REG - Circle Property PLC - Interim Results

Circle PropertyAnnouncement

17/12/2018 07:05

RNS Number : 5974K
Circle Property PLC
17 December 2018
 


17 December 2018
Circle Property Plc
("Circle" or the "Company")
Interim Results show continued strong NAV and income growth
Circle Property Plc (AIM: CRC), the specialist regional UK office investment and development company today announces its results for the six months to 30 September 2018. The results show a continuation of the strong asset management led total returns that the Company has achieved since IPO in February 2016. 
Financial highlights
·   NAV per share up 30.33% to £2.75 (30 September 2017: £2.11), representing a 19.80% uplift since 31 March 2018 (£2.30p). The Company's NAV has now increased by 84.56% since IPO in February 2016.
·     Portfolio valuation up 12.37% to £124.8m (31 March 2018: £111.13m).
·    Since IPO, Circle has delivered a NAV compound average growth rate of 29.5% and a total return compound average growth rate of 32.1%.
·   9.9% increase in annualised contracted rental income to £7.51m (31 March 2018: £6.83m). A further £214,582 of contracted rent has been signed since the period end.
·      25.2% increase in net rental income to £3.80m (30 September 2017: £3.01m).
·      60% increase in profit before tax to £13.80m (30 September 2017: £8.6m).
·      28% increase in net operating profit to £2.30m excluding gains on investment properties (30 September 2017: £1.80m).
·      Due to investment sales above valuation and valuation uplifts, LTV has reduced to 40% (31 March 2018: 45.5%).
·     Interim dividend of 3.0p per share, which maintains the level of dividend paid for the previous reporting period. This dividend will be paid on 31 January 2019 to shareholders on the register on 28 December 2018 with an ex-dividend date of 27 December 2018.
Operational highlights
·    The Company's current redevelopment and refurbishment pipeline is now complete, with Somerset House, providing 38,805 sq ft (10.33% of the Company's asset total office floor area) completed and let within the last 12 months. BE Offices' fit-out of Somerset House is expected to be complete in Spring 2019 with one third of the space already reserved for licensees of the serviced office operator. 
·      Portfolio occupancy of 90%
·      WAULT of 10.15 years to break (31 March 2018: 7.24 years) and 11.07 years (31 March 2018: 10.50 years) to expiry.
·      Leasing momentum continues on competitive terms:
·     In July 2018, ALD Automotive Ltd leased 5,400 sq ft in Park House, Northampton at a rent of £77,462 per annum (£14.32 psf) for a 10-year term with a five-year tenant break.
·    Two new five-year leases completed at 36 Great Charles Street Birmingham, for a combined annual headline rent of £93,264, before incentives. In June 2018, Vectos Microsim Ltd took the 1,253 sq ft rear suite of the seventh floor and in July 2018, Shaw Trust leased the 3,600 sq ft first floor.
·    In September, a lease variation was completed with the Company's largest tenant, Compass Contract Services Limited (part of Compass Group) at Kents Hill Park, Milton Keynes, whereby the 15 and 20 year break options on a 25 year lease were removed, whilst the 3% per annum fixed rental increases were replaced by annual RPI increases.
·     In November 2018 (post period end) the remaining 13,500 sq ft on the ground floor at K2 Kents Hill Business Park, Milton Keynes was let to Deutsche Telekom subsidiary, T-Systems Ltd, at £214,582 pa (£15.50 per sq ft) on a 10-year term with tenant break at the fifth year.
Portfolio restructuring and disposal programme
·    In line with the Company's strategy of disposing of legacy non-core assets and focusing its portfolio on the undersupplied regional office market, a petrol filling station let to the Co-Operative Group in Amesbury was sold to an institutional investor for £3.5m in July 2018, representing an 18.64% uplift on the 31 March 2018 valuation. The sale was simultaneous with the completion of a lease extension from 2 to 15 years, without breaks.
·   In November 2018, two shops let to Morrisons and A-Plan Insurance in Week Street, Maidstone were disposed of for £1.35m, in line with the valuation.
John Arnold, CEO of Circle Property Plc, commented:
"Circle's continued focus on the active management of its regional office assets, particularly the leasing of space in the redevelopment and refurbishment pipeline, has once again delivered strong portfolio valuation growth and strengthened the Company's income profile during the first half of the year.
This has been achieved despite the increased levels of hesitation in signing new tenancies, which we believe largely results from the nervousness created by extended uncertainty surrounding Brexit negotiations. However, as anticipated, this has led to a number of buying opportunities emerging and we are finding more off-market deals as a result.
As a consequence of our active asset management, we are also pleased to have disposed of non-core assets at or above valuation.
We have continued to sign tenants since the period end which gives us confidence in our ability to lease the remaining vacant space in the portfolio, adding further income and value to our assets."
ENDS
 
