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Half Year Results
RNS - London Stock Exchange | 28/08/2015

FOR IMMEDIATE RELEASE

28 August 2015

LONDON & ASSOCIATED PROPERTIES PLC

HALF YEAR RESULTS TO 30 JUNE 2015

London & Associated Properties PLC is a main market listed group which invests in UK shopping centres and retail property whilst also managing property assets for institutional clients.

It holds a substantial investment in Bisichi Mining PLC (main market listed) which operates coal mines in South Africa and owns UK property investments.

HIGHLIGHTS

  • Significant improvement in group performance:
    • Operating profit before interest charges more than tripled to £1.8 million against £0.5 million
    • Pre-tax loss falls to £0.13 million compared to £2.38 million
    • Loss after tax attributable to equity shareholders falls to £0.4 million compared to £1.6 million
  • LAP produced a £1.56 million uplift in results as a result of lower interest costs and charges following last year’s refinancing
  • Bisichi delivered additional £0.7 million of profit
  • Repayment of £1.25 million of £5.0 million debenture stock
  • Positive performance from property investments:
    • Completed lettings with £600,000 of annualised rental income
    • Sheffield performed strongly with £380,000 of new lettings and retail element effectively fully let
    • Brixton continues to be fully let with a long waiting list of potential tenants and adjacent proposed developments are expected to have a positive impact on this investment
    • At West Bromwich, the five year extension to Iceland’s lease provides a good springboard to capitalise on the positive lettings momentum achieved so far this year
    • Portfolio voids stand at only 2.6% by estimated rental value
  • “With the strengthened balance sheet, agreed finance facilities and a strong and increasing tenant base, LAP   is in a good position to deliver improving results over the next few years,”     Sir Michael Heller, Chairman and John Heller, Chief Executive

-more-

Contact:

         London & Associated Properties PLC                         Tel: 020 7415 5000
John Heller, Chief Executive

         Baron Phillips Associates                                        Tel: 07767 444193
Baron Phillips
Half year results for the period ended

30 June 2015

half year review

In the six months to 30th June 2015 the performance of the London & Associated Properties group (‘‘group’’), which includes our interest in Bisichi Mining PLC (‘‘Bisichi’’), has improved significantly. Operating profit before interest charges increased to £1.8 million compared with £0.5 million for the equivalent period last year.  After interest charges the net loss before tax is down to £0.13 million compared with £2.38 million in 2014.

London & Associated Properties (‘‘LAP’’) benefited from much lower interest charges and costs following last year’s refinancing and termination of the related hedging derivatives. These contributed materially to the £1.56 million improvement in LAP’s results before taxation.   Furthermore, as explained in more detail below, Bisichi achieved a significant turnaround and delivered an additional £0.7 million of profit in the period.

This means that for LAP equity shareholders the attributable after tax loss for the six months has reduced substantially to £0.4 million from £1.6 million in 2014.

In March 2015 the group repaid £1.25 million of the £5.0 million 2018 Prudential Assurance debenture stock.  Although repaying this debenture prior to the end of its term cost an additional £0.16 million, LAP will benefit from a reduction in interest costs of £0.15 million a year.

Directly Owned Property

Shareholders will be aware that retail activity has been higher during the first six months of 2015 than it has been for some time and for LAP this has translated into similarly positive trading.  Since the beginning of this year we have completed lettings with an annualised rental income of £0.6 million, although the impact on our cash flow and profitability will be much higher, as our liability for rates, service charges and insurance on these units ceases once they are occupied.

Sheffield

Orchard Square in Sheffield, our largest directly owned asset, has had a strong 2015 so far and the retail element is effectively fully let once again.  In August 2015, we exchanged contracts with Virgin Money on a significant part of the large front unit that had been previously let to Republic.  Virgin Money has taken a 15 year lease (without tenant breaks) at a rent of £285,000 per annum.  The rent free period is spread over the first five years of the lease which means the unit becomes income producing once we hand it over in September.  Fit out works are currently in progress.

In addition, we are creating a second retail unit with an estimated rental value in excess of £50,000 per annum, plus we have retained the large first floor of the unit and are considering a number of options for it.

Elsewhere in Orchard Square, we completed lettings to Scrivens Opticians at £37,000 per annum and Taking Shape, an Australian fashion chain for plus-sized women at £57,500 per annum.  Both of these lettings are in excess of the previous rental levels.

