REG - Value & Index Prop - Annual Financial Report
11/06/2025 07:00
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RNS Number : 2478M Value and Indexed Prop Inc Tst PLC 11 June 2025
VALUE AND INDEXED PROPERTY INCOME TRUST PLC
FULL YEAR RESULTS FOR THE YEAR ENDED 31 MARCH 2025
Value and Indexed Property Income Trust PLC (VIP), the real estate investment
trust generating long, strong, indexed income from commercial property,
announces the publication of the Company's Annual Results for the year ended
31 March 2025. VIP became a REIT on 1 April 2025.
The Annual Report will be sent to Shareholders and is available below and also
on the Investment Manager's website at
https://olimproperty.co.uk/value-and-indexed-property-income-trust.html
(https://olimproperty.co.uk/value-and-indexed-property-income-trust.html)
Key Highlights
· Over the year, VIP's share price increased by 6.9% to give a
share price total return of 15.0%.
· The net asset value (NAV) total return was 7.1%.
· The dividend yield at 31 March 2025 was 7.5% (2024: 7.7%).
· The property portfolio delivered a total return of 9.0% over
the year against 6.3% for the benchmark, the MSCI UK Quarterly Property
Index.
· 97% of rent reviews are now linked to inflation (88% to the
Retail Prices Index (RPI) and a further 9% to the Consumer Prices Index (CPI).
· Disposal of six properties totalling £12.4 million, 5.0% above
their valuation total at a net initial yield of 7.4%.
· Acquisition of the Bridgemere Garden Centre investment near
Nantwich for £16.5 million at a net initial yield of 6.6%, rising to 7.8% in
December 2025, let on an RPI-linked lease with 24 years unexpired.
· Average interest rate on VIP's borrowings now 4.5% (of which
96% is fixed), average loan length 6.9 years and loan to value ratio 39%.
· £10 million of a £15 million loan expiring in March 2026
repaid (£6 million in January 2025 and £4 million in April 2025, post VIP's
year end).
During the year to 31 March 2025, Value and Indexed Property Income Trust PLC
(VIP or the Company) was an investment trust company listed on the London
Stock Exchange. On 1 April 2025, the Company became a UK Real Estate
Investment Trust (REIT). The Company invests directly in UK commercial
property to deliver long, strong, indexed income.
VIP's medium term dividend policy is for increases at least in line with
inflation, underpinned by VIP's indexed property income, and the dividend per
share has risen every year since 1986 when OLIM's management began. It has
risen by 1,004% (6.5% p.a.) against the Retail Prices Index rise of 293% (3.7%
p.a.). Three interim dividends of 3.4p each were paid on 25 October 2024, 31
January 2025, and 25 April 2025. The targeted total dividend for the full year
is 13.8p (+4.5%), including a recommended final dividend of 3.6p to be paid as
a PID (Property Income Distribution) on 25 July 2025.
VIP's property portfolio is valued at £146 million and delivered a total
return of 9.0% over the year against 6.3% for the MSCI UK Quarterly Property
Index. Over the past five years, the VIP property return was 3.9% p.a. (Index
2.1% p.a.), over 10 years it was 6.7% p.a. (Index 4.0% p.a.) and over 38 years
it was 10.9% p.a. (Index 7.7% p.a.).
Over the year to 31 March 2025, VIP's portfolio was improved by the sale of
six properties for a total of £12.4 million (£12.3 million net), 5.0% above
their valuation total at a net initial yield of 7.4%. These sales comprised
four shorter let industrial investments, a short let library and convenience
store in Wales and an over-rented London pub. One acquisition was made during
the year, the Bridgemere Garden Centre investment near Nantwich, for £16.5
million (£17.5 million including costs) at a net initial yield of 6.6%,
rising to 7.8% in December 2025 with 24 years unexpired to Blue Diamond UK Ltd
on an RPI-linked lease.
NOTICE OF AGM
The Annual General Meeting of the Company will be held at 12.30pm on
Thursday,10 July 2025 at the offices of Shepherd & Wedderburn LLP, 4th
Floor, 1-6 Lombard Street, London, EC3V 9AA.
Enquiries:
OLIM Property Limited, Investment Manager - Tel: 020 7846 3252
sarah.martin@olimproperty.co.uk
matthew.oakeshott@olimproperty.co.uk
louise.cleary@olimproperty.co.uk
10 June 2025
About VIP: The policy of the Company is to invest directly in UK commercial
property and cash or near cash securities to deliver long, strong
index-related income. The Company will not invest in overseas property or
securities or in unquoted companies. UK directly held commercial property will
usually account for at least 80% of the total portfolio but it may fall below
that level if relative market levels and investment value, or a desired
increase in cash or near cash securities, make it appropriate. The Company
will not use derivatives.
https://www.investormeetcompany.com/value-and-indexed-property-income-trust-plc/register-investor
(https://www.investormeetcompany.com/value-and-indexed-property-income-trust-plc/register-investor)
Strategic Report
Chairman's Statement
I am pleased to report that the Company has now completed the transition begun
in 2021 from a mainly equity-based investment trust to a property company, and
on 1 April 2025 it became a Real Estate Investment Trust (REIT), with the tax
and marketing advantages that status offers. Subject to approval at this
years' Annual General Meeting (AGM), Shareholders will receive their first
Property Income Distribution (PID) on 25 July 2025. Further information on the
Company's new REIT status can be found in the Annual Report or by visiting the
Company's web pages hosted by the Investment Manager at
http://www.olimproperty.co.uk/value-and-indexed-property-income-trust.html
(http://www.olimproperty.co.uk/value-and-indexed-property-income-trust.html) .
The Company is proud of its sustained record of progressive dividend growth,
which it seeks to continue to maintain. At the year end, the yield on the
Company's shares (at the proposed dividend) was 7.5%.
Rents in the property portfolio are all indexed, although the details of the
indexation provisions vary - some are linked to the Retail Prices Index (RPI),
others to the Consumer Prices Index (CPI), which is the reference measure for
the Bank of England's target, which generally rises slightly more slowly. Most
reviews are subject to caps and collars. As the table below shows, the return
on the Company's portfolio should broadly match inflation so long as the rate
does not differ too much from the official target.
The portfolio has increased marginally in capital value during the period
under review, and the Company's NAV total return for the year is 7.1%. Some
smaller and lower quality properties have been sold and the major change in
portfolio structure is the acquisition of a large garden centre in a
prosperous part of north-west England. The portfolio is diversified by sector
and geography but the emphasis on alternatives remains strong.
The property portfolio's total return, including both income and capital
growth, has been 9.0% over the year. This return outperformed the 6.3% return
on its benchmark, the MSCI UK Quarterly Property Index, as it has over 5, 10,
20 and 38 years.
The share price total return for the year is 15.0%, substantially above the
NAV total return, due to a continued and welcome reduction in the discount of
the share price to NAV. The Board reiterates its commitment to Shareholders to
provide an exit at NAV less costs and proposals to achieve this will be put to
the 2026 AGM.
The economic outlook has become more uncertain, and as I write, the news is
filled with the erratic and bombastic utterances of President Trump. While his
tariff measures have little direct impact on the performance of the
investments in our portfolio, the resulting disruption to world trade and the
increase in the uncertainties which affect all businesses can only be
detrimental. We have some protection from instabilities in financial markets
as a result of moves to secure longer term financing of our debt, but short
term predictions of inflation and interest rates are particularly hazardous
today.
The property market has stabilised. This follows difficult years,
characterised by the Covid pandemic and the end of the abnormal period of very
low interest rates which followed the financial crisis. Although these factors
affected all kinds of property, different sectors experienced differential
effects. Secondary retail and office properties suffered from the continued
growth of online retailing and the development of 'working from home'.
The Board believes that these trends are permanent. Offices which do not meet
modern expectations of amenities and environmental standards will continue to
lose value. The city centres of the future will have a very different
character from their historic emphasis on functional shops and other services
for office workers.
The Company's portfolio has benefited from the Manager's early recognition of
these changes and the rebalancing of property investment towards out-of-town
facilities - 'alternatives' and industrials/warehouses - properties outside
the traditional sectoral focus on offices and shops.
International geopolitics are threatening. The wars in Gaza and Ukraine
continue, and Chinese political priorities are evidently more aggressive in
tone. While UK politics appear relatively stable, the long century in which
political opinions and political parties were identifiably placed along a
one-dimensional left-to-right axis of economic policies is at an end. The
proximate causes and particular manifestations of the decline of traditional
allegiances are different in the UK, the US, France, Germany, Italy and other
countries. But the phenomenon is common across the Western world and the
consequences will play out over decades to come.
These consequences may include the rise of populist strong men, the
fragmentation of political parties, and the realignment of international
alliances. All these events are likely to have negative effects on markets,
although they will also offer opportunities. Advances in technology will
continue to change the nature of business, in ways that will change the nature
and identity of desirable property assets. A portfolio such as ours, based on
real assets with inbuilt protection against inflation, should offer a safer,
if not safe, haven in such an uncertain world.
The Board is recommending a final dividend of 3.6 pence per Ordinary Share
making total dividends of 13.8p per share for the year to 31 March 2025
compared to 13.2p per Ordinary Share for the previous year, an increase of
4.5%. Subject to Shareholder approval at the 2025 AGM, the final dividend,
which will be paid as a PID, will be paid on 25 July 2025 to Shareholders on
the register on 27 June 2025. The ex-dividend date is 26 June 2025.
During the year under review, the Directors were delighted to announce the
appointment of Lorraine Reader as a Non-executive Director, further
strengthening the Board's overall property expertise.
Following the completion of the transition from an investment trust to an
exclusively property oriented company, I have decided to retire after 31 years
on the Board. I am proud of the dividend record the Company has been able to
maintain over this period and believe that the income and capital returns have
served Shareholders well. I am confident that the Company will continue to
prosper under its new status with its newer Directors. Accordingly, I will
step down as Chairman and from the Board following the conclusion of the 2025
AGM and I am pleased to report that David Smith will be appointed Chairman in
my place.
The Board looks forward to welcoming Shareholders to the AGM to be held at the
offices of Shepherd & Wedderburn LLP, 4th floor, 1-6 Lombard Street,
London EC3V 9AA at 12.30pm on Thursday, 10 July 2025. The Notice of the Annual
General Meeting can be found in the Annual Report. The Board encourages
Shareholders to attend or to vote using the proxy form, which can be submitted
to the Company's registrars, Computershare Investor Services PLC, The
Pavilions, Bridgewater Road, Bristol BS99 6ZY. Proxy forms should be completed
and returned in accordance with instructions thereon and the latest time for
the receipt of proxy forms is 12.30pm on 8 July 2025. Proxy votes can also be
submitted by Crest or online using the registrar's Share Portal Service at
investorcentre.co.uk/eproxy. (http://www.investorcentre.co.uk/eproxy)
John Kay
Chairman
10 June 2025
VIP property portfolio - sector weightings since 2014
Sector March 2025 March 2024 March 2023 March 2022 March 2021 March 2020 March 2014
Supermarkets 29% 29% 31% 30% 16% 2% 5%
Industrial / Warehouse 23% 28% 29% 33% 35% 32% 8%
Bowling and Health Club 18% 19% 9% 5% 8% 12% 0%
Garden Centre 12% 0% 0% 0% 0% 0% 0%
Hotels 8% 9% 9% 6% 0% 0% 0%
Caravan Park / Other 7% 9% 9% 9% 14% 16% 15%
Pubs / Restaurants 3% 6% 9% 13% 24% 32% 17%
Offices 0% 0% 0% 0% 0% 0% 0%
Shops 0% 0% 0% 0% 0% 0% 39%
Roadside 0% 0% 4% 4% 3% 6% 16%
Total 100% 100% 100% 100% 100% 100% 100%
Number of Properties 30 35 39 43 31 26 29
Manager's Report
The property market
UK commercial property capital values, as measured by the MSCI UK Quarterly
Property Index, the main benchmark for institutional property performance,
were just ahead by 0.4% on average over 2024 as a whole, after two years of
steep declines. Including rental income, the total return was +5.5%. But
capital values still fell by 5% on average for the office sector, with 0% - 2%
declines in the alternatives sector, offset by capital gains averaging 2% for
retail property and 4% for industrials.
MSCI UK Quarterly Property Index
Calendar 2024 Total Return % Growth %
Capital Rental Value Rent Passing
Retail 8.3 2.1 2.0 0.7
Office 0.0 -4.6 3.0 0.6
Industrial 8.3 3.6 5.7 5.4
Alternatives 3.9 -1.1 3.4 3.5
All property 5.5 0.4 3.7 2.9
Retail and industrial property outperformed the market, but for different
reasons: retail had the highest income yield, while industrials showed better
capital growth. Capital values in the alternatives sector generally stabilised
over the year, while office capital values kept falling, with rising vacancies
eroding total rents received on office property portfolios.
The property market has continued to edge higher overall from its
post-downturn low point last June, but President Trump's first quarter in the
White House is now making buyers nervous in property, as in other markets.
Turnover has, therefore, been low, with occasional keen yields achieved for
flavour of the month investments which tick every box for the few active
institutional investors. Some private equity houses are targeting big
corporate deals at a discount, mainly in the industrial sector. But most of
the market is thin and cautious at present.
% changes by sector peak to trough and recovery since
Sector June 2022 to June 2024 June 2024 to March 2025
Retail -18.7 +3.0
Office -28.7 -1.3
Industrial -25.5 +3.9
Alternatives -14.1 -0.8
All property -22.7 +1.5
UK commercial property - % growth rates to March 2025
6 months 1 year 3 years 5 years 10 years
Capital values All property 1.2 1.5 -7.2 -2.4 -0.7
Rental values All property 2.0 3.9 3.7 2.2 1.8
Total returns All property 3.7 6.5 -2.7 2.2 4.0
Source: MSCI UK Quarterly Property Index March 2025 - Standing Investments
Underlying rental values are still generally improving, led by industrials,
with all sectors showing some growth.
Comparative investment yields - End December (except 2025 end March)
2025 2024 2023 2022 2021 2020 2011 2008 2006
Property (equivalent yield) 6.6 6.6 6.5 6.1 5.1 5.8 6.9 8.3 5.4
Long Gilts Conventional 4.7 3.9 3.5 3.8 1.0 0.2 2.5 3.7 4.6
Index linked 1.4 0.4 0.2 0.3 -2.6 -2.6 -0.2 0.8 1.1
UK Equities 3.5 3.8 3.8 3.6 3.1 3.4 3.5 4.5 2.9
RPI (annual rate) 3.2 4.3 5.2 13.4 7.5 1.2 4.8 0.9 4.4
Yield gaps: Property less Conventional Gilts 1.9 2.7 3.0 2.3 4.1 5.6 4.4 4.6 0.8
Property less Index Linked Gilts 5.2 6.2 6.3 5.8 7.7 8.4 7.1 7.5 4.4
Property less Equities 3.1 2.8 2.7 2.5 2.0 2.4 3.4 3.8 2.5
Source: MSCI UK Quarterly Property Index and ONS for the RPI
The All Property vacancy rate has seen a significant increase over the past
year to an all time high of 12.4% in February 2024. The previous high was
10.7% in November 2009 in the wake of the Global Financial Crisis. This is
mainly due to office vacancies more than doubling to 26.0% from 12.0% in
December 2019 pre-Covid, but industrial vacancies have also risen over the
year from 6.7% to 9.6% to near record levels.
UK commercial property, with its high running yield and growing rental income,
offers fair value against UK equities and conventional fixed-coupon gilts, and
excellent value against index-linked gilts, which still only offer low real
returns at considerable capital risk, as shown by their performance since
2021.
Property portfolios with strong tenants, paying affordable rents on long,
preferably indexed leases for sustainable buildings in prosperous locations
should continue to outperform. Weaker or ex-growth properties need to be
weeded out and portfolio quality upgraded by new, stronger purchases and
improvements to existing properties. Secure and sustainable growing income
will be the key to delivering attractive real total returns and outperforming
the competition for UK commercial property portfolios in the years ahead.
