Condensed consolidated interim statement of cashflows

for the six months ended 30 June 2020

Notes (Unaudited)

for the six months ended 30 June 2020

1. Nature of operations and general information

Highcroft Investments PLC ('Highcroft' or 'company') and its subsidiaries' (together 'the group') principal activity is investment in property. It is incorporated and domiciled in Great Britain. The address of Highcroft's registered office, which is also its principal place of business, is Thomas House, Langford Locks, Kidlington, OX5 1HR. Highcroft's condensed consolidated interim financial statements are presented in Pounds Sterling (£), which is also the functional currency of the group. These condensed consolidated interim financial statements have been approved for issue by the directors on 2 September 2020. The financial information for the period ended 30 June 2020 set out in this interim report does not constitute statutory accounts as defined in Section 404 of the Companies Act 2006. The group's statutory financial statements for the year ended 31 December 2019 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Section 498(2) or Section 498(5) of the Companies Act 2006.

2. Basis of preparation

These condensed consolidated interim financial statements are for the six months ended 30 June 2020. They have been prepared in accordance with IAS 34, Interim Financial Reporting. They 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 December 2019.

These condensed consolidated interim financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment properties and the measurement of equity investments at fair value. These condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2019.

The accounting policies have been applied consistently throughout the group for the purposes of preparation of these condensed consolidated interim financial statements.

The financial statements are drawn up on a going concern basis.  The directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future and consider that there are no material uncertainties that lead to significant doubt upon the group's ability to continue as a going concern.  Cash flow forecasts are prepared annually as part of the planning and budgeting process and are monitored and reworked regularly.  The group has fixed-term non-amortising borrowing and has additional headroom available. 

3. Segment reporting

The group has one main business segment - property.

In 2020 the largest tenant represented 11% (2019 9%) and the second largest tenant represented 7% (2019 7%) of gross commercial property income for the period.

4. Income tax credit/(charge)

The taxation charge has been based on the estimated effective tax rate for the full year. As a Real Estate Investment Trust the group does not pay corporation tax on its profits and gains from its property activities.

Notes (Unaudited) (continued)

for the six months ended 30 June 2020

5. Dividends

The following property income distributions have been paid by the company:

6. Earnings per share

The calculation of earnings per share is based on the loss for the period of £2,657,000 (2019 profit £1,129,000) and on 5,169,695 shares which is the weighted average number of shares in issue during the period ended 30 June 2020, (2019 5,167,240) .

In order to draw attention to the impact of valuation gains and losses which are included in the income statement but not available for distribution under the company's articles of association, an adjusted earnings per share based on the profit available for distribution of £1,858,000 (2019 £1,921,000) has been calculated.

Notes (Unaudited) (continued)

for the six months ended 30 June 2020

7. Investment property

The directors have used an external independent valuation of properties at 30 June 2020 which has been carried out consistently with the annual valuation.  The independent valuer, Knight Frank LLP, included a material uncertainty clause in their valuation reports relating to assets valued at £52,820,000, 64%, of the total valuation. This clause indicates that, due to the impact of COVID-19, less certainty, and a higher degree of caution, should be attached to the valuations of those assets to which the clause applies than would otherwise be the case.

8. Equity investments

9. Interest bearing loans

The debt is secured on certain assets within the group's property portfolio.  £2,500,000 of the amounts falling due within one year were re-financed on 3 July 2020 and a facility letter is in place to re-finance the remaining £1,500,000 on the maturity date in November 2020.

Notes (Unaudited) (continued)

for the six months ended 30 June 2020

10. Share capital

11. Related party transactions

Kingerlee Holdings Limited owns, through its wholly owned subsidiaries, 27.2% (2019 27.2%) of the company's shares and D H Kingerlee is a director of both the company and Kingerlee Holdings Limited.

During the period, the group made purchases from Kingerlee Limited, a subsidiary of Kingerlee Holdings Limited, being a service charge in relation to services at Thomas House, Kidlington of £7,000 (2019 £7,000) and a recharge of computer and courier costs totalling £nil (2019 £530). The amount owed at 30 June 2020 was £nil (2019 £nil). All transactions were undertaken on an arm's length basis.

12. Net assets per share

Statement of directors' responsibilities

The directors confirm that, to the best of their knowledge, this condensed consolidated set of half-year financial statements has been prepared in accordance with IAS 34. The half-year management report includes a fair review of the information required by 4.2.7 and 4.2.8 of the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority, namely:

·      an indication of the important events that have occurred during the first six months of the financial year ending 31 December 2020 and their impact on the condensed consolidated set of half-year financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·      disclosure of material related party transactions in the first six months of the financial year, and any material changes in the related party transactions described in the last annual report.

 A list of current directors is maintained on the Highcroft Investments PLC website: www.highcroftplc.com.

By order of the board.

Charles Butler

Chairman
2 September 2020