25 November 2020
Circle Property Plc
Interim Results for the six months ended 30 September 2020
Strong average rent collection of 92.5% during period
Circle Property Plc (AIM:CRC) ("Circle", the "Company" or the "Group"), which invests in, develops and actively manages well-located regional office assets, announces its interim results for the six months ended 30 September 2020.
John Arnold, Chief Executive of Circle Property Plc, said:
"During the period, we have continued to benefit from our innovative approach and close relationships with our tenants, which has resulted in very strong rent collection rates of over 90% and a 10% increase in total rental income.
"We believe that demand, particularly in good locations in the regions, will rebound after a short-term contraction as a result of Covid-19. The established position we have in our chosen markets, with a portfolio of assets selected on the strength of location and letting prospects, leaves us well-placed to generate income and value over the medium term."
Financial highlights:
· Strong rental receipts throughout the year and since lockdown in March, running at an average of 92.5% of rents due for March and June quarters
· 10% increase in total rental income to £3.9m (30 September 2019: £3.6m)
· 12% increase in operating profit before property revaluations to £2.7m (30 September 2019: £2.4m)
· Unaudited estimated NAV per share of £2.83 (30 September 2019: £2.78; 31 March 2020: £2.85 per share), representing a 90% increase since admission to AIM in February 2016
· Proposed interim dividend of 2.5p per share for the six months ended 30 September 2020 (30 September 2019: 3.3p)
Chief Executive Statement
Despite the recent impact of the second lockdown, which saw a further decrease in demand within the wider commercial office market, we have seen the benefits of the quality of our assets and our long-term experience in actively managing them, evidenced through our strong rental collection. We work hard to identify high calibre tenants unlikely to default prior to leasing with them, meaning that our rental income is robust even in the current climate.
During the period to 30 September 2020, it has been pleasing that we have continued to let space, in this case to two new tenants, demonstrating that we remain able to build value and generate additional income. At Elizabeth House, London Road, Staines, DES Group have taken a 5-year lease with a break at the third year on the first floor at £32,500 p.a (£20.95 psf) and at Park House, Pavilion Drive, Northampton, NAK Consulting have taken a 10-year lease (with a 5-year break clause) at £34,000 p.a. on 2,373 sq ft (£14.33 psf).
It is the Board's view that further implemented lockdowns and the requirement to work from home, will lead to a rising number of commercial property tenants exercising break options across the market. Some businesses are downsizing as a result of more staff working from home on a permanent or part time basis. We have seen evidence of this in two small lettings within our portfolio but have worked with them to secure smaller suites, demonstrating our ability to actively manage the asset base.
As reported previously, we are of the view that working from home will, in the medium term, prove to be unpopular and more unproductive, and that offices will prove their worth when there is a return to something like normality. In the meantime, the recent news about the roll-out of Covid-19 vaccines is encouraging, yet it remains difficult to call when we may see a significant improvement in occupational demand.
Whilst the general market backdrop is challenging, we are seeing the predominant take-up of vacant offices being for those that are fully-fitted, either by virtue of the previous tenant having vacated, or because the landlord has undertaken a category B fit-out, specifically to encourage tenants that do not want to commit to that capital expense.
In order to respond to this shifting demand for 'plug and play' offices that are ready to move into, with telephony and broadband already connected, we are undertaking fit-outs of our vacant offices in Bristol (One Castlepark - 7,000 sq ft), Birmingham (36 Great Charles Street - 2,341 sq ft) and Maidenhead (6,400 sq ft). It is anticipated that these projects, together with the redevelopment of 135 Aztec West, Bristol when pre-let, will account for approximately £2 million of our working capital. Again, our ability to adapt and flex around tenant requirements continues to serve us well.
As reported in our Final Results in September 2020, we remain committed to reduce gearing from the current level by opportunistic sales. We have a number of assets that have benefited from our active management approach and added value following redevelopment, lease restructures or renewals which we expect to be highly sought after.
