TIDMWAFR
RNS Number : 0583P
Walls & Futures REIT PLC
29 August 2017
Walls & Futures REIT plc
(Epic: WAFR)
Final Results for the period ended 31 March 2017
The Board of Walls & Futures REIT plc ("the Company") is
pleased to announce its audited Final Results for the period ended
31st March 2017.
The Company has had a busy and productive year, completing the
restructure, raising over GBP1m in new equity and obtaining
admission to the NEX Exchange Growth Market. With those tasks
complete we now have the platform to scale the Company and achieve
our goal of delivering secure long term income with capital growth
from UK residential property.
The last 18 months has seen a number of significant achievements
including:
-- successfully restructured the Walls & Futures London Growth Fund;
-- GBP1m in new equity raised in November 2016;
-- admission to the NEX Exchange Growth Market;
-- REIT status obtained;
-- completion of first investment in the Supported Housing Sector;
The costs incurred in restructuring the group, together with a
small decline in the capital value of the London portfolio, equated
to approximately 10p per share with a resultant fall in Net Asset
Value at the year end to just above 90p per share. However, we are
confident that the half year figures will show an improvement on
this number.
In order to deliver the best outcome, our strategy is to build a
portfolio of high yielding residential properties that offer secure
income from high quality tenants. Ideally, the properties will be
let on long leases with rents increasing in line with inflation in
order to provide an element of predictable growth.
We have shifted our focus from the London Private Rented Sector
to the Social Housing Sector as its profile matches the investment
criteria better. With a large and growing need for this type of
property, we feel that we can make a positive social impact at the
same time as delivering on our investment goals.
A significant milestone, achieved after the financial year end,
has been our first investment in the Social Housing Sector - a
grade two listed building in the Cotswolds market town of Stroud.
Once the extensive redevelopment program is completed, it will
provide a high quality home with specialist support to six adults
with physical & learning disabilities and/or mental health
needs. The property is already let on a 25-year full repairing and
insuring lease, with rents adjusted annually in line with inflation
(CPI), to one of the UK's leading care providers which has more
than 50 years' experience in the sector and currently supports more
than 2,500 adults nationwide.
We are currently fully invested and intend to fund our pipeline
with a placing and open offer of new shares in the near future.
Joe McTaggart (Chief Executive) commented:
"Everyone at Walls & Futures has worked incredibly hard to
build a solid foundation from which we can move forward. We have a
strong pipeline and are working on some exciting projects that we
want to complete over the next few months. All of our properties
are now let which will transform our revenue stream as we
progress".
The Directors accept responsibility for this announcement.
For further information please contact:
WALLS & FUTURES REIT plc
Joe McTaggart 0333 700 7171
joe@wallsandfutures.com
Walls & Futures REIT
plc
3(rd) Floor
111 Buckingham Palace
Road
London
SW1W 0SR
www.wallsandfutures.com
CITY & MERCHANT
David Papworth 0207 101 7676
info@cityandmerchant.com
Level 17, Dashwood House
69 Old Broad Street,
London
EC2M 1QS
Note to Editors:
Walls & Futures REIT plc is a Real Estate Investment Trust
investing in residential property in the UK. Our primary focus is
on the social housing sector making both a positive social impact
and generating rental returns on our investment properties.
We provide tailored housing solutions for a variety of
organisations that encompasses funding, building design, project
management and property development. Our strategic partners include
local authorities, NHS trusts, housing associations, housing and
social care charities and other care providers.
Our target is to deliver a long-term annual net return of 7-9%
of which 3-4% will be paid in the form of a dividend. This will be
achieved by building a portfolio of high yielding residential
properties that offer secure income from high quality tenants. The
properties will ideally be let on long term leases with rents
increasing in line with inflation in order to provide an element of
predictable growth.
The extracts from the Report and Accounts of the Company set out
below are for the first trading period of the Company.
Strategic Report for Walls & Futures REIT plc
Walls & Futures REIT plc is a property investment company
with REIT status. The Company's focus is on providing sustainable
income with long term capital growth by investing in and developing
residential property.
This is the Company's and Group's maiden annual report which is
for the period ended 31st March 2017.
Overview & Strategy
Following the restructure of the Walls & Futures London
Growth Fund, the Company's shares were successfully admitted to
trading on the NEX Exchange Growth Market in November 2016. As part
of the admission the Company raised GBP1.025m in new equity.
As a result of the costs associated with the restructure and
admission, the Group has posted a loss for the period of GBP314,497
of which GBP202,333 are exceptional items.
The current portfolio consists of properties transferred from
the London Growth Fund which are located in Southfields and
Wimbledon (South West London). They were originally acquired and
redeveloped with the aim of generating capital growth.
However, in order to deliver on its investment focus, its
strategy has evolved to building a portfolio of high yielding
residential properties that offer secure income from high quality
tenants. The properties will ideally be let on long leases with
rents increasing in line with inflation in order to provide an
element of predictable growth.
