REG - Develop North PLC - Half-year Report
26/07/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230726:nRSZ1556Ha&default-theme=true
RNS Number : 1556H Develop North PLC 26 July 2023
DEVELOP NORTH PLC
Interim Report & Financial Statements for the six months ending 31 May
2023
Announcement of Interim Results
LEI: 213800EXPWANYN3NEV68
This announcement contains regulated information.
Chairman's Statement
Highlights
· Dividends paid and declared of 2.0p per share (2022: 2.0p)
· Ordinary share mid-price equivalent to a premium of 2.1% as at 31 May
2023
· Gearing facility with Shawbrook Bank Limited renewed for two years to May
2025
· Net Asset Value total return of 0.0%
Background
The Company entered its seventh year of trading during the period under
review, which has included continuing turmoil on the world stage, steep levels
of UK inflation that governmental measures have thus far struggled to moderate
and further increases in interest rates. At the same time, the consensus of
political analysts is that the while UK economy may narrowly avoid a technical
recession, there will be a slowdown in economic activity as businesses and
consumers adjust to the rapid change in the interest rate environment.
Net Asset Value
The Company's Net Asset Value per share decreased from 81.79p to 79.81p over
the six months ended 31 May 2023. Taking the effects of dividend distributions
into account, this has resulted in a broadly flat NAV Total Return (0.0%) for
the period.
This figure may be placed into context by the total return figures over the
same period of the Association of Investment Companies' (AIC's)
"Property-Debt" sector, of which Develop North is a component member, of +2.4%
and of the AIC's "Debt-Loans" sector of +1.7%.
Dividends
A quarterly dividend of 1 penny per share was paid on 30 June 2023. As set out
in the Annual Report the Company expects to pay dividends at a rate of 1 penny
per share per quarter, equivalent to 4 pence per share per year in aggregate.
Depending on market conditions and the performance of the investment
portfolio, a final balancing payment may be made at the end of the current
financial year so as to at least fulfil the investment trust qualification
requirements.
Investment Portfolio
The total value of the Company's portfolio now stands at £23.7 million, from
17 live projects.
New Investments:
The Company agreed one new loan during period, a £1.13m 18-month facility to
fund the acquisition of a hotel at Croft on Tees, North Yorkshire. Shortly
after period end the Company agreed a £1.65m facility for two years to fund
the development of 18 homes in Aberdeenshire, Aberdeen. Further details are
provided in the Investment Adviser's report.
Exits:
There were no portfolio exits during the period but there were partial
redemptions across four projects. Post period end, there were two further
exits.
Impairments:
As specified by the requirements of accountancy standard IFRS 9, the Company
has continued to reflect the more uncertain economic conditions. While the
general provision remained static at the period end, the impairment charge for
the period has increased, largely due to adverse outcomes on legacy loans,
i.e. those that were acquired by the Company at incorporation. The Board
believes that the downside impact of these early loans is now fully recognised
in the net asset value.
The loan portfolio is discussed more fully in the Investment Adviser's Review.
Gearing
The Company continues to benefit from a gearing facility with Shawbrook Bank
Limited, recently renewed for a further two years until May 2025, with £2.9m
drawn at the period end. At the time of writing, the loan had been fully
repaid.
Outlook
The UK economy and the real estate sector in particular appear well placed to
benefit as the effects of COVID disappear into the rear view mirror, energy
prices begin to fall and (given fair winds) inflation and interest rates
approach their peaks.
In the meantime, however, project finance costs remain high as do the prices
of raw materials and indeed of labour. It is helpful in this regard that there
is no shortage of high quality potential borrowers approaching the Company for
loans and who are prepared to agree terms and interest rates appropriate to
the prevailing market conditions.
John Newlands
Chairman
25 July 2023
Investment Adviser's Review
REVIEW OF THE 6 MONTHS TO 31 MAY 2023
Investment Adviser's highlights:
· NAV Total Return of 0.0% for the 6 months to 31 May 2023.
· Funds deployed into one new project
· Loan to Value (LTV) of portfolio reduced to 65.5%
· Dividends totalling 2.0p per share paid or declared for the six months to
31 May 2023, equivalent to an annualised dividend yield of 4.91%.
This Interim Report covers the end of the sixth and the beginning of the
seventh year of performance of the Company, since its listing in January 2017.
