REG - Palace Capital PLC - Half-year Report <Origin Href="QuoteRef">PCA.L</Origin> - Part 2
21/11/2016 07:06
- Part 2: For the preceding part double click ID:nRSU6532Pa
Unaudited 30 September2016 Unaudited30 September2015 Audited31 March 2016
Number of ordinary shares of 10p each issued as at the end of the period 25,650,692 25,781,229 25,781,229
Number of unexpired share options 10,514 20,730 20,730
Number of diluted ordinary shares 25,661,206 25,801,959 25,801,959
Basic NAV per ordinary share 419p 407p 414p
Diluted NAV per ordinary share 419p 407p 414p
EPRA NAV per ordinary share 419p 407p 414p
EPRA NNNAV per ordinary share 419p 407p 414p
8 Investment Properties
Freehold Investment properties Leasehold Investment properties Total
£000 £000 £000
At 1 April 2015 84,568 18,420 102,988
Arising on acquisition of subsidiary 44,880 - 44,880
Additions - new properties 18,653 4,886 23,539
Additions - refurbishments 1,149 33 1,182
Gains on revaluation of investment properties 1,840 1,780 3,620
Disposals (1,667) - (1,667)
At 31 March 2016 149,423 25,119 174,542
Additions - new properties 10,950 - 10,950
Additions - refurbishments 2,116 71 2,187
Gains on revaluation of investment properties 205 (173) 32
Disposals (2,924) - (2,924)
At 30 September 2016 159,770 25,017 184,787
Investment properties are stated at fair value based upon external valuations
and is inherently subjective. The fair value represents the amount at which
the assets could be exchanged between a knowledgeable, willing buyer and a
knowledgeable, willing seller in an arms-length transaction at the date of
valuation, in accordance with IFRS 13. The fair value of each of the
properties has been assessed by the directors. In determining the fair value
of investment properties, the directors make use of historical and current
market data as well as existing lease agreements
As a result of the level of judgement used in arriving at the market
valuations, the amounts which may ultimately be realised in respect of any
giving property may differ from the valuations shown in the statement of
financial position.
At 30 September 2016, the Group's freehold and leasehold investment properties
were externally valued by Royal Institution of Chartered Surveyors ("RICS")
registered independent valuers. A reconciliation of the valuations carried out
by the external valuers to the carrying values shown in the balance sheet was
as follows:
Unaudited 30 September2016£000 Unaudited30 September2015£000 Audited31 March 2016£000
Fair value 183,650 139,315 173,441
Adjustment in respect of minimum payment
under head leasesincluded as a liability 2,076 2,076 2,076
Less lease incentive balance in prepayments (939) (1,041) (975)
Carrying value 184,787 140,350 174,542
Investment properties with a carrying value of £161,656,761 (31 March 2016:
£151,065,990) are subject to a first charge to secure the Group's bank loans
amounting to £81,864,383 (31 March 2016: £72,678,233).
Valuation process
The valuation reports produced by the external valuers are based on
information provided by the Group such as current rents, terms and conditions
of lease agreements, service charges and capital expenditure. This information
is derived from the Group's financial and property management systems and is
subject to the Group's overall control environment. In addition, the valuation
reports are based on assumptions and valuation models used by the valuers. The
assumptions are typically market related, such as yields and discount rates,
and are based on their professional judgment and market observations. Each
property is considered a separate asset, based on its unique nature,
characteristics and the risks of the property.
The executive director responsible for the valuation process, verifies all
major inputs to the external valuation reports, assesses the individual
property valuation changes from the prior period valuation report and holds
discussions with the external valuers. When this process is complete, the
valuation report is recommended to the Audit Committee, which considers it as
part of its overall responsibilities.
The key assumptions made in the valuation of the group's investment properties
are:
- The amount and timing of future income streams;
- Anticipated maintenance costs and other landlord's liabilities; and
- An appropriate yield.
Valuation technique
The valuations reflect the tenancy data supplied by the group along with
associated revenue costs and capital expenditure. The fair value of the
commercial investment portfolio has been derived from capitalising the future
estimated net income receipts at capitalisation rates reflected by recent
arm's length sales transactions.
9 Trade and other receivables
Unaudited 30 September2016£000 Unaudited30 September2015£000 Audited31 March 2016£000
Current
Trade receivables 1,882 3,197 2,484
Prepayments and accrued income 758 861 738
Other taxes - - 68
Other debtors 530 86 37
3,170 4,144 3,327
Non-current
Prepayments and accrued income 809 935 825
809 935 825
10 Current trade and other payables
Unaudited 30 September2016£000 Unaudited30 September2015£000 Audited31 March 2016£000
Trade payables 850 184 638
Accruals 3,155 1,967 1,807
Deferred rental income 1,491 2,756 2,605
Taxes 2,396 2,219 1,698
Other payables 60 6 67
7,952 7,132 6,815
11 Borrowings
Unaudited 30 September2016£000 Unaudited30 September2015£000 Audited31 March 2016£000
Current borrowings 3,241 850 2,233
Non-current borrowings 77,519 49,678 69,711
Total borrowings 80,760 50,528 71,944
Non-current borrowings
Secured bank loans drawn 78,623 50,242 70,445
Unamortised facility fees (1,104) (564) (734)
77,519 49,678 69,711
The maturity profile of the Group's debt was as follows
Unaudited 30 September2016£000 Unaudited30 September2015£000 Audited31 March 2016£000
Within one year 3,241 850 2,233
From one to two years 2,036 2,050 17,068
From two to five years 63,517 43,000 53,377
From five to ten years 13,070 - -
Total borrowings 81,864 45,900 72,678
Facility and arrangement fees
As at 30 September 2016
Secured borrowings Margin overLIBOR % Maturity date Facility drawn£000 Unamortised facility fees£000 Loan balance£000
Scottish Widows 2.10% Jul 2026 15,250 (236) 15,014
National Westminster Bank plc 2.50% Mar 2021 26,168 (346) 25,822
Nationwide Building Society 2.45% Nov 2020 19,167 (181) 18,986
Santander Bank plc 2.25% Jun 2020 15,887 (276) 15,611
Lloyds Bank plc 2.10% Apr 2019 4,187 (55) 4,132
Close Brothers Group plc 4.00% Sep 2017 1,205 (10) 1,195
81,864 (1,104) 80,760
The Group has unused loan facilities amounting to £3.6m (31 March 16: £8.0m).
