Conygar Investment : Interim Report 2021

THE CONYGAR INVESTMENT

COMPANY PLC

INTERIM REPORT

Six months ended 31 March 2021

The Conygar Investment Company PLC

Interim results

for the six months ended 31 March 2021

Summary

• Net asset value of £86.7 million (164.0p per share).
• Total cash deposits of £23.9 million (45.3p per share).
• No debt and no borrowings.
• Development commenced for the first phase of the mixed-use development at The Island Quarter, Nottingham.
• Detailed planning applications submitted in January 2021 and May 2021 for the next two phases of The Island Quarter development which include a hotel, to be managed by Intercontinental Hotels Group, residential rental apartments, co-working space and a 702 bed student accommodation scheme.
• £1.2 million write down in the value of the retail park at Cross Hands, Carmarthenshire as a result of the continuing negative investor sentiment towards this sector.
• Bought back 0.74 million shares (1.4% of ordinary share capital) at an average price of 109.0p per share.

Group net assets as at 31 March 2021
		Per share
	£'m	p
Investment properties	42.7	80.9
Development properties	19.5	36.9
Cash	23.9	45.3
Other	0.6	0.9
	---------	---------
Net assets	86.7	164.0
	---------	---------

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The Conygar Investment Company PLC

Interim results

for the six months ended 31 March 2021

Chairman's and Chief Executive's statement

Results summary

We present the Group's results for the period ended 31 March 2021.

More than a year on from its start, the UK and global economies continue to be severely impacted by the unprecedented and, all too often, tragic effects of COVID-19. However, the rapid rollout and continuing success of the UK's vaccination programme, the significant reduction in infection and hospitalisation rates during the last few months and the steps taken along the roadmap to ease lockdown restrictions should allow us to cautiously look forward to an improvement in business confidence during 2021, albeit with the pace of recovery determined to a large extent by the response to the significant social and economic changes we have all experienced this past year.

The net asset value was £86.7 million at 31 March 2021 (31 March 2020: £95.3 million; 30 September 2020: £88.8 million) and the loss after tax for the six month period was £1.4 million (period ended 31 March 2020: loss of £1.5 million, year ended 30 September 2020: loss of £8.0 million). The loss for the current period includes a £1.2 million write down in the value of our retail park at Cross Hands, Carmarthenshire, as a result of the significant impact of COVID-19 on the retail sector compounded by the strong growth in online shopping both before and, to an even greater extent, throughout the pandemic.

We have continued to support our customers, staff and tenants whenever possible including, in a number of cases, the deferral of rent for some of our tenants most negatively impacted by COVID-19. Rent collection rates have been reasonably strong at 90% for December 2020 with 82% collected to date for March 2021.

Despite the challenges posed by the further lockdown in January 2021, the Group has made steady progress on its property portfolio over the six month period, the highlights of which are set out below.

At The Island Quarter, Nottingham, work has begun on site for the first phase of this exciting and substantial development comprising a 21,500 square foot food and beverage led building in an enhanced canal-side setting with associated public realm. This initial phase, which is scheduled for completion by the end of March 2022, will, we believe, open up the previously underused canal-side part of the city and bring the local residents back to The Island Quarter, thereby further unlocking the potential of the remaining site.

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In January 2021, a detailed planning application was submitted for the first major phase of The Island Quarter's mixed-use scheme which includes a hotel, to be managed by the Intercontinental Hotels Group, 247 residential rental apartments, 32,000 square feet of flexible co-working space, plus an extensive food and beverage area. It is hoped that planning permission for this phase will be achieved later in 2021.

After the half year end, in May 2021, a detailed planning application was also submitted for a 702 bed student accommodation scheme which we hope to have operational for the September 2023 university intake.

We continue to progress the designs for subsequent phases of The Island Quarter and are advancing our discussions on financing options for the development which we hope to make further announcements on later in the year.

At Haverfordwest in Pembrokeshire, construction of a spine road and associated drainage commenced in January 2021, which should be completed later this year, to open up the site for future development.

The 31 March 2021 revaluation of our retail park at Cross Hands in Carmarthenshire, at £15.85 million, reflects a 3.9% reduction in value since the year end.The retail sector has continued to suffer from forced closures and trading restrictions with investor sentiment remaining negative towards this sector. However, the park at Cross Hands has been able to trade well throughout the pandemic reflecting the large proportion of 'essential' high quality tenants. Our unpaid rents, which have been provided for in these financial statements, arose primarily from Peacock Stores Limited who occupy 5,200 square feet at Cross Hands and who went into administration in November 2020.

At Cross Hands, we completed the construction of the 2,750 square foot Burger King restaurant and drive-through which commenced trading in December 2020. A change of use application was also submitted, to be determined in the coming weeks, to progress the letting to a gym operator, with whom we exchanged contracts in 2020, for a 3,400 square foot unit.

At the Holyhead Waterfront scheme in Anglesey, we continue to work on the detailed design and reserved matters application in tandem with the marine consenting process and expect to submit both in the next few months.

In April 2019, we exchanged a conditional contract, on a subject to planning basis, to dispose of our industrial property in Selly Oak, Birmingham. An amended planning application for this student accommodation scheme was submitted by the purchaser in January 2021 and we are awaiting its determination.

During the period the Company's development sites at King's Lynn, Norfolk, and Fishguard lorry stop in Pembrokeshire were sold for total net proceeds of £1.0 million resulting in a combined net profit of £0.4 million.

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Share buyback

During the six-month period ended 31 March 2021, the Group acquired 740,000 ordinary shares, representing 1.4% of its ordinary share capital, at a cost of £0.81 million which equates to an average price of 109.0p per share. We continue to see the buyback authority as a useful capital allocation tool and will continue to use it when we believe the stock market value differs too widely from our view of the intrinsic value of the Company.

Board change

We are pleased to welcome David Baldwin to the Board. David was appointed as Finance Director on 10 May 2021 having been with the Company for five years as Financial Controller and also since 6 April 2020 as Company Secretary.

Outlook

After 15 months of COVID-19 we expect the country slowly to return to a semblance of normality, boosted by the extraordinary success of the vaccinations.We have no idea how the huge debt hang-over from government intervention will affect the future but we think trends such as working from home and retail moving online will have been accelerated. We continue to stick to what we know. The Island Quarter project at Nottingham has significantly progressed along with the majority of our other assets and we continue to operate with sensible overheads, no debt and cash reserves.We anticipate real progress will be made over the next year.

N J Hamway	R T E Ware
Chairman	Chief Executive
10 May 2021

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