REG - Wynnstay Properties - Final Results and notice of AGM
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RNS Number : 0565N Wynnstay Properties PLC 17 June 2025
The information communicated within this announcement is deemed to constitute
inside information for the purposes of the Market Abuse Regulation (EU) No.
596/2014 as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018. Upon the publication of this announcement, this
information is considered to be in the public domain.
WYNNSTAY PROPERTIES PLC
("Wynnstay" or the "Company")
AUDITED RESULTS FOR YEAR ENDED 25 MARCH 2025 AND NOTICE OF AGM
17 June 2025
Wynnstay Properties PLC is pleased to announce the publication of its audited
results for the year ended 25 March 2025.
The Annual Report and Financial Statements is available on the Company's
website www.wynnstayproperties.co.uk (http://www.wynnstayproperties.co.uk)
and will shortly be posted to those shareholders who have elected to receive
documents by post, when a further announcement will be made.
This announcement contains three sections from the Annual Report and Financial
Statements: Introduction to Wynnstay, Chairman's Statement and Managing
Director's Review. It also contains the four Financial Statements contained in
the Annual Report and Financial Statements together with the notes to those
statements.
As stated in the note at the end of this announcement, the financial
information set out in the announcement does not constitute statutory accounts
as defined in section 435 of the Companies Act 2006.
The Company's Annual General Meeting ("AGM") will be held on Wednesday 16 July
2025. Details of the arrangements for the meeting are set out in the notice of
meeting in the Annual Report and Financial Statements.
This announcement was approved by the Board on 16 June 2025.
For further information please contact:
Wynnstay Properties plc
Philip Collins (Chairman)
07469 042389
Zeus (Nominated Adviser and Broker)
Mike Coe, Darshan Patel, Oscar Stack
020 3829 5000
LEI number is 2138006MASI24JYW5076.
For more information on Wynnstay visit: www.wynnstayproperties.co.uk
WYNNSTAY PROPERTIES PLC
INTRODUCTION TO WYNNSTAY
A distinctive approach to commercial property investment primarily for private
investors
Wynnstay is an AIM quoted property investment and development business. Its
principal shareholders are private investors wishing to invest in a portfolio
of quality secondary commercial properties for medium to long-term capital and
income growth. The portfolio is currently focused on industrial, including
trade counter, units.
Strategy
Wynnstay aims to achieve capital appreciation and generate rising dividend
income for shareholders from a diversified and resilient commercial property
portfolio in Central and Southern England, with diversity and resilience being
reflected in the location, number and nature of the properties, and the mix of
lease terms, tenants and uses.
For location, the focus is on areas where there is strong occupational demand
and often limited supply. Modest rents generally provide opportunity for
further rental growth over time as rent reviews and new lettings are concluded
and high levels of occupancy can be maintained. While many tenants have been
in occupation for a considerable time, voids can be managed and re-lettings
achieved successfully. The relatively small lot sizes of our assets also
appeal, when marketed for sale, to a wide range of investors.
The majority of properties are multi-let, resulting in a number of individual
tenancies in most locations, reducing exposure to any single tenant and risk
of loss of rental income in the case of defaults and voids.
Leases are mainly for terms of five years or more with upward-only rent
reviews based on market rates. Short-term agreements of two years or less
are typically avoided. Flexibility in addressing tenant needs and requirements
generally mean that the terms agreed result in a mutually beneficial outcome
for both parties.
Tenants comprise a broad spread of occupiers and types of business, also
reducing risk exposure, and include both well-known national trading chains as
well as regional and local businesses. Uses include manufacturing and
services; storage and distribution; and trade counter and out-of-town retail.
Active direct management and close engagement and constructive business
relationships with tenants, together with refurbishment and selective
development over time, underpin capital value and increase income.
Managed for shareholders
The portfolio is directly, rather than externally, managed. Finance is partly
outsourced to an external provider to meet specific needs with day-to-day
accounting undertaken in-house. All report to the Board, the majority of whom
are Non-Executive Directors.
Management remuneration comprises salary and, where appropriate, a cash bonus.
Wynnstay does not offer incentive schemes, such as share plans, share options
or share bonuses.
As a result, both management and the Board are focused on Wynnstay's
performance for the benefit of shareholders, operational costs are closely
controlled, and dilution of shareholders' investment and potential conflicts
of interest are minimised.
Incremental growth
The portfolio has been built incrementally, with opportunities being taken to
dispose of assets as and when the time is appropriate and to reinvest in
assets that offer better long-term return, enhance the quality of the
portfolio and broaden its geographic spread.
This is achieved gradually over time, without the need for deal-driven
activity in pursuit of corporate or portfolio expansion.
Funding
Wynnstay adopts a prudent, pragmatic approach to funding. Investments are
funded in part by retained profits and recycling capital receipts from
disposals and in part from borrowings, the majority at a fixed rate and held
at a modest loan-to-value level, from an experienced and supportive property
lender. This provides security at times of uncertainty in debt markets.
Valuation
The portfolio is valued each year by independent professional valuers.
Valuations are inherently subjective due to the assumptions and judgements
made by the valuers. Commercial property is a cyclical market that can exhibit
significant upward and downward movements. Steadiness and progression over the
medium and long-term are most likely to be in the shareholders' interests.
The annual valuation is undertaken under accounting standards for use in our
financial statements in accordance with RICS Global Standards and values each
property as a separate asset on the basis of a sale of that property in the
open market. Therefore, the valuation does not take account of any additional
value that might be realised if the portfolio as a whole were to be offered on
the open market or any other special factors that may be relevant in the case
of individual potential purchasers, such as sales to other property investors,
existing tenants or adjoining owners.
Wynnstay on AIM
Wynnstay's shares were quoted on its AIM introduction in 1995 at a mid-market
price of 150p. On the day prior to the approval of this report, the mid-market
price was 835p, an increase of 557%. The dividend paid in 1995 was 4.0p per
share. The dividend paid and proposed for the current year will be 27.0p per
share, an increase of nearly 675%.
Performance
Wynnstay's distinctive approach has delivered on its strategy over both the
medium and long term. Shareholders have benefitted from substantial increases
in net asset value per share and dividends as the portfolio and its management
have delivered strong results over those periods.
Corporate Performance over five years
Year Ended 25 March 2021 2022 2023 2024 2025
pence pence pence pence pence
Net Asset Value per share: 911p 1,090p 1,110p 1,136p 1,168p
Annual
Five Year Net Asset Value: 28.2%
Cumulative Growth
Dividends per share, paid and proposed: 21.0p 22.5p 24.0p 25.5p 27.0p
Annual
Five Year Dividend: 28.6 %
Cumulative Growth
% % % % %
Total Accounting Return(†): Annual 16.9% 22.0% 3.9% 4.5% 5.1%
Five Year Total Accounting Return(†): 47.5 %
Cumulative Growth
Loan-to-value ratio 29.4% 25.5% 25.3% 24.7% 23.3%
Operating Costs/Portfolio Value 2.5% 1.9% 1.6% (►) 1.5% (►) 1.6%
Operating Costs/Income 34.8% 32.0% 27.7%(►) 24.8% (►) 25.9%
(†) Total accounting return is calculated by combining movements in net
asset value and dividends for the period
expressed as a percentage of the opening net asset value per share.
(►) Operating costs exclude £81,000 (2023) and £27,000 (2024) of
non-recurring costs relating to new board appointments.
We recognise the importance of a rising income stream for many shareholders
and we seek to develop our portfolio so that it can deliver a growing income
that can underpin progressive dividend payments to shareholders. We also know
that, in addition to rising dividends, shareholders expect appreciation in the
capital value of their investment.
Our objective is to achieve a reasonable balance between progressive dividend
payments and capital appreciation.
Dividends over the past five years have increased by 28.6%. Net asset value
per share increased by 28.2%.
Total accounting return per share combines the movements in dividends and net
asset value and demonstrates to shareholders the overall corporate
performance. This measure is reviewed both on an annual basis and cumulatively
over a rolling five-year period. Over the last five years the Company has
benefited from a cumulative total accounting return of 47.5%, reflecting an
average annual rate of return of 9.5% per annum over this period.
