REG - Unite Group PLC - Interim Results <Origin Href="QuoteRef">UTG.L</Origin> - Part 4
29/10/2014 15:49
- Part 4: For the preceding part double click ID:nRSb1800Qc
interest
£m £m
Recognised in the income statement:
Operations segment result 11.3 - 11.3
Minority interest share of Operations segment result 1.1 - 1.1
Management fee adjustment relating to trading with joint venture 2.4 - 2.4
Net revaluation gains 13.5 - 13.5
Discount on interest free loans (15.4) 15.4 -
Debt exit costs (2.2) - (2.2)
Loss on cancellation of interest rate swaps (3.8) - (3.8)
Landsbanki cash received 2.3 - 2.3
9.2 15.4 24.6
Recognised in equity:
Movement in effective hedges 8.4 - 8.4
Other adjustments to the carrying value:
Profit adjustment related to trading with joint venture (4.2) 1.8 (2.4)
Increase in loan to OCB - 1.4 1.4
Additional capital invested in UCC 3.4 - 3.4
Additional capital invested in LSAV 8.4 - 8.4
UCC promote 7.5 - 7.5
Transfer from investment loan to investments 19.6 (19.6) -
Distributions received (9.9) - (9.9)
Increase in carrying value 42.4 (1.0) 41.4
Carrying value at 1 January 194.8 11.2 206.0
Carrying value at 31 December 237.2 10.2 247.4
b) Transactions with joint ventures
The Group acts as asset and property manager for the joint ventures and receives management fees in relation to these
services.
In addition, the Group is entitled to promote fees from USAF and UCC if the joint ventures outperform certain benchmarks.
The Group receives an enhanced equity interest in the JV's as consideration for the promote fee. The Group has recognised
the following management fees in its results for the year.
Unaudited Unaudited Year to
6 months to 6 months to 31 December
30 June 2014 30 June 2013 2013
£m £m £m
USAF 3.3 3.3 6.6
UCC/LSAV 1.8 1.8 3.5
OCB 0.3 0.5 0.9
Property management fees 5.4 5.6 11.0
1.
UCC/LSAV 2.3 - 0.9
Development management fees 2.3 - 0.9
2.
UCC/LSAV - - 7.5
Promote fees - - 7.5
Total fees 7.7 5.6 19.4
Section 4: Funding
The Group finances its development and investment activities through a mixture of retained earnings, borrowings and equity.
The Group continuously monitors its financing arrangements to manage its gearing.
Interest rate swaps are used to manage the Group's risk to fluctuations in interest rate movements.
The following pages provide disclosures about the Group's funding position, including borrowings and hedging instruments.
4.1 Borrowings
The table below analyses the Group's borrowings which comprise bank and other loans by when they fall due for payment:
Unaudited Unaudited Year to
6 months to 6 months to 31 December
30 June 2014 30 June 2013 2013
£m £m £m
Current
In one year or less, or on demand 1.3 115.2 29.7
Non-current
In more than one year but not more than two years 12.2 2.6 93.2
In more than two years but not more than five years 145.3 132.6 182.3
In more than five years 330.4 230.2 208.2
487.9 365.4 483.7
Total borrowings 489.2 480.6 513.4
The carrying value of borrowings is considered to be approximate to fair value, except for the Group's fixed rate loans
carried at £333.0 million (2013: £227.8 million) and the convertible bond carried at £81.6 million (2013: £nil). The
convertible bond and £90.0 million of fixed rate loans are classified as level 1 in the IFRS 13 fair value hierarchy and
have a fair value of £188.1 million (2013: £91.8 million).
The remaining £243.0 million (2013: £137.8 million) of fixed rate loans are classified as level 2 in the IFRS 13 fair value
hierarchy. The fair value of these fixed rate loans has been calculated by a third party expert discounting estimated
future cash flows on the basis of market expectation of future interest rates. The fair value of these loans is £241.5
million (2013: £139.1 million).
4.2 Interest rate swaps
The Group uses interest rate swaps to manage the Group's exposure to interest rate fluctuations. In accordance with the
Group's treasury policy, the Group does not hold or issue interest rate swaps for trading purposes and only holds swaps
which are considered to be commercially effective.
The following table shows the fair value of interest rate swaps:
Unaudited Unaudited Year to
6 months to 6 months to 31 December
30 June 2014 30 June 2013 2013
£m £m £m
Current 0.9 0.3 2.0
Non-current 1.5 14.2 3.4
Fair value of interest rate swaps 2.4 14.5 5.4
The fair values of interest rate swaps have been calculated by a third party expert, discounting estimated future cash
flows on the basis of market expectations of future interest rates, representing Level 2 in the IFRS 13 fair value
hierarchy. The IFRS 13 level categorisation relates to the extent the fair value can be determined by reference to
comparable market values. The classifications range from level 1 where instruments are quoted on an active market through
to level 3 where the assumptions used to arrive at fair value do not have comparable market data.
4.3 Dividends
During the 6 months to 30 June 2014, the Company declared and paid a final dividend of £6.3 million (2013: £4.7 million).
After the period end, the Directors proposed an interim dividend of 2.2p per share (2013: 1.6p per share). No provision has
been made in relation to this dividend.
Independent review report to The UNITE Group plc
Introduction
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 June 2014 which comprises the consolidated income statement, the consolidated statement of
comprehensive income, the consolidated balance sheet, the consolidated statement of changes in shareholders' equity, the
consolidated statement of cash flows and the related explanatory notes. 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.
This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting
the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK
FCA"). Our review has been undertaken so that we might state to the company those matters we are required to state to it in
this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in section 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by
the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the
half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for
use in the UK. 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 Ireland) 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.
Conclusion
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 June 2014 is not prepared, in all material
respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.
William Meredith for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square, London, E14 5GL
28 August 2014
Company information
Registered office
The Core
40 St Thomas Street
Bristol BS1 6JX
Auditor
KPMG LLP
15 Canada Square
London E14 5GL
Registrars
Computershare Investor Services PLC
PO Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
Financial advisers and brokers
J.P. Morgan Cazenove Limited
25 Bank Street
London E14 5JP
Numis Securities Limited
10 Paternoster Square
London EC4M 7LT
Financial PR
Bell Pottinger
Holborn Gate
330 High Holborn
London WC1V 7QD
Registered number
3199160
This information is provided by RNS
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