REG - Metro Bank PLC - Half-year Report <Origin Href="QuoteRef">MTRO.L</Origin> - Part 2
25/07/2017 17:00
- Part 2: For the preceding part double click ID:nRSY0677Ma
Liabilities
Deposits from customers 9,804,940 7,950,579
Deposits from central banks 1,822,900 543,000
Repurchase agreements 543,490 653,091
Other liabilities 110,765 106,083
Total liabilities 12,282,095 9,252,753
Equity
Called up share capital 15 - -
Share premium account 15 1,028,085 1,027,645
Retained earnings (227,091) (230,193)
Other reserves 10,609 7,083
Total equity 811,603 804,535
Total equity and liabilities 13,093,698 10,057,288
The accounting policies, notes and information on pages 16 to 32 form part of
the financial statements.
These financial statements were approved and authorised for issue by the Board
of Directors on 26 July 2017 and were signed on its behalf by:
Vernon W. Hill II
Chairman
Craig Donaldson
Chief Executive Officer
Mike Brierley
Chief Financial Officer
Condensed consolidated cash flow statement
For the half year to 30 June 2017
Notes Half year to Half year to
30 June 2017 30 June 2016
£'000 £'000
Reconciliation of profit/(loss) before tax to net cash flows from operating activities:
Profit/(loss) before tax 4,424 (18,135)
Adjustments for:
Other write-offs 13,14 225 -
Loss on disposal of fixed assets 4 -
Depreciation and amortisation of intangible and tangible assets 13,14 15,912 10,117
Share option award charges 1,809 1,438
Gain on sale of securities and fair value gains on derivatives (1,343) (1,590)
Accrued interest on and amortisation of investment securities (1,590) (7,880)
Changes in operating assets (1,877,747) (1,092,030)
Changes in operating liabilities 3,028,450 1,815,796
Net cash inflows from operating activities 1,170,144 707,716
Cash flows from investing activities
Sales of investment securities 133,417 217,013
Purchase of investment securities (541,258) (1,056,503)
Proceeds from sale of property, plant and equipment 42 -
Purchase of property, plant and equipment 13 (41,831) (35,112)
Purchase and development of intangible assets 14 (31,310) (15,461)
Net cash outflows from investing activities (480,940) (890,063)
Cash flows from financing activities
Shares issued (including on exercise of share options) 15 440 403,023
Cost of share issues 15 - (5,246)
Net cash inflows from financing activities 440 397,777
Net increase in cash and cash equivalents 689,644 215,430
Cash and cash equivalents at start of period 500,428 282,148
Cash and cash equivalents at end of period 1,190,072 497,578
Profit/loss before tax includes:
Interest received 135,656 94,367
Interest paid (28,215) (25,572)
Cash and cash equivalent comprise of:
Cash and balances with the Bank of England 1,114,031 398,707
Loans and advances to banks 76,041 98,871
1,190,072 497,578
Condensed consolidated statement of changes in equity
For the half year to 30 June 2017
Share capital Share premium account Retained earnings Available for sale reserve Share option reserve Total equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2017 - 1,027,645 (230,193) (3,472) 10,555 804,535
Net profit for the year - - 3,102 - - 3,102
Other comprehensive income, net of tax, relating to available for sale investments - - - 188 - 188
Total comprehensive income - - 3,102 188 - 3,290
Share issue - 440 - - - 440
Share option awards at fair value - - - - 3,338 3,338
Balance as at - 1,028,085 (227,091) (3,284) 13,893 811,603
30 June 2017
Balance at 1 January 2016 - 629,304 (213,440) (12,018) 3,329 407,175
Net loss for the year - - (16,968) - - (16,968)
Other comprehensive income, net of tax, relating to available for sale investments - - - 4,175 - 4,175
Total comprehensive income - - (16,968) 4,175 - (12,793)
Share issue - 398,512 - - - 398,512
Share option awards at fair value - - - - 1,401 1,401
Balance as at - 1,027,816 (230,408) (7,843) 4,730 794,295
30 June 2016
Notes 15 15
The available for sale reserve represents the unrealised change in the fair
value of available for sale investments since initial recognition.
