Wynnstay Properties PLC
Annual Report and Financial Statements
for the year ended 25 March 2016
WYNNSTAY PROPERTIES PLC
CHAIRMAN’S STATEMENT
REPORT OF THE DIRECTORS
and
FINANCIAL STATEMENTS
YEAR ENDED 25TH MARCH 2016
CONTENTS
Directors and Advisers
Summary of Property Portfolio
Chairman’s Statement
Report of the Directors
Strategic Report
Report of the Auditors
Primary Statements
Notes to the Financial Statements
Five Year Financial Review
Notice of Annual General Meeting
Biographies of the Directors
2
3
4
7
11
12
13
17
34
35
36
– 1 –
WYNNSTAY PROPERTIES PLC
(Company incorporated in the United Kingdom)
directors
P.G.H. COLLINS CBE
(Non-Executive Chairman)
C.P. WILLIAMS, B.Sc., M.B.A., M.R.I.C.S.
(Managing Director)
C.H. DELEVINGNE
(Non-Executive Director)
T.J. NAGLE, B.Th., F.R.I.C.S.
(Non-Executive Director)
T. J. C. PARKER A.C.A.
(Finance Director & Secretary)
registered office
150 Aldersgate Street, London EC1A 4AB
auditors
MOORE STEPHENS LLP
150 Aldersgate Street, London EC1A 4AB
solicitors
FIELDFISHER LLP
Riverbank House, 2 Swan Lane, London EC4R 3TT
nominated adviser & broker
PANMURE GORDON & CO
One New Change, London EC4M 9AF
valuers
BNP PARIBAS REAL ESTATE ADVISORY &
PROPERTY MANAGEMENT UK LIMITED
5 Aldermanbury Square, London EC2V 7BP
registrars
CAPITA ASSET SERVICES
The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU
bankers
C. HOARE & CO.
37 Fleet Street, London EC4P 4DQ
SVENSKA HANDELSBANKEN SA
5 Welbeck Street, London W1G 9YQ
– 2 –
WYNNSTAY PROPERTIES PLC
SUMMARY OF PROPERTY PORTFOLIO
AT 25TH MARCH 2016
Eastern Road
1 Industrial Unit
Quarry Wood Industrial Estate
18 Industrial Units
Crockford Lane
3 Industrial Units
Oakcroft Business Park
3 Industrial Units/Offices
Short Wyre Street
2 Retail Units
High Street
High Street
Offices
1 Retail Unit
Crown Close Industrial Estate
7 Industrial Units
Station Road
5 Industrial Units
Hertingfordbury Road
1 Industrial Unit
Trinity Street
Brooks Road
5 Industrial Units
2 Retail Units
Beaver Industrial Estate
17 Industrial Units
North Street
1 Retail Unit
City Trading Estate
6 Industrial Units
Huntingdon Road
6 Industrial Units
High Street
St James’ Street
Bell Lane
1 Retail Unit
Offices
4 Industrial Units
Aldershot
Aylesford
Basingstoke
Chessington
Colchester
Cosham
Gosport
Hailsham
Heathfield
Hertford
Ipswich
Lewes
Liphook
Midhurst
Norwich
St. Neots
Shirley
Surbiton
Uckfield
Weston-super-Mare
Phillips Road
1 Retail Unit
All the above properties are Freehold.
– 3 –
WYNNSTAY PROPERTIES PLC
CHAIRMAN’S STATEMENT
I am pleased to be able to report to you on another successful year in the long life of Wynnstay, a year in which there have been
some very significant developments to which I refer below.
Overview of financial performance
Wynnstay’s financial performance for the year may be summarised as follows:
• Property income
• Profit before gain on sale and movement
in fair value of properties and taxation
• Earnings per share
• Dividends per share, paid and proposed
• Net asset value per share
• Net gearing
Change
2016
2015
6.9 %
£1,778,000
£1,663,000
(-2.3%)
£878,000
£899,000
15.6p
+7.3%
+10.1%
66.2p
13.2p
584p
54.2%
81.8p
12.3p
531p
45.7%
Property income for the year, at just under £1.8 million, was significantly higher than last year. This increase reflects the
income for most of the year from the acquisition of the Beaver Industrial Estate at Liphook in June 2015 which more than
made up for the loss of income from the vacant business units at Chessington during their refurbishment and marketing. Profit
before fair value movement and taxation for the year, at just over £1,000,000 was higher than in the prior year, largely due to
the increase in rental income from Liphook and the profit on the Colchester property disposal mentioned below.
Our annual property revaluation delivered an increase over the value for the prior year and the resulting surplus of £946,000
has contributed to an increase of over 9.7% in net asset value per share.
Property Management and Portfolio
Wynnstay currently has a geographically dispersed portfolio focussed in various towns in the South and East of England with
80 tenants occupying almost 90 separate properties in 20 locations. At the end of the financial year, the portfolio was virtually
fully-let, with just two vacant units at Liphook.
We continue to liaise closely with our tenants and as a consequence have experienced considerable tenant loyalty with many
tenants having been in occupation for years, respecting the terms of their leases and looking after the properties that they
occupy. In return, they know that their dealings with us will be straightforward and fair. Building on these strong, constructive
relationships, means that we have generally maintained high levels of occupancy. In addition, we can react flexibly and
commercially to tenants’ changing needs, as we have done at Aylesford and Chessington in the ways described below.
During the year we have negotiated new leases, lease extensions or lease variations on 9 units at Aylesford, Colchester,
Lewes and St Neots with combined annual rentals of £247,000. In addition, we have concluded 5 lettings at Aylesford and
Chessington with combined annual rentals of £165,000.
As I reported previously our main focus over the past year has been on the Quarry Wood Industrial Estate in Aylesford, on the
refurbishment and reletting of the business units at the Oakcroft Business Centre at Chessington and on the integration of the
Beaver Industrial Estate at Liphook into the portfolio.
At Aylesford, I reported at the half-year on the successful completion of negotiations with a number of tenants with a view
to facilitating moves within the estate to accommodate their requirements. This resulted in the largest tenant renewing the
lease for its main premises, comprising four units, for another five years whilst a unit they had taken on a temporary basis was
surrendered and relet to a new tenant at an increased rental. With the reletting of that unit and other units to existing or new
tenants the Aylesford estate is now fully let and we have the benefit of an increased rental income stream for a longer period.
We also spent a considerable time during the year exploring the possibility of expanding the estate at Aylesford by adding a
number of units on vacant land within the site as well as improving the traffic flow within the site and increasing security for
the benefit of tenants and neighbours. In March 2016 we obtained planning permission for five additional units of varying
sizes, and designed to be flexible so being either self-contained or capable of amalgamation with existing adjoining units.
This scheme would provide an additional 22% of lettable space on the estate as well as creating new car and goods vehicle
spaces. Having secured the planning consent we are now well placed to respond positively to existing tenants’ future space
requirements as well as with enquiries from new potential tenants. However, we do not envisage developing these units
speculatively at this stage.
