REG - Sirius Real Estate - Half-year Report
20/11/2023 07:00
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RNS Number : 9053T Sirius Real Estate Limited 20 November 2023
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
JSE Share Code: SRE
LSE (GBP) Share Code: SRE
LEI: 213800NURUF5W8QSK566
ISIN Code: GG00B1W3VF54
20 November 2023
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius", the "Group" or the "Company")
Condensed interim consolidated financial results for the six months ended 30
September 2023
Strong operational results drive FFO and dividend growth
Sirius Real Estate, the leading owner and operator of branded business and
industrial parks providing conventional space and flexible workspace in
Germany and the U.K., provides an update on trading for the six months to 30
September 2023.
Rental growth delivers further FFO and dividend increases
• 7.3% increase in total revenue to €140.1 million (30 September
2022: €130.6 million)
• 7.7% increase in Group like-for-like rent roll (30 September 2022:
6.9%)
• 7.0% in like-for-like annualised rent roll in Germany to €122.5
million (30 September 2022: €114.5 million) and 9.0% in the UK to £50.7
million (€58.6 million) (30 September 2022: £46.5 million (€53.8
million)) demonstrating the quality of the assets and continued occupier
demand
• Sirius remains on track to deliver its tenth consecutive year of
greater than 5% like-for-like rent roll increases at Group level
• 9.3% growth in funds from operations¹ to €53.0 million (30
September 2022: €48.5 million)
• 2.0% increase in adjusted profit before tax to €49.9 million (30
September 2022: €48.9 million) excluding property valuations demonstrating
continued strong operational performance
• 13.5% increase in adjusted earnings per share, which excludes
valuation movements as well as exceptional items, to 4.21c per share (30
September 2022: 3.71c) reflecting the positive year on year operational
development, with basic EPRA earnings per share up 16.7% to 4.12c per share
(30 September 2022: 3.53c)
• 11.1%² increase in dividend per share to 3.00c (30 September 2022:
2.70c)
• 0.4% increase in EPRA NTA per share to 108.51c (31 March 2023:
108.11c per share)
• The book value of owned investment property increased in Germany by
€13.0 million (30 September 2022: €29.7 million), whilst book value
decreased in the UK by €6.1 million (30 September 2022: €23.2 million
decrease) representing a 1.8% like-for-like valuation growth and 2.1%
like-for-like decrease respectively
• Increase in owned investment property to €2,112.8 million (31 March
2023: €2,107.3 million) including assets held for sale of €7.3 million
• Group EPRA net yield to 6.7% (30 September 2022: 6.4%)
• Like-for-like Group occupancy remained stable at 84.5% (30 September
2022: 84.4%) highlighting the Group's ability to manage its tenant base and
vacancy, especially in Germany where the tenant retention rate rose to 78%
compared to 65% in the prior year
• 7.2% increase in Germany in like-for-like average rental rate to
€7.02 per sqm (30 September 2022: €6.55 per sqm) and 9.0% increase in the
UK to £13.78 per sq ft (€14.30(3) per sqm) from £12.64 per sq ft at 30
September 2022, highlighting the high reversion potential within the UK
portfolio in particular
Strong Balance Sheet
• Weighted average cost of debt remained stable at 1.4% in the period
(31 March 2023: 1.4%) with a weighted average debt expiry of 3.3 years,
increasing to 2.1% with a weighted average debt expiry of 4.2 years following
Berlin Hyp AG and Deutsche Pfandbriefbank AG financing
• Net LTV of 40.8% (31 March 2023: 41.6%), including unrestricted cash
balance of €91.2 million (31 March 2023: €138.6 million)
• Fitch reaffirmed its BBB investment grade rating with "Stable
Outlook" on 20 October 2023
Successful Post Balance Sheet Asset Recycling, including two disposals at 5%
average premium to book value
• Recycling of approximately in total €100 million, in four post
balance sheet transactions, comprising €47.4 million of disposals in Germany
and €52.9 million of acquisitions in the UK demonstrating that the Company's
assets remain desirable and opportunities remain in the market
Outlook
• Sirius remains well positioned to navigate the current macro-economic
climate due to its intensive asset management initiatives together with over
4 years weighted average debt expiries cushioning the impact of higher
interest rates affecting many in our sector
• As such, the Company continues to expect to trade in line with
management expectations for the full year.
Commenting on the period, Andrew Coombs, Chief Executive Officer of Sirius
Real Estate, said:
"The business has delivered another six months of strong operational
performance. Dividend and FFO growth is being supported by continued robust
trading, with occupier demand for our high quality affordable products
underpinning rental growth and keeping us on track to deliver our tenth
consecutive year of greater than 5% like-for-like rent roll increases.
"Our balance sheet is strong, as evidenced by Fitch's recent reaffirmation of
our BBB investment grade rating and stable outlook, providing flexibility to
leverage future opportunities as they arise. We recycled c. €100 million of
assets through four post balance sheet transactions, making €47.4 million of
disposals in Germany and €52.9 million of acquisitions in the UK,
highlighting our ability to crystallise returns from our mature assets.
Furthermore, there are many further levers we can pull to unlock value and
grow rental income through our successful asset management platform.
"We continue to be mindful of the uncertain market backdrop, however, our
asset management and marketing initiatives continue to give us confidence in
the Group's growth prospects. Looking ahead, our outlook is positive and we
remain confident in our ability to continue to deliver attractive
risk-adjusted returns to shareholders."
Webcast Presentation
Webcast Conference
There will be an in person presentation for analysts at 09.00am (10.00am CET/
11.00am SAST) today, hosted by Andrew Coombs, Chief Executive Officer of
Sirius Real Estate, and Chris Bowman, Chief Financial Officer. This will be
held at Peel Hunt's offices: 100 Liverpool Street, London EC2M 2AT
For those unable to join in person, there will be an audio webcast
presentation, with registration available via the link below:
https://stream.brrmedia.co.uk/broadcast/652f90524a974c05613633fb
(https://stream.brrmedia.co.uk/broadcast/652f90524a974c05613633fb)
For further information:
Sirius Real Estate
Andrew Coombs, CEO / Chris Bowman, CFO
+49 (0) 30 285 010 110
FTI Consulting (Financial PR)
Richard Sunderland / James McEwan / Talia Shirion
+44 (0) 20 3727 1000
SiriusRealEstate@fticonsulting.com
NOTES TO EDITORS
About Sirius Real Estate
Sirius is a property company listed on the main and premium market of the
London Stock Exchange and the main board of the JSE Limited. It is a leading
owner and operator of branded business and industrial parks providing
conventional space and flexible workspace in Germany and the UK. As of 30
September 2023, the Group's portfolio comprised 139 assets let to 9,248
tenants with a total book value of over €2 billion, generating a total
annualised rent roll of €184.2 million. Sirius also holds a 35% stake in
Titanium, its €350+ million German-focused joint venture with clients of AXA
IM Alts.
The Company's strategy centres on acquiring business parks at attractive
yields and integrating them into its network of sites - both under the Sirius
and BizSpace names and alongside a range of branded products. The business
then seeks to reconfigure and upgrade existing and vacant space to appeal to
the local market via intensive asset management and investment and may then
choose to refinance or dispose of assets selectively once they meet maturity,
to release capital for new investment. This active approach allows the Company
to generate attractive returns for shareholders through growing rental income,
improving cost recoveries and capital values, and enhancing returns through
securing efficient financing terms.
For more information, please visit: www.sirius-real-estate.com
(http://www.sirius-real-estate.com/)
Follow us on LinkedIn at https://www.linkedin.com/company/siriusrealestate/
(https://www.linkedin.com/company/siriusrealestate/)
Follow us on X (Twitter) at @SiriusRE
JSE Sponsor
PSG Capital
Business update
Strong operational performance highlights resilience of Sirius platform
Total annualised rent roll
€184.2m(3)
9.0%
2023 €184.2m
2022 €169.0m
Total revenue
€140.1m
7.3%
2023 €140.1m
2022 €130.6m
Funds from operations1
€53.0m
9.3%
2023 €53.0m
2022 €48.5m
Profit before tax
€39.8m
(47.4%)
2023 €39.8m
2022 €75.7m
Interim dividend
3.00c per share
11.1%2
2023 3.00c
2022 2.70c
Basic earnings per share
2.71c per share
(54.8)%
2023 2.71c
2022 6.00c
1 See note 25 of the Interim Report 2023.
2 Interim dividend representing 66% of FFO (30 September 2022: 65% of FFO).
3 The Company has chosen to disclose certain Group rental income figures
utilising a constant foreign currency exchange rate of GBP:EUR 1.1566, being
the closing exchange rate as at 30 September 2023.
In summary:
• Sirius remains resilient and well positioned to navigate the current
macro-economic climate due to its intensive asset management initiatives and
the fixed price contracts it has secured for a significant portion of its
utility demands in both Germany and the UK, which should shelter its diverse
tenant base from some of the higher operating costs that most industrial
companies are facing. Further, having over 4 years weighted average debt
expiries is helping cushion the impact of higher interest rates affecting many
in our sector.
• he Company looks ahead with confidence and continues to trade in line
with management expectations for the full year.
Key Group highlights:
Metric 30 September 2023 30 September 2022 Movement Movement %
Total annualised rent roll* (€ million) 184.2 169.0 15.2 9.0%
Like-for-like annualised rent roll* (€ million) 181.2 168.3 12.9 7.7%
Average rate (€) per sqm* 8.42 7.77 0.65 8.4%
Average rate (€) per sqm like for like* 8.40 7.79 0.61 7.8%
Total occupancy (%) 84.1 84.4 (0.3) (1.1)%
Like for like occupancy (%) 84.5 84.4 0.1 0.1%
Cash in bank (€ million) 91.2 138.6 (47.4) (34.2)%
Cash collection (%) 97.5 97.6 (0.1) 0%
* The Company has chosen to disclose certain Group rental income
figures throughout utilising a constant foreign currency exchange rate of
GBP:EUR 1.1566, being the closing exchange rate as at 30 September 2023,
throughout this document.
Overview
Against a backdrop of negative headlines referencing challenging economic
conditions in both Germany and the UK, the Group is pleased to report
continued strong trading in line with expectations, with all our key like for
like operating metrics showing positive momentum leading to like-for-like
Group annualised rent roll growth compared to the prior year of 7.7%*.
In Germany, occupancy remains stable and we continue to achieve rental rate
growth ahead of inflation as we utilise our proprietary asset management
platform to maximise the value we generate from our space. The sale of Kassel
at above book value, which we announced on 3 October 2023, demonstrates the
resilience of our German portfolio, which has again achieved a modest uplift
valuation at the period end driven by continued strong rental growth.
In the UK we continue to focus on driving value from BizSpace. Rent roll
growth is ahead of our German operations reflecting the ongoing demand for our
affordable, well-located space amid a higher inflationary backdrop. Occupancy
in the UK was higher than the six months prior and it is particularly pleasing
to report that UK rent roll has exceeded £50 million for the first time,
buoyed by a record new business sales month in September. Nonetheless the UK
portfolio experienced a modest decrease in valuation in line with an expansion
in yields in the sector.
Group rent roll increased by 9.0%* year-on-year and 2.8% in the period.
Like-for-like rent roll in Germany increased by 2.4% in the period (30
September 2022: 2.4%) whilst year-on-year like-for-like rent roll growth was
7.0%. The UK enjoyed a boost to rent roll as its price led strategy took hold
with like-for-like rent roll increasing by 4.6% in the period (30 September
2022: 4.1%) whilst year-on-year like-for-like rent roll growth was 9.0%.
Continued strong demand for Company products in attractive locations indicate
that Sirius is poised for its tenth consecutive year of greater than 5%
like-for-like rent roll increases.
Rent roll growth is supported in Germany by a 2.6% increase in like-for-like
rate per sqm to €7.06 (31 March 2023: €6.88), whilst the like-for-like
year-on-year rate grew by 7.2% to €7.02 (30 September 2022: €6.55). In the
UK, a strong increase year-on-year in like-for-like rate per sq ft of 9.0% to
£13.78 (30 September 2022: £12.64) was also the driver of the 9.0%
like-for-like rent roll increase to £50.7 million (30 September 2023: £46.5
million). These developments over the past year have helped the Group report a
9.3% growth in FFO to €53.0 million (30 September 2022: €48.5 million).
The strong trading underpins the board's confidence to declare an 11.1%
increase in the interim dividend to 3.00c per share compared to the 2.70c for
H1 last year. NAV per share grew around 0.2% in the six month period which was
helped by a 0.3% uplift in the valuation of owned investment property to
€2,112.8 million from €2,107.3 million as at 31 March 2023, including
those assets held for sale.
The Group's balance sheet remains strong as a result of a number of previously
communicated early financings that have been agreed. These comprise the €170
million Berlin Hyp AG loan facility, for a period of seven years to 31 October
2030, and the €58.3 million Deutsche Pfandbriefbank AG facility, for a
period of seven years to 31 December 2030. From the commencement of the new
Deutsche Pfandbriefbank AG facility at the end of December 2023, the Group
will have a weighted average cost of debt of 2.1% and a weighted average debt
expiry of 4.2 years. In addition, the Company further paid down its expiring
Schuldschein debt of €20 million in the period from existing cash flows. The
early financing of the Berlin Hyp AG and Deutsche Pfandbriefbank AG loans
demonstrate the Group's continued support from its banking partners and
ability to refinance or take out new facilities throughout the property cycle.
The Group's track record of growing FFO organically through its selective
asset recycling is continuing well, as outlined in detail under "Asset
recycling, acquisitions and disposals" further on in this report. In summary,
the Group undertook several transactions post the balance sheet date in both
Germany and the UK amounting to in total nearly €100 million, recycling
€47.4 million of disposals into €52.9 million of acquisitions in October
and November a testament to the Group's continued success in recycling assets
in all market environments.
The Group is further pleased to welcome Chris Bowman as CFO as he joins the
Sirius Board of Directors in August 2023 following a handover from interim CFO
Alistair Marks. Alistair Marks, who stepped down from the Sirius board in July
2023, will be leaving the Group at the end of March 2024 having been with
Sirius since inception in 2007, becoming CFO in 2012, following
internalisation and more recently as CIO. He goes with the Board's thanks for
his valuable contribution to the Group.
Financial performance
Excluding the effects from gains and losses from the revaluation of investment
properties profit before tax increased by 2.0% to €49.9 million (30
September 2022: €48.9 million) demonstrating continued strong operational
performance. Total revenue, which comprises rental income, fee income from
Titanium, other income from investment properties and service charge income,
increased by 7.0% to €140.1 million (30 September 2022: €130.6 million).
The Company reported a profit before tax for the six month period of €39.8
million (30 September 2022: €75.7 million) which includes €9.6 million of
deficit* from investment property revaluations of its owned assets (30
September 2022: €27.8 million gain).
As a result, FFO for the six months grew to €53.0 million (4.54c per share)
compared to €48.5 million (4.15c per share) for the same period in the prior
year, an increase of 9.3% on a per share basis. Reported profit after tax of
€31.7 million and basic earnings per share of 2.71c compares to €70.0
million and basic earnings per share of 6.00c in the prior year, reflecting
lower valuations coupled with a small lag on the asset recycling between when
assets were sold and the equity reinvested. Adjusted earnings per share, which
excludes valuation movements as well as exceptional items, increased by 13.5%
to 4.21c per share from 3.71c in the prior year, reflecting the positive year
on year operational activity.
* Net of capex and adjustments in relation to lease incentives and
broker fees.
The following table sets out the key earnings per share metrics:
Table 1: Earnings per share
six months six months
ended ended
30 September 2023 30 September 2022
Earnings No. of shares Cents Earnings No. of shares Cents Change
€m per share €m per share %
Basic EPS 31.7 1,169,697,061 2.71 70.0 1,167,383,139 6.00 (54.8)%
Diluted EPS 31.7 1,185,416,141 2.67 70.0 1,183,403,147 5.92 (54.9)%
Adjusted EPS 49.3 1,169,697,061 4.21 43.3 1,167,383,139 3.71 13.5%
Basic EPRA EPS 48.2 1,169,697,061 4.12 41.2 1,167,383,139 3.53 16.7%
Diluted EPRA EPS 48.2 1,185,416,141 4.07 41.2 1,183,403,147 3.48 17.0%
The Directors have chosen to disclose EPRA earnings, which are widely used
alternative metrics to their IFRS equivalents (further details on EPRA best
practice recommendations can be found at www.epra (http://www.epra) .com).
Refer to note 2(c) for further information.
Net asset value per share ("NAV") grew to 102.65c (31 March 2023: 102.46c) in
the period whilst adjusted net asset value per share ("adjusted NAV")
increased by 0.6% to 109.91c (31 March 2023: 109.21c). EPRA net tangible
assets ("EPRA NTA") per share increased by 0.4% to 108.51c (31 March 2023:
108.11c). The valuation metrics are described in more detail below and the
movement in net asset value per share in the period can be seen in the
following table:
Table 2: Net assets per share
cents per share
NAV per share as at 31 March 2023 102.46
Profit after tax 4.22
Deficit on revaluation of investment properties (0.80)
Deferred tax charge (0.44)
Cash dividend paid (3.15)
EBT share purchase and LTIP vesting (0.02)
Foreign currency 0.65
Adjusting items (0.26)
NAV per share as at 30 September 2023 102.65
Deferred tax and adjustments to financial derivatives* 7.25
Adjusted NAV per share as at 30 September 2023 109.91
EPRA adjustments* (1.40)
EPRA NTA per share as at 30 September 2023 108.51
* See note 11 of the Interim Report.
Lettings and rental growth
Rental growth
Germany
In Germany, like-for-like year-on-year annualised rent roll increased by 7.0%
to €122.5 million (30 September 2022: €114.5 million). The Company was
also able to manage the inflationary environment effectively, increasing its
average like-for-like rental rate per sqm by 7.2% to €7.02 per sqm from
€6.55 per sqm in the prior year. Like-for-like occupancy remained stable at
83.8% (30 September 2022: 83.8%) highlighting the Company's ability to manage
its tenant base and vacancy, as evidenced by its tenant retention rate of 78%
compared to 65% in the prior year.
UK
In the UK, like-for-like year-on-year annualised rent roll increased by 9.0%
to £50.7 million (€58.7* million) (30 September 2022: £46.5 million
(€52.6* million)). This was driven by a 9.0% increase in like-for-like
average rental rate to £13.78 per sq ft (€14.30* per sqm) from £12.64 per
sq ft as at 30 September 2022, highlighting the high reversion potential
within the UK portfolio which is realisable due to continued strong occupier
demand. Like-for-like occupancy increased to 87.7% (30 September 2022: 87.0%)
for the year due to proactive management of its customer base in order to take
advantage of the continued rental growth in the industrial market and high
demand for flexible workspace, as well as its efforts to attract tenants at
higher rates.
* The Company has chosen to disclose certain Group rental income
figures throughout utilising a constant foreign currency exchange rate of
GBP:EUR 1.1566, being the closing exchange rate as at 30 September 2023,
throughout this document.
Cash collection
As rental rates continue to increase in both Germany and in the UK, the value
of the Company's in-house team of cash collection professionals who maintain
close working relationships with tenants is key to the Company's success in
collecting its debts. As inflationary pressures remain, the Company has been
successful in maintaining consistent cash collection rates across the Group of
97.5% (30 September 2022: 97.6%).
Germany
In the six months to 30 September 2023, the Company increased its tenant
billings by 12.7% to €97.5 million (excluding VAT) (30 September 2022:
€86.5 million), of which €94.7 million or 97.1% was collected, remaining
consistent with the 97.2% collected in the prior comparative period. The
Company expects to collect the majority of the €2.8 million outstanding
debts through its regular collection activities over the coming months. The
Company had only immaterial write offs in the period.
UK
BizSpace also continued to maintain high cash collection rates through the
team's active management of its tenant base. Of the £25.4 million (excluding
VAT) (€29.4 million) which was billed in the period, £25.1 million (€29.1
million) or 98.9% was collected. The remaining £0.3 million (€0.3 million)
is expected to be collected in the normal course of regular collection
activities over the coming months. The Company had immaterial write offs in
the period.
Portfolio valuation
Group
Taking into account investment property relating to leased assets the total
investment property book value as at 30 September 2023 was €2,129.5 million
(31 March 2023: €2,123.0 million) such valuations having been independently
reviewed by Cushman and Wakefield. In accordance with IFRS 16, the Group
recognises leased investment properties of €24.0 million; accordingly, a
revaluation loss of €0.7 million representing the fair value adjustment in
the period was recorded in the income statement.
Germany
The €13.0 million increase in value of the owned investment properties in
the German portfolio was made up of €11.2 million of capex investment and
€8.9 million of valuation uplift, offset by a €7.3 million transfer in
assets held for sale and €0.2 million adjustment with respect to lease
incentives on the back of the 2.4% increase in like-for-like rental income.
The portfolio is now valued on a gross yield of 7.4% and a net yield of 6.6%
which has increased from 7.3% and 6.5% respectively as at 31 March 2023.
Despite ongoing pressures on the commercial property market in Germany, yields
remain less volatile for higher yielding asset classes, with sellers
preferring to take assets off the market rather than reduce prices
significantly. Nevertheless, Sirius is particularly well positioned to absorb
any further yield expansion in the asset class due to the value-add potential
remaining within its portfolio and the fact that, over the last few years, its
assets are valued at yields which are much higher than where similar assets
have been trading at over the last few years. Sirius' business model of
upgrading and repositioning underperforming properties through its capex
investment programme to transform them into much more desirable institutional
type assets is one which works very effectively when the market is strong as
well as when it is more challenging.
