REG - Palace Capital PLC - Unaudited preliminary annual results <Origin Href="QuoteRef">PCA.L</Origin> - Part 2
16/07/2015 08:10
- Part 2: For the preceding part double click ID:nRSb4315Oa
Goodwill is tested annually for impairment and carried at cost less accumulated
impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include
the carrying amount of goodwill relating to the entity sold.
EVENTS AFTER THE BALANCE SHEET DATE
Post year-end events that provide additional information about a company's position at the balance sheet date and are
adjusting events are reflected in the financial statements. Post year-end events that are not adjusting events are
disclosed in the notes when material.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these estimates. Information about such judgements
and estimation is contained in the accounting policies or the notes to the accounts, and the key areas are summarised
below.
Investment properties
The key source of estimation uncertainty rests in the values of property assets, which significantly affects the value of
investment properties in the Statement of Financial Position. The investment property portfolio is carried at fair value,
which requires a number of judgements and estimates in assessing the qualities of the Group's assets relative to market
transactions. The approach to this valuation and the amounts affected are set out in the accounting policies and note 12.
The Group has valued the investment properties at fair value. To the extent that any future valuation affects the fair
value of the investment properties, this will impact on the Group's results in the period in which this determination is
made.
Deferred tax
In determining the quantum of deferred tax assets to be recognised, judgement is required in excessing the extent to which
it is probable that future taxable profit will arise in the companies concerned. Management use forecasts of future
taxable profits and make assumptions on growth rates for each entity in assessing the recoverability of assets recognized.
1 SEGMENTAL REPORTING
For the purpose of IFRS 8, the chief operating decision maker ("CODM") takes the form of the two executive Directors, the
Chairman and the Company Secretary (the Group's Executive Committee). The Group's Executive Committee are of the opinion
that the business of the Group is as follows.
The principal activity of the Group was to invest in entities operating within the property sector.
The internal financial reports received by the Group's Executive Committee contain financial information broken down into
three operating portfolios. Therefore, for the purposes of IFRS 8, each property portfolio is considered to be a separate
operating segment in that its performance is monitored.
All of the Group's properties are based in the UK. No geographical grouping is contained in any of the internal financial
reports provided to the Group's Executive Committee and, therefore, no geographical segmental analysis is required by IFRS
8.
Operating segments
The following tables present revenue, operating profit and net assets for the Group's segments for the periods ended 31
March 2015 and 31 March 2014.
Revenue - type Year ended31 March 2015 14 monthsended31 March 2014
£ £
Rents received from investment properties 8,180,784 3,178,285
Management fees 455,874 73,533
Total Revenue 8,636,658 3,251,818
No single tenant accounts for more than 10% of the Groups total revenue.
Operating profit - operating segmentYear ended 31 March 2015 Sequel PIH Hockenhull Head office Total
£ £ £ £ £
Rent and Service charge income 6,685,669 1,758,993 191,996 - 8,636,658
Property Operating expenses (935,731) (260,107) (4,002) - (1,199,840)
Administration expenses (261,047) (193,521) (18,147) (965,976) (1,438,691)
Profit on disposal of investment properties 134,216 43,482 - - 177,698
Gains on revaluation of investment property 6,649,988 3,088,731 30,000 - 9,768,719
Costs of acquisition - - - (638,668) (638,668)
Total Operating profit 12,273,095 4,437,578 199,847 (1,604,644) 15,305,876
Other interest receivable 8,500 101 27 9,720 18,348
Finance costs (1,000,810) (334,828) (68,920) (11,419) (1,415,977)
Profit/(loss) before tax 11,280,785 4,102,851 130,954 (1,606,343) 13,908,247
Tax (charge)/credit on profit - 226,971 (20,412) (100,000) 106,559
Profit/(loss) after tax 11,280,785 4,329,822 110,542 (1,706,343) 14,014,806
