The Directors present their annual report and the financial
statements of the Group for the year ended 31st December 2006.
Principal activities
The principal activities of the Group during the year were property development,
investment and trading.
Business review
A review of the Group’s operations, the current state
of the business and future prospects are contained in the Chairman’s
statement and Review of operations and should be read in conjunction with
this report. The information which comprises the Business review as required
by Section 234ZZB of the Companies Act 1985 may be found in the Review of
operations on pages 12 to 20 and in the Sustainability report on pages 22
and 23.
Results and dividends
The profit for the financial year attributable to shareholders amounted
to £23,559,000 (2005: £20,090,000). An interim Ordinary dividend
of £828,000 representing 2.25 pence per Ordinary share was paid on
26th October 2006 (2005: £778,000, representing 2.12 pence per Ordinary
share). The Board recommends a final Ordinary dividend of 4.50 pence per
Ordinary share amounting to £1,832,000 be payable on 6th July 2007
to shareholders on the register at 8th June 2007 (2005: £1,562,000
representing 4.25 pence per Ordinary share).
Group structure
Details of principal subsidiary undertakings are disclosed in note 12(d).
Share capital
On 29th November 2006, 3,700,000 Ordinary shares were allotted following
Placing at 625 pence per Ordinary share, raising gross proceeds of £23,125,000
principally to fund the Company’s share of the consideration payable
for the purchase of a 1.4 million sq. ft. site at Curzon Park, Birmingham
in an equal joint venture with Grainger PLC.
Three resolutions relating to share capital will be proposed as Special
Business at the forthcoming Annual General Meeting. The full text of the
resolutions can be found in the enclosed Notice of Annual General Meeting.
Special Resolution 8: The current authority for the Company to purchase
its own shares expires at the conclusion of the forthcoming Annual General
Meeting. A special resolution is to be proposed at the Annual General Meeting
to authorise the repurchase of up to 6,066,000 Ordinary 50 pence shares,
representing approximately 14.9 per cent of the Company’s issued share
capital. The Directors have no present intention of making any market purchases
of the Company’s shares, but if they considered such action would
enhance net assets or earnings per share, they would consider exercising
this authority. As at the date of this report, the Company has an unexpired
authority to repurchase 5,473,000 Ordinary shares.
Ordinary Resolution 9: The Directors will seek authority to allot relevant
securities pursuant to Section 80 of the Companies Act 1985 up to a maximum
aggregate nominal value of £7,058,999 being equal to one-third of
the issued Ordinary share capital of the Company, together with the number
of share options outstanding.
Special Resolution 10: The Directors seek authority to renew the disapplication
of shareholders’ pre-emptive rights under Section 89 of the Companies
Act 1985 up to an aggregate nominal value of £1,017,791 being equal
to 5.0 per cent of the issued Ordinary share capital of the Company. In
the event that it is used, no more than 7.5 per cent of the issued share
capital will be issued on a non pre-emptive basis in any three-year period.
Share option schemes
During the year, options over 40,000 shares were granted under the Executive
Share Option Plan 2005 and 25,368 options under the Company’s Save
As You Earn Option Plan 2005. Further details of the Share Option Schemes
are contained in note 18 and in the Remuneration report.
Directors
The Directors serving during the year were as follows:
Roy Dantzic
Michael Marx
Julian Barwick
Matthew Weiner
Victoria Mitchell
Michael Soames |
William Grant – resigned
11th May 2006
Paul Manduca
Paul Willis – resigned
6th March 2007 |
David Jenkins was appointed to the Board as a Non-executive Director on
1st February 2007. Roy Dantzic, who joined the Board on 21st May 2003 and
was elected Chairman on 17th September 2003 has resolved to stand down at
the 2007 Annual General Meeting. David Jenkins will be appointed Chairman
as from this date, provided he is elected at the Annual General Meeting.
The Directors retiring by rotation at the Annual General Meeting are Michael
Marx and Matthew Weiner, who being eligible, offer themselves for re-election.
Directors’ service contracts and interests
in the Company’s shares
The unexpired period of Directors’ service contracts and the interests
of the Directors who were in office as at 31st December 2006 are fully disclosed
in the Remuneration report on pages 68 to 75.
Directors’ and officers’ liability
insurance
The Company maintains Directors’ and officers’ liability insurance,
which is reviewed annually and is considered to be adequately insured.
Other substantial interests
At the date of this report, the Directors have been notified of the following
interests in 3.0 per cent or more of the Company’s issued share capital:
| |  | |
| Number of shares | % |
| F & C Asset Management PLC |
4,494,071 |
11.04 |
| Aberdeen Asset Management PLC |
3,194,000 |
7.85 |
| BT Pension Scheme Trustees Limited as |
|
|
| trustee of the BT pension scheme |
2,241,370 |
5.50 |
| Standard Life Group PLC |
2,148,613 |
5.28 |
| Legal & General Group PLC |
1,423,795 |
3.49 |
| Prudential PLC Group of Companies |
1,401,086 |
3.44 |
| Stichting Pensioenfonds ABP | 1,305,000 | 3.21 |
Financial risk management
Disclosures in respect of financial risk management objectives and exposures
are set out in note 16.
Charitable and political donations
Charitable donations during the year, principally to local charities serving
the communities in which the Group operates, were £26,100 (2005: £24,800).
No political donations were made during the year (2005: £Nil).
Disabled employees
It is the Group’s policy to encourage good employment practices with
regard to the disabled in accordance with Government recommended guidelines.
Payment policy
Amounts due to suppliers are settled promptly within their terms of payment,
except in cases of dispute. The number of creditor days outstanding for
the Company at 31st December 2006 was two days (2005: one day).
Auditors
A resolution to appoint Ernst & Young LLP as the Company’s auditors
will be proposed at the forthcoming Annual General Meeting.
Disclosure of information to auditors
Each Director has confirmed that:
1. So far as he/she is aware, there is no relevant audit information of
which the Group’s auditors are unaware, and;
2. He/she has taken all the steps that he/she ought to have taken as a
Director in order to make themselves aware of any relevant audit information
and to establish that the Group’s auditors are aware of that information.
This confirmation is given in accordance with Section 234ZA of the Companies
Act 1985.
Approved by the Board of Directors
Signed on its behalf by:
S A Lanes
Secretary
30th March 2007
