Thameswey Developments Limited (TDL) Business Plan Covering the Period to

Transcription

1 Appendix 6 Thameswey Developments Limited (TDL) Covering the Period to October 2015 Address: 2 nd Floor, Gloucester Chamber, Jubilee Square, Woking, Surrey GU21 6GA Registered Address: The St Botolph Building, 138 Houndsditch, London, EC3A 7AR Company Registration No.: VAT Number: October 2015

2 Contents 1.0 Introduction Purpose of the Company History Current Operation... 6 Hoe Valley... 6 St. John s Memorial Hall... 6 Horsell Civic Space... 6 Woking Park 3G Pitch & Car Parking...7 Maybury Lodge Homes... 7 Old Library Site, Knaphill... 7 Other Projects... 7 Joint Ventures Financials/Budget... 8 Business Performance... 8 Financial Performance... 8 Schedule 1: Benefits to WBC and the Community... 9 Schedule 2: TDL Profit & Loss Account 2009 to Schedule 3: Balance Sheet October 2015 Page 2 of 11

3 1.0 Introduction 1.1 The attached Business Plan sets out the proposed arrangements for delivering the company s activities for the next year and seeks to define its strategic direction for the period up to the end of The Thameswey Developments Limited (TDL) plan deals with current development projects which were largely completed in 2014 with some running into The sale proceeds of Hoe Valley land were 50% received in 2013 and the balance was due in September This is now to be paid early November 2014 with penalty interest from the developer when the balance of the loan was repaid to WBC. 1.2 The structure of the Business Plan is consistent with last year and includes: A summary of the purpose and structure of the company Its history Scope of current operations A summary of principal business activities and highlights over the last 12 months Summary report of trading since 2009 and forecasts for the period up to and including 2015 There is no strategic plan other than that of taking instructions from WBC, Thameswey Group and Joint Venture companies. 1.3 This plan ensures that the focus of activity within each company is clearly aligned with those of Thameswey Limited, and ultimately with the Council s strategic objectives for Thameswey. The plan reflects the Board s views on the short term objectives set out in the proposed strategic plans. 2.0 Purpose of the Company 2.1 TDL was established in 2009 by its ultimate owner Woking Borough Council (WBC) to provide for a long-term strategy of property related development and investment in the Borough of Woking, particularly the Hoe Valley project. All projects have been in accordance with the instructions of the Council or as a contractor for Thameswey Housing Limited (THL) and its subsidiary Thameswey Guest Houses Ltd (TGHL). TDL acts as the property development vehicle of the Thameswey Group. 2.2 Since the last business plan Mark Rolt resigned as a Director on 3rd July 2015 to take up the position of Chief Operating Officer of the Thameswey Group following the retirement of John Thorp as Group Managing Director. Mark also continues in his position as a Strategic Director of WBC. Peter Bryant has been appointed as a director of Thameswey Group companies in his place. 2.3 The current board of directors are set out below: Terry Price Independent (Chairman) Sue Barham Officer Director Cllr Graham Cundy Councillor Director Cllr John Kingsbury Councillor Director Peter Bryant Officer Director 2.4 The above board composition meets the requirements of the Thameswey Group Protocols as approved by the Council on 8 th December In order to be quorate a 16 October 2015 Page 3 of 11

