Regulatory Story
Go to market news section View chart   Print
RNS
Daejan Holdings PLC   -  DJAN   

Preliminary Results

Released 07:00 23-Jul-2019

RNS Number : 3380G
Daejan Holdings PLC
23 July 2019
 

                                                                                                                       

 23 July 2019                                                           

 

 

DAEJAN HOLDINGS PLC

UNAUDITED PRELIMINARY RESULTS ANNOUNCEMENT for the year ended 31 March 2019

 

The Chairman, Mr B S E Freshwater, today announced Preliminary Results for the year to 31 March 2019.

 

The financial highlights for the year ended 31 March 2019 are as follows:

                                                                                                                                               

 

2019

 

2018

 

 

£000

 

£000

 

 

 

 

 

 

 

 

Investment property

2,532,518

 

2,373,184

 

Properties held for sale

70,997

 

-

 

Net rental and related income from investment property

76,581

 

66,478

     

Profit before taxation

137,832

 

201,262

 

Income tax

Profit for the year

Total equity

(17,853)

119,979

1,940,521

 

1,696

202,958

1,812,993

 

Equity shareholders' funds per share

£119.07

 

£111.25

 

Earnings per share

£7.36

 

£12.45

 

 

 

 

 

 

 

 

 

 

 

 

·   The revaluation of the investment property portfolio at the year end has resulted in a net valuation surplus for the year of £83,928,000 (2018 - £146,438,000).

 

·    Rental and related income from investment property has increased in the year by 9.3% (2018 - 1.5%) The increase has principally been driven in the UK by the completion of the Travelodge hotel and other developments. In the USA the main factor has been the acquisition of three new residential properties at a total cost of $98 million.

 

·    The Board has recommended a final dividend of 71p per share in respect of the year ended 31 March 2019 payable on 1 November 2019 to shareholders on the register on 4 October 2019. This will make a total dividend for the year of 106p (2018 - 103p).

 

·   Earnings per share is calculated by reference to profit on ordinary activities after taxation attributable to equity holders of the parent of £119,893,000 (2018 - £202,889,000) and 16,295,357 (2018 - 16,295,357) ordinary shares being the weighted average number of ordinary shares in issue during the year. Equity shareholders' funds per share is calculated by reference to total equity attributable to equity holders of the parent of £1,940,354,000 (2018 - £1,812,902,000) and the ordinary shares detailed above.

 

 

DAEJAN HOLDINGS PLC

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 MARCH 2019

 

 

Year

 

Year

 

ended

 

ended

 

31 March

 

31 March

 

2019

 

2018

 

£000

 

£000

 

 

 

 

 

 

 

 

Gross rental income

142,364

 

131,323

Service charge income

13,797

 

11,562

Total rental and related income from investment property

156,161

 

142,885

 

 

 

 

Property operating expenses

(79,580)

 

(76,407)

Net rental and related income from investment property

76,581

 

66,478

 

 

 

 

Profit on disposal of investment property

12,203

 

11,893

Net valuation gains on investment property

83,928

 

146,438

Administrative expenses

(13,904)

 

(13,263)

Net operating profit before net financing costs

158,808

 

211,546

 

 

 

 

Fair value (losses)/gains on derivative financial instruments

(167)

 

 1,923

Fair value (losses)/gains on current investments

(5)

 

6

Other financial income

1,048

 

581

Financial expenses

(21,852)

 

(12,794)

Net financing costs

(20,976)

 

(10,284)

 

 

 

 

Profit before taxation

137,832

 

201,262

Income tax

(17,853)

 

1,696

Profit for the year

119,979

 

202,958

 

 

 

 

Attributable to:-

 

 

 

Equity holders of the parent

119,893

 

202,889

Non-controlling interest

86

 

69

Profit for the year

119,979

 

202,958

 

 

 

 

Basic and diluted earnings per share

£7.36

 

£12.45

 

 

DAEJAN HOLDINGS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2019

 

 

Year ended

Year ended

 

31 March

31 March

 

2019

2018

 

£000

£000

 

 

 

 

 

 

Profit for the year

119,979

202,958

Foreign exchange translation differences

24,350

(29,759)

Total comprehensive income for the year

144,329

173,199

 

 

 

Attributable to:

 

 

Equity holders of the parent

144,236

173,156

Non-controlling interest

93

43

Total comprehensive income for the year

144,329

173,199

DAEJAN HOLDINGS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2019

 

 

Issued share capital

Share premium

Translation reserve

  Retained earnings

Equity shareholders' funds

Minority interest

Total equity

 

