TIDMHLCL
RNS Number : 5155W
Helical PLC
15 November 2017
HELICAL PLC
("Helical" or the "Group" or the "Company")
Half Year Results for the Six Months to 30 September 2017
HELICAL SEES LETTING SUCCESS AND INCREASED FOCUS ON CORE
SECTORS
Gerald Kaye, Chief Executive, commented:
"The financial year to date has seen Helical make encouraging
progress in executing its strategy and meeting targets. Following
the sale announced yesterday of our retirement village portfolio
for GBP102m, a 13% discount to book value, we have now sold the
majority of our non-core holdings, with those remaining accounting
for just 4% of the total portfolio. One Creechurch Place, London
EC3 is 48% let with a further 22% under offer and good interest in
the remaining space. In addition, we have achieved record rents at
a number of our London investment assets. With the second phase of
The Bower, London EC1 and One Bartholomew Close, London EC1 due for
completion in Q3 2018, we are confident of their letting prospects.
Looking forward, we will continue to seek new refurbishment and
development opportunities in undersupplied markets.
"We have sold over GBP315m of investment assets since 1 April
2016, including the sale this week of our London office investment
at C-Space, London EC1, at prices in aggregate of 2.5% above book
value. Net proceeds have funded our capital expenditure programme
and, importantly, have reduced net borrowings by GBP236m
substantially reducing our loan to value from 55%, at 31 March
2016, to today's pro-forma ratio of 43%.
"With our portfolio of high quality London and Manchester
offices and higher yielding logistics properties, we now look
forward to increasing our income stream from the current contracted
rents of GBP45m towards the portfolio's ERV of GBP65m as completed
office space is made available to potential tenants in the next 12
months."
Financial Highlights - strong base from which to deliver future
returns
Results
-- EPRA net asset value per share down 1.7% to 465p (31 March
2017: 473p), reflecting the impact on NAV from the sale of the
retirement village portfolio.
-- EPRA loss per share of 5.9p (2016: earnings 4.4p).
-- IFRS basic earnings per share of 0.3p (2016: 27.8p)
-- IFRS Profit before tax of GBP1.2m (2016: GBP31.1m).
-- Total Property Return of GBP15.4m (2016: GBP47.8m).
- Group's share of net rental income of GBP17.9m reflecting the
sale of non-core properties (2016: GBP24.6m).
- Development losses of GBP8.2m (2016: GBP2.6m), after
provisions of GBP11.5m (2016: GBP6.6m).
- Net gain on sale and revaluation of investment properties of GBP5.7m (2016: GBP25.8m).
-- Interim dividend declared of 2.50p per share (2016: 2.40p) - up 4.2%.
Property Valuations
-- Group's share of property portfolio GBP1,211m (31 March 2017: GBP1,205m).
-- Investment property valuations, on a like-for-like basis, up
0.8% (0.7% including sales and purchases).
Financing
-- See-through loan to value of 51% (31 March 2017: 51%). Post
30 September 2017 sales reduce pro-forma loan to value to 43%.
-- Average maturity of the Group's share of debt of 3.0 years
(31 March 2017: 3.6 years) at an average cost of 4.3% (31 March
2017: 4.3%).
-- Group's share of cash and undrawn bank facilities at 30
September 2017 of GBP266m (31 March 2017: GBP267m).
Operational Highlights - portfolio positioned to capture ERV
London Portfolio
-- 1.5% valuation increase of London investment portfolio valued
at GBP712m (71% of investment portfolio) at 30 September 2017 - 31
March 2017: GBP666m (65%).
-- C-Space EC1, a 61,973 sq ft office building on City Road, was
sold post half-year end for GBP74.0m, a small premium to its 30
September 2017 and 31 March 2017 book values.
-- Contracted rents on our London portfolio, following the
C-Space sale and including pre-lets at The Bower, of GBP25.3m
compare to an ERV of GBP43.3m (like-for-like increase of 4.6%) - 31
March 2017: GBP27.9m contracted rents with ERV of GBP44.9m.
-- At One Creechurch Place EC3, we have signed leases with two
tenants for space totalling 131,879 sq ft, representing 48% of the
building and have agreed terms with another two tenants for 60,017
sq ft which, if concluded, will result in the building being 70%
let.
-- At 25 Charterhouse Square EC1, 70% of the building now let at
average rents of GBP75.50 psf on the offices and GBP59.35 psf on
the ground floor retail.
-- At The Loom EC1, we have let an additional 12,850 sq ft of
newly refurbished space at between GBP52.50 psf and a record
GBP55.00 psf.
-- At The Bower EC1, we are on target to complete the
refurbishment of The Tower by July 2018. Marketing of the remaining
space, with 34% already pre-let to WeWork, has commenced and
initial interest is encouraging.
-- At Barts Square EC1, 128 of the 144 residential units (89%)
in Phase One have exchanged (31 March 2017: 116 units) with a
further three units reserved.
-- 13 sales at Barts Square have completed by 14 November 2017
with the remaining 115 sales due to complete by March 2018 and
expected to deliver net proceeds of GBP56m.
Manchester Portfolio
-- Comprises four office buildings generating GBP5.4m of
contracted rents against an ERV of GBP7.2m and valued at
GBP87.6m.
-- Trinity Court, a 47,443 sq ft office building, acquired in May 2017 for GBP12.9m. An extensive refurbishment of the building is proposed.
Logistics Portfolio
-- Comprises 23 predominantly single let assets located around
the main UK transport networks generating GBP11.3m of contracted
rents against an ERV of GBP11.9m and valued at GBP150.8m.
-- One asset sold in the period to an owner-occupier at its book value of GBP9.3m.
-- A new ten year lease completed to the existing tenant at our
65,000 sq ft unit at Telford at passing rent, with good interest in
our only remaining vacant property in Doncaster.
Non-Core
-- The strategic sale of the retirement village portfolio for
GBP102m, post the half year, reflects a 13% discount to book value
with this sales value reflected in the carrying values at 30
September 2017.
-- The sale reduces Group borrowings by GBP46m and boosts cash
reserves by GBP51m of which the payment of GBP26m is deferred for
12 months.
-- During the half year to 30 September 2017, we sold three
retail assets for GBP73.3m at a profit of GBP1.5m.
-- Since 1 April 2016, we have sold GBP132m of non-core
investment assets at 1.3% premium to book value.
-- Following the post period end sales, the non-core portfolio
includes three regional offices and one retail asset, valued in
total at GBP34.7m, and land valued at GBP5.9m. Non-core assets now
comprise just 4.0% of the total current portfolio (31 March 2017:
17.6%).
For further information, please contact:
Helical plc 020 7629 0113
Gerald Kaye (Chief Executive)
Tim Murphy (Finance Director)
Address: 5 Hanover Square, London W1S
1HQ
Website: www.helical.co.uk
Twitter: @helicalplc
FTI Consulting 020 3727 1000
Dido Laurimore/Tom Gough/Richard Gotla
schelical@fticonsulting.com
Half Year Results Presentation
Helical will be holding a presentation for analysts and
investors at 11am, Wednesday 15 November 2017 at FTI Consulting,
200 Aldersgate, Aldersgate Street, London, EC1A 4HD. If you would
like to attend, please contact Jenni Nkomo on 020 3727 1000, or
jenni.nkomo@fticonsulting.com.
The presentation will be on the Company's website
www.helical.co.uk and a conference call facility will be available.
The dial-in details are as follows:
Participants, Local - London, United Kingdom: +44 (0)330 336 9411
Confirmation Code: 8623415
Webcast Link:
http://webcasting.brrmedia.co.uk/broadcast/59d4e041d349960788385c49
The presentation will also be on the Company's website
www.helical.co.uk
Financial Highlights
Half Year to Year to
30 September Half Year to 31 March
Notes 2017 30 September 2016 2017
See-through Income Statement 1 GBPm GBPm GBPm
--------------------------------------------- ------- ------------- ------------------ ---------
Net rental income 17.9 24.6 47.0
Development property losses (8.2) (2.6) (5.7)
Gain on revaluation of investment properties 4.5 28.6 37.3
Gain/(loss) on sale of investment properties 1.2 (2.8) 1.3
---------------------------------------------- ------ ------------- ------------------ ---------
Total property return 15.4 47.8 79.9
------------------------------------------------------ ------------- ------------------ ---------
IFRS Profit before tax 1.2 31.1 41.6
EPRA (loss)/earnings (6.9) 5.0 0.5
Earnings Per Share and Dividends Pence Pence Pence
---------------------------------------- ----- ------- -------
Basic earnings per share 2 0.3 27.8 34.0
Diluted earnings per share 2 0.3 26.6 33.2
EPRA (loss)/earnings per share 2(5.9) 4.4 0.5
Dividends per share paid in period 6.20 0.72 3.12
Dividends per share declared for period 2.50 2.40 8.60
---------------------------------------- ----- ------- -------
Proforma At(4) At At
30 September 30 September At 31 March
2017 2017 30 September 2016 2017
See-through Balance Sheet 3 GBPm GBPm GBPm GBPm
------------------------------------ -------------- ------------- ------------------ ---------
See-through property portfolio 1,036.8 1,210.8 1,249.5 1,205.2
See-through net borrowings 445.4 619.4 664.3 620.0
Net assets 510.2 510.2 508.9 516.9
------------------------------------ -------------- ------------- ------------------ ---------
Net assets per share and borrowings
------------------------------------ -------------- ------------- ------------------ ---------
EPRA Net Asset Value per share 465p 465p 471p 473p
See-through loan to value 5 43% 51% 53% 51%
See-through net gearing 6 87% 121% 131% 120%
Weighted average cost of debt 4.3% 4.3% 4.3% 4.3%
Weighted average debt maturity 3.0 years 3.0 years 4.0 years 3.6 years
------------------------------------ -------------- ------------- ------------------ ---------
Notes
1. Includes Group's share of income and gains of its
subsidiaries and joint ventures. See Note 25.
2. Calculated in accordance with IAS 33 and guidance issued by
the European Public Real Estate Association ("EPRA"). EPRA earnings
per share exclude the net gain on sale and revaluation of the
investment portfolio of GBP5.7m (2016: GBP25.8m) but include
development losses of GBP8.2m (2016: GBP2.6m).
3. Includes the Group's share of assets and liabilities of its
subsidiaries and joint ventures. See Note 25.
4. Reflects the Group's share of assets and liabilities at 30
September 2017, adjusted for GBP176m of sales since the half year
end.
5. See-through loan to value is the ratio of see-through net
borrowings to see-through property portfolio. See Note 26.
6. See-through net gearing is the ratio of see-through net
borrowings to net assets. See Note 26.
Chief Executive's Statement
Overview
The financial year to date has seen Helical make encouraging
progress in executing its strategy and meeting targets. Following
the sale announced yesterday of our retirement village portfolio
for GBP102m, a 13% discount to book value, we have now sold the
majority of our non-core holdings, with those remaining accounting
for just 4% of the total portfolio. One Creechurch Place, London
EC3 is 48% let with a further 22% under offer and good interest in
the remaining space. In addition, we have achieved record rents at
a number of our London investment assets. With the second phase of
The Bower, London EC1 and One Bartholomew Close, London EC1 due for
completion in Q3 2018, we are confident of their letting prospects.
Looking forward, we will continue to seek new refurbishment and
development opportunities in undersupplied markets.
Results for the Half Year
The profit before tax for the half year to 30 September 2017 was
GBP1.2m (2016: GBP31.1m) with a Total Property Return of GBP15.4m
(2016: GBP47.8m). The reduction in net rents to GBP17.9m (2016:
GBP24.6m) reflects the sale of GBP186m of investment assets over
the preceding 12 months. Developments contributed profits of
GBP3.3m (2016: GBP4.0m) before provisions of GBP11.5m (2016:
GBP6.6m). The gain on sale and revaluation of the investment
portfolio contributed GBP5.7m (2016: GBP25.8m).
Total finance costs were GBP14.1m (2016: GBP14.1m), offset by
interest receivable of GBP1.2m (2016: GBP2.3m) to give net finance
costs of GBP12.9m (2016: GBP11.7m). An increase in expected future
interest rates led to a credit from the valuation of the Group's
derivative financial instruments of GBP2.9m (2016: charge of
GBP5.9m). The valuation of the Group's Convertible Bond gave rise
to a charge to the Income Statement of GBP0.1m (2016: credit of
GBP7.7m). Recurring administration costs were GBP5.6m (2016:
GBP5.8m) and the provision for performance related remuneration,
including associated NIC, was GBP0.5m (2016: GBP0.1m).
These results allow the Board to declare an Interim Dividend of
2.50p (2016: 2.40p), an increase of 4.2%.
Finance
The Company uses gearing on a tactical basis throughout the
property cycle, being raised to accentuate property performance
when property returns are judged to materially outperform the cost
of debt and lowered when seeking to reduce exposure to the property
cycle.
We have sold over GBP315m of investment assets since 1 April
2016, including the sale this week of our London office investment
at C-Space, London EC1, at prices in aggregate of 2.5% above book
value. Net proceeds have funded our capital expenditure programme
and, importantly, have reduced net borrowings by GBP236m
substantially reducing our loan to value from 55% at 31 March 2016
to today's pro-forma ratio of 43%.
Outlook
With our portfolio of high quality London and Manchester offices
and higher yielding logistics properties, we now look forward to
increasing our income stream from the current contracted rents of
GBP45m to the portfolio's ERV of GBP65m as completed office space
is made available to potential tenants in the next 12 months.
