17 Dec 2018 07:00
17 December 2018
Circle Property Plc
("Circle" or the "Company")
Interim Results show continued strong NAV and income growth
Circle Property Plc (AIM: CRC), the specialist regional UK office investment and development company today announces its results for the six months to 30 September 2018. The results show a continuation of the strong asset management led total returns that the Company has achieved since IPO in February 2016.
Financial highlights
· NAV per share up 30.33% to £2.75 (30 September 2017: £2.11), representing a 19.80% uplift since 31 March 2018 (£2.30p). The Company's NAV has now increased by 84.56% since IPO in February 2016.
· Portfolio valuation up 12.37% to £124.8m (31 March 2018: £111.13m).
· Since IPO, Circle has delivered a NAV compound average growth rate of 29.5% and a total return compound average growth rate of 32.1%.
· 9.9% increase in annualised contracted rental income to £7.51m (31 March 2018: £6.83m). A further £214,582 of contracted rent has been signed since the period end.
· 25.2% increase in net rental income to £3.80m (30 September 2017: £3.01m).
· 60% increase in profit before tax to £13.80m (30 September 2017: £8.6m).
· 28% increase in net operating profit to £2.30m excluding gains on investment properties (30 September 2017: £1.80m).
· Due to investment sales above valuation and valuation uplifts, LTV has reduced to 40% (31 March 2018: 45.5%).
· Interim dividend of 3.0p per share, which maintains the level of dividend paid for the previous reporting period. This dividend will be paid on 31 January 2019 to shareholders on the register on 28 December 2018 with an ex-dividend date of 27 December 2018.
Operational highlights
· The Company's current redevelopment and refurbishment pipeline is now complete, with Somerset House, providing 38,805 sq ft (10.33% of the Company's asset total office floor area) completed and let within the last 12 months. BE Offices' fit-out of Somerset House is expected to be complete in Spring 2019 with one third of the space already reserved for licensees of the serviced office operator.
· Portfolio occupancy of 90%
· WAULT of 10.15 years to break (31 March 2018: 7.24 years) and 11.07 years (31 March 2018: 10.50 years) to expiry.
· Leasing momentum continues on competitive terms:
· In July 2018, ALD Automotive Ltd leased 5,400 sq ft in Park House, Northampton at a rent of £77,462 per annum (£14.32 psf) for a 10-year term with a five-year tenant break.
· Two new five-year leases completed at 36 Great Charles Street Birmingham, for a combined annual headline rent of £93,264, before incentives. In June 2018, Vectos Microsim Ltd took the 1,253 sq ft rear suite of the seventh floor and in July 2018, Shaw Trust leased the 3,600 sq ft first floor.
· In September, a lease variation was completed with the Company's largest tenant, Compass Contract Services Limited (part of Compass Group) at Kents Hill Park, Milton Keynes, whereby the 15 and 20 year break options on a 25 year lease were removed, whilst the 3% per annum fixed rental increases were replaced by annual RPI increases.
· In November 2018 (post period end) the remaining 13,500 sq ft on the ground floor at K2 Kents Hill Business Park, Milton Keynes was let to Deutsche Telekom subsidiary, T-Systems Ltd, at £214,582 pa (£15.50 per sq ft) on a 10-year term with tenant break at the fifth year.
Portfolio restructuring and disposal programme
· In line with the Company's strategy of disposing of legacy non-core assets and focusing its portfolio on the undersupplied regional office market, a petrol filling station let to the Co-Operative Group in Amesbury was sold to an institutional investor for £3.5m in July 2018, representing an 18.64% uplift on the 31 March 2018 valuation. The sale was simultaneous with the completion of a lease extension from 2 to 15 years, without breaks.
· In November 2018, two shops let to Morrisons and A-Plan Insurance in Week Street, Maidstone were disposed of for £1.35m, in line with the valuation.
John Arnold, CEO of Circle Property Plc, commented:
"Circle's continued focus on the active management of its regional office assets, particularly the leasing of space in the redevelopment and refurbishment pipeline, has once again delivered strong portfolio valuation growth and strengthened the Company's income profile during the first half of the year.
This has been achieved despite the increased levels of hesitation in signing new tenancies, which we believe largely results from the nervousness created by extended uncertainty surrounding Brexit negotiations. However, as anticipated, this has led to a number of buying opportunities emerging and we are finding more off-market deals as a result.
