REG - Primary Health Props - Half-year Report <Origin Href="QuoteRef">PHP.L</Origin> - Part 3
27/07/2016 07:06
- Part 3: For the preceding part double click ID:nRSa3171Fb
Weighted average number of shares in issue during the period
2 Restated to reflect the Company's four-for-one share sub-division undertaken
in November 2015.
Year ended 31 December 2015 (audited)
Basic and diluted earnings
Basic earnings 56,032 445,606,491 12.6
Dilutive effect of Convertible Bond 3,506 84,615,385
Diluted earnings 59,538 530,221,876 11.2
EPRA basic and diluted earnings
Basic and diluted earnings 56,032
Adjustments to remove:
Net result on property (39,767)
Fair value movement on derivatives (1,005)
Fair value movement on Convertible Bond 6,469
EPRA basic earnings per share 21,279 445,606,491 4.9
Dilutive effect of Convertible Bond 3,506 84,615,385
EPRA diluted earnings per share 25,235 530,221,876 4.8
1 Weighted average number of Ordinary Shares in issue during the year
2 Restated to reflect the Company's four-for-one share sub-division
undertaken in November 2015.
On 20 May 2014, the Group issued £82.5 million of unsecured Convertible Bonds
(refer to Note 11 for further details). In accordance with IAS 33 'Earnings
per share' the Company is required to assess and disclose the dilutive impact
of the contingently issuable shares within the Convertible Bond. The impact is
not recognised where it is anti-dilutive. The Convertible Bonds are dilutive
for basic earnings per share but not EPRA earnings per share.
The dilutive impact to basic EPS of Convertible Bonds is represented by the
accrued bond coupon which has been included in the results of each period. The
number of dilutive shares is calculated as if the contingently issuable shares
within the Convertible Bond had been in issue for the period from issuance of
the bonds to the end of each reporting period.
7. Dividends
Six months ended30 June 2016 Six months ended30 June 2015 Year ended31 December 2015
£000 £000 £000
(unaudited) (unaudited) (audited)
Quarterly interim dividend paid 26 February 2016 5,358 - -
Scrip dividend in lieu of quarterly cash dividend 26 February 2016 360 - -
Quarterly interim dividend paid 27 May 2016 5,170 - -
Scrip dividend in lieu of quarterly cash dividend 27 May 2016 552 - -
Interim dividend 2.50p paid 1 April 2015 - 10,733 10,733
Scrip dividend in lieu of cash dividend 1 April 2015 - 395 395
Interim dividend 2.5p paid 30 October 2015 - - 10,350
Scrip dividend in lieu of cash dividend 30 October 2015 - - 788
Total dividends distributed 11,440 11,128 22,266
Per share 2.5625p 2.50p 1 5.00p1
1 Restated to reflect the Company's four for one share sub-division undertaken
in November 2015.
The Company will pay a third interim dividend of 1.28125 pence per Ordinary
Share for the year ending 31 December 2016, payable on 26 August 2016, to
shareholders on the register as at 15 July 2016. This dividend will not be a
Property Income Distribution ("PID").
8. Investment properties and investment properties under construction
Investment properties have been independently valued at fair value by Lambert
Smith Hampton, Chartered Surveyors and Valuers, as at 30 June 2016 in
accordance with IAS 40: Investment Property.
The revaluation surplus for the six months ended 30 June 2016 amounted to
£15.5 million (30 June 2015: £23.9 million; 31 December 2015: £39.8 million).
Property additions, including acquisitions, for the six months ended 30 June
2016 amounted to £70.1 million (30 June 2015: £23.9 million; 31 December 2015:
£33.1 million). There were no property disposals in the six months ended 30
June 2016 (30 June 2015: £nil; 31 December 2015: £nil).