As at the period end, just over 60% of the total portfolio comprised assets
benefiting from both income and value-add potential which will be realised
through Sirius' intensive asset management and selective capex investment over
the next few years. These assets now have an average occupancy of 78.8% and
are valued on a gross yield of 7.7%, compared to the Company's mature assets
which are on average around 94.8% occupied and valued on a gross yield of
6.8%. Unlocking the potential in the value-add portfolio will come from
filling up sites and stabilising their rental income. This will be achieved
through our strategy of making the properties much more appealing to a wider
market which includes the lower cost of capital investors who buy these types
of assets on much tighter yields. Hence, we would expect to see the gap
between the yields of the value-add assets and mature assets tighten as the
value-add assets approach maturity. This is why the capex programme, which has
so successfully and consistently improved occupancy, rental income, service
charge cost leakage and overall quality of the rent roll and sites in general,
has proven to be extremely value accretive.
UK
The €6.1 million negative movement in owned investment property of the UK
portfolio was made up of a €18.5 million revaluation decrease, taking into
account €5.3 million of capital expenditure, offset by a favourable foreign
currency translation adjustment of €7.1 million.
The 30 September 2023 book value of the UK portfolio, which was independently
valued by Cushman & Wakefield LLP, was £355.9 million (€411.6 million)
(31 March 2023: £367.2 million) (€417.7 million), representing an average
gross yield of 14.3% (31 March 2023: 13.2%) which translates to a net yield of
9.7% (31 March 2023: 9.3%). The 30 September 2023 valuation represents a 3.2%
valuation decrease when compared to the £367.2 million valuation figure as at
31 March 2023, driven by an average 40bps of yield expansion fully offsetting
a 4.5% organic increase in annualised rent roll across the same period.
The average capital value per sqm of the portfolio of £85 per sq ft (€915
per sqm) remains well below replacement cost and illustrates the potential for
further growth from transformative investment through leveraging the Group's
capex investment programme.
German capex investment programme
The Group's capex investment programme in relation to its German assets has
historically been focused on the transformation of poor-quality vacant space
that is typically acquired at very low cost due to it being considered as
structural vacancy by former owners. The transformation and take up of this
space have not only resulted in significant income and valuation improvements
for the Company but have also yielded significant improvements in service
charge cost recovery and therefore further enhanced the improvements to net
operating income. The programme started in 2015 and to date 433,632 sqm of
space has been completed for an investment of €69 million. As at 30
September 2023, this space was generating €27.4 million in annualised rent
roll (at 73% occupancy) plus the substantial improvement in the recovery of
service charge costs. This transformed space has also been the major
contributor towards the large valuation increases seen in the portfolio over
the last 8.5 years.
In addition to the space that has been completed and let or is currently being
marketed, a total of approximately 32,300 sqm of space is either in the
process of being transformed or is awaiting approval to commence
transformation. The Group is on track to invest €8.8m into its capex
investment programme this year and expects to generate return on investment
via rental income alone in excess of 25%.
In addition to the capex investment programme on acquired "structural" vacant
space, Sirius continually identifies and looks for opportunities to upgrade
the space that is vacated each year as a result of move-outs. Within the
existing vacancy as at 30 September 2023, the Company has identified
approximately 59,039 sqm of vacated space that has potential to be
significantly upgraded before it is re-let. This space will require an
investment of approximately €6.2 million and, at current rates, is expected
to generate greater than 35% return on investment in annualised rent roll when
re-let. Upgrading this vacated space allows the Company to enhance the
reversionary potential of the portfolio further whilst significantly improving
the quality, desirability and hence value of not only the space that is
invested into but also the whole site.
The German portfolio's headline 84% occupancy rate means that in total 296,446
sqm of space is vacant as at 30 September 2023. When excluding the vacancy
that is subject to investment (5% of total space), and the structural vacancy,
which is not economically viable to develop (2% of total space), the Company's
occupancy rate based on space that is readily lettable is approximately 90%.
Whilst the capex investment programmes are a key part of Sirius' strategy,
they represent one of several ways in which the Company can organically grow
income and capital values. A wide range of asset management capabilities
including the capturing of contractual rent increases (especially whilst
inflation is high), uplifts on renewals and the re-letting of space at higher
rates are expected to continue to contribute to the Company's annualised rent
roll growth going forward.
Asset recycling, acquisitions and disposals
Recycling equity from mature assets into new value-add acquisitions has always
been a significant part of the Sirius business model. It benefits the Company
in many ways including: a) proving enhanced valuations that can also be
crystallised; b) replenishing the growth opportunity within the vacancy and
the capex investment programme; and c) being accretive to FFO per share (and
therefore dividend per share), with a consequent contribution to NAV per share
growth. This is an element of the Company's strategy which Sirius is able to
execute effectively throughout the property cycle and this has been evidenced
by the Company's continued asset recycling initiatives. Even though the market
for both selling and buying remains a challenging one due to the current
economic climate, and with the Company remaining mindful of its net LTV, it
has been able since the balance sheet date to recycle some non-core and mature
assets in Germany and reinvest these funds into some excellent accretive
opportunities in the UK, as detailed below.
Disposals
Whilst the Company did not complete any disposals in the period in both
Germany and in the UK, it did conduct two post balance sheet transactions in
Germany. The sale of its Kassel asset for €7.3 million, which completed on 1
October 2023 represented a 5% premium to book value at the time of
notarisation. This allowed Sirius to dispose of an asset located in a non-core
location, which was 92% let and comprised a total lettable area of 8,342 sqm
of industrial, office, logistics and other space within a 16,217 sqm plot
size. Additionally, the Company notarised the disposal of its Maintal I asset
on 1 November 2023, for a sales price of €40.1 million equating to 6% above
book value, with an expected timing of completion in March 2024. The mixed-use
site consists of 38,000 sqm of storage, industrial and office space, yielding
€2.1 million on NOI at 83% occupancy.
Acquisitions
The Company did not complete on any acquisitions during the period, whilst it
waited for opportunistic acquisitions to arise given market conditions.
Utilising recycled funds from disposals in Germany and free cash on hand, the
Company completed the purchase of two post balance sheet transactions
amounting to £45.8 million (€52.9 million). The first was £10.1 million
(€11.7 million) acquisition, which completed on 2 October 2023 and comprised
two mixed use industrial assets located in Liverpool and the other in Barnsley
with a combined area of 71,957 sq ft (6,685 sqm) of predominantly workshop
space. The purchase price represented a NIY of 9.6% (total acquisition costs).
The second transaction, which was completed on 6 November 2023, was the £35.7
million (€41.2 million) purchase of three multi-let studio sites located in
Islington and Camden in North London, representing a 7.3% net initial yield
after costs. The assets, with a combined area of 103,962 sq ft (9,658 sqm) are
just under 70% let, providing opportunity for the Company to implement its
asset management initiatives.
A summary of the acquisitions and disposals transacted post the balance sheet
date is set out in the tables below:
Table 3a: Acquisitions
Notarised/completed for acquisition Date Total Total Annualised Annualised Occupancy Gross yield
investment acquired rental NOI
£m sq ft income £m
£m
Liverpool and Barnsley* Oct 2023 10.1 71,957 1.3 1.0 99.3% 12.4%
Islington and Camden** Nov 2023 35.7 103,962 2.8 2.6 69.8% 7.8%
Total 45.8 175,919 4.1 3.6 81.8% 9.0%
* Completed on 2 October 2023
** Completed on 6 November 2023
Table 3b: Assets held for sale
Notarised/completed for sale Date Total Total Annualised Annualised Occupancy Gross yield *
sales price disposal rental NOI
€m sqm income €m
€m
Kassel** Oct 23 7.3 8,341 0.5 0.4 92% 7.1%
Maintal*** Nov23 40.1 37,871 2.4 2.1 83% 6.0%
Total 47.4 46,192 2.9 2.5 85% 7.1%
* Calculated on net purchase price.
** Completed 1 October 2023
*** Notarised 1 November 2023, expected completion March 2024
Net LTV and debt refinancing
Net LTV, which reduces the loan balance by free cash (excluding restricted
cash balances) in its calculation, has been reduced to 40.8% (31 March 2023:
41.6%) whilst interest cover at EBITDA level was 8.2x as at 30 September 2023
(31 March 2023: 8.6x).
The Company's balance sheet remains strong through previously communicated
financings of the €170 million Berlin Hyp AG loan facility, for a period of
seven years to 31 October 2030 and the €58.3 million Deutsche Pfandbriefbank
AG facility, for a period of seven years to 31 December 2030. From the
commencement of the new Deutsche Pfandbriefbank AG facility at the end of
December 2023, the Group will have a weighted average cost of debt of 2.1% and
a weighted average debt expiry of 4.2 years. The Company further paid down its
expiring Schuldschein debt of €20 million in the period from existing cash
flows. This ability to refinance debt at favourable rates in the current
market circumstances is an important asset for the Company. The Company has no
debts maturing within the next twelve months, with less than €30 million in
loans coming due between January and March 2025.
All covenants were complied with in full during the period. A summary of the
movement in the Group's debt is set out below:
Table 4: Movement in debt*
€m
Total debt as at 31 March 2023 975.1
Debt repayment (20.0)
Scheduled amortisation (2.7)
Total debt as at 30 September 2023 952.4
* Excludes loan issue costs.
Strength of well-diversified income and tenant base
A combination of the diversity of the Group's tenant base and wide range of
space offerings, which are underpinned by an established operating platform,
continues to be extremely beneficial to Sirius and will be another key element
to help the Company continue to grow over the next few years. Diversity in
both space type and tenancy is key to this. Sirius' portfolio includes
industrial, manufacturing, urban logistics/production, storage and out of town
office space that caters to multiple usages and a vast range of sizes and
tenant types. The diversity of the Company's tenant base ranges from large,
stable and long-term anchor tenants through to the flexible SME and private
customers who are the engine room of any economy.
Germany
Against the backdrop of continued market disruption, resulting in a high
inflationary environment, the importance of a well-diversified tenant base
and wide range of products is evident. The Group's large anchor tenants are
typically multinational corporations occupying production, storage and related
office space whereas the SMEs and individual tenants occupy space on both a
conventional and a flexible basis including space marketed under the Company's
popular Smartspace brand which provides tenants with a fixed cost and high
degree of flexibility. The Company's largest single tenant contributes 2.2% of
total annualised rent roll whilst 8.1% of its annualised rent roll comes from
government tenants. SMEs in Germany, the Mittelstand, are typically defined as
companies with revenues of up to €50.0 million and up to 500 employees. SME
tenants remain a key target group which the Company's internal operating
platform has demonstrated an ability to attract in significant volumes as
evidenced through the high number of enquiries that are generated each month,
mainly through the Company's own marketing channels. The wide range of tenants
that the Sirius marketing and sales team is able to attract is a key
competitive advantage and results in a significantly de-risked business model
when compared to other owners of multi-tenanted light industrial and business
park assets. The table below illustrates the diverse nature of tenant mix
within the German portfolio at the end of the reporting period:
Table 5a: Tenant breakdown - Germany
No. of Occupied % of Annualised % of total Rate
tenants as at sqm occupied rent income* annualised per sqm
30 September sqm €m rent income* €
2023 %
Top 50 anchor tenants1 50 671,023 45% 48.3 39% 5.99
Smartspace SME tenants2 2,838 70,427 5% 8.0 6% 9.50
Other SME tenants3 2,866 738,549 50% 69.2 55% 7.80
Total 5,754 1,479,999 100% 125.5 100% 7.06
1 Mainly large national/international private and public tenants.
2 Mainly small and medium-sized private and public tenants.
3 Mainly small and medium-sized private and retail tenants.
* See glossary section of the Interim Report 2023.
Even with the continuing conflict in Ukraine, Europe's energy supply has
successfully diversified away from Russia dependence. Germany continues to be
well positioned through its early identification of the issue and shoring up
of its gas reserves. As at 30 September 2023, Germany had managed to ensure
its gas storage capacity had been filled, enabling the German economy to
continue operating without expected interruptions this coming winter.
Additionally, the Company's robust and well-diversified tenant base does not
have a significant reliance on gas supplies to continue operating and, as
such, the potential negative impact on Sirius' rent roll is low. In Germany,
the Company sources its utilities and facilities management services in bulk
for its properties and has managed to secure a long-term, four-year contract
after its current utility contract expires in December 2023. This new utility
contract allows the Company to hedge up to 70% of the order volume at a fixed
price at any time, benefiting the expected trend in reduced utility expenses
in the coming years. As a result, its tenants should be sheltered from some of
the higher operating costs that many industrial companies are facing right
now. This is yet another benefit and advantage offered by Sirius that it has
from its intense active management strategy.
UK
BizSpace's top 100 tenants are larger corporate customers representing 23% of
its annualised income, whilst the remaining 77% of tenants are made up of SME
and micro-SME. Whilst the top 100 tenants occupy 1% less space than in the
comparative period, the rent roll contribution has increased by 2% with rates
increasing by 6%. The biggest contributor to rent roll continues to be the
next 900 tenants, where rent roll increased by 16% as a result of a 6%
increase in rates and occupying 9% more space than in the comparative period.
The price led strategy has made very positive contribution to rent roll in
this segment.
Table 5b: Tenant breakdown - UK
No. of Occupied % of Annualised % of total Rate
tenants as at sq ft occupied rent income* annualised per sq ft
30 September sq ft £m rent income* £
2023 %
Top 100 tenants 100 913,699 25% 11.7 23% 12.81
Next 900 tenants 900 1,790,712 49% 23.0 45% 12.84
Remaining tenants 2,494 977,620 27% 16.0 32% 16.37
Total 3,494 3,682,031 100% 50.7 100% 13.78
* See glossary section of the Interim Report 2023.
Smartspace Germany
Sirius' Smartspace products are designed with flexibility in mind, allowing
tenants to benefit from a fixed cost which continues to be desirable even in
challenging market conditions, across a range of affordable serviced offices,
self-storage units and workboxes on a flexible basis that can be tailored to
their needs. The majority of Smartspace has been developed from space that is
either sub-optimal or considered to be structurally void by most light
industrial real estate operators. Following conversion, the area is
transformed into space that can be let at significantly higher rents than the
rest of the business park and, as a result, is highly accretive to both income
and value. In the post-pandemic environment, as businesses manage remote
working, online selling, issues with supply chains and supply shortages, the
Smartspace product line becomes even more attractive because of its
flexibility, pricing and location being on the fringes of major cities.
The fact that the Company is able to convert sub-optimal and unutilised space
into this premium, popular space and achieve rental rates well in excess of
the rest of the portfolio, means that even though Smartspace is only a small
part of Sirius' business, it is a major part of the value enhancement process
and the asset transformation, while providing a valuable service for tenants
located elsewhere on the parks as well as those just using this space.
The annualised rental income now being generated from Smartspace, excluding
the element that covers service charge costs, has decreased by 4.8% to €8.0
million from €8.4 million at the beginning of the period due to adjustments
in service charge allocation whilst it increased by 1.3% year-on-year. The
occupancy of Smartspace has remained stable in the period at 66% (31 March
2023: 65%) whilst the rates have decreased by 4.2% in the last six months from
€9.92 per sqm to €9.50 per sqm.
Environmental, social and governance ("ESG")
We are pleased to report that we continue to make progress in embedding our
ESG programme into our corporate strategy and our business and financial
planning cycles. Throughout this process, we always ensure our approach
remains commercially practical and financially viable.
In Germany, and as announced in our 2022/23 Annual Report, we have achieved
our target reductions in net zero emissions for our Scope 1 and 2 emissions.
Our main focus is now on better understanding the pathway to net zero
emissions, including Scope 3, by 2045 in line with the German national target.
To support this work, our previous assessments are being updated to reflect
revised CRREM methodology which was launched after our year end and are being
subjected to a detailed operational and financial assessment. We intend to be
in a position to outline a more detailed pathway, including shorter-term
decarbonisation plans and targets, in our next Annual Report.
In the UK, we remain committed to achieving carbon neutrality for Scope 1 and
2 emissions in the current financial year and we are commencing an assessment
to understand the potential pathway to net zero emissions including Scope 3
for the UK by 2045 or 2050 in line with CRREM and SBTi with aims to share
initial results during FY2024/25. Equally, our EPC programme continues as a
priority, and we are confident we can achieve the target rating of EPC 'C' by
2027 for our assets as a first stage and the final target of EPC "B" by 2030.
Our ESG departments in both Germany and the UK, which were formed this year,
have been tasked with assessing the operational and financial implications,
including developing asset-by-asset plans and capex requirements to achieve
our net zero and EPC ambitions. We believe these financial and operational
indicators require more detailed analysis and testing by us and will continue
to make progress in these areas and update as appropriate, including through
our TCFD reporting.
Our social and governance programmes remain well established and accepted
within both Sirius in Germany and BizSpace in the UK. Our people are at the
heart of everything we do, and we continue to develop and expand our training
and development offering through the Sirius Training Centre and ensure we
cultivate a supportive and motivating working environment. A focus on
wellbeing remains core to our people strategy, as well as maintaining our
strong diversity, equity, and inclusion programme. We have also made
significant progress in the development of engagement programmes targeted at
benefiting the local communities in which we operate and will be able to
update further at year end.
Lastly, in order to support and test the progress of our ESG roadmap, we have
commenced our new ESG materiality assessment covering both Germany and the UK.
This process will enable us to continue to align our ESG programme to our
corporate strategy and ensure we have taken into account the views of our
stakeholders. We intend to report on the findings of this process in our next
Annual Report.
Outlook
Sirius is pleased with the trading performance of the first six months of the
financial year, which saw continued like-for-like rent roll growth and strong
cash collection rates in both Germany and the UK. The Company remains
committed to a progressive dividend to its shareholders as it continues to
navigate through a challenging macro-economic climate in the UK and Europe and
remains well positioned to continue to grow due to its intensive asset
management initiatives, diversified offerings and effective and dynamic
business model.
Andrew Coombs
Chief Executive Officer
Chris Bowman
Chief Financial Officer
17 November 2023
Statement of Directors' responsibilities
Each of the Directors, whose names and functions appear below, confirm to the
best of their knowledge that the unaudited condensed interim set of
consolidated interim financial statements have been prepared in accordance
with note 2(a), IAS 34 "Interim Financial Reporting", as issued by the IASB,
and the interim management report herein includes a fair review of the
information required by the Disclosure Guidance and Transparency Rules
("DTR"), namely:
• DTR 4.2.7 (R): an indication of important events that have occurred
during the first six months of the financial year, and their impact on the
condensed interim set of consolidated interim financial statements, and a
description of the principal risks and uncertainties for the remaining six
months of the financial year; and
• DTR 4.2.8 (R): any related party transactions that have taken place
in the six month period ended 30 September 2023 that have materially affected,
and any changes in the related party transactions described in the 2023 Annual
Report that could materially affect, the financial position or performance of
Sirius Real Estate Limited during the period.
The Directors of Sirius Real Estate Limited as at the date of this
announcement are set out below:
• Daniel Kitchen, Chairman*
• Caroline Britton, Senior Independent Director*
• Andrew Coombs, Chief Executive Officer
• Chris Bowman, Chief Financial Officer
• James Peggie*
• Mark Cherry*
• Kelly Cleveland*
• Joanne Kenrick*
* Non-Executive Directors.
A list of the current Directors is maintained on the Sirius Real Estate
Limited website: www.sirius-real-estate.com.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in Guernsey governing the preparation and dissemination of
financial information differs from legislation in other jurisdictions.
By order of the Board
Andrew Coombs
Chief Executive Officer
Chris Bowman
Chief Financial Officer
17 November 2023
Independent review report
to Sirius Real Estate Limited
Conclusion
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2023 which comprises condensed consolidated income statement, the
condensed consolidated statement of comprehensive income, the condensed
consolidated statement of financial position, the condensed consolidated
statement of changes in equity, the condensed consolidated statement of cash
flows, and the related notes 1 to 28. We have read the other information
contained in the half yearly financial report and considered whether it
contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2023 is not prepared,
in all material respects, in accordance with I International Accounting
Standard 34 "Interim Financial Reporting" the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority, the
South African Institute of Chartered Accountants (SAICA) Financial Reporting
Guides, as issued by the South African Accounting Practices Committee and the
Financial Pronouncements as issued by the Financial Reporting Standards
Council of South Africa.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements 2410 (UK) "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" (ISRE) issued by the Financial
Reporting Council. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2(d), the annual financial statements of the Group are
prepared in accordance with International Financial Reporting Standards as
issued by the IASB. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
International Accounting Standard 34, "Interim Financial Reporting", the South
African Institute of Chartered Accountants ("SAICA") Financial Reporting
Guides, as issued by the South African Accounting Practices Committee, the
Financial Pronouncements as issued by the Financial Reporting Standards
Council of South Africa and the JSE Limited Listing requirements for condensed
interim reports.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with:
- the Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority;
- the South African Institute of Chartered Accountants (SAICA) Financial
Reporting Guides, as issued by the Accounting Practices Committee;
- the Financial Pronouncements as issued by the Financial Reporting
Standards Council of South Africa;
- IAS 34 "Interim Financial Reporting" and in compliance with the
framework concepts and the measurement and recognition requirements of the
IFRS; and
- the JSE Limited Listing requirements for condensed interim reports.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with guidance
contained in International Standard on Review Engagements 2410 (UK) "Review of
Interim Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
London
17 November 2023
Condensed interim consolidated income statement
for the six months ended 30 September 2023
Notes Unaudited( (1)) Unaudited (1)
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Revenue 4 140.1 130.6
Direct costs 5 (58.8) (57.4)
Net operating income 81.3 73.2
(Loss)/gain on revaluation of investment properties 12 (10.1) 26.8
Gain on disposal of properties 0.0 4.8
Movement in expected credit loss provision((2)) 5 0.5 0.3
Administrative expenses((2)) 5 (24.5) (25.1)
Share of profit of associates 17 0.3 2.6
Operating profit 47.5 82.6
Finance income 8 2.3 1.1
Finance expense 8 (9.2) (9.2)
Change in fair value of derivative financial instruments 8 (0.8) 1.2
Net finance costs (7.7) (6.9)
Profit before tax 39.8 75.7
Taxation 9 (8.1) (5.6)
Profit for the period after tax 31.7 70.1
Profit attributable to:
Owners of the Company 31.7 70.0
Non-controlling interest 0.0 0.1
31.7 70.1
Earnings per share
Basic earnings per share 10 2.71c 6.00c
Diluted earnings per share 10 2.67c 5.92c
(1) Refer to note 2(a).