The Company's investment objective is to provide debt finance to the property
sector. The Company also benefits from a small number of equity positions
attained at nil cost in six of the borrowing entities which it supports. In
addition, the Company benefits from exit fees on redemption of other projects
that additionally contribute to the Senior and Profit lending type.
The first six months of the financial year have seen the base rate increase to
5.0% at the time of writing (July 2023), with expectations that they may
exceed 6.0% by the end of 2023 and remain at these levels until the second
half of 2024. These rises have been driven by the ongoing presence of core
inflation which the Bank of England has been attempting to bring under control
for the past twelve months. Recent economic analyses suggest that there is
risk of the UK entering a recession later this year, though some commentators
say it may be narrowly avoided.
2023 has seen house prices decline across the UK. This is expected to continue
for the rest of 2023 and all of 2024 (Source: Savills & Knight Frank).
These forecast declines would see prices return to summer 2021 values. Build
cost inflation and labour shortages in the construction sector have stabilised
but the viability of new projects is still challenging.
We expect a bumpy ride for the economy for the remainder of 2023. The Company
has used the first six months to reprice some of the existing loan book and to
deploy at higher rates for new projects. There has been a continued focus on
liquidity, including the renewal of the gearing facility for a further two
years in May 2023.
DEPLOYMENT
Despite the ongoing uncertainties, we are pleased to report an active period
for new transactions and deployments to existing projects, together with full
and partial exits:
The Company agreed one new facility during the period:
· Croft, North Yorkshire - £1.13m 18-month facility
A further £1.65m was deployed into a new 2-year facility in Aberdeen,
Scotland in June 2023.
During the period a total of £1.67m was deployed into four projects,
including the Croft project mentioned above.
Portfolio Exits
There were no portfolio exits during the period. In June 2023, there were two
successful exits, bringing the number of exits to seventeen since inception.
Partial Redemptions
During the period there was £3.04m of partial redemptions across five of the
portfolio projects.
Impairments
In accordance with IFRS 9 the Company recognises the gross interest receivable
on all its loans, and then recognises an impairment charge if that interest is
not paid by the borrower and there is not a clear expectation that this can be
recovered subsequently. During the period, three projects were unable to meet
their interest obligations.
IFRS 9 also requires the Company to consider various credit loss scenarios and
assign a risk weighting to these. This calculation generates a provision which
is taken as a further impairment for the period. In the six months ended 31
May 2023 the Company has set the provision at £114,000. This is unchanged
from the general provision at 30 November 2022. This provision is based on
forward looking scenarios and is designed to withstand market-related shocks,
including those that may arise as a result of the current inflationary
environment.
Gearing
In May 2023, the Company renewed its committed revolving credit facility with
Shawbrook Bank for a further two years. Again, the key driver was headroom and
liquidity. This renewal for a sixth year demonstrates the support that the
Company has from its lender, and the growing confidence in future deployment
given the current strength of pipeline.
Profit Share Projects
There are currently six Profit Share projects in the portfolio (Nov 2022:
six).
OUTLOOK
Economic Outlook
Residential
As at 31 May 2023, 61.3% (£14.45m) of deployed funds were invested across 12
projects with a residential focus, with a further £1.65m committed to live
projects.
The housing market has declined during 2023, offsetting some but not all of
the past two years' increases. Estate agents Savills and Knight Frank predict
that house prices will decline by 10% and 5% respectively in 2023. Capital
Economics forecasts that house prices in Q4 of 2023 will be 8.5% lower than in
Q4 of 2022. The outlook remains negative for 2024 before returning to growth
thereafter.
Mortgage availability has been significantly impacted. Rising interest rates
will challenge buyers on the affordability test as interest payments will
represent a significant proportion of household income. Supply chain issues
for both availability and pricing of labour and materials have improved in
2023 and there are anecdotal signs that they have returned to historic levels.
The Company's residential exposure is predominantly in the North East (87.9%)
and Scotland (12.1%). Both regions continue to have amongst the best
affordability, with loan to income ratios remaining lower. We continue to
appraise projects using the views of market experts for sales values, build
cost and delivery, with all assumptions stress tested.
Commercial
As at 31 May 2023, 35.3% of deployed funds were invested across five projects
with a commercial focus.
