5 396.1
Creditors:
amounts falling due within one year 11 (217.0) (253.3)
Net current assets 51.5 142.8
Total assets less current liabilities 4,065.0 7,140.7
Creditors:
amounts falling due after more than one year
Loans (1,481.5) (874.5)
Subordinated convertible debt (207.4) (213.4)
Other creditors (0.5) (0.4)
Provisions for liabilities and charges (9.0) (8.4)
12 (1,698.4) (1,096.7)
Liabilities attributable to
unit linked policy holders - (3,210.7)
(1,698.4) (4,307.4)
Net assets 2,366.6 2,833.3
Capital and reserves :
Called up ordinary share capital and reserves 2,352.7 2,231.0
Minority interests 9 13.9 602.3
Total shareholders' funds including
minority interests 2,366.6 2,833.3
Net assets per share 843p 711p
Net assets per share (diluted) 796p 696p
Liberty International PLC
Statement of total recognised gains and losses and reconciliation of reserves
Year ended Year ended
31 December 31 December
2000 1999
Unaudited Restated
GBP' m GBP' m
Statement of total recognised gains and losses
Profit for the financial year
attributable to shareholders 105.5 81.8
Group's share of increase in valuation of
investment properties 135.5 272.8
Gains on fixed asset investments 12.2 -
Foreign exchange and other movements 4.1 (1.7)
Total recognised gains and losses for the year 257.3 352.9
Prior year adjustment 0.9
Total gains and losses recognised since
last annual report 258.2
Reconciliation of movements in shareholders' funds
Opening shareholders' funds as previously stated 2,230.1 2,015.5
Prior year adjustment (note 6) 0.9 -
Opening shareholders' funds restated 2,231.0 2,015.5
Recognised gains and losses for the year 257.3 352.9
Dividends (62.8) (69.4)
Acquisition of minority 544.9 -
Cancellation of shares (617.7) (68.0)
Closing shareholders' funds 2,352.7 2,231.0
NOTES TO THE ACCOUNTS
1. Accounting policies
The financial information for 2000 is unaudited and does not constitute
statutory accounts within the meaning of s240 of the Companies Act 1985. The
accounts for year ended 31 December 2000, on which the auditors will report,
will be posted in February and will be laid before the Members at the
forthcoming Annual General Meeting in March 2001.
Change of accounting policy
The adoption of FRS15 has resulted in a change of accounting policy in relation
to the capitalisation of interest whereby the tax charge is no onger adjusted
for the effect of capitalised interest. Where applicable, previously reported
figures have been restated to show the financial effect of this change in
accounting policy as set out in note 6.
Other than in respect of FRS15 the accounting policies set out on pages 46 to
47 of the Liberty International PLC annual report dated 28 February 2000, have
been used in the preparation of this financial information.
2. Segmental information
Turnover Operating profit
Year ended Year ended Year ended Year ended
31 December 31 December 31 December 31 December
2000 1999 2000 1999
Unaudited Audited Unaudited Audited
GBP' m GBP' m GBP' m GBP' m
Property investment :
UK shopping centres 209.7 184.1 136.0 114.9
Commercial properties
United Kingdom 52.3 47.7 45.2 40.5
United States 16.9 14.0 10.8 8.7
Australia - 3.7 - 3.8
Property trading 40.9 21.6 11.4 9.1
Investment and other income 32.4 4.2 32.4 3.8
Financial services 9.8 7.8 1.5 (3.2)
362.0 283.1 237.3 177.6
Administrative expenses (21.1) (18.7)
216.2 158.9
Geographical analysis
United Kingdom 344.0 262.4 205.0 144.3
United States 18.0 14.5 11.2 9.3
Australia - 6.2 - 5.3
362.0 283.1 216.2 158.9
Included within investment and other income in 2000 are realised gains
of GBP24.3 million in investments in listed property company shares.
3. Discontinued operations
During the year, the group has discontinued the majority of its financial
services operations in order to focus on its core property operations. Amounts
relating to these operations have been disclosed in a separate column in the
profit and loss account in order to present more clearly the profits and losses
arising from the continuing operations of the group.
