TIDMCREI
RNS Number : 6960G
Custodian REIT PLC
24 November 2015
THE INFORMATION IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT
FOR PUBLICATION, RELEASE OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN
OR INTO OR FROM THE UNITED STATES, AUSTRALIA, JAPAN, THE REPUBLIC
OF SOUTH AFRICA, ANY EEA STATE (OTHER THAN THE UK) OR ANY OTHER
EXCLUDED TERRITORY.
24 November 2015
Custodian REIT plc
("Custodian REIT" or "the Company")
Interim Results
Custodian REIT (LSE: CREI), the UK commercial real estate
investment company focused on smaller lot sizes, today reports its
interim results for the six months ended 30 September 2015 ("the
Period").
Financial highlights and performance summary
-- Net asset value ("NAV") per share total return(1) of 4.6%
-- NAV per share of 103.0p(2) (unaudited NAV previously reported
as 102.6p, including fair value adjustment for fixed rate loan)
-- Portfolio value of GBP232.9m
-- GBP23.4m invested in 14 acquisitions and on-going developments during the Period
-- GBP0.1m profit on disposal from one property sale
-- Average portfolio net initial yield ("NIY") 7.1%, unexpired
lease term 6.8 years, occupancy rate 97.7%
-- GBP14.3m(3) of new equity raised at an average dividend adjusted premium of 7.2% to NAV
-- Placing, open offer and offer for subscription in progress targeting GBP50m of new monies
-- Profit after tax of GBP7.9m
-- Dividends of 3.0p per share paid in the Period(4) , proposed Q2 dividend of 1.5p per share
-- Net gearing(5) of 13.7%
-- Pipeline of GBP78.1m properties under offer or in solicitors' hands
1. NAV movement including dividends paid.
2. See Note 16.
3. Before costs and expenses of GBP0.3 million.
4. Dividends of 1.5p paid for each of the quarters ended 31
March 2015 and 30 June 2015.
5. Gross borrowings less unrestricted cash divided by property
portfolio valuation.
David Hunter, Chairman of Custodian REIT, said:
"This has been another period of significant investment, as we
seek to realise economies of scale offered by the Company's
relatively fixed cost base, while adhering to the Company's
investment policy and maintaining the quality of both properties
and income. We remain well placed to meet our goal of paying
further quarterly dividends, fully covered by income, to achieve an
annual dividend of 6.25p for the year ending 31 March 2016.
"The current market dynamic supports our strategy of targeting
high quality, smaller lot size properties across regional markets,
with the type of institutional grade property targeted by the
Company showing value relative to larger lots through a higher net
income return and opportunities for future rental growth.
"I expect occupational demand, combined with a limited supply of
new development, to drive further rental growth across regional
markets and minimise vacancy rates, supporting both sustainable
income returns and capital value growth over the long-term."
Important notice
Past performance cannot be relied on as a guide to future
performance.
Further information
Further information regarding the Company can be found at the
Company's website www.custodianreit.com or please contact:
Custodian Capital Limited
Richard Shepherd-Cross / Nathan Tel: +44 (0)116 240
Imlach / Ian Mattioli 8740
www.custodiancapital.com
Numis Securities Limited
Nathan Brown / Hugh Jonathan Tel: +44 (0)20 7260 1000
www.numiscorp.com
Camarco
Ed Gascoigne-Pees Tel: +44 (0)20 3757 4984
www.camarco.co.uk
Chairman's statement
I am pleased to report the Company's results for the six months
ended 30 September 2015. We invested a total of GBP23.4 million
during the Period, completing 14 acquisitions and achieving
practical completion on two developments, funded by GBP14.3 million
raised from the issue of new shares and a new GBP20 million term
loan. We continue to target growth, seeking to realise the
potential economies of scale offered by the Company's relatively
fixed cost base, while adhering to the Company's investment policy
and maintaining the quality of both properties and income.
At the same time as rapidly growing the portfolio, we have
continued to pay fully covered dividends in line with target,
minimising 'cash drag' on the issue of new shares by taking
advantage of the flexibility offered by the Company's revolving
credit facility ("RCF").
The successful deployment of new monies on the acquisition of
high quality assets at an average NIY of 7.35% highlights a key
advantage of our strategy to focus on smaller lots in strong,
regional markets.
Following the Period end, the Board announced the Company's
intention to raise GBP50 million of new monies through the issue of
new shares, with the ability to increase this to up to GBP75
million subject to demand ("the Issue"). Admission of the new
shares is expected on 3 December 2015.
The Issue is expected to be accretive to shareholder value as
the premium to NAV exceeds the expected costs of the issue and the
increased NAV in excess of GBP200 million will attract a lower
marginal annual management charge, as set out in the investment
management agreement.
The Board was also delighted to announce the exchange of
contracts for the acquisition of a property portfolio for GBP69.4
million due to complete in January 2016, details of which are set
out in the Investment Manager's report.
Market
Custodian Capital Limited ("CCL" or "the Manager"), the
Company's discretionary investment manager, anticipates continued
demand for property investment as interest rates stay 'lower for
longer', with a competitive market offering potential value growth.
The Company has targeted high quality, regional lot sizes below
GBP7.5 million and has benefitted from a significant net initial
yield advantage accordingly. The Manager expects less competition
for smaller lot sizes, with the type of institutional grade
regional property targeted by the Company showing value relative to
larger lots through a higher net income return and opportunities
for future rental growth, which are not 'priced-in' to every
deal.
The focus of demand from institutional funds, open-ended retail
funds, public property companies and overseas investors has been
for lot sizes greater than GBP10 million, leading to strong
competition for larger assets. Many of these investors have been
simultaneously selling smaller properties, creating a strong
pipeline of high quality assets that fit Custodian REIT's
investment strategy. The Manager believes these dynamics will
continue through the first half of 2016. In addition, the property
market has entered a phase of rental growth, which I expect to
enhance future income returns and support capital value growth over
the long-term.
Net Asset Value
The Company delivered NAV total return per share of 4.6% for the
Period. The first half was a period of significant new investment,
where the initial costs (primarily stamp duty) of acquiring 14 new
properties diluted NAV total return by circa 0.6%.
Pence
per
share GBPmillion
--------------------------------------------- --------- -----------
NAV at 31 March 2015 101.3 180.0
Issue of equity (net of costs) 0.4 14.0
101.7 194.0
Valuation uplift in property portfolio 1.4 2.6
Profit on disposal of investment properties 0.1 0.1
Impact of acquisition costs (0.6) (1.1)
0.9 1.6
Income 4.7 8.7
Expenses and net finance costs (1.3) (2.3)
Dividends paid (3.0) (5.5)
NAV at 30 September 2015 103.0(6) 196.5
--------------------------------------------- --------- -----------
6. Unaudited NAV per share of 102.6p (as previously reported) is
referenced in Note 16.
In addition to new acquisitions, activity during the Period also
focused on pro-active asset management, which generated GBP0.7
million of the GBP2.6 million valuation uplift. During the
remainder of the financial year we intend to continue our asset
management activities and complete on the current acquisition
pipeline, with the deployment of existing debt facilities
increasing gearing towards our target level of 25% loan to
value.
Share price
Total shareholder return for the first half of the financial
year was 1.8%, with a closing price of 108.5 pence per share on 30
September 2015 representing a 5.8% premium to NAV. During the
Period the Company has traded at a consistent premium to NAV, with
low volatility offering shareholders stable returns. I believe the
premium to NAV has been a function of both strong demand for
closed-ended property funds and the attractive income offered by
the Company's dividend policy.
Placing of new ordinary shares
The Company issued 13.2 million new shares during the Period, at
an average premium to dividend adjusted NAV of 7.2%. These issues
have been accretive to NAV, with positive investor demand for the
Company's shares a testament to our success to date.