While the London Private Rented Sector (PRS) has many attractive
qualities, the directors feel the UK Social Housing Sector with
properties let to Registered Social Landlords will make for an
improved investment outcome. The initial focus will be Supported
Housing, however as the Group scales, it may expand to Extra Care
and General Needs.
Key performance indicators
The capital value of the company's London PRS portfolio fell by
GBP30,000. This was in line with expectations and with the slowdown
currently being experienced in the London property market. The
directors do not expect values to increase in the short term and
there is a possibility that they could soften further. This
reinforces the decision to invest in the UK Social Housing
Sector.
Post balance sheet event
On 4th May 2017, the Company completed the purchase of a grade
two listed building, in the Cotswold market town of Stroud, for
GBP475,000. The property is let on a 25-year full repairing and
insuring lease, with rents adjusted annually in line with inflation
(CPI), to one of the UK's leading care providers.
The acquisition is the first in the supported housing sector and
illustrates the new investment focus. The financial benefits will
be seen in the next report.
Principle Risks & Uncertainties
The Group portfolio is exclusively invested in the UK and
therefore exposed to the risks and uncertainties of the UK
economy.
The value of the properties are subject to fluctuating market
conditions and may be affected by consumer confidence, the
performance of the UK economy and liquidity in the market.
Although the Group does not have any borrowings and is therefore
not currently exposed to interest rate risk, it has an ongoing
requirement to fund its activities through the equity markets and
in the future to obtain finance for property acquisitions. There is
no certainty that such funds will be available when needed and thus
inhibit growth.
Risk management
The success of the Group is predicated on increasing the size of
the portfolio, which would be at risk without further capital. In
order to mitigate this, the directors will be engaged in regular
fund raising.
Outlook
Admission to the NEX Exchange Growth Market and achieving REIT
status has provided a platform on which the management team can
build a successful property company providing sustainable income
with long term capital growth. The directors will continue to seek
out further investments in line with the investment strategy and
are actively developing a pipeline of new opportunities.
ON BEHALF OF THE BOARD:
J K McTaggart - Director Date: 24 August 2017
REPORT OF THE DIRECTORS
For The Period 18 March 2016 to 31 March 2017
The directors present their report with the financial statements
of the company and the group for the period 18 March 2016 to 31
March 2017.
Commencement of Trading
The company commenced trading on the 1st April 2016.
Dividends
No dividends will be distributed for the period ended 31 March
2017.
Events Since The End of The Period
Information relating to events since the end of the period is
given in the notes to the financial statements.
Directors
The directors shown below have held office during the whole of
the period from 18 March 2016 to the date of this report.
J K McTaggart appointed 14 June 2016
D P White appointed 14 June 2016
P A Wylie appointed 28 July 2016
D K Papworth appointed 18 March 2016
- resigned 14 June 2016
T H G Lyle appointed 18 March 2016
- resigned 14 June 2016
Statement of Directors' Responsibilities
The directors are responsible for preparing the Group Strategic
Report, the Report of the Directors and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have elected to prepare the financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law), including
Financial Reporting Standard 102 'The Financial Reporting Standard
applicable in the UK and Republic of Ireland'. Under company law
the directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of
affairs of the company and the group and of the profit or loss of
the group for that period. In preparing these financial statements,
the directors are required to:
- select suitable accounting policies
and then apply them consistently;
- make judgements and accounting estimates
that are reasonable and prudent;
- state whether applicable accounting
standards have been followed, subject
to any material departures disclosed
and explained in the financial statements;
- prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the company
will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company's and
the group's transactions and disclose with reasonable accuracy at
any time the financial position of the company and the group and
enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the company and the group and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
Statement as to Disclosure of Information to Auditors
So far as the directors are aware, there is no relevant audit
information (as defined by Section 418 of the Companies Act 2006)
of which the group's auditors are unaware, and each director has
taken all the steps that he ought to have taken as a director in
order to make himself aware of any relevant audit information and
to establish that the group's auditors are aware of that
information.
Auditors
The auditors, Kingston Smith LLP, will be proposed for
re-appointment at the forthcoming Annual General Meeting.
