Regulatory News

REG-Nordic Land PLC Final Results - Part 1

Released: 15/07/2009

http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20090715:RnsO6568V
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RNS Number : 6568V  
  
Nordic Land PLC  
  
15 July 2009  
  
15 July 2009  
  
Nordic Land plc  
  
 Preliminary Announcement of Results  
  
For the year ended 31 March 2009  
  
Nordic Land plc ('Nordic Land' or the 'Company', or together with its 
subsidiaries, the 'Group') is a Jersey-registered, property investment company 
established in April 2007 to invest principally in retail real estate in the 
Nordic region including Sweden, Norway and Finland.  The Manager is Lathe 
Investments (Nordic) LLP.  
  
HIGHLIGHTS  
  
 
 * EPRA NAV per share* of £0.91(2008: £1.17) 
 * Portfolio value of £64.2 million (2008: £67.9 million) 
 * Loss for the period attributable to equity shareholders of £3.8million (2008: 
profit of £0.7 million), mainly due to a loss on revaluation of the portfolio of 
£3.7 million (2008: gain of £2.9 million) 
 * Good progress on asset management: 
 * Upward rent indexation of 4% for all the properties in January 2009Increasing 
rental income at Helsingborg through letting vacant space, increasing mall 
income and improving cost recovery from tenantsAdvancement of valuable 
development opportunities at Helsingborg with the support of the local 
MunicipalityPlanning permission granted, pre-let secured and construction 
started, for a new 1,130 m2 unit at Borlssnge100% occupancy achieved in the 
office accommodation in Borlssnge  
  
* EPRA NAV, the measure recommended by the European Public Real Estate 
Association ("EPRA"), is the Net Asset Value per share of the Company adjusted 
to exclude the effect of deferred tax relating to the revaluation of investment 
properties and the fair value of derivative financial instruments net of 
attributable taxation.  
  
For further information please contact:  
  
Nordic Land plc  
  
Ray Horney      +44 (0) 1273 775225  
  
Ian Knight                             +44 (0) 1892 752005  
  
SP Angel Corporate Finance LLP  
  
John Mackay                         +44 (0) 7647 9642  
  
Matrix Corporate Capital LLP  
  
Stephen Mischler                       +44 (0) 20 3206 7000  
  
Bankside Consultants  
  
Simon Rothschild/Oliver Winters      +44 (0) 20 7367 8888  
  
  CHAIRMAN'S STATEMENT  
  
I am pleased to present the results for your Company for the year ended 31 March 
2009.  
  
Despite the worst economic conditions seen for many years, the Nordic real 
estate markets have performed significantly better than many other countries, 
and, in particular, the UK.    
  
Nordic Land remains the only AIM-listed company exclusively investing in 
commercial real estate in the Nordic region and thus offers its investors a 
unique exposure to a market that is performing relatively well, compared to 
other countries, and offers attractive opportunities going forward.  
  
Property valuations  
  
The value of our portfolio has decreased by some 4.9% to SEK 761 million (£64.2 
million) from SEK 800 million (£67.9 million) at 31 March 2008. The Company has 
benefitted from the relatively defensive nature of the Nordic property markets, 
from the performance of the Nordic economies during this recessionary period, 
and from the results achieved by your Manager's active asset management. Details 
of the successful programmes implemented to add value, particularly at 
Terminalen 1 in Helsingborg and Lackeraren 3 in Borlssnge, are outlined in the 
Managing Director's Review.  
  
As a result, although the EPRA NAV per share of the Company has decreased over 
the period by some 22% to £0.91 per share (2008: £1.17 per share), it is still 
above the EPRA NAV of £0.90 per share at the date of Admission to AIM.  In the 
light of global economic conditions and real estate markets around the world 
this is a satisfactory performance.  
  
