THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY

AND ITS SUBSIDIARIES

LEI: 213800GE3FA4C52C1N05

FOR RELEASE                           7.00 AM                                    30 November 2021

THE CARDIFF PROPERTY PLC

(The group, including Campmoss, specialises in property investment and development in the Thames Valley. The total portfolio including the jointly controlled Campmoss investment and development portfolio, valued in excess of £34m, is primarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire.)

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2021

Highlights:

Richard Wollenberg, Chairman, commented:

"The Thames Valley property market has seen an initial recovery from the difficulties experienced over the past two years although a return to pre-pandemic levels is likely to take some time.

The property market will continue to be sensitive to political and economic changes as well as any further measures required by the pandemic, however during the year under review an increased level of confidence has certainly returned to most sectors of the property market.

The Thames Valley office letting market has shown some signs of recovery and encouragingly we have noticed a large number of our tenants returning to their offices. The level of office enquiries has also increased over recent months.

Office rental levels which were very challenging over recent periods have improved with 5-year lease terms and rental linked to the retail price index being acceptable to most Landlords and Tenants."

For further information:

THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY

AND ITS SUBSIDIARIES

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2021

Chairman's Statement

Dear Shareholder,

The Thames Valley property market has seen an initial recovery from the difficulties experienced over the past two years although a return to pre-pandemic levels is likely to take some time.

The property market will continue to be sensitive to political and economic changes as well as any further measures required by the pandemic, however during the year under review an increased level of confidence has certainly returned to most sectors of the property market.

The Thames Valley office letting market has shown some signs of recovery and encouragingly we have noticed a large number of our tenants returning to their offices. The level of office enquiries has also increased over recent months.

Office rental levels which were very challenging over recent periods have improved with 5-year lease terms and rental linked to the retail price index being acceptable to most Landlords and Tenants.

As indicated in our review of our business, demand for business units has been strong in the last quarter and rental increases of up to 10% have been achieved at our properties at Windsor and Maidenhead. Our retail interests which include Campmoss Property Company Limited ("Campmoss"), primarily in Bracknell and Egham, have proved resilient in a difficult market as the portfolio includes a high number of shops many of which were able to remain open during the period of lock down and continued to trade successfully.

As in the previous financial year the Group continued to liaise closely with all tenants and where necessary assisting with cash flow by agreeing rental payments of monthly in arrears rather than the usual quarterly in advance.

Excluding development properties by value, 43.7% of the Group's portfolio relates to the retail sector, 9.8% to small business units, 14.4% to residential and 32.1% offices. Rent collection for the Group over the last two quarters has been 89% of that invoiced.

The residential market remained reasonably active with asking prices consistent with last year. The residential development at Woking, Surrey, being undertaken by Campmoss in partnership with a well-known local developer, completed after the year end with construction costs in line with budget. I am pleased to report that at the time of writing 31 sales have been completed with a further 18 apartments reserved.

The residential letting market remained firm with all the Group's apartments let on Assured Shorthold Tenancy Agreements.

The Thames Valley commercial property investment market has been reasonably active with institutional and private investors attracted to the high returns available. The Thames Valley continues to be popular for investors with Maidenhead, Woking, Bracknell and Windsor being particularly sought after. The number of investments available in all sectors has markedly reduced as existing investors are finding it difficult to source opportunities that retain the level of income currently being received.

FINANCIAL

For the year to 30 September 2021, the Group profit before tax was £1.26m (2020 restated: £1.94m). This figure includes an investment property value increase of £0.53m (2020: £0.15m decrease) for the Group and a profit of £0.07m (2020: £1.36m) in respect of our post tax profit and pre-dividend share of Campmoss Property Company Limited and Campmoss Property Developments Limited ("Campmoss Group"), our 47.62% owned joint venture. During the year, the Company received a dividend of £0.50m (2020: £0.64m) from its investment in Campmoss Property.

Revenue for the year which represented gross rental income, excluding Campmoss, totalled £0.60m (2020: £0.65m).

The profit after tax attributable to shareholders for the financial year was £1.08m (2020 restated: £1.79m) and the earnings per share was 91.91p (2020 restated: 146.68p).

At the year-end, the Company's commercial portfolio was valued by Kempton Carr Croft at a total of £5.92m (2020: £5.81m) this valuation excludes the Company's freehold office property which was also valued by Kempton Carr Croft and is included in the balance sheet at valuation classified as property, plant and equipment.

Property when completed and retained for re-sale is held as stock at the lower of cost or net realisable value. At the year-end this related to commercial property owned by First Choice Plc at The Windsor Business Centre.

The Group's total property portfolio, including the jointly controlled Campmoss Group's investment and development portfolio, was valued at £34.8m (2020: £35.7m). The value has marginally decreased over the year primarily due to the disposal of Clivemont House offset by additions to Britannia Wharf.  Residential property at Alston House and Gowring House Bracknell and the residential development at Britannia Wharf, Woking are held as stock in Campmoss.

The Company's share of the net assets of Campmoss Group was £15.9m (2020: £16.3m).