The Board declares an interim dividend of 2.5p, which will be paid on 8 January 2021 to shareholders on the register on 4 December 2020, with an ex-dividend date of 3 December 2020.
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
Enquiries:
Circle Property Plc | +44 (0)20 7930 8503 |
John Arnold, CEO Edward Olins, COO
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Cenkos Securities plc | +44 (0)20 7397 8900 |
Katy Birkin Mark Connelly
Radnor Capital Joshua Cryer Iain Daly
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+44 (0)20 3897 1830 |
Camarco | +44 (0)20 3757 4992 |
Ginny Pulbrook Oliver Head |
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About Circle Property Plc
Circle is amongst the best performing quoted UK real estate companies by NAV total return (NAV growth and dividend) having delivered consistent returns with 101% NAV growth since IPO in 2016 in absolute terms.
Circle focusses on acquiring assets in regional cities, many of which have significant office supply constraints, and on office assets with active management potential (refurbishment opportunities, under-rented or vacant properties or short leases), rather than just maximising initial rental yields.
Circle is not a Real Estate Investment Trust (REIT) and can actively recycle proceeds from asset sales into its refurbishment and redevelopment pipeline, as well as future investment opportunities, therefore targeting a broader range of returns for shareholders, which are primarily driven by NAV growth.
Condensed consolidated statement of comprehensive income |
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for the 6 months ended 30 September 2020 |
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| 6 months to |
| 6 months to |
| 12 months to |
| Note |
| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Rental income | 4 |
| 3,919,307 |
| 3,563,322 |
| 7,497,212 |
Other income | 4 |
| 1,010,022 |
| 786,923 |
| 2,116,400 |
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| 4,929,329 |
| 4,350,245 |
| 9,613,612 |
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Property expenses | 5 |
| (1,269,188) |
| (970,723) |
| (2,374,556) |
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Net rental income |
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| 3,660,141 |
| 3,379,522 |
| 7,239,056 |
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Administrative expenses | 6 |
| (978,840) |
| (982,058) |
| (2,944,109) |
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Operating profit before gain/(loss) on investment properties |
| 2,681,301 |
| 2,397,464 |
| 4,294,947 | |
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(Loss)/Gain on disposal of investment properties |
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| - |
| (44,331) |
| 235,729 |
(Loss)/Gain on revaluation of investment properties | 11 |
| (2,534,903) |
| (390,279) |
| 2,514,049 |
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Operating profit |
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| 146,398 |
| 1,962,854 |
| 7,044,725 |
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Finance income | 7 |
| 2,083 |
| 1,679 |
| 1,531 |
Finance costs | 8 |
| (884,516) |
| (858,920) |
| (1,885,340) |
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Net finance costs |
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| (882,433) |
| (857,241) |
| (1,883,809) |
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Profit for the period before taxation |
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| (736,035) |
| 1,105,613 |
| 5,160,916 |
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Taxation | 9 |
| 113,714 |
| 145,074 |
| (1,641,410) |
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Profit after taxation |
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| (622,321) |
| 1,250,687 |
| 3,519,506 |
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Earnings per share | 10 |
| (0.02) |
| 0.04 |
| 0.12 |
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NAV per share |
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| 2.83 |
| 2.78 |
| 2.85 |
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There is no comprehensive income other than that included in the profit for the period. All of the profit for the period is attributable to the owners of the Company. | |||||||
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All items in the above statement derive from continuing operations. |
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Condensed consolidated statement of financial position |
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as at 30 September 2020 |
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| Note |
| 30 September 2020 |
| 30 September 2019 |
| 31 March |
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| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
Non-current assets |
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Investment properties | 11 |
| 127,111,883 |
| 126,146,508 |
| 129,340,408 |
Right of use assets |
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| 84,540 |
| - |
| 108,043 |
Property plant and equipment |
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| 55,118 |
| 55,035 |
| 62,263 |
Lease incentives | 12 |
| 10,128,672 |
| 8,546,628 |
| 9,562,066 |
Deferred tax asset |
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| 1,298,659 |
| 1,941,676 |
| 1,078,007 |
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| 138,678,872 |
| 136,689,847 |
| 140,150,787 |