Share price  
  
The Company's share price does not reflect the Company's performance or the 
asset value behind the shares. Sentiment towards the real estate sector has been 
poor, reflecting concerns over both the impact of economic conditions on the 
direction of commercial property values and refinancing risk. This has been 
further compounded in the case of your Company by the lack of liquidity in its 
shares.  
  
However, your Board considers that the Swedish real estate sector has intrinsic 
defensive qualities in general, as has the Nordic Land portfolio specifically 
(as outlined in this report), and would expect any positive changes in sentiment 
towards the sector as a whole to result in a narrowing of the discount of the 
share price to NAV. The Board also takes some comfort from the fact that the 
Group's borrowings, which are all secured on the Group's properties, are 
operating within bank covenants. None are repayable until 2012, with an option 
to extend for a further year, and all are on a fixed-interest basis, with a 
weighted-average, all-in interest rate of 5.45% per annum.  
  
Your Board is working closely with the Company's brokers to introduce new 
shareholders and to examine other ways to improve liquidity in the Company's 
shares.  
  
Dividend  
  
In line with the statement made at the time of admission to AIM in 2007, no 
dividend has been declared.  
  
Outlook  
  
The retail property market in Sweden continues to offer an attractive 
combination of low rents and relatively robust retail sales.  Your Board will, 
therefore, continue to focus on further building our investment platform in 
Sweden when the timing is right.  
  
Inevitably, the Nordic economies are not totally immune to the effects of the 
financial crises afflicting world economies. In particular, the Swedish banking 
market is continuing to show signs of strain, particularly regarding the banks' 
exposure to the economies of the Baltic countries, and this is reducing their 
appetite for lending for either refinancing existing transactions or financing 
new acquisitions. Notwithstanding this, your Company has continued to show 
progress in very challenging conditions, which bodes well for the Company's 
future, particularly when the markets improve.  
  
As we reported last year, pending recovery of the capital markets, expansion of 
the business is most likely to be achieved by way of joint venturing with 
financial partners or through a merger with or the acquisition of other 
investment vehicles.   
  
I would like to thank the management team and the Group's professional advisers 
for their considerable efforts in producing these results despite the poor 
economic conditions.  
  
RAY HORNEY  
  
Chairman  
  
7 July 2009  
  
  MANAGING DIRECTOR'S REVIEW   
  
THE NORDIC PROPERTY MARKET  
  
Sweden's economy has not been immune to the effects of the global economic 
crisis but has fared well relative to many other European countries. It 
experienced negative GDP growth of 0.2% in 2008.   
  
The National Institute of Economic Research forecasts a fall of 3.9% in 2009 and 
a recovery of 0.9% in 2010. In comparison to the rest of Europe, Sweden is 
forecast to have a somewhat higher than average growth than the EU area in 
2009.  
  
Retail sales performed better than many EU countries and increased by 3.4% 
during 2008. However, consumers are now more cautious, given the weaker labour 
markets, and growth is now expected to be much lower in 2009, growing only by a 
forecast 1%. Demand from retailers for new space has decreased, if not halted, 
and proposed new retail property developments have largely been put on hold.   
  
Swedish banks are lending, albeit cautiously, having had to manage a large 
exposure to the Baltic countries.  
  
Investment activity in 2008 was slightly down at SEK103 billion for all 
property. Shopping centres accounted for approximately 12% of the total retail 
investment transaction volume, down from 66% in 2007. Retail warehouses 
accounted for approximately 78%.   
  
This year the investment market has been very subdued, largely because of 
limited access to funding and property owners not wishing to be perceived as 
distressed sellers.  
  
As in the UK, the significant shift in economic and property fundamentals 
creates opportunities for opportunistic buyers.    
  
OUR BUSINESS MODEL  
  
We focus on multi-let investment properties with a strong retail element. This 
forms the basis of our strategy of seeking to add value whilst having a 
well-spread mix of tenants.    
  
The Company's acquisition process is stringent and based on local knowledge. For 
each property, and further development thereof, detailed business plans are 
prepared to manage risk and to add real value through both development and asset 
management.   
  