Borrowings
The Company's target gearing ratio is 25% loan to value, with a
loan to value ratio of 13.7% at 30 September 2015.
(MORE TO FOLLOW) Dow Jones Newswires
November 24, 2015 02:01 ET (07:01 GMT)
The Board is keen to reduce risk to shareholders wherever
possible and has taken advantage of the prevailing low interest
rates to secure long term borrowing at a fixed rate. On 14 August
2015 the Company entered into an agreement for Scottish Widows plc
to provide a new 10 year term loan facility of GBP20 million,
repayable on 14 August 2025. Under this agreement, the Company will
pay a fixed interest rate of 3.935% per annum.
To allow further expansion of the portfolio as we seek to take
advantage of expected rental growth across the market, following
the Period end the Company has increased the RCF facility from
GBP25 million to GBP35 million and extended its term from expiry in
March 2019 to November 2020.
The three acquisitions completed since 30 September 2015 have
increased the current gearing ratio to 17.3% and I anticipate that
following the proposed Issue and completion on the acquisition
pipeline, the Company's gearing will increase further towards our
target.
Investment Manager
The Board is pleased with the progress and performance of the
Investment Manager, particularly its success in continuing growth
through the deployment of new monies, while securing the earnings
required to pay fully covered dividends in line with target.
Dividends
Income is a major component of total return. The Company paid
two interim dividends totalling 3.0 pence per share during the
Period. To provide greater flexibility over future dividend policy,
on 14 August 2015 the Company's share premium account of GBP181.5
million was cancelled and transferred to distributable
reserves.
The Board intends to pay an interim dividend of 1.5 pence per
share for the quarter ended 30 September 2015, which will be paid
on 31 December 2015. In the absence of unforeseen circumstances,
the Board believes the Company is well placed to meet its target of
paying further quarterly dividends, fully covered by income, to
achieve an annual dividend of 6.25 pence per share for the year
ending 31 March 2016.
The Board is committed to growing the dividend sensibly, at a
rate which is fully covered by net rental income and does not
inhibit the flexibility of the Company's investment strategy.
Outlook
While the investment market has tightened significantly, in
large part this is being matched by the strengthening occupational
market. This, combined with a dearth of modern, vacant space, is
leading to rental growth in most office and industrial markets,
with reducing vacancy rates on the High Street driving a return to
rental growth in many retail centres.
The current market dynamic supports the Company's strategy of
targeting a high income return, fully covered by income from
smaller lot size properties across regional markets. I expect
occupational demand, combined with a limited supply of new
development, to drive further rental growth across regional markets
and minimise vacancy rates, supporting both sustainable income
returns and capital value growth over the long-term.
David Hunter
Chairman
23 November 2015
Investment Manager's report
Property market performance in 2015 has been dominated by
continued yield compression and the increasing importance of the
regions as the engine room of growth. CBRE's Marketview(7) reported
a yield compression of 93 bps in the 'All Property Yield' for the
three years to Q3 2015, of which 31 bps was recorded for the last
twelve months. While partly due to the expectation of future rental
growth, we believe a large part is a function of extraordinary
demand across the spectrum of the investment market, which remains
primarily focused on larger lot sizes in excess of GBP10
million.
Demand is also increasingly focused on regional markets, with
Savills(8) recently reporting a record level of overseas investment
into UK regional markets, again focused on large lot sizes either
by way of portfolio transactions or the prime regional cities. By
contrast, the smaller lots typical of the Custodian REIT portfolio
have not experienced the same demand pressures and consequently the
Company's assets have witnessed only 30 bps of yield compression
over the same three years to Q3 2015. In addition to smaller lot
size properties offering a higher income return, these statistics
suggest there is less volatility in the valuation of this sector,
which should support sustainable income returns going forward.
LSH UK Investment Transactions data(9) indicates the NIY gap
between small and large lots traded in the market has fallen to 138
bps in Q3 2015.
The Investment Property Forum(10) forecasts average rental
growth of 2.45% per annum over the next four years, following 3.8%
of growth in 2015. I believe it is likely that rental growth,
rather than further yield compression, will be the key driver of
capital growth over the next few years. This further underlines the
importance of income and income driven returns in real estate
investment, and supports Custodian REIT's strategic focus on
income.
7. Source: CBRE Marketview UK Prime Rent and Yield, Q3 2012 and
Q3 2015.
8. Source: www.costar.co.uk.
9. Source: UK Investment Transactions Bulletin Q3 2015.
10. Source: Investment Property Forum UK Consensus Forecasts
2015.
Pipeline
Since Admission, Custodian REIT has taken advantage of the
pricing advantage offered by smaller lots to acquire 56 properties
for GBP149.6 million and agree terms on a further GBP78.1 million
on 13 small lot size, regional properties, at a combined average
NIY of 7.1%. This is consistent with the Company's investment
policy and supports the target dividend.
The Company recently exchanged contracts to acquire a portfolio
of 11 UK commercial properties ("the Target Portfolio") for GBP69.4
million in an off-market transaction. The Target Portfolio is also
consistent with the Company's investment policy, comprising smaller
size, good quality, secondary offices, retail and industrial assets
diversified by tenant and region. The tenant covenant profile also
meets the minimum criteria set out in the investment policy.
The acquisition of the Target Portfolio is expected to complete
in two tranches in early January 2016. Five properties, totalling
GBP28 million, will be funded through a combination of the
Company's existing cash resources and capacity under the RCF. The
balance of six properties will be acquired by the Company subject
to the availability of the net proceeds of the Issue.
Following completion of the intended acquisition of the Target
Portfolio, the weighted average unexpired lease term of the
property portfolio would stand at approximately 6.1 years as at
January 2016, although completion of ongoing asset management
initiatives is expected to increase WAULT to 6.5 years by 31 March
2016. The Board expects the acquisition of the Target Portfolio to
enhance returns to shareholders by deploying cash raised from the
Issue promptly, improving dividend cover and offering the potential
for a number of further asset management opportunities.
In addition to the Target Portfolio, the Company has a GBP5
million committed pipeline of pre-let industrial development
fundings in Cannock and Stevenage, and the refurbishment of an
industrial unit in Milton Keynes. The Company also has a GBP6.6
million leisure park and a GBP2.1 million high street retail
property adjoining an existing portfolio holding under offer, and
the Manager continues to track other investment opportunities,
including a single let industrial property and a city centre office
building. The combined value of these other opportunities is
approximately GBP12.5 million.
Investment objective
The key investment objective of Custodian REIT is to provide
shareholders with an attractive level of income by maintaining the
high level of dividend, fully covered by earnings, with a
conservative level of gearing.
Since Admission, minimising cash drag through the prompt
deployment of funds raised at IPO, on subsequent share placings and
from new term debt facilities has been central to realising the key
investment objective. The Company benefits from a GBP35 million
RCF, which has been integral to reducing cash drag, giving us the
flexibility to reduce debt in the Company when new equity is
issued.
The rate of investment during the Period has been ahead of the
Board's expectations, which we believe demonstrates the success of
the Company's strategy of focusing on smaller lots in strong,
regional markets. We remain confident we can continue to acquire
properties that meet the Company's investment criteria and improve
the portfolio mix. In 2016 we expect to see continued rental growth
and low vacancy rates, supporting the Company's investment
objectives.
Portfolio performance
During the Period the Company completed on 14 new property
acquisitions and achieved practical completion on two development
fundings, adding GBP23.4 million of assets to the portfolio.