Safety first must be the property investor's motto, with UK inflation far from
dead and US economic and foreign policy in flux.
Property prospects by sector
Industrial: Pressures building amid a "cautiously optimistic" environment
Investor enthusiasm failed to translate to significant transaction volumes in
Q1 2025; only a few larger core assets traded. 2024 transaction volumes
totalled £11.1bn, slightly up on 2023's levels but still way below the
sector's glory years of 2021 and 2022 and marginally below the 10-year
average. Capital values increased by 1.0% for the three months to March 2025
for all industrials in the MSCI UK Monthly Property Index and by 5.0% for the
12 month period.
The occupational market is weakening. Large, big box distribution units
recorded take up in 2024 of 21.2m sq ft, 33% below the five-year average, and
the industrial vacancy rate increased again to 9.0% in the MSCI UK Monthly
Property Index at end March 2025. This was up again, 2.1% over the 12 months
from March 2024 (6.9%) and almost double the record low of 5.2% in October
2021. Industrial vacancy rates were last recorded above 9% in the first half
of 2013.
Occupiers are reacting to rising labour and increasing occupational costs.
Given the rental growth of recent years, industrial will be the hardest hit
sector after the rates rise in April 2025 and occupiers are now consolidating
their property holdings and exiting any surplus or out of date space, which no
longer works for them physically or environmentally.
The sector's estimated future rental growth has decelerated and market
forecasts are now 3% p.a. and 4% p.a. for the next five years. These forecasts
are too high and will only reduce further with occupiers' affordability
concerns. Rental value growth in the MSCI UK Annual Index has run at an
average of 2.8% per annum over the last 20 years, and 5.6% over the past 10.
These records are skewed by the post Covid boom in industrial and warehouse
rents in 2021 and 2022, which both saw growth over 10%.
Incentives, offered as an inducement to take a new lease, are also increasing
- another sign of a weakening occupational market. A tenant taking a new 10
year lease in 2023 would have received an average of eight months' rent free
(10 months' today). In addition, capital contributions are increasing.
Industrial units are usually offered in a shell state for an occupier to fit
out at their cost with a landlord providing a small financial incentive if
demanded. Average fit out costs for industrial are c.£60 per sq ft, which is
now a prohibitive cost for many occupiers. Prologis, the industrial investor,
for example, has had to "retrofit", at their cost, several of its industrial
units to attract occupiers.
In summary, the industrial property market is now fighting headwinds as
occupiers grapple with increasing costs and investors face up to tenant
insolvency risk, rising void rates and uninspiring future rental growth. Those
investors who have been buying into the sector on the back of aggressive
rental growth and limited vacancy assumptions should be concerned. We remain
cautious for 2025 - investment volumes will stay flat, yields for the more
secondary stock could well expand a little, and income growth, the traditional
driver of performance under this stagnant backdrop, will be dull.
Despite these short-term indicators, to be expected during a downturn in a
property cycle, there is still a solid argument for UK industrial property for
the medium to long term. The sector's fundamentals are strong: rents are still
growing, land values in the South in particular will be underpined by
residential demand and global supply pressures could signal more onshoring and
increased occupational take up. There is still strong pent-up demand from UK
and overseas investors for the sector, which will drive values up again when
confidence returns.
Offices: The outlier - values still falling with market activity at an
all-time low
Office transaction volumes remained well below the long run averages for the
sector with the UK office market achieving a record annual low in 2024 at
£9.7bn, 52% below the 10-year average. Within that, the City of London
market, usually held up during down cycles by larger lot sizes trading, had
the lowest annual transaction volume since 1989 at £2.3 bn, significantly
down on 2023 and 65% below the five-year average of c.£6bn. The few
properties trading are either super prime or much smaller lot sizes for
conversions to leisure / residential uses. Office capital values are still
falling. The MSCI UK Monthly Property Index recorded no growth over the month
to end March 2025, -3.1% over the 12-month period and -12.5% per annum over
three years.
Vacancy rates have hit an all-time high at 26%. Annual take-up for the sector
for 2024 was 10.8 million sq ft, below the sector's 10-year average. Occupiers
who require more than 100,000 sq ft of space would normally commit to space at
least 24 months prior to need, yet pre letting activity was at a three-year
low last year. These occupiers are either downsizing or deferring their costly
move and negotiating lower rates on their current space with their desperate
landlord.
Some landlords are hoping occupancy rates will improve as the "return to the
office" gathers momentum throughout 2025 but occupier costs have increased
again with the business rates increase in April 2025. It is estimated that the
office sector will have almost £700 million added to its annual business
rates bill and larger premises may see at least a 20% increase. Occupiers will
either delay any property decisions and take-up will fall further or they will
be prompted to vacate space sooner and the vacancy rate will rise more.
One of the UK's largest office landlords, Land Securities, have announced the
sale of c. £2bn worth of key office investments to rebalance their portfolio
with more retail and residential. Other major office investors such as British
Land are expected to follow suit. The traditional investors are no longer
interested in the sector.
We just cannot envisage the office sector again becoming the mainstream player
it once was for the foreseeable future. The economic backdrop only makes the
sector look even more unattractive and not the "safe haven" investors seek
out. The only way the sector could gain any traction is if capital and rental
values fall further to stimulate demand.
Retail - An under the radar resurgence
Retailers have to navigate challenging market conditions with persisting
inflation, low consumer confidence and low retail sales volumes. But activity
levels across prime retail markets remained surprisingly resilient throughout
2024, with valuers reporting modest rental growth in some places. In recent
years most investors have passed the sector over, with many expecting the
adoption of online shopping to continue eating away at the need for physical
retail spaces. Some retailers have upsized, opened flagship stores, plus there
have been new international brands entering the UK in 2024. Retailer distress
is at historic lows, vacancy rates are broadly stable, and while a few big
names have tumbled - Ted Baker, The Body Shop, Carpetright and Homebase - 2024
has been relatively uneventful for closures, but WH Smith and Poundland now
have doubtful futures.
Values and pricing levels have been relatively stable on the high street as
there has been no real market evidence, but the out of town sector has been
more active. Retail investment volumes have slowed down with the February
figure below the five-year monthly average of £680m. The year-to-date total
of £620m is 40% below the corresponding 2024 figure. In one of February's
largest transactions, Tesco bought back its Newmarket store from Supermarket
Income REIT for £64m at a 5.5% yield.
However, over the twelve months to March 2025, retail was the best performing
sector on the MSCI UK Monthly Property Index with a total return of 11.4% v
8.5% for All Property driven by a high income return of 7.2% (All Property
5.9%) and capital growth (3.9% v 2.5%). This is despite retail rental value
growth at 1.8% underperforming All Property at 3.4%.
High Street and Shopping Centres: While retail sales volumes remain subdued, a
sustained focus on re-aligning retail footprints to match post-Covid shopping
habits has helped return confidence to the occupational market. High street
retail has been evolving where it is now more Leisure and Food & Beverage
focused. The top centres continue to attract significant interest from large
multi-national retailers and leading brands, whilst improving levels of
footfall are helping to attract new occupiers. According to MSCI, the vacancy
rate for institutionally held shopping centres, representing a broad range of
asset sizes and qualities, contracted during 2024 falling to 11.1% of
floorspace. For best-in-class locations void levels have continued to reduce.
The shopping centre market saw some recovery during 2024, with total volumes
exceeding £2bn as a result of over 40 deals, with the bulk being UK
institutions buying out partners in the larger regional centres. In Q1 2025,
several centres have been brought to the market as investors are attracted by
the high income returns. Investor demand for the high street, even in strong
south east locations, remains very limited with most transactions only taking
place at double figure yields.
Supermarkets: Supermarket performance during 2024 was driven by income return
with only modest capital growth. There continues to be a lack of quality stock
being brought to the market with strong institutional demand for the £20m to
£40m lot sizes let to Tesco and Sainsbury's and smaller stores let to Marks
& Spencer, Aldi and Lidl. Investor sentiment towards Asda and Morrisons
continues to be weak.
Aldi's sales grew by 5.6% year on year in the 12 weeks to 23 March, pushing
its market share to 11% for the first time, up from 10.7%. Lidl's sales grew
by 9.1% in the same period, pushing its market share to 7.8%, up from 7.4% a
year ago. Lidl attracted 385,000 additional shoppers last month, more than any
other grocer, and saw a double-digit rise in footfall.
M&S sales grew the fastest, with spend on groceries in its stores
increasing by 13.1%, and to a 3.7% market share before it suffered a serious
cyber attack in May 2025. Its online partner, Ocado, increased sales by 11.2%,
to take a 2% share of the market for the first time. Tesco grew sales by 5.4%,
taking its share to 27.9%, up from 27.3% last year. Sainsbury's sales were up
4.1% year on year, taking its share to 15.2%, up from 15.1%.
Asda's market share continued to drop from 13.6% to 12.5%. Executive chairman
Allan Leighton recently promised significant investment in prices and stores
to tempt shoppers back. Sainsbury's and Morrisons have both announced in store
café closures as part of cost cutting exercises.
Out of Town Retail: Inflationary pressures and a focus on value from
households have helped many operators within the out of town market. During
2024 the sector saw continued exposure to business failures which included
both Homebase and Carpetright (competitors such as The Range and Tapi absorbed
a significant amount of space).
Despite this, retail warehousing generated the highest total returns of all
property sectors during 2024, +12.2% due to strong capital value growth,
compared to supermarkets +6.9%, shopping centres +8.2% and shops +3.3%.
£1.3bn of retail warehouse transactions (33 deals) completed in Q4 2024
pushing yields down. Purchasers were mainly listed and private property
companies attracted by low vacancy rates and strong occupier demand. The
momentum for this sector has continued into 2025. According to MSCI, the
vacancy rate for institutionally held retail parks increased marginally during
2024 up to 4% from 3.7% at the end of 2023. The final quarter of 2024 saw over
£1.6bn transact, contributing over 50% of total annual investment volumes and
marking the largest single quarterly volume recorded in recent history.
British Land, Realty Income and Redevco were the major players during the
year, accounting for a significant proportion of activity, and reaffirming
appetite from institutional capital for the sector.
Alternatives - Defensive assets let on long leases to strong tenants at
realistic rents are outperforming
Assets outside the traditional office, retail, and industrial sectors now
account for 25% of the MSCI UK Quarterly Property Index, compared to 22% for
offices, 18% for retail, and 35% for industrial. Properties in the
'Alternatives' sector are often seen as defensive, featuring long,
index-linked leases and a diverse range of tenants, making them attractive in
uncertain market conditions.
The alternatives sector accounted for the largest share of Q4 2024 investment
volumes at 39%, but the 'cautious optimism' felt at the beginning of that
quarter has been tempered by the higher National Insurance contributions,
increases in the National Living Wage and rising business rates. The
Government's decision to freeze the standard rates multiplier to increase with
inflation and to cut hospitality and leisure rates relief from 75% to 40% will
see many business rates bills rise by 140% in April, or even higher.
Businesses are looking at ways to mitigate these costs, some will fail in the
short term, while others will likely reduce staff and increase costs to the
consumer as they try to keep their heads above the water. Investment appetite
has slowed in Q1 2025, and transaction volumes across all sectors are down.
(-37% in February 2025 v's February 2024).
High-quality, well-let assets, particularly those in the £1m-£3m lot size
range, are still attracting interest, particularly from private investors and
property companies, but buyers are increasingly selective and demanding higher
risk premiums. The focus is more than ever on covenant strength, affordability
of rents, income growth and future alternative use value.
Pubs and Restaurants: In December 2024, UK pubs and restaurants saw a welcome
sales boost, marking a strong finish to the year. This growth was driven by
festive celebrations and the resulting uptick in consumer spending, especially
in London. However, the hospitality sector continues to face considerable
challenges, with many closures, mainly of smaller pubs, attributed to rising
operational costs and more cautious consumer spending. In April, when rate
bills rise, restaurants will see their annual bills increase from an average
of £5,563 to £13,351, with pubs similarly affected. Independent and
privately-backed pubs and restaurants are struggling the most.
Well-managed operators with strong cash flows, such as Greene King,
Wetherspoons, Fullers, Youngs, and Shepherd Neame, are better positioned to
weather these cost pressures. However, even these industry leaders will face
increasingly narrow margins post- April. In its recent interim results,
Wetherspoons projected that rising labour costs and National Insurance
contributions would add around £60m to its annual costs. Shepherd Neame,
despite reporting a strong second half-year performance with operating profits
up by 7.4%, warned of a 'challenging market' and rising 'unwelcome' costs,
which it plans to address through a combination of price hikes and cost
efficiencies. Pubs let on long leases to strong tenants remain attractive to
investors, though yields have moved out and are under pressure for assets
where covenants look uncertain, and rents have grown too high too fast.
Bowling: As one of the most affordable family-friendly outings, bowling
continues to attract diverse income groups. The dominant market leaders,
Hollywood Bowl and Ten Entertainment (Tenpin) are still performing strongly.
These operators are focusing on value-for-money, multiple-concept experiences
and site refurbishments. The bowling sector presents an opportunity for
specialist investors to acquire long-let, index-linked leases at high yields,
with rents often below neighbouring retail warehouses or industrial
properties, but future alternative use value does now need to underpin
investment value to access the widest possible market.
Budget Hotels and Caravan Parks: Budget hotels, particularly Premier Inn
(Whitbread), have benefited from a cost-conscious consumer. Despite
operational challenges affecting profits, investor interest in long-let,
index-linked hotel investments rose significantly in 2024 with transaction
volumes in this sector double those of 2023, marking the highest level since
2019. While volumes slowed in Q4 2024, total returns for the 12 months to
March 2025 stood at +9.7%. Transactions in Q1 2025 have been limited and
yields have moved out slightly, particularly where unexpired terms have
shortened. Caravan Parks are also facing higher overheads, most notably in
staffing and employment costs. 2024 had lower than typical transaction volumes
with fewer active buyers and a lack of supply, with more operators choosing to
sit on their hands. The proposed change to Business and Agricultural Property
Relief has already focussed the minds of some operators looking towards
succession, which may affect supply over the next few years.
Garden Centres: Some garden centre operators, such as Dobbies, have struggled
with over-expansion, unseasonal weather, and excess stock. However,
well-financed operators like Blue Diamond, the UK's leading garden centre
group, are thriving and expanding through their own sale and leaseback
programmes. The sector is undergoing consolidation, with smaller or less
profitable centres being acquired by strong operators. Larger, profitable
garden centres with valuable sites and future alternative use potential
continue to attract investor interest.
Student Accommodation: Investment in student accommodation reached over
£3.8bn in 2024, an increase of 14% on the previous year, but Q4 2024 volumes
were down as yields rose and capital values came under pressure from rising
bond yields - there has been very little trade so far in 2025. Growth over the
past few years has been fuelled by the substantial deployment of capital into
a sector underpinned by robust student demand, long term income streams,
strong annual rental growth and limited supply, but there are occupancy
challenges. Some operators have increased rents above what students can
afford, increasing voids. There has also been a notable decrease in
international student numbers (applications for study visas were down 17% in
2024 v's 2023). Strategic partnerships between universities and developers are
a viable solution to address financial pressures and housing shortages, so
long as the planners play ball and university finances permit. When properties
let to notable universities on long index-linked leases do come to market,
there is stiff competition.
The economy
The British economy has suffered four severe shocks over the past ten years -
Brexit, COVID, the war in Ukraine and now Trump, so economic forecasting is
even more "art" than "science". Unquantifiable uncertainty abounds, and our
basic economic statistics, from average earnings to employment to wholesale
prices, have broken down as they have failed to cope with post-COVID changes
in working patterns and falling survey response rates. So the Treasury and the
Office of Budget Responsibility, like all forecasters, are flying almost blind
through thick fog.
Unlike most other Western economies, the UK is still trying to adjust to major
changes in our pattern of exports and imports with the European Union (with
half our overseas trade against less than 20% for the USA). And the UK's
legacy of high public debt post -COVID, with financially stretched public
services and a fast-growing interest bill on our short-dated Government
borrowings, meant that in her Spring Statement on 26 March, the Chancellor
looked to be walking a tightrope while wearing a straitjacket.
