REG - Helical PLC - Half-year Report
22/11/2022 07:00
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RNS Number : 1359H Helical PLC 22 November 2022
HELICAL PLC
("Helical" or the "Group" or the "Company")
Results for the Half Year to 30 September 2022 (the "Period")
Leasing Progress with StRong Rents for Best-in-Class Portfolio
Gerald Kaye, Chief Executive, commented:
"Helical has had a good half year. Lettings were achieved at significant
premiums to March ERVs and development gains were generated at The JJ Mack
Building, EC1, with these successes offset by yield expansion on our standing
investments as a consequence of higher interest rates.
"We are seeing strong demand from tenants for best-in-class office space, as
evidenced by the Partners Group letting at The JJ Mack Building, EC1. We
believe there is an intrinsic shortage of this top quality space as demand
exceeds supply over the short and medium term.
"The bifurcation that has been evident for a few years in the leasing market,
between the best-in-class most sustainable buildings and the rest, has now
appeared in the investment market, accentuated by rising bond yields and
interest rates. We anticipate this will accelerate, with yields stabilising
and rents continuing to grow for the best-in-class most sustainable buildings,
such as those that comprise the Helical portfolio, and yields moving outwards
and rents falling for the rest.
"Price discovery will continue for the poorer quality less sustainable
second-hand buildings as they decouple from the rest of the market. In time,
these assets will provide Helical with the opportunity to turn these tired
office buildings into market leading and highly sustainable new spaces
providing amenity rich and technologically enabled offices which will appeal
to discerning tenants seeking the best environment for their staff. This will
enable us to continue to provide strong returns from our developments over the
medium term."
Operational Highlights
Strong Leasing Performance
· We completed four new lettings during the Period totalling 19,642 sq
ft, delivering contracted rent of £1.3m (our share £1.2m) at a 2.2% premium
to 31 March 2022 ERVs.
· Since the half year, we have let 37,880 sq ft at The JJ Mack
Building, EC1, delivering contracted rent of £3.8m (our share £1.9m) at an
11.7% premium to 31 March 2022 ERVs. Two further lettings totalling 4,818 sq
ft have completed, delivering contracted rent of £0.2m (our share £0.2m).
Good Progress on Developments
· Practical completion was achieved at The JJ Mack Building, EC1, on 30
September 2022, as scheduled. Two floors are now let in this highly
sustainable 205,958 sq ft office development and the remaining space is being
marketed.
· At 100 New Bridge Street, EC4, we have submitted a planning application
for the sustainable refurbishment of the building, which should be determined
soon. Once approved, the redevelopment work is anticipated to commence in late
2023 after vacant possession has been achieved.
Over £200m of Sales during the Period, all above March Book Value
· During the Period we sold over £196m of investment properties, all at
premiums to 31 March 2022 valuations, and £5m (our share) of residential
apartments at Barts Square, EC1.
Financial Highlights
Earnings and Dividends
· IFRS profit after tax of £17.2m (2021: £22.2m).
· IFRS basic earnings per share of 14.1p (2021: 18.2p).
· EPRA earnings per share(1) of 4.8p (2021: 0.9p).
· Interim dividend increased by 5.2% to 3.05p per share (2021: 2.90p).
Balance Sheet
· Net asset value up 0.8% to £692.7m (31 March 2022: £687.0m).
· Total Accounting Return(1) on IFRS net assets of 2.3% (2021: 3.9%).
· Total Accounting Return(1) on EPRA net tangible assets of -2.5%
(2021: 5.1%).
· EPRA net tangible asset value per share(1) down 3.3% to 553p (31
March 2022: 572p).
· EPRA net disposal value per share(1) up 1.5% to 559p (31 March 2022:
551p).
Financing
· See-through loan to value(1) reduced to 26.4% (31 March 2022: 36.4%).
· See-through net borrowings(1) of £241.8m (31 March 2022: £402.9m).
· Average maturity of the Group's share(1) of secured debt of 3.4 years
(31 March 2022: 3.0 years).
· 100% of drawn debt protected by interest rate hedging to expiry of
facilities.
· Gain in valuation of derivative financial instruments of £26.6m
(2021: £4.6m).
· See-through average cost of secured facilities(1) of 3.0% (31 March
2022: 3.2%).
· Group's share(1) of cash and undrawn bank facilities of £293.1m (31
March 2022: £132.3m).
Portfolio Update
· IFRS investment property portfolio value of £738.5m (31 March 2022:
£938.8m).
· Our see-through investment portfolio, valued at £907.7m (31 March 2022:
£1,097.3m), is down 2.2% with like-for-like yield expansion of 22bps offset
by 4.3% ERV growth.
· See-through contracted rents(1) of £37.0m (31 March 2022: £46.4m)
compared to an ERV of £59.7m (31 March 2022: £67.1m).
· See-through portfolio WAULT(1) of 4.6 years (31 March 2022: 5.6
years).
· Vacancy rate increased from 6.0% to 7.0% on a like-for-like basis and
from 6.7% to 19.2% for the whole portfolio, following practical completion of
The JJ Mack Building, EC1.
Sustainability Highlights
· Net Zero Carbon Pathway published in May 2022, setting out our
commitment to becoming a net zero carbon business by 2030. Signatory to the
BPF Net Zero Pledge and the Better Build Partnership Climate commitment.
· The JJ Mack Building, EC1 achieved 2018 BREEAM "Outstanding" at the
design stage and an EPC A rating following practical completion. A NABERS 5
Star rating is anticipated, reflecting our commitment to achieve excellent
energy efficiency in operation.
· Improvements across sustainability measures, with 5 Star GRESB
ratings awarded for both our standing investments and our developments, and
retention of MSCI ESG AAA and EPRA Sustainability BPR Gold.
Interim Dividend Timetable
Announcement date 22 November 2022
Ex-dividend date 1 December 2022
Record date 2 December 2022
Dividend payment date 13 January 2023
Equiniti were appointed the Company's Registrar on 31 October 2022.
For further information, please contact:
Helical plc 020 7629 0113
Gerald Kaye (Chief Executive)
Tim Murphy (Chief Financial Officer)
Address: 5 Hanover Square, London W1S 1HQ
Website: www.helical.co.uk (http://www.helical.co.uk)
Twitter: @helicalplc
FTI Consulting 020 3727 1000
Dido Laurimore/Richard Gotla/Andrew Davis
schelical@fticonsulting.com (mailto:schelical@fticonsulting.com)
Results Presentation
Helical will be holding a presentation for analysts and investors starting at
10:30am on Tuesday 22 November 2022 at the offices of Numis. If you would like
to attend, please contact FTI Consulting on 020 3727 1000, or email
schelical@fticonsulting.com (mailto:schelical@fticonsulting.com)
The presentation will be on the Company's website www.helical.co.uk
(http://www.helical.co.uk) and a conference call facility will be available.
The dial-in details are as follows:
Participants, Local - London, United Kingdom: +44 (0) 33 0551 0200
Participation Code: Quote Helical when prompted by operator
Webcast Link:
https://stream.brrmedia.co.uk/broadcast/633d925051e5f558854f51ba
(https://stream.brrmedia.co.uk/broadcast/633d925051e5f558854f51ba)
Half Year Results Statement
At Helical, sustainability is at the heart of everything we do and forms one
of the key pillars of our strategy. With this in mind, we have taken the
decision to cease mailing hard copies of our half year results reports to our
Shareholders and other stakeholders unless specifically requested. Should you
wish to receive a hard copy of our Results for the Half Year to 30 September
2022 by post, please email your request to companysecretary@helical.co.uk
(mailto:companysecretary@helical.co.uk) . An electronic version of our Results
for the Half Year to 30 September 2022 will be made available on our website
(https://www.helical.co.uk/investors/results-and-presentations/
(https://www.helical.co.uk/investors/results-and-presentations/) ) on 22
November 2022.
1. See Glossary for definition of terms. The financial statements have
been prepared in accordance with International Accounting Standards ("IAS") in
conformity with the Companies Act 2006. In common with usual and best practice
in our sector, alternative performance measures have also been provided to
supplement IFRS, some of which are based on the recommendations of the
European Public Real Estate Association ("EPRA"), with others designed to give
additional information about the Group's share of assets and liabilities,
income and expenses in subsidiaries and joint ventures.
Chief Executive's Statement
Overview
Helical has had a good half year. Lettings were achieved at significant
premiums to March ERVs and development gains were generated at The JJ Mack
Building, EC1, with these successes offset by yield expansion on our standing
investments as a consequence of higher interest rates.
During the last 14 years of ultra-low interest rates, the UK had become
complacent, expecting a gradual return to normal financing levels whenever the
Bank of England decided to implement a long-awaited reversal of quantitative
easing. The delay in taking such action left the market exposed to events and
the post-Covid inflation spike, accentuated by the energy crisis arising out
of the invasion of Ukraine, have caused interest rates and bond yields to rise
sharply. Property yields have, as a consequence, expanded to reflect this
change in the cost of capital.
We are seeing strong demand from tenants for best-in-class office space, as
evidenced by the Partners Group letting at The JJ Mack Building, EC1. We
believe there is an intrinsic shortage of this top quality space as demand
exceeds supply over the short and medium term.
The Bond Street station of the Elizabeth Line opened on 24 October and the
entire route is now complete. Almost all of our portfolio is within a 12
minute walk of the Elizabeth Line which will transform journeys across Central
London. As investors in London, we are hugely proud of an extraordinary feat
of engineering which is a fitting tribute to our late Queen.
Sustainability
Sustainability remains at the heart of our business, both on a corporate and
asset level.
In May, we published our "Net Zero Carbon Pathway", setting out how we intend
to reduce our carbon emissions across our development activities and existing
portfolio. More recently, we have been ranked the number one company in the UK
Office Listed sector for our standing investment properties, scoring 88%, in
the GRESB annual sustainability performance index, with a score of 94% for our
developments. Alongside this, we also received a 5 Star GRESB rating for both
our Standing Investments and Developments and retained our Green Star status.
For our sustainability reporting, we won a Gold Award for the second
consecutive year, for reporting in accordance with EPRA's European
Sustainability Best Practice Recommendations (sBPR).
Our portfolio is very well placed in terms of energy efficiency, with 99% of
our assets (by value) already compliant with the proposed legislative
requirement that all rented commercial buildings achieve a minimum EPC rating
of B by 2030.
On 30 September 2022, The JJ Mack Building, EC1 reached practical completion,
the UK's first commercial building to be awarded BREEAM "Outstanding" at the
design stage under the 2018 assessment criteria. In addition, the building is
rated EPC A and is anticipated to receive a NABERS 5 Star for the commitment
to achieve excellent energy efficiency in operation. It is intended that The
JJ Mack Building, EC1 will be Helical's first net zero carbon building.
Results for the Half Year
The profit after tax for the half year to 30 September 2022 was £17.2m (2021:
£22.2m), reflecting a nil tax charge (2021: £8.8m) following the conversion
of Helical into a UK REIT on 1 April 2022.
The see-through Total Property Return of £4.0m (2021: £44.9m), incorporating
the Group's share of results of its joint ventures, includes see-through net
rental income of £18.2m (2021: £14.1m), a 29% increase, while developments
generated see-through profits of £0.9m (2021: profit of £1.0m). The
see-through net loss on sale and revaluation of the investment portfolio was
£15.1m (2021: gain of £29.8m).
Total see-through net finance costs reduced to £7.2m (2021: £7.8m). An
increase in expected future interest rates led to a £26.6m gain (2021:
£4.6m) in the valuation of the Group's derivative financial instruments.
See-through total administration costs, including performance related awards
and NIC, were down 19% to £6.0m (2021: £7.4m).
There was an IFRS basic earnings per share of 14.1p (2021: 18.2p) and an EPRA
earnings per share of 4.8p (2021: 0.9p).
On a like-for-like basis, the see-through investment portfolio fell in value
by 2.2% (1.1% including sales and purchases).
The portfolio was 81% let at 30 September 2022, generating contracted rents of
£37.0m, at an average of £58 psf, growing to £48.7m on the letting of
currently vacant space and moving towards capturing its ERV of £59.7m (31
March 2022: £67.1m). The Group's contracted rent has a Weighted Average
Unexpired Lease Term ("WAULT") of 4.6 years.
The Total Accounting Return ("TAR"), being the growth in the IFRS net asset
value of the Group, plus dividends paid in the period, was 2.3% (2021: 3.9%).
