REG - Great Portland Ests. - Half Year Results 2014 <Origin Href="QuoteRef">GPOR.L</Origin> - Part 2
13/11/2014 08:21
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redemption £m
reserve
£m
Total equity at 1 April 2014 43.0 352.0 16.4 1,519.5 1.0 1,931.9
Profit for the period - - - 246.5 - 246.5
Actuarial deficit on defined benefit scheme - - - (1.2) - (1.2)
Employee Long-Term Incentive Plan and Share Matching Plan charge - - - - 2.1 2.1
Transfer to retained earnings - - - (2.9) 2.9 -
Dividends - - - (18.5) - (18.5)
Total equity at 30 September 2014 43.0 352.0 16.4 1,743.4 6.0 2,160.8
Condensed group statement of changes in equity
For the six months ended 30 September 2013 (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 2013 43.0 352.0 16.4 1,130.0 (3.7) 1,537.7
Profit for the period - - - 146.9 - 146.9
Actuarial deficit on defined benefit scheme - - - (1.1) - (1.1)
Employee Long-Term Incentive Plan and Share Matching Plan charge - - - - 2.9 2.9
Transfer to retained earnings - - - (2.3) 2.3 -
Dividends - - - (18.1) - (18.1)
Total equity at 30 September 2013 43.0 352.0 16.4 1,255.4 1.5 1,668.3
Condensed group statement of changes in equity
For the year ended 31 March 2014 (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 2013 43.0 352.0 16.4 1,130.0 (3.7) 1,537.7
Profit for the year - - - 422.2 - 422.2
Actuarial deficit on defined benefit scheme - - - (0.7) - (0.7)
Employee Long-Term Incentive Plan and Share Matching Plan charge - - - - 6.5 6.5
Purchase of own shares - - - - (4.1) (4.1)
Transfer to retained earnings - - - (2.3) 2.3 -
Dividends - - - (29.7) - (29.7)
Total equity at 31 March 2014 43.0 352.0 16.4 1,519.5 1.0 1,931.9
Condensed notes forming part of the half year results
1 Basis of preparation
The information for the year ended 31 March 2014 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.
Changes in accounting policy
In the current financial year the Group has applied for the first time IFRS 10
"Consolidated Financial Statements", IFRS 11 "Joint Arrangements" and IAS 28
(2011) "Investments in Associates and Joint Ventures", including the
amendments to the transitional guidance. Otherwise the same accounting
policies, presentation and methods of computation are followed in the
condensed set of financial statements as applied in the Group's latest
financial statements. There have been no changes to the basis of accounting on
the adoption of the Standards.
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 2014 £m Six months to
31 March 30 September
2014 2013
£m £m
60.5 Gross rental income 29.1 30.2
9.2 Amortisation of capitalised lease incentives 4.8 4.7
8.6 Service charge income 4.8 4.2
6.9 Joint venture fee income 2.0 3.7
85.2 40.7 42.8
3 Net rental income
Year to Six months to Six months to
31 March 30 September 30 September
2014 2014 2013
£m £m £m
60.5 Gross rental income 29.1 30.2
9.2 Amortisation of capitalised lease incentives 4.8 4.7
- Ground rents expense (0.1) -
69.7 33.8 34.9
4 Property expenses
Year to Six months to Six months to
31 March 30 September 30 September
2014 2014 2013
£m £m £m
(8.6) Service charge income (4.8) (4.2)
10.6 Service charge expenses 5.6 5.5
5.7 Other property expenses 2.2 3.5
7.7 3.0 4.8
5 Net finance (income)/expense
Year to Six months to Six months to
31 March 30 September 30 September
2014 2014 2013
£m £m £m
7.4 Interest on bank loans 2.6 4.5
11.5 Interest on private placement notes 6.0 5.8
8.0 Interest on debenture stock 4.0 4.0
0.8 Interest on convertible bond 0.8 0.1
3.3 Issue costs of convertible bond - 3.3
1.8 Interest on obligations under finance leases 0.7 1.0
0.1 Other interest - -
32.9 Gross finance costs 14.1 18.7
(6.4) Less: capitalised interest at an average interest cost of 4.1% (2013: 3.7%) (5.9) (2.1)
26.5 Finance costs before finance income and fair value movements 8.2 16.6
(8.5) Interest income on joint venture balances (5.6) (3.5)
(1.4) Interest income from deferred receipts in respect of 100 Bishopsgate Partnership - (1.0)
16.6 Net finance costs before fair value movements 2.6 12.1
23.8 Fair value movement on derivatives (6.3) 16.7
11.3 Fair value movement on convertible bond (4.0) 0.5
51.7 (7.7) 29.3
6 Tax
Year to Six months to Six months to
31 March 30 September 30 September
2014 2014 2013
£m £m £m
Current tax
- UK corporation tax - -
- Total current tax - -
- Deferred tax - -
- Tax charge for the period - -
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
2014 2014 2013
£m £m £m
422.2 Profit before tax 246.5 146.9
97.1 Tax charge on profit at standard rate of 21% (2013: 23%) 51.8 33.8
(90.0) Non-taxable revaluation surplus (45.6) (33.3)
(16.9) REIT tax-exempt rental income and gains (5.3) (5.3)
9.8 Other (0.9) 4.8
- Tax charge for the period - -
During the period £nil (2013: £nil) of deferred tax was credited directly to
equity. The Group's deferred tax at 30 September 2014 is £nil (2013: £nil).