UK 10 year gilt yields have been highly volatile but shown little net change
over the past two years, rising from 4.5% to 4.6% over 2024 and to 4.7% at end
March 2025. International yield movements were the key driver. UK gilts traded
generally around 4% for much of 2024, but then rose to 4.6% after the UK
Autumn Budget and President Trump's re-election in November. They are now
getting some support from international investors' aversion to America.
Consumer price inflation is not going to fall back sustainably to the Bank of
England's official 2% target any time soon. The annual rate of increase of the
CPI dipped below 3% early in 2025 but may be back to 4% over the summer.
Water, energy and council tax bills rose sharply on 1 April, and employers
will pass on in prices what they can of the continuing increases in the
National Minimum Wage (9.8% in April 2024 and 6.7% in April 2025 for adults
and up to 21.2% and 16.3% for young workers) and the increases in employers'
national insurance contributions. The Chancellor had no real alternative to
raising employers' national insurance, being boxed in by commitments not to
raise other taxes; but lowering the starting point from £9,100 to £5,000
meant the cost burden fell most heavily on employers of large numbers of low
paid and part-time workers. As well as the likely loss of part-time job
opportunities for people on the edge of unemployment, the extra cost has
fallen heavily on consumer-facing retail, leisure and hospitality businesses
whose increased prices will show up quickly and clearly in the consumer price
indices.
Unemployment may rise slightly this year; after that it will depend on whether
the Spring Statement's benefit and welfare changes bring more people into work
as hoped.
More generally, consumer price inflation will stay above the official 2%
target if productivity and GDP per head grow around 1% a year over the next
four years, while average earnings and service sector inflation stay near
their present 5% annual growth rates. Even with the Government's oft-repeated
commitment to growth, 3% still looks a more realistic central forecast for
annual UK CPI growth than 2% over the next few years. And it may be even
higher in a world of tariffs and trade shocks. So the Monetary Policy
Committee of the Bank of England needs to tread carefully in cutting short
term interest rates from the current 4.25%.
The Chancellor's redefinition of public sector debt in the Autumn Budget has
enabled public sector net investment to rise to average 2.6% of GDP over the
next five years. Part of the increase in defence spending to 2.5% of GDP in
2027, and then to 3% when resources allow, will be achieved through capital
projects. But the severe cut to 0.3% of GDP in the overseas aid budget comes
from current spending.
Housing, after many years of policy neglect under all Governments, provided
the main bright spot in the OBR analysis of Britain's public finances and
growth prospects. The new Government's commitment to build 1.5 million homes
over the next 5 years is unrealistic, starting from a base of only 200,000 a
year. But the OBR, and many experts, do now believe the Government's policy
changes make 300,000 homes a year achievable by 2029-30. These include the
National Policy Planning Framework and a strengthened presumption in favour of
development, increased social housebuilding and improved productivity.
Mortgage rates are still adjusting to higher levels (from an average of 3.7%
to 4.7% in 2028 as lower fixed rates run off). High land prices are still the
main difference between housing costs in the UK and comparable countries, so
compulsory purchase of land for affordable housebuilding at existing use
values could make a real difference here.
Since 2021, house prices in England and Wales have increased by 1%, while
average earnings have risen 20 per cent. But, typical mortgage rates have
risen from 2% to 4%-5%. House prices are particularly unaffordable in London
and south east England, where real house prices, especially at the higher end
of the market are overvalued and have further to fall. But lower priced homes
in other regions are now more realistically valued, especially by comparison
with renting.
Raising Britain's poor relative rates of investment and particularly growth
will be a long, hard but not impossible slog. Most British businesses are in
reasonable financial health, household savings rates at 10% are relatively
high and the economy is still growing through all the headwinds. But
confidence is low. British pension funds and private investors have run their
holdings in productive UK assets - ranging from quoted shares to unlisted
direct property and wider infrastructure - right down over the past 25 years
so foreign buyers are snapping them up from the bargain basement. Boosting
British business and the London Stock Exchange by focussing ISA tax relief
just on UK investments could shake off the gloom and save British taxpayers'
cash by stopping subsidising our competitors' shares around the world. Tesla
needs no British tax breaks.
The outlook for the world economy had been improving at the end of 2024. But,
the International Monetary Fund have now cut their forecasts for GDP growth in
the USA to 1.8%, in 2025 and 1.7% in 2026, with growth in the Euro area and UK
around 1% in both years with China at 4% and India at 6%. These could still be
too high, especially if the USA tariff confrontation with China drags on.
Frequent, unexpected and erratic changes in public policy by the new US
Administration, from cuts in public spending and employment at home, to
stopping the US Aid programme across the world, are undermining investor,
business and consumer confidence in America. The almost complete reversal of
US support for Ukraine, its half-hearted (at best) commitment to NATO and open
hostility to the European Union, have already led the new German government to
raise the roof on defence spending and investment. Seen from London, the
Atlantic looks wider and the English Channel much narrower than at any time
since 2016 and the Euro will grow as a reserve currency.
President Trump may modify or draw back from some of his more extreme demands,
but investors in all markets would be wise to assume that the world is now a
more dangerous place for the next few years and stick to safe,
income-producing investments, avoiding over concentration on the USA. The
White House will also be actively hostile to action on climate change, both
directly at the inter-governmental level and indirectly by its hostility to
investors' growing efforts in recent years to make business prioritise the
environment.
Economic policymakers and investors alike have to manage as best they can in
these turbulent times with a consistent concentration on sustainable growth
and security. But upheavals always bring opportunities. Over the past 50 years
in Britain, the best long term investments have usually been made under dark
skies before the gloom starts to lift.
Annual portfolio summary
VIP specialises in direct investment in UK commercial properties with long,
strong, index-related income streams to deliver above average long term real
returns.
The portfolio comprises 30 properties across seven well diversified
sub-sectors, fully let on 32 full repairing and insuring leases (WAULT 13.3
years to the tenants' option to break) to 18 different tenant covenants across
England and Scotland, with 79% of rents coming from the top ten tenants.
Following the sale of the long leasehold Doncaster property on 24 April 2025,
post the year end, all properties are freehold.
Index-related rent reviews
The current rental income on the whole portfolio stands at £9.8 million per
annum. 100% has either index-linked or fixed increases.
Over the financial year, 9 rent reviews completed representing 29.3% of the
rent roll, with an average annual increase of 3.0% on their rents passing.
This added £0.1 million (1.2%) to all held properties. Six were RPI-linked
annual reviews, two had five yearly RPI-linked reviews and one had an annual
fixed increase of 2.0%. The two rent concessions at Brentwood and York also
ended in the year, increasing the rent passing from these two properties by
29.8%, which added a further £0.2 million to the portfolio's rental income.
There are 32 leases, which are reviewed with either RPI-linked (88%),
CPI-linked (9%) or fixed increases (3%). There are no longer any properties
with open market rent reviews.
Eight tenancies representing 29% (year ended 31 March 2025) of the rental
income have annual rent reviews and 24 (71%) have five yearly reviews. Over
the next five years, the following percentage of rental income will be
reviewed in each financial year, based on the portfolio as at 31 March 2025.
Year ending 31 March Annual 5 yearly Total
2026 29% 40% 69%
2027 29% 6% 35%
2028 29% 11% 40%
2029 29% 10% 39%
2030 29% 3% 32%
Over the next 12 months, 18 tenancies, representing 69% of the total rent,
will undergo a rent review.
Of the index-related rents within the portfolio; 68% of the RPI-linked and
CPI-linked rents are subject to collared uplifts, which average 1.6% per annum
and 89% are subject to capped uplifts, which average 3.8% per annum. 9% of the
total indexed income has uncapped RPI increases. Fixed rent review uplifts
average 2.3% per annum.
Purchases and sales
One purchase for £16.5 million and six sales for £12.4 million completed
over the year.
Purchases completed
Garden Centre - Bridgemere Garden Centre, near Nantwich (Cheshire). The
purchase of a long-let Garden Centre investment on a 36.5 acre site with
indexed income completed in August 2024 at a purchase price of £16.5 million
at a net initial yield of 6.6%, rising to an estimated 7.8% in December 2025.
It is let to Blue Diamond Limited on a full repairing and insuring lease
without break to 2049 (WAULT of 24 years) with five yearly rental increases in
line with the Retail Prices Index (RPI), capped at 4% p.a. and collared at 1%
p.a.
Sales completed
The sale of six properties completed during the year for £12.4 million, 5.0%
above valuation at an average net yield of 7.4%. These were four shorter let
industrial properties at Dundee (let to Screwfix), Staines and Thurrock (let
to Halfords) and the unindexed, leasehold Fareham (let to the Local
Authority), the shorter let library and convenience store at Risca (let to
Caerphilly Council and Tesco), and an overrented long let London pub, which
was sold to the tenant, Shepherd Neame.
Sales exchanged / completed since 31 March 2025
Contracts were exchanged in March 2025 for the sale of the leasehold bowling
alley in Doncaster at valuation and at a net sale yield of 8.4%, and the sale
completed on 24 April 2025.
The purchases and sales increased the portfolio's weighted average unexpired
lease term to break to 13.3 years from 11.6 years (March 2024).
The sales proceeds were used towards the purchase of the Bridgemere Garden
Centre and for partial repayment of a £15 million loan expiring in March
2026. £6 million of this loan was repaid on 31 January 2025 and £4 million
post the year end on 30 April 2025.
Rent collection
100% of all rents were collected during the year to 31 March 2025. The top ten
tenants have 22 leases: Marks & Spencer, Blue Diamond, Ten Entertainment
Group, Premier Inn, Sainsbury's, Park Resorts, HM Government, Virgin Active,
Co-operative Group and Hollywood Bowl.
One of the smaller tenants in part of the Bowling complex in Coventry, Pizza
Hut, entered into administration in January 2025. The company was bought out
of administration by DC London Pie Ltd, to whom the lease was assigned. The
unit is still trading as a Pizza Hut restaurant and all rents due have been
collected.
Fully let
The portfolio is fully let, with no voids (MSCI UK Monthly Property Index void
rate: 12.1%).
Responsible impact based ESG management
OLIM Property has always taken a cautious and responsible approach to managing
VIP's property portfolio, with environmental impact, social responsibility and
governance (ESG) taken fully into account in selecting high quality properties
and suitable tenants for acquisition, long term management and disposal.
Occupier relationships are crucial. We engage with our tenants to understand
and establish sustainable rental levels and grow future income streams,
working closely with them to address value add energy performance targets.
All VIP's properties are regularly reviewed, ESG improvements implemented at
appropriate asset management stages and properties, such as Fareham, sold
where performance may be negatively impacted by ESG factors.
Energy Performance Certificates (EPCs)
100% of the properties now have an EPC rating A-C (up from 64% in 2022). We
continue to work with our tenants to upgrade properties and improve EPC
ratings.
Top 10 properties by capital value
Property Tenant Sector % of portfolio by capital value
Nantwich Blue Diamond Garden Centre 12%
Dover Park Resorts Caravan Park 7%
Newport, Isle of Wight Marks and Spencer Supermarket 7%
Rayleigh Marks and Spencer Supermarket 6%
Garstang Sainsbury's Supermarket 6%
Coventry Tenpin, Pizza Hut & Starbucks Bowling 5%
Brentwood Virgin Active Health Club 5%
Aylesford Kier Industrial/Warehouse 4%
Alnwick Premier Inn Hotel 4%
Catterick Premier Inn Hotel 4%
Total 60%
Performance and independent revaluation
Savills' independent valuation at 31 March 2025 on all 30 properties totalled
£146,000,000, as detailed in Note 9 to the Financial Statements in the Annual
Report, reflecting a net initial yield of 6.3% after deducting notional
purchase costs (31 March 2024: 6.6%, 30 September 2024: 6.4%). The valuation
totals at 31 March 2024 were £138,100,000 and at 30 September 2024
(half-year) £146,150,000.
On a like for like basis, excluding purchases and sales, the portfolio's
capital value increased by 1.1% in the first half of the year and by 1.0% in
the second.
All sectors in the portfolio gained in value, over the year except the pubs,
the health club and caravan park which were unchanged. The properties held
within the industrial / warehouse sector gained in value by 2.5% over the 12
months to March 2025, the supermarket sector also increased by 4.1% over the
year. Each of the bowling and hotel sectors increased by 0.8%.
Spot annualised rental income at the year end rose to £9.8 million against
£9.7 million a year before, despite sales, due mainly to rent increases over
the year delivering rental growth of 3.2% on all held properties. There are no
empty properties.
The property portfolio has been further upgraded and its weighted average
unexpired lease term improved with the sale of six shorter let properties,
which completed for £12.4 million (four industrials, a library and
convenience store and an over-rented London pub) with the net sale proceeds
partly reinvested into the purchase of the long-let Garden Centre in Nantwich
for £16.5 million with an RPI-linked lease.
The property portfolio produced a total return of 4.8% over the past six
months and 9.0% over the past year to March, against 3.5% and 6.3% for the
MSCI UK Quarterly Property Index, the main benchmark for commercial property
performance. The portfolio's main drivers of out performance were an above
average income yield and on the capital front, no offices or high street
shops.
The returns on VIP's property portfolio have been above the MSCI averages by
between 1.8% and 3.0% a year over 1, 5, 10, 20 and 38 years. The real returns
were behind the Retail Prices Index over last year and three and five years
but well above it over longer periods, with a real total return of over 7.0% a
year over 38 years since the inception of OLIM's management.
Sarah Martin, Matthew Oakeshott and Louise Cleary
OLIM Property Limited
10 June 2025
Business Review
This Business Review is intended to provide an overview of the strategy and
business model of the Company, as well as the key measures used by the
Directors in overseeing its management. During the year to 31 March 2025, the
Company operated as an investment trust company that invested in accordance
with the investment objective and investment policy outlined in the Business
Review. The Company entered the UK REIT regime on 1 April 2025 following
Shareholders' approval of amendments to the Articles of Association at the
General Meeting of the Company held on 20 March 2025.
Value and Indexed Property Income Trust PLC's (VIP or the Company) Ordinary
Shares are listed on the Official List and traded on the Main Market of the
London Stock Exchange. The Company is registered as a public limited company
in Scotland under company number SC050366 and is an investment company within
the meaning of Section 833 of the Companies Act 2006. The Company has one
class of share. VIP is a member of the Association of Investment Companies
(AIC).
The Group
During the year under review, Value and Indexed Property Income Services
Limited (VIS), a wholly owned subsidiary of the Company, was authorised by the
Financial Conduct Authority (FCA) to act as the Company's Alternative
Investment Fund Manager (AIFM).
VIS delegated its portfolio management responsibilities to OLIM Property
Limited (OLIM Property), the Investment Manager responsible for managing the
property portfolio. With effect from 8 September 2024, the Company appointed
OLIM Property as its AIFM, in place of VIS, with no change to the portfolio
management or fee arrangements.
Capital structure
As at 31 March 2025, and as at the date of the Annual Report, VIP's issued
share capital comprised 45,549,975 Ordinary Shares of 10p each of which
3,536,939 Ordinary Shares of 10p were held in Treasury. Each Ordinary Share in
issue entitles the holder to one vote on a show of hands and, on a poll, to
one vote for every share held and, therefore, the total number of voting
rights in the Company as at the date of the Annual Report was 42,013,036.
Share dealing
Shares in VIP can be purchased and sold in the market through a stockbroker or
regulated investment platform, or indirectly through a lawyer, accountant or
other professional adviser. Further information on how to invest in VIP is
detailed in the Annual Report.
Recommendation of non-mainstream investment products
VIP currently conducts its affairs so that the shares issued by it can be
recommended by independent financial advisers to ordinary retail investors in
accordance with the rules of the FCA in relation to non-mainstream investment
products and intends to do so for the foreseeable future. VIP's shares are
excluded from the FCA's restrictions, which apply to non-mainstream investment
products, because they are shares in an investment trust company. The returns
to investors are based on investments in directly held property.