Gerald Kaye
Chief Executive
15 November 2017
Our Market
Overview
Helical's core business is the development of, and investment
in, dynamic, well located office space in London and Manchester
accompanied by a portfolio of logistics units along the motorway
network of England and Wales. With intelligent stock selection, we
aim to maximise returns by development and refurbishment as well as
through significant asset management initiatives.
London
In London, Helical is building up a portfolio of multi-tenanted
offices in the Tech Belt locations of Farringdon, the Old Street
roundabout and Whitechapel areas, as well as in West London from
Chiswick to Shepherds Bush. By owning these "clusters" or
"villages" of office buildings we have a portfolio of assets with
multiple lease events leading to ongoing asset management
opportunities.
The Company also seeks to grow by taking on additional schemes
in Central London often in joint venture or by forward
selling/funding them, to allow for the generation of significant
profit shares, reducing balance sheet exposure where
appropriate.
Manchester
In Manchester we have four assets with a potential capital
value, after all refurbishment works and lettings are concluded,
approaching GBP100m. In this city, the occupational and investment
market continues to strengthen. It has high quality office stock
and a diverse occupier base which has seen much international and
institutional investment in recent years. Companies have access to
a deep and highly skilled talent pool in a cost effective location
both for the employer and employee. It is regarded as the leading
UK creative location outside London and our buildings are designed
to attract creative occupiers. Annual office take-up is
consistently in excess of one million sq ft with high profile new
occupiers coming to the city on a regular basis.
Logistics
We have a portfolio of logistics units comprising 15% of our
investment portfolio, but which contribute 23% of our current
contracted rents. This sector is characterised by strong
occupational demand and limited available supply. These properties
tend to have little obsolescence and good prospects for rental
growth.
Looking Forward
Our key focus remains on London, Manchester offices and
logistics. We have made significant progress in reducing non-core
holdings which, post the retirement village sales, constitute just
4% of the total portfolio. We will continue to sell the remaining
assets as the opportunities to do so arise.
Our ambition is to have a balanced portfolio which generates
sufficient net rental income to exceed all of our recurring costs
and provide a surplus significantly greater than our annual
dividend to Shareholders. We have an ERV on the portfolio, post
recent sales, of GBP65m and expect to generate this surplus once
all of our current asset management initiatives are completed. We
also seek a pipeline of opportunities to grow the balance sheet of
Helical through the creation of development profits and capital
surpluses.
Financial Review
IFRS Performance EPRA Performance
Profit Before Tax EPRA EPS
GBP1.2m (2016: GBP31.1m) Loss of 5.9p (2016: earnings
of 4.4p)
IFRS EPS EPRA NAV
0.3p (2016: 27.8p) 465p (31 March 2017: 473p)
IFRS Diluted NAV EPRA Triple NAV436p (31 March
426p (31 March 2017: 431p) 2017: 442p)
---------------------------- ------------------------------
Total Accounting Return
The total accounting return is the growth in the net asset value
of the company plus dividends paid in the period, expressed as a
percentage of the net asset value at the beginning of the period.
The metric measures the growth in shareholders' funds each period
and is expressed as an absolute measure.
1H
2018 2017 2016 2015 2014 2013
% % % % % %
------------------------ ------ ----- ----- ----- ----- -----
Total Accounting Return 0.1 8.3 22.5 21.1 36.8 2.4
------------------------ ------ ----- ----- ----- ----- -----
Total Property Return
We calculate our Total Property Return to enable us to assess
the aggregate of income and capital profits made each period from
our property activities. Our business is primarily aimed at
producing surpluses in the value of our assets through asset
management and development, with the income side of the business
seeking to cover our annual administration and finance costs.
1H
2018 2017 2016 2015 2014 2013
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- ------ ------ ------ ------ ------ ------
Total Property Return 15.4 79.9 164.6 155.3 140.1 35.9
---------------------- ------ ------ ------ ------ ------ ------
Earnings per Share
The IFRS earnings per share is based on the after tax earnings
attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the period. For the six
months to 30 September 2017 IFRS earnings per share was 0.3p (2016:
27.8p). On the EPRA basis, which excludes gains on the sale and
revaluation of properties, the loss per share was 5.9p (2016:
earnings 4.4p).
Net Asset Value Per Share
IFRS diluted net asset value per share is a measure of
shareholders' funds divided by the number of shares in issue at the
period end, excluding those held by the Company's Employee Share
Ownership Plan Trust, adjusted to allow for the effect of all
dilutive share awards. At 30 September 2017 it was 426p (31 March
2017: 431p). On an EPRA basis, which adds back the fair value of
financial instruments and the Convertible Bond, the property
related deferred tax creditor and reflects the fair value of
trading and development properties, the net asset value per share
was 465p (31 March 2017: 473p).
Income Statement
Rental Income and Property Overheads
Gross rental income receivable by the Group reduced by 23% to
GBP20.2m (2016: GBP26.3m) reflecting the sale of GBP186m of
investment assets with contracted rents of GBP11.8m since 30
September 2016, offset by the partial capture of the portfolio's
reversionary potential. Property overheads increased from GBP1.7m
to GBP2.3m leaving the see-through net rents reduced by 27% to
GBP17.9m (2016: GBP24.6m).
Development Profits/Losses
Development profits in the half year include a GBP0.7m
development management fee at Barts Square and a contribution of
GBP1.9m from our retail development programme offset by a GBP1.2m
loss on the sale of land at Cawston. The retirement village
provision of GBP10.2m plus a loss on sales at the retirement
villages of GBP0.8m contributed to a net development loss of
GBP8.2m (2016: GBP2.6m).
Share of Results of Joint Ventures
In our joint ventures we recognised an investment valuation
uplift of GBP2.3m. Our retail development scheme at Shirley
contributed to a development profit of GBP1.4m with the joint
ventures contributing a total profit of GBP3.4m (2016: loss of
GBP1.0m).
Gain on Sale and Revaluation of Investment Properties
During the six months we sold three non-core retail assets for a
combined GBP73.3m and an industrial unit to an owner-occupier for
GBP9.3m. Net of costs these sales contributed a profit of GBP1.2m
(2016: loss of GBP2.8m). Subsequent to the half year end we have
sold our investment asset at C-Space, London EC1, for GBP74.0m,
marginally above its 30 September 2017 book value.
Administration Costs
Administration costs, before performance-related awards, reduced
from GBP5.8m to GBP5.6m. Including share awards and associated NIC
of GBP0.5m (2016: GBP0.1m), total administration costs increased to
GBP6.1m (2016: GBP5.9m).
Finance Costs, Finance Income and Derivative Financial
Instruments
Interest payable on secured bank loans, including our share of
loans on assets held in joint ventures but before capitalised
interest, was GBP13.1m (2016: GBP13.1m). Interest payable in
respect of the unsecured Retail and Convertible Bonds was GBP4.4m
(2016: GBP4.4m). Capitalised interest marginally reduced to GBP3.4m
(2016: GBP3.5m). Total finance costs, including in joint ventures,
were GBP14.1m (2016: GBP14.1m). Finance income earned was GBP1.2m
(2016: GBP2.3m). The movement in medium and long-term interest rate
projections during the period, offset by the shortening maturity
period of the Group's derivative financial instruments, contributed
to a credit of GBP2.9m (2016: charge of GBP5.9m) on their
mark-to-market valuation.
Taxation
Helical pays corporation tax on its net rental income, trading
and development profits and realised chargeable gains, after offset
of administration and finance costs and any available losses.
The deferred tax charge for the half year is principally derived
from the revaluation surpluses recognised in the period offset by
the recognition of the tax losses which the Group believes will be
utilised against profits in the foreseeable future.
Dividends
The Board has approved the payment of an interim dividend of
2.50p per share (2016: 2.40p), an increase of 4.2%. This interim
dividend will be paid on 22 December 2017 to Shareholders on the
share register on 24 November 2017.
Balance Sheet
Shareholders' Funds
Shareholders' funds at 1 April 2017 were GBP516.9m. The Group's
results for the six months added GBP0.4m, net of tax, representing
the total comprehensive income for the period. Movements in
reserves arising from the Group's share schemes increased funds by
GBP0.2m. The Company paid dividends to Shareholders amounting to
GBP7.3m leaving a net decrease in Shareholders' Funds from the
Group's activities during the half year of GBP6.7m to
GBP510.2m.
Investment Portfolio
Wholly In joint Lease Incentives Book
owned venture See-through GBP000 Value
GBP000 GBP000 GBP000 GBP000
---------------------------------------------- --------- -------- ----------- ---------------- ---------
Valuation at 31 March 2017 1,003,000 13,907 1,016,907 (15,440) 1,001,467
Acquisitions 13,785 - 13,785 - 13,785
Capital Expenditure 36,774 3,757 40,531 - 40,531
Disposals (79,353) - (79,353) 150 (79,203)
Revaluation Surplus - Helical 2,920 2,331 5,251 (775) 4,476
- Profit Share Partners 2,420 - 2,420 - 2,420
--------------------------------------------- --------- -------- ----------- ---------------- ---------
Valuation at 30 September 2017 979,546 19,995 999,541 (16,065) 983,476
---------------------------------------------- --------- -------- ----------- ---------------- ---------
Disclosed as:
Investment properties 963,481 19,995 983,476 - 983,476
In Trade and other receivables - - - 16,065 16,065
------------------------------- ------- ------ ------- ------ -------
963,481 19,995 983,476 16,065 999,541
------------------------------- ------- ------ ------- ------ -------
Debt and Financial Risk
Helical's outstanding debt at 30 September 2017 of GBP738m (31
March 2017: GBP737m) had a weighted average maturity of 3.0 years
(31 March 2017: 3.6 years) and a weighted average interest cost of
4.3% (31 March 2017: 4.3%).
Debt Profile at 30 September 2017 - Excluding the Effect of
Arrangement Fees
Weighted Weighted Average
Total Total Available Average Interest Rate
Facility Utilised Facility Net LTV Interest Rate Fully Utilised Average Maturity
GBP000's GBP000's GBP000's % % % Years
---------------- --------- --------- ---------------- ------- --------------- ---------------- ----------------
Investment
facilities 569,344 439,543 129,801 - 4.3 3.5 3.5
Development
facilities 60,000 47,910 12,090 - 3.5 3.1 2.9
---------------- --------- --------- ---------------- ------- --------------- ---------------- ----------------
Total wholly
owned 629,344 487,453 141,891 - 4.2 3.5 3.5
In joint
ventures 72,270 70,795 1,475 - 3.4 3.4 2.2
---------------- --------- --------- ---------------- ------- --------------- ---------------- ----------------
Total secured
debt 701,614 558,248 143,366 36 4.1 3.5 3.3
Retail bond 80,000 80,000 - - 6.0 6.0 2.7
Convertible bond 100,000 100,000 - - 4.0 4.0 1.7
Working capital 10,000 - 10,000 - - - -
Fair value of
convertible
bond - (99) - - - - -
---------------- --------- --------- ---------------- ------- --------------- ---------------- ----------------
Total unsecured
debt 190,000 179,901 10,000 - 4.9 4.9 2.2
---------------- --------- --------- ---------------- ------- --------------- ---------------- ----------------
Total debt 891,614 738,149 153,366 51 4.3 3.8 3.0
---------------- --------- --------- ---------------- ------- --------------- ---------------- ----------------
Secured Debt
The Group arranges its secured investment and development
facilities to suit its business needs as follows:
- Investment Facilities
We have GBP190m of revolving credit facilities which enable the
group to acquire, refurbish, reposition and hold significant parts
of our investment portfolio. We have used these facilities mainly
to finance our regional portfolio. Our London investment assets are
primarily held in GBP379m of secured loan facilities which, where
appropriate, allow us to finance projects, including the
redevelopment of The Tower at The Bower, London EC1. Of the total
of GBP569m of investment facilities we have GBP130m available to
fund these works and finance any new acquisitions. The average
maturity of the Group's investment facilities at 30 September 2017
was 3.5 years with a weighted average interest rate of 4.3%.
- Development Facilities
These facilities finance the construction of the retirement
villages at Durrants Village Horsham; Maudslay Park, Great Alne;
Phase IV at Bramshott Place, Liphook and Millbrook Village, Exeter.
The average maturity of the Group's development facilities at 30
September 2017 was 2.9 years with a weighted average interest rate
of 3.5%. These facilities were transferred to the purchaser of the
retirement village portfolio in November 2017.
- Joint Venture Facilities
We hold a number of investment and development properties in
joint venture with third parties and include in our reported
figures our share, in proportion to our economic interest, of the
debt associated with each asset. The average maturity of the
Group's share of bank facilities in joint ventures at 30 September
2017 was 2.2 years with a weighted average interest rate of
3.4%.
Unsecured Debt
The Group's unsecured debt, including the Convertible Bond at
its mark-to-market valuation, is GBP180m as follows:
- Retail Bond
In June 2013, the Group raised GBP80m from the issue of an
unsecured Retail Bond with a 6.00% coupon. This bond is repayable
in June 2020.