Acquisition financing is carefully structured to provide sufficient headroom to 
operate within loan covenants.  Protection against future interest-rate 
movements is achieved by fixed-rate funding, which, in turn, matches the timing 
of the contracted income flows from occupational leases.  
  
Nordic Land's financial controls are equally rigorous and detailed working 
capital forecasts are maintained to assist in the planning of property 
acquisitions and subsequent developments.  
  
As far as property operations are concerned, we engage local Swedish property 
professionals, experienced in the real estate markets, to advise us on our 
investment and asset management strategy.  The Board includes a Swedish property 
professional, Olle Arnoldsson, and offices are maintained in Gothenburg.  
  
Day-to-day property management and leasing is now contracted to DTZ, with 
offices throughout Sweden, with whom the Group and the Manager have 
long-standing relationships.    
  
The Board meets quarterly to review the Manager's comprehensive management 
reports and to make further decisions thereon.   
  
PROPERTY REVIEW  
  
Each of the Group's properties provides a range of profitable asset management 
and development opportunities, which we expect to convert into increases in 
cashflow and net asset value per share.   
  
The portfolio is currently well secured on 102 tenants, of which 73% are 
municipalities and national multiples, including market leaders such as Willy:s, 
Rusta, Scandlines, Sportex, Espresso House, Expert and McDonalds.   
  
The quality and size of the tenant base is important to us in terms of a 
diversified cashflow as well as opening up multiple prospects for adding value 
on lease renewals.    
  
Retail leases in Sweden are typically fairly short, at between three and five 
years, although terms may be longer (up to ten years), particularly on new 
lettings of larger retail boxes. It is commonplace for retailers to have the 

right to renew their leases.  Rents are annually indexed to the Consumer Price 
Index.  
  
Nordic Land's assets comprise Terminalen 1 in Helsingborg, which is a 
regionally-important, mixed-use, retail and transport hub serving the west coast 
of Sweden and Denmark, a prime-located retail park in Borlssnge with additional 
development opportunities and a multi-let retail property in an affluent part of 
Greater Stockholm.  
  
Terminalen 1, Helsingborg  
  
This long-leasehold interest was acquired in May 2007 for SEK 540 million 
(excluding purchase costs) to reflect an initial yield of 5.7% at purchase.   
  
Helsingborg is a major port city in south-west Sweden, opposite Denmark. The 
property itself is in central Helsingborg, unique for the area's transportation 
systems, serving rail, road, ferry and bus routes, and in a prime office 
location.  
  
The building was constructed in 1991 and is the region's central transport 
terminal.   
  
It comprises the terminal area (which provides ticket sales, waiting halls and a 
passenger link to the main Sweden to Denmark ferry terminal), a shopping centre 
with a number of restaurants above, and offices in the 5-6 levels above. The 
total lettable area is some 19,500 m2.    
  
Underneath the building are the main, west-coast-line, railway station and the 
town's main bus terminal, both of which the Group owns.  
  
The property has both a multi-storey, roof-top, car park (303 spaces) and a 
surface roof-top car park (399 spaces), which benefit from being directly 
adjacent to the ferry and train terminals and which together provide a strong 
income stream.  
  
In total there are currently some 87 tenants.  
  
The South Harbour area, directly to the south of the property, is to be 
redeveloped into a major 'docklands-style' development (called H+), comprising 
1,000,000 m2 of land to cater for living, working, studying and leisure 
facilities. This project has been subject to an international tender and five 
teams have been selected to submit their proposals in 2009. In addition to the 
H+ project, the railway will in the future be underground and thus further 
enhance the quality of the area. The construction of the railway tunnel is 
estimated to start in early 2012, for completion in 2017.  These projects would 
further improve the location around the building and benefit the property.  
Terminalen is the 'gateway' property by virtue of its location and hosting of 
the major transport links and thus gives Nordic Land the opportunity to become 
involved in the development of this area.  
  