Investment properties freehold Investment long leasehold Investment properties under construction Total
£000 £000 £000 £000
(unaudited) (unaudited) (unaudited) (unaudited)
As at 1 January 2016 882,016 209,861 8,735 1,100,612
Property additions 51,955 8,204 9,961 70,120
Impact of lease incentive adjustment 356 423 - 779
Transfer from properties in the course of development 7,245 - (7,245) -
941,572 218,488 11,451 1,171,511
Revaluations for the period 10,695 4,135 700 15,530
As at 30 June 2016 952,267 222,623 12,151 1,187,041
In their Interim Valuation Report, Lambert Smith Hampton ("LSH") commented on
the referendum decision to exit the EU. LSH referred to the period of
uncertainty post the referendum vote and that many factors may affect the
property market as a whole.
LSH point to the lower level of property occupational and investment
transactions in the wider property sector that may continue for the
foreseeable future due to the Brexit scenario. They state that "in "thin"
transactional markets, by their nature, there is less certainty to be attached
to valuation. With fewer transactions, there is less market evidence to
provide definitive price guidance at any time, and this coupled to volatility
in financial markets, creates additional risk".
9. Cash and cash equivalents
30 June 2016 31 December 2015
£000 £000
(unaudited) (audited)
Cash held at bank 6,057 2,881
10. Bank and other borrowings reconciliation
The table indicates amounts drawn and undrawn from each individual facility:
Facility Amounts drawn Undrawn
30 June 2016 31 December 2015 30 June 2016 31 December 2015 30 June 2016 31 December 2015
£000 £000 £000 £000 £000 £000
Current
Overdraft facility 1 5,000 5,000 - - 5,000 5,000
Fixed rate term loan 2 779 755 779 755 - -
Term loan to November 20289 - 107 - 107 - -
5,779 5,862 779 862 5,000 5,000
Non-current
Term loan to August 2017 3 115,000 165,000 115,000 146,250 - 18,750
Fixed rate term loan 2 23,552 23,948 23,552 23,948 - -
Fixed rate term to December 2022 4 25,000 25,000 25,000 25,000 - -
Term to July 2020 5 50,000 50,000 - 21,513 50,000 28,487
Fixed rate term to November 2018 6 75,000 75,000 75,000 75,000 - -
Term to August 2019 7 - 100,000 - 57,160 - 42,840
Term to August 2021 7 115,000 - 55,000 - 44,841 -
Fixed rate term to August 2024 8 50,000 50,000 50,000 50,000 - -
Fixed rate term to August 20298 63,000 63,000 63,000 63,000 - -
Term to November 2028 9 - 2,415 - 2,415 - -
516,552 554,363 406,552 464,286 94,841 90,077
Total 522,331 560,225 407,331 465,148 99,841 95,077
Providers:
1 The Royal Bank of Scotland PLC.
2 Aviva facility repayable in tranches to 31 January 2032.
3 The Royal Bank of Scotland plc ("RBS") and Abbey National Treasury
Services plc (branded Santander from January 2010) ("The Club facility").
4 Aviva GPFC facility.
5 HSBC Bank facility.
6 Aviva facility.
7 Barclays Bank facility.
8 Aviva facility.
9 RBS facility (acquired with Crestdown Limited).
At 30 June 2016, total facilities of £749.8 million (31 December 2015: £787.7
million) were available to the Group. This included a £75 million Unsecured
Retail Bond, a £70 million Secured Bond, a £82.5 million Convertible Bond and
a £5 million overdraft facility. Of these facilities, as at 30 June 2016,
£634.8 million was drawn (31 December 2015: £692.8 million).
On 10 June 2016, a £50 million revolving credit tranche of the Club facility
which would have matured in August 2017, was voluntarily cancelled by the
Group. The remaining tranche of the loan is fully drawn by the Group. Its
terms remain unchanged.
On 7 January 2016, the £100 million loan facility provided by Barclays Bank
plc was successfully extended by £15 million. The enlarged facility will be
made available for a new five-year term from January 2016. All other terms of
the facility remain unchanged.
On 16 July 2015, the £50 million revolving credit facility with HSBC Bank plc
was extended for a new five-year term. All other terms of the loan remain
unaltered.
As part of the acquisition of Crestdown Limited on 29 June 2015, the Group
acquired an existing loan with the Royal Bank of Scotland PLC in the sum of
£2.5 million. The loan was fully repaid on 22 April 2015, incurring a £24,000
early repayment fee.