As a result of these lettings (and aside from the newly created space) we have only one small external unit which remains vacant, and one inside the centre currently let to a temporary trader, but which is under offer to a national retailer.  Once these are tenanted, the shopping centre will be fully let.

Brixton

Brixton continues to trade exceptionally well. It remains fully let with a long list of retailers waiting for a unit to become available.  In the first half of the year, a new market concept called Pop Brixton opened to the rear of Brixton Village.  This market offers street food and drink plus other retail.  Our experience to date is that it further enhances the pitch of our markets, and has widened Brixton’s catchment area.

As reported at the year end, this is one of two significant developments directly benefiting our markets.  The Council is looking to create a cultural hub including a theatre and theatre school, a chef school and some 350 homes directly in front of Brixton Village.  Consequently, we remain optimistic about the future performance of this asset.

West Bromwich

We reported at the year-end that Kings Square in West Bromwich experienced a challenging 12 months, but that we could see positive momentum on which we intended to capitalise.  We are pleased to report that this momentum has translated into a number of new lettings and lease renewals, demonstrating that the more difficult times should be behind us.

The largest single event was a lease extension completed with Iceland, the centre’s anchor tenant.  Its original lease was due to expire in 2018 but has been extended by five years to 2023.  This is an important deal as Iceland is a significant driver of shoppers to the centre.

The remainder of our portfolio is trading as positively as it has for some time with voids of just 2.6% by estimated rental value.

Langney

Shareholders are aware that in 2014 we obtained planning consent to extend Langney Shopping Centre in Eastbourne by 30,000 sq. ft. In the last six months, we have completed the pre-letting of the anchor store of the extension to 99p Stores, the discount retailer, and are in detailed negotiations with a number of retailers for the remaining units there.

Additionally, the Schroder’s fund, which owns the investment, is near the end of its life.  We believe, therefore this is a good time to sell the centre and consequently, Langney is being marketed for disposal.  Investor response has been positive and we expect to conclude the disposal transaction later this year.

Oaktree

Our three shopping centres held in the joint venture with Oaktree Capital Management continue to perform well and we are having considerable success in driving increases in the rental income and occupancy levels.  Since the start of the year, we have carried out new lettings or have under offer units with an annualised rental income of £235,000 per annum.  We have also carried out lease renewals with an annualised rental income of £250,000 per annum.

Bisichi

In the period under review, Bisichi Mining PLC delivered profits before tax of £0.39 million as compared with a loss of £0.31 million in 2014.  This has been achieved, despite weak coal prices, by focusing on keeping production costs low and ensuring adequate levels of production at Black Wattle Colliery, Bisichi’s direct coal mining asset in South Africa.

Coal prices are now below US $57 per tonne, compared to US $85 at the beginning of 2014 and US $120 in 2011. This decline is partially offset by depreciation in the Rand against the US Dollar.  Bisichi will focus on keeping the cost of production low while lower international coal prices prevail.

In addition, Black Wattle has combined the production from its existing reserves with coal received from Blue Nightingale’s new reserves.  Blue Nightingale is a South African black owned and managed company and these reserves are part of an ongoing agreement to purchase Run of Mine coal from them.  The combined total production from the first six months was 838,000 metric tonnes (2014: 690,000 metric tonnes).

Black Wattle continues to perform well under the Quattro Programme which allows junior black-economic empowerment coal producers direct access to Richards Bay Coal Terminal.

Bisichi’s property portfolio which is managed by LAP, continues to perform well with voids of only 2.3% by estimated rental value.

Outlook and general

Our investment in Bisichi will be affected by coal prices and exchange rate variances, but the management continues to manage costs in an effort to maintain the performance going forward.

With the strengthened balance sheet, agreed finance facilities and a strong and increasing tenant base, LAP is in a good position to deliver improving results over the next few years.

Finally, on behalf of the Board, we would like to thank all our staff for their hard work during the first six months of 2015.