As a consequence of our active asset management, we are also pleased to have disposed of non-core assets at or above valuation.
We have continued to sign tenants since the period end which gives us confidence in our ability to lease the remaining vacant space in the portfolio, adding further income and value to our assets."
ENDS
This announcement is inside information for the purposes of Article 7 of EU Regulation 596/2014.
Circle Property Plc | +44 (0)20 7930 8503 |
John Arnold, CEO Edward Olins, COO |
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Cenkos Securities plc | +44 (0) 20 7397 8900 |
Azhic Basirov Katy Birkin
Radnor Capital Joshua Cryer Iain Daly
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+44 (0) 20 3897 1830 |
FTI Consulting | +44 (0)20 3727 1000 |
Giles Barrie Richard Sunderland Eve Kirmatzis | Circle@fticonsulting.com |
Chief Executive's Statement
We have had another strong start to the year building on the momentum achieved in the previous reporting periods and delivering on the strategy we set out at the time of the IPO. Our efforts have translated to significant growth in NAV and portfolio valuation. Further increases to contracted rent roll, as well as double-digit net rental income growth, combined with an extension of the average lease length to over 11 years have resulted in the portfolio generating higher quality and more visible income to underpin the Company's dividend.
We have now completed the Company's current redevelopment and refurbishment programme and our focus is now firmly on both leasing the remaining 10% of the portfolio which was vacant at the end of the period and continuing to explore ways to grow the Company.
In terms of leasing up space, we have made good progress after a strong first half, with additional lets occurring since the period end. The fact that our stock selection and asset management programme means we are able to offer well located and recently refurbished high quality space at competitive rents, combined with the ongoing decline in regional office supply due to residential conversion permitted development rights, gives us confidence in our ability to continue to attract tenants.
In addition to creating value and income through leasing vacant space, we will also continue to undertake initiatives that allow us to drive returns from our leased stock such as through the lease re-gear we agreed at Kents Hill Park, Milton Keynes, which resulted in Circle securing a 25 year RPI linked lease without break with the tenant.
With this established strong platform we continue to assess ways to grow the Company including refinancing with our existing and other lenders, as well as potentially seeking capital from new investors. We will also continue to dispose of our non-core legacy assets, with further progress made in this regard early in the second half, as well as selectively disposing of our standing assets where we receive a compelling offer. Both of these initiatives would provide us with capital to reinvest into opportunities where we believe we can create greater returns by applying our asset management skills.
Portfolio overview
Kents Hill Park
In November 2018, we completed a letting to Deutsche Telekom subsidiary, T-Systems Ltd, at £214,582 per annum on the remaining ground floor area. With 50% of the building now let, we are pleased with the level of interest in the remaining space. Once we make further progress in the lettings, we intend to take back K3 from the tenant to undertake a further refurbishment.
Somerset House
The office refurbishment has completed and are let entirely to BE Group Limited, a serviced office provider, at an annual rent of £795,729. The two ground floor restaurant units are let to Las Iguanas and Camerons Brewery at a combined annual rental of £395,000.
Great Charles Street, Birmingham
36 Great Charles Street, Birmingham, is being marketed and during the reporting period, we let two offices totalling 4,853 sq ft to Vectos Microsim and the Shaw Trust. The combined annual headline rent is £93,264 before incentives. We still have half of the building available to let, with 12,638 sq ft available in four floors which are highly divisible to suit current occupancy trends.
One Castlepark, Tower Hill Bristol
Refurbishment of the 2nd floor north comprising 6,351 sq ft has completed following the JISC surrender of the second floor suite and re-grant of the third floor at almost double the rent per sq ft previously passing.
135 Aztec West, Bristol
We are preparing for a comprehensive refurbishment of this 13,258 sq ft property as our tenant only has one year remaining on their lease where the current rent equated to only £13.20 p.s.f. The current rental value, post refurbishment is likely to exceed £20 per sq. ft.
Outlook
This time last year we reported that there had been a slowdown in the wider lettings market which, as mentioned above, remains the case today and we do not expect a return to normality until the uncertainty around the country's divorce from the EU is clarified. Despite this, the location and quality of our refurbished assets has been proven and we have continued to lease existing space. With our refurbishment programme complete and with less than 8% portfolio vacancy, we would not expect the same significant period-on-period return in the second half of 2018 onwards, from the current portfolio.
