Unaudited 6 Month Interim Report for period to 31st May 2007
Chairman's Statement
"This is my first Statement since the Company was admitted to the AIM. The 6 month period to 31st May 2007 has been eventful, in that we have achieved several of our aspirations earlier than anticipated and this has been reflected in the Company's share price.
Progress Report
Manston
a) On 15th March 2007 the Company purchased further land comprising of 73 acres of agricultural land.
b) On 22nd June 2007 the Company signed an agreement to lease with the Beijing Association of SME. The agreement to lease is for between 900,000 sq ft and 1,100,000 sq ft of business accommodation at Manston International Business Park. The lease is for a period of 10 years from handover to the Tenant on the completion of the building contract which is expected to be within 18 months.
Chinamex Middle East Investment & Trade Promotion Centre ("Chinamex") is standing as the "surety" to the agreement. Chinamex is an official arm of the People's Republic of China.
Dover
The Company continues to work with its advisors to prepare a planning application to maximise the use and value of the 27 acres which has the benefit of an existing consent for commercial development (B1).
Wigan
The Company has been working with Chinamex, Middle East Investment and Trade Promotion Centre and Wigan Metropolitan Borough Council to formulate plans for a proposed site at Wigan to accommodate textile and apparel businesses from china.
Progress has continued but up until 31st May 2007 no formal agreement or contract had been entered into with Wigan Borough Council.
General Information
The Company has been working hard to develop contacts and partnerships in China, in particular with organizations such as Chinamex and the Association of Small Medium Enterprise (SME).
On 13th March 2007 the China Europe Association for Technical and Economic Co-operation (Ceatec) signed a Memorandum of Understanding (MOU) with South East England Development Agency (SEEDA). This MOU gave the mandate specifically to Chinamex and the Company to promote and develop business relations.
The progress made as listed against Manston above is a demonstration of the Company's work towards achieving this.
The Company hopes that by the year end (30th November 2007) we will have advanced the following fronts:
(i) Completed negotiations with Wigan Borough Council relating to a proposed site.
(ii) Concluded discussions with the Chinese Chamber of Commerce for Import and Export of Textiles, to enter into an agreement to lease for a proposed site at Wigan.
(iii) Submitted planning application for industrial use on the Company's existing land at Manston.
(iv) Submitted an outline planning application for industrial use on land adjacent to the existing Business Park at Manston (73 acres purchased on 15th march).
I would like to thank all those who have helped make this initial period a successful one, including our shareholders and professional advisors, as well as our numerous friends and colleagues in China. The Directors are confident that your Company will continue to thrive, regardless of general economic conditions and we look forward to reporting further progress at the year end."
Robin Bolton
Chairman
For further information, please contact:
Commercial Group Properties PLC
Ken Wills +44 (0) 1843 860866
Beaumont Cornish Limited
Roland Cornish +44 (0) 20 7628 3396
Square 1 Consulting Ltd
David Bick/Mark Longson +44 (0) 20 7929 5599
INCOME STATEMENT
PERIOD FROM 1 DECEMBER 2006 TO 31 MAY 2007
Unaudited
31 May 07
Note £
Continuing operations:
Administrative expenses 399,023
Other operating income (26,045)
------------------------
OPERATING LOSS (372,978)
Interest income 466
Interest expense (483,399)
-------------------
LOSS BEFORE TAXATION (855,911)
Corporation tax expense -
---------------
LOSS FOR THE PERIOD ATTRIBUTABLE TO (855,911)
SHAREHOLDERS
================
Loss per ordinary share (pence)
Basic 2 (4.38)
==========
BALANCE SHEET
PERIOD FROM 1 DECEMBER 2006 TO 31 MAY 2007
Unaudited
31 May
2007
£
Note
ASSETS
Non-current assets
Property, plant and equipment 3 45,388,808
-----------------------
Total non-current assets 45,388,808
Current assets
Properties 11,348,530
intended for sale
Trade and other 3,670,184
receivables
Cash and cash 751,863
equivalents
-----------------------
Total current assets 15,770,577
-----------------------
TOTAL ASSETS 61,159,385
=======================
EQUITY AND
LIABILITIES
Equity 4 210,000
Issued share
capital
Share premium 15,064,740
Revaluation 16,597,605
reserve
Retained earnings (855,911)
------------------------
Total equity 31,016,434
Non-current
liabilities
Interest bearing 23,525,564
loans and borrowings
Deferred tax 6,454,624
provision
------------------------
Total non-current 29,980,188
liabilities
Current liabilities
Bank overdraft 2,016
Trade payables 9,179
Other payables 151,568
------------------------
Total current liabilities 162,763
Total liabilities 30,142,951
------------------------
TOTAL EQUITY AND LIABILITIES 61,159,385
========================
STATEMENT OF CHANGES IN EQUITY
PERIOD FROM 1 DECEMBER TO 31 MAY 2007
Share Share Revaluation Retained
capital premium reserve Earnings Total
£ £ £ £ £
As at 1 December 180,000 13,820,000 - - 14,000,000
2006
Revaluation: - - 23,052,229 - 23,052,229
Properties under
Development
Deferred tax - - (6,454,624) - (6,454,624)
Issue of shares 30,000 1,470,000 - - 1,500,000
Flotation costs - (225,260) - - (225,260)
Loss for the period - - - (855,911) (855,911)
As at 31 May 2007 ------- ------------ ------------- --------- -----------
210,000 15,064,740 16,597,605 (855,911) 31,016,434
======= ============ ============= ========= ===========
CASH FLOW STATEMENT
PERIOD FROM 1 DECEMBER TO 31 MAY 2007
Unaudited
31 May
2007
£
Cash inflow from operating activities
Loss before tax (855,911)
Interest income (466)
Interest expense 483,399
Depreciation 543
_______
(372,435)
Increase in properties intended for sale (248,530)
Decrease in other receivables and prepayments (3,670,184)
Increase in trade payables 160,747
(4,130,402)
Cash used in operations
Interest paid (483,399)
_________
Net cash outflow from operating activities (4,613,801)
_________
Cash flows from investing activities
Purchase of tangible assets (5,437,122)
Interest received 466
________
Net cash used in investing activities (5,436,656)
________
Cash flows from financing activities
Proceeds from the issue of shares 1,274,740
Proceeds from long term borrowings 9,525,564
________
Net cash inflow from financing activities 10,800,304
________
Net increase in cash and cash equivalents 749,847
________
Cash and cash equivalents at the beginning of the period -
________
Cash and cash equivalents at the end of the period 749,847
________
NOTES TO THE FINANCIAL STATEMENTS
PERIOD FROM 1 DECEMBER 2006 TO 31 MAY 2007
1. ACCOUNTING POLICIES
Financial Information
The financial information set out above does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. It has been prepared on a going concern basis in accordance with International Financial Reporting Standards (IFRS).