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Current assets |
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Trade and other receivables | 12 |
| 2,683,828 |
| 1,811,350 |
| 2,398,119 |
Cash and cash equivalents |
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| 4,543,692 |
| 2,359,771 |
| 2,980,329 |
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| 7,227,520 |
| 4,171,121 |
| 5,378,448 |
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Total assets |
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| 145,906,392 |
| 140,860,968 |
| 145,529,235 |
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Equity |
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Stated capital |
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| 42,542,179 |
| 42,542,179 |
| 42,542,179 |
Treasury share reserve |
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| 668,456 |
| (79,344) |
| 516,048 |
Retained earnings |
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| 37,000,805 |
| 36,288,100 |
| 37,623,126 |
Total equity |
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| 80,211,440 |
| 78,750,935 |
| 80,681,353 |
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Non-current liabilities |
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Borrowings | 13 |
| 61,822,537 |
| 59,391,252 |
| 60,721,840 |
Lease liabilities for right of use assets |
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| 47,504 |
| - |
| 69,327 |
Deferred tax liability |
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| 768,913 |
| - |
| 877,401 |
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| 62,638,954 |
| 59,391,252 |
| 61,668,568 |
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Current liabilities |
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Trade and other payables | 14 |
| 3,011,500 |
| 2,718,781 |
| 3,134,816 |
Lease liabilities for right of use assets |
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| 44,498 |
| - |
| 44,498 |
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| 3,055,998 |
| 2,718,781 |
| 3,179,314 |
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Total liabilities |
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| 65,694,952 |
| 62,110,033 |
| 64,847,882 |
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Total liabilities and equity |
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| 145,906,392 |
| 140,860,968 |
| 145,529,235 |
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The condensed consolidated interim financial statements were approved by the Board of Directors on 24 November 2020. |
Condensed consolidated statement of changes in equity |
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for the 6 months ended 30 September 2020 |
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| Share |
| Treasury shares reserve |
| Retained earnings |
| Total |
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| £ |
| £ |
| £ |
| £ |
As at 1 April 2019 |
| 42,542,179 |
| (79,344) |
| 35,971,206 |
| 78,434,041 |
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Profit for the period |
| - |
| - |
| 1,250,687 |
| 1,250,687 |
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Dividends |
| - |
| - |
| (933,793) |
| (933,793) |
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As at 30 September 2019 |
| 42,542,179 |
| (79,344) |
| 36,288,100 |
| 78,750,935 |
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Profit for the period |
| - |
| - |
| 2,268,819 |
| 2,268,819 |
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Share-based payments |
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| 595,392 |
| - |
| 595,392 |
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Dividends |
| - |
| - |
| (933,793) |
| (933,793) |
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As at 31 March 2020 |
| 42,542,179 |
| 516,048 |
| 37,623,126 |
| 80,681,353 |
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Profit for the period |
| - |
| - |
| (622,321) |
| (622,321) |
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Share-based payments |
| - |
| 152,408 |
| - |
| 152,408 |
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As at 30 September 2020 |
| 42,542,179 |
| 668,456 |
| 37,000,805 |
| 80,211,440 |
Condensed consolidated statement of cash flows |
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for the 6 months ended 30 September 2020 |
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| 6 months to |
| 6 months to |
| 12 months to |
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| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Cash flows from operating activities |
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(Loss)/profit for the period before taxation |
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| (736,035) |
| 1,105,613 |
| 5,160,916 | |
Adjustments for: |
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Finance income |
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| (2,083) |
| (1,679) |
| (1,531) | |
Finance expense |
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| 884,516 |
| 858,920 |
| 1,885,340 | |
Depreciation |
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| 7,145 |
| 5,443 |
| 11,744 | |
Amortisation of right of use assets |
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| 23,502 |
| - |
| 47,005 | |
Loss/(gain) on revaluation of investment properties |
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| 2,534,903 |
| 390,279 |
| (2,466,035) | |