This announcement is inside information for the purposes of Article 7 of EU Regulation 596/2014.
 




Circle Property Plc


 +44 (0)20 7930 8503




John Arnold, CEO
Edward Olins, COO


 




 


 




Cenkos Securities plc


+44 (0) 20 7397 8900




Azhic Basirov
Katy Birkin
 
Radnor Capital
Joshua Cryer
Iain Daly
 


 
 
 
+44 (0) 20 3897 1830




FTI Consulting


+44 (0)20 3727 1000




Giles Barrie
Richard Sunderland
Eve Kirmatzis


Circle@fticonsulting.com




 
Chief Executive's Statement
We have had another strong start to the year building on the momentum achieved in the previous reporting periods and delivering on the strategy we set out at the time of the IPO. Our efforts have translated to significant growth in NAV and portfolio valuation. Further increases to contracted rent roll, as well as double-digit net rental income growth, combined with an extension of the average lease length to over 11 years have resulted in the portfolio generating higher quality and more visible income to underpin the Company's dividend.
We have now completed the Company's current redevelopment and refurbishment programme and our focus is now firmly on both leasing the remaining 10% of the portfolio which was vacant at the end of the period and continuing to explore ways to grow the Company.
In terms of leasing up space, we have made good progress after a strong first half, with additional lets occurring since the period end. The fact that our stock selection and asset management programme means we are able to offer well located and recently refurbished high quality space at competitive rents, combined with the ongoing decline in regional office supply due to residential conversion permitted development rights, gives us confidence in our ability to continue to attract tenants. 
In addition to creating value and income through leasing vacant space, we will also continue to undertake initiatives that allow us to drive returns from our leased stock such as through the lease re-gear we agreed at Kents Hill Park, Milton Keynes, which resulted in Circle securing a 25 year RPI linked lease without break with the tenant.
With this established strong platform we continue to assess ways to grow the Company including refinancing with our existing and other lenders, as well as potentially seeking capital from new investors. We will also continue to dispose of our non-core legacy assets, with further progress made in this regard early in the second half, as well as selectively disposing of our standing assets where we receive a compelling offer. Both of these initiatives would provide us with capital to reinvest into opportunities where we believe we can create greater returns by applying our asset management skills. 
Portfolio overview
Kents Hill Park
In November 2018, we completed a letting to Deutsche Telekom subsidiary, T-Systems Ltd, at £214,582 per annum on the remaining ground floor area.               With 50% of the building now let, we are pleased with the level of interest in the remaining space. Once we make further progress in the lettings, we intend to take back K3 from the tenant to undertake a further refurbishment. 
Somerset House
The office refurbishment has completed and are let entirely to BE Group Limited, a serviced office provider, at an annual rent of £795,729. The two ground floor restaurant units are let to Las Iguanas and Camerons Brewery at a combined annual rental of £395,000.
Great Charles Street, Birmingham
36 Great Charles Street, Birmingham, is being marketed and during the reporting period, we let two offices totalling 4,853 sq ft to Vectos Microsim and the Shaw Trust. The combined annual headline rent is £93,264 before incentives.  We still have half of the building available to let, with 12,638 sq ft available in four floors which are highly divisible to suit current occupancy trends.
One Castlepark, Tower Hill Bristol
Refurbishment of the 2nd floor north comprising 6,351 sq ft has completed following the JISC surrender of the second floor suite and re-grant of the third floor at almost double the rent per sq ft previously passing.
135 Aztec West, Bristol
We are preparing for a comprehensive refurbishment of this 13,258 sq ft property as our tenant only has one year remaining on their lease where the current rent equated to only £13.20 p.s.f.  The current rental value, post refurbishment is likely to exceed £20 per sq. ft. 
Outlook
This time last year we reported that there had been a slowdown in the wider lettings market which, as mentioned above, remains the case today and we do not expect a return to normality until the uncertainty around the country's divorce from the EU is clarified. Despite  this, the location and quality of our refurbished assets has been proven and we have continued to lease existing space.  With our refurbishment programme complete and with less than 8% portfolio vacancy, we would not expect the same significant period-on-period return in the second half of 2018 onwards, from the current portfolio.
However, we continue to look for acquisition opportunities and are confident that the platform and track record we have established since IPO, having delivered a total return compound average growth rate of 32.1% stands us in good stead to continue to deliver shareholder value in the future.
Dividend Announcement
The Board declares an interim dividend of 3.0 pence per share, which maintains the level of dividend paid for the previous reporting period. This dividend will be paid on 31 January 2019 to shareholders on the register on 28 December 2018 with an ex-dividend date of 27 December 2018.
 
