1 August
2024
Capital & Regional
plc
("Capital & Regional" or
"C&R" or "the Company" or "the Group")
Half Year Results to 30 June
2024
Capital & Regional (LSE: CAL),
the UK convenience and community focused shopping centre REIT
announces its half year results to
30 June 2024.
Highlights for the period
· 17.1% increase in Net Rental Income to £13.7
million ("NRI")
·
0.8% increase in like-for-like
valuations
· 48 new lettings and renewals, compared to 42 in the 6 months
to June 2023, at a combined average premium of 8.8% to previous
rent2 and 14.1% to ERV2
·
17.1% increase in Adjusted
Profit1 to £8.2 million
·
3.6% increase in proposed interim dividend of
2.85p per share
Lawrence Hutchings, Chief Executive,
comments:
"We have delivered another positive set of results during the
first half of 2024, with our proven community
strategy continuing to support our
progress. Against what at times has been a
challenging economic backdrop our team has been able to capitalise
on the continued strong levels of demand from retailers for space
within our centres, particularly those in London. This is
reflected in the strong leasing momentum we have
maintained.
"Over the six months to the end of June not only did we
complete more lettings and renewals than over the same period last
year, we also achieved these at both a higher average rent per
lease and average premium to the previous rent. The rapid
re-leasing of all three of our former Wilko units to B&M in the
first few months of 2024 is one of the most notable examples of the
demand for space in our centres from retailers that need to be at
the heart of local communities, which is further evidenced by the
strong start we have made to the second half of the year. We
also continue to make significant progress on our repositioning
masterplan in Ilford where we have agreed terms on two major leases
encompassing 44,000 sq ft of floorspace, generating approximately
£0.5 million of additional income. The expanded and relocated TK
Maxx is trading well and our NHS community healthcare centre is now
open on the upper level.
"We have seen a further period of stable valuations and
successfully integrated Gyle shopping centre into our portfolio
where the initiatives we have undertaken since acquisition last
September have already led to a 5% increase in
value.
"Notwithstanding the previously announced and ongoing
corporate activity, Capital & Regional remains well placed to
continue to deliver on its successful community strategy to drive
income growth and value in support of progressive shareholder
dividends."
Operational metrics remain robust demonstrating the continued
appeal of C&R's community centres
·
48 new lettings and renewals
(June 2023: 42), at a combined average premium of 8.8% to previous
rent2 and 14.1% to ERV2.
·
Occupancy improved to 93.9%
(December 2023: 93.4%) due to re-letting the three former Wilko
units in our portfolio to B&M.
· 21.1 million shopper visits in the first half of
2024.
· Rent collection 99.2% for the first half of 2024, improving
from 98.4% at the 2023 Interim results.
Occupier led demand driving rental and earnings
growth
·
17.1% increase in Net Rental Income ("NRI") to
£13.7 million (June 2023: £11.7 million) reflecting impact of the
Gyle acquisition which has been successfully integrated into the
portfolio with a 21% increase in statutory revenue to £34.5 million
(June 2023: £28.5 million). A further £1.0 million of
contracted rent is due to convert to passing rent in the next 12
months as occupiers' rent-free periods end.
·
19% growth in Snozone's EBITDA1 to £1.9 million
(June 2023: £1.6 million) reflecting revenue growth at both the UK
and Madrid operations.
·
17.1% increase in Adjusted Profit1
to £8.2 million (June 2023: £7.0 million).
·
IFRS Profit for the period of £4.5 million (June
2023: £6.1 million).
·
Net £3.1 million invested during the period
including completion of the new NHS community healthcare centre in
Ilford that opened in May 2024 and remerchandising of the former WH
Smith in Wood Green, creating new units for Pure Gym, Wendy's and
Wingstop that have opened in recent weeks.
·
The first phase of the Walthamstow residential
development undertaken by Long Harbour, creating 495 Build to Rent
apartments in two residential towers and providing a new captive
audience of shoppers for our Walthamstow centre, is entering its
final stages with the development due to complete in early
2025.
·
0.8% increase in like-for-like valuations over
2023 to £374.9 million (December 2023: £372.8 million).
5% growth in the valuation
of the Gyle to £42 million since acquisition in September 2023 for
£40 million.
·
Net Asset Value ("NAV") increased to
£203.9 million (December 2023: £202.0 million).
· NAV per share and EPRA NTA per share at 88p and 85p
respectively (December 2023: 90p and 88p, respectively) due to the
increased number of shares in issue following the June 2024 scrip
dividend.
Long term secure debt position
·
Long debt maturity profile of 3.6 years with low
average cost of debt of 4.25% (December 2023: 4.1 years and 4.25%).
Approximately 80% hedged for the next two and a half
years.
·
Group Net Loan to Value has reduced to 43% from
44% as at 30 December 2023.
·
Ilford loan extended to
September 2025 with further conditional options to extend term to
end of 2027.
Further progress in delivering energy efficiency driving
forward our net zero carbon pathways
· 83% reduction in Scope 1 natural gas, and 20% in Scope 2
electricity consumption since 2019 within our shopping
centres.
·
EPC rating of Snozone Milton Keynes improved from
a 'C' to 'B'.
·
100% renewable and Renewable Energy Guarantees of
Origin certified electricity at all shopping centres and Snozone
venues.
Continued strong performance supporting further increase in
dividend
·
3.6% increase in proposed interim dividend of
2.85p per share (June 2023: 2.75p per share).
|
6 months
to
June 2024
|
6 months
to
June
2023
|
Year to
Dec
2023
|
Revenue
|
£34.5m
|
£28.5m5
|
£59.0m
|
Net Rental Income
|
£13.7m
|
£11.7m
|
£23.9m
|
Adjusted
Profit1
|
£8.2m
|
£7.0m
|
£12.7m
|
Adjusted Earnings per share
(diluted)1
|
3.6p
|
4.1p
|
6.6p
|
IFRS Profit for the
period
|
£4.5m
|
£6.1m
|
£3.7m
|
Basic earnings per share
(diluted)
|
2.0p
|
3.5p
|
1.9p
|
Total dividend per
share3
|
2.85p
|
2.75p
|
5.70p
|
|
|
|
|
Net Asset Value
|
£203.9m
|
£183.2m
|
£202.0m
|
Net Asset Value (NAV) per
share
|
88p
|
106p
|
90p
|
EPRA NTA per share
|
85p
|
102p
|
88p
|
|
|
|
|
Group net
debt4
|
£162.6m
|
£138.5m
|
£162.7m
|
Net debt to property
value
|
43%
|
42%
|
44%
|
Notes
1 Adjusted Profit, Adjusted Earnings per share, Net Rental
Income, Net Debt and the Snozone EBITDA metric are as defined in
the Glossary. Adjusted Profit incorporates profits from operating
activities and excludes revaluation of properties and financial
instruments, gains or losses on disposal, and other non-operational
items. A reconciliation to the equivalent EPRA and statutory
measures is provided in Note 6 to the condensed financial
statements.
2 For lettings and renewals (excluding development deals and
CVA variations) with a term of 1 year or longer which do not
include turnover rent.
3 Includes dividends declared post period end but related to
the period in question.
4 Weighted average, debt maturity assumes exercise of extension
options.
5 2023 comparative figure has been restated for a prior year
adjustment to service charge income and expenditure recognised in
the period. There is no change to Profit.
Possible offers for Capital & Regional
plc
On 23 May 2024, the Board of
Capital & Regional plc confirmed that its majority shareholder
Growthpoint Properties Limited had received a preliminary
expression of interest from NewRiver REIT plc ("NewRiver") in
relation to a possible offer in cash and shares for the entire
issued, and to be issued, share capital of Capital &
Regional.
On 19 July 2024, Praxis Group
Limited ("Praxis") announced it is in the early stages of
considering whether or not to make a cash offer for the entire
issued and to be issued share capital of Capital & Regional.
The Company confirmed that it received an expression of
interest from Praxis with a request to receive access to diligence
information pursuant to Rule 21.3 of the City Code on Takeovers and
Mergers (the "Code") on 5 July 2024. Capital & Regional is
complying fully with its obligations under Rule 21.3 of the Code in
providing access to due diligence information in order to enable
Praxis to evaluate a possible offer for the Company.
In accordance with Rule 2.6(a) of
the Code, NewRiver and Praxis are required, by no later than 5:00
p.m. on 15 August 2024 and 16 August 2024 respectively, to either
announce a firm intention to make an offer for Capital &
Regional in accordance with Rule 2.7 of the Code or announce that
it does not intend to make an offer, in which case the announcement
will be treated as a statement to which Rule 2.8 of the Code
applies.
In accordance with Rule 2.6(c) of
the Code, the deadlines may be extended further at the request of
the Board of Capital & Regional and with the consent of the
Takeover Panel. There can be no certainty that any firm offer
will be made for the Company, nor as to the terms on which any
offer will be made.
Use of Alternative Performance Measures
(APMs)
Throughout the results statement
we use a range of financial and non-financial measures to assess
our performance. A number of the financial measures, including Net
Rental Income, Adjusted Profit, Adjusted Earnings per share, Net
Debt and the industry best practice EPRA (European Public Real
Estate Association) performance measures are not defined under
IFRS, so they are termed APMs. APMs are not considered
superior to the relevant IFRS measures, rather Management use them
alongside IFRS measures to monitor the Group's financial
performance because they help illustrate the trading performance
and position of the Group. All APMs are defined in the Glossary and
further detail on their use is provided within the Financial
Review.
For further information:
Capital & Regional:
|
Tel: +44 (0)20 7932
8000
|
Lawrence Hutchings, Chief
Executive
|
|
Stuart Wetherly, Group Finance
Director
|
|
|
|
FTI Consulting:
|
Tel: +44 (0)20 3727
1000
|
Richard Sunderland, Bryn Woodward,
Oliver Parsons
|
Email:
Capreg@fticonsulting.com
|
Notes to editors:
About Capital &
Regional
Capital & Regional is a UK
focused retail property REIT specialising in shopping centres that
dominate their catchment, serving the non-discretionary and value
orientated needs of the local communities. It has a track record of
delivering value enhancing retail and leisure asset management
opportunities across a portfolio of tailored in-town community
shopping centres.
Using its expert property and
asset management platform, Capital & Regional owns and manages
shopping centres in Edinburgh, Hemel Hempstead, Ilford, Maidstone,
Walthamstow and Wood Green.
Capital & Regional is listed
on the main market of the London Stock Exchange (LSE) and has a
secondary listing on the Johannesburg Stock Exchange
(JSE).
For further information
see www.capreg.com.
South African secondary listing
At 30 June 2024, 8,801,339 of the
Company's total 232,996,247 shares were held on the South African
register representing 3.78% of the total issued share
capital. Java Capital acts as JSE Sponsor for the
Group.
Forward looking statements
This document contains certain
statements that are neither reported financial results nor other
historical information. These statements are forward-looking in
nature and are subject to risks and uncertainties. Actual future
results may differ materially from those expressed in or implied by
these statements. Many of these risks and uncertainties relate to
factors that are beyond the Group's ability to control or estimate
precisely, such as future market conditions, currency fluctuations,
the behaviour of other market participants, the actions of
government regulators and other risk factors such as the Group's
ability to continue to obtain financing to meet its liquidity
needs, changes in the political, social and regulatory framework in
which the Group operates or in economic or technological trends or
conditions, including inflation and consumer confidence, on a
global, regional or national basis. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
apply only as of the date of this document. The Group does not
undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after
the date of this document. Information contained in this document
relating to the Group should not be relied upon as a guide to
future performance.
Operating review
New lettings, renewals and rent reviews
We made further strong leasing
progress in the first half of the year, completing 48
new lettings and renewals at an average premium
to previous rent of 8.8%1 and securing £2.2 million of
annual rent. This compares to 42 new lettings and renewals for a
combined annual rent of £1.5 million for the same period last year
meaning that both the absolute number of leases signed and the
annualised rental amount per lease were higher this
year.
In February 2024, we completed a
portfolio deal with B&M which resulted in them taking all three
of the units vacated as a result of the Wilko administration,
mitigating the occupational impact from the loss of a top 10
retailer and largely replicating the rent. The stores opened for
trading in May 2024.
We have also completed new
lettings at Maidstone and Hemel Hempstead with Bodycare and are in
final stages of letting a further unit in Ilford. Renewals
agreed during the period include Deichmann and The Perfume Shop at
Ilford, Choice at Walthamstow and JD Sports at Wood
Green.
|
6 months
to
June 2024
|
6 months
to
June 2023
|
New Lettings
|
|
|
Number of new lettings
|
25
|
21
|
Rent from new lettings
(£m)
|
£1.2m
|
£0.6m
|
Renewals settled
|
|
|
Renewals settled
|
23
|
21
|
Total resulting annual rent
(£m)
|
£1.0m
|
£0.9m
|
Combined new lettings and renewals
|
|
|
Comparison to previous
rent1
|
+8.8%
|
+5.7%
|
Comparison to ERV at December
20231
|
+14.1%
|
+13.7%
|
|
|
| |
1 For lettings and renewals (excluding development deals and
CVA variations) with a term of 1 year or longer which do not
include turnover rent element.
Since 30 June 2024 we have agreed
terms on four key letting deals that are in advanced legals and
will represent approximately £0.8 million of annualised rent in
aggregate.
Rental income and occupancy
|
30 June
2024
|
30
December 2023
|
30 June
2023
|
Occupancy (%)
|
|
|
93.9%
|
93.4%
|
94.5%
|
Contracted rent (£m)
|
|
|
38.2
|
37.0
|
31.6
|
Passing rent (£m)
|
|
|
37.0
|
35.6
|
30.7
|
Occupancy has improved by 50 basis
points since 30 December 2023. This reflects the net impact
of the B&M lettings, partially offset by the administration of
the Body Shop, which impacted three units at Gyle, Hemel Hempstead
and Ilford as well as the Department for Work and Pensions vacating
the job centre at Walthamstow.