Notes to the financial statements
(Note to the Audit Committee and Board: most wording in notes 1-7 is aligned
to that included in the Interim Report for the period ended 30 June 2016. We
have highlighted additional wording in yellow to aid review.)
1. General information
Metro Bank provides retail and corporate banking services in the UK and is a
public limited liability company incorporated and domiciled in England and
Wales. The address of its registered office is: One Southampton Row London
WC1B 5HA.
2. Basis of preparation and going concern
The condensed consolidated interim financial statements of Metro Bank and its
subsidiaries (the Group) for the six months ended 30 June 2017 were authorised
for issue in accordance with a resolution of the Directors on [25 July 2017].
These condensed consolidated interim financial statements for the six months
ended 30 June 2017 have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Conduct Authority (FCA) and IAS 34 Interim
Financial Reporting as adopted by the European Union (EU). They do not include
all the information required by International Financial Reporting Standards
(IFRS) in full annual financial statements and should be read in conjunction
with the Annual Report and Accounts for the year ended 31 December 2016.
Copies of the 2016 Annual Report and Accounts are available on the Group's
website.
The comparative financial information for the year ended 31 December 2016 does
not constitute statutory accounts as defined in section 434 of the Companies
Act 2006. A copy of the statutory accounts for that year has been delivered to
the Registrar of Companies. The auditor's report on those accounts was not
qualified, did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying the report and did not
contain statements under section 498(2) or (3) of the Companies Act 2006.
The Directors consider that it is appropriate to continue to adopt the going
concern basis of accounting in preparing the condensed consolidated interim
financial statements. In reaching this assessment, the Directors have
considered projections for the Group's capital and funding position and have
had regard to the principal risks and uncertainties of the liquidity and
capital requirements of the business over the next 12 months.
3. Accounting policies
The accounting policies and methods of computation are consistent with those
applied in the 2016 Annual Report and Accounts, other than the following.
In the six months to 30 June 2017 the Group recognised a number of investment
properties. These consist of shops and offices which are located within the
same buildings as some of the Group's stores, where the freehold interest has
been acquired. Investment property is held by the Group to earn rental income
and for capital appreciation. The Group's investment properties are carried at
cost less depreciation. Depreciation is calculated on a consistent basis with
that applied to land and buildings as disclosed in the 2016 Annual Report and
Accounts.
No other new accounting policies have been adopted in the period under
review.
4. Future accounting developments
Details of those IFRS pronouncements which will be relevant to the Group but
which are not effective for annual periods ending on 31 December 2017 and
which have not been applied in preparing these condensed consolidated
half-year financial statements were set out in the 2016 Annual Report. The
standard expected to have the most material impact on the group in the next 12
months is IFRS 9, Financial Instruments.
IFRS 9 brings together the classification and measurement, impairment and
hedge accounting phases of the International Accounting Standards Board's
("IASB") project to replace IAS 39, and is effective for annual periods
beginning on or after 1 January 2018. The standard includes requirements for
classification and measurement of financial assets and liabilities, impairment
of financial assets and hedge accounting.
Classification and measurement:
IFRS 9 applies one classification approach for all types of financial assets.
Two criteria are used to determine how financial assets should be classified
and measured: (a) the entity's business model (i.e. how an entity manages its
financial assets in order to generate cash flows by collecting contractual
cash flows, selling financial assets or both); and (b) the contractual cash
flow characteristics of the financial asset (i.e. whether the contractual cash
flows are solely payments of principal and interest). The combined effect of
the application of the business model and the contractual cash flow
characteristics tests may result in some differences in the population of
financial assets measured at amortised cost or fair value compared with IAS
39. However, based on reviews performed to date, we do not expect that the
overall impact of any change will be significant.