Loss/(gain) on disposal of investment properties |
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| - |
| 44,331 |
| (235,729) | |
Share based payments |
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| 152,408 |
| - |
| 595,392 | |
Increase in trade and other receivables |
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| (852,315) |
| (493,376) |
| (2,095,583) | |
Decrease in trade and other payables |
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| (138,347) |
| (653,810) |
| (179,700) | |
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Cash generated from operating activities |
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| 1,873,694 |
| 1,255,721 |
| 2,721,819 | |
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Interest and other finance costs paid |
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| (858,649) |
| (613,803) |
| (1,510,806) | |
Interest received |
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| 2,083 |
| 1,679 |
| 1,531 | |
Taxation paid |
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| (116,773) |
| - |
| (189,154) | |
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Net cash from operating activities |
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| 900,355 |
| 643,597 |
| 1,023,390 | |
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Cash flows from investing activities |
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Cost of refurbishment of investment properties |
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| (311,312) |
| (404,189) |
| (1,977,597) | |
Cost of acquisition of investment property |
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| - |
| (15,412,420) |
| (15,412,420) | |
Proceeds from disposal of investment properties |
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| - |
| 4,555,671 |
| 6,135,729 | |
Cost of additions of property plant and equipment |
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| - |
| (615) |
| (14,143) | |
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Net cash from investing activities |
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| (311,312) |
| (11,261,553) |
| (11,268,431) | |
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Cash flows from financing activities |
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Repayment of borrowings |
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| - |
| - |
| (2,530,000) | |
Payment of lease liabilities |
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| (25,680) |
| - |
| (51,360) | |
Drawdown of borrowings |
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| 1,000,000 |
| 10,261,148 |
| 14,023,944 | |
Dividends paid |
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| - |
| (933,793) |
| (1,867,586) | |
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Net cash used in financing activities |
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| 974,320 |
| 9,327,355 |
| 9,574,998 | |
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Net increase/(decrease) in cash and cash equivalents |
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| 1,563,363 |
| (1,290,601) |
| (670,043) | |
Cash and cash equivalents at the beginning of the period |
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| 2,980,329 |
| 3,650,372 |
| 3,650,372 | |
Cash and cash equivalents at the end of the period |
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| 4,543,692 |
| 2,359,771 |
| 2,980,329 |
Notes to the condensed consolidated interim financial statements |
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for the 6 months ended 30 September 2020 |
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1 General information |
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These condensed consolidated interim financial statements are for Circle Property Plc ("the Company") and its subsidiary undertakings (together referred to as the "Group"). | |||||||
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The Company's shares are admitted to trading on AIM, a market operated by the London Stock Exchange plc. The Company is domiciled and registered in Jersey, Channel Islands. The address of its registered office is 3rd Floor, Standard Bank House, 47-49 La Motte Street, St Helier, Jersey, JE2 4SZ. | |||||||
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The nature of the Company's operations and its principal activities are that of property investment in the UK. | |||||||
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2 Principal accounting policies |
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Basis of accounting |
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The condensed consolidated interim financial statements have been prepared in accordance with the IAS 34 "Interim Financial Reporting" and should be read in conjunction with the Group's last consolidated financial statements as at and for the year ended 31 March 2020. They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last financial statements. | |||||||
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Going concern |
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The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chief Executive's statement. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in these financial statements. | |||||||