Based on EPRA net tangible assets, the TAR was
-2.5% (2021: 5.1%). EPRA net tangible assets per share were down 3.3% to 553p
(31 March 2022: 572p), with EPRA net disposal value per share up 1.5% to 559p
(31 March 2022: 551p).
Balance Sheet Strength and Liquidity
The Group has a significant level of liquidity, with see-through cash and
unutilised bank facilities of £293.1m (31 March 2022: £132.3m) to fund
capital works on its portfolio or future acquisitions.
At 30 September 2022, the Group had £46.1m of cash deposits available to
deploy without restrictions and a further £12.8m of rent in bank accounts
available to service payments under loan agreements, cash held at managing
agents and cash held in joint ventures. Furthermore, the Group had £234.2m of
loan facilities available to draw on, with £60.0m expiring in December 2022.
The see-through loan to value ratio ("LTV") reduced to 26.4% at the balance
sheet date (31 March 2022: 36.4%) and our see-through net gearing, the ratio
of net borrowings to the net asset value of the Group, reduced to 34.9% (31
March 2022: 58.6%) over the same period.
At the Period end, the average debt maturity on secured loans, on a
see-through basis, was 3.4 years (31 March 2022: 3.0 years). The average cost
of debt, on a see-through basis, at 30 September 2022 was 3.0% (31 March 2022:
3.2%).
Dividends
Helical is a capital growth stock, seeking to maximise value by successfully
letting redeveloped and refurbished property. Once stabilised, these assets
are either retained for their long-term income and reversionary potential or
sold to recycle equity into new schemes.
This recycling leads to fluctuations in our EPRA earnings per share, as the
calculation of these earnings excludes capital profits generated from the sale
and revaluation of assets. As such, both EPRA earnings and realised capital
profits are considered when determining the payment of dividends.
In the half year to 30 September 2022, the additional rental income from the
purchase of 100 New Bridge Street, EC4 in March 2022 boosted EPRA earnings per
share to 4.8p (2021: 0.9p). The sales of over £196m of investment assets
during the Period realised £53.4m of capital profits.
In considering the appropriate level of interim dividend to be paid in respect
of the half year results, the Board has assessed the financial success of the
Period against the economic backdrop that the Company is operating in.
Accordingly, the Board has approved a 5.2% increase in the interim dividend to
3.05p per share (2021: 2.90p).
Following its conversion to a UK REIT, dividends payable by Helical will
comprise a Property Income Distribution ("PID") from the operations that fall
under the REIT regime, and a dividend from those operations that fall outside
the REIT regime. None of the interim dividend is to be paid as a PID.
Outlook
The bifurcation that has been evident for a few years in the leasing market,
between the best-in-class most sustainable buildings and the rest, has now
appeared in the investment market, accentuated by rising bond yields and
interest rates. We anticipate this will accelerate, with yields stabilising
and rents continuing to grow for the best-in-class most sustainable buildings,
such as those that comprise the Helical portfolio, and yields moving outwards
and rents falling for the rest.
Price discovery will continue for the poorer quality less sustainable
second-hand buildings as they decouple from the rest of the market. In time,
these assets will provide Helical with the opportunity to turn these tired
office buildings into market leading and highly sustainable new spaces
providing amenity rich and technologically enabled offices which will appeal
to discerning tenants seeking the best environment for their staff. This will
enable us to continue to provide strong returns from our developments over the
medium term.
Gerald Kaye
Chief Executive
22 November 2022
Sustainability and Net Zero Carbon
We continue to make good progress against the targets we set out in our
sustainability strategy "Built for the Future" and our aim to become a net
zero carbon business by 2030. With the publication of our "Net Zero Carbon
Pathway" in May 2022, our progress towards rapidly decreasing our emissions
across our development activities and existing portfolio has been recognised
by our improved GRESB status.
We have been ranked the number one company in the UK Office Listed sector,
scoring 88% and receiving a 5 Star GRESB rating in the annual sustainability
performance index for our standing investment properties. Alongside this, we
received a 5 Star GRESB rating for our developments, scoring 94%.
For our sustainability reporting, we won a Gold Award for the second
consecutive year, for reporting in accordance with EPRA's European
Sustainability Best Practice Recommendations (sBPR). The EPRA sBPR is intended
to raise the standards and consistency of sustainability reporting for listed
real estate companies across Europe.
Our portfolio is well placed in terms of energy efficiency, with 99% of our
assets (by value) already compliant with the proposed legislative requirement
that all rented commercial buildings achieve a minimum EPC rating of B by
2030. Market research suggests that only circa 20% of commercial assets are
currently compliant, with significant capital outlay likely to be required to
take non-compliant buildings up to the minimum standard. Likewise, 99% of our
assets (by value) hold a BREEAM certification, with 87% being "Outstanding" or
"Excellent" (excluding 100 New Bridge Street, EC4, which is to be
refurbished).
On 30 September 2022, The JJ Mack Building, EC1 reached practical completion,
the UK's first commercial building to be awarded BREEAM "Outstanding" at the
design stage under the 2018 regulations. Through the use of recycled
materials, earth friendly concrete and modern methods of construction, we have
reduced embodied carbon to 42% below the current "Business as Usual" RIBA
target. Operationally, it is estimated that carbon emissions will be circa 53%
lower than the regulated Targeted Emissions Rate as defined by Part L of the
Building Regulations (2013). This reduction is a result of sustainable,
intelligent and renewable technologies designed into the building alongside
connection to the Citigen District Energy Network. Our embodied carbon from
construction is in the process of being offset and, once completed, will
provide us with our first net zero carbon building.
Going forward, we will continue to focus, where we can, on delivering "carbon
friendly new build" schemes, such as the planned redevelopment of 100 New
Bridge Street, EC4, where we will re-use or recycle large portions of the
existing building and look to incorporate the existing structural frame to
minimise the carbon impact.
Our Market
General overview
The past six months have seen a period of intense global macro-economic
volatility. Central banks have sought to raise interest rates to combat the
increasingly persistent inflation rates seen as economies recover from the
impacts of Covid-19 and rising energy costs. Domestically, the volatility has
been heightened over recent months. Investors across all asset classes
continue to recalibrate return expectations following the end to the period of
ultra-low interest rates which has run since 2008.
The commercial property sector has been impacted by these wider economic
forces and yields across all sectors have moved out over the period as
investors seek to retain a risk premium over the rising equivalent risk free
rate. However, against these negative economic trends we continue to see
evidence of an acceleration in the bifurcation of real estate assets,
particularly in the Central London office market, which supports our continued
belief that our best-in-class, new, sustainable portfolio should prove
resilient to current pressures and be well positioned to grow going forward.
Leasing Market
The leasing market continues to show encouraging signs with year to date
take-up of 9.0m sq ft, 48% up on the same period in 2021. 3.8m sq ft is also
reported to be under offer, which is above the 10 year average. However,
demand is not evenly distributed across the market with tenants focusing upon
the limited supply of the best-in-class space that delivers extensive tenant
amenity and is at the forefront of sustainability. Second-hand space has
become increasingly hard to let and now represents 68% of the total
availability of 24.7m sq ft in the marketplace at the end of Q3.
These dynamics have resulted in demonstrable rental growth across most Central
London sub-markets. Occupiers from the professional services continue to make
up the majority of tenant demand as they seek to provide exciting workspaces
for their staff who have now returned to predominately office based working.
Demand from these sectors is compensating for the reduced demand from the TMT
sector which is currently experiencing specific challenges.
Investment Market
After an encouraging start to the year, driven by a number of large lot size
transactions, investment activity in Central London has slowed. Investors are
having to consider the impacts of cost inflation, rising costs of borrowing
and general economic uncertainty on the value of their assets and their future
investment strategies.
The rise globally of risk-free rates has had a consequential impact upon
property yields, causing a general outward movement. However, this cannot be
applied uniformly across all assets and investors must assess the intrinsic
value of each property. There remains considerable demand for best-in-class
buildings which are designed to satisfy modern occupiers' needs, are well
located and are let to a strong mix of tenants. This bifurcation has been
demonstrated within the investment market with transactions for best-in-class
buildings, such as Kaleidoscope, EC1, showing price resilience.
While we believe pricing for these best-in-class assets will move in a narrow
range, at the other end of the spectrum poor quality second-hand space is
experiencing a significant repricing as landlords take into account the
significant capital expenditure required to ensure buildings are attractive to
the discerning tenant. With only circa 20% of the Central London office stock
currently achieving the EPC A or B ratings necessary to comply with the
proposed regulations for office occupation from 2030, there is a significant
amount of capital expenditure required, as well as skill to be deployed, to
ensure that this extensive portion of the market does not become obsolete.
There remains a substantial and deep pool of capital seeking to invest into
the Central London commercial office market due to its continuing reputation
as an innovative and resilient marketplace. In particular, there are
significant capital allocations by equity led investors, such as sovereign or
private capital, which will not be directly impacted by the current volatility
in the debt markets and which can be deployed promptly when opportunities are
identified. Furthermore, the continued relative weakness of the Pound has seen
overseas investors continue to remain interested, with 82% of all transactions
in Central London in Q3 being undertaken by foreign investors. As there
remains an inherent lack of best-in-class investment properties there will
likely be a depth of demand which should ensure pricing remains competitive
when these assets are traded, with yields somewhat decoupled from risk free
rate movements.
Supply Constraints
The volatility in the global financial markets and challenges in supply chains
are also adversely impacting new developments starting on site, with
construction cost inflation and increasing borrowing costs affecting the
viability of marginal schemes. In Deloitte's Summer 2022 Crane Survey, these
"new starts" fell by one third and more projects are anticipated to have been
postponed as the economic environment has worsened over the course of the
Autumn. Furthermore, of the planned London office completions in 2025 and 2026
reported by Savills, only 33% of these are currently under construction. This
is expected to result in a significant shortfall in new completions in the
medium-term and provide an advantage for those who proceed with schemes in
this period, such as ourselves at 100 New Bridge Street, EC4. This limited
development pipeline is feeding through to the leasing market where tenants
are having to make early commitments to the best space, with pre-letting
activity increasing.
The recent trends towards developments delivering the highest sustainability
credentials has continued, even in light of cost pressures, with 91% of all
new starts being on refurbishment projects, whilst new-build construction
starts are at their lowest levels since 2015.
Conclusion
There continue to be significant challenges facing the Central London office
market with rising borrowing costs, inflationary pressures and global supply
chain instability dampening economic growth and consequentially causing
pricing adjustments in the market. However, within this turbulence there is
clear evidence of an increasing bifurcation with best-in-class assets, those
that are well located, offering extensive amenity and which have been
sustainably developed, proving to be vastly more resilient in both
occupational and investor demand.
Our existing portfolio is well positioned to benefit from growing demand from
tenants and investors alike for the limited supply of best-in-class space. We
remain focused upon sourcing new opportunities which we expect to arise during
this period of dislocation. We continue to be discerning in our asset
selection but retain a strong belief that through deploying our extensive
experience and skill there is the potential to deliver a significant number of
highly sought after, best-in-class assets into a supply constrained market
place.
Helical's Property Portfolio - 30 September 2022
Property Overview
Helical's portfolio comprises income producing multi-let offices, office
refurbishments and developments and a mixed use commercial/residential scheme,
all located in Central London. Our strategy is to continue to increase our
Central London holdings, focusing on areas where we see strong tenant demand
and growth potential for our best-in-class office schemes.
The JJ Mack Building, 33 Charterhouse Street, EC1
The development of the 205,958 sq ft office building, in 50:50 joint venture
with AshbyCapital, reached practical completion in line with the original
programme on 30th September 2022. The JJ Mack Building, EC1, named after the
market trader who occupied the site in the 1940s, is one of London's smartest
and most sustainable new office buildings.
The building is situated in vibrant Farringdon, just 150m from the Elizabeth
Line, providing occupiers with unparalleled connectivity and cultural
offerings. The building has adopted market leading technologies and design and
operational practices to provide highly sustainable premises. This commitment
to sustainability has been recognised by a BREEAM 2018 New Construction
"Outstanding" rating at design stage which is currently being certified, an
EPC A rating and an anticipated NABERS 5 Star rating. It also provides a
technologically pioneering environment for occupiers, with smart building
systems and a fully integrated building management app for tenants.
Since the Period end, we have let two floors, comprising 37,880 sq ft of
offices, to Partners Group, a leading global private markets firm, with rent
at an 11.7% premium to 31 March 2022 ERVs.