The Company continues to be selective in the level of exposure to commercial
developments. We believe our selective approach to the Company's deployment in
the commercial property sector will continue to create shareholder value. The
sectors within the commercial property space that the Company currently has
exposure to are:
· bereavement (crematorium);
· weddings;
· strategic land; and
· shared office space.
Each of the above sub-sectors offer downside protection in the current
uncertain economic times, with the latter two also giving flexibility for the
borrowers as and when trends change. We will continue to identify and support
professional, experienced and reliable management teams who have a clear
vision and robust plan.
PIPELINE
There is currently £9.2m at various stages of due diligence across four
projects, of which 82.0% is in the North East.
The quality and experience of each management team that we are in discussions
with will continue to enhance the Company's portfolio and strengthen its
reputation in the market. This should lead to the creation of shareholder
value that is sustainable in the longer term.
Ian McElroy
Tier One Capital
25 July 2023
THE INVESTMENT PORTFOLIO AS AT 31 MAY 2023
Sector % LTV* (May 23) Loan Value (May 23) £'000s LTV* Loan Value (Nov 22) £'000s
Portfolio (Nov 22)
Residential 61.3% 67.4% 14,451 69.0% 17,111
Commercial 35.3% 62.0% 8,321 61.9% 7,508
Cash 3.4% - 807 - 638
General Impairment - - (114) - (114)
Total/Weighted Average 100.0% 65.5% 23,465 66.8% 25,143
*LTV has been calculated using the carrying value of the loans as at the
balance sheet date
Interim Management Report
The principal and emerging risks and uncertainties that could have a material
impact on the Company's performance have not changed from those set out on
pages 15 and 16 of the Company's Annual Report for the year ended 30 November
2022.
The Directors consider that the Chairman's Statement and the Investment
Adviser's Review, the disclosure on related party transactions and the
Statement of Directors' Responsibilities together constitute the Interim
Management Report of the Company for the six months ended 31 May 2023 and
satisfy the requirements of the Disclosure Guidance and Transparency Rules
4.2.3 to 4.2.11 of the Financial Conduct Authority.
The Interim Report has not been reviewed or audited by the Company's Auditor.
The Directors believe, having considered the Company's investment objectives,
risk management policies, capital management policies and procedures, the
nature of the portfolio and expenditure projections, that the Company has
adequate resources, an appropriate financial structure and suitable management
arrangements in place to continue in operational existence for the foreseeable
future and, more specifically, that there are no material uncertainties
pertaining to the Company that would prevent its ability to continue in such
operational existence for at least twelve months from the date of the approval
of this Interim Report. For these reasons they consider that there is
sufficient evidence to continue to adopt the going concern basis in preparing
the accounts.
Directors' Responsibilities Statement
We confirm that to the best of our knowledge:
· The condensed set of financial statements has been prepared in
accordance with FRS 104 'Interim Financial Reporting' and gives a true and
fair view of the assets, liabilities, financial position and profit of the
Company, as at 31 May 2023, as required by the Disclosure Guidance and
Transparency Rule 4.2.4R;
· The Interim Report includes a fair review of the information required
by the Disclosure and Transparency Rule 4.2.7R, being an indication of
important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements,
and a description of the principal risks and uncertainties for the remaining
six months of the financial year; and
· The Interim Report includes a fair review of the information concerning
related party transactions as required by Disclosure Guidance and Transparency
Rule 4.2.8R.
On Behalf of the Board
John Newlands
Chairman
25 July 2023
CONDENSED INCOME STATEMENT
Six months ended Six months ended Year ended
31 May 2023 (unaudited) 31 May 2022 (unaudited) 30 November 2022
(audited)
Note Revenue Capital Total Total Total
£'000 £'000 £'000 £'000 £'000
REVENUE
Investment interest 946 - 946 864 1,787
Total revenue 946 - 946 864 1,787
Losses on investments held at fair value through profit or loss - (198) (198) (134) (378)
Amortisation of exit fees - 32 32 - -
Total net income 946 (166) 780 730 1,409
Expenditure
Investment adviser fee (33) - (33) (34) (67)
Impairments on loans at amortised cost
(13) (343) (356) (44) (148)
Other expenses (240) - (240) (315) (548)
Total expenditure (286) (343) (629) (393) (763)
Profit/(loss) before finance costs and taxation
660 (509) 151 337 646
Finance costs
Interest payable (146) - (146) (16) (132)
Profit/(loss) before taxation 514 (509) 5 321 514
Taxation - - - - -
Profit/(loss) for the period/year 514 (509) 5 321 514
Basic earnings per share 3 1.91p (1.89)p 0.02p 1.19p 1.90p
The notes form an integral part of the financial statements.
