31 Jan
2001

Proforma full year financial statement and dividend announcement

Full-year financial statement on consolidated results for the year ended 31 December 2000.
These figures have not been audited.

    Group Company
- - S$'000 % S$'000 %
- -. 2000 1999* Change 2000 1999^ Change
               
1.(a) Turnover 298,266 195,831 +52 69,989 23,346 +200
               
1.(b) Investment income 0 0 0 44,000 0 nm
               
1.(c) Other income including interest income 11,002 12,243 -10 501 6,971 -93
               
2.(a) Operating profit before income tax, minority interests, extraordinary items, interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items 117,113 39,933 +193 50,994 11,490 +344
               
2.(b)(i) Interest on borrowings (61,716) (34,165) +81 (4,829) (4,893) +1
               
2.(b)(ii) Depreciation and amortisation (32,304) (24,554) +32 (4,003) (2,007) +99
               
2.(b)(iii) Foreign exchange gain/(loss) (6,361) 2,058 -409 1,219 256 +376
               
2.(c) Exceptional items 0 0 0 0 0 0
               
2.(d) Operating profit before income tax, minority interests and extraordinary items but after interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items 16,732 (16,728) nm 43,381 4,846 +795
               
. . 2000 1999* Change 2000 1999^ Change
               
2.(e) Income derived from associated companies 4,905 4,797 +2 0 0 0
               
2.(f) Less income tax (19,725) (10,992) +79 (11,821) (1,268) +832
               
2.(g)(i) Operating profit after tax before deducting minority interests 1,912 (22,923) nm 31,560 3,578 +782
               
2.(g)(ii) Less minority interests 2,877 7,312 -61 0 0 0
               
2.(h) Operating profit after tax attributable to members of the company 4,789 (15,611) nm 31,560 3,578 +782
               
2.(i)(i) Extraordinary items 27,982 (162,796) nm 13,171 (61,520) nm
               
2.(i)(ii) Less minority interests 0 0 0 0 0 0
               
2.(i)(iii) Extraordinary items attributable to members of the company 27,982 (162,796) nm 13,171 (61,520) nm
               
2.(i)(iv) Transfer to/from Exchange Reserve 0 0 0 0 0 0
               
2.(i)(v) Transfer to Capital Reserve 0 0 0 0 0 0
               
2.(i)(vi) Transfer to Reserve Fund 0 0 0 0 0 0
               
2.(j) Operating profit after tax and extraordinary items attributable to members of the company 32,771 (178,407) nm 44,731 (57,942) nm

 

Group Figures
    Latest year Previous year
3.(a) Operating profit/(loss) [2(g)(i) above] as a percentage of turnover [1(a) above] 0.60% (11.70)%
       
3.(b) Operating profit [2(h) above] as a percentage of issued capital and reserves at end of year 0.40% (1.30)%
       
3.(c) Earnings per ordinary share for the year based on 2(h) above after deducting any provision for preference dividends:-    
       
3.(c)(i) Based on existing issued share capital # 0.31 (1.72)
       
3.(c)(ii) On a fully diluted basis 0 0
       
3.(d) Earnings per share based on 2(j) above:-    
  (i) Based on existing issued share capital # 2.12 (19.71)
       
  (ii) On a fully diluted basis 0 0
       
3.(e) Net tangible asset backing per ordinary share @ 82.3 78.8
       
# Net earnings per share calculation is based on the weighted average number of 1,549,330,092 shares of S$0.20 each (1999: 905,369,828 shares) in issue during the year.

@ Net tangible asset per share calculation is based on 1,549,330,092 shares outstanding as at 31 December 2000 (1999: 1,549,288,461 shares).

* The merger of Ascott and Somerset constitutes a uniting of interest which meets the criteria set out in Section 69B of the Companies Act and the Statement of Accounting Standard No. 22 "Accounting for Business Combinations". Accordingly, the pooling of interests has been adopted in the consolidated financial statements of the Merged Group for the year ended 31 December 2000. The financial statements for the year ended 31 December 1999 has been restated to provide comparability and in accordance with merger accounting.
Re-presented on a 12-month basis for comparability. In 1999, the company changed its financial year-end from June to December.

 

- - Group Company
- - S$'000 % S$'000 %
- - 2000 1999* Change 2000 1999^ Change
-              
4.(a) Sales reported for first half year 113,736 91,178 +25 11,757 11,644 +1
               
4.(b) Operating profit [2(g)(i) above] reported for first half year 7,376 (9,932) +174 277 3,197 -91
               
4.(c) Sales reported for second half year 184,530 104,653 +76 58,232 11702 +398
               
4.(d) Operating profit/(loss) [2(g)(i) above] reported for second half year (5,464) (12,991) +58 31,283 381 nm

 

5.(a) Amount of any adjustment for under or overprovision of tax in respect of prior years

  • The tax figure is determined on the basis of tax effect accounting using liability method and is applied to all significant timing differences. It contains an overprovision of S$320,790 in respect of prior year for the Group.
5.(b) Amount of any pre-acquisition profits
  • No pre-acquisition profits are included in the results of the Group for the year ended 31 December 2000.