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

Balance at 1 April 2017

4,074

555

61,117

1,589,969 

1,655,715

240

1,655,955

Profit for the year

-

-

-

202,889

202,889

69

202,958

Foreign exchange translation differences

-

-

 (29,733)

-

(29,733)

(26)

(29,759)

Distributions to minority interest

-

-

-

-

-

 (192)

(192)

Dividends to equity shareholders

-

-

-

(15,969)

(15,969)

-

(15,969)

Balance at 31 March 2018

     4,074

555

31,384

1,776,889

91

1,812,993

Profit for the year

-

-

-

119,893

119,893

86

119,979

Foreign exchange translation differences

-

-

24,343

-

24,343

7

24,350

Distributions to minority interest

-

-

-

-

-

(17)

(17)

Dividends to equity shareholders

-

-

-

(16,784)

(16,784)

-

(16,784)

Balance at 31 March 2019

     4,074

555

55,727

1,879,998

1,940,354

167

1,940,521

DAEJAN HOLDINGS PLC

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2019

 

 

31 March

 

31 March

 

2019

 

2018

 

£000

 

£000

 

 

 

 

Assets

 

 

 

Investment property

2,532,518

 

2,373,184

Deferred tax assets

226

 

197

Total non-current assets

2,532,744

 

2,373,381

 

 

 

 

Trade and other receivables

66,716

 

62,714

Current investments

151

 

158

Cash and cash equivalents

95,895

 

98,752

Properties held for sale

70,997

 

-

Total current assets

233,759

 

161,624

Total assets

2,766,503

 

2,535,005

 

 

 

 

Equity

 

 

 

Share capital

4,074

 

4,074

Share premium

555

 

555

Translation reserve

55,727

 

31,384

Retained earnings

1,879,998

 

1,776,889

Total equity attributable to equity holders of the parent

1,940,354

 

1,812,902

Non-controlling interest

167

 

91

Total equity

1,940,521

 

1,812,993

 

 

 

 

Liabilities

 

 

 

Loans and borrowings

418,069

 

296,501

Deferred tax liabilities

293,431

 

271,807

Total non-current liabilities

711,500

 

568,308

 

 

 

 

 

 

 

 

Loans and borrowings

12,685

 

53,958

Trade and other payables

58,677

 

52,489

Current taxation

43,120

 

47,257

Total current liabilities

114,482

 

153,704

Total liabilities

825,982

 

722,012

Total equity and liabilities

2,766,503

 

2,535,005

 

 

 

DAEJAN HOLDINGS PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2019

 

 

Year

Year

 

ended

ended

 

31 March

31 March

 

2019

2018

 

 

£000

£000

£000

£000

Cash flows from operating activities

 

 

 

 

Cash generated from operations

61,506

 

56,480

 

Interest received

1,048

 

581

 

Interest paid

(15,486)

 

(12,592)

 

Tax paid

(8,855)

 

(8,967)

 

Net cash from operating activities

 

38,213

 

35,502

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Acquisition and development of investment property

(108,463)

 

(39,424)

 

Proceeds from sale of investment property

16,098

 

16,085

 

Net cash absorbed by investing activities

 

(92,365)

 

(23,339)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Repayment of bank loans                                     

(59,603)

 

(2,509)

 

New bank loans                                                                                                  

60,000

       

15,000

 

Repayment of mortgages

(40,063)

 

(58,398)

 

New mortgages

102,814

 

70,216

 

Dividends paid to equity holders of the parent

Payments to non-controlling interest

(16,784)

(17)

 

(15,969)

(192)

 

Net cash generated by financing activities

 

46,347

 

8,148

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(7,805)

 

20,311

Cash and cash equivalents brought forward

 

98,752

 

84,283

Effect of exchange rate fluctuations on cash held

 

 

4,948

 

 

 

(5,842)

Cash and cash equivalents

 

95,895

 

98,752

 

 

DAEJAN HOLDINGS PLC

 

Notes

1.  The financial information set out in this Preliminary Announcement does not constitute the Company's statutory accounts for the years ended 31 March 2019 or 2018.  The financial information for 2018 is derived from the statutory accounts for 2018 which have been delivered to the Registrar of Companies. The Auditors have reported on the 2018 accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.  The statutory accounts for 2019 will be finalised on the basis of the financial information presented by the Directors in this Preliminary Announcement and using policies consistent in all material respects with the policies applied in the Company's statutory accounts for 2018, as set out in those accounts as delivered to the Registrar of Companies. The statutory accounts for 2019 will be delivered to the Registrar of Companies following the Company's next Annual General Meeting.

 

 

2.   Significant judgements and estimates

 

In preparing the financial information the Group must make a number of judgements and estimates. Management consider the following judgements and estimates to be particularly significant because of the level of complexity or estimation involved in their application and their impact on the financial information.