Costs associated with the arrangement and extension of the facilities,
including legal advice and loan arrangement fees, are amortised over the
remaining life of the related facility.
Any amounts unamortised as at the period end are offset against amounts drawn
on the facilities as shown in the table below:
30 June 2016 31 December 2015
£000 £000
(unaudited) (audited)
Term loans drawn: due within one year 779 862
Term loans drawn: due in greater than one year 406,552 464,286
Total term loans drawn 407,331 465,148
Less: unamortised borrowing costs (3,753) (3,736)
Total term loans per the Condensed Group Balance Sheet 403,578 461,412
11. Borrowings: Bonds
30 June 2016 31 December 2015
£'000 £000
(unaudited) (audited)
Secured
Secured Bond November 2015 70,000 70,000
Unsecured
Retail Bond July 2019 75,000 75,000
Convertible Bond May 2019 at fair value 91,577 93,431
Less: unamortised issue costs (1,921) (2,103)
234,656 236,328
Secured Bond
On 18 December 2013, PHP successfully listed the floating rate guaranteed
secured bonds issued on 4 November 2013 (the "Secured Bonds") on the London
Stock Exchange. The Secured Bonds have a nominal value of £70 million and
mature on or about 30 December 2025. £60 million was paid up on the issue of
the Secured Bonds with the remaining £10 million being received on 30 June
2014 following the completion of the construction of four further secured
assets. The Secured Bonds incur interest on the paid-up amount at an
annualised rate of 220 basis points above six month LIBOR, payable
semi-annually in arrears.
Retail Bond
On 23 July 2012, PHP announced that it had become the first UK REIT to issue a
Retail Bond following the issue of a £75 million, unsecured, seven-year bond,
to retail investors with an annual interest rate of 5.375% paid semi-annually
in arrears. The Retail Bond issue costs are being amortised on a straight line
basis over seven years.
Convertible Bond
On 20 May 2014, PHP Finance (Jersey) Limited (the "Issuer"), a wholly owned
subsidiary of the Group, issued £82.5 million of 4.25% Convertible Bonds due
2019 (the "Bonds") at par. The Company has guaranteed the due and punctual
performance by the Issuer of all of its obligations (including payments) in
respect of the Bonds.
Subject to certain conditions, the Bonds are convertible into preference
shares of the Issuer which will be automatically and mandatorily exchangeable
into fully paid Ordinary Shares of the Company (the "Shares"). The initial
conversion price has been set at 390 pence per Share (the "Exchange
Price")which has subsequently been revised to 97.5 pence following the
Company's four-for-one Share sub-division undertaken in November 2015. Under
the terms of the Bonds, the Company will have the right to settle any
conversion rights entirely in Shares, in cash or with a combination of Shares
and cash.
The bondholders have the right to convert the Bonds up until 20 May 2017 only
where the Parity Value (as defined in the Bond's terms) is greater than the
Exchange Price.
On or after 20 May 2017, the Bonds may be redeemed at par at the Company's
option subject to the Parity Value equalling or exceeding £130,000, for Bonds
with a nominal value of £100,000. If not previously converted, redeemed or
purchased and cancelled, the Bonds will be redeemed at par on the maturity
date.
Convertible Bond
30 June 2016 31 December 2015
£000 £000
Opening balance - fair value 93,431 86,962
Fair value movement in Convertible Bond (1,854) 6,469
Closing balance - fair value 91,577 93,431
The fair value of the Convertible Bond at 30 June 2016 and 31 December 2015
was established by obtaining quoted market prices. The fair value movement is
recognised in the Group Statement of Comprehensive Income within profit before
taxation but is excluded from the calculation of EPRA earnings and EPRA NAV.
12. Derivatives and other financial instruments
It is Group policy to maintain the proportion of floating rate interest
exposure at between 20% and 40% of total debt. The Group uses interest rate
swaps to mitigate its remaining exposure to interest-rate risk in line with
this policy. The fair value of these contracts is recorded in the balance
sheet and is determined by discounting future cash flows at the prevailing
market rates at the balance sheet date.