This consists of a deferred tax liability of £nil (2013: £nil) and a deferred
tax asset of £nil (2013: £nil) in respect of sundry short-term timing
differences.
A deferred tax asset of £11.9 million (based on a 20% tax rate), mainly
relating to tax losses carried forward at 30 September 2014, contingent share
awards and the convertible bond, was not recognised because it is uncertain
whether future taxable profits will arise against which these losses can be
offset.
In general, 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, but is otherwise subject to corporation tax. In particular,
the Group is subject to corporation tax in respect of (i) any profits arising
on the sale of trading properties and (ii) any gains arising on the sale of
development properties which are sold within three years of completion of the
development.
7 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
2014 2014 2013
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
(1,883,427) Investment in own shares (830,946) (2,113,971)
342,042,722 Weighted average number of ordinary shares - basic 343,095,203 341,812,178
Basic and diluted earnings per share
Year to 31 March 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
2014 2014 2014 2014 2013 2013 2013
Earnings Profit after tax No. of Earnings Profit after tax No. of Earnings
per share £m shares per share £m shares per share
pence million pence million pence
123.4 Basic 246.5 343.1 71.8 146.9 341.8 43.0
(0.9) Dilutive effect of LTIP shares - 1.7 (0.3) - 1.8 (0.2)
122.5 Diluted 246.5 344.8 71.5 146.9 343.6 42.8
EPRA Earnings per share
Year to 31 March 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
2014 2014 2014 2014 2013 2013 2013
Earnings Profit after tax No. of Earnings Profit after tax No. of Earnings
per share £m shares per share £m shares per share
pence million pence million pence
123.4 Basic 246.5 343.1 71.8 146.9 341.8 43.0
(95.2) Surplus from investment property (168.6) - (49.1) (113.3) - (33.1)
(28.1) Surplus from joint venture investment property (48.6) - (14.2) (34.4) - (10.1)
6.9 Movement in fair value of derivatives (6.3) - (1.8) 16.7 - 4.9
3.3 Movement in fair value of convertible bond (4.0) - (1.2) 0.5 - 0.1
1.0 Issue costs of convertible bond - - - 3.3 - 1.0
(0.6) Movement in fair value of derivatives in joint ventures 0.1 - - (1.6) - (0.5)
0.5 Trading property - costs of sale 1.9 - 0.6 - - -
11.2 Basic EPRA earnings 21.0 343.1 6.1 18.1 341.8 5.3
(0.1) Dilutive effect of LTIP shares - 1.7 (0.1) - 1.8 -
(0.1) Dilutive effect of convertible bond 0.8 21.0 (0.1) - - -
11.0 Diluted EPRA earnings 21.8 365.8 5.9 18.1 343.6 5.3
7 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
2014 2014 2014 2014 2013 2013 2013
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
564 Basic 2,160.8 343.5 629 1,668.3 342.9 487
(4) Dilutive effect of LTIP shares - 1.7 (3) - 1.7 (3)
560 Diluted 2,160.8 345.2 626 1,668.3 344.6 484
(11) Fair value of financial liabilities (42.9) - (12) (25.8) - (8)
1 Fair value of financial liabilities in joint ventures 1.1 - - - - -
550 EPRA triple net assets 2,119.0 345.2 614 1,642.5 344.6 476
11 Fair value of financial liabilities 42.9 - 12 25.8 - 8
(1) Fair value of financial liabilities in joint ventures (1.1) - - - - -
4 Fair value of convertible bond 7.3 - 2 0.5 - -
5 Fair value of derivatives 9.0 - 3 10.4 - 3
- Fair value of derivatives in joint ventures 0.6 - - (1.0) - -
- Revaluation of trading properties 16.6 - 5 - - -
569 EPRA net assets 2,194.3 345.2 636 1,678.2 344.6 487
8 Investment property
Investment property
Freehold Leasehold Total
£m £m £m
Book value at 1 April 2014 950.1 767.4 1,717.5
Acquisitions - 7.9 7.9
Transfer to investment property under development (71.4) - (71.4)
Costs capitalised 5.1 5.8 10.9
Disposals (8.0) - (8.0)
Net valuation surplus 70.3 58.6 128.9