Property acquisitions are shown below:
Industrial
Location: Glasgow International Location: Cannock (development)
Airport Tenant: Hellermann Tyton
Tenant: DHL Global Forwarding Net initial yield: 6.38%
(UK) Consideration: GBP4.22m
Net initial yield: 7.08%
Consideration: GBP1.23m
Location: Warwick (development) Location: Bristol*
Tenant: Semcon Tenant: BSS
Net initial yield: 6.64% Net initial yield: 6.70%
Consideration: GBP2.64m Consideration: GBP3.53m
--------------------------------
Location: Farnborough* Location: Kettering*
Tenant: Triumph Structures Tenant: Sealed Air
Net initial yield: 11.53% Net initial yield: 7.28%
Consideration: GBP1.05m Consideration: GBP1.55m
--------------------------------
Location: Normanton*
Tenant: Acorn Web Offset
Net initial yield: 3.38%
Consideration: GBP1.22m
--------------------------------
*Acquired as part of the 'Blue Oaks' portfolio
(MORE TO FOLLOW) Dow Jones Newswires
November 24, 2015 02:01 ET (07:01 GMT)
Retail
Location: Chester* Location: St Albans*
Tenant: Aslan Jewellery Tenant: EE
and Kuoni Travel Net initial yield:
Net initial yield: 6.35% 5.74%
Consideration: GBP1.90m Consideration: GBP1.24m
Location: Bedford* Location: Scarborough*
Tenant: Waterstones Booksellers Tenant: Waterstones
Net initial yield: 7.01% Booksellers
Consideration: GBP1.16m Net initial yield:
7.23%
Consideration: GBP1.21m
----------------------------
Location: Swansea* (Sold) Location: Taunton*
Tenant: Shoezone Tenant: Wilkinson Hardware
Stores
Net initial yield:
6.51%
Consideration: GBP1.34m
----------------------------
*Acquired as part of the 'Blue Oaks' portfolio
Other
Location: Lincoln
Tenant: MKM Building
Supplies
Net initial yield: 6.90%
Consideration: GBP2.33m
In the six months ended 30 September 2015, valuation increases
were GBP2.6 million before acquisition costs (1.3% of opening
portfolio value), split by sector below:
Weighting
Valuation Valuation by
Change Change
30 September 31 March Income in in
2015 2015 30 September Valuation(11) Valuation(11)
Sector GBPm GBPm 2015 GBPm %
------------ -------------- ---------- -------------- --------------- ---------------
Industrial 102.0 91.3 47.0% 2.1 2.3
Retail 55.6 49.7 24.0% 0.1 0.2
Office 24.1 24.1 17.0% 0.0 0.0
Other 51.2 42.2 12.0% 0.4 0.9
232.9 207.3 100.0% 2.6
------------ -------------- ---------- -------------- ---------------
11. Excluding the impact of acquisitions and disposals.
A shortage of modern, vacant industrial space is leading to
strong rental growth in the sector as tenant demand competes for
limited supply, although in core industrial and distribution
locations occupier-led and speculative development is now a
feature. The Company's investment strategy is well suited to the
industrial and distribution sector by virtue of lot size, quality
of building, strength of tenant covenant and relatively low
obsolescence of the underlying real estate. This sector remains a
key target for acquisitions, although we are cautious around the
recent squeeze on pricing and remain very focused on both the
underlying vacant possession value and the prospects for rental
growth.
High street retail remains polarised between high-end comparison
retailing and convenience retailing. Rental growth has returned to
the retail markets as vacancy rates have fallen. The importance of
multi-channel retailing has seen even 'die-hard' catalogue
retailers, such as Boden, looking for physical stores,
demonstrating the importance of retail property to the market.
Retail property continues to be an important part of an income
focused portfolio and the sector also benefits from lower
re-letting costs than in others.
The retail warehouse sector is running at two speeds with
institutional demand focused on retail parks with an open A1
planning consent, where rents have seen significant growth.
Meanwhile, retail warehouse units with planning consent limited to
bulky goods benefit from much lower rents and have also avoided the
significant yield compression associated with retail parks with
unrestricted planning.
Offices that meet the demands of growing, modern businesses are
in short supply and, in key locations, the market requires new
development to meet occupier demand. These factors are driving
rental growth and have even encouraged speculative development in
strategic locations. Our focus is on modern or fit-for-purpose
offices where there is evidence of this growth.
The 'other' sector of the portfolio, which includes car
showrooms, restaurants, hotels, children's day nurseries and petrol
filling stations can offer long leases, indexed or fixed rental
uplifts as well as portfolio diversification, and remains a target
sector for further additions to the Company's portfolio.
Portfolio risk
The portfolio's risk exposure is reduced by 24% of income
benefitting from either fixed or indexed rent reviews, with there
being increasingly strong evidence of open market rental growth
across all sectors.
Short term income at risk is a relatively low proportion of the
portfolio's total income, with only 22% expiring in the next three
years (7% within one year).
Asset management
While the principal focus since Admission has been the
acquisition of new properties, we have also been proactively
managing the portfolio to enhance income and maintain cash flow. We
have approached more than 20 tenants across the portfolio regarding
various asset management initiatives, including new lettings, lease
renewals, lease extensions, rent reviews, lease surrenders,
refurbishment, development or a combination of the above. We are
now in active discussions with a number of tenants with
overwhelmingly positive responses received, demonstrating a strong
prevailing occupational market.
Key asset management events completed during the Period
include:
-- A property in Swansea, acquired for GBP0.4 million in June
2015 as part of a portfolio, was considered sub-scale for the
portfolio and was disposed of to a private investor in September
2015 for GBP0.5 million.
-- Savers has signed a five year reversionary lease in Bury St
Edmunds commencing from current expiry in January 2017 in return
for three months' rent free. The new lease contains a fixed rental
uplift from GBP49,900 to GBP53,000 with expiry in January 2022.
-- Laura Ashley in Grantham has agreed to remove the tenant
break option in May 2016 in return for a reverse premium equating
to 4.5 months' rent, extending the lease term to May 2021.
-- Chesham Insurance's lease in Leicester has been extended to
December 2015, and a five year renewal from December 2015 with a
tenant only break option in June 2018 is in discussion.
-- At Bradbourne Drive, Milton Keynes, which was acquired with
the tenant having issued notice to exit, an early surrender was
accepted in June 2015 in consideration for all rent due to expiry
and a dilapidations settlement. A comprehensive refurbishment of
the unit is underway for a total of c. GBP1 million, to be
completed in January 2016, with agents actively marketing the unit
to let.
Since the Period end, Superdrug's lease in Southsea was
re-geared to remove the May 2018 tenant break option and three
months' rent free due at that point for a cash incentive, and a new
three year lease was agreed with MTS in Bardon, which has been in
occupation via a tenancy at will since the head lease holder's
expiry.
Outlook
We believe demand for property investment, led by overseas
investors, UK institutions and open-ended retail funds, is likely
to continue from across the spectrum as interest rates stay 'lower
for longer'. Despite this continued demand, we expect to see larger
funds continuing to sell smaller lots regarded as being sub-scale
for the ambitions of those funds. Accordingly, we anticipate this
trend will maintain a pipeline of new acquisition opportunities for
Custodian REIT and the relative imbalance of demand will lead to
smaller lots showing 'value' relative to larger lots in terms of
income returns.
Growth in rents is now taking hold in the regional markets and
we expect that this will continue, driven by the significant lack
of supply of good quality, modern real estate combined with growing
occupational demand.
I am confident the Company's strategy of targeting income with
low gearing in a well-diversified regional portfolio will continue
to deliver the stable long term returns demanded by our
shareholders.