On 9 May 2000 the group entered into a contract to sell Liberty International
Pensions Limited, in which it had an 80% interest, for cash onsideration of
GBP60 million. The exceptional profit arising on the sale amounted to GBP23.2
million before tax (note 4). Tax arising on the sale of GBP1.8 million has
been charged to the profit and loss account. The principal impact on the
balance sheet was to remove the insurance assets and liabilities.
3. Discontinued operations continued
On 14 November 2000 the group entered into a contract to sell Liberty
International Jersey Limited for cash consideration of GBP33.5 million to
Liberty Group Limited of South Africa, a former substantial shareholder of the
company. The exceptional profit arising on the sale amounted to GBP3.6 million
before tax (note 4), with the net proceeds included in other debtors at 31
December 2000. Tax of GBP1.2 million arising on the sale has been charged to
the profit and loss account.
4. Exceptional items Year ended Year ended
(a) Profit on disposal of investment 31 December 31 December
2000 1999
Unaudited Audited
GBP' m GBP' m
Profits / (losses) arising on disposal of
investment properties (0.8) 3.5
Profit arising on disposal of subsidiaries 26.8 2.9
26.0 6.4
(b) Exceptional finance costs
Early redemption of US notes 1999 - 2006 (5.7) -
Repurchase of 5.5% convertible bonds (3.3) -
Early termination of swap contracts 3.2 (3.6)
(5.8) (3.6)
5. Interest payable less receivable
Year ended Year ended
31 December 31 December
2000 1999
Unaudited Audited
GBP' m GBP' m
Interest payable (98.2) (85.1)
Interest capitalised on developments 7.2 25.8
Interest receivable 7.6 25.8
(83.4) (33.5)
Interest is capitalised on the basis of the average rate of interest paid on
the relevant debt applied to the costs of developments over the
year.
6. Taxation
(a) Change of accounting policy
For the year ended 31 December 1999 the group accounting policy was to
capitalise interest net of the relevant tax relief. Following the introduction
of FRS15 this policy has changed with the effect that relevant tax relief is no
longer capitalised. The taxation charge and the carrying value of investment
properties under development have been adjusted in respect of prior years to
reflect this change in accounting policy. The tax charge for the period ended
31 December 1999 has been reduced by GBP6.5 million and consequently minority
interests increased by GBP1.7 million. The overall increase in profit resulted
in earnings per share for the period ended 31 December 1999 being restated
upwards by 1.49p per share.
6. Taxation continued
(b) Current taxation charge
Year ended Year ended
31 December 31 December
2000 1999
Unaudited Restated
GBP' m GBP' m
Current tax at 30% (1999 30.25%) (26.3) (23.7)
Advance corporation tax - 6.1
Prior year items 0.7 -
Overseas taxation (1.4) (1.4)
(27.0) (19.0)
The principal factors contributing to the low tax charge for the year were tax
relief on capitalised interest, losses brought forward from prior years and
capital allowances on assets not subject to depreciation and in respect of
which no provision for deferred taxation has been made.
7. Investment properties UK Other
shopping commercial
centres properties Total
GBP' m GBP' m GBP' m
Completed properties at
external valuation:
At 31 December 1999 2,853.7 776.3 3,630.0
Additions 22.8 21.2 44.0
Disposals - (58.6) (58.6)
Foreign exchange fluctuations - 9.2 9.2
Reclassification
- completed developments - 19.1 19.1
Amortisation - (0.8) (0.8)
Surplus on valuation 94.7 52.3 147.0
At 31 December 2000 2,971.2 818.7 3,789.9
Properties under development at cost:
At 31 December 1999 (restated)
(including GBP4.7 million
capitalised interest) 116.8 11.1 127.9
Additions 52.5 20.4 72.9
Reclassification
- completed developments - (19.1) (19.1)
Reclassification - trading properties (40.7) - (40.7)
At 31 December 2000
(including GBP11.8 million
capitalised interest) 128.6 12.4 141.0
Investment properties
At 31 December 2000 3,099.8 831.1 3,930.9
As at As at
31 December 31 December
2000 1999
Unaudited Restated
GBP' m GBP' m
Geographical analysis :
UK 3,793.8 3,631.9
US 137.1 121.3
Australia - 4.7
3,930.9 3,757.9
7. Investment properties continued
The group's interests in completed investment properties were valued as at 31
December 2000 by external valuers in accordance with the Appraisal and
Valuation Manual of the Royal Institute of Chartered Surveyors, on the basis of
open market value, gross of purchasers' costs.