Since 30 June 2024, as noted
above, we have agreed terms on four key letting deals.
Completing these transactions alongside the other deals agreed post
30 June 2024 will see occupancy recover to a similar level to 30
June 2023.
We note recent press speculation
in respect of Cineworld and the potential for it to undertake some
form of insolvency action. We have exposure to one unit at
Wood Green with annual rent of £0.6 million.
Contracted and passing rent have
both increased from December 2023 by £1.2 million (3.2%) and £1.4
million (3.9%) respectively. The key drivers of this are the
B&M lettings and the opening of the new NHS community
healthcare centre in Ilford. Contracted rent excludes approximately
£0.6 million of rent where deals have exchanged but completion
remains subject to planning or other conditions. A further £1.0
million of contracted rent is due to convert to passing rent in the
next 12 months as occupiers' rent-free periods end.
Operational performance
In total there were 21.1 million
shopper visits across the portfolio in the first half of 2024, 4.6%
below 2023 on a like for like basis. Footfall has been
impacted at those schemes with former Wilko units which were closed
for most of the period until B&M opened for trade in May
2024. Ilford has been similarly impacted as while Wilko was
not within our tenancy one of their former units sits adjacent with
an entrance to our scheme.
Car park usage is in line with
2023 (+0.1%). This combined with greater optimisation of
tariffs and an increase in contract parking, has delivered income
in the period of £3.2 million, an uplift of 21.6%.
Rent collection
Rent collection for the first six
months of the year is currently 99.2% as detailed in the table
below:
|
Rent
collection
6m to 30 June
2024
|
|
£m
|
|
Rent collected
|
19.8
|
99.2%
|
Outstanding
|
0.2
|
0.8%
|
Total billed
|
20.0
|
100%
|
Amounts include VAT.
Capital expenditure
In total a net £3.1 million was
invested in the first six months of the year, this was primarily
across the following projects and is expected to produce a yield on
cost in line with the Company's target of 8% to 9%:
Ilford
·
£1.5 million for completion of the new 20,000 sq
ft NHS community healthcare facility that opened in the first half
of 2024.
·
£0.8 million to create a new retail
area by the entrance opposite the Elizabeth Line that was converted
from the former TK Maxx unit, vacated when they moved into a new
larger unit on the middle floor in November 2023.
Wood Green
·
£0.9 million on remerchandising of the former WH
Smith store where the new units we have created for Pure Gym,
Wendy's and Wingstop have opened in recent weeks.
The spend in the period is net of
a £1.3 million receipt from the head lease holder on Walthamstow in
respect of previous capital expenditure projects. We anticipate
capital expenditure in the second half of the year to be at a
similar level.
The major projects undertaken have
the additional benefit of helping to improve the ESG credentials of
the relevant centres by replacing aged infrastructure and enabling
the reduction or elimination of the use of gas.
Walthamstow residential
Construction work is entering its
final stage on the first phase of the residential development at
Walthamstow. This will see Long Harbour create 495 Build to
Rent apartments in two residential towers adding further to the
centre's local customer base once it opens in 2025. The Group
completed the sale of land for residential development to Long
Harbour for £21.6 million in 2022. The planning consent covers a
residential-led, mixed use development, incorporating a new
Victoria Line tube station entrance and public space including a
new park.
We have two further phases of
development which comprise approximately 50,000 sq ft of retail and
43 apartments which are part of the same planning consent as phase
1. We have commenced discussions about how we procure this project
with a potential partner for the residential component similar to
the structure we achieved in the first phase. In addition, we are
underway on discussions with potential anchor retailers including
supermarket operators for the retail component.
Shopping Centre ESG
We have developed a robust pathway
aligned with the BBP Climate Commitment and the UK Green Building
Council's (UKGBC) definition of net zero. Our commitment covers
embodied carbon associated with refurbishments and fit-outs and
operational carbon from landlord and occupier energy consumption,
along with measured emission sources. We continue to make progress
on driving forward our net zero carbon pathways aligned with
industry best practice and guidelines which represents a
significant milestone in our decarbonisation journey. Through the
successful implementation of our net zero interventions, we have
improved the EPC rating of a further centre from a 'D' to a
'C'.
Having established our net zero
governance along with the roll-out of employee training, we will
continue to prioritise energy efficiencies on the ground across all
aspects of our operations and evolve crucial tools such as our data
accuracy and net zero standards. To further inform our net zero
pathway we are in the final stages of securing BREEAM certification
across all centres. We have made significant strides towards
our environmental targets increasing our energy efficiency,
reducing Scope 1 natural gas consumption by 83% and Scope 2
electricity consumption by 20%, against 2019. All the shopping
centres electricity is 100% renewable and Renewable Energy
Guarantees of Origin certified.
We are committed to developing and
operating a shopping centre portfolio that not only minimises
potential adverse climate change impacts but also actively fosters
positive contributions to the communities and the natural
environment we interact with. To support this, we have established
our Climate Adaptation Plan as we recognise the importance of
embedding climate resilience across all interfaces in our business
model, from our governance and risk management strategy to key
decision-making moments in our investment value chain.
Our Community Wheels of Support
continue to play a critical role in encouraging engagement and
helping our shopping centre teams to prioritise areas of impact. As
community hubs we know our support is crucial, particularly with
the cost-of-living crisis. We are very proud of our efforts in this
space and to date we have partnered with over 100 charities, hosted
125 events, and spent more than 400 hours engaging with local
community groups.
We continue to implement our
Social Impact Measurement and Management Framework to further
support our ESG strategy and monitor our progress. The Framework
focuses on social impact goals and strategies to identify the
various ways in which the business impacts people so this can
inform our Impact Management Plan.
Snozone
Snozone has had another strong six
months, producing record levels of revenue and profitability.
EBITDA1 increased 18.8% to £1.9 million (June 2023: £1.6
million) reflecting growth from both the UK and Madrid
operations.
Revenue and EBITDA for the UK
operations at £6.0 million and £1.4 million for the first half of
2024, were both 7% higher than 2023. This revenue growth has
helped offset inflationary pressures on labour costs and
specifically energy costs, where the unit cost has doubled since
Snozone UK exited a three-year fixed tariff in September
2023.
Snozone Madrid's revenue of £2.3
million was 13% higher than 2023 driving a 24% increase in Madrid
EBITDA to £0.5 million (June 2023: £0.4 million). These
metrics reflect the actions undertaken to significantly improve
profitability since acquisition of the operations in February
2021. These include broadening the range of lesson
programmes, introducing a new booking platform and sales team KPI's
and rolling out a Disability Snow School, to bring this destination
in line with the UK equivalents that Snozone has operated since
2015.
Snozone's IFRS profit for the
period was £1.6 million (June 2023: £0.6 million).
During the period Snozone Madrid
was awarded the Trip Advisor Travelers Choice Award for the first
time. Snozone Madrid's approval rating has improved from 56%
at the point of acquisition to 83% currently. The UK venues
also received this award for the sixth year running.
Snozone ESG
All of Snozone's electricity is
100% renewable, traceable and has no element of biomass.
The UK venues source electricity
from the Hornsea North Sea wind farm, 90 miles from the Snozone
Yorkshire venue. In Madrid approximately 70% of the venue's power
is sourced from a mixture of bought-in solar, wind and nuclear
energy with the remainder supplied by 1,600 of our own solar panels
on the roof of the facility, which were purchased in 2022 as part
of Snozone's decarbonisation capital investment programme as well
as offsetting the rising costs of electricity.
Snozone's pathway to net zero
strategy is underpinned by a cyclical four-year plan for capital
investment into new plant and machinery. Ten units of blast
coolers have been replaced at the Milton Keynes venue saving
214,000 kWh per year.
In addition, improved insulation
at both UK venues, installation of two voltage optimisers and a
de-lamping project combined with Madrid's solar panels investment
have seen reductions in water, electricity and gas consumption of
19%, 13% and 20% respectively versus the 2019 pre-Covid base
year. The EPC rating of Milton Keynes was improved during the
year from a 'C' to a 'B', bringing it in line with the Yorkshire
and Madrid operations.
Snozone is the only European
operator to operate its own Disability Snow School, which we have
now extended to Madrid. In 2024 we delivered 1,314 disability
lessons, a 28% increase on 2023 and were nominated for an award in
the National Learning Disabilities & Autism awards.
Snozone's supply chain only consists of companies who have signed
up to the Modern Slavery Act and the Anti-bribery and Corruption
Act.
1 Snozone EBITDA is defined in the use of Alternative
Performance Measures section below.
FINANCIAL REVIEW
|
Six months
to
June 2024
|
Six months to
June
2023
|
Year
to
Dec
2023
|
Profitability
|
|
|
|
Statutory Revenue
1
|
£34.5m
|
£28.5m
|
£59.0m
|
Net Rental Income (NRI)
|
£13.7m
|
£11.7m
|
£23.9m
|
Adjusted Profit
2
|
£8.2m
|
£7.0m
|
£12.7m
|
Adjusted Earnings per share
(diluted) 2
|
3.6p
|
4.1p
|
6.6p
|
IFRS Profit for the
period
|
£4.5m
|
£6.1m
|
£3.7m
|
Basic earnings per share
(diluted)
|
2.0p
|
3.5p
|
1.9p
|
EPRA cost ratio (excluding vacancy
costs) 2
|
36.5%
|
36.7%
|
39.1%
|
Net Administrative Expenses to Gross
Rent
|
20.8%
|
21.7%
|
23.5%
|
|
|
|
|
Investment Returns
|
|
|
|
Net Asset Value
|
£203.9m
|
£183.2m
|
£202.0m
|
Net Asset Value (NAV) per
share
|
88p
|
106p
|
90p
|
EPRA NTA per share
2
|
85p
|
102p
|
88p
|
Dividend per share
3
|
2.85p
|
2.75p
|
2.95p
|
|
|
|
|
Financing
|
|
|
|
Group net debt
|
£162.6m
|
£138.5m
|
£162.7m
|
Group net debt to property
value
|
43%
|
42%
|
44%
|
EPRA LTV
|
46%
|
45%
|
45%
|
Weighted average maturity of Group
debt 4
|
3.6 years
|
4.0
years
|
4.1
years
|
Weighted average cost of Group
debt
|
4.25%
|
3.61%
|
4.25%
|
1 2023 comparative figures have been restated for a prior year
adjustment to service charge income and expenditure recognised in
the period. There is no change to Profit.
2 Adjusted Profit is as defined in the Glossary. A
reconciliation to the statutory result is provided further below.
EPRA figures and a reconciliation to EPRA EPS are shown in Note 6
to the condensed Financial Statements. The calculation of
EPRA cost ratio is provided in the EPRA performance measures
section.
3 Represents dividends declared post period end but related to
the period in question.
4 Assuming exercise of all extension options.
Use of Alternative Performance Measures
(APMs)
Throughout the results statement
we use a range of financial and non-financial measures to assess
our performance. The significant measures are as
follows:
Alternative performance measure used
|
Rationale
|
Adjusted Profit
|
Adjusted Profit is used as it is
considered by management to provide the best indication of trading
profits and hence the ability of the business to fund dividend
payments.
Adjusted Profit excludes
revaluation of properties, profit or loss on disposal of properties
or investments, gains or losses on financial instruments, charges
in respect of non-cash long-term incentive awards and
non-operational one-off items.
Adjusted Profit includes EBITDA
from Snozone (see definition further below). This was a change
implemented in 2021 arising from the adoption of IFRS 16 and the
signing of new lease agreements on Snozone's two UK sites. We
considered that the combination of these two factors meant that
Snozone's statutory profit no longer alone provides a full
reflection of Snozone's trading performance and hence introduced
this additional Alternative Performance Measure.
The key differences between
Adjusted Profit and EPRA earnings, an industry standard comparable
measure, relates to the exclusion of non-cash charges in respect of
share-based payments and adjustments in respect of Snozone as
detailed above.
Adjusted Earnings per share is
Adjusted Profit divided by the weighted average number of shares in
issue during the year excluding own shares held.
A reconciliation of Adjusted
Profit to the equivalent EPRA and statutory measures is provided in
Note 6 to the condensed financial statements.
|
Like-for-like amounts
|
Like-for-like amounts are
presented as they measure operating performance adjusted to remove
the impact of properties that were only owned for part of the
relevant periods.
For the purposes of comparison of
capital values, this will also include assets owned at the previous
period end but not necessarily throughout the prior
period.
In the current year like-for-like
comparisons have been used to adjust for the impact of the Gyle
acquisition in September 2023.
|
Net Debt
|
Net debt is borrowings, excluding
unamortised issue costs, less cash at bank. Cash excludes
cash held on behalf of third parties (e.g. in respect of service
charges or rent deposits).
|
Net debt to property
value
|
Net debt to property value is debt
less cash and cash equivalents divided by the property
value.
|
Net Rent or Net Rental Income
(NRI)
|
Net Rental Income is rental income
from properties, less provisions for expected credit losses,
property and management costs. It is a standard industry
measure. A reconciliation to statutory turnover is provided
in Note 3 to the condensed financial statements.
|
Snozone EBITDA
|
Snozone EBITDA is based on net
profit. It excludes Depreciation, Amortisation,
(notional) Interest, Tax and non-operational one-off items.
