Capital & Regional - Half Year Results to 30 June 2024
01/08/2024 07:00
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RNS Number : 6815Y Capital & Regional plc 01 August 2024
1 August 2024
Capital & Regional plc
("Capital & Regional" or "C&R" or "the Company" or "the Group")
Half Year Results to 30 June 2024
Capital & Regional (LSE: CAL), the UK convenience and community focused
shopping centre REIT announces its half year results to 30 June 2024.
Highlights for the period
· 17.1% increase in Net Rental Income to £13.7 million ("NRI")
· 0.8% increase in like-for-like valuations
· 48 new lettings and renewals, compared to 42 in the 6 months to June
2023, at a combined average premium of 8.8% to previous rent(2) and 14.1% to
ERV(2)
· 17.1% increase in Adjusted Profit(1) to £8.2 million
· 3.6% increase in proposed interim dividend of 2.85p per share
Lawrence Hutchings, Chief Executive, comments:
"We have delivered another positive set of results during the first half of
2024, with our proven community strategy continuing to support our progress.
Against what at times has been a challenging economic backdrop our team has
been able to capitalise on the continued strong levels of demand from
retailers for space within our centres, particularly those in London. This
is reflected in the strong leasing momentum we have maintained.
"Over the six months to the end of June not only did we complete more lettings
and renewals than over the same period last year, we also achieved these at
both a higher average rent per lease and average premium to the previous rent.
The rapid re-leasing of all three of our former Wilko units to B&M in the
first few months of 2024 is one of the most notable examples of the demand for
space in our centres from retailers that need to be at the heart of local
communities, which is further evidenced by the strong start we have made to
the second half of the year. We also continue to make significant progress
on our repositioning masterplan in Ilford where we have agreed terms on two
major leases encompassing 44,000 sq ft of floorspace, generating approximately
£0.5 million of additional income. The expanded and relocated TK Maxx is
trading well and our NHS community healthcare centre is now open on the upper
level.
"We have seen a further period of stable valuations and successfully
integrated Gyle shopping centre into our portfolio where the initiatives we
have undertaken since acquisition last September have already led to a 5%
increase in value.
"Notwithstanding the previously announced and ongoing corporate activity,
Capital & Regional remains well placed to continue to deliver on its
successful community strategy to drive income growth and value in support of
progressive shareholder dividends."
Operational metrics remain robust demonstrating the continued appeal of
C&R's community centres
· 48 new lettings and renewals (June 2023: 42), at a combined
average premium of 8.8% to previous rent2 and 14.1% to ERV2.
· Occupancy improved to 93.9% (December 2023: 93.4%) due to re-letting
the three former Wilko units in our portfolio to B&M.
· 21.1 million shopper visits in the first half of 2024.
· Rent collection 99.2% for the first half of 2024, improving
from 98.4% at the 2023 Interim results.
Occupier led demand driving rental and earnings growth
· 17.1% increase in Net Rental Income ("NRI") to £13.7 million (June
2023: £11.7 million) reflecting impact of the Gyle acquisition which has been
successfully integrated into the portfolio with a 21% increase in statutory
revenue to £34.5 million (June 2023: £28.5 million). A further £1.0
million of contracted rent is due to convert to passing rent in the next 12
months as occupiers' rent-free periods end.
· 19% growth in Snozone's EBITDA1 to £1.9 million (June 2023: £1.6
million) reflecting revenue growth at both the UK and Madrid operations.
· 17.1% increase in Adjusted Profit1 to £8.2 million (June 2023:
£7.0 million).
· IFRS Profit for the period of £4.5 million (June 2023: £6.1
million).
· Net £3.1 million invested during the period including completion
of the new NHS community healthcare centre in Ilford that opened in May 2024
and remerchandising of the former WH Smith in Wood Green, creating new units
for Pure Gym, Wendy's and Wingstop that have opened in recent weeks.
· The first phase of the Walthamstow residential development undertaken
by Long Harbour, creating 495 Build to Rent apartments in two residential
towers and providing a new captive audience of shoppers for our Walthamstow
centre, is entering its final stages with the development due to complete in
early 2025.
· 0.8% increase in like-for-like valuations over 2023 to £374.9
million (December 2023: £372.8 million). 5% growth in the
valuation of the Gyle to £42 million since acquisition in September 2023 for
£40 million.
· Net Asset Value ("NAV") increased to £203.9 million (December
2023: £202.0 million).
· NAV per share and EPRA NTA per share at 88p and 85p respectively
(December 2023: 90p and 88p, respectively) due to the increased number of
shares in issue following the June 2024 scrip dividend.
Long term secure debt position
· Long debt maturity profile of 3.6 years with low average cost of
debt of 4.25% (December 2023: 4.1 years and 4.25%). Approximately 80% hedged
for the next two and a half years.
· Group Net Loan to Value has reduced to 43% from 44% as at 30
December 2023.
· Ilford loan extended to September 2025 with further conditional
options to extend term to end of 2027.
Further progress in delivering energy efficiency driving forward our net zero
carbon pathways
· 83% reduction in Scope 1 natural gas, and 20% in Scope 2 electricity
consumption since 2019 within our shopping centres.
· EPC rating of Snozone Milton Keynes improved from a 'C' to 'B'.
· 100% renewable and Renewable Energy Guarantees of Origin certified
electricity at all shopping centres and Snozone venues.
Continued strong performance supporting further increase in dividend
· 3.6% increase in proposed interim dividend of 2.85p per share (June
2023: 2.75p per share).
6 months to 6 months to Year to
June 2024 June 2023 Dec 2023
Revenue £34.5m £28.5m(5) £59.0m
Net Rental Income £13.7m £11.7m £23.9m
Adjusted Profit(1) £8.2m £7.0m £12.7m
Adjusted Earnings per share (diluted)(1) 3.6p 4.1p 6.6p
IFRS Profit for the period £4.5m £6.1m £3.7m
Basic earnings per share (diluted) 2.0p 3.5p 1.9p
Total dividend per share(3) 2.85p 2.75p 5.70p
Net Asset Value £203.9m £183.2m £202.0m
Net Asset Value (NAV) per share 88p 106p 90p
EPRA NTA per share 85p 102p 88p
Group net debt(4) £162.6m £138.5m £162.7m
Net debt to property value 43% 42% 44%
( )
Notes
(1) Adjusted Profit, Adjusted Earnings per share, Net Rental Income, Net Debt
and the Snozone EBITDA metric are as defined in the Glossary. Adjusted Profit
incorporates profits from operating activities and excludes revaluation of
properties and financial instruments, gains or losses on disposal, and other
non-operational items. A reconciliation to the equivalent EPRA and statutory
measures is provided in Note 6 to the condensed financial statements.
(2) For lettings and renewals (excluding development deals and CVA variations)
with a term of 1 year or longer which do not include turnover rent.
(3) Includes dividends declared post period end but related to the period in
question.
(4) Weighted average, debt maturity assumes exercise of extension options.
(5) 2023 comparative figure has been restated for a prior year adjustment to
service charge income and expenditure recognised in the period. There is no
change to Profit.
Possible offers for Capital & Regional plc
On 23 May 2024, the Board of Capital & Regional plc confirmed that its
majority shareholder Growthpoint Properties Limited had received a preliminary
expression of interest from NewRiver REIT plc ("NewRiver") in relation to a
possible offer in cash and shares for the entire issued, and to be issued,
share capital of Capital & Regional.
On 19 July 2024, Praxis Group Limited ("Praxis") announced it is in the early
stages of considering whether or not to make a cash offer for the entire
issued and to be issued share capital of Capital & Regional. The Company
confirmed that it received an expression of interest from Praxis with a
request to receive access to diligence information pursuant to Rule 21.3 of
the City Code on Takeovers and Mergers (the "Code") on 5 July 2024. Capital
& Regional is complying fully with its obligations under Rule 21.3 of the
Code in providing access to due diligence information in order to enable
Praxis to evaluate a possible offer for the Company.
In accordance with Rule 2.6(a) of the Code, NewRiver and Praxis are required,
by no later than 5:00 p.m. on 15 August 2024 and 16 August 2024 respectively,
to either announce a firm intention to make an offer for Capital &
Regional in accordance with Rule 2.7 of the Code or announce that it does not
intend to make an offer, in which case the announcement will be treated as a
statement to which Rule 2.8 of the Code applies.
In accordance with Rule 2.6(c) of the Code, the deadlines may be extended
further at the request of the Board of Capital & Regional and with the
consent of the Takeover Panel. There can be no certainty that any firm offer
will be made for the Company, nor as to the terms on which any offer will be
made.
Use of Alternative Performance Measures (APMs)
Throughout the results statement we use a range of financial and non-financial
measures to assess our performance. A number of the financial measures,
including Net Rental Income, Adjusted Profit, Adjusted Earnings per share, Net
Debt and the industry best practice EPRA (European Public Real Estate
Association) performance measures are not defined under IFRS, so they are
termed APMs. APMs are not considered superior to the relevant IFRS measures,
rather Management use them alongside IFRS measures to monitor the Group's
financial performance because they help illustrate the trading performance and
position of the Group. All APMs are defined in the Glossary and further detail
on their use is provided within the Financial Review.
( )
For further information:
Capital & Regional: Tel: +44 (0)20 7932 8000
Lawrence Hutchings, Chief Executive
Stuart Wetherly, Group Finance Director
FTI Consulting: Tel: +44 (0)20 3727 1000
Richard Sunderland, Bryn Woodward, Oliver Parsons Email: Capreg@fticonsulting.com
Notes to editors:
About Capital & Regional
Capital & Regional is a UK focused retail property REIT specialising in
shopping centres that dominate their catchment, serving the non-discretionary
and value orientated needs of the local communities. It has a track record of
delivering value enhancing retail and leisure asset management opportunities
across a portfolio of tailored in-town community shopping centres.
Using its expert property and asset management platform, Capital &
Regional owns and manages shopping centres in Edinburgh, Hemel Hempstead,
Ilford, Maidstone, Walthamstow and Wood Green.
Capital & Regional is listed on the main market of the London Stock
Exchange (LSE) and has a secondary listing on the Johannesburg Stock Exchange
(JSE).
For further information see www.capreg.com (http://www.capreg.com/) .
South African secondary listing
At 30 June 2024, 8,801,339 of the Company's total 232,996,247 shares were held
on the South African register representing 3.78% of the total issued share
capital. Java Capital acts as JSE Sponsor for the Group.
Forward looking statements
This document contains certain statements that are neither reported financial
results nor other historical information. These statements are forward-looking
in nature and are subject to risks and uncertainties. Actual future results
may differ materially from those expressed in or implied by these statements.
Many of these risks and uncertainties relate to factors that are beyond the
Group's ability to control or estimate precisely, such as future market
conditions, currency fluctuations, the behaviour of other market participants,
the actions of government regulators and other risk factors such as the
Group's ability to continue to obtain financing to meet its liquidity needs,
changes in the political, social and regulatory framework in which the Group
operates or in economic or technological trends or conditions, including
inflation and consumer confidence, on a global, regional or national basis.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which apply only as of the date of this document. The Group does
not undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date
of this document. Information contained in this document relating to the Group
should not be relied upon as a guide to future performance.
Operating review
New lettings, renewals and rent reviews
We made further strong leasing progress in the first half of the year,
completing 48 new lettings and renewals at an average premium to previous rent
of 8.8%(1) and securing £2.2 million of annual rent. This compares to 42 new
lettings and renewals for a combined annual rent of £1.5 million for the same
period last year meaning that both the absolute number of leases signed and
the annualised rental amount per lease were higher this year.
In February 2024, we completed a portfolio deal with B&M which resulted in
them taking all three of the units vacated as a result of the Wilko
administration, mitigating the occupational impact from the loss of a top 10
retailer and largely replicating the rent. The stores opened for trading in
May 2024.
We have also completed new lettings at Maidstone and Hemel Hempstead with
Bodycare and are in final stages of letting a further unit in Ilford.
Renewals agreed during the period include Deichmann and The Perfume Shop at
Ilford, Choice at Walthamstow and JD Sports at Wood Green.
6 months to 6 months to
June 2024 June 2023
New Lettings
Number of new lettings 25 21
Rent from new lettings (£m) £1.2m £0.6m
Renewals settled
Renewals settled 23 21
Total resulting annual rent (£m) £1.0m £0.9m
Combined new lettings and renewals
Comparison to previous rent(1) +8.8% +5.7%
Comparison to ERV at December 2023(1) +14.1% +13.7%
(1) For lettings and renewals (excluding development deals and CVA variations)
with a term of 1 year or longer which do not include turnover rent element.
Since 30 June 2024 we have agreed terms on four key letting deals that are in
advanced legals and will represent approximately £0.8 million of annualised
rent in aggregate.
