REG - Circle Property PLC - Interim Results

Circle PropertyAnnouncement

25/11/2020 07:01

RNS Number : 3923G
  
Circle Property PLC
  
25 November 2020
  
 

25 November 2020
 
Circle Property Plc
Interim Results for the six months ended 30 September 2020
Strong average rent collection of 92.5% during period
 
Circle Property Plc (AIM:CRC) ("Circle", the "Company" or the "Group"), which invests in, develops and actively manages well-located regional office assets, announces its interim results for the six months ended 30 September 2020.
John Arnold, Chief Executive of Circle Property Plc, said:
"During the period, we have continued to benefit from our innovative approach and close relationships with our tenants, which has resulted in very strong rent collection rates of over 90% and a 10% increase in total rental income.
"We believe that demand, particularly in good locations in the regions, will rebound after a short-term contraction as a result of Covid-19. The established position we have in our chosen markets, with a portfolio of assets selected on the strength of location and letting prospects, leaves us well-placed to generate income and value over the medium term."
Financial highlights:
·    Strong rental receipts throughout the year and since lockdown in March, running at an average of 92.5% of rents due for March and June quarters
·    10% increase in total rental income to £3.9m (30 September 2019: £3.6m)
·    12% increase in operating profit before property revaluations to £2.7m (30 September 2019: £2.4m)
·    Unaudited estimated NAV per share of £2.83 (30 September 2019: £2.78; 31 March 2020: £2.85 per share), representing a 90% increase since admission to AIM in February 2016
·    Proposed interim dividend of 2.5p per share for the six months ended 30 September 2020 (30 September 2019: 3.3p)
 
Chief Executive Statement
Despite the recent impact of the second lockdown, which saw a further decrease in demand within the wider commercial office market, we have seen the benefits of the quality of our assets and our long-term experience in actively managing them, evidenced through our strong rental collection. We work hard to identify high calibre tenants unlikely to default prior to leasing with them, meaning that our rental income is robust even in the current climate.
During the period to 30 September 2020, it has been pleasing that we have continued to let space, in this case to two new tenants, demonstrating that we remain able to build value and generate additional income. At Elizabeth House, London Road, Staines, DES Group have taken a 5-year lease with a break at the third year on the first floor at £32,500 p.a (£20.95 psf) and at Park House, Pavilion Drive, Northampton, NAK Consulting have taken a 10-year lease (with a 5-year break clause) at £34,000 p.a. on 2,373 sq ft (£14.33 psf).
It is the Board's view that further implemented lockdowns and the requirement to work from home, will lead to a rising number of commercial property tenants exercising break options across the market. Some businesses are downsizing as a result of more staff working from home on a permanent or part time basis. We have seen evidence of this in two small lettings within our portfolio but have worked with them to secure smaller suites, demonstrating our ability to actively manage the asset base.
As reported previously, we are of the view that working from home will, in the medium term, prove to be unpopular and more unproductive, and that offices will prove their worth when there is a return to something like normality. In the meantime, the recent news about the roll-out of Covid-19 vaccines is encouraging, yet it remains difficult to call when we may see a significant improvement in occupational demand.
Whilst the general market backdrop is challenging, we are seeing the predominant take-up of vacant offices being for those that are fully-fitted, either by virtue of the previous tenant having vacated, or because the landlord has undertaken a category B fit-out, specifically to encourage tenants that do not want to commit to that capital expense.
In order to respond to this shifting demand for 'plug and play' offices that are ready to move into, with telephony and broadband already connected, we are undertaking fit-outs of our vacant offices in Bristol (One Castlepark - 7,000 sq ft), Birmingham (36 Great Charles Street - 2,341 sq ft) and Maidenhead (6,400 sq ft).  It is anticipated that these projects, together with the redevelopment of 135 Aztec West, Bristol when pre-let, will account for approximately £2 million of our working capital. Again, our ability to adapt and flex around tenant requirements continues to serve us well.
As reported in our Final Results in September 2020, we remain committed to reduce gearing from the current level by opportunistic sales. We have a number of assets that have benefited from our active management approach and added value following redevelopment, lease restructures or renewals which we expect to be highly sought after.
The Board declares an interim dividend of 2.5p, which will be paid on 8 January 2021 to shareholders on the register on 4 December 2020, with an ex-dividend date of 3 December 2020.
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
 
Enquiries:




Circle Property Plc         


 +44 (0)20 7930 8503




John Arnold, CEO
Edward Olins, COO
 
 


 




 


 




Cenkos Securities plc


+44 (0)20 7397 8900




Katy Birkin
Mark Connelly
 
Radnor Capital
Joshua Cryer
Iain Daly
 


 
 
 
+44 (0)20 3897 1830




Camarco


+44 (0)20 3757 4992




Ginny Pulbrook
Oliver Head


 




 
About Circle Property Plc
 
Circle is amongst the best performing quoted UK real estate companies by NAV total return (NAV growth and dividend) having delivered consistent returns with 101% NAV growth since IPO in 2016 in absolute terms.
 