Sir Michael Heller                                                               John Heller
Chairman                                                                                               Chief Executive
27 August 2015
consolidated income statement

for the six months ended 30 June 2015

 6 months  6 months  Year
 ended  ended  ended
 30 June  30 June  31 December
2015 2014  2014
(unaudited) (unaudited) (audited)
Restated
Notes £’000 £’000 £’000
Group revenue 2 17,335 16,007 33,526
Operating costs (15,539) (15,514) (31,237)
Income from listed investments held for trading 1 3 3
Operating profit 2 1,797 496 2,292
Finance income 3 63 119 115
Finance expenses 3 (2,163) (2,525) (4,875)
Debenture break cost (158)
Interest rate derivative break cost (1,117) (1,117)
Result before valuation movements (461) (3,027) (3,585)
Non–cash changes in valuation of assets and liabilities
Increase in value of investment properties 853
(Decrease)/increase in trading investments (18) 4 (86)
(Decrease)/increase  in value of other investments (1) (1) 1
Adjustment to interest rate derivatives 141 (1,086)
Share of profit of joint ventures, net of tax 208 575 1,124
Result including revaluation and other movements (131) (2,449) (2,779)
Attributable to discontinued operations 69 86
Loss for the period before taxation 2 (131) (2,380) (2,693)
Income tax (charge)/credit 4 (105) 748 (3,702)
Loss for the period (236) (1,632) (6,395)
Attributable to:
Equity holders of the Company (443) (1,598) (7,140)
Non–controlling interest 207 (34) 745
Loss for the period (236) (1,632) (6,395)
Loss per share – basic 5 (0.52)p (1.89)p (8.45)p
Loss per share – diluted 5 (0.52)p (1.89)p (8.45)p

consolidated statement of comprehensive income

for the six months ended 30 June 2015

 30 June  30 June  31 December
2015 2014  2014
(unaudited) (unaudited) (audited)
Restated
£’000 £’000 £’000
Loss for the period (236) (1,632) (6,395)
Other comprehensive income:
Items that may be subsequently recycled to the income statement:
Exchange differences on translation of foreign operations (217) (135) (121)
Transfer of (loss)/gain on available for sale investments (27) 56
Taxation 6 (15)
Other comprehensive loss for the period, net of tax (238) (135) (80)
Total comprehensive loss for the period, net of tax (474) (1,767) (6,475)
Attributable to:
Equity shareholders (531) (1,648) (7,168)
Non–controlling interest 57 (119) 693
(474) (1,767) (6,475)

consolidated balance sheet

at 30 June 2015

30 June 30 June 31 December
2015 2014 2014
(unaudited) (unaudited) (audited)
Restated
Notes £’000 £’000 £’000
Non–current assets
Market value of properties attributable to Group 103,700 102,135 103,655
Present value of head leases 4,785 4,788 4,788
Property 6 108,485 106,923 108,443
Mining reserves, plant and equipment 6,348 6,415 6,257
Investments in joint ventures 3,463 2,886 3,434
Loan to joint venture 1,029 984 1,040
Held to maturity investments 2,102 2,200 2,196
Other investments 158 164 152
Deferred tax 2,306 6,249 2,324
123,891 125,821 123,846
Current assets
Inventories 1,394 1,129 1,760
Trade and other receivables 8,606 10,781 6,774
Corporation tax recoverable 31 33 35
Available for sale investments 768 826 796
Investments held for trading 105 133 122
Cash and cash equivalents 6,579 5,219 9,237
17,483 18,121 18,724
Total assets 141,374 143,942 142,570
Current liabilities
Trade and other payables (11,287) (13,120) (11,323)
Borrowings (5,083) (50,537) (3,590)
Current tax liabilities (24) (10) (24)
(16,394) (63,667) (14,937)
Non–current liabilities
Borrowings (63,647) (14,912) (65,476)
Interest rate derivatives 7 (515) (656)
Present value of head leases on properties (4,785) (4,788) (4,788)
Provisions (919) (878) (930)
Deferred tax liabilities (2,412) (1,906) (2,410)
(72,278) (22,484) (74,260)
Total liabilities (88,672) (86,151) (89,197)
Net assets 52,702 57,791 53,373
Equity attributable to the owners of the parent
Share capital 8,554 8,554 8,554
Share premium account 4,866 4,866 4,866
Translation reserve (776) (708) (696)
Capital redemption reserve 47 47 47
                Retained earnings (excluding treasury shares) 29,794 36,262 30,659
                Treasury shares (422) (885) (883)
Retained earnings 29,372 35,377 29,776
Total equity attributable to equity shareholders 42,063 48,136 42,547
Non – controlling interest 10,639 9,655 10,826
Total equity 52,702 57,791 53,373
Net assets per share 8 49.5p 56.96p 50.35p
Diluted net assets per share 8 49.5p 56.96p 50.35p

consolidated statement of changes in shareholders’ equity

for the six months ended 30 June 2015

Share
capital
£’000
Share
premium
£’000
Translation
reserves
£’000
Capital
redemption
reserve
£’000
Treasury
shares
£’000
Retained
earnings
excluding
treasury
shares
£’000
Total
excluding
Non–
Controlling
Interests
£’000