Rental income and occupancy
( ) 30 June 30 December 2023 30 June 2023
2024
Occupancy (%) 93.9% 93.4% 94.5%
Contracted rent (£m) 38.2 37.0 31.6
Passing rent (£m) 37.0 35.6 30.7
Occupancy has improved by 50 basis points since 30 December 2023. This
reflects the net impact of the B&M lettings, partially offset by the
administration of the Body Shop, which impacted three units at Gyle, Hemel
Hempstead and Ilford as well as the Department for Work and Pensions vacating
the job centre at Walthamstow.
Since 30 June 2024, as noted above, we have agreed terms on four key letting
deals. Completing these transactions alongside the other deals agreed post
30 June 2024 will see occupancy recover to a similar level to 30 June 2023.
We note recent press speculation in respect of Cineworld and the potential for
it to undertake some form of insolvency action. We have exposure to one unit
at Wood Green with annual rent of £0.6 million.
Contracted and passing rent have both increased from December 2023 by £1.2
million (3.2%) and £1.4 million (3.9%) respectively. The key drivers of this
are the B&M lettings and the opening of the new NHS community healthcare
centre in Ilford. Contracted rent excludes approximately £0.6 million of rent
where deals have exchanged but completion remains subject to planning or other
conditions. A further £1.0 million of contracted rent is due to convert to
passing rent in the next 12 months as occupiers' rent-free periods end.
Operational performance
In total there were 21.1 million shopper visits across the portfolio in the
first half of 2024, 4.6% below 2023 on a like for like basis. Footfall has
been impacted at those schemes with former Wilko units which were closed for
most of the period until B&M opened for trade in May 2024. Ilford has
been similarly impacted as while Wilko was not within our tenancy one of their
former units sits adjacent with an entrance to our scheme.
Car park usage is in line with 2023 (+0.1%). This combined with greater
optimisation of tariffs and an increase in contract parking, has delivered
income in the period of £3.2 million, an uplift of 21.6%.
Rent collection
Rent collection for the first six months of the year is currently 99.2% as
detailed in the table below:
Rent collection
6m to 30 June 2024
£m
Rent collected 19.8 99.2%
Outstanding 0.2 0.8%
Total billed 20.0 100%
Amounts include VAT.
Capital expenditure
In total a net £3.1 million was invested in the first six months of the year,
this was primarily across the following projects and is expected to produce a
yield on cost in line with the Company's target of 8% to 9%:
Ilford
· £1.5 million for completion of the new 20,000 sq ft NHS community
healthcare facility that opened in the first half of 2024.
· £0.8 million to create a new retail area by the entrance opposite
the Elizabeth Line that was converted from the former TK Maxx unit, vacated
when they moved into a new larger unit on the middle floor in November 2023.
Wood Green
· £0.9 million on remerchandising of the former WH Smith store where
the new units we have created for Pure Gym, Wendy's and Wingstop have opened
in recent weeks.
The spend in the period is net of a £1.3 million receipt from the head lease
holder on Walthamstow in respect of previous capital expenditure projects. We
anticipate capital expenditure in the second half of the year to be at a
similar level.
The major projects undertaken have the additional benefit of helping to
improve the ESG credentials of the relevant centres by replacing aged
infrastructure and enabling the reduction or elimination of the use of gas.
Walthamstow residential
Construction work is entering its final stage on the first phase of the
residential development at Walthamstow. This will see Long Harbour create
495 Build to Rent apartments in two residential towers adding further to the
centre's local customer base once it opens in 2025. The Group completed the
sale of land for residential development to Long Harbour for £21.6 million in
2022. The planning consent covers a residential-led, mixed use development,
incorporating a new Victoria Line tube station entrance and public space
including a new park.
We have two further phases of development which comprise approximately 50,000
sq ft of retail and 43 apartments which are part of the same planning consent
as phase 1. We have commenced discussions about how we procure this project
with a potential partner for the residential component similar to the
structure we achieved in the first phase. In addition, we are underway on
discussions with potential anchor retailers including supermarket operators
for the retail component.
Shopping Centre ESG
We have developed a robust pathway aligned with the BBP Climate Commitment and
the UK Green Building Council's (UKGBC) definition of net zero. Our commitment
covers embodied carbon associated with refurbishments and fit-outs and
operational carbon from landlord and occupier energy consumption, along with
measured emission sources. We continue to make progress on driving forward our
net zero carbon pathways aligned with industry best practice and guidelines
which represents a significant milestone in our decarbonisation journey.
Through the successful implementation of our net zero interventions, we have
improved the EPC rating of a further centre from a 'D' to a 'C'.
Having established our net zero governance along with the roll-out of employee
training, we will continue to prioritise energy efficiencies on the ground
across all aspects of our operations and evolve crucial tools such as our data
accuracy and net zero standards. To further inform our net zero pathway we are
in the final stages of securing BREEAM certification across all centres. We
have made significant strides towards our environmental targets increasing our
energy efficiency, reducing Scope 1 natural gas consumption by 83% and Scope 2
electricity consumption by 20%, against 2019. All the shopping centres
electricity is 100% renewable and Renewable Energy Guarantees of Origin
certified.
We are committed to developing and operating a shopping centre portfolio that
not only minimises potential adverse climate change impacts but also actively
fosters positive contributions to the communities and the natural environment
we interact with. To support this, we have established our Climate Adaptation
Plan as we recognise the importance of embedding climate resilience across all
interfaces in our business model, from our governance and risk management
strategy to key decision-making moments in our investment value chain.
Our Community Wheels of Support continue to play a critical role in
encouraging engagement and helping our shopping centre teams to prioritise
areas of impact. As community hubs we know our support is crucial,
particularly with the cost-of-living crisis. We are very proud of our efforts
in this space and to date we have partnered with over 100 charities, hosted
125 events, and spent more than 400 hours engaging with local community
groups.
We continue to implement our Social Impact Measurement and Management
Framework to further support our ESG strategy and monitor our progress. The
Framework focuses on social impact goals and strategies to identify the
various ways in which the business impacts people so this can inform our
Impact Management Plan.
Snozone
Snozone has had another strong six months, producing record levels of revenue
and profitability. EBITDA(1) increased 18.8% to £1.9 million (June 2023:
£1.6 million) reflecting growth from both the UK and Madrid operations.
Revenue and EBITDA for the UK operations at £6.0 million and £1.4 million
for the first half of 2024, were both 7% higher than 2023. This revenue
growth has helped offset inflationary pressures on labour costs and
specifically energy costs, where the unit cost has doubled since Snozone UK
exited a three-year fixed tariff in September 2023.
Snozone Madrid's revenue of £2.3 million was 13% higher than 2023 driving a
24% increase in Madrid EBITDA to £0.5 million (June 2023: £0.4 million).
These metrics reflect the actions undertaken to significantly improve
profitability since acquisition of the operations in February 2021. These
include broadening the range of lesson programmes, introducing a new booking
platform and sales team KPI's and rolling out a Disability Snow School, to
bring this destination in line with the UK equivalents that Snozone has
operated since 2015.
Snozone's IFRS profit for the period was £1.6 million (June 2023: £0.6
million).
During the period Snozone Madrid was awarded the Trip Advisor Travelers Choice
Award for the first time. Snozone Madrid's approval rating has improved from
56% at the point of acquisition to 83% currently. The UK venues also
received this award for the sixth year running.
Snozone ESG
All of Snozone's electricity is 100% renewable, traceable and has no element
of biomass.
The UK venues source electricity from the Hornsea North Sea wind farm, 90
miles from the Snozone Yorkshire venue. In Madrid approximately 70% of the
venue's power is sourced from a mixture of bought-in solar, wind and nuclear
energy with the remainder supplied by 1,600 of our own solar panels on the
roof of the facility, which were purchased in 2022 as part of Snozone's
decarbonisation capital investment programme as well as offsetting the rising
costs of electricity.
Snozone's pathway to net zero strategy is underpinned by a cyclical four-year
plan for capital investment into new plant and machinery. Ten units of blast
coolers have been replaced at the Milton Keynes venue saving 214,000 kWh per
year.
In addition, improved insulation at both UK venues, installation of two
voltage optimisers and a de-lamping project combined with Madrid's solar
panels investment have seen reductions in water, electricity and gas
consumption of 19%, 13% and 20% respectively versus the 2019 pre-Covid base
year. The EPC rating of Milton Keynes was improved during the year from a
'C' to a 'B', bringing it in line with the Yorkshire and Madrid operations.
Snozone is the only European operator to operate its own Disability Snow
School, which we have now extended to Madrid. In 2024 we delivered 1,314
disability lessons, a 28% increase on 2023 and were nominated for an award in
the National Learning Disabilities & Autism awards. Snozone's supply
chain only consists of companies who have signed up to the Modern Slavery Act
and the Anti-bribery and Corruption Act.
(1) Snozone EBITDA is defined in the use of Alternative Performance Measures
section below.
FINANCIAL REVIEW
Six months to Six months to Year to
June 2024 June 2023 Dec 2023
Profitability
Statutory Revenue (1) £34.5m £28.5m £59.0m
Net Rental Income (NRI) £13.7m £11.7m £23.9m
Adjusted Profit (2) £8.2m £7.0m £12.7m
Adjusted Earnings per share (diluted) (2) 3.6p 4.1p 6.6p
IFRS Profit for the period £4.5m £6.1m £3.7m
Basic earnings per share (diluted) 2.0p 3.5p 1.9p
EPRA cost ratio (excluding vacancy costs) (2) 36.5% 36.7% 39.1%
Net Administrative Expenses to Gross Rent 20.8% 21.7% 23.5%
Investment Returns
Net Asset Value £203.9m £183.2m £202.0m
Net Asset Value (NAV) per share 88p 106p 90p
EPRA NTA per share (2) 85p 102p 88p
Dividend per share (3) 2.85p 2.75p 2.95p
Financing
Group net debt £162.6m £138.5m £162.7m
Group net debt to property value 43% 42% 44%
EPRA LTV 46% 45% 45%
Weighted average maturity of Group debt (4) 3.6 years 4.0 years 4.1 years
Weighted average cost of Group debt 4.25% 3.61% 4.25%
(1) 2023 comparative figures have been restated for a prior year adjustment to
service charge income and expenditure recognised in the period. There is no
change to Profit.
(2) Adjusted Profit is as defined in the Glossary. A reconciliation to the
statutory result is provided further below. EPRA figures and a reconciliation
to EPRA EPS are shown in Note 6 to the condensed Financial Statements. The
calculation of EPRA cost ratio is provided in the EPRA performance measures
section.
(3) Represents dividends declared post period end but related to the period in
question.
(4) Assuming exercise of all extension options.
Use of Alternative Performance Measures (APMs)
Throughout the results statement we use a range of financial and non-financial
measures to assess our performance. The significant measures are as follows:
Alternative performance measure used Rationale
Adjusted Profit Adjusted Profit is used as it is considered by management to provide the best
indication of trading profits and hence the ability of the business to fund
dividend payments.
Adjusted Profit excludes revaluation of properties, profit or loss on disposal
of properties or investments, gains or losses on financial instruments,
charges in respect of non-cash long-term incentive awards and non-operational
one-off items.
Adjusted Profit includes EBITDA from Snozone (see definition further below).
This was a change implemented in 2021 arising from the adoption of IFRS 16 and
the signing of new lease agreements on Snozone's two UK sites. We considered
that the combination of these two factors meant that Snozone's statutory
profit no longer alone provides a full reflection of Snozone's trading
performance and hence introduced this additional Alternative Performance
Measure.
The key differences between Adjusted Profit and EPRA earnings, an industry
standard comparable measure, relates to the exclusion of non-cash charges in
respect of share-based payments and adjustments in respect of Snozone as
detailed above.
Adjusted Earnings per share is Adjusted Profit divided by the weighted average
number of shares in issue during the year excluding own shares held.
A reconciliation of Adjusted Profit to the equivalent EPRA and statutory
measures is provided in Note 6 to the condensed financial statements.
Like-for-like amounts Like-for-like amounts are presented as they measure operating performance
adjusted to remove the impact of properties that were only owned for part of
the relevant periods.
For the purposes of comparison of capital values, this will also include
assets owned at the previous period end but not necessarily throughout the
prior period.
In the current year like-for-like comparisons have been used to adjust for the
impact of the Gyle acquisition in September 2023.
Net Debt Net debt is borrowings, excluding unamortised issue costs, less cash at
bank. Cash excludes cash held on behalf of third parties (e.g. in respect of
service charges or rent deposits).
Net debt to property value Net debt to property value is debt less cash and cash equivalents divided by
the property value.
Net Rent or Net Rental Income (NRI) Net Rental Income is rental income from properties, less provisions for
expected credit losses, property and management costs. It is a standard
industry measure. A reconciliation to statutory turnover is provided in Note
3 to the condensed financial statements.
