Helical Bar Regulatory News (HLCL)

HELICAL'S LONDON PORTFOLIO CONTINUES TO DELIVER

Gerald Kaye, Chief Executive, commented:

"Helical has a dynamic portfolio with good upside potential through a combination of development, refurbishment and significant asset management opportunities. We believe our concentration on offices and mixed use assets in London, offices in Manchester and well located logistics units will provide capital growth from development gains and rising income streams.

"We have ambition to continue to grow the Company and have actively sought to add to our development pipeline with exciting new schemes, particularly in London. Rebalancing the portfolio through the sale of non-core assets enables us to recycle some of the value we have created in recent years and fully pursue those opportunities that we have identified."

Financial Highlights

Results

· EPRA net asset value per share up 3.7% to 473p (31 March 2016: 456p).

· EPRA earnings per share of 0.5p (2016: 17.1p).

· IFRS basic earnings per share of 34.0p (2016: 91.3p).

· IFRS Profit before tax of £41.6m (2016: £114.0m).

· Total Accounting Return of 8.3% (2016: 22.5%).

· See-through Total Property Return of £79.9m (2016: £164.6m).

- Group's share of net rental income of £47.0m (2016: £43.4m) - up 8.3%.

- Development losses of £5.7m (2016: profits of £27.5m), after provisions of £12.8m (2016: £6.4m).

- Net gain on sale and revaluation of investment properties of £38.6m

(2016: £93.7m).

· Final dividend proposed of 6.20p per share (2016: 2nd interim plus final 5.87p) - up 5.6%.

Property Valuations

· Group's share of property portfolio £1,205m (31 March 2016: £1,240m).

· Unleveraged return of property portfolio as measured by IPD of 9.4% (2016: 21.7%) compared to 4.4% (2016: 11.4%) for the benchmark index.

· Investment property valuations, on a like-for-like basis, up 5.2% (4.5% including sales and purchases).

Financing

· See-through loan to value reduced to 51% (31 March 2016: 55%).

· Average maturity of the Group's share of debt of 3.6 years (31 March 2016: 4.5 years) at an average cost of 4.3% (31 March 2016: 4.2%).

· Group's share of cash and undrawn bank facilities at 31 March 2017 of £267m

(31 March 2016: £193m).

Operational Highlights

London Portfolio - strong valuation performance supported by ongoing lettings progress and the completion of refurbishments

· 9.8% valuation increase, on a like-for-like basis, of see-through London investment portfolio, valued at £666m at 31 March 2017 (65.5% of investment portfolio) compared with £593m at 31 March 2016 (56.4%).

· Contracted rents on our see-through London portfolio at 31 March 2017, including pre-lets at The Bower, increased to £27.9m (2016: £23.6m) compared to an ERV of £45.0m (2016: £45.4m).

· At 25 Charterhouse Square EC1, refurbishment works on this 43,600 sq ft building were completed in March 2017 with 50% of the office space (18,725 sq ft) let at £75 psf.

· At The Loom E1, a major repositioning of the building was completed in September 2016 and 19,275 sq ft is currently available with 2,750 sq ft under offer. Average contracted rents of £37.50 psf compare to lettings during the year of up to £54 psf.

· Planning permission granted at Power Road Studios, Chiswick W4 for 42,500 sq ft of new office space.

· At The Bower EC1, 58,907 sq ft of Phase 2, The Tower, was pre-let to WeWork in November 2016.

· At Barts Square EC1, 118 (82%) of the 144 residential units in Phase One had exchanged by 24 May 2017 (31 March 2016: 102 units) at an average of £1,570 psf, with a further three reserved.

Regional Portfolio - asset recycling providing stronger focus on Manchester offices and logistics units

· 2.1% valuation decrease, on a like-for-like basis, in the see-through Regional investment portfolio, valued at £351m at 31 March 2017 (34.5% of investment portfolio) compared with £460m at 31 March 2016 (43.6%).

· Contracted gross rents on see-through Regional investment portfolio at 31 March 2017 of £24.3m (2016: £32.4m) compared to an ERV of £26.6m (2016: £35.6m).

· Regional investment portfolio comprised 9.3% offices, 5.0% in town retail, 2.8% retail parks, 15.4% logistics and 2.0% other (percentages of whole investment portfolio at year end).

· Sales of 22 regional assets during the period comprising 13 logistics units, three offices and six retail assets for £117m at a 1.5% premium to March 2016 values.

· The Morgan Quarter, Cardiff and a retail park at Great Yarmouth sold post year end for a total of £59m.

· Trinity Court, a 47,500 sq ft office building in Manchester, acquired for £12.9m post year end.

· 39,047 sq ft let at Churchgate House, Manchester at average rents of £17.27 psf, 12.7% above March 2016 ERV.

· 92,672 sq ft logistics unit let in Burton-on-Trent at £5.50 psf, 5% above March 2016 ERV.

· Since 31 March 2016, 96 retirement village units sold for £39.3m with 53 reserved or exchanged for £27.4m.

· Land at Liphook sold for £3.7m at a profit of £3.1m.

For further information, please contact:

Results Presentation

Helical will be holding a presentation for analysts and investors at 9am, Thursday 25 May 2017 at FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. If you would like to attend, please contact Jenni Nkomo on 020 3727 1000, or email her at jenni.nkomo@fticonsulting.com.

Helical plc will host a live conference call and webcast. The details are as follows:

Webcast Link:

http://webcasting.brrmedia.co.uk/broadcast/591f0b181ef2297b08216e7c

The presentation will also be on the Company's website www.helical.co.uk

Financial Highlights

Notes

1. Includes Group's share of income and gains of its subsidiaries and joint ventures. See Appendix 1.

2. Calculated in accordance with IAS 33 and guidance issued by the European Public Real Estate Association ("EPRA"). EPRA earnings per share exclude the net gain on sale and revaluation of the investment portfolio of £38.6m (2016: £93.7m) but include development losses of £5.7m (2016: profits of £27.5m).

3. Includes the Group's share of assets and liabilities of its subsidiaries and joint ventures. See Appendix 1.

4. The EPRA Net Asset Value per share at 31 March 2016 has been restated from 461p for the matters referred to in note 25.

5. See-through loan to value is the ratio of see-through net borrowings to see-through property portfolio. See Appendix 2.

6. See-through loan to value at 31 March 2017, adjusted for £65m of sales proceeds and £13m of purchases since the year end.

7. See-through net gearing is the ratio of see-through net borrowings to net assets. See Appendix 2.

8. See the Glossary in Appendix 6 for definition of key terms.

Chief Executive's Statement

Overview

I am pleased to present the Company's 2017 Annual Results, the first since my appointment as Chief Executive of Helical plc at the 2016 AGM.

The year to 31 March 2017 has been eventful with the real estate sector proving resilient against a background of both UK and international political change. Looking back 12 months it was clear that the exceptional growth in property values that we experienced over the period from 2012 to 2016, as the market recovered from the 2008 Global Financial Crisis, was coming to an end with yields approaching historic lows, but with some prospect for growth in rental values.