It includes rent expense, based on contractual payments adjusted
for rent free periods. This provides a measure of Snozone
trading performance which removes the profiling impact of IFRS 16
that would otherwise see a significantly higher charge in early
years of a lease and significantly lower net charge in later
years. A reconciliation to the IFRS net profit is included
within Note 3 to the condensed financial statements.
|
Profitability
Components of Adjusted Profit and reconciliation to IFRS
Profit
Amounts in
£m
|
Six months
to
June 2024
|
Six
months to
June
2023
|
Year
to
December
2023
|
Net Rental Income
|
|
13.7
|
|
11.7
|
|
23.9
|
Interest payable
|
|
(4.6)
|
|
(3.7)
|
|
(7.4)
|
Snozone (indoor ski operation)
EBITDA
|
|
1.9
|
|
1.6
|
|
2.3
|
External management fees
|
|
0.7
|
|
1.2
|
|
1.9
|
Central operating costs (including
central interest)
|
|
(3.1)
|
|
(3.1)
|
|
(6.6)
|
Variable overhead
|
|
(0.4)
|
|
(0.7)
|
|
(1.4)
|
Adjusted Profit 1
|
|
8.2
|
|
7.0
|
|
12.7
|
Adjusted Earnings per share (pence)
1
|
|
|
3.6p
|
|
4.1p
|
|
6.8p
|
|
|
|
|
|
|
Reconciliation of Adjusted Profit to statutory
result
|
|
|
|
|
|
Adjusted Profit
|
8.2
|
|
7.0
|
|
12.7
|
Property revaluation
|
(1.5)
|
|
(0.3)
|
|
(8.1)
|
Loss on disposal/transaction
costs
|
(0.4)
|
|
(0.6)
|
|
(0.3)
|
Snozone depreciation and
amortisation
|
(1.1)
|
|
(1.0)
|
|
(2.2)
|
Snozone notional interest (net of
rent expense in EBITDA)
|
0.8
|
|
0.3
|
|
0.8
|
Loss on financial
instruments
|
(0.6)
|
|
(0.3)
|
|
(2.0)
|
Corporation Tax
(charge)/credit
|
(0.6)
|
|
1.2
|
|
3.6
|
Long Term incentives
(non-cash)
|
(0.3)
|
|
(0.4)
|
|
(0.8)
|
Other
items
|
-
|
|
0.2
|
|
-
|
Profit for the period
|
4.5
|
|
6.1
|
|
3.7
|
1 EPRA figures and a reconciliation to EPRA EPS are shown in
Note 6 to the condensed Financial Statements.
17.1% increase in Adjusted
Profit to £8.2 million (30 June 2023: £7.0
million)1
Net Rental Income (NRI) increased to £13.7 million (30 June 2023 - £11.7 million)
reflecting the impact of the Gyle acquisition in September
2023. Adjusting for this, and a one-off catch up of prior
year turnover income received in 2022, NRI reduced by 3.5% on a
like-for-like basis. This reflects the former Wilko units
being vacant for most of the period until B&M opened in May
2024 and increases to void costs as a result of wage and energy
inflation.
Interest payable has
increased from the prior year reflecting £0.6 million of interest
on the Gyle £16 million loan facility and a higher rate on the
Group's £39 million Ilford facility as the previous interest rate
swap expired in March 2024.
Snozone EBITDA at £1.9
million (30 June 2023 - £1.6 million) has increased, as noted,
benefiting from revenue growth at both its UK and Madrid
operations.
External Management Fees of
£0.7 million reflect Property Management fees charged to the
service charge within the Group's property portfolio. The
decrease from the prior year reflects fees charged on external
properties (Luton and Redditch), arrangements which ceased during
2023.
Central operating costs (including central
interest) at £3.1 million have
remained in line with the prior year (30 June 2023 - £3.1 million).
Variable overheads
£0.4 million (30 June 2023 - £0.7 million) have reduced, reflecting
executive retention awards which were paid in September 2023.
We anticipate the combination of further cost savings and the
benefit of additional income from capital expenditure projects and
improving occupancy to drive over time further improvements in our
EPRA cost ratio, which has reduced to 36.5% from 39.1% for the year
ending December 2023.
Adjusted earnings per share for the period were 3.6 pence on a diluted basis (30 June
2023: 4.1 pence) the reduction reflects the larger number of shares
in issue as a result of the equity raise in September 2023 to part
fund the Gyle acquisition and the scrip dividend shares issued in
respect of the interim and final 2023 dividends.
IFRS profit for the period -
30 June 2024: £4.5 million (30 June 2023:
£6.1 million)
Aside from the Adjusted Profit of
£8.2 million the other items impacting the result in the period
were:
·
Property revaluation loss of £1.5
million (June 2023 - loss of £0.3 million) representing the
difference between the net Capex invested of £3.1 million,
valuation increases and movement on tenant incentives and IFRS
adjustments.
·
£0.4 million of transaction
costs related to ongoing corporate activity. In the prior
period there was £0.6 million of
transaction costs in respect of the proposed acquisition of The
Gyle and a small true up of profit on disposal in respect of the
Group's sale of Blackburn in 2022.
·
£(0.3) million of adjustments relating to Snozone
reconciling between the EBITDA measure used for Adjusted Profit and
IFRS Profit for the year (June 2023 - £(0.7) million). As
noted above, we used EBITDA as this removes the profiling element
of IFRS 16 and therefore provides a measure of Snozone's trading
performance excluding this.
·
A loss of £0.6 million on financial instruments
being the movement from the revaluation of the Ilford and Gyle
interest rate caps (June 2023 - loss of £0.3 million).
·
£0.6 million deferred tax
charge (June 2023 - £1.2 million credit).
·
£0.3 million relating to share based payments
being the non-cash element of the Group Combined Incentive Plan for
executives and LTIP retention awards for staff members (June 2023 -
£0.4 million).
The profit for the period has
resulted in NAV of £203.9 million and EPRA Net Tangible Assets of
£202.4 million, improvements of 0.9% and 0.6% compared to the
December 2023 amounts of £202.0 million and £201.2 million,
respectively. Basic NAV per share and EPRA NTA per share were
88p and 85p respectively (December 2023: 90p and 88p
respectively). The reduction reflects the higher number of
shares in issue as a result of new Scrip shares issued in June
2024.
Property portfolio valuation
The valuation of the portfolio at
30 June 2024 was £374.9 million, representing an increase in
headline valuation of £2.1 million or 0.6% from December
2023. The Net Initial Yields and Net Equivalent Yields for
the portfolio remained broadly constant on a like for like basis,
7.61% and 8.81% respectively for 30 June 2024 compared to 7.80% and
8.79% respectively as at December 2023. We have seen a 5%
increase in the value of Gyle from the £40 million acquisition
price driven by leasing activity since we took ownership in
September 2023.
Property at independent valuation
|
30 June
2024
|
30
December 2023
|
|
£m
|
NIY
%
|
NEY
%
|
£m
|
NIY
%
|
NEY
%
|
Maidstone
|
31.3
|
10.83%
|
11.65%
|
31.5
|
11.90%
|
11.66%
|
Walthamstow
|
77.0
|
5.94%
|
7.01%
|
77.7
|
6.84%
|
7.00%
|
Wood Green
|
152.5
|
7.64%
|
7.33%
|
149.5
|
7.13%
|
7.28%
|
Hemel Hempstead
|
9.8
|
7.90%
|
17.36%
|
9.2
|
9.57%
|
17.40%
|
Ilford
|
62.3
|
5.69%
|
7.97%
|
63.3
|
5.65%
|
7.90%
|
Gyle, Edinburgh
|
42.0
|
11.22%
|
10.15%
|
41.6
|
11.92%
|
10.13%
|
Total
|
374.9
|
7.61%
|
8.81%
|
372.8
|
7.80%
|
8.79%
|
Financing
The Group's debt position as at 30
June 2024 is summarised in the table below:
|
Debt1
|
Cash2
|
Net debt
|
Loan to
value 3
|
Net loan
to value3
|
Current
interest rate
|
Fixed
|
Duration
to loan expiry4
|
Duration
with extensions4
|
30 June 2024
|
£m
|
£m
|
£m
|
%
|
%
|
%
|
%
|
Years
|
Years
|
The Mall
|
140.0
|
(9.0)
|
131.0
|
54%
|
50%
|
3.45%
|
100
|
2.6
|
3.6
|
Gyle, Edinburgh
|
16.0
|
(2.0)
|
14.0
|
38%
|
33%
|
6.50%
|
100
|
4.2
|
4.2
|
Hemel Hempstead
|
4.0
|
(0.4)
|
3.6
|
41%
|
37%
|
11.06%
|
-
|
1.0
|
3.0
|
Ilford
|
39.0
|
(3.7)
|
35.3
|
63%
|
57%
|
5.50%
|
100
|
1.2
|
3.5
|
Central Cash
|
-
|
(21.3)
|
(21.3)
|
-
|
-
|
-
|
-
|
-
|
-
|
Total
|
199.0
|
(36.4)
|
162.6
|
53%
|
43%
|
4.25%
|
97.8
|
2.4
|
3.6
|
1 Excluding unamortised issue costs.
2 Excluding cash beneficially owned by tenants.
3 Debt and net debt divided by investment property at
valuation.
The Group's Net Debt to Property Value ratio has
reduced marginally during the period from 44% to 43% reflecting
small increases in both property valuation and cash.
The weighted average cost of interest has
remained at 4.25% of which 98% is fixed until September 2025 and
78% until at least January 2027.
The Group's debt facilities
comprise:
The Mall
The Mall facility consists of a
single £140 million fixed rate loan at 3.45%, held with TIAA.
The loan matures in January 2027 but has a one-year conditional
extension option.
Hemel Hempstead
The Group has a £4 million
facility with BC Invest, a subsidiary of the Group's strategic
residential partner, Far East Consortium. The debt matures in July
2025 with options to extend for a further one or two years and is
at a margin of 5.95% over SONIA. It is secured on the Marlowes
Centre on a non-recourse basis.
Ilford
The Group has a £39 million
facility secured on the Ilford Exchange shopping centre with
Dekabank Deutsche Girozentrale. The loan was due to mature in
March 2024 but has been extended until September 2025 and we have
agreed two further conditional extension options to extend maturity
to the end of December 2026 and 2027, respectively. The
extension of maturity has led to the loan being reclassified to
non-current, having been a current liability at December
2023. The margin on the loan is 300
basis points. The Group has an interest rate cap that hedges
the maximum all in cost at 5.50% until the September 2025
maturity.
Gyle, Edinburgh
To part fund the acquisition of
Gyle in Edinburgh the Group drew a new debt facility of £16 million
in September 2023, arranged by Morgan Stanley. The loan
matures in September 2028. The loan is at a margin of 275
basis points. The total all in cost of debt has been hedged
at a maximum of 6.50% for the duration of the loan via an interest
rate cap.
Going Concern
Under the UK Corporate Governance
Code the Board needs to report whether the business is a going
concern. In making its assessment of Going Concern, the Group has
considered the general risk environment and the specific risks that
relate to the Group and its sector. This has incorporated
considering the current macro-economic inflationary pressures as
well as the continuing structural trends within the retail
industry.
At 30 June 2024, the Group had
total cash at bank on balance sheet of £36.4 million. Of which
£20.8 million was held centrally outside of secured loan
arrangements. This provides a significant cash contingency to cover
any reasonable disruption to operations in both the base and
downside scenarios that have been modelled for at least the period
of the next 18 months that is considered for going concern
purposes.
In respect of the £140 million
Mall debt, the Group is currently compliant with all covenant tests
on the facility. On the Ilford £39 million facility, as well
as extending the loan maturity to September 2025 and agreeing
further loan extension options out to December 2027 the Group
agreed various improvements to covenant terms that run until the
new maturity and beyond if the extension options are
triggered. On Hemel Hempstead the Group has a waiver of all
covenants on the £4 million loan facility until maturity in July
2025 and an option to extend maturity by one or two years.
The Group signed a £16 million loan facility in September 2023 to
part finance the acquisition of Gyle in
Edinburgh.
All of the Group's asset backed
loan facilities are ring-fenced within their own SPV structures
with no recourse to Capital & Regional plc and no cross-default
provisions.
In making its assessment of Going
Concern, the Group has run updated forecasts on both a base case
and downside basis. In the latter, the Group has sensitised rent
collection to 90%, reduced car park and ancillary income by 10% and
removed any contribution from Snozone to reflect how a significant
downturn in expected trading could impact cashflows. The Group has
also considered a 15% reduction in property valuations both from
the Group's 30 June 2024 valuations and valuations undertaken by
the Group's respective lenders.
The combination of the cash
maintained on the Group's balance sheet and actions available
within Management's control provides sufficient contingency to
cover all of the various downside sensitivities modelled in
combination to the most adverse end of the scenarios
modelled. At the most adverse end the Group would need to
take some additional measures to preserve cash involving some
combination of reducing or deferring Capital Expenditure and/or
reducing dividend payments or utilising a Scrip option.
In coming to its Going Concern
conclusion, the Group has also considered, but not relied upon,
other options available to generate or conserve additional cash, to
reduce debt levels and to fund value accretive capital expenditure
and letting initiatives. These include but are not limited to the
potential disposal of assets either in whole or part and the
potential raising of additional funds.
Having due regard to all of the
above matters and after making appropriate enquiries, the Directors
have a reasonable expectation that the Group and the Company have
adequate resources to continue in operational existence for the
foreseeable future. Therefore, the Board continues to adopt the
Going Concern basis in preparing the financial
statements.
Dividend
The Directors recommend an interim dividend of
2.85 pence per share (June 2023: 2.75 pence per share). The
dividend will be paid entirely as a Property Income Distribution
(PID). We do not anticipate offering a scrip dividend option
for this dividend payment. Across
the full financial year, the Group expects to pay a dividend of at
least 90% of the Group's EPRA profits, in line with its dividend
policy.
The key dates proposed in relation
to the payment of the dividend are:
· Confirmation of ZAR equivalent dividend
|
Tuesday, 27 August 2024
|
· Last day to trade on Johannesburg Stock Exchange
(JSE)
|
Tuesday, 3 September
2024
|
· Shares trade ex-dividend on the JSE
|
Wednesday, 4 September
2024
|
· Shares trade ex-dividend on the LSE
|
Thursday, 5 September
2024
|
· Record date for LSE and JSE
|
Friday, 6 September
2024
|
· Dividend payment date
|
Friday, 27 September
2024
|
South African shareholders are
advised that the dividend will be regarded as a foreign
dividend. Further details relating to Withholding Tax for
shareholders on the South African register will be provided within
the announcement detailing the currency conversion rate on Tuesday,
27 August 2024. Share certificates on the South African
register may not be dematerialised or rematerialised between 4
September 2024 and 6 September 2024, both dates inclusive.