(2) To conform to the current period presentation, the movement in expected
credit loss provision has been shown as a separate line and this is a
reallocation from administrative expenses for the period ended 30 September
2022.
All operations of the Group have been classified as continuing.
Condensed interim consolidated statement of comprehensive income
for the six months ended 30 September 2023
Notes Unaudited((1)) Unaudited (1)
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Profit for the period after tax 31.7 70.1
Other comprehensive income/(loss) that may be reclassified
to profit or loss in subsequent periods
Foreign currency translation reserve 24 7.6 (19.6)
Other comprehensive income/(loss) after tax that may be reclassified to profit 7.6 (19.6)
or loss in subsequent periods
Other comprehensive income/(loss) for the period after tax 7.6 (19.6)
Total comprehensive income for the period after tax 39.3 50.5
Total comprehensive income attributable to:
Owners of the Company 39.3 50.4
Non-controlling interest 0.0 0.1
39.3 50.5
(1) Refer to note 2(a).
Condensed interim consolidated statement of financial position
as at 30 September 2023
Unaudited((1)) Audited
30 September 31 March
2023 2023
Notes €m €m
Non-current assets
Investment properties 12 2,129.5 2,123.0
Plant and equipment 7.4 7.2
Intangible assets 14 3.9 4.1
Right of use assets 15 13.5 14.4
Other non-current financial assets 16 48.4 48.4
Investment in associates 17 25.0 26.7
Total non-current assets 2,227.7 2,223.8
Current assets
Trade and other receivables 18 28.4 30.5
Derivative financial instruments 0.5 1.3
Cash and cash equivalents 19 115.7 124.3
Total current assets 144.6 156.1
Assets held for sale 13 7.3 8.8
Total assets 2,379.6 2,388.7
Current liabilities
Trade and other payables 20 (103.9) (101.5)
Interest-bearing loans and borrowings 21 (221.8) (243.7)
Lease liabilities 15 (2.3) (2.2)
Current tax liabilities 9 (6.3) (5.4)
Total current liabilities (334.3) (352.8)
Non-current liabilities
Interest-bearing loans and borrowings 21 (721.4) (720.7)
Lease liabilities 15 (36.5) (37.4)
Deferred tax liabilities 9 (85.4) (80.2)
Total non-current liabilities (843.3) (838.3)
Total liabilities (1,177.6) (1,191.1)
Net assets 1,202.0 1,197.6
Equity
Issued share capital 23 - -
Other distributable reserve 24 481.3 516.4
Own shares held 23 (8.1) (8.3)
Foreign currency translation reserve 24 (11.3) (18.9)
Retained earnings 739.6 707.9
Total equity attributable to the owners of the Company 1,201.5 1,197.1
Non-controlling interest 0.5 0.5
Total equity 1,202.0 1,197.6
(1) Refer to note 2(a).
The financial statements were approved by the Board of Directors on 17
November 2023 and were signed on its behalf by:
Daniel Kitchen
Chairman
Company number: 46442
Condensed interim consolidated statement of changes in equity
for the six months ended 30 September 2023
Notes Issued Other Own Foreign Retained Total equity Non- Total
share distributable shares currency earnings attributable controlling equity
capital reserve held translation €m to the interest €m
€m €m €m reserve owners of €m
€m the Company
€m
As at 31 March 2022 (audited) - 570.4 (6.3) (1.7) 628.3 1,190.7 0.4 1,191.1
Profit for the period - - - - 70.0 70.0 0.1 70.1
Other comprehensive loss for the period - - - (19.6) - (19.6) - (19.6)
Total comprehensive income for the period - - - (19.6) 70.0 50.4 0.1 50.5
Dividends paid 1.4 (27.7) - - - (26.3) - (26.3)
Transfer of share capital (1.4) 1.4 - - - - - -
Share-based payment transactions - 1.9 - - - 1.9 - 1.9
Value of shares withheld to settle employee tax obligations - (1.6) - - - (1.6) - (1.6)
Own shares purchased - - (2.3) - - (2.3) - (2.3)
Own shares allocated - - 0.3 - - 0.3 - 0.3
As at 30 September 2022 (unaudited)( (1)) - 544.4 (8.3) (21.3) 698.3 1,213.1 0.5 1,213.6
Profit for the period - - - - 9.6 9.6 - 9.6
Other comprehensive income for the period - - - 2.4 - 2.4 - 2.4
Total comprehensive income for the period - - - 2.4 9.6 12.0 - 12.0
Dividends paid - (31.5) - - - (31.5) - (31.5)
Share-based payment transactions - 3.6 - - - 3.6 - 3.6
Value of shares withheld to settle employee tax obligations - (0.1) - - - (0.1) - (0.1)
As at 31 March 2023 (audited) - 516.4 (8.3) (18.9) 707.9 1,197.1 0.5 1,197.6
Profit for the period - - - - 31.7 31.7 - 31.7
Other comprehensive income for the period - - - 7.6 - 7.6 - 7.6
Total comprehensive income for the period - - - 7.6 31.7 39.3 - 39.3
Dividends paid 25 - (35.0) - - - (35.0) - (35.0)
Share-based payment transactions 7 - 1.5 - - - 1.5 - 1.5
Value of shares withheld to settle employee tax obligations 7 - (1.4) - - - (1.4) - (1.4)
Own shares allocated 23 - (0.2) 0.2 - - - - -
As at 30 September 2023 (unaudited)((1)) - 481.3 (8.1) (11.3) 739.6 1,201.5 0.5 1,202.0
(1) Refer to note 2(a).
Condensed interim consolidated statement of cash flows
for the six months ended 30 September 2023
Notes Unaudited(1) Unaudited(1)
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Operating activities
Profit for the period before tax 39.8 75.7
Gain on disposal of properties 0.0 (4.8)
Net exchange differences in working capital - (0.3)
Share-based payments 7 1.5 1.9
Loss/(gain) on revaluation of investment properties 12 10.1 (26.8)
Change in fair value of derivative financial instruments 8 0.8 (1.2)
Depreciation of property, plant and equipment 5 1.0 1.0
Amortisation of intangible assets 5 0.7 0.6
Depreciation of right of use assets 5 0.9 1.1
Share of profit of associates 17 (0.3) (2.6)
Finance income 8 (2.3) (1.1)
Finance expense 8 9.2 9.3
Changes in working capital
Decrease in trade and other receivables 1.4 3.8
Increase/(decrease) in trade and other payables 3.4 (5.8)
Taxation paid (2.0) (2.7)
Cash flows from operating activities 64.2 48.1
Investing activities
Purchase of investment properties - (0.8)
Prepayments relating to new acquisitions - (3.6)
Capital expenditure on investment properties (16.4) (11.9)
Purchase of plant and equipment and intangible assets (1.3) (3.2)
Proceeds on disposal of properties (including held for sale) 13 7.3 18.6
Dividends received from investments in associates 2.0 -
Increase in loan receivable due from associates - (0.1)
Interest received 2.3 1.1
Cash flows (used in)/from investing activities (6.1) 0.1
Financing activities
Shares purchased - (2.4)
Payment relating to exercise of share options (1.4) (1.7)
Dividends paid to owners of the Company 25 (35.0) (26.2)
Repayment of loans 21 (22.7) (2.7)
Payment of principal portion of lease liabilities (1.1) (0.8)
Finance charges paid (6.8) (2.8)
Cash flows used in financing activities (67.0) (36.6)
(Decrease)/increase in cash and cash equivalents (8.9) 11.6
Net exchange difference 0.3 (0.5)
Cash and cash equivalents as at the beginning of the period 124.3 151.0
Cash and cash equivalents as at the period end 19 115.7 162.1
(1) Refer to note 2(a)
Notes forming part of the financial statements
for the six months ended 30 September 2023
1. General information
Sirius Real Estate Limited (the "Company") is a company incorporated in
Guernsey and resident in the United Kingdom for tax purposes, whose shares are
publicly traded on the Main Market of the London Stock Exchange ("LSE")
(primary listing) and the Main Board of the Johannesburg Stock Exchange
("JSE") (primary listing).
The consolidated financial information of the Company comprises that of the
Company and its subsidiaries (together referred to as the "Group" or "Sirius")
for the six month period ended 30 September 2023.
The principal activity of the Group is the investment in, and development of,
commercial and industrial property to provide conventional and flexible
workspace in Germany and the United Kingdom ("UK").
2. Significant accounting policies
(a) Basis of preparation
The unaudited condensed interim set of consolidated financial statements has
been prepared on a historical cost basis, except for investment properties,
investment properties held for sale and derivative financial instruments,
which have been measured at fair value. The unaudited condensed interim set of
consolidated financial statements is presented in euros and all values are
rounded to the nearest hundred thousand shown in millions (€m), except where
otherwise indicated. For the comparative period for the six months to 30
September 2022 the values were rounded to the nearest thousand (€000) but
are now shown in millions (€m) to the nearest hundred thousand. The
unaudited Interim Reports in prior years were presented in euros and all
values were rounded to the nearest thousand (€000).
The Group prepares its condensed interim set of financial statements in
accordance with the Disclosure and Transparency Rules of the United Kingdom
Financial Conduct Authority, the SAICA Financial Reporting Guides as issued by
the Accounting Practices Committee, Financial Reporting Pronouncements as
issued by the Financial Reporting Standards Council, the JSE Limited Listings
Requirements, IAS 34 "Interim Financial Reporting" and in compliance with the
framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB") as well as The Companies
(Guernsey) Law, 2008.
The financial information in this unaudited condensed interim set of
consolidated financial statements does not comprise statutory accounts. This
unaudited condensed interim set of consolidated financial statements has been
reviewed, not audited, by the Group's auditor, Ernst & Young LLP, which
issued an unmodified review opinion. The financial information presented for
the year ended 31 March 2023 is derived from the statutory accounts for that
year. Statutory accounts for the year ended 31 March 2023 were approved by the
Board on 2 June 2023. The report of the auditor on those accounts was (i)
unqualified, (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying its report, and
(iii) did not contain a statement under Sections 263 (2) or (3) of The
Companies (Guernsey) Law, 2008.
As at 30 September 2023 the Group's unaudited condensed interim set of
consolidated financial statements reflects consistent accounting policies and
methods of computation as used in the previous financial year.
(b) Changes in accounting policies
There were several new, and amendments to, standards and interpretations which
were applicable for the first time for the Group from 1 April 2023. None of
them have had a significant impact on the condensed interim financial
statements of the Group.
(c) Non-IFRS measures
The Directors have chosen to disclose EPRA earnings, EPRA net asset value
metrics and EPRA loan to value, which are widely used alternative metrics to
their IFRS equivalents (further details on EPRA best practice recommendations
can be found at www.epra.com). Note 10 to the condensed interim financial
statements includes a reconciliation of basic and diluted earnings to EPRA
earnings. Note 11 to the condensed interim financial statements includes a
reconciliation of net assets to EPRA net asset value metrics. Note 21 to the
condensed interim financial statements includes a calculation of EPRA loan to
value ratio.
The Directors are required, as part of the JSE Limited Listings Requirements,
to disclose headline earnings; accordingly, headline earnings are calculated
using basic earnings adjusted for revaluation gains/losses (net of related
tax), gains/losses on disposal of properties (net of related tax),
non-controlling interest ("NCI") relating to revaluation (net of related tax)
and revaluation gain/loss on investment property relating to associates (net
of related tax). Note 10 to the condensed interim financial statements
includes a reconciliation between IFRS and headline earnings.
The Directors have chosen to disclose adjusted earnings in order to provide an
alternative indication of the Group's underlying business performance;
accordingly, it excludes the effect of adjusting items (net of related tax).
Note 10 to the condensed interim financial statements includes a
reconciliation of adjusting items included within adjusted earnings, with
certain adjusting items stated within administrative expenses in note 5 and
certain finance costs in note 8.
The Directors have chosen to disclose adjusted profit before tax and funds
from operations in order to provide an alternative indication of the Group's
underlying business performance and to facilitate the calculation of its
dividend pool; a reconciliation between profit before tax and funds from
operations is included within note 25 to the condensed interim financial
statements. Within adjusted profit before tax are adjusting items as described
above gross of related tax.
Further details on non-IFRS measures can be found in the business analysis
section of this document.
(d) Statement of compliance
The unaudited condensed interim financial statements have been prepared in
accordance with the Disclosure and Transparency Rules of the United Kingdom
Financial Conduct Authority, the SAICA Financial Reporting Guides as issued by
the Accounting Practices Committee, Financial Reporting Pronouncements as
issued by the Financial Reporting Standards Council, the JSE Limited Listings
Requirements, IAS 34 "Interim Financial Reporting" and in compliance with the
framework concepts and the measurement and recognition requirements of IFRS as
well as The Companies (Guernsey) Law, 2008. They do not include all of the
information required for the full annual financial statements and should be
read in conjunction with the consolidated financial statements of the Group as
at and for the year ended 31 March 2023. The unaudited condensed interim
financial statements have been prepared on the basis of the accounting
policies set out in the Group's annual financial statements for the year ended
31 March 2023 except for the changes in accounting policies as shown in note 2
(b). The financial statements for the year ended 31 March 2023 have been
prepared in accordance with IFRS issued by the IASB.
(e) Going concern
The Group has prepared its going concern assessment for the period to 31 March
2025 (the "going concern period"), a period greater than twelve months and
chosen to include the maturity of certain loans falling due in the fourth
quarter of the year ended 31 March 2025. The Directors also evaluated
potential events and conditions beyond the going concern period that may cast
significant doubt on the Group's ability to continue as a going concern, with
no significant transactions or events of material uncertainty identified.
The Group's going concern assessment is based on a forecast of the Group's
future cash flows. This considers Management's base case scenario and a severe
but plausible downside scenario where sensitivities are applied to model the
outcome on the occurrence of downside assumptions explained below. It
considers the Group's principal risks and uncertainties and is dependent on a
number of factors including financial performance, continued access to lending
facilities (see note 21) and the ability to continue to operate the Group's
secured and unsecured debt structure within its financial covenants. Within
the going concern period, three of the Group's debt facilities mature, with a
€5.0m tranche of the HSBC Schuldschein loan falling due in January 2025 and
a €10.0m tranche falling due in March 2025 and the €12.8m Saarbrücken
Sparkasse facility falling due in February 2025. No further debt of the Group
matures until June 2026.
The severe but plausible scenario models a potential downturn in the Group's
performance, including the potential impact of downside macro-factors such as
geopolitical instability, future energy shortages, further cost increases due
to inflation, pressures from increasing interest rates and outward yield
movements on the Group's financial position and future prospects. The cash
flow projections incorporate assumptions on future trading performance and
potential valuation movements in order to estimate the level of headroom on
the Group's debt facilities and covenants for loan to value, debt service
cover, EPRA net asset value, unencumbered assets ratios, fixed charge ratios
and occupancy ratios set out within the relevant finance agreements.
The impact of the macro-factors above has placed further pressure on the costs
of the business, however this did not result in any deterioration in the
Group's income streams in the year ended 31 March 2023 or the period ended 30
September 2023 and asset values remained relatively stable throughout.
However, the Directors continue to be mindful of the challenging macro-factors
present in the market and maintain their view held on 31 March 2023 on the
severity of the falls in valuations assessed in the severe but plausible
downside scenario in the going concern period.
The base case and severe but plausible downside scenarios include the
following assumptions applied to both the German and UK portfolios:
Base case:
» 5.5% growth in rent roll at 30 September 2023, principally from contractual
increases in rents and organic growth through lease renewals;
» increasing cost levels in line with forecast inflation of 6% to December
2024 and 2% to March 2025;
» continuation of forecast capex investment;
» utilisation of the contractually committed Berlin Hyp AG and Deutsche
Pfandbriefbank AG facilities on the maturity of existing facilities in October
and December 2023;
» payment of contractual loan interest and loan amortisation amounts,
refinancing of €5.0m and €10.0m Schuldschein facilities falling due in
January and March 2025 respectively as well as the €12.8m Saarbrücken
Sparkasse facility and utilisation of the new Berlin Hyp AG and Deutsche
Pfandbriefbank AG facilities on the maturity of existing facilities in October
and December 2023; and
» only acquisitions and disposals which are contractually committed are made,
which includes the €40.1m disposal of Maintal which was notarised on 1
November 2023 and the €41.2m acquisition of Islington and Camden which was
completed on 6 November 2023.
Severe but plausible downside scenario:
» reduction in occupancy and rental income of 10% per annum from the base
case assumptions;
» reduction in service charge recovery of 10% per annum from the base case
assumptions;
» reduction in property valuations of 10% per annum;
» continuation of forecast capex investment;
» continuation of forecast dividend payments in line with historic dividend
payouts;
» utilisation of the contractually committed Berlin Hyp AG and Deutsche
Pfandbriefbank AG facilities on the maturity of existing facilities in October
and December 2023;
» payment of contractual loan interest and loan amortisation amounts,
repayment of €5.0m and €10.0m Schuldschein facilities falling due in
January and March 2025 respectively as well as refinancing the €12.8m
Saarbrücken Sparkasse facility; and
» only acquisitions and disposals which are contractually committed are made,
which includes the €40.1m disposal of Maintal which was notarised on 1
November 2023 and the €41.2m acquisition of Islington and Camden which was
completed on 6 November 2023.
The Directors are of the view that there is a remote probability of a more
severe scenario arising than the above severe but plausible downside scenario
based upon the Group's track record of performance in challenging scenarios,
most recently through the high inflationary environment in both Germany and
the UK, the Covid-19 pandemic and post-pandemic period. In addition, the Group
has already secured the refinancing of the €58.3m Deutsche Pfandbriefbank AG
and €170.0m Berlin Hyp AG facilities in advance of their maturity dates in
the going concern period.
In the severe but plausible downside scenario, the Group is expected to
maintain sufficient liquidity, and comply with its loan covenants, with no
covenant breaches forecasted.
The Directors are of the view that there is a high probability of securing the
refinancing or an alternative source of secured or unsecured funding to
replace the aggregate €15.0m Schuldschein facilities and the €12.8m
Saarbrücken Sparkasse facility. This judgement has been informed by the
Group's financial forecasts and the Group's track-record in previously
refinancing maturing debt.
In the severe but plausible downside scenario, the Group assumes full
repayment of the maturing loan obligations as they fall due, amounting to
€27.8m in the going concern period. The Group's forecasts indicate
sufficient free cash would be available to repay these funds in full and
maintain sufficient liquidity to not require the additional mitigating actions
as outlined below available to it, should the severe but plausible downside
scenario come to pass.
The Group also performed a reverse stress test over the impact of a fall in
its property valuations and income reductions during the going concern period.
This showed that the Group could withstand a fall in valuations of 21%, before
there was a loan to value covenant breach and a reduction of 26% of income
before any income related covenants would breach, levels which the Group has
not seen before. This is therefore considered to be a remote possibility
during the going concern period. In each of the scenarios considered for going
concern, the Group forecasts having sufficient free cash available and if
required, could utilise available mitigating actions which would be available
to the Group in the going concern review period, which include restricting
dividends, reducing capital expenditure or the disposal of assets. The
restriction of dividends or reducing capital expenditure are within the
control of the Directors and there is sufficient time to implement these
restrictions, if required. The Directors have not identified any material
uncertainties which may cast significant doubt on the Group's ability to
continue as a going concern for the duration of the going concern period.
After due consideration of the going concern assessment for the period to 31
March 2025, the Board believes it is appropriate to adopt the going concern
basis in preparing its financial statements.
(f) Principal risks and uncertainties
The key risks that could affect the Group's medium-term performance and the
factors which mitigate these risks have not changed substantially from those
set out on pages 72 to 81 of the Group's Annual Report and Accounts 2023 and
have been assessed in line with the requirements of the 2018 UK Corporate
Governance Code. The risks are set out below. The Board is satisfied that the
Company continues to operate within its risk profile for the remaining six
months of the financial year.