Another key measure of performance for shareholders in investment businesses
is our ability to manage our cost base
relative to the value of the portfolio under management and the income
generated, both of which support dividend
payments to shareholders. Operating costs relative to portfolio value have
been at or below 2% for four of the past five years. This year they were 1.6%.
In two of the past five years, operating costs relative to property income
have been within the range of 30-35%. Over the last three years, as a result
of the increase in rental income and tight cost control, this figure has
reduced to around 25%.
Loan-to-value ratio is an important measure for shareholders in businesses
that rely on debt for funding, such as property companies. It demonstrates the
ability to balance expansion of the portfolio and the returns that come from
using debt to do so with the need to manage risk through prudent external
financing. Wynnstay's facilities allow borrowing up to 50% of the value of the
assets secured. It is prudent, given the nature of the commercial property
market, to adopt an approach that gives us a good margin between our actual
borrowing and this facility limit with a range of circa 35-40% being
considered appropriate. Wynnstay's loan-to-value ratio has generally been well
within this range.
Portfolio Performance over five years
Year ended 25 March 2021 2022 2023 2024 2025
£'000 £'000 £'000 £'000 £'000
Property Income 2,438 2,308 2,312 2,599* 2,693*
Rental Income 2,140 2,252 2,304 2,541 2,679
Underlying(†)( ) ( )Five Year Rental Income: Cumulative Growth 19.4% 1,790 2,137
Portfolio Value 34,005 38,975 39,320 43,915 42,910
Underlying(†) Five Year Portfolio Value: Cumulative Growth 26.0 % 27,496 34,645
% % % % %
Occupancy at year-end 99% 100% 100% 99% 100%
Rent Collection for year 99%(►) 100% 100%(♦) 100% 98%
Passing Rent to Estimated Rental Value 92.5% 88.1% 92.4% 90.2% 89.4%
years years years years years
Weighted average unexpired lease term:
- to lease break 2.8 3.0 3.1 2.9 2.4
- to lease expiry 4.5 4.4 4.4 4.1 3.7
* Includes for 2025 £14,000 of Other Property Income (2024:
£58,000). See note 2 of the Financial Statements.
(†)( ) Underlying Rental Income and Portfolio Value are for
properties that have been held in the portfolio throughout the five-year
period.
(►) Excludes rent concessions of £29,000 granted to tenants as a result
of the Covid-19 pandemic.
(♦) After rounding for £8,000 bad debt (0.3%).
In assessing the performance of the portfolio, several key measures are used.
In addition to the overall property income and portfolio value, underlying
growth in both property income and value from those properties held in the
portfolio throughout the previous five years are assessed.
.
Like-for-like underlying rental income and portfolio value growth demonstrate
the ability to acquire and retain properties that are attractive to existing
and new tenants, to manage them well and to grow average rents over time thus
increasing income and capital value. On this analysis, the core portfolio has
performed very well over five years, delivering rental income growth of 19.4%
and portfolio value growth of 26.0%.
Occupancy and rent collections are also key performance measures for the
portfolio. Occupancy demonstrates the ability to retain tenants at renewal and
to let vacant premises when tenants do not renew which, in turn, underpin
rental income and shareholders' dividends as well as capital value. Ensuring
that rents are collected is essential to ensure that the portfolio delivers
the best results for shareholders and shareholders' dividends are protected.
Wynnstay's excellent record of rental collections and occupancy has been
maintained at or very close to 100% over the past five years.
The weighted average unexpired lease term of the portfolio as a whole provides
guidance on the anticipated continuity of rental income in future years. Most
leases are for five years and some (but not all) longer leases, such as for
ten years, may contain a break clause after five years. Typically, over the
past five years, our weighted average unexpired lease term has been between
2.4 and 3.1 years to lease break and between 3.7 and 4.5 years to lease
expiry.
Our passing (i.e. current) rental income relative to the estimated rental
value for the portfolio used by our valuers in the annual valuation gives an
indication of the potential additional income that may be realisable,
depending on market conditions, when rent reviews fall due or when properties
become vacant and are offered for reletting. Over the past five years, this
has typically demonstrated a % reversionary income potential in the range of
7.5% to 12.0%.
( )
Share Price Performance
Wynnstay is quoted on AIM and therefore is not a constituent of the FTSE 350
Real Estate Investment Trusts Index, which contains a good cross-section of
quoted property companies of various forms, all much larger than Wynnstay.
Wynnstay's share price relative to the FTSE 350 Real Estate Investment Trusts
Index is shown in the chart below. Wynnstay's share price has substantially
outperformed the index over the ten-year period.
Source: Alpha Terminal
Wynnstay's share price has also substantially outperformed the market indices
for the leading AIM companies and for other much larger companies within the
main market in the FTSE-350 index as shown in the chart below.
Source: Alpha Terminal
WYNNSTAY PROPERTIES PLC
CHAIRMAN'S STATEMENT
I am pleased to report to shareholders on another year of steady and very
satisfactory progress at Wynnstay, delivering further increases in net asset
value and in dividends, and thus in total accounting return, for
shareholders.
We made two disposals of longstanding assets and, since the year-end, we have
reinvested the proceeds in an acquisition with better growth prospects. The
portfolio has also benefitted from a series of positive reversionary lease
renewals and rent reviews.
Wynnstay's overall financial performance in the financial year, compared to
the prior year, is summarised in the overview table below. The table should be
read in conjunction with the following commentary and the financial
statements.
Overview of Financial Performance: 2025 vs. 2024
% Change 2025 2024
• Rental Income*
Annual 5.4 % £2,679,000 £2,541,000
Underlying 9.4 % £2,621,000 £2,396,000
• Net Property Income (adjusted) (†) 5.2 % £1,883,000 £1,790,000
• Operating Income
Before fair value adjustment (6.6) % £1,935,000 £2,072,000
After fair value adjustment 26.5 % £2,618,000 £2,069,000
• Earnings per share (weighted average) 15.5 % 58.1p 50.3p
• Dividends per share, paid and proposed 5.9 % 27.0p 25.5p
• Net asset value per share 2.8 % 1,168p 1,136p
• Loan to value ratio 23.3% 24.7%
• Total Accounting Return for the year(►) 5.1% 4.5%
* Annual Rental Income is shown in note 2 of the Financial Statements and
Underlying Rental Income is the like-for-like income from properties held in
the portfolio throughout both years.
(†) Excludes £27,000 of non-recurring costs incurred in 2024
relating to new Board appointments.
(►) Total accounting return is calculated by combining movements in net
asset value and dividends for the period expressed as a percentage
of the opening net asset value per share.
Commentary on Financial Performance in 2025
Rental income for the financial year increased by 5.4% compared to the
previous year to £2,679,000 (2024: £2,541,000). This increase reflects the
strong outcome of several successful rent reviews and new lettings within the
existing portfolio after the previously reported sale of the Cosham and
Midhurst properties in the first half of the financial year.
Other property income of £14,000 (2024: £58,000) comprised service charge
related management fees.
Net property income rose to £1,883,000 (2024: £1,790,000) reflecting the
higher property income noted above and the overall property costs of £113,000
(2024: £138,000) and administrative costs of £697,000 (2024: £671,000) in
the financial year compared to the prior year.
Operating income benefitted from the sale of the Midhurst and Cosham
properties which realised a net profit after costs of £52,000 (2024:
£282,000) and after the fair value adjustment arising from the annual
revaluation, was £2,618,000 (2024: £2,069,000). Earnings per share rose by
15.5% to 58.1p per share.
As a result of the fair value adjustment arising from the valuation, to which
I refer below, the profit on disposal of Midhurst and Cosham properties and
the positive income generation in the business, the net asset value per share
rose by 2.8% to 1,168p per share (2024: 1,136p).
Managing Director's Review
Our Managing Director, Chris Betts, has prepared his review of the year which
follows this statement. This provides detail on the transactions mentioned
above and management activity in the portfolio.
Valuation
Our Independent Valuers, BNP Paribas Real Estate, undertook the annual
revaluation as at 25 March 2025 valuing the Company's portfolio at
£42,910,000 (2024: £43,915,000). This represents a 1.7% increase of
£725,000 on the like for like valuation of properties held as at 25 March
2024 and primarily reflects the transactions in the year already mentioned
above as well as the benefits of the active management of the portfolio
reported in the Managing Director's Review.