Richard Shepherd-Cross
for and on behalf of Custodian Capital Limited
Investment Manager
23 November 2015
Portfolio summary
Town Address Tenant %Portfolio
Income
Industrial
1 Chesford Grange,
Chesford Warrington Cheshire JTF Wholesale 2.76%
Unit 16, Ashby
Park, Ashby De
Ashby La Zouch Teleperformance 2.65%
Zeus Building,
Tally Close,
Agecroft Commerce
Salford Park, Salford Restore Scan 2.30%
Emerson Network
Units 1 & 2,Priory Power & Elma
Bedford Business Park Electronics 2.26%
Doncaster 3 Carriage Way Portola Packaging 2.02%
The Diamond,
Diamond Way,
Stone Business
Stone Park Revlon International 1.83%
Pegasus Drive,
Stratton Business Turpin Distribution
Biggleswade Park Services 1.71%
Blakeney Way,
Kingswood Lakeside,
Cannock Cannock 1.62%
Unit B, Centre
(MORE TO FOLLOW) Dow Jones Newswires
November 24, 2015 02:01 ET (07:01 GMT)
31, Foxbridge YESSS Electrical
Way (B) 1.61%
Milton Keynes Bradbourne Drive Massmould 1.60%
Unit 10 Albert
Bristol Reach BSS 1.42%
Alto House, Ravensbank SAPA Profiles
Redditch Drive UK 1.42%
DX Network
Nuneaton Harrington Way Services 1.38%
Western Wood Sherwin-Williams,
Way, Langage Diversified
Plymouth Business Park Brands 1.34%
South Delivery
Office, Orchard Royal Mail
Coventry Business Park Group 1.32%
Trafford Unit 4 The Furrows,
Park Trafford Park Unilin Distribution 1.25%
Superdrug
Avonmouth Unit M3, RD Park Stores 1.23%
Sytner Body Shop,
Brades Road,
Oldbury Oldbury Ryland Properties 1.19%
Unit A, 14-18
Bermondsey Verney Street Constantine 1.14%
55 Westburn Drive,
Clydesmill Industrial
Cambuslang Estate Brenntag UK 1.13%
Howemoss Drive,
Kirkhill Industrial DHL Express
Aberdeen Estate UK 1.10%
Edgehill Drive,
Warwick Tournament Fields Semcon 1.03%
1 Livingstone
Hamilton Boulevard Ichor Systems 1.00%
West Midlands
NHS Ambulance Ambulance
Centre, Opus Service NHS
Erdington Aspect Trust 0.86%
Synergy Health
Sheffield Sheffield Parkway (UK) 0.78%
21/21A Invincible Triumph Structures
Farnborough Road Farnborough 0.78%
Unit C, Estuary,
Speke Commerce Park Powder Systems 0.77%
Unit E/F, Reg's
Coalville Way, Bardon MTS Logistic 0.74%
Unit 1, Willowbridge
Way, Whitwood,
Castleford Wakefield Bunzl UK 0.71%
Kettering Telford Way Sealed Air 0.68%
Unit E, Estuary
Commerce Park, DHL International
Speke Speke (UK) 0.68%
National Court,
Unit A, South Nationwide
Accommodation Crash Repairs
Leeds Road Centres 0.66%
Lancaster Way,
Ermine Business
Huntington Park PHS Group 0.60%
Units 2, 7, 8 River Island
& 9 Shepcote Clothing &
Sheffield Enterprise Park Andrew Page 0.60%
Royal Mail
Kilmarnock 3 Queens Drive Group 0.54%
DHL Global
Forwarding
Glasgow 2 Campsie Drive (UK) 0.53%
Phoenix Business
Park, Brindley
Hinckley Road Multi-Let 0.44%
National Court,
Unit B, South
Accommodation Sovereign
Leeds Road Air Movement 0.41%
Acorn Web
Normanton Loscoe Close Offset 0.25%
Tilbrook Industrial
Milton Keynes Estate Vacant 0.00%
Town Address Tenant %Portfolio
Income
Retail
North Row, Grafton
Milton Keynes Gate Staples UK 2.39%
Discovery Retail Laura Ashley,
Park, London Poundstretcher
Grantham Road & Carpetright 1.85%
2/6 Long Wyre Poundland
Colchester Street & Savers 1.41%
54 Above Bar
Southampton Street URBN UK 1.25%
Sainsbury's
Torpoint Anthony Road Supermarket 1.24%
The Crystal Retail
Stourbridge Centre Multi-Let 1.17%
9 White Lion
Norwich Street Specsavers 1.14%
Llandudno 101 Mostyn Street WH Smith 0.85%
T J Morris
Limited (t/a
Portishead Harbour Road Home bargains) 0.83%
15 St Peters The White
Nottingham Gate Company (UK) 0.80%
28/29a Pride
Shrewsbury Hill Cotswold Outdoor 0.77%
Jewellery
Quarter, 37-40A Frederick
Birmingham Street Multi-Let 0.74%
Kings Lynn 43/44 High Street Top Man 0.71%
Superdrug
Weston-Super-Mare 27/29 High Street Stores 0.70%
Glasgow 98 Argyle Street Greggs 0.68%
Superdrug
19/23 Palmerston Stores & Portsmouth
Southsea Road City Council 0.66%
Chester Eastgate Street Kuoni Travel 0.63%
Phase Eight
(Fashion &
Edinburgh 47B George Street Designs) 0.63%
17-18 Bath Street
and 59-65A High Landmark Property
Redcar Street Investments 0.56%
Wilkinson
Taunton 61 East Gate Hardware Stores 0.53%
Scarborough 97-98 Westborough Waterstones 0.53%
Bury St The Works
Edmunds 14 Cornhill Street Store 0.51%
11/13 Silver
Bedford Street Waterstones 0.49%
165/171 High
Dumfries Street Iceland Foods 0.48%
Trident House,
St Albans Mosquito Way EE 0.43%
Hinckley,29/31,Castle
Hinckley Street W H Smith 0.40%
Framemaker
Galleries
& Danish Wardrobe
Cirencester 6/8 Dyer Street Company 0.34%
10 Watergate
Chester Street Whistles Holdings 0.33%
Bury St 15 Abbeygate Savers Health
Edmunds Street & Beauty 0.28%
Majestic Wine
Portishead Harbour Road Warehouses 0.26%
Done Brother
(Cash Betting)
Cheltenham 85 High Street t/a Betfred 0.24%
109 Commercial
Portsmouth Road Vacant 0.00%
Town Address Tenant %Portfolio
Income
Office
Gateway House,
Grove Park, Penman Mattioli Woods,
Leicester Way RBS & Regus 2.73%
Leeds Cardinal House Enact Properties 1.93%
Leeds David Street Enact Properties 1.65%
1 Pride Place,
Derby Pride Park Geldards LLP 1.46%
MW House, Grove Mattioli Woods
Park, Penman & Chesham
Leicester Way Insurance 1.42%
250 West George
Glasgow Street Multi-Let 1.26%
Solihull Westbury House Lyons Davidson 1.08%
Central Manchester
University
Unit C, Madison Hospitals
Place, Central NHS Foundation
(MORE TO FOLLOW) Dow Jones Newswires
November 24, 2015 02:01 ET (07:01 GMT)
Manchester Park Trust 0.68%
Town Address Tenant %Portfolio
Income
Other
Mobberley Road,
Park Gate Bentley R Stratton
Knutsford Manchester & Co 2.10%
Somerfield
Gillingham Beechings Way Stores 1.53%
489 Aylestone
Leicester Road Magnet 1.41%
Dudley Castlegate Way Premier Inn 1.36%
Marshall Motor
Peterborough Mallory Road Group 1.28%
Travelodge
Portishead Harbour Road Hotels 1.14%
Stephenson Road, MKM Building
Lincoln North Hykeham Supplies 1.09%
Coventry Road, Allen Ford
Solihull Elmdon (UK) t/a Kia 0.83%
Plumbase,
Multi Tile
F1 Autocentres
Counterpoint, & South Cheshire
Crewe Weston Road Glass 0.80%
105-107 Brighton Honda Motor
Redhill Road Europe 0.80%
Bluecoat House,
Bath Saw Close Prezzo 0.70%
Stonegate
High Wycombe 46/50a Frogmore Pub Co 0.66%
MKM Building
Castleford Castlewood Way Suppliers 0.63%
Apartments 1-10,
1 Cottesmore Multi tenanted
Lenton Road - Residential 0.50%
84/90 Palmerston
Southsea Road JD Wetherspoon 0.49%
Pizza Hut
Watford The Dome Roundabout (UK) 0.49%
Pizza Hut
Leicester Grove Farm Triangle (UK) 0.47%
Portishead Harbour Road JD Wetherspoon 0.40%
Basingstoke 10 Chequers Road Teddies Nurseries 0.36%
107 Bois Moor
Chesham Road Teddies Nurseries 0.30%
The Old Knutsford Knutsford
Knutsford Library Day Nursery 0.28%
Condensed consolidated statement of comprehensive income
For the six months ended 30 September 2015
Audited
Unaudited Unaudited 12
6 6 months
months months to
to 30 September to 30 September 31 March
2015 2014 2015
Note GBP000 GBP000 GBP000
----------------------------------------- ----- ----------------- ----------------- ----------
Revenue 4 8,686 4,958 11,570
Investment management
fee (974) (686) (1,542)