Summary of the year
• Net Asset Value total return* of 7.1% (2024: -9.7%) over one year and
-16.8% (2024: -10.2%) over three years.
• Share Price total return* of 15.0% (2024: -10.3%) over one year and -6.3%
(2024: -3.2%) over three years.
• MSCI UK Quarterly Property Index total return of 6.3% over one year (2024:
-1.1%) and -2.9% (2024: 1.2%) over three years.
• Dividends for the year up 4.5% - the 38th consecutive year of dividend
increases.
• Dividend yield at 31 March 2025 of 7.5% (2024: 7.7%).
Financial record
30 Sep 1986 31 Mar 1987 31 Mar 2016 31 Mar 2017 31 Mar 2018 31 Mar 2019 31 Mar 2020 31 Mar 2021 31 Mar 2022 Restated** 31 Mar 2023 31 Mar 31 Mar 2025
Restated** 2024
NAV (p) 44.0 55.1 319.0 345.5 330.5 332.5 253.1 271.1 310.9 244.4 213.5 214.7
Share price (p) 42.0 52.0 221.8 255.0 262.0 251.0 165.0 218.0 239.0 204.5 171.3 183.0
Discount of share price to NAV* (%) 4.6 5.6 30.5 26.2 20.7 24.5 34.8 19.6 23.1 16.3 19.8 14.8
Dividend per share (p) N/A 1.25 10.5 11.0 11.4 11.8 12.1 12.3 12.6 12.9 13.2 13.8
Total assets less current liabilities (£m) 17.4 24.8 185.5 207.3 200.4 205.6 176.2 177.6 195.0 157.0 143.1 139.2
* This is an Alternative Performance Measure (APM) which has been explained
in the Glossary in the Annual Report.
** The 2022 and 2023 Financial Statements were restated to correct an error in
the calculation of the operating lease asset brought
forward.
Investment objective and investment policy
Investment objective
The Company invests directly in UK commercial property to deliver long,
strong, index-related income. The Company aims to achieve long-term, real
growth in dividends and capital value without undue risk.
Investment policy
The Company's policy is to invest in directly held UK commercial property and
cash or near cash securities. UK directly held commercial property will
usually account for at least 80% of the total portfolio but it may fall below
that level if relative market levels and investment value, or a desired
increase in cash or near cash securities, make it appropriate. The Company
will not use derivatives.
The Company is permitted to invest cash held for working capital purposes
pending re-investment in cash deposits, gilts and money market funds.
The UK commercial property portfolio
The Company will target secure income and capital returns linked to inflation,
mainly through its diversified portfolio of UK property assets, let or pre-let
to a broad range of strong tenants on long leases with rental growth subject
to index-related or fixed increases. The Company has not set any geographical
limits, except that it may invest in all four nations of the United Kingdom.
It has also set no structural limits and expects the portfolio to be focused
on (but not limited to), the industrial/warehouse, supermarket, roadside and
leisure sectors (including for example, caravan parks, pubs, hotels, garden
and bowling centres) income strips and ground rents. Offices and high street
retail properties would not be priority sectors for investment. In order to
manage risk in the portfolio, at the time of purchase, no single property
asset will exceed in value 25% of the Company's gross asset value and no
single tenant (except UK Government and public sector) will account for more
than 30% of the Company's total rental income.
Borrowing policy
The Company has a longstanding policy of funding most of the increases in its
property portfolio through the judicious use of borrowings. Gearing will
normally be within a range of 25% and 50% of the total portfolio. The Company
will not raise new borrowings if total net borrowings would then represent
more than 50% of the total assets.
Detail of the Company's current borrowings, comprising two fixed term secured
loan facilities can be found in Notes 11 and 12 to the Financial Statements in
the Annual Report.
Performance, results and dividend
As at 31 March 2025, the Net Asset Value (NAV) total return over one year was
7.1% and the Share Price total return over one year was 15.0%. This compares
to the MSCI UK Quarterly Property Index total return of 6.3%. Total assets
less current liabilities were £139.2 million. A review of the performance of
the property portfolio is detailed in the Chairman's Statement and in the
Manager's Report in the Annual Report.
For the year to 31 March 2025, quarterly dividends of 3.4p per share were paid
as Ordinary Dividends on 25 October 2024, 31 January 2025 and 25 April 2025,
respectively. The Directors have declared a final dividend of 3.6p per
Ordinary Share (2024: 3.6p) which, if approved by Shareholders at the 2025
AGM, will be paid on, or around, 25 July 2025 to Shareholders on the register
on 27 June 2025. The ex-dividend date is 26 June 2025. This final dividend
will be paid as a Property Income Distribution (PID). This represents an
annual increase in dividends of 4.5% as compared with the 3.2% and 3.4% annual
increases in the Retail Prices and Consumer Prices (including Housing)
Indices, respectively, as at the end of March 2025.
Principal and emerging risks and uncertainties
The Board has an ongoing process for identifying, evaluating and monitoring
the principal and emerging risks and uncertainties facing the Group and the
Parent Company. The risk register forms a key part of the Group and the Parent
Company's risk management framework used to carry out a robust assessment of
the risks, including a significant focus on the controls in place to mitigate
them. The principal and emerging risks and uncertainties which affect the
Group's and the Company's business are:
Property risk
The Group's commercial property portfolio is subject to both market and
specific property risk. Since the UK commercial property market has been
markedly cyclical for many years, it is prudent to expect that to continue.
The price and availability of credit, real economic growth, and the
constraints on the development of new property, are the main influences on the
property investment market.
Against that background, the specific risks to the income from the portfolio
are tenants being unable to pay their rents and other charges or leaving their
properties at the end of their leases.
All investment properties held by the Group are commercial properties located
in the UK, mainly with long-term, index-related income streams.
All leases are on full repairing and insuring terms, with upward only rent
reviews, and the weighted average unexpired lease length to the break option
is 13.3 years. Details of the tenant and geographical spread of the portfolio
are set out in the Annual Report. The long-term performance record through the
varying property cycles since 1987 is set out in the Annual Report. OLIM
Property is responsible for property investment management, with surveyors,
solicitors and managing agents acting on the portfolio under OLIM Property's
supervision.
Market risk
The fair value of, or future cash flows from, a financial instrument held by
the Group may fluctuate because of changes in market prices. This market risk
comprises two elements - price risk and interest rate risk.
Price risk
Changes in market prices (other than those arising from interest rate or
currency risk) may affect the value of the Group's investments.
Interest rate risk
Interest rate movements may affect:
• the fair value of the investments in property;
• the level of income receivable on cash deposits; and
• the fair value of borrowings.
The possible effects on fair value and cash flows that could arise as a result
of changes in interest rates are taken into account when making investment and
borrowing decisions.
The Board imposes borrowing limits to ensure that gearing levels are
appropriate to market conditions and reviews these limits on a regular basis.
Current borrowings comprise two secured term loans, with one and eight year
terms remaining, providing secure long-term funding. It is the Board's policy
to maintain a gearing level, measured on the most stringent basis of
calculation after netting off cash equivalents, of between 25% and 50%.
Liquidity risk
This is the risk that the Group will encounter difficulty in meeting
obligations associated with its financial liabilities.
The Group's assets comprise investment properties which, by their nature, are
not readily realisable. The long maturity of the Company's mainly fixed rate
borrowings helps mitigate this risk and is detailed in the Annual Report and
in the interest rate risk profile section of Note 21 to the Financial
Statements in the Annual Report.
Political risk
Political changes that result in parties with extreme political or social
agendas having power or influence over policies could lead to instability and
uncertainty in the markets, legislation and the economy.
The Board reviews regularly the political situation, together with any
associated changes to the economic, regulatory and legislative environment, to
ensure that any risks arising are mitigated as effectively as possible.
An explanation of certain economic and financial risks and how they are
managed is contained in Note 21 to the Financial Statements.
Climate change and social responsibility risk
The Board recognises that climate change is an important risk that all
companies should take into consideration within their strategic planning. As
referred to elsewhere in the Strategic Report and in the Governance Report in
the Annual Report, the Company has little direct impact on environmental
issues. All of the Company's properties are let on full repairing and insuring
leases, with the tenants responsible for complying with statutory obligations.
The Board is aware that the Manager continues to take into account
environmental, social and governance (ESG) matters, and, in particular, Energy
Performance Certificates and flood risks, in managing the portfolio. In
accordance with the RICS Professional Standard 'Sustainability and ESG in
commercial property valuation and strategic advice', the Savills' valuation of
the Company's properties takes into consideration sustainability and ESG
factors.
Economic risk
The valuation of the Company's investments may be affected by underlying
economic conditions, such as fluctuating interest rates, rising inflation,
increased fuel and energy costs, and the availability of bank finance. These
factors can be impacted during times of geopolitical uncertainty and volatile
markets, including pandemics and the ongoing wars in Ukraine and the Middle
East. The Board monitors the economic and market environment closely, and
believes that the diverse, well-spread, long let indexed portfolio should
prove resilient.
Other key risks
Additional risks and uncertainties include:
• Discount volatility: The Company's shares may trade at a price
which represents a discount to its underlying net asset value.
• Regulatory risk: The Directors strive to maintain a good
understanding of the changing regulatory agenda and consider emerging issues
so that appropriate changes can be implemented and developed in good time. The
Group operates in a complex regulatory environment and, therefore, faces a
number of regulatory risks. A breach of Section 1158 of the Corporation Tax
Act 2010 would result in the Company being subject to capital gains tax on
portfolio investments. Breaches of other regulations, including but not
limited to, the Companies Act 2006, the FCA Listing Rules, the FCA Disclosure,
Guidance and Transparency Rules, the Market Abuse Regulation, the Packaged
Retail and Insurance-based Investment Products (PRIIPs) Regulation, the Second
Markets in Financial Instruments Directive (MiFID II) and the General Data
Protection Regulation (GDPR), could lead to a number of detrimental outcomes
and reputational damage. From 1 April 2025, in order to operate as a UK REIT,
the Company requires to comply with the legislation contained in Part 12 of
the Corporation Tax Act 2010.
The Company is also required to comply with tax legislation under
the Foreign Account Tax Compliance Act and the Common Reporting Standard. The
Company has appointed its registrar, Computershare, to act on its behalf to
report annually to HM Revenue & Customs (HMRC).
The Company's privacy policy is available to view on the Company's web pages
hosted by the Investment Manager at
www.olimproperty.co.uk/value-and-indexed-property-income-trust.html
(http://www.olimproperty.co.uk/value-and-indexed-property-income-trust.html)
.
Breaches of controls by service providers to the Company could also lead to
reputational damage or loss. The Audit and Management Engagement Committee
monitors compliance with regulations by reviewing internal control reports
from the Administrator and from the Investment Manager.
Alternative investment fund managers directive
The Alternative Investment Fund Managers Directive (AIFMD) introduced an
authorisation and supervisory regime for all managers of authorised investment
funds in the EU.
In accordance with the requirements of the AIFMD, the Company appointed VIS as
its Alternative Investment Fund Manager (AIFM) and BNP Paribas London Branch
as its Depositary. With effect from 8 September 2024, the Company appointed
OLIM Property as its AIFM, in place of VIS, with no change to the portfolio
management or fee arrangements. The Board has controls in place, in the form
of regular reporting from the AIFM and the Depositary, to ensure that both are
meeting their regulatory responsibilities in relation to the Company.
Key performance indicators
At each Board Meeting, the Directors consider a number of performance measures
to assess the Company's success in achieving its objectives, which also enable
Shareholders and prospective investors to gain an understanding of its
business.
A historical record of these performance measures, with comparatives, together
with the Alternative Performance Measures (APMs) are shown in the Summary of
the year and Financial record section of the Business Review. Definitions of
the APMs can be found in the Glossary in the Annual Report.
The Directors have identified the following as key performance indicators:
• Net asset value and share price total returns relative to the
MSCI UK Quarterly Property Index (total returns); and
• Dividend growth relative to consumer price inflation.
The NAV total return is considered to be an appropriate measure of Shareholder
value as it includes the current NAV per share and the sum of dividends paid
to date.
The medium term dividend policy is for increases at least in line with
inflation.
The Board reviews the Company's rental income and operational expenses on a
quarterly basis, as the Directors consider that both of these elements are
important components in the generation of Shareholder returns. Further
information can be found in Notes 2 and 4 to the Financial Statements.
In addition, the Directors will consider economic, regulatory, and political
trends and factors that may impact on the Company's future development and
performance.
Share buy-backs
651,514 Ordinary Shares were bought back in the year to 31 March 2025 (2024:
347,914 Ordinary Shares bought back). As at 31 March 2025, 3,536,939 Ordinary
Shares of 10p each were held in Treasury. As at the date of the Annual Report,
no further shares had been purchased since the year end. Further information
can be found in Note 14 to the Financial Statements.
At the forthcoming AGM, the Board will seek the necessary Shareholder
authority to continue to conduct share buy-backs.
Statement of compliance with investment policy
The Company is adhering to its stated investment policy and managing the risks
arising from it. This can be seen in various tables and charts throughout the
Annual Report, and from the information provided in the Chairman's Statement
and in the Manager's Report.
The Board's section 172 duty and stakeholder engagement
The Directors recognise the importance of an effective Board and its ability
to discuss, review and make decisions to promote the long-term success of the
Company and protect the interests of its key stakeholders. As required by
Provision 5 of The AIC Code of Corporate Governance (the AIC Code) and, in
line with The UK Corporate Governance Code (the Code), the Board has discussed
the Directors' duty under Section 172 of the Companies Act and how the
interests of key stakeholders have been considered in the Board discussions
and decision making during the year. This has been summarised in the table
below:
Form of Engagement Influence on Board decision making
Stakeholder: Shareholders
AGM - Shareholders are encouraged to attend the AGM and are provided with the Dividend declarations - The Board recognises the importance of dividends to
opportunity to ask questions and engage with the Directors and the Manager. Shareholders and takes this into consideration when making decisions to pay
Shareholders are also encouraged to exercise their right to vote on the quarterly and propose final dividends for each year. Further details regarding
resolutions proposed at the AGM (please refer to the further information on dividends for the year under review can be found in the Chairman's Statement.
the AGM in the Directors' Report in the Annual Report).
During the year, the Board recognised that the Company's deferred tax reserves
Shareholder documents - The Company reports formally to Shareholders by were being depleted, without which the Company would need to pay corporation
publishing Annual and Interim Reports, normally in June and November each tax on the income and capital gains on its property portfolio. As the Board is
year. conscious of the importance that Shareholders place on the Company's dividend
policy and, in line with that policy of reliably growing the dividend for
Shareholders, on 25 February 2025 the Company published a Circular to
Shareholders proposing that from 1 April 2025 the Company enter the UK REIT
Significant matters or reporting obligations are disseminated to Shareholders regime. At a General Meeting of the Company held on 20 March 2025,
by way of announcement to the London Stock Exchange. Shareholders approved a change to the Company's Articles of Association, which
enabled the Company to proceed to enter the UK REIT regime. As referred to in
the Chairman's Statement, the final dividend in respect of the year to 31
March 2025, and future dividends, will be paid as a Property Income
The Company Secretary acts as a key point of contact for the Board, and all Distribution (PID).
communications received from Shareholders are circulated to the Board.
Share buy-back policy - the Directors recognise the importance to Shareholders
Other Shareholder events include investor and wealth manager lunches and of the Company maintaining a share buy-back policy and considered this when
roadshows organised by the Company's Corporate Broker at which the Manager is establishing the current programme. Further details can be found in the
invited to present. Business Review and in the Directors' Report in the Annual Report.
The Directors recognise the importance to Shareholders of having a diverse
Board with a range of skilled and experienced individuals represented, and
took this into account when the decision was made during the year to appoint
Lorriane Reader as a Director, further strengthening the Board's overall
property expertise.