Transfers between the UK and South African registers may not take
place between 27 August 2024 and 6 September 2024, both dates
inclusive.
Principal risks and uncertainties
There are a number of risks and
uncertainties which could have a significant impact on future
performance and could cause actual results to differ materially
from expected or historical results. The Group carries out a
regular review of the major risks it faces and monitors the
controls that have been put in place to mitigate them.
A detailed explanation of the
principal risks and uncertainties was included on pages 52 to 57 of
the Group's 2023 Annual Report. A further review was carried out
for the 30 June 2024 half year taking into consideration the next
six months to 30 December 2024. The review concluded that
while some risks, including property investment market risks,
people risks, business disruption from a major incident and
customer and changing consumer trend risks had changed, the
ultimate nature of them had not and therefore the principal risks
to the Group remain those disclosed in the 2023 Annual Report.
These have been summarised below.
·
Property
investment market risks - Weak
economic conditions and poor sentiment in commercial real estate
markets allied to higher risk free rates may lead to low investor
demand and further declines in valuation. Small changes in property
market yields can have a significant effect on property valuation
and the impact of leverage could magnify the effect on the Group's
net assets.
·
Impact of the economic environment - A prolonged downturn in
tenant demand driven by structural changes in retail and/or
macro-economic factors, such as the current inflationary pressures,
could put further pressure on rent levels. Tenant failures and
reduced tenant demand could adversely affect rental income
revenues, lease incentive costs, void costs, available cash and the
value of properties owned by the Group.
· Treasury risk - Inability
to fund the business or to refinance existing debt on economic
terms may result in the inability to meet financial obligations
when due and put a limitation on financial and operational
flexibility. Cost of financing could be prohibitive in the future.
Breach of any loan covenants could cause default on debt and
possible accelerated maturity. Unremedied breaches can trigger
demand for immediate repayment of loans.
· Climate related - The
Group's failure to act on environmental issues could lead to
reputational damage, deterioration in customer and community
relationships, or limit investment opportunities. Climate-related
risks extend to the global supply chain and business disruption
from extreme weather events. Failure to comply with
regulations could result in financial exposure. The Group
maintains a Climate-related risk matrix which consolidates the
results of the top 10 identified risks from the RCP4.5 and RCP8.5
scenarios outlined in the climate risk assessment report and are in
line with TCFD recommendations.
·
Tax and regulatory risks - Exposure to non-compliance with
the REIT regime and changes in tax legislation or the
interpretation of tax legislation or previous transactions could
result in tax related liabilities and other losses arising.
Exposure to changes in existing or forthcoming property
related or corporate regulation could result in financial penalties
or loss of business or credibility.
·
People - The Group's business is partially dependent on the
skills of a small number of key individuals. Loss of key
individuals or an inability to attract new employees with the
appropriate expertise could reduce the effectiveness with which the
Group conducts its business.
·
Development
risk - There is a risk that where capital expenditure and
development projects are undertaken, that delays and other issues
may lead to increased cost and reputational damage. There is
also the risk that planned realisation of value is not achieved,
for example if the property cannot subsequently be sold for the
anticipated amount or if tenants are not contracted on sufficiently
attractive terms. Competing schemes may reduce footfall and
reduce tenant demand for space and the levels of rents which can be
achieved
·
Business
disruption from a major incident - The threat of a major incident,
including the COVID-19 pandemic, impacting one or more of the
Group's assets. There is a risk of financial losses if unable
to trade or impacts upon shopper footfall and reputational and
financial damage if business has or is perceived to have acted
negligently
· Responsible business risk -
Failure to act on environmental and social issues could lead to
reputational damage, deterioration in relationships with customers
and communities and limit investment opportunities. Failure to
comply with regulations could result in financial exposure.
Health and safety incidents could result in reputational
damage, financial liability for the Group and potentially criminal
liability for the directors.
·
Customers and
changing consumer trends - Changes in consumer shopping habits
towards online purchasing and delivery and the increase of CVAs by
retailers and other retailer restructurings may adversely impact
footfall in shopping centres and potentially reduce tenant demand
for space and the levels of rents which can be
achieved.
·
IT & Cyber Security - The risk of IT failures or
malicious attacks causing reputational or financial damage to the
business through loss of business time and opportunities or
potential fines or regulatory penalties.
·
Health & Safety - The Group could face criminal charges,
financial loss and reputational damage if it or individuals in
management positions were found to
have failed processes or been negligent in their
actions.
The risks noted above do not
comprise all those potentially faced by the Group and are not
intended to be presented in any order of priority.
Additional risks and uncertainties currently
unknown to the Group, or which the Group currently deems
immaterial, may also have an adverse effect on the financial
condition or business of the Group in the future. These issues are
kept under constant review to allow the Group to react in an
appropriate and timely manner to help mitigate the impact of such
risks.
Responsibility statement
The directors confirm that to the
best of their knowledge:
·
the condensed set of financial
statements has been prepared in accordance with UK adopted IAS 34
"Interim Financial Reporting";
·
the interim management report
includes a fair review of the information required by DTR 4.2.7R
(indication of important events during the first six months and
description of principal risks and uncertainties for the remaining
six months of the year); and
·
the interim management report
includes a fair review of the information required by DTR 4.2.8R
(disclosure of related party transactions and changes
therein).
By order of the Board
Lawrence
Hutchings
Stuart Wetherly
Chief
Executive
Group Finance Director
31 July
2024
31 July 2024
INDEPENDENT REVIEW REPORT TO CAPITAL & REGIONAL
PLC
Conclusion
We have been engaged by Capital
& Regional plc ("the Company") to review the condensed set of
financial statements in the half-yearly financial report for the
six months ended 30 June 2024 which comprise the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated balance sheet,
the condensed consolidated statement of changes in equity, the
condensed consolidated statement of cash flows, and related notes
(the "Interim financial information").
Based on our review, nothing has
come to our attention that causes us to believe that the condensed
consolidated set of financial statements in the half-yearly
financial report for the six months ended 30 June 2024 is not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, , 'Interim Financial
Reporting', and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410 (Revised), "Review of Interim Financial Information Performed
by the Independent Auditor of the Entity" issued for use in the
United Kingdom. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2, the annual
financial statements of the Company are prepared in accordance with
UK adopted IFRS. The condensed set of financial statements included
in this half-yearly financial report have been prepared in
accordance with UK adopted International Accounting Standard 34,
"Interim Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis of Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or
that management have identified material uncertainties relating to
going concern that are not appropriately disclosed.
This conclusion is based on the
review procedures performed in accordance with ISRE (UK) 2410
(Revised), however future events or conditions may cause the entity
to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for
preparing the half-yearly financial report in accordance with UK
adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
In preparing the half-yearly
financial report, the directors are responsible for assessing the
Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly
report, we are responsible for expressing to the Company a
conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our
Conclusions Relating to Going Concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for Conclusion paragraph of this report.
Use of review report
This report is made solely to the
Company in accordance with ISRE (UK) 2410 (Revised) issued by the
Financial Reporting Council. Our work has been undertaken so that
we might state to the Company those matters we are required to
state to them in an independent review report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company, for our
review work, for this report, or for the conclusions we have
formed.
Sanjay Ranchhoojee (Senior
Statutory Auditor)
For and on behalf of Forvis Mazars
LLP
Chartered Accountants and
Statutory Auditor
30 Old Bailey,
London, United Kingdom
EC4M 7AU
Date: 31 July 2024
Condensed consolidated income statement
For the six months to 30 June
2024
|
|
Unaudited Six months to 30
June
2024
|
Unaudited
Six
months to
30
June
2023
(restated)1
|
Audited
Year
to
30
December
2023
|
|
Note
|
£m
|
£m
|
£m
|
Continuing operations
|
|
|
|
|
Revenue
|
3b,
4
|
34.5
|
28.5
|
59.0
|
Reversal of expected credit
loss
|
|
0.3
|
-
|
0.1
|
Cost of sales
|
|
(18.5)
|
(14.2)
|
(31.5)
|
Gross profit
|
|
16.3
|
14.3
|
27.6
|
Administrative costs
|
|
(4.9)
|
(4.8)
|
(9.9)
|
Loss on revaluation of investment
properties
|
3a,
7a
|
(1.5)
|
(0.3)
|
(8.1)
|
Other gains and losses
|
|
-
|
(0.5)
|
(0.1)
|
Profit on ordinary activities before
financing
|
|
9.9
|
8.7
|
9.5
|
Finance income
|
|
0.4
|
0.3
|
0.5
|
Finance costs
|
|
(5.2)
|
(4.1)
|
(9.9)
|
Profit before tax
|
|
5.1
|
4.9
|
0.1
|
Tax (charge)/credit
|
5
|
(0.6)
|
1.2
|
3.6
|
Profit for the period
|
|
4.5
|
6.1
|
3.7
|
|
|
|
|
|
All
results derive from continuing operations
|
|
|
|
|
Basic earnings per share
|
6
|
2.0p
|
3.6p
|
2.0p
|
Diluted earnings per
share
|
6
|
2.0p
|
3.5p
|
1.9p
|
|
|
|
|
|
EPRA earnings per share
|
|
|
|
|
EPRA basic earnings per
share
|
6
|
3.4p
|
4.2p
|
5.6p
|
EPRA diluted earnings per
share
|
6
|
3.3p
|
4.1p
|
5.5p
|
Condensed consolidated statement of comprehensive
income
For the six months to 30 June
2024
|
Unaudited
six months
to
30 June
2024
|
Unaudited
six
months to
30
June
2023
|
Audited
Year
to
30
December 2023
|
|
£m
|
£m
|
£m
|
Profit for the period
|
4.5
|
6.1
|
3.7
|
Other comprehensive
income
|
-
|
-
|
-
|
Total comprehensive income for the period
|
4.5
|
6.1
|
3.7
|
The results for the current and
preceding periods are fully attributable to equity
shareholders.
The EPRA alternative performance
measures used throughout this report are industry best practice
performance measures established by the European Public Real Estate
Association (EPRA). They are defined in the Glossary to the
Financial Statements. EPRA Earnings and EPRA EPS are shown in
Note 6 to these condensed financial statements. EPRA net
reinstatement value (NRV), net tangible assets (NTA) and net
disposal value (NDV) are shown in Note 16 to these condensed
financial statements. We consider EPRA NTA to be the most
relevant measure for our business.
1 Comparative figures for the period to 30 June 2023 have been
restated for an adjustment to service charge income and expenditure
recognised in the period. There is no impact on Profit as
explained in note 2.
Condensed consolidated balance sheet
At 30 June 2024
|
|
|
Unaudited
30 June
2024
|
Audited
30 December
2023
|
|
|
Note
|
£m
|
£m
|
Non-current assets
|
|
|
|
|
Investment properties
|
|
7
|
371.5
|
369.6
|
Plant and equipment
|
|
8
|
3.6
|
3.5
|
Right of use assets
|
|
9
|
18.9
|
20.1
|
Receivables and other
assets
|
|
10
|
9.1
|
7.8
|
Deferred tax
|
|
|
3.0
|
3.6
|
Total non-current assets
|
|
|
406.1
|
404.6
|
|
|
|
|
|
Current assets
|
|
|
|
|
Receivables and other
assets
|
|
10
|
11.4
|
16.5
|
Cash and cash equivalents
|
|
11
|
40.3
|
38.2
|
Total current assets
|
|
|
51.7
|
54.7
|
Total assets
|
|
|
457.8
|
459.3
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
12
|
(27.7)
|
(30.2)
|
Lease liabilities
|
|
13
|
(3.1)
|
(3.1)
|
Bank loans
|
|
14
|
-
|
(42.7)
|
Total current liabilities
|
|
|
(30.8)
|
(76.0)
|
Net
current assets/(liabilities)
|
|
|
20.9
|
(21.3)
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Bank loans
|
|
14
|
(197.9)
|
(155.0)
|
Other payables
|
|
|
(0.2)
|
(0.3)
|
Lease liabilities
|
|
13
|
(25.0)
|
(26.0)
|
Total non-current liabilities
|
|
|
(223.1)
|
(181.3)
|
Total liabilities
|
|
|
(253.9)
|
(257.3)
|
|
|
|
|
|
Net
assets
|
|
|
203.9
|
202.0
|
|
|
|
|
|
Equity
|
|
|
|
|
Share capital
|
|
|
23.3
|
22.5
|
Share premium
|
|
|
27.6
|
24.6
|
Merger reserve
|
|
|
60.3
|
60.3
|
Own shares reserve
|
|
|
(0.2)
|
(0.2)
|
Retained earnings
|
|
|
92.9
|
94.8
|
Equity shareholders' funds
|
|
|
203.9
|
202.0
|
|
|
|
|
|
Basic net assets per
share
|
|
16
|
87.5p
|
89.8p
|
EPRA net reinstatement value per
share
|
|
16
|
85.2p
|
87.9p
|
EPRA net tangible assets per
share
|
|
16
|
85.2p
|
87.9p
|
EPRA net disposal value per
share
|
|
16
|
91.1p
|
93.5p
|
Condensed consolidated cash flow statement
For the six months to 30 June
2024
|
|
Unaudited
Six months
to 30 June 2024
|
Unaudited
Six months
to 30 June 2023
|
Audited
Year to 30 December
2023
|
|
Note
|
£m
|
£m
|
£m
|
Operating activities
|
|
|
|
|
Net cash from operations
|
15
|
11.6
|
10.0
|
20.1
|
Interest paid
|
|
(4.0)
|
(3.3)
|
(6.6)
|
Interest received
|
|
0.4
|
0.3
|
0.5
|
Cash flows from operating activities
|
|
8.0
|
7.0
|
14.0
|
|
|
|
|
|
Investing activities
|
|
|
|
|
Purchase of plant and
equipment
|
|
(0.5)
|
(0.6)
|
(2.0)
|
Acquisition costs relating to
investment properties
|
|
-
|
-
|
(43.0)
|
Capital expenditure on investment
properties
|
|
(2.4)
|
(11.1)
|
(18.7)
|
Cash flows from investing activities
|
|
(2.9)
|
(11.7)
|
(63.7)
|
|
|
|
|
|
Financing activities
|
|
|
|
|
Dividends paid (net of scrip)
including withholding tax
|
|
(1.4)
|
(1.4)
|
(5.2)
|
Bank loans drawn down
|
|
-
|
-
|
16.0
|
Loan arrangement costs
|
|
(0.1)
|
-
|
(0.6)
|
Derivatives purchased
|
|
(1.3)
|
-
|
(1.3)
|
Issue of ordinary shares
|
|
-
|
-
|
25.0
|
Costs of share issue
|
|
-
|
-
|
(1.1)
|
Fixed payment under head
leases
|
|
(0.2)
|
(0.3)
|
(0.4)
|
Cash flows from financing activities
|
|
(3.0)
|
(1.7)
|
32.4
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents
|
|
2.1
|
(6.4)
|
(17.3)
|
Cash and cash equivalents at the
beginning of the period
|
|
38.2
|
55.5
|
55.5
|
Cash and cash equivalents at the end of the
period
|
|
40.3
|
49.1
|
38.2
|
Notes to the condensed financial statements
For the six months to 30 June
2024
1
General information
The comparative information
included for the year ended 30 December 2023 does not constitute
statutory accounts as defined in section 434 of the Companies Act
2006. A copy of the statutory accounts for that year has been
delivered to the Registrar of Companies. The auditor has reported
on those accounts: their report was unqualified, did not draw
attention to any matters by way of emphasis and did not contain a
statement under section 498(2) or (3) of the Companies Act
2006.