Finance, Borrowings and Gearing
Wynnstay remains in a strong financial position, with a low loan-to-value
ratio under our secured facilities of 23.3 % (2024: 24.7%).
At the year-end, we held cash of £1.7 million (2024: £0.4 million) and our
borrowings were £9.977 million (2024: £10.843 million). The increase in cash
held and the decrease in our borrowing compared to the prior year resulted
from the profitable disposals mentioned above. During this period we fully
repaid £900,000 borrowed under our revolving credit facility.
The interest rate under our fixed term facility is fixed at 3.61% until
December 2026. In addition to our available cash balance and positive cash
flow from our property activities, our £5m revolving credit facility was
undrawn at the year-end.
Dividend
Over recent years we have sought to pursue a progressive dividend policy that
aims to provide shareholders with a rising income commensurate with Wynnstay's
underlying growth and finances.
In the light of the satisfactory results for the year, the Board recommends a
final dividend of 17.0p per share (2024:
16.0p). An interim dividend of 10.0p per share (2024: 9.5p) was paid in
December 2024. Hence, the total dividend for this year of 27.0p per share
(2024: 25.5p) represents an increase of 5.9% on the prior year.
Over the past five years, dividends have increased by 28.6% from 21.0p to
27.0p.
Subject to shareholder approval, the final dividend will be paid on 31 July
2025 to shareholders on the register at the close of business on 27 June 2025.
Wynnstay's Financial Performance in the longer-term
In the Annual Report three years ago, we introduced a new section, entitled
Introduction to Wynnstay. This describes Wynnstay's distinctive approach to
commercial property investment primarily for private shareholders and provides
information both on the Company's performance and its share price performance
over time.
I encourage all shareholders to read this explanation of Wynnstay's rationale
and performance on pages 5 to 9 of the Annual Report. It highlights Wynnstay's
continued strength over time across a range of measures.
Key points to which I would draw shareholders attention are illustrated on
page 6 of the Annual Report. Wynnstay has delivered cumulative growth over
five years in total accounting return (net asset value and dividends) of 47.5%
and Wynnstay's share price has substantially outperformed established market
indices. In managing the portfolio, we have achieved substantial underlying
growth in rental income and portfolio value and maintained a consistent record
of full occupancy and rent collections.
Changes at our registrars and auditors
Following the acquisition in May 2024 of our registrars, Link Group, by
Mitsubishi UFG Financial Group Inc. (MUFG), our registrars are now known as
MUFG Corporate Markets. There is no change in the services they provide as
registrars and their updated contact details are shown on page 2 of the Annual
Report.
On 31 March 2025 our auditors, who were part of the professional services
division of Evelyn Partners LLP, separated from that group under new
ownership. They are now known as S&W Partners Audit Limited and they
report on our financial statements for the year under that new name on pages
30 to 34 of the Annual Report. The senior team responsible for the conduct of
the audit has not changed.
Change of nominated adviser and broker
In July 2024 W.H. Ireland Group PLC sold its capital markets division
including its corporate advisory and broking business to Zeus Capital Limited,
which therefore became our nominated adviser and broker. Many of the W.H.
Ireland team have remained with Zeus Capital and I am pleased to say that the
transfer was completed smoothly so far as we are concerned.
Change of Company Secretary and Registered Office
Our Company Secretary, Susan Wallace, retired on 31 July 2024 and we appointed
our solicitors' secretarial company, Fieldfisher Secretaries Limited, to
succeed her and moved our registered office to their address in London which
is shown on page 3 of the Annual Report.
Shareholder Matters
Shareholders will be aware from our Annual Reports in recent years that one
issue that has been raised in the annual self-evaluation carried out by the
Board is the effectiveness of the Company's communications with shareholders
and potential investors.
Whilst we are pleased to hear from individual shareholders by phone or email
from time to time, their enquiries are generally about their shareholdings and
forthcoming dividend payments although we do also hear from some who read
about developments affecting commercial property, such as energy efficiency,
and want to ask about the impact of potential proposals on our portfolio.
In common with most other companies, attendance at our Annual General Meetings
has declined substantially over the past ten years, particularly since the
pandemic. Although it is encouraging to see how many shareholders still take
the trouble to vote at the meetings by proxy, now only around half a dozen or
so shareholders at most attend meetings.
In order to provide more information to shareholders, last year we undertook a
complete redesign of our website which was launched in time for our Annual
General Meeting in July. This redesign, incorporating additional material on
Wynnstay's distinctive approach to commercial property investment and with new
photographs and details of the portfolio is an important means of
communicating with shareholders.
We have had several discussions with our nominated advisers and brokers, W.H.
Ireland and subsequently Zeus Capital, about whether it might be appropriate
for us to use one of the relatively new virtual platforms to communicate
with shareholders. Whilst we realise that not all shareholders are familiar
with using the internet for online meetings, we know that many use it to
communicate with families and friends at home and across the other side of the
world. Indeed, we have one shareholder who is 102 years old and is a regular
user.
We do not consider that it is appropriate to abandon our physical meetings of
shareholders or to move to holding hybrid meetings which combine physical and
virtual presence by shareholders. While some companies have done this, they
tend to be those with large share registers and mostly institutional
shareholders or small companies, often with niche corporate or financial
investors operating in specialist sectors. At Wynnstay, this change would
require modifications to our Articles of Association and would add some
complexity and cost which we do not consider is necessary.
However, we have decided on a trial basis to use an online platform, Investor
Meet Company (IMC), to supplement our regular reports to shareholders
following the Annual General Meeting and the publication of our Interim
Report. We may also add additional presentations if there are significant
developments during the year. The presentations will enable us to introduce
Wynnstay and present its recent results, for questions to be raised with us in
writing through an online facility and for feedback to be provided to the
Company following the meeting. The IMC facility will be available both to
shareholders and to any other individuals, such as potential investors and
financial advisers who register with IMC to attend.
Those shareholders who wish to take part in the IMC presentation will need to
register in advance with IMC. This is a simple process and there is no cost to
register or participate. Shareholders will find the details of how to
register in my letter accompanying this Annual Report.
The Board continues to monitor the liquidity and marketability of Wynnstay
shares. We have a small, and rather unusual, share register on which there are
around 240 accounts representing through nominee accounts around 300
shareholders, a significant number of which are connected through family
relationships and are private investors rather than funds or institutions. In
the main, they are long-term investors with some holdings having passed from
generation to generation since the Company was founded in 1886. These
long-term investors provide stability and continuity within the shareholder
base.
As a result of this relatively small shareholder base the volume and
proportion of Wynnstay shares traded in the market is less than for many
quoted companies with larger share registers and more dispersed holdings.
Fewer Wynnstay shares tend to be available to trade and then only usually in
modest quantities and with a sizeable "spread" between the bid and offer
prices. Shares are typically traded at a significant discount to the net asset
value per share. However, both these features are also seen in other, much
larger, quoted property companies. As already noted above, Wynnstay's share
price has continued substantially to outperform the comparative real estate
sector.
At the Annual General Meeting in 2022, shareholders gave Wynnstay authority to
purchase its own shares so that the Company can act as a purchaser in the
market where it is appropriate, and in the interests of shareholders
generally, to do so. Other quoted property and investment companies, as well
as other quoted companies, use share buybacks on a routine basis to enhance
earnings and net asset value per share. Where shares are bought back dividends
cease to be payable, thus conserving cash in the business and benefitting
continuing shareholders and with the present intention being to hold any
shares bought back in treasury so that they are available for reissue where
there is market demand for shares or to facilitate individual property
acquisitions.
The volume of shares traded in the past three years has been relatively small
and the market has generally been able to absorb most of the shares offered.
The authority has so far been used once, to acquire 15,000 Ordinary Shares at
710p in September 2022. The Board keeps the position under review and,
provided not in a closed period, may exercise the authority when shares are
available in the market and it is in the interests of shareholders generally
to do so.