Non–controlling
Interests
£’000

Total
equity
£’000
Balance at 1 January 2014 as previously reported 8,554 4,866 (658) 47 (1,159) 38,084 49,734 49,734
IFRS 10 adjustments 10,001 10,001
Restated balance at 1 January 2014 8,554 4,866 (658) 47 (1,159) 38,084 49,734 10,001 59,735
Loss for the period (1,598) (1,598) (34) (1,632)
Other comprehensive income:
Currency translation (50) (50) (85) (135)
Total other comprehensive income (50) (50) (85) (135)
Total comprehensive income (50) (1,598) (1,648) (119) (1,767)
Transactions with owners:
Equity share options
16 16 23 39
Dividends – equity holders (106) (106) (106)
Dividends – non–controlling
Interests
(250) (250)
Acquisition of own shares (88) (88) (88)
Disposal of own shares 228 228 228
Loss on transfer of own shares 134 (134)
Transactions with owners 274 (224) 50 (227) (177)
Balance at 30 June 2014 (unaudited) 8,554 4,866 (708) 47 (885) 36,262 48,136 9,655 57,791
Restated balance at 1 January 2014 8,554 4,866 (658) 47 (1,159) 38,084 49,734 10,001 59,735
(Loss)/profit for year (7,140) (7,140) 745 (6,395)
Other comprehensive income:
Currency translation (45) (45) (76) (121)
Gain on available for sale investments  (net of tax) 17 17 24 41
Total other comprehensive income (45) 17 (28) (52) (80)
Total comprehensive income (45) (7,123) (7,168) 693 (6,475)
Transaction with owners:
Equity share options 27 27 27
Shares issued to non–controlling interests 313 313
Dividends – equity holders (106) (106) (106)
Dividends –  non–controlling
Interests
(292) (292)
Change in equity held by LAP 7 (88) (81) 111 30
Acquisition of own shares (88) (88) (88)
Disposal of own shares 229 229 229
Loss on transfer of own shares 135 (135)
Transactions with owners 7 276 (302) (19) 132 113
Balance at 31 December 2014 (audited) 8,554 4,866 (696) 47 (883) 30,659 42,547 10,826 53,373

consolidated statement of changes in shareholders’ equity – continued

for the six months ended 30 June 2015

Share
capital
£’000
Share
premium
£’000
Translation
reserves
£’000
Capital
redemption
reserve
£’000
Treasury
shares
£’000
Retained
earnings
excluding
treasury
shares
£’000
Total
excluding
Non–
Controlling
Interests
£’000

Non–controlling
Interests
£’000

Total
equity
£’000
Balance at 1 January 2015 8,554 4,866 (696) 47 (883) 30,659 42,547 10,826 53,373
(Loss)/profit for the period (443) (443) 207 (236)
Other comprehensive income:
Currency translation (80) (80) (137) (217)
Loss on available for sale investments  (net of tax) (8) (8) (13) (21)
Total other comprehensive income (80) (8) (88) (150) (238)
Total comprehensive income (80) (451) (531) 57 (474)
Transactions with owners:
Equity share options
5 5 6 11
Dividends – equity holders (133) (133) (133)
Dividends – non–controlling
Interests
(250) (250)
Acquisition of own shares (51) (51) (51)
Disposal of own shares 226 226 226
Loss on transfer of own shares 286 (286)
Transactions with owners 461 (414) 47 (244) (197)
Balance at 30 June 2015 (unaudited) 8,554 4,866 (776) 47 (422) 29,794 42,063 10,639 52,702