The Group's total net assets as at the year-end were £28.44m (2020 restated: £29.08m) equivalent to £25.49 per share (2020 restated: £24.35) an increase of 4.7% over the year (2020: 6.6%). The Group, including Campmoss Group, has adequate financial facilities and resources to complete works in progress and the current development programme. Cash balances are held on short term deposit. At the year-end, the Company had nil gearing (2020: nil). During the year the Company purchased and cancelled 78,525 (2020: 45,694) ordinary shares at a total cost of £1,492,000. (2020: £773,000).

The Company may hold in treasury any of its own shares purchased. This gives the Company the ability to reissue treasury shares and provides greater flexibility in the management of its capital base. At the year end the Company held nil (2020 : nil) shares in treasury. Any shares purchased by the Company not held in treasury will be cancelled and the number of shares in issue reduced accordingly.

Pursuant to share buybacks that took place between 30 November 2020 and 24 September 2021 and already announced, the Concert Party, comprising myself and my family members, now holds more than 50 per cent. of the Company's voting share capital and accordingly is able to increase its aggregate shareholding in the Company without incurring any obligation under Rule 9 to make a general offer to the Company's other shareholders. Furthermore, I together with my wife are now interested in 50.18 per cent. of the Company's voting share capital and accordingly we are able to increase further our shareholdings in the Company without incurring any obligation under Rule 9 to make a general offer to the Company's other shareholders. Accordingly, a further Rule 9 Waiver will not be required in respect of any future buybacks after the current authorities expire at the forthcoming AGM.

The Company proposes to continue its policy of purchasing its own shares, whether to be held in treasury or to be cancelled, and a resolution renewing the Directors' authority will be placed before the forthcoming Annual General Meeting to be held on 17 January 2022. This authority will only be exercised in circumstances where the Directors regard such purchases to be in the best interests of shareholders as a whole. Full details are available on the Company's website www.cardiff-property.com.

Current IFRS accounting requires that deferred tax is chargeable on the difference between, the cost of properties, including applicable indexation and quoted investments and their current market value. However, IFRS accounting does not require the same treatment in respect of the Group's unquoted investment in Campmoss Group, our 47.62% owned joint venture, which represents a substantial part of the Company's net assets. Whilst provision is made in Campmoss accounts for deferred tax, should the shares held in Campmoss be disposed of, for indicative purposes, based on the value in the Company's balance sheet at the year-end this would result in a tax liability of £3.9m (2020 : £3.1m) equivalent to £3.56 (2020: £2.60) per share calculated using a tax rate of 25% (2020: 19%). This information is provided to shareholders as an additional non-statutory disclosure.

DIVIDEND

The Directors recommend a final dividend of 13.5p per share (2020: 12.8p) making a total dividend for the year of 18.5p (2020: 17.6p), an increase of 5.1%. The final dividend will be paid on 1 February 2022 to shareholders on the register at 18 January 2022.

THE PROPERTY PORTFOLIO

The Group continues to concentrate its property activities in the Thames Valley, primarily to the west of London, close to Heathrow Airport and in Surrey, Berkshire and Buckinghamshire.

During the year the Company completed a number of new lettings in Egham, Windsor and Maidenhead whilst progressing development plans at Windsor and Cardiff.

The Campmoss Group portfolio is predominantly let reflecting an active management policy. Planning permission for a Care Home at The Priory, Burnham was recently refused and an appeal together with a revised application is currently being prepared. New lettings were negotiated at Bracknell and Burnham. An updated office planning application for Highway House, Maidenhead is scheduled to be lodged shortly.

QUOTED INVESTMENTS

The Company retains a small portfolio of quoted retail bonds and equity investments the former providing an attractive medium-term income stream. The value of the portfolio marginally decreased over the year as a number of bonds neared their maturity date but remains in excess of original cost. The equity investments include Aquila Services Group plc and Galileo Resources plc.  I remain a Non-Executive Director of both.

RELATIONSHIP AGREEMENT

The Company has entered into a written and legally binding relationship agreement with myself, its controlling shareholder, to address the requirements of LR9.2.2AD of the Listing Rules.

MANAGEMENT AND TEAM

In difficult circumstances the Group has performed well over the year and I wish to take this opportunity of thanking all the members of our property team and our Joint Venture partner for their support and achievements over the year.

OUTLOOK

I expect the property market to continue its recovery with events over the last two years focussing the minds of many property investors and tenants. Supply of materials and labour difficulties currently being experienced by the building industry will certainly lead to increased building costs. This in turn will embed higher capital values in existing property portfolios. Whilst property may well receive additional government taxation attention, the high yields currently available from commercial property will remain attractive compared to low rates of interest offered elsewhere.

The property market in the Thames Valley will remain challenging however I look forward to reporting further progress at the half year.

J. Richard Wollenberg

Chairman

29 November 2021

Consolidated Income Statement

FOR THE YEAR ENDED 30 SEPTEMBER 2021

These results relate entirely to continuing operations. There were no acquisitions or disposals in either year.