– 4 –
WYNNSTAY PROPERTIES PLC
CHAIRMAN’S STATEMENT (continued)
At the Oakcroft Business centre in Chessington, as previously reported, two of the three units were vacated by the tenant on the
expiry of the leases at the end of our last financial year following the disposal of a part of the tenant’s business. We negotiated
a satisfactory cash settlement with them regarding dilapidations and then carried out an extensive refurbishment funded by
the settlement monies received. The works were completed by our contractors on programme and within budget at the end of
September.
I am delighted to report that shortly after the refurbishment was finished, we successfully completed the letting of the two
vacant units to the existing tenant of the third unit at the Business Centre for new five-year leases on each unit, subject to a
single tenant break (with compensation payable to us if exercised), as well as the extension of the lease of their present unit.
We will receive increased rents over those previously paid and the leases will all be held by the property holding subsidiary of
the large French defence and electronics company which acquired the present tenant some years ago. Hence, we have secured
occupation of all three units, at higher rents and with an enhanced tenant covenant. The financial benefit of the new terms will
begin to flow through in the present year.
I reported on the detail of the acquisition at Liphook at the half-year and that we had let one of the three vacant units. Whilst
there has been some interest, the other two units remained vacant at the year-end. Indeed, they are the only vacancies in the
portfolio at the time of writing.
Shortly before the year-end we completed the sale of two of our four retail units in Colchester to a single owner-occupier
purchaser for £370,000.
I am pleased to report that contracts to purchase four adjoining trade counter and industrial units in Lichfield have recently
been exchanged, with completion in the near future. The acquisition price of £1.95million will be funded from our own cash
resources together with a new additional facility of £1.34million from our bankers. Further details will be provided with the
interim results in November and in our accounts for the year, in due course.
Portfolio Valuation
As at 25 March 2016, our Independent Valuers, BNP Paribas Real Estate, have undertaken the annual revaluation of the
company’s portfolio at £25,230,000 representing, as already mentioned, a revaluation surplus of £946,000. The Board
considers this to be an excellent outcome reflecting the improved lease profile and enhanced covenants within the portfolio.
Following the revaluation and the sale at Colchester, as at the year-end, the industrial sector within the portfolio accounted for
64% by value, with the retail and office elements comprising 20% and 16% respectively.
Borrowings and Gearing
Total borrowings at the year-end were just under £10 million (2015 - £7.6 million) and net gearing at the year-end was 54.2%
compared to 45.7% last year. The increased borrowings reflect the drawdown under our existing facility used to purchase the
Beaver Industrial Estate at Liphook.
We continue to benefit from interest rates remaining at an historic low level and for a much longer period than most experts
have predicted. Whilst the position may change, and could always change quite quickly, it still seems that experts consider that
any increases in rates are still some way off and will be in relatively small steps. Moreover, it remains the case that rates are
currently not forecast in the medium term to return to the levels prevailing in the pre-financial crisis period.
Costs
Our property costs in this year were higher than in the prior year as we invested in some improvements jointly with tenants,
which are generally reflected in better lease terms and increased rents. These costs remain under strict control, as do our
administrative costs, which were also somewhat higher due to the professional valuation and legal fees resulting from
transactions during the year.
Dividend
In the light of the satisfactory results for the year, the Board is recommending a total dividend for the year of 13.2p per share
(2015 – 12.3p). An increased interim dividend of 5.0p per share (2015 – 4.5p) was paid in December 2015. Accordingly,
subject to approval of Shareholders at the Annual General Meeting, a final dividend of 8.2p per share (2015 – 7.8p) will be
paid on 22nd July 2016 to Shareholders on the register on 24th June 2016.
The increase in dividends this year should not be taken as any indication of further increases in the current year as this will
depend on performance during the year, including our ability to maintain high levels of occupancy as well as to find suitable
additions to the portfolio.
– 5 –
WYNNSTAY PROPERTIES PLC
CHAIRMAN’S STATEMENT (continued)
Outlook
The greatly improved economic conditions and prospects in the UK that appeared at about the time of, and following, the
general election now seem to have been tempered by a number of significant uncertainties arising from different directions
– political, security and budgetary – as well as from international trade and the global economy. Despite these uncertainties,
published figures show continued U.K. economic growth and rising employment and healthy consumer spending.
We are encouraged by the progress that Wynnstay has made over the past few years and will continue to explore opportunities
to grow both the income and the capital value of the portfolio, including by further acquisition.
Our Management Team
Our two executive directors – Paul Williams, our Managing Director who during the year completed 10 years service with
Wynnstay, and Toby Parker, our Finance Director – are responsible for the day-to-day management of Wynnstay and they
carry out their functions with great skill and using their considerable experience and knowledge of both the portfolio and the
commercial property world. In the light of the performance of the Company over the recent years, the non-executive Directors
decided to award them each a bonus in the form of a contribution to their pension schemes. The bonus in the case of Paul is
£30,000 and in the case of Toby is £5,000. The bonuses are reflected in the accounts for the last year.
For the present and future years, we are establishing a more structured performance-related bonus scheme. We also propose to
introduce a straightforward HMRC-approved Share Incentive Plan which will enable the management team, if they wish, to
acquire a small number of additional shares in Wynnstay, thus participating in future growth, in a tax-efficient manner.
Colleagues and Advisers
The two executive directors and I, as your Chairman, also benefit from the extensive knowledge and experience in commercial
property of our two non-executive directors – Charles Delevingne and Terence Nagle. I would like to thank all four of them, as
well as our advisers, for their contributions over the past year.
Unsolicited approaches to Shareholders
Advances in communications and technology bring great benefits. But they also provide opportunities for unscrupulous
criminals to seek access to personal information in order to steal an individual’s financial assets. There have been several recent
cases reported in the press. One form of this fraud is unsolicited telephone approaches to shareholders about their investments
in which the caller mentions individual holdings, such as Wynnstay Properties. There is nothing that we can do to deter or stop
these approaches and I would urge all shareholders to be vigilant. On Wynnstay’s website (www.wynnstayproperties.co.uk),
shareholders will also find a warning and a link to other information about unsolicited approaches regarding shares on the
Financial Conduct Authority’s website (www.fca.org.uk/consumers/ scams).
Annual General Meeting
Our Annual General Meeting will be held at the Royal Automobile Club on Wednesday 13th July 2016. As always, I urge
Shareholders to come to London for this event so that they can meet the Board and other Shareholders informally to discuss the
Company’s affairs as well as to take part in the formal annual meeting.
Philip G.H. Collins
Chairman
13 June 2016
– 6 –
WYNNSTAY PROPERTIES PLC
REPORT OF THE DIRECTORS 2016
The Directors present their One Hundred and Thirtieth Annual Report, together with the audited Financial
Statements of the Company for the year ended 25th March 2016.
Please refer to the Strategic Report on page 11 for the activities and the likely future developments of the
Company and a discussion of the risks and uncertainties. Please refer to note 18 of the financial statements for
further disclosure of the financial risks.