100 New Bridge Street, EC4
We have submitted a planning application for the substantial refurbishment of
this 1990s building which, when approved, will enable the prominently located
building to be significantly enhanced to ensure it delivers a best-in-class
occupier experience. The major refurbishment will involve recladding the
facades and incorporating the latest technology into the building, as well as
providing high quality tenant amenities to create a new office building, which
will operate to the highest standards of sustainability. We have also proposed
to the City of London that we will undertake significant public realm
improvements around the site.
Work is anticipated to commence in late 2023 once existing tenants, Baker
McKenzie, vacate the building. The completed building should be available for
occupation in Spring 2025.
Kaleidoscope, EC1
Helical completed the sale of the single asset company which held the long
leasehold interest in Kaleidoscope, EC1 to Chinachem Group on 21 September
2022. The 88,581 sq ft office building, which was let in its entirety to
TikTok Information Technologies UK Limited on a 15 year lease term at an
annual rent of £7.6m was sold for a headline disposal price of £158.5m. The
sale reflected a premium to the 31 March 2022 book value and represented a
record capital value per square foot for the sub-market of £1,789 psf.
The Bower, EC1
The Bower, EC1 is a landmark estate comprising 312,573 sq ft of innovative,
high quality office space along with 21,059 sq ft of restaurant and retail
space. The estate is located adjacent to the Old Street roundabout where the
significant public realm works are due to complete shortly providing a better
experience for occupiers and a much improved access to Old Street Station.
The Warehouse and The Studio
The Warehouse comprises 122,858 sq ft of offices and The Studio 18,283 sq ft
of offices, both fully let, with 10,298 sq ft of retail space across the two
buildings.
The Tower
The Tower, also fully let, offers 171,432 sq ft of office space with a
contemporary façade and innovatively designed interconnecting floors, along
with 10,761 sq ft of retail space, across two units, let to food and beverage
occupiers Serata Hall and Wagamama.
We have let the 12th floor, previously occupied by Brilliant Basics, to Stenn
on a five year lease for a rent which is in line with the 31 March 2022 ERV.
Barts Square, EC1
Residential
At Barts Square, EC1, we exchanged contracts for the sale of the ground rent
investment asset for £3.7m (Helical share £1.8m) to the residents of Barts
Square prior to the Period end and have subsequently completed the sale.
We have also completed the sale of a further six apartments during the Period
and one further apartment sale has completed following the Period end. This
leaves eight apartments available in this 236 unit residential scheme, of
which two are reserved.
Retail
The retail space in Phase One is fully let to Stem + Glory and Halfcup. We
have let one unit in Phase Two to the award winning restaurateurs behind
London restaurants NEST and FENN who opened Restaurant St Barts in early
October. Since the Period end, one further unit has been let to LAP Bikes and
another is under offer which, if let, would leave just two remaining vacant
retail units.
55 Bartholomew
At 55 Bartholomew, EC1 we sold the comprehensively refurbished 10,976 sq ft
office building during the Period to a private European investor for £16.5m
(Helical share £8.25m). The sale price reflected a net initial yield of 4.5%
and represented a premium to book value, net of rental top ups.
The Loom, E1
At this 107,404 sq ft former Victorian wool warehouse, all units within the
building have now been refurbished and we have recently launched a marketing
campaign for the vacant units. We have completed a letting of 3,495 sq ft, and
have let a further unit of 3,504 sq ft since the Period end.
25 Charterhouse Square, EC1
25 Charterhouse Square, EC1 comprises 42,921 sq ft of offices adjacent to the
newly operational Farringdon East Elizabeth Line station and overlooking the
historic Charterhouse Square.
The newly refurbished ground floor unit has been let to natural stone
purveyors, SolidNature. The comprehensive refurbishment of the fourth floor
has been completed and the floor is now available to let.
The Power House, W4
The Power House is a listed building, providing 21,268 sq ft of office and
recording studio space on Chiswick High Road and is fully let on a long lease
to Metropolis Music Group. The significant capital works to improve the roof,
undertaken on behalf of the tenants, have now been successfully completed.
Trinity, Manchester
We simultaneously exchanged and completed contracts in May for the sale of
Trinity, to clients of Mayfair Capital, for £34.55m (£590 psf), reflecting a
net initial yield of 5.0%. The sale represented a premium to book value, net
of rental top ups. Helical acquired the property in May 2017 for £12.9m and
undertook a comprehensive remodelling and refurbishment to deliver 58,533 sq
ft of modern office space across ground and seven upper floors, which was 76%
let to eight occupiers upon disposal. Its sale concludes the disposal of
Helical's Manchester office portfolio.
Portfolio Analytics
See-through Total Portfolio by Fair Value
Investment % Development % Total
£m £m £m %
London Offices
- Completed properties 747.6 82.4 - 0.0 747.6 81.7
- Development pipeline 160.0 17.6 - 0.0 160.0 17.5
London Residential - 0.0 4.7 66.1 4.7 0.5
Total London Core 907.6 100.0 4.7 66.1 912.3 99.7
Other 0.1 0.0 2.4 33.9 2.5 0.3
Total Non-Core Portfolio 0.1 0.0 2.4 33.9 2.5 0.3
Total 907.7 100.0 7.1 100.0 914.8 100.0
See-through Land and Development Portfolio
Book value Fair value Surplus Fair value
£m £m £m %
London residential 4.7 4.7 0.0 66.1
Land and developments 2.1 2.4 0.3 33.9
Total 6.8 7.1 0.3 100.0
Capital Expenditure
We have a committed and planned development and refurbishment programme.
Property Capex Remaining New Total Completion
date
budget spend space completed
space
(Helical share) (Helical share) Pre-redeveloped space sq ft
sq ft
£m £m sq ft
Investment - committed
- The JJ Mack Building, EC1 66.0 3.7 - 205,958 205,958 30 September 2022
Investment - planned
- 100 New Bridge Street, EC4 118.1 115.4 167,026 24,346 191,372 Early 2025
Asset Management
Asset management is a critical component in driving Helical's performance.
Through having well considered business plans and maximising the combined
skills of our management team, we are able to create value in our assets.
Fair Passing % Contracted rent % ERV % ERV change
Investment portfolio value rent £m £m like-for-like
weighting £m %
%
London Offices
- Completed properties 82.4 27.1 79.0 29.8 80.5 43.1 72.2 1.9
- Development pipeline 17.6 7.2 21.0 7.2 19.4 16.5 27.6 11.2
Total London 100.0 34.3 100.0 37.0 99.9 59.6 99.8 4.3
Other 0.0 0.0 0.0 0.0 0.1 0.1 0.2 0.0
Total 100.0 34.3 100.0 37.0 100.0 59.7 100.0 4.3
See-through
total portfolio contracted rent
£m
Rent lost at break/expiry (1.1)
New lettings - London 1.2
Total increase in the Period from asset management activities 0.1
Contracted rent reduced from disposals of London Offices (8.1)
Contracted rent reduced from disposals of Manchester Offices (1.4)
Total contracted rental change from sales and purchases (9.5)
Net decrease in contracted rents in the Period (9.4)
Investment Portfolio
Valuation Movements
Valuation change Valuation change Investment portfolio Investment portfolio
inc sales and purchases excl sales and purchases weighting weighting
% % 30 September 2022 31 March 2022
% %
London Offices
- Completed properties (1.2) (2.2) 82.4 71.5
- Development pipeline (2.1) (2.1) 17.6 25.7
Total London (1.3) (2.2) 100.0 97.2
Manchester Offices
- Completed properties 4.9 - - 2.8
Total Manchester 4.9 - - 2.8
Total (1.1) (2.2) 100.0 100.0
Portfolio Yields
EPRA topped EPRA topped Reversionary Reversionary True equivalent yield True equivalent yield
up NIY up NIY yield yield 30 September 31 March
30 September 31 March 30 September 31 March 2022 2022
2022 2022 2022 2022 % %
% % % %
London Offices
- Completed properties 3.6 4.2 5.3 4.8 5.1 4.9
- Development pipeline 4.2 4.2 4.5 4.5 4.4 4.2
Total London 3.7 4.2 5.0 4.7 4.9 4.6
Manchester Offices
- Completed properties n/a 4.1 n/a 5.4 n/a 5.3
Total Manchester n/a 4.1 n/a 5.4 n/a 5.3
Total 3.7 4.2 5.0 4.7 4.9 4.6
See-through Capital Values, Vacancy Rates and Unexpired Lease Terms
Capital value Capital value Vacancy rate Vacancy rate WAULT WAULT
30 September 31 March 30 September 31 March 30 September 31 March
2022 2022 2022 2022 2022 2022
£ psf £ psf % % Years Years
London Offices
- Completed properties 1,246 1,289 23.7 6.9 5.4 6.3
- Development pipeline 958 1,086 2.6 0.0 1.2 1.7
Total London 1,192 1,213 19.2 5.4 4.6 5.6
Manchester Offices
- Completed properties n/a 530 n/a 23.9 n/a 6.1
Total Manchester n/a 530 n/a 23.9 n/a 6.1
Total 1,192 1,175 19.2 6.7 4.6 5.6
See-through Lease Expiries or Tenant Break Options
Half year to Year to Year to Year to Year to 2027
2023 2024 2025 2026 2027 onward
% of rent roll 1.9 34.0 9.9 1.4 10.4 42.4
Number of leases 9 27 11 4 10 31
Average rent per lease (£) 77,454 465,525 333,949 124,773 386,233 502,961
Top 15 Tenants
We have a strong rental income stream and a diverse tenant base. The top 15
tenants account for 80.9% of the total rent roll.
Tenant Tenant industry Contracted rent Rent roll
Rank £m %
1 Baker McKenzie Legal services 7.0 19.0
2 Farfetch Online retail 4.3 11.7
3 WeWork Flexible offices 4.0 10.8
4 Brilliant Basics Technology 2.4 6.4
5 VMware Technology 2.2 5.9
6 Anomaly Marketing 1.4 3.8
7 Viacom Media 1.2 3.2
8 Allegis Media 1.1 2.9
9 Dentsu Marketing 1.1 2.8
10 Stripe Financial services 1.0 2.6
11 Verkada Technology 1.0 2.6
12 Incubeta Marketing 0.9 2.5
13 Openpayd Financial services 0.9 2.4
14 Snowflake Technology 0.8 2.2
15 Stenn Financial services 0.8 2.1
Total 30.1 80.9
Letting Activity - New Leases Completed During the Period
Area Contracted rent Rent Increase above Average
sq ft (Helical's share) £ psf 31 March 2022 ERV lease term to expiry
£ (exc Plug and Play and managed lettings) Years
%
Investment Properties
London Offices
- The Tower, EC1 9,572 766,000 80.00 0.1 5.00
- The Loom, E1 3,495 210,000 60.00 9.2 5.00
- 25 Charterhouse Square, EC1 1,880 141,000 75.00 0.0 5.00
London Offices Total 14,947 1,117,000 74.69 1.7 5.00
London Retail
- Barts Square, EC1 4,695* 75,000 31.95 6.6 25.0
Total 19,642 1,192,000 64.48 2.2 6.3
* 100% (Helical's share: 2,347 sq ft).
Financial Review
IFRS Performance EPRA Performance
Profit after tax EPRA profit
£17.2m (2021: £22.2m)
£5.8m (2021: £1.1m)
Earnings per share (EPS) EPRA EPS
14.1p (2021: 18.2p)
4.8p (2021: 0.9p)
Diluted NAV per share EPRA NTA per share
558p (31 March 2022: 551p)
553p (31 March 2022: 572p)
Total Accounting Return Total Accounting Return on EPRA NTA
2.3% (2021: 3.9%) -2.5% (2021: 5.1%)
Overview
In a challenging economic environment with high inflation and rising interest
rates, the Group sold over £200m of properties above 31 March 2022 book
values, strengthening its balance sheet by reducing its loan to value to 26.4%
(31 March 2022: 36.4%) and increasing cash and undrawn bank facilities.
Net rental income increased by 29% compared to the corresponding period last
year, largely due to the acquisition of 100 New Bridge Street, EC4 in March,
and rent collection remained strong. Finance costs are protected to the expiry
of current loan facilities and this protection, through a combination of
interest rate swaps in the main Group and a fixed rate in joint ventures, has
given rise to a significant gain in the fair value of the Group's derivative
financial instruments.
The valuation of the Group's investment portfolio reflected a yield expansion
on the main portfolio, offset by valuation gains at the recently completed The
JJ Mack Building, EC1 which achieved practical completion in September.