Circle focusses on acquiring assets in regional cities, many of which have significant office supply constraints, and on office assets with active management potential (refurbishment opportunities, under-rented or vacant properties or short leases), rather than just maximising initial rental yields.
 
Circle is not a Real Estate Investment Trust (REIT) and can actively recycle proceeds from asset sales into its refurbishment and redevelopment pipeline, as well as future investment opportunities, therefore targeting a broader range of returns for shareholders, which are primarily driven by NAV growth.
 
 




Condensed consolidated statement of comprehensive income


 


 


 


 




for the 6 months ended 30 September 2020


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




 


 


 


6 months to

30 September

2020


 


6 months to

30 September

2019


 


12 months to

31 March

2020




 


Note


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Rental income


4


 


3,919,307 


 


3,563,322 


 


7,497,212 




Other income


4


 


1,010,022 


 


786,923 


 


2,116,400 




 


 


 


4,929,329 


 


4,350,245 


 


9,613,612 




 


 


 


 


 


 


 


 




Property expenses


5


 


(1,269,188)


 


(970,723)


 


(2,374,556)




 


 


 


 


 


 


 


 




Net rental income


 


 


3,660,141 


 


3,379,522 


 


7,239,056 




 


 


 


 


 


 


 


 




Administrative expenses


6


 


(978,840)


 


(982,058)


 


(2,944,109)




 


 


 


 


 


 


 


 




Operating profit before gain/(loss) on investment properties


 


2,681,301 


 


2,397,464 


 


4,294,947 




 


 


 


 


 


 


 


 




(Loss)/Gain on disposal of investment properties


 


 


- 


 


(44,331)


 


235,729 




(Loss)/Gain on revaluation of investment properties


11


 


(2,534,903)


 


(390,279)


 


2,514,049 




 


 


 


 


 


 


 


 




Operating profit


 


 


146,398 


 


1,962,854 


 


7,044,725 




 


 


 


 


 


 


 


 




Finance income


7


 


2,083 


 


1,679 


 


1,531 




Finance costs


8


 


(884,516)


 


(858,920)


 


(1,885,340)




 


 


 


 


 


 


 


 




Net finance costs


 


 


(882,433)


 


(857,241)


 


(1,883,809)




 


 


 


 


 


 


 


 




Profit for the period before taxation


 


 


(736,035)


 


1,105,613 


 


5,160,916 




 


 


 


 


 


 


 


 




Taxation


9


 


113,714 


 


145,074 


 


(1,641,410)




 


 


 


 


 


 


 


 




Profit after taxation


 


 


(622,321)


 


1,250,687 


 


3,519,506 




 


 


 


 


 


 


 


 




Earnings per share


10


 


(0.02)


 


0.04 


 


0.12 




 


 


 


 


 


 


 


 




NAV per share


 


 


2.83 


 


2.78 


 


2.85 




 


 


 


 


 


 


 


 




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.


 


 


 


 




 
 
 
 




Condensed consolidated statement of financial position


 


 


 


 




as at 30 September 2020


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




 


Note


 


30 September 2020


 


30 September 2019


 


31 March

2020




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




Non-current assets


 


 


 


 


 


 


 




Investment properties


11


 


127,111,883 


 


126,146,508 


 


129,340,408 




Right of use assets


 


 


84,540 


 


- 


 


108,043 




Property plant and equipment


 


 


55,118 


 


55,035 


 


62,263 




Lease incentives


12


 


10,128,672 


 


8,546,628 


 


9,562,066 




Deferred tax asset


 


 


1,298,659 


 


1,941,676 


 


1,078,007 




 


 


 


138,678,872 


 


136,689,847 


 


140,150,787 




 


 


 


 


 


 


 


 




Current assets


 


 


 


 


 


 


 




Trade and other receivables


12


 


2,683,828 


 


1,811,350 


 


2,398,119 




Cash and cash equivalents


 


 


4,543,692 


 


2,359,771 


 


2,980,329 




 


 


 