We also consider that, as in many prior years, Wynnstay's future development
would be assisted if authority continued to be granted by shareholders to
issue a limited number of shares without first offering them to existing
shareholders. This gives Wynnstay flexibility, for instance, to issue shares
for small fundraisings which might support a larger acquisition and allow the
issue of shares as part consideration on individual property acquisitions to
vendors, where the vendors wish to retain an interest in a broader portfolio
of assets in a quoted company. Bringing in new investors with an interest in
commercial property and in Wynnstay's distinctive approach to the share
register would broaden the shareholder base and support its future
development.
Outlook
After several years of economic, political and wider market instability and
uncertainty, the outlook for the UK remains mixed. Whilst inflation appears to
be trending down towards the Bank of England's target rate of 2%, it is still
susceptible to short-term volatility. Interest rates appear to be on a
downward slope with further cuts anticipated although their timing is
uncertain. However, against these positive signs, the potential change in
international trading relationships that may follow the tariffs proposed by
the new US administration, ongoing geopolitical unrest in various parts of the
world and the UK government's actions following the Autumn 2024 budget and the
challenges it faces in promoting growth and jobs while balancing spending,
taxation and public debt could undermine business and consumer confidence.
Against this background, our portfolio has continued to evolve and perform
well and our results reflect this. We remain confident that our focused,
stable and well-let portfolio can continue to deliver growth of capital and
income for shareholders in the medium and long-term.
Colleagues and Advisers
Our Managing Director, Chris Betts, and his team have continued to work
effectively to deliver for shareholders. I would like to thank them, as well
as my colleagues on the Board and our professional advisers, for their support
over the year.
Annual General Meeting
The AGM provides an important and valued opportunity for the Board to engage
with shareholders. Our AGM this year will be held at 2.00 pm on Wednesday 16
July 2025 at the Royal Automobile Club, 89 Pall Mall, London SW1Y 5HS. The
Notice of Meeting is to be found at the end of this Annual Report.
I urge all shareholders to complete and return their proxy forms so that their
votes on the resolutions being put to the meeting can be counted.
Shareholders who have registered for Investor Centre online can also benefit
from the ability to cast their proxy votes electronically, rather than by
post. Shareholders not already registered for Investor Centre online will need
their investor code, which can be found on their share certificate or dividend
tax voucher, in order to register.
To maximise shareholder engagement, shareholders who are unable to attend the
AGM are encouraged to submit in
writing those questions that they might have wished to ask in person at the
meeting. Questions should be emailed to
company.secretary@wynnstayproperties.co.uk at least 48 hours in advance of
the AGM. You will receive a written response and, if there are common themes
raised by a number of shareholders, we aim to provide a summary for all
shareholders, grouping themes and topics together where appropriate, on the
Company's website following the AGM.
As explained above and in the letter accompanying or advising of the
publication of this Annual Report, any shareholders who are unable to attend
the AGM will also have the opportunity to attend an online presentation on the
IMC platform following the AGM.
Finally, on behalf of the Board, I would like to thank shareholders who have
held their shares over many years for their continued support for and interest
in Wynnstay and for those who have recently acquired their shares to extend a
warm welcome to the Company.
Philip Collins
Chairman
16 June 2025
MANAGING DIRECTOR'S REVIEW
I am delighted to report that my first full year as Managing Director has
delivered continued positive results from our operations.
Property Disposals
As already reported in our Interim Results, two properties were sold during
the year. The property at North Street, Midhurst was sold in June 2024 for
£345,000 realising a gross profit of £15,000 before costs over the net book
value of £330,000 as at 25 March 2024. The Grade II Listed building is let
as a café until September 2026 and was bought by a private investor.
In September 2024 we completed the sale of Wynnstay House, High Street,
Cosham, Hampshire also to a private investor at a price of £1,470,000.
Wynnstay developed this 13,600 sq ft office building in 1991 and it is let to
the government for use as a Jobcentre Plus until April 2028. The sale
realised a gross profit of £70,000 before costs over the net book value of
£1,400,000 as at 25 March 2024.
In both cases, we considered that the prospects for income and capital growth
were limited, and that our capital would be better utilised in other assets
with greater potential. Pending reinvestment, part of the proceeds was used to
repay short-term borrowings.
Post Year-End Property Acquisition
We have sought to invest in new investment opportunities that meet our
criteria. A suitable property in Waterbeach, Cambridge was identified in
February and as previously announced, completion of the purchase took place at
the end of May. The total cost of the acquisition, which included stamp duty
land tax and due diligence fees, is anticipated to be approximately £2.95
million and was funded approximately 60% from our cash reserves with the
balance being drawn from existing borrowing facilities.
The freehold property comprises a terrace of five light industrial warehouse
units located in an industrial estate beside the A10 approximately 3 miles
from its junction with the A14 and the Cambridge Science and Business Parks.
Three units are occupied as warehouse space for a specialist manufacturing
business, one by a national motor parts trade counter and the remaining unit
is let on a long-leasehold interest. The total rental income of £183,100
per annum is secured on leases with a Weighted Average Unexpired Lease Term of
7 years and provides a net initial yield of 6.2%. This is expected to rise
to 6.45% following rent reviews in 2028 and a lease expiry in 2029.
Our investment seeks to benefit from rental growth spurred by the strong local
economy of Cambridge and the A14 corridor. The tenant base further
diversifies portfolio income, and the location complements the geographic
spread of the portfolio.
Following these transactions, the portfolio now comprises 93 units in 16
locations that are let on 86 separate leases.
Portfolio Activity
Following the letting of a vacant unit in Aylesford that took place in April
2024, the portfolio was fully let for the remainder of the year. One break
option was exercised by a tenant in Aylesford effective on 25 March 2025 such
that at year-end technically we had one unit vacant representing 0.7% of
floorspace. However, our marketing had been successful, and we completed a new
letting two days later at a rent 33% ahead of the estimated rental value used
by the valuers in the March 2024 valuation.
Our record of strong tenant retention within the portfolio is demonstrated by
the nine other lease termination options that were not exercised by tenants
over the year.
We reported on the successful lease renewal of a unit at Riverdale Industrial
Estate in Tonbridge in our Interim Results. The passing rent has increased by
49% over the five years since the prior rent review, which is better than
anticipated at the time of purchase. One further lease renewal due in the year
has been completed in Liphook where the rent achieved is 12% higher than the
estimated rental value used by the valuers in the March 2024 valuation.
Two other lease renewals that were due in the year remain subject to
negotiations.
Network Rail approached us to extend the term of their two leases in Liphook
that were due to expire in July 2025 because the rail upgrade work that the
occupied space was supporting was taking longer than originally planned. The
result is that we were able to complete lease extensions for eight months at
significantly increased rents.
The tenant of the Aldershot property also sought an early renewal of the lease
due to expire in September 2025. We were able to complete a reversionary
lease that provides a term certain to March 2031. The initial rent payable
will be nearly 40% higher than that currently payable and will increase
annually over the first five years of the new lease.
In addition, six rent reviews of small units in Liphook have been completed,
all at rental levels showing a minimum increase of 10% over a three-year
period. Rent reviews due in the year for two units in Aylesford are still in
negotiation.
At year-end, 98% of rent due for the year had been collected with only two
instances of rent remaining in arrears. One case involves a tenant with a
business that was struggling financially and where part of the last quarter's
was outstanding at the year-end but was received in May. The lease has
subsequently been surrendered and the unit re-let at a rent 17% higher than
previously passing.
The second case involves a tenant that went into administration on 3 February
2025. £17,000 of the last quarter's rent was outstanding as at 25 March
2025 of which £7,000 due from 25 December 2024 to 3 February 2025 will be
irrecoverable save as an unsecured debt. However, the business is in the
process of being acquired by a competitor from the administrators, which has
allowed us to demand and receive all rents due from 3 February 2025.
Property Valuation
For much of the year the commercial property market reflected improved
optimism regarding the prospect of interest rate cuts. However, with the money
markets discounting the extent of this prospect from the end of 2024, market
yields within capital pricing have not altered significantly over the 12
months to 25 March 2025. The valuation of many of the properties in the
portfolio has, however, been affected by the increased proximity of lease
break option or expiry dates either through an increase in the valuation yield
or in an assumed void period following the relevant date.