ON BEHALF OF THE BOARD:
J K McTaggart - Director
Date 24 August 2017
Consolidated Income Statement
For the period from 18th March 2016 to 31 March 2017
GBP
Turnover 45,400
Cost of Sales 15,461
_________
GROSS PROFIT 29,939
Loss on revaluation
of investment property 30,000
Administrative Expenses 112,342
_________
OPERATING LOSS (112,403)
Cost of fundamental
reorganisation 202,333
_________
(314,736)
Interest receivable
and similar income 22
_________
(314,714)
Interest payable and
similar expenses 2
_________
LOSS BEFORE TAXATION (314,716)
Tax on loss (219)
_________
LOSS FOR THE FINANCIAL
PERIOD (314,497)
=========
Loss attributable to
Owners of the parent (314,497)
=========
Consolidated Other Comprehensive Income
For the period 18 March 2016 to 31 March 2017
GBP
LOSS FOR THE PERIOD (314,497)
OTHER COMPREHENSIVE
INCOME
Gain on bargain purchase 2,509
Income Tax relating -
to other comprehensive
income
_________
OTHER COMPREHENSIVE
INCOME FOR THE PERIOD,
NET OF INCOME TAX 2,509
TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD (311,988)
Total comprehensive
income attributable
to Owners of the parent (311,988)
Basic earnings per
share (0.17)
Consolidated Statement of Financial Position
31 March 2017
FIXED ASSETS GBP GBP
Investments -
Investment Property 2,150,000
_________
2,150,000
CURRENT ASSETS
Debtors 4,749
Cash at Bank 842,911
_________
847,660
CREDITORS
Amounts falling due
within one year 19,423
NET CURRENT ASSETS 828,237
_________
TOTAL ASSETS LESS CURRENT
LIABILITIES 2,978,237
=========
CAPITAL AND RESERVES
Called up share capital 164,511
Share premium 3,125,714
Retained earnings (311,988)
SHAREHOLDERS FUNDS 2,978,237
The financial statements were approved by the Board of Directors
on 24 August 2017 and were signed on its behalf by:
J K McTaggart DIRECTOR
D P White DIRECTOR
Consolidated Statement of Changes in Equity
For the period 18 March 2016 to 31 March 2017
Called Retained Share Total
up share earnings premium Equity
capital
Changes in equity GBP GBP GBP GBP
Issue of share
capital 164,511 - 3,125,714 3,290,225
Total Comprehensive
income - (311,988) - (311,988)
_________ _________ _________ _________
164,511 (311,988) 3,125,714 2,978,237
========= ========= ========= =========
Consolidated Statement of Cash Flows
For the period 18 March 2016 to 31 March 2017
GBP
Cash Flows from Operating
Activities
Cash used in operations 268,115
Interest paid (2)
Tax paid 781
_________
Net Cash outflow from
operating activities (267,336)
_________
Cash Flows from investing
activities
Interest Received 22
_________
Net cash outflow from
financing activities 22
_________
Cash Flows from financing
activities
Share Issue 1,110,225
_________
Net cash outflow from
financing activities 1,110,225
_________
Increase in cash and
cash equivalents 842,911
Cash and cash equivalents -
at beginning of the
period
_________
Cash and cash equivalents
at the end of the period 842,911
=========
Notes to the Consolidated Financial Statements
For the Period 18 March 2016 to 31 March 2017
1. STATUTORY INFORMATION
Walls & Futures REIT plc is a public company, registered in
England and Wales. The company's registered number and registered
office address can be found on the General Information page.
2. ACCOUNTING POLICIES
Basis of preparing the financial statements
These financial statements have been prepared in accordance with
Financial Reporting Standard 102 "The Financial Reporting Standard
applicable in the UK and Republic of Ireland" and the Companies Act
2006.
The financial statements have been prepared on the historical
cost convention, modified to include investment properties at fair
value.
The financial statements are preparing in sterling, which is the
functional currency of the company. Monetary amounts in these
financial statements are rounded to the nearest pound.
As permitted by s408 Companies Act 2006, the company has not
presented its own profit and loss account and related notes. The
company's loss for the year was GBP313,255.
Turnover
Rent receivables are recognised over the lease terms on a
straight line basis, inclusive of Value Added Tax. Rent-reduced
periods are amortised across the duration of the lease.
Investment property
Investment property is shown at most recent valuation. Any
aggregate surplus or deficit arising from changes in fair value is
recognised in profit or loss.
Basis of consolidation
The consolidated financial statements incorporate those of Walls
& Futures REIT plc and all of its trading subsidiaries.
Subsidiaries acquired during the year are consolidated using the
purchase method. All financial statements are made up to 31 March
2017.
Financial instruments
Basic financial assets
Basic financial assets, which include trade and other
receivables and cash and bank balances, are initially measured at
transaction price including transaction costs and are subsequently
carried at amortised cost.
Basic financial liabilities
Basic financial liabilities, including trade and other payables,
are initially recognised at transaction price.
Critical accounting judgements and estimates
There are no critical accounting judgement or estimates.
Taxation
Taxation for the period comprises current and deferred tax. Tax
is recognised in the Consolidated Income Statement, except to the
extent that it relates to items recognised in other comprehensive
income or directly in equity.
Current or deferred taxation assets and liabilities are not
discounted.
Current tax is recognised at the amount of tax payable using the
tax rates and laws that have been enacted or substantively enacted
by the statement of financial position date.
Deferred tax
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the statement of financial
position date.
Timing differences arise from the inclusion of income and
expenses in tax assessments in periods different from those in
which they are recognised in financial statements. Deferred tax is
measured using tax rates and laws that have been enacted or
substantively enacted by the period end and that are expected to
apply to the reversal of the timing difference.
Unrelieved tax losses and other deferred tax assets are
recognised only to the extent that it is probable that they will be
recovered against the reversal of deferred tax liabilities or other
future taxable profits.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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