consolidated cash flow statement

for the six months ended 30 June 2015

 6 months  6 months  Year
 ended  ended  ended
 30 June  30 June  31 December
2015 2014  2014
(unaudited) (unaudited) (audited)
Restated
£’000 £’000 £’000
Operating activities
Operating profit                  – continuing operations 1,778 498 2,292
                                – discontinued operations 316 250
Depreciation and amortisation 722 1,352 2,732
Profit on disposal of non–current assets (43)
Share based payment expense 11 39 65
Change in inventories 275 561 (4)
Change in receivables (1,821) 292 2,922
Change in payables 54 (3,319) (5,253)
Change in provisions 4
Cash generated from/(utilised by) operations 1,019 (257) 2,961
Interest received 124 69 97
Interest paid (220) (117) (403)
Income tax paid (4) (26)
Cash inflows/(outflows) from operating activities 923 (309) 2,629
Investing activities
Repayment of loans held to maturity 94 300
Acquisition of investment properties, mining reserves, plant and equipment (1,225) (774) (2,601)
Sale of plant and equipment – continuing operations 58
Sale of investment properties – discontinued operations 102,660 102,663
Interest received                          – continuing operations 8 11 24
Interest received                          – discontinued operations 7 7
Distribution received from joint ventures 176
Cash (outflows)/ inflows from investing activities (947) 101,904 100,451
Financing activities
Purchase of treasury shares (51) (88) (88)
Sale of treasury shares 226 228 229
Interest paid                             – continuing operations (1,945) (2,992) (4,387)
                                             – discontinued operations (623) (623)
Interest on obligation under finance leases     – continuing operations (99) (155) (292)
                                  – discontinued operations (544) (544)
Debenture stock break costs paid (158)
Interest derivatives paid – continuing operations (430)
Interest derivatives break costs paid – continuing operations (10,686) (10,686)
Interest derivatives break costs paid – discontinued operations (14,599) (14,599)
Payment of bank loan – Bisichi Mining PLC 5,902
Repayment of bank loan – Bisichi Mining PLC (111) (120) (5,000)
Payment of bank loan – continuing operations 45,002
Repayment of bank loan – continuing operations (133) (4,216) (44,452)
Repayment of bank loan – discontinued operations (70,000) (70,000)
Repayment of debenture stocks (1,250)
Equity dividends paid (133) (106) (106)
Equity dividends paid – non–controlling interests (63) (65) (250)
Net proceeds from issue of ordinary shares – non–controlling interests 13
Cash outflows from financing activities (3,717) (103,966) (100,311)

consolidated cash flow statement – continued

for the six months ended 30 June 2015

 6 months  6 months  Year
 ended  ended  ended
 30 June  30 June  31 December
2015 2014  2014
(unaudited) (unaudited) (audited)
Restated
£’000 £’000 £’000
Net (decrease)/increase in cash and cash equivalents (3,741) (2,371) 2,769
Cash and cash equivalents at beginning of period 7,118 4,299 4,299
Exchange adjustment 95 96 50
Cash and cash equivalents at end of period 3,472 2,024 7,118
The cash flows above relate to continuing and discontinued operations.
Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise the following balance sheet amounts:
Cash and cash equivalents (before bank overdrafts) 6,579 5,219 9,237
Bank overdrafts (3,107) (3,195) (2,119)
Cash and cash equivalents at end of period 3,472 2,024 7,118

notes to the half year results
for the six months ended 30 June 2015

1.     International Accounting Standards (IAS/IFRS)

The financial statements are prepared in accordance with International Financial Reporting Standards and Interpretations in force at the reporting date. These are prepared under the historic cost basis as modified by the revaluation of investment properties and held for trading investments. The application of the following International Financial Reporting Standards effective January 1, 2014, resulted in changes to London & Associated Properties PLC accounting methods and presentation in 2014:

IFRS 10 – Consolidated Financial Statements

IFRS 10 contains a new, comprehensive definition of control.  The new standard replaces the provisions of IAS 27 – Separate Financial Statements (previously “Consolidated and Separate Financial Statements”), which regulates the preparation of consolidated financial statement, as well as SIC 12 Consolidation – Special Purpose Entities.  According to both IAS 27 and IFRS 10, a Group consists of a parent entity and the subsidiaries controlled by the parent.  IFRS 10 provides a new definition of control compared with IAS 27.  This is applied in determining the companies to be consolidated.  “Control” assumes the simultaneous fulfilment of the following three criteria:

The parent company holds decision–making power over the relevant activities of the investee,

The parent company has rights to variable returns from the investee, and

The parent company can use its decision–making power to affect the variable returns.

