REG - Great Portland Ests. - Great Portland Estates Half Year Results 2016 <Origin Href="QuoteRef">GPOR.L</Origin> - Part 2
17/11/2016 07:30
- Part 2: For the preceding part double click ID:nRSQ3992Pa
(135.0) Trade and other payables 14 (150.1) (116.6)
(135.0) (150.1) (116.6)
Non-current liabilities
(600.2) Interest-bearing loans and borrowings 15 (756.7) (706.2)
(50.5) Obligations under finance leases (35.9) (50.5)
(2.7) Pension liability (7.2) (2.1)
(653.4) (799.8) (758.8)
(788.4) Total liabilities (949.9) (875.4)
2,912.2 Net assets 2,826.8 2,746.7
Equity
43.0 Share capital 16 43.0 43.0
352.0 Share premium 352.0 352.0
16.4 Capital redemption reserve 16.4 16.4
2,509.9 Retained earnings 2,418.9 2,337.8
(9.1) Investment in own shares 17 (3.5) (2.5)
2,912.2 Total equity 2,826.8 2,746.7
847p Net assets per share 8 822p 799p
847p EPRA net assets per share (NAV) 8 813p 808p
Condensed group statement of cash flows
For the six months ended 30 September 2016
Year to Notes Six months to Six months to
31 March 30 September 30 September
2016 2016 2015
Audited Unaudited Unaudited
£m £m £m
Operating activities
539.4 Operating (loss)/profit (102.3) 384.6
(491.8) Adjustments for non-cash items 18 128.5 (360.7)
34.9 Deposits received on forward sale of residential units 5.9 20.8
(45.2) Development of trading property (49.7) (13.9)
6.8 Decrease in receivables 0.8 0.8
(1.5) (Decrease)/increase in payables (4.1) 2.2
42.6 Cash (consumed)/generated by operations (20.9) 33.8
(27.4) Interest paid (13.7) (13.5)
- Tax received - 0.1
15.2 Cash (outflow)/inflow from operating activities (34.6) 20.4
Investing activities
110.3 Distributions from joint ventures 23.6 103.9
(365.8) Purchase and development of property (145.1) (177.1)
(1.1) Purchase of fixed assets (3.0) (0.5)
321.0 Sale of properties 26.7 2.9
(4.4) Investment in joint ventures (4.0) (0.8)
60.0 Cash (outflow)/inflow from investing activities (101.8) (71.6)
Financing activities
(28.0) Borrowings drawn/(repaid) 169.0 61.0
(0.1) Funds (to)/from joint ventures (18.1) 4.3
(8.1) Purchase of own shares - -
(30.6) Equity dividends paid (18.2) (17.5)
(66.8) Cash inflow/(outflow) from financing activities 132.7 47.8
8.4 Net (decrease)/increase in cash and cash equivalents (3.7) (3.4)
4.3 Cash and cash equivalents at 1 April 12.7 4.3
12.7 Cash and cash equivalents at balance sheet date 9.0 0.9
Condensed group statement of changes in equity
For the six months ended 30 September 2016 (unaudited)
Share capital£m Share premium£m Capital Retained earnings Investment in own shares£m Total equity£m
redemption £m
reserve
£m
Total equity at 1 April 2016 43.0 352.0 16.4 2,509.9 (9.1) 2,912.2
Loss for the period - - - (62.8) - (62.8)
Actuarial deficit on defined benefit scheme - - - (4.8) - (4.8)
Employee Long-Term Incentive Plan and Share Matching Plan charge - - - - 1.3 1.3
Transfer to retained earnings - - - (4.3) 4.3 -
Dividends - - - (19.1) - (19.1)
Total equity at 30 September 2016 43.0 352.0 16.4 2,418.9 (3.5) 2,826.8
Condensed group statement of changes in equity
For the six months ended 30 September 2015 (unaudited)
Share capital£m Share premium£m Capital Retained earnings Investment in own shares£m Total equity£m
redemption £m
reserve
£m
Total equity at 1 April 2015 43.0 352.0 16.4 1,991.2 (11.7) 2,390.9
Profit for the period - - - 371.0 - 371.0
Actuarial gain on defined benefit scheme - - - 0.9 - 0.9
Employee Long-Term Incentive Plan and Share Matching Plan charge - - - - 2.7 2.7
Transfer to retained earnings - - - (6.5) 6.5 -
Dividends - - - (18.8) - (18.8)
Total equity at 30 September 2015 43.0 352.0 16.4 2,337.8 (2.5) 2,746.7