Snozone EBITDA Snozone EBITDA is based on net profit. It excludes Depreciation,
Amortisation, (notional) Interest, Tax and non-operational one-off items. It
includes rent expense, based on contractual payments adjusted for rent free
periods. This provides a measure of Snozone trading performance which
removes the profiling impact of IFRS 16 that would otherwise see a
significantly higher charge in early years of a lease and significantly lower
net charge in later years. A reconciliation to the IFRS net profit is
included within Note 3 to the condensed financial statements.
Profitability
Components of Adjusted Profit and reconciliation to IFRS Profit
Amounts in £m Six months to Six months to Year to
June 2024 June 2023 December 2023
Net Rental Income 13.7 11.7 23.9
Interest payable (4.6) (3.7) (7.4)
Snozone (indoor ski operation) EBITDA 1.9 1.6 2.3
External management fees 0.7 1.2 1.9
Central operating costs (including central interest) (3.1) (3.1) (6.6)
Variable overhead (0.4) (0.7) (1.4)
Adjusted Profit (1) 8.2 7.0 12.7
Adjusted Earnings per share (pence) (1) 3.6p 4.1p 6.8p
Reconciliation of Adjusted Profit to statutory result
Adjusted Profit 8.2 7.0 12.7
Property revaluation (1.5) (0.3) (8.1)
Loss on disposal/transaction costs (0.4) (0.6) (0.3)
Snozone depreciation and amortisation (1.1) (1.0) (2.2)
Snozone notional interest (net of rent expense in EBITDA) 0.8 0.3 0.8
Loss on financial instruments (0.6) (0.3) (2.0)
Corporation Tax (charge)/credit (0.6) 1.2 3.6
Long Term incentives (non-cash) (0.3) (0.4) (0.8)
Other items - 0.2 -
Profit for the period 4.5 6.1 3.7
(1) EPRA figures and a reconciliation to EPRA EPS are shown in Note 6 to the
condensed Financial Statements.
17.1% increase in Adjusted Profit to £8.2 million (30 June 2023: £7.0
million)(1)
Net Rental Income (NRI) increased to £13.7 million (30 June 2023 - £11.7
million) reflecting the impact of the Gyle acquisition in September 2023.
Adjusting for this, and a one-off catch up of prior year turnover income
received in 2022, NRI reduced by 3.5% on a like-for-like basis. This
reflects the former Wilko units being vacant for most of the period until
B&M opened in May 2024 and increases to void costs as a result of wage and
energy inflation.
Interest payable has increased from the prior year reflecting £0.6 million of
interest on the Gyle £16 million loan facility and a higher rate on the
Group's £39 million Ilford facility as the previous interest rate swap
expired in March 2024.
Snozone EBITDA at £1.9 million (30 June 2023 - £1.6 million) has increased,
as noted, benefiting from revenue growth at both its UK and Madrid operations.
External Management Fees of £0.7 million reflect Property Management fees
charged to the service charge within the Group's property portfolio. The
decrease from the prior year reflects fees charged on external properties
(Luton and Redditch), arrangements which ceased during 2023.
Central operating costs (including central interest) at £3.1 million have
remained in line with the prior year (30 June 2023 - £3.1 million).
Variable overheads £0.4 million (30 June 2023 - £0.7 million) have
reduced, reflecting executive retention awards which were paid in September
2023. We anticipate the combination of further cost savings and the benefit
of additional income from capital expenditure projects and improving occupancy
to drive over time further improvements in our EPRA cost ratio, which has
reduced to 36.5% from 39.1% for the year ending December 2023.
Adjusted earnings per share for the period were 3.6 pence on a diluted basis
(30 June 2023: 4.1 pence) the reduction reflects the larger number of shares
in issue as a result of the equity raise in September 2023 to part fund the
Gyle acquisition and the scrip dividend shares issued in respect of the
interim and final 2023 dividends.
IFRS profit for the period - 30 June 2024: £4.5 million (30 June 2023:
£6.1 million)
Aside from the Adjusted Profit of £8.2 million the other items impacting the
result in the period were:
· Property revaluation loss of £1.5 million (June 2023 - loss of
£0.3 million) representing the difference between the net Capex invested of
£3.1 million, valuation increases and movement on tenant incentives and IFRS
adjustments.
· £0.4 million of transaction costs related to ongoing corporate
activity. In the prior period there was £0.6 million of
transaction costs in respect of the proposed acquisition of The Gyle and a
small true up of profit on disposal in respect of the Group's sale of
Blackburn in 2022.
· £(0.3) million of adjustments relating to Snozone reconciling
between the EBITDA measure used for Adjusted Profit and IFRS Profit for the
year (June 2023 - £(0.7) million). As noted above, we used EBITDA as this
removes the profiling element of IFRS 16 and therefore provides a measure of
Snozone's trading performance excluding this.
· A loss of £0.6 million on financial instruments being the movement
from the revaluation of the Ilford and Gyle interest rate caps (June 2023 -
loss of £0.3 million).
· £0.6 million deferred tax charge (June 2023 - £1.2 million
credit).
· £0.3 million relating to share based payments being the non-cash
element of the Group Combined Incentive Plan for executives and LTIP retention
awards for staff members (June 2023 - £0.4 million).
The profit for the period has resulted in NAV of £203.9 million and EPRA Net
Tangible Assets of £202.4 million, improvements of 0.9% and 0.6% compared to
the December 2023 amounts of £202.0 million and £201.2 million,
respectively. Basic NAV per share and EPRA NTA per share were 88p and 85p
respectively (December 2023: 90p and 88p respectively). The reduction
reflects the higher number of shares in issue as a result of new Scrip shares
issued in June 2024.
Property portfolio valuation
The valuation of the portfolio at 30 June 2024 was £374.9 million,
representing an increase in headline valuation of £2.1 million or 0.6% from
December 2023. The Net Initial Yields and Net Equivalent Yields for the
portfolio remained broadly constant on a like for like basis, 7.61% and 8.81%
respectively for 30 June 2024 compared to 7.80% and 8.79% respectively as at
December 2023. We have seen a 5% increase in the value of Gyle from the £40
million acquisition price driven by leasing activity since we took ownership
in September 2023.
Property at independent valuation 30 June 2024 30 December 2023
£m NIY % NEY % £m NIY % NEY %
Maidstone 31.3 10.83% 11.65% 31.5 11.90% 11.66%
Walthamstow 77.0 5.94% 7.01% 77.7 6.84% 7.00%
Wood Green 152.5 7.64% 7.33% 149.5 7.13% 7.28%
Hemel Hempstead 9.8 7.90% 17.36% 9.2 9.57% 17.40%
Ilford 62.3 5.69% 7.97% 63.3 5.65% 7.90%
Gyle, Edinburgh 42.0 11.22% 10.15% 41.6 11.92% 10.13%
Total 374.9 7.61% 8.81% 372.8 7.80% 8.79%
Financing
The Group's debt position as at 30 June 2024 is summarised in the table below:
Debt(1) Cash(2) Net debt Loan to value (3) Net loan to value(3) Current interest rate Fixed Duration to loan expiry(4) Duration with extensions(4)
30 June 2024 £m £m £m % % % % Years Years
The Mall 140.0 (9.0) 131.0 54% 50% 3.45% 100 2.6 3.6
Gyle, Edinburgh 16.0 (2.0) 14.0 38% 33% 6.50% 100 4.2 4.2
Hemel Hempstead 4.0 (0.4) 3.6 41% 37% 11.06% - 1.0 3.0
Ilford 39.0 (3.7) 35.3 63% 57% 5.50% 100 1.2 3.5
Central Cash - (21.3) (21.3) - - - - - -
Total 199.0 (36.4) 162.6 53% 43% 4.25% 97.8 2.4 3.6
(1) Excluding unamortised issue costs.
(2) Excluding cash beneficially owned by tenants.
(3) Debt and net debt divided by investment property at valuation.
The Group's Net Debt to Property Value ratio has reduced marginally during the period from 44% to 43% reflecting small increases in both property valuation and cash. The weighted average cost of interest has remained at 4.25% of which 98% is fixed until September 2025 and 78% until at least January 2027.
The Group's debt facilities comprise:
The Mall
The Mall facility consists of a single £140 million fixed rate loan at 3.45%,
held with TIAA. The loan matures in January 2027 but has a one-year
conditional extension option.
Hemel Hempstead
The Group has a £4 million facility with BC Invest, a subsidiary of the
Group's strategic residential partner, Far East Consortium. The debt matures
in July 2025 with options to extend for a further one or two years and is at a
margin of 5.95% over SONIA. It is secured on the Marlowes Centre on a
non-recourse basis.
Ilford
The Group has a £39 million facility secured on the Ilford Exchange shopping
centre with Dekabank Deutsche Girozentrale. The loan was due to mature in
March 2024 but has been extended until September 2025 and we have agreed two
further conditional extension options to extend maturity to the end of
December 2026 and 2027, respectively. The extension of maturity has led to
the loan being reclassified to non-current, having been a current liability at
December 2023. The margin on the loan is 300 basis points. The Group has
an interest rate cap that hedges the maximum all in cost at 5.50% until the
September 2025 maturity.
Gyle, Edinburgh
To part fund the acquisition of Gyle in Edinburgh the Group drew a new debt
facility of £16 million in September 2023, arranged by Morgan Stanley. The
loan matures in September 2028. The loan is at a margin of 275 basis
points. The total all in cost of debt has been hedged at a maximum of 6.50%
for the duration of the loan via an interest rate cap.
Going Concern
Under the UK Corporate Governance Code the Board needs to report whether the
business is a going concern. In making its assessment of Going Concern, the
Group has considered the general risk environment and the specific risks that
relate to the Group and its sector. This has incorporated considering the
current macro-economic inflationary pressures as well as the continuing
structural trends within the retail industry.
At 30 June 2024, the Group had total cash at bank on balance sheet of £36.4
million. Of which £20.8 million was held centrally outside of secured loan
arrangements. This provides a significant cash contingency to cover any
reasonable disruption to operations in both the base and downside scenarios
that have been modelled for at least the period of the next 18 months that is
considered for going concern purposes.
In respect of the £140 million Mall debt, the Group is currently compliant
with all covenant tests on the facility. On the Ilford £39 million
facility, as well as extending the loan maturity to September 2025 and
agreeing further loan extension options out to December 2027 the Group agreed
various improvements to covenant terms that run until the new maturity and
beyond if the extension options are triggered. On Hemel Hempstead the Group
has a waiver of all covenants on the £4 million loan facility until maturity
in July 2025 and an option to extend maturity by one or two years. The Group
signed a £16 million loan facility in September 2023 to part finance the
acquisition of Gyle in Edinburgh.
All of the Group's asset backed loan facilities are ring-fenced within their
own SPV structures with no recourse to Capital & Regional plc and no
cross-default provisions.
In making its assessment of Going Concern, the Group has run updated forecasts
on both a base case and downside basis. In the latter, the Group has
sensitised rent collection to 90%, reduced car park and ancillary income by
10% and removed any contribution from Snozone to reflect how a significant
downturn in expected trading could impact cashflows. The Group has also
considered a 15% reduction in property valuations both from the Group's 30
June 2024 valuations and valuations undertaken by the Group's respective
lenders.
The combination of the cash maintained on the Group's balance sheet and
actions available within Management's control provides sufficient contingency
to cover all of the various downside sensitivities modelled in combination to
the most adverse end of the scenarios modelled. At the most adverse end the
Group would need to take some additional measures to preserve cash involving
some combination of reducing or deferring Capital Expenditure and/or reducing
dividend payments or utilising a Scrip option.
In coming to its Going Concern conclusion, the Group has also considered, but
not relied upon, other options available to generate or conserve additional
cash, to reduce debt levels and to fund value accretive capital expenditure
and letting initiatives. These include but are not limited to the potential
disposal of assets either in whole or part and the potential raising of
additional funds.
Having due regard to all of the above matters and after making appropriate
enquiries, the Directors have a reasonable expectation that the Group and the
Company have adequate resources to continue in operational existence for the
foreseeable future. Therefore, the Board continues to adopt the Going Concern
basis in preparing the financial statements.
Dividend
The Directors recommend an interim dividend of 2.85 pence per share (June 2023: 2.75 pence per share). The dividend will be paid entirely as a Property Income Distribution (PID). We do not anticipate offering a scrip dividend option for this dividend payment. Across the full financial year, the Group expects to pay a dividend of at least 90% of the Group's EPRA profits, in line with its dividend policy.
