Helical Bar Regulatory News (HLCL)

28 May 2015

HELICAL BAR PLC

("Helical" or the "Group" or the "Company")

Unaudited Preliminary Results for the Year to 31 March 2015

EXCELLENT RETURNS TAKE HELICAL'S PORTFOLIO OVER £1BN

Michael Slade, Chief Executive, commented:

"Our strategy of investing and developing in London whilst maintaining a high yielding regional investment programme continues to bear fruit. We expect our London portfolio to continue to provide significant surpluses over the next few years as rental levels grow and we complete and let our development schemes. In the regions, we have completed our rotation out of secondary shopping centres and into high yielding distribution warehouses, regional offices and out-of-town retail parks. We have seen good demand from occupiers for the assets in our portfolio and strong interest in those types of assets from institutions. This is leading to a rise in both rental and capital values as the UK economy strengthens outside London.

With the General Election behind us we can look forward with confidence to a more stable domestic political situation, which should help the UK economy to grow, and we anticipate providing shareholders with continued strong growth in the value of our business."

Financial Highlights

Another excellent financial performance

· EPRA net asset value per share up 23% to 385p (2014: 313p).

· Profit before tax of £87.4m (2014: £101.7m).

· Total Property Return up 11% to £155.3m (2014: £140.1m).

- Group's share of net rental income up 30% to £38.6m (2014: £29.8m).

- Development profits of £17.6m (2014: £65.0m).

- Trading profits of £2.5m (2014: £0.3m).

- Net gain on sale and revaluation of investment properties of £96.6m (2014: £45.0m).

· Final dividend proposed of 5.15p (2014: 4.75p) per share, increasing the total dividend by 7.4% to 7.25p (2014: 6.75p).

Growing capital returns

· Group's share of property portfolio £1,021m (2014: £802m).

· Unleveraged return of property portfolio as measured by IPD of 20.4% (2014: 23.8%) compared to 17.5% (2014: 13.4%) for the benchmark index.

· Investment property valuations, on a like-for-like basis, up 24.7% (11.7% including sales and purchases) with London office valuations up 34.8% (27.0% including sales and purchases).

Strong financial position

· See-through loan to value of 34% (2014: 36%) on a secured basis and 52% overall (2014: 46%).

· Average maturity of the Group's share of debt of 4.3 years (2014: 3.9 years) at an average cost of 4.1% (2014: 4.5%).

· £100m Convertible Bond issued in June 2014 provided firepower to grow the portfolio.

· Group's share of cash and undrawn bank facilities at 31 March 2015 of £229m (2014: £186m).

Operational Highlights

London portfolio providing engine of growth with much more to come

· 27.0% valuation increase of London investment portfolio (2014: 18.6%), now valued at £370m (47% of total investment portfolio).

· Assignment of our purchase contract on 99 Clifton Street, London EC2 generates £16.4m profit.

· Gross rents on London portfolio of £9.3m compared to ERV of £28.1m.

· Significant rental growth seen at Shepherd's Building, Hammersmith and in the "Creative Halo".

· At The Bower, Old Street, London EC1, The Studio and Empire House are fully let with 45% of offices in The Warehouse let or under offer.

· At Barts Square, London EC1, 64 residential units exchanged on phase 1 out of 92 released.

· 23-28 Charterhouse Square, London EC1 acquired for refurbishment to comprise 38,600 sq ft of offices and 5,350 sq ft of retail/restaurant use, to be completed in early 2017.

· 271,000 sq ft of offices at Creechurch Place, London EC3 under construction.

· Contracts exchanged on the sale of Artillery Lane, E1 for £15.1m.

· The current office development programme comprises c. 1.24m sq ft. Of this c. 365,000 sq ft is pre-let or pre-sold.

Regional portfolio switch completed with further purchases to come

· Gross rents on regional investment portfolio of £27.3m, a yield of 6.5% on £420m (53% of total investment portfolio).

· Regional investment portfolio successfully switched from secondary shopping centres to high yielding distribution warehouses, regional offices and retail parks.

· 12.2% valuation increase on regional offices dominated by performance of Churchgate and Lee House in Manchester.

· Regional investment portfolio now comprises 25% offices, 14% in town retail, 24% retail parks, 35% industrial/logistics and 2% other.

· Trading profits of £2.5m (2014: £0.3m) made on the sale of £34m of regional assets.

For further information, please contact:

Full Year Results Presentation

Helical will be holding a presentation for analysts and investors at 9:30am (BST), Thursday 28 May 2015 at FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. If you would like to attend, please contact Clare Glynn at FTI +44 (0) 20 3727 1883 or clare.glynn@fticonsulting.com

The presentation will be on the Company's website www.helical.co.uk and a conference call facility will be available. The dial-in details are as follows:

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"). Earnings per share exclude the net gain on sale and revaluation of the investment portfolio of £96.6m (2014: £45.0m) but include development profits of £17.6m (2014: £65.0m).

3. EPRA earnings per share adjusted for performance related awards.

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

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

7. See-through Net Asset Value gearing is the ratio of see-through net borrowing to EPRA Net Asset Value. See Appendix 2.

Chief Executive's Statement

It has been another good year for Helical with returns from its portfolio reaffirming the Group's multi-sectoral and multi-disciplined approach to the property cycle. This involves identifying opportunities across the property spectrum which contribute to a regular and increasing flow of rental income as well as creating capital growth and development profits throughout the cycle. We seek a balance between an investment portfolio that provides income for the Group and a development programme that, through the use of limited equity, seeks to maximise returns. This balance currently targets, and has achieved, an investment portfolio representing at least 75% of our total property assets and a development programme covering the remaining 25% which is capable of producing exceptional profits. The portfolio is primarily targeted towards London for capital growth and development profits and the regions for high yielding investment assets and trading profits.

Results for the year

The profit before tax for the year to 31 March 2015 was £87.4m, the second highest in the Group's history following last year's record pre-tax profits of £101.7m. Total property return increased by 10.8% to £155.3m (2014: £140.1m) and included growing net rents of £38.6m (up 30% on 2014) and development profits of £17.6m (2014: £65.0m). The gain on sale and revaluation of the investment portfolio contributed £96.6m (2014: £45.0m) and there were trading profits of £2.5m (2014: £0.3m).

Net finance costs of £21.2m were significantly higher than in 2014 (£12.7m), with the Income Statement also adversely affected by falls in expected future interest rates which led to an £8.4m charge arising from valuing the Group's derivative financial instruments (2014: a gain of £5.3m) and a £3.3m charge from valuing the £100m Convertible Bond issued in June 2014. Recurring administration costs were higher at £10.2m (2014: £8.8m) with increased numbers of head office employees reflecting the growth of the Group's portfolio and the acceleration of the delivery phase of its development programme. Performance related awards, before national insurance costs, reflecting the success of the Group's activities in the year were £13.4m, down from £15.7m in 2014.