Profit for the Year
The profit for the year after taxation amounted to £1,796,000 (2015: £2,219,000). Details of movements in
reserves are set out in the statement of changes in equity on page 16.
Events Since the End of the Year
In early June the Company exchanged contracts to purchase four adjoining trade counter and industrial units in
Lichfield, with completion due in the near future. The acquisition price of £1.95million will be funded from an
additional facility of £1.34million from our bankers and our own cash resources.
Dividends
The Directors have decided to recommend a final dividend of 8.2 pence per share for the year ended 25th March
2016 payable on 22nd July 2016 to those shareholders on the register on 24th June 2016. This dividend, together
with the interim dividend of 5.0 pence paid on 10th December 2015, represents a total for the year of 13.2 pence
(2015 – 12.3 pence).
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors’ Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law
the Directors have elected to prepare the financial statements in accordance with IFRS as adopted by the
European Union and applicable law. The financial statements must, in accordance with IFRS as adopted by
the European Union, present fairly the financial position and performance of the Company; such references
in the UK Companies Act 2006 to such financial statements giving a true and fair view are references to their
achieving a fair presentation. Under Company law Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view. In preparing these financial statements, the Directors are
required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether the financial statements have been prepared in accordance with IFRS as adopted by the
European Union;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of the financial statements may differ from legislation in other jurisdictions.
– 7 –
WYNNSTAY PROPERTIES PLC
REPORT OF THE DIRECTORS 2016 (continued)
Directors
The Directors holding office during the financial year under review and their beneficial and non-beneficial
interests in the ordinary share capital of the Company at 25th March 2016 and 25th March 2015 are shown below:
Ordinary Shares of 25p
25.3.15
25.3.16
P.G.H. Collins
C.P. Williams
C.H. Delevingne
T.J. Nagle
T.J.C. Parker
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Finance Director and Secretary
850,836
9,412
5,000
13,000
15,250
850,836
9,412
5,000
13,000
9,250
The interests shown above in respect of Mr. P.G.H. Collins include non-beneficial interests of 217,983 shares at
25th March 2016 and 2015.
Mr. C.P. Williams and Mr T.J.C. Parker each have a service agreement with the Company. Under the respective
terms thereof, their employment is subject to six months’ notice of termination by either party.
In accordance with the Company’s Articles of Association, Mr. T.J.C. Parker retires by rotation and, being
eligible, offers himself for re-election.
Brief biographies of each of the Directors appear on page 36.
Directors’ Emoluments
Directors’ emoluments for the year ended 25th March 2016 are set out below:-
P.G.H. Collins
C.P. Williams
C.H. Delevingne
T.J. Nagle
T.J.C.Parker
Total 2016
Total 2015
Salaries
–
109,867
–
–
–
Fees
33,528
11,994
11,994
11,994
11,994
Pension
–
40,987
–
–
5,000
Benefits
–
3,081
–
–
–
Total
2016
33,528
165,929
11,994
11,994
16,994
Total
2015
32,551
131,774
11,645
11,645
11,645
£109,867
£81,504
£45,987
£3,081
£240,439
£106,667
£79,131
£10,667
£2,795
£199,260
The Company has made ex gratia payments into the respective pension schemes of the two executive
members of the board to reflect their endeavours over recent years.
A company owned and controlled by Mr T.J.C. Parker, was paid a fee of £41,617 (2015: £40,404) for services
rendered during the year (see note 20).
Directors’ and Officers’ Liability Insurance
The Company has maintained Directors’ and Officers’ insurance as permitted by the Companies Act 2006.
8– 8 –
WYNNSTAY PROPERTIES PLC
REPORT OF THE DIRECTORS 2016 (continued)
Substantial Interests
As at 9th June 2016, the Directors have been notified or are aware of the following interests, which are in
excess of three per cent of the issued ordinary share capital of the Company:
No. of Ordinary
Shares of 25p
Percentage of
Issued Share
Capital 2016
Percentage of
Issued Share
Capital 2015
Mr P.G.H. Collins
850,836
Mr D. Gibson
94,878
Mr G. Gibson
239,192
31.38%
3.5%
8.82%
31.38%
2.51%
8.82%
Corporate Governance
The Board of Directors is accountable to Shareholders for the good corporate governance of the Company
under the AIM rules for companies. The Company is not required to comply and therefore does not comply
with the UK Corporate Governance Code which has been in force since 29 June 2010. However, the Board
is aware of the best practice defined by the Code and has adopted procedures to the extent considered
appropriate.
• The Company is headed by an effective Board of Directors.
• There is a clear division of responsibilities in running the Board and running the Company’s business.
• The Board currently comprises two executive and three non-executive Directors. The Chairman is a non-
executive member of the Board. In view of the size of the Company there is no formal procedure for the
appointment of new Directors.
• The Board receives and reviews on a regular basis financial and operating information appropriate to the
Directors being able to discharge their duties. An annual budget is approved by the Board and a revised forecast
is prepared at the half year stage. Cash flow and other financial performance indicators are monitored monthly
against budget.
• Directors submit themselves for re-election every three years by rotation in accordance with the Articles of
Association.
• The Board welcomes communication from the Company’s Shareholders and positively encourages their
attendance at the Annual General Meeting.
• In view of the current size of the Company and its Board the establishment of an audit committee or an internal
audit department would be inappropriate. However, the auditors have direct access to the non-executive
Chairman.
Remuneration Committee
The Board currently acts as the remuneration committee, with the non-executive Directors determining the
remuneration of the executive Directors, and the details of the Directors’ emoluments being set out on page
8 of this report. It is the Company’s policy that the remuneration of Directors should be commensurate with
services provided by them to the Company.
Going Concern
The Directors have a reasonable expectation that the Company has adequate resources to continue in existence
for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the
financial statements.
8
– 9 –
WYNNSTAY PROPERTIES PLC
REPORT OF THE DIRECTORS 2016 (continued)
Internal Control
The Directors are responsible for the Company’s system of internal financial control, which is designed
to provide reasonable, but not absolute, assurance against material misstatement or loss. In fulfilling these
responsibilities, the Board has reviewed the effectiveness of the system of internal financial control. The
Directors have established procedures for planning and budgeting and for monitoring, on a regular basis, the
performance of the Company.
Statement as to Disclosure of Information to Auditors
Each of the persons who are Directors at the time when this report is approved has confirmed that:
• so far as each Director is aware, there is no relevant audit information of which the Company’s auditors are
unaware; and
• each Director has taken all the steps that ought to have been taken as a Director, including making
appropriate enquiries of fellow Directors and the Company’s auditors for that purpose, in order to be aware
of any information needed by the Company’s auditors in connection with preparing their report and to
establish that the Company’s auditors are aware of that information.
Annual General Meeting
The Notice of the Annual General Meeting, to be held on Wednesday 13th July 2016, is set out on page 35.