Book value at 30 September 2014 946.1 839.7 1,785.8
Investment property under development
Freehold Leasehold Total
£m £m £m
Book value at 1 April 2014 114.2 141.0 255.2
Transfer from investment property 71.4 - 71.4
Costs capitalised 13.0 11.0 24.0
Interest capitalised 4.0 1.9 5.9
Net valuation surplus 26.3 13.1 39.4
Book value at 30 September 2014 228.9 167.0 395.9
Book value of total investment property at 30 September 2014 1,175.0 1,006.7 2,181.7
30 September 30 September
2014 2013
£m £m
Net valuation surplus on investment property 168.3 112.9
Profit on sale of investment properties 0.3 0.4
Surplus from investment property 168.6 113.3
8 Investment property (continued)
The investment and properties under development were valued on the basis of
Fair Value by CBRE, external valuers, as at 30 September 2014 in accordance
with the RICS Valuation - Professional Standards (2012) ("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.
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.
The book value of investment properties includes £29.1 million (2013: £40.4
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 £2,271.3 million. During the period, the
Group capitalised £1.1 million (2013: £1.1 million) of employee costs in
respect of its development team into trading properties and investment
properties under development. At 30 September 2014 the Group had capital
commitments of £262.8 million (2013: £110.6 million).
In November 2014, the Group exchanged contracts to sell its leasehold interest
in 12/14 New Fetter Lane, EC4, subject to the freeholder's consent, for £92.8
million (£4.9 million ahead of the 30 September 2014 book value adjusted for
capital expenditure) assuming completion at 1 December 2014. The Group will
complete the development of the property on behalf of the purchaser.
9 Trading property
31 March 30 September 30 September
2014 Total 2014 Total £m 2013 Total £m
£m
- At beginning of the period 93.3 -
93.3 Additions 8.8 -
93.3 At the end of the period 102.1 -
During the year ended 31 March 2014, the Group gained full planning consent
for its development site 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. At 30 September
2014, the Group had exchanged to sell £207.4 million of the apartments and
received initial cash deposits of £20.7 million from the purchasers (see note
16).
10 Investment in joint ventures
Equity Balances with partners £m Total
£m £m
At 1 April 2014 350.8 174.0 524.8
Movement on joint venture balances - 27.0 27.0
Additions 0.3 - 0.3
Share of profit of joint ventures 2.1 - 2.1
Share of revaluation surplus of joint ventures 48.6 - 48.6
Share of results of joint ventures 50.7 - 50.7
Distributions (3.5) - (3.5)
At 30 September 2014 398.3 201.0 599.3
10 Investment in joint ventures (continued)
The investments in joint ventures are all resident in the United Kingdom and
comprise the following:
Ownership31 March Country of Incorporation Ownership30 September Ownership30 September
2014 2014 2013
50% The GHS Limited Partnership Jersey 50% -
50% The Great Capital Partnership United Kingdom 50% 50%
50% The Great Ropemaker Partnership United Kingdom 50% 50%
50% The Great Star Partnership United Kingdom 50% 50%
50% The Great Victoria Partnerships United Kingdom 50% 50%
50% The Great Wigmore Partnership United Kingdom 50% 50%
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
2014 2014 2013
£m £m £m
(162.3) Movement on joint venture balances during the period (27.0) (28.7)
174.0 Balances receivable at the period end from joint ventures 201.0 40.4
153.3 Distributions 3.5 55.6
6.9 Fee income 2.0 3.7
202.0 Property sales from the Group to joint ventures - -
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 6.0%, the Great Star Partnership
at 7.0% 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.