We are particularly encouraged by our ongoing meetings with officials of the 
Municipality and its efforts to make a positive contribution to the H+ scheme.  
  
We are in the final stages of installing some energy-efficient equipment to 
achieve significant cost savings as well as implementing an energy-saving 
programme, and are already seeing an increase in net operating income.  In due 
course this will enhance the property valuation.  
  
We have let our previously-vacant space to new tenants so as to increase income, 
and there is further under-utilised or vacant space at the property which has 
now been made ready for leasing.  The leasing team, led by DTZ, has been 
strengthened with the appointment of a local experienced agent who has excellent 
knowledge of the local market.  
  
We have completed plans with our architects for a new, vibrant, restaurant area 
at first floor level, and, potentially, new offices above.   
  
In parallel with the ongoing discussions with the Municipality regarding the 
approval and planning process, the first stage of the refurbishment is now in 
hand, involving the upgrading of all lifts and, later in the year, the 
replacement and repositioning of escalators leading to core areas.  
  
Rent recovery levels are very strong and there are no significant arrears or bad 
debts.  
  
Lackeraren 3, Borlssnge   
  
This freehold interest was acquired in May 2007 for SEK 140 million (excluding 
purchase costs) to reflect an initial yield of 5.8% at purchase.  
  
Borlssnge is a major regional town 120 km to the north west of Stockholm with 
large corporate employers and a strong local economy.  The property itself is 
located next to the regionally-dominant Kupolen Shopping Centre.   
  
The property comprises a prime, retail-warehouse park and two small, 
free-standing office buildings, all of some 10,000 m2, plus a 327-space surface 
car park and extensive servicing areas. The income is well secured by major 
national retailers including Willy:s and Rusta.  
  
Over the last 12 months we have secured a building permit to build a new 1,130 
m2 unit, acquired additional land so as to meet car park standards for more 
space on site, and signed a pre-let with a national retailer, Expert. The 
construction of the additional retail unit is well underway and in line with 
budget and schedule. The new tenant, which will take occupation in August 2009, 
will further enhance the quality of the tenant mix at the property.  We expect 
the remaining development profit to be included in the next valuation in 
September when the project will have been completed.  
  
We are currently in discussions with the Municipality to secure for the Group 
the possibility for further extension of the retail and office areas and to 
potentially acquire land adjacent to our existing property in order to enlarge 
the car park areas.  
  
The property is now fully let and there are no arrears or bad debts.  
  
Sicklaon 117, Nacka, Stockholm  
  
This freehold interest was acquired in September 2007 for SEK 64 million 
(excluding purchase costs) to reflect an initial yield of 5.9% at purchase.  
  
The property is well-located in the Sickla shopping quarter which, as the main 
retail location for the Nacka community, generates some of the highest sales per 
square metre in Sweden.  This area is amongst the most affluent regions in 
Sweden, featuring high per capita income and strong population growth.    
  
The immediate location benefits from recent and substantial improvements to 
local infrastructure. New retail developments and car parking facilities have 
recently been completed adjacent to the building, and a new road connection is 
being planned.  
  
The property comprises 3,400 m2 of retail, storage and office accommodation in 
one building, predominantly let to national multiple retailers, plus a villa and 
land for re-development.    
  
We have a number of asset-management initiatives in hand, including improvement 
to the retail elements and a property-cost reduction programme so as to increase 
net operating income.  
  
The property currently has one small vacant area which is being marketed. There 
are no arrears or bad debts.  
  
VALUATIONS  
  
As at 31 March 2009, the value of the Group's property portfolio had decreased 
by some £3.7 million to £64.2 million, compared to the value at 31 March 2008 of 
£67.9 million.  
  