Operating profit - operating segment14 month period ended 31 March 2014 Sequel PIH Hockenhull Head office Total
£ £ £ £ £
Rent and Service charge income 3,038,153 - 213,665 - 3,251,818
Property Operating expenses (645,217) - (2,964) - (648,181)
Administration expenses (148,030) - (25,860) (474,900) (648,790)
Profit on disposal of investment properties 786,616 - - - 786,616
Gains on revaluation of investment property 19,285,531 - 215,000 - 19,500,531
Costs of acquisition - - - (516,569) (516,569)
Total Operating profit 22,317,053 - 399,841 (991,469) 21,725,425
Other interest receivable 355 - 53 20,111 20,519
Finance costs (470,954) - (83,566) (38,680) (593,200)
Profit/(loss) before tax 21,846,454 - 316,328 (1,010,038) 21,152,744
Tax payable on profit - - (18,859) 100,000 81,141
Profit/(loss) after tax 21,846,454 - 297,469 (910,038) 21,233,885
Net operating assets - operating segment31 March 2015 Sequel PIH Hockenhull Head office Total
£ £ £ £ £
Assets
Investment property 65,808,831 34,919,445 2,260,000 - 102,988,276
Goodwill - - 5,910 - 5,910
Tangible fixed assets - 34 - 51,367 51,401
Deferred tax - 500,000 - - 500,000
Trade and other receivables 2,269,615 942,784 10,655 1,075,680 4,298,734
Cash at bank and in hand 6,996,188 203,111 18,524 5,060,714 12,278,537
Total segmental assets 75,074,634 36,565,374 2,295,089 6,187,761 120,122,858
Liabilities
Bank borrowings 19,424,310 15,194,194 1,187,997 - 35,806,501
Other current liabilities 1,922,448 1,045,609 32,752 86,501 3,087,310
Obligations under finance leases 1,213,533 - - - 1,213,533
Total segmental liabilities 22,560,291 16,239,803 1,220,749 86,501 40,107,344
Net assets 52,514,343 20,325,571 1,074,340 6,101,260 80,015,514
Net operating assets - operating segment31 March 2014 Sequel PIH Hockenhull Head office Total
£ £ £ £ £
Assets
Investment property 57,210,168 - 2,230,000 - 59,440,168
Goodwill - - 5,910 - 5,910
Tangible fixed assets - - - 205 205
Deferred tax - - - 100,000 100,000
Trade and other receivables 2,432,807 - 3,176 40,807 2,476,790
Cash at bank and in hand 3,938,379 - 52,755 1,132,203 5,123,337
Total segmental assets 63,581,354 - 2,291,841 1,273,215 67,146,410
Liabilities
Bank borrowings 17,093,560 - 1,199,959 - 18,293,519
Other loans - - - 290,619 290,619
Other current liabilities 2,867,796 - 24,158 79,469 2,971,424
Obligations under finance leases 1,215,055 - - - 1,215,055
Total segmental liabilities 21,176,411 - 1,224,117 370,088 22,770,616
Net assets 42,404,943 - 1,067,724 903,127 44,375,794
2 Reconciliation of OPERATING PROFIT
Reconciliation of operating profit to cash utilised in operations
Year ended 31 March 2015 14 month period ended 31 March 2014
£ £
Profit before taxation 13,908,247 21,152,744
Finance income (18,348) (20,519)
Finance costs 1,415,977 593,200
Gains on revaluation of investment property portfolio (9,768,719) (19,500,531)
Profit on disposal of investment properties (177,698) (786,616)
Depreciation 9,952 242
Share based payments 113,817 11,667
Increase in receivables (281,091) (982,382)
Increase/(decrease) in payables (813,995) 829,567
Net cash utilised in operations 4,388,142 1,297,372
3 OTHER INTEREST RECEIVABLE AND SIMILAR INCOME
Year ended 31 March 2015 14 month period ended 31 March 2014
£ £
Profit recognised on acquisition of loan at below par - 20,111
Bank interest received 18,348 408
18,348 20,519
20,519
4 Interest payable AND SIMILAR CHARGES
Year ended 31 March 2015 14 month period ended 31 March 2014
£ £
Interest on bank loans 1,284,219 507,714
Interest on other loans 11,419 32,256
Interest on finance leases 120,339 46,806
Preference share dividend - 6,424
1,415,977 593,200
593,200
4.1
5 PROFIT FOR THE PERIOD
a) The Group's profit for the period is stated after charging the following:
Year ended 31 March 2015 14 month period ended 31 March 2014
£ £
Depreciation of tangible fixed assets: 9,952 242
Auditor's remuneration:
Fees payable to the auditor for the audit of the Group's annual accounts 27,500 30,000
Fees payable to the auditor for the audit of the subsidiary annual accounts 10,000 -
Fees payable to the auditor and its related entities for other services:Corporate advisory services 50,000 35,098
Tax services - 3,000
87,500 68,098
68,098
Amounts payable to BDO LLP (2014: Crowe Clark Whitehill) in respect of audit and non-audit services are disclosed in the
table above.
