TIDMCRC
RNS Number : 8215I
Circle Property PLC
07 December 2022
7 December 2022
Circle Property Plc
("Circle", the "Company" or the "Group")
Interim Results for the six months ended 30 September 2022
DIVESTMENT PROGRAMME CONTINUES
Circle Property Plc (AIM: CRC) is pleased to announce interim
results for the six months ended 30 September 2022.
John Arnold, Chief Executive of Circle Property Plc, said:
"We continue to progress our divestment strategy with a view to
returning the net proceeds to shareholders.
The more challenging macroeconomic backdrop impacted the broader
property investment market after the period. This has meant our
rate of sales has slowed in recent months from the expedited rate
achieved earlier in the year and pricing has also been softer.
Nevertheless, we are still able to divest assets successfully and
remain steadfast in generating the best value possible for
shareholders.
Circle is debt free following these well-timed asset disposals
and still expects to make the first capital distribution to
shareholders in Q1 2023."
Highlights
-- Approximately 60% of the property portfolio, by value, has
been disposed of since the announcement of the divestment strategy
in February 2022.
-- Proven track record of divesting assets at prices in excess
of book valuations to extract maximum value, albeit not at
historical premiums during the reported period due to the weakened
property market.
-- The Group's loan facility was repaid in full in June 2022, leaving the Group debt free.
-- At the period end, the Group's cash balance was GBP21
million, ahead of an expected return of capital to shareholders in
Q1 2023.
-- Unaudited net asset value ("NAV") of GBP2.73 per share as at
30 September 2022 (31 March 2022: GBP2.81; 30 September 2021:
GBP2.74).
-- Asset management continues with the refurbishment of K3 Kents
Hill, Milton Keynes. Due to the evolving requirements of the
tenant, refurbishment costs have increased from approximately
GBP2.2 million to approximately GBP2.7 million and completion is
expected to take place in December 2022.
Post period end
-- On 6 October 2022, the Group completed the sale of Elizabeth
House, Staines for a consideration of GBP3.5 million.
-- On 23 November 2022, the Group exchanged contracts for the
sale of Somerset House, Birmingham for a consideration of GBP15.180
million. Completion is expected to take place by the end of
February 2023.
-- The letting of K3, Kents Hill Business Park was completed and
the sale at GBP4.5 million is expected to complete before the end
of December 2022.
Outlook
-- Post period, the disposals below valuation and the issue of
918,793 Ordinary Shares to the Executives under the Company's LTIP
announced in October 2022 (the "LTIP Shares"), has impacted the
current estimated NAV per share. The issue of the LTIP Shares had a
negative dilutive effect on the current estimated NAV of 9 pence
per share, reducing it to GBP2.64.
-- In addition, due to challenging market conditions, the Board
anticipates that by the end of the sales programme, the estimated
NAV is expected to reduce further. Further announcements will be
made as appropriate, as and when further disposals are made.
-- Confident in delivering further asset sales to maximise
returns, albeit selling into a more difficult investment
market.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK version of the EU Market Abuse Regulation (2014/596) which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended and supplemented from time to time.
+44 (0)207 930
Circle Property Plc 8503
John Arnold, CEO
Edward Olins, COO
+44 (0) 207 397
Cenkos Securities 8900
Katy Birkin
Mark Connelly
George Lawson
+44 (0) 203 897
Radnor Capital Partners 1830
Joshua Cryer
Iain Daly
+44 (0) 203 757
Camarco 4992
Ginny Pulbrook
Rosie Driscoll
Toby Strong
About Circle Property Plc
Circle is not a Real Estate Investment Trust (REIT) and has
historically actively recycled proceeds from asset sales into its
refurbishment and redevelopment pipeline to generate attractive
total returns. Since February 2022, the Group has embarked on an
orderly break-up of the portfolio to return maximum value to
shareholders.
Chief Executive's Statement
The property market reached record highs in certain sectors
earlier in 2022. However, this has since reversed as a consequence
of elevated inflation, market uncertainty, the war in Ukraine, the
rising cost of capital and other macroeconomic challenges.