Impairment:
The incurred loss model under IAS 39 is replaced with a new expected loss
model. Impairment provisions are driven by changes in credit risk of
instruments, with a provision for lifetime expected credit losses recognised
where the risk of default of an instrument has increased significantly since
initial recognition. Risk of default and expected credit losses must
incorporate forward looking and macroeconomic information. Expected credit
loss models will require more data and assumptions with impairment provisions
potentially becoming more volatile. IFRS 9 will also tend to result in an
increase in the total level of impairment allowances since we will be required
to consider credit losses expected on all assets in our portfolio, rather than
limiting our assessment to incurred losses as currently required. We intend
to quantify the potential impact of adopting IFRS 9 no later than in the
Preliminary Full Year 2017 Results Announcement, expected to be issued in
February 2018.
Hedge accounting:
The new requirements align hedge accounting more closely with risk management.
The revised standard also establishes a more principles-based approach to
hedge accounting. IFRS 9 includes an accounting policy choice to remain with
IAS 39 hedge accounting. Hedge accounting is not currently material for Metro
Bank and we do not have current plans to change this position. Firm policy
choices relating to the adoption of IFRS 9 requirements will be made in the
second half of 2017.
Transition:
IFRS 9 does not require full restatement of comparatives on adoption, but
required adjustments will be made to the balance sheet at the point of
implementation. Any uplift to credit impairment provisions will be posted to
reserves at this point.
Metro Bank's formal IFRS 9 implementation project continues to progress.
Metro Bank intends to perform a parallel run during the second half of 2017 to
gain a better understanding of the expected impact of IFRS 9 adoption, and to
ensure target operating models and governance are fully embedded. Full
details of the impact of adopting IFRS 9 will be included in the 2017 Annual
Report and Accounts.
5. Presentation of information
Presentation of risk disclosures
IAS 34 Interim Financial Statements requires certain disclosures outlined in
IFRS 7 Financial Instruments: Disclosure. These include disclosures concerning
the nature and extent of risks relating to financial instruments and have been
included within the Principal risks and uncertainties report on pages 7 to 8.
6. Critical estimates and judgements
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of income and expenses during the reporting period. Although these estimates
are based on management's best assessment of the outcome, actual results may
ultimately differ from those estimates. Management believes that the
underlying assumptions are appropriate and that the Group's financial
statements therefore present the financial position and results fairly.
There have been no significant changes in the basis upon which critical
estimates and judgements have been determined, compared to those applied at 31
December 2016.
7. Operating segments
The Group provides retail and corporate banking services. The Board considers
the results of the Group as a whole when assessing the performance of the
business and allocating resources. Accordingly, the Group has a single
operating segment.
The Group operates solely in the UK and as such no geographical analysis is
required.
8. Interest income
Half year to 30 June 2017 Half year to 30 June 2016
£'000 £'000
Investment securities 27,325 21,034
Loans and advances to customers 108,423 75,100
Total interest Income 135,748 96,134
9. Interest expense
Half year to 30 June 2017 Half year to 30 June 2016
£'000 £'000
Interest on customer accounts 22,643 22,874
Interest on repurchase agreements 848 4,145
Other 4,815 2,452
Total interest expense 28,306 29,471
10. Taxation
Tax credit / (charge) for the period
Half year to 30 June 2017 Half year to30 June 2016
£'000 £'000
Current tax:
UK corporation tax 339 348
Adjustment in respect of prior periods - -
Total current tax charge 339 348
Deferred tax:
Current period 1,083 (2,798)
Adjustment in respect of prior periods (100) 1,283
Total deferred tax charge/(credit) 983 (1,515)
Total tax charge/(credit) 1,322 (1,167)
Factors affecting the tax credit / (charge) for the year
Total tax paid in relation to income during the period was £nil (December
2016: £nil). The tax credit on the group's profit before tax differs from the
theoretical amount that would arise using the statutory tax rate applicable to
the profits of the consolidated entities as follows:
30 June 2017 30 June2016
£'000 £'000
Profit/(loss) before tax 4,424 (18,135)
Profit/(loss) on ordinary activities multiplied by standard UK rate (19.25% / 20%) 852 (3,627)
Tax effects of:
Expenses not deductible for tax purposes - listing fees - 351
Expenses not deductible for tax purposes - other 457 1,989
Adjustment in respect of prior periods (100) -
Change in tax rates on the net deferred tax asset 113 120
Total tax charge/(credit) 1,322 (1,167)
In the 2016 Budget the Chancellor announced from 1 April 2017 there will be a
new restriction on the amount of profit that can be offset by brought forward
losses. The use of brought forward losses against current year profits will be
subject to an annual allowance of £5m per group and above this allowance there
will be a 50% restriction in the profits that can be covered by losses brought
forward. However at the 2017 Half Year Reporting date legislation had not been
substantively enacted and so has not been adjusted for.