b) The Group's cost of sales comprise the following:
Year ended 31 March 2015 14 month period ended 31 March 2014
£ £
Void property costs 613,604 595,451
Repairs and maintenance expenses 403,569 52,730
Legal and consultancy 45,568 -
Service charge expenses 137,099 -
1,199,840 648,181
648,181
c) The Group's administrative expenses comprise the following:
Year ended 31 March 2015 14 month period ended 31 March 2014
£ £
Staff costs 508,227 240,343
Share based payments 113,817 11,667
Legal & Professional fees 176,576 102,426
Accounting and audit fees 86,057 52,000
Rent, Rates and other office costs 87,069 -
Property management fees 163,363 70,617
Bad debt expense 24,647 303
PR and marketing costs 112,815 35,157
Other overheads 156,168 136,035
Depreciation 9,952 242
1,438,691 648,790
648,790
6 EMPLOYEES AND DIRECTORS' REMUNERATION
Staff costs during the period were as follows:
Year ended 31 March 2015 14 month period ended 31 March 2014
£ £
Non-Executive Directors' fees 67,500 42,473
Wages and salaries 368,415 173,086
Pensions 23,699
Social security costs 48,613 24,784
Share based payments 113,817 11,667
622,044 252,010
252,010
The average number of employees of the company during the period was:
Year ended 31 March 2015 14 month period ended 31 March 2014
Number Number
Directors and management 6 5
5
Key management are the Group's directors. Remuneration in respect of key management was as follows:
Year Ended 31 March 2015 14 month period ended 31 March 2014
£ £
Short-term employee benefits:
Emoluments for qualifying services 342,300 188,780
Social security costs 40,476 22,192
Share based payments 102,060 9,625
484,836 220,597
220,597
There are no retirement benefits accruing to any of the Directors.
The amounts set out above include remuneration in respect of the highest paid director as follows:
Year 31 ended March 2015 14 month period ended 31 March 2014
£ £
Short-term employee benefits:
Emoluments for qualifying services 193,967 119,230
Share based payments 68,040 6,417
262,007 125,647
125,647
7 TAXATION
Year ended 31 March 2015 14 month period ended 31 March 2014
£ £
Current income tax charge 20,412 18,859
Deferred tax (126,971) (100,000)
Tax credit (106,559) (81,141)
(81,141)
Year ended 31 March 2015 14 month period ended 31 March 2014
£ £
Profit on ordinary activities before tax 13,908,247 21,152,744
Based on profit for the period:
Tax at 21.0% (2014: 23%) 2,920,732 4,865,131
Effect of:
Expenses not deductible for tax purposes 134,120 142,518
Capital losses and indexation used in the period (2,090,323) (4,666,044)
Capital allowances in excess of depreciation (252,760) (45,258)
Other adjustments 40,285 (5,372)
Deferred tax not previously recognised (126,971) (100,000)
Trading losses used in the period (731,642) (272,116)
Tax credit for the period (106,559) (81,141)
Deferred taxes at 31 March relates to the following:
2015 2014
£ £
Deferred tax assets
Losses available to carry forward 500,000 100,000
Deferred tax asset 500,000 100,000
100,000
2015 2014
£ £
Deferred tax asset - brought forward 100,000 -
Deferred tax credit for the period 126,971 100,000
Deferred tax recognised on acquisition 273,029 -
Deferred tax asset - carried forward 500,000 100,000
100,000
At 31 March 2015, the Group had tax losses of £7,117,799 (2014: £1,225,952) available to carry forward to future periods. A
deferred tax asset of £500,000 (2014: £100,000) has been recognised as it is expected to be utilised in the foreseeable
future and a deferred tax asset of £923,560 (2014: £157,450) has not been recognised in the financial statements due to the
uncertainty as to whether it can be utilised against future profits.