At Helical, we took advantage of the strong recovery in property values during this period by expanding the Company's business activities, investing in development opportunities in London and higher yielding regional assets to provide a stable flow of rental income. Using the proceeds of our 2013 Retail Bond and our 2014 Convertible Bond, together with additional borrowings, we increased our property portfolio from £626m at 31 March 2013 to over £1.2bn, generating significant surpluses which have more than doubled shareholders' funds from £254m to £517m at 31 March 2017.

During the year we have sought to recycle some of the capital created in this period into the schemes which we believe will continue to support the future growth of the Company. We have narrowed the focus of the Company to London, offices in Manchester and a portfolio of logistics units. We expect to complete this process during the current year with the sale of the remaining non-core assets, being the retail properties and regional offices outside of Manchester, whilst continuing to work through the retirement village programme.

In the year under review, the majority of our performance has come from the assets we own in London, where we have increased our weighting to 63% of the total portfolio. Sales of regional assets since the year end have increased this London weighting further to 66%. In the investment portfolio we have created buildings which reflect the needs of our tenants, acknowledging that modern lifestyles increasingly merge work and leisure needs. We now have a portfolio of multi-let, flexible and desirable properties which also provide ongoing asset management opportunities to add value. Our London portfolio remains reversionary with further value to be created through the completion of our redevelopment and refurbishment programme, letting vacant space and upcoming rent reviews.

We believe that London will continue to outperform the rest of the UK over the medium and long term and our strategy is to continue to increase our London holdings.

Results for the Year

The profit before tax for the year to 31 March 2017 was £41.6m (2016: £114.0m). Total Property Return reduced to £79.9m (2016: £164.6m) and included growing net rents of £47.0m, an increase of 8.3% on 2016 (£43.4m), and development losses of £5.7m (2016: £27.5m) after deducting provisions of £12.8m (2016: £6.4m). The gain on sale and revaluation of the investment portfolio contributed £38.6m (2016: £93.7m).

Net finance costs of £21.2m were lower than in 2016 (£22.6m) and the Income Statement benefited from the shortening of the maturity period for the Group's remaining interest rate swaps which led to a £0.8m credit (2016: charge of £6.9m) arising from the valuation of the Company's derivative financial instruments. The revaluation of the Company's Convertible Bond provided a credit of £3.0m (2016: £0.5m). Recurring administration costs were marginally higher at £10.8m (2016: £10.7m). Performance related awards were substantially lower at £6.9m (2016: £13.3m) with National Insurance on these awards of £0.7m (2016: £2.1m).

These results allow the Board to continue its progressive dividend policy and to recommend to shareholders a final dividend of 6.20p which, together with the interim dividend of 2.40p paid in December 2016, takes the total dividend for the year to 8.60p (2016: 8.17p), an overall increase of 5.3%.

Performance

We measure our performance at both portfolio and Company level, seeking to outperform the relevant sector indices and our peer group in the medium and long term.

EPRA earnings per share fell from 17.1p to 0.5p, reflecting growing net rental income offset by reduced development profits. On a like-for-like basis, the investment portfolio increased by 5.2% (4.5% including sales and purchases). Sales during the year offset this growth in values contributing to an overall reduction in the portfolio value to £1,205m (2016: £1,240m). The unleveraged return of our property portfolio, as measured by IPD, was 9.4% (2016: 21.7%), compared to 4.4% (2016: 11.4%) for the benchmark index. These investment gains contributed to an increase in EPRA net asset value per share, up 3.7% to 473p (2016: 456p).

Finance

The Company has expanded its activities significantly in recent years, seeking to increase shareholder funds through the generation and retention of increased net rental streams, development profits and valuation surpluses. This growth has been financed through an increase in secured debt borrowed primarily from UK high street banks and, since 2013, through the use of unsecured debt in the form of a Retail Bond and a Convertible Bond. In assessing the needs of the business the Company is conscious that it needs to manage any risks inherent in this leveraged approach to growing the business. It seeks to do this through the use of unsecured debt (24% of total debt), by maintaining an appropriate debt maturity profile and by hedging its interest rate exposure.

The Company uses gearing on a tactical basis throughout the property cycle, being raised to accentuate property performance when property returns are judged to materially outperform the cost of debt and lowered when seeking to reduce exposure to the property cycle.

At 31 March 2017, the Company's see-through loan to value ("LTV"), being the ratio of see-through net borrowings to the value of the see-through property portfolio, was 51%. This metric has varied between 45% and 55% in the last five years and, subsequent to the year end, has fallen below 50% following the recent sales of properties in Cardiff and Great Yarmouth.

Looking forward, the Company will seek to operate within an LTV range of 40%-50% for the foreseeable future, subject to being able to maximise opportunities in the market whilst remaining aware of the risks of higher levels of gearing.

During the year, the average debt maturity reduced to 3.6 years (2016: 4.5 years), with no secured loan repayable before November 2019, whilst marginally increasing the average cost of debt at 4.3% (2016: 4.2%). The Company has a significant level of liquidity with cash and unutilised bank facilities of £267m (2016: £193m) to fund capital works on its portfolio.

Board Matters

In July 2016, I became CEO of Helical succeeding Michael Slade who became the Company's Non-Executive Chairman. The Board also consists of three Executive Directors and five Independent Non-Executive Directors. Our Executive team has an average of over 19 years' experience at Helical and are supported by a strong team of property and finance professionals and administrative staff.

The Future

Helical has a dynamic portfolio with good upside potential through a combination of development, refurbishment and significant asset management opportunities. We believe our concentration on offices and mixed use assets in London, offices in Manchester and well located logistics units will provide capital growth from development gains and rising income streams.

We have ambition to continue to grow the Company and have actively sought to add to our development pipeline with exciting new schemes, particularly in London. Rebalancing the portfolio through the sale of non-core assets enables us to recycle some of the capital we have created in recent years and fully pursue those opportunities that we have identified.

Gerald KayeChief Executive

25 May 2017

Our Market

Overview

Helical's core business is developing and owning dynamic, well located office space in London and Manchester and also includes a portfolio of logistics units along the motorway network of England and Wales. With intelligent stock selection, we aim to maximise returns by development and refurbishment as well as through significant asset management initiatives.

London

In our judgement, the London commercial property market currently provides the best source of potential capital profits and we expect this to remain the case for the foreseeable future, notwithstanding the risks associated with our exit from the European Union and other potential headwinds.

In order for Helical to generate capital profits the Company needs to identify those areas where it believes tenant demand is, or will become, strong and to source opportunities in those areas at an appropriate entry price. Using the skills, knowledge and expertise gained over many years, the Helical team aims to deliver attractive and exciting office space, in locations with growing tenant demand.

The Company has recognised three continuing major developments in the London office market. First, the growth of the London population, which exceeded its previous peak during 2015. Second, the continuing and rapid expansion of the creative industries, predominantly in technology and media. Third, the migration of occupiers from the West End to the City and East London.