The growth in rents and the surpluses on the investment portfolio contributed to an increase in the EPRA net asset value per share to 385p, up 23% from 313p at 31 March 2014. EPRA earnings per share were 2.4p (2014: 33.3p) reflecting the exclusion of the £96.6m (2014: £45.0m) investment portfolio gain from this measure. These results allow the Board to continue its progressive dividend policy and to recommend to shareholders a final dividend of 5.15p, an increase of 8.4% on 2014 (4.75p), taking the total for the year to 7.25p (2014: 6.75p), an overall increase of 7.4%.

The London Portfolio

The London investment and development portfolio continues to combine exceptional contributions from individual schemes with significant progress in delivering the Group's programme of new and refurbished properties.

At 99 Clifton Street, London EC2, we have forward sold an office development of 45,000 sq ft which is due to complete this summer, for £38.25m, having committed to purchase it on completion for £21.0m. At Barts Square, London EC1, our scheme in joint venture with The Baupost Group LLC, we have exchanged contracts for sale, at an average of £1,574 psf, on 64 of the 92 residential units released in September 2014 from phase one of the development, which commenced in January 2015 and is due for completion in summer 2017. Subsequent phases will commence in 2016.

At The Bower, Old Street, London EC1, we expect to complete phase one, the refurbishment and extension of The Warehouse (122,000 sf ft NIA of offices, 5,300 sq ft of restaurant use) and The Studio (18,363 sq ft of offices, 3,746 of restaurant use) by summer 2015 having pre-let Empire House (20,726 sq ft) to Z Hotels and restaurant Ceviche who carried out their own refurbishment works. The second phase, a complete refurbishment of The Tower at 207 Old Street, is due to commence summer 2015. At C-Space, London EC1 we expect to complete the refurbishment in August 2015 and are confident that the whole building will be let by the end of this year.

Our 271,000 sq ft office development at One Creechurch Place, London EC3, equity funded with our joint venture partner HOOPP (Healthcare of Ontario Pension Plan), is under construction and due for completion in September 2016. At 23-28 Charterhouse Square, London EC1 we have acquired an existing office building which will comprise 38,600 sq ft of offices and 5,350 sq ft of retail/restaurant on completion of refurbishment works in late 2016.

At Shepherds Building, London W14, having completed the refurbishment of the common parts, we have recently let space at £47.50 psf which compares to a current average passing rent of £30.50 psf. At New Loom House, London E1, we continue to refurbish space as it becomes available and are achieving rents of £37.50 psf compared to an average rent on acquisition of this building in 2013 of £18 psf. In 2015 we shall be embarking on a substantial refurbishment programme which will provide a new entrance and refresh many of the common parts of the building. At Artillery Lane, London E1 we expect to complete the comprehensive refurbishment of this 17,000 sq ft office building in September 2015, following which we will complete the sale of the building at an agreed price of £15.1m.

This level of asset management activity has contributed to a 27% valuation increase of the London investment portfolio, which is now valued at £370m (47% of the total investment portfolio). Passing rents on the portfolio are £9.3m, but will grow over the next few years towards its ERV, now estimated to be £28.1m.

The Regional Portfolio

The regional investment and development portfolio provides a growing stream of net rents from a high yielding investment portfolio whilst contributing development surpluses from the retirement village and retail development programmes. The investment portfolio has seen a major switch out of secondary retail assets, acquired in 2010 and 2011, into high yielding distribution warehouses, regional offices and out-of-town retail parks. We have sold our shopping centres at Corby Town Centre; Clyde Shopping Centre; The Guineas, Newmarket; Idlewells Shopping Centre, Sutton-in-Ashfield and Town Square Basildon. We now retain just one in-town retail investment asset at The Morgan Quarter, Cardiff, a prime retail asset opposite the St David's Shopping Centre. We have reinvested the proceeds into 44 new regional assets, primarily distribution warehouses throughout the country but also offices in Manchester, Bristol, Cobham and out-of-town retail park units in Harrogate, Stockport, Great Yarmouth, Southend, Stoke-on-Trent and other locations.

The regional portfolio also includes our retirement village development programme where we have continued construction works at Durrants Village Horsham, Millbrook Village Exeter and Maudslay Park Great Alne near Stratford-upon-Avon. During the year we sold 36 residential units and look forward to the opening of the Clubhouse at Durrants Village later this year. Our retail development programme, with partners Oswin Developments, continues to progress schemes at Truro, Cortonwood, Kingswinford and Evesham having completed its scheme at Shirley, West Midlands.

Finance

The £100m 4% Convertible Bond, issued in June 2014, continued the move away from the use of secured borrowings which started in 2013 with the issue of the £80m 6% Retail Bond. The issue of these two financing instruments allowed the Group to increase its investment in the property market without significant dilution of existing shareholders and without putting pressure on the Group's loan covenants. We draw a distinction between secured borrowings, on which we have a net LTV (loan to value) of 34% and unsecured forms of debt i.e. our Retail and Convertible Bonds, which increase our overall LTV to 52%. During the year we agreed a 10 year facility with Aviva Commercial Finance and extended our revolving credit facilities with Barclays and, since the year end, with RBS, whilst taking advantage of the low interest rates to arrange medium to long term interest rate hedging. The effect of these financial arrangements has been to extend the average debt maturity to 4.3 years (2014: 3.9 years) whilst reducing our average cost of debt to 4.1% (2014: 4.5%). The Group continues to have a significant level of cash and unutilised bank facilities at the year end of £229m (2014: £186m) to fund any additional purchases and capital works on its portfolio.

Outlook

Our strategy of investing and developing in London whilst maintaining a high yielding regional investment programme continues to bear fruit. We expect our London portfolio to continue to provide significant surpluses over the next few years as rental levels grow and we complete and let our development schemes. In the regions, we have completed our rotation out of secondary shopping centres and into high yielding distribution warehouses, regional offices and out-of-town retail parks. We have seen good demand from occupiers for the assets in our portfolio and strong interest in those types of assets from institutions. This is leading to a rise in both rental and capital values as the UK economy strengthens outside London.

With the General Election behind us we can look forward with confidence to a more stable domestic political situation, which should help the UK economy to grow, and we anticipate providing shareholders with continued strong growth in the value of our business.

Michael Slade

Chief Executive

28 May 2015

Strategies

Overview

Helical is a UK focused property company investing in London for capital growth and the regions for income.

Investment strategy

The investment portfolio, which is mainly let and income producing, has two main purposes:

• To provide a steady stream of rental income for the Group; and,

• To produce above average capital growth over the cycle to contribute to growth in the Group's net

asset value.

We seek to achieve this through careful, disciplined selection of properties which currently include multi-let offices in London, distribution warehouses, regional offices and mixed-use portfolios. Our key aim, when undertaking this selection process, is to ensure that there is sustainable demand from potential occupiers for all of our assets. We look to have a blend of London properties, where yields are lower but the potential for capital growth higher, and properties outside London where surplus cash flow is greater.