The total column of this statement represents the Company's Statement of
Comprehensive Income, prepared in accordance with UK adopted International
Financial Reporting Standards ("UK adopted IFRS") in conformity with the
requirements of the Companies Act 2006. The supplementary revenue return and
capital return columns are both prepared under guidance published by the
Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing
operations. There is no other comprehensive income as all income is recorded
in the statement above.
CONDENSED Statement of Financial Position
As at As at As at
31 May 31 May 30 November
2023 2022 2022
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Non-current assets 6 5,662 14,153 12,659
Loans at amortised cost
5,662 14,153 12,659
Current assets
Investments held at fair value through profit or loss 5 3,908 6,375 4,874
Loans at amortised cost 6 14,145 4,324 7,948
Other receivables and prepayments 13 17 11
Cash and cash equivalents 807 221 638
18,873 10,937 13,471
Total assets 24,535 25,090 26,130
Current liabilities
Loan facility (2,900) (2,656) (4,000)
Other payables and accrued expenses (147) (67) (109)
Total liabilities (3,047) (2,723) (4,109)
Net assets 21,488 22,367 22,021
Share capital and reserves
Share capital 7 269 269 269
Share premium 9,094 9,094 9,094
Special distributable reserve 12,764 12,849 12,849
Capital reserve (1,153) (313) (644)
Revenue reserve 514 468 453
Equity shareholders' funds 21,488 22,367 22,021
Net asset value per ordinary share 8 79.81p 83.08p 81.79p
The accompanying notes form an integral part of the financial statements.
The financial statements were approved by the Board of Directors of Develop
North PLC (a public limited company incorporated in England and Wales with
company number 10395804) and authorised for issue on 25 July 2023.
They were signed on its behalf by:
John Newlands
Chairman
CONDENSED Statement of Changes in Equity
For the six months ending Special distributable
31 May 2023 Share capital Share premium reserve Capital reserve Revenue reserve Total
(unaudited) £'000 £'000 £'000 £'000 £'000 £'000
At beginning of the period 269 9,094 12,849 (644) 453 22,021
Total comprehensive profit for the period:
Profit for the period - - - (509) 514 5
transactions with owners recognised directly in equity
Dividends paid (note 4) - - (85) - (453) (538)
At 31 May 2023 269 9,094 12,764 (1,153) 514 21,488
For the six months ending Special distributable
31 May 2022 Share capital Share premium reserve Capital reserve Revenue reserve Total
(unaudited) £'000 £'000 £'000 £'000 £'000 £'000
At beginning of the period 269 9,094 13,093 (166) 294 22,584
Total comprehensive profit for the period:
Profit for the period - - - (147) 468 321
transactions with owners recognised directly in equity
Dividends paid (note 4) - - (244) - (294) (538)
At 31 May 2022 269 9,094 12,849 (313) 468 22,367
For the year ending Special distributable
30 November 2022 Share capital Share premium reserve Capital reserve Revenue reserve Total
(unaudited) £'000 £'000 £'000 £'000 £'000 £'000
At beginning of the period 269 9,094 13,093 (166) 294 22,584
Total comprehensive profit for the period:
Profit for the period - - - (478) 992 514
transactions with owners recognised directly in equity
Dividends paid (note 4) - - (244) - (833) (1,077)
At 30 November 2022 269 9,094 12,849 (644) 453 22,021
Condensed Cash Flow Statement
Six months to Six months to Year ending
31 May 31 May 30 November
2023 2022 2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating activities
Profit before taxation 5 321 514
Losses on investments held at fair value through profit and loss 215 123 342
Impairments on loans at amortised cost 378 51 136
Gains on investments held at fair value through profit and loss (17) (27) -
Uplifts on loans at amortised cost (35) - -
Amortisation of exit fees (32) - -
Increase in loan interest receivable on investments held at fair value through (53) (109) (147)
profit and loss
Increase in loan interest receivable on loans at amortised cost (66) (207) (249)
Interest expense 146 16 132
Changes in working capital
(Increase)/decrease in other receivables (2) 10 16
Increase/(decrease) in other payables 38 (68) (26)
Net cash inflow from operating activities AFTER TAXATION 577 110 718
Investing activities
Loans given (1.668) (8,148) (10,986)
Loans repaid 3,044 1,612 3,570