Principal risks summary
Risk area Principal risk(s)
1. Financing • Availability and pricing of debt
• Leverage on returns
• Compliance with loan facility covenants
• Availability and pricing of equity capital
• Reputational risk
2. Valuation • Property inherently difficult to value
• Susceptibility of property market to change in value
3. Markets • Participation within two geographically diverse markets
• Reliance on specific industries and the SME market
• Reduction in occupancy
4. Acquisitive growth • Decrease in number of acquisition opportunities coming to market
• Failure to acquire suitable properties with desired returns
5. Organic growth • Failure to deliver capex investment programmes
• Failure to refuel capex investment programmes
• Failure to achieve targeted returns from investments
6. Customer • Decline in demand for space
• Significant tenant move-outs or insolvencies
• Exposure to tenants' inability to meet rental and other lease
commitments
• Tenant affordability
7. Regulatory and tax • Non-compliance with tax or regulatory obligations
8. People • Inability to recruit and retain people with the appropriate skillset
to deliver the Group strategy
9. Systems and data • System failures and loss of data
• Security breaches
• Data protection
10. Macro-economic • Delays in cash collection and tenant insolvencies
environment • Inflationary pressure leading to increased costs
• Increasing energy costs caused by a variety of economic and
geopolitical factors
• Interest rate movements impacting the commercial real estate market
11. ESG • Unforeseen costs relating to physical and transition risks
associated with climate change
• Reputational risk
• Failure to meet shareholder and societal requirements or
expectations
• Restricted access to financing market due to higher requirements
("green financing")
12. Foreign currency • Financial impact of uncontrollable foreign currency fluctuation on
earnings and net asset value
3. Operating segments
Information on each operating segment based on geographical location in which
the Group operates is provided to the chief operating decision maker, namely
the Group's Senior Management Team, on an aggregated basis and represented as
operating profit and expenses.
The investment properties that the Group owns are aggregated into segments
with similar economic characteristics such as the nature of the property, the
products and services it provides, the customer type for the product served,
and the method in which the services are provided. The Group's Senior
Management Team considers that this is best achieved through the operating
segments of German assets and UK assets. The Group's investment properties are
considered to be their own segment. The properties at each location (Germany
and the UK) have similar economic characteristics. These have been aggregated
into two operating segments based on location in accordance with the
requirements of IFRS 8. The Group's Senior Management Team considers the two
locations to be separate segments. Further disaggregation of the investment
properties is disclosed in note 12 owing to the range in values of key inputs
and assumptions underpinning the property valuation. Consequently, the Group
is considered to have two reportable operating segments, as follows:
• Germany; and
• the UK.
Consolidated information by segment is provided on a net operating income
basis, which includes revenues made up of gross rents from third parties and
direct expenses, gains/losses on property valuations and property disposals.
All of the Group's share of profit of associates and administrative expenses
including amortisation and depreciation and movement in expected credit loss
provision are separately disclosed as part of operating profit. Group
administrative costs, finance income and expenses and change in fair value of
derivative financial instruments are disclosed.
Income taxes and depreciation are not reported to the Senior Management Team
on a segmented basis. There are no sales between segments. There is no single
tenant that makes up more than 10% of each segment's revenue or Group revenue.
Unaudited six months Unaudited six months
ended 30 September 2023 ended 30 September 2022
Germany UK Total Germany UK Total
€m €m €m €m €m €m
Rental income from investment properties 62.5 17.7 80.2 58.1 19.3 77.4
Rental income from managed properties - - - 2.3 - 2.3
Other income from investment properties 1.9 0.4 2.3 1.7 0.4 2.1
Service charge income from investment properties 37.2 12.0 49.2 31.0 8.5 39.5
Other income from managed properties 3.1 - 3.1 2.5 - 2.5
Service charge income from managed properties 5.3 - 5.3 6.8 - 6.8
Revenue 110.0 30.1 140.1 102.4 28.2 130.6
Direct costs (48.5) (10.3) (58.8) (48.3) (9.1) (57.4)
Net operating income 61.5 19.8 81.3 54.1 19.1 73.2
(Loss)/gain on revaluation of investment properties 8.4 (18.5) (10.1) 19.4 7.4 26.8
Gain on disposal of properties 0.0 - 0.0 - 4.8 4.8
Depreciation and amortisation (2.1) (0.5) (2.6) (2.1) (0.7) (2.8)
Movement in expected credit loss provision((1)) 0.5 - 0.5 0.3 - 0.3
Other administrative expenses((1)) (16.8) (5.1) (21.9) (19.0) (3.3) (22.3)
Share of profit of associates 0.3 - 0.3 2.6 - 2.6
Operating profit/(loss) 51.8 (4.3) 47.5 55.3 27.3 82.6
Finance income 1.5 0.8 2.3 1.1 - 1.1
Amortisation of capitalised finance costs (1.5) - (1.5) (1.6) - (1.6)
Other finance expense (5.6) (2.1) (7.7) (5.5) (2.1) (7.6)
Change in fair value of derivative financial instruments (0.8) - (0.8) 1.2 - 1.2
Net finance costs (6.4) (1.3) (7.7) (4.8) (2.1) (6.9)
Segment profit/(loss) for the period before tax 45.4 (5.6) 39.8 50.5 25.2 75.7
(1) To conform to the current period presentation, the movement in
expected credit loss provision has been shown as a separate line and this is a
reallocation from other administrative expenses for the period ended 30
September 2022.
Unaudited 30 September 2023 Audited 31 March 2023
Germany UK Total Germany UK Total
€m €m €m €m €m €m
Segment assets
Investment properties 1,703.9 425.6 2,129.5 1,691.6 431.4 2,123.0
Investment in associates 25.0 - 25.0 26.7 - 26.7
Other non-current assets(1) 21.4 3.4 24.8 21.9 3.8 25.7
Total segment non-current assets 1,750.3 429.0 2,179.3 1,740.2 435.2 2,175.4
(1) Consists of plant and equipment, intangible assets and right of use
assets.
4. Revenue
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Rental income from investment properties 80.2 77.4
Rental income from managed properties - 2.3
Other income from investment properties 2.3 2.1
Service charge income from investment properties 49.2 39.5
Other income from managed properties 3.1 2.5
Service charge income from managed properties 5.3 6.8
Total revenue 140.1 130.6
Other income relates to income associated with conferencing and catering of
€2.3m (30 September 2022: €2.1m) and fee income from managed properties of
€3.1m (30 September 2022: €2.5m).
Total revenue from contracts with customers includes service charge income and
other income totalling €51.5m from investment properties (30 September 2022:
€41.6m) and €8.4m from managed properties (30 September 2022: €9.3m).
A reconciliation of the revenue from contracts with customers with the amounts
disclosed in the segment information (see note 3) is as follows:
Unaudited six months Unaudited six months
ended 30 September 2023 ended 30 September 2022
Germany UK Total Germany UK Total
€m €m €m €m €m €m
Rental income from investment properties 62.5 17.7 80.2 58.1 19.3 77.4
Rental income from managed properties - - - 2.3 - 2.3
Total rental income 62.5 17.7 80.2 60.4 19.3 79.7
Other income from investment properties 1.9 0.4 2.3 1.7 0.4 2.1
Service charge income from investment properties 37.2 12.0 49.2 31.0 8.5 39.5
Other income from managed properties 3.1 - 3.1 2.5 - 2.5
Service charge income from managed properties 5.3 - 5.3 6.8 - 6.8
Total revenue from contracts with customers 47.5 12.4 59.9 42.0 8.9 50.9
Total revenue 110.0 30.1 140.1 102.4 28.2 130.6
5. Operating profit
The following items have been charged in arriving at operating profit:
Direct costs
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Service charge costs relating to investment properties 48.8 45.0
Costs relating to managed properties 6.5 9.8
Non-recoverable maintenance costs 3.5 2.6
Direct costs 58.8 57.4
Movement in expected credit loss provision
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Expected credit loss recognised 8.2 7.4
Expected credit loss reversed (8.7) (7.7)
Movement in expected credit loss provision((1)) (0.5) (0.3)
(1) To conform to the current period presentation, the movement in
expected credit loss provision has been shown as a separate line in the
condensed interim consolidated income statement and this is a reallocation
from other administrative expenses for the period ended 30 September 2022.
The expected credit loss provision has decreased during the period mainly due
to the decrease of gross trade receivables.
Administrative expenses
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Audit and non-audit fees to audit firm 0.6 0.6
Legal and professional fees 3.0 2.7
Other administration costs 2.8 2.6
Share-based payments 1.5 1.9
Employee costs 11.7 11.8
Director fees and expenses 0.3 0.3
Depreciation of plant and equipment 1.0 1.1
Amortisation of intangible assets 0.7 0.6
Depreciation of right of use assets (see note 15) 0.9 1.1
Marketing 1.7 1.3
Exceptional items 0.3 1.1
Administrative expenses((1)) 24.5 25.1
(1) To conform to the current period presentation, the movement in
expected credit loss provision has been shown as a separate line in the
condensed interim consolidated income statement and this is a reallocation
from other administrative expenses for the period ended 30 September 2022.
Other administration costs include net foreign exchange losses in amount of
€0.02m as a result of declining British pound sterling ("GBP") rates
throughout the period (30 September 2022: €0.3m loss as a result of
declining British pound sterling ("GBP") rates throughout the period).
Employee costs as stated above relate to costs which are not recovered through
service charge.
Exceptional items relate to the following:
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Other fees for projects(1) - 2.9
Legal case costs(2) 0.3 0.3
Lease agreement termination fees(3) - 0.9
Decrease in tax liabilities recognised on acquisition of BizSpace Group(4) - (3.0)
Total 0.3 1.1
(1) The other fees for projects amounting to €2.9m for the period ended 30
September 2022 were related to capital management measures undertaken by the
Group. These measures are non-recurring in nature, outside the normal course
of business and have been identified as exceptional items.
(2) The legal case costs amounting to €0.3m relates to one legal case (see
note 20). The legal cases in the period ended 30 September 2022 amounting to
€0.3m relates to multiple legal cases including the legal case mentioned in
note 20. These legal cases are non-recurring in nature, outside the normal
course of business and have been identified as exceptional items.
(3) The lease agreement termination fee amounting to €0.9m for the period
ended 30 September 2022 was compensation for early termination of a rental
contract at the end of July 2022 within the UK segment of the Group. These
termination fees are non-recurring in nature, outside the normal course of
business and have been identified as exceptional items.
(4) In the period ended 30 September 2022, the Group identified an error in
the accrual of tax liabilities arising in the BizSpace Group as at 31 March
2022, resulting in an overstatement of the tax liability of €5.0m, of which
€3.0m arose on acquisition. These were assessed as not being material to the
31 March 2022 financial statements and the reduction in the liability was
recorded in the financial statements for the six months ended 30 September
2022. The amounts have been recorded within administrative expenses under
exceptional items and the taxation (see note 9) lines of the income statement.
6. Employee costs and numbers
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Wages and salaries 15.4 14.6
Social security costs 2.5 2.2
Defined contribution pension scheme 0.2 0.2
Other employment costs 0.4 0.4
Total 18.5 17.4
Included in the costs related to wages and salaries for the period are
expenses of €1.5m (30 September 2022: €1.9m) relating to the granting or
award of shares (see note 7). The costs for all periods include those relating
to Executive Directors.
All employees are employed directly by one of the following Group subsidiary
companies: Sirius Facilities GmbH, Sirius Facilities (UK) Limited, Curris
Facilities & Utilities Management GmbH, SFG NOVA GmbH, Sirius Finance
(Cyprus) Limited, BizSpace Limited, BizSpace II Limited, M25 Business Centres
Limited and Sirius Corporate Services B.V. The average number of people
employed by the Group during the period was 407 (30 September 2022: 413)
expressed in full-time equivalents. In addition, as at 30 September 2023, the
Board of Directors consists of six Non-Executive Directors (30 September 2022:
six) and two Executive Directors (30 September 2022: two).
7. Employee schemes
Equity-settled share-based payments
2018 LTIP
The LTIP for the benefit of the Executive Directors and the Senior Management
Team was approved in 2018. Awards granted under the LTIP are made in the form
of nil-cost options which vest after the three year performance period with
vested awards being subject to a further holding period of two years. Awards
are split between ordinary and outperformance awards. Ordinary awards carry
both adjusted net asset value per share ("TNR") (two-thirds of award) and
relative total shareholder return ("TSR") (one-third of award) performance
conditions and outperformance awards carry a sole TNR performance condition.
Awards are equity settled. The employees' tax obligation will be determined
upon the vesting date of the share issue.
The following assumptions were used in calculating the fair value per share
for the TNR and TSR elements of the awards that were granted:
June 2019 June 2020
grant
grant
TNR TSR TNR TSR
Valuation methodology Black-Scholes Monte-Carlo Black-Scholes Monte-Carlo
Calculation for 2/3 ordinary award/ 1/3 ordinary 2/3 ordinary 1/3 ordinary award
outperformance award award award
Total charge for the award - €m 2.1 2.3
Expected lapse rate 0% 0% 0% 0%
Share price at grant date - € 0.73 0.73 0.84 0.84
Exercise price - € nil nil nil nil
Expected volatility - %(1) 23.8 23.8 38.5 38.5
Performance projection period - years 2.80 2.67 2.79 2.67
Expected dividend yield - % 4.56 4.56 4.28 4.28
Risk-free rate based on European (0.695) p.a. (0.695) p.a. (0.68) p.a. (0.68) p.a.
Expected outcome of performance conditions - % 100/25 100 88.8 n/a
Fair value per share - € 0.643 0.340 0.745 0.564
Weighted average fair value of share - €(2) 0.54 0.68
Number of shares granted 2,506,667/690,000 1,253,333(3) 2,400,000 1,200,000
Forfeited during the performance period - 500,000
(1) Assumptions considered in this model include: expected volatility of
the Company's share price, as determined by calculating the historical
volatility of the Company's share price over the period immediately prior to
the date of grant and commensurate with the expected life of the awards;
dividend yield based on the actual dividend yield as a percentage of the share
price at the date of grant; performance projection period; risk-free rate; and
correlation between comparators.
(2) Charges for the awards are based on fair values calculated at the
grant date and expensed on a straight-line basis over the period that
individuals are providing service to the Group in respect of the awards.
(3) Another 93,039 share awards have been granted throughout the
performance period as part of dividend equivalents.
The June 2019 grant vested on 18 July 2022. Vesting was at partial level for
all participants resulting in the exercise of 1,620,093 shares with a weighted
average share price of €1.02 at the date of exercise. 1,391,585 shares have
been surrendered in relation to the partial settlement of certain
participants' tax liabilities arising in respect of the vesting. An amount of
€1.6m was paid for the participants' tax liabilities.
The remaining 1,531,361 shares vested on 23 November 2022. Final vesting
resulted in the exercise of 811,621 shares with a weighted average share price
of €1.02 at the date of exercise. 719,740 shares have been surrendered in
relation to the settlement of certain participants' tax liabilities arising in
respect of the vesting.
The June 2020 grant vested on 22 May 2023. Vesting resulted in the exercise of
1,859,000 shares with a weighted average share price of €1.02 at the date of
exercise. 1,241,000 shares have been surrendered in relation to the partial
settlement of certain participants' tax liabilities arising in respect of the
vesting. An amount of €1.3m was paid for the participants' tax liabilities.
2021 LTIP
The LTIP for the benefit of the Executive Directors and the Senior Management
Team was approved in 2021. Awards granted under the LTIP are made in the form
of nil-cost options which vest after the three year performance period with
vested awards being subject to a further restricted period of two years when
shares acquired on exercise cannot be sold. Awards are subject to TNR
(two-thirds of award) and relative TSR (one-third of award) performance
conditions. Awards are equity settled. The employees' tax obligation will be
determined upon the vesting date of the share issue.
The following assumptions were used in calculating the fair value per share
for the TNR and TSR elements of the awards that were granted:
August 2021 July 2022 June 2023 September 2023
grant
grant grant grant
TNR TSR TNR TSR TNR TSR TNR TSR
Valuation methodology Black-Scholes Monte-Carlo Black-Scholes Monte-Carlo Black-Scholes Monte-Carlo Black-Scholes Monte-Carlo
Calculation for 2/3 ordinary award 1/3 ordinary award 2/3 ordinary award 1/3 ordinary award 2/3 ordinary award 1/3 ordinary award 2/3 ordinary award 1/3 ordinary award
Total charge for the award - €m 4.7 2.6 2.9 0.8
Expected lapse rate 0% 0% 0% 0% 0% 0% 0% 0%
Share price at grant date - € 1.39 1.39 1.05 1.05 1.04 1.04 1.03 1.03
Exercise price - € nil nil nil nil nil nil nil nil
Expected volatility - %(1) 40.5 40.5 41.2 41.2 32.7 32.7 31.4 31.4
Expected life - years 2.91 2.91 2.95 2.95 2.97 2.97 2.68 2.68
Performance projection period - years 2.66 2.66 2.70 2.70 2.81 2.81 2.52 2.52
Expected dividend yield - % 2.79 2.79 4.21 4.21 5.52 5.52 5.47 5.47
Risk-free rate based on European treasury bonds rate of return - % (0.817) p.a. (0.817) p.a. 0.609 p.a. 0.609 p.a. 2.65 p.a. 2.65 p.a. 3.05 p.a. 3.05 p.a.
Fair value per share - € 1.28 (2) 0.84 (3) 0.93 (2) 0.40 (3) 0.88(2) 0.59(3) 0.89 (2) 0.71 (3)
Weighted average fair value of share - €(4) 1.13 0.75 0.77 0.83
Number of shares granted 2,769,413 1,384,706 2,320,019 1,160,009 2,462,171 1,231,086 604,001 302,001
Forfeited during the performance period 725,000 635,000 - -
(1) Expected volatility of the Company's share price was determined by
calculating the historical volatility of the Company's share price over the
period immediately prior to the date of grant, commensurate with the term to
the end of the performance period.
(2) In accordance with IFRS 2, TNR is classed as a non-market performance
condition. As such, the fair value has been calculated using a Black-Scholes
model and does not take the expected outcome of the performance condition into
account. The Company currently estimates the expected vesting outcome for the
TNR award to be 100%.
(3) In accordance with IFRS 2, relative TSR is classed as a market-based
performance condition. As such, projected performance and the likelihood of
achieving the condition have been taken into account when calculating the fair
value using a Monte-Carlo model. The model also uses assumptions for the
expected volatility of comparator companies, the pairwise correlation between
comparator companies and TSR performance between the start of the performance
period and the date of grant.
(4) Charges for the awards are based on fair values calculated at the grant
date and expensed on a straight-line basis over the period that individuals
are providing service to the Group in respect of the awards.
2021 SIP
A SIP for the benefit of senior employees was approved in 2021. Awards granted
under the SIP are made in the form of a conditional right to receive a
specified number of shares for nil cost which vest after the three year
performance period with vested awards being subject to a further restricted
period of one year when shares cannot be sold. Awards are subject to TNR
(two-thirds of award) and relative TSR (one-third of award) performance
conditions. Awards are equity settled. The employees' tax obligation will be
determined upon the vesting date of the share issue.
The following assumptions were used in calculating the fair value per share
for the TNR and TSR elements of the awards that were granted:
September 2021 April 2022 August 2022 June 2023 June 2023 September 2023
grant grant grant (UK) grant grant
grant
TNR TSR TNR TSR TNR TSR TNR TSR TNR TSR TNR TSR
Valuation methodology Black- Monte- Black-Scholes Monte- Black-Scholes Monte- Black-Scholes Monte- Black-Scholes Monte- Black-Scholes Monte-
Scholes
Carlo
Carlo
Carlo
Carlo
Carlo
Carlo
Calculation for 2/3 ordinary award 1/3 ordinary award 2/3 ordinary award 1/3 ordinary award 2/3 ordinary award 1/3 ordinary award 2/3 ordinary award 1/3 ordinary award 2/3 ordinary award 1/3 ordinary award 2/3 ordinary award 1/3 ordinary award
Total charge for the award - €m 3.7 0.03 1.5 1.3 0.4 0.4
Expected lapse rate 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Share price at grant date - € 1.49 1.49 1.51 1.51 1.13 1.13 1.04 1.04 1.04 1.04 1.03 1.03
Exercise price - € n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Expected volatility - %(1) 40.7 40.7 32.5 32.5 29.7 29.7 32.7 32.7 32.7 32.7 31.3 31.3
Expected life - years 3.48 3.48 2.92 2.92 2.58 2.58 3.73 3.73 2.97 2.97 3.49 3.49
Performance 2.56 2.56 2.00 2.00 1.66 1.66 2.81 2.81 2.81 2.81 2.57 2.57
projection period - years
Expected dividend yield - % 2.60 2.60 2.93 2.93 3.96 3.96 5.52 5.52 5.52 5.52 5.60 5.60
Risk-free rate based on European treasury bonds rate of return - % (0.737) (0.737) (0.074) (0.074) 0.184 0.184 2.65 2.65 2.65 2.65 2.82 2.82
p.a. p.a. p.a. p.a. p.a. p.a. p.a. p.a. p.a. p.a. p.a. p.a.
Fair value per share - € 1.36 (2) 0.92 (3) 1.39 (2) 0.89 (3) 1.02 (2) 0.46 (3) 0.85 (2) 0.56(3) 0.88 (2) 0.60(3) 0.85 (2) 0.6 5(3)
Weighted average fair value of share - €(4) 1.21 1.22 0.83 0.77 0.77 0.78
Number of shares granted 2,049,667 1,024,833 20,000 10,000 1,166,667 583,333 1,166,667 583,333 333,333 166,667 426,667 213,333
Forfeited during the perf. period 366,000 - 350,000 - - -
(1) Expected volatility of the Company's share price was determined by
calculating the historical volatility of the Company's share price over the
period immediately prior to the date of grant, commensurate with the term to
the end of the performance period.