Nonetheless the impact of this methodology on the valuation was more than
offset by rental growth in our portfolio and our active asset management.
Wynnstay's like-for-like rental income initially receivable for the valuation
increased by 3.7% and the current estimated rental value used by our valuers
increased by 5% over the year. This reflects the strength of the industrial
sector as a whole and the benefit of Wynnstay's diverse and well-let portfolio
in that sector. As a result, on a like-for-like basis after excluding the two
properties sold in the year, the portfolio value rose by 1.72% to
£42,910,000.
Future
My report last year outlined our increased focus on the need to maintain,
refurbish and upgrade our buildings generally, especially where this will
result in increased rental income and enhanced capital value. These
considerations are given greater urgency by the impact of the Minimum Energy
Efficiency Standards legislation and minimum EPC ratings for properties. We
are developing plans to implement improvements across various properties in
the portfolio on a phased cost-effective basis where opportunities arise, such
as where properties are being relet, and carrying out changes to heating and
lighting equipment at modest cost to improve energy efficiency, often in
conjunction with our existing tenants.
Chris Betts
Managing Director
16 June 2025
WYNNSTAY PROPERTIES PLC
STATEMENT OF COMPREHENSIVE INCOME FOR YEAR ENDED 25 MARCH 2025
Notes 2025 2024
£'000 £'000
Property Income 2 2,693 2,599
Property Costs 3 (113) (138)
Administrative Costs 4 (697) (671)
Net Property Income 1,883 1,790
Movement in Fair Value of 683 (3)
Investment Properties 10
Profit on Sale of Investment Property 52 282
Operating Income 2,618 2,069
Investment Income 6 37 29
Finance Costs 6 (480) (455)
Income before Taxation 2,175 1,643
Taxation 7 (608) (287)
Profit after Taxation and Total Comprehensive Income 1,567 1,356
Basic and diluted earnings per share 9 58.1p 50.3p
The Company has no items of other comprehensive income.
WYNNSTAY PROPERTIES PLC
STATEMENT OF FINANCIAL POSITION 25 MARCH 2025
2025 2024
Notes £'000 £'000
Non-Current Assets
Investment Properties 10 42,910 43,915
Investments 12 3 3
42,913 43,918
Current Assets
Trade and other receivables 14 344 413
Cash and Cash Equivalents 1,732 397
2,076 810
Current Liabilities
Trade and other payables 15 (825) (828)
Income Taxes Payable (355) (347)
(1,180) (1,175)
Net Current Assets / (Liabilities) 896 (365)
Total Assets Less Current Liabilities 43,809 43,553
Non-Current Liabilities
Bank Loans Payable 16 (9,977) (10,843)
Deferred Tax Payable 17 (2,339) (2,083)
(12,316) (12,926)
Net Assets 31,493 30,627
Capital and Reserves
Share Capital 18 789 789
Capital Redemption Reserve 205 205
Treasury Shares (1,732) (1,732)
Share Premium Account 1,135 1,135
Retained Earnings 31,096 30,230
31,493 30,627
Net Asset Value pence per share 1,168p 1,136p
Approved by the Board and authorised for issue on 16 June 2025
P.G.H.
Collins
C.G. Betts
Director
Director
Registered number: 00022473
WYNNSTAY PROPERTIES PLC
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 25 MARCH 2025
2025 2024
£'000 £'000
Cash flows from operating activities
Income before taxation 2,175 1,643
Adjusted for:
(Increase)/decrease in fair value of investment properties (683) 3
Interest receivable (37) (29)
Interest and finance costs payable 480 455
Profit on sale of investment property (52) (282)
Amortised loan fees 34 15
Changes in:
Decrease in trade and other receivables 69 69
(Decrease) in trade and other payables (3) (15)
Increase in income taxes payable 8 40
Cash generated from operations 1,991 1,899
Income taxes charged (352) (238)
Net cash generated from operating activities 1,639 1,661
Cash flows from investing activities
Interest and other income received 37 29
Purchase of investment properties (42) (5,213)
Sale of investment properties 1,782 891
Net cash generated from / (used in) investing activities 1,777 (4,293)
Cash flows from financing activities
Interest paid (480) (457)
Dividends paid (701) (661)
(Repayment)/drawdown of bank loans net of fees (900) 879
- Note 1 below
Net cash used in financing activities (2,081) (239)
Increase / (decrease) in cash and cash equivalents 1,335 (2,871)
Cash and cash equivalents at beginning of period 397 3,268
Cash and cash equivalents at end of period 1,732 397
Note 1: RECONCILIATION OF LIABILITIES ARISING FROM FINANCE
ACTIVITIES
£'000
Balance at 26 March 2023 9,951
Cash flows 879
Other non-cash items 13
Balance at 25 March 2024 and 26 March 2024 10,843
Cash flows (900)
Other non-cash items 34
Balance at 25 March 2025 9,977
WYNNSTAY PROPERTIES PLC
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 25 MARCH 2025
YEAR ENDED 25 MARCH 2025
Capital Share
Share Redemption Reserve Premium Treasury Retained
Capital Account Shares Earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 26 March 2024 789 205 1,135 (1,732) 30,230 30,627
Total comprehensive - - - - 1, 567 1,567
income for the year
Dividends - note 8 - - - - (701) (701)
Balance at 25 March 2025 789 205 1,135 (1,732) 31,096 31,493
YEAR ENDED 25 MARCH 2024
Capital Share
Share Redemption Reserve Premium Treasury Retained
Capital Account Shares Earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 26 March 2023 789 205 1,135 (1,732) 29,541 29,938
Total comprehensive - - - - 1,356 1,356
income for the year
Revaluation movement - - - - (6) (6)
Dividends - note 8 - - - - (661) (661)
Balance at 25 March 2024 789 205 1,135 (1,732) 30,230 30,627
FUNDS AVAILABLE FOR DISTRIBUTION
2025 2024
£'000 £'000
Retained Earnings 31,096 30,230
Less: Cumulative Unrealised Fair Value (13,583) (12,917)
Adjustment of Property Investments net of tax
Treasury Shares (1,732) (1,732)
Distributable Reserves 15,781 15,581
The Cumulative Unrealised Fair Value Adjustment of Property Investments arises
from the net accumulation of historic fair value adjustments of the property
portfolio.
WYNNSTAY PROPERTIES PLC
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 25 MARCH 2025
Explanation of Capital and Reserves:
· Share Capital: This represents the subscription, at par value, of the
Ordinary Shares of the Company.
· Capital Redemption Reserve: This represents money that the Company
must retain when it has bought back shares, and which it cannot pay to
shareholders as dividends: It is a non-distributable reserve and represents
paid up share capital.
· Share Premium Account: This represents the subscription monies paid
for Ordinary Shares of the Company in excess of their par value.
· Treasury Shares: This represents the total consideration and costs
paid by the Company when purchasing the 458,650 shares as referred to in Note
18.
· Retained Earnings: This represents the profits after tax that can be
used to pay dividends. However, dividends can only be paid from distributable
deserves as detailed in the preceding table.
WYNNSTAY PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 25 MARCH 2025
1. BASIS OF PREPARATION, MATERIAL ACCOUNTING POLICIES AND
ESTIMATES
Wynnstay Properties PLC is a public limited company incorporated and domiciled
in England and Wales. The principal activity of the Company is property
investment, development and management. The Company's ordinary shares are
traded on the AIM, part of The London Stock Exchange. The Company's
registered number is 00022473 and registered address is Riverbank House, 2
Swan Lane, London EC4R 3TT. The material accounting policies are summarised
below.
1.1 Basis of Preparation
The financial statements have been prepared in accordance with UK adopted
International Accounting Standards ("IAS"). The financial statements have been
presented in Pounds Sterling being the functional currency of the Company and
rounded to the nearest thousand. The financial statements have been prepared
under the historical cost basis modified for the revaluation of investment
properties and financial assets measured at fair value through Operating
Income.