 

i.    Property valuations

The valuation of the Group's property portfolio is inherently subjective, depending on many factors, including the individual nature of each property, its location and expected future net rental values, market yields and comparable market transactions. Therefore the valuations are subject to a degree of uncertainty and are made on the basis of assumptions which may not prove to be accurate, particularly in periods of difficult market or economic conditions. All the Group's properties are valued by external valuers with appropriate qualifications and experience.

 

In the UK the aggregate amount of the valuation is £1,875,195,000 at 31 March 2019 and in the US the aggregate amount of the valuation is £750,468,000 at 31 March 2019. Both are based on the open market values assessed in accordance with professional standards. The aggregate professional valuations included in Investment property on the balance sheet have been reduced by an amount of £70,997,000 transferred to Properties held for sale and £22,148,000 relating to lease incentives included in Trade and other receivables.

 

ii.    Income taxes

The tax treatment of some transactions and calculations cannot be determined until a formal resolution has been reached with the relevant tax authorities. In particular, the Group is discussing the treatment of historical financing arrangements with tax authorities. In such cases, a best estimate of the relevant tax charge or credit is made, having regard to the extent of uncertainties associated with it. Where the final outcome of such matters is different from amounts initially recorded, those differences will be reflected in the income and deferred tax amounts at the time of the formal resolution.

 

 

3.   Segmental Analysis

 

 

UK

USA

Eliminations

Total

For the year ended 31 March 2019

£000

£000

£000

£000

Rental and related income

100,364

55,797

-

156,161

 

 

 

 

 

Property operating expenses

(48,831)

(30,749)

-

(79,580)

 

 

 

 

 

Profit/(loss) on disposal of property

12,728

(525)

-

12,203

 

 

 

 

 

Net valuation movements on property

51,845

32,083

-

83,928

 

 

 

 

 

Administrative expenses

(13,085)

(819)

-

(13,904)

 

 

 

 

 

Profit before finance costs

103,021

55,787

-

158,808

 

 

 

 

 

Net financing expense

(12,212)

(8,764)

-

(20,976)

 

 

 

 

 

Profit before taxation

90,809

47,023

-

137,832

 

 

 

 

 

Income tax charge

(13,725)

(4,128)

-

(17,853)

 

 

 

 

 

Profit for the year

77,084

42,895

-

119,979

 

 

 

 

 

Capital expenditure

23,644

81,858

-

105,502

As at 31 March 2019

 

 

 

 

Investment property

1,785,746

746,772

-

2,532,518

Other assets

152,777

92,979

(11,771)

233,985

Total segment assets

1,938,523

839,751

(11,771)

2,766,503

Total segment liabilities

(396,165)

(441,588)

11,771

(825,982)

Capital employed

1,542,358

398,163

-

1,940,521

 

 

UK

USA

Eliminations

Total

For the year ended 31 March 2018

£000

£000

£000

£000

Rental and related income

92,395

50,490

-

142,885

 

 

 

 

 

Property operating expenses

(47,278)

(29,129)

-

(76,407)

 

 

 

 

 

Profit/(loss) on disposal of property

12,900

(1,007)

-

11,893

 

 

 

 

 

Net valuation movements on property

97,504

48,934

-

146,438

 

 

 

 

 

Administrative expenses

(12,600)

(663)

-

(13,263)

 

 

 

 

 

Profit before finance costs

142,921

68,625

-

211,546

 

 

 

 

 

Net financing expense

(3,352)

(6,932)

-

(10,284)

 

 

 

 

 

Profit before taxation

139,569

61,693

-

201,262

 

 

 

 

 

Income tax (charge)/credit

(21,883)

23,579

-

1,696

 

 

 

 

 

Profit for the year

117,686

85,272

-

202,958

 

 

 

 

 

Capital expenditure

32,057

8,580

-

40,637

As at 31 March 2018

 

 

 

 

Investment property

1,783,506

589,678

-

2,373,184

Other assets

84,777

87,821

(10,777)

161,821

Total segment assets

1,868,283

677,499

(10,777)

2,535,005

Total segment liabilities

(385,452)

(347,337)

10,777

(722,012)

Capital employed

1,482,831

330,162

-

1,812,993

 

 

 

 

 

 

 

4.   Taxation

 

The Group's overall effective tax rate was 13.0% charge (2018 - 0.8% credit). In the UK, the effective tax rate was 15.1% (2018 - 15.7%). In the USA, the effective rate was 8.8% charge (2018 - 38.2% credit). In the USA we had a tax credit in 2018 due to the Trump administration change in the USA corporate tax rate from 35% to 21% which led us to recalculate our USA deferred tax liabilities as well.