7,227,520 


 


4,171,121 


 


5,378,448 




 


 


 


 


 


 


 


 




Total assets


 


 


145,906,392 


 


140,860,968 


 


145,529,235 




 


 


 


 


 


 


 


 




Equity


 


 


 


 


 


 


 




Stated capital


 


 


42,542,179 


 


42,542,179 


 


42,542,179 




Treasury share reserve


 


 


668,456 


 


(79,344)


 


516,048 




Retained earnings


 


 


37,000,805 


 


36,288,100 


 


37,623,126 




Total equity


 


 


80,211,440 


 


78,750,935 


 


80,681,353 




 


 


 


 


 


 


 


 




Non-current liabilities


 


 


 


 


 


 


 




Borrowings


13


 


61,822,537 


 


59,391,252 


 


60,721,840 




Lease liabilities for right of use assets


 


 


47,504 


 


- 


 


69,327 




Deferred tax liability


 


 


768,913 


 


- 


 


877,401 




 


 


 


62,638,954 


 


59,391,252 


 


61,668,568 




 


 


 


 


 


 


 


 




Current liabilities


 


 


 


 


 


 


 




Trade and other payables


14


 


3,011,500 


 


2,718,781 


 


3,134,816 




Lease liabilities for right of use assets


 


 


44,498 


 


- 


 


44,498 




 


 


 


3,055,998 


 


2,718,781 


 


3,179,314 




 


 


 


 


 


 


 


 




Total liabilities 


 


 


65,694,952 


 


62,110,033 


 


64,847,882 




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




Total liabilities and equity


 


 


145,906,392 


 


140,860,968 


 


145,529,235 




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




The condensed consolidated interim financial statements were approved by the Board of Directors on 24 November 2020.




 
 
 




Condensed consolidated statement of changes in equity


 


 


 


 




for the 6 months ended 30 September 2020


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 




 


 


Share

capital


 


Treasury shares reserve


 


Retained earnings


 


Total




 


 


£


 


£


 


£


 


£




As at 1 April 2019


 


42,542,179 


 


(79,344)


 


35,971,206 


 


78,434,041 




 


 


 


 


 


 


 


 


 




Profit for the period


 


- 


 


- 


 


1,250,687 


 


1,250,687 




 


 


 


 


 


 


 


 


 




Dividends


 


- 


 


- 


 


(933,793)


 


(933,793)




 


 


 


 


 


 


 


 


 




As at 30 September 2019


 


42,542,179 


 


(79,344)


 


36,288,100 


 


78,750,935 




 


 


 


 


 


 


 


 


 




Profit for the period


 


- 


 


- 


 


2,268,819 


 


2,268,819 




 


 


 


 


 


 


 


 


 




Share-based payments


 


 


 


595,392 


 


- 


 


595,392 




 


 


 


 


 


 


 


 


 




Dividends


 


- 


 


- 


 


(933,793)


 


(933,793)




 


 


 


 


 


 


 


 


 




As at 31 March 2020


 


42,542,179 


 


516,048 


 


37,623,126 


 


80,681,353 




 


 


 


 


 


 


 


 


 




Profit for the period


 


- 


 


- 


 


(622,321)


 


(622,321)




 


 


 


 


 


 


 


 


 




Share-based payments


 


- 


 


152,408 


 


-


 


152,408 




 


 


 


 


 


 


 


 


 




As at 30 September 2020


 


42,542,179 


 


668,456 


 


37,000,805 


 


80,211,440 




 




Condensed consolidated statement of cash flows


 


 


 


 


 


 




for the 6 months ended 30 September 2020


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 




 


 


 


 


6 months to

30 September

2020


 


6 months to

30 September

2019


 


12 months to

31 March

2020




 


 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 


 




Cash flows from operating activities


 


 


 


 


 


 


 




(Loss)/profit for the period before taxation


 


 


(736,035)


 


1,105,613 


 


5,160,916 




Adjustments for:


 


 


 


 


 


 


 




Finance income


 


 


(2,083)


 


(1,679)


 


(1,531)




Finance expense


 


 


884,516 


 


858,920 


 


1,885,340 




Depreciation


 


 


7,145 


 


5,443 


 


11,744 




Amortisation of right of use assets


 


 


23,502 


 


- 


 


47,005 




Loss/(gain) on revaluation of investment properties


 


 


2,534,903 


 


390,279 


 


(2,466,035)




Loss/(gain) on disposal of investment properties


 


 


- 


 


44,331 


 


(235,729)




Share based payments


 