Banks will also be subject to a lower threshold of 25% of profits that can be
utilised against losses accrued by 1 April 2015. However, this loss
restriction relief does not apply to the first five years of banking activity
so this particular restriction will not impact the Group.
In accordance with IAS 34 Interim Financial Reporting, the Group's tax charge
for the half-year to 30 June 2017 is based on the best estimate of the
weighted-average annual tax rate expected for the full financial year.
Deferred Tax
A deferred tax asset must be regarded as recoverable and therefore recognised
only when, on the basis of all available evidence, it can be regarded as more
likely than not there will be suitable tax profits from which the future of
the underlying timing differences can be deducted.
The movement in deferred tax assets and liabilities during the period, without
taking into consideration the offsetting of balances within the same tax
jurisdiction, is as follows:
Unused tax losses Available for sale securities Share based payments Property, plant & equipment Intangible assets Total
2017 £'000 £'000 £'000 £'000 £'000 £'000
Deferred tax assets 60,886 732 9,391 - 258 71,267
Deferred tax liabilities - (1,569) (497) (5,259) (5,993) (13,318)
Deferred tax assets (net) 60,886 (837) 8,894 (5,259) (5,735) 57,949
At 1 January 2017 61,403 (1,723) 6,195 (4,478) (5,118) 56,279
Income statement (179) - 594 (781) (617) (983)
Other comprehensive income (338) 886 - - - 548
Equity - - 2,105 - - 2,105
At 30 June 2017 60,886 (837) 8,894 (5,259) (5,735) 57,949
Unused tax losses AFS reserve Share based payments Property, plant & equipment Intangible assets Total
2016 £'000 £'000 £'000 £'000 £'000 £'000
Deferred tax assets 60,806 2,261 1,542 71 79 64,759
Deferred tax liabilities - (3,007) (873) (2,774) (3,838) (10,492)
Deferred tax assets (net) 60,806 (746) 669 (2,703) (3,759) 54,267
At 1 January 2016 56,163 - 1,499 (1,861) (2,747) 53,054
Income statement 4,643 - (1,273) (842) (1,013) 1,515
Other comprehensive income - (746) - - - (746)
Equity - - 443 - - 443
At 30 June 2016 60,806 (746) 669 (2,703) (3,759) 54,267
11. Loans and advances to customers and banks
Total loans and advances to customers
30 June 2017 31 December 2016
£'000 £'000
Gross Loans and advances to customers 7,760,093 5,872,864
Less: allowance for impairment (10,370) (7,494)
Net Loans and advances to customers 7,749,723 5,865,370
Amounts include:
Repayable on demand or at short notice 179,094 49,215
Loans and advances to customers by category
30 June2017 31 December 2016
£'000 £'000
Individual (retail customers):
- Overdraft 83,132 66,088
- Credit Cards 7,881 7,369
- Term Loans 109,250 107,584
- Mortgages 4,948,381 3,604,591
Corporate:
- Overdraft 86,070 32,613
- Credit Cards 2,011 1,681
- Term Loans 2,320,799 1,874,104
- Asset and Invoice Finance 194,587 164,295
- Senior Secured Lending 7,982 14,539
Total loans to customers 7,760,093 5,872,864
Credit quality of loans and advances to customers and banks
All loans and advances are categorised as either 'neither past due nor
impaired', 'past due but not impaired', 'individually impaired', or 'portfolio
impaired'. For the purposes of the disclosures in the loan asset credit
quality section below:
· A loan is considered past due when the borrower has failed to make a payment when due under the terms of the loan contract.
· The impairment allowance includes allowances against financial assets that have been individually-impaired and those subject to collective impairment.