The Group's financial performance
is not materially impacted by seasonal fluctuations.
2
Accounting policies
Basis of preparation
The annual financial statements of
Capital & Regional plc are prepared in accordance with IFRS as
adopted by the United Kingdom. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with IAS 34 "Interim Financial Reporting" as
adopted by the United Kingdom. The financial statements are
prepared in GBP being the functional currency of the
Group.
The condensed consolidated interim
financial information has been prepared on the basis of the
accounting policies, significant judgements, key assumptions and
estimates as set out in the notes to the Group's annual financial
statements for the year ended 30 December 2023. Taxes on income in
the interim periods are accrued using the tax rate that would be
applicable to expected earnings in the period.
Fair value is the price that would
be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement
date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair
value of an asset or liability, the Group takes into account the
characteristics of the asset or liability if market participants
would take those characteristics into account when pricing the
asset or liability at the measurement date. Fair value for
measurement and/or disclosure purposes in these financial
statements is determined on such basis, except for share-based
payments that are within the scope of IFRS 2, leasing transactions
that are within the scope of IFRS 16, and measurements that have
some similarities to fair value but are not fair value, such as net
realisable value in IAS 2 or value in use in IAS 36.
In addition, for financial
reporting purposes, fair value measurements are categorised into
Level 1, 2 or 3 based on the degree to which the inputs to the fair
value measurements are observable and the significance of the
inputs to the fair value measurement in its entirety, which are
described as follows:
·
Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities.
·
Level 2 inputs are inputs other than quoted
prices included within Level 1, that are observable for the asset
or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
·
Level 3 inputs are unobservable inputs for the
asset or liability.
The Half-Year Report was approved
by the Board on 31 July 2024.
Prior period restatement
A prior period adjustment has been
made in respect of the service charge income and expenditure
recognised to 30 June 2023, the impact of which is a £2.2 million
reduction in Revenue and a corresponding £2.2 million reduction in
Cost of Sales. The impact on Profit and Net Asset Value is
£nil.
Key judgements and sources of estimation
uncertainty
The preparation of financial
statements requires the Directors to make estimates that may affect
the reported amounts of assets and liabilities, income and
expenses. The key sources of estimation uncertainty are as
reported in the annual audited financial statements for the year
ended 30 December 2023. With the exception of those below, there
are no key judgements impacting the financial
statements.
Property valuation
The valuation of the Group's
property portfolio is inherently subjective due to, among other
factors, the individual nature of each property, its location and
the expected future rental revenues from that particular property.
As a result, the valuations the Group places on its property
portfolio are subject to a degree of uncertainty and are made on
the basis of assumptions which may not prove to be accurate. We are
now in a phase of the valuation cycle where there is persistent
negative sentiment and low transactional evidence as such greater
judgement has been applied.
The investment property valuation
contains a number of assumptions upon which the valuation of the
Group's properties as at 30 June 2024 was based. The assumptions on
which the property valuation reports have been based include, but
are not limited to, matters such as the tenure and tenancy details
for the properties, the condition of the properties, prevailing
market yields and comparable market transactions. These assumptions
are market standard and accord with the Royal Institution of
Chartered Surveyors (RICS) Valuation - Professional Standards UK
2014 (revised January 2022).
If the assumptions upon which the
valuation was based prove to be inaccurate, this may have an impact
on the value of the Group's investment properties, which could in
turn have an effect on the Group's financial position and results.
Estimated rental values and equivalent yields are considered key
assumptions. Note 7c provides sensitivity analysis estimating the
impact that changes in the estimated rental values or equivalent
yields would have on the Group's property valuations. Valuations
are discussed further in note 7.
Deferred tax
Deferred tax liabilities are
generally provided for in full and deferred tax assets are
recognised to the extent that it is judged probable that future
taxable profit will arise against which the temporary differences
will be utilised. In particular, the Company has exercised
judgement in respect of the deferred tax asset held on the
Statement of Financial Position. Based on the Company's forecasts,
it is considered probable that this will be utilised over a
reasonable timeframe.
2
Accounting policies (continued)
Increase in credit risk
When measuring expected credit
loss the Group uses reasonable and supportable forward looking
information, which is based on assumptions for the future movement
of different economic drivers and how these drivers will affect
each other. In assessing whether the credit risk of an asset has
significantly increased the Group takes into account qualitative
and quantitative reasonable and supportable forward looking
information. Probability of default constitutes a key input in
measuring expected credit losses (ECL). Probability of default is
an estimate of the likelihood of default over a given time horizon,
the calculation of which includes historical data, assumptions and
expectations of future conditions. Receivables are discussed in
note 10.
Going concern
Under the UK Corporate Governance
Code the Board needs to report whether the business is a going
concern. In making its assessment of Going Concern, the Group has
considered the general risk environment and the specific risks that
relate to the Group and its sector.
At 30 June 2024, the Group had
total cash at bank on balance sheet of £36.4 million, of which
£20.8 million was held centrally outside of secured loan
arrangements. This provides a significant cash contingency to cover
any reasonable disruption to operations in both the base and
downside scenarios that have been modelled for at least the period
of the next 18 months that is considered for going concern
purposes.
In respect of the £140 million
Mall debt the Group is currently compliant with all covenant tests
on the facility. On the Ilford £39 million facility, as well
as extending the loan maturity to September 2025 and agreeing
further loan extension options out to December 2027 the Group have
agreed various improvements to covenant terms that run until the
new maturity and beyond if the extension options are triggered.
On Hemel Hempstead the Group has a waiver of all covenants on
the £4 million loan facility until maturity in July 2025. The
Group also has also an option to extend maturity by one or two
years. The Group signed a £16 million loan facility in
September 2023 to part finance the acquisition of Gyle in
Edinburgh.
All of the Group's asset backed
loan facilities are ring-fenced within their own SPV structures
with no recourse to Capital & Regional plc and no cross-default
provisions.
In making its assessment of Going
Concern, the Group has run updated forecasts on both a base case
and downside basis. In the latter, the Group has sensitised rent
collection to 90%, reduced car park and ancillary income by 10% and
removed any contribution from Snozone to reflect how a significant
downturn in expected trading could impact cashflows. The Group has
also considered a 15% reduction in property valuations both from
the Group's 30 June 2024 valuations and valuations undertaken by
the Group's respective lenders.
The combination of the cash
maintained on the Group's balance sheet and actions available
within management's control provides sufficient contingency to
cover all of the various downside sensitivities modelled in
combination to the most adverse end of the scenarios modelled.
At the most adverse end the Group would need to take some
additional measures to preserve cash involving some combination of
reducing or deferring Capital Expenditure and/or reducing dividend
payments or utilising a Scrip option.
In coming to its Going Concern
conclusion, the Group has also considered, but not relied upon,
other options available to generate or conserve additional cash, to
reduce debt levels and to fund value accretive capital expenditure
and letting initiatives. These include but are not limited to the
potential disposal of assets either in whole or part and the
potential raising of additional funds.
Having due regard to all of the
above matters and after making appropriate enquiries, the Directors
have a reasonable expectation that the Group and the Company have
adequate resources to continue in operational existence for the
foreseeable future. Therefore, the Board continues to adopt the
Going Concern basis in preparing the financial
statements.
New and revised standards issued and are
effective
The adoption of the following
standards, amendments, and interpretations in the current year has
not had a material impact upon the Groups results.
Amendments to IFRS 17 Insurance
Contracts
Amendments to IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors: Definition of
Accounting Estimates
Amendments to IAS 12 Income Taxes:
Deferred Tax related to Assets and Liabilities arising from single
transaction
International Tax Reform-Pillar
Two Model Rules - Amendments to IAS 12
Amendments to IAS 1 - Presentation
of Financial Statements and IFRS Practice Statement 2 Making
Materiality Judgements: Disclosure of Accounting
Policies
New and revised standards issued but not yet
effective
At the date of authorisation of
these financial statements, the Group has not applied the following
new and revised IFRS Standards that have been issued but are not
yet effective:
Amendment to IFRS 16 - Leases:
Lease liability in a sale and leaseback
Amendment to IAS 1 -
Classification of Liabilities as Current or Non-Current
Amendments to IAS 7 - Statement of
cash flows and IFRS 7 Financial Instruments: Disclosures: Supplier
finance Agreement
Amendments to IAS 21 - The effects
of changes in foreign exchange rates lack of
exchangeability
Amendments to IFRS 9 Financial
Instruments and IFRS 7 Financial Instruments: Disclosures:
Classification and Measurement of Financial Instruments
IFRS 18 Presentation and
Disclosure in Financial Statements
IFRS 19 Subsidiaries without
Public Accountability: Disclosures
None of these standards are
anticipated to have a material impact upon the Group's
results.
3
Operating segments
3a
Operating segment performance
The Group's operating segments are
Shopping Centres, Snozone and Group/Central. Shopping Centres
includes the results of the Group's centres at Ilford, Hemel
Hempstead, and those centres within The Mall loan facility, namely
Maidstone, Walthamstow and Wood Green. It also includes the results
of Gyle shopping centre in Edinburgh from the date of acquisition
on 6 September 2023.
Group/Central includes management
fee income, Group overheads incurred by Capital & Regional plc,
Capital & Regional Property Management and other subsidiaries
and the interest expense on the Group's central borrowing
facility.
The Shopping Centres segments
derive their revenue from the rental of investment properties. The
Snozone and Group/ Central segments derive their revenue from the
operation of indoor ski slopes and the management of property funds
or schemes respectively. The split of revenue between these
classifications satisfies the requirement of IFRS 8 to report
revenues from different products and services. Depreciation and
charges in respect of share-based payments represent the only
significant non-cash expenses.
|
|
|
|
|
|
|
|
|
Shopping
Centres
|
Snozone
|
Group/
Central
|
Total
|
Six
months to 30 June 2024 (Unaudited)
|
Note
|
|
£m
|
£m
|
£m
|
£m
|
Rental income from external
sources
|
3b
|
|
20.1
|
-
|
-
|
20.1
|
Property and void
costs1
|
|
|
(6.4)
|
-
|
-
|
(6.4)
|
Net rental income
|
|
|
13.7
|
-
|
-
|
13.7
|
Net
interest expense
|
|
|
(4.6)
|
-
|
0.4
|
(4.2)
|
Snozone
income/Management fees2
|
3b
|
|
-
|
8.3
|
0.7
|
9.0
|
Snozone/Management
expenses
|
|
|
-
|
(6.4)
|
(3.3)
|
(9.7)
|
Depreciation
|
|
|
-
|
-
|
(0.2)
|
(0.2)
|
Variable overhead
|
|
|
-
|
-
|
(0.4)
|
(0.4)
|
Adjusted Profit/(loss)
|
|
|
9.1
|
1.9
|
(2.8)
|
8.2
|
Revaluation of properties
|
|
|
(1.5)
|
-
|
-
|
(1.5)
|
Snozone depreciation and
amortisation
|
|
|
-
|
(1.1)
|
-
|
(1.1)
|
Notional interest (net of rent
expense within EBITDA)
|
|
|
-
|
0.8
|
-
|
0.8
|
Loss on financial
instruments
|
|
|
(0.6)
|
-
|
-
|
(0.6)
|
Long-term incentives
|
|
|
-
|
-
|
(0.3)
|
(0.3)
|
Tax (charge)/credit
|
|
|
-
|
-
|
(0.6)
|
(0.6)
|
Other items
|
|
|
-
|
-
|
(0.4)
|
(0.4)
|
Profit/(loss)
|
|
|
7.0
|
1.6
|
(4.1)
|
4.5
|
|
|
|
|
|
|
|
Total assets
|
3b
|
|
406.9
|
24.2
|
26.7
|
457.8
|
Total liabilities
|
3b
|
|
(224.1)
|
(25.8)
|
(4.0)
|
(253.9)
|
Net
assets/(liabilities)
|
|
|
182.8
|
(1.6)
|
22.7
|
203.9
|
|
|
|
|
|
|
|
|
|
| |
1 Includes expected credit loss.
2 Asset management fees of £1.2 million charged from the
Group's Capital & Regional Property Management entity to the
Group's Shopping Centres have been excluded from the table
above.