However, we continue to look for acquisition opportunities and are confident that the platform and track record we have established since IPO, having delivered a total return compound average growth rate of 32.1% stands us in good stead to continue to deliver shareholder value in the future.
Dividend Announcement
The Board declares an interim dividend of 3.0 pence per share, which maintains the level of dividend paid for the previous reporting period. This dividend will be paid on 31 January 2019 to shareholders on the register on 28 December 2018 with an ex-dividend date of 27 December 2018.
Circle Property Plc |
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Condensed consolidated statement of comprehensive income |
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for the 6 months ended 30 September 2018 |
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| 6 months to30 September2018 |
| 6 months to30 September2017 |
| 12 months to31 March2018 |
| Note |
| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Rental income | 4 |
| 3,644,353 |
| 2,943,673 |
| 6,211,820 |
Other income | 4 |
| 157,473 |
| 92,736 |
| 142,585 |
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| 3,801,826 |
| 3,036,409 |
| 6,354,405 |
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Property expenses | 5 |
| (277,512) |
| (425,210) |
| (831,189) |
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Net rental income |
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| 3,524,314 |
| 2,611,199 |
| 5,523,216 |
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Administrative expenses | 6 |
| (1,250,374) |
| (801,185) |
| (2,368,220) |
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Operating profit before gains on investment properties |
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| 2,273,940 |
| 1,810,014 |
| 3,154,996 |
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Gains on disposal of investment properties |
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| 494,933 |
| - |
| 1,497 |
Gains on revaluation of investment properties | 11 |
| 11,733,347 |
| 7,307,151 |
| 11,980,810 |
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Operating profit |
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| 14,502,220 |
| 9,117,165 |
| 15,137,303 |
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Finance income | 7 |
| 2,056 |
| 1,293 |
| 3,620 |
Finance costs | 8 |
| (738,061) |
| (553,225) |
| (1,149,720) |
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Net finance costs |
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| (736,005) |
| (551,932) |
| (1,146,100) |
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Profit for the period before taxation |
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| 13,766,215 |
| 8,565,233 |
| 13,991,203 |
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Taxation | 9 |
| (227,372) |
| 99,030 |
| 534,864 |
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Profit after taxation |
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| 13,538,843 |
| 8,664,263 |
| 14,526,067 |
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Earnings per share | 10 |
| 0.48 |
| 0.31 |
| 0.51 |
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NAV per share |
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| 2.75 |
| 2.11 |
| 2.30 |
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There is no comprehensive income other than that included in the profit for the period. All of the profit for the period is attributable to the owners of the Company. | |||||||
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All items in the above statement derive from continuing operations. |
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The accompanying notes form an integral part of these condensed consolidated interim financial statements. | |||||||
Condensed consolidated statement of financial position |
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as at 30 September 2018 |
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| Note |
| 30 September 2018 |
| 30 September 2017 |
| 31 March2018 |
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| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
Non-current assets |
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Investment properties | 11 |
| 115,750,716 |
| 96,287,600 |
| 106,372,636 |
Property plant and equipment |
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| 49,883 |
| 26,080 |
| 56,287 |
Trade and other receivables | 12 |
| 8,516,589 |
| 6,768,045 |
| 7,201,845 |
Deferred tax |
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| 1,482,055 |
| 1,314,814 |
| 1,727,959 |
Financial instruments at fair value through profit and loss |
| - |
| 86 |
| - | |
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| 125,799,243 |
| 104,396,625 |
| 115,358,727 |
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Current assets |
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Trade and other receivables | 12 |
| 1,242,391 |
| 1,352,137 |
| 1,141,191 |
Deferred tax |
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| 165,388 |
| 148,626 |
| - |
Cash and cash equivalents |
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| 3,014,269 |
| 5,161,605 |
| 2,639,783 |
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| 4,422,048 |
| 6,662,368 |
| 3,780,974 |
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Total assets |
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| 130,221,291 |
| 111,058,993 |
| 119,139,701 |
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Equity |
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Stated capital |
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| 42,542,179 |
| 42,542,179 |
| 42,542,179 |
Treasury share reserve |
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| (77,486) |
| (380,001) |
| (257,487) |
Retained earnings |
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| 35,404,032 |
| 17,588,004 |
| 22,714,092 |
Total equity |
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| 77,868,725 |
| 59,750,182 |
| 64,998,784 |
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Non-current liabilities |
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Borrowings | 13 |
| 50,100,845 |
| 48,800,835 |
| 51,815,616 |
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| 50,100,845 |