London's population reached 8.7 million in 2015, exceeding its previous peak in 1939, and is forecast to continue growing towards 10 million by 2030. Whilst this growth will present challenges to London, particularly in terms of its infrastructure, the opening of the Elizabeth Line (Crossrail) at the end of 2018 will assist in alleviating these problems. Our properties in the City and Tech Belt are all in locations that will benefit from this rail link.

Recently published research by CBRE noted that the UK is a global leader in the creative industries and we have targeted these industries with our portfolio. In London, companies involved in media, advertising and marketing, technology and other creative industries comprised 54% of our new lettings in the year to 31 March 2017.

The third factor influencing our choice of location for our portfolio is the migration of occupiers across central London to the City and East London. The desire to be part of creative hubs, surrounded by like-minded individuals, located a short travelling distance from home is a common theme in discussing requirements with tenants. Most obviously, those hubs are in the Tech Belt from Kings Cross to Whitechapel.

In London, Helical is building up a portfolio of multi-tenanted office buildings in the Tech Belt locations of Farringdon, the Old Street roundabout and Whitechapel and also in West London from Chiswick to Shepherd's Bush. By owning these "clusters" or "villages" of office buildings it has a portfolio of assets with multiple lease events leading to ongoing asset management opportunities.

The Company also seeks to expand its profitability by taking on additional schemes in Central London either by co-investment or by forward selling/funding them, to allow for the generation of profit shares and development management fees but with reduced balance sheet exposure.

The Regions

Outside London, the Company has identified two key areas that contribute the potential for capital growth and are a source of recurring net rental income at good yields.

In Manchester we now have four assets (one acquired post year-end) with a potential capital value, after all refurbishment works and lettings are concluded, approaching £100m. Here, the occupational and investment market continues to strengthen. The city has high quality office stock and a diverse occupier base which has seen much international and institutional investment over the past few years. Companies have access to a deep and highly skilled talent pool in a cost effective location both for the employer and the employee. Recent research by CBRE identified Manchester as the "leading UK creative location outside London by some margin" and our buildings are designed to attract creative occupiers. Annual office take up is consistently in excess of 1m sq ft with high profile new occupiers coming to the City on a frequent basis.

In addition, we have a portfolio of logistics units comprising 15% of our investment portfolio but which contribute 25% of our current contracted rents. This sector is characterised by strong occupational demand and limited available supply. These properties have little obsolescence and good prospects of rental growth.

Looking Forward

The key areas of focus going forward for Helical are London, Manchester offices and logistics units. All other assets currently held are regarded as non-core and we will seek to continue to exit those assets as the opportunities to do so arise.

Our ambition is to have a balanced portfolio which generates sufficient net rental income to exceed all of our recurring costs and provide a surplus significantly greater than our annual dividend to shareholders. We have an ERV on the portfolio, post recent sales, of £69m and expect to generate this surplus once all of our current asset management initiatives are completed. We also seek a pipeline of opportunities to grow the balance sheet of Helical through the creation of development profits and capital surpluses.

Performance

We measure our performance using a number of financial and non-financial key performance indicators ("KPIs").

We incentivise management to outperform the Group's competitors by setting appropriate levels for performance indicators against which rewards are measured. We also design our remuneration packages to align management's interests with shareholders' aspirations. Key to this is the monitoring and reporting against identifiable performance targets and benchmarks.

Investment Property Databank

The Investment Property Databank ("IPD") produces a number of independent benchmarks of property returns which are regarded as the main industry indices.

IPD has compared the ungeared performance of Helical's total property portfolio against that of portfolios within IPD for the last 20 years. The Group's annual performance target is to exceed the top quartile of the IPD database, which it has consistently achieved. Helical's ungeared performance for the year to 31 March 2017 was 9.4% (2016: 21.7%) compared to the IPD benchmark of 4.4% (2016: 11.4%) and upper quartile benchmark of 6.9% (2016: 13.0%).

Helical's unleveraged portfolio returns to 31 March 2017 were as follows:

Source: Investment Property Databank

Helical's trading and development portfolio (15.5% of gross assets) is shown in IPD at the lower of book cost or fair value and uplifts are only included on the sale of an asset.  

EPRA Net Asset Value Per Share

Our Group's main objective is to maximise growth in net asset value which we seek to achieve through increases in investment portfolio values and from retained earnings from other property related activity. EPRA net asset value per share is the property industry's preferred measure of the share of net assets attributable to each share as it includes the fair value of net assets on an ongoing long term basis. The adjustments to net asset value to arrive at this figure are shown in note 22 to the financial statements.

The diluted net asset value per share, excluding trading stock surplus, at 31 March 2017 increased by 6.4% to 431p (2016: 405p). Including the surplus on valuation of trading and development stock and adjusting for the fair value of derivatives and deferred taxation, the EPRA net asset value per share at 31 March 2017 increased by 3.7% to 473p (2016: 456p).

Total Shareholder Return

Total Shareholder Return is a measure of the return on investment for shareholders. It combines share price appreciation and dividends paid to show the total return to the shareholder expressed as an annualised percentage.

The Total Shareholder Return in the year to 31 March 2017 was -18.0% (2016: 1.0%). Over five, ten, fifteen, twenty and twenty five years Helical's Total Shareholder Return exceeded that of the Listed Real Estate Sector Index.

1. Growth over all periods to 31/03/17.

2. Growth in FTSE All-Share Return Index over all periods to 31/03/17.

3. Growth in FTSE 350 Real Estate Super Sector Return Index over all periods 31/03/17. For data prior to 30

September 1999 FTSE All Share Real Estate Sector Index has been used.

4. Growth in Total Return of IPD UK Monthly Index (All Property) over all periods to 31/03/17.

Average Length of Employee Service and Average Staff Turnover

High levels of staff retention remain a key feature of Helical's business. The Group retains a highly skilled and experienced team. We assess our success based on two key metrics, the average length of service of the Group's head office employees and average staff turnover.

The average length of service of the Group's head office employees at 31 March 2017 was eight years and the average staff turnover during the year to 31 March 2017 was 5.7%.

Financial Review

Results for the Year

The year to 31 March 2017 saw the Group deliver continued growth in net rental income and a valuation surplus on the investment portfolio leading to pre-tax profit of £41.6m and an increase in EPRA net asset value per share of 3.7%.

The proposed final dividend of 6.20p takes the total dividend for the year to 8.60p, a 5.3% increase on the previous year. With growing rents from our core London portfolio, supported by strong income streams from the regional portfolio, the Company aims to continue to grow this dividend.

The Group's real estate portfolio, including its share of assets held in joint ventures, reduced to £1,205m (2016: £1,240m) as gains from its annual revaluation and capital expenditure on the investment portfolio and development programme were offset by the sale of £199m of assets. There were no purchases of new investment, trading or development assets during the year.