Stakeholder: Manager
Quarterly Board Meetings - The Manager attends every Board Meeting and The Directors and the Manager are cognisant of the Company's investment policy
presents a detailed portfolio analysis and reports on key issues, including and the strategy agreed by the Board, which the Manager has been tasked with
the performance of the property portfolio. implementing.
The Directors challenge the Manager where they feel it is appropriate. The Board engages constructively with the Manager to ensure investments are
consistent with the agreed strategy and investment policy and supported the
decision during the year to improve the portfolio by the sale of six
properties, including four shorter let industrial units, a short let
library/convenience store in Wales and an over-rented London pub, together
with the acquisition of the Bridgemere Garden Centre. Further details can be
found in the Manager's Report.
The Board also supported the Manager's proposal to repay during the year under
review £6 million of borrowings, with a further £4 million of borrowings
repaid post the year end, in respect of the loan due to expire in 2026.
Further details can be found the Highlights of the Year and REIT Conversion in
the Annual Report and in Notes 11 and 24 to the Financial Statements.
The Manager works closely with all tenants and, as a result, 100% of all
contracted rents due were collected in the year to 31 March 2025.
Stakeholder: Corporate Broker
The Corporate Broker attends Board Meetings regularly to present an update on Shareholder communication and feedback from the Broker directly influences the
the market and the Company's performance, in comparison with the performance Board's review of strategy, the asset allocation considerations, and the
of the Company's peers. Manager's guidance on desirable investment characteristics.
Since the REIT regime was introduced in 2007, almost all listed UK property
investment companies have adopted REIT status and feedback from the Broker
also influenced the Board's decision to propose to Shareholders that the
Company convert to a REIT.
Stakeholder: Depositary and Custodian
Regular statements and control reports received, with all holdings and The Directors review the performance of all third party service providers,
balances reconciled. including oversight of securing the Company's assets.
Stakeholder: Advisers & Registrar
The Company relies on the expert audit, accounting and legal advice received The Directors review the performance of all third party service providers and
from its Auditor, Administrator and Legal Advisers. The Directors ensure that recommend that Shareholders vote in favour of the re-appointment of RSM UK
all advisers and the Registrar are market leaders in the services they Audit LLP as Auditors to the Company at the 2025 AGM.
provide to the Company's Shareholders.
There were no other key decisions made in the year to 31 March 2025 that
require to be disclosed.
Employee, environmental and human rights policy
As an investment trust company, the Company has no direct employee or
environmental responsibilities, nor is it responsible for the emission of
greenhouse gases. Its principal responsibility to Shareholders is to ensure
that the investment portfolio is properly managed and invested. The Company
has no employees and, accordingly, has no requirement to report separately on
employment matters.
Management of the investment portfolio is undertaken by the Investment Manager
through members of its portfolio management team. In light of the nature of
the Company's business, there are no relevant human rights issues and,
therefore, the Company does not have a human rights policy.
Independent auditor
The Company's Independent Auditor is required to report if there are any
material inconsistencies between the content of the Strategic Report and the
Financial Statements. The Independent Auditor's Report can be found in the
Annual Report.
Future strategy
The Board and the Investment Manager intend to maintain the strategic policies
set out above for the year ending 31 March 2026 as it is believed that these
are in the best interests of Shareholders.
The Company's Viability Statement is included in the Directors' Report in the
Annual Report.
Approval
This Business Review, and the Strategic Report as a whole, was approved by the
Board of Directors and signed on its behalf by:
John Kay
Chairman
10 June 2025
Going concern
The Group and the Parent Company's business activities, together with the
factors likely to affect their future development and performance, are set out
in the Chairman's Statement and the Manager's Review, and in the Business
Review, and the financial position of the Group and of the Parent Company is
described in the Chairman's Statement within the Strategic Report in the
Annual Report. In addition, Note 21 to the Financial Statements includes: the
policies and processes for managing the financial risks; details of the
financial instruments; and the exposures to market risk (price risk and
interest rate risk), liquidity risk, credit risk and property risk. The
Directors believe that the Group and the Parent Company are well placed to
manage their business risks. As detailed in Note 11 to the Financial
Statements, as at 31 March 2025, the £9 million fixed rate loan is due to be
repaid, in the normal course of business, on or before 31 March 2026; £4
million of which was repaid post the year end as detailed in Note 24 to the
Financial Statements.
Following a detailed review, the Directors have a reasonable expectation that
the Group and the Parent Company have adequate financial resources to enable
them to continue in operational existence for the foreseeable future, being at
least 12 months from approval of the Financial Statements, and accordingly,
they have continued to adopt the going concern basis (as set out in Note 1(b)
to the Financial Statements) when preparing the Annual Report and Accounts.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Strategic Report and the
Directors' Report, the Directors' Remuneration Report, the Statement of
Corporate Governance, and the Financial Statements in accordance with UK
adopted international accounting standards and applicable laws and
regulations.
Company law requires the Directors to prepare Group and Company Financial
Statements for each financial year. Under that law, the Directors are required
to prepare the Group Financial Statements, and have elected to prepare the
Company Financial Statements, in accordance with UK adopted international
accounting standards.
The Group and Company Financial Statements are required by law and UK-adopted
International Accounting Standards to present fairly the financial position of
the Group and the Company and the financial performance of the Group and the
Company; the Companies Act 2006 provides in relation to such financial
statements that references in the relevant part of that Act to financial
statements giving a true and fair view are references to their achieving a
fair presentation.
Under company law, the Directors must not approve the Financial Statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss for the Group and
Company for that period.
In preparing these Financial Statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are reasonable and
prudent;
• state whether they have been prepared in accordance
with UK adopted international accounting standards, subject to any material
departures disclosed and explained in the Financial Statements; and
• prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Group and Company will continue
in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the Financial Statements
comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and, hence, for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring the Annual Report and Financial
Statements are made available on a website. Financial Statements are published
on the Company's web pages hosted by the Investment Manager in accordance with
legislation in the United Kingdom governing the preparation and dissemination
of financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Company's web pages is the
responsibility of the Directors. The Directors' responsibility also extends to
the ongoing integrity of the Financial Statements contained therein.
Directors' responsibility statement
Each Director confirms, to the best of his or her knowledge, that:
• the Financial Statements have been prepared in accordance with
the applicable set of accounting standards and give a true and fair view of
the assets, liabilities, financial position and profit or loss of the Group
and Company; and that
• the Annual Report includes a fair review of the development and
performance of the business and the financial position of the Group and
Company, together with a description of the principal risks and uncertainties
that they face.
The Directors confirm that the Annual Report and Financial Statements taken as
a whole is fair, balanced and understandable and provides the information
necessary for Shareholders to assess the Group's position and performance,
business model and strategy.
For and on behalf of the Board of
Value and Indexed Property Income Trust PLC
John Kay
Chairman
10 June 2025
Group Statement of Comprehensive Income
Year ended 31 March 2025 Year ended 31 March 2024
Note
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Income
Rental income 2 9,406 - 9,406 8,824 - 8,824
Other income 2 564 - 564 242 - 242
9,970 - 9,970 9,066 - 9,066
Gains and losses on investments
Realised (losses)/gains on held-at- fair-value investment properties 9 - 455 455 - (137) (137)
Unrealised (losses)/gains on held-at-fair-value investment properties 9 - 2,492 2,492 - (11,480) (11,480)
Total income 9,970 2,947 12,917 9,066 (11,617) (2,551)
Expenses
Investment management fees 3 (888) - (888) (863) - (863)
Other operating expenses 4 (962) - (962) (894) - (894)
Finance costs 5 (2,731) - (2,731) (2,142) - (2,142)
Total expenses (4,581) - (4,581) (3,899) - (3,899)
Profit/(loss) before taxation 5,389 2,947 8,336 5,167 (11,617) (6,450)
Taxation 6 (2,276) - (2,276) (1,251) - (1,251)
Profit/(loss) attributable to equity shareholders of parent company 3,113 6,060 3,916 (11,617) (7,701)
2,947
Earnings per Ordinary Share (pence)
7 7.35 6.95 14.30 9.14 (27.11) (17.97)
The total column of this statement represents the Statement of Comprehensive
Income of the Group, prepared in accordance with IFRS. The revenue return and
capital return columns are supplementary to this and are prepared under
guidance published by the Association of Investment Companies. All items in
the above statement derive from continuing operations.
The Group does not have any other comprehensive income and so the total
profit/(loss), as disclosed above, is the same as the Group's total
comprehensive income. All income is attributable to the equity holders of
Value and Indexed Property Income Trust PLC, the parent company. There are no
non-controlling interests.
The Board is proposing a final dividend of 3.6p per share, making total
dividends of 13.8p per Ordinary Share for the year to 31 March 2025 (2024:
13.2p per Ordinary Share) which, if approved by Shareholders, will be payable
on 25 July 2025 (see Note 8).
The Notes form part of these Financial Statements.
Company Statement of Comprehensive Income
Year ended 31 March 2025 Year ended 31 March 2024
Note
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Income
Rental income 2 9,406 - 9,406 8,824 - 8,824
Other income 2 564 - 564 242 - 242
9,970 - 9,970 9,066 - 9,066
Gains and losses on investments
Realised (losses)/gains on held-at- fair-value investment properties 9 - 455 455 - (137) (137)
Unrealised (losses)/gains on held-at-fair-value investment properties 9 - 2,492 2,492 - (11,480) (11,480)
Total income 9,970 2,947 12,917 9,066 (11,617) (2,551)
Expenses
Investment management fees 3 (888) - (888) (863) - (863)
Other operating expenses 4 (962) - (962) (894) - (894)
Finance costs 5 (2,731) - (2,731) (2,142) - (2,142)
Total expenses (4,581) - (4,581) (3,899) - (3,899)
Profit/(loss) before taxation 5,389 2,947 8,336 5,167 (11,617) (6,450)
Taxation 6 (2,276) - (2,276) (1,251) - (1,251)
Profit/(loss) attributable to equity shareholders of parent company 3,113 6,060 3,916 (11,617) (7,701)
2,947
Earnings per Ordinary Share (pence)
7 7.35 6.95 14.30 9.14 (27.11) (17.97)
The total column of this statement represents the Statement of Comprehensive
Income of the Company prepared in accordance with IFRS. The revenue return and
capital return columns are supplementary to this and are prepared under
guidance published by the Association of Investment Companies. All items in
the above statement derive from continuing operations.
The Company does not have any other comprehensive income and so the total
profit/(loss), as disclosed above, is the same as the Company's total
comprehensive income.
The Notes form part of these Financial Statements.
Group Statement of Financial Position
Note As at As at
31 March 2025 31 March 2024
£'000 £'000 £'000 £'000
Assets
Non current assets
Investment properties 9 140,344 135,112
Investments 9 - -
140,344 135,112
Deferred tax asset 6 - 2,228
Receivables 10 5,496 5,792
145,840 143,132
Current assets 4,459 2,695
Cash and cash equivalents
Receivables 10 924 687
5,383 3,382
Total assets 151,223 146,514
Current liabilities
Payables 11 (2,979) (3,428)
Corporation tax 11 (48) -
Borrowings 11 (8,961) -
(11,988) (3,428)
Total assets less current liabilities 139,235 143,086
Non-current liabilities
Payables 12 - (2,913)
Borrowings 12 (49,024) (49,073)
(49,024) (51,986)
Net assets 90,211 91,100
Equity attributable to equity shareholders
Called up share capital 14 4,555 4,555
Share premium 15 18,446 18,446
Retained earnings 16 67,210 68,099
Total equity 90,211 91,100
214.72
Net asset value per Ordinary Share (pence) 17 213.53
These Financial Statements were approved by the Board on 10 June 2025 and were
signed on its behalf by:
John Kay
Chairman
The Notes form part of these Financial Statements.
Company Statement of Financial Position
Note As at As at
31 March 2025 31 March 2024
£'000 £'000 £'000 £'000
Assets
Non current assets
Investment properties 9 140,344 135,112
Investments 9 200 200
140,544 135,312
Deferred tax asset 6 - 2,228
Receivables 10 5,496 5,792
146,040 143,332
Current assets 4,259 2,495
Cash and cash equivalents
Receivables 10 924 687
5,183 3,182
Total assets 151,223 146,514
Current liabilities
Payables 11 (2,979) (3,428)
Corporation tax 11 (48) -
Borrowings 11 (8,961) -
(11,988) (3,428)
Total assets less current liabilities 139,235 143,086
Non-current liabilities
Payables 12 - (2,913)
Borrowings 12 (49,024) (49,073)
(49,024) (51,986)
Net assets 90,211 91,100
Equity attributable to equity shareholders
Called up share capital 14 4,555 4,555
Share premium 15 18,446 18,446
Retained earnings 16 67,210 68,099
Total equity 90,211 91,100
214.72
Net asset value per Ordinary Share (pence) 17 213.53
These Financial Statements were approved by the Board on 10 June 2025 and were
signed on its behalf by:
John Kay
Chairman
The Notes form part of these Financial Statements.
Group Statement of Cashflows
Year ended Year ended
31 March 2025 31 March 2024
Note
£'000 £'000 £'000 £'000
Cash flows from operating activities
Rental income received 9,198 8,987
Interest and other income received 360 241
Operating expenses paid (1,758) (1,694)
Net cash inflow from operating activities 18 7,800 7,534
Cash flows from investing activities
Purchase of investment properties (17,512) (11,363)
Sale of investment properties 11,935 12,633
Net cash inflow/(outflow) from investing activities (5,577) 1,270
Cash flow from financing activities
Drawdown of loan 15,000 -
Loan repayment (6,000) -
Fees received 204 -
Interest paid on loans (2,697) (1,962)
Finance cost of leases (8) (80)
Payments of lease liabilities (9) (9)
Dividends paid 8 (5,775) (5,661)
Buyback of Ordinary Shares for Treasury 14 (1,174) (670)
Net cash outflow from financing activities (459) (8,382)
Net increase in cash and cash equivalents 1,764
422
Cash and cash equivalents at 1 April 2,695 2,273
Cash and cash equivalents at 31 March 4,459 2,695
The Notes form part of these Financial Statements.
Company Statement of Cashflows
Year ended Year ended
31 March 2025 31 March 2024
Note
£'000 £'000 £'000 £'000
Cash flows from operating activities
Rental income received 9,198 8,987
Interest and other income received 360 241
Operating expenses paid (1,758) (1,694)
Net cash inflow from operating activities 18 7,800 7,534
Cash flows from investing activities
Purchase of investment properties (17,512) (11,363)
Sale of investment properties 11,935 12,633
Net cash inflow/(outflow) from investing activities (5,577) 1,270
Cash flow from financing activities
Drawdown of loan 15,000 -
Loan repayment (6,000) -
Fees received 204 -
Interest paid on loans (2,697) (1,962)
Finance cost of leases (8) (80)
Payments of lease liabilities (9) (9)
Dividends paid 8 (5,775) (5,661)
Buyback of Ordinary Shares for Treasury 14 (1,174) (670)
Net cash outflow from financing activities (459) (8,382)
Net increase in cash and cash equivalents 1,764
422
Cash and cash equivalents at 1 April 2,495 2,073
Cash and cash equivalents at 31 March 4,259 2,495
The Notes form part of these Financial Statements.
Group and Company Statement of Changes in Equity
Year ended 31 March 2025
Note Share capital Share premium Retained earnings Total
£'000 £'000 £'000 £'000
Group
Net assets at 31 March 2024 4,555 18,446 68,099 91,100
Profit for the year - - 6,060 6,060
Dividends paid 8 - - (5,775) (5,775)
Buyback of Ordinary Shares for Treasury 14 - - (1,174) (1,174)
Net assets at 31 March 2025 4,555 18,446 67,210 90,211
Company
Net assets at 31 March 2024 4,555 18,446 68,099 91,100
Profit for the year - - 6,060 6,060
Dividends paid 8 - - (5,775) (5,775)
Buyback of Ordinary Shares for Treasury 14 - - (1,174) (1,174)
Net assets at 31 March 2025 4,555 18,446 67,210 90,211
Year ended 31 March 2024
Note Share capital Share premium Retained earnings Total
£'000 £'000 £'000 £'000
Group
Net assets at 31 March 2023 4,555 18,446 82,131 105,132
Loss for the year - - (7,701) (7,701)
Dividends paid 8 - - (5,661) (5,661)
Buyback of Ordinary Shares for Treasury 14 - - (670) (670)
Net assets at 31 March 2024 4,555 18,446 68,099 91,100
Company
Net assets at 31 March 2023 4,555 18,446 82,131 105,132
Loss for the year - - (7,701) (7,701)
Dividends paid 8 - - (5,661) (5,661)
Buyback of Ordinary Shares for Treasury 14 - - (670) (670)
Net assets at 31 March 2024 4,555 18,446 68,099 91,100
The Notes form part of these Financial Statements.
