REG - Supermarket Inc REIT - Half-year Report <Origin Href="QuoteRef">SUPR.L</Origin> - Part 3
05/02/2018 07:05
- Part 3: For the preceding part double click ID:nRSE8473Db
facility. The strike rate of the cap as at 31 December 2017 was 1.75%
which caps the Group's cost of borrowing at 3.35% on the hedged notional
amount.It is the Group's target to hedge at least 60% of the Group's
total debt at any time using interest rate derivatives.In accordance with
the Group's treasury risk policy, the Group applies cash flow hedge
accounting in partially hedging the interest rate risks arising on its
variable rate linked loans. Changes in the fair values of derivatives
that are designated as cash flow hedges and are effective are recognised
directly in the cash flow hedge reserve and included in other
comprehensive income. Any ineffectiveness that may arise in this hedge
relationship will be included in profit or loss. The interest rate
derivative valuation is classified as level 2 in the fair value hierarchy
as defined in IFRS 13.
NOTES TO THE FINANCIAL STATEMENTS
16. Share capital
Ordinary sharesof 1 pence Share capital Share premium reserve Capital reduction reserve Total
Number £'000 £'000 £'000 £'000
As at 1 June 2017 - - - - -
Issue of 1 ordinary share 1 - - - -
Issue of 50,000 redeemable preference shares - one quarter paid up - 12 - - 12
Cancellation of 50,000 redeemable preference shares - (12) - - (12)
Ordinary shares issued - 18 July 2017 100,000,000 1,000 99,000 - 100,000
Ordinary shares issued - 15 November 2017 19,999,999 200 19,800 - 20,000
Cancellation of 1 ordinary share (1) - - - -
Share issue costs - - (2,438) - (2,438)
119,999,999 1,200 116,362 - 117,562
Transfer to capital reduction reserve - - (30,000) 30,000 -
Dividend paid in the period (note 10) - - - (1,375) (1,375)
As at 31 December 2017 119,999,999 1,200 86,362 28,625 116,187
Share allotments and other movements in relation to the capital of the Company in the
period:
On incorporation the Company issued 1 ordinary share of one pence which was fully
paid up and 50,000 redeemable preference shares of £1 each which were paid up to one
quarter of their nominal value. Both of these share classes were issued to Atrato
Capital Limited (see note 19). On 18 July 2017 the Directors resolved to redeem the
50,000 redeemable preference shares.
On 16 June 2017, the Board approved a proposed placing and offer for subscription
(together the 'Placing'). It was intended that the ordinary shares of the Company to
be issued as a result of the Placing would be admitted to trading on the Specialist
Fund Segment of the Main Market of the London Stock Exchange ('Admission').
On 18 July 2017, the Company issued 100 million ordinary shares of one pence each at
a price of £1 per share, raising gross proceeds from the Placing of £100 million.
Admission subsequently took place on 21 July 2017. The consideration received in
excess of the par value of the ordinary shares issued, net of total capitalised issue
costs, of £96.9 million was credited to the share premium reserve.
Following a successful application to the High Court and lodgement of the Company's
statement of capital with the Registrar of Companies, the Company was permitted to
reduce the capital of the Company by an amount of £30 million. This was effected on 7
September 2017 by a transfer of that amount from the share premium reserve to the
capital reduction reserve. The capital reduction reserve is classed as a
distributable reserve and dividends paid by the Company are currently being offset
against this reserve.
NOTES TO THE FINANCIAL STATEMENTS
16. Share capital (continued)
On 15 November 2017 the Company completed a further equity fundraising and issued an additional 19,999,999 ordinary shares of one pence each at a price of £1 per share. The consideration received in excess of the par value of the ordinary shares issued, net of total capitalised issue costs, of £19.5 million was credited to the share premium reserve.
Ordinary shareholders are entitled to all dividends declared by the Company and to all of the Company's assets after repayment of its borrowings and ordinary creditors. Ordinary shareholders have the right to vote at meetings of the Company. All ordinary shares carry equal voting rights.
17. Cash flow hedge reserve As at
31 December
2017
£' 000
As at 1 June 2017 -
Change in fair value of the interest rate derivative in the period (90)
As at 31 December 2017 (90)
18. Capital commitments
The Group had no capital commitments outstanding as at 31 December 2017.
19. Transactions with related parties
Details of the related parties to the Group in the period and the transactions with these related parties were as follows:
a. Directors
Directors' fees
Andrew Nicholas Hewson, Chairman of the Board of Directors of the Company, is paid fees of £55,000 per annum, with the other two Directors each being paid fees of £35,000 per annum. Jonathan Austen is paid an additional £5,000 per annum for his role as chair of the Company's Audit Committee.
The total remuneration payable to the Directors in respect of the period to 31 December 2017 was £73,000. There were no amounts outstanding at the end of the period.
Directors' interests
Details of the direct and indirect interests of the Directors and their close families in the ordinary shares of one pence each in the Company at 31 December 2017 were as follows:
NOTES TO THE FINANCIAL STATEMENTS
19. Transactions with related parties (continued)· Andrew Nicholas Hewson: 280,000 shares· Jonathan Austen: 35,000
shares· Vincent John Prior: 35,431 shares
b. Investment Adviser
Advisory fees
The investment adviser to the Group, Atrato Capital Limited (the 'Investment Adviser'), is entitled to certain advisory fees
under the terms of the Investment Advisory Agreement (the 'Agreement') dated 20 June 2017.