Operating expenses
of rental property
* rechargeable to tenants (427) (314) (342)
* directly incurred (180) (178) (373)
Professional fees (191) (345) (494)
Directors' fees (77) (115) (190)
Administrative expenses (66) (59) (101)
Expenses (1,915) (1,697) (3,042)
Operating profit before
financing and revaluation
of investment properties 6,771 3,261 8,528
Analysed as:
Operating profit before
exceptional items 6,821 3,480 8,747
Exceptional cost 5 (50) (219) (219)
6,771 3,261 8,528
Profit on disposal
of investment properties 77 - 269
Unrealised gains on
revaluation of investment
properties:
- relating to property
revaluations 10 2,624 2,597 6,083
* relating to costs of acquisition 10 (1,168) (2,553) (5,844)
----------------------------------------- ----- ----------------- ----------------- ----------
1,533 44 508
Operating profit before
financing 8,304 3,305 9,036
Net finance costs 6,7 (399) (49) (289)
----------------------------------------- ----- ----------------- ----------------- ----------
Profit before tax 7,905 3,256 8,747
Income tax expense 8 - - (2)
Profit for the period
and total comprehensive
income for the period,
net of tax 7,905 3,256 8,745
Attributable to:
Owners of the Company 7,905 3,256 8,745
Earnings per ordinary
share:
Basic and diluted (pence
per share) 3 4.3 2.5 6.0
The profit for the period arises from the Company's continuing
operations.
Condensed consolidated statement of financial position
As at 30 September 2015
Registered number: 8863271
Unaudited Unaudited Audited
30 30 31
September September March
2015 2014 2015
Note GBP000 GBP000 GBP000
------------------------------- ----- ----------- ----------- ----------
Non-current assets
Investment properties 10 232,850 145,894 207,287
Total non-current assets 232,850 145,894 207,287
------------------------------- ----- ----------- ----------- ----------
Trade and other receivables 11 1,931 1,898 1,072
Cash and cash equivalents 13 8,347 1,343 849
Total current assets 10,278 3,241 1,921
------------------------------- ----- ----------- ----------- ----------
Total assets 243,128 149,135 209,208
------------------------------- ----- ----------- ----------- ----------
Equity
Issued capital 15 1,908 1,320 1,776
Share premium 15 7,404 128,487 175,009
Retained earnings 15 187,145 1,608 3,201
Total equity attributable
to equity holders of
the Company 196,457 131,415 179,986
------------------------------- ----- ----------- ----------- ----------
Non-current liabilities
Borrowings 14 39,280 12,600 23,811
Total non-current liabilities 39,280 12,600 23,811
------------------------------- ----- ----------- ----------- ----------
Current liabilities
Trade and other payables 12 3,741 2,812 2,292
Deferred income 3,650 2,308 3,119
Total current liabilities 7,391 5,120 5,411
------------------------------- ----- ----------- ----------- ----------
Total liabilities 46,671 17,720 29,222
------------------------------- ----- ----------- ----------- ----------
Total equity and liabilities 243,128 149,135 209,208
------------------------------- ----- ----------- ----------- ----------
These interim financial statements of Custodian REIT plc were
approved and authorised for issue by the Board of Directors on 23
November 2015 and are signed on its behalf by:
David Hunter
Director
Condensed consolidated statement of cash flows
(MORE TO FOLLOW) Dow Jones Newswires
November 24, 2015 02:01 ET (07:01 GMT)
For the period ended 30 September 2015
Unaudited Unaudited Audited
6 6 12
months months months
to 30 to 30 to
September September 31 March
2015 2014 2015
Note GBP000 GBP000 GBP000
--------------------------- ----- ----------- ----------- -----------
Operating activities
Profit for the period 8,304 3,305 9,036
Adjustments for:
Increase in fair value
of investment property 10 (2,624) (2,597) (6,083)
Profit on disposal
of investment properties (77) - (269)
Net non-cash finance
charges 6,7 28 (36) (85)
Income tax 8 - - (2)
Cash flows from operating
activities before
changes in working
capital and provisions 5,631 672 2,597
--------------------------- ----- ----------- ----------- -----------
Increase in trade
and other receivables (797) (1,898) (1,072)
Increase in trade
and other payables 1,980 5,120 5,411
Cash generated from
operations 6,814 3,894 6,936
--------------------------- ----- ----------- ----------- -----------
Interest paid 7 (431) (56) (258)
--------------------------- ----- ----------- ----------- -----------
Net cash flows from
operating activities 6,383 3,838 6,678
--------------------------- ----- ----------- ----------- -----------
Investing activities
Purchase of investment
property (23,353) (66,306) (125,728)
Disposal of investment
property 492 - 1,784
Interest received 6 4 43 54
Net cash from investing
activities (22,857) (66,263) (123,890)
--------------------------- ----- ----------- ----------- -----------
Financing activities
Proceeds from the
issue of share capital 14,294 55,000 102,620
Payment of costs of
share issue (282) (2,182) (2,824)
New borrowings (net
of costs) 15,407 12,600 23,811
Dividends paid 9 (5,447) (1,650) (5,546)
Net cash from financing
activities 23,972 63,768 118,061
--------------------------- ----- ----------- ----------- -----------
Net increase in cash
and cash equivalents 7,498 1,343 849
Cash and cash equivalents
at start of the period 849 - -
--------------------------- ----- ----------- ----------- -----------
Cash and cash equivalents
at end of the period 8,347 1,343 849
--------------------------- ----- ----------- ----------- -----------
Condensed consolidated statement of changes in equity
For the period ended 30 September 2015
Issued Share Retained Total
capital premium earnings equity
Note GBP000 GBP000 GBP000 GBP000
------------------------- ------- --------- ---------- ---------- ----------
As at 24 March 2014 50 - - 50
Profit for the period - - 8,745 -
Total comprehensive
income for period - - 8,745 8,745
Transactions with
owners of the Company,
recognised directly
in equity
Dividends (5,546) (5,546)
Issue of share capital 15 1,726 175,009 - 176,735
Profit on disposal
of own shares 2 2
As at 1 April 2015
(audited) 1,776 175,009 3,201 179,986
------------------------- ------- --------- ---------- ---------- ----------
Profit for the period - - 7,905 7,905
Total comprehensive
income for period - - 7,905 7,905
Transactions with
owners of the Company,
recognised directly
in equity
Dividends 9 - - (5,447) (5,447)
Issue of share capital 15 132 13,881 - 14,013
Transfer of reserves 15 - (181,486) 181,486 -
As at 30 September
2015 (unaudited) 1,908 7,404 187,145 196,457
------------------------- ------- --------- ---------- ---------- ----------
Retained earnings include GBP4.2 million of realised trading
profits, GBP181.5 million transferred from share premium account
(distributable "legal reserves" under the United Kingdom Listing
Authority Prospectus Rules issued by the Financial Conduct
Authority) and GBP1.5 million of unrealised profits relating to
property valuation movements.