We acquire properties where good management can enhance value rather than relying simply on market improvements.

We frequently refurbish and/or extend our properties to create value. We also work closely with tenants with the aim of maintaining maximum occupancy in our properties. Our relationship with tenants can lead to opportunities to increase value through re-gearing leases or moving tenants within a building as their respective businesses expand or contract.

Development strategy

The Group aims to limit the amount of equity that it deploys into development situations through a variety of different structures. The intention is to maximise the Group's share of profits in a development by leveraging the capital employed by the Group and with a view to managing the risks inherent in the development process. The Group's approach to development activities includes:

• Co-investment alongside a larger partner where we have a minority equity stake, receiving a "waterfall" payment whereby we obtain a greater profit share than the percentage of our investment, depending upon the profitability of the project. This strategy is used for the developments at Barts Square, The Bower and Creechurch Place.

• Reduce up-front equity required by entering into conditional contracts or options. We are using this approach at Creechurch Place and for our out-of-town retail development programme, for example Cortonwood (where land is optioned or put under contract which is conditional upon achieving planning permission and pre-lets to retailers), thereby mitigating the risks of the developments.

• Participation in profit share situations where little or no equity investment is required, seeking to minimise any fixed base fee to maximise our profit share so that our interests are completely aligned with our partners. In this way, for a minimal equity commitment, we can benefit from a significant profit share if we contribute to a project's success by using our skills and experience throughout the entire development process.

Our risk strategy

Risk is an integral part of any Group's business activities and Helical's ability to identify, assess, monitor and manage each risk to which it is exposed is fundamental to its financial stability, current and future financial performance and reputation. As well as seeing changes in our internal and external environment as potential risks, we also see them as being opportunities which can drive performance.

Risk management starts at Board level where the Directors set the overall risk appetite of the Group and the risk management strategies. Helical's management runs the business within these guidelines and part of its role is to act within these strategies and to report to the Board on how they are being operated.

The Group's risk appetite and risk management strategies are continually assessed by the Board to ensure that they are appropriate and consistent with the Group's overall strategy and with external market conditions. The effectiveness of the Group's risk management strategy is reviewed every six months by the Audit Committee and by the full Board.

The risks faced by the Group do not change significantly from year to year but their importance and the Group's response to them vary in accordance with changes in the internal and external environment. The Board considers not only the current situation but also potential future scenarios and how these might impact our business.

The Board has ultimate responsibility for risk within the business. However, the small size of our team and our flat management structure allows the Executive Directors to have close contact with all aspects of the business and allows us to ensure that the identification and management of risks and opportunities is part of the mindset of all decision makers at Helical.

The principal risks faced by the Group, and the steps taken by the Group to mitigate these risks, can be found in Appendix 5.

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 2015 was 20.4% (2014: 23.8%) compared to the IPD median benchmark of 17.5% (2014: 13.4%) and upper quartile benchmark of 19.6% (2014: 15.4%). Helical's portfolio unleveraged returns to 31 March 2015 were as follows:

Source: Investment Property Databank.

Helical's trading and development portfolio (23% 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 (pence)

A property company's share price should reflect growth in net assets per share. Our Group's main objective is to maximise growth in assets from increases in investment portfolio values and from retained earnings from other property related activities. Net asset value per share represents the share of net assets attributable to each ordinary share. Whilst the basic and diluted net asset per share calculations provide a guide to performance, the property industry prefers to use an EPRA adjusted net asset per share to represent the fair value of net assets on an ongoing long term basis. The adjustments necessary to arrive at this figure are shown in note 31 to these results.

Management is incentivised to exceed 15% pa growth in net asset value per share.

The diluted net asset value per share, excluding trading stock surplus, at 31 March 2015 increased by 15.3% to 332p (2014: 288p). Including the surplus on valuation of trading and development stock, the EPRA net asset value per share at 31 March 2015 increased by 23.0% to 385p (2014: 313p). EPRA triple net asset value per share increased by 17.0% to 364p (2014: 311p).

Total Shareholder Return

Total Shareholder Return is a measure of the return on investment for shareholders. The table below demonstrates this return compared to various indices. Over three, ten, fifteen, twenty and twenty five years Helical's Total Shareholder Return exceeded that of the Listed Retail Estate Sector Index and the IPD Monthly Index.

1 Growth to 31/03/15.

2 Growth in FTSE All-Share Return Index to 31/03/15.

3 Growth in FTSE 350 Real Estate Super Sector Return Index over 1 year, 3 years, 5 years and 10 years to 31/03/15. 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) to 31/03/15.

Financial Review

Review of the year

The main areas that we focused on in the year to 31 March 2015 were to drive growth in rents through asset management, to increase our exposure to London assets where we see continued growth in rental and capital values, to grow the overall size of our regional portfolio and to switch out of secondary shopping centres and into high yielding distribution warehouses, out-of-town retail parks and offices.

The results for the year, having delivered on these initiatives, have created growing rental surpluses, significant revaluation gains on the investment portfolio and profits from the development programme in London and are reflected in pre-tax profits of £87.4m (2014: £101.7m) and shareholders' funds which increased by 19% in the year to 31 March 2015. The Group's portfolio, including its share of property held in joint ventures, increased to £1,021m (2014: £802m), largely the result of investment property acquisitions during the year funded by a £100m Convertible Bond plus substantial revaluation surpluses. This expansion of the Group's activities has resulted in an increase in its loan to value to 52% (2014: 46%) and an increase in balance sheet gearing to 132% (2014: 107%).

During the year the Group continued to lengthen and diversify its borrowings profile. New secured borrowings included an £81m 10 year fixed rate investment facility, supplemented by the issue of a five year unsecured Convertible Bond, raising a further £100m. These new sources of funding enabled the Group to extend its overall debt maturity profile to 4.3 years (2014: 3.9 years), with a reduced weighted average cost of debt of 4.1% (2014: 4.5%).

At 31 March 2015, the Group had unutilised bank facilities of £93m and £136m of cash. These facilities are available to fund the Group's retirement village development programme, refurbishment works at C-Space, London EC1, The Bower, Old Street EC1 and the phase 1 construction works at Barts Square, London EC1.

EPRA Earnings

EPRA Earnings is a measure of operational performance representing the net income generated from a company's operational activities. These activities exclude gains on the sale and revaluation of investment properties, trading property gains and losses and fair value movements of assets and liabilities, most notably in respect of derivative financial instruments, net of associated tax. The measure, as defined by the European Public Real Estate Association, does not make any adjustment for additional costs associated with such excluded gains, the most notable of which are performance related awards. At Helical such awards derive from all sources of profits and gains and, accordingly, to provide a more meaningful comparison, an Adjusted Earnings per share is noted below, which is calculated on earnings before the charge for performance related awards relating to those items excluded from this measure.

