REG - Local Shopping REIT - Half-year Report <Origin Href="QuoteRef">LSR.L</Origin> - Part 2
11/05/2017 07:07
- Part 2: For the preceding part double click ID:nRSK7953Ea
Total transaction costs 478 113 171
Loss on disposals after transaction costs (552) (216) (199)
Transaction costs as percentage of sales value 5.0% 2.8% 3.4%
5 Administrative expenses
Six months ended Six months ended Year ended
31 March 2017 31 March 2016 30 September 2016
£000 £000 £000
Investment manager fees* (513) (494) (963)
Legal and professional (98) (107) (348)
Tax and audit (56) (66) (99)
Remuneration Costs** (93) (33) (133)
Other (26) (62) (39)
Irrecoverable VAT on Administration expenses *** (55) (69) (128)
December 2016 General Meeting costs (125) - -
Total administrative expenses (966) (831) (1,710)
*Investment management fees have increased primarily due to a higher amount of sales fees payable on the back of the accelerated sales programme. The minimum investment management fee falls away in July 2017, and this will be reflected in the September 2017 financial statements (see note 15).
**Remuneration costs include £49,000 (30 September 2016: £ 66,000) in respect of the expensing of employee share options which vest in 2018 onwards or if liquidation targets are met. This amount has a corresponding entry in equity and has no impact on the Company's net assets now or in the future.
***The company's portfolio contains residential elements and commercial properties not opted for VAT. Accordingly, VAT on administrative expenses is not fully recoverable.
6 Net financing costs
Six months ended Six months ended Year ended
31 March 2017 31 March 2016 30 September 2016
£000 £000 £000
Interest receivable 4 12 25
Financing income excluding fair value movements 4 12 25
Fair value gains on derivative financial instruments (see note 13) - 536 2,294
4 548 2,319
Bank loan interest (545) (1,266) (1,924)
Amortisation of loan arrangement fees (67) (58) (117)
Head rents treated as finance leases (14) (17) (34)
Bank facility fees (12)
Financing expenses excluding fair value movements (638) (1,341) (2,075)
Payments to close swaps (see note 13) - - (1,758)
Financing expenses (638) (1,341) (3,833)
Net financing costs (634) (793) (1,514)
7. Taxation
From 11 May 2007, the Group elected to join the UK REIT regime. As a result, the Group is exempt from corporation tax on the profits and gains from its investment business from this date, provided it continues to meet certain conditions. Non-qualifying profits and gains of the Group (the residual business) continue to be subject to corporation tax. The directors consider that all the rental income post 11 May 2007 originates from the Group's tax exempt
business.
On entering the UK REIT regime, a conversion charge equal to 2% of the gross market value of properties involved in the property rental business, at that date, became due which was paid in full.
Due to the availability of losses no provision for corporation tax has been made in these accounts. The deferred tax asset not recognised relating to these losses can be carried forward indefinitely. It is not anticipated that these losses will be utilised in the foreseeable future.
8. Dividends
No dividends have been paid since December 2012.
9. Investment properties
Total
£000
At 1 October 2016 74,285
Additions 257
Disposals (9,570)
Reduction in head lease value (124)
Fair value adjustments (265)
Movement on investment properties held for sale 1,314
At 31 March 2017 65,897
The investment properties have all been revalued to their fair
value at 31 March 2017. For the Group as a whole, Allsop LLP, a
firm of independent chartered surveyors valued the group's
property portfolio at 31 March 2017 and 30 September 2016, and
at 31 March 2016 and 30 September 2015. On each of these dates
Allsop LLP performed a full valuation of 25% of the group's
properties (including site inspections) and a desktop valuation
of the remainder, such that all properties owned by the group
have been inspected and valued over the two-year period. All
properties acquired to each of these dates were also valued by
Allsop. These valuations are reviewed by the Company's
management team prior to finalisation. The valuations were
undertaken in accordance with the Royal Institute of Chartered
Surveyors Appraisal and Valuation Standards on the basis of
market value. Market value is defined as the estimated amount
for which a property should exchange on the date of valuation
between a willing buyer and a willing seller in an arm's length
transaction, after proper marketing wherein the parties had each
acted knowledgeably, prudently and without compulsion. A
reconciliation of the portfolio valuation at 31 March 2017 to
the total value for investment properties given in the
Consolidated Balance Sheet is as follows:
31 March 2017 31 March 2016 30 September 2016
£000 £000 £000
Portfolio valuation 65,731 76,674 75,308
Investment properties held for sale (277) (840) (1,590)
Head leases treated as investment properties held under finance 443 572 567
leases in accordance with IAS 17
Total per Consolidated Balance Sheet 65,897 76,406 74,285
10. Interest-bearing loans and borrowings
31 March 2017 31 March 2016 30 September 2016
£000 £000 £000
Non-current liabilities
Secured bank loans 40,667 52,527 49,821
Loan arrangement fees (375) (244) (186)
40,292 52,283 49,635
Current liabilities
Current portion of secured bank loans 1,668 956 907
All bank borrowings are secured by fixed charges over certain of the Group's property assets and floating charges over the companies which own the assets charged.