The sale of investment assets during the year has resulted in a reduction in the Group's loan to value to 51% (2016: 55%) which has been reduced further since the year end to 49% on a pro-forma basis following the sale of £65m of assets and the purchase of one asset for £13m. The Group's debt maturity profile shortened to 3.6 years (2016: 4.5 years) and its weighted average cost of debt increased to 4.3% (2016: 4.2%).

At 31 March 2017, the Group had unutilised bank facilities of £158m and £109m of cash. The bank facilities are primarily available to fund Phase Two of the Group's redevelopment of The Bower, London EC1, the construction works at Barts Square, London EC1, including the last phase of residential, its retirement village development programme and future potential investment purchases.

Total Accounting Return

The total accounting return is the growth in the net asset value of the company plus dividends paid in the year, expressed as a percentage of the net asset value at the beginning of the period. The metric measures the growth in shareholders' funds each year and is expressed as an absolute measure.

Total Property Return

We calculate our Total Property Return to enable us to assess the aggregate of income and capital profits made each year from our property activities. Our business is primarily aimed at producing surpluses in the value of our assets through asset management and development, with the income side of the business seeking to cover our annual administration and finance costs.

Earnings Per Share

The IFRS earnings per share decreased from 91.3p to 34.0p and is based on the after tax earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year.

On an EPRA basis, earnings per share were 0.5p (2016: 17.1p), reflecting the Group's share of net rental income of £47.0m (2016: £43.4m) and development losses of £5.7m (2016: profits of £27.5m) but excluding gains on sale and revaluation of investment properties of £38.6m (2016: £93.7m).

Net Asset Value

IFRS diluted net asset value per share increased from 405p to 431p and is a measure of shareholders' funds divided by the number of shares in issue at the period end, excluding those held by the Company's Employee Share Ownership Plan Trust, adjusted to allow for the effect of all dilutive share awards.

EPRA net asset value per share increased by 3.7% to 473p per share (2016: 456p). This increase arose principally from a total comprehensive income (retained profits) of £39.2m (2016: £104.9m) less dividends paid of £3.6m (2016: £14.4m) and reflecting a reduction in the surplus on valuation of the trading and development stock to £12.5m (2016: £19.4m).

Income Statement

Rental Income and Property Overheads

Gross rental income receivable by the Group in respect of wholly owned properties increased by 7.3% to £48.8m (2016: £45.5m) reflecting the partial capture of the investment portfolio's reversionary potential offset by sales of assets during the year. In the joint ventures, gross rents fell from £1.8m to £0.9m. Property overheads in respect of wholly owned assets and in respect of those assets in joint ventures fell from £3.4m to £2.5m. After taking account of net rents payable to our profit share partners of £0.3m (2016: £0.5m), see-through net rents increased by 8.3% to £47.0m (2016: £43.4m).

Development Profits

The majority of the Group's development activities are carried out on assets held as investment properties such as The Bower, London EC1 and 25 Charterhouse Square, London EC1, schemes funded with third parties, or in joint ventures as referred to below.

In the year under review the Company made progress at its retirement village portfolio, increasing sales to £40.0m, including the sale of land, (2016: £29.9m) with profits of £1.8m (2016: £0.6m). In its development management role at Barts Square, London EC1 and One Creechurch Place, London EC3 and in respect of the development of the Scottish Power headquarters in Glasgow, it earned fees of £2.8m. Our retail development programme generated net profits of £2.3m (2016: loss of £1.8m) as the pre-let scheme at Cortonwood was forward funded during the year. In total, the Group generated development profits of £7.1m (2016: £30.7m).

At the year end we reviewed the book value of our land holdings and made provisions of £6.3m (2016: £6.4m), primarily in respect of the retirement village at Great Alne, where forecast costs have increased during the year. Net of these provisions, a development property profit of £0.8m (2016: £24.3m) was recognised.

In the previous year to 31 March 2016, profits included a development management fee of £23.2m in respect of The Bower, London EC1 and £3.7m in respect of One Creechurch Place and the Scottish Power headquarters.

Share of Results of Joint Ventures

The sale of our retail development at Shirley and the termination of the lease to the NHS at Barts Square to allow the final phase of development to commence reduced net rents in our joint ventures from £1.3m to £0.8m. No further rents are expected in respect of assets currently held in joint ventures in the short term. At the year end we reviewed the book value of our land holdings in the joint ventures and made provisions of £6.5m against the carrying value of our schemes at Hammersmith Town Hall and Barts Square. Finance, administration and taxation costs and sundry provisions against the carrying value of assets added a further £0.8m of losses leaving a net loss from our joint venture of £6.5m.

In the previous year to 31 March 2016, gains on the sale or revaluation of the investment assets of £43.9m, mainly in respect of The Bower, London EC1 and Barts Square, London EC1, contributed to a total net profit from joint ventures for that year of £50.5m.

Gain on Sale and Revaluation of Investment Properties

During the year, we sold 24 investment assets for a total of £159m generating a net overall profit of £1.4m. In London we sold two office buildings at One King Street, Hammersmith, W6 and Chart House, EC1 for £42.0m at a small net loss of £0.3m. In the regions we sold three office buildings at Castle Donnington, Cheadle and Cobham for £14.2m at a profit of £0.7m after costs. We sold six retail assets during the period, being a shop in Leicester and five retail parks in Ellesmere Port, Harrogate, Huddersfield, Scarborough and Stockport for a combined £44.1m at a net loss of £2.9m. From our logistics portfolio, we sold 13 assets for £58.5m at a net profit of £3.8m.

The valuation of our investment portfolio continued to reflect the benefit of our refurbishment activities in London where we generated an increase of 9.1% overall and 9.8% on a like-for-like basis. The regions contributed a loss of 1.3% overall and 2.1 % on a like-for-like basis. In total, the investment portfolio showed a valuation increase of 4.5%, or 5.2% on a like-for-like basis.

The total impact on our results of the gain on sale and revaluation of our investment portfolio, including in joint ventures, was a net gain of £38.6m (2016: £93.7m).

Administration Costs

Administration costs, before performance related awards, increased marginally from £10.7m to £10.8m.

Performance related share awards and bonus payments, before National Insurance costs, were £6.9m (2016: £13.3m). Of this amount, the £1.7m (2016: £6.7m) charge for share awards under the Performance Share Plans is expensed through the Income Statement but added back to Shareholders' Funds through the Statement of Changes in Equity. In addition, National Insurance of £0.7m (2016: £2.1m) has been charged in the year.

Finance Costs, Finance Income and Derivative Financial Instruments

Interest payable on secured bank loans including our share of loans on assets held in joint ventures, but before capitalised interest, increased to £24.7m (2016: £23.9m). Interest payable in respect of the unsecured Retail and Convertible Bonds was £8.8m (2016: £8.8m). The movement in medium and long term interest rate projections during the year, offset by the shortening maturity period of the Group's financial instruments, contributed to a credit of £0.8m (2016: charge of £6.9m) on their mark-to-market valuation. Capitalised interest increased from £4.9m to £7.9m as development schemes progressed. Total finance costs, including joint ventures, reduced from £27.8m to £25.6m. Finance income earned was £4.4m (2016: £5.1m).