Consolidated statement of comprehensive income and expense

FOR THE YEAR ENDED 30 SEPTEMBER 2021

Consolidated Balance Sheet

AT 30 SEPTEMBER 2021

Consolidated Cash Flow Statement

FOR THE YEAR ENDED 30 SEPTEMBER 2021

Consolidated statement of changes in equity
FOR THE YEAR ENDED 30 SEPTEMBER 2021

* - Includes fair value movements on investment properties held by Campmoss Group, our Joint Venture, which are presented in investment property fair value reserve to demonstrate these are unrealised. 

Notes to the Financial Statements

FOR THE YEAR ENDED 30 SEPTEMBER 2020

1.   Basis of preparation

The consolidated results for the year ended 30 September 2021 and 2020 are prepared under applicable International Financial Reporting Standards adopted by the International Accounting Standards in conformity with the companies act 2006 ("adopted IFRS") and those parts of the Companies Act 2006 applicable to companies reporting under IFRS and have been incorporated into the principal accounting policies.

The financial information set out above does not constitute the company's statutory financial statements for the years ended 30 September 2021 or 30 September 2020 but is derived from those financial statements. Statutory financial statements for 2020 have been delivered to the Registrar of Companies and those for 2021 will be delivered in due course. The auditor has reported on those financial statements; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the financial statements for 2020 nor 2021.

Going concern

The financial statements have been prepared on a going concern basis, which assumes that the Group will continue to meet its liabilities as they fall due. The Group's activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Statement and Strategic Report. The financial position of the Group, its property portfolio under management, asset base, liquidity and key performance indicators.

The Group has sufficient financial resources to enable it to continue to trade and to complete the current maintenance and development programme. The Group is ungeared, and the cash flow forecasts do not assume any debt being required. Therefore, the Directors believe that the Group is well placed to manage its business risks successfully despite the current economic uncertainty, and the ongoing impact of the Covid-19 pandemic changing behaviours and the impact on the Group's tenants.

The Group is in the enviable position of having significant cash balances at 30 September 2021, the Cardiff Group had cash balances of £3.6m and a further £1.9m term deposits (generally with maturity dates of 95 days), in addition the Company has investments of £1.1m of which £0.9m are readily marketable. The Group has an operating cost base including tax and dividends of under £1m per annum so even with no income for several years the Group would remain solvent. 

Notes to the Financial Statements

FOR THE YEAR ENDED 30 SEPTEMBER 2021 (continued)

The Cardiff Group receives a management fee from Campmoss of around £0.5m per annum, there is no reason to assume this income would not be received as the Campmoss Group had cash balances at 30 September 2021, of £1.4m and a further £5.3m term deposits (generally with maturity dates of 95 days) and in addition Campmoss expect to receive a significant cash inflow from sales at Britannia Wharf.  Campmoss have a capital commitment of £0.8m to complete its development programme at Britannia Wharf, which completed shortly after the year end and including the Cardiff management fee an annual operating cost base excluding development of under £1.5m, so Campmoss Group similarly has a strong balance sheet.

New, revised or changes to existing financial reporting standards

Subject to the adoption of the IFRS's available for application noted below, this announcement is prepared on the basis of the accounting policies as set out in the most recently published set of annual financial statements.

IFRS

IFRS 16 - Leases was effective for the year ended 30 September 2020. IFRS 16 removes the distinction between operating and financial leases, which for lessees resulted in almost all operating leases being brought on balance sheet.  The Group has restated 2020 results due to an operating lease needing to be capitalised being omitted. See note 3 for further information.

A number of new standards and amendments to standards and interpretations have been issued but are not yet effective for the current accounting period.  None are expected to have a material impact on the consolidated financial statements of the Group.

2.   Segmental analysis

The Group manages its operations in two segments, being property and other investment and property development. Property and other investment relates to the results for The Cardiff Property Company Limited where properties are held as investment property with Property Development relating to the results of First Choice Estates Plc and Thames Valley Retirement Homes Limited. The results of these segments are regularly reviewed by the Board as a basis for the allocation of resources, in conjunction with individual site investment appraisals, and to assess their performance. Information regarding the results and net operating assets for each reportable segment are set out below:

 "Eliminations" relate to inter segment transactions and balances which cannot be specifically allocated but are eliminated on consolidation.

3. Prior year adjustment as a result of a correction of IFRS 16 lease accounting

The Group and Company has restated 2020 results due to an operating lease needing to be capitalised as a Right of Use asset under IFRS 16 on adoption of the Standard in the prior period being omitted in error. The impact of the prior year adjustment is set out below. As noted, no third balance sheet is required as the error occurred in the year ended 30 September 2020 only and has no impact on the year ended 30 September 2019.

4. Earnings per share

Earnings per share has been calculated in accordance with IAS 33 - Earnings Per Share using the profit after tax for the financial year of £1,078,000 (2020 restated: £1,792,000) and the weighted average number of shares as follows:

There is no difference between basic and diluted shares as the Company has no share options in issue.

Notes to the Financial Statements

FOR THE YEAR ENDED 30 SEPTEMBER 2021 (continued)

Financial Calendar

Directors and Advisers