- Convertible Bond
In June 2014, the Group raised GBP100m from the issue of a
listed unsecured Convertible Bond with a 4.0% coupon, repayable in
June 2019, or, subject to certain conditions, convertible at the
option of the bond holders into ordinary shares, unless a cash
settlement option is exercised by the Company. The initial
conversion price has been set at GBP4.9694 per share, representing
a 35% premium above the price on the day of the issue and a premium
of 59% above the Company's EPRA net asset value per share at 31
March 2014. The value of the Bond at 30 September 2017, as
determined by the listed market price, was GBP99.9m.
- Short term working capital facilities
These facilities provide access to additional working capital
for the Group.
Cash and Cash Flow
At 30 September 2017, the Group had GBP266m (31 March 2017:
GBP267m) of cash and agreed, undrawn, committed bank facilities
including its share in joint ventures, as well as GBP22m (31 March
2017: GBP17m) of uncharged property on which it could borrow
funds.
Net Borrowings and Gearing
Total gross borrowings of the Group, including in joint
ventures, have increased marginally from GBP736.6m to GBP738.1m
during the six months to 30 September 2017. After deducting cash
balances of GBP112.4m and unamortised refinancing costs of GBP6.3m,
net borrowings were GBP619.4m (31 March 2017: GBP620.0m). The
gearing of the Group, including in joint ventures, was 121% (31
March 2017: 120%).
30 September 31 March
2017 2017
------------------------------ ------------ ---------
See-through gross borrowings GBP738.1m GBP736.6m
See-through cash balances GBP112.4m GBP109.0m
Unamortised refinancing costs GBP6.3m GBP7.6m
See-through net borrowings GBP619.4m GBP620.0m
Shareholders' funds GBP510.2m GBP516.9m
See-through net gearing 121% 120%
------------------------------ ------------ ---------
Hedging
At 30 September 2017, the Group had GBP621.3m (31 March 2017:
GBP651.4m) of fixed rate debt with an average effective rate of
4.2% (31 March 2017: 4.2%) and GBP46.0m (31 March 2017: GBP29.3m)
of floating rate debt with an average effective rate, excluding
commitment fees, of 3.0% (31 March 2017: 3.0%). In addition, the
Group had GBP3.3m of interest rate caps at 0.75% (31 March 2017:
GBP3.3m at 0.75%). In our joint ventures, the Group's share of
fixed rate debt was GBPnil (31 March 2017: GBPnil) and GBP70.8m (31
March 2017: GBP55.9m) of floating rate debt with an effective rate
of 3.4% (31 March 2017: 3.4%) with interest rate caps set at 1.5%
plus margin on GBP158.9m and 0.5% plus margin on GBP164.7m.
30 September 30 September 31 March 31 March
2017 2017 2017 2017
GBPm % GBPm %
--------------------------------- ------------ ------------ -------- --------
Fixed rate debt
- Secured borrowings 441.4 4.0 471.6 4.0
- Retail Bond 80.0 6.0 80.0 6.0
- Convertible Bond 100.0 4.0 100.0 4.0
- Fair value of Convertible Bond (0.1) - (0.2) -
--------------------------------- ------------ ------------ -------- --------
Total fixed rate debt 621.3 4.2 651.4 4.2
Floating rate debt
- Secured 46.0 6.8(1) 29.3 8.9(1)
--------------------------------- ------------ ------------ -------- --------
Total wholly owned 667.3 4.4 680.7 4.4
In joint ventures
- Floating rate 70.8 3.4 55.9 3.4
--------------------------------- ------------ ------------ -------- --------
Total borrowings 738.1 4.3 736.6 4.3
--------------------------------- ------------ ------------ -------- --------
Note 1: This includes commitment fees on undrawn facilities.
Excluding these would reduce the effective rate to 3.0% (31 March
2017: 3.0%).
Interest Cover
In assessing the results of the Group for each financial period,
Helical considers its interest cover as a measure of its
performance and ability to finance its annual interest payments
from its net operating income, before revaluation gain or losses on
the investment portfolio and net realisable provisions on the
trading and development stock. In the half year to 30 September
2017 the interest cover was 1.7 times (2016: 2.2 times).
30 September 30 September 31 March
2017 2016 2017
--------------------------------- ------------- ------------ --------
See-through net operating income GBP22.4m GBP25.8m GBP55.4m
See-through net financing costs GBP12.9m GBP11.7m GBP21.2m
Interest Cover 1.7x 2.2x 2.6x
--------------------------------- ------------- ------------ --------
Tim Murphy
Finance Director
15 November 2017
Helical's Property Portfolio - 30 September 2017
Property Overview
Helical divides its property activities into three core markets:
London, Manchester offices and logistics. Following the sale of
C-Space and the Retirement Village portfolio in November 2017, the
London Portfolio represents 73.1% of the total property portfolio
and drives capital growth, development profits and, increasingly,
income. Manchester offices accounts for 8.4%, and logistics account
for 14.5%.
In addition, we have a small portfolio of non-core assets
comprising three regional offices and one regional retail property
which together represent just 4.0% of the total property
portfolio.
The London Portfolio
Our strategy is to continue to increase our London holdings,
focusing on areas where we see strong tenant demand and growth
potential, such as the "Tech Belt" that runs from King's Cross
through Old Street and Shoreditch to Whitechapel and in West
London, in particular Shepherds Bush, Chiswick and Hammersmith. Our
London portfolio comprises income producing multi-let offices,
office refurbishments and developments and residential development
schemes.
-- City and Tech Belt
One Creechurch Place, City of London EC3
One Creechurch Place is a landmark City office scheme in the
heart of the insurance sector in London. In May 2014, Helical
signed a joint venture agreement with HOOPP (Healthcare of Ontario
Pension Plan) to redevelop the site. Under the terms of the joint
venture, HOOPP and Helical jointly funded the project on a 90:10
split, with Helical acting as development manager for which it will
receive a promote payment depending on the successful outcome of
the scheme. The new building, comprising 272,505 sq ft NIA of
offices and 786 sq ft of retail, achieved practical completion on 7
November 2016 and is currently being marketed for occupation. Since
30 September 2017, we have signed leases with Hyperion for 115,910
sq ft and Travelers for 15,969 sq ft, representing 48% of the
building and are under offer with another two tenants for 60,017 sq
ft, which, if concluded, will result in the building being 70%
let.
25 Charterhouse Square, Smithfield EC1
In January 2016, Helical was granted a new 155 year leasehold
interest in 25 Charterhouse Square, from the Governors of Sutton's
Hospital in Charterhouse for GBP16m. Helical has carried out a
major refurbishment of the existing building, which increased the
previous 34,000 sq ft to 38,355 sq ft of offices with the addition
of a new sixth floor, and added 5,138 sq ft of retail/restaurant
space. The building achieved practical completion on 28 March 2017.
The 5(th) and 6(th) floors have been let at GBP75 psf and in the
period the 4(th) floor was let to Peakon, also at GBP75 psf on a 10
year lease with a five year break. Since the end of the period the
ground and first floors have been let on five year leases at GBP77
psf for the first floor and an average GBP59 psf for the "shell"
ground floor units. The second floor is also under offer and due to
exchange shortly.
C-Space, 37-45 City Road EC1
Helical acquired C-Space in June 2013. Planning consent was
obtained for a complete refurbishment of the building which
increased the previous 50,000 sq ft office building to 61,973 sq
ft. The works, which were completed in October 2015, involved an
additional floor and extensions to the third floor, a landscaped
courtyard and entrance pavilion to the rear and full height glazing
to the raised ground floor. 75% of the space was pre-let to the
creative agency MullenLowe in June 2015, with the remaining space
let to NeuLion in November 2016.
Contracts were exchanged on 10 November 2017 for the sale of the
building at GBP74m, marginally above its 31 March 2017 value book,
with completion in December 2017.
The Loom, Whitechapel E1
This 110,069 sq ft listed former wool warehouse was acquired in
2013. A major repositioning was completed in September 2016 to
include a new entrance and reception onto Gowers Walk, café,
showers and a bike store. Since 1 April 2017, we have completed
five new lettings on 12,850 sq ft with newly refurbished space
being let at between GBP52.50 psf and a record GBP55.00 psf. Two
further units totalling 2,431 sq ft are under offer.
The Bower EC1
211 Old Street EC1
The development of Phase One, comprising The Warehouse, 128,262
sq ft, and The Studio, 23,177 sq ft, completed in November
2015.
Phase One is fully let to CBS, Farfetch, Pivotal, Allegis and
Stripe (The Warehouse) and John Brown Media (The Studio), and all
tenants are in occupation. The retail operators are Bone Daddies,
Draft House, Enoteca da Luca, Honest Burger, Maki and Franze &
Evans.
207 Old Street EC1
At The Tower, comprising 178,571 sq ft of offices with ground
floor retail, the refurbishment and construction works are well
underway with practical completion scheduled for July 2018. We have
pre-let six floors, comprising 58,904 sq ft (34%), to WeWork, the
leading global provider of flexible collaborative co-working space,
and recently launched the marketing of the remaining 119,667 sq ft
of this building. A number of parties have inspected the building
and we are encouraged by the interest being shown.
Barts Square EC1
In a joint venture with The Baupost Group LLC, Helical owns the
freehold interest of Barts Square, a 3.2 acre site between St Pauls
and Smithfield Market, situated a short walk from Farringdon East
station on the Elizabeth Line (Crossrail) which is due to be
operational at the end of 2018.
Barts Square will ultimately provide an entirely new quarter in
the City consisting of 236 residential apartments, three office
buildings of 213,125 sq ft, 24,031 sq ft and 10,200 sq ft and
21,839 sq ft of retail/A3 at ground floor as well as major public
realm improvements.
Phase One - Residential
Phase 1 of Barts Square comprises 144 residential units, 3,193
sq ft of retail and extensive public realm improvements. The
residential units are being handed over to purchasers as buildings
are completed with the Underwood Building (13 sales) completed by
October 2017 and six further buildings (115 sales) to be completed
and handed over in the period to March 2018. In total, contracts
have been exchanged for the sale of 128 residential units (12 in
the period) for a total value of GBP162.1m at an average of
GBP1,565 psf, with a further three units reserved, leaving just 13
apartments to sell.
90 Bartholomew Close - Offices
Construction of the 24,013 sq ft office building with 6,449 sq
ft of restaurant use on the ground floor is expected to be
completed in December 2017. Marketing of the offices will commence
after practical completion of the building. The ground floor
restaurant is under offer to a leading UK restauranteur who
operates a small collection of restaurants, delis and bars.
Phase Two - One Bartholomew Close - Offices
One Bartholomew Close was sold to clients of Ashby Capital LLP
("Ashby") for GBP102.4m in August 2015. The demolition of the
existing building and the construction of a new 12 storey office
block of 213,125 sq ft commenced in January 2016 and is due to be
completed in Q3 2018. Ashby's clients finance the development costs
and, when the building is completed and successfully let, the joint
venture will be entitled to receive a profit share payment. Helical
is the development manager for delivery of the project.
Phase Three - Residential/retail/offices
Demolition work on Phase 3 of Barts Square is completed with
pre-construction works now underway. This phase will comprise 92
apartments and 12,197 sq ft of retail space. Completion is due in
Q3 2019 and marketing of the units is expected to commence in Q2
2018. The refurbishment of 54/58 Bartholomew Close to provide
10,200 sq ft of offices is expected to start in 2018 for completion
in 2019.
Farringdon East, Smithfield EC1
We have an exclusivity agreement with Farringdon East Ltd
whereby we will acquire the company with the intention of
constructing a new consented 89,000 sq ft office building over the
Farringdon East Crossrail Station with the benefit of a new 150
year lease from TFL. It is anticipated that the construction works
will commence in Spring 2018 for completion by Q4 2019.
-- West London
The Shepherds Building, Shepherds Bush W14
This 151,000 sq ft multi-let office building close to the
Westfield London shopping centre maintains an occupancy approaching
100%, as it has for the past ten consecutive years. The average
contracted rent for the building is GBP45 psf with a total
contracted rent of GBP6.64m. During the period we have completed
new lettings totalling 8,987 sq ft and 1,573 sq ft since the period
end.
Power Road Studios, Chiswick W4
The site comprises 58,404 sq ft of offices across five buildings
and is multi-let to a wide range of predominantly media tenants. In
October we completed the refurbishment of Studio 1, a project
comprising 16,000 sq ft of air conditioned Grade A space,
refurbished common parts and two new lift shafts to accommodate a
consented future roof extension of 13,000 sq ft. Of the newly
refurbished space, we pre-let 2,425 sq ft at GBP43 psf and have
recently completed the letting of a further 5,916 sq ft at GBP43
psf. Preliminary works have been completed on a consented new
30,000 sq ft office building.
The Powerhouse, Chiswick W4
Helical acquired this 24,288 sq ft office and recording studios
by way of sale and leaseback in 2013. The Powerhouse is a listed
building on Chiswick High Road and is fully let on a long lease to
Metropolis Music Group.
King Street, Hammersmith W6
Hammersmith & Fulham Borough Council, who have been opposed
to this regeneration project since the Council became Labour
controlled, have exercised their option to terminate the
development agreement. With our partners Grainger plc we will now
seek to maximise the value of the land held by the joint venture
company and are in discussions with the Council with the aim of
reaching agreement on this sale.