EPRA Earnings per share were 2.4p (2014: 33.3p), reflecting the Group's share of net rental income of £38.6m (2014: £29.8m), development profits of £17.6m (2014: £65.0m) and excluding gains on sale and revaluation of investment properties of £96.6m (2014: 45.0m) and trading profits of £2.5m (2014: £0.3m). After adding back performance related awards of £15.6m (2014: £11.6m), Adjusted Earnings per share were 16.0p (2014: 43.3p).

EPRA Net Asset Value

EPRA net asset value per share increased by 23.0% to 385p per share (2014: 313p). This rise was principally due to a total comprehensive income of £74.9m (2014: £86.7m), plus an increase in the surplus on valuation of the trading and development stock to £36.2m (2014: £27.5m).

Income Statement

Rental income and property overheads

Gross rental income receivable by the Group in respect of wholly owned properties increased by 27.7% to £38.3m (2014: £30.0m). The Group's share of gross rents receivable in joint ventures reduced to £6.1m (2014: £6.6m) reflecting the termination of leases at Barts Square where the phase one residential development has commenced. See-through gross rents totalled £44.4m, an increase of 21.4% on 2014. After taking account of head rents payable on those properties held on long leases, and the costs of managing the assets, void costs and letting costs, see-through net rents increased by 29.5% to £38.6m (2014: £29.8m). Bad debts from tenant administrations and failures fell below 0.1% of gross rents (2014: 0.4%).

Development programme

Development profits were down on last year, which had seen exceptional profits at 200 Aldersgate London and White City of £62m. This year we have recognised 95% of the profit on the Clifton Street forward sale to UBS (Triton), amounting to £16.4m and development management fees on our Barts Square, The Bower and Creechurch Place developments, totalling £1.1m. In addition, our development management role in building the new Scottish Power headquarters in Glasgow has generated fees of £1.3m. In our joint ventures we have recognised £1.9m of development profit on our schemes at Leisure Plaza and C4.1, both in Milton Keynes. Our retirement village programme contributed £1.0m of profits. Set against these profits is an impairment of £3.0m against our retail development at Europa Centralna, Poland and a provision against a site in Telford of £1.0m.

Share of results of joint ventures

As mentioned above, Helical has increasingly sought to acquire larger assets in joint ventures with property funds that provide the majority of the equity required to purchase the assets, who in turn rely on Helical to provide the asset management or development expertise. These joint ventures include our share of the investment properties at Clyde Shopping Centre, Clydebank (sold in March 2015) and The Bower, 207 Old Street, London EC1, and our development schemes at Barts Square, London EC1; Creechurch Place, London EC3; Europa Centralna, Gliwice, Poland; Shirley Town Centre, West Midlands; Leisure Plaza, Milton Keynes and King Street, Hammersmith, London W6. Detailed analysis of the financial position of our share of these joint ventures is provided in note 16 to this report and the see-through analysis in Appendix 1. In the year under review, net rents of £4.4m (2014: £5.4m) were received, offset by net finance costs of £3.6m (2014: £2.5m). A gain on revaluation of the investment portfolio of £26.1m (2014: £15.7m), primarily arose in respect of Barts Square, London EC1 and The Bower, London EC1. Net of taxes, our joint ventures contributed £27.5m (2014: £16.4m).

Administration costs

Administration costs, before performance related awards, increased by 16%, from £8.8m to £10.2m. This reflects an increase in the number of asset managers and development executives within the Group as it expands its investment portfolio and moves through the delivery phase of its development portfolio as well as from costs incurred in connection with the move of the Company's head office to Hanover Square, London W1.

Performance related share awards and bonus payments, before National Insurance costs, reduced to £13.4m (2014: £15.7m) for the year. Of this amount, the £6.4m (2014: £6.3m) charge for share awards under the Performance Share Plan is expensed through the Income Statement but added back to Shareholders Funds through the Statement of Changes in Equity. The £6.9m (2014: £9.4m) accrual for bonus payments comprises £5.5m (2014: £5.1m) which will be paid in June 2015, £nil (2014: £2.9m) which will be carried forward to next year in accordance with the terms of the Annual Bonus Scheme 2012 and £1.4m (2014: £1.4m) which will be paid in deferred shares to be held for a minimum of three years. In addition, National Insurance of £3.0m (2014: £2.2m) has been accrued in the year.

Finance costs, finance income and derivative financial instruments

Interest payable on bank loans including our share of loans on assets held in joint ventures but before capitalised interest increased to £24.7m (2014: £17.3m), reflecting the increased debt taken on to finance the expansion of the Group's investment activities.

The fall in medium and long term interest rate projections since 31 March 2014 contributed to a charge of £8.4m (2014: credit of £5.3m) on the derivative financial instruments which have been valued on a mark to market basis.

Capitalised interest increased from £2.8m to £3.6m as development schemes progressed. Other interest payable increased from £2.5m to £6.3m as the Group wrote off £2.8m of costs incurred in issuing the £100m Convertible Bond. As a consequence of these movements, total finance costs increased by £10.3m from £17.0m to £27.3m. Finance income earned was £2.5m (2014: £1.2m).

Taxation

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

Investment portfolio

The issue of the £100m Convertible Bond in June 2014, together with sales of over £170m of investment assets, mainly shopping centres where our asset management initiatives were completed, provided funds, net of loan repayments, for £246m of acquisitions and £41m of further value enhancing capital expenditure. Revaluation surpluses of £68m (£1m attributable to our profit share partners) in our main portfolio and £26m in our joint venture assets, increased the overall size of the investment portfolio on a see-through basis to £790m (2014: £601m). The sales of investment assets generated profits of £2.5m (2014: £8.6m) in the main portfolio and £1.1m (2014: £nil) in our joint ventures.

Debt and financial risk

Since 31 March 2014, the Group has raised £100m through the issue of a five year Convertible Bond with a 4.00% coupon and £81m of long term debt repayable in December 2024 with a fixed interest rate of 3.48%. The composition of the Group's debt structure has significantly changed since 31 March 2014 with unsecured debt now representing 27% of debt drawn at 31 March 2015.

In total, Helical's outstanding debt at 31 March 2015 of £674.6m had an average maturity of 4.3 years (2014: 3.9 years) and a weighted cost of 4.1% (2014: 4.5%).

Debt profile at 31 March 2015 - excluding the effect of arrangement fees

*Net LTV is the ratio of gross borrowings less cash deposits to the fair value of the property portfolio.

The Group arranges its borrowings to suit its investment and development intentions as follows:

Investment facilities

These are typically for four to five years, financing the Group's investment portfolio and a fully let retail development at Wroclaw in Poland with loan to value and income covenants. The value of the Group's properties secured on these facilities at 31 March 2015 was £638,999,000 (2014: £486,280,000) with a corresponding loan to value of 58% (2014: 53%). The average maturity of the Group's investment facilities at 31 March 2015 was 4.6 years (2014: 3.7 years).