The table below sets out the movements in the value of the Group's interest
rate swaps during the period:
Effective interest rate swaps Ineffective interest rate swaps Total
£000 £000 £000
Assets
As at 1 January 2016 9 - 9
Fair value movement in the period (9) - (9)
As at 30 June 2016 - - -
Liabilities
As at 1 January 2016 (20,784) (14,503) (35,287)
Cash paid to re-set interest rates - 14,512 14,512
Fair value movement in the period (14,667) (2,944) (17,611)
As at 30 June 2016 (35,451) (2,935) (38,386)
Total - derivative financial instruments
As at 1 January 2016 (20,775) (14,503) (35,278)
Cash paid to re-set interest rates - 14,512 14,512
Fair value movement in the period (14,676) (2,944) (17,620)
As at 30 June 2016 (35,451) (2,935) (38,386)
On 11 May 2016, PHP paid a one-off cash sum of £14.5 million to re-set the
contracted rates on two interest rate swaps. The contracts were as follows:
· for a nominal value of £50.0 million, at a rate of 4.835%, maturing on
11 August 2021; and
· for a nominal value of £38.0 million, at a rate of 4.74%, maturing on
11 August 2021.
The contracted rate on both swaps was bought down to the prevailing market
rate of 0.87% for the period of the contract between 11 November 2016 and
maturity. The swaps are no longer callable at the option of the bank. All
other terms remain unchanged.
These swap contracts are classified as ineffective swaps. As such, Mark to
Market valuation movements have been recognised in the Income Statement in the
period they arose. The payment made to re-set the rates on these contracts
crystallised part of the value held in the balance sheet at that time. Further
fair value movements resulting from the re-coupon of these swaps are
recognised in the Income Statement (see above).
13. Financial risk management
Set out below is a comparison by class of the carrying amount and fair values
of the Group's financial instruments that are carried in the financial
statements.
Book value Fair value Book value Fair value
30 June 2016 30 June 2016 31 December 2015 31 December 2015
£000 £000 £000 £000
Financial assets
Trade and other receivables 2,545 2,545 2,364 2,364
Effective interest rate swaps - - 9 9
Cash and short-term deposits 6,057 6,057 2,881 2,881
Financial liabilities
Interest-bearing loans and borrowings (629,158) (685,387) (692,648) (731,532)
Effective interest rate swaps (35,451) (35,451) (20,776) (20,776)
Ineffective interest rate swaps (2,935) (2,935) (14,502) (14,502)
Trade and other payables (11,537) (11,537) (14,424) (14,424)
The fair value of the financial assets and liabilities is included as an
estimate of the amount at which the instruments could be transferred in a
current transaction between willing parties, other than a forced sale. The
following methods and assumptions were used to estimate fair values:
• The fair values of the Group's cash and cash equivalents and trade
payables and receivables are not materially different from those at which they
are carried in the financial statements due to the short term nature of these
instruments.
• The fair value of floating rate borrowings is estimated by discounting
future cash flows using rates currently available for instruments with similar
terms and remaining maturities. The fair value approximates their carrying
values, gross of unamortised transaction costs.
• The fair values of the derivative interest rate swap contracts are
estimated by discounting expected future cash flows using market interest
rates and yield curves over the remaining term of the instrument.
The Group held the following financial instruments at fair value at 30 June
2016. The Group has no financial instruments with fair values that are
determined by reference to significant unobservable inputs, i.e. those that
would be classified as level 3 in the fair value hierarchy, nor have there
been any transfers of assets or liabilities between levels of the fair value
hierarchy. There are no non-recurring fair value measurements.