(2) In accordance with IFRS 2, TNR is classed as a non-market performance
condition. As such, the fair value has been calculated using a Black-Scholes
model and does not take the expected outcome of the performance condition into
account. The Company currently estimates the expected vesting outcome for the
TNR award to be 100%.
(3) In accordance with IFRS 2, relative TSR is classed as a market-based
performance condition. As such, projected performance and the likelihood of
achieving the condition have been taken into account when calculating the fair
value using a Monte-Carlo model. The model also uses assumptions for the
expected volatility of comparator companies, the pairwise correlation between
comparator companies and TSR performance between the start of the performance
period and the date of grant.
(4) Charges for the awards are based on fair values calculated at the grant
date and expensed on a straight-line basis over the period that individuals
are providing service to the Group in respect of the awards.
Deferred Bonus Plan
The Deferred Bonus Plan ("DBP") is subject to rules approved by the Board and
to the Directors' Remuneration Policy (approved by shareholders triennially)
for Executive Directors of Sirius Real Estate Limited only.
The Executive Directors consisting of the Chief Executive Officer, the Chief
Financial Officer and the Chief Investment Officer of the Company are
currently required to participate in the DBP.
The participants are subject to annual performance bonus conditions and
objectives to be agreed by the Remuneration Committee. At the end of the
applicable financial year, and on receipt of an annual performance bonus, as
determined by the Remuneration Committee, 50% or 65% depending on the
participants are awarded as cash with the remainder transferred into shares in
the Company. Of the remaining 50% or 35% for certain participants to be
transferred in shares, half is deferred for one year and the remaining half is
deferred for two years.
For the period ended 30 September 2023, an amount of €0.1m was paid for the
participants' DBP tax liabilities.
Number of share awards
Movements in the number of awards outstanding are as follows:
Unaudited Audited
six months ended year ended
30 September 2023
31 March 2023
Number of Weighted Number of Weighted
share awards average share awards average
exercise exercise
price price
€m €m
Balance outstanding as at the beginning of the period (nil exercisable) 14,478,647 - 15,278,619 -
Maximum granted during the period 7,489,259 - 5,353,067 -
Forfeited during the period (966,000) - (1,610,000) -
Exercised during the period (1,859,000) - (2,431,714) -
Shares surrendered to cover employee tax obligations (1,241,000) - (2,111,325) -
Balance outstanding as at period end (nil exercisable) 17,901,906 - 14,478,647 -
Employee benefit schemes
A reconciliation of share-based payments and employee benefit schemes and
their impact on the condensed interim consolidated income statement is as
follows:
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Charge relating to 2018 LTIP - June 2019 grant - -
Charge relating to 2018 LTIP - June 2020 grant - 0.4
Charge relating to 2021 LTIP - August 2021 grant 0.2 0.8
Charge relating to 2021 LTIP - July 2022 grant 0.2 0.2
Charge relating to 2021 LTIP - June 2023 grant 0.3 -
Charge relating to 2021 LTIP - September 2023 grant 0.0 -
Charge relating to 2021 SIP - September 2021 grant 0.2 0.5
Charge relating to 2021 SIP - April 2022 grant 0.0 0.0
Charge relating to 2021 SIP - August 2022 grant 0.2 0.0
Charge relating to 2021 SIP - June 2023 grant 0.2 -
Charge relating to 2021 SIP - September 2023 grant 0.0 -
DBP 0.2 -
Total condensed interim consolidated income statement charge relating to 1.5 1.9
share-based payments
An amount of €1.5m (30 September 2022: €1.9m) is recognised in other
distributable reserves as per the condensed interim consolidated statement of
changes in equity. In addition, an amount of €1.4m (30 September 2022:
€1.6m) has been paid for participants' tax liabilities in relation to
share-based payment schemes.
8. Finance income, finance expense and change in fair value of derivative
financial instruments
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Bank interest income 1.2 -
Finance income from associates 1.1 1.1
Finance income 2.3 1.1
Bank loan interest expense (6.8) (6.8)
Interest expense related to lease liabilities (see note 15) (0.6) (0.5)
Amortisation of capitalised finance costs (1.5) (1.6)
Total interest expense (8.9) (8.9)
Bank charges (0.3) (0.3)
Other finance costs (0.3) (0.3)
Finance expense (9.2) (9.2)
Change in fair value of derivative financial instruments (0.8) 1.2
Net finance expense (7.7) (6.9)
The change in fair value of derivative financial instruments of €(0.8)m (30
September 2022: €1.2m) reflects the change in the market valuation of these
financial instruments.
9. Taxation
Condensed interim consolidated income statement
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Current income tax
Current income tax charge (2.6) (2.0)
Current income tax charge relating to disposal of investment properties - (0.1)
Adjustment in respect of prior periods (0.3) 1.8(1)
Total current income tax (2.9) (0.3)
Deferred tax
Relating to origination and reversal of temporary differences (5.2) (5.3)
Total deferred tax (5.2) (5.3)
Income tax charge reported in the income statement (8.1) (5.6)
(1) In the period ended 30 September 2022, the Group identified an error in
the accrual of tax liabilities arising in BizSpace Group as at 31 March 2022,
resulting in an overstatement of the tax liability of €5.0m of which €3.0m
arose on acquisition. These were assessed as not being material to the 31
March 2022 financial statements and the reduction in the liability was
recorded in the six months ended 30 September 2022 financial statements. The
amounts have been recorded within administrative expenses under exceptional
items (see note 5) and the taxation line of the income statement.
Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities are attributable to the
following:
Assets Liabilities Net
Unaudited Audited Unaudited Audited Unaudited Audited
30 September 31 March 30 September 31 March 30 September 31 March
2023 2023 2023 2023 2023 2023
€m €m €m €m €m €m
Revaluation of investment property - - (103.1) (99.5) (103.1) (99.5)
Lease incentives - - (0.7) (0.7) (0.7) (0.7)
Fixed asset temporary differences - - - (0.1) - (0.1)
Financial instruments - - (0.1) (0.2) (0.1) (0.2)
Fair value adjustment on leased investment properties 3.7 3.9 (3.6) (3.8) 0.1 0.1
Recognised tax losses 18.4 20.2 - - 18.4 20.2
Deferred tax assets/(liabilities) 22.1 24.1 (107.5) (104.3) (85.4) (80.2)
For accounting periods beginning on or after 1 January 2023 IASB ED/2019/5
amended the application of the initial recognition exemption for transactions
giving rise to offsetting deferred tax assets and deferred tax liabilities. In
respect of IFRS 16, the Group adopted the amendments to the initial
recognition exemption under IAS 12 already in the year ended 31 March 2022 and
recognises a deferred tax asset in respect of the IFRS 16 lease liabilities
and a deferred tax liability in respect of IFRS 16 right of use, resulting in
a net deferred tax asset for the year ended 31 March 2023.
The movement in deferred tax during the period is as follows:
Audited Recognised Exchange Unaudited
31 March in income differences 30 September
2023 2023
€m €m €m €m
Revaluation of investment property (99.5) (3.6) - (103.1)
Lease incentives (0.7) - - (0.7)
Fixed asset temporary differences (0.1) 0.1 - -
Financial instruments (0.2) 0.1 - (0.1)
Fair value adjustment on leased investment properties 0.1 - - 0.1
Recognised tax losses 20.2 (1.8) - 18.4
Total (80.2) (5.2) - (85.4)
The Group has not recognised a deferred tax asset on €251.8m (31 March 2023:
€240.2m) of tax losses carried forward and future share scheme deductions
due to uncertainties over recovery. There is no expiration date on €251.8m
of the losses and future share scheme tax deductions will convert to tax
losses on realisation.
A change in ownership of the Group may result in restriction on the Group's
ability to use tax losses in certain tax jurisdictions.
A deferred tax liability is recognised on temporary differences of €nil (31
March 2023: €nil) relating to the unremitted earnings of overseas
subsidiaries as the Group is able to control the timing of the reversal of
these temporary differences and it is probable that they will not reverse in
the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current tax assets and liabilities on a net
basis. The following is the analysis of the deferred tax balances (after
offset) for financial reporting purposes:
Assets Liabilities Net
Unaudited Audited Unaudited Audited Unaudited Audited
30 September 31 March 30 September 31 March 30 September 31 March
2023 2023 2023 2023 2023 2023
€m €m €m €m €m €m
UK - - - - - -
Germany 22.1 24.1 (107.5) (104.3) (85.4) (80.2)
Cyprus - - - - - -
Deferred tax assets/(liabilities) 22.1 24.1 (107.5) (104.3) (85.4) (80.2)
Assets Liabilities Net
Unaudited Audited Unaudited Audited Unaudited Audited
30 September 31 March 30 September 31 March 30 September 31 March
2023 2023 2023 2023 2023 2023
€m €m €m €m €m €m
UK 0.1 - - (0.4) 0.1 (0.4)
Germany - - (6.0) (4.6) (6.0) (4.6)
Cyprus - - (0.4) (0.4) (0.4) (0.4)
Current tax assets/(liabilities) 0.1 - (6.4) (5.4) (6.3) (5.4)
10. Earnings per share
The calculation of the basic, diluted, EPRA, headline and adjusted earnings
per share are based on the following data:
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Earnings attributable to the owners of the Company
Basic earnings 31.7 70.0
Diluted earnings 31.7 70.0
EPRA earnings 48.2 41.2
Diluted EPRA earnings 48.2 41.2
Headline earnings 47.5 42.6
Diluted headline earnings 47.5 42.6
Adjusted
Basic earnings 31.7 70.0
Add loss/(deduct gain) on revaluation of investment properties 10.1 (26.8)
Deduct gain on disposal of properties 0.0 (4.8)
Tax in relation to the revaluation gains/losses of investment properties and 5.3 5.6
gains/losses on disposal of properties above less REIT related tax effects
Add loss/(deduct gain) on revaluation of investment property relating to 0.5 (1.9)
associates
Tax in relation to the revaluation gains/losses on investment property (0.1) 0.5
relating to associates above
Headline earnings after tax 47.5 42.6
Add/(deduct) change in fair value of derivative financial instrument (net of 0.7 (1.4)
related tax and NCI)
Deduct revaluation loss relating to leased investment properties (0.7) (0.9)
Add adjusting items (net of related tax and NCI)(1) 1.8 3.0
Adjusted earnings after tax 49.3 43.3
Number of shares
Weighted average number of ordinary shares for the purpose of basic, headline, 1,169,697,061 1,167,383,139
adjusted and basic EPRA earnings per share
Weighted average number of ordinary shares for the purpose of diluted 1,185,416,141 1,183,403,147
earnings, diluted headline earnings, diluted adjusted earnings and diluted
EPRA earnings per share
Basic earnings per share 2.71c 6.00c
Diluted earnings per share 2.67c 5.92c
Basic EPRA earnings per share 4.12c 3.53c
Diluted EPRA earnings per share 4.07c 3.48c
Headline earnings per share 4.06c 3.65c
Diluted headline earnings per share 4.01c 3.60c
Adjusted earnings per share 4.21c 3.71c
Adjusted diluted earnings per share 4.16c 3.66c
(1) See reconciliation between adjusting items as stated within earnings
per share and those stated within administrative expenses in note 5.
Notes Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Exceptional items 5 0.3 1.1
Share-based payments 5 1.5 1.9
Adjusting items as per note 10 1.8 3.0
The following table shows the reconciliation of basic to headline earnings,
separately disclosing the impact before tax (gross column) and after tax (net
column):
Unaudited six months Unaudited six months
ended 30 September 2023 ended 30 September 2022
Gross Net Gross Net
€m €m €m €m
Basic earnings 31.7 70.0
Add loss/(deduct gain) on revaluation of investment properties 10.1 15.4 (26.8) (21.3)
Deduct gain on disposal of properties 0.0 0.0 (4.8) (4.7)
NCI relating to revaluation - - 0.1 -
Add loss/(deduct gain) on revaluation of investment property relating to 0.5 0.4 (1.9) (1.4)
associates
Headline earnings 47.5 42.6
EPRA earnings
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Basic and diluted earnings attributable to owners of the Company 31.7 70.0
Add loss/(deduct gain) on revaluation of investment properties 10.1 (26.8)
Deduct gain on disposal of properties (net of related tax) 0.0 (4.7)
Change in fair value of derivative financial instruments 0.8 (1.2)
Deferred tax in respect of EPRA fair value movements on investment properties 5.2 5.3
Add loss/(deduct gain) on revaluation of investment property relating to 0.5 (1.9)
associates
Tax in relation to the revaluation gains/losses on investment property (0.1) 0.5
relating to associates
EPRA earnings 48.2 41.2
For more information on EPRA earnings refer to Annex 1.
For the calculation of basic, headline, adjusted, EPRA and diluted earnings
per share the number of shares does not include 7,292,222 own shares held (30
September 2022: 7,492,763 shares), which are held by an Employee Benefit Trust
on behalf of the Group.
The weighted average number of shares for the purpose of diluted, diluted
EPRA, diluted headline and adjusted diluted earnings per share is calculated
as follows:
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
Weighted average number of ordinary shares for the purpose of basic, basic 1,169,697,061 1,167,383,139
EPRA, headline and adjusted earnings per share
Weighted average effect of grant of LTIP and SIP shares 15,719,080 16,020,008
Weighted average number of ordinary shares for the purpose of diluted, diluted 1,185,416,141 1,183,403,147
EPRA, diluted headline and adjusted diluted earnings per share
11. Net asset value per share
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Net asset value
Net asset value for the purpose of assets per share (assets attributable to 1,201.5 1,197.1
the owners of the Company)
Deferred tax liabilities (see note 9) 85.4 80.2
Derivative financial instruments at fair value (0.5) (1.3)
Adjusted net asset value attributable to the owners of the Company 1,286.4 1,276.0
Number of shares
Number of ordinary shares for the purpose of net asset value per share and 1,170,430,763 1,168,371,222
adjusted net asset value per share
Number of ordinary shares for the purpose of EPRA NTA per share 1,188,332,669 1,182,849,869
Net asset value per share 102.65c 102.46c
Adjusted net asset value per share 109.91c 109.21c
EPRA NTA per share 108.51c 108.11c
EPRA NRV EPRA NTA EPRA NDV
Unaudited 30 September 2023 €m €m €m
Net asset value as at period end (basic) 1,201.5 1,201.5 1,201.5
Diluted EPRA net asset value at fair value 1,201.5 1,201.5 1,201.5
Group
Derivative financial instruments at fair value (0.5) (0.5) n/a
Deferred tax in respect of EPRA fair value movements on investment properties 85.4 85.2(1) n/a
Intangibles as per note 14 n/a (3.9) n/a
Fair value of fixed interest rate debt n/a n/a 114.7
Real estate transfer tax 165.3 n/a n/a
Investment in associate
Deferred tax in respect of EPRA fair value movements on investment properties 7.1 7.1(1) n/a
Fair value of fixed interest rate debt n/a n/a 9.7
Real estate transfer tax 9.4 n/a n/a
Total EPRA NRV, NTA and NDV 1,468.2 1,289.4 1,325.9
EPRA NRV, NTA and NDV per share 123.55c 108.51c 111.58c
EPRA NRV EPRA NTA EPRA NDV
Audited 31 March 2023 €m €m €m
Net asset value as at period end (basic) 1,197.1 1,197.1 1,197.1
Diluted EPRA net asset value at fair value 1,197.1 1,197.1 1,197.1
Group
Derivative financial instruments at fair value (1.3) (1.3) n/a
Deferred tax in respect of EPRA fair value movements on investment properties 80.2 80.1(1) n/a
Intangibles as per note 14 n/a (4.1) n/a
Fair value of fixed interest rate debt n/a n/a 99.2
Real estate transfer tax 164.4 n/a n/a
Investment in associate
Deferred tax in respect of EPRA fair value movements on investment properties 7.0 7.0(1) n/a
Fair value of fixed interest rate debt n/a n/a 9.9
Real estate transfer tax 9.3 n/a n/a
Total EPRA NRV, NTA and NDV 1,456.7 1,278.8 1,306.2
EPRA NRV, NTA and NDV per share 123.15c 108.11c 110.43c
(1) The Group intends to hold and does not intend in the long term to sell any
of the investment properties and has excluded such deferred taxes for the
whole portfolio as at period end except for deferred tax in relation to assets
held for sale.
For more information on adjusted net asset value and EPRA NRV, NTA and NDV,
refer to Annex 1.
The number of ordinary shares for the purpose of EPRA NRV, NTA and NDV per
share is calculated as follows:
Unaudited Audited
30 September 31 March
2023 2023
Number of ordinary shares for the purpose of net asset value per share and 1,170,430,763 1,168,371,222
adjusted net asset value per share
Effect of grant of LTIP and SIP shares 17,901,906 14,478,647
Number of ordinary shares for the purpose of EPRA NRV, NTA and NDV per share 1,188,332,669 1,182,849,869
The number of shares does not include 7,292,222 own shares held (31 March
2023: 7,492,763 shares), which are held by an Employee Benefit Trust on behalf
of the Group.
12. Investment properties
The movement in the book value of investment properties is as follows:
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Total investment properties at book value as at the beginning of the period 2,123.0 2,100.0
Additions - owned investment properties - 44.7
Additions - leased investment properties - 1.4
Capital expenditure and broker fees 16.5 29.9
Disposals - (17.1)
Reclassified as investment properties held for sale (see note 13) (7.3) (8.8)
Loss on revaluation above capex and broker fees (9.6) (7.7)
Adjustment in respect of lease incentives 0.2 (0.6)
Loss on revaluation relating to leased investment properties (0.7) (1.5)
Foreign exchange differences 7.4 (17.3)
Total investment properties at book value as at period end(1) 2,129.5 2,123.0
(1) Excluding assets held for sale.
The reconciliation of the valuation carried out by the external valuer to the
carrying values shown in the condensed interim consolidated statement of
financial position is as follows:
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Owned investment properties at market value per valuer's report(1) 2,110.0 2,103.1
Adjustment in respect of lease incentives (4.5) (4.6)
Leased investment property market value 24.0 24.5
Total investment properties at book value as at period end(1) 2,129.5 2,123.0
(1) Excluding assets held for sale.
The fair value (market value) of the Group's owned investment properties at
period end has been arrived at on the basis of a valuation carried out at that
date by Cushman & Wakefield LLP (31 March 2023: Cushman & Wakefield
LLP), an independent valuer accredited in terms of the Royal Institution of
Chartered Surveyors ("RICS"). The fee arrangement with Cushman & Wakefield
LLP for the valuation of the Group's properties is fixed, subject to an
adjustment for acquisitions and disposals.
The value of each of the properties has been assessed in accordance with the
RICS valuation standards on the basis of market value. The methodology and
assumptions used to determine the fair value of the properties are consistent
with the previous period.
The weighted average lease expiry remaining across the owned portfolio in
Germany as at period end was 2.6 years (31 March 2023: 2.8 years). The
weighted average lease expiry remaining across the owned portfolio in the UK
as at period end was 1.05 years (31 March 2023: 1.01 years). Licence
agreements in the UK are rolling and are included in the valuation.
The fair value (market value) of the Group's leased investment properties as
at period end has been arrived at on the basis of a valuation carried out by
management using discounted cash flows similar to the approach of Cushman
& Wakefield LLP. A sensitivity analysis is not provided on the lease
investment properties as the balance is not considered material to the
financial statements.
The reconciliation of loss or gain on revaluation above capex as per the
condensed interim consolidated income statement is as follows:
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
(Loss)/gain on revaluation above capex and broker fees (9.6) 27.7
Adjustment in respect of lease incentives 0.2 -
Loss on revaluation relating to leased investment properties (0.7) (0.9)
(Loss)/gain on revaluation of investment properties reported in the income (10.1) 26.8
statement
Included in the loss or gain on revaluation of investment properties reported
in the income statement are gross gains of €28.6m and gross losses of
€38.7m (30 September 2022: gross gains of €41.6m and gross losses of
€14.8m).
Other than the capital commitments disclosed in note 27 the Group is under no
contractual obligation to purchase, construct or develop any investment
property. The Group is responsible for routine maintenance to the investment
properties.
All investment properties are categorised as Level 3 fair values as they use
significant unobservable inputs. There have not been any transfers between
levels during the period. Investment properties have been classed according to
their asset type. Information on these significant unobservable inputs per
class of investment property is disclosed below (excluding leased investment
properties).
The valuation for owned investment properties (including assets classified as
held for sale) is performed on a lease-by-lease basis due to the mixed-use
nature of the sites using the discounted cash flow technique for the German
portfolio and on a capitalised income basis (where income is capitalised by an
appropriate yield which reflects the age, location, ownership, customer base
and agreement type) for the UK portfolio. This gives rise to large ranges in
the inputs.