(a) New Interpretations and Revised Standards Effective for the year ended 25
March 2025
The Directors have adopted all new and revised standards and interpretations
issued by the International Accounting Standards Board ("IASB") and the
International Financial Reporting Interpretations Committee ("IFRIC") of the
IASB and adopted by applicable law that are relevant to the operations and
effective for accounting periods beginning on or after 26 March 2024:
· IAS 1 Presentation of Financial Statements: Classification of
Liabilities
· IAS 1 Presentation of Financial Statements: Non-current liabilities
with Covenants
The adoption of these interpretations and revised standards had no material
impact on the disclosures and presentation of the financial statements.
(b) Standards and Interpretations in Issue but not yet Effective
There are no new standards or interpretations not yet endorsed that are
expected to have a significant impact on the Company for the financial year
ending 26 March 2025.
(c) Going concern
The financial statements have been prepared on a going concern basis. This
requires the Directors to consider, as at the date of approving the financial
statements, that there is reasonable expectation that the Company has adequate
financial resources to continue to operate, and to meet its liabilities as
they fall due for payment, for at least twelve months following the approval
of the financial statements.
The Directors have reviewed cash balances and borrowing facilities to cover at
least twelve months of operations, including financing costs and continuation
of employment and advisory costs as currently contracted without any reduction
for cost saving initiatives. The results of the review show that the Company
has cash and borrowing facilities to cover at least twelve months of
operations, and that the Company will satisfy the financial covenant ratios in
the borrowing facilities as described in Note 16. In addition, the Statement
of Financial Position as at 25 March 2025 shows that the Company had a cash
balance of £1.7m (2024: £0.4m), an undrawn Revolving Credit Facility of
£5.0m (2024: £4.1m), net assets of £31.5m (2024: £30.6m), and a gearing
ratio of 26% (2024: 34%). The Revolving Credit Facility expires on 16 December
2026. In the light of the foregoing considerations, the Directors consider
that the adoption of the going concern basis is reasonable and appropriate.
1.2 Accounting Policies
Investment Properties
All the Company's investment properties are independently revalued annually
and stated at fair value as at 25 March. The aggregate of any resulting
increases or decreases are taken to operating income within the Statement of
Comprehensive Income. The basis of independent valuation is described in Note
10.
Investment properties are recognised as acquisitions or disposals based on the
date of contract completion.
Depreciation
In accordance with IAS 40 investment properties are included in the Statement
of Financial Position at fair value and are not depreciated.
Disposal of Investments
The gains and losses on the disposal of investment properties and other
investments are included in Operating Income in the year of disposal. Gains
and losses are calculated on the net difference between the carrying value of
the properties and the net proceeds from their disposal.
Rental Income
Rental income is recognised on a straight-line basis over the period of the
lease and is measured at the fair value of the consideration receivable. Lease
deposits are held in separate designated deposit accounts and are thus not
treated as assets of the Company in the financial statements. All income is
derived in the United Kingdom. When there are changes to a tenancy agreement
it is considered whether any lease incentives were given. Lease incentives are
amortised over the lease term.
Deferred Income
Deferred Income arises from rents received in advance of the period. See note
15.
Taxation
Current and deferred tax are recognised and measured in accordance with IAS
12. The Company provides for deferred tax on investment properties by
reference to the tax that would be due on the sale of the investment
properties.
Trade and Other Accounts Receivable
All receivables do not carry any interest and are short term in nature.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and on demand deposits.
Trade and Other Accounts Payable
All trade and other accounts payable are non-interest bearing.
Pensions
Defined pension scheme contributions are charged to the Statement of
Comprehensive Income as incurred.
Borrowings
Borrowings are classified as current liabilities unless the Company has a
right to defer settlement of the liability at the end of the reporting period
for at least 12 months and are measured at amortised cost.
Dilapidations
Dilapidations receipts are recognised in the Statement of Comprehensive Income
when the right to receive them arises. They are recorded in revenue as other
property income unless a property has been agreed to be sold whereby the
receipt is treated as part of the proceeds of sale of the property. See Note
2.
1.3 Key Sources of Estimation Uncertainty and Judgements
The preparation of the financial statements requires management 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.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period. The key sources
of estimation uncertainty that have a significant risk of causing material
adjustment to the carrying amounts of assets and liabilities within the next
financial year are those relating to the fair value of investment properties
which are revalued annually by the Directors having taken advice from the
Company's independent external valuers, on the basis described in Note 10. A
key judgement taken by the Directors is as to whether a property is being held
for sale.
There are no other judgemental areas identified by management that could have
a material effect on the financial statements at the reporting date.
2. PROPERTY INCOME 2025 2024
£'000 £'000
Rental income 2,679 2,541
Other property income 14 58
2,693 2,599
Rental income comprises rents earned and apportioned over the lease period
taking into account rent free periods and rents received during the period.
Other property income comprises dilapidations payments received and
miscellaneous income arising from the letting of properties.
3. PROPERTY COSTS 2025 2024
£'000 £'000
Empty rates - 2
Property management 27 48
27 50
Legal fees 66 50
Agent fees 20 38
113 138
4. ADMINISTRATIVE COSTS 2025 2024
£'000 £'000
Rents payable - short term lease 1 2
General administration, including staff costs 651 584
Auditors' remuneration - audit fees 44 45
Tax services 1 13
Gleeds Advisory Limited
Non-Recurring costs - costs relating to new Board appointments - 27
697 671
5. STAFF COSTS 2025 2024
£'000 £'000
Staff costs, including Directors' fees, during the year were as follows:
Wages and salaries 303 297
Social security costs 34 28
Other pension costs 35 51
372 376
Further details of Directors' emoluments, totalling £305,000 (2024:
£341,000), are shown under Directors' Emoluments in the Directors' Report and
form part of the Financial Statements. There are no other key management
personnel.
2025 2024
No. No.
The average number of employees, including Non-Executive Directors, engaged
wholly in management and administration was:
6 6
The number of Directors for whom the Company paid pension benefits
during the year was: 1 2
6. FINANCE COSTS (NET) 2025 2024
£'000 £'000
Interest payable and finance costs on bank loans 480 455
Less: Bank interest receivable 37 29
443 426
7. TAXATION 2025 2024
£'000 £'000
(a) Analysis of the tax charge for the year:
UK Corporation tax at 25% (2024: 25%)
Total current tax charge 352 238
Deferred tax - temporary differences 256 49
Tax charge for the year 608 287
(b) Factors affecting the tax charge for the year:
Net Income before taxation 2,175 1,643
Current Year:
Corporation tax thereon at 25% (2024: 25%) 544 411
Corporation tax adjustment for unrealised property value (gains)/losses (171) 1
Capital gains net tax movement on disposals - 52
Corporation tax adjustment for profit on disposals (13) 52
Capital allowances net tax movement on acquisitions (5) (226)
Deferred tax net adjustments arising from movement in property values 253 49
Total tax charge for the year 608 287
8. DIVIDENDS 2025 2024
£'000 £'000
Final dividend paid in year of 17.0p per share
(2024: Final dividend 16.0p per share) 431 405
Interim dividend paid in year of 10.0p per share
(2024: Interim dividend 9.5p per share) 270 256
701 661
On 16 June 2025 the Board resolved to pay a final dividend of 17.0p per share
which will be recorded in the Financial Statements for the year ending 25
March 2026.
9. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing Income after Taxation and
Total Comprehensive Income attributable to Ordinary Shareholders of
£1,567,000 (2024: £1,356,000) by 2,696,617 shares which is the weighted
average number of 2,696,617 (2024: 2,696,617) ordinary shares in issue during
the period excluding shares held as treasury. There are no instruments in
issue that would have the effect of diluting earnings per share.
10. INVESTMENT PROPERTIES 2025 2024
£'000 £'000
Properties
Balance at beginning of financial year 43,915 39,320
Additions 42 5,213
Disposals (1,712) (615)
Revaluation surplus / (shortfall) 665 (3)
Balance at end of financial year 42,910 43,915
The Company's freehold and one long-leasehold properties were valued as at 25
March 2025 by BNP Paribas Real Estate Advisory & Property Management UK
Limited, RICS Registered Valuers, acting in the capacity of external valuers,
and adopted by the Directors. The valuations were undertaken in accordance
with the requirements of the RICS Valuation - Global Standards 2024, effective
31 January 2025, the International Valuation Standards and the UK National
Supplement 2023, effective 1 May 2024 reissued January 2025.