Fair value measurements at 30 June 2016 are as follows:
Level 11 Level 22 Level 33 Total
Recurring fair value measurements £000 £000 £000 £000
Financial assets
Derivative interest rate swaps - - - -
Financial liabilities
Derivative interest rate swaps - (38,386) - (38,386)
Convertible bond (91,577) - - (91,577)
Fair value measurements at 31 December 2015 were as follows:
Recurring fair value measurements Level 11 Level 22 Level 33 Total
£000 £000 £000 £000
Financial assets
Derivative interest rate swaps - 9 - 9
Financial liabilities
Derivative interest rate swaps - (35,287) - (35,287)
Convertible Bond (93,431) - - (93,431)
1 Valuation is based on unadjusted quoted prices in active markets for
identical financial assets and liabilities
2 Valuation is based on inputs (other than quoted prices included in Level
1) that are observable for the financial asset or liability, either directly
(i.e. as unquoted prices) or indirectly (i.e. derived from prices)
3 Valuation is based on inputs that are not based on observable market data
The interest rate swaps whose fair values include the use of level 2 inputs
are valued by discounting expected future cash flows using market interest
rates and yield curves over the remaining term of the instrument. The
following inputs are used in arriving at the valuation:
• interest rates;
• yield curves;
• swaption volatility;
• observable credit spreads;
• credit default swap curve; and
• observable market data.
14. Net asset value calculations
Net asset values have been calculated as follows:
30 June 2016 30 June 2015 31 December 2015
£000 £000 £000
(unaudited) (unaudited) (audited)
Net assets
Basic net assets 492,416 334,275 345,360
Derivative interest rate swaps liability (net) 38,386 35,178 35,278
Cumulative Convertible Bond fair value movement 9,077 8,074 10,931
EPRA net asset value 539,879 377,527 391,569
Number of shares Number of shares Number of shares
Ordinary Shares:
Issued share capital 597,171,537 445,513,0441 446,281,348
Net asset value per share
Basic net asset value per share 82.5p 75.0p1 77.4p
EPRA net asset value per share 90.4p 84.7p1 87.7p
1 Restated to reflect the Company's four for one share sub-division undertaken
in November 2015.
EPRA NAV is calculated as balance sheet net assets including the valuation
result on investment properties but excluding fair value adjustments for debt
and related derivatives.
As detailed in Note 6, the Company is required to assess the dilutive impact
of the unsecured Convertible Bond on its net asset value per share, but only
report any impact if it is dilutive. With an initial conversion price of 97.5
pence (390 pence upon issue, restated to reflect the Company's four-for-one
share sub-division undertaken in November 2015), the unsecured Convertible
Bond issued by the Group on 20 May 2014 is anti-dilutive to all measures of
net asset value per share.
15. Related party transactions
The fees calculated and payable for the period to the Adviser, included in
administrative expenses, were as follows:
Six months ended30 June 2016 Six months ended30 June 2015 Yearended31 December 2015
£000 £000 £000
(unaudited) (unaudited) (audited)
Nexus TradeCo Limited 2,801 2,606 5,296
As at 30 June 2016, outstanding advisory fees payable to Nexus totalled £0.5
million (31 December 2015: £0.5 million).
Further fees paid to Nexus in accordance with the Advisory Agreement for the
period to 30 June 2016 of £0.02 million (31 December 2015: £0.1 million) in
respect of capital projects were capitalised in the year.
16. Called up share capital
30 June 2016 30 June 2015 31 December 2015
£000 £000 £000
(unaudited) (unaudited) (audited)
Issued and fully paid Ordinary Shares at 12.5p each 74,646 55,689 55,785
At beginning of year 55,785 55,638 55,638
Scrip issues in lieu of cash dividends 111 51 147
Shares issued in the period 18,750 - -
74,646 55,689 55,785
On 13 April 2016, a general meeting of the Company approved the issue of
150,000,000 new Ordinary Shares at a price of 100 pence each. The shares were
admitted to trading on the Main Market of the London Stock Exchange on 14
April 2016.
At a general meeting of the Company on 11 November 2015, shareholders approved
the resolution to sub-divide each issued Ordinary Share of 50.0 pence each
into four Ordinary Shares of 12.5 pence. The sub-division of the Ordinary
Shares became effective on 12 November 2015.