 




Circle Property Plc


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




Condensed consolidated statement of comprehensive income


 


 


 


 




for the 6 months ended 30 September 2018


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




 


 


 


6 months to

30 September

2018


 


6 months to

30 September

2017


 


12 months to

31 March

2018




 


Note


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Rental income


4


 


3,644,353


 


2,943,673


 


6,211,820




Other income


4


 


157,473


 


92,736


 


142,585




 


 


 


3,801,826


 


3,036,409


 


6,354,405




 


 


 


 


 


 


 


 




Property expenses


5


 


(277,512)


 


(425,210)


 


(831,189)




 


 


 


 


 


 


 


 




Net rental income


 


 


3,524,314


 


2,611,199


 


5,523,216




 


 


 


 


 


 


 


 




Administrative expenses


6


 


(1,250,374)


 


(801,185)


 


(2,368,220)




 


 


 


 


 


 


 


 




Operating profit before gains on investment properties


 


 


2,273,940


 


1,810,014


 


3,154,996




 


 


 


 


 


 


 


 




Gains on disposal of investment properties


 


 


494,933


 


-


 


1,497




Gains on revaluation of investment properties


11


 


11,733,347


 


7,307,151


 


11,980,810




 


 


 


 


 


 


 


 




Operating profit


 


 


14,502,220


 


9,117,165


 


15,137,303




 


 


 


 


 


 


 


 




Finance income


7


 


2,056


 


1,293


 


3,620




Finance costs


8


 


(738,061)


 


(553,225)


 


(1,149,720)




 


 


 


 


 


 


 


 




Net finance costs


 


 


(736,005)


 


(551,932)


 


(1,146,100)




 


 


 


 


 


 


 


 




Profit for the period before taxation


 


 


13,766,215


 


8,565,233


 


13,991,203




 


 


 


 


 


 


 


 




Taxation


9


 


(227,372)


 


99,030


 


534,864




 


 


 


 


 


 


 


 




Profit after taxation


 


 


13,538,843


 


8,664,263


 


14,526,067




 


 


 


 


 


 


 


 




Earnings per share


10


 


0.48


 


0.31


 


0.51




 


 


 


 


 


 


 


 




NAV per share


 


 


2.75


 


2.11


 


2.30




 


 


 


 


 


 


 


 




There is no comprehensive income other than that included in the profit for the period. All of the profit for the period is attributable to the owners of the Company.




 


 


 


 


 


 


 


 




All items in the above statement derive from continuing operations.