The non-recourse loans of the joint ventures at 30 September 2014 are set out
below:
Joint venture debt facilities: Nominal value Maturity Fixed/Floating Interest rate
£m
The Great Ropemaker Partnership 73.0 November 2018 Floating LIBOR +2.25-2.70%
The Great Star Partnership 74.6 July 2015 Floating LIBOR +1.75%
The Great Victoria Partnership 80.0 July 2022 Fixed 3.74%
Total 227.6
The Great Ropemaker Partnership has two interest rate swaps with a fixed rate
of 2.12% and a notional principal amount of £73.0 million. The interest rate
swaps expire coterminously with the bank loan in 2018. The Great Star
Partnership has an interest rate swap with a fixed interest rate of 1.00% and
a notional principal amount of £37.3 million and an interest rate cap at 4.00%
with a notional principal amount of £37.3 million. The interest rate swap and
cap expire coterminously with the bank loan in 2015. At 30 September 2014, the
Great Victoria Partnership loan had a fair value of £77.9 million (2013: £75.3
million). All interest bearing loans are in sterling. At 30 September 2014,
the joint ventures had £nil undrawn facilities (2013: £nil).
The investment properties include £16.2 million (2013: £16.2 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 £711.5
million. At 30 September 2014 the Group's share of joint venture capital
commitments was £32.6 million (2013: £16.3 million).
10 Investment in joint ventures (continued)
Summarised balance sheets
31 March The GHS Limited Partnership £m The Great Capital Partnership £m The Great The Great Star Partnership £m The Great The Great 30 September 30 September
2014 Ropemaker Victoria Wigmore 2014 2013
Total Partnership£m Partnerships£m Partnership£m Total Total
£m £m £m
657.4 Investment property 109.2 - 270.3 106.8 132.8 108.6 727.7 493.1
1.0 Current assets 0.1 - 0.1 0.4 0.3 - 0.9 3.0
(174.0) Balances to/(from) partners (32.2) - (131.6) (27.8) 5.5 (14.9) (201.0) (40.4)
12.4 Cash 1.0 0.1 6.5 3.2 2.1 1.1 14.0 11.9
(113.4) Bank loans - - (36.1) (37.1) (39.7) - (112.9) (113.8)
(0.6) Derivatives - - (0.6) - - - (0.6) (1.0)
(15.8) Current liabilities (0.3) - (7.1) (2.8) (2.5) (0.9) (13.6) (15.2)
(16.2) Finance leases - - (5.2) (11.0) - - (16.2) (16.2)
350.8 Net assets 77.8 0.1 96.3 31.7 98.5 93.9 398.3 321.4
Summarised income statements
31 March The GHS Limited Partnership £m The Great Capital Partnership £m The Great The Great Star Partnership £m The Great The Great 30 September 30 September
2014 Ropemaker Victoria Wigmore 2014 2013
Total Partnership£m Partnerships£m Partnership£m Total Total
£m £m £m
20.1 Net rental income 0.4 - 4.8 2.6 2.7 1.8 12.3 10.0
(2.6) Property and administration costs (0.1) - (0.7) (0.8) (0.1) (0.3) (2.0) (1.3)
(10.1) Net finance costs (0.8) - (4.5) (1.7) (0.8) (0.3) (8.1) (4.3)
2.0 Movement in fair value of derivatives - - (0.1) - - - (0.1) 1.6
9.4 Share of profit/(loss) of joint ventures (0.5) - (0.5) 0.1 1.8 1.2 2.1 6.0
93.5 Revaluation of investment property 5.9 - 25.4 6.1 9.8 1.4 48.6 31.7
2.7 Profit on sale of investment property - - - - - - - 2.7
105.6 Share of results of joint ventures 5.4 - 24.9 6.2 11.6 2.6 50.7 40.4
11 Other investment
31 March 30 September 2014 Equity £m 30 September 2014 Loans £m 30 September 30 September
2014 Total 2014 Total £m 2013 Total £m
£m
16.7 At beginning of the period 6.1 12.2 18.3 16.7
1.6 Additions - 1.2 1.2 0.9
18.3 At the end of the period 6.1 13.4 19.5 17.6
At 30 September 2014, the Group had a 12.5% interest in The 100 Bishopsgate
Partnership, a venture with Brookfield Properties Corporation (BPO), which is
classified as an "other investment". The Group's holding is subject to 'put
and call' options, with GPE able to 'put' its investment onto BPO in November
2014 for £15.8 million, and BPO able to 'call' for GPE to sell to a third
party investor only in the event that BPO simultaneously sells a 37.5%
holding. Under the call option, the transfer price is the higher of £15.8
million, the actual transfer price agreed between BPO and the third party or
the market value of GPE's holding at the time of the transfer. BPO is
providing 100% of the funding for the Partnership until October 2014, when the
loan will be repaid.