Results for the Period
The IFRS profit after tax for the Period of £17.2m (2021: £22.2m) includes
revenue from rental income and development management fees of £23.5m, offset
by direct costs of £4.6m. The net loss on sale and revaluation of investment
properties of £30.4m was partially offset by profit from joint venture
activities of £15.1m, including a £15.3m gain on revaluation of investment
properties held in joint venture. A gain in the fair value of derivatives of
£26.6m (2021: £4.6m) was offset by administration expenses of £5.6m (2021:
£7.1m) and net finance costs of £7.3m (2021: £7.5m).
The Group holds a significant proportion of its property assets in joint
ventures. As the risk and rewards of ownership of these underlying properties
are the same as those it wholly owns, Helical supplements its IFRS disclosure
with a "see-through" analysis of alternative performance measures, which looks
through the structure to show the Group's share of the underlying business.
The see-through results for the Period to 30 September 2022 include net rental
income of £18.2m, a net loss on sale and revaluation of the investment
portfolio of £15.1m and development profits of £0.9m, leading to a Total
Property Return of £4.0m (2021: £44.9m). Total see-through administration
costs of £6.0m (2021: £7.4m), see-through net finance costs of £7.2m (2021:
£7.8m) and see-through gains from the mark-to-market valuation of derivative
financial instruments of £26.6m (2021: £4.6m) contributed to an IFRS pre-tax
profit of £17.2m (2021: £31.0m).
The interim dividend, payable on 13 January 2023, will be 3.05p per share
(2021: 2.90p), an increase of 5.2%.
The EPRA net tangible asset value per share decreased by 3.3% to 553p (31
March 2022: 572p).
The Group's real estate portfolio, including its share of assets held in joint
ventures, decreased to £914.8m (31 March 2022: £1,108.1m) primarily due to
the sales of Kaleidoscope, EC1, Trinity, Manchester and 55 Bartholomew, EC1,
residential apartment sales at Barts Square, EC1 and the net loss on sale and
revaluation of the investment portfolio of £15.1m, offset by capital
expenditure on the investment portfolio of £16.5m.
The sale of investment properties allowed the Group to repay debt during the
Period which resulted in a decrease in the Group's see-through loan to value
to 26.4% (31 March 2022: 36.4%). The Group's weighted average cost of debt at
30 September 2022 was 3.0% (31 March 2022: 3.2%) and the weighted average debt
maturity was 3.4 years (31 March 2022: 3.0 years).
At 30 September 2022, the Group had unutilised bank facilities of £234.2m (of
which £60m expires in December 2022) and cash of £58.9m on a see-through
basis. These are primarily available to fund future property acquisitions and
the completion of works at The JJ Mack Building, EC1.
Total Property Return
We calculate our Total Property Return to enable us to assess the aggregate of
income and capital profits made each year from our property activities. Our
business is primarily aimed at producing surpluses in the value of our assets
through asset management and development, with the income side of the business
seeking to cover our annual administration and finance costs.
Half year to Half year to Half year to
2022 2021 2020
£m £m £m
Total Property Return 4.0 44.9 6.9
See-through Total Accounting Return
Total Accounting Return is the growth in the net asset value of the Group plus
dividends paid in the Period, expressed as a percentage of the net asset value
at the beginning of the Period. The metric measures the growth in
Shareholders' Funds each Period and is expressed as an absolute measure.
Half year to Half year to Half year to
2022 2021 2020
% % %
Total Accounting Return on IFRS net assets 2.3 3.9 (2.0)
Total Accounting Return on EPRA net tangible assets is the growth in the EPRA
net tangible asset value of the Group plus dividends paid in the Period,
expressed as a percentage of the EPRA net tangible asset value at the
beginning of the Period.
Half year to Half year to Half year to
2022 2021 2020
% % %
Total Accounting Return on EPRA net tangible assets (2.5) 5.1 (2.5)
Earnings Per Share
The IFRS earnings per share is based on the after tax earnings attributable to
ordinary Shareholders divided by the weighted average number of shares in
issue during the Period and it reduced to 14.1p for the half year to 30
September 2022 (2021: 18.2p).
On an EPRA basis, the earnings per share is 4.8p compared to 0.9p in 2021,
reflecting an increase in the Group's share of net rental income to £18.2m
(2021: £14.1m) plus development profits of £0.9m (2021: £1.0m), but
excluding losses on sale and revaluation of investment properties of £15.1m
(2021: gains of £29.8m).
Net Asset Value
IFRS diluted net asset value per share increased by 1.3% to 558p per share (31
March 2022: 551p) and is a measure of Shareholders' Funds divided by the
number of shares in issue at the Period end, adjusted to allow for the effect
of all dilutive share awards. This movement arose principally from a total
comprehensive income (retained profits) of £17.2m (2021: £22.2m), less
£10.1m of dividends (2021: £9.0m). EPRA net tangible asset value per share
decreased by 3.3% to 553p per share (31 March 2022: 572p).
EPRA net disposal value per share increased by 1.5% to 559p per share (31
March 2022: 551p).
Income Statement
Rental Income and Property Overheads
Gross rental income for the Group in respect of wholly owned properties
increased to £19.2m (2021: £15.7m), with gross rents in joint ventures
increasing to £0.3m (2021: £0.1m). Property overheads in respect of wholly
owned assets and in respect of those assets in joint ventures decreased to
£1.3m (2021: £1.8m). Overall, see-through net rents increased by 29% to
£18.2m (2021: £14.1m).
Included within gross rental income is £2.5m (30 September 2021: £3.1m, 31
March 2022: £5.8m) of accrued income for rent free periods.
The table below demonstrates the movement of the see-through accrued income
balance for rent free periods granted and the respective rental income
adjustment over the period to 31 March 2026, based on the tenant leases as at
30 September 2022. The actual adjustment will vary depending on lease events
such as new lettings and early terminations and future acquisitions or
disposals.
Accrued Adjustment to rental income
income £000
£000
6 months to 31 March 2023 13,958 (991)
Year to 31 March 2024 11,518 (2,439)
Year to 31 March 2025 9,311 (2,207)
Year to 31 March 2026 7,223 (2,089)
Rent Collection
March 2022 - September 2022
quarters
%
Rent collected to date 97.7
Rent under discussion 1.4
Rent concessions 0.9
At 21 November 2022, the Group had collected 97.7% of all rent contracted and
payable for the March, June and September 2022 quarters.
Development Profits
In the Period, from our role as development manager at The JJ Mack Building,
EC1, we recognised £0.7m of fee income. Additional fees of £0.1m were
recognised for carrying out accounting and corporate services at Barts Square,
EC1 and The JJ Mack Building, EC1. Further development income on closing out
legacy projects of £0.2m, offset by other costs of £0.3m, contributed to a
net development profit in the Group of £0.7m (2021: £1.0m).
Share of Results of Joint Ventures
The revaluation of our investment properties held in joint ventures generated
a surplus of £15.3m (2021: £10.0m). A profit of £0.2m (2021: loss of
£0.1m) was recognised in respect of apartment sales at our Barts Square, EC1
residential development.
Finance, administration and other sundry costs totalling £0.3m (2021: £0.5m)
were incurred and after a tax charge of £0.1m (2021: £3.2m), there was a net
profit from our joint ventures of £15.1m (2021: £6.2m).
Loss on Sale and Revaluation of Investment Properties
The loss on valuation, partially offset by the gain on sales, of our
investment portfolio on a see-through basis resulted in an overall loss on
sale and revaluation, including in joint ventures, of £15.1m (2021: gain of
£29.8m).
Administrative Expenses
Administration costs in the Group, before performance related awards,
increased from £4.7m to £5.3m.
Performance related share awards and bonus payments, before National Insurance
costs, reduced to £0.2m (2021: £1.9m). Of this amount, £0.1m (2021:
£1.1m), being the charge for share awards under the Performance Share Plan,
is expensed through the Income Statement but added back to Shareholders' Funds
through the Statement of Changes in Equity.
2022 2021
£000
£000
Administrative expenses (excluding performance related awards) 5,323 4,712
Performance related awards 220 1,905
NIC 41 525
Group 5,584 7,142
In joint ventures 452 230
Total 6,036 7,372
Finance Costs and Derivative Financial Instruments
Total finance costs after cancellation of loans, including in joint ventures,
reduced to £7.3m (2021: £7.8m).
2022 2021
£000
£000
Interest payable on secured bank loans - subsidiaries 5,214 5,212
- joint ventures 1,619 1,080
Amortisation of refinancing costs - subsidiaries 658 519
Sundry interest and bank charges - subsidiaries 1,525 1,085
- joint ventures 101 107
Interest capitalised - joint ventures (1,815) (919)
Total before cancellation of loans 7,302 7,084
Cancellation of loans - subsidiaries 5 719
Total 7,307 7,803
The significant movement upwards in medium and long-term interest rate
projections during the Period contributed to a gain of £26.6m (2021: £4.6m)
on the mark-to-market valuation of the derivative financial instruments.
Taxation
The Group elected to become a REIT, effective from 1 April 2022, and is now
exempt from UK corporation tax on the profit of its property activities that
fall within the REIT regime. Helical will continue to pay corporation tax on
its profits that are not within this regime.
As a consequence, the tax charge for the Period was £nil (2021: £8.8m).
Dividends
The Board has declared an interim dividend for the Period of 3.05p (2021:
2.90p), an increase of 5.2%. None of this dividend is to be paid as a PID.
Balance Sheet
Shareholders' Funds
Shareholders' Funds at 31 March 2022 were £687.0m. The Group's results for
the Period added £17.2m (2021: £22.2m), net of tax, representing the total
comprehensive income for the Period. Movements in reserves arising from the
Group's share schemes decreased funds by £1.4m. The Company paid dividends to
Shareholders during the Period of £10.1m. The net increase in Shareholders'
Funds from Group activities during the Period was £5.7m to £692.7m.
Investment Portfolio
Wholly In joint venture See-through Head leases capitalised Lease incentives Book
owned £000 £000 £000 £000 value
£000
£000
Valuation at 31 March 2022 961,500 135,820 1,097,320 6,524 (25,002) 1,078,842
Capital expenditure - wholly owned 4,427 - 4,427 (7) - 4,420
- joint ventures - 12,067 12,067 (15) - 12,052
Letting costs amortised - wholly owned (135) - (135) - - (135)
Disposals - wholly owned (178,736) - (178,736) - 9,166 (169,570)
- joint ventures - (7,999) (7,999) - 98 (7,901)
Revaluation (deficit)/surplus - wholly owned (35,806) - (35,806) - 812 (34,994)
- joint ventures - 15,418 15,418 - (79) 15,339
Economic interest adjustment - joint ventures - 1,179 1,179 - (14) 1,165
Valuation at 30 September 2022 751,250 156,485 907,735 6,502 (15,019) 899,218
The Group expended £16.5m on capital works across the investment portfolio,
at The JJ Mack Building, EC1 (£11.9m), 100 New Bridge Street, EC4 (£3.5m),
The Bower, EC1 (£0.2m), The Loom, E1 (£0.5m), 25 Charterhouse Square, EC1
(£0.1m), Barts Square, EC1 (£0.2m) and Trinity, Manchester (£0.1m).
Revaluation losses resulted in a £20.4m decrease in the see-through fair
value of the portfolio, before lease incentives, to £907.7m (31 March 2022:
£1,097.3m). The accounting for head leases and lease incentives resulted in a
book value of the see-through investment portfolio of £899.2m (31 March 2022:
£1,078.8m).
Debt and Financial Risk
In total, the see-through outstanding debt at 30 September 2022 of £305.7m
(31 March 2022: £440.9m) had a weighted average interest cost of 3.0% (31
March 2022: 3.2%) and a weighted average debt maturity of 3.4 years (31 March
2022: 3.0 years).
Debt Profile at 30 September 2022 - Including Commitment Fees but Excluding
the Amortisation of Arrangement Fees
Total Total Available Weighted average interest rate Average maturity of borrowings
facility utilised facility % Years
£000s £000s £000s
£400m Revolving Credit Facility 400,000 250,000 150,000 2.7 3.8
£60m Revolving Credit Facility 60,000 - 60,000 - -
Total wholly owned 460,000 250,000 210,000 2.7 3.8
In joint ventures 69,900 55,705 14,195 4.2 1.8
Total secured debt 529,900 305,705 224,195 3.0 3.4
Working capital 10,000 - 10,000 - -
Total unsecured debt 10,000 - 10,000 - -
Total debt 539,900 305,705 234,195 3.0 3.4
Secured Debt
The Group arranges its secured investment and development facilities to suit
its business needs as follows:
- £400m Revolving Credit Facility
The Group has a £400m Revolving Credit Facility in which all of its wholly
owned investment assets are secured. The value of the Group's properties
secured in this facility at 30 September 2022 was £736m (31 March 2022:
£870m) with a corresponding loan to value of 34.0% (31 March 2022: 46.0%).