Manchester Offices
Manchester is a city with a diverse, thriving and growing
economy which is widely regarded as England's second city and the
centre of the "Northern Powerhouse". The assets we hold there
are:
Churchgate and Lee House, Manchester
This asset, comprising 249,233 sq ft of multi let offices, was
purchased in March 2014. Since purchase we have refurbished the
reception and 75,254 sq ft of office space and the building is
fully let. During the period we agreed a new ten year lease with
Capita on 33,000 sq ft at GBP15.50 psf, an uplift of 7% on the
previous rent. Looking forward we will continue with asset
management initiatives to drive further rental and capital
growth.
31 Booth Street, Manchester
This 25,441 sq ft office located in the prime city core was
acquired in January 2016 for GBP4.7m. The building has been fully
refurbished and was launched to the market in March 2017. The
ground floor and basement has been let on an agreement to lease to
Elevatione, a luxury boutique cosmetic retailer, and good interest
is being shown in the remaining office space.
35 Dale Street, Manchester
35 Dale Street is a 51,634 sq ft office building situated in the
Northern Quarter of Manchester. We have completed the refurbishment
of the 3(rd) and 4(th) floor offices and agreed terms at GBP19 psf
on that space. The refurbishment of the 1(st) and 2(nd) floors will
commence in December 2017 with delivery expected in March 2018. All
the available space on the 1(st) floor is under offer. The ground
and lower ground floor space has been pre-let to Vibe Gym and Idle
Hands (coffee shop).
Trinity Court, Manchester
Trinity Court, purchased in May 2017 for GBP12.9m, is a 47,443
sq ft office building situated in the central business district of
Manchester. The building is currently 100% let with secured income
until January 2018 at a passing rent of GBP26.94 psf. The building
will be vacated in 2018 and a full refurbishment and extension will
be implemented delivering 55,672 sq ft of new and refurbished
office space to the market in early 2019.
Logistics
Helical owns 23 distribution and logistics units located around
major UK transport networks. These units generally have few bespoke
features making them straightforward to re-let if vacancies occur
with low capital expenditure required. During the period, we sold
our 189,349 sq ft warehouse at Hinckley, Leicestershire to an
owner-occupier for its book value of GBP9.3m. We have completed a
new ten year lease at the existing passing rent at Telford and have
good interest from potential tenants in our remaining vacant asset
in Doncaster.
Non-Core
Offices
Our regional offices, outside Manchester, comprise three fully
let buildings located in Crawley, Reading and Glasgow which
generate contracted rental income of GBP2.3m and have a combined
value of GBP24.6m.
Retail Investments
During the period we sold our retail assets at Morgan Quarter,
Cardiff, Great Yarmouth and Southend for a combined GBP73.3m, a
premium to book value of 4.7%. At 30 September 2017, our single
remaining retail investment is a 42,490 sq ft retail warehouse in
Sevenoaks.
Retail Developments
During the period we completed our 79,750 sq ft retail park at
Cortonwood Retail Park which was 100% pre-let and forward funded
with clients of Aberdeen Asset Management. We also progressed our
retail schemes at Truro, Evesham, Kingswinford and East Ham.
Retirement Villages
Our retirement village portfolio at 30 September 2017 consisted
of four villages at Bramshott Place Liphook, Durrants Village
Faygate, Millbrook Village Exeter and Maudslay Park Great Alne.
In November 2017, we sold our entire retirement village
portfolio to L&G Capital for gross proceeds of GBP102m with
GBP26m deferred for 12 months.
Total Portfolio by Fair Value
Investment Development Total Proforma(1) Proforma(1)
GBPm % GBPm % GBPm % GBPm %
------------------------- ---------- ---- ----------- ---- ------- ----- ----------- -----------
London Offices
- Completed, let
and available to let 510.9 42.2 23.8 2.0 534.7 44.2 461.5 44.5
- Being redeveloped 200.7 16.6 - - 200.7 16.6 200.7 19.4
London Land and
Options - - 8.0 0.6 8.0 0.6 8.0 0.8
London Residential - - 87.1 7.2 87.1 7.2 87.1 8.4
------------------------- ---------- ---- ----------- ---- ------- ----- ----------- -----------
Total London 711.6 58.8 118.9 9.8 830.5 68.6 757.3 73.1
Manchester Offices 87.6 7.2 - - 87.6 7.2 87.6 8.4
Logistics 150.8 12.5 - - 150.8 12.5 150.8 14.5
-------------------------
Total Core Portfolio 950.0 78.5 118.9 9.8 1,068.9 88.3 995.7 96.0
Regional Offices 24.6 2.1 0.5 - 25.1 2.1 25.2 2.4
Retail 10.0 0.8 - - 10.0 0.8 10.0 1.0
Retirement Villages 14.8 1.2 86.1 7.1 100.9 8.3 - -
Land 0.1 - 5.8 0.5 5.9 0.5 5.9 0.6
------------------------- ---------- ---- ----------- ---- ------- ----- ----------- -----------
Total Non-Core Portfolio 49.5 4.1 92.4 7.6 141.9 11.7 41.1 4.0
Total 999.5 82.6 211.3 17.4 1,210.8 100.0 1,036.8 100.0
------------------------- ---------- ---- ----------- ---- ------- ----- ----------- -----------
(1) Proforma figures reflect the position at 30 September 2017,
adjusted for the sales of C-Space, EC1 and the Retirement Village
portfolio in November 2017.
Trading and Development Portfolio
Proforma(1) Proforma(1)
Book Value Fair Value Surplus Fair Value Fair Value Fair Value
GBPm GBPm GBPm % GBPm %
------------------------- ---------- ---------- ------- ---------- ----------- -----------
London Offices 15.8 23.8 8.0 11.3 23.8 19.0
London Residential 84.1 87.1 3.0 41.2 87.1 69.6
London Land and Options 8.0 8.0 - 3.8 8.0 6.4
------------------------- ---------- ---------- ------- ---------- ----------- -----------
Total London 107.9 118.9 11.0 56.3 118.9 95
Manchester Offices - - - - - -
Logistics - - - - - -
------------------------- ---------- ---------- ------- ---------- ----------- -----------
Total core portfolio 107.9 118.9 11.0 56.3 118.9 95
Regional Offices 0.2 0.5 0.3 0.3 0.5 0.5
Retail - - - - - -
Retirement Villages 86.1 86.1 - 40.7 - -
Land 5.2 5.8 0.6 2.7 5.8 4.5
------------------------- ---------- ---------- ------- ---------- ----------- -----------
Total Non-Core Portfolio 91.5 92.4 0.9 43.7 6.3 5.0
Total 199.4 211.3 11.9 100.0 125.2 100.0
------------------------- ---------- ---------- ------- ---------- ----------- -----------
(1) Proforma figures reflect the position at 30 September 2017,
adjusted for the sales of C-Space, EC1 and the Retirement Village
portfolio in November 2017.
Capital Expenditure
We have a planned development and refurbishment programme.
Capex Budget Remaining Spend Pre-refurbished Total Completed
(Helical Share) (Helical share) Space New Space Space Completion
Property GBPm GBPm Sq ft Sq ft Sq ft Date
--------------------- ---------------- ---------------- --------------- --------- --------------- --------------
Investment -
committed
207 Old Street,
London EC1 97.2 49.2 114,000 65,000 179,000 July 2018
35 Dale Street,
Manchester 4.7 1.1 56,000 - 56,000 May 2018
Trinity Court,
Manchester 5.8 5.8 47,000 8,000 55,000 March 2019
Investment - planned
Barts Square, London
EC1 10.8 1.5 27,000 - 27,000 December 2017
Power Road Studios,
London W4 20.1 20.1 59,000 43,000 102,000 September 2019
Development -
committed
Barts Square, London
EC1 - Phase 1 81.1 15.4 - 129,000 129,000 March 2018
Barts Square, London
EC1 - Phase 3 44.2 38.4 - 92,000 92,000 September 2019
--------------------- ---------------- ---------------- --------------- --------- --------------- --------------
Asset Management
Asset management is a critical component in driving Helical's
performance. Through having well considered business plans and by
maximising the combined skills of our management team, we are able
to create value in our assets without relying on market
movements.
Fair ERV Change Like
Value Passing ERV Change Since for
Weighting Rent Contracted(1) Rent ERV ERV Change Since March 2017 March 2017 Like
Investment portfolio % GBPm % GBPm % GBPm % GBPm % %
---------------------- ---------- ------- ----- ------------------ ----- ----- ----- --------------------------- ---------------- ---------------
London Offices
- Completed, let and
available to let 51.1 20.6 50.4 23.6 48.5 29.4 42.5 0.4 1.3 1.3
- Being redeveloped 20.1 1.3 3.2 5.3 10.9 17.5 25.4 1.7 10.8 10.8
Total London 71.2 21.9 53.6 28.9 59.4 46.9 67.9 2.1 4.6 4.6
Manchester Offices 8.8 5.0 12.2 5.4 11.1 7.2 10.4 1.6 28.7 (0.1)
Logistics 15.0 10.9 26.8 11.3 23.2 11.9 17.1 (0.7) (5.5) 0.9
Total Core Portfolio 95.0 37.8 92.6 45.6 93.7 66.1 95.4 3.0 4.8 3.4
Regional Offices 2.5 2.3 5.5 2.3 4.7 2.4 3.4 - - -
Retail 1.0 0.8 1.9 0.8 1.6 0.8 1.2 (5.4) (87.0) -
Retirement Villages 1.5 - - - - - - - - -
Total Non-Core
Portfolio 5.0 3.1 7.4 3.1 6.3 3.2 4.6 (5.4) (62.9) -
Total 100.0 40.9 100.0 48.7 100.0 69.2 100.0 (2.4) (3.4) 3.3
---------------------- ---------- ------- ----- ------------------ ----- ----- ----- --------------------------- ---------------- ---------------
(1) Contracted rent includes GBP3.8m pre-let to WeWork at The
Bower.
During the period, total contracted income reduced by GBP3.5m as
the result of the sale of GBP82.6m of investment properties and
losses from breaks and lease expiries, offset by the purchase of
one investment property and rent from new lettings and rent
reviews.
Total Portfolio Contracted Rent
GBPm
------------------------------------------------------------------ -------------------------------
Contracted rent reduced through sales of investment properties (5.8)
Contracted rent increased from purchases of investment properties 1.3
------------------------------------------------------------------ -------------------------------
Total contracted rental change from sales and purchases (4.5)
Rent lost at break/expiry (0.7)
Rent reviews and uplifts on lease renewals 0.1
New lettings 1.6
------------------------------------------------------------------ -------------------------------
Total increase in the period from asset management activities 1.0
------------------------------------------------------------------ -------------------------------
Net decrease in contracted rents in the period (3.5)
------------------------------------------------------------------ -------------------------------
Investment Portfolio - as at 30 September 2017
Portfolio Yields
EPRA Topped Up NIY Reversionary
% %
-------------------------------------- ------------------ ------------
London Offices
- Completed, let and available to let 4.3 5.3
- Being redeveloped - 5.8
Manchester Offices 5.8 6.9
Logistics 7.0 7.1
--------------------------------------
Total Core Portfolio 5.0 5.9
Regional Offices 8.7 8.7
Retail 7.4 7.6
-------------------------------------- ------------------ ------------
Total Non-Core Portfolio 8.3 8.3
Total 5.2 6.0
-------------------------------------- ------------------ ------------
Capital Values, Vacancy Rates and Unexpired Lease Terms
Capital value psf Vacancy rate* WAULT
GBP % Years
-------------------------------------- ----------------- ------------- ------
London Offices
- Completed, let and available to let 943 9.5 6.4
- Being redeveloped 653 - -
Total London 838 9.5 6.4
Manchester Offices 226 18.6 2.9
Logistics 56 5.6 4.8
Total Core Portfolio 242 7.4 6.1
Regional Offices 174 - 6.6
Retail 235 - 6.9
Total Non-Core Portfolio 188 - 6.6
Total 239 7.1 6.1
-------------------------------------- ----------------- ------------- ------
*The vacancy rates exclude assets in the course of
redevelopment.
Valuation Movements
Val Change
inc Capex, Val Change
Sales & inc Capex, Investment Portfolio Weighting Investment Portfolio Weighting
Purchases excl Sales & Purchases September 2017 March 2017
% % % %
---------------- ----------- ----------------------- ------------------------------ ------------------------------
London Offices
- Completed, let
and available
to let 1.6 1.6 51.1 49.3
- Being
redeveloped 1.0 1.0 20.1 12.4
- Held for
future
development n/a n/a - 3.8
---------------- ----------- ----------------------- ------------------------------ ------------------------------
Total London 1.5 1.5 71.2 65.5
Manchester
Offices (0.1) 0.2 8.8 7.0
Logistics 2.2 2.3 15.0 15.4
----------------
Total Core
Portfolio 1.4 1.5 95.0 87.9
Regional Offices (0.9) (0.9) 2.5 2.3
Retail - - 1.0 7.8
Retirement
Villages (25.6) (25.6) 1.5 2.0
Total Non-Core
Portfolio (4.3) (9.9) 5.0 12.1
Total 0.7 0.8 100.0 100.0
---------------- ----------- ----------------------- ------------------------------ ------------------------------
Lease Expiries or Tenant Break Options
Year to Year to Year to Year to Year to
2018 2019 2020 2021 2022
----------------------------- ------- ------- ------- ------- -------
% of rent roll 11 11 7 7 18
Number of leases 86 52 38 11 32
Average rent per lease (GBP) 59,072 97,340 84,900 270,787 248,644
----------------------------- ------- ------- ------- ------- -------
We have a strong rental income stream and a diverse tenant base,
with the largest tenant in the portfolio accounting for only 8.7%
of the rent roll. The top 10 tenants account for 36.7% of the total
rent roll and the tenants come from a variety of industries.