| 48,800,835 |
| 51,815,616 |
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Current liabilities |
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Trade and other payables | 14 |
| 2,251,721 |
| 2,507,976 |
| 2,325,301 |
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| 2,251,721 |
| 2,507,976 |
| 2,325,301 |
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Total liabilities |
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| 52,352,566 |
| 51,308,811 |
| 54,140,917 |
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Total liabilities and equity |
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| 130,221,291 |
| 111,058,993 |
| 119,139,701 |
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The condensed consolidated interim financial statements were approved by the Board of Directors on 14 December 2018. | |||||||
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The accompanying notes form an integral part of these condensed consolidated interim financial statements. | |||||||
Condensed consolidated statement of cash flows |
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for the 6 months ended 30 September 2018 |
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| 6 months to30 September2018 |
| 6 months to30 September2017 |
| 12 months to31 March2018 |
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| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Cash flows from operating activities |
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Profit for the period before taxation |
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| 13,766,215 |
| 8,565,233 |
| 13,991,203 |
Adjustments for: |
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Finance income |
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| (2,056) |
| (1,293) |
| (3,620) |
Finance expense |
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| 738,061 |
| 553,225 |
| 1,149,720 |
Depreciation |
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| 6,404 |
| 3,077 |
| 7,405 |
Gains on revaluation of investment properties |
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| (11,733,347) |
| (7,307,151) |
| (11,980,810) |
Gains on disposal of investment properties |
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| (494,933) |
| - |
| (1,497) |
Share based payments |
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| 180,001 |
| - |
| 122,514 |
Amortisation of loan arrangement fees |
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| 35,229 |
| 29,406 |
| 44,188 |
Fair value movement on interest rate swaps |
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| - |
| 625 |
| 710 |
(Increase) in trade and other receivables |
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| (1,415,944) |
| (406,733) |
| (293,097) |
(Decrease)/increase in trade and other payables |
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| (155,751) |
| (113,253) |
| 141,050 |
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Cash generated from operating activities |
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| 923,879 |
| 1,323,136 |
| 3,177,766 |
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Interest and other finance costs paid |
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| (695,358) |
| (553,312) |
| (1,116,591) |
Interest received |
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| 2,056 |
| 1,293 |
| 3,620 |
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Net cash from operating activities |
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| 230,577 |
| 771,117 |
| 2,064,795 |
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Cash flows from investing activities |
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Cost of refurbishment of investment properties |
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| (702,121) |
| (2,948,608) |
| (4,528,703) |
Cost of acquisition of investment property |
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| - |
| - |
| (4,466,652) |
Proceeds from disposal of investment properties |
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| 3,444,933 |
| - |
| 1,497 |
Cost of additions of property plant and equipment |
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| - |
| - |
| (34,534) |
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Net cash from investing activities |
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| 2,742,812 |
| (2,948,608) |
| (9,028,392) |
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Cash flows from financing activities |
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Repayment of borrowings |
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| (1,750,000) |
| - |
| - |
Drawdown of borrowings |
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| - |
| 3,181,005 |
| 6,181,005 |
Dividends paid |
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| (848,903) |
| (735,716) |
| (1,471,432) |
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Net cash used in financing activities |
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| (2,598,903) |
| 2,445,289 |
| 4,709,573 |
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Net increase / (decrease) in cash and cash equivalents |
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| 374,486 |
| 267,798 |
| (2,254,024) |
Cash and cash equivalents at the beginning of the period |
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| 2,639,783 |
| 4,893,807 |
| 4,893,807 |
Cash and cash equivalents at the end of the period |
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| 3,014,269 |
| 5,161,605 |
| 2,639,783 |
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The accompanying notes form an integral part of these condensed consolidated interim financial statements. | |||||||
Condensed consolidated statement of changes in equity |
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for the 6 months ended 30 September 2018 |
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| Sharecapital |
| Treasury shares reserve |
| Retained earnings |
| Total |
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| £ |
| £ |
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| £ |
As at 1 April 2017 |
| 42,542,179 |
| (380,001) |
| 9,659,457 |
| 51,821,635 |
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Profit for the period |