Notes to the Financial Statements
1. Accounting policies
The Financial Statements have been prepared in accordance with UK adopted
international accounting standards.
The presentational currency of the Group and Company, and functional currency
of the Company, is pounds sterling because that is the currency of the primary
economic environment in which the Group and Company operate. The Financial
Statements and the accompanying notes are presented in pounds sterling and
rounded to the nearest thousand pounds except where otherwise indicated.
(a) Basis of preparation
The Financial Statements have been prepared on a going concern basis as
disclosed in the Directors' Report in the Annual Report and on the historical
cost basis, except for the revaluation of investment properties and investment
in subsidiaries, which are valued at fair value through profit and loss, and
£50 million bank borrowings, which are initially measured at consideration
received less issue costs. The principal accounting policies adopted are set
out below. Where presentational guidance set out in the Statement of
Recommended Practice Financial Statements of Investment Trust Companies and
Venture Capital Trusts (the SORP) issued by the Association of Investment
Companies (AIC) in July 2022 is consistent with the requirements of IFRSs, the
Directors have sought to prepare the Financial Statements on a basis compliant
with the recommendations of the SORP, except for the allocation of finance
costs to revenue as explained in Note 1(f).
The Board has considered the requirements of IFRS 8, 'Operating Segments'. The
Board is charged with setting the Group's investment strategy. The Board has
delegated the day to day implementation of this strategy to the Investment
Manager but the Board retains responsibility to ensure that adequate resources
of the Group are directed in accordance with its decisions. The Board is of
the view that the Group is engaged in a single segment of business, being
investments in UK commercial properties. The view that the Group is engaged in
a single segment of business is based on the fact that one of the key
financial indicators received and reviewed by the Board is the total return
from the investment portfolio taken as a whole. A review of the investment
portfolio is included in the report from the Investment Manager in the Annual
Report.
(b) Going concern
The Group's business activities, together with the factors likely to affect
its future development and performance, are set out in the Strategic Report in
the Annual Report. The financial position of the Group as at 31 March 2025 is
shown in the Statement of Financial Position in the Annual Report.
The cash flows of the Group for the year ended 31 March 2025 are set out in
the Annual Report. The Group had fixed debt totalling £57,985,000 as at 31
March 2025, as set out in Notes 11 and 12 in the Annual Report. As detailed in
Note 11 to the Financial Statements in the Annual Report, as at 31 March 2025,
the £9 million fixed rate loan is due to be repaid, in the normal course of
business, on or before 31 March 2026; £4 million of which was repaid post the
year end as detailed in Note 24 to the Financial Statements.
Note 21 in the Annual Report sets out the Group's risk management policies and
procedures, including those covering market price risk, liquidity risk and
credit risk.
As at 31 March 2025, the Group's total assets less current liabilities
exceeded its total non current liabilities by a factor of 2.84.
The assets of the Group consist mainly of investment properties that are held
in accordance with the Group's investment policy, as set out in the Annual
Report. The Directors, who have reviewed carefully the Group's forecasts for
the coming year and having taken into account the liquidity of the Group's
investment portfolio and the Group's financial position in respect of cash
flows, borrowing facilities and investment commitments (of which there is none
of significance), are not aware of anything that may cast significant doubt
upon the Group's ability to continue as a going concern. Accordingly, the
Directors believe that it is appropriate to continue to adopt the going
concern basis in preparing the Financial Statements.
(c) Basis of consolidation
The consolidated Financial Statements incorporate the Financial Statements of
the Company and the entity controlled by the Company (its subsidiary). An
investor controls an investee when it is exposed, or has rights, to variable
returns from its involvement with the investee and has ability to affect those
returns through its power over the investee. The Company consolidates the
investee that it controls. All intra-group transactions, balances, income and
expenses are eliminated on consolidation. The investment in the subsidiary is
recognised at fair value in the Financial Statements of the Company. This is
considered to be the net asset value of the Shareholders' funds, as shown in
its Statement of Financial Position.
Value and Indexed Property Income Services Limited is a private limited
company incorporated in Scotland under company number SC467598. It is a wholly
owned subsidiary of the Company and was the Alternative Investment Fund
Manager (AIFM) of the Company for the year under review. From 8 September 2024
the Company appointed OLIM Property Limited as is AIFM.
(d) Presentation of Statement of Comprehensive Income
In order to reflect better the activities of an investment trust company and
in accordance with guidance issued by the AIC, supplementary information which
analyses the Statement of Comprehensive Income between items of a revenue and
capital nature has been presented alongside the Statement of Comprehensive
Income. In accordance with the Company's Articles, net realised capital
returns may be distributed by way of dividend.
Additionally, the net revenue is the measure that the Directors believe to be
appropriate in assessing the Company's compliance with certain requirements
set out in sections 1158-1160 of the Corporation Tax Act 2010.
(e) Income
Interest receivable from cash and short term deposits and interest payable is
accrued to the end of the period.
Rental receivable and lease incentives, where material, from investment
properties under operating leases are recognised in the Statement of
Comprehensive Income over the term of the lease on a straight line basis.
Other income is recognised on an accruals basis.
(f) Expenses and Finance Costs
All expenses and finance costs are accounted for on an accruals basis.
Expenses are presented as capital where a connection with the maintenance or
enhancement of the value of investments can be demonstrated. In this respect
and in accordance with the SORP, the investment management fees have been
allocated, 100% to revenue to reflect the Board's expectations of long term
investment returns.
It is normal practice and in accordance with the SORP for investment trust
companies to allocate finance costs to capital on the same basis as the
investment management fee allocation. However, as the Company has a
significant exposure to property, and property companies allocate finance
costs to revenue to match rental income, the Directors consider that, contrary
to the SORP, it is inappropriate to allocate finance costs to capital.
(g) Other receivables
Financial assets classified as loans and receivables are held to collect
contractual cash flows and give rise to cash flows representing solely
payments of principal and interest. As such they are measured at amortised
cost. Other receivables do not carry any interest, they have been assessed for
any expected credit losses over their lifetime due to their short-term nature.
(h) Other payables
Payables are non-interest bearing and are stated at their discounted cash
flow.
(i) Taxation
The Company's liability for current tax is calculated using tax rates that
have been enacted or substantially enacted by the date of the Statement of
Financial Position.
Deferred tax is recognised in respect of all temporary differences that have
originated but not reversed at the date of the Statement of Financial
Position, where transactions or events that result in an obligation to pay
more tax in the future or the right to pay less tax in the future have
occurred at the date of the Statement of Financial Position.
This is subject to deferred tax assets only being recognised if it is
considered more probable than not that there will be suitable profits from
which the future reversal of the temporary differences can be deducted.
Due to the Company's status as an investment trust company, and the intention
to continue to meet the conditions required to maintain approval for the
foreseeable future, the Company has not provided deferred tax on any capital
gains and losses arising on the revaluation or disposal of investments.
(j) Dividends payable
Interim dividends are recognised as a liability in the period in which they
are paid as no further approval is required in respect of such dividends.
Final dividends are recognised as a liability only after they have been
approved by Shareholders in general meeting.
(k) Investments
Equity investments
The Company accounts for its investment in its subsidiary at fair value. All
fair value adjustments in relation to the subsidiary are eliminated on
consolidation.
Investment property
Investment properties are initially recognised at cost, being the fair value
of consideration given, including transaction costs associated with the
investment property. Any subsequent capital expenditure incurred in improving
investment properties is capitalised in the period incurred and is included
within the book cost of the property.
After initial recognition, investment properties are measured at fair value.
Gains and losses arising from changes in fair value are included in net profit
or loss for the period as a capital item in the Statement of Comprehensive
Income and are ultimately recognised in the retained earnings.
As disclosed in Note 21, the Group leases out all of its properties on
operating leases. A property held under an operating lease is classified and
accounted for as an investment property where the Group holds it to earn
rental, capital appreciation or both. Any such property leased under an
operating lease is carried at fair value. Fair value is established by
half-yearly professional valuation on an open market basis by Savills,
Chartered Surveyors and Valuers, and in accordance with the RICS Valuation -
Global Standards January 2022 (the 'RICS Red Book'). The determination of fair
value by Savills is supported by market evidence, excluding prepaid or accrued
operating lease income arising from the spreading of lease incentives or
minimum lease payments because it has been recognised as a separate liability
or asset. The fair value of investment property held by a lessee as a
right-of-use asset reflects expected cash flows (including variable lease
payments that are expected to become payable). Accordingly, if a valuation
obtained for a property is net of all payments expected to be made, it will be
necessary to add back any recognised lease liability, to arrive at the
carrying amount of the investment property using the fair value model. These
valuations are disclosed in Note 9 in the Annual Report.
(l) Cash and cash equivalents
Cash and cash equivalents comprises of deposits held with banks and short term
investments.
(m) Non-current liabilities
All new loans and borrowings are initially measured at cost, being the fair
value of the consideration received, less issue costs where applicable.
Thereafter, all interest-bearing loans and borrowings are subsequently
measured at amortised cost. Amortised cost is calculated by taking into
account any discount or premium on settlement. The costs of arranging any
interest-bearing loans are capitalised and amortised over the life of the
loan. When the term of a loan is modified, the amortisation of costs is
adjusted in line and the loan measured at fair value on the balance sheet.
(n) Leases
Lessor: The Group leased properties that met the definition of investment
property. Leases for which the Group is a lessor are classified as finance or
operating leases. Whenever the terms of the lease transfer substantially all
the risks and rewards of ownership to the lessee, the contract is classified
as a finance lease. All other leases are classified as operating leases. All
properties are leased out under operating leases and rental income is
recognised on a straight-line basis over the expected term of the relevant
lease. Many leases have fixed or minimum rental uplifts and where lease
incentives or temporary rent reductions have been granted as a result of the
COVID pandemic, rental income is recognised on a straight-line basis over the
expected term of the lease.
Lessee: The Group assesses whether a contract is or contains a lease, at
inception of the contract. The Group recognises a right-of-use asset and a
corresponding lease liability with respect to all lease arrangements in which
it is the lessee. The right-of-use assets were presented as part of Investment
Properties in the Statement of Financial Position and held at fair value. The
lease liability related to the head rent on the property in Fareham, which was
sold in the year. The capital element of lease obligations was recorded as a
finance lease payable liability in the Statement of Financial Position on
inception of the arrangement. Lease payments were apportioned between capital
repayment and finance charge, using the effective interest rate method, to
produce a constant rate of charge on the balance of the capital repayments
outstanding.
(o) Critical accounting judgements and key estimates
The preparation of the Financial Statements requires the Directors to make
judgements, estimates and assumptions that may affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expenses. The critical accounting area involving a higher degree of
judgement or complexity comprises the determination of fair value of the
investment properties. The Group engages independent professional qualified
valuers to perform the valuation.
Information about the valuation techniques and inputs used in determining fair
value as at 31 March 2025 is disclosed in Note 9 to the Financial Statements
in the Annual Report.
(p) Adoption of new and revised Accounting Standards
New and revised standards and interpretations that became effective during the
year had no significant impact on the amounts reported in these Financial
Statements but may impact accounting for future transactions and arrangements.
At the date of authorisation of these Financial Statements, the following
Standards and interpretations, which have not been applied to these Financial
Statements, were in issue but were not yet effective.
Standards
IFRS S1 General Requirements for Disclosure of Sustainability-related
Financial Information (effective for periods beginning on or after 1 January
2024 but not yet endorsed for use in the UK).
IFRS S2 Climate-related Disclosures (effective for periods beginning on or
after 1 January 2024 but not yet endorsed for use in the UK).
Amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates'
(effective for periods beginning on or after 1 January 2025).
IFRS 18 'Presentation and Disclosure in Financial Statements' (effective for
periods beginning on or after 1 January 2027 but not yet endorsed for use in
the UK).
IFRS 19 'Subsidiaries without Public Accountability: Disclosures' (effective
for periods beginning on or after 1 January 2027 but not yet endorsed for use
in the UK).
The Directors have not yet evaluated these standards, therefore, the impact is
not yet known.
2. Income
Year ended Year ended
31 March 2025 31 March 2024
Group Company Group Company
£'000 £'000 £'000 £'000
Income
Rental income 9,406 9,406 8,824 8,824
Interest receivable on short term deposits 289 289 183 183
Other income 275 275 59 59
Total income 9,970 9,970 9,066 9,066
3. Investment management fee
Year ended 31 March 2025 Year ended 31 March 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Group and Company
Investment management fee 888 - 888 863 - 863
A summary of the terms of the investment management agreement is given in the
Directors' Report in the Annual Report.
OLIM Property Limited received an investment management fee of £888,000 (2024
- £863,000), the basis of calculation of which is detailed in the Directors'
Report in the Annual Report.
4. Other operating expenses
Year ended Year ended
31 March 2025 31 March 2024
Group Company Group Company
£'000 £'000 £'000 £'000
Fee payable to the Group's auditor for the audit of the Group's accounts 87 87 86 86
Directors' fees 125 125 109 109
NIC on Directors' fees 6 6 5 5
Fees for company secretarial services 292 292 270 270
Other expenses 452 452 424 424
962 962 894 894
Directors' fees comprise the Chairman's fees of £33,000 (2024 - £33,000),
the Chair of the Audit and Management Engagement Committee fees of £27,000
(2024 - £27,000) and fees of £24,500 (2024 - £24,500) per annum paid to
each other Director.
Additional information on Directors' fees is given in the Directors'
Remuneration Report in the Annual Report.
5. Finance costs
Year ended Year ended
31 March 2025 31 March 2024
Group Company Group Company
£'000 £'000 £'000 £'000
Interest payable on:
Bank loan interest payable 2,639 2,639 1,988 1,988
Effective interest 45 45 35 35
Amortisation of loan expenses 39 39 39 39
Finance costs attributable to lease liabilities 8 8 80 80
2,731 2,731 2,142 2,142
On 28 November 2019, the Company entered into a £22,000,000 fixed term
secured loan facility for a period of up to seven years to 30 November 2026.
On 3 March 2021, this facility was extended until 31 March 2031. During the
year ended 31 March 2023, the loan was increased to £35,000,000 and extended
for a further two years until 31 March 2033, costs previously incurred on the
loan were extinguished at this point.
On 5 July 2024, the Company extended the borrowing on the 2033 fixed term
secured loan facility from £35,000,000 to £50,000,000.
6. Taxation
Year ended 31 March 2025 Year ended 31 March 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
a) Analysis of the tax (charge)/credit for the year:
Group and Company
Current tax (48) - (48) - - -
Deferred tax (2,228) - (2,228) (1,251) - (1,251)
(2,276) - (2,276) (1,251) - (1,251)
Factors affecting the total tax (charge)/credit for year:
Profit/(loss) before taxation 8,336 (6,450)
Tax charge/(credit) thereon at 25% (2024 - 25%) 2,084 (1,613)
Effects of:
Losses/(gains) on investments not relievable (737) 2,904
Disallowable expenses 18 -
Finance costs (18) (40)
PY adjustment for deferred tax asset - losses b/fwd decreased 455 -
Deferred tax asset not recognized due to REIT conversion 474 -
2,276 1,251
b) Factors affecting future tax charges
Unutilised tax losses 1,896 8,913
Potential tax benefit at 25% 474 2,228
474 2,228
Recognised as a deferred tax non-current asset - 2,228
Not recognised as a deferred tax asset 474 -
- 2,228
The Company and Group have total accumulated unrelieved non-trade loan
relationship tax losses carried forward of £1,896,000 (2024 - £8,913,000) at
31 March 2025.
The Company and Group have not recognised deferred tax assets of £474,000 on
the basis that the Company has entered the UK REIT regime as of 1 April 2025
and will have limited taxable income to utilise these tax losses in the
future.