 

 

 

 

 

 

 

 

  •  

 

 

 

 

 

 

 


 

5.(c) Amount of profits on any sale of investments and/or properties

Sale of investments/properties $Profit/(Loss)
31 December 2000
 
$2,300,000.00
 
  • NIL

5.(d) Any other comments relating to Paragraph 5

  • NIL

6. Segmental Results

  Turnover Profit before Interest And Tax1
  2000
S$'000
1999*
S$'000
2000
S$'000
1999*
S$'000
By Business Segments        
Serviced Residence 118,750 70,711 25,554 10,563
Retail 78,450 39,262 48,564 15,883
Residential 82,599 80,498 10,793 (457)
Others 18,467 5,360 (6,463) (8,552)
  298,266 195,831 78,448 17,437
         
By Region        
Within Singapore 136,923 70,391 79,306 19,210
Asia (excluding Singapore) 57,626 45,002 (3,446) (9,170)
Australia and New Zealand 88,736 32,832 (2,738) 554
United Kingdom 14,981 47,606 5,326 6,843
  298,266 195,831 78,448 17,437
 
The Asia operations refer to the Group's operations in Malaysia, People's Republic of China and Vietnam.

1 Before taking into account share of associated companies and joint venture pre-tax profit (in Singapore, Australia, Indonesia, Malaysia, Vietnam and Myanmar), amounting to S$4.9 million in 2000 (vs. pre-tax profit of S$4.8 million in 1999).


7.(a) Review of the performance of the company and its principal subsidiaries
  • Turnover of the Company rose by 200% to reach S$70 million and pre-tax profit increased by S$38.5 million compared to 1999. This was mainly due to dividend income received from a subsidiary.

    The extraordinary gain at the Company level relates to the write-back of the provision made for amounts due from subsidiaries.

    The Group's turnover jumped by 52% as a result of acquisitions made in the second half of last year comprising properties acquired from Pidemco Land Limited, now known as CapitaLand Limited, properties of the Stamford Group, the remaining 60% interest in Junction 8 and full year operations at Somerset Grand in Shanghai and Somerset Grand Metropolis in Auckland.

    The Group's operating profit increased by S$77.2 million this year as compared to that in 1999. Full year contribution from the Singapore based properties acquired from Pidemco Land Limited, the Stamford Group properties and Junction 8, improved performance of Ascott Singapore, Ascott Mayfair, Ascott Kuala Lumpur, Somerset Compass, Somerset Liang Court, and the continued contribution from the sale of residential projects in London and Sydney were the main drivers for the improved performance. This was despite continued losses of Somerset Grand Shanghai and Somerset Grand Metropolis, partially offset by S$6.5 million written-back to profit and loss account of provision for foreseeable losses for two Singapore residential projects. Consequently the Group achieved a pre-tax profit of S$21.6 million as compared to a pre-tax loss of S$11.9 million in 1999 after accounting for increase in interest, and depreciation and amortisation costs by S$27.6 million and S$7.8 million respectively.

    The Group's interest expense increased by S$27.6 million due mainly to increased borrowings and borrowings on completed properties, where interest was previously capitalised but is now charged to the profit and loss accounts when such properties commence operations.

    The Group's depreciation and amortisation increased by S$7.8 million due mainly to full year operations of Somerset Grand Shanghai and Masters Golf Course and alignment of depreciation rates of Ascott to those of its parent company.

    The Group suffered an exchange loss of S$6.4 million for the current year compared to an exchange gain of S$2.1 million last year. This was mainly due to the weakening of the Sterling Pound and the Australian Dollar against the Singapore Dollar.

    The Group's share of associated companies' profits increased marginally by S$0.1 million due to the increase in profits recognised by an associated company from completed sale of units in a residential project in London, offset by Junction 8 which no longer contributes as an associated company since it became a wholly-owned subsidiary in December 1999. There was also a provision of S$2 million written back in the first half of last year for the development property held by an associated company. Futhermore, our share of the losses of Stamford Court, Ho Chi Minh was higher due to a full-year operation this year versus two months last year.

    The Group's effective tax rate remained high because of non-deductible interest expenses (related to the funding of investments that are not yet revenue-generating), non-deductible depreciation expense (on leasehold land and building), losses incurred by some subsidiaries and associated companies which cannot be offset against profits earned by other companies in the Group.

    The Group's extraordinary gain of S$28 million relates mainly to the capital gain arising from the sale of an investment property in London, a write-back of provisions in respect of early termination costs for the KLCC Food Court which did not materalise, a write-back of provision made for diminution in value of investment in a Malaysia-based associated company and a write-back of provision made on loan to a former Indonesia-based associate, which is now a subsidiary as this provision is now no longer required since its results are now accounted for as a subsidiary. With the adoption of the parent company's accounting policy on treatment of revaluation differences, which is to take revaluation gains or losses pertaining to a property to the profit and loss account on the property's disposal, the loss on disposal of Springleaf Tower of S$27.6 million (which was sold to its parent company in 1999) was reflected as an extraordinary loss in 1999.

