Haslemere N.V. reports a net profit of £42.1 (EUR 66.9) million for the nine-month period ended 30 September 2002, compared with £50.3 (EUR 79.9) million recorded over the same period in 2001.
Highlights
* Operating profit of £44.1 (EUR70.1)1) million - down 4.5%
* Total performance of £53.0 (EUR84.2) million
* Sales proceeds from property aggregate £365.0 (EUR579.8) million
* NAV per share of £45.26 (EUR71.90)
* Distribution of £6.56 or EUR10.38 per share paid in October
* Further dividend of £6.12 (EUR9.61) per share announced today
Result
As predicted, the sale of the investment in RREEF US by RoProperty in the first half year and the growing impact of sales from the property portfolio have had a dilutive effect on profits. The tax charge has increased as a consequence of the loss of the favourable BI tax treatment which pertained prior to the takeover. The change means that the company is now liable to tax on income arising in the Netherlands. Other factors contributing to the fall in profit include an exceptional charge of approximately £2.2 (EUR3.5) million relating to the unwinding of existing management incentive schemes for directors and executives following the takeover, as set out in the BCRE Offer Circular and reported in the Interim Report to 30 June 2002.
Total performance to the end of the third quarter was £53.0 (EUR84.2) million, compared with £30.6 (EUR48.6) million for the corresponding period in the previous year. Total performance includes the results of the revaluation reported in the June 2002 Interim Report to which has been added realized profits on property sales in the third quarter amounting to £1.4 (EUR2.2) million. Other movements in the reserves are principally £10.7 (EUR17.0) million of costs incurred in the first half year in connection with the BCRE takeover and a credit of £6.9 (EUR11.0) million representing the discount (relative to net asset value) on the buy-in of the minority interests in subsidiary companies in their entirety. The latter transaction was contracted towards the end of September and completed in early October once formal clearance had been received from the Authority for the Financial Markets.
Net asset value per share has decreased to £45.26 (EUR71.90) per share from £47.21 (EUR72.65) at 30 June 2002. The fall largely reflects the payment in July of a final dividend of £2.79 (EUR4.43) per share in respect of the 2001 result.
Portfolio Activity
The company is progressing with its substantial sales programme which has been enlarged and accelerated following the takeover. Total gross proceeds from sales for the nine month period were in the order of £365.0 (EUR579.8) million. The most significant sale during the third quarter was the disposal of a portfolio of 14 industrial properties in September for a consideration of approximately £115.0 (EUR182.7) million. Since the end of September, a further £160 (EUR254) million has been contracted, including the Heathrow Industrial Estate.
Although there have been no major property purchases to report in the nine month period, the company continues to look for suitable acquisitions with potential to add value through active management
Re-financing and Dividends
The Interim Report to 30 June 2002 made reference to plans for distributions from share premium reserves, funded partly by proceeds from sales and partly from increased borrowing.
A meeting of shareholders on 6 September 2002 authorized the management to make distributions for share premium reserve, subject to certain statutory conditions. The first such dividend, amounting to £6.56 or EUR10.38 per share, was paid on 23 October 2002. A second dividend of £6.12 or EUR9.61 per share is announced today for payment on 18 November 2002. Further distributions can be expected as the sales programme matures.
The management is in discussion with a major lending institution concerning the re-financing of the balance sheet. The re-financing would give rise to a more hi