By Order of the Board,
T.J.C. Parker
Secretary
13 June 2016
– 10 –
WYNNSTAY PROPERTIES PLC
STRATEGIC REPORT 2016
The Directors present their Strategic Report for the year ended 25th March 2016.
Principal Activity
The principal activity of the Company during the year continued to be that of Property Owners, Developers
and Managers.
Business Review, Performance Indicators and Risks
A review of the business for the year and of the future prospects of the Company is included in the
Chairman’s Statement on pages 4 to 6. The financial statements and notes are set out on pages 13 to 31.
The key performance indicators for the Company are those relating to the underlying movement in both rental
income and in the value of its property investments as set out below:
• Increase in rental income: 6.9% (2015: increase of 3.4%).
• Increase in net asset value per share: 10.1% (2015: increase of 15.2%).
The Directors will continue to search for profitable investment opportunities, and make changes to enhance
the value of the portfolio as and when such opportunities arise.
The principal risks and uncertainties are those associated with the commercial property market, which is
cyclical by its nature and include changes in the supply and demand for space as well as the inherent risk
of tenant failure. In the latter case, the Company seeks to reduce this risk by requiring the payment of
rent deposits when considered appropriate. Other risk factors include changes in legislation in respect of
taxation and the obtaining of planning consents, etc. as well as those associated with financing and treasury
management. The Company’s risk management objectives can be found at note 18 of the financial statements.
This Strategic Report was approved by the Board and signed on its behalf by:
T.J.C. Parker
Director
13 June 2016
– 11 –
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF WYNNSTAY PROPERTIES PLC
We have audited the financial statements of Wynnstay Properties Plc for the year ended 25th March 2016 which
are set out on pages 13 to 33. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 7, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view. Our responsibility is to audit and express an opinion on the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s
website at www.frc.org.uk/auditscopeukprivate .
Opinion on financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the company’s affairs as at 25th March 2016 and of its profit for the
year then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report and the Strategic Report for the financial year for
which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
• the financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Joanne Allen, Senior Statutory Auditor
For and on behalf of Moore Stephens LLP, Statutory Auditor
150 Aldersgate Street
London EC1A 4AB
13 June 2016
– 12 –
– 13 –
STATEMENT OF COMPREHENSIVE INCOME FOR YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
Property Income
Property Costs
Administrative Costs
Movement in Fair Value of:
Investment Properties
Profit on Sale of Investment Property
Operating Income
Investment Income
Finance Costs
Income before Taxation
Taxation
Income after Taxation
Basic and diluted earnings per share
Notes
2
3
9
5
5
6
8
The company has no items of other comprehensive income.
2016
£’000
1,778
(122)
(462)
1,194
946
127
2,267
4
(320)
1,951
(155)
1,796
2015
£’000
1,663
(87)
(414)
1,162
1,530
–
2,692
2
(265)
2,429
(210)
2,219
66.2p
81.8p
– 13 –
– 13 –
WYNNSTAY PROPERTIES PLC
STATEMENT OF FINANCIAL POSITION 25TH MARCH 2016
2016
£’000
25,230
3
25,233
319
1,383
1,702
(941)
(180)
(1,121)
581
25,814
(9,972)
(3)
(9,975)
15,839
789
(1,570)
1,135
205
15,280
15,839
2015
£’000
21,780
3
21,783
489
1,050
1,539
(1,086)
(225)
(1,311)
228
22,011
(7,621)
–
(7,621)
14,390
789
(1,570)
1,135
205
13,831
14,390
Notes
9
12
13
14
15
16
17
Non Current Assets
Investment Properties
Investments
Current Assets
Accounts Receivable
Cash and Cash Equivalents
Current Liabilities
Accounts Payable
Income Taxes Payable
Net Current Assets
Total Assets Less Current Liabilities
Non-Current Liabilities
Bank Loans Payable
Deferred Tax Payable
Net Assets
Capital and Reserves
Share Capital
Treasury Shares
Share Premium Account
Capital Redemption Reserve
Retained Earnings
Approved by the Board and authorised for issue on 13 June 2016
P.G.H. Collins
Chairman
T.J.C. Parker
Finance Director
– 14 –
WYNNSTAY PROPERTIES PLC
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 25TH MARCH 2016
Cashflow from operating activities
Income before taxation
Adjusted for:
Amortisation of deferred finance costs
Increase in fair value of investment properties
Interest income
Interest expense
Profit on disposal of investment properties
Changes in:
Trade and other receivables
Trade and other payables
Cash generated from operations
Income taxes paid
Interest paid
2016
£’000
1,951
9
(946)
(4)
320
(127)
171
(146)
1,228
(197)
(320)
2015
£’000
2,429
–
(1,530)
(2)
265
–
(221)
210
1,151
(221)
(255)
Net cash from operating activities
711
675
Cashflow from investing activities
Interest and other income received
Purchase of investment properties
Sale of investment properties
4
(2,739)
362
2
(1,735)
–
Net cash from investing activities
(2,373)
(1,733)
Cashflow from financing activities
Dividends paid
Drawdown on bank loans
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
(347)
2,342
1,995
333
1,050
1,383
(328)
1,660
1,332
274
776
1,050
– 15 –
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 25th MARCH 2016
WYNNSTAY PROPERTIES PLC
YEAR ENDED 25th MARCH 2016
Share
Capital
£ 000
789
–
–
Capital
Redemption
Reserve
Share
Premium
Account
Treasury
Shares
Retained
Earnings
£ 000
£ 000
£ 000
£ 000
Total
£ 000
205
1,135
(1,570)
13,831
14,390
–
–
–
–
–
–
1,796
(347)
1,796
(347)
Balance at 26th March 2015
Total comprehensive
income for the year
Dividends – note 7
Balance at 25th March 2016
789
205
1,135
(1,570)
15,280
15,839
YEAR ENDED 25TH MARCH 2015
Share
Capital
£ 000
Capital
Redemption
Reserve
Share
Premium
Account
Treasury
Shares
Retained
Earnings
£ 000
£ 000
£ 000
£ 000
Total
£ 000
Balance at 26th March 2014
789
205
1,135
(1,570)
11,940
12,499
Total comprehensive
income for the year
Dividends – note 7
–
–
–
–
–
–
– 2,219
–
(328)
2,219
(328)
Balance at 25th March 2015
789
205
1,135
(1,570)
13,831
14,390
– 16 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
1.
BASIS OF PREPARATION, ACCOUNTING POLICIES AND ESTIMATES
Wynnstay Properties Plc is a public limited company incorporated and domiciled in England and
Wales. The principal activity of the Company is property investment, development and management.
The Company’s ordinary shares are traded on the Alternative Investment Market. The Company’s
registered number is 00022473.
1.1 Basis of Preparation
The financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as adopted by the EU. The financial statements have been presented in Pounds
Sterling being the functional currency of the Company. The financial statements have been prepared
under the historical cost basis modified for the revaluation of investment properties and financial assets
measured at fair value through profit or loss, and investments.
The financial statements comprise the results of the Company drawn up to 25th March each year.