| - |
| - |
| 8,664,263 |
| 8,664,263 |
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Dividends |
| - |
| - |
| (735,716) |
| (735,716) |
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As at 30 September 2017 |
| 42,542,179 |
| (380,001) |
| 17,588,004 |
| 59,750,182 |
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Profit for the period |
| - |
| - |
| 5,861,804 |
| 5,861,804 |
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Share-based payments |
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| 122,514 |
| - |
| 122,514 |
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Dividends |
| - |
| - |
| (735,716) |
| (735,716) |
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As at 31 March 2018 |
| 42,542,179 |
| (257,487) |
| 22,714,092 |
| 64,998,784 |
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Profit for the period |
| - |
| - |
| 13,538,843 |
| 13,538,843 |
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Share-based payments |
| - |
| 180,001 |
| - |
| 180,001 |
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Dividends |
| - |
| - |
| (848,903) |
| (848,903) |
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As at 30 September 2018 |
| 42,542,179 |
| (77,486) |
| 35,404,032 |
| 77,868,725 |
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The accompanying notes form an integral part of these condensed consolidated interim financial statements. | ||||||||
Notes to the condensed consolidated interim financial statements |
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for the 6 months ended 30 September 2018 |
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1 General information |
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These condensed consolidated interim financial statements are for Circle Property Plc ("the Company") and its subsidiary undertakings (together referred to as the "Group"). | |||||||
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The Company's shares are admitted to trading on AIM, a market operated by the London Stock Exchange plc. The Company is domiciled and registered in Jersey, Channel Islands. The address of its registered office is 3rd Floor, Standard Bank House, 47-49 La Motte Street, St Helier, Jersey, JE2 4SZ. | |||||||
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The nature of the Company's operations and its principal activities are that of property investment in the UK. | |||||||
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2 Principal accounting policies |
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Basis of accounting |
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The condensed consolidated interim financial statements have been prepared in accordance with the IAS 34 "Interim Financial Reporting", and should be read in conjunction with the Group's last consolidated financial statements as at and for the year ended 31 March 2018. They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last financial statements. | |||||||
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Going concern |
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The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chief Executive's statement. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in these financial statements. | |||||||
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The Group has adequate financial resources together with long term rental contracts with a wide range of tenants. As a consequence, the Directors believe that the Group is well placed to manage its business risk successfully. | |||||||
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The Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they have adopted the going concern basis in preparing the interim financial statements. | |||||||
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Estimates and judgements |
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In preparing these condensed consolidated interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. | |||||||
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The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 March 2018. | |||||||
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3 Operating segments |
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During the period the Group operated in one geographical segment, which is the United Kingdom, and one reporting segment, which is investment in commercial property. Therefore no segmental reporting is required. | |||||||
4 Revenue |
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| 6 months to30 September2018 |
| 6 months to30 September2017 |
| 12 months to31 March2018 |
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|
| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Rental income |
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| 3,122,433 |
| 2,676,937 |
| 5,816,610 |
SIC 15 adjustment (spreading of lease incentives) |
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| 521,920 |
| 266,736 |
| 395,210 |
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| 3,644,353 |
| 2,943,673 |
| 6,211,820 |
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Insurance recovery |
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| 63,473 |
| 48,053 |
| 99,398 |
Other income |
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| 94,000 |
| 44,683 |
| 43,187 |
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| 157,473 |
| 92,736 |
| 142,585 |
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| 3,801,826 |
| 3,036,409 |
| 6,354,405 |
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5 Property expenses |
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| 6 months to30 September2018 |
| 6 months to30 September2017 |
| 12 months to31 March2018 |
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| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Property expenses |
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| 41,149 |
| 140,501 |
| 318,002 |
Property service charges |
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| 88,343 |
| 144,397 |
| 259,588 |
Property repairs and maintenance costs |
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| - |
| 13,376 |
| 29,532 |
Property insurance |
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| 74,967 |