 


152,408 


 


- 


 


595,392 




Increase in trade and other receivables


 


 


(852,315)


 


(493,376)


 


(2,095,583)




Decrease in trade and other payables


 


 


(138,347)


 


(653,810)


 


(179,700)




 


 


 


 


 


 


 


 


 




Cash generated from operating activities


 


 


1,873,694 


 


1,255,721 


 


2,721,819 




 


 


 


 


 


 


 


 


 




Interest and other finance costs paid


 


 


(858,649)


 


(613,803)


 


(1,510,806)




Interest received


 


 


2,083 


 


1,679 


 


1,531 




Taxation paid


 


 


(116,773)


 


- 


 


(189,154)




 


 


 


 


 


 


 


 


 




Net cash from operating activities


 


 


900,355 


 


643,597 


 


1,023,390 




 


 


 


 


 


 


 


 


 




Cash flows from investing activities


 


 


 


 


 


 


 




Cost of refurbishment of investment properties


 


 


(311,312)


 


(404,189)


 


(1,977,597)




Cost of acquisition of investment property


 


 


- 


 


(15,412,420)


 


(15,412,420)




Proceeds from disposal of investment properties


 


 


- 


 


4,555,671 


 


6,135,729 




Cost of additions of property plant and equipment


 


 


- 


 


(615)


 


(14,143)




 


 


 


 


 


 


 


 


 




Net cash from investing activities


 


 


(311,312)


 


(11,261,553)


 


(11,268,431)




 


 


 


 


 


 


 


 


 




Cash flows from financing activities


 


 


 


 


 


 


 




Repayment of borrowings


 


 


- 


 


- 


 


(2,530,000)




Payment of lease liabilities


 


 


(25,680)


 


- 


 


(51,360)




Drawdown of borrowings


 


 


1,000,000 


 


10,261,148 


 


14,023,944 




Dividends paid


 


 


- 


 


(933,793)


 


(1,867,586)




 


 


 


 


 


 


 


 


 




Net cash used in financing activities


 


 


974,320 


 


9,327,355 


 


9,574,998 




 


 


 


 


 


 


 


 


 




Net increase/(decrease) in cash and cash equivalents


 


 


1,563,363 


 


(1,290,601)


 


(670,043)




Cash and cash equivalents at the beginning of the period


 


 


2,980,329 


 


3,650,372 


 


3,650,372 




Cash and cash equivalents at the end of the period


 


 


4,543,692 


 


2,359,771 


 


2,980,329 




 




Notes to the condensed consolidated interim financial statements


 


 


 


 




for the 6 months ended 30 September 2020


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




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 2020. 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 Directors have assessed the Group's ability to continue as a going concern, including an assessment of the impact of Covid-19. In making their assessment the Directors have modelled the Group's cash forecasts based on the circumstances of each tenant on an individual basis. Rental collections have been monitored on a weekly basis with ongoing communication with tenants in respect of the collection of rental arrears. Loan covenants have been stress tested taking into consideration a potential reduction in the valuation of the Group's property portfolio.




 


 


 


 


 


 


 


 




Based on these considerations 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 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 2020.




 


 


 


 


 


 


 


 




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

2020


 


6 months to

30 September

2019


 


12 months to

31 March

2020




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Rental income


 


 


3,290,782 


 


3,339,652 


 


6,715,456 




Lease incentive adjustment


 


 


628,525 


 


223,670 


 


781,756 




 


 


 


3,919,307 


 


3,563,322 


 


7,497,212 




 


 


 


 


 


 


 


 




Insurance recovery


 


 


71,130 


 


72,286 


 


144,874 




Service charge income


 


 


856,174 


 


681,637 


 


1,697,533 




Dilapidation monies


 


 


82,718 


 


33,000 


 


273,993 




 


 


 


1,010,022 


 


786,923 


 


2,116,400 




 


 


 


 


 


 


 


 




 


 


 


4,929,329 


 


4,350,245 


 


9,613,612 




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




5 Property expenses


 


 


6 months to

30 September

2020


 


6 months to

30 September

2019


 


12 months to

31 March

2020




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Property expenses


 


 


6,729 


 


11,504 


 


28,331 




Property service charges


 


 


158,495 


 


83,437 


 


246,737 




Property repairs and maintenance costs


 


 


89,832 


 


8,753 


 


59,260 




Property insurance


 


 


79,630 


 


76,483 


 


166,995 




Property rates


 


 


78,328 


 


108,909 


 


175,700 




Recoverable service charge costs


 