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The Directors have assessed the Group's ability to continue as a going concern, including an assessment of the impact of Covid-19. In making their assessment the Directors have modelled the Group's cash forecasts based on the circumstances of each tenant on an individual basis. Rental collections have been monitored on a weekly basis with ongoing communication with tenants in respect of the collection of rental arrears. Loan covenants have been stress tested taking into consideration a potential reduction in the valuation of the Group's property portfolio. | |||||||
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Based on these considerations the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they have adopted the going concern basis in preparing the financial statements. | |||||||
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Estimates and judgements |
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In preparing these condensed consolidated interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. | |||||||
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The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 March 2020. | |||||||
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3 Operating segments |
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During the period the Group operated in one geographical segment, which is the United Kingdom, and one reporting segment, which is investment in commercial property. Therefore, no segmental reporting is required. | |||||||
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4 Revenue |
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| 6 months to |
| 6 months to |
| 12 months to |
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| (unaudited) |
| (unaudited) |
| (audited) |
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| £ |
| £ |
| £ |
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Rental income |
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| 3,290,782 |
| 3,339,652 |
| 6,715,456 |
Lease incentive adjustment |
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| 628,525 |
| 223,670 |
| 781,756 |
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| 3,919,307 |
| 3,563,322 |
| 7,497,212 |
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Insurance recovery |
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| 71,130 |
| 72,286 |
| 144,874 |
Service charge income |
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| 856,174 |
| 681,637 |
| 1,697,533 |
Dilapidation monies |
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| 82,718 |
| 33,000 |
| 273,993 |
|
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| 1,010,022 |
| 786,923 |
| 2,116,400 |
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| 4,929,329 |
| 4,350,245 |
| 9,613,612 |
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|
|
|
|
5 Property expenses |
|
| 6 months to |
| 6 months to |
| 12 months to |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
Property expenses |
|
| 6,729 |
| 11,504 |
| 28,331 |
Property service charges |
|
| 158,495 |
| 83,437 |
| 246,737 |
Property repairs and maintenance costs |
|
| 89,832 |
| 8,753 |
| 59,260 |
Property insurance |
|
| 79,630 |
| 76,483 |
| 166,995 |
Property rates |
|
| 78,328 |
| 108,909 |
| 175,700 |
Recoverable service charge costs |
|
| 856,174 |
| 681,637 |
| 1,697,533 |
|
|
|
|
|
|
|
|
|
|
| 1,269,188 |
| 970,723 |
| 2,374,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Administrative expenses |
|
| 6 months to |
| 6 months to |
| 12 months to |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
Staff costs |
|
| 536,032 |
| 384,712 |
| 1,593,790 |
Administration fees |
|
| 152,311 |
| 153,189 |
| 305,250 |
Legal and professional fees |
|
| 214,488 |
| 344,413 |
| 749,233 |
Audit fees |
|
| - |
| 1,928 |
| 62,673 |
Accountancy fees |
|
| 3,484 |
| 2,105 |
| 7,778 |
Rent, rates and other office costs |
|
| 24,891 |
| 49,981 |
| 26,334 |
Other overheads |
|
| 16,987 |
| 40,287 |
| 140,303 |
Depreciation of tangible fixed assets |
|
| 7,145 |
| 5,443 |
| 11,744 |
Amortisation of right of use assets |
|
| 23,502 |
| - |
| 47,004 |
|
|
|
|
|
|
|
|
|
|
| 978,840 |
| 982,058 |
| 2,944,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7 Finance income |
|
| 6 months to |
| 6 months to |
| 12 months to |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
Bank interest |
|
| 2,083 |
| 1,679 |
| 1,531 |
|
|
|
|
|
|
|
|
|
|
| 2,083 |
| 1,679 |
| 1,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8 Finance costs |
|
| 6 months to |
| 6 months to |
| 12 months to |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
Loan interest |
|
| 767,484 |
| 732,280 |
| 1,592,948 |
Loan commitment fees |
|
| 12,479 |
| 36,217 |
| 49,039 |
Amortisation of lending costs |
|
| 100,697 |
| 90,423 |
| 188,215 |
Annual agency fee |
|
| - |
| - |
| 45,000 |
Interest on lease liabilities |
|
| 3,856 |
| - |
| 10,138 |
|
|
|
|
|
|
|
|
|
|
| 884,516 |
| 858,920 |
| 1,885,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9 Taxation |
|
| 6 months to |
| 6 months to |
| 12 months to |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
Current tax |
|
| 215,426 |
| 192,684 |
| 238,098 |
Deferred tax (credit) / charge |
|
| (329,140) |
| (337,758) |
| 1,403,312 |
|
|
|
|
|
|
|
|
|
|
| (113,714) |
| (145,074) |
| 1,641,410 |
|
|
|
|
|
|
|
|
10 Earnings/loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings/loss per share has been calculated on profit/loss after tax attributable to ordinary shareholders for the period (as shown on the condensed consolidated statement of comprehensive income) and the weighted average number of ordinary shares in issue during the period.
