RNS Number : 2866S

Value and Indexed Prop Inc Tst PLC

15 November 2021


Unaudited Half-Yearly Financial Report

For the Six Months Ended 30 September 2021

Value and Indexed Property Income Trust PLC (VIP) is an investment trust company listed on the London Stock Exchange. It now invests mainly in direct UK commercial property, with some UK property-backed securities, to deliver secure, long-term index-linked income. Its performance benchmark changed on 1 April 2021 from the FTSE All Share Index to the MSCI UK Quarterly Property Index.

GBP1,000 invested in Value and Income Trust PLC, now VIP, when OLIM took over as Managers in 1986 had grown, with dividends reinvested, to GBP27,117 at end September 2021. The total return was 10.7% p.a., against 5.7% p.a. for the FTSE All Share Index, where GBP1,000 would have grown to GBP7,130.

VIP's dividend per share has risen every year and grown tenfold over the 35 years, while the Retail Price Index has trebled. The medium term dividend policy is for increases at least in line with inflation, underpinned by VIP's index-related property income.


         30 September 2021    31 March 2021    30 September 2020 
               GBPm      %     GBPm       %       GBPm         % 
------------  -----  -----  -------  ------  ---------  -------- 
UK Property   110.1   59.2     81.1    45.7       77.1      44.9 
------------  -----  -----  -------  ------  ---------  -------- 
UK Equities    30.3   16.3     28.6    16.1       83.2      48.4 
------------  -----  -----  -------  ------  ---------  -------- 
Cash           45.7   24.5     67.9    38.2       11.5       6.7 
------------  -----  -----  -------  ------  ---------  -------- 
              186.1  100.0    177.6   100.0      171.8     100.0 
------------  -----  -----  -------  ------  ---------  -------- 

Over the six months ended 30 September 2021, VIP's share price rose by 1.8% while the net asset value per share, valuing debt at its market value, rose by 8.6%. VIP's independent property revaluation showed a 10.5% total return over the six months against 7.6% for the MSCI Quarterly Property Index.

VIP pays dividends quarterly, around the end of January, April, July and October. For VIP's year ending 31 March 2022, each of the three interim dividend payments has been increased from 2.9p to 3.0p (+3.4%), with the final dividend to be announced, before payment in late July 2022.

The first quarterly dividend of 3.0p per Ordinary Share was paid on 29 October 2021 to all Shareholders on the register on 1 October 2021. The second quarterly dividend of 3.0p per Ordinary Share will be paid on 28 January 2022 to those Shareholders on the register on 31 December 2021. The ex-dividend date will be 30 December 2021. The third quarterly dividend of 3.0p per Ordinary Share will be paid on 29 April 2022 to those Shareholders on the register on 1 April 2022. The ex-dividend date will be 31 March 2022. The Board will announce in due course the proposed fourth and final payment for the year which, subject to Shareholders' approval, will be paid on or around 29 July 2022.

                            30 September 2021  31 March 2021  30 September 2020 
--------------------------  -----------------  -------------  ----------------- 
Net asset value per share 
(valuing debt at market)              278.82p        256.67p            226.47p 
==========================  =================  =============  ================= 
Net asset value per share 
(valuing debt at par)                 290.52p        271.10p            243.50p 
==========================  =================  =============  ================= 
Ordinary Share price                  222.00p        218.00p            173.50p 
==========================  =================  =============  ================= 
Dividend per share                      6.00p         12.30p              5.80p 
                            (first and second        (total)  (first and second 
                                     interim)                          interim) 
==========================  =================  =============  ================= 


Louise Cleary

OLIM Property Limited, Investment Manager, Property

Tel: 020 7846 3252

Patrick Harrington

OLIM Property Limited, Investment Manager, Equities

Tel: 020 7846 3252

Website: https://www.olimproperty.co.uk/value-and-indexed-property-income-trust.html

Investment Manager's Report

VIP's Property Portfolio

Savills' independent valuation at end September 2021 totalled GBP110,050,000 with a running yield of 5.8% against GBP80,550,000 at end March 2021. Eight new properties were bought for GBP22,480,000.

Capital values of the 31 properties held over the six months rose in total by 8.1%. All sectors showed useful gains with industrials up by 11.1%, supermarkets up by 8.0%, the two bowling alleys by 9.9%, pubs by 3.8% and others by 8.1%, including the caravan park by 11.2%.

Since the end of March, eight new freehold properties were bought, totalling GBP22,480,000 at a net initial yield of 4.9% after all costs. All have index-linked rent increases; three industrials, two petrol filling stations, two hotels (one under construction) and a supermarket. Their valuation at 30 September totalled GBP23,000,000, which is 2.3% above their total purchase costs including Stamp Duty Land Tax and agents' and legal fees. This includes GBP1,000,000 for a site purchase for a new Premier Inn development at Alnwick, where a further GBP6,000,000 will be payable on expected completion due June 2022.

There have been nine rent increases over the half year and a lease extension at Thirsk, plus 100% of the June to September rents have been collected.

The total return on the portfolio, taking capital and income together and deducting all costs, was 10.5% over the six months, against 7.6% for the MSCI Quarterly Index.

We have been managing VIP's Property Portfolio since 1986 and the performance record for full years is set out in the 2021 Interim Report.


Contracts were exchanged in September with completion fixed for November 2021, for the sale of the pub at Thornton Cleveleys for GBP950,000.

COVID-19 and Rent Collection

From end March to end September, 100% of all rents due were collected.

Rent Reviews

There have been nine index-linked rent reviews since end March, six with annual rent reviews delivering an average increase of 2.9% and three with five yearly increases rising by 15.2% on average.

The running yield on valuation was 5.8% at the end of September (MSCI: 4.4%) against 6.4% at the end of March. There were no empty properties, against an MSCI void rate of 9.7%. All 39 properties and 40 tenancies are let on full repairing and insuring leases with upwards only rent reviews and a weighted average unexpired lease length of 13.8 years (if the tenants' break options are exercised), with 65% of the income having leases with over 10 years to expiry (33 out of 40 tenancies).