Market Current rental Market rental Occupancy Gross Net Discount Void period
value rate per sqm rate per sqm % initial yield initial yield factor months
€m € € % % %
Unaudited 30 September 2023 Low High Low High Low High Low High Low High Low High Low High
Traditional business parks
Mature 374.8 2.88 8.67 2.67 7.98 89.8 100.0 4.6 10.1 3.7 7.7 4.3 5.9 6 15
Value add 599.9 2.54 7.15 3.72 8.51 26.9 97.4 2.8 9.6 0.7 7.5 4.6 7.3 9 18
Total traditional business parks 974.7 2.54 8.67 2.67 8.51 26.9 100.0 2.8 10.1 0.7 7.7 4.3 7.3 6 18
Modern business parks
Mature 228.9 5.67 10.50 4.16 10.35 92.1 100.0 5.3 10.0 4.4 9.1 4.3 5.4 6 15
Value add 229.0 3.17 7.09 4.00 8.43 58.9 92.6 5.2 9.9 3.9 7.3 5.3 7.3 9 24
Total modern business parks 457.9 3.17 10.50 4.00 10.35 58.9 100.0 5.2 10.0 3.9 9.1 4.3 7.3 6 24
Office
Mature 37.3 14.38 14.38 10.92 10.92 92.6 92.6 8.8 8.8 7.4 7.4 4.9 4.9 9 9
Value add 235.7 4.78 10.95 6.49 12.20 53.6 89.0 3.7 10.4 1.9 7.9 5.0 7.0 9 15
Total office 273.0 4.78 14.38 6.49 12.20 53.6 92.6 3.7 10.4 1.9 7.9 4.9 7.0 9 15
Total Germany 1,705.6 2.54 14.38 2.67 12.20 26.9 100.0 2.8 10.4 0.7 9.1 4.3 7.3 6 24
Average current Average market rental Occupancy Net initial yield Void period
rental rate
Market
rate per sqm % % months
per sqm
value
€
€
€m
Unaudited 30 September 2023 Low High Low High Low High Low High Low High
Total mixed-use schemes 98.9 1.98 23.60 5.63 23.07 43.2 94.0 4.2 12.1 4 12
Total office 139.9 4.48 24.92 8.07 24.92 54.4 100.0 5.5 22.3 4 12
Total industrial 172.9 1.99 11.81 3.19 13.21 62.8 100.0 3.2 10.4 4 12
Total UK 411.7 1.98 24.92 3.19 24.92 43.2 100.0 3.2 22.3 4 12
Market Current rental Market rental Occupancy Gross Net Discount Void period
value rate per sqm rate per sqm % initial yield initial yield factor months
€m € € % % %
Audited Low High Low High Low High Low High Low High Low High Low High
31 March 2023
Traditional business parks
Mature 362.0 2.88 8.58 2.67 7.80 64.7 100.0 4.7 9.9 3.7 7.6 4.1 5.8 6 15
Value add 607.6 2.25 6.64 3.58 8.46 26.9 97.4 2.9 9.8 0.8 7.5 4.5 7.1 9 18
Total traditional business parks 969.6 2.25 8.58 2.67 8.46 26.9 100.0 2.9 9.9 0.8 7.6 4.1 7.1 6 18
Modern business parks
Mature 200.4 5.38 8.64 3.93 8.15 94.3 100.0 3.6 10.5 2.4 9.3 4.1 5.4 6 15
Value add 250.1 2.92 9.76 3.91 10.35 54.5 92.8 5.5 9.4 3.8 7.4 4.8 7.3 9 24
Total modern business parks 450.5 2.92 9.76 3.91 10.35 54.5 100.0 3.6 10.5 2.4 9.3 4.1 7.3 6 24
Office
Mature 37.5 14.34 14.34 10.78 10.78 92.6 92.6 8.7 8.7 7.3 7.3 4.9 4.9 9 9
Value add 236.4 4.05 10.27 6.42 12.19 49.7 87.5 4.4 9.3 2.4 6.8 5.0 6.9 9 18
Total office 273.9 4.05 14.34 6.42 12.19 49.7 92.6 4.4 9.3 2.4 7.3 4.9 6.9 9 18
Total Germany 1,694.0 2.25 14.34 2.67 12.19 26.9 100.0 2.9 10.5 0.8 9.3 4.1 7.3 6 24
Average current Average market rental Occupancy Net initial yield Void period
rental rate
Market
rate per sqm % % months
per sqm
value
€
€
€m
Audited 31 March 2023 Low High Low High Low High Low High Low High
Total mixed-use schemes 102.4 2.09 20.25 5.46 23.58 42.0 93.3 4.0 10.8 4 12
Total office 143.7 5.42 33.89 7.94 24.68 50.5 100.0 4.9 23.2 4 12
Total industrial 171.6 2.23 8.19 2.55 12.99 64.1 100.0 3.8 12.4 4 12
Total UK 417.7 2.09 33.89 2.55 24.68 42.0 100.0 3.8 23.2 4 12
As a result of the level of judgement and estimates used in arriving at the
market valuations, the amounts which may ultimately be realised in respect of
any given property may differ from valuations shown in the statement of
financial position. Key inputs are considered to be inter-related whereby
changes in one key input can result in changes in other key inputs. The impact
of changes in relation to the key inputs is also shown in the table below:
Unaudited 30 September 2023 Change of 5% Change of 0.25% Change of 0.5% Change of 0.5%
Market in market rental rates in discount rates in gross initial yield in net initial yield
value €m €m €m €m
€m
Increase Decrease Increase Decrease Increase Decrease Increase Decrease
Total traditional business parks 974.7 49.4 (49.6) (19.4) 19.4 (74.4) 88.5 (96.9) 128.8
Total modern business parks 457.9 22.8 (22.3) (9.0) 9.9 (31.7) 37.1 (38.7) 47.7
Total office 273.0 14.0 (13.9) (5.3) 5.7 (19.6) 23.1 (26.1) 34.0
Market value Germany 1,705.6 86.2 (85.8) (33.7) 35.0 (125.7) 148.7 (161.7) 210.5
Market Change of 5% Change of 0.5%
Unaudited 30 September 2023 value in market rental rates in net initial yield
€m €m €m
Increase Decrease Increase Decrease
Total mixed-use schemes 98.9 3.4 (3.7) (5.9) 6.5
Total office 139.9 4.2 (4.2) (6.0) 6.7
Total industrial 172.9 6.7 (6.8) (10.8) 12.0
Market value UK 411.7 14.3 (14.7) (22.7) 25.2
Audited Change of 5% Change of 0.25% Change of 0.5% Change of 0.5%
31 March 2023
Market in market rental rates in discount rates in gross initial yield in net initial yield
value €m €m €m €m
€m
Increase Decrease Increase Decrease Increase Decrease Increase Decrease
Total traditional business parks 969.6 48.9 (49.2) (19.3) 19.1 (73.1) 86.8 (106.6) 109.0
Total modern business parks 450.5 22.0 (21.7) (8.5) 9.3 (32.2) 37.9 (41.5) 47.4
Total office 273.9 14.0 (14.1) (5.6) 5.6 (20.8) 24.8 (28.3) 36.8
Market value Germany 1,694.0 84.9 (85.0) (33.4) 34.0 (126.1) 149.5 (176.4) 193.2
Change of 5% Change of 0.5%
Market in market rental rates in net initial yield
value €m €m
€m
Audited 31 March 2023 Increase Decrease Increase Decrease
Total mixed-use schemes 102.4 (6.2) 7.5 3.8 (3.6)
Total office 143.7 (6.8) 7.8 4.7 (4.5)
Total industrial 171.6 (10.8) 12.7 7.0 (6.6)
Market value UK 417.7 (23.8) 28.0 15.5 (14.7)
13. Assets held for sale
Investment properties held for sale
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Wuppertal - 8.8
Kassel 7.3 -
Balance as at period end 7.3 8.8
The disclosures regarding valuation in note 12 are also applicable to assets
held for sale.
As at 30 September 2023, an amount of €7.3m relating to the sale of the
Kassel asset was received prior to the completion date of 1 October 2023 and
was included in the cash at bank per note 19. As at 31 March 2023, an amount
of €8.8m relating to the sale of the Wuppertal asset was received prior to
the completion date of 1 April 2023 and was included in the cash at bank per
note 19.
As a result, an equal and opposite position within other payables was
recognised. See note 20 for further details.
14. Intangible assets
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Software and licences 3.9 4.1
Balance as at period end 3.9 4.1
15. Right of use assets and lease liabilities
Set out below are the carrying amounts of right of use assets (excluding those
classified as investment properties) recognised and the movements during the
period:
Office Total
€m €m
As at 31 March 2022 (audited) 15.0 15.0
Additions 1.4 1.4
Depreciation expense (1.1) (1.1)
As at 30 September 2022 (unaudited) 15.3 15.3
Additions 0.1 0.1
Depreciation expense (1.0) (1.0)
As at 31 March 2023 (audited) 14.4 14.4
Depreciation expense (0.9) (0.9)
As at 30 September 2023 (unaudited) 13.5 13.5
In addition to office spaces the Group is also counterparty to long-term
leasehold agreements and head leases relating to commercial property. Right of
use assets amounting to €24.0m (31 March 2023: €24.5m) are classified as
investment properties, of which €2.3m (31 March 2023: €2.8m) relate to
commercial property.
Set out below are the carrying amounts of lease liabilities and the movements
during the period:
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Balance as at the beginning of the period (39.6) (38.7)
Accretion of interest (0.6) (1.1)
Additions - (2.8)
Payments 1.7 2.3
Foreign exchange differences (0.3) 0.7
Balance as at period end (38.8) (39.6)
Current lease liabilities as at period end (2.3) (2.2)
Non-current lease liabilities as at period end (36.5) (37.4)
The following table sets out the carrying amount, by maturity, of the Group's
lease liabilities:
Unaudited 30 September 2023 Within 1 year 1-5 years 5+ years Total
€m €m €m €m
Commercial property(1) (0.3) (1.1) - (1.4)
Long-term leasehold(1) (0.2) (1.0) (20.5) (21.7)
Office space (1.8) (7.5) (6.4) (15.7)
Total (2.3) (9.6) (26.9) (38.8)
Audited 31 March 2023 Within 1 year 1-5 years 5+ years Total
€m €m €m €m
Commercial property(1) (0.2) (1.0) (0.3) (1.5)
Long-term leasehold(1) (0.2) (1.0) (20.4) (21.6)
Office space (1.8) (7.5) (7.2) (16.5)
Total (2.2) (9.5) (27.9) (39.6)
(1) These lease liabilities relate to right of use assets recorded as
investment properties.
The overall weighted average discount rate used for the period is 2.8% (31
March 2023: 2.7%).
16. Other non-current financial assets
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Deposits 4.1 4.1
Loans to associates 44.3 44.3
Balance as at period end 48.4 48.4
Loans to associates relate to shareholder loans granted to associates by the
Group. The loans terminate on 31 December 2026, are fully subordinated and are
charged at a fixed interest rate. The expected credit loss has been considered
based on multiple factors such as history of repayments, forward looking
budgets and forecasts. Based on the assessment the expected credit loss was
immaterial.
17. Investment in associates
The principal activity of the associates is the investment in, and development
of, commercial property located in Germany and to provide conventional and
flexible workspace. Since the associates are individually immaterial the Group
is disclosing aggregated information for the associates.
The following table illustrates the summarised financial information of the
Group's investment in associates:
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Current assets 24.4 28.4
Non-current assets 358.6 354.7
Current liabilities (21.3) (15.6)
Non-current liabilities (296.7) (296.1)
Equity 65.0 71.4
Unrecognised accumulated losses 6.1 4.9
Subtotal 71.1 76.3
Group's share in equity - 35% 25.0 26.7
The accumulated losses of the investment in associates are not recognised in
line with the accounting policy as outlined in note 2(b).
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Net operating income 9.8 10.0
(Loss)/gain on revaluation of investment properties (3.3) 4.2
Administrative expense (1.8) (1.7)
Operating profit 4.7 12.5
Net finance costs (4.4) (4.4)
Profit before tax 0.3 8.1
Taxation (0.5) (1.7)
Unrecognised loss 1.1 1.1
Total profit and comprehensive income for the period after tax 0.9 7.5
Group's share of profit for the period - 35% 0.3 2.6
Included within the non-current liabilities are shareholder loans amounting to
€126.8m (31 March 2023: €126.8m). As at period end no contingent
liabilities existed (31 March 2023: none). The associates had contracted
capital expenditure for development and enhancements of €6.5m as at period
end (31 March 2023: €3.4m).
The following table illustrates the movement in investment in associates:
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Balance as at the beginning of the period 26.7 24.1
Dividend received (2.0) -
Share of profit 0.3 2.6
Balance as at period end 25.0 26.7
18. Trade and other receivables
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Gross trade receivables 16.4 22.4
Expected credit loss provision (8.2) (8.7)
Net trade receivables 8.2 13.7
Other receivables 15.1 14.1
Prepayments 5.1 2.7
Balance as at period end 28.4 30.5
Other receivables include primarily accrued income from investment in
associates of €4.7m (31 March 2023: €2.2m) and lease incentives of €4.5m
(31 March 2023: €4.6m).
19. Cash and cash equivalents
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Cash at bank 65.8 99.2
Short-term investments 25.4 -
Cash restricted under contractual terms:
Deposit for bank guarantees - 1.3
Deposits received from tenants 24.5 23.8
Balance as at period end 115.7 124.3
Cash at bank earns interest at floating rates based on daily bank deposit
rates. The fair value of cash as at period end is €115.7m (31 March 2023:
€124.3m).
Short-term investments are an investment in Money Market Funds. The Group
invests only in highly liquid products with short maturities, which are
readily convertible to a known amount of cash and that are subject to an
insignificant risk of changes in value.
Tenants' deposits are legal securities of tenants retained by the Group
without the right to use these cash deposits for purposes other than strictly
tenant related transactions (e.g. move-out costs, costs due to non-compliance
with certain terms of the lease agreement or late rent/service charge
payments).
Cash is held by reputable banks and the Group assessed the expected credit
loss to be immaterial.
20. Trade and other payables
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Trade payables 6.1 12.0
Accrued expenses 39.1 28.6
Provisions 3.3 3.3
Interest and amortisation payable 6.2 5.6
Tenant deposits 24.5 23.8
Unearned revenue 10.4 10.6
Other payables 14.3 17.6
Balance as at period end 103.9 101.5
Accrued expenses include costs relating to service charge totalling €27.0m
(31 March 2023: €16.4m), bonuses of €4.2m (31 March 2023: €4.5m), costs
relating to non-recurring projects of €2.9m (31 March 2023: €2.8m) and
administrative expenses of €3.0m (31 March 2023: €2.4m) that have not been
invoiced to the Group.
The Group are subject to an ongoing legal claim in relation to a property
which was sold during 2017. The Group have recognised a provision of €3.3m
(31 March 2023: €3.3m) which represents the Directors best estimate of the
potential outflow at the present time, however, the Directors recognise there
is uncertainty relating to this amount. At this stage, the Directors do not
expect to incur a liability over and above what has already been recognised in
the financial statements. As at 31 March 2023 the liability of €3.3m was
included in accrued expenses. The Directors have chosen to disclose this as a
separate line in the disclosure note for trade and other payables to provide
additional information to the users of the financial statements.
Included within other payables are credit balances due to tenants in relation
to over collections of service charge in amount of €2.1m (31 March 2023:
€3.6m). As at 30 September 2023, other payables included €7.3m relating to
the sale of Kassel asset that is categorised as an asset held for sale as at
30 September 2023 in advance of the completion date of 1 October 2023. As at
31 March 2023, other payables included €8.8m of proceeds relating to the
sale of the Wuppertal asset that was categorised as an asset held for sale as
at 31 March 2023 in advance of the completion date of 1 April 2023. See note
13 for details of assets held for sale.
Unearned revenue includes service charge amounts of €1.7m (31 March 2023:
€3.1m). Service charge income is only recognised as income when the
performance obligations are met. All unearned revenue of the prior period was
recognised as revenue in the current period.
21. Interest-bearing loans and borrowings
Interest rate Loan maturity date Unaudited Audited
% 30 September 31 March 2023
2023 €m
€m
Current
Berlin Hyp AG
- fixed rate facility 1.48 31 October 2023 57.3 58.2
- fixed rate facility 0.90 31 October 2023 109.6 110.4
Saarbrücken Sparkasse
- fixed rate facility 1.53 28 February 2025 0.8 0.7
Deutsche Pfandbriefbank AG
- hedged floating rate facility Hedged(1) 31 December 2023 50.5 51.1
- floating rate facility Floating(1) 31 December 2023 6.2 6.2
Schuldschein
- fixed rate facility 1.60 3 July 2023 - 20.0
Capitalised finance charges on all loans (2.5) (2.9)
221.8 243.7
Non-current
Saarbrücken Sparkasse
- fixed rate facility 1.53 28 February 2025 13.0 13.5
Schuldschein
- floating rate facility Floating(2) 6 January 2025 5.0 5.0
- fixed rate facility 1.70 3 March 2025 10.0 10.0
Corporate bond I
- fixed rate 1.125 22 June 2026 400.0 400.0
Corporate bond II
- fixed rate 1.75 24 November 2028 300.0 300.0
Capitalised finance charges on all loans (6.6) (7.8)
721.4 720.7
Total 943.2 964.4
(1) Tranche 1 of this facility is fully hedged with a swap charged at a rate
of 1.40%; tranche 2 of this facility is fully hedged with a swap charged at a
rate of 1.25%; and €19.1m of tranche 3 of this facility is fully hedged with
a swap charged at a rate of 0.91%. A €6.5m extension and the tranche 3
related €0.5m arrangement fee are charged with a floating rate of 1.20% over
three month EURIBOR (not less than 0%). The Group has not adopted any hedge
accounting.
(2) This unsecured facility has a floating rate of 1.70% over six month
EURIBOR (not less than 0%).
The movement of loans and borrowings for the period ended 30 September 2023
comprised of €22.7m repayment of loans and €1.5m capitalisation of finance
charges (30 September 2022: €2.7m and €1.6m respectively).
The Group has pledged 15 (31 March 2023: 15) investment properties to secure
several separate interest-bearing debt facilities granted to the Group. The 15
(31 March 2023: 15) properties had a combined valuation of €518.2m as at
period end (31 March 2023: €510.7m).
The Group's loans are subject to various covenants, which include interest
cover ratio, loan to value, debt service cover, occupancy, etc. as stipulated
in the loan agreements.
During the period, the Group did not breach any of its loan covenants, nor did
it default on any of its obligations under its loan agreements and the Group
has a sufficient level of headroom as at period end.
Refer to note 2(e) where the Group discloses forecast covenant compliance with
regard to management's going concern assessment.
Berlin Hyp AG
On 13 September 2019, the Group agreed to a facility agreement with Berlin Hyp
AG for €115.4m. The loan terminates on 31 October 2023. Amortisation is
1.25% per annum with the remainder due in the fourth year. The loan facility
is charged at a fixed interest rate of 0.90%. This facility is secured over
nine property assets. No changes to the terms of the facility have occurred
during the six month period ended 30 September 2023.
On 31 August 2022, the Group concluded an agreement with Berlin Hyp AG to
refinance the existing facility with a new facility which amounts to
€170.0m. The new facility is a separate financial instrument to the existing
facility and will come into effect on 1 November 2023 with a term of seven
years and a fixed interest rate of 4.26%.
Saarbrücken Sparkasse
On 28 March 2018, the Group agreed to a facility agreement with Saarbrücken
Sparkasse for €18.0m. The loan terminates on 28 February 2025. Amortisation
is 4.0% per annum with the remainder due in one instalment on the final
maturity date. The facility is charged with an all-in fixed interest rate of
1.53% for the full term of the loan. The facility is secured over one property
asset. No changes to the terms of the facility have occurred during the six
month period ended 30 September 2023.
Deutsche Pfandbriefbank AG
On 19 January 2019, the Group agreed to a facility agreement with Deutsche
Pfandbriefbank AG for €56.0m. Tranche 1, totalling €21.6m, has been hedged
at a rate of 1.40% until 31 December 2023 by way of an interest rate swap. A
first drawdown of tranche 3 totalling €0.5m was charged at a fixed interest
rate of 1.20%. On 3 April 2019, tranche 2 was drawn down, totalling €14.8m,
and has been hedged at a rate of 1.25% until 31 December 2023 by way of an
interest rate swap. On 28 June 2019, tranche 3 was drawn down, totalling
€19.1m. Tranche 3 has been hedged at a rate of 0.91% until 31 December 2023
by way of an interest rate swap. The facility is secured over five property
assets and is subject to various covenants with which the Group has complied.
On 19 February 2020, the Group agreed to extend tranche 3 of its existing
facility by €6.5m. The loan is coterminous with the existing facility
maturing in December 2023. The loan has been treated as a new loan and is
charged with a floating interest rate of 1.20% plus three month EURIBOR (not
less than 0%). Amortisation is 2.0% per annum with the remainder due in one
instalment on the final maturity date.
On 26 May 2023, the Group concluded an agreement with Deutsche Pfandbriefbank
AG to refinance the existing facility with a new facility which amounts to
€58.3m. The new facility is a separate financial instrument to the existing
facility and will come into effect on 1 January 2024 with a term of seven
years and a fixed interest rate of 4.25%.
Schuldschein
On 2 December 2019, the Group agreed new loan facilities in the form of an
unsecured Schuldschein for €20.0m. On 25 February 2020, the Group agreed new
loan facilities in the form of an unsecured Schuldschein for €30.0m. In
total the unsecured facility amounts to €50.0m spread over five tranches and
is charged at a blended interest rate of 1.60% and average maturity of 2.6
years with no amortisation. The first and second tranches totalling €15.0m
were repaid during the twelve month period ended 31 March 2023.