Condensed consolidated statement of changes in equity
For the period ended 30 September 2014
Issued Share Retained Total
capital premium earnings equity
Note GBP000 GBP000 GBP000 GBP000
------------------------- ------- --------- ---------- ---------- ----------
As at 25 March 2014
(unaudited) 50 - - 50
------------------------- ------- --------- ---------- ---------- ----------
Total comprehensive
income for period - - 3,256 3,256
Transactions with
owners of the Company,
recognised directly
in equity
Dividends - - (1,650) (1,650)
Issue of share capital 15 1,270 128,487 - 129,757
Profit on disposal
of own shares - - 2 2
As at 30 September
2014 (unaudited) 1,320 128,487 1,608 131,415
------------------------- ------- --------- ---------- ---------- ----------
Notes to the interim financial statements for the period ended
30 September 2015
1. Corporate information
The Company is a public limited company incorporated and
domiciled in England and Wales, whose shares are publicly traded on
the London Stock Exchange plc's main market for listed securities.
The interim financial statements have been prepared on a historical
cost basis, except for the revaluation of investment properties and
certain financial assets, and are presented in pounds sterling with
all values rounded to the nearest thousand pounds (GBP000), except
when otherwise indicated. The interim financial statements were
authorised for issue in accordance with a resolution of the
Directors on 23 November 2015.
2. Basis of preparation and accounting policies
2.1. Basis of preparation
The interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting. The interim
financial statements do not include all the information and
disclosures required in the annual financial statements. The annual
report for the year ending 31 March 2016 will be prepared in
accordance with International Financial Reporting Standards adopted
by the International Accounting Standards Board ("IASB") and
interpretations issued by the International Financial Reporting
Interpretations Committee ("IFRIC") of the IASB (together "IFRS")
as adopted by the European Union, and in accordance with the
requirements of the Companies Act applicable to companies reporting
under IFRS.
The information relating to the Period is unaudited and does not
constitute statutory financial statements within the meaning of
section 434 of the Companies Act 2006. A copy of the statutory
accounts for the period ended 31 March 2015 has been delivered to
the Registrar of Companies. The auditor's report on those accounts
was not qualified, did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying the report and did not contain statements under section
498(2) or (3) of the Companies Act 2006.
The interim financial statements have been reviewed by the
auditor and their report to the Company is included within these
interim financial statements.
Certain statements in this report are forward looking
statements. By their nature, forward looking statements involve a
number of risks, uncertainties or assumptions that could cause
actual results or events to differ materially from those expressed
or implied by those statements. Forward looking statements
regarding past trends or activities should not be taken as
representation that such trends or activities will continue in the
future. Accordingly, undue reliance should not be placed on forward
looking statements.
2.2. Significant accounting policies
The principal accounting policies adopted by the Company and
applied to these interim financial statements are consistent with
those policies applied to the Company's annual report and financial
statements.
(MORE TO FOLLOW) Dow Jones Newswires
November 24, 2015 02:01 ET (07:01 GMT)
2.3. Going concern
The Directors believe the Company is well placed to manage its
business risks successfully. The Company's projections show that
the Company should continue to be cash generative and be able to
operate within the level of its current financing arrangements.
Accordingly, the Directors continue to adopt the going concern
basis for the preparation of the interim financial statements.
2.4. Segmental reporting
An operating segment is a distinguishable component of the
Company that engages in business activities from which it may earn
revenues and incur expenses, whose operating results are regularly
reviewed by the Company's chief operating decision maker to make
decisions about the allocation of resources and assessment of
performance and about which discrete financial information is
available. As the chief operating decision maker reviews financial
information for and makes decisions about the Company's investment
properties and properties held for trading as a portfolio, the
Directors have identified a single operating segment, that of
investment in and trading of commercial properties.
2.5. Principal risks and uncertainties
The Company's assets consist of direct investments in UK
commercial property. Its principal risks are therefore related to
the UK commercial property market in general but also the
particular circumstances of the properties in which it is invested
and their tenants. Other risks faced by the Company include
economic, strategic, regulatory, management and control, financial
and operational.
These risks, and the way in which they are mitigated and
managed, are described in more detail under the heading Principal
Risks and Uncertainties within the Report of the Directors in the
Company's Annual Report for the year ended 31 March 2015. The
Company's principal risks and uncertainties have not changed
materially since the date of that report and are not expected to
change materially for the remaining six months of the Company's
financial year.
3. Earnings per ordinary share
Basic earnings per share amounts are calculated by dividing net
profit for the year attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of
ordinary shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares. There are
no dilutive instruments.
The following reflects the income and share data used in the
basic and diluted earnings per share computations:
Unaudited Unaudited Audited
6 6 12
months months months
to 30 to 30 to
September September 31 March
2015 2014 2015
---------------------------- -------------- -------------- --------------
Net profit and diluted
net profit attributable
to equity holders of the
Company (GBP000) 7,905 3,256 8,745
----------------------------- -------------- -------------- --------------
Weighted average number
of ordinary shares:
Issued ordinary shares
at start period 177,605,659 5,000,000 5,000,000
Effect of shares issued
during the period 5,135,246 126,989,310 141,061,038
Basic and diluted weighted
average number of shares 182,740,905 131,989,310 146,061,038
Basic and diluted earnings
per share (pence) 4.3 2.5 6.0
----------------------------- -------------- -------------- --------------
4. Revenue
Unaudited 6 Unaudited
months 6 months Audited 12
to 30 to 30 months to
September September 31 March
2015 2014 2015
GBP000 GBP000 GBP000
----------------------------------------------- ----------- ---------- ------------
Gross rental income from investment properties 8,280 4,644 11,228
Income from recharges to tenants 406 314 342
8,686 4,958 11,570
----------------------------------------------- ----------- ---------- ------------
5. Exceptional items
During the Period, the Company incurred costs of GBP0.05 million
in relation to the cancellation of the share premium account as
detailed in Note 15.
One-off costs incurred on Admission in the period ended 30
September 2014 totalled GBP2.40 million of which GBP0.22 million
was recognised in the statement of comprehensive income and GBP2.18
million was taken to the share premium account as being directly
related to the issue of new shares.
6. Finance income
Unaudited 6 Unaudited 6
months months Audited 12
to 30 to 30 months to
September September 31 March
2015 2014 2015
GBP000 GBP000 GBP000
--------------- ----------- ----------- ------------
Bank interest 4 43 54
Finance income 119 - 30
123 43 84
--------------- ----------- ----------- ------------
7. Finance costs
Unaudited 6 Unaudited 6
months months Audited 12
to 30 to 30 months to
September September 31 March
2015 2014 2015
GBP000 GBP000 GBP000
---------------------------------------------------- ----------- ----------- ------------
Amortisation of arrangement fees on debt facilities 91 36 115
Bank interest 431 56 258
522 92 373
---------------------------------------------------- ----------- ----------- ------------
8. Income tax
The tax charge assessed for the Period is lower than the
standard rate of corporation tax in the UK during the Period of
20.0%. The differences are explained below:
Unaudited 6 Unaudited
months 6 months Audited 12
to 30 to 30 months to
September September 31 March
2015 2014 2015
GBP000 GBP000 GBP000
------------------------------------------------------------------------------ ----------- ---------- ----------
Profit before income tax 7,905 3,256 8,747
------------------------------------------------------------------------------- ----------- ---------- ----------
Tax charge on profit at a standard rate of 20.0% (30 September 2014: 21.3%, 31
March 2015:
21.0%) 1,581 694 1,837
Effects of:
REIT tax exempt rental profits and gains (1,581) (694) (1,835)
Income tax expense for the period Nil Nil 2
------------------------------------------------------------------------------- ----------- ---------- ----------
Effective income tax rate 0.0% 0.0% 0.0%
------------------------------------------------------------------------------- ----------- ---------- ----------
The Company operates as a Real Estate Investment Trust and hence
profits and gains from the property investment business are
normally exempt from corporation tax.