 


856,174 


 


681,637 


 


1,697,533 




 


 


 


 


 


 


 


 




 


 


 


1,269,188 


 


970,723 


 


2,374,556 




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




6 Administrative expenses


 


 


6 months to

30 September

2020


 


6 months to

30 September

2019


 


12 months to

31 March

2020




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Staff costs


 


 


536,032 


 


384,712 


 


1,593,790 




Administration fees


 


 


152,311 


 


153,189 


 


305,250 




Legal and professional fees


 


 


214,488 


 


344,413 


 


749,233 




Audit fees


 


 


- 


 


1,928 


 


62,673 




Accountancy fees


 


 


3,484 


 


2,105 


 


7,778 




Rent, rates and other office costs


 


 


24,891 


 


49,981 


 


26,334 




Other overheads


 


 


16,987 


 


40,287 


 


140,303 




Depreciation of tangible fixed assets


 


 


7,145 


 


5,443 


 


11,744 




Amortisation of right of use assets


 


 


23,502 


 


- 


 


47,004 




 


 


 


 


 


 


 


 




 


 


 


978,840 


 


982,058 


 


2,944,109 




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




7 Finance income


 


 


6 months to

30 September

2020


 


6 months to

30 September

2019


 


12 months to

31 March

2020




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Bank interest 


 


 


2,083 


 


1,679 


 


1,531 




 


 


 


 


 


 


 


 




 


 


 


2,083 


 


1,679 


 


1,531 




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




8 Finance costs


 


 


6 months to

30 September

2020


 


6 months to

30 September

2019


 


12 months to

31 March

2020




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Loan interest 


 


 


767,484 


 


732,280 


 


1,592,948 




Loan commitment fees


 


 


12,479 


 


36,217 


 


49,039 




Amortisation of lending costs


 


 


100,697 


 


90,423 


 


188,215 




Annual agency fee


 


 


- 


 


- 


 


45,000 




Interest on lease liabilities


 


 


3,856 


 


- 


 


10,138 




 


 


 


 


 


 


 


 




 


 


 


884,516 


 


858,920 


 


1,885,340 




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




9 Taxation


 


 


6 months to

30 September

2020


 


6 months to

30 September

2019


 


12 months to

31 March

2020




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Current tax


 


 


215,426 


 


192,684 


 


238,098 




Deferred tax (credit) / charge


 


 


(329,140)


 


(337,758)


 


1,403,312 




 


 


 


 


 


 


 


 




 


 


 


(113,714)


 


(145,074)


 


1,641,410 




 


 


 


 


 


 


 


 




10 Earnings/loss per share


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




Basic earnings/loss per share has been calculated on profit/loss 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

2020


 


6 months to

30 September

2019


 


12 months to

31 March

2020




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Profit/(loss) for the period


 


 


(622,321)


 


1,250,687 


 


3,519,506 




 


 


 


 


 


 


 


 




Weighted average number of shares 


 


 


28,296,762 


 


28,296,762 


 


28,296,792 




 


 


 


 


 


 


 


 




Earnings/(loss) per ordinary share:


 


 


(0.02)


 


0.04 


 


0.12 




 


 


 


 


 


 


 


 




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/(loss) per share has been presented.




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




11 Investment properties


 


 


30 September 2020


 


30 September 2019


 


 31 March 2020




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Balance brought forward


 


 


139,450,000 


 


124,600,000 


 


124,600,000 




Cost of refurbishment of investment properties


 


 


306,378 


 


404,189 


 


2,041,775 




Cost of acquisition of investment property


 


 


- 


 


15,412,420 


 


15,412,420 




Disposal of investment properties


 


 


- 


 


(4,600,000)


 


(5,900,000)




(Loss)/Gain on revaluation of investment properties


 


 


(2,534,903)


 


(390,279)


 


2,514,049 




Lease incentive amortisation


 


 


628,525 


 


223,670 


 


781,756 




 


 


 


 


 


 


 


 




Fair value of investment properties per valuation report


 


137,850,000 


 


135,650,000 


 


139,450,000 




 


 


 


 


 


 


 


 




Unamortised lease incentives


 


 


(10,738,117)


 


(9,503,492)


 


(10,109,592)




 


 


 


 


 


 


 


 




Closing fair value


 


 


127,111,883 


 


126,146,508 


 


129,340,408 




 


 


 


 


 


 


 


 




The fair value of the Group's investment properties at 30 September 2020 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 valuers 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.