4 board meeting must have at least one independent, one Councillor and one officer Director in attendance. 2.5 TDL has use of the intellectual property owned by Thameswey Limited (TL) and is obliged to pay an annual licence fee of 1,000 payable to TL. In addition WBC established a framework for financial support by way of loan investment to enable TDL to make investments in Woking. WBC charges a margin over its borrowing costs for the loans to the Group; this benefits residents by contributing to the revenue income of WBC. 2.6 TDL has established three joint venture companies with Rutland Properties Ltd - Rutland (Woking) Ltd (RWL), Rutland Woking (Carthouse Lane) Ltd (RWCHL) and Rutland Woking (Westminster Court) Ltd (RWWCL) which has recently changed its name to Rutland Woking (Residential) Ltd (RWRL) and is owned 50% by RWL and 50% by Thameswey Housing Ltd (THL). Their financial results are not incorporated into the results of TDL but 50% of the results of RWL and RWCHL (being the percentage shareholding) are included in the Thameswey Limited consolidated financial results. Being a 75% subsidiary company 100% the results of RWRL will be consolidated into the Thameswey group accounts with the 25% minority interests removed. 2.7 The audited accounts of these companies are available with all the other Thameswey Group accounts on the Thameswey website RWRL was formed in December 2013 and Westminster Court was acquired on its behalf by RWL for 6m plus vat. RWRL has now completed the conversion of offices to 45 apartments and is now proceeding with 4 new build homes on the same site. 3.0 History 3.1 The Company commenced operations with the start of the Hoe Valley project in 2009 and all construction work was completed by mid The outcome of the project was remediation of contaminated land, a new country park, flood alleviation, a new state-ofthe-art community building for local community groups and a new centre for the Woking Sea Cadets. The housing land on the site was sold for 18.8m and completed on 23 rd December 2013 with a 50% payment and the balance due in September The Hoe Valley scheme had an overall budget of 43.7m and funding was made up of 23.7m fees and a loan of up to 20m. The 23.7m fee included the grant to WBC of 3.7m for the flood alleviation programme from the Environment Agency. Under the development agreement the profit of TDL was limited to a maximum of 1m so that the benefit of any savings can remain with WBC. 3.3 The scheme was completed on time and under budget. The main construction phase of the Hoe Valley contract finished in June A two year site management contract was put in place for grounds maintenance and the site has now been returned to WBC. A problem was identified last year with bank erosion of the Hoe stream and was found not to be covered by remedial works/snagging provisions. A number of quotes were obtained and the works completed in July 2013 for 66,000, (funded by TDL). Prompt attention to this issue saved additional costs had it not been addressed. 3.4 In September 2010 a Joint Venture (JV) was established between TDL and Rutland Properties Limited (RPL), a property development company based in Cranleigh, Surrey, to work together by acquiring and developing sites to their and WBC s mutual advantage. This JV operates through Rutland (Woking) Limited (RWL) which is owned 50% by TDL and 50% by RPL. The holding by TDL was financed by profits from TDL. 3.5 In September 2012 RWL purchased the Wandsworth Group electrical site in Sheerwater, Woking. The vendor remained in occupation under a rent agreement until March October 2015 Page 4 of 11

5 Planning permission was granted in December 2012 for an 82,000 sq-ft superstore. The site was sold following the completion of the Sheerwater link road by WBC in November The new Asda superstore opened in October 2014 and is having a positive impact on local businesses and providing jobs and apprenticeships in the area. This transaction enabled the company to pay a dividend of 350,000 to each JV partner in December 2013 which in turn enabled TDL to pay a dividend to Thameswey Limited in January In March 2013 RWCL purchased Cavendish House, Woking and 170 Walnut Tree Close, Guildford which had both been held as a joint bank security in the Rutland Group. RWCL then sold Cavendish House to BSDL (Fire Station) Ltd and 170 Walnut Tree was sold with planning permission to a developer in June The 50% profit share on these transactions is expected to be partially used for further developments and partially distributed to TDL. 3.7 In March 2011 the WBC Executive approved contracts for TDL to complete the St John s Memorial Hall, Link Leisure and Horsell Civic Space projects on behalf of the Council. The total approved budget (revised in June 2012) for the delivery of these projects was 5,037,582. Link Leisure and St John s Memorial Hall are both complete. Horsell Civic Space was completed in TDL developed a new eco-friendly hall in St John s Lye, replacing the previous, derelict building that was built in The St John s Memorial Hall was declared open by the Rt Hon Baroness Anelay of St John s DBE on the 31 st May The building will be a hub of the village and will host events and meetings for Scouts, Brownies and other groups. 3.9 On 21 March 2013 the Executive approved for TDL to construct a 3G artificial turf pitch and ancillary car park to the rear of Woking Leisure Centre in line with approved planning permission through a Service Contract. The development included four 5-a-side pitches to provide opportunity for smaller and larger groups to enjoy football activities together with access for community groups including clubs and schools. A new car park area now provides an additional 260 spaces to future proof parking provisions on the site. The improved lighting, CCTV and layout of the car park have improved community safety The 3G pitches and the car park were officially opened on the 5 th July The renovations were completed under budget by 212k. The contract provided for a fixed TDL profit of 75, High Street, Woking 3.11 THL instructed TDL to purchase a property at 20 High Street, Woking on its behalf in March The property is made up of a ground floor retail unit, which is under lease to the Council and two floors of office space. TDL has received permitted developments rights to convert the office space into four flats Due to the inclusion of the retail until for VAT purposes the property will remain in TDL and the flats will be leased to THL and sub-let as affordable housing Funding for the purchase was provided by THL and suitable agreements will be put in place between THL and TDL The conversion was completed at the end of 2014 and the flats were let in early October 2015 Page 5 of 11