At 31 December 2000 a provision of GBP443.3 million (1999 - GBP407.3 million,
of which the minorities' share was GBP106.9 million) would be required if
contingent deferred taxation were to be provided in respect of all revaluation
surpluses and relating balancing charges.
Investment properties are valued without deduction of purchasers' costs.
Full provision for purchasers' costs at 5% in the UK and 3.5% in the US would
amount to GBP148.6 million in respect of UK shopping centres and GBP38.8
million in respect of the other commercial properties. The provision required
in respect of contingent deferred taxation disclosed above would be reduced by
30% of the above amounts if provision had been made for these purchasers' costs
8. Other fixed assets As at As at
31 December 31 December
2000 1999
Unaudited Audited
GBP' m GBP' m
Listed shares 59.5 -
Own shares 15.6 13.6
Tangible fixed assets 1.5 3.0
76.6 16.6
9. Acquisition of minority interest in CSC
On 14 September 2000, the company made an offer to acquire CSC's ordinary
share capital held by minority interests. The offer was declared unconditional
on 13 November 2000 and, having received acceptances in respect of more than
90% of the minority-held shares, the company commenced procedures to acquire
compulsorily the remaining shares on 19 December 2000. By 31 December 2000,
the company had acquired all but 0.3% of CSC's ordinary shares and the
compulsory acquisition procedures were completed on 30 January 2001.
Consideration in respect of equity interests comprised 71.5 million ordinary
shares of Liberty International and GBP40.0 million cash.
Expenses of GBP4.0 million were incurred.
The balance of GBP94.9 million CSC subordinated convertible bonds not held by
the group was acquired on 18 December 2000 through the issue of GBP94.9 million
new Liberty International subordinated convertible bonds.
As a result of the acquisition, minority interests have reduced from GBP602.3
million to GBP13.9 million.
10. Other current assets
As at As at
31 December 31 December
2000 1999
Unaudited Audited
GBP' m GBP' m
Debtors 78.7 49.2
Trading properties 65.9 51.0
144.6 100.2
The estimated replacement cost of trading properties based on market
value amounted to GBP68.4 million (1999 - GBP56.4 million).
11. Creditors: amounts falling due within one year
As at As at
31 December 31 December
2000 1999
Unaudited Audited
GBP' m GBP' m
Bank loans and overdrafts (note 13) 2.9 9.8
Trade and other creditors 113.4 104.5
Dividends payable 32.1 70.7
Accruals and deferred income 68.6 68.3
217.0 253.3
12. Creditors: amounts falling due after more than one year
As at As at
31 December 31 December
2000 1999
Unaudited Audited
GBP' m GBP' m
Debentures - secured 230.0 230.0
Bank loan due 2016 - secured 172.5 172.5
Other fixed rate loans - secured 52.0 42.5
Bank loans - unsecured 685.9 40.0
Unsecured bonds 341.1 389.5
1,481.5 874.5
5.5% subordinated convertible bonds 2009 103.3 114.6
6.25% subordinated convertible bonds 2006 104.1 -
CSC 6.25% subordinated convertible bonds 2006 - 98.8
Total debt falling due after more
than one year (note 13) 1,688.9 1,087.9
Other creditors 0.5 0.4
Provisions for liabilities and charges 9.0 8.4
1,698.4 1,096.7
Since the year end, GBP550 million has been drawn on a GBP730 million 15
year non-recourse term and revolving loan facility secured on
MetroCentre and Braehead, which has been used to repay unsecured bank
loans shown above.