The average maturity of the facility at 30 September 2022 was 3.8 years (31
March 2022: 3.1 years).
- £60m Revolving Credit Facility
The Group has a £60m Revolving Credit Facility to provide short-term
liquidity to acquire new property opportunities. The maturity of this undrawn
facility was 0.2 years.
- Joint Venture Facilities
The Group has a number of investment and development properties in joint
venture with third parties and includes our share, in proportion to our
economic interest, of the debt associated with each asset. The average
maturity of the Group's share of bank facilities in joint ventures at 30
September 2022 was 1.8 years (31 March 2022: 2.3 years) with a weighted
average interest rate of 4.2% (31 March 2022: 5.6%). The average interest
rate will fall as The JJ Mack Building, EC1 development facility is drawn down
and would be 4.00% on a fully utilised basis, reducing to 2.25% once the
building is let.
Unsecured Debt
The Group's unsecured debt is £nil (31 March 2022: £nil).
Cash and Cash Flow
At 30 September 2022, the Group had £293.1m (31 March 2022: £132.3m) of cash
and agreed, undrawn, committed bank facilities (of which £60m expires in
December 2022) including its share in joint ventures.
Net Borrowings and Gearing
Total gross borrowings of the Group, including in joint ventures, have
decreased from £440.9m to £305.7m during the Period to 30 September 2022.
After deducting cash balances of £58.9m (31 March 2022: £33.3m) and
unamortised refinancing costs of £5.0m (31 March 2022: £4.7m), net
borrowings decreased from £402.9m to £241.8m. The see-through net gearing of
the Group, including in joint ventures, decreased from 58.6% to 34.9%.
30 September 31 March
2022 2022
See-through gross borrowings £305.7m £440.9m
See-through cash balances £58.9m £33.3m
Unamortised refinancing costs £5.0m £4.7m
See-through net borrowings £241.8m £402.9m
Shareholders' funds £692.7m £687.0m
See-through gearing - IFRS net asset value 34.9% 58.6%
Hedging
At 30 September 2022, the Group had £250.0m (31 March 2022: £300.0m) of
borrowings protected by interest rate swaps, with an average effective
interest rate of 2.2% (31 March 2022: 2.8%) and average maturity of 2.8 years
(31 March 2022: 3.3 years). The Group had £nil floating rate debt (31 March
2022: £100.0m) with an effective rate of nil (31 March 2022: 3.5%). In
addition, the Group had £105m of interest rate caps at an average rate of
1.75% (31 March 2022: £145m at 1.75%) and with an average maturity of 0.8
years. In our joint ventures, the Group's share of fixed rate debt was £55.7m
(31 March 2022: £40.9m) at 0.5% plus margin with an effective rate at 30
September 2022 of 4.2% and no floating rate debt (31 March 2022: none).
30 September Effective interest rate 31 March Effective interest rate
2022 % 2022 %
£m £m
Fixed rate debt
- Secured borrowings 250.0 2.2(1) 300.0 2.8
Total 250.0 2.2 300.0 2.8
Floating rate debt
- Secured borrowings - - 100.0 3.5(2)
Total - 2.7 400.0 3.0
In joint ventures
- Fixed rate 55.7 4.2(3) 40.9 5.6(3)
Total borrowings 305.7 3.0 440.9 3.2
1. The impact of interest rate hedging above the level of outstanding
borrowings was to reduce the effective interest rate to 2.2%. Following a
restructure of the hedging post Period end, to ensure all current borrowings
were protected against interest rate rises to the end of the Group's bank
facilities, the effective interest rate increased to 2.8%.
2. This includes commitment fees on undrawn facilities. Excluding these
would reduce the effective rate to 2.7%.
3. This includes commitment fees on undrawn facilities. Excluding these
would reduce the effective rate to 4.00% (31 March 2022: 4.95%).
Tim Murphy
Chief Financial Officer
22 November 2022
Unaudited Consolidated Income Statement
For the Half Year to 30 September 2022
Notes Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Revenue 3 23,461 25,099 51,146
Cost of sales 3 (4,623) (10,041) (14,228)
Net property income 4 18,838 15,058 36,918
Share of results of joint ventures 12 15,101 6,244 20,708
Gross profit before net (loss)/gain on sale and revaluation of Investment 33,939 21,302 57,626
properties
Gain/(loss) on sale of Investment properties 5 4,606 (88) (45)
Revaluation (loss)/gain on Investment properties 11 (34,994) 19,906 33,311
Gross profit 3,551 41,120 90,892
Administrative expenses 6 (5,584) (7,142) (16,768)
Operating (loss)/gain (2,033) 33,978 74,124
Finance costs 7 (7,402) (7,535) (19,234)
Finance income 96 2 6
Change in fair value of derivative financial instruments 20 26,564 4,552 17,996
Profit before tax 17,225 30,997 72,892
Tax on profit on ordinary activities 8 - (8,809) 16,002
Profit for the period 17,225 22,188 88,894
Earnings per share 10
Basic 14.1p 18.2p 72.8p
Diluted 14.0p 18.0p 71.4p
Unaudited Consolidated Statement of Comprehensive Income
For the Half Year to 30 September 2022
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Profit for the period 17,225 22,188 88,894
Total comprehensive income for the period 17,225 22,188 88,894
Unaudited Consolidated Balance Sheet
At 30 September 2022
Notes At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Non-current assets
Investment properties 11 738,518 761,268 938,797
Owner occupied property, plant and equipment 4,358 5,003 4,631
Investment in joint ventures 12 105,895 82,845 100,604
Other investments 13 306 354 306
Derivative financial instruments 20 36,758 1,492 11,104
885,835 850,962 1,055,442
Current assets
Land and developments 14 2,089 66 2,089
Corporation tax receivable - - 338
Trade and other receivables 15 36,551 38,581 48,453
Cash and cash equivalents 16 54,378 134,751 28,807
93,018 173,398 79,687
Total assets 978,853 1,024,360 1,135,129
Current liabilities
Trade and other payables 17 (33,225) (30,572) (43,986)
Lease liability 18 (670) (646) (658)
Corporation tax payable (230) (563) -
(34,125) (31,781) (44,644)
Non-current liabilities
Borrowings 19 (246,100) (336,825) (396,633)
Derivative financial instruments 20 - (4,382) (538)
Lease liability 18 (5,933) (6,604) (6,271)
Deferred tax liability 8 - (22,184) -
(252,033) (369,995) (403,442)
Total liabilities (286,158) (401,776) (448,086)
Net assets 692,695 622,584 687,043
Equity
Called-up share capital 21 1,233 1,489 1,223
Share premium account 116,619 112,600 112,654
Revaluation reserve 109,276 184,222 197,627
Capital redemption reserve 7,743 7,478 7,743
Own shares held (1,535) - -
Other reserves 291 291 291
Retained earnings 459,068 316,504 367,505
Total equity 692,695 622,584 687,043
Unaudited Consolidated Cash Flow Statement
For the Half Year to 30 September 2022
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Cash flows from operating activities
Profit before tax 17,225 30,997 72,892
Adjustment for:
Depreciation 382 386 766
Revaluation deficit/(surplus) on Investment properties 34,994 (19,906) (33,311)
Letting cost amortisation 135 109 226
(Gain)/loss on sale of Investment properties (4,606) 88 45
Profit on sale of plant and equipment - (11) (11)
Net financing costs 7,306 7,533 19,228
Change in value of derivative financial instruments (26,564) (4,552) (17,996)
Share based payment charge 54 1,063 3,843
Share of results of joint ventures (15,101) (6,244) (20,708)
Cash inflows from operations before changes in working capital 13,825 9,463 24,974
Change in trade and other receivables (504) 1,752 (7,926)
Change in land, developments and trading properties - 382 (1,641)
Change in trade and other payables (11,385) (7,891) 5,941
Cash inflows generated from operations 1,936 3,706 21,348
Finance costs (6,952) (6,813) (18,335)
Finance income 96 2 6
Tax received 568 12 13
(6,288) (6,799) (18,316)
Net cash (used by)/generated from operating activities (4,352) (3,093) 3,032
Cash flows from investing activities
Additions to Investment property (4,420) (9,815) (174,057)
Purchase of other investments - (354) (306)
Net proceeds/(costs) from sale of Investment property 186,583 (88) (45)
Return on investments/(investments) in joint ventures and subsidiaries 3,323 - (3,323)
Dividends from joint ventures 6,488 3,352 3,381
Sale of plant and equipment - 43 44
Purchase of leasehold improvements, plant and equipment (108) (59) (68)
Net cash generated from/(used by) investing activities 191,866 (6,921) (174,374)
Cash flows from financing activities
Borrowings drawn down - 50,000 190,000
Borrowings repaid (150,000) (50,400) (131,150)
Finance lease repayments (326) (311) (631)
Shares issued 10 11 10
Purchase of own shares (1,535) - -
Sale of own shares - 52 54
Equity dividends paid (10,092) (9,035) (12,582)
Net cash (used by)/generated from financing activities (161,943) (9,683) 45,701
Net increase/(decrease) in cash and cash equivalents 25,571 (19,697) (125,641)
Cash and cash equivalents at start of period 28,807 154,448 154,448
Cash and cash equivalents at end of period 54,378 134,751 28,807
Unaudited Consolidated Statement of Changes in Equity
At 30 September 2022
Share Share Revaluation Capital Other Retained earnings Total
capital premium reserve redemption Own shares held £000 reserves £000 £000
£000 £000 £000 reserve £000
£000
At 31 March 2021 1,478 107,990 164,316 7,478 - 291 326,608 608,161
Total comprehensive income - - - - - - 88,894 88,894
Revaluation surplus - - 33,311 - - - (33,311) -
Issued share capital 10 4,610 - - - - - 4,620
Performance Share Plan - - - - - - 3.223 3,223
Performance Share Plan - deferred tax - - - - - - (1,325) (1,325)
Share settled Performance Share Plan - - - - - - (3,591) (3,591)
Deferred bonus shares - - - - - - 620 620
Share settled bonus - - - - - - (1,031) (1,031)
Profit on sales of shares - 54 - - - - - 54
Cancelled deferred shares (265) - - 265 - - - -
Dividends paid - - - - - - (12,582) (12,582)
At 31 March 2022 1,223 112,654 197,627 7,743 - 291 367,505 687,043
Total comprehensive income - - - - - - 17,225 17,225
Revaluation deficit - - (34,994) - - - 34,994 -
Realised on disposals - - (53,357) - - - 53,357 -
Issued share capital 10 3,965 - - - - - 3,975
Performance Share Plan - - - - - - 54 54
Purchase of own shares - - - - (1,535) - - (1,535)
Share settled Performance Share Plan - - - - - - (3,536) (3,536)
Share settled bonus - - - - - - (439) (439)
Dividends paid - - - - - - (10,092) (10,092)
At 30 September 2022 1,233 116,619 109,276 7,743 (1,535) 291 459,068 692,695
For a breakdown of Total comprehensive income see the Unaudited Consolidated
Statement of Comprehensive Income.
The adjustment to retained earnings of £54,000 (31 March 2022: £3,223,000)
adds back the share based payments charge recognised in the Unaudited
Consolidated Income Statement, in accordance with IFRS 2 Share Based Payments.
There were net transactions with owners of £11,573,000 (31 March 2022:
£10,012,000) made up of the Performance Share Plan credit of £54,000 (31
March 2022: £3,223,000) and related deferred tax charge of £nil (31 March
2022: £1,325,000), dividends paid of £10,092,000 (31 March 2022:
£12,582,000), the issued share capital of £10,000 (31 March 2022: £10,000)
and corresponding share premium of £3,965,000 (31 March 2022: £4,610,000),
purchase of own shares charge of £1,535,000 (31 March 2022: £nil), share
settled Performance Share Plan awards charge of £3,536,000 (31 March 2022:
£3,591,000), the share settled bonus awards charge of £439,000 (31 March
2022: £1,031,000), deferred bonus shares of £nil (31 March 2022: £620,000)
and the profit on the sale of shares of £nil (31 March 2022: £54,000).