Although the property market has weakened considerably after the
reported period, we are pleased that the majority of the properties
were sold into a more receptive market earlier in the year. We
moved quickly following the announcement of the divestment
strategy, taking advantage of a buoyant market for regional
offices, achieving prices in excess of book valuations. As a
result, we expect the aggregate of all disposal prices to be in the
region of 95% of the March 2022 valuations when regional office
valuations were at their peak.
Disposals during the period included the completion of the sale
of K1 & K2 at Kents Hill Business Park, Milton Keynes ("Kents
Hill") in August 2022 at a price of GBP12.73 million, with a
further payment of GBP4.5 million agreed for K3 following
completion of the contracted letting to Kuehne+Nagel (subsequently
let on 30 November 2022) and expected to complete by the end of
December 2022. Moreover, Cheltenham House, Birmingham sold for
GBP4.664 million (completed September 2022) and 720 Aztec West in
Bristol sold for GBP2.52 million (completed May 2022).
The occupational market is challenging but our office portfolio
has continued to benefit from workers returning to the workplace,
with occupancy and usage high. Consequently, rent collection is no
longer a topic as it was during the period of the pandemic, with
rent collection at expected levels. The Group's active asset
management approach has enabled us to capture demand, lease vacant
space and deliver growth, at K3 Kents Hill, where we have added
additional refurbishment capex in to meet the requirements of the
incoming tenant.
As we further progress against our programme of asset disposals,
the Board remains committed to maximising returns and delivering
value to shareholders. Given the divestment strategy and plans for
two returns of capital directly to shareholders, with the first
expected in Q1 2023, the Board has resolved that there will be no
interim dividend.
It is the Board's intention to liquidate all the remaining
assets before the end of our current financial year, so long as
there remains interested buyers at respectable pricing levels.
Condensed consolidated statement of comprehensive income
for the 6 months ended 30 September 2022
6 months 6 months 12 months
to to to
30 September 30 September 31 March
2022 2021 2022
Note (unaudited) (unaudited) (audited)
GBP GBP GBP
--------------------------------------- ----- -------------- -------------- ------------
Rental income 4 2,416,643 3,233,143 7,458,236
Other income 4 418,168 983,509 1,581,773
--------------------------------------- ----- -------------- -------------- ------------
2,834,811 4,216,652 9,040,009
Property expenses 5 (643,672) (1,219,063) (2,082,925)
Net rental income 2,191,139 2,997,589 6,957,084
Administrative expenses 6 (978,252) (944,649) (3,583,744)
Operating profit 1,212,887 2,052,940 3,373,340
(Loss)/gain on disposal of investment
properties (1,683,575) 599,446 2,070,908
(Loss)/gain on revaluation of
investment properties 11 (1,074,273) (1,300,804) 1,837,721
Operating (loss)/profit after revaluation
of investment properties (1,544,961) 1,351,582 7,281,969
Finance income 7 43,883 26 192
Finance costs 8 (444,191) (760,934) (1,488,907)
Net finance costs (400,308) (760,908) (1,488,715)
(Loss)/profit for the period/year
before taxation (1,945,269) 590,674 5,793,254
Taxation 9 446,383 (156,562) (1,425,337)
Total comprehensive (loss)/profit
for the period/year (1,498,886) 434,112 4,367,917
--------------------------------------- ----- -------------- -------------- ------------
(Loss)/earnings per share 10 (0.05) 0.02 0.15
--------------------------------------- ----- -------------- -------------- ------------
NAV per share 2.73 2.74 2.81
--------------------------------------- ----- -------------- -------------- ------------
There is no comprehensive income other than that included in the
loss for the period. All of the loss for the period is attributable
to the owners of the Company.
All items in the above statement derive from continuing
operations.