13. Debt
(a) Analysis of net debt As at As at
31 December 31 December
2000 1999
Unaudited Audited
GBP'm GBP'm
Debt due within one year (note 11) 2.9 9.8
Debt due after one year (note 12) 1,688.9 1,087.9
Gross debt 1,691.8 1,097.7
Cash and near cash investments (106.2) (259.6)
Net debt 1,585.6 838.1
13. Debt continued
(b) Fair value of financial instruments
At 31 December 2000 At 31 December 1999
Balance Fair Balance Fair value
sheet value sheet value
value value
Rate GBP' m GBP' m Rate GBP' m GBP' m
Debentures and other fixed rate loans :
Sterling
Debenture 2027 9.88% 150.0 225.0 9.88% 150.0 222.3
Debenture 2021 11.25% 80.0 125.2 11.25% 80.0 129.3
6.875% unsecured
bonds 2013 6.88% 196.1 184.9 6.88% 197.4 195.1
5.75% unsecured
bonds 2009 5.75% 145.0 127.8 5.75% 148.3 136.0
US Dollars
US notes
1999 - 2006 - - - 9.90% 43.8 49.1
Other fixed rate
loans 7.97% 52.8 52.8 7.93% 50.9 50.9
7.99% 623.9 715.7 8.10% 670.4 782.7
Bank loans (LIBOR linked) 860.5 860.5 213.9 213.9
1,484.4 1,576.2 884.3 996.6
Hedging instruments 6.08% - 21.6 6.01% - (2.1)
Minority interests - - - 4.3
1,484.4 1,597.8 884.3 998.8
Convertible bonds
- fixed rate 5.88% 207.4 231.0 5.84% 213.4 199.1
The adjustment to net assets in respect of the above, after credit for
tax relief, would amount to 25p per share diluted (1999 - 24p).
All other assets and liabilities are included in the balance sheet at
fair values.
14. Consolidated statement of cash flows
As at As at
31 December 31 December
2000 1999
Unaudited Audited
GBP' m GBP' m
Net cash inflow from operating activities 240.8 205.5
Returns on investments and servicing of finance (110.1) (92.3)
Taxation (36.2) (23.1)
Capital expenditure and financial investment (67.0) (278.4)
Acquisitions and disposals (14.3) 54.9
Equity dividends paid (94.3) (30.2)
Cash outflow before use of
liquid resources and financing (81.1) (163.6)
Management of liquid resources 102.6 107.6
(Decrease)/increase in financing (1) (36.5) 95.8
(Decrease)/increase in cash during the year (15.0) 39.8
14. Consolidated statement of cash flows continued
As at As at
31 December 31 December
2000 1999
Unaudited Audited
GBP' m GBP' m
Reconciliation of net cash flow to
movement in net debt (Decrease)/increase
in cash during period (15.0) 39.8
Cash inflow from increase in debt (593.5) (93.7)
Cash inflow from decrease in liquid resources (139.0) (268.8)
Movement in net debt during the period (747.5) (322.7)
Opening net debt (838.1) (515.4)
Closing net debt (1,585.6) (838.1)
(1) Analysis of financing cash flows
Borrowings drawn and bonds issued 1,143.9 109.0
Borrowings repaid and bonds cancelled (567.1) (14.8)
Payments to acquire own shares (611.3) (6.1)
Other financing cash flows (2.0) 7.7
(36.5) 95.8
15. Per share details Net assets
Net Assets Shares Restated Shares
2000 2000 1999 1999
GBP' m m GBP' m m
Number of shares used in the calculation of :
(a) Net assets per share
Basic 2,352.7 279.0 2,231.0 313.7
On conversion of bonds 207.4 42.8 114.6 23.3
Diluted 2,560.1 321.8 2,345.6 337.0
(b) Earnings per share
Weighted average shares
in issue (undiluted) 274.4 324.9
Shares owned by ESOP (4.0) (2.9)