| 62,496 |
| 130,328 |
Property rates |
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| 73,053 |
| 39,440 |
| 68,739 |
Lease variation costs |
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| - |
| 25,000 |
| 25,000 |
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| 277,512 |
| 425,210 |
| 831,189 |
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6 Administrative expenses |
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| 6 months to30 September2018 |
| 6 months to30 September2017 |
| 12 months to31 March2018 |
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| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Staff costs |
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| 559,987 |
| 397,675 |
| 1,321,982 |
Administration fees |
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| 127,307 |
| 124,248 |
| 250,309 |
Legal and professional fees |
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| 468,441 |
| 210,474 |
| 504,856 |
Audit fees |
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| 2,004 |
| 1,300 |
| 51,875 |
Accountancy fees |
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| 2,593 |
| 3,221 |
| 7,648 |
Rent, rates and other office costs |
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| 32,281 |
| 31,533 |
| 63,909 |
Other overheads |
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| 51,357 |
| 29,657 |
| 160,236 |
Depreciation of tangible fixed assets |
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| 6,404 |
| 3,077 |
| 7,405 |
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| 1,250,374 |
| 801,185 |
| 2,368,220 |
7 Finance income |
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| 6 months to30 September2018 |
| 6 months to30 September2017 |
| 12 months to31 March2018 |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Bank interest |
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| 2,056 |
| 1,293 |
| 3,620 |
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| 2,056 |
| 1,293 |
| 3,620 |
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8 Finance costs |
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| 6 months to30 September2018 |
| 6 months to30 September2017 |
| 12 months to31 March2018 |
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|
| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Loan interest |
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| 682,116 |
| 512,518 |
| 1,073,998 |
Loan commitment fees |
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| 20,716 |
| 10,676 |
| 15,824 |
Loan arrangement fees |
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| 35,229 |
| 29,406 |
| 59,188 |
Fair value movement on interest rate swaps |
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| - |
| 625 |
| 710 |
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| 738,061 |
| 553,225 |
| 1,149,720 |
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9 Taxation |
|
| 6 months to30 September2018 |
| 6 months to30 September2017 |
| 12 months to31 March2018 |
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| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Current tax |
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| 146,856 |
| 171,315 |
| (77,031) |
Over provision of current tax in prior year |
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| - |
| (77,031) |
| - |
Deferred tax charge / (credit) |
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| 80,516 |
| 57,942 |
| (457,833) |
Under provision of deferred tax credit in prior year |
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| - |
| (251,256) |
| - |
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| 227,372 |
| (99,030) |
| (534,864) |
10 Earnings per share |
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Basic earnings per share has been calculated on profit after tax attributable to ordinary shareholders for the period (as shown on the condensed consolidated statement of comprehensive income) and the weighted average number of ordinary shares in issue during the period. | |||||||
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| 6 months to30 September2018 |
| 6 months to30 September2017 |
| 12 months to31 March2018 |
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| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Profit for the period |
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| 13,538,843 |
| 8,664,263 |
| 14,526,067 |
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Weighted average number of shares |
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| 28,296,762 |
| 28,296,762 |
| 28,296,792 |
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Earnings per ordinary share: |
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| 0.48 |
| 0.31 |
| 0.51 |
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In the opinion of the Board, treasury shares held to satisfy share awards to management currently do not have any material value and hence do not have any dilutive effect. Therefore no diluted earnings per share has been presented. | |||||||
11 Investment properties |
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| 30 September 2018 |
| 30 September 2017 |
| 31 March2018 |
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|
| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Balance brought forward |
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| 114,075,000 |
| 93,025,000 |
| 93,025,000 |
Cost of refurbishment of investment properties |
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| 594,733 |
| - |
| 4,207,328 |
Cost of acquisition of investment property |
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| - |
| 2,926,114 |
| 4,466,652 |
Disposal of investment properties |
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| (2,950,000) |
| - |
| - |
Gains on revaluation of investment properties |
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| 11,733,347 |
| 7,307,151 |
| 11,980,810 |
Lease incentive amortisation |
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| 1,421,920 |
| 266,735 |
| 395,210 |
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Fair value of investment properties per valuation report |
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| 124,875,000 |
| 103,525,000 |
| 114,075,000 |
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Unamortised lease incentives |