 

 

5.   Dividends

 

Dividends of £16.8m (2018:£16.0m) were paid in the year ended 31 March 2019.

 

 

6.   Investment Properties

 

A full valuation of the Group's properties has been carried out by individual professional valuers at 31 March 2019.

 

 

2019

 

2018

 

£000

 

£000

Opening valuation

2,373,184

 

2,256,800

New acquisitions

77,477

 

1,069

Additions to existing properties

28,025

 

39,568

Transfer to properties held for sale

(70,997)

 

-

Disposals

(4,339)

 

(4,134)

 

2,403,350

 

2,293,303

Revaluation gain

83,928

 

146,438

Foreign exchange gain/(loss)

45,240

 

(66,557)

Closing valuation

2,532,518

 

2,373,184

 

 

7.   Cash generated from operations

 

 

2019

 

2018

 

£000

 

£000

Net operating profit before net financing costs

158,808

 

211,546

Adjusted for:

 

 

 

Net valuation gain on investment property

(83,928)

 

(146,438)

Net gain on sale of investment property

Net valuation loss on listed investments

(12,203)

2

 

(11,893)

10

Cash flows from operations before changes in working capital

 

Changes in working capital:

 

62,679

 

 

53,225

 

Change in trade and other receivables

(2,982)

 

366

Change in trade and other payables

1,809

 

2,889

Working capital movement

(1,173)

 

3,255

Cash generated from continuing operations

61,506

 

56,480

 

 

8.   Financial Instruments - fair value disclosure

 

The Group seeks to reduce interest rate risk by fixing rates on the majority of its loans and borrowings, either through the use of the fixed rate mortgage finance or through interest rate swaps. The Group does not speculate in treasury products.

 

The Group does not hedge account and all its interest rate swaps are initially recognised and subsequently recorded at fair value, with any movement being recorded in the consolidated income statement. The fair values of all interest rate swaps and fixed rate loans are determined by reference to observable inputs that are classified as Level 2 in the fair value hierarchy set out in International Financial Reporting Standard 13 Fair Value Measurement. Fair values have been determined by discounting expected future cash flows using market interest rates and yield curves over the remaining term of the instrument, as adjusted to reflect the credit risk attributable to the Group and, where relevant, it's counterparty and fees.

 

 

Unaudited

 

Audited

 

31 March 2019

 

31 March 2018

 

Book Value

Fair Value

 

Book Value

Fair Value

 

£000

£000

 

£000

£000

Loans and borrowings

430,754

450,770

 

350,459

358,199

Interest rate swaps

1,328

1,328

 

1,161

1,161

 

432,082

452,098

 

351,620

359,360

 

 

 

 

 

 

Current

14,013

15,927

 

55,119

55,898

Non-current

418,069

436,171

 

296,501

303,462

 

432,082

452,098

 

351,620

359,360

 

In both 2019 and 2018 there were no non-recurring fair value measurements and there were no material differences between the fair value and carrying amounts of all the other financial instruments of the Group.

 

 

9.   Related party transactions

 

Day-to-day management of the Group's properties in the UK is mainly carried out by Highdorn Co. Limited ("Highdorn") and by Freshwater Property Management Limited ("FPM"). Mr BSE Freshwater and Mr SI Freshwater are directors of both companies. They have no beneficial interest in the share capital of Highdorn. Mr BSE Freshwater, Mr SI Freshwater and Mr D Davis are directors of the parent company of FPM but have no beneficial interest in either company. Mr CB Freshwater and Mr RE Freshwater have a beneficial interest in a trust holding interests in shares in Highdorn.

 

In their capacity as property managing agents, Highdorn and FPM collect rents and incur direct property expenses on behalf of the Group. At 31 March 2019, the aggregate net amount due from the Group to Highdorn and FPM was £0.5 million (2018 - £2.7 million due to the Group from Highdorn and FPM). These amounts are not secured and are payable on demand. No guarantees have been given or received and the amounts are settled in cash. The amount charged to the Group for the provision of property and other management services by Highdorn and FPM for the year ended 31 March 2019 was £4.9 million (2018 - £6.2 million).

 

 

10. The Annual General Meeting will be held at 2:30 pm on Tuesday 17 September 2019 in The Connaught Rooms, 61-65 Great Queen Street, London WC2B 5DA.

 

 

 

 

 

For further information call:

 

Mark Jenner

Company Secretary

Daejan Holdings PLC

020 7836 1555

 

Victoria Dodson

Weber Shandwick

020 7067 0700


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
FR QLLFLKDFEBBX
Close


London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

 


Preliminary Results - RNS