This follows the completion of its formal year-end valuation, which was carried 
out by DTZ, in accordance with the Appraisal and Valuation Standards of RICS:  
  
 
  Property                       Valuation as at 31 March    Valuation as at 31 March    Increase/     %        
                                 2009                        2008                        (decrease)             
                                                                                                                
  Helsingborg     £ million      46.4                        48.8                        (2.4)         (4.9)    
                  SEK million    550                         575                         (25)          (4.3)    
                                                                                                                
  Lackeraren      £ million      13.0                        13.2                        (0.2)         (1.5)    
                  SEK million    154                         155                         (1)           (0.6)    
                                                                                                                
  Sicklaon        £million       4.8                         5.9                         (1.1)         (18.6)   
                  SEK million    57                          70                          (13)          (18.6)   
                                                                                                                
  Total           £million       64.2                        67.9                        (3.7)         (5.4)    
                  SEK million    761                         800                         (39)          (4.9)    
                                                                                                                
  Blended yield                  6.2%                        5.7%                                               
  
  
Note: SEK:GBP exchange rate was 11.85 as at 31 March 2009 (11.8 as at 31 March 
2008).  
  
The SEK property valuations have fallen by 4.9%. This is mainly due to valuers 
moving yields out to reflect current market conditions in the real estate 
sector; however, a good contribution was made from our asset-management 
activities:  
  
 
 * an increase in net operating income at Helsingborg through letting vacant 
space, increasing mall income and implementing energy cost savings  
  
 
 * the achievement of 100% occupancy in the office accommodation in Borlssnge  
  
 
 * starting construction on the pre-let development at Borlssnge  
  
 
 * upward rent indexation of 3.99% for all of the properties in January 2009  
  
  FINANCIAL REVIEW  
  
Results  
  
Net rental income for the year was £3.4 million (2008: £2.6 million), 
representing a full year's contribution after the acquisition of the Helsingborg 
and Borlssnge properties in May 2007 and the Sicklaon property in September 
2007. Operating loss for the year was £1.6 million (2008: profit of £3.5 
million), after allowing for administrative expenses of £1.2 million (2008: £1.9 
million) and the loss on the revaluation of investment properties of £3.7 
million (2008: gain of £2.9 million).  
  
Loss before tax for the year was £4.5 million (2008: profit before tax of £1.9 
million), after allowing for the net interest payable of £2.7 million (2008: 
£1.9 million) and the writing off of the fair value of derivative financial 
instruments of £0.3 million (2008: gain of £0.3 million).  
  
The tax credit for the year was £0.7 million (2008: charge of £1.2 million), 
principally due to the deferred tax on the revaluation of investment 
properties.  
  
Loss after tax for the year was therefore £3.8 million (2008: profit after tax 
of £0.7 million).  EPRA earnings per share, excluding the loss on revaluation of 
investment properties, the change in fair value of derivative financial 
instruments and exceptional items, all net of attributable taxation, was a loss 
of 2.6 p per share (2008: loss of 6.8 p).  
  
Dividend  
  
As reported in the Chairman's Statement, no dividend has been declared, in line 
with the statement made by the directors at the time of Admission.  
  
Cash flow  
  
Net cash flows used in operating activities were £1.0 million (2008: inflow of 
£1.6 million). After allowing for capital expenditure on the acquisition and 
development of investment properties of £0.5 million (2008: £57.4 million), the 
net decrease in cash and cash equivalents for the year was £1.5 million (2008: 
increase of £6.3 million). Available cash balances at the year end were £5.3 
million (2008: £6.8 million).  
  
Balance sheet  
  
At 31 March 2009 the value of the Group's property portfolio was £64.2 million 
(2008: £67.9 million). After allowing for foreign exchange losses on 
retranslation of £0.4 million (2008: gains of £0.3 million) and capital 
expenditure incurred during the year of £0.5 million (2008: £0.1 million), the 
valuation deficit was £3.7 million (2008: surplus of £2.9 million).  
  