Taxation

Helical pays corporation tax on its UK sourced net rental income, trading and development profits and realised chargeable gains, after offset of administration and finance costs.

The deferred tax charge for the year is principally derived from the revaluation surpluses recognised in the year offset by the recognition of tax losses which the Group believes will be utilised against profits in the foreseeable future.

Dividends

Helical follows a progressive dividend policy increasing its dividends in line with its results, whilst retaining the majority of funds generated for investment in growing the business. The interim dividend paid on 30 December 2016 of 2.40p was an increase of 4.3% on the previous interim dividend of 2.30p. The Company has proposed a final dividend of 6.20p, an increase of 5.6% on the previous year (2016: 5.87p). In total, the dividend paid or payable in respect of the results for the year to 31 March 2017 is 8.60p (2016: 8.17p), an increase of 5.3%. Since 2014 the compound annual growth rate of the Company's dividends has been 8.4%.

Balance Sheet

Shareholders' Funds

Shareholders' funds at 1 April 2016 were £480.7m. The Group's results for the year added £39.2m, net of tax, representing the total comprehensive income for the year. Movements in reserves arising from the Group's share schemes increased funds by £0.6m. The Company paid dividends to shareholders amounting to £3.6m leaving a net increase in Shareholders' Funds from the Group activities during the year of £36.2m to £516.9m.

Investment Portfolio

Debt and Financial Risk

In seeking to finance Helical's expansion in recent years, the Group has used a combination of new secured facilities, whose purpose and terms reflect the nature of the assets charged to the lenders, and unsecured bonds which have provided the firepower to acquire many of the assets which have contributed to the recent growth in Shareholders' Funds. The composition of the Group's debt structure has significantly changed since 31 March 2013 with unsecured debt now representing 24% of debt drawn at 31 March 2017.

In total, Helical's outstanding debt at 31 March 2017 of £737m (2016: £778m) had an average maturity of 3.6 years (2016: 4.5 years) and a weighted interest cost of 4.3% (2016: 4.2%).

Debt Profile at 31 March 2017 - Excluding the Effect of Arrangement Fees

Secured Debt

The Group arranges its secured investment and development facilities to suit its business needs as follows:

• Investment facilities

We have £190m of revolving credit facilities which enable the group to acquire, refurbish, reposition and hold significant parts of our investment portfolio. We have used these facilities to finance our regional portfolio. Our London investment assets are primarily held in £383m of term loan secured facilities which, where appropriate, allow us to finance refurbishment projects including the redevelopment of The Tower at The Bower, Old Street, London EC1. The value of the Group's properties secured in these facilities at 31 March 2017 was £983m (31 March 2016: £945m) with a corresponding loan to value of 47% (2016: 54%). The average maturity of the Group's investment facilities at 31 March 2017 was 4.1 years (2016: 5.0 years) with a weighted average interest rate of 4.3% (2016: 3.8%).

• Development facilities

These facilities finance the construction of the retirement villages at Durrants Village, Horsham; Maudslay Park, Great Alne; Milbrook Village, Exeter and the fourth phase of Bramshott Place, Liphook. The average maturity of the Group's development facilities at 31 March 2017 was 3.4 years (2016: 4.4 years) with a weighted average interest rate of 3.7% (2016: 3.8%).

• Joint venture facilities

We hold a number of investment and development properties in joint venture with third parties and include in our reported figures our share, in proportion to our economic interest, of the debt associated with each asset. The average maturity of the Group's share of bank facilities in joint ventures at 31 March 2017 was 2.7 years (2016: 3.7 years) with a weighted average interest rate of 3.4% (2016: 3.4%).

Unsecured Debt

The Group's unsecured debt, including the Convertible Bond at its mark-to-market valuation, is £179.8m (2016: £182.7m) as follows:

• Retail Bond

In June 2013, the Group raised £80m from the issue of an unsecured Retail Bond with a 6.00% coupon. This bond is repayable in June 2020.

• Convertible Bond

In June 2014, the Group raised £100m from the issue of a listed unsecured Convertible Bond with a 4.0% coupon, repayable in June 2019, or, subject to certain conditions, convertible at the option of the bond holders into ordinary shares, unless a cash settlement option is exercised by the Company. The initial conversion price has been set at £4.9694 per share, representing a 35% premium above the price on the day of the issue and a premium of 59% above the Company's EPRA net asset value per share at 31 March 2014. The value of the Bond at 31 March 2017, as determined by the listed market price, was £99.8m (2016: £102.7m).

• Short term working capital facilities

These facilities provide access to additional working capital for the Group.

Cash and Cash Flow

At 31 March 2017, the Group had £267m (2016: £193m) of cash and agreed, undrawn, committed bank facilities including its share in joint ventures as well as £17m (2016: £153m) of uncharged property on which it could borrow funds.

Net Borrowings and Gearing

Total gross borrowings of the Group, including in joint ventures, have reduced from £777.9m to £736.6m during the year to 31 March 2017. After deducting cash balances of £109.0m (2016: £86.8m) and unamortised refinancing costs of £7.6m (2016: £9.3m), net borrowings reduced from £681.8m to £620.0m. The gearing of the Group, including in joint ventures, reduced from 142% to 120%.

Hedging

At 31 March 2017, the Group had £651.4m (2016: £635.5m) of fixed rate debt with an average effective interest rate of 4.2% (2016: 4.2%) and £29.3m (2016: £107.1m) of floating rate debt with an average effective interest rate, excluding commitment fees, of 3.0% (2016: 3.9%). In addition, the Group has £3.3m of interest rate caps at an average of 0.75% (2016: £157m at 4.0%). In our joint ventures, the Group's share of fixed rate debt was £nil (2016: £nil) and £55.9m (2016: £35.3m) of floating rate debt with an effective rate of 3.4% (2016: 3.4%) with interest rate caps set at 1.5% plus margin on £61.8m and 0.5% plus margin on £56.9m (2016: £nil).

¹This includes commitment fees on undrawn facilities. Excluding these would reduce the effective rate to 3.0%.

Interest Cover

In assessing the results of the Group for each financial year, Helical considers its interest cover as a measure of its performance and its ability to finance its annual interest payments from its net operating income, before revaluation gains or losses on the investment portfolio and net realisable provisions on the trading and development stock. In the year to 31 March 2017, this interest cover was 2.6 times (2016: 5.4 times).

Investment Property Accounting Treatment

International Accounting Standard 40 - Investment Property requires that accrued operating lease income assets should be shown separately and deducted from the fair value of the investment properties in the Statement of Financial Position. This accounting treatment had not been applied at 31 March 2016 but has been adopted for the period ended 31 March 2017. A prior year adjustment has been made to ensure consistency of comparative information, clarity and transparency.