Development and site holding facilities

These facilities finance the construction of the retirement villages at Durrants Village, Horsham; Maudslay Park, Great Alne and Millbrook Village, Exeter. They also include a site holding facility at Telford. The average maturity of the Group's development and site holding facilities at 31 March 2015 was 2.0 years (2014: 3.0 years).

Joint venture bank facilities

As noted above, we hold a number of investment and development properties in joint venture with third parties and include, in the above table, our share, in proportion to our economic interest, of the debt associated with each asset. During the year we agreed a new five year facility to December 2019 providing finance for the first phase of the redevelopment of Barts Square, London EC1. The average maturity of the Group's share of bank facilities in joint ventures at 31 March 2015 was 3.0 years (2014: 2.5 years).

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 an unsecured Convertible Bond with a 4.00% coupon, repayable in June 2019 or, subject to certain conditions, convertible at the option of the bondholders 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.

Short term working capital facilities

These facilities provide working capital for the Group.Cash and cash flow

At 31 March 2015, the Group had over £229m (2014: £186m) of cash and agreed, undrawn, committed bank facilities including its share in joint ventures as well as £131m (2014: £82m) of uncharged property on which it could borrow funds.

Net borrowings and gearing

Net borrowings held by the Group have increased during the year from £312.8m to £477.2m. Including the Group's share of net debt of its joint ventures the Group's share of total net debt has increased from £365.1m to £531.9m. There has been a corresponding increase from 99% to 113% in see-through net asset value gearing. This gearing measure, which is the ratio of see-through net borrowings to EPRA net asset value, represents a longer term view than the standard gearing measure.

Hedging

At 31 March 2015 the Group had £496.9m (2014: £291.5m) of fixed rate debt with an average effective interest rate of 4.4% (2014: 4.8%) and £98.1m (2014: £84.6m) of floating rate debt with an average effective interest rate of 2.4% (2014: 3.50%). In addition, the Group had £143.2m of interest rate caps at an average of 4.0% (2014: £132m at 4.0%). In the joint ventures, the Group's share of fixed rate debt was £49.6m (2014: £29.6m) with an average effective interest rate of 5.0% (2014: 6.0%), and £21.6m (2014: £43.6m) of floating rate debt with an effective rate of 3.4% (2014: 3.3%). In addition, the joint ventures benefited from £35.0m (2014: £49.0m) of interest rate caps at an average of 5.0% (2014: 5.0%).

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 2015, this interest cover was 2.5 times (2014: 8.3 times).

Tim MurphyFinance Director

28 May 2015

Helical's Property Portfolio - 31 March 2015

Helical's Portfolio by Fair Value

Investment Portfolio (Helical's share)

Portfolio yields

Note: this analysis excludes Barts Square, London EC1 and The Bower, 207 Old Street, London EC1

Valuation movements, portfolio weighting and changes to rental values

Note: includes sales, purchases and capex.

Capital values, vacancy rates and unexpired lease terms

Trading and development portfolio (Helical's share)

Note: the table above includes the Group's share of development properties held in joint ventures.

Investment Portfolio Overview

Our £789.8m investment portfolio provides income for the Group. We have a strong focus on asset management, maximising net operating income and working closely with our tenants.

Our aim is to have at least 75% of our portfolio in investment properties and 25% in development properties, blending stable recurring income with exposure to potentially superior profitability in developments. We currently have 77% of our assets in investment properties and, having realised our stated goal, we will look to broadly retain this balance going forward.

Our income stream is diverse and secure with no tenant accounting for more than 6.2% of the rent roll. Our average weighted unexpired lease term is 7.0 years (2014: 7.2 years).

The income stream has grown steadily since 2010 and is highly reversionary. The passing rent from our investment portfolio is £36.7m (2014: £37.7m) and the estimated rental value of our portfolio is £59.5m (2014: £45.6m). This reversionary income will be captured through letting vacant units and rent reviews.

The marginal fall in passing rent at 31 March 2015 reflects the impact of the sale of the majority of our in-town retail portfolio, including Corby Town Centre, Clyde Shopping Centre, the Guineas Newmarket and Idlewells in Sutton-in-Ashfield. These assets have been replaced with a number of logistics purchases.

Furthermore, through judicious buying of under-rented buildings in growth areas, securing lettings and undertaking refurbishments, we aim to generate substantial capital growth in our property values.

Investment Property Portfolio Values

At 31 March 2015, the investment property portfolio was valued at £789.8m (31 March 2014: £600.7m), with £701.5m (31 March 2014: £493.2m) held in wholly owned subsidiaries and £88.3m (31 March 2014: £107.5m) held in joint ventures, as set out below.

Acquisitions and Sales

It has been another extremely active year of buying and selling. During the year we have acquired 58 properties, the equivalent of one purchase every six days. In aggregate, we have acquired £276.7m of assets (including costs) with £245.7m added to our investment portfolio and £31.0m traded out of portfolios, either on acquisition or shortly afterwards. Net sales values totalled £211.2m with £133.8m of net proceeds from the sale of investment properties, £41.4m being our share of the net proceeds of the sale of Clyde Shopping Centre and £36.0m being the net proceeds from the sale of trading properties. Including capital expenditure of £41.1m, this represents a net investment in investment assets of £106.6m.

During the year we acquired five portfolios of industrial/logistics, out-of-town retail and office investments. In April 2014 we acquired The Constellation Portfolio, a mixed-use portfolio for £40.2m reflecting an 8.35% net initial yield. In August we acquired a portfolio of eleven industrial and distribution warehouse assets, known as the Boss Portfolio, for £29.7m, reflecting a net initial yield of 8.0% (excluding a vacant property at Rugby which was subsequently sold). In December we acquired the Sun and Mint Portfolios for £46.6m, reflecting a net initial yield of 7.9%. The Sun Portfolio comprised three single let units and two multi let industrial estates of eight units. We also acquired the 4:2 Portfolio for £22.1m reflecting a net initial yield of 8.3%. This comprised three office properties and two industrial properties (excluding an office in Southampton which was sold on completion of the purchase). In addition we have purchased two retail warehouses in Harrogate and Stockport for £12.1m at a net initial yield of 6.95% and a regional distribution warehouse in Yate, Bristol, for £11.5m at a net initial yield of 10.1%. We have also acquired a distribution facility in Leighton Buzzard for £9.9m at a net initial yield of 7.85% and a distribution warehouse in Hinckley, Leicestershire for £9.5m at a net initial yield of 7.75%, as well as a number of smaller assets.

The most significant sales have been of our shopping centres, including Corby for £71.7m, Clydebank for £69.7m (Helical's share 60%), Newmarket for £18.2m and Sutton-in-Ashfield for £16.1m. This has concluded our move out of in-town retail.