The key dates proposed in relation to the payment of the dividend are:
· Confirmation of ZAR equivalent dividend Tuesday, 27 August 2024
· Last day to trade on Johannesburg Stock Exchange (JSE) Tuesday, 3 September 2024
· Shares trade ex-dividend on the JSE Wednesday, 4 September 2024
· Shares trade ex-dividend on the LSE Thursday, 5 September 2024
· Record date for LSE and JSE Friday, 6 September 2024
· Dividend payment date Friday, 27 September 2024
South African shareholders are advised that the dividend will be regarded as a
foreign dividend. Further details relating to Withholding Tax for
shareholders on the South African register will be provided within the
announcement detailing the currency conversion rate on Tuesday, 27 August
2024. Share certificates on the South African register may not be
dematerialised or rematerialised between 4 September 2024 and 6 September
2024, both dates inclusive. Transfers between the UK and South African
registers may not take place between 27 August 2024 and 6 September 2024, both
dates inclusive.
Principal risks and uncertainties
There are a number of risks and uncertainties which could have a significant
impact on future performance and could cause actual results to differ
materially from expected or historical results. The Group carries out a
regular review of the major risks it faces and monitors the controls that have
been put in place to mitigate them.
A detailed explanation of the principal risks and uncertainties was included
on pages 52 to 57 of the Group's 2023 Annual Report. A further review was
carried out for the 30 June 2024 half year taking into consideration the next
six months to 30 December 2024. The review concluded that while some risks,
including property investment market risks, people risks, business disruption
from a major incident and customer and changing consumer trend risks had
changed, the ultimate nature of them had not and therefore the principal risks
to the Group remain those disclosed in the 2023 Annual Report. These have been
summarised below.
· Property investment market risks - Weak economic conditions and poor
sentiment in commercial real estate markets allied to higher risk free rates
may lead to low investor demand and further declines in valuation. Small
changes in property market yields can have a significant effect on property
valuation and the impact of leverage could magnify the effect on the Group's
net assets.
· Impact of the economic environment - A prolonged downturn in
tenant demand driven by structural changes in retail and/or macro-economic
factors, such as the current inflationary pressures, could put further
pressure on rent levels. Tenant failures and reduced tenant demand could
adversely affect rental income revenues, lease incentive costs, void costs,
available cash and the value of properties owned by the Group.
· Treasury risk - Inability to fund the business or to refinance
existing debt on economic terms may result in the inability to meet financial
obligations when due and put a limitation on financial and operational
flexibility. Cost of financing could be prohibitive in the future. Breach of
any loan covenants could cause default on debt and possible accelerated
maturity. Unremedied breaches can trigger demand for immediate repayment of
loans.
· Climate related - The Group's failure to act on environmental issues
could lead to reputational damage, deterioration in customer and community
relationships, or limit investment opportunities. Climate-related risks extend
to the global supply chain and business disruption from extreme weather
events. Failure to comply with regulations could result in financial
exposure. The Group maintains a Climate-related risk matrix which
consolidates the results of the top 10 identified risks from the RCP4.5 and
RCP8.5 scenarios outlined in the climate risk assessment report and are in
line with TCFD recommendations.
· Tax and regulatory risks - Exposure to non-compliance with the
REIT regime and changes in tax legislation or the interpretation of tax
legislation or previous transactions could result in tax related liabilities
and other losses arising. Exposure to changes in existing or forthcoming
property related or corporate regulation could result in financial penalties
or loss of business or credibility.
· People - The Group's business is partially dependent on the skills
of a small number of key individuals. Loss of key individuals or an inability
to attract new employees with the appropriate expertise could reduce the
effectiveness with which the Group conducts its business.
· Development risk - There is a risk that where capital expenditure and
development projects are undertaken, that delays and other issues may lead to
increased cost and reputational damage. There is also the risk that planned
realisation of value is not achieved, for example if the property cannot
subsequently be sold for the anticipated amount or if tenants are not
contracted on sufficiently attractive terms. Competing schemes may reduce
footfall and reduce tenant demand for space and the levels of rents which can
be achieved
· Business disruption from a major incident - The threat of a major
incident, including the COVID-19 pandemic, impacting one or more of the
Group's assets. There is a risk of financial losses if unable to trade or
impacts upon shopper footfall and reputational and financial damage if
business has or is perceived to have acted negligently
· Responsible business risk - Failure to act on environmental and social
issues could lead to reputational damage, deterioration in relationships with
customers and communities and limit investment opportunities. Failure to
comply with regulations could result in financial exposure. Health and
safety incidents could result in reputational damage, financial liability for
the Group and potentially criminal liability for the directors.
· Customers and changing consumer trends - Changes in consumer
shopping habits towards online purchasing and delivery and the increase of
CVAs by retailers and other retailer restructurings may adversely impact
footfall in shopping centres and potentially reduce tenant demand for space
and the levels of rents which can be achieved.
· IT & Cyber Security - The risk of IT failures or malicious
attacks causing reputational or financial damage to the business through loss
of business time and opportunities or potential fines or regulatory penalties.
· Health & Safety - The Group could face criminal charges,
financial loss and reputational damage if it or individuals in management
positions were found to have failed processes or been negligent in their
actions.
The risks noted above do not comprise all those potentially faced by the Group
and are not intended to be presented in any order of priority. Additional
risks and uncertainties currently unknown to the Group, or which the Group
currently deems immaterial, may also have an adverse effect on the financial
condition or business of the Group in the future. These issues are kept under
constant review to allow the Group to react in an appropriate and timely
manner to help mitigate the impact of such risks.
Responsibility statement
The directors confirm that to the best of their knowledge:
· the condensed set of financial statements has been prepared in
accordance with UK adopted IAS 34 "Interim Financial Reporting";
· the interim management report includes a fair review of
the information required by DTR 4.2.7R (indication of important events during
the first six months and description of principal risks and uncertainties for
the remaining six months of the year); and
· the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related party transactions
and changes therein).
By order of the Board
Lawrence
Hutchings
Stuart Wetherly
Chief
Executive
Group Finance Director
31 July 2024
31 July 2024
INDEPENDENT REVIEW REPORT TO CAPITAL & REGIONAL PLC
Conclusion
We have been engaged by Capital & Regional plc ("the Company") to review
the condensed set of financial statements in the half-yearly financial report
for the six months ended 30 June 2024 which comprise the condensed
consolidated income statement, the condensed consolidated statement of
comprehensive income, the condensed consolidated balance sheet, the condensed
consolidated statement of changes in equity, the condensed consolidated
statement of cash flows, and related notes (the "Interim financial
information").
Based on our review, nothing has come to our attention that causes us to
believe that the condensed consolidated set of financial statements in the
half-yearly financial report for the six months ended 30 June 2024 is not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, , 'Interim Financial Reporting', and the
Disclosure Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 (Revised), "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued for use in the
United Kingdom. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2, the annual financial statements of the Company are
prepared in accordance with UK adopted IFRS. The condensed set of financial
statements included in this half-yearly financial report have been prepared in
accordance with UK adopted International Accounting Standard 34, "Interim
Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis of Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410 (Revised), however future events or conditions may cause the
entity to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with UK adopted International Accounting Standard 34, 'Interim
Financial Reporting' and the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of review report
This report is made solely to the Company in accordance with ISRE (UK) 2410
(Revised) issued by the Financial Reporting Council. Our work has been
undertaken so that we might state to the Company those matters we are required
to state to them in an independent review report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this report, or for
the conclusions we have formed.
Sanjay Ranchhoojee (Senior Statutory Auditor)
For and on behalf of Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
30 Old Bailey,
London, United Kingdom
EC4M 7AU
Date: 31 July 2024
Condensed consolidated income statement
For the six months to 30 June 2024
Unaudited Six months to 30 June Unaudited Audited
2024 Six months to Year to
30 June 30 December
2023 2023
(restated)(1)
Note £m £m £m
Continuing operations
Revenue 3b, 4 34.5 28.5 59.0
Reversal of expected credit loss 0.3 - 0.1
Cost of sales (18.5) (14.2) (31.5)
Gross profit 16.3 14.3 27.6
Administrative costs (4.9) (4.8) (9.9)
Loss on revaluation of investment properties 3a, 7a (1.5) (0.3) (8.1)
Other gains and losses - (0.5) (0.1)
Profit on ordinary activities before financing 9.9 8.7 9.5
Finance income 0.4 0.3 0.5
Finance costs (5.2) (4.1) (9.9)
Profit before tax 5.1 4.9 0.1
Tax (charge)/credit 5 (0.6) 1.2 3.6
Profit for the period 4.5 6.1 3.7
All results derive from continuing operations
Basic earnings per share 6 2.0p 3.6p 2.0p
Diluted earnings per share 6 2.0p 3.5p 1.9p
EPRA earnings per share
EPRA basic earnings per share 6 3.4p 4.2p 5.6p
EPRA diluted earnings per share 6 3.3p 4.1p 5.5p
Condensed consolidated statement of comprehensive income
For the six months to 30 June 2024
Unaudited Unaudited Audited
six months to six months to Year to
30 June 30 June 30 December 2023
2024 2023
£m £m £m
Profit for the period 4.5 6.1 3.7
Other comprehensive income - - -
Total comprehensive income for the period 4.5 6.1 3.7
The results for the current and preceding periods are fully attributable to
equity shareholders.
The EPRA alternative performance measures used throughout this report are
industry best practice performance measures established by the European Public
Real Estate Association (EPRA). They are defined in the Glossary to the
Financial Statements. EPRA Earnings and EPRA EPS are shown in Note 6 to
these condensed financial statements. EPRA net reinstatement value (NRV), net
tangible assets (NTA) and net disposal value (NDV) are shown in Note 16 to
these condensed financial statements. We consider EPRA NTA to be the most
relevant measure for our business.
(1) Comparative figures for the period to 30 June 2023 have been restated for
an adjustment to service charge income and expenditure recognised in the
period. There is no impact on Profit as explained in note 2.
Condensed consolidated balance sheet
At 30 June 2024
Unaudited Audited
30 June
30 December
2024
2023
Note £m £m
Non-current assets
Investment properties 7 371.5 369.6
Plant and equipment 8 3.6 3.5
Right of use assets 9 18.9 20.1
Receivables and other assets 10 9.1 7.8
Deferred tax 3.0 3.6
Total non-current assets 406.1 404.6
Current assets
Receivables and other assets 10 11.4 16.5
Cash and cash equivalents 11 40.3 38.2
Total current assets 51.7 54.7
Total assets 457.8 459.3
Current liabilities
Trade and other payables 12 (27.7) (30.2)
Lease liabilities 13 (3.1) (3.1)
Bank loans 14 - (42.7)
Total current liabilities (30.8) (76.0)
Net current assets/(liabilities) 20.9 (21.3)
Non-current liabilities
Bank loans 14 (197.9) (155.0)
Other payables (0.2) (0.3)
Lease liabilities 13 (25.0) (26.0)
Total non-current liabilities (223.1) (181.3)
Total liabilities (253.9) (257.3)
Net assets 203.9 202.0
Equity
Share capital 23.3 22.5
Share premium 27.6 24.6
Merger reserve 60.3 60.3
Own shares reserve (0.2) (0.2)
Retained earnings 92.9 94.8
Equity shareholders' funds 203.9 202.0
Basic net assets per share 16 87.5p 89.8p
EPRA net reinstatement value per share 16 85.2p 87.9p
EPRA net tangible assets per share 16 85.2p 87.9p
EPRA net disposal value per share 16 91.1p 93.5p
Condensed consolidated statement of changes in equity
For the six months to 30 June 2024
Share Share Merger reserve(2) Own shares reserve(3) Retained Earnings
Capital Premium(1) Total Equity
£m £m £m £m £m £m
Balance at 30 December 2022 (Audited) 16.9 1.7 60.3 - 100.2 179.1
Profit for the period - - - - 6.1 6.1
Other comprehensive result for the period - - - - - -
Total comprehensive income for the period - - - - 6.1 6.1
Credit to equity for equity-settled share-based payments - - - - 0.3 0.3
Dividends paid, including scrip - - - - (4.7) (4.7)
Shares issued, net of costs 0.5 1.9 - - - 2.4
Balance at 30 June 2023 17.4 3.6 60.3 - 101.9 183.2
(unaudited)
Loss for the period - - - - (2.4) (2.4)
Other comprehensive result for the period - - - - - -
Total comprehensive income for the period - - - - (2.4) (2.4)
Credit to equity for equity-settled share-based payments - - - - 0.4 0.4
Dividends paid, including scrip - - - - (4.7) (4.7)
Shares issued, net of costs 5.1 21.0 - - - 26.1
Other movements - - - (0.2) (0.4) (0.6)
Balance at 30 December 2023 22.5 24.6 60.3 (0.2) 94.8 202.0
Profit for the period - - - - 4.5 4.5
Other comprehensive result for the period - - - - - -
Total comprehensive income for the period - - - - 4.5 4.5
Credit to equity for equity-settled share-based payments - - - - 0.2 0.2
Dividends paid, including scrip - - - - (6.6) (6.6)
Shares issued, net of costs 0.8 3.0 - - - 3.8
Balance at 30 June 2024 23.3 27.6 60.3 (0.2) 92.9 203.9
(unaudited)
Notes:
1 These reserves are not distributable.
2 The merger reserve of £60.3 million arose on the Group's capital
raising in 2009 which was structured so as to allow the Company to claim
merger relief under section 612 of the Companies Act 2006 on the issue of
ordinary shares. The merger reserve is available for distribution to
shareholders.