17. Special reserve
30 June 2016 30 June 2015 31 December 2015
£000 £000 £000
(unaudited) (unaudited) (audited)
At beginning of year 93,063 115,438 115,438
Share issue: 14 April 2016 131,250 - -
Dividends paid (10,528) (10,733) (21,083)
Scrip issues in lieu of cash dividends (912) (395) (1,183)
Share issue expenses (4,657) - (109)
208,216 104,310 93,063
The special reserve has arisen on previous issues of the Company's shares. It
represents the share premium on the issue of the shares, net of expenses, from
issues effected by way of a cash box mechanism. The issue of shares on 14
April 2016, referred to in note 16, was effected by way of a cash box.
A cash box raising is a mechanism for structuring a capital raising whereby
the cash proceeds from investors are invested in a subsidiary company of the
parent instead of the parent itself. Use of a cash box mechanism has enabled
the share premium arising from the issue of shares to be deemed to be a
distributable reserve and has therefore been shown as a special reserve in
these financial statements. Any issue costs are also deducted from the special
reserve.
As the special reserve is a distributable reserve, the dividends declared in
the period have been distributed from this reserve.
18. Subsequent events
On 8 July 2016, the Group signed a conditional contract to acquire a primary
care centre in the Republic of Ireland for a consideration of E6.7 million.
Completion is scheduled for August 2016 conditional upon the completion of
certain transaction documents.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge this condensed set
of interim financial statements has been prepared in accordance with IAS 34 as
adopted by the European Union and that the operating and financial review
herein includes a fair review of the information required by DTR 4.2.7 and DTR
4.2.8 of the Disclosure and Transparency rules of the United Kingdom's
Financial Services Authority namely:
• an indication of important events that have occurred during the first six
months of the financial year and their impact on the condensed interim
financial statements and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
• material related party transactions in the first six months and any
material changes in the related party transactions described in the last
Annual Report.
Shareholder information is as disclosed in the Annual Report and is also
available on the PHP website, www.phpgroup.co.uk.
By order of the Board
Alun Jones
Chairman
26 July 2016
Glossary of terms
Adviser is Nexus Tradeco Limited.
Building Research Establishment Environmental Assessment Method ("BREEAM")
assesses the sustainability of buildings against a range of criteria.
Clinical Commissioning Groups ("CCGs") are the groups of GPs and other
healthcare professionals that are responsible for designing local health
services in England with effect from 1 April 2013.
Company and/or Parent is Primary Health Properties PLC.
Direct property costs comprise ground rents payable under head leases, void
costs, other direct irrecoverable property expenses, rent review fees and
valuation fees.
District Valuer ("DV") is the District Valuer Service being the commercial arm
of the Valuation Office Agency ("VOA"). It provides professional property
advice across the public sector and in respect of primary healthcare
represents NHS bodies on matters of valuation, rent reviews and initial rents
on new developments.
Dividend cover is the number of times the total dividend paid in the period
(in cash or shares under the Scrip Dividend Scheme) is covered by EPRA
earnings.
Earnings per Ordinary Share from continuing operations ("EPS") is the profit
attributable to equity holders of the Parent divided by the weighted average
number of shares in issue during the period.
European Public Real Estate Association ("EPRA") is a real estate industry
body, which has issued Best Practices Recommendations in order to provide
consistency and transparency in real estate reporting across Europe.
EPRA Cost Ratio is the ratio of net overheads and operating expenses against
gross rental income (with both amounts excluding ground rents payable). Net
overheads and operating expenses relate to all administrative and operating
expenses, net of any service fees, recharges or other income specifically
intended to cover overhead and property expenses.
EPRA Earnings is the profit after taxation excluding investment and
development property revaluations and gains/losses on disposals, changes in
the fair value of financial instruments and associated close-out costs and
their related taxation.
EPRA Net Asset Value ("EPRA NAV") is the balance sheet net assets excluding
own shares held and Mark to Market derivative financial instruments.
EPRA Vacancy Rate is, as a percentage, the ERV of vacant space in the Group's
property portfolio divided by the ERV of the whole portfolio.
Equivalent yield (true and nominal) is a weighted average of the Net initial
yield and Reversionary yield and represents the return a property will produce
based upon the timing of the income received. The true equivalent yield
assumes rents are received quarterly in advance. The nominal equivalent
assumes rents are received annually in arrears.