Interest is charged on this facility at a rate of 1.25% and is payable
quarterly. This facility is secured on the investment properties held by
Property Investment Holdings Limited and Palace Capital (Properties) Limited.
12 Share capital
Authorised, issued and fully paid share capital is as follows:
Unaudited 30 September2016 Unaudited30 September2015 Audited31 March 2016
Ordinary 10p shares 25,800,279 25,781,229 25,781,229
Deferred 90p shares - 315,937 315,937
Share capital - number of shares in issue 25,800,279 26,097,166 26,097,166
Share capital - £ 2,580,028 2,862,466 2,862,446
17 June 2016 The Company purchased 91,587 of its own ordinary shares of 10p
each at an average price of 360 pence per ordinary share. On 20 June 2016, it
purchased 58,000 of its own ordinary shares of 10p each at an average price of
360 pence per ordinary share. All of the purchased shares are held as treasury
shares. Additional fees of £2,000 were incurred on the purchase of these
treasury shares.
On 20 June 19,050 warrants were exercised for 19,050 new ordinary shares in
the Company at a price of 200p thereby generating cash proceeds of £38,100 for
the Company. Following the exercise of the warrants, the Company has no
further warrants outstanding.
A reduction of the Company's share capital by way of cancellation of the
Deferred Shares was carried out and completed on 31 August 2016. The Company's
issued share capital included 315,938 Deferred Shares as at 31 March 2016. The
nominal value of the Deferred Shares was part of the capital of the Company
and therefore not distributable. The Deferred Shares were created as a result
of the reorganisation of the Company's share capital on 18 October 2013 when
each issued ordinary share of £0.01 was consolidated and converted into one
new Ordinary Share of £0.10 and one Deferred Share of £0.90. The Deferred
Shares carried no voting or dividend rights and only very limited rights to
participate in the capital of the Company upon a winding-up. These rights are
such as to make the Deferred Shares virtually worthless in the hands of the
holder.
In the Company's books the capital paid up on the Deferred Shares represented
£284,244, being the aggregate nominal value of all the Deferred Shares.
Cancelling the Deferred Shares with the prior approval of Shareholders by way
of a special resolution and the subsequent approval of the Court has resulted
in the removal of them from the Company's balance sheet and permitted an
amount of £284,244 to be released to the Capital Redemption Reserve, which may
be used to reduce or eliminate losses (if any) arising on the profit and loss
account, and will also be retained for the protection of the Company's
creditors that are in existence as at the date of the Capital Reduction.
Additional fees of £8,786 were incurred as a result of the cancellation of the
Deferred Shares and have been recognised as a debit against the Capital
Redemption Reserve.
The Capital Reduction took effect at the order of the Court confirming the
Capital Reduction and a statement of capital approved by the Court has since
been registered with the Registrar of Companies.
Movement in ordinary authorised share capital Price per share pence Number of ordinary shares issued000s Total number of shares000s
As at 1 Apr 2015 20,225,673
Equity issue June 2015 360 5,555,556
As at 30 Sep 2015 25,781,229
As at 1 Apr 2016 25,781,229
Exercise of warrants June 2016 200 19,050
As at 30 Sep 2016 25,800,279
Share buy-back by company June 2016 360 (149,587)
Total number of shares excluding the number held in treasury 25,650,696
13 Retained earnings & Reserves
For the purpose of preparing the consolidated financial statement of the
Group, the following reserves are held:
- Share Capital represents the nominal value of the issued share capital
of Palace Capital plc
- Share Premium represents the excess over nominal value of the fair
value consideration received for equity shares net of expenses of the share
issue
- In June Palace Capital plc purchased 149,587 of its own shares at an
average price of £3.60. All these shares are held in treasury.
- The Merger Reserve represents the excess over nominal value of the
fair value consideration for the acquisition of subsidiaries satisfied by the
issue of shares in accordance with S612 of the Companies Act 2006.
- The Capital redemption reserve represents the cancellation of Deferred
Shares and the removal of them from the Company's balance sheet.
14 Post balance sheet events
There have been no post balance sheet events that would require disclosure or
adjustments to these financial statements.
This information is provided by RNS
The company news service from the London Stock ExchangeRecent news on Palace Capital
See all newsREG - Palace Capital PLC - Boulton House disposal
AnnouncementREG - Palace Capital PLC - DISPOSALS AND DEBT UPDATE
AnnouncementREG - Palace Capital PLC - Total Voting Rights
AnnouncementREG - Palace Capital PLC - Dividend Declaration
AnnouncementREG - Palace Capital PLC - Holding(s) in Company
Announcement