The Market

A Polarised Recovery Post Pandemic

UK commercial property capital values have, on average, recovered their pandemic losses, and are now pushing ahead as the economy rebounds from the crisis. Underlying rental growth has also turned positive after falling for over a year. Capital values, as measured by the MSCI Quarterly Index rose by 5.3% over the six months to end September, to give a total return of 7.6%. Industrial/warehouse property accounts for most of this gain with alternative investments also improving, retail patchy and office values still flat.

These averages mask highly divergent trends across different property sub-sectors, reflecting fundamental structural changes in work and spending patterns across the UK, which COVID has highlighted and speeded up. The table included in the 2021 Interim Report of capital value changes in the MSCI Quarterly Index from the beginning of the pandemic at end March 2020 to the latest figures for end September 2021, shows that the pattern of winners and losers is stark.

Total commercial property transaction volumes halved from normal levels in the first six months of the pandemic, with Central London office sales and lettings both near their nadir in 2009, along with shopping centres and high street retail. But the strongest sectors, industrials and supermarkets, were hardly affected and are now running well above pre-pandemic averages. Turnover and valuations are now rising rapidly in retail warehousing, alternatives, hotels and leisure. Offices present a very mixed picture, with long-let and super prime stock hot and much older secondary stock virtually unsaleable. Meanwhile, property void rates have risen from 8.2% to 9.6% (and 13.1% to 17.8% on offices) since March 2020.

Rental income was under pressure during the pandemic, from a combination of tenants unable or unwilling to pay, defaults and insolvencies, and rising void levels as tenants exercise break clauses or vacate at lease expiry, or sign new leases at lower rents in weaker sectors.

As a result, rents actually received on the properties comprising the MSCI Quarterly Index have fallen by over 9% since the start of the pandemic in March 2020, as the table in the 2021 Interim Report shows.

The Government has repeatedly suspended landlords' traditional tools for enforcing rent collection - eviction orders, use of Commercial Rent Arrears Recovery (CRAR) bailiffs and statutory demands for winding up. The latest extension is until end March 2022, with no clarity on what will follow. With almost all properties now open again and able to trade normally, there is no longer any excuse for tenants not to pay their rent promptly and in full; rent collection rates should therefore now be back to normal on professionally managed institutional property portfolios.

Sector Prospects

Warehouse/Industrials - A Virtuous Circle of Rental and Capital Growth

Warehouse and Industrial property has delivered most of commercial property's capital growth over the past year for the right reason: voracious occupier demand, especially from food and online retailers driving up rents across the country for both "big box" warehouses near motorways and smaller units on estates nearer city centres. Valuation yields have come down to reflect improving rental growth prospects, and this virtuous circle is far from over.

Investment demand from mainstream institutions, specialist funds, private equity and overseas investors has driven transaction volumes in the first half of 2021 to double the five year average for the whole industrial/ warehouse sector, despite the reluctance of most potential sellers.

Even if rising costs and supply chain problems put pressure on some weaker occupiers as economic growth slows over the next year, industrial property values will still be supported by the conversion of older and lower value sites to residential and other alternative uses. Well-located industrial and warehouse property in all sizes should continue to outperform the property market as a whole for at least another year.

Offices - At the Foot of the Performance Charts

Offices are now bottom of the performance charts, not retail property. As the gradual return to the office continues, there is no sign of office rents or capital values in general rising. Occasional headline-grabbing investment or letting deals for the very best space are just a sign of a flight from quantity to quality, with tenants usually downsizing at the same time, leaving property owners with obsolescent or obsolete space which will cost a fortune to upgrade.

Mid and back-office work is now done much more from home or partly at low cost non-city centre locations. Cost reduction is tenants' top priority, with break clauses exercised in most cases and tenants demanding considerable capital expenditure from landlords to renew leases even in part. Many London office buildings, in particular, will not be economic to upgrade to the necessary A-C Energy Performance Certificate ratings, so will become unlettable. Functional obsolescence and depreciation will therefore need to be factored more specifically into most office valuations, leading to rises in average office valuation yields and falls in capital values to reflect lower effective net rents and greater

re-letting risk.

Retail - Off the Bottom Overall - Out of Town Buoyant, In Town Improving if Rents Realistic

Many retailers in high streets and shopping centres were already on their last legs before COVID; online retail sales market share reached 36% in 2020, up from 20% a year before and only 14% five years ago. The pandemic hit them hard in two ways: mainly by getting older shoppers, in particular, used to the range and convenience of shopping online, but also by encouraging a switch from public transport and parking in congested city centres to the relative ease of car-borne shopping out of town, especially where well-run retail warehouse operators like B&Q, trade counters, B&M and Home Bargains trade alongside the leading supermarkets. Retail warehouse rents were under downward pressure

pre-pandemic, but have now stabilised and capital values are growing rapidly - partly because many institutional investors have missed the market in industrial property, want no more offices, and have money which they are struggling to invest.

On the high street, the steepest falls in property values have happened in "prime" Central London and other prime highly valued cities and towns which are now unaffordable for both multiple and individual retailers. Unfair business rates had already crippled urban high streets in less prosperous parts of the UK, with fundamental reform rejected in the latest Budget. Suburbs and market towns with more affordable rents and an attractive mix of convenience and independent traders are outperforming as shops re-open and new retailers take space. Transaction volumes are rising again for high street shops and shopping centres, but only at double figure yields unless they offer compelling residential or other alternative use values.


Supermarkets and convenience stores (including petrol filling stations) had a good crisis, often with increases of 20%-30% in their turnover, part of which they have retained with more people working on average nearer home. The market leaders are much better at combining physical and online shopping than most non-food retailers.

The bidding war for Morrisons, with their mainly freehold portfolio, shows how highly private equity investors value UK supermarkets' stable and sustainable cash flows. On-line penetration remains far lower than in non-food retail, and many consumers still prefer the choice and convenience of a nearby food shop in a small or medium-sized store, where the Co-op is particularly well placed, along with Aldi, Lidl, Sainsburys, Tesco and M&S Food.