| |||||||
|
|
| 6 months to |
| 6 months to |
| 12 months to |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
Profit/(loss) for the period |
|
| (622,321) |
| 1,250,687 |
| 3,519,506 |
|
|
|
|
|
|
|
|
Weighted average number of shares |
|
| 28,296,762 |
| 28,296,762 |
| 28,296,792 |
|
|
|
|
|
|
|
|
Earnings/(loss) per ordinary share: |
|
| (0.02) |
| 0.04 |
| 0.12 |
|
|
|
|
|
|
|
|
In the opinion of the Board, treasury shares held to satisfy share awards to management currently do not have any material value and hence do not have any dilutive effect. Therefore no diluted earnings/(loss) per share has been presented. | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11 Investment properties |
|
| 30 September 2020 |
| 30 September 2019 |
| 31 March 2020 |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
Balance brought forward |
|
| 139,450,000 |
| 124,600,000 |
| 124,600,000 |
Cost of refurbishment of investment properties |
|
| 306,378 |
| 404,189 |
| 2,041,775 |
Cost of acquisition of investment property |
|
| - |
| 15,412,420 |
| 15,412,420 |
Disposal of investment properties |
|
| - |
| (4,600,000) |
| (5,900,000) |
(Loss)/Gain on revaluation of investment properties |
|
| (2,534,903) |
| (390,279) |
| 2,514,049 |
Lease incentive amortisation |
|
| 628,525 |
| 223,670 |
| 781,756 |
|
|
|
|
|
|
|
|
Fair value of investment properties per valuation report |
| 137,850,000 |
| 135,650,000 |
| 139,450,000 | |
|
|
|
|
|
|
|
|
Unamortised lease incentives |
|
| (10,738,117) |
| (9,503,492) |
| (10,109,592) |
|
|
|
|
|
|
|
|
Closing fair value |
|
| 127,111,883 |
| 126,146,508 |
| 129,340,408 |
|
|
|
|
|
|
|
|
The fair value of the Group's investment properties at 30 September 2020 has been arrived at on the basis of valuation carried out by Savills (UK) Limited. The valuation was carried out in accordance with the Practice Statements contained in the Appraisal and Valuation Standards as published by the RICS. In forming their opinion of the fair value, the independent valuers had regard to the current best use of the property, its investment attributes and recent comparable transactions. The valuation was carried out using the "All Risks Yield" method taking into consideration both sales and rental evidence and formulating the opinion of market value taking into account the properties' locations, specifications and specific characteristics. | |||||||
|
|
|
|
|
|
|
|
At 30 September 2020, the fair value of the Group's investment properties per the valuation report amounted to £137,850,000. This valuation takes into account the impact of Covid-19 and the Company's valuers' inclusion of a 'material uncertainty clause' on the independent valuations (in accordance with VPS3 and VPGA 10 of the RICS valuation - Global Standards). The difference between the fair value of the investment properties per the valuation report and the fair value per the balance sheet of £10,738,117 relates to unamortised lease incentives which are recorded in the financial statements within non-current and current assets. | |||||||
|
|
|
|
|
|
|
|
The Group has pledged all of its investment properties to secure banking facilities granted to the Group as detailed in note 13. | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Trade and other receivables |
|
| 30 September 2020 |
| 30 September 2019 |
| 31 March 2020 |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
Non-current |
|
|
|
|
|
|
|
Lease incentives |
|
| 10,128,672 |
| 8,546,628 |
| 9,562,066 |
|
|
|
|
|
|
|
|
Current |
|
|