(a) New Interpretations and Revised Standards Effective for the year ended 25th March 2016
The Directors have adopted all new and revised standards and interpretations issued by the
International Accounting Standards Board (“IASB”) and the International Financial Reporting
Interpretations Committee (“IFRIC”) of the IASB and adopted by the EU that are relevant to the
operations and effective for accounting periods beginning on or after 26th March 2015. The adoption
of these interpretations and revised standards had the following impact on the disclosures and
presentation of the financial statements:
IAS 40 Investment Property
The amendment to the standard clarifies that judgement is required over whether the acquisition of an
investment property is an acquisition of an asset or a business combination that falls within the scope
of IFRS 3. The amendment will prospectively impact the accounting treatment for the acquisition of
investment property which falls under the scope of business combinations.
The Company has evaluated its investment property acquisitions during the year ended 25th March
2016 and have not identified any transactions which fall within the scope of business combinations.
The investment properties acquired during the year are disclosed in note 9 .
(b) Standards and Interpretations in Issue but not yet Effective
The International Accounting Standards Board (“IASB”) and International Financial Reporting
Interpretations Committee (“IFRIC”) have issued revisions to a number of existing standards and new
interpretations with an effective date of implementation after the date of these financial statements.
It is not anticipated that the adoption of these revised standards and interpretations will have a material
impact on the figures included in the financial statements in the period of initial application. The
following standards may have a minor impact:
– 17 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
IFRS 9: Financial Instruments
The standard makes substantial changes to the measurement of financial assets and financial liabilities
and derecognition of financial assets. There will only be three categories of financial assets whereby
financial assets are recognised at either fair value through profit and loss, fair value through other
comprehensive income or measured at amortised cost. On adoption of the standard, the Group will
have to re-determine the classification of its financial assets based on the business model for each
category of financial asset. This is not considered likely to give rise to any significant adjustments.
The principal change to the measurement of financial assets measured at amortised cost or fair value
through other comprehensive income is that impairments will be recognised on an expected loss basis
compared to the current incurred loss approach. As such, where there are expected to be credit losses
these are recognised in profit or loss. For financial assets measured at amortised cost the carrying
amount of the asset is reduced for the loss allowance. For financial assets measured at fair value
through other comprehensive income the loss allowance is recognised in other comprehensive income
and does not reduce the carrying amount of the financial asset.
Most financial liabilities will continue to be carried at amortised cost, however, some financial
liabilities will be required to be measured at fair value through profit or loss, for example derivative
financial instruments, with changes in the liabilities’ credit risk recognised in other comprehensive
income.
The standard is effective for periods beginning on or after 1 January 2018 but is yet to be endorsed by
the EU.
IFRS 15 – Revenue from contracts with customers
The standard has been developed to provide a comprehensive set of principles in presenting the nature,
amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.
The standard is based around five steps in recognising revenue:
Identify the contract with the customer
Identify the performance obligations in the contract
Determine the transaction price
Allocate the transaction price
Recognise revenue when a performance obligation is satisfied
On application of the standard the disclosures are likely to increase. The standard includes principles
on disclosing the nature, amount, timing and uncertainty of revenue and cash flows arising from
contracts with customers, by providing qualitative and quantitative information.
The Company has not as yet evaluated the full extent of the impact that the standard will have on its
financial statements, however the effect is not considered likely to be material.
The standard is effective for periods beginning on or after 1 January 2018 but is yet to be endorsed by
the EU.
– 18 –
– 19 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
IFRS 16 – Leases
The standard makes substantial changes to the recognition and measurement of leases by lessees.
On adoption of the standard, lessees, with certain exceptions for short term or low value leases,
will be required to recognise all leased assets on their balance sheet as ‘right-of-use assets’ with a
corresponding lease liability. This is likely to significantly increase the asset and liability balances
recognised in the balance sheet..
In addition to the re-measurements required, on application of the standard, the disclosures are likely to
increase. The standard includes principles on disclosing the nature, amount, timing and variability of
lease payments and cash flows, by providing qualitative and quantitative information.
The requirements for lessors are substantially unchanged although the disclosures are also likely to
increase.
The Company has not as yet evaluated the full extent of the impact that the standard will have on its
financial statements, however the effect is not considered likely to be material.
The standard is effective for periods beginning on or after 1 January 2019 but is yet to be endorsed by
the EU.
– 19 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
1.2 ACCOUNTING POLICIES
Investment Properties
All the Company’s investment properties are revalued annually and stated at fair value at 25th March.
The aggregate of any resulting surpluses or deficits are taken to profit or loss.
Non-current assets are classified as held for sale if their carrying amount will be recovered through
a sale transaction rather than through continuing use. This condition is regarded as met only when
the sale is highly probable and the asset is available for immediate sale in its present condition.
Management must be committed to the sale, which should be expected to qualify for recognition as a
completed sale within one year from the date of classification. Non-current assets classified as held for
sale are measured at the lower of the assets’ previous carrying amount and fair value less cost to sell.
Investment properties are recognised as acquisitions or disposals based on the date of contract
completion.
Depreciation
In accordance with IAS 40, freehold investment properties are included in the Statement of Financial
Position at fair value, and are not depreciated.
Other plant and equipment is recognised at cost and depreciated on a straight line basis calculated at
annual rates estimated to write off each asset over its useful life of 5 years.
Disposal of Investments
The gains and losses on the disposal of investment properties and other investments are included in
profit or loss in the year of disposal.
Property Income
Property income is recognised on a straight line basis over the period of the lease. Revenue is measured
at the fair value of the consideration receivable. All income is derived in the United Kingdom.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax. Current tax is the
expected tax payable on the taxable income for the year based on the tax rate enacted or substantially
enacted at the reporting date, and any adjustment to tax payable in respect of prior years. Taxable profit
differs from income before tax because it excludes items of income or expense that are deductible in
other years, and it further excludes items that are never taxable or deductible.
Deferred taxation is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used
in the computation of taxable profits, and is accounted for using the statement of financial position
liability method. Deferred tax liabilities are recognised for all taxable temporary differences (including
unrealised gains on revaluation of investment properties) and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilised.
– 20 –
– 21 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
The Company provides for deferred tax on investment properties by reference to the tax that would be
due on the sale of the investment properties. Deferred tax is calculated at the rates that are expected
to apply in the period when the liability is settled, or the asset is realised. Deferred tax is charged or
credited to profit or loss, including deferred tax on the revaluation of investment property.
Trade and Other Accounts Receivable
Trade and other receivables are initially measured at fair value and subsequently measured at amortised
cost as reduced by appropriate allowances for estimated irrecoverable amounts. All receivables do not
carry any interest and are short term in nature.
Cash and Cash Equivalents
Cash comprises cash at bank and on demand deposits. Cash equivalents are short term (less than three
months from inception), repayable on demand and are subject to an insignificant risk of change in
value.
Trade and Other Accounts Payable
Trade and other payables are initially measured at fair value and subsequently measured at amortised
cost. All trade and other accounts payable are non-interest bearing.