Estimated rental value ("ERV") is the external valuer's opinion as to the open
market rent which, on the date of valuation, could reasonably be expected to
be obtained on a new letting or rent review of a property.
Exchange Price is 116% of the share price at the date of issue.
Gross rental income is the gross accounting rent receivable.
Group is Primary Health Properties PLC and its subsidiaries.
IFRS is International Financial Reporting Standards as adopted by the European
Union.
Interest cover is the number of times net interest payable is covered by net
rental income.
Interest rate swap is a contract to exchange fixed payments for floating
payments linked to an interest rate, and is generally used to manage exposure
to fluctuations in interest rates.
IPD is the Investment Property Databank Limited which provides performance
analysis for most types of real estate and produces an independent benchmark
of property returns.
IPD Healthcare is the Investment Property Databank's UK Annual Healthcare
Property Index.
IPD Total Return is calculated as the change in capital value, less any
capital expenditure incurred, plus net income, expressed as a percentage of
capital employed over the period, as calculated by IPD.
London Interbank Offered Rate ("LIBOR") is the interest rate charged by one
bank to another for lending money.
Loan to Value ("LTV") is the ratio of net debt to the total value of property
assets.
Mark to Market ("MtM") is the difference between the book value of an asset or
liability and its market value.
Net initial yield is the annualised rents generated by an asset, after the
deduction of an estimate of annual recurring irrecoverable property outgoings,
expressed as a percentage of the asset valuation (after notional purchaser's
costs).
Net rental income is the rental income receivable in the period after payment
of direct property costs. Net rental income is quoted on an accounting basis.
NHSPS is NHS Property Services Limited and the company wholly owned and funded
by the Department of Health, which, as of 1 April 2013, has taken on all
property obligations formerly borne by Primary Care Trusts.
Parity Value is calculated based on dividing the Convertible Bond value by the
Exchange Price.
Property Income Distribution ("PID") is the required distribution of income as
dividends under the REIT regime. It is calculated as 90% of exempted net
income.
Real Estate Investment Trust ("REIT") is a listed property company which
qualifies for and has elected into a tax regime, which exempts qualifying UK
profits, arising from property rental income and gains on investment property
disposals, from corporation tax, but which has a number of specific
requirements.
Rent reviews take place at intervals agreed in the lease and their purpose is
usually to adjust the rent to the current market level at the review date.
Rent roll is the passing rent being the total of all the contracted rents
reserved under the leases.
Reversionary yield is the anticipated yield which the initial yield will rise
to once the rent reaches the ERV and when the property is fully let. It is
calculated by dividing the ERV by the valuation.
Retail Price Index ("RPI") is the official measure of the general level of
inflation as reflected in the retail price of a basket of goods and services
such as energy, food, petrol, housing, household goods, travelling fare, etc.
RPI is commonly computed on a monthly and annual basis.
RICS is the Royal Institution of Chartered Surveyors.
RPI linked leases are those leases which have rent reviews which are linked to
changes in the RPI.
Special reserve is a distributable reserve.
Total expense ratio ("TER") is calculated as total administrative costs for
the year divided by the average total asset value during the year.
Total property return is the overall return generated by properties on a
debt-free basis. It is calculated as the net rental income generated by the
portfolio plus the change in market values, divided by opening property assets
plus capital expenditure, less disposals.
Total NAV return is calculated as the movement in EPRA net assets for the
period plus the dividends paid, divided by opening EPRA net assets.
Total Shareholder Return is calculated as the movement in the share price for
the period plus the dividends paid, divided by the opening share price.
Weighted average facility maturity is calculated by multiplying each tranche
of Group debt by the remaining period to its maturity and dividing the result
by total Group debt in issue at the year end.
Weighted average unexpired lease term ("WAULT") is the average lease term
remaining to first break, or expiry, across the portfolio weighted by
contracted rental income.
Yield on cost is the estimated annual rent of a completed development divided
by the total cost of development including site value and finance costs
expressed as a percentage return.
Yield shift is a movement (usually expressed in basis points) in the yield of
a property asset, or like-for-like portfolio over a given period. Yield
compression is a commonly used term for a reduction in yields.
This information is provided by RNS
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