The results for the period from 1 December 2006 to 31 May 2007 are unaudited.
Basis of accounting
The Financial Statements have been prepared in accordance with EU-endorsed International Financial Reporting Standards (IFRS), IFRIC interpretations and the Companies Act 1985 applicable to companies reporting under IFRS. The Financial Statements have also been prepared under the historical cost convention, as modified by the revaluation of properties under development through profit or loss, which is carried at fair value.
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from these estimates.
The principal accounting policies are set out below, and these policies will be applied when preparing the annual financial statements.
Property, plant and equipment
All property, plant and equipment are initially recorded at cost, net of depreciation, and any provision for impairment.
Properties under development
All properties under development are initially recorded at cost, being the fair value of the consideration given and including acquisition costs. Properties under development are then revalued to open market value at the accounting date. Gains or losses arising on the revaluation are taken directly to equity.
Depreciation
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:
Fixtures & Fittings - 25% straight line
Properties intended for sale
Properties intended for sale are classified under current assets and are stated at the lower of cost and net realisable value.
Cost comprises land cost and development costs including attributable borrowing costs and charges capitalised during the development period.
Foreign currencies
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (its "functional currency"). The financial statements are presented in pounds sterling (£), which is the Company's functional and presentation currency.
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. All differences are taken to the income statement.
Financial instruments
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Trade receivables
Trade receivables do not carry any interest and are stated at their fair value, less impairments relating to their estimated irrecoverable amounts.
Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at fair value. For the purposes of the cash flow statement, cash and cash equivalents comprise cash at bank and in hand, including bank deposits with original maturities of three months or less. Bank overdrafts are also included as they are an integral part of the company's cash management.
Bank and other borrowings
Interest bearing bank loans and overdrafts and other loans are initially recognised at fair value.
Such borrowings are subsequently stated at amortised cost with the difference between initial fair value and redemption value recognised in the income statement over the period to redemption.
Trade payables
Trade payables on normal terms are not interest bearing and are stated at their fair value.
Taxation
Current tax is the tax currently payable based on the taxable profit for the year.
Deferred tax is provided in full, using the liability method, on temporary differences between the carrying amounts of assets and liabilities and their tax bases, except when, at the initial recognition of the asset or liability, there is no effect on accounting or taxable profit or loss. Deferred tax is determined using tax rates and laws that have been substantially enacted by the Balance Sheet date, and that are expected to apply when the temporary difference reverses.
Tax losses available to be carried forward, and other tax credits are recognised as deferred tax assets, to the extent that it is probable that there will be future taxable profits against which the temporary differences can be utilised.
Changes in deferred tax assets or liabilities are recognised as a component of the tax expense in the Income Statement, except where they relate to items that are charged or credited directly to equity (such as the revaluation of properties under development), in which case the related deferred tax is also charged or credited directly to equity.
2. LOSS PER SHARE
The basic loss per ordinary share is calculated by dividing loss for the year less non-equity dividends and other appropriations in respect of non-equity shares by the weighted average number of equity shares outstanding during the year.
The calculation of the basic loss per ordinary share is based upon the following
data:
Loss
31 May 07
£
Loss for the purposes of basic loss per 855,911
share
--------------
Number of shares
31 May 07
No
Basic weighted average number of shares 19,549,450
=============
There have been no other transactions involving ordinary shares or potential ordinary shares since the reporting date and before the completion of these financial statements.
3. NON-CURRENT ASSETS
The Company's land holding at Manston at admission was shown as property intended for sale. As detailed in the Chairman's Statement, on 13 March 2007, a Memorandum of Understanding was signed that affected the long term future of this site. The Company's interest therefore changed to a long term holding as property under development and was transferred from Current Assets to Non-Current Assets on that date at its market value.
4. SHARE CAPITAL
Authorised share capital:
31 May 07
£
50,000,000 Ordinary shares of £0.01 each 500,000
==========
Allotted, called up and fully paid:
31 May 07
No £
Ordinary shares of £0.01 each 21,000,000 210,000
============ ==========
During the period £1,500,000 was raised through the issue of 3,000,000 ordinary shares at 50 pence each for additional working capital.
COMMERCIAL GROUP PROPERTIES PLC
NOTE TO THE ANNOUNCEMENT
1 The unaudited six month interim report for the period to 31 May 2007 has been posted to shareholders, and is available on the Company's web-site www.cgpplc.com
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