Net cash INFLOW/(outflow) from investing activities 1,376 (6,536) (7,416)
Financing
Equity dividends paid (538) (538) (1,077
Bank loan drawn down - 2,656 4,251
Repayment of bank loan (1,100) - (251)
Interest paid (146) (16) (132)
Net cash (outflow)/inflow from financing (1,784) 2,102 2,791
Increase/(Decrease) in cash and cash equivalents
169 (4,324) (3,907)
Cash and cash equivalents at the start of the year 638 4,545 4,545
Cash and cash equivalents at the end of the period/year 807 221 638
Notes to the Condensed Financial Statements (unaudited)
1. INTERIM RESULTS
The condensed financial statements have been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting' and the
accounting policies set out in the statutory accounts of the Company for the
year ended 30 November 2022. The condensed financial statements do not include
all of the information required for a complete set of financial statements and
should be read in conjunction with the financial statements of the Company for
the year ended 30 November 2022, which were prepared in accordance with UK
adopted International Financial Reporting Standards ("UK adopted IFRS") in
conformity with the requirements of the Companies Act 2006 as applicable to
companies reporting under international accounting standards. There have been
no significant changes to management judgements and estimates.
The condensed financial statements have been prepared on the going concern
basis. In assessing the going concern basis of accounting the Directors have
had regard to the guidance issued by the Financial Reporting Council. After
making enquiries, and bearing in mind the nature of the Company's business and
assets, the Directors consider that the Company has adequate resources to
continue in operational existence for the foreseeable future. For this reason
they continue to adopt the going concern basis in preparing these financial
statements.
2. INVESTMENT ADVISER
In its role as the Investment Adviser, Tier One Capital Ltd is entitled to
receive from the Company an investment adviser fee which is calculated and
paid quarterly in arrears at an annual rate of 0.25 per cent. per annum of the
prevailing Net Asset Value if less than £100m; or 0.50 per cent. per annum of
the prevailing Net Asset Value if £100m or more.
There is no balance accrued for the Investment Adviser for the period ended 31
May 2023 (31 May 2022: £nil; 30 November 2022: £nil).
There are no performance fees payable.
ALTERNATIVE INVESTMENT FUND MANAGER'S DIRECTIVE ('AIFMD')
The Company has been approved by the Financial Conduct Authority as a Small
Registered UK Alternative Investment Fund Manager ('AIFM').
3. EARNINGS PER SHARE
The revenue, capital and total return per ordinary share is based on each of
the profit after tax and on 26,924,063 ordinary shares, being the weighted
average number of ordinary shares in issue throughout the period.
Six months ended 31 May 2023 Six months ended 31 May 2022 Year ended 30 November 2022
£'000 Pence per share £'000 Pence per share £'000 Pence per share
Revenue earnings 514 1.91 468 1.74 992 3.68
Capital earnings (509) (1.89) (147) (0.55) (478) (1.78)
Total earnings 5 0.02 321 1.19 514 1.90
Average number of shares in issue 26,924,063 26,924,063 26,924,063
Earnings for the period to 31 May 2023 should not be taken as a guide to the
results for the year to 30 November 2023.
4. DIVIDENDS
Six months ended 31 May 2023 Six months ended 31 May 2022 Year ended 30 November 2022
£'000 £'000 £'000
In respect of the prior year:
Interim dividend for the quarter ended August, paid in December 269 269 269
Interim dividend for the quarter ended November, paid in March 269 269 269
In respect of the current year:
Interim dividend for the quarter ended February, paid in June - - 269
Interim dividend for the quarter ended May, paid in September - - 270
Total 538 538 1,077
The Company intends to distribute at least 85% of its distributable income
earned in each financial year by way of interest distribution. On 31 May 2023,
the Company declared an interim dividend of 1.00 pence per share for the
quarter ended 28 February 2023, payable on 30 June 2023.
5. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
The Company's investment held at fair value through profit or loss represents
its profit share arrangements whereby the Company owns at least 25.1% or has
an exit fee mechanism for four companies.