3 Own shares relate to shares purchased out of distributable profits
and therefore reduce reserves available for distribution.
Condensed consolidated cash flow statement
For the six months to 30 June 2024
Unaudited Unaudited Audited
Six months
Six months
Year to 30 December
to 30 June 2024
to 30 June 2023
2023
Note £m £m £m
Operating activities
Net cash from operations 15 11.6 10.0 20.1
Interest paid (4.0) (3.3) (6.6)
Interest received 0.4 0.3 0.5
Cash flows from operating activities 8.0 7.0 14.0
Investing activities
Purchase of plant and equipment (0.5) (0.6) (2.0)
Acquisition costs relating to investment properties - - (43.0)
Capital expenditure on investment properties (2.4) (11.1) (18.7)
Cash flows from investing activities (2.9) (11.7) (63.7)
Financing activities
Dividends paid (net of scrip) including withholding tax (1.4) (1.4) (5.2)
Bank loans drawn down - - 16.0
Loan arrangement costs (0.1) - (0.6)
Derivatives purchased (1.3) - (1.3)
Issue of ordinary shares - - 25.0
Costs of share issue - - (1.1)
Fixed payment under head leases (0.2) (0.3) (0.4)
Cash flows from financing activities (3.0) (1.7) 32.4
Net increase/(decrease) in cash and cash equivalents 2.1 (6.4) (17.3)
Cash and cash equivalents at the beginning of the period 38.2 55.5 55.5
Cash and cash equivalents at the end of the period 40.3 49.1 38.2
Notes to the condensed financial statements
For the six months to 30 June 2024
1 General information
The comparative information included for the year ended 30 December 2023 does
not constitute statutory accounts as defined in section 434 of the Companies
Act 2006. A copy of the statutory accounts for that year has been delivered to
the Registrar of Companies. The auditor has reported on those accounts: their
report was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498(2) or (3) of the
Companies Act 2006.
The Group's financial performance is not materially impacted by seasonal
fluctuations.
2 Accounting policies
Basis of preparation
The annual financial statements of Capital & Regional plc are prepared in
accordance with IFRS as adopted by the United Kingdom. The condensed set of
financial statements included in this half-yearly financial report has been
prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by
the United Kingdom. The financial statements are prepared in GBP being the
functional currency of the Group.
The condensed consolidated interim financial information has been prepared on
the basis of the accounting policies, significant judgements, key assumptions
and estimates as set out in the notes to the Group's annual financial
statements for the year ended 30 December 2023. Taxes on income in the interim
periods are accrued using the tax rate that would be applicable to expected
earnings in the period.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date, regardless of whether that price is directly observable
or estimated using another valuation technique. In estimating the fair value
of an asset or liability, the Group takes into account the characteristics of
the asset or liability if market participants would take those characteristics
into account when pricing the asset or liability at the measurement date. Fair
value for measurement and/or disclosure purposes in these financial statements
is determined on such basis, except for share-based payments that are within
the scope of IFRS 2, leasing transactions that are within the scope of IFRS
16, and measurements that have some similarities to fair value but are not
fair value, such as net realisable value in IAS 2 or value in use in IAS 36.
In addition, for financial reporting purposes, fair value measurements are
categorised into Level 1, 2 or 3 based on the degree to which the inputs to
the fair value measurements are observable and the significance of the inputs
to the fair value measurement in its entirety, which are described as follows:
· Level 1 inputs are quoted prices (unadjusted) in active markets for
identical assets or liabilities.
· Level 2 inputs are inputs other than quoted prices included within
Level 1, that are observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices).
· Level 3 inputs are unobservable inputs for the asset or liability.
The Half-Year Report was approved by the Board on 31 July 2024.
Prior period restatement
A prior period adjustment has been made in respect of the service charge
income and expenditure recognised to 30 June 2023, the impact of which is a
£2.2 million reduction in Revenue and a corresponding £2.2 million reduction
in Cost of Sales. The impact on Profit and Net Asset Value is £nil.
Key judgements and sources of estimation uncertainty
The preparation of financial statements requires the Directors to make
estimates that may affect the reported amounts of assets and liabilities,
income and expenses. The key sources of estimation uncertainty are as
reported in the annual audited financial statements for the year ended 30
December 2023. With the exception of those below, there are no key judgements
impacting the financial statements.
Property valuation
The valuation of the Group's property portfolio is inherently subjective due
to, among other factors, the individual nature of each property, its location
and the expected future rental revenues from that particular property. As a
result, the valuations the Group places on its property portfolio are subject
to a degree of uncertainty and are made on the basis of assumptions which may
not prove to be accurate. We are now in a phase of the valuation cycle where
there is persistent negative sentiment and low transactional evidence as such
greater judgement has been applied.
The investment property valuation contains a number of assumptions upon which
the valuation of the Group's properties as at 30 June 2024 was based. The
assumptions on which the property valuation reports have been based include,
but are not limited to, matters such as the tenure and tenancy details for the
properties, the condition of the properties, prevailing market yields and
comparable market transactions. These assumptions are market standard and
accord with the Royal Institution of Chartered Surveyors (RICS) Valuation -
Professional Standards UK 2014 (revised January 2022).
If the assumptions upon which the valuation was based prove to be inaccurate,
this may have an impact on the value of the Group's investment properties,
which could in turn have an effect on the Group's financial position and
results. Estimated rental values and equivalent yields are considered key
assumptions. Note 7c provides sensitivity analysis estimating the impact that
changes in the estimated rental values or equivalent yields would have on the
Group's property valuations. Valuations are discussed further in note 7.
Deferred tax
Deferred tax liabilities are generally provided for in full and deferred tax
assets are recognised to the extent that it is judged probable that future
taxable profit will arise against which the temporary differences will be
utilised. In particular, the Company has exercised judgement in respect of the
deferred tax asset held on the Statement of Financial Position. Based on the
Company's forecasts, it is considered probable that this will be utilised over
a reasonable timeframe.
2 Accounting policies (continued)
Increase in credit risk
When measuring expected credit loss the Group uses reasonable and supportable
forward looking information, which is based on assumptions for the future
movement of different economic drivers and how these drivers will affect each
other. In assessing whether the credit risk of an asset has significantly
increased the Group takes into account qualitative and quantitative reasonable
and supportable forward looking information. Probability of default
constitutes a key input in measuring expected credit losses (ECL). Probability
of default is an estimate of the likelihood of default over a given time
horizon, the calculation of which includes historical data, assumptions and
expectations of future conditions. Receivables are discussed in note 10.
Going concern
Under the UK Corporate Governance Code the Board needs to report whether the
business is a going concern. In making its assessment of Going Concern, the
Group has considered the general risk environment and the specific risks that
relate to the Group and its sector.
At 30 June 2024, the Group had total cash at bank on balance sheet of £36.4
million, of which £20.8 million was held centrally outside of secured loan
arrangements. This provides a significant cash contingency to cover any
reasonable disruption to operations in both the base and downside scenarios
that have been modelled for at least the period of the next 18 months that is
considered for going concern purposes.
In respect of the £140 million Mall debt the Group is currently compliant
with all covenant tests on the facility. On the Ilford £39 million
facility, as well as extending the loan maturity to September 2025 and
agreeing further loan extension options out to December 2027 the Group have
agreed various improvements to covenant terms that run until the new maturity
and beyond if the extension options are triggered. On Hemel Hempstead the
Group has a waiver of all covenants on the £4 million loan facility until
maturity in July 2025. The Group also has also an option to extend maturity
by one or two years. The Group signed a £16 million loan facility in
September 2023 to part finance the acquisition of Gyle in Edinburgh.
All of the Group's asset backed loan facilities are ring-fenced within their
own SPV structures with no recourse to Capital & Regional plc and no
cross-default provisions.
In making its assessment of Going Concern, the Group has run updated forecasts
on both a base case and downside basis. In the latter, the Group has
sensitised rent collection to 90%, reduced car park and ancillary income by
10% and removed any contribution from Snozone to reflect how a significant
downturn in expected trading could impact cashflows. The Group has also
considered a 15% reduction in property valuations both from the Group's 30
June 2024 valuations and valuations undertaken by the Group's respective
lenders.
The combination of the cash maintained on the Group's balance sheet and
actions available within management's control provides sufficient contingency
to cover all of the various downside sensitivities modelled in combination to
the most adverse end of the scenarios modelled. At the most adverse end the
Group would need to take some additional measures to preserve cash involving
some combination of reducing or deferring Capital Expenditure and/or reducing
dividend payments or utilising a Scrip option.
In coming to its Going Concern conclusion, the Group has also considered, but
not relied upon, other options available to generate or conserve additional
cash, to reduce debt levels and to fund value accretive capital expenditure
and letting initiatives. These include but are not limited to the potential
disposal of assets either in whole or part and the potential raising of
additional funds.
Having due regard to all of the above matters and after making appropriate
enquiries, the Directors have a reasonable expectation that the Group and the
Company have adequate resources to continue in operational existence for the
foreseeable future. Therefore, the Board continues to adopt the Going Concern
basis in preparing the financial statements.
New and revised standards issued and are effective
The adoption of the following standards, amendments, and interpretations in
the current year has not had a material impact upon the Groups results.
Amendments to IFRS 17 Insurance Contracts
Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors: Definition of Accounting Estimates
Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and
Liabilities arising from single transaction
International Tax Reform-Pillar Two Model Rules - Amendments to IAS 12
Amendments to IAS 1 - Presentation of Financial Statements and IFRS Practice
Statement 2 Making Materiality Judgements: Disclosure of Accounting Policies
New and revised standards issued but not yet effective
At the date of authorisation of these financial statements, the Group has not
applied the following new and revised IFRS Standards that have been issued but
are not yet effective:
Amendment to IFRS 16 - Leases: Lease liability in a sale and leaseback
Amendment to IAS 1 - Classification of Liabilities as Current or Non-Current
Amendments to IAS 7 - Statement of cash flows and IFRS 7 Financial
Instruments: Disclosures: Supplier finance Agreement
Amendments to IAS 21 - The effects of changes in foreign exchange rates lack
of exchangeability
Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments:
Disclosures: Classification and Measurement of Financial Instruments
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 19 Subsidiaries without Public Accountability: Disclosures
None of these standards are anticipated to have a material impact upon the
Group's results.
3 Operating segments
3a Operating segment performance
The Group's operating segments are Shopping Centres, Snozone and
Group/Central. Shopping Centres includes the results of the Group's centres at
Ilford, Hemel Hempstead, and those centres within The Mall loan facility,
namely Maidstone, Walthamstow and Wood Green. It also includes the results of
Gyle shopping centre in Edinburgh from the date of acquisition on 6 September
2023.
Group/Central includes management fee income, Group overheads incurred by
Capital & Regional plc, Capital & Regional Property Management and
other subsidiaries and the interest expense on the Group's central borrowing
facility.
The Shopping Centres segments derive their revenue from the rental of
investment properties. The Snozone and Group/ Central segments derive their
revenue from the operation of indoor ski slopes and the management of property
funds or schemes respectively. The split of revenue between these
classifications satisfies the requirement of IFRS 8 to report revenues from
different products and services. Depreciation and charges in respect of
share-based payments represent the only significant non-cash expenses.
Shopping Centres Snozone Group/ Total
Central
Six months to 30 June 2024 (Unaudited) Note £m £m £m
£m
Rental income from external sources 3b 20.1 - - 20.1
Property and void costs(1) (6.4) - - (6.4)
Net rental income 13.7 - - 13.7
Net interest expense (4.6) - 0.4 (4.2)
Snozone income/Management fees(2) 3b - 8.3 0.7 9.0
Snozone/Management expenses - (6.4) (3.3) (9.7)
Depreciation - - (0.2) (0.2)
Variable overhead - - (0.4) (0.4)
Adjusted Profit/(loss) 9.1 1.9 (2.8) 8.2
Revaluation of properties (1.5) - - (1.5)
Snozone depreciation and amortisation - (1.1) - (1.1)
Notional interest (net of rent expense within EBITDA) - 0.8 - 0.8
Loss on financial instruments (0.6) - - (0.6)
Long-term incentives - - (0.3) (0.3)
Tax (charge)/credit - - (0.6) (0.6)
Other items - - (0.4) (0.4)
Profit/(loss) 7.0 1.6 (4.1) 4.5
Total assets 3b 406.9 24.2 26.7 457.8
Total liabilities 3b (224.1) (25.8) (4.0) (253.9)
Net assets/(liabilities) 182.8 (1.6) 22.7 203.9
(1) Includes expected credit loss.