The loans are amortised by 1% of the balance outstanding on a quarterly basis, and the final balance is repayable in 2019.
11. Earnings per share
Basic earnings per share
The calculation of basic earnings per share was based on the profit attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding, calculated as follows:
(Loss)/Profit attributable to ordinary shares
Six months ended Six months ended Year ended
31 March 2017 31 March 2016 30 September 2016
£000 £000 £000
(Loss)/Profit for the financial period (23) 423 631
Weighted average number of shares
31 March 2017 31 March 2016 30 September 2016
Number Number Number
000 000 000
Issued ordinary shares 91,670 91,670 91,670
Treasury shares (9,164) (9,164) (9,164)
Weighted average number of ordinary shares 82,506 82,506 82,506
Diluted earnings per share
There is no difference between the basic and diluted earnings per share.
12. Net asset value (NAV)
The number of shares used to calculate net asset value per share is as follows:
31 March 2017 31 March 2016 30 September 2016
Number Number Number
000 000 000
Number of shares in issue 91,670 91,670 91,670
Less: shares held in Treasury (9,164) (9,164) (9,164)
82,506 82,506 82,506
31 March 2017 31 March 2015 30 September 2015
£000 £000 £000
Net assets per Consolidated Balance Sheet 35,575 35,275 35,549
Net asset value per share £0.43 £0.43 £0.43
13. Derivative financial instruments
Derivative financial instruments held by the Group were interest rate swaps used to manage the Group's interest rate exposure. These were fully paid down in the year to 30 September 2016. The Company continues to monitor the interest rate environment, and may enter into some hedging arrangements in the future. However, given the currently low and stable rates and the Company's sales programme, this would not be advantageous at present.
14. Related parties
There have been no transactions with related parties which have materially affected the financial position or performance of the Group during the current or previous period nor have there been any changes in related party transactions which could have a material effect on the financial position or performance of the Company during the first six months of the current financial year.
15. Significant contracts
With effect from 22 July 2013 the Company entered into a management agreement with Internos Global Investors Limited ("Internos"). Under this agreement, the Company pays to Internos:
1. An annual management fee of 0.70% of the gross asset value of the portfolio, subject to a minimum fee of £1m in each of the first two years, £0.95m for the third year and £0.9m for the fourth year. This minimum falls away in July 2017.
2. An annual performance fee of 20% of the recurring operating profits above a pre-agreed target recurring profit.
3. Fees for property sales as follows:
Up to £50m nil
£50m - £150m 0.5% of sales
Over £150m 1% of sales
4. A terminal fee of 5.7% of cash returned to the Company's shareholders in excess of 36.1 pence per share per annum from the Effective Date outside of dividend payments (the "Terminal Fee Hurdle"). The Terminal Fee Hurdle rises by 8% per annum after the first year but reduces on
- More to follow, for following part double click ID:nRSK7953EcRecent news on Alina Holdings
See all newsREG-Alina Holdings PLC Alina Holdings PLC: Notice of AGM
AnnouncementREG-Alina Holdings PLC Alina Holdings PLC: Annual Financial Report to 31 December 2024
AnnouncementREG-Alina Holdings PLC Alina Holdings PLC: Equity Placing - Subscription - Related Party Transaction
AnnouncementREG-Alina Holdings PLC Alina Holdings PLC: 2024 Interim Results
AnnouncementREG-Alina Holdings PLC Alina Holdings PLC: Results of AGM
Announcement