3
Operating segments (continued)
3a Operating segment performance
|
|
|
Shopping
Centres
|
Snozone
|
Group/
Central
|
Total
|
Six
months to 30 June 2023 (Unaudited)
|
Note
|
|
£m
|
£m
|
£m
|
£m
|
Rental income from external
sources
|
3b
|
|
16.6
|
-
|
-
|
16.6
|
Property and void
costs1
|
|
|
(4.9)
|
-
|
-
|
(4.9)
|
Net rental income
|
|
|
11.7
|
-
|
-
|
11.7
|
Net interest expense
|
|
|
(3.7)
|
-
|
0.2
|
(3.5)
|
Snozone income/Management
fees2
|
3b
|
|
-
|
7.7
|
1.2
|
8.9
|
Snozone/Management
expenses
|
|
|
-
|
(6.1)
|
(3.2)
|
(9.3)
|
Depreciation
|
|
|
-
|
-
|
(0.1)
|
(0.1)
|
Variable overhead
|
|
|
-
|
-
|
(0.7)
|
(0.7)
|
Adjusted Profit/(loss)
|
|
|
8.0
|
1.6
|
(2.6)
|
7.0
|
Revaluation of properties
|
|
|
(0.3)
|
-
|
-
|
(0.3)
|
Loss on disposal/transaction
costs
|
|
|
(0.6)
|
-
|
-
|
(0.6)
|
Snozone depreciation and
amortisation
|
|
|
-
|
(1.0)
|
-
|
(1.0)
|
Notional interest (net of rent
expense within EBITDA)
|
|
|
-
|
0.3
|
-
|
0.3
|
Gain on financial
instruments
|
|
|
(0.3)
|
-
|
-
|
(0.3)
|
Long-term incentives
|
|
|
-
|
-
|
(0.4)
|
(0.4)
|
Tax (charge)/credit
|
|
|
-
|
(0.3)
|
1.5
|
1.2
|
Other items
|
|
|
0.2
|
-
|
-
|
0.2
|
Profit/(loss)
|
|
|
7.0
|
0.6
|
(1.5)
|
6.1
|
|
|
|
|
|
|
|
Total assets
|
3b
|
|
369.6
|
26.0
|
28.9
|
424.5
|
Total liabilities
|
3b
|
|
(210.1)
|
(27.6)
|
(3.6)
|
(241.3)
|
Net
assets/(liabilities)
|
|
|
159.5
|
(1.6)
|
25.3
|
183.2
|
|
|
|
|
|
|
|
|
|
| |
1 Includes expected credit loss.
2 Asset management fees of £1.1 million charged from the
Group's Capital & Regional Property Management entity to the
Group's Shopping Centres have been excluded from the table
above.
3
Operating segments (continued)
3a
Operating segments
|
|
Shopping
Centres
|
|
|
|
|
|
Snozone
|
Group/
Central
|
Total
|
Year to 30 December 2023
|
Note
|
£m
|
£m
|
£m
|
£m
|
Rental income from external
sources
|
3b
|
34.7
|
-
|
-
|
34.7
|
Property and void
costs1
|
|
(10.8)
|
-
|
-
|
(10.8)
|
Net rental income
|
|
23.9
|
-
|
-
|
23.9
|
Interest income
|
|
|
|
0.5
|
0.5
|
Interest
expense
|
|
(7.9)
|
-
|
-
|
(7.9)
|
Snozone
income/Management fees2
|
3b
|
-
|
14.9
|
1.9
|
16.8
|
Management expenses
|
|
-
|
(12.6)
|
(6.3)
|
(18.9)
|
Depreciation
|
|
-
|
-
|
(0.3)
|
(0.3)
|
Variable overhead
|
|
-
|
-
|
(1.4)
|
(1.4)
|
Adjusted Profit/(loss)
|
|
16.0
|
2.3
|
(5.6)
|
12.7
|
Revaluation of properties
|
|
(8.1)
|
-
|
-
|
(8.1)
|
Loss on disposal/transaction
costs
|
|
(0.3)
|
-
|
-
|
(0.3)
|
Snozone depreciation and
amortisation
|
|
-
|
(2.2)
|
-
|
(2.2)
|
Notional interest (net of rent
expense within EBITDA)
|
|
-
|
0.8
|
-
|
0.8
|
Loss on financial
instruments
|
|
(2.0)
|
-
|
-
|
(2.0)
|
Long-term incentives
|
|
-
|
-
|
(0.8)
|
(0.8)
|
Tax credit
|
|
-
|
(0.3)
|
3.9
|
3.6
|
Profit/(loss)
|
|
5.6
|
0.6
|
(2.5)
|
3.7
|
|
|
|
|
|
|
Total assets
|
3b
|
408.5
|
26.0
|
24.8
|
459.3
|
Total liabilities
|
3b
|
(225.2)
|
(28.8)
|
(3.3)
|
(257.3)
|
Net
assets/(liabilities)
|
|
183.3
|
(2.8)
|
21.5
|
202.0
|
|
|
|
|
|
| |
1 Includes expected credit loss.
2 Asset management fees of £2.3 million charged from the
Group's Capital & Regional Property Management entity to wholly
owned assets have been excluded from the table above as they are
eliminated within the Group consolidation.
3b
Reconciliations of reportable revenue, assets and
liabilities
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Six months
to
|
Six
months to
|
Year
to
|
|
|
30 June
|
30
June
|
30
December
|
|
|
2024
|
2023
(restated)1
|
2023
|
Revenue
|
Note
|
£m
|
£m
|
£m
|
Rental income from external sources
including associates
|
3a
|
20.1
|
16.6
|
34.7
|
Other revenue
|
|
-
|
-
|
0.1
|
Service charge income
|
|
5.8
|
3.3
|
8.2
|
Management fees
|
3a
|
0.7
|
1.3
|
1.9
|
Snozone income
|
3a
|
8.3
|
7.7
|
14.9
|
Revenue for reportable
segments
|
|
34.9
|
28.9
|
59.8
|
Elimination of inter-segment
revenue
|
|
(0.4)
|
(0.4)
|
(0.8)
|
Revenue and other income per consolidated income
statement
|
|
34.5
|
28.5
|
59.0
|
|
|
|
|
|
|
|
| |
Revenue by country
|
|
|
|
UK
|
32.2
|
26.4
|
55.0
|
Spain
|
2.3
|
2.1
|
4.0
|
Revenue and other income per consolidated income
statement
|
34.5
|
28.5
|
59.0
|
1 Comparative figures for the period to 30 June 2023 have been
restated for an adjustment to service charge income and expenditure
recognised in the period. There is no impact on
Profit.
3
Operating segments (continued)
3b Reconciliations of reportable revenue, assets and
liabilities (continued)
|
Unaudited
|
Unaudited
|
Audited
|
|
Six months
to
|
Six
months to
|
Year
to
|
|
30 June
|
30
June
|
30
December
|
|
2024
|
2023
|
2023
|
Assets
|
£m
|
£m
|
£m
|
Shopping Centres
|
406.9
|
369.6
|
408.5
|
Snozone
|
24.2
|
26.0
|
26.0
|
Group/Central
|
26.7
|
28.9
|
24.8
|
Total assets of reportable segments
and Group assets
|
457.8
|
424.5
|
459.3
|
|
|
|
|
Liabilities
|
|
|
|
Shopping Centres
|
(224.1)
|
(210.1)
|
(225.2)
|
Snozone
|
(25.8)
|
(27.6)
|
(28.8)
|
Group/Central
|
(4.0)
|
(3.6)
|
(3.3)
|
Total liabilities of reportable
segments and Group liabilities
|
(253.9)
|
(241.3)
|
(257.3)
|
|
|
|
|
Net
assets by country
|
|
|
|
UK
|
202.7
|
182.0
|
200.4
|
Spain
|
1.2
|
1.2
|
1.6
|
Group net assets
|
203.9
|
183.2
|
202.0
|
4
Revenue
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Six months
to
|
Six
months to
|
Year
to
|
|
|
30 June
|
30
June
|
30
December
|
|
|
2024
|
2023
(restated)1
|
2023
|
Statutory
|
|
£m
|
£m
|
£m
|
Gross rental income
|
|
16.0
|
13.1
|
27.2
|
Car park and other ancillary
income
|
|
4.1
|
3.5
|
7.5
|
Rental income from external
sources
|
|
20.1
|
16.6
|
34.7
|
Service charge income
|
|
5.8
|
3.3
|
8.2
|
External management fees
|
|
0.3
|
0.9
|
1.1
|
Snozone income
|
|
8.3
|
7.7
|
14.9
|
Other income
|
|
-
|
-
|
0.1
|
Revenue and other income per consolidated income
statement
|
|
34.5
|
28.5
|
59.0
|
|
|
|
|
| |
1 Comparative figures for the period to 30 June 2023 have been
restated for an adjustment to service charge income and expenditure
recognised in the period. There is no impact on
Profit.
5
Tax
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Six months
to
|
Six
months to
|
Year
to
|
|
|
30 June
|
30
June
|
30
December
|
|
|
2024
|
2023
|
2023
|
Tax
(charge)/credit
|
|
£m
|
£m
|
£m
|
UK corporation tax
|
|
-
|
-
|
-
|
Adjustments in respect of prior
years
|
|
-
|
1.1
|
1.0
|
Total current tax credit
|
|
-
|
1.1
|
1.0
|
|
|
|
|
|
Deferred tax
|
|
(0.6)
|
0.1
|
2.6
|
Total tax (charge)/credit
|
|
(0.6)
|
1.2
|
3.6
|
5
Tax (continued)
|
Unaudited
|
Unaudited
|
Audited
|
|
Six months
to
|
Six
months to
|
Year
to
|
|
30 June
|
30
June
|
30
December
|
|
2024
|
2023
|
2023
|
Tax
credit/(charge) reconciliation
|
£m
|
£m
|
£m
|
Profit before tax on continuing
operations
|
5.1
|
4.9
|
0.1
|
Expected tax charge at 25% (30 June
2023 22% and 30 December 2023: 23.52%)
|
(1.3)
|
(0.9)
|
-
|
REIT exempt income and
gains
|
0.9
|
0.7
|
(0.2)
|
Non-allowable expenses and
non-taxable items
|
(0.2)
|
(0.3)
|
(1.3)
|
Excess tax losses
|
-
|
0.5
|
0.7
|
Prior year adjustments
|
-
|
1.1
|
1.0
|
Movement in deferred
taxes
|
-
|
0.1
|
3.4
|
Total tax (charge)/credit - continuing
operations
|
(0.6)
|
1.2
|
3.6
|
|
|
|
| |
On 10 June 2021 Finance Act 2021
received Royal Assent and enacted provisions maintaining the main
corporation tax rate at 19% for the year commencing 1 April 2022
and increasing the rate to 25% for the year commencing 1 April
2023.
Consequently the UK corporation tax
rate at which deferred tax is booked in the Financial Statements is
25% (June 2023: 22%).
The Group has recognised a
deferred tax asset of £3 million (30 December 2023: £3.6 million).
The group has recognised deferred tax assets for the non-REIT
profit entities in respect of head lease payments and capital
allowances and certain residual tax losses carried forward to the
extent that future matching taxable profits are expected to
arise.
No deferred tax asset has been
recognised in respect of temporary differences arising from
investments or investments in associates in the current or prior
years as it is not certain that a deduction will be available when
the asset crystallises.
The Group has £17.2 million (30
December 2023: £20 million) of unused revenue tax losses, all of
which are in the UK. A deferred tax asset has been recognised in
respect of £6.3 million of these losses (30 December 2023: £9.1
million) where the Group considers it is sufficiently certain
taxable profits will arise to utilise the losses. A deferred tax
asset has not been recognised on the remaining £10.9 million of
those losses due to restrictions on the utilisation of these
losses. The Group also has unused capital losses of £24.2 million
(30 December 2023: £24.2 million) that are available for offset
against future gains. No deferred tax has been recognised in
respect of these losses owing to the unpredictability of future
capital gains and other reasons which may restrict the utilisation
of the losses. The unused revenue and capital losses do not have an
expiry date.
The Group converted to a group
REIT on 31 December 2014. Therefore, the Group does not pay UK
corporation tax on the profits and gains from qualifying rental
business in the UK provided it meets certain conditions.
Non-qualifying profits and gains of the Group continue to be
subject to corporation tax as normal. In order to retain group REIT
status certain ongoing criteria must be maintained. The main
criteria are as follows:
·
at the start of each accounting year, the value
of the assets of the property rental business plus cash must be at
least 75% of the total value of the Group's assets;
·
at least 75% of the Group's total profits must
arise from the property rental business; and
·
at least 90% of the Group's UK property rental
profits as calculated under tax rules must be
distributed.
The Directors intend that the
Group should continue as a group REIT for the foreseeable future,
with the result that deferred tax is no longer recognised on
temporary differences relating to the property rental
business.