(2) Asset management fees of £1.2 million charged from the Group's Capital
& Regional Property Management entity to the Group's Shopping Centres have
been excluded from the table above.
( )
3 Operating segments (continued)
3a Operating segment performance
Shopping Centres Snozone Group/ Total
Central
Six months to 30 June 2023 (Unaudited) Note £m £m £m
£m
Rental income from external sources 3b 16.6 - - 16.6
Property and void costs(1) (4.9) - - (4.9)
Net rental income 11.7 - - 11.7
Net interest expense (3.7) - 0.2 (3.5)
Snozone income/Management fees(2) 3b - 7.7 1.2 8.9
Snozone/Management expenses - (6.1) (3.2) (9.3)
Depreciation - - (0.1) (0.1)
Variable overhead - - (0.7) (0.7)
Adjusted Profit/(loss) 8.0 1.6 (2.6) 7.0
Revaluation of properties (0.3) - - (0.3)
Loss on disposal/transaction costs (0.6) - - (0.6)
Snozone depreciation and amortisation - (1.0) - (1.0)
Notional interest (net of rent expense within EBITDA) - 0.3 - 0.3
Gain on financial instruments (0.3) - - (0.3)
Long-term incentives - - (0.4) (0.4)
Tax (charge)/credit - (0.3) 1.5 1.2
Other items 0.2 - - 0.2
Profit/(loss) 7.0 0.6 (1.5) 6.1
Total assets 3b 369.6 26.0 28.9 424.5
Total liabilities 3b (210.1) (27.6) (3.6) (241.3)
Net assets/(liabilities) 159.5 (1.6) 25.3 183.2
(1) Includes expected credit loss.
(2) Asset management fees of £1.1 million charged from the Group's Capital
& Regional Property Management entity to the Group's Shopping Centres have
been excluded from the table above.
3 Operating segments (continued)
3a Operating segments
Shopping Centres
Snozone Group/ Total
Central
Year to 30 December 2023 Note £m £m £m £m
Rental income from external sources 3b 34.7 - - 34.7
Property and void costs(1) (10.8) - - (10.8)
Net rental income 23.9 - - 23.9
Interest income 0.5 0.5
Interest expense (7.9) - - (7.9)
Snozone income/Management fees(2) 3b - 14.9 1.9 16.8
Management expenses - (12.6) (6.3) (18.9)
Depreciation - - (0.3) (0.3)
Variable overhead - - (1.4) (1.4)
Adjusted Profit/(loss) 16.0 2.3 (5.6) 12.7
Revaluation of properties (8.1) - - (8.1)
Loss on disposal/transaction costs (0.3) - - (0.3)
Snozone depreciation and amortisation - (2.2) - (2.2)
Notional interest (net of rent expense within EBITDA) - 0.8 - 0.8
Loss on financial instruments (2.0) - - (2.0)
Long-term incentives - - (0.8) (0.8)
Tax credit - (0.3) 3.9 3.6
Profit/(loss) 5.6 0.6 (2.5) 3.7
Total assets 3b 408.5 26.0 24.8 459.3
Total liabilities 3b (225.2) (28.8) (3.3) (257.3)
Net assets/(liabilities) 183.3 (2.8) 21.5 202.0
( )
(1) Includes expected credit loss.
(2) Asset management fees of £2.3 million charged from the Group's Capital
& Regional Property Management entity to wholly owned assets have been
excluded from the table above as they are eliminated within the Group
consolidation.
3b Reconciliations of reportable revenue, assets and liabilities
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 30 December
2024 2023 2023
(restated)(1)
Revenue Note £m £m £m
Rental income from external sources including associates 3a 20.1 16.6 34.7
Other revenue - - 0.1
Service charge income 5.8 3.3 8.2
Management fees 3a 0.7 1.3 1.9
Snozone income 3a 8.3 7.7 14.9
Revenue for reportable segments 34.9 28.9 59.8
Elimination of inter-segment revenue (0.4) (0.4) (0.8)
Revenue and other income per consolidated income statement 34.5 28.5 59.0
Revenue by country
UK 32.2 26.4 55.0
Spain 2.3 2.1 4.0
Revenue and other income per consolidated income statement 34.5 28.5 59.0
( )
(1) Comparative figures for the period to 30 June 2023 have been restated for
an adjustment to service charge income and expenditure recognised in the
period. There is no impact on Profit.
3 Operating segments (continued)
3b Reconciliations of reportable revenue, assets and liabilities (continued)
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 30 December
2024 2023 2023
Assets £m £m £m
Shopping Centres 406.9 369.6 408.5
Snozone 24.2 26.0 26.0
Group/Central 26.7 28.9 24.8
Total assets of reportable segments and Group assets 457.8 424.5 459.3
Liabilities
Shopping Centres (224.1) (210.1) (225.2)
Snozone (25.8) (27.6) (28.8)
Group/Central (4.0) (3.6) (3.3)
Total liabilities of reportable segments and Group liabilities (253.9) (241.3) (257.3)
Net assets by country
UK 202.7 182.0 200.4
Spain 1.2 1.2 1.6
Group net assets 203.9 183.2 202.0
4 Revenue
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 30 December
2024 2023 2023
(restated)(1)
Statutory £m £m £m
Gross rental income 16.0 13.1 27.2
Car park and other ancillary income 4.1 3.5 7.5
Rental income from external sources 20.1 16.6 34.7
Service charge income 5.8 3.3 8.2
External management fees 0.3 0.9 1.1
Snozone income 8.3 7.7 14.9
Other income - - 0.1
Revenue and other income per consolidated income statement 34.5 28.5 59.0
(1) Comparative figures for the period to 30 June 2023 have been restated for
an adjustment to service charge income and expenditure recognised in the
period. There is no impact on Profit.
5 Tax
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 30 December
2024 2023 2023
Tax (charge)/credit £m £m £m
UK corporation tax - - -
Adjustments in respect of prior years - 1.1 1.0
Total current tax credit - 1.1 1.0
Deferred tax (0.6) 0.1 2.6
Total tax (charge)/credit (0.6) 1.2 3.6
5 Tax (continued)
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 30 December
2024 2023 2023
Tax credit/(charge) reconciliation £m £m £m
Profit before tax on continuing operations 5.1 4.9 0.1
Expected tax charge at 25% (30 June 2023 22% and 30 December 2023: 23.52%) (1.3) (0.9) -
REIT exempt income and gains 0.9 0.7 (0.2)
Non-allowable expenses and non-taxable items (0.2) (0.3) (1.3)
Excess tax losses - 0.5 0.7
Prior year adjustments - 1.1 1.0
Movement in deferred taxes - 0.1 3.4
Total tax (charge)/credit - continuing operations (0.6) 1.2 3.6
On 10 June 2021 Finance Act 2021 received Royal Assent and enacted provisions
maintaining the main corporation tax rate at 19% for the year commencing 1
April 2022 and increasing the rate to 25% for the year commencing 1 April
2023.
Consequently the UK corporation tax rate at which deferred tax is booked in
the Financial Statements is 25% (June 2023: 22%).
The Group has recognised a deferred tax asset of £3 million (30 December
2023: £3.6 million). The group has recognised deferred tax assets for the
non-REIT profit entities in respect of head lease payments and capital
allowances and certain residual tax losses carried forward to the extent that
future matching taxable profits are expected to arise.
No deferred tax asset has been recognised in respect of temporary differences
arising from investments or investments in associates in the current or prior
years as it is not certain that a deduction will be available when the asset
crystallises.
The Group has £17.2 million (30 December 2023: £20 million) of unused
revenue tax losses, all of which are in the UK. A deferred tax asset has been
recognised in respect of £6.3 million of these losses (30 December 2023:
£9.1 million) where the Group considers it is sufficiently certain taxable
profits will arise to utilise the losses. A deferred tax asset has not been
recognised on the remaining £10.9 million of those losses due to restrictions
on the utilisation of these losses. The Group also has unused capital losses
of £24.2 million (30 December 2023: £24.2 million) that are available for
offset against future gains. No deferred tax has been recognised in respect of
these losses owing to the unpredictability of future capital gains and other
reasons which may restrict the utilisation of the losses. The unused revenue
and capital losses do not have an expiry date.
The Group converted to a group REIT on 31 December 2014. Therefore, the Group
does not pay UK corporation tax on the profits and gains from qualifying
rental business in the UK provided it meets certain conditions.
Non-qualifying profits and gains of the Group continue to be subject to
corporation tax as normal. In order to retain group REIT status certain
ongoing criteria must be maintained. The main criteria are as follows:
· at the start of each accounting year, the value of the assets of
the property rental business plus cash must be at least 75% of the total value
of the Group's assets;
· at least 75% of the Group's total profits must arise from the
property rental business; and
· at least 90% of the Group's UK property rental profits as
calculated under tax rules must be distributed.
The Directors intend that the Group should continue as a group REIT for the
foreseeable future, with the result that deferred tax is no longer recognised
on temporary differences relating to the property rental business.
6 Earnings per share
The European Public Real Estate Association ("EPRA") has issued
recommendations for the calculation of earnings per share information as shown
in the following table:
Six months to 30 June 2024 (unaudited) Six months to 30 June 2023 Year to 30 December 2023
(unaudited) (audited)
Note Profit EPRA Adjusted Profit Profit EPRA Adjusted Profit Profit EPRA
Adjusted Profit
Profit (£m)
Profit for the period 4.5 4.5 4.5 6.1 6.1 6.1 3.7 3.7 3.7
Revaluation (loss)/gain on investment properties (net of tax) 3a - 1.5 1.5 - 0.3 0.3 - 8.1 8.1
Loss on disposal (net of tax) 3a - - - - 0.6 0.6 - 0.3 0.3
Changes in fair value of financial instruments 3a - 0.6 0.6 - 0.3 0.3 - 2.0 2.0
Share-based payments 3a - - 0.3 - - 0.4 - - 0.8
Tax - 0.6 0.6 - - (1.2) - (3.6) (3.6)
Other items(1) - 0.4 0.7 - (0.2) 0.5 - - 1.4
Profit 4.5 7.6 8.2 6.1 7.1 7.0 3.7 10.5 12.7
Earnings per share(2) 2.0p 3.4p 3.6p 3.6p 4.2p 4.2p 2.0p 5.6p 6.8p
Diluted earnings per share(2) 2.0p 3.3p 3.6p 3.5p 4.2p 4.1p 1.9p 5.5p 6.6p
(1) Other Items includes the adjustments for Leisure EBITDA.
(2) EPRA and Adjusted Profit earnings per share are non-GAAP measures.
Weighted average number of shares (m) Six months to 30 June 2024 (Unaudited) Six months to 30 June 2023 (Unaudited) Year to 30 December
2023 (Audited)
Ordinary shares in issue 226.2 169.9 188.1
Own shares held (0.4) - (0.4)
Basic 225.8 169.9 187.7
Dilutive contingently issuable shares 4.6 4.3 3.9
and share options
Diluted 230.4 174.2 191.6
At the end of the period, the Group had nil (30 December 2023: nil) additional
share options and contingently issuable shares granted under share-based
payment schemes that could potentially dilute basic earnings per share in the
future but which have not been included in the calculation because they are
not dilutive or the performance conditions for vesting were not met based on
the position at 30 June 2024.
Headline earnings per share
Headline earnings per share has been calculated and presented as required by
the Johannesburg Stock Exchange Listings Requirements.
Six months to Six months to Year to
30 June 2024 (Unaudited) 30 June 2023 (Unaudited) 30 December 2023
(Audited)
Basic Diluted Basic Diluted Basic Diluted
Profit/(Loss) (£m)
Profit for the period 4.5 4.5 6.1 6.1 3.7 3.7
Revaluation of investment properties (net of tax) 1.5 1.5 0.3 0.3 8.1 8.1
Loss/(profit) on disposal of investment properties (net of tax) - - 0.6 0.6 0.3 0.3
Other items (1) 0.4 0.4 (0.2) (0.2) - -
Headline earnings 6.4 6.4 6.8 6.8 12.1 12.1
Weighted average number of shares (m)
Ordinary shares in issue 226.2 226.2 169.9 169.9 188.1 188.1
Own shares held (0.4) (0.4) - - (0.4) (0.4)
Dilutive contingently issuable shares and share options - 4.6 - 4.3 - 3.9
225.8 230.4 169.9 174.2 187.7 191.6
Headline Earnings per share 2.8p 2.8p 4.1p 4.0p 6.4p 6.3p
7 Investment properties
7a Shopping Centres
Freehold Leasehold Total
investment investment property
properties properties assets
£m £m £m
Valuation
At 30 December 2023 (Audited) 288.7 80.9 369.6
Capital expenditure/(contribution) 3.7 (0.6) 3.1
Valuation deficit(1) (1.2) - (1.2)
At 30 June 2024 (Unaudited) 291.2 80.3 371.5
(1) £(1.5) million per Income statement (30 June 2023: £(0.3) million) and
Note 3a includes letting fee amortisation adjustment of £(0.3) million (30
June 2023: £nil).