The valuation of each property was on the basis of Fair Value. The valuers
reported that the total aggregate Fair Value of the properties held by the
Company was £42,910,000.
The valuer's opinions were primarily derived from comparable recent market
transactions on arms-length terms.
In the financial year ending 25 March 2025, the total fees earned by the
valuer from Wynnstay Properties PLC and connected parties were less than 5% of
the valuer's company turnover.
The valuation complies with International Financial Reporting Standards. The
definition adopted by the International Accounting Standards Board (IASB) in
IFRS 13 is Fair Value, defined as: '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.'
These recurring fair value measurements for non-financial assets use inputs
that are not based on observable market data, and therefore, fall within level
3 of the fair value hierarchy.
The most pertinent market data observed reflected net initial yields which
ranged from broadly 5.1% to 6.7% with equivalent yields estimated to range
between broadly 5.3% and 7.3% for the core industrial properties. The
portfolio as a whole, exhibits a net initial yield of 5.86% (2024: 5.89%) and
a nominal equivalent yield of 6.40% (2024: 6.31%).
There have been no transfers between levels of the fair value hierarchy.
Movements in the fair value are recognised in profit or loss.
A 0.5% decrease in the weighted equivalent yield would result in a
corresponding increase of £3.93 million in the fair value movement through
profit or loss. A 0.5% increase in the same yield would result in a
corresponding decrease of £3.35 million in the fair value movement through
profit or loss.
11. OPERATING LEASES RECEIVABLE 2025 2024 restated
The following are the future minimum lease payments receivable under £'000 £'000
non-cancellable operating leases which expire:
Not later than one year 440 271
Between 1 and 5 years 3,891 5,730
Over 5 years 2,507 2,211
6,838 8,212
Rental income under operating leases recognised through profit or loss
amounted to £2,679,000 (2024: £2,541,000).
Typically, the properties were let for a term of between 5 and 10 years at a
market rent with rent reviews every 5 years. The above maturity analysis
reflects future minimum lease payments receivable to the next break clause in
the operating lease. The properties are generally leased on terms where the
tenant has the responsibility for repairs and running costs for each
individual unit with a service charge payable to cover common services
provided by the landlord on certain properties. The Company manages the
services provided for a management fee and the service charges are not
recognised as income in the accounts of the Company as any receipts are netted
off against the associated expenditures with any residual balance being shown
as a liability.
If the tenant does not carry out its responsibility for repairs and the
Company receives a dilapidations payment, the resulting cash is recorded in
revenue as other property income unless a property has been agreed to be sold
where the receipt is treated as part of the proceeds of sale of the property.
See Note 2.
12. INVESTMENTS 2025 2024
£'000 £'000
Quoted investments 3 3
13. SUBSIDIARY COMPANY
The Company has the following dormant subsidiary which the Directors consider
immaterial to, and thus has not been consolidated into, the financial
statements. The subsidiary holds the legal title to an access road to an
investment property, the use of which is shared between the Company, its
tenants at the property and neighbouring premises.
Scanreach Limited 80%
owned Dormant Net
Assets: £4,447 (2024: £4,447)
14. ACCOUNTS RECEIVABLE 2025 2024
£'000 £'000
Trade receivables 266 285
Other receivables 78 128
344 413
Trade receivables include an adjustment for credit losses of £17,000 (2024:
£nil). Any provision for impairment of trade receivables has been set against
a specific tenant.
Trade receivables, which are the only financial assets at amortised cost, are
non-interest bearing and generally have a 15-day term. Due to their short
maturities, the carrying amount of trade and other receivables is a reasonable
approximation of their fair value.
Of the trade receivables balance at the end of the year £32,468 (2024:
£39,388) is due from the Company's largest customer. There are six other
customers who represent more than 5% of the total balance of trade
receivables.
15. ACCOUNTS PAYABLE 2025 2024
£'000 £'000
Trade payables 120 33
Other creditors 4 2
Deferred income 590 628
Amount due to subsidiary 4 4
Accruals 107 161
825 828
The average credit period taken for trade purchases is 14 days (2024: 18
days). No interest is charged on the outstanding balances. The Directors
consider that the carrying amounts of trade and other payables is a reasonable
approximation of their fair value.
16. BANK LOANS PAYABLE 2025 2024
£'000 £'000
Non-current loans 9,977 10,843
In December 2021, a five-year Fixed Rate Facility of £10 million and a
Revolving Credit Facility of £5.0 million were entered into providing a total
committed credit facility of £15.0 million. Interest on loan amounts drawn
down under the Fixed Rate Facility of £10 million (2024: £10 million) is
charged at 3.61% per annum (2024: 3.61%) for the year ended 25 March 2025.
Loan arrangement fees amortised over the loan period amounted to £34,000
(2024; £15,000). Loan amounts drawn down under the Revolving Credit Facility
during the year amounted to £nil (2024: £950,000). Prior period net
drawdowns of £900,000 were repaid in the current period (2024: £nil) and the
amortised balance drawn as at 25 March 2025 is £nil (2024: £879,000). The
Company has the right to defer settlement of the liability under the Revolving
Credit Facility for at least twelve months after the reporting period.
Both facilities are repayable in one instalment on 17 December 2026. The
facilities include the following financial covenants which were complied with
during the year:
• Rental income shall not be less than 2.25 times the interest costs.
• The drawn balance shall at no time exceed 50% of the market value
of the properties secured.
The facilities are secured by fixed charges over freehold land and buildings
owned by the Company, which at the year-end had a combined value of
£34,405,000 (2024: £35,790,000). The undrawn element of the facilities
available at 25 March 2025 was £5,000,000 (2024: £4,100,000).
Interest charged under the Revolving Credit Facility is linked to Bank of
England Base Rate as the reference rate.
17. DEFERRED TAX 2025 2024
£'000 £'000
Deferred Tax brought forward 2,083 2,034
Charged for the year 255 49
Deferred Tax carried forward 2,338 2,083
A deferred tax liability of £2,338,000 (2024: £2,083,000) is recognised in
respect of the investment properties and has been calculated at a tax rate of
25% (2024: 25%).
18. SHARE CAPITAL 2025 2024
£'000 £'000
Authorised
8,000,000 Ordinary Shares of 25p each: 2,000 2,000
Allotted, Called Up and Fully Paid
3,155,267 Ordinary shares of 25p each: 789 789
All shares rank equally in respect of shareholder rights.
In March 2010, the Company acquired 443,650 Ordinary Shares of Wynnstay
Properties PLC from Channel Hotels and Properties Ltd at a price of £3.50 per
share. On 19 July 2022, shareholders granted authority to make market
purchases of its shares for a period of five years from that date. Pursuant to
this share buyback authority, in September 2022, the Company acquired 15,000
Ordinary Shares of Wynnstay Properties PLC at a price of £7.10 per share,
representing less than 0.005 % of the issued share capital, with the aggregate
consideration paid for the shares being £106,500. The total cost of
establishing the share buyback authority, together with this acquisition, was
£164,000. The total of 458,650 shares acquired, representing 14.5% of the
total shares in issue, are held in treasury. As a result, the total number of
shares with voting rights is 2,696,617.
19. FINANCIAL INSTRUMENTS
The objective of the Company's policies is to manage the Company's financial
risk, secure cost-effective funding for the Company's operations and minimise
the adverse effects of fluctuations in the financial markets on the value of
the Company's financial assets and liabilities, on reported profitability and
on the cash flows of the Company.
As at 25 March 2025 the Company's financial instruments comprised borrowings,
cash and cash equivalents, quoted investments, short term receivables and
short-term payables. The main purpose of these financial instruments was to
raise finance for the Company's operations. Throughout the period under
review, the Company has not traded in any other financial instruments. The
Board reviews and agrees policies for managing each of the associated risks
and they are summarised below:
Credit Risk
The risk of financial loss due to a counterparty's failure to honour its
obligations arises principally in connection with property leases and the
investment of surplus cash.