Capital allowances have been claimed on improvements to investments properties amounting to £8,676,012 (2014: £7,133,720).
A deferred tax liability amounting to £1,735,202 (2014: £1,327,337) has not been recognised in the financial statements as
it is expected that they will not reverse when the properties are disposed of.
A deferred tax liability on the revaluation of investment properties to fair value has not been provided as once the
availability of capital losses, indexation allowances and the 1982 valuations for certain properties have been taken into
account it is anticipated that no capital gain tax would be payable if the properties were disposed of at their fair value.
As at 31 March 2015 the Group had approximately £6,900,000 (2014: £474,219) of capital losses to carry forward.
8 EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share has been calculated on profit after tax attributable to ordinary shareholders for the period (as
shown on the Consolidated Statement of Comprehensive Income) and the weighted average number of ordinary shares in issue
during the period (see below table).
Diluted earnings per share
Diluted earnings per share has been calculated on profit after tax attributable to ordinary shareholders for the period (as
shown on the Consolidated Income Statement) and the diluted weighted average number of ordinary shares in issue during the
period (see below table):
Year ended 31 March 2015 14 month period ended 31 March 2014
£ £
Profit after tax attributable to ordinary shareholders for the period 14,014,806 21,233,885
21,233,885
Weighted average number of shares for basic earnings per share 17,010,762 4,920,006
Dilutive effect of share options 478,140 344,294
Weighted average number of shares for diluted earnings per share 17,488,902 5,264,300
EARNINGS PER ORDINARY SHARE;Basic 82.4p 431.6p
Diluted 80.1p 403.4p
Diluted
80.1p
403.4p
Adjusted diluted earnings per share
In order to give a truer reflection of the underlying profits of the Company the directors have decided to present an
adjusted earnings per share calculation excluding costs of acquisitions, revaluation gains and gains on property
disposals.
Year ended 31 March 2015 14 month period ended 31 March 2014
£ £
Profit after tax attributable to ordinary shareholders for the period 14,014,806 21,233,885
Costs of acquisition 638,668 516,569
Gains on revaluation of investment property portfolio (9,768,719) (19,500,531)
Profit on disposal of investment properties (177,698) (786,616)
Adjusted profit after tax for the period 4,707,057 1,463,307
ADJUSTED EARNINGS PER ORDINARY SHARE;Basic 27.7p 29.7p
Diluted 26.9p 27.8p
26.9p
27.8p
9 NET ASSETS PER SHARE
2015 2014
£ £
Net assets at the end of the period 80,015,514 44,375,794
Diluted net assets at end of the period 80,124,698 45,244,308
80,124,698
45,244,308
Number of ordinary issued shares issued at the end of the period 20,225,673 12,440,937
Number of ordinary issued shares for diluted net assets per share 20,674,427 13,252,688
NET ASSETS PER ORDINARY SHAREBasic 395.6p 356.7p
Diluted 387.6p 341.4p
Diluted
387.6p
341.4p
The diluted net assets and the number of diluted ordinary issued shares at the end of the period assumes that all the
outstanding options at the period end are exercised at the option price.
10 INTANGIBLE FIXED ASSETS
Goodwill
£
Cost
At 1 February 2013 and 31 March 2014 5,910
On acquisitions (note 11) -
Carrying Value at 31 March 2015 5,910
5,910
11 BUSINESS COMBINATIONS
Acquisition in year ended 31 March 2015.