Share Share Revaluation Capital Other Retained earnings Total
capital premium reserve redemption reserves £000 £000
£000 £000 £000 reserve £000
£000
At 31 March 2021 1,478 107,990 164,316 7,478 291 326,608 608,161
Total comprehensive income - - - - - 22,188 22,188
Revaluation surplus - - 19,906 - - (19,906) -
Issued share capital 11 4,610 - - - - 4,621
Performance Share Plan - - - - - 1,063 1,063
Performance Share Plan - deferred tax - - - - - 155 155
Share settled Performance Share Plan - - - - - (3,591) (3,591)
Share settled bonus - - - - - (1,030) (1,030)
Profit on sales of shares - - - - - 52 52
Dividends paid - - - - - (9,035) (9,035)
At 30 September 2021 1,489 112,600 184,222 7,478 291 316,504 622,584
The adjustment to retained earnings of £1,063,000 adds back the share based
payments charge recognised in the Unaudited Consolidated Income Statement, in
accordance with IFRS 2 Share Based Payments.
There were net transactions with owners of £7,765,000 made up of the
Performance Share Plan credit of £1,063,000 and related deferred tax credit
of £155,000, dividends paid of £9,035,000, the issued share capital of
£11,000 and corresponding share premium of £4,610,000, share settled
Performance Share Plan awards charge of £3,591,000, the share settled bonus
awards charge of £1,030,000 and the profit on the sale of shares of £52,000.
Unaudited Notes to the Half Year Results
1. Financial Information
The financial information contained in this statement does not constitute
statutory accounts within the meaning of section 434 of the Companies Act
2006. The full accounts for the year ended 31 March 2022, which were prepared
under International Financial Reporting Standards as adopted by the United
Kingdom and which received an unqualified report from the Auditors, and did
not contain a statement under Section 498(2) or Section 498(3) of the
Companies Act 2006, have been filed with the Registrar of Companies.
These interim condensed unaudited consolidated financial statements do not
include all of the information required for full annual financial statements
and should be read in conjunction with the consolidated financial statements
of the Group for the year ended 31 March 2022.
These interim condensed unaudited consolidated financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting as adopted by
the United Kingdom. The same accounting policies and methods of computation
are followed in the 30 September 2022 interim condensed unaudited consolidated
financial statements as in the most recent annual financial statements.
Going Concern
The Directors have considered the appropriateness of adopting a going concern
basis in preparing the financial statements. Their assessment is based on
forecasts for the next 12 month period, with sensitivity testing undertaken to
replicate severe but plausible downside scenarios related to the principal
risks and uncertainties associated with the business.
The key assumptions used in the review are summarised below:
· The Group's rental income receipts were modelled for each
tenant on an individual basis;
· Existing loan facilities remain available;
· Certain property additions/disposals are assumed in line with
the individual asset business plans; and
· Free cash is utilised where necessary to repay debt/cure bank
facility covenants.
Compliance with the financial covenants of the Group's main debt facility, its
£400m Revolving Credit Facility, was the Directors' key area of review, with
particular focus on the following three covenants:
· Loan to Value ("LTV") - the ratio of the drawn loan amount to
the value of the secured property as a percentage;
· Loan to Rent Value ("LRV") - the ratio of the loan to the
projected contractual net rental income for the next 12 months; and
· Projected Net Rental Interest Cover Ratio ("ICR") - the ratio
of projected net rental income to projected finance costs.
The October 2022 compliance position for these covenants is summarised below:
Covenant Requirement Actual
LTV <65% 34%
LRV <12.0x 7.6x
ICR >150% 499%
The results of this review demonstrated the following:
· The forecasts show that all bank facility financial covenants will
be met throughout the review period, with headroom to withstand a 29% fall in
contracted rental income;
· The Group could withstand receiving nil rental income during
the going concern period (excluding the impact on income covenants);
· Property values could fall by 53% before loan to value
covenants come under pressure;
· Whilst the Group has a WAULT of 4.6 years, in a downside scenario
whereby all tenants with lease expiries or break options in the going concern
period exercise their breaks or do not renew at the end of their lease, and
with no vacant space let or re-let, the rental income covenants would be met
throughout the review period; and
· Additional asset sales could be utilised to generate cash to
repay debt, materially increasing covenant headroom.
Based on this analysis, the Directors have adopted a going concern basis in
preparing the accounts for the Period ended 30 September 2022.
Principal Risks and Uncertainties
The responsibility for the governance of the Group's risk profile lies with
the Board of Directors of Helical. The Board is responsible for setting the
Group's risk strategy by assessing risks, determining its willingness to
accept those risks and ensuring that the risks are monitored and that the
Group is aware of and, if appropriate, reacts to changes in those risks. The
Board is also responsible for allocating responsibility for risk within the
Group's management structure.
The Group considers its principal risks to be:
Strategic Risks - external risks that could prevent the Group delivering its
strategy. These risks principally impact our decision to purchase or exit from
a property asset.
Financial Risks - risks that could prevent the Group from funding its chosen
strategy, both in the long and short-term.
Operational Risks - internal risks that could prevent the Group from
delivering its strategy.
Reputational Risks - risks that could affect the Group in all aspects of its
strategy.
There have been no significant changes to these risks in the Period and
further analysis is included within the Group's Annual Report and Accounts
2022.
2. Revenue from Contracts with Customers
Half Year to Half Year to Year to
30 September 2022 30 September 31 March
£000 2021 2022
£000 £000
Development property income 934 4,951 7,490
Service charge income 3,282 4,423 8,304
Other revenue - - 28
Total revenue from contracts with customers 4,216 9,374 15,822
The total revenue from contracts with customers is the revenue recognised in
accordance with IFRS 15 Revenue from Contracts with Customers.
No impairment of contract assets was recognised in the Period to 30 September
2022 (half year to 30 September 2021: £nil, year to 31 March 2022: £5,000).
3. Segmental Information
The Group identifies two discrete operating segments whose results are
regularly reviewed by the Chief Operating Decision Maker (the Chief Executive)
to allocate resources to these segments and to assess their performance. The
segments are:
· Investment properties, which are owned or leased by the Group
for long-term income and for capital appreciation; and
· Development properties, which include sites, developments in the
course of construction, completed developments available for sale, and
pre-sold developments.
Revenue Investments Developments Total Investments Developments Total
Half Year to Half Year to Half Year to Half Year to 30.09.21 Half Year to Half Year to
30.09.22 30.09.22 30.09.22 £000 30.09.21 30.09.21
£000 £000 £000 £000 £000
Gross rental income 19,245 - 19,245 15,725 - 15,725
Development property income - 934 934 - 4,951 4,951
Service charge income 3,282 - 3,282 4,423 - 4,423
Revenue 22,527 934 23,461 20,148 4,951 25,099
Revenue Investments Developments Total
Year to Year to Year to
31.03.22 31.03.22 31.03.22
£000 £000 £000
Gross rental income 35,324 - 35,324
Development property income - 7,490 7,490
Service charge income 8,304 - 8,304
Other revenue 28 - 28
Revenue 43,656 7,490 51,146
Cost of sales Investments Developments Total Investments Developments Total
Half Year to Half Year to Half Year to Half Year to 30.09.21 Half Year to Half Year to
30.09.22 30.09.22 30.09.22 £000 30.09.21 30.09.21
£000 £000 £000 £000 £000
Rents payable (69) - (69) (76) - (76)
Property overheads (1,121) - (1,121) (1,636) - (1,636)
Service charge expense (3,282) - (3,282) (4,423) - (4,423)
Development cost of sales - (150) (150) - (3,651) (3,651)
Development sales expenses - (1) (1) - (90) (90)
Provisions - - - - (165) (165)
Cost of sales (4,472) (151) (4,623) (6,135) (3,906) (10,041)
Cost of sales Investments Developments Total
Year to Year to Year to
31.03.22 31.03.22 31.03.22
£000 £000 £000
Rents payable (169) - (169)
Property overheads (4,069) - (4,069)
Service charge expense (8,304) - (8,304)
Development cost of sales - (3,864) (3,864)
Development sales expenses - (107) (107)
Reversal of provision - 2,285 2,285
Cost of sales (12,542) (1,686) (14,228)
Profit before tax Investments Developments Total Investments Developments Total
Half Year to 30.09.22 Half Year to Half Year to Half Year to 30.09.21 Half Year to Half Year to
£000 30.09.22 30.09.22 £000 30.09.21 30.09.21
£000 £000 £000 £000
Net property income 18,055 783 18,838 14,013 1,045 15,058
Share of results of joint ventures 14,750 351 15,101 6,863 (619) 6,244
(Loss)/gain on sale and revaluation of Investment properties (30,388) - (30,388) 19,818 - 19,818
Segmental profit 2,417 1,134 3,551 40,694 426 41,120
Gross profit 3,551 41,120
Administrative expenses (5,584) (7,142)
Finance costs (7,402) (7,535)
Finance income 96 2
Change in fair value of derivative financial instruments 26,564 4,552
Profit before tax 17,225 30,997
Profit before tax Investments Developments Total
Year to Year to Year to
31.03.22 31.03.22 31.03.22
£000 £000 £000
Net property income 31,114 5,804 36,918
Share of results of joint ventures 20,603 105 20,708
Gain on sale and revaluation of Investment properties 33,266 - 33,266
Segmental profit 84,983 5,909 90,892
Administrative expenses (16,768)
Finance costs (19,234)
Finance income 6
Change in fair value of derivative financial instruments 17,996
Profit before tax 72,892
Net assets Investments Developments Total Investments Developments at 30.09.21 Total
at 30.09.22 at 30.09.22 at 30.09.22 at 30.09.21 £000 at 30.09.21
£000 £000 £000 £000 £000
Investment properties 738,518 - 738,518 761,268 - 761,268
Land and developments - 2,089 2,089 - 66 66
Investment in joint ventures 101,097 4,798 105,895 79,094 3,751 82,845
839,615 6,887 846,502 840,362 3,817 844,179
Other assets 132,351 180,181
Total assets 978,853 1,024,360
Liabilities (286,158) (401,776)
Net assets 692,695 622,584
Net assets Investments Developments Total
Year to Year to Year to
31.03.22 31.03.22 31.03.22
£000 £000 £000
Investment properties 938,797 - 938,797
Land and developments - 2,089 2,089
Investment in joint ventures 96,157 4,447 100,604
1,034,954 6,536 1,041,490
Other assets 93,639
Total assets 1,135,129
Liabilities (448,086)
Net assets 687,043
4. Net Property Income
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Gross rental income 19,245 15,725 35,324
Head rents payable (69) (76) (169)
Property overheads (1,121) (1,636) (4,069)
Net rental income 18,055 14,013 31,086
Development property income 934 4,951 7,490
Development cost of sales (150) (3,651) (3,864)
Sales expenses (1) (90) (107)
Provision - (165) 2,285
Development property profit 783 1,045 5,804
Other revenue - - 28
Net property income 18,838 15,058 36,918
Included within Gross rental income above is £2,464,000 (September 2021:
£3,077,000, March 2022: £5,782,000) of accrued income for rent free periods.
5. Gain/(Loss) on Sale of Investment Properties
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Net proceeds/(costs) from the sale of Investment properties 186,583 (88) (45)
Book value (Note 11) (169,570) - -
Tenants' incentives on sold Investment properties (12,407) - -
Gain/(loss) on sale of Investment properties 4,606 (88) (45)
6. Administrative Expenses
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Administration costs (5,323) (4,712) (9,598)
Performance related awards, including annual bonuses (220) (1,905) (6,019)
National Insurance on performance related awards (41) (525) (1,151)
Administrative expenses (5,584) (7,142) (16,768)
7. Finance Costs
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Interest payable on bank loans and overdrafts (5,214) (5,212) (10,169)
Other interest payable and similar charges (2,188) (2,323) (3,179)
Cancellation of loans - - (5,886)
Finance costs (7,402) (7,535) (19,234)
8. Tax on Profit on Ordinary Activities
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
The tax charge is based on the profit for the period and represents:
United Kingdom corporation tax at 19%
- Group corporation tax - - -
- Adjustment in respect of prior periods - - 1,146
- Payment for losses - (39) (38)
Current tax charge - (39) 1,108
Deferred tax
- Capital allowances - (2,246) 4,540
- Tax losses - 1,050 (1,024)
- Unrealised chargeable gains - (6,638) 13,512
- Other temporary differences - (936) (2,134)
Deferred tax (charge)/credit - (8,770) 14,894
Total tax (charge)/credit for period - (8,809) 16,002
Deferred tax At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Capital allowances - (6,786) -
Tax losses - 2,074 -
Unrealised chargeable gains - (20,150) -
Other temporary differences - 2,678 -
Deferred tax liability - (22,184) -
The Group became a UK REIT on 1 April 2022. As a REIT, the Group is not
subject to Corporation Tax on the profits of its property rental business and
chargeable gains arising on the disposal of investment assets used in the
property rental business, but remains subject to tax on profits and chargeable
gains arising from non REIT business activities.