6 Maybury Lodge Hotel 3.15 THL purchased Maybury Lodge Hotel in December 2012 with the intention of renovating the property in order to provide 16 rooms for temporary accommodation for those in housing need in the Borough. THL contracted TDL to renovate the property on its behalf. The renovations cost 900k and were completed in July, handed over 1 st August and operations commenced 1 st September The property has been transferred to Thameswey Guest Houses Limited because the business is considered to be standard rated for vat purposes. 4.0 Current Operation Hoe Valley 4.1 Following completion of the sale of the development land in December 2013, 9m of the loan was repaid to WBC in January 2014 in accordance with instructions from WBC. The balance of the loan was repaid November These sale proceeds and the associated VAT were the principle reasons for the high cash balance of 15m at the end of This returned to normal levels in early The defects period is ongoing and TDL is completing snagging on the site as and when required. 4.3 The report authorising the Hoe Valley project also identified a number of land disposals for residential use to help pay down the Council s investment in the scheme, collectively known as the mitigation sites. One of the sites identified was Blackness Lane. 4.4 TDL is currently working to dispose of the Blackness Lane site for residential use. An option to purchase was granted which was valid until July 2015, subject to planning permission. The site was expected to be sold for 1.6m less any sums payable in respect of the planning contributions but the developer has failed to secure planning permission and lost the appeal. However the inspector found no fault with the merit of the scheme and the appeal failed on a technicality. Therefore the contractor has agreed to re-submit addressing the Inspector s comments within the option period. If the resubmission again fails to obtain a consent an alternative site may be required to complete the funding plan. 4.5 As the mitigation sites are linked to the Hoe Valley contract, TDL s net profit on the Hoe Valley and mitigation sites was limited to 1.0m so the company will not show a profit on the sale of Blackness Lane. St. John s Memorial Hall 4.6 The development of the St John s Memorial is complete (see paragraph 3.8). There is a one year defects period contract in place and TDL will complete any snagging and defects as necessary. Horsell Civic Space 4.7 TDL was requested to complete a project to improve Horsell Village and provide a comprehensive range of community benefits including replacing the Guide/Scout Hut, providing disabled access to and improving the Village Hall, parking and landscaping. The project commenced in late 2011 and planning permission was granted. Work to build the community buildings was completed in early The landscape element of the project was delayed while an appeal was lodged against the plan to relocate the footpath within the site. Unfortunately the Planning Inspectorate upheld the appeal against the diversion and therefore the scheme needed to be redesigned. This has taken the landscaping out 16 October 2015 Page 6 of 11