· Loans neither past due nor impaired and loans that are past due but not impaired consist predominantly of corporate and retail loans that are performing and whilst not individually impaired, may be subject to a collective impairment allowance.
· Impaired loans that are individually assessed consist predominantly of corporate loans that are past due and for which an individual allowance has been raised.
· Portfolio impaired loans, which are not included in the categories above, consist predominantly of retail loans that are 90 days or more past due.
30 June 2017
Loans and advances to customers Loans and advance
£'000 to banks
£'000
Neither past due nor impaired 7,663,671 76,041
Past due but not impaired 67,253 -
Individually impaired 10,187 -
Portfolio impaired 18,982 -
Total 7,760,093 76,041
Less: allowance for impairment (10,370) -
Total 7,749,723 76,041
Individually impaired (1,918) -
Collectively impaired* (8,452) -
Total (10,370) -
31 December 2016
Loans and advances to customers Loans and advance
£'000 to banks
£'000
Neither past due nor impaired 5,762,719 65,816
Past due but not impaired 88,811 -
Individually impaired 6,555 -
Portfolio impaired 14,779 -
Total 5,872,864 65,816
Less: allowance for impairment (7,494) -
Total 5,865,370 65,816
Individually impaired (1,825) -
Collectively impaired* (5,669) -
Total (7,494) -
* The collectively impaired provision includes provisions held against loans
which are included in the neither past due nor impaired, the past due but not
impaired and the Portfolio impaired categories shown above
Past due but not impaired
Late processing and other administrative delays on the side of the borrower
can lead to a financial asset being in early past due but not impaired. The
average debt to value of exposures which are past due but not impaired is 57%
and the total collective impairment for past due and not impaired is £1
million.
Gross amount of loans and advances by class to customers that were past due
but not impaired were as follows:
30 June 2017
Mortgages Corporate Other Total
£'000 £'000 £'000 £'000
Past due less than 7 days 8,211 29,771 1,091 39,073
Past due 7-30 days 5,725 8,690 569 14,984
Past due 31-60 days 8,132 1,699 876 10,707
Past due 61-90 days 1,864 72 553 2,489
Over 90 days - - - -
Total 23,932 40,232 3,089 67,253
31 December 2016
Mortgages Corporate Other Total
£'000 £'000 £'000 £'000
Past due less than 7 days 15,994 45,237 958 62,189
Past due 7-30 days 5,859 14,710 1,984 22,553
Past due 31-60 days 2,051 96 631 2,778
Past due 61-90 days 599 60 461 1,120
Over 90 days - 171 - 171
Total 24,503 60,274 4,034 88,811
Residential mortgage lending
The table below stratifies credit exposures from mortgage loans and advances
to customer by ranges of loan-to-value (LTV) ratio. LTV is calculated as the
ratio of the gross amount of the loan to the value of the collateral. The
gross amounts exclude any impairment allowance. The value of the collateral
for residential mortgage loans is based on the collateral value at
origination, updated every 6 months based on changes in house price indices.
The increase in concentration for the LTV ratio > 90% reflects the acquisition
of a portfolio of UK mortgages on 2 June 2017. The portfolio has a similar
credit risk profile to our organic book and good payment performance has been
observed over time.
30 June 2017 31 December 2016
LTV ratio £'000 £'000
Less than 50% 1,422,981 1,121,993
51-70% 2,200,116 1,635,626
71-90% 1,211,129 756,025
91-100% 60,660 41,224
More than 100% 53,495 49,723
Total 4,948,381 3,604,591
The general credit worthiness of a corporate customer tends to be the most
relevant indicator of credit quality of a loan extended to it. However,
collateral provides additional security and the Group generally requests that
corporate borrowers provide it. The Group usually takes collateral in the
form of a first charge over real estate (retail and commercial), floating
charges over all corporate assets and other liens and guarantees.
Concentrations of credit risk
The Group monitors concentrations of credit risk by sector for commercial term
loans exposure. The Group risk appetite is set at the beginning of every year
and monitored by a committee of the Board.