Condensed group statement of changes in equity
For the year ended 31 March 2016 (audited)
Share capital£m Share premium£m Capital Retained earnings Investment in own shares Total equity£m
redemption £m £m
reserve
£m
Total equity at 1 April 2015 43.0 352.0 16.4 1,991.2 (11.7) 2,390.9
Profit for the year - - - 556.2 - 556.2
Actuarial deficit on defined benefit scheme - - - 0.1 - 0.1
Employee Long-Term Incentive Plan and Share Matching Plan charge - - - - 4.2 4.2
Purchase of own shares - - - - (8.1) (8.1)
Transfer to retained earnings - - - (31.1) - (31.1)
Dividends to shareholders - - - (6.5) 6.5 -
Total equity at 31 March 2016 43.0 352.0 16.4 2,509.9 (9.1) 2,912.2
Condensed notes forming part of the half year results
1 Basis of preparation
The information for the year ended 31 March 2016 does not constitute statutory
accounts as defined in section 434 of the Companies Act 2006. A copy of the
statutory accounts for that year has been delivered to the Registrar of
Companies. The auditor's report on those accounts was not qualified, did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying the report and did not contain statements under
section 498(2) or (3) of the Companies Act 2006.
The annual financial statements of Great Portland Estates plc are prepared in
accordance with IFRSs as adopted by the European Union. The condensed set of
financial statements included in this half-yearly financial report has been
prepared in accordance with International Accounting Standard 34 Interim
Financial Reporting, as adopted by the European Union. The Group's performance
is not subject to seasonal fluctuations.
The directors do not expect that the adoption of the new and revised IFRSs
that have been issued but are not yet effective will have a material impact on
the financial statements of the Group in future periods, except that IFRS 9
will impact both the measurement and disclosures of financial instruments and
IFRS 15 may have an impact on revenue recognition and related disclosures.
Beyond the information above, it is not practicable to provide a reasonable
estimate of the effect of IFRS 9 and IFRS 15 until a detailed review has been
completed.
Going concern
Details of the market in which the Group operates, together with factors
likely to affect its future development and performance, are set out in the
"Our market" and "Our business" sections of this report. The financial
position of the Group, its liquidity position and borrowing facilities are
described in "Our financial results" and in the notes of the half year
results.
The Directors have reviewed the current and projected financial position of
the Group, making reasonable assumptions about future trading performance.
After making enquiries, 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 continue to adopt the
going concern basis in preparing the half year results.
2 Total revenue
Year to Six months to 30 September 2016 Six months to
31 March £m 30 September
2016 2015
£m £m
72.8 Gross rental income 37.6 36.8
3.0 Spreading of lease incentives 1.0 2.6
11.3 Service charge income 6.7 5.7
4.1 Joint venture fee income 1.6 2.8
37.6 Development management revenue 10.5 21.6
128.8 57.4 69.5
3 Net rental income
Year to Six months to Six months to
31 March 30 September 30 September
2016 2016 2015
£m £m £m
72.8 Gross rental income 37.6 36.8
3.0 Spreading of lease incentives 1.0 2.6
(0.3) Ground rents expense (0.3) (0.2)
75.5 38.3 39.2
4 Property expenses
Year to Six months to Six months to
31 March 30 September 30 September
2016 2016 2015
£m £m £m
(11.3) Service charge income (6.7) (5.7)
12.3 Service charge expenses 7.6 6.1