Capital Expenditure

We have a refurbishment and redevelopment programme upgrading and increasing space at a number of our investment properties.

Asset management

During the year contracted income increased by £1.1m as a result of new lettings and rent reviews, net of any losses from breaks and expiries (2014: £0.4m).

There was significant activity within the investment portfolio with a lease event on over 200 leases.

We concluded £5.1m of new lettings and uplifts at renewal (12.2% rent roll) and benefitted from uplifts at rent review of £0.1m (0.3% rent roll), offsetting the loss of rent at lease end or break (£4.0m, 9.6% rent roll) and a further £0.1m through tenant administrations (0.3% rent roll).

Overall we have seen good letting demand across the portfolio, maintaining our vacancy rate around 5.0% (31 March 2014: 4.6%). Circa £1m of rent has deliberately been forgone as properties are vacated for redevelopment and refurbishment. We have seen strong take up and rental growth in our London office portfolio with estimated rental values increasing by 20.4% in the year for our London portfolio (excluding Barts Square, London EC1 which will be redeveloped).

Lease expiries or tenant break options

We have a strong rental income stream and a diverse tenant base, with no single tenant accounting for more than 6.2% of the rent roll. The top 10 tenants account for 33% of the total rent roll and the tenants come from diverse industries.

The London Portfolio

The Bower, 207 Old Street, EC1

This 3.12 acre asset was acquired in November 2012 for £60.8m in joint venture with Crosstree Real Estate Partners LLP (Helical interest 33.3%). 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 benefitting from substantial investment in infrastructure.

Since acquisition, a planning consent has been obtained 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.

Phase One

Building work started on Phase one (211 Old Street) in January 2014 comprising The Warehouse, 127,300 sq ft and The Studio, 22,109 sq ft, and is due for completion in July 2015. During this process rental income is still being received on the retail parade and the office building at 207 Old Street. The basement area under the retail parade has been let to Gym Box at a rent of £150,000 pa.

The current letting position on Phase one is as follows:-

Phase Two

Comprising The Tower (207 Old Street), planning has been obtained to comprehensively refurbish the existing building of 114,900 sq ft NIA, increasing the building to 170,000 sq ft NIA of office and 7,300 sq ft of retail/A3. Works are due to commence in July 2015.

Barts Square, EC1

In joint venture with The Baupost Group LLC (Baupost 66.7%, Helical 33.3%), we own the freehold interest in land and buildings at Bartholomew Close, Little Britain and Montague Street, a 3.2 acre site adjacent to the new Barts Hospital and just south of Smithfield Market. Existing buildings are let to the NHS on a number of short term leases that expire in 2016.

Planning consent has been obtained for a comprehensive redevelopment of 19 buildings to provide a total of 236 residential apartments, three office buildings of 211,000 sq ft, 23,485 sq ft and 10,200 sq ft, 16,300 sq ft of retail /A3 at ground floor as well as major public realm improvements, which will be incorporated into the wider Smithfield Area Strategy being worked up by the City of London.

Phase One - Residential/offices/retail

Phase one of the redevelopment of Barts Square, comprising 144 residential units, 10,200 sq ft of retail space, 23,485 sq ft of new offices behind retained facades, the refurbishment of offices at 54-58 Bartholomew Close and public realm improvements. The demolition of buildings in Bartholomew Close and Little Britain commenced in January 2015, with the retention of various facades behind which the buildings are being demolished. Completion of Phase one is expected in summer 2017. 92 residential units were launched in September 2014 and 64 have been sold for a total sales value of c. £87m at an average £1,574 psf.

Phase Two - One Bartholomew Close

Demolition of the existing buildings and the construction of a new 12 storey office block of c. 211,000 sq ft, to be called One Bartholomew Close, will commence in 2016, once vacant possession of the building is achieved. The building is due to be completed in 2018.

Phase Three - Residential/retail

Phase three of the redevelopment of the site, involving the demolition of Queen Elizabeth II House, 62 Bartholomew Close and 45-47 Little Britain is expected to commence after vacant possession of these buildings is obtained at the end of 2016. In their place, 92 residential units and 10,700 sq ft of retail space will be constructed.

Clifton Street, Shoreditch EC2

In November 2013, we committed to forward purchase a new 45,000 sq ft (NIA) office building in Clifton Street, London EC2 for £21m. Since contracting to acquire the building, Helical has worked with the developer to achieve a revised planning consent and to refine the building's specifications to ensure it meets the demands of the Shoreditch tech occupiers. It was intended that the Group would complete the freehold purchase upon practical completion of the construction in summer 2015. However, on 30 September 2014, Helical exchanged contracts on the forward sale of 99 Clifton Street for £38.25m, allowing the Group to recognise development profits of £16.4m in the year.

One Creechurch Place, City of London EC3

One Creechurch Place, London EC3 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 will jointly fund 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. It is anticipated the completed development will have a capital value of c. £250m. Demolition and ground works have been completed to facilitate the construction of a new building comprising 271,000 sq ft NIA of offices and 2,227 sq ft of retail, which is expected to be completed in September 2016.

C-Space, 37-45 City Road, EC1

Helical acquired C-Space in June 2013. Planning consent has been obtained for a complete refurbishment of the building which will increase the previous existing 50,000 sq ft office building to 62,000 sq ft. The works involve 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. Works have commenced and are expected to complete by August 2015. Significant interest is being shown by prospective tenants and we expect to let c. 75% of the new space before completion.

23-28 Charterhouse Square, Smithfield EC1

In December 2014, Helical exchanged contracts to acquire a new 155 year leasehold interest in 23-28 Charterhouse Square, London EC1 from the Governors of Sutton's Hospital in Charterhouse for £16m. The Group plan to carry out a major refurbishment of the existing building, increasing the current 34,000 sq ft to 38,600 sq ft NIA of offices and 5,350 sq ft of retail/restaurant use with the addition of a new sixth floor. Works are due to commence in December 2015 and the completed building is expected to be delivered in late 2016.

King Street,Hammersmith W6

King Street, Hammersmith W6 is a mixed use scheme, in joint venture with Grainger plc, for the regeneration of the west end of King Street. Planning permission for the scheme was granted in April 2014 for 196 apartments, a three screen cinema to be operated by Curzon, new retail, restaurant and café space and replacement offices for the Council with a new public square. During the period the joint venture acquired the existing cinema which is now let on a short term basis to the current operator. Work is expected to commence in late 2015.

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 seven consecutive years. The refurbishment of the common parts including new receptions and a café/bar is now complete. These works have given the building a refresh and have been positively received by occupiers. Significant rental growth is beginning to be seen with ERV now c. £50 psf compared to an average passing rent of £30.50 psf. The most recent significant letting in the building in February 2015 was at £47.50 psf.