31 May 31 May 30 November
2023 2022 2022
£'000 £'000 £'000
Opening Balance 4,874 7,589 7,589
Loans deployed 59 80 80
Principal repayments (883) (1,307) (2,600)
Movements in interest receivable 53 147 183
Unrealised losses on investments held at fair value through profit or loss (198) (134) (378)
Amortisation of exit fees 3 - -
Total investments held at fair value through profit and loss 3,908 6,375 4,874
Split:
Non-current assets: Investments held at fair value through profit and loss due - - -
for repayment after one year
Current assets: Investments held at fair value through profit and loss due for 3,908 6,375 4,874
repayment under one year
6. LOANS AT AMORTISED COST
31 May 31 May 30 November
2023 2022 2022
£'000 £'000 £'000
Opening Balance 20,607 10,558 10,558
Loans deployed 1,609 8,068 10,906
Principal repayments (2,161) (305) (970)
Movements in interest receivable 79 200 261
Movement in impairments (356) (44) (148)
Amortisation of exit fees 29 - -
Total Loans at amortised cost 19,807 18,477 20,607
Split:
Non-current assets: Loans at amortised cost due for repayment after one year 5,662 14,153 12,659
14,145 4,324 7,948
Current assets: Loans at amortised cost due for repayment under one year
The Company's loans held at amortised cost are accounted for using the
effective interest method. The carrying value of each loan is determined after
taking into consideration any requirement for impairment provisions during the
year, allowances for impairment losses amounted to £356,000 (May 2022:
£44,000; November 2022: £148,000).
7. SHARE CAPITAL
Number of
Nominal Value Ordinary shares
£'000 of 1p
Issued and fully paid as at 30 November 2022 269 26,924,063
Issued and fully paid as at 31 May 2023 269 26,924,063
The ordinary shares are eligible to vote and have the right to participate in
either an interest distribution or participate in a capital distribution (on a
winding up).
8. NET ASSET VALUE PER ORDINARY SHARE
The net asset value per ordinary share is based on net assets of £21,488,034
(31 May 2022: £22,367,422; 30 November 2022: £22,021,367) and on 26,924,063
ordinary shares (31 May 2022: 26,924,063; 30 November 2022: 26,924,063), being
the number of ordinary shares in issue at the period/year end.
9. RELATED PARTIES
The Directors are considered to be related parties. No Director has an interest in any transactions which are, or were, unusual in their nature or significant to the nature of the Company.
The Directors of the Company received fees totalling £43,000 for their
services during the period to 31 May 2023 (31 May 2022: £43,000; 30 November
2022: £85,000). £nil was payable at the period and prior year end.
Ian McElroy is Chief Executive of Tier One Capital Ltd and is a founding
shareholder and director of the firm.
Tier One Capital Ltd received £33,000 investment adviser's fee during the
period (31 May 2022: £34,000; 30 November 2022: £67,000) and £nil was
payable at the period end (31 May 2022: £nil; 30 November 2022: £nil). Tier
One Capital Ltd receives up to a 20% margin and arrangement fee for all loans
it facilitates.
There are various related party relationships in place with the borrowers as
below:
The following related parties arise due to the opportunity taken to advance
the profit share contracts:
· Thursby Homes (Springs)
The Company owns 25.1% of the borrower Thursby Homes (Springs) Ltd. The loan
amount outstanding as at 31 May 2023 was £705,000 (31 May 2022: £1.9m; 30
November 2022: £1.3m). Transactions in relation to loans repaid during the
period amounted to £626,000 (31 May 2022: £381,000; 30 November 2022:
£918,000). Interest due to be received as at 31 May 2023 was £209,000 (31
May 2022: £226,000; 30 November 2022: £213,000). Interest received during
the period amounted to £27,000 (31 May 2022: £109,000; 30 November 2022:
£157,000).
· Northumberland
The Company owns 25.1% of the borrower Northumberland Ltd. The loan amount
outstanding as at 31 May 2023 was £69,000 (31 May 2022: £832,000; 30
November 2022: £356,000). Transactions in relation to loans repaid during the
period amounted to £258,000 (31 May 2022: £435,000; 30 November 2022:
£911,000). Interest due to be received as at 31 May 2023 was £2,000 (31 May
2022: £15,000; 30 November 2022: £3,000). Interest received during the
period amounted to £3,000 (31 May 2022: £19,000; 30 November 2022:
£32,000).