7.2 Other property expenses 2.3 4.1
8.2 3.2 4.5
5 Finance income
Year to Six months to Six months to
31 March 30 September 30 September
2016 2016 2015
£m £m £m
7.8 Interest income on joint venture balances 4.3 3.9
7.8 4.3 3.9
6 Finance costs
Year to Six months to Six months to
31 March 30 September 30 September
2016 2016 2015
£m £m £m
3.4 Interest on revolving credit facilities 1.6 1.7
12.9 Interest on private placement notes 6.4 6.4
8.0 Interest on debenture stock 4.0 4.0
1.5 Interest on convertible bond 0.8 0.8
2.3 Interest on obligations under finance leases 1.0 1.1
28.1 Gross finance costs 13.8 14.0
(13.3) Less: capitalised interest at an average interest cost of 3.9% (2015: 3.9%) (10.4) (5.7)
14.8 Finance costs before finance income and fair value movements 3.4 8.3
7 Tax
Year to Six months to Six months to
31 March 30 September 30 September
2016 2016 2015
£m £m £m
Current tax
- UK corporation tax - current period - 0.5
(0.6) UK corporation tax - prior periods - (0.7)
(0.6) Total current tax - (0.2)
(0.5) Deferred tax 0.1 -
(1.1) Tax charge/(credit) for the period 0.1 (0.2)
The difference between the standard rate of tax and the effective rate of tax
arises from the items set out below:
Year to Six months to Six months to
31 March 30 September 30 September
2016 2016 2015
£m £m £m
555.1 (Loss)/profit before tax (62.7) 370.8
111.0 Tax (credit)/charge on (loss)/profit at standard rate of 20% (2015: 20%) (12.5) 74.1
(89.3) Changes in the fair value of properties, not subject to tax 25.3 (60.2)
(4.5) Changes in the fair value of derivatives and convertible bond, not subject to tax (7.7) 1.9
(18.4) REIT tax-exempt rental income and gains (5.6) (8.1)
(0.6) Prior periods' corporation tax - (0.7)
0.7 Other 0.6 (7.2)
(1.1) Tax charge/(credit) for the period 0.1 (0.2)
During the period £nil (2015: £nil) of deferred tax was credited directly to
equity. The Group's net deferred tax at 30 September 2016 is £1.2 million
(2015: £0.8 million). This consists of a deferred tax liability of £nil (2015:
£nil) and a deferred tax asset of £1.2 million (2015: £0.8 million).
Movement in deferred tax:
At Recognised in the income statement At
1 April 2016 £m 30 September 2016
£m £m
Revenue losses recognised in respect of trading property - cost of sales 1.3 (0.1) 1.2
Net deferred tax asset 1.3 (0.1) 1.2
A deferred tax asset of £5.7 million (based on a 19% tax rate), mainly
relating to contingent share awards, the pension liability and the convertible
bond, was not recognised because it is uncertain whether future taxable
profits will arise against which this asset can be utilised.
As a REIT, the Group is largely exempt from corporation tax in respect of its
rental profits and chargeable gains relating to its property rental business.
The Group is otherwise subject to corporation tax. In particular, the Group's
REIT exemption does not extend to either profits arising from the sale of
investment properties which have undergone a major redevelopment within the
preceding three years or profits arising from trading properties (including
the sale of the residential units at Rathbone Square, W1).
In order to ensure that the Group is able to both retain its status as a REIT
and to avoid financial charges being imposed, a number of tests (including a
minimum distribution test) must be met by both Great Portland Estates plc and
by the Group as a whole on an ongoing basis. These conditions are detailed in
the Corporation Tax Act 2010.
8 Earnings and net assets per share
EPRA earnings and net assets per share are calculated in accordance with the
guidance issued by the European Public Real Estate Association (EPRA).