(MORE TO FOLLOW) Dow Jones Newswires
November 24, 2015 02:01 ET (07:01 GMT)
The UK Government reduced the rate of corporation tax from 21%
to 20% effective from 1 April 2015.
9. Dividends
Audited
Unaudited Unaudited 12
6 months 6 months months
to 30 to 30 to
September September 31 March
2015 2014 2015
GBP000 GBP000 GBP000
------------------------------ ----------- ----------- ----------
Equity dividends on ordinary
shares:
Interim dividend for the
quarter ended
30 June 2014: 1.25p - 1,650 1,650
Interim dividend for the
quarter ended
30 September 2014: 1.25p - - 1,948
Interim dividend for the
quarter ended
31 December 2014: 1.25p - - 1,948
Interim dividend for the
quarter ended
31 March 2015: 1.5p 2,672 - -
Interim dividend for the
quarter ended
30 June 2015: 1.5p 2,775 - -
5,447 1,650 5,546
------------------------------ ----------- ----------- ----------
The Directors propose that the Company pays a third interim
dividend relating to the quarter ended 30 September 2015 of 1.5
pence per ordinary share. This dividend has not been included as a
liability in these financial statements. The third interim dividend
is expected to be paid on 31 December 2015 to shareholders on the
register at the close of business on 27 November 2015.
In the absence of unforeseen circumstances, the Board intends to
pay further quarterly dividends to achieve an annual dividend of
6.25 pence per share(12) for the financial year ending 31 March
2016.
12. This is a target only and not a profit forecast. There can
be no assurance that the target can or will be met and it should
not be taken as an indication of the Company's expected or actual
future results. Accordingly, shareholders or potential investors in
the Company should not place any reliance on this target in
deciding whether or not to invest in the Company or assume that the
Company will make any distributions at all and should decide for
themselves whether or not the target dividend yield is reasonable
or achievable.
10. Investment properties
GBP000 GBP000
------------------------- -------- --------
At 31 March 2015 207,287
Additions 24,522
Disposals (415)
Property revaluations 2,624
Acquisition costs (1,168)
Net revaluation gain 1,456
------------------------- -------- --------
As at 30 September 2015 232,850
------------------------- -------- --------
Included in investment properties is GBP1.24 million relating to
ongoing development funding.
The carrying value at 30 September 2015 comprises freehold and
leasehold properties summarised as follows:
Freehold Leasehold Total
Investment properties GBP000 GBP000 GBP000
------------------------ -------- --------- -------
Historical cost 189,273 40,532 229,805
Valuation gain 2,237 808 3,045
At 30 September 2015 191,510 41,340 232,850
------------------------ -------- --------- -------
The investment properties are stated at the Directors' estimate
of their 30 September 2015 fair values. Lambert Smith Hampton Group
Limited ("LSH"), a professionally qualified independent valuer,
valued the properties as at 30 September 2015 in accordance with
the Appraisal and Valuation Standards published by the Royal
Institution of Chartered Surveyors. LSH has recent experience in
the relevant location and category of the properties being
valued.
Investment properties have been valued using the investment
method which involves applying a yield to rental income streams.
Inputs include yield, current rent and estimated rental value
("ERV"). For the period end valuation, the equivalent yields used
ranged from 5.0% to 10.1%. Valuation reports are based on both
information provided by the Company e.g. current rents and lease
terms which are derived from the Company's financial and property
management systems are subject to the Company's overall control
environment, and assumptions applied by the valuer e.g. ERVs and
yields. These assumptions are based on market observation and the
valuer's professional judgement. In estimating the fair value of
the property, the highest and best use of the properties is their
current use. Included within the condensed consolidated statement
of comprehensive income is GBP1.5 million of valuation gains and
profits on disposal of investment property which represent
unrealised movements on investment property.
11. Trade and other receivables
Unaudited Audited
as at Unaudited as
30 as at at
September September 31 March
2015 2014 2015
GBP000 GBP000 GBP000
Trade receivables 1,052 962 451
Other receivables 57 450 92
Prepayments and accrued income 822 486 529
1,931 1,898 1,072
-------------------------------- ----------- ----------- ----------
The Company has provided fully for those receivable balances
that it does not expect to recover. This assessment has been
undertaken by reviewing the status of all significant balances that
are past due and involves assessing both the reason for non-payment
and the creditworthiness of the counterparty. Included within
accrued income are balances totalling GBP0.59 million which are to
be held for a period over one year.
12. Trade and other payables
Unaudited Unaudited Audited
as at as at as
30 30 at
September September 31 March
2015 2014 2015
GBP000 GBP000 GBP000
Falling due in less than one
year:
Trade and other payables 564 725 338
Social security and other taxes 885 721 687
Accruals 2,038 1,136 1,037
Rental deposit held 254 230 230
3,741 2,812 2,292
--------------------------------- ----------- ----------- ----------
The Directors consider that the carrying amount of trade and
other payables approximates to their fair value. Trade payables and
accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. For most suppliers interest is charged
if payment is not made within the required terms. Thereafter,
interest is chargeable on the outstanding balances at various
rates. The Company has financial risk management policies in place
to ensure that all payables are paid within the credit
timescale.
13. Cash and cash equivalents
Unaudited Unaudited Audited
as at as at as
30 30 at to
September September 31 March
2015 2014 2015
GBP000 GBP000 GBP000
Cash and cash equivalents 8,347 1,343 849
--------------------------- ----------- ----------- ----------
Cash and cash equivalents include GBP0.25 million (30 September
2014 and 31 March 2015: GBP0.23 million) of restricted cash in the
form of rental deposits held on behalf of tenants.
14. Borrowings
Unaudited Unaudited Audited
as at as at as
30 30 at
September September 31 March
2015 2014 2015
GBP000 GBP000 GBP000
Falling due in more than one
year:
Bank borrowings 40,000 12,600 24,300
Costs incurred in the arrangement
of bank borrowings (720) - (489)
39,280 12,600 23,811
----------------------------------- ----------- ----------- ----------
During the Period, the Company and Scottish Widows plc, with
Lloyds Bank plc acting as agent, entered into an agreement for
Scottish Widows plc to provide the Company with a new term loan
facility of GBP20 million, repayable on 14 August 2025. Under the
terms of the agreement, the Company will pay fixed interest of
3.935% per annum on the balance.
(MORE TO FOLLOW) Dow Jones Newswires
November 24, 2015 02:01 ET (07:01 GMT)
The Company's borrowing position at 31 March 2015 is set out in
the Annual Report.
15. Issued capital and reserves
Ordinary shares Unaudited
Share capital of 1p GBP000
------------------------ ---------------- ------------
At 25 March 2014 131,989,310 1,320
Issue of share capital 45,616,349 456
------------------------ ---------------- ------------
At 31 March 2015 177,605,659 1,776
------------------------ ---------------- ------------
Issue of share capital 13,200,000 132
At 30 September 2015 190,805,659 1,908
------------------------ ---------------- ------------
The Company raised GBP25.0 million (before costs and expenses)
through a placing of 23,866,349 on 8 October 2014 and GBP22.62
million (before costs and expenses) through a placing of 21,750,000
new ordinary shares in the Company on 12 February 2015.