7. Return per Ordinary Share
Year ended Year ended
31 March 2025 31 March 2024
Group Company Group Company
£'000 £'000 £'000 £'000
The return per Ordinary Share is based on the following figures:
Revenue return 3,113 3,113 3,916 3,916
Capital return 2,947 2,947 (11,617) (11,617)
Weighted average number of Ordinary Shares in issue 42,379,933 42,379,933 42,855,131 42,855,131
Return per share - revenue 7.35p 7.35p 9.14p 9.14p
Return per share - capital 6.95p 6.95p (27.11p) (27.11p)
Total return per share 14.30p 14.30p (17.97p) (17.97p)
The Company holds no dilutive instruments. Diluted earnings per share are
equal to earnings per share.
8. Dividends
Year ended Year ended
31 March 2025 31 March 2024
£'000 £'000
Dividends on Ordinary Shares:
Third quarterly dividend of 3.20p per share (2023 - 3.20p) paid 26 April 2024 1,365 1,376
Final dividend of 3.60p per share (2023 - 3.60p) paid 26 July 2024 1,529 1,548
First quarterly dividend of 3.40p per share (2024 - 3.20p) paid 25 October 1,443 1,369
2024
Second quarterly dividend of 3.40p per share (2024 - 3.20p) paid 31 January 1,438 1,368
2025
Dividends paid in the period 5,775 5,661
The third interim dividend of 3.40p (2024 - 3.20p), paid on 25 April 2025, has
not been included as a liability in these financial statements.
The final dividend of 3.60p (2024 - 3.60p), being paid on 25 July 2025, has
not been included as a liability in these financial statements. The final
dividend will be paid as a property income distribution (PID).
Set out below is the total dividend paid and proposed in respect of the
financial year, which is the basis upon which the requirements of Sections
1158-1159 of the Corporation Tax Act 2010 are considered.
The current year's revenue available for distribution by way of dividend is
£3,113,000 (2024 - £3,916,000).
Year ended Year ended
31 March 2025 31 March 2024
£'000 £'000
First quarterly dividend of 3.40p per share (2024 - 3.20p) paid 25 October 1,443 1,396
2024
Second quarterly dividend of 3.40p per share (2024 - 3.20p) paid 31 January 1,438 1,368
2025
Third quarterly dividend of 3.40p per share (2024 - 3.20p) payable 25 April 1,430 1,365
2025
Final quarterly dividend of 3.60p per share (2024 - 3.60p) payable 25 July 1,512 1,529
2025
5,823 5,631
The final dividend is based on the issued share capital of 42,013,036 Ordinary
Shares as at 31 March 2025, excluding the Ordinary Shares held in Treasury.
9. Investments
Investment properties Total
£'000 £'000
Group
Cost at 31 March 2024 146,062 146,062
Fair value movement brought forward (10,950) (10,950)
Valuation at 31 March 2024 135,112 135,112
Purchases 17,504 17,504
Sales proceeds (12,305) (12,305)
Realised gains on sales 455 455
Fair value movement in year 2,492 2,492
Derecognition of right of use asset (2,914) (2,914)
Valuation at 31 March 2025 140,344 140,344
Investment properties Investment in subsidiary Total
£'000 £'000 £'000
Company
Cost at 31 March 2024 146,062 200 146,262
Fair value movement brought forward (10,950) - (10,950)
Valuation at 31 March 2024 135,112 200 135,312
Purchases 17,504 - 17,504
Sales proceeds (12,305) - (12,305)
Realised gains on sales 455 - 455
Fair value movement in year 2,492 - 2,492
Derecognition of right of use asset (2,914) - (2,914)
Valuation at 31 March 2025 140,344 200 140,544
The fair value valuation given by Savills excludes prepaid or accrued
operating lease income arising from the spreading of lease incentives or
minimum future uplifts and for adjustments to recognise finance lease
liabilities for one leasehold property, both in accordance with IFRS 16. The
valuation has, therefore, been decreased.
As at As at
31 March 2025 31 March 2024
£'000 £'000
Savills valuation 146,000 138,100
Operating lease assets (5,656) (5,911)
Finance lease liabilities - 2,923
Valuation of Investment Properties 140,344 135,112
Decrease in fair value (5,656) (2,988)
The fair value valuation given by Savills includes £2,500,000 relating to the
property at Bawtry Close, Doncaster where contracts have been exchanged and
the sale completed on 24 April 2025.
Transaction costs
During the year, expenses were incurred in acquiring and disposing of
investment properties classified as fair value through profit or loss. These
have been expensed through capital and are included within gains and losses on
investment properties in the Statement of Comprehensive Income. The total
costs were as follows:
Year ended Year ended
31 March 2025 31 March 2024
£'000 £'000
Purchases 184 154
Sales 134 179
318 333
The fair values of the investment properties were independently valued by
professional valuers from Savills, acting in the capacity of External Valuers
as defined in the RICS Red Book (but not for the avoidance of doubt as an
External Valuers of the portfolio as defined by the Alternative Investment
Fund Managers Regulations 2013). The valuations were prepared on the basis of
Fair Value as required by the IFRS (International Financial Reporting
Standards). In addition, the valuations have also been prepared in accordance
with RICS Valuation - Professional Standards VPS 3.5 Fair Value and VPS 4.1
Valuations for Inclusion in Financial Statements. The definition of Fair Value
is set out in IFRS 13 and is adopted by the International Accounting Standards
Board as follows:
"The price that would be received to sell an asset, or paid to transfer a
liability, in an orderly transaction between market participants at the
measurement date"
The RICS Red Book directs us to consider that Fair Value is consistent with
the concept of Market Value, the definition of which is set out in Valuation
Practice Statement 4 1.2 of the Red Book, as follows:
"The estimated amount for which an asset or liability should exchange on the
valuation date between a willing buyer and a willing seller in an arm's length
transaction after proper marketing and where the parties had each acted
knowledgeably, prudently and without compulsion."
The valuations have been arrived at predominantly by reference to market
evidence for comparable property (Level 3 of the Fair Value Hierarchy). As
part of Savills' standard process, the valuations were carried out by
specialist valuers, which were peer reviewed and reviewed again prior to the
valuation date. During the review process, the various characteristics of each
property were taken into consideration.
Passing rent range Fair value - Group Key unobservable Blended
Property portfolio £ £'000 input Inputs range yield
Supermarkets 87,000 - 640,000 42,150 Net Equivalent Yield 5.47% - 7.63% 6.50%
Industrial 75,000 - 486,680 33,250 Net Equivalent Yield 5.42% - 7.26% 6.25%
Bowling 224,575 - 623,222 19,700 Net Equivalent Yield 7.83% - 9.12% 8.50%
Health Club & Caravan Park 577,944 - 618,777 17,300 Net Equivalent Yield 5.43% - 8.18% 6.75%
Garden Centre 1,147,713 17,000 Net Equivalent Yield 7.73% -
Hotels 360,000 - 373,549 12,000 Net Equivalent Yield 5.81% - 6.30% 6.00%
Public Houses 120,000 - 127,562 4,600 Net Equivalent Yield 5.67% - 6.09% 6.00%
146,000
A 25 bps decrease in the equivalent yield applied would have increased the net
assets attributable to the Group and Company's Shareholders and the total gain
for the year by £5,550,000. A 25 bps increase in the equivalent yield applied
would have decreased the net assets attributable to the Group and Company's
Shareholders and the total gain for the year by £5,200,000. A 5% decrease in
the rental value applied would have decreased the net assets attributable to
the Group and Company's Shareholders and the total gain for the year by
£3,150,000. A 5% increase in the rental value applied would have increased
the net assets attributable to the Group and Company's Shareholders and the
total gain for the year by £3,100,000.
Investment in subsidiary
Country of incorporation Date of incorporation % Principal activity
ownership
Name
Value and Indexed Property Income Services Limited, having its registered UK 16 January 2014 100 AIFM (to 7 September 2024)
office c/o Maven Capital Partners UK LLP, Kintyre House, 205 West George
Street, Glasgow, G2 2LW.
Value and Indexed Property Income Services Limited was non-trading throughout
the year and post the year end, on 2 April 2025, the company was placed into
Members' Voluntary Liquidation.
10. Receivables
As at As at
31 March 2025 31 March 2024
Group Company Group Company
£'000 £'000 £'000 £'000
Amounts falling due within one year:
Operating lease asset 160 160 119 119
Other receivables 454 454 338 338
Prepayments and accrued income 21 21 57 57
Rents receivable 289 289 173 173
924 924 687 687
Amounts falling due after more than one year:
Operating lease asset 5,496 5,496 5,792 5,792
6,420 6,420 6,479 6,479
Many of the Company's leases provide for minimum and maximum increases of
rental at future rent reviews. Minimum increases have been averaged over the
life of the lease, generating an operating lease asset.
11. Current liabilities
As at As at
31 March 2025 31 March 2024
Group Company Group Company
£'000 £'000 £'000 £'000
Payables
Amounts due to OLIM Property Limited 69 69 65 65
Accruals and other creditors 2,673 2,673 2,966 2,966
Value Added Tax payable 237 237 387 387
Lease liability - - 10 10
Total payables 2,979 2,979 3,428 3,428
Corporation tax 48 48 - -
Bank loans held at amortised costs
Bank loan 9,000 9,000 - -
Balance of costs incurred (78) (78) - -
Add: Debit to income for the year 39 39 - -
Total bank borrowings 8,961 8,961 - -
11,988 11,988 3,428 3,428
The amount due to OLIM Property Limited comprises the monthly management fee
for March 2025, subsequently paid in April 2025.
The Company has a £15,000,000 fixed term secured loan facility for a period
of up to ten years to 31 March 2026 (2024 - £15,000,000). At 31 March 2025,
£9,000,000 (2024 - £11,893,750) was drawn down at a rate of 4.344% and £nil
(2024 - £3,106,250) was drawn down at a rate of 3.60%.
The terms of the loan facility contain financial covenants that require the
Company to ensure that:
- in respect of each 3 month period ending on 31 March
and 30 September (the Half Year dates), net rental income shall
be at least 200 per cent of interest costs;
- in respect of each 12 month period beginning
immediately after 31 March and 30 September, net rental income shall
be at least 200 per cent of interest costs; and
- at all times, the loan shall not exceed 60 per cent
of the value of the properties that have been charged.
12. Non-current liabilities
As at As at
31 March 2025 31 March 2024
Group Company Group Company
£'000 £'000 £'000 £'000
Non-current liabilities
Bank loans held at amortised cost
Bank loan 49,151 49,151 49,116 49,116
Borrowing costs (172) (172) - -
Effective interest 45 45 35 35
Balance of costs incurred - - (116) (116)
Add: Debit to income for the year - - 38 38
49,024 49,024 49,073 49,073
Total bank borrowings 49,024 49,024 49,073 49,073
Lease liability payable in more than one year
- within 2 - 5 years - - 42 42
- over 5 years - - 2,871 2,871
Total payables - - 2,913 2,913
49,024 49,024 51,986 51,986
On 28 November 2019, the Company entered into a £22,000,000 fixed term
secured loan facility for a period of up to seven years to 30 November 2026.
On 3 March 2021, this facility was extended until 31 March 2031. On 27 April
2022, the loan was increased to £30,000,000 and on 22 June 2022, the loan was
increased to £35,000,000 and extended for a further two years until 31 March
2033, costs previously incurred on the loan were extinguished at this point.
On 5 July 2024, the Company extended the borrowing to £50,000,000.
As at 31 March 2025, the loan is recorded on an amortising basis. 95% of the
loan is at a fixed rate and 5% at a floating rate of interest. At 31 March
2025, £50,000,000 was drawn down at a net effective interest rate of 4.61%.
The terms of the loan facility contain financial covenants that require the
Company to ensure that:
- the total debt ratio does not at any time exceed 50 per cent;
- projected interest cover is not less than 200 per cent at all
times; and
- the Loan to Value shall not exceed 55% of the value of the
properties that have been charged.
The fair values of the loans are disclosed in Note 21 and the Net Asset Value
per share, calculated with the borrowings at fair value, is disclosed in Note
17 in the Annual Report.
13. Deferred tax
Under IAS 12, provision must be made for any potential tax liability on
revaluation surpluses. As an investment trust, the Company does not incur
capital gains tax and no provision for deferred tax is therefore required in
this respect.
As disclosed in Note 6 in the Annual Report, a deferred tax asset has not been
recognised on the basis that the Company has entered the UK REIT regime as of
1 April 2025 and will have limited taxable income to utilise these tax losses
in the future.
14. Share capital
As at As at
31 March 2025 31 March 2024
£'000 £'000
Authorised:
5,600 5,600
56,000,000 Ordinary Shares of 10p each (2024 - 56,000,000)
Called up, issued and fully paid (excluding Treasury shares):
42,013,036 Ordinary Shares of 10p each (2024 - 42,664,550) 4,201 4,266
Treasury shares:
3,536,939 Ordinary Shares of 10p each (2024 - 2,885,425) 354 289
45,549,975 Ordinary Shares of 10p each 4,555 4,555
The ordinary share capital on the Statement of Financial Position relates to
the number of Ordinary Shares in issue and held in Treasury. Only when shares
are cancelled, either from Treasury or directly, is a transfer made to the
Capital Redemption Reserve.
During the year, the Company repurchased 651,514 Ordinary Shares at a cost of
£1,174,000 including expenses.
Subsequent to the year end, the Company repurchased no Ordinary Shares.
15. Share premium
As at As at
31 March 2025 31 March 2024
Group Company Group Company
£'000 £'000 £'000 £'000
Opening balance 18,446 18,446 18,446 18,446
16. Retained earnings
As at As at
31 March 2025 31 March 2024
Group Company Group Company
£'000 £'000 £'000 £'000
Opening balance at 31 March 2024 68,099 68,099 82,131 82,131
Profit/(loss) for the year 6,060 6,060 (7,701) (7,701)
Dividends paid (see Note 8) (5,775) (5,775) (5,661) (5,661)
Buyback of Ordinary Shares for Treasury (see Note 14) (1,174) (1,174) (670) (670)
Closing balance at 31 March 2025 67,210 67,210 68,099 68,099
The table below shows the movement in retained earnings analysed between
revenue and capital items.
Year ended 31 March 2025 Year ended 31 March 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Group
Opening balance (4,213) 72,312 68,099 (2,468) 84,599 82,131
Profit/(loss) for the year 3,113 2,947 6,060 3,916 (11,617) (7,701)
Dividends paid (see Note 8) (5,775) - (5,775) (5,661) - (5,661)
Buyback of Ordinary Shares for Treasury - (1,174) (1,174) - (670) (670)
(see Note 14)
Closing balance (6,875) 74,085 67,210 (4,213) 72,312 68,099
Company
Opening balance (5,300) 73,399 68,099 (3,555) 85,686 82,131
Profit/(loss) for the year 3,113 2,947 6,060 3,916 (11,617) (7,701)
Dividends paid (see Note 8) (5,775) - (5,775) (5,661) - (5,661)
Buyback of Ordinary Shares for Treasury - (1,174) (1,174) - (670) (670)
(see Note 14)
Closing balance (7,962) 75,172 67,210 (5,300) 73,399 68,099
Of the Company's Retained Earnings of £67,210,000 (2024 - £68,099,000),
£67,210,000 (2024 - £68,099,000) is considered to be distributable.