7b Property assets summary
Unaudited Audited 30 December 2023
30 June 2024 £m
£m
Investment properties at fair value - Shopping Centres 374.9 372.8
Head leases treated as finance leases on investment properties 5.4 5.4
Unamortised tenant incentives on investment properties (8.8) (8.6)
IFRS Property Value 371.5 369.6
7c Valuations
External valuations were carried out on all of the property assets detailed in
the table above. The valuations at 30 June 2024 were carried out by
independent qualified professional valuers from CBRE Limited in accordance
with RICS standards. These valuers are not connected with the Group and their
fees are charged on a fixed basis that is not dependent on the outcome of the
valuations.
Real estate valuations are complex and derived from data that is not widely
publicly available and involves a degree of judgement. For these reasons, the
valuations are classified as Level 3 in the fair value hierarchy as defined by
IFRS 13. The valuations are sensitive to changes in rent profile and yields.
There were no transfers between levels in the year.
The following table illustrates the impact of changes in key unobservable
inputs (in isolation) on the fair value of the Group's properties:
Impact on valuations of 5% change in estimated rental value Impact on valuations of 25bps change in equivalent yield Impact on valuations of 50bps change in equivalent yield
Increase Decrease Increase Decrease Increase Decrease
£m £m £m £m £m £m
15.2 (15.1) (12.1) 12.6 (23.3) 26.2
Impact on valuations of 100bps change in equivalent yield
Increase Decrease
£m £m
(43.9) 56.6
8 Plant and equipment
Leasehold improvements Fixtures and fittings Computer equipment Total
£m £m £m £m
Cost
At 31 December 2023 0.3 7.0 0.9 8.2
Additions - 0.5 - 0.5
At 30 June 2024 0.3 7.5 0.9 8.7
Accumulated Depreciation
At 31 December 2023 - (3.9) (0.8) (4.7)
Charge for the period (0.1) (0.3) - (0.4)
At 30 June 2024 (0.1) (4.2) (0.8) (5.1)
Carrying amount
At 30 June 2024 0.2 3.3 0.1 3.6
At 30 December 2023 0.3 3.1 0.1 3.5
9 Leases
Buildings
Right of use Assets £m
Cost
At 30 December 2023 (Audited) 24.7
Additions -
At 30 June 2024 (Unaudited) 24.7
Accumulated depreciation
At 30 December 2023 (Audited) (4.6)
Charge for the year (1.2)
At 30 June 2024 (Unaudited) (5.8)
Carrying value
At 30 June 2024 (Unaudited) 18.9
At 30 December 2023 (Audited) 20.1
Lease commitments relate to the leasing of the Group's registered office and
the leases of the Snozone business on its Castleford, Madrid and Milton Keynes
sites.
10 Receivables and other assets
Unaudited Audited
30 June 30 December
2024 2023
£m £m
Amounts falling due after one year:
Financial assets
Interest rate caps 1.5 0.5
Non current financial assets 1.5 0.5
Non-financial assets
Unamortised tenant incentives 3.0 2.7
Unamortised rent-free periods 4.6 4.6
Non current non-financial assets 7.6 7.3
9.1 7.8
Amounts falling due within one year:
Financial assets
Trade receivables (net of allowances) 3.7 4.3
Interest rate swaps - 0.3
Other receivables 0.1 3.8
Accrued income 1.9 1.9
Current financial assets 5.7 10.3
Non-financial assets
Prepayments 4.4 4.9
Unamortised tenant incentives 0.5 0.5
Unamortised rent-free periods 0.8 0.8
Current non-financial assets 5.7 6.2
11.4 16.5
Credit losses are calculated at an amount equal to lifetime expected credit
losses. The expected credit losses on trade receivables are estimated using a
provision matrix by reference to past default experience of the debtor and an
analysis of the debtor's current financial position, adjusted for factors that
are specific to the debtor and an assessment of both the current as well as
the forecast direction of conditions at the reporting date.
The group writes off a trade receivable when there is information indicating
that there is no realistic prospect of recovery. Changes in expected credit
loss allowance arise from increase or decrease in calculated expected credit
loss, as well as amounts written off. The group does not recognise revenue
where collectability is not reasonably expected. In the case of rental income
this relates to tenants who are insolvent and closed.
11 Cash and cash equivalents
Unaudited Audited
30 June 30 December
2024 2023
£m £m
Cash at bank 36.4 36.3
Restricted security disposals held in rent accounts 1.2 1.0
Other restricted balances 2.7 0.9
Total cash and cash equivalents 40.3 38.2
Cash at bank and in hand include amounts subject to a charge against various
borrowings and may therefore not be immediately available for general use by
the Group. Of the cash at bank and in hand £20.8 million was immediately
available free of any restrictions or conditions or held on short term deposit
at the period end date (30 December 2023 - £17.8 million). The remaining
balances are subject to meeting conditions or having passed through relevant
waterfall calculations within relevant loan facilities. All of the above
amounts at 30 June 2024 were held in Sterling other than £0.1 million which
was held in Euros and £0.5 million in South African Rand (30 December 2023:
£0.4 million in Euros and £0.7m in South African Rand).
12 Trade and other payables
30 June 30 December
2024 2023
£m £m
Amounts falling due after one year:
Financial liabilities
Share-based NI accrual 0.2 0.3
Non-derivative financial liabilities 0.2 0.3
Amounts falling due within one year:
Financial liabilities
Trade payables 2.3 5.0
Accruals 8.2 8.0
Other creditors 12.7 12.1
Non-derivative financial liabilities 23.2 25.1
Non-financial liabilities
Deferred income 3.9 4.8
Other taxation and social security 0.6 0.3
27.7 30.2
13 Leases
The Group as lessee
At the balance sheet date, the Company had outstanding commitments for future
minimum lease payments under non-cancellable leases related to land and
buildings, which fall due as set out below. These leases relate to its office
premises and the Snozone business' Basingstoke, Castleford, Milton Keynes and
Madrid sites, as well as leasehold investment property.
30 June 30 December
2024 2023
£m £m
Lease payments
Within one year (3.1) (3.1)
Between one and five years (9.3) (11.6)
After five years (125.4) (125.2)
(137.8) (139.9)
Lease payments are denominated in Sterling and have an average remaining lease
length of 48 years (30 December 2023: 48 years). Excluding head leases,
rentals are fixed for an average of 1 year (30 December 2023: 1 year). The
Group's leasehold investment property is variable based on a percentage of
performance, with a minimum payment per year of £0.4 million (2023: £0.4
million).
The lease liabilities based on the present value of payments and associated
right of use assets recognised in the consolidated balance sheet are set out
below.
30 June 30 December
2024 2023
£m £m
Right of use assets 18.9 20.1
Current lease liability (3.1) (3.1)
Non-current lease liability (25.0) (26.0)
14 Borrowings
The Group's borrowings are arranged to ensure an appropriate maturity profile
and to maintain short-term liquidity. There were no defaults or other
breaches of financial covenants that were not waived under any of the Group
borrowings during the current year or the preceding year.
Unaudited Audited
30 June 30 December
2024 2023
Borrowings at amortised cost £m £m
Secured
Fixed and swapped bank loans 179.0 179.0
Variable rate loan 20.0 20.0
Total borrowings before costs 199.0 199.0
Unamortised issue costs (1.1) (1.3)
Total borrowings after costs 197.9 197.7
Analysis of total borrowings after costs
Current - 42.7
Non-current 197.9 155.0
Total borrowings after costs 197.9 197.7
The fair value of total borrowings before costs as at 30 June 2024 was £186.5
million (30 December 2023: £187.1 million). At 30 June 2024 the Group had
no undrawn committed facilities. All loans are maintained in separate
ring-fenced Special Purpose Vehicle (SPV) structures secured against the
property interests and other assets within each SPV. There is no recourse to
other Group companies outside of the respective SPV and no cross-default
provisions.
On 8 March 2024 the Group signed an extension to its £39 million facility on
the Ilford Exchange shopping centre with Dekabank Deutsche Girozentrale. The
agreement extends maturity to September 2025 and provides two further
conditional extension options to further extend maturity to the end of
December 2026 and 2027, respectively. On commencement of the new extended
term the margin is 300 basis points. The Group has acquired an interest rate
cap to hedge the maximum all in cost at 5.50% until the current maturity of
September 2025. The facility was shown as current at 30 December 2023.
The Hemel Hempstead Marlowes shopping centre facility was shown as current on
30 December 2023 given there was a technical breach of a covenant as at that
date driven by the administration of Wilko. The technical breach was
subsequently waived, and consequently the facility is shown as non-current at
30 June 2024.
The following table provides an analysis of financial instruments that are
measured subsequent to initial recognition at fair value. All of the assets
listed were classified as Level 2, as defined in note 2 to these condensed
financial statements. There were no transfers between Levels in the year.
Unaudited Audited
30 June 30 December
2024 2023
£m £m
Interest rate caps 1.5 0.5
Interest rate swaps - 0.3
1.5 0.8
Interest rate caps and swaps are initially recognised at fair value at the
date the contract is entered into and are subsequently remeasured to their
fair value at each balance sheet date. The fair value of forward foreign
exchange contracts is calculated by reference to spot and forward exchange
rates at the balance sheet date. The fair value of interest rate caps and
swaps are calculated by reference to appropriate forecasts of yield curves
between the balance sheet date and the maturity of the instrument. Changes in
fair value are included as finance income or finance costs in the income
statement. Derivative financial instruments are classified as non-current when
they have a maturity of more than twelve months and are not intended to be
settled within one year. As the group does not apply hedge accounting, the
provisions of IFRS 9 do not apply.
15 Notes to the cash flow statement
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 30 December
2024 2023 2023
£m £m £m
Profit for the period 4.5 6.1 3.7
Adjusted for:
Income tax charge/(credit) 0.6 (1.2) (3.6)
Finance income (0.4) (0.3) (0.5)
Finance expense 5.2 4.1 9.9
Finance lease costs (head leases) - - (0.4)
Loss on revaluation of properties 1.5 0.3 8.1
Depreciation of other fixed assets 0.4 0.1 0.7
Snozone interest and amortisation 1.7 - 3.0
Other gains and losses - 0.5 0.1
Decrease/(increase) in receivables 3.6 2.5 (0.9)
Decrease in payables (5.7) (2.5) (0.7)
Non-cash movement relating to share-based payments 0.2 0.4 0.7
Net cash from operations 11.6 10.0 20.1
16 Net assets per share
30 June 2024 (Unaudited) 30 December 2023 (Audited)
Basic NAV EPRA EPRA NTA EPRA NDV EPRA NRV Basic EPRA NTA EPRA NDV
£m NRV £m £m £m NAV £m £m
£m £m
IFRS Equity attributable to shareholders 203.9 203.9 203.9 203.9 202.0 202.0 202.0 202.0
Exclude fair value of financial instruments - (1.5) (1.5) - - (0.8) (0.8) -
Include fair value of fixed interest rate debt - - - 12.5 - - - 11.9
Net asset value 203.9 202.4 202.4 216.4 202.0 201.2 201.2 213.9
Number of shares 233.0 - - - 224.9 - - -
Fully diluted number of shares - 237.6 237.6 237.6 - 228.8 228.8 228.8
Net asset value per share (pence) 87.5 85.2 85.2 91.1 89.8 87.9 87.9 93.5
Net assets per share is a non-GAAP measure.
The number of ordinary shares issued and fully paid at 30 June 2024 was
232,996,247 (30 December 2023: 224,906,731). There have been no changes to the
number of shares from 30 June 2024 to the date of this announcement.
17 Related party transactions
There have been no material changes to, or material transactions with, related
parties as described in note 29 of the annual audited financial statements for
the year ended 30 December 2023.
18 Dividends
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 30 December
2023 2023 2023
£m £m £m
Amounts recognised as distributions to equity holders in the period 6.6 4.7 9.5
Proposed interim dividend of 2.85p per share for year ended 30 December 2024 6.6 - -
The dividends shown above are gross of any take-up of Scrip offer.
