RNS Number : 3923G
Circle Property PLC
25 November 2020
 

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

 

 

 

 

 

Cenkos Securities plc

+44 (0)20 7397 8900

Katy Birkin

Mark Connelly

 

Radnor Capital

Joshua Cryer

Iain Daly

 

 

 

 

+44 (0)20 3897 1830

Camarco

+44 (0)20 3757 4992

Ginny Pulbrook

Oliver Head

 

 

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

 

 

 

 

for the 6 months ended 30 September 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6 months to
30 September
2020

6 months to
30 September
2019

12 months to
31 March
2020

 

Note

 

(unaudited)

 

(unaudited)

 

(audited)

 

 

 

£

 

£

 

£

 

 

 

 

 

 

 

 

Rental income

4

 

3,919,307

 

3,563,322

 

7,497,212

Other income

4

 

1,010,022

 

786,923

 

2,116,400

 

 

 

4,929,329

 

4,350,245

 

9,613,612

 

 

 

 

 

 

 

 

Property expenses

5

 

(1,269,188)

 

(970,723)

 

(2,374,556)

 

 

 

 

 

 

 

 

Net rental income

 

 

3,660,141

 

3,379,522

 

7,239,056

 

 

 

 

 

 

 

 

Administrative expenses

6

 

(978,840)

 

(982,058)

 

(2,944,109)

 

 

 

 

 

 

 

 

Operating profit before gain/(loss) on investment properties

 

2,681,301

 

2,397,464

 

4,294,947

 

 

 

 

 

 

 

 

(Loss)/Gain on disposal of investment properties

 

 

-

 

(44,331)

 

235,729

(Loss)/Gain on revaluation of investment properties

11

 

(2,534,903)

 

(390,279)

 

2,514,049

 

 

 

 

 

 

 

 

Operating profit

 

 

146,398

 

1,962,854

 

7,044,725

 

 

 

 

 

 

 

 

Finance income

7

 

2,083

 

1,679

 

1,531

Finance costs

8

 

(884,516)

 

(858,920)

 

(1,885,340)

 

 

 

 

 

 

 

 

Net finance costs

 

 

(882,433)

 

(857,241)

 

(1,883,809)

 

 

 

 

 

 

 

 

Profit for the period before taxation

 

 

(736,035)

 

1,105,613

 

5,160,916

 

 

 

 

 

 

 

 

Taxation

9

 

113,714

 

145,074

 

(1,641,410)

 

 

 

 

 

 

 

 

Profit after taxation

 

 

(622,321)

 

1,250,687

 

3,519,506

 

 

 

 

 

 

 

 

Earnings per share

10

 

(0.02)

 

0.04

 

0.12

 

 

 

 

 

 

 

 

NAV per share

 

 

2.83

 

2.78

 

2.85

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

All items in the above statement derive from continuing operations.

 

 

 

 

 

 

 

 

Condensed consolidated statement of financial position

 

 

 

 

as at 30 September 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note

 

30 September 2020

 

30 September 2019

 

31 March
2020

 

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

 

 

£

 

£

 

£

Non-current assets

 

 

 

 

 

 

 

Investment properties

11

 

127,111,883

 

126,146,508

 

129,340,408

Right of use assets

 

 

84,540

 

-

 

108,043

Property plant and equipment

 

 

55,118

 

55,035

 

62,263

Lease incentives

12

 

10,128,672

 

8,546,628

 

9,562,066

Deferred tax asset

 

 

1,298,659

 

1,941,676

 

1,078,007

 

 

 

138,678,872

 

136,689,847

 

140,150,787

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Trade and other receivables

12

 

2,683,828

 

1,811,350

 

2,398,119

Cash and cash equivalents

 

 

4,543,692

 

2,359,771

 

2,980,329

 

 

 

7,227,520

 

4,171,121

 

5,378,448

 

 

 

 

 

 

 

 

Total assets

 

 

145,906,392

 

140,860,968

 

145,529,235

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Stated capital

 

 

42,542,179

 

42,542,179

 