Condensed consolidated statement of financial position
as at 30 September 2022
30 September 30 September 31 March
Note 2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
---------------------------------- ----- ------------- ------------- ------------
Non-current assets
Investment properties 11 27,496,279 99,243,539 32,399,476
Right of use assets 61,959 2,316 75,728
Property plant and equipment 54,344 52,940 49,025
Lease incentives and receivables 13 771,372 9,966,711 1,350,524
Deferred tax asset 564,030 1,191,464 406,612
---------------------------------- ----- ------------- ------------- ------------
28,947,984 110,456,970 34,281,365
Current assets
Investment properties 11 20,328,627 - 39,994,194
Lease incentives and receivables 13 3,859,460 2,731,180 3,858,790
Assets held for sale 12 6,400,000 20,000,000 2,200,000
Cash and cash equivalents 20,892,395 8,566,762 25,303,400
---------------------------------- ----- ------------- ------------- ------------
51,480,482 31,297,942 71,356,384
Total assets 80,428,466 141,754,912 105,637,749
---------------------------------- ----- ------------- ------------- ------------
Equity
Stated capital 42,542,179 42,542,179 42,542,179
Treasury share reserve 1,047,684 1,170,961 1,047,684
Retained earnings 33,570,840 33,866,695 36,060,113
---------------------------------- ----- ------------- ------------- ------------
Total equity 77,160,703 77,579,835 79,649,976
Non-current liabilities
Loan borrowings 14 - 60,249,656 -
Trade and other payables 15 1,247,814 - 1,055,871
Lease liabilities for right of
use assets 34,393 - 47,398
Deferred tax liability 540,353 379,226 923,046
---------------------------------- ----- ------------- ------------- ------------
1,822,560 60,628,882 2,026,315
Current liabilities
Trade and other payables 15 1,419,603 3,539,026 2,631,128
Loan borrowings 14 - - 21,305,537
Lease liabilities for right of
use assets 25,600 7,169 24,793
---------------------------------- ----- ------------- ------------- ------------
1,445,203 3,546,195 23,961,458
Total liabilities 3,267,763 64,175,077 25,987,773
---------------------------------- ----- ------------- ------------- ------------
Total liabilities and equity 80,428,466 141,754,912 105,637,749
---------------------------------- ----- ------------- ------------- ------------
The condensed consolidated interim financial statements were
approved by the Board of Directors on 6 December 2022.
Condensed consolidated statement of changes in equity
for the 6 months ended 30 September 2021
Treasury Share-based
Stated share payment Retained
capital capital reserve earnings Total
GBP GBP GBP GBP GBP
----------------------- ----------- --------- ------------ ------------ ------------
As at 1 April 2021 42,162,178 380,001 1,047,684 33,814,453 77,404,316
Profit for the period - - - 1,184,112 1,184,112
Share-based payments - - 123,277 - 123,277
Dividends - - - (1,131,870) (1,131,870)
As at 30 September
2021 42,162,178 380,001 1,170,961 33,866,695 77,579,835
Loss for the period - - - 3,183,805 3,183,805
Share-based payments - - 314,618 - 314,618
Reclassification - - (437,895) - (437,895)
Dividends - - - (990,387) (990,387)
As at 31 March 2022 42,162,178 380,001 1,047,684 36,060,113 79,649,976
Loss for the period - - - (1,498,886) (1,498,886)
Dividends - - - (990,387) (990,387)
As at 30 September
2022 42,162,178 380,001 1,047,684 33,570,840 77,160,703
------------------------ ----------- --------- ------------ ------------ ------------
Condensed consolidated statement of cash flows
for the 6 months ended 30 September 2022
6 months 6 months 12 months
to to to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
--------------------------------------- -------------- -------------- -------------
Cash flows from operating activities
(Loss)/profit for the period before
taxation (1,945,269) 1,340,674 5,793,254
Adjustments for:
Finance income (43,883) (26) (192)
Finance expense 444,191 760,934 1,488,907
Depreciation 9,241 7,785 16,715
Amortisation of right of use assets 13,769 18,700 30,196
Loss/(gain) on revaluation of
investment properties 1,074,273 1,300,804 (1,837,721)
Loss/(gain) on disposal of investment
properties 1,683,575 (599,446) (2,070,908)
Gain on revaluation of assets
held for sale - (750,000) -
Share based payments - 123,277 437,895
(Increase)/decrease in trade and
other receivables (246,335) 412,560 (207,344)
(Decrease)/increase in trade and
other payables (762,424) (334,478) 17,065
Cash (used in)/from operating
activities 227,138 2,280,784 3,667,867
Interest paid (401,743) (655,725) (1,332,610)
Interest received 20,161 26 192
Taxation paid - - (480,779)
Net cash (used in)/from operating
activities (154,444) 1,625,085 1,854,670
---------------------------------------- -------------- -------------- -------------
Cash flows from investing activities
Cost of refurbishment of investment