EPRA net asset value per share was as follows:  
  
 
                                    As at           As at          
                                    31 March 2009   31 March 2008  
                                                                   
  Basic net asset value per share   £0.84           £1.07          
                                                                   
                                                                   
  EPRA net asset value per share    £0.91           £1.17          
                                                                   
  
  
EPRA net asset value per share is a property industry measure which excludes 
deferred tax relating to the revaluation of investment properties and the fair 
value of derivative financial instruments net of attributable taxation.  
  
Financing  
  
As at 31 March 2009 the Group's net debt totalled £44.4 million (2008: £43.0 
million). The Group's bank borrowings are all secured on the Group's properties 
and are operating well within bank loan covenants.  
  
The loans are repayable in 2012, with an option to extend for a further year, 
and are on a fixed-interest basis, with a weighted-average, all-in interest rate 
of 5.45% per annum.   
  
At the year end the net debt/property gearing ratio was 69.1% (2008: 63.4%).  
  
The loans to acquire the properties were originally provided by Lehman Brothers 
Bankhaus AG ('Lehman'). On 23 May 2008 the loans were transferred to a 
commercial-mortgage-backed-securities ('CMBS') vehicle, Excalibur Funding No 1 
PLC ('Excalibur'), set up by Lehman to be the lender of a portfolio of loans. 
Excalibur took over all the rights and obligations under the Lehman loan 
agreement, including the capital expenditure commitment facility of SEK 110 
million (£9.3 million).  
  
The loan agreement states that Nordic Land pays interest to Excalibur on a 
fixed-interest basis.  The Group does not have any floating-rate obligations 
under the terms of the loan.  Lehman previously advised that Nordic Land 
benefitted from movements in interest rates in relation to the underlying 
derivative financial instruments put in place within the Lehman group of 
companies (and thus subsequently Excalibur) to achieve the fixed interest rates 
on our loans. We accounted for the value of these derivative financial 
instruments in the Balance Sheet on the advice of Lehman. However, since the 
loans were transferred to Excalibur, we have been advised that there are no 
underlying derivative financial instruments within Excalibur to which Nordic 
Land is a party to the derivative contract. Hence the value of the derivative 
financial instruments has been removed from the Balance Sheet.  
  
The loans have been accounted for at amortised cost at the Balance Sheet date, 
in accordance with IFRS, and the fair value is disclosed in the notes to the 
accounts (note 15).  Nordic Land's only obligation is to pay interest at fixed 
rates and repay loans at par value at maturity.  
  
Loan covenant compliance at 31 March 2009 is as follows:  
  
 

  Property           Interest cover      
                                         
  Helsingborg        128%                
  Lackeraren         150%                
  Sicklaon           127%                
                                         
  Combined- actual          132%         
                                         
  Loan covenant             115%         
  
  
There are no covenants in relation to ongoing compliance with, and monitoring 
of, loan to value percentages, except in relation to drawdowns under the capital 
expenditure loan facility.  
  
All loans are therefore performing within covenant.  
  
As stated above, Excalibur took over the commitment to provide a capital 
expenditure loan facility of some £9.3 million (2008: £9.3 million). We had 
intended to use this facility to fund part of the costs for the development 
project at Borlssnge and have submitted a drawdown notice to Excalibur to 
receive the funds. To date we have not received either the funds or confirmation 
that the facility exists.  Therefore there is some doubt as to whether we will 
receive the funds. Until such time that either the funds are received or we 
receive confirmation that the facility exists, we will continue to use our 
existing cash resources.  We will also seek to either refinance the existing 
loans or raise additional bank funding as required.  
  
The Manager routinely prepares working capital forecasts as part of its 
operational activities and its regular reporting to the Board, and monitors the 
effect of changing assumptions on the forecasts and loan covenant compliance.  
  