Weighted average shares
used for calculation 270.4 322.0
(c) Convertible bonds In issue Conversion Callable
GBPm price from
5.5% subordinated convertible bonds 2009 103.3 475p 1 May 2001
6.25% subordinated convertible bonds 2006 94.9 450p 1 Jan 2004
(d) Movement in ordinary share capital
Number
m
As at 1 January 2000 313.7
Repurchased from Standard Bank / Liberty Group (93.5)
On market repurchases (12.7)
Issued as part consideration to CSC shareholders 71.5
As at 31 December 2000 279.0
Summary of Capital Shopping Centres PLC investment property valuations
31 December 1999 31 December 2000
Open Capital Open
market expended Transfers Revaluation market
value in year to trading surplus value
GBP' m GBP' m GBP' m GBP' m GBP' m
Lakeside, Thurrock 889.0 1.1 - 9.9 900.0
MetroCentre,
Gateshead 683.0 0.5 - 60.5 744.0
Braehead, Glasgow 406.6 14.5 - 3.9 425.0
Other M25 Centres 545.5 2.1 - 16.4 564.0
Other Centres 264.0 4.6 - 2.0 270.6
2,788.1 22.8 - 92.7 2,903.6
Developments at cost 116.8 52.5 (40.7) - 128.6
2,904.9 75.3 (40.7) 92.7 3,032.2
Investment in UK Prime 65.6 - - 2.0 67.6
2,970.5 75.3 (40.7) 94.7 3,099.8
31 December 2000 31 December 1999
Valuation True Valuation True
equivalent equivalent equivalent equivalent
yield yield yield yield
% % % %
Lakeside, Thurrock 5.70 5.90 5.70 5.91
MetroCentre, Gateshead 5.65 5.85 5.65 5.85
Braehead, Glasgow 6.00 6.27 5.91 6.12
Other M25 Centres 5.77* 6.03* 5.76* 6.03*
Other Centres 6.33* 6.58* 6.21* 6.48*
*weighted average yields
Summary of Capital & Counties investment property portfolio
31 December 31 Dec
31 December 1999 Net 2000
2000 Open market Expenditure Revaluation Open market
Number of value in period surplus value
properties GBP' m GBP' m GBP' m GBP' m
By location:
West End 21 248.9 (0.3) 33.3 281.9
M25 and South East 11 156.3 (20.3) 2.8 138.8
Retail and leisure
UK cities 9 184.8 4.6 11.1 200.5
Others 4 20.3 (4.4) (1.1) 14.8
Total United Kingdom
completed properties 45 610.3 (20.4) 46.1 636.0
United States 11 121.3 11.8 4.0 137.1
Australia - 4.7 (4.7) - -
Development Properties 3 11.0 1.4 - 12.4
Total 59 747.3 (11.9) 50.1 785.5
Completed properties by use:
Retail 357.4 357.3
Offices 378.9 415.8
Total 736.3 773.1
Summary of Portfolio Property Fund investment property portfolio
31 December 31 December
31 December 1999 Net 2000
2000 Open market Expenditure Revaluation Open market
Number of value in period surplus value
properties GBP' m GBP' m GBP' m GBP' m
10 40.1 3.3 2.2 45.6
The Portfolio Property Fund is an authorised unit trust specialising in UK
direct property and listed property company shares. The direct property
element of the fund is managed by Capital & Counties and the fund is 81% owned
by Liberty International.
Enquiries:
Liberty International PLC:
Donald Gordon Chairman +44 (0)207 960 1201
David Fischel Managing Director +44 (0)207 960 1207
Aidan Smith Finance Director +44 (0)207 960 1210
Public relations:
UK: Michael Sandler, Hudson Sandler +44 (0)207 796 4133
SA: Gareth David , College Hill Associates +44 (0)207 457 2020
Brendan Templeton, College Hill Associates +27 11 447 3030