Weighted average number of ordinary shares
Year to Six months to Six months to
31 March 30 September 30 September
2016 2016 2015
No. of shares No. of shares No. of shares
343,926,149 Issued ordinary share capital at 1 April 343,926,149 343,926,149
(1,811,076) Investment in own shares (2,073,445) (1,924,118)
342,115,073 Weighted average number of ordinary shares - basic 341,852,704 342,002,031
Basic and diluted earnings per share
Year to Six months to 30 September Six months to 30 September Six months to 30 September Six months to 30 September Six months to 30 September Six months to 30 September
31 March 2016 2016 2016 2015 2015 2015
2016 Loss after tax No. of Loss Profit after No. of Earnings
Earnings £m shares per share tax shares per share
per share million pence £m million pence
pence
162.6 Basic (62.8) 341.9 (18.4) 371.0 342.0 108.5
(0.7) Dilutive effect of LTIP shares - 0.6 - - 1.2 (0.4)
- Dilutive effect of convertible bond (9.5) 21.0 (1.5) - - -
161.9 Diluted (72.3) 363.5 (19.9) 371.0 343.2 108.1
EPRA Earnings per share
Year to Six months to 30 September Six months to 30 September Six months to 30 September Six months to 30 September Six months to 30 September Six months to 30 September
31 March 2016 2016 2016 2015 2015 2015
2016 (Loss)/profit after tax No. of (Loss)/earnings (Loss)/profit after tax No. of (loss)/earnings
Earnings £m shares per share £m shares per share
per share million pence million pence
pence
162.6 Basic (62.8) 341.9 (18.4) 371.0 342.0 108.5
(123.4) Deficit/(surplus) from investment property 90.3 - 26.4 (301.2) - (88.1)
(18.9) Deficit/(surplus) from joint venture investment property 38.3 - 11.2 (55.1) - (16.1)
(2.7) Movement in fair value of derivatives (28.4) - (8.3) 3.1 - 0.9
(4.0) Movement in fair value of convertible bond (10.3) - (3.0) 6.3 - 1.8
0.3 Movement in fair value of derivatives in joint ventures 0.8 - 0.3 (0.2) - -
0.2 Trading property - costs of sale 0.3 - 0.1 0.4 - 0.1
(0.1) Deferred taxation 0.1 - - - - -
14.0 Basic EPRA earnings 28.3 341.9 8.3 24.3 342.0 7.1
(0.1) Dilutive effect of LTIP shares - 0.6 - - 1.2 -
(0.4) Dilutive effect of convertible bond - - - 0.8 21.0 (0.2)
13.5 Diluted EPRA earnings 28.3 342.5 8.3 25.1 364.2 6.9
8 Earnings and net assets per share (continued)
EPRA Net assets per share
31 March 30 September 30 September 30 September 30 September 30 September 30 September
2016 2016 2016 2016 2015 2015 2015
Net assets Net assets No. of Net assets Net assets No. of Net assets
per share £m shares per share £m shares per share
pence million pence million pence
847 Basic 2,826.8 343.9 822 2,746.7 343.9 799
6 Investment in own shares - (1.8) 4 - (1.4) 3
(8) Dilutive effect of convertible bond - - - 150.0 21.0 (6)
(3) Dilutive effect of LTIP shares - 0.7 (1) - 1.2 (2)
842 Diluted net assets 2,826.8 342.8 825 2,896.7 364.7 794
6 Surplus on revaluation of trading property 2.0 - - 23.6 - 6
5 Fair value of convertible bond 9.2 - 3 39.3 - 11
(6) Fair value of derivatives (52.7) - (16) (12.0) - (3)
- Fair value of derivatives in joint ventures 2.1 - 1 1.3 - -
- Deferred tax (1.2) - - (0.8) - -
847 EPRA net assets (NAV) 2,786.2 342.8 813 2,948.1 364.7 808
(21) Fair value of financial liabilities (111.8) - (32) (45.3) - (12)
- Fair value of convertible bond (9.2) - (3) - - -
- Fair value of financial liabilities in joint ventures (2.9) - (1) (0.3) - -
6 Fair value of derivatives 52.7 - 16 12.0 - 3
- Fair value of derivatives in joint ventures (2.1) - (1) (1.3) - -
(1) Tax arising on sale of trading properties (0.4) - - (4.5) - (1)
- Deferred tax 1.2 - - 0.8 - -
831 EPRA triple net assets (NNNAV) 2,713.7 342.8 792 2,909.5 364.7 798
9 Investment property
Investment property
Freehold Leasehold Total
£m £m £m
Book value at 1 April 2016 1,133.5 1,046.9 2,180.4
Acquisitions - 32.8 32.8
Costs capitalised 1.6 10.9 12.5
Transfer from investment property under development 5.6 - 5.6
Disposals (25.8) - (25.8)
Net valuation deficit (51.1) (46.9) (98.0)
Book value at 30 September 2016 1,063.8 1,043.7 2,107.5
Investment property under development
Freehold Leasehold Total
£m £m £m
Book value at 1 April 2016 536.6 215.1 751.7
Purchase of freehold 239.0 (215.1) 23.9
Costs capitalised 68.2 - 68.2
Interest capitalised 4.8 - 4.8
Transfer to investment property (5.6) - (5.6)
Net valuation surplus 6.8 - 6.8
Book value at 30 September 2016 849.8 - 849.8
Book value of total investment property at 30 September 2016 1,913.6 1,043.7 2,957.3
9 Investment property (continued)
Surplus from investment property:
Year to Six months to 30 September Six months to 30 September
31 March 2016 2015
2016 £m £m
396.0 Net valuation (deficit)/surplus on investment property (91.2) 301.0
26.2 Profit on sale of investment properties 0.9 0.2
422.2 (Deficit)/surplus from investment property (90.3) 301.2
The investment and properties under development were valued on the basis of
Fair Value by CBRE Limited (CBRE), external valuers, as at 30 September 2016
in accordance with the Global RICS Valuation - Professional Standards January
2014 and the RICS UK valuation standards and guidance notes December 2014 (the
Red Book). The valuation has been primarily derived using comparable recent
market transactions on arm's length terms. CBRE have advised us that the total
fees paid to CBRE by the Group represent less than five per cent of their
total revenue in any year.