6
Earnings per share
The European Public Real Estate
Association ("EPRA") has issued recommendations for the calculation
of earnings per share information as shown in the following
table:
|
|
Six months to 30 June
2024 (unaudited)
|
Six
months to 30 June 2023
(unaudited)
|
Year to
30 December 2023
(audited)
|
|
|
Note
|
Profit
|
EPRA
|
Adjusted
Profit
|
Profit
|
EPRA
|
Adjusted
Profit
|
Profit
|
EPRA
|
Adjusted
Profit
|
|
Profit (£m)
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
4.5
|
4.5
|
4.5
|
6.1
|
6.1
|
6.1
|
3.7
|
3.7
|
3.7
|
|
Revaluation (loss)/gain on
investment properties (net of tax)
|
3a
|
-
|
1.5
|
1.5
|
-
|
0.3
|
0.3
|
-
|
8.1
|
8.1
|
|
Loss on disposal (net of
tax)
|
3a
|
-
|
-
|
-
|
-
|
0.6
|
0.6
|
-
|
0.3
|
0.3
|
|
Changes in fair value of financial
instruments
|
3a
|
-
|
0.6
|
0.6
|
-
|
0.3
|
0.3
|
-
|
2.0
|
2.0
|
|
Share-based payments
|
3a
|
-
|
-
|
0.3
|
-
|
-
|
0.4
|
-
|
-
|
0.8
|
|
Tax
|
|
-
|
0.6
|
0.6
|
-
|
-
|
(1.2)
|
-
|
(3.6)
|
(3.6)
|
|
Other items1
|
|
-
|
0.4
|
0.7
|
-
|
(0.2)
|
0.5
|
-
|
-
|
1.4
|
|
Profit
|
|
4.5
|
7.6
|
8.2
|
6.1
|
7.1
|
7.0
|
3.7
|
10.5
|
12.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share2
|
|
2.0p
|
3.4p
|
3.6p
|
3.6p
|
4.2p
|
4.2p
|
2.0p
|
5.6p
|
6.8p
|
|
Diluted earnings per share2
|
2.0p
|
3.3p
|
3.6p
|
3.5p
|
4.2p
|
4.1p
|
1.9p
|
5.5p
|
6.6p
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
1 Other Items includes the adjustments for Leisure
EBITDA.
2 EPRA and Adjusted Profit earnings per share are non-GAAP
measures.
Weighted average number of shares (m)
|
|
Six months to 30 June
2024 (Unaudited)
|
Six
months to 30 June 2023 (Unaudited)
|
Year to
30 December
2023
(Audited)
|
Ordinary shares in issue
|
|
226.2
|
169.9
|
188.1
|
Own shares held
|
|
(0.4)
|
-
|
(0.4)
|
Basic
|
|
225.8
|
169.9
|
187.7
|
Dilutive contingently issuable
shares
and share options
|
|
4.6
|
4.3
|
3.9
|
Diluted
|
|
230.4
|
174.2
|
191.6
|
At the end of the period, the
Group had nil (30 December 2023: nil) additional share options and
contingently issuable shares granted under share-based payment
schemes that could potentially dilute basic earnings per share in
the future but which have not been included in the calculation
because they are not dilutive or the performance conditions for
vesting were not met based on the position at 30 June
2024.
Headline earnings per share
Headline earnings per share has
been calculated and presented as required by the Johannesburg Stock
Exchange Listings Requirements.
|
|
Six months
to
30 June 2024
(Unaudited)
|
Six
months to
30 June
2023 (Unaudited)
|
Year
to
30 December 2023
(Audited)
|
|
|
|
Basic
|
Diluted
|
|
Basic
|
Diluted
|
|
Basic
|
Diluted
|
Profit/(Loss) (£m)
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
4.5
|
4.5
|
|
6.1
|
6.1
|
|
3.7
|
3.7
|
Revaluation of investment properties
(net of tax)
|
|
|
1.5
|
1.5
|
|
0.3
|
0.3
|
|
8.1
|
8.1
|
Loss/(profit) on disposal of
investment properties (net of tax)
|
-
|
-
|
|
0.6
|
0.6
|
|
0.3
|
0.3
|
Other items 1
|
|
|
0.4
|
0.4
|
|
(0.2)
|
(0.2)
|
|
-
|
-
|
Headline earnings
|
|
|
6.4
|
6.4
|
|
6.8
|
6.8
|
|
12.1
|
12.1
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares (m)
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares in issue
|
|
|
226.2
|
226.2
|
|
169.9
|
169.9
|
|
188.1
|
188.1
|
Own shares held
|
|
|
(0.4)
|
(0.4)
|
|
-
|
-
|
|
(0.4)
|
(0.4)
|
Dilutive contingently issuable
shares and share options
|
-
|
4.6
|
|
-
|
4.3
|
|
-
|
3.9
|
|
|
|
225.8
|
230.4
|
|
169.9
|
174.2
|
|
187.7
|
191.6
|
Headline Earnings per share
|
|
|
2.8p
|
2.8p
|
|
4.1p
|
4.0p
|
|
6.4p
|
6.3p
|
|
|
|
|
|
|
|
|
|
|
|
| |
7
Investment properties
7a
Shopping Centres
|
|
Freehold
|
Leasehold
|
Total
|
|
|
investment
|
investment
|
property
|
|
|
properties
|
properties
|
assets
|
|
|
£m
|
£m
|
£m
|
Valuation
|
|
|
|
|
At 30 December 2023
(Audited)
|
|
288.7
|
80.9
|
369.6
|
Capital
expenditure/(contribution)
|
|
3.7
|
(0.6)
|
3.1
|
Valuation
deficit1
|
|
(1.2)
|
-
|
(1.2)
|
At 30 June 2024 (Unaudited)
|
|
291.2
|
80.3
|
371.5
|
1 £(1.5) million per Income statement (30 June 2023: £(0.3)
million) and Note 3a includes letting fee amortisation adjustment
of £(0.3) million (30 June 2023: £nil).
7b Property assets summary
|
|
|
|
|
Unaudited
30 June
2024
£m
|
Audited
30 December 2023
£m
|
Investment properties at fair value
- Shopping Centres
|
|
|
374.9
|
372.8
|
Head leases treated as finance
leases on investment properties
|
|
|
5.4
|
5.4
|
Unamortised tenant incentives on
investment properties
|
|
|
(8.8)
|
(8.6)
|
IFRS Property Value
|
|
|
|
|
371.5
|
369.6
|
|
|
|
|
|
|
| |
7c Valuations
External valuations were carried
out on all of the property assets detailed in the table above. The
valuations at 30 June 2024 were carried out by independent
qualified professional valuers from CBRE Limited in accordance with
RICS standards. These valuers are not connected with the Group and
their fees are charged on a fixed basis that is not dependent on
the outcome of the valuations.
Real estate valuations are complex
and derived from data that is not widely publicly available and
involves a degree of judgement. For these reasons, the valuations
are classified as Level 3 in the fair value hierarchy as defined by
IFRS 13. The valuations are sensitive to changes in rent profile
and yields. There were no transfers between levels in the
year.
The following table illustrates
the impact of changes in key unobservable inputs (in isolation) on
the fair value of the Group's properties:
|
|
|
|
|
|
|
|
|
|
Impact
on valuations of 5% change in estimated rental value
|
Impact
on valuations of 25bps change in equivalent yield
|
Impact
on valuations of 50bps change in equivalent yield
|
|
Increase
£m
|
Decrease
£m
|
Increase
£m
|
Decrease
£m
|
Increase
£m
|
Decrease
£m
|
|
15.2
|
(15.1)
|
(12.1)
|
12.6
|
(23.3)
|
26.2
|
|
|
|
|
|
|
|
|
|
|
Impact
on valuations of 100bps change in equivalent yield
|
|
|
Increase
£m
|
Decrease
£m
|
|
|
(43.9)
|
56.6
|
|
|
|
|
|
|
|
|
|
|
|
| |
8
Plant and equipment
|
Leasehold
improvements
|
Fixtures and
fittings
|
Computer
equipment
|
Total
|
|
£m
|
£m
|
£m
|
£m
|
Cost
|
|
|
|
|
At 31 December 2023
|
0.3
|
7.0
|
0.9
|
8.2
|
Additions
|
-
|
0.5
|
-
|
0.5
|
At
30 June 2024
|
0.3
|
7.5
|
0.9
|
8.7
|
|
|
|
|
|
Accumulated Depreciation
|
|
|
|
|
At 31 December 2023
|
-
|
(3.9)
|
(0.8)
|
(4.7)
|
Charge for the period
|
(0.1)
|
(0.3)
|
-
|
(0.4)
|
At
30 June 2024
|
(0.1)
|
(4.2)
|
(0.8)
|
(5.1)
|
|
|
|
|
|
Carrying amount
|
|
|
|
|
At
30 June 2024
|
0.2
|
3.3
|
0.1
|
3.6
|
At 30 December 2023
|
0.3
|
3.1
|
0.1
|
3.5
|
|
|
|
|
|
9
Leases
|
Buildings
|
Right of use Assets
|
£m
|
Cost
|
|
At 30 December 2023
(Audited)
|
24.7
|
Additions
|
-
|
|
|
At 30 June 2024
(Unaudited)
|
24.7
|
|
|
Accumulated depreciation
|
|
At 30 December 2023
(Audited)
|
(4.6)
|
Charge for the year
|
(1.2)
|
At 30 June 2024
(Unaudited)
|
(5.8)
|
Carrying value
|
|
At 30 June 2024 (Unaudited)
|
18.9
|
At 30 December 2023
(Audited)
|
20.1
|
|
|
|
| |
Lease commitments relate to the
leasing of the Group's registered office and the leases of the
Snozone business on its Castleford, Madrid and Milton Keynes
sites.
10 Receivables and other assets
|
|
Unaudited
30 June
2024
|
Audited
30 December
2023
|
|
|
£m
|
£m
|
Amounts falling due after one year:
|
|
|
|
Financial assets
|
|
|
|
Interest rate caps
|
|
1.5
|
0.5
|
Non current financial
assets
|
|
1.5
|
0.5
|
|
|
|
|
Non-financial assets
|
|
|
|
Unamortised tenant
incentives
|
|
3.0
|
2.7
|
Unamortised rent-free
periods
|
|
4.6
|
4.6
|
Non current non-financial
assets
|
|
7.6
|
7.3
|
|
|
9.1
|
7.8
|
Amounts falling due within one year:
|
|
|
|
Financial assets
|
|
|
|
Trade receivables (net of
allowances)
|
|
3.7
|
4.3
|
Interest rate swaps
|
|
-
|
0.3
|
Other receivables
|
|
0.1
|
3.8
|
Accrued income
|
|
1.9
|
1.9
|
Current financial assets
|
|
5.7
|
10.3
|
Non-financial assets
|
|
|
|
Prepayments
|
|
4.4
|
4.9
|
Unamortised tenant
incentives
|
|
0.5
|
0.5
|
Unamortised rent-free
periods
|
|
0.8
|
0.8
|
Current non-financial
assets
|
|
5.7
|
6.2
|
|
|
11.4
|
16.5
|
Credit losses are calculated at an
amount equal to lifetime expected credit losses. The expected
credit losses on trade receivables are estimated using a provision
matrix by reference to past default experience of the debtor and an
analysis of the debtor's current financial position, adjusted for
factors that are specific to the debtor and an assessment of both
the current as well as the forecast direction of conditions at the
reporting date.
The group writes off a trade
receivable when there is information indicating that there is no
realistic prospect of recovery. Changes in expected credit loss
allowance arise from increase or decrease in calculated expected
credit loss, as well as amounts written off. The group does not
recognise revenue where collectability is not reasonably expected.
In the case of rental income this relates to tenants who are
insolvent and closed.
11 Cash and cash equivalents
|
|
Unaudited
|
Audited
|
|
|
30 June
|
30
December
|
|
|
2024
|
2023
|
|
|
£m
|
£m
|
Cash at bank
|
|
36.4
|
36.3
|
Restricted security disposals held
in rent accounts
|
|
1.2
|
1.0
|
Other restricted
balances
|
|
2.7
|
0.9
|
Total cash and cash
equivalents
|
|
40.3
|
38.2
|
Cash at bank and in hand include
amounts subject to a charge against various borrowings and may
therefore not be immediately available for general use by the
Group. Of the cash at bank and in hand £20.8 million was
immediately available free of any restrictions or conditions or
held on short term deposit at the period end date (30 December 2023
- £17.8 million). The remaining balances are subject to
meeting conditions or having passed through relevant waterfall
calculations within relevant loan facilities. All of the above
amounts at 30 June 2024 were held in Sterling other than £0.1
million which was held in Euros and £0.5 million in South African
Rand (30 December 2023: £0.4 million in Euros and £0.7m in South
African Rand).
12
Trade and other payables
|
|
30 June
2024
|
30
December
2023
|
|
|
£m
|
£m
|
Amounts falling due after one year:
|
|
|
|
Financial liabilities
|
|
|
|
Share-based NI accrual
|
|
0.2
|
0.3
|
Non-derivative financial
liabilities
|
|
0.2
|
0.3
|
Amounts falling due within one year:
|
|
|
|
Financial liabilities
|
|
|
|
Trade payables
|
|
2.3
|
5.0
|
Accruals
|
|
8.2
|
8.0
|
Other creditors
|
|
12.7
|
12.1
|
Non-derivative financial
liabilities
|
|
23.2
|
25.1
|
Non-financial liabilities
|
|
|
|
Deferred income
|
|
3.9
|
4.8
|
Other taxation and social
security
|
|
0.6
|
0.3
|
|
|
27.7
|
30.2
|
13
Leases
The Group as lessee
At the balance sheet date, the
Company had outstanding commitments for future minimum lease
payments under non-cancellable leases related to land and
buildings, which fall due as set out below. These leases relate to
its office premises and the Snozone business' Basingstoke,
Castleford, Milton Keynes and Madrid sites, as well as leasehold
investment property.
|
|
30 June
2024
£m
|
30
December
2023
£m
|
Lease payments
|
|
|
|
Within one year
|
|
(3.1)
|
(3.1)
|
Between one and five
years
|
|
(9.3)
|
(11.6)
|
After five years
|
|
(125.4)
|
(125.2)
|
|
|
(137.8)
|
(139.9)
|
Lease payments are denominated in
Sterling and have an average remaining lease length of 48 years (30
December 2023: 48 years). Excluding head leases, rentals are
fixed for an average of 1 year (30 December 2023: 1 year). The
Group's leasehold investment property is variable based on a
percentage of performance, with a minimum payment per year of £0.4
million (2023: £0.4 million).