Pensions
Pension contributions towards employees’ pension plans are charged to the statement of
comprehensive income as incurred. The pension scheme is a defined contribution scheme.
Borrowings
Interest rate borrowings are recognised at fair value, being proceeds received less any directly
attributable transaction costs. Borrowings are subsequently stated at amortised cost. Any difference
between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss
over the period of the borrowings using the effective interest method. Borrowings are classified as
current liabilities unless the Company has an unconditional right to defer settlement of the liability for
at least 12 months after the reporting date.
1.3
Key Sources of Estimation Uncertainty and Judgements
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that may affect the application of accounting policies and the reported amounts of assets
and liabilities, income and expenses.
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the
revision affects only that period. The key sources of estimation uncertainty that have a significant risk
of causing material adjustment to the carrying amounts of assets and liabilities within the next financial
year are those relating to the fair value of investment properties.
There are no judgemental areas identified by management that could have a material effect on the
financial statements at the reporting date.
– 21 –
– 21 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
2. PROPERTY COSTS
Empty rates
Property management
Legal fees
Agents fees
3. ADMINISTRATIVE COSTS
Rents payable – operating lease rentals
General administration, including staff costs
Auditors’ remuneration: Audit fees
Tax services
4. STAFF COSTS
Staff costs, including Directors, during the year were as follows:
Wages and salaries
Social security costs
Other pension costs
2016
£’000
41
35
76
25
21
122
2016
£’000
21
405
32
4
462
2016
£’000
195
20
46
261
2015
£’000
–
12
12
22
53
87
2015
£’000
21
357
32
4
414
2015
£’000
189
21
11
221
Details of Directors’ emoluments, totaling £240,439 (2015: £199,260), are shown in the Directors’ Report
on page 8. There are no other key management personnel.
The average number of employees, including Directors,
engaged wholly in management and administration was:
The number of Directors for whom the Company paid pension benefits
during the year was:
2016
No.
5
2
2015
No.
5
1
– 22 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
5. FINANCE COSTS (NET)
Interest payable on bank loans
Less: Bank interest receivable
6. TAXATION
(a) Analysis of the tax charge for the year:
UK Corporation tax at 20% (2015: 21%)
Overprovision in previous year
Total current tax charge
Deferred tax – temporary differences
Tax charge for the year
(b) Factors affecting the tax charge for the year:
Net Income before taxation
Current Year:
Corporation tax thereon at 20% (2015 - 21%)
Expenses not deductible for tax purposes
Excess of capital allowances over depreciation
Investment gain on fair value not taxable
Investment gain not taxable
Other timing differences
Overprovision in previous year
Current tax charge
7. DIVIDENDS
Final dividend paid in year of 7.8p per share
(2015: 7.6p per share)
Interim dividend paid in year of 5.0p per share
(2015: 4.5p per share)
2016
£’000
320
(4)
316
2016
£’000
180
(28)
152
3
155
2015
£’000
265
(2)
263
2015
£’000
225
(15)
210
–
210
1,951
2,429
390
7
(3)
(189)
(25)
3
(28)
155
2016
£’000
212
135
347
510
19
(3)
(321)
–
20
(15)
210
2015
£’000
206
122
328
The Board recommends the payment of a final dividend of 8.2p per share, which will be recorded in the
Financial Statements for the year ending 25th March 2017.
– 23 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
8. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing Income after Taxation attributable to Ordinary
Shareholders of £1,796,000 (2015: £2,219,000) by the weighted average number of 2,711,617 (2015:
2,711,617) ordinary shares in issue during the period excluding shares held as treasury. There are no
instruments in issue that would have the effect of diluting earnings per share.
9. INVESTMENT PROPERTIES
Investment Properties
Balance at 25th March 2015
Additions
Disposals
Revaluation Surplus
Balance at 25th March 2016
2016
£’000
21,780
2,739
(235)
24,284
946
25,230
2015
£’000
18,515
1,735
–
20,250
1,530
21,780
The Company’s freehold investment properties are carried at fair value as at 25th March 2016. The fair
value of the properties has been calculated by independent valuers, BNP Paribas Real Estate, on the basis
of market value, defined as:
“The estimated amount for which a property should exchange on the date of valuation between a willing
buyer and a willing seller in an arm’s-length transaction, after proper marketing wherein the parties had each
acted knowledgeably, prudently and without compulsion.”
These recurring fair value measurements for non-financial assets use inputs that are not based on observable
market data, and therefore fall within level 3 of the fair value hierarchy.
The significant unobservable market data used is property yields which range from 5.5% to 10%, with an
average yield of 7.89% and an average weighted yield of 7.61% for the portfolio.
There have been no transfers between levels of the fair value hierarchy. Movements in the fair value are
recognised in profit or loss.
A 0.5% increase or decrease in the yield would result in a corresponding decrease or increase of £0.89
million in the fair value movement through profit or loss.
– 24 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
10. OTHER PROPERTY, PLANT AND EQUIPMENT
Cost
Balance at 25th March 2015 and 25th March 2016
Depreciation
Balance at 25th March 2015
Charge for the Year
Balance at 25th March 2016
Net Book Values at 25th March 2015
and 25th March 2016
11. OPERATING LEASES RECEIVABLE
The following are the future minimum lease
payments receivable under non-cancellable
operating leases which expire:
Not later than one year
Between 2 and 5 years
Over 5 years
2016
£’000
2015
£’000
47
47
–
47
–
2016
£’000
1,696
3,719
654
6,069
47
47
–
47
–
2015
£’000
1,422
2,973
997
5,392
Rental income under operating leases recognised in the profit or loss amounted to £1,778,000 (2015:
£1,663,000).
Typically, the properties were let for a term of between 5 and 15 years at a market rent with rent reviews
every 5 years. The above maturity analysis reflects future minimum lease payments receivable to the next
break clause in the operating lease. The properties are leased on terms where the tenant has the responsibility
for repairs and running costs for each individual unit with a service charge payable to cover common services
provided by the landlord on certain properties.
– 25 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
12. INVESTMENTS
Quoted investments
13. ACCOUNTS RECEIVABLE
Trade receivables
Other receivables
2016
£’000
3
2016
£’000
316
3
319
2015
£’000
3
2015
£’000
486
3
489
Trade receivables include an allowance for bad debts of £nil (2015: £28,000). Trade receivables of
£13,000 (2015: £22,600) are considered past due but not impaired.
14. ACCOUNTS PAYABLE
Trade payables
Other creditors
Accruals and deferred income
15. BANK LOANS PAYABLE
Non-current position
Less: deferred finance costs
2016
£’000
24
129
788
941
2016
£’000
10,000
(28)
9,972
2015
£’000
7
107
972
1,086
2015
£’000
7,658
(37)
7,621
In December 2013, the bank loan was re-financed providing a credit facility of up to £10 million. Interest
was charged at 2.65% per annum over LIBOR for the refinanced facility.