The effect of the adjustment on the relevant financial statement line items for the year ended 31 March 2016 is detailed in note 25.

Tim MurphyFinance Director

25 May 2017

Helical's Property Portfolio - 31 March 2017

Property Overview

Helical divides its property activities into three core markets: London, Manchester offices and logistics. The London Portfolio represents 63% of the total property portfolio and drives capital growth, development profits and, increasingly, income. Manchester offices accounts for 6%, and logistics account for 13%.

In addition, we have a portfolio of four retirement villages which are being completed and sold over the next three years, a small portfolio of regional offices and four regional retail assets (two of which were sold post year end).

The London Portfolio

Our strategy is to continue to increase our London holdings, focusing on areas where we see strong tenant demand and growth potential, such as the "Tech Belt" that runs from King's Cross through Old Street and Shoreditch to Whitechapel and in West London, in particular Shepherds Bush, Chiswick and Hammersmith. Our London portfolio comprises income producing multi-let offices, office refurbishments and developments and residential development schemes.

· City and Tech Belt

The Bower, Old Street EC1

This asset was acquired in November 2012 for £60.8m in a joint venture with Crosstree Real Estate Partners LLP. The site is in the heart of an area which has become a "creative halo", a district of London which is a hub for technology, media and telecommunications companies and which is benefiting from substantial investment in infrastructure. A planning consent has been implemented to increase the floor space on the site by 116,000 sq ft, to refurbish existing areas and significantly upgrade the public realm with the creation of a new pedestrian street.

On 20 January 2016, Helical acquired The Warehouse and The Studio (211 Old Street) and The Tower (207 Old Street) from the joint venture.

211 Old Street EC1

The development of Phase One, comprising The Warehouse, 128,262 sq ft, and The Studio, 23,177 sq ft, completed in November 2015.

Phase One is fully let to CBS, Farfetch, Pivotal, Allegis and Stripe (The Warehouse) and John Brown Media (The Studio), and all tenants are in occupation. The retail operators are Bone Daddies, Draft House, Enoteca da Luca, Honest Burger, Maki and Franze & Evans.

207 Old Street EC1

At The Tower, 178,724 sq ft, the refurbishment and construction works are well underway with practical completion scheduled for Q2 2018. Whilst the formal letting campaign for the building is expected to commence closer to completion, we have already pre-let six floors, comprising 58,907 sq ft, to WeWork, the leading global provider of flexible collaborative co-working space.

Barts Square EC1

In a joint venture with The Baupost Group LLC, Helical owns the freehold interest of Barts Square, a 3.2 acre site between St Pauls and Smithfield Market, situated a short walk from Farringdon East station on the Elizabeth Line (Crossrail) which is due to be operational at the end of 2018.

Barts Square will ultimately provide an entirely new quarter of the City consisting of 236 residential apartments, three office buildings of 213,000 sq ft, 23,485 sq ft and 10,200 sq ft and 20,400 sq ft of retail/A3 at ground floor as well as major public realm improvements.

Phase One - Residential/offices/retail

Phase 1 of Barts Square comprises 144 residential units, 8,900 sq ft of retail space, 23,485 sq ft of new office space and extensive public realm improvements. Construction work is progressing well with the first apartments being handed over to purchasers in Summer 2017. Contracts have been exchanged for the sale of 118 residential units for a total value of £151.3m at an average of £1,570 psf, with a further three units under offer.

Phase Two - One Bartholomew Close - Offices

One Bartholomew Close was sold to clients of Ashby Capital LLP ("Ashby") for £102.4m in August 2015. The demolition of the existing building and the construction of a new 12 storey office block of 213,000 sq ft commenced in January 2016. The building is due to be completed in August 2018. Ashby's clients finance the development costs and when the building is completed and successfully let the joint venture will be entitled to receive a profit share payment. Helical is the development manager for delivery of the project.

Phase Three - Residential/retail

Demolition work on Phase 3 of Barts Square is well underway. This phase will comprise 92 apartments and 11,500 sq ft of retail space. Completion is due in Summer 2019.

One Creechurch Place, City of London EC3

One Creechurch Place is a landmark City office scheme in the heart of the insurance sector in London. In May 2014, Helical signed a joint venture agreement with HOOPP (Healthcare of Ontario Pension Plan) to redevelop the site. Under the terms of the joint venture, HOOPP and Helical jointly funded the project on a 90:10 split, with Helical acting as development manager for which it will receive a promote payment depending on the successful outcome of the scheme. The new building, comprising 272,505 sq ft NIA of offices and 786 sq ft of retail, achieved practical completion on 7 November 2016 and is currently being marketed for occupation. There are a number of potential tenants interested in the building.

C-Space, 37-45 City Road EC1

Helical acquired C-Space in June 2013. Planning consent was obtained for a complete refurbishment of the building which increased the previous 50,000 sq ft office building to 61,973 sq ft. The works, which were completed in October 2015, involved an additional floor and extensions to the third floor, a landscaped courtyard and entrance pavilion to the rear and full height glazing to the raised ground floor. 75% of the space was pre-let to the creative agency MullenLowe in June 2015, with the remaining space let to NeuLion in November 2016.

25 Charterhouse Square, Smithfield EC1

In January 2016, Helical was granted a new 155 year leasehold interest in 25 Charterhouse Square, from the Governors of Sutton's Hospital in Charterhouse for £16m. Helical has carried out a major refurbishment of the existing building, which increased the previous 34,000 sq ft to 38,355 sq ft of offices, with the addition of a new sixth floor, and added 5,138 sq ft of retail/restaurant. The building achieved practical completion on 28 March 2017. The top two floors, totalling 12,200 sq ft, have been let to Anomaly at £75.00 psf for a ten year lease term.

The Loom, Whitechapel E1

This 110,000 sq ft listed former wool warehouse was acquired in 2013. A major repositioning was completed in September 2016 to include a new entrance and reception onto Gowers Walk, café, showers and a bike store. During the year we completed 11 new lettings and five renewals securing £1.8m of contracted rent. We also completed two rent reviews with an uplift to contracted rent of £300,000. The largest, most prominent, unit in the building of 9,000 sq ft was let in July for £54 psf. The average contracted rent for the building is £37.50 psf. 19,275 sq ft is currently available in five units with an ERV of circa £950k, of which 2,750 sq ft is under offer.

· The West

The Shepherds Building, Shepherds Bush W14

This 151,000 sq ft multi-let office building close to the Westfield London shopping centre maintains an occupancy approaching 100%, as it has for nine consecutive years. The average contracted rent for the building is £44 psf with a total contracted rent of £6.57m and a passing net rent of £3.6m. During the year 13 new lettings, all in excess of £47.50 psf, were completed securing a contracted rent of £500,000. Two rent reviews were settled with an uplift to contracted rent of £225,000. 2,550 sq ft is currently available in four studio units.