Rent Rent Roll
Rank Tenant Tenant Industry GBPm %
------ -------------------------------- ------------------------ ----- ---------
1 Endemol UK Limited Media 3.9 8.7
2 MullenLowe Limited Marketing Communications 2.6 5.8
3 Gopivotal (UK) Limited Technology 2.0 4.5
4 Farfetch UK Limited Online Retail 1.9 4.2
5 Sainsbury's Supermarkets Limited Food Retail 1.3 2.8
6 Neulion Limited Technology 1.0 2.3
7 CBS Interactive Limited Media 1.0 2.3
8 Allegis Group Limited Recruitment 1.0 2.2
9 Anomaly UK Limited Marketing 0.9 2.0
10 Stripe Payments UK Limited Technology 0.8 1.9
------ -------------------------------- ------------------------ ----- ---------
Total 16.4 36.7
---------------------------------------- ------------------------ ----- ---------
Independent review report to the members of Helical plc
Introduction
We have reviewed the condensed set of financial statements in
the half-yearly financial report of Helical Plc for the six months
ended 30 September 2017 which comprises the Unaudited Consolidated
Income Statement, the Unaudited Consolidated Balance Sheet, the
Unaudited Consolidated Cash Flow Statement, the Unaudited
Consolidated Statement of Changes in Equity and the related
unaudited notes. We have read the other information contained in
the half yearly financial report: Financial Highlights, Chief
Executive's Statement, Financial Review and Helical's Property
Portfolio and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the company, as a body, in
accordance with International Standard on Review Engagements (UK
and Ireland) 2410, 'Review of Interim Financial Information
performed by the Independent Auditor of the Entity'. Our review
work has been undertaken so that we might state to the company
those matters we are required to state to them in an independent
review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company as a body, for our review work, for
this report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. The condensed
set of financial statements included in this half-yearly financial
report has been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union.
Our responsibility
Our responsibility is to express a conclusion to the company on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity'. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2017 is not prepared, in all material respects, in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
15 November 2017
Unaudited Consolidated Income Statement
For the Half Year to 30 September 2017
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
Notes GBP000 GBP000 GBP000
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Revenue 3 33,207 52,367 99,934
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Net rental income 4 18,037 23,911 46,162
Development property (loss)/profit 5 (9,520) (83) 843
Share of results of joint ventures 13 3,382 (1,044) (6,528)
Other operating income/(expense) 41 (1) 982
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Gross profit before net gain on sale and revaluation of
investment properties 11,940 22,783 41,459
Net gain on sale and revaluation of investment properties 6 3,370 26,353 40,543
Change in fair value of available-for-sale investments 15 1,423 (1,179) (3,352)
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Gross profit 16,733 47,957 78,650
Administrative expenses 7 (6,081) (5,871) (18,372)
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Operating profit 10,652 42,086 60,278
Finance costs 8 (13,376) (13,949) (25,598)
Finance income 1,154 1,199 3,156
Change in fair value of derivative financial instruments 2,884 (5,949) 789
Change in fair value of Convertible Bond (127) 7,663 2,973
Foreign exchange gain 22 2 (3)
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Profit before tax 1,209 31,052 41,595
Tax on profit on ordinary activities 9 (809) 672 (2,471)
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Profit for the period 400 31,724 39,124
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Earnings per share 11
Basic 0.3p 27.8p 34.0p
Diluted 0.3p 26.6p 33.2p
------------------------------------------------------------ ----- ------------------ ------------------ ---------
Unaudited Consolidated Statement of Comprehensive Income
For the Half Year to 30 September 2017
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
------------------------------------------------------------------- ------------------ ------------------ ---------
Profit for the period 400 31,724 39,124
Exchange difference on retranslation of net investments in foreign
operations (18) 21 48
------------------------------------------------------------------- ------------------ ------------------ ---------
Total comprehensive income for the period 382 31,745 39,172
------------------------------------------------------------------- ------------------ ------------------ ---------
The exchange differences on retranslation of net investments in
foreign operations will be reclassified to the Income Statement on
disposal.
Unaudited Consolidated Balance Sheet
At 30 September 2017
At
At At 31 March
30 September 2017 30 September 2016 2017
Notes GBP000 GBP000 GBP000
---------------------------------------------------- ----- ------------------ ------------------ ---------
Non-current assets
Investment properties 12 963,481 1,034,687 987,560
Owner occupied property, plant and equipment 2,013 2,147 2,124
Investment in joint ventures 13 23,264 26,259 19,882
---------------------------------------------------- ----- ------------------ ------------------ ---------
988,758 1,063,093 1,009,566
---------------------------------------------------- ----- ------------------ ------------------ ---------
Current assets
Land, developments and trading properties 14 95,476 88,294 86,680
Available-for-sale investments 15 - 1,991 -
Corporate tax receivable 3,358 1,335 3,320
Trade and other receivables 16 60,322 77,485 73,925
Cash and cash equivalents 17 104,341 52,945 99,262
---------------------------------------------------- ----- ------------------ ------------------ ---------
263,497 222,050 263,187
---------------------------------------------------- ----- ------------------ ------------------ ---------
Total assets 1,252,255 1,285,143 1,272,753
---------------------------------------------------- ----- ------------------ ------------------ ---------
Current liabilities
Trade and other payables 18 (57,650) (62,408) (56,349)
Borrowings 19 (4,133) (901) (2,517)
---------------------------------------------------- ----- ------------------ ------------------ ---------
(61,783) (63,309) (58,866)
---------------------------------------------------- ----- ------------------ ------------------ ---------
Non-current liabilities
Borrowings 19 (657,410) (685,404) (671,184)
Derivative financial instruments 20 (10,095) (20,721) (13,981)
Deferred tax liability 9 (12,734) (6,800) (11,825)
---------------------------------------------------- ----- ------------------ ------------------ ---------
(680,239) (712,925) (696,990)
---------------------------------------------------- ----- ------------------ ------------------ ---------
Total liabilities (742,022) (776,234) (755,856)
---------------------------------------------------- ----- ------------------ ------------------ ---------
Net assets 510,233 508,909 516,897
---------------------------------------------------- ----- ------------------ ------------------ ---------
Equity
Called-up share capital 21 1,450 1,447 1,447
Share premium account 98,798 98,798 98,798
Revaluation reserve 182,183 171,600 164,190
Capital redemption reserve 7,478 7,478 7,478
Other reserves 291 291 291
Retained earnings 220,033 229,295 244,693
---------------------------------------------------- ----- ------------------ ------------------ ---------
Equity attributable to equity holders of the parent 510,233 508,909 516,897
Non-controlling interests - - -
---------------------------------------------------- ----- ------------------ ------------------ ---------
Total equity 510,233 508,909 516,897
---------------------------------------------------- ----- ------------------ ------------------ ---------
Unaudited Consolidated Cash Flow Statement
For the Half Year to 30 September 2017
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash flows from operating activities
Profit before tax 1,209 31,052 41,595
Depreciation 151 204 391
Net revaluation gain on investment properties (2,145) (29,141) (39,152)
(Gain)/loss on sale of investment properties (1,225) 2,788 (1,391)
Profit on sale of plant and equipment - (13) (56)
Net financing costs 12,222 12,750 22,442
Change in value of derivative financial instruments (2,884) 5,949 (789)
Change in fair value of Convertible Bond 127 (7,663) (2,973)
Share based payment charge 321 283 1,672
Share of results of joint ventures (3,382) 1,044 6,528
Change in fair value of available-for-sale investment (1,423) 1,179 3,352
Foreign exchange movement (22) 32 6
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash inflows from operations before changes in working capital 2,949 18,464 31,625
--------------------------------------------------------------- ------------------ ------------------ ---------
Change in trade and other receivables 14,339 (4,319) 876
Change in land, developments and trading properties (6,734) 5,451 3,789
Change in trade and other payables (841) (7,625) (9,338)
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash inflows generated from operations 9,713 11,971 26,952
--------------------------------------------------------------- ------------------ ------------------ ---------
Finance costs (16,407) (17,028) (33,041)
Finance income 56 627 1,413
Tax received/(paid) 5 (2,928) (3,392)
--------------------------------------------------------------- ------------------ ------------------ ---------
(16,346) (19,329) (35,020)
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash flows from operating activities (6,633) (7,358) (8,068)
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash flows from investing activities
Additions to investment property (49,175) (26,022) (59,310)
Sale of investment property 80,578 54,919 156,254
Dividends from joint ventures - 687 1,580
Receipts from/(purchases of) available for sale asset 1,423 (56) (238)
Sale of plant and equipment - 49 178
Purchase of leasehold improvements, plant and equipment (40) (193) (442)
--------------------------------------------------------------- ------------------ ------------------ ---------
Net cash generated from investing activities 32,786 29,384 98,022
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash flows from financing activities
Borrowings drawn down 11,704 15,725 41,986
Borrowings repaid (25,526) (57,709) (102,887)
Shares issued 3 - -
Purchase of own shares - (944) (944)
Equity dividends paid (7,261) (823) (3,566)
--------------------------------------------------------------- ------------------ ------------------ ---------
Net cash used by financing activities (21,080) (43,751) (65,411)
--------------------------------------------------------------- ------------------ ------------------ ---------
Net increase/(decrease) in cash and cash equivalents 5,073 (21,725) 24,543
Exchange gains on cash and cash equivalents 6 - 49
Cash and cash equivalents at start of period 99,262 74,670 74,670
--------------------------------------------------------------- ------------------ ------------------ ---------
Cash and cash equivalents at end of period 104,341 52,945 99,262
--------------------------------------------------------------- ------------------ ------------------ ---------
Unaudited Consolidated Statement of Changes in Equity
At 30 September 2017
Capital
Share Share Revaluation redemption Other Own shares
capital premium reserve reserve reserves Retained earnings held Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------- -------- -------- ----------- ----------- --------- ----------------- ---------- -------
At 31 March 2016 1,447 98,798 143,699 7,478 291 229,008 - 480,721
Total comprehensive
income - - - - - 39,172 - 39,172
Revaluation surplus - - 39,152 - - (39,152) - -
Realised on
disposals - - (18,661) - - 18,661 - -
Performance share
plan - - - - - 1,672 - 1,672
Performance share
plan - deferred
tax - - - - - (2,062) - (2,062)
Share settled bonus - - - - - 1,904 - 1,904
Dividends paid - - - - - (3,566) - (3,566)
Purchase of own
shares - - - - - - (944) (944)
Own shares held
reserve transfer - - - - - (944) 944 -
------------------- -------- -------- ----------- ----------- --------- ----------------- ---------- -------
At 31 March 2017 1,447 98,798 164,190 7,478 291 244,693 - 516,897
Total comprehensive
income - - - - - 382 - 382
Revaluation surplus - - 2,145 - - (2,145) - -
Realised on
disposals - - 15,848 - - (15,848) - -
Issued share
capital 3 - - - - - - 3
Performance share
plan - - - - - 321 - 321
Performance share
plan - deferred
tax - - - - - (109) - (109)
Dividends paid - - - - - (7,261) - (7,261)
------------------- -------- -------- ----------- ----------- --------- ----------------- ---------- -------
At 30 September
2017 1,450 98,798 182,183 7,478 291 220,033 - 510,233
------------------- -------- -------- ----------- ----------- --------- ----------------- ---------- -------
For a breakdown of total comprehensive income see the Unaudited
Consolidated Statement of Comprehensive Income.
The adjustment against retained earnings of GBP321,000 (31 March
2017: GBP1,672,000) adds back the share based payments charge in
accordance with IFRS 2 Share Based Payments.
There were net transactions with owners of GBP7,046,000 (31
March 2017: GBP2,996,000) made up of the Performance Share Plan
credit of GBP321,000 (31 March 2017: GBP1,672,000) and related
deferred tax debit of GBP109,000 (31 March 2017: GBP2,062,000),
dividends paid of GBP7,261,000 (31 March 2017: GBP3,566,000), the
issue of share capital of GBP3,000 (31 March 2017: GBPnil), the
purchase of own shares of GBPnil (31 March 2017: GBP944,000) and
the share settled bonus of GBPnil (31 March 2017:
GBP1,904,000).
Capital
Share Share Revaluation redemption Other Retained Own shares
capital premium reserve reserve reserves earnings held Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------- -------- -------- ----------- ----------- --------- --------- ---------- -------
At 31 March 2016 1,447 98,798 143,699 7,478 291 229,008 - 480,721
Total comprehensive
income - - - - - 31,745 - 31,745
Revaluation surplus - - 29,141 - - (29,141) - -
Realised on disposals - - (1,240) - - 1,240 - -
Performance share
plan - - - - - 283 - 283
Performance share
plan - deferred tax - - - - - (1,748) - (1,748)
Share settled bonus - - - - - (325) - (325)
Dividends paid - - - - - (823) - (823)
Purchase of own
shares - - - - - - (944) (944)
Own shares held
reserve transfer - - - - - (944) 944 -
---------------------- -------- -------- ----------- ----------- --------- --------- ---------- -------
At 30 September
2016 1,447 98,798 171,600 7,478 291 229,295 - 508,909
---------------------- -------- -------- ----------- ----------- --------- --------- ---------- -------
The adjustment against retained earnings of GBP283,000 adds back
the share based payments charge in accordance with IFRS 2 Share
Based Payments.