Non-Traditional Alternatives - Well-Funded Strong Survivors Thrive

Property in the "Alternatives" sector - i.e., everything except office, industrial or retail - has been growing rapidly in importance for institutional investors in recent years and now accounts for one-sixth of the MSCI Quarterly Property Index. It covers a wide range of property types and tenants, often with long, index-linked leases, so tenants' covenant strengths and ability to pay are crucial.

COVID with its ever-changing lockdowns posed a once in a lifetime challenge to alternative sector operators and investors. Tenants with strong long-term business models and short-term crisis management, working with investors who knew how and when to give help and improve leases, have usually come out of COVID stronger than before it struck. But their weaker multiple competitors, and many private operators, have been savagely squeezed or forced out of business altogether.

Alternatives - Leisure and Hotels - Record Non-City Centre Trade

The leading pubcos, like Greene King and Wetherspoons, as well as most traditional regional brewers, have strong balance sheets with plenty of freehold assets and borrowing capacity. Profitable, spacious pubs with outside space, have been trading well above pre-pandemic levels outside Central London, and should, therefore, be able to manage rising cost pressures. Pubs of this type in suburban, smaller town and rural locations will be both short and long-term winners, with more of their customers working nearer home for part of the week for the foreseeable future.

Hotel values have also bottomed out. Modern hotels in prosperous smaller towns and rural areas, serving British holidaymakers, workers and businesses, are very well placed to grow their profits and outperform large city centre and airport hotels dependent on international business and travel. Zoom and ESG will kill first class corporate frequent flying. Covenant strength will remain crucial for investment value - for example, a Premier Inn is valued well above a similar Travelodge, because long-term investors hate CVA's (Company "Voluntary" Arrangements). Caravan parks have also been outstanding COVID beneficiaries and will continue to outperform.

Other Alternatives

Health and Fitness clubs are steadily rebuilding their memberships. The leading brands on large out of town sites, with good car parking and customers often able to work from home, offer the best long-term investments. The two main ten pin bowling companies are both also trading exceptionally well and offer a sensibly priced family treat which cannot be replicated online.

Direct-let student accommodation investments on long leases to well-established universities will continue to perform well, but indirect student housing investments with nomination agreements or third-party providers may not benefit from yield hardening for safe long-let property.

COVID has hit care homes hard with costs rising and severe, partly Brexit-related staff shortages. High quality homes with self- funded residents will continue to outperform those dependent on squeezed local authority budgets. Medical centres and private hospitals will stay in demand as the NHS faces years of non-COVID catch up and outsources more profitable work.

The Economy

The UK, like most developed Western economies, is on track to recover to its pre- COVID level of national output by the end of 2021, but inflationary pressures and severe sectoral labour shortages are generally worse here. It is now clear that the pandemic struck at a particularly awkward time for Britain post-Brexit, as our exporters and importers were still struggling to adjust to new trading rules and restrictions, while many workers from the EU left the country, with only a small fraction of them now willing or able to return.

As furlough has just ended, it looks likely that a substantial number of older workers, in particular, have dropped out of the labour market permanently. Furloughed workers were heavily concentrated at the end in the aviation, travel and live entertainment industries, so there is a fundamental sectoral and geographical mismatch with the jobs employers are desperate to fill.

Shortages and sharply rising prices of energy, timber, car components, commodities in general and other internationally traded goods are to be expected in a rapidly recovering world economy, and these markets should gradually return towards more normal levels next year. But the danger for the UK is that employers aggressively bidding up labour costs (with active encouragement from Government) across a wide variety of stressed sectors, from lorry driving to food picking and processing and from hospitality to care homes to the NHS, will set off a wage-price spiral which may prove hard to bring under control. Sharply rising food and fuel prices in the short term may also hurt lower-paid employees who have not been able to work from home as easily as people in better paid and white collar jobs.

UK GDP has bounced back strongly in 2021, with the estimated growth rate just revised up by the Office for Budget Responsibility (OBR) and a strong boost from re-opening retail and leisure outlets as Britons holidayed in this country. But business tax rises (N.I. and Corporation Tax) and labour, energy and materials shortages are clouding the outlook for profits. The employers' National Insurance increase will cost businesses an extra GBP8bn a year, overtaking corporation tax - and, unlike corporation tax, it has to be paid whether a business is profitable or not. The recovery is clearly slowing and UK GDP may be growing at less than 3% again by late 2022, and under 2% in 2023.

Price inflation is rising rapidly, with the annual rates of CPI (+3.1%) and RPI (+4.9%) near ten-year highs and heading higher, probably to over 6% for the R.P.I. this winter. The annual rate of output price (factory gate) inflation has risen from -0.2% in December to +6.7% in September, while input price (raw material) inflation shot up from 0.9% to 11.4%, and the oil price has risen by over 60%. The Bank of England, clearly, should now stop their asset purchase programme, which has led to the Bank now owning almost half of all gilts, reducing the effective maturity of UK Government debt from 11 to 4 years. This is a very risky position for a country whose government debt is now around 85% of GDP, and a public sector annual deficit of 6.5% of GDP, with rising interest payments on index-linked gilts putting further pressure on the public finances.

UK domestic spending has been the main driver of economic recovery in 2021, with savings exceptionally high in total post-pandemic and housing market transactions and prices at record levels. But real earnings are now under pressure at the lower end of the income scale, from the GBP20 a week cut in Universal Credit and rising energy and food bills, with higher National Insurance payments to come in April. Even modest rises in mortgage interest payments could seriously stretch some household budgets from late 2022.

Unless there are serious further outbreaks of COVID or especially dangerous new variants, the world economy should continue its strong recovery over the next year, under the lead of the United States and China. Inflation is rising but generally manageable across most of the developed world. International interest rates have been kept artificially low by massive Government bond buying programmes, but these are now tapering off and both short and long term interest rates will rise. Commercial property markets are benefitting as recovering world economies and trade support tenant demand and rental growth. The risk will be if Central Banks lose control and interest rates have to be raised too far and too fast - but commercial property yields are generally so far above interest rates, particularly in the UK, that property has a healthy margin of safety before that should become a serious concern.