17. Net asset value per equity share
The net asset values per Ordinary Share are based on the Group's net assets
attributable of £90,211,000 (2024 - £91,100,000) and on the Company's net
assets attributable of £90,211,000 (2024 - £91,100,000) and on 42,013,036
(2024 - 42,664,550) Ordinary Shares in issue at the year end, excluding shares
held in Treasury.
The net asset value per Ordinary Share, based on the net assets of the Group
and the Company adjusted for borrowings at fair value (see Note 21) of
£97,181,000 (2024 - £92,070,000) is 231.31p (2024 - 215.8p).
As at As at
31 March 2025 31 March 2024
Group Company Group Company
£'000 £'000 £'000 £'000
Net assets at 31 March 2025 90,211 90,211 91,100 91,100
Fair value adjustments 6,970 6,970 970 970
Net assets with borrowings at fair value 97,181 97,181 92,070 92,070
Number of shares in issue 42,013,036 42,013,036 42,664,550 42,664,550
Net asset value per share 214.72p 214.72p 213.53p 213.53p
Net asset value per share with borrowings at fair value 231.31p 231.31p 215.80p 215.80p
18. Reconciliation of income from operations before tax to net cash inflow
from operating activities
Year ended Year ended
31 March 2025 31 March 2024
Group Company Group Company
£'000 £'000 £'000 £'000
Income from operations before tax 12,712 12,712 (2,551) (2,551)
Losses/(gains) on investment properties (2,947) (2,947) 11,617 11,617
Investment management fee (888) (888) (863) (863)
Other operating expenses (959) (959) (894) (894)
(Increase)/decrease in receivables 59 59 (322) (322)
Increase/(decrease) in other payables (177) (177) 547 547
Net cash from operating activities 7,800 7,800 7,534 7,534
19. Reconciliation of current and non-current liabilities arising from
financing activities
Year ended Year ended
31 March 2025 31 March 2024
Group Company Group Company
£'000 £'000 £'000 £'000
Cash movements
Payment of rental (for leasing) 17 17 89 89
Drawdown of loans (for financing) (15,000) (15,000) - -
Costs associated with drawdown of loan 172 172 - -
Repayment of loans 6,000 6,000 - -
Non-cash movements
Finance costs (for leasing) (8) (8) (159) (159)
Derecognition of lease on sale of property 2,914 2,914 - -
Effective interest (45) (45) (35) (35)
Amortisation of loan premium and expenses (39) (39) (38) (38)
Change in debt in the year (5,989) (5,989) (143) (143)
Opening debt at 31 March 2024 (51,996) (51,996) (51,853) (51,853)
Closing debt at 31 March 2025 (57,985) (57,985) (51,996) (51,996)
20. Relationship with the Investment Manager and Related Parties
Value and Indexed Property Income Services Limited is a wholly owned
subsidiary of Value and Indexed Property Income Trust PLC and all costs and
expenses are borne by Value and Indexed Property Income Trust PLC. Value and
Indexed Property Income Services Limited has not traded during the year.
With effect from 8 September 2024, the Company changed its Alternative
Investment Fund Manager (AIFM) from its wholly owned subsidiary, Value and
Indexed Property Income Services Limited, to OLIM Property Limited (OLIM
Property), the Company's current delegated Investment Manager. There was no
change to the portfolio management or fee arrangements.
Post the year end, on 2 April 2025, Value and Indexed Property Income Services
Limited was placed into Members' Voluntary Liquidation
Matthew Oakeshott is a director of OLIM Property Limited, which has an
agreement with the Company to provide investment management services, the
terms of which are outlined in Note 3.
21. Financial instruments and investment property risks
Risk management
The Group's and the Company's financial instruments and investment property
comprise property and other investments, cash balances, loans and payables and
receivables that arise directly from its operations; for example, in respect
of sales and purchases awaiting settlement or debtors for accrued income.
The Manager has dedicated investment management processes which ensures that
the Investment Policy set out in the Annual Report is achieved. The portfolio
is reviewed on a periodic basis by OLIM Property's Investment Committee.
Additionally, the Manager's Compliance Officer continually monitors the
Group's investment and borrowing powers.
The main risks that the Group faces from its financial instruments are:
(i) market risk (comprising price risk and interest rate risk)
(ii) liquidity risk
(iii) credit risk
The Board regularly reviews and agrees policies for managing each of these
risks. The Manager's policies for managing these risks are summarised below
and have been applied throughout the year.
(i) Market risk
The fair value of, or future cash flows from, a financial instrument held by
the Group may fluctuate because of changes in market prices. This market risk
comprises three elements - price risk, interest rate risk and currency risk.
Price risk
Price risk (i.e. changes in market prices other than those arising from
interest rate or currency risk) may affect the value of the Group's
investments.
All investment properties held by the Group are commercial properties located
in the UK with long, strong income streams.
Price risk sensitivity
If market prices at the date of the Statement of Financial Position had been
10% higher or lower, while all other variables remained constant, the return
attributable to ordinary shareholders for the year ended 31 March 2025 would
have increased/decreased by £14,034,000 (2024 - increase/decrease of
£13,511,000) and equity reserves would have increased/decreased by the same
amount.
Interest rate risk
Interest rate movements may affect:
- the fair value of the investments in property; and
- the level of income receivable on cash deposits.
The possible effects on fair value and cash flows that could arise as a result
of changes in interest rates are taken into account when making investment and
borrowing decisions.
The Board imposes borrowing limits to ensure gearing levels are appropriate to
market conditions and reviews these on a regular basis. Borrowings comprise
five and ten year bank loans, providing secure long term funding. It is the
Board's policy to maintain a gearing level, measured on the most stringent
basis of calculation after netting off cash equivalents, of between 25% and
50%.
Details of borrowings at 31 March 2025 are shown in Notes 11 and 12 in the
Annual Report.
Interest risk profile
The interest rate risk profile of the portfolio of financial assets and
liabilities at the statement of financial position date was as follows:
Weighted average period for which rate is fixed Weighted average interest rate % Fixed rate Floating rate
Years £'000 £'000
At 31 March 2025
Assets
Sterling - 3.76 - 4,459
Total assets - 3.76 - 4,459
At 31 March 2025
Liabilities
Sterling 6.94 4.51 55,777 2,207
Total liabilities 6.94 4.51 55,777 2,207
At 31 March 2024
Assets
Sterling - 3.79 - 2,695
Total assets - 3.79 - 2,695
At 31 March 2024
Liabilities
Sterling 6.90 3.92 47,365 1,708
Total liabilities 6.90 3.92 47,365 1,708
The weighted average interest rate on borrowings is based on the interest rate
payable, weighted by the total value of the loans. The maturity dates of the
Group's loans are shown in Notes 11 and 12 in the Annual Report.
The floating rate assets consist of cash deposits on call, earning interest at
prevailing market rates. The Group's property portfolio and short term
receivables and payables are non interest bearing and have been excluded from
the above tables. All financial liabilities are measured at amortised cost.
Interest rate sensitivity
The sensitivity analyses below have been determined based on the exposure to
interest rates at the statement of financial position date and the stipulated
change taking place at the beginning of the financial year and held constant
throughout the reporting period in the case of instruments that have floating
rates.
If interest rates had been 100 basis points higher or lower and all other
variables were held constant, the Group's:
- profit for the year ended 31 March 2025 would increase/decrease by
£24,000 (2024 - increase/ decrease by £18,000). This is mainly
attributable to the Group's exposure to interest rates on its floating rate
cash balances.
- the Group holds no financial instruments that will
have an equity reserve impact.
In the opinion of the Directors, the above sensitivity analyses are not
representative of the year as a whole, since the level of exposure changes
frequently as part of the interest rate risk management process used to meet
the Group's objectives.
Currency sensitivity
There is no sensitivity analysis included as the Group has no outstanding
foreign currency denominated monetary items. Where the Group's equity
investments (which are non-monetary items) are affected, they have been
included within the other price risk sensitivity analysis so as to show the
overall level of exposure.
(ii) Liquidity risk
This is the risk that the Group will encounter difficulty in meeting
obligations associated with its financial liabilities.
The Group's assets are cash or near cash securities and investment properties
which, by their nature, are less readily realisable. The maturity of the
Group's mainly fixed rate borrowings is set out in the interest risk profile
section of this Note.
Carrying value Expected cashflows Due within 3 months Due between Due after 1 year
£'000 £'000 £'000 3 months and £'000
1 year
£'000
At 31 March 2025
Borrowings 57,985 78,229 670 11,075 66,484
Leases - - - - -
Other payables 2,742 2,742 2,742 - -
Total 60,727 80,971 3,412 11,075 66,484
At 31 March 2024
Borrowings 49,073 63,666 493 1,478 61,695
Leases 2,923 7,286 22 67 7,197
Other payables 3,031 3,031 3,031 - -
Total 55,027 73,983 3,546 1,545 68,982
(iii) Credit risk
This is the failure of a counterparty to a transaction to discharge its
obligations under that transaction that could result in the Group suffering a
loss. Cash is held only with reputable banks with high quality external credit
rating, which are monitored on a regular basis.
Credit risk exposure
In summary, compared to the amounts on the Group Statement of Financial
Position, the maximum exposure to credit risk during the year to 31 March was
as follows:
Year ended Year ended
31 March 2025 31 March 2024
Statement of Maximum exposure Statement of Financial Position Maximum exposure
Financial Position £'000 £'000 £'000
£'000
Current assets
Cash and cash equivalents 4,459 4,459 2,695 2,695
Other receivables 924 924 687 687
5,383 5,383 3,382 3,382
(iv) Property risk
The Group's commercial property portfolio is subject to both market and
specific property risk. Since the UK commercial property market has been
markedly cyclical for many years, it is prudent to expect that to continue.
The price and availability of credit, real economic growth and the constraints
on the development of new property are the main influences on the property
investment market.
Against that background, the specific risks to the income from the portfolio
are tenants being unable to pay their rents and other charges, or leaving
their properties at the end of their leases.
All leases are on full repairing and insuring terms, with upward only rent
reviews and the average unexpired lease length to the break option is 13.3
years (2024 - 11.6 years).
Details of the tenant and geographical spread of the portfolio are set out in
the Annual Report. The long term record of performance through the varying
property cycles since 1987 is set out in the Annual Report. OLIM Property is
responsible for property investment management, with surveyors, solicitors and
managing agents acting on the portfolio under OLIM Property's supervision.
The Group leases out its investment property to its tenants under operating
leases. At 31 March 2025, the future minimum lease receipts under
non-cancellable leases are as follows:
As at As at
31 March 2025 31 March 2024
£'000 £'000
Due within 1 year 10,345 10,383
Due between 2 and 5 years 40,704 39,073
Due after more than 5 years 91,073 75,930
142,122 125,386
This amount comprises the total contracted rent receivable as at 31 March
2025.
None of the Group's financial assets is past due or impaired.
Fair values of financial assets and financial liabilities
All assets and liabilities of the Group other than receivables and payables
and the borrowings are included in the Statement of Financial Position at fair
value.
(i) Fair value hierarchy disclosures
Investment properties and investment subsidiaries are held in the Statement of
Financial Position at fair value.
The table below sets out fair value measurements using the IFRS 13 Fair Value
hierarchy:
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
At 31 March 2025
Investment properties - - 140,344 140,344
- - 140,344 140,344
At 31 March 2024
Investment properties - - 135,112 135,112
- - 135,112 135,112
Company and Group numbers per the above fair value disclosures are the same
except for the investment of £200,000 made by the Company in its subsidiary,
which was the subject of an inter-group transfer in 2014. This investment
falls under Level 3.
Fair value categorisation within the hierarchy has been determined on the
basis of the degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value measurement in
its entirety as follows:-
Level 1 - inputs are unadjusted quoted prices in an active market for
identical assets
Level 2 - inputs, not being quoted prices, are observable, either directly
(i.e. as prices) or indirectly (i.e. derived from
prices)
Level 3 - inputs are not observable
There were no transfers between Levels during the year.
(ii) Borrowings
The fair value of borrowings has been calculated at £51,015,000 as at 31
March 2025 (2024 - £48,103,000) compared to a Statement of Financial Position
value in the Financial Statements of £57,985,000 (2024 - £49,073,000) per
Notes 11 and 12 in the Annual Report.
The fair values of the loans are determined by a discounted cash flow
calculation based on the appropriate inter-bank rate plus the margin per the
loan agreement. These instruments are therefore considered to be Level 2 as
defined above. There were no transfers between Levels during the year.
All other assets and liabilities of the Group are included in the Statement of
Financial Position at fair value.
(iii) Financial instruments by category
Financial assets
Fair value through profit Amortised cost
or loss
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Cash and cash equivalents - - 4,459 2,695
Other receivables - - 6,420 6,479
Total financial assets - - 10,879 9,174
Financial liabilities
Fair value through profit Amortised cost
or loss
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Other payables - - (2,790) (5,954)
Loans and other borrowings - - (57,985) (49,073)
Total financial liabilities - - (60,775) (55,027)
22. Capital management policies and procedures
The Group's capital management objectives are:
• to ensure that the Group will be able to continue as a going
concern; and
• to maximise the return to its equity shareholders in the form of
long term real growth in dividends and capital value without undue risk.
The capital of the Group consists of equity, comprising issued capital,
reserves, borrowings and retained earnings.
The Board monitors and reviews the broad structure of the Group's capital.
This review includes:
• the planned level of gearing which takes into account the
Manager's view of the market and the extent to which revenue in excess of that
which requires to be distributed should be retained.
The Group's objectives, policies and processes for managing capital are
unchanged from the preceding accounting period.
Details of the Group's gearing and financial covenants are disclosed in Notes
11 and 12 in the Annual Report.
23. Commitments
The Board is recommending the payment of a final dividend, to be paid as a
Property Income Distribution (PID), of 3.6p per Ordinary Share (2024: 3.6p)
and, subject to receiving Shareholder approval at the 2025 AGM, it will be
paid on 25 July 2025 to all Shareholders on the register 27 June 2025.
There are no significant subsequent events for the Group or the Company though
purchases and sales of property in the normal course of business which
completed after the year end are disclosed in Note 9 and Note 24 in the Annual
Report.
24. Post balance sheet events
At a General Meeting of the Company held on 20 March 2025, Shareholders
approved the resolution to amend the Articles of Association of the Company,
which allowed the Company to enter the UK REIT regime from 1 April 2025.
On 30 April 2025, a payment of £4 million was made towards the balance of the
£9 million loan held at amortised cost as detailed in Note 11 in the Annual
Report.
The Doncaster property was sold on 24 April 2025 at the 31 March 2025
valuation of £2.5 million.
Additional Information
In accordance with section 435 of the Companies Act 2006, the Directors advise
that the financial information set out in this announcement does not
constitute the Group's statutory Financial Statements for the period ended 31
March 2025 but is derived from these Financial Statements. The statutory
Financial Statements for the year ended 31 March 2024 have been delivered to
the Registrar of Companies and contained an audit report which was unqualified
and did not constitute statements under S498(2) or S498(3) of the Companies
Act 2006.
The Financial Statements for the period ended 31 March 2025 have been prepared
in accordance with UK adopted international accounting standards. The
Financial Statements for the period ended 31 March 2025 will be forwarded to
the Registrar of Companies following the Company's Annual General Meeting. The
Auditors have reported on these Financial Statements; their reports were
unqualified and did not contain statements under Section 498(2) or (3) of the
Companies Act 2006.
The Group and Company Statement of Financial Position at 31 March 2025 and the
Group and Company Statement of Comprehensive Income, Statement of Changes in
Equity and Statement of Cash Flows for the year then ended have been extracted
from the Group's Financial Statements. Those Financial Statements have not yet
been delivered to the Registrar.
The 2025 Annual Report and Financial Statements will be posted to Shareholders
shortly and will contain the Notice of the Annual General Meeting of the
Company to be held on Thursday, 10 July 2025 at 12.30pm at the offices of
Shepherd & Wedderburn LLP, 4th floor, 1-6 Lombard Street, London EC3V 9AA.
For Value and Indexed Property Income Trust PLC
Maven Capital Partners UK LLP
Company Secretary
10 June 2025
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