In November 2014, the Group exercised the put option. Therefore, in December
2014 the Group will receive £15.8 million, comprising £19.5 million in respect
of its 12.5% interest in the Partnership, net of £3.7 million required to
repay the loan provided by BPO (see note 15).
The equity element of the investment is classified as level 3 fair value
measurement in accordance with IFRS 13. There have been no transfers to or
from level 3, nor any fair value movements in this category, during the
period. Accordingly, no reconciliation between the opening and closing
position has been presented. The fair value of the other investment is based
on the underlying net asset value of the Group's interest in the 100
Bishopsgate Partnership.
12 Plant and equipment
Leasehold Fixtures and Total
improvements fittings £m
£m £m
Cost or valuation
At 1 April 2014 2.0 1.5 3.5
Additions - - -
At 30 September 2014 2.0 1.5 3.5
Depreciation
At 1 April 2014 1.7 1.5 3.2
Charge for the period 0.1 - 0.1
At 30 September 2014 1.8 1.5 3.3
Carrying amount at 30 September 2014 0.2 - 0.2
Carrying amount at 31 March 2014 0.3 - 0.3
13 Trade and other receivables
31 March 30 September 30 September
2014 2014 2013
£m £m £m
3.6 Trade receivables 4.7 4.8
(0.3) Allowance for doubtful debts (0.1) (0.3)
3.3 4.6 4.5
0.8 Prepayments and accrued income 0.8 1.0
- Deferred proceeds on property disposals - 92.6
21.8 Other trade receivables 4.7 5.4
0.8 Derivatives - interest rate floors 2.4 2.3
26.7 12.5 105.8
14 Trade and other payables
31 March 30 September 30 September
2014 2014 2013
£m £m £m
16.0 Rents received in advance 16.8 16.7
42.7 Non-trade payables and accrued expenses 19.3 26.1
58.7 36.1 42.8
15 Interest-bearing loans and borrowings
31 March 30 September 30 September
2014 2014 2013
£m £m £m
Non-current liabilities at amortised cost Secured
144.1 £142.9 million 5.625% debenture stock 2029 144.0 144.1
2.6 Other loan 3.7 1.8
Unsecured
11.0 Bank loans and overdrafts 63.9 205.5
29.9 £30.0 million 5.09% private placement notes 2018 29.9 29.9
80.8 $130.0 million 4.81% private placement notes 2018 80.8 80.8
48.4 $78.0 million 5.37% private placement notes 2021 48.5 48.4
101.7 $160.0 million 4.20% private placement notes 2019 101.8 101.7
25.4 $40.0 million 4.82% private placement notes 2022 25.4 25.4
Non-current liabilities at fair valueUnsecured
161.3 £150.0 million 1.00% convertible bonds 2018 157.3 150.5
18.3 Derivatives - cross currency swaps 11.4 12.6
623.5 666.7 800.7
At 30 September 2014, the Group had two floating rate revolving credit
facilities of £350.0 million and £150.0 million. The £350.0 million facility
is unsecured, attracts a floating rate based on a ratchet of between 155-230
basis points above LIBOR, based on gearing, and expires in 2015. The £150.0
million facility is unsecured, attracts a floating rate based on a ratchet of
between 175-250 basis points above LIBOR, based on gearing, and expires in
2017. The Group had £441.0 million (2013: £293.0 million) of undrawn committed
credit facilities. In October 2014, the Group replaced the £350.0 million and
£150.0 million facilities with a new £450.0 million revolving credit facility.
The new facility attracts a floating rate based on a ratchet of between
105-165 basis points above LIBOR, based on gearing, and has a maturity of five
years which may be extended to a maximum of seven years on our request, and on
each bank's approval for its participation.
The Group's convertible bonds have a fixed coupon of 1.0% per annum and an
initial conversion price of £7.15 per share, representing a premium of 35%
above the volume weighted average price of the Company's shares from launch to
pricing. In accordance with IAS39, the Convertible Bonds have been designated
at fair value through profit and loss upon initial recognition, with any gains
or losses arising on subsequent re-measurement recognised in the income
statement.
At 30 September 2014, properties with a carrying value of £332.2 million
(2013: £298.8 million) were secured under the Group's debenture stock. The
following table details the notional principal amounts and remaining terms of
interest rate derivatives outstanding at 30 September:
Average contracted fixed interest rate Notional principal amount Fair value asset/(liability)
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