REG - Land Sec. Group PLC - Half-yearly results <Origin Href="QuoteRef">LAND.L</Origin> - Part 6

Land SecuritiesAnnouncement

14/11/2017 07:06

- Part 6: For the preceding part double click  ID:nRSN3778We 

wholly owned, together with our share of investment properties held in our joint ventures. 
 
Completed developments 
 
Completed developments consist of those properties previously included in the development programme, which have been
transferred from the development programme since 1 April 2016. 
 
Development pipeline 
 
The development programme together with proposed developments. 
 
Development programme 
 
The development programme consists of committed developments (Board approved projects with the building contract let),
authorised developments (Board approved), projects under construction and developments which have reached practical
completion within the last two years but are not yet 95% let. 
 
Diluted figures 
 
Reported results adjusted to include the effects of potentially dilutive shares issuable under employee share schemes. 
 
Dividend Reinvestment Plan (DRIP) 
 
The DRIP provides shareholders with the opportunity to use cash dividends received to purchase additional ordinary shares
in the Company immediately after the relevant dividend payment date. Full details appear on the Company's website. 
 
Earnings per share 
 
Profit after taxation attributable to owners divided by the weighted average number of ordinary shares in issue during the
period. 
 
EPRA 
 
European Public Real Estate Association. 
 
EPRA net initial yield 
 
EPRA net initial yield is defined within EPRA's Best Practice Recommendations as the annualised rental income based on the
cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the gross market
value of the property. It is consistent with the net initial yield calculated by the Group's external valuer. 
 
Equivalent yield 
 
Calculated by the Group's external valuer, equivalent yield is the internal rate of return from an investment property,
based on the gross outlays for the purchase of a property (including purchase costs), reflecting reversions to current
market rent and such items as voids and non-recoverable expenditure but ignoring future changes in capital value. The
calculation assumes rent is received annually in arrears. 
 
ERV - Gross estimated rental value 
 
The estimated market rental value of lettable space as determined biannually by the Group's external valuer. For investment
properties in the development programme, which have not yet reached practical completion, the ERV represents management's
view of market rents. 
 
Fair value movement 
 
An accounting adjustment to change the book value of an asset or liability to its market value (see also mark-to-market
adjustment). 
 
Finance lease 
 
A lease that transfers substantially all the risks and rewards of ownership from the lessor to the lessee. 
 
Gearing 
 
Total borrowings, including bank overdrafts, less short-term deposits, corporate bonds and cash, at book value, plus
cumulative fair value movements on financial derivatives as a percentage of total equity. For adjusted gearing, see note
13. 
 
Gross market value 
 
Market value plus assumed usual purchaser's costs at the reporting date. 
 
Head lease 
 
A lease under which the Group holds an investment property. 
 
Interest Cover Ratio (ICR) 
 
A calculation of a company's ability to meet its interest payments on outstanding debt. It is calculated using revenue
profit before interest, divided by net interest (excluding the mark-to-market movement on interest-rate swaps, foreign
exchange swaps, bond exchange de-recognition, capitalised interest and interest on the pension scheme assets and
liabilities). The calculation excludes joint ventures. 
 
IPD 
 
Refers to the MSCI IPD Direct Property indexes which measure the property level investment returns in the UK. 
 
Interest-rate swap 
 
A financial instrument where two parties agree to exchange an interest rate obligation for a predetermined amount of time.
These are generally used by the Group to convert floating-rate debt or investments to fixed rates. 
 
Investment portfolio 
 
The investment portfolio comprises the investment properties of the Group's subsidiaries, on a proportionately consolidated
basis where not wholly owned. 
 
Joint venture 
 
An arrangement in which the Group holds an interest and which is jointly controlled by the Group and one or more partners
under a contractual arrangement. Decisions on the activities of the joint venture that significantly affect the joint
venture's' returns, including decisions on financial and operating policies and the performance and financial position of
the operation, require the unanimous consent of the partners sharing control. 
 
Lease incentives 
 
Any incentive offered to occupiers to enter into a lease. Typically, the incentive will be an initial rent-free period, or
a cash contribution to fit-out or similar costs. For accounting purposes the value of the incentive is spread over the
non-cancellable life of the lease. 
 
LIBOR 
 
The London Interbank Offered Rate, the interest rate charged by one bank to another for lending money, often used as a
reference rate in bank facilities. 
 
Like-for-like portfolio 
 
The like-for-like portfolio includes all properties which have been in the portfolio since 1 April 2016, but excluding
those which are acquired, sold or included in the development pipeline at any time since that date. 
 