On conversion to a REIT, the deferred tax assets and liabilities previously
recognised associated with the Group's property business were released. The
majority of the liability released related to unrealised revaluation gains on
the Group's investment properties. In addition, previously recognised deferred
tax assets were released on the basis that it is no longer probable that
sufficient taxable profits will be generated in the non property business in
the future against which these assets could be offset.
9. Dividends
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Attributable to equity share capital
Ordinary
- Interim paid 2.90p per share - - 3,547
- Prior period final paid 8.25p per share (2021: 7.40p) 10,092 9,035 9,035
10,092 9,035 12,582
The interim dividend of 3.05p per share (30 September 2021: 2.90p per share)
was approved by the Board on 17 November 2022 and will be paid on 13 January
2023 to Shareholders on the register on 2 December 2022. This interim
dividend, amounting to £3,762,000 has not been included as a liability as at
30 September 2022.
10. Earnings Per Share
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number
of shares in issue during the Period. This is a different basis to the net
asset per share calculations which are based on the number of shares at the
Period end.
The calculation of diluted earnings per share is based on the basic earnings
per share, adjusted to allow for the issue of shares and the post tax effect
of dividends on the assumed exercise of all dilutive share awards.
The earnings per share is calculated in accordance with IAS 33 Earnings per
Share and the best practice recommendations of the European Public Real Estate
Association ("EPRA").
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below:
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Ordinary shares in issue 123,355 122,325 122,325
Own shares held (398) - -
Weighting adjustment (658) (481) (241)
Weighted average ordinary shares in issue for calculation of basic and EPRA 122,299 121,844 122,084
earnings per share
Weighted average ordinary shares issued on share settled bonuses 561 513 662
Weighted average ordinary shares to be issued under Performance Share Plan 575 1,136 1,700
Weighted average ordinary shares in issue for calculation of diluted earnings 123,435 123,493 124,446
per share
£000 £000
£000
Earnings used for calculation of basic and diluted earnings per share 17,225 22,188 88,894
Basic earnings per share 14.1p 18.2p 72.8p
Diluted earnings per share 14.0p 18.0p 71.4p
£000 £000 £000
Earnings used for calculation of basic and diluted earnings per share 17,225 22,188 88,894
Net loss/(gain) on sale and revaluation of Investment properties
30,388 (19,818) (33,266)
- subsidiaries
(15,268) (9,962) (18,473)
- joint ventures
Tax on profit on disposal of Investment properties 228 - -
Loss/(gain) on movement in share of joint ventures 66 22 (820)
Fair value movement on derivative financial instruments (26,564) (4,552) (17,996)
Expense on cancellation of loans 132 719 5,886
Deferred tax on adjusting items (377) 12,519 (17,844)
Earnings used for calculations of EPRA earnings per share 5,830 1,116 6,381
EPRA earnings per share 4.8p 0.9p 5.2p
The earnings used for the calculation of EPRA earnings per share include net
rental income and development property profits but exclude investment and
trading property gains.
11. Investment Properties
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Book value at 1 April 938,797 740,207 740,207
Additions at cost 4,420 1,264 165,505
Disposals (169,570) - -
Letting cost amortisation (135) (109) (226)
Revaluation (deficit)/surplus (34,994) 19,906 33,311
As at period end 738,518 761,268 938,797
All properties are stated at market value and are valued by professionally
qualified external valuers (Cushman & Wakefield LLP) in accordance with
the Valuation - Professional Standards, published by the Royal Institution of
Chartered Surveyors. The fair value of the Investment properties are as
follows:
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Book value 738,518 761,268 938,797
Lease incentives and costs included in trade and other receivables 14,858 22,297 24,836
Head leases capitalised (2,126) (2,140) (2,133)
Fair value 751,250 781,425 961,500
Cumulative interest capitalised in respect of the refurbishment of Investment
properties at 30 September 2022 amounted to £9,620,000 (30 September 2021:
£13,102,000, 31 March 2022: £13,102,000). Interest capitalised during the
Period in respect of the refurbishment of Investment properties amounted to
£nil (30 September 2021: £nil, 31 March 2022: £nil).
The historical cost of Investment property is £627,437,000 (30 September
2021: £574,973,000, 31 March 2022: £739,231,000).
12. Joint Ventures
Share of results of joint ventures Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Revenue 4,873 4,497 9,495
Gross rental income 269 105 317
Property overheads (142) (42) (175)
Net rental income 127 63 142
Gain on revaluation of Investment properties 15,339 9,962 18,473
Loss on sale of Investment properties (71) - -
Development property profit/(loss) 186 (41) 764
Gross profit 15,581 9,984 19,379
Administrative expenses (452) (230) (295)
Operating profit 15,129 9,754 19,084
Interest payable on bank loans and overdrafts (1,619) (1,080) (2,407)
Other interest payable and similar charges (101) (107) (181)
Interest capitalised 1,815 919 2,142
Finance income 6 - -
Profit before tax 15,230 9,486 18,638
Tax (63) (3,220) 1,249
Profit after tax 15,167 6,266 19,887
Adjustment for Barts Square economic interest¹ (66) (22) 821
Share of results of joint ventures 15,101 6,244 20,708
(1 ) This adjustment reflects the impact of the consolidation of a joint
venture at its economic interest of 50.0% (30 September 2021: 47.0%, 31 March
2022: 46.0%) rather than its actual ownership interest of 33.3%.
Investment in joint ventures At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Summarised balance sheets
Non-current assets
Investment properties 160,700 111,732 140,045
Owner occupied property, plant and equipment 154 41 40
160,854 111,773 140,085
Current assets
Land and developments 4,663 12,369 8,349
Trade and other receivables 1,240 2,003 2,527
Deferred tax - - 172
Cash and cash equivalents 4,516 4,533 4,474
10,419 18,905 15,522
Current liabilities
Trade and other payables (5,573) (8,700) (10,062)
Borrowings - (8,293) -
(5,573) (16,993) (10,062)
Non-current liabilities
Trade and other payables (406) (405) (408)
Borrowings (54,603) (21,216) (39,585)
Leasehold interest (4,834) (4,680) (4,744)
Deferred tax (55) (4,632) (297)
(59,898) (30,933) (45,034)
Net assets pre-adjustment 105,802 82,752 100,511
Acquisition costs 93 93 93
Investment in joint ventures 105,895 82,845 100,604
The fair value of Investment properties at 30 September 2022 is as follows:
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Book value 160,700 111,732 140,045
Lease incentives and costs included in trade and other receivables 161 151 166
Head leases capitalised (4,376) (4,406) (4,391)
Fair value 156,485 107,477 135,820
13. Other Investments
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Book value at 1 April 306 - -
Acquisitions - 354 306
As at period end 306 354 306
On 6 August 2021, the Group entered into a commitment of £1,000,000 to invest
in the Pi Labs European PropTech Venture Capital Fund ("Fund") of which
£306,000 has been invested as at 30 September 2022. The Fund is focused on
investing in the next generation of proptech businesses.
The fair value of the Group's investment is based on the net asset value of
the Fund, representing Level 2 fair value measurement as defined in IFRS 13
Fair Value Measurement.
14. Land and Developments
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
At 1 April 2,089 448 448
Acquisitions and construction costs - 3,605 2,913
Disposals - (3,533) (3,557)
(Provision)/reversal of provision - (454) 2,285
At 30 September 2,089 66 2,089
The Directors' valuation of development stock shows a surplus of £302,000 (30
September 2021: £578,000, 31 March 2022: £302,000) above book value. This
surplus has been included in the EPRA net tangible asset value (Note 22).
No interest has been capitalised or included in land and developments.
15. Trade and Other Receivables
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Trade receivables 16,168 12,088 18,807
Other receivables 804 663 762
Prepayments 2,503 4,862 4,310
Accrued income 17,076 20,968 24,574
Total trade and other receivables 36,551 38,581 48,453
Included in accrued income are lease incentives of £14,858,000 (30 September
2021: £22,292,000, 31 March 2022: £24,836,000).
16. Cash and Cash Equivalents
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Cash held at managing agents 4,366 3,245 10,589
Restricted cash 3,905 63,534 3,978
Cash deposits 46,107 67,972 14,240
Total cash and cash equivalents 54,378 134,751 28,807
Restricted cash is made up of cash held by solicitors and cash in restricted
accounts.
17. Trade and Other Payables
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Trade payables 15,551 13,288 23,122
Other payables 1,607 3,214 3,957
Accruals 6,266 6,366 7,418
Deferred income 9,801 7,704 9,489
Total trade and other payables 33,225 30,572 43,986
18. Lease Liability
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Current lease liability 670 646 658
Non-current lease liability 5,933 6,604 6,271
Included within the lease liability are £670,000 (30 September 2021:
£646,000, 31 March 2022: £658,000) of current and £3,745,000 (30 September
2021: £4,415,000, 31 March 2022: £4,082,000) of non-current lease
liabilities which relate to the long leasehold of the Group's head office.
19. Borrowings
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Current borrowings - - -
Borrowings repayable within:
- two to three years - 65,000 100,000
- three to four years 246,100 271,825 296,633
Non-current borrowings 246,100 336,825 396,633
Total borrowings 246,100 336,825 396,633
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Total borrowings 246,100 336,825 396,633
Cash (54,378) (134,751) (28,807)
Net borrowings 191,722 202,074 367,826
Net borrowings exclude the Group's share of borrowings in joint ventures of
£54,603,000 (30 September 2021: £29,509,000, 31 March 2022: £39,585,000)
and cash of £4,516,000 (30 September 2021: £4,533,000, 31 March 2022:
£4,474,000). All borrowings in joint ventures are secured.
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Net assets 692,695 622,584 687,043
Net gearing 28% 32% 54%
20. Derivative Financial Instruments
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Derivative financial instruments asset 36,758 1,492 11,104
Derivative financial instruments liability - (4,382) (538)
A gain on the change in fair value of £26,564,000 has been recognised in the
Unaudited Consolidated Income Statement (30 September 2021: £4,552,000, 31
March 2022: £17,996,000) as a result of the significant movements upwards in
the medium and long term interest rate projections.
The fair values of the Group's outstanding interest rate swaps and caps have
been estimated by calculating the present values of future cash flows, using
appropriate market discount rates, representing Level 2 fair value
measurements as defined in IFRS 13 Fair Value Measurement.
21. Share Capital
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Authorised 39,577 39,577 39,577
The authorised share capital of the Company is £39,577,000 divided into
ordinary shares of 1p each.
Allotted, called up and fully paid:
- 123,355,197 (30 September 2021: 122,325,413, 31 March 2022: 1,233 1,224 1,223
122,325,413) ordinary shares of 1p each
- nil deferred shares at 1/8p each (30 September 2021: 212,145,300, 31 March - 265 -
2022: nil)
1,233 1,489 1,223
22. Net Assets Per Share
At Number of shares At Number of shares p
30 September 2022 000 31 March 000
£000 2022
£000
p
Ordinary shares in issue 123,355 122,325
Own shares held (328) -
IFRS basic net assets 692,695 122,957 563 687,043 122,325 562
- share settled bonus 561 662
- dilutive effect of Performance Share Plan 543 1,657
Diluted net asset value 692,695 124,061 558 687,043 124,644 551
Adjustments:
- fair value of financial instruments (36,758) (10,565)
- deferred tax 126 503
- fair value of land and developments 302 302
- real estate transfer tax 61,043 73,155
EPRA net reinstatement value 717,408 124,061 578 750,438 124,644 602
- real estate transfer tax (31,674) (36,656)
- deferred tax (126) (503)
EPRA net tangible asset value 685,608 124,061 553 713,279 124,644 572
At Number of shares p At Number of shares p
30 September 2022 000 31 March 000
£000 2022
£000
Diluted net asset value 692,695 124,061 558 687,043 124,644 551
Adjustments:
- surplus on fair value of stock 302 302
EPRA net disposal value 692,997 124,061 559 687,345 124,644 551
At Number of shares p
30 September 000
2021
£000
IFRS net assets 622,584 122,325
Adjustments:
- deferred shares (265)
Basic net asset value 622,319 122,325 509
- share settled bonus 513
- dilutive effect of Performance Share Plan 1,130
Diluted net asset value 622,319 123,968 502
Adjustments:
- fair value of financial instruments 2,890
- deferred tax 30,866
- fair value of land and developments 578
- real estate transfer tax 60,250
EPRA net reinstatement value 716,903 123,968 578
- real estate transfer tax (25,817)
- deferred tax (7,871)
EPRA net tangible asset value 683,215 123,968 551
At Number of shares p
30 September 000
2021
£000
Diluted net assets 622,319 123,968 502
Adjustments:
- surplus on fair value of stock 578
- fair value of fixed rate loan (7,731)
EPRA net disposal value 615,166 123,968 496
The net asset values per share have been calculated in accordance with
guidance issued by the European Public Real Estate Association ("EPRA").