Conclusion - Index-Linked Income as the Holy Grail

UK commercial property values stabilised in late 2020 and have been rising with the recovering economy in 2021. Industrials will be the star performer, and the office sector will struggle. Retail values have now bottomed out, with gains for supermarkets, convenience stores and retail warehouses outweighing slowing rates of decline in shopping centres and high street shops. The alternative sectors are also on the up, with pubs, hotels, bowling, health and fitness and caravan parks benefitting strongly outside London from "staycations" and working from home. Healthcare and nursing home investments will stay in demand despite their staffing problems. The commercial property market in 2022, with slowing growth and rising interest rates, looks likely to deliver lower but still satisfactory average real returns with industrials and alternatives still leading the way and offices bringing up the rear.

The last year and a half has taught UK property investors a stark lesson: stick to properties let at affordable rents to strong tenants on long, preferably index-linked, leases. Safe, long-term indexed income is now being valued ever more highly in a yield- hungry world of slashed equity dividends, negative real interest rates and rising costs and prices. Avoid offices and in-town retail and stay safely on the right side of structural change. The direction of travel for UK interest rates and price and wage inflation is clearly upwards, with no destination yet in sight.

UK Equities


The first six months of VIP's financial year saw sales of non-property backed equities of GBP22.7m and purchases of GBP22.8m, completing the reorganisation of the equity portfolio. The direct equity portfolio is now valued at just over GBP30m in 10 investments.

New investment has been focused on industrial property with new holdings in Tritax Big Box REIT, Urban Logistics REIT and Warehouse REIT, plus a new holding in Tesco and an increased holding in Wm Morrison Supermarkets, prior to the initial bid approach. Elsewhere, new holdings have been made in Real Estate Credit Investments, which advances loans secured on property, Residential Secure Income REIT, which operates in the retirement housing and the shared ownership sector, and PRS REIT, which has a portfolio of over 5,000 private rented homes. The holding in Legal & General is being retained as it is a significant property investor with a high and growing yield.


VIP's remaining equity portfolio outperformed the FTSE All Share Index during the reporting period. Adjusted for the sizeable disposals and reinvestments made over the period, the portfolio recorded a total return of 9.2% compared to the 8.0% achieved by the FTSE All Share Index. The performance was helped by the portfolio orientation towards industrial property, which has been the strongest part of the commercial property market. However, the largest single contributor to performance was Wm Morrison Supermarkets which rose 61% over the six months after it became the subject of a takeover battle between two US private equity houses. Civitas Social Housing was a disappointing performer when directors were shown to have undisclosed shareholdings in the company's tenants. The shares have, therefore, been sold because of poor governance.

The Market

The first six months of VIP's financial year has seen world stock markets continue their recovery as economies have bounced back from their lockdown-inspired recessions. The UK stock market, as measured by the FTSE All Share Index rose by 5.9% and delivered a total return of 8.0%, although the UK market continued to lag the stronger returns seen elsewhere in the world, particularly in the US. Nonetheless, the relative value in the UK stock market has been demonstrated by a number of high-profile takeover bids.

Property backed equities have generally performed well, especially REITs and investment companies focused on industrial property, where strong occupational and investment demand is driving rents and capital values higher.

Investment Manager

OLIM Property Limited

12 November 2021

Interim Board Report

Management and Administration of VIP

Value and Indexed Property Income Services Limited (VIS), a wholly owned subsidiary of the Company, is the Company's Alternative Investment Fund Manager (AIFM). As AIFM, VIS has responsibility for the overall portfolio management and risk management of the assets of the Company. VIS has delegated its portfolio management responsibilities for the property and equity portfolios to OLIM Property Limited (OLIMP) (the Investment Manager). The delegation by VIS of its portfolio management responsibilities is in accordance with the delegation requirements of the Alternative Investment Fund Managers Directive (AIFMD). The Investment Manager remains subject to the supervision and direction of VIS. The Investment Manager is responsible to VIS and ultimately to the Company in regard to the management of the investment of the assets of the Company in accordance with the Company's investment objective and policy. VIS has a risk committee which reviews the effectiveness of the Company's internal controls and risk management systems and procedures and identifies, measures, manages and monitors the risks identified as affecting the Company's business.

BNP Paribas Securities Services is the Company's Depositary and oversees the Company's custody and cash arrangements.

Principal and Emerging Risks and Uncertainties

The Board carries out a regular review and robust assessment of the principal and emerging risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity. These principal and emerging risks and uncertainties are set out in full in the Strategic Report within the 2021 Annual Report, and are considered equally applicable to the second half of the financial year as for the period under review.

Climate Change and Social Responsibility Risk

The Board recognises that climate change is an important emerging risk that all companies should take into consideration within their strategic planning. However, the Company has little direct impact on environmental issues. As an investment trust company, the Company has no direct employee or environmental responsibilities. The Board is aware that the Manager continues to take into account environmental, social and governance matters when considering investment proposals.

Other Risks

The Directors are cognisant of the continuing impact of the coronavirus (COVID-19) pandemic and the implications for the activities of the Manager and on the performance of investee companies and assets.

While VIP's property portfolio is sufficiently robust to withstand the current market impacts of the pandemic, there is a risk that property values may fall and tenants may struggle to pay rent. If this happens, there is a risk that loan to value and interest cover covenants could be breached. If this were to occur, VIP has sufficient cash and liquid equity investments to cover any loan repayments triggered by covenant breaches.

Statement of Directors' Responsibilities

The Directors confirm that to the best of their knowledge:

-- the condensed set of Financial Statements within the Half-Yearly Financial Report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'; and

-- the Interim Report includes a true and fair review of the information required by 4.2.7R and 4.2.8R of the FCA's Disclosure, Guidance and Transparency Rules.