The loan is repayable in one instalment on 18 December 2018. The bank loan includes the following
financial covenants:
• Rental income shall not be less than 2.25 times the interest costs
• The bank loan shall at no time exceed 50% of the market value of the properties secured.
– 26 –
– 27 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
15. BANK LOANS PAYABLE (Continued)
The borrowing facility is secured by fixed charges over the freehold land and buildings owned by the
Company, which at the year end had a combined value of £25,230,000 (2015: £21,780,000). The undrawn
element of the borrowing facility available at 25th March 2016 was £nil (2015: £2.3million). A commitment
fee of 1% per annum was payable on the undrawn amount.
16. DEFERRED TAX
A deferred tax liability of £3,000 has been recognised in respect of the investment property (2015: Deferred
tax asset of £44,000 was not recognised as it was not considered to be recoverable).
17. SHARE CAPITAL
Authorised
2016
£’000
2015
£’000
8,000,000 Ordinary Shares of 25p each:
2,000
2,000
Allotted, Called Up and Fully Paid
3,155,267 Ordinary shares of 25p each
789
789
All shares rank equally in respect of Shareholder rights.
In March 2010, the company acquired 443,650 Ordinary shares of Wynnstay Properties Plc from Channel
Hotels and Properties Ltd at a price of £3.50 per share. These shares, representing in excess of 14% of the
total shares in issue, are held in Treasury.
– 27 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
18. FINANCIAL INSTRUMENTS
The objective of the Company’s policies is to manage the Company’s financial risk, secure cost effective
funding for the Company’s operations and minimise the adverse effects of fluctuations in the financial
markets on the value of the Company’s financial assets and liabilities, on reported profitability and on the
cash flows of the Company.
At 25th March 2016 the Company’s financial instruments comprised borrowings, cash and cash equivalents,
short term receivables and short term payables. The main purpose of these financial instruments was to raise
finance for the Company’s operations. Throughout the period under review, the Company has not traded in
any other financial instruments. The Board reviews and agrees policies for managing each of these risks and
they are summarised below:
Credit Risk
The risk of financial loss due to a counterparty’s failure to honour its obligations arises principally in
connection with property leases and the investment of surplus cash.
Tenant rent payments are monitored regularly and appropriate action is taken to recover monies owed or, if
necessary, to terminate the lease. Funds are invested and loan transactions contracted only with banks and
financial institutions with a high credit rating.
The Company has no significant concentration of credit risk associated with trading counterparties
(considered to be over 5% of net assets) with exposure spread over a large number of tenancies.
Concentration of credit risk exists to the extent that at 25th March 2016 and 2015, current account and short
term deposits were held with two financial institutions, Svenska Handelsbanken AB and C Hoare & Co.
Maximum exposure to credit risk on cash and cash equivalents at 25th March 2016 was £1,383,000 (2015:
£1,050,000).
Currency Risk
As all of the Company’s assets and liabilities are denominated in Pounds Sterling, there is no exposure to
currency risk.
Interest Rate Risk
The Company is exposed to cash flow interest rate risk as it currently borrows at floating interest rates. The
Company monitors and manages its interest rate exposure on a periodic basis but does not take out financial
instruments to mitigate the risk. The Company finances its operations through a combination of retained
profits and bank borrowings.
– 28 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
18. FINANCIAL INSTRUMENTS (Continued)
Interest Rate Sensitivity
Financial instruments affected by interest rate risk include loan borrowings and cash deposits. The analysis
below shows the sensitivity of the statement of comprehensive income and equity to a 0.5% change in
interest rates:
0.5% decrease
in interest rates
0.5% increase
in interest rates
Impact on interest payable - gain/(loss)
Impact on interest receivable - (loss)/gain
Total impact on pre tax profit and equity
2016
£'000
50
(7)
43
2015
£'000
38
(6)
32
2016
£'000
(50)
7
(43)
The net exposure of the Company to interest rate fluctuations was as follows:
Floating rate borrowings (bank loans)
Less: cash and cash equivalents
2016
£'000
(10,000)
1,383
(8,617)
2015
£'000
(38)
6
(32)
2015
£'000
(7,658)
1,050
(6,608)
Fair Value of Financial Instruments
Except as detailed in the following table, management consider the carrying amounts of financial assets and
financial liabilities recognised at amortised cost approximate to their fair value.
Interest bearing borrowings (note 15)
2016
Book Value
£’000
(9,972)
2016
Fair Value
£’000
(9,998)
2015
Book Value
£’000
(7,621)
2015
Fair Value
£’000
(7,672)
Total
(9,972)
(9,998)
(7,621)
(7,672)
– 29 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
18. FINANCIAL INSTRUMENTS (Continued)
Categories of Financial Instruments
Financial assets:
Quoted investments
Loans and receivables
Cash and cash equivalents
Total financial assets
Non-financial assets
Total assets
Financial liabilities at amortised cost
Total liabilities
Shareholders’ equity
Total shareholders’ equity and liabilities
2016
£’000
3
319
1,383
1,705
25,230
26,935
2015
£’000
3
489
1,050
1,542
21,780
23,322
11,096
8,932
11,096
15,839
26,935
8,932
14,390
23,322
The only financial instruments measured subsequent to initial recognition at fair value as at 25th March are
quoted investments. These are included in level 1 in the IFRS 7 hierarchy as they are based on quoted prices
in active markets.
– 30 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
18. FINANCIAL INSTRUMENTS (Continued)
Capital Management
The primary objectives of the Company’s capital management are:
•
•
to safeguard the Company’s ability to continue as a going concern, so that it can continue to provide
returns for shareholders: and
to enable the Company to respond quickly to changes in market conditions and to take advantage of
opportunities.
Capital comprises Shareholders’ equity plus net borrowings. The Company monitors capital using loan to
value and gearing ratios. The former is calculated by reference to total net debt as a percentage of the year
end valuation of the investment property portfolio. Gearing ratio is the percentage of net borrowings divided
by Shareholders’ equity. Net borrowings comprise total borrowings less cash and cash equivalents.
The Company’s policy is that the loan to value ratio should not exceed 50% and the gearing ratio should
not exceed 100%.
Net borrowings and overdraft
Cash and cash equivalents
Net borrowings
Shareholders’ equity
Investment properties
Loan to value ratio
Net gearing ratio
2016
£'000
9,972
(1,383)
8,589
15,839
25,230
34.0%
54.2%
2015
£'000
7,621
(1,050)
6,571
14,390
21,780
30.2%
45.7%
– 31 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
19. COMMITMENTS UNDER OPERATING LEASES
Future rental commitments at 25th March 2016 under non-cancellable operating leases are as follows:-
Within one year
Between two to five years
2016
£’000
24
28
52
2015
£’000
20
3
23
20. RELATED PARTY TRANSACTIONS
The Company has entered into an agreement with T.J.C.P. Consultants Ltd, a company owned and controlled
by T.J.C. Parker which during the year was paid £41,617 (2015: £40,404). There were no other related party
transactions other than with the Directors, which have been disclosed under Directors’ Emoluments in the
Directors’ Report on page 8.