properties (1,497,510) (1,084,488) (2,089,004)
Proceeds from disposal of investment
properties 19,866,425 3,436,621 61,009,583
Cost of additions of property
plant and equipment (14,561) (6,315) (11,330)
Net cash from investing activities 18,354,354 2,345,818 58,909,249
---------------------------------------- -------------- -------------- -------------
Cash flows from financing activities
Repayment of borrowings (21,480,656) (1,775,000) (40,819,344)
Payment of lease liabilities (14,430) (20,075) (41,722)
Dividends paid (990,387) (1,131,870) (2,122,257)
Net cash used in financing activities (22,485,473) (2,926,945) (42,983,323)
---------------------------------------- -------------- -------------- -------------
Net (decrease)/increase in cash
and cash equivalents (4,285,563) 1,043,958 17,780,596
Cash and cash equivalents at the
beginning of the period 25,303,400 7,522,804 7,522,804
---------------------------------------- -------------- -------------- -------------
Cash and cash equivalents at the
end of the period 21,017,837 8,566,762 25,303,400
---------------------------------------- -------------- -------------- -------------
Notes to the condensed consolidated interim financial
statements
for the 6 months ended 30 September 2022
1 General information
These condensed consolidated interim financial statements are
for Circle Property Plc ("the Company") and its subsidiary
undertakings (together referred to as the "Group").
The Company's shares are admitted to trading on AIM, a market
operated by the London Stock Exchange plc. The Company is domiciled
and registered in Jersey, Channel Islands. The address of its
registered office is 3rd Floor, IFC5, Castle Street, St Helier,
Jersey, JE2 3BY.
The nature of the Company's operations and its principal
activities are that of property investment in the UK.
2 Principal accounting policies
Basis of preparation
The condensed consolidated interim financial statements are
prepared under the historical cost convention, on a basis other
than going concern basis and in accordance with International
Financial Reporting Standards and IFRIC interpretations adopted for
use in the UK ("IFRS") and with those parts of the Companies
(Jersey) Law, 1991 applicable to companies preparing their accounts
under IFRS.
The condensed consolidated interim financial statements
contained in this document do not constitute statutory accounts
under Companies (Jersey) Law 1991. In the opinion of the directors,
the condensed consolidated interim financial statements for this
period fairly presents the financial position, result of operations
and cash flows for this period.
The condensed consolidated interim financial statements have not
been audited, nor have they been reviewed by the Company's auditors
in accordance with the International Standard on Review Engagements
2410 issued by the Auditing Practices Board.
Statutory financial statements for the year ended 31 March 2022
were approved by the Board of Directors on 15 July 2022. The report
of the auditors on those financial statements was unqualified,
however, the report included an emphasis of matter on the non-going
concern basis preparation of the Company.
Statement of compliance
The Interim Report includes the consolidated interim financial
statements which have been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting'.
The condensed interim financial statements should be read in
conjunction with the annual financial statements for the year ended
31 March 2022, which have been prepared in accordance with IFRS as
adopted by the United Kingdom and applicable law.
Going concern
In February 2022, the Group provided an update on its future
strategy whereby it would make targeted property sales, whilst
investing in and actively managing the remainder of the property
portfolio, over an extended period of two to three years. The
proceeds of the future disposals were to be utilised to continue to
reduce borrowings with the remaining proceeds to be returned to
shareholders in an orderly and efficient manner.
Due to the Group's intention to pursue this revised strategy,
the interim financial statements have been prepared on a basis
other than going concern.
In preparing the financial statements on an alternate basis, the
Board has continued to apply the requirements of IFRS taking into
account that the Group is not intended to continue as a going
concern in the foreseeable future.
This has resulted in a reclassification of investment properties
and associated lease incentive assets that are expected to be
disposed of in the period ending 30 September 2023 as current
assets in accordance with IAS 1. There has been no impact on the
measurement of assets and liabilities as at 30 September 2022. No
additional provisions have been recognised as at 30 September 2022
in relation to the costs expected to be incurred in winding down
the Group's operations.