Loan-to-value (LTV) 
 
Group LTV is the ratio of adjusted net debt, including subsidiaries and joint ventures, to the sum of the market value of
investment properties and the book value of trading properties of the Group, its subsidiaries and joint ventures, all on a
proportionate basis, expressed as a percentage. For the Security Group, LTV is the ratio of net debt lent to the Security
Group divided by the value of secured assets. 
 
Market value 
 
Market value is determined by the Group's external valuer, in accordance with the RICS Valuation Standards, as an opinion
of the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing
seller in an arm's-length transaction after proper marketing. 
 
Mark-to-market adjustment 
 
An accounting adjustment to change the book value of an asset or liability to its market value (see also fair value
movement). 
 
Net assets per share 
 
Equity attributable to owners divided by the number of ordinary shares in issue at the period end. Net assets per share is
also commonly known as net asset value per share (NAV per share). 
 
Net initial yield 
 
Net initial yield is a calculation by the Group's external valuer of the yield that would be received by a purchaser, based
on the Estimated Net Rental Income expressed as a percentage of the acquisition cost, being the market value plus assumed
usual purchasers' costs at the reporting date. The calculation is in line with EPRA guidance. Estimated Net Rental Income
is determined by the valuer and is based on the passing cash rent less ground rent at the balance sheet date, estimated
non-recoverable outgoings and void costs including service charges, insurance costs and void rates. 
 
Net rental income 
 
Net rental income is the net operational income arising from properties, on an accruals basis, including rental income,
finance lease interest, rents payable, service charge income and expense, other property related income, direct property
expenditure and bad debts. Net rental income is presented on a proportionate basis. 
 
Over-rented 
 
Space where the passing rent is above the ERV. 
 
Passing cash rent 
 
The estimated annual rent receivable as at the reporting date which includes estimates of turnover rent and estimates of
rent to be agreed in respect of outstanding rent review or lease renewal negotiations. Passing cash rent may be more or
less than the ERV (see over-rented, reversionary and ERV). Passing cash rent excludes annual rent receivable from units in
administration save to the extent that rents are expected to be received. Void units and units that are in a rent-free
period at the reporting date are deemed to have no passing cash rent. Although temporary lets of less than 12 months are
treated as void, income from temporary lets is included in passing cash rents. 
 
Planning permission 
 
There are two common types of planning permission: full planning permission and outline planning permission. A full
planning permission results in a decision on the detailed proposals on how the site can be developed. The grant of a full
planning permission will, subject to satisfaction of any conditions, mean no further engagement with the local planning
authority will be required to build the consented development. An outline planning permission approves general principles
of how a site can be developed. Outline planning permission is granted subject to conditions known as 'reserved matters'.
Consent must be sought and achieved for discharge of all reserved matters within a specified time-limit, normally three
years from the date outline planning permission was granted, before building can begin. In both the case of full and
outline planning permission, the local planning authority will 'resolve to grant permission'. At this stage, the planning
permission is granted subject to agreement of legal documents, in particular the s106 agreement. On execution of the s106
agreement, the planning permission will be issued. Work can begin on satisfaction of any 'pre-commencement' planning
conditions. 
 
Pre-let 
 
A lease signed with an occupier prior to completion of a development. 
 
Pre-development properties 
 
Pre-development properties are those properties within the like-for-like portfolio which are being managed to align vacant
possession within a three year horizon with a view to redevelopment. 
 
Property Income Distribution (PID) 
 
A PID is a distribution by a REIT to its shareholders paid out of qualifying profits. A REIT is required to distribute at
least 90% of its qualifying profits as a PID to its shareholders. 
 
Proposed developments 
 
Proposed developments are properties which have not yet received final Board approval or are still subject to main planning
conditions being satisfied, but which are more likely to proceed than not. 
 
Qualifying activities/ Qualifying assets 
 
The ownership (activity) of property (assets) which is held to earn rental income and qualifies for tax-exempt treatment
(income and capital gains) under UK REIT legislation. 
 
Real Estate Investment Trust (REIT) 
 
A REIT must be a publicly quoted company with at least three-quarters of its profits and assets derived from a qualifying
property rental business. Income and capital gains from the property rental business are exempt from tax but the REIT is
required to distribute at least 90% of those profits to shareholders. Corporation tax is payable on non-qualifying
activities in the normal way. 
 
Rental value change 
 
Increase or decrease in the current rental value, as determined by the Group's external valuer, over the reporting period
on a like-for-like basis. 
 