The entitlement of the Investment Adviser to advisory fees is by way of what are termed 'Monthly Management Fees' and 'Semi
-Annual Management Fees' both of which are calculated by reference to the net asset value of the Group at particular dates, as
adjusted for the financial impact of certain investment events and after deducting any un-invested proceeds from share issues up
to the date of the calculation of the relevant fee (these adjusted amounts are referred to as 'Adjusted Net Asset Value' for the
purpose of calculation of the fees in accordance with the Agreement).
Until the Adjusted Net Value of the Group exceeds £500 million, which it has not as at 31 December 2017, the entitlements to
advisory fees can be summarized as follows:
· Monthly Management Fee payable monthly in arrears: 1/12th of 0.7125% per calendar month of Adjusted Net Asset Value up to
or equal to £500 million;
· Semi-Annual Management Fee payable semi-annually in arrears: 0.11875% of Adjusted Net Asset Value up to or equal to £500
million.
For the period to 31 December 2017 the total advisory fees payable to the Investment Adviser were £440,000, of which £265,000 is
included in trade and other payables in the consolidated statement of financial position.
Interest in shares of the Company
Details of the direct and indirect interests of the Directors of the Investment Adviser and their close families in the ordinary
shares of one pence each in the Company at 31 December 2017 were as follows:
· Benedict Luke Green: 900,000 shares
· Steve Peter Windsor: 1,030,000 shares
NOTES TO THE FINANCIAL STATEMENTS
19. Transactions with related parties (continued) c. Transactions with other related parties
Morgan Williams act as the Senior Adviser to the Company, with their appointment being to provide their supermarket expertise to assist in sourcing suitable assets for investment. Any fees payable to the Senior Adviser form part of the acquisition costs in relation to the acquisition of the relevant property.
Mark Morgan is a partner in Morgan Williams and sits on the Investment Committee of the Investment Adviser.
In the period to 31 December 2017 the amount payable to Morgan Williams for these services was £1,008,000 all of which has been capitalised as additions to investment properties. £250,000 of the amounts payable were outstanding at the end of the period and included in trade and other payables in the consolidated statement of financial position.
Other transactions:
Other than those related party transactions disclosed in this or other notes to the financial statements the Directors are not aware of any transactions with related parties requiring disclosure. The Company does not have an ultimate controlling party.
Other than those related party transactions disclosed in this or other notes
to the financial statements the Directors are not aware of any transactions
with related parties requiring disclosure. The Company does not have an
ultimate controlling party.
20. Net asset value (NAV) per share
Basic NAV per share is calculated by dividing the Group's net assets as shown in the consolidated statement of financial position that are attributable to the ordinary equity holders of the Company by the number of ordinary shares outstanding at the end of the period. As there are no dilutive instruments outstanding, basic and diluted NAV per share are identical.
NAV and EPRA NAV per share calculation are as follows: As at
31 December
2017
£' 000
Net assets per the consolidated statement of financial position 112,544
Fair value of interest rate derivatives (55)
EPRA NAV 112,489
Number
Ordinary shares in issue at 31 December 2017 119,999,999
NAV per share - Basic and diluted (pence) 94p
EPRA NAV per share (pence) 94p
NOTES TO THE FINANCIAL STATEMENTS
20. Net asset value (NAV) per share (continued) EPRA has issued guidelines aimed at enabling entities to provide a comparable measure of NAV on the basis of long term fair values. The EPRA measure excludes items that are considered to have no impact in the long term. For the current period EPRA NAV is calculated as net assets per the consolidated statement of financial position excluding the fair value of interest rate derivatives.
20. Net asset value (NAV) per share (continued) EPRA has issued guidelines
aimed at enabling entities to provide a comparable measure of NAV on the basis
of long term fair values. The EPRA measure excludes items that are considered
to have no impact in the long term. For the current period EPRA NAV is
calculated as net assets per the consolidated statement of financial position
excluding the fair value of interest rate derivatives.
21. Subsequent events
On 5 February 2018 the Board declared a second interim dividend covering the period from 29 September to 31 December 2017. The dividend of 1.375 pence per ordinary share is payable on or around 3 March 2018 to shareholders on the register on 16 February 2018. The ex-dividend date will be 15 February 2018.
Company Information
DIRECTORS, REGISTERED OFFICE, SECRETARY AND ADVISERS
Directors Legal advisers
Nick Hewson - (Non-Executive Chairman) Macfarlanes LLP
Vincent Prior - (Non-Executive Director) 20 Cursitor Street
Jon Austen - (Non-Executive Director) London
EC4A 1LT
Registered office
7th Floor Administrator and Company Secretary
9 Berkeley Street JTC (UK) Limited
London 7th Floor
W1J 8DW 9 Berkeley Street
London
AIFM W1J 8DW
JTC Global AIFM Solutions Limited
Ground Floor Registrar
Dorey CourtAdmiral ParkSt Peter PortGuernseyGY1 2HT Capita Asset ServicesThe Registry34 Beckenham RoadBeckenhamKentBR3 4TU
Investment Adviser Auditor
Atrato Capital Limited BDO LLP
33 Wigmore Street 55 Baker Street
London London
W1U 1BZ W1U 7EU
Bankers Valuer
HSBC Bank plc Cushman & Wakefield
8 Canada Square 1 Curzon Street
Canary Wharf Mayfair
London London
E14 5HQ W1J 5HD
Barclays PLC
PO Box 3333
One Snowhill
Snow Hill
Queensway Birmingham
B3 2WN
This report will be available on the Company's website
www.supermarketincomereit.com
END
This information is provided by RNS
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