Condensed consolidated interim statement of cashflows

for the six months ended 30 June 2021

Notes (Unaudited)

for the six months ended 30 June 2021

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 Park Farm Technology Centre, Akeman Street, Kirtlington, OX5 3JQ. 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 2021. The financial information for the period ended 30 June 2021 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 2020 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 unaudited condensed consolidated interim financial statements are for the six months ended 30 June 2021. 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 2020.

These unaudited condensed consolidated interim financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment properties. These unaudited 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 2020.

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

The unaudited condensed consolidated interim 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.  The loan that falls due for repayment within one year can be refinanced under the existing arrangements with Handelsbanken plc.

3. Segment reporting

The group has one main business segment, property investment which is based in England and Wales.

In the first six months of 2021 the largest tenant represented 12% (2020 11%) and the second largest tenant represented 9% (2020 7%) of gross commercial property income for the period.

4. Income tax credit/(charge)

The current year 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. The tax charge arising in 2021 in respect of the prior year relates to the write-off of £1.6million of the outstanding PID pool.

Notes (Unaudited) (continued)

for the six months ended 30 June 2020

5. Dividends

On 3 September 2021, the directors declared a property income distribution of 22p per share (2020 21p per share) payable on 15 October 2021 to shareholders registered at 17 September 2021.

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 profit for the period of £6,153,000 (2020 loss £2,657,000) and on 5,178,943 shares which is the weighted average number of shares in issue during the period ended 30 June 2021 (2020 5,169,695).

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 £1,468,000 (2020 £1,858,000) has been calculated.

Notes (Unaudited) (continued)

for the six months ended 30 June 2021

7. Investment property

The directors have used an external independent valuation of properties at 30 June 2021 which has been carried out consistently with the annual valuation. 

8. Interest bearing loans

The debt is secured on certain assets within the group's property portfolio.  The group has a facility in place with its primary banker to enable it to re-finance the loan falling due in May 2022 on similar terms to the existing loans.

9. Share capital

Notes (Unaudited) (continued)

for the six months ended 30 June 2021

10. Related party transactions

Kingerlee Holdings Limited owns, through its wholly owned subsidiaries, 27.2% (2020 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, the previous registered office of the company of £1,000 (2020 £7,000). The amount owed at 30 June 2021 was £nil (2020 £nil). In addition, the group recharged professional fees of £12,000 to Kingerlee Holdings Limited in connection with additional fees connected with the group reporting requirement for the 2020 audit.  The amount owed at 30 June 2021 was £nil (2020 £nil).  All transactions were undertaken on an arm's length basis. 

During the period £507,000 (2020 £380,000) of dividend was paid to the wholly owned subsidiaries of Kingerlee Holdings Limited in respect of their shareholdings.

During the period ordinary shares of 25p each were issued under the Highcroft incentive plan to the following directors of the company: Simon Gill 4,534 (2020 4,309) and Roberta Miles 3,990 (2020 3,626).

During the period the following dividends were paid to directors of the company in respect of their shareholdings:

11. Net assets per share

12. Fair value of financial instruments

The fair values of loans and receivables and financial liabilities held at amortised cost were not materially different from book values.

13. Post balance sheet events

After the period end the group completed on the sale of its long-leasehold investment property in Andover let to Jewsons, for sales proceeds of £3,550,000, its valuation at 30 June 2021 and 9.2% above its valuation at 31 December 2020.

Statement of principal risks and uncertainties

The directors consider that there have been no material changes to the group's principal risks as set out in detail on pages 30 and 31 of the annual report and accounts for the year ended 31 December 2020. These principal risk areas can be summarised as:

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 2021 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 2021