Power Road Studios, Chiswick W4

The site comprises 62,000 sq ft of offices across five buildings and is multi-let to a wide range of predominantly media tenants. Recent lettings have been concluded at a rent of £38 psf with £40 psf having been achieved in Studio 1, compared to an average rental of £24 psf at acquisition. Cineworld, which occupied 16,000 sq ft, has surrendered its lease and vacated which permits the comprehensive refurbishment of the unit and creation of a new entrance at the front of the building. These works started in November 2016 and are expected to last nine months, increasing the rental value for this space from £22.00 psf to £42.50 psf. Planning permission to add a further 42,500 sq ft of office space has been granted.

The Powerhouse, Chiswick W4

Helical acquired this 24,288 sq ft office and recording studios by way of sale and leaseback in 2013. The Powerhouse is a listed building on Chiswick High Road and is fully let on a long lease to Metropolis Music Group.

King Street, Hammersmith W6

Hammersmith & Fulham Borough Council, who have been opposed to this regeneration project since the Council became Labour controlled, have exercised their option to terminate the development agreement. With our partners Grainger plc we will now seek to maximise the value of the land held by the joint venture company.

In addition to our holdings in the City and Tech Belt and West London we have one scheme in Covent Garden WC2.

Drury Lane & Dryden Street, Covent Garden WC2

The existing buildings, which are in office and retail use, sit on an island site of approximately 0.5 acres. Approximately half of the site, adjacent to Dryden Street, sits within the Covent Garden Conservation Area. In July 2015, contracts were exchanged with Diageo Pension Fund (a fund managed by Savills Investment Management) for the conditional acquisition of the Drury Lane site. The contract is conditional on the viability of the scheme and Helical securing planning consent. A planning application for the residential led scheme of 68 apartments was submitted in August 2015 and resolution to grant consent was issued at a planning committee in April 2016. A further planning consent for an alternative office led scheme was submitted in December 2016 and is currently being considered by Westminster City Council.

The Regional Portfolio

Our approach to regional investment is to acquire assets where occupational demand is robust throughout the property cycle and the barriers to new supply are high. Successfully picking the sectors and assets with these attributes will ensure strong cash flows and rental growth. In general, yields for regional assets are higher than those in London and these assets are acquired to provide significant cash flow for the Group. We anticipate that income will become an increasingly important part of total returns as yield compression slows and, as such, we focus our attention on areas where we believe the occupational market remains robust.

Our regional portfolio contributed 60% of our net rental income from tenants in diverse sectors and geographical locations. The £351m regional portfolio comprises £156m of logistics (44% of the regional investment portfolio), £95m of offices (27%), £80m retail warehousing and in-town retail (23%), mainly the Morgan Quarter, Cardiff, which has been sold for £55m since year end, and £20m of value from ground rents and assignment fees from our retirement village development programme (6%).

Logistics

Helical had 25 distribution and logistics units located around major UK transport networks at 31 March 2017. These units generally have few bespoke features making them straightforward to re-let if vacancies occur with minimal capital expenditure required. The majority of the assets are single let. Significant assets within the portfolio include a 256,000 sq ft distribution warehouse let to Sainsbury's in Yate, Bristol, a 203,000 sq ft facility in Leighton Buzzard, Bedfordshire and a 183,000 sq ft distribution warehouse let to the Royal Mail in Chester.

Manchester and other Regional Offices

Our regional office investment portfolio comprises seven assets including four in Manchester and others in Crawley, Glasgow and Reading. During the year we sold three assets in Cobham, Castle Donnington and Cheadle for £14.15m, a 6.8% premium to book value.

Manchester is a city with a diverse, thriving and growing economy which is widely regarded as England's second city and the centre of the "Northern Powerhouse". The assets we hold there are:

Churchgate and Lee House, Manchester

This asset, comprising 249,000 sq ft of multi let offices, was purchased in March 2014. Since purchase we have refurbished the reception and 75,254 sq ft of office space. With the successful letting of the 1st floor of Lee House and the Sunshine Suite (15,536 sqft), Churchgate and Lee House is now 100% occupied. Looking forward asset management initiatives still exist to drive further rental growth. We will continue to refurbish the asset as space becomes available through lease events.

Dale House, Manchester

Dale House is a 54,000 sq ft office building situated in the Northern Quarter of Manchester. Following purchase we have pursued surrenders across the building. We successfully achieved surrenders of the top three floors, lower ground and basement spaces which amounts to circa 33,000 sq ft. Refurbishment of these areas has commenced with delivery in Q4 2017. We have secured a pre-let of the 5th floor (7,100 sq ft) and have significant interest in the remaining space that is being delivered.

31 Booth Street, Manchester

This 25,441 sq ft office located in the prime city core was acquired in January 2016 for £4.7m. The building has been fully refurbished and was launched to the market in March 2017. We have received significant occupational interest to date and hope to secure our first letting soon.

Trinity Court, Manchester

Trinity Court, purchased in May 2017 for £12.9m, is a 47,500 sqft office building situated in the central business district of Manchester. The building is currently 100% let with secured income until the end of 2017 at a passing rent of £26.94 psf. The building will be vacated in 2018 and a full refurbishment and extension will be implemented delivering new office space to the market in early 2019.

Retail

Our retail assets total £80m, 7% of our portfolio (31 March 2016: £143m). This part of the portfolio includes a prime retail asset in Cardiff, three retail parks and a number of pre let and/or prefunded retail developments.

During the year, six retail properties were sold for a total of £44.1m, at c. 6% below book value. At the year end the portfolio consisted of four assets of which Cardiff and Great Yarmouth have since been sold reducing the total value of the portfolio to £24.2m.

The Morgan Quarter, Cardiff

During the year we continued to reposition the asset and strengthen the tenant mix. We concluded 12 retail leases representing over £400,000 per annum in rental income which included two tenants upsizing within the estate. Negotiations with Jack Wills, first started in 2015, for them to extend their store finally came to fruition in December.

Along with this expansion, we also completed all of the planned lease renewals and regears with the Hayes retailers, Molton Brown, White Stuff and Joules. In addition we completed the lease renewal with Route One in the Morgan Arcade.

Within the Creative Quarter we completed six office leases and work on Phase Three of the refurbishment completed in May 2017 providing 5,700 sq ft of new space. Since the year end this asset has been sold for £55m, a net initial yield of 5.9% in line with its March 2016 book value.

Retail Developments

Parkgate, Shirley, West Midlands

The shopping centre at Parkgate, Shirley, where Helical had a 50% interest, was completed in 2014 and the 80,000 sq ft Asda, which had been pre-sold to the food-store, together with a number of other retailers including Poundland, Peacocks and Store Twenty-one have all opened successfully for trade. In November 2016 the scheme was sold to a private purchaser.

A second phase of high density residential is being progressed on a 10 acre site opposite the Parkgate scheme. Completions of the first phase of the site sales has occurred to Extracare Charitable Trust and Lioncourt Homes and demolition and infrastructure works have completed. A site for a petrol filling station has been sold to Asda.