|
|
|
|
|
Lease incentives |
|
| 609,445 |
| 956,864 |
| 547,526 |
Amounts due from property agents |
|
| 532,692 |
| 15,391 |
| 405,794 |
Amounts due from tenants |
|
| 1,124,020 |
| 602,316 |
| 888,529 |
Tenant deposits |
|
| 271,017 |
| 88,152 |
| 293,334 |
Other receivables |
|
| 146,654 |
| 148,627 |
| 262,936 |
|
|
|
|
|
|
|
|
|
|
| 2,683,828 |
| 1,811,350 |
| 2,398,119 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Borrowings |
|
| 30 September 2020 |
| 30 September 2019 |
| 31 March 2020 |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
Brought forward |
|
| 60,721,840 |
| 49,738,852 |
| 49,039,681 |
Loan repayments |
|
| - |
| - |
| (2,530,000) |
Loan drawdowns |
|
| 1,000,000 |
| 10,261,148 |
| 14,091,148 |
Lending costs |
|
| - |
| (721,900) |
| (67,204) |
Amortisation of lending costs |
|
| 100,697 |
| 113,152 |
| 188,215 |
|
|
|
|
|
|
|
|
Total borrowings |
|
| 61,822,537 |
| 59,391,252 |
| 60,721,840 |
|
|
|
|
|
|
|
|
The Group is party to a revolving facility, with NatWest and HSBC. The facility is a £60,000,000 revolving facility with an accordion option of up to £40,000,000, of which £5,000,000 had been committed at the period end. The facility has a four-year term, repayable on 13 February 2023. The rate of interest is the aggregate of the margin 2.05% and LIBOR and is payable quarterly. A commitment fee is payable at a rate of 0.82% on the undrawn facility and in relation to the accordion facility. | |||||||
|
|
|
|
|
|
|
|
The Group paid an arrangement fee of 0.875% for the facility, which along with other costs of arranging the facility including legal costs have been amortised and will be written off over the 4-year term. | |||||||
|
|
|
|
|
|
|
|
The facility is secured by a first and only legal charge over the Group's investment properties, an assignment of rental income, charges over specified bank accounts of the Group and a floating charge granted over all assets of the Group. | |||||||
|
|
|
|
|
|
|
|
The facility's financial covenants are 60% loan to value, 2.00:1 interest cover looking both forward and backward, the Group shall ensure that the total market value of the charged properties does not fall below £50,000,000 at any time and that no single tenant represents more than 25% of the total contracted rents. | |||||||
|
|
|
|
|
|
|
|
At 30 September 2020, £62,300,000 of the total facility had been drawn down. The undrawn facility was £2,700,000. | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14 Trade and other payables |
|
| 30 September 2020 |
| 30 September 2019 |
| 31 March 2020 |
|
|
| (unaudited) |
| (unaudited) |
| (audited) |
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
Trade payables |
|
| 26,782 |
| 39,698 |
| 79,009 |
Property improvement costs |
|
| 59,242 |
| - |
| 64,178 |
Wages and salaries |
|
| 27,902 |
| - |
| 235,408 |
Deferred income |
|
| 1,749,920 |
| 1,611,306 |
| 1,603,989 |
Rental deposit accounts |
|
| 271,017 |
| 92,546 |
| 295,787 |
Finance costs |
|
| 285,834 |
| 343,033 |
| 364,520 |
VAT |
|
| 257,742 |
| 257,413 |
| 186,444 |
Valuation fee |
|
| 18,000 |
| 15,000 |
| 28,000 |
Audit fee |
|
| - |
| - |
| 60,745 |
Administration fees |
|
| 363 |
| - |
| 691 |
Current taxation |
|
| 314,698 |
| 359,785 |
| 216,045 |
|
|
|
|
|
|
|
|
|
|
| 3,011,500 |
| 2,718,781 |
| 3,134,816 |
|
|
|
|
|
|
|
|
15 Subsequent events |
|
|
|
|
|
|
|
There are no material subsequent events requiring adjustment or disclosure in the financial statements. |
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