On 30 June 2023, the Group repaid an amount of €20.0m resulting in a
remaining €15.0m for the loan facility. No changes to the terms of the
facility have occurred during the six month period ended 30 September 2023.
Corporate bond I
On 22 June 2021, the Group raised its inaugural corporate bond for €400.0m.
The bond, which is listed at the Luxembourg Stock Exchange, has a term of five
years and an interest rate of 1.125% due annually on its anniversary date,
with the principal balance coming due on 22 June 2026. No changes to the terms
of the facility have occurred during the six month period ended 30 September
2023.
Corporate bond II
On 24 November 2021, the Group issued its second corporate bond for €300.0m.
The bond, which is listed at the Luxembourg Stock Exchange, has a term of
seven years and an interest rate of 1.75% due annually on its anniversary
date, with the principal balance coming due on 24 November 2028. No changes to
the terms of the facility have occurred during the six month period ended 30
September 2023.
EPRA loan to value ("LTV")
Proportionate consolidation
Unaudited 30 September 2023 Group Investment in associates Total
€m €m €m
Interest-bearing loans and borrowings((1)) 243.2 52.2 295.4
Corporate bonds 700.0 - 700.0
Net payables 77.2 5.7 82.9
Cash and cash equivalents (115.7) (6.6) (122.3)
Net debt (a) 904.7 51.3 956.0
Investment properties 2,129.5 125.5 2,255.0
Assets held for sale 7.3 - 7.3
Plant and equipment 7.4 - 7.4
Intangible assets 3.9 - 3.9
Loan to associates 44.3 - 44.3
Total property value (b) 2,192.4 125.5 2,317.9
EPRA LTV (a/b) 41.3% 40.9% 41.2%
Proportionate consolidation
Audited 31 March 2023 Group Investment in associates Total
€m €m €m
Interest-bearing loans and borrowings((1)) 264.4 52.1 316.5
Corporate bonds 700.0 - 700.0
Net payables 71.0 4.5 75.5
Cash and cash equivalents (124.3) (8.6) (132.9)
Net debt (a) 911.1 48.0 959.1
Investment properties 2,123.0 124.2 2,247.2
Assets held for sale 8.8 - 8.8
Plant and equipment 7.2 - 7.2
Intangible assets 4.1 - 4.1
Loan to associates 44.3 - 44.3
Total property value (b) 2,187.4 124.2 2,311.6
EPRA LTV (a/b) 41.7% 38.6% 41.5%
(1) Excludes corporate bonds as shown as a separate line.
22. Financial instruments
Fair values
Set out below is a comparison by category of carrying amounts and fair values
of all of the Group's financial instruments that are carried in the financial
statements (excluding assets held for sale):
Unaudited Audited
30 September 2023 31 March 2023
Fair value Carrying Fair Carrying Fair
hierarchy amount value amount value
level €m €m €m €m
Financial assets
Cash and cash equivalents 115.7 115.7 124.3 124.3
Trade and other receivables(1) 22.9 22.9 27.3 27.3
Loans to associates 2 44.3 44.3 44.3 44.3
Derivative financial instruments 2 0.5 0.5 1.3 1.3
Financial liabilities
Trade and other payables 51.1 51.1 59.0 59.0
Interest-bearing loans and borrowings(2)
Floating rate borrowings 2 11.2 11.2 11.2 11.2
Floating rate borrowings - hedged(3) 2 50.5 50.5 51.1 51.1
Fixed rate borrowings 2 890.6 776.0 912.8 813.6
All amounts in the table above are carried at amortised cost except for
derivative financial instruments which are held at fair value.
(1) This is made up of net trade receivables, other receivables (excluding
lease incentives) and deposits.
(2) Excludes loan issue costs.
(3) The Group holds interest rate swap contracts designed to manage the
interest rate and liquidity risks of expected cash flows of its borrowings
with the variable rate facilities with Deutsche Pfandbriefbank AG. Please
refer to note 21 for details of swap contracts.
Fair value hierarchy
For financial assets or liabilities measured at amortised cost and whose
carrying value is a reasonable approximation to fair value there is no
requirement to analyse their value in the fair value hierarchy.
The below analyses financial instruments measured at fair value into a fair
value hierarchy based on the valuation technique used to determine fair value:
Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
The Group holds interest rate swap contracts which are reset on a quarterly
basis. The fair value of interest rate swaps is based on broker quotes. Those
quotes are tested for reasonableness by discounting estimated future cash
flows based on the terms and maturity of each contract and using market
interest rates for a similar instrument at the measurement date. The average
interest rate is based on the outstanding balances at the end of the reporting
period. The interest rate swap is measured at fair value with changes
recognised in profit or loss.
The fair values of the loans and borrowings have been calculated based on a
discounted cash flow model using the prevailing market rates of interest.
23. Issued share capital
Authorised Number Share
of shares capital
€m
Ordinary shares of no par value Unlimited -
As at 30 September 2023 (unaudited) and 31 March 2023 (audited) Unlimited -
Issued and fully paid Number Share
of shares capital
€m
As at 31 March 2022 (audited) 1,166,880,684 -
Issued ordinary shares 2,891,372 1.4
Transfer of share capital to other distributable reserves - (1.4)
Shares issued to Employee Benefit Trust (2,500,000) -
Shares allocated by the Employee Benefit Trust 287,545 -
As at 30 September 2022 (unaudited) 1,167,559,601 -
Issued ordinary shares 811,621 -
Transfer of share capital to other distributable reserves - -
Shares issued to the Employee Benefit Trust - -
Shares allocated by the Employee Benefit Trust - -
As at 31 March 2023 (audited) 1,168,371,222 -
Issued ordinary shares 1,859,000 -
Transfer of share capital to other distributable reserves - -
Shares issued to the Employee Benefit Trust - -
Shares allocated by the Employee Benefit Trust 200,541 -
As at 30 September 2023 (unaudited) 1,170,430,763 -
Holders of the ordinary shares are entitled to receive dividends and other
distributions and to attend and vote at any general meeting. Shares held in
treasury are not entitled to receive dividends or to vote at general meetings.
The Company issued 1,859,000 shares in relation to the exercise of the LTIP
2018 (Jun 2020 grant) as per note 7. These shares were issued at nil-cost, and
the fair value of these shares recorded in the share capital account has been
transferred back to the other distributable reserves.
Treasury Shares held by the Employee Benefit Trust are disclosed as own shares
held. During the period nil shares were acquired and 200,541 were allocated by
the Employee Benefit Trust. A total of 7,292,222 own shares purchased at an
average share price of €1.1108 are held by the Employee Benefit Trust (31
March 2023: 7,492,763 shares purchased at an average share price of
€1.1185). The total number of shares with voting rights was 1,177,722,985
(31 March 2023: 1,175,863,985). No votes are cast in respect of the shares
held in the Employee Benefit Trust in connection with the Company's share
plans and dividends paid and payable are subject to a standing waiver.
All shares issued in the period were issued under general authority. No shares
were bought back in the period (31 March 2023: none) and there are no Treasury
Shares held directly by the Company at the period end (31 March 2023: none).
24. Other reserves
Other distributable reserve
This reserve comprises amounts in relation to scrip dividends transfers from
share capital, share-based payment transactions and the share buy-backs. The
balance of €481.3m in total at period end (31 March 2023: €516.4m) is
considered distributable.
Foreign currency translation reserve
The Group holds a foreign currency translation reserve which relates to
foreign currency translation effect during the course of the business with the
UK segment.
The following table illustrates the movement in the foreign currency
translation reserve:
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Balance as at the beginning of the period (18.9) (1.7)
Foreign currency translation 7.6 (17.2)
Balance as at period end (11.3) (18.9)
The movement in the period of €7.6m gain is a result of an increasing GBP
rate which is higher at period end compared with 31 March 2023 (31 March 2023:
€17.2m deficit).
25. Dividends
On 5 June 2023, the Company announced a dividend of 2.98c per share, with a
record date of 14 July 2023 for the UK and South African ("SA") shareholders
and payable on 17 August 2023. On the record date, 1,177,722,985 shares were
in issue. Since there were no shares held in treasury, 1,177,722,985 shares
(including shares held by the Employee Benefit Trust) were entitled to
participate in the dividend. The Company's Employee Benefit Trust waived its
rights to the dividend, reducing the total dividend (payable in cash) from
€35.1m to €34.9m (€35.0m as at settlement date).
On 21 November 2022, the Company announced a dividend of 2.70c per share, with
a record date of 9 December 2022 for the UK and SA shareholders and payable on
19 January 2023. On the record date, 1,175,863,985 shares were in issue. Since
there were no shares held in treasury, 1,175,863,985 shares (including shares
held by the Employee Benefit Trust) were entitled to participate in the
dividend. The Company's Employee Benefit Trust waived its rights to the
dividend, reducing the total dividend (payable in cash) from €31.7m to
€31.5m (€31.5m as at settlement date).
On 13 June 2022, the Company announced a dividend of 2.37c per share, with a
record date of 8 July 2022 for UK and SA shareholders and payable on 18 August
2022. On the record date, 1,172,160,992 shares were in issue. Since there were
no shares held in treasury, 1,172,160,992 shares (including shares held by the
Employee Benefit Trust) were entitled to participate in the dividend. Holders
of 61,453,275 shares elected to receive the dividend in ordinary shares under
the scrip dividend alternative, representing a dividend of €1.4m (€1.4m as
at settlement date) while holders of 1,110,707,717 shares opted for a cash
dividend with a value of €26.3m. The Company's Employee Benefit Trust waived
its rights to the dividend, reducing the cash payable to €26.2m (€26.3m as
at settlement date). The total dividend was €27.7m (€27.7m).
The Group's profit attributable to the equity holders of the Company for the
period was €31.7m (30 September 2022: €70.0m). The Board has authorised a
dividend relating to the six month period ended 30 September 2023 of 3.00c per
share, representing 66% of FFO((1)).
It is expected that, for the dividend authorised relating to the six month
period ended 30 September 2023, the ex-dividend date will be 12 December 2023
for shareholders on the SA register and 14 December 2023 for shareholders on
the UK register The record date will be 14 December 2023 for shareholders on
the SA register and 15 December 2023 for shareholders on the UK register. The
dividend will be paid on 25 January 2024. A detailed dividend announcement
will be made on 20 November 2023, including details of a dividend reinvestment
plan ("DRIP") alternative.
The dividend paid per the statement of changes in equity is the value of the
cash dividend.
(1) Adjusted profit before tax adjusted for foreign exchange effects,
depreciation and amortisation (excluding depreciation relating to IFRS 16),
amortisation of financing fees, adjustments in respect of IFRS 16, current tax
receivable/incurred and current tax relating to disposals.
The dividend per share was calculated as follows:
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Reported profit before tax 39.8 75.7
Adjustments for:
Loss/(gain) on revaluation of investment properties 10.1 (26.8)
Loss on revaluation relating to leased investment properties (0.7) (0.9)
Gain on disposal of properties 0.0 (4.8)
Loss/(gain) on revaluation of investment property from associates and related 0.4 (1.4)
tax
Other adjusting items(1) 1.8 3.0
Change in fair value of financial derivatives 0.8 (1.2)
Adjusted profit before tax 52.2 43.6
Adjustments for:
Foreign exchange effects(2) - 0.3
Depreciation and amortisation (excluding depreciation relating to IFRS 16) 1.7 1.7
Amortisation of financing fees 1.5 1.6
Adjustment in respect of IFRS 16 0.5 1.5
Current taxes incurred (see note 9) (2.9) (0.3)
Add back current tax relating to disposals - 0.1
Funds from operations, six months ended 30 September 53.0 48.5
Dividend pool, six months ended 30 September(3) 35.1 31.5
Dividend per share, six months ended 30 September 3.00c 2.70c
(1) Includes the effect of exceptional items and share awards. See note 7 for
details.
(2) Management decided to exclude foreign exchange effects from the funds from
operations calculation amounting to €nil (30 September 2022: €(0.3)m).
(3) Calculated as 66% of FFO of 3.00c per share (30 September 2022: 4.15c per
share using 65% of FFO), based on average number of shares outstanding of
1,169,697,061 (30 September 2022: 1,167,383,139).
For more information on adjusted profit before tax and funds from operations,
refer to Annex 1.
Calculations contained in this table are subject to rounding differences.
26. Related parties
Related parties are defined as those persons and companies that control the
Group, or that are controlled, jointly controlled or subject to significant
influence by the Group.
Key management personnel
Fees paid to people considered to be key management personnel (the Senior
Management Team) of the Group during the period include:
Condensed interim consolidated income statement Unaudited Unaudited
30 September six months
2023 ended
€m 30 September
2022
€m
Directors' fees 0.3 0.3
Salary and employee benefits 2.9 3.6
Share-based payments 1.0 1.8
Total 4.2 5.7
Included within salary and employee benefits are pension contributions
amounting to €0.1m (30 September 2022: €0.1m).
The amounts payable to people considered to be key management personnel (the
Senior Management Team) amount to €0.3m (31 March 2023: €nil).
Associates
The following balances and transactions with associates exist as at the
reporting date:
Condensed interim consolidated statement of financial position Unaudited Audited
30 September 31 March
2023 2023
€m €m
Loans to associates 44.3 44.3
Trade and other receivables 4.6 4.0
Total 48.9 48.3
Trade and other receivables relate to amounts owed from the services supplied
to the associates and are due to be settled in the normal course of business.
As a result of unchanged credit quality no material expected credit losses
have been recognised in the period.
Condensed interim consolidated income statement Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Services supplied 8.4 7.0
Interest income 1.1 1.1
Total 9.5 8.1
Services provided to associates primarily relate to the provision of property
and asset management services. A performance fee arrangement is in place
between the associates and the Group. Within services supplied, the
performance fee was €0.8m (30 September 2022: €nil).
For details regarding the investment in associates, including dividends
received, see note 17.
27. Capital and other commitments
As at period end, the Group had contracted capital expenditure for development
and enhancements on existing properties of €13.8m (31 March 2023: €14.9m).
The above noted were committed but not yet provided for in the financial
statements.
28. Post balance sheet events
On 21 August 2023, the Group notarised for the disposal of an asset in Kassel
for a sale price of €7.3m. The mixed-use site which comprises 16,217 sqm of
storage, industrial, office and logistics space is 92% occupied. The
transaction completed on 1 October 2023.
On 2 October 2023, the Group completed the acquisition of two mixed use
industrial assets located in Liverpool and Barnsley. Total acquisition costs
are £10.1m (€11.7m). The property has a combined lettable area of 71,957 sq
ft (6,685 sqm).
On 1 November 2023, the Group notarised the disposal of an asset in Maintal,
for €40.1m. The mixed-use site which comprises 38,000 sqm of storage,
industrial and office space is 83% occupied. The sale is expected to complete
in March 2024.
On 6 November 2023, the Group completed the acquisition of three multi-let
studio sites located in Islington and Camden, London. Total acquisition costs
are £35.7m (€41.2m). The sites have a combined lettable area of 103,962 sq
ft (9,658 sqm).
Business analysis
Non-IFRS measures
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Total profit for the period attributable to the owners of the Company 31.7 70.0
Add loss/(deduct gain) on revaluation of investment properties 10.1 (26.8)
Deduct gain on disposal of properties (net of related tax) 0.0 (4.7)
Change in fair value of derivative financial instruments 0.8 (1.2)
Deferred tax in respect of EPRA fair value movements on investment properties 5.2 5.3
Add loss/(deduct gain) on revaluation of investment property relating to 0.5 (1.9)
associates
Tax in relation to the revaluation gains/losses on investment property (0.1) 0.5
relating to associates above
EPRA earnings 48.2 41.2
Deduct change in deferred tax relating to derivative financial instruments 0.1 0.2
(Deduct)/add change in fair value of derivative financial instruments (0.8) 1.2
Headline earnings after tax 47.5 42.6
Add/(deduct) change in fair value of derivative financial instruments (net of 0.7 (1.4)
related tax and NCI)
Deduct revaluation loss relating to leased investment properties (0.7) (0.9)
Add adjusting items(1) (net of related tax and NCI) 1.8 3.0
Adjusted earnings after tax 49.3 43.3
(1) See note 10 of the Interim Report.
For more information on EPRA earnings refer to Annex 1.
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
EPRA earnings 48.2 41.2
Weighted average number of ordinary shares 1,169,697,061 1,167,383,139
EPRA earnings per share (cents) 4.12 3.53
Headline earnings after tax 47.5 42.6
Weighted average number of ordinary shares 1,169,697,061 1,167,383,139
Headline earnings per share (cents) 4.06 3.65
Adjusted earnings after tax 49.3 43.3
Weighted average number of ordinary shares 1,169,697,061 1,167,383,139
Adjusted earnings per share (cents) 4.21 3.71
Annex 1 - non-IFRS measures
Basis of preparation
The Directors of Sirius Real Estate Limited have chosen to disclose additional
non-IFRS measures; these include EPRA earnings, adjusted net asset value, EPRA
net reinstatement value, EPRA net tangible assets, EPRA net disposal value,
EPRA loan to value, adjusted profit before tax and funds from operations
(collectively "Non-IFRS Financial Information").
The Directors have chosen to disclose:
• EPRA earnings in order to assist in comparisons with similar
businesses in the real estate sector. EPRA earnings is a definition of
earnings as set out by the European Public Real Estate Association. EPRA
earnings represents earnings after adjusting for (where applicable)
gains/losses on revaluation of investment properties, gains/losses on disposal
of properties (net of related tax), recoveries from prior disposals of
subsidiaries (net of related tax), refinancing costs, exit fees and prepayment
penalties, goodwill impairment, acquisition costs in relation to business
combination, changes in fair value of derivative financial instruments
(collectively the "EPRA earnings adjustments"), deferred tax in respect of the
EPRA earnings adjustments, NCI relating to revaluation (net of related tax),
gains/losses on revaluation of investment property relating to associates and
the related tax thereon. The reconciliation between basic and diluted earnings
and EPRA earnings is detailed in table A below.
• Adjusted net asset value in order to assist in comparisons with
similar businesses. Adjusted net asset value represents net asset value after
adjusting for derivative financial instruments at fair value and net deferred
tax asset/liability. The reconciliation for adjusted net asset value is
detailed in table B below.
• EPRA net reinstatement value ("EPRA NRV") in order to assist in
comparisons with similar businesses in the real estate sector. EPRA NRV is a
definition of net asset value as set out by the European Public Real Estate
Association. EPRA NRV represents net asset value after adjusting for
derivative financial instruments at fair value, deferred tax relating to
valuation movements and derivative financial instruments and real estate
transfer tax presented in the Valuation Certificate (for the entire
consolidated Group including wholly owned entities and investment in
associates). The reconciliation for EPRA NRV is detailed in table C below.
• EPRA net tangible assets ("EPRA NTA") in order to assist in
comparisons with similar businesses in the real estate sector. EPRA NTA is a
definition of net asset value as set out by the European Public Real Estate
Association. EPRA NTA represents net asset value after adjusting for (where
applicable) derivative financial instruments at fair value, deferred tax
relating to valuation movements (excluding that relating to assets held for
sale) and derivative financial instruments, goodwill and intangible assets as
per the note reference in the unaudited condensed interim consolidated
statement of financial position (for the entire consolidated Group including
wholly owned entities and investment in associates). The reconciliation for
EPRA NTA is detailed in table C below.
• EPRA net disposal value ("EPRA NDV") in order to assist in
comparisons with similar businesses in the real estate sector. EPRA NDV is a
definition of net asset value as set out by the European Public Real Estate
Association. EPRA NDV represents net asset value after adjusting for (where
applicable) goodwill and the fair value of fixed interest rate debt (for the
entire consolidated Group including wholly owned entities and investment in
associates). The reconciliation for EPRA NDV is detailed in table C below.
• EPRA loan to value ("EPRA LTV") in order to assist in comparisons
with similar businesses in the real estate sector. EPRA LTV is a definition of
loan to value ratio as set out by the European Public Real Estate Association.
EPRA LTV represents net debt to total property value as defined in note 21. It
includes all capital which is not equity as debt, irrespective of its IFRS
classification, and is based upon proportional consolidation, therefore
including the Group's share in the net debt and net assets of associates.
Assets are included at fair value, net debt at nominal value. The
reconciliation for EPRA LTV is detailed in table D below.
• Adjusted profit before tax in order to provide an alternative
indication of the Group's underlying business performance. Accordingly, it
adjusts for the effect of the gains/losses on revaluation of investment
properties, gains/losses on revaluation relating to leased investment
properties, gains/losses on disposal of properties, gains/losses on
revaluation of investment property relating to associates and related tax,
other adjusting items and change in fair value of derivative financial
instruments. The reconciliation for adjusted profit before tax is detailed in
table E below.
• Funds from operations in order to assist in comparisons with similar
businesses and to facilitate the Group's dividend policy which is derived from
adjusted profit before tax. Accordingly, funds from operations excludes
depreciation and amortisation (excluding depreciation relating to IFRS 16),
net foreign exchange differences, amortisation of financing fees, adjustment
in respect of IFRS 16 and current tax excluding tax on disposals. The
reconciliation for funds from operations is detailed in table E below.
The Non-IFRS Financial Information is presented in accordance with the JSE
Limited Listings Requirements and The Guide on pro forma financial information
issued by SAICA. The Non-IFRS Financial Information is the responsibility of
the Directors. The Non-IFRS Financial Information has been presented for
illustrative purposes and, due to its nature, may not fairly present the
Group's financial position or result of operations. The Non-IFRS Financial
Information required by the JSE Limited Listings Requirements solely relates
to Headline Earnings Per Share and not EPRA.