 


 


 


 




 


 


 


 


 


 


 


 




The accompanying notes form an integral part of these condensed consolidated interim financial statements.




 
 
 




Condensed consolidated statement of financial position


 


 


 


 




as at 30 September 2018


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




 


Note


 


30 September 2018


 


30 September 2017


 


31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




Non-current assets


 


 


 


 


 


 


 




Investment properties


11


 


115,750,716


 


96,287,600


 


106,372,636




Property plant and equipment


 


 


49,883


 


26,080


 


56,287




Trade and other receivables


12


 


8,516,589


 


6,768,045


 


7,201,845




Deferred tax


 


 


1,482,055


 


1,314,814


 


1,727,959




Financial instruments at fair value through profit and loss


 


-


 


86


 


-




 


 


 


125,799,243


 


104,396,625


 


115,358,727




 


 


 


 


 


 


 


 




Current assets


 


 


 


 


 


 


 




Trade and other receivables


12


 


1,242,391


 


1,352,137


 


1,141,191




Deferred tax


 


 


165,388


 


148,626


 


-




Cash and cash equivalents


 


 


3,014,269


 


5,161,605


 


2,639,783




 


 


 


4,422,048


 


6,662,368


 


3,780,974




 


 


 


 


 


 


 


 




Total assets


 


 


130,221,291


 


111,058,993


 


119,139,701




 


 


 


 


 


 


 


 




Equity


 


 


 


 


 


 


 




Stated capital


 


 


42,542,179


 


42,542,179


 


42,542,179




Treasury share reserve


 


 


(77,486)


 


(380,001)


 


(257,487)




Retained earnings


 


 


35,404,032


 


17,588,004


 


22,714,092




Total equity


 


 


77,868,725


 


59,750,182


 


64,998,784




 


 


 


 


 


 


 


 




Non-current liabilities


 


 


 


 


 


 


 




Borrowings


13


 


50,100,845


 


48,800,835


 


51,815,616




 


 


 


50,100,845


 


48,800,835


 


51,815,616




 


 


 


 


 


 


 


 




Current liabilities


 


 


 


 


 


 


 




Trade and other payables


14


 


2,251,721


 


2,507,976


 


2,325,301




 


 


 


2,251,721


 


2,507,976


 


2,325,301




 


 


 


 


 


 


 


 




Total liabilities


 


 


52,352,566


 


51,308,811


 


54,140,917




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




Total liabilities and equity


 


 


130,221,291


 


111,058,993


 


119,139,701




 


 


 


 


 


 


 


 




The condensed consolidated interim financial statements were approved by the Board of Directors on 14 December 2018.




 


 


 


 


 


 


 


 




The accompanying notes form an integral part of these condensed consolidated interim financial statements.




 
 
 




Condensed consolidated statement of cash flows


 


 


 


 


 


 




for the 6 months ended 30 September 2018


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




 


 


 


6 months to

30 September

2018


 


6 months to

30 September

2017


 


12 months to

31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Cash flows from operating activities


 


 


 


 


 


 


 




Profit for the period before taxation


 


 


13,766,215


 


8,565,233


 


13,991,203




Adjustments for:


 


 


 


 


 


 


 




Finance income


 


 


(2,056)


 


(1,293)


 


(3,620)




Finance expense


 


 


738,061


 


553,225


 


1,149,720




Depreciation


 


 


6,404


 


3,077


 


7,405




Gains on revaluation of investment properties


 


 


(11,733,347)


 


(7,307,151)


 


(11,980,810)




Gains on disposal of investment properties


 


 


(494,933)


 


-


 


(1,497)




Share based payments


 


 


180,001


 


-


 


122,514




Amortisation of loan arrangement fees


 


 


35,229


 


29,406


 


44,188




Fair value movement on interest rate swaps


 


 


-


 


625


 


710




(Increase) in trade and other receivables


 


 


(1,415,944)


 


(406,733)


 


(293,097)




(Decrease)/increase in trade and other payables


 