For and on behalf of the Board of Value and Indexed Property Income Trust PLC

James Ferguson


12 November 2021

Group Statement of Comprehensive Income

For the 6 months ended 30 September 2021

                                                          6 months ended                        6 months ended                   Year ended 
                                                         30 September 2021                     30 September 2020                31 March 2021 
                                                             (Unaudited)                          (Unaudited)                     (Audited) 
              Notes             Revenue            Capital                 Total      Revenue     Capital      Total      Revenue  Capital    Total 
                                GBP'000            GBP'000               GBP'000      GBP'000     GBP'000    GBP'000      GBP'000  GBP'000  GBP'000 
Rental income            2        3,133                  -                 3,133        2,239           -      2,239        5,359        -    5,359 
Investment income        2        1,096                  -                 1,096        2,376           -      2,376        3,414        -    3,414 
Other income             2            -                  -                     -          107           -        107          159        -      159 
                            ===========         ----------  --------------------      -------   ---------   --------      -------  -------  ------- 
                                  4,229                  -                 4,229        4,722           -      4,722        8,932        -    8,932 
 on held- 
 investments and 
 investment                                                                                              ) 
 properties                           -              7,280                 7,280            -      (3,008     (3,008  )         -    8,588    8,588 
Unrealised gains 
 on held-at-fair- 
 value investments 
 and investment 
 properties                           -              1,465                 1,465            -         272        272            -    1,185    1,185 
                            -----------         ----------  --------------------      -------   ---------   --------      -------  -------  ------- 
TOTAL INCOME                      4,229              8,745                12,974        4,722      (2,736      1,986        8,932    9,773   18,705 
                            -----------         ----------  --------------------      -------   ---------   --------      -------  -------  ------- 
 fees                              (529)                 -                  (529)        (148)      (345)       (493)       (301)    (702)  (1,003) 
Other operating 
 expenses                          (526)                 -                  (526)        (394)          -       (394)       (771)        -    (771) 
FINANCE COSTS                    (1,513)                 -                (1,513)      (2,537)          -     (2,537)     (5,084)        -  (5,084) 
                            -----------         ----------  --------------------      -------   ---------   --------      -------  -------  ------- 
TOTAL EXPENSES                   (2,568)                 -                (2,568)      (3,079)      (345)     (3,424)     (6,156)    (702)  (6,858) 
                            -----------         ----------  --------------------      -------   ---------   --------      -------  -------  ------- 
  TAXATION                        1,661              8,745                10,406        1,643     (3,081)     (1,438  )     2,776    9,071   11,847 
TAXATION                           (200)             1,083                   883         (153)         66        (87)       (359)    1,132      773 
                            -----------         ----------  --------------------      -------   ---------   --------      -------  -------  ------- 
  ATTRIBUTABLE TO                                                                                        ) 
  OF PARENT COMPANY               1,461              9,828                11,289        1,490      (3,015     (1,525  )     2,417   10,203   12,620 
                            -----------         ----------  --------------------      -------   ---------   --------      -------  -------  ------- 
 SHARE                                                                                                   ) 
 (Pence)                 3         3.35              22.57                 25.92         3.27       (6.61      (3.34  )      5.35    22.56    27.91 

The total column of this statement represents the Statement of Comprehensive Income of the Group, prepared in accordance with IFRS. The revenue return and capital return columns are supplementary to this and are prepared under guidance issued by the Association of Investment Companies. All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of Value and Indexed Property Income Trust PLC, the parent company. There are no minority interests.

The Board has declared a first quarterly dividend of 3.00p per share (2021 - 2.90p), which was paid on 29 October 2021 to all Shareholders on the register on 1 October 2021 (ex-dividend date 30 September 2021). A second quarterly dividend of 3.00p per share (2021 - 2.90p) will be paid on 28 January 2022 to those Shareholders on the register on 31 December 2021, with an ex-dividend date of 30 December 2021. The third quarterly dividend of 3.00p (2021 - 2.90p) will be paid on 29 April 2022 to those Shareholders on the register on 1 April 2022. The ex-dividend date will be 31 March 2022.

The Notes form part of these Financial Statements.

Group Statement of Financial Position

For the 6 months ended 30 September 2021

                                                       As at                  As at                         As at 
                                                30 September 
                                                        2021          31 March 2021             30 September 2020 
                                                 (Unaudited)              (Audited)                   (Unaudited) 
                                          GBP'000    GBP'000     GBP'000    GBP'000       GBP'000         GBP'000 
 ASSETS                          Notes 
 Investment properties                               110,085                 81,132                        77,076 
 Investments held at 
  fair value through 
  profit or loss                                      30,304                 28,581                        83,239 
                                   8                 140,389                109,713                       160,315 
 Deferred tax asset                                    2,141                  1,258                           398 
 Receivables                                           2,695                  2,017                             - 
                                                     145,225                112,988                       160,713 
 Cash and cash equivalents                 42,665                 65,965                   26,928 
 Receivables                                1,140                    972                      744 
                                        ---------             ----------             ------------ 
                                                      43,805                 66,937                        27,672 
 TOTAL ASSETS                                        189,030                179,925                       188,385 
 Debenture stock                                -                      -                 (15,000) 
 Payables                                 (2,898)                (2,318)                  (1,590) 
                                                     (2,898)                (2,318)                      (16,590) 
 LIABILITIES                                         186,132                177,607                       171,795 
 Payables                                 (2,890)                (2,862)                  (4,234) 
 Borrowings                              (56,701)               (56,662)                 (56,649) 
                                                    (59,591)               (59,524)                      (60,883) 
                                                   ---------              ---------                -------------- 
 NET ASSETS                                          126,541                118,083                       110,912 
                                                   ---------              ---------                -------------- 
 Called up share capital                               4,555                  4,555                         4,555 
 Share premium                                        18,446                 18,446                        18,446 
 Retained earnings                 6                 103,540                 95,082                        87,911 
                                                   ---------              ---------                -------------- 
 TOTAL EQUITY                                        126,541                118,083                       110,912 
                                                   ---------              ---------                -------------- 
  SHARE (Pence)                                      290.52p                271.10p                       243.50p 

These Financial Statements were approved by the Board on 12 November 2021 and signed on its behalf by James Ferguson, Chairman.

The Notes form part of these Financial Statements.