On 26 August 2014 the group acquired 100% of the share capital of Property Investment Holdings Limited (PIH) for a
consideration of £3,613,828. The consideration was satisfied by issuing 1,103,459 ordinary 10p shares at a fair value
price of £3.275. PIH is a property investment company which was acquired to expand the Group's property portfolio.
Carrying value at acquisition date Adjustments Fair value at acquisition date
£ £ £
Investment properties 29,385,000 2,356,099 31,741,099
Tangible fixed assets 73 - 73
Deferred tax asset - 273,029 273,029
Receivables and prepayment 26,112 278,901 305,013
Cash at bank and in hand 268 - 268
Payables and other creditors (732,378) - (732,378)
Bank loans and overdraft (27,973,276) - (27,973,276)
Deferred tax (401,342) 401,342 -
Net assets 304,457 3,309,371 3,613,828
Consideration 3,613,828
Goodwill on acquisition -
The acquired subsidiary contributed £4,102,851 to the profit before tax of the Group. If these acquisitions had occurred on
1 April 2014, Group revenue would have been an estimated £9.7m and Group profit before tax would have been an estimated
£14.4m. In determining these amounts, management has assumed that the fair value adjustments that arose on the date of
acquisition would have been the same if the acquisition occurred on 1 April 2014.
Capital allowances amounting to £1,744,967 have been claimed by PIH on improvements to investments properties. A deferred
tax liability amounting to £348,993 has not been recognised in the fair value as it is expected that they will not reverse
when the properties are disposed of.
Deferred tax asset amounting to £273,029 was recognised as a fair value adjustment at the acquisition date being
management's estimate, based on budgets and forecasts, of the future utilisation of tax losses of approximately £9m that
were available to carry forward following the refinancing of the bank loans of the PIH which took place at acquisition.
The deferred tax asset was increased to £500,000 at 31 March 2015 as a result of the restructuring of PIH and the repayment
of £10m of intra group loans which has resulted in increasing the anticipated future annual profits of PIH.
No deferred tax has been recognised on the adjustments to fair value as a result of the historical cost of the investment
properties exceeding their fair value.
The fair value of the investment properties at acquisition was based on a valuation performed at the time of the
acquisition amounting to £32,020,000 obtained from DTZ Debenham Tie Leung Limited less a lease incentive balance which has
been included in prepayments amounting to £278,901.
A fair value adjustment to prepayments amounting to £278,901 was made to bring the revenue recognition policy of PIH into
line with that of the Group so that the rental income from investment properties leased out under operating leases is
recognised in the Income Statement on a straight-line basis over the term of the lease.
Acquisition related costs
The Group incurred acquisition related costs of £638,668 related to professional fees paid for due diligence, general
professional fees and legal related costs. These costs have been included in non-underlying administrative expenses in the
Group's consolidated income statement.
Acquisition in 14 month period ended 31 March 2014.
On 21 October 2013 the Group acquired 100% of the share capital of Quintain (Signal) Member A Limited (Sequel) and its
subsidiary undertakings for a consideration of £1 from Quintain Estates and Development PLC. Quintain Estates and
Development PLC waived sufficient intercompany debt to bring the net asset value of the company to £1 at the date of
acquisition.
On the same day the Group also acquired from Buckingham Properties Trading Limited, a 1.5% share of Signal Property LLP
which was not already owned by Quintain (Signal) Member A Limited together with a loan owing from Signal Property
Investments LLP, a subsidiary undertaking of Quintain (Signal) Member A Limited, amounting to £220,111 for a consideration
of £200,000.
In a separate transaction, Buckingham Properties Trading Limited used these proceeds to subscribe for 100,000 Ordinary 10p
shares in the Group at a price of £2.00 per share and Quintain Estates and Development PLC subscribed for 275,000 Ordinary
10p shares in the Group at a price of £2.00 per share.
Sequel is a property investment company which was acquired to expand the Group's property portfolio in the UK secondary
property market outside London.