 


(155,751)


 


(113,253)


 


141,050




 


 


 


 


 


 


 


 




Cash generated from operating activities


 


 


923,879


 


1,323,136


 


3,177,766




 


 


 


 


 


 


 


 




Interest and other finance costs paid


 


 


(695,358)


 


(553,312)


 


(1,116,591)




Interest received


 


 


2,056


 


1,293


 


3,620




 


 


 


 


 


 


 


 




Net cash from operating activities


 


 


230,577


 


771,117


 


2,064,795




 


 


 


 


 


 


 


 




Cash flows from investing activities


 


 


 


 


 


 


 




Cost of refurbishment of investment properties


 


 


(702,121)


 


(2,948,608)


 


(4,528,703)




Cost of acquisition of investment property


 


 


-


 


-


 


(4,466,652)




Proceeds from disposal of investment properties


 


 


3,444,933


 


-


 


1,497




Cost of additions of property plant and equipment


 


 


-


 


-


 


(34,534)




 


 


 


 


 


 


 


 




Net cash from investing activities


 


 


2,742,812


 


(2,948,608)


 


(9,028,392)




 


 


 


 


 


 


 


 




Cash flows from financing activities


 


 


 


 


 


 


 




Repayment of borrowings


 


 


(1,750,000)


 


-


 


-




Drawdown of borrowings


 


 


-


 


3,181,005


 


6,181,005




Dividends paid


 


 


(848,903)


 


(735,716)


 


(1,471,432)




 


 


 


 


 


 


 


 




Net cash used in financing activities


 


 


(2,598,903)


 


2,445,289


 


4,709,573




 


 


 


 


 


 


 


 




Net increase / (decrease) in cash and cash equivalents


 


 


374,486


 


267,798


 


(2,254,024)




Cash and cash equivalents at the beginning of the period


 


 


2,639,783


 


4,893,807


 


4,893,807




Cash and cash equivalents at the end of the period


 


 


3,014,269


 


5,161,605


 


2,639,783




 


 


 


 


 


 


 


 




The accompanying notes form an integral part of these condensed consolidated interim financial statements.




 




Condensed consolidated statement of changes in equity


 


 


 


 




for the 6 months ended 30 September 2018


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 




 


 


Share

capital


 


Treasury shares reserve


 


Retained earnings


 


Total




 


 


£


 


£


 


£


 


£




As at 1 April 2017


 


42,542,179


 


(380,001)


 


9,659,457


 


51,821,635




 


 


 


 


 


 


 


 


 




Profit for the period


 


-


 


-


 


8,664,263


 


8,664,263




 


 


 


 


 


 


 


 


 




Dividends


 


-


 


-


 


(735,716)


 


(735,716)




 


 


 


 


 


 


 


 


 




As at 30 September 2017


 


42,542,179


 


(380,001)


 


17,588,004


 


59,750,182




 


 


 


 


 


 


 


 


 




Profit for the period


 


-


 


-


 


5,861,804


 


5,861,804




 


 


 


 


 


 


 


 


 




Share-based payments


 


 


 


122,514


 


-


 


122,514




 


 


 


 


 


 


 


 


 




Dividends


 


-


 


-


 


(735,716)


 


(735,716)




 


 


 


 


 


 


 


 


 




As at 31 March 2018


 


42,542,179


 


(257,487)


 


22,714,092


 


64,998,784




 


 


 


 


 


 


 


 


 




Profit for the period


 


-


 


-


 


13,538,843


 


13,538,843




 


 


 


 


 


 


 


 


 




Share-based payments


 


-


 


180,001


 


-


 


180,001




 


 


 


 


 


 


 


 


 




Dividends


 


-


 


-


 


(848,903)


 


(848,903)




 


 


 


 


 


 


 


 


 




As at 30 September 2018


 


42,542,179


 


(77,486)


 


35,404,032


 


77,868,725




 


 


 


 


 


 


 


 


 




The accompanying notes form an integral part of these condensed consolidated interim financial statements.