Rental income 
 
Rental income is as reported in the income statement, on an accruals basis, and adjusted for the spreading of lease
incentives over the term certain of the lease in accordance with SIC 15. It is stated gross, prior to the deduction of
ground rents and without deduction for operational outgoings on car park and commercialisation activities. 
 
Return on average capital employed 
 
Group profit before net finance expense, plus joint venture profit before net finance expense, divided by the average
capital employed (defined as shareholders' funds plus adjusted net debt). 
 
Return on average equity 
 
Group profit before tax plus joint venture tax divided by the average equity shareholders' funds. 
 
Revenue profit 
 
Profit before tax, excluding profits on the sale of non-current assets and trading properties, profits on long-term
development contracts, valuation movements, fair value movements on interest-rate swaps and similar instruments used for
hedging purposes, the adjustment to finance expense resulting from the amortisation of the bond exchange de-recognition
adjustment, debt restructuring charges, and any other items of an exceptional nature. 
 
Reversionary or under-rented 
 
Space where the passing rent is below the ERV. 
 
Reversionary yield 
 
The anticipated yield to which the initial yield will rise (or fall) once the rent reaches the ERV. 
 
Security Group 
 
Security Group is the principal funding vehicle for the Group and properties held in the Security Group are mortgaged for
the benefit of lenders. It has the flexibility to raise a variety of different forms of finance. 
 
Temporary lettings 
 
Lettings for a period of one year or less. These are included within voids. 
 
Topped-up net initial yield 
 
Topped-up net initial yield is a calculation by the Group's external valuer. It is calculated by making an adjustment to
net initial yield in respect of the annualised cash rent foregone through unexpired rent-free periods and other lease
incentives. The calculation is consistent with EPRA guidance. 
 
Total business return 
 
Dividend paid per share in the period plus the change in adjusted diluted net assets per share, divided by adjusted diluted
net assets per share at the beginning of the period. 
 
Total cost ratio 
 
Total cost ratio represents all costs included within revenue profit, other than rents payable and financing costs,
expressed as a percentage of gross rental income before rents payable. 
 
Total development cost (TDC) 
 
Total development cost refers to the book value of the site at the commencement of the project, the estimated capital
expenditure required to develop the scheme from the start of the financial year in which the property is added to our
development programme, together with capitalised interest, being the Group's borrowing costs associated with direct
expenditure on the property under development. Interest is also capitalised on the purchase cost of land or property where
it is acquired specifically for redevelopment. The TDC for trading property development schemes excludes any estimated tax
on disposal. 
 
Total property return 
 
Valuation movement, profit/loss on property sales and net rental income in respect of investment properties expressed as a
percentage of opening book value, together with the time weighted value for capital expenditure incurred during the current
period, on the combined property portfolio. 
 
Total Shareholder Return (TSR) 
 
The growth in value of a shareholding over a specified period, assuming that dividends are reinvested to purchase
additional units of the stock. 
 
Trading properties 
 
Properties held for trading purposes and shown as current assets in the balance sheet. 
 
Turnover rent 
 
Rental income which is related to an occupier's turnover. 
 
Valuation surplus/deficit 
 
The valuation surplus/deficit represents the increase or decrease in the market value of the Combined Portfolio, adjusted
for net investment. The market value of the Combined Portfolio is determined by the Group's external valuer. 
 
Voids 
 
Voids are expressed as a percentage of ERV and represent all unlet space, including voids where refurbishment work is being
carried out and voids in respect of pre-development properties. Temporary lettings for a period of one year or less are
also treated as voids. The screen at Piccadilly Lights, W1 is excluded from the void calculation as it will always carry
advertising although the number and duration of our agreements with advertisers will vary. 
 
Weighted average cost of capital (WACC) 
 
Weighted average cost of debt and notional cost of equity, used as a benchmark to assess investment returns. 
 
Weighted average unexpired lease term 
 
The weighted average of the unexpired term of all leases other than short-term lettings such as car parks and advertising
hoardings, temporary lettings of less than one year, residential leases and long ground leases. 
 
Yield shift 
 
A movement (negative or positive) in the equivalent yield of a property asset. 
 
Zone A 
 
A means of analysing and comparing the rental value of retail space by dividing it into zones parallel with the main
frontage. The most valuable zone, Zone A, is at the front of the unit. Each successive zone is valued at half the rate of
the zone in front of it. 
 
This information is provided by RNS
The company news service from the London Stock Exchange