Group Statement of Changes in Equity

For the 6 months ended 30 September 2021

                                                                                                     6 months ended 30 September 2021 
                                                                                 Share               Retained 
                                                   Share capital               premium               earnings                Total 
                                 Notes                   GBP'000               GBP'000                GBP'000              GBP'000 
Net assets at 31 March 
 2021                                                      4,555                18,446                 95,082              118,083 
Profit for the period                                          -                     -                 11,289               11,289 
Dividends paid                       4                         -                     -                 (2,831)              (2,831) 
                                        ------------------------  --------------------  ---------------------        ------------- 
Net assets at 30 
 2021                                                      4,555                18,446                103,540              126,541 
                                        ------------------------  --------------------  ---------------------        ------------- 
                                                                                              Year ended 31 March 2021 (Audited) 
Net assets at 31 March 
 2020                                                      4,555                18,446                 92,306              115,307 
Profit for the period                                          -                     -                 12,620               12,620 
Dividends paid                       4                         -                     -                 (5,512)              (5,512) 
Buyback of Ordinary 
 for Treasury                                                  -                     -                 (4,332)              (4,332) 
                                        ------------------------  --------------------  ---------------------        ------------- 
Net assets at 31 March 
 2021                                                      4,555                18,446                 95,082              118,083 
                                        ------------------------  --------------------  ---------------------        ------------- 
6 months ended 30 September 2020 (Unaudited) 
Net assets at 31 March 
 2020                                                      4,555                18,446                 92,306              115,307 
Loss for the period                                            -                     -                 (1,525)              (1,525) 
Dividends paid                       4                         -                     -                 (2,870)              (2,870) 
                                        ------------------------  --------------------  ---------------------        ------------- 
Net assets at 30 
 2020                                                      4,555                18,446                 87,911              110,912 
                                        ------------------------  --------------------  ---------------------        ------------- 

The Notes part of these Financial Statements.

Group Statement of Cash Flows

For the 6 months ended 30 September 2021

                                   6 months ended                6 months ended                Year ended 
                                    30 September 
                                         2021                   30 September 2020            31 March 2021 
                                     (Unaudited)                   (Unaudited)                 (Audited) 
                                   GBP'000      GBP'000      GBP'000            GBP'000     GBP'000    GBP'000 
 Rental income received                           2,089                           2,219                  5,218 
 Dividend income received                         1,320                           2,420                  3,486 
 Interest received                                    2                              43                    244 
 Operating expenses 
  paid                                          (1,182)                           (843)                (1,673) 
   OPERATING ACTIVITIES                           2,229                           3,839                  7,275 
 Purchase of investments 
  held at fair value 
  through profit or loss          (21,224)                   (4,500)                        (4,500) 
 Purchase of investment 
  properties                      (22,492)                   (6,209)                       (17,553) 
 Sale of investments 
  held at fair value 
  through profit or loss            22,681                    12,874                         79,584 
 Sale of investment 
  properties                             -                         -                          4,725 
                             -------------               -----------                     ---------- 
  ACTIVITIES                                   (21,035)                           2,165                 62,256 
 Repayment of debenture 
  stock                                  -                         -                       (15,000) 
 Fees paid relating 
  to loans                            (18)                       (4)                            (4) 
 Interest paid on loans            (1,602)                   (2,527)                        (4,938) 
 Finance cost of leases               (39)                      (95)                          (191) 
 Payments of lease 
  liabilities                          (4)                       (8)                           (17) 
 Dividends paid                    (2,831)                   (2,870)                        (5,512) 
 Buyback of Ordinary 
  Shares for Treasury                    -                         -                        (4,332) 
  FINANCING ACTIVITIES                          (4,494)                         (5,504)               (29,994) 
   EQUIVALENTS                                 (23,300)                             500                 39,537 
 Cash and cash equivalents 
  at the start of the 
  period                                         65,965                          26,428                 26,428 
                                            -----------               -----------------              --------- 
   PERIOD                                        42,665                          26,928                 65,965 
                                            -----------               -----------------              --------- 

The Notes form part of these Financial Statements.

Notes to the Financial Statements

   1           Accounting policies 

The Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) which comprise standards and interpretations approved by the International Accounting Standards Board (IASB) together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the International Accounting Standards Committee (IASC) that remain in effect, and to the extent that they have been adopted by the European Union.

The functional and presentational currency of the Group is pounds sterling because that is the currency of the primary economic environment in which the Group operates. The Financial Statements and the accompanying notes are presented in pounds sterling and rounded to the nearest thousand pounds except where otherwise indicated.

   (a)        Basis of preparation 

The Financial Statements have been prepared on a going concern basis and on the historical cost basis, except for the revaluation of certain financial assets. Where presentational guidance set out in the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the SORP) issued by the Association of Investment Companies (AIC) in April 2021 is consistent with the requirements of IFRSs, the Directors have sought to prepare the Financial Statements on a basis compliant with the recommendations of the SORP.

The Board has considered the requirements of IFRS 8, 'Operating Segments'. The Board is charged with setting the Group's investment strategy. The Board has delegated the day to day implementation of this strategy to the Investment Manager but the Board retains responsibility to ensure that adequate resources of the Group are directed in accordance with its decisions. The Board is of the view that the Group is engaged in a single segment of business, being investments in UK commercial properties and UK quoted equities. The view that the Group is engaged in a single segment of business is based on the fact that one of the key financial indicators received and reviewed by the Board is the total return from the investment portfolio taken as a whole. A review of the investment portfolio is included in the Investment Manager's Report.

All expenses and finance costs are accounted for on an accruals basis. Expenses are presented as capital where a connection with the maintenance or enhancement of the value of investments can be demonstrated. In this respect and in accordance with the SORP, the investment management fees are allocated 100% to income, in line with the general practice of property companies.

The Group's Financial Statements have been prepared using the same accounting policies as those applied for the Financial Statements for the year ended 31 March 2021 which received an unqualified audit report.