There were net transactions with owners of GBP3,557,000 made up
of the performance share plan credit of GBP283,000 and related
deferred tax debit of GBP1,748,000, dividends paid of GBP823,000,
the purchase of own shares of GBP944,000 and the share settled
bonus of GBP325,000.
Unaudited Notes to the Half Year Results
1. Financial Information
The financial information contained in this statement does not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006. The full accounts for the year ended 31
March 2017, which were prepared under International Financial
Reporting Standards as adopted by the European Union and which
received an unqualified report from the Auditors, and did not
contain a statement under Section 498(2) or Section 498(3) of the
Companies Act 2006, have been filed with the Registrar of
Companies.
These interim condensed unaudited consolidated financial
statements have been prepared in accordance with IAS 34 Interim
Financial Reporting as adopted by the European Union. The principal
accounting policies have remained unchanged from the prior
financial period to 31 March 2017.
These interim condensed unaudited consolidated financial
statements do not include all of the information required for full
annual financial statements, and should be read in conjunction with
the consolidated financial statements of the Group for the year
ended 31 March 2017.
The Directors have a reasonable expectation that the Group will
continue in operational existence for the foreseeable future and
have, therefore, used the going concern basis in preparing the
financial statements.
Principal Risks and Uncertainties
The responsibility for the governance of the Group's risk
profile lies with the Board of Directors of Helical. The Board is
responsible for setting the Group's risk strategy by assessing
risks, determining its willingness to accept those risks and
ensuring that the risks are monitored and that the Group is aware
of and, if appropriate, reacts to changes in those risks. The Board
is also responsible for allocating responsibility for risk within
the Group's management structure.
The Group considers its principal risks to be:
-- strategic risk;
-- financial risk;
-- operational risk; and
-- reputational risk.
There have been no significant changes to these risk areas in
the period nor are there expected to be for the half year to 31
March 2018. A further analysis of these risks is included within
the consolidated financial statements of the Group for the year
ended 31 March 2017.
Use of Estimates and Judgements
The estimates and judgements have remained unchanged from the
prior financial year to 31 March 2017.
2. Statement of Directors' Responsibilities
Each of the Directors confirms that, to the best of his
knowledge, the condensed set of unaudited consolidated financial
statements, which has been prepared in accordance with IAS 34 as
adopted by the European Union, gives a true and fair view of the
assets, liabilities, financial position and profit or loss of the
issuer, or the undertakings included in the consolidation as a
whole and that the interim management report herein includes a fair
review of the information required by DTR 4.2.7R and DTR
4.2.8R.
Balances with related parties at 30 September 2017, 30 September
2016 and 31 March 2017 are disclosed in note 24.
A list of current Directors is maintained at 5 Hanover Square,
London W1S 1HQ and at www.helical.co.uk.
The half year statement was approved by the Board on 15 November
2017 and is available from the Company's registered office at 5
Hanover Square, London W1S 1HQ and on the Company's website at
www.helical.co.uk.
On behalf of the Board
Tim Murphy
Finance Director
15 November 2017
3. Segmental Information
The Group identifies two discrete operating segments whose
results are regularly reviewed by the Chief Operating Decision
Maker (the Chief Executive) to allocate resources to these segments
and to assess their performance. The segments are:
-- investment properties, which are owned or leased by the Group
for long-term income and for capital appreciation, and trading
properties, which are owned or leased with the intention to sell;
and,
-- development properties, which include sites, developments in
the course of construction, completed developments available for
sale, and pre-sold developments.
Investment Investment
and Trading Developments Total and Trading Developments Total
Half Year to Half Year to Half Year to Half Year to Half Year to Half Year to
30.09.17 30.09.17 30.09.17 30.09.16 30.09.16 30.09.16
Revenue GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Rental income 20,178 - 20,178 25,531 - 25,531
Development
property income - 12,962 12,962 - 26,836 26,836
Other revenue 67 - 67 - - -
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Revenue 20,245 12,962 33,207 25,531 26,836 52,367
------------------ ------------------ ------------- ------------- ------------------ ------------- -------------
Investment
and Trading Developments Total
Year to Year to Year to
31.03.17 31.03.17 31.03.17
Revenue GBP000 GBP000 GBP000
---------------------------- ------------- ------------ ---------
Rental income 48,835 - 48,835
Development property income - 49,994 49,994
Other revenue 1,105 - 1,105
---------------------------- ------------- ------------ ---------
Revenue 49,940 49,994 99,934
---------------------------- ------------- ------------ ---------
Investment Investment and
and Trading Developments Total Trading Developments Total
Half Year to Half Year to Half Year to Half Year to Half Year to Half Year to
30.09.17 30.09.17 30.09.17 30.09.16 30.09.16 30.09.16
Profit before tax GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ ----------------- ------------- ------------- ----------------- ------------- -------------
Net rental income 18,034 3 18,037 23,935 (24) 23,911
Development
property loss - (9,520) (9,520) - (83) (83)
Share of results
of joint ventures 2,419 963 3,382 (704) (340) (1,044)
Gain on sale and
revaluation of
investment
properties 3,370 - 3,370 26,353 - 26,353
------------------ ----------------- ------------- ------------- ----------------- ------------- -------------
23,823 (8,554) 15,269 49,584 (447) 49,137
Fair value
movement of
available for
sale assets 1,423 (1,179)
Other operating
income/(expense) 41 (1)
------------------ ----------------- ------------- ------------- ----------------- ------------- -------------
Gross profit 16,733 47,957
Administrative
expenses (6,081) (5,871)
Net finance costs (9,465) (11,036)
Foreign exchange
gain 22 2
------------------ ----------------- ------------- ------------- ----------------- ------------- -------------
Profit before tax 1,209 31,052
------------------ ----------------- ------------- ------------- ----------------- ------------- -------------
Investment
and Trading Developments Total
Year to Year to Year to
31.03.17 31.03.17 31.03.17
Profit before tax GBP000 GBP000 GBP000
------------------------------------------------------ ------------ -------------- ----------
Net rental income 46,213 (51) 46,162
Development property profit - 843 843
Share of results of joint ventures (2,049) (4,479) (6,528)
Gain on sale and revaluation of investment properties 40,543 - 40,543
------------------------------------------------------ ------------ -------------- ----------
84,707 (3,687) 81,020
Fair value movement of available for sale assets (3,352)
Other operating income 982
------------------------------------------------------ ------------ -------------- ----------
Gross profit 78,650
Administrative expenses (18,372)
Net finance costs (18,680)
Foreign exchange loss (3)
------------------------------------------------------ ------------ -------------- ----------
Profit before tax 41,595
------------------------------------------------------ ------------ -------------- ----------
Investment and Investment
Trading Developments Total and Trading Developments Total
At 30.09.17 At 30.09.17 At 30.09.17 At 30.09.16 At 30.09.16 At 30.09.16
Balance sheet GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------- -------------------- -------------- ------------- ------------ -------------- -------------
Investment
properties 963,481 - 963,481 1,034,687 - 1,034,687
Land, development
and trading
properties 28 95,448 95,476 28 88,266 88,294
Investment in joint
ventures 4,233 19,031 23,264 3,192 23,067 26,259
-------------------- -------------------- -------------- ------------- ------------ -------------- -------------
967,742 114,479 1,082,221 1,037,907 111,333 1,149,240
Other assets 170,034 135,903
-------------------- -------------------- -------------- ------------- ------------ -------------- -------------
Total assets 1,252,255 1,285,143
Liabilities (742,022) (776,234)
-------------------- -------------------- -------------- ------------- ------------ -------------- -------------
Net assets 510,233 508,909
-------------------- -------------------- -------------- ------------- ------------ -------------- -------------
Investment
and Trading Developments Total
At 31.03.17 At 31.03.17 At 31.03.17
Balance sheet GBP000 GBP000 GBP000
----------------------------------------- ------------- ------------ ------------
Investment properties 987,560 - 987,560
Land, development and trading properties 28 86,652 86,680
Investment in joint ventures 1,814 18,068 19,882
----------------------------------------- ------------- ------------ ------------
989,402 104,720 1,094,122
Other assets 178,631
----------------------------------------- ------------- ------------ ------------
Total assets 1,272,753
Liabilities (755,856)
----------------------------------------- ------------- ------------ ------------
Net assets 516,897
----------------------------------------- ------------- ------------ ------------
4. Net Rental Income
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
------------------------------------------------------- ------------------ ------------------ ---------
Gross rental income 20,178 25,531 48,835
Rents payable (83) (17) (68)
Property overheads (1,991) (1,378) (2,283)
------------------------------------------------------- ------------------ ------------------ ---------
Net rental income 18,104 24,136 46,484
Net rental income attributable to profit share partner (67) (225) (322)
------------------------------------------------------- ------------------ ------------------ ---------
Group share of net rental income 18,037 23,911 46,162
------------------------------------------------------- ------------------ ------------------ ---------
5. Development Property (Loss)/Profit
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
----------------------------------- ------------------ ------------------ ---------
Development property income 12,962 26,836 49,994
Cost of sales (10,974) (18,938) (37,576)
Sales expenses (53) (4,012) (5,275)
Provision against book values (11,455) (3,969) (6,300)
----------------------------------- ------------------ ------------------ ---------
Development property (loss)/profit (9,520) (83) 843
----------------------------------- ------------------ ------------------ ---------
6. Net Gain on Sale and Revaluation of Investment Properties
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
---------------------------------------------------------- ------------------ ------------------ ---------
Net proceeds from the sale of investment properties 81,489 54,919 156,939
Book value (note 12) (79,203) (57,243) (154,863)
Tenants incentives on sold investment properties (1,061) (464) (685)
---------------------------------------------------------- ------------------ ------------------ ---------
Gain/(loss) on sale of investment properties 1,225 (2,788) 1,391
Revaluation surplus on investment properties 2,145 29,141 39,152
---------------------------------------------------------- ------------------ ------------------ ---------
Net gain on sale and revaluation of investment properties 3,370 26,353 40,543
---------------------------------------------------------- ------------------ ------------------ ---------
7. Administrative Expenses
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
------------------------------------------------- ------------------ ------------------ ---------
Administration costs (5,606) (5,801) (10,799)
Performance related awards (340) (285) (6,854)
National Insurance on performance related awards (135) 215 (719)
------------------------------------------------- ------------------ ------------------ ---------
Administrative expenses (6,081) (5,871) (18,372)
------------------------------------------------- ------------------ ------------------ ---------
8. Finance Costs
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
----------------------------------------------------- ------------------ ------------------ ---------
Interest payable on bank loans, bonds and overdrafts (14,471) (14,923) (28,586)
Other interest payable and similar charges (2,353) (2,520) (4,913)
Interest capitalised 3,448 3,494 7,901
----------------------------------------------------- ------------------ ------------------ ---------
Finance costs (13,376) (13,949) (25,598)
----------------------------------------------------- ------------------ ------------------ ---------
9. Tax on Profit on Ordinary Activities
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
------------------------------------------ ------------------ ------------------ ---------
The tax (charge)/credit is based on the profit for the period and represents:
United Kingdom corporation tax at 19%
- Group corporation tax - - -
- Adjustment in respect of prior periods (10) - 1,521
- Overseas tax - 2 2
------------------------------------------ ------------------ ------------------ ---------
Current tax (charge)/credit (10) 2 1,523
Deferred tax
- Capital allowances 403 (847) (1,023)
- Tax losses 1,158 674 (4,347)
- Unrealised chargeable gains (1,562) (164) 1,803
- Other temporary differences (798) 1,007 (427)
------------------------------------------ ------------------ ------------------ ---------
Deferred tax (charge)/credit (799) 670 (3,994)
------------------------------------------ ------------------ ------------------ ---------
Total tax (charge)/credit for period (809) 672 (2,471)
------------------------------------------ ------------------ ------------------ ---------
At
At At 31 March
30 September 2017 30 September 2016 2017
Deferred tax GBP000 GBP000 GBP000
---------------------------- ------------------- ------------------ ---------
Capital allowances (2,566) (2,793) (2,969)
Tax losses 9,332 13,195 8,174
Unrealised chargeable gains (23,893) (24,298) (22,331)
Other temporary differences 4,393 7,096 5,301
---------------------------- ------------------- ------------------ ---------
Deferred tax liability (12,734) (6,800) (11,825)
---------------------------- ------------------- ------------------ ---------
Under IAS 12, deferred tax provisions are made for the tax that
would potentially be payable on the realisation of investment
properties and other assets at book value.
If upon sale of the investment properties the group retained all
the capital allowances, the deferred tax provision in respect of
capital allowances of GBP2,566,000 would be released and further
capital allowances of GBP26,254,000 would be available to reduce
future tax liabilities.
The net deferred tax asset in respect of other temporary
differences arises from tax relief available to the Group on the
mark to market valuation of financial instruments, the future
vesting of share awards and other timing differences.
10. Dividends
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
-------------------------------------------------------- ------------------ ------------------ ---------
Attributable to equity share capital
Ordinary
- Interim paid 2.40p per share - - 2,743
- Prior period final paid 6.20p per share (2016: 0.72p) 7,261 823 823
-------------------------------------------------------- ------------------ ------------------ ---------
7,261 823 3,566
-------------------------------------------------------- ------------------ ------------------ ---------
The interim dividend of 2.50p (30 September 2016: 2.40p per
share) was approved by the Board on 14 November 2017 and will be
paid on 22 December 2017 to Shareholders on the register on 24
November 2017. This interim dividend, amounting to GBP2,934,000 has
not been included as a liability as at 30 September 2017.