New Loom House, Whitechapel E1

This 112,000 sq ft listed building was acquired in 2013 and Helical has secured planning consent for a comprehensive refurbishment/reconfiguration of the common parts to include a new entrance/reception, showers, bike store, refurbishment of c.15,000 sq ft of offices, including the creation of a single 11,000 sq ft unit and 4,000 sq ft of café and restaurants. The works are underway and are due for completion in early 2016. Strong rental growth is already being achieved with new lettings being done at £37.50 psf compared to an average passing rent of £22.00 psf. Further increases in rents are anticipated as the opening of Crossrail approaches.

Enterprise House, Paddington W2

Enterprise House, Paddington W2 is a freehold investment adjacent to Paddington Station in London comprising 45,000 sq ft of offices. The building was acquired on a sale and lease back agreement from Network Rail, which holds a 20 year lease without breaks, for c.£31m representing a 5.7% yield generating annual rental income of £1.8m.

Artillery Lane, Bishopsgate E1

Artillery Lane, Bishopsgate, E1 is an office building in the City of London. The building is undergoing work to provide 17,000 sq ft of newly refurbished offices. Acquired for £6.8m in 2013 the property has been sold to Standard Life for £15.1m once the refurbishment works which will cost £3.2m are completed in September 2015. A new 25 year lease with Manicomio has been signed on the ground and lower ground floor to operate a restaurant.

One King Street, Hammersmith, London W6

One King Street, Hammersmith W6 is a 35,000 sq ft building acquired in 2012 comprising 22,000 sq ft of offices and 13,000 sq ft of retail. Refurbishment of the fourth floor and the addition of a fifth floor of offices on top of the building is expected to be completed by August 2015 providing 3,500 sq ft of extra space.

Chart House, Islington N1

Chart House is a 10,500 sq ft office building in Islington which was acquired during the year. There is currently planning consent for an additional floor of residential on top of the building. It is our intention to renegotiate the planning consent and add an extra floor of office accommodation in place of the planned residential upon getting vacant possession in 2018.

The Regional Portfolio

Our regional portfolio provides significant income for the Group. We have a broad spread of income providing diversity between tenants and sectors of the market. Our £419.6m regional investment portfolio comprises £103.5m of offices (13.0% of the investment portfolio), £145.7m of industrial/logistics (18.5%) £159.1m of retail comprising £97.9m of retail warehousing and £61.2m of in town retail, largely Cardiff (in aggregate 20.2%) and £11.3m of retirement village investment assets (1.4%).

Our strategy is to acquire multi-tenanted properties where there is significant opportunity to increase net operating income and capital values. We acquire properties with rents which are low compared to equivalent buildings, providing scope for rental growth. We spend a considerable amount of time talking to our tenants both prior to acquiring properties and during the course of our ownership to ensure that the space they occupy continues to be fit for their purpose.

Distribution Warehouses

Helical has 36 distribution and light industrial units located around major UK transport networks. These units generally have very few bespoke features making them straightforward to re-let if vacancies occur. In the majority the assets are single let with a few multi-let estates. Significant assets within the portfolio include a 250,000 sq ft distribution warehouse let to Sainsbury's in Yate, Bristol, a 200,000 sq ft facility in Leighton Buzzard, Bedfordshire, a 190,000 sq ft distribution warehouse in Hinckley, Leicestershire let to Triumph Motorcycles and a 150,000 sq ft distribution warehouse let to Polypipe in Doncaster, Yorkshire.

Regional Offices

Churchgate and Lee House, Manchester

Helical acquired Churchgate and Lee House, two interlinked office buildings comprising 248,000 sq ft of offices, in March 2014. We have refurbished the reception, café and fourth floor of Churchgate House and continue to reposition the asset. Projects are underway to refurbish the first floor of Lee House and the Courtyard Suite where we hope to attract the TMT Sector. We are also remodelling the reception of Lee House. Since acquisition we have let in excess of 30,000 sq ft and have a further 10,000 sq ft under offer.

Dale House, Manchester

Dale House is a 43,000 sq ft office building situated in the Northern Quarter of Manchester. It is fully let to a number of tenants with an average rent of £12.00 psf and was acquired in March 2015 for £7.4m. The property is a long term hold with plans to refurbish the building over time and moving rents upwards as the location improves.

St Vincent Street, Glasgow

In partnership with local development partner, Dawn Developments Ltd, Helical is the development manager for the construction of the new headquarters building for Scottish Power at St Vincent Street, Glasgow. The completed building will comprise circa 220,000 sq ft of prime office space in the heart of the City's commercial district. Funded by M&G Investments, the scheme is under construction and all works including Scottish Power's fit out, are due to be completed in February 2016. As part of the overall deal, Helical is taking on three existing Scottish Power sites which are surplus to requirements. At Cathcart we have received planning permission for a change of use of the grounds of Cathcart House to 158 residential units and will look to sell the site. At Yoker, we have agreed heads of terms with a supermarket operator to sell the site and at Falkirk we have agreed a sale of the site with completion expected in October 2015.

Retail Warehousing

We have acquired a number of retail warehouse assets during the year including properties in Harrogate, Stockport, Southend-on-Sea, Scarborough, Ellesmere Port and Stoke-on-Trent. We see good occupational demand in this sector with vacancy levels at a long term low.

Retail Developments

Parkgate, Shirley, West Midlands

The Shopping Centre at Parkgate, Shirley, where Helical has a 50% interest has completed on site and the 80,000 sq ft Asda together with a number of other retailers have opened successfully for trade. The space beyond the food-store is 80% pre-let to occupiers such as Peacocks, 99p Stores, Pizza Express, Wetherspoons, Prezzo, Shoe Zone and Shirley Library. Two residential sites have been sold to provide 97 private and extra-care units, six apartments and eight townhouses which are being built out directly. The food-store has been pre-sold to Asda and the retail units will be marketed for sale once the remaining units are let.

A second phase high density residential led scheme is being considered on a ten acre site of opposite the Parkgate scheme. Terms have been agreed with a care home provider, a residential developer and a supermarket operator for a petrol filling station.

Truro

In Truro Helical has entered into a Conditional Purchase Agreement on the six acre Truro City Football Club site and have submitted a Planning Application for a 78,000 sq ft non-food retail park. The scheme proposals provide for the relocation of the football club and, if approved, we anticipate starting on site in May 2016.

Cortonwood

Planning consent has been secured at appeal and marketing is in hand for an 80,000 sq ft Open A1 non-food retail park. Negotiations are proceeding with a number of leading fashion retailers and a start on site in anticipated in January 2016, once funding has been obtained.

Park Handlowy Mlyn, Wroclaw

Wroclaw is a large city in West Poland, some 100km from the German border and 470km south of Warsaw. This 9,600 sq m (103,000 sq ft) out-of-town retail development was completed in December 2008 and is fully let to a number of domestic and international retailers including Sports Direct, T K Maxx, Media Expert, Makro, Deichmann, Smyk, Komfort and others. We have agreed terms to sell the development at a price marginally above book value and expect to complete the sale by July 2015.