OUTLOOK  
  
The Board, together with the Manager and the Company's advisers, regularly 
reviews the potential opportunities available to the Company regarding raising 
capital and pursuing strategic investment actions with the aim of growing the 
Company and maximising returns to shareholders.  To date these have been limited 
because of the effective closure of the equity capital markets for companies of 
our size, and the limited bank funding available.  
  
Given the current global economic environment, and the reduction in available 
bank and equity funding, we are concentrating our resources, in the short-term, 
on maximising the asset management potential of our existing properties.  
  
Overall, we are satisfied with our progress to date and look forward to 
confidence returning to the capital markets.  
  
IAN KNIGHT  
  
Managing Director  
  
  Consolidated Financial Statements  
  
Consolidated Income Statement for the year ended 31 March 2009  
  
 
                                                                                                                            
                                                                                       Year ended        3 April 2007       
                                                                                       31 March          to 31 March        
                                                                                       2009              2008               
                                                        Note                           £000              £000               
                                                                                                                            
  Gross rental income                                                                  5,122             3,883              
  Property operating expenses                                                          (1,723)           (1,279)            
                                                                                                                            
  Net rental income                                     4                              3,399             2,604              
                                                                                                                            
  Administrative expenses                                                              (1,238)           (1,941)            
  Loss on abortive transaction                                                         -                 (104)              
  (Loss)/gain on revaluation of investment properties   10                             (3,721)           2,947              
                                                                                                                            
  Operating (loss)/profit                               5                              (1,560)           3,506              
                                                                                                                            
  Financial income                                      6                              191               291                
  Financial expenses                                    7                              (2,862)           (2,183)            
  Change in fair value of derivative financial                                                                              
  instruments                                           11                             (272)             272                
                                                                                                                            
  (Loss)/profit before tax                                                             (4,503)           1,886              
  Income tax                                            8                              700               (1,154)            
                                                                                                                            
  (Loss)/profit for the year/period attributable to equity shareholders                                                     
                                                                                       (3,803)           732                
                                                                                                                            
                                                                                                                            
  
  
 
  Earnings per share - basic and diluted        9   (19.4)p     4.2p       
                                                                           
                                                                           
  EPRA earnings per share - basic and diluted   9   (2.6)p      (6.8)p     
                                                                           
  
  
The notes form part of these consolidated financial statements.  
  
  Consolidated Balance Sheet as at 31 March 2009  
  
 
                                                 31 March       31 March      
                                                 2009           2008          
                                          Note   £000           £000          
                                                                              
  ASSETS                                                                      
  Non-current assets                                                          
  Investment properties                   10     64,203         67,878        
  Derivative financial instruments        11     -              272           
                                                                              
                                                 64,203         68,150        
                                                                              
  Current assets                                                              
  Trade and other receivables             12     378            363           
  Cash and cash equivalents               13     5,336          6,838         
                                                                              
                                                 5,714          7,201         
                                                                              
  Total assets                                   69,917         75,351        
                                                                              
                                                                              
  LIABILITIES                                                                 
  Current liabilities                                                         
  Trade and other payables                14     2,154          2,798         
  Income tax provision                           19             9             
                                                                              
                                                        2,173          2,807  
  Non-current liabilities                                                     
  Borrowings                              15     49,696         49,860        
  Deferred tax liability                  17     1,403          2,138         
                                                                              
                                                 51,099         51,998        
                                                                              
  Total liabilities                              53,272         54,805        
                                                                              
                                                                              
  Net assets                                     16,645         20,546        
                                                                              
  EQUITY                                                                      
  Ordinary share capital                  18     199            192           
  Share premium                                  17,523         17,059        
  Foreign currency translation reserve           1,859          2,037         
  Retained earnings                              (2,936)        1,258         
                                                                              
  Total shareholders' equity                     16,645         20,546        
                                                                              
                                                                              
  Net asset value per value               19     £0.84          £1.07         
                                                                              
  EPRA net asset value per share          19     £0.91          £1.17         
  
  
The notes form part of these consolidated financial statements.  
  