The adjustments to the net asset value comprise the amounts relating to the
Group and its share of joint ventures.
The calculation of EPRA net disposal value per share reflects the fair value
of all the assets and liabilities of the Group at 30 September 2022. As at 30
September 2021, one of the loans held by the Group was at a fixed rate and
therefore not at fair value, resulting in an adjustment of £7,731,000 to
reflect the increase from book to fair value.
23. Related Party Transactions
The following amounts were due from the Group's joint ventures:
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Charterhouse Street Limited group 565 400 405
Barts Square companies 76 24 79
Old Street Holdings LP - 3 3
Shirley Advance LLP 8 8 8
A development management, accounting and corporate services fee of £25,000
(30 September 2021: £25,000, 31 March 2022: £50,000) was charged by the
Group to the Barts Square companies. In addition, a development management,
accounting and corporate services fee of £699,000 (30 September 2021:
£425,000, 31 March 2022: £1,380,000) was charged by the Group to the
Charterhouse Place Limited group.
24. See-through Analysis
Helical holds a significant proportion of its property assets in joint
ventures with partners that provide a significant equity contribution, whilst
relying on the Group to provide asset management or development expertise.
Accounting convention requires Helical to account under IFRS for its share of
the net results and net assets of joint ventures in limited detail in the
Income Statement and Balance Sheet. Net asset value per share, a key
performance measure used in the real estate industry, as reported in the
financial statements under IFRS, does not provide Shareholders with the most
relevant information on the fair value of assets and liabilities within an
ongoing real estate company with a long-term investment strategy.
This analysis incorporates the separate components of the results of the
consolidated subsidiaries and Helical's share of its joint ventures' results
into a "see-through" analysis of its property portfolio, debt profile and the
associated income streams and financing costs, to assist in providing a
comprehensive overview of the Group's activities.
See-through Net Rental Income
Helical's share of the gross rental income, head rents payable and property
overheads from property assets held in subsidiaries and in joint ventures is
shown in the table below.
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Gross rental income - subsidiaries 19,245 15,725 35,324
- joint ventures 269 105 317
Total gross rental income 19,514 15,830 35,641
Rents payable - subsidiaries (69) (76) (169)
Property overheads - subsidiaries (1,121) (1,636) (4,069)
- joint ventures (142) (42) (175)
See-through net rental income 18,182 14,076 31,228
See-through Net Development Profits
Helical's share of development profits from property assets held in
subsidiaries and in joint ventures is shown in the table below.
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
In parent and subsidiaries 783 1,210 3,519
In joint ventures 186 (41) 764
Total gross development profit 969 1,169 4,283
(Provision)/reversal of provision against stock - subsidiaries - (165) 2,285
See-through development profits 969 1,004 6,568
See-through Net (Loss)/Gain on Sale and Revaluation of Investment Properties
Helical's share of the net (loss)/gain on the sale and revaluation of
Investment properties held in subsidiaries and joint ventures is shown in the
table below.
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Revaluation (deficit)/surplus on Investment properties - subsidiaries (34,994) 19,906 33,311
- joint ventures 15,339 9,962 18,473
Total revaluation (deficit)/surplus (19,655) 29,868 51,784
Net gain/(loss) on sale of Investment properties - subsidiaries 4,606 (88) (45)
- joint ventures (71) - -
Total net gain/(loss) on sale of Investment properties 4,535 (88) (45)
See-through net (loss)/gain on sale and revaluation of Investment properties (15,120) 29,780 51,739
See-through Administration Expenses
Helical's share of the administration expenses incurred in subsidiaries and
joint ventures is shown in the table below.
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Administration expenses - subsidiaries 5,323 4,712 9,598
- joint ventures 452 230 295
Total administration expenses 5,775 4,942 9,893
Performance related awards, including NIC - subsidiaries 261 2,430 7,170
Total performance related awards, including NIC 261 2,430 7,170
See-through administration expenses 6,036 7,372 17,063
See-through Net Finance Costs
Helical's share of the interest payable, finance charges, capitalised interest
and interest receivable on bank borrowings and cash deposits in subsidiaries
and joint ventures is shown in the table below.
Half Year to Half Year to Year to
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Interest payable on bank loans and overdrafts - subsidiaries 5,214 5,212 10,169
- joint ventures 1,619 1,080 2,407
Total interest payable on bank loans and overdrafts 6,833 6,292 12,576
Other interest payable and similar charges - subsidiaries 2,188 2,323 9,065
- joint ventures 101 107 181
Interest capitalised - joint ventures (1,815) (919) (2,142)
Total finance costs 7,307 7,803 19,680
Interest receivable and similar income - subsidiaries (96) (2) (6)
- joint ventures (6) - -
See-through net finance costs 7,205 7,801 19,674
See-through Property Portfolio
Helical's share of the investment, land and development property portfolio in
subsidiaries and joint ventures is shown in the table below.
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Investment property fair value - subsidiaries 751,250 781,425 961,500
- joint ventures 156,485 107,477 135,820
Total Investment property fair value 907,735 888,902 1,097,320
Land and development stock - subsidiaries 2,089 66 2,089
- joint ventures 4,663 12,369 8,349
Total land and development stock 6,752 12,435 10,438
Land and development stock surplus - subsidiaries 302 578 302
Total land and development stock surpluses 302 578 302
Total land and development stock at fair value 7,054 13,013 10,740
See-through property portfolio 914,789 901,915 1,108,060
See-through Net Borrowings
Helical's share of borrowings and cash deposits in subsidiaries and joint
ventures is shown in the table below.
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Gross borrowings more than one year - subsidiaries 246,100 336,825 396,633
Total 246,100 336,825 396,633
Gross borrowings less than one year - joint ventures - 8,293 -
Gross borrowings more than one year - joint ventures 54,603 21,216 39,585
Total 54,603 29,509 39,585
Cash and cash equivalents - subsidiaries (54,378) (134,751) (28,807)
- joint ventures (4,516) (4,533) (4,474)
Total (58,894) (139,284) (33,281)
See-through net borrowings 241,809 227,050 402,937
25. See-through Net Gearing and Loan to Value
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Property portfolio 914,789 901,915 1,108,060
Net borrowings 241,809 227,050 402,937
Net assets 692,695 622,584 687,043
See-through net gearing 34.9% 36.5% 58.6%
See-through loan to value 26.4% 25.2% 36.4%
26. Total Accounting Return
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Brought forward IFRS net assets 687,043 608,161 608,161
Carried forward IFRS net assets 692,695 622,584 687,043
Increase in IFRS net assets 5,652 14,423 78,882
Dividends paid 10,092 9,035 12,582
Total accounting return 15,744 23,458 91,464
Total accounting return percentage 2.3% 3.9% 15.0%
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
Brought forward EPRA net tangible assets 713,279 658,663 658,663
Carried forward EPRA net tangible assets 685,608 683,215 713,279
(Decrease)/increase in EPRA net tangible assets (27,671) 24,552 54,616
Dividends paid 10,092 9,035 12,582
Total EPRA accounting return (17,579) 33,587 67,198
Total EPRA accounting return percentage (2.5%) 5.1% 10.2%
27. Total Property Return
At At At
30 September 2022 30 September 2021 31 March
£000 £000 2022
£000
See-through net rental income 18,182 14,076 31,228
See-through development profits 969 1,004 6,568
See-through revaluation (deficit)/surplus (19,655) 29,868 51,784
See-through net gain/(loss) on sale of Investment properties 4,535 (88) (45)
Total property return 4,031 44,860 89,535
28. Capital Commitments
The Group has a commitment of £3,700,000 (30 September 2021: £30,900,000, 31
March 2022: £13,100,000), all of which relates to the finalisation of works
at The JJ Mack Building, EC1.
Appendix 1 - Glossary of Terms
Capital value (psf)
The open market value of the property divided by the area of the property in
square feet.
Company or Helical or Group
Helical plc and its subsidiary undertakings.
Diluted figures
Reported amounts adjusted to include the effects of potential shares issuable
under the Director and employee remuneration schemes.
Earnings per share (EPS)
Profit after tax divided by the weighted average number of ordinary shares in
issue.
EPRA
European Public Real Estate Association.
EPRA earnings per share
Earnings per share adjusted to exclude gains/losses on sale and revaluation of
Investment properties and their deferred tax adjustments, the tax on
profit/loss on disposal of Investment properties, trading property
profits/losses, movement in fair value of available-for-sale assets and fair
value movements on derivative financial instruments, on an undiluted basis.
Details of the method of calculation of the EPRA earnings per share are
available from EPRA (see Note 10).
EPRA net disposal value per share
Represents the Shareholders' value under a disposal scenario, where deferred
tax, financial instruments and certain other adjustments are calculated to the
full extent of their liability, net of any resulting tax (see Note 22).
EPRA net reinstatement value per share
Net asset value adjusted to reflect the value required to rebuild the entity
and assuming that entities never sell assets. Assets and liabilities, such as
fair value movements on financial derivatives, that are not expected to
crystallise in normal circumstances and deferred taxes on property valuation
surpluses are excluded (see Note 22).
EPRA net tangible assets per share
Assumes that entities buy and sell assets, thereby crystallising certain
levels of unavoidable deferred tax, but excludes assets and liabilities, such
as fair value movements on financial derivatives, that are not expected to
crystallise in normal circumstances and deferred taxes on property valuation
surpluses are excluded (see Note 22).
EPRA topped-up NIY
The current annualised rent, net of costs, topped-up for contracted uplifts,
expressed as a percentage of the fair value of the relevant property.
Estimated rental value (ERV)
The market rental value of lettable space as estimated by the Group's valuers
at each Balance Sheet date.
Initial yield
Annualised net passing rents on Investment properties as a percentage of their
open market value.
Like-for-like valuation change
The valuation gain/loss, net of capital expenditure, on those properties held
at both the previous and current reporting period end, as a proportion of the
fair value of those properties at the beginning of the reporting period plus
net capital expenditure.
MSCI INC. (MSCI IPD)
MSCI INC. is a company that produces independent benchmarks of property
returns using its Investment Property Databank (IPD).
Net asset value per share (NAV)
Net assets divided by the number of ordinary shares at the Balance Sheet date
(see Note 22).
Net gearing
Total borrowings less short-term deposits and cash as a percentage of net
assets.
Passing rent
The annual gross rental income being paid by the tenant.
Reversionary yield
The income/yield from the full estimated rental value of the property on the
market value of the property grossed up to include purchaser's costs, capital
expenditure and capitalised revenue expenditure.
See-through/Group share
The consolidated Group and the Group's share in its joint ventures (see Note
24).
See-through net gearing
The see-through net borrowings expressed as a percentage of net assets (see
Note 25).
Total Accounting Return
The growth in the net asset value of the Company plus dividends paid in the
period, expressed as a percentage of net asset value at the start of the
period (see Note 26).
Total Property Return
The total of net rental income, trading and development profits and net gain
on sale and revaluation of Investment properties on a see-through basis (see
Note 27).
Total Shareholder Return (TSR)
The growth in the ordinary share price as quoted on the London Stock Exchange
plus dividends per share received for the period expressed as a percentage of
the share price at the beginning of the period.
True equivalent yield
The constant capitalisation rate which, if applied to all cash flows from an
Investment property, including current rent, reversions to current market rent
and such items as voids and expenditures, equates to the market value. Assumes
rent is received quarterly in advance.
Unleveraged returns
Total property gains and losses (both realised and unrealised) plus net rental
income expressed as a percentage of the total value of the properties.
WAULT
The total contracted rent up to the first break, or lease expiry date, divided
by the contracted annual rent.
HELICAL PLC
Registered in England and Wales No.156663
Registered Office:
5 Hanover Square
London
W1S 1HQ
T: 020 7629 0113
F: 020 7408 1666
E: reception@helical.co.uk (mailto:reception@helical.co.uk)
www.helical.co.uk (http://www.helical.co.uk)
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