The introduction of this standard has required a change in accounting policy as follows:

Under IFRS 10, as explained above, it is necessary to consolidate Bisichi from the earliest date at which it is believed by the Board that, under current rules, Bisichi would have been deemed to be controlled by LAP. Having determined the date at which “control” under current IFRS rules occurred, it is necessary to calculate the amount of any goodwill or premium arising on consolidation at that date. Any goodwill or surplus arising at the date of deemed control would have been depreciated over 10 years.  Based on the distribution of all shareholdings in Bisichi the directors have concluded that, with effect from late 1976, Bisichi was under the voting control of LAP and related parties.  Our review of fair values at that date suggests that no material goodwill or reserve would have been created.  However, even if it had been created any such goodwill or reserve would have been written off completely some years ago.  In these circumstances no adjustments are required to the book values of Bisichi assets and liabilities.

As a result of treating Bisichi as a “subsidiary” Dragon also becomes a subsidiary for accounting purposes as each of LAP and Bisichi own 50%of that joint venture business.

The quantitative impact of the changes is set out below:

The Group has taken advantage of the transitional provisions of Consolidated Financial Statements, Joint Arrangements and Disclosure of interests in Other Entities: Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12) and the tables below show the restated consolidated balance sheet at 30 June 2014.

notes to the half year results – continued

Consolidated balance sheet at 30 June 2014

As previously reported Impact of IFRS 10 As restated
£’000 £’000 £’000
Non–current assets
Market value of properties attributable to Group 87,449 14,686 102,135
Present value of head leases 4,593 195 4,788
Property 92,042 14,881 106,923
Mining reserves, plant and equipment 197 6,218 6,415
Investments in joint ventures 2,897 (11) 2,886
Investments in associated company 6,681 (6,681)
Loan to joint venture 984 984
Held to maturity investments 2,200 2,200
Other investments 164 164
Deferred tax 6,249 6,249
110,266 15,555 125,821
Current assets
Inventories 1,129 1,129
Trade and other receivables 4,184 6,597 10,781
Corporation tax recoverable 33 33
Available for sale investments 826 826
Investments held for trading 24 109 133
Cash and cash equivalents 3,939 1,280 5,219
8,147 9,974 18,121
Total assets 118,413 25,529 143,942
Current liabilities
Trade and other payables (10,357) (2,763) (13,120)
Borrowings (40,464) (10,073) (50,537)
Current tax liabilities (10) (10)
(50,821) (12,846) (63,667)
Non–current liabilities
Borrowings (14,863) (49) (14,912)
Present value of head leases on properties (4,593) (195) (4,788)
Provisions (878) (878)
Deferred tax liabilities (1,906) (1,906)
(19,456) (3,028) (22,484)
Total liabilities (70,277) (15,874) (86,151)
Net assets 48,136 9,655 57,791
Equity attributable to the owners of the parent
Share capital 8,554 8,554
Share premium account 4,866 4,866
Translation reserve in associate (708) (708)
Capital redemption reserve 47 47
                Retained earnings (excluding treasury shares) 36,262 36,262
                Treasury shares (885) (885)
Retained earnings 35,377 35,377
Total equity attributable to equity shareholders 48,136 48,136
Non – controlling interest 9,655 9,655
Total equity 48,136 9,655 57,791

notes to the half year results – continued

Consolidated income statement for the period ended 30 June 2014

As previously reported Impact of IFRS 10 As restated
Group revenue 3,745 12,262 16,007
Operating costs (2,722) (12,792) (15,514)
Income from listed investments held for trading 1 2 3
Operating profit 1,024 (528) 496
Finance income 31 88 119
Finance expenses (2,389) (136) (2,525)
Interest rate derivative break cost (1,117) (1,117)
Result before valuation movements and exchange movements (2,451) (576) (3,027)
Non–cash changes in valuation of assets and liabilities
Gains on held for trading investments 1 3 4
Decrease in value of other investments (1) (1)
Share of loss of associate, net of tax (95) 95
Share of profit of joint ventures, net of tax 289 286 575
Result including revaluation and other movement (2,256) (193) (2,449)
Attributable to discontinued operations 69 69
Loss for the period before taxation (2,187) (193) (2,380)
Income tax 589 159 748
Loss for the period (1,598) (34) (1,632)
Attributable to:
Equity holders of the Company (1,598) (1,598)
Non–controlling interest (34) (34)
Loss for the period (1,598) (34) (1,632)