11. Earnings Per Share
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the period. This
is a different basis to the net asset per share calculations which
are based on the number of shares at the year end. Shares held by
the Helical Employees' Share Ownership Plan Trust (the "ESOP"),
which has waived its entitlement to receive dividends, are treated
as cancelled for the purpose of this calculation.
The calculation of diluted earnings per share is based on the
basic earnings per share, adjusted to allow for the issue of shares
and the post tax effect of dividends on the assumed exercise of all
dilutive options.
The earnings per share is calculated in accordance with IAS 33
and the best practice recommendations of the European Public Real
Estate Association ("EPRA").
Reconciliations of the earnings and weighted average number of
shares used in the calculations are set out below:
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
000's 000's 000's
-------------------------------------------------------------- -------------------- ------------------- ---------
Ordinary shares in issue 118,534 118,184 118,196
Weighting adjustment (1,426) (3,901) (3,110)
--------------------------------------------------------------- ------------------- ------------------- ---------
Weighted average ordinary shares in issue for calculation of
basic and EPRA earnings per share 117,108 114,283 115,086
Weighted average ordinary shares issued on share settled
bonuses 840 1,197 1,402
Weighted average ordinary shares to be issued under performance
share plan 1,600 3,700 1,403
--------------------------------------------------------------- ------------------- ------------------- ---------
Weighted average ordinary shares in issue for calculation of
diluted earnings per share 119,548 119,180 117,891
--------------------------------------------------------------- ------------------- ------------------- ---------
GBP000 GBP000 GBP000
--------------------------------------------------------------- ------------------- ------------------- ---------
Earnings used for calculation of basic and diluted earnings per
share 400 31,724 39,124
--------------------------------------------------------------- ------------------- ------------------- ---------
Basic earnings per share 0.3p 27.8p 34.0p
Diluted earnings per share 0.3p 26.6p 33.2p
--------------------------------------------------------------- ------------------- ------------------- ---------
GBP000 GBP000 GBP000
------------------------------------------------------------------------- -------- -------- --------
Earnings used for calculation of basic and diluted earnings per share 400 31,724 39,124
Net gain on sale and revaluation of investment properties - subsidiaries (3,370) (26,353) (40,543)
- joint ventures (2,331) 518 1,929
Tax on profit/(loss) on disposal of investment properties 659 (308) 420
Fair value movement on derivative financial instruments - subsidiaries (2,884) 5,949 (789)
- joint ventures 6 - 42
Fair value movement on Convertible Bond 127 (7,663) (2,973)
Fair value movement of available-for-sale investment (1,423) 1,179 3,352
Deferred tax on adjusting items 1,876 (66) (37)
------------------------------------------------------------------------- -------- -------- --------
(Loss)/earnings used for calculations of EPRA earnings per share (6,940) 4,980 525
------------------------------------------------------------------------- -------- -------- --------
EPRA (loss)/earnings per share (5.9p) 4.4p 0.5p
------------------------------------------------------------------------- -------- -------- --------
The earnings used for the calculation of EPRA earnings per share
includes net rental income and development property profits but
excludes trading property gains.
12. Investment Properties
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
---------------------------------------------------------- ------------------ ------------------ ---------
Book value at 1 April 987,560 1,035,033 1,035,033
Additions at cost 50,559 27,806 68,778
Disposals (79,203) (57,243) (154,863)
Revaluation surplus 2,145 29,141 39,152
Revaluation surplus attributable to profit share partners 2,420 (50) (540)
---------------------------------------------------------- ------------------ ------------------ ---------
As at period end 963,481 1,034,687 987,560
---------------------------------------------------------- ------------------ ------------------ ---------
All properties are stated at market value as at 30 September
2017, and are valued by professionally qualified external valuers
(Cushman & Wakefield LLP) in accordance with the
Valuation-Professional Standards published by the Royal Institution
of Chartered Surveyors. The fair value of the investment properties
at 30 September 2017 is as follows:
Half Year to Year to
30 September Half Year to 31 March
2017 30 September 2016 2017
GBP000 GBP000 GBP000
------------------------------------------------------------------- ------------- ------------------ ---------
Book value 963,481 1,034,687 987,560
Lease incentives and costs included in trade and other receivables 16,065 11,323 15,440
------------------------------------------------------------------- ------------- ------------------ ---------
Fair value 979,546 1,046,010 1,003,000
------------------------------------------------------------------- ------------- ------------------ ---------
Interest capitalised in respect of the refurbishment of
investment properties at 30 September 2017 amounted to GBP7,174,000
(30 September 2016: GBP8,355,000; 31 March 2017: GBP10,972,000).
Interest capitalised during the period in respect of the
refurbishment of investment properties amounted to GBP408,000.
The historical cost of investment property is GBP791,823,000 (30
September 2016: GBP861,338,000; 31 March 2017: GBP822,161,000).
13. Joint Ventures
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
Share of results of joint ventures GBP000 GBP000 GBP000
--------------------------------------------------------- ------------------ ------------------ ---------
Gross rental income 5 794 931
Property overheads (164) (90) (100)
--------------------------------------------------------- ------------------ ------------------ ---------
Net rental (expense)/income (159) 704 831
Net gain/(loss) on revaluation of investment properties 2,331 (510) (1,875)
Loss on sale of investment properties - (8) (54)
Development profit/(loss) 1,367 116 (35)
Provision against book values - (2,668) (6,524)
Other operating expense (63) - (1,118)
Administrative expenses (127) (175) (338)
Finance costs (709) (105) (2)
Finance income 5 1,141 1,233
Change in fair value of derivative financial instruments (6) - (42)
--------------------------------------------------------- ------------------ ------------------ ---------
Profit/(loss) before tax 2,639 (1,505) (7,924)
Tax (89) 461 1,396
--------------------------------------------------------- ------------------ ------------------ ---------
Profit/(loss) after tax 2,550 (1,044) (6,528)
Accounting adjustment* 832 - -
--------------------------------------------------------- ------------------ ------------------ ---------
Share of results of joint ventures 3,382 (1,044) (6,528)
--------------------------------------------------------- ------------------ ------------------ ---------
At
At At 31 March
30 September 2017 30 September 2016 2017
Investment in joint ventures GBP000 GBP000 GBP000
--------------------------------------------- ------------------ ------------------ ---------
Summarised balance sheets
Non-current assets
Investment properties 19,995 12,833 13,907
Owner occupied property, plant and equipment 22 88 30
Deferred Tax 1,761 907 1,811
Derivative financial instruments 51 - 52
--------------------------------------------- ------------------ ------------------ ---------
21,829 13,828 15,800
--------------------------------------------- ------------------ ------------------ ---------
Current assets
Land, development and trading properties 103,888 88,831 89,115
Trade and other receivables 6,522 2,918 1,327
Cash and cash equivalents 8,056 11,690 9,745
--------------------------------------------- ------------------ ------------------ ---------
118,466 103,439 100,187
--------------------------------------------- ------------------ ------------------ ---------
Current liabilities
Trade and other payables (21,901) (17,184) (17,699)
--------------------------------------------- ------------------ ------------------ ---------
(21,901) (17,184) (17,699)
--------------------------------------------- ------------------ ------------------ ---------
Non-current liabilities
Trade and other payables (25,680) (31,211) (23,124)
Borrowings (70,282) (42,613) (55,282)
(95,962) (73,824) (78,406)
--------------------------------------------- ------------------ ------------------ ---------
Net assets pre adjustment 22,432 26,259 19,882
Accounting adjustment* 832 - -
--------------------------------------------- ------------------ ------------------ ---------
Net assets 23,264 26,259 19,882
--------------------------------------------- ------------------ ------------------ ---------
*The adjustment in economic interest has been made for the
Group's share of the loss incurred on one of its joint ventures in
the period to ensure the Group's interest is shown at its
recoverable amount.
The Directors' valuation of trading and development stock shows
a surplus of GBP11,000,000 (30 September 2016: GBP7,000,000; 31
March 2017: GBP7,500,000) above book value.
14. Land, Developments and Trading Properties
At
At At 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
--------------------------------- ------------------ ------------------ ---------
Development properties 95,448 88,266 86,652
Properties held as trading stock 28 28 28
--------------------------------- ------------------ ------------------ ---------
95,476 88,294 86,680
--------------------------------- ------------------ ------------------ ---------
The Directors' valuation of trading and development stock shows
a surplus of GBP943,000 (30 September 2016: GBP6,573,000; 31 March
2017: GBP5,014,000) above book value.
Total interest to date in respect of the development of sites is
included in stock to the extent of GBP11,660,000 (30 September
2016: GBP11,441,000; 31 March 2017: GBP11,178,000). Interest
capitalised during the period in respect of development sites
amounted to GBP481,000.
15. Available-For-Sale Investments
Year to
Half Year to Half Year to 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
------------------------- ------------------ ------------------ ---------
Fair value at 1 April - 3,114 3,114
Additions - 56 248
Fair value movement 1,423 (1,179) (3,352)
Disposals (1,423) - (10)
------------------------- ------------------ ------------------ ---------
Fair value at period end - 1,991 -
------------------------- ------------------ ------------------ ---------
The fair values of the Group's available-for-sale investments
have been determined by assessing the expected future consideration
receivable from these investments, representing Level 3 fair value
measurements as defined by IFRS 13 Fair Value Measurement as the
value cannot be derived from observable market data. The fair value
of the asset is sensitive only to potential sales proceeds. The
gain of GBP1,423,000 recognised in the period is the result of cash
received in relation to a previously fully impaired asset.
16. Trade and Other Receivables
At
At At 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
------------------------------- ------------------ ------------------ ---------
Trade receivables 8,644 13,974 12,836
Other receivables 28,733 36,022 27,462
Prepayments and accrued income 22,945 27,489 33,627
------------------------------- ------------------ ------------------ ---------
60,322 77,485 73,925
------------------------------- ------------------ ------------------ ---------
17. Cash and Cash Equivalents
At
At At 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
----------------------------------------------- ------------------ ------------------ ---------
Rent deposits and cash held at managing agents 4,896 7,513 4,046
Restricted cash 71,167 9,176 12,111
Cash deposits 28,278 36,256 83,105
----------------------------------------------- ------------------ ------------------ ---------
104,341 52,945 99,262
----------------------------------------------- ------------------ ------------------ ---------
Restricted cash is made up of cash held by solicitors and cash
in blocked accounts. Of the blocked amount, GBP54,408,000 relates
to the sale of a property in the period and is expected to be
released in the near future upon the successful refinancing of an
existing facility.
18. Trade and Other Payables
At
At At 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
----------------------------- ------------------ ------------------ ---------
Trade payables 14,704 17,256 12,197
Other payables 2,255 3,494 3,022
Accruals and deferred income 40,691 41,658 41,130
----------------------------- ------------------ ------------------ ---------
57,650 62,408 56,349
----------------------------- ------------------ ------------------ ---------
19. Borrowings
At
At At 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
----------------------------- ------------------ ------------------ ---------
Current borrowings 4,133 901 2,517
----------------------------- ------------------ ------------------ ---------
Borrowings repayable within:
- one to two years 104,067 4,133 4,150
- two to three years 421,886 99,250 304,641
- three to four years 1,036 424,077 215,667
- four to five years 57,500 84,053 1,053
- five to six years 1,110 1,072 73,353
- six to ten years 71,811 72,819 72,320
----------------------------- ------------------ ------------------ ---------
Non-current borrowings 657,410 685,404 671,184
----------------------------- ------------------ ------------------ ---------
Total borrowings 661,543 686,305 673,701
----------------------------- ------------------ ------------------ ---------
Included within borrowings repayable within one to two years is
the Convertible Bond at its fair value of GBP99,901,000. It is a
financial instrument classified as Level 1 under the IFRS 13 fair
value hierarchy.
At
At At 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
----------------- ------------------ ------------------ ---------
Total borrowings 661,543 686,305 673,701
Cash (104,341) (52,945) (99,262)
----------------- ------------------ ------------------ ---------
Net borrowings 557,202 633,360 574,439
----------------- ------------------ ------------------ ---------
Net borrowings excludes the Group's share of borrowings in joint
ventures of GBP70,282,000 (30 September 2016: GBP42,613,000; 31
March 2017: GBP55,282,000) and cash of GBP8,056,000 (30 September
2016: GBP11,690,000; 31 March 2017: GBP9,745,000). All borrowings
in joint ventures are secured.
At
At At 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
----------- ------------------ ------------------ ---------
Net assets 510,233 508,909 516,897
----------- ------------------ ------------------ ---------
Gearing 109% 124% 111%
----------- ------------------ ------------------ ---------
20. Derivative Financial Instruments
At
At At 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
------------------------------------------- ------------------ ------------------ ---------
Derivative financial instruments asset - - -
------------------------------------------- ------------------ ------------------ ---------
Derivative financial instruments liability (10,095) (20,721) (13,981)
------------------------------------------- ------------------ ------------------ ---------
The fair values of the Group's outstanding interest rate swaps
have been estimated by calculating the present values of future
cash flows, using appropriate market discount rates, representing
Level 2 fair value measurements as defined in IFRS 13 Fair Value
Measurement.