  Consolidated Cash Flow Statement for the year ended 31 March 2009  
  
 
                                                                                         Year ended 31 March        3 April 2007 to        
                                                                                         2009                       31 March               
                                                                                                                    2008                   
                                                             Note                        £000                       £000                   
                                                                                                                                           
  Cash flows from operating activities                                                                                                     
  (Loss)/profit for the year/period                                                      (3,803)                    732                    
  Interest receivable                                                                    (191)                      (291)                  
  Interest payable and other finance costs                                               2,862                      2,183                  
  Income tax                                                                             (700)                      1,154                  
  Adjustments for non-cash items:                                                                                                          
  Loss/(gain) on revaluation of investment properties                                    3,721                      (2,947)                
  Change in fair value of derivative financial instruments                               272                                               
                                                                                                                    (272)                  
  Share-based payments                                                                   77                         526                    
  Operating profit before changes in working capital                                              2,238                             1,085  
  Other movements arising from operations:                                                                                                 
  Increase in trade and other receivables                                                (15)                       (248)                  
  (Decrease)/increase in trade and other payables                                        (634)                      1,393                  
  Tax paid                                                                               -                          (9)                    
  Net cash generated from operations                                                                       1,589            2,221          
  Interest received                                                                      203                        264                    
  Interest paid                                                                          (2,760)                    (922)                  
  Net cash flows (used in)/from operating activities                                                       (968)            1,563          
  Cash flows used in investing activities                                                                                                  
  Acquisition and development of investment properties                                   (486)                      (57,352)               
  Cash flows used in investing activities                                                                  (486)            (57,352)       
  Cash flows from financing activities                                                                                                     
  Proceeds from the issue of share capital at a premium                                  -                          19,173                 
  Cost of issue of shares at a premium                                                   -                          (1,922)                
  Net drawdown of borrowings                                                             -                          44,829                 
  Cash flows from financing activities                                                                     -                62,080         
  Net (decrease)/increase in cash and cash equivalents                                   (1,454)                                           
                                                                                                                    6,291                  
                                                                                                                                           
  Opening cash and cash equivalents                                                      6,838                      -                      
  Exchange (losses)/gains on cash balances                                               (48)                       547                    
  Closing cash and cash equivalents                          13                                            5,336            6,838          
  
  
The notes form part of these consolidated financial statements.  
  
  Consolidated Statement of Changes in Equity for the year ended 31 March 2009  
  
 
                                                        Ordinary share capital   Share premium   Foreign currency translation reserve   Retained earnings   Total equity  
                                                        £000                     £000            £000                                   £000                £000          
                                                                                                                                                                          
  2009                                                                                                                                                                    
  Loss for the year                                     -                        -               -                                      (3,803)             (3,803)       
  Foreign exchange differences recognised directly in   -                        -               (178)                                  -                   (178)         
  equity                                                                                                                                                                  
  Total recognised income and expense                   -                        -               (178)                                  (3,803)             (3,981)       
  Share-based payments                                  -                        -               -                                      (391)               (391)         
  Ordinary shares issued at a premium                   7                        464             -                                      -                   471           
  Balance at 1 April 2008                               192                      17,059          2,037                                  1,258               20,546        
  Balance at 31 March 2009                              199                      17,523          1,859                                  (2,936)             16,645        
                                                                                                                                                                          
                                                                                                                                                                          
  2008                                                                                                                                                                    
  Profit for the period                                 -                        -               -                                      732                 732           
  Foreign exchange differences recognised directly in   -                        -               2,037                                  -                   2,037         
  equity                                                                                                                                                                  
  Total recognised income and expense                   -                        -               2,037                                  732                 2,769         
  Share-based payments                                  -                        -               -                                      526                 526           
  Ordinary shares issued at a premium                   192                      18,981          -                                      -                   19,173         
  
  
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