30 June 2017 31 December 2016
Gross balance£'000 Concentration% Gross balance£'000 Concentration%
Real estate (rent, buy and sell) 1,371,165 59 1,064,194 57
Legal, Accountancy & Consultancy 281,493 12 276,164 15
Health & Social Work 200,451 9 177,931 10
Hospitality 142,966 6 95,600 5
Real estate (management of) 80,097 4 90,240 5
Retail 57,789 3 37,009 2
Construction 50,190 2 58,204 3
Investment and unit trusts 19,619 1 20,448 1
Recreation, cultural and sport 11,485 0 8,643 0
Real estate (development) 10,486 0 2,036 0
Education 2,705 0 1,484 0
Other 92,353 4 42,151 2
Total 2,320,799 100 1,874,104 100
The debt to value ("DTV") ratio is calculated as the ratio of the gross
outstanding amount of a loan to the indexed value of the collateral. The
commercial portfolio DTV is below 60% and the proportion of the exposure with
DTV >80% has slightly increased in H1 2017 compared to December 2016.
The Group experienced an increase in commercial non-performing loans ("NPLs").
Each NPL case is individually managed and specific (individual) provisions
are calculated and reviewed by the Group's Provisions Committee. Whilst
commercial NPLs have increased over the period, the majority of the increase
relates to loans which are well collateralised and any loss in the case of
eventual default is expected to be minimal. As a result, impairment
provisions have not increased to the same extent as NPLs.
30 June 2017 31 December 2016
£'000 £'000
Total commercial lending 2,611,449 2,087,232
% of total lending 34% 36%
Average DTV 57% 57%
DTV > 80% 7% 6%
NPL ("non-performing-loan") ratio* 0.3% 0.1%
*The non-performing-loan ratio is calculated as the ratio of the gross
outstanding amount of loans with more than three instalments unpaid to the
gross outstanding amount
Movement in allowances for impairment
£'000
Allowance for impairment at 1 January 2017 (7,494)
Write offs 866
Increase in impairment allowance (3,742)
Allowance for impairment at 30 June 2017 (10,370)
£'000
Allowance for impairment at 1 January 2016 (6,783)
Write offs 351
Reversal of impairment 1,620
Increase in impairment allowance (3,442)
Allowance for impairment at 30 June 2016 (8,254)
12. Investment securities
Level 1 Level 2 Total
£'000 £'000 £'000
Investment securities held at fair value (recurring fair value measurement)
Financial investments: available for sale
As at 30 June 2017 308,201 270,674 578,875
As at 31 December 2016 274,027 330,100 604,127
The classification of a financial instrument is based on the lowest level
input that is significant to the fair value measurement in its entirety. The
two levels of the fair value hierarchy are defined below.
Quoted market prices - Level 1
Financial instruments are classified as Level 1 if their value is observable
in an active market. Such instruments are valued by reference to unadjusted
quoted prices for identical assets or liabilities in active markets where the
quoted price is readily available, and the price represents actual and
regularly occurring market transactions on an arm's length basis. An active
market is one in which transactions occur with sufficient volume and frequency
to provide pricing information on an ongoing basis.
Valuation technique using observable inputs - Level 2
Inputs other than quoted prices included within Level 1 that are observable
for the asset, either directly (as prices) or indirectly (derived from
prices).