· Coalsnaughton
The Company owns 40.17% of the borrower Kudos Partnership. The loan amount
outstanding as at 31 May 2023 was £2.0m (31 May 2022: £2.3m; 30 November
2022: £2.2m). Transactions in relation to loans made during the period
amounted to £15,000 (31 May 2022: £80,000; 30 November 2022: £80,000).
Interest due to be received as at 31 May 2023 was £378,000 (31 May 2022:
£257,000; 30 November 2022: £324,000). Interest received during the period
amounted to £54,000 (31 May 2022: £129,000; 30 November 2022: £196,000).
· Oswald Street
The Company owns 25.1% of the Riverfront Property Limited Partnership. The
loan amount outstanding as at 31 May 2023 was £447,000 (31 May 2022:
£382,000; 30 November 2022: £388,000). Transactions in relation to loans
made during the period amounted to £59,000 (31 May 2022: £nil; 30 November
2022: £nil). Interest due to be received as at 31 May 2023 was £8,000 (31
May 2022: £5,000; 30 November 2022: £5,000). Interest received during the
period amounted to £22,000 (31 May 2022: £15,000; 30 November 2022:
£31,000).
10. OPERATING SEGMENTS
The Board has considered the requirements of IFRS 8 'Operating Segments'.
The Board is of the view that the Company is engaged in a single unified
business, being the investment of the Company's capital in financial assets
comprising loans and joint venture equity contracts and in one geographical
area, the United Kingdom, and that therefore the Company has no segments. The
Board of Directors, as a whole, has been identified as constituting the chief
operating decision maker of the Company. The key measure of performance used
by the Board to assess the Company's performance is the total return on the
Company's net asset value. As the total return on the Company's net asset
value is calculated based on the IFRS net asset value per share as shown at
the foot of the Consolidated Statement of Financial Position, the key
performance measure is that prepared under IFRS. Therefore no reconciliation
is required between the measure of profit or loss used by the Board and that
contained in the financial statements.
11. FAIR VALUE HIERARCHY
Accounting standards recognise a hierarchy of fair value measurements for
financial instruments which gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities (Level 1) and the
lowest priority to unobservable inputs (Level 3). The classification of
financial instruments depends on the lowest significant applicable input, as
follows:
· Level 1 - Unadjusted, fully accessible and current quoted prices in
active markets for identical assets or liabilities. Examples of such
instruments would be investments listed or quoted on any recognised stock
exchange.
· Level 2 - Quoted prices for similar assets or liabilities, or other
directly or indirectly observable inputs which exist for the duration of the
period of investment. Examples of such instruments would be forward exchange
contracts and certain other derivative instruments.
· Level 3 - External inputs are unobservable. Value is the Directors' best
estimate, based on advice from relevant knowledgeable experts, use of
recognised valuation techniques and on assumptions as to what inputs other
market participants would apply in pricing the same or similar instrument.
All loans are considered Level 3.
12. POST BALANCE SHEET EVENTS
· The Shawbrook loan facility was fully repaid in June 2023.
· On 9 June 2023, a new loan was issued to Churchill Homes (Aberdeen)
Limited with an initial drawdown of £358,000.
13. INTERIM REPORT STATEMENT
These are not full statutory accounts in terms of Section 434 of the Companies
Act 2006 and are unaudited. Statutory accounts for the year ended 30 November
2022, which received an unqualified audit report and which did not contain a
statement under Section 498 of the Companies Act 2006, have been lodged with
the Registrar of Companies. No full statutory accounts in respect of any
period after 30 November 2022 have been reported on by the Company's auditor
or delivered to the Registrar of Companies.
For further information please contact:
Apex Fund Administration Services (UK) Limited, Secretary
25 July 2023
ENDS
Interim Report 2023
The Interim Report will shortly be available on the Company's website
(www.developnorth.co.uk (http://www.tocpropertybackedlendingtrust.co.uk) ) or
in hard copy format from the Company's Registered Office.
A copy of the Interim Report will be submitted to the FCA's National Storage
Mechanism and will be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR SELFIIEDSESWRecent news on Develop North
See all newsREG - Develop North PLC - Result of Annual General Meeting
AnnouncementREG - Develop North PLC - Net Asset Value(s)
AnnouncementREG - Develop North PLC - Annual Financial Report
AnnouncementREG - Develop North PLC - Dividend Declaration
AnnouncementREG - Develop North PLC - Net Asset Value(s)
Announcement