Haslemere: Third Quarter Report - September 2003

Haslemere NV reports a net profit before exceptional interest expense of GBP3.0 (EUR4.3) million over the first 9 months of the financial year ending 31 December 2003, compared with a net profit of GBP42.1 (EUR60.3) million over the corresponding period for 2002. The net loss reported in the profit and loss account of GBP 3.7 (EUR5.3) million has been adjusted for the exceptional interest expense of GBP6.7 (EUR9.6) million to arrive at 'core operating profit'.


  • Core operating profit before interest expense GBP3.0 (EUR4.3) million
  • Net loss after exceptional interest expense in connection with debt repayment GBP3.7 (EUR5.3) million
  • Debt repaid during 2003 GBP300.5 (EUR430.1) million

Financial Results
Operating Performance
Haslemere achieved a core operating profit of GBP3.0 (EUR4.3) million for the nine months ended 30 September 2003 (2002: GBP38.3 (EUR54.8) million, excluding income from participating interests), and a loss after exceptional interest expense of GBP3.7 (EUR5.3) million for the first nine months of the year ending 31 December 2003 (2002: profit GBP42.1 (EUR60.3) million).

The loss is in line with expectations, and includes all exceptional costs incurred or accelerated consequent upon the ongoing restructuring of the Company’s debt during the period. This restructuring was achieved through the early repayment of senior loans and opportunistic redemption of fixed rate debt, made possible from cash generated through property sales. The total of these costs, included within interest expense, for the nine month period amounts to GBP6.7 (EUR9.6) million. Announcement by the company since the end of the quarter, of further bond buy-in’s, will have the impact of increasing exceptional interest expense for the year by a further GBP2.2 (EUR3.1) million.

The revaluation of the portfolio at the end of the last quarter and profits arising from property sales for the nine months, together with other movements in reserves contributed to a negative total performance for the nine months of GBP17.3 (EUR24.8) million.

Portfolio Activity
The net deficit on revaluation of the property portfolio during the year to date amounted to approximately GBP11.4 (EUR16.3) million. This figure takes into account profits on sales amounting to GBP3.5 (EUR5.0) million and an external revaluation of the portfolio as at 30 June 2003. Gross proceeds from the sale of property in the period were GBP330.4 (EUR472.9) million.

The revaluation for the corresponding period in 2002 produced a surplus of GBP19.9 (EUR28.5) million.

Shareholders’ Equity
Net result, revaluation results, currency results and other movements in shareholders’ equity during the quarter was GBP1.0 (EUR1.4) million, which when added to performance for the first half year produced a negative total performance for the period to date of GBP17.3 (EUR24.8) million. This compares with a positive total performance of GBP53.0 (EUR75.9) million for the first 9 months of 2002.

Shareholders’ equity has decreased from GBP254.2 (EUR363.9) million at 31 December 2002 to GBP236.9 (EUR339.1) million at 30 September 2003.

Debt Financing
Total borrowings have decreased by GBP300.5 (EUR430.1) million, from GBP537.6 (EUR769.5) million at 31 December 2002 to GBP237.1 (EUR339.4) million at 30 September 2003. This decrease includes the buy-in of GBP94.0 (EUR134.6) million of the GBP200 million 2024 Jersey bond and the repayment of variable rate borrowings.

The company has announced, since the end of the September quarter, further buy-in’s of the Jersey bond amounting to GBP53.0 (EUR75.9) million.

Leverage has been reduced from 62.95% at 31 December 2002 to 47.09% at 30 September 2003

The adjustment required to increase the value of fixed interest debt to its fair value, is estimated at GBP34.6 (EUR49.5) million gross, and GBP24.2 (EUR34.6) million net of tax relief, as at 30 September 2003. The corresponding figures at the end of December 2002 were GBP31.2 (EUR44.7) million and GBP21.9 (EUR31.3) m

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