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| (9,124,284) |
| (7,237,400) |
| (7,702,364) |
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Closing fair value |
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| 115,750,716 |
| 96,287,600 |
| 106,372,636 |
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The fair value of the Group's investment properties per the Valuation Report amounted to £124,875,000. The difference between the fair value of the investment properties per the Valuation Report and the fair value per the balance sheet of £9,124,284 relates to unamortised lease incentives which are recorded in the financial statements within non-current and current assets. | |||||||
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The Group has pledged all of its investment properties to secure banking facilities granted to the Group as detailed in note 13. | |||||||
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The fair value of the Group's investment properties at 30 September 2018 has been arrived at on the basis of valuation carried out by Savills (UK) Limited. The valuation was carried out in accordance with the Practice Statements contained in the Appraisal and Valuation Standards as published by the RICS. In forming their opinion of the fair value, the independent valuer's had regard to the current best use of the property, its investment attributes and recent comparable transactions. The valuation was carried out using the "All Risks Yield" method taking into consideration both sales and rental evidence and formulating the opinion of market value taking into account the properties' locations, specifications and specific characteristics. | |||||||
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During the period the Group disposed of the property at Solstice Park, Amesbury for a consideration of £3,500,000. | |||||||
12 Trade and other receivables |
|
| 30 September 2018 |
| 30 September 2017 |
| 31 March2018 |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
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| £ |
| £ |
| £ |
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Non-current |
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Lease incentives |
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| 8,516,589 |
| 6,768,045 |
| 7,201,845 |
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Current |
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Lease incentives |
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| 607,695 |
| 469,355 |
| 500,519 |
Amounts due from property agents |
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| 104,822 |
| 92,421 |
| 147,689 |
Amounts due from tenants |
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| 384,760 |
| 173,707 |
| 127,930 |
VAT |
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| - |
| 463,076 |
| 167,227 |
Other receivables |
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| 145,114 |
| 153,578 |
| 197,826 |
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|
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| 1,242,391 |
| 1,352,137 |
| 1,141,191 |
13 Borrowings |
|
| 30 September 2018 |
| 30 September 2017 |
| 31 March2018 |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
|
| £ |
| £ |
| £ |
|
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Brought forward |
|
| 51,901,360 |
| 45,720,355 |
| 45,720,355 |
Loan repayments |
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| (1,750,000) |
| - |
| - |
Loan drawdowns |
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| - |
| 3,181,005 |
| 6,181,005 |
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Facility drawn down |
|
| 50,151,360 |
| 48,901,360 |
| 51,901,360 |
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Unamortised lending costs |
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| (50,515) |
| (100,525) |
| (85,744) |
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Total borrowings |
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| 50,100,845 |
| 48,800,835 |
| 51,815,616 |
The Group entered into to a £55 million (2017: £50m) revolving facility with National Westminster Bank plc, with effect from 28 February 2018. The facility is split into two facilities: (i) a £50m Core facility and (ii) a £5m Headroom facility. On the Core facility interest is charged at 1.85% over LIBOR if the loan to value is less than 55% and 2.75% over LIBOR if the loan to value is above 55%. On the Headroom facility interest is charged at 2.35% over LIBOR if the loan to value is less than 55% and 2.75% over LIBOR if the loan to value is above 55%. | |||||||
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A commitment fee is payable at the rate of 40% per annum of the margin, where the margin is 1.85% (and the Loan to Value is less than 55%) and 2.75% (when the Loan to Value is 55% or higher). | |||||||
14 Trade and other payables |
|
| 30 September 2018 |
| 30 September 2017 |
| 31 March2018 |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
|
| £ |
| £ |
| £ |
|
|
|
|
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|
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Trade payables |
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| 103,554 |
| 638,437 |
| 430,276 |
Property improvement costs |
|
| 72,612 |
| 498,364 |
| 180,000 |
Wages and salaries |
|
| - |
| 54,459 |
| 443,960 |
Deferred income |
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| 1,511,160 |
| 782,446 |
| 810,288 |
Rental deposit accounts |
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| 85,586 |
| 129,622 |
| 129,703 |
Loan interest payable |
|
| 291,074 |
| 215,333 |
| 248,371 |
VAT |
|
| 22,379 |
| - |
| - |
Valuation fee |
|
| 15,000 |
| 18,000 |
| 37,428 |
Legal and professional fees |
|
| 3,500 |
| - |
| - |
Audit fee |
|
| - |
| - |
| 45,275 |
Current taxation |
|
| 146,856 |
| 171,315 |
| - |
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|
|
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|
|
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|
|
|
| 2,251,721 |
| 2,507,976 |
| 2,325,301 |
15 Post balance sheet events |
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There have been no post balance sheet events that would require disclosure or adjustment to these financial statements. | |||||||