42,542,179

Treasury share reserve

 

 

668,456

 

(79,344)

 

516,048

Retained earnings

 

 

37,000,805

 

36,288,100

 

37,623,126

Total equity

 

 

80,211,440

 

78,750,935

 

80,681,353

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Borrowings

13

 

61,822,537

 

59,391,252

 

60,721,840

Lease liabilities for right of use assets

 

 

47,504

 

-

 

69,327

Deferred tax liability

 

 

768,913

 

-

 

877,401

 

 

 

62,638,954

 

59,391,252

 

61,668,568

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

14

 

3,011,500

 

2,718,781

 

3,134,816

Lease liabilities for right of use assets

 

 

44,498

 

-

 

44,498

 

 

 

3,055,998

 

2,718,781

 

3,179,314

 

 

 

 

 

 

 

 

Total liabilities

 

 

65,694,952

 

62,110,033

 

64,847,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

 

145,906,392

 

140,860,968

 

145,529,235

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The condensed consolidated interim financial statements were approved by the Board of Directors on 24 November 2020.

 

 

 

Condensed consolidated statement of changes in equity

 

 

 

 

for the 6 months ended 30 September 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share
capital

 

Treasury shares reserve

 

Retained earnings

 

Total

 

 

£

 

£

 

£

 

£

As at 1 April 2019

 

42,542,179

 

(79,344)

 

35,971,206

 

78,434,041

 

 

 

 

 

 

 

 

 

Profit for the period

 

-

 

-

 

1,250,687

 

1,250,687

 

 

 

 

 

 

 

 

 

Dividends

 

-

 

-

 

(933,793)

 

(933,793)

 

 

 

 

 

 

 

 

 

As at 30 September 2019

 

42,542,179

 

(79,344)

 

36,288,100

 

78,750,935

 

 

 

 

 

 

 

 

 

Profit for the period

 

-

 

-

 

2,268,819

 

2,268,819

 

 

 

 

 

 

 

 

 

Share-based payments

 

 

 

595,392

 

-

 

595,392

 

 

 

 

 

 

 

 

 

Dividends

 

-

 

-

 

(933,793)

 

(933,793)

 

 

 

 

 

 

 

 

 

As at 31 March 2020

 

42,542,179

 

516,048

 

37,623,126

 

80,681,353

 

 

 

 

 

 

 

 

 

Profit for the period

 

-

 

-

 

(622,321)

 

(622,321)

 

 

 

 

 

 

 

 

 

Share-based payments

 

-

 

152,408

 

-

 

152,408

 

 

 

 

 

 

 

 

 

As at 30 September 2020

 

42,542,179

 

668,456

 

37,000,805

 

80,211,440

 

Condensed consolidated statement of cash flows

 

 

 

 

 

 

for the 6 months ended 30 September 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6 months to
30 September
2020

 

6 months to
30 September
2019

 

12 months to
31 March
2020

 

 

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

 

 

 

£

 

£

 

£

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

(Loss)/profit for the period before taxation

 

 

(736,035)

 

1,105,613

 

5,160,916

Adjustments for:

 

 

 

 

 

 

 

Finance income

 

 

(2,083)

 

(1,679)

 

(1,531)

Finance expense

 

 

884,516

 

858,920

 

1,885,340

Depreciation

 

 

7,145

 

5,443

 

11,744

Amortisation of right of use assets

 

 

23,502

 

-

 

47,005

Loss/(gain) on revaluation of investment properties

 

 

2,534,903

 

390,279

 

(2,466,035)

Loss/(gain) on disposal of investment properties

 

 

-

 

44,331

 

(235,729)

Share based payments

 

 

152,408

 

-

 

595,392

Increase in trade and other receivables

 

 

(852,315)

 

(493,376)

 

(2,095,583)

Decrease in trade and other payables

 

 

(138,347)

 

(653,810)

 

(179,700)

 

 

 

 

 

 

 

 

 

Cash generated from operating activities

 

 

1,873,694

 

1,255,721

 

2,721,819

 

 

 

 

 