The Non-IFRS measures included in the Interim Report 2023 have not been
reviewed nor reported on by the independent reporting accountant. The starting
point for all the Non-IFRS Financial Information has been extracted from the
Group's unaudited condensed interim set of consolidated financial statements
for the six months ended 30 September 2023 (the "consolidated financial
statements").
Table A - EPRA earnings
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Basic and diluted earnings attributable to owners of the Company(1) 31.7 70.0
Add loss/(deduct gain) on revaluation of investment properties(2) 10.1 (26.8)
Deduct gain on disposal of properties (net of related tax)(3) 0.0 (4.7)
Change in fair value of derivative financial instruments(4) 0.8 (1.2)
Deferred tax in respect of EPRA fair value movements on investment 5.2 5.3
properties(5)
Add loss/(deduct gain) on revaluation of investment property relating to 0.5 (1.9)
associates(6)
Tax in relation to the revaluation gains/losses on investment property (0.1) 0.5
relating to associates(7)
EPRA earnings(8) 48.2 41.2
Notes:
(1) Presents the profit attributable to owners of the Company which has been
extracted from the unaudited condensed interim consolidated income statement
within the consolidated financial statements.
(2) Presents the gain or loss on revaluation of investment properties which
has been extracted from the unaudited condensed interim consolidated income
statement within the consolidated financial statements.
(3) Presents the gain or loss on disposal of properties (net of related tax)
which has been extracted from note 10 within the consolidated financial
statements.
(4) Presents the change in fair value of derivative financial instruments
which has been extracted from the unaudited condensed interim consolidated
income statement within the consolidated financial statements.
(5) Presents deferred tax relating to origination and reversal of temporary
differences of the EPRA fair value movements on investment properties which
has been extracted from note 9 within the consolidated financial statements.
(6) Presents the gain or loss on revaluation of investment property relating
to associates which has been extracted from note 10 within the consolidated
financial statements.
(7) Presents tax in relation to the revaluation gains/losses on investment
property relating to associates which has been extracted from note 10 within
the consolidated financial statements.
(8) Presents the EPRA earnings for the period.
Table B - Adjusted net asset value
Unaudited Audited
30 September 31 March
2023 2023
€m €m
Net asset value
Net asset value for the purpose of assets per share (assets attributable to 1,201.5 1,197.1
the owners of the Company)(1)
Deferred tax liabilities(2) 85.4 80.2
Derivative financial instruments at fair value(3) (0.5) (1.3)
Adjusted net asset value attributable to the owners of the Company((4)) 1,286.4 1,276.0
Notes:
(1) Presents the net asset value for the purpose of assets per share (assets
attributable to the owners of the Company) which has been extracted from the
unaudited condensed interim consolidated statement of financial position
within the consolidated financial statements.
(2) Presents the net deferred tax liabilities or assets which have been
extracted from the unaudited condensed interim consolidated statement of
financial position within the consolidated financial statements.
(3) Presents current derivative financial instrument assets which have been
extracted from the unaudited condensed interim consolidated statement of
financial position from the consolidated financial statements.
(4) Presents the adjusted net asset value attributable to the owners of the
Company as at period end.
Table C - EPRA net asset measures
Unaudited 30 September 2023 EPRA NRV EPRA NTA EPRA NDV
€m €m €m
Net asset value as at period end (basic)(1) 1,201.5 1,201.5 1,201.5
Diluted EPRA net asset value at fair value 1,201.5 1,201.5 1,201.5
Group
Derivative financial instruments at fair value(2) (0.5) (0.5) n/a
Deferred tax in respect of EPRA fair value movements on investment 85.4 85.2* n/a
properties(3)
Intangibles(4) n/a (3.9) n/a
Fair value of fixed interest rate debt(5) n/a n/a 114.7
Real estate transfer tax(6) 165.3 n/a n/a
Investment in associate
Deferred tax in respect of EPRA fair value movements on investment 7.1 7.1* n/a
properties(3)
Fair value of fixed interest rate debt(5) n/a n/a 9.7
Real estate transfer tax(6) 9.4 n/a n/a
Total EPRA NRV, NTA and NDV(7) 1,468.2 1,289.4 1,325.9
Audited 31 March 2023 EPRA NRV EPRA NTA EPRA NDV
€m €m €m
Net asset value as at period end (basic)(1) 1,197.1 1,197.1 1,197.1
Diluted EPRA net asset value at fair value 1,197.1 1,197.1 1,197.1
Group
Derivative financial instruments at fair value(2) (1.3) (1.3) n/a
Deferred tax in respect of EPRA fair value movements on investment 80.2 80.1* n/a
properties(3)
Intangibles(4) n/a (4.1) n/a
Fair value of fixed interest rate debt(5) n/a n/a 99.2
Real estate transfer tax(6) 164.4 n/a n/a
Investment in associate
Deferred tax in respect of EPRA fair value movements on investment 7.0 7.0* n/a
properties(3)
Fair value of fixed interest rate debt(5) n/a n/a 9.9
Real estate transfer tax(6) 9.3 n/a n/a
Total EPRA NRV, NTA and NDV(7) 1,456.7 1,278.8 1,306.2
* The Group intends to hold and does not intend in the long term to sell
any of the investment properties and has excluded such deferred taxes for the
whole portfolio as at period end except for deferred tax in relation to assets
held for sale.
Notes:
(1) Presents the net asset value for the purpose of assets per share (assets
attributable to the owners of the Company) which has been extracted from the
unaudited condensed interim consolidated statement of financial position
within the consolidated financial statements.
(2) Presents current derivative financial instrument assets which have been
extracted from the unaudited condensed interim consolidated statement of
financial position within the consolidated financial statements.
(3) Presents for the Group the net deferred tax liabilities or assets which
have been extracted from note 9 of the consolidated financial statements and
for EPRA NTA only the additional credit adjustment for the deferred tax
expense relating to assets held for sale of €0.2m (31 March 2023: €0.1m).
For investment in associates the deferred tax income/(expense) arising on
revaluation gains/losses amounted to €0.1m (31 March 2023: €0.4m).
(4) Presents the net book value of software and licences with definite useful
life which has been extracted from note 14 within the consolidated financial
statements.
(5) Presents the fair value of financial liabilities and assets on the
unaudited condensed interim consolidated statement of financial position, net
of any related deferred tax.
(6) Presents the add-back of purchasers' costs in order to reflect the value
prior to any deduction of purchasers' costs, as shown in the Valuation
Certificate of Cushman & Wakefield LLP.
(7) Presents the EPRA NRV, EPRA NTA and EPRA NDV, respectively, as at period
end.
Table D - EPRA LTV metric
Proportionate consolidation
Unaudited 30 September 2023 Group Investment in associates Total
€m €m €m
Interest-bearing loans and borrowings((1)) 243.2 52.2 295.4
Corporate bonds((2)) 700.0 - 700.0
Net payables((3)) 77.2 5.7 82.9
Cash and cash equivalents((4)) (115.7) (6.6) (122.3)
Net debt (a)((5)) 904.7 51.3 956.0
Investment properties((6)) 2,129.5 125.5 2,255.0
Assets held for sale((7)) 7.3 - 7.3
Plant and equipment((8)) 7.4 - 7.4
Intangible assets((9)) 3.9 - 3.9
Loan to associates((10)) 44.3 - 44.3
Total property value (b)((11)) 2,192.4 125.5 2,317.9
EPRA LTV (a/b)((12)) 41.3% 40.9% 41.2%
Proportionate consolidation
Audited 31 March 2023 Group Investment in associates Total
€m €m €m
Interest-bearing loans and borrowings((1)) 264.4 52.1 316.5
Corporate bonds((2)) 700.0 - 700.0
Net payables((3)) 71.0 4.5 75.5
Cash and cash equivalents((4)) (124.3) (8.6) (132.9)
Net debt (a)((5)) 911.1 48.0 959.1
Investment properties((6)) 2,123.0 124.2 2,247.2
Assets held for sale((7)) 8.8 - 8.8
Plant and equipment((8)) 7.2 - 7.2
Intangible assets((9)) 4.1 - 4.1
Loan to associates((10)) 44.3 - 44.3
Total property value (b)((11)) 2,187.4 124.2 2,311.6
EPRA LTV (a/b)((12)) 41.7% 38.6% 41.5%
Notes:
(1) Presents the interest-bearing loans and borrowings which have been
extracted from the unaudited condensed interim consolidated statement of
financial position within the consolidated financial statements less the
corporate bonds which have been extracted from note 21 within the consolidated
financial statements.
(2) Presents the corporate bonds which have been extracted from note 21 within
the consolidated financial statements.
(3) Presents the net payables, which is the sum of trade and other
receivables, derivative financial instruments, trade and other payables,
current tax liabilities (all of which have been extracted from the unaudited
condensed interim consolidated statement of financial position within the
consolidated financial statements) and deposits which have been extracted
from note 16 within the consolidated financial statements.
(4) Presents the cash and cash equivalents which have been extracted from the
unaudited condensed interim consolidated statement of financial position
within the consolidated financial statements.
(5) Presents the net debt, which is the sum of interest-bearing loans and
borrowings, corporate bonds, and net payables, less cash and cash equivalents
which have been extracted from note 21 within the consolidated financial
statements.
(6) Presents the investment properties values which have been extracted from
the unaudited condensed interim consolidated statement of financial position
within the consolidated financial statements.
(7) Presents the assets held for sale which have been extracted from the
unaudited condensed interim consolidated statement of financial position
within the consolidated financial statements.
(8) Presents the plant and equipment which have been extracted from the
unaudited condensed interim consolidated statement of financial position
within the consolidated financial statements.
(9) Presents the intangible assets which have been extracted from the
unaudited condensed interim consolidated statement of financial position
within the consolidated financial statements.
(10) Presents the loan to associates which has been extracted from note 16
within the consolidated financial statements.
(11) Presents the total property value, which is the sum of investment
properties, assets held for sale, plant and equipment, intangible assets and
loan to associates.
(12) Presents the EPRA LTV which is net debt divided by total property value
in percentage.
Table E - Adjusted profit before tax and funds from operations
Unaudited Unaudited
six months six months
ended ended
30 September 30 September
2023 2022
€m €m
Reported profit before tax((1)) 39.8 75.7
Adjustments for:
Loss/(gain) on revaluation of investment properties(2) 10.1 (26.8)
Loss on revaluation relating to leased investment properties(3) (0.7) (0.9)
Gain on disposal of properties(4) 0.0 (4.8)
Loss/(gain) on revaluation of investment property from associates and related 0.4 (1.4)
tax(5)
Other adjusting items(6) 1.8 3.0
Change in fair value of financial derivatives(7) 0.8 (1.2)
Adjusted profit before tax(8) 52.2 43.6
Adjustments for:
Foreign exchange effects(9) - 0.3
Depreciation and amortisation (excluding depreciation relating to IFRS 16)(10) 1.7 1.7
Amortisation of financing fees(11) 1.5 1.6
Adjustment in respect of IFRS 16(12) 0.5 1.5
Current taxes incurred(13) (2.9) (0.3)
Add back current tax relating to disposals(14) - 0.1
Funds from operations(15) 53.0 48.5
Notes:
(1) Presents profit before tax which has been extracted from the unaudited
condensed interim consolidated income statement within the consolidated
financial statements.
(2) Presents the gain or loss on revaluation of investment properties which
has been extracted from the unaudited condensed interim consolidated income
statement within the consolidated financial statements.
(3) Presents the gain or loss on revaluation relating to leased investment
properties which has been extracted from note 12 within the consolidated
financial statements.
(4) Presents the gain or loss on disposal of properties which has been
extracted from the unaudited condensed interim consolidated income statement
within the consolidated financial statements.
(5) Presents the gain or loss on revaluation of investment property relating
to associates and related tax which has been extracted from note 10 within the
consolidated financial statements.
(6) Presents the total adjusting items which has been extracted from note 10
within the consolidated financial statements.
(7) Presents the change in fair value of derivative financial instruments
which has been extracted from the unaudited condensed interim consolidated
income statement within the consolidated financial statements.
(8) Presents the adjusted profit before tax for the period.
(9) Presents the net foreign exchange gains or losses as included in other
administration costs in note 5 within the consolidated financial statements.
(10) Presents depreciation of plant and equipment and amortisation of
intangible assets which have been extracted from note 5 within the
consolidated financial statements.
(11) Presents amortisation of capitalised finance costs which has been
extracted from note 8 within the consolidated financial statements.
(12) Presents the differential between the expense recorded in the unaudited
condensed interim consolidated income statement for the period relating to
head leases in accordance with IFRS 16 amounting to €2.2m (30 September
2022: €2.8m) and the actual cash expense recorded in the unaudited condensed
interim consolidated statement of cash flow for the period amounting to
€1.7m (30 September 2022: €1.3m).
(13) Presents the total current income tax which has been extracted from note
9 within the consolidated financial statements.
(14) Presents the current income tax charge relating to disposal of investment
properties which has been extracted from note 9 within the consolidated
financial statements.
(15) Presents the funds from operations for the period.
Glossary of terms
Adjusted earnings after tax is the earnings attributable to the owners of the Company, adjusted for the
effect of the gains/losses on revaluation of investment properties and related
tax (also to associates net of related tax), gains/losses on disposal of
properties and related tax, NCI relating to revaluation (net of related tax),
changes in fair value of derivative financial instruments (net of related tax
and NCI), revaluation gains/losses relating to leased investment properties
and adjusting items (net of related tax and NCI)
Adjusted net asset value is the assets attributable to the owners of the Company adjusted for
derivative financial instruments at fair value and net deferred tax
liabilities/assets
Adjusted profit before tax is the reported profit before tax adjusted for the effect of gains/losses on
revaluation of investment properties, gains/losses on revaluation relating to
lease investment properties, gains/losses on disposal of properties,
gains/losses on revaluation of investment property relating to associates and
related tax, other adjusting items and changes in fair value of derivative
financial instruments
Annualised acquisition net operating income is the income generated by a property less directly attributable costs at the
date of acquisition expressed in annual terms. Please see "annualised rent
roll" definition below for further explanatory information
Annualised acquisition rent roll is the contracted rental income of a property at the date of acquisition
expressed in annual terms. Please see "annualised rent roll" definition below
for further explanatory information
Annualised rent roll is the contracted rental income of a property at a specific reporting date
expressed in annual terms. Unless stated otherwise the reporting date is 30
September 2023. Annualised rent roll should not be interpreted nor used as a
forecast or estimate. Annualised rent roll differs from rental income
described in note 4 of the Interim Report and reported within revenue in the
unaudited condensed interim consolidated income statement for reasons
including:
• annualised rent roll represents contracted rental income at a specific
point in time expressed in annual terms;
• rental income as reported within revenue represents rental income
recognised in the period under review; and
• rental income as reported within revenue includes accounting
adjustments including those relating to lease incentives
Capital value is the market value of a property divided by the total sqm of a property
Company is Sirius Real Estate Limited, a company incorporated in Guernsey and resident
in the United Kingdom for tax purposes, whose shares are publicly traded on
the Main Market of the London Stock Exchange (primary listing) and the
Main Board of the Johannesburg Stock Exchange (primary listing)
Cumulative total return is the return calculated by combining the movement in investment property
value net of capex with the total net operating income less bank interest over
a specified period of time
EPRA earnings is earnings after adjusting for (where applicable) gains/losses on revaluation
of investment properties, gains/losses on disposal of properties (net of
related tax), recoveries from prior disposals of subsidiaries (net of related
tax), refinancing costs, exit fees and prepayment penalties, goodwill
impairment, acquisition costs in relation to business combinations, changes in
fair value of derivative financial instruments (collectively the "EPRA
earnings adjustments"), deferred tax in respect of the EPRA earnings
adjustments, NCI relating to revaluation (net of related tax), gains/losses on
revaluation of investment property relating to associates and the related tax
thereon
EPRA loan to value is the ratio of net debt to total property value as defined in note 21. It
includes all capital which is not equity as debt, irrespective of its IFRS
classification, and is based upon proportional consolidation, therefore
including the Group's share in the net debt and net assets of associates.
Assets are included at fair value, net debt at nominal value
EPRA net reinstatement value is the net asset value after adjusting for derivative financial instruments at
fair value, deferred tax relating to valuation movements and derivative
financial instruments and real estate transfer tax presented in the Valuation
Certificate, including the amounts of the above related to the investment in
associates
EPRA net tangible assets is the net asset value after adjusting for (where applicable) derivative
financial instruments at fair value, deferred tax relating to valuation
movements (just the part of the portfolio that the Group intends to hold
should be excluded) and derivative financial instruments, goodwill and
intangible assets as per the note reference in the unaudited condensed interim
consolidated statement of financial position, including the amounts of the
above related to the investment in associates
EPRA net disposal value is the net asset value after adjusting for (where applicable) goodwill and the
fair value of fixed interest rate debt, including the amounts of the above
related to the investment in associates
EPRA net initial yield is the annualised rent roll based on the cash rents passing at reporting date,
less non-recoverable property operating expenses, divided by the market value
of the property, increased with (estimated) purchasers' costs
EPRA net yield is the net operating income generated by a property expressed as a percentage
of its value plus purchase costs
ERV is the estimated rental value which is the annualised rental income at 100%
occupancy
Funds from operations is adjusted profit before tax adjusted for depreciation and amortisation
(excluding depreciation relating to IFRS 16), amortisation of financing fees,
net foreign exchange differences, adjustment in respect of IFRS 16 and current
tax excluding tax on disposals
Geared IRR is an estimate of the rate of return taking into consideration debt
Gross loan to value ratio is the ratio of principal value of total debt to the aggregated value of
investment property
Like for like refers to the manner in which metrics are subject to adjustment in order to
make them directly comparable. Like-for-like adjustments are made in relation
to annualised rent roll, rate and occupancy and eliminate the effect of asset
acquisitions and disposals that occur in the reporting period
LTIP Long Term Incentive Plan
LTV loan to value
Net loan to value ratio is the ratio of principal value of total debt less cash, excluding that which
is restricted in contractual terms, to the aggregate value of investment
property
Net operating income is the rental, service charge and other income generated from investment and
managed properties less directly attributable costs
Net yield is the net operating income generated by a property expressed as a percentage
of its value
Occupancy is the percentage of total lettable space occupied as at reporting date
Operating cash flow on investment (geared) is an estimate of the rate of return based on operating cash flows and taking
into consideration debt
Operating cash flow on investment (ungeared) is an estimate of the rate of return based on operating cash flows
Operating profit is the net operating income adjusted for gains/losses on revaluation of
investment properties, gains/losses on disposal of properties, movement in
expected credit loss provision, administrative expenses and share of profit of
associates
Rate for the German portfolio is rental income per sqm expressed on a monthly basis
as at a specific reporting date
for the UK portfolio is rental income (includes estimated service charge
element) per sqm expressed on a monthly basis as at a specific reporting date
in EUR
for the UK portfolio is rental income (includes estimated service charge
element) per sq ft expressed on an annual basis as at a specific reporting
date in GBP
Senior Management Team as set out on page 88 of the Group's Annual Report and Accounts 2023
SIP Share Incentive Plan
Total debt is the aggregate amount of the interest-bearing loans and borrowings
Total shareholder accounting return is the return obtained by a shareholder calculated by combining both movements
in adjusted NAV per share and dividends paid
Total return is the return for a set period of time combining valuation movement and income
generated
Ungeared IRR is an estimate of the rate of return
Weighted average cost of debt is the weighted effective rate of interest of loan facilities expressed as a
percentage
Weighted average debt expiry is the weighted average time to repayment of loan facilities expressed in
years
Corporate directory
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
JSE Share Code: SRE
LSE (GBP) Share Code: SRE
LEI: 213800NURUF5W8QSK566
ISIN Code: GG00B1W3VF54
Registered office
Elizabeth House
Les Ruettes Brayes
St Peter Port
Guernsey GY1 1EW
Channel Islands
Registered number
Incorporated in Guernsey under The Companies (Guernsey) Law, 2008, as amended,
under number 46442
Company Secretary
A Gallagher
Sirius Real Estate Limited
Elizabeth House
Les Ruettes Brayes
St Peter Port
Guernsey GY1 1EW
Channel Islands
UK solicitors
Norton Rose Fulbright LLP
3 More London Riverside
London SE1 2AQ
United Kingdom
Financial PR
FTI Consulting LLP
200 Aldersgate Street
London EC1A 4HD
United Kingdom
JSE sponsor
PSG Capital Proprietary Limited
1st Floor, Ou Kollege Building
35 Kerk Street
Stellenbosch 7600
South Africa
Joint broker
Peel Hunt LLP
100 Liverpool Street
London EC2M 2AT
United Kingdom
Joint broker
Berenberg
60 Threadneedle Street
London EC2R 8HP
United Kingdom
Property valuer
Cushman & Wakefield LLP
Rathenauplatz 1
60313 Frankfurt am Main
Germany
Independent auditor
Ernst & Young LLP
PO Box 9, Royal Chambers
St Julian's Avenue
St Peter Port
Guernsey GY1 4AF
Channel Islands
Guernsey solicitors
Carey Olsen (Guernsey) LLP
PO Box 98
Carey House
Les Banques
St Peter Port
Guernsey GY1 4BZ
Channel Islands
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