7 of the original contract period and budget. The Council has approved a budget variation for TDL to complete the landscaping and TDL is currently out to tender for this work. Woking Park 3G Pitch & Car Parking 4.8 The development of the 3G Pitch and car park at Woking Park is complete (see paragraph 3.13). There is a one year defects period contract in place and TDL will complete any snagging and defects as necessary. Maybury Lodge Homes 4.9 THL has received planning permission to build four two bedroom houses on land behind Maybury Lodge Hotel and has contracted TDL for the development. The development is expected to cost 1.0m and the new homes will be completed by the end of Old Library Site, Knaphill 4.10 THL applied for planning permission for nine apartments and a memorial garden on the Old Library site in Knaphill. Planning permission was refused, however the company appealed and permission was granted. THL will contract TDL to develop the site at an estimated cost of 2.0m. Tenders are currently being analysed and it is hoped that construction will commence in early Other Projects 4.11 As further developments are identified they will be considered by the Executive or Council for approval prior to commencing operations. TDL will act on instructions from WBC The company will act as a development vehicle for the Thameswey Group Companies at the instruction of the companies. Schedule 1 shows the benefits to WBC and the community of TDL. Joint Ventures 4.13 Rutland Woking (Residential) Ltd (RWRL was formed 10 th December 2013 for the purpose of holding and developing the Westminster Court building in Old Woking. Permitted development rights were allowed, for conversion from offices to 45 units of housing. The property was purchased by RWL on behalf of RWRL for 6m on 12 th December The company was renamed in September 2015 to reflect the wider opportunities for residential development in partnership with TDL. The property will be transferred to Thameswey Housing when the development is complete The Joint Venture companies initiated the commencement of a Woking area fund for the Community Foundation for Surrey Charity. The fund focuses on local giving for local needs. It has been agreed to donate a percentage of the JV s profits to the fund subject to annual review. A formal launch of the Woking fund took place on 15 th November 2013 where local businesses, professionals, members of the community and Members were invited and encouraged to donate and assist with choosing appropriate beneficiaries The objective of the charity is to build up a capital fund that will be available in perpetuity to help meeting charitable needs. The fund will award grants to support: 16 October 2015 Page 7 of 11

8 Voluntary groups, charities, individuals or community services in need, within Woking; and Fund existing services or facilities and new initiatives. It can contribute to either capital costs such as funding new equipment or spport ongoing running costs for voluntary organizations. 5.0 Financials/Budget Business Performance 5.1 TDL was established to make a return for the shareholder; returns are assessed on a project by project basis. Financial Performance 5.2 Schedule 2 summarizes the financial performance of the Company for the period 2009 to 2014 and forecast results for 2015 to Dividends and consortium tax relief contributions are continuing from the JV companies in 2015 and Consortium relief will be paid direct from the relevant profitable JV company to a Thameswey Group company making a loss for tax purposes in the same period in accordance with directions from Thameswey Ltd. 5.4 Schedule 3 shows the balance sheets for the company from 2011 to 2016 inclusive. 5.5 The company is forecast to have accumulated profits of 1,007,000 by the end of 2015 having paid dividends to Thameswey Limited (TL) totalling 625,000 during 2014 & Dividends of 425k were paid in January 2014; further dividend payments will be subject to Board approval. 5.6 TL uses dividends received from subsidiary companies to support the Thameswey Group and to invest in projects which benefit the Borough of Woking. 5.7 The results for the joint venture companies are not consolidated into the TDL audited accounts but TDLs 50% share of the operating profits are included in the Thameswey Limited group consolidated accounts. 5.8 Each JV partner receives a project fee from the JV of 1% of the cost of sales of each project. This is to cover management time incurred in managing and completing the JV projects. Further information on both the JVs can be found in their respective business plans. REPORT ENDS 16 October 2015 Page 8 of 11

9 Schedule 1 Benefits to WBC and the Community 16 October 2015 Page 9 of 11

10 Schedule 2: TDL Profit & Loss Account 2009 to October 2015 Page 10 of 11

11 Schedule 3: Balance Sheet 16 October 2015 Page 11 of 11