The remainder of the property portfolio continues to be actively
managed with strong rental collections and the timely recovery of
any arrears. In assessing the Group's ability to continue
operating, the Group's cash forecasts have been modelled based on
the circumstances of each tenant on an individual basis and all
envisaged development expenditure has been accounted for. Rental
collections continue to be monitored on a monthly basis with
payment plans agreed for the collection of overdue amounts.
New Standards adopted at 1 January 2022
There are no accounting pronouncements which have become
effective from 1 January 2022 that have a significant impact on the
Group's interim condensed consolidated financial statements.
Significant accounting policies
The accounting policies applied by the Group in these
half-yearly results are the same as those applied by the Group in
its consolidated financial information in its 2022 Annual Report
and Accounts.
Areas of estimates and judgement
In preparing these condensed consolidated interim financial
statements, management has made judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income, and
expenses. Actual results may differ from these estimates.
The judgements, estimates and assumptions applied in the Group's
consolidated interim financial statements, including the key
sources of estimation uncertainty, were the same as those applied
in the Group's last annual financial statements for the year ended
31 March 2022.
3 Operating segments
During the period the Group operated in one geographical
segment, which is the United Kingdom, and one reporting segment,
which is investment in commercial property. Therefore, no segmental
reporting is required.
4 Revenue 6 months 6 months 12 months
to to to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
---------------------------- -------------- -------------- ----------
Rental income 2,223,900 3,337,533 6,904,275
Lease incentive adjustment 192,743 (104,390) 553,961
------------------------------ -------------- -------------- ----------
2,416,643 3,233,143 7,458,236
Insurance recovery 65,373 100,268 125,279
Service charge income 334,489 798,241 1,324,494
Other income 18,306 85,000 132,000
------------------------------ -------------- -------------- ----------
418,168 983,509 1,581,773
2,834,811 4,216,652 9,040,009
---------------------------- -------------- -------------- ----------
5 Property expenses 6 months 6 months 12 months
to to to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
---------------------------------- -------------- -------------- ----------
Property expenses 15,119 33,292 78,485
Property service charges 184,358 221,610 393,323
Property repairs and maintenance
costs - 28,753 28,753
Property insurance 60,305 75,048 146,483
Property rates 49,401 62,119 111,387
Recoverable service charge costs 334,489 798,241 1,324,494
643,672 1,219,063 2,082,925
---------------------------------- -------------- -------------- ----------
6 Administrative expenses 6 months 6 months 12 months
to to to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
-------------------------------- -------------- -------------- ----------
Staff costs 515,224 506,001 2,167,519
Administration fees 150,563 153,200 308,302
Legal and professional fees 185,592 176,914 589,238
Audit fees 41,647 33,500 75,630
Accountancy fees 1,950 2,445 6,424
Rent, rates and other office
costs 7,689 9,113 10,786
Other overheads 52,577 36,991 72,941
Depreciation of tangible fixed
assets 9,241 7,785 16,715
Amortisation of right of use
assets 13,769 18,700 30,196
Waiver of rental arrears - - 200,000
Provision for doubtful debts - - 105,993
978,252 944,649 3,583,744
-------------------------------- -------------- -------------- ----------
7 Finance income 6 months 6 months 12 months
to to to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
------------------ -------------- -------------- ----------
Bank interest 43,883 26 192
43,883 26 192
------------------ -------------- -------------- ----------
8 Finance costs 6 months 6 months 12 months
to to to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
--------------------------------- -------------- -------------- ----------
Loan interest 153,185 643,284 1,209,950
Loan commitment fees 25,100 17,739 71,949
Amortisation of lending costs 175,119 101,972 202,197
Interest on long-term incentive
payment 88,555 - 5,111
Interest on lease liabilities 2,232 (2,061) (300)
444,191 760,934 1,488,907
--------------------------------- -------------- -------------- ----------
9 Taxation 6 months 6 months 12 months
to to to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
---------------------------------- -------------- -------------- ----------
Current tax 93,729 159,356 99,459
Deferred tax (credit) / charge (540,112) (2,794) 433,958
Impairment of deferred tax asset - - 891,920
(446,383) 156,562 1,425,337
---------------------------------- -------------- -------------- ----------
Basic earnings per share has been calculated on profit after tax
attributable to ordinary shareholders for the period (as shown on
the condensed consolidated statement of comprehensive income) and
the weighted average number of ordinary shares in issue during the
period.