Reclassification between categories
On 17 February, £33.2 million of financial assets classified as available for
sale were reclassified as held to maturity. On 18 April, £60.4 million of
financial assets classified as available for sale were reclassified as held to
maturity. The carrying amount (excluding accrued interest) and fair value of
the assets at 1 January 2017, 17 February 2017, 18 April 2017 and 30 June 2017
were as follows:
Carrying amount Fair value
£'000 £'000
As at 1 Jan 2017 97,188 97,188
Amounts reclassified as at 17 Feb 2017 33,178 33,178
Amounts reclassified as at 18 Apr 2017 60,354 60,354
At 30 Jun 2017 99,663 99,911
A fair value loss of £3.7 million was recognised with respect to the
reclassified assets in 2017; had these assets not been reclassified, an
additional fair value gain of £6.4 million would have been recognised in other
comprehensive income. The effective interest rates on available for sale
assets reclassified to held to maturity at 1 January 2017 and 30 June 2017
ranged from 1.9% to 1.75%, with all cash flows expected to be recoverable. As
at 30 June 2017 and 31 December 2016, financial investments classified as held
to maturity were as follows:
Carrying amount Fair value
£'000 £'000
As at 30 June 2017 3,058,253 3,098,864
At 31 December 2016 2,622,588 2,651,136
13. Property, plant and equipment
Leasehold improvements Freehold land and buildings Fixtures fittings and equipment IT Hardware Investment Property Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation
1 January 2017 171,056 84,571 20,817 30,731 - 307,175
Additions 12,739 22,096 1,663 1,256 4,077 41,831
Disposals - - (115) - - (115)
Transfers (217) (8,266) 160 - 8,323 -
Other write offs (186) (53) - - - (239)
Reclassifications (69) (372) - - - (441)
30 June 2017 183,323 97,976 22,525 31,987 12,400 348,211
Accumulated depreciation
1 January 2017 21,982 3,376 10,937 24,190 - 60,485
Charge for the period 4,149 492 1,807 2,322 40 8,810
Disposals - - (70) - - (70)
Transfers 52 (64) 12 - - -
Other write offs (31) (13) - - - (44)
Reclassifications (5) - - - - (5)
30 June 2017 26,147 3,791 12,686 26,512 40 69,176
Net book value at 30 June 2017 157,176 94,185 9,839 5,475 12,360 279,035
Cost or valuation
1 January 2016 156,238 8,273 17,400 27,439 - 209,350
Additions 12,269 20,931 1,067 845 - 35,112
Transfers 2,030 - (2,030) - - -
30 June 2016 170,537 29,204 16,437 28,284 - 244,462
Accumulated depreciation
1 January 2016 17,110 - 7,920 19,063 - 44,093
Charge for the period 3,774 - 1,239 2,700 - 7,713
30 June 2016 20,884 - 9,159 21,763 - 51,806
Net book value at 30 June 2016 149,653 29,204 7,278 6,521 - 192,656
Net book value at 31 December 2016 149,074 81,195 9,880 6,541 - 246,690
During the period, the group re-classified £8.3 million existing property
assets from the Land and Buildings category to Investment Property, and a
portion of newly acquired assets were designated as Investment Property.
These assets relate to the portions of our freehold sites which are not
utilised by the group and are leased to third parties. The Group's investment
properties are carried at cost less depreciation. Depreciation is calculated
on a basis consistent with that applied to land and buildings as disclosed in
the 2016 Annual Report and Accounts.
14. Intangibles
Goodwill Customer contracts Software Total
£'000 £'000 £'000 £'000
Cost or valuation
1 January 2017 4,140 600 101,797 106,537
Additions - - 31,310 31,310
Other write offs - - (30) (30)
Reclassification - - 1,545 1,545
30 June 2017 4,140 600 134,622 139,362
Amortisation
1 January 2017 - 205 13,817 14,022
Charge for the period - 30 7,072 7,102
Reclassification - - 322 322
30 June 2017 - 235 21,211 21,446
Net book value at 30 June 2017 4,140 365 113,411 117,916
Goodwill Customer contracts Software Total
Cost or valuation
1 January 2016 4,140 600 56,745 61,485
Additions - - 15,461 15,461
30 June 2016 4,140 600 72,206 76,946
Amortisation
1 January 2016 - 145 7,097 7,242
Charge for the period - 30 2,374 2,404
30 June 2016 - 175 9,471 9,646
Net book value at 30 June 2016 4,140 425 62,735 67,300
Net book value at 31 December 2016 4,140 395 87,980 92,515
15. Share capital
As at 30 June 2017 the Group had 80.4 million ordinary shares of 0.0001 pence
(31 December 2016: 80.3m) in issue.
During the six months to 30 June 2017 the Group issued 65,000 ordinary shares
all of which relate to the exercise of previously awarded share options.
Half year to30 June 2017 Year to31 December 2016
£'000 £'000
Called up ordinary
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