   (b)        Going concern 

The Group's business activities, together with the factors likely to affect its future development and performance, are set out in the Interim Report. The financial position of the Group as at 30 September 2021 is shown in the Statement of Financial Position. The cash flows of the Group for the half year to 30 September 2021, which are not untypical, are set out in the Statement of Cash Flows. The Group had fixed debt totalling GBP56,701,000 as at 30 September 2021; none of the borrowings is repayable before 2026. As at 30 September 2021, the Group's total assets less current liabilities exceeded its total non current liabilities by a factor of over 3.

The assets of the Group consist mainly of investment properties and securities that are held in accordance with the Group's investment policy, as set out in the Interim Report. Most of these securities are readily realisable, even in volatile markets. The Directors, who have reviewed carefully the Group's forecasts for the coming year and having taken into account the liquidity of the Group's investment portfolio and the Group's financial position in respect of cash flows, borrowing facilities and investment commitments (of which there is none of significance, apart from a GBP6 million payment due on completion of the Alnwick hotel development), are not aware of any material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern. Accordingly, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the Group's Financial Statements.

   (c)        Basis of consolidation 

The consolidated Financial Statements incorporate the Financial Statements of the Company and the entity controlled by the Company (its subsidiary). An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has ability to affect those returns through its power over the investee. The Company consolidates the investee that it controls. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Value and Indexed Property Income Services Limited is a private limited company incorporated in Scotland under company number SC467598. It is a wholly owned subsidiary of the Company and has been appointed to act as the Alternative Investment Fund Manager of the Company.

   (d)        Presentation of Statement of Comprehensive Income 

In order to reflect better the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the Statement of Comprehensive Income. In accordance with the Company's Articles, net capital returns may be distributed by way of dividend.

   (e)        Dividends payable 

Interim dividends are recognised as a liability in the period in which they are paid as no further approval is required in respect of such dividends. Final dividends are recognised as a liability only after they have been approved by Shareholders in general meeting.

   (f)         Investments 

Equity investments

All equity investments are classified on the basis of their contractual cash flow characteristics and the Group's business model for managing its assets. The business model, which is the determining feature, is such that the portfolio of equity investments is managed, and performance is evaluated, on the basis of fair value. Consequently, all equity investments are measured at fair value through profit or loss.

For listed investments, fair value through profit or loss is deemed to be bid market prices or closing prices for SETS stocks sourced from the London Stock Exchange. SETS is the London Stock Exchange electronic trading service covering most of the market including all FTSE 100 constituents and most liquid FTSE 250 constituents along with some other securities. Gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the Statement of Comprehensive Income and are ultimately recognised in the retained earnings.

Investment properties

Investment properties are initially recognised at cost, being the fair value of consideration given, including transaction costs associated with the investment property. Any subsequent capital expenditure incurred in improving investment properties is capitalised in the period incurred and included within the book cost of the property.

After initial recognition, investment properties are measured at fair value. Gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the Statement of Comprehensive Income and are ultimately recognised in retained earnings.

The Group leases out all of its properties on operating leases. A property held under an operating lease is classified and accounted for as an investment property where the Group holds it to earn rental, capital appreciation or both. Any such property leased under an operating lease is carried at fair value. Fair value is established by half-yearly professional valuation on an open market basis by Savills (UK) Limited, Chartered Surveyors and Valuers, and in accordance with the RICS Valuation - Global Standards January 2020 (the 'RICS Red Book'). The determination of fair value by Savills is supported by market evidence.


The Group leases properties that meet the definition of investment property. These right-of-use assets are presented as part of Investment Properties in the Statement of Financial Position and held at fair value.

   2          Income 
                                    6 months ended  6 months ended 
                                      30 September    30 September      Year ended 
                                              2021            2020   31 March 2021 
                                           GBP'000         GBP'000         GBP'000 
Investment income 
Dividends from listed investments 
 in UK                                       1,096           2,376           3,414 
Other operating income 
Rental income                                3,133           2,239           5,359 
Interest receivable on short term 
 deposits                                        -             107             159 
                                    --------------  --------------  -------------- 
Total income                                 4,229           4,722           8,932 
                                    --------------  --------------  -------------- 
   3          Return per Ordinary Share 
                                   6 months ended  6 months ended 
                                     30 September    30 September       Year ended 
                                             2021            2020    31 March 2021 
                                          GBP'000         GBP'000          GBP'000 
The return per Ordinary Share is based on 
 the following figures: 
Revenue return                              1,461           1,490            2,417 
Capital return                              9,828          (3,015)          10,203 
Weighted average Ordinary Shares 
 in issue                              43,557,464      45,549,975       45,216,413 
  Return per share - revenue                3.35p           3.27p            5.35p 
Return per share - capital                 22.57p          (6.61p)          22.56p 
                                   --------------  --------------   -------------- 
Total return per share                     25.92p          (3.34p)          27.91p 
                                   --------------  --------------   -------------- 
   4          Dividends paid 
                                     6 months ended  6 months ended  Year ended 
                                       30 September    30 September    31 March 
                                               2021            2020        2021 
                                            GBP'000         GBP'000     GBP'000 
Dividends on Ordinary Shares: 
Third quarterly dividend of 2.90p 
 per share 
 (2021 - 2.90p) paid 30 April 2021            1,263           1,321       1,321 
Final dividend of 3.60p per share 
 (2021 - Fourth quarterly 3.40p) 
 paid 30 July 2021                            1,568           1,549       1,549 
First quarterly dividend of 2.90p 
 per share paid 
 30 October 2020 *                                -               -       1,321 
Second quarterly dividend of 2.90p 
 per share paid 
 29 January 2021 *                                -               -       1,321 
                                     --------------  --------------  ---------- 
Dividends paid in the period                  2,831           2,870       5,512 
                                     --------------  --------------  ---------- 

* First and second quarterly dividends for the year to 31 March 2022 have been declared with pay dates falling after 30 September 2021. These have not been included as liabilities in these Financial Statements. See Note 5.

   5          Interim dividend 

The Directors have declared a first quarterly dividend of 3.00p per Ordinary Share, paid on 29 October 2021 to Shareholders registered on 1 October 2021, with an ex dividend date of 30 September 2021 (2021 - 2.90p). A second interim dividend of 3.00p per share will be paid on 28 January 2022 to Shareholders registered on 31 December 2021, with an ex dividend date of 30 December 2021 (2021 - 2.90p).