Whilst CBRE have not qualified their valuation they note in their valuation
report that "following the Referendum held on 23 June 2016 concerning the UK's
membership of the EU, a decision was taken to exit. Since that date we have
monitored market transactions and market sentiment in arriving at our opinion
of Market Value /Fair Value. After an initial period of uncertainty and an
absence of activity, transactional volumes and available evidence has risen in
most sectors of the market and liquidity is returning to more normal levels.
This has led to a generally more stable outlook for the market. However, there
remains a paucity of comparable transactions in central London offices,
development land and buildings, retail parks and large shopping centres and
therefore valuations in these sectors reflect a greater degree of judgement".
Real estate valuations are complex and derived using comparable market
transactions which are not publicly available and involve an element of
judgement. Therefore, in line with EPRA guidance, we have classified the
valuation of the property portfolio as Level 3 as defined by IFRS 13. There
were no transfers between levels during the period. Inputs to the valuation,
including capitalisation yields (typically the true equivalent yield) and
rental values, are defined as 'unobservable' as defined by IFRS 13.
Key inputs to the valuation (by building)
ERV True equivalent yield
Average Range Average Range
£ per sq ft £ per sq ft % %
North of Oxford Street Office 70 46-83 4.5 4.1-6.5
Retail 67 34-181 3.7 3.6-5.9
Rest of West End Office 82 63-97 4.7 3.8-5.9
Retail 116 15-257 4.2 4.2-4.6
City, Midtown and Southbank Office 55 45-62 5.2 4.8-5.9
Retail 71 32-115 5.0 4.8-5.3
Capital value
Average Range
£ per sq ft £ per sq ft
Residential 1,875 685 - 2,770 n/a n/a
Everything else being equal, there is a positive relationship between rental
values and the property valuation, such that an increase in rental values will
increase the valuation of a property and vice versa. However, the relationship
between capitalisation yields and the property valuation is negative;
therefore, an increase in capitalisation yields will reduce the valuation of a
property and vice versa. There are interrelationships between these inputs as
they are determined by market conditions and the valuation movement in any one
period depends on the balance between them. If these inputs move in opposite
directions (i.e. rental values increase and yields decrease) valuation
movements can be amplified whereas if they move in the same direction they may
offset reducing the overall net valuation movement.
The book value of investment properties includes £35.9 million (2015: £50.5
million) in respect of the present value of future ground rents, net of these
amounts the market value of the investment properties together with the market
value of the trading properties was £3,155.5 million. During the period, the
Group capitalised £1.1 million (2015: £1.0 million) of employee costs in
respect of its development team into trading properties and investment
properties under development. At 30 September 2016 the Group had capital
commitments of £136.1 million (2015: £328.2 million). At 30 September 2016,
investment properties with a value of £250.8 million were held for sale. In
November, this property, 73/89 Oxford Street, W1 was sold for £276.5 million,
representing £251.4 million in respect of the building and £25.1 million for
the development costs to come.