21. Share Capital
At
At At 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
----------- ------------------ ------------------ ---------
Authorised 39,577 39,577 39,577
----------- ------------------ ------------------ ---------
The authorised share capital of the Company is GBP39,576,626.60
divided into ordinary shares of 1p each and deferred shares of 1/8p
each.
Allotted, called up and fully paid:
- 118,534,278 (31 March 2017: 118,196,215) ordinary shares of 1p each 1,185 1,182 1,182
- 212,145,300 deferred shares of 1/8p each 265 265 265
---------------------------------------------------------------------- ----- ----- -----
1,450 1,447 1,447
---------------------------------------------------------------------- ----- ----- -----
22. Own Shares Held
Following approval at the 1997 Annual General Meeting the
Company established the Helical Employees' Share Ownership Plan
Trust (the "ESOP") to be used as part of the remuneration
arrangements for employees. The purpose of the ESOP is to
facilitate and encourage the ownership of shares by, or for the
benefit of employees, by the acquisition and distribution of shares
in the Company.
The ESOP purchases shares in the Company to satisfy the
Company's obligations under its Share Option Scheme and Performance
Share Plan.
At 30 September 2017 the ESOP held 1,262,000 ordinary shares in
Helical plc (30 September 2016: 3,901,000; 31 March 2017:
1,262,000).
At 30 September 2017 options over nil (30 September 2016 and 31
March 2017: nil) ordinary shares in Helical plc had been granted
through the ESOP. At 30 September 2017 awards over 3,735,000 (30
September 2016: GBP7,524,000 and 31 March 2017: GBP4,744,000)
ordinary shares in Helical plc, made under the terms of the
Performance Share Plan, were outstanding.
23. Net Assets Per Share
Number
At of At
30 September 2017 Shares 30 September 2017
GBP000 000's Pence Per Share
------------------------------------------------------------------ ------------------ ------- ------------------
Net asset value 510,233 118,534
Less: - own shares held by ESOP (1,262)
- deferred shares (265)
------------------------------------------------------------------ ------------------ ------- ------------------
Basic net asset value 509,968 117,272 435
Add: share settled bonus 840
Add: dilutive effect of the Performance Share Plan 1,570
------------------------------------------------------------------ ------------------ ------- ------------------
Diluted net asset value 509,968 119,682 426
Adjustment for:
- fair value of financial instruments 10,043
- fair value movement on Convertible Bond (99)
- deferred tax 24,999
------------------------------------------------------------------ ------------------ ------- ------------------
Adjusted diluted net asset value 544,911 119,682 455
Adjustment for:
- fair value of trading and development properties 11,943
------------------------------------------------------------------ ------------------ ------- ------------------
EPRA net asset value 556,854 119,682 465
Adjustment for:
- fair value of financial instruments (10,043)
- deferred tax (24,999)
------------------------------------------------------------------ ------------------ ------- ------------------
EPRA triple net asset value 521,812 119,682 436
------------------------------------------------------------------ ------------------ ------- ------------------
The adjustment for the fair value of trading and development
properties represents the surplus as at 30 September 2017.
At Number At
31 March of 31 March
2017 Shares 2017
GBP000 000's Pence Per Share
------------------------------------------------------------------ --------- ------- ----------------
Net asset value 516,897 118,196
Less: - own shares held by ESOP (1,262)
- deferred shares (265)
------------------------------------------------------------------ --------- ------- ----------------
Basic net asset value 516,632 116,934 442
Add: share settled bonus 1,402
Add: dilutive effect of the Performance Share Plan 1,410
------------------------------------------------------------------ --------- ------- ----------------
Diluted net asset value 516,632 119,746 431
Adjustment for:
- fair value of financial instruments 13,929
- fair value movement on Convertible Bond (226)
- deferred tax 23,124
------------------------------------------------------------------ --------- ------- ----------------
Adjusted diluted net asset value 553,459 119,746 462
Adjustment for:
- fair value of trading and development properties 12,514
------------------------------------------------------------------ --------- ------- ----------------
EPRA net asset value 565,973 119,746 473
Adjustment for:
- fair value of financial instruments (13,929)
- deferred tax (23,124)
------------------------------------------------------------------ --------- ------- ----------------
EPRA triple net asset value 528,920 119,746 442
------------------------------------------------------------------ --------- ------- ----------------
The net asset values per share have been calculated in
accordance with guidance issued by the European Public Real Estate
Association ("EPRA").
The adjustments to the net asset value comprise the amounts
relating to the Group and its share of joint ventures.
24. Related Party Transactions
At 30 September 2017, 30 September 2016 and 31 March 2017 the
following amounts were due from the Group's joint ventures.
At
At At 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
------------------------------------------- ------------------ ------------------ ---------
King Street Developments (Hammersmith) Ltd 9,923 6,818 8,162
Shirley Advance LLP 509 11,688 503
Barts Square companies (13) - (13)
Helical Sosnica Sp. zoo 1,104 1,112 1,126
Old Street Holdings LP 3 169 3
Creechurch Place Ltd 16,797 14,267 15,883
------------------------------------------- ------------------ ------------------ ---------
25. See-Through Analysis
Helical holds a significant proportion of its property assets in
joint ventures with partners that provide the majority of the
equity required to purchase the assets, whilst relying on the Group
to provide asset management or development expertise. Accounting
convention requires Helical to account under IFRS for our share of
the net results and net assets of joint ventures in limited detail
in the income statement and balance sheet. Net asset value per
share, a key performance measure used in the real estate industry,
as reported in the financial statements under IFRS, does not
provide shareholders with the most relevant information on the fair
value of assets and liabilities within an ongoing real estate
company with a long term investment strategy.
This analysis incorporates the separate components of the
results of the consolidated subsidiaries and Helical's share of its
joint ventures' results into a 'see-through' analysis of our
property portfolio, debt profile and the associated income streams
and financing costs, to assist in providing a comprehensive
overview of the Group's activities.
See-Through Net Rental Income
Helical's share of the gross rental income, head rents payable
and property overheads from property assets held in subsidiaries
and in joint ventures are shown in the table below.
Half Year to Half Year to Year to
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
---------------------------------------------------- ------------------- ------------- ------------- ---------
Gross rental income - subsidiaries 20,178 25,531 48,835
- joint ventures 5 794 931
------------------- ------------- ------------- ---------
Total gross rental income 20,183 26,325 49,766
Rents payable - subsidiaries (83) (17) (68)
Property overheads - subsidiaries (1,991) (1,378) (2,283)
- joint ventures (164) (90) (100)
Net rental income attributable to profit share partner (67) (225) (322)
------------------------------------------------------ ----------------- ------------- ------------- ---------
See-through net rental income 17,878 24,615 46,993
----------------------------------------------------- ------------------ ------------- ------------- ---------
See-Through Net Development (Losses)/Profits
Helical's share of development (losses)/profits from property
assets held in subsidiaries and in joint ventures are shown in the
table below.
Half Year to Half Year to Year to
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
-------------------------------------------- ------------- ------------- ---------
In parent and subsidiaries 1,935 3,886 7,143
In joint ventures 1,367 116 (35)
-------------------------------------------- ------------- ------------- ---------
Total gross development profit 3,302 4,002 7,108
Provision against stock - subsidiaries (11,455) (3,969) (6,300)
- joint ventures - (2,668) (6,524)
------------------------------------------- ------------- ------------- ---------
See-through development (losses)/profits (8,153) (2,635) (5,716)
-------------------------------------------- ------------- ------------- ---------
See-Through Net Gain on Sale and Revaluation of Investment
Properties
Helical's share of the net gain on the sale and revaluation of
investment properties held in subsidiaries and joint ventures are
shown in the table below.
Half Year to Half Year to Year to
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
----------------------------------------------------- ------------------ ------------- ------------- ---------
Revaluation surplus on investment properties - subsidiaries 2,145 29,141 39,152
- joint ventures 2,331 (510) (1,875)
------------------------------------------------------------------------ ------------- ------------- ---------
Total revaluation surplus 4,476 28,631 37,277
Net gain/(loss) on sale of investment properties - subsidiaries 1,225 (2,788) 1,391
- joint ventures - (8) (54)
------------------------------------------------------------------------ ------------- ------------- ---------
Total net gain/(loss) on sale of investment properties 1,225 (2,796) 1,337
------------------------------------------------------------------------- ------------- ------------- ---------
See-through net gain on sale and revaluation of investment properties 5,701 25,835 38,614
------------------------------------------------------------------------- ------------- ------------- ---------
See-Through Net Finance Costs
Helical's share of the interest payable, finance charges,
capitalised interest and interest receivable on bank borrowings and
cash deposits in subsidiaries and in joint ventures are shown in
the table below.
Half Year to Half Year to Year to
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
---------------------------------------------- ----------------- ------------- ------------- ---------
Interest payable on bank loans and overdrafts - subsidiaries 14,471 14,923 28,586
- joint ventures 709 105 2
---------------------------------------------------------------- ------------- ------------- ---------
Total interest payable on bank loans and overdrafts 15,180 15,028 28,588
Other interest payable and similar charges - subsidiaries 2,353 2,520 4,913
Interest capitalised - subsidiaries (3,448) (3,494) (7,901)
---------------------------------------------- ----------------- ------------- ------------- ---------
Total finance costs 14,085 14,054 25,600
Interest receivable and similar income - subsidiaries (1,154) (1,199) (3,156)
- joint ventures (5) (1,141) (1,233)
---------------------------------------------------------------- ------------- ------------- ---------
See-through net finance costs 12,926 11,714 21,211
----------------------------------------------------------------- ------------- ------------- ---------
See-Through Property Portfolio
Helical's share of the investment, trading and development
property portfolio in subsidiaries and joint ventures are shown in
the table below.
At
At At 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
--------------------------------------------- ------------------ ------------------ ---------
Investment property - subsidiaries 979,546 1,046,010 1,003,000
- joint ventures 19,995 12,833 13,907
------------------ ------------------ ------------------ ---------
Total investment property 999,541 1,058,843 1,016,907
Trading and development stock - subsidiaries 95,476 88,294 86,680
- joint ventures 103,888 88,831 89,115
------------------ ------------------ ------------------ ---------
Total trading and development stock 199,364 177,125 175,795
Trading and development stock surplus - subsidiaries 943 6,573 5,014
- joint ventures 11,000 7,000 7,500
------------------ ------------------ ------------------ ---------
Total trading and development stock surpluses 11,943 13,573 12,514
------------------ ------------------ ---------
Total trading and development stock at fair
value 211,307 190,698 188,309
---------------------------------------------- ------------------ ------------------ ---------
See-through property portfolio 1,210,848 1,249,541 1,205,216
------------------ ------------------ ---------
See-Through Net Borrowings
Helical's share of borrowings and cash deposits in parent and
subsidiaries and joint ventures are shown in the table below.
At At
30 September At 31 March
2017 30 September 2016 2017
GBP000 GBP000 GBP000
Gross borrowings less than one year - subsidiaries 4,133 901 2,517
Gross borrowings more than one year - subsidiaries 657,410 685,404 671,184
------------- ------------------ ---------
Total 661,543 686,305 673,701
------------- ------------------ ---------
Gross borrowings less than one year - joint ventures - - -
Gross borrowings more than one year - joint ventures 70,282 42,613 55,282
------------- ------------------ ---------
Total 70,282 42,613 55,282
------------- ------------------ ---------
Cash and cash equivalents - subsidiaries (104,341) (52,945) (99,262)
- joint ventures (8,056) (11,690) (9,745)
------------- ------------------ ---------
See-through net borrowings 619,428 664,283 619,976
------------------------------------------------------- ------------- ------------------ ---------
See-Through Net Operating Income
Year to
Half year to Half year to 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
--------------------------------------------- ------------------ ------------------ ---------
Net rental income 17,878 24,615 46,993
Development profits (before provisions) 3,302 4,002 7,108
Gain/(loss) on sale of investment properties 1,225 (2,796) 1,337
--------------------------------------------- ------------------ ------------------ ---------
Net operating income 22,405 25,821 55,438
--------------------------------------------- ------------------ ------------------ ---------
26. See-Through Interest Cover, Gearing and Loan to Value
At
At At 31 March
30 September 2017 30 September 2016 2017
GBP000 GBP000 GBP000
Interest cover 1.7x 2.2x 2.6x
Gearing 121% 131% 120%
Loan to value 51% 53% 51%
--------------- ------------------ ------------------ ---------
27. Capital Commitments
The Group has a commitment of GBP51,868,000 (30 September 2016:
GBP131,085,000, 31 March 2017: GBP69,830,000) in relation to
construction contracts, which are due to be completed in the period
to March 2020. Of the total, GBP4,015,000 relates to the Group's
investment property portfolio and GBP10,614,000 are in relation to
the Group's residential scheme at Barts Square.
28. Post Balance Sheet Events
Since the period end, the Group has sold, an investment
property, C-Space EC1, for GBP74.0m and its Retirement Village
portfolio for GBP101.5m.
HELICAL PLC
Registered in England and Wales No. 156663
Registered Office:
5 Hanover Square
London
W1S 1HQ
T: 020 7629 0113
F: 020 7408 1666
E: reception@helical.co.uk
www.helical.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR MMMMMGKKGNZG
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November 15, 2017 02:01 ET (07:01 GMT)
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