The third quarterly dividend of 3.00p (2021 - 2.90p) will be paid on 29 April 2022 to those Shareholders on the register on 1 April 2022. The ex-dividend date will be 31 March 2022.

   6          Retained earnings 
                                Revenue         Capital     Total 
                                GBP'000         GBP'000   GBP'000 
The table below shows the movement in retained 
 earnings analysed between revenue and capital items. 
At 31 March 2021                     96          94,986    95,082 
Movement during the period:- 
Profit for the period             1,461           9,828    11,289 
Dividends paid (see Note 4)      (2,831)              -    (2,831  ) 
                               --------       ---------  -------- 
At 30 September 2021             (1,274    )    104,814   103,540 
                               --------       ---------  -------- 
   7          Transaction costs 

During the period, expenses were incurred in acquiring and disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains and losses on investments in the Statement of Comprehensive Income.

The total costs are as follows:-

                                6 months ended 
                6 months ended    30 September      Year ended 
             30 September 2021            2020   31 March 2021 
                       GBP'000         GBP'000         GBP'000 
Purchases                   84              27              27 
Sales                       23              13              75 
            ------------------  --------------  -------------- 
                           107              40              10 
            ------------------  --------------  -------------- 
   8          Fair value hierarchy disclosures 

The table below sets out fair value measurements using the IFRS 13 Fair Value hierarchy:-

At 30 September 2021 (unaudited)       Level 1    Level 2     Level 3      Total 
                                       GBP'000    GBP'000     GBP'000    GBP'000 
Equity investments                      30,304          -           -     30,304 
Investment properties                        -          -     110,085    110,085 
                                     ---------  ---------   ---------  --------- 
                                        30,304          -     110,085    140,389 
Borrowings                                   -    (61,795)          -    (61,795) 
                                     ---------  ---------   ---------  --------- 
                                        30,304    (61,795)    110,085     78,594 
                                     ---------  ---------   ---------  --------- 
  At 31 March 2021 (audited)           Level 1    Level 2     Level 3      Total 
                                       GBP'000    GBP'000     GBP'000    GBP'000 
Equity investments                      28,581          -           -     28,581 
Investment properties                        -          -      81,132     81,132 
                                     ---------  ---------   ---------  --------- 
                                        28,581          -      81,132    109,713 
Borrowings                                   -    (62,652)          -    (62,652) 
                                     ---------  ---------   ---------  --------- 
                                        28,581    (62,652)     81,132     47,061 
                                     ---------  ---------   ---------  --------- 
  At 30 September 2020 (unaudited)     Level 1    Level 2     Level 3      Total 
                                       GBP'000    GBP'000     GBP'000    GBP'000 
Equity investments                      83,239          -           -     83,239 
Investment properties                        -          -      77,076     77,076 
                                     ---------  ---------   ---------  --------- 
                                        83,239          -      77,076    160,315 
Borrowings                                   -    (79,757)          -    (79,757) 
                                     ---------  ---------   ---------  --------- 
                                        83,239    (79,757)     77,076     80,558 
                                     ---------  ---------   ---------  --------- 

Fair value categorisation within the hierarchy has been determined on the basis of the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety as follows:-

Level 1 - inputs are unadjusted quoted prices in an active market for identical assets

Level 2 - inputs, not being quoted prices, are observable, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3 - inputs are not observable

The fair value of the debenture is determined by comparison with the fair values of equivalent gilt edged securities, discounted to reflect the differing levels of credit worthiness of the borrowers. The fair values of the loans are determined by a discounted cash flow calculation based on the appropriate inter-bank rate plus the margin per the loan agreement. These instruments are therefore considered to be Level 2 as defined above. There were no transfers between Levels during the period. All other assets and liabilities of the Group are included in the Balance Sheet at fair value.

   9          Relationship with the Investment Manager and other Related Parties 

Matthew Oakeshott is a Director of OLIM Property Limited which has an agreement with the Group to provide investment management services.

OLIM Property Limited receive an investment management fee of 0.60% of the capital assets that it manages.

The investment management agreement with OLIM Limited ceased with effect from 28 February 2021 and responsibility of the equity portfolio moved to OLIM Property Limited. OLIM Limited received an investment management fee of GBPnil (half year to 30 September 2020: GBP292,000 and year to 31 March 2021: GBP524,000).

OLIM Property Limited received an investment management fee of GBP529,000 (half year to 30 September 2020: GBP201,000 and year to 31 March 2021: GBP479,000). At the period end, the balance owed by the Group to OLIM Property Limited was GBP97,000 (31 March 2021: GBP84,000) comprising management fees for the month of September 2021, subsequently paid in October 2021.

Value and Indexed Property Income Services Limited is a wholly owned subsidiary of Value and Indexed Property Income Trust PLC and all costs and expenses are borne by Value and Indexed Property Income Trust PLC. Value and Indexed Property Income Services Limited has not traded during the period.

   10         Half Yearly Report 

The financial information contained in this Half Yearly Financial Report does not constitute statutory accounts as defined in sections 434 - 436 of the Companies Act 2006. The financial information for the six months ended 30 September 2021 and 30 September 2020 has not been audited.

The information for the year ended 31 March 2021 has been extracted and abridged from the latest published audited Financial Statements and do not constitute the statutory accounts for that year. Those Financial Statements have been filed with the Registrar of Companies and included the Report of the Independent Auditor, which contained no qualification or statement under section 498 of the Companies Act 2006.

This Half-Yearly Report was approved by the Board on 12 November 2021.

Other information

A full copy of the 2021 Interim Report and Financial Statements will be printed and issued to Shareholders. In due course, a copy will be available on the Company's website at:

https://www.olimproperty.co.uk/value-and-indexed-property-income-trust.html .

Neither the content of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

The 2021 Interim Report and Financial Statements will be submitted to the National Storage Mechanism and will be available for inspection at:


By order of the Board

Maven Capital Partners UK LLP

Company Secretary

0141 306 7400

12 November 2021

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