10 Trading property
31 March 30 September 30 September
2016 2016 2015
Total Total Total
£m £m £m
115.9 At beginning of the period 172.4 115.9
51.9 Costs capitalised 54.1 24.0
4.6 Interest capitalised 5.6 2.1
172.4 At the end of the period 232.1 142.0
The Group is developing a large mixed use scheme at Rathbone Square, W1. Part
of the approved scheme consists of residential units which the Group holds for
sale. As a result, the residential element of the scheme is held as trading
property. The fair value of the trading property was £234.1 million at 30
September 2016, representing a revaluation above cost of £2.0 million.
At 30 September 2016, the Group had exchanged to sell £262.1 million of the
apartments and received initial cash deposits of £63.1 million from the
purchasers (see note 14).
11 Investment in joint ventures
Equity Balances with partners Total
£m £m £m
At 1 April 2016 355.8 187.6 543.4
Movement on joint venture balances - 22.4 22.4
Additions 6.3 - 6.3
Share of profit of joint ventures 0.4 - 0.4
Share of revaluation deficit of joint ventures (38.4) - (38.4)
Profit on sale of investment property 0.1 - 0.1
Share of results of joint ventures (37.9) - (37.9)
Distributions (23.6) - (23.6)
At 30 September 2016 300.6 210.0 510.6
The investments in joint ventures comprise the following:
Ownership31 March Country of Incorporation Ownership30 September Ownership30 September
2016 2016 2015
50% The GHS Limited Partnership Jersey 50% 50%
50% The Great Capital Partnership (dormant) United Kingdom 50% 50%
50% The Great Ropemaker Partnership United Kingdom 50% 50%
50% The Great Victoria Partnerships United Kingdom 50% 50%
50% The Great Wigmore Partnership United Kingdom 50% 50%
11 Investment in joint ventures (continued)
Summarised balance sheets
31 March The GHS Limited Partnership £m The Great Capital Partnership The Great The Great The Great 30 September 30 September 30 September
2016 £m Ropemaker Victoria Wigmore 2016 2016 2015
At share Partnership£m Partnerships£m Partnership£m Total At share At share
£m £m £m £m
632.9 Investment property 246.4 - 658.9 287.4 7.5 1,200.2 600.1 610.1
0.7 Current assets - - 1.3 0.3 0.1 1.7 0.8 0.4
8.4 Cash 3.6 0.1 12.3 4.4 0.3 20.7 10.4 6.8
(187.6) Balances to/(from) partners (82.3) - (348.7) 10.9 - (420.1) (210.0) (179.3)
(84.5) Loan facilities - - (89.4) (79.6) - (169.0) (84.5) (76.0)
(1.2) Derivatives - - (4.1) - - (4.1) (2.1) (1.3)
(7.7) Current liabilities (1.2) - (11.1) (5.3) (0.3) (17.9) (9.0) (6.6)
(5.2) Finance leases - - (10.3) - - (10.3) (5.1) (5.2)
355.8 Net assets 166.5 0.1 208.9 218.1 7.6 601.2 300.6 348.9
Summarised income statements
31 March The GHS Limited Partnership £m The Great Capital Partnership £m The Great The Great The Great 30 September 30 September 30 September
2016 Ropemaker Victoria Wigmore 2016 2016 2015
At share Partnership£m Partnerships£m Partnership£m Total At share At share
£m £m £m £m
17.0 Net rental income - - 10.7 6.9 0.2 17.8 8.9 8.6
(2.2) Property and administration costs (0.9) - (3.4) (0.4) (0.2) (4.9) (2.5) (1.0)
(11.0) Net finance costs (2.0) - (6.9) (1.5) - (10.4) (5.2) (5.6)
(1.0) Movement in fair value of derivatives - - (1.7) - - (1.7) (0.8) 0.2
2.8 Share of profit/(loss) of joint ventures (2.9) - (1.3) 5.0 - 0.8 0.4 2.2
50.0 Revaluation of investment property (32.6) - (32.0) (6.2) - (70.8) (38.4) 40.9
14.0 Profit on sale of investment property - - - - 0.3 0.3 0.1 14.0
66.8 Share of results of joint ventures (35.5) - (33.3) (1.2) 0.3 (69.7) (37.9) 57.1
11 Investment in joint ventures (continued)
The non-recourse loans of the joint ventures at 30 September 2016 are set out
below:
Joint venture debt facilities: Nominal value Maturity Fixed/Floating Interest rate
£m
The Great Ropemaker Partnership 90.0 December 2020 Floating LIBOR +1.25%
The Great Victoria Partnership 80.0 July 2022 Fixed 3.74%
Total 170.0
The Great Ropemaker Partnership has entered into two interest rate swaps with
a fixed rate of 1.42%, which expire conterminously with the bank loan in 2020,
with a notional principal amount of £90.0 million. The loan has an all-in
hedged coupon of 2.67%.