 

 

 

 

Interest and other finance costs paid

 

 

(858,649)

 

(613,803)

 

(1,510,806)

Interest received

 

 

2,083

 

1,679

 

1,531

Taxation paid

 

 

(116,773)

 

-

 

(189,154)

 

 

 

 

 

 

 

 

 

Net cash from operating activities

 

 

900,355

 

643,597

 

1,023,390

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Cost of refurbishment of investment properties

 

 

(311,312)

 

(404,189)

 

(1,977,597)

Cost of acquisition of investment property

 

 

-

 

(15,412,420)

 

(15,412,420)

Proceeds from disposal of investment properties

 

 

-

 

4,555,671

 

6,135,729

Cost of additions of property plant and equipment

 

 

-

 

(615)

 

(14,143)

 

 

 

 

 

 

 

 

 

Net cash from investing activities

 

 

(311,312)

 

(11,261,553)

 

(11,268,431)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

Repayment of borrowings

 

 

-

 

-

 

(2,530,000)

Payment of lease liabilities

 

 

(25,680)

 

-

 

(51,360)

Drawdown of borrowings

 

 

1,000,000

 

10,261,148

 

14,023,944

Dividends paid

 

 

-

 

(933,793)

 

(1,867,586)

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

 

974,320

 

9,327,355

 

9,574,998

 

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

 

 

1,563,363

 

(1,290,601)

 

(670,043)

Cash and cash equivalents at the beginning of the period

 

 

2,980,329

 

3,650,372

 

3,650,372

Cash and cash equivalents at the end of the period

 

 

4,543,692

 

2,359,771

 

2,980,329

 

Notes to the condensed consolidated interim financial statements

 

 

 

 

for the 6 months ended 30 September 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 General information

 

 

 

 

 

 

 

These condensed consolidated interim financial statements are for Circle Property Plc ("the Company") and its subsidiary undertakings (together referred to as the "Group").

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

The nature of the Company's operations and its principal activities are that of property investment in the UK.

 

 

 

 

 

 

 

 

2 Principal accounting policies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis of accounting

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

Going concern

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

Estimates and judgements

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

3 Operating segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4 Revenue

 

 

6 months to
30 September
2020

 

6 months to
30 September
2019

 

12 months to
31 March
2020

 

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

 

 

£

 

£

 

£

 

 

 

 

 

 

 

 

Rental income

 

 

3,290,782

 

3,339,652

 

6,715,456

Lease incentive adjustment

 

 

628,525

 

223,670

 

781,756

 

 

 

3,919,307

 

3,563,322

 

7,497,212

 

 

 

 

 

 

 

 

Insurance recovery

 

 

71,130

 

72,286

 

144,874

Service charge income

 

 

856,174

 

681,637

 

1,697,533

Dilapidation monies

 

 

82,718

 

33,000

 

273,993

 

 

 

1,010,022

 

786,923

 

2,116,400

 

 

 

 

 

 

 

 

 

 

 

4,929,329

 

4,350,245

 

9,613,612

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5 Property expenses

 

 

6 months to
30 September
2020

 

6 months to
30 September
2019

 

12 months to
31 March
2020

 

 

 

(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
30 September
2020

 

6 months to
30 September
2019

 

12 months to
31 March
2020

 

 

 

(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
30 September
2020

 

6 months to
30 September
2019

 

12 months to
31 March
2020

 

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

 

 

£

 

£

 

£

 

 

 

 

 

 

 

 

Bank interest

 

 

2,083

 

1,679

 

1,531

 

 

 

 

 

 

 

 

 

 

 

2,083

 

1,679

 

1,531

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8 Finance costs

 

 

6 months to
30 September
2020

 

6 months to
30 September
2019

 

12 months to
31 March
2020

 

 

 

(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
30 September
2020

 

6 months to
30 September
2019

 

12 months to
31 March
2020

 

 

 

(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
30 September
2020

 

6 months to
30 September
2019

 

12 months to
31 March
2020

 

 

 

(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.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR KZLFLBFLLFBV