Tenant rent payments are monitored regularly, and appropriate action is taken
to recover monies owed or, if necessary, to terminate the lease. The Company
carefully vets prospective new tenants from a credit risk perspective. Bad
debts are mitigated by close engagement with tenant businesses within a
well-diversified mix of some 93 units across the portfolio and close
monitoring of rental income receipts. The Company regularly reviews the
portfolio, including feedback from engagement with tenants, in order to assess
the risk of tenant failures. In addition, the Company obtains credit reports
on significant tenants on a regular basis. Credit reports can be seen on all
tenants upon request, but the focus of the Board is on the top 10 tenants by
amount and any tenants showing delayed rent payments.
The Company has no significant concentration of credit risk associated with
trading counterparties (considered to be over 5% of net assets) with exposure
spread over a large number of tenancies. In terms of concentration of
individual tenant's rents versus total gross annual passing rents the Company
has 3 tenants whose rent, on an individual basis, is between 5.0% and 7.8% of
total gross annual passing rents.
Funds are invested and loan transactions contracted only with banks and
financial institutions with a high credit rating. Concentration of credit risk
exists to the extent that as at 25 March 2025 and 2024 current account and
short-term deposits were held with two financial institutions, Handelsbanken
PLC and C Hoare & Co. The combined exposure to credit risk on cash and
cash equivalents at 25 March 2025 was £1,732,000 (2024: £397,000).
Currency Risk
As all of the Company's assets and liabilities are denominated in Pounds
Sterling, there is no exposure to currency risk.
Interest Rate Risk
The Company is exposed to interest rate risk that could affect cash flow as it
currently borrows at both floating and fixed interest rates. The Company
monitors and manages its interest rate exposure on a periodic basis but does
not take out financial instruments to mitigate the risk. The Company finances
its operations through a combination of retained profits and bank borrowings.
Liquidity Risk
The Company seeks to manage liquidity risk to ensure sufficient funds are
available to meet the requirements of the business and to invest cash assets
safely and profitably. The Board regularly reviews available cash balances and
cash forecasts to ensure there are sufficient resources for working capital
requirements and to maintain an adequate cash margin.
Interest Rate Sensitivity
Financial instruments affected by interest rate risk include loan borrowings
and cash deposits. The analysis below shows the sensitivity of the statement
of comprehensive income and equity to a 0.5% change in interest rates:
0.5% decrease 0.5% increase
in interest rates in interest rates
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Impact on interest payable - gain/(loss) - 5 - (5)
Impact on interest receivable - (loss)/gain (9) (2) 9 2
Total impact on pre-tax profit and equity (9) 3 9 (3)
The calculation of the net exposure to interest rate fluctuations was based on
the following as at 25 March:
2025 2024
£'000 £'000
Floating rate borrowings (bank loans) - 879
Less: cash and cash equivalents (1,732) (397)
(1,732) 482
Carrying Amounts of Financial Instruments
Management believes the carrying amounts of most financial assets and
financial liabilities on the balance sheet represent a reasonable
approximation of their value. The classification and measurement of financial
instruments are performed in accordance with IFRS 9 'Financial Instruments'.
Exceptions to this approach, if any, are detailed below.
Fixed-Rate Borrowings
It is important to note that the carrying amounts of fixed-rate borrowings
might not always reflect their fair value due to changes in market interest
rates.
Financial assets 2025 2024
£'000 £'000
Quoted investments measured at fair value 3 3
Loans and receivables measured at amortised cost 264 285
Cash and cash equivalents measured at amortised cost 1,732 397
Total financial assets 1,999 685
Financial liabilities at amortised cost 9,977 10,843
Total liabilities 10,697 11,671
The only financial instruments measured subsequent to initial recognition at
fair value as at 25 March are quoted investments. These are included in level
1 in the IFRS 13 fair value hierarchy as they are based on quoted prices in
active markets.
Capital Management
The primary objectives of the Company's capital management are:
• to safeguard the Company's ability to continue as a going concern, so
that it can continue to provide returns for
shareholders; and
• to enable the Company to respond quickly to changes in market conditions
and to take advantage of opportunities.
Capital comprises shareholders' equity plus net borrowings. The Company
monitors capital using loan to value and gearing ratios. The former is
calculated by reference to total debt as a percentage of the year end
valuation of the investment property portfolio. Gearing ratio is the
percentage of net borrowings divided by shareholders' equity. Net borrowings
comprise total borrowings less cash and cash equivalents. The Company's policy
is that the net loan to value ratio should not exceed 50% and the gearing
ratio should not exceed 100%.
2025 2024
£'000 £'000
Loans and overdraft 9,977 10,843
Cash and cash equivalents (1,732) (397)
Net borrowings 8,245 10,446
Shareholders' equity 31,493 30,627
Investment properties 42,910 43,915
Loan to value ratio 23.3% 24.7%
Net borrowings to value ratio 19.2% 23.8%
Gearing ratio 26.2% 34.1%
20. RELATED PARTY TRANSACTIONS
Related Party Transactions with the Directors have been disclosed under
Directors' Emoluments in the Directors' Report on page 28 of the Annual
Report. There were no other Related Party Transactions during the year (2024:
£1,600).
21. SEGMENTAL REPORTING
The Chief Operating Decision Maker ('CODM'), who is responsible for the
allocation of resources and assessing performance of the operating segments,
has been identified as the Board. IFRS 8 requires operating segments to be
identified on the basis of internal reports that are regularly reviewed by the
Board. The Board have reviewed the segmental information and concluded that
there are three operating segments.
Industrial Retail Office Total
2025 2024 2025 2024 2025 2024 2025 2024
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Rental Income 2,569 2,332 47 73 63 136 2,679 2,541
Other Property Income 14 58 - - - - 14 58
Profit /(Loss) on investment property at fair value 693 232 (10) (75) - (160) 683 (3)
Total income and gain 3,276 2,622 37 (2) 63 (24) 3,376 2,596
Property expenses (92) (138) - - (21) - (113) (138)
Segment profit/(loss) 3,184 2,484 37 (2) 42 (24) 3,263 2,458
Unallocated corporate expenses (697) (671)
Profit on sale of 52 282
investment property
Operating income 2,618 2,069
Interest expense (all relating to property loans) (480) (455)
Interest income and 37 29
other income
Income before taxation 2,175 1,643
Industrial Retail Office Total
Other information
2025 2024 2025 2024 2025 2024 2025 2024
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Segment assets 42,420 41,685 490 830 - 1,400 42,910 43,915
Segment assets held 34,155 33,560 490 830 - 1,400 34,645 35,790
as security
Office property held at the end of the period was £nil (2024: £1,400,000)
following the sale of the office building at Cosham.
22. CAPITAL COMMITMENTS
Significant capital expenditure contracted for at the end of the financial
year, but not recognised as liabilities in the financial
statements is: £nil (2024: £nil).
23. SUBSEQUENT EVENTS
On 16 May 2025 the Company exchanged contracts for the acquisition of the
freehold property comprising a terrace of five units at Units 3-7, Pembroke
Avenue, Denny End Industrial Estate, Waterbeach, Cambridge, CB25 9QP for an
aggregate cash consideration of £2,770,880. The total cost of the
acquisition, which includes stamp duty land tax and due diligence fees, is
anticipated to be approximately £2.95 million. The acquisition was
completed on 30 May 2025.
NOTE
The financial information set out in this announcement does not constitute
statutory accounts as defined in section 435 of the Companies Act 2006.
Accordingly pursuant to section 435(2), this announcement does not include the
auditor's report on the statutory accounts.
However, the financial information for the year ended 25 March 2025 contained
in the announcement is taken directly from the statutory accounts for that
year. The auditors reported on those accounts; their report was unqualified
and did not contain a statement under either Section 498 (2) or Section 498
(3) of the Companies Act 2006 and did not include references to any matters to
which the auditor drew attention by way of emphasis.
The statutory accounts for the year ended 25 March 2025 have not yet been
delivered to the Registrar of Companies. The 2025 accounts will be delivered
to the Registrar of Companies following the Company's Annual General Meeting.
The statutory accounts for the year ended 25 March 2024 and for the prior
years referred to in this announcement have been delivered to the Registrar of
Companies. The auditors reported on those accounts; their reports were
unqualified and did not contain a statement under either Section 498 (2) or
Section 498 (3) of the Companies Act 2006 and did not include references to
any matters to which the auditor drew attention by way of emphasis.
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