 
 




Notes to the condensed consolidated interim financial statements


 


 


 




for the 6 months ended 30 September 2018


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




1 General information


 


 


 


 


 


 


 




These condensed consolidated interim financial statements are for Circle Property Plc ("the Company") and its subsidiary undertakings (together referred to as the "Group").




 


 


 


 


 


 


 


 




The Company's shares are admitted to trading on AIM, a market operated by the London Stock Exchange plc. The Company is domiciled and registered in Jersey, Channel Islands. The address of its registered office is 3rd Floor, Standard Bank House, 47-49 La Motte Street, St Helier, Jersey, JE2 4SZ.




 


 


 


 


 


 


 


 




The nature of the Company's operations and its principal activities are that of property investment in the UK.




 


 


 


 


 


 


 


 




2 Principal accounting policies


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




Basis of accounting


 


 


 


 


 


 


 




The condensed consolidated interim financial statements have been prepared in accordance with the IAS 34 "Interim Financial Reporting", and should be read in conjunction with the Group's last consolidated financial statements as at and for the year ended 31 March 2018. They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last financial statements.




 


 


 


 


 


 


 


 




Going concern


 


 


 


 


 


 


 




The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chief Executive's statement. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in these financial statements.




 


 


 


 


 


 


 


 




The Group has adequate financial resources together with long term rental contracts with a wide range of tenants. As a consequence, the Directors believe that the Group is well placed to manage its business risk successfully.




 


 


 


 


 


 


 


 




The Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they have adopted the going concern basis in preparing the interim financial statements.




 


 


 


 


 


 


 


 




Estimates and judgements


 


 


 


 


 


 




In preparing these condensed consolidated interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.




 


 


 


 


 


 


 


 




The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 March 2018.




 


 


 


 


 


 


 


 




3 Operating segments


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




During the period the Group operated in one geographical segment, which is the United Kingdom, and one reporting segment, which is investment in commercial property. Therefore no segmental reporting is required.




 
 
 




4 Revenue


 


 


6 months to

30 September

2018


 


6 months to

30 September

2017


 


12 months to

31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Rental income


 


 


3,122,433


 


2,676,937


 


5,816,610




SIC 15 adjustment (spreading of lease incentives)


 


 


521,920


 


266,736


 


395,210




 


 


 


3,644,353


 


2,943,673


 


6,211,820




 


 


 


 


 


 


 


 




Insurance recovery


 


 


63,473


 


48,053


 


99,398




Other income


 


 


94,000


 


44,683


 


43,187




 


 


 


157,473


 


92,736


 


142,585




 


 


 


 


 


 


 


 




 


 


 


3,801,826


 


3,036,409


 


6,354,405




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




5 Property expenses


 


 


6 months to

30 September

2018


 


6 months to

30 September

2017


 


12 months to

31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Property expenses


 


 


41,149


 


140,501


 


318,002




Property service charges


 


 


88,343


 


144,397


 


259,588




Property repairs and maintenance costs


 


 


-


 


13,376


 


29,532




Property insurance


 


 


74,967


 


62,496


 


130,328




Property rates


 


 


73,053


 


39,440


 


68,739




Lease variation costs


 


 


-


 


25,000


 


25,000




 


 


 


 


 


 


 


 




 


 


 


277,512


 


425,210


 


831,189




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




6 Administrative expenses


 


 


6 months to

30 September

2018


 


6 months to

30 September

2017


 


12 months to

31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Staff costs


 


 


559,987


 


397,675


 


1,321,982




Administration fees


 


 


127,307


 


124,248


 


250,309




Legal and professional fees


 


 


468,441


 


210,474


 


504,856




Audit fees


 


 


2,004


 


1,300


 


51,875




Accountancy fees


 


 


2,593


 


3,221


 


7,648




Rent, rates and other office costs


 


 


32,281


 


31,533


 


63,909




Other overheads


 


 


51,357


 


29,657


 


160,236




Depreciation of tangible fixed assets


 