6 months 6 months 12 months
to to to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
---------------------------------------------- -------------- -------------- -----------
(Loss)/profit for the period (1,615,536) 434,112 4,367,917
------------------------------------------------ -------------- -------------- -----------
Weighted average number of shares (excluding
treasury shares) 28,296,762 28,296,762 28,296,792
----------------------------------------------- -------------- -------------- -----------
(Loss)/earnings per ordinary
share: (0.06) 0.02 0.15
------------------------------------------------ -------------- -------------- -----------
10 Diluted earnings per share 6 months 6 months 12 months
to to to
30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
----------------------------------- -------------- -------------- -----------
(Loss)/profit for the period (1,615,536) 434,112 4,367,917
------------------------------------- -------------- -------------- -----------
Weighted average number of shares 29,183,396 29,322,398 29,183,396
------------------------------------- -------------- -------------- -----------
Profit/(loss) per ordinary share: (0.06) 0.01 0.15
------------------------------------- -------------- -------------- -----------
11 Investment properties 30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
------------------------------------- ------------- ------------- -------------
Opening fair value per valuation
report 75,700,000 132,150,000 132,150,000
Cost of refurbishment of investment
properties 1,281,530 1,342,369 2,296,994
Disposal of investment properties (19,350,000) (2,837,175) (58,938,675)
(Loss)/gain on revaluation of
investment properties (1,074,273) (1,300,804) 1,837,721
Lease incentive amortisation 192,743 (104,390) 553,960
Reclassification of assets held
for sale (6,400,000) (19,250,000) (2,200,000)
Fair value of investment properties
per valuation report 50,350,000 110,000,000 75,700,000
-------------------------------------- ------------- ------------- -------------
Unamortised lease incentives (2,525,094) (10,756,461) (3,306,330)
Carrying value 47,824,906 99,243,539 72,393,670
--------------------------------------- ------------- ------------- -------------
Following the amendment of the basis of preparation of the
financial statements, investment properties and the unamortised
lease incentives thereon have been recognised as current and
non-current assets dependent on the anticipated disposal date. At
30 September 2022, GBP29.25 million of the total value of the
investment property of GBP50.35 million has been recognised as a
current asset and GBP21.1 million has been recognised as a
non-current asset.
At 30 September 2022, both K3, Kents Hill Park and Elizabeth
House, are classified as held for sale given the properties meets
IFRS 5 criteria (2021: 720 Aztec West).
The fair value of the Group's investment properties at 30
September 2022 has been arrived at on the basis of valuation
carried out by Savills (UK) Limited. The valuation was carried out
in accordance with the Practice Statements contained in the
Appraisal and Valuation Standards as published by the RICS. In
forming their opinion of the fair value, the independent valuer's
had regard to the current best use of the property, its investment
attributes, and recent comparable transactions. The valuation was
carried out using the "All Risks Yield" method taking into
consideration both sales and rental evidence and formulating the
opinion of market value taking into account the properties'
locations, specifications, and specific characteristics.
At 30 September 2022, the fair value of the Group's investment
properties per the valuation report amounted to GBP50.35 million
(2021: GBP110 million). The difference between the fair value of
the investment properties per the valuation report and the fair
value per the balance sheet of GBP2,525,094 (2021: GBP10,756,461)
relates to unamortised lease incentives which are recorded in the
financial statements within non-current and current assets.
The Group had pledged all of its investment properties to secure
banking facilities granted to the Group as detailed in note 14. On
22 June 2022 the banking facilities were repaid and the security
released.
12 Assets held for sale 30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
-------------------------------- ------------- ------------- ----------
Opening balance 2,200,000 - -
Reclassification of K3, Kents
Hill Park 2,900,000 - -
Reclassification of Elizabeth
House, London Road 3,500,000 - -
Reclassification of One Castle
Park, Bristol - 19,250,000 -
Reclassification of 720 Aztec
West - - 2,200,000
Disposal of 720 Aztec West (2,200,000) - -
Gain on revaluation of asset
s held for sale - 750,000 -
Closing balance 6,400,000 20,000,000 2,200,000
---------------------------------- ------------- ------------- ----------
On 11 August 2022, the Group exchanged contracts on the sale of
Elizabeth House, London Road to Map Commercial Properties Limited
for a consideration of GBP3.5 million. Completion took place on 6
October 2022.