Consolidated statement of comprehensive income for the period ended 30 June 2014

As previously reported Impact of IFRS 10 As restated
£’000 £’000
Loss for the period (1,598) (34) (1,632)
Other comprehensive income:
Items that may be subsequently recycled to the income statement:
Exchange differences on translation of foreign operations (50) (85) (135)
Total comprehensive loss for the period net of tax (1,648) (119) (1,767)
Attributable to:
Equity shareholders (1,648) (1,648)
Non–controlling interest (119) (119)
(1,648) (119) (1,767)

notes to the half year results – continued

2. Segmental analysis  6 months  6 months  Year
 ended  ended  ended
30 June 30 June  31 December
2015 2014 2014
(unaudited) (unaudited) (audited)
Restated
 £’000  £’000  £’000
Revenue
LAP
– Rental Income 3,027 3,086 6,000
– Management income from third parties 329 569 880
Bisichi
– Rental Income 488 474 930
– Mining 13,392 11,788 25,536
Dragon
– Rental Income 99 90 180
17,335 16,007 33,526
Operating profit/ (loss)
LAP 1,251 933 763
Bisichi 477 (496) 1,447
Dragon 69 59 82
1,797 496 2,292
(Loss)/ profit before taxation
LAP (554) (2,113) (4,166)
Bisichi 389 (308) 1,427
Dragon 34 41 46
(131) (2,380) (2,693)
3. Finance costs  6 months  6 months  Year
 ended  ended  ended
30 June 30 June  31 December
2015 2014 2014
(unaudited) (unaudited) (audited)
Restated
 £’000  £’000  £’000
Finance income 63 119 115
Finance expenses:
Interest on bank loans and overdrafts (1,075) (1,064) (2,366)
Other loans (748) (796) (1,508)
Unwinding of discount (Bisichi Mining PLC) (42) (87)
Interest on derivatives (148) (510) (655)
Interest on obligations under finance leases (150) (155) (259)
Total finance expenses (2,163) (2,525) (4,875)
(2,100) (2,406) (4,760)
notes to the half year results – continued
4. Income tax  6 months  6 months  Year
 ended  ended  ended
30 June 30 June  31 December
2015 2014 2014
(unaudited) (unaudited) (audited)
Restated
 £’000  £’000  £’000
Current tax 2 (757) 46
Deferred tax 103 9 3,656
105 (748) 3,702

 

5. Earnings per share 6 months  6 months  Year
 ended  ended  ended
30 June 30 June  31 December
2015 2014 2014
(unaudited) (unaudited) (audited)
Restated
 Group loss after tax (£’000) (443) (1,598) (7,140)
 Weighted average number of shares in issue for the period (‘000) 85,004 84,494 84,500
 Basic earnings per share (0.52)p (1.89)p (8.45)p
 Diluted number of shares in issue (‘000) 85,004 84,494 84,500
 Fully diluted earnings per share (0.52)p (1.89)p (8.45)p

6. Property

Properties at 30 June 2015 are included at valuation as at 31 December 2014, plus additions in the period.

During the six months ended 30 June 2015 the group had property additions of £0.045m (30 June 2014: £Nil, 31 December 2014:  £0.7 million).

No properties were sold during the six months ended 30 June 2015 (carrying value of properties sold at 30 June 2014: £Nil, 31 December 2014: £Nil).

The sale of the discontinued asset of Windsor Shopping Centre in 2014 was for £104.7 million.

7. Interest rate derivatives

At 30 June 2015 the fair value liability was £515,000 as valued by the hedge provider (30 June 2014: £nil, 31 December 2014: £656,000)

Under IFRS 13 the hedges are not deemed to be eligible for hedge accounting and any movement in the value of the hedge is charged directly to the consolidated income statement.

notes to the half year results – continued

8. Net assets per share 30 June 30 June  31 December
2015 2014 2014
(unaudited) (unaudited) (audited)
Restated
Shares in issue (‘000) 84,975 84,508 84,510
Net assets per balance sheet (£’000) 42,063 48,136 42,547
Basic net assets per share 49.5p 56.96p 50.35p
Shares in issue diluted by outstanding share options (‘000) 84,975 84,528 84,510
Net assets after issue of share options (£’000) 42,063 48,146 42,547
Fully diluted net assets per share 49.5p 56.96p 50.35p

9. Related party transactions

The related parties and the nature of costs recharged are as disclosed in the group’s annual financial statements for the year ended 31 December 2014.