Europa Centralna, Gliwice

This retail park and shopping centre was built in 50:50 joint venture with clients of Standard Life. The scheme is situated to the south of Gliwice at the intersection of the A4 and A1 motorways. This highly visible scheme has good accessibility and is becoming a major regional shopping destination. It comprises approximately 66,000 sq m (720,000 sq ft) of retail space, incorporating three distinct parts; being a foodstore, DIY and household goods and fashion outlets. The scheme is now over 85% let to Tesco, Castorama, H & M, Media Saturn, Sports Direct, Jula and others. Construction was completed in February 2013 and the scheme opened on 1 March 2013. Helical's sale of 50% in 2011 includes a provision that we will sell the remaining ownership stake two years after the date of completion of the development to the same clients of Standard Life. This is now expected to complete in June 2015.

Retirement Villages

A retirement village is a private residential community in which active over-55s are able to live independently in retirement. Residents have typically down-sized from a larger family home into a cottage or apartment which ensures no maintenance or security issues.

With access to a central clubhouse containing a bar and restaurant facilities, health and fitness rooms and surrounded by maintained grounds, this retirement option is proving increasingly popular. We have four retirement village developments.

Bramshott Place, Liphook, Hampshire

The original Bramshott Place Village was an Elizabethan mansion built in 1580, although now only the original Grade II listed Tudor Gatehouse remains which Helical has fully restored. The land and buildings were derelict when we acquired the site in 2001. Changing planning from its previously designated employment use to a retirement village took several years but was eventually achieved in 2006.

The development of 151 cottages and apartments, and the new clubhouse, has completed. To date, we have sold 147 units with one reserved and just three units, all apartments, left to sell.

Durrants Village, Faygate, Horsham, West Sussex

Durrants Village, a 30 acre site, had operated as a saw-mill with outside storage for many years. Helical was granted planning permission, at appeal, in May 2009 where the Inspector allowed a development comprising a retirement village of 148 units, eight affordable housing units, a 50 bed residential care home and a central facilities clubhouse building. Following changes to the scheme the development will now comprise 173 units. The first phase started in May 2012 for the construction of the retirement village and clubhouse and we have sold 28 units, exchanged on one further sale and have reservations on 10 additional units in the first two phases.

Maudslay Park, Great Alne, Warwickshire

This is a Green Belt site which has 320,000 sq ft of built footprint and benefits from Major Development Site planning policy. Covering 82 acres, this site received outline planning permission in April 2011 for a retirement village of 164 units. Demolition and enabling works have completed but construction has been delayed by the receivership of the contractor. We have reservations on three units.

Millbrook Village, Exeter

This 19 acre site was acquired in 2007 from the St Loye's Foundation, a long established rehabilitation college in the City of Exeter. Resolution to grant planning permission was obtained in October 2009 for a retirement village of 206 units, a 50 bed residential care home, an affordable extra-care block of 50 units and a central facilities clubhouse building. Demolition, site clearance and archaeological survey work have been completed. In 2011 we received planning consent for 63 open market housing units on part of the site and sold this in summer 2012. Construction of a 164 unit retirement village and clubhouse in phases on the remainder of the site commenced in October 2013. We have sold seven units, have exchanged contracts on a further four units and have reservations on 22 other units.

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated and Company Balance Sheets

Consolidated and Company Cash Flow Statements

Consolidated and Company Statements of Changes in Equity

For the year to 31 March 2015

For a breakdown of Total comprehensive income/expense, see the Consolidated Statement of Comprehensive Income.

Included within changes in equity are net transactions with owners of £10,840,000 (2014: £89,000) made up of: the performance share plan charge of £6,432,000 (2014: £6,333,000) and related deferred tax of £2,477,000 (2014: £nil), dividends paid of £7,944,000 (2014: £6,660,000), the purchase of own shares of £13,349,000 (2014: £950,000), new share capital issued of £120,000 (2014: £nil) and the share settled bonuses of £1,424,000 (2014: £1,366,000).

The adjustment to retained earnings of £6,432,000 adds back the performance share plan charge (2014: £6,333,000), in accordance with IFRS 2 Share-Based Payments.

Total comprehensive income is made up of the loss after tax of £1,316,000 (2014: gain of £23,072,000).

Included within changes in equity are net transactions with owners of £7,824,000 (2014: £6,660,000) made up of dividends paid of £7,944,000 (2014: £6,660,000) and new share capital issued of £120,000 (2014: £nil).

Notes:

Share capital - represents the nominal value of issued share capital.Share premium - represents the excess of value of shares issued over their nominal value.Revaluation reserve - represents the surplus/deficit of fair value of investment properties over their historic cost.Capital redemption reserve - represents amounts paid to purchase issued shares for cancellation at their nominal value.Retained earnings - represents the accumulated retained earnings of the Group.

Notes to the preliminary results

1. Basis of preparation

These financial statements have been prepared in accordance with applicable International Financial Reporting Standards ("IFRS"), including International Financial Reporting Interpretations Committee ("IFRIC") interpretations as adopted by the European Union and as issued by the International Accounting Standards Board ("IASB").

The Directors have taken advantage of the exemption offered by Section 408 of the Companies Act 2006 not to present a separate income statement for the parent company.

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 and derivative financial instruments.

The principal accounting policies of the Group are set out in the Group's 2014 annual report and financial statements. There has been no significant change to these since the previous annual report.

The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.

Responsibility statement

The Statement of Directors' responsibilities below has been prepared in connection with the Group's full Annual Report for the year ended 31 March 2015. Certain parts of the Annual Report have not been included in the announcement. We confirm that to the best of our knowledge:

• the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

• the annual review, which is incorporated into the Report of Directors, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Approved by the Board on 28 May 2015 and signed on its behalf by:

Tim Murphy

Director

2. Segmental information

IFRS 8 requires the identification of the Group's operating segments which are defined as being discrete components of the Group's operations whose results are regularly reviewed by the Chief Operating Decision Maker (being the Chief Executive) to allocate resources to those segments and to assess their performance. The Group divides its business into the following segments:

• 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,

• Developments, which include sites, developments in the course of construction, completed developments available for sale, pre-sold developments and interest in third party developments.

All revenue is from external sales and is attributable to continuing operations. There were no inter-segmental sales.

Revenue for the year comprises revenue from construction contracts of £nil (2014: £nil), revenue from the sale of goods of £63,953,000 (2014: £62,965,000), revenue from services of £4,056,000 (2014: £30,678,000), and rental income of £38,332,000 (2014: £29,994,000).

All revenues are within the UK other than rental income from development properties in Poland of £1,086,000 (2014: £1,065,000) and £630,000 (2014: £835,000) of development income derived from the Group's operations in Poland.