During the Period, the Company raised GBP14.3 million (before
costs and expenses) through further placings of 13,200,000 new
ordinary shares. The Company has made further issues of new shares
since the Period end, which are detailed in Note 18 to the
financial statements.
Rights, preferences and restrictions on shares
All ordinary shares carry equal rights and no privileges are
attached to any shares in the Company. All the shares are freely
transferable, except as otherwise provided by law. The holders of
ordinary shares are entitled to receive dividends as declared from
time to time and are entitled to one vote per share at meetings of
the Company. All shares rank equally with regard to the Company's
residual assets.
On 25 February 2014, Ian Mattioli, the Company and the Company's
broker, Numis Securities Limited ("Numis"), entered into a lock-in
agreement. Under the terms of the agreement, Ian Mattioli has
undertaken not to dispose of any ordinary shares or any interest in
ordinary shares for a period of twelve months commencing on
Admission and for a further period of twelve months' thereafter not
to dispose any ordinary shares or any interest in ordinary shares
without the prior written consent of Numis.
At the AGM of the Company held on 22 July 2015, the Board was
given authority to issue up to 120,670,439 shares, pursuant to
section 551 of the Companies Act 2006. This authority is intended
to satisfy market demand for the ordinary shares and raise further
monies for investment in accordance with the Company's investment
policy.
In addition, the Company was granted authority to make market
purchases of up to 18,100,565 Ordinary Shares under section 701 of
the Companies Act 2006.
On 14 August 2015, registration was completed of the Chancery
Division of the High Court of Justice's approval of the
cancellation of the Company's share premium account, standing at
GBP181,485,649 as of 22 July 2015. Further details, including the
rationale for the cancellation, are set out in the Notice of Annual
General Meeting available at the Company's website.
The following table describes the nature and purpose of each
reserve within equity:
Reserve Description and purpose
------------------ ------------------------------
Share premium Amounts subscribed for
share capital in excess
of nominal value less any
associated issue costs
that have been capitalised.
Retained earnings All other net gains and
losses and transactions
with owners (e.g. dividends)
not recognised elsewhere.
16. Financial instruments
Fair values
The fair values of financial assets and liabilities are not
materially different from their carrying values in the financial
statements. The fair value hierarchy levels are as follows:
-- Level 1 - quoted prices (unadjusted) in active markets for identical assets and liabilities;
-- Level 2 - inputs other than quoted prices included within
level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices);
and
-- Level 3 - inputs for the assets or liability that are not
based on observable market data (unobservable inputs).
There have been no transfers between Levels 1, 2 and 3 during
the Period. The main methods and assumptions used in estimating the
fair values of financial instruments and investment property are
detailed below.
Investment property - level 3
Fair value is based on valuations provided by an independent
firm of chartered surveyors and registered appraisers. These values
were determined after having taken into consideration recent market
transactions for similar properties in similar locations to the
investment properties held by the Company. The fair value hierarchy
of investment property is level 3. At 30 September 2015, the
Company fair value of investment properties was GBP232.9
million.
Interest bearing loans and borrowings - level 3
As at 30 September 2015 the amortised cost of the Company's
loans with Lloyds Bank plc and Scottish Widows plc approximated
their fair value. The loan from Scottish Widows plc includes a
market-based break cost for early repayment ("Prepayment Option"),
which is classified as a non-separable component of the loan. If
the Prepayment Option was classified as a separate financial
instrument, it would decrease the Company's NAV per share at 30
September 2015 to 102.6p (as previously reported in the quarterly
NAV statement released on 20 October 2015 and the prospectus
relating to the Issue dated 4 November 2015).
Trade and other receivables/payables - level 3
The carrying amount of all receivables and payables deemed to be
due within one year are considered to reflect the fair value.
17. Related party transactions
Transactions with directors
Each of the directors is engaged under a letter of appointment
with the Company and does not have a service contract with the
Company. Under the terms of their appointment, each director is
required to retire by rotation and seek re-election at least every
three years. Each director's appointment under their respective
letter of appointment is terminable immediately by either party
(the Company or the director) giving written notice and no
compensation or benefits are payable upon termination of office as
a director of the Company becoming effective.
Fees payable to the Manager
On 25 February 2014 the Company entered into a three year
Investment Management Agreement ("IMA") with the Investment
Manager, under which the Investment Manager has been appointed as
Alternative Investment Fund Manager with responsibility for the
property management of the Company's assets, subject to the overall
supervision of the Directors. The Investment Manager manages the
Company's investments in accordance with the policies laid down by
the Board and the investment restrictions referred to in the IMA,
and charges fees for annual management and administration as set
out in the Annual Report.
Ian Mattioli is Chief Executive of Mattioli Woods plc, the
parent company of the Investment Manager, and is a director of the
Investment Manager. As a result, Ian Mattioli is not independent.
The Company Secretary, Nathan Imlach, is also a director of
Mattioli Woods plc and the Investment Manager.
During the Period the Company paid the Investment Manager
GBP1.59 million (September 2014: GBP0.70 million, March 2015:
GBP1.79 million) in respect of annual management charges,
administrative fees and marketing fees.
The Company owed GBP8,063 to the Investment Manager at 30
September 2015 (September 2014: GBP546,871, March 2015:
GBPnil).
Certain investment properties are partially let to Mattioli
Woods plc. Mattioli Woods plc paid the Company rentals of GBP0.21
million during the Period (September 2014: GBP0.18 million, March
2015: GBP0.35 million) and owed the Company GBP54,736 at 30
September 2015 (September 2014: GBP514, March 2015: GBPnil).
Ian Mattioli, Nathan Imlach, Richard Shepherd-Cross and the
private pension schemes of Ian Mattioli, Nathan Imlach and Richard
Shepherd-Cross continue to have a beneficial interest in the
Company.
18. Events after the reporting date
New equity
Since the reporting date the Company has issued 2,500,000 new
ordinary shares of 1 pence each, raising GBP2.68 million (before
costs and expenses).
Acquisitions
On 7 October 2015 the Company acquired Lancaster House, a
prominent 39,600 sq ft office building on the corner of Newhall
Street and Great Charles Street, in Birmingham city centre for
GBP6,650,000. The property is let to 15 tenants with lease expiries
between 30 June 2016 and 31 July 2025, with a total passing rent of
GBP505,752 per annum, reflecting a net initial yield of 7.19%.
On 23 October 2015 the Company acquired the ground floor and
part of the first floor of a leisure development in Abbey Sands,
Torquay for GBP4.33 million let to Le Bistro Pierre Limited, Las
Iguanas Limited, Loungers Limited and Jurassic Coast Coffee Limited
(trading as Costa Coffee) at an aggregate passing rent of
GBP285,000 per annum.
The Company also acquired 1.3 acres of development land at the
Gunnels Wood Industrial Estate, Stevenage for a purchase price of
GBP1.0 million pre-let to Morrison Utility Services Limited at a
passing rent of GBP226,551, reflecting a net initial yield of
7.21%. The construction of a 23,161 sq ft warehouse unit will be
phased over a seven month build period with funding drawn-down via
monthly certified payments, which will attract an annualised coupon
of 6.25% until completion.
On 18 November 2015 the Company exchanged contracts to acquire a
property portfolio for GBP69.4 million due to complete in January
2016.
Placing
(MORE TO FOLLOW) Dow Jones Newswires
November 24, 2015 02:01 ET (07:01 GMT)
Custodian Property Incom... (LSE:CREI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Custodian Property Incom... (LSE:CREI)
Historical Stock Chart
From Jul 2023 to Jul 2024