    The Group's profit attributable to shareholders stood at S$32.8 million, as against an attributable loss of S$178.4 million for 1999.
7.(b) A statement by the Directors of the Company on whether "any item or event of a
material or unusual nature which would have affected materially the results of
operations of the Group and Company has occurred between the date to which the
report refers and the date on which the report is issued". If none, to include a
negative statement.


In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen since the end of the financial year to the date of this report which would affect substantially the results of the Group or of the Company.

8. Commentary on current year prospects
  • The Group has successfully completed the merger, which has strengthened the Group's balance sheet and positioned the Group as a dominant serviced residence company in the Asia-Pacific region. As its newer properties become established in their respective markets, the performance of the Group's core serviced residence business, in terms of occupancy and rental rates, is expected to continue to improve over last year. During this financial year, the Group is expected to benefit from a lower interest rate environment as well as cost-savings through scale economies and the implementation of synergy initiatives such as clustering of property operations. Planned divestment of the retail and other non-core properties will allow the Group to realise capital appreciation, reduce its borrowings, lower interest expenses and provide additional funds to grow the serviced residence business.
  • Based on the above, the directors believe that the Group should achieve a better attributable profit for the financial year 2001.


9. Dividend

(a) Present Period
Name of Dividend First & Final    
Dividend Type Ordinary    
Dividend Rate 5 % per ordinary share less tax    
Par value of shares 20 cents    
Tax Rate 25.5%    
       
(b) Any dividend declared for the previous corresponding period? None  
(c) Total Annual Dividend
-      
- Latest Year (S$'000) Previous Year (S$'000)  
       
Ordinary 11,543 0  
Preference 0 0  
Total: 11,543 0  


10. Balance sheet

  COMPANY GROUP
  2000
S$'000
1999^
S$'000
2000
S$'000
1999*
S$'000
Property, Plant and Equipment 3,200 5,506 555,021 418,299
Investment Properties 343,300 317,510 1,552,428 1,466,673
Properties under development 0 0 216,472 203,822
Interests in Subsidiaries 321,721 82,355 0 0
Interests in Associated Companies 2,985 2,928 23,805 36,274
Interest in Joint Ventures 0 0 43,587 12,635
Long-term Investments 0 0 11,683 11,546
Expenditure carried forward 9 19 6,008 7,557
Current Assets 127,585 32,391 420,410 471,800
Current Liabilities (115,365) (178,873) (722,354) (871,526)
Non-Current Liabilities (151,716) (1,716) (711,142) (442,548)
  531,719 260,120 1,395,918 1,314,532
         
Representing:-        
Share Capital 309,866 70,491 309,866 309,866
Share Premium 51,346 52,344 287,088 291,198
Capital Reserves 129,595 129,420 769,267 741,106
Foreign Currency Translation Reserve (141) 0 (6,366) (14,277)
Unappropriated Profit/(Accumulated Loss) 41,053 7,865 (78,217) (99,445)
Share Capital and Reserves 531,719 260,120 1,281,638 1,228,448
Minority Interest 0 0 114,280 86,084
  531,719 260,120 1,395,918 1,314,532
         

11. Details of any changes in the company's issued share capital
    • Since the last financial year ended 31 December 1999, the issued and paid-up capital of the Company increased by S$239,375,404 to S$309,866,018 due to the issue of 1,196,877,022 ordinary shares of S$0.20 each at par to the shareholders of Somerset in exchange for their shares in Somerset, pursuant to the scheme of arrangement for the merger of the Company and Somerset.

      At an Extraordinary General Meeting held on 23 October 2000, the members of the Company approved The Ascott Share Option Plan (the "Plan").

      Under the Plan, options for 16,705,000 unissued shares of S$0.20 each were granted during the year at the subscription price of S$0.37:

 

Option Category No. of Holders Option Period No. of shares Under Option
Group executives 254 20 December 2001 to 19 December 2011 13,839,000
Parent group executives 144 20 December 2001 to 19 December 2011 1,816,000
Non-executive directors 9 20 December 2001 to 19 December 2006 1,050,000
  407   16,705,000

No shares of the Company were issued during the financial year under review by virtue of the exercise of Options to take up unissued shares of the Company. Details of the Plan will be set out in the Directors' Report for the year ended 31 December 2000.


12. Comparative figures of the group's borrowings and debt securities

(a) Amount repayable in one year or less, or on demand
       
As at 31.12.00 As at 30.06.00
       
Secured Unsecured Secured Unsecured
       
S$516,225,000 S$1,330,000 S$550,602,000 S$185,671,000
       
       


(b) Amount repayable after one year

  • As at 31.12.00 As at 30.06.00
    Secured Unsecured