 


6,404


 


3,077


 


7,405




 


 


 


 


 


 


 


 




 


 


 


1,250,374


 


801,185


 


2,368,220




 




7 Finance income


 


 


6 months to

30 September

2018


 


6 months to

30 September

2017


 


12 months to

31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Bank interest


 


 


2,056


 


1,293


 


3,620




 


 


 


 


 


 


 


 




 


 


 


2,056


 


1,293


 


3,620




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




8 Finance costs


 


 


6 months to

30 September

2018


 


6 months to

30 September

2017


 


12 months to

31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Loan interest


 


 


682,116


 


512,518


 


1,073,998




Loan commitment fees


 


 


20,716


 


10,676


 


15,824




Loan arrangement fees


 


 


35,229


 


29,406


 


59,188




Fair value movement on interest rate swaps


 


 


-


 


625


 


710




 


 


 


 


 


 


 


 




 


 


 


738,061


 


553,225


 


1,149,720




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




9 Taxation


 


 


6 months to

30 September

2018


 


6 months to

30 September

2017


 


12 months to

31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Current tax


 


 


146,856


 


171,315


 


(77,031)




Over provision of current tax in prior year


 


 


-


 


(77,031)


 


-




Deferred tax charge / (credit)


 


 


80,516


 


57,942


 


(457,833)




Under provision of deferred tax credit in prior year


 


 


-


 


(251,256)


 


-




 


 


 


 


 


 


 


 




 


 


 


227,372


 


(99,030)


 


(534,864)




 




10 Earnings per share


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




Basic earnings per share has been calculated on profit after tax attributable to ordinary shareholders for the period (as shown on the condensed consolidated statement of comprehensive income) and the weighted average number of ordinary shares in issue during the period.




 


 


 


 


 


 


 


 




 


 


 


6 months to

30 September

2018


 


6 months to

30 September

2017


 


12 months to

31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Profit for the period


 


 


13,538,843


 


8,664,263


 


14,526,067




 


 


 


 


 


 


 


 




Weighted average number of shares


 


 


28,296,762


 


28,296,762


 


28,296,792




 


 


 


 


 


 


 


 




Earnings per ordinary share:


 


 


0.48


 


0.31


 


0.51




 


 


 


 


 


 


 


 




In the opinion of the Board, treasury shares held to satisfy share awards to management currently do not have any material value and hence do not have any dilutive effect. Therefore no diluted earnings per share has been presented.




11 Investment properties


 


 


30 September 2018


 


30 September 2017


 


31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Balance brought forward


 


 


114,075,000


 


93,025,000


 


93,025,000




Cost of refurbishment of investment properties


 


 


594,733


 


-


 


4,207,328




Cost of acquisition of investment property


 


 


-


 


2,926,114


 


4,466,652




Disposal of investment properties


 


 


(2,950,000)


 


-


 


-




Gains on revaluation of investment properties


 


 


11,733,347


 


7,307,151


 


11,980,810




Lease incentive amortisation


 


 


1,421,920


 


266,735


 


395,210




 


 


 


 


 


 


 


 




Fair value of investment properties per valuation report


 


 


124,875,000


 


103,525,000


 


114,075,000




 


 


 


 


 


 


 


 




Unamortised lease incentives


 


 


(9,124,284)


 


(7,237,400)


 


(7,702,364)




 


 


 


 


 


 


 


 




Closing fair value


 


 


115,750,716


 


96,287,600


 


106,372,636




 


 


 


 


 


 


 


 




The fair value of the Group's investment properties per the Valuation Report amounted to £124,875,000. The difference between the fair value of the investment properties per the Valuation Report and the fair value per the balance sheet of £9,124,284 relates to unamortised lease incentives which are recorded in the financial statements within non-current and current assets.




 


 


 


 


 


 


 


 




The Group has pledged all of its investment properties to secure banking facilities granted to the Group as detailed in note 13.