Carrying value at acquisition date Adjustments Fair value at acquisition date
Investment properties 38,450,000 1,220,168 39,670,168
Receivables and prepayment 1,475,320 197,462 1,672,782
Cash at bank and in hand - - -
Payables and other creditors (1,678,083) - (1,678,083)
Other loans (478,715) - (478,715)
Finance leases - (1,215,763) (1,215,763)
Bank loans (37,815,390) (154,998) (37,970,388)
Net assets (46,868) 46,869 1
Consideration 1
Goodwill on acquisition -
No deferred tax has been recognised on the adjustments to fair value as a result of the historical cost of the investment
properties exceeding their fair value.
Acquisition related costs
The Group incurred acquisition related costs of £516,569 related to professional fees paid for due diligence, general
professional fees and legal related costs. These costs have been included in non-underlying administrative expenses in the
Group's consolidated income statement.
The group issued 248,715 warrants to its Nominated Advisors and Brokers to subscribe for shares at a price of 200p per
share. The directors have valued these warrants at £50,000.
12 Investment Properties
Freehold Investment properties Leasehold Investment properties Total
£ £ £
At 1 February 2013 2,015,000 - 2,015,000
Arising on acquisition of subsidiary undertaking 27,295,547 12,374,621 39,670,168
Additions 750,000 - 750,000
Gains on revaluation of investment property 14,054,984 5,445,547 19,500,531
Disposals (2,495,531) - (2,495,531)
At 1 April 2014 41,620,000 17,820,168 59,440,168
Arising on acquisition of subsidiary undertaking 31,741,099 - 31,741,099
Additions 2,801,540 11,200 2,812,740
Gains on revaluation of investment properties 9,179,699 589,020 9,768,719
Disposals (774,450) - (774,450)
At 31 March 2015 84,567,888 18,420,388 102,988,276
18,420,388
102,988,276
Investment properties are stated at fair value as determined by the Directors. The fair value of the Group's property
portfolio is 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 International Financial Reporting Standard 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.
A reconciliation of the valuations carried out by the external valuers to the carrying values shown in the balance sheet
was as follows:
2015 2014
£ £
Scanlans Consultant Surveyors LLP 2,260,000 2,230,000
Cushman & Wakefield LLP 65,215,000 55,990,000
DTZ Debenham Tie Leung Limited 35,280,000 -
Fair value 102,755,000 58,220,000
Adjustment in respect of minimum payment under head leases separately included as a liability in the balance sheet 1,220,168 1,220,168
Less lease incentive balance included in prepayments (986,892) -
Carrying value 102,988,276 59,440,168
102,988,276
59,440,168
Investment properties with a carrying value of £101,768,108 (2014: £58,220,000) are subject to a first charge to secure the
Group's bank loans amounting to £36,205,461 (2014: £18,532,319).
The historical cost of the Group's investment properties, at the cost the properties were acquired by the relevant
subsidiary undertaking, as at 31 March 2015 was £98,251,403 (2014: £60,015,591).
The valuations of all investment property held by the group is classified as Level 3 as they are based on unobservable
inputs. There have been no transfers between levels of the fair value hierarchy during the year.
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 year 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.
