Walls & Futures REIT PLC (WAFR) Walls & Futures REIT
PLC: Final Results and Audited Annual Report and Accounts for the
Year to 31 March 2022 26-Sep-2022 / 14:30 GMT/BST Dissemination of
a Regulatory Announcement that contains inside information in
accordance with the Market Abuse Regulation (MAR), transmitted by
EQS Group. The issuer is solely responsible for the content of this
announcement.
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT)
REGULATIONS 2019/310.
26 September 2022
WALLS & FUTURES REIT PLC
("Walls & Futures" or the "Company")
Final Results and Audited Annual Report and Accounts for the
Year to 31 March 2022
Walls & Futures REIT plc ("WAFR") the Ethical Housing
Investor and Developer, is pleased to announce its final results
and the publication of its audited annual report and accounts for
the year to 31 March 2021 (the "Annual Report "). A copy of the
Annual Report has been published on the Company's website,
www.wallsandfutures.com, in accordance with its articles of
association, and can also be viewed through a link at the bottom of
this announcement.
Walls & Futures is an ethical housing investor and developer
on a mission to address the unfulfilled demand for specialist
social housing in the UK.
We design, fund and develop specialist social housing which is
let on Full Repairing and Insuring (FRI), inflation linked leases
to our partners and customers who include local authorities,
registered providers and charities. Their tenants are often
individuals with learning & physical disabilities, autism,
dementia, mental health and life changing injuries.
Walls & Futures REIT plc does not have any involvement with
the care delivered within the properties, this is managed by care
providers approved by local authorities.
Highlights
-- Net Asset Value (NAV) down 4% to 98p per share (2021: 102p
per share)
-- Revenue GBP93,455 down 37% (2021: GBP148,420)
-- Loss -GBP122,296 (2021: Loss of -GBP214,169)
-- Exceptional items of GBP164,794 defending a hostile takeover
attempt
-- Investment property value increased by 7.2%
-- Earnings per share -3.26p (2021: -5.70p)
-- 100% of Specialist Supported Housing rents collected
-- Successful launch of Pax Homes
-- Pipeline of sites for new Pax Homes developments
-- Agreed lease terms & signed memorandum of understanding
with new partners
Key elements of the final results can be viewed below.
Joe McTaggart, CEO of Walls & Futures REIT plc said:
"We've made fantastic progress since with the launch of Pax
Homes and are thrilled with the positive response we've received
from specialist charities, care providers, housing associations,
NHS trusts, local authorities, and special education needs
schools.
We have agreed land options in Dorset and Sunderland for our
first Pax Homes developments, and we are actively seeking similar
parcels in Cornwall, Devon, Kent, Norfolk, and Greater
Manchester.
To fully capitalise on Pax Homes, we will need implement a
strategic pivot, to include the removal of REIT status, enabling us
to access difference sources of capital and sell Pax Homes to
individuals and organisations."
Due to the period of time between the publication of the Annual
Report and the Company's annual general meeting (" AGM") being
insufficient, those resolutions to be put at the AGM relating to
the Annual Report will be adjourned to a later date, details of
which will be separately announced. The Company makes the following
disclosure in relation to the Annual Report:
"The Financial Reporting Council's Ethical Standard 3.11(a)
dictates that no one shall act as engagement partner for more than
five years.
Jonathan Sutcliffe of Moore Kingston Smith LLP has now exceeded
this period acting in his capacity as engagement partner.
However, Ethical Standard 3.15 allows the engagement partner to
continue in this position for an additional period of up to two
years, so that no longer than seven years in total is spent in the
position of engagement partner, in circumstances where substantial
change has recently been made - or will soon be made - to the
nature or structure of the entity's business.
As a Special Resolution is being put the AGM to change the REIT
status of the Company, it is considered appropriate to retain
Jonathan Sutcliffe in his capacity as engagement partner.
This notice satisfies the requirement in Ethical Standard 3.16
to disclose this fact, and reasons for it, to the Company's
shareholders."