21. EVENTS AFTER THE END OF THE REPORTING PERIOD
In early June, the Company exchanged contracts to purchase four adjoining trade counter and industrial
units in Lichfield, with completion due in the near future. The acquisition price of £1.95million will be
funded from an additional facility of £1.34million from the Company’s bank with the remainder from
cash resources.
– 32 –
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 25TH MARCH 2016
WYNNSTAY PROPERTIES PLC
22. SEGMENTAL REPORTING
Industrial
Retail
Office
Total
2016
2015
2016
2015
2016
2015
2016
2015
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Rental Income
1,253
1,015
245
351
Profit/(loss) on property
investments at fair value
773 1,142
15 210
280
158
297
178
1,778
1,663
946
1,530
Total income and gain/(loss)
2,027
2,157
260
561
437
475
2,724
3,193
Property expenses
(122)
(87)
–
–
–
–
(122)
(87)
Segment profit/(loss)
1,905
2,070
260
561
437
475
2,602
3,106
Unallocated corporate
expenses
Profit on sale of
investment property
Operating income
Interest expense (all relating
to property loans)
Interest income and
other income
Income before taxation
–
–
127
–
–
–
127
–
(462)
(414)
2,267
2,692
(320)
(265)
4
2
1,951
2,429
Other information
Industrial
Retail
Office
Total
2016
2015
2016
2015
2016
2015
2016
2015
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Segment assets
16,117
12,605
5,025
5,245
4,088
3,930
25,230
21,780
Segment assets held
as security
16,117
12,605
5,025
5,245
4,088
3,930
25,230
21,780
– 33 –
WYNNSTAY PROPERTIES PLC
FIVE YEAR FINANCIAL REVIEW
Years Ended 25th March:
2016
£’000
2015
£’000
IFRS
2014
£’000
2013
£’000
2012
£’000
STATEMENT OF COMPREHENSIVE INCOME
Property Income
Profit before movement in fair value of
investment properties and taxation
1,778
878
1,663
899
1,609
1,011
1,628
1503
1,103
1,157
Income before Taxation
1,951
2,429
1,181
Income/(Loss) after Taxation
1,796
2,219
946
166
(193)
292
117
STATEMENT OF FINANCIAL POSITION
Investment Properties
Equity Shareholders’ Funds
25,230
15,839
21,780
14,390
18,515
12,499
17,700
11,873
19,289
12,359
PER SHARE
Basic earnings
Dividends paid and proposed
Net Asset Value
66.2p
13.2p
584p
81.8p
12.3p
531p
34.9p
11.8p
461p
(7.1p)
10.8p
438p
4.3p
10.5p
456p
– 34 –
– 35 –
WYNNSTAY PROPERTIES PLC
NOTICE OF MEETING
NOTICE IS HEREBY GIVEN that the one hundred and thirtieth ANNUAL GENERAL MEETING of the
Members of Wynnstay Properties PLC will be held at The Royal Automobile Club, 89 Pall Mall, London
SW1Y 5HS on Wednesday, 13th July 2016, at 12.00 noon to transact the following business which will be
proposed as ordinary resolutions.
ORDINARY RESOLUTIONS
1. To adopt the Report of the Directors and the Financial Statements for the year ended 25th March 2016.
2 To declare a final dividend for the year ended 25th March 2016.
3 To fix the remuneration of the Directors.
4 To reappoint Moore Stephens LLP as Auditors.
5 To authorise the Directors to determine the remuneration of the Auditors.
6 To re-elect as a Director of the Company Mr T.J.C. Parker, who retires and offers himself for re-election.
Registered Office:
150 Aldersgate Street
London EC1A 4AB
Notes:
By Order of the Board,
T. J. C. Parker
Secretary.
13 June 2016
1. A Member entitled to attend and vote at the Meeting may appoint one or more proxies to attend, speak
and vote in his stead. The proxy need not be a Member of the Company. To be effective, completed forms
of proxy and the power of attorney or other authority (if any) under which they are signed or a copy of
that power or authority certified notarially or in accordance with the Powers of Attorney Act 1971 must
be lodged at the office of the Company’s registrars, Capita Registrars, The Registry, 34 Beckenham Road,
Beckenham, Kent BR3 4TU at least 48 hours before the time appointed for the Meeting. A form of proxy
is enclosed.
2. Completion and return of a form of proxy will not preclude a member from attending and voting at the
meeting in person should he wish to do so.
3. The Company, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, specifies
that only those shareholders registered in the register of members of the Company as at 12.00 noon on
11th July 2016, shall be entitled to attend or vote at the Annual General Meeting in respect of the number
of Ordinary Shares registered in their name at that time. Changes to entries on the relevant register of
securities after 12.00 noon on 11th July 2016 shall be disregarded in determining the rights of any person
to attend or vote at the Meeting.
4. Copies of the service agreements under which Directors of the Company are employed by the Company
will be available for inspection at the Company’s registered office during normal business hours on any
weekday from the date of this Notice until the date of the Annual General Meeting and for 15 minutes
prior to and during the Meeting.
– 35 –
WYNNSTAY PROPERTIES PLC
BIOGRAPHIES OF THE DIRECTORS
Philip G.H. Collins CBE (Non-Executive Chairman) aged 68, is a Solicitor and was Chairman of the
Office of Fair Trading from 2005 to 2014. He was formerly a partner in an international firm based in the City
where he specialised in E.U. law, with particular emphasis on competition issues. Previously, after practising
for some years in the corporate and commercial field, he was seconded for a period to work as Chief Legal
Adviser in an industrial group. Appointed a Director of Wynnstay Properties in 1988 and elected Chairman in
October 1998.
Paul Williams (Managing Director) aged 58 is a Chartered Surveyor and holds a Degree in Land
Management as well as an MBA. He has spent his entire career in commercial property including a fourteen
year period with MEPC where he held a number of senior positions. Paul has also worked for Lloyds TSB,
Legal & General, GE Pensions and Credit Suisse Asset Management and joined Wynnstay Properties as
Managing Director in February 2006.
Charles H. Delevingne (Non-Executive) aged 66. After spending his early career as a partner with prominent
estate agencies, in 1981 he founded Harvey White Properties Limited, a substantial private commercial property
investment company. Appointed a Director of Wynnstay Properties in June 2002.
Terence J. Nagle (Senior Independent Non-Executive) aged 73, is a Chartered Surveyor who has spent his
entire career in property with companies which include Mobil Oil and Rank Xerox. In 1972 he joined Brixton
Estate and was Property Director from 1984 to 1993 and Managing Director from 1993 to 1997. Appointed a
Director of Wynnstay Properties in October 1998.
Toby J. C. Parker (Finance Director and Company Secretary) aged 61, is a Chartered Accountant who
has worked for a number of small and medium sized companies in a varied number of business sectors both in
the UK and abroad. Appointed a Director of Wynnstay Properties in August 2007.
– 36 –