 


 


 


 


 


 


 


 




The fair value of the Group's investment properties at 30 September 2018 has been arrived at on the basis of valuation carried out by Savills (UK) Limited. The valuation was carried out in accordance with the Practice Statements contained in the Appraisal and Valuation Standards as published by the RICS. In forming their opinion of the fair value, the independent valuer's had regard to the current best use of the property, its investment attributes and recent comparable transactions. The valuation was carried out using the "All Risks Yield" method taking into consideration both sales and rental evidence and formulating the opinion of market value taking into account the properties' locations, specifications and specific characteristics.




 


 


 


 


 


 


 


 




During the period the Group disposed of the property at Solstice Park, Amesbury for a consideration of £3,500,000.




 




12 Trade and other receivables


 


 


30 September 2018


 


30 September 2017


 


31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Non-current


 


 


 


 


 


 


 




Lease incentives


 


 


8,516,589


 


6,768,045


 


7,201,845




 


 


 


 


 


 


 


 




Current


 


 


 


 


 


 


 




Lease incentives


 


 


607,695


 


469,355


 


500,519




Amounts due from property agents


 


 


104,822


 


92,421


 


147,689




Amounts due from tenants


 


 


384,760


 


173,707


 


127,930




VAT


 


 


-


 


463,076


 


167,227




Other receivables


 


 


145,114


 


153,578


 


197,826




 


 


 


 


 


 


 


 




 


 


 


1,242,391


 


1,352,137


 


1,141,191




 




13 Borrowings


 


 


30 September 2018


 


30 September 2017


 


31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Brought forward


 


 


51,901,360


 


45,720,355


 


45,720,355




Loan repayments


 


 


(1,750,000)


 


-


 


-




Loan drawdowns


 


 


-


 


3,181,005


 


6,181,005




 


 


 


 


 


 


 


 




Facility drawn down


 


 


50,151,360


 


48,901,360


 


51,901,360




 


 


 


 


 


 


 


 




Unamortised lending costs


 


 


(50,515)


 


(100,525)


 


(85,744)




 


 


 


 


 


 


 


 




Total borrowings


 


 


50,100,845


 


48,800,835


 


51,815,616




 




The Group entered into to a £55 million (2017: £50m) revolving facility with National Westminster Bank plc, with effect from 28 February 2018. The facility is split into two facilities:  (i) a £50m Core facility and (ii) a £5m Headroom facility.  On the Core facility interest is charged at 1.85% over LIBOR if the loan to value is less than 55% and 2.75% over LIBOR if the loan to value is above 55%.  On the Headroom facility interest is charged at 2.35% over LIBOR if the loan to value is less than 55% and 2.75% over LIBOR if the loan to value is above 55%.




 


 


 


 


 


 


 


 




A commitment fee is payable at the rate of 40% per annum of the margin, where the margin is 1.85% (and the Loan to Value is less than 55%) and 2.75% (when the Loan to Value is 55% or higher).




 




14 Trade and other payables


 


 


30 September 2018


 


30 September 2017


 


31 March

2018




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Trade payables


 


 


103,554


 


638,437


 


430,276




Property improvement costs


 


 


72,612


 


498,364


 


180,000




Wages and salaries


 


 


-


 


54,459


 


443,960




Deferred income


 


 


1,511,160


 


782,446


 


810,288




Rental deposit accounts


 


 


85,586


 


129,622


 


129,703




Loan interest payable


 


 


291,074


 


215,333


 


248,371




VAT


 


 


22,379


 


-


 


-




Valuation fee


 


 


15,000


 


18,000


 


37,428




Legal and professional fees


 


 


3,500


 


-


 


-




Audit fee


 


 


-


 


-


 


45,275




Current taxation


 


 


146,856


 


171,315


 


-




 


 


 


 


 


 


 


 




 


 


 


2,251,721


 


2,507,976


 


2,325,301




 




15 Post balance sheet events


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




There have been no post balance sheet events that would require disclosure or adjustment to these financial statements.




 




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IR LLFVTFVLSLIT