 


 


 


 


 


 


 


 




At 30 September 2020, the fair value of the Group's investment properties per the valuation report amounted to £137,850,000. This valuation takes into account the impact of Covid-19 and the Company's valuers' inclusion of a 'material uncertainty clause' on the independent valuations (in accordance with VPS3 and VPGA 10 of the RICS valuation - Global Standards). The difference between the fair value of the investment properties per the valuation report and the fair value per the balance sheet of £10,738,117 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.




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




12 Trade and other receivables 


 


 


30 September 2020


 


30 September 2019


 


 31 March 2020




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Non-current


 


 


 


 


 


 


 




Lease incentives


 


 


10,128,672 


 


8,546,628 


 


9,562,066 




 


 


 


 


 


 


 


 




Current


 


 


 


 


 


 


 




Lease incentives


 


 


609,445 


 


956,864 


 


547,526 




Amounts due from property agents


 


 


532,692 


 


15,391 


 


405,794 




Amounts due from tenants


 


 


1,124,020 


 


602,316 


 


888,529 




Tenant deposits


 


 


271,017 


 


88,152 


 


293,334 




Other receivables


 


 


146,654 


 


148,627 


 


262,936 




 


 


 


 


 


 


 


 




 


 


 


2,683,828 


 


1,811,350 


 


2,398,119 




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




13 Borrowings


 


 


30 September 2020


 


30 September 2019


 


 31 March 2020




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Brought forward


 


 


60,721,840 


 


49,738,852 


 


49,039,681 




Loan repayments


 


 


- 


 


- 


 


(2,530,000)




Loan drawdowns


 


 


1,000,000 


 


10,261,148 


 


14,091,148 




Lending costs


 


 


- 


 


(721,900)


 


(67,204)




Amortisation of lending costs


 


 


100,697 


 


113,152 


 


188,215 




 


 


 


 


 


 


 


 




Total borrowings


 


 


61,822,537 


 


59,391,252 


 


60,721,840 




 


 


 


 


 


 


 


 




The Group is party to a revolving facility, with NatWest and HSBC. The facility is a £60,000,000 revolving facility with an accordion option of up to £40,000,000, of which £5,000,000 had been committed at the period end. The facility has a four-year term, repayable on 13 February 2023.  The rate of interest is the aggregate of the margin 2.05% and LIBOR and is payable quarterly.  A commitment fee is payable at a rate of 0.82% on the undrawn facility and in relation to the accordion facility.




 


 


 


 


 


 


 


 




The Group paid an arrangement fee of 0.875% for the facility, which along with other costs of arranging the facility including legal costs have been amortised and will be written off over the 4-year term.




 


 


 


 


 


 


 


 




The facility is secured by a first and only legal charge over the Group's investment properties, an assignment of rental income, charges over specified bank accounts of the Group and a floating charge granted over all assets of the Group.




 


 


 


 


 


 


 


 




The facility's financial covenants are 60% loan to value, 2.00:1 interest cover looking both forward and backward, the Group shall ensure that the total market value of the charged properties does not fall below £50,000,000 at any time and that no single tenant represents more than 25% of the total contracted rents.




 


 


 


 


 


 


 


 




At 30 September 2020, £62,300,000 of the total facility had been drawn down. The undrawn facility was £2,700,000.




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




14 Trade and other payables


 


 


30 September 2020


 


30 September 2019


 


 31 March 2020




 


 


 


(unaudited)


 


(unaudited)


 


(audited)




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




Trade payables


 


 


26,782 


 


39,698 


 


79,009 




Property improvement costs


 


 


59,242 


 


- 


 


64,178 




Wages and salaries


 


 


27,902 


 


- 


 


235,408 




Deferred income


 


 


1,749,920 


 


1,611,306 


 


1,603,989 




Rental deposit accounts


 


 


271,017 


 


92,546 


 


295,787 




Finance costs


 


 


285,834 


 


343,033 


 


364,520 




VAT


 


 


257,742 


 


257,413 


 


186,444 




Valuation fee


 


 


18,000 


 


15,000 


 


28,000 




Audit fee


 


 


- 


 


- 


 


60,745 




Administration fees


 


 


363 


 


- 


 


691 




Current taxation


 


 


314,698 


 


359,785 


 


216,045 




 


 


 


 


 


 


 


 




 


 


 


3,011,500 


 


2,718,781 


 


3,134,816 




 


 


 


 


 


 


 


 




15 Subsequent events


 


 


 


 


 


 


 




There are no material subsequent events requiring adjustment or disclosure in the financial statements.




 
 

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