The lease liabilities based on the
present value of payments and associated right of use assets
recognised in the consolidated balance sheet are set out
below.
|
|
30 June
2024
£m
|
30
December
2023
£m
|
Right of use assets
|
|
18.9
|
20.1
|
Current lease liability
|
|
(3.1)
|
(3.1)
|
Non-current lease
liability
|
|
(25.0)
|
(26.0)
|
14
Borrowings
The Group's borrowings are
arranged to ensure an appropriate maturity profile and to maintain
short-term liquidity. There were no defaults or other
breaches of financial covenants that were not waived under any of
the Group borrowings during the current year or the preceding
year.
|
|
Unaudited
30 June
|
Audited
30
December
|
|
|
2024
|
2023
|
Borrowings at amortised cost
|
|
£m
|
£m
|
Secured
|
|
|
|
Fixed and swapped bank
loans
|
|
179.0
|
179.0
|
Variable rate loan
|
|
20.0
|
20.0
|
Total borrowings before
costs
|
|
199.0
|
199.0
|
Unamortised issue costs
|
|
(1.1)
|
(1.3)
|
Total borrowings after costs
|
|
197.9
|
197.7
|
|
|
|
|
Analysis of total borrowings after costs
|
|
|
|
Current
|
|
-
|
42.7
|
Non-current
|
|
197.9
|
155.0
|
Total borrowings after costs
|
|
197.9
|
197.7
|
The fair value of total borrowings
before costs as at 30 June 2024 was £186.5 million (30 December
2023: £187.1 million). At 30 June 2024 the Group had no
undrawn committed facilities. All loans are maintained in
separate ring-fenced Special Purpose Vehicle (SPV) structures
secured against the property interests and other assets within each
SPV. There is no recourse to other Group companies outside of
the respective SPV and no cross-default provisions.
On 8 March 2024 the Group signed
an extension to its £39 million facility on the Ilford Exchange
shopping centre with Dekabank Deutsche Girozentrale. The
agreement extends maturity to September 2025 and provides two
further conditional extension options to further extend maturity to
the end of December 2026 and 2027, respectively. On
commencement of the new extended term the margin is 300 basis
points. The Group has acquired an interest rate cap to hedge the
maximum all in cost at 5.50% until the current maturity of
September 2025. The facility was shown as current at 30
December 2023.
The Hemel Hempstead Marlowes
shopping centre facility was shown as current on 30 December 2023
given there was a technical breach of a covenant as at that date
driven by the administration of Wilko. The technical breach was
subsequently waived, and consequently the facility is shown as
non-current at 30 June 2024.
The following table provides an
analysis of financial instruments that are measured subsequent to
initial recognition at fair value. All of the assets listed were
classified as Level 2, as defined in note 2 to these condensed
financial statements. There were no transfers between Levels in the
year.
|
|
Unaudited
30 June
|
Audited
30
December
|
|
|
2024
|
2023
|
|
|
£m
|
£m
|
Interest rate caps
|
|
1.5
|
0.5
|
Interest rate swaps
|
|
-
|
0.3
|
|
|
1.5
|
0.8
|
Interest rate caps and swaps are
initially recognised at fair value at the date the contract is
entered into and are subsequently remeasured to their fair value at
each balance sheet date. The fair value of forward foreign exchange
contracts is calculated by reference to spot and forward exchange
rates at the balance sheet date. The fair value of interest
rate caps and swaps are calculated by reference to appropriate
forecasts of yield curves between the balance sheet date and the
maturity of the instrument. Changes in fair value are included as
finance income or finance costs in the income statement. Derivative
financial instruments are classified as non-current when they have
a maturity of more than twelve months and are not intended to be
settled within one year. As the group does not apply hedge
accounting, the provisions of IFRS 9 do not apply.
15 Notes to the cash flow statement
|
Unaudited
|
Unaudited
|
Audited
|
|
Six months
to
|
Six
months to
|
Year
to
|
|
30 June
|
30
June
|
30
December
|
|
2024
|
2023
|
2023
|
|
£m
|
£m
|
£m
|
Profit for the period
|
4.5
|
6.1
|
3.7
|
|
|
|
|
Adjusted for:
|
|
|
|
Income tax
charge/(credit)
|
0.6
|
(1.2)
|
(3.6)
|
Finance income
|
(0.4)
|
(0.3)
|
(0.5)
|
Finance expense
|
5.2
|
4.1
|
9.9
|
Finance lease costs (head
leases)
|
-
|
-
|
(0.4)
|
Loss on revaluation of
properties
|
1.5
|
0.3
|
8.1
|
Depreciation of other fixed
assets
|
0.4
|
0.1
|
0.7
|
Snozone interest and
amortisation
|
1.7
|
-
|
3.0
|
Other gains and losses
|
-
|
0.5
|
0.1
|
Decrease/(increase) in
receivables
|
3.6
|
2.5
|
(0.9)
|
Decrease in payables
|
(5.7)
|
(2.5)
|
(0.7)
|
Non-cash movement relating to
share-based payments
|
0.2
|
0.4
|
0.7
|
Net cash from operations
|
11.6
|
10.0
|
20.1
|
|
|
|
| |
16 Net assets per share
|
30 June 2024
(Unaudited)
|
30 December 2023
(Audited)
|
|
|
|
Basic NAV
£m
|
EPRA
NRV
£m
|
EPRA NTA
£m
|
EPRA NDV
£m
|
EPRA NRV
£m
|
Basic
NAV
£m
|
EPRA NTA
£m
|
EPRA NDV
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IFRS Equity attributable to shareholders
|
203.9
|
203.9
|
203.9
|
203.9
|
202.0
|
202.0
|
202.0
|
202.0
|
|
|
Exclude fair value of financial
instruments
|
-
|
(1.5)
|
(1.5)
|
-
|
-
|
(0.8)
|
(0.8)
|
-
|
|
|
Include fair value of fixed interest
rate debt
|
-
|
-
|
-
|
12.5
|
-
|
-
|
-
|
11.9
|
|
|
Net
asset value
|
203.9
|
202.4
|
202.4
|
216.4
|
202.0
|
201.2
|
201.2
|
213.9
|
|
|
Number of shares
|
233.0
|
-
|
-
|
-
|
224.9
|
-
|
-
|
-
|
|
|
Fully diluted number of
shares
|
-
|
237.6
|
237.6
|
237.6
|
-
|
228.8
|
228.8
|
228.8
|
|
|
Net
asset value per share (pence)
|
87.5
|
85.2
|
85.2
|
91.1
|
89.8
|
87.9
|
87.9
|
93.5
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net assets per share is a non-GAAP
measure.
The number of ordinary shares
issued and fully paid at 30 June 2024 was 232,996,247 (30 December
2023: 224,906,731). There have been no changes to the number of
shares from 30 June 2024 to the date of this
announcement.
17 Related party transactions
There have been no material
changes to, or material transactions with, related parties as
described in note 29 of the annual audited financial statements for
the year ended 30 December 2023.
18 Dividends
|
Unaudited
|
Unaudited
|
Audited
|
|
Six months
to
|
Six
months to
|
Year
to
|
|
30 June
|
30
June
|
30
December
|
|
2023
|
2023
|
2023
|
|
£m
|
£m
|
£m
|
Amounts recognised as distributions to equity holders in the
period |
6.6
|
4.7
|
9.5
|
Proposed interim dividend of 2.85p per share for year ended 30
December 2024 |
6.6
|
-
|
-
|
The dividends shown above are
gross of any take-up of Scrip offer.
Adjusted Profit is the total
of Contribution from Shopping Centres, Snozone EBITDA and property
management fees less central costs (including interest but
excluding non-cash charges in respect of long-term incentive
awards) after tax. Adjusted Profit excludes revaluation of
properties, profit or loss on disposal of properties or
investments, gains or losses on financial instruments and
exceptional one-off items. Results from Discontinued Operations are
included up until the point of disposal or reclassification as held
for sale.
Adjusted Earnings per share is
Adjusted Profit divided by the weighted average number of shares in
issue during the year excluding own shares held.
C&R is Capital &
Regional plc, also referred to as the Group or the
Company.
CRPM is Capital &
Regional Property Management Limited, a subsidiary of Capital &
Regional plc, which earns management and performance fees from the
Mall assets and certain associates and joint ventures of the
Group.
Contracted rent is passing
rent and the first rent reserved under a lease or unconditional
agreement for lease but which is not yet payable by a
tenant.
Contribution is net rent less
net interest, including unhedged foreign exchange
movements.
Capital return is the change
in market value during the year for properties held at the balance
sheet date, after taking account of capital expenditure calculated
on a time weighted basis.
Debt is borrowings, excluding
unamortised issue costs.
EPRA earnings per share (EPS) is the profit / (loss) after tax excluding gains on asset
disposals and revaluations, movements in the fair value of
financial instruments, intangible asset movements and the capital
allowance effects of IAS 12 "Income Taxes" where applicable, less
tax arising on these items, divided by the weighted average number
of shares in issue during the year excluding own shares
held.
EPRA LTV is the ratio of debt
to the Market value of properties as defined by the European Real
Estate Association.
EPRA net disposal value (NDV) represents net asset value under a disposal scenario, where
deferred tax, financial instruments and certain other adjustments
are calculated to the full extent of their liability, net of any
resulting tax.
EPRA net reinstatement value (NRV) is net asset value adjusted to reflect
the value required to rebuild the entity and assuming that entities
never sell assets. Assets and liabilities, such as fair value
movements on financial derivatives are not expected to crystallise
in normal circumstances and deferred taxes on property valuation
surpluses are excluded.
EPRA net tangible assets (NTA) is a proportionally consolidated measure, representing
the IFRS net assets excluding the mark-to-market on derivatives and
related debt adjustments, the mark-to-market on the convertible
bonds, the carrying value of intangibles as well as deferred
taxation on property and derivative valuations.
Estimated rental value (ERV) is the Group's external valuers' opinion as to the open market
rent which, on the date of valuation, could reasonably be expected
to be obtained on a new letting or rent review of a unit or
property.
ERV growth is the total
growth in ERV on properties owned throughout the year including
growth due to development.
Gearing is the Group's debt
as a percentage of net assets. See through gearing includes
the Group's share of non-recourse debt in associates and joint
ventures.
Interest cover is the ratio
of Adjusted Profit (before interest, tax, depreciation and
amortisation) to the interest charge (excluding amortisation of
finance costs and notional interest on head leases).
Like-for-like figures, unless
otherwise stated, exclude the impact of property purchases and
sales on year to year comparatives.
Snozone EBITDA or EBITDA is an
alternative performance measure for the Snozone business. It
excludes Depreciation, Amortisation, (notional) Interest, Tax and
non-operational one-off items. It includes rent expense,
based on contractual payments adjusted for rent free periods.
This provides a measure of Snozone trading performance which
removes the profiling impact of IFRS 16 that would otherwise see a
significantly higher charge in early years of a lease and
significantly lower net charge in later years.
Loan to value (LTV) is the
ratio of debt excluding fair value adjustments for debt and
derivatives, to the Market value of properties.
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Market value is an opinion of
the best price at which the sale of an interest in a property would
complete unconditionally for cash consideration on the date of
valuation as determined by the Group's external or internal
valuers. In accordance with usual practice, the valuers report
valuations net, after the deduction of the prospective purchaser's
costs, including stamp duty, agent and legal fees.
Net Administrative Expenses to Gross Rent
is the ratio of Administrative Expenses net of
external fee income to Gross Rental income including the Group's
share of Joint Ventures and Associates
Net assets per share (NAV per share)
are shareholders' funds divided by the number of
shares held by shareholders at the year end, excluding own shares
held.
Net initial yield (NIY) is the
annualised current rent, net of revenue costs, topped-up for
contractual uplifts, expressed as a percentage of the capital
valuation, after adding notional purchaser's costs.
Net debt to property value is
debt less cash and cash equivalents divided by the property
value.
Net interest is the Group's
share, on a see-through basis, of the interest payable less
interest receivable of the Group and its associates and joint
ventures.
Net rent or Net rental income (NRI) Net Rental
Income is rental income from properties, less provisions for
expected credit losses, property and management costs. It is a
standard industry measure.
Nominal equivalent yield (NEY)
is a weighted average of the net initial yield and reversionary
yield and represents the return a property will produce based upon
the timing of the income received, assuming rent is received
annually in arrears on gross values including the prospective
purchaser's costs.
Occupancy cost ratio is the
proportion of a retailer's sales compared with the total cost of
occupation being: rent, business rates, service charge and
insurance. Retailer sales are based on estimates by third party
consultants which are periodically updated and indexed using
relevant data from the C&R Trade Index.
Occupancy rate is the ERV of
occupied properties expressed as a percentage of the total ERV of
the portfolio, excluding development voids.
Passing rent is gross rent
currently payable by tenants including car park profit but
excluding income from non-trading administrations and any assumed
uplift from outstanding rent reviews.
Rent to sales ratio is
Contracted rent excluding car park income, ancillary income and
anchor stores expressed as a percentage of net sales.
REIT - Real Estate Investment
Trust.
Return on equity is the total
return, including revaluation gains and losses, divided by opening
equity plus time weighted additions to and reductions in share
capital, excluding share options exercised.
Reversionary percentage is the
percentage by which the ERV exceeds the passing rent.
Reversionary yield is the
anticipated yield to which the net initial yield will rise once the
rent reaches the ERV.
Temporary lettings are those
lettings for one year or less.
Total property return incorporates net rental income and capital return expressed as
a percentage of the capital value employed (opening market value
plus capital expenditure) calculated on a time weighted
basis.
Total return is the Group's
total recognised income or expense for the year as set out in the
consolidated statement of comprehensive income expressed as a
percentage of opening equity shareholders' funds.
Total shareholder return (TSR) is a performance measure of the Group's share price over time.
It is calculated as the share price movement from the beginning of
the year to the end of the year plus dividends paid, divided by
share price at the beginning of the year.
Variable overhead includes
discretionary bonuses and the costs of awards to Directors and
employees made under the 2018 LTIP and other share schemes which
are spread over the performance period.
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