31 March 2015 Significant unobservable inputs
Sequel PIH Hockenhull
Value of investment properties £65,215,000 £35,280,000 £2,260,000
Area (sq ft) 1,095,327 301,392 22,820
Gross Estimated Rental Value £6,703,332 £2,740,900 £195,653
Net Initial YieldMinimumMaximumWeighted average 13.5%-6.4%7.6% 3.2%10.8% 6.5% 7.5%10.0% 8.5%
Reversionary YieldMinimumMaximumWeighted average 6.0% 16.3%6.4% 5.9%9.6% 7.0% 7.5%10.0% 8.5%
Equivalent YieldMinimumMaximumWeighted average 0.9% 13.5%9.0% 6.0%9.0% 7.2% 7.5%10.0% 8.5%
31 March 2014 Significant unobservable inputs
Sequel Hockenhull
Value of investment properties £55,990,000 £2,230,000
Area (sq ft) 1,097,920 22,820
Gross Estimated Rental Value £6,620,000 £190,000
Net Initial YieldMinimumMaximumWeighted average 18.3%-5.4%9.4% 7.5%10.0% 8.5%
Reversionary YieldMinimumMaximumWeighted average 6.5% 20.2%7.3% 7.5%10.0% 8.5%
Equivalent YieldMinimumMaximumWeighted average 1.2% 15.6%10.1% 7.5%10.0% 8.5%
Sensitivity of measurement to variations in the significant unobservable inputs
Unobservable input Impact on fair value measurement of significant increase in input Impact on fair value measurement of significant decrease in input
Gross Estimated Rental Value Increase Decrease
Net Initial Yield. Decrease Increase
Reversionary Yield Decrease Increase
Equivalent Yield Decrease Increase
The relationship between the unobservable inputs and their impact on the fair value measurement is not certain. Changes to
the tenancies and/or income profile of an investment asset may also impact the fair value outside one or more of the above
inter-relationships according to individual circumstances.
Reconciliation of fair value of investment properties:
Year ended 31 March 2015 £ 14 month period ended 31 March 2014 £
Opening balance 59,440,168 2,015,000
Acquisitions at fair value 31,741,099 39,670,168
Other purchases 2,812,740 750,000
Disposal of properties (774,450) (2,495,531)
Gains recognised in profit or loss 9,768,719 19,500,531
Closing balance 102,988,276 59,440,168
In addition to the gain on revaluation of investment properties included in the table above, realised gains of £177,698
(2014: £786,616) relating to investment properties disposed of during the year were recognised in profit or loss.
13 TANGIBLE FIXED ASSETS
IT and fixtures and fittings
£
At 1 February 2013 670
Additions -
At 1 April 2014 670
Assets acquired 73
Additions 61,075
At 31 March 2015 61,818
Depreciation
At 1 February 2013 223
Provided during the period 242
At 1 February 2014 465
Provided during the year 9,952
At 31 March 2015 10,417
Net book value at 31 March 2015 51,401
Net book value at 31 March 2014 205
14 TRADE AND OTHER RECEIVABLES
2015 2014
£ £
Current
Trade receivables 1,938,281 1,499,278
Less: allowance for doubtful trade receivables (90,178) (88,946)
Other taxes 5,150 36,925
Deposit on purchase of investment property (note 26) 1,000,000 -
Other debtors 26,880 71,806
Accrued income 62,815 135,126
Prepayments 431,709 282,606
3,374,657 1,936,795
1,936,795
2015 2014
£ £
Non-Current
Accrued income 924,077 539,995
924,077 539,995
539,995
Accrued income relates to rents recognised in advance as a result of spreading the effect of rent free and reduced rent
periods, capital contributions in lieu of rent free periods and contracted rent uplifts over the expected terms of their
respective leases. Together with £62,815 (2014: £135,126), which was included as current assets within trade and other
receivables, these amounts totalled £986,892 at 31 March 2015 (2014: £675,121).
Movements in the provision for impairment of trade receivables were as follows:
2015 2014
£ £
Brought forward 88,946 -
Arising on acquisition 10,000 107,443
Utilised in the period (33,415) (49,362)
Provisions increased 24,647 30,865
90,178 88,946
88,946
As at 31 March, the analysis of trade receivables that were past due but not impaired is as follows:
2015 2014
£ £
0-30 days 1,599,224 1,265,874
31-60 days (33,981) 346
61-90 days 52,265 12,604
91 - 120 days 203,763 42,706
More than 120 days 26,832 88,802
1,848,103 1,410,332
1,410,332
15 CASH AND CASH EQUIVALENTS
All of the Group's cash and cash equivalents at 31 March 2015 and 31 March 2014 are in sterling and held at floating
interest rates.
2015 2014
£ £
Cash and cash equivalents 12,278,537 5,123,337
5,123,337
The Directors consider that the carrying amount of cash and cash equivalents approximates to
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