On 19 August 2022, the Group exchanged contracts on the sale of
Kents Hill, Milton Keynes (buildings K1, K2 and K3) to Corum XL,
for a consideration of GBP17.23 million. The sale of buildings K1
and K2 completed simultaneously on exchange at a sale price of
GBP12.73 million. Completion of the sale of building K3, at a sale
price of GBP4.5 million, is expected to take place prior to the end
of the calendar year, following the completion of the refurbishment
currently underway.
13 Lease incentives and receivables 30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
------------------------------------- ------------- ------------- ----------
Non-current
Lease incentives 771,372 9,966,711 1,350,524
--------------------------------------- ------------- ------------- ----------
Current
Lease incentives 1,753,721 789,750 1,955,807
Amounts due from property agents 15,369 51,586 77,491
Tenant deposits 225,351 272,662 225,351
VAT 125,442 - -
Amounts due from tenants 1,257,606 1,379,759 1,426,867
Provision for doubtful debts (105,993) - (105,993)
Other receivables 587,964 237,423 279,267
3,859,460 2,731,180 3,858,790
------------------------------------- ------------- ------------- ----------
14 Loan borrowings 30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
------------------------------- ------------- ------------- -------------
Brought forward 21,305,537 61,922,684 61,922,684
Loan repayments (21,480,656) (1,775,000) (40,819,344)
Amortisation of lending costs 175,119 101,972 202,197
Total borrowings - 60,249,656 21,305,537
--------------------------------- ------------- ------------- -------------
The Group was party to a revolving facility, with NatWest and
HSBC. The facility was a GBP60 million revolving facility with an
accordion option of up to GBP40 million. The facility had a four
year term, repayable on 13 February 2023.
The facility was secured by a first and only legal charge over
the Group's investment properties, an assignment of rental income,
charges over specified bank accounts of the Group and a floating
charge granted over all assets of the Group.
The revolving facility was fully repaid by the Group on 22 June
2022.
15 Trade and other payables 30 September 30 September 31 March
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
----------------------------- ------------- ------------- ----------
Non-current
Long-term incentive payment 1,247,814 - 1,055,871
------------------------------- ------------- ------------- ----------
Current
Trade payables 16,246 47,200 166,312
Property improvement costs 19,443 285,314 235,423
Wages and salaries 27,755 26,223 352,723
Deferred income 896,120 1,752,940 1,210,499
Rental deposit accounts 225,351 272,662 225,351
Finance costs - 279,467 223,458
VAT - 195,485 25,307
Valuation fee 9,600 13,200 24,000
Audit fees 39,000 33,500 75,630
Administration fees - - 66
Current taxation 186,088 633,035 92,359
1,419,603 3,539,026 2,631,128
----------------------------- ------------- ------------- ----------
16 Subsequent events
On 6 October 2022, the Group completed the sale of Elizabeth
House, Staines for a consideration of GBP3.5 million.
On 11 October 2022, John Arnold and Edward Olins exercised their
rights to acquire, for nil consideration, 466,649 and 419,984
ordinary shares of no par value ("Ordinary Shares") respectively.
The issue of 886,633 Ordinary Shares was satisfied by 255,034
Ordinary Shares which were held in treasury and the issue of a
further 631,599 new Ordinary Shares. Following the exercise, the
Company had a total of 29,183,395 Ordinary Shares in issue.
On 14 October 2022, John Arnold was issued a further 32,160
Ordinary Shares in respect of the accrued dividend attributable to
his Long Term Incentive Plan shares issued on 11 October 2022.
Edward Olins chose to receive the accrued dividend in cash.
Following the issue, the Company has a total of 29,215,555 Ordinary
Shares in issue.
On 23 November 2022, the Group exchanged contracts for the sale
of Somerset House, Birmingham for a consideration of GBP15.18
million. Completion is expected to take place by the end of
February 2023.
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END
IR VQLFBLLLFFBB
(END) Dow Jones Newswires
December 07, 2022 02:00 ET (07:00 GMT)
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