Extract from the Independent Auditors Report
"Material uncertainty related to going concern
We draw attention to the going concern accounting policy
detailed in note 3 to the financial statements, which indicate that
at the Annual General Meeting (AGM) a vote will be put to all
shareholders whether the company should continue operations as
currently constituted. The resolution is to amend the Company's
articles and instead become a 'conventional' property and
development company. The vote will be a special resolution which
the Board unanimously recommends to the shareholders.
If proposals are not approved by shareholders, an alternative
proposal to wind up the Company and distribute the net proceeds to
shareholders will be put. The Board does not recommend shareholders
vote in favour of this resolution.
The resolutions to be voted on at the AGM create material
uncertainty regarding the Company's going concern status."
For further information, contact:
Walls & Futures REIT PLC 0333 700 7171
Joe McTaggart, Chief Executive
Website www.wallsandfutures.com
Allenby Capital Limited (Corporate Adviser)
Nick Harriss/James Reeve 020 3328 5656
Extract from the Strategic Report
Overview
We made great strides in implementing the new strategy outlined
in our May 2021 letter, now that the unwelcome distraction of the
hostile takeover was behind us. We believe that focusing on
development, where we have a track record of generating strong
returns, will deliver growth, investment, and significantly reduce
the discount between the Company's share price and the net asset
value per share ("the NAV").
We completed the sale of our last PRS property in December 2021
for GBP662,500, representing a 1.9% premium over its March 2020
valuation. allowing us to concentrate on expanding our Specialist
Supported Housing (SSH) portfolio.
Our SSH portfolio continues to perform well. Despite the ongoing
economic difficulties, we collected 100% of our SSH rents. Despite
the ongoing economic challenges, we collected 100% of our SSH
rents, and the value of our SSH portfolio increased by 7.2%. Our
Net Asset Value (NAV) fell by 4% to 98p per share on March 31,
2021.
Finally, we finished the design and successfully launched Pax
Homes.
Pax Homes
Pax Homes are an incredible, flexible home designed specifically
around the needs of autistic people across the spectrum. They
prioritise wellbeing and independence by considering textures,
noise, lighting and balance. Optimal layouts, safety features,
durability, accessibility and stunning finishes promote the best
possible life with autism. Initially available as 1 and 2 bedroom
homes, they can be configured to individual homes or incorporated
into a small development.
In January 2022, The Commons Health and Social Care Select
Committee report highlighted the drastic need for specialist
housing and care accommodation for people with autism and learning
disabilities. Pax Homes addresses this need, improving lives by
solving the expense and shortage of specialist supported
housing.
Pax Homes has received positive feedback from our current
partners, as well as inquiries from specialist charities, care
providers, housing associations, NHS trusts, local authorities, and
special education needs schools. We are especially pleased with the
response from the broader autism community, with a test direct
marketing campaign generating approximately 250 enquiries per week
seeking information on renting and purchasing Pax Homes.
We have agreed terms on land options in Dorset and Sunderland
for our first Pax Homes developments, which will have an estimated
Gross Development Value (GDV) GBP6 million. We are actively seeking
additional land options in Cornwall, Devon, Kent, Norfolk, and
Greater Manchester with an estimated GDV of GBP15 million.
Outlook for the future
Our current structure and business model require us to provide
Pax Homes on a lease-only basis to our customers. However, we have
received inquiries from individuals and organisations interested in
purchasing individual homes and developments. Furthermore, it has
become clear that the primary route to value creation within the
sector is through property development rather than long-term
investment retention.
To capitalise on Pax Homes, we propose a strategic pivot in
which we sell Pax Homes to buyers rather than holding properties as
long-term investors. The Company's REIT status creates barriers to
fully utilising development opportunities, most notably limitations
on the source of its returns and the use of external borrowing.
Shareholders are being asked to approve this change.
If shareholders approve the change, the Board plans to keep its
current supported living investments in Stroud, Gloucestershire,
and Didcot, Oxfordshire. These assets serve as a solid asset
backstop for the Company's balance sheet, as well as a healthy and
secure rental stream. The Board intends to use these assets as
collateral for loans to finance future Pax Homes developments, with
the loans to be repaid from the sale of the Pax Homes, which is a
severely limited option under its current REIT status.
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