Cortonwood Retail Park

This 79,750 sq ft retail park has been 100% pre-let to tenants including Outfit, H&M, New Look, River Island and Marks and Spencer. The scheme has been forward funded with clients of Aberdeen Asset Management and construction is continuing with completion due in July 2017.

Truro

Helical has entered into a Conditional Purchase Agreement on the six acre Truro City Football Club site which has planning consent, subject to a s.106 Agreement, for a 78,000 sq ft non-food retail park. The scheme proposals provide for the relocation of the football club and we anticipate starting on site in 2018.

Retirement Villages

Our retirement village portfolio consists of four villages. We design each of the villages with an active, independent retirement in mind and the communities that we create are the ideal place to live a social and varied lifestyle. Each private, age-exclusive retirement community is centred around a residents' clubhouse, and features many amenities including an indoor pool and gym, landscaped gardens, bar, restaurant and library. With an increasing proportion of the UK population over 65 years old, and a severe under supply in retirement housing, this sector creates significant opportunities for investors and developers.

Bramshott Place, Liphook, Hampshire

This village is situated amongst natural parkland near the village of Liphook on the border of Hampshire, West Sussex and Surrey. The village features a selection of two and three bedroom cottages and one, two and three bedroom apartments arranged around a residents' clubhouse. All construction works to Phases One to Three are completed where 151 units in total have been built and sold. Phase 4 commenced in August 2016 with the construction of 40 additional cottages, due for completion in January 2018. Sales on the site will be formally launched in July 2017, with six of the 40 new cottages already having been reserved and a further two of the 40 being exchanged. The residents' clubhouse is now fully refurbished.

Durrants Village, Faygate, West Sussex

Durrants Village is set within 30 acres of private parkland in the hamlet of Faygate, near Horsham in West Sussex. The village features a selection of cottages and apartments. The first two phases of construction completed in January 2016 with 105 units located around the residents' clubhouse. Phase 3A has commenced and consists of an additional 20 units and is due to complete in September 2017. Sales have progressed well with 99 units sold, 1 exchanged and an additional 10 units reserved. Good interest is being shown in Phase 3A and more reservations are expected to be secured leading up to the delivery of this section in September 2017.

Millbrook Village, Exeter, Devon

Millbrook Village is nestled close to the River Exe in the heart of the historic cathedral city of Exeter. The village features a selection of two and three bedroom cottages and one, two and three bedroom apartments. The site will comprise 164 units once completed. The clubhouse was completed in March and includes a restaurant and bar, games room, gym, cinema and a swimming pool. The build programme is well advanced with 114 units currently completed with more stock now coming online at regular three month intervals. We anticipate that the village will be fully constructed by November 2017. 59 units have been sold, two exchanged with an additional 22 reserved.

Maudslay Park, Great Alne, Warwickshire

Maudslay Park is set in 90-acres of parkland in the Warwickshire village of Great Alne, near Stratford-upon-Avon. The village will comprise 166 units with a mixture of cottages and apartments built around the central clubhouse facility. Similar to our other villages the clubhouse will include a restaurant and bar, games room, gym, cinema and a swimming pool. Phase 1 of the development is currently under construction which consists of 14 cottages, 35 apartments and the central clubhouse facility. The first cottages were completed in April 2017 with the central clubhouse facility being completed in January 2018. Currently we have sold one unit and have a further ten reservations.

Total Portfolio by Fair Value

Trading and Development Portfolio

Capital Expenditure

We have a planned development and refurbishment programme.

Retirement Villages

Asset Management

Asset management is a critical component in driving Helical's performance. Through having well considered business plans and by maximising the combined skills of our management team, we are able to create value in our assets without relying on market movements.

During the year contracted income increased by £3.5m as a result of new lettings and rent reviews, net of any losses from breaks and lease expiries (2016: £12.7m). The significant contributors to the new lettings were: The Loom, London E1 (£1.6m), C-Space, London EC1 (£1.0m), and 25 Charterhouse Square, London EC1 (£0.9m).

There was significant activity within the investment portfolio with 165 lease events.

Portfolio Yields

Capital Values, Vacancy Rates and Unexpired Lease Terms

\* The vacancy rates exclude assets in the course of redevelopment.

Valuation Movements

Lease Expiries or Tenant Break Options

We have a strong rental income stream and a diverse tenant base, with the largest tenant in the portfolio accounting for only 8.1% of the rent roll. The top 10 tenants account for 34.8% of the total rent roll and the tenants come from a variety of industries.

Consolidated income statement

For the year ended 31 March 2017

Consolidated statement of comprehensive income

For the year ended 31 March 2017

The exchange differences on retranslation of net investments in foreign operations will be reclassified to the Income Statement on disposal.

Consolidated balance sheet

At 31 March 2017

Consolidated cash flow statement

For the year to 31 March 2017

Consolidated statement of changes in equity

At 31 March 2017

For a breakdown of total comprehensive income see the Consolidated Statement of Comprehensive Income.

The adjustment against retained earnings of £1,672,000 (31 March 2016: £6,666,000) adds back the share based payments charge in accordance with IFRS 2 Share Based Payments.

There were net transactions with owners of £2,996,000 (31 March 2016: £28,509,000) made up of the performance share plan charge of £1,672,000 (31 March 2016: £6,666,000) and related deferred tax debit of £2,062,000 (31 March 2016: £3,002,000), dividends paid of £3,566,000 (31 March 2016: £14,437,000), the purchase of own shares debit of £944,000 (31 March 2016: £18,857,000) and the share settled bonus credit of £1,904,000 (31 March 2016: £1,121,000).

Notes to the full year results

1. Basis of Preparation

These financial statements have been prepared using the recognition and measurement principles of International Financial Reporting Standards ("IFRS"), including International Financial Reporting Interpretations Committee ("IFRIC") interpretations as adopted by the European Union.

The financial statements have been prepared in Sterling (rounded to the nearest thousand) under the historical cost convention as modified by the revaluation of investment properties, available-for-sale investments, convertible bonds and derivative financial instruments.

The principal accounting policies of the Group are set out in the Group's 2016 annual report and financial statements, there has been no significant change to these policies.

The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 434 of the Companies Act 2006 but has been derived from the Company's audited statutory accounts for the year ended 31 March 2017. These accounts will be delivered to the Registrar of Companies following the Annual General Meeting. The Group Annual Report and Financial Statements for 2016 are available at Companies House. The auditor's opinion on the 2016 accounts was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

2. Segmental Information

The Group identifies two discrete operating segments whose results are regularly reviewed by the Chief Operating Decision Maker (the Chief Executive) to allocate resources to these segments and to assess their performance. The segments are:

• investment properties, which are owned or leased by the Group for long-term income and for capital appreciation, and trading properties, which are owned or leased with the intention to sell; and,

• development properties, which include sites, developments in the course of construction, completed developments available for sale, and pre-sold developments.