Glossary of terms
Adjusted Profit is the total of Contribution from Shopping Centres, Snozone Market value is an opinion of the best price at which the sale of an interest
EBITDA and property management fees less central costs (including interest but in a property would complete unconditionally for cash consideration on the
excluding non-cash charges in respect of long-term incentive awards) after date of valuation as determined by the Group's external or internal valuers.
tax. Adjusted Profit excludes revaluation of properties, profit or loss on In accordance with usual practice, the valuers report valuations net, after
disposal of properties or investments, gains or losses on financial the deduction of the prospective purchaser's costs, including stamp duty,
instruments and exceptional one-off items. Results from Discontinued agent and legal fees.
Operations are included up until the point of disposal or reclassification as
held for sale.
Net Administrative Expenses to Gross Rent is the ratio of Administrative
Expenses net of external fee income to Gross Rental income including the
Adjusted Earnings per share is Adjusted Profit divided by the weighted average Group's share of Joint Ventures and Associates
number of shares in issue during the year excluding own shares held.
Net assets per share (NAV per share) are shareholders' funds divided by the
C&R is Capital & Regional plc, also referred to as the Group or the number of shares held by shareholders at the year end, excluding own shares
Company. held.
CRPM is Capital & Regional Property Management Limited, a subsidiary of Net initial yield (NIY) is the annualised current rent, net of revenue costs,
Capital & Regional plc, which earns management and performance fees from topped-up for contractual uplifts, expressed as a percentage of the capital
the Mall assets and certain associates and joint ventures of the Group. valuation, after adding notional purchaser's costs.
Contracted rent is passing rent and the first rent reserved under a lease or Net debt to property value is debt less cash and cash equivalents divided by
unconditional agreement for lease but which is not yet payable by a tenant. the property value.
Contribution is net rent less net interest, including unhedged foreign Net interest is the Group's share, on a see-through basis, of the interest
exchange movements. payable less interest receivable of the Group and its associates and joint
ventures.
Capital return is the change in market value during the year for properties
held at the balance sheet date, after taking account of capital expenditure Net rent or Net rental income (NRI) Net Rental Income is rental income from
calculated on a time weighted basis. properties, less provisions for expected credit losses, property and
management costs. It is a standard industry measure.
Debt is borrowings, excluding unamortised issue costs.
Nominal equivalent yield (NEY) is a weighted average of the net initial yield
and reversionary yield and represents the return a property will produce based
upon the timing of the income received, assuming rent is received annually in
EPRA earnings per share (EPS) is the profit / (loss) after tax excluding gains arrears on gross values including the prospective purchaser's costs.
on asset disposals and revaluations, movements in the fair value of financial
instruments, intangible asset movements and the capital allowance effects of
IAS 12 "Income Taxes" where applicable, less tax arising on these items,
divided by the weighted average number of shares in issue during the year Occupancy cost ratio is the proportion of a retailer's sales compared with the
excluding own shares held. total cost of occupation being: rent, business rates, service charge and
insurance. Retailer sales are based on estimates by third party consultants
which are periodically updated and indexed using relevant data from the
C&R Trade Index.
EPRA LTV is the ratio of debt to the Market value of properties as defined by
the European Real Estate Association.
Occupancy rate is the ERV of occupied properties expressed as a percentage of
the total ERV of the portfolio, excluding development voids.
EPRA net disposal value (NDV) represents net asset value under a disposal
scenario, where deferred tax, financial instruments and certain other
adjustments are calculated to the full extent of their liability, net of any
resulting tax. Passing rent is gross rent currently payable by tenants including car park
profit but excluding income from non-trading administrations and any assumed
uplift from outstanding rent reviews.
EPRA net reinstatement value (NRV) is net asset value adjusted to reflect the
value required to rebuild the entity and assuming that entities never sell
assets. Assets and liabilities, such as fair value movements on financial Rent to sales ratio is Contracted rent excluding car park income, ancillary
derivatives are not expected to crystallise in normal circumstances and income and anchor stores expressed as a percentage of net sales.
deferred taxes on property valuation surpluses are excluded.
REIT - Real Estate Investment Trust.
EPRA net tangible assets (NTA) is a proportionally consolidated measure,
representing the IFRS net assets excluding the mark-to-market on derivatives
and related debt adjustments, the mark-to-market on the convertible bonds, the
carrying value of intangibles as well as deferred taxation on property and Return on equity is the total return, including revaluation gains and losses,
derivative valuations. divided by opening equity plus time weighted additions to and reductions in
share capital, excluding share options exercised.
Estimated rental value (ERV) is the Group's external valuers' opinion as to
the open market rent which, on the date of valuation, could reasonably be Reversionary percentage is the percentage by which the ERV exceeds the passing
expected to be obtained on a new letting or rent review of a unit or property. rent.
ERV growth is the total growth in ERV on properties owned throughout the year Reversionary yield is the anticipated yield to which the net initial yield
including growth due to development. will rise once the rent reaches the ERV.
Gearing is the Group's debt as a percentage of net assets. See through Temporary lettings are those lettings for one year or less.
gearing includes the Group's share of non-recourse debt in associates and
joint ventures.
Total property return incorporates net rental income and capital return
expressed as a percentage of the capital value employed (opening market value
Interest cover is the ratio of Adjusted Profit (before interest, tax, plus capital expenditure) calculated on a time weighted basis.
depreciation and amortisation) to the interest charge (excluding amortisation
of finance costs and notional interest on head leases).
Total return is the Group's total recognised income or expense for the year as
set out in the consolidated statement of comprehensive income expressed as a
Like-for-like figures, unless otherwise stated, exclude the impact of property percentage of opening equity shareholders' funds.
purchases and sales on year to year comparatives.
Total shareholder return (TSR) is a performance measure of the Group's share
Snozone EBITDA or EBITDA is an alternative performance measure for the Snozone price over time. It is calculated as the share price movement from the
business. It excludes Depreciation, Amortisation, (notional) Interest, Tax beginning of the year to the end of the year plus dividends paid, divided by
and non-operational one-off items. It includes rent expense, based on share price at the beginning of the year.
contractual payments adjusted for rent free periods. This provides a measure
of Snozone trading performance which removes the profiling impact of IFRS 16
that would otherwise see a significantly higher charge in early years of a
lease and significantly lower net charge in later years. Variable overhead includes discretionary bonuses and the costs of awards to
Directors and employees made under the 2018 LTIP and other share schemes which
are spread over the performance period.
Loan to value (LTV) is the ratio of debt excluding fair value adjustments for
debt and derivatives, to the Market value of properties.
EPRA performance measures (Not subject to review opinion)
30 June 2024 30 June 2023 30 December
2023
EPRA earnings (£m) 7.6 7.1 10.5
EPRA earnings per share (diluted) 3.3p 4.1p 5.6p
EPRA reinstatement value (£m) 202.4 181.7 201.2
EPRA net reinstatement value per share 85p 102p 88p
EPRA net tangible assets (£m) 202.4 181.7 201.2
EPRA net tangible assets per share 85p 102p 88p
EPRA net disposal value (£m) 216.4 205.8 213.9
EPRA net disposal value per share 91p 116p 94p
EPRA LTV (£m) 45.9% 44.6% 45.4%
EPRA Cost ratios
30 June 2024 30 June 2023 30 December
2023
£m £m £m
Cost of sales (adjusted for IFRS head lease differential) 18.4 16.1 31.1
Administrative costs 4.5 4.8 9.7
Service charge income (5.8) (5.5) (8.2)
Management fees (0.2) (0.9) (1.2)
Less Snozone (indoor ski operation) costs (6.7) (6.8) (14.0)
Less inclusive lease costs recovered through rent (1.8) (1.1) (2.3)
EPRA costs (including direct vacancy costs) 8.4 6.6 15.1
Direct vacancy costs (1.8) (1.1) (2.7)
EPRA costs (excluding direct vacancy costs) 6.6 5.5 12.4
Gross rental income 20.1 16.6 34.7
Less ground rent costs (0.2) (0.5) (0.7)
Less inclusive lease costs recovered through rent (1.8) (1.1) (2.3)
Gross rental income 18.1 15.0 31.7
EPRA cost ratio (including direct vacancy costs) 46.4% 44.0% 47.6%
EPRA cost ratio (excluding vacancy costs) 36.5% 36.7% 39.1%
( )
EPRA net initial yield and EPRA topped-up net initial yield 30 June 2024 30 December 2023
£m £m
Investment property 374.9 372.8
Completed property portfolio 374.9 372.8
Allowance for capital costs 14.0 14.8
Allowance for estimated purchasers' costs 25.3 22.5
Grossed up completed property portfolio valuation 414.2 410.1
Annualised cash passing rental income 37.0 35.6
Property outgoings (2.5) (3.1)
Annualised net rents 34.5 32.5
Add: notional rent expiration of rent free periods or other lease incentives 1.2 0.5
Topped up annualised rent 35.7 33.0
EPRA net initial yield 8.3% 7.9%
EPRA topped-up net initial yield 8.6% 8.0%
30 June 2024 30 June 2023 30 December
2023
EPRA earnings (£m) 7.6 7.1 10.5
EPRA earnings per share (diluted) 3.3p 4.1p 5.6p
EPRA reinstatement value (£m) 202.4 181.7 201.2
EPRA net reinstatement value per share 85p 102p 88p
EPRA net tangible assets (£m) 202.4 181.7 201.2
EPRA net tangible assets per share 85p 102p 88p
EPRA net disposal value (£m) 216.4 205.8 213.9
EPRA net disposal value per share 91p 116p 94p
EPRA LTV (£m) 45.9% 44.6% 45.4%
EPRA Cost ratios
30 June 2024 30 June 2023 30 December
2023
£m £m £m
Cost of sales (adjusted for IFRS head lease differential) 18.4 16.1 31.1
Administrative costs 4.5 4.8 9.7
Service charge income (5.8) (5.5) (8.2)
Management fees (0.2) (0.9) (1.2)
Less Snozone (indoor ski operation) costs (6.7) (6.8) (14.0)
Less inclusive lease costs recovered through rent (1.8) (1.1) (2.3)
EPRA costs (including direct vacancy costs) 8.4 6.6 15.1
Direct vacancy costs (1.8) (1.1) (2.7)
EPRA costs (excluding direct vacancy costs) 6.6 5.5 12.4
Gross rental income 20.1 16.6 34.7
Less ground rent costs (0.2) (0.5) (0.7)
Less inclusive lease costs recovered through rent (1.8) (1.1) (2.3)
Gross rental income 18.1 15.0 31.7
EPRA cost ratio (including direct vacancy costs) 46.4% 44.0% 47.6%
EPRA cost ratio (excluding vacancy costs) 36.5% 36.7% 39.1%
( )
EPRA net initial yield and EPRA topped-up net initial yield 30 June 2024 30 December 2023
£m £m
Investment property 374.9 372.8
Completed property portfolio 374.9 372.8
Allowance for capital costs 14.0 14.8
Allowance for estimated purchasers' costs 25.3 22.5
Grossed up completed property portfolio valuation 414.2 410.1
Annualised cash passing rental income 37.0 35.6
Property outgoings (2.5) (3.1)
Annualised net rents 34.5 32.5
Add: notional rent expiration of rent free periods or other lease incentives 1.2 0.5
Topped up annualised rent 35.7 33.0
EPRA net initial yield 8.3% 7.9%
EPRA topped-up net initial yield 8.6% 8.0%
Asset portfolio information - excluding properties held for sale
(Not subject to review opinion)
At 30 June 2024
Physical data
Number of properties 6
Number of lettable units 543
Lettable space (sq ft - million) 2,047
Valuation data
Properties at independent valuation (£m) 374.9
Adjustments for head leases and tenant incentives (£m) (3.4)
Properties as shown in the financial statements (£m) 371.5
Initial yield (%) 7.61%
Equivalent yield (%) 8.81%
Reversion (%) 8.1%
Lease length (years)
Weighted average lease length to break (years) 2.9
Weighted average lease length to expiry (years) 4.7
Passing rent (£m) of leases expiring in:
Six months to 30 December 2024 3.4
Year to 30 December 2025 3.6
Three years to 30 December 2028 9.4
ERV (£m) of leases expiring in:
Six months to 30 December 2024 4.0
Year to 30 December 2025 1.8
Three years to 30 December 2028 3.1
Passing rent (£m) subject to review in:
Six months to 30 December 2024 1.5
Year to 30 December 2025 0.6
Three years to 30 December 2028 2.8
ERV (£m) of passing rent subject to review in:
Six months to 30 December 2024 1.5
Year to 30 December 2025 0.5
Three years to 30 December 2028 3.4
Rental Data
Contracted rent at period end (£m) 38.2
Passing rent at period end (£m) 37.0
ERV at period end (£m per annum) 40.0
Occupancy rate (%) 93.9%
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