In the six months to 30 June 2015, the group was repaid £208,250 of the unsecured loan by Langney Shopping Centre Unit Trust (a joint venture), leaving a loan balance of £127,000 due.

10. Capital and other commitments

The group has capital commitments of £Nil as at 30 June 2015 (30 June 2014: £Nil, 31 December 2014: £Nil).

11. Dividends

There is no interim dividend payable for the period (30 June 2014: Nil).

The final dividend in respect of 2014 of 0.156p per share, amounting to £133,000, was paid on 3 July 2015.  As the 2014 final dividend was approved by the shareholders at the Annual General Meeting held on 24 June 2015, it is included as a liability in these interim financial statements.

12. Risks and uncertainties

The group’s principal risks and uncertainties are reported on pages 17 and 18 in the 2014 Annual Report.  They have been reviewed by the Directors and remain unchanged for the current period.

The largest area of estimation and uncertainty in the interim financial statements is in respect of the valuation of investment properties (which are not revalued at the half year) and the valuation of interest rate derivatives. For Bisichi Mining PLC, it also relates to coal mining activities in South Africa and currency movements.

notes to the half year results – continued

13. Financial information

The above financial information does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.  The figures for the year ended 31 December 2014 are based upon the latest statutory accounts, which have been delivered to the Registrar of Companies; the report of the auditor on those accounts was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.

As required by the Disclosure and Transparency Rules of the UK’s Financial Services Authority, the interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and in accordance with both IAS 34 ‘Interim Financial Reporting’ as adopted by the European Union and the disclosure requirements of the Listing Rules.

The half year results have not been audited or subject to review by the company’s auditor.

The annual financial statements of London & Associated Properties PLC are prepared in accordance with IFRS as adopted by the European Union.  The same accounting policies are used for the six months ended 30 June 2015 as were used for the year ended 31 December 2014.

As stated in the 2014 Annual Report in the group accounting policies on page 49, Bisichi Mining PLC and Dragon Retail Properties Limited are now consolidated with LAP, following the application of IFRS 10.  Accordingly the 30 June 2014 figures are restated as per note 1 and the net impact is that the earnings per share and the net assets per share remained unchanged.

The assessment of new standards, amendments and interpretations issued but not effective, is that these are not anticipated to have a material impact on the financial statements.

There is no material seasonal impact on the group’s financial performance.

Taxes on income in the interim periods are accrued using tax rates expected to be applicable to total annual earnings.

The interim financial statements have been prepared on the going concern basis as the Directors are satisfied the group has adequate resources to continue in operational existence for the foreseeable future.

14. Board approval

The half year results were approved by the Board of London & Associated Properties PLC on 27 August 2015.

directors’ responsibility statement

The Directors confirm that to the best of their knowledge:

(a) the condensed set of financial statements have been prepared in accordance with applicable accounting standards and IAS 34 Interim Financial Reporting as adopted by the EU;

(b) the interim management report includes a fair review of the information required by:

(1) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements ; and a description of the principal risks and uncertainties for the remaining six months of the year;  and

(2) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

Signed on behalf of the Board on 27 August 2015

Sir Michael Heller                Anil Thapar
Director                                 Director
directors and advisors

Directors
Executive directors
* Sir Michael Heller
MA FCA (Chairman)
John A Heller LLB MBA (Chief Executive)
Anil K Thapar FCCA (Finance Director)

Non-executive directors
† Howard D Goldring
BSC (ECON) ACA
#†Clive A Parritt  FCA CF FIIA
Robin Priest

* Member of the nomination committee
# Senior independent director
† Member of the audit, remuneration and nomination
committees.

Secretary & registered office
Anil K Thapar
FCCA
24 Bruton Place,
London W1J 6NE

Registrars & transfer office
Capita Asset Services
Shareholder Services
The Registry, 34 Beckenham Road
Beckenham, Kent  BR3 4TU

Telephone 0871 664 0300
(Calls cost 10p per minute + network extras, lines are open Mon-Fri 9.00am to 5.30pm)

or +44 (0)203 728 5000 for overseas callers

Website: www.capitaregistrars.com
E-mail: shareholderenquiries@capita.co.uk

Company registration number
341829 (England and Wales)

Website
www.lap.co.uk

E-mail
admin@lap.co.uk