At 30 September 2016, the Great Victoria Partnership loan had a fair value of
£85.7 million (2015: £83.2 million). All interest-bearing loans are in
sterling. At 30 September 2016, the joint ventures had £nil undrawn facilities
(2015: £nil).
The investment properties include £5.1 million (2015: £5.2 million) in respect
of the present value of future ground rents, net of these amounts the market
value of our share of the total joint venture properties is £595.0 million. At
30 September 2016, the Group's share of joint venture capital commitments was
£62.3 million (2015: £75.4 million).
Transactions during the period between the Group and its joint ventures, who
are related parties, are set out below:
31 March 30 September 30 September
2016 2016 2015
£m £m £m
(20.8) Movement on joint venture balances during the period (22.4) (29.1)
(187.6) Balances receivable at the period end from joint ventures (210.0) (179.3)
110.3 Distributions (23.6) (103.9)
4.1 Fee income 1.6 2.8
The joint venture balances bear interest as follows: the GHS Limited
Partnership at 5.3% on balances at inception and 4.0% on any subsequent
balances, the Great Ropemaker Partnership at 4.0% and the Great Wigmore
Partnership at 4.0%.
The Group earns fee income from its joint ventures for the provision of
management services. All of the above transactions are made on terms
equivalent to those that prevail in arm's length transactions.
12 Plant and equipment
Leasehold Fixtures and Total
improvements fittings £m
£m £m
Cost or valuation
At 1 April 2016 1.1 1.7 2.8
Disposals - (1.3) (1.3)
Additions 2.6 0.4 3.0
At 30 September 2016 3.7 0.8 4.5
Depreciation
At 1 April 2016 0.1 1.6 1.7
Disposals - (1.3) (1.3)
Charge for the period 0.2 0.1 0.3
At 30 September 2016 0.3 0.4 0.7
Carrying amount at 30 September 2016 3.4 0.4 3.8
Carrying amount at 31 March 2016 1.0 0.1 1.1
13 Trade and other receivables
31 March 30 September 30 September
2016 2016 2015
£m £m £m
3.9 Trade receivables 3.9 4.2
(0.2) Allowance for doubtful debts (0.4) (0.2)
3.7 3.5 4.0
1.2 Prepayments and accrued income 1.4 0.8
2.4 Work in progress on development management contracts 1.0 7.3
5.4 Other trade receivables 3.2 2.4
24.3 Derivatives 52.7 12.0
37.0 61.8 26.5
Work in progress on development management contracts is an amount due to the
Group in relation to a development property sold prior to its completion where
the Group has a contract with the buyer to construct the remainder of the
building on their behalf. During the period, the Group received payments on
account of £11.9 million (2015: £20.3 million). At 30 September 2016, the
aggregate cumulative cost incurred was £53.0 million (2015: £28.2 million) and
the cumulative profits less losses recognised were £5.7 million (2015: £4.0
million). There are no material project retentions.
14 Trade and other payables
31 March 30 September 30 September
2016 2016 2015
£m £m £m
21.1 Rents received in advance 21.6 21.2
57.2 Deposits received on forward sale of residential units 63.1 43.1
56.7 Non-trade payables and accrued expenses 65.4 52.3
135.0 150.1 116.6
15 Interest-bearing loans and borrowings
31 March 30 September 30 September
2016 2016 2015
£m £m £m
Non-current liabilities at amortised cost Secured
144.0 £142.9 million 5.625% debenture stock 2029 143.9 144.0
Unsecured
- Revolving credit facilities - bank loans 166.8 86.3
29.9 £30.0 million 5.09% private placement notes 2018 30.0 29.9
80.9 $130.0 million 4.81% private placement notes 2018 80.9 80.9
48.5 $78.0 million 5.37% private placement notes 2021 48.5 48.5